One of the best theodicies made on the topic of the Problem of Evil is the soul-building theodicy. It states that the evil of this world exists to test and teach beings the consequences of using free will wrongly. Now, can this apply to animals? Yes.
Firstly, animals can have an Afterlife. In Islam, there exists a state of consciousness for all souls. It's called Barzakh. This state is where the soul has an experience of either heaven or hell. For animals, there is nothing in the Quran or Sunnah that denies them this state.
Because Animals have souls by virtue of countless Quranic verses and Sahih hadiths, it's not illogical to argue that animals could have a state in this place (Barzakh) that compensates and outweighs all the suffering they faced in this world.
Also, there's a hadith that states animals will take back their rights from each other. This hadith is Authentic (sunnah.com). However, there is an addition to the hadith that was mistakenly thought to be authentic, where it says animals will turn to dust after that.
In this video, Sheikh Mustafa Al-Adawi confirms that this addition is unauthentically attributed to the prophet. This video is in Arabic only and doesn't have English subtitles, unfortunately.
youtu.be
youtu.be
But even if we consider that this hadith is authentic, having the animals turn to dust doesn't mean they are annihilated. Turning to dust is a phrase that means bodily death in Islam, not necessarily spiritual death. The evidence for this is Quran 20:55.
If Humans can turn to dust and get resurrection, why can't animals have a second resurrection after their second death? It could be that after this second resurrection, there is a separate heaven-like place exclusive to animals.
Another possibility is that after this second death, the animals will return to this blissful and peaceful Barzakh state they were previously in. The only difference is that this one would be eternal. Truly, no one knows, since the Quran and Authentic Sunnah don't speak about it.
So, we know now that, Islamically, there is nothing invalid about saying that God will give recompensation to the animals' sufferings that could outdo them by massive magnitudes since the Barzakh can last from thousands to billions of years. But, why even create this suffering?
One can only hypothesize about God's reason to permit this. No one truly knows, so the proponent of the argument's left with an impossible burden of proof to show that God either has no reason or that his reasons are illogical. With that being said, I postulate a possible reason.
This possible reason is animal soul-building and free will. One can argue that after the animal's first or second death and resurrection, or during the Barzakh, God enhances the animal's rational faculties and this provides the animal with free will.
This, the suffering of this world would be considered, like for Humans, a test that teaches these now rational souls and beings the consequences of evil and using free will wrongly. We don't know the details of how this could happen, if at all, and what their choices would be.
In the end, this is all speculative. The proponent of the Animal Suffering argument, when faced with the wide range of possibilities, can't logically make this argument against God.
Jazakumallahkheir
Jazakumallahkheir
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