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The effects of Malthus’s population theory on policy dwarfed anything achieved by

Ricardo’s theory of comparative advantage or his corn model. Discuss (January 2013)
Ans:
Malthus’s theory of population is that increasing level of per capita income will lead to
increasing population and increasing population will lead to lower level of per capita
income. I believe that this policy did not dwarf or weaken anything achieved by Ricardo’s
corn model or his theory of Comparative Advantage, and in fact strengthened Ricardo’s corn
model in showing that extending population leads to inefficiency with unproductive land
being used. The loss of profits for the farmer and lower wages for the workers are also
brilliantly captured by Malthus’s bold theory, again allowing Ricardo to emphasise the
dangers of growing population in his model.
Firstly, in the second part of Ricardo’s corn model, profits are invested into capital and thus
workers are required to work the capital. This leads to an increase in the demand for labour,
pushing their wages and thus leading to an increase in the population through more births
and fewer deaths. As a result, the price of corn doubles according to Ricardo to satisfy the
increase in demand. Again Malthus’s population theory actually helps Ricardo point out that
population increases will make commodities like corn scarce, thus increasing their prices.
The worker’s wages would also double, to allow them to afford corn to consume, but then
again so has the price of corn, and so their wage stays the same at the subsistence level-
another Malthusian belief.
Also all three lands- A, B and C are used to satisfy demand. Farmer C which has no profits,
will be looking to get farmer B’s land, in search of profits. As a result, farmer B’s profits will
also fall to zero (subsistence level), as they would have to give over all of their profits as
rent, in order to avoid being evicted. Exactly the same will happen to farmer A and so all of
the farmer’s incomes will fall to zero. Malthus’s first two elements of his population theory
(explained in the introduction) therefore helps Ricardo point out that extending populations
will lead to less and less productive land being used, reducing profits, increasing rents and
leaving wages unchanged. Ricardo goes on using this analysis to point out that profits in all
industries will eventually fall to zero as profits in all industries lead to equality- so a fall in
profits in one industry (agriculture for example), will bring others down with it. If one
industry has profits, then people from other industries will transfer to this industry in search
of profits and so these profits will fall as well, eventually to zero.