Thomas Malthus and David Ricardo on the Glut in the Economy
Introduction:
Today, when totalitarianism is challenging democracy through potential productive power, it is ideal to re examine the differences in opinion of Thomas Malthus and David Ricardo, with respect to their debate on the possibility of economic stagnation, variously referred to as, over-production, under-consumption, or, as Malthus termed it, general glut in the economy.
On Population:
Adam Smith arrived at an optimistic conclusion on the outcome of a free market system while Malthus and Ricardo complying with the same natural laws of the market display fundamentally, opposing views. Smith perceived population growth as a positive social phenomenon, one essential for expanding markets, and increasing productivity , primarily for the purpose of economic growth. However, Malthus and Ricardo vocalized their rationale on the negative consequences of population growth, as the impediment of economic growth and …show more content…
Since, both Ricardo and Malthus began their investigation into the field of economics through the enquiry into writings of Adam Smith in The Wealth of Nations , both theorize distinct and supplementary works. In the conflict of classes amongst the workers ,capitalist and landowners, Malthus supports the ‘capitalist class’ by opposing the repeal of the Corns Laws. Conversely, Ricardo staunchly believed in free trade and that the Corn Laws burdened the agriculture sector as trade barriers kept food prices artificially high. Ricardo mirrors Adam Smith’s stance that, the market, although imperfect, is best left untouched. A glut, arguably cannot occur if all resources optimally utilized (Say’s Law,“supply creates demand”), however, inherently the law does not account for hoarding, accumulation of money without purpose or intention to save, spend or
Introduction:
Today, when totalitarianism is challenging democracy through potential productive power, it is ideal to re examine the differences in opinion of Thomas Malthus and David Ricardo, with respect to their debate on the possibility of economic stagnation, variously referred to as, over-production, under-consumption, or, as Malthus termed it, general glut in the economy.
On Population:
Adam Smith arrived at an optimistic conclusion on the outcome of a free market system while Malthus and Ricardo complying with the same natural laws of the market display fundamentally, opposing views. Smith perceived population growth as a positive social phenomenon, one essential for expanding markets, and increasing productivity , primarily for the purpose of economic growth. However, Malthus and Ricardo vocalized their rationale on the negative consequences of population growth, as the impediment of economic growth and …show more content…
Since, both Ricardo and Malthus began their investigation into the field of economics through the enquiry into writings of Adam Smith in The Wealth of Nations , both theorize distinct and supplementary works. In the conflict of classes amongst the workers ,capitalist and landowners, Malthus supports the ‘capitalist class’ by opposing the repeal of the Corns Laws. Conversely, Ricardo staunchly believed in free trade and that the Corn Laws burdened the agriculture sector as trade barriers kept food prices artificially high. Ricardo mirrors Adam Smith’s stance that, the market, although imperfect, is best left untouched. A glut, arguably cannot occur if all resources optimally utilized (Say’s Law,“supply creates demand”), however, inherently the law does not account for hoarding, accumulation of money without purpose or intention to save, spend or