Malthus, Malthus, Everywhere

It seems as though the name Malthus comes up whenever the topic of population growth is discussed. For those of you who are unfamiliar, Thomas Malthus wrote in the late 1700’s and is most well-known for his Essay on the Principle of Population. In this piece, he argued that population grows exponentially while resources grow linearly. If population grows too quickly, the world will have too many people and not enough food to feed them all. It’s a simple and intuitive point, which may explain its popularity and staying power. This will result in low wages (due to an oversupply of labor), high prices for food and other necessities (due to the scarcity of resources), and widespread poverty.  Eventually, population growth will need to slow down or even reverse itself, a task that has typically been taken care of by disease, famine, and war.

I recently read an article in the Economist (http://www.economist.com/node/21541834) on this subject. The article, entitled “Miracle or Malthus,” questions whether the continent of Africa will face Malthusian disaster as its population continues to rapidly increase over the next few decades. The Economist points to falling fertility rates in some African countries as a sign of hope, but also notes the many countries  in which fertility rates have remained high rather than ‘converging’ towards the UN replacement rate of 2.1 children per family.

The graph accompanying the article caught my eye. There are three charts comparing population by age group in Japan, Mexico, and Nigeria. In Japan, much of the population is elderly or middle aged, resulting in a slightly inverse pyramid shape. In Mexico, more of the population is young or middle aged. In Nigeria, by contrast, most of the population is young and very few are elderly, resulting in an exaggerated pyramid where roughly half of the population appears to be younger than 30. This juxtaposition of three countries with different demographic profiles provides an interesting opportunity to revisit Malthus and his warnings about population growth.

One obvious solution to a Malthusian scenario is to reduce population growth. This can be achieved through various means, some of which are clearly unattractive to our society today. Others, such as encouraging widespread use of birth control and lowering fertility rates, are more palatable. Countries in Africa are often called out for their high fertility rates and are therefore targets of various efforts to implement family planning. As the Economist article mentions, however, families in Africa often have a lot of children because many of their children won’t survive past childhood. High infant morality rates, lack of sufficient healthcare, and hazardous occupations result in a population where most people do not live past middle age, a point made clear by the third graph representing Nigeria. One can hardly blame African families for their high fertility rates.

In more developed countries, fertility rates are much lower, in some cases even below the replacement ratio. This would normally bring a smile to any Malthusian’s face. In these same countries, however, people are more likely to live beyond middle age and often well into old age. According to the UN, the average life expectancy in Japan is 80 for men and 87 for women, compared to 75 for men and 80 for women in Mexico, whereas in Nigeria men can expect to live to 52 and women to 53. Despite low population growth, people in Japan are living much longer than those in Nigeria.

Supporting an elderly population is expensive. After people reach old age, they require vast amounts of resources, the scarcity of which so concerned our friend Malthus. And since they have likely retired from the workforce, they are not contributing much to the economy themselves. This demographic drag can already be seen in low-growth Japan and will likely weigh on the U.S. in coming decades as baby boomers retire.  Governments are already facing resistance as they try to push back the official retirement age for social security benefits.

Although high fertility rates and population growth in Africa should worry Malthusians, it should be considered that developed economies, although with much lower fertility rates and slower population growth, are also burdened with the task of supporting their elderly populations, sacrificing precious resources and growth in other areas of the economy. At its heart, Malthusian economics is concerned not about population growth in isolation but about its interaction with the finite amount of resources available for consumption. Developed economies that spend a lot of of time, money, and their opportunity costs on the elderly are also important pieces of the Malthusian equation.

Developed countries are fortunate to have populations that live longer lives, and hopefully African countries will move in this direction. Still, the consequences of living longer at a higher cost to society should be considered whenever Malthus is considered, or really whenever there is concern about having enough resources to support the global population. Besides being worried about the lack of a decline in fertility rates in Africa, Malthus would likely be surprised by how much longer people live in 2011 than in 1798. He would consequently be worried about the ability of society to meet the resource demands that this aging population requires without sacrificing quality of life in other areas. Population growth, and its concomitant consumption of the world’s resources, can occur at both ends of the age spectrum.

Many believers in free markets and natural social equilibriums have always disagreed with Malthus. They argue that human ingenuity can grow resources (or reduce the amount needed for consumption) at an exponential rate to keep up with population growth. They would claim the problems of Africa are not Malthusian but more due to unstable governments and inefficient resource allocation. The general consensus is that Malthus was mostly wrong, as populations have continued to increase exponentially and yet the world has not run out of resources. But Malthus only has to be right once. All experience shows that we have been able to see the vine ahead of us and grab it in the past, but this doesn’t preclude us from missing the vine in the future. There is really no way to know if Malthus will eventually be proven right. Perhaps this is why his theory is still relevant despite having been proven ‘wrong’ since 1798.

We are probably not in a natural equilibrium as it stands now (an equilibrium in which population growth and resources are growing at the same rate). We offer social benefits and welfare to many people who are living for decades after retirement, which cannot go on indefinitely as the population continues to age and life expectancies continue to increase. I think the reality will be a compromise between a natural equilibrium and a Malthusian scenario. The human population as whole will likely regulate its own growth and continue to innovate its way out of a resource crunch, but a lot of hard questions will need to be faced as we grapple with a growing and aging population and how to best allocate the world’s resources.

-Alison

One thought on “Malthus, Malthus, Everywhere

  1. I studied the Malthusian and more modern growth models in econ 400 over a year ago now. I think the point that Malthus missed was that, back in his time, people generally did not exert effort on things like tech research or innovation. I believe his work was intended to be a contrary view to the poor laws of England way back when. He was trying to argue that any increase in welfare for the poor would only result in an increase in population which would then run into resource constraints because he did not account for technology to scale resource production. The resource constraints would force population downward because people would starve and then the initial welfare gain would be lost. As I learned it, most new models melt down to the Malthusian case until a person has enough spare resources to spend innovating out of the “Malthusian trap” that always stops growth.

    What I think is that a complete Malthusian trap is entirely avoidable through innovation. While there probably is a certain rate of population growth that will outgrow technological development, I don’t think even Africa is there.

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