In the future, everyone is incorporated and can buy/sell shares in their own economic lives. Fans of stock market histories would see the setup for market manipulations, lawyers would see problems with bankruptcy ( can't really throw out mgmt, can we? ), and libertarians would perhaps rejoice.

While we monetize a bit of our future by taking on student loans, that is probably micro-pennies compared to the present value of our future earnings, which would be securitizable via personal incorporation. The inflation due to this would be similar to the shutdown of the 2nd Bank of the United States and the start of the Free Banking system, when all of a sudden anyone with a bank charter could start printing money.

The hangover from that party would wreck more than a few economic lives. The resultant personal bankruptcies, under current corporate law, would allow creditors to wipe out the current shareholders. Debt and equity would most likely become a much more serious matter as the stakes are much higher; shareholders could sue for uneconomic decisions (force you to take that higher paying and less fun job), and for disgorging of bank accounts to fund dividends.

We would probably see Delaware expand its management-friendly laws to personal incorporations, to make shareholder lawsuits less likely to succeed, and people more likely to maintain control.

This libertarian paradise makes for a fun thought experiment. The authors attempts to handle market manipulations (no short selling, no uneconomic decisions) seem misplaced. If we're building a libertarian paradise, why not go all the way?

I remember seeing someone set up this sort of auction a few years back - if I remember correctly, a freshly minted Harvard Grad wanted 100k for 5% of his lifetime income. I never went back to check to see if anyone actually made a bid; I always just assumed that no one was crazy enough to give it a go. It strikes me that agency problems are insurmountable. Not only does one have to deal with under-the-table payment and shirking, but the salary-benefits ratio is sure to be skewed as well. Investor alignment is simply so far out of whack, I can't conceive of anyone with any venture-capital/angel experience thinking this is a remotely good idea.

Dave McClure likes it http://www.slideshare.net/dmc500hats/securitizing-happiness-solving-the-worlds-problems-by-making-trilliondollar-markets-for-individuals-small-business-natural-resources -- Patrick

*munch, munch, munch* "Mmmmm... crow sure is tasty." If nothing else, I should have remembered all of the non pecuniary reasons people invest, all of the clean-tech funds, etc. That being said, I read the slide deck and, while I disagree with McClure on quite a range of issues, I suspect that, while he is in favor of the idea of personal securitization, that he would be reluctant to actually pursue such a deal except, perhaps, with an exceptional individual. Even if people are willing to do such deals for largely non-pecuniary reasons, there are almost certainly more effective, less complex tools to accomplish the same goals. Theo

Facebook (identity central) will probably be tempted by this. If they unfortunately become identity central, we'll have the user-trackability that equity (and even debt) would require. Next is the earnings, which we could apply Al Capone-busting income guesstimation to. This is probably closer than we realize. Thanks to Facebook.