Capitalism for Consenting Adults

These days capitalism's only committed opponents seem to be the freaks who assemble to protest meetings of the World Trade Organization. But it wasn't so long ago that, even in the "free world," free markets had very few friends. American academia and media were rife with the notion that the United States and the Soviet Union were morally equivalent, and that heavy government intervention was needed to correct capitalism's manifest injustices. The dominance of statist ideas was so complete that it was a Republican president, Richard Nixon, who declared, "We're all Keynesians now," and imposed wage and price controls.

One of the few to challenge the consensus, Harvard philosopher Robert Nozick, died last week of complications from stomach cancer at the age of 63. The dapper Nozick -- who dressed in three-piece suits and comported himself, in the words of a former student, "like an investment banker" -- bravely suggested to Nixon's America, with its libertine social mores, that consenting adults have rights outside the bedroom too.

Nozick, who founded Columbia University's chapter of the leftist Students for a Democratic Society, would have seemed an unlikely champion of capitalism. But while doing graduate study at Princeton he read economists Milton Friedman and Friedrich Hayek, and grew convinced that capitalism had moral as well as productive virtues. The result was his celebrated book "Anarchy, State and Utopia," published in 1974. It played a critical role, along with the writings of Messrs. Friedman and Hayek, and those of the novelist Ayn Rand, in spreading pro-market ideas to the Republican Party, Thatcherite Britain and beyond.

In university classrooms, Nozick's masterpiece is often paired with John Rawls's "A Theory of Justice" (1971). The juxtaposition is no accident, since Nozick wrote his book in reply to his Harvard colleague.

At the time, the dominant moral and political theories were utilitarian -- justice meant maximizing human pleasure and minimizing pain. But this meant individuals might sometimes be sacrificed for the greater good, which Mr. Rawls found unacceptable. He wanted a theory of justice based on individual rights. To derive it, he asked readers to perform a thought experiment under a "veil of ignorance." Imagine that you don't know if you're a man or a woman, rich or poor, smart or dumb. What kind of society would you like to be born into?

Mr. Rawls concluded that anyone presented with such a choice would want to play it safe and not risk being stuck at the bottom. From this premise he derived the sweeping conclusion that all basic goods should "be distributed equally unless an unequal distribution. . . is to the advantage of the least favored."

"A Theory of Justice" was an enormous hit, welcomed by most American liberals as a justification of an expansive welfare state. Supply-side economists, of course, would soon argue that very large inequalities might benefit the least well-off. But Nozick was first to the punch, and with a moral critique.

What Nozick argued was that Mr. Rawls seemed more concerned with material equality than with individual rights. The achievement of such equality through taxation and income redistribution required extensive coercion -- the treatment of individuals and their work as means to others' ends (a "just" society), a violation of rights not unlike the problem Mr. Rawls saw in utilitarianism.

Nor was the kind of income redistribution Mr. Rawls appeared to favor a one-time event. Maintaining such equality would require what Nozick called, cleverly co-opting the spirit of the decade, continuous interference with "capitalistic acts between consenting adults." Hence Nozick's famous Wilt Chamberlain argument, in which he pointed out that even if you start with an equal distribution of everything, individuals will voluntarily transfer more money to some people -- say good basketball players -- than others. The only way to maintain equality is to forbid free exchange, or to take away (through taxes) the earnings of the rich. Neither approach fits easily with Mr. Rawls's concern with freedom.

For Nozick, only a very limited state was consistent with respect for individual rights. Capitalism was not a necessary evil to be tamed, but the moral embodiment of how free and rational individuals should interact with each other.

Nozick's brilliance forced the academic establishment to take libertarian ideas seriously, and inspired America's fledgling libertarian movement and the Reaganite wing of the Republican Party. But he was to disappoint fans who hoped he would offer his thoughts on political issues of the day. Unlike his colleague Cornel West, he refused to use his university platform for crude political purposes; and unlike Mr. Rawls, he refused to spend 30 years rewriting the same book.

The constant in Nozick's work was his delight in rebellious thinking: The same man who took on the welfare-state consensus went on to challenge the philosophical establishment too, turning attention to mushy subjects (love, friendship, happiness) that the scientifically minded logicians who dominated American philosophy found taboo.

That kind of rebellion is what the academy should be all about, but often isn't. One suspects that Harvard President Lawrence Summers, fresh from his run-in with Mr. West, was heartfelt in eulogizing Nozick: "Harvard and the entire world of ideas have lost a brilliant and provocative scholar, profoundly influential within his own field of philosophy and well beyond."

Mr. Pollock is an editorial page writer at the Journal.

Updated January 28, 2002 12:46 a.m. EST