Proto-state or protection racket?

Nozick concludes Chapter 2 (pp. 22-25) of Anarchy, State, and Utopia with a hybrid definitional-theoretical question: Is the dominant protection association a state? That is, does the postulated dominant protective association (postulated by Nozick) rise to level of a minimal or proto-state, or is such a private group just a protection racket? (Recall that, according to Nozick, a number of protection rackets will emerge in a state of nature and that these protection groups will end up carving up their own exclusive zones, with a single dominant group selling protection in each territory.) For his part, Nozick defines the state in terms of monopoly (p. 23): “A state claims a monopoly on deciding who may use force when; … furthermore it [the state] claims the right to punish all those who violate its claimed monopoly.” With this definition in mind, he then proceeds to distinguish private protection rackets from states. First, protection rackets are not true monopolies, nor is it morally legitimate for a protection racket to claim a monopoly on the use of force, even in its designated territory. Why not? Because protection rackets are selective enforcers of justice. That is, unlike a true state, which (in theory) offers everyone protection from aggression, a protection racket protects only those who pay for protection. Moreover, protection rackets are able to offer different levels of protection and sell a wide variety of protection packages, or in the words of Nozick (p. 24): “Protection and enforcement of people’s rights [are] treated as an economic good to be provided by the market, as are other important goods such as food and clothing.”

Let’s pause a moment to appreciate what Nozick has just accomplished. In the course of a single chapter, he has solved a problem that has always troubled me, one that has plagued law and political philosophy for generations: How are the commands of a state any different from the commands of a band of robbers, pirates, or bandits? After all, the commands of both “legal” and “extralegal” entities are based on force and coercion, and both types of entities exist to promote the “common good” of its members, however differently the content of such common good is defined. Alas, although we agree with Nozick’s fundamental distinction between proto-states and mere protections rackets, we are totally unpersuaded by the main claim in Chapter 2. Yes, Nozick’s sketch of a spontaneously-emerging competitive market consisting of competing protection rackets is a normatively appealing (to us) picture, but how can this purely theoretical portrait be true? To the point, how can there be a market without some meta-protection agency to enforce the contracts made between individual buyers and sellers of protection? Instead of providing an answer to these fundamental questions, Nozick simply assumes them away. Like a good economist, he simply assumes into existence a perfect world of zero transaction costs and perfect enforcement of contracts, but a good economist might make a bad philosopher. Given his formidable reputation, we fully expect Nozick to redeem himself in his subsequent chapters, so we turn to Chapter 3 next …

Image result for protection rackets

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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2 Responses to Proto-state or protection racket?

  1. Pingback: Invisible hand theories | prior probability

  2. Pingback: Law as protection racket: some remarks on the origins and evolution of group cooperation (continued) | prior probability

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