Normative versus Positive Economics Of Meat

In my graduate economics training, instructors went to great lengths to try to drive in the difference between normative and positive economic statements.  Normative statements are non-falsifiable statements of what should be.  Positive statements are potentially falsifiable statements.  The ongoing thread on meat consumption reminded me of my struggles understanding the difference. 

Before I continue, I have to come clean:  I'm an unapologetic meat eater.  It has nothing to do with machismo or an American attitude---I just like it.  My 4-year old told his teacher, when asked his father's favorite food:  Hamburgers.   Why do I bring this up?  Because my meat eating is probably just as likely to creep into my economic analysis of meat consumption as vegetarians' views are likely to creep into theirs.  This is the normative side of economics.  So let me try to describe a positive economic analysis of the meat eating issue and then talk a little about how the normative stuff comes in.

To simplify the story, let's take for fact that livestock production in the U.S. accounts for 20% of greenhouse gas emissions (I have no idea if that number is accurate but my meat-eating side hopes not).  Again for simplicity I'm going to assume away any other possible side effects of meat production or consumption--like clogged arteries.  So the relevant economic question is:  Does the fact that 20% of greenhouse gases come from meat production--a positive statement--mean that all meat consumption should stop--a normative statement?  The answer is no, no more than the fact that cars produce greenhouse gases means we should stop driving. 

From an economic perspective, there are multiple sources of greenhouse gas emissions.  Assuming the goal is to reduce greenhouse gas emissions by 20%, what is the economically efficient way to do that.  One possible way is to reduce meat production by 100%.  Just as eliminating industrial pollution would be expensive and infeasible--zero pollution is not an economically justifiable position--so would eliminating meat production--zero meat consumption is not an economically justifiable position.  The utility loss to meat eaters would most assuredly outweigh the benefits of reduced greenhouse gases.  So what is the economic solution?  Reduce emissions from each source until the marginal benefit of emitting the next unit of greenhouse gases is the same across all sources.  How can we do that?  The dreaded t-word.  Tax greenhouse gas emissions. 

Again for simplicity, let's suppose we're only talking about carbon emissions.  A carbon tax per unit of carbon emissions will efficiently price carbon and reduce carbon emissions at least cost.  Those that benefit most from carbon emissions are willing to pay the most to keep emitting carbon, and those that benefit the least will reduce the most.  A price is judgement free--man, I know that's going to cause problems. 

So whether your normative view is:  we shouldn't eat meat, or we should eat meat, the economic solution is price meat so we are free to choose the amount that produces the largest net benefit...that may be zero, but maybe not. 

Comments

[joseph]

That may be the 'efficient' approach. But in my view, the decision should not be judgement free. Supposing the choice for cutting down CO2 emissions was between eliminating meat production for the upper income section of the population (the rest of the population can't afford to eat meat) and eliminating rice production, the only staple food that the poor can just manage to afford. Surely, you will not suggest that because the rich are willing to pay more for meat production than the poor are 'willing' to pay for rice production, meat production should continue and rice production should cease. Value judgement will tell you that it's inequitable to let the rich have their meat at the expense of food for the poor.

[odograph]

I think we are fortunate that the most ridiculous energy-intense products are luxuries. A bag of potato chips will climb before a sack of potatoes.

And I think these products are consumed, by the millions of tons, by the middle classes.

I really don't see the "rich" meat eaters starving out the "poor" grain eaters ... just because that's such a reduced and simplified view of our current food product constellation.

[joseph]

This is just my way of saying that when a resource is finite, priority should not necessarily be decided by consumer preference as measured by willingness to pay. Also, willingness to pay is often constrained by ability to pay. A deliberated ethical value judgement may sometimes be a better approach to deciding which is a more urgent need to satisfy in the circumstances.

[J.S.]

Tim- a few comments:

1. I agree with your analysis generally but there are a few facts that muddle it- the price of industrial meat production is unlikely to anytime soon come close to the true price- there are so many both active and passive subsidies that involved and no politician I know of has suggested correcting them. Getting the prices is right is exactly what we should do IN THEORY, but will probably not happen so that means that meat eaters can choose to internalize the high societal costs of meat into their decision-making or not through personal changes in behavior. By the way, we can say the same things about lots of goods that are underpriced, but meat happens to be one of the prime examples since its environmental effects are so bad and large.

2. There is something, however, about your argument that I do think is incomplete- which is what I tried to raise in my piece on utilitarianism- from your perspective, it's all about getting the prices right and then let people buy the quantities they want and we all go home happily ever after. Except that this ignores the pain and suffering of animals as well as the horrendous conditions of workers in slaughterhouses. Just because people like the taste of lamb- an animal that is kept confined in a dark grate in which in can't move for almost all of its life- which is tantamount to torture- means that its pain and suffering is valued at zero in our anthropocentric world. Others like ducks that have tubes showed down their throats. You simply can't santize meat production and talk only about externalities when there is the torture of sentient beings involved- this might sound hippy-dippy coming from somone with a PhD in economics from UC-Berkeley but it's reality. I am an economist to the bone, but this is where "pure" economics loses me. Toruturing animals simply to suit the whims of our palates is wrong whatever the price according to my worldview- that's a normative claim for sure but one that can be backed up with a few very reasonable assumptions about the world. Even after we get the prices right there will always be a moral case to AT MINIMUM treat animals well if you want to eat them, which would nullify probably about 99% of the factory farms in the U.S. and around the world. For the avid meat eaters out there I think purchasing animals that have been treated well and not tortured is the minimum you can do to satisfy your wants- and it will cost more, but like we all know meat is vastly underpriced as it is.

J.S.

[ralph]

Right on, J.S., right on. IIRC, it was odo or joshua who said that so long as you keep it normative, he was fine with that. Persuade away! I'm in basic agreement with you about a lot of that.

But as for **policy**, well, Tim's closer to the mark. We need to focus on pricing for those folks who simply don't agree with you.

And Tim, I'll volunteer some carp about the price comment. ;-) In this case, I'd say that the price is only non-judgmental in the sense that it represents the aggregate consumer desire given the socio-politically structured "market" involving all kinds of externalities. That said, yeah, you're right. ;-)

[joshua corning]

it was odo or joshua who said that so long as you keep it normative, he was fine with that. Persuade away! I'm in basic agreement with you about a lot of that.

It sounds both smart and incoherant so i bet it was odo...my stuff is incoherant and dumb. :)

[t.s.]

Most Americans who eat meat consume a lot more meat than they need to, so increasing the price of meat would not necessarily be a bad thing. As for taxing meat, I would suggest only taxing the meat which is produced at the greatest cost to the environment, ie. factory farmed meat. The better solution, though, would be to just outright ban factory farming. Unfortunately, that seems pretty unlikely given our current government and campaign finance scheme.
As for treating animals well, farms which employ sustainable practices often also treat their animals with respect. At least, that's been my experience here in Montana.

~my 2 cents

This is my first 'blog' so it may be longer than usual, but there are not always easy short answers, so here goes:
I am an economist, CPA, and for the last 6 years an Organic, sustainable, grass-fed rancher near ‘Organic Valley’. I dropped out of the corporate rat-race to raise animals in harmony with nature, both environmentally and humanely. In the process I found out that returning the animals back to their natural diet of 100% grass for ruminants and grass-based for others increases our health, (Omega-3s, CLA’s, Vitamins, beta-carotene, etc.), increases the animals health, increases bio-diversity by not allowing breeds of farm animals to go extinct, and helps heal the earth by ending the plowing, tilling, and run-off that is created by agriculture in the planting of the worlds biggest crops – grain- especially soy.

This useless debate that goes on to try to eliminate meat eating is actually hurting the environment. This is because eco-systems need animals to be an eco-system. Eating grains to replace proteins at a much higher proportion hugely contributes to the devastation of land, habitat, and waterways. Grains-yes even organic- are grown in huge monocrop fields which destroy all parts of the eco-system. Soy for example is the most heavily pesticide and herbicide laden crop, which is why it took so long to get marketable amounts of Organic soy into production. Suggesting that we stop eating meat to help the environment or the animals creates a larger environmental problem.

The real problem in our food supply is the whole paradigm that agriculture is the answer to obtaining our food. If we return to any eco-system we will encounter a wide variety of perennial plants and animals which subsist on them including animals which subsist on other animals in that eco-system. As much as some people want to ignore this, a food chain exists in nature which includes carnivores and omnivores, like us, along with the herbivores.

A farm or ranch, as a source of food, should mimic an eco-system consisting of perennial plants (known as permaculture in farming circles) which provide food for animals which then provide the fertilizer, or plant food, in their manure. This form of raising food provides great bounty of both plant and animal food for humans, increases bio-diversity, restores and improves the nutrient mass of the earth, does not contributes pollution to air or waterways and provides nutrient dense foods for all living things.

The factory-farms, animal and plant based, that I and so many others object to are a product of the need to amass wealth. This wealth is in the hands of the middle-man, the grain buyers and processors, and it is created by the ability to store, ship, process, and package grains which do not have the relatively short shelf life vegetation and animal products have. This allows the products to absorb over-production in an absurd economic game where the laws of supply and demand and of entry and exit of businesses based on the pricing models are twisted out of recognition by government subsidies, government loans, government foreign-aid, un-sustainable practices and environmental degradation that results in a lower-than-cost price for grains, a comparatively cheep but now nutritionally devoid food. This is then pumped into all animals including people, that were never designed to consume ground, roasted, and extruded grain products.

Targeting the real beneficiaries of this system, the grain industry, will go much farther in cleaning the environment and eliminating the large animal feedlots, inside or outside of buildings, then by stopping the consumption of all meat. If there is no below-cost cheep grain available there could be no factory farming. It is not the meat that is subsidized; it is what they are feeding them-the grain(that includes the grain for human products).

We are entrenched in this system and it will take a long time to get out of it, but those of us that care can be leading the change to eating sustainable foods and not encouraging the consumption of larger amounts of land destroying grains.

PS. Lamb is not kept in a cage, that is factory raised veal(young beef).