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In classical economics, supply of labour was the vehicle of adjustment between the variables. In neo-classical economics, marginal adjustments were supposed to be done through wage rate. It is not possible for wage rate, however, to accommodate large adjustments. Large un-employment could not be wiped out through wage adjustment. Such unemployment was explained as index of over population, an aggregative disproportionality.
Wicksell and Cannan revised the ideas of Genoveso and Beceario to propound once more the theory of optimum population. Optimality with its corollary of over and under population explained short-term disproportionalities with roots of non-economic forces. The point was why biological and socio-cultural factors fail to bring about long-term adjustment of population to economic environment generally. Economics could not leave long-term unemployment unexplained. Wicksell as well as Marshall (1842-1924)²¹ looked back to Malthus to explain long-term maladjustments of population. This came to be known as new Malthusian theory of population.

Keynes (1883-1946) said that growth of population stimulates economy²². Robinson (1903 - )²³ carried forward the Keynesian approach. Growth of population increases demand for consumption goods, exerts pressure on housing facilities and public utilities, raises marginal efficiency of capital and expands investment. Declining population has the opposite effect. Kalecki stressed the effect of change in population on the purchasing, power of the community. "An increase in the number of paupers." he said, "does not broaden the market²⁴." In a poor undeveloped country growth of population may fall to stimulate economic activities. In that case increased population would be a burden on the economy. Both in advance and underdeveloped countries, growth of population is a mere condition for economic growth.

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21 Principles of economics pp. 375-376.
22 Keynes : "Some Economic consequences of a Declining population in Engenics Review, XXIX No. 1, April 1937.
23 "Economic consequences of a Decline in the population of great Britain" in collected economic papers, pp. 115-32.
24 Kalecki : Theory of Economic Dynamics p. 161.

* Contributed by: -
Dr. R. P. Verma,
Ex. H.O.D. & Dean, Commerce and Business Management Dept.,
Arabinda Bhandari,
Strategic Management Researcher,
Ranchi University, Ranchi.