Utilitarianism

Case Study – Ford Motor Company

During the last decades of the twentieth century, Ford Motor Company began losing
market share to Japanese companies who were making compact, fuel-efficient cars. Lee
Iaccoca, Ford’s president at the time, determined to regain its share of the market by
quickly developing a small car called the Pinto.
The Pinto would weigh less than 2,000 pounds, cost less than $2,000, and be on market
within 2 years instead of the normal 4 years. Because the Pinto was a rush project, styling
considerations dictated engineering design to a greater degree than usual.
In particular, Pinto’s styling required that the gas tank be placed behind the rear axle that
had protruding bolts. In that position, the tank could be punctured by the rear-axle bolts if
a rear-end collision pushed it against the axle. When an early model of the Pinto was crash-
tested, it was found that, when struck from behind at 20 miles per hour or more, the gas
tank would sometimes break open. Gas would then spray out and enter the passenger
compartment as well as under and around the car.
In a real accident, stray sparks could explosively ignite the spraying gasoline and fire might
engulf and burn the occupants, particularly if, as often happened in accidents, the doors
jammed, trapping the victims.
Case Study – Ford Motor Company …
Ford managers decided, nonetheless, to go ahead and manufacture the Pinto
without changing the gas-tank design. There had several reasons for their decision.
First, the design met all the legal and government standards then in effect. At the
time, government regulations required that a gas tank only remain intact in a rear-
end collision of less than 20 miles per hour.
Second, Ford managers felt that the car was comparable in safety to several of the
cars other companies were making and putting on the market.
Third, according to an internal cost–benefit study by Ford, modifying the Pinto
would be more costly than leaving its design unchanged.
• The study stated that approximately 12.5 million of the autos would eventually be
built. Modifying the gas tank of each Pinto would cost about $11 a unit.
• The total costs of modifying all the Pintos the company planned to build, then,
were simple to calculate:
Costs: $11 x 12.5 million autos = $137 million
Case Study – Ford Motor Company …
• What benefits would customers derive from the $137 million they would have to
pay if the Pinto’s gas tank was modified? Statistical data showed that modifying
the gas tank could prevent the future loss of about 180 burn deaths, 180 serious
burn injuries, and 2,100 burned vehicles.
• At the time (1970), the government valued a human life at $200,000, a figure it
needed to use to decide whether to spend money on a project that might save
several lives or spend it on some other project that might save several million
tax dollars.; Insurance companies valued a serious burn injury at $67,000 when
they paid for losses due to burns (including the losses of pain and suffering); and
the average residual value on subcompacts was estimated at $700.
• Therefore, in monetary terms, modifying the gas tank would have the benefit of
preventing losses that added up to a total value of only $49.15 million.:
• Benefits:
(180 deaths x $200,000) + (180 injuries x $67,000) + (2,100 vehicles x $700) = $49.15 million
Case Study – Ford Motor Company …
• Thus, if the car’s gas tank was modified, customers would have to pay $137
million for a benefit worth $49.15 million, for a net loss of $87.85 million.
• It was not right, the Ford study argued, to have society invest in a “fix” of the
Pinto’s gas tank that would result in a greater loss than leaving things as they
were.
• That is, although making no changes to the Pinto’s design would result in losses of
about $49.15 million, this was less than the net loss of $87.85 million that would
be the consequence of changing the design.
• Ford managers went ahead and produced the Pinto without modifying its gas
tank. It is estimated that in the decade that followed about 60 persons died in
fiery accidents involving Pintos and that at least twice that many suffered severe
burns over large areas of their bodies, many requiring years of painful skin grafts.
• Ford, however, kept the Pinto on the market until 1980.
Utilitarian approach
• Utilitarian standard of morality - Utilitarianism is the moral view that in any situation
the right course of action is the one that will provide people with the greatest amount of
benefits while minimizing harms.
• Ethic of care that emphasizes the value of human relationships and of caring for the well-
being of those who are dependent upon us.
• Utilitarianism A general term for any view that holds that actions and policies should be
evaluated on the basis of the benefits and costs they will impose on society.
• Utilitarianism holds that the morally right course of action in any situation is the one
that, when compared to all other possible actions, will produce the greatest balance of
benefits over costs for everyone affected.
• Term utilitarianism is used for any theory that advocates selection of that action or policy
that maximizes utility.
• Utilitarianism is not a theory of calculated selfishness: it is a theory that says that we
should strive to do what is best for everyone in society, and that we do what is best for
everyone when we take into account all the benefits and harms that everyone will bear
as the result of our actions.
Traditional Utilitarianism
• Jeremy Bentham (1748–1832) and John Stuart Mill (1806–1873) are
generally considered the founders of traditional utilitarianism.
• “An action is right from an ethical point of view, if and only if, the
sum total of utilities produced by that act is greater than the sum
total of utilities produced by any other act the agent could have
performed in its place”
• Utilitarianism assumes that any benefits or costs an action can
produce can be measured on a common quantitative scale and then
added or subtracted from each other.
Jeremy Bentham’s Utilitarianism
• Father of Utilitarianism
• Later criticized by his wayward
disciple, John Stuart Mill
• Similar to Hedonism, as both center
on pleasure as the good
• However, Greek Hedonism is essentially
egoist in nature; while Utilitarianism is
social in nature
Bentham’s Formulation of Utilitarianism
• Man is under two great masters, pain and pleasure.
• The great good that we should seek is happiness. (a hedonistic
perspective)
• Those actions whose results increase happiness or diminish pain are good.
They have “utility.”
• Bentham assumes that we humans are all governed by the desire for
pleasure and the aversion to pain.
• He seeks to give advice on how one should pursue the goal of pleasure.
• However, he did not rule out the possibility of altruism
• His advice on pursuing pleasure is called the Calculus of Felicity
Bentham’s Hedonistic Calculus
Calculus of Felicity –
Made up of seven categories intended to provide a rational analysis of pleasure.
Whenever one considers performing any action one can analyze its value in terms
of the Calculus of Felicity and contrast it with alternatives.
1. Intensity: How intense is the pleasure?
2. Duration: How long does it last?
3. Certainty: How sure is the pleasure?
4. Propinquity: How soon will it occur?
5. Fecundity: How many more?
6. Purity: How free from pain is the pleasure?
7. Extent: How many people are affected?
Note: It is this category that makes utilitarianism a form of social hedonism. One must consider
the pleasures and pains of other people. This is what allows for the possibility of altruism in
utilitarianism.
John Stuart Mill’s Utilitarianism
Wayward disciple of Bentham
• Concerned that a utilitarian might
actually conclude that a game of push-
pin really was better than poetry

• He sought to rewrite utilitarianism in

such a way that he would be able to
demonstrate that Shakespeare
outranked push-pin
Mill’s Utilitarianism
• Part of the problem, according to Mill, is the Calculus generates a
purely quantitative analysis, and pays no attention to the “quality” of
the pleasure.
• Mill feared that over time, the Calculus of Felicity would gradually erode
culture, leaving behind a society of belching, beer-swilling Nascar enthusiasts
• In order to combat this “lowering” of culture, Mill differentiated
between “lower desires” and “higher desires”
• Lower desires (food, sleep, etc.) may be dealt with using the Calculus
• Higher desires, on the other hand, may only be discussed in terms of quality –
which Mill claimed no calculus could evaluate
Mill’s Utilitarianism …
• Unlike Bentham’s utilitarianism, which was democratic in nature,
Mill’s version is quite oligarchical (elitist; ruled by the few)
• Mill has famously stated, “The uncultivated cannot be competent
judges of the cultivated.”
• If one must demonstrate “competence” before one is granted a
vote, many issues would only allow a small minority the right to
voice an opinion
• Another problem? How does one define “quality?”
• Can we even come to a universally-agreed upon scheme to
determine what ranks as a “lower desire” and what is considered
a “higher desire?”
Four Theses of Utilitarianism
1. Consequentialism: The rightness of actions is determined solely by
their consequences.
2. Hedonism: Utility is the degree to which an act produces pleasure.
Hedonism is the thesis that pleasure or happiness is the good that
we seek and that we should seek.
3. Maximalism: A right action produces the greatest good
consequences and the least bad.
4. Universalism: The consequences to be considered are those of
everyone affected, and everyone equally
Two Formulations of Utilitarian Theory
1. Principle of Utility: The best action is that which produces the
greatest happiness and/or reduces pain.

2. Greatest Happiness: We ought to do that which produces the

Greatest happiness and least pain for the greatest number of
people.
Types of Utilitarianism
• Act Utilitarianism
• An Action is right if and only if it produces the greatest balance of pleasure
over pain for the greatest number. (Jeremy Bentham)

• Rule Utilitarianism
• An action is right if and only if it conforms to a set of rules the general
acceptance of which would produce the greatest balance of pleasure over
pain for the greatest number. (John Stuart Mill)
• Rule utilitarianism is not concerned with assessing individual acts but the
utility of a rule for action.
Types of Utilitarianism …
• Negative Utilitarianism
• While most forms of utilitarianism tend to be fixed on promoting the greatest
good for the greatest number, negative utilitarianism is focused on promoting
the least amount of evil (or harm) for the greatest number.
• Preference Utilitarianism
• This type of utilitarianism defines the good to be maximised as the fulfilment
of people’s preferences.
• The right action remains that which produces the best consequences but the
best consequences are those that satisfy personal preferences and can be a
variety of goods/values besides pleasure
Criticisms of Utilitarianism
1. There is a problem with distinguishing types and degrees of
happiness/pleasure. Is long-term contentment a lesser, equal or
greater type of happiness than short-term euphoria or ecstasy?
Bentham’s principle of utility requires a method of
calculating/measuring happiness, what we would call a ‘felicific
calculus’, but no such method has ever been developed and some
would suggest that happiness is immeasurable.
2. In utilitarianism, pleasure is neutral - the pleasure of a sadist is
equal to the pleasure of the altruist. Although a utilitarian could
easily argue that sadist acts often result in greater harm and altruist
acts in greater happiness, which would require the utilitarian to
condemn sadism and condone altruism.
Criticisms of Utilitarianism …
3. The greatest happiness of the greatest number leaves minorities in any
society at a distinct disadvantage. Utilitarianism in the strictest form
would allow slavery and torture of a few if it increased the happiness of
the population as a whole. A utilitarian would argue that a breach of
human rights on such a level would lead to tension and mistrust amongst
the general population so that slavery would be found to be morally
wrong and prohibited. It is necessary to ask if this is a good enough
reason for banning slavery?
4. Utilitarianism often requires action that is contrary to our ‘common
sense’ or intuition, especially with regard to sacrificing human beings for
the happiness of other human beings. It is argued that human beings
have an intrinsic value and should never be used as a means to an end or
viewed as expendable.
Criticisms of Utilitarianism …
5. Bentham’s utility theory gives significance to pleasure (happiness)
as the highest value but only suggests that the reason for this is
because human beings naturally desire it. Naturally desiring
something does not always mean it should be desired. Would the
world be a better place if we were all happy and fulfilled all of the
time? How would this affect the human experience?
6. The focus on consequences and results, which is central to
consequentialist theories, neglects motives and intention. It
dismisses their significance for determining the
rightness/wrongness of an action. To the utilitarian all that matters
is what actually happens - the act is judged alone.
Utilitarianism in Business
1. Consequentialism
• It is the understanding that the wrongness or rightness of actions is entirely
determined by their actions.
• Businesses can apply the concept of consequentialism in their operations
even though it may contradict the moral and ethical systems that are in
place.
• For instance, businesses that commit themselves to the principle of
consequentialism may encourage their employees to act as they wish as long as the
essential outcome will be to the benefit of the organization.
• Every business focuses on making and increasing more profits as its
primary goal, which may lead them to use the means, which may be
considered immoral, unethical or illegal.
• For example, a business may manufacture and sell substandard and unsafe products
in their quest for more.
Utilitarianism in Business …
2. Welfarism.
• Welfarism is the understanding that the wrongness or rightness of
operations depends on society’s conceptions of welfare or wellbeing.
• This aspect of utilitarianism suggests that actions are good for the
greatest wellbeing of the society or many people.
• Welfarism aims at maximizing every individual’s utilities.
• In business, the management may decide to increase the wages and benefits
of their employees if it improves the wellbeing or promotes the happiness of
their employees. In this regard, the business will be positively applying
utilitarianism when they can balance the principles of pleasure and pain and
how they can influence their performance.
Utilitarianism in Business …
3. Individualism
• The principle of individualism in utilitarianism holds that every individual,
as it is human nature, pursues happiness, thus, will engage in actions that
maximize utility.
• In this regard, businesses will take actions that bring them happiness.
• Happiness for businesses may include increased profits, increased
customer satisfaction levels, superior reputation, and improved employee
satisfaction levels, among others.
• By ensuring their employees are satisfied and happy at a personal
standard, the business will also be putting themselves on the path to
success.
Utilitarianism in Business …
4. Aggregation
• It is the notion that the wrongness or rightness of actions depends on
their ability to average the benefits brought to all individuals.
• Bentham’s perspectives on utilitarianism suggest that the
consequences of an action should bring happiness not only to an
individual but also the community around him or her.
• A business applying this element should engage in activities that
increase its profits while at the same time serve the best interests of
its customers, the community, and the government.
• For example, by selling quality and safe products, a business will be increasing
its intrinsic value while meeting the needs of their customers at the same
time.