Small Note of Smith and Malthus
Mir Mahfuz ur Rahman writes in The Daily Star Blog:
“Rice haves versus rice have-nots” (HERE)
ONE of the basic necessities of a commodity's availability is trade. Adam Smith, in his seminal work in 1776, had shown that comparative advantage of nations through trade was the key to increasing the economic wealth of all nations.
Rev. Thomas Malthus put forth the idea of a future world where a majority of the people starves due to lack of food. Given the circumstances of the world in the past two years, Rev. Malthus may be considered a sage even though he himself, as a man of God, may not have been happy about the reality of his prediction.”
Comment
Adam Smith’s trade theory was based on absolute advantage – a country trades what it is better at than others, for what goods they are better than it. Comparative Advantage was a theory advanced by David Ricardo in 1817.
Thomas Malthus described a ‘law of nature’ that had operated for thousands of years: the ‘Mathusian Trap’, namely that as subsistence rose, population would grow (more babies survive, life expectancies increase), but population would eventually run ahead of the necessary subsistence to support it, and subsistence would fall per capita, reducing population as infant morality increased and life spans shortened.
The irony was that just as Malthus was publishing his population theory, Britain was experiencing rising per capita consumption and rising population and the Malthusian Trap was not sprung because food output exceeded population growth in the industrialising commercial societies and has continued to do so for the past two hundred years. (See: Gregory Clark: A Farewell to Alms" (Princeton University Press, 2007)
“Rice haves versus rice have-nots” (HERE)
ONE of the basic necessities of a commodity's availability is trade. Adam Smith, in his seminal work in 1776, had shown that comparative advantage of nations through trade was the key to increasing the economic wealth of all nations.
Rev. Thomas Malthus put forth the idea of a future world where a majority of the people starves due to lack of food. Given the circumstances of the world in the past two years, Rev. Malthus may be considered a sage even though he himself, as a man of God, may not have been happy about the reality of his prediction.”
Comment
Adam Smith’s trade theory was based on absolute advantage – a country trades what it is better at than others, for what goods they are better than it. Comparative Advantage was a theory advanced by David Ricardo in 1817.
Thomas Malthus described a ‘law of nature’ that had operated for thousands of years: the ‘Mathusian Trap’, namely that as subsistence rose, population would grow (more babies survive, life expectancies increase), but population would eventually run ahead of the necessary subsistence to support it, and subsistence would fall per capita, reducing population as infant morality increased and life spans shortened.
The irony was that just as Malthus was publishing his population theory, Britain was experiencing rising per capita consumption and rising population and the Malthusian Trap was not sprung because food output exceeded population growth in the industrialising commercial societies and has continued to do so for the past two hundred years. (See: Gregory Clark: A Farewell to Alms" (Princeton University Press, 2007)
Labels: History of Economics, Malthus
posted by Gavin Kennedy at 7:01 PM
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