On Hollander’s and Keynes’s ‘Canonical’ Interpretations of Malthus
Part of Introduction: Two attributes characterise Classical Economics (The content of one of Professor Hollander’s works so titled explains what I mean by such a phrase). The first, a matter of prediction, is that populations and capitals grow relative to land, that land is exogenous and independent of the growth process. The second, a more normative characteristic, is that money should also be exogenous. Now, stocks of money, if metallic, do grow relative to land, as metals are ripped from the land, even if under conditions of diminishing returns. So, the `canonical’ classical growth model would say that commodity or real wage rates and net real rates of return to capital would fall (or may be initially rising as initial knowledge and returns to scale are realized but would approach stationary levels) so that population growth and capital accumulation would come to their respective standstills. One would 1 say, in Marshallian terms, that the prices of working and waiting would equilibrate at levels such that the flow of working and waiting would be just sufficient to maintain stocks of population and capital. The classical stationary state would eventually prevail.