Note: I didn't write this essay, nor do I own the blog where it came from. The essay text is displayed below this line.
Economists and other social theorists often take the concept of utility for granted.
In theory, utility is a measure of value. I will denote the utility of X to Y as U(X, Y) or simply U(X) if Y is clear in the context. For a single individual, we can think of utility as a mathematical function that maps objects or outcomes to points on the continuum. This mapping is called a “utility function”. (In this context, “function” has its mathematical meaning, not its ordinary meaning.)
To think about society, we might want to define utility for a group, not just a single individual. Collective utility is typically defined as the sum of individual utility over the collective. This assumes that utility is defined on the same scale for everyone.
The concept of utility is used to model individual and social decision-making. It is used in game theory to define benefits and costs. It is often used in moral philosophy to define the “goodness” of actions and outcomes. In a utilitarian moral theory, collective utility is the measure of goodness, and we have a moral obligation to act in ways that increase it. In economics, it is often assumed that prices measure the utility of goods and services. GDP is often viewed as a measure of collective utility for a society.
The concept of utility is based on an underlying metaphor: thinking of value as a substance. A substance can be quantified, measured, compared, summed over a collection, exchanged, produced, consumed, etc. Metaphorically, we think of U(X, Y) as defining a quantity of a substance that is present in X. We say “How much value does X have?”, as if value is a substance contained in X. We talk about how much value a company produces, or an entire economy produces, as if value is a substance that we produce and consume.
Does this metaphor make sense? Is value like a substance?
In this essay, I will argue that the concept of utility is a convenient fiction.
Utility can be defined in different ways:
- Reproductive utility: U(X, Y) is how much X contributes to the reproductive fitness of Y.
- Desiric utility: U(X, Y) is how much Y psychologically values X.
- Hedonic utility: U(X, Y) is the net effect of X on Y’s experiences of pleasure and pain.
- Energetic utility: U(X, Y) is the amount of work that Y would do for X.
- Monetary utility: U(X, Y) is the amount of money that Y would pay for X.
Let’s consider each of these definitions.
(see the rest of the post in the link)
This seems to be a relatively balanced article which discusses serveral concepts of utility with a focus on their problems, while acknowledging some of their use cases. I don't think the downvotes are justified.
Hedonic and desire theories are perfectly standard, we had plenty of people talking about them here, including myself. Jeffrey's utility theory is explicitly meant to model (beliefs and) desires. Both are also often discussed in ethics, including over at the EA Forum. Daniel Kahneman has written about hedonic utility. To equate money with utility is a common simplification in many economic contexts, where expected utility is actually calculated, e.g. when talking about bets and gambles. Even though it isn't held to be perfectly accurate. I didn't encounter... (read more)