Malthus is well and truly dead


So get over it! Every once in a while, an economic commentator will come along and start yabadabing about how increasing population will eventually lead to mass starvation across the world. This time it's Niall Ferguson, Professor of History at Harvard, writing for the Telegraph (free access):

For a long time we have deluded ourselves that "illimitable improvement" was attainable. As the world approaches a new era of dearth, expect misery - and its old companion vice - to make a mighty Malthusian comeback.

What seems to be the trouble? First a quick revision of Malthus, gory details and all, for those that missed history of economic thought 101:

Malthus's key insight was simple but devastating. "Population, when unchecked, increases in a geometrical ratio," he observed. But "subsistence increases only in an arithmetical ratio." We are, quite simply, much better at reproducing ourselves than feeding ourselves.

Malthus concluded from this inexorable divergence between population and food supply that there must be "a strong and constantly operating check on population". This would take two forms: "misery" (famines and epidemics) and "vice", by which he meant not only alcohol abuse but also contraception and abortion (he was, after all, an ordained Anglican minister).

"The vices of mankind are active and able ministers of depopulation," wrote Malthus in an especially doleful passage of the first edition of his Essay. "They are the precursors in the great army of destruction; and often finish the dreadful work themselves. "

"But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array, and sweep off their thousands and tens of thousands. Should success be still incomplete, gigantic inevitable famine stalks in the rear, and with one mighty blow levels the population with the food of the world."

Sca-ry. So why should we be expecting Malthus to rise from the dead?

The real question is whether we could now be approaching a new era of misery. Even at an arithmetic rate, the United Nations expects the world's population to pass the 9 billion mark by 2050.

But can world food production keep pace? Plant physiologist Lloyd T Evans has estimated that "we must reach an average yield of four tons per hectare… to support a population of 8 billion". But yields right now are just three tons per hectare. And a world of eight billion people may be less than 20 years away.

According to the OECD, American output of corn-based ethanol and European consumption of oilseeds for bio-fuels will double by 2016. Only the other day, the executive director of the World Food Programme expressed anxiety about the unintended consequences of this huge shift of resources.

Some people worry about peak oil. I worry more about peak grain.

The fact is that world per capita cereal production has already passed its peak, which was back in the mid-Eighties, not least because of collapsing production in the former Soviet Union and sub-Saharan Africa. Simultaneously, however, rising incomes in Asia are causing a surge in worldwide food demand.

Already the symptoms of the coming food shortage are detectable. The International Monetary Fund recorded a 23 per cent rise in world food prices during the last 18 months. Maybe you've observed it yourself. I certainly have.

Of course, we're not supposed to notice that prices are going up. In the United States, the monetary authorities insist that we should focus on the "core" Consumer Price Index, which excludes the cost of food. According to that measure, the annual inflation rate in the US is just 2.2 per cent. But food inflation is roughly double that.

It's a similar story in Britain. Officially, UK inflation was running at 2.4 per cent in June. But food accounts for just 10.3 per cent of the notional basket of goods on which the CPI is based. Food inflation is actually 4.8 per cent.


There's a good reason why food accounts for just 10.3% of the notional 'basket' on which CPI is based: we don't spend that much on it, and what little we do spend tends to go towards 'quality', not subsistence (i.e. if we were simply interested in maintaining a daily calorific intake, our consumption of food would be way lower).

So let's accept that the price of food has been going up indeed (I'm by no means sure that's the case, but it doesn't really matter) and we are fast approaching a doomsday scenario where there is so little food available, and at such high prices, that people are dying on the streets of London.

You'd be surprised to find out how extremely cheap it would be to secure yourself and your family against such an eventuality: a hectare of agricultural land in the UK sells for less than £8k, and the UK is one of the richest, most crowded, fewest-farmers-per-capita countries on earth.

Also, given the current and projected scarcity of food, it feels pretty weird to me that farmers in the developed world are so hooked on government subsidies, or that they are not ecstatic about the bright future ahead ('a world of eight billion people may be less than 20 years away').

And why does agriculture, alone amongst all other sectors, need to improve productivity in a hurry when there's a shock in demand for its product? 'Plant physiologist Lloyd T Evans has estimated that "we must reach an average yield of four tons per hectare… to support a population of 8 billion". But yields right now are just three tons per hectare'. Yield per hectare is what it is and it will take a while for technology to work its magic and increase it further, but when any normal sector faces an increase in demand they say 'let's rent out more office space, buy more computers and hire more people', not 'let's start being more productive tomorrow'.

Malthus's world was very different to ours: people's main goal was surviving another day, and this involved dedicating most available resources to food production. But we are now well beyond that stage and, if you haven't noticed, most of our resources are employed elsewhere. Food prices may rise, but I am sure the proportion of my income spent on food will not be jumping to 100% even if the earth's current population tripled and we had our Martian cousins over for dinner too.

Until I see cows grazing in Central Park, Malthus will stay well and truly dead. Boo.

Postscript: Tip'o'the hat to Tim Worstall, Mark Thoma has a lot of comments.



by datacharmer | Tuesday, July 31, 2007
  | | Malthus is well and truly dead @bluematterblogtwitter

2 comments:

  1. Gabriel Says:

    Well, I think more respect in is order. The vast majority of humanity's history (before the industrial revolution) was Malthusian. So, it's not like Malthus was on crack.

    Now, a Malthusian world depends on a few circumstances: production technology (what you discuss), the shape of the trade-off between number of children and human capital endowment per child, etc.

    I agree that a new Malthusian age is extremely improbably in the West. (Although, world-wide, there are still places where it's reality.)

    Don't people shouldn't fear. We can always start eating kelp. :-) Or I could just reduce my intake from 4 big macs per day to two, and feed another 2 people.

    (P.S. Offtopic. The fact that this site uses a popup for comments reduces my enthusiams for commenting 56.73%.)

  2. datacharmer Says:

    No disrespect to Malthus - the world was indeed Malthusian for millenia. My comments simply refer to the neo-Malthusians that predict food shortages in the future. The fact that parts of the world fit the Malthusian model well today has more to do with allocation of income rather than a lack of resources per se. The fact of the matter remains that, if demand for food increases in the West, we have a great deal of resources we can re-allocate to food production - so no-one will be starving.

    And thanks for your suggestion - comments now appear on the main page.