Thomas Malthus was born in 1766. In 1798, he published "An Essay on the Principle of Population as it affects the Future Improvement of Society". Subsequent revised editions appeared in 1803, 1806, 1807, 1817, and 1826. The First Edition is indeed an essay, though it contains the outline of the Malthusian argument. Malthus did a great deal of subsequent research for the later editions.

The reasons I can claim to be the publisher of Thomas Malthus are that my publishing business, Pickering and Chatto, which was founded by William Pickering in 1820, was the first publisher of a collected edition of Malthus's works, edited by E.A. Wrigley and David Souden. This was the first "Pickering Master" that we published after reviving the Pickering imprint; we published it in 1986, and it remains the only collected edition of Malthus.

Thomas Malthus died in 1834. He had already prepared a revised second edition of his "Principles of Political economy" which was published by William Pickering in 1836. It is, however, the Essay on Population, 1798, which first states the Malthusian argument:

"The power of population is indefinitely greater than the power in the earth to produce subsistence for man. Population unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first power in comparison of the second."

The early economists, at the start of the industrial revolution, perfectly understood that the food supply might keep pace with the growth of population for a long time, perhaps even for centuries. In fact, there were serious famines in the nineteenth century, particularly in Ireland and India. There were also wartime disruptions of the food supply in the twentieth century. Yet, by and large, the continued growth of the human population, which is now above six billion, has so far been met by continuing increases in agricultural productivity. The human population has grown very fast, but so has the supply of food.

Various factors have shaken the confidence of economists in the future of food supplies, and in the ability to feed a world population which is continuing to grow. The current rise in food prices has caused a Malthusian shudder among the major Governments who feel at least a preliminary fear that they will not be able to feed their populations. A Government which cannot feed its people is not likely to remain in power for long.

The present rise in prices seems to have been linked to the rise in the price of oil to more than $100 a barrel. Although there are foodstuffs which have a relatively low dependence on oil, most food stuffs depend on oil for fertiliser, for protection against disease, for farm technologies, for transport and distribution. As oil prices have doubled, food prices have also doubled.

Another factor has been the use of biofuels, grown on agricultural land, to replace oil. Governments have been optimistic that this would contribute to the reduction of CO2 gases. Biofuels have been introduced, probably quite wrongly, as one of the renewable answers to global warming. In fact, the loss of food production has contributed to the threat of famine, and to the growing number of food riots in poor countries. More useful is likely to be gene modification which will raise the productivity of agriculture and reduce the need for oil based inputs.

It is, however, the social impact of the growth of the Asian economies that is causing the most immediate alarm. India already has a huge middle class, sometimes estimated at 250 to 300 million, or about 30 per cent of the whole Indian population. Chinas has, or will soon have, a middle class of the same size. Many Indians still choose an Indian rather than a Western diet. In China, the preference for a Western diet seems to be spreading. Yet meat can only be reared at the cost of grain. If grain is converted into animal protein and then fed to human populations, about eight times as much grain will be needed. The more the Chinese middle class opt for a Western diet, the less grain will be available for the world's poor. Yet China is a country still growing at around 8 per cent a year.

Finally, there is the growing anxiety that global warning will cause a spread of the deserts. For instance, Africa, which one thinks to be a fertile continent, is threatened by the spread of the Sahara Desert. Global warming will certainly change the pattern of the world's water supplies, and is expected to reduce, rather than increase, the acreage of cultivable land.

In the wealthy countries of Europe, the birth rate has fallen below replacement level, though there is extensive population movement to make up the shortfall. But the world is not big enough, or productive enough to provide Texas-style T-bone steaks for the peasants of Asia. The famines which were forecast by Thomas Malthus's arithmetic were deferred in the twentieth century, but they may reappear in the twenty-first.

William Rees-Mogg
for The Daily Reckoning Australia

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• Americans Are Hoarding Food

"The World Bank met on Sunday faced with a mounting food price crisis that has sparked deadly unrest in developing countries, underscoring the urgency of fighting hunger and poverty," reports Channel News Asia.

How urgent, you ask? The Prime Minister of Haiti was sent packing this weekend by crowds protesting soaring food and fuel prices. We don't even know who the man is but reckon he won't be the last public official to be ridden out of town on a rail before this current crisis is over (and it may not be any time soon).

As usual, it's the people at the margin (whether lending or with food) that are affected first when surplus turns to scarcity. Despite all the daily signs of abundance here in Australia, let us not forget that there are about four and half billion people on the planet who have little margin for error in their daily lives. If food prices go up, many of these people go hungry.

World Bank President Robert Zoellick, doing his best impersonation of Franklin Delano Roosevelt, wants a "new deal" for global food programs. He's asked richer nations to contribute US$500 million immediately to help get food to poorer nations.

IMF President Dominique Strauss-Kahn was less pragmatic but more rhetorical. Wrapping up his organisation's annual spring meeting, he said that, "Food prices, if they go on like they are doing today ... the consequences will be terrible…Hundreds of thousands of people will be starving…As we know, learning from the past, those kinds of questions sometimes end in war."

People often talk about resource wars being a common feature of the coming century (or decade). But it's usually oil and energy they're talking about, not rice and wheat. Food is fuel for the body (we've been watching the Biggest Loser). If you don't have access to cheap calories, what good is cheap fuel?

It's our contention here at the Daily Reckoning that both food and fuel are getting more expensive. The scary thought is that artificially low interest rates and cheap energy have, for many years now, sent bogus signals to the world about how much and how fast the population can grow. Agricultural abundance is only a very recent (and perhaps temporary) historical phenomenon. It's no coincidence that it occurred alongside the energy boom from cheap oil.

Not that it's any consolation to starving people stranded in long petrol lines, but businesses in the agricultural sector are going to boom (provided they aren't nationalised). Farm equipment, fertilizer, and large producers should all see earnings rise this year. And next year. And the year after that.

The second "f" crisis is in finance. It's been with us so long now it doesn't seem like it's new. But some people are slow on the uptake. The nerve endings of large institutions like the IMF and World Bank are few and far removed from the tiny central brains that direct the movements of these mammoths. Brontosaurus Banks.

Like a bunch of dinosaurs standing under a meteor shower, the G-7 meeting this weekend produced lots of talk and no action. The ministers agreed that concrete steps need to be taken in the global financial system to improve transparency and the way the banks value certain assets. The G-7 statement also paid lip service to issue of credit ratings and how to make sure in the future that garbage debt doesn't get a Triple A investment grade rating.

Here's the trouble though…American policymakers are worried about recession and plunging house values. Everyone else-especially the increasingly sweaty Wayne Swan-is worried about inflation. Because of the different concerns, no one can agree on any policy solutions.

The conclusion? There is no one solution to the credit crisis. That is bad news for people who think of the economy like a machine. It's not just a matter of changing the oil or checking the fuel pump. The engine is sputtering, the drive train is wrecked, the tires are flat, and someone seems to have cut the brake lines. There are no air bags.

As they say in the used car business, it's not the years, it's the miles. You wonder if this globalisation jalopy is going to make it.

As for the dollar, Europe would like it to be stronger in order to revive its exports. Dollar-pegging countries in the Persian Gulf would like the dollar to be stronger too, so they don't import inflation and the political instability that goes with it. Even Japan and China would like the dollar to be stronger. Dollar strength maintains the basic economic model of the last 50 years: manufacture cheap and sell to America.

But the dollar is not strong. And the things that would make it stronger-a lower trade deficit, higher interest rates, lower government spending-are not going to happen. In fact, the opposite will happen. While officials talk up a "strong dollar," everything they actually do weakens the dollar.

This is why the day-to-day movements in the dollar index and in gold don't tell you much. The most important fact about the gold price is that that the official policy of the U.S. government is to cheapen its currency. Rates are being lowered. The government is spending money. It's also giving away money, hoping Americans can spend the country out of recession.

Do you know of any person or any nation that ever spent its way to prosperity? Neither do we.

The fuel crisis hasn't reached the same acute stage as global food markets. But in time, it will. There were two developments in the clean coal front this that caught our eye this week. First, "Australia is now investing $63 million in developing clean-coal technology in China, our biggest coal buyer," according to Dennis Shanahan in today's Australian.

Making the last stop in his first world tour, Aussie PM Kevin Rudd told reporters made the case for an Australian Chinese partnership on coal, "The fact that Australia is the world's largest coal-exporting country, and that China is the world's largest coal-consuming country, presents both of us with a fundamental responsibility to act in this area of critical technology," he said.

You say "responsibility" we say "opportunity." Now that we are moving into a world of energy "haves" and "have nots," coal is a realistic source of transportation fuels for oil-poor, coal-rich nations. What coal-rich nations lack is the technology and capital to turn coal into liquid transportation fuel. Australia has several public companies that can help them do it. That's the opportunity.

The trouble with above ground coal-to-liquids (CTL) technology is that it produces nearly double the carbon dioxide emissions that you get from burning coal to make electricity. In the U.S., green politicians have actually prohibited U.S. government agencies from buying coal-based fuel with tax payer money.

The U.S. has plenty of coal. The Air Force would like private enterprise to turn that coal into fuel for U.S. planes. But California Congressman Henry Waxman introduced a provision into last year's U.S. Energy bill (section 526) that prohibits government agencies from buying fuels from "unconventional" sources.

Those "unconventional" sources are oil shale (the Pieceance Basin in Colorado), coal (the Powder River Basin Wyoming), and heavy oil sands (found in Alberta in Canada). Two U.S. Congressman are looking to repeal Section 526 from last year's U.S. Energy Bill and unlock the future fuel from those unconventional hydrocarbons.

Will the section be repealed? It depends on what you think about global warming. We won't weigh in here. Our main interest is in how governments respond to the dueling crisis of Peak Oil and Global warming.

The old "real politik" answer is to use your domestic resources to achieve energy security. This way you don't exchange your currency reserves for oil and outsource your supply of a vital industrial commodity to foreign interests. If you have lots of coal but no oil, you turn your coal into fuel.

But hey, if the planet is warming and coal is the culprit, burning more coal doesn't exactly make things better, does it? What do you do? Go nuclear? Conserve? Go renewable?

All of these options are on the economic table and an intelligent and prompt response is becoming increasingly urgent. You can bet that the government will do something, and probably the wrong thing. Meanwhile, our money is on the firms doing something with coal, wind, waves, and solar.

These three crises-food, fuel, and finance-are a formidable triply whammy for the global economy. It's bad news for the indexes, which already have plenty of bad economic news to consider. But for a certain class of agricultural and alternative energy firms, this could be the bull market of a lifetime.

Dan Denning
The Daily Reckoning Australia

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• Thorium as a Nuclear Fuel
• Increased Oil Production Won’t Solve the Energy Crisis
• Are Farm Prices Destined to Rise as More People Compete for Food?

From the article: "... what is really catching the attention of Goldman Sachs now is the outlook for agricultural prices. Or as Jeff Currie, head of commodities research at the US bank, says with disarming cheer: 'We think we could go into crisis mode in many commodities sectors in the next 12 to 18 months... and I would argue that agriculture is key here."

"Mr. Currie argues... if the world today was a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world's biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin - as America secures oil in the most efficient manner by sending teams of Texans to Riyadh.

"But in practice numerous investment controls prevent Saudi Arabians from buying Wisconsin farms and Americans owning Saudi oil wells. And these controls are not being dismantled now. On the contrary, mutual mistrust is now rising. Hence the fact that Gulf leaders are currently considering desalinating sea water to plant wheat in the desert - while the US and Europe are trying to turn corn into fuel.

"Such exercises might make sense in domestic political terms; but they are apt to be fiendishly expensive. Thus the upshot of this misallocation, Mr. Currie would argue, is even more inflation - even if the world does experience some form of growth slowdown.

"Now, for any investor who is long on commodities right now (and I would guess that club includes Goldman Sachs), such trends might seem to smack of good news. For anybody who is dirt poor in the developing world, however, the picture is disastrous.

"But leaving aside this very real human tragedy, what should also be crystal clear for investors is that this is not a picture that points to 21st-century capital markets progress; nor is it likely to breed stability in the medium term. Anyone who thinks this decade's problems start and end with credit, in other words, may yet receive a rude shock; sadly, we live in a world where soybeans may yet pack as painful a punch as subprime."

"The globalization of the food supply has been great," Dan continues. "3,000 mile chicken Caesar salads, as Jim Kunstler puts it. But just in time, calorie delivery is running straight into more conventional realities... like droughts... floods... and plain old high prices.

"I always thought the French position on retaining the ability to produce your own food was never fully discussed as a strategic choice. It is one thing to outsource your textile industry... or your industrial base... or your supply of oversize sweat pants.

"But outsourcing your supply of food and water... depending on unfriendly or unreliable trading partners to keep sending fresh fruit and poultry... or thinking the global system of trade will forever expand and never again contract... these are all dangerous assumptions that could leave you with an empty national stomach at night."

Our Daily Reckoning suggestion: plant a garden.

Bill Bonner
The Daily Reckoning Australia

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