Utilitarianism and Business Ethics1

. . . the creed which accepts as the foundation of morals, Utility, or the

Greatest Happiness Principle, holds that actions are right in proportion as
they tend to promote happiness, wrong as they tend to produce the reverse
of happiness. By happiness is intended pleasure, and the absence of pain;
by unhappiness, pain, and the privation of pleasure.

It seems as though business would be the arena most likely to appropriate Mill’s

utilitarian ethics. Utilitarianism is outcome-oriented, its goal is to bring about the greatest

happiness—i.e., the greatest social benefit—something many companies would like to

believe that they do promote alongside their goal of making a profit. In addition, those

familiar with Herbert Simon’s concept of ‘satisficing’ or the abundance of publications on

‘happiness economics’ may find that the earlier utilitarians may have fruitful things to add

to the discussion. 1 Despite this alignment, strangely, there are only a few articles written

attempting to apply utilitarianism as an ethical theory to business.

Jeremy Bentham and John Stuart Mill are perhaps the most famous promoters of

utilitarianism. While Bentham’s Utilitarianism offer an ethical theory to business which

helps calculate happiness, Mill’s Utilitarianism does this with full awareness of the

importance of sponsoring the higher sentiments. A society which does not support higher

happiness capacities and aspirations will become an animal-like society where the

capacity for better levels of happiness become less possible. Business has some important

power in preserving these higher capacities in society. Further, I will suggest some

business decision-making questions rooted in utilitarianism. Our goal is a utilitarian

business-ethic which evaluates business in terms of its contributions towards higher-

pleasure capacities in society.

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Jeremy Bentham

Utilitarianism is a consequentialist theory of ethics-- utilitarians believe that we

must make our decisions based on what we forecast to be the most pleasurable and least

painful outcome. It is also referred to as a eudaimonianistic theory, meaning that

happiness is the specific desired consequence or goal of ethics. What will bring the happy

consequence to the most is the right thing to do. Since pleasure is the specific form of

happiness which is sought after, it is also frequently referred to as a hedonistic theory,

meaning that its goal is pleasure. Of course pleasure can come from many sources,

including acquiring land, friendships, lasting marriage, health from jogging, or even

intellectual pursuits, in addition to sheer sensual pleasures of taste, touch, and smell.

Jeremy Bentham (1748-1832), one of the early British Utilitarians, said that there is no

hierarchy of pleasures, all are equal qualitatively, and it is up to us to calculate the

quantitative pleasure-value of one act over another in making our moral decisions. If the

quantity of pleasure derived from one is as much as the other, then, in Bentham’s words,

‘pushpin is as good as poetry’. Pushpin is a child’s game, and it is of no less value than

poetry, provided that they provide the same amount of pleasure.

Bentham developed a hedonistic calculus, to be calculated by determining which

act is likely to result in the greatest maximization or happiness overall for the most people.

At times, this may mean I need to sacrifice for the good of the many, for example, by

stepping down from a position for the good of the company, or staying late so the project

is completed on time. At other times this may mean that one person’s good may outweigh

the relatively small pain of a group—for example when we give an arrested man a fair trial

1
Herbert Simon published many works along these lines including the original 1957 Models of Man. More
recent work includes that of Andrew J Oswald and David G Blanchflower (The Wage Curve).

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at the expense of the many taxpayers- because the relative significance of the taxes used

for the trial are insignificant in comparison with the good of his fair trial.

Bentham said that in each instance, we must consider the following aspects of the

forcasted outcome:

1. Intensity: How intense will the pleasure be from this action?

2. Duration: How long will this pleasure last?
3. Certainty: How likely is it that this pleasure will actually take place?
4. Remoteness: How far away is the hoped-for pleasure outcome?
5. Repeatability: How likely is it that this will be a repeatable pleasure?
6. Purity: How much pain will accompany the pleasure produced?
7. Extent (number): How many will be affected with either pleasure or pain?

These principles are quite practical. We do consider how extensive the return is

when we evaluate an investment possibility (intensity). We consider how long the benefit

will last (duration). We consider ‘how sure of a bet’ this investment is (certainty). We

often disregard unlikely scenarios, consequences hundreds of years from now, etc

(remoteness). We consider the potential repeatability of our actions—for example, if I

steal, I may never work here again, or anywhere for that matter (repeatability). We

consider the negative consequences along with the benefits (purity), and we finally

consider the overall benefits for the many (extent).

This type of calculus happens in business. As an example, Abbott Laboratories

last year raised the price of their HIV drug Novir 500% (from 1.71 per day’s dosage to

8.57 per day) This left Novir still remarkably cheaper than similar drugs, and Abbott

claimed that it would help pay for costs of research for cancer drugs—some pain was

accepted in return for greater pleasure/benefit for the many. Abbott provides the drug free

to some who lack healthcare, and have been helping countries like Africa to distribute the

drug at low cost. Critics claim that Abbott could lower their profit margin to direct more

money to research, but of course Abbott’s investors want returns on their money which

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make Abbott an attractive investment. Using Bentham’s calculus, Abbott had to consider

the displeasure of HIV-drug purchasers against potential pleasure of those who benefit

from the research the increased costs would support. Second, they had to consider how

long that displeasure from cost increases and pleasure of new breakthroughs would last.

Third they needed to consider how certain is it that they could actually achieve that

pleasure of making progress in research, since it was quite likely that people were

displeased with the cost increase. Fourth, Abbott should consider how far away the hoped

for pleasure is—is the cancer research likely to come soon, or is it 50 years away? In

addition, they had to consider the displeasure of their investors if they told them that

profits would be down for many years in order to support research for long-term benefits.

Investors can be patient, but not indefinitely so. Fifth, Abbott would consider whether the

pleasure from the cancer research would be repeatable—it does seem that it would have

ongoing repeatable benefits if in fact a better cure was found. Sixth, they needed to take

account of the possible pain involved in this decision—would some go without the

medicine due to the increased cost? Abbott did provide ways for low-income people not

covered by health insurance to obtain the drug, to alleviate this problem. Seventh, they

needed to think of the way in which many different people would be affected—

stockholders, users of Novir, insurance companies, the poor, their research lab, those who

could benefit from the research, etc. In following the Greatest Happiness Principle,

Abbott would need to accept responsibility to bring about the greatest happiness for the

most, not just for Abbott. But of course, Abbott does a great deal to benefit many people.

To provide short term good of cheaper drugs may cause long-term negative consequences

for the companies profits, which could lead to long term negative consequences for their

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research abilities, which would lead to long term negative consequences for society. All

of these things must be considered.

To those familiar with the term ‘satisficing’ or the recent explosion of literature on

‘happiness economics’, this pleasure calculus may sound familiar. In his 1957 work

Models of Man Nobel Prize winner Herbert A. Simon first introduced the concept of

‘satisficing’.2 On this model, instead of achieving the optimal-maximum result, one aims

for a satisfying result—one which will provide satisfactory happiness, if not maximal

happiness. In many cases it seems that it would be more rational to achieve a satisfying

result resulting in actual happiness, rather than not being satisfied until the optimal result

occurs. Why be dissatisfied that you could not achieve perfection when you can achieve

something quite pleasing and completely satisfying, despite its not being the best of all

possible results? We see the problem of maximal-oriented decision making practically in

many work situations where a perfectionist has difficulties finishing a project because

there is always ‘just one more thing to adjust’ to make the project better. In such cases we

realize that it is better (and will bring about more happiness) to achieve the closer-at-hand

satisfying result rather than perpetually put off the maximal result. We almost always

have limited timeframes for our decision-making, and limited resources to learn the

consequences of our actions. But we must make our decisions within these bounds.

This was what Simon referred to as ‘bounded rationality’—we have limits within which

we must strive for the most satisfying solution possible (given our situated limits). This

relativization of the framework of decision making is more practical. If one waits until all

possible data is received, it may be too late to make a decision. So we must often simply

2
One of the earliest attempts to apply the concept of satisficing to business is Cyert and March’s A
Behavioral Theory of the Firm (1963). Other more recent literature on measuring happiness in general
include Well Being: The Foundations of Hedonic Psychology by Kahneman, Diener and Schwarz (1999).

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make decisions based on the information we have. To make a decision with limited

information is better than to not make a decision at all. Other recent economists,

focusing on happiness, have built on Simon’s work to suggest that economics should

judge economies based on the happiness they produce, rather than the bottom line alone.3

Bentham’s hedonistic calculus can be seen to be a precursor to this upsurge in

‘happiness economics’. But while much of this makes good sense, it appears that there

are some problems with Bentham-style utilitarianism as an ethical theory.

Perhaps the most damning criticism is that utilitarianism doesn’t appear to

adequately support principles of justice, fairness, truth telling, etc. If it would bring more

happiness to the majority to not provide a fair or just trial, then the interest of the many

would override the interest of the one, it would seem. If our company signs a contract

with a dealer, but later finds that honoring that contract would cause a great deal of pain

for the company, its customers and employees, and other stakeholders, then the right thing

to do would be to break promises made in the contract, due to the new information. One

can imagine scenarios where it would appear to bring more happiness in the end if a

company or individual lies, cheats, steals, acts unfairly, etc.

Another criticism may be that even on this hedonistic calculus, sometimes the bad

consequences don’t nearly outweigh the benefits of wrong conduct. This we see in cases

where a company happily pays a fine for doing immoral and illegal activities since

committing those illegal acts nets it hundreds of times more money than the cost of the

fine. Satisficing as a method of decision making seems to face similar criticisms—

compromise becomes always the better choice, and sacrificing for the sake of principle

3
See Bruno S. Free and Alois Stutzer’s Happiness and Economics: How the Economy and Institutions Affect
Human Well-Being. (2001) or Ed Diener and Eunkook M Suh’s Culture and Subjective Well-Being (Well
Being and Quality of Life) (2000); Or see: The Economist July 25, 2002.

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becomes irrelevant. In short, a pursuit of satisficing will always choose what will suffice,

rather than sacrifice for the sake of a principle.

The question, then, for the utilitarian, is: how can utilitarianism provide a basis for

ethical behavior when its consequentialism seems to undermine the very moral principles

(such as justice, fairness and truth telling) which we normally consider to be moral starting

points?

I. Mill’s Revised Utilitarian Principle

John Stuart Mill (1806-1873) claims that Utilitarianism “holds that actions are

right in proportion as they tend to promote happiness, wrong as they tend to produce the

reverse of happiness.”2 But despite this initial agreement with Bentham, Mill, in contrast

to Bentham, claims that there are two classes of pleasures—higher and lower. We have

capacities for higher and lower pleasures. We desire food, sleep, breathing, and sensual

pleasures, and these are not bad. But these lower pleasures have a lower quality and are

lower in the sense that they are not unique to us, and are shared with squirrels, dogs, rats,

etc. To live for lower pleasures would be to live like a dog. Mill says “a beast’s pleasures

do not satisfy a human beings conceptions of happiness.”3 Its not that we shouldn’t like

to eat, or that we should despise these sorts of pleasures we share with animals. The point

is rather, that we shouldn’t have these as our higher aspirations and meaning for being. If

your meaning in life is eating, you have a problem. If you meaning in life is to sleep, you

are depressed. If your sole purpose in life is to have sex, most would say you have a

shallow existence. Human beings should have higher goals and higher pleasure capacities

than that animals.

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 Critics frequently attack Mill’s higher-lower pleasure distinction with objections

like: if I am extremely hungry, by Mill’s principle, I would have to choose an ounce of

Roquefort cheese over a pound of cheap mild cheddar, or if I was thirsty, I should choose

a small amount of a top-quality bottled water over a gallon jug of tapwater. These sorts of

criticisms are irrelevant, and misunderstand Mill. These examples, it is easy to see, refer

to differences in quality between the same kinds of things. Here the distinction is between

higher and lower quality food, etc. On this logic, I would choose a bumper of a Rolls

Royce, over a complete inexpensive Hyundai with a 100,000 mile warranty, etc. But that

is not Mill’s point at all. He is talking about distinguishing higher-types from lower types,

but he is not suggesting this for making inner-type distinctions necessarily.

But Mill is also not suggesting that one should always choose the higher over the

lower. Sometimes it is good to sleep, sometimes one should eat. Mill is not advocating

people starving to death at the opera house, or suffering from sleep-deprivation in order to

read the encyclopedia. His point is simply that we can usually identify one pleasure to be

of higher quality than the other.

Higher Pleasure Capacities

But what are these higher-pleasure capacities? Mill mentions these four4:

1. Pleasures of the intellect: literacy, logic, emotional intelligence, etc.

2. pleasures of the noble feelings: sympathy, heroism, empathy, humility, courage

3. pleasures of imagination: moral imagination, creativity, innovative thinking

4. pleasures of the moral sentiments: justice, honesty, fairness

Certainly we might train ourselves to be content with the bestial pleasures alone—but no

one would really agree that such a life was better than the non-bestial life.

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 If people in society lose their higher capacities, the overall societal possibility for

pleasure is lost. In other words, societal pleasure-maximization rating goes down.

Consider the consequences of a loss of moral sentiments: Think, for example, of a society

in which one cannot trust that others will act decently—a society in which one person may

decide to shoot another, or where one person might decide to strap a bomb to herself and

kill a group of others. In such a case, she no longer has an appreciation of moral

sentiments about justice or fairness. When these capacities are lost, society will not be as

happy. In the same way, a business which loses these basic moral sentiments will be less

able to produce pleasure for the many. We value sentiments like justice, fairness, and

honesty because to do so will ultimately lead to a greater happiness potential for all. Mill

says that we value virtue as we value money—for what it will DO for us. But, just as we

often forget why we want money, we forget why we want justice—we just do want it. But

the reason we want justice, says Mill, is because a society in which we want justice is

better able to make us happy.

Consider the happiness which is brought about by noble feelings like heroism:

This feeling, when nurtured in society, brings about bravery in the face of danger, the kind

of bravery which leads firefighters and policemen to risk their lives, or leads a parent to

provide and sacrifice for her family. If these sentiments are lost, then society as a whole

suffers and loses important happiness- possibilities. In the movie Blackhawk Down the

marines had a motto, and it was “never leave a man behind”. That was something they

followed, even when it meant risking men’s lives to try to save injured soldiers. They had

this principle which put others in harms way. But the reason that they had this principle

was that maintaining that motto preserved morale among the men. Knowing their fellow

soldiers would come to rescue them if they went down gave them courage. In other

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words, the purpose of the principle was that this principle would bring more pleasure than

not maintaining it and giving it up when inconvenient. In the same way, maintaining

particular ethical principles at work, even when not immediately convenient, will in many

cases bring about greater capacity for happiness in the company, and also society at large.

Consider the loss of intellectual or imaginative capacities. A society which loses

its ability to think and dream cannot be as happy as a society which educates people to

think for themselves and to creatively respond to life situations and opportunities which

arise. In the same way, a company which does not empower its employees by nurturing

their intellectual and imaginative capacities is likely to be less competitive, less capable of

dealing with change, and less able to maintain a positive future.

On Losing Higher Capacities

Now if higher pleasures are so very important, then how or why do we lose them?

The very capacity we have for higher pleasures may be lost, according to Mill, and often

is in our day-to-day living which often neglects pursuits of the higher pleasures:

Capacity for the nobler feeling is in most natures a very tender plant, easily
killed, not only by hostile influences, but by mere want of sustenance; and
in the majority of young persons it speedily dies away if the occupations to
which their position in life has devoted them, and the society into which it
has thrown them, are not favourable to keeping that higher capacity in
exercise. Men lose their high aspirations as they lose their intellectual
tastes, because they have not time or opportunity for indulging them; and
they addict themselves to inferior pleasures, not because they deliberately
prefer them, but because they are either the only ones to which they have
access, or the only ones which they are any longer capable of enjoying. It
may be questioned whether any one who has remained equally susceptible
to both classes of pleasures, ever knowingly and calmly preferred the
lower; . . .5

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One must be careful to maintain the higher capacities, like a gardener caring for a plant.

Most don’t lose them intentionally, but only inadvertently. First, we don’t take time or

opportunity to indulge and strengthen those higher pleasures, and second, we addict

ourselves to lower pleasures. Our business culture may either foster or hamper these

capacities. Insofar as we discourage the higher capacities, or simply sponsor neglect of

those capacities, we are undermining the very possibility for those higher pleasures in

ourselves and others. We need to consider how our work situations nourish or diminish the

higher capacities. We need to maintain work environments which are favorable to keeping

the higher capacities in exercise. This is not merely the responsibility of management—all

employees should be nurturing their higher capacities as well-- but there is some degree of

responsibility which management must take to nurture these capacities, and certainly to try

not to undermine them. But business should also realize that it plays some role in

nurturing or diminishing these higher capacities in society at large through its methods of

advertising, etc.

Today business can become all-consuming, and when this happens, one is left with

little energy for ethical concerns or pursuit of the higher pleasure capacities. The less that

our work demands allow us to pursue higher pleasures, the less likely we are to be

concerned about such matters. Mill saw this in his own day:

Instead of great energies guided by vigorous reason, and strong feelings

strongly controlled by a conscientious will, its result is weak feelings and
weak energies, which therefore can be kept in outward conformity to rule
without any strength either of will or of reason. . . . There is now scarcely
any outlet for energy in this country except business. . . . What little is left
form that employment is expanded on some hobby, . . . and generally a
thing of small dimensions.6

It is widely held that many business scandals happen not because of one or two bad-

apple employees, but because of the entire work-culture of certain corporations. When

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particular moral sentiments and noble feelings are lost, the net result will ultimately be

unhappiness. When we lose the capacity for moral imagination, and stupefy ourselves to

numb our conscious from the real consequences of our actions, we are acting against the

greater happiness principle, and our behavior is unethical.

The Loss of Higher Capacities, and the Loss of Moral Conscience

A common objection to the claim that some pleasures are higher is, if they are so

much more pleasurable, then why is it that so many people neglect them? Mill’s answer is

clear: “Men often, from infirmity of character, make their election for the nearer good,

though they know it to be the less valuable . . . They pursue sensual indulgences to the

injury of health, though perfectly aware that health is the greater good.”7 In such a

situation, one has it on good authority that they should choose the higher good, but they

don’t, but rather postpone it, because it is easier in the short run to do so. In Mill’s

opinion, they are either lazy or shortsighted. People generally do immoral things not

because they enjoy the harm caused by their actions, but because they try not to think

through the consequences of their actions. The people harmed by their action are at a

comfortable distance, so those effects seem quite remote to the immediate personal

pleasure of ill-gotten gain. A company, for example, might think only of the quarterly

report, not considering the long-range effects of repeatedly misrepresenting earnings over

the course of two or three years. They have lost their moral imagination, or capacity to

imagine the distant effects of their immediate actions.

We make wrong decisions all the time—choosing the worse of two options,

knowing in our heart that they are wrong. This applies to higher vs. lower choices, for

example when one decides to watch sitcoms daily instead of following through on your

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promise to yourself to learn some Spanish, or the guitar. But it also applies to your

choices between better sensual vs. worse sensual choices, for example choosing to watch

sitcoms over beginning that exercise regimen that you’ve been planning to start, despite

the fact that you know you will ultimately feel much better if you get healthy through

exercise. I may choose to eat the unhealthy desert instead of abstaining, I may choose to

smoke a cigarette instead of not. In business I may chose to report accurately, or chose to

make my numbers look better than reality. But these bad choices are eventually

habituated after repeated practice, insofar as I act almost as if out of instinct when I make

them. Soon I am by habit doing that which is not in my long term best interest. But this

just shows that I am not functioning to my highest ability.

Only a fool prefers the bliss of self-harming behaviors done in the bliss of

ignorance over the struggle involved in living life intelligently awake. Mill says, “No

intelligent human being would consent to be a fool, no instructed person would be an

ignoramus, no person of feeling and conscience would be selfish and base, even though

they should be persuaded that the fool, the dunce or the rascal is better satisfied with his

lot than they are with theirs.”8

The Social Nature of Utilitarianism

Why should we want to do what benefits the many? Mill writes extensively about

the importance of education, particularly education of the sentiments through poetry and

art to help us develop social sympathy. The utilitarian principle is essentially social:

That standard is not the agent’s own greatest happiness, but the greatest
amount of happiness altogether; and if it may possibly be doubted whether
a noble character is always the happier for its nobleness, there can be no
doubt that it makes other people happier, and that the world in general is
immensely a gainer by it.9

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Mill thinks that when we are functioning properly we will both be socially concerned and

be happier for that social concern:

When people who are tolerably fortunate in their outward lot do not find in life
sufficient enjoyment to make it valuable to them, the cause generally is, caring for
nobody but themselves. To those who have neither public nor private affections,
the excitements of life are much curtailed, and in any case dwindle . . . Next to
selfishness the principal cause which makes life unsatisfactory is the want of
mental cultivation. . . . [a mind] which has been taught, in any tolerable degree, to
exercise its faculties—finds sources of inexhaustible interest in all that surrounds
it;’ in the objects of nature, the achievements of art, the imaginations of poetry, the
incidents of history, the ways of mankind past and present, and their prospects in
the future.10

An increase in public affections, social concern, and a cultivation of the mind lead to an

increase in happiness, or at least the potential for happiness, according to Mill. What he

calls a ‘web of corroborative association’ is that consciousness which provides a firewall

of protection against immoral behavior. It is built up, like a plant, through nourishment

and cultivation. From an initial germ (the natural capacity) it actualizes into the solid

basis of our moral behavior. Mill’s ideal here is a situation where any given individual

would seek the happiness of others as equal with his own happiness

But this sort of social sentiment comes only when one has developed one’s higher

capacities, according to Mill. And these higher pursuits which make life so worthwhile and

enjoyable can be put aside, neglected, and eventually lost, if due care is not taken: “It is possible,

indeed, to become indifferent to all this, . . . but only when one has had from the beginning no

moral or human interest in these things, and has sought in them only the gratification of

curiosity."11

Moral behavior is sometimes encouraged by external rewards or consequences:

perhaps as a child I am polite to the elderly for fear of retribution or disgrace from my

family, when I am older I am kind to the elderly because of real concern which I have

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developed through nurturing over time. This education of the feelings and sentiments is

not academic, but habitual. It is more like training in the sense of piano playing or sports

than in terms of being educated in history or geography. The end result of such training is

a general sense of duty which I have, not from fear of outside retribution, but a desire to

fulfill my self-imposed obligations. Fulfilling these obligations makes me pleased, while

not fulfilling those obligations makes me displeased. In other words, most of our actions

are guided not simply by internal motives of duty, but by motives of passion, fear, or

other such feelings. But this complex web of reasons which under gird our moral

behavior is a very powerful, if mysterious, force.

For example, I may resist the temptation to embezzle money for a variety of

internal and external sanctions, both positive and negative. I may not want the negative

external sanctions of possible shame in the public eye or possible prison. I may also not

want to face the personal guilt which would follow such an act. Positively, I may want the

enjoyable sense of knowing I did the right thing, and I may enjoy the positive external

sanction of the affirmation I will receive from my colleague or friend when I tell them of

my successful resistance to temptation

A love of virtue and a vision of the ideal lives which are presented to us through

stories and other means will sustain our moral desires, and help instantiate moral action.

This is why we encourage business leaders to read biographies of outstanding visionaries

and leaders. This is why we would rather children read accounts of Martin Luther King,

Jesus, or Anne Frank, than to read stories glorifying theft, lying, or selfish behavior. As

my imagination is directed towards beauty and a desire and even reverence for the higher

pleasures, I will become more and more ‘naturally’ inclined towards right actions. This

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happens as my feelings are directed appropriately, or when my conscientious feelings are

nurtured and strongest in me.

It is essential in business that we nurture and build up this mass of feeling in favor of the

principles which will ultimately bring about a greater potential for happiness in society. Of

course most will agree that the ‘right’ thing to do is to do what will benefit the most—but what

people lack is the motivation to do the right thing. People often criticize utilitarianism for being

untenable, because there is no motive for the one to be willing to sacrifice for the many—a

requirement which seems to follow from the utilitarian principle. Those who pursue the higher

pleasures will be capable of such a sacrifice. This, then, is why Mill says, “Utilitarianism,

therefore, could only attain its end by the general cultivation of nobleness of character, even if

each individual were only benefited by the nobleness of others, and his own, so far as happiness

is concerned, were a sheer deduction from the benefit.”12 One of the key distinguishing features

of Mill-utilitarianism is that he claims we must choose the higher pleasures over the lower, and

nurture our propensity and habits to do so.

Distinguishing Higher from Lower Pleasures

“What means are there of determining . . . except the general suffrage of those
Who are familiar?” -- Mill

A question often asked is, how can one distinguish higher from lower pleasures?

Mill provides at least four different criteria in his writings. These four principles can be

written shorthand as follows:

P1: If a person who is competently acquainted with two pleasures prefers one to the other
even though a) they will be attended with a greater amount of discontent and b) they
would not resign it for any quantity of the other pleasure which their nature is capable of--
then the pleasure preferred in this way is a higher pleasure than the other.

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 One would not, for example, be willing to sacrifice one’s literacy (one aspect of

one’s capacity for intellectual pleasure) for one’s ability to enjoy Bratwurst (one aspect of

one’s capacity for sensory pleasure). We would respect a family who denied themselves

one meal per week and set aside the savings in order to by a computer or encyclopedia, for

example. Someone who doesn’t know how to read may not understand this sort of

choice, but that proves Mill’s point.

P2: Only those pleasures which arise from faculties unique to human beings are higher
pleasures.

Sensual pleasures including eating, sleeping, breathing, or any physical pleasure would

not be unique to humans. Those which involve the use of our intelligence, imagination, our

noble feelings or moral sentiments would be unique to humans.

P3: Higher pleasures will be those which can be chosen without a loss of pride, liberty, or
dignity by the one who chooses it, provided that the one who is choosing has some
admirable degree of pride, liberty, and dignity.

Of course if one is shameless, then this principle has little use. But for one who

has a degree of dignity, shameful behaviors will spark a healthy degree of a sense of loss

of dignity. We know we have many ‘guilty pleasures’—things from which we gain

pleasure of which we are ashamed. These are likely not higher pleasures. Behaviors

which ennoble the spirit and which one would model shamelessly are key candidates for

higher pleasures.

P4: If X is a higher pleasure, then it will stimulate our imagination to rise above known reality
towards ideals beyond the regular world, and it will also be limitless.

Mill is certainly not talking about anything religious here. But he is saying that higher

pleasures help us to rise above ourselves, to be motivated by ideals—things which are only

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dreams today, which we hope for. Higher pleasures are also unique in that, the more we use

them, the more we are able to enjoy them. The more you read, the more you enjoy reading. The

more you think about things, the more you enjoy thinking about things. It is not a desire which

is fulfilled temporarily, like eating or sex—it grows more as you use it.

How Does Mill’s Qualitative Utilitarianism Apply to Business Ethics?

The question now is: how can business use this utilitarianism of Mill? From the

previous four principles, we could derive the following principles for choosing the higher

pleasures when faced with alternative options:

1. Which option would one well-acquainted with both most likely choose?
2. Which option is unique to humans, and not a mere animal pleasure?
3. Which option can be chosen without loss of pride, dignity or liberty?
4. Which option inspires the imagination to noble ideals and higher goals?

For example, if I am going to advertise a product, I could use these criteria to help me decide

what sort of advertising I think is more or less moral by attempting to decide which advertising is

more or less harmful to the higher sentiments in society.

We can also derive some like-minded principles from what we have learned from Mill. I

think we can derive the following series of questions from what we have seen in Mill, and these

questions could be referred to when making a decision:

1. Does this decision nurture or undermine the higher social sentiments of society?
2. Is this decision going to have an impact on people’s conscience? If so, would it tend to
undermine or nurture the conscience of people?
3. Through this decision, am I encouraging people to be selfish or socially minded?

There is no doubt that answering such questions requires a degree of judgment—an ability

to decide, and a character which is functioning well—a character whose higher sentiments

are being nurtured.

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Objections and Responses

At this point, I will suggest and respond to three objections to a business Utilitarianism

based on Mill. First, some think Mill is an elitist, and may say that his higher-lower distinction is

arbitrary and he seems to have a predisposition which is inclined against business and other

professional fields. In short, who is he to make such value claims for the rest of us, and why

should we bother to listen to him?

Mill does certainly say some pleasures are higher than others, and some do resist these

universal claims. Despite this, I think that intuitively most people would agree with him that a

society which would sacrifice intelligence, imagination, and sentiments like justice, fairness,

heroism and courage for short term pleasures of sex, food and superficial entertainment is going

to be worse off than the society which values intelligence and justice more highly.

Secondly, utilitarianism has often been associated with a defense of free markets.

Utilitarian defenses claim that the greater general good is achieved if we allow markets to

work out without interference from government or other agencies. Downsizing,

outsourcing, and other painful economic events will be less painful if allowed to play out,

rather than interfere and cause more long-term trouble. In addition, it is often believed

that utilitarianism fits nicely with Milton Freidman’s mantra that the sole purpose of

business is to produce wealth for the stockholders, so that the utilitarian would be against

any moral concern on the part of the executive, apart from obeying the law—which seems to

be a crass cost-benefit analysis, not ethics.

Two responses are possible. First, one could simply say that the utilitarian does

believe that unfettered free markets will in the end bring about the most good and so they

are in fact the most moral choice, despite short term pains. But another option would be to

argue that Utilitarianism and Free market capitalism are not necessary bedfellows—

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utilitarianism does not necessarily imply free markets, or Freidman’s vision of the purpose

of business.

Mill does speak against government interference in On Liberty. But he does not say

that the fiduciary responsibilities of an executive prohibit them from making decisions

which benefit society, sometimes at financial cost to the stockholders. Perhaps it can be

argued that total free markets are one way to best benefit society, or that Freidman’s

analysis will bring about the most good, but it seems that these are not necessarily the only

conclusions for a utilitarian.

Mill does say we should allow people liberty, so long as they don’t impose on the

freedom of others. But Mill also argues that education of moral sentiments and social

pressures of custom are the means of instantiating morality in society and so, putting

pressure on people and businesses to conform. The Hidden Hand of Adam Smith’s Free

Market Capitalism is, for Mill (as it is for Smith), guided itself by the well-educated and

habituated moral sentiments which direct our decision-making. Neither Mill or Smith’s

utilitarianism conceives of the market or the executive as existing in some sort of moral

vacuum, detached from the customs, norms and moral education of society. The executive

who only turns to the law as a basis for his conscience is ethically malnourished and anemic,

by the standards of any robust social utilitarianism like Mill or Smith’s.

Third, some will suggest that Mill’s utilitarianism is impractical and basically useless to

business, because it is not the job of business to create moral attitudes in society, it is the

responsibility of business to make money within the bounds of the law (a la Milton Friedman).

Response: That is clearly the legal and fiduciary responsibility of business. It is my legal and

fiduciary responsibility to not steal money at work. But there are uniquely ethical responsibilities

and goals which go above and beyond those legal responsibilities. Those ethical goals and ideals

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may at times be quite high. But that’s what ethical goals are for—they are there to tell us how to

achieve the best good life, not a ‘pretty decent’ life. The Mill-utilitarian vision of ethics asks us,

what kind of a person do you want to become, what sort of society will provide the most

happiness, and what are your actions doing to sponsor or take away from an ideally happy life and

society in the highest sense of that word? Business, as one of the most powerful societal

influences in the Western World, plays a large role in shaping and forming expectations, desires,

and habits. Insofar as this is true, it has an implicit obligation to examine those goals which it

puts before us and demands of us because business is not merely the result of society, business

practices and behaviors make up society to a great extent, and certainly shape values, goals,

motives, and lifestyles beyond the workplace.

Drawing Some Conclusions

In Mill’s utilitarianism, the development of social feelings and sentiments is essential for

the morality of individuals. External sanctions are not enough, and internal sanction of duty,

along with the other internal feelings of social sympathy provide the necessary foundation for

authentic moral behavior. It is essential that the individual understand himself as being within a

social matrix web, and essential for business to see how it has an effect on that social matrix.

Habits of thinking and feeling this way are to be nurtured through a variety of educational means.

If we listen to Mill’s utilitarianism, we are left with an obligation to reflect on how the

institution of business is molding our desire and habits, and how that we are making a difference

in that institution. But beyond obligation, it will be in our best interest over the long term to help

foster higher pleasure capacities in society, because this will ensure a higher possibility of

pleasure for all. It is often said that business is ‘utilitarian’ in nature. If it adopts Mill’s

utilitarianism, it will begin to be concerned not only with outcome with regard to bottom line

financial gain, but the effects which its practices have upon the happiness-achievement capacities

of society. This is Mill’s vision of utilitarianism, and it provides an interesting and exciting

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model for business ethics, when properly understood. Certainly much more work remains to be

done in applying this social utilitarianism to business.

I have provided some relevant business ethics questions generated by consideration of

Mill’s view of the higher pleasures and concern for the greatest possible social happiness. Some

final questions for thought, after reading Mill and understanding his social-utilitarianism would

be:

1. Do we think of our business decisions as having an impact on cultural values?

2. If our marketing plays a role in directing people’s desires, what sort of responsibility do we
have, and how should that affect our strategies and aims?
3. Is our business helping to make society a better place where higher levels of happiness are
possible, or are we helping to undermine society’s capacity for higher pleasures?
4. Has our business developed means of instantiating and/or nurturing internal sanctions
(conscience), in addition to punitive external sanctions?

ENDNOTES

1
Special thanks to Pat Werhane, Kevin Gibson, Tom Donaldson, and students at Bethel
University and Creighton University for their encouragement and support of my work on
Mill and review of various sections and ideas contained in this essay.
2
J.S. Mill, Utilitarianism. Ed. By Roger Crisp (New York: Oxford, 1998) 2.2.1
3
Mill, Utilitarianism 2.4.9 [Chapter 2, Section 4, Line 9]
4
Mill, Utilitarianism, 2.4.17
5
Mill, Utilitarianism 2.7.15
6
Mill, On Liberty, 135.
7
Mill, Utilitarianism, 2.7.4
8
Mill, Utilitarianism 2.6.4, This is much like St. Augustine who, at one point in his Confessions,
writes of seeing the town drunk blissfully blasted out of his mind, laughing furiously, and for a moment,
Augustine envies this drunk’s happiness, but soon reconsiders and realizes that this bliss of ignorance would
not be able to satisfy him.8 Such bliss is the bliss of one who has lost the capacity for higher pleasures and
so, no longer realizes what he is missing.
9
Mill, Utilitarianism, 2.9.5
10
Mill, Utilitarianism, 2.13.16.
11
Mill, Utilitarianism, 2.13.32
12
Mill, Utilitarianism, 2.9.9

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