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I know Wikipedia is not an excellent reference, but I quote from Wikipedia:

Demoktesis is a thought-experiment designed to show the incompatibility of democracy with libertarianism in general and the entitlement theory specifically. People desirous of more money might "hit upon the idea of incorporating themselves, raising money by selling shares in themselves." They would partition such rights as which occupation one would have. Though perhaps no one sells himself into utter slavery, there arises through voluntary exchanges a "very extensive domination" of some person by others. This intolerable situation is avoided by writing new terms of incorporation that for any stock no one already owning more than a certain number of shares may purchase it. As the process goes on, everyone sells off rights in themselves, "keeping one share in each right as their own, so they can attend stockholders' meetings if they wish." The inconvenience of attending such meetings leads to a special occupation of stockholders' representative. There is a great dispersal of shares such that almost everybody is deciding about everybody else. The system is still unwieldy, so a "great consolidational convention" is convened for buying and selling shares, and after 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. Attendance is too great and it's boring, so it is decided that only those entitled to cast at least 100,000 votes may attend the grand stockholders' meeting. And so on. Their social theorists call the system ''demoktesis'' (from Greek δῆμος ''demos'', "people" and κτῆσις ''ktesis'', "ownership"), "ownership of the people, by the people, and for the people," and declare it the highest form of social life, one that must not be allowed to perish from the earth. With this "eldritch tale" we have in fact arrived at a modern democratic state.

Question is, I really don't get this argument: OK, we arrive with situation similar to the modern democratic state in the end, but all decisions are quite libertarian! They decided to incorporate themselves, sold shares of themselves, and because there was burden of attendance, representatives are formed, and they decide. So what this seems to imply is that democracy can be formed out of libertarianism!

Or is Nozick saying that as humans are by themselves means, this contrasts with libertarian aims?

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    Which Wikipedia? – Keelan Jun 12 '13 at 5:09
  • @Keelan Anarchy, State, and Utopia. Section demoktesis. – nozick Jun 12 '13 at 5:25
  • The idea here is to show how Minarchism/Anarchist capitalism will always back into a "democracy". – user6951 Jun 3 '14 at 19:11
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I'd understand this as the formation of a state, in the same vein as Hobbes Leviathan, and Rousseaus theory of the General Will in social contract theory. Hobbes argues for an absolute sovereign and state (this is the Leviathan), whereas Roussea argues for a more egalitarian possibility; notably Rousseau was writing during the French Revolution when pure democracy became a live issue as opposed to the constitutional compromise of the English Parliamentarian system that evolved after the English Civil War.

One could say that Nozick has simply updated Rousseaus state founding myth in his short book The Social Contact to the context of a libertarian social contract theory. It would be an interesting exercise to discover what the exact parallels and substitutions are.

One curious feature of the extract you quoted, is that Nozick starts by stating that libertarianism is not consistent with democracy:

Demoktesis is a thought-experiment designed to show the incompatibility of democracy with libertarianism in general and the entitlement theory specifically.

But then goes onto propose a pseudo-myth that does this! And one ought to regard this myth, as a myth in its proper sense; despite its contemporary idiom; which is the construction of a narrative that illustrates contemporary realities; but it is a pseudo-myth because its not one that has sunk deep roots into the popular consciousness; but one could argue that it is an expression of a certain popular consciousness in the States that Nozick is stating in the terms of political economy.

The real point of Anarchy, State & Utopia was to make Libertarianism as a political ideology academically respectable again, as this article points

With libertarianism everywhere [now], it's hard to remember that as recently as the 1970s, it was nowhere to be found.

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How is Nozick's Demoktesis Argument supposed to show that modern democracy (by representation) is equivalent to slavery?

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