Progress and Poverty

According to Ricardo, rent increases as the population grows because it requires more food and land cultivation. Ricardo’s conclusion is accurate, but it does not tell the whole story. There are other causes that raise the rent. The history of material progress features three factors: population growth; the development of production and exchange; and the development of education, government support, and other factors that “increase the power of producing wealth” (226). Nations develop in this direction at different rates. Of relevance here is the wealth-producing power brought by material progress. For this reason, it is important to examine population growth and knowledge separately.

This chapter examines the effects of population growth on wealth distribution, excluding the factor of technological advancement. The accepted explanation for the reason why population growth translates into land rent increase is the fact that it leads to an increased demand for agricultural production. The latter is supported by Malthusianism and its concept of population growth running into the limitation of food supply. This theory does not consider the growing labor efficiency of cultivating land by producing larger quantities of wealth. Eventually, the cultivation of poor-quality land may indeed reduce the minimum return on labor.