Traditionally, the basis of utilitarianism is to do what will result in the greatest good for the most amount of people. However, in the article I read; Analyzing Insider Trading from the Perspectives of Utilitarian Ethics and Rights Theory written by Robert McGee, McGee described that as a bit of an outdated perspective. He instead gave a description of what he sees as the “modern utilitarian position”, where in order for something to be considered ethical, the gains would simply need to exceed the losses. He uses both of these definitions of utilitarianism to weigh the ethical correctness of insider trading and to address the common arguments against such practices from a utilitarian standpoint.
The most obvious strength of this approach is that it serves to benefit the most amount of people. In his article, McGee emphasizes that efficiency is not a substitute for ethics, which I see as paralleling utilitarianism and is another aspect that makes it such a rational approach. This ensures that even though there may be a way to do something better/faster, if it doesn’t result in a positive outcome for the most amount of people, it isn’t the right thing to do. Using the example given in the article, although insider trading may increase efficiency for a single company, the hit that competing companies would most likely take as a result would eliminate any benefit to the larger population. The strengths of such an approach are ideal, seeing as regardless of all else, they would help the most people. And from the standpoint of a young adult who has grown up in a middle income family in a democratic country, it only seems reasonable that in most situations, making the decision that will have a positive result for the majority of people, would be the best decision to make.
Though unfortunately, it’s not that straightforward. Beyond the simple, appealing definition of utilitarianism, we have to consider other factors. For example, how exactly do we measure what the “greatest good” is, this term is far too relative to serve as a proper way to gauge ethics. As individuals we each value things differently, certainly there are things that I hold in higher esteem than my neighbor, and vice versa. Another factor that needs to be considered is time. How will time affect this decision? Though it may be ethical now, will it withstand the short run? The long run? In the article mentioned earlier, an example of diminishing demand is given. Using the utilitarian approach you can make what is considered to be an ethical decision, but as time goes on, it slowly becomes less and less beneficial to the majority of people. Another problem I have with utilitarianism is that, there is the possibility that the burden faced by the minority is greater than the benefit that the majority experiences, but because there are less people who are forced to endure the costs, the majority is okay with it. An example of this would be during World War II, when we made use of internment camps to keep our country safe.
On the surface, utilitarianism seems like the most ethical way to make decisions, but there are far too many complexities to have this be a model for all decisions that need to be made. There are just too many special circumstances that require more than the greatest good for the greatest amount of people to be considered. However, with that being said, there are also times when this is the ideal way in which to approach decision making. These times are when costs and values are universal and not open to interpretation, and when there is little to no chance of variation.