[Eran]

I have recently finished reading a light and thought-provoking book by this name.

The setting is as follows:
A 20th-21st century billionaire with terminal cancer commissions a hidden cryogenic chamber in which he is successfully suspended until accidentally discovered some 300 years in the future.

Restored to life and health he gets to know that future society which is the subject of the book.

Technologically, it is very advanced, with mature nano-technology enabling substantial life extension, youth restoration/retention, radical body alterations, incredible engineering feats, etc.

Politically, the society is organised as a less-then-minimal (but not anarchic) solar-system-wide state. Government is constitutionally barred from taxation (on its source of revenue immediately below) or monopolise any market (including law-and-order enforcement), though it does seem like the government's supreme court is the ultimate appeal jurisdiction.

The most notable aspect of society is personal incorporation. Upon birth, 100,000 shares are issued for each person. Of those, 5% go to the government and 20% to the parents. The rest become the property of the person and are typically sold to fund education and other early-life costs. By law, a person's self-holding may not drop below 25%.

Shares entitle their owners to a fraction of the person's earnings (hence government's 5% is effectively a 5% flat tax). In addition, majority of shares can override a person's occupational choices. In particular, one needs to achieve (re-achieve?) self-majority before one can hope to retire.

The plot of the story revolves around repeated attempts to compel our billionaire to incorporate himself, and the societal consequences of his refusal to do so.


From a libertarian perspective, the compulsory nature of incorporation is clearly problematic. Incorporation would really be a way for people to raise money by issuing long-term, transferable (tradable) commitments for shares in their future earnings.

How do people feel about voluntary incorporation? What if self-holding was limited to at least 50% such that the issue of compulsion to work didn't exist (or, equivalently, that the shares issued were "non-voting" shares)?

At what point would we be crossing the line to (voluntary) slavery?

[SolarCross]

That does sound like a good book. This future society however is actually our society now, just the future society has clearer terms... Incorporation is citizenship. At birth we are registered as a legal identity, a corporation essentially, which is practically owned at least in part by the government. How much is owned by government and how much by the real human trading as that identity is never made clear but still in principle that is what the idea of citizenship morphed into over the last century. Your birth certificate is essentially a certificate of incorporation, on the basis of its ownership of that corporation the government, as a corporation itself, uses it as an asset for raising loans, taxation is essentially a dividend paid from the subsidiary corporation (the citizen) to the parent corporation (the government). It would be equally difficult to live in today's society without being incorporated, barriers are placed against "uncitizens" trading and travelling for example.

Like most dystopian novels this is really a coded commentary on today's society, 1984 for example was a commentary on the society of 1948..

[Voluntarism]

My first question would be about how the shares were valued and traded especially w.r.t. buy versus sell.

My initial reaction is that I like the concept because it formalises many things into contracts. I am cautious about the impact of laws (and lack of laws) around buying your own shares back. Perhaps a converted note (or whatever the specific financial instrument is) arrangement is the answer whereby the corporation (ie you) can redeem the notes at preagreed prices or arranged method. Until redemption a fixed dividend is paid.

[AFAIK]

Do people have the option of forceful buy-backs in order to reachieve self ownership? I don't like the idea of people entering into life long debt bondage to pay for education.

It would be interesting if the incorporation occurred at the age of, let's say 20 and there were multiple stock markets with different rules and regulations that people could list on.

I'll keep an eye out for this book. Sounds interesting.

[Eran]

The market in person-shares is depicted as fairly free, with supply and demand controlling prices, and with derivative instruments such as options or diversified portfolios of person-shares.

Going beyond the book, it is easy to imagine that most people, rather than issue permanent shares in themselves would issue the equivalent of non-voting shares, callable shares, convertible bonds, etc.


My main concern is with the institutions required to enforce share-holder rights. If you owe 20% of your income to your shareholders, enforcement isn't different from having to pay a 20% income tax, with all the complications associated with deductions, reporting, evasion, etc.

[Nunt]

I do not see a problem to someone agreeing to pay a certain percentage of his income to another person. But I don't like the way to organize it through shares. It feels kind of useless because you don't really need a concept of person shares to arrange such a deal. And I even think it is dangerous as shares give the idea that someone else owns the person. This is not something that should be possible. All individuals are self owners and cannot change that. They can only engage in contractual agreements with others binding them to do certain things, but they are always the self owner.

The difference between contractual agreements and ownership is that you can always renege on your contractual agreements. You just have to compensate the other party for their losses. In contrast with ownership, the owner can force you to fullfil the contract with any means.

For example, say you have contractually agreed to plow a field, but do not wish to do it. You renege on the agreement and you pay for the losses (finding someone else to do it). If the other person owns you, then he could just strap you to the plow and beat you till you plow it.

[Eran]

This goes to the core objection to personal incorporation as depicted in the book. Shareholders, especially when holding a majority, have powers of compulsion that are very much akin to ownership.

The argument for ownership is the same as that for equity stake in a normal business - prospective buyers are likely to be willing to pay more for a stake in the enterprise (or person) knowing that their interests are legally protected.

Walter Block's argument for voluntary slavery is that self-ownership is diluted when we prohibit the voluntary transfer of (complete or partial, permanent or temporary) control over one's body to another person.

[AFAIK]

I do not see a problem to someone agreeing to pay a certain percentage of his income to another person. But I don't like the way to organize it through shares. It feels kind of useless because you don't really need a concept of person shares to arrange such a deal.

I was thinking that. Many high-stakes poker players are staked by investors who pay their buy-ins and sometimes travel and accommodation costs and then split any winnings.

The book's concept sounds a little similar to the film In Time in which everyone is immortal and eternally 20yo but has a digital clock on their arm. Time is legal tender and when your clock reaches zero you die. (In Time was poorly executed with some ridiculous scenes,btw.)

Eran, How would you rate the book?

[mikema63]

There are a lot of snarly implications in that. What happens if one guy ends up with majority shares?

Sounds troublesome.

[Eran]

Eran, How would you rate the book?

I enjoyed it. Probably 8/10 for interesting and thought-provoking depictions of the future, 7/10 for plot interest, 4/10 for realistic depiction of the likely consequences of depicted future developments.

What happens if one guy ends up with majority shares?

Majority shares in what? Every single person?

In the book, one corporation is depicted as having disproportionate power and wealth, threatening to convert that wealth into political power.

[mikema63]

Leave it at one guy (for the moment).

If I get 51% of the shares of 1 guy, what can I make him do? How far does that power go?

[Killborn]

I'd read this.

[mikema63]

I should probably mention that I've always liked this type of book trying to explore an interesting ideological idea through fiction. I'm by no means saying the book wasn't good or interesting.

[Eran]

If I get 51% of the shares of 1 guy, what can I make him do? How far does that power go?

The points mentioned explicitly in the book are that the majority controller can compel the guy to take a particular job, as they have a controlling interest in the guy's future earnings.

They can also request a psychological audit to diagnose/fix psychological issues, and a financial audit to ensure that they are properly paid.

If you own a large (>30%?) minority you still have certain (not as clearly described) rights. People in the book strive for "majority" (meaning owning over 50% of your own stock) and, if you are very lucky, super-majority (owning over 70% of your own stock) which confers an even higher level of self-control.


One of the weaknesses of the model in the book is the conflict of interest inherent in a situation in which a person's goal is to purchase shares in himself. As such, the person has a short-term interest in his share price being low. It thus makes sense to (1) secretly save money, (2) fain incompetence at work, (3) see your share price drop, (4) buy a majority, (5) go back to working hard.

Another point is that while corporate stock confer ownership over both income-stream and assets, individual-shares seem to only work for the income stream, not the property owned. That creates an unnatural separation. It is unclear, for example, how capital gains income is treated.

[Voluntarism]

One of the weaknesses of the model in the book is the conflict of interest inherent in a situation in which a person's goal is to purchase shares in himself. As such, the person has a short-term interest in his share price being low. It thus makes sense to (1) secretly save money, (2) fain incompetence at work, (3) see your share price drop, (4) buy a majority, (5) go back to working hard.

I agree. This is a weakness. Presumably this would encourage a lot of the sales contracts to have pre-determined buy-back prices (which would also be attractive for the seller in many cases).

As I mull over it in my spare thinking time, I think that most reasons for "selling" shares is actually simply standard debt arrangements (ie to pay for education, car, housing loans etc) and don't actually require people to sell their shares rather than sign a contract of a promise to pay from future income streams and enter in bankruptcy arrangements if they fail. Given that people already loan money under agreed interest arrangements without requiring selling a share in your entire future I can imagine the business model of these people would be more attractive overall.

Although there are of course a thousand permutations just like current financial products, broadly it seems that you have the choice of:
a) selling shares in yourself and the attached unknown future income stream until you can buy them back (either at a pre-agreed or market price). This comes with a risk of becoming a bonded slave in the future.
b) signing a traditional loan contract in which you pay known (fixed or variable) interest for a known period with the lender having traditional prudential arrangements and dealing with risk by aggregating together a large number of loans.

Both types of loan models could no doubt exist alongside each other but I think (b) will be more prevalent.

I like the idea of parents/guardians having shares in their children for a number of reasons. Rather than a fixed number however, I'd probably prefer some sort of growth rule of say, an accumulating 1% per year of guardianship. Perhaps there could even be an agreement with independent 3rd parties to review progress and allow or withhold attached share payments to aid in obtaining better guardianship outcomes?

[Eran]

The suggestion in the book was that the system was superior in that it aligned the interests of the person himself (to maximise future earning stream) with those of the people (government, parents and any others) or bought shares in him. In addition, the power of share-holders to compel a person to choose the most remunerative jobs gives them more confidence lending him money. It thus allows borrowing under better terms than otherwise available.

I agree with you that at most, incorporation could be a last-resort method for raising funds, rather than the default means for most people. If nothing else, education would have to be bizarrely expensive for parents to prefer having their child lose her majority rather than fund that education themselves.