Introduction

Utilitarianism has had a great influence on economic theory. It not only changed the direction of economics theory it also developed a new moral philosophy. Economics was separated from its earlier avatar of political economy. This led to two new tendencies in economics: (a) economists were prompted to pay attention to individual choices and behavior; and (b) their attention was drawn towards the inadequacies of objective measures of welfare. Utilitarians raised the following fundamental issues of economics:

• What is utility?

• How can utility be measured?

• Is there a distinction between use value and exchange value?

• What is the relationship between total utility and exchange value?

• How do individuals exchange different things having different utilities?

• How does one distinguish between individual utility and group utility?

• What are inadequacies of objective measures of welfare?

• How do the precepts of utilitarianism impact the further developments in economic theory?