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Comment on ‘‘From Malthus to Solow: How did the Malthusian economy really evolve?Lee Craig * North Carolina State University, Economics NCSU-Campus Box 8110, Raleigh, NC 27695-8110, United States Received 15 August 2007; accepted 11 October 2007 Available online 26 October 2007 The work of Thomas Robert Malthus offers a cautionary tale for theorists who might be tempted into forecasting. Unsatisfied with positing a set of if-then propositions con- cerning labor markets and household behavior, most prominently fertility and mortality, Malthus looked at the past and the present, and, failing to first invent time series econo- metrics, he forecasted a future that never would be – at least not in England. Unlike his contemporary, David Ricardo, Malthus was not much of a formal model builder. Thus it is somewhat ironic that the model that bears his name has become so commonplace in economic discourse that, like the t-statistic and the Dickey–Fuller test, it is invoked without reference to the man or his work. 1 The foundation of, what has come to be called, the Malthusian model can be seen clearly enough in the first (1798) edition – there would ultimately be six – of An Essay on the Principle of Population as It Affects the Future Improvement of Society, with Remarks on the Speculations of Mr. Godwin, M. Condorcet, and Other Writers. By the time his Sum- mary View was published in 1830, Malthus had become a household name. And little won- der. His Essay contained such delicate policy recommendations as: 0164-0704/$ - see front matter Ó 2007 Elsevier Inc. All rights reserved. doi:10.1016/j.jmacro.2007.10.005 * Tel.: +1 919 513 2870; fax: +1 919 515 5613. E-mail address: [email protected] 1 For example, Haines et al. explain the decline in adult mean stature in the mid-nineteenth century United States (the so-called ‘‘antebellum puzzle) as a ‘‘Malthusian squeeze(2003, p. 408), and, with respect to the impact of technological change on population, Tsoulouhas refers to ‘‘Malthusian causality(1992, p. 197). Neither cites Malthus; nor do Crafts and Mills (2009), Galor and Weil (2000), or Lee and Anderson (2002), all of which are cited below. Available online at www.sciencedirect.com Journal of Macroeconomics 31 (2009) 94–97 www.elsevier.com/locate/jmacro

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Page 1: Comment on “From Malthus to Solow: How did the Malthusian economy really evolve?”

Available online at www.sciencedirect.com

Journal of Macroeconomics 31 (2009) 94–97

www.elsevier.com/locate/jmacro

Comment on ‘‘From Malthus to Solow: How didthe Malthusian economy really evolve?”

Lee Craig *

North Carolina State University, Economics NCSU-Campus Box 8110, Raleigh, NC 27695-8110, United States

Received 15 August 2007; accepted 11 October 2007Available online 26 October 2007

The work of Thomas Robert Malthus offers a cautionary tale for theorists who mightbe tempted into forecasting. Unsatisfied with positing a set of if-then propositions con-cerning labor markets and household behavior, most prominently fertility and mortality,Malthus looked at the past and the present, and, failing to first invent time series econo-metrics, he forecasted a future that never would be – at least not in England. Unlike hiscontemporary, David Ricardo, Malthus was not much of a formal model builder. Thusit is somewhat ironic that the model that bears his name has become so commonplacein economic discourse that, like the t-statistic and the Dickey–Fuller test, it is invokedwithout reference to the man or his work.1

The foundation of, what has come to be called, the Malthusian model can be seenclearly enough in the first (1798) edition – there would ultimately be six – of An Essay

on the Principle of Population as It Affects the Future Improvement of Society, with Remarks

on the Speculations of Mr. Godwin, M. Condorcet, and Other Writers. By the time his Sum-mary View was published in 1830, Malthus had become a household name. And little won-der. His Essay contained such delicate policy recommendations as:

0164-0704/$ - see front matter � 2007 Elsevier Inc. All rights reserved.

doi:10.1016/j.jmacro.2007.10.005

* Tel.: +1 919 513 2870; fax: +1 919 515 5613.E-mail address: [email protected]

1 For example, Haines et al. explain the decline in adult mean stature in the mid-nineteenth century UnitedStates (the so-called ‘‘antebellum puzzle”) as a ‘‘Malthusian squeeze” (2003, p. 408), and, with respect to theimpact of technological change on population, Tsoulouhas refers to ‘‘Malthusian causality” (1992, p. 197).Neither cites Malthus; nor do Crafts and Mills (2009), Galor and Weil (2000), or Lee and Anderson (2002), all ofwhich are cited below.

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L. Craig / Journal of Macroeconomics 31 (2009) 94–97 95

‘‘Instead of recommending cleanliness to the poor, we should encourage contraryhabits. In our towns we should make the streets narrower, crowd more people intothe houses, and court the return of the plague. In the country we should build ourvillages near stagnant pools, and particularly encourage settlements in all marshyand unwholesome situations. But above all, we should reprobate specific remediesfor ravaging diseases . . .” (1826, Book IV, Chapter V, p. 1).

That is one of the more cheerful passages. From Heilbroner’s Worldly Philosophers,generations of undergraduates have come to know Malthus as the ‘‘Gloomy Parson”

(1978, pp. 73–80), perhaps justly – though readers should at least entertain the possibilityMalthus merely discovered irony before Dickens made it fashionable. Furthermore,whether Malthus was actually a Malthusian is now open to debate (Emmett, 2006).

In any case, as the full title of Malthus’s essay reveals, he was responding to specificarguments put forth by William Godwin and M.J. Condorcet concerning the impact ofpopulation growth on economic activity and living standards, the latter usually proxiedby wage rates. Although arriving at the issue by different intellectual paths, Godwinand Condorcet both discounted the possibility of overpopulation in any meaningful sense,Godwin emphasizing conscious fertility control and Condorcet the impact of science inlimiting and ameliorating the impact of population growth. Malthus, typically, was pessi-mistic on both counts. Of course, the question is, as they say, an empirical one, and as timewent by it was generally thought that Malthus got the worst of it. Curiously, althoughGodwin and Condorcet are generally credited with getting it right, their names have beenconsigned to the intellectual purgatory of the obligatory citation, to the extent they arecited at all, merely as introductions to Malthus.

Malthus remains part of the canon because subsequent generations of scholars andpundits invoked his name when forecasting economic and social catastrophes, which werethe result – or, depending on your perspective, the failure – of certain policy prescriptions.Thus, whenever someone raises the specter of too many people and too little space or food,because of some policy, or the failure to adopt some other policy, Malthus is often impli-cated as the intellectual antecedent. But there is a difference between Hell and going toHell, and the fact that most of the world is not Hell most of the time has meant thatMalthus (or, more accurately, subsequent generations of Malthusians) has become a primeexample of how wrong economists can be. In recent decades, advances in econometricscombined with new time series of historical data have created the potential for a bravenew world of Malthusian scholarship.

In their test of the Malthusian model, Nicolas Crafts and Terrence C. Mills adopt anagnostic tone befitting serious scholarship. They specify a set of simultaneous equationsbuilt around three variables: the birth rate, which in the face of increasing scarcity couldbe adjusted downward by Malthus’s ‘‘preventive” checks; the death rate, which could beadjusted upward by Malthus’s ‘‘positive” checks; and the wage rate, fluctuations in whichare endogenous, but the long-run equilibrium value of which has a quasi-biological exog-enous characteristic, determined, such as it is, by subsistence. (As Malthus’s more rigorouscolleague, Ricardo, put it: the wage rate or ‘‘natural price of labor is that price which isnecessary to enable the laborers . . . to subsist and to perpetuate their race, without eitherincrease of diminution” (1817, p. 115), and this is the long-run equilibrium in a Malthusianworld, with further implications for the returns to other factors of production.) The modelalso possesses an implicit technological index, the growth rate of which Malthus set too

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low to be of much practical help to mankind. The key insight is that these variables willadjust such that the standard of living for the masses is driven to subsistence.

One problem scholars face in getting from Malthus’s words to a cliometric test of theMalthusian model is that there exist infinitely many specifications of the relevant equa-tions, and with each new generation of econometric techniques, which often overturnthe miracles of the previous generation, it appears that there are infinitely many statisticaltests one can bring to bear on the subject. Also, although there might not be as many timeseries as there are specifications and tests, new ones come along often enough to compli-cate the matter. With respect to specification, the model tested by Crafts and Mills is gen-eric enough: an increase in the real wage should induce a reduction in death rates and anincrease in birth rates, which in turn bring about a reduction in real wages, as more bodieslead to an increase in the supply of labor and pressure on the food supply, which throughstagnant technology cannot increase as fast as the population. Because of the simultaneousnature of this specification, following Nicolini (2007), the authors employ a vector auto-regressive model, but following Lee and Anderson (2002), they also estimate a structuralversion.

Using demographic and wage data from Wrigley and Schofield (1981) and Clark’s(2005) wage data from 1540 to 1870, the authors find that, in some meaningful statisticalsense, real wages were flat until 1800.2 On this point Malthus was correct. Unfortunatelyfor his subsequent reputation, the ink had hardly dried on the first edition of his Essay

before English wages began a long, steady upward trend. As for the Malthusian checks,in the VAR model, the authors find ‘‘no positive check, at any time in the period 1541–1800 . . . [and] by the late 17th century, the preventive check had also disappeared” (p.7). They find basically the same thing with the structural model.

As for technological change, because of the casual way in which Malthus treated thequestion, almost any rigorous finding will be non-Malthusian. In fact, Crafts and Millsfind no post-Malthusian ‘‘tendency for technological progress to accelerate as populationincreases,” and they juxtapose this result with that of Galor and Weil’s (2000) ‘‘unifiedgrowth model” in which population growth induces technological change. Rather thanthrow down the gauntlet before Galor and Weill, Crafts and Mills concede two points:one is that there may be considerable lags between micro-level technological break-throughs and macro evidence, and the other is that their model might not be well-suitedfor this exercise. Both of which are perfectly reasonable positions.

As for criticism, I suppose one piece would be that by using the specifications ofNicolini and Lee and Anderson, Crafts and Mills have not really pushed the Malthusianmodel in any new direction. One relatively unexamined frontier, at least in the economicsliterature, concerns the distribution of income in the model.3 Like the other classical econ-omists, Malthus was after all concerned with the distribution of income, both across socialclasses and factors of production, which were often treated as the same thing, and he wasan early critic of Say’s Law (Stigler, 1953). One might legitimately ask why this feature ofthe Malthusian model is systematically overlooked, and one might answer that it isbecause that feature is less stimulating to a broader audience than the prospect of famine

2 The Wrigley–Schofield data are an adjusted version of those originally compiled by Phelps-Brown andHopkins (1956).

3 A recent exception is Clark and Hamilton (2006).

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and the rampant sexuality of the masses, among other things, imbedded in the positive andpreventative checks on population. Fair enough.

Joseph Schumpeter attributed the Malthusian model to the late sixteenth-century polit-ical theorist Giovanni Botero. Dismissing Malthus’s work on the grounds that ‘‘Malthusreally did no more than repeat [Botero’s theory],” Schumpeter, in his much-imitated way,credited Botero’s ‘‘path-breaking performance” as ‘‘the only performance in the whole his-tory of the theory of population to deserve any credit at all” (1954, p. 255). Thus was dis-missed the work of subsequent generations of population scholars, including especially theMalthusians. Crafts and Mills’ findings suggest Malthus, who could look back on an Eng-land in which real wages had been stagnant for some time, was a better labor economistthan a population theorist. With the judicious application of data, theory, and economet-rics, Crafts and Mills confirm that the Malthusian model, whether Malthus would owntheir version or not, fails as an explanatory tool. It could not even forecast the past verywell. At least from the generation following Botero’s death in 1617, western civilizationnever faced a dire Malthusian world of excessive population growth requiring the disci-pline of Malthus’s preventive or positive checks. While Malthus’s name will no doubt con-tinue to serve as an adjective in describing hard times of one type or another, it wouldappear that the primary result of this latest probing of the Malthusian model is to reduceit to little more than a person of straw.

References

Clark, G., 2005. The condition of the working class in England, 1209–2004. Journal of Political Economy 113,1307–1340.

Clark, G., Hamilton, G., 2006. Survival of the richest: the malthusian mechanism in pre-industrial England.Journal of Economic History 66, 707–736.

Crafts, N., Mills, T.C., 2009. From Malthus to Solow: how did the Malthusian economy really evolve?. Journalof Macroeconomics 31, 68–93.

Emmett, R., 2006. Malthus reconsidered: population, natural resources, and markets. PERC Policy Series, vol.38.

Galor, O., Weil, D.N., 2000. Population, technology, and growth: from Malthusian stagnation to demographictransition and beyond. American Economic Review 90, 806–828.

Haines, M., Craig, L.A., Weiss, T., 2003. The short and the dead: nutrition, mortality, and the ‘AntebellumPuzzle’ in the United States. Journal of Economic History 63, 382–413.

Heilbroner, R., 1978. The Worldly Philosophers, fifth ed. Simon and Schuster, New York.Lee, R., Anderson, M., 2002. Malthus in state space: macro economic–demographic relations in English history,

1540–1870. Journal of Population Economics 15, 195–220.Malthus, T.R., 1826. An Essay on the Principle of Population as It Affects the Future Improvement of Society,

with Remarks on the Speculations of Mr. Godwin, M. Condorcet, and Other Writers, sixth ed. John Murray,London.

Nicolini, E.A., 2007. Was Malthus Right? A VAR analysis of economic and demographic interactions in pre-industrial England. European Review of Economic History 11, 99–121.

Phelps-Brown, E.H., Hopkins, S.V., 1956. Seven centuries of the prices of consumables compared with builders’wage rates. Economica 23, 296–314.

Schumpeter, J., 1954. History of Economic Analysis. Oxford, New York.Stigler, G., 1953. Sraffa’s Ricardo. The American Economic Review 43, 586–599.Tsoulouhas, F., 1992. A new look at demographic and technological changes: England, 1550–1839. Explorations

in Economic History 29, 169–203.Wrigley, E.A., Schofield, R.S., 1981. The Population History of England, 1541–1871: A Reconstruction. Arnold,

London.