Liberty Matters


Broadly speaking, utilitarianism is the view that social policy can be reduced to a kind of calculation of the consequences of alternative courses of action.  Just exactly what is being calculated and how one measures those anticipated consequences are themselves matters of dispute among holders of utilitarianism.  The well-documented problems with utility can be summarized as follows:  we cannot appeal to consequences without knowing how to rank the impact of different approaches with regard to different moral interests (liberty, equality, prosperity, security, etc.); we cannot appeal to preference satisfaction unless one already grants how one will correct preferences and compare rational versus impassioned preferences, as well as calculate the discount rate for preferences over time; appeals to disinterested observers, hypothetical choosers, or hypothetical contractors will not avail because if such decisionmakers are truly disinterested, they will choose nothing; if we choose in a particular way, we must already be fitted out with a particular moral sense or a thin theory of the good; any intuition can be met with contrary intuitions; any particular balancing of claims can be countered with a different approach to achieving a balance; in order to appeal for guidance to any account of moral rationality on must already have secured content for that moral rationality.  In short, it begs every question.
Jeremy Bentham was among the first to proclaim utilitarianism, and he influenced the development of economics in the latter half of the 19th century and the 20th century.  Specifically, he influenced the development of economics as an allegedly pure science.  A turn to economic science seems to presume that the case for economic liberty, and its relationship to political and social liberty, no longer has to be made. And it also does two other things:  it suggests that the issue of liberty can be reduced to an efficiency issue, and it hides the problem that individual liberty needs to be reconciled with community good.  It suggests that equality can be reduced to a collectivist issue, and it hides the problem that community good needs to be reconciled with individual liberty.  We shall not discuss Bentham, but we do want to note that Bentham was in some ways the “grandfather” of macroeconomics. A.V. Dicey was the first to point out that Bentham’s system evolved into a form of collectivism, thereby crossing the boundary between libertarian and democratic socialist versions of positivism.  Bentham’s principle of utility could give justification to collectivism: the majority was the poor, and the society should be organized for their benefit.  In his book, Lectures on the Relation Between Law and Public Opinion in England during the Nineteenth Century (1885), in Lecture IX, “The Debt of Collectivism to Benthamism,” Dicey spells out how “the socialists of today have inherited a legislative dogma, a legislative instrument, and a legislative tendency from Benthamism.”[62]
William Stanley Jevons (1835 –1882) was a Christian utilitarian who rightly observed that J.S. Mill was not a utilitarian and, worse yet, had abandoned Bentham’s utilitarianism.  Jevons, a mathematician and economist, devoted a large part of his carrier to arguing against Mill.  He aimed to replace the influence of Mill’s Principles of Political Economy with his own book, A General Mathematical Theory of Political Economy (1862).[63] It was this book that marked the advent of a purely mathematical economics.
Henry Sidgwick (1838-1900), economist and philosopher of ethics, wrote on political economy from a utilitarian perspective.  Alfred Marshall, founder of the Cambridge School of economics, would describe Sidgwick as his "spiritual mother and father."  It was Sidgwick who reluctantly admitted that there was no rational foundation to basic moral beliefs.
Alfred Marshall (1842-1924) did succeed in replacing Mill with his own book, Principles of Economics (1890) .[64]  Under the influence of Jevons and Sidgwick, he too was concerned with improving the condition of the working class. The Revolutions of 1848 had focused the attention of Mill and all subsequent British economists on the plight of the working class.  Just as Smith had been forced to come to terms with Rousseau, so Marshall as well as his pupil and successor Keynes would be forced to do likewise.
Following Say, J.S. Mill had assumed along with all classical economists that the great issue  in economics was how to increase “the wealth of nations,” that is, how to increase living standards. The answer was to increase capital.  Value depended upon capital. The higher the underlying productiveness of the economy, the higher will be the level of employment for any given real wage. In short, supply creates demand. As a consequence, “What supports and employs productive labor, is the capital expended in setting it to work, and not the demand of purchasers for the produce of the labor when completed. Demand for commodities is not demand for labor.” (Fourth Proposition on Capital).  Jevons challenged Mill and argued that value depended upon demand.  Marshall combined these two positions and concluded that in the short run, supply cannot be changed and market value depends mainly on demand.  This, as we shall see, leads directly to Keynes.
[62.] Albert Venn Dicey, Lectures on the Relation between Law and Public Opinion in England during the Nineteenth Century, edited and with an Introduction by Richard VandeWetering (Indianapolis: Liberty Fund, 2008). </titles/2119>.
[63.] William Stanley Jevons, "Notice of a General Mathematical Theory of Political Economy." Report of the 32d meeting of the British Association for the Advancement of Science, held at Cambridge in October, 1862. Reports of Sections, p. 158. London, 1863; and William Stanley Jevons, "Brief Account of a General Mathematical Theory of Political Economy," Journal of the Statistical Society of London, June 1866. Vol. xxix, pp. 282-287. London. Online at McMaster University, Archive for the History of Economic Thought <>.
[64.] On Marshall see <> and <>. Alfred Marshall, Principles of Economics (London: Macmillan and Co. 8th ed. 1920). </titles/1676>.