Torrens and Malthus’ Challenge

Abstract

This paper examines the arguments of Colonel Robert Torrens against the hypothetical prospect that rising corn prices might result in higher farmers’ profits by reducing the real costs of manufactured articles used in the crop-growing activity. First, it shows how this idea evolved through time in Malthus’ writings on rent. Next, it scrutinizes Torrens’ approach to the subject of value, from its origins to the more elaborate version built up in some of his early inquiries regarding political economy. The outcome of his effort was a simplified image of the mutual interaction among the productive sectors, similar to modern input–output models, composed of an interdependent system with prices and a uniform profit rate determined simultaneously. Finally, some applications for this innovative analytical device are presented, but with an emphasis on the refutation of Malthus’ proposition. The concluding remarks stress Torrens’ ability to devise a proper quantitative answer to the parson’s theoretical challenge despite the scanty technical resources available to classical economists at that time.