Malthusian Fetters
Britain as a Malthusian subsistence economy and the implications thereof.
I was amused reading Martin Wolf’s Financial Times article (The infantilism of an ‘ungovernable’ Britain, 25th May) in which he proposed that the lack of UK productivity growth, and hence economic growth, was the source of Britain’s political woes. That this qualifies as ‘high analysis’ and ‘insight’ and was heralded as such, when the principle was laid out quite emphatically by Thomas Malthus over two centuries ago in his An Essay on the Principle of Population — a population rising faster than output will reduce living standards with the commensurate political, social and economic troubles that entails — perhaps speaks to the illiteracy of modern elites. These concepts were understood a long time ago but have seemingly been forgotten.
Nevertheless, the beginnings of the implicit recognition that Britain is bound by Malthusian fetters is progress, even if there remains a reluctance to consider how this came to be so. Here I will assess the case for Britain having become, at least for the great majority, a Malthusian economy through subsistence living standards and low productivity; and second, consider the consequences of that for the future.
The canary of subsistence
Subsistence, n. The action or fact of maintaining or supporting oneself at a minimum level.
Subsistence living is commonly associated with developing economies: the farmer tending his smallholding who grows who just enough to sustain his family and trade for the handful of other necessities he requires; the sweatshop worker paid a pittance for a long day’s work, just enough to feed herself, her children and little more; or the machine operator, risking life and limb for a measly stipend which disappears on the very basics. It is a life of constant stress and grinding poverty with little hope of relief, for there is no saving through which to lift oneself out of the quagmire. Chronic ill-health, ramshackle housing and run-down infrastructure (or its absence) are the hallmarks we associate with the subsistence economy.
Malthus considered subsistence as agricultural output i.e. food. Nowadays, in a developed country, there more many more essential goods: energy, housing, transport, even an internet connection. It is thus logical to expand the meaning of ‘subsistence’ to include these necessities of modern life. That the economy be subsistence in nature is a pre-requisite for the Malthusian fetters, for it means that there is limited surplus output and resources available to further distribute amongst the population.
By stealth, Britain has, for many, become a developed version of a de facto subsistence economy. Real wages have been stagnant since 2008, increasing overall by a trifling 2½% in 18 years1. That is, of course, using CPI, which is methodologically biased downwards, so the true state of real wages is likely to be a net decline since 2008. A cursory look at the increases in price of energy (+209%), rent (+70%), food (+85%) and transport (petrol +31%, rail fares +97%)2 since 2008, largely essential expenditures, confirms this view of prices likely outstripping wages.
“It very rarely happens that the nominal price of labour [wages] universally falls; but we well know that it frequently remains the same, while the nominal price of provisions has been gradually increasing [inflation]. This is, in effect, a real fall in the price of labour, and during this period the condition of the lower orders of the community must gradually grow worse and worse.” — An Essay on the Principle of Population, Chapter II.
Inflation is not the only thing weighing down wages; it cannot be pretended that immigration, which ran at hundreds of thousands net consistently over 2010s and surged in the 2020s, has not also had a role in suppressing wages, especially in cities and lower-skilled jobs. Per the official figures, net immigration 2008-25 totalled 5.7m3; it is rather simple economics that, all other things being equal, such an increase in the labour supply will suppress nominal wages. There may have been some increase in labour demand (in part due to the influx) to offset that, but certainly not to the tune of demanding 5.7m more jobs.
Inevitably, this decline of real wages manifests as a squeeze on living standards. A rarely-mentioned (by the media and politicians) tell of the precariousness of household finances is savings. On paper, UK adults have about £19,000 in savings on average. But the distribution is highly skewed, with a very long tail at the bottom: 1 in 6 (almost 9 million people) have no savings at all, 1 in 4 have less than £200 and 2 in 5 have less than £1,0004. That means 2 in 5 adults, over 20 million people, have barely enough (being generous) savings to pay a rental deposit or replace their ageing cars and boilers when they pack it in. People with less than £1,000 in savings are effectively not saving; they are living from one month to the next, at the mercy of whatever life throws at them. They are subsisting.
“…as labour [work] is the only property of the class of labourers, every thing that tends to diminish the value of this property must tend to diminish the possessions of this part of society.” — An Essay on the Principle of Population, Chapter XV.
This is the subsistence economy. Some of those 20+ million will be on welfare, which will partially (though not completely) protect them, but the majority will not be. While welfare scammers and absurd edge cases naturally make the news, and there are certainly issues about welfare and social housing eligibility for immigrants, the notion that recipients are overwhelmingly frauds or lazy is baseless. Take oft-referenced surge in young people claiming disability benefits, for example; in one sense this might be ‘laziness’ on their part, but such an argument assumes there are jobs to be had in the first place. With youth unemployment now at 1 in 6 and entry-level jobs being slashed, and what remains becoming a competition against a continuous stream of immigrants, it is hardly surprising that young people are depressed and giving up on job searching.
Beyond that 20+ million lies another group, at a guess perhaps another 1 in 5 — 10 million people or so — who have a couple of thousand in savings. They have enough to weather a moderate financial shock or two but nothing more and are either making no or very slow financial progress. This group are also more or less subsisting, just with a bit of a cushion to hopefully see them through a bad month or two. But a couple of thousand pounds does not last you long in this economy, what with rent, bills and transport; even a short a spell of unemployment is probably catastrophic.
That leaves well over half — nearly two-thirds — of adults subsisting and therefore vulnerable to financial catastrophe. Arguably, the figure will be even higher given, say, £5,000 of savings even does not stretch very far in a city like London, Edinburgh or Manchester. Regardless, this swathe of the population being in such a perilous position is the canary in the coalmine, the deadly gas being an unfortunate coming coincidence of fiscal crisis and technological revolution, the former stemming from a bond market panic and the latter the inexorable rise of AI and adjacent technologies. The fiscal crisis will cause a sharp recession (and likely necessitate welfare reforms) and the technological revolution will gut the job market.
We can debate how far the AI revolution will go. The end destination is unknown. To some degree, the debate does not really matter; the first effects are already being felt. Companies across service industries — tech, law, finance, consulting — are cutting headcount, especially at the entry, junior and admin levels. These are the same industries which have been the principal labour sink for the past forty years. Graduates will be (and already are) hit first, followed by jobs where the work is mainly procedural and repetitive, such as admin, support staff and junior analysts. What happens after that is anyone’s guess, but the shock will already have been enormous. British fiscal pressures (e.g. rising taxes) and government failure (e.g. misallocation of education towards universities) will exacerbate this trend.
The AI revolution is not the focus of this piece. Others have written compellingly about its potential dynamics. Here, I will focus on the Malthusian fetters of Britain as as a subsistence economy. First, however, I must address the question of productivity.
The arithmetic output constraint
Malthus postulated that, as population increases geometrically (2, 4, 8,…) while agricultural output only increases arithmetically (1, 2, 3,…), population growth will outstrip agricultural output growth. In turn, that will cause shortages and declining living standards, which then, through ‘preventative’ (declining births) and ‘positive’ (rising deaths) checks (the Malthusian fetters, as I call them), leads to the population shrinking. The economy is therefore caught in a ‘Malthusian trap’, the population oscillating up and down, constrained by arithmetic output growth.
Malthus has long been derided by modern economists who, I suspect, have not taken the care to read his 1798 An Essay on the Principle of Population. I recall an economics lecturer of mine briefly covering the Malthusian model and then dismissing it, never to be seen again (until the exam). Criticisms mainly stem from Malthus’s failure to consider productivity improvements allowing agricultural output to increase geometrically and therefore keep pace with population. This is a fair, though perhaps somewhat harsh, critique, as Malthus was writing when the industrial economy was in its infancy, so significant productivity growth was very much an innovation.
Let us consider this critique in the context of Britain today. We can observe that UK productivity growth has been stagnant since 2008, averaging just 0.4% per annum, compared to 2.2% from 1990-20075. Such a low productivity growth rate makes output growth much closer to arithmetic growth than geometric.
The causes of this are complex and multi-faceted, and beyond the scope of this work to explore in full. In brief, part of the problem is certainly supply-side dysfunction from environmental and climate policies, rising taxes and burdensome regulatory expansion, which stifle investment, growth and innovation.
Another part is mass immigration: population growth increases output arithmetically, as it adds one unit of labour which produces a fixed amount of output per year (this is sometimes known as ‘extensive growth’). Productivity growth can then augment this, increasing it over time, but that will be constrained by the productive potential of the worker, for example how skilled they are. Low-skilled workers (and hence jobs) have inherently more constrained productive potential, as there is limited scope for improved efficiency, use of technological complements, more training, and so on. Immigration over the last twenty years, which accounted for the bulk of population growth, was largely of low-skilled workers, so we would expect limited productivity growth from them over time. That clearly aligns with the UK’s near-zero 0.4% average annual productivity growth since 2008.
The nature of ‘output’ (as in GDP) is also of interest to us; some forms, such as plain consumption (spending by people on goods and services), are less productive than others, such as investment. Investment generates new output in the future, from new factories, technology, and productivity — in other words, it contributes to geometric output growth. Consumption, in contrast, is a transfer from one part of the economy to another which is then recycled back e.g. workers work, for which they get a wage from businesses, then they spend that wage on consumption of goods, recycling it back to businesses.
“Wealth employed as capital [investment] not only sets in motion more labour than when spent as income [consumption], but the labour is besides of a more valuable [productive] kind.” — An Essay on the Principle of Population, Chapter XV
Greater emphasis on consumption (and consumptive government spending e.g. welfare and pensions) rather than investment reduces long-run output growth, making it more arithmetic. This has been a problem in the UK for a while: Gross Capital Formation (i.e. investment), as a proportion of GDP, averaged 24% over 1970-1989, after which it fell to 18-19%6, where it has hovered ever since (barring a dip after 2008). Moreover, the Cameron Ministry of the 2010s, as part of its ‘austerity’ drive, significantly cut government investment, such as in infrastructure, to make savings, the negative implications of which are now becoming apparent (potholes, for example).
Taken together, we can say with confidence that the UK economy now satisfies Malthus’s parameters: arithmetic output growth in a subsistence economy. It will therefore be bound by the Malthusian fetters. Now to consider the implications of this.
The Malthusian Fetters
“The superior power of population cannot be checked without producing misery and vice…” — An Essay on the Principle of Population, Chapter II.
The central variable in the Malthusian model is living standards, which can be broadly conceived of as the economy’s output divided amongst its population. It is living standards which Malthus contends trigger the preventative and positive checks — the Malthusian fetters — on population to bring it back within the capacity of output to sustain.
Preventative checks relate to declining birth rates, driven by delayed marriage, deferring having children, having fewer children, and use of abortion (inconceivable to Malthus) which slow the population growth rate. Simply put, as population growth outstrips output growth, living standards decline as scarce resources (subsistence) have to be divided up between ever more people. That causes people to delay marriage and reduce child numbers as they can no longer sustain larger families (see stagnant real wages). We have all heard the refrain, “I don’t want to have children until I can afford to…”. These preventative checks are well underway in the UK, as we would expect for a subsistence economy:
The average age at first marriage in 2023 for men was 34.7 and 33.0 for women, up from 32.1 and 29.1 respectively in 2008 & 29.6 and 27.5 respectively in 19977; and
The total fertility rate (average children per woman) has declined from 1.96 in 2008 to 1.39 in 2025, the lowest ever recorded8.
We ought to note that these figures include immigrant populations, who tend to marry younger and be more fertile than white Britons. White British births accounted for 53% of live births in 2025, down from 63.6% in 20089. This suggests fertility of white Britons is lower than that of immigrants i.e. the Malthusian preventative checks are more advanced amongst white Britons.
Immigration, then, is exacerbating the preventative Malthusian fetter by accelerating population growth while helping to suppress output growth, making it arithmetic. It is remarkable that Britain, the first country to escape the Malthusian fetters in the 19th century, has managed in the 21st to return itself to a Malthusian state through a deliberate combination of excess labour, imported in the form of immigration, and a suffocation of investment.
Preventative checks are followed by positive checks, which relate to increasing death rates. Famine, disorder, violence, disease and war are its heralds, as resources become scarce and competition for them increases. Thankfully we have not reached this point yet, but there are perhaps the first warning signs of something of their ilk approaching. The steady deterioration of public services such as the NHS, infrastructure and education, which are essential parts of modern living standards; the pervasiveness of complete subsistence and the perilous state of most people’s finances, as demonstrated above; and the disintegration of the body politic into groups effectively competing for ever more limited resources (money, jobs, public services, housing, everything) — pensioners, welfare recipients, immigrants, young people — and the inability of the political system to rectify that.
“The positive check to population…is confined chiefly, though perhaps not solely, to the lowest orders of society.” — An Essay on the Principle of Population, Chapter V.
At risk of being branded a pessimist (or worse), I suspect we are much further along the Malthusian cycle, the fetters tighter and more leaden, than is commonly realised, especially amongst the politico-economic elite. Modern technology perhaps precludes some of the most devastating outcomes of history, but it has also raised our expectations, made us less prepared for hardship and created new points of failure. The coming AI revolution will likely exacerbate the Malthusian fetters. Exactly how this will all pan out I cannot say, though I believe it beyond doubt that some great crisis is advancing upon us.
The reader may have the chance, if they have the means, to make such preparations as are possible for a spectrum of eventualities. For what it is worth, my view is that material and financial independence, close networks, and backups for essentials will always serve well. Cities, where the Malthusian fetters already bind the tightest and will most likely bind tighter still, perhaps ought to be approached with caution. There is a limit to what the individual can do, of course, and all decisions involve trade-offs; there is no single approach that works for everyone. Suffice it to say, it never hurts to be (at least somewhat) prepared.
QCMP
All ONS: Electricity, rent, food, petrol and rail fares. Measured Jan 2008 – Jan 2026. It is worth nothing that some of these – electricity and rail fares – are directly regulated.
Statistica. The true figure is surely higher, given what even the official statistics say of illegal migration (that an illegal immigrant has been counted means they were detected, of course; how many were not?) and the admission by the Home Office that it has almost no knowledge of the status of visa holders, many of whom have likely stayed (illegally).
ONS Marriages. This is strictly only for England & Wales but there is no reason to believe the pattern is not the same for Scotland and Northern Ireland as well.
ONS Birth Registrations. 2008 was in fact the high point of a rise in the fertility rate through the 2000s. As with marriages, this is strictly only for England & Wales but presumably applies for the rest of the UK as well.
ONS Linked Births. Also strictly only for England & Wales. Given Scotland and Northern Ireland have a relatively higher white British share of the population, the overall figures for the UK will likely be a bit higher.
I read this by the pool! A very literate piece, which I do not say lightly of anything reaching for Malthus, since most people who do have not opened the book - and you clearly have.
The strongest bit for my money is the one that disarms the usual rebuttal. The standard dismissal is that he just “forgot productivity”, and your answer, that productivity has fallen to 0.4% and dragged output growth back toward the arithmetic line he assumed, is elegant and largely right. The extensive versus intensive framing of why low-skill inflows deliver near-zero per head growth is cleaner than most attempts at it, and building the whole thing on ONS series rather than just vibes is exactly how I’d say it ought to be done. So congrats for that!
The one thing I would ask you, and I mean to say this as more the thread I would pull next than a complaint per se, is what actually closes the loop? A Malthusian trap needs its equilibrator; the positive check, and you are honest enough to say we are not there. I tend to agree btw. So what stands in for famine in a rich country that borrows to hold its people above subsistence? My own suspicion is the bond market is quietly doing the work the old checks used to, slower and a good deal ruder. But I would rather read where you take it - if that makes sense?
Strong stuff. Looking forward to the next!