• Utilitarianism: especially influential in shaping politics, economics, and public policy.• Roots of utilitarian thinking: Thomas Hobbes (1588-1679), David Hume (1711-1776) and Adam Smith ((1723-1790), but classic formulations are found in Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873)• Utilitarianism: we can determine the ethical significance of any action by looking the consequences of the act.• Utilitarianism: policy of maximizing the overall good or producing the greatest good for the greatest number.• Utilitarianism: strong support for democratic institutions and policies. (Government and social institutions exist for the well-being of all, not to further the interest of the monarch, the nobility, or some small minorities. The economy exists to provide the highest standard of living for the greatest number of people, not to create wealth for a privileged few.
• Utilitarianism: consequential ethics – Good and bad acts are determined by their consequences – Utilitarians tend to be pragmatic: no act is ever right or wrong in all cases in every situation, depend on the consequences. • Example: lying is neither right or wrong, depends on the situation in which lying will produce greater overall good than telling the truth ( in such situation lying is ethical) • Example Case Study: Should US government pass a law that limits the amount of money corporate CEO’s can be paid (that can credited as tax-deductible)? Utilitarian approach will consider both alternatives. Limiting the amount of executive salary that can be deducted from taxes should provide a disincentive to corporations to pay such large salaries. As a result this world increase the average pay for other workers. On the other hand, low salaries would make it difficult to attract highly qualifies executives to US firms and could result in less competitive US companies. (both decisions are a function of what happens after the fact)
• Utilitarian thinkers hold that we should maximize the overall good, but among utilitarians there are different interpretations of what this “good” involves.• Utilitarian position: happiness is the ultimate good – only thing that is and can be valued is happiness – Is the goal of ethics, both individually and as a matter of public policy, should be to maximize the overall happiness? – What is happiness?
• Jeremy Bentham: p.30 – only pleasure and the absence of pain is happiness – Unhappiness is pain or deprivation of pleasure – “ Nature has place mankind under the governance of two sovereign master, ……..in all we think.”• Maximizing pleasure (the utilitarian principle) is the fundamental, objective and indisputable ethical principle. – Maximizing pleasure is not egoistic according to the utilitarian principle. • Egoism focuses on the happiness of individual • Utilitarian acts are judged by the consequences for the general and overall good. The general good includes the well-being of each individual affected by the action.
• John Stuart Mill: – Humans are capable of enjoying a variety of experiences that produce happiness – Human happiness is not mere hedonism – Beside the pleasures of sensation that Bentham mentions, humans also experience social and intellectual pleasure that are different and superior to feelings. – Which pleasures and what type of happiness is better? Experienced and competent judges are the best test for determining the highest happiness. • “Of two pleasures, if there be one to which all or almost all who have experience of both give a decided preference, … that is the more desirable pleasure.” • “From the veredict of the only competent judeges, I apprehend there can be no appeal. The judgment of those who are qualified by t knowledge of both, of if they differ, that of the majority among them, must be admitted as final.”
• Mill’s Utilitarianism: – Does not support an uncritical majority rule in which every opinion what is good is treated as equally valid. – People need to be educated and experienced in a variety of pleasure before they age competent to judge. Once they are experienced, then majority-rule democracy is the best way to made decisions. – Ethical principle arranging society in such a way that we maximize the happiness for the greatest number of people. • This is attained through an educated citizenry making decisions through a majority rule democracy. • Educated citizenry is attained by allowing individuals the freedom of choice to pursue their own ends. Even when those choices are unwise, individuals are gaining the experience needed to distinguish between good and band, higher and lower, pleasures.
• Utilitarianism greatest contribution to social and political thought : its influence in economics• The ethics of 20th century neoclassical economics-essentially what we think of as free market capitalism- is utilitarianism.• Under free market economies: economic activities aims to satisfy consumer demand – The law of supply and demand: healthy economies produce (supply) goods and services that consumers want (demand) – Goal of free markets: allowing individual to decide for themselves what they want most and then bargain for these goods in a free and competitive marketplace. This process over time and under the right conditions guarantee the optimal satisfaction of wants.
• Free market economics fit utilitarian framework – End goal of economic activity (utility or welfare): maximum satisfaction of consumer demand – We do the most good for the greatest number when we get as many as possible as much of what they want as possible. – The good is defined in satisfying one’s wants. – The most efficient mean to attain this goal: structure economy according to the principles of free market capitalism. • Allow individuals the freedom to bargain for themselves in an open, free, and competitive marketplace. • Self-interested will always be seeking ways to improve their own position. • Agreements (contracts) will occur only in those situations where both parties believe that a transaction will improve their own position. • Competition among rational and self-interested individuals will continuously work to promote the greatest overall good. • Whenever this occurs in which one or more individuals can attain an improvement in their own happiness without a net loss in others’ happiness, market forces will guarantee that his occurs. • the market: most efficient means to the utilitarian end of maximizing happiness.