So that wouldn't get you through a philosophy graduate exam right?
He's just, he's just basically hand-waving, it seems.
But actually, he's hand-waving at something and
I need to spend a few minutes talking about he's hand waving at.
He's hand-waving at an old literature in welfare economics on
the idea of compensation, that is worth spending a couple of minutes on.
Because I think it shows the, the limits of what Nozick's trying to do and
it illuminates how far he can actually get.
A number of famous economists, Kaldor and Hicks,
Nicholas Kaldor and John Hicks Tibor Scitovsky and
Paul Samuelson spent a huge amount of effort and
energy studying the concept of compensation in the 1940s and 1950s.
And they were interested in trying to
make Pareto-undecidable comparisons, basically.
So for, if we want to just put it in terms of a Pareto diagram.
If you, if you recall when we did the Brighter principle, we've got this
standard diagram here with A is utility and B is utility and some state is pro X.
Right?
We, we said that only the things northeast of X are unequivocally better, right?
That's the Pareto superior class.
Everyone learns that in Econ 101, right?
And we said that the kind of move from X to Y is Pareto undecidable, right?
Because you're taking from A and giving to B and since we don't allow
interpersonal comparisons of utility, these distances don't mean anything.
So we can't say, even though it looks like it.
We can't say, B gains more than A loses, right?
If we are moving from X to Y there.
But what interested Kaldor and Hicks and, and Scitovsky and
Samuelson was what about a movement from X to Z?
It's also Pareto undecidable, right?
But on the other hand, we're starting from something that's not on
the Pareto possibility frontier to something that is on it.
Right?
So that's, those two zones that I've marked in red there.
They, they have the quality that they're on the possibility frontier, right?
That means they cannot be improved upon, but they're Pareto undecidable.
Right? >> Right.
>> So what they wanted to, to try and figure out is,
isn't there a way to be able to say that Z is better than X?
Because we've gone from not being on the possibility frontier to being on
the possibility frontier, even though it's Pareto undecidable.
And there, there were enormous amount of effort and energy and
mathematical ec, computation put into this test.
And what, when Nozick is hand waving, he's really hand-waving at this literature.
But what he doesn't tell us is that at the end of the day, the answer was no.
It isn't really possible to say that Z is better than X without doing interpersonal
comparisons of utility, because the only way you can make a principle of
compensation work is to have some metric of compensation, such as money.
And the minute you do that, you're reducing everything to money,
you're making interpersonal judgements of utility.
So, you know, if you think about if you think about when compensation
is actually paid in the world there is the, the doctrine of eminent domain.
Do you know what the imminent domain is?
>> I don't know.
The se, seizure of private property by, by the government.
>> Yeah. >> For what, whatever use.
>> Right. So,
if the government wants to build a railroad or, or a road and
people don't want to sell their houses, because they don't want to move.
They have to day, the eminent domain gives the government the right to
take those things and then they say, well, you will be compensated.
What do you think then happens?
>> Well, the, the, the person who is,
whose land is being taken, they, they say, oh, it's worth all this money, and-
>> Right.
And so what happens, then do you think?
>> They get paid less than that.
[LAUGH].
>> Well, you, so, so what actually happens, you know, they go out and
they send a realtor out and they look at what properties in
that neighborhood have sold for and they look at the condition of the house.
And, and eventually, they make a judgement and they say that's what it's worth.
Okay.
But you might say, yes, but this is, this is the house I was born in.
>> Hm. >> It has infinite value for
me that you're not recognizing.
And Nozick would have to take that seriously, because for
him, consent is, you know, is the name of the game.
Right?
So, you know, it is a big problem for him.
He's going to have to make interpersonal comparisons of utility.
So the hand-waving doesn't solve the problem in the sense that he want,
he needs it to solve the problem.
But the, then the question is, well, how serious is it for his argument?
And I think that the best case for his argument, it's a, it's a little bit
analogous to Mill's discussion of the Harm Principle that we talked about earlier.
Where Mill says, first you decide whether or not there's a harm, right?
If, if there's no harm as with drinking alcohol provided you're not driving and
all that, just drinking alcohol,
just getting yourself paralytically drunk in your room and
feeling bad the next day, you haven't harmed anybody else, then it's protected.
If there is inevitably going to be a harm, then you have to decide what to do about.
Well, Mill has one answer to do about what to do about it.
So I think that, you know it, all compensation tests involve some
interpersonal comparisons of utility, there's just no way around that.
But there still might be a defense for Nozick, which would be along those lines.
He would say, it's, it's unavoidable.
So we should only make interpersonal comparisons where this is unavoidable.
We shouldn't make it in any other circumstance, except where we,
you know, so yes, there's going to be ultimately some rough justice,
just as with the homeowner who says, this house is infinitely valuable to
me because I was born here and that's not reflected in the market price.
That person loses.
You say, well, it's tough, you know?
But we can't be you know, he'd go back to this contien ordintell scan.
Society can't be obliged to indulge you any further than this,
because it's not possible to indulge you any further than this.
If you say, nothing would compensate you.
Yeah.
So that's one way he could go.
But the other is and I think he would, he would also say, these are,
these are not alternatives, they can both be right.
You see, go back to the value pluralism argument.
When I said to you earlier, the reason Nozick is
against pattern theories of justice and just defends rights as,
as he calls them side constraints on actions is we don't agree, right?
We don't agree on what a just distribution in society should be.
Some people are egalitarian, some are meritocrats, some are Rawlsians
people have different views and, and there's no way to resolve that.
So another way of putting it is
there's an important difference between redistribution and compensation.
If, if you walk up to me and punch me in teeth [LAUGH] and I sue you, okay?
The question is going to be what would restore the status quo ante, right?
The, the damages.
When I sue you for damages, how much harm did you do to me and will,
there'll be an argument about it and, and, you know, I can, I'll say, well,
in addition to having my teeth repaired and being paid for the lost you know, work
time, it was humiliating and I, you know a, humiliation for me is like $10 million.
And so that we'll argue about it and
maybe it won't be, we'll never a, agree about the harm was.
And eventually, the court's just going to decide.
>> Hm.
>> Right?
So that's a hard question, but still it's not as hard as
deciding what the just distribution of wealth in a society should be.
Right?
If back, compensation in other words, it's backward looking.
It's, it only requires the judge or the jury or
whoever it is to decide what would put Ian Shapiro back on the same
indifference curve he was before he was punched in the teeth.
Right? It's a relatively contained question and
it's backward looking.
It's how do you undo some change to, to what would have, what, what it, how do
you recreate what would have been the case, had you not punched me in the teeth?
That's the only question.
If we're going to start talking about re, redistribution to create a just society,
it's a much bigger question and then you're stuck with this problem that
nobody agrees on what a just distribution is.
So, I think that Nozick would be forced to concede that, that he has to make some
interpersonal comparisons at the end of the day to make this compensation work and
get from a de facto state to a de jure state and talk about what's legitimate.
But still he wouldn't back down completely,
he would make both of these claims.
We're only going to make the int, the interpersonal comparisons that
are unavoidable and we'll do the best we can there and
then it's still a much less demanding criterion than
trying to decide what's just for the whole distribution of the society.
So, I, he wouldn't let go of his compensation test completely.
And I think that partially works for Nozick and it partly fails for
reasons, we'll talk about next time.
But I want you to focus on a different question for
the beginning of next time's class.
You'll, if you read the Nozick book, you'll find that he,
he gives an example in there of the basketball player, Wilt Chamberlain.
And Wilt Chamberlain has in, in Nozick's fictional example.
He has a who was Wilt Chamberlain?
>> He's an NBA player.
>> Yeah, one of the best, probably the, the best of his generation.
Right? >> Hm.
>> Certainly, the all time great player.
Yeah at least until that time, you know, maybe people might say,
Michael Jordan or others have surpassed him since.
But in, in his day, he was the best.
So Chamberlain has a deal just like any,
any other professional sports player with his team.
He, he, you know, they, they have a contract and
he gets paid a certain amount.
But then he says, I want a different writer on my contract.
I want for every home game, there'll be a, a box and
people who want to see me play have to put a quarter in the box and
I get the quarters from the box.
Okay?
Seems like a strange example and as I said to you at the beginning of our discussion
of Nozick, I said he thinks he has an answer to the left critic of markets,
markets, the garbage in garbage out problem,
we talked about in the beginning of last time.
Yeah.
This is his answer, okay.
Now that'll seem very cryptic, but, so what I want you to think about
between now and next time is why would this Wilt Chamberlain example,
where he's got a part of his contract that there will be a 25 cent surcharge for
every ticket for a home game and that 25 cents goes to him.
How in the world can that translate into
a devastating critique of the left critic of markets?
We'll start with that problem next time.
