The fallacy of poverty and the utilitarian justification of freedom


Leandro Castelluccio

(Image obtained fromlink)

A common example of thinking about the political intentions of people and their relationship with socio-economic and political systems involves situations where we evaluate the fairness or unfairness of the consequences of a system for some or others.

Let’s think of a person driving an expensive car of his property going to his work where on the corner there is a person living on the street. Many will think how a system can be really just if it allows some to have such luxuries while others suffer great material poverty. And here comes into play a key issue about the justification of political-socio-economic systems, and is perhaps the center of the vast majority of ideological and political debates today, as it has been for a long time.

Many think that while people can rise to the highest possible states of personal well-being, both in its material form and in other dimensions, a system that allows that is justifiable for that reason, regardless of whether there are poor people or not. In the United States’ bill of rights there is the right to the “pursuit of happiness”, not to happiness itself, so one can look for a way to be happy, but the system does not guarantee happiness, only the possibility to be able to obtain it. The philosophy in this bill of rights seems to have a strong individualistic orientation, defending life and individual freedom as central axes. On the contrary, others think that a system does not have real value if it leaves aside most of the people while a few receive all the benefits, or that some manage to have wealth while others are relegated to poverty.

We could say that on the one hand we have an individualistic justification of a system and on the other a collectivist or utilitarian justification. The second emphasizes greater well-being for as many as possible, and its advocates often emphasize ensuring welfare for the least advantaged. And it makes sense from a humanitarian point of view, then if adopt a particular political-socio-economic system, what better justification that this is beneficial especially for the most needy. This is a point where, in general, the individualist philosophies lose, because the latter focus on individual interest and establish that a capitalist system, for example, is justified to the extent that it is beneficial for the individual as such, regardless of whether in that system certain people are immersed in poverty, because the justification would not be happiness itself, but the possibility of the individual to reach it (any individual), although in practice some arrive and others do not. Thus, in material terms, the fact that there may be a person with a an expensive car is a sufficient justification, regardless of whether other subjects do not reach that point, or end up in poverty. Many pro-capitalist thinkers, like Ayn Rand, argue in this sense that capitalism does not have a utilitarian or collectivist justification, that the system is not such to achieve the greatest welfare for the greatest number, but that capitalism is justified based on the interest of the individual, not a collective.

 The utilitarian and collectivist philosophies say that this is not right, that in reality it is not worthwhile for a person to reach that point while others end up in poverty, instead the fundamental role of any political-socio-economic system is to combat poverty, and achieve general well-being, working according to the neediest. While it is true that many defenders of capitalism have adopted a social or utilitarian justification of the system rather than an individualist one, in the general opinion, defenders of capitalism are judged as selfish or individualistic who advocate individual interest, defending the freedom of people against positions that argue to limit certain freedoms and regulate the economy in terms of helping the needy. This is perhaps because many libertarians talk about letting people be free and that is the most important thing, while they receive arguments about what happens with the social problems of inequality and poverty. While the defenders of capitalism advocate that free market solves these problems, and that the individual is free to reach the well-being he or she considers as high as possible, the defenders of economic regulation by the State argue that this is not possible on its own, and that certain rights and material well-being must be ensured in people, and protect those most in need. Given that we are gregarious beings and care about the welfare of others, it is not difficult to see how a position that emphasizes the individual, leaving aside the issue of poverty or collective well-being, even if this is not the intention, lose in the cultural debate before socialist or humanitarian philosophies that emphasize the fight against poverty.

Despite the above, the issue is not something of a black and white, because there are problems in the two spectrums of the usual thinking about the justification of the political system, both within collectivism and utilitarianism and individualism. Mainly within utilitarianism we find the problem or dilemma of the sacrifice or the use of a small group of people or minority in favor of the majority, so that within a utilitarian philosophy it would be feasible to sacrifice a few for the benefit of many. This dilemma has had many approaches in philosophy, and many attempts to overcome it, but regardless of this the question is whether it is preferable a system where some suffer so that others are benefited, or instead a system where everyone wins in one way or another. On the other hand, collectivism is a philosophy based on an abstraction, the collective as a concrete entity does not exist, it is only such in the minds of people, in order to justify a system based on collective welfare (which includes the most needy) is to justify it based on an abstraction that does not exist, only individuals can experience well-being or benefit, a collective does not feel, think or experience well-being, and therefore can not benefit from any system. And here the great problem of the collectivist or socialist political currents, which is linked to the previous problem of utilitarianism, when talking about doing things in favor of the collective or society, everything is reduced to a question of majorities, welfare for the largest number, or the majority group that is considered the right one and the one that should receive the benefits of the system, be the most needy, the proletarians, the workers, the poor, etc., so that again you can see how it is correct or justifiable that some are sacrificed for the welfare of that group, or that a few must work for the benefit of that majority or the group that has been favored.

While for socialism it would not be wrong for a group of people to be the means to satisfy the goals of a majority, that their interests be sacrificed while this majority is the proletariat, the libertarian individualist philosophies propose that no group be sacrificed for another, be it a minority in favor of a majority or a majority in favor of a minority, so that neither works in favor of the other leaving aside their own interests, but simply watch after the individual interest, regardless of which group the individual is said to belong. The question then is to ensure the individual as the basic unit of society, the only thing that has tangible existence, that which is real, since the group is the abstraction. The problem is that the individual is also usually treated as an abstraction, leaving aside the general tangible aspects to all individuals. There are therefore rich, poor, skilled and not so much intelligent, creative and also malicious individuals. How can a system be good for the individual having so many different types of them? The question is in the common things that lie within every individual, and that is the possibility of developing a certain potential.

In my work “Propositions” (in Spanish version – see menu of book publications), I speak of the high reward states as the maximum criterion and the possibility of them as the basis of the political system. As I indicated in this work, reward is a limit criterion of actions, but there are things that lead to different states of reward, some high reward states and others low, the highest reward states become the maximum and best criterion of human actions (superior to other types of short-term reward or exclusive of a particular human dimension, such as material well-being considered in isolation), and are central to assessing the resolution of interpersonal conflicts, and to shape the political system of a society.

In the presence of conflicts, denying the possibility of the highest possible reward states of a person is something unjust and wrong, and similar to the sacrifice of a utilitarian type when it is said to be done to fight poverty, or for any social reason, but what is more, as I indicated in my developments regarding these ethical issues, not only are those reward states denied to the person with whom the conflict is established, but neither does the person who establishes such conflict assures those states for himself (be it a politician, or another coercive agent), nor does the person who supposedly receives the aid in a coercive way, since the cultivation of high reward states requires exercising individual capacities with relationships of independence and voluntary cooperation. The results of denyingthe possibility of such states affect everyone in a negative way, including poor people. A society where people are free to pursue their goals without coercion, working voluntarily with others, where they are allowed the possibility of high reward states, without having to render accounts to others (outside of coercive acts), each one taking responsibility by its acts, is always a society more respectful with people and desirable to achieve personal happiness. The eradication of poverty within a system of freedom where the possibility of high reward states is protected is always preferable to trying to eradicate it outside the system, since under the former we are in tune with greater states of reward for people. And reality shows that attacking the possibility of rewarding states with the justification of fighting against poverty ends up damaging the possibility of reward for everyone, including the poor.

Well, we can go back to the previous problem, if a system allows the possibility of people of cultivating high reward states, but there are still poor people, is the system worth it? Well, what happens when there are no longer poor? What is left then to peruse? Are people not looking for anything else? But also, combating poverty is not something independent or separate from the cultivation of high reward states, it is not that we must first eradicate one thing and then look for the other, both can be carried out simultaneously, but equally important, it is necessary to cultivate high reward states to eradicate poverty. And beyond this, the highest criterion remains the high reward states, since this would be what is intended to be cultivated, in poverty or outside it, if there is no poverty there is still the cultivation of reward, so that the eradication of poverty is not the maximum or primordial criterion of the political system in terms of developing our potential as human beings, but having the ultimate goal of high reward states, these have a higher degree as a criterion than the eradication of poverty, but we must understand that they are not separate or scalable, it is not that we must eliminate poverty and then cultivate reward, the cultivation of high reward states is the way to eradicate poverty, so the possibility of that is crucial, that is, freedom and eradication of poverty go hand in hand.

If a political system allows freedom, both cultural-political and economic freedom, and we ask again, what is the value of it if there are free people but there are poor, we must understand what this question implies. If there is freedom and there are poor people, if we have people with expensive cars but there are poor people in the street corner, the usual collectivist reasoning unites both things as cause and effect, since what attitude or opinion prevails: to reduce or limit freedom to fight poverty. So it is argued that if there is poverty in a system of freedom then it is not worth it and freedom must be limited in order to fight poverty. This is a mistake, and it is the fallacy of poverty and its relation to freedom, because the socialist solution has always been to control and regulate economic activity with the belief that this fights poverty. But this has the opposite effect. The more we control the economy, the lower the prosperity and the greater the amount of poverty, and there seems to be no equilibrium, in the sense that with a certain degree of freedom we are better off than with a greater degree of freedom (as long as we respect the rights of the individuals). Economic freedom and prosperity go hand in hand, centuries of history show this, the current free nations show it, where there is political, cultural and economic freedom, there is greater material prosperity. There is for any subject that we randomly choose within society. So if we were to take a materially poor person and make the person live in a certain society, those freer nations would be the best to improve the quality of life of that person.

The poorest people in the freest societies are better than the poorest in the least free. Understanding this point is crucial. The basis is that any attempt to combat poverty requires a base of material resources (in addition to other cultural elements), but this requires intellectual capacity, creativity, and the use of skills by people, so that they generate wealth, and for this people must be free to cultivate these aspects and the less coercive interferences are presented more easy it is to develop these potentialities. How can material help be provided if the people capable of producing are not free to do so? They can have freedom, but in a limited way, which generates lower productivity and capacity to generate wealth, with the consequent lower possibility of having greater wealth to fight poverty. The security that entails investing in safe environments where the possibility of using spaces and objects for one’s purposes is respected (individual property) generates a fertile space to prosper economically (people will prefer to invest in safe environments of greater economic freedom and less regulation than in more regulated environments).


(Figure taken from:

Nor are we solving the problem of poverty if poor people become dependent (that is why the question goes beyond material aid). Freedom is something fundamental that makes the system where the highest reward states are possible, and in the reality in which we live, given our nature, this implies independence and voluntary communion among human beings, fostering the cultivation of self-esteem and high reward states in general based on this. Anyone can cultivate it, rich or poor. It is the promotion of the cultivation of self-esteem and high reward states, which is the maximum possible ethical basis of our behavior as I affirmed in my work “Propositions”, which could and should be encouraged just to reach the maximum possible, where poverty can really be eradicated. It is within this system where we obtain the best possible results, but where the goal is not to eliminate poverty itself, as exemplified in the argument raised above, since both are not separable as criterion, the reward and poverty, and where even there being no poverty or having it, the possibility of high reward states is what prevails or remains as a criterion.

This is the fallacy of poverty and the utilitarian justification of freedom. Reward is experienced by individuals, not by society; freedom is the best way to fight poverty; Freedom is justified in one’s possibility of cultivating high reward states, as much as possible for the individual.

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