Utilitarianism, uncertainty and information

Abstract

Introduction It is no accident that a large number of the essays in this volume are by economists, since they appear to have made far more use of utilitarianism than have other social scientists. Indeed, the whole study of welfare economics is founded more or less explicitly on utilitarian ideas, even when economists deal only with the idea of Pareto efficiency – when no individual can be made better off without making someone else worse off. In addition, economists appear to have come face to face with a number of challenging issues in applying what amounts to utilitarian techniques to specific economic problems. Examples of such issues are changing tastes, the valuation of life and limb, uncertainty, and incompletely informed individuals. Perhaps one may say that it has almost become one of the hallmarks of a good economist to try to extend the basic utilitarian framework of welfare economics to treat such issues. In this essay I am going to present an almost entirely verbal and relatively non-technical discussion of the problems which arise in trying to extend utilitarianism to deal with such issues. My concern will be to try to see what questions utilitarianism can be extended to handle sucessfully, and what questions cause great difficulty. Because I am an economist, the ethical issues I shall be discussing will mostly be at least closely related to economic issues, i.e. the problem of allocating scarce resources, and the associated question of the proper distribution of income.