Abstract

Many Europeans are concerned about the living conditions of farm animals because they view animals as beings that possess interests of their own. Against this background the introduction of an animal welfare label is being intensively discussed in Europe. In choosing a market-based instrument to take these concerns into account, normative judgments are made about the formation of preferences, the value system that is implicitly assumed, and the distribution of property rights. From the perspective of classical institutional economics it can be shown that the introduction of a label as an institutional change does not redefine institutions in a way that allows them to consider the interests of animals for their own sake. Rather, the label only redefines the property rights that humans have over animals. The market segregation into privileged and normal animals conflicts with the idea of equality between sentient animals. Within the group of humans only the interests of those who act on markets count. The commodification of their moral concerns assumes that people always decide based on their own interests, which can be traded off. The lexicographical ordering of preferences, which occurs when humans view animals as entities with rights, is not compatible with the normative assumptions of markets. Furthermore, interpreting animal suffering as market failure that can be corrected by labeling impedes a reasoned dialog within the society about the values and beliefs that serve as a basis for preference formation. Thus, an animal welfare label cannot replace a fundamental societal debate about legal standards on animal well-being