4 ms·

Co-ops are just the same as guilds, oligopolies, etc. They are (usually government-sanctioned or government-protected) producer organizations that set quotas an

Co-ops are just the same as guilds, oligopolies, etc. They are (usually government-sanctioned or government-protected) producer organizations that set quotas and approval processes to reduce the threat of competition and new entrants, usually relying on official government policy to enable them through import tariffs, "cultural protection" regulation and subsidies (such as tax waivers). The result is an inefficient system that incentivizes inequality and lowers productivity, protecting the interests of the insiders in detriment to society. And, from what I hear from Italian friends, they are usually linked to the local mafia group.

coldtea 9y ago
>They are (usually government-sanctioned or government-protected) producer organizations that set quotas and approval processes to reduce the threat of competition and new entrants, usually relying on official government policy to enable them through import tariffs, "cultural protection" regulation and subsidies (such as tax waivers). None of the above sound bad in themselves. In many areas we could do with less competition, more tariffs, and more cultural protection and subsidies.
- ucaetano 9y ago
  > None of the above sound bad in themselves. Actually, all of them are bad in themselves. Government-granted monopolies reduce innovation and consumer surplus, inhibit competition and stagnate an economy, leaving it weak and unable to compete internationally. > In many areas we could do with less competition, more tariffs, and more cultural protection and subsidies. No, we could not.
  - dv_dt 9y ago
    Private sector markets can show all those negatives, and companies can compete not on inherent efficiency of capital operation, but on who can more cheaply acquire low waged employees. Especially today, we should not believe blindly that capitalism that will automatically be better for society. The question isn't which abstract model is better, the question is how we build some sort of conventions that work better than what is happening now.
    - ucaetano 9y ago
      > The question isn't which abstract model is better, the question is how we build some sort of conventions that work better than what is happening now. Oh, sure, there's potential for improvement. But so far there hasn't been a model that works better, and every single time that government-protected monopolies were tried, they failed with disastrous results. Every single new model tried has failed miserably. But that also doesn't mean there aren't ways to improve the current model.
      - dv_dt 9y ago
        Chinese steel's gov't granted monopoly is apparently so efficient our private markets can't compete... a core support given there is long term capital investment horizons - which gov't monopolies can end up enabling. I'm not saying that always works out for the better, but there's something there in that if your viewpoint is long enough you can win in efficiency, be it steel in China, or Standard Oil in a largely unregulated industrial market.
        Kalium 9y ago
        Chinese steel? It's an interesting definition of "efficient" that is used to describe a whole sector that is kept alive and overproducing only by virtue of burning through massive subsidies.
        dv_dt 9y ago
        So here's a question. If there were a cheaper way for China the nation to acquire the steel it needed during it's expansion phase why did China decide to subsidize? Is there an total system cost that they're maximizing beyond the accounting for just the balance sheet of the steel companies?
        ucaetano 9y ago
        Yes, it's called dumping.
  - coliveira 9y ago
    > Government-granted monopolies reduce innovation and consumer surplus This has no basis on the real world. Many of the largest companies in the world are subsidized by the government, including in the US. For example, Boeing/Airbus is a de-facto duopoly, subsidized by taxpayers. The biggest problems of these companies is that they are owned by private individuals. Having them formed as coops solves a major issue. While not perfect, I don't see these coops as any worse than other companies.
    - ucaetano 9y ago
      At no point you talked about monopolies. And it has plenty of evidence in the real world, just look at AT&T, cable companies, ISPs, mail carriers, etc. And look at monopoly pricing. > The biggest problems of these companies is that they are owned by private individuals. Having them formed as coops solves a major issue. No, it doesn't. Coops are also owned by shareholders, and with government protection, they are monopolies, extracting economic rents from consumers. And economic rents are always, always bad.
      - walshemj 9y ago
        So you think the stock market and 80% of the banking system is a bad thing by that definition. Where is your pension/ 401k invested pray?
        ucaetano 9y ago
        You don't seem to understand the difference between economic profit and economic rent...
    - hueving 9y ago
      Making those two companies employee-owned would do absolutely nothing to spur innovation. Changing who gets the profits doesn't change the fact that a lock on the market means the best strategy is to coast on your existing products.
  - coldtea 9y ago
    >Actually, all of them are bad in themselves. Only if one believes in the free market ideology and have no other measure of what's valuable than monetary. And even then, it's a stretch. All the big economies (the US first and foremost) grew to what they are by using tons of subsidies, tariffs and so on. And even now they use non-economic advantages (diplomatic and military pressure for one) to maintain their status.
iamcasen 9y ago
The same is true for any business or corporation. The real key factor here is that coops at least open up the possibility of workers sharing in the profits generated by their labor. A traditional capitalist corporate structure incentivizes the complete opposite: pay workers as low as you can get away with, so you can personally pocket more profits. Furthermore, in a corporate structure, those at the bottom of the rung have absolutely zero say in what upper management does.
- ucaetano 9y ago
  > The same is true for any business or corporation. No, coops here survive because of government protection against competition. > The real key factor here is that coops at least open up the possibility of workers sharing in the profits generated by their labor. No, they don't. A coop can be of owners, as it is frequently the case in Italy. A coop of small farms, each employing a dozen people, doesn't necessarily bring any benefit to those employees, only to the owners. And it leaves them vulnerable to competition from outside, which then require even more government protection, hindering trade and economic development.
  - wahern 9y ago
    Corporations can capture government just as much as coops. It depends which is relatively more effective at swaying policy, money or votes. In the U.S. contemporary social and political dynamics make money much more important as voters currently suck at tracking the relationship between their desired outcomes and actual policy. But at other times votes were more important. It depends on the dynamics in Italy. (Or maybe it just depends on the labor system--it's maybe not a coincidence that votes were more powerful in the U.S. when unions were big, and money more powerful when business interests dominated policy. In that sense, you can expect corporations or coops to slowly capture government, regardless.) Though some of the Italian statistics were ambiguous as to whether they included non-worker-owned coops (perhaps even deceptively so!), the main thrust of the article was clearly about worker-owned coops While cooperatives in the United States claim about 130 million memberships, these are by and large within consumer and producer-owned co-ops, not cooperative workplaces. Only around 7,000 people nationwide are part of worker co-ops.
tathougies 9y ago
> Co-ops are just the same as guilds, oligopolies, etc Um... no? The point of a coop is to make money, just like a joint-stack corporation. In fact, a co-op is a joint stock corporation where the owners are also workers. > They are (usually government-sanctioned or government-protected) producer organizations Coops have no government protection, at least no more than mega corporations. Recall that it was GM who was determined to be 'too big to fail', not Mondragon.
- ucaetano 9y ago
  They do frequently have government protection, especially in Italy, but in many other countries. Protection comes in many forms, such as special tax structures, protected denominations and excessive regulation.
  - tathougies 9y ago
    I have no idea what italy does. However, special tax structures, protected denominations, and excessive regulation are basically par-for-the-course for corporations in any country. In America, it is routine for large companies to negotiate tax deals with local governments. Many American companies pay no local tax at all. Local authorities do this as a 'gift' to make companies stay. It's wrong everywhere, but it has nothing to do with co-ops.

coldtea 9y ago

>They are (usually government-sanctioned or government-protected) producer organizations that set quotas and approval processes to reduce the threat of competition and new entrants, usually relying on official government policy to enable them through import tariffs, "cultural protection" regulation and subsidies (such as tax waivers). None of the above sound bad in themselves. In many areas we could do with less competition, more tariffs, and more cultural protection and subsidies.

ucaetano 9y ago
> None of the above sound bad in themselves. Actually, all of them are bad in themselves. Government-granted monopolies reduce innovation and consumer surplus, inhibit competition and stagnate an economy, leaving it weak and unable to compete internationally. > In many areas we could do with less competition, more tariffs, and more cultural protection and subsidies. No, we could not.
- dv_dt 9y ago
  Private sector markets can show all those negatives, and companies can compete not on inherent efficiency of capital operation, but on who can more cheaply acquire low waged employees. Especially today, we should not believe blindly that capitalism that will automatically be better for society. The question isn't which abstract model is better, the question is how we build some sort of conventions that work better than what is happening now.
  - ucaetano 9y ago
    > The question isn't which abstract model is better, the question is how we build some sort of conventions that work better than what is happening now. Oh, sure, there's potential for improvement. But so far there hasn't been a model that works better, and every single time that government-protected monopolies were tried, they failed with disastrous results. Every single new model tried has failed miserably. But that also doesn't mean there aren't ways to improve the current model.
    - dv_dt 9y ago
      Chinese steel's gov't granted monopoly is apparently so efficient our private markets can't compete... a core support given there is long term capital investment horizons - which gov't monopolies can end up enabling. I'm not saying that always works out for the better, but there's something there in that if your viewpoint is long enough you can win in efficiency, be it steel in China, or Standard Oil in a largely unregulated industrial market.
      - Kalium 9y ago
        Chinese steel? It's an interesting definition of "efficient" that is used to describe a whole sector that is kept alive and overproducing only by virtue of burning through massive subsidies.
        dv_dt 9y ago
        So here's a question. If there were a cheaper way for China the nation to acquire the steel it needed during it's expansion phase why did China decide to subsidize? Is there an total system cost that they're maximizing beyond the accounting for just the balance sheet of the steel companies?
        ucaetano 9y ago
        Yes, it's called dumping.
- coliveira 9y ago
  > Government-granted monopolies reduce innovation and consumer surplus This has no basis on the real world. Many of the largest companies in the world are subsidized by the government, including in the US. For example, Boeing/Airbus is a de-facto duopoly, subsidized by taxpayers. The biggest problems of these companies is that they are owned by private individuals. Having them formed as coops solves a major issue. While not perfect, I don't see these coops as any worse than other companies.
  - ucaetano 9y ago
    At no point you talked about monopolies. And it has plenty of evidence in the real world, just look at AT&T, cable companies, ISPs, mail carriers, etc. And look at monopoly pricing. > The biggest problems of these companies is that they are owned by private individuals. Having them formed as coops solves a major issue. No, it doesn't. Coops are also owned by shareholders, and with government protection, they are monopolies, extracting economic rents from consumers. And economic rents are always, always bad.
    - walshemj 9y ago
      So you think the stock market and 80% of the banking system is a bad thing by that definition. Where is your pension/ 401k invested pray?
      - ucaetano 9y ago
        You don't seem to understand the difference between economic profit and economic rent...
  - hueving 9y ago
    Making those two companies employee-owned would do absolutely nothing to spur innovation. Changing who gets the profits doesn't change the fact that a lock on the market means the best strategy is to coast on your existing products.
- coldtea 9y ago
  >Actually, all of them are bad in themselves. Only if one believes in the free market ideology and have no other measure of what's valuable than monetary. And even then, it's a stretch. All the big economies (the US first and foremost) grew to what they are by using tons of subsidies, tariffs and so on. And even now they use non-economic advantages (diplomatic and military pressure for one) to maintain their status.

iamcasen 9y ago

The same is true for any business or corporation. The real key factor here is that coops at least open up the possibility of workers sharing in the profits generated by their labor. A traditional capitalist corporate structure incentivizes the complete opposite: pay workers as low as you can get away with, so you can personally pocket more profits. Furthermore, in a corporate structure, those at the bottom of the rung have absolutely zero say in what upper management does.

ucaetano 9y ago
> The same is true for any business or corporation. No, coops here survive because of government protection against competition. > The real key factor here is that coops at least open up the possibility of workers sharing in the profits generated by their labor. No, they don't. A coop can be of owners, as it is frequently the case in Italy. A coop of small farms, each employing a dozen people, doesn't necessarily bring any benefit to those employees, only to the owners. And it leaves them vulnerable to competition from outside, which then require even more government protection, hindering trade and economic development.
- wahern 9y ago
  Corporations can capture government just as much as coops. It depends which is relatively more effective at swaying policy, money or votes. In the U.S. contemporary social and political dynamics make money much more important as voters currently suck at tracking the relationship between their desired outcomes and actual policy. But at other times votes were more important. It depends on the dynamics in Italy. (Or maybe it just depends on the labor system--it's maybe not a coincidence that votes were more powerful in the U.S. when unions were big, and money more powerful when business interests dominated policy. In that sense, you can expect corporations or coops to slowly capture government, regardless.) Though some of the Italian statistics were ambiguous as to whether they included non-worker-owned coops (perhaps even deceptively so!), the main thrust of the article was clearly about worker-owned coops While cooperatives in the United States claim about 130 million memberships, these are by and large within consumer and producer-owned co-ops, not cooperative workplaces. Only around 7,000 people nationwide are part of worker co-ops.

tathougies 9y ago

> Co-ops are just the same as guilds, oligopolies, etc Um... no? The point of a coop is to make money, just like a joint-stack corporation. In fact, a co-op is a joint stock corporation where the owners are also workers. > They are (usually government-sanctioned or government-protected) producer organizations Coops have no government protection, at least no more than mega corporations. Recall that it was GM who was determined to be 'too big to fail', not Mondragon.

ucaetano 9y ago
They do frequently have government protection, especially in Italy, but in many other countries. Protection comes in many forms, such as special tax structures, protected denominations and excessive regulation.
- tathougies 9y ago
  I have no idea what italy does. However, special tax structures, protected denominations, and excessive regulation are basically par-for-the-course for corporations in any country. In America, it is routine for large companies to negotiate tax deals with local governments. Many American companies pay no local tax at all. Local authorities do this as a 'gift' to make companies stay. It's wrong everywhere, but it has nothing to do with co-ops.