Malthusians and Neo-Malthusians do not traditionally use compound interest on financial assets to make people poorer; rather, they utilize the mathematical concept of
exponential growth—often referred to as geometric progression—to argue that population growth will inevitably outpace resource production, thus keeping humanity in a state of subsistence poverty.
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While modern interpretations suggest compound interest on capital amplifies wealth inequality, the foundational Malthusian argument centers on demographics rather than financial mechanics.
The Core Malthusian Mechanism: Exponential Growth
Thomas Malthus (1798) argued that population, if unchecked, increases geometrically (e.g., 2, 4, 8, 16), which is equivalent to compound interest over time. Conversely, he believed food production only increases arithmetically (e.g., 1, 2, 3, 4)
- The Trap: Because population grows exponentially (like compound interest) while resources grow linearly, humanity is trapped at a subsistence level.
- "Checks": When population exceeds resource capacity, "positive checks" such as famine, disease, and war reduce the population, which in turn reduces average wealth by forcing labor competition.
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Modern Distinctions: Neo-Malthusianism
- Neo-Malthusians share the belief that exponential population growth leads to poverty, but they support family planning and birth control rather than the "moral restraint" or natural checks Malthus advocated