What is Utilitarianism?

Robinhood Learn
Democratize Finance For All. Our writers’ work has appeared in The Wall Street Journal, Forbes, the Chicago Tribune, Quartz, the San Francisco Chronicle, and more.
Definition:

Utilitarianism is the philosophical idea that decisions should be made to maximize the good that results from them, equally considering the impact on everyone.

🤔 Understanding utilitarianism

Utilitarianism is an idea in moral philosophy that views the rightness or wrongness of an action through the lens of its consequences. It suggests that people should make decisions that generate the greatest happiness for society. Under utilitarian philosophy, decisions should treat all people equally when considering its consequences. In other words, people should not put their own interests above others. Instead, they should make decisions that affect other people from a position of neutrality — No one should get special treatment. This idea is the opposite of egoism, which puts self-interest at the center of decision making.

Example

Imagine someone winning a billion dollars in the lottery. This person must choose what to do with their new fortune. Under a utilitarian philosophy, the person should strive to do the most good that they can with this money. Perhaps they’d reason that no one should die of starvation, and donate the money to a charity that feeds the hungry, rather than keep it for their own wealth.

Takeaway

Utilitarianism is like treating everyone as though they’re part of the family…

People tend to treat their family differently than they would a stranger. They might give the last slice of pizza to their little brother even if they’re still hungry. They might move their mother in if she became sick. They might sacrifice their life to save their child’s. Utilitarianism suggests that a person should treat everyone like they’re family, related or not.

Ready to start investing?
Sign up for Robinhood and get stock on us.Certain limitations apply

New customers need to sign up, get approved, and link their bank account. The cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at rbnhd.co/freestock. Securities trading is offered through Robinhood Financial LLC.

Tell me more…

What is utilitarianism?

Utilitarianism is a moral theory that claims people should make decisions based on the amount of good it provides to all human beings. Such a cost-benefit analysis should be impartial — In other words, a decision should equally consider the effects on everyone with no special treatment for your friends, family, or self.

A classic example of utilitarian logic is called the Trolley Problem. In the thought experiment, a participant must decide whether or not to flip a switch, sending a runaway trolley down an alternate track. If he does nothing, five people will die. If he flips the switch, one person will die. From a utilitarian perspective, the decision is easy — Flip the switch — One death is better than five. In theory, it shouldn’t matter who that one person is. It could be your mom, or even yourself; the answer should be the same.

In a less dramatic example, consider dividing up a bag of candy. You could give 100 kids one piece each. Or, you could give the whole pack to a single child. Under utilitarian ethics, you should consider which option maximizes the total happiness of everyone. It might lead you to conclude that providing a little joy to 100 kids is superior to the enjoyment of one child getting everything, even if that one child is yours.

What is the history of utilitarianism?

Historians trace the origins of utilitarian thought back to 17th-century philosophers like Richard Cumberland and John Gay. These “theological” utilitarian ideas seem to relate to religious beliefs asserting that actions that increase happiness were the work of God, while things that cause misery were evil. From this perspective, decisions that improved the wellbeing of others were morally correct.

Later, philosophers like David Hume, Francis Hutcheson, and others advanced these ideas beyond a religious context. They argued that decisions should be made based on the harm or good that it does for society. Without scarcity, Hume noted, there was no suffering. In other words, if everyone had everything they needed, there was nothing to argue about. It was only when more than one person needed the same resources that they had to figure out who should get it. In those cases, the utilization of the resource created a conflict, since there would be a winner and a loser. Therefore, the utility of that resource — Comparing the benefits from using it one way versus another — would be an essential consideration in determining a just outcome.

English philosopher Jeremy Bentham advanced Hume’s idea of social utility, with the intent of creating laws that were better for society. In his 1789 book, An Introduction to the Principles of Morals and Legislation, Bentham concluded that a decision was right or wrong based on the costs and benefits involved. In his view, he could measure the degree to which something created happiness or relieved misery, which he called the utility of a decision. Bentham argued that the extent of utility — The number of people that gained or lost something from the decision — was an important consideration.

John Stuart Mill furthered Bentham’s work in an 1863 book called Utilitarianism. Mill created a distinction in the quality of utility to address the criticism that utilitarianism demoted humans to pleasure seeking animals. In part, he argued that something that was intellectually rewarding was more valuable than something that merely felt good. Bentham and Mill are commonly credited as classical utilitarians.

Henry Sidgwick offered another defense of utilitarianism in his 1874 book The Methods of Ethics. Sidgwick suggests that intuition and rules are inferior approaches to determine morality compared to utilitarianism. For example, hard rules don’t take the unique circumstances surrounding a conflict into account — Perhaps trespassing onto your neighbor's property is forgivable if you’re hiding from an axe murderer. The way Sidgwick saw it, utilitarianism considered such circumstances while other ethical systems didn’t.

What are the principles of utilitarianism?

The primary utilitarian principle is that people are motivated by pleasure and pain — An idea called hedonism. This principle states that everything people do is to either seek pleasure or avoid pain. Because of this, measuring the total pleasure and pain is the right way to determine if a decision is the right thing to do. Therefore, the “correct” decision should generate the most satisfaction for the greatest number of people (aka the greatest happiness principle). This principle of utility maximization (seeking the greatest happiness of the greatest number of people) is the basis of utilitarianism.

The opposite of utilitarianism is egoism. While both ideas are hedonic (focusing on pleasure and pain), egoism is the idea that people only care about the effects of a decision on themselves. Utilitarianism is an ethical philosophy that suggests how people should act — Not necessarily how they do.

How is utilitarianism different from other ethical theories?

In the realm of normative ethics (defined rules of what people should do based on right and wrong), there are three general theories. Utilitarianism is a form of consequentialism, which asserts that decisions should be judged based on their consequences. Here’s a brief comparison of the different ideas within normative ethics.

Consequentialist Theories

Consequentialist theories suggest that the morality of an issue depends on the consequences that follow. So long as the action generates the most good, it is morally acceptable and recommended — The end justifies the means. However, alternate theories place different people at the center of the equation. For example:

  • Egoism focuses solely on the costs and benefits to the person making the decision.
  • Altruism emphasizes only the impacts on people other than the decision-maker.
  • Utilitarianism considers the net outcome to everyone — Giving no additional weight to any potential impact on the decision-maker.

Deontological Theories

Deontological (aka duty-based) theories rest on the idea that we all have specific duties that we are obligated to complete. Morality is measured by whether or not these duties are met. One well-known example of duty theory is in the US Declaration of Independence — Namely, that everyone has certain natural and inalienable rights to life, liberty, and the pursuit of happiness. Under this ethical theory, we all have an obligation to honor these rights of others, regardless of the consequences that follow. Other deontological theories extend on the idea that we all have some type of duty to uphold. It ranges from keeping promises to treating people with respect.

Virtue Theories

From the perspective of virtue theory, people make morally correct decisions when they act with virtuous traits — Someone with good virtue would also have good ethics. This idea originates from ancient Greek philosophers like Plato and Aristotle, who advised that people develop certain virtues in their children, such as: wisdom, courage, temperance, justice, generosity, self-respect, and sincerity. Medieval theologians later added faith, hope, and charity to that list.

What are the types of utilitarianism?

Utilitarianism has evolved over the years. While some philosophers still defend the classical utilitarian construct, others have adjusted it since the original theory was created. Here are a few of the current interpretations of utilitarianism.

Act Utilitarianism

Jeremy Bentham’s (the 18th-century founder of utilitarianism) original ideas on utilitarianism suggested that every action should be evaluated separately. If a decision’s benefits outweighed the costs, it was morally just. The idea that circumstances dictated whether something is right or wrong became known as act-utilitarianism. However, critics saw problems with this idea. For example, act-utilitarianism might suggest that it is morally sound for someone to steal your car in a situation where he or she needs it more than you.

Rule Utilitarianism

The perceived weakness in act-utilitarianism gave rise to a revised version of the concept. Under rule-utilitarianism, an action is morally right if the consequences of adopting a moral rule outweigh the implications of following it. For instance, theft is always wrong because it generally leads to negative consequences over positive ones. Even though a specific situation may suggest that theft was ok, it’s still wrong more often than not. Instead of viewing each activity on a case-by-case basis, rule-utilitarianism establishes a moral code for society to follow. Followers of rule-utilitarianism argue that following those rules is everyone’s moral obligation.

Ideal Utilitarianism

Classical utilitarianism is hedonistic, meaning that morality is rooted solely in whether something causes pleasure or pain. However, philosophers point out that this approach may overlook certain consequences. For example, an oil spill in the uninhabited arctic might not cause any human pain, if the public is unaware that it even happened. Yet, it is something many people think should be avoided. Therefore, ideal utilitarianism attempts to measure all things we consider good or bad to get a better gauge on overall happiness.

What are the pros and cons of utilitarianism as a philosophy?

Utilitarian theory is a philosophical concept, not a science. It’s open to significant disagreement and debate. As a normative philosophy (which tells people how they should behave), utilitarianism attempts to direct society. But any effort to define moral choices may face resistance from people with different ideas. Classical utilitarianism has some significant challenges, but also offers some important insights. Here are some of its pros and cons.

Pros

In a perfect world, Utilitarianism might work as well as historical philosophers imagined. If everyone in a society made their decisions while keeping in mind the impact it would have on everyone else, in theory, that community would reach its best possible outcome. Some people might argue that evaluating a moral dilemma on a case-by-case basis is better than the one-size-fits all approach of strict rules, which duty-based moral philosophies promote. For example, a duty-based ethical system might simply state that lying is always wrong. But utilitarianism would suggest comparing the pain caused by the lie to the benefits of telling it. Let’s say that lying to someone would save their life. A rule-based system would still consider the lie immoral, while utilitarian logic would consider it morally correct.

Cons

By the same logic, utilitarianism can suggest that intuitively wrong actions are morally right, so long as the end justifies the means. For example, under utilitarianism, stealing groceries from the store to feed the hungry might be considered a justified action. Or, breaking into someone's house might be considered morally acceptable if the benefits to the trespasser outweigh the costs to the victim.

Utilitarianism also undermines the ability to trust the rule of law that allows society to function — If every situation is different, there are no guidelines for people to rely on. In theory, if the situation called for it, your property, or even your fundamental human rights, could be violated if doing so created sufficient benefit to everyone else. The philosophy also suggests that every action you take should maximize the total benefits to society, without preferential treatment to the costs and benefits of the decision maker. For example, choosing to watch a movie with your friends may be considered the wrong decision under utilitarianism, because your time could create more social value by, say, volunteering at the food bank.

Ready to start investing?
Sign up for Robinhood and get stock on us.Certain limitations apply

New customers need to sign up, get approved, and link their bank account. The cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at rbnhd.co/freestock. Securities trading is offered through Robinhood Financial LLC.

2792145

Related Articles

You May Also Like

PARTICIPATION IS POWER™

This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals. Information is from sources deemed reliable on the date of publication, but Robinhood does not guarantee its accuracy.

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Check out Robinhood Financial’s Fee Schedule for details.

Brokerage services are offered through Robinhood Financial LLC, (RHF) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (RHS) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (RHC) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. The Robinhood spending account is offered through Robinhood Money, LLC (RHY) (NMLS ID: 1990968), a licensed money transmitter. A list of our licenses has more information. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC is not a member of FINRA and accounts are not FDIC insured or protected by SIPC. RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

2784249

© 2024 Robinhood. All rights reserved.
Follow us on

This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Past performance does not guarantee future results or returns. Before making decisions with legal, tax, or accounting effects, you should consult appropriate professionals. Information is from sources deemed reliable on the date of publication, but Robinhood does not guarantee its accuracy.

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Check out Robinhood Financial’s Fee Schedule for details.

Brokerage services are offered through Robinhood Financial LLC, (RHF) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (RHS) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (RHC) (NMLS ID: 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. The Robinhood spending account is offered through Robinhood Money, LLC (RHY) (NMLS ID: 1990968), a licensed money transmitter. A list of our licenses has more information. The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC is not a member of FINRA and accounts are not FDIC insured or protected by SIPC. RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

2784249

© 2024 Robinhood. All rights reserved.