In an early article, Robert Murphy objects to the adequacy of utilitarianism:
The fundamental problem with utilitarianism is this: Despite a succession of ingenious proponents, its advocates have yet to explain why the individual should behave morally. The fact that we are all better off if we all behave morally is utterly true and utterly irrelevant. (Such an argument violates the cherished Austrian precepts of marginalism and individualism.)
The truly difficult moral issues resemble the familiar Prisoner's Dilemma; regardless of everyone else's behavior, the individual does better by exploiting others.
It is true that a society suffering from widespread theft would be intolerable, even from a thief's point of view, but any individual robbery has very little impact on the overall level of crime.
The focus of utilitarianism is social. A pure utilitarian has little to say to any individual on why he should not be a thief. But he does recommend a social policy of catching and punishing thieves. (According to pure utilitarianism, then, one would not want exploit others, because he risks being caught and fined or imprisoned.) The utilitarian idea is to structure the incentives of the legal system to minimize the total amount of violence people (including the state) inflict on one another. Utilitarianism counsels rewarding and encouraging good deeds and discouraging behavior that harms social cooperation. And that's it! It thus addresses itself to society and its agent, the state.
Murphy goes on:
Moreover, if everyone agreed with Yeager and other utilitarians that it were foolish to sacrifice oneself in these rare instances, an element of doubt would arise in all social interactions.
Although pangs of conscience might be a wonderful evolutionary byproduct, it would be in the interest of everyone to steel himself against such "irrational" feelings (while still behaving in accordance with them under normal circumstances).
One's very life might one day depend on it.
Here there is a truth-digging game going on between society and individuals. Individual soldiers will want to hide their cowardice and merely pretend to be willing to sacrifice their lives for the cause (thereby getting paid for doing no work), while society has an incentive to detect their cheating and punish them for it or at least refuse to hire them. Utilitarianism thus addresses itself not to the soldier contemplating whether to sacrifice himself for the greater good, but to the general choosing the soldiers who, in his estimation, are most likely to follow orders even unto death.
It does not say to the soldier: "Sacrifice yourself." Rather, it says to the general: "Pick self-sacrificing soldiers." And it is an empirically true statement that people do not always behave selfishly, carefully hiding their egoism until the time comes when they are put to the test, and then to everyone's consternation they up and do their own thing. Sometimes society wins; other times individuals win (perhaps unjustly and wickedly) at the expense of society.
A soldier may indeed be directed to sacrifice himself but not by utilitarianism but by the contract he must have signed with the military before going off to war. He is duty-bound to act as his contract stipulates, including sacrifice himself in certain situations.
Utilitarianism seems to rob the words good and bad of their specifically ethical character. The utilitarian cannot make a distinction between guilt and simple error. The person who robs a bank to achieve happiness has made a mistake in qualitatively the same sense as a person who overcooks a steak.
Once again, we don't care about whether the robber acted virtuously or not. All that pure utilitarianism commands is that the police try to deter and minimize bank robberies as much as possible consistent with other goals. The rule according to which robberies go unpunished results in an unhappy society, despite the benefits to the robbers.
Even individual robbers have an interest in society being tough on crimes. Weak-willed robbers will be deterred and steered into productive occupations, both benefiting society and perhaps saving their souls. Especially competent robbers will still get away with their crimes but will enjoy diminished competition and a productive society, so they can actually spend their ill-gotten money. The losers of a regime that efficiently prosecutes robbers will be the stupid criminals who are neither deterred by the law nor evade detection and capture. But their misery is a utilitarian price we pay for a happy society overall.
Now it is true that utilitarianism ignores the obvious point that the robber commits an injustice. This is not a failure of this ethical theory but merely its limitation. Other theories will need to be brought to bear to complement utilitarianism.
It follows that "we as a society" must calibrate the legal system and other methods of apportioning praise and blame so as to promote general happiness. As David Friedman writes, contrasting the economic approach to law with other approaches, "An economist points out that if the punishments for armed robbery and for armed robbery plus murder are the same, the additional punishment for the murder is zero -- and asks whether you really want to make it in the interest of the robbers to murder their victims." (Law's Order, 8)
As to the fate of the robber's eternal soul utilitarianism is silent.
Pure utilitarianism teaches people how to attain their goals (which may include the goals of others toward whom they feel benevolent).
On the level of the individual, utilitarianism collapses into the virtue of prudence-in-act. (Of course, utilitarianism does not lose its character as social even here, because this is merely a limiting case wherein the society consists of a single individual.)
On the level of society, it also teaches people how to hinder the goals of those whose actions would destroy social cooperation if left unchecked. A utilitarian thus seeks to educate the public about the actual means to their actual ends, enhance their practical wisdom.
In the final analysis, utilitarianism attempts to spread the virtue of prudence far and wide. That does not mean there are no other crucial virtues, such as justice, that would be dealt with by other ethical theories. Utilitarianism is not worthless, merely incomplete.