Anarchy, State and Utopia

Chapter 6

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The example of the loaned bus also serves against another principle sometimes put forth: that enjoyment and use and occupancy of something over a period of time gives one a t.i.tle or right over it. Some such principle presumably underlies rent-control laws, which give someone living in an apartment a right to live in it at (close to) a particular rent, even though the market price of the apartment has increased greatly. In a spirit of amity, I might point out to supporters of rent-control laws an even more efficient alternative, utilizing market mechanisms. A defect of rent-control laws is that they are inefficient; in particular they misallocate apartments. Suppose I am living in an apartment for some period of time at a rent of $100 per month, and the market price goes up to $200. Under the rent-control law, I will sit tight in the apartment at $100 per month. But it might be that you are willing to pay $200 per month for the apartment; furthermore, it might well be that I would prefer giving up the apartment if I could receive $200 a month for it. I would prefer to sublet the apartment to you, paying $1,200 rent to the owner and receiving $2,400 in rent from you for the apartment per year, and I would take some other apartment available on the market, renting at say $150 per month. This would give me $50 extra per month to spend on other things. Living in the apartment (paying $100 per month for it) isn"t worth to me to me the cash difference between its market value and its controlled rent. If I could get this difference, I would be willing to give up the apartment. the cash difference between its market value and its controlled rent. If I could get this difference, I would be willing to give up the apartment.

This is very easily arranged, if I am allowed freely to sublet the apartment at the market rate, for as long as I wish. I am better off under such an arrangement than under the rent-control laws without the subletting provision. It gives me an extra option, though it doesn"t force me to use it. You are better off, since you get the apartment for $200, which you"re willing to pay, whereas you wouldn"t get it under the rent-control law with no subletting provision. (Perhaps, during the period of your lease, you may sublet it to yet another person.) The owner of the building is not not worse off, since he receives $1,200 per year for the apartment in either case. Rent-control laws with subletting provisions allow people to improve their position via voluntary exchange; they are superior to rent-control laws without such provisions, and if the latter is better than no rent control at all, then worse off, since he receives $1,200 per year for the apartment in either case. Rent-control laws with subletting provisions allow people to improve their position via voluntary exchange; they are superior to rent-control laws without such provisions, and if the latter is better than no rent control at all, then a fortiori a fortiori so is rent control with subletting allowed. So why do people find the subletting-allowed system unacceptable? so is rent control with subletting allowed. So why do people find the subletting-allowed system unacceptable?bz Its defect is that it makes explicit the partial expropriation of the owner. Why should the renter of the apartment get the extra money upon the apartment"s being sublet, rather than the owner of the building? It is easier to ignore the question of why he should get the subsidy given him by the rent-control law, rather than this value"s going to the owner of the building. Its defect is that it makes explicit the partial expropriation of the owner. Why should the renter of the apartment get the extra money upon the apartment"s being sublet, rather than the owner of the building? It is easier to ignore the question of why he should get the subsidy given him by the rent-control law, rather than this value"s going to the owner of the building.

THE NONNEUTRAL STATE.

Since inequalities in economic position often have led to inequalities in political power, may not greater economic equality (and a more extensive state as a means of achieving it) be needed and justified in order to avoid the political inequalities with which economic inequalities are often correlated? Economically well-off persons desire greater political power, in a nonminimal state, because they can use this power to give themselves differential economic benefits. Where a locus of such power exists, it is not surprising that people attempt to use it for their own ends. The illegitimate use of a state by economic interests for their own ends is based upon a preexisting illegitimate power of the state to enrich some persons at the expense of others. Eliminate that that illegitimate power of giving differential economic benefits and you eliminate or drastically restrict the motive for wanting political influence. True, some persons still will thirst for political power, finding intrinsic satisfaction in dominating others. The minimal state best reduces the chances of such takeover or manipulation of the state by persons desiring power or economic benefits, especially if combined with a reasonably alert citizenry, since it is the minimally desirable target for such takeover or manipulation. Nothing much is to be gained by doing so; and the cost to the citizens if it occurs is minimized. To strengthen the state and extend the range of its functions as a way of preventing it from being used by some portion of the populace makes it a more valuable prize and a more alluring illegitimate power of giving differential economic benefits and you eliminate or drastically restrict the motive for wanting political influence. True, some persons still will thirst for political power, finding intrinsic satisfaction in dominating others. The minimal state best reduces the chances of such takeover or manipulation of the state by persons desiring power or economic benefits, especially if combined with a reasonably alert citizenry, since it is the minimally desirable target for such takeover or manipulation. Nothing much is to be gained by doing so; and the cost to the citizens if it occurs is minimized. To strengthen the state and extend the range of its functions as a way of preventing it from being used by some portion of the populace makes it a more valuable prize and a more alluring target target for corrupting by anyone able to offer an officeholder something desirable ; it is, to put it gently, a poor strategy. for corrupting by anyone able to offer an officeholder something desirable ; it is, to put it gently, a poor strategy.

One might think that the minimal state also is nonneutral with regard to its citizens. After all, it enforces contracts, prohibitions on aggression, on theft, and so on, and the end result of the operation of the process is one in which people"s economic situations differ. Whereas without these enforcements (or with some others) the resulting distribution might differ, and some people"s relative positions might be reversed. Suppose it were were in some people"s interests to take or seize the property of others, or expropriate them. By using or threatening to use force to prevent this, isn"t the minimal state in fact rendered nonneutral? in some people"s interests to take or seize the property of others, or expropriate them. By using or threatening to use force to prevent this, isn"t the minimal state in fact rendered nonneutral?

Not every enforcement of a prohibition which differentially benefits people makes the state nonneutral. Suppose some men are potential rapists of women, while no women are potential rapists of men or of each other. Would a prohibition against rape be nonneutral? It would, by hypothesis, differentially benefit people; but for potential rapists to complain that the prohibition was nonneutral between the s.e.xes, and therefore s.e.xist, would be absurd. There is an independent independent reason for prohibiting rape: (the reason why) people have a right to control their own bodies, to choose their s.e.xual partners, and to be secure against physical force and its threat. That a prohibition thus independently justifiable works out to affect different persons differently is no reason to condemn it as nonneutral, provided it was inst.i.tuted or continues for (something like) the reasons which justify it, and not in order to yield differential benefits. (How should it be viewed if it reason for prohibiting rape: (the reason why) people have a right to control their own bodies, to choose their s.e.xual partners, and to be secure against physical force and its threat. That a prohibition thus independently justifiable works out to affect different persons differently is no reason to condemn it as nonneutral, provided it was inst.i.tuted or continues for (something like) the reasons which justify it, and not in order to yield differential benefits. (How should it be viewed if it is is independently justifiable, but actually is supported and maintained because of its differential benefits?) To claim that a prohibition or rule is nonneutral independently justifiable, but actually is supported and maintained because of its differential benefits?) To claim that a prohibition or rule is nonneutral presupposes presupposes that it is unfair. that it is unfair.

Similarly with the prohibitions and enforcements of the minimal state. That such a state preserves and protects a process that works out with people having different holdings would be sufficient to condemn it as nonneutral only if only if there were no independent justification for the rules and prohibitions it enforces. But there is. Or, at least, the person who claims the minimal state is nonneutral cannot sidestep the issue of whether its structure and the content of its rules is independently justifiable. there were no independent justification for the rules and prohibitions it enforces. But there is. Or, at least, the person who claims the minimal state is nonneutral cannot sidestep the issue of whether its structure and the content of its rules is independently justifiable.ca In this chapter and in the previous one we have canva.s.sed the most important of the considerations that plausibly might be thought to justify a state more extensive than the minimal state. When scrutinized closely, none of these considerations succeeds in doing so (nor does their combination); the minimal state remains as the most extensive state that can be justified.

HOW REDISTRIBUTION OPERATES.

Our normative task in these two chapters is now complete, but perhaps something should be said about the actual operation of redistributive programs. It has often been noticed, both by proponents of laissez-faire capitalism and and by radicals, that the poor in the United States are not net beneficiaries of the total of government programs and interventions in the economy. Much of government regulation of industry was originated and is geared to protect the position of established firms against compet.i.tion, and many programs most greatly benefit the middle cla.s.s. The critics (from the right or the left) of these government programs have offered no explanation, to my knowledge, of by radicals, that the poor in the United States are not net beneficiaries of the total of government programs and interventions in the economy. Much of government regulation of industry was originated and is geared to protect the position of established firms against compet.i.tion, and many programs most greatly benefit the middle cla.s.s. The critics (from the right or the left) of these government programs have offered no explanation, to my knowledge, of why why the middle cla.s.s is the greatest net beneficiary. the middle cla.s.s is the greatest net beneficiary.

There is another puzzle about redistributive programs: why don"t the least well-off 51 percent of the voters vote for redistributive policies that would greatly improve their position at the expense of the best-off 49 percent? That this would work against their own long-run interests is true, but this does not ring true as the explanation of their refraining. Nor is an adequate explanation provided by referring to the lack of organization, political savvy, and so forth, in the bottom majority. So why hasn"t hasn"t such ma.s.sive redistribution been voted? The fact will seem puzzling until one notices that the bottom 51 percent is not the only possible (continuous) voting majority; there is also, for example, the top 51 percent. Which of these two majorities will form depends on how the middle 2 percent votes. It will be in the interests of the top 49 percent to support and devise programs to gain the middle 2 percent as allies. It is cheaper for the top 49 percent to buy the support of the middle 2 percent than to be (partially) expropriated by the bottom 51 percent. The bottom 49 percent cannot offer more than the top 49 percent can to the middle 2 percent in order to gain them as allies. For what the bottom 49 percent offers the middle 2 percent will come (after the policies are inst.i.tuted) from the top 49 percent; and in addition the bottom 49 percent also will take something for themselves from the top 49 percent. The top 49 percent always can save by offering the middle 2 percent slightly more than the bottom group would, for that way they avoid such ma.s.sive redistribution been voted? The fact will seem puzzling until one notices that the bottom 51 percent is not the only possible (continuous) voting majority; there is also, for example, the top 51 percent. Which of these two majorities will form depends on how the middle 2 percent votes. It will be in the interests of the top 49 percent to support and devise programs to gain the middle 2 percent as allies. It is cheaper for the top 49 percent to buy the support of the middle 2 percent than to be (partially) expropriated by the bottom 51 percent. The bottom 49 percent cannot offer more than the top 49 percent can to the middle 2 percent in order to gain them as allies. For what the bottom 49 percent offers the middle 2 percent will come (after the policies are inst.i.tuted) from the top 49 percent; and in addition the bottom 49 percent also will take something for themselves from the top 49 percent. The top 49 percent always can save by offering the middle 2 percent slightly more than the bottom group would, for that way they avoid also also having to pay to the remainder of the possible coalition of the bottom 51 percent, namely the bottom 49 percent. The top group will be able always to buy the support of the swing middle 2 percent to combat measures which would more seriously violate its rights. having to pay to the remainder of the possible coalition of the bottom 51 percent, namely the bottom 49 percent. The top group will be able always to buy the support of the swing middle 2 percent to combat measures which would more seriously violate its rights.

Of course, speaking of the middle 2 percent is much too precise; people do not know precisely in what percentile they fall, and policies are not easily geared to target upon 2 percent somewhere in the middle. One therefore would expect that a middle group considerably considerably larger than 2 percent will be a beneficiary of a voting coalition from the top. larger than 2 percent will be a beneficiary of a voting coalition from the top.cb A voting coalition from the bottom won"t form because it will be less expensive to the top group to buy off the swing middle group than to let it form. In answering one puzzle, we find a possible explanation of the other often noticed fact: that redistributive programs mainly benefit the middle cla.s.s. If correct, this explanation implies that a society whose policies result from democratic elections will not find it easy to avoid having its redistributive programs most benefit the middle cla.s.s. A voting coalition from the bottom won"t form because it will be less expensive to the top group to buy off the swing middle group than to let it form. In answering one puzzle, we find a possible explanation of the other often noticed fact: that redistributive programs mainly benefit the middle cla.s.s. If correct, this explanation implies that a society whose policies result from democratic elections will not find it easy to avoid having its redistributive programs most benefit the middle cla.s.s.cc

CHAPTER 9.

Demoktesis We have justified the minimal state, overcoming individualist anarchist objections, and have found all of the major moral arguments for a more extensive or powerful state inadequate. Despite this, some readers will continue to find the minimal state frail and insubstantial.1 Robustness, in their view, would consist of some asymmetry in rights between the (individuals jointly composing the) state and an individual who remains in a state of nature with respect to it (and them). Furthermore, a robust state would have more power and a larger legitimate domain of action than defensive functions. There is no legitimate way to arrive at the asymmetry in rights. Is there some way to continue our story of the origin of the (minimal) state from the state of nature to arrive, via only legitimate steps which violate no one"s rights, at something more closely resembling a modern state? Robustness, in their view, would consist of some asymmetry in rights between the (individuals jointly composing the) state and an individual who remains in a state of nature with respect to it (and them). Furthermore, a robust state would have more power and a larger legitimate domain of action than defensive functions. There is no legitimate way to arrive at the asymmetry in rights. Is there some way to continue our story of the origin of the (minimal) state from the state of nature to arrive, via only legitimate steps which violate no one"s rights, at something more closely resembling a modern state? 2 2 Were such a continuation of the story possible, it would illuminate essential aspects of the more extensive states people everywhere now live under, laying bare their nature. I shall offer a modest effort in that direction. Were such a continuation of the story possible, it would illuminate essential aspects of the more extensive states people everywhere now live under, laying bare their nature. I shall offer a modest effort in that direction.

CONSISTENCY AND PARALLEL EXAMPLES.

But first something must be said about the difficulties in convincing someone to change his evaluation of a case by producing a parallel example. Suppose that you are trying to convince me to change my evaluation of a case in this way. If your parallel example is not close, I can accept your evaluation of it while maintaining my original evaluation of the case in question. The closer the parallel example, the more will I be p.r.o.ne to see it it through the filter of my original evaluation. ("That"s not so bad after all, for it"s just like....") There is a similar difficulty with deductive arguments, because a person can reject one of the premisses he previously accepted rather than accept an unwelcome conclusion; but the difficulty often is less pressing. For a long chain of deductive reasoning enables one to start considerably far off, with premisses the person is sure of and won"t see through the filter of his rejection of the conclusion. Whereas an example, to be a convincing parallel, must be very close by. (Of course, the longer the chain of reasoning the more p.r.o.ne the person will be to doubt that the conclusion through the filter of my original evaluation. ("That"s not so bad after all, for it"s just like....") There is a similar difficulty with deductive arguments, because a person can reject one of the premisses he previously accepted rather than accept an unwelcome conclusion; but the difficulty often is less pressing. For a long chain of deductive reasoning enables one to start considerably far off, with premisses the person is sure of and won"t see through the filter of his rejection of the conclusion. Whereas an example, to be a convincing parallel, must be very close by. (Of course, the longer the chain of reasoning the more p.r.o.ne the person will be to doubt that the conclusion does does follow; and a person can reconsider his acceptance of statements after he sees what follows from them.) follow; and a person can reconsider his acceptance of statements after he sees what follows from them.) You might try to isolate my judgment or evaluation about your starting place from my judgment or evaluation of the thing to be affected (thereby achieving the effect of a long chain of reasoning) by presenting a chain chain of examples. You begin with an example far off and step by step arrive at one exactly parallel in structure to the one under dispute. The challenge would be for me, who agrees with you about the far-off initial example (whose distance from the case in question has isolated it from the contamination of being seen through that case"s perspective), to explain where and why, in the step-by-step sequence of pairwise similar examples, I change my judgment. But such challenges to draw the line rarely convince anyone. ("It"s a problem to draw the line, I admit, but wherever it gets drawn it must be on the other side of my clear judgment about the case in question.") of examples. You begin with an example far off and step by step arrive at one exactly parallel in structure to the one under dispute. The challenge would be for me, who agrees with you about the far-off initial example (whose distance from the case in question has isolated it from the contamination of being seen through that case"s perspective), to explain where and why, in the step-by-step sequence of pairwise similar examples, I change my judgment. But such challenges to draw the line rarely convince anyone. ("It"s a problem to draw the line, I admit, but wherever it gets drawn it must be on the other side of my clear judgment about the case in question.") Your strongest case would be made by an exactly parallel example that was glowingly clear in its own right, so my initial judgment about it wouldn"t be shaped or controverted by my judgment about the case under dispute. It is enormously difficult to find such lovely examples. Even with one, you would face the task of explaining wherein it differs from its parallel (under dispute), so that I make one judgment about it and another about the parallel; and and also the task of showing that also the task of showing that this this difference does difference does not not make the cases, for the purposes of the argument, make the cases, for the purposes of the argument, non non parallel. parallel.3 There is a more general puzzle about consistency arguments which lean heavily on the question, "How do you distinguish this case from that?" Philosophers of science often claim that for any given body of data there are an infinite number of possible explanations ; for the explanatory relation E and any body of data d, d, an infinite number of alternative potential explanations stand in the relation E to an infinite number of alternative potential explanations stand in the relation E to d. d. We shall not linger long over why this is said. (Is it We shall not linger long over why this is said. (Is it really really enough merely to say that through any finite number of points an infinite number of different curves can be drawn?) There has not, to my knowledge, been any argument presented to show that for each body of data there exists at least enough merely to say that through any finite number of points an infinite number of different curves can be drawn?) There has not, to my knowledge, been any argument presented to show that for each body of data there exists at least one one explanation, much less an infinite number! It is difficult to know whether the claim is true (one would like to see it proven as a theorem) in the absence of an adequate account of the relation explanation, much less an infinite number! It is difficult to know whether the claim is true (one would like to see it proven as a theorem) in the absence of an adequate account of the relation E. E. If all we yet possess are necessary conditions for If all we yet possess are necessary conditions for E, E, perhaps the imposition of further conditions to attain sufficiency will so restrict perhaps the imposition of further conditions to attain sufficiency will so restrict E E that there won"t be an infinite number of things standing in that there won"t be an infinite number of things standing in E E to to d d. (Though perhaps there is a general argument to show how one can always get new things standing in E E to to d, d, out of old ones that so stand, without repet.i.tions, on out of old ones that so stand, without repet.i.tions, on any any plausible construal of plausible construal of E E.) The usual conditions on explanation require that what stands in E E to to d d essentially contain some lawlike or theoretical statement. In the moral case, what correspond to lawlike statements are moral principles. Isn"t it equally plausible (or implausible) to suppose that essentially contain some lawlike or theoretical statement. In the moral case, what correspond to lawlike statements are moral principles. Isn"t it equally plausible (or implausible) to suppose that any any given set of particular moral judgments can be accounted for by an infinite number of alternative moral principles (not all of them correct)? The usual requirement that moral principles not contain proper names, indexical expressions, and so on, corresponds to the requirement of the philosopher of science that fundamental lawlike statements not contain positional predicates. given set of particular moral judgments can be accounted for by an infinite number of alternative moral principles (not all of them correct)? The usual requirement that moral principles not contain proper names, indexical expressions, and so on, corresponds to the requirement of the philosopher of science that fundamental lawlike statements not contain positional predicates.4 The hope of using generalization conditions to reach the result that only one general moral principle is compatible with a large number of particular moral judgments seems akin to supposing that only one fundamental lawlike statement would account for a given body of data. And, hoping to shift someone off a particular moral judgment by challenging him to distinguish it from another judgment he refuses to make, that is to reconcile it with the opposite judgment he makes, seems akin to supposing that for some logically consistent body of data there is The hope of using generalization conditions to reach the result that only one general moral principle is compatible with a large number of particular moral judgments seems akin to supposing that only one fundamental lawlike statement would account for a given body of data. And, hoping to shift someone off a particular moral judgment by challenging him to distinguish it from another judgment he refuses to make, that is to reconcile it with the opposite judgment he makes, seems akin to supposing that for some logically consistent body of data there is no no fundamental lawlike statement or set of fundamental lawlike statements that would account for it. fundamental lawlike statement or set of fundamental lawlike statements that would account for it.

These suppositions are very strong and go far beyond anything anyone has shown. What then can anyone hope to prove by generalization arguments in ethics? More plausible than the belief that no fundamental moral statement at all (satisfying generalization conditions) accounts for both of the judgments a person makes is the belief that no fundamental moral statement does so which uses only concepts available to that that person. And one may think one reasonably can demand, if not that the person person. And one may think one reasonably can demand, if not that the person come up come up with the fundamental moral statement which accounts for his judgments, at least that there with the fundamental moral statement which accounts for his judgments, at least that there be be one in his moral universe; that is, one using only one in his moral universe; that is, one using only his his moral concepts. There is no guarantee that this will be so; and it is plausible to claim that he may not merely reply: "Well, some moral genius could think up new moral concepts and theoretical terms, as yet undreamt of, and in terms of them account for all of my particular judgments via only fundamental principles." One would have to explain and explore the reasons why a person cannot just rest content with the belief that some fundamental moral law or laws (using some concepts or other) account for all of his judgments. This would appear to be a manageable task. moral concepts. There is no guarantee that this will be so; and it is plausible to claim that he may not merely reply: "Well, some moral genius could think up new moral concepts and theoretical terms, as yet undreamt of, and in terms of them account for all of my particular judgments via only fundamental principles." One would have to explain and explore the reasons why a person cannot just rest content with the belief that some fundamental moral law or laws (using some concepts or other) account for all of his judgments. This would appear to be a manageable task.

The difficulties about parallel examples mentioned above apply to our current procedure. In the probably vain hope that something can be done about the contamination of judgment when one case is seen through a settled view about another, I ask the reader to catch and check himself if he finds himself thinking, "But that"s not so bad, because it"s just like...." Now for the derivation of a more extensive state from our minimal one.

THE MORE-THAN-MINIMAL STATE DERIVED.

In the state of nature, property is acquired initially, let us suppose, in accordance with the principle of justice in acquisition, and thereafter in accordance with the principle of justice in transfer, by exchange of owned property for owned property or for services or commitments, or by means of gifts. Perhaps the precise contour of the bundle of property rights is shaped by considerations about how externalities may be most efficiently internalized (with minimum cost, and so on).5 This notion merits some examination. The property rights of others internalize negative externalities of your activities insofar as you are required to compensate these others for your activities" effects on their property; your property rights internalize positive externalities of your activities insofar as these activities raise the value of things that you can first acquire property rights in. Given boundaries drawn, we can see, roughly and abstractly, what a system that internalized all negative externalities would be like. What, though, would the full internalization of all This notion merits some examination. The property rights of others internalize negative externalities of your activities insofar as you are required to compensate these others for your activities" effects on their property; your property rights internalize positive externalities of your activities insofar as these activities raise the value of things that you can first acquire property rights in. Given boundaries drawn, we can see, roughly and abstractly, what a system that internalized all negative externalities would be like. What, though, would the full internalization of all positive positive externalities involve? In its strong form, it would involve your (each person"s) receiving the full benefits of your (his) activities to others. Since benefits are hard to create, let us imagine this involves the transfer of benefits from others to you, returning the others to the same indifference curve they would have occupied if not for your activities. (In the absence of unrestrictedly transferrable utility, there is no guarantee that this internalization will lead to the agent"s receiving the same amount of benefit as the recipient would have without this internalization.) At first, it strikes one that such strong internalization would eliminate externalities involve? In its strong form, it would involve your (each person"s) receiving the full benefits of your (his) activities to others. Since benefits are hard to create, let us imagine this involves the transfer of benefits from others to you, returning the others to the same indifference curve they would have occupied if not for your activities. (In the absence of unrestrictedly transferrable utility, there is no guarantee that this internalization will lead to the agent"s receiving the same amount of benefit as the recipient would have without this internalization.) At first, it strikes one that such strong internalization would eliminate all all benefits of living in society with others; for each benefit you receive from others is removed and transferred (insofar as possible) back to these others. But since people will desire receiving this payback for benefits rendered, in a free society there will be compet.i.tion among people to provide benefits for others. The resulting market price for providing these benefits will be lower than the highest price the recipient would be willing to pay, and this consumers" surplus would be a benefit of living in a society with others. Even if the society were not free and did not allow price compet.i.tion among potential providers of a benefit (but instead used some other selection device to determine who would provide the benefit) there still would be benefit to living in a society with others. In each situation of full payback for benefits received, there also is full receipt for benefits provided to others. So the advantages of living in society under this scheme would not be the benefits others provide you, but rather the payback they give you for the benefits you provide them. benefits of living in society with others; for each benefit you receive from others is removed and transferred (insofar as possible) back to these others. But since people will desire receiving this payback for benefits rendered, in a free society there will be compet.i.tion among people to provide benefits for others. The resulting market price for providing these benefits will be lower than the highest price the recipient would be willing to pay, and this consumers" surplus would be a benefit of living in a society with others. Even if the society were not free and did not allow price compet.i.tion among potential providers of a benefit (but instead used some other selection device to determine who would provide the benefit) there still would be benefit to living in a society with others. In each situation of full payback for benefits received, there also is full receipt for benefits provided to others. So the advantages of living in society under this scheme would not be the benefits others provide you, but rather the payback they give you for the benefits you provide them.

Here, however, the scheme becomes incoherent if pushed to another level. For you benefit from living in a society where others repay you for the benefits you provide them. Is this this benefit that the presence of others provides you to be internalized as well, so that you pay back fully for that? Do you, for example, pay back your expected payback from others? Clearly this question can be iterated an indefinite number of times, and since receiving payback is a benefit of coexisting with others, there can be no stable result of internalizing benefit that the presence of others provides you to be internalized as well, so that you pay back fully for that? Do you, for example, pay back your expected payback from others? Clearly this question can be iterated an indefinite number of times, and since receiving payback is a benefit of coexisting with others, there can be no stable result of internalizing all all positive externalities. Considerations about drawing forth the activities would lead to a system of person positive externalities. Considerations about drawing forth the activities would lead to a system of person X X"s paying back Y Y for "ordinary" benefits for "ordinary" benefits Y Y provides, instead of one in which provides, instead of one in which Y Y pays pays X X back for the benefits back for the benefits Y Y receives from receives from X X by by X X"s being present and paying Y Y under the "ordinary" system. For under the latter system the benefits would not get provided initially. Also, since it rides piggyback on the "ordinary" one, it cannot under the "ordinary" system. For under the latter system the benefits would not get provided initially. Also, since it rides piggyback on the "ordinary" one, it cannot replace replace it. In the absence of the "ordinary" system and it. In the absence of the "ordinary" system and its its payback benefits, there is nothing for the latter system to operate upon. payback benefits, there is nothing for the latter system to operate upon.

Economists" discussions of internalizing positive externalities do not focus upon the strong strong principle of full payback of benefits. Rather, their concern is that there be more than sufficient payback to cover the costs to the agent of performing the activity with the positive externalities, so that the activity will be called forth. It is this principle of full payback of benefits. Rather, their concern is that there be more than sufficient payback to cover the costs to the agent of performing the activity with the positive externalities, so that the activity will be called forth. It is this weak weak form of payback, which suffices for economic efficiency, that const.i.tutes the subject of the economic literature on internalizing (positive) externalities. form of payback, which suffices for economic efficiency, that const.i.tutes the subject of the economic literature on internalizing (positive) externalities.

Returning to our derivation of a more-than-minimal state: people do not conceive of ownership as having a thing, but as possessing rights (perhaps connected with a thing) which are theoretically separable. Property rights are viewed as rights to determine which of a specified range of admissible options concerning something will be realized. Admissible options are those that do not cross another"s moral boundary; to reuse an example, one"s property right in a knife does not include the right to replace it between someone else"s ribs against their will (unless in justified punishment for a crime, or self-defense, and so on). One person can possess one right about a thing, another person another right about the same thing. Neighbors immediately surrounding a house can buy the right to determine what color its exterior will be, while the person living within has the right to determine what (admissible thing) will happen inside the structure. Furthermore, several people can jointly possess the same right, using some decision procedure to determine how that right would be exercised. As for people"s economic situation, the free operation of the market, some people"s voluntarily uniting (kibbutzim, and so on), private philanthropy, and so on, greatly reduces private dest.i.tution. But we may suppose it either not wholly eliminated, or alternatively that some people are greatly desirous of even more goods and services. With all this as background, how might a state more extensive than the minimal one arise?

Some of these people desirous of more money hit upon the idea of incorporating themselves, of raising money by selling shares in themselves. They part.i.tion the rights that until that time each person alone possessed over himself into a long list of discrete rights. These include the right to decide which occupation he would have a try at making a living in, the right to determine what type of clothing he would wear, the right to determine whom of those willing to marry him he would marry, the right to determine where he would live, the right to determine whether he would smoke marijuana, the right to decide which books he would read of all those others were willing to write and publish, and so on. Some of this vast array of rights these people continue to hold for themselves, as before. The others they place on the market; they sell separate shares of ownership in these particular rights over themselves.

At first, solely as a joke or a novelty, people pay money to buy partial ownership of such rights. It becomes a fad to give another person gifts of ridiculous stock, either in oneself or in a third person. But even before the fad wears thin, others see more serious possibilities. They propose selling rights in themselves that might be of real use or benefit to others: the right to decide from which persons they could buy certain services (which they call occupational licensure rights); the right to decide what countries they would buy goods from (import-control rights); the right to decide whether or not they would use LSD, or heroin, or tobacco, or calcium cyclamate (drug rights); the right to decide what proportion of their income would go to various purposes independently of whether they approved of these purposes (tax rights); the right to determine their permitted mode and manner of s.e.xual activity (vice rights); the right to decide when and whether they would fight against and kill whom (draft rights); the right to decide the range of prices within which they could make exchanges (wage-price-control rights); the right to decide what grounds were illegitimate in hiring or selling or renting decisions (antidiscrimination rights); the right to force them to partic.i.p.ate in the operation of a judicial system (subpoena rights); the right to requisition bodily parts for transplantation in the more needy (physical equality rights); and so on. and so on. For various reasons of their own, other people want these rights or want to exercise a say in them, and so enormous numbers of shares are bought and sold, sometimes for considerable sums of money. For various reasons of their own, other people want these rights or want to exercise a say in them, and so enormous numbers of shares are bought and sold, sometimes for considerable sums of money.

Perhaps no persons completely sell themselves into slavery, or perhaps the protective a.s.sociations do not enforce such contracts. At any rate, there are at most only a few complete slaves. Almost everyone who sells any such rights sells only enough to bring the total (though very very extensive) up to ownership with some limits on its extent. Since there extensive) up to ownership with some limits on its extent. Since there are are some limits to the rights others hold in them, they are not completely enslaved. But many persons have the separate rights in themselves they put up for sale all bought up by one other individual or a small group. Thus even though there are some limits to the ent.i.tlement of the owner(s), considerable oppression is felt by these narrowly held people, subject to their shareholder"s desires. Since this very extensive domination of some persons by others arises by a series of legitimate steps, via volunatry exchanges, from an initial situation that is not unjust, it itself is not unjust. But though not unjust, some find it intolerable. some limits to the rights others hold in them, they are not completely enslaved. But many persons have the separate rights in themselves they put up for sale all bought up by one other individual or a small group. Thus even though there are some limits to the ent.i.tlement of the owner(s), considerable oppression is felt by these narrowly held people, subject to their shareholder"s desires. Since this very extensive domination of some persons by others arises by a series of legitimate steps, via volunatry exchanges, from an initial situation that is not unjust, it itself is not unjust. But though not unjust, some find it intolerable.

Persons newly incorporating themselves write into the terms of each stock the provision that it not be sold to anyone already owning more than a certain number of shares of that stock. (Since the more restrictive the conditions, the less valuable the stock, the number set is not very low.) Over time many of the original small holding companies in a person disintegrate, either because the owners sell their shares in scattered fashion when in economic need, or because many persons buy shares in the holding companies so that at the level of ultimate ownership there is enlarged and more widely dispersed shareholding in the person. As time goes on, for one reason or another just about everyone sells off rights in themselves, keeping one share in each right as their own, so they can attend the stockholders" meeting if they wish. (Given the minuscule power of their vote at these meetings, and the inattention with which their occasional speeches are heard, perhaps it is solely for reasons of sentiment that they retain shares in themselves.) The enormous number of shares held and the dispersal in ownership of these shares leads to considerable chaos and inefficiency. Large stockholder meetings are constantly being held to make the varied decisions now subject to external determination: one about a person"s hairstyle, another about his lifestyle, another about another"s hairstyle, and so on. Some people spend most of their time attending stockholders" meetings or signing proxies over to others. Division of labor creates the special occupation of stockholders" representative, persons who spend all of their time at different meetings. Various reform movements, called "consolidation movements," come into being; two sorts are tried widely. There are the individual consolidating stockholders" meetings in which all who own any sort of stock in any right over some particular specified person meet together to vote. They vote one question at a time, with only those eligible on each question voting. (This consolidation increases efficiency because people who own some share in any right in a particular person tend to own shares in other rights in him as well.) Also there are the consolidated shareholders" meetings in which all persons holding shares in a given right in anyone meet together and vote; for example, the drug conventions, with votes taken on each person consecutively. (The increased efficiency here is gotten because people who buy a share of a particular right in one person tend to acquire shares in the same right in other persons.) Still, even with all of these consolidations it is an impossibly complex situation, taking inordinate time. People try to sell off shares, holding onto one of a kind, "to have some say" as they put it. As people try to sell, the price of each share drops drastically, leading others to buy token shares of rights they don"t yet hold. (Such shares are traded like baseball cards, with people trying to ama.s.s complete collections. Children are encouraged to collect as a way of preparing them for their future role of shareholder.) This great dispersal of shares essentially ends the domination of one person by another identifiable person or small group. by another identifiable person or small group. People are no longer under the thumb of People are no longer under the thumb of one one another. Instead almost everybody is deciding about them, and they are deciding about almost everybody. The another. Instead almost everybody is deciding about them, and they are deciding about almost everybody. The extent extent of the powers others hold over an individual is not reduced; the change is in who holds it. of the powers others hold over an individual is not reduced; the change is in who holds it.

The system at this point is still much too time-consuming and unwieldy. The remedy is a great consolidational convention. Everyone gathers from far and wide, trading and selling shares, and by the end of a hectic three days (lo and behold!) each person owns exactly one share in each right over every other person, including himself. So now there can be just one meeting in which everything is decided for everybody, one meeting in which each person casts one vote, either by himself or by giving his proxy to another. Instead of taking up each person singly, general decisions are made for everyone. At first each person can attend the triannual stockholders" meeting and cast his votes: his own plus any he may have been given in proxy. But the attendance is too great, the discussion too boring and drawn out with everyone wanting to add his words. Eventually it is decided that only those ent.i.tled to cast at least 100,000 votes may attend the grand stockholders" meeting.

A major problem is how the children are to be included. A Great Corporation Share is a valuable and treasured holding, without which one is an isolated nonstockholder, powerless over others. For children to wait until their parents die so they could inherit shares would leave these children shareless for most of their adult lives. And not every family contains exactly two children. Shares cannot just be given given to a youngster. Whose would be given, and would it be fair just to give away Great Corporation Shares when others had bought theirs? So splitting is introduced as a way of allowing young people to enter the guild of stockholders. In the time since each previous triannual stockholders" meeting, to a youngster. Whose would be given, and would it be fair just to give away Great Corporation Shares when others had bought theirs? So splitting is introduced as a way of allowing young people to enter the guild of stockholders. In the time since each previous triannual stockholders" meeting, m m stockholders have died and stockholders have died and n n persons have come of age. The persons have come of age. The m m shares revert to the Board of Directors and are retired, and each of the s remaining shares outstanding splits ( shares revert to the Board of Directors and are retired, and each of the s remaining shares outstanding splits (s + n)/s for one, with the fractions being merged to form for one, with the fractions being merged to form n n new shares that are distributed to the entering youngsters. These are not distributed to them gratis (that would be unfair) but in exchange for their incorporating themselves and signing over all of the stock in themselves to the corporation. In exchange for the stock in themselves, they each receive a Great Corporation Share and become a member of the guild of stockholders, a sharer by right in the joint decisions of the corporation, a part-owner of each other person. Each old stock is in a position to split because the influx of new persons who join the guild means that each stock is a share in more people. So the people joining and the stock splitting justify each other. new shares that are distributed to the entering youngsters. These are not distributed to them gratis (that would be unfair) but in exchange for their incorporating themselves and signing over all of the stock in themselves to the corporation. In exchange for the stock in themselves, they each receive a Great Corporation Share and become a member of the guild of stockholders, a sharer by right in the joint decisions of the corporation, a part-owner of each other person. Each old stock is in a position to split because the influx of new persons who join the guild means that each stock is a share in more people. So the people joining and the stock splitting justify each other.

People view the exchange as an absolutely even trade. Before the exchange a person has one full share in himself, and not even a partial share in any other person. With s s+n- 1 other individuals (to use the same letters as before) in the society, each person incorporates himself into s + n s + n shares, signing over each of these shares to the Board of Directors. In exchange for this he gets a I/ shares, signing over each of these shares to the Board of Directors. In exchange for this he gets a I/s + + n nth share in each of the other s s + + n n-I persons in the society, plus plus the same share in himself. Thus he has the same share in himself. Thus he has s s + + n n shares each representing I/ shares each representing I/s + +nth ownership in each of the s + n n individuals in the society. Multiplying the number of shares he holds by the fraction of ownership in someone that each share represents we get ( individuals in the society. Multiplying the number of shares he holds by the fraction of ownership in someone that each share represents we get (s+n) (I/s+n), which is equal to 1. What he ends up with from the exchange totals to one full ownership, which is exactly what he signs over to the Board of Directors for it. People say, and think, that when everybody owns everybody, n.o.body owns anybody.6 Each person believes that each other person is not a tyrant but rather someone just like himself, in exactly the same position. Since everyone is in the same boat, no one views the situation as one of domination; the large number of pa.s.sengers in that boat make it more tolerable than a one-person rowboat. Since the decisions apply to all equally, one gets (it is said) the rule of impersonal and nonarbitrary regulations rather than the rule of men. Each person is thought to benefit from the efforts of the others to rule wisely over all, and each is an equal in this endeavor, having an equal say with the others. Thus is established the system of one shareholder, one vote. And perhaps fraternal feelings flourish as people realize that they all are inextricably intertwined, each equally shareholder and shareheld, each his brothers" keeper and his brothers" kept. Each person believes that each other person is not a tyrant but rather someone just like himself, in exactly the same position. Since everyone is in the same boat, no one views the situation as one of domination; the large number of pa.s.sengers in that boat make it more tolerable than a one-person rowboat. Since the decisions apply to all equally, one gets (it is said) the rule of impersonal and nonarbitrary regulations rather than the rule of men. Each person is thought to benefit from the efforts of the others to rule wisely over all, and each is an equal in this endeavor, having an equal say with the others. Thus is established the system of one shareholder, one vote. And perhaps fraternal feelings flourish as people realize that they all are inextricably intertwined, each equally shareholder and shareheld, each his brothers" keeper and his brothers" kept.

Occasionally some few malcontents refuse to accept their Great Corporation Shares and refuse to sign the stockholders" guild Scroll of Membership. Refusing to put their John Hanc.o.c.ks on the Declaration of Interdependence, they say they want no part of the system and refuse to grant the system any part of them. Several of them go so far as to call for the dismantling of the corporation! Hotheads on the Board of Directors call for their incarceration, but in view of the youngsters" noncooperation it seems that they haven"t yet granted the Board the explicit right to do that. Some members of the Board maintain that by accepting the benefits of growing up under the wing of the corporation and by remaining in its area of influence, the youngsters have already tacitly consented to be shareheld, and so no further act from them is needed. But since everyone else realizes that tacit consent isn"t worth the paper it"s not written on, that claim commands little support. One member of the Board says that, since all children are made by their parents, their parents own them and so the Board"s ownership shares in the parents thereby give it ownership shares in the children. The novelty of this line militates against its use at such a delicate moment.

We slow the dramatic pace of our tale in order to consider Locke"s views on parental ownership of children.7 Locke must discuss Filmer in detail, not merely to clear the field of some alternative curious view, but to show why that view doesn"t follow from elements of his own view, Locke must discuss Filmer in detail, not merely to clear the field of some alternative curious view, but to show why that view doesn"t follow from elements of his own view, as one might suppose it did. That is as one might suppose it did. That is why the author of the why the author of the Second Treatise Second Treatise goes goes on on to compose the to compose the First. First.8 Ownership rights in what one has made would seem to follow from Locke"s theory of property. Hence Locke would have a real problem if G.o.d who made and owned the world Ownership rights in what one has made would seem to follow from Locke"s theory of property. Hence Locke would have a real problem if G.o.d who made and owned the world gave gave Adam sole ownership in it. Even though Locke thought and argued that this hadn"t happened (chap. 4), he also must have wondered what the consequences would be if it had happened. He must have wondered if his views would entail that Adam sole ownership in it. Even though Locke thought and argued that this hadn"t happened (chap. 4), he also must have wondered what the consequences would be if it had happened. He must have wondered if his views would entail that if it had if it had then others would need Adam"s permission to use his property to sustain themselves physically and so would be within his power. (If so and if a gift can be bequeathed then....) Views whose satisfactory result (no domination of some by others) depends upon a contingency which could have been otherwise (no such gift by G.o.d to Adam) should leave someone holding them very uncomfortable. (I ignore here the reply that G.o.d is necessarily good and so his not making such a gift is then others would need Adam"s permission to use his property to sustain themselves physically and so would be within his power. (If so and if a gift can be bequeathed then....) Views whose satisfactory result (no domination of some by others) depends upon a contingency which could have been otherwise (no such gift by G.o.d to Adam) should leave someone holding them very uncomfortable. (I ignore here the reply that G.o.d is necessarily good and so his not making such a gift is not not contingent. A moral view which must take contingent. A moral view which must take that that route to avoid being overthrown by facts that look accidental is very shaky indeed.) Thus Locke discussed (I, sects. 41, 42) an essential element of his theory when he speaks of every man"s "t.i.tle to so much out of another"s plenty, as will keep him from extreme want, where he has no means to subsist otherwise," which the other may not withhold. route to avoid being overthrown by facts that look accidental is very shaky indeed.) Thus Locke discussed (I, sects. 41, 42) an essential element of his theory when he speaks of every man"s "t.i.tle to so much out of another"s plenty, as will keep him from extreme want, where he has no means to subsist otherwise," which the other may not withhold.

Similarly Locke must explain why parents don"t own their children. His major argument (I, sects. 52-54) seems to depend upon the view that one owns something one makes only if one controls and understands all parts of the process of making it. By this criterion, people who plant seeds on their land and water them would not own the trees that then grow. Surely most of what most of us do is to intervene in or originate processes whose complete operation we do not understand, yielding a result we could not completely design. (Who knows all all of what physicists say is relevant to materials having the properties they do and to forces working as they do; and who knows what the physicists don"t know?) Yet in many such cases, Locke does want to say that we own what we produce. of what physicists say is relevant to materials having the properties they do and to forces working as they do; and who knows what the physicists don"t know?) Yet in many such cases, Locke does want to say that we own what we produce.

Locke offers a second argument: "Even the power which G.o.d himself exerciseth over mankind is by right of fatherhood, yet this fatherhood is such a one as utterly excludes all pretense of t.i.tle in earthly parents; for he is King because he is indeed maker of us all, which no parents can pretend to be of their children" (I, sect. 54). It is difficult to puzzle this out. If the point is that people cannot own their children because they themselves are owned and so incapable of ownership, this would apply to owning everything else they make as well. If the point is that G.o.d, far more than a child"s parents, is the maker of a child, this applies to many other things that Locke thinks can be owned (plants, nonhuman animals); and perhaps it applies to everything. (The degree degree to which this holds seems an unsubstantial base upon which to build a theory.) Note that Locke is to which this holds seems an unsubstantial base upon which to build a theory.) Note that Locke is not not claiming that children, because of something about claiming that children, because of something about their their nature, cannot be owned by their parents even if these make them. He does nature, cannot be owned by their parents even if these make them. He does not not claim that something about people (who have not done anything unjust for which their lives are forfeit, sects. 23, 178) bars ownership in them by their maker, for he holds that G.o.d owns man by virtue of making him in all his exalted natural properties (sect. 6). claim that something about people (who have not done anything unjust for which their lives are forfeit, sects. 23, 178) bars ownership in them by their maker, for he holds that G.o.d owns man by virtue of making him in all his exalted natural properties (sect. 6).

Since Locke does not hold that (1) something intrinsic to persons bars those who make them from owning them-to avoid the conclusion that parents own their children, he must argue either that (2) some condition within the theory of how property rights arise in productive processes excludes the process whereby parents make their children as yielding ownership, or (3) something about parents bars them from standing in the, or a particular, ownership relation, or (4) parents do not, really, make their children. We have seen problems with Locke"s attempt to work 2, 3, and 4. The latter two being unpromising, someone of Lockean persuasion would have to work out a variant of 1 or 2.

Note that Locke"s strong denial that parents make their children, causing these beings, removes one base on which to found the responsibility of parents to care for their children. Thus Locke is reduced to saying that the law of nature requires such parental care (sect. 56), as a brute moral fact, apparently. But this leaves unexplained why it requires the care from the parents, from the parents, and why it isn"t another case of someone"s receiving "the benefit of another"s pains, which he had no right to" (sect. 34). and why it isn"t another case of someone"s receiving "the benefit of another"s pains, which he had no right to" (sect. 34).

Our tale now must be brought to a close. About the youngsters, it is decided they do not have to join the stockholders" guild, after all. They can refuse its benefits and leave the corporation area, without any hard feelings. (But since no settlement has survived on Mars for more than six months there are strong reasons for remaining on earth and becoming a stockholder.) Those invited to love it or leave it respond by claiming that since the corporation doesn"t own all the land, anybody can buy some land in the corporation area and live as they wish. Though the corporation hadn"t actually bought up all the land itself, the original corporation rules, adopted by everyone at the great consolidational convention, are viewed as prohibiting the secession of land from the corporation"s control.9 Can the corporation, it is asked, allow another corporation to spring up in its midst? Can it tolerate the dangers of isolated nonstockheld individuals; in a word, ancorpy? Can the corporation, it is asked, allow another corporation to spring up in its midst? Can it tolerate the dangers of isolated nonstockheld individuals; in a word, ancorpy?

Some suggest that the recalcitrant people be allowed to opt out of the corporation yet remain within the territory. Why shouldn"t they be allowed to stay in the midst of the corporation, choosing precisely those contacts with the corporation they wish to have, formulating their own personal package of rights and duties (above and beyond nonaggression) vis-a-vis other persons and the corporation, paying for the particular things they receive, living independently? 10 10 But others reply that this would be too chaotic; and that it also might undermine the corporate system. For others ("gullible others," it is said) also

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