Partial and General food equilibria

I'm omnivorous, mostly because I enjoy the taste of meat. I can rationalize it ethically by looking at Cowen's argument that it's ok, so long as the eaten animal had enjoyed positive lifetime utility and wouldn't have existed but for my willingness to subsidise its existence in exchange for later being able to eat it. But I know that that argument also rationalizes baby farming to produce slaves for me*. And there are other problems in bringing animals under a utilitarian framework. And so I try not to think about it too much. Because animals are tasty. And a vegetarian diet would be a big hassle. And I am indeed made happier by thinking about lambs playing in paddocks who wouldn't get to exist but for my eating them. So I follow Cowen's rule and aim for animals I can imagine enjoyed positive lifetime utility.

Vegetarians sometimes argue** that we have to abandon meat-eating because meat is an inefficient way of generating calories: if we all scaled up to Western diets, there wouldn't be enough land to grow food for everybody unless we switched over to vegetarian diets.

That argument is wrong on two fronts.

First, some land does most efficiently generate calories by producing grass to be eaten by animals. Like New Zealand high country sheep farming. There's not enough water in the country to irrigate that land to make it suitable for cropping. But it'll support low-density pastoral agriculture. Further, some grain crops wind up being of low value for human consumption but still suitable as supplement for animals. So the optimum is unlikely to involve everyone switching to vegetarianism if the objective is maximizing total available calories for human consumption (though if the developed world's bigger problem is obesity, I'm not entirely sure why we ought to take this as maximand anyway).

Second, it's entirely a partial equilibrium story. What happens as folks in the third world get richer and start moving from inferior goods like lentils and rice to superior goods like beef and lamb? The price of the latter get bid up. And what happens when relative prices change? People change their consumption bundles. And so I find the Washington Post reporting that Americans are eating less meat as meat prices increase.

Why is this happening? The Daily Livestock Report blames rising meat prices in the United States. As countries like China and India get richer, they’re eating more meat, which is helping to drive up U.S. exports and making beef, pork, and chicken more expensive here at home. Ethanol also plays a role: Nowadays, American farmers divert bushels and bushels of corn to make fuel, which drives up feed prices and, again, makes meat pricier.

There's no need for a moral imperative to reduce meat-eating. Get rid of subsidies in the agricultural sector, make sure effluent externalities are properly priced or regulated, then let relative price adjustments take care of the rest. The optimal amount of meat will be eaten, so long as we keep waving our hands about the moral questions.

* You can maybe square this by saying people get massive disutility from being slaves while animals don't know that they're slaves. But humanity has a long history of slavery, and most slaves, as best I'm aware, didn't commit suicide. So by revealed preference, lifetime utility was likely still positive. And then we're stuck again.

**This was somewhat sparked by an argument on Google Plus linked here (thanks Ryan!) which I cannot figure out how to link.

Welfare and animal welfare: NZ pork edition

The Kiwi econ blogosphere, namely Paul, Matt and Brad, has been abuzz with discussion of pigs. As background, some animal rights activists broke into a pig barn in the middle of the night, frightened the animals, took a video of the frightened animals, and aired it on the news. The video ignited discussion of the desirability of farrowing crates as compared to free-range options among those who've never been in a pig barn. [Update: Of course, I'm here referring to the popular outrage expressed in the press; the econ discussion subsequent to the popular outrage has been rather good, as noted below.]

Brad Taylor points out that domestic pig farmers are making the best of some bad press by using the video in a bootleggers-and-baptists move: they argue that they're forced to use crates despite their better wishes because of the existence of foreign competition; if only tariffs protected them, they could change their methods. Paul Walker argues that the foreign competition angle is a red herring so long as barn raised pork is the cheaper production method; even with an import ban, producers would have a strong incentive to choose the cheaper option. Matt Nolan suggests that separate markets in free-range and barn raised pork solves most issues insofar as we only count animals' utility as it enters into human utility functions; if animals have intrinsic rights then a Pigovean tax (he calls it an externality tax, but Pigovean seems uniquely appropriate) on animal suffering solves things in the absence of Coasean bargaining.

A few years back, Tyler Cowen wrote an interesting piece on animal welfare. Relevant points:

• If animals can be shifted among sectors of varying welfare, then a tax on meat-eating is of ambiguous consequence: there's no apriori reason to expect more to shift to the higher welfare sector than to the lower.
• If regulation specifies a minimum standard of animal welfare such that we'd all view those animals as being happier having lived and been eaten than never having lived at all, vegetarianism is strictly harmful: fewer animals get to be born (and later eaten) when the demand curve is closer to the origin than it could be if vegetarians did their part in helping to defray these animals' costs of existence.

  "Some animal advocates argue for both mandatory care standards and for taxes or restrictions on meat consumption. But in fact, if we are at a care standard where animal lives are worth living, mandatory care standards should be combined with subsidies to animal breeding, not taxes on animal breeding."

• If regulation specifies a minimum standard of animal welfare much higher than the animal enjoying epsilon utility, there's a tradeoff between number of animals and happiness of animals (imagine Parfit's repugnant conclusion, but with the conclusion as starting point and working backwards).

I'd follow up on Matt's argument by suggesting that the two-sector model (people who care about animal welfare buy free-range; others buy barn-raised) isn't sufficient to induce efficiency where folks who care about animal welfare care not only about the animals they themselves eat (or abstain from eating if vegetarian) but also have Pareto-relevant preferences concerning the animals eaten by others. In that case, they'd be willing to pay some money to subsidize barn-pork consumers to switch to free-range. Presumably a charitable organization could achieve that end. However, if there are some people who now don't eat meat because they can't afford the free-range variety and are unwilling to eat barn-raised for ethical reasons, and if vegetarians with Pareto-relevant preferences concerning animal welfare would prefer that nobody eat meat but that any meat eaten be free-range, then the charity doesn't unambiguously solve the problem for them: the negative effects on the extensive margin, as they see it, may outweigh the positive effects on the intensive margin. Unclear that there are enough vegetarians with Pareto-relevant preferences (ie willing to put their money where there mouths aren't) for the latter bit to be a major issue, in which case the charitable organization would be sufficient, but fun to ponder.