Business Ethics Chapter 4 Question & Answer

It is likely better to use utilitarian reasoning to justify policies rather than to make individual decisions. Indirect utilitarian reasoning may recommend policies such as respecting rights and treating people fairly because doing so will, on balance, cause maximum utility. It can also recommend following rules, which finite human beings can follow instead of performing complex calculations, and which will prevent accumulative harms by prohibiting some individually harmless acts.

A major problem for cost-benefit or utilitarian reasoning is seeing how to aggregate, or add up, utility without violating human rights, distributing benefits unfairly, encouraging vice, and destroying human relationships. If we apply utilitarian reasoning, then we must always be alert for these sorts of problems.

Willingness to pay is very problematic as a measure of utility because it is determined by people’s financial resources or ability to pay.

A cost-benefit analysis uses willingness to pay as a measure of utility. When we do a financial cost-benefit analysis, we must be careful to distinguish between employing it as a source of information and employing it as a normative method of making an ethical decision.

Utilitarian reasoning could try to avoid the problem of mistaken preferences by satisfying only informed preferences, but informed preferences are hypothetical and therefore not measurable.

Utilitarian reasoning could try to avoid the problem of mistaken preferences by satisfying only informed preferences, but informed preferences are hypothetical and therefore not measurable.

If we think of utility as being mental experiences such as pain and pleasure, then we will have trouble comparing the intensity of experiences between people. We will also reach the unattractive conclusion that we could lead the best possible lives in a virtual world.

One major problem for utilitarian reasoning is seeing how to measure utility or happiness.

The recipe for utilitarian ethical reasoning says we ought to (1) cause (2) maximum (3) aggregate (4) utility. Our ability to apply the recipe depends on our ability to measure utility.

Utilitarian reasoning appears to be a very attractive ethical decision-making procedure. It says to maximize happiness, and happiness is widely agreed to be good. It treats everyone’s interests equally, and it has a recipe that promises a decision in every case.