ABSTRACT
At Jesus College, Cambridge, Malthus had trained for the Anglican ministry and indeed he served for some ten years as a country curate in Oakwood, Surrey. It was there that he published his renowned An Essay on the Principle of Population (1798). In it he takes on Enlightenment thinker William Godwin, who had written a hugely popular book describing a utopian vision of a society based not on self-interest and property but on altruism and free love. Malthus uses a thought experiment to show that Godwin’s perfect society could never last but would quickly revert to our own imperfect order. At a stroke he put paid to the eighteenth-century Enlightenment’s promise of a perfectly rational world and of prosperity for all. Malthus based his ideas, in part at least, on the growth of the population in the new settlements in North America, where there was no shortage of land, and on his own experiences at Oakwood. His successors were astonished by the rise in population recorded in village registers of births and deaths. To Malthus, this was crucial evidence for his conjecture that the growth of food production could not keep pace with population growth. Ricardo was another British intellectual who saw population growth, combined with a limited ability to supply everyone with sufficient food, as a problem of central importance. He believed it was obvious that the best agricultural land would be worked first and therefore that land farmed later would be less productive. New agricultural land, Ricardo (like Malthus) believed, was characterized by what we would now call diminishing returns. Ricardo argued that this meant landowners were able to put a price on better land, demanding ground rent for it. There was no need for them to do anything; it was a natural consequence of the pressure of population and the expansion of farmland that resulted. Call it ‘unearned income’. Aided by simple calculations, sometimes included in the text of his On the Principles of Political Economy and Taxation (1817), sometimes in separate tables, Ricardo developed various scenarios that demonstrated the results of steadily rising land rents for the incomes of the other two social classes in the economy: the capitalists and the workers. The workers were reduced to subsistence level and the income of the capitalists (in other words their profits) eventually declined to zero. Ricardo makes clear that aristocratic wealth is based on purely accidental circumstances and gained at the expense of the other classes in society. The political conclusion was quickly drawn: the enrichment of the landowning classes was holding back the growth of rapidly developing industries in cities such as Manchester and Liverpool. Although Ricardo was initially interested in the countryside (it was only in the third edition of 1821 that he added his famous chapter on machinery), his theory clearly seemed to imply that capitalists, the entrepreneurs setting up new industries and taking on fresh challenges, were the engine of progress in England, rather than the aristocracy or the church.
