Stagnation and Growth

Summary

In all probability no scholar has been more influential when it comes to thinking about pre-industrial economies than Thomas Robert Malthus (1766- 1834). Although he was living in Britain at the time of the breakthrough of industrial production, that as a rule is considered to be the beginning of modern, i.e. sustained economic growth, he was very pessimistic about the possibility of such growth and in that sense he would turn out to be ‘a prophet of the past’. His ideas centred around a tension he considered inherent to each economy, the tension between population and resources. That tension would be caused by the fact that population has the tendency to multiply faster - he claimed exponentially - than food supply, that in his view tended to grow arithmetically. Whenever the food supply increases, so he claimed, population will rapidly grow, bring relative abundance to an end and create scarcity. Strikingly enough, in the same decade, the 1790s, in which Malthus wrote down his ideas about the relationship between population and wealth, two scholars who did not know his work nor that of each other came up with quite similar ideas: Hong Liangji (1746-1809) in China and Honda Toshiaki (1744-1821) in Japan.

Malthusianism, be it in a mild and nuanced form, is still very much alive amongst economic historians and economists. Many of them have claimed or still claim that the pre-industrial world was a world without sustained and substantial economic growth, i.e. a world without what economists call ‘modern economic growth’. In their perspective, growth over the long run was close to zero. They do not go as far as to claim that periods of growth were absent, but emphasise that they were shortlived, and neither sustained nor sustainable. The people at large need not always have been living at subsistence level. There were bad and better times. But in their view the tension between population and resources in general - not just food on which Malthus and classical Malthusianists as a rule focused - indeed was integral to the pre-industrial economy, although not as a kind of natural fate, but because no breakthroughs occurred in the field of energy use, technology and institutional arrangements.