Skip navigation Scroll to top
Scroll to top

Ahead of the curve: Thomas Malthus made a fundamental mistake

December 22, 2021

A commentary by Jürgen Lukasser, Chief Investment Officer of LGT Bank Österreich, explains how due to an increased surge in commodity prices faith in a pandemic-rattled world is dwindling. Has a new era of chronic shortages begun?

Ahead of the curve: Outlook 2022

It is understandable that we hear the name Thomas Malthus more often in these times. In his work “An Essay on the Principle of Population”, the political economist first described his ideas for a growing population without end which would at some point face food supply shortages due to the limit of usable land. As a consequence, disease as well as war are a necessity to result in a lower number of people. The Economist called Malthus a “false prophet”.

In his later work published in 1803, Malthus spoke of the above being solved via lower birth rates as couples married later and have fewer children. Hence, population growth would decline to a sustainable level. It must be mentioned that Malthus wrote at a historical turning point. His main ideas were a description of pre-industrial societies; the industrial revolution changed everything and brought a sustained improvement in living standards.

Today, is different than before due to the pandemic, but in general birth and death rates dropped significantly since the times of Thomas Malthus. His work re-emerged in the early 70s as food prices increased significantly in value. Also, global population growth had picked-up at that point in time. Once again, these worries of overpopulation were not sustainable as further advances in agricultural productivity increased global food supply. Hence, if worries were overblown a few decades ago, it is most likely that they are overblown today as well; gloom is overdone once more. It is likely that another green revolution will bring us even further.

Malthusianism has much to say about food scarcity and in general, about limits on resources and energy. Earlier scares from the 1970s proved to be wrong as new sources of energy were discovered. Another form of Malthusian limit recently emerged with the need to limit greenhouse-gas emissions in order to address global warming. This can be solved by shifting to a low-carbon economy. Please contact us for ideas on sustainable investing. As The Economist put it “… there is no limit on ingenuity. That is why Malthus remains as wrong today as he was two centuries ago”.

Risk information/disclaimer: This publication is an advertising document. It is for your information only and does not constitute an offer, quotation or invitation to make an offer, a public advertisement or a recommendation to buy or sell investments or other specific products. The content is written by our employees and is based on sources of information that we consider to be reliable. However, we cannot provide any assurance or guarantee that it is correct, complete or up-to-date. The circumstances and principles underlying the information contained in this publication are subject to change at any time. Information once published should therefore not be understood to mean that circumstances have not changed since publication or that the information is still up to date. The information contained in this publication does not constitute a decision-making aid for economic, legal, tax or other consulting questions, nor may investment or other decisions be made solely on the basis of this information. Advice from a qualified professional is recommended. Investors should be aware that the value of investments can fall as well as rise. A positive performance in the past is therefore no guarantee for a positive performance in the future. The risk of price losses as well as foreign currency losses and yield fluctuations due to an unfavorable development of exchange rates for the investor cannot be excluded. It is possible that investors may not get back the full amount they have invested. We exclude without limitation any liability for losses or damages of any kind, whether direct, indirect or consequential, which may arise from the use of this publication. This publication is not intended for persons who are subject to a jurisdiction that prohibits the distribution of this publication or makes the distribution of this publication dependent on an authorization. Persons into whose possession this publication comes must therefore inform themselves about any restrictions and comply with them.