An Argument Against Nozick's Anarchy State and Utopia

Categories: Government

Nozick’s Anarchy State and Utopia is a direct response to the anarchist who claims that no state can be morally justified. Nozick’s strategy is to provide an account of the formation of the state which begins form a just staring position, and proceeds through just transfers only. The crucial step in Nozick’s account in the transformation of the dominant protective agency into a state which protects everyone within its borders, and which claims the right to decide who may legitimately make use of force.

This move is accomplished through the compensation principle, through which the agency’s non-clients are compensated for their obedience. In this essay I will argue that economic incentives will lead the agency to employ systematically unfair procedures in disputes between clients and non-clients. In light of this background the compensation principle will not benefit players, as economic incentives will remain the same,  but only legitimize their coercion by the protective agency. In the end, I conclude, Nozick’s attempt to build the state through an invisible hand is bound to fail because it assumes an overtly optimistic view of human nature.

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Nozick’s argument in the first part of Anarchy State and Utopia is a response to the Anarchist that claims that any state is necessarily immoral. While Nozick disentangles himself from the task of providing a complete moral background for political philosophy, he does construct a historical account of justice which provides that actions and end states are fair as long as they derived from just initial acquisitions, and just transfers.

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For an initial acquisition to be just it must leave enough and as good resources for others. For a transfer to be just, the participating individuals have to consent to it. The constraints on initial acquisition do not apply to transfers; unlike Locke, he claims that a transfer can be just even if it doesn’t leave as good and enough for others. .

Nozick does not claim that morals arise form just transfers and just acquisitions[1]. ‘Moral philosophy sets the background for and boundaries of  political philosophy. What persons may and may not do to one another limits what they may do to one another through the apparatus of the state, or do to establish such an apparatus'(Nozick 6). Anarchy State and Utopia is political philosophy. It is an attempt to construct the framework that will best protect the elusive, but in Nozick’s view robustly true moral rights of  people. Nozick suggests that the market is the best structure to avoid the violation of basic moral rights. It is better, he thinks to have a regime in which most transactions are not mutually beneficial, than to have a system that ensures that they are mutually beneficial but impinges on individuals autonomy. Although Nozick explicitly frees himself form the project of providing a theory of moral rights, his political philosophy indicates that he gives primacy to what we may term negative freedom. Negative freedom is most often associated in political theory with Hayek who conceived of liberty as the absence of constraints to doing what one wants to do. This view is opposed to positive views of liberty such as that espoused by Dewey, who claims that liberty is the effective power to do something. For Nozick, individuals have a right to be free from unjust constraints, but do not have a right to positive aid to make effective use of their freedom

Nozick’s account starts from a state of nature in which individuals are assumed to be generally disposed to act morally. His strategy, is to tell a story of how from a state of just acquisition, a minimal state can can arise solely through just transfers. The use of consent as a the basis of moral legitimacy has a long history. It played an important role in the contractarian theories of Hobbes, Locke, Rosseau, and Kant, as well as in the economic theories of Freidman (1962), and Hayek (1960). The novel idea of Nozick was to apply consent in the way in which it is spoken about in economics- bilateral consent- to achieve the legitimization of the state that contractarian theorists premised on multilateral contracts.

Nozick’s move avoids at least two problems that have plagued contrarian theories. In the first place, modern contrarians recognize that any social contract is hypothetical, there was never, and there can realistically never be a situation in which all members of society sit to agree to their form of government. In the second place, requiring unanimity out of a contract like this is to set the bar ridiculously high. Lowering the bar, however, entails coercing people that did not consent to such a contract. Nozick’s approach solves these two problems by positing a government that arises out of  voluntary bilateral transactions of individuals. Individuals do not at any point agree on their form of government, but rather construct it one decision at a time. The idea seems to be that if all decisions that historically went into making the state are legitimate, then the state should be legitimate too. The state, in other words, is legitimized automatically through the voluntaries of the actions that went into forming it. Nozick’s argument relies on two assumption, 1) that a group of actions, none of which are unacceptable in isolation will not accumulate to form unacceptable results, and that 2) that choice, under any situation, equals to consent. I will discuss each of these objections in turn.

Economics predicts that a group of actions, none of which are unacceptable in isolation can in fact produce unacceptable results.  A good starting point might be Nozick’s own famous Wilt Chamberlain example (Nozick 167). Assume that we are in a just society, and that one of the members of that society is Wilt Chamberlain. In order to play, Chamberlain requires that anyone that comes to see his games give $.25 to him, in addition to paying the cost of the ticket. In the course of the season over 1,000,000 decide to see Wilt play and dutifully add $.25 to his account. After the season ends he has earned 250,000, much more than anyone else in his society has. Nozick claims that this state of affairs is just because everyone relinquished his or her 25 cents willingly, and because those who choose not to see Wilt still have their .25 cents. Nozcik’s assessment blatantly ignores the notions of negative externalities, and informational constraints. Economic individuals make decisions based on expected value calculations that are restricted to their personal benefits and costs. Individuals, consume more cigarettes than they should, and have less education than they should, because they fail to think about the costs and benefits of these actions to society. In this same way, individuals may be watching more Wilt than they should because they don’t take into account the costs of others. Imagine (why not?) that Wilt starts using his economic power to distort the policy process in his favor. The people who decided not to pay still have their 25c, but will certainly not be unaffected by the actions that arise out of this process. Secondly, it is simply ludicrous to say that people can be made responsible for the consequences of their actions when these consequences are so causally removed. Had individuals known that Wilt Chamberlain would have been so wealthy, or that he would use the wealth in that way they may not have agreed to pay him the extra quarter of a dollar. Nozick’s notion capitalizes on the narrowness and ignorance of individuals to legitimize intuitively unjust end states.

Nozick’s Dominant Agency does not succeed in avoiding coercion. In time a dominant or monopolistic protective agency will arise, as the value of protective agencies is relative (16-17), and agencies are able to use physical force to increase their market power. In practice, this entity will be the only one able to decide which legal processes to use in disputes with lesser agencies and individuals. The dominant protective agency, however, can not simply foist its preferred processes on others without violating the justice in transfer proviso. In order to remain a legitimate entity, it has to make others agree with its decisions.

Without any additional theoretical apparatus, the agency must be able to justify its choice of precesses to all sides. Just as a Supreme Court judge will say that its ruling rulings are dictated by the constitution, so too the Agency will maintain that its procedures command obedience because they are the most epistemically accurate. The agency, as Jame buchanan (1986 99) , would argue that the processes have authority over everyone independent of their preferences, since -judicial- science seeks empirically grounded truth about the world and truth has an authority upon us that is independent of our preferences. James Buchanan, however, writes from the standpoint of an economist, who is perhaps not acquainted or doesn’t take seriously the advances in philosophy of science that have undermined science’s cognitive authority. As Kuhn (1962) suggests, scientific paradigms are revolutionized by political support within disciplines. Science and knowledge in general is entrapped in a circular relation. Something is true because it is abetted by authority, and something posses authority because it is true.[2]

Nozick escapes these philosophical problems, of which he was well aware (1981), by resting the legitimacy of procedure, not on its epistemic accuracy, but on the fact that both parties agreed to it. He proposes to reach this agreement through the principle of compensation. The principle would require the agency to compensate people who could not divert resources from other uses without disadvantage to themselves, with an amount just enough for them to be able to afford its cheapest protection service package. As I will explain bellow, however, there is no guarantee that this principle will not be coercive, and hence no warranty that it will serve Nozcik’s purpose of legitimizing the state.  In what follows I will first argue that the processes that the agency enacts to deal with non-clients are likely to systematically disadvantage them in disputes against clients. I will secondly argue that by choosing to accept the agency’s compensation the agents will not necessarily consent to this oppressive regime.

Nozick claims that agencies will deal justly with non-payers, since they have an economic incentive to do so. This conclusion is evidently incorrect. The protective agency, as a monopoly, is a price setter not a price taker and wants to capture as much market share as possible. The agency has an incentive to behave as ruthlessly as possible to outcompete its clients, and to make its product as desirable as possible (by making not belonging to it as undesirable as possible). If the agency is ruthless enough, no principle of compensation is necessary, since the individuals would willingly divert funds form their own activities (the disabled man would no longer choose to drive) to buy the agency’s protection.

Nozick’s convergence to justice argument, besides ignoring market pressures, relies on two assumptions of questionable worth. Specifically, Nozcik says that associations will want to determine in some fashion who is right in order to avoid constant and costly involvement in quarrels (13). I disagree. Assume that there are two kinds of clients: those that are prone to bring about claims (Q), and those that are not (-Q). Nozick implies that individuals Q, will benefit much more form the legal system than individuals -Q, since they would win more suits and receive more compensations. Increasing the probability of winning against a non-client by making a procedure unjust would reduce the cost of engaging in these quarrels and hence would encourage both Qs and -Qs to engage in more disputes.

Nozick seems to think that increasing this probability of winning will in practice only benefit Qs, and that it will leave -Qs to carry the economic burden. This need not be the case.We can conceptualize the situation as follows. Each of these individuals has a separate set of disputes they could potentially engage in. Each of these disputes has an expected value, and individuals will engage in the dispute only if it is above a certain threshold expected value. Individuals -Q could well have many more disputes that are in the borderline of that threshold; increasing the probability of winning in this case would in fact benefit -Q much more than it will Qs, and offset any price increases to them.

Nozick also seems to irrationally restrict the paying schemes of the agency to a flat fee. One could implement other pricing schemes that would eliminate the pressure on which Nozick’s justice convergence claim relies. One could, for example, ask for a fixed price for basic protection services and then ask for an additional fee when one engages in a dispute with an outsider, or collect a percentage of the compensation collected form the independent (which is non problematic from the payers perspective since the agency can set the compensation amount itself). These two pricing mechanism would not only eliminate pressures to increase prices on -Q, but would in fact set up incentives for the state to sway procedures as much in favor of its clients as possible[3]

Let us run a thought experiment of the application of the principle of compensation in light of the former considerations.Picture the following scenario: a dominant agency member sues an independent. Since the agency has much more power than the independent, it will choose which procedure to employ during the dispute. In this setting the member will have an 80% chance of wining regardless of whether he is guilty or not. The effect of the principle of compensation would be radically different depending on whether the same procedures apply to the non-client immediately or only after the dispute that brought them into conflict with the agency. Imagine that these procedures- broadly defined to include not only what is written in the law but also how the legal system reacts to individuals- apply only after the said legal suit. In this case, the client would still have an 80% of winning, and the procedure would still be systematically biased against the non-client. The non-client is made to choose between taking the agency’s subsidized protection and facing trail with a 20% chance of winning, or not taking the agency’s offer and facing a trail with a 20% of winning. If the agency is economically rational it will make buying its product as attractive as possible. In practice, therefore the agency would lower even more the chances of the independent (perhaps to 0%) in order to incentivize him to buy in. This is certainly a choice, but it is not one which we are conformable calling non coercive. This  choice is even more meaningless of we imagine that this individual is sentenced to death or to life in prison, and never gets to reap the benefits of his increased legal protection. Under these circumstances, the compensation principle is nothing more than a coercive effort of the agency to legitimize its actions.

On the other hand one could think that the benefits of inclusion accrue immediately after the independent is included, and that his chance of winning goes from 20% to 50%. In this case the agency would be asking paying members to pay to reduce their chances of winning. Nothing is as surely to bring destruction to an agency than acting against the desires of its paying members. As we all know, critics on the left starting with Marx have argued that those who enjoy a disproportionate amount of wealth tend to dominate the political process, and are unlikely to use this political power to undermine their own position of superiority. Moreover, if people can get the same procedural constraints whether they pay or not, why pay at all? The agency can certainly not coerce individuals into paying without violating their rights. As long as there are some people wanting but not being allowed to cease payment, the claim that everyone is freely consenting to the prevailing institutions is false, as these members are cooperating simply because they can’t leave.

The choice that non-clients are made to make by the compensation principle is coerced in  a familiar way. During the Lochner era, Supreme court said that government could not intervene into contracts that were freely entered into. In West Coast Parish Hotel, the case that ended the Lochner era, the court reversed course, and recognized that market forces can except coerce individuals. Liberty, the majority noted, is  constrained by the requirements of due process.  Just as employees and employers were not equally positioned in negotiating their wage since employees are constrained by practical and economic realities, so too it is ludicrous to think that independents would be free to choose whether to join or not to join an the dominant protective agency. Relations in the market often involve real asymmetries of power, especially in monopolistic situations. Imagine for example that individuals  settle in plots  each with its own well, but that after a draught only one well remains in the whole community.The owner of the only working well comes up to each household and offers to sell water at an exorbitant price, the villagers, who otherwise risk dying of dehydration, reluctantly comply. The well is a textbook example of a monopolistic market, but it also has subtler analogies to the case of dominant agency. In the first place, although the villagers agreed to settle in those plots of land, they did not foresee that a few down the road they would be charged exorbitant water prices. Just as this individuals did not choose their end state, so too people in Locke’s experiment did not agree to their own end state. Secondly, just as in this case, the dominant agency has power over a resource that is essential for life. Both the protective agency, and the owner fit McGregor’s (1988) definition of a coercive monopoly, as both make alternatives to compliance ineligible:  prospective clients have no other options, and the monopolizers have the ability to cause or to prevent positive evil to the clients.

Market exploitation is consensual exploitation.  As Peter (2004) suggests individuals in the Dominant protective agency market are faces with the choice of buying or not buying the agency’s product, but they can not choose an alternate state of affairs, nor are they responsible for that sate of affairs other than in a trivial sense. The concern raised by Peter, is mirrored by Olssareti (1998), who claim that choice is not voluntary if it is made because no acceptable alternative is available. It is also echoed by Hayek, who says that the essential question of liberty is whether the possibilities form which one  must choose are many or few . Of course, strictly taken this objection can lead to slippery slope: we can always imagine a better alternative- a marginally higher pay for example-, but the claim’s intuitive has been vindicated by recent legal theorists such as Columbia’s Joseph Raz. Raz (2000) has filled Hayek’s theoretical void by specifying that only valuable options should count. A man on a pit whose only options are eating for survival and sleeping is not free since his options are trivial. In the same way, a girl that is given the option of having sex with an aggressor or having her baby killed is not free either, because her options are terrible. Non payers who give in into the agency’s compensation proposals are consensually exploited. Their situation is no different, from that of a slave who is savagely beaten everyday, and who one day is given the option of doing an extremely disagreeable job in exchange for not being beaten.

Nozick, at last, relies on the argument that the state will have an incentive to treat disputes between outsiders-clients in a just way so as not to lose the legitimacy to deal with internal disputes. It is perfectly possible, however, to maintain two systems of law with different procedural requirements that do nor signal anything about each other. This is not too far from the American experience. ‘Enemy combatants’ and other detainees in Guantanamo were for a long time held without a right of Habeas Corpus, that is, without the right to appeal violations of the Constitution’s Due Process clause,  statutes and treaties, the common law, and international law to US courts. In 2006, Congress passed the Military Commissions Act of 2006 (MCA). The Act eliminated federal courts’ jurisdiction to hear habeas applications from detainees who have been designated (according to procedures established in the Detainee Treatment Act of 2005) as enemy combatants. In Boumedine v. Bush the D.C. Circuit ruled in favor of the government, saying that the Suspension Clause only protects the writ of habeas corpus as it existed in 1789, and that the writ would not have been understood in 1789 to apply to an overseas military base leased from a foreign government. Constitutional rights do not apply to aliens outside of the United States, the court held, and the leased military base in Cuba does not qualify as inside the geographic borders of the U.S.

At first glance it seems that including previously independent individuals under the dominant protective agency solves the incentives problem that would have led it to implement unjust procedures against independents. Everyone, after all, is now its client. The compensation principle, however, merely removes this incentive problem one step further. In the first place, this process won’t be economically beneficial to an agency without  rivals. Before incorporation, the state could simply handle cases client/non-client cases through alternate ‘cheaper’ litigation procedures, which lack all the rights protecting processes of the system it applied to its domestic disputes. After incorporation, it will be harder-and hence more expensive-, (although by all means possible) to make these distinctions.  Including nonpaying individuals in the system would not accomplish much more than legitimizing their unjust treatment.

The former conclusion can be derived form standard political economy models. The median voter theorem (Butler 2004) states that politicians are expected to vote for the policies preferred by the pivotal voter in the ideological spectrum- the voter without which they would not win the next election. The reason, we might think, why redistributive polices are possible in modern states is because a large part of voters benefits from these polices. Nonvoters are politically powerless and are protected under the American constitution through several mechanisms, including the tears of scrutiny in the equal protection clause.  Non payers in Nozick’s minimal state are as powerless as nonvoters, but they enjoy no such protections. There is simply no incentive for the state to treat these individuals justly; quite the contrary, the agency will heed individuals who threaten to stop payment when they feel wronged by a process that places non payers on an equal footing. Arguably, however, the state would have to protect these individuals to a greater extent than before. It will be harder for the state to maintain the semblance of impartiality it needs to legitimize its decisions in disputes between players when it visibly mishandles payer/non-payer disputes. To what degree a legal system would lose legitimacy for treating the non payer group unequally is an empirical question. At least, however, we know that the south did not seem to lose legitimacy among whites for treating African Americans grossly unequally. In many similar cases, the tacit understanding seems to be that there are two different systems of justice for dealing with two different groups. So too actions in the implicit non payer system will probably not threaten the implicit payer system.

As I have hope to have convincingly conveyed through this essay, Nozick’s historical account of justice virtually assures a widespread violation of rights. Nozick’s contemporary account, however, is not the only or the most popular. As Nagel (1975) points out in his celebrated ‘libertarianism without foundations’ there is no a-priori reason to accept a robust freedom of contract. Enforcing Nozick’s ‘minimalist system’ involves restricting some alternatives that would otherwise be available to people. Zimmerman (1981), for example, points out that Nozick’s vision of transactional justice is highly intuitive: it looks at the rights of the aggressors and not at those of the affected person in order to asses the justice of an action. What results form a view like Nozick is that whether an action is non-coerced would depend on how the constraints to that action have emerged. The action  would be free if it came about by a series of voluntary transfers. Imagine that Q is kidnapped, and brought to a desert island by A. After Q goes one week without water and food, A approaches him and offers him a demeaning job in exchange for a meager livelihood. At the same time B (owner of the only other business on the island) approaches Q with a similar offer. On Nozick’s view A but not B’s offer would be coercive, since the situation in which Q is in was unlawfully brought about by A only. Cases such as these, Zimmerman as well as other scholars I have referenced above say, are better handled through non-moral conceptions of coercion that require the alternatives available to be valuable in order for an offer to be non-coercive.

The fact that certain institutions involve a minimal of non-voluntary does not indicate that such institutions are to be preferred. As a responsible thinker, one must take up the complex empirical question of what the consequences of such institutions will be. John Rawls, in a Theory of Justice and Political Liberalism provides an account that is automatically sensitive to such consequences. Rawls’s (1971) 500 page plus theory is an architectural  piece full of nooks and carnies, and I do not claim to do it justice in this brief mention. At broad strokes, Rawls claims that soceity should be regimented by those principles which citizens would choose behind a veil of ignorance, behind which they do not know their race, ethnicity, gender, age, income, wealth, natural endowments, preferences etc. What parties do know is that people have different conceptions of good and plans of life, and that while there are enough resources  for everyone to lead a respectable life, there are not enough for everyone to get what he or she wants. Even under ideal circumstances, Rawls recognizes, these principles won’t come out right the first time. Instead, principles are constantly adjusted through a process of reflective equilibrium as they experience life in society. Rawls’s, in contrast to Nozick’s theory, is end state sensitive as it claims that voluntary acts give rise to obligations only if background conditions are just, and adjusts the conception of justice to mirror our intuitions.

Nozick’s book is driven by two very different projects. On the one hand, the book is a reaction to Rawls potentially redistributive project. On the other, it is a defense of the morality that Nozick took so seriously. These two goals, although not incompatible in theory, are incompatible in practice. A historical account of justice, coupled with a standard economic definition of man as a rational agent evolves into a systematic violation of rights carried form the vantage point of a just state of affairs. In the end, the only path open to Nozick is denial. To deny , contrary to experience, that this situation will arise in the first place because men is an angel- in  need of government.

Works Cited

  1. Nozick, Robert. “Anarchy, State, and Utopia.” (1974)
  2. Nozick, Robert. Philosophical explanations. Harvard University Press, 1981.
  3. Hume, David, and Tom L. Beauchamp. An enquiry concerning the principles of morals: a critical edition. Vol. 4. Oxford University Press, 2006.)
  4. Friedman, Milton. Capitalism and freedom. University of Chicago press, 2009.
  5. Hayek, Friedrich A. “The constitution ofliberty.” Chicago, IL (1960).
  6. Laudan, Larry. Truth, error, and criminal law: an essay in legal epistemology. Cambridge University Press, 2006.
  7. Foucault, Michel. Power/knowledge: Selected interviews and other writings, 1972-1977. Pantheon, 1980.
  8. Kuhn, Thomas S. The structure of scientific revolutions. University of Chicago press, 2012.
  9. Buchanan, James M. Liberty, market and state. Wheatsheaf books, 1986.
  10. McGregor, Joan. “Bargaining advantages and coercion in the market.” Philosophy Research Archives 14 (1988): 23-50.
  11. Peter, Fabienne. “Choice, consent, and the legitimacy of market transactions.” Economics and Philosophy 20.1 (2004): 1-18.
  12. Scanlon, Thomas. “Nozick on rights, liberty, and property.” Philosophy & Public Affairs (1976): 3-25.
  13. Chan, Joseph. “Legitimacy, unanimity, and perfectionism.” Philosophy & Public Affairs 29.1 (2000): 5-42.
  14. Lee, David S., Enrico Moretti, and Matthew J. Butler. “Do voters affect or elect policies? Evidence from the US House.” The Quarterly Journal of Economics (2004): 807-859.
  15. Nagel, Thomas. “Libertarianism Without Foundations'(1975).” Yale LJ 85: 136.
  16. Zimmerman, D. (1981). Coercive wage offers. Philosophy & Public Affairs, 10, 121–145.
  17. Olsaretti, S. (1998). Freedom, force and choice: Against the rightbased definition of voluntariness. The Journal of Political Philosophy, 6, 53–78.
  18. Rawls, John. A theory of justice. Harvard university press, 2009.

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An Argument Against Nozick's Anarchy State and Utopia. (2021, Sep 16). Retrieved from

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