View Single Post
  #1 (permalink)   Report Post  
Jonathan Ball
 
Posts: n/a
Default Further reflections on the bogus "efficiency" critique of feedinggrain to livestock

My earlier point, that the goods whose efficiency of
production is being examined must be as narrowly
defined as possible, can use some further elaboration.
The notion that the more resource-efficient good
should be produced to the exclusion of the less
efficient one is only valid if the goods are perfect,
or very close, substitutes for one another in the
evaluation of consumers.

In the late 1950s and early 1960s in Los Angeles, and
possibly elsewhere, house builders were building "Gold
Medallion All-Electric" houses. No natural gas was
supplied to these houses at all; the water heater,
house heating, clothes dryer, stove and oven all were
electric. It was considered very Jetsons, the wave of
the future; natural gas was viewed as SO Victorian.

Of course, the price of electricity climbed
dramatically, even long before the electricity "crisis"
of 2000-2001, and those houses came to be seen as white
elephants. The production of electricity clearly was
relatively inefficient compared to the production of
natural gas, as reflected in the prices of the two
utilities.

Does this mean that electricity production should have
been stopped, and natural gas production promoted?
Clearly not. While electricity and gas are fairly
close substitutes for some energy uses, they obviously
are not fully substitutable. No one has ever seen a
gas-powered television set or vacuum cleaner.

This is where people opposed to feeding grain to
livestock make a critical mistake. Consumers don't
merely buy generic "food", any component of which is a
perfect substitute for any other, but that is exactly
what the "inefficiency" argument against feeding grain
to livestock is suggesting. Instead, consumers
evaluate food items according to what nutritional and
taste requirements they meet.

Efficiency of production only realistically pertains to
goods that are, in the eyes of consumers, close
substitutes for one another. At the extreme of
substitutability, one may consider the exact *same*
good produced according to two different methods.
Thus, the consumer is completely indifferent, in terms
of his ability to use the commodity, among electricity
generated by coal-fired, gas-fired or nuclear
generating plants; electricity is electricity. In this
case, the efficiency of the means of production IS
relevant, and only the most efficient - lowest cost -
form of electricity generation should be used, where
"cost" takes into account all the private and social
costs. Broccoli, however, is a terrible substitute for
sirloin steak, as are raspberries, tomatoes, potatoes
and eggplant. The consumer RIGHTLY ignores efficiency
differences in the production of these items, and
considers each item separately, according to how much
he likes them and his willingness to pay for them.

The "inefficiency" argument against feeding grain to
livestock simply doesn't work.