More than two centuries ago Thomas Malthus issued his dire prediction that mankind was doomed to survival at subsistence level, but the concept of population expanding to absorb the available food supply has been contradicted by history, thanks partly to declining birth rates. However, the underlying idea of natural resource scarcity impinging on the prospects for progress remains a cornerstone of modern economics. Price is the paramount indicator of scarcity, and the price of food relative to that of other goods has fallen dramatically over the long run. For example, in 2008 the real price of wheat was only 4 per cent of its 1650 level, while the corresponding ratio for sugar was less than 0.05 per cent. What explains the failure of the Malthusian prediction? We follow Schumpeter’s suggestion that the answer lies in understanding the process of economic development. We argue that all inputs to production are subject to augmentation in their productivity—natural resources no less than capital or labour. Declining relative prices of food products can then be taken as evidence that technological change has augmented the productivity of land in food production to a greater extent than the average augmentation of all inputs utilised in the production of finished goods generally.