The Malthusian model is not as crazy as Greg Clark’s interpretation of it in A Farewell to Alms (here’s Clark’s reply; here’s my rebuttal, with a second reply from Clark in the comments). But even correctly interpreted, the Malthusian model is deeply flawed.

A key assumption of the Malthusian model is that when population goes up, average living standards go down.


Intuitively, this make sense: When more people share a pie, each slice gets thinner. And in the short-run, this Malthusian assumption is clearly correct. When a couple has its first child, the family’s per-capita income plummets by one-third. Clark documents, similarly, that when repeated plagues cut England’s population in half, living standards for the survivors roughly doubled.

But here’s the problem: As Michael Kremer and especially Julian Simon explain, there are powerful long-run effects of higher population that go in the opposite direction. Most notably:

1. More people increase both the supply and demand for new ideas.

2. More people make it possible to exploit economies of scale – including scale economies of transportation and communication.

3. Since human diversity rises with human population, more people allow for efficiency gains from specialization and trade.

These effects could easily suffice to overpower the Malthusian diminishing marginal returns effect, so the right diagram looks like:


If this seems implausible, imagine a world populated by a million immortal, sterile human beings at the hunter-gatherer level. There’s plenty of land per person, but that’s hardly enough to give you the Internet, the airplane, German opera, or any of the countless wonders that we take for granted. How long would it take these million immortals to invent our standard of living? Would the sun burn out first?

A Farewell to Alms briefly acknowledges population benefit #1: “There is clearly a core of sense to the idea that increased population size, the product of past technological change in the preindustrial era, increased the rate of technological advance.” (p.228) In comments on this blog, Clark makes the point more strongly: “And indeed the book accepts that one of the things bringing about the Industrial Revolution was the much greater population of the world in 1800 than in 100,000 BC.” But this admission plays almost no role in Clark’s larger story – and it absolutely should.

Once you accept the long-run benefits of higher population, praising the Black Death for raising the average standard of living is severely myopic. Halving the population may double the standard of living of the survivors in the short-run. But in the long-run, a smaller population delays the arrival of modernity. On Clark’s account, it took England about two centuries to return to its pre-plague population. On his own terms, then, it is entirely possible that – but for the plague – the Industrial Revolution would have begun two centuries earlier.

In fact, once you take the long-run benefits of population on living standards seriously, the “Malthusian trap” takes on an new cast. Perhaps the real trap is that you have to be pretty rich to keep a big population alive long enough to reap the long-run benefits of a big population. For the pre-modern era, this story fits the facts as well as Clark’s, but it has the added virtue that it fits the facts of the modern era as well.

Update: Clark responds in the comments.