Nozick on business firms

Nozick poses a pair of related questions in the next two subsections of Chapter 8 of ASU (pp. 246-253) regarding the organization of business firms. One question is, How could we incentivize business firm to provide more opportunities for meaningful and satisfying work to its employees? The other is, Why aren’t more firms owned or controlled by their employees? These questions are all the more pressing today given recent developments, including David Graeber’s recent critique of bullshit jobs, the Starbucks “ethical sourcing” controversy, and the proliferation of slave labor camps in China (the video below, for example, features Dejian Zeng, an NYU grad student who worked undercover in a Chinese factory, spending 12 hours a day attaching one screw to iPhones).

Alas, Nozick’s main response to the first of his two questions is less than satisfying, to put it mildly. Nestled away in his Ivory Tower, far removed from the tedium of office work or the toils of iPhone workers and coffee-bean pickers (cf. the various “bads” alluded to in the above paragraph), Nozick posits an inverse relation between the quantity of wages and the level of job satisfaction. According to Nozick (p. 248), workers have a choice between (a) higher wages but less-meaningful work, on the one hand, and (b) lower wages but more-meaningful work, on the other. The obvious problem with Nozick’s Ivory Tower argument, however, is that it bears little to no relation to industrial reality. The most menial jobs are, by and large, the ones that are the lowest paid!

So, why don’t workers just band together to seize control of the companies where they work or to start their own firms? This key question is posed on page 253 of Anarchy, State, and Utopia, almost as an afterthought, but I would venture to say it is the single most important puzzle posed by any philosopher since Plato. For his part, Nozick will address this quandary in the next subsection of Chapter 8 (pp. 253-262). Although his analysis there will encompass 10 singled-spaced pages of dense argumentation, it is my favorite part of the entire book by far! We will carefully review Nozick’s analysis of the ownership structure of business firms in our next post.

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