Robert Nozick's Entitlement theory is mainly connected with the issue of property and transfer of property but it is essentially based on the issue of Justice and how it comes into question when property is being transferred or owned. Nozick believes that property rights need to be studied in the social context to understand how transfer and owning of property can give rise to the issue of justice within the society. He believes that when a property that was previously not owned by anyone is transferred to someone and an individual becomes the owner of that piece of land, it is the duty of the government to ensure that no one is left worse off due to this transaction. This is the Libertarian view of property rights and was previously raised by some important thinkers including Aristotle and Thomas Aquinas. Rousseau and Bentham also touched upon the issue but Robert Nozick in 1974 offered the most comprehensive view of justice as it relates to property ownership.
Funnell (2001) writes: "Nozick's entitlement theory of justice, which owes much to Adam Smith and the utilitarianism of Bentham, proposes that distributions of wealth are just if people are entitled to their holdings as a result of being acquired through the exercise of the initial capacities with which they were born or if their property was transferred to them justly as a result of freely entered into exchanges. Nozick rejects the idea of the state taking responsibility for achieving social justice if this relies upon a conception of distributive justice in which voluntarism is corrupted. The state, according to Nozick, should limit itself to ensuring that entitlement rights, once confirmed as just, are secure. The dependency that Nozick sees between justice, markets and the sanctity of entitlements derived from property offers an attractive lens through which accounting historians can examine the relationship between accounting and matters of justice."
Robert Nozick's entitlement theory is based on three important principles namely "Principle of Acquisition of Holdings, the Principle of Transfer of Holdings, and the Principle of Rectification of Justice in Holdings." (Nozick) The author examines the way transfer of property takes place and maintains that it is duty of the state and the individual owner to ensure that justice is not being neglected in property ownership and holding matters. The first principle in this connection deals precisely with the ownership of a property that was previously owned by someone else or was simply state property. This can be some piece of land that was owned by everyone and no single individual had the right to claim it as his own or it can be a certain property owned by some individual who willingly wants to transfer the ownership. Nozick's theory is based on the idea of natural rights; rights that are not granted by the state but by nature itself. The author maintains that it is important for individual to safeguard the natural rights of others or else the entire social and moral fabric of a society would collapse. In other words, Nozick believed that when a person comes to acquire something such as a piece of land, he must make sure that the first and second principles are not violated in the process.
There are a great number of ways that a person may acquire things, and as long a person doesn't violate the first and second principle of the Entitlement Theory (the principle of Acquisition of holdings, the principle of transfer of holdings), such acquisitions are just." (Yamil Guevara)
In other words, an individual can own everything as long as his acquisition of that thing doesn't hurt the natural rights of someone else. This brings us to the second principle of Nozick's theory. The second principle deals with the subject of transfer of holdings. Here, Nozick states that when ownership is being transferred, it is important to see that no one else is left worse off by the transaction. For example if A owns a piece of land T. that he wants to transfer to B, but a certain person P. is likely to suffer from the transfer that this ownership change would be unjust in nature. That is what Nozick believes. He feels that when acquisition is such that it leads to happiness of the parties involves and generates indifference from others, it means the acquisition is socially just and cannot be regarded as an unfair transaction. It must also be made clear that Nozick believes that transfer of property should be done voluntarily and the happiness and satisfaction of the parties involved is important. The transfer must not be based on any kind of deception or fraud and there shouldn't be an element of coercion or compulsion in the transaction.
A person has the right to transfer his/her holdings at will under a voluntary state and free of deception from the person doing the receiving since such holdings belong to the person doing the transferring. And the person who is receiving the transferring of such holdings is entitled to such holdings since the transferee does the transfer voluntarily and free of deception from the person doing the receiving." (Yamil Guevara)
The third principle deals with rectification of injustice done in property transfer. We must remember that Nozick's theory is not exclusively about property but about all kinds of acquisitions but it has been used most often in connection with property because that was how Nozick chose to explain his theory. Nozick maintains that when a transfer of holdings results from deception or fraud or leaves someone worse off then the victim has the right to demand compensation. Here the author specifically deals with the two parties involved in the transaction. He feels that if acquisition of property was based on coercion or it has been done involuntarily, then the suffering party can demand its property back. The principle doesn't sound reasonable or even practicable but since the theory was based on social justice, we can say that Nozick's principles were highly idealistic in nature. They may fail to apply to all practical situations but they aim at something morally and ethically sound i.e. social justice and protection of natural rights.
His theory is based on the issue of justice and liberty where state plays 'minimal' role. The state must not interfere with transfer of property issues if both parties are satisfied with the transaction. However the only role that state must play is the role of custodian of justice i.e. The state should ensure that acquisition or transfer is a voluntary action, free of coercion and interference. "Nozick defines the limits of state action in terms of an axiom of individual rights, the most important being the right to property. By this, Nozick means that individuals must be allowed to dispose of their property as they choose. Liberty, in turn, is defined as the capacity to exercise this right. Thus, the principle of liberty is prima facie one of non-interference or non-coercion. The right to property implies that no one ought to interfere with another's prerogative with respect to this property. Nozick then uses this axiom about the sovereignty of individual property rights to define the appropriate limits of state action. Respect for this principle, requires a "minimalist" state. While not defining the content of the minimalist state, he argues that it must not be any larger than is consistent with respect for the liberty to dispose of one's property as one sees fit. The state ought not itself to interfere with one's right to property, nor ought it to license any other individual to interfere with that right. Moreover, the state ought to take affirmative steps to guarantee that one individual does not interfere with another's property rights." (Gaffaney, 1999)
Nozick's principles and in fact his entire entitlement theory has attracted more criticism than any other libertarian stance on the issue of acquisition. G.A. Cohen is probably the sternest critic of this theory and refuting Nozick has almost become an obsession with him. Cohen believes that the second principle that deals with worsening off problem is rather vague since it doesn't take into account many situations in which some people might be left worse off even though complete social justice has been maintained during the transfer. In other words, Cohen feels that in some cases of property transfer, even if no coercion has taken place yet the people being denied the use of property because someone owns it might leave the worse off. Cohen maintains that no matter how we try to protect the natural rights of everyone, someone is bound to find himself better off if he had not been denied the use of a certain piece of land. In other words, for Cohen the whole concept of 'worse off' is relative. He explains:
Since a defensibly strong Lockean proviso on the formation and retention of economic systems will rule that no one should be worse off in the given economic system than he would be under…