ACC-260 QuickBooks Assignment 1

Complete this assignment after following “ACC-260QuickBooks Online Registration Instructions” in course materials.
The purpose of this assignment is to have students become familiar with an accounting software package that is used in professional practice. Students will set up general ledger accounts associated with manufacturing operations, enter journal entries and other typical business transactions, and produce standard output reports in QuickBooks.

Step 1:

Importyour chart of accounts.
If you have previously used this QuickBooks company to complete your ACC-250 assignments, you will already have your chart of accounts imported and may skip this step.
Go to QuickBooks and login to your company. From the menu on the left side of the screen, choose Accounting and select Chart of Accounts. Click on the green New at the upper right-hand side of the screen and choose Import. Using the Browse function, select the ACC-260QuickBooks Import File provided in topic resources. Click Next. Click Next again, and then click Import.

Step 2:

Update your chart of accounts to include accounts related to a manufacturer.
To convert your QuickBooks service companys accounting system to that used by a manufacturing company, you will need to create eight new General Ledger accounts.
Those accounts are:
1. Raw Materials Inventory
2. Work in Process Inventory
3. Finished Goods Inventory
4. Wages Payable
5. Factory Overhead
6. Sales Revenue
7. Cost of Goods Sold
8. Selling and Administrative Expenses
Go to QuickBooks and login to your company. Choose the Accounting menu from the left hand side of the screen, and select Chart of Accounts. Click New (green button on the upper right side of the screen).
Enter the Account Type, Detail Type, and Name for each of the accounts listed above. You must determine the Account Type and Detail Type based upon your understanding of these accounts as learned in class. Enter Save and New to enter another account. Save and Close when you have entered all accounts.

Step 3:

Record the owners investment in the company inventory.
On July 1, 2021, you, the company owner, have invested $15,000 of your own money into the business in order to purchase the inventory owned by a small manufacturer. The manufacturer that you bought out had $800 in Raw Materials Inventory, $1,200 in Work in Process and $500 in Finished Goods Inventory. The remainder of the cash that was not spent was put into the companys cash account.
Go to QuickBooks and login to your company. Click the + New button at the upper left hand corner of the screen. Choose Journal Entry under the Other column. Enter the Journal Date of 7/1/2021 and notice that the journal entry number will auto-populate. Journalize the transaction described above.

Step 4:

Enter the following entries for the month of July 2021.

A. Cash sales of inventory: $800. The cost of inventory sold was $350.
B. Selling and Administrative expenses incurred and paid: $1,200.
C. Raw Materials purchased on account: $2,560.
D. Materials requisitioned and used in production: $980.
E. Direct Labor wages incurred during July: $2,875. Direct Labor wages actually paid in July were $2,000.
F. Factory Overhead was allocated to Work in Process Inventory at a predetermined overhead allocation rate of 60% of Direct Labor costs incurred during July.
G. The cost of product completed and moved to the Finished Goods Inventory: $4,675.
H. Sales on account: $2,000. The cost of the units sold was $975.
I. Actual Factory Overhead costs for the month of July totaled $2,600. (All paid in cash.)

These journal entries should be input into QuickBooks using the directions provided in Step 3. All entries should be dated “July 31, 2021,” and should be auto-numbered through QuickBooks. For the “Description,” enter “Journal Entry” and the letter of the adjustment from above. (For example, the description of the first Journal Entry would be Journal Entry A.)

Step 5:

Adjust for over or underallocated overhead to Cost of Goods Sold.
Once you have completed Step Five above, prepare and enter the necessary adjusting entry to correct for the overallocated or underallocated Factory Overhead. This entry should be input as an entry dated July 31, 2021 using the directions provided in Step 3. For the “Description,” enter “Journal Entry J.

Step 6:

Prepare the financial statements.
Once you have entered the required journal entries from Steps 2-5, choose the Reports menu from the left hand side of the screen. Scroll down to the Business Overview menu and choose Profit and Loss. This is the companys income statement. Choose “Custom” for the date description and enter the dates “7/1/2021” to “7/31/2021. Click “Run Report.” Save the Profit and Loss statement as a PDF file named “LastnameFirstinitial.ACC260.QB.PL.”
Choose the Reports menu from the left hand side of the screen. Scroll down to the Business Overview menu and choose “Balance Sheet.” Choose “Custom” for the date description and enter the dates 7/1/2021″ to “7/31/2021.” Click “Run Report.” Save the Balance Sheet as a PDF file named “LastnameFirstinitial.ACC260.QB.BS.

Submit your two financial statement files in the digital classroom.

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Unit1 Article Critique

Instructions
Select an article discussing how at least one approach to ethical theory is utilized.
After you have selected the article, write at least two double-spaced pages, not counting the title and reference pages, that address the following points/questions:

Discuss why you picked the article.

Summarize the main topic of the article.

Discuss how the ethical approach is a significant aspect of the topic of the article.

Discuss why it is important for businesses to study ethical practices.

Explain how the article contributes to the knowledge of business ethics.

Was the article compelling? If so, why? If not, why not?

Adhere to APA Style when constructing this assignment, including in-text citations, introduction, and references for all sources that are used. Please note that no abstract is needed.

Utilitarianism and risk

Morten Fibieger Byskov

Department of Politics and International Studies, Northern University of Warwick, Coventry,
United Kingdom

ABSTRACT
In day-to-day life, we are continuously exposed to different kinds of risk.
Unfortunately, avoiding risk can often come at societal or individual
costs. Hence, an important task within risk management is deciding
how much it can be justified to expose members of society to risk x in
order to avoid societal and individual costs y and vice versa. We can
refer to this as the task of setting an acceptable risk threshold. Judging
whether a risk threshold is justified requires normative reasoning about
what levels of risk exposure that are permissible. One such prominent
normative theory is utilitarianism. According to utilitarians, the preferred
risk threshold is the one that yields more utility for the most people
compared to alternative risk thresholds. In this paper, I investigate
whether and the extent to which utilitarian theory can be used to nor-
matively ground a particular risk threshold in this way. In particular, I
argue that there are (at least) seven different utilitarian approaches to
setting an acceptable risk threshold. I discuss each of these approaches
in turn and argue that neither can satisfactorily ground an acceptable
risk threshold.

ARTICLE HISTORY
Received 28 February 2018
Accepted 10 July 2018

KEYWORDS
Philosophy of risk; ethics;
utilitarianism; equality

In day-to-day life, we are continuously exposed to different kinds of risk. These risks may range
from the longer-term and potentially life threatening, such as climate change, to the mundane,
such as catching the flu or being involved in a car accident. Unfortunately, avoiding risk can
often come at societal or individual costs. We may, for example, restrict access to public areas
during a disease outbreak or impose mass surveillance measures to prevent terrorist attacks.
Hence, an important task within risk management is deciding how much it can be justified to
expose members of society to risk x in order to avoid societal and individual costs y and vice
versa. We can refer to this as the task of setting an acceptable risk threshold. Judging whether a
risk threshold is justified requires normative reasoning about what levels of risk exposure that
are permissible. One such prominent normative theory is utilitarianism. Utilitarians hold that pref-
erable action in a certain situation is the one that maximizes the most utility for the most peo-
ple. Hence, according to utilitarians, the preferred risk threshold is the one that yields more
utility for the most people compared to alternative risk thresholds.

Although the cost-benefit calculus of utilitarianism has often been invoked within risk man-
agement and assessment (Guehlstorf 2012, 4547), little philosophical literature has investigated
whether utilitarianism can be applied to the task of setting an acceptable risk threshold.

CONTACT Morten Fibieger Byskov [emailprotected] Department of Politics and International Studies,
University of Warwick, Coventry, CV4 7AL, United Kingdom
2018 Informa UK Limited, trading as Taylor & Francis Group

JOURNAL OF RISK RESEARCH
2020, VOL. 23, NO. 2, 259270
https://doi.org/10.1080/13669877.2018.1501600

http://crossmark.crossref.org/dialog/?doi=10.1080/13669877.2018.1501600&domain=pdf

https://doi.org/10.1080/13669877.2018.1501600

http://www.tandfonline.com

Moreover, as I shall argue, the most prominent rejection of a utilitarian approach to risk that of
Hansson (2003, 2013, 2014) does not address all possible utilitarian positions. In this paper, I
aim to fill this lacuna by investigating whether and the extent to which utilitarian theory can be
used to normatively ground a particular risk threshold in this way. In particular, I argue that there
are (at least) seven different utilitarian approaches to setting an acceptable risk threshold. I dis-
cuss each of these approaches in turn and argue that neither can satisfactorily ground an accept-
able risk threshold.

The paper is structured as follows. In the first section, I provide a short introduction to the
concept of risk and the task of setting an acceptable risk threshold. In the second section, I intro-
duce the normative theory of utilitarianism and how it can be applied to the context of risk
assessment. I discuss two general utilitarian positions the actualist and the expected utility
positions and the arguments raised against them by Hansson (2003, 2013). In the third section,
I identify five more specified utilitarian positions, discuss whether they are suitable for the task
of setting acceptable risk thresholds, and conclude that they are not. In the fourth section, I
address two objections to this conclusion, while I reflect on the broader consequences of my
argument in the fifth section and how to take the research on ethics and risk forward.

1. Acceptable risk

It is difficult to avoid exposure to risk. Consider, for example, how you exposure yourself to the
risk of being hurt in a car accident every time you enter into traffic, whether as a driver, passen-
ger, or pedestrian. Now, that does not mean that you will necessarily be in a car accident in
your lifetime, of course, even if you expose yourself to this risk on a daily basis and you may
even take precautions against this risk materializing, for example, by driving within the speed
limit, looking both ways before crossing an intersection, or by putting on your seatbelt.

Technically speaking, we can define risk (R) as the expectation value of an unwanted event
which may or may not occur (Hansson 2014, section 1; italics in original). The expectation value
of an unwanted event is calculated as a function of the probability (p) that the event will bring
about the expected consequences and the severity (s) of these consequences (Zinn 2009, 5).1 To
illustrate, consider how, in the above example, the probability of getting hurt in a car accident
can be lowered by driving carefully while the severity of such an incident occurring can be miti-
gated by wearing ones seatbelt.

In many cases, however, we have little direct control, as individual actors, over the extent to
which we are exposed to certain risks and their consequences. The risk of being in a car acci-
dent, for example, to a large degree depends on the actions of other drivers who may not be as
careful behind the wheel. For this reason, it often falls upon public officials to manage the extent
to which the public is exposed to risks, for example, through the implementation and enforce-
ment of traffic regulations. The problem, however, is that the safest way to minimize the risk of
people getting hurt in car accidents is to outright ban cars, which, for obvious reasons, would
have enormous societal and economic consequences.

Hence, a problem with risk management is that avoiding or minimizing risk often involves
measures that are if not unrealistic in a functioning society will at least often involve societal or
individual costs. As a consequence, in such cases the task of risk management is not necessarily
to avoid risk altogether but rather to minimize risk exposure while limiting the negative societal
consequences of risk avoidance. We can refer to this task of balancing concerns of risk exposure
with larger societal concerns as the task of setting an acceptable risk threshold.

Setting an acceptable risk threshold involves balancing two types of error (Hansson 2014,
section 3). The first type of error (Ei) stems from safeguarding against some perceived outcome
to an extent that is not proportional to the actual probability or severity of that outcome. As
such, the first type of error is associated with what we usually call a false positive: assuming

260 M. F. BYSKOV

that a risk is more probable and/or more severe than it actually is. The second type of error (Eii),
is what we usually call a false negative and occurs when the probability and/or severity of an
expected event is underestimated. The problem here is the opposite than for a false positive,
namely that we fail to safeguard against an actual unwanted event. An acceptable risk threshold
can be defined as a function of comparing and balancing the probability and severity of these
two types of error.

There are three different ways in which we can set an acceptable risk threshold by balancing
Ei and Eii. First, we can simply choose to minimize the error that has the highest expectation value.
Thus, if Ei (as a function of pi x si) is larger than Eii (as a function of pii x sii) then we should
choose to minimize Ei. However, this does not solve the issue, as it would allow us to run a risk
with a high expectation value, for example if both types of error have a high expectation value,
yet where Eii has an only slightly less severe outcome than Ei.

Second, the acceptable risk threshold could be set at the point at which the combined expect-
ation value of the two types of error (i.e. pi x si pii x sii) is the lowest. If we face two inevitable
risks this solution aims to minimize the overall risk. The problem, however, is that by aggregating
expectation values for different people in this way might lead to a widely unequal distribution of
risk among affected individuals. That is, if the lowest combined expectation value is the result of
one high expectation value of Ei, which is cancelled out by a very low expectation value of Eii,
then the burden of this risk threshold falls disproportionally on those who are vulnerable to the
consequences of Ei.

Third, we can set the risk threshold at the point in which the expectation value of the two
types of error is equal (i.e. pi x si pii x sii) or, more realistically, approximately equal (i.e. pi x si
pii x sii) . This would solve the issue above as it would prohibit the unequal distribution of risk
among affected individuals. The problem with this solution, however, is that it could endorse a
high threshold for acceptable risk in cases where there is no equal distribution among low-risk
versions of Ei and Eii. That is, in some cases, lowering the threshold for one type of risk, thereby
protecting one group of individuals from risk-exposure, may actually require a trade-off with
other types of risks, leading to an increase in risk-exposure for a different group of individuals.

A major issue in setting an acceptable risk threshold concerns how to make such trade-offs
between different risks. How can we weigh different kinds of risks against each other? What
kinds of risks do we find more acceptable and which do we want to avoid at all costs? The prob-
lem, as Zinn (2009, 13; emphasis in original) argues, is that it is unclear what the losses are with
each risk and how much weight they should be given: Central is the sociocultural dimension of
values. Risk questions are never just a question of the rational application of objective, value-free
problems. Even in the highest technical application, values concerning the acceptability of a spe-
cific level of risk or uncertainty are involved. In this sense, risk assessment and the task of set-
ting an acceptable risk threshold is inherently normative (Cranor 1997).

In the following sections I investigate whether, or the extent to which, one influential norma-
tive theory namely, utilitarianism can resolve this issue of how to trade-off different types of
risks. Utilitarianism has often been invoked in risk management due to its cost-benefit calculus.
Do the benefits, utilitarians ask, outweigh the costs?

2. Utilitarianism and risk

Consequentialism is the ethical view that an action should be evaluated based on the conse-
quences that it brings about (Darwall 2003; Scheffler 1988). Now, this does not tell us much.
According to which standard(s) should we evaluate the goodness or badness of an actions con-
sequences? Utilitarianism is the most popular version of consequentialism. According to utilitar-
ians, the goodness or badness of an actions consequences should be measured in terms of the

JOURNAL OF RISK RESEARCH 261

amount of utility they bring about. Usually, utilitarianism is said to hold the maxim that the pref-
erable action is the one that maximizes the most utility for the most people.2

How can we take a utilitarian approach to setting an acceptable risk level?3 Hansson (2003,
29397, 2013, 2328) has influentially identified and criticized two major utilitarian approaches
to risk, namely the actualist position and the expected utility position. In this section, I summar-
ize Hanssons critiques of these two positions before I turn, in the followings section, to argue
that we can identify five additional utilitarian position that can avoid the shortcomings of the
actualist and expected utility positions.

The first utilitarian position holds that we should focus on the utility of the actual consequen-
ces that are brought about by a certain action. That is, according to the actualist position,
whether we are justified in running a particular risk, depends on the actual outcome. For
example, imagine that we judge that a medical procedure has 50% risk of leading to complica-
tions for the patient. If we perform the procedure and no complications arise, the actualist pos-
ition holds that we made the right decision in performing the procedure. We can state the
actualist position in the following way.

1. Actualist utilitarian position. We are justified in relaxing precautionary measures if (and only if) we
thereby actually bring about an equal or increase in utility output as compared to retaining or further
strengthening existing precautionary measures.

According to the actualist position, whether or not we ought to relax precautionary measures
against exposure to a particular risk can only be judged retrospectively: did our decision actually
bring about an increase in utility output, all things considered, or did it actually make things
worse? There are two major issues with the actualist position, however, according to Hansson.

First of all, the actualist position only tells us ex post whether we were justified in running a
particular risk. Yet, when setting an acceptable risk level, we want to know beforehand whether
we are justified in relaxing the precautionary measures (or not). Thus, although the actualist pos-
ition might be well suited to evaluate actual actions, it is ill suited for providing action-guidance
where it is necessary to predict the justifiability of running certain risks.

A second major issue with the actualist position is that it may actually justify ex post, of
course taking quite severe risks. Imagine, for example, that there is a 50% risk that relaxing
precautionary measures against a disease outbreak will lead to a (significant) increase in mortal-
ity from infections and related complications. As above, if we relax the precautionary measures
and no such increase in mortality occurs, the actualist position hold that we were justified in
running this risk. However, we would not usually say that we justified in taking a risk where
someone has a 50% risk of dying, such as flipping a coin for someones life. Thus, the actualist
position does not sit well with our moral intuitions.

The second version of the utilitarian approach thus holds that we should focus on the
expected utility that an action will bring about, rather than the actual outcome. According to
the expected utility position, we should choose the action that has the highest probability of
yielding the highest utility outcome. Consider, for example, two alternatives. While both alterna-
tives have an expected increase in utility outcome of two units, the first alternative has a 50%
chance of leading to this increase in overall utility compared to the second alternatives 75%
chance of achieving the same increase in utility output. On the expected utility position, we
should prefer the latter alternative. The expected utility position is better suited to deal with risk
since it takes into account the aspect of probability. We can restate the expected utility position
in the following way:

2. Expected utility position. We are justified in relaxing precautionary measures if (and only if) there is a
greater probability that it will lead to an equal or higher expected utility output than retaining or further
strengthening existing precautionary measures.

What the expected utility position holds is that, when managing risk, we need to focus on
the probability that relaxing (or strengthening) precautionary measures will bring about a better

262 M. F. BYSKOV

state of affairs (i.e. a better utility output). To exemplify, let us imagine that we can relax,
strengthen, or retain the current precautionary measures in some unspecified context. While the
current control measures yield a utility output of 5 units out of ten, both strengthening and
relaxing the control measures will lead to an increase in utility output up to, say, 7 units. (The
utility output will naturally be distributed differently between groups, whether we decide to
relax or to strengthen the control measures.) Let us further imagine that there is a 75% probabil-
ity that relaxing control measures will lead to this increase in utility output, while the probability
that strengthening the measures will have the same result is a mere 50%. In this case, according
to the expected utility position, we are justified in relaxing the precautionary measures because
the chance that this decision will lead to a better state of affairs, measured in terms of expected
utility output, is higher than the alternative options.

A major problem, however, is that a commitment to evaluating actions and decisions in terms
of their expected utility output allows us to overrule the interests of a few individuals in favor of
the many if this leads to an increase in overall utility. Consider, for example, how the alternative
of strengthening control measures might have 75% probability of yielding a two-point increase
in overall utility output from five units to seven units. However, we can further imagine that
while the five utility units of the status quo were equally divided among different groups of
stakeholders, strengthening the precautionary measures would lead to an unequal distribution of
utility among different groups. We can for example imagine that in this case the public would
derive more utility from stricter precautionary measures (say, six units) than those who are tar-
geted for example, car owners or carriers of an infectious disease by these measures and
who will only derive one utility unit from this new control strategy. Thus, while a strengthening
of the precautionary measures might lead to an overall increase in utility output, it would argu-
ably put an unreasonable burden on those targeted by the measures. Hence, one of the prob-
lems with the expected utility position is that allows for the aggregation of utility output at the
expense of a few suffering individuals.4

Based on these arguments, Hansson concludes that utilitarianism is poorly suited to deal with
risk and the task of setting an acceptable risk threshold. However, as I will argue in more detail
in the following, by only focusing on the actualist and expected utility versions of utilitarianism,
Hansson risks arguing against a straw man. That is, as I show in the section, there are at least
five alternative utilitarian positions that might be better at dealing with risk.

3. Five alternative utilitarian approaches to risk

One of the main objections to utilitarianism, as Hanssons highlights in his criticism, is the prob-
lem of aggregation. The problem of aggregation arises from the utilitarian maxim that overall
utility output should be maximized for as many people as possible. Consequently, utilitarians
who advocate this maxim would endorse sacrificing the well-being or safety of a few people as
long as it is outweighed by an increase in well-being or safety to the majority of society.

To illustrate, consider the case of a potential nuclear meltdown (Hansson 2003). We can avoid
this meltdown by sending in one engineer to repair the nuclear power plant. The engineer, how-
ever, will most likely die in the process due to radiation poisoning. Is it justified to sacrifice the
life of one engineer in order to protect many more members of society from radiation poison-
ing? Utilitarians who endorse the utility maximization maxim would answer yes to this question
as the overall utility is clearly increased by sacrificing the lone engineer. Yet, to most people,
including many moral philosophers of deontological or contractualist persuasions, it is not per-
mitted to simply sacrifice the life one human being like that.

Is it possible to construct a utilitarian position that does not suffer from the problem of aggre-
gation? It might be argued that we can avoid the problem of aggregation, which persists with
the two utilitarian positions discussed in the previous section, by demanding that the

JOURNAL OF RISK RESEARCH 263

distribution of the expected utility should also be the most equal. We can call this the equal dis-
tribution of expected utility position. This position holds that we should choose the option that
has the highest probability of delivering the most equal distribution of utility among different
(groups of) individuals. Let us restate this equality-weighted version of the expected utility pos-
ition as follows:

3. Equality-weighted expected utility position. We are justified in relaxing precautionary measures if (and
only if) there is a greater probability that it will lead to a more equal distribution of utility among affected
stakeholders.

The problem with strict egalitarian approaches like this is that they are vulnerable to what
has been called the leveling down objection (Gosepath 2011, section 5.1; Nozick 1974, 229; Raz
1986, chapter 9; Temkin 1993, 24748). According to the leveling down objection, distributive
principles that favor a perfectly equal distribution would endorse lower overall utility output as
long as it is distributed equally among stakeholders. Recall the example in the previous section:
we can choose to strengthen precautionary measures, which would increase the overall utility
output from five to seven measures. Yet, whereas retaining the status quo would distribute the
five utility units equally, the benefits of implementing stricter precautionary measures would be
distributed unequally. We can, for example, imagine sacrificing one group, so that they only
receive one utility unit, in order to protect another group who will receive six utility units.
According to the equality-weighted expected utility position, we should decide to retain the
existing precautionary measures, but that would lead to a worse overall outcome in terms of util-
ity (i.e. five utility units rather than seven).

Proponents of the equality-weighted expected utility position could of course argue that their
approach protects some people from being much worse off by implementing certain precaution-
ary measures or by exposing certain people to very high risks in order to protect other people a
smaller risk, such as in the case of the engineer sent in to prevent the nuclear meltdown. Yet,
even in cases where all affected stakeholders would be (much) better off than the status quo,
the equality-weighted position would still endorse a lower overall utility output as long as the
output is distributed equally among the affected stakeholders.

Consider, for example, how we can protect against some risk by implementing either of two
precautionary measures. The first precautionary has a good probability of leading to an increase
in utility output from five to eight utility units. Let us further assume that all affected stakehold-
ers would benefit equally from this increase, such that if there are two groups of stakeholders
each would receive four measures of utility from the implementation of the first precautionary
measure. The second precautionary measure would lead to an even larger increase in overall util-
ity output, namely from five to nine utility units. However, while the second precautionary meas-
ure protects one group equally to the first precautionary measure, the other group receives even
better protection from the second precautionary measure than its alternative. Consequently,
while the first group receives four utility units from the second precautionary measure, the
second group receives five utility units. According to the equality-weighted expected utility pos-
ition we should prefer the first precautionary measure as it yields the most equal distribution of
utility. However, this conclusion seems odd since the worst off in this scenario the first group
does not experience any loss between the two alternative precautionary measures. In fact, the
second precautionary measure could provide even better protection for some people without
sacrificing others.

In order to avoid the leveling down objection, we might further choose to add a clause to
the equality-weighted expected utility position that prohibits such leveling down:

4. Equality-weighted expected utility position, with leveling down-prohibition. We are justified in
relaxing precautionary measures if (and only if) there is a greater probability that it will lead to a more equal
distribution of utility among affected stakeholders as long as this does not also lead to a decrease in overall
utility output.

264 M. F. BYSKOV

Even this amended expected utility position does not get us very far in answering whether
we are justified in relaxing precautionary measures, however, as it is also subject to the second
problem that we can identify with the expected utility position. The second problem states that
the expected utility position (and, by extension, the equality-weighted expected utility position)
prohibits cautious decision-making that avoids low-probability risks that have high-stakes out-
comes (Hansson 2003). For example, we would usually avoid taking any actions that would increase
the risk of a serious outbreak of Ebola, even if the probability of such an outbreak were quite low. This
is contradictory to the expected utility approachs position that we should choose the alternative
with the highest probability of yielding the highest utility output. This is so in two ways.

First of all, it is contradictory to the idea that we should always choose the alternative with
the highest probability of an increase in utility output. That is, if this alternative also carries a
higher probability of some serious consequence, such as an Ebola outbreak, we would usually
be justified in choosing an alternative with a lower probability of an increase in utility output if
this alternative does not also increase the probability of this serious consequence happening.
Second, it is contrary to the idea that we should choose the alternative with the highest expected
utility. That is, if the alternative with the highest utility output also involves an increase
whether negligible or not in the probability that some serious consequence, such as an Ebola
outbreak, will happen, then we are usually justified in choosing for an alternative with a lower
overall utility output.

Thus, taking into account the need to be risk-averse in terms of certain serious consequences,
we cannot make use of the expected utility positions. The fifth version of the utilitarian approach
demands that for each alternative we set a security-threshold for the probability that the worst-
case scenario will happen. This position is usually referred to as the maximin utilitarian position
as it aims to maximize the minimal outcome (Hansson 2003, 29596). The maximin position can
be stated as follows:

5. Maximin utilitarian position. We are justified in relaxing precautionary measures if (and only if) it does not
lead to an increase in the probability of the worst-case scenario happening.

The problem with this position, though, is that it remains indeterminate between cases that
do not lead to an increase in the probability of a worst-case scenario. Consider, for example,
how both retaining and strengthening current precautionary measures against an Ebola outbreak
might not lead to an increase in probability of an outbreak happening. The maximin position
does not provide us with any way of deciding between these two alternatives since it is only
concerned with the worst-case scenario, even if it would be reasonable to retain the measures
so as to avoid incurring further societal and individual costs.

Moreover, the maximin position seems to biased against taking a slightly greater risk with
higher benefits. Consider, for example, how getting to work in the morning whether by private
or public transportation increases the risk of the worst-case scenario happening, namely get-
ting killed in a traffic accident. On the maximin position, as it is stated above, going to work
would be prohibited due to the increase in the probability of the worst-case scenario occurring.
But surely the benefits outweigh the risk in this example: on a household level, being able to
work provides an income that can pay for accommodation, food, and leisure activities; on a soci-
etal level, employees contribute to the overall economy and productivity. If we are only con-
cerned with not increasing the probability of the worst-case scenario happening, we ignore that
running some smaller risks can be justified by being traded off against some larger societal and/
or individual benefits.

Hence, for these two reasons, we need to add a comparative element to the maxi-
min position:

6. Comparative maximin utilitarian position. We are justified in relaxing precautionary measures if (and
only if) it has a lower probability of the worst-case scenario happening than the alternative options.

JOURNAL OF RISK RESEARCH 265

The comparative maximin position allows us to choose between alternatives that have differ-
ent, yet insignificant, probabilities of the worst-case scenario happening. On this position, we
should choose the alternative that has the lowest probability of leading to the worst-case scen-
ario. A major problem with this position, however, is that it will remain indeterminate between
alternatives that have an equally low probability of leading to a worst-case scenario, yet might
differ in terms of overall output or equality of distribution. In the first case, as in the example
above, both relaxing and strengthening precautionary measures might carry the same risk of the
worst-case scenario happening, such as an Ebola outbreak, yet be expected to lead to an
increase in overall utility output. (Recall, retaining the current measures had a utility output of
five units, while relaxing and strengthening the precautionary measures both had an expected
utility output of seven units.) In the second case, as in the example above, we can imagine that
both retaining and strengthening the current precautionary measures carry the same risk of an
outbreak happening while yielding the same expected utility output (say, five units), yet distrib-
ute this utility output in different ways. For example, while retaining the precautionary measures
would distribute the utility output equally between stakeholders, the option of strengthening
the measures would lead to an unequal distribution between stakeholders.

In neither case, does the comparative maximin position provide any guidance on how to
choose between these different alternatives. Hence, as with the expected utility position, we
need to insert a couple of clauses, namely a leveling-down prohibition (in order to decide in the
first case between alternatives with different overall utility output) and an equality-weighting (in
order to decide in the