In contrast, this piece by Julian Sanchez, formerly of reason, is worth your time. It is not really a rebuttal, as Julian fesses up to not having read all of the Slate piece, but it is a very thoughtful meditation on Nozick and how his views evolved over time.
I am not going to write a full rebuttal, entertaining though that would be, but would note a few things:
1. It is Metcalf, not Nozick, who confuses physical and human capital, as well as human capital and ability. Nozick presumably chose his Wilt Chamberlain example to be simple and (not unrelated) persuasive, not because he failed to note the existence of factories or joint stock companies. More broadly, Metcalf seems a bit mired in the Marxian definition of capitalism in a way that confuses his understanding of Nozick and of libertarianism more broadly.
2. Metcalf seems unaware that many, if not most, neoliberals (or classical liberals or moderate libertarians or whatever you like to call them) base their views in whole or in part on something other than the natural rights view presented in Anarchy, State and Utopia. If Metcalf understood this, he would not conflate Nozick with Hayek towards the end of the piece. Hayek's rule utilitarian liberalism would allow a much larger state than Nozick's minimal state views.
3. Metcalf does not appear to know the meaning of the word coercion, which would seem to be fundamental to the discussion. He states incredulously that "... Nozick insists that progressive taxation is coercion" when in fact everyone (but, apparently, Metcalf) defines any sort of taxation as based on coercion. If you do not pay, eventually people come to your house with guns and take either you or the money or both. It does not get much more coercive than that. Justifying the state means justifying those people with the guns.
4. Neither Nozick nor any other libertarian endorses fraud, which would seem to make Bernie Madoff a poor example of outsized compensation justified by Nozickian libertarianism. This sort of basic error should have been caught by the Slate editor (they do have editors, right?).
5. Metcalf should check out both the pay and the number of defense contracts obtained by philosophy professors. Oddly, his pop psychological argument for the genesis of Nozick's original views as propounded in Anarchy, State and Utopia depends on both of these being large.
I'll stop there. There are plenty of thoughtful arguments against hardcore libertarian views, but you won't find them in the Metcalf piece. And shame on Slate for publishing something with so many logical and factual errors.