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Reason and Maximization

Published online by Cambridge University Press:  01 January 2020

David Gauthier
David Gauthier*
Affiliation:
University of Toronto
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Extract

Economic man seeks to maximize utility. The rationality of economic man is assumed, and is identified with the aim of utility-maximization. But may rational activity correctly be identified with maximizing activity? The object of this essay is to explore, and in part to answer, this question.

This is not an issue solely, or perhaps even primarily, about the presuppositions of economics. The two great modern schools of moral and political thought in the English-speaking world, the contractarian and the utilitarian, identify rationality with maximization, and bring morality into their equations as well. To the contractarian, rational man enters civil society to maximize his expectation of well-being, and morality is that system of principles of action which rational men collectively adopt to maximize their well-being. To the utilitarian, the rational and moral individual seeks the maximum happiness of mankind, with which he identifies his own maximum happiness.

Type
Research Article
Information
Canadian Journal of Philosophy , Volume 4 , Issue 3 , March 1975 , pp. 411 - 433
Copyright
Copyright © The Authors 1975

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References

* I am grateful to the Canada Council for research support during part of the period in which the ideas in this paper were developed. Earlier versions were discussed in my graduate seminar, and at the Institute on Contractarian Philosophy of the Canadian Philosophical Association. I am grateful for comments received on those occasions; I am especially grateful to David Braybrooke, Steven de Haven, Aaron Sloman, and Howard Sobel for their ideas.

1 Cf. Winch, D. M. Analytical Welfare Economics (Harmondsworth, Middlesex, 1971 )Google Scholar: “we assume that individuals behave rationally and endeavour to maximize utility” (p. 25). Also cf. Arrow, Kenneth J. Social Choice and Individual Values (2nd ed.; New York, 1963), pp. 3, 21.Google Scholar

2 Cf. Hobbes, Thomas Leviathan, Chaps. 14, 15, 17Google Scholar, for the classic statement of contractarian theory. Also cf. Baier, Kurt The Moral Point of View (Ithaca, New York, 1958), pp. 308–315.Google Scholar

3 Cf. J. S. Mill, Utilitarianism, Chap. 3.

4 Cf. my paper, “Morality and Advantage,” Philosophical Review, LXXVI (1967), 46Q-475.

5 David Hume, A Treatise of Human Nature, Bk. II, Pt. III, Sec. III.

6 This is too direct a statement of the connection between reason and maximization; it applies to what I shall call independent action but not to what I shall distinguish as interdependent action. See V-VII infra. Similarly, the discussion of preference must be modified to fit interdependent action; see footnote 16 infra.

7 For a fuller discussion of preference and utility, cf. Luce, R. D. and Raiffa, H. Games and Decisions (New York, 1957)Google Scholar, Chap. 2, and works referred to therein.

8 A more formal treatment would require a proof that the conditions given are necessary and sufficient for the introduction of a utility-function.

9 I shall not consider the possibility of utility-maximization if the agent is unable to make any estimate of the probabilities of the various circumstances and effects.

10 A person prefers greater utility to less, and is indifferent between equal utilities, whether these utilities are actual or expected. This is assured by the way in which his utility-function is generated from his preferences. Hence the introduction of expected utility makes no difference to the argument; it is in no sense inferior to actual utility.

11 This is the situation analyzed by the mathematical theory of games, to which I owe many of my arguments and concepts.

12 Nash, J. F. “Non-cooperative Games,” Annals of Mathematics, LIV (1951), 286–295.CrossRefGoogle Scholar

13 I shall not consider the possibility of utility-maximization in the case in which not all agents correctly assume that all expectations are correct.

14 Cf. Moore, G. E. Principia Ethica (Cambridge, 1903)Google Scholar, sees. 58-61; also Brandt, Richard B. Ethical Theory (Englewood Cliffs, N.J., 1959), pp. 369–375.Google Scholar

15 The Prisoner's Dilemma is attributed to A. W. Tucker.

16 For interdependent action we modify our account of preference in the following way. What the agent takes himself to be doing can be coupled with his beliefs and the agreed manner of action to determine his intentional preference. His attitudinal preference can be coupled with his beliefs and the agreed manner of action to determine a strategy. He is rational only if this strategy corresponds to what he takes himself to be doing. What he supposes he would do, were he sufficiently informed and reflective can then be used to determine intentional preferability; what he supposes he would favour under these ideal conditions can be used to determine a strategy. He is rational only if what he favours and what he would favour determine the same strategy, which corresponds to what he takes himself to be doing and also to what he would do.

17 I shall not introduce a sufficient condition in this paper.

18 Cf. Hobbes, Leviathan, Chaps. 14, 15, 17.Google Scholar

19 “Rational Cooperation,” Nous, VIII (1974), 53-65. Cf. also my paper, “Justice and Natural Endowment: Towards a Critique of Rawls’ Ideological Framework,” forthcoming in Social Theory and Practice. Also on this subject cf. Braithwaite, R. B. Theory of Games as a Tool for the Moral Philosopher (Cambridge, 1955).Google Scholar

20 Hobbes, Leviathan, Chap. 14.

21 Ibid., Chap. 15.

22 J-J Rousseau, Du contrat social, I, viii. Translation mine. Cf. also Baier, Kurt The Moral Point of View, pp. 311–315.Google Scholar

23 Rawls, John and Hare, R. M. are two leading examples. For Rawls the identification is quite explicit; cf. A Theory of justice (Cambridge, Mass., 1971 ), pp. 142–143Google Scholar. For Hare it is more difficult to document, but it is surely implicit; cf. Freedom and Reason (Oxford, 1963), Chaps. 6, 7, esp. pp. 92–93, 122-123. My paper “Justice and Natural Endowment, Etc.,” referred to in footnote 19 supra, attempts to show Rawls’ failure to grasp the implications of rational morality. To show Hare's failure is certainly not the work of a footnote, but in a phrase, he goes astray because his universal prescriptivism conflates agent and patient; cf. V supra.