Stigler on Malthus: A Note

Abstract

In an essay on “The Ricardian Theory of Value and Distribution,” Stigler, commenting on Malthus' example of a geometrically increasing population and arithmetically increasing output, states the following: “… Malthus' ratios implicitly assumed sharply diminishing returns, for his numbers define the production function, L = 2p-1 where L is labor (proportional to population) and P is produce. With this production function, indeed, if workers received a wage equal to their marginal product, the aggregate wage bill would be independent of the size of the labor force, and population simply could not grow!”