Where output gains raise population rather than living standards, per-capita income returns to subsistence.
Malthus's 1798 argument. Malthusian models capture important features of many pre-industrial economies, especially the long-run interaction between wages, population and fixed resources, though economic historians disagree about how strong and universal the feedback was and when it broke down. Boserup's counter-argument is the standing objection.
In practice
- Note it described most of human history accurately and stopped applying within decades of publication.
- Boserup's counter-argument is why: population pressure induced intensification, so the density Malthus feared supplied both the problem and the labour to solve it.
- Possible explanations
- The explanation is a feedback loop: higher output raises the number surviving to reproduce, which spreads the same output over more people until income returns to subsistence.
- In its favour
- Malthusian models fit long stretches of pre-industrial data, where wages and population move in the predicted opposition, and the mechanism is not in doubt for populations without contraception or productivity growth.
- Against it
- Historians disagree about how strong and universal the feedback was and when it ceased to bind, and the trap failed to close after industrialisation, when income and population rose together for two centuries.
- Standing
- Historians disagree about how strong and universal the feedback was, and about when it ceased to bind.
- Subject
- Economics & Incentives
- Essay
- The theories behind every argument about money