9 A Historical Perspectiveon Economic Aspectsof the Popula.docx

9 A Historical Perspective
on Economic Aspects
of the Population
Explosion: The Case of
Preindustrial England
Ronald Demos Lee
9.1 Introduction
The preindustrial context offers particular advantages for the
study of
population change and its consequences. Over the course of
centuries
the effects of population pressure on resources have a chance to
emerge
and to dominate the more transitory influences. And other
sources of
long-run economic change, such as technology, capital
accumulation,
education, and institutional reorganization, were formerly
weaker or
absent. Thus history may provide us with an actual ceteris
paribus situa-
tion where statistical attempts to control for extraneous
influences on
contemporary development have failed. Of course there is
always the
risk that changing circumstances may have rendered the lessons
of his-
tory obsolete, but one has to start someplace; the drunk looks
for his
dime under the lamppost, though he lost it down the street.

There have been many studies of the effects of population
growth on
economic development, but only a few of these studies are
empirical.
Ronald Demos Lee is associated with the Department of
Economics and the
Population Studies Center, the University of Michigan.
This research was funded by NICHD grant HD 08586-03. I am
very grateful
to Professor E. A. Wrigley and Professor R. Schofield of the
Cambridge Group
for the History of Population and Social Structure for making
the aggregate parish
data set available to me. Philip Mirowski provided valuable
research assistance at
all stages of this project, and I also profited from his knowledge
of English history
and his creative insights. Professors Gavin Wright, Gary
Saxonhouse, C. K. Har-
ley, and Albert Fishlow made helpful comments on earlier
drafts. I am particularly
indebted to Professor Marc Nerlove for his detailed comments
and his solutions
to some of the analytic problems.
517
518 Ronald Demos Lee
Theoretical studies, and the many simulation studies in the
tradition of

the classic work by Coale and Hoover (1958), can be queried on
their
premises (see Simon 1976). Cost-benefit studies of marginal
lives, pio-
neered by Enke (1960), are empirical only in appearance; their
results
can actually be derived a priori for virtually any country,
regardless of
its economic situation, as Ohlin (1969) has shown in an
ingenious
article. l Cross-national studies, seeking correlations of
population growth
rates and growth rates of per capita income (see, e.g., Kuznets
1967;
Chesnai and Sauvy 1973; Easterlin 1972) have invariably found
no
significant association. 2 Leff's (1969) well-known article on
savings
rates and dependency rates has been so heavily criticized as to
leave the
results in serious doubt. So although most economists and
almost all
demographers believe high population growth rates are a
problem, there
is a surprising shortage of empirical evidence. A study of the
conse-
quences of population change in a historical context may help
demon-
strate the importance of the variable in at least the simplest
case.
Historical studies may also aid our understanding of the causes
of
population change. It is sometimes suggested that until a couple
of
centuries ago the size of human populations in relation to

resources was
effectively regulated by socioeconomic institutions, but that in
recent
times these mechanisms have broken down under the influences
of mor-
tality decline, urbanization, technical change, and
modernization in gen-
eral. However, there is little understanding of how such
mechanisms
functioned in the past, how effective they were, and how they
reacted
to various kinds of external shocks. An examination of these
historical
mechanisms should help us understand to what extent modern
and his-
torical experience differ qualitatively, and should provide some
perspec-
tive on current high rates of population growth.
This paper has three major parts. The first discusses the
consequences
of population change in preindustrial England, concentrating on
wages,
rents, and the ratio of industrial to agricultural prices. A simple
two-
sector model is developed to organize the analysis. The second
part
discusses the cause of population change, focusing on the nature
of the
social mechanisms that controlled it and their reaction to
variations in
mortality and productivity. In the third part, a simple model of
eco-
nomic-demographic equilibrium is developed, in which steady
shifts in
labor demand are the main determinant of sustained population

growth,
while the equilibrium living standards maintained during
expansion re-
sult from the interplay of largely exogenous mortality and
institutionally
regulated fertility. These three parts are followed by a brief
summary
and conclusion. Appendixes describe the data sources and the
formal
development of the dual-sector model.
519 Perspective on Economic Aspects of the Population
Explosion
9.2 Effects of Population Change
9.2.1 Overview
For those who care for the overmastering pattern, the elements
are
evidently there for a heroically simplified version of English
history
before the nineteenth century in which the long-term movements
in
prices, in income distribution, in investment, in real wages, and
in
migration are dominated by changes in the growth of
population.
[Habakkuk 1965, p. 148]
This "heroically simplified version" of English history, which
gives
the central role to population change, appears to be accepted by
a ma-

jority of economic historians. And since there was a rough
synchronism
of changes in population, wages, rents, and industrial and
agricultural
prices across Western Europe, many economic historians extend
the
same argument to the Continent as well. 3 The assertion is that
when
population grew, the additional labor that was applied to a
relatively
fixed amount of land brought diminishing returns, leading to
falling real
wages and rising real rents. Since industry's main input was
labor, indus-
trial prices closely followed the real wage. Thus a large
population
caused low prices for industrial goods relative to agricultural
ones. Since,
however, total agricultural incomes rose with population, so did
the
demand for industrial goods; thus industrial output-and with it
urbani-
zation-increased when population grew. This extension of the
market
encouraged specialization and trade.
Figure 9.1 shows the basic data series for England over the
period
1250 to 1800. This analysis will focus on the latter part, from
1540 to
1800, for which better data are available; however, the earlier
data help
put this later period into perspective and strengthen the findings
by sug-
gesting their wider applicability. The data plotted in figure 9.1
are de-

scribed in Appendix 9.1; however, the population series merits
special
mention. It is based on data from 404 parishes, collected and
aggregated
by the Cambridge Group for the History of Population and
Social Struc-
ture. Although the population estimates used here are still
preliminary,
they are far superior to the demographic data previously
available.
The series in figure 9.1 shows that the population-induced
changes
in the preindustrial economy were not trivial; rather, they were
of fun-
damental importance to the people of the time. For example, the
seg-
ment of society dependent primarily on wage income was
comfortably
off at the end of the fifteenth century; after a century of
population
growth their wages had fallen by 60% and their situation was
desperate.
Landlords were enriched over this period; industry grew
rapidly; and
industrial prices plummeted in relation to agricultural prices.
Life Expectancy
(upper classes)
--,.... - .../~
~......
50

.c 40
t
iii 30
:;;
V> 20
~ 10
O'---~---'--_.L-_---I._--'-----'
Population Size
x
'""0
E
x
'""0
E
Industrial Price
Divided by
Agricultural Price
x
'""0
E
Rent/Wage Ratio
x
'""0
E

1200 1300 1400 1500 1600 1700 1800
Fig. 9.1 Basic data for England, 1250-1800. For a description of
the data and sources, see Appendix 9.1.
Explosion
Deaths by Wages Rate of Natural Increase
by Wages
2
o00'-::-2'::-0~1OL---J6-.7-...l.4--:3...l..3-'-2.-5--'2
.6
~o Lag
-- -~
----f' Yr. Lag
°00'-=2'::0-,''::O--::6'-::.7:-....I
4
:---::
3
,-'.3::---:'-2--=.5-...=-::.o.J.
2
4
6

.6
:::s
<b U .4
u
c"o
~ e
Q) '".c ::J
o cs
UVl
.~
-0.
~.c _
Vl ~
~ -6 2
.c '"CL~
Wavelength. i,. In Years Wavelength. 2. In Years
Fig. 9.7 Cross-spectral estimates of deaths and rate of natural
in-
crease in relation to real wages for England, 1539-1839.
Phase estimates indicated by solid circles correspond to sig-
nificant estimates of coherence-squared and are more ac-
curate than the others. Estimates were made using a
Parzen window with T = 301, M = 20. Deaths and wages
were measured as residuals from the regression of the log
of the basic series on time. Natural increase was used
un transformed.

short-run relations also held over the long run, although these
data
provide no evidence on this point. Even in the short run,
however, wages
account for only about 15 % of the variance in growth rates, so
that
most of the variation is exogenous. Furthermore, inspection of
long-run
life-expectancy series, as in figures 9.1 and 9.4, suggests that
long-run
variation in population growth rates was also dominated by
exogenous
variation.
Under these circumstances, over the very long run, the average
wage
level will be an important determinant of average population
growth
rates. But even over the course of centuries, fluctuations of
growth rates
about that average level may be largely exogenous.
9.4 A Model of Economic-Demographic Equilibrium
At this point it will be helpful to introduce a simple
equilibrating
model relating fertility, mortality, wages, and population. Rent
and
terms of trade could also be added, but they play an essentially
passive
role and would only clutter the diagram.
The relation of fertility and mortality to wages, measured by
their
crude rates band d, may be plotted as in the top half of figure
9.8. The

Wage (w)
----d(w)
~
:!l
Ui
c
Q
<0
:; N·a.
0
ll.
b(w)
w(N)
Fig. 9.8
Wage (w)
Economic-demographic equilibrium.
level and curvature of the birthrate curve are determined
primarily by
norms and institutions, although at very low wages biological
consider-
ations may become important. Some societies might have
horizontal
fertility curves, if neither nuptiality nor marital fertility

depended on
material well-being. Societies with institutional arrangements
conducive
to high fertility, such as the extended family system, would
have higher
birthrate curves than those with less pronatalist institutions,
such as the
nuclear family. The death-rate curve is primarily biologically
deter-
mined, although such additional factors as income distribution,
central-
ized famine precautions, and in some cases infanticide and
geronticide
are also important.
The population growth rate, equal to b - d, is given by the
difference
between the two schedules; where they intersect, the growth
rate is zero
and the population is stationary. The corresponding wage, w*,
is vari-
ously known as the "long-run equilibrium wage," the "natural
wage,"
the "conventional standard of living," or "subsistence."
The lower half of the diagram shows the relation between the
wage
rate and the size of the population; it corresponds to the demand
for
labor, which I assume is fixed. Corresponding to the
equilibrium wage
is an equilibrium size of population, N*. There will also be
equilibrium
levels of rent and terms of trade, which are not shown.
Evidently the

Explosion
equilibrium is stable; when population size is below N* its
growth rate
will be positive, and conversely.
Now consider the effect of a once-for-all shift in the demand for
labor;
this situation is shown in figure 9.9. When w(N) shifts out to
WI (N),
the wage will initially rise, inducing population growth until
population
attains its new equilibrium at the old wage level. Thus, over the
long
run, population responds passively to economic advance, while
a roughly
constant level of material well-being is maintained; this is the
"iron law
of wages."
Now consider the effect of a permanent exogenous decline in
mortal-
ity, shifting the schedule from d (w) to d 1 (w). This is shown in
figure
9.10. 15 The decline in mortality lowers the equilibrium wage
and popu-
lation size; growth rates are initially positive until a new
equilibrium
is established with lower fertility and wages and larger
population size.
The point to note is that the equilibrium wage is not a culturally
deter-
mined parameter, as the classical economists thought; it

depends also
on a level of mortality that was subject to autonomous long-run
change.
It is this that gives population an independent role in history:
within
broad limits, the equilibrium population and living standard
changed
when mortality changed, even if institutions and the economic
base of
society remained completely unaltered.
<l>
;;;
a:
.<::
;;;
<l>
0
u
b(w)c
'"<l>
~
d(w)'E
to
<l>
U
::l
U
w· Wage (w)
wl(N)

w(N)
Fig. 9.9 Increased demand for labor.
Wage (w)
b(w)
----d(w)
----d,(w)
Wage (w)
w(N)
I
I
I
I
~ i
~ I
Cf) I
6 I
~ Ni -------
~ N' ----------
a
a..

Wage (w)
Fig. 9.10 Exogenous mortality decline.
I have simplified here by ignoring the direct links of fertility to
mor-
tality; these would cause the fertility curve to shift in response
to shifts
in the mortality curve. However, such direct links were ver¥
weak (see
Lee 1973, p. 598; 1978a, p. 167). Therefore it was only through
long-
run change in the norms and institutions themselves that society
could
maintain constant population and wages in the face of
exogenous change
in mortality. The automatic homeostatic mechanisms were not
adequate
in these circumstances.
In earlier papers (Lee, 1973, 1978a, b) I used estimated forms
of this
model to simulate the course of wages, population, and fertility,
assum-
ing that only mortality varied exogenously. These simulations
fit the
historical data remarkably well for 1250 to 1700 and 1705 to
1784.
The diagram can also be used to illustrate the effect of a steady
rate
of shift of the demand for labor, of the sort included in the
equations
estimated earlier. Suppose that this rate of shift is such that
population

growth at rate r leaves wages unchanged; the estimates
suggested r =
0.4% per year. Then in steady state growth, population will
grow at
rate r, and the wage will be constant at a level such that b (w) -
d (w)
= r. This situation is shown in figure 9.11. Evidently the wage
will have
to be a bit above its "natural" level in order to induce growth.
Exoge-
nous change in mortality will alter the steady-state wage but
will only
temporarily affect the population's growth rate.
d(w)
b(w)
Explosion
Finally, consider a simultaneous decline in mortality and
initiation of
growth at rate r in the demand for labor. This situation is shown
in
figure 9.12. In this case we might observe constant fertility, low
mortal-
ity, and population growth with no diminution in wages. This is
the situ-
ation T. H. Marshall had in mind when he wrote of eighteenth-
century
England (1965, p. 248) :
The obvious temptation is to assert that the death rate was not

only
the variable, but also the determining, factor in the increase of
popu-
lation, and that, to understand the causes of this increase, we
should
study the deaths rather than the births. But, clearly, a horizontal
line
on a graph may be as dynamic as a diagonal; the forces that
prevent
a birth rate from falling may be as significant as those that
make it
rise.
Ordinarily, one would expect a fall in the death rate to be
followed by a
fall in fertility, as equilibrium is attained at a lower rate and
larger
population; if this does not happen, it suggests that the
underlying cause
of continuing population growth is economic progress, not the
mortality
decline.
Might this be similar to the situation in today's LDCs? We often
observe exogenously declining mortality, relatively constant
fertility and
per capita income, and rapid population growth. Without the
concurrent
'"10
a:
t;:Q)
z
~

Vi
c
o
1i5
"3
0.
o
c-
al
c
::>
o
u
V>
6
Wage (w)
Fig. 9.11 Labor demand increasing at a constant rate.
b(w)
~---d(w)
~----dl(W)
Wage(w)
,.
Q)
Z

a)
N
Vi
C
o
';::;
m
:;
c-
o
c..
al
c
::>
o
u
'"(5
Wage(w)
Fig. 9.12 Offsetting changes in growth of labor demand and
mortality.
economic development, surely by now incomes and fertility
would have
fallen and mortality risen. It is not quite right to attribute the
population
growth to the mortality decline, although this may be the most
conspicu-
ous exogenous change; growth in the capacities of these
economies to
sustain population should perhaps be accorded the major
responsibility.

A final comment on this model in relation to the LDCs is in
order.
Whatever the nature of the social mechanisms that may have
regulated
population in Asia, it is clear that a balance was reached at a
much
higher level of fertility and mortality than in Europe.
Apparently life
expectancy in China and India at the turn of this century was
about 23
years (see Barclay et ai. 1976; Das Gupta 1971), versus perhaps
30
years in Europe; the total fertility rate must consequently have
been
about 6.5 versus 4.5 in Europe. The necessary change in
fertility-regu-
lating institutions, in response to declining mortality, is
staggering.
9.5 Summary and Conclusions
For today's LDCs there is little empirical evidence on the
economic
effects of population change. For the economy of preindustrial
England
and perhaps Europe, on the other hand, population emerges
clearly as
the dominant cause of long-run change in wages, rents,
industrial prices,
and income distribution. The economy could absorb population
growth
Unit 3 Peer Response (Due Sunday)

Unidentified Condition Recap and Response: Cortisol, Bone
Loss
Estimated time to complete: 2 hour
In phase two of the Unit 3 discussion, watch or read the
presentation posts created by your classmates and consider the
information presented.
Assuming the role of a healthcare professional in training,
respond via a video or written presentation to (a minimum) of
one classmate. Please note that video presentation responses
should be a minimum of three minutes in length and should not
exceed four minutes. Written presentation responses should be
a minimum of 2-3 paragraphs in length per each of the questions
listed below.
In the video or written presentation response post, include the
following:
Summarize the rationalizations given by your classmate. Has
your classmate changed their diagnosis opinion?
Outline the aspects in which you agreed and disagreed with
their week 3 conclusions and why.
Provide an additional opportunity and positive impact upon
their presentation by expanding upon one aspect of your
classmate’s conclusions from week 3 with further research.
Within your video or written presentation, please be certain to
validate your opinions and ideas while disclosing the sources
utilized within your video presentation or written presentation
(APA format).
3 days ago
Bindu Komara
RE: Unit 3 Unidentified Condition: Unidentified Condition:
Cortisol, Bone Loss - Click here to respond
COLLAPSE
Top of Form

Given the new presenting symptoms listed above, has your
diagnosis from week 2 changed? Why or why not?
No, symptoms presented here for the first and second week,
both were correlated with the consequences of stress and
cortisol production in stress which associated with my choosing
diagnosis cardiac metabolic syndrome
Is there a correlation between increased cortisol production and
bone loss or are these two separate unassociated symptoms?
Rationalize your choice.
Yes! Cortisol is the body's stress hormone produced in response
to stress by the adrenal gland. Production of cortisol interferes
with the formation of osteoblast resulting in the decrease in
bone building eventually ends with decreased bone density.
Hence more breakdown of bone tissues occurred compared with
bone deposition. When a patient has an increase in chronic
elevation of stress hormones increased the risk of osteoporosis
(Cortisol n.d).
Does the current symptom presentation from weeks 1, 2 and 3
align with endocrine (hormonal) imbalances?
Endocrine disorders usually manifest with the neurological
symptoms such as a headache to acute encephalopathy which
includes coma. Hormone plays an essential role when it comes
to the smooth functioning of the body. When it gets altered by
either getting increased or decreased resulting in the
manifestation of symptoms. If it is diagnosed earlier, can be
treated according to symptomatic and case management. Until
diagnosis, according to the hormones involved patients
manifestations will be there. That's what the current symptom
presentation from weeks 1, 2 and 3 align.
Increase Cortisol level indirectly acts on bone by blocking
calcium absorption which decreases bone deposition and
increases reabsorption of bone. Due to the reduction in bone
mineral density. In Cushing syndrome 70%bone loss takes
place. Results in fractures, muscle wasting, high blood pressure
which results in increase in the workload on the heart also
results in heart disease.

Jennifer Parker
COLLAPSE
Top of Form
Given the new presenting symptoms listed above, has your
My diagnosis from week 2 has not changed. The symptoms from
week 1, 2 and 3 all have similarities. I feel stress plays a big
role in some of the symptoms from the previous weeks as well
as this week.
Is there a correlation between increased cortisol production and
bone loss or are these two separate unassociated symptoms?
Yes, there is a correlation between increased cortisol production
and bone loss because Cortisol triggers bone mineral removal to
free amino acids for use as an energy source through
gluconeogenesis. Cortisol indirectly acts on bone by blocking
calcium absorption which decreases bone cell growth. The
disruption to serum calcium homeostasis increases bone
resorption and ultimately reduces BMD. Even a short bout of
elevated cortisol secretion may cause a decrease in
BMD. Excessive elevation of cortisol levels, such as in
hypercortisolism or Cushing’s syndrome, is linked to a high
prevalence of osteoporosis and may be associated with the age-
related decrease in BMD in the elderly.
Does the current symptom presentation from weeks 1, 2 and 3
align with endocrine (hormonal) imbalances?
Yes, week 1, week 2 and week 3 all align with endocrine
hormonal imbalances. I would say hormones play a huge role in
each symptom. Cortisol hormone imbalances can cause mood
changes to develop and much more. Bone loss is particular
pertinence to menopausal women, who are strongly affected by
hormonal fluctuations. Unfortunately, osteoporosis is a very
common symptom of menopause.
https://www.hindawi.com/journals/jsm/2013/896821/

https://www.34-menopause-
symptoms.com/osteoporosis/articles/osteoporosis-and-
hormonal-imbalance-the-link.htm
Bottom of Form
Maya Jones
Maya Jones
COLLAPSE
Top of Form
This week's symptoms of increased production of cortisol and
the loss of bone density goes right along with my diagnoses of
either Type 2 diabetes or obesity. Under stressful circumstances
cortisol provides the body with glucose. As cortisol provides
the body with glucose continually over a long amount of time
blood sugars levels raise potentially causing diabetes. A
repeated elevation of cortisol also causes weight gain and could
eventually lead to obesity. Increased levels of cortisol mobilize
triglycerides from storage and relocate those fat cells under the
muscles. Throughout a person's lifetime the body reabsorbs old
bone and creates new bone about every 10 years. Your body
needs enough calcium D and excercise in life to maintain
healthy bones. If a person grows up making bad health choices
like not eating meals with the proper amount of calcium and get
no excercise at all, they would become obese and be at a much
higher risk for loss of bone mineral density.
There is a correlation between increased cortisol production and
bone density loss. Cortisol triggers bone mineral removal to
free amino acids for use as a energy source. Cortisol indirectly
acts on bones by blocking calcium absorption which decreases
bone cell growth.
Every symptom since week 1 has had aligned with hormonal
imbalances. Cortisol is secreted based on the body's hormones
level to know when cortisol is needed.Elevated cortisol is a

automatic factor of a hormonal imbalance going on inside the
body.
REFERNCES:
Journal of Sports Medicine. (14 May 2013). Retrieved
from: https://www.hindawi.com/journals/jsm/2013/896821/
Medline-What causes bone density?.(n.d.) Retrieved
from: https://medlineplus.gov/ency/patientinstructions/000506.h
tm
Todays Dietician.(n.d.) Retrieved
from: http://www.todaysdietitian.com/newarchives/111609p38.s
html
·
3 days ago
Samantha Dieken
· Given the new presenting symptoms listed above, has your
My diagnosis from week 2 has not changed completely, but I
believe there is another diagnosis along with type 2 diabetes. I
am curious if there is more than one diagnosis which are linked
to type 2 diabetes. Given that the first symptom of this week is
an increased production of cortisol, which is a symptom of
subclinical Cushing syndrome. Subclinical Cushing syndromes
(SCS) symptoms vary from weight gain to increased levels of
cortisol, which are two symptoms stated in both this weeks and
week ones discussion. Increased cortisol levels over time can

lead to increased blood sugar levels which is seen in type 2
diabetes. Low BMD means you are more likely/at greater risk
for fractures. People with type 2 diabetes and who have SCS are
also at a higher risk for fractures. Fractures can be due to low
BMD. In conclusion, I believe it is subclinical Cushing’s
syndrome linked to type 2 diabetes.
· Is there a correlation between increased cortisol production
and bone loss or are these two separate unassociated symptoms?
Rationalize your choice.
Increased cortisol production can decrease bone density by
obstructing calcium. Cortisol is a stress hormone and large
amounts of cortisol (the stress hormone) can end up blocking
bone growth which then decreases the bone mineral density.
Being cortisol is a stress hormone, when you are in a chronic
state of stress, your bones spill the minerals into the
bloodstream and out of the bones. There is a correlation
between the two.
· Does the current symptom presentation from weeks 1, 2 and 3
align with endocrine (hormonal) imbalances? Rationalize your
answer.
Hormonal imbalances (such as increased cortisol) align with
previous symptoms such as insulin resistance, hair loss, blood
sugar and weight gain. These were all symptoms in previous
weeks which can be caused by hormonal imbalances. The
current symptoms of this week align with the past two weeks.
I still believe it is Subclinical Cushing’s syndrome linked with
type 2 diabetes.
Bottom of Form
Bottom of Form
Temin - 2 Views of the Industrial Revolution

July 3, 2018
1 2 Views
• Traditional view
– Inventors/entrepreneurs came from all social classes and parts
of the country
– Innovation across all industries
– Suddenness of shift difficult to find parallel
– Landes (Promethus Unbound)
– Deane and Cole growth estimates
– Mokyr
• ”Localized growth”
– Newer theory
– Multiple economists adjusted growth estimates of IR-era UK
downward (Harley 1982,
Crafts and Harley 1992)
– Implied that residual industries, or those grouped as ”other
manufacturing,” may not
have grown as much as previously thought
– Craft theorized that growth was restricted to cotton and iron,
not manufacturing as a
whole
2 Two Good Ricardian Trade Model

• Simple general equilibrium model of international trade
• 2 countries (A, B)
• 1 factor of production (L)
• 2 goods (X, Y )
• Constant returns to scale production (fixed labor acg needed to
produce one unit of output of
good g in each country c)
• Competitive markets, P cg = wcacg
• Fixed, immobile supply of labor (Lc)
• Representative consumer maximizes Uc = Uc(Ccx, CcY )
We assume country A has a comparative advantage in X. The
quantitative way of saying this is:
aAX
aAY
<
aBX
aBY
This also implies:
P̃ AX
P̃ AY

<
P̃ BX
P̃ BY
where P̃ represents a price in autarky (no trade)
The last thing we assume is that trade is free and frictionless.
As a result, trade will occur until
the prices in both countries are equal. So:
P̃ AX
P̃ AY
<
P̄ AX
P̄ AY
=
P̄ BX
P̄ BY
<
P̃ BX
P̃ BY
Each country produces the 1 good it has the comparative
advantage in
2
3 Extending to multiple goods
• Goods in economy indexed 1, 2, ...N

• an, a∗ n represents British, foreign labor requirement
respectively
• Reordered so a
∗
1
a1
is highest (Britain has higher comparative advantage for lower
numbers)
• w, w∗ wages in Britain, abroad
Line A
• a
∗
a
for each good
• Shows interaction between number of exports and relative
prices in the goods market
Line B
• More domestically produced goods mean more demand for
labor, leading to increased w
w∗
• Shows interaction between number of exports and relative
wages in the labor market
Theory 1 - Broad technical change
• Increased a

∗
a
for all n
• increased exports, demand for labor in UK
• A → A′ on graph
Theory 2 - Narrow technical change
3
• More complicated
• If productivity change is confined to good already exported by
Britain, trade balance at any
w
w∗
achieved with export of fewer goods (B → B′ on graph)
• Productivity change that causes reordering is more
complicated, and not easily graphed
4 Empirical Analysis
An indirect test of the two main theories can be carried out by
observing the lists of imported and
exported goods during the Industrial Revolution.
The author’s empirical tests consistently show that orderings or
rankings of England’s exports
did not change drastically during the industrial revolution. Had

the narrow/localized productiv-
ity change theory been accurate, export proportions of lagging
aspects of manufacturing would
decrease, or become negative, and we do not see this.
4
Industrial Revolution
Prior to 1750, the family unit was the primary economic engine
of
society. Families were reasonably self sufficient given that most
people were still agricultural labors.
“For the first time in history, the living standards of the masses
of
ordinary people have begun to undergo sustained growth.
Nothing
remotely like this economic behavior was even imagined to be
theoretical possible before.”
Econ 4130: Lecture 9-I 2 of 1
Cottage Industry
Before mass production
Rural families organized by urban merchants
Workers purchased raw materials from a supplier
Merchants purchased finished product for urban consumers
Workers were typically still primarily farmers

Home production was extra income
Each family made only a small amount
Proto-Industrialization
Proto-factories sprung up with the increased population to meet
the new demand for manufactured goods
Artisans worked in workshops
Workers were supervised by a foreman
Artisans aren’t employees of the factory
Paid per unit of output (piece rate)
Production is capital intensive
Firm provided access to the needed capital
Workers rented machines from firm
usually a monthly fee deducted from pay
Characteristics of Modern Industry
1 Extensive use of mechanically powered machinery
2 Use of new sources of power
Coal and steam
3 Growth in the manufacturing sector

4 Diminished role of the agricultural sector
Agricultural output takes off
Farming is no longer the largest employer
5 Larger scale of enterprise
The Rise of Big Business
Prior Conditions
The Industrial Revolution was preceded by two other equally
important “revolutions” that made the IR possible.
1 Scientific Revolution
2 Agricultural Revolution
Scientific Revolution
Europe 1550-1700 sees the emergence of modern science
Nicolaus Copernicus 1543
Heliocentric solar system
Disproves Aristotle’s perfect orbits
Development of the scientific method
Francis Bacon & Royal Society 1660

Study “for improving our natural knowledge”
Empiricism
Break from the classical “sciences”
First systematic use of data to test theories
Value on practical pursuits
Gradual process through trial and error
Agricultural Revolution
Food production increased significantly such that the average
British family used less than half of its income on food. For the
first time, most people had significant amounts of disposable
income to produce manufactured goods.
Smaller proportion of the population was needed in agriculture,
which freed people for industry. England produced 300% more
food
in 1870 than 1700, but only 14% of population worked the land.
Agricultural Revolution
Major Developments:
Enclosure
Technological Advancement

National Market
Tragedy of the Commons
A common resource is a non-excludable and rivalrous good. Use
of
the commons yields a large benefit to the individual, but places
a
small cost on all parties sharing the commons.
An individual can’t exclude other users from extracting value
from
the resource, a rational user has an incentive to maximum his
current use of the resource.
Since the resource is rivalrous, increase use leads to diminished
returns from that resource. So the individually rational market
outcome is complete depletion of the resource due to the
misalignment of individual and societal incentives.
Avoiding this outcome requires restraining both consumption
and
access to the resource. Converting common property to private
property is one way to accomplish this.

Since the resource is rivalrous, increase use leads to diminished
returns from that resource. So the individually rational market
outcome is complete depletion of the resource due to the
misalignment of individual and societal incentives.
Avoiding this outcome requires restraining both consumption
and
access to the resource. Converting common property to private
property is one way to accomplish this.
Enclosure Movement
Starting in 1760, British Parliament passed laws enclosing
common pastures into private plots
Eliminated the tragedy of the commons
Make some individuals really wealthy
Produced incentives for experimenting with new techniques
Large farms emerged that hired landless workers
Former serfs and free tenants

New Farming Techniques
Alternately used the same land for crops and pastures to
replenish soil between harvests
Used turnips, legumes, and clover to help return nutrients to
the soil
Wide spread use of new world crops
Corn
Potato
Mechanized farming
Seed drill (1701)
Dutch Plow (1730)
Mechanical reaper (1814)
Industrial Revolution
1750 to roughly 1850
Mechanically powered machinery
The emergence of the factory system
Technological innovation and capital accumulation increased
MPL in the factories
Rapid economic growth was not observed until 1850
Changes spanned all aspects of society

Factory System
Steam Engine
Thomas Newcomen 1712
James Watts 1778
Assembly line
Conveyer Belt System 1785
Interchangeable Parts
Joseph Whitworth 1841
Scientific Management
Fred Taylor 1890
Efficiency Wages
Larger than normal market wages
Coal and Iron
Charcoal had long been used as fuel for iron smelting
Sulfur in coal created impurities in the iron
Invention of coke allowed for the use of coal in blast furnaces
Coal is more widely available
Burns heater and longer
Economies of scale by locating next to coal mines
By late 1700’s, Britain was producing 200,000 tons of iron
Net exporter of iron and iron goods

Steam Engines and Water Power
Newcomen’s Steam Pump 1712
Draining mines
Powering mine carts
Early steam engines were very inefficient
Wasted 95% of available heat energy
Only produced 15 horsepower
Improvements led to engines capable of 1,000 horsepower
Population Growth
Britain experienced rapid population growth
Jobs without apprenticeship allowed earlier marriage
Greater availability of food led to better nutrition
Coal production helped Britons heat their homes cheaply
Better soap production led to better hygiene
Population of London doubled between 1700 and 1801
City of 1 million people
England had 5.5 million in 1750

Factory Life
Initially, manufacturing happened in workshops. Workers rented
out the machinery and floor space from the factory owner, but
got
paid at a piece rate. Workers controlled when and how long they
worked, since the factories were “open” for 16 hrs a day.
Workshops gave way to modern factories, where employee
conduct
was regulated and disciplined. Most workers earned hourly
wages.
Factory Discipline
Factory owners imposed strict codes of conduct of workers:
Fines for tardiness
Dismissal for public drunkenness
Beaten for taking breaks or socializing at work
As political suffrage expanded, those conditions eventual led to
the
development of unions and labor laws.
Why the Change to Factories?
Two theories have been proposed to explain the change from
workshops to factories:

1 Coordination
2 Coercion
Coordination Theory
The need for new factory discipline arose because of:
Larger startup investment costs
New technology
More use of manmade power
More fixed capital per worker
Greater division of labor
Assembly line
Specialization
Greater coordination was required to achieve profit maximizing
efficiency needed to overcome the large initial investment
required
for new technology.
Coercion Theory
Factory discipline was profitable because it extracted more
effort at
a given wage from the workers, not because it lower costs.

Firms got workers to increase daily output above what they
were
natural delivering in the workshop.
Urbanization
Expanding urban industries created a high demand for jobs
Factory wages were higher than agricultural wages
Initially just sons and daughters of farmers migrated
Over time majority of the rural population moved
Overcrowding
Poor sanitation
Higher incidence of epidemic diseases
Urbanization
People increasingly moved into cities
England:
30% of population living in cities in the early 19th century
75% living in cities by the 1901 census
Russia had only 12.5% of people living in cities
Moscow and St. Petersburg each had over 1 million people
Most of eastern Europe is still mostly agricultural

Malthus’s predictions:
Population would vary inversely with wages
Individuals would regulate marriage decision in response to
economic conditions
Lee’s findings:
Population does vary (strongly) inversely with wages
Population change driven by mortality rate, not birth rate
http://www.nber.org/chapters/c9671.pdf
Age of European Exploration
While European powers were exploring the globe, they usually
set up
trading outposts that would become colonies.
Colonies were administrated as to benefit the interest of home
country, we
now call this system of economic policies Mercantilism.
Econ 4130: Lecture 8 2 of 15

Mercantilism
Mercantilism
Power of the state is a function of its wealth
Gold and silver are the only real measure of wealth
Prohibit export of gold and silver
Control foreign trade to obtain a “favorable balance of trade”
Discourage imports
Import only cheap raw materials
Encourage domestic production
Export expensive manufactured products
Economic nationalism
Large military is required to build and defend a strong state
Enforce trade restrictions
Obtain concessions in trade treaties
Mercantilism
Mercantilism in Theory
Classic “Zero-Sum” game
Only a finite amount of resources and wealth in the system
Each nation should become self-sufficient by accumulating as
many
resources as possible

Whatever one country gains, another must lose
Export > Imports
Trade isn’t valuable, merely the profits from trade
Trade is generates monetary flows
Mercantilism
Mercantilism in Theory
As Europe explored more of the world, it became imperative to
be the first
to lay claim to whatever lands were encountered. The more land
that was
claimed, the more resources that country would control.
Colonies served as:
Suppliers of raw materials to the home country
Consumers of manufactured goods from the home country
Mercantilism
Mercantilism in Practice
There is only a finite amount of trade every year. Therefore
trade must be
restricted and regulated to ensure that it brings in the maximum

amount
of wealth for the country.
Although the policies and laws were different across Europe, all
the
countries that practiced mercantilism had 5 major things in
common.
Mercantilism
Mercantilism in Practice
1 Bullionism
Accumulating gold and silver within a country
Forbidding its export abroad
2 Promote domestic industries
Economic self-sufficiency
Restricting the consumption of foreign goods
3 Restricted international trade
Tax imports
Subsidize exports
4 Utility of Poverty
Support low wages
Promote large working population
5 Navigation Acts
All trade must go through the mother country first
All trade is handle by the mother country’s merchant marines

Mercantilism
Shortcomings of Mercantilism
Mercantilism began to decline by the late 17th century because
it was a
self-defeating system.
Colonies had insufficient income to support sustained trade
imbalances
Sold raw materials (low prices)
Purchased manufactured goods (high prices)
Bullionism backfired
All countries are stockpiling precious metals
Lack of scarcity, SGold ↑ ⇒ PGold ↓
Inflation
Mercantilism
Shortcomings of Mercantilism
Market regulations lead to an explosion of the blackmarket
Blackmarket isn’t taxed
Undermines legitimate demand
Major items smuggled: sugar, molasses, and tea

Empire-builders colonized all available foreign lands
Mercantilism requires an every increasing market
Large military and naval to enforce policies
Majors wars are inevitable
Limited invest in infrastructure
Mercantilism
Effects of Mercantilism
It is fair to say that the European colonization of Asia, Africa,
and the
lower Americas weakened the economies in these areas to
reduce them to
a condition of dependency.
Colonial economic policies were actively designed to maintain
the low cost
of production of the goods imported to Europe. Most of the
colonial
economies were restricted to single industries with suppressed
wages.
Mercantilism
Reaction to Mercantilism
Adam Smith- An Inquiry into the Nature and Causes of the

Wealth of
Nations (1776)
Only source of wealth for a country was its land and labor.
Markets self
regulate through the “invisible hand” of individual self-interest.
Therefore
trade itself, not the actually goods being traded matter.
Theory of Value
(1) Value of a good doesn’t come from its ability to be
exchanged for gold and silver
(2) All goods have some basic intrinsic value
(3) Market value for a good is the intrinsic value plus the labor,
talent, technology, and resources used
Mercantilism
Effects of Mercantilism (Smith’s view)
Domestic merchants and traders benefited from mercantilist
policies,
at the expense of everyone else
Monarchs had little, if any, understanding of economic
principles
Relied on self-interested ministers to run the economy
Cronyism
Mercantilism often undermined national wellbeing in the long

run
Potential for positive effects in the short run
Misallocation of resources and investment
Prohibitions on specialization limits benefits from comparative
advantage and trade
Numerous costly wars in Europe and in the colonies
Mercantilism
Mercantilism vs. Neoclassical Economics
Neoclassical Economics strongly disagrees on the fundamental
assumptions
of Mercantilism:
Country’s wealth is measured by it’s real output
Real goods/services matter, not the money supply
Actual commodities generating the GDP is irrelevant
Trading is a voluntary, mutually beneficial act
Both parties gain from trade
Trade generally lowers cost
Increases product diversity
Mercantilism

Political Influences on Economic Growth
The major colonist powers of Europe were Spain, Portugal,
France,
Netherlands, and England.
One of the most important difference between the countries that
led to
different status of powers heading into the 20th century was
how
concentrated the power was in a central authority.
Mercantilism
Political Influences on Economic Growth
Spain, Portugal, and France were absolute monarchies with the
king
having unlimited authority to tax and borrow.
England and the Netherlands had strong representative
legislatures that
limited the authority of the monarch.
Mercantilism
Why the Industrial Revolution was British
(Allen 2011)

June 28, 2018
Newton - ”Invention was 1% inspiration and 99% perspiration.”
Inventions in I.R. mainly about research and development
• Economic activity w/ distinct features
• ”Hard work needs incentives, flashes of genius do not.”
• Article focuses on research and development and the related
incentives.
1 Input prices
• British wages higher than other countries
• High silver wages → higher standard of living
• British wages high relative to capital prices
• British wages high relative to energy prices
2 Causes for unusual prices
2 factors
• Britain’s success in the global economy
• Geography - vast, readily worked coal deposits
Britain (similar to Antwerp, Amsterdam) diverted from
wage/population trends, experienced in-
crease in living standards from 1650 onward.
• ↑ international trade

• London grew quickly from trade-induced high labor demand
• Workforce in agriculture increased from 35% to 75%
Cheap coal
• 1700 - London average (Newcastle prices plus transportation),
Newcastle cheap
• Raised Plabor
Penergy
→ demand for energy-using technology
• metal and bricks cheap as a result of low energy prices →
incentive to substitute capital for
labor
Reasons for growth of coal industry
• London growing → demand for firewood and charcoal → P ↑
– Needed to ship from farther away as demand rose
• Coal had nearly unlimited supply at constant real cost
• Wood doubled in price in 1500’s while coal stayed constant →
incentive for buyers to learn
to sub coal for wood
Low factor prices meant businesses could pay high wages,
remain profitable, and competitive in-
ternationally

3 Demand side of technological change
Industrial process diverged in Britain b/c high wage structure
induced demand for technology that
substituted capital and energy for labor
2 ”stages”
• inspiration
– recognized as being outside the purview of economics
• perspiration
– affected by incentives
– inventors spend money (and time) developing idea when they
believe invention would
be useful
∗ benefits > costs
∗ private or social motivations
Use simply model to show that high-wage countries more
incentivized to develop labor-saving
capital
2
4 Spread of technology
Developed technology initially only useful at British factor
prices

Technology improved, became useful in other countries as well
(fig. 7)
5 Why Britain instead of other high-wage regions?
Author claims scientific revolution played a part
6 Cultural Change
”Elite culture” - More interested in science than other
places/periods
3
Enlightenment thinking became more common at all levels of
society
7 Uniqueness of I.R.
Important inventions have been made previously
I.R. was the first time inventions have led to sustained long-
term growth.
• scientific knowledge increased enough to allow continuous
innovation
• I.R.-era inventions were particularly transformative
4

An Essay on the Principle of
Population
An Essay on the Principle of Population, as it
Affects the Future Improvement of Society
with Remarks on the Speculations of Mr. Godwin,
M. Condorcet, and Other Writers.
Thomas Malthus
London
Printed for J. Johnson, in St. Paul’s Church-Yard
1798.
1
C H A P T E R 1
Question stated - Little prospect of a determination of it, from
the
enmity of the opposing parties - The principal argument against
the
perfectibility of man and of society has never been fairly
answered -
Nature of the difficulty arising from population - Outline of the
principal argument of the Essay
THE GREAT AND UNLOOKED FOR DISCOVERIES that have
taken place of
late years in natural philosophy, the increasing diffusion of

general
knowledge from the extension of the art of printing, the ardent
and
unshackled spirit of inquiry that prevails throughout the lettered
and
even unlettered world, the new and extraordinary lights that
have been
thrown on political subjects which dazzle and astonish the
understanding, and particularly that tremendous phenomenon in
the
political horizon, the French Revolution, which, like a blazing
comet,
seems destined either to inspire with fresh life and vigour, or to
scorch
up and destroy the shrinking inhabitants of the earth, have all
concurred
to lead many able men into the opinion that we were touching
on a
period big with the most important changes, changes that would
in
some measure be decisive of the future fate of mankind.
It has been said that the great question is now at issue, whether
man shall henceforth start forwards with accelerated velocity
towards
illimitable, and hitherto unconceived improvement, or be
condemned to
a perpetual oscillation between happiness and misery, and after
every
effort remain still at an immeasurable distance from the wished-
for
goal.
Yet, anxiously as every friend of mankind must look forwards
to
the termination of this painful suspense, and eagerly as the

inquiring
mind would hail every ray of light that might assist its view into
futurity, it is much to be lamented that the writers on each side
of this
momentous question still keep far aloof from each other. Their
mutual
arguments do not meet with a candid examination. The question
is not
brought to rest on fewer points, and even in theory scarcely
seems to be
approaching to a decision.
2 THOMAS MALTHUS (1798)
ELECTRONIC SCHOLARLY PUBLISHING Foundations of
Classical Genetics
The advocate for the present order of things is apt to treat the
sect
of speculative philosophers either as a set of artful and
designing
knaves who preach up ardent benevolence and draw captivating
pictures of a happier state of society only the better to enable
them to
destroy the present establishments and to forward their own
deep-laid
schemes of ambition, or as wild and mad-headed enthusiasts
whose
silly speculations and absurd paradoxes are not worthy the
attention of
any reasonable man.
The advocate for the perfectibility of man, and of society,
retorts

on the defender of establishments a more than equal contempt.
He
brands him as the slave of the most miserable and narrow
prejudices; or
as the defender of the abuses. of civil society only because he
profits by
them. He paints him either as a character who prostitutes his
understanding to his interest, or as one whose powers of mind
are not
of a size to grasp any thing great and noble, who cannot see
above five
yards before him, and who must therefore be utterly unable to
take in
the views of the enlightened benefactor of mankind.
In this unamicable contest the cause of truth cannot but suffer.
The
really good arguments on each side of the question are not
allowed to
have their proper weight. Each pursues his own theory, little
solicitous
to correct or improve it by an attention to what is advanced by
his
opponents.
The friend of the present order of things condemns all political
speculations in the gross. He will not even condescend to
examine the
grounds from which the perfectibility of society is inferred.
Much less
will he give himself the trouble in a fair and candid manner to
attempt
an exposition of their fallacy.
The speculative philosopher equally offends against the cause
of

truth. With eyes fixed on a happier state of society, the
blessings of
which he paints in the most captivating colours, he allows
himself to
indulge in the most bitter invectives against every present
establishment, without applying his talents to consider the best
and
safest means of removing abuses and without seeming to be
aware of
the tremendous obstacles that threaten, even in theory, to
oppose the
progress of man towards perfection.
It is an acknowledged truth in philosophy that a just theory will
always be confirmed by experiment. Yet so much friction, and
so many
minute circumstances occur in practice, which it is next to
impossible
for the most enlarged and penetrating mind to foresee, that on
few
subjects can any theory be pronounced just, till all the
arguments
against it have been maturely weighed and clearly and
consistently
refuted.
An Essay on Population 3
First printed for J. Johnson, in St. Paul’s Church-Yard, London.
I have read some of the speculations on the perfectibility of man
and of society with great pleasure. I have been warmed and
delighted
with the enchanting picture which they hold forth. I ardently

wish for
such happy improvements. But I see great, and, to my
understanding,
unconquerable difficulties in the way to them. These difficulties
it is
my present purpose to state, declaring, at the same time, that so
far
from exulting in them, as a cause of triumph over the friends of
innovation, nothing would give me greater pleasure than to see
them
completely removed.
The most important argument that I shall adduce is certainly not
new. The principles on which it depends have been explained in
part by
Hume, and more at large by Dr Adam Smith. It has been
advanced and
applied to the present subject, though not with its proper
weight, or in
the most forcible point of view, by Mr Wallace, and it may
probably
have been stated by many writers that I have never met with. I
should
certainly therefore not think of advancing it again, though I
mean to
place it in a point of view in some degree different from any
that I have
hitherto seen, if it had ever been fairly and satisfactorily
answered.
The cause of this neglect on the part of the advocates for the
perfectibility of mankind is not easily accounted for. I cannot
doubt the
talents of such men as Godwin and Condorcet. I am unwilling to
doubt
their candour. To my understanding, and probably to that of

most
others, the difficulty appears insurmountable. Yet these men of
acknowledged ability and penetration scarcely deign to notice
it, and
hold on their course in such speculations with unabated ardour
and
undiminished confidence. I have certainly no right to say that
they
purposely shut their eyes to such arguments. I ought rather to
doubt the
validity of them, when neglected by such men, however forcibly
their
truth may strike my own mind. Yet in this respect it must be
acknowledged that we are all of us too prone to err. If I saw a
glass of
wine repeatedly presented to a man, and he took no notice of it,
I
should be apt to think that he was blind or uncivil. A juster
philosophy
might teach me rather to think that my eyes deceived me and
that the
offer was not really what I conceived it to be.
In entering upon the argument I must premise that I put out of
the
question, at present, all mere conjectures, that is, all
suppositions, the
probable realization of which cannot be inferred upon any just
philosophical grounds. A writer may tell me that he thinks man
will
ultimately become an ostrich. I cannot properly contradict him.
But
before he can expect to bring any reasonable person over to his
opinion,
he ought to shew that the necks of mankind have been gradually
elongating, that the lips have grown harder and more prominent,

that
the legs and feet are daily altering their shape, and that the hair
is
Classical Genetics
beginning to change into stubs of feathers. And till the
probability of so
wonderful a conversion can be shewn, it is surely lost time and
lost
eloquence to expatiate on the happiness of man in such a state;
to
describe his powers, both of running and flying, to paint him in
a
condition where all narrow luxuries would be contemned, where
he
would be employed only in collecting the necessaries of life,
and
where, consequently, each man’s share of labour would be light,
and
his portion of leisure ample.
I think I may fairly make two postulata.
First, That food is necessary to the existence of man.
Secondly, That the passion between the sexes is necessary and
will
remain nearly in its present state.
These two laws, ever since we have had any knowledge of
mankind, appear to have been fixed laws of our nature, and, as

we have
not hitherto seen any alteration in them, we have no right to
conclude
that they will ever cease to be what they now are, without an
immediate
act of power in that Being who first arranged the system of the
universe, and for the advantage of his creatures, still executes,
according to fixed laws, all its various operations.
I do not know that any writer has supposed that on this earth
man
will ultimately be able to live without food. But Mr Godwin has
conjectured that the passion between the sexes may in time be
extinguished. As, however, he calls this part of his work a
deviation
into the land of conjecture, I will not dwell longer upon it at
present
than to say that the best arguments for the perfectibility of man
are
drawn from a contemplation of the great progress that he has
already
made from the savage state and the difficulty of saying where
he is to
stop. But towards the extinction of the passion between the
sexes, no
progress whatever has hitherto been made. It appears to exist in
as
much force at present as it did two thousand or four thousand
years
ago. There are individual exceptions now as there always have
been.
But, as these exceptions do not appear to increase in number, it
would
surely be a very unphilosophical mode of arguing to infer,
merely from
the existence of an exception, that the exception would, in time,

become the rule, and the rule the exception.
Assuming then my postulata as granted, I say, that the power of
population is indefinitely greater than the power in the earth to
produce
subsistence for man.
Population, when unchecked, increases in a geometrical ratio.
Subsistence increases only in an arithmetical ratio. A slight
acquaintance with numbers will shew the immensity of the first
power
in comparison of the second.
By that law of our nature which makes food necessary to the
life of
man, the effects of these two unequal powers must be kept
equal.
This implies a strong and constantly operating check on
population
from the difficulty of subsistence. This difficulty must fall
somewhere
and must necessarily be severely felt by a large portion of
mankind.
Through the animal and vegetable kingdoms, nature has
scattered
the seeds of life abroad with the most profuse and liberal hand.
She has
been comparatively sparing in the room and the nourishment

necessary
to rear them. The germs of existence contained in this spot of
earth,
with ample food, and ample room to expand in, would fill
millions of
worlds in the course of a few thousand years. Necessity, that
imperious
all pervading law of nature, restrains them within the prescribed
bounds. The race of plants and the race of animals shrink under
this
great restrictive law. And the race of man cannot, by any efforts
of
reason, escape from it. Among plants and animals its effects are
waste
of seed, sickness, and premature death. Among mankind, misery
and
vice. The former, misery, is an absolutely necessary
consequence of it.
Vice is a highly probable consequence, and we therefore see it
abundantly prevail, but it ought not, perhaps, to be called an
absolutely
necessary consequence. The ordeal of virtue is to resist all
temptation
to evil.
This natural inequality of the two powers of population and of
production in the earth, and that great law of our nature which
must
constantly keep their effects equal, form the great difficulty that
to me
appears insurmountable in the way to the perfectibility of
society. All
other arguments are of slight and subordinate consideration in
comparison of this. I see no way by which man can escape from
the
weight of this law which pervades all animated nature. No

fancied
equality, no agrarian regulations in their utmost extent, could
remove
the pressure of it even for a single century. And it appears,
therefore, to
be decisive against the possible existence of a society, all the
members
of which should live in ease, happiness, and comparative
leisure; and
feel no anxiety about providing the means of subsistence for
themselves and families.
Consequently, if the premises are just, the argument is
conclusive
against the perfectibility of the mass of mankind.
I have thus sketched the general outline of the argument, but I
will
examine it more particularly, and I think it will be found that
experience, the true source and foundation of all knowledge,
invariably
confirms its truth.
6
C H A P T E R 2
The different ratio in which population and food increase - The
necessary effects of these different ratios of increase -
Oscillation
produced by them in the condition of the lower classes of
society -
Reasons why this oscillation has not been so much observed as
might

be expected - Three propositions on which the general argument
of
the Essay depends - The different states in which mankind have
been
known to exist proposed to be examined with reference to these
three
propositions.
I SAID THAT POPULATION, WHEN UNCHECKED, increased
in a
geometrical ratio, and subsistence for man in an arithmetical
ratio.
Let us examine whether this position be just. I think it will be
allowed, that no state has hitherto existed (at least that we have
any
account of) where the manners were so pure and simple, and the
means
of subsistence so abundant, that no check whatever has existed
to early
marriages, among the lower classes, from a fear of not
providing well
for their families, or among the higher classes, from a fear of
lowering
their condition in life. Consequently in no state that we have yet
known
has the power of population been left to exert itself with perfect
freedom.
Whether the law of marriage be instituted or not, the dictate of
nature and virtue seems to be an early attachment to one
woman.
Supposing a liberty of changing in the case of an unfortunate
choice,
this liberty would not affect population till it arose to a height
greatly

vicious; and we are now supposing the existence of a society
where
vice is scarcely known.
In a state therefore of great equality and virtue, where pure and
simple manners prevailed, and where the means of subsistence
were so
abundant that no part of the society could have any fears about
providing amply for a family, the power of population being left
to
exert itself unchecked, the increase of the human species would
evidently be much greater than any increase that has been
hitherto
known.
In the United States of America, where the means of subsistence
have been more ample, the manners of the people more pure,
and
consequently the checks to early marriages fewer, than in any of
the
modern states of Europe, the population has been found to
double itself
in twenty-five years.
This ratio of increase, though short of the utmost power of
population, yet as the result of actual experience, we will take
as our
rule, and say, that population, when unchecked, goes on
doubling itself
every twenty-five years or increases in a geometrical ratio.

Let us now take any spot of earth, this Island for instance, and
see
in what ratio the subsistence it affords can be supposed to
increase. We
will begin with it under its present state of cultivation.
If I allow that by the best possible policy, by breaking up more
land and by great encouragements to agriculture, the produce of
this
Island may be doubled in the first twenty-five years, I think it
will be
allowing as much as any person can well demand.
In the next twenty-five years, it is impossible to suppose that
the
produce could be quadrupled. It would be contrary to all our
knowledge
of the qualities of land. The very utmost that we can conceive,
is, that
the increase in the second twenty-five years might equal the
present
produce. Let us then take this for our rule, though certainly far
beyond
the truth, and allow that, by great exertion, the whole produce
of the
Island might be increased every twenty-five years, by a quantity
of
subsistence equal to what it at present produces. The most
enthusiastic
speculator cannot suppose a greater increase than this. In a few
centuries it would make every acre of land in the Island like a
garden.
Yet this ratio of increase is evidently arithmetical.
It may be fairly said, therefore, that the means of subsistence

increase in an arithmetical ratio. Let us now bring the effects of
these
two ratios together.
The population of the Island is computed to be about seven
millions, and we will suppose the present produce equal to the
support
of such a number. In the first twenty-five years the population
would be
fourteen millions, and the food being also doubled, the means of
subsistence would be equal to this increase. In the next twenty-
five
years the population would be twenty-eight millions, and the
means of
subsistence only equal to the support of twenty-one millions. In
the
next period, the population would be fifty-six millions, and the
means
of subsistence just sufficient for half that number. And at the
conclusion of the first century the population would be one
hundred
and twelve millions and the means of subsistence only equal to
the
support of thirty-five millions, which would leave a population
of
seventy-seven millions totally unprovided for.
Classical Genetics
A great emigration necessarily implies unhappiness of some

kind
or other in the country that is deserted. For few persons will
leave their
families, connections, friends, and native land, to seek a
settlement in
untried foreign climes, without some strong subsisting causes of
uneasiness where they are, or the hope of some great advantages
in the
place to which they are going.
But to make the argument more general and less interrupted by
the
partial views of emigration, let us take the whole earth, instead
of one
spot, and suppose that the restraints to population were
universally
removed. If the subsistence for man that the earth affords was to
be
increased every twenty-five years by a quantity equal to what
the whole
world at present produces, this would allow the power of
production in
the earth to be absolutely unlimited, and its ratio of increase
much
greater than we can conceive that any possible exertions of
mankind
could make it.
Taking the population of the world at any number, a thousand
millions, for instance, the human species would increase in the
ratio of
-- 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, etc. and subsistence as --
1, 2, 3,
4, 5, 6, 7, 8, 9, 10, etc. In two centuries and a quarter, the
population
would be to the means of subsistence as 512 to 10: in three

centuries as
4096 to 13, and in two thousand years the difference would be
almost
incalculable, though the produce in that time would have
increased to
an immense extent.
No limits whatever are placed to the productions of the earth;
they
may increase for ever and be greater than any assignable
quantity. yet
still the power of population being a power of a superior order,
the
increase of the human species can only be kept commensurate to
the
increase of the means of subsistence by the constant operation
of the
strong law of necessity acting as a check upon the greater
power.
The effects of this check remain now to be considered.
Among plants and animals the view of the subject is simple.
They
are all impelled by a powerful instinct to the increase of their
species,
and this instinct is interrupted by no reasoning or doubts about
providing for their offspring. Wherever therefore there is
liberty, the
power of increase is exerted, and the superabundant effects are
repressed afterwards by want of room and nourishment, which is
common to animals and plants, and among animals by becoming
the
prey of others.
The effects of this check on man are more complicated.

Impelled
to the increase of his species by an equally powerful instinct,
reason
interrupts his career and asks him whether he may not bring
beings into
the world for whom he cannot provide the means of subsistence.
In a
state of equality, this would be the simple question. In the
present state
of society, other considerations occur. Will he not lower his
rank in
life? Will he not subject himself to greater difficulties than he
at present
feels? Will he not be obliged to labour harder? and if he has a
large
family, will his utmost exertions enable him to support them?
May he
not see his offspring in rags and misery, and clamouring for
bread that
he cannot give them? And may he not be reduced to the grating
necessity of forfeiting his independence, and of being obliged to
the
sparing hand of charity for support?
These considerations are calculated to prevent, and certainly do
prevent, a very great number in all civilized nations from
pursuing the
dictate of nature in an early attachment to one woman. And this
restraint almost necessarily, though not absolutely so, produces

vice.
Yet in all societies, even those that are most vicious, the
tendency to a
virtuous attachment is so strong that there is a constant effort
towards
an increase of population. This constant effort as constantly
tends to
subject the lower classes of the society to distress and to
prevent any
great permanent amelioration of their condition.
The way in which these effects are produced seems to be this.
We
will suppose the means of subsistence in any country just equal
to the
easy support of its inhabitants. The constant effort towards
population,
which is found to act even in the most vicious societies,
increases the
number of people before the means of subsistence are increased.
The
food therefore which before supported seven millions must now
be
divided among seven millions and a half or eight millions. The
poor
consequently must live much worse, and many of them be
reduced to
severe distress. The number of labourers also being above the
proportion of the work in the market, the price of labour must
tend
toward a decrease, while the price of provisions would at the
same time
tend to rise. The labourer therefore must work harder to earn the
same
as he did before. During this season of distress, the
discouragements to

marriage, and the difficulty of rearing a family are so great that
population is at a stand. In the mean time the cheapness of
labour, the
plenty of labourers, and the necessity of an increased industry
amongst
them, encourage cultivators to employ more labour upon their
land, to
turn up fresh soil, and to manure and improve more completely
what is
already in tillage, till ultimately the means of subsistence
become in the
same proportion to the population as at the period from which
we set
out. The situation of the labourer being then again tolerably
comfortable, the restraints to population are in some degree
loosened,
and the same retrograde and progressive movements with
respect to
happiness are repeated.
This sort of oscillation will not be remarked by superficial
observers, and it may be difficult even for the most penetrating
mind to
Classical Genetics
calculate its periods. Yet that in all old states some such
vibration does
exist, though from various transverse causes, in a much less
marked,
and in a much more irregular manner than I have described it,

no
reflecting man who considers the subject deeply can well doubt.
Many reasons occur why this oscillation has been less obvious,
and
less decidedly confirmed by experience, than might naturally be
expected.
One principal reason is that the histories of mankind that we
possess are histories only of the higher classes. We have but
few
accounts that can be depended upon of the manners and customs
of that
part of mankind where these retrograde and progressive
movements
chiefly take place. A satisfactory history of this kind, on one
people,
and of one period, would require the constant and minute
attention of
an observing mind during a long life. Some of the objects of
inquiry
would be, in what proportion to the number of adults was the
number
of marriages, to what extent vicious customs prevailed in
consequence
of the restraints upon matrimony, what was the comparative
mortality
among the children of the most distressed part of the community
and
those who lived rather more at their ease, what were the
variations in
the real price of labour, and what were the observable
differences in the
state of the lower classes of society with respect to ease and
happiness,
at different times during a certain period.

Such a history would tend greatly to elucidate the manner in
which
the constant check upon population acts and would probably
prove the
existence of the retrograde and progressive movements that
have been
mentioned, though the times of their vibrations must necessarily
be
rendered irregular from the operation of many interrupting
causes, such
as the introduction or failure of certain manufactures, a greater
or less
prevalent spirit of agricultural enterprise, years of plenty, or
years of
scarcity, wars and pestilence, poor laws, the invention of
processes for
shortening labour without the proportional extension of the
market for
the commodity, and, particularly, the difference between the
nominal
and real price of labour, a circumstance which has perhaps more
than
any other contributed to conceal this oscillation from common
view.
It very rarely happens that the nominal price of labour
universally
falls, but we well know that it frequently remains the same,
while the
nominal price of provisions has been gradually increasing. This
is, in
effect, a real fall in the price of labour, and during this period
the
condition of the lower orders of the community must gradually
grow

worse and worse. But the farmers and capitalists are growing
rich from
the real cheapness of labour. Their increased capitals enable
them to
employ a greater number of men. Work therefore may be
plentiful, and
the price of labour would consequently rise. But the want of
freedom in
the market of labour, which occurs more or less in all
communities,
either from parish laws, or the more general cause of the facility
of
combination among the rich, and its difficulty among the poor,
operates
to prevent the price of labour from rising at the natural period,
and
keeps it down some time longer; perhaps till a year of scarcity,
when
the clamour is too loud and the necessity too apparent to be
resisted.
The true cause of the advance in the price of labour is thus
concealed, and the rich affect to grant it as an act of compassion
and
favour to the poor, in consideration of a year of scarcity, and,
when
plenty returns, indulge themselves in the most unreasonable of
all
complaints, that the price does not again fall, when a little

rejection
would shew them that it must have risen long before but from an
unjust
conspiracy of their own.
But though the rich by unfair combinations contribute
frequently to
prolong a season of distress among the poor, yet no possible
form of
society could prevent the almost constant action of misery upon
a great
part of mankind, if in a state of inequality, and upon all, if all
were
equal.
The theory on which the truth of this position depends appears
to
me so extremely clear that I feel at a loss to conjecture what
part of it
can be denied.
That population cannot increase without the means of
subsistence
is a proposition so evident that it needs no illustration.
That population does invariably increase where there are the
means
of subsistence, the history of every people that have ever
existed will
abundantly prove.
And that the superior power of population cannot be checked
without producing misery or vice, the ample portion of these too
bitter
ingredients in the cup of human life and the continuance of the
physical

causes that seem to have produced them bear too convincing a
testimony.
But, in order more fully to ascertain the validity of these three
propositions, let us examine the different states in which
mankind have
been known to exist. Even a cursory review will, I think, be
sufficient
to convince us that these propositions are incontrovertible
truths.
Economics history
Section 1: Multiple Choice
1) Cincinnati was founded by missionaries with the intention of
developing a theocratic society.
a. True
b. False
2) The discovery of oil in Texas led to waves of
industrialization and significant changes to the economy.
a. True
b. False
3) American slaves were often undernourished as children, but
fed well as adults, resulting in a unique “catching up,” of
heights relative to comparison groups.
a. True
b. False
4) During South Korea’s economic development, very little
change came to the industrial structure or makeup of exports
a. True
b. False

5) Piketty’s theory on inequality was that faster increases in the
growth of capital income vs. wage income led to an increase in
the concentration of wealth.
a. True
b. False
6) During the roaring twenties, prosperity was widespread and
economists believed they reached a new level of prosperity
a. True
b. False
7) Knowledge during the European age of exploration was
partially built off that of Arab and Muslim explorers during
preceding years.
a. True
b. False
Page 1 of 3
8) Which of the following is a major reason the city of
Columbus developed?
a. Columbus was a transportation hub, and could trade with
cities like Cincinatti and Pittsburg easily
b. Columbus was the state capital, and offered political value
for those who sought to influence legislators
c. Rich deposits allowed Columbus to export coal cheaply
9) Which does NOT describe a limitation of China during their
economic reforms of the last few decades?
a. Unemployment and difficulty finding jobs
b. Inequality between Eastern and Western portions of the
country
c. Abnormally high tariffs on steel

10) Which was NOT an effect of the Black Plague?
a. Religious fervor and fanaticism increased, resulting in
persecution in some cases
b. Wages rose due to the reduction in the supply of labor
c. Approximately 75 to 200 million people died across Europe
and Asia
d. An increase in exploration and understanding of science and
medicine
11) Which is most likely to describe a “source country,” for
human trafficking?
a. A developing country with low rates of growth
b. A highly religious country with traditional institutions
c. A rich and economically forward country
d. A socially liberal, sexually relaxed country
12) Which of the following did not contribute to the long-run
prosperity of the US?
a. Good Economic institutions
b. Geography and natural resources
c. Unified religion and a further demand for central governance
d. Opportunity-centered and hard-working culture
13) Which was NOT a policy that led to Singapore’s economic
expansion?
a. Good free trade relationships with other countries
b. Investments in infrastructure and technology
c. Adoption of Calvinism as the national religion
d. Work with the UN and adoption of the Economic
Development Board
14) What was of India’s responses to the financial crisis?
a. Collectivization of the means of production

b. Decrease of import taxes and an expansion of trade
c. Return to traditional agricultural methods
15) Which was not an effect of the Bubonic Plague in Europe
a. Population reduction of approximately 33% in Europe
b. Food prices rose due to strains on livestock
c. Unrest and revolts as landlords attempted to control economic
responses
16) Which of the following was NOT a reason China adopted
the One Child Policy?
a. Limited food relative to agricultural capacity
b. Limited economic opportunity relative to number of young
people seeking employment
c. Widespread child labor led to pressure to reduce it
Section 2: Short Answer
I am expecting 1-2 paragraphs for each question. You are
demonstrating knowledge of the material, so more detail is
always better.
17. In his “Essay on the Principle of Population,” Malthus
summarizes two ways of thinking, which we coined; the
“perfectibility of man,” and “oscillation of misery.” Briefly
describe these schools of thought, and explain why Malthus
supported one or the other.
18. Describe 2 historical events or time periods that display the
principles (or support or refute the conclusions) of the
Malthusian population model. (Note: I’m not looking for any 2
specific events here, I’m looking to see how well you can relate
the model to historical events.)

19. In the Allen paper, there were 4 unique qualities about
British input prices mentioned:
-British wages were higher than other countries
-High silver wages meant a high standard of living
-British wage-to-capital ratio was high
-British wage-to-energy ratio was high
Choose 3, and briefly describe how they affected the incentive
structure of Great Britain’s economy, and led to the Industrial
Revolution taking place in Great Britain.
20. Explain the 2 views of technical change during the
Industrial Revolution, and briefly describe the reasons why
Temin supported one side or the other.

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