One of the core principles of Nozick's entitlement theory concerns the just transfer of property (or "entitlement to holdings") from one person to another. Nozick assumes that just transfers will also be justice-preserving, in that the resulting distribution of resources will be just if the pre-transfer distribution was. We'll examine that assumption later. The prior question is, what makes for a just transfer? The obvious answer is 'voluntary exchange'. But what does 'voluntary' mean in this context? We should want to exclude at least coercion, manipulation, and fraud.
Must both parties be fully informed? This would be a very stringent requirement, rendering the vast majority of real-life exchanges "unjust". Perhaps we should settle for avoiding outright deceit. An exchange may be legitimate even if it involves some ignorance.
How about manipulation - how strict should we be about that? Arguably, all advertising is a form of manipulation, but it would surely be going too far to deny that just exchanges can result if one party has been influenced by advertising. It would only be problematic if the manipulation was serious enough (e.g. brainwashing) to undermine the agent's autonomy. It isn't clear where exactly to draw the line, but we will set this aside for now.
Perhaps most important is how we understand coercion. In the libertarian (non-welfare) state, poor people are effectively forced to labour. There are no reasonable alternatives (given that starving to death is the only alternative that would be open to many, and that clearly is not a reasonable one!). This desperation will weaken their bargaining power, so it would seem a mistake to say that they're in any position to give "voluntary consent" for their employment contracts. There's nothing "voluntary" about it -- they have no other options. If you're stuck down a well, and I offer to throw you a rope in exchange for everything you own, you have no real choice but to accept. This would not be a just transfer.
So the principle does not necessarily support free market capitalism after all. Many market exchanges are unjust, due to imbalances in bargaining power, and lack of genuine choice on the part of poorly-off contractors. The principle of transfer by voluntary exchange presupposes a liberal egalitarian society. My next post will look at whether it works even then.