Thomas Robert Malthus and David Ricardo

After Smith, Thomas Robert Malthus in An Essay on the Principles of Population as It Affects the Future Improvement of Society (1798) and David Ricardo in Principles of Political Economy (1917) advocated non-interference of the State in the individual liberty. Malthus cited the reason of population and Ricardo, rent to further the cause of laissez-faire.

Malthus put forward a dreadful presentiment to the world. He said that the population of the earth is a problem. He argued that taking the population at any number, it would increase exponentially, i.e., 1, 2, 4, 8, 16, 32, 64, 128, 256, 516, etc. and subsistence arithmetically i.e., 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.¹⁷ This irreconcilable mouth—food divergence appeared incorrigible to Malthus. It means, all the time somesection or other of the population would be in misery. Poverty and this misery should not be solved by charity. As charity to those who are in misery would, in any way, lead to further population, it would be cruelty in disguise. Then what was the solution? Malthus could think of premature death, sickly seasons, epidemics, pestilence, plague and above all the ‘dreadful resource of nature’, famine as self-regulating agents of depopulation. Thus, the gloomy presentiments of overpopulation led Malthus to argue against interference by the State to correct natural imbalances. He was a theorist of laissez faire.

Ricardo, on the other hand, was seized with the problem of rent. He felt that production would have to be increased to cater to the increasing population. This means, more and more land would be put into use for production. And gradually, even less productive land would be brought into cultivation but only to raise the cost of production. This would happen when free trade is not allowed and the population has to be fed with the produce of the country only. If ‘rent’ could be only the price paid for use of the land to the landlord, it is like ‘interest’, as the price of the capital to the capitalist and the ‘wages’, as the price of labour to the worker. But Ricardo felt that rent to the landlord was a special kind of return, as not all land was equally productive. Thus, more productive land in a competitive situation would give more rent for a given amount of production. This will happen due to the gap between the cost in the less productive and more productive land. This amounts to rent seeking due to government protection on import of grain.

It was this conclusion that made Ricardo fight against the Corn Laws that protected British grain which were costly.¹⁸ We can see, which conclusion Ricardo is approaching—he showed the advantages of free trade and argued for bringing cheap grain in Britain so that state-encouraged protection is eliminated.

While the landlords fought for keeping cheap grain out of Britain, the industrialist class saw Ricardo’s theory as their own. Ricardo argued against state interference and the protection it promised to the landlords. He advocated free trade and against state interference.