Utilitarianism in Business Ethics: Jeremy Bentham's Ideas

Executive Summary

This is qualitative research that possesses the capacity to introduce the standard of Utilitarianism as a standout amongst the most effective and enticing ways to deal with regulating morals. John Stuart Mill is an early established supporter of Bentham, who concocted this philosophical hypothesis. John Stuart Mills by one means or another did share some unique perspectives with respect to some part of this hypothesis in light of the feeling of bliss. In later circumstances, Philosopher Karl Marx censured Bentham's utilization of 'yard measure' of now to the past, present, and future. What's more, as a moral glutton, Jeremy Bentham, trusted that good and bad could be controlled by measuring the 'pain' and 'pleasure' of any given activity, with an activity that delivered more pleasure than the pain being ethically right. At last, the utilitarian rule conveys various confinements. It organizes results neglecting the method for the activity and overlooking the way that there is some instability of results. The cost-benefit analysis overlooks the bargains that research makes to provide certain incentives to businesses.

Introduction

Utilitarianism is one of the most powerful and convincing approaches in the history of philosophy to normative ethics. Although distinct types of opinions are discussed, in particular, utilitarianism is said to be the opinion that the action that generates the best is the morally correct action. If the end outcome is positive and useful, then it is justified to take action to achieve the end. It says that the end consequences define the action so it is a form of consequentialism. This implies that the right action is understood entirely in terms of the consequences produced. Utilitarianism differs from egoism in terms of the relevant consequences. On the utilitarian view, one tends to maximize the overall good and not only one’s own good but consider the good of others as well. Utilitarianism has no bias, which means the happiness of all counts the same.

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The early leader of Utilitarianism is Jeremy Bentham and in 1780 he printed his book ‘An Introduction to the Principles of Morals and Legislation. Bentham presented a method of calculating they value of pleasures and pains, which has come to be known as the hedonic calculus. Bentham says that the value of a pleasure or pain, considered by itself, can be measured according to its intensity, duration, certainty/uncertainty, propinquity/remoteness, fecundity, purity, and extent. Bentham emphasizes that his method is not unwarranted because he believes that an action is deemed good if it produces more pleasure than pain. In order to assess the advantages of the action, the value of pleasure and suffering in one's life must be measured.

Views similar or contrary to Bentham’s classical theory:

John Stuart Mill was a follower of Bentham and admired Bentham's work even though he had disagreed with some of Bentham's claims primarily on the nature of happiness. Bentham claimed that there were no qualitative differences between pleasures they were only quantitative. This aspect of his theory exposed him to different criticisms. Firstly, many claimed that Bentham's Hedonism was egoistic. Simple-minded pleasures, sensual pleasures, were just as good, at least intrinsically, then more sophisticated and complex pleasures. Secondly, there was no qualitative difference between human pleasures and animal pleasures in Bentham's view. And the third element of his theory that was criticized was his view that harming an animal and a human being is both bad, while most individuals believed that harming the human being was worse. Mills made some changes to the theory so that it could cancel out the criticism.

Mills believed that some pleasures more important than others. According to Mills, Intellectual pleasures are more important than just sensual and body-only pleasures. While Mill's view of the good differs greatly from the view of Bentham, but like Bentham, the good is still in pleasure. If you have pleasure, the action is preferable and good. In addition, the theory's basic structures are the same. Mill's proof of the claim that intellectual pleasures are better than other pleasures, is highly suspected. He doesn't attempt a mere appeal to raw intuition. Instead, he guesses that those persons who have experienced both views the higher as better than the lower. Or, we can explain by using his most famous example — it is better to be Socrates ‘dissatisfied’ than a fool ‘satisfied’. Mill was thus able to solve a utilitarian issue.

Criticisms

Karl Marx's criticisms

According to Karl Marx, human nature is dynamic. The concept of a single utility for all humans is one-dimensional which is not useful. When he criticized Bentham‘s application of ‘yard measure ‘of now to the past, present, and future, he criticizes the implication that society and people have always been and always will be, as they are now, thus he criticizes essentialism’.

Karl Marx’s also said that the principle of utility was not the discovery of Bentham. He simply reproduced in his boring way. Karl Marx's also said that the utility principle was not Bentham's discovery. He reproduced merely in his boring manner. He levitant French men had said with spiriting the century of 18th. For the purpose of utilitarianism, Karl Marx had provided a clarification. Karl Marx’s related it to a dog. He said to recognize what is helpful for a dog. The answer is that; a person must study the nature of the dog. Karl Marx also said that from the principle of utility this nature itself is not to be expected. This matter applies to this person who, by the principle of utility, would soon disregard all human acts, movements, and connections. However, this issue as a whole has to cope with human nature and then with human nature as altered in every ancient period. Bentham does little of this theory's job.

Marx's indictment is in two ways. He claims utility theory is true by definition and therefore adds nothing expressive in fact. Marx also outlined the need for a productive evaluation to examine what kind of effects are good for individuals. Such as: what is our nature, isolated under capitalism. Second, he also tells that Bentham does not take into consideration people's changing character and therefore the changing character of what is good for them. For Marx, this criticism is particularly crucial because he thought that all significant statements depended on specific historical circumstances.

John Taurek's criticism

John Tarurek has argued that the idea of happiness or pleasure across persons is quite meaningless. Those individuals are morally meaningless in the situation. He questioned if our course of action should be taken into consideration in the trade-off situation. Taurek also said that “The conclusion I reach is that we should not”. His argument basically looks at a trade-off situation”. He explained, “The situation is that he has a supply of some life-saving drug”. He cannot give a satisfactory account of the meaning of judgments of the kind.

Discussion on the Utilitarian Theory and Literature

The theory of utilitarianism has several applications in the real world. The case ‘Airbag and the automobile manufacturers’ is an application of the utilitarianism theory in real life. As stated previously, the nineteenth-century thinkers Jeremy Bentham developed this theory (1784- 1832), James Mill (1773-1836), and John Stuart Mill (1806-1873). It states that the moral worth of an action is evaluated by the consequence that is the yield from that action. It is a hardline consequentialist view. At the same time, the theory emphasizes the overall society's good, not the people or group of individuals benefit. In this case, the notice of ‘Inflatable Occupant Restraint Systems’ and emphasized the use of controversial ‘air bag’ was a measure taken by the National Highway Traffic Safety Administration to ensure the safety of the general mass. However, this measure was opposed by the automobile industry. If the automobile industry is considered to be a group of individuals, then according to the theory of utilitarianism this group has to be overlooked as utilitarianism emphasizes on the benefit of the majority not the minority. The new law affects automobile manufacturers in a number of respects. Using the airbag will increase their manufacturing costs and they will be forced to charge greater prices for the cars. If they charge greater prices for cars, customers will no longer purchase cars produced by US automobile manufacturers, but move to vehicles produced by overseas manufacturers, creating US automobile companies non-competitive on the market. Their problem is of great concern but still, they are in the minority so, utilitarianism theory overlooks their concern. As articulated by Mill and Bentham, Utilitarianism aims for the greatest good for the greatest number of people, not for the pleasure of the individuals.

Utilitarianism critics have charged that it is not a complete approach to ethical decision-making because it ignores intentions and motives, which are also essential in moral decision-making, by focusing on the consequences of actions. In this situation, the consequence of the technical execution is still unsure. Repeatedly questions were raised against the research made, the engineering design, etc. The intentions or motives for the action, however, are people's safety, but they involve numerous expenses. It was a major problem when opponents of the ' airbag ' installation technology discovered that increased use of the seat belt could serve the safety objective of the airbag installation. More importantly, the use of seat belts has increased in recent years in the US through increasing public education. This can be a good solution to the issue that serves the purpose of both groups.

The application of utilitarianism in today’s business world is the cost-benefit analysis. This analysis is executed by every business before undertaking any major decision. Under this will be considered all the costs and benefits of an action being proposed. Then the task of comparison is carried out. If the value of the benefit exceeds the cost of the proposed action it is decided to be executed. If vice versa happens, however, the suggestion will be dismissed. This is a decision-making extreme quantitative approach. Now let's see how an actual-life example of this assessment works in real life.

Custom Graphic Works has been operating for just over a year, and sales are exceeding targets. Currently, two designers are working full-time, and the owner is considering the increasing capacity to meet demand. (This would involve leasing more space and hiring two new designers.)

He decides to complete a Cost-Benefit Analysis to explore his choices.

Assumptions

Currently, the owner of the company has more work than he can cope with, and he is outsourcing to another design firm sate cost of $50 an hour. The company outsources an average of 100 hours of work each month.

He estimates that with increased capacity, revenue will increase by 50%.

With more workspace, manufacturing per person will boost by 10 percent.

The horizon of analysis is one year: that is, he expects benefits to accrue in the year.

• Cost
• Types
• Details
• Comes in the First Year
• Lease
• 1250 square feet available next door at $20 per square foot

1. $25,000

• Leasehold
• Improvements
• Wall decoration and reconfiguring office physical space

1. $20,000

• Hire four more designers and technicians
• Salary, including benefits
• Recruitment costs
• Orientation and training

1. $100.000

• Two additional service center
• Furniture, Hardware
• Buy needed software

1. $10,000
2. $1,000

• Construction downtime
• 2 Months at approximate revenue per month

1. $15000
2. $30000

• Total

1. $1,86,000

• Benefits
• Benefit
• Benefit Within 12 Months
• 50 percent revenue increase

1. $19,500

• Paying in-house designers $15 an hour, versus $50 an hour outsourcing (100 hours per month, on average: savings equals $3,500 a month)

1. $42,000

• 10 percent improved productivity per designer ($7,500 + $3,750 = $11,250 revenue per week with a 10 percent increase = $1,125/week)

1. $58,500

• Improved customer service and retention as a result of 100 percent in-house design

1. $10,000

• Total

1. $305,500

• He calculates the payback time as shown below:

1. $139,750 / $305,500 = 0.46 of a year, or approximately 5.5 months

However, this cost-benefit analysis is not without any limitations. It does not consider the qualitative aspect of a decision and it is an application of Bentham’s principle of utility.

As an ethical hedonist, the 18th-19th-century English utilitarian philosopher and proto-bleeding- heart-liberal Jeremy Bentham, believed that right and wrong could be determined by weighing the “pleasures” and “pains” of any given action, with an action that produced more pleasure than the pain being morally right.

While this would be great by itself (in a geeky kind of way), what makes it truly spectacular is the fact that Bentham actually created an algorithm to define exactly how much pleasure and pain an action would cause. (His application of algebra to life decisions is echoed by at least one complete whack-job modern author…)

To determine an individual’s pleasure or pain from an action, Bentham suggested weighing Intensity(pleasure‘s strength), Duration (how long pleasure would last), Certainty (the probability action will result in pleasure), Propinquity (how soon the pleasure might occur), Fecundity (the chance the pleasure would result in further actions), and Purity (the probability these further actions would be pleasures and not pains). He also added Extent, taking the impacts of that choice on other individuals into consideration.

We can only guess at the specific algebra Bentham used to compare these variables and he left no note of how to quantify, for example, the intensity of pleasure, but in Bentham’s day, he envisioned his hedonistic calculus used for many decisions, including calculating jail sentences: given a certain crime, Bentham thought it possible to determine the punishment that would outweigh the crime‘s pleasure and thus prevent future crimes.

Interestingly, Bentham's thinking about prisons didn't stop at sentencing length. He also designed the prison known as the Panoptic on, in which prisoners in open cells tall times feel as if they are being watched by guards in a central tower. To Bentham, the Panoptic on allowed guards to gain 'power of mind' over the prisoners.

Bentham in his theory ignored the significance of the pleasure of the mind while prioritizing the pleasure of the body. John Stuart Mill has corrected this flaw by establishing his theory of the principle of happiness. Mills argued that happiness is more important and it is different from pleasure. This is because pleasure in quantitative and happiness is qualitative; happiness requires cognitive judgment and sometimes pain of the body can yield happiness. So, pleasure is not necessary for happiness.

Therefore, there are a number of limitations to the utilitarian principle. It prioritizes consequences overlooking the means of action and overlooks the fact that results are somewhat uncertain. It prioritizes consequence overlooking the means of the action and ignoring the fact that there is some uncertainty of outcomes. The analysis of cost-benefit ignores the compromises that the study makes in providing the company with certain incentives. It ignores the right of the individual and does not take into account the benefit of the minority. Still, the concept of the free market economy is based on the utilitarian principle of utility and it is very successful. But for this the limitations it carries cannot be overlooked. That is why the philosopher Kant established the theory of rights and duties to let the world get rid of the dilemma.

Conclusion

From the discussion throughout the research, Utilitarianism is one of the most powerful and persuasive approaches to normative ethics in the history of philosophy. John Stuart Mill is an early classical follower of the philosopher Bentham, who discovered with this philosophical theory. John Stuart Mills did somehow share some different views regarding some aspects of this theory in the light of the sense of happiness. In later times, Philosopher Karl Marx criticized Bentham’s application of the “yard measure” of now to the past, present and future. And as an ethical hedonist, Jeremy Bentham believed that right and wrong could be determined by weighing the “pleasure” and “pains” of any given action, with an action that produced more pleasure than the pain being morally right. Finally, there are a number of constraints to the utilitarian principle. It prioritizes consequences that overlook the means of action and ignore the fact that results are somewhat uncertain. The cost-benefit analysis ignores the compromises made by research to provide the company with certain incentives.

Reference

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3. General Motors Study, About Air Bags, (Washington DC: Insurance Institute for Highway Safety, 1987)
4. Dave Zoia, “Some Wait to Decide on Passive Restraints”, Automotive News (September 15, 1986), p1
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