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Jacobin makes the core mistake of many economic radical leftists - they ignore that it's not just the good or service itself that's valuable. Quality assurance

by Kalium 10y ago

Jacobin makes the core mistake of many economic radical leftists - they ignore that it's not just the good or service itself that's valuable. Quality assurance is valuable. Service discovery is valuable and so is rapid provisioning. In Jacobin's world, the only person providing value here is the driver. In the world the rest of us inhabit, things like the star-rating system and the dispatch system are valuable too.

tanderson92 10y ago
Yes, that is an element missing in this article. I think in other places (The ABCs of Socialism by Jacobin) they have said that there will still be organizations and managers. More generally, I'd push back a little: socialism strives to have the workers own the business (broadly, the economy) but there is of course still management and a need for QA, R&D,etc. I like to point to Vanguard as an example of socialism that works well while people don't even realize it. The people who own Vanguard mutual funds and ETFs are collectively those who own Vanguard and control its direction. There is still a lot more than the service of a mutual fund that Vanguard provides, to the extent we don't realize its inverted corporate structure is a kind of cooperative. And all the time, the owners' financial interests come first in providing low-cost exposure to equity markets. Why hasn't the broad mutual fund market engaged in a race to cut fees with each other? In fact it has been Vanguard's fees which have usually pushed others' lower.
- Kalium 10y ago
  There will still be organziations and managers and Q&A and R&D! We'll just starve them all of resources and wonder why we're being out-competed by corporations who use different economic models and structures. That's not an abstract hypothesis. That's what happened to the Yellow Cab Co-op in SF. Vanguard is a decent example, but it's in a unique market where information is shared very widely and customers are extremely sensitive to price. And nothing other than price relative to returns.
  - tanderson92 10y ago
    Well their innovation was really the idea that costs matter and that market-cap index mutual funds can work better for investors. They created the market. It was not always the case that investors chose the lowest-priced fund. There is a reason the S&P 500 fund was originally considered to be "Bogle's Folly". It was even maligned as un-American! But it worked well, and non-cooperative businesses are now forced to compete on this factor. However, they do so as a loss-leader for their more profitable (for the managers) products. http://www.vanguard.com/bogle_site/lib/sp19970401.html http://www.vanguard.com/bogle_site/lib/sp19970401.html
    - Kalium 10y ago
      OK. So how does a hack at Jacobin and a true believer HN commentor (yourself) go about disrupting Uber by doing better with a co-op which is more efficient by virtue of not overcompensating managers?
      - tanderson92 10y ago
        Fascinating. I'm merely commenting on misconceptions and discussing what I think the intent of the article is. Your hostility to these ideas is directed at the writer ("hack") and those honestly discussing the article ("true believer" -- did I ever claim to be or even agree with the article?). As for my personal knowledge at implementing this: I don't know how it can be done since I'm a scientist and not a business analytics person. But I know that a cooperative could compete well against the taxi cab industry. Perhaps not against Uber which broke lots of regulations to become an entrenched force in the industry. Disengaging, I don't like to discuss with those who attack others while ignoring the evidence brought forward.
        Kalium 10y ago
        I don't agree that this article and the existence of Vanguard rise to the level of evidence in this instance. I am suggesting that those interested in producing evidence should roll up their sleeves and go produce some in the marketplace.
davidf18 10y ago
It is very helpful to have a firm with deep pockets that has a huge incentive to ensure their drivers are safe. So, that they can be sued or lose lots of profits to a competitor if they don't have a fully safe system. Large US airlines have a huge incentive to ensure that flights are safe. It is not only that they are afraid of losing market share if there is a large accident (and of course the loss of reputation for loss of life) but the average payout per killed passenger is $4.5 million. In Germany, Lufthansa, the main carrier of Germany, owned a discount carrier where the pilot deliberately drove the plane into the ground, killing all on board. But in Germany the liability is limited to something like $75,000 per passenger instead of the $4.5 million in the US. Which makes me more interested in flying with US carriers than, say, German ones, But also Uber/Lyft rather than "co ops." This is real value provided. An especially important to women and the elderly who are most at risk from a problem driver.

by Kalium 10y ago

tanderson92 10y ago

Yes, that is an element missing in this article. I think in other places (The ABCs of Socialism by Jacobin) they have said that there will still be organizations and managers. More generally, I'd push back a little: socialism strives to have the workers own the business (broadly, the economy) but there is of course still management and a need for QA, R&D,etc. I like to point to Vanguard as an example of socialism that works well while people don't even realize it. The people who own Vanguard mutual funds and ETFs are collectively those who own Vanguard and control its direction. There is still a lot more than the service of a mutual fund that Vanguard provides, to the extent we don't realize its inverted corporate structure is a kind of cooperative. And all the time, the owners' financial interests come first in providing low-cost exposure to equity markets. Why hasn't the broad mutual fund market engaged in a race to cut fees with each other? In fact it has been Vanguard's fees which have usually pushed others' lower.

Kalium 10y ago
There will still be organziations and managers and Q&A and R&D! We'll just starve them all of resources and wonder why we're being out-competed by corporations who use different economic models and structures. That's not an abstract hypothesis. That's what happened to the Yellow Cab Co-op in SF. Vanguard is a decent example, but it's in a unique market where information is shared very widely and customers are extremely sensitive to price. And nothing other than price relative to returns.
- tanderson92 10y ago
  Well their innovation was really the idea that costs matter and that market-cap index mutual funds can work better for investors. They created the market. It was not always the case that investors chose the lowest-priced fund. There is a reason the S&P 500 fund was originally considered to be "Bogle's Folly". It was even maligned as un-American! But it worked well, and non-cooperative businesses are now forced to compete on this factor. However, they do so as a loss-leader for their more profitable (for the managers) products. http://www.vanguard.com/bogle_site/lib/sp19970401.html http://www.vanguard.com/bogle_site/lib/sp19970401.html
  - Kalium 10y ago
    OK. So how does a hack at Jacobin and a true believer HN commentor (yourself) go about disrupting Uber by doing better with a co-op which is more efficient by virtue of not overcompensating managers?
    - tanderson92 10y ago
      Fascinating. I'm merely commenting on misconceptions and discussing what I think the intent of the article is. Your hostility to these ideas is directed at the writer ("hack") and those honestly discussing the article ("true believer" -- did I ever claim to be or even agree with the article?). As for my personal knowledge at implementing this: I don't know how it can be done since I'm a scientist and not a business analytics person. But I know that a cooperative could compete well against the taxi cab industry. Perhaps not against Uber which broke lots of regulations to become an entrenched force in the industry. Disengaging, I don't like to discuss with those who attack others while ignoring the evidence brought forward.
      - Kalium 10y ago
        I don't agree that this article and the existence of Vanguard rise to the level of evidence in this instance. I am suggesting that those interested in producing evidence should roll up their sleeves and go produce some in the marketplace.

davidf18 10y ago

It is very helpful to have a firm with deep pockets that has a huge incentive to ensure their drivers are safe. So, that they can be sued or lose lots of profits to a competitor if they don't have a fully safe system. Large US airlines have a huge incentive to ensure that flights are safe. It is not only that they are afraid of losing market share if there is a large accident (and of course the loss of reputation for loss of life) but the average payout per killed passenger is $4.5 million. In Germany, Lufthansa, the main carrier of Germany, owned a discount carrier where the pilot deliberately drove the plane into the ground, killing all on board. But in Germany the liability is limited to something like $75,000 per passenger instead of the $4.5 million in the US. Which makes me more interested in flying with US carriers than, say, German ones, But also Uber/Lyft rather than "co ops." This is real value provided. An especially important to women and the elderly who are most at risk from a problem driver.