The Malthusian Trap

“Malthusian trap” was named after Thomas Robert Malthus, a very influential scholar in the field of political economics and demography, whose published work in 1798, “An Essay on the Principle of Population” implied the imminent doom of human race. His writing was probably one of the reasons why economics was later dubbed “Dismal Science”.

Malthusian trap is one of the classical economic theories, a mirror into the mind of a scholar molded by the era he lived in. “Malthusian trap” is the idea that population growth would outstrip the growth of food supply and eventually lead to the age of great famine as food supply became too small to sustain the population.

Now, this was a very logical thinking of that time. While the population size increased exponentially, food supply did not. Plus, knowing the limited arable land we have, Malthus must have thought that sooner or later the increasing population would be accompanied by diminishing production of labour. Why could that have been the case? Because as more people work on the same plot of land, there will be fewer tasks for everyone to perform and thus lower per capita yield. Simply put, doubling the labour will not double the output.

Think about it. Even if you can increase output by 5%, but if you have 20% more people to feed, then your per capita growth would be -15%. The same principle applies to the calculation of GDP per capita. If GDP grows at, say, 7% per year, but population grows at 5%, then you will end up with only 2% per capita GDP growth. Hence, the formula:

[GDP per capita growth rate = Real GDP growth rate – Population Growth rate]

This makes perfect sense. The higher the population growth, the more people we have, but if without a proportional rise in the level of output, then we would have fewer outputs for everyone.

Malthus, however, did not foresee the drastic increase in productivity and efficiency brought about by the great “industrial revolution”. Of course, the human race continues to thrive due to new agricultural techniques, modern physical capital and food processing which expand annual output of each unit of labour to unprecedented rate.

Nonetheless, Malthusian Trap remains a strong influence to many subsequent economic thoughts. In the context of contemporary development, we see that many poor nations have high population growth, and this does eats away the growth of GDP they have.

In particular, there is no similar force that acts as the “Big Push” to get them out of poverty like what the industrial revolution did to many countries of the west more than a century ago. In this case, Malthusian trap remains relevant.

What to do then?

Addressing this problem requires, among others: reproductive health education (educating people on the use of birth control methods, etc) to reduce population growth to a manageable rate and gender empowerment to assist women in traditional society in getting education and transiting into the labour force. Moreover, a substantial amount of initial investment is often required to get people’s income above a certain cutoff; otherwise, economics explains, they would not be able to generate the amount of wealth required to get to the next income status, and their next generations would still be trapped in the low-income bracket, a situation known as “poverty trap”. For this reason, economists often are worried that external aids, even if placed on the right target, can be too little to create impact. This is a concern for emerging economies whose external aids are being reduced as they are moving up the income ladder.