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This is the definition of a Co-op. The model has been reasonably successful in some cases. There are co-ops with >$10B annual revenues, although it took them ha

This is the definition of a Co-op. The model has been reasonably successful in some cases. There are co-ops with >$10B annual revenues, although it took them half a century of steady solid business to get there. https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation The main issue is that such companies do not attract large investment, so they cannot really take advantage of modern capital markets. It would lead to slower productivity growth, with fewer crisis, maybe that's better, maybe not. But co-ops are not immune to spectacular failures either (see Fagor). The do not attract large investment, but they can also be an effective solution to a lack of capital. Mondragon (linked above) was a collective grassroots venture in post-war isolated Spain, were regular workers got together to bootstrap employment for themselves. Oddly enough, led by a young Catholic priest. It doesn't really fit cleanly into the Capitalism vs Communism worldview. On the one hand, it is definitely about collectivism and labour rights. On the other hand, a co-op is a lot like a modern neo-liberal startup, just with a large and flexible group of founders, where the shareholders and the most productive workers are one and the same. Again, the piece that doesn't fit nicely: investors. That's the main weakness. Bootstrapped by design. Successful members of society cannot help others accelerate their ventures. They just use their wealth to aggressively consume, or just save a lot. Neither of which is great for efficiently improving the world. Hard to tell if this is a better model, might be slow but sustainable. The promise of equitably distributed rewards (as in Communism), while still having individual incentives for productivity (as in Capitalism), is rather attractive conceptually at least.

abdullahkhalids 3y ago
1. Unlike Co-ops, what I am proposing [1] allows for companies to still sell part of themselves to investors to raise capital. There is just a proposed limit on this by law, so the capital owning class can't exploit workers. So, these companies can still raise medium amounts of money. Sure, this will limit growth in some ways, but in others it will improve things. Uber, would long ago be profitable and stable business than it is now, for instance in this world. 2. This has nothing to do with communism. Communism advocates for the collective ownership of the means of production, i.e. the entire society owns all means of production. Here, every company is still owned by a limited number of people, and there are markets and competition. People are free to join whichever company that will take them. I am simply proposing a fix to imho the worst feature of capitalism. [1] inspired by anarcho-syndacalism
- oersted 3y ago
  Real co-ops have similar structures as you describe. There is a large variety, since their structure often depend on regional regulation, the companies own "constitutional" rules and the legal category they fall onto (worker collectives, client-customer co-ops, co-ops related to banking or credit, agricultural co-ops...). There's often: * Minimum ratios of owner workers (never 100%, often more like 30%) * Maximum difference between lowest and highest salaries (they often have difficulties offering competitive salaries to executives). * Limits on how much of the profits are reinvested or shared as dividends. * What happens during crisis times: regulated salary reductions, more executive control... There can be configurations that can work very well, with a good compromise between worker ownership, openness to investment and global competitiveness. It's always been niche though. In reality (from personal experience) if the first few founders are able to get minimal capital, it makes much more sense to hire instead of get more co-founders. Even if you can't, it tends to be preferable to keep the founders pool quite small. Individual shareholder-hires can bring in little capital, have a disproportionate influence on how things are done and are hard to get rid of if things don't work out or if the situation changes (which always does frequently in a startup). There's a reason why this has only been done seriously when workers were desperate to revive an economy, or when they are being exploited by monopolistic corporations. Collective ownership tends to be very hard to organize at the beginning and can be quite inflexible due to the inevitable internal politics. When things are bad, everyone tends to be more aligned towards making things better together. And it only tends to scale when this culture becomes deeply ingrained in the organization. It can get a bit cultish, Mondragon has their own (rather good) university where they train the type of employees they need (mostly talented hardware engineers, but many other degrees too) and educate them on their culture early. It's just a normal university, you can go anywhere afterwards, but you do end up quite connected to their network in practice. More info: https://www.nytimes.com/2020/12/29/business/cooperatives-basque-spain-economy.html https://www.nytimes.com/2020/12/29/business/cooperatives-bas...

abdullahkhalids 3y ago

1. Unlike Co-ops, what I am proposing [1] allows for companies to still sell part of themselves to investors to raise capital. There is just a proposed limit on this by law, so the capital owning class can't exploit workers. So, these companies can still raise medium amounts of money. Sure, this will limit growth in some ways, but in others it will improve things. Uber, would long ago be profitable and stable business than it is now, for instance in this world. 2. This has nothing to do with communism. Communism advocates for the collective ownership of the means of production, i.e. the entire society owns all means of production. Here, every company is still owned by a limited number of people, and there are markets and competition. People are free to join whichever company that will take them. I am simply proposing a fix to imho the worst feature of capitalism. [1] inspired by anarcho-syndacalism

oersted 3y ago
Real co-ops have similar structures as you describe. There is a large variety, since their structure often depend on regional regulation, the companies own "constitutional" rules and the legal category they fall onto (worker collectives, client-customer co-ops, co-ops related to banking or credit, agricultural co-ops...). There's often: * Minimum ratios of owner workers (never 100%, often more like 30%) * Maximum difference between lowest and highest salaries (they often have difficulties offering competitive salaries to executives). * Limits on how much of the profits are reinvested or shared as dividends. * What happens during crisis times: regulated salary reductions, more executive control... There can be configurations that can work very well, with a good compromise between worker ownership, openness to investment and global competitiveness. It's always been niche though. In reality (from personal experience) if the first few founders are able to get minimal capital, it makes much more sense to hire instead of get more co-founders. Even if you can't, it tends to be preferable to keep the founders pool quite small. Individual shareholder-hires can bring in little capital, have a disproportionate influence on how things are done and are hard to get rid of if things don't work out or if the situation changes (which always does frequently in a startup). There's a reason why this has only been done seriously when workers were desperate to revive an economy, or when they are being exploited by monopolistic corporations. Collective ownership tends to be very hard to organize at the beginning and can be quite inflexible due to the inevitable internal politics. When things are bad, everyone tends to be more aligned towards making things better together. And it only tends to scale when this culture becomes deeply ingrained in the organization. It can get a bit cultish, Mondragon has their own (rather good) university where they train the type of employees they need (mostly talented hardware engineers, but many other degrees too) and educate them on their culture early. It's just a normal university, you can go anywhere afterwards, but you do end up quite connected to their network in practice. More info: https://www.nytimes.com/2020/12/29/business/cooperatives-basque-spain-economy.html https://www.nytimes.com/2020/12/29/business/cooperatives-bas...