Consequentialism is the claim that we should judge the rightness of an action by the desirability of its consequences, as opposed, say, to its conformity with some concept of virtue or honour. As I mentioned last week, it is very closely tied to utilitarianism and is most appealing as a criterion for public policy rather than individual ethics or jurisprudence.
The big question in relation to consequentialism is how we assess the consequences of an action. And as usual there seems a huge divide between economists (particularly decision theorists) and philosophers on this point.
Speaking for the economists, I would say that the only operational form of consequentialism is one that judges actions based on the best possible ex ante evaluation of their uncertain consequences. This in turn, naturally ties the dominant theory of choice under uncertainty (expected utility theory) into what I’ve claimed (in the face of strong criticism from Lawrence Solum, Gary Sauer-Thompson and Eric Tam) to be the dominant public philosophy, namely utilitarianism. Most of my professional work is concerned with generalisations of and alternatives to expected utility theory which give rise to alternative versions of consequentialism, including that of Rawls.
Judging by this entry in the Stanford Encyclopedia of Philosophy, kindly sent to me by Brian Weatherson, the dominant view in philosophical circles seems to be that we should focus on actual consequences.
This view has the obvious problem that it doesn’t give us any actual guidance, since we’re uncertain about the future, and therefore can’t tell which choice will have the best consequence. Less obviously, it can’t even be used in retrospect to assess the rightness of an action, since we can’t know what would have happened if we had made some alternative decision. This is claimed to be the traditional utilitarian view, but I don’t believe that hardheads like Bentham and James Mill would have advocated a non-operational policy criterion.
The discussion of this issue in the Stanford Encyclopedia entry seems to me to be exceptionally naive, especially since the main examples selected are in areas that have been the subject of intense study by economists. First, there is a toy example about someone feeding ‘rotten meat’ to their children, written without any reference to the vast literature on food safety, risk perceptions and public policy.
Then there’s the statement, made by way of a concession, that
The criterion of a good stock investment is its total return, but the best decision procedure still might be to reduce risk by buying an index fund or blue-chip stocks
I would say, in the damning phrase attributed to Wolfgang Pauli, that this “isn’t even wrong”. In a standard finance model, the question “given the realisation of some given state of nature in the future, what investment would yield the maximum return” doesn’t have a well-defined answer. If I knew which security was going to yield the maximum return in the given state, and I faced no liquidity constraint, I could make an unbounded profit by going short in all other assets and using the proceeds to buy the preferred security. That’s why questions like “what stock investment yields maximum return” aren’t even discussed in finance theory.
As I say, I find the discussion here exceptionally naive. But I have no doubt that, to any philosophers in the audience, I’ve just demonstrated the naivety of economic thinking, and I eagerly await their subtle refutations.