"Efficiency" is one of the main buzzwords of our time, constantly invoked to explain why some seemingly horrible thing is nonetheless inevitable. Sometimes people who appeal to "efficiency" as a conversation stopping end-all and be-all like to throw in the word "utilitarian." Like: "Well, from a utilitarian perspective, it would be better to schedule worker shifts at the last minute. By cutting costs, it would be more efficient."
As a moral philosopher, I find such usage a perversion of otherwise perfectly serviceable concepts. Because it's one thing to want to maximize good consequences and minimize bad ones. But assuming that good always and only equals $$? That's a whole 'nother ball of wax entirely. In fact, "economic" utilitarianism often leads to the opposite conclusions from ethical utilitarianism.
In moral philosophy, the utilitarian point of view is the one in which the right action is the most "efficient" one, where this means the one that maximizes well-being overall, for all concerned. At least since Bentham and Mill in the nineteenth-century, utilitarians have been engaging in debate over what, exactly, should be measured. What is "utility"? Is it happiness? Pleasure? Preference-satisfaction? Something else?
In a lot of contexts, though, those fine-grained matters don't make much difference. All versions of ethical utilitarianism lead to certain kinds of conclusions.
For example, in all versions: if some resources could make person A much, much better off, and person B a bit better off, then they go to person A. If person C could prevent something horrible from happening to person D without much sacrifice, they are ethically obligated to do it. And because money and goods bring about less dramatic increases in well-being for rich people than for poor ones, there are egalitarian implications: if person E is rich and person F is poor, ethical utilitarianism requires any large-scale systems to be set up so that F gets more than E.
These conclusions are, of course, nothing like the ones people are usually talking about when they are talking about economic utilitarianism and the pursuit of economic efficiency. There, it's generally a conversation about cost-cutting and profit-maximization -- activities that must be undertaken even when they are going to make lots of people worse off than they were before.
In a big picture example, when economic growth goes along with increased economic inequality, economic efficiency goes up even as ethical efficiency -- that is, actual overall well-being -- goes down. If economic gains go to the already well-off, then from the point of view of economic utilitarianism, this is a win. But from the point of view of ethical utilitarianism, it's often a big fail: large numbers of people at the bottom can no longer afford items like housing, health care, and education.
For a more specific kind of example, consider the health care debacle described in this article. Doctors are trying to negotiate with health care managers about how their system will work, and naturally enough, the doctors want to prioritize their ability to function well in their jobs. They objected to a system that would have "effectively eliminated any time off for sick days or vacation."
The managers responded by saying that when doctors got sick they could arrange for extra shifts to ensure they'd get their full salary. The doctors tried to explain: this isn't about money. We want to work less and make less, to avoid burn out; money is not the issue. But evidently they failed to get through, with managers insisting that "money was always the issue."
If you said the managers were aiming for efficiency, taking a utilitarian point of view, then in the money sense you'd be right, but in the deeper sense, of successfully bringing about the things you want to bring about, you'd be wrong. The aims of a health care institution include good care for patients, which in turn requires rested physicians. Actually taking a utilitarian point of view would mean asking how to get those outcomes at the least overall cost, and would require counting many things other than money.
This makes our modern typical practice, of using economic utilitarianism instead of actual ethical utilitarianism to measure things, seem bizarre. If economic efficiency requires action X and actually bringing about the best overall effects requires action Y, why would you do X? Isn't the point of money just ... that you can use it to do useful things?
In response to this question it's sometimes suggested that as long as there's enough economic growth, the winners could just compensate the losers for their loss of well-being, and everyone would, again, be better off. This is the basic idea behind the economic concept of "Kaldor-Hicks" efficiency.
To which the first obvious question is: do you ever seen this happen? My sense is that the economic efficiency winners just treat the gains as their own, no matter how they got them.
A less obvious but crucial question also has to do with whether just anything can be exchanged for money. In the case of the doctors, the answer is no. They wanted their jobs, they just wanted more time off and less pay. When they fail to get this, there is no way to compensate them for their loss of time off with more pay. To think there is just misses the whole point.
Of course, in a capitalist society, the pursuit of economic efficiency at all costs can be necessary for survival in a dog-eat-dog world: if a company makes less than a competitor, it may fail altogether.
This is certainly true, but it shows economic efficiency less in the light of "common sense virtue," and more in the light of "another awful thing about modern life that we've somehow managed to make necessary to existence."