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< | Utilitarianism As a Pretextual Justification for Self-Interest Decisionmaking | >
> | The Weaknesses and Corruption of Macro Cost Benefit Analyses in Redistributive Policy | | | | |
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< | -- By DesireeMoshayedi - 24 Feb 2021 | >
> | -- By DesireeMoshayedi - 16 May 2021 | | | | |
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< | Utilitarianism is the ethical theory that generally views the morally right action to be the one that produces “the most good." If you google “most popular ethical theory,” utilitarianism is the first to show up. Utilitarianism has been used as an ethical justification for business decisions, policy decisions, as well as personal decisions. However, because of the inherent administrative flaws of utilitarianism, it is often simply a pretextual economic justification used to further the self-interest of society’s decisionmakers. | >
> | I) The Structural Issues of Cost Benefit Analysis in Policy Making | | | | |
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< | I) The flaws inherent in utilitarianism – how to calculate “the most good”: | >
> | Because of the impossibility of calculating the exact result of a policy and the cost of taking everyone’s individual values into consideration, cost benefit analysis is flawed system of decision-making. It often presupposes that the world is a closed and controlled system and that outcomes of policies are calculable and quantifiable through economics. Economics takes as truth that human beings are purely rational beings and take little notice of the immense role that emotions play in decision making. While economics can be useful for guidance in unprecedented situations, results historically do not follow economic predictions exactly, if at all. In addition, the purely administrative difficulty of taking everyone’s individual interests into consideration forces decision makers to consider the costs and benefits on macro scale. Politicians consider the interest of the “average American,” who does not exist. The wage gap has all but eliminated any notion of the “average American.” Considering policy for a country on the macro scale may be efficient, but creates a model divorced from reality. | | | | |
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< | What does “the most good” mean? The “most good” is generally a calculation of the relative costs and benefits incurred by affected parties, but who counts and how is their interest valued? These questions leave room for subjective answers from partial decisionmakers. | >
> | II) Arguments Based on Incomplete Models | | | | |
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< | A) Who counts as an affected party? | >
> | Blindly following economic principles for determining potential outcomes of their policies, politicians fail to consider history, psychology, and the realities of our world. To elaborate, one can consider the contrasting arguments continuously made for and against minimum wage increases. | | | | |
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< | Throughout history, utilitarianism has been used to justify exploitation, though the argument can easily fail when considering the interests of those exploited. One of the most influential utilitarians in the United States, Thomas Cooper, used a utilitarian approach to justify slavery. Comparing the agrarian slavery society of the American South to industrialized societies in England, he concluded that slavery promoted the economic interests of the nation. The working class in industrial societies were, as Cooper described it “condemned for life to at least twice the labor of our slaves” and in the American south, the institution of slavery afforded the white working class less laborious and “miserable” lives. Additionally, Cooper argued that paid labor would make the southern agricultural industry unprofitable – that slavery was necessary for the sustenance of the nation. Cooper looked to the common reading of scripture at the time, that black slaves were the “moral and mental inferior of the master race” to justify excluding the slave’s interests. Animal, environmental, and immigrant exploitation are justified along these same utilitarian lines. | >
> | Increased minimum wages have been argued not to pass cost benefit analysis because it increases the cost of doing business, which lowers production, leads to layoffs, and disincentivizes job creation. In addition, people argue that by raising the minimum wage, companies would increase the price of their goods and services and inflation will follow. Following the laws of economics, increased minimum wage benefits no one. | | | | |
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< | Who and what should count toward the calculation of “the most good”? Should one take into account the environment, animals, immigrants, people from other countries? How about unborn people with future interests? How should they be weighed? Should the interest of the President of the United States be valued higher than a felon? It is impossible to take the effects of everyone and everything that could be affected by a particular decision. Our ability to take everything in consideration is limited by time, research manpower, culture, and the inability to verifiably see all the future effects of our actions. As a result, the decisionmaker ultimately chooses whose interests merit consideration. | >
> | On the other hand, looking historically, when minimum wages have been raised, inflation has not followed. For businesses, higher minimum wages have been shown to increase productivity, following Akerlof’s “efficiency wage” theory. A study by the International Labor Organization shows that in cities with increased minimum wages, company survival rates increased with no negative repercussions on employment. Higher wages can also result in lower turnover and in turn, reduced training costs - ultimately increasing profits for businesses. Increased wages would also lead to more spending and a greater GDP. Finally, according to a report by the Congressional budget office, increasing the federal minimum wage to $15 an hour by 2025 would raise wages of up to 27.3 million people and help 1.3 million families out of poverty. | | | | |
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< | B) How do you value a benefit or a cost? | >
> | With these facts in consideration, it seems obvious that an increased minimum wage will have significant widespread benefits at a minimal cost if any. If so, why are so many politicians against it? Why are minimum wage increases continuously shut down? | | | | |
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< | Beyond who should be considered and how much weights should their interests carry in the calculation of “the most good,” how does one place a comparative value on the costs or benefits of each interest? Tort law shows that it is possible to put a dollar value on intangibles by considering what dollar amount would make a person equally happy as prior to the wrong. But is money the best metric? A homeless man would value each individual dollar more than Bill Gates. Although money value may be the easiest in terms of calculation of “the most good,” equivalating the dollar value across people of differently privileges privileged background leads to decisions that ultimately benefit the wealthy. | >
> | III) Corrupt Representation of Inaccurate Models as Truth | | | | |
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< | In addition, when you ask someone how much something intangible is worth to them you may get a far different answer then when you guess yourself. What is the dollar value of John’s pride, Sarah’s enfranchisement, or Michael’s future granddaughter’s opportunity to achieve the American Dream? Cooper, looking to poverty-stricken Haiti in defending his pro-slavery utilitarian argument, argued that slavery protected black people by providing food, discipline, and security, and that without it, their condition would actually deteriorate. When a businessman is presented with the choice of whether or not to outsource labor to a developing country with a lower minimum wage, he does not ask the current employees the dollar value of being laid off or the value of the loss of local culture in the developing nations. He immediately looks to his own financial benefits of outsourcing and rationalizes that by outsourcing, he is offering a higher wage to the overseas workers than they would be offered for a similar job. | >
> | These incomplete models of the world used in cost-benefit calculus makes it a useful tool to present policy decisions as truths when they are often nothing more than a pretextual justification for decisions made in the best interest of those most powerful in society. Politicians are given all of the facts. They know that the economic evidence conflicts with reality yet choose to present their reasoning as fact. Why? Either they simply do not believe in it, or they are choosing the explanation that best fits their desired result. The calculus leaves room for these choices as to what matters and how much, allowing the most powerful people in society (businessmen, politicians, and government officials) to choose the argument that best fits their self-interest (being, for most men and women in the world, money and power) and portray as in society’s best interest with a mathematical argument to convince people of its truth. | | | | |
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< | II) The inability to accurately calculate “the most good” makes utilitarianism nothing more than a pretextual ethical justification for what is ultimately in the decisionmaker’s own best interest.
The utilitarian argument, with its vagueness and incalculability, leaves room for these choices as to what matters and how much, allowing the most powerful people in society (businessmen, politicians, and government officials) to choose the argument that best fits their self-interest (being, for most men and women in the world, money and power) and portray it as objectively ethical.
The primary objective of business is profit. Most politicians are elected as a result of business donations, so their objective is to make businesses happy and get reelected. Similarly, government officials, particularly business regulators, leave and reenter the business sphere cyclically, making them impartial toward business interests to the detriment of the nation. These interests make redistributive policies incredibly difficult and since the decisionmakers generally have a selfish stake in the decision, they have likely already made it prior to forming their ethical utilitarian justifications.
The rejection of redistributive policies, such as higher minimum wages, CEO salary limitations, and higher taxes for the extremely wealthy have been justified by saying that these policies would lead to job loss and disincentivize job creation and innovation. In addition, they argue that people are not forced to take any particular job and if they are unhappy, they can leave. They argue that the standard of living has increased for the average person, calculated by the GDP per capita, so no change is necessary. They intentionally leave out numerous income inequality related costs to low-income individuals, the nation, and the future of society.
The real opponent here isn't utilitarianism, which is at best some plaything of the professoriat, but cost-benefit analysis in the making of public policy, which in the United States actually governs social life. The questions you ask (whose interests are measured, what costs count, how to value for some public purpose such things as losses of human life) as justiciable, are argued about in the courts where agencies engaged in consequentialist calculus meet the criticisms of parties who do not believe in their assumptions. These are central issues of administrative law, so anywhere you choose to look for further development of the criticisms you present, and the responses to them, you will find them. I think the route to improvement is to focus in on one aspect of your argument and show how it is handled in some aspect of cost-benefit rulemaking.
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> | The wealthy benefit from income inequality and go to great lengths to ensure its survival. The primary objective of business is profit, and the objective of their leaders is to retain as much of it as they can. Most politicians are elected as a result of business donations, so their objective is to make wealthy businessmen happy and get reelected. Similarly, government officials, particularly business regulators, leave and reenter the business sphere cyclically, making them impartial toward business interests to the detriment of the nation. These interests make redistributive policies incredibly difficult and since the decisionmakers generally have a selfish stake in the decision, they have likely already made it prior to weighing the costs and benefit. | | | |
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