Mill's Utilitarianism Model in Business Ethics

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  • 0:01 John Stuart Mill
  • 1:10 Utilitarianism
  • 4:12 Applications in Business
  • 6:18 Lesson Summary
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Lesson Transcript
Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

John Stuart Mill was an English philosopher who made the ideas of utilitarian ethics popular. In this lesson, we'll explore what utilitarianism is, how ethical decisions are made using utilitarianism, and how it relates to business situations.

John Stuart Mill

Imagine that you are the head of a drug company. You have a new drug that can help people with serious autoimmune diseases get better. But there's a problem: About one in every five hundred people who take the drug will have terrible side effects that can cause serious pain and sometimes even death. What should you do? Should you shelve the drug or release it to the public?

This type of ethical dilemma is exactly what 19th-century English philosopher John Stuart Mill was interested in. When he was a kid, Mill's father was good friends with a philosopher named Jeremy Bentham, who believed that people were driven by self-interest and therefore that the law should make sure to protect as many people as possible. According to Bentham, the right or good thing is the thing that provides the greatest benefit to the greatest number of people.

Mill sometimes agreed with Bentham, and sometimes disagreed with him. Let's look closer at Mill's moral philosophy, utilitarianism, and how it applies to business dilemmas, like the one about whether to release the drug or not.


As we saw, Jeremy Bentham believed that people were driven by self-interest. That is, he argued that people are essentially selfish and that they will do what's best for them, and not what's best for society as a whole. By Bentham's logic, it doesn't matter how many people might die from the drug your company has produced; if you can make money, you will release it.

Mill disagreed with Bentham about the nature of humanity. He wrote that people could be selfless and concerned for others. After all, he argued, people do nice things for others all the time.

According to Mill, you might act in your own self-interest, but you also might act for the benefit of others. For example, you might decide to hold the drug back and not release it because you don't want to risk that some people might have a bad reaction. It would benefit you more to release the drug and make money, but you might make the decision to put others before yourself.

But would that be the most ethical decision? Mill agreed with Bentham that the most moral thing to do is the thing that provides the greatest benefit to the greatest number of people, a theory he called utilitarianism.

According to Mill's theory of utilitarianism, the way to know whether something is ethically right or good is not by determining what the motives are behind it, but by determining what the outcome is. In other words, the ends justify the means.

There are two ways to determine whether the end result is moral, according to a utilitarian view:

1. The number of people helped vs. harmed. A simple way to look at whether something is moral or not is to compare how many people will be helped against how many people will be harmed by your decision. For example, your drug has the ability to help many people: Hundreds of thousands of people with autoimmune disorders might find relief. Compared to that number, the number of people who might be harmed (one in five hundred) doesn't seem so bad. In that case, the moral thing might be to release the drug.

2. The degree of benefit vs. harm. Another element to consider, though, is how much a decision will benefit people versus how much it might harm them. For example, say that your drug has the ability to provide only a tiny bit of relief to people with autoimmune disease, while the risk is that it will kill some of the people who take it. In that case, the degree of benefit is much smaller than the degree of harm.

Of course, you have to weigh both of these things, so if it provides a little benefit to many people, and has the potential to cause great harm to a very small number of people, it still might be the morally right thing to do to release the drug. According to Mill's utilitarianism, both the number of people and the degree of benefit or harm must be considered.

Applications in Business

As we've seen, utilitarianism can be used to make decisions in the business world. When you are weighing the benefit of your company's new drug against its possible negative side effects, you are engaging in utilitarian thinking.

In fact, the classic cost vs. benefit approach to ethical decisions, when a company weighs the pros and cons of possible outcomes for a decision, is utilitarian in nature.

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