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Interesting to see, how perceptions differ when you're from the place. I've experienced this too when progressives from the US at home praise certain German pol
by woodpanel 9y ago
Interesting to see, how perceptions differ when you're from the place. I've experienced this too when progressives from the US at home praise certain German policies as the way to go, yet they never seem to put the same effort into researching the local criticism as they put to in taking the positive claims at face-value.
I'm a fan of co-ops, but gave up on the idea of replacing the private sector with it. If there's a market for them, they can compete easily (usually through quality). I'm inclined to see them as better agents for social welfare programs [1].
I'd like to hear from the author why they focus on some (in foreign eyes) romantic region in Italy and don't look at the dryer examples of large-scale co-ops that exist throughout the rest of Europe:
Germany's and Switzerland's biggest retailers are co-ops (Rewe, Edeka and Migros, Coop). Italy's biggest retailer is also a co-op. German co-op retail-banks claim 20% market share. Austria's Reiffeisen Bank is the country's third largest bank. The world's biggest sugar-producer Südzucker is a co-op. The list of old co-ops that have scaled over time is long and studying them I think would provide much needed insight if we are to claim the "advancedness" of co-ops.
Specifically all the scandals that have popped-up, like the "co-op-Scandal" of the late 1980s, one of Germany's biggest cases of financial fraud.
[1] For example don't let the city/state build cheap housing, rather subsidize housing co-ops. Once you do that, you get political entanglement in return and in general the imbalance of the private-sector being marginalized. But I prefer that anytime over government housing. Germany is full of both (co-ops and city-run housing, with the latter being usually run-down and the former trumping median private-sector housing while being 30%++ cheaper).
- cjalmeida 9y agoI'm really curious why co-op building companies provide cheaper housing compared to regular private companies. Public sector inefficiency is well studied. Co-ops efficiency however not so much, at least for me.
- woodpanel 9y agoDisclaimer: I rented at two different co-ops in my life. My experience was great. Renters are „invested“ because they are: they buy shares, that spill dividends, they have a say as shareholders of private companies do. Attempt at answering: Co-ops try to provide affordable quality housing thus gains are usually reinvested via repair work and they don’t engage in selling their housing stock on the free market. Property they built, usually stays theirs forever. I think the biggest leverage on prices comes from land allocated to them by a city. As most shareholders are also renters they push the co-op leadership into keeping rents low and over time prices can diverge quite a lot from free market rates.
- cjalmeida 9y agoI see. But that also mean the original investors - the ones that put the initial money - are getting sub par returns. Or government land subsidies play an important role here assuming that private developers have no access to it. I don't see the lower returns as particularly damaging - there has been too much speculation in real state in recent decades. But that might not be the case once (if) returns get lower.
- jmiserez 9y agoIf the original investors are also living there (or bought in), then the cheaper housing costs make up for the lower returns, or no returns at all. The cheap housing is the return. Now technically you could argue that the outcome would be the same if you lived more expensively and you were an investor in some other for-profit housing with high returns. But that’s usually not the case, as the cash amounts you’d need initially are too high for most people.
- woodpanel 9y agoAnswering both of you guys: Being an original investor of a co-op usually meant you were really struggling with the alternatives. That is a return itself. There are also private housing stock examples for that behaviour: gentrification theory sees the so-called "pioneers" who move into low-quality neighbourhoods. They are doing much of the work improving quality-of-live/attractiveness that later on others will reap the benefits from like real-estate developers and long-time landlords.
- woodpanel 9y agoYes, land subsidies are a key engine. I'm aware of the moral problems that creates. But if I assume that within democracies a tendency persists to have some sort of social welfare, then I think it is more constructive to engage in how to organize this redistribution. Supporting co-ops seems like a very lean and non-harmful way (compared to government housing or state ordered quotas on free enterprises).