China's Long Malthusian Crisis After Mao's Death

 

Thomas Robert Mathus (1766-1834) died 180 years ago but his Essay on A Theory of Population (you can read it here, but few people have) continues to stir strong controversy and continues to be misunderstood. Karl Marx (1818-1883)  considered the assertion that growth would outstrip agricultural production a libel on the Human Race since it was the Capitalist System that would likely fail to produce enough food. Kenneth Boulding (here) was the first to reformulate Malthusian Theory as a General System and point out that it was simply a truism: population growth could not outstrip economic production without creating a crisis. In this post, I will apply a statistical systems model to the Economic growth of China after WWII that clearly identifies the Chinese Malthusian Crisis that lasted from 1975 to 2005 (see the model outputs in the graphic above).

Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio (An Essay on Population, p 4).

Malthus was not a systems theorist. Systems Theory had not been invented when Malthus wrote in 1798.  The quote above is what has made it impossible to reason with Techno-optimists. Malthus was trying to lend some mathematical rigor to his analysis. It made his two equation theory testable and falsifiable. It can easily be proved wrong and is a perfect scientific hypothesis. So why are we still talking about Malthus? Systems theory, invented in the Twentieth Century, allows us to restate the Malthusian theory in a general form that continues to be testable, useful and not casually falsifiable. It is useful because conventional Liberal Economic theory has nothing useful to say about population growth. It is simply an exogenous force that a stable economic system can always accommodate. Liberal Economic theory also has nothing useful to say about unemployment, depression and societal collapse--all these problems are important for China (see below).

So, let me just restated Malthusian Theory as a systems model (above) to avoid sterile arguments. As a system, Malthusian Theory agues that the comparison between agricultural production (QA) and population (N) can (it doesn't have to) function as an Error Correcting Controller (ECC) defining the State of the System (S). If (QA-N) is positive the system can continue growing. If (Q-N) < zero the system will start contracting. People living at the subsistence level will start starving while the wealthy can emigrate (EM). Technological change (TECH) can also intervene (e.g., the Green Revolution) to boost agricultural productivity. During a famine (negative shock to QA), however, technological innovations might not necessarily be immediately available or affordable to a society living at subsistence.

What is typically misunderstood about the Malthusian System is that there should be feedback between the state of the system (S), population growth and production. Famines should be a signal that the system cannot support the current population and that something must be done.

So let's return to China. Here is the Measurement Matrix for the CNL20 State Space model:

The first row, CN, describes overall growth and explains 90% of the variance in the indicators (taken from the World Development Indicators--Databank. The second component, CN2 (Malthus2 in the graphic above) describes the Malthusian Controller (0.55Q - 0.30N). It explains an addition 0.06% of the variation. The third component, CN3, describes a global unemployment measure, (0.82LU - 0.50 KOF) where KOF is an Index of Globalization from the Swiss Economic Institute.

The Malthus2 (CN2) component, in the graphic at the beginning of this post, reaches a low point (Q<N) between 1990 and 2000, but the Malthusian Crisis extends from 1975-2005. Major events in Modern China's History (Death of Mao, One Child Policy, Tianamen Square  Protests and Massacre) happened during the Malthusian Crisis. 

You can run the CNL20 BAU model here. You can run the CNL20 Malthus model here.