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Ideal observer theory purports to give the meanings of ethical terms or to provide normative standards by showing what judgments an ideal observer would make and what reactions an ideal observer would have. There are many different versions of the theory. Other ethical theories employ aspects of ideal observer theory as well. The most notable of ideal observer theories is that of Roderick Firth, but Adam Smith offers one of the first versions of the theory. Others who employ aspects of ideal observer theory are Richard Hare, in his discussion of the archangel as part of his two-tiered theory of moral thinking, and John Stuart Mill, in his use of the benevolent spectator as part of the explanation of his utilitarian theory. However, Hare's archangel and Mill's benevolent spectator are best considered ideal observers in the service of consequentialist ethical theories. Still other ideas that share some important similarities with ideal observer theories include Kurt Baier's “moral point of view” and Thomas Nagel's “view from nowhere.” These share with ideal observer theory the requirement that moral judgments must be made from an objective standpoint if they are to be correct.

The requirement of objectivity is the main characteristic of ideal observer theory. Correct moral judgments are objective and impartial as well as devoid of particular interests, concerns, and attachments. Some versions, specifically Firth's, add omniscience as a necessary attribute of the ideal observer. Smith requires knowledge for the ideal observer, although not omniscience. For us to employ such a theory in decision making, we must imagine what it would be like to have those attributes, some of which are impossible for us to have. Our judgments are thus in an important respect always tentative since ours may not match the judgments of the ideal observer, given our less-than-ideal circumstances.

Firth's account is the most thorough and sophisticated version of ideal observer theory. He identifies and explains six characteristics of the ideal observer: (1) omniscience with respect to nonethical facts, (2) omnipercipience, (3) disinterestedness, (4) dispassionateness, (5) consistency, and (6) normality in all other respects. This combination of characteristics has the result that the ideal observer is also completely impartial, which is of great importance to the absolutist, or objective, character of Firth's analysis of moral terms. According to Firth, the ideal observer's impartiality results from disinterestedness and dispassionateness. Consistency, however, does not result in impartial decisions. Rather, impartial decisions will be consistent. Firth points this out by reminding us that it makes sense to say a person is consistently partial, so as to remind us that consistency is not enough to make for impartiality.

These six required characteristics of the ideal observer are intended to be significant but conceivable. If the ideal observer did not meet these requirements, we would not want to take his or her judgments as giving meaning to moral terms. Firth's analysis is such that moral terms are given meaning by the reactions of an ideal observer. So, for statements in which an ethical term is predicated on some act, agent, or characteristic, the ethical predicate is given its meaning by how the ideal observer reacts to that act, agent, or characteristic. For example, if we were to analyze the statement “Murder is bad,” the term bad will reflect the ideal observer's negative reaction to or disapproval of the term murder, just as in “Giving to charity is good” the term good reflects the ideal observer's positive reaction to or approval of the term giving to charity. It is worthwhile to note that the ideal observer may also react with moral indifference, passing no moral judgment on an act.

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