1. The Resurrection of Malthus:
Jeffrey Sommers Professor of Political Economy & Public Policy Senior Fellow, Institute of World Affairs
The Resurrection of Malthus:
space as the final escape from the law of diminishing returns

2. ’Nasty, Brutish and Short…’: Secular Stagnation and life before 1800

3. Energy Revolutions

4. Robbing Thomas Malthus: Industrialization and Defeating the Law of Diminishing Returns: 1780-1980

5. 1970’s Crisis: Stagflation and Supply-Side Solutions
Structural limits
Exogenous shocks (oil and decolonization)
Arguments:
Economy was investment starved
Top marginal and capital gains tax cuts needed to increase savings that would translate into investment
Redistribute income upward, as wealthy don’t spend increased income/wealth, they invest
Did it work? Did investment rates increase resulting in greater economic growth?

6. Economic Orthodoxies meet Secular Stagnation
Low interest rates = high rates of investment
High savings rates = high rates of investment
Above inoperable
Currently interest rates are near zero, yet investment is low
Savings glut, but investment rates low
Savings flow to assets, not investment

7. Finance Profit as % of all Corporate Profit

8. US Corporate Profits as % of GDP vs. Wages

9. US Govt. R&D

10. R&D Public vs. Private Private Sector R&D often Fictitious (Tax Write-Off, or only Applied Research)

11. In short, economies starved of demand and investment
In 20th century, governments supported emerging expensive technologies as customers, e.g., aircraft.
Government then becomes the major funder of new technologies as time horizons to profit, not to mention, risk, become too great for business to support.
Austerity in 21st century is cutting public research precisely at point when it needs to increase.

12. Need for an Investment Turn?
Restore
Infrastructure (physical and human)
Demand-side economic policies
Re-balance what John Kenneth Galbraith termed society’s technostructure
Discipline finance
Re-direct resources to space investment

13. Conclusion
We Risk Returning to the World of Pre-1800, if not pre In short, market fundamentalism risks returning us to the world of Thomas Malthus. Space-led investment might prove the escape from the gravitational pull of the law of diminishing returns.