Abstract: This paper shows that the Malthusian mechanism alone cannot explain the
pre-industrial stagnation of living standards. Improvement in luxury technology, if faster
than improvement in subsistence technology, would have kept living standards growing. The
Malthusian trap is essentially a puzzle of balanced growth between the luxury sector and the
subsistence sector. The author argues that balanced growth is caused by group selection in
the form of biased migration. It is proven that a tiny bit of bias in migration can suppress
a strong growth tendency. The theory re-explains the Malthusian trap and the prosperity
of ancient market economies such as Rome and Sung. It also suggests a new set of factors
triggering modern economic growth.