About the malthusian trap

 

Basic vocabulary to analyze the graph :

* Developped/developping countries vs. emerging countries * Gap * Divergence/convergence * Economic catch-up process * Turning point * A straight line (an horizontal straight line)/A sharp climb = take-off = to skyrocket * Self-sustained growth.

Malthusian trap : Economic situation in which society is maintained at its subsistence level.

MALTHUS (1766-1834).

Economic growth : The process by which a country escapes from the malthusian trap resulting in a self-sustained growth.

Some comments :

One way to interpret this picture is to say that modern economic history comprises just two Big Developments: the Industrial Revolution and the Great Divergence.  Up until around 1800, the chart depicts world income per head as basically flat, describing a world in which there is no sustained improvement in average living standards for century after century.  Throughout most of human history, the world economy is mired in the poverty and misery of a Malthusian trap, such that any increase in income is eventually offset by a commensurate rise in population growth that returns income per head back to subsistence level.  In other words, the material lot of the average eighteenth century English labourer was probably little different from that of a medieval peasant or even a slave in Periclean Athens. 

Then, sometime in the eighteenth century, the Industrial Revolution in England marks the point when the world economy, or, more accurately, one part of it, begins to escape from the trap.   While the world economy as a whole was stuck in a Malthusian trap, the gap between living standards across countries was relatively small.  But once some countries started to experience strong growth in income per head, while others did not, the outcome is what Kenneth Pomeranz calls The Great Divergence.

Source : http://www.lowyinterpreter.org/post/2007/11/13/The-great-convergence.aspx

The malthusian trap.

The Malthusian trap, named after political economist Thomas Robert Malthus, suggests that for most of human history, income was largely stagnant because technological advances and discoveries only resulted in more people, rather than improvements in the standard of living. It is only with the onset of the Industrial Revolution in about 1800 that the income per person dramatically increased in some countries, and they broke out of the Trap.[1]

 It was Thomas Malthus who first made the argument that in "every age and in every state" that population increases are limited by the means of subsistence, and that when the means of subsistence increases, population will also increase, and that the population increase will be limited by "misery and vice." This pessimistic view on the impossibility of real progress was first made[2] in 1798, ironically, just as the industrial revolution was getting underway.

 In accordance with the theory, cross-country evidence indicates that technological superiority and higher land productivity had significant positive effects on population density but insignificant effects on the standard of living, during the time period 1-1500 A.D (Ashraf and Galor, 2010). In addition, scholars[3],[4] have reported on the lack of a significant trend of wages in various places over the world for very long stretches of time. In Babylonia during the period 1800 to 1600 BC, for example, the daily wage for a common laborer was enough to buy about 15 pounds of wheat. In Classical Athens in about 328 BC, the corresponding wage could buy about 24 pounds of wheat. In England in 1800 AD the wage was about 13 pounds of wheat.[5] In spite of the technological developments across these societies, the daily wage hardly varied. In Britain between 1200 and 1800, only relatively minor fluctuations from the mean (less than a factor of two) in real wages occurred in Britain. They peaked at around 1450 and in 1800 they were actually significantly worse.

 Causes for the Malthusian Trap and theories for the causes of the Industrial Revolution have been as multifarious as the theories of the fall of the Roman Empire. The transition from the Malthusian epoch to an era of sustained economic growth is explored by Unified growth theory[6] One branch of Unified growth theory is devoted to the interaction between human evolution and economic development. Some argue that natural selection during the Malthusian epoch selected beneficial traits to the growth process and brought about the Industrial Revolution.[7] Consistent with the theory, evidence shows the survival of the richest in England during the 17th century.[8]

According to Wikipedia.

 

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