[This article is taken from chapter 29 of The Ethics of Liberty.[1] Listen to this chapter in MP3, read by Jeff Riggenbach. The entire book is being prepared for podcast and download.]

Robert Nozick, 1938–2002

Introduction

Robert Nozick's Anarchy, State, and Utopia[2] is an "invisible hand" variant of a Lockean contractarian attempt to justify the State, or at least a minimal State confined to the functions of protection.

Beginning with a free-market anarchist state of nature, Nozick portrays the State as emerging, by an invisible hand process that violates no one's rights, first as a dominant protective agency, then to an "ultraminimal state," and then finally to a minimal state.

Before embarking on a detailed critique of the various Nozickian stages, let us consider several grave fallacies in Nozick's conception itself, each of which would in itself be sufficient to refute his attempt to justify the State.[3]

The Ahistorical State

First, despite Nozick's attempt[4] to cover his tracks, it is highly relevant to see whether Nozick's ingenious logical construction has ever indeed occurred in historical reality: namely, whether any State, or most or all States, have in fact evolved in the Nozickian manner. It is a grave defect in itself, when discussing an institution all too well grounded in historical reality, that Nozick has failed to make a single mention or reference to the history of actual States. In fact, there is no evidence whatsoever that any State was founded or developed in the Nozickian manner.

On the contrary, the historical evidence cuts precisely the other way: for every State where the facts are available originated by a process of violence, conquest, and exploitation: in short, in a manner which Nozick himself would have to admit violated individual rights. As Thomas Paine wrote in Common Sense, on the origin of kings and of the State:

could we take off the dark covering of antiquity and trace them to their first rise, we should find the first of them nothing better than the principal ruffian of some restless gang; whose savage manners or preeminence in subtilty obtained him the title of chief among plunderers; and who by increasing in power and extending his depredations, overawed the quiet and defenceless to purchase their safety by frequent contributions.[5]

Note that the "contract" involved in Paine's account was of the nature of a coerced "protection racket" rather than anything recognizable to the libertarian as a voluntary agreement.

Since Nozick's justification of existing States — provided they are or become minimal — rests on their alleged immaculate conception, and since no such State exists, then none of them can be justified, even if they should later become minimal. To go further, we can say that, at best, Nozick's model can only justify a State which indeed did develop by his invisible hand method.

Therefore, it is incumbent upon Nozick to join anarchists in calling for the abolition of all existing States, and then to sit back and wait for his alleged invisible hand to operate. The only minimal State, then, which Nozick at best can justify is one that will develop out of a future anarcho-capitalist society.

Secondly, even if an existing State had been immaculately conceived, this would still not justify its present existence. A basic fallacy is endemic to all social-contract theories of the State, namely, that any contract based on a promise is binding and enforceable. If, then, everyone — in itself of course a heroic assumption — in a state of nature surrendered all or some of his rights to a State, the social-contract theorists consider this promise to be binding forevermore.

A correct theory of contracts, however, termed by Williamson Evers the "title-transfer" theory, states that the only valid (and therefore binding) contract is one that surrenders what is, in fact, philosophically alienable, and that only specific titles to property are so alienable, so that their ownership can be ceded to someone else. While, on the contrary, other attributes of man — specifically, his self-ownership over his own will and body, and the rights to person and property which stem from that self-ownership — are "inalienable" and therefore cannot be surrendered in a binding contract.

If no one, then, can surrender his own will, his body or his rights in an enforceable contract, a fortiori he cannot surrender the persons or the rights of his posterity. This is what the Founding Fathers meant by the concept of rights as being "inalienable," or, as George Mason expressed it in his Virginia Declaration of Rights:

[A]ll men are by nature equally free and independent, and have certain inherent natural rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity.[6]

Thus, we have seen

1. that no existing State has been immaculately conceived — quite the contrary;
2. that therefore the only minimal State that could possibly be justified is one that would emerge after a free-market anarchist world had been established;
3. that therefore Nozick, on his own grounds, should become an anarchist and then wait for the Nozickian invisible hand to operate afterward; and finally
4. that even if any State had been founded immaculately, the fallacies of social-contract theory would mean that no present State, even a minimal one, could be justified.

Nozick's "Nonaggressive" State

Let us now proceed to examine the Nozickian stages, particularly the alleged necessity as well as the morality of the ways in which the various stages develop out of the preceding ones. Nozick begins by assuming that each anarchist protective agency acts morally and nonaggressively, that is, "attempts in good faith to act within the limits of Locke's law of nature."[7]

First, Nozick assumes that each protective agency would require that each of its clients renounce the right of private retaliation against aggression, by refusing to protect them against counter-retaliation.[8] Perhaps, perhaps not. This would be up to the various protection agencies, acting on the market, and is certainly not self-evident. It is certainly possible, if not probable, that they would be out-competed by other agencies that do not restrict their clients in that way.

Nozick then proceeds to discuss disputes between clients of different protection agencies. He offers three scenarios on how they might proceed. But two of these scenarios (and part of the third) involve physical battles between the agencies.

In the first place, these scenarios contradict Nozick's own assumption of good-faith, nonaggressive behavior by each of his agencies, since, in any combat, clearly at least one of the agencies would be committing aggression.

Furthermore, economically, it would be absurd to expect the protective agencies to battle each other physically; such warfare would alienate clients and be highly expensive to boot. It is absurd to think that, on the market, protective agencies would fail to agree in advance on private appeals courts or arbitrators whom they would turn to, in order to resolve any dispute. Indeed, a vital part of the protective or judicial service which a private agency or court would offer to its clients would be that it had agreements to turn disputes over to a certain appeals court or a certain arbitrator or group of arbitrators.

Let us turn then to Nozick's crucial scenario 3, in which he writes:

the two agencies … agree to resolve peacefully those cases about which they reach differing judgments. They agree to set up, and abide by the decisions of, some third judge or court to which they can turn when their respective judgments differ. (Or they might establish rules determining which agency had jurisdiction under which circumstances.)[9]

So far so good. But then there comes a giant leap: "Thus emerges a system of appeals courts and agreed upon rules…. Though different agencies operate, there is one unified federal judicial system of which they are all components." I submit that the "thus" is totally illegitimate, and that the rest is a non sequitur.[10] The fact that every protective agency will have agreements with every other to submit disputes to particular appeals courts or arbitrators does not imply "one unified federal judicial system."

On the contrary, there may well be, and probably would be, hundreds, even thousands, of arbitrators or appeals judges who would be selected, and there is no need to consider them part of one "judicial system." There is no need, for example, to envision or to establish one unified Supreme Court to decide upon disputes. Since every dispute has two and only two parties, there need be only one third party, judge, or arbitrator; there are in the United States, at the present time, for example, over 23,000 professional arbitrators, and presumably there would be many thousands more if the present government court system were to be abolished. Each one of these arbitrators could serve an appeals or arbitration function.

Nozick claims that out of anarchy there would inevitably emerge, as by an invisible hand, one dominant protection agency in each territorial area, in which "almost all the persons" in that area are included. But we have seen that his major support for that conclusion is totally invalid. Nozick's other arguments for this proposition are equally invalid. He writes, for example, that "unlike other goods that are comparatively evaluated, maximal competing protective services cannot exist."[11] Why cannot, surely a strong term?

First, because "the nature of the service brings different agencies … into violent conflict with each other" rather than just competing for customers. But we have seen that this conflict assumption is incorrect; first, on Nozick's own grounds of each agency acting non-aggressively and, second, on his own scenario 3, that each will enter into agreements with the others for peaceful settlement of disputes.

Nozick's second argument for this contention is that "since the worth of the less-than-maximal product declines disproportionately with the number who purchase the maximal product, customers will not stably settle for the lesser good, and competing companies are caught in a declining spiral." But why? Nozick is here making statements about the economics of a protection market which are totally unsupported. Why is there such an "economy of scale" in the protection business that Nozick feels will lead inevitably to a near-natural monopoly in each geographical area? This is scarcely self-evident.

On the contrary, all the facts — and here the empirical facts of contemporary and past history are again directly relevant — cut precisely the other way. There are, as was mentioned above, tens of thousands of professional arbitrators in the United States; there are also tens of thousands of lawyers and judges, and a large number of private protection agencies that supply night-watchmen, guards, etc., with no sign whatsoever of a geographical natural monopoly in any of these fields. Why then for protection agencies under anarchism?

And, if we look at approximations to anarchist court and protective systems in history, we again see a great deal of evidence of the falsity of Nozick's contention. For hundreds of years, the fairs of Champagne were the major international trade mart in Europe. A number of courts, by merchants, nobles, the Church, etc. competed for customers. Not only did no one dominant agency ever emerge, but they did not even feel the need for appeals courts.

For a thousand years, ancient Ireland, until the Cromwellian conquest, enjoyed a system of numerous jurists and schools of jurists, and numerous protection agencies, which competed within geographical areas without any one becoming dominant. After the fall of Rome, various coexisting barbarian tribes peacefully adjudicated their disputes within each area, with each tribesman coming under his own law, and with agreed-upon peaceful adjudications between these courts and laws.

Furthermore, in these days of modern technology and low-cost transportation and communication, it would be even easier to compete across geographical boundaries; the "Metropolitan," "Equitable," "Prudential" protection agencies, for example, could easily maintain branch offices over a large geographical area.

In fact, there is a far better case for insurance being a natural monopoly than protection, since a larger insurance pool would tend to reduce premiums; and yet, it is clear that there is a great deal of competit