While there is wide variation in utilitarian approaches to ethics, they are united by their endorsement of the following general principle: the morally right action is judged through the goodness of its outcomes for society, and, conversely, what is good for society is based on what is good for individuals.
Utilitarianism, as a family of philosophical theories, has been the most powerful and pervasive approach in the development of economics since the marginalist revolution. Utilitarianism was developed in the eighteenth century and then fully articulated in the nineteenth, designed to do good to the world not from the point of view of the Christian church or any religion, but rather from a secular point of view based on rational thought.
It was conceived as a way to think about the legal system, and to improve it on the basis of a single coherent rational and acceptable principle, that of the utility principle. It hence may be used to think about the constitution, about civil and penal laws, and, last but not least, any kind of policy judgment whether economic or social. Economics has endorsed some important aspects of utilitarianism ever since the 18th century. In particular, welfare economics, and hence virtually every public policy recommendation formulated by economists, has for years been influenced by utilitarianism in some manner, albeit not always explicitly recognized. The efforts to get away from utilitarianism may even explain aspects of the evolution of welfare economics.Utilitarianism is not only a moral and political philosophy, however; it is also a philosophy of action. As an ethical theory, it sets down what individuals should do to improve their own situation, and what should be done by every individual and by the collectivity to improve collective welfare. As a theory of action, utilitarianism claims that individuals seek to promote their own utility, such that utility appears as both an explanation of and a guide for human action. Notice that utilitarianism is sometimes claimed to be rooted in a consideration of strictly selfish actions, with no attention paid to the utility of others: but this is merely an exaggerated caricature of the theory.
Being motivated by one’s own pleasure does not require that this pleasure be exclusively self-oriented. There certainly exist extra-regarding pleasures, functioning as truly motivating factors, such that seeking one’s own self-interest does not imply that one disregards the fate of others. The ideational evolution in the utilitarian philosophy of action is exactly parallel to that in utilitarian moral philosophy. In the classical versions of utilitarianism, pleasure guides human actions, as a psychological hedonistic law would suggest. The theory has then moved away from hedonism to consider that the psychological law at stake is the search for the satisfaction of preferences, no matter what these preferences are made of, and no matter what their substantive cause. Other aspects of the utilitarianist philosophy of action shall not be discussed in this entry, in so far as this is closely connected to standard rational choice theory as used in economics: the interested reader might want to refer to decision theory and the associated heterodox literature.As a way of setting out the diversity of utilitarian approaches, this entry has chosen the following as a key idea. Utility has a plural nature: it is both positive and normative, and it is normative not only for every individual, but normative also for the collectivity. This plurality generates tensions. The effort to reconcile these tensions explains the diversity of utilitarian doctrines as well as their evolution, both within classical utilitarian theories and contemporary theories, and even the development from hedonist utilitarianism to preference utilitarianism.
As shall be recalled in the next section, classical utilitarianism mostly retained a hedonistic interpretation of utility. It is a doctrine that, in its standard nineteenth century formulation, meant the promotion of the greatest happiness for the greatest number.
Contemporary utilitarianism can be defined as the combination of act consequential- ism, welfarism, and a principle of sum-ranking (Sen 1979c).
Consequentialism implies that an action is moral if, and only if, the social outcome of the resulting state of the world is good. Welfarism is the principle that the goodness of an outcome depends solely on individual utilities and on no other information. Sum-ranking says that the appropriate method of aggregation is to add individual utilities. As described in the following section, contemporary approaches in utilitarianism develop refinements of preferences utilitarianism.There are also a wide range of anti-utilitarian theories which do not in general question the premiss that more goodness is better than less, but rather question the ethical implications of monism (the exclusive focus on utility as opposed to other values), the priority of goodness over fairness, or the democratic failures of utilitarianism. In the economics literature, the alternative to utilitarianism is often supposed to be represented by the Rawlsian theory, as generally encapsulated in the famous Bentham-Rawls opposition. Rawls has indeed been important in making it acceptable to call into question the assertion of an all-powerful and uncontested utilitarianism. The diversity of critiques and alternatives to utilitarianism is presented in the final section.