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Nozick and Capitalism

Capitalism, an economic system which most of the means of production are

privately owned and products and income are arranged through a free market

mechanism, is mostly criticized for the inequalities it generates and most capitalist

states nowadays have adopted various degree of modification to capitalism to reduce

the inequalities under capitalist system. However, theorists like Robert Nozick argue

such inequalities, regardless how huge it may be, are morally justifiable and most

attempts trying to alleviate the inequalities by making people end up in certain states

are infringements to the inviolable rights of individuals. In Anarchy, State, and Utopia

(1974), Nozick argues the holdings of one are just if the principle of justice in

acquisition, transfer and rectification are satisfied (ibid., p.151). In this paper, I would

first show that Nozick’s entitlement theory supports a pure form of capitalism; and in

the second part of the paper, I would argue coercion would not cease in the minimal

state following entitlement theory and his entitlement theory does not sufficiently

fulfill the demands of its moral ground.

Entitlement Theory and Capitalism

Nozick’s entitlement theory is historical but not end-state nor patterned for the

justice of distribution in entitlement theory “depends upon how it came about” (ibid.,

p.153) but is not determined by “who ends up with what” (ibid., 154) nor any specific
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pattern. Individuals are entitled to their holdings if their possessions are come from a

just acquisition and a just transfer 1, and a just distribution is achieved when every

individual is entitled to their holdings, regardless how great the inequality of holdings

different individuals would end up with. The entitlement theory would support a pure

form of capitalism in two ways.

First of all, Nozick’s principle of justice in acquisition would support the means

of production should be private owned. The moral foundation of the entitlement

theory is the one similar to the Kantian Morality that human is “being with the

capacity to shape his life” (ibid., p. 50) and able to give meaning to his life; hence

individuals should not be treated merely as a means for others without their consent.

This foundation grants individuals the inviolable right to self-ownership that men are

entitled to their talents, labour and abilities. For individuals own themselves, therefore

they are also entitled to the exclusive right over the products and fruits come from

their exercise of their talents, labour and abilities. Hence, according to the principle of

justice in acquisition, the means of production, such as land and other natural

resources, can be owned privately through the cultivation by individuals, only if the

acquisition does not violate the weaken version of Lockean proviso that there should

“remain some for [others] to use as before” any private appropriation has taken place

(ibid., 176). And for Nozick, in a free society, different resources should be controlled
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Principle of justice in rectification, the principle of redressing the past injustice would be omitted in
this paper for it is beyond the scope of the paper.
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by diverse persons and the minimal state should only be responsible for the protection

of the private property held by individuals (ibid., p. 149-150).

Also, the entitlement theory is supportive to the free market system. For Nozick,

if the property is justly acquired, its owner has the exclusive right to do whatever he

wants to the property without the interference by others. The only justified

transference of the property is based upon the consent of its owner, and any transfer of

property without the consent of its owner, such as taxation, is unjust for it is “on par

with forced labour” (ibid., p. 169) and therefore violates the right to self-ownership.

Since one’s property comes from his labour; if part of his property, which equates to

ten hours working, is taken without his consent for the purpose of others, it is no

difference from forcing him to work for ten hours for the purpose of others and finally

make others to be the part-owner of his body. Therefore, Nozick thinks only the

minimal state, which its functions are limited to “[protect] all its citizens against

violence, theft, and fraud, and to the enforcement of contract” (ibid., p. 26), is

justified, and no interference to the voluntary exchange between individuals and no

taxation enforced by the state for the purposes more than the maintenance of the

minimal state is acceptable to the entitlement theory. In other words, only free market

system is morally justified to organize the economic activities between individuals.

In sum, the Nozickean justice would support a pure form of capitalism in which
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all the means of production are owned privately, and all the exchange of property are

done within the free market mechanism. But in the following, I would show coercion

would not cease in the minimal state following the entitlement theory for individuals

might be forced to work for capitalists under the contract they would not accept

otherwise. Also, I would argue the minimal state and entitlement theory cannot satisfy

the moral demand required by the moral basis of Nozick’s theory.

Entitlement theory and Coercion

First of all, leaving the market without state intervention would very likely end

up in the situation that a vast majority of individuals are coerced by another group of

individuals. For Nozick, coercion is necessary a morally wrong and unjust thing to

happen for it violates the right of individuals to self-ownership; hence, Nozick would

be self-contradicted if coercion would be derived from the entitlement theory. Nozick

thinks the principle of justice in transfer has effectively prevented coercion from

happening within the minimal state for it only allows voluntary exchange between

individuals, but it is not the case. For coercion, I mean the situation when A is

deprived of other reasonable alternatives by B and A has to accept the offer made by

B which A would not accept otherwise. It can be further explained by the example

originally given by Zimmerman (1981) and further illustrated by Anderson (2008).

For instance, if A is kidnapped by B to a destitute island, and B offers a job to A with

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very unattractive conditions, such as low payment with long working hour. A is

starving and unable to choose other better alternatives because B actively prevents A

from leaving the island by not allowing any boat to get near the island. At this

situation, the acceptance of A to B’s offer is therefore made under coercion, for A can

either choose to starve to death or accept the offer from B. And in a minimal state

adopting the entitlement theory, such coercive action would very likely to happen.

In the minimal state where there is neither anti-trust law nor intervention in the

free market, it can be conjectured all the natural resources and means of production

would be controlled by several giant corporations after several generations since the

original appropriation and a cartel would be formed among these companies in order

to maximize their benefits; and it is the situation which Nozick has admitted (1989).

And since the corporations have united into a cartel, it is likely they would agree to

jointly offer very harsh contract2 to their workers for the sake of benefits

maximization. At the same time, most individuals have to work for these companies

or they would starve, for there would not be any social security provided by the

minimal state. The choices left for most individuals to choose are either agreeing to

the contract with very unattractive conditions that they would not accept otherwise or

starving to death. From this, it can be inferred the workers’ decision to accept the offer

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Assuming the offer made by these corporations would make individuals to be better off than they
would be if there has not been any appropriation taken place; hence these corporations have not
violated the proviso.
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made by the corporations is made under coercion since the workers are deprived of

other reasonable alternatives by the corporations for all the natural resources are

controlled by them and their agreement on offering workers contract with harsh

conditions make workers do not have the choice to work under better conditions.

Seemingly, the contract between individuals in the free market must be based on the

voluntary acceptance of contractors; however, the above elaboration shows that

coercion is possible and very likely to emerge under the free market system without

intervention from the government. Hence, the entitlement theory would be

contradicted with the conviction of Nozick over the inviolable self-ownership and

more active intervention of the state on market mechanism is required to prevent

workers from engaging to contract under coercion.

Entitlement Theory and Its Moral Foundation

The second part of my criticism on the entitlement theory is that the moral

ground of Nozick would entitle individuals to a more extensive set of rights than it

would be granted in minimal state and entitlement theory. The function of rights is to

safeguard and provide the necessary and sufficient conditions for the preservation of

the moral interest of human being. Hence, the validity of the inviolable right to self-

ownership and the entitlement theory derived from it depends on whether they could

fulfill the demand of the moral foundation they grounded on, which is the
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fundamental interest of human beings to form and have their own meaningful life

plan. However, simply the right to self-ownership is not sufficient to the satisfaction

of the moral interest of men. For men to be able to have their own meaningful life

plan, certain conditions other than simply being allowed to do whatever they want are

necessary. For example, no meaningful life plan seems to be possible for someone

who cannot sustain the basic subsistence for themselves; hence, it is reasonable to

infer the moral foundation of Nozick’s theory would grant individuals the right to the

minimal level of subsistence and also place the correlative duty on individuals to help

people who cannot maintain the basic subsistence. Therefore, for the redistribution for

the purpose of others’ survival is morally required by the moral foundation Nozick

committed to, the right to self-ownership should not be interpreted as an absolute

sense which leaves no room for negotiation and compromising with other rights that

could be derived from the same moral foundation.

Nozick would reply that individuals in the minimal state can cultivate natural

resources or work for others by contracting even there is no more natural resources for

individuals to cultivate to make a living. And according to the proviso, individuals

would be compensated if the appropriation of others makes their situation worsened

than they would have when there are still enough resources for them to cultivate.

Hence, even there is no redistribution of resources to ensure the subsistence of

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individuals, the situation of individuals would still meet the level which they are able

to develop their own life plan. However, how about young children who lost their

parents and handicapped people? First, they are probably not able to work to earn a

living. Secondly, they would not be compensated under the proviso for they would not

be able to cultivate any natural resources even in the state where no appropriation has

taken place. If there is no mandatory redistributing resources from the rich to the

worst off, the above mentioned people would be denied to have their own life plan,

which is an intolerable situation to the moral foundation of Nozick’s theory.

Nozick would reject my argument by appealing to the second formulation of the

Categorical Imperative that redistributing the products of someone’s efforts would

make someone to be the means for others’ purposes. The rebuttal I give here is

individual is not denied his status of end in itself and used as mere means when they

are forced to sacrifice part of their property for the purposes of others. Allowing

someone to be treated as mere means of others would allow someone to be used

unconditionally even being killed, if the death of someone would help achieve others’

purpose. But treating someone also as an end in itself while forcing him to provide

positive aid to others would restrict the possible duties placed on him; that the duties

borne by one could not bring any intolerable threat to one’s own prospect to have his

own meaningful life plan. For example, taking 5% of the property of a rich is
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acceptable if it would bring no difference to his life plan but enable many people

living in severe poor to develop their own meaningful life plan while depriving all the

property of a rich is not acceptable even it can enable even greater number of people

to be able to have his own life plan. I think Nozick cannot deny it is justified to taking

the resources of someone, as long as there would not be any serve threat to the life

plan of that person, for the purposes of others, or otherwise Nozick would be

inconsistent to claim it is justifiable to have a minimal state “financed by tax

revenues” (ibid., p. 27). The police force and court are maintained by taxing the rich

and the rich therefore is forced to pay for the services enjoyed by the poor. Hence, the

setting up of a minimal state also coercively takes the property of someone for the

purpose of protecting others; hence, Nozick has to answer why it would be justified to

impose tax on someone for the operation of minimal state while other taxations

sharing the same nature are totally unacceptable (Cohen, 1995). In sum, forcing

someone to sacrifice part of his property for the purpose of others does not necessary

deprives him of his status as end in itself; therefore it is compatible with the Kantian

Morality. And if the self-ownership is not negotiable, Nozick could not support even

the minimal state and would inevitably tend to anarchism.

For the right to self-ownership is not sufficient to satisfy the moral demands

required by its moral foundation, it has to be compromised with other rights;

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therefore, the entitlement theory derived from the right to self-ownership has to be

amended or otherwise it would not be justifiable to its moral foundation3.

Conclusion

In this paper, I have discussed the relation between Nozick’s entitlement theory

and capitalism and show Nozick would support a pure form of capitalism which all

the means of production are privately owned and the transfers of property are done

within a free market mechanism. And in the second part of the paper, I have argued

Nozick’s would be internally inconsistent for the entitlement theory would be

contradicted with Nozick’s conviction to the right of self-ownership; I have also

argued the moral foundation of his theory would have a more extensive demand

exceeding the scope of the right to self-ownership and the entitlement theory could

fulfill. Although the world nowadays is tending to the direction similar to Nozick’s

theory, the above paragraphs have shown that accepting his theory would not

necessary free individuals from coercion and whether it is worth to sacrifice

everything for the sake of liberty is also worth our vigilance.

Reference

Anderson, S. (2008). Coercion. In E. N. Zalta (ed.), The Stanford Encyclopedia of

Philosophy (Fall 2008 Edition). Retrieved from

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One point has to be noticed is the moral foundation Nozick committed to would require the duties
more than providing mere subsistence, but including them in the discussion would make the discussion
complicated and the length of this paper does not allow me to include them in the discussion; hence,
only the right to subsistence has been used as an example to illustrate my argument.
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http://plato.stanford.edu/archives/fall2008/entries/coercion/
Cohen, G.A. (1995). Self-Ownership, Freedom, and Equality. Cambridge: Cambridge
University Press.
Nozick, R. (1974). Anarchy, State, and Utopia. New York: Basic Book.
Nozick, R. (1989). The Examined Life. New York: Simon and Schuster.
Zimmerman, D. (1981). ‘Coercive Wage Offers’. Philosophy and Public Affairs, 10,
121-145.