Utilitarianism: Weighing Social Costs and Benefits

Utilitarianism (or consequentialism) features the moral approach taken by Caltex's management. Another illustration, Ford and its infamous Pinto, demonstrates just how closely the weighing of costs and benefits can be done.

Ford knew that the Pinto would blast when rear-ended at only 20 mph, but they also knew that it would cost $137 million to solve the query. As they would only have to pay $49 million in compensation to injured victims and the families of those who died, they calculated that it was not right to use the money to fix the cars when society put such a low price on the lives and health of the victims. The sort of analysis that Ford managers used in their cost-benefit study is a version of what has been customarily called utilitarianism. Utilitarianism is a general word for any opinion that holds that actions and policies should be evaluated on the basis of the profits and costs they will impose on society. In any situation, the "right" action or policy is the one that will generate the greatest net benefits or the lowest net costs (when all alternatives have only net costs).

Many businesses depend on such utilitarian cost-benefit analyses and maintain that the socially responsible course to take is the utilitarian one with the lowest net costs.

Jeremy Bentham discovered traditional utilitarianism. His version of the theory assumes that we can compute and add the quantities of benefits produced by an action and subtract the measured quantities of damage it will cause, allowing us to determine which action has the maximum benefits or lowest total costs and is therefore moral. The utility Bentham had in mind was not the greatest profit for the person taking the action, but rather the greatest benefit for all involved. For Bentham:

"An action is right from an ethical point of view if and only if the sum total of utilities produced by that act is greater than the sum total of utilities produced by any other act the agent could have performed in its place."

Also, it is essential to note that only one action can have the lowest net costs and highest net advantages.

To conclude what the moral thing to do on any particular occasion might be, there are three considerations to follow:

1.   You must choose the alternative that produces the greatest sum total of utility.

2.   You must estimate the direct and indirect costs and benefits the action would produce for all involved in the foreseeable future.

3.   You must determine what alternative actions are available.

Utilitarianism is attractive to many as it matches the views we tend to hold when discussing public goods and governmental policies. Most people agree, take a case that when the government is trying to find out on which public projects it should spend tax monies, the proper course of action would be for it to take on those projects that objective studies show will provide the maximum benefits for the members of society at the least cost. It also fits in with the sensitive criteria that many employ while discussing moral conduct. Utilitarianism can elucidate why we hold certain kind of activities such as lying or to be immoral and it is so because of the expensive effects it has in the long run. However, traditional utilitarian's would deny that an action of a certain type is either right or wrong. Instead, each action would have to be measured given its particular state of affairs. Utilitarian views have also been highly influential in economics. A long line of economists in the 19th century argued that economic behavior could be explained by assuming that human beings always try to maximize their utility and that the utilities of commodities can be calculated by the prices people are willing to pay for them.

Utilitarianism is also the origin of the techniques of economic cost-benefit analysis. This kind of analysis is used to find out the desirability of investing in a project (such as a factory, dam or public park) by figuring whether its present and future economic profit outweigh its present and future economic costs. To compute these costs and benefits, discounted monetary prices are anticipated for all the effects the project will have on the present and future environment and on present and future populations. Finally, we can conclude that utilitarianism fits adequately with a value that many people prize: efficiency. Efficiency can mean different things to different people, but for many it means working in such a way that one produces the maximum with the minimum resources at hand.

Though utilitarianism offers outwardly clear-cut method of calculating the morality of actions, it depends upon accurate measurement and this can be problematic. There are five major problems with the utilitarian reliance on measurement:

1.   It is unclear exactly what counts as a benefit or a cost. People see these things in different ways.

2.   Some benefits and costs are impossible to measure. How much is a human life worth, for example?

3.   Utilitarian measurement implies that all goods can be traded for equivalents of each other. However, not everything has a monetary equivalent.

4.   Comparative measures of the values things have for different people cannot be made-we cannot get into each others' skins to measure the pleasure or pain caused.

5.   The potential benefits and costs of an action cannot always be reliably predicted, so they are also not adequately measurable.

The opponents of utilitarianism contend that these measurement problems undercut whatever issues utilitarian theory puts towards providing an objective, source for determining normative issues. These problems have become especially obvious in debates over the viability of corporate social audits.

Utilitarians guard their approach against the objections raised by these problems by saying that though preferably they would like accurate measurements of everything; they know that this is largely impossible. Therefore, when measurements are hard or impossible to obtain, common-sense or shared judgments of comparative value are sufficient.

There are two broadly used common-sense criteria. One depends on the distinction between intrinsic goods and instrumental goods. Intrinsic goods are things desired for their own sake, such as health and life. These goods always take superiority over instrumental goods, as these things are good because they help to bring about an intrinsic good. The other common-sense criterion relies on the distinction between needs and wants. Goods which bring about needs are more essential than those that bring about wants. However, these methods are proposed to be used only when quantitative methods fail.

The supplest method is to measure actions and goods in terms of their monetary equivalents. If someone is ready to pay twice as much for one good than for another, we can assume that the former is twice as valuable for that person. Many people are made uncomfortable by the notion that health and life must be assigned a monetary value. Utilitarians spot out that we do so every day, by paying for some safety measures but not for those actions that are considered more expensive.

The main difficulty with utilitarianism, according to some critics, is that it is unable to deal with two types of moral issues: those relating to rights and those relating to justice. If people have rights to health, life and other basic needs, and if there is such a thing as justice that does not depend on simple utility, then utilitarianism does not supply a complete picture of morality. Utilitarianism can also go wrong, as per the critics, when it is applied to situations that involve social justice.  Utilitarianism  looks  only  at  how  much  utility  is  created  in  a society and fails to take into consideration how that utility is distributed among the members of society.

Largely in answer to these concerns, utilitarians have devised an alternative version, called rule utilitarianism. In this version, in its place of looking at individual acts to see whether they create more pleasure than the alternatives, one looks only at moral rules at actions of a particular type. If actions of a class tend to produce more pleasure or have lower costs, then they are the moral sorts of actions. Just because an action produces more utility on one occasion does not prove it is right ethically.

Rule utilitarianism may not absolutely answer all of the objections raised by critics of utilitarianism. A rule may normally produce more utility and still be unjust: consider rules that would allow a large majority to take unfair benefit of a smaller minority.

The theory of the rule utilitarian has two parts, which can be summarized in the following two principles:

1.   A moral rule is correct if and only if the sum total of utilities produced if everyone were to follow that rule is greater than the sum total utilities produced if everyone were to follow some alternative rule.

2.   An action is right from an ethical point of view if and only if the action would be required by those moral rules that are correct.

Hence, according to the rule-utilitarian, the fact that a certain action would make the most of utility on one particular occasion does not confirm that it is right from an ethical point of view.

Therefore, the two major limits to utilitarianism difficulties of measurement and the inability to deal with rights and justice remain, while the extent to which they limit utilitarian morality is not clear.