The Rev. Thomas Malthus died 177 years ago this month, or so everyone thought. I'm beginning to have doubts after watching the Republican presidential debates, where it is obvious that Malthus, or his ghost, is back and doing well.
Originally a curate of the Church of England, Malthus earned fame as an economist, studying the link between population and the distribution of income. Better than anyone else, he articulated the iron law of wages: the idea that workers cannot sustain a high standard of living because rising wages trigger an increase in population that drives wages to subsistence.
Malthus’ economy is a zero-sum game in which national output is capped by a shortage of farmland. The more mouths to feed, the less everyone gets. Preceding centuries supported his view, in that, earnings hardly rose after the Roman era.
Precedent aside, Malthus’ friends in the Political Economy Club were optimists. Free trade, they said, would allow Britain to import food from the Continent and cotton from India and America, where these could be grown cheaply. In exchange, Britain would sell manufactured goods supplied by the Industrial Revolution. A rising population did not threaten the standard of living. New workers created wealth for themselves—and some extra.
The Club proved correct. From 1806, wages and population increased in tandem. A rise in one did not deter the other. If anything, a rising population enhanced output by contributing to economies of scale and scope.
Malthus’ theory went to print just as its predictive power collapsed. With the advantage of hindsight, he might have dropped it. Or maybe not. Two hundred years later, the entire slate of Republicans, save one, discuss the American economy as if it were in all its essentials Malthus’ agrarian outpost. These are people vying to lead the free world.
The United States is short 12 million skilled people: doctors, scientists, investors and experts in law and finance. They are shut out, blocked by an immigration regime that protects America from educated, law-abiding people who want to create wealth and pay taxes. These professionals go elsewhere—to Canada, to the Emirates, both of which are booming—or they develop industries in their home countries.
Instead of prizing skilled people, the Republican slate, minus Gingrinch, spout a populist mantra where foreigners steal American jobs. This repeats the error of Malthus’ zero-sum island. In terms of economic policy— Perry, Bachmann et al. have failed already.
Springfield News-Leader December 16, 2011