Chapter 4

Ethical Theories
Conceptual frameworks for rational decision making in ethical business
Utilitarian ethic
Utilitarianism is the name applied to an ethical theory formulated by Jeremy Bentham (1784-1832) and
restructured in its classical form by John tuart !ill (18"#-1873)$ %his approach places the moral &orth of an
action in the action's conse(uences and emphasi)es the *ood of the total society+ not the benefits accruin* to a
sin*le indi,idual or e,en a *roup of indi,iduals$
A classical case in business ethics perfectly illustrates how the utilitarian approach works and why it can
lead, sometimes, to highly controversial decisions in business. This case exemplifies the dictum, The way to
hell is paved with good intentions, even though utilitarian ethics underestimate the importance of intention in
assessing the moral worth of human actions, basing moral judgment only on their conseuences.
THE FORD PINTO CASE
In the mid-1960s, Ford lost market share to Japanese companies making compact, fuel-efficient cars.
Lee Iaccoca, president of Ford at that time, determined to regain Fords share ! rapidl! de"eloping a
ne# small car called the $into. %he model #as scheduled to e put on the market in 19&0.
%he $into #ould #eigh less than ',000 pound, cost less than (',000 and e rought to market in '
!ears instead of the normal ). *ecause the $into #as a rush pro+ect, st!ling considerations dictated
engineering design to a greater degree than usual. In particular, the $intos st!ling re,uired that the gas
tank e placed ehind the rear a-le, #here it #as more "ulnerale to eing punctured in case of a rear-
end collision.
.hen an earl! model of the $into #as crash-tested, it #as found that, #hen struck from the rear at
'0 miles per hour or more, the gas tank #ould sometimes rupture and gas #ould spra! out and into the
passenger compartment. In a real accident, stra! sparks might e-plosi"el! ignite the spra!ing gasoline
and possil! urn an! trapped occupants.
Fords engineers suggested that crash fires could e largel! pre"ented ! installing a ruer ladder
inside the gas tank for onl! (11 per car. /use,uent estimations re"ealed that the real cost of this
technical impro"ement #ould not ha"e een greater than (0.10 a car2
Ford managers decided, nonetheless, to go ahead #ith production of the $into for se"eral reasons3
First, the design met all the applicale legal and go"ernment standards then in effect. 4t that time,
go"ernment regulations re,uired that a gas tank onl! remain intact in a rear-end collision of less than
'0 miles per hour. It is #orth to mention that a ne# standard, more restricti"e, #as aout to e adopted
! the federal authorities. %o pre"ent this, Ford spent millions of dollars on lo! acti"ities #ithin the
5ongress and succeeded e!ond its #ildest e-pectations3 the standard #as not adopted until the 19&&
model !ear 61 !ears dela!7. /econd, Ford managers felt that the car #as comparale in safet! to
se"eral other cars then eing produced ! other auto companies. %hird, according to an internal cost-
enefit stud! that Ford carried out, the costs of modif!ing the $into #ould not e alanced ! the
enefits.
Instead of making the (11 impro"ement, installing the (0.01 ladder, or e"en gi"ing the consumer
the right to choose the additional cost for added safet!, Ford continued to dela! the federal go"ernment
for eight !ears in estalishing mandator! rear-impact standards. In the meantime, hundreds of people
#ere urning to death and thousands more #ere eing adl! urned and disfigured for life, tragedies
man! of #hich could ha"e een pre"ented for onl! a slight cost per "ehicle. Furthermore, the dela! also
meant that millions of ne# unsafe "ehicles #ent on the road, "ehicles that #ill e crashing, leaking fuel
and incinerating people #ell into the 1910s.
8n 4ugust 10, 19&1, a tragic automoile accident occurred on 9./. :igh#a! ;; near <oshen,
Indiana. /isters Jud! and L!nn 9lrich 6ages 11 and 16, respecti"el!7 and their cousin =onna 9lrich 6age
117 #ere struck from the rear in their 19&; Ford $into ! a "an. %he gas tank of the $into ruptured, the
car urst into flames and the three teen-agers urned to death.
/use,uentl! an >lkhart 5ount! grand +ur! returned a criminal homicide charge against Ford, the
first e"er against an 4merican corporation. =uring the follo#ing '0-#eek trial, Judge :arold ?. /taffeld
ad"ised the +ur! that Ford should e con"icted of reckless homicide if it #ere sho#n that the compan!
had engaged in @plain, conscious and un+ustifiale disregard of harm that might result 6from its actions7
and the disregard in"ol"ed a sustantial de"iation from acceptale standards of conduct.A %he ke!
phrase around #hich the trial hinged, of course, is @acceptale standards.A =id Ford kno#ingl! and
recklessl! choose profit o"er safet! in the design and placement of the $intos gas tankB >lkhart 5ount!
prosecutor Cichael 4. 5osentino and 5hief Ford attorne! James F. Deal attled dramaticall! o"er this
issue in a rural Indiana courthouse. Cean#hile, 4merican usiness an-iousl! a#aited the "erdict, #hich
could send #arning ripples through oardrooms across the nation concerning corporate responsiilit!
and product liailit!. %he la#!ers representing Ford Cotor 5ompan! produced in court these accounting
figures, tr!ing to defend the Ford managers decision to keep the original design.
Benefits
/a"ings3 110 urn deaths, 110 serious urn in+uries, ',100 "ehicles incinerated
9nit 5ost3 ('00,000 per death, (6&,000 per in+ur!, (&00 per "ehicle
%otal *enefit3 6110 E ('00,0007 F 6110 E (6&,0007 F 6',100 E (&007 G ()9.10 million
Costs
/ales3 11 million cars, 1.0 million light trucks
9nit 5ost3 (11 per car, (11 per truck
%otal 5ost3 1'.0 million E (11 G (1;& million
It #as not right, the stud! argued, to spend (1;& million of societ!s mone! to pro"ide a enefit
societ! "alued at onl! ()9.10 million.
%he most contro"ersial aspect pro"ed to e the #a! Fords accountants determined the total cost of
a human life as aout ('00,000.
Component 1971 Costs
Future $roducti"it! Losses
=irect (1;',000
Indirect ()1,;00
Cedical 5osts
:ospital (&00
8ther ()'0
$ropert! =amage (1,000
Insurance 4dministration (),&00
Legal and 5ourt (;,000
>mplo!er Losses (1,000
Hictims $ain and /uffering (10,000
Funeral (900
4ssets 6Lost 5onsumption7 (0,000
Ciscellaneous ('00
%8%4L $>? F4%4LI%I ('00,&'0
5ritical ne#spaper articles #ondered #ho could e-plain ho# the (10,000 figure for @pain and
sufferingA had een arri"ed at. 4s a matter of fact, it #as the federal go"ernment, not Ford, that set the
figure for a urn death. 4t that time 619&07, the go"ernment officiall! "alued a human life at ('00,000,
insurance companies "alued a serious urn in+ur! at (6&,000 and the a"erage residual "alue on
sucompacts #as (&00. Ford simpl! carried out a cost-enefit anal!sis ased on those currentl!
accepted figures.
8n Carch 1;, 1910, the >lkhart 5ount! +ur! found Ford not guilt! of criminal homicide in the 9lrich
case. Ford attorne! Deal summariJed se"eral points in his closing argument efore the +ur!. First, Ford
could ha"e sta!ed out of the small car market, #hich #ould ha"e een the @easiest #a!,A since Ford
#ould ha"e made more profit ! sticking to igger cars. Instead, Ford uilt the $into @to take on the
imports, to sa"e +os for 4mericans and to make a profit for its stockholders.A /econd, %he $into met
e"er! fuel-s!stem standard of an! federal, state or local go"ernment, and #as comparale to other
19&; sucompacts. %hird, the engineers #ho designed the car thought it #as a good, safe car and
ought it for themsel"es and their families. Fourth, Ford did e"er!thing possile ,uickl! to recall the
$into after D:%/4 ordered it to do so. Finall!, and more specificall! to the case at hand, :igh#a! ;;
#as a adl! designed high#a!, and the girls #ere full! stopped #hen a ),000-pound "an rammed into
the rear of their $into at least 00 miles per hour. <i"en the same circumstances, Deal stated, an! car
#ould ha"e suffered the same conse,uences as the 9lrichs $into.
The Utilitarian Principle and decision-making process
Utilitarianism sou*ht to pro,ide le*islators &ith a clear and scientific method for e,aluatin* le*islati,e options$
-n early leader of the utilitarian mo,ement+ Jeremy Bentham produced a boo. for le*islators entitled An
!ntroduction to the "rinciples of #orals and $egislation+ &hich laid out the utilitarian proposal to base moral
/ud*ments on the principle of utility$ 0By utility+1 &rote Bentham+ 0is meant that propriety in any ob/ect+
&hereby it tends to produce benefit+ ad,anta*e+ pleasure+ *ood+ or happiness (all this in the present case comes to
the same thin*)+ or (&hat comes a*ain to the same thin*) to pre,ent the happenin* of mischief+ pain+ e,il+ or
unhappiness to the party &hose interest is considered2 if that party be the community in *eneral+ then the
happiness of the community2 if a particular indi,idual+ then the happiness of that indi,idual$1 Bentham's first
definition claims that 0an action may be said to be conformable to the principle of utility 3 $$$ 4 &hen the
tendency it has to au*ment the happiness of the community is *reater than any it has to diminish it$1
The attractiveness of this formula is that it was uantifiable, or so %entham argues& one can add up all the
positive aspects of a decision, contrast them with all the negative aspects, and then make the decision on the
grounds of producing the greatest happiness for the greatest number of people. 'or %entham, the matter was
simple& pain is bad, pleasure is good. !f an action produces more pain than pleasure (again, for the greatest
number of people), then the only conseuence to be considered is the action*s tendency to produce pleasure and
avoid pain.
As articulated by #ill and %entham, utilitarianism aims not for the pleasure of the individual but the
greatest good for the greatest number of people. +efined by its later interprets, utilitarianism also rejects a
simplistic belief in pursuing the most pleasure possible in favour of the view that incorporates ualitative
standards and elevates pleasures of the mind over pleasures of the body. The term happiness seems to capture
this broadened sense best, and ,tilitarian philosophers sometimes call their principle the greatest happiness
principle.
"erhaps the classical advocate of utilitarian view, whose work ,tilitarianism contains the definitive
statement of this approach to ethics, is -ohn .tuart #ill. !n this work, he sums up the basic principle of
utilitarianism as follows&
%he creed #hich accepts as the foundations of morals 9tilit!, or the <reatest :appiness $rinciple, holds
that actions are right in proportion as the! tend to promote happiness, #rong as the! tend to produce
the re"erse of happiness. *! happiness is intended pleasure and the asence of painK ! unhappiness,
pain and the asence of pleasure.
$ike the ancient /reek philosopher 0picurus, utilitarian philosophers are hedonists, that is, they see
pleasure as the intrinsic good. Also like 0picurus, they argue that many factors enter into the estimation of the
pleasure1pain euation& the long1term effects of an action, its tendency to promoting additional pleasure rather
than producing pain, its certainty or uncertainty, and its intensity, duration, and the difficulty or ease of
achieving it. !n the second edition of !ntroduction to "rinciples of #orals and $egislation, %entham even
includes a bit of doggerel that he thought summed up his moral philosophy nicely&
!ntense, long, certain, speedy, fruitful, pure2
uch mar.s in pleasure and in pains endure$
uch pleasures see.+ if private by the end5
6f it be public+ &ide let them extend$
uch pains a,oid+ &hiche,er by thy ,ie&5
6f pains must come+ let them extend to fe&$
To apply correctly the utilitarian approach, one should avoid several possible misunderstandings of the
utilitarian principle. 'irst, the principle does not refer to that action which produces the most utility for the
person performing that action3 rather, an action is right if it produces the most utility for all persons affected by
the action (including the person performing the action). ,nlike 0picurus and other hedonists, the utilitarian
ethicists do not look towards an individual*s pleasure, but seek instead the greatest good for society as a whole.
They see themselves as social reformers who have tried, in some cases successfully, to influence legislation that
would promote the common good.
4or does the utilitarian principle say that an action is right so long as its benefits outweigh its costs. +ather,
utilitarianism holds that, in the final analysis, only one action is right& that one action whose net benefits are
greatest by comparison to the net benefits of all other possible alternatives.
'inally, the utilitarian principle does not reuire us to consider only the direct and immediate conseuences
of our actions. !nstead, both the immediate and all the foreseeable future costs and benefits, that each
alternative will provide for each individual, must be taken into account as well as any significant indirect effects.
These premises set forth a specific utilitarian approach of decision making, in three steps. 'irst, one must
determine what alternative actions or policies are available on that occasion. Thus, the 'ord managers were
implicitly considering two alternatives& to redesign the "into by putting a rubber bladder around the gas tank
and leave it as originally designed.
.econd, for each alternative action, one should estimate the direct benefits and costs that the action will
probably produce for every person affected by the action, in the foreseeable future. 'ord*s calculations of the
costs and benefits that all affected parties would have to bear if the "into design was changed and those that all
parties would have to bear if it was not modified, are examples of such estimates.
'inally, one must choose the alternative that produces the greatest total utility as the ethically appropriate
course of action. The 'ord managers decided that the course of action that would impose the lowest costs and
the greatest benefits would be to leave the "into design unchanged.
Why utilitarian ethic is so attractive
Utilitarian ethic is a ,ery attracti,e and familiar approach+ for se,eral reasons$ 6t matches nicely the common
sense ,ie&s that &e tend to ad,ocate &hen discussin* the choice of *o,ernment policies and public *oods$
Utilitarianism also seems to fit in rather neatly &ith the intuiti,e criteria that people employ &hen discussin*
moral conduct$ 7o&e,er+ occasionally utilitarianism leads to perple8in* conclusions+ from the ,ie&point of
common sense$ %raditional utilitarians &ould deny+ for e8ample+ that dishonesty or theft is necessarily al&ays
&ron*$ 6f in a certain situation more *ood conse(uences &ould flo& from bein* dishonest than from any other
act+ a person could perform in that situation+ then+ accordin* to traditional utilitarian theory+ dishonesty &ould be
morally ri*ht in that particular situation$
,tilitarianism is also the basis of the techniues of economic cost1benefit analysis. This type of analysis is
used to determine the desirability of investing in a project (such a dam, factory, or public park) by figuring
whether its present and future economic benefits outweigh its present and future economic costs. !f the monetary
benefits of a certain public project exceed the monetary costs, and if the excess is greater than the excess
produced by any other feasible project, then the project should be undertaken. !n this form of utilitarianism, the
concept of utility is restricted to monetarily measurable economic costs and benefits.
,tilitarianism fits nicely with a value that many people pri5e& efficiency. 0fficiency can mean different
things to different people, but for many it means operating in such a way that permits one to produce the most
one can with the resources at hand. That is, an efficient operation is one that produces a desired output with the
lowest resource input. .uch efficiency is precisely what utilitarianism advocates, because it holds that one
should always adopt the course of action that will produce the greatest benefits at the lowest cost. !f we read
desired output in the place of benefits and resource input in place of cost, then utilitarianism implies
that the right course of action is always the most efficient one.
This emphasis on the conseuences of human actions, ignoring their motives, also makes utilitarian
approach attractive for the common sense. !ntentions are invisible and most people use to dissimulate their real
motives, which rest always controversial. ($et us recall the 6ome 7epot or the #erck and river blindness cases.)
8n the contrary, the results of an action are uite visible and anyone can objectively assess their moral
character. 9et, this perspective often leads to uncertain and superficial value judgments. $et us say that a one kid
is drowning in a lake or river, not far from the bank, in shallow waters. 8ne drifter, passing by, assumes the kid
belongs to a wealthy family and, hoping to get a generous reward, jumps into the water and saves the kid*s life.
6is motives were not at all noble and morally worthy3 however, the drifter made everybody happy : the kid is
alive, his family relieved, and he got his pri5e. This was a good action from the utilitarian point of view. $et us
say now that a social activist spent a lot of time, money, and energy to prevent people drowning in that
dangerous spot, where many children had died in the past. 8ur man organi5ed marches in the street3 he
gathered hundreds of signatures on petitions addressed to the city council, hoping to determine the mayor and
the local authorities to take some effective measures, but he failed. 6is intentions were very honourable, of
course, but he got no results. 'rom a utilitarian perspective, good intentions and noble motivation are worthless,
as long as they do not lead to effective good conseuences. ;learly, say 7es-ardins and #c;all, this purely
conseuentialist approach to moral decision making reduces to accepting that the end justifies the means. #any
people find this aspect of utilitarianism troubling.
easurement difficulties with the utilitarian approach
Besides commonsense perple8ities+ utilitarian ethic is ,ulnerable to se,eral theoretical criticisms$ 9ne ma/or set
of problems &ith utilitarianism centres on the difficulties encountered &hen tryin* to measure utility$
:omparati,e measures of the ,alues thin*s ha,e for different people cannot be made5 thus+ there is no &ay of
.no&in* &hether utility &ould be ma8imi)ed by one action rather than by all the others$ 6f &e cannot .no&
&hich actions &ill produce the *reatest amounts of utility+ then &e cannot apply the utilitarian principle$ uppose
you and 6 &ould both en/oy *ettin* a certain /ob$ 7o& can &e fi*ure out &hether the utility you &ould *et out of
ha,in* the /ob is more or less than the utility 6 &ould *et out of ha,in* it; <ach of us may be sure that he or she
&ould benefit most from the /ob+ but because &e cannot *et into each other's s.in+ this /ud*ment has no
ob/ecti,e basis$
.ome benefits and costs seem intractable to measurement. 6ow, for example, can one measure the value of
health or life< .uppose that installing an expensive exhaust system in a workshop will eliminate a large portion
of certain carcinogenic particles that workers might otherwise inhale. .uppose that as a result some of the
workers probably will live = years longer. 6ow is one to calculate the value of those years of added life, and how
is this value to be uantitatively balanced against the costs of installing the exhaust system< The 'ord
managers, when considering the deaths that the "into design would cause, decided that a human life was worth
>?@@,@@@ (in ABC@ dollars). %ut doesn*t the price they assigned to a life seem arbitrary and doesn*t the attempt
to price life seem morally inappropriate<
%ecause many of the benefits and costs of an action cannot be reliably predicted, they also cannot be
adeuately measured. The beneficial or costly conseuences of basic scientific knowledge are notoriously
difficult to predict. 9et suppose that one has to decide how much to invest in a research program that will
probably uncover some highly theoretical, but not immediately usable, information about the universe. 6ow is
the future value of that information to be measured, and how can it be weighed against either the present costs
of funding the research or the more certain benefits that would result from putting the funds to an alternative
use, such as adding a new wing to the local hospital or building housing for the poor<
!t is unclear what is to count as a benefit and what to count as a cost. This lack of clarity is especially
problematic with respect to social issues that are getting significantly different evaluations by different cultural
and social groups. .uppose a bank must decide whether to extend a loan to the manager of a local pornographic
theatre or to the manager of a bar that caters the homosexuals. 8ne group of people may see the increased
enjoyment of pornography connoisseurs or the increased enjoyment of gays as benefits accruing to society.
Another group, however, may see these as harmful and hence as costs.
,tilitarianism must assume that all goods are tradable for some uantity of any other good because it holds
that there is some scale on which all goods can be measured. %ut there are some non1economic goods : such as
life, love, freedom, euality, health, beauty : whose value is such that no uantity of any economic good is eual
in value. To sum up& the critics of utilitarianism contend that these measurement problems undercut whatever
claims utilitarian theory makes to providing an objective basis for determining normative issues.
The defenders of utilitarianism have an array of replies ready to counter the measurement objections
enumerated. Although utilitarianism ideally reuires accurate uantifiable measurements of all cost and
benefits, this reuirement can be relaxed when such measurements are impossible. Dhere uantitative data are
unavailable, one may legitimately rely on shared and commonsense judgments of the comparative values things
have for most people. De know that, by and large, cancer is a greater injury than a cold, no matter who has the
cancer and who has the cold. A steak has a greater value as food than a peanut, no matter whose hunger is
involved.
The utilitarian can also point to several commonsense criteria that can use to determine the relative values
that should be given to various categories of goods. 8ne commonsense criterion depends on the distinction
between instrumental goods : things considered valuable only because they lead to other good things (e.g., a
painful visit to the dentist) : and intrinsic goods : things desirable independent of any other benefits they may
produce. (0.g., health is an intrinsic good, desired for its own sake.) !t is clear that intrinsic goods take priority
over instrumental goods. ,nder most circumstances money, which is an instrumental good, must not take
priority over life and health, which have intrinsic values. According to this statement, 'ord managers did wrong
deciding to save money instead of human lives.
A second commonsense criterion that can use to weigh goods is the distinction between needs and wants. To
say that someone needs something is to say that without it, that person will be harmed in some way. "eople*s
basic needs consist of their needs for things without which they will suffer some fundamental harm such as
injury, illness, or death. To say that a person wants something is to say that the person desires it, because she
thinks that thing will advance her interests in some way. A need, of course, may also be a want. #any wants,
however, are not needs, but simply desires for things without which the individual would not suffer any
fundamental harm. ! may want something simply because ! enjoy it, even though the object of my desire is a
luxury ! could as well give up without any serious damage to my life. 7esires of this sort, that are not needs, we
call mere wants. !n general, satisfying a person*s basic needs is more valuable than satisfying his or her mere
wants.
These commonsense methods of weighing goods are only intended to aid us in situations where uantitative
methods fail. !n fact, the conseuences of many decisions are relatively amenable to uantification : and this is
the utilitarian*s second major reply to the measurement objections previously outlined. The most flexible method
of providing a common uantitative measure for the benefits and costs associated with a decision is in terms of
their monetary euivalents. !n essence, this implies that the value a thing has for a person can be measured by
the price the person is willing to pay for it. To determine the average values items have for a group of people,
one need merely look at the average prices given to those items when everyone may bid for them on open
markets. !n short, market prices can serve to provide a common uantitative measure of the various benefits and
costs associated with a decision.
A standard objection against using monetary values to measure all costs and benefits is that some goods, in
particular health and life, cannot price. .teven Eelman argues that placing a dollar value on some goods
reduces their perceived value, because they are valued precisely because they cannot be bought and sold in a
market. 'riendship and love are obvious examples. F!magine the reaction, Eelman observes, Fif a practitioner
of cost1benefit analysis computed the benefits of sex based on the price of prostitute service. +ichard #.
Titmuss very perceptively compares the American system of blood collection with that of the %ritish. !n the
,nited .tates, about half of all blood is purchased from donors and sold to people who need transfusions. The
%ritish system, by contrast, is purely voluntary. 4o one is paid for donating blood, and it is provided without
charge to anyone in need. As a result, the giving of blood and blood itself have an entirely different significance.
!f blood has a price, then giving blood merely saves someone else an expense, but blood that cannot be bought
and sold becomes a special gift that we make to others.
The utilitarian may argue that not only is it possible to put a price on health and life but that we do so
almost daily. Anytime people place a limit on the amount of money they are willing to pay to reduce the risk that
some event poses to their lives, they have set an implicit price on their own lives. .uppose that people are willing
to pay >= for a piece of safety euipment that will reduce the probability of their death in a car crash from .
@@@@= to .@@@@G, but they are unwilling to pay any more than that. Then, in effect, they have implicitly decided
that .@@@@A of a life is worth >= : or, in other words, a life is worth >=@@,@@@. .uch pricing is inevitable and
necessary so long as we live in an environment in which risks to health and life can be lowered only by giving up
(trading off) other things that we may want and on which we set a clear price. According to %uchhol5 and
+osenthal,
%here are at least fi"e #a!s of determining the "alue of a human life3 617 calculating the present "alue of
estimated future earnings that are forgone due to premature deathK 6'7 calculating the present "alue of
the losses others e-perience ecause of a persons deathK 6;7 e-amining the "alue placed on an
indi"idual life ! presentl! estalished social policies and practicesK 6)7 using the @#illingness to pa!A
method #here people are asked ho# much the! #ould e #illing to pa! to reduce the proailit! of their
death ! a certain amountK and 607 looking at the compensation people accept as #age premiums for
dangerous +os or haJardous occupations.
Dhere market prices are incapable of providing uantitative data for comparing the costs and benefits of
various decisions, other sorts of uantitative measures are available. .hould people disagree, for example, as
they often do, over the harmful or beneficial aspects of various sexual activities, then sociological surveys or
political votes can be solutions to measure the intensity and extensiveness of people*s attitudes. 0conomic
experts can also provide informed judgments of the relative uantitative values of various costs and benefits.
Thus, the utilitarian will grant that the problems of measurement encountered by utilitarianism are serious
enough. 6owever, they are at least partially soluble by the various methods enumerated.
Utilitarian difficulties with human rights and social !ustice
%here are+ ho&e,er+ other criticisms of utilitarian ethic$ %he ma/or difficulty &ith utilitarianism+ accordin* to
some critics+ is that it is unable to deal &ith t&o .inds of moral issues2 those relatin* to ri*hts and those relatin*
to /ustice$ %hat is+ the utilitarian principle implies that certain actions are morally ri*ht+ &hen in fact they are
un/ust or ,iolate people's ri*hts$
.uppose that your uncle has an incurable and painful disease, so that he is uite unhappy but does not
choose to die. Although he stays in hospital and will die within a year, he continues to run his chemical plant.
%ecause of his own misery, he deliberately makes life miserable for his workers and has insisted on not
installing safety devices in his chemical plant, although he knows that as a result one life will certainly be lost
over the next year. 9ou, his only living relative, know that on your uncle*s death you will inherit his business and
not only will you be wealthy and immensely happy, but you also intend to prevent any future loss of life by
installing the needed safety devices. 9ou are cold1blooded and correctly judge that you could secretly murder
your uncle without being caught and without your happiness being in any way affected by it afterward. !f it is
possible for you to murder your uncle without in any way diminishing anyone else*s happiness, then, according
to utilitarianism, you have a moral obligation to do so. %y murdering your uncle, you are trading his life for the
life of the workers, and you are gaining your happiness while doing away with his unhappiness and pain : the
gain is obviously on the side of utility. 6owever, the critics of utilitarianism claim, it seems uite clear that the
murder of your uncle would be a gross violation of his right to life. ,tilitarianism has led us to approve an act of
murder that is an obvious violation of an individual*s most important right. (!t would be only fair to utilitarian
ethics to submit that no utilitarian would ever go as far to justify murder as a way to obtain utility. ;ritics of
utilitarianism use to invent weird hypothetical stories, pushing things to the limits, rarely, if ever, met in real life.
6owever, it is no less true that these weird stories force utilitarian thinking to be consistent, showing that,
rigorously applied, the utilitarian principle leads to reprehensible conclusions.)
4or justice does better in a utilitarian approach, critics say. .uppose that subsistence wages force a small
group of migrant workers to continue doing the most undesirable jobs in an economy, but produce immense
amounts of satisfaction for the vast majority of society*s members, because they enjoy cheap vegetables and
savings that allow them to indulge other wants. .uppose also that the amount of satisfaction thereby produced,
when balanced against the unhappiness and pain imposed on the small group of farm workers, results in a
greater net utility than would exist if everyone had to share the burdens of farm work. Then, according to the
utilitarian criterion, it would be morally right to continue this system of subsistence wages for farm workers.
6owever, to the critics of utilitarianism, a social system that imposes such uneual sharing of burdens, is clearly
immoral and offends against justice. The great benefits the system may have for the majority does not justify the
extreme burdens that it imposes on a small group.
The shortcoming this counterexample reveals is that utilitarianism allows benefits and burdens to be
distributed among the members of society in any way whatsoever, so long as the total amount of benefits is
maximi5ed. !n fact, some ways of distributing benefits and burdens are unjust regardless of how great the store
of benefits such distributions produce. ,tilitarianism looks only at how much utility a society produces and fails
to take into account how that utility distributes among the members of society.
To see more clearly how utilitarianism ignores considerations of justice and human rights, consider how
'ord*s managers dealt with the "into*s design. 6ad they decided to change the "into*s design and add >AA to the
cost of each "into, they would, in effect, have forced all the buyers of the "into to share in paying the >AHC
million that the design change would cost. 0ach buyer would pay an eual share of the total costs necessitated
by this aspect of the "into design. 6owever, by not changing the "into*s design, the 'ord managers were in
effect forcing the AI@ people who would die to absorb all the costs of the "into design. .o we should ask& !s it
more just to have AI@ buyers bear all the costs of the "into design by themselves, or is it more just to distribute
the costs eually among all buyers< Dhich is the fairest way of distributing these costs<
;onsider, next, that when 'ord*s managers decided to make no change to the "into*s design, they were not
only making the "into cheaper, they were also building a car with a certain amount of risk (to life). Those who
drove the "into would be driving a car that posed a slightly greater risk to life than they might have reasonably
assumed it posed. !t is possible that drivers of the "into would have gladly accepted this slightly added risk to
life in exchange for the lower price of the car. 6owever, they had no choice in the matter, because they did not
know the car carried this added risk. .o that we should ask, 7o people have the right to know what they are
buying when they choose to purchase a product< 7o people have a right to choose whether to have greater risk
added to their lives< 7id the makers of the "into violate this basic right of customers to freely choose for
themselves whether to accept a riskier car in return for a lower price<
"ule utilitarianism
%o deal &ith this sort of countere8amples+ utilitarian ethicists ha,e proposed an important and influential
alternati,e ,ersion of utilitarian ethic = rule-utilitarianism$ 06n contrast &ith the position of act utilitarians+ rule
utilitarians hold that rules ha,e a central position in morality that cannot be compromised by the demands of
particular situations$1 %he basic strate*y of rule utilitarianism is to limit utilitarian analysis to the e,aluations of
moral rules$ >hen tryin* to determine &hether a particular action is ethical+ one is ne,er supposed to as.
&hether that particular action &ill produce the *reatest amount of utility$ 6nstead+ one is supposed to as. &hether
the action complies &ith the correct moral rules that e,eryone should follo&$ 6f the action is demanded by such
rules+ then one should carry out the action$ But &hat are the 0correct1 moral rules; 9nly the second (uestion is
supposed to be ans&ered by reference to ma8imi)in* utility$ %he correct moral rules are those that &ould
produce the *reatest amount of utility if e,eryone &ere to follo& them$
+ule utilitarian theory has two parts, which can summari5e in the following two principles& 'irst, an action
is right from an ethical point of view if and only if the action were demanded by those moral rules that are
correct. .econd, a moral rule is correct if and only if the sum total of utilities produced if everyone were to
follow the rule is greater than the sum total of utilities produced if everyone were to follow some alternative rule.
The fact that a certain action would maximi5e utility on one particular occasion does not show that it is right
from an ethical point of view.
Applying this two1steps strategy, rule utilitarianism hopes to escape the counterexamples imagined by its
critics. The counterexample involving the rich uncle and the murderous heir is a situation that deals with killing
a sick person. !n such situations, it is clear that a moral rule that forbids killing without the due process of law
will produce, over the long run, greater utility for society than other kinds of rules. Therefore, such a rule is the
correct one to apply to the case. !t would be wrong for the heir to kill his uncle because doing so would violate a
correct moral rule, and the fact that, on this particular occasion, murder would maximi5e utility is irrelevant.
The case dealing with subsistence wages should approach similarly. !t is clear that a rule that forbade
unnecessary subsistence wages in societies, over the long run, would result in more utility than a rule that
allowed them. .uch a rule would be the correct rule to invoke when asking whether practicing wage slavery is
morally acceptable and the practice would then be rejected as ethically wrong, even if it would maximi5e utility
on a particular occasion.
,nfortunately, rule utilitarianism cannot escape a deadly alternative& !f they claim that one should always
follow a morally correct rule, even in those situations in which breaking the rule maximi5ed utility, rule
utilitarians give up the utilitarian principle and adopt the viewpoint of a different theory that we shall analy5e in
the next section. !f they stick to the utilitarian principle, rule utilitarians must submit that rules that allow
(beneficial) exceptions will produce more utility than rules that do not allow any exceptions. 6owever, once a
rule allows these exceptions, it will allow the same injustices and violations of rights that traditional
utilitarianism allows. !n other words, rule1utilitarianism is traditional (case1by1case) utilitarianism in disguise.
.hall we conclude that utilitarian approach does not work< 4ot at all : it works, but the method should
apply carefully and thoroughly. 7e /eorge teaches us how we should carry out the utilitarian analysis towards
the most plausible conclusions.
UTILITARIANISM AND BRIBERY
4n airplane manufacturer has spent a great deal of mone! de"eloping a ne# airplane. %he compan!
adl! needs cash ecause it is financiall! o"ere-tended. If it does not get some large orders soon, it #ill
ha"e to close do#n part of its operation. =oing that #ill put se"eral thousand #orkers out of +o. %he
result #ill e disastrous not onl! for the #orkers, ut also for the to#n in #hich the! li"e. %he president
of the compan! has een tr!ing to interest the go"ernment of a foreign countr! in a large purchase. :e
learns that one of the ke! go"ernmental ministers in charge of making the final decision is hea"il! in
det ecause of gamling. :e ,uietl! contacts that minister and offers him (1 million in cash if he
a#ards the contract for fi"e planes to his firm. %he mone! is paid and the contract is a#arded. %he
president argues that his action is +ustifiale ecause the usiness, the #orkers +os, and the to#n
#ere all sa"edK the minister #as ale to pa! his detsK and the foreign countr! recei"ed the planes it
needed. %he good produced, he argues, is greater than an! harm done ! the pa!ment to the minister.
Is he correctB
%he argument appears to e a utilitarian one in that it seeks to e"aluate the results of the action,
#eighs the good against the ad, and argues that the good out#eighs the ad. %he alternati"e #ould
ha"e een not to gi"e the rie. *ut if it had not een gi"en, then the contract might not ha"e een
a#arded. If it had not een a#arded, then all of the ad conse,uences indicated #ould ha"e taken
place. Do good #ould ha"e een achie"ed, and the result #ould clearl! ha"e een #orse.
%he argument ma! sound plausile. De"ertheless, #e elie"e that rier! is immoral. Is it that
9tilitarianism does not #ork in this caseB %he repl! is that it #orks, ut it has not een properl! used
here. %he foregoing account is o"iousl! a one-sided "ersion of the situation. It descries the thinking of
the president of the compan!, his point of "ie#, and his concerns, #hich, here, are not the same as the
moral point of "ie#. %he moral point of "ie# is o+ecti"e and considers all the conse,uences of an
action for all the people affected ! it. .e must therefore take into consideration much more than #hat
#e ha"e so far. .e must roaden the picture, look more closel! on the people alread! mentioned, and
then open our "ision to those #hom #e ha"e so far ignored.
8ur first step is to state precisel! #hat #e #ish to e"aluate. %he president used a truncated act
utilitarian approach. %r! to state the rule he is implicitl! ad"ocating. Is it that all firms should e allo#ed
to rie go"ernment officials #hen the! ha"e the opportunit! to do soB %he president puts great
emphasis on the negati"e conse,uences of not getting the contractK therefore, perhaps the rule is that
onl! firms in financial difficult! should e allo#ed to rie go"ernment officials. If the compan! is in
financial difficult! as the result of poor management, perhaps the rule is that onl! poorl! managed
companies should e permitted to rie go"ernment officials. Done of these rules sounds plausile. %he
dominant consideration in e"aluating all of them is the harm done to the system of doing usiness, to
the other competing firms and their emplo!ees, and to the integrit! of go"ernment officials. If the action
is clearl! descried as a rule for all firms similarl! placed, #e immediatel! see that #e do not need a
detailed anal!sis.
>"en if #e accept the presidents approach, ho#e"er, a full e-amination of the conse,uences of his
action #ill sho# the action to e morall! un+ustifiale. First, #hat are the conse,uences of the rie for
the pulic officialB %he onl! conse,uence #e ha"e considered so far is that he gets the mone! he
needs and gi"es a contract to the compan! in ,uestion. .hat are the chances that the rie #ill e
disco"ered, and #hat #ill the conse,uences e if it is disco"eredB *rier! is illegal in most countries. If
the pulic officials action is disco"ered, he #ould in all likelihood e charged #ith a felon!, lose his +o,
and, if con"icted, e hea"il! fines L or go to +ail. .ill his life e etterB If he is not found out, he ma! e
lackmailed. :e ma! also e tempted to li"e e!ond his means and end up in a similar situation again.
:e #ill ha"e to e-plain #here he got the mone! to his #ife, and perhaps to others. :e #ill not report it
on his income ta- and #ill thus e liale for not reporting income. .e can continue to consider #hat
might happen to him and tr! to e"aluate ho# likel! these things are to occur, ho# seriousl! the! #ill
affect him, and so on.
%he good done to the #orkers, plant, and to#n ha"e to e gi"en their due #eight. *ut the stor! does
not mention competing firms. .hat is their situationB .ill their #orkers e out of +osB .ill their to#ns
e depressedB 5onsider the president of the compan!. :o# #ill he manage to pa! (1 millionB .here
#ill it come fromB :o# #ill he pa! it #ithout its eing recorded and reported to the Internal ?e"enue
/er"ice and to the compan! auditorsB For this pro+ect to succeed, it is clear that the president #ill ha"e
to reak more la#s than the la# against rier!. 4ll of his actions #ill ha"e their effects. If his actions
are found out, he #ill e held liale, ma! lose his +o, and ma! e imprisoned.
5onsider ne-t the effects on the general pulic. %he go"ernment official is spending their mone!. If
he is not u!ing the est e,uipment at the est price he can get, then he is misusing pulic funds and
hence harming the ta-pa!ers. If the airplanes he contracted for #ere the ones he #ould purchase
an!#a!, then #hat #as the point of the rieB *ut e"en if he #ould ha"e placed the order #ith that firm
#ithout a rie, the (1 million he recei"ed had to come from some#here. >ither it #as added to the cost
of the planes he purchased and there! came from ta-pa!ers, or it came from the compan!s profits
and there! came from the shareholders. In either case, the mone! #as taken from those #ho had
legitimate claim to it, and the! #ill e negati"el! affected to that e-tent.
%he rie also had an effect on the general s!stem of idding, on the practice of competition, and
on the integrit! of those engaged in these practices. 8nce rier! is an accepted #a! of doing
usiness, people #ill no longer get the est "alue for their mone!. =oes the good done to the person
#ho recei"es the rie and to the person #ho gi"es it out#eigh the possile harm done to them if the!
are caughtB .hat aout the certain harm done to those #ho must pa! more, or #ho recei"e less profit,
and to the s!stem as a #holeB
If #e dout #hether the practice of rier! does more harm than good, #e need onl! consider #h! it
is not carried on openl!. .h! is the gi"ing of a rie not considered a legitimate part of doing usinessB
%he o"ious reason is that a fe# people enefit from the practice ut at the e-pense of a great man!
other people, including societ! and usiness in general.
%he argument is a utilitarian one. .e did not attempt an! e-act ,uantitati"e e"aluation of good and
ad results. *ut in our reasoning #e did consider conse,uences for all those in"ol"ed, and #e a"oided
aritraril! cutting off the conse,uences to e considered.
%he presidents account did not consider all those affected ! the action. :e ended his in"estigation
of the conse,uences at the point most suitale to him. 8"iousl!, the use of the utilitarian calculation
does not pro"ide an automatic guarantee of moralit!. %o produce a morall! +ustifiale result, it must e
used ! someone #ho trul! #ishes to find out #hat is right and #ho impartiall! takes into account the
immediate and future conse,uences for all concerned. M. . .N
%he mid-19&0s #itnessed ma+or international scandals concerning ries, kickacks, and illegal
campaign contriutions, oth in the 9/ and aroad. Lockheed 5orp, among others, #as in"ol"ed in
gi"ing (1'.0 million in ries and commissions in connection #ith the sale of ();0 million #orth of
%ri/tar planes to 4ll Dippon 4ir#a!s. 5arl Ootchian, #ho later defended his pa!ments in an article in the
/aturda! ?e"ie#, #as forced to resign from his position after the ne#s of the pa!offs roke. =efenders
of the pa!ments claimed that the practice #as not onl! common in Japan ut #as also e-pected.
Donetheless, the ne#s rocked Japan e"en more than it did in the 9/. %he prime minister of Japan,
Oakuei %anaka, and four others #ere forced to resign from go"ernment and #ere rought to trial.
Legislation attempting to control rier! #as proposed oth in the 9/ and Japan, and some of it
passed. %he results of rier! #ere far-reaching. *ut the Lockheed case #as not a simple one.
Lockheed did not offered rieK rather, the Japanese negotiator demanded it. 4re those #ho accede to
rier! as guilt! as those #ho demand riesB =o the same moral oligations e-ist in dealing #ith a
corrupt go"ernment as in dealing #ith an honest oneB If the people of a countr! tolerate rier! among
their officials, do the! in effect consent to the s!stemB If the pa!ing of such commissions is the sine ,ua
non of doing usiness #ith the go"ernment, is it morall! +ustifialeB %hese are comple- ,uestions, the
ans#ers to #hich are not deducile from the general claim that rier! is immoral.
9tilitarianism, far from eing a self-ser"ing approach to moral issues, demands careful, o+ecti"e,
impartial e"aluation of conse,uences. It is a #idel! used P ut often misused P approach to moral
e"aluation. 4s a po#erful tool of moral reasoning, it is a techni,ue #ell #orth mastering.
Cases
1$ - head of the department in a company prefers to hire in his department a friend rather than other better
(ualified applicants$ 6s this correct; -pproach the problem from an utilitarian point of ,ie&$
2$ -n employee of a food company learns that one of the in*redients used in many food products sold by that
company is harmful for the consumer's health and the product's instructions for use do not contain any &arnin*s about that$
%he le*islation does not contain anythin* about that in*redient$ >hat should the employee do; -pproach the problem from
an utilitarian point of ,ie&$
3$ - consultin* en*ineer disco,ers a defect in a structure that is about to be sold$ 6f the o&ner &ill not disclose the
defect to the potential purchaser+ should the en*ineer do so; -pproach the problem from an utilitarian point of ,ie&$
4$ - company has to hire a person for a position+ and the super,isor responsible to fill the position .no&s a person
,ery fitted for the /ob+ &ho happens at the moment to be a,ailable$ But the company?s policy has been to announce and
publici)e all openin*s+ *i,in* persons in and out of the company a chance to apply$ hould the mana*er &aste time by *oin*
throu*h the usual search process or should he ma.e an e8ception to company policy in this case and ma.e an offer;
-pproach the problem from an utilitarian point of ,ie&$
@$ Because of economic problems+ the mana*ement of a company decides to do layoffs$ -lice+ the company?s 7A
mana*er+ has to fire one of the ten people in the department$ 6n order to decide &ho &ill be fired+ she or*ani)es a
competition$ -fter a ti*ht contest+ the last place is occupied by a &oman employee &ith children+ &ho has some serious
financial problems and poor hirin* prospects$ %he penultimate place &as occupied by am+ a youn* employee &ith much
better financial condition and hirin* prospects$ 6n spite of the competition results+ -lice is thin.in* about firin* am$ >hat
should she do; -pproach the problem from an utilitarian point of ,ie&$
#$ - former employee &ho &as fired due to poor (uality &or.+ absences+ and lateness related to her drin.in*
problem+ informs you that she has applied for a position at another company and has already *i,en your name as a
reference$ he desperately needs a /ob (she is a sin*le parent &ith three children)+ and she as.s you to *i,e her a *ood
recommendation and not mention her drin.in*+ &hich she assures you is no& under control$ >hat should you do; -pproach
the problem from an utilitarian point of ,ie&$
7$ -n employee re(uires a recommendation for a ne& /ob from his boss$ %he boss is satisfied &ith his employee's
&or.+ but he thin.s that in this /ob the employee doesn?t fit into the team and+ from this reason+ he &ants his employee to
lea,e the company$ 7e thin.s that in other company the employee &ill be better fitted and the ne& company can ta.e
ad,anta*e from his *ood &or.$ o+ the boss decides to *i,e to his employee a ,ery *ood recommendation+ better than
deser,ed$ 6s this decision ri*ht; -pproach the problem from an utilitarian point of ,ie&$
8$ 6n a small chemicals subsidiary of a bi* corporation an accident ta.es place$ %he accident does not harm the
en,ironment and inhabitants' health$ 7o&e,er+ the &or.ers' health &ould be seriously affected$ 6n spite of this+ the &or.ers
are reluctant to inform the parent company about the accident+ because they are &orried that the corporation mana*ement
&ould decide to close the subsidiary and they &ould lose their /obs$ 7arry is a chemist in the company$ -lthou*h his health
and the en,ironment are not endan*ered+ he is thin.in* about informin* the top mana*ement of corporation about the
accident+ in order to protect the &or.ers$ >hat should 7arry do; >hat if 7arry is the subsidiary mana*er; -pproach the
problem from an utilitarian point of ,ie&$
B$ !y boss told me that one of my employees is amon* se,eral others to be laid off soon+ and that 6?m not to tell
my employee yet or he mi*ht tell the &hole or*ani)ation &hich &ould soon be in an uproar$ !ean&hile+ 6 heard from my
employee that he plans to buy some e8pensi,e *oods$ >hat should 6 do; -pproach the problem from an utilitarian point of
,ie&$
1"$ 6n many countries bribery is an accepted practice+ only ,ery seldom penali)ed$ 6t is ,ery difficult for bi* forei*n
companies that do business in these countries to ma.e profit &ithout bribin* the officials$ 6n these conditions+ should &e
accept practice of bribin*; -pproach the problem from an utilitarian (act- and rule-) and deontolo*ical point of ,ie&$ 6n
some cases+ bribes are *i,en only to speed up the le*al procedures necessary for startin* the business in a country$ hould
&e accept this specific practice; -pproach the problem from an utilitarian (act- and rule-) point of ,ie&$
11$ - super,isor finds out that an employee ma.es an unintended mista.e in the production process$ %he problem
is sol,ed and the super,isor considers that the employee &ould not repeat that mista.e$ 7e thin.s &hether the employee
should be sanctioned$ hould the super,isor impose some disciplinary sanctions upon the employee; Ciscuss the problem
from an act- and rule-utilitarian point of ,ie&$