Academic journal article Review of Social Economy

The Problem with Utility: Toward a Non-Consequentialist/utility Theory Synthesis

Academic journal article Review of Social Economy

The Problem with Utility: Toward a Non-Consequentialist/utility Theory Synthesis

Article excerpt

Suppose I give you five dollars. What is my motivation? According to economists employing utility maximization, the act must satisfy my preferences. If my preferences are materialistic, then I expect some "thing" in return from you, whether it be past, present, or future. Perhaps the act was an investment in reputation that I will be able to profit from later. If we allow non-materialistic preferences, then the act may have satisfied my preferences over your material well-being. In that case, I possess preferences over your preferences and, to use common language, my act may have resulted in the warm feeling of giving, or at least reduced some feelings of guilt. The notable point, however, is that no matter how my preferences are specified, the reason I gave was to satisfy my own preferences. Our preferences over your material well-being may coincide, but the reason I give to you is to satisfy my own preferences. As such, you are merely an instrument to me (and, perhaps, I to you). This representation is assured by construction; utility maximization necessitates that I only take actions in order to increase my own welfare, governed by my preferences.

As a descriptive representation, utility maximization has been criticized on several grounds. Sen (1978) suggests that some acts arise from a sense of duty and commitment. Commitment is a principled code of ethics. Examples could include sacrifices made in the name of a cause, perhaps at great personal cost. In such cases a person's act is divorced from their own welfare. So the act of giving may (or may not) have increased my welfare, but an increase was not the cause of my giving. Preference satisfaction increases one's own welfare by definition; no such link is necessary for a proper understanding of commitment. This notion is difficult for economists to conceptualize because we are so used to thinking in terms of utility maximization. How can duty or commitment be modeled in a utility maximization framework? Quite simply it can't because utility maximization is consequentialist by construction. That is, acts constitute a means to achieve some desired end objective, in this case, an increase in utility. Acts of commitment and duty are non-consequentialist because they are taken (somewhat) independently of consequences desired.(1)

Some are concerned that utility maximization does not fully capture moral motivations. For instance, Sen (1978) notes that we can conceptually differentiate between personal welfare, "isolated" personal interests, actual choices and "most moral" ranks, all of which might be ordered by a meta-ranking representing some given morality. Etzioni (1986) suggests that people are continually confronted with decisions in which the choice to act will fulfill some preferences, yielding pleasure, say, while violating other, maybe moral, preferences and commitments. This conflict between doing what's pleasurable, versus "what's right," is not captured in mono-utility frameworks, it is argued. One possible way of operationalizing these ideas is with a multiple-utility model in which pleasure preferences and moral preferences and commitments are differentiated from one another. To my knowledge, no formal attempt has been successful so far. And any attempt that tried to model moral actions as a result of only moral preferences would still suffer from the instrumentality criticism; if I possess moral preferences, but my acts are to increase my own utility, then preference satisfaction assures that all of my acts, even moral ones, are taken in order to increase my own welfare.(2)

The issue of commitment is important. By excluding it from economic analyses we fail to explain some behaviors on the one hand, and mischaracterize other behaviors on the other hand. Without commitment it is difficult to explain some instances of altruism, cooperation, voting, tax paying, tipping, promise keeping in the absence of penalties, great personal sacrifices for causes (e. …

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