public choice volume 23 issue 1 1975 [doi 10.1007%2fbf01718099] james m. buchanan -- utopia, the...

8/11/2019 Public Choice Volume 23 issue 1 1975 [doi 10.1007%2Fbf01718099] James M. Buchanan -- Utopia, the minimal state, and entitlement (1).pdf

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B o o k R e v i e w s

U T O P IA T H E M I N I M A LS T AT E A N D E N T IT L E M E N T

J a m e s M . B u c h a n a n k

Ro b e r t No z i c k ' s i mp o r t a n t b o o k ,Anarchy State and Utopiat r ea t s th reem ajo r top ics tha t a re super f ic ia lly d i s t inc t bu t c lose ly re la ted a t a m orefundam enta l l eve l o f ana lys is . In the i r o rde r o f p resen ta t ion , these a re (1 ) the m ora ll eg i timacy o f the min ima l s t a te and the m ora l i l leg i t imacy o f any o the r s ta te , (2 )the en t i t l em en t theo ry o f d i s t ribu t ive jus t i ce , and (3 ) a f ram ew ork fo r Utop ia . Ishall d iscuss these top ics in th e ord er of the appeal of N ozick 's a rgum ent to me,tha t is , in the orde r (3) , 1) , and (2) . His d iscuss ion of a u to pia n f ram ew ork isfamil iar, a t t rac t ive , and h op eful ly convincing. Despi te the poss ib i l ity o f iden t i fy ing

im po r tan t gaps in th e ana lys is , I can accep t m uch o f the a rgum ent fo r the min ima ls ta te . Bu t I f ind No z ick ' s en t i t l em en t th eory o f jus t i ce to be unconv inc ing .

A Libertarian Fra me wo rk fo r Utopia

Econo m is t s wi ll recogn ize No z ick ' s f r am ewo rk fo r Utop ia a s the wor ld o fc o mp e t i t i v eclu s (a ssoc ia t ions ) , wi th vo lun ta ry en t ry and ex i t . The Tieb ou t theoryof loca l governm ent and the re la ted theory o f c lubs were in i ti a lly ana lyzed in t e rmsof the i r e ff ic iency-genera t ing a t t r ibu tes , and m os t o f the subsequen t d i scussion hasbeen wi th in th is se t t ing (see Tie bo ut , and Buch anan 1965 ) . Denn is M uel ler has also

ca l l ed a t t en t ion to the equ i tT aspect s o f these mode l s , a spec t s tha t econom is t s havela rge ly neg lec ted . Noz ick ' s con t r ibu t ion he re l i e s in sh i f t ing the ana lys i s o fc o mp e t i t i v e clu s to the mos t fundam enta l r ea lm o f d iscourse , the com para t iveevaluat ion o f idea l ized socia l orders.

*This is a reviewarticle of Robert N ozick,Anarchy State and Utopia(New York: BasicBooks, 1974). I am indebted to my colleagues, Nicolaus Tideman, Gordon T ullock , andRichard Wagner for helpful com m ents.


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Nozick asks the reade r to d ream fo r h im se l f an idea l wor ld , cons t ra ined on lyby the recogn i t ion th a t o the r men , r eal and imag ined , can d ream the i r own wor lds.Th is ru les ou t the se l f- in te res ted t em pta t io n to inven t a Utop ia w here o the r s bend

to the dream er 's wi ll . In th is con cep tual se t t ing , No zick describes a wo r ld in wh icheach pe rson holds m em bership in th a t c lub which m ost sa tisf ies h is desi res, secur inga n e t va lue f rom h i s mem bersh ip tha t is a t l eas t equa l to the va lue o f h i sc o n t r i b u t i o n t o o t h e r m e mb e r s . No z i ck d o e s n o t , a n d s h o u l d n o t , l a y d o wncons t ra in t s o n the l imi ts o f c lub ac t ion , an d h i s mode l a l lows fo r wide ly d ivergen tranges of ac t iv i t ies . So long as persons m ay v oluntar i ly em igra te and form new c lubsor, i f permit ted , jo in o ther exis t ing c lubs , there are no moral a rguments agains t thepar t icular ac t iv i t ies of any grou p. In th is analys is , and par t icular ly as he mov es f romthe idea li zed to the rea l wor ld , N oz ick does n o t fu l ly cons ide r p rob lem s ra ised by

the de f in i t ion o f righ ts o f m emb ers , by the poss ib le absence o f e ffec tiveen t rep reneursh ip , by the p resence o f sca le econ om ies o r d i seconomies inc lud ingth resho ld l imi ts an d t r ansact ions cos t s , by the p o ten t i a l fo r in te rpe r sona ld i sc rimina t ion . He acknowledges the incom ple teness o f h is m ode l , however, and h i sd i scussion l ends i t se l f adm irab ly to e labora t ion and ex tens ion b y m ore spec ia l izedscholars.

T h e i n i m a l S t a t e

These c lubs are not s ta te s , in No zick 's usage , and they are , a long wi th the i rind iv idual m embers , p resumab ly sub jec t to the cons t ra in t s o f the m in ima l s t atewh ich is exhaus t ive ly d iscussed earl ie r in the bo ok . No zick 's in i t ia l objec t ive is there fu ta t ion o f the ana rch is t s ' c l aim tha t any s ta te is imm ora l . He t ri e s to show tha tan en t i ty w i th the requ i red p roper t i e s o f a s t a te wi ll emerge spon taneo us ly f rom asequence o f mo ra l ly accep tab le ac t ions b y pe r sons . N oz ick p laces emphas i s on th i sinvis ib le-hand expla nat io n o f the s ta te , an d he speci f ica l ly in t rod uce s the analoguet o t h e s p o n t a n e o u s c o o r d i n a t io n o f t h e ma r k e t .

The s t a rt ing po in t i s Lock e ' s s ta te o f na tu re , in which each pe rson has ce r ta inna tu ra l r igh t s (m ore on th i s be low) . An archy cann o t p reva il because each pe r sonwill r ecogn ize tha t some wi ll t ry to v io la te the r igh t s o f o the r s . En fo rce m ent andpu nish m ent wi ll be necessary, an d specia lists in these tasks wi l l emerge . Indiv idualswi ll purchase th e services o f protec t ive associa t ions , and, in the ordin ary course ofth ings , one a ssoc ia t ion wi ll com e to a do minan t , b u t no t exc lus ive , pos i t ion in thecom m uni ty. T o th is po in t , the re i s no p rob lem . Noz ick ' s con jec tu ra l h i s to ry isessent ia l ly a pos i t ive model of ra t ional indiv idual behavior. The next c r i t ica l s tep ,however, is the de r iva t ion o f exc lus iv i ty fo r on e p ro tec t ive a ssoc ia t ion , even in theabsence o f vo lun ta ry purchase o f i t s se rv ices by a l l pe r sons in the communi ty. Totake th i s s t ep , Noz ick swi tches to an exp l ic i t ly normat ive mode l and invokesc r i te r i a o f m ora l i ty to eva lua te behav io r. Th rough a ve ry com plex a rgum ent whichinvolves the r isks associa ted wi th a l lowing indepe nd ents to punish c l ients of theprote c t ive agency, ri sks to a ll c l ients and n ot on ly to those who are gui l ty, No zickjus t if i e s the p roh ib i t ion oF indepen den ts ' r igh t s to pun i sh on a l leged ly mo ra lg rounds . B u t , th is p roh ib i t ion , in i t se lf , wo u ld v io la te the na tu ra l r igh ts o f the


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i n d e p e n d e n ts ; h e n c e t h e y mu s t b e c o m p e n s a t e d wh i c h ma y, in t u r n , re q u ir e t h a tthe agency t ax i t s own c l i en t s . The compensa t ion wi l l no rmal ly t ake the fo rm ofoffers to provide the pro tec t ive services o the agency to n oncl ien ts a t be low-cost

p r i c e sThe la s t pa r t o f the a rgum ent i s no t congen ia l to the pub l ic -cho ice econom is t ,

who i s no t l ike ly to be p r imar i ly in te res ted in mora l i ty, wh ich mus t be recogn izedas No z ick ' s p r inc ipa l dom ain . T he d i scuss ion does expose the con t rac ta r i anpresuppos i t ions o f the wh o le pub l ic -cho ice f ramew ork . In the l a t t e r, the l eg i timacyof co l l ec t ive ac t ion i s de r ived f rom vo lun ta ry ag reement , f rom con t rac t amongind iv idua l s wi th de f ined r igh t s. T he ins t i tu t ion o f f r ee and vo lun ta ry exchange isgenera l ized to suggest con trac tu al or ig ins o f col lec t ive ac t ion . An d even i f th isaspec t is no t emphas ized , m ora l l eg i t imacy is the reb y accorded to those ac tiv it ie s

o f co ll ec tiv i ti e s tha t em bo dy obse rved ag reement on the pa r t o f a ll pe r sons in theme mb e r s h i p .

M tho ug h he does no t d iscuss the po in t exp l ic i t ly, Noz ick p resum ably re jec tscon t rac ta r i an exp lana t ions o f the s t a te on the g rounds tha t these become apo log iesfo r coe rc ion . And , to Noz ick , co e rc ion i s the p r imary a t t r ibu te o f the s ta te . Thecon t rac ta r i an i s on admi t t ed ly weak g round when he uses h i s c r i t e r i a to eva lua teex i st ing ins t i tu t ions , wh ich dem ons t rab ly em bod y coe rc ion , on the a s i fp resum pt ion o f con t rac tu a l o rig ins. Th i s is no tab ly the case wh en th e a rgum ent i sno t in fo rm ed b y a ca tegorica l d i s t inc t ion be tw een ,the cons t i tu t iona l and the

pos tco ns t i tu t iona l s tages o ag reement , a d i s t inc t ion tha t I have repea ted ly u rged onfe l low soc ia l ph ilosophers . No z ick does no t seem cogn izan t o f th i s d i s tinc t ion ,especia lly wh en he d iscusses Ra M s' poss ib le response to cri t ic isms of the d i rec t lyred i s tr ibu t ive measures d ic ta ted by Rawls ian p recep t s o f ju s t i ce . RaM s ' poss ib lea rgumen t to the e ffec t tha t these p recep t s a re des igned to b e app l icab le a t themacro l eve l o f s t ruc tu re and , the re fo re , tha tmicro l eve l ob jec tions a re unfou nded ,is he ld to be inval id by N ozick . While the Rawls ian m acro-m icro te rm ino log y ish igh ly mis lead ing, the re is no incons i s t ency whe n the d i s t inc t ion is unde rs tood int h e c o n s t i t u t i o n a l - p o s t c o n s t i t u t i o n a l c o n t e x t . Co n t r a c t u a l a g r e e me n t ma y b ereached on ru le s tha t ope ra te in subsequen t pe r iods so a s to embody apparen tcoe rc ion .

The ntitlement Theory of Justice

In Pa r t I I o f the bo ok , N oz ick is conce rned wi th de fense o f the m in ima l s t a teagainst a ll a rgum ents for extens io n, hold ing tha t a ll ex tens io ns v io la te the na tura lr ights o f persons . H is analys is is , howe ver, devo ted a lmo st exclus ive ly to th e s ta te 'sposs ib le ro le in redis t r ibu t ion , wh ich is, o f course , the m ost d i ff icul t of a llex tens ions to de fend . No z ick s imply leaves ou t o f acco un t th e p rov i s ion o f pub l ic

goods (Musgrave's a l loca t ion b ranch) , the eco no m ic theo ry o f the s t a te , wh ichmay be con t rac tua l ly de r ived . He does so , p resumably, on the an t i con t rac ta r i angrounds no ted above , a l though the poss ib le benef i ts to be rea l ized f rom jo in t o rcoopera t ive ven tu res t end to be n eg lec ted th ro ug ho u t the ana lysis .

Noz ick p resen t s an en t i t l em en t th eo ry o f d i s t ribu t ive jus t i ce , wh ich s t a te stha t any d i s t r ibu t ion o f ho ld ings is ju s t i f i t has been acq u i red jus t ly. T heprocess o f


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acqu is i tion and t rans fe r o f ho ld ings beco me s the cen t ra l focus o f a t t en t ion an d no tthe pa r t i cu la r cha rac te r is t ic s o f any d i s t ribu t ion . I sha re Noz ick ' s c r it ic i sm o f wh a the ca l ls t im e-s l ice pr inc ip les o f jus t ice , pr inc ip les wh ose cr ite r ia a re drawn fr om

end re su l t s indep enden t ly o f p rocess . On the o the r hand , N oz ick ' s own p r inc ip le o fen t i t l emen t seems to m e to be op en to com parab le c r it i c ism because i t, too , looksa t an ex i s ten t d i s t r ibu t ion an d then app l ie s h i s to r ica l c r i t e ria to de te rm ine i ts mora la c c e p ta b i li ty. B u t w h y is a y o u n g K e n n e d y o r R o c k e f e l le r e n t i t l e d t o a nin h e ri ta n c e m e r e ly b e ca u s e i t w a s v o lu n t a r il y b e q u e a th e d t o h im ? 1 W h a t n a tu r a lt igh t i s t ake n f rom h im whe n such t rans fe r s a re l imi ted? And w hy does i t m a t te ra t al l wh e the r the p ro pe r ty so beque a thed was acqu i red ju s t ly o r un jus tly? AsBernard Wil l iams noted in h is ear l ie r rev iewTimes Literary Supplement,17J a n u a r y t 9 7 5 ) , N o z i c k ' s m o r a l e v a lu a ti o n o f p r o c e ss w o u ld s u gg es t t h a t m o s t o f

Am er ica p rop e r ly be longs to the Ind ians (pe rhaps Mar lon Brando has som eth ingafter all).

Th is so r t o f ques t ion exposes the w eak l ink in No z ick ' s who le log ica ls t ruc tu re , h i s de fense o f the s ta r t ing po in t in Loc ke ' s s ta te o f na tu re , where pe rson sa re de f ined wi th c la ims to ce r ta in ' na tu ra l r igh t s , bo th wi th re spec t to phys ica lob jec t s and to o the r pe rsons . No z ick ' s e ffo r t s in th is r e spec t are no more success fu lt h a n t h o s e o f Mu r r ay R o th b a r d a n d D ax 4d F r ie d m a n .

Why mus t a s ta r t ing po in t be de f ined a t a l l ? One u l t ima te pu rpose may beo f loca t ing som e bas is fo r eva lua ting the soc ia l o rde r tha t we obse rve . In a ve ry rea l

sense, the s ta r t ing p oin t is a lways thestatus quo,a n d p r o p o s a l s f o r im p r o v e m e n tmus t be in fo rmed by th i s ex i s ten t ia l r ea l i ty. Concep tua l o r ig ins a re he lp fu l ,however, to the ex ten t tha t they a id in the eva lua t ion . I t w i l l be use fu l to ou t l ineth ree recen t u sages o f concep tua l o r ig ins o f soc ia l o rde r. These a re (1 ) Noz ick ' ss ta te o f na tu re de f ined in Lockean te rms where each pe rson has ce r ta in na tu ra lr igh ts, (2 ) the o r ig ina l po s i t ion pos i ted by Jo hn RaM s, in wh ich pe rsons pu t onthe ve i l o f ignoran ce . and (3) the na tu ra l equ i l ib r ium in Ho bbes ian ana rchy,which I have used as a bas is for ana lys is (Buch anan, 1975) .

t f d i s tr ibu tive ju s t i ce is to b e app l ied to poss ib le imp u ta t ion s o f ho ld ings on lyin t e rms o f the p rocess th roug h wh ich these imp u ta t ions have bee n c rea ted o r haveevolved , and i f the m ora l accep tabi l i ty o f th is process is the u l t im ate tes t , i tbecom es e ssen tia l tha t som e m ora l ly ju s t i fi ab le s ta r ting po in t b e desc r ibed . Th is isNo z ick ' s schem ata , wi th Lo cke ' s s ta te o f na tu re in wh ich pe rson s possess na tu ra l@ t s a ssuming the cen t ra l ro le .

I f , by contras t , c r i te r ia for the jus t ice or in jus t ice of soc ia l a r rangements a rede r ived f rom the con t rac tua l p rocess th rough .wh ich these a r rangem en ts have beenchosen , o r migh t have been ch osen , the o r igin mu s t be de f ined in such a way as toma ke gene ra l ag reem en t poss ib le . I f ag reem en t i s to emerge f ro m se lf - in te re s t,ind iv iduals ' ro les can no t be ident i f iab le . (We agree on fa i r ru les fo r a gam e on lyin *he se t t ing in wh ich ou r ow n pos i tions a re unce r ta in .) Th is i s the pu rpo se o f

1This is admittedly an extreme example with perhaps unfair emotional overstones.Nozick's argum ent becom es much more pesuasive if it could, someho w, be limited to apply tothe distribution o f earnings based on relative e/tort. But it is precisely the extrem e examplesthat m ake the m oral acceptance of the entitlement theory so difficult.


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RaMs ' o r ig ina l pos i t ion . Al though ambigu i t i e s in RaMs ' p resen ta t ion mus t beacknowledged , Noz ick ' s c r i t i c i sm of the Rawls ian p r inc ip les on the g rounds tha tthese a re de r ived f rom end- resu l t no rms seems to me to be misp laced .

( Un f o r t u n a t e l y, m a n y o f t h e i n t e r p r e ta t i o n s o f Ra M s ' p r i n ci p le s d o t r e a t t h es es t r ic t ly as end-resul t norm s.)

F i n a ll y, i f th e p u r p o s e is n o t t h a t o f ma k i n g mo r a l j u d g me n t s a b o u t t h eexis t ing socia l order, bu t ins tead is tha t of seeking the bas is fo rm utual ly-ad vantag eous changes in the socio- tegat -poli t ica l s t ruc ture o f socie ty, i t i she lp fu l to th ink o f concep tua l o r ig ins in which men a re obse rved to be unequa l inthe d i s t r ibu t ion o f endow men ts . In th is con tex t . I have foun d the na tu ra lequ i l ib r ium in a Hobbes ian ra the r than a Locke an sta te o f na tu re to o ffe rprod uct iv e insights . In the form er, rights are no t def ined, and indiv iduals m ay di ffer

in s t rengths and abi l it ies. Th e protec t ive s ta te tha t emerges f rom the bas iccons t i tu t iona l con t rac t in th is se t t ing need no t i t se l f by H obbes ian . In myder iva t ion , th is s ta te i s similar to the m inimal s ta te desc r ibed by No zick . In m yanalys is , how ever, al l persons are brou gh t in to the prot ec t iv e um brel la , a re bro ug htunder l aw and a re sub jec ted to pun i sh m ent o n v io la t ion o f l aw, because they re ta in

n o r i g h t s b y r e ma i n i n g o u t s i d e t h e c o n t r a c t . My c o n t r a c t a r i a n mo d e l d o e s n o t ,however, a l low the s t a te to be c losed o ff a t these l imi t s . I f con t rac tua l ag reementsemerge fo r the p rov i s ion o f jo in t ly -cons um ed pub l ic goods , the re m ay be a ro le fo ra p roduc t ive a s we l l a s fo r a p ro tec t ive s t a te . These need no t , however, have

com m on boundar ie s , and the des i red p rov i s ion o f pub l ic goods may be o rgan izedthrough c lubs or associa t ions ( local governmenta l uni ts ) among which migra t ion isposs ib le. A s ide f rom u t i l i ty in te rd epend ence , how ever, d i rec t r ed i s tr ibu t ive ac t ion i sno t c oncep tua l ly possib le wi th in the s t r i c t con t rac ta r i an f ramew ork i f a t t en t ion isconf ined to the pos t -cons t i tu t iona l l eve l . However, a t the cons t i tu t iona l s t age ,where ind iv idua l income and wea l th pos i t ions a re no t known, s t ruc tu ra la r rangements m ay be ag reed upo n tha t wi ll a l low fo r apparen t r ed i s t r ibu t ion a t thepos tco ns t i tu t iona l s tage (Buchanan and Tu l lock) . In th i s r e spec t , m y ownder iva t ion can be m ade cons i s t en t wi th the RaM sian p rocess , a lthough no t w i thpar t icular pr inc ip les .

Noz ick ' s w ho l ly d i ffe ren t app roach fo rces me to acknowledge the basicweakness in the cons t rac ta r i an approach , n o te d above . The re is a fundam enta ld i ffe rence be tw een those ins t i tu t ions em bod y ing apparen t co e rc ion tha t may beconce p tua l ly l eg i t ima t ized as hav ing em erged f rom con t rac tu a l ag reemen t and thoseins t i tu t ions , again em body ing apparen t coe rc ion , tha t have been obse rved to emergef rom ac tua l ag reement . And , o f course , the l a t t e r a re r a re indeed . None the less , Ishou ld s ti ll a rgue tha t the co ntrac tar ian appro ach does genera te cr i te r ia tha td i squa li fy ce r ta in in t rus ions on ind iv idua l l ibe r ty. Co u ld we have reachedagreem ent? seems to me to be a more appea l ing in te l lec tua l ques t ion and a m ored i scr imina ting ins t rume nt fo r eva lua t ion than d id th i s v io la te som eone ' s na tu ra lr igh t s? And su re ly can we reach ag reem ent? o ffe r s a mo re sa t i s fac to ry p ro pec tfo r ach iev ing mean ingfu l change than w ha t do we have the righ t to d o?Agreem ent is ope ra t iona l ly t e s tab le ; men f igh t ove r d ispu tes abo u t r igh ts .


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To es tab li sh mo ra l ly leg i t ima te c la ims to r igh t s, Noz ick would have us loo k a tthe p rocess o f acqu i s i t ion . In a w or ld w here the min ima l s t a te ex is ts , and w here i t sown l imi t s a re wide ly accep ted , th i s migh t be a mean ingfu l approach . Bu t why

shou ld ag reement em erge wh en the c laims tha t seem jus t i f i ed by N oz ick ' s p rocessconf l i c t wi th ind iv idual r igh t s tha t seem to be em bod ied in the de mo cra t i c f ranch i seof the supramin imal s t a te? How can Noz ick expec t h i s a rgumen t fo r the m in ima ls ta te t o b e convincing unt i l and unless he f i rs t unravels, a lso throu gh ag reem ent , thema z e o f c o n f li c ti n g p u b l i c e n t i t le m e n t s t h a t me mb e r sh i p in t h e mo d e r n s t at eseems to carry wi th i t?

Th e m ul t ip l ic i ty o f conf l i c t ing c la ims shou ld no t be ove remphas ized . Wi th inl imi t s , the soc ia l p rocess remains o rde r ly, and the reb y reasonab ly p rod uc t ive . H adNo z i c k g r o u n d e d h is e n t i t le m e n t t h e o r y o f .r ig h t s , n o t o n n o r ms o f j u s t ic e b u t o n

those o f p roduc t ive soc ia l o rde r, hi s who le ana lysi s wou ld have been mo re read i lyacceptable . I f men can agree on r ights , the problem of socia l order i s la rgelyreso lved . I am no t conv inced tha t Noz ick ' s a rgument does much toward secur ingsuch ag reement . An d i f I , who sha re so m any o f Noz ick ' s l ibe r ta r i anpresuppos i t ions , am no t pe r suaded , h ow can he expec t to f a re wi th h is pee r s in theCam bridge (Massachusetts) intel le ctua l estab lishm ent?

R E F E R E N C E S

Bu c h a n an , J a me s M. An Ec o n o m i c Th e o r y o f C l u b s .Economica 3 2 ( F e b r u a r y1965), 1-14.

, and Tu l lock , Gordon . TheCalculus of Consent.An n A rbor : Un ive rsi ty o fMichigan Press, 1962.

The Limi ts o Liberty: Between Anarchy and Leviathan.Chicago:Un ivers i ty o f Chicago Press , 1975.

Fr iedman, David . TheMachinery o f Freedom.New York : Harpe r, 1973 .Noz ick , Rober t .Ana rchy State and Utopia.New York: Basic Books , 1974.MueUer, Denn is . Ach iev ing the Jus t P o l i ty .Am erican Econo mic Review64 (May

1974) , 147-152.Rawls , Jo hn .A The ory o f Justice.Cam bridge: H arvard Univers i ty Press , 1971.Rothbard , Mur ray.For a New Liberty.N ew Yo rk: Macmi/ lan , 1974.Ti e b o u t , C . M. A P u r e Th e o r y o f Lo c a l Go v e r n me n t Ex p e n d i t u r e .Journal o f

Polit ical Ec on om y6 4 ( Oc t o b e r 1 9 5 6 ) , 4 1 6 - 4 2 4 .

public choice volume 23 issue 1 1975 [doi 10.1007%2fbf01718099] james m. buchanan -- utopia, the...

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