Malthus on food speculation

The man who refuses to send his corn to market when it is at twenty pounds a load, because he thinks that in two months time it will be at thirty, if he be right in his judgment, and succeed in his speculation, is a positive and decided benefactor to the state; because he keeps his supply in that period when the state is much more in want of it; and if he and some others did not keep it back in that manner, instead of its being thirty in two months, it would be forty or fifty.

If he be wrong in his speculation, he loses perhaps very considerably himself, and the state suffers little; because, had he brought his corn to market at twenty pounds, the price would have fallen sooner, and the event showed that there was corn enough in the country to allow of it: but the slight evil the state suffers in this case it almost wholly compensated by the glut in the market, when the corn is brought out, which makes the price fall below what it would have been otherwise.

I think Malthus is wrong that any price volatility caused by speculation is benign, but otherwise this is an admirable defense of the beneficial role that much-maligned (today and throughout history) speculation can play in food markets.

The quote comes from Cormac Ó Gráda's excellent book Famine, which I am reading and enjoying, and specifically from his outstanding chapter on the famous Bengal famine of 1943-44.

Eventual Nobel Prize winner in economics Amartya Sen made his name with his 1981 work which made the case that the famine was caused primarily by lacking "entitlements" (e.g., many were too poor to purchase food at escalated prices), rather than by what Ó Gráda terms a "Food Availability Deficit" (FAD). In other words, the famine was an issue entirely of distribution, rather than sufficiency. And moreover, Sen blames the entitlement issues (i.e. high food prices) primarily on speculation, which I hadn't previously realized.

Ó Gráda marshals quantitative and qualitative arguments to make the case that there was in fact a significant Food Availability Deficit in Bengal, despite the strenuous efforts of the governing British to mask this. Such deficits themselves cause price rises, which lead to entitlement issues, but after reading Ó Gráda I'm convinced that, as he says, "the heavy focus of the literature on hoarding is misplaced."