ABSTRACT OF PAPER
Title: The General Glut Theory of Thomas Robert Malthus Revisited: with a comparison with Ricardo's View
Author: Watarai Katsuyoshi
The controversy between Ricardo and Malthus on general gluts was the center of the General Glut Controversies in the first half of the 19th century. Keynes explained the difference between them that Ricardo accepted Say’s law, while Malthus opposed it. Under the influence of Keynes’s view, several prominent authors provided attractive explanations of Malthus’s general glut theory with the concept of ‘effective demand’ defined alla Keynes. Nevertheless, I will dare to present a non-Keynesian interpretation of Malthus’s general glut theory. Then, I will show the fundamental differences between Malthus and Ricardo on some issues: nature of human wants, foreign trades. public works, fall in money wage rate. Malthus’s most original idea in his Principles is that there is an optimum proportion between unproductive and productive labourers in each economy that promotes best the increase of wealth, which depends on productivity, practices of consumption among producers. If there is an excessive saving and investment, a change of unproductive labourers into productive labourers takes place, destroying that optimum proportion and causing a general glut. The following is a typical passage in Principles of Political Economy of Malthus, which expresses succinctly but very clearly Malthus’s idea of general glut. If, in the process of saving, all that was lost by the capitalist was gained by the labourer, the check to the progress of wealth would be but temporary, as stated by Mr. Ricardo; and the consequences need not be apprehended. But if the conversion of revenue into capital pushed beyond a certain point must, by diminishing the effectual demand for produce, throw the labouring classes out of employment, it is obvious that the adoption of parsimonious habits beyond a certain point, may be accompanied by the most distressing effects at first, and by a marked depression of wealth and population. (2nd ed., p.326, italics added). Malthus uses the terms effectual demand and the effective demand interchangeably. He states clearly that an excessive investment diminishes effective demand. How can it be explained by a Keynesian effective demand theory? I will present an interpretation that shows Malthus’s statement in the above passage as a natural and logically consistent explanation of his own idea of general glut. I will also provide a simple formulation of Malthus’s general glut theory on the basic concepts given by himself.
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