This is “Utilitarianism: The Greater Good”, section 3.2 from the book Business Ethics (v. 1.0).
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“Have you seen,” the blog post reads, “their parking lot on a Saturday?”“CB-Karen Dillard Case Settled-No Cancelled Scores,” College Confidential, accessed May 15, 2011, http://talk.collegeconfidential.com/parents-forum/501843-cb-karen-dillard-case-settled-no-cancelled-scores.html. It’s packed. The lot belongs to Karen Dillard College Prep (KDCP), a test-preparation company in Dallas. Like the Princeton Review, they offer high schoolers courses designed to boost performance on the SAT. Very little real learning goes on in these classrooms; they’re more about techniques and tricks for maximizing scores. Test takers should know, for example, whether a test penalizes incorrect answers. If it doesn’t, you should take a few minutes at each section’s end to go through and just fill in a random bubble for all the questions you couldn’t reach so you’ll get some cheap points. If there is a penalty, though, then you should use your time to patiently work forward as far as you can go. Knowing the right strategy here can significantly boost your score. It’s a waste of brain space, though, for anything else in your life.
Some participants in KDCP—who paid as much as $2,300 for the lessons—definitely got some score boosting for their money. It was unfair boosting, however; at least that’s the charge of the College Board, the company that produces and administers the SAT.
Here’s what happened. A KDCP employee’s brother was a high school principal, and he was there when the SATs were administered. At the end of those tests, everyone knows what test takers are instructed to do: stack the bubble sheets in one pile and the test booklets in the other and leave. The administrators then wrap everything up and send both the answer sheets and the booklets back to the College Board for scoring. The principal, though, was pulling a few test booklets out of the stack and sending them over to his brother’s company, KDCP. As it turns out, some of these pilfered tests were “live”—that is, sections of them were going to be used again in future tests. Now, you can see how getting a look at those booklets would be helpful for someone taking those future tests.
Other stolen booklets had been “retired,” meaning the specific questions inside were on their final application the day the principal grabbed them. So at least in these cases, students taking the test-prep course couldn’t count on seeing the very same questions come exam day. Even so, the College Board didn’t like this theft much better because they sell those retired tests to prep companies for good money.
When the College Board discovered the light-fingered principal and the KDCP advantage, they launched a lawsuit for infringement of copyright. Probably figuring they had nothing to lose, KDCP sued back.Paulina Mis, “College Board Sues Test-Prep Company, Countersuit Filed,” Scholarships.com, February 26, 2008, accessed May 15, 2011, http://www.scholarships.com/blog/high-school/college-board-sues-test-prep-company-countersuit-filed/161.
College Board also threatened—and this is what produced headlines in the local newspaper—to cancel the scores of the students who they determined had received an unfair advantage from the KDCP course. As Denton Record-Chronicle reported (and as you can imagine), the students and their families freaked out.Staci Hupp, “SAT Scores for Students Who Used Test Prep Firm May Be Thrown Out,” Denton Record Chronicle, February 22, 2008, accessed May 15, 2011. The scores and full application packages had already been delivered to colleges across the country, and score cancellation would have amounted to application cancellation. And since many of the students applied only to schools requiring the SAT, the threat amounted to at least temporary college cancellation. “I hope the College Board thinks this through,” said David Miller, a Plano attorney whose son was apparently on the blacklist. “If they have a problem with Karen Dillard, that’s one thing. But I hope they don’t punish kids who wanted to work hard.”
Predictably, the episode crescendoed with everyone lawyered up and suits threatened in all directions. In the end, the scores weren’t canceled. KDCP accepted a settlement calling for them to pay $600,000 directly to the College Board and provide $400,000 in free classes for high schoolers who’d otherwise be unable to afford the service. As for the principal who’d been lifting the test booklets, he got to keep his job, which pays about $87,000 a year. The CEO of College Board, by the way, gets around $830,000.“AETR Report Card,” Americans for Educational Testing Reform, accessed May 15, 2011, http://www.aetr.org/college-board.php. KDCP is a private company, so we don’t know how much Karen Dillard or her employees make. We do know they could absorb a million-dollar lawsuit without going into bankruptcy. Finally, the Plano school district in Texas—a well-to-do suburb north of Dallas—continues to produce some of the nation’s highest SAT score averages.
UtilitarianismThe ethical belief that an act is recommendable if it brings the greatest good to the greatest number, if it increases net happiness—or decreases net unhappiness—when everyone is taken into account. is a consequentialist ethics—the outcome matters, not the act. Among those who focus on outcomes, the utilitarians’ distinguishing belief is that we should pursue the greatest good for the greatest number. So we can act in whatever way we choose—we can be generous or miserly, honest or dishonest—but whatever we do, to get the utilitarian’s approval, the result should be more people happier. If that is the result, then the utilitarian needs to know nothing more to label the act ethically recommendable. (Note: UtilityA general term for usefulness and benefit that serves as the root for the theory named utilitarianism. is a general term for usefulness and benefit, thus the theory’s name. In everyday language, however, we don’t talk about creating a greater utility but instead a greater good or happiness.)
In rudimentary terms, utilitarianism is a happiness calculation. When you’re considering doing something, you take each person who’ll be affected and ask whether they’ll end up happier, sadder, or it won’t make any difference. Now, those who won’t change don’t need to be counted. Next, for each person who’s happier, ask, how much happier? Put that amount on one side. For each who’s sadder, ask, how much sadder? That amount goes on the other side. Finally, add up each column and the greater sum indicates the ethically recommendable decision.
Utilitarian ethics function especially well in cases like this: You’re on the way to take the SAT, which will determine how the college application process goes (and, it feels like, more or less your entire life). Your car breaks down and you get there very late and the monitor is closing the door and you remember that…you forgot your required number 2 pencils. On a desk in the hall you notice a pencil. It’s gnawed and abandoned but not yours. Do you steal it? Someone who believes it’s an ethical duty to not steal will hesitate. But if you’re a utilitarian you’ll ask: Does taking it serve the greater good? It definitely helps you a lot, so there’s positive happiness accumulated on that side. What about the victim? Probably whoever owns it doesn’t care too much. Might not even notice it’s gone. Regardless, if you put your increased happiness on one side and weigh it against the victim’s hurt on the other, the end result is almost certainly a net happiness gain. So with a clean conscience you grab it and dash into the testing room. According to utilitarian reasoning, you’ve done the right thing ethically (assuming the pencil’s true owner isn’t coming up behind you in the same predicament).
Pushing this theory into the KDCP case, one tense ethical location is the principal lifting test booklets and sending them over to his brother at the test-prep center. Everything begins with a theft. The booklets do in fact belong to the College Board; they’re sent around for schools to use during testing and are meant to be returned afterward. So here there’s already the possibility of stopping and concluding that the principal’s act is wrong simply because stealing is wrong. Utilitarians, however, don’t want to move so quickly. They want to see the outcome before making an ethical judgment. On that front, there are two distinct outcomes: one covering the live tests, and the other the retired ones.
Live tests were those with sections that may appear again. When students at KDCP received them for practice, they were essentially receiving cheat sheets. Now for a utilitarian, the question is, does the situation serve the general good? When the testing’s done, the scores are reported, and the college admissions decisions made, will there be more overall happiness then there would’ve been had the tests not been stolen? It seems like the answer has to be no. Obviously those with great scores will be smiling, but many, many others will see their scores drop (since SATs are graded on a curve, or as a percentile). So there’s some major happiness for a few on one side balanced by unhappiness for many on the other. Then things get worse. When the cheating gets revealed, the vast majority of test takers who didn’t get the edge are going to be irritated, mad, or furious. Their parents too. Remember, it’s not only admission that’s at stake here but also financial aid, so the students who didn’t get the KDCP edge worry not only that maybe they should’ve gotten into a better school but also that they end up paying more too. Finally, the colleges will register a net loss: all their work in trying to admit students on the basis of fair, equal evaluations gets thrown into question.
Conclusion. The theft of live tests fails the utilitarian test. While a few students may come out better off and happier, the vast majority more than balances the effect with disappointment and anger. The greater good isn’t served.
In the case of the theft of “retired” tests where the principal forwarded to KDCP test questions that won’t reappear on future exams, it remains true that the tests were lifted from the College Board and it remains true that students who took the KDCP prep course will receive an advantage because they’re practicing the SAT. But the advantage doesn’t seem any greater than the one enjoyed by students all around the nation who purchased prep materials directly from the College Board and practiced for the exam by taking old tests. More—and this was a point KDCP made in their countersuit against the College Board—stealing the exams was the ethically right thing to do because it assured that students taking the KDCP prep course got the same level of practice and expertise as those using official College Board materials. If the tests hadn’t been stolen, then wouldn’t KDCP kids be at an unfair disadvantage when compared with others because their test practices hadn’t been as close to the real thing as others got? In the end, the argument goes, stealing the tests assured that as many people as possible who took prep courses got to practice on real exams.
Conclusion. The theft of the exams by the high school principal may conceivably be congratulated by a utilitarian because it increases general happiness. The students who practiced on old exams purchased from the College Board can’t complain. And as for those students at KDCP, their happiness increases since they can be confident that they’ve prepared as well as possible for the SAT.
The fact that a utilitarian argument can be used to justify the theft of test booklets, at least retired ones, doesn’t end the debate, however. Since the focus is on outcomes, all of them have to be considered. And one outcome that might occur if the theft is allowed is, obviously, that maybe other people will start thinking stealing exam books isn’t such a bad idea. If they do—if everyone decides to start stealing—it’s hard to see how anything could follow but chaos, anger, and definitely not happiness.
This discussion could continue as more people and consequences are factored in, but what won’t change is the basic utilitarian rule. What ought to be done is determined by looking at the big picture and deciding which acts increase total happiness at the end of the day when everyone is taken into account.
After it was discovered that KDCP students got to practice for the SATs with live exams, the hardest question facing the College Board was, should their scores be canceled? The utilitarian argument for not canceling is straightforward. Those with no scores may not go to college at all next year. This is real suffering, and if your aim is to increase happiness, then counting the exams is one step in that direction. It’s not the last step, though, because utilitarians at the College Board need to ask about everyone else’s happiness too: what’s the situation for all the others who took the exam but have never heard of KDCP? Unfortunately, letting the scores be counted is going to subtract from their happiness because the SAT is graded comparatively: one person doing well means everyone getting fewer correct answers sees their score drop, along with college choices and financial aid possibilities. Certainly it’s true that each of these decreases will be small since there were only a handful of suspect tests. Still, a descent, no matter how tiny, is a descent, and all the little bits add up.
What’s most notable, finally, about this decision is the imbalance. Including the scores of KDCP students will weigh a tremendous increase in happiness for a very few against a slight decrease for very many. Conversely, a few will be left very sad, and many slightly happier. So for a utilitarian, which is it? It’s hard to say. It is clear, however, that this uncertainty represents a serious practical problem with the ethical theory. In some situations you can imagine yourself in the shoes of the different people involved and, using your own experience and knowledge, estimate which decision will yield the most total happiness. In this situation, though, it seems almost impossible because there are so many people mixed up in the question.
Then things get still more difficult. For the utilitarian, it’s not enough to just decide what brings the most happiness to the most individuals right now; the future needs to be accounted for too. Utilitarianism is a true global ethicsAn ethics taking into account everyone affected by an act, now and in the future.; you’re required to weigh everyone’s happiness and weigh it as best as you can as far into the future as possible. So if the deciders at the College Board follow a utilitarian route in opting to include (or cancel) the scores, they need to ask themselves—if we do, how will things be in ten years? In fifty? Again, these are hard questions but they don’t change anything fundamental. For the utilitarian, making the right decision continues to be about attempting to predict which choice will maximize happiness.
When he wasn’t stealing test booklets and passing them on to KDCP, the principal in the elite Plano school district was dedicated to his main job: making sure students in his building receive an education qualifying them to do college-level work. Over at the College Board, the company’s CEO leads a complementary effort: producing tests to measure the quality of that preparation and consequently determine students’ scholastic aptitude. The principal, in other words, is paid to make sure high schoolers get an excellent education, and the CEO is paid to measure how excellent (or not) the education is.
Just from the job descriptions, who should get the higher salary? It’s tempting to say the principal. Doesn’t educating children have to be more important than measuring how well they’re educated? Wouldn’t we all rather be well educated and not know it than poorly educated and painfully aware of the fact?
Regardless, what’s striking about the salary that each of these two actually receives isn’t who gets more; it’s how much. The difference is almost ten times: $87,000 for the principal versus the CEO’s $830,000. Within the doctrine of utilitarianism, can such a divergence be justified?
Yes, but only if we can show that this particular salary structure brings about the greatest good, the highest level of happiness for everyone considered as a collective. It may be, for example, that objectively measuring student ability, even though it’s less important than instilling ability, is also much harder. In that case, a dramatically higher salary may be necessary in order to lure high-quality measuring talent. From there, it’s not difficult to fill out a utilitarian justification for the pay divergence. It could be that inaccurate testing would cause large amounts of unhappiness: students who worked hard for years would be frustrated when they were bettered by slackers who really didn’t know much but managed to score well on a test.
To broaden the point, if tremendous disparities in salary end up making people happier, then the disparities are ethical. Period. If they don’t, however, then they can no longer be defended. This differs from what a libertarian rights theorist might say here. For a libertarian—someone who believes individuals have an undeniable right to make and keep whatever they can in the world, regardless of how rich or poor anyone else may be—the response to the CEO’s mammoth salary is that he found a way to earn it fair and square, and everyone should quit complaining about it. Generalized happiness doesn’t matter, only the individual’s right to try to earn and keep as much as he or she can.
Basic questions in business tend to be quantitative, and money is frequently the bottom line: How many dollars is it worth? What’s my salary? What’s the company’s profit? The basic question of utilitarianism is qualitative: how much happiness and sadness is there? Inevitably, it’s going to be difficult when businesses accustomed to bottom-line number decisions are forced to cross over and decide about general happiness. One of the most famous attempts to make the transition easier occurred back in the 1970s.
With gas prices on the rise, American car buyers were looking for smaller, more efficient models than Detroit was manufacturing. Japanese automakers were experts in just those kinds of vehicles and they were seizing market share at an alarming rate. Lee Iaccoca, Ford’s president, wanted to rush a car into production to compete. His model was the Pinto.Case facts taken from Manuel Velasquez, Business Ethics, Concepts and Cases, 6th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2006), 60–61.
A gas sipper slated to cost $2,000 (about $12,000 today), Ford rushed the machine through early production and testing. Along the way, unfortunately, they noticed a design problem: the gas tank’s positioning in the car’s rump left it vulnerable to rear-end collisions. In fact, when the rear-end hit came faster than twenty miles per hour, not only might the tank break, but gasoline could be splattered all the way up to the driver’s compartment. Fire, that meant, ignited by sparks or anything else could engulf those inside.
No car is perfectly safe, but this very scary vulnerability raised eyebrows. At Ford, a debate erupted about going ahead with the vehicle. On the legal end, the company stood on solid ground: government regulation at the time only required gas tanks to remain intact at collisions under twenty miles per hour. What about the ethics, though? The question about whether it was right to charge forward was unavoidable because rear-end accidents at speeds greater than twenty miles per hour happen—every day.
The decision was finally made in utilitarian terms. On one side, the company totaled up the dollar cost of redesigning the car’s gas tank. They calculated
Added up, that’s $137 million total, with the money coming out of Pinto buyers’ pockets since the added production costs would get tacked onto the price tag. It’s a big number but it’s not that much per person: $11 is about $70 today. In this way, the Pinto situation faced by Ford executives is similar to the test cancellation question for the College Board: one option means only a little bit of suffering for specific individuals, but there are a lot of them.
On the other side of the Pinto question—and, again, this resembles the College Board predicament—if the decision is made to go ahead without the fix, there’s going to be a lot of suffering but only for a very few people. Ford predicted the damage done to those few people in the following ways:
That’s a lot of damage, but how do you measure it? How do you compare it with the hike in the price tag? More generally, from a utilitarian perspective, is it better for a lot of people to suffer a little or for a few people to suffer a lot?
Ford answered both questions by directly attaching monetary values to each of the injuries and damages suffered:
The math coming out from this is (180 deaths × $200,000) + (180 injuries × $67,000) + (2,100 burned-out cars × $700) = $49 million. The result here is $137 million worth of suffering for Pinto drivers if the car is redesigned and only $49 million if it goes to the streets as is.
Ford sent the Pinto out. Over the next decade, according to Ford estimates, at least 60 people died in fiery accidents and at least 120 got seriously burned (skin-graft-level burns). No attempt was made to calculate the total number of burned vehicles. Shortly thereafter, the Pinto was phased out. No one has final numbers, but if the first decade is any indication, then the total cost came in under the original $49 million estimate. According to a utilitarian argument, and assuming the premises concerning dollar values are accepted, Ford made the right decision back in 1970.
If every Pinto purchaser had been approached the day after buying the car, told the whole Ford story, and been offered to change their car along with eleven dollars for another one without the gas tank problem, how many would’ve handed the money over to avoid the long-shot risk? The number might’ve been very high, but that doesn’t sway a utilitarian conclusion. The theory demands that decision makers stubbornly keep their eye on overall happiness no matter how much pain a decision might cause certain individuals.
Monetized utilitarianismThe reduction of happiness and sadness to monetary values within a utilitarian ethics. attempts to measure happiness, to the extent possible, in terms of money. As the Ford Pinto case demonstrated, the advantage here is that it allows decisions about the greater good to be made in clear, objective terms. You add up the money on one side and the money on the other and the decision follows automatically. This is a very attractive benefit, especially when you’re dealing with large numbers of individuals or complex situations. Monetized utilitarianism allows you to keep your happiness calculations straight.
Two further varieties of utilitarianism are hedonisticUtilitarianism seeking to maximize any and all sensations of happiness and pleasure. and idealisticUtilitarianism seeking to maximize sensations of happiness and pleasure connected with intellectual life and culture.. Both seek to maximize human happiness, but their definitions of happiness differ. Hedonistic utilitarians trace back to Jeremy Bentham (England, around 1800). Bentham was a wealthy and odd man who left his fortune to the University College of London along with the stipulation that his mummified body be dressed and present at the institution. It remains there today. He sits in a wooden cabinet in the main building, though his head has been replaced by a wax model after pranking students repeatedly stole the real one. Bentham believed that pleasure and happiness are ultimately synonymous. Ethics, this means, seeks to maximize the pleasures—just about any sensation of pleasure—felt by individuals. But before dropping everything and heading out to the bars, it should be remembered that even the most hedonistic of the utilitarians believe that getting pleasure right now is good but not as good as maximizing the feeling over the long term. (Going out for drinks, in others words, instead of going to the library isn’t recommendable on the evening before midterms.)
A contemporary of Bentham, John Stuart Mill, basically agreed that ethics is about maximizing pleasure, but his more idealistic utilitarianism distinguished low and highbrow sensations. The kinds of raw, good feelings that both we and animals can find, according to Mill, are second-rate pleasures. Pleasures with higher and more real value include learning and learnedness. These aren’t physical joys so much as the delights of the mind and the imagination. For Mill, consequently, libraries and museums are scenes of abundant pleasure, much more than any bar.
This idealistic notion of utilitarianism fits quite well with the College Board’s response to the KDCP episode. First, deciding against canceling student scores seems like a way of keeping people on track to college and headed toward the kind of learning that rewards our cerebral inclinations. Further, awarding free prep classes to those unable to pay seems like another step in that direction, at least if it helps get them into college.
A narrow distinction with far-reaching effects divides soft from hard utilitarianism. Soft utilitarianismFrequently referred to simply as utilitarianism, it’s the ethical belief that an act is recommendable if it increases net happiness (or decreases net unhappiness) when everyone is taken into account. is the standard version; when people talk about a utilitarian ethics, that’s generally what they mean. As a theory, soft utilitarianism is pretty laid back: an act is good if the outcome is more happiness in the world than we had before. Hard utilitarianismThe ethical belief that an act is recommendable if it increases net happiness (or decreases net unhappiness) when everyone is taken into account and when the total benefit is more than any other possible act., on the other hand, demands more: an act is ethically recommendable only if the total benefits for everyone are greater than those produced by any other act.
According to the hard version, it’s not enough to do good; you must do the most good possible. As an example, think about the test-prep company KDCP under the microscope of utilitarian examination.
If decisions about businesses are totally governed by the need to create the most happiness possible, then companies like KDCP that don’t contribute much to social well-being will quickly become endangered.
The demands of hard utilitarianism can be layered onto the ethical decision faced by the College Board in their courtroom battle with KDCP. Ultimately, the College Board opted to penalize the test-prep company by forcing it to offer some free classes for underprivileged students. Probably, the result was a bit more happiness in the world. The result wasn’t, however, the most happiness possible. If hard utilitarianism had driven the decision, then the College Board would’ve been forced to go for the jugular against KDCP, strip away all the money they could, and then use it to do the most good possible, which might have meant setting up a scholarship fund or something similar. That’s just a start, though. Next, to be true to hard utilitarianism, the College Board would need to focus on itself with hard questions. The costs of creating and applying tests including the SAT are tremendous, which makes it difficult to avoid this question: wouldn’t society as a whole be better off if the College Board were to be canceled and all their resources dedicated to, for example, creating a new university for students with learning disabilities?
Going beyond KDCP and the College Board, wouldn’t almost any private company fall under the threat of appropriation if hard utilitarians ran the world? While it’s true, for example, that the money spent on steak and wine at expensive Las Vegas restaurants probably increases happiness a bit, couldn’t that same cash do a lot more for the general welfare of people whose income makes Las Vegas an impossibly expensive dream? If it could, then the hard utilitarian will propose zipping up Las Vegas and rededicating the money.
Finally, since utilitarianism is about everyone’s total happiness, don’t hard questions start coming up about world conditions? Is it possible to defend the existence of McDonald’s in the United States while people are starving in other countries?
Conclusion. In theory, there’s not much divergence between soft and hard utilitarianism. But in terms of what actually happens out in the world when the theory gets applied, that’s a big difference. For private companies, it’s also a dangerous one.
Two further versions of utilitarian regulation are actFrequently referred to simply as utilitarianism, it’s the ethical belief that an act is recommendable if it increases net happiness (or decreases net unhappiness) when everyone is taken into account. and ruleThe ethical belief that a rule for action is recommended if collective obedience to the rule increases net happiness when everyone is taken into account.. Act utilitarianism affirms that a specific action is recommended if it increases happiness. This is the default form of utilitarianism, and what people usually mean when they talk about the theory. The separate rule-based version asserts that an action is morally right if it follows a rule that, when applied to everyone, increases general happiness.
The rule utilitarian asks whether we’d all be benefitted if everyone obeyed a rule such as “don’t steal.” If we would—if the general happiness level increases because the rule is there—then the rule utilitarian proposes that we all adhere to it. It’s important to note that rule utilitarians aren’t against stealing because it’s intrinsically wrong, as duty theorists may propose. The rule utilitarian is only against stealing if it makes the world less happy. If tomorrow it turns out that mass stealing serves the general good, then theft becomes the ethically right thing to do.
The sticky point for rule utilitarians involves special cases. If we make the rule that theft is wrong, consider what happens in the case from the chapter’s beginning: You forgot your pencil on SAT test day, and you spot one lying on an abandoned desk. If you don’t take it, no one’s going to be any happier, but you’ll be a lot sadder. So it seems like rule utilitarianism verges on defeating its own purpose, which is maximizing happiness no matter what.
On the other hand, there are also sticky points for act utilitarians. For example, if I go to Walmart tonight and steal a six-pack of beer, I’ll be pretty happy. And assuming I don’t get caught, no one will be any sadder. The loss to the company—a few dollars—will disappear in a balance sheet so huge that it’s hard to count the zeros. Of course if everyone starts stealing beers, that will cause a problem, but in practical terms, if one person does it once and gets away with it, it seems like an act utilitarian would have to approve. The world would be a happier place.
Basic utilitarianism is the soft, act version. These are the theory’s central advantages:
The central difficulties and disadvantages of utilitarianism include the following: