She argued in favour of regulations against smoking in privately owned bars, restaurants et cetera on utilitarian grounds, saying it would not harm the economy or the country’s “ability to succeed”. She took me to task for “religiously stick[ing] to a code and us[ing] it rigidly to disprove or approve a certain situation” and said I should “look at the issue at a different angle and assess it based on its merits and demerits”.

This got me thinking about the issue of utilitarianism. Many scholars, most notably John Stuart Mill and some of the Austrian school economists, have argued for capitalism and individual rights based on the assertion that it achieves the “common good” or the “greatest good for the greatest number”. However, I believe that this utilitarian approach to ethics is incredibly dangerous. I touched on this issue in my post about the Cancun trade talks, but I think it’s worth expanding here.

The problem with utilitarianism is that its definition of “the good” is essentially circular: “the good” is “whatever is good for the greatest number”. Utilitarianism, as such, makes no effort to determine what actually is the good. Because of this, the phrase “the greatest good for the greatest number” has no concrete, specific meaning. It sounds vaguely nice, but if the good is not properly defined, it can be used to justify the most vicious actions. For instance, in Germany in the 1930s, the “greatest number” decided that their “greatest good” was to vote for a fascist government which rounded up and slaughtered Jews in their millions; utilitarianism per se would have nothing against this, because it leaves the good undefined. It could be argued that the “greatest number” did not, in this case, in fact achieve any good for themselves. This is entirely correct. However, this depends on a proper definition of the good, which only a “rigid” morality can provide.

I strongly object to the assertion that I “religiously stick to a code and use it rigidly to disprove or approve a certain situation”. Having a fixed code of morality is not necessarily religious. The problem objectivists face when discussing morality with non-objectivists is that most modern philosophers think that we cannot arrive at an objective code of morality by our own reasoning, that we cannot move from the facts of reality to principles for human beings to live by. (David Hume stated this principle as “no is from an ought”.) They believe that the alternative is between a fixed code of morality handed down by arbitrary edict and a totally subjective code, between intrinsicism and subjectivism. This “is-ought dichotomy” is deeply ingrained in people’s minds today, and it clouds their thinking in all sorts of ways.

Objectivism rejects this false alternative, asserting that if human beings want to live in this world, they have to have a certain code of morality determined by reality and human nature. This code includes the concept of individual rights, of which property rights form a fundamental part. (See Ayn Rand’s book The Virtue of Selfishness, in particular the essay The Objectivist Ethics, for an expansion.)

My reader said she did not think that banning smoking in public places would harm the economy. Note that “harm” is not defined precisely: what exactly would constitute “harm to the economy”? Many people would give statistics like growth rates or GDP, but it is totally unreasonable to assess moral issues on the basis of economic figures. My problem is that the “public places” being discussed are in fact private property. Pubs, clubs, shops, restaurants and so forth are private property. Somebody put time and effort into creating them, so they are not under public control: they are under control of a private owner, maybe an individual, maybe a partnership, maybe a company. The objectivist code of morality states that this owner has the right to determine whether or not people are allowed to smoke in the place concerned. It also states that other people have the right to decide whether or not to work in that place or patronise that place based on whether smoking is allowed there or not.

The operation of such a system might result in what a utilitarian might consider to be “undesirable outcomes”. A man might decide he wants to work there despite the fact that smoking goes on, which may result in lung cancer or some other disease: hardly a “desirable outcome”, surely? But that man worked in that place by his own choice, and he must take responsibility for the consequences. It is therefore wrong to make others pay for his treatment (unless his rights have been violated in some way, for instance if he was forced to breathe the smoke against his will), but it would also have been wrong to have forcibly prevented him from making the decision he made. It should be clear how easy it is to go astray in moral issues when adhering to utilitarianism, even when using quite reasonable-sounding notions of the good (such as “as few people dying from smoking-induced diseases as possible”).

If the criterion of arbitrarily-determined “undesirable consequences” is used to take control of property away from its owners, their rights are violated. They are effectively condemned to a (mild) form of slave labour: they are ordered to set a policy on their property that they may not want to set. (Of course, if they are affecting others’ property with their policies, e.g. if smoking customers are blowing their smoke into a doctors’ surgery next door, it becomes another matter, because the doctors’ surgery, if it is any good, will have a no-smoking policy, so the rights of the owners of the surgery are being violated.)

My reader also said that the issue of rights “goes both ways”. This is another way of saying that rights conflict with each other: the argument goes that one person might want to smoke, whereas another may not want to be subjected to smoke. However, if the issue is examined from the objectivist viewpoint, there is no conflict. One has to take the context into account; one has to ask where the smoking is occurring. If it is happening in a pub which permits smoking, the person smoking is doing so in a private place with the owner’s permission. The non-smoker can only choose to stay and bear the smoke, or get out. On the other hand, if it is happening in a restaurant which does not permit smoking, the smoker is violating the rights of the restaurant owner by smoking in there and can rightfully be asked to leave.

If it is happening in a truly “public place”, like on the street, the issue becomes more complex, because the place is really owned by the government, and when issues are decided by the government, they are always more complex! The only reasonable way to decide the issue is on the basis of whether there is any objective danger to non-smokers near smokers outdoors. To the best of my knowledge, there is no proof of any risk to people taking in the odd whiff of smoke outdoors; most of the passive smoking studies concentrate on people who have done a lot of passive smoking, for example by living with a smoker. This is why I said more research was needed, because of course people should be able to make their decisions on the best possible information.

The final point I want to address is my reader’s assertion that economics assumes that people always behave rationally. It is very true that many of the prevailing neoclassical economic theories assume some strange things about human nature, e.g. people always behaving rationally or for their own financial self-interest. I take most of my economic views from the Austrian school of economics, founded by Ludwig von Mises, which does not hold such an unrealistic view of human beings. Some members of the Austrian school have an unfortunate tendency towards rationalism, positivism, and in fact utilitarianism as I mentioned above, but there are some Austrian economists who have escaped this error, most notably George Reisman, whose brilliant magnum opus, Capitalism, can be downloaded in PDF form from here at the Mises Institute, the leading think-tank of Austrian economics.

I hope all this makes clear why utilitarianism is utterly useless when defending capitalism (or any position at all, in fact). Its circular definition of the good has dragged many good intellectuals into error. Objectivism is the only philosophy capable of defending capitalism properly.

I cannot resist including these quotations from Ayn Rand:

The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve the “common good”. It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with mans rational nature, that it protects mans survival qua man, and that its ruling principle is: justice.
From the essay “What is capitalism?” from Capitalism: The Unknown Ideal

“The greatest good for the greatest number” is one of the most vicious slogans ever foisted on humanity.

This slogan has no concrete, specific meaning. There is no way to interpret it benevolently, but a great many ways in which it can be used to justify the most vicious actions.

What is the definition of “the good” in this slogan? None, except: whatever is good for the greatest number. Who, in any particular issue, decides what is good for the greatest number? Why, the greatest number.

If you consider this moral, you would have to approve of the following examples, which are exact applications of this slogan in practice: fifty-one percent of humanity enslaving the other forty-nine; nine hungry cannibals eating the tenth one; a lynching mob murdering a man whom they consider dangerous to the community.

There were seventy million Germans in Germany and six hundred thousand Jews. The greatest number (the Germans) supported the Nazi government which told them that their greatest good would be served by exterminating the smaller number (the Jews) and grabbing their property. This was the horror achieved in practice by a vicious slogan accepted in theory.

But, you might say, the majority in all these examples did not achieve any real good for itself either? No. It didn’t. Because “the good” is not determined by counting numbers and is not achieved by the sacrifice of anyone to anyone.
From Textbook of Americanism

It is only an ultimate goal, an end in itself, that makes the existence of values possible. Metaphysically, life is the only phenomenon that is an end in itself: a value gained and kept by a constant process of action. Epistemologically, the concept of “value” is genetically dependent upon and derived from the antecedent concept of “life”. To speak of “value” as apart from “life” is worse than a contradiction in terms. “It is only the concept of ‘Life’ that makes the concept of ‘Value’ possible.”

In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any living entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought”.
From “The Objectivist Ethics”, in The Virtue of Selfishness