Classical economists analyzed the nature of value primarily on the labor theory. Without a clear grasp of the concept of demand, Smith, Malthus and Ricardo often raise confusing and self-contradictory explanations of the definition of “value. ” The utilitarianists, like Jeremy Bentham and J. S. Mill, offered a revolutionary approach to understand the demand-side of the economy. They consider the usefulness of the product as a whole rather than its process of production.
In the development of the utilitarianism, reformists present a much more realistic, practical and comprehensive discussion of the nature of the economy: the necessity of comparative utilities, the concern about the distribution and quality of the utility, the key social influence of personal choices and a prototype of an egalitarian society are manifested in the reformist’s tenets. These characteristics ensure the reformists get closer to a complete vision of the modern economy than the anti-reformists, whose ideals are conceptually simplistic and less applicable.
Jeremy Bentham, in his magnum opus An Introduction to the Principles of Morals and Legislation, proposes that the driving motives of human activities are pleasures and pains. People all tend to seek for pleasures and avoid pain. In other words, the central rule to regulate human actions is to maximize pleasure, i. e. to maximize personal utility. According to Bentham, the utility of each good can be measure in utils to represent the quantitative outlook of the pleasure gained.
However, Bentham says that each individual is the best judge of his/her choices, so that even if a quantitative framework of measuring utility is constructed, interpersonal comparison of utility is still an impossibility. Economically, this impossibility derived from the anti-reformist notion causes difficulty in determining both the true value of a particular good (which can be a variable from person to person) and the effectiveness of public investments and projects.
J. S. Mill, as an early reformist, introduces the importance to the quality of utility. He sees the laws of distribution separated from the laws of production. The distribution of utility is varied across classes, meaning the same good can stimulate different levels of utility to different consumers, partially founded on the high order theory. This acknowledgment to the quality and distribution of utility signals a forward step to a fairer evaluation of the goods’ impact to the individuals.
It also makes interpersonal comparison of utility theoretically doable. J. S. Mill’s argument does enhance the implication behind utility to a realistic level of individual diversity, but he complicates the nature of utility as a foundational measurement. With the emergence of “higher pleasures,” other factors like personal experience, background and environment start to interact. They could construe something beyond the mere pleasure. Mill rebuts the Ricardian model of growth, which insists that the growth is an end in the economic prosperity.
He states that growth should satisfy the utilitarian principles. Here, Mill distinguishes the individual utility and social utility, defining social utility as an ultimate guard of justice in the society. However, he continues to favor that choices are essentially individually based and it should be the individual utility that governs the economic flows. Hunt, with greater reforming spirit, seriously opposes the individualistic nature of utility and choicemaking calculus.
He writes that the individualistic approach not only keeps utility as an practically immeasurable, subjective existence, but also ignores the fact that individual choices are, to a large extent, socially informed. Because the utility is subjective and personally oriented, desire and pleasure are indistinguishable, and the consequence of wealth redistribution is incalculable as the losses and gains of groups may be unknown. The group’s interests, meanwhile, reflect the social influence of making a personal decision. Hunt’s observation expanded upon Mill’s allusion to the personal experience.
The choices are somehow restrictive to the available resources in a bounded environment and the direction that a society is taking. Therefore, Hunt recognizes the influential social impact of individual choices while deeming the individualistic and subjective measure of utility useless and conflicting. He takes the reformist spirit to an even higher level that the utilitarian economy should also operate in a reasonably broad social context in which distinctions of human motives could be more obvious and the choices made more rational.
Hunt’s advice and observation depart from the classical conceptualization of utility by questioning its practicality, and his suggestions suit the way more complex modern economy in a more refined way. Bentham never points out the need to achieve an equal society through his utilitarian approach; instead, he dilutes the gender role and merely touches upon the social and economic inequality between the rich and the poor. Mill, nevertheless, devotes a substantive amount of attention to an egalitarian distribution of social resources and economic roles.
He advocates that females should obtain income from outside the home to acquire gender equality, and that “women should become more masculine, men more feminine. ” Not only does Mill ask for an abandonment of the traditional patriarchal family, but he supports “a transition to more cooperative modes of production that could preserve the benefits of competition. ” This statement echoes Thompson’s analysis that the equality of worth of all work is attained by the mechanism of cooperation.
Both of them see that the economy should be competitiondriven, but they recognize the significance of cooperation to accomplish an equal end and a non-traditional, more productive family structure. The reformists added on Benthamite principles that “the greatest goods for the greatest number” is the ideal economic outcome. The new emphasis on social equality, gender roles and revolutionized mechanism of the family put the utilitarian morality to a central place. Thus, the economic activity could be benefiting the whole society to a larger scope and under an equal fashion.
This philosophy makes the antireformists notion seem oversimplified, incomplete and less humane. The modern economy is also suffering from an increasingly solidified social strata and persistent patriarchy in certain regions like Japan. These unhealthy economic phenomena undermine the internal stability of the state and the sustainability of the economy. The anti-reformist utilitarian economists laid the foundation of the basic principles of utilitarianism and the usage of utility as an economic index to assess the potential usefulness of the goods.
However, such a simplistic route, taken especially by Bentham, overlooks other vital aspects of economic activities. The possibility of a comparative measurement of utility, along with the social, rather than individual, influence on making choices, is debated by reformists. Additions and reassessments of ideas contribute to the formation of an early egalitarian spirit within the utilitarian framework, making the economic analysis more humanistic, realistic and well-rounded.