Anarchy, State, and Utopia: Part I


1. Basic Plan of the Book:
    a) In Part I Nozick seeks to provide a moral justification for the Minimal State: the nightwatchman state of classical
        liberalism, whose sole functions are to protect rights to life, liberty and private property.
    b) In Part II, Nozick argues that any state more extensive than the minimal state is inherently unjust or immoral.


2. Distributive Justice:
    a) In the course of doing all this, Nozick argues against commonly held views on distributive justice, justice in the distri-
        ution of wealth and income. These theories are almost all redistributive, i.e., they call for using the state to take from
        some and give to others. Such theories usually are, but need not, be egalitarian (radical or otherwise).
    b) He will also argue on behalf of his own theory of distributive justice, or as he prefers to call it, justice in holdings.


Chapter 1


3. The Main Question of Political Philosophy: Why Not Anarchism?
    a) Distinguish anarchy from chaos. A condition of anarchy is also called ‘a state of nature.'
    b) It seems that to investigate the case for anarchism, we should ask ourselves what things would be like if there were
        no state at all. Too hard to know. (Massive counterfactual.) We have to make some assumptions. But what should
        we assume and why?
    c) Nozick is motivated by the desire to take anarchism seriously, so he doesn't make the Hobbesian assumption.
        Nor does he make any wildly optimistic assumptions, as did the French Utopian socialists.
    d) Instead, he assumes the best case scenario that an anarchist could reasonably hope for:
           Most people, most of the time, act as they ought to act, especially in respecting the rights of others.
    e) More on the anarchist assumption:
        (1) Actually, this assumes that people act about they way they act now.  Most people, most of the time, don't rob,
              steal, kill, etc.
        (2) This is also Locke's assumption.

Interlude

A Conversation Between Carmine "The Snake" Persico and Woody
(from a transcript of an FBI wiretap)

Woody has swindled $500,000 from May's Department Store in Brooklyn. He wants to know why he is being asked to pay a rather large share of the money to Carmine Persico, who played no part in the scheme:

PERSICO: When you get a job with the telephone company, or maybe even May's Department Store, they take something out of every paycheck for taxes, right?

WOODY: Right.

PERSICO: Now why, you may ask, does the government have the right to make you pay taxes? The answer to that question, Woody, is that you pay taxes for the right to live and work and make money at a legit business. Well, its the exact same situation--you did a crooked job [in the territory of the Profaci Family]. You worked hard and earned a lot of money. Now you have got to pay your taxes on it just like in the straight world. Why? Because we let you do it. We're the government.

4. Justifying the State:
    a) What would the "archist" have to do to justify the state? There are three possibilities:
        (1) Show that, morally speaking, things are better with a state than without a state.
        (2) Show how a state could arise from a state of nature without anything morally impermissible happening
        (3) show that a state would inevitably arise from a state of nature, perhaps in a morally impermissible manner.
    b) (3) wouldn't really count as "justifying" the state–rather it would render anarchism otiose (beside the point).
    c) Doing (1) or (2) would be sufficient for justifying the state. Nozick opts for (2)
    d) There is a vagueness in both (1) and (2) regarding what counts as morally permissible. This is clarified at the top of
        page 6 in a covert reference to Rothbard.


5. Rothbard's Anarchism:
    a) Rothbard claims that people have moral (natural) rights–to life, liberty and property
    b) On his view, any state violates people's rights and thus is inherently or intrinsically immoral.
    c) Nozick's purpose in Part I is to refute Rothbard by explaining how a state could arise from a state of nature
        without violating anyone's rights.
    d) Skip pages 6-9


Chapter 2


6. Locke's State of Nature:
    a) Locke had a natural law theory of ethics (distinguish descriptive and prescriptive laws). This gets cashed out in terms
        of natural rights that people have, i.e., rights they have in a state of nature. People generally do what they are supposed
        to do, specifically, they generally respect the rights of others.
    b) These rights include the right to life, liberty, and property.
    c) Rights imply coercively backed duties. This in turn means that when someone violates a person's rights in a state of
        nature, that person has the right to exact compensation for the harm done and to punish the other person to the extent
        dictated by the natural law. There are two purposes of punishment:
        (1) deterrence
        (2) retribution
        Others can help, either because they are my friends or because they are public spirited. In a state of nature, everyone
        has the right to punish a rights violator.
    d) All this is very controversial. Some people want to say that all rights are matters of convention, especially property
        rights. In other words, there are no rights in a state of nature, even if there are moral duties. (Compare Hobbes).
    e) Contrast legal rights and moral rights.


7. The "Inconveniences" of a State of Nature:
    a) The natural law may not provide for every contingency.
    b) Some people won't be able to enforce their rights because they are too weak.
    c) If people are judges in their own cases, they will be inclined to be biased and to overestimate the harm they suffer
        when their rights are violated.
    d) This leads to excessive punishment and cycles of retaliation and counter-retaliation. There is no finality.
    e) All this is under the general assumption that most people most of the time act justly. There can be honest differences
        of opinion here.
    f) Locke's Solution: To these inconveniences I readily admit civil government is the proper remedy. In other words, form
        a State!
    g) Nozick says, "Not so fast!" Let us consider what could be done within a state of nature. This is an important insight.

8. The Evolution of Protection Agencies:
    a) Actually his approach is to ask what would happen, given the following suppositions:
        (1) state of nature
        (2) most people most of the time ‘follow the laws of nature' and do their duty. To the extent that they can, consistent
              with duty, act in their own self-interest, that's what they do.
    b) Mutual protection associations would form; these would give rise to mutual protection associations, which in turn
        would give rise to the dominant protection agency. The dominant protection agency would ultimately become the
        minimal state.
    c) This would happen in a way that is morally permissible, i.e., no one's rights would be violated.


9. Mutual Protection Associations:
    a) Since there is strength in numbers, people would band together and form these protection associations to enforce their
        rights. (By hypothesis, they would not become a group of bandits.) Everyone helps everyone else.
    b) three problems:
        (1) Everyone's always on call
        (2) Paranoid, belligerent members will always be calling on everyone and may occasionally use others to violate
              outsiders' rights.
        (3) intragroup conflicts:
             a. a non-intervention policy would lead some people to join lots of agencies
             b. creates bad blood
             c. the most plausible scenario is that the association would adopt fair binding procedures to adjudicate disputes
                 among members.


10. Protection Agencies:
      a) Protection associations would evolve into protective agencies because of economies of scale and the benefits of
          specialization (division of labor).
      b) Someone would form a corporation, issue stock, hire employees to serve as judges, lawyers, policemen, and
          provide protection services in exchange for a fee. Protection associations become protection agencies.
      c) To buy this service, people would have to renounce their right to enforce their rights against other members. Indeed,
          you would probably have to renounce your right to enforce your rights against others outside the agency, since the
          agency does not want to get dragged into ill-considered disputes. It would investigate complaints and use reliable
          methods to adjudicate them.
      d) This would be the most efficient way to resolve intra-agency disputes, and externally, it would allow them to avoid
           costly rounds of mutual retaliation.
      e) There would be strong market pressures for the agency to act justly in dealing with non-clients. Why? Two reasons:
          (1) we are assuming people generally act in accordance with the moral law, i.e., they respect rights.
          (2) other agencies wouldn't want to protect their clients from just punishments (that wouldn't be part of the contract).
          (3) an outlaw agency would be very expensive to run


11. Aside: If all this seems fanciful, note that in the real world there are private security agencies (e.g., in gated communities)
                and binding arbitration is replacing the court system in adjudicating contract disputes (e.g., purchases of cars)


12. Interagency Conflict:
      a) What happens when the Bulldog Protection Agency charges a client of Doberman Protection Agency with a crime?              There are two possibilities:
           (1) They both reach the same verdict; the Bulldog Protection agency punishes the person, and the Doberman
                Agency stands aside (they don't protect rights violators).
           (2) They disagree. Both agencies think they are right, and they are committed to fighting it out.
      b) three possibilities:
          (1) One agency always wins. The clients of the other agency are now ill-served by their agency, so they let their
                contract expire and joining the other agency
          (2) The agencies are stronger when they fight closer to their corporate headquarters. Clients move closer to their
                agencies' headquarters or they switch agencies. They have less to do with those not in the agency, since the
                agency promises only limited support in fighting for your rights in distant places.
          (3) The agencies do battle often with no clear winner. It gets expensive to keep this up, so they agree to set up an
                appeals court, which uses reliable procedures, to adjudicate disputes between agencies about whose rights are
                violated and when.
      c) NOTE THAT THE CLIENTS NEED NOT AGREE TO ANY OF THIS. They can always opt out and become
          independents (i.e., have no agency), or join another agency, or found their own agency.

13. The Dominant Protection Agency (DPA):
      a) At this point what has arisen in a given geographical area is a dominant protection agency. This is a de facto
          near-monopoly on the use of organized coercive power.
      b) It is what economists would call a natural near-monopoly.
      c) Bottom line is that anything less than the best protective agency is virtually worthless because of the nature of the
          product–a weak agency cannot protect its clients in disputes with clients of strong agencies.


14. Is the DPA a State?
      a) Nozick says, no. We'll see why in a minute.
      b) Notice that if it were a state, it would be morally legitimate. Why? It would have arisen from a state of nature in a
          way that does not violate anyone's rights.
      c) Later, Nozick will argue that the DPA will become a state without violating anyone's rights.


15. Digression on Necessary and Sufficient Conditions:
      a) P is a necessary condition for S =df If something isn't P, then it is not an S,   OR
                 If it is S, then it is P
          example: being male is a necessary condition for being a brother
      b) Q is a sufficient condition for S =df If something is Q, then it is an S.
          example: being Miss Alabama is a sufficient condition for getting into the Miss America contest (but not a necessary
                        one)
      c) A set of singly necessary and jointly sufficient conditions defines a concept.
          example: being male and being a sibling are singly necessary and jointly sufficient conditions for defining a state.


16. Defining the State:
      a) Nozick never does it! He does make the following points:
      b) Having a monopoly on (organized?) coercive power is not a necessary condition for statehood (e.g., pockets of
          anarchy–the Klan, vigilantes exist in every state).
      c) Having a monopoly is probably a sufficient condition, but it almost never actually happens.
      d) Claiming a monopoly on coercion cannot be a sufficient condition since anyone can make the claim.
      e) Is claiming a monopoly a necessary condition for statehood? Almost. A state doesn't actually claim that it will be
          the sole user or threatener of organized force in a society. It only claims to be the sole authorizer of the use or
          threat of organized force in a society.  Compare private sector police.
      f) Implicit in this idea of being the sole authorizer of coercion is the idea that a state will punish or try to punish anyone
         who uses coercion without the state's authorization.
      g) A state claims to be the sole authorizer of the use or threat of force, and most instances of force are initiated under
          that authority.


17. Why the DPA is Not a State:
      a) It does not claim to be the sole authorizer of the use of organized coercion in a given territory
      b) It does not claim the right to punish anyone who uses force without its authorization.
      c) How independents behave among themselves is none of their affair, nor will the DPA protect clients against
          independents who are legitimately enforcing their rights.
      d) Nor would it be morally permissible for the DPA to do so. It would violate the independents' right to enforce their
         (i.e., th independents') rights against criminals who violate those rights.

18. Invisible Hand Explanations:
      a) One of the weaknesses of traditional social contract theory is that it presupposes an explicit or implicit social
          compact: This agreement is explicit (implausible), tacit (justifies anything), or hypothetical (justifies nothing). Some
          sort of agreement is supposed to justify or in some way legitimize the state.
      b) Nozick does not rely on that. He tries to show that the state would arise from a state of nature, unintentionally,
          as it were. Even though it looks like the result of some conscious plan (i.e., a contract). This involves what is called an
          'invisible hand explanation.'
      c) An example of an invisible hand explanation of money is given on p. 18. People don't need to sit down and agree
          on something (e.g., gold) as a currency. Rather, they seek to acquire a commodity which has independent value, is
          portable, divisible, and non-perishable. Gold just emerges as a currency, though not as part of any plan or design.
          Another example: the way markets organize an economy.
      d) Nozick claims to have provided an invisible hand (potential) explanation of the state:  How it could have come about
          from anarchy. No one intends it to happen but it does, anyway.
      e) So, what he would have done is to explain how a state could have arisen from a state of nature without violating rights.
      f) But what does that really show? That's the problem.

Chapter 3

19. Two Further Moves:
      a) The moves from the original position in the state of nature to the DPA are fairly straightforward but the next two
          moves are not.
      b) Stage 4: The move from the DPA to the Ultraminimal State
          Stage 5: The move from the Ultraminimal State to the Minimal State
      c) These are the hardest part of his argument against the anarchist, both for him and for us.


20. The DPA, The Ultraminimal State and the Minimal State:
      a) The DPA:
          (1) Only punishes independents who violate the rights of its clients
      b) The Ultraminimal State:
          (1) tries to maintain a monopoly on the use of force (or the authorization of the use of force) against its clients
          (2) does not provide protective services for all
          Where it differs from the DPA is that it does not allow independents to enforce their rights against clients unless and
          until the UMS determines that its client has violated an independent's rights. Then it either does the enforcing itself,
          supervises the independent or authorizes the independent to enforce his rights.
      c) The Minimal State
          (1) provides protective services for all within its territory
          (2) tries to maintain a monopoly on the authorization of the use of force within that territory.
          The Minimal State provides protective services for all at a certain level (e.g., a bargain-basement plan) even if not
          all can afford to pay for it.


21. Nozick's Problems:
      a) Why is it morally permissible for the DPA to become the UMS?
          (1) This is problematic because it is not clear where the UMS gets the authority to prohibit independents from
                enforcing their rights against clients. Where does it get the right to do this?
          (2) Or, alternatively, does it not violate the rights of independents when it prohibits them from enforcing their rights
                without authorization from the UMS?
      b) Why is it morally permissible for the UMS to become the MS?
           (1) This is problematic because of its apparently redistributive character.
           (2) If redistribution is OK here, why not elsewhere? E.g., why not redistribute income from the rich to the poor?

Digression on Moral Theory


22. Moral Philosophy and the Main Question of Political Philosophy:
      a) What morally justifies the state? or Is the state morally legitimate and if so, what kind of state is legitimate?
      b) You need a moral theory as a background against which to judge answers to these questions.
      c) Actually, you don't need a whole theory of morality (which would include a theory of intrinsic value and principles
          of right action).
      d) All you need is a theory about when it is legitmate to use or threaten force, since that is what states are all about.


23. Nozick and Moral Theory:
      a) Nozick has an interesting discussion of moral theories, not all of which is relevant to his task. The most important
          thing for him is the Libertarian Side Constraint on Coercion:

          (LSC) Each person has a right not to be coerced in his person or his property for his own benefit or for the
                     benefit of others, so long as that right is consistent with others having that right.

      b) Setting aside issues about property rights (what they are, how we get them), we can sask: Why is there this basic
          right not to be coerced? What proof or argument can Nozick offer?


24. Nozick and Kant't Second Formulation of the Categorical Imperative:
      a) Nozick provisionally takes as given Kant's Second Formulation of the Categorical Impertive:

           Act in such a way that you always treat humanity, whether in your own person or in the person
            of any other, never simply as a means, but always at the same time as an end.

      b) Now there has always been a lot of controversy about what Kant's Supreme Principle of Morality really
          means. Perhaps the (LSC) is one way of interpreting that principle. After all, if I coerce someone for his own
          benefit or for the benefit of others, that is treating him as a mere means to my ends or purposes.
      c) So, perhaps that is the relevance of Kant here.


25. Why Kant's Principle?
      a) On this question, Nozick only hints at an answer.
      b) Those hints are to be found in the two sections:
          (1) "The Experience Machine"
          (2) "What are Constraints Based On?"
      c) This discussion serves as a kind of foundation for Lomasky's argument in Persons, Rights, and the Moral
          Community.


26. Side Constraint Theories:
      a) The discussion of goal-directed theories and side constraint theories is interesting but ultimately not directly
          relevant to proving the main thing he has to prove in here, viz., the (LSC).
      b) The (LSC) is not proved, even though it is absolutely central to the main argument of the book.

End of Digression

The continuation of the story of the rise of the state from a state of nature picks up on p. 51.

27. The Anarchist's Complaint:
      a) The anarchist complains that the state is illegitimate because it violates moral side constraints when it arrogates to
          itself the right to punish and forbids others from punishing rights violators. Does it not thereby itself violate rights?
      b) Read the bottom of p. 51.


Chapter 4

28. Independents and the DPA:
      a) Recall that an agency has established a near monopoly on the use of coercive power in a geographical area (either
          by federating or by offering superior services).
      b) But it is not a state because:
          (1) it does not claim a monopoly on organized coercion
          (2) it does not force others to join   
      c) In short, there are some independents, so how are they to be dealt with?
      d) There are 4 kinds of cases to consider:
               Plaintiff              Defendant
           1. Client                 Client
           2. Client                Non-Client
           3. Non-client         Client
           4. Non-client         Non-client
      e) Cases (1) and (2) present no special problems; the agency, by its very nature, enforces clients' rights. In case (4),
          the agency just stays out of it. The real problem is with case (3).


29. The Dilemma:
      a) The agency is put in the following position: either it fails to protect its clients from wrongful mispunishment or
          overpunishment or it interferes with the independent's right to punish clients who violate the independent's rights.
      b) the obvious solution: Show that everyone, clients and independents alike, have procedural rights, the right to be
          tried by reliable procedures.
      c) If the independent were to use a reliable procedure, the agency would do nothing. If not, the agency prohibits the
          independent from taking action but it does not violate the independent's enforcement rights, since such rights do
          not cover unreliable procedures Also, by prohibiting the use of unreliable procedures, it is defending its clients'
          procedural rights.


30. The Problem:
      a) Where do procedural rights come from? Recall that there is one basic right and one derivative right, according
           to Nozick:
          (1) the basic right: the right not to be coerced for one's own benefit or the benefit of others
          (2) the derivative right: the right to enforce the basic right (this is the right to punish and the right to exact compen-
                sation)
      b) the basic right is inalienable and the derivative right is transferred to the agency.
      c) So where do procedural rights come in?


31. What Follows If Clients Have Procedural Rights?
      a) Here I read between the lines a little. Consider for a moment the situation of the independent bent on enforcing his
          rights. It is abstractly possible he might use any number of procedures, e.g., reading Tarot Cards, flipping a coin,
          consulting a Ouija board. All of these, of course, are unreliable procedures, and if clients really have procedural
          rights, the agency can prohibit the independent from using these unreliable procedures to enforce his rights.
      b) But, let's get realistic. What would independents really do? They would use what we might call self-help
          procedures, which involve either literally doing it themselves or getting their friends and family to help.
      c) Now self-help procedures are clearly unreliable, as Locke pointed out, so if clients have procedural rights, these
          procedures would be prohibited by the agency. Independents would be unable to afford reliable procedures, so they
          would be unable to enforce their rights against clients.  This would lead to further problems, but for the moment let's
          ignore that.
      d) Assuming all this is legitimate, Nozick would have justified the ultraminimal state. So the stakes are high here.
          Can he show that people (everyone–clients and non-clients) have procedural rights?
      e) To answer this we need to look at his discussion of Risk, Prohibition and Compensation.

32. Prohibition and Compensation in a Lockean Framework:
      a) On a Lockean view, the fact that people have rights means that there are boundaries around people and their
          property that should not be crossed. People are forbidden or prohibited from crossing those boundaries.
      b) But why? Why not permit boundary crossings provided that compensation is paid?  Indeed, sometimes that seems
          to be the appropriate thing to do. Suppose I come upon your cabin in the mountains and there is a huge snowstorm.
          I break in and use some of your furniture to survive. I then compensate you later. Surely, that seems justifiable. So
          why not always allow boundary crossings, provided compensation is paid? First, a definition.
      c) A person or agency prohibits an action if:
          (1) the person or agency imposes some penalty on a person for doing it
          (2) it requires compensation for it.
      d) To compensate someone fully for the consequences of an action is to make him no worse off than he would have been              had the action never been done. Explain the notion of an indifference curve


33. Why Ever Prohibit?
      a) To repeat the question, why ever prohibit an action that crosses a boundary, provided that compensation is paid?
      b) The idea of a penalty or punishment is suggestive: we want to deter these boundary crossings. But why? 3 reasons:
          (1) Some injuries are not compensable, especially mortal ones.
          (2) The benefits of forced exchanges would be unfairly divided
          (3) If boundary crossings were permitted provided compensation were paid, it would create a situation in which
               there would be widespread incompensable fear.
      c) The first of these is pretty obvious; what about the others?


34. Dividing the Benefits of Exchange:
      a) First, I'll put the point intuitively by way of an example. Suppose I live in NYC where it is expensive to keep a car.
          Suppose that the total cost of keeping a car is $20 a day, taking into account the cost of the vehicle, insurance,
          parking, registration, repairs, gasoline, depreciation, all of it. Why would we not want to allow you to take my car
          whenever I want to run some errands, provided I compensate you for it, say, by paying you $20, or if you have to
          take a cab because I have your car, the cab fare plus $20. You are indifferent between having the car available
          and having the car unavailable plus the compensation. Why not permit this? Answer: You get all the consumer
          surplus. I might be willing to pay $30 for it.  An unfair division of the benefits of exchange occurs when one party
          appropriates all of the consumer surplus.
    b) This also applies to physical boundary crossings. Suppose I am a sadist and I enjoy inflicting light punishment on you
         against your will but I compensate you afterwards at your "indifference point." Same problem here. In general, one
         problem with a policy of permitting boundary crossings provided compensation is paid is that the benefits of exchange|
         are unfairly divided.


35. Other Problems:
      a) There are other problems as well: using people as a mere means, and,
      b) Most importantly, this would create fear–not only in you but also more generally. In other words, if we have a
           system like this, i.e., one that permits boundary crossings at will provided that compensation is paid, it will create
           generalized fear.
      c) Although Nozick does not say this, the problem with fear is that it really is not compensable.

36. Why Not Always Prohibit?
      a) One reason is that some boundary crossings are inadvertent, by accident, mistake, and so forth. This would make
          life unpleasant and insecure and unfair.
      b) Well, let's restrict our attention to cases where a person knows he will or might cross a boundary. Shouldn't all
          such actions be prohibited?
      c) To see why the answer is no, consider the fact that consent opens boundaries. Suppose now that it is impossible to
          get someone's consent because of practical difficulties, e.g., one does not know whose boundary will be crossed or
          it is just practically too difficult to locate that person, though if you were able to locate him, he would consent. If all
          boundary crossings are prohibited, some mutually beneficial exchanges don't get made.


37. When Should Boundary Crossings Be Permitted?
      a) read p. 58, under 'WHY EVER PROHIBIT'. This seems too lax, since a person may be willing to permit all kinds
          of boundary crossings against himself that others would not allow against themselves.
      b) Compare hippies without a strong sense of private property.
      c) How about a "reasonable man" standard (coupled with a requirement of compensation)?
      d) So the idea is that you permit boundary crossings that do not cause fear provided compensation is paid and
          consent is too costly to negociate beforehand.
      e) Nozick is not completely satisfied with this solution because of unfairness in dividing the benefits of exchange,
          but he never makes clear if this is a really serious problem. What is the scope of this category of action?

38. The Complications of Introduced by Risk;
      a) What about actions that merely risk crossing boundaries?
      b) It would be impossible to prohibit all of them, since such boundary crossings can occur by accident or mistake
          in the course of everyday actions that everyone must do in order to get around in the world. Actions such as driving
          a car, generating electricity, etc.
      c) Prohibiting no risky actions obviously won't do. Suppose I get my jollies from playing Russian Roulette with a gun
          held to your head. There is a one in six chance you will die!
      d) The basic problem is that natural rights theories have no clear way to deal with risky actions. Nozick tries out a
          number of possibilities but most of them don't work very well without a centralized body like the state making rules
          (prohibiting actions), assessing costs, and exacting compensation.


40. First Approximation of a Compensation Principle:
      a) If an action produces no fear but risks a boundary crossing, do not prohibit the action but require compensation
          if a boundary is actually crossed.
      b) This is what happens in some ordinary tort law cases. Suppose some kids play baseball in their backyard and
          occasionally they hit the ball into a neighbor's yard; very rarely it breaks a window. Compensation is owed and the
          courts will make the kids' parents pay up. That produces no fear.


41. A Complication:
      a) Suppose an individual act of a certain sort produces no fear but if acts of that sort are generally allowed, the
          totality of those actions do produce fear.
      b) For example, if one epileptic drives, I am at increased risk of death or injury but the increase is minuscule.
          However, if all epileptics drive, the increase in risk is not minuscule.
      c) A proposal: Prohibit the activity but compensate those who are prohibited from doing the action.
          Rationale: Fear justifies the prohibition; compensation is required because the boundary crossing might not actually
          occur.
      d) The problem with this is that it seems that not all such activities need to be compensated for. E.g., suppose I like
           to drive drunk, or play Russian Roulette with your life. These can be prohibited but compensation is not required.

42. The Principle of Compensation:

     Those who are especially disadvantaged by being prohibited from doing X, where X is an activity that most
      people are otherwise permitted to do (e.g., drive a car) are to be compensated for that prohibition, where
      the amount of compensation is determined by the difference between the benefits from doing X minus its
      usual costs.

43. Implications:
      Drunk driving and Russian roulette can be forbidden and no compensation is owed. The epileptic, however, must
      be compensated perhaps by providing him with transportation and charging him what it would cost to operate an
      automobile.

44. Summary

                     Known Boundary Crossings                 Risky Acts

45. Some Applications:
      a) Zoning laws: most zoning laws would violate people's rights. Zoning laws are typically instituted to protect property
          values, or preserve the beauty, integrity, etc. of neighborhoods. The problem is that you don't own the value of your
          property?that's determined on the market. Restrictions embodied in zoning laws could be attached to deeds, as in
          fact they are in the case of restrictive convenants. There are possibilities for people to buy up or swap certain de-
          velopment rights.
      b) Pollution is often cited as a failure of capitalism or the free market, but the real difficulty is that property rights are
          incompletely defined. Firms don't have to compensate those who are the victims of pollution. There are, however,
          various ways of dealing with pollution within a free market framework.

46. A Complication:
    a) What happens if an activity produces fear but the fear is unreasonable, or not known to be reasonable or unreason-
         able (legitimate disputes)? Generating electricity by nuclear power or through a near-by dam would be an example
         of one or the other.
    b) Would it be prohibited provided compensation is paid to the owners of the plant (or to anyone who might build a
         plant) or would no compensation be required? OR would the activity be allowed provided that compensation could
         be paid to all who are affected if an incident occurs?
    c) I don't see any clear answers here, and this may suggest some limitations on the adequacy of natural rights theories.
    d) Why feared activities? I suppose it is because the fear of a boundary crossing could be considered coercive--the
         threat of force.


47. Point of All This:
      a) Recall that the point of all this is to justify the move from Stage 3 (the DPA) to Stage 4 (the Ultraminimal State)
      b) What this requires is to show that independents cannot use risky procedures to enforce their rights against clients.
          That is, it would justify procedural rights, even in a state of nature.
      c) Given my claim that independents would use only self-help procedures, this would justify the DPA in denying them
          the opportunity to enforce their rights against clients. That's the Ultraminimal State.


48. The Principle of Fairness:
      a) Early in Chapter 5, Nozick considers and rejects a different way to derive the minimal state–via the Principle of
          Fairness, due to H.L.A. Hart. Roughly, it goes as follows:

            If a number of people agree to restrict their liberty in a just, mutually advantageous cooperative
            venture, these people have the right to a simimlar acquiescence from all others who benefit.

      b) In short, people can be forcibly prohibited from free-riding on the activities of others.
      c) You can see how this might be used to justify the state. Before considering Nozick's objections to this principle,
           it is important to distinguish this attempt to justify the state from the public goods argument for the state.

49. The Public Goods Argument for the State:
      a) a public good (technical term) is defined by two conditions:
          (1) non-rivalrous consumption
          (2) non-excludability
      b) Suppose there is a public good that everyone in a community wants and everyone is willing to pay their share of
          the cost of the good. If the community is sufficiently large, each person will reason that either enough others will
          contribute to its provision or they won't. If enough others contribute, then my contribution is not needed and the funds             can be better spent elsewhere (not necessarily on myself). But if enough others don't contribute, then my contribution
          is wasted. The rational thing to do, whatever anyone else does, is to not contribute. Everyone reasons like that and the
          good is not provided, even though everyone wants it at the specified price. This might be called a ‘collective irration-
          ality.'
      c) One way to solve a public goods problem is by making non-contribution not an option. If someone or some group
          can force everyone to contribute, then everyone gets what he or she wants at a price people are willing to pay. This
          serves as a basis for arguing that the state should provide certain public goods, such as national defense, a criminal and
          civil justice system and roads.
      d) You can see how someone might argue for the existence of the state on this basis . . .
      e) Except it won't work if there are some people who don't want the good or object to the price they are required to
          pay. And, of course, in a state of nature, the anarchists don't want the good!
      f) This is where the Principle of Fairness comes in; you don't need unanimity.


50. Nozick's Response:
      a) There are two components to the Principle:
          (1) the obligation to bear your "fair share" of the cost
          (2) the enforceability of that obligation
      b) Let us assume (1) and focus on (2) for the moment. (2) does not follow from (1), since in general, the fact that I
          have an obligation to do X does not imply that anyone has a right to force me to do X. Examples: collection plate at
          church, many obligations to children or spouses; consider also cases of companies who send you stuff and then bill
          you for them.
      c) Let us turn now to (1). Consider the example of the neighborhood PA system Nozick discusses. How might the
          claim that there is an obligation here be resisted? There are two possibilities:
          (1) The benefits might not outweigh the costs for a given individual
          (2) The benefits might outweigh the costs, but just barely. There may be some other joint activity that you would
                most prefer the group to do.
          (3) You might object to the distribution of the costs. (This is my point, not Nozick's)
      d) Upshot: The fact that we are all "social products" benefitting from a variety of social institutions we have had no hand
          in creating does not create in us a free-floating obligation that society can "call in," least of all, one that can be called in
          by the state.


51. A Potential Problem for Nozick:
      a) Let us grant that a principled anarchist has no reason to accept the Principle of Fairness. But suppose someone is
          not an anarchist. Suppose he wants the good but objects to the cost or to the distribution of the cost burden. Would
          it be OK to force him to contribute?
      b) It depends on whether he wants the good at the specified price to anarchy, i.e., no good at no cost. If he does, then
          it seems more like a market exchange. So maybe the Principle of Fairness could be used to justify the state to most
          independents, but not all of them.


52. Return to Stage 4: The Move from the DPA to the UltraMinimal State:
      a) Why should the independents be prohibited from using private enforcement procedures against clients (recall that
           this is what the UMS does)?
      b) Nozick says that when they use risky procedures that cause fear, they can be prohibited from using those procedures.
          Clients have procedural rights. The justification for procedural rights comes from his discussion of Risk, Prohibition,
          and Compensation.
      c) A problem arises when only a small number of independents use unreliable procedures or a larger number use them
          only occasionally. Here's why: Each individual use of unreliable procedures creates no general incompensable fear
          but the cumulative effect does. So which to prohibit and why?


53. Confusions in Nozick:
      a) I confess I find this discussion wrong-headed on two counts. First, it might be that if even one member of the
          community is using unreliable procedures, there would be generalized fear.
      b) More importantly, I am not at all sure why he is trying to cover all the logical possibilities. His derivation of the minimal
          state makes use of empirical assumptions about how markets work throughout, so why not make some here?
      c) The main one I have made in my discussion of this is there would be no (what I call) "reliable independents" in a state
          of nature. A reliable independent is one who uses reliable procedures to enforce his or her rights.
      d) The reason for this is that reliable procedures are relatively costly to use and there is no way independents could
           afford to hire all the people, etc. so that they would use only reliable procedures.


54. Independents in a World Dominated by the DPA:
    a) Independents who wished to use only reliable procedures would have to band together and form an association so
        that they could share costs.
    b) But this would not be sustainable, since it would be at a significant market disadvantage relative to the DPA, so it would
        either die out as members join the DPA or it would become the DPA.
    c) So, in equilibrium, there would only be a few independents around, but they would be using unreliable procedures to
        enforce their rights.
    d) And they can be prohibited from doing this against clients because clients have procedural rights (see previous dis-
        cussion of risk and compensation).


55. Compensating the Independents:
      a) Recall that the Principle of Compensation requires that people who are greatly disadvantaged by a prohibition on their
          activities must be compensated. Clearly, the independents fit this description since they are not able to enforce their
          rights against clients (though they can enforce their rights against other independents). How should they be compen-
          sated? The answer is, "It depends."
      b) There are two cases to consider: In Case #1, the independent is fairly well off and would have spent some resources
           of his own enforcing his rights. In Case #2, the independent is so poor that all he would have invested in enforcing his
           rights would have been his time and effort. Let us consider each of these in turn.
      c) Case #1: The Well Off Independent:
      d) Recall that he expends resources other than time and effort enforcing his rights (some of which would be unrecover-
          able). Call the amount he would spend S. But he is disadvantaged by the prohibition and this must be made up to him.
          Call the value of that, C. So the DPA must pay him C-S. However, the problem with this is that money really cannot
          compensate him for the loss of his enforcement rights. After all, he cannot take any actions against the agency's clients,
          which would lead bad guy independents to join the agency to take advantage of him. The only way the agency could
          compensate him would be to provide him with a protection plan. But that would overcompensate him, since he would
          have spent some of his resources enforcing his rights. In effect, he would have been overcompensated. So, the agency
          has the right to exact payment from him equal to what he would have spent enforcing his rights, viz., S. Lo and behold,
          the independent has become a taxpayer!!
      e) Case #2: The Poor Independent:
          He too is prohibited from enforcing his rights and is provided with a protection plan (perhaps bargain basement) as
          compensation. But, in a state of nature, this guy had insufficient resources to devote to enforcing his rights except for
          his time and effort. So, he cannot be taxed by the agency when he is provided with a plan.

56. Justification of the Minimal State:
      a) This, then, is Nozick's justification for the Minimal State. First, the agency (call it ?the government' now) is the sole
          authorizer of the use of force in a given territory. It allows self-defense, and of course, it is not the sole user of force,
          but no one else CREDIBLY claims to be the sole authorizer of the use of organzied coercion. The CREDIBLY
          qualifier is important; notice what happens to those who challenge the state's monopoly on the authorization of
          coercive power. That's when the state gets upset.
      b) Second, there is an apparently redistributive element here in that those who are unable to afford a protection policy
          are given one for free, so to speak. But it is not really redistributive, that is, redistributive in the sense that term is
          ordinarily used. Rather, the provision of the policy is justified by the requirement to compensate those who would
          use private enforcement procedures.
      c) So,the Minimal State is a state!
      d) The UltraMiminal State is a kind of analytical waystation between the state of nature dominated by a single agency
          and the Minimal State. Morally speaking, it cannot exist. Once the agency starts to prohibit independents from
          enforcing their rights, it must become a minimal state.
      e) In the story Nozick tells, the Minimal State has arisen from a state of nature without violating anyone's rights and
          without claiming any special rights for itself. This rebuts the charge, leveled by Rothbard, that the state in intrinsically
          immoral because, by its very nature, it violates people's natural rights.


57. A Caveat: Nozick says that the Minimal State is not the sole authorizer of the use of force because he thinks there could
      be a few independents that exist in a genuine state and enforce their rights on each other. But I think that is not correct.
      They would be using self-help procedures against each other; not only might there be spillover effects against clients,
       these people could be dangerous, so the state would have to keep an eye on them.



  Return to Course Materials Page