The Malthusian Fable.

October 17, 2009 · Filed under Uncategorized

Dear Friends.

In recent times the media and some bloggers have talked of a ticking time bomb with regard to Kenya’s youth unemployment. This follows the post election violence that occured as a result of a disputed election in Kenya that took place in late 2007 and early 2008. It is true that the vast majority of people who caused most damage were indeed young people who felt disenfranchised and are largely unemployed and poor.

The thinking of some in the media is that with Kenya’s growing population a Malthusian catastrophe is imminent. This is further given credence by the ongoing drought being experienced in Kenya at the moment which has exposed several million people to food deficiency. In August of this year [2009] the govt carried out a census which is projected to reveal that Kenya now has a population of 40million people. To the Malthusian disciples this is further vindication for them of the need to limit Kenya’s population. However before going any further what is the Malthusian theory and it’s related brother the Malthusian catastrophe?

The Malthusian theory is named after the person who proposed it whose name was Dr. Thomas Robert Malthus. Thomas Malthus was born on 13 February 1766 & died on  23 December 1834. He was a British scholar who was very influential in the fields of political economics and demographic studies. He was the one who popularized the economic theory of rent. However he was most known for his controversial theory on the relationship between economics and population growth and dynamics. To arrive at his theory Malthus made the following postulata;

“I think I may fairly make two postulata. First, That food is necessary to the existence of man. Secondly, That the passion between the sexes is necessary and will remain nearly in its present state. These two laws, ever since we have had any knowledge of mankind, appear to have been fixed laws of our nature, and, as we have not hitherto seen any alteration in them, we have no right to conclude that they will ever cease to be what they now are, without an immediate act of power in that Being who first arranged the system of the universe, and for the advantage of his creatures, still executes, according to fixed laws, all its various operations“. He then went on further to state his theory thus;

 “Assuming then my postulata as granted, I say, that the power of population is indefinitely greater than the power in the earth to produce subsistence for man”. Hence his theory stated as follows;

“The power of population is indefinitely greater than the power in the earth to produce subsistence for man. Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first power in comparison with the second”.

Having stated his theory it followed that if population was left unchecked then some calamity or catastrophe was likely to occur hence the phrase Malthusian Catastrophe was coined to refer to a situation where “a forced return to subsistence-level conditions would occur once population growth had outpaced agricultural production”. Later formulations consider economic growth limits as well. The term is also commonly used in discussions of oil depletion.

For those of you who maybe inclined to have a more econometric description of Malthus theory as described in a neo classical sense it can be described in the following equation

whereby [a] & [b] is greater than 0 and [f] refers to fertility of a certain country’s growth over time and when left unchecked will increase over time to resemble the following equation

 

 Despite the well postulated theory of Malthus it remains just but a theory to this day. Infact it has been disproved both practically and by an opposing school of thought in the form of the Cornucopian Theory.

Cornucopian Theory

This theory derives it’s name from the term cornucopia which is a Greek word meaning the “Horn of Plenty” in Greek mythology. According to the cornucopians the place supplied them with endless supplies of food and drink. The Cornucopian theory was well espoused by the economist Julian L. Simon who was born on February 12, 1932 & died on February 8, 1998.

A cornucopian is a futurist who believes that continued progress and provision of material items for mankind can be met by similarly continued advances in innovation and technology. Despite the localized famine and poverty in certain regions of the world Cornucopians believe that the problem in such instances arises out of poor distribution and inadequate planning in the current economic and political systems. This appears to be true because such problems occur in places which in most instances are sparsely populated. You rarely hear of famine hitting big capital cities which are densely populated yet famine will affect remote regions with poor infrastructure. Looking further into the future cornucopians posit that the abundance of matter and energy in space would appear to give humanity almost unlimited room for growth.

Those of you familiar with the martial arts sport of judo know that rather than oppose an opponent with brute force, a judoka uses the power and momentum of his opponent against him by acting as a fulcrum and increasing an opponents strength and movement to his own advantage. In a similar way the cornucopian principle uses the power of the Malthusian theory against it. Sure increasing population will increase demand for a certain commodity, but this will spur innovation, substitution and increased production due to the greater financial incentive that results due to scarcity of a certain resource or commodity.

Hence the Malthusian argument of looking at population in a negative light is rendered useless by the cornucopian argument which looks at human population not merely as a consumer but also as a productive force. Indeed the malthusian theory has been disproved by the fact that it ignored the fact that human beings are capable of tremendous capacity to innovate and employ technology to solve problems of supply and demand.

Essentially the difference between the cornucopians and the malthusians is that of optimists versus pessimists. Cornucopians are boomsters while malthusians are doomsters. Cornucopians see increased wealth generation in the future while malthusians predict a catastrophe. Whereas a malthusian sees each baby as a new mouth to feed and hence reduced resources for himself and others, a cornucopian sees each baby as having a brain and a pair of hands to produce more for himself and others hence increased prosperity. For more on this read this excellent article.

However at this stage it may seem as if this are just two competing theories in a debate among intellectuals. The important thing however is to determine who is actually right between the two given the very grave implications that may result from being an adherent of either of the two theories. To do this let us first borrow from philosophy some ground rules. The Principle of Non Contradiction states “it is impossible to be and not to be at the same time and in the same respect”. This means that in two diametrically opposed or contradicting statements one has got to be true and the other false because they cannot be both true & false at the same time and in the same way.

So to establish the truth a wager or experiment was carried out between J. L. Simon and Paul Erlich a malthusian adherent. Simon invited Erlich to pick any 5 commodities of his choice and bet that the price would be cheaper in any time beyond a year despite the rise in population. 

Ehrlich and his colleagues picked five metals that they thought would undergo big price rises: chromium, copper, nickel, tin, and tungsten. Then, on paper, they bought $200 worth of each, for a total bet of $1,000, using the prices on September 29, 1980, as an index. They designated September 29, 1990, 10 years hence, as the payoff date. If the inflation-adjusted prices of the various metals rose in the interim, Simon would pay Ehrlich the combined difference; if the prices fell, Ehrlich et alia would pay Simon.

Then they sat back and waited. Between 1980 and 1990, the world’s population grew by more than 800 million, the largest increase in one decade in all of history. But by September 1990, without a single exception, the price of each of Ehrlich’s selected metals had fallen, and in some cases had dropped through the floor. Chrome, which had sold for $3.90 a pound in 1980, was down to $3.70 in 1990. Tin, which was $8.72 a pound in 1980, was down to $3.88 a decade later. Which is how it came to pass that in October 1990, Paul Ehrlich mailed Julian Simon a check for $576.07. For the full story about this read this article 

Finally in conclusion let me go back to Kenya because I begun with it. Kenya has a geographical area of approximately 582,650km². This is bigger than any country in the European Union. France 545,600km² which is the closest in size has about 63.5million inhabitants compared to Kenya’s 40million, Germany 357,021km² which is even smaller has a population  of 82.6million. Japan with an area of 377,835km² has a population of 128million. The surprising thing in this figures is that the country with the highest population also happens to reflect the greater wealth in the same order. A look at the GDP figures reveals Japan US$4.38trillion, Germany US$3.32trillion, France US$2.55trillion and Kenya with US$29.51billion. Despite this countries having a higher population than Kenya’s they are able to provide gainful employment to almost all their citizens with much higher wages, sufficient food and they don’t suffer from land clashes despite being physically smaller than Kenya and not even enjoying the favourable climate and resources that Kenya possesses. So the question arises how can one say Kenya is overpopulated or too crowded?

Jellyfish.