Abstract
According to Knut Wicksell, the cause of poverty was found in the growth of the population—a fact that Wicksell stressed all his professional life. Too many children made for poor families. Diminishing returns everywhere characterized the economy, which in the end would be conducive to a Malthusian situation unless the surplus population emigrated. The optimum population was the one maximizing the per capita income. As Wicksell saw it, the remedy, in turn, was early marriages combined with the use of contraceptive methods within the family. For a long time, the conventional wisdom was that Wicksell’s analysis of poverty was the one area where he was not original; he was simply considered a follower of Malthus. Our analysis, however, shows that Knut Wicksell’s views on population growth, diminishing returns and poverty constitute a full-fledged general equilibrium system of population growth, production, consumption, international trade and migration in a framework that was later recognized as the specific factors model of international trade.