David Ricardo and Thomas Malthus had two paradoxical ideologically different idealogies. Ricardo was rich, but favored the poor; Malthus was poor, but supported the rich. Ricardo was well respected by his contemporaries; Malthus was all but ignored. While Malthus spent his life in academic research, he was interested in 'real world' facts. Ricardo, who made his millions in the real world, was worried about economic theories. They constantly argued with each other (often publicly criticizing each other's work), yet remained close friends.
In the late 1700s, the England's population was a highly debated subject. Some people claimed it was declining, others thought it was slowly increasing. However, most shared Adam Smith's belief that a larger population was better. In 1793, William Godwin published a book that promised a new utopia for mankind. Malthus heartily disagreed with Godwin. Instead of seeing a progression towards Utopia, Malthus saw man steadily bringing about its own destruction. He noted that the earth had only limited resources, and that the increasing population would eventually "outstrip its means of subsistence." His simple observation destroyed the Utopian theories, and brought a new dreariness to economics.
Ricardo also found flaws in the optimism of Adam Smith's economic theories. Instead of seeing a system that led slowly to the betterment of everyone, he saw a push and shove society. The world was not one unified "great family", but instead a "divided camp" of many competing individuals. As one climbed his way to the top of the ladder, another fell down. Furthermore, those who reached the top, made it there through the efforts of workers who slowly fell lower and lower.
The 'tribal warfare' going on in England strengthened Ricardo's objections to Smith's theories. The increasing population had caused demand for wheat to outstrip supply, thus raising the prices. This allowed the landlords to take in extraordinary rents. Enterprising industrialists objected to the high prices and began importing lower-priced grain. Unfortunately, the landowners had control of parliament, and legislated sliding tariffs on the imported grain, thus keeping the prices high. This further angered the industrialists, who realized that high grain prices would necessitate an increase in wages to enable their workers to put bread on the table. Higher food prices almost always resulted in lower 'corporate' profits.
Based on his observations, Ricardo developed an abstract economic model. The working class would automatically increase their population if wages rose. Capitalists existed solely to accumulate and reinvest profits, thus hiring more workers. These two classes greatly benefited society. The third class, however, was society's scourge: the landowners. They gained their income at the others expense. Their rents were not set by efficiency or absolute production, but by the difference in production costs. As the population increased, more lower-quality land would be cultivated, thus increasing the price of production. This would require the capitalist to increase the wages he pays, thus decreasing his profits. He would also have to spend more on the rents to the landlord, further cutting into his profit margin. Thus, the workers stayed at the same level and the capitalists watched their profits slowly decrease; but the landowners made huge profits.
Ricardo's theory suffered from a lack of foresight. The population was under control, and the low-quality farmland wasn't overly cultivated. Thus, the difference between the best and worst land was not significant. Malthus, however, attacked Malthus on a different point - his attack on the landowners. He saw the rents as being rewards for "present valor and wisdom" and "past strength and cunning". He further added that Ricardo himself was a landlord, and an example of what he meant. Unfortunately, Malthus's arguments were week and his arguments were not oft repeated.
His theories gained Ricardo widespread respect. Malthus, on the other hand, was not so respected. He had difficulty presenting his theories "in a clear-cut logical fashion", and his ideas were easily disproved by his contemporaries (including Ricardo). However, they did agree on Malthus theory on population.
In his theory on population, Malthus noted that man could easily double its population in twenty-five years, thus producing an exponential growth pattern. Land, however, could only be added linearly. Furthermore, the added land would always be inferior to the already cultivated land. (Why would anyone farm on sub-par land when better land is available?) After years of growth, population would soon outstrip its land resources, and be unable to feed itself. Thus, the impoverished class would gradually become larger and larger, and societies would turn to barbarian behavior in order to ensure their own food. The only way to fend off society's destruction was an increase in birth control.
Malthus, however, suffered from the same lake of foresight as Adam Smith and Ricardo: he failed to perceive the forthcoming technological advances. New farming methods have enabled man to greatly increase his farming productivity. Furthermore, new resources and land use methods are constantly being discovered. Today's world, in fact, suffers from a glut of food, instead of a shortage. The only significant problem is that of ensuring that everyone obtains adequate food supplies. This, indeed, has become a major problem. For, why many people suffer from obesity, others (especially in the third world) are starving. Thus, in a small way, Malthus was right - the poor have been steadily increasing. But, the increase has not been due to lack of land. Instead, it is due to misallocation of resources, and the fact that the poor tend to reproduce at a much higher rate than the rich.
Malthus was also worried about 'general gluts', occasions in which the market would be flooded with commodities without buyers. Jean-Batiste Say, a young Frenchman, easily refuted the 'glut' theory. He felt 'desire' for products was unlimited; man could always use more clothes, luxuries, or furniture. And, since, all production costs are income for someone else, there would always be money to purchase the products, thus a general glut could never occur. Malthus, however, was unsatisfied by this argument. He pointed out that 'saving' would take the money out of the system, and thus allow for the possibility of a general glut of products. Ricardo, however, argued that "to save is to spend", thus a general glut could never occur. Malthus had expounded this same point before, but he applied it only to the capitalists.
RIcardo and Malthus continued disagreeing for the remainder of their lives. As it turns out, they were both arguing about different subjects. Malthus was worried about cycles of boom and depression. Ricardo, however, was talking about distribution. Together, they made great contributions to modern economic thought. Ricardo simplified the economy to it's bare structure, ignoring awkward facts. (This 'simplification' has been called the 'Ricardian vice'.) Malthus pointed out the problem of population. He was also one of the first people to observe the economic cycles and depressions. Together, they qualified Smith's Utopian economics with strains of pessimistic truths.