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FireMadeFlesh's avatar

Does Utilitarianism justify Capitalist greed?

Asked by FireMadeFlesh (15697 points ) December 10th, 2012

The Utilitarian tradition is often summarised as “the greatest good for the greatest number”. According to the Stanford Encyclopaedia of Philosophy, “The Classical Utilitarians, Jeremy Bentham and John Stuart Mill, identified the good with pleasure”. Therefore pleasure is the ultimate goal that will lead to an ethical society, according to the Utilitarian approach.

Pleasure, in the Capitalist ideology at least, is often associated with success, which is measured in monetary terms. The “greatest good” is judged as having maximal ability to buy goods and services to fulfil one’s needs and wants. The greatest pleasure comes through satisfying material wants.

More importantly though, Capitalism is based on economic growth. If a small sector of society becomes immensely wealthy, society as a whole is said to benefit as the successful indirectly pass part of their new wealth on to the masses. Getting rich is somehow seen as a service to society.

If these two approaches are combined, encouraging a small sector of society to become immensely wealthy increases the financial benefit to the general population, and therefore their pleasure, and as such their greed is entirely ethical. So does Utilitarianism in the Capitalist context actually encourage greed?

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9 Answers

wundayatta's avatar

It’s a mistake to look at any of these philosophies as prescriptive. They are attempts to describe human behavior.

I’m not sure you should interpret pleasure in a hedonistic way, either. Think of it more as choice. As in, “what is your pleasure?” What do you prefer.

I don’t know what they would have had to say about income inequity, if they could see the levels it has achieved these days. I doubt that such income inequity helps us achieve the greatest good for the greatest number.

CWOTUS's avatar

You’re making unsupported assumptions. There is no reason that capitalism has to be “based on economic growth.” Capitalism generally leads that way, but it’s not a necessity.

There’s also no guarantee or requirement for “a small sector of society [to become] immensely wealthy”. Again, that’s a common enough occurrence, but it’s not a necessary outcome. As a matter of fact, the entire society has become more wealthy through capitalism – the entire world has, too.

C’mon out of your ivory tower and look at what’s around you.

FireMadeFlesh's avatar

@wundayatta Utilitarianism is an ethical theory, and ethics by its nature is prescriptive. Of course Capitalism is not prescriptive, but I am thinking along the lines of what happens when the two are combined – in which case ethical prescription is applied to an economic ideal.

I also don’t think income inequity is recommended by either Utilitarianism or Capitalism – hence my use of the word “justify”, rather than “stipulate” or some similar restrictive term. Income inequity may be appropriate within these framework without being the only outcome.

@CWOTUS Capitalism is based on the exchange of goods and services in a free market, with a view to making a profit, since the focus is on capital. A successful capitalist society must grow, as a larger economy is able to exchange goods of a greater value at a greater rate. So as you say a capitalist society does not necessarily need to grow, but those that don’t are unsuccessful in their application of capitalism.

I don’t believe I said that a small sector should become immensely wealthy under a capitalist structure – just that such an occurrence is consistent with capitalist principles. I am also not arguing for or against capitalism or utilitarianism with this question. I am simply wondering if there is a link between the two. I believe you may have made an unsupported assumption of your own there.

wildpotato's avatar

GQ. And way to use the SEP! That site is dangerous; I end up puttering around there for hours. Yes, I do think that utilitarianism, by virtue of its description of human behavior, can easily be seen as providing a justification for greed in general. I do not personally believe the justification to be adequate, because I would argue that the theory is not an adequate ethical account of how concern for the Other (as Neighbor, if you like) is the very factor that mediates one’s own self-relation. But this idea is a relatively recent development in ethics – JSM did a lot of good work, and it rests on its own logic pretty solidly.

I love the budding debate you and wundy got going on about whether ethics is prescriptive or descriptive. I gotta chew on that one for a bit. waits for SavoirFaire to help

ETpro's avatar

I have problems with reductionist thinking whenever it is applied to human behavior. Human behavior and societal action is one of the most complex dynamical systems we can conceive. It’‘s a complex dynamical system with more strange attractors than we can easily number. To think you can break it down to something as simple as “that which produces pleasure is ethically good” is to ignore vast areas of human behavior that bear on what ends up being the greatest good for the greatest number.

That said, no, Utilitarianism as currently understood is not secured by unrestrained capitalist greed. The Gordon Gekko “Greed is good.” mantra leads capitalism into its most destructive behaviors. Both vulture capitalism and construction of monopolies lead to rapid and enormous profits, but the ultimate total collapse of the social structure that supports those profits. It does not lead to the greatest good for the greatest number, but the exact opposite.

There is zero evidence that wealth accumulation in the hands of a very few enriches society in general. The first the disparity of wealth hit a high was in 1928, one year before the Great Depression. The second time was in 2007, before the Great Recession. Had we not thrown nearly $2 trillion in direct spending at staving off a repeat depression in 2008 through 2010, plus who knows how much more through quantitative easing by the Fed, we’d most definitely have had a depression this time too. So the evidence is quite the opposite. It appears that the ability to get rich is a powerful motivator of hard work and innovation. But rich run amok is every bit as destructive as the demotivating poverty for all save the party bosses that communism imposes.

ninjacolin's avatar

We can try capitalism hoping it is the best possible economic model that will produce the most pleasure, but is it? We can’t really “know” (in the scientific sense) whether it is the best for this purpose without testing to compare the efficacy of it’s contenders.

In general, though, I assume we’re using it because it seems like the best solution at the moment. I mean, I’m not personally confident in any other economic models right this moment. I am curious to find out though.

ragingloli's avatar

No, because it actually opposes it, as Capitalism leads to the “greatest good” only for a minority of people, but poverty, misery and serfdom for the majority.
The standard of living that people in the west enjoy is built on the backs of poverty stricken wage slaves in third world countries.

LostInParadise's avatar

Utilitarianism is the philosophy behind the economics of Western industrial countries. It allows for progressive taxation on the assumption that the money taken from the rich will cause them to lose less happiness than the happiness gained by poorer recipients.

You are making an assumption regarding the effectiveness of trickle down economics, which does not hold. Keynes showed that if wealth distribution is too skewed toward the rich, then the rich industrialists will suffer from the decreased purchasing power of the poor and middle classes. Once sales decline, the situation gets worse, because workers are let go, leading to even less purchasing power.

One problem with Utilitarianism is that it allows for discrimination against minorities, since even great suffering by the members of a minority can be balanced by a small gain in happiness by each of those in the majority. Consider, for example, the so called barbarians who fought as gladiators for the amusement of the Roman populace.

Crashsequence2012's avatar

“Capitalist greed” = Statement masquerading as question.

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