Utilitarianism: What It Is, Founders, and Main Principles


Investopedia / Jessica Olah

What Is Utilitarianism?

Utilitarianism is a theory of morality that advocates actions that foster happiness or pleasure and oppose actions that cause unhappiness or harm. When directed toward making social, economic, or political decisions, a utilitarian philosophy would aim for the betterment of society as a whole.

Utilitarianism would say that an action is right if it results in the happiness of the greatest number of people in a society or a group.

Key Takeaways

  • Utilitarianism is a theory of morality that advocates actions that foster happiness and oppose actions that cause unhappiness.
  • Utilitarianism promotes "the greatest amount of good for the greatest number of people."
  • When used in a sociopolitical construct, utilitarian ethics aims for the betterment of society as a whole.
  • Utilitarianism is a reason-based approach to determining right and wrong, but it has limitations.
  • Utilitarianism does not account for things like feelings and emotions, culture, or justice.

Understanding Utilitarianism

Utilitarianism is a tradition of ethical philosophy that is associated with Jeremy Bentham (1747-1832) and John Stuart Mill (1806-1873), two late 18th- and 19th-century British philosophers, economists, and political thinkers. Utilitarianism holds that an action is right if it tends to promote happiness and wrong if it tends to produce sadness, or the reverse of happiness—not just the happiness of the actor but that of everyone affected by it.

At work, you display utilitarianism when you take actions to ensure that the office is a positive environment for your co-workers to be in, and then make it so for yourself.

"The greatest good for the greatest number" is a maxim of utilitarianism.

The 3 Generally Accepted Principles of Utilitarianism State That

  • Pleasure, or happiness, is the only thing that has intrinsic value. To say that something has intrinsic value means that it is simply good in itself. Intrinsic value contrasts with instrumental value. Something has instrumental value when it is a means to some end.
  • Actions are right if they promote happiness, and wrong if they promote unhappiness.
    This principle is quite controversial since it involves that the moral quality of an action is decided by the size of its consequences. So long as an action produces maximum benefits for the greatest number of people, utilitarianism does not care whether the results are driven by immoral motives. However, this principle can be refuted since most people would agree that the moral quality of an action depends on the motive or intention behind it.
  • Everyone's happiness counts equally. Although this axiom may seem quite obvious, this principle of equality was radical and progressive in Bentham's time. By then, it was commonly accepted that some lives and some people's happiness were simply more important and valuable than others. Betham's principle of equality makes the government responsible for creating policies that would benefit all equally, not just the elite.

From the Founders of Utilitarianism

Jeremy Bentham describes his "greatest happiness principle" in Introduction to the Principles of Morals and Legislation, a 1789 publication in which he writes: "Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as to determine what we shall do."

John Stuart Mill had many years to absorb and reflect on Jeremy Bentham's thoughts on utilitarianism by the time he published his own work, Utilitarianism, in 1863. The key passage from this book:

The creed which accepts as the foundation of morals utility, or the greatest happiness principle, holds that actions are right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse of happiness. By happiness is intended pleasure, and the absence of pain; by unhappiness, pain, and the privation of pleasure.

Utilitarianism's Relevance in a Political Economy

In liberal democracies throughout the centuries, the progenitors of utilitarianism spawned variants and extensions of its core principles. Some of the questions they wrestled with include: What constitutes "the greatest amount of good"? How is happiness defined? How is justice accommodated?

In today's Western democracies, policymakers are generally proponents of free markets and some base level of government interference in the private lives of citizens so as to assure safety and security. Although the appropriate amount of regulation and laws will always be a subject of debate, political and economic policies are geared primarily toward fostering as much well-being for as many people as possible, or at least they should be. Where there are disadvantaged groups who suffer income inequality or other negative consequences because of a utilitarian-based policy or action, most politicians would try to find a remedy.

In Business and Commerce

Utilitarianism holds that the most ethical choice is the one that will produce the greatest good for the greatest number. As such, it is the only moral framework that can justify military force or war. Moreover, utilitarianism is the most common approach to business ethics because of the way that it accounts for costs and benefits.

The theory asserts that there are two types of utilitarian ethics practiced in the business world, "rule" utilitarianism and "act" utilitarianism.

  • Rule utilitarianism helps the largest number of people using the fairest methods possible.
  • Act utilitarianism makes the most ethical actions possible for the benefit of the people.

In the Corporate Workplace

Most companies have a formal or informal code of ethics, which is shaped by their corporate culture, values, and regional laws. Today, having a formalized code of business ethics is more important than ever. For a business to grow, it not only needs to increase its bottom line, but it also must create a reputation for being socially responsible. Companies also must endeavor to keep their promises and put ethics at least on par with profits. Consumers are looking for companies that they can trust, and employees work better when there is a solid model of ethics in place.

On an individual level, if you make morally correct decisions at work, then everyone's happiness will increase. However, if you choose to do something morally wrong—even if legal—then your happiness and that of your colleagues, will decrease.

Utilitarian Ethics

"Rule" Utilitarian Ethics

An example of rule utilitarianism in business is tiered pricing for a product or service for different types of customers. In the airline industry, for example, many planes offer first-, business-, and economy-class seats. Customers who fly in first or business class pay a much higher rate than those in economy seats, but they also get more amenities—simultaneously, people who cannot afford upper-class seats benefit from the economy rates. This practice produces the highest good for the greatest number of people.

And the airline benefits, too. The more expensive upper-class seats help to ease the financial burden that the airline created by making room for economy-class seats.

"Act" Utilitarian Ethics

An example of act utilitarianism could be when pharmaceutical companies release drugs that have been governmentally approved, but with known minor side effects because the drug is able to help more people than are bothered by the side effects. Act utilitarianism often demonstrates the concept that “the end justifies the means”—or it's worth it.

Quantitative Utilitarism vs. Qualitative Utilitarism

Quantitative utilitarianism is a branch of utilitarianism that was developed out of the work of Jeremy Bentham. Quantitative utilitarians focus on utility maximization, that is, maximizing the overall happiness of everyone, and use a hedonic approach to determine the rightness or wrongness of actions. Bentham defined as the foundation of his philosophy the principle that “it is the greatest happiness of the greatest number that is the measure of right and wrong”.

Qualitative utilitarianism is a branch of utilitarianism that arose from the work of John Stuart Mill. Qualitative utilitarians categorize pleasures and pains in a more qualitative manner, depending on the level of their consequences, and disregarding any quantifiable proof of their importance.

Quantitative vs. Qualitative

Qualitative utilitarianism argues that mental pleasures and pains are different in kind and superior in quality to purely physical ones. Quantitative utilitarianism argues that mental pleasures and pains differ from physical ones only in terms of quantity.

The Limitations of Utilitarianism

In the workplace, though, utilitarian ethics are difficult to achieve. These ethics also can be challenging to maintain in our business culture, where a capitalistic economy often teaches people to focus on themselves at the expense of others. Similarly, monopolistic competition teaches one business to flourish at the expense of others.

  • A limitation of utilitarianism is that it tends to create a black-and-white construct of morality. In utilitarian ethics, there are no shades of gray—either something is wrong or it is right.
  • Utilitarianism also cannot predict with certainty whether the consequences of our actions will be good or bad—the results of our actions happen in the future.
  • Utilitarianism also has trouble accounting for values like justice and individual rights. For example, say a hospital has four people whose lives depend upon receiving organ transplants: a heart, lungs, a kidney, and a liver. If a healthy person wanders into the hospital, his organs could be harvested to save four lives at the expense of his one life. This would arguably produce the greatest good for the greatest number. But few would consider it an acceptable course of action, let alone an ethical one.

So, although utilitarianism is surely a reason-based approach to determining right and wrong, it has obvious limitations.

What Are the Principles of Utilitarianism?

Utilitarianism puts forward that it is a virtue to improve one's life better by increasing the good things in the world and minimizing the bad things. This means striving for pleasure and happiness while avoiding discomfort or unhappiness.

What Is a Utilitarian?

A utilitarian is a person who holds the beliefs of utilitarianism. Today, these people might be described as cold and calculating, practical, and perhaps selfish—since they may seek their own pleasure at the expense of the social good at times.

What Is Rule Utilitarianism?

Rule utilitarians focus on the effects of actions that stem from certain rules or moral guidelines (e.g. the "golden rule", the 10 commandments, or laws against murder). If an action conforms to a moral rule then the act is moral. A rule is deemed moral if its existence increases the greater good than any other rule, or the absence of such a rule.

What Is Utilitarian Value in Consumer Behavior?

If a consumer buys something only for its practical use-value, in a calculative and rational evaluation, then it is of utilitarian value. This precludes any sort of emotional or sentimental valuing, psychological biases, or other considerations.

What Is the Role of Utilitarianism in Today’s Business Environment?

Because its ideology argues for the greatest good for the greatest number, a business acting in a utilitarian fashion should increase the welfare of others. However, in practice, utilitarianism can lead to greed and dog-eat-dog competition that can undermine the social good.

The Bottom Line

Utilitarianism offers a relatively simple method for deciding the morally right course of action for any particular situation. Over the years, the principle of utilitarianism has been refined and expanded in many variations. Utilitarians today describe benefits and harms in terms of the satisfaction of personal preferences or in purely economic terms of monetary benefits over monetary costs, rather than in terms of "happiness" and "pleasure".

Article Sources
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  1. Jeremy Bentham. "An Introduction to the Principles of Morals and Legislation (1789)." J. H Burns and HLA Hart, 1970.

  2. John Stuart Mill. "Utilitarianism, Liberty, and Representative Government (1863)." Wildside Press, 2007.

  3. University of Idaho, Dept. of Ethics. "Ethics Glossary."

  4. Santa Clara University. "Calculating Consequences:The Utilitarian Approach to Ethics."

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