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MichaelBishop comments on Less wrong economic policy - Less Wrong
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Taken to its extreme, imagine that someone made all your decisions for you. You would seem to have a higher utility, but you would have no free will. You would be more like a character in a book than a living person.
I think that maybe there's some way in which the amount of aliveness you have is a function of the amount of free will you have, and that your "super-utility" is utility * aliveness. So a life with less freedom could have higher utility, yet be less valuable.
Is there a reason you can't just redefine utility to capture the value of freedom?
Amartya Sen has written extensively about how to do just this, though he wouldn't call it utility either (it's one of the cornerstones of the capability approach). He formalizes it in terms of the real option sets available to an individual rather than "free will" though. The main difficulty is how to quantify and value different option sets. (You can't just look at the size of the sets, because different options are likely to be differentially valuable qua options, and you need to incorporate that somehow.)
Many (even most?) people do have freedom as part of their utility function, but at different weights, so redefinition is unnecessary if you grant a moral imperative to increase the utility of others.
The problem is that most people interpret such an imperative as "increase the utility others would have if they shared my own utility function", which is not at all correct. Simply redefining utility in the general case to include freedom is in this class of mistakes.