Over the Christmas week, CapX is republishing its favourite pieces from the past year. You can find the full list here.
You can now walk into a supermarket in every developed country in the world and expect shelves to be full and prices to be low. In the developing world, malnutrition has halved since 1990 and great strides are being taken to eradicate hunger entirely. This is despite the fact that two billion new souls have been added to the world’s population over the same period. How is this possible?
It’s bizarre to think that over two hundred years ago, when there were fewer than a billion people on this planet and much untapped land, respectable people with serious intellects thought this state of affairs could not go on.
Everyone knows about Thomas Malthus, but it was lesser known geologist Joseph Townsend who laid the groundwork for a strand of thinking that would later be known as social Darwinism. In his 1786 Dissertation on the Poor Laws, Townsend constructs a parable of goats and dogs stranded on a remote Pacific island and fighting for survival. An equilibrium is established when the population of each species is in harmony with the resource capacity of the island.
This serves to demonstrate a truism: “It is the quantity of food which regulates the numbers of the human species.” Townsend and then Malthus believed that humans live in a delicate balance with nature, and that any attempt to protect the poor through welfare or wage subsides only serves to encourage breeding, laziness, over-population and – ultimately – famine. “It is only hunger which can spur and goad them on to labour,” Townsend wrote.
For their theory to work, they had to assume that both the food supply and human ambition were fixed, and they could be forgiven for this. The English population fluctuated between 5-6 million for most of the post-Roman period up until around 1750, mainly because agricultural improvements were small and rare
The effects of the innovations of the agricultural revolution – crop rotation, selective breeding and – yes – land enclosures – were still coming on stream, but would eventually feed a booming population and the industrial revolution. By 1850, England was home to 16.6 million people.
Malthus’s thesis came before all of this but after the enactment of the Speenhamland system in 1795, an adaptation of the Poor Law which supplemented the low wages of parishioners according to the price of grain, which was rising in the wake of the French Revolutionary Wars.
Economists such as David Ricardo took up the mantle in the 19th century and proposed his ‘iron rule of wages,’ according to which wages settle at just the level required to keep the workforce alive and no more.
Nowadays, good governance, strong institutions and the encouragement of individual liberty ensure that food takes up a relative small part of most budgets. But as grain prices rose in the early 19th century along with the cost of administering poor relief, Malthusian ideas were used to justify cuts in relief and the expansion of the workhouse.
The legacy of social Darwinism extends into the early 20th century and was not only the preserve of classic liberals on the economic Right. In an 2005 essay, Princeton economist Thomas Leonard details how American Progressives turned Darwinist ideas on its head by arguing that unrestrained immigration of “racially inferior” Southern and Eastern Europeans led to the degeneration of the Anglo-Saxon race – the elimination of the fit.
While rejecting laissez-faire economics, their solutions – immigration controls and minimum wages, in addition to the scientific management of the economy – shared the Malthusian and Ricardian analysis that life was a race to the bottom.
The antidote to Thomas Mathus and his gang of pessimists was Ester Boserup. She is known for her work on agricultural economics in the 20th century and coining the phrase: “necessity is the mother of invention”.
As the world approaches resource constraints, there are strong economic, social and political incentives to find solutions. Pasteurisation (1863), refrigeration (1850s), nitrogen fixation (1918), scientific plant breeding (1920s), combine harvesters (1930), and GM crops (1980s) have saved – and continue to save – billions from starvation and have greatly enhanced human potential.
Innovation is what keeps over seven billion people on the planet, with rates of absolute poverty in freefall and wheat prices at all time lows.
London, Paris or New York may feel crowded at times, but for every person who lives in those cities there are at least nine who live in Dhaka, Bangladesh.
If it no longer seems a miracle that a country like Japan, which is home to 127m (including almost 40m in Tokyo) and where only 20% of its land is suitable for cultivation, can comfortably feed all its citizens, we should not baulk at the challenge of producing the same outcome in the hundreds of rising cities around the world, though it will be difficult.
— World Economic Forum (@wef) January 9, 2016
The good news is that there could be more agricultural innovation to come. Indoor vertical farms look like the next big breakthrough. Mirai, a Japanese firm based in Miyagi Province, is but one example. Its indoor farms produce 100 times more lettuce with 80% less waste and 99% less water than conventional open-air farms. Vertical farms could offer sustainable, fresh and reliable food to crowded cities in developing countries.
In other areas, reductions in the cost of remote sensors, satellite imagery, drone technology and cloud computing could boost agricultural profits by 30%, according to Brook Porter, a partner in venture capital firm Klieiner Perkins Caulfield & Byers, which has a $1bn fund for green investments.
In addition to measures that reduce the amount of food we waste, with some estimates as high as 30%, and measures to protect our ecosystem, we can be reasonably confident that the Malthusian warning remains a bad idea consigned to the 18thcentury.