Journal of the History of Economic Thought, Volume 30, Number 3, September 2008

JEREMY BENTHAM AND GARY BECKER: UTILITARIANISM AND ECONOMIC IMPERIALISM BY

JIMENA HURTADO

I. INTRODUCTION In a recent article Jerry Evensky (2005) shows that, in spite of the claims of its members, the Chicago School1 is far from being a continuation of Adam Smith’s thought. The starting assumption of the economic approach to behavior,2 with which Evensky (2005, p. 197) associates the Chicago School, is that ‘‘humans can be represented as homo economicus’’ whose single motive is ‘‘personal utility maximization.’’ But, he argues (2005, p. 198), nothing is further from Smith’s ideas. Evensky (2005, p. 203) concludes that ‘‘Adam Smith was not an economist offering a materialist vision of humankinds’ progress based on the homo economicus assumption.’’ Instead, Jeremy Bentham was. Based on the anthropological notion contained in the utility principle, in its enunciative sense, Bentham constructed a whole system aimed at explaining social phenomena in order to guide social action. By presenting the utility principle as an axiom, Bentham is able to account for any action and/or social phenomenon as the result of individual decisions aimed at maximizing one’s own happiness. Rational calculation accounts for individual decisions: people maximize pleasures and minimize pains according to their own self-interest. This is the method the economic approach to behavior uses. It is a method that has Economics Department—CEDE, University of los Andes. E-mail: [email protected]. I gratefully acknowledge comments from Michel DeVroey and David Colander on earlier versions at the ninth annual meeting of the European Society for the History of Economic Thought and the thirty-third annual meeting of the History of Economics Society. I would also like to thank the organizers of the session at HES meeting, Steven Medema and Alain Marciano. Remarks from an anonymous referee helped improving those versions. All remaining errors and omissions are my responsibility. 1 For a brief definition of this school see Reder (1998). The genealogy of this school, in its two main periods, can be clearly traced back to the first institutionalists and even to Marshall. This can be established by tracing the thinkers the members of this school name as their mentors or most important influences. The link to Bentham, however, is harder to establish because none of them mentions the English author as a source of inspiration—except, of course, Gary Becker as regards law and economics. 2 Becker changes the name from the economic approach to human behavior to the economic approach to behavior because he believes it can also be applied to the biological world (Becker 1981, p. x). ISSN 1042-7716 print; ISSN 1474-449X online/07/040001-23 Ó 2008 The History of Economics Society doi:10.1017/S104277160800032X

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given economics the instruments to deal with subjects that were not traditionally considered as part of its field of study. This expansion of economics has been called economic imperialism: economics colonizing the territory of other social sciences. Economic imperialism is not a new phenomenon. The Physiocrats considered their nouvelle science of economics as the ‘‘science of natural law applied, as it should be, to civilized society,’’3 and they deplored Jean Baptiste Say’s restricting economics to the science of wealth.4 However, economics was defined according to a particular field. It dealt with the administration of government or with the study of the production and reproduction of material wealth or, more generally, of the material conditions of human life. This definition of economics limited its scope, and economic theory centered its attention on explaining the phenomena of production, distribution, and consumption. Today, this kind of definition can be identified with the study of the market—that is, of how a decentralized economy works and how markets clear. This study implies a method. The methodological individualism adopted by most economists—assuming that social phenomena can be explained as a result of individual action—led them to concentrate on individual behavior. Economists increasingly approached their field with certain techniques capable of representing individuals as always transforming their optimizing plans into optimizing behavior. The method then consists in assuming a certain axiom about human behavior from which the topic is analyzed. Economics is no longer defined by a particular field but by a particular method—a method that, some economists claim, allows them and other social scientists, if they adopt it, to deal with mostly any social phenomenon. Edward Lazear (2000, p. 103, n. 7) identifies Gary S. Becker as the founder of modern economic imperialism and names Margaret Reid’s work on household economics in the mid-1930s and T.W. Shultz’s work on human capital in the early 1960s as its predecessors. We would like to argue here that this kind of economic imperialism can be traced back to Jeremy Bentham.5 Establishing the genealogy, so to speak, of this phenomenon allows us to discover its philosophical foundations. It allows us to recover Bentham’s influence on the shaping of contemporary economics. Economics has forgotten almost everything about its past as a part of moral philosophy, or at least it is generally contended it is a past it has been able to leave behind. However, this past seems more at hand than what would make a true defender of a value-free science comfortable. The aim of this paper is not to evaluate the influence of Bentham or Becker on economic theory in particular or social sciences in general or to present a criticism of 3

Quote in Neill (1949, p. 535-36). Neill, describing the physiocrats, writes, ‘‘They called themselves philosophes economistes, and they looked upon their new science as a social philosophy including, economic, political, ethical and social activity’’ (1949, p. 535). 4 Dupont de Nemours (1815, quoted in Neill 1949, p. 536). 5 Fine (2000, 2002) identifies two periods in modern economic imperialism. He identifies the old imperialism with Gary Becker and the new one with George Akerlof and Joseph Stiglitz. Whereas the former treats all problems as if they were market problems, the latter focuses on information problems, market failures, and the possibility and desirability of non-market relations. Fine argues economic imperialism is rather recent in the history of economic thought because the autonomization of economics dates from the Marginal Revolution when it started to be identified with the market, centering on the individual and her optimizing behavior. Here we contend this identification of economics and the method associated with it can be traced back at least to Bentham.

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their work. The point we wish to advance lies within the history of economic thought. Beyond Becker’s own statements,6 we would like to argue a link can be established between Bentham and Becker as regards their conception of the scope and method of economic theory. Following Pierre Force (2003), we will argue that Bentham’s classic utilitarianism can be considered as an important philosophical influence on the economic imperialism possible with Becker’s theory. Becker recognizes a link with Bentham in the area of Law and Economics. We believe this link can be extended to the whole economic approach to behavior Becker develops in his work, thus providing a better understanding of the philosophical foundations of economic imperialism. This paper strives to show how Bentham’s systematic use of the utility principle helps transform economics into a method—a way of conceiving and studying behavior and choice. It is in the understanding of the contents and status of the principle of utility that we might grasp the foundations and consequences of the conception of human behavior implied by the economic approach. Force (2003, p. 93) considers that ‘‘the reference to Bentham indicates that Becker’s theory remains indebted to eighteenth-century neo-Epicureanism’’ and believes that ‘‘Becker shares with philosophers like Bentham and Helve´tius . . . the desire to identify some stable principle of behavior behind the bewildering variety of human choices and preferences.’’ We take a step further than Force in arguing that the application of the principle of utility to every aspect of human behavior justifies economic imperialism by transforming economics into a method of general analysis of behavior. Indeed, economics is no longer defined according to its subject matter but according to its method, which means an ever-increasing scope explaining Becker’s claim that the economic approach provides a rigorous framework for the analysis of all social phenomena.

II. THE ECONOMIC APPROACH TO BEHAVIOR Gary Becker discusses the different definitions of economics in the introduction to his 1976 book The Economic Approach to Human Behavior. Significantly, to begin this introduction he quotes George Bernard Shaw: ‘‘Economy is the art of making the most of life.’’ After considering three possible definitions, Becker concludes that Lionel Robbins’s (1932) definition is the most general of all. Economics, according to this definition, corresponds to the study of how human beings allocate scarce resources to competing ends.7 This definition, Becker asserts, means economics is not limited to the study of market phenomena (Becker 1976, p. 4) or to what we have called the reproduction of the material conditions of human life. Note also that, 6

Becker presents his work as a continuation of a long series of authors who have used the economic approach to behavior but who did not have the technical instruments to make a rigorous and ample use of it. Among these authors, Becker gives particular importance to Adam Smith and Jeremy Bentham. Actually, according to Becker, Smith is less systematic in his application of the economic approach than Bentham. Bentham, on the other hand, was, according to Becker, much too worried with social reform and the normative aspects of his theory to exploit all of the economic approach’s implications. 7 Robbins considers ‘‘the unity of subject of Economic Science [is] the forms assumed by human behaviour in disposing of scarce means’’ (1932, p. 85). ‘‘Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses’’ (in a footnote to this sentence Robbins refers to Menger, Mises, Fetter, Strigl and Mayer) (1932, p. 85).

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contrary to the traditional view on this definition, Becker does not emphasize scarcity as the main topic of economic enquiry. However, this definition, according to Becker, would not shed much light on what makes the difference between economics and other social sciences. Becker continues by saying that this definition, as broad as it might seem, says nothing about the economic approach, or what we have called the method of economics. And it is precisely this point that Becker considers to be the characteristic feature of economics (Becker 1976, p. 5). Economics has a particular method of analysis (Becker 1993a, p. 385), according to which explaining human behavior on the basis of certain assumptions leads to understanding social phenomena. Becker has been praised and criticized because of this presumption within and outside of economics. He has been praised for opening new research fields in economics and has been followed by an ever-increasing number of economists (Rosen 1993). This is the case in the field of Law and Economics where William Landes and Richard Posner have become prominent figures and recognize the importance of Becker’s initial spark. Victor Fuchs (1994) also sees in Becker an important pioneer in the field of health economics. Becker has also had major influence in the fields of sociology, political science, and demography. Criticism centers mostly on his extensive use of rational choice theory—that is, of the rational economic agent.8 This criticism goes beyond the appraisal of Becker’s work; it has pervaded most of the recent history of economics and constitutes a vast corpus of literature nowadays following, for example, Amartya Sen (1977). (See Bowles and Gintis 1993, 2000; Gintis 2000; Zafirovski 2003; Steele 2004, among many others). Criticism has also been addressed to Becker’s economic imperialism, to his intention of applying a single method as if it were capable of explaining all human behavior (Zafirovski 1999, 2000). The advantage of the economic approach to human behavior is, according to its tenents, that it is the most general and powerful approach available in social sciences (Stigler and Becker 1977, p. 77). In Becker’s words, ‘‘The rational choice model provides the most promising basis presently available for a unified approach to the analysis of the social world by scholars from different social sciences’’ (Becker 1993a, p. 403).9 It is interesting to note that Becker assimilates the economic approach to the rational choice model, which indicates that all of his construction relies on a specific conception of human behavior. This is why, according to the author, ‘‘[T]he economic approach provides a valuable framework for understanding all human behavior [because] all human behavior can be viewed as involving participants who maximize

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Becker recognizes economics might have a narrow approach to preferences and behavior: we do not have to assume that everybody is a perfect calculator. There are limits to our ability to calculate. Broader preferences and ‘bounded’ rationality are part of a more relevant model of rational behavior. In my own way I have been trying to broaden preferences to take account of some of these points. But I am dubious about behavior that won’t survive in an exchange economy with an extensive division of labor’’ (Clement Interview 2002, p. 22).

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‘‘In large part, the success of economics derives from its rigor and relevance as well as from its generality. The economic toolbox can be used to address a large variety of problems drawn from a wide range of topics’’ (Lazear 2000, p. 99). Note that the author refers to the ‘‘economic toolbox,’’ thereby emphasizing the method used rather than the object of study.

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their utility from a stable set of preferences and accumulate an optimal amount of information and other inputs in a variety of markets’’ (Becker 1976, p. 14). The economic approach has become very influential not only in economics but also in other social sciences. Becker was awarded the Nobel Prize in Economics in 1992 for ‘‘having extended the domain of economic theory to aspects of human behavior which had previously been dealt with—if at all—by other social science disciplines such as sociology, demography and criminology.’’10 Analyzing this success as regards crime, Becker asserts: ‘‘One reason why the economic approach to crime became so influential is that the same analytic apparatus can be used to study enforcement of all laws, including minimum wage legislation, clean air acts, insider trader and other violations of security law, and income tax evasions’’ (Becker 1993a, p. 391). More generally, Becker says: I have come to the position that the economic approach is a comprehensive one that is applicable to all human behavior, be it behavior involving money prices or imputed shadow prices, repeated or infrequent decisions, large or minor decisions, emotional or mechanical ends, rich or poor persons, men or women, adults or children, brilliant or stupid persons, patients or therapists, businessmen or politicians, teachers or students. The applications of the economic approach so conceived are as extensive as the scope of economics in the definition given earlier [Robbins’s] that emphasizes scarce means and competing ends. It is an appropriate approach to go with such a broad and unqualified definition, and with the statement by Shaw that begins this essay [see p. 4 of this paper], (Becker 1976, p. 8).

Becker believes this approach models ‘‘commonsense’’ ideas, which explains why it is so appealing and even familiar to anyone who reads his work. Becker uses this approach to analyze five main topics: discrimination against minorities, crime and punishment, human capital, family behavior, and social capital. In general terms, all these topics have to do with the analysis of social interactions, which Becker explicitly analyzes in his 1974 article, A Theory of Social Interactions, and later on in his joint book with Kevin Murphy (2000), Social Economics: Market Behavior in a Social Environment. In the 1974 article Becker attempts to incorporate ‘‘a general treatment of interactions into the modern theory of consumer demand’’ (Becker 1974, p. 1066). He advances this general treatment has a large applicability and significance (Becker 1974, p. 1066) and regrets modern economics has given little attention to a key subject in earlier economic thinkers that has been left to sociology and anthropology (Becker 1974, p. 1091). Economists, Becker says, ignore social forces when determining utility functions (Becker and Murphy 2000, p. 8). Social interactions include the influence of people’s behavior on each other. This behavior, according to Becker, can be analyzed as if it

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When asked what he thought about being classified as an economic imperialist Becker answered: That refers to my belief that economic analysis can be applied to many problems in social life, not just those conventionally called ‘‘economic’’. The theme of my Nobel lecture, based on my life’s work, is that the horizons of economics need to be expanded. Economists can talk not only about the demand for cars, but also about matters such as the family, discrimination, and religion, and about prejudice, guilt, and love. Yet these areas have traditionally received little attention in economics. In that sense, it’s true: I am an economic imperialist. I believe good techniques have a wide application (Interview Becker 1993b).

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were market behavior. ‘‘[S]ocial influences or behavior are common and pervasive. We are especially interested in the mutual interaction between social forces and market behavior, which we call ‘social markets’. By markets we do not mean only ordinary market behavior, for we also consider implicit markets, such as marriage markets’’ (Becker and Murphy 2000, p. 5). Thus, Becker incorporates the analysis of social interactions into the economic framework, meaning he preserves the characteristics of methodological individualism. Therefore, the social environment is treated as arguments ‘‘along with goods and services, in a stable extended utility function’’ (Becker and Murphy 2000, p. 8). This approach not only allows dealing with the effect of the changes in the environment on choices and behavior, it also ‘‘and perhaps even more important . . . provides a natural way to analyze how the social environment itself gets determined by the interaction of individuals’’ (Becker and Murphy 2000, p. 8). Social phenomena, then, are explained through the choices and actions of individuals. Even if ‘‘each person’s behavior depends on the behavior of others’’ in this approach there is no such thing as determining social forces independent from and guiding human actions. This approach allows accounting for holism (that is, the belief of sociologists and anthropologists, according to Becker and Murphy (2000, p. 9)): ‘‘we [economists] do not model behavior as being determined by forces beyond the control of the individual’’ (Lazear 2000, p. 100). There is no such thing as determining social forces, there are only very strong complementarities: ‘‘When complementarities are strong, they can destabilize the market for goods, create multiple equilibria, induce large responses in quantities to shifts in prices and other parameters, and cause other unusual behavior patterns’’ (Becker and Murphy 2000, p. 10). Therefore ‘‘[R]ather than saying that individuals have little control over outcomes because most are determined by social constraints, Becker and Murphy prefer to frame the problem in terms of maximization in the face of large spillover effects’’ (Lazear 2000, p. 113). This framework assumes individuals are utility-maximizers and preferences are stable over time and similar among individuals. Individuals are then characterized by their utility functions and the arguments that constitute them. These arguments may include tastes for discrimination, altruism among family members, advantages from crime, etc., making the analysis applicable to most any aspect of human life. The applicability and power of the approach has been greatly enhanced by what Stigler and Becker (1977, p. 77) call the new theory of consumer choice. This theory ‘‘transforms the family from a passive maximizer of the utility from market purchases into an active maximizer also engaged in extensive production and investment activities’’ (Stigler and Becker 1977, p. 77). Households then ‘‘maximize a utility function of objects of choice, called commodities, that they produce with market goods, their own time, their skills, training and other human capital, and other inputs’’ (Stigler and Becker 1977, p. 77).11 The arguments of the utility function then correspond to the commodities produced and 11

Becker’s Treatise on Family (1981, 1991) expands this treatment dealing with the formation and functioning of families. Households are treated as a productive unit capable of producing goods not found on the market, the production of which requires other goods and time. With this framework, Becker analyzes family structure and interactions between family members. His results have been widely criticized, especially by feminist scholars, as he presents polygenic marriages, non-mixed marriages, and traditional division of labor within the family as the most efficient arrangements.

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the production function varies according to the subject studied (for example, the characteristics of other persons with whom the individual interacts, music appreciation, education, medical care, or training). The flexibility of the approach is thus evident. Individuals can produce any commodity from which they derive pleasure, and this goes beyond market activity. Besides, economics, as Becker himself acknowledges, has spent a considerable amount of time in its recent history on the elaboration and perfecting of mathematical formalization and techniques. This allows a rigorous technical framework to analyze optimization problems: ‘‘The power of economics lies in its rigor. Economics is scientific, it follows the scientific method of stating a formal refutable theory, testing the theory, and revising the theory based on the evidence. Economics succeeds where every other social sciencew fail because economists are willing to abstract’’ (Lazear 2000, p. 102). This rigor and the abstract form the theory takes come from its axiomatic foundations, which can be traced to Bentham’s utility principle. This principle contains a fundamental assumption regarding human behavior which facilitates not only the axiomatization of this theory but also, and perhaps, more importantly, the formalization of a social discourse. What interests us is not so much the details of Becker’s economics but rather its underpinnings. Lazear (2000, p. 100) claims these foundations are common to all economics and referred to three fundamental premises: ‘‘First, economists assume that individuals engage in maximizing rational behavior. Second, economics adheres strictly to the importance of equilibrium as part of any theory. Third, economists place a heavy emphasis on a clearly defined concept of efficiency.’’ The first one clearly has to do with the anthropological foundations of this theory and leads us directly to Jeremy Bentham’s utility principle. This principle has two senses: an enunciative sense and a censorial sense. The former states that the individual’s aim is happiness: enjoying pleasures and being protected from pains (Bentham 1789, p. 74).12 This, according to Bentham, is a self-evident truth in need of no further proof or demonstration. The censorial sense of the utility principle states that the only valid aim of action and the only moral criteria is the greatest happiness. The implications of this link between Bentham and Becker not only go to the philosophical underpinnings of the latter’s economic imperialism, but also implies that, as some commentators have tried to argue,13 Bentham’s utilitarianism can be seen as generalized economics that encompasses all aspects of human and other life (Laval 2003, p. 10). Bentham does not separate different aspects of life because he believes behavior is universal and does not depend upon context or activity. According to Laval (2003, p. 11), Bentham’s system implies it is the whole of human action which follows the economic law of maximization of benefits and minimization of pains. This observation of human behavior is the basis of Bentham’s moral philosophy and project of social reform. It is not an assumption on human nature but an observation of human behavior, just like the one present in the economic approach.

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We will come back to the principle in detail in section IV. Nathalie Sigot (2001) and Christian Laval (2003), for example.

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III. THE APPARENT RUPTURE WITH BENTHAM’S UTILITARIANISM In his account of the adoption of the marginal utility theory, George Stigler (1972, p. 114) presents Bentham’s theory as one of its first formulations. Regardless of its role as a moral guide, Stigler asserts, utility theory is an omni-comprehensive theory of behavior (1972, p. 114). According to Stigler, even if Bentham did not totally develop a theory of economic behavior based on utility, he did take the theory to a considerable length (Stigler 1972, p. 114–15). Stigler considers that this gap in Bentham’s theory is due to the absence of a theory of relative prices based on utility.14 Utility theory provided a unified explanation of behavior by presenting all individuals as utility maximizers and all economic problems as decisions concerning tastes and constraints (Stigler 1972, p. 122). Viewing individuals as utility maximizers implies assuming a certain human behavior but has no implication as to the object of choice. John Davis (2003, p. 32) says: ‘‘there is nothing that commits rational choice analysis to any particular view of the nature or content of preferences, and the door is wide open to making any assumptions about their character that may suit the investigation at hand.’’ According to Herbert Simon (1986, p. 210), the assumption of rational individuals in economics is free from any assumption as to the contents of human goals and values; it assumes human behavior is consistent over time and is rationally objective as regards the means it mobilizes. Economic rationality has to do with the results of decisions and not with the process that leads to those decisions (Simon 1986, p. 210). This idea marks the beginning of the distancing of economics from utilitarianism, for it leaves aside the formation of preferences—that is, the motive of action—thus breaking from the hedonistic implications of utilitarianism. Paul Samuelson’s theory of revealed preferences reinforces this stand by reducing preferences to a set of behavioral propositions. Economics does not deal with the formation of these preferences; they are deduced from an individual’s actual choices. This means individuals choose what they want and no change or gap is assumed between actual choice and preference orderings. The economic approach to human behavior builds upon this view and assumes tastes are given and preferences are stable: ‘‘Tastes are the unchallengeable axioms of a man’s behavior . . . tastes neither change capriciously nor differ importantly between people’’ (Stigler and Becker 1977, p. 76).15 Individuals rationally maximize their utility function or the expected value of this function. Nothing is said about the actual process of preference formation. Individuals maximize utility as they conceive it. In this sense, the economic approach, in particular, and economic theory, in general, has tried to stay away from psychology.16 Shira Lewin (1996) traces this anti-psychological bias to the crisis of hedonism near the turn of the twentieth century with the debate about the relationship between economics and other social sciences (Lewin 1996, p. 1294). Hedonism became 14

In what follows, we will show Stigler’s assertion is not accurate. This hypothesis has been the object of numerous criticisms from economists as well as psychologists (see Hirschman 1984, Bowles 1998, Rabin 1998, Elster 1998, Davis 2003). 16 This trend is changing in recent years with behavioral economics, which lies beyond the scope of this paper. This branch of economics is becoming highly influential and aims precisely at incorporating psychological considerations within economics in order to gain in realism. 15

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particularly relevant in economics through the incorporation of Benthamite analysis into Stanley Jevons’s economic theory. Jevons underlines the importance of the utility principle and of Benthamite theory as a social philosophy. However, he considers that economics deals with the lowest level feelings and leaves aside all that have no direct relationship with material wellbeing. Hence, Jevons separates economics from moral theory even if he asserts the first should be grounded on reasonable moral foundations (Sigot 2002, p. 266). This explains why Jevons builds his economic theory on the grounds of Bentham’s felicific calculus. His theory is built upon pleasures and pains and the possibility of quantifying them in order to construct a mathematical science. Jevons, following Bentham, gives a central place to individual behavior understood as the individual’s capacity to calculate in terms of pleasures and pains. Nevertheless, Jevons, because of his concern with making economics a mathematical science, leaves aside various elements from Bentham’s theory. According to Nathalie Sigot (2001, p. 149–53), this simplification implies eliminating the normative sense of Bentham’s utilitarianism—thus its reformist intentions and its central figure: the legislator. This implication extends to the economic approach which claims to have no reformist or normative pretensions whatsoever. Economics in general, and the economic approach in particular, affirms its positive aspect, its intention of only illustrating the formulation of public policy but not providing tools for the implementation of a particular social project. In contrast to Bentham’s theory, economics is no longer a branch of the science of the legislator and preferences are considered to be exogenous. Indeed, in Bentham’s utilitarianism, individuals are considered as utility maximizers (that is, calculators who try to maximize their pleasures and minimize their pains) who act under the direct influence of the legislator or the deontologist. This means that these two figures are capable of creating new interests and/or imposing constraints on human behavior in order to direct individuals towards the maximization of social utility (that is, the greatest happiness, making duty and interest coincide (Bentham 1789, p. 34)). Preferences are then endogenous as the deontologist and the legislator are capable of changing not only exterior constraints (that is, imposing dissuasive punishments (Bentham 1789, p. 157)) but also of making individuals change the arguments of their utility function through information and the use of the public sanction (Bentham 1983, pp. 175, 251). In spite of these changes, Jevons, like Bentham, sees utility as a real psychological substance, and Bentham’s notion of individuals as hedonists is incorporated within economic theory. Jevons’s achievement then would have been transforming economics into a science using utility theory, hence ‘‘making it possible to derive economic laws from a single fundamental law of human nature—the law of maximum utility’’ (Lewin 1996, p. 1297). Towards the end of the nineteenth century and the beginning of the twentieth, harsh criticism was addressed to this hedonistic view of human beings. Psychologists, for one, contended there existed motives other than pleasure and pain; behavior could often be impulsive and not goal oriented and so a study of human behavior should take into account non-teleological motives (Lewin 1996, p. 1299). Institutionalists, on the other hand, also claimed the economic view of human behavior was insufficient, and not only instincts but also ‘‘evolution of institutions and the social embededness of economic activity’’ should be considered (Lewin 1996, p. 1300). These criticisms, according to Lewin (1996, p. 1305), were invigorated with the growing influence of

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behaviorism and positivism. Economics should be able to postulate falsifiable propositions in order to have a truly scientific status. The hedonistic assumptions did not seem to stand to the test. Mainstream economics was not immune from these criticisms. Hedonistic language was increasingly left aside and authors such as Pareto asserted that ‘‘ordinal preferences did not require any psychological interpretation; they merely summarized empirical regularities of choice behavior’’ (Lewin 1996, p. 1309). Total independence of economics from hedonistic psychology was supposed to be achieved with the theory of revealed preferences. Nevertheless, it is difficult not to see at least some remains of such psychology in the standard assumptions about human behavior used in economic theory. Utility might not be directly associated with pleasure or with an ultimate aim of individual action, but it is difficult not to see the economic agent acting in a teleological fashion, which allows maximizing an object of choice normally thought of as producing some kind of satisfaction. Keeping the language of utilitarianism, at least in the enunciative sense of the utility principle, is not without consequence. The characterization of behavior found in the economic approach clearly states that individuals are capable of identifying ends (that is, producing and/or consuming enjoyable goods) and of determining the best means to attain those ends (that is, optimizing decisions which imply individuals use their endowments and available information so as to maximize their objective function). Behavior is then goal-oriented and even if preferences are exogenous the final aim is still satisfaction as the individual understands it. Moreover, the decline of behaviorism and the impossibility of empirically founding the theory of revealed preferences led to a revival of utility theory as justified through Milton Friedman’s as if methodology. Microeconomic theory broadened its scope and was used to analyze non-market phenomena. In this context, the economic approach to behavior found fertile grounds. In a sense, this approach is a revival of utility theory as conceived by its first tenants thus a return to Bentham’s utilitarianism.

IV. FROM BENTHAM TO BECKER: BEYOND LAW AND ECONOMICS Becker believes that if the basic assumption regarding individual behavior is correct then ‘‘the economic approach provides a unified framework for understanding behavior that has long been sought by and eluded Bentham, Comte, Marx, and others’’ (Becker 1976, p. 14). In this section we will present the connection between the economic approach and, at least, the enunciative sense of Bentham’s principle of utility. In so doing, we strive to show that Becker’s endeavors can be seen as the direct application of Bentham’s methodology, which goes beyond the latter’s concern with legal and illegal activities. The underlying hypothesis is that Bentham can be considered as a major foundation of the economic approach and, therefore, of this particular form of economic imperialism.

The Obvious Relationship Becker recognizes that his work on criminal behavior builds upon of the initial attempts of Cesare Beccaria and Bentham to apply economic calculus to criminology, thus providing an economic theory of punishment:

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Lest the reader be repelled by the apparent novelty of an ‘‘economic’’ framework for illegal behavior, let him recall that two important contributors to criminology during the eighteenth and nineteenth centuries, Beccaria and Bentham, explicitly applied economic calculus. Unfortunately, such an approach has lost favor during the last hundred years, and my efforts can be viewed as a resurrection, modernization, and thereby I hope improvement on these much earlier pioneering studies (Becker 1968, p. 209).17

The framework is the same Becker uses to analyze other social phenomena. Selfinterested individuals strive to maximize their utility and minimize their costs, in an environment characterized by scarcity, uncertainty and conflicting goals (Guidi 2000, p. 4). Bentham is considered a forerunner because of the welfarist and consequentialist features of his theory (Guidi 2000, p. 5). Bentham did not intend to limit his theory to the analysis of the law or the system of legislation. He believed the utility principle could be used as the basis for the analysis of all social activity because it was built on the fact that the two sovereign masters of humanity are pain and pleasure (Bentham 1789, p. 11). ‘‘By the principle of utility is meant that principle which approves or disapproves of every action whatsoever, according to the tendency which it appears to have to augment or diminish the happiness of the party whose interest is in question: or, what is the same thing in other words, to promote or oppose that happiness’’ (Bentham 1789, p. 12). The principle of utility is a standard of evaluation. It is consequentialist: an action producing pleasure is good as long as the pain or the sum of pains it might produce is less than the total sum of pleasures (Bentham 1983, p. 150). And it is not restricted to the actions of a single human being but of any ‘‘party,’’ be it one individual or a whole community. The principle supposes a particular view of human behavior. Individuals strive at maximizing their pleasure and their motive of action is precisely this maximization. This implies that calculus naturally finds its way into the analysis of social phenomena. Bentham explicitly states human beings calculate: When matters of such importance as pain and pleasure are at stake, and these in the highest degree (the only matters, in short, that can be of importance) who is there that does not calculate? Men calculate, some with less exactness, indeed, some with more: but all men calculate. I would not say, that even a madman does not calculate. Passion calculates, more or less, in every man: in different men, according to the warmth or coolness of their disposition; according to the firmness or irritability of their minds; according to the nature of their motives by which they are acted upon (Bentham 1789, p. 173–74).

This is true of anyone and in any circumstance. Hence, Bentham’s utilitarianism is not restricted to law. On the contrary, even in his economic writings the pervasiveness of the utility principle is evident. Bentham’s economics has received far less attention

17

‘‘I explored instead the theoretical and empirical implications of the assumption that criminal behavior is rational (see the early pioneering work by Bentham [1931] and Beccaria [(1797) 1986])’’ (Becker 1993a, p. 390). The texts Becker refers to are Beccaria’s On Crimes and Punishments and Bentham’s Theory of Legislation.

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than his legislative and moral theories. However, an increasing body of literature deals with his economics as an extension of his utilitarian theory.18 The point we would like to underline here is that in his economic writings, which appear to be punctual analyses of particular problems (usury, money, value) leading to specific policy recommendations, Bentham introduces something that belongs to his utilitarianism. The application of the principle of utility implies a particular concept of human behavior. In so doing, Bentham introduces this conception into economics and erases all borders between different social activities. The study of social phenomena relies on the study of human behavior and thus of choices derived from calculations. Therefore, as Becker also recognizes, his connection with Bentham goes beyond the field of law and economics. In arguing that the economic approach is not new, Becker quotes Bentham and his explicit belief ‘‘that the pleasure-pain calculus is applicable to all human behavior’’ (Becker 1976, p. 8). This corresponds exactly to what Bentham had already done almost two centuries before.

The Foundations of Bentham’s Project: the Principle of Utility As we said in the last section, Bentham builds his entire project on the grounds of the principle of utility. This principle has two senses: ‘‘1. In its censorial sense, it holds up the greatest happiness of the greatest number as the only universally desirable end. 2. In its enunciative sense, each man’s own happiness, his only actual end’’ (Bentham 1817, pp. 59–60). Hence, the principle of utility is normative and descriptive. It establishes a higher goal for human action and describes the motives of this action: ‘‘Well-being, composed as hath been seen, of the maximum of pleasure minus the minimum of pain—the pleasure it will be seen is man’s own pleasure; the pain is man’s own pain—will upon strict and close enquiry be seen to be actually the intrinsic and the ultimate object of pursuit to every man at all times’’ (Bentham 1983, p. 147–48). Human beings act, pursuing their wellbeing or their own interest (Bentham 1789, p. 74), as they understand it. Indeed, Bentham considers no motive, no pleasure or pain, can be called good or evil per se and believes there is no such thing as a summum bonum. Therefore, individuals are seen as having valid reasons to consider a particular object—in the largest sense of the word—as a source of pleasure or pain. Thus, just as in the economic approach, after individuals define what these objects are, they rationally strive to pursue the best action in order to obtain the maximum utility seen as the net sum of pleasures.19

18

(See Sigot 2001, Guidi 2000.) These two scholars have many more texts on this point and other commentators have also contributed to the analysis of Bentham’s economics. Here, we restrict our references to these two because they are the most relevant for our present purposes. We must also note that contrary to Sigot’s conclusion (2001, p. 188), we do not believe Bentham’s utilitarianism has not been followed in economic theory. The whole point of this paper is to show Becker’s theory can be considered as the modern representative of Bentham’s ideas, even if the censorial sense of the utility principle seems to be overlooked. 19 Discussing the taste for discrimination, for example, Lazear (2000, p. 108) states: ‘‘The taste might reflect a utility function that most would regard as objectionable, sinister, or evil, but the behavior of the individual possessing such a taste is rational, that is, consistent with maximizing behaviour. He continues (2000, p. 109): ‘‘Nevertheless, the emotional aspect of the topic did not prevent economists from thinking about discrimination in a rigorous way.’’

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The enunciative sense of the principle of utility posits a certain conception of human behavior. This conception is quite similar to the one behind Becker’s economic approach: we are proposing the hypothesis that widespread and/or persistent human behavior can be explained by a generalized calculus of utility-maximizing behavior, without introducing the qualification ‘‘tastes remaining the same.’’ It is a thesis that does not permit of direct proof because it is an assertion about the world, not a proposition in logic (Stigler and Becker 1977, p. 76).

This latter point is strikingly similar to the axiomatic character Bentham gives to the principle of utility. Bentham does not discuss this principle: it does not allow proof because it is a first principle used to prove everything else (Bentham 1789, p. 13).20 This means that, as in Becker, there is no explanation as to why they conceive human beings as utility maximizers. Thus, in Hale´vy’s terms, the axiomatic character given to the enunciative sense of the utility principle corresponds to saying: ‘‘that every man unconsciously refers to the principle of utility; it means every man considers his utility as a quantity, pleasures and pains as vectors to which arithmetical operations can be applied, and the ends of human action as a possible object of science’’ (Hale´vy 1901, vol. I, p. 39, our translation). There is a precise conception of human behavior behind this enunciative sense of the principle of utility. Wesley C. Mitchell (1918, p. 172–76) synthesizes it in the following features: (1) human beings are hedonistic; (2) human beings are rational; (3) human beings are passive; (4) human beings’ only faults are calculation errors; (5) human beings have a preference for their own selves. Conceiving households as producers of commodities which, in turn, allow maximizing utility may seem far from Bentham’s enunciative sense of the utility principle. But the characteristics of human behavior implied by it are certainly very close to those implied by the economic approach. Households as producers of commodities correspond to a technically more advanced notion of human beings as pleasure producing machines that follow a predetermined guide of action. That is, human beings respond to a mechanics of passions and their interactions correspond to the positive and negative externalities they generate on each other as a result of the maximization of their own utility. Furthermore, as Force (2003, p. 95) points out, ‘‘Becker sees Bentham’s system as an anticipation of his own because it postulated objects of choice that were abstract entities, removed from empirical observation.’’ In his listing of pleasures and pains Bentham includes those of taste, sexual appetite, senses, wealth, power, influence and authority, curiosity, amity, reputation, sympathy, antipathy, self-regarding, and the pains of labor, death, and bodily pains (Bentham 1817). Thus, pleasures and pains are not directly associated with market goods; they can be seen as products of the individual or the household. From this, Force (2003, p. 95) establishes a direct link between the notion of utility used by the economic approach and the Benthamite notion of pleasure. In this sense, Force continues, Becker ‘‘can safely assume that we

20

‘‘Is it susceptible of any direct proof? it should seem not: for that which is used to prove every thing else, cannot itself be proved: a chain of proofs must have their commencement somewhere. To give such proof is as impossible as it is needless’’ (Bentham 1789, p. 13).

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all want health, prestige, sensual pleasure, benevolence or envy in the same degree because of the pleasure these goods bring us.’’ The enunciative sense of the principle of utility thus appears to be present in the economic approach to behavior. It is this sense, we have argued, that allows making the economic approach a plausible explanation of all human behavior. Therefore, we submit that Becker is the modern representative of Bentham’s system and accomplishes Bentham’s wish of proposing a comprehensive method of analysis, thus founding economics’ pretension of becoming a social philosophy.

Economics as a Method Between 1786 and 1804 Bentham consecrated much of his efforts and time to economics. Most of his writings on the subject were not published, as Bentham had serious problems concentrating on a publishing enterprise which required attention he was not willing to take from other projects.21 Some of the texts were published during Bentham’s lifetime, the most popular one being Defence of Usury (1787); others appeared in his Works, edited by John Bowring. This edition has never received much commendation, either at the time of its publication or thereafter. These might be some of the reasons why Bentham never really has been considered an economist. John Maynard Keynes, for example, did not consider Bentham an economist and opposed the possibility and relevance of calculating in a context of radical uncertainty, in which social phenomena take place. Joseph A. Schumpeter believes that there is little relation between Benthamite utilitarianism and economic analysis and believes the former is a complete failure due to its erroneous visions of individual behavior and social institutions. Bentham’s economic texts did not receive much attention in spite of Werner Stark’s editing them in 1952-54. Stark prepared this edition using manuscripts as well as published material in order to bring Bentham to the attention of economists—without much success. It is that true Bentham’s economic writings deal with specific topical themes (the question of paper money, the causes of inflation, the regulation of the interest rate, the price of provisions, etc.) which makes them appear as discussions having lost their relevance. Nevertheless, Bentham did try to produce a manual of political economy because, first, he believed that science had no value if it was not a practical guide to action and, second, he thought The Wealth of Nations was much too complicated for laymen to understand all of its meaning. The texts corresponding to this manual (Manual of Political Economy and Institute of Political Economy) were never finished by their author and had to wait until Stark’s edition to came to light. These texts prove Bentham had given thought to the subject and had solid opinions and ideas on the matter. These were the product of his systematic use of the utility principle. This systematic use means posing any and every social problem in terms of the distribution of a limited quantity of a given good, thereby transforming all social problems into economic ones. Even if this is not Bentham’s explicit intention, for he considered economics to be a part of the science of legislation,22 his approach corresponds to 21

Besides, it is known one of these texts on monetary theory was given to John Stuart Mill and David Ricardo, who did not consider it apt for publication. One of these manuscripts, as Stark reports, was lost when Ricardo returned it to Louis Dumont. 22 ‘‘The distinction marked by the word economy is applicable rather to a branch of the science of legislation, than to a division in a code of laws’’ (Bentham 1952, p. 94).

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analyzing social phenomena, including non-market phenomena, as if it were a market, much like what Becker does (Fine 2002). Bentham’s explicit treatment of political economy assumes it is a branch of legislation. Political economy corresponds to the efficient administration of national wealth following the principle of utility. This means that the aim of political economy, as that of any other branch of legislation, is to determine when the government must intervene in order to guarantee the greatest happiness. In economics, this means that given that government is an evil in itself because it constrains human liberty, government intervention should be reduced to its minimum and be based on a caseby-case analysis. Political economy then has to do with specific problems, the study of which must lead to specific policy recommendations. Even if Bentham seems to give a definition of economics in terms of its subject matter, as we have already argued, it corresponds to a systematic application of the principle of utility. The enunciative sense of the utility principle informs all study because ‘‘Directly or indirectly, well-being, in some shape or another, or in several shapes, or all shapes taken together, is the object of every thought, and object of every action, on the part of every known being, who is, at the same time, a sensitive and thinking being’’ (Bentham 1952, p. 82). And as ‘‘The quantity or degree of wellbeing, experienced during any given length of time, is directly as the magnitude (that is, the intensity multiplied by the duration) of the sum of pleasures, and inversely as the magnitude of the sum of pains, experienced during that same length of time’’ (Bentham 1952, p. 83), everything can be reduced to a mathematical operation, or more precisely to the solution of an optimization problem, not only on individual but also on collective terms. This methodology aims at guaranteeing in the economic sphere, as in any other sphere of human action, the compatibility between the enunciative and the censorial sense of the principle of utility. In the economic sphere this compatibility means solving the problems arising from insufficient information or externalities. In fact, there are two visions of economics in Bentham. The first is in his noneconomical writings, where economics is presented as a quality of the actor, the ability to calculate and maximize. The second is in his economic writings, where economics is an art dealing with the material problems of his times. In detail, the object of the science of legislation is to guarantee security, subsistence, abundance, and equality. ‘‘To political economy apply the axioms and principles relating to subsistence and abundance’’ (Bentham 1952, p. 93).23 In both cases, the aim is the same: the greatest happiness. This aim, in economic matters, is reached, in most cases, by letting individuals act freely. However, this liberty of action, corresponding to being free to maximize self-interest, requires that individuals count with all the information necessary in order to avoid calculation errors. For Bentham, in economics as in any other sphere of human action, such an error is contrary to the greatest happiness, the sole legitimate aim of any act. This is why Bentham’s economic writings cannot be correctly understood without reference to the rest of his

23

‘‘The matter of wealth is at once the matter of subsistence and the matter of abundance: the sole difference is the quantity;—it is less in the case of subsistence—greater in the case of abundance’’ (Bentham 1952, p. 111).

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work and, in particular, to the notion of individual behavior that sustains the utility principle (see Leloup 2000, Sigot 2001). Therefore, Bentham can be thought of as extending the object of economics: it is no longer limited to certain aspects of human life dealing with wealth, reproduction, and market clearing; it can be thought of as a method, a way of analyzing any human action. If economics is thought of as a way of apprehending social phenomena on the basis of individual decisions that result from an optimization problem regarding pleasure and pain or, in more general terms, self-interest,24 then Bentham is the first to apply systematically this method to all aspects of human life. In Stark’s terms: Bentham’s economic writings in the narrower sense of the word are by no means the only contribution he made to economic thought. In fact, his main influence on later developments has been exercised through his non-economic works which contain a considerable number of statements and ideas on which later economists have built, especially those of the marginal utility school, whether they acknowledge their indebtedness to utilitarianism or not (Stark 1952–54, vol. III, p. 53).

We must not forget that at the time Bentham was writing on economics the economic text was Smith’s The Wealth of Nations. Ricardo’s Principles of Political Economy and Taxation did not appear until 1817. Bentham, using his all-encompassing principle, had formulated ideas that were not to become popular and accepted by the economics community until the so-called Marginal Revolution in the late nineteenth century. Bentham, for example, is a tenant of methodological individualism; he believes there is no such thing as a ‘‘body politic’’ and thinks everything starts with individual decisions (Bentham 1952, pp. 95–96). The interest of the community, affirms Bentham, corresponds to ‘‘the sum of the interests of the several members who compose it’’ (Bentham 1952, p. 102). In order to determine the tendency of this sum and whether it is conducive to happiness or unhappiness, Bentham proposes the axioms of mental pathology. Such an axiom is a: proposition expressive of the consequences in respect of pleasure or pain, or both, found by experience to result from certain sorts of occurrences, and in particular from such in which human agency bears a part: in other words, expressive of the connexion between such occurrences as are continually taking place, or liable to take place, and the pleasures and pains which are respectively the results of them (Bentham 1952, p. 103).

The knowledge of such axioms is the basis for the arithmetic necessary to lead the life of the community. The axioms of mental pathology allow establishing, for example, that ‘‘the value of a thing in the way of exchange arises out of, and depends altogether upon, and is proportioned to, its value in the way of use:—for no man would give anything that had value in the way of use in exchange for anything that had no such 24

Interest corresponds to ‘‘an unprejudiced and wide conception which includes everything in which man may conceivably be ‘interested’—everything to which a man’s ‘interest’ may conceivably be drawn’’ (Stark 1952–54, vol. III, p. 54). ‘‘A man is said to have an interest in any subject, in so far as that subject is considered as more or less likely to be to him a source of pleasure or exemption [from pain]’’ (Bentham 1954, p. 424). Interest is central in Bentham’s analysis for it is the ‘‘sole efficient cause’’ of action (Bentham 1954, p. 424).

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value’’ (Bentham 1952, p. 108). Notice that Bentham excludes the difference between value in use and value in exchange, that is, the difference between the price and the value of an object. At least this quote shows Bentham was far from the predominating labor theory of value.25 This appears as an answer to Stigler’s previously mentioned assertion, according to which Bentham has no theory of relative prices based on utility and therefore cannot be considered as an economist. What brings Bentham even closer to contemporary economics and has been sufficiently remarked in Benthamite scholarship is his analysis in terms of decreasing marginal utility: the quantity of happiness will not go on increasing in anything near the same proportion as the quantity of wealth . . . The effect of wealth in the production of happiness goes on diminishing, as the quantity by which the wealth of one man exceeds that of another goes on increasing; in other words, the quantity of happiness produced by a particle of wealth (each particle being of the same magnitude) will be less and less at every particle (Bentham 1952, p. 113).

This analysis sustains Bentham’s claims for redistribution policies tending to relative equality among individuals. Certainly, as has also been noted in the literature, there is a permanent tension between security and equality in Bentham’s writings because redistribution measures can counter the expectation of enjoyment of property. Hence, Bentham believes the best distribution is that where ‘‘while the fortune of the richest—of him whose situation as at the top of the scale, is greatest, the degrees between the fortune of the least rich and that of the most rich are most numerous—in other words, the gradation most regular and insensible’’ (Bentham 1952, p. 116). The point is the axioms of mental pathology allow Bentham to affirm that the analysis of human actions in general, and the field of morals in particular, can be formalized to gain in clarity and precision (Bentham 1952, p. 118). In fact, calculus has always been part of the language of passions: As a rule, these estimates [of the value of pleasures and pains] remain inarticulate: they do not mature into definite figures. There is no need of figures, because in practice the calculus of pleasure and pain is essentially a guide to action, and action can be taken as soon as it is clear which value is greater, without exact comparison of the magnitude involved (Stark 1952–54, vol. III, p. 57).

It is in order to produce an accurate science of legislation that Bentham tries to perfect these calculations, inherent to human behavior, and which already have an expression in prices. This is why the introduction of measures in this field can be accomplished through the use of money: ‘‘Money is the instrument of measuring the quantity of pain or pleasure’’ (Bentham 1952, p. 117). Money has the advantage of keeping pace with the axioms of mental pathology, as it has a decreasing marginal 25

Sigot (2001) considers that Bentham does not really break completely with a labor theory of value and shows several instances where the English author recognizes the importance of the production sphere in the determination of value. No doubt, the fact that the text from which this quote is extracted, ‘‘The Philosophy of Economic Science,’’ is an anthology by Stark emphasizes the modern aspects of Bentham’s economic thought, just as the editor wanted to. Stark, for example, quotes Bentham on Ricardo asserting ‘‘He confounded cost and value’’ (Stark 1952–54, vol. III, p. 48).

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utility and is a subjective measure depending on the wealth each individual possesses. Even though Bentham is well aware of the limits of such an instrument, he believes it must be used if any progress is to be made in politics and morals. The possibility of applying economic calculus, pleasure-pain calculus, or, more generally, benefit-cost calculus, to explain all human behavior and therefore social phenomena leads to the definition of economics as a method rather than as field of study. Economics corresponds then to an attitude of the human mind, to a natural disposition towards calculation (for example, ‘‘all passions calculate’’). Therefore, economics becomes the social science, it becomes a social philosophy explaining all social phenomena, political, cultural, sociological, and even moral. A major implication of this definition of economics is, as Dierdre McCloskey (1998) calls it, its ethical nihilism. McCloskey (1998, p. 305) traces this ethical nihilism ‘‘to Bentham, viewed as a hero by recent ethical nihilists such as George Stigler, Gary Becker or Judge Richard Posner.’’ When every motive of action is reduced to maximizing pleasure and minimizing pain, then the criteria of right and wrong, of good or bad, is reduced to a correct calculus of utility. Morals become a technical problem and moral fault becomes a miscalculation. Thus, through Bentham and Becker, economics as a method, rather than becoming independent from morals, absorbs it. All virtues are reduced to the ability to calculate (which McCloskey (1998, p. 314) identifies with Prudence). This is possible because of the conception of human action underlying the theories of Bentham and Becker. Bentham’s anthropological conception can be seen then as the foundation of the rational economic agent. In this sense, Bentham appears as an important ancestor of the economic approach. Guidi (1997, p. 3) remarks that ‘‘Bentham’s methodology of analysis—based on the deliberations of ‘calculative’ individuals who maximize their ‘profit’ under constraints—makes of his ‘economic approach to politics’ more than an anticipation of the modern economic analysis of (private and public) institutions’’ and, we would add, of all social phenomena.

V. KEEPING THE DISTANCES In spite of the points that we have shown are common to both authors, important differences remain. The first and most obvious is the goal each author proposes: Bentham aims at social reform, whereas Becker seeks to explain social phenomena. Bentham did all he could to implement his projects (for example, the panopticon prison or the chresthomatic school) and constantly wrote to politicians even if they had not asked for his advice. Becker ‘‘has not played any significant role in the policy arena, either as an advisor to political candidates or in a position in government’’ (Fuchs 1994, p. 191). Bentham’s study was intended to show that in order to reach the greatest happiness it was necessary to influence human conduct: ‘‘And as the only means by which any individual can be engaged to operate toward it [the greatest happiness], the happiness of that same individual: viz. either by indicating or creating an interest operating upon him as a motive and engaging him to operate towards that end’’ (Bentham 1817, p. 60). Becker does not explicitly advocate any such end. In his treatment of crime or discrimination he advances policy recommendations (for example, augmenting fines rather than imprisonment periods) but he does not see

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them as a means towards greatest happiness. Becker’s justification reads in terms of economic efficiency26; crime should be controlled because it produces diseconomies (Becker 1968, p. 173). The difference, as noted by Becker himself, is that Bentham was more concerned with what individuals ought to do rather than with what they actually do: ‘‘he [Bentham] was first and foremost a reformer—and did not develop a theory of actual human behavior with many testable implications’’ (Becker 1976, p. 9).27 Guidi remarks that Bentham’s utilitarian approach ‘‘examines the whole field of legislation in the light of an ethical standard, whereas [economic analysis] rejects valuational implications’’ (2000, p. 5). This, as noted earlier in this section, may be contested on the basis of the consequences of introducing the enunciative sense of the utility principle within the economic approach. There is, however, one point on which both analyses agree concerning applied economics (as a social philosophy): a system of punishments and rewards is the most effective way of influencing individual behavior. Therefore, understanding human behavior is the first step towards effective policy-making regardless of the final end. In this sense and in Benthamite terms, Becker applies the enunciative sense of the principle of utility and considers its consequences in terms of social phenomena. Even if, according to Becker, Bentham ‘‘did not maintain the assumption of stable preferences,’’ he did believe that only through application of the principle of utility was it possible to understand society. A second difference seems to be more problematic and deserves further study. As has been shown, the relationship between utility theory and hedonistic psychology is not straightforward. Many economists since Alfred Marshall have argued economic theory has nothing to do with such a psychology or with utilitarianism at large: To be a utility maximizer is merely to choose the available option one most prefers (or, in the case of ties, to choose one among the set of maximally preferred options). Although the utility language was inherited from the utilitarians, some of whom thought of utility as a sensation with a certain intensity, duration, purity or propinquity (Jeremy Bentham 1789, chapter 4) there is no such implication in contemporary theory. To speak of individuals as aiming to maximize utility or as seeking more utility may suggest misleadingly that utility is an object of choice, some ultimately good thing that people want in addition to healthy children or better television. But the theory of rational choice specifies no distinctive aims. This fact is of considerable importance to moral theory, for utility theory as such is detached from any hedonistic psychology (Hausman and McPherson 1993, p. 680).

However, we have tried to argue that, at least, in the sense that the economic approach understands utility it can be closely related to the hedonistic psychology underlying Bentham’s utilitarianism. This would lead to a further analysis of the theoretical and epistemological implications of reintroducing a moral philosophy within economic analysis. 26

‘‘The main contribution of this essay, as I see it, is to demonstrate that optimal policies to combat illegal behavior are part of an optimal allocation of resources’’ (Becker 1968, p. 209). 27 Stigler (1972, p. 114) believes Bentham’s intellectual tragedy was precisely limiting his analysis of utility to the role of utility as a moral guide.

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VI. CONCLUSIONS Bentham defines individuals as beings capable of feeling pleasures and pains, whose behavior is governed by self-interest, egoistic and sympathetic passions. Furthermore, the individual calculates precisely because he/she is governed by passions. This calculating individual is the foundation of a pragmatic philosophy that makes every aspect of human life a technical problem. To the extent that this view can be considered as the foundation of the economic approach to behavior, Becker can be seen as the modern representative of this pragmatic philosophy. Bentham thus gives a philosophical justification to the economic approach to behavior. Through the enunciative sense of the principle of utility, Bentham gives a new foundation to all human behavior: calculus and utility maximization. We have argued that this attitude of the mind to calculate gives a particular definition of economics; this definition then leads to the claim that Bentham’s pragmatic philosophy absorbs all the spheres of human action thus legitimizing the economic approach to behavior not on technical but on philosophical grounds. Bentham’s application of the principle of utility to all fields of study shows the power of a method as the unifying principle of all social science. Contemporary economics shares this feature: it is not so much its subject matter as its adhesion to a technique and a certain approach that marks its unity as a science (Colander 2000; Fine 2002, p. 198). This unity of method can be traced to a single way of conceiving individual behavior. With the application of the utility principle in the analysis of economic matters Bentham introduces his own notion of the individual based on what has come to be known as rational behavior. This means a profound transformation of economics itself. Bentham analyzes the traditional topics of economics (production, distribution, and consumption) using a choice theory based on individual calculations. The individual faces exactly the same problem in any of the spheres of human action, in his/her market and non-market activities. Passions calculate, says Bentham, and they always do no matter where the individual finds him/herself; calculating is part of human nature. Hence, the limits between spheres of action vanish, just as do the frontiers between social sciences. The study of social phenomena implies the study of individual behavior in general, and of choice as the result of a calculation in particular. The building block is thus a principle of human behavior: self-regarding interest is predominant and has place everywhere (Bentham 1954, p. 421). This implies, according to Bentham, that all actions are intended to produce the greatest happiness to the agent (Bentham 1954, p. 421). Once again we find this (that is, the enunciative sense of the principle of utility) is an axiom or a common truth (Bentham 1954, p. 432) for which no proof is needed. Bentham asserts the existence of the species is proof enough (Bentham 1954, p. 421). Therefore, an economic system, as well as its study, has to be constructed on the basis of personal interest (Bentham 1954, p. 433). No doubt Bentham and Becker do not derive the same conclusions from their analyses. The former, for example, was favorable to measures of public employment through public works in periods of mass unemployment of poor manufacturers. He was also much more concerned with the pragmatic aspects of his study and thought

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science was only useful as a guide to action. As Stark (1952–54, vol. I, p. 16) puts it, for Bentham, ‘‘‘science’ means ‘power’—power to do good.’’28 Bentham explicitly acknowledged political economy was part of politics, which was itself a subdivision of ethics or of ‘‘what is proper to be done.’’ Its study, as any other, should be guided by the utility principle: ‘‘If all knowledge is, in the last analysis, part and parcel of the pursuit of happiness, the starting point of any science will have to be the potential utility of the objects or actions which it sets out to investigate’’ (Stark 1952–54, vol. I, p. 19). Here, however, the distance with Becker starts to fade; there is an avowed purpose of uniting all social sciences under a single method because their object is the same: the pursuit of happiness. The way to do it is to start from what Bentham considers a self-evident truth: the enunciative sense of the utility principle. Exploring the proximities between Bentham’s utilitarianism and Becker’s economic approach allows not only a search for the philosophical foundations of the latter but also for recovering the former as generalized economic theory capable of explaining all human behavior. Henry Sidgwick (1877, p. 631) considers Bentham’s most important merit as having excluded all other criteria and all other aims apart from the utility principle and having used it in a methodical and exhaustive manner in all practical domains. All practical domains included ethics and, therefore, all social sciences. This led Bentham to believe that all spheres of human action are amenable to mathematical treatment because they expressed accurately everyone’s capacity to calculate. He did not count with the mathematical developments necessary to accomplish his goal, and therefore his felicific calculus remained in what he himself recognized to be a rudimentary stage. Economics has long overcome this caveat precisely because ‘‘The goal of economics is to unify thought and to provide a language that can be used to understand a variety of social phenomena’’ (Lazear 2000, p. 142).

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‘‘Philosophy is never more worthily occupied than when affording her assistances to the economy of common life . . . It is vain and false philosophy which conceives its dignity debased by use’’ (Bentham 1954, p. 81).

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