Public Choice Volume 23 issue 1 1975 [doi 10.1007%2Fbf01718099] James M. Buchanan -- Utopia, the minimal state, and entitlement (1).pdf

Book Reviews UTOPI A, THE MI NI MAL STATE, AND ENTI TLEMENT James M. Buchanan-k Robert Nozick' s important book, Anarchy, State, and Utopia, treats three major topics that are superficially distinct but closely related at a more fundamental level of analysis. In their order of presentation, these are (1) the moral legitimacy of the minimal state and the moral illegitimacy of any other state, (2) the entitlement theory of distr
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  Book Reviews UTOPIA THE MINIMAL STATE AND ENTITLEMENT James M. Buchanan k Robert Nozick's important book, Anarchy State and Utopia treats three major topics that are superficially distinct but closely related at a more fundamental level of analysis. In their order of presentation, these are (1) the moral legitimacy of the minimal state and the moral illegitimacy of any other state, (2) the entitlement theory of distributive justice, and (3) a framework for Utopia. I shall discuss these topics in the order of the appeal of Nozick's argument to me, that is, in the order (3), 1), and (2). His discussion of a utopian framework is familiar, attractive, and hopefully convincing. Despite the possibility of identifying important gaps in the analysis, I can accept much of the argument for the minimal state. But I find Nozick's entitlement theory of justice to be unconvincing. A Libertarian Framework for Utopia Economists will recognize Nozick's framework for Utopia as the world of competitive clu s (associations), with voluntary entry and exit. The Tiebout theory of local government and the related theory of clubs were initially analyzed in terms of their efficiency-generating attributes, and most of the subsequent discussion has been within this setting (see Tiebout, and Buchanan 1965). Dennis Mueller has also called attention to the equit T aspects of these models, aspects that economists have largely neglected. Nozick's contribution here lies in shifting the analysis of competitive clu s to the most fundamental realm of discourse, the comparative evaluation of idealized social orders. *This is a review article of Robert Nozick, Anarchy State and Utopia (New York: Basic Books, 1974). I am indebted to my colleagues, Nicolaus Tideman, Gordon Tullock, and Richard Wagner for helpful comments.  122 PUBLIC CHOICE Nozick asks the reader to dream for himself an ideal world, constrained only by the recognition that other men, real and imagined, can dream their own worlds. This rules out the self-interested temptation to invent a Utopia where others bend to the dreamer's will. In this conceptual setting, Nozick describes a world in which each person holds membership in that club which most satisfies his desires, securing a net value from his membership that is at least equal to the value of his contribution to other members. Nozick does not, and should not, lay down constraints on the limits of club action, and his model allows for widely divergent ranges of activities. So long as persons may voluntarily emigrate and form new clubs or, if permitted, join other existing clubs, there are no moral arguments against the particular activities of any group. In this analysis, and particularly as he moves from the idealized to the real world, Nozick does not fully consider problems raised by the definition of rights of members, by the possible absence of effective entrepreneurship, by the presence of scale economies or diseconomies including threshold limits and transactions costs, by the potential for interpersonal discrimination. He acknowledges the incompleteness of his model, however, and his discussion lends itself admirably to elaboration and extension by more specialized scholars. The inimal State These clubs are not states, in Nozick's usage, and they are, along with their individual members, presumably subject to the constraints of the minimal state which is exhaustively discussed earlier in the book. Nozick's initial objective is the refutation of the anarchists' claim that any state is immoral. He tries to show that an entity with the required properties of a state will emerge spontaneously from a sequence of morally acceptable actions by persons. Nozick places emphasis on this invisible-hand explanation of the state, and he specifically introduces the analogue to the spontaneous coordination of the market. The starting point is Locke's state of nature, in which each person has certain natural rights (more on this below). Anarchy cannot prevail because each person will recognize that some will try to violate the rights of others. Enforcement and punishment will be necessary, and specialists in these tasks will emerge. Individuals will purchase the services of protective associations, and, in the ordinary course of things, one association will come to a dominant, but not exclusive, position in the community. To this point, there is no problem. Nozick's conjectural history is essentially a positive model of rational individual behavior. The next critical step, however, is the derivation of exclusivity for one protective association, even in the absence of voluntary purchase of its services by all persons in the community. To take this step, Nozick switches to an explicitly normative model and invokes criteria of morality to evaluate behavior. Through a very complex argument which involves the risks associated with allowing independents to punish clients of the protective agency, risks to all clients and not only to those who are guilty, Nozick justifies the prohibition oF independents' rights to punish on allegedly moral grounds. But, this prohibition, in itself, would violate the natural rights of the  REVIEW 12 3 independents; hence they must be compensated which may, in turn, require that the agency tax its own clients. The compensation will normally take the form of offers to provide the protective services o£ the agency to nonclients at below-cost prices The last part of the argument is not congenial to the public-choice economist, who is not likely to be primarily interested in morality, which must be recognized as Nozick's principal domain. The discussion does expose the contractarian presuppositions of the whole public-choice framework. In the latter, the legitimacy of collective action is derived from voluntary agreement, from contract among individuals with defined rights. The institution of free and voluntary exchange is generalized to suggest contractual srcins of collective action. And even if this aspect is not emphasized, moral legitimacy is thereby accorded to those activities of collectivities that embody observed agreement on the part of all persons in the membership. Mthough he does not discuss the point explicitly, Nozick presumably rejects contractarian explanations of the state on the grounds that these become apologies for coercion. And, to Nozick, coercion is the primary attribute of the state. The contractarian is on admittedly weak ground when he uses his criteria to evaluate existing institutions, which demonstrably embody coercion, on the as if presumption of contractual origins. This is notably the case when the argument is not informed by a categorical distinction between ,the constitutional and the postconstitutional stages o£ agreement, a distinction that I have repeatedly urged on fellow social philosophers. Nozick does not seem cognizant of this distinction, especially when he discusses RaMs' possible response to criticisms of the directly redistributive measures dictated by Rawlsian precepts of justice. RaMs' possible argument to the effect that these precepts are designed to be applicable at the macro level of structure and, therefore, that micro level objections are unfounded, is held to be invalid by Nozick. While the Rawlsian macro-micro terminology is highly misleading, there is no inconsistency when the distinction is understood in the constitutional-postconstitutional context. Contractual agreement may be reached on rules that operate in subsequent periods so as to embody apparent coercion. The ntitlement Theory of Justice In Part II of the book, Nozick is concerned with defense of the minimal state against all arguments for extension, holding that all extensions violate the natural rights of persons. His analysis is, however, devoted almost exclusively to the state's possible role in redistribution, which is, of course, the most difficult of all extensions to defend. Nozick simply leaves out of account the provision of public goods (Musgrave's allocation branch), the economic theory of the state, which may be contractually derived. He does so, presumably, on the anticontractarian grounds noted above, although the possible benefits to be realized from joint or cooperative ventures tend to be neglected throughout the analysis. Nozick presents an entitlement theory of distributive justice, which states that any distribution of holdings is just if it has been acquired justly. The process of  124 PUBLIC CHOICE acquisition and transfer of holdings becomes the central focus of attention and not the particular characteristics of any distribution. I share Nozick's criticism of what he calls time-slice principles of justice, principles whose criteria are drawn from end results independently of process. On the other hand, Nozick's own principle of entitlement seems to me to be open to comparable criticism because it, too, looks at an existent distribution and then applies historical criteria to determine its moral acceptability. But why is a young Kennedy or Rockefeller entitled to an inheritance merely because it was voluntarily bequeathed to him? 1 What natural tight is taken from him when such transfers are limited? And why does it matter at all whether the property so bequeathed was acquired justly or unjustly? As Bernard Williams noted in his earlier review Times Literary Supplement, 17 January t975), Nozick's moral evaluation of process would suggest that most of America properly belongs to the Indians (perhaps Marlon Brando has something after all). This sort of question exposes the weak link in Nozick's whole logical structure, his defense of the starting point in Locke's state of nature, where persons are defined with claims to certain ' natural rights, both with respect to physical objects and to other persons. Nozick's efforts in this respect are no more successful than those of Murray Rothbard and Dax4d Friedman. Why must a starting point be defined at all? One ultimate purpose may be of locating some basis for evaluating the social order that we observe. In a very real sense, the starting point is always the status quo, and proposals for improvement must be informed by this existential reality. Conceptual srcins are helpful, however, to the extent that they aid in the evaluation. It will be useful to outline three recent usages of conceptual srcins of social order. These are (1) Nozick's state of nature defined in Lockean terms where each person has certain natural rights, (2) the srcinal position posited by John RaMs, in which persons put on the veil of ignorance. and (3) the natural equilibrium in Hobbesian anarchy, which I have used as a basis for analysis (Buchanan, 1975). tf distributive justice is to be applied to possible imputations of holdings only in terms of the process through which these imputations have been created or have evolved, and if the moral acceptability of this process is the ultimate test, it becomes essential that some morally justifiable starting point be described. This is Nozick's schemata, with Locke's state of nature in which persons possess natural @ts assuming the central role. If, by contrast, criteria for the justice or injustice of social arrangements are derived from the contractual process through .which these arrangements have been chosen, or might have been chosen, the srcin must be defined in such a way as to make general agreement possible. If agreement is to emerge from self-interest, individuals' roles cannot be identifiable. (We agree on fair rules for a game only in *he setting in which our own positions are uncertain.) This is the purpose of 1This is admittedly an extreme example with perhaps unfair emotional overstones. Nozick's argument becomes much more pesuasive if it could, somehow, be limited to apply to the distribution of earnings based on relative e/tort. But it is precisely the extreme examples that make the moral acceptance of the entitlement theory so difficult.
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