global ethics & business- a philosophical approach - chapter 2 - utilitarianism

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Global Ethics & Bussiness: A Philosophical Approach Dalulka Forest-Smith

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A chapter of the book Global Ethics and Business by Dalulka Forest-Smith

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  • Global Ethics & Bussiness: A Philosophical Approach

    Dalulka Forest-Smith

  • Chapter Two

    Utilitarianism

  • The Principle of Utility

    The Good: Happiness (as Pleasure and Self-Interest)

    The Basis of Moral Action: Pleasure and Self-Interest

    The Moral Subject: The Individual

    IN THIS CHAPTER ....

    1. The Principle of Utility

    2. Utilitarian Philosophers

    3. On the Principle of Pleasure

    4. On Collective Happiness

    5. The Rule of Self-Interest

    6. Summary & Questions

    7. Consider This!

    The Principle of Utility

    2

  • 3Jeremy Bentham on Pleasure and Pain Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as to determine what we shall do. On the one hand

    the standard of right and wrong, on the other the chain of causes and eects, are fastened to their throne. They govern us in all we do, in all we say, in all we think: every eort we can make to throw o our

    subjection

    John Stuart Mill on FreedomThe actions of individuals could not be predicted with scientific

    accuracy, were it only because we cannot foresee the whole of the circumstances in which those individuals will be placed.

    F A Hayek on Self-InterestA society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom.

    AT A GLANCE ...

  • Utilitarian Philosophers

    4

    Four Major Utilitarian Philosophers

    If you have checked online or at the library stalks, you have seen that there is a large number of Utilitarian Philosophers. In this chapter, we review the ideas of four of them.

    Jeremy Bentham(1748-1832)English philosopher, economist, and theoretical jurist, the earliest and chief expounder of utilitarianism.

    Major works: Fragment on Government (1776); Introduction to the Principles of Morals and Legislation (1780), Defence of Usury (1787), Panopticon (1787)

    John Stuart Mill(1806-1873)English philosopher, economist, and exponent of Utilitarianism. He was prominent as a publicist in the reforming age of the 19th century.

    Major Works: A System of Logic (1843), On Liberty (1859) Considerations of Representative Government (1861), Utilitarianism (1863)

    F.A. Hayek,AKA Friedrich A. Hayek (1899-1992)Austrian-born British economist noted for his defense of free market against government regulation. In 1974 he shared the Nobel Prize for

    Economics with the economist Gunnar Myrdal.Major Works: The Road to Serfdom (1944), Individualism and Economic Order (1948), The Constitution of Liberty (1960), The Fatal Conceit: The Errors of Socialism (1990)

  • What you will learn:

    The Principle of Utility

    The Reach of Self-Interest

    Summary & Questions

    Think about This

    On the Principle of Pleasure: Jeremy Bentham

    5

    What is utility? A property in any object, whereby it tends to produce benefit, advantage, pleasure, good, or

    happiness, (all this in the present case comes to the same thing) or (what comes again to the same thing) to prevent the happening of mischief, pain, evil, or unhappiness to the party whose interest is

    considered: if that party be the community in general, then the happiness of the community: if a particular individual, then the happiness of that individual

    On the Principle of Utility II. The principle of utility is the foundation of the present work: it will be proper therefore at the outset to give an explicit and determinate account of what is meant by it. By the principle of utility is meant

    that principle which approves or disapproves of every action whatsoever. According to the tendency it appears to have to augment or diminish the happiness of the party whose interest is in question: or, what is the same thing in other words to promote or to oppose that happiness. I say of every action

    whatsoever, and therefore not only of every action of a private individual, but of every measure of government. By utility is meant that property in any object, whereby it tends to produce benefit,

    advantage, pleasure, good, or happiness, (all this inthe present case comes to the same thing) or (what comes again to the same thing) to prevent the happening of mischief, pain, evil, or unhappi- ness to the party whose interest is considered: if that party be the com- munity in general, then the

    happiness of the community: if a particular individual, then the happiness of that individual.

  • 6The Principle of Utility, according to Bentham, stipulates that every action should be assessed according to whether and how it increases or diminishes happiness both in regard to individual and government action.

    His formulation of this principle is based on the view of human nature as rule by pain and pleasure. For Bentham, pain and pleasure determines everything we do, say, think, anything we do when acting out of our free will show that this is the case. It should then be the

    main criterion for evaluating human actions. When emphasizing individuals motives for action, Bentham has to deal with other contemporaneous moral perspectives, such as

    deontology, which assert that the collective, society or community, has a stake in morality. He insists that there is no such a thing as a community as a separate entity. Since it is nothing more than the aggregate of its members, the interest of the community can only be

    the sum of the interests of its members.Perhaps the most important aspect of Utilitarianism is its emphasis on the primacy of pleasure and pain as bases for moral action. For

    Bentham, this does not only mean immediate physical or psychological satisfaction (pleasure) and suering (pain). Pleasure and pain, in his formulations, are in fact, the result of sanctions; that is, they refer to reward (pleasure) or punishment (pain) for action, which can have

    a physical, political, or moral character. According to Bentham, the moral sense - or the proclivity to follow moral dictates - result from the fact that moral sanctions have the ability to force individuals to act in the prescribed direction and not to act in the proscribed ones.

    That is, it is not that we are born with a moral sensibility, which something modern philosophers had wondered for many centuries. Consistent with the empiricist traditions that would prevail in English philosophy from, at least, the seventeenth century, Bentham also

    views morality as something that is learned and developed with time, in response to the moral sanctions How does Jeremy Benthams postulates that the individual person is the primary and sole moral actor and his view that morality is not inborn, but absorbed through exposures of negative and positive moral stimuli compare to other Moral Frameworks reviewed in this

    book? The focus on the individual person, we will see in Chapter Three, is also characteristic of the Ethics of Virtue. The dierence is that contemporary versions of the Ethics of Virtue, as we will see, focus on individual action, by taking into account the social context. To be sure, this is true even for Aristotles earlier formulation of Virtue, as a moral principle, which also privileged the individual. As we saw, for Aristotle, a virtuous man is one whose actions reflect values - temperance, courage, etc - that are cherished by the social environment; that is, these attributes are recognized by all as being intrinsically good, that is, virtues. You should not worry about fully understanding

    the dierence between Utilitarianisms and Ethics of Virtues emphasis on the individual. We will return to this distinction, in Chapter Three, when we review Ethics of Virtue.

  • 7Now it is a good opportunity to begin the consideration of what distinguishes collective-centered, from individual centered Moral Frameworks, such as Utilitarianism.

    When compared to the two collective-centered Moral Frameworks, Deontology and Social Justice, it is evident that Utilitarianism - in particular Benthams formulation of utility - only considers negative moral

    sanctions (punishments) in regard to their eects on the individual, that is, pain. Pain is what will determine whether or not the person will act in the way supported by the sanction.

    For Deontology and Social Justice Philosophers, on the other hand, it is not pain (punishment) but the fact that he or she shares in the collective view of what constitutes The Good for society that will determine

    individuals action towards acting in accordance with the ruling moral principles. The crucial point here is that, for Utilitarianism the measure of the good (pleasure) also resides in the

    individual. That is, diminishing or eliminating pain will also increase pleasure, and this is why individuals will act according the accepted ways if they are punished for deviant actions.

    For Deontology, Social Justice, and other collective-centered Moral Frameworks, the measure of The Good lies outside the individual person, in society.

    This means that individuals will act in accepted ways to demonstrate that they also shares in these principles, that they are Good (morally sound) members for the society or community.

  • 8Lets start with a very simple example:

    Imagine that you are entering the room for an orientation for incoming first year university students. Besides covering a series of topics about living on campus; the session will also be an opportunity for the directors of each housing unit on campus to choose

    its residents. This is a very unusual university. However, it is famous for having dierent kinds of housing units, each with a specialization: sports, music, arts, writing, public speaking, business and management skills, etc.

    The housing directors are very powerful because they basically choose who will live in which facility. The orientation session is then very important because it will be the final step before you find out if you were assigned to the unit of

    your preference. In the flyer for the meeting, it says that everyone should feel free to take any seat, and to grab any food and drinks, placed on table to the left of the door, whenever you want.

    When you enter the room you, and the other 1,000 first-year students, realize that no one will be leading the session. On the screen, it says that the video will start after everyone had taken a seat, and that the house directors will be interviewing each new

    student separately immediately after the screening. At the bottom of the screen, in small letters, there is a note that says that the final decision regarding your housing will depend on

    the orientation. After reading the text on the screen, you decide to get up and pick up some food before all students enter the room, the door is closed, and the video starts.

    When you look at the food, you see that it cant possibly be enough for the 1,000 young people expected to attend the session. And you are in fact very hungry, after a whole day of visits to the various university buildings and facilities.

    How should you act? What should you do? Should you take as much food as you think you will need to satisfy you hunger? Should you take only one of each (one drink and one small bag of chips) so as to make sure everyone has something eat?

    What would Jeremy Bentham consider the morally sound, rational and free, course of action? Eat or starve?

  • 9Given the basic statements of Benthams version of the Utilitarian Moral Framework, it is not dicult to see that the morally appropriate course of action would be to grab as much food as you think you need to satisfy your hunger, even if you know that other students may

    not have enough. Acting in such manner, for Bentham ,is not egotistical. Self-interest is just the most rational basis for action. It is true that by taking as

    much food you do increase other students chance of not finding anything to eat when they finally enter the room. However, for Bentham, one should not measure ones action in terms of how it aects other persons, but in terms of the intensity,

    duration, certainty or uncertainty, and propinquity or remoteness of pleasure or pain (PML, 31). Are you hungry? Are you hungry now? How hungry are you? How long it has been since and how long until you will have the chance to

    eat? If you answer yes to the first and the second question; if you answer very hungry to the second; and if you say a long time since and long time until I will be before food again - the morally sound course of action will be to take as much food as you think will

    be necessary to satisfy your hunger. If you take less than you need, you action will be irrational because all you do will be to teasing you stomach and make it think that food is coming.

    If you take more than you need, you will not be acting on self-interest alone. Why?

    Because since you know that there may be not enough food, by taking more than you need you will also take into account how it will aect other people - for good or bad. This is would not be a nice action. But, for Bentham, it would also not be motivated by reason

    because it might be motivated by sentiment, feeling of satisfaction (which has nothing to do with food), which is not related to reason but to subjective, psychological inclinations.

    What is important now is to grasp how fully individual centered Benthams formulation of Utility is - that is, the core concept of this principle is self-interest, defined rationally, that is, in terms of minimizing what you dont want a maximizing what you do want. This distinction will be important when, in Chapter Six, we examine how the dierent Moral Frameworks apply to Global Issues, such a

    Living Conditions, Working Conditions, and Environmental Conditions.

  • 10

    The Reach of Self-Interest

    Self-interest is for Bentham a major mechanism for social control. In addition to the systems of morality and jurisprudence designed on the basis of the principle of utility, Jeremy Bentham has also become famous because of prison building he devised. In it, surveillance is done from the Panopticon, which a structure in the center for the prison

    facility from which the guards and prison personnel can observe the inmates, who will never know when or whether they are been observed. According to the French philosopher Michel Foucault, the major eect of the Panopticon: to induce in the inmate a state of conscious and permanent visibility that assures the automatic functioning of power. So to arrange things that the surveillance is permanent in its eects,

    even if it is discontinuous in its action; that the perfection of power should tend to render its actual exercise unnecessary (). In view of this, Bentham laid down the principle that power should be visible and unverifiable. Visible: the inmate will constantly have before his eyes the tall

    outline of the central tower from which he is spied upon. Unverifiable: the inmate must never know whether he is being looked at any one moment; but he must be sure that he may always be so. In

    order to make the presence or absence of the inspector unverifiable, so that the prisoners, in their cells, cannot even see a shadow, Bentham envisaged not only venetian blinds on the windows of the central observation hall, but, on the inside, partitions that intersected the

    hall at right angles and, in order to pass from one quarter to the other, not doors but zig-zag openings; for the slightest noise, a gleam of light, a brightness in a half-opened door would betray the presence of the guardian. (DP 212)

    When he designed the Panopticon, Bentham assumed that prisoners are rational persons, who will not act against their self-interest in a away to increase the pain they already suer - which is imprisonment. Not knowing when or whether one is being observed means that, as a rational being, one will act always in the expected ways, out of ones own free will, from the sense that increasing pain is just not a rational,

    good, thing to do. As Michel Foucault notes, this is very eective mechanism of control, in which the prisoner becomes his or her own guard, and there is no need for the state to use other punishment devises, such a solitary confinement, beatings, etc. It is also very economical, as there is no

    need to higher guards to watch cells throughout the facility.

  • 11

    If we return to the example above, we can see clearly how consistent the Panopticon is with Benthams view of Utilitarianism and his take on the rationality of self-interest.

    For instance, if we now consider every student in the orientation room, as having the same dilemma: do I grab as much food as I need? Lets qualify the situation a bit more. For instance, these young, first-year, students have never heard about such a thing as morality. Their families and schools had always attended to all their needs. They never had so consider how their actions would

    aect others because everything had always been handed to them. This is obviously an unreal situation. But it should help us to understand the force of self-interest, in Benthams view of morality.

    Now each student has to make the decision: how much food should I take? Being sheltered their whole lives these students never had experienced the pain of being punished for acting in a way that is detrimental to others. They may have been punished

    for doing something their parents had prohibited them to to, for disobeying an authority, which has the force of law. This, however, is not the same as the situation in the orientation room, for which the directive was take as much food as you want. Put dierently, it is only and when each student stops to consider how their actions might aect others that they come before a moral

    dilemma. The orientation room is not a prison; it does not have any surveillance mechanism. Each student has only his or her conscience as the basis for deciding.

    In the absence of a Panopticon, in Benthams view, the rational mind remains the sole legislator. In a Benthamnite world, each and every student in the room will act in a rational way; each will act upon their self-interest and take as much food as they need to satisfy their hunger. Not one of them will consider whether this decision will aect their chances to get in the house they want. They will not take into account what the students who arrived later and found no food. They will not even consider that the house directors will take their action in the room into account. They imagine that at the interview they will be asked questions about the content of the video. That being the case, it is even more necessary that they eat as much as they can in order not to feel hungry and distracted during the screening. Now it could also be the case that some students will find pleasure in making sure that the

    late coming students found at least some food. In this case, however, it is dicult to ascertain whether or not the principle of utility is ruling such a conduct. As I said before,

    feelings and other motives may be at work that are not rational; they have no place in an ideal Benthamnite world. In any event, what we will find is that, every student will take as much food as they need to satisfy their hunger. This will result in that some students will be left with no food. This is it. In the next sections, we will cover versions of Utilitarianism that do not stop here.

    They go further and ask whether or not this is right or good that some students will be left without any food while others will have as much as they needed just because they arrived first in the room.

  • 12

    Think about thisPeter and John work at a clothing factory in East London. Their wage is 3 pounds/hour.

    One day Peter was riding the tube to Central London where he was going to meet a cousin for a cuppa. It was his first break in 2 years. Because his pay is so low, Peter usually work over time to make ends meet. His partner, Susie, works at Primark and makes only 4/hour. They have one son Luke, who is 3. Because Susies parents live nearby in Stratford, they dont have to worry about childcare. However, things will change when Luke reaches the age when he has to go to school. Peter has been worried about it, and so has

    Susie. They dont talk much. They hope things will get better in one or two years. But, who knows? Since 2008 things seem to get worse everyday. The Prime Minister never has any good news when he speaks about the economy.

    Peter does not really understand what the Prime Minister means when he mentions the economy. Some days he says that the economy is doing better; others he says that it is far from recovery. Still, even as it seems to be recovering slowly, nothing seems to

    improve for workers. Actually, things seems to get worst and worst. Sitting next to him in the tube was this young man, probably a college student, who was reading The Guardian. Noticing that Peter was

    looking over his shoulder, to take a pick at the paper, the young man gave him the paper, as he got out in Mile End. Surprised Peter looked at the paper and saw that there was a piece of paper, a pamphlet inside. At the top of the page, there was the phrase Workers

    of the world Unite! It was a call for a strike against the governments expending cuts. Next day at work, Peter showed the pamphlet to John. He told John that he was thinking about why garment workers like them are not

    unionized. John replied it was because no one would want to hire them if they join a union. He also said that they should count their blessings because they both had jobs, and didnt have to count on governments aid. Peter replied that he couldnt see many

    blessings; actually, the ones he could see he could count with the fingers of one hand, and didnt add to a full hand. John replied saying that few is better than none. Again, they should count themselves lucky.

    Peter stared at the piece of paper, and wondered why workers did not unite; there are so many more of them than companies. He then threw the piece of paper in the rubbish bin, and went back to work.

    - If you Peter asked you the same question, how would you answer? Also, how would you explain to him Jeremy Benthams view about the situation of workers? Would Bentham agree or disagree with John? Why?

  • 13

    Summary and Questions

    In this section, we reviewed the English philosopher Jeremy Benthams formulation of the principle of utility. His view is that human nature is marked by the tendency to avoid pain and to increase pleasure. We saw that he defines utility in terms of self-interest, which is the basis of any rational action. That is, he argues that an individual or a government action should be assessed according to whether it increases or diminishes pain. In his view, individual happiness is the paramount dimension of morality, and he sees collective happiness, as nothing but the sum of its members happiness. Further, he argues that moral sensibility emerges in response to moral sanctions.

    1. How would you define the principle of utility using your own terms?2. Can you find an example of a government or company that justifies its action exclusively on the basis of Benthams formulation of utility?3. Given an example of a government decision or a business strategy that could increase the happiness of the majority of people living in East London?

  • What you will learn ...

    Collective Happiness

    On Justice

    Summary & Questions

    Think about This

    Main headings

    On Collective Happiness: John Stuart Mill

    14

    Collective HappinessLaws and social arrangements should place the happiness, or (as speaking practically it may be

    called) the interest, of every individual, as nearly as possible in harmony with the interest of the whole; and secondly, that education and opinion, which have so vast a power over human character, should so use that power as to establish in the mind of every individual an indissoluble association between

    his own happiness and the good of the whole; especially between his own happiness and the practice of such modes of conduct, negative and positive, as regard for the universal happiness prescribes: so that not only he may be unable to conceive the possibility of happiness to himself, consistently with conduct opposed to the general good, but also that a direct impulse to promote the general good

    may be in every individual one of the habitual motives of action, and the sentiments connected therewith may fill a large and prominent place in every human being's sentient existence.

    On Justice All persons are deemed to have a right to equality of treatment, except when some recognised social

    expediency requires the reverse. And hence all social inequalities which have ceased to be considered expedient, assume the character not of simple inexpediency, but of injustice, and appear so tyrannical, that people are apt to wonder how they ever could have been tolerated () The entire

    history of social improvement has been a series of transitions, by which one custom or institution after another, from being a supposed primary necessity of social existence, has passed into the rank of an

    universally stigmatized injustice and tyranny. So it has been with the distinctions of slaves and freemen, nobles and serfs, patricians and plebeians; and so it will be, and in part already is, with the

    aristocracies of colour, race, and sex.

  • 15

    What is happiness? An important aspect, common to all moral frameworks reviewed in this book, is the fact that each version, each philosopher has

    slightest dierent understandings of the main principle. In the previous section, we saw that Jeremy Bentham defines utility in quantitative terms. For him, pleasure is something that can be counted, that can be accumulated, like things, even though some of

    them are of an abstract nature. John Stuart Mill, on the other hand, has a more qualitative view of pleasure. To be sure, he is more interested in the notion of happiness itself. That is, he does not put much emphasis on what could be taken as indicators. Happiness for Mill has more of a sense of a state

    of being, on how a person feels, rather than on what he or she possesses. Desirable things are good because they have something that brings pleasure or that can be means to the promotion of pleasure. These are qualities. This would mean, for instance, that it is not

    the number of houses a person has what makes them happy. Having one house will give pleasure, bring about happiness because of qualities inherent to the house, such as the fact that it provides

    a good shelter from the elements, because it is large, because it is located in a beautiful place, near shops, etc. With this reformulation of the principle of utility, Mills is not so much correcting Bentham. To be sure, he insists that he agrees with Benthams formulation. He is in fact correcting the critics of Utilitarianism who, according to him, had failed to see that his theory of

    morality is not a celebration of selfishness. In his view, benevolence is a crucial aspect of utility. The happiness of others is as important as ones own happiness.

    When making this argument, however, Mill departs from Benthams earlier formulation of the principle in a very important fashion. As you saw in the previous section, Bentham focused primarily on the individual, his or her self-interest, and explicitly defined community

    interest as the total sum of the interests of each of its members. For Mill, on the other hand, happiness has a collective scope. He postulates that the utilitarian standard for moral evaluation is not the individual persons own happiness but the happiness of all members of the collectivity. The most important end for utilitarian morality, he argues, is the happiness of all. A society in which

    everyone is, or has the possibility of being, happy is a perfect society. What you see here is an inclusion of Platos notion of The Good Society in the utilitarian moral framework. In Bentham we find a notion

    of morality closer to Aristotles, that is, one that focus on how to live a life that it is good.

  • 16

    What changed has changed since Bentham articulated his notion of utility?

    It is not possible to cover all the transformations taken place between 1780 when Bentham finished Introduction to the Principles of Morals and Legislation and 1863 when Mill published Utilitarianism.

    We just need to recall that this period saw major transformations, which aected not only individuals lives, but also collective life. For one thing, there were two revolutions, the American and the French, which marked the emergence of a political form, the modern state, a democratic form of government. When Bentham was writing, the prevailing form was the monarchy. Under

    monarchical regimes, there was a clear-cut class division, characterized by deep economic and political hierarchies. The idea of democratic government, which today we consider as the best form of ruling was an idea in the minds of those in the lower classes, peasants, artisans, small traders. It makes sense then that the concept of utility would reflect the times. How to even think about collective happiness, in the absence of a conception of the human, as the most important moral figure. When Jeremy Bentham was writing, there still prevailed an aristocratic world view, one which corresponded to the Aristotelian view of

    morality, in which The Good is an attribute of individual action and on linked to the ends of this action. In Chapter Four, we will see how the Deontological moral framework was also framed in that moment. But, we will also see how it did not also take into account how ones moral action would aect others living in society. In any event, the late 18th century saw

    the American and the French Revolutions, which embodied the principles of democratic government in their ideologies and constitutions.

    By the time, John Stuart Mill was born (1806), the notions universal liberty and equality - and the idea of a government by the people and for the people - were already part of the lived experience of at least some, in Europe and the United States. Along with

    the idea that the state should represent the interest of its citizens, also come the view that its main task was to protect their interests, including, as it is stated in the US American Declaration of Independence, their right to life, liberty, and the pursuit of

    happiness.

  • 17

    Note, however, that Mills formulation of Utility, with its attention to collective happiness, does not fully reconstitute the Utilitarianism, as a collective-centered moral framework.

    The basis of utilitarianism remains the same. The emphasis is still on individual action; a rational action is one oriented towards maximizing utility, and happiness defined in terms of

    increasing pleasure and diminishing pain. When introduction the notion of collective happiness, Mill is calling attention to the role of government. As it should be expected, when the state has as its main task the protection of the interests of its citizen, something else was added to its role. Up to the early 19th century, the protective role of the state included primarily the defense of the territory and the lives of those living in it. It also meant that the state had the obligation to protect its own interests, primarily economic, against foreign intervention. With the French Revolution, an idea of The People, as unified under the moral umbrella of the nation, would give another

    meaning to the states protective role. Beyond the protection of territory, of the safety and economic interests of those under its authority, the government had also to ensure

    the well being - health, education, etc of its citizens. Furthermore, the idea of the people as constituted as a nation also added a moral or cultural dimension to the notion of society. Hence, the protection of the citizenry would also mean the protection of the cultural

    elements - religious, moral values, and aesthetic aspects - said to distinguish it from other nations. By the time John Stuart Mill was writing both the social (health, education, infra-structure) and the cultural (religious, moral, and aesthetics) dimensions were seen as intrinsic to collective life. Happiness, at this point, had acquired an expanded meaning, one which included not only that which was

    under the control of individuals and families, but also those aspects of life under the responsibility of the government, such as health, education, arts, etc.

    The creed which accepts as the foundation of morals, Utility, or the Greatest Happiness Principle, holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure. () [In this] theory of morality () pleasure, and freedom from pain, are the only things desirable as ends; and that all desirable things (which are as numerous in the utilitarian as in any other scheme) are desirable either for the pleasure inherent in themselves, or as means to the promotion of pleasure and the prevention of pain. - Mill On Happiness

  • 18

    When commenting on Mills version of the principle of utility, the Ethics of Virtue Philosopher Alasdair McIntyre notes that, like Bentham, he had to deal with the problem of bringing all the objects and goals of human desire under a single concept, that of pleasure, and trying to show them as all commensurable with each other in a single scale of evaluation (ASH 236). This is an

    interesting point. However, McIntyre misses two important dierences between Benthams and Mills rendering of utility. First, as noted above,

    there is the crucial interval between the moments when each was formulating their views of utility. When Bentham contemplated the meaning of pursuit of happiness, it was a time when it was still seen as something almost completely under the control of the

    individual. As far as rationality was concerned, it was conceived as an attribute of the individual action; it did not concern government.

    To be sure, back in the 17th century, the English Philosophers Thomas Hobbes and John Locke had already noted that while the task of the state and system of laws, was to protect individuals from other stronger and selfish ones, they saw the state and the

    constitution as an imposition, as a limit to individuals natural freedom. As, we saw in the previous section, this was also an aspect of Benthams view, which he actualized in his idea of the Panopticon. You recall that the Panopticon worked precisely because

    prisoners acted rationally, that is, they refrained from doing anything that would bring about punishment. By the mid-19th century, when Mill was writing, things had changed quite a bit. In addition to its punitive role, the state had also the positive mandate of

    protecting the interests (including happiness) of its citizens. Second, McIntyre also ignores the fact that Mill places more emphasis on happiness, than in quantifiable pleasures. This means that it is not an issue of having to choose between competing desires.

    For, if something brings happiness because of an inherent quality, than it is not a measure of choosing between desires but between things that have distinct value, as far as their capacity to bring happiness is concerned.

    For instance, I am in a situation in which I have I to choose between buying a new car or reforming my house. Acting rationally, in this circumstances, will not just be a matter of sacrificing one desire for another; it will be a matter of considering which one will

    bring me more happiness at that particular moment.

  • 19

    Lets assume that I have a car, one that moves me from A to B, even though it is a 2009 model. At the same time, I find that there is a leak in my roof, which is threatening to aect the structure of my house, and which also forces me to put buckets in my living room every

    time it rains heavily. Which one of these desires would I choose? Acting rationally, I will consider the inconveniences of moving from A to B in a slightly older car and of having a wet house, which may fall apart if I do not fix the leak. With which pain am I willing to live in the short and long run? What would bring me more happiness in the short and long run? I do

    not have to think twice before realizing that having a dry house, saving myself from the expenses of putting a new roof would be preferable than finding myself, one day, arriving

    home in my a new car just to find that the roof had collapsed. In short, in Benthams formulation of utility pleasures are treated as things that matter not in themselves but in

    terms of how many of pleasurable one I can accumulate; for Mill, what matters is the amount of happiness something can give me because having it has an intrinsic value.

  • 20

    Lets now return to the example introduced in the previous section, about the first-year college student having to decide whether to grab as much food to satisfy his hunger or consider the fact that there isnt enough food for everyone attending the orientation session.

    We saw that acting on the basis of Benthams formulation of utility, the rational, the morally sound action, would be to take as much food as he needed.

    Taking more food would mean not to take into account his self-interest properly speaking because such action would also include knowingly harming others - something that might satisfy some feeling but which would not add to his happiness. Taking less food would mean sacrificing his self-interest while taking those of others into account. Neither qualifies as purely rational actions. What

    about Mills formulation of utility? How would the student act if he were to take into account the interests of the other who would enter the room after him?

    Recall that Mills formulation of utility is also individual-centered; however, he also insists that when acting rationality towards increasing their happiness, individuals also take into account the happiness of others. For him, this is not an aective, emotional, gesture. It is a

    purely rational one in the context that, as noted above, sharing a social life, under the protection of government, is something individuals take for granted. More precisely, it is something that individuals took for granted in the mid-19th century, but not about 80 years earlier when Bentham was writing. In any event, how would the now student act if attending to collective happiness? There is at

    least a couple of ways to go about considering the question. On the one hand, you should remember that the house directors will base their final decisions regarding housing allocation on the students performance during the orientation session. Previously I

    suggested the possibility that they would ask the students about what happened in the room. Like before I will dismiss this possibility here. However, the student knows that he is entering a collective, that the other students will be

    living on campus, that they may take the same courses, and that other students may see that he took more than he needed. From Mills perspective this is something to be taken into account when deciding how much food to take, as one is always aware of

    living as a member of a collectivity. On the other hand, there is a change of emphasis here: from one on pleasures, which gives a sense that happiness is quantifiable to one on happiness itself, which is qualitative.

  • 21

    The range of considerations here is large. For one thing, happiness would extend beyond the students immediate satisfaction of having an extra bag of chips or eating a ham and cheese and a turkey sandwich. It would include life on campus itself; how other students would treat him if he we were seen eating more food than he needed while others

    sat there and starved all through the orientation session. The interesting factor here is that the students rational course of action would be again just to take as

    much food as he needed. Why?

    Taking more could, of course, put a stain on his reputation as other students would see him as selfish, which could make his next four years on campus less desirable. Taking less could also have a negative eect as students who had taken just enough to satisfy their hunger would think that he wanted to be better than everybody else, again a selfish attitude, which suggest that he is so concerned with his

    reputation that he does not care about how his actions would reflect on others.In short, both Benthams and Mills formulation of utility puts emphasis on rationality as the motive of

    action, that is, what is important is the amount of happiness derived from increasing pleasure and diminishing pain. Since, however, there is a great variation of what brings pleasure and what brings pain, the best course of action is one that privileges ones self-interest and nothing else, whether or not there

    is a concern with the interest of others.

  • 22

    On Justice A significant element in John Stuart Mills formulation of utility is indeed the weight he gives to the role of government. Now his view of the governments obligation to protect the interests of all its citizens reflects the significance the principle of universal equality would

    acquire in the wake of the French Revolution. As noted above, monarchic governments ruled over societies organized along the hierarchical lines, in which the aristocracy obviously occupied the privileged position. By the time Mill was writing, the principle of equality as a basis for the treatment of citizens had already consolidated. Of course, women, the poor in Europe and slaves and

    colonized people else did not enjoy equal treatment. However, those who do matter, the while, male, property owners living in Europe and the colonies, which were the only ones counted a citizens had the right to equality, as equal treatment before the law and by the state recognized. It is under this principle that Platos idea of The Good Society gains valence. Though it is still conceived in juridical (legal) terms - not the notion of equality introduced in the 20th century by Social Justice philosophers - the notion of equality brings

    with it the ideal of justice, as the descriptor of a morally sound social arrangement. For Mill, All persons are deemed to have a right to equality of treatment, except when some recognized social expediency requires the reverse. And hence all social inequalities which

    have ceased to be considered expedient, assume the character not of simple inexpediency, but of injustice, and appear so tyrannical, that people are apt to wonder how they ever could have been tolerated (utilitarianism). As you can see, this notion of justice, as

    equality of treatment, is very consistent with his view that happiness refers to that of the collective, and his defense that utilitarianism does not celebrate selfishness. More importantly, however, it also indicates how his formulation of utility also carries a critique of any

    hierarchical social arrangements. For he very explicitly introduces a conception of social improvement - which means the expansion of happiness to all - as the elimination of all the social distinctions (color, race, sect, class) that prevailed when Bentham first introduced

    his formulation of the principle of utility. Here again we can understand this change in the principle of utility as a reflection of the fundamental transformation of the later 18th century when, along with the notions of universal human rights, the nations, also emerged

    a conception of progress, which meant not only economic and technological advancement but also, as we saw in Chapter One, the realization of freedom in all areas of social existence. Put dierently, another way of making sense of the dierences between

    Benthams and Mills formulations of the principle of utility is by looking into how they are placed in regard to the trajectory of modern philosophy discussed in Chapter two. While Bentham was writing at the same time as Kant and Hegel were redefining rationality from an attribute of ideas and individual actions into the larger social principles, Mills formulation is a version of utilitarianism that is already

    informed by principles these postulated as unique to modern western morality.

  • 23

    Think about thisMarcia and Vivian have just left their seminar for the second year module on Finance. During the seminar, the instructor showed a video by Occupy Wall Street. In the video, a group of activists from New York City were protesting in front of the headquarters of a major bank. The protesters has posters listing the numbers of empty houses in a working class neighborhood in Queens, which the owners lost due

    to foreclosures. They also had posters about the amount the US government had made available to banks which, like that one, were deemed too big to fail. The video also featured interviews with participants in the protest. One of them said that he was not against banks, that he understood that it is impossible for societies today to function without them, but that he did not understand why the

    government had chosen to save the banks instead of working families. Another protester said that she could not understand why the shareholders and chief ocers of the banks had continued to receive their bonuses even after they had failed so glaringly to keep their

    institutions finances in order, after they have approved loans to people who they knew would not be able to pay them o. Finally, a third protester, a college student, said that she did not understand why the whole population of New York City and those of other cities around

    the world were not out protesting in front of banks and government buildings. She mentioned that her grandmother had lost all her savings in one of the many security schemes that were tied to the so-called subprime loans. Her grandmother had to move in with her parents because she was depressed after losing the few thousands dollars she and her late husband had sacrificed so much to save. During the discussions, students had taken dierent positions: some agreed with the protesters saying that bank ocials should not

    have been so selfish, that they should be ashamed of benefiting from people losing their homes and savings; others said that the people who borrowed money and/or invested in security packages should have been more careful, more rational; other yet said the government should have been more attentive, that they should have mechanisms in place to regulate the financial market. At the end of the seminar the instructor said that all these views were valid, but that students should remember that the world of finance is ruled by dierent rules,

    that profit is the most important end and that the government does not have the right to interfere in the financial market. Marcia, who agreed with those who defended government intervention, was a bit upset. She couldnt understand why so many of her classmates could have sided with the banks. Vivian, on the other hand, did not say anything in the classroom. When Marcia asked for her opinion

    she said that she didnt really have one. She could appreciate both sides - the banks and the people of lost their savings and their homes - but she could not make up her mind.

    - What would you say to Vivian to help her to make up her mind? How would you explain to her how John Stuart Mill would view the situation of homeowners and small investors who lost everything due to the 2007-2008 Global Financial Crisis?

  • 24

    Summary & Questions

    In this section, we reviewed the English philosopher John Stuart Mills formulation of the principle of utility. His views it that utility is a qualitative measure of happiness, one that is linked to the intrinsic characteristics of the things, to their ability to increase pleasure and minimize pain. We saw that while he also defines utility in terms of self-interest, he gives more weight to collective interests (or collective happiness). He also frames his notion of utility in relation so justice, which he sees as the outcome of social improvements designed to eliminate hierarchies and increase collective happiness.

    1. How would you define the notion of collective happiness using your own terms2/ Can you find an example of a government or company that justifies its actions exclusively on the basis of Mills formulation of utility?3. Give an example of a business strategy that could increase the happiness of the inhabitants of London - not of each one individually but as a collective.

  • What you will learn ...

    Defense of Self-interest

    Freedom versus Justice

    Summary & Questions

    Think about This

    The Rule of Self-Interest: Hayek

    25

    On Self-Interest It is true that the virtues which are less esteemed and practiced now--independence, self-reliance, and the willingness to bear risks, the readiness to back one's own conviction against a majority, and

    the willingness to voluntary cooperation with one's neighbors--are essentially those on which an individualist society rests. Collectivism has nothing to put in their place, and in so far as it already has destroyed then it has left a void filled by nothing but the demand for obedience and the compulsion of

    the individual to what is collectively decided to be good. (TRS 1944)

    On the Market A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other

    form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise. If Mrs. Thatcher said that free choice is to

    be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom, while the second is not: free choice can at least exist

    under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot. (LTT 07/11/1978)

  • 26

    In the mid-20th century, the principle of utility is reformulated once again. Now, however, self-interest is not framed in terms of pleasure and pain, as the distinctive aspects of human nature. Fredrick von Hayek, who is perhaps the most prolific Utilitarian thinker of last century, reformulates the principle of utility with an emphasis on the specific traits of the capitalist society, which he defines as one

    characterized by the centrality of the market. It is not that the market was not an important aspect of early Utilitarian Philosophers, such as Bentham. What has changed now is that the emphasis on human nature was replaced by an emphasis on the nature of society itself. For Hayek, self-interest is an expression of freedom, which is a political and economic aspect of social life, one that should be protected against government interference. An important element playing out in Hayeks views on utilitarianism is the fact that the idea of equality - redefined as social justice - had entered the agenda of governments, as part of the lists of obligations. When writing about the need to protect individual freedom, then, Hayek had two enemies in mind - the principle of equality and socialism - both of which related to how

    the state should behave in regard to economic processes

    The Defense of Self-Interest

    With Hayek, we find a retreat from the notion of collective interest. What he does is to redefine self-interest as an expression of individual freedom, while linking equality to an imposition from the political authority, that is, government. Furthermore, Hayeks defense of self-interest also draws from another important notion that had emerged in the 19th century, which is the idea of evolution. You may wonder what a biological concept has to do with economic practices. If you recall, the core of the notion of evolution is the thesis of

    survival of the fittest, that is, the idea that everything in nature emerges out a process of natural selection, which is a rational weeding out of the weaker traits of a species or of weaker individual members. This selection occurs as living things compete for nourishment

    and other things available in their environment that are necessary for their survival. By the time Hayek was writings, the notion of evolution had already consolidated in the imaginary of modern western societies, in a very simplified form: the idea that competition is the rational engine of progress (evolution). The characteristic organization of a developed society, one that has evolved - is collective in which individual members are allowed to compete freely with governments help or hindrance. For Hayek, and other economists, the

    core organizing elements of such a society is the market, where individuals seek to maximize their advantage (utility) when engaging in economic exchanges, of commodities, finances, wages, etc.

  • 27

    Now it is a good opportunity to consider Hayeks and previous formulations of the principle of utility. In Chapter One, we saw how the notion of freedom and reason became the most important descriptor of modern western

    societies. In the third section of this chapter, we reviewed Jeremy Benthams formulation of the principle of utility. As you recall, Bentham was writing at the same time that Kant and Hegel were designing a social context, in which reason and freedom govern

    all aspects of individual and collective life. At the political level, we also reviewed how these descriptors were articulated by to the two revolutions, the American and the

    French, that advanced the ideal of a democratic society, in which the government rules in the name of, and for, the people. In the previous section, we saw how it is precisely this notion of democracy that is behind John Stuart Mills reformulation of the

    principle of utility, with an emphasis on collective interests and equality. What we find in Hayeks reformulation of the principle of utility is precisely a retreat from the political transformations that

    animated John Stuart Mills view of Utilitarianism. As noted above, it was sustained by the notion of evolution that explained the collective in terms of how its individual members fare in a competitive environment.

    Freedom, for Hayek, is primarily defined in terms of a right to compete, to win or to lose. His conception of a good society is one which allows individuals to compete freely. Because of the size and degree of complexity, modern western societies - which he calls market societies - benefit even more from individuals alone acting on their self-interest because, in them, it not possible for

    the government or any other political body to have a complete knowledge of what is happening in all spheres. Hence, it is impossible to design moral rules (and also laws and regulation) which should be followed by every member.

    For Hayek, these societies function on the basis of a subtle communication system - a communications system which we call the market and which turns out to be a more ecient mechanism for digesting dispersed information than any that man has

    deliberately designed. (TMEKP, 68).

  • 28

    What about hour students at the orientation section at the unusual university? How would them act on the basis of Hayeks formulation of the principle of utility? Remember that their main moral dilemma was whether to establish what was their utility, in a rational fashion? We saw that under Benthams and Mills formulation of the principle, acting rationally meant to get enough food to satisfy their hunger.

    Our Benthamnite student took just enough because his decision was not based on what his action would entail to others who were coming to the room later - whether they would have some food to eat, if he took less than he needed; or whether they would have nothing to eat, if he took more than he needed. Now for Hayek, a good, rational society, is one in which individuals are left alone to decide on how they should act in order to maximize their utility, that is, to satisfy their self-interest. This means precisely the absence of any rule (legal or moral) that should either limit or facilitate this decision. Further, he is also describing this society as a competitive one; it is not only that

    individuals act in order to satisfy their needs and desires. As in the case of Charles Darwins description of living nature, individuals compete to obtain advantage over others - it is a struggle of life and death - and the stronger ones, who are those better adapted to the given environment conditions win. You probably have a sense of how these Hayekan students would act? Now the orientation section

    auditory is a social context governed by a moral system which is no longer a matter of a single individual rationally considering what he needs and wants, but one in which every individual is trying to get more (advantage) than others, regardless of how much they need or want. Under these conditions, the morally sound decision will be to take as much as possible and to make sure that one is not going to be distracted by hunger during the orientation session. Why? Because you remember that the performance at the interview that will take place after the session will determine the choice of housing. If the interview covers something that was presented in the video, then it is important to be in the best possible shape throughout. Entering in scene with this emphasis on self-interest is precisely an element that

    both Bentham and Mill stated was not part of Utilitarianism, that is selfishness. For, as you remember, for Bentham self-interest is defined as minimizing was you do not want (pain) and maximizing what you want (pleasure). But this is done without consideration as to whether acting in such a way will have a positive or negative impact on others. Self-interest in Benthams view means paying attention to what is good or bad to oneself. For Hayek, on the other hand, self-interest is important in a social context, which is shared with others, who also try to maximize their pleasure. Because he is against government interference, and postulates the superiority of a self-regulating market -

    one that functions like nature in Darwins representation - the only way to ensure the satisfaction of ones needs and wants is to act in such a way as to reduce competition. Knowing that, the students in our orientation room will take as much food as they want because

    they know that, by doing so, they will have a competitive advantage over the students who will come late.

  • 29

    Freedom Versus Justice

    Besides his passionate defenses of freedom from government regulation and authority, the only other moments in which Hayek appears more as an ideologue are when he is writing against social justice. The reason is very simple. Hayek does not believe that equality can be achieved without government interference. Why? While this view is obviously linked to his libertarian positions, it is

    also consistent with his view of the rational individual actor and of a rational social organization. This is very important because Hayeks formulation of the principle of utility - though it is consistent with the moral framework, as being an individual-centered one - puts quite a bit of emphasis on the collective. Now he does so not because he thinks that the collective is the moral actor. This is a perspective we find in the collectivity-based moral frameworks, such as deontology and social justice. For him the moral question

    involves both the individual and the collective: it can be formulated as what kind of society allow that individuals realize their freedom? Freedom (as self-interest) is for him the basis of morality, because only individuals acting on self-interest can bring about

    the kind of progress necessary for each individual to live a good life. Hence, his rejection of programs for social justice, which he sees as attempts to limit individuals freedom to benefit the weaker members of society.

    We have to remember that he first introduced his version of utilitarianism, a few decades after the introduction of a new agenda of rights, social rights, which was designed to minimize the damaging eects of capitalism upon the economically dispossessed

    members of modern western societies. From this perspective, the welfare state, governments have the obligation to protect and promote the social well being, by providing healthcare, education and creating mechanisms and structures to ensure social equality.

    You are familiar with the critiques and reforms made back in the 1970s and 1980s by Margaret Thatcher and now by the James Camerons government, which have basically destroyed the safety nets provided by the British welfare state, which started to be put

    in place in the early 1900s. What is at the core of Hayeks setting up of such a strong opposition between freedom and equality (social justice) has nothing to do with an incompatibility between the latter and the principle of equality. As we saw in the previous

    section, John Stuart Mills formulation of the principle of utility is very consistent with notion of equality and the setting up of government structures designed to minimize social inequalities.

    I am certain that nothing has done so much to destroy the juridical safeguards of individual freedom as the striving after this mirage of social justice. (TME 68)

  • 30

    Hayeks position is an ideological one, as one can see in statements such as this:

    Few if any social scientist would say that, for the better part of the 20th century, while they had the welfare state model in place, countries like the United Kingdom, the United States, Germany, or France constituted totalitarian powers. Every and each gain towards

    social justice made in these countries followed strict review processes - either prior or after their implementation- which established their constitutionality; that is, they were assessed to ascertain if they violated the rights of the citizens.

    As you know, in democratic states, governed by the rule of law, rights are the expressions of a persons freedom. For this reason, when denouncing the welfare states authoritarianism Hayek had to rely on an argument about knowledge. His argument against government

    regulation is based on the view that the government cannot apply rules to every kind of situations that may take place because it cannot know all of them. Hence, self-interest alone should rule in market societies because only the individual has knowledge of the

    circumstances under which he or she acts.How Hayek moves from an argument about incomplete knowledge to the conclusion that government rules that bring about equality are

    intrinsically authoritarian is impossible to know because to know it would require that he demonstrated the link between rule and authoritarianism empirically. This he cannot do because this link already appear in the classic texts of political philosophy, Hobbes and Locke, in which the need for the authority of law and the authority of the state is defended on the basis of a description of humans a

    inherently self-interested, selfish beings. Now that neither Hobbes nor Locke based their concept of human nature on empirical studies is irrelevant. What is important to remember is that these philosophers were themselves ideologues for an emerging social class that was

    trying to rid itself from the yoke of monarchical and aristocratic regimes. This view of human nature - and the notions of reason and freedom that accompany it - is at the core of our views of social, collective life (and scientific theories, such as evolution). When Hayek appropriates it, as a positive human attribute, to place at the basis of his formulation of the Utilitarian Moral Framework, he is basically

    taking a common sense idea to support his views against government. Here, when writing against social justice, Hayek writes from the libertarian perspective, which self-describes itself as an ideological

    perspective and not a scientific one.

    While an equality of rights under a limited government is possible and an essential condition of individual freedom, a claim for equality of material position can be met only by a government with totalitarian powers. (TRS 98)

  • 31

    Think about This ...

    Tayyabs parents migrated from Pakistan in the early 1950s. After a few years working at a convenience store owned by his uncle, Hanif, Tayyabs father was able to safe enough money to open his

    own small business, a small grocery store in East London. Though Tayyab grew up helping his parents in the store, he never thought about the fact that he would inherit the business from his parents. In fact, he did not think much about his career; his father, however,

    hoped the son would follow on his footsteps, and stay in the family business. Always a good student, Tayyab won a scholarship to study at Cambridge. His parents did not like the idea of their son moving so far

    away, at such a young age, but they were proud of him, and appreciated that he had this opportunity to study at a prestigious university. When deciding on which subject to take at Cambridge, Tayyab recalled that he had seen a Pakistani lawyer on TV talking about the situation of the Pakistani community in Britain, about racial discrimination, and the fact that there were still few Pakistani

    lawyers and doctors. Tayyab decided that he was going to study law and help his community. At Cambridge, he made friends with a group of students who were involved with the Liberal Democrats. In his last year of studies, he joined the Liberal Democrats. Being

    charismatic and a good speaker, Tayyab attracted the attention of party ocials who believed the Lib Dems needed to make inroads in the South Asian communities. After a few years working at a prestigious firm in Birmingham, Tayyab decided to run for oce,

    representing the large the Pakistani community in the city. In 2010, Tayyab was among the party leaders deciding whether or not they should join a coalition with the Tories. He wasnt very sure, but decided to follow the partys decision. A year later, he and his wife were at a family dinner in his parents home. After retirement his parents had decided to move to a comfortable house in West London, but

    they never completely severed their ties with the community on the Eastern suburbs. Over dinner, the conversation stirred toward the situation of Pakistani small businesses, many of which had suered losses due to the 2007-2008 global financial crisis. Tariq, Tayyabs younger brother was very critical of the coalition for having decided to help the big banks while small businesses were left to fend for themselves. Besides the loss of savings due to the crisis, Tariq was arguing, East Londons small business were also suering because of the hardships aecting their customers, many of which lived o government

    aid.

  • 32

    When Tariq asked him why the Lib Dems have decided to support the spending cuts, Tayyab said that it would have been worst for the countrys economy if the government had done nothing to keep the

    major banks afloat. Listening to his older brother, Tariq, who had studied business and management in college, and now owns five grocery stores in East London, wondered why the coalition decided to

    save the big banks while letting the small business fail. He thought back about his business modules, in which he learned about how competition weeds out the weak players in the market, and why this is

    a good thing for the economy and society as a whole. When he asked Tayyab about this, he older brother could not answer, and just said that Britain had done the same thing as other countries like

    America, Germany, and France. If Britain was wrong, so were they.- How do you think Hayek would you respond to Tariqs question?

  • 33

    Summary & Questions

    In this section, we reviewed the ideas of the Austrian-born British Economist Friedrich von Hayek. His reformulation of the principle of utility places a greater emphasis on self-interest. For Hayek, individuals acting on the basis of self-interest are a necessary feature of the market society. He also defends that government intervention is harmful for two reasons. First, it is violates the principle of freedom, which is the one that governs advanced capitalist society. Second, because the government only have a limited knowledge of what happens in a large society, it cannot possibility design legislation and policies that would ensure its optimum workings.

    1. How would you distinguish Benthams and Hayeks formulations of self-interest?2. Give an example of a situation in which governments interference is harmful to the functioning of the market economy.3. How do you think John Stuart Mill would respond to Hayeks argument that self-interest is a supreme good?

  • Consider this ...

    34

    Look at these two arguments about the Market Society:A. The Tragedy of the Commons - The Thesis of Limited Resources and the advantage of Private Property and the market

    The Problem: Each man is locked into a system that compels him to increase his herd without limit--in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all. His view: My thesis is that the population problem, as conventionally conceived, is a member of this class. How it is conventionally conceived needs some comment. It is fair to say that most people who anguish over the population problem are trying to find a way to avoid the evils of overpopulation without relinquishing any of the privileges they now enjoy. They think that farming the seas or developing new strains of wheat will solve the problemtechnologically. I try to show here that the solution they seek cannot be found. The population problem cannot be solved in a technical way, any more than can the problem of winning the game of tick-tack-toe. The most important aspect of necessity that we must now recognize, is the necessity of abandoning the commons in breeding. No technical solution can rescue us from the misery of overpopulation. Freedom to breed will bring ruin to all. At the moment, to avoid hard decisions many of us are tempted to propagandize for conscience and responsible parenthood.

  • 35

    parenthood. The temptation must be resisted, because an appeal to independently acting consciences selects for the disappearance of all conscience in the long run, and an increase in anxiety in the short. The only way we can preserve and nurture other and more precious freedoms is by relinquishing the freedom to breed, and that very soon. Freedom is the recognition of necessityand it is the role of education to reveal to all the necessity of abandoning the freedom to breed. Only so, can we put an end to this aspect of the tragedy of the commons. - Garret Harding, The Tragedy of the Commons, 1968

    B - The Tragedy of the 1% - The Global Movement Occupy Wall Street argues the market simply enable the rich to get richer by appropriating wealth they do no create . They also defend that it is the job of government to protect people from the global market and citing things as the ongoing financial crisis - do we assess these two dierent approaches to wealth creation especially in a global economy

    We are the 99 percent. We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suering from environmental pollution. We are working long hours for little pay and no rights, if we're working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent. - Brought to you by the people who occupy wall street. Why will YOU occupy? (OccupyWallSt.org Occupytogether.org)

  • 36

    As you consider these two views on the market, try and answer the following questions:

    1. How would Bentham respond to Garret Hardings solution to what he terms The Tragedy of the Commons?

    2. Do you think that John Stuart Mill would agree with Occupy Streets critique of the global market? Why?

    3. Since he is against any kind of government interference in the market, do you think that Hayek would support governmentss Stimulus Plans that were designed to help global corporations under the view that they are too big to fail?