In Defense of Utilitarianism

" Utilitarianism certainly seems as though it gives us a firm decision procedure for deciding between actions and/or institutions. But I think this is largely an illusion, produced by assigning precise numbers to things that we aren't really in any position to quantify."

(Matt Zwolinski, in a comment on my blog post on left-libertarianisms)

I am not a utilitarian, for reasons I have discussed elsewhere, but I think utilitarianism comes a great deal closer to being a moral theory with real world content and implications than what I have so far seen of Bleeding Heart Libertarianism. Hence this post.

There are multiple versions of utilitarianism—rule vs case, average vs total. For the purposes of this post I will consider the version that advocates taking those acts that maximize total utility.

The first objection that can be raised is that we cannot observe utility. That is not true. We can observe both the ordinal and (Von Neumann) cardinal utility functions of a single individual by observing his choices. It is possible that the observed parts of the function are radically different from the unobserved parts, or that the function changes radically from day to day, making yesterday's observation irrelevant today, but we have introspection of our own preferences and observation of the behavior of others to tell us that that is unlikely and to suggest likely guesses about preferences that we do not directly observe. We cannot create a precise description of someone else's utility function, but we can and do know a good deal about it with a high degree of probability.

That leaves the problem of interpersonal comparison: How do I decide whether a gain for me does or does not outweigh a loss for you? We do not have as good a way of solving that problem. Yet we routinely do solve it, at least approximately, when deciding how to divide our limited resources among other people we care about. If I were truly agnostic about interpersonal utility comparisons I would have no opinion as to whether giving ten cents to one person was or was not a larger benefit than giving a hundred dollars to another and similar person. We are human beings, we have a good deal of experience with other human beings, and that is enough to make reasonable, approximate, guesses about interpersonal utility comparisons.

Further, as Alfred Marshall pointed out long ago, in many cases we do not need detailed information about individual interpersonal comparisons in order to form a reasonable opinion about which option leads to greater total utility—because differences average out. Consider the question of tariffs. Economic theory tells us that if we do interpersonal comparison on the (surely false) assumption that everyone affected has the same marginal utility of income, a tariff, under almost all circumstances, results in a net loss of utility.

There are two ways in which one could accept the standard economic argument and yet claim that a tariff produces a net gain in utility. One is to reject the assumption implicit in the economic analysis that what matters is the actual effect of the tariff on the economic opportunities of those affected, reflected in the prices they must pay for what they buy and can receive for what they sell. One could, for instance, argue that many people's utility function includes a large positive value for the existence of a tariff, independent of its effect. Such a claim is, however, implausible given what we know, from introspection and observation, about human tastes. And if true, it suggest a testable implication—that many individuals will support a tariff even though they are fully informed about its economic consequences, and even though the economic consequences for them are negstive. I do not think that implication is consistent with casual observation of the politics around tariffs.

The other possibility, and the one Marshall considers, is to argue that the gainers from a tariff have a substantially larger marginal utility than the losers, hence that the net effect is positive measured in utiles even if negative measured in dollar value. To support that claim one would need evidence. Gainers and losers represent a large and diverse group of people, so we would expect individual differences to average out. That is not true for all arguments about dollar value vs utile value; the obvious exception would be a policy where gainers were much poorer than losers. But there seems no reason to expect that for the tariff case. 

Hence we have good reason to conclude that a tariff lowers total utility. It is good reason short of certainty, but that is true of virtually all of our conclusions. Similar arguments could be made to show that many, although not all, of the standard arguments that imply that one choice is superior to another on conventional economic grounds, leads to greater economic efficiency, also imply a good reason to think that it results in greater total utility and so should be preferred by a utilitarian.

I think these arguments are sufficient to demonstrate, not that utilitarianism is true, but that it is not empty—that it has real world content and real world implications.