It is clear to me that there is much involved in a system of torts. I do not claim that the many systematic and idiosyncratic determinations that must be made under such a system are easily made or have obvious outcomes. I acknowledge that the very existence of a system of legal protection requires a great deal of value-laden judgment. Of course the rights of both parties are at stake in a tort judgment. I only mentioned those of the victim because I was highlighting the injustice of that particular situation, where the tortfeasor seems secure in his rights.
As far as Nozick's ideas go, they do sound odd. I will say a thing or two based upon my limited understanding of them, let me know if I'm off the mark.
It seems very odd to suggest that a liberal state is the natural outcome of anarchy. I have often said that either anarchy does not exist or we are living in it right now. People are so accustomed to living under a large impersonal state that they are unaccustomed to think of what government fundamentally is. As I have said before, and as you are surely already aware, government is merely superiority of force. If gangsters have the run of a city and the official authorities are powerless to contradict their decrees, then the 'authorities' are no longer sovereign, and the gangsters are a government unto themselves. Advocates of anarchy, in suggesting the abolition of government, either fail to understand what, fundamentally, government is, or are making the absurd assertion that it is possible to do away with the physical inequality of parties and the resulting power differential. Anyplace where there are two people there is government. The point of this is that anarchy is either an insubstantial philosophical construct or it is universal. Assuming the former, Nozick's assertion is merely a theoretical exercise; assuming the latter, Nozick's assertion is disproved by the repeated evidence of history. Why on earth would power groups, in the absence of formal government, restrict themselves to selling their protection, when they could quite easily force defenseless parties into a state of clientage and then extract whatever portion of the client's production they desired? They wouldn't. The evidence of history shows quite clearly that they haven't. As for such power groups being rights protecting… lol. There is certainly no guarantee that governments will be good.
As far as using defaults in existing programs. I'm all for it. I may doubt that a program is the most effective way to achieve the ends aimed at, but so long as we're going to do it we ought to do it as well as we know how in order to minimize the loss we incur by not following the optimal path. I do think that, in the context of the programs he mentioned, Sunstein's defaults would cause them to realize their ends more effectively. If you sell defaults as a way of making intervention more effective I won't argue. It is only when they are sold as a way of making intervention not intervention that I object.
When I said that "[determining a rational set of defaults] through the auspices of modern democratic government virtually guarantees that we will botch the process", I was speaking in very broad terms. I was talking about culture as a default. It is definitely the government's role to create defaults within the proper sphere of government. I am only talking about government setting defaults in private decision making. When it does this, I call it 'intervention', and I think it a mistake.
Your next point is very important: "a state will always be subject to pressures (of varying intensities) to do non-libertarian things. The state will always have the power to do those things; it is inherent in being a state. That power cannot be ignored, and there is no structural way to make it go away". Absolutely (my discussion of the constitution was not suggesting that a constitution could protect an ideal of government; I was just noting that the idea of defaults provides an interesting insight into why constitutions have any effect at all). One might say that good government is not a state of law and institutional organization, but rather a state of culture. No set of laws can cause a culturally destitute people to govern themselves well and no rule can be so detrimental as to prevent a culturally rich people from doing so. This is why I have lost interest in practical politics. What is the point of struggling for changes in laws when what really matters in not the virtues of government but the virtues of the people? This idea is highlighted in the ridiculous programs of 'democratization'. There are groups of people who are culturally democratic, and with such groups no power can hold them back from democracy. There are other groups who lack the cultural prerequisites for democracy and who will not become properly democratic no matter how hard you shove the institutions of democracy down their throats. This goes back to the recognition that government is power. We tend to confuse government with institutions, but if the institutions do not have the support of the people they do not have power and thus have nothing to do with government.
That idea is at the heart of my political philosophy. Good government is the product of a strong culture. It is a recursive model of societal improvement:
The ancients who wished to illustrate illustrious virtue throughout the kingdom, first ordered well their own states. Wishing to order well their states, they first regulated their families. Wishing to regulate their families, they first cultivated their persons. Wishing to cultivate their persons, they first rectified their hearts. Wishing to rectify their hearts, they first sought to be sincere in their thoughts. Wishing to be sincere in their thoughts, they first extended to the utmost their knowledge. Such extension of knowledge lay in the investigation of things.
Things being investigated, knowledge became complete. Their knowledge being complete, their thoughts were sincere. Their thoughts being sincere, their hearts were then rectified. Their hearts being rectified, their persons were cultivated. Their persons being cultivated, their families were regulated. Their families being regulated, their states were rightly governed. Their states being rightly governed, the whole kingdom was made tranquil and happy.
Confucius, The Great Learning
This is why my own investigations focus not on how to impose change on people externally but rather on what culture is and how it is transmitted. This, I think, is the road to improvement. If we can understand why some groups of people spontaneously generate wealth, creativity, and good governance, while others seem trapped in a state of degradation, then we might actively promote the welfare of mankind.
Finally, I do not agree that such policies as redistributive taxation and financial regulation reduce people's clamoring for more intervention. In fact I think such policies lead to more regulation. I believe that these policies result in outcomes that are the opposite of their intended aims. So if redistributive taxation makes people poorer and financial regulation makes markets more dangerous, then obviously you enter into an unstable feedback loop. One might call it a slippery slope. The more you intervene, the worse the problem becomes, and the more people demand intervention. I think this sums up the story of twentieth century governance nicely. Take the war on drugs as an example. The more effort they put into fighting the drug trade the more valuable drugs become. The more valuable drugs become, the stronger become those who traffic in drugs and the more difficult it becomes to stop them. So the harder you fight the problem the more virulent it becomes (and the harder you try to fight it, ad infinitum). An argument that supplements this perfectly sufficient point is that interventionist concessions create a norm. Interventions give people a sense of entitlement and this begets greater expectations of future paternalism.