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This is “decision by committee” in practice, with all the issues relating to decision quality and operational tempo that entails. They are empirically inefficie

This is “decision by committee” in practice, with all the issues relating to decision quality and operational tempo that entails. They are empirically inefficient, so other organizational structures very effectively outcompete them.

roenxi 5y ago
That sounds like a badly designed co-op, surely the better approach would be to swap the shareholders for the workforce and keep executive power centralised in a CEO? I don't think anyone has an argument in favour of a committee making every single decision. The advantage of the co-op model is that the shareholders are all domain experts and the workforce would be maximally incentivised to pursue profits.
hnbad 5y ago
No, you're thinking of Soviet-style central planning. The idea of worker democracy is not to vote on every single decision. You can still delegate tactical decision making and even overall strategic planning to individuals and in fact usually this is what happens. The difference is the power dynamic when a disagreement arises. The idea is consent, not compromise. In hierarchical companies, the hierarchy decides everything and if anyone from below disagrees they can either fall in line or leave. This incentivizes those at the top to chase the profitability that benefits themselves most, which can often mean high bonuses short-term before moving on to a different company or aiming to sell off the company rather than build a sustainable business. Cooperatives are actually fairly resilient and often also aim to strengthen their local communities. > empirically inefficient This doesn't mean anything if you don't qualify your metric. If you define efficiency in terms of profitability you're defining it in terms of surplus value after expenses including salaries that can be paid out to shareholders. Using that metric is nonsensical as the workers ARE the shareholders. If you mean for manufacturing coops the goods tend to be more expensive you're probably not accounting for externalities. > other organizational structures very effectively outcompete them This isn't really true either, unless you define success in terms of growth rather than sustainability, in which case the claim becomes almost tautological: coops tend to be designed to focus on sustainability almost by definition, so of course they'll perform worse when you measure them by growth rather than sustainable profitability.
- gruez 5y ago
  >If you mean for manufacturing coops the goods tend to be more expensive you're probably not accounting for externalities. What are the "externalities" in this case? I doubt an oil extraction coop is going to be paying carbon offsets. Also, the metric that you failed to consider (other than profit/price) is market share. >the claim becomes almost tautological: coops tend to be designed to focus on sustainability almost by definition How is it "by definition"? I get that workers don't want their coop to go under, but I doubt that capitalist investors want their investments to go under either.
  - runarberg 5y ago
    > Also, the metric that you failed to consider (other than profit/price) is market share. In an economy where almost all companies are hierarchical capitalist corporations, most of the market share is going to be owned by these corporation regardless of how successful a few alternative models are. This is by simple statistics and the regression to the mean. On top of that, in the current capitalist economy wealth naturally accumulates on a handful of companies (this is also a natural statistical phenomenon) and in the absence anti-trust and monopoly enforcement the biggest companies have an easier time driving any corporation out having a chance to out-compete them. This is also regardless of company structure. Market share is not a good metric to evaluate efficiency for this reason. There are simply too many unrelated dynamics affecting the who will become market dominant.
    - gruez 5y ago
      >In an economy where almost all companies are hierarchical capitalist corporations, most of the market share is going to be owned by these corporation regardless of how successful a few alternative models are. This is by simple statistics and the regression to the mean. But surely there would be at least one or two industries where coops rein supreme? If 5% of companies were coop, you'd at least expect 5% of leaders to be coop, or they control 5% of the market share. >On top of that, in the current capitalist economy wealth naturally accumulates on a handful of companies (this is also a natural statistical phenomenon) and in the absence anti-trust and monopoly enforcement the biggest companies have an easier time driving any corporation out having a chance to out-compete them. This is also regardless of company structure. why can't coops do the same? consolidate, gain economies of scale, making all of their members better off?

roenxi 5y ago

That sounds like a badly designed co-op, surely the better approach would be to swap the shareholders for the workforce and keep executive power centralised in a CEO? I don't think anyone has an argument in favour of a committee making every single decision. The advantage of the co-op model is that the shareholders are all domain experts and the workforce would be maximally incentivised to pursue profits.

hnbad 5y ago

No, you're thinking of Soviet-style central planning. The idea of worker democracy is not to vote on every single decision. You can still delegate tactical decision making and even overall strategic planning to individuals and in fact usually this is what happens. The difference is the power dynamic when a disagreement arises. The idea is consent, not compromise. In hierarchical companies, the hierarchy decides everything and if anyone from below disagrees they can either fall in line or leave. This incentivizes those at the top to chase the profitability that benefits themselves most, which can often mean high bonuses short-term before moving on to a different company or aiming to sell off the company rather than build a sustainable business. Cooperatives are actually fairly resilient and often also aim to strengthen their local communities. > empirically inefficient This doesn't mean anything if you don't qualify your metric. If you define efficiency in terms of profitability you're defining it in terms of surplus value after expenses including salaries that can be paid out to shareholders. Using that metric is nonsensical as the workers ARE the shareholders. If you mean for manufacturing coops the goods tend to be more expensive you're probably not accounting for externalities. > other organizational structures very effectively outcompete them This isn't really true either, unless you define success in terms of growth rather than sustainability, in which case the claim becomes almost tautological: coops tend to be designed to focus on sustainability almost by definition, so of course they'll perform worse when you measure them by growth rather than sustainable profitability.

gruez 5y ago
>If you mean for manufacturing coops the goods tend to be more expensive you're probably not accounting for externalities. What are the "externalities" in this case? I doubt an oil extraction coop is going to be paying carbon offsets. Also, the metric that you failed to consider (other than profit/price) is market share. >the claim becomes almost tautological: coops tend to be designed to focus on sustainability almost by definition How is it "by definition"? I get that workers don't want their coop to go under, but I doubt that capitalist investors want their investments to go under either.
- runarberg 5y ago
  > Also, the metric that you failed to consider (other than profit/price) is market share. In an economy where almost all companies are hierarchical capitalist corporations, most of the market share is going to be owned by these corporation regardless of how successful a few alternative models are. This is by simple statistics and the regression to the mean. On top of that, in the current capitalist economy wealth naturally accumulates on a handful of companies (this is also a natural statistical phenomenon) and in the absence anti-trust and monopoly enforcement the biggest companies have an easier time driving any corporation out having a chance to out-compete them. This is also regardless of company structure. Market share is not a good metric to evaluate efficiency for this reason. There are simply too many unrelated dynamics affecting the who will become market dominant.
  - gruez 5y ago
    >In an economy where almost all companies are hierarchical capitalist corporations, most of the market share is going to be owned by these corporation regardless of how successful a few alternative models are. This is by simple statistics and the regression to the mean. But surely there would be at least one or two industries where coops rein supreme? If 5% of companies were coop, you'd at least expect 5% of leaders to be coop, or they control 5% of the market share. >On top of that, in the current capitalist economy wealth naturally accumulates on a handful of companies (this is also a natural statistical phenomenon) and in the absence anti-trust and monopoly enforcement the biggest companies have an easier time driving any corporation out having a chance to out-compete them. This is also regardless of company structure. why can't coops do the same? consolidate, gain economies of scale, making all of their members better off?