Jeremy Bentham - Principle Of Utility

Classical Economic Analysis: Utility, Population and Money

The Principle Of Utility In Classical Economics: Jeremy Bentham

From a policy standpoint there are two distinct ways in which the principle of utility (self-interest) has been interpreted. One rests on the belief in a natural identity of interests, the other on the belief in an artificial identity of interests. Adam Smith championed the natural identity thesis, which placed a great deal of confidence in natural order and harmony. He believed that the individual self-interests of human nature harmonize of their own accord in a free econ­omy; consequently his basic prescription promoted essentially a laissez faire policy. Bentham, however, took a different tack. Although admitting that in­dividuals are chiefly self-interested, Bentham denied any natural harmony of egoisms. Crime, for example, provides a case of self-interested behavior that violates the public interest. The very fact that crime existed was for Bentham sufficient proof that natural harmony did not. The central tenet of Bentham's philosophy, therefore, was that the interest of each individual must be identi­fied with the general interest, and that it was the business of the legislator to bring about this identification through direct intercession. Thus it was in the form of the artificial identity of interests framework that Bentham first adopted the utility principle. His doctrine came to be known as utilitarianism.

On the surface, Bentham's doctrine bears a resemblance to the ancient Greek philosophy of hedonism, which also held that moral duty is fulfilled in the gratification of pleasure-seeking interests. But hedonism prescribes indi­vidual actions without reference to the general happiness. Utilitarianism added to hedonism the ethical doctrine that human conduct should be directed to­ward maximizing the happiness of the greatest number of people. "The great -est happiness for the greatest number'' was the watch phrase of the utilitari-"ans - those who came to share in Bentham's philosophy. Among them were such personalities as Edwin Chadwick and the father-son com­bination of James and John Stuart Mill. This group champi­oned legislation plus social and religious sanctions that punished individuals for harming others in the pursuit of their own happiness. Bentham defined his principle in the following fashion:

By the principle of utility is meant that principle which approves or disapproves of every action whatsoever, according to the tendency which it appears to have to aug­ment or diminish the happiness of the party whose interest is in question... not only of every action of a private individual, but of every measure of government (Prin­ciples of Morals and Legislation, p. 17).

What is noteworthy about this declaration is the very minimal distinction Bentham made between morals and legislation. His self-conceived mission was to make the theory of morals and legislation scientific in the Newtonian sense. As Newton's revolutionary physics hinged on the universal principle of attraction (i.e., gravity), Bentham's theory of morals swung on the principle of utility. Newton's roundabout influence on the social sciences was felt in other ways as well. The nineteenth century was one with a passion for measure­ment. In the social sciences, Bentham rode the crest of this new wave. If plea­sure and pain could be measured in some objective sense, then every legisla­tive act could be judged on welfare considerations. This achievement required a conception of the general interest, which Bentham readily under­took to provide.

According to Bentham, the general interest of the community is measured by the sum of the individual interests in the community. The utilitarian ap­proach was both democratic and egalitarian. It mattered not whether one was a pauper or a king—each individual interest was to receive equal weight in the measurement of the general welfare. Thus if something adds more to a peas­ant's pleasure than it subtracts from the happiness of an aristocrat, it is desir­able on utilitarian grounds. Likewise, if government action of a certain kind enhances the happiness of the community more than it diminishes the happi­ness of some segment of it, intervention is thereby justified.

All of this presupposes a kind of "moral arithmetic," which Bentham saw as analogous to the mathematical operations required of Newtonian physics. The operations of moral arithmetic are not all of the same kind, however. The values of different pleasures are added for individuals, but the value of a given pleasure must be multiplied by the number of people who experience it, and the various elements that make up the value of each pleasure must also be mul­tiplied by each other. One distinctly economic facet of this welfare theory lies in Bentham's choice of money as the measure of pain and pleasure. Money, of course, is subject to diminishing marginal utility as more of it is acquired, which Bentham recognized, though he did not explore the marginalist principle as thoroughly as some of his successors did. In other words, Bentham was more of a utilitarian than a marginalist. He therefore did not take part in the marginal-utility revolution that reoriented the general theory of value, although he influenced William Stanley Jevons (see Chapter 14), who did participate in the so-called revolution.