Nozick’s thought experiment

You may have heard the slogan “corporations are people”; but what if people were corporations? The second subsection of Chapter 9 of ASU contains just such a mind-blowing thought experiment. In summary, Nozick borrows the Beckerian concept of “human capital” from the world of economic theory and takes this idea to its logical conclusion. He imagines a society in which each person has the right to incorporate himself as a human corporation, the right to sell off shares of stock in himself, and the right to buy shares in other people. In this imaginary world, it is perfectly legal for people to sell off discrete property rights in themselves, including “the right to decide from which persons they could buy certain services (which they call occupational licensure rights); the right to decide what countries they would buy goods from (import-control rights); … and so on.” (ASU, p. 283, emphasis in original.) Not only is it perfectly legal for people to buy and sell shares of such rights; this practice becomes so widespread and pervasive that, in Nozick’s words (p. 284), “just about everyone sells off rights in themselves, keeping one share in each right as their own, so they can attend stockholders’ meetings if they wish.”

But as Nozick notes (ibid.), “The enormous number of shares held and the dispersal in ownership of these shares leads to considerable chaos and inefficiency.” Multiple stockholder meetings must be convened and matters put to a vote for each and every individual in this strange society of human corporations. Even with proxies and other simplifying reforms, this system of human corporations becomes so cumbersome and unwieldy that a special convention is held and a system of “one shareholder, one vote” is agreed to by all. In the words of Nozick (p. 285): “Everyone gathers from far and wide, trading and selling shares, and by the end of a hectic three days (lo and behold!) each person owns exactly one share in each right over every other person, including himself. So now there can be just one meeting in which everything is decided for everybody, one meeting in which each person casts one vote, either by himself or by giving his proxy to another.”

This simple reform not only makes the system workable in one fell swoop, reducing the number of time-consuming meetings to a bare minimum–a single “grand stockholders’ meeting” to be held three times a year. The “one shareholder, one vote” rule also ushers in a new Rousseaian era of universal solidarity and human flourishing as people now see how “they are all inextricably intertwined, each equally shareholder and shareheld, each his brothers’ keeper and his brothers’ kept.” (ASU, p. 287.) Alas, Nozick asks, what about property rights to children? Who would own shares in minors, and we would add, what should the age of majority be? At this point in Chapter 9 (pp. 285-289), Nozick makes a lengthy digression to address these questions and discuss John Locke’s views on parental ownership of children. We will review these points in our next post.

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About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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4 Responses to Nozick’s thought experiment

  1. Kathy H says:

    In this scenario is everyone voting in the best interest of all since they are all so intertwined?

    • That is the theory at least. After jumping into his digression on Locke later tonight, I will get around to Nozick’s critique of his imaginary “one shareholder, one vote scheme” tomorrow.

  2. Abogada Guerra says:

    Haha @ “We the Corporations”

  3. Pingback: Nozick’s Lockean digression | prior probability

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