Overview of Chapter 8 of ASU

After defending his entitlement theory of justice and engaging in intellectual combat with John Rawls in Chapter 7 of Anarchy, State, and Utopia (ASU), Nozick will explore other theories of equality in Chapter 8. But before we jump into this chapter, let’s take a look at its overall structure and organization. Chapter 8 is titled “Equality, Envy, Exploitation, Etc.” and poses the following practical and philosophical question: What, if anything, should we do about income inequality? The chapter is divided into eleven separate subsections as follows:

  • Equality (pp. 232-235)
  • Equality of 0pportunity (pp. 235-238)
  • Self-esteem and envy (pp. 239-246)
  • Meaningful work (pp. 246-250)
  • Workers’ control (pp. 250-253)
  • Marxian exploitation (pp. 253-262)
  • Voluntary exchange (pp. 262-265)
  • Philanthropy (pp. 265-268)
  • Having a way over what affects you (pp. 268-271)
  • The nonneutral State (pp. 271-274)
  • How redistribution operates (pp. 274-275)

In our view, Chapter 8 is well worth reading or re-reading, as the case may be, for it is the most timely and relevant part of this book in this age of global markets and gross income inequality …

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Finders, keepers

We will proceed with Chapter 8 of ASU on Monday. In the meantime:

Hat tip: @pickover

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Nozick’s Knockout

In boxing, a knockout is any legal strike or combination thereof that renders an opponent unable to continue fighting. Keep this definition in mind, for Nozick will deliver the closest thing to a knockout by the end of Chapter 7 of Anarchy, State, and Utopia. Thus far, however, Nozick has restated Rawls’s theory of justice and has tried to refute (with limited success) the difference principle, Rawls’s main contribution to social contract theory and to political philosophy generally. The next three subsections of Chapter 7 of ASU (pp. 213-227), by contrast, restate and respond to Rawls’s critique of libertarianism. Nozick’s response to this critique will set up a one-two combination and knockout of Rawls.

But first things first. What is Rawls’s argument against libertarianism? In brief, his critique is that the set of holdings or distribution of wealth in a purely libertarian society will depend in large part on “social contingencies” and on the initial distribution of “natural talents and abilities” among the members of this society. (Rawls, 1971, p. 72.) In other words, some people will be smarter than others. Some will be more artistic than others. Some will be born into wealthy families. Etc., etc. But according to Rawls, such a state of affairs is unfair. Why? Because these social and natural contingencies are determined by accident or luck, not by merit, and are thus, in the words of Rawls, “arbitrary from a moral point of view.” (Ibid.)

After summarizing Rawls’s critique of libertarian outcomes (Nozick, 1974, pp. 213-216), Nozick devotes the next two subsections of Chapter 7 (pp. 216-227) responding to Rawls’s argument. In summary, even if it were true that differences in natural assets are random and thus morally arbitrary, Nozick shows that there is no logical connection between this claim (the notion that differences in natural assets are morally arbitrary) and the conclusion that differences in holdings arising from differences in natural assets are unjust. Rather than repeating all of Nozick’s elaborate reasoning (a tedious chore, to be sure), we will instead focus on Nozick’s best argument against Rawls’s critique of libertarian outcomes.

Here, then, is Nozick’s best argument (p. 226, emphasis added): “Whether or not people’s natural assets are arbitrary from a moral point of view, they are entitled to them, and to what flows from them.” In other words, Nozick draws a sharp distinction between justice and morality, i.e. between a person’s entitlements (what he is to entitled to do with his natural assets as a matter of justice) and his moral deserts or moral deservingness (what he is entitled to as a matter of morality). According to Nozick, regardless whether natural talents and abilities are morally arbitrary or morally deserved, people have a natural right to exploit their natural assets, “even if it’s not the case they can be said to deserve them ….” (Nozick, p. 225.)

But it is not until the last subsection of Chapter 7 (pp. 228-231) that Nozick delivers a powerful one-two combination against Rawls. First, Nozick rightly calls Rawls out for regarding the distribution of natural talents and abilities as a collective asset. Although Nozick concedes (p. 228) that “[p]eople will differ in how they view natural talents as a common asset,” collectivization is a very dangerous slippery slope. Next, Nozick speculates that Rawls’s critique of libertarianism and his theory of justice are motivated by envy. And even if he were not so motivated, Rawls commits the common fallacy of treating life as a zero-sum game. In reality, however, that some people are able to “get more” because of their natural talents does not mean that others must “get less”.

To sum up, whatever one can say in defense of Rawls, Nozick’s anti-envy and anti-collectivization arguments win the day! But then something strange happens. On the very last page of Chapter 7 (p. 231), Nozick concedes that past injustices might, in fact, justify massive schemes of redistribution under his (Nozick’s) third principle of justice: the principle of rectification. It sure sounds like the rest of ASU is going to be a wild intellectual ride! We will turn to Chapter 8 at the start of next week.

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Round 4

In the next subsection of Chapter 7 of ASU (“Macro and Micro” on pp. 204-213), Nozick compares and contrasts his own historical or “entitlement theory” of justice with Rawls’s theory along various dimensions. By way of comparison, both theories specify a starting point and a process for discovering or testing the principles of justice. For Rawls (p. 207), “any set of principles that emerges from the original position by the constrained process of unanimous agreement is the set of correct principles of justice.” Similarly, for Nozick, any distribution of wealth or set of holdings that emerges from a historical process of acquisition and transfer is just so long as the processes of acquisition and transfer are themselves just–i.e. satisfy the Lockean proviso, in the case of initial acquisitions, and are free from force and fraud, in the case of subsequent transfers.

Despite this superficial similarity, however, the theories of Nozick and Rawls are different in two ways. One is that Rawls commits the dreaded “end state fallacy,” since Rawls’s theory specifies in advance what forms of economic inequality are justified or not. Nozick’s entitlement theory, by contrast, does not specify in advance how things will turn out. Although Nozick (like Rawls) specifies a starting point and a process, Nozick’s is “an ongoing process without fixing how it is to turn out, without providing some external patterned criterion [i.e. end state] if must meet” (p. 208, emphasis in original). Another key difference between Nozick and Rawls is their willingness to test their intuitions about justice at the micro or individual level. According to Nozick (p. 205), “Rawls … proceeds as though distinct principles apply to macro or micro contexts ….” The problem with Rawls, then, is that his theory of justice focuses on the macro to the exclusion of the micro, for his theory is “to be applied only to the fundamental macrostructure of the whole society” (p. 204, emphasis added).

In addition to criticizing Rawls’s obsession with the macro, Nozick is also defending his own preferred method of reasoning, which consists mostly of “thought experiments in which we try out our principles in hypothetical microsituations” (p. 204). After all, a careful reader of ASU cannot help but notice that Nozick’s tome consists of a series of such thought experiments or microtests. Many of these hypothetical situations are far-fetched or fanciful, but all of them are illuminating. They force us to test our beliefs and intuitions and define the outer limits of our theories. Nevertheless, in defense of Rawls, one could argue that Nozick commits the opposite fallacy by focusing on the micro to the exclusion of the macro. That is, one could just as well argue that Nozick’s entitlement theory focuses on the justice of each micro transaction (whether it be an acquisition or a transfer) but is unable to condemn or constrain the significant levels of economic equality that might result in a purely libertarian society.

Lastly, Nozick implies that Rawls’s theory of justice is indeterminate. Using simple algebra (pp. 210-211), Nozick generates alternative theories of equality–theories that require higher levels of economic equality than Rawls’s difference principle. In addition, Nozick considers the possibility of “iterated original positions” (p. 212) in which opposing principles of justice are generated depending on the number and timing of these iterations. So, who wins this round? Like a pugnacious boxer landing a series of jabs against a worthy opponent, Nozick makes a number of good points but fails to deliver a knockout blow. Yes, Rawls commits the end state fallacy, but one could just as well criticize Nozick for ignoring end states altogether. Yes, Rawls’s theory might be indeterminate, but so might Nozick’s, especially the problems generated by the Lockean proviso. We therefore score this round a draw.

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Nozick and Rawls: round 3

We have re-imagined Nozick’s extended review of Rawls in the second part of Chapter 7 of ASU as an intellectual bout involving a series of rounds. We scored Round 1 for Rawls and Round 2 a draw. What about round 3? Nozick delivers a devastating blow to all theories of distributive justice in the fourth subsection of the second part of Chapter 7 (pp. 198-204), but as we shall explain below, this fierce blow is not enough to knock Rawls out.

To borrow Nozick’s terminology, the main problem with Rawls–and with all theories of distributive justice, for that matter–is that he focuses on end-states instead of real-world or historical processes. That is to say, such theories assume there will be an economic pie worth dividing at time Tn+1, when, in reality, the overall size of the pie will depend on the rules of distribution chosen at time Tn. Rawls’s theory of justice is especially vulnerable to this “end-state” fallacy. In Nozick’s memorable phrasing (p. 199), people in the original position “will treat anything to be distributed as manna from heaven.” But of course, the manna-from-heaven model is wrong. Wealth and prosperity do not fall from the sky. Goods and services must be produced by someone, and the amount of production will depend on the principles of distributive justice agreed to in the original position.

Nevertheless, although Nozick’s critique of the end state fallacy is a strong one, it is not sufficient to deliver a knockout punch, since it might be possible, in theory, to identify a different set distributive principles that maximize production and minimize economic inequality. But does such an optimal set of rules really exist? We are skeptical, so we will award Round 3 to Nozick. We will discuss the next subsection of Chapter 7 (“Macro and Micro”) in our next blog post.

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Nozick v. Rawls: round 2

Thus far, Nozick has considered two possible extremes: an individualistic or Hobbesian society in which persons do not cooperate with each other (no cooperation), and a Rousseauian or Panglossian society in which everyone cooperates for the greater good (general cooperation). In the next subsection of the second part of Chapter 7 (pp. 189-197), Nozick makes two additional moves. First, he presents a third level of cooperation: intragroup or limited cooperation. Next, he uses this possibility of intragroup cooperation to turn Rawls’s theory of justice on its head.

To appreciate Nozick’s critique of Rawls, let’s revisit the latter’s two principles of justice. According to Rawls, a society is just if everyone is assigned equal rights and duties and if the least advantaged members of society are materially better off in that society than they would be in any other type of society. (Cf. image below by Gavin Nicholson.) According to Nozick, this second principle–the difference principle–invites us to divide society into broad groups: (1) losers, i.e. the least-advantaged or worst-off members of society, and (2) winners, who are “better endowed or more fortunate in their social position.” (Rawls, 1971, p. 15.)

The division of society into these two broad groups also opens up the possibility of limited or intragroup cooperation, or in the words of Nozick (p. 193): “… we [can] imagine less extensive schemes of partitioned social cooperation in which the better endowed cooperate only among themselves and the worse endowed cooperate only among themselves, with no cross-cooperation.” In short, winners cooperate with other winners; losers cooperate with other losers. (As an aside, the terms winners and losers are my own, not Nozick’s or Rawls’s. I will use these simplifying terms to convey the essence of Nozick’s critique of Rawls.)

Here is where Nozick turns Rawls’s theory of justice on its head. For Rawls, if you want to live in a just society, the winners must somehow compensate the losers in exchange for the losers’ cooperation. Nozick, however, turns this formulation on its head. In particular, he wonders whether it is the losers who must compensate the winners! Why? Because as long as intragroup or limited cooperation is a viable option for the winners, it is the losers who benefit more from a world of general cooperation than the winners do. Or to put it bluntly, as Nozick does (p. 194, emphasis in original): “… it is difficult to avoid concluding that the less well endowed gain more than the better endowed do from the scheme of general cooperation.”

To the extent this premise is true (i.e. the fact that the losers benefit more than the winners from a system of general cooperation), Nozick wins round 2. But Nozick fails to consider a fourth possibility. In place of no cooperation, limited cooperation, and general cooperation, there is also the possibility of violence and collusion by the losers against the winners, and it is this possibility that keeps Rawls’s theory alive. (We thus score round 2 a draw.) Nevertheless, Nozick presents yet another critique of Rawls in the next subsection of Chapter 7 (“The Original Position and End-Result Principles”). We will explore that subsection in our next blog post.

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Rawls versus Nozick: round 1

Nozick begins Section 2 of Chapter 7 by presenting John Rawls’s influential theory of distributive justice. (If you are not familiar with Rawls’s work or need a refresher, check out this summary here, via Larry Solum’s Legal Theory Blog.) By way of introduction (p. 183), he tells us right off the bat that Rawls’s theory is “powerful, deep, subtle, wide-ranging, [and] systematic” but that he (Nozick) will focus on his disagreements with Rawls. Next, Nozick draws a sharp contrast between two ideal types (in the Weberian sense) of societies: (1) no cooperation and (2) general cooperation.

In one ideal type of society there is absolutely no cooperation among its members (p. 184): “Let us imagine n individuals who do not cooperate together and who each live solely by their own efforts.” This Hobbesian or individualistic society will produce a collective payoff of “S”, where S is the sum total of goods and services produced by its individual members. In such a Hobbesian society there is no need for a sophisticated theory of distributive justice, since each person simply receives “what he gets unaided by his own efforts.” (Nozick, 1974, p. 185.) The other ideal type of society, by contrast, is one of widespread and general cooperation: everyone cooperates with each other for the greater good or mutual advantage of all members of the society. By cooperating with each other, this idyllic society thus produces a much larger collective payoff of “T”, where T is the sum total of goods and services collectively produced.

To his credit, Nozick concedes that T > S. In other words, a cooperative society will always produce far more goods and services than an individualistic society. But a cooperative society’s material abundance generates a new problem: how are the spoils to be divided among its members? Here, Nozick makes the following brilliant insight and identifies a huge blind spot in Rawls’s theory of justice: whatever theory of distributive justice we prefer (Rawlsian, libertarian, etc.), should we apply our theory to T or just to T – S?

As Nozick notes (p. 184), Rawls does not distinguish between T and T – S. Instead, Rawls assumes that the entirety of T is up for distributive grabs! Perhaps such an assumption would be justified if no individual’s contribution to the joint social payoff T can be isolated or disentangled. Yet according to Nozick, Rawls’s own theory of justice does, in fact, distinguish between winners and losers (p. 188): “For Rawls goes out of his way to argue that inequalities [of wealth] are justified if they serve to raise the position of the worst-off group in the society.” Of course, no one knows the identities of the winners and losers in Rawls’s hypothetical original position, when the principles of distributive justice are negotiated from behind a veil of ignorance, but as Nozick notes, the fact remains that once the veil of ignorance is lifted, there will be winners and losers.

For our part, we would award round 1 to Rawls, not to Nozick, because in reality, S will be so small as to approach zero. In a purely individualistic or Hobbesian society with zero cooperation among its members, the best each person could hope for is bare subsistence. Nevertheless, Nozick will introduce a third type of society in the next subsection of Chapter 7 of ASU (“Terms of Cooperation and the Difference Principle”), one involving limited cooperation. We will review this third possibility in our next blog post.

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