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Subject Area: Political Theory

Individual Rights vs. Utilitarian Consequences - Leonard P. Liggio, Literature of Liberty, Autumn 1982, vol. 5, No. 3 [1982]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Individual Rights vs. Utilitarian Consequences

M. Rosenfeld

“Between Rights and Consequences: A Philosophical Inquiry into the Foundations of Legal Ethics in the Changing World of Securities Regulation.” George Washington Law Review 49 (March 1981): 462–538.

The once sacred citadel of American individualism has become increasingly undermined by an endless proliferation of bureaucratic regulation. At the very same time, the modern attorney, especially the corporate attorney, finds himself immersed in a rising tide of conflict and confrontation. According to Prof. Rosenfeld, these two developments are not unrelated. The individual's loss of power entails a corresponding constriction of the latitude enjoyed by his legal representative. Rosenfeld seeks to demonstrate that the nexus between the fate of the individual and the role of the attorney is much stronger than one of mere correspondence. It proves rather to be one of interdependence and mutual determination.

Individualism in the West has tended to move back and forth on a continuum bounded by two poles: the theory of rights and utilitarian consequentialism. Essentially, the first point of view, exemplified by John Locke and Adam Smith, postulates a whole range of rights which allow the individual to pursue his self-interest with as few fetters as possible. These rights are to be protected whatever the moral consequences in particular cases, since, according to the theory, rights have primacy over morality—although people's pursuit of self-interest will normally, even necessarily, lead to the common good.

Consequentialism, in its broadest sense, holds that the moral value of an act must be determined from its consequences. A characteristic attitude of utilitarianism, consequentialism rejects the proposition that the mere pursuit of individual self-interest necessarily leads to the common good. Bentham and his followers adhered to a “combination of laissez-faire economics with a reiterated demand for political reform.” The heirs of Adam Smith in the economic sphere, they demanded “a harmonization of interests” through legislation in the political and social spheres, thus departing from the minimal state model of Smith and Locke.

This gap between politics and economics was not closed until J.S. Mill made his fundamental “discovery” that the “true province of economic law [is] production and not distribution.” Mill thus freed the social distribution of economic goods from the vagaries of the “invisible hand” and thereby opened up the possibility that government might licitly impose its moral values to ensure a just share of wealth among all persons. Mill's views on redistribution led directly to such experiments as the New Deal which have fostered the “revolution of rising entitlements” underway in many Western countries. That revolution has greatly expanded the material security of individuals—at the price of constricting the range of rights to pursue self-interest.

This development has put the modern corporate attorney in a highly ambiguous position. In an individualist society committed to the theory of rights, the attorney's role is clear: to defend his client's interests even at the risk of threatening the legitimate interests of others. However, in a consequentialist society, the attorney finds himself torn between the interests of his client and those of society. Thus, for example, the Securities and Exchange Commission could take the position in 1978 that, under certain circumstances, a corporation's securities counsel has the obligation to divulge his client's confidences to the corporation's shareholders, to the Commission, and, in effect, to the investment public.

For Prof. Rosenfeld, the dilemma of the modern attorney is a metaphor for the paradox of the individual in our times. Bereft of the sanction of the invisible hand, the individual is caught in a morass in which the pursuit of self-interest is increasingly viewed as inimical to the common good. Attempts to reconcile the two with regulations drastically limit the freedoms of a “free” society, while rendering the moral morass still deeper and murkier.