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THE DILETTANTE READING AND LOUNGING AND WATCHING.

JUNE 20 2011 7:06 AM
The Liberty Scam
Why even Robert Nozick, the philosophical father of libertarianism,
gave up on the movement he inspired.
By Stephen Metcalf
Robert Nozick
1. 1.
Recently, I overheard a fellow Amtraker back off a conversation on politics. "You know, it's
because I'm a libertarian," he said, sounding like a vegetarian politely declining offal. Later
that afternoon, in the otherwise quite groovy loft I sometimes crash at in SoHo, where one
might once have expected,say, Of Grammatology or at least a back issue ofElle Decor, there
sat not one but two copies of something called The Libertarian Reader. "Libertarianism"
places one—so believes the libertarian—not on the political spectrum but slightly above it,
and this accounts for its appeal to both the tricorne fringe and owners of premium real
estate. Liberty's current bedfellows include Paul Ryan (his staffers are assigned Atlas
Shrugged), Glenn Beck (he flogged The Road to Serfdom onto the best-seller list), Slate Slate's Jack
Shafer, South Park, the founder of Whole Foods, this nudnik, P.J. O'Rourke, now David
Mamet, and to the extent she cares for anything beyond her own naked self-interest—oh,
wait, that is libertarianism—Sarah Palin.
With libertarianism everywhere, it's hard to remember that as recently as the 1970s, it was
nowhere to be found. Once the creed of smart set rogues, H.L. Mencken among them,
libertarianism all but disappeared after the Second World War. What happened? The single
most comprehensive, centrally planned, coordinated governmental action in history—
that's what happened. In addition to defeating fascism, the Second World War acted as a
magnificent sieve, through which almost no one, libertarians included, passed unchanged.
(To pick one example: Lionel Robbins, the most prominent anti-Keynesian before the war,
served as director of the economic division of the British War Cabinet; after the War,
Robbins presided over the massive expansion of the British higher education system.) By
the '50s, with Western Europe and America free, prosperous, happy, and heavily taxed,
libertarianism had lost its roguish charm. It was the Weltanschauung of itinerant cranks:
Ronald Reagan warming up the Moose Lodge; Ayn Rand mesmerizing her Saturday night
sycophants; the Reader's Digest economist touting an Austrian pedigree.
Libertarians will blanch at lumping their revered Vons—Mises and Hayek—in with the
nutters and the shills. But between them, Von Hayek and Von Mises never seem to have
held a single academic appointment that didn't involve a corporate sponsor. Even the
renowned law and economics movement at the University of Chicago was, in its inception,
heavily subsidized by business interests. ("Radical movements in capitalist societies," as
Milton Friedman patiently explained, "have typically been supported by a few wealthy
individuals.") Within academia, the philosophy of free markets in extremis was rarely
embraced freely—i.e., by someone not on the dole of a wealthy benefactor. It cannot be
stressed enough: In the decades after the war, a kind of levee separated polite discourse
from free-market economics. The attitude is well-captured by John Maynard Keynes, who
wrote in a review of Hayek's Prices and Production: "An extraordinary example of how,
starting with a mistake, a remorseless logician can end up in Bedlam."*
And then came Robert Nozick.
To my knowledge, in writing Anarchy, State, and Utopia, his breathtaking defense of
libertarianism, Nozick never accepted a dime other than from his employer, the
philosophy department at Harvard University. (Unless it was from the Center for Advanced
Study in the Behavioral Sciences at Palo Alto, the "minimally structured academic
institution bordering on individualist anarchy" as Nozick put it, where he wrote the book's
early chapters.) In fact, Nozick was the disinterested intellectual that laissez-faire had been
searching for since Congress passed the Emergency Banking Act of 1933. Nozick started out
a classic of the type: a Brooklyn kid, one generation off the shtetl, toting a dog-eared Plato.
But along the way to a full Harvard professorship, attained at the age of 30, he'd lost the
socialist ardors of his upbringing. "For a while I thought: 'Well, the arguments are right,
capitalism is the best system, but only bad people would think so,' " he once told a
journalist. "Then, at some point, my mind and my heart were in unison."
The Times Literary Supplement ranks Anarchy, published in 1974, as one of the "100 Most
Influential Books Since the War," and that, I think, is underselling it. To this day, left
intellectuals remember where they were when they first heard Nozick's arguments against
not just socialism but wealth redistribution of any kind. "It is no exaggeration to say," the
Telegraph wrote, after Nozick died in 2002, "that Nozick, more than anyone else, embodied
the new libertarian zeitgeist which, after generations of statist welfarism from Roosevelt's
New Deal to Kennedy, Johnson and Carter, ushered in the era of Reagan and Bush, pere et
fils." Prior to Anarchy, "liberty" was a virtual synonym for rolling back labor unions and
progressive taxation, a fig leaf for the class interests of the Du Ponts and the B.F.
Goodriches. After Anarchy, "liberty" was a concept as worthy of academic dignity as the
categorical imperative.
As a moral philosopher, Nozick was free to stretch liberty further than even an Austrian
economist. That is, he was able to separate out a normative claim (that liberty is the
fundamental value of values, and should be maximized) from an empirical claim (that the
most efficient method for allocating goods and services is a market economy). Free to
pursue liberty as a matter of pure principle, Nozick let nothing stand in his way. Should we
tax the rich to feed the poor? Absolutely not, as "taxation of earnings is on par with forced
labor." (Or more precisely: "Taking the earnings of n hours of labor is like taking n hours
from the person.") Well, isn't at least some redistribution necessary on the basis of need?
"Need a gardener allocate his services to those lawns which need him most?"
To the entire left, Nozick, in effect, said: Your social justice comes at an unacceptable cost,
namely, to my personal liberty. Most distressingly, to this end Nozick enlisted the
humanist's most cherished belief: the inviolability of each human being as an end unto
himself—what Nozick, drawing on Immanuel Kant, calls "the separateness of persons." For
Nozick, the principle of the separateness of persons is close to sacred. It affirms, as he
writes, "the underlying Kantian principle that individuals are ends and not merely means;
they may not be sacrificed or used for the achieving of other ends without their consent.
Individuals are inviolable."
I like to think that when Nozick published Anarchy, the levee broke, the polite Fabian
consensus collapsed, and hence, in rapid succession: Hayek won the Nobel Prize in
economics in 1974, followed by Milton Friedman in '75, the same year Thatcher became
Leader of the Opposition, followed by the California and Massachusetts tax revolts,
culminating in the election of Reagan, and … well, where it stops, nobody knows.
True, a recondite book by an obscure professor wouldn't have made any difference if it
hadn't caught the drift of public feeling. But also true: Public feeling might have remained
begrudging, demagogic, sub-intellectual if the public's courage hadn't been shored up (or
its conscience bought off, depending on your point of view) by intellectuals like Nozick.
Take Margaret Thatcher's infamous provocation—"There's no such thing as society"—with
its implication that human beings are nothing more than brutishly competitive atoms. Now
listen to its original formulation, in Anarchy: "But there is no social entity with a good that
undergoes some sacrifice for its own good. There are only individual people, different
individual people, with their own individual lives." The tone is different—it's Kantian, not
Hobbesian—and so is the moral emphasis: Society is unreal not because individuals are
brutish but because they are dignified.
With the solemn invocation of individual lives, the liberal humanist ought to push away
from the table, take a deep breath, and ask whether any of this remarkable assault is true.
Can it really be that eliminating the income tax shows maximum moral respect for others?
I thought a fraction of a rich man's fortune is to the rich man only money but to a starving
man is freedom. Am I a moral idiot? It is impossible without writing a book (and many have)
to do Anarchy justice. Nonetheless, one argument from its pages is considered its most
central, most famous, most bewitching. This is the so-called "Wilt Chamberlain" argument,
and pausing to pick it apart, we can begin to see why Nozick's defense of libertarianism, as
Nozick himself came to believe, collapsed.
2. 2.
When I think with my own brain and look with my own eyes, it's obvious to me that some
combination of civil rights, democratic institutions, educational capital, social trust,
consumer choice, and economic opportunity make me free. This is not what Nozick is
arguing. Nozick is arguing that economic rights are the only rights, and that insofar as
there are political rights, they are nothing more than a framework in support of private
property and freedom of contract. When I study American history, I can see why America,
thanks to a dense bundle of historical accidents, is a kind of Lockean paradise, uniquely
suited to holding up liberty as its paramount value. This is not what Nozick is arguing.
Nozick is arguing that liberty is the sole value, and to put forward any other value is to
submit individuals to coercion.
How does so supple a mind end up committed to so seemingly brittle a belief system? The
leap of faith here is, no surprise, in the construal of liberty itself, which unlike other values
(says the libertarian) makes no restricting or normative claims on anybody; liberty is
instead like oxygen—invisible, pervasive, enabling. Every other value, meanwhile,
represents someone else's deranged will-to-power by which, under the guise of high-
mindedness or disinterest, he would "pattern" all of society to his own liking. "Almost
every suggested principle of … justice is patterned," Nozick says, by way of setting up the
Chamberlain argument. "To each according to his moral merit, or needs, or marginal
product, or how hard he tries …" By way of showing us how an unpatterned, or libertarian,
society is more just than any patterned one, Nozick asks the reader to consult her own
preference, and choose a society patterned in any way she sees fit—Marxist, bell-curve
meritocracy—you pick. Now call that pattern D1. Then, Nozick writes:
"Wilt Chamberlain is greatly in demand by basketball teams, being a great gate attraction.
(Also suppose contracts run only for a year, with players being free agents.) He signs the
following sort of contract with a team: In each home game twenty-five cents from the price
of each ticket of admission goes to him. (We ignore the question of whether he is
"gouging" the owners, letting them look out for themselves.) … Let us suppose that in one
season one million persons attend his home games, and Wilt Chamberlain ends up with
$250,000, a much larger sum than the average income and larger even than anyone else
has. Is he entitled to his income? Is this new distribution D2 unjust?"
Nozick assumes our dream society is in some respect egalitarian; that to prevent Wilt from
grossly out-earning his fellow citizens, the system we've imagined in D1 will curtail
Chamberlain's right to the whole fruit of his own labor. To the liberal humanist, Nozick is
saying: You don't take your finest hero, Kant, seriously, because if you did, you would never
sacrifice Wilt's autonomy to the social planner's designs. To the socialist, he is saying: You
don't take your own finest hero, Marx, seriously, because if you did, you would never
expropriate his surplus value (via taxation) as blithely as the capitalist. And to his own
fellow Harvard professors, he is saying: You don't take your own finest hero—yourself—
seriously, because if you did, why would you ever curtail the prerogative of a superstar?
For all its intriguing parts, Anarchy can be thought of as one long Excuse me? in response
to one Harvard colleague in particular, the political philosopher John Rawls. In A Theory of
Justice, Rawls argued that our talents are not really our own, because they are not morally
intrinsic to us. Rawls asked us to imagine that we know nothing about our life advantages—
that how gifted, smart, attractive, charismatic we are, as well as the socio-economic status
of our parents, lie behind a veil of ignorance. He then asked us to design an insurance
policy against poor accidents of birth. That insurance policy would be "justice," in the form
of a society that was fair even from the perspective of its least well-off citizen—who, after
all, passing through the veil of ignorance, might turn out to be us.
To this, Nozick replies: All that intellectual pomp, arrayed to convince me that my talents
are not mine? But my talents aren't like fire and disease. They aren't fatalities I insure
against. Quite the opposite: My talents constitute the substance of who I am, and I am right
to bank on them. Having cornered us with Kant, with Marx, and, most of all, with our own
vanity, Nozick concludes, "No end-state principle of justice can be continuously realized
without continuous interference with people's lives," confident that "interference" is
sufficiently morally offensive to carry the day.
Wilt Chamberlain
Here the liberal humanist needs to relax, take a second breath, and realize that, while
clever, the Wilt Chamberlain argument is maybe a little too clever—i.e., what seems on first
blush to be a simple case of freedom from interference is in fact a kind of connivance.
Anarchy not only purports to be a defense of capitalism, but a proud defense of capitalism.
And yet if Anarchy would defend capitalism unashamedly, why does its most famous
argument include almost none of the defining features of capitalism—i.e., no risk capital,
no capital markets, no financier? Why does it feature a basketball player and not, say, a
captain of industry, a CEO, a visionary entrepreneur? The example as Nozick sets it out
includes a gifted athlete (Wilt Chamberlain), paying customers (those with a dollar to see
Wilt play)—and yet, other than a passing reference to the team's "owners,"no capitalist!
In Nozick's example, we know what portion of every ticket (25 cents) represents the
monetary equivalent of every paying customer's desire to see not the game itself but Wilt
Chamberlain play in it. Bearing in mind that all thought experiments beg our indulgence
without requiring our stupidity, notice that, in order to abstract out this allegiance from
allegiance to the team, to the sport, etc., and give it a dollar figure, Nozick has assigned
what amounts to a market price to Wilt's talents while also suggesting the price was
achieved by negotiation between Wilt and the owner. Now, here we must pause, and note
that "price" is not an incidental feature of a libertarian belief system—it is what obviates
the need, beyond enforcing the basic rule of law, for government. To a libertarian, price is,
in effect, the conscience of society finding its highest expression in every swipe of the debit
card. Just as the thought experiment, "If there were purple cows on the moon, they would
certainly be purple" tells us nothing about the moon, cows, or the color purple, assuming a
world in which labor and management arrive at gentleman's agreements—and in which
those agreements capture the precise value, down to the penny, of labor's marginal
product—tells us very little about justice.
Put another way, Nozick is cornering us into answering a ridiculously loaded question: If
every person were a capitalist, and every capitalist a human capitalist, and every human
capitalist was compensated in exact proportion to the pleasure he or she provided others,
would a world without progressive taxation be just? To arrive at this question, Nozick
vanishes most of the known features of capitalism (capital, owners, means of production,
labor, collective bargaining) while maximizing one feature of capitalism—its ability to
funnel money to the uniquely talented. In the example, "liberty" is all but cognate with a
system that efficiently compensates the superstar.
The connivance is thus hidden in plain sight. "Wilt Chamberlain" is an African-American
whose talents are unique, scarce, perspicuous (points, rebounds, assists), and in high
demand. We feel powerfully the man should be paid, and not to do so—to expect a black
athlete to perform for (largely) white audiences without adequate compensation—raises
the specter of the plantation. But being a star athlete isn't the only way to make money. In
addition to earning a wage, one can garnish a wage, collect a fee, levy a toll, cash in a
dividend, take a kickback, collect a monopoly rent, hit the superfecta, inherit Tara, insider
trade, or stumble on Texas tea. For each way of conceiving wealth, there is at least one way
of moralizing its distribution. The Wilt Chamberlain example is designed to corner us—
quite cynically, in my view—into moralizing all of them as if they were recompense for a
unique talent that gives pleasure; and to tax each of them, and regulate each of them,
according to the same principle of radical noninterference suggested by a black ballplayer
finally getting his due.
3. 3.
To my critique of the Chamberlain example, a libertarian might respond: Given frictionless
markets, rational self-maximizers, and perfect information, the market price for Wilt's
services could not stay separable from the market price to see Wilt play. (Visionary
entrepreneurs would create start-up leagues, competing leagues would bid up prices for
the best players.) In a free-market paradise, capital will flow to talent, until rewards
commensurate perfectly with utility. Maybe; and maybe in a socialist paradise, no one will
catch the common cold. The essence of any utopianism is: Conjure an ideal that makes an
impossible demand on reality, then announce that, until the demand is met in full, your
ideal can't be fairly evaluated. Attribute any incidental successes to the halfway meeting of
the demand, any failure to the halfway still to go.
How could a thinker as brilliant as Nozick stay a party to this? The answer is: He didn't. "The
libertarian position I once propounded," Nozick wrote in an essay published in the late
'80s, "now seems to me seriously inadequate." In Anarchy democracy was nowhere to be
found; Nozick now believed that democratic institutions "express and symbolize … our
equal human dignity, our autonomy and powers of self-direction." In Anarchy, the best
government was the least government, a value-neutral enforcer of contracts; now, Nozick
concluded, "There are some things we choose to do together through government in
solemn marking of our human solidarity, served by the fact that we do them together in
this official fashion ..."
We're faced then with two intriguing mysteries. Why did the Nozick of 1975 confuse capital
with human capital? And why did Nozick by 1989 feel the need to disavow the Nozick of
1975? The key, I think, is recognizing the two mysteries as twin expressions of a single,
primal, human fallibility: the need to attribute success to one's own moral substance,
failure to sheer misfortune. The effectiveness of the Wilt Chamberlain example, after all, is
best measured by how readily you identify with Wilt Chamberlain. Anarchy is nothing if not
a tour-de-force, an advertisement not just for libertarianism but for the sinuous
intelligence required to put over so peculiar a thought experiment. In the early '70s, Nozick
—and this is audible in the writing—clearly identified with Wilt: He believed his talents
could only be flattered by a free market in high value-add labor. By the late '80s, in a world
gone gaga for Gordon Gekko and Esprit, he was no longer quite so sure.
Even in 1975, it took a pretty narrow view of history to think all capital is human capital, and
that philosophy professors, even the especially bright ones, would thrive in the free
market. But there was a historical reason for Nozick's belief: the magnificent sieve.
Harvard's enrollment prior to World War II was 3,300; after the war, it was 5,300, 4,000 of
whom were veterans. The GI Bill was on its way to investing more in education grants,
business loans, and home loans than all previous New Deal programs combined. By 1954,
with the Cold War in full swing, the U.S. government was spending 20 times what it had
spent on research before the war. "Some universities," C. Wright Mills could write in the
mid-'50s, "are financial branches of the military establishment." In the postwar decades,
the American university grew in enrollment, budget and prestige, thanks to a substantial
transfer of wealth from the private economy, under the rubric of "military Keynesianism."
As a tentacle of the military-industrial octopus, academia finally lost its last remnant of
colonial gentility.
At the same time the university boomed, marginal tax rates for high earners stood as high
as 90 percent. This collapsed the so-called L-curve, the graphic depiction of wealth
distribution in the United States. The L-curve lay at its flattest in 1970, just as Nozick was
sitting down to write Anarchy. In 1970, there were nearly 500,000 employed academics, and
their relative income stood at an all-time high. To the extent anyone could believe mental
talent, human capital, and capital were indistinguishable, it was thanks to the greatest
market distortion in the history of industrial capitalism; and because for 40 years, thanks to
this distortion, talent had not been forced to compete with the old "captains of industry,"
with the financiers and the CEOs.
Buccaneering entrepreneurs, boom-and-bust markets, risk capital—these conveniently
disappeared from Nozick's argument because they'd all but disappeared from capitalism.
In a world in which J.P. Morgan and Cornelius Vanderbilt have been rendered obsolete,
reduced to historical curios, to a funny old-style man, imprisoned in gilt frames, the
professionals—the scientists, engineers, professors, lawyers and doctors—correspondingly
rise in both power and esteem. And in a world in which the professions are gatekept by
universities, which in turn select students based on their measured intelligence, the idea
that talent is mental talent, and mental talent is, not only capital, but the only capital,
becomes easier and easier for a humanities professor to put across. Hence the terminal
irony of Anarchy: Its author's audible smugness in favor of libertarianism was underwritten
by a most un-libertarian arrangement—i.e., the postwar social compact of high marginal
taxation and massive transfers of private wealth in the name of the very "public good"
Nozick decried as nonexistent.
And the screw takes one last turn: By allowing for the enormous rise in (relative) income
and prestige of the upper white collar professions, Keynesianism created the very blind
spot by which professionals turned against Keynesianism. Charging high fees as defended
by their cartels, cartels defended in turn by universities, universities in turn made powerful
by the military state, many upper-white-collar professionals convinced themselves their
pre-eminence was not an accident of history or the product of negotiated protections from
the marketplace but the result of their own unique mental talents fetching high prices in a
free market for labor. Just this cocktail of vanity and delusion helped Nozick edge out
Rawls in the marketplace of ideas, making Anarchy a surprise best-seller, it helped make
Ronald Reagan president five years later. So it was the public good that killed off the public
good.
Since 1970, the guild power of lawyers, doctors, engineers, and, yes, philosophy professors
has nothing but attenuated. To take only the most pitiful example, medical doctors have
evolved over this period from fee-for-service professionals totally in control of their own
workplace to salaried body mechanics subject to the relentless cost-cutting mandate of a
corporate employer. They've gone from being Marcus Welby—a living monument to
public service through private practice—to being, as one comprehensive study put it,
harried "middle management." Who can argue with a straight face that a doctor in 2011
has more liberty than his counterpart in 1970? What any good liberal Democrat with an
ounce of vestigial self-respect would have said to Nozick in 1970—"Sure, Bob, but we both
know what your liberty means. It means power will once again mean money, and money
will be at liberty to flow to the top"—in fact happened. The irony is that as capital once
again concentrates as nothing more than capital (i.e., as the immense skim of the
financiers), the Nozickian illusion (that capital is human capital and human capital is the
only capital) gets harder and harder to sustain.
Sustained it is, though. Just as Nozick would have us tax every dollar as if it were earned by
a seven-foot demigod, apologists for laissez-faire would have us treat all outsize
compensation as if it were earned by a tech revolutionary or the value-investing equivalent
of Mozart (as opposed to, say, this guy, this guy, this guy, or this guy). It turns out the Wilt
Chamberlain example is all but unkillable; only it might better be called the Steve Jobs
example, or the Warren Buffett* example. The idea that supernormal compensation is fit
reward for supernormal talent is the ideological superglue of neoliberalism, holding firm
since the 1980s. It's no wonder that in the aftermath of the housing bust, with the glue
showing signs of decay—with Madoff and "Government Sachs" displacing Jobs and Buffett
in the headlines—"liberty" made its comeback. When the facts go against you, resort to
"values." When values go against you, resort to the mother of all values. When the mother
of all values swoons, reach deep into the public purse with one hand, and with the other
beat the public senseless with your dog-eared copy of Atlas Shrugged.
4. 4.
Calling yourself a libertarian is another way of saying you believe power should be held
continuously answerable to the individual's capacity for creativity and free choice. By that
standard, Thomas Jefferson, John Ruskin, George Orwell, Isaiah Berlin, Noam Chomsky,
Michel Foucault, and even John Maynard Keynes are libertarians. (Orwell: "The real division
is not between conservatives and revolutionaries but between authoritarians and
libertarians." Keynes: "But above all, individualism … is the best safeguard of personal
liberty in the sense that, compared with any other system, it greatly widens the field for the
exercise of personal choice.") Every thinking person is to some degree a libertarian, and it
is this part of all of us that is bullied or manipulated when liberty is invoked to silence our
doubts about the free market. The ploy is to take libertarianism as Orwell meant it and
confuse it with libertarianism as Hayek meant it; to take a faith in the individual as an
irreducible unit of moral worth, and turn it into a weapon in favor of predation.
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Another way to put it—and here lies the legacy of Keynes—is that a free society is an
interplay between a more-or-less permanent framework of social commitments, and the
oasis of economic liberty that lies within it. The nontrivial question is: What risks (to health,
loss of employment, etc.) must be removed from the oasis and placed in the framework (in
the form of universal health care, employment insurance, etc.) in order to keep liberty a
substantive reality, and not a vacuous formality? When Hayek insists welfare is the road is
to serfdom, when Nozick insists that progressive taxation is coercion, they take liberty
hostage in order to prevent a reasoned discussion about public goods from ever taking
place. "According to them, any intervention of the state in economic life," a prominent
conservative economist once observed of the early neoliberals, "would be likely to lead,
and even lead inevitably to a completely collectivist Society, Gestapo and gas chamber
included." Thus we are hectored into silence, and by the very people who purport to leave
us most alone.
Thanks in no small part to that silence, we have passed through the looking glass. Large-
scale, speculative risk, undertaken by already grossly overcompensated bankers, is now
officially part of the framework, in the form of too-big-to-fail guarantees made, implicitly
and explicitly, by the Federal Reserve. Meanwhile, the "libertarian" right moves to take the
risks of unemployment, disease, and, yes, accidents of birth, and devolve them entirely
onto the responsibility of the individual. It is not just sad; it is repugnant.
*Correction, June 20, 2011: *Correction, June 20, 2011: The article originally misspelled Warren Buffett's surname.
**Correction, June 24, 2011: Correction, June 24, 2011: The article originally stated that Keynes wrote his line critical
of Hayek in the margins of his copy of The Road to Serfdom.