Malthus's methodological and macroeconomic thought

Abstract

This essay examines several aspects of Malthuss writing focusing primarily on his methodological and macroeconomic thinking. Malthuss views on method set forth in Principles of Political Economy Considered with a View to Their Practical Application are notable in several respects. Although Malthus embraced principles of laissez-faire he was much more careful to qualify and limit their application than were some of his predecessors particularly Adam Smith. Malthus maintains that Smith and most economists including Malthus himself do not differ on desirability of of and the leaving every person while he adheres to rules of justice to pursue his own interests his own way. same stress on this important limitation to an individualist model of society is not found in Smiths The Wealth of Nations not because Smith disagreed fundamentally with position but most likely because he felt he had dealt adequately with problem in The Theory of Moral Sentiments. Some economists fail to accord sufficient recognition to this limitation nor is it recognized in many interdisciplinary discussions which view economic sphere as somehow unconstrained by legal or institutional regulations or restrictions on pursuit of self-interest. True freedom does not imply absence of all restraints on individual action. Similarly markets presuppose at very minimum elementary guarantees which rely in part on a contingent willingness of all participants to play within rules of game. Malthus recognized this as did many of his contemporaries but he is distinctive among 2nd generation of classical economists in stressing this explicitly. Whereas Malthus differed from Smith with regard to extent that society could be viewed as consisting of purely self-interested individuals he differed from Ricardo on a related but more general methodological principle: appropriate balance between aprioristic deductive methods and an empirical inductive approach. Malthus rejected Ricardos argument that freeing grain trade would maintain profit rate at a higher level than would otherwise have been case. He claimed that if England had devoted her energies to working up materials for export to buy foreign grain rate of profit would be lower. On whole it is difficult to give much credence to Malthuss implication that England would have been better off had she stuck with a protectionist policy. Englands participation in international division of labor was made possible by dramatic technological change in transport sector but triumph of free trade ideology a quarter century earlier was a necessary condition for this. Malthus was on losing side of this argument but as Ely Keynes and many others noted Ricardian analysis is not necessarily correct at all times for all regions.