Health Crises, Factory Farming, and Corporate Welfare: Why Capitalism is not to Blame
Today I read a BBC article entitled “How Economics Killed the Antibiotic Dream” wherein the author characterizes the impending antibiotic crisis - fueled by factory farming practices - as an outcome of greed and free market capitalism.
This argument is subject to some of the same flaws as the one which advocates the introduction of taxes to curb the consumption of meat - and sugar for that matter - as a means to address a different health crisis: obesity.
The article points to increasing Western wealth as the source of the problem, arguing that as average household incomes increase, demand for meat increases, incentivizing farmers to increase their supply. Brutal factory farming techniques are the logical outcome of such demand as farmers rush to cash in on the potential profit and supply this demand. According to this narrative, this directly leads to the use of low dose antibiotics to curb the spread of disease among the animals, who are kept in extraordinarily unsanitary conditions, which in turn leads to the flourishing of bacteria resistant to antibiotics, which is predicted to lead to a major health crisis for humans.
I would contend however, that the source of the problem is not wealth, greed or capitalism, but regulation in the form of taxpayer subsidies to the meat industry. This is a little spoken of though key factor which drives down the price of meat and increases demand. Without subsidies factory farming would be unsustainable, and as such it is subsidies that is driving the over-use of antibiotics. It is worth noting that insofar as subsidies drive over-consumption it also directly contributes to obesity.
Government subsidies is an important factor in the value chain that we need to start discussing, because the solutions that tend to be advocated identify free market capitalism as the problem, and by this logic, call for more government intervention. Jamie Oliver is one such vocal advocate for such intervention in the form of taxes on offending food products. Information regarding more advocacy of taxes to incentivise better consumer choices can be found here, and here.
Ultimately, this leaves the taxpayer paying for meat at multiple times: through subsidy to increase output, paying for the product as a consumer, and then paying additional costs to “solve” the problem, such as through a consumer tax (not to mention the already existing GST), and then to regulate the administration of antibiotics.
While some economists do counter-balance this argument by questioning the cost-benefits of a meat tax, they fail to address the source of the problem.
It seems to me that the appropriate first step is to first attack the problem at the source, which is to eliminate subsidies to the agricultural sector, and then work out whether any further regulation is needed. We need to recognize that the impending health crises are the result of corporate welfare NOT free market capitalism.
For information about the scale of government subsidies to the agricultural sector, see these links: