Subversive Innovation: A Strategic Reading of Nozick’s Framework for Utopia

Reprinted from The Library of Economics and Liberty

Most students of political philosophy have had some contact with Robert Nozick’s Anarchy, State and Utopia (ASU)—specifically Part II. And for good reasons. Part II is essential, not only because it sets out devastating critiques of competing moral-political doctrines but also because it awakens our deepest intuitions about the coercion required to make those doctrines a reality.

Nevertheless, Part III: A Framework for Utopia (henceforth Framework) I believe is Nozick’s most important contribution. The Framework is certainly under-appreciated compared with familiar thought experiments about people giving their money to watch Wilt Chamberlain. However, my objective in persuading readers of Part III’s importance is not an effort to rearrange the philosophical canon for students. Instead, my goal is strategic: Nozick’s Framework recommends a mindset that can inspire more subversive innovators.

Nozick’s Framework, properly applied, offers those who share his ideological priors a sketch of how to liberate more human beings from power and poverty. Such a project is more valuable than arguing endlessly about ideal justice, as to realize ideal justice is practically impossible.

Debates about minarchism or anarchism can distract us from more salient questions about how we create more markets in governance despite the imposed Westphalian order. I suggest we reshuffle Nozick’s thesis to transform his theoretical framework into a practical mindset. Finally, we can use the Framework as a strategic lens for spawning subversive innovations that promise each of us a society that comes closest to our ideals.

Minarchy vs. Anarchy: The Debate is Largely a Distraction

Before getting into a theoretical inquiry about minarchism or anarchism, permit me to offer a brief overview of Nozick’s rationale in Part III. It goes like this: to the extent there is a justifiable state monopoly on violence (Nozick’s minarchist Framework), the Framework’s job is to facilitate the free formation of new communities, which we’ll follow Nozick in calling Utopias. Finding (or founding) a Utopia is a discovery process. So the Framework’s function is more or less to protect the rights of individuals exiting and entering new Utopias. Competition for members among Utopias accelerates the discovery process and means that the Utopias must serve their members sustainably to survive.

We can get lost in a series of questions about such a Framework’s details, including whether or to what extent the Framework needs to be a monopoly, a coalition, or a confederation, or whether it could run on a set of governance protocols that we might consider anarchist by degree. Such arguments, I contend, like the wider debate between minarchists and anarchists, are highly speculative and largely a distraction.

Nozick built almost the entirety of ASU on post hoc rationalization of the following statement: “Individuals have rights, and there are things no person or group may do to them (without violating their rights).” Without detouring into metaethics debates, we can interpret this statement as aspirational and normative. Beyond moral suasion, I seriously doubt Nozick thinks of rights as somehow inhering in people like a protective forcefield. Certainly, he would acknowledge that—whether or not rights exist objectively—powerful people will continue to violate others’ rights despite moral suasion. They do, and they will.

My argument here is not designed to settle debates among academics in Abstractionland, much less to go toe-to-toe with someone as formidable as Nozick on matters of moral theory. Instead, I simply assume that Nozick and I share similar values, whatever their metaphysical status. Indeed, as he opens ASU, Nozick starts with the Kantian presumption about rights, which we can safely interpret as something like the ‘sacredness of persons.’ I share this value. I hope you do, too. But Nozick doesn’t try to justify that presumption in ASU and uses Part II instead to prime readers’ intuition pumps about situations in which other theorists throw rights out the window. I will do something similar but perhaps more attenuated: Seek solidarity with others who share Nozick’s values. In other words, if you don’t value human freedom or don’t think of individuals as sacred this article might not be of interest to you.

Nozick constructs ASU in a manner that he believes will limn an ideal institutional substrate that will protect sacred persons. I am doing the same, only acknowledging more explicitly that we (those of us who practice a sacred-persons doctrine) are operating in a world filled with those hostile to our values, including the values of autonomy, property rights, and—indeed—the liberal sacredness of persons.

So, we are not really, as perhaps Nozick was, attempting to persuade those hostile to our values to consider a different political philosophy, even a pluralistic one like that in ASU. Instead, we are presuming the value of human freedom and the sacredness of persons. We seek to instantiate those values in a hostile world by offering people choices. And we employ practical means–especially entrepreneurial means. Some of those means will involve traditional arguments about ideal justice, but that’s marketing (or what economic historian Dierdre McCloskey refers to as “sweet talk.”) Still, we know that most of these arguments smash into the sturdy barricades that protect real political authority and its supplicants.

By this point, I hope you can see why debates about minarchism and anarchism are mostly a distraction—unless, that is, one’s strategic focus employs means that are ostensibly minarchist or anarchist. Governance institutions, including any given person’s Utopia, exist in a world of Hobbesian states with rabid supporters who have authoritarian bees in their bonnets. Arguments about ideal justice resemble those about how many angels can fit on the head of the proverbial pin. Our ideals are our North Star but may never be our destination. In that sense, we must sit more squarely in the reality that arguments about ideal justice do little to create Utopias, much less a Framework for Utopia. Instead, we must begin to turn to strategic means to move toward our ideals, which are niches or zones—systems—for sacred persons that must be created in a hostile fitness landscape crawling with predators and parasites.

A Framework for Utopia-Building: Reshuffling Part III’s Thesis

The basic idea of Nozick’s Framework is that some people have utopian aspirations, but they have inadequate knowledge for realizing or predicting their idea of Utopia in a complex world. The only way to discover any given Utopia is for people to try their hands at fashioning it and inviting others to join. According to Nozick, accomplishing this requires some general set of procedures—institutions—that make governance pluralism possible at all. To reiterate then, it looks like this:

• Some people want to live in their idea of Utopia, even though those self-same people have inadequate knowledge for realizing Utopia.
• People should be permitted to attempt to build their best approximation of Utopia so long as such attempts do not injure others in their parallel (peaceful) attempts.
• The Framework for Utopia is a theoretical construct that can and should be turned into a set of political institutions with pluralistic Utopia-building as its mission.

From this, one might start to imagine institutional or constitutional designers busily setting out to instantiate the Framework in a body of law.

At this point, Nozick must surely be aware of the problem we suggested above, namely that there are authoritarians among us. They eat at the same restaurants. They vote. And they hold forth on social media every day. Nozick calls them “imperialistic utopians” who seek “the forcing of everyone into one pattern of community.” These utopians have no time for pluralism.

Apart from a small minority who might read this, I’d speculate that once you factor out the politically apathetic, most people can be referred to as “imperialistic utopians,” even in the United States, which the Founders built on the ideas of freedom and pluralism. The media landscape provides ample evidence, however anecdotal, for such speculations. At the very least, we know that powerful authorities are likely to attack any Framework like the one Nozick imagines. In the United States, the 9th and 10th Amendments are our closest purported legal means of guaranteeing some measure of pluralism. But political operatives and lawyers armed with notions about a “living constitution” rendered these Amendments inert long ago.

So what’s to be done? That’s not a terribly philosophical question. Indeed, it’s just the sort of questions philosophers routinely avoid. Nevertheless, I have asked it, and I will now try to answer it. I will do so by appealing to Nozick’s genius while reorienting it to strategic ends.

• Nozick wants people to pursue building their idea of Utopia though a framework hospitable to pluralism, even though most people hold views that militate against the Framework for Utopia.
• Instead, the Framework for Utopia can serve as a strategic construct—niche carving—through which dissidents can pursue various Utopia-building projects, despite obstacles.
• People who share our values should vigorously pursue the construction of their best approximation of Utopia, so long as such attempts do not injure others in their parallel (peaceful) attempts, and they are aware of the risks that authoritarian power presents.

There is no doubt Nozick was doing his job by offering a philosophical case—not just about the facts of pluralism but also about the need for a pluralism-enabling framework.

In reshuffling Nozick’s premises into a strategic Framework of niche creation I call subversive innovation, I am simply looking around at the world at the authoritarian powers in our midst. Then, I seek weak joints or leverage points to exploit, in which one might apply a liberatory strategy or recruit new constituencies through entrepreneurial means. Carving niches means experimenting with new matrices of governance, however modest, hoping that these matrices prevail in competition. Such is the delicate dance of dissidence.

Asymptotic Anarchy: Innovation and Entrepreneurship are Subversive Acts

Asymptotic anarchy is a process that, through innovation and experimentation, might move us closer to an ideal, even if we never fully realize it. In mathematics, an asymptote is a line that a curve approaches as it heads towards infinity. We might call that curve “degrees of frictionless freedom.” Metaphorically, we can represent the movement towards anarchy as a similar function towards an ideal state: We might move ever ‘closer’ but never get there. The ideal state would be one in which humanity has more or less eliminated the initiation of violence by one person against another and reduced the costs—to near zero—for any given person to exit a governance system that isn’t serving her. We refer to this ideal state as “anarchy” because it means no rulers. In this condition, one can join any existing community or association. In short, all governance under anarchy is rooted in “the consent of the governed.”Of course, one might consent to another’s rule in such a condition, but the consent provision—along with a right of exit—is basic to the ideal.

Now let’s turn to the idea of transaction costs. The main issue with Nozick’s theoretical Framework is that it doesn’t offer a full accounting of such costs, which, to be fair, is not really the job of theory. So it’s up to us to figure out how to apply a revised Framework in our current circumstances. For example, the sort of dominance hierarchies that reign today, even in our vaunted democratic republics, not only come with incentives for self-preservation and expansion, they almost always come with legions of supplicants who depend on their influence or largesse. Public choice practitioners explore the dynamics of political authority interacting with special interests, among other phenomena. These aspects of Public Choice, a sub-discipline of political economy, linger in the background.

In light of these real-world dynamics, if we move towards some ideal, we won’t do so simply by imagining the Framework as the ideal, although that can be helpful in knowing our why. We must also apply the reshuffled Framework as a strategic focus for a continuous process of asymptotic anarchy carried out by dissident innovators and entrepreneurs with diverse conceptions of the good. In these different conceptions lie customer value propositions associated with some system the entrepreneur proposes as an alternative.

Notice the term customer. Despite connotations of bourgeois materialism, I submit that the Framework-as-Strategy mindset prompts subversive innovators to think of people as customers rather than citizens, because the latter resides in the magisterium of must (politics), rather than in the magisterium of ought, which includes both morality and markets. That is, you ought to do x because x is good is a moral claim and you ought to try y is a marketing claim. Both appeal to one’s ability to choose. In the magisterium of must, as in you must pay for z, or else, officials appeal to their ability to compel you. Thus, the transition from a citizen-centric mindset to a customer-centric mindset lies first in your willingness to remain in the domain of ought, and then to serve people better by offering them something they can choose that is better than the status quo.

According to management consultant Matt Gilliland,

When the perceived (risk/time-discounted) benefits of switching to an alternative (system) exceed the perceived benefits of the status quo (system)—factoring in the perceived switching costs—people will switch to the alternative.

We can translate this heuristic into a series of steps:

1. Create overwhelming value in an alternative system.
2. Expose the diminishing benefits of the status-quo system.
3. Reduce switching costs.
4. Change people’s perceptions of the alternative relative to the status quo.
5. Serve customers well and continuously improve.

Now, consider a few examples of the above, which can serve as object lessons:

• Uber persuades billions to use their platforms instead of the taxi cartel.
• Poor performance and bad policies send parents to myriad educational alternatives.
• Satoshi Nakamoto offers the bitcoin network as an alternative to the fiat monetary system.
• Legal innovators set up a special economic zone in Hondurus (Prospera), which has some of the least restrictive institutions on earth.

This handful of examples demonstrates subversive innovation. Notice in each example that there is a lot of elbow room in what constitutes a ‘system.’ While none is perfect, each system iterates in its efforts to practice steps 1-5 in terms of customer focus. Each effort carves out a niche that offers one the option to exit a legacy system (a la Hirschman) and enter an alternative system. It might be that in today’s hostile environment, it will be quite difficult to do wholesale institution building from scratch. There will be no ‘constitutional moment.’ Instead, each effort might be far narrower, but slice into some aspect of a more comprehensive status quo institution.

But note that system switching from the magisterium of must (politically-contrived system) to that of ought (market-derived system) is different from going from one market-derived system to another, for example, when people abandon MySpace for Facebook. In such cases, ceteris paribus, the more desirable system wins out as the absence of customers destroys the venture that creates less perceived value. By contrast, politically-contrived systems of tax and transfer have a competitive advantage in that they can use compulsion to trundle along, despite mass defections and relatively poor performance. And those dependent on the status quo will go to great lengths to protect their systems and to sow seeds of doubt about nascent competitors.

That is why subversive innovators must be prepared for counter-strategy.

Specifically,

1. Find ways to entrench the status quo system.
2. Sow uncertainty and doubt about the alternative system.
3. Attempt to raise your competitor’s switching costs.
4. Change people’s perceptions of the status quo relative to the alternative.
5. Maintain perceptions in lieu of system improvements.

In response to such counter strategies, subversive innovators won’t be able to rely on the coercive apparatus of the tax and transfer state. But they can rely on a commitment to telling the truth. So, if the subversive innovator finds herself in narrative warfare with her enemies, the value she creates for customers is a truth that will be difficult (though not impossible) to overcome. The subversive innovator will simply have to create more value, and customers can shout it from the rooftops.

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