Back to agriculture? Malthus, Torrens, and Ricardo on International Trade and Structural Change

Abstract

In this article, we have analyzed the relationships among international trade, structural change, and economic growth in Malthus 1817 and 1826, Torrens 1815, and Ricardo 1822. In his Essay and in the 1815 pamphlet Grounds of an Opinion Malthus addressed international trade policy issues and elaborated quite a few arguments, ranging from economics to geopolitics, to support food protectionism. In this article, we have focused on Malthus’s views concerning international trade-induced structural change and the long-run growth prospects of an industrial country that heavily depends on foreign corn imports to feed its own population. To put it briefly, Malthus claimed that, in the long run, agricultural countries will develop their domestic manufactures and cut both their corn exports and their imports of foreign industrial goods. That was the main economic reason why Malthus tried to persuade his readers that a food protectionist policy was the most effective way for the British economy to head toward a balanced and international trade-independent pattern of growth. In the Essay, Malthus never considered that international trade triggers a structural change process both in agricultural and industrial countries. By contrast, that was the gist of Torrens’s and Ricardo’s opposition to food protectionism in An Essay on the External Corn Trade (1815) and On Protection to Agriculture (1822), respectively. Accordingly, we have reconstructed and assessed Torrens’s and Ricardo’s views on the subject. Moreover, we have shown that, although Torrens and Ricardo reached broadly similar conclusions as concerns the long-run equilibrium of British agriculture in a free trade scenario, they followed two different analytical routes: Torrens generalized the Smithian “competition of capitals” argument employed by Malthus to the analysis of free trade among an agricultural and an industrial country, while Ricardo generalized his model of growth and distribution among trading countries endowed with plots of land characterized by different fertility and transport costs. Finally, we have argued that the theory of differential extensive rent may be used in a free international trade setting to derive further analytical results than those actually reached by Ricardo.