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The welfare of non-human animals: economics is working against our humanity

  • 8 September 2023
  • 6 min read

"If a teenage boy were to cut off the tails of animals and yank off their testicles, he might be arrested and castigated for his cruelty; if he grows up and becomes C.E.O. of a company that does this on a mass scale, he will get rich and be praised for his business acumen." - Nicholas Kristof, New York Times

There are a variety of really good reasons to be concerned about the humane treatment of non-human animals - starting with the maintenance of our humanity and morality.

Unfortunately, amongst those reasons “economic efficiency” has had a difficult time making its case: The ultimate delivered price and volume of animal-based products to consumers benefits hugely from factory farms. In fact, the supply system has been optimised to do precisely that - deliver large volumes of animal food products, continuously, at low prices. That apparent economic efficiency is possible partly because there is no consideration of, or costing for, the "externalities". Externalities is the phrase used in economics for the knock-on effects of activities: In the case of factory farming, the farmers don’t have to bear the costs for environmental degradation, methane emissions, diverted foodstuffs, and the sheer cruelty to our co-mammals. There is no value put on the damage done, and so food is cheap. Sustainable farming seeks to minimise these knock-on effects and, by its own nomenclature, is “sustainable” as it’s a circular ecosystem: But it is still a cottage industry, and doesn't work at scale, efficiency, price/volume, or with the (supply/timing) flexibility of factory farming.

The idea of "Pricing for Externalities" of production processes has only started to be discussed in past 25 years, and has only slowly started to be measured (or measurable), and then only in narrow circumstances: It remains a nascent area of economics. Indeed, it’s more likely that polluters will reduce pollution only because of regulation/legislation and penalties - not because they are willingly "paying" for destruction of the environment. The biggest, most obvious area of pricing-for-externalities is in carbon emissions, and even in that area the record is spotty, non-global, and not yet really effective. Most sadly, the "externality" of the animals' suffering is simply not measured and, in economic terms, may not be measurable at all. This also applies to human slavery - which ultimately became a moral issue to be stamped out (but still persists in pockets today).

Am I hopeful?

My observation is that the growing influence of Responsible/Sustainable/ESG investing (choose your own adjective) is affecting companies' cost-of-capital (i.e. the interest rates they pay). This impact on capital seems to be a stronger, more direct, force on behaviour than "pricing for externalities". This trend is happening now.

I've tended to believe that the movement to reduce meat consumption and adopt more sustainable practices would never be successful as long as meat consumption is a) intensively "normalised"; b) part of most people's shopping basket and daily diet; c) seen as a sign of affluence; d) promoted as the primary source of protein; and e) is inexpensive. For example, until plant-based substitutes reach scale, cost efficiency and price-advantage over meat, I don't believe they will be a driving force to change.

However, I've been pleased (and, honestly, surprised) by some other startling sea-changes in the past decade: The acceptance of gay marriage in the USA; the rollout of legalisation of marijuana; the sudden "tipping point" on carbon emissions and global warming (which, up to 2017-18 was still a debate!), and the main-streaming of sustainable investing. And all that in a highly politically fragmented environment. A hopeful proxy for the type of change we might hope to see in meat consumption is the total collapse of the fur trade - because, finally, it became a "non-status symbol" to wear furs. As we sit today, in the subtext of people's daily meat-eating behaviour, there is a growing recognition of a) better dietary practice; b) the environmental impact of farmed animals; and c) the suffering, inhumanity and immorality of factory farming animals. It is possible we could genuinely reach a political tipping point where regulations and legislation start "pricing" those factors (e.g. adding costs) or regulating the factory farming of animals. We can hope that humanity will prevail over inhumanity, but we can also continue to advocate for change.

(This article was first published in the September issue of Animal Voice South Africa.)

Tags: ESG

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