The visible hand in economics

Reply: What’s the Matter with Utilitarianism

Posted on: April 7, 2008

Over at the very good blog Long ago and not true anyway,

Utilitarianism leaves no place for justice at a philosophical level … (in utilitarianism) justice is there simply because it helps make us all better off; not because it is right to put wrongs to right

Given that the economic method is fundamentally utilitarian I feel that I have to say a little about this.

Justice is a normative, equity based issue.  Defining what is just requires making a value judgment about what is right and what is wrong.  Stating that certain things are right or wrong simply tells us what value judgments we are making regarding morality.  The beauty of utilitarianism is that it allows us to decompose a situation and define when something is “right” or “wrong”.

As we have discussed earlier, if we are willing to abstract sufficiently we should be able to place equity and efficiency concerns into one single framework.  Then the distinction of what is right or wrong will depend clearly on the value judgments we feed into our abstract model/thought experiment.

Utilitarianism doesn’t tell us that there is no such thing as a right or wrong action, but it does allow us a way of viewing problems given some social value of what is right or wrong.  Ultimately, a trade-off can exist between something that is “morally” right and something that is technically efficient – the appropriate choice will depend on the value that society places on “morality”.

6 Responses to "Reply: What’s the Matter with Utilitarianism"

Matt, to steal the old overcoming bias riff, it doesn’t concern you that there is always some finite number of specks of dust in the eye that ultimately reduces welfare more than brutally torturing somebody reduces welfare?

I accept Terence’s criticism that utilitarianism can get you justice-consistent outcomes without any actual belief in justice as a concept. Does this really matter though? I’d be curious for further comment.

I guess there are two ways we can view justice in a utilitarian framework.

1) It is an intrinsic value that people hold – ergo it should go into their utility function and be part of their welfare measurement.

2) It is part of rule following behaviour that leads to more socially optimal outcomes than without it.

Ultimately, when we are analyzing behaviour we could say that people should do what is right because it is right, but it feels more complete to define when the person action is actually optimal – and then compare that boundary to what happens in reality.

Holistic arguments such as what is right is right seem rather baseless to me, a utilitarian argument can provide a more practical lens with which to analyse decisions, while being just as tautological 😉

Oh – just saw this (too little time on the internet recently). I’ll include a reply when I reply to my own post – hopefully over the next few days.



Spectacular, I’m looking forward to it 🙂

[…] again and again 21 05 2008 Terence at LAANTA has replied to my reply on his post on the problems with […]

I found myself seeking for something like this for a long time.

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