Question

I need a short and clear opinion so I can understand the question and make my own opinion

Writing in the 19th century, the British economist Thomas Malthus argued that the law of diminishing marginal returns implied eventual misery for humanity because, in the case of agriculture, there is a fixed amount of available land and additional labor would only yield ever smaller increases in food production. The inevitable result, as Malthus saw it, was that population growth would eventually drive average food consumption excessively downward.

We have not yet seen this outcome. Malthus never would have imagined that food production per capita would be more than 20 times what it was a century ago. Importantly, this outcome does not contradict the law of diminishing returns. What do you think accounted for this growth in agricultural output during this time, while still facing the inevitability of diminishing returns? (Consider how the production function has been affected during this time period

Answer 1

Growth in agricultural output has increased due to technological advancements and increase in total factor productivity. As Technological usage has been able to increase output to unprecedented levels led by faster harvest, faster sowing at lower costs of production, achieving efficiency in terms of scale and as production has been fast paced.

Diminishing return is defined as the phenomenon where marginal benefit declines with each additional increase in production. However because of technological progress the industry has been able to scale its output led by increasing nutrient usage, on time measures being taken to prevent waste and efficient means of production being undertaken.

Now the industry has still faced diminishing returns because for example while earlier after labor spent 8 hours, and produced 800 output, additional 1 hour of work would face diminishing returns as the output would grow by only 50 (total 850 and work for 9 hours). Now because of several means of production, 9 hours of work transforms into 1800 output, while an additional hour increases the output at a lower marginal rate but nonetheless more than the one seen in the early ages. Thus by spending more on technology there are still diminishing returns to scale because land is in short supply and by employing one additional tractor, the productivity won't increase drastically because the land has limited capacity to produce.