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The Economic Madness of Malthusianism | Podcast Highlights

Blog Post | Health & Medical Care

The Economic Madness of Malthusianism | Podcast Highlights

Chelsea Follett interviews economist Stephen Barrows about the intellectual history of population economics, the benefits of population growth, and what we can expect from a future of falling fertility.

Read the full transcript or listen to the full podcast episode with Chelsea Follett and Stephen Barrows here.

The world population recently reached 8 billion people, sparking considerable debate about the consequences of population growth size. These concerns, of course, aren’t new. Can you walk us through the history of concerns about overpopulation?

Those concerns are traceable back to Thomas Robert Malthus, who lived in the UK in the late 18th century. Malthus observed that the population grew at a geometric rate, while the resources of the Earth, particularly food, only grew at an arithmetic rate. As a result, he argued that there is a limit to population that is enforced by famine and plague.

But Malthus was shortsighted. He saw poverty and a lack of resources, but he didn’t see the other side of the ledger, which is what humans can do to overcome population pressures. However, his concerns never went away.

Could you walk through some of the reactions from economists to these Malthusian ideas? How were they received?

Not all economists are pro-population growth, but generally speaking, they see a different dimension to human activity than what you might find from environmentalists and other experts in different fields.

Individuals like Jean-Baptiste Say and Frederick Bastiat began to interact with Malthus’s work and acknowledged some truths behind what he was saying. For example, as you employ agricultural land for crop production, you use the most productive land first, and then as you expand agricultural production, you use the less fertile land, and yields decline. But at the same time, these economists emphasize that human ingenuity is not static. Individuals adapt to their circumstances and find new ways to make the Earth’s resources more productive. We adapt to our circumstances in ways that you don’t see elsewhere in the animal kingdom.

In the late 19th century, Böhm-Bawerk and Friedrich Wieser bring up other factors. Böhm-Bawerk argued that the interest rate regulates prices through time and helps us accommodate some of the pressures from population growth. Similarly, Friedrich Wieser pointed out that in his own day, there was a significant increase in crop yields due to technology.

Economists like Ludwig von Mises, Friedrich Hayek, and Murray Rothbard emphasize the division of labor. Individuals have unique talents; if they specialize in what they do best, it benefits the whole population and helps us overcome pressures on the Earth’s resources. Murray Rothbard also pointed out that the idea of overpopulation presupposes an optimum population. And so, the question becomes, “what is the optimum population? And is it fixed?” And the answer is no because the environment is changing all the time, along with individual knowledge and technology. So, the so-called optimum population is also constantly changing, meaning that over or underpopulation is just a theoretical concept, not a concrete reality.

So, economists have been pushing back on this idea in various ways. One of the more recent prominent examples is the bet between the late University of Maryland economist Julian Simon and Paul Ehrlich. Could you talk to our listeners about that?

Ehrlich was an entomologist who wrote The Population Bomb in 1968, which made all sorts of apocalyptic predictions about mass famine and so forth. At around the same time, Julian Simon was investigating population and initially agreed that population growth was detrimental to the Earth’s resources. However, after he examined the data, he saw that his concerns were misplaced and that, in fact, population growth is associated with economic improvement.

They began debating back and forth, and eventually, Julian Simon proposed a bet. They created a price index of five metals and watched it for ten years. Simon bet that the price index would fall, and Ehrlich said that it would rise. Paul Ehrlich lost the bet.

Why did he lose? What is the relationship between population and prosperity?

When people think of population growth, I think too often they think in terms of stomachs and not minds. Humans have needs; we need to consume to survive, and it’s true that the Earth is finite in terms of its concrete materials. But the human mind is infinite. There’s no limit to ideas and ingenuity; the human mind can get effectively infinite value out of fixed resources. Think about the smartphone and all the objects that we no longer produce because we all have them in our pockets.

In short, the mind trumps the stomach.

Today, birth rates are falling below the replacement rate in advanced economies. If all the countries in the world end up on that same trajectory, we could end up even with global sub-replacement fertility. What do you think about the potential effects of global falling birth rates and population decline?

There’s a great book called The Great Demographic Reversal, which points out that not only does population growth matter, but the shape of the global population matters, whether your population skews young or old. As the population ages, there are fewer workers producing and a large older demographic still consuming, which can cause prices to rise.

Some of the challenges of a shrinking population will be addressed through innovation. In Japan, for example, they use exoskeletons to help people work into very old age, even in manual labor jobs. However, as a general rule, low fertility rates lead to a relative lack of new ideas. You need people to solve problems, and as you have fewer people to tap from, you don’t have the kind of ingenuity and division of labor that you had before. Innovativeness also tends to decline as you get older. That’s just the natural cycle of humanity. So, hopefully, we won’t see global population decline. I don’t think we’ve ever seen gradual global population decline in history. We’ve seen shocks to population, plagues, et cetera, but we’ve never seen a steady decline across the globe, and nobody really knows what that entails.

World Bank | Food Prices

Global Food Prices Ease amid Improved Supply and Trade

“Global grain supplies are projected to reach a record 3.6 billion tons in the 2025-26 season, marking a third consecutive year of growth—though at a slower pace than the average annual growth of the preceding two decades. Wheat supply has returned to its long-term average growth rate, while maize supply has rebounded after recent setbacks but remains below its historical trend. In contrast, supplies of rice and soybeans are projected to grow at about their long-term growth averages, building on last season’s significantly elevated levels.”

From World Bank.

Blog Post | Cost of Living

Time Pricing Mark Perry’s Latest “Chart of the Century”

Always compare prices to hourly wages to understand the true change in living standards.

Professor Mark Perry recently posted his updated “Chart of the Century,” featuring price and wage data from the Bureau of Labor Statistics (BLS). The chart tracks 14 items over the 24 years from January 2000 to December 2024 and includes both the overall inflation rate and changes in average hourly wages.

To examine the data from a different perspective, we calculated the change in time prices of these 14 items relative to the change in the average hourly wage. We then determined the abundance multiplier—a value that indicates how many units of an item you could buy in 2024 for the amount of work time it took to buy one unit in 2000. If there were no change, the abundance multiplier would equal one. A value below one indicates decreasing abundance, while a value above one reflects increasing abundance. We also calculated the percentage change in abundance for each item.

This analysis illustrates that things can become more expensive in dollar terms while simultaneously becoming more affordable in time prices. For instance, while the general Consumer Price Index (CPI) rose by 87.3 percent, average hourly wages increased by 123.3 percent. As a result, time prices fell by 16.1 percent. For the time it took to purchase one CPI basket in January 2000, a consumer could buy 1.192 baskets in December 2024—an abundance increase of 19.2 percent.

Notably, categories such as housing, food and beverages, new cars, household furnishings, and clothing all increased in money prices. However, after adjusting for rising wages, they became more affordable in time-price terms. Although 10 of the 14 items rose in nominal prices over the 24 years, only five had a higher time price when accounting for the 123.3 percent increase in hourly wages.

We also created a chart showing the percentage change in abundance for the general CPI and each of the 14 tracked items:

Find more of Gale’s work at his Substack, Gale Winds.

Blog Post | Food Prices

Have Eggs Ever Been More Expensive?

The money price of eggs is higher than in 1919, but the time price is lower.

The high price of eggs may have incentivized a burglar to heist 100,000 eggs from the back of a trailer in Pennsylvania. Have eggs ever been more expensive? The surprising answer is yes—much more. In 1919, eggs were five to six times more expensive: A dozen eggs were 61 cents, or around 5 cents per egg. Wages for unskilled workers at the time were around 25 cents per hour, so these workers had to spend around 12 minutes to earn the money to buy one egg.

Eggs at Walmart at the time of writing (Feb 14) are $8.32 per dozen, but unskilled worker wages and benefits have increased to $17.17 an hour. That would put the time price for one egg at 2.4 minutes. The time price for unskilled workers has decreased by 80 percent since 1919. For the time required to earn the money to buy one egg in 1919, unskilled workers get five today. They’re 400 percent better off.

How about blue-collar workers? Wages for blue-collar workers in 1919 were around 43 cents per hour, so an egg cost them 7 minutes. They’re now earning $37.15 an hour, so their time price for one egg is 1.1 minute. The time price for skilled workers has decreased by 84 percent since 1919. They get 6.33 eggs today for the time it took to buy one egg in 1919. They’re 533 percent better off.

Yes, the money price of an egg today compared to 1919 is high, but the time price is much lower. Always compare the money price to hourly wages to see the time price, since that is the true price we pay for things.

Why did the price jump so high? The USDA recently ordered the culling of millions of chickens in response to worries about bird flu. Reduce supply like that and prices are bound to increase.

Fortunately for us, chickens lay lots of eggs, so the market should be resupplied soon. I have such great faith in our egg-laying friends and free-market entrepreneurs that I’m willing to bet $1 that the time price of eggs will be lower in February 2026 than today. Any takers?

Find more of Gale’s work at his Substack, Gale Winds.