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Except worker cooperatives are noted for being particularly resilient against closures - Wikipedia links to a number of studies and analyses here: https://en.wi

by MrJohz 3y ago

Except worker cooperatives are noted for being particularly resilient against closures - Wikipedia links to a number of studies and analyses here: https://en.wikipedia.org/wiki/Worker_cooperative#Research_on_worker_cooperatives https://en.wikipedia.org/wiki/Worker_cooperative#Research_on... For example there's a British study that shows that 76% of worker cooperatives tend to survive the first five years, compared to 42% of all companies overall, making them particularly stable businesses. You've also got typically higher job satisfaction from the employees (so less likely to have the ex-employees to create competitors out of), and more productive employees overall. Honestly that sounds like a pretty good model for businesses overall to me.

hot_gril 3y ago
Because of the big leap involved in "worker owned cooperatives that have been created by workers buying a business." Either the workers are unusually wealthy and dedicated or a rich owner is doing a bit of charity, in both cases their odds are way better with a corp too. If you're starting with nothing, it'll be difficult to find investment for a co-op.
- MrJohz 3y ago
  Do you have evidence to back up that claim? I would imagine that only a minority of coops are actually founded by existing workers, and the majority would be new companies - certainly this is the experience I've had with worker coops near me. But it would be interesting if that wasn't the case. EDIT: the France study is particularly interesting because they specifically talk about this as a potential reason for the surprising longevity, but then point out that "the overwhelming majority of cooperatives are created from scratch, and hence this explanation remains incomplete".
  - hot_gril 3y ago
    Created from scratch probably means someone with a lot of money beforehand decided to do it. The same study calls coop formation rare, and it's hard to control things when you're sampling a rare case.
    - MrJohz 3y ago
      That's true of conventional businesses too, though. It's not like banks hand out loans to anyone who walks in off the street with grandma's best bolognese recipe.
      - hot_gril 3y ago
        Even more money for the coop, though. Like, enough to not need other investors/banks.
        MrJohz 3y ago
        Coops also use banks and can have investors.
        hot_gril 3y ago
        A business with stakeholders who aren't employees is not a co-op.
        MrJohz 3y ago
        That is a very unusual definition of worker co-ops.
        hot_gril 3y ago
        "A worker cooperative is a cooperative owned and self-managed by its workers" is what Wikipedia says. If investors are given stake in the company, it no longer matches that definition. It's not just a technicality, it changes the incentives to being for the profit of the investors.
- Turskarama 3y ago
  Why would the workers be unusually wealthy? They can always get a business loan, a bank is going to be relatively confident if you're buying the same business you have worked in for years and know all the ins and outs.
  - hot_gril 3y ago
    Most workers can't afford that kind of risk or time. They have bills to pay.
cjbgkagh 3y ago
I do wonder about selection criteria biases, it's not like both types of business were started with the same set of circumstances. I.e. if you flipped a coin on a non-cooperative and if heads made it a cooperative would it's probability of success increase or decrease.
- MrJohz 3y ago
  Some of the studies do try and control for the type of business, and the effect still seems to come through. Feel free to click through the sources - that's why I provided the Wikipedia link, because I was too lazy to copy all of their sources into my comment! ;)
  - cjbgkagh 3y ago
    "type of business" is not really sufficient of a control to glean anything really. I know economists/social science make a profession out of trying though, it does not mean we should listen to them.
TylerE 3y ago
It just all seems so very fragile. It would be very easy for institutional culture to slip, or for whatever the restaurant equivalent of technical debt is to accumulate. You see the same thing with a lot of non-profits - they mean well, but they send so much of their funding right back out the door - and the first unexpected expense ruins them.
- MrJohz 3y ago
  And yet evidentially, they aren't so very fragile. Clearly there's something about coops that make them viable businesses, even if that goes against our intuition for what viable businesses ought to look like. I think part of it is that workers typically have very good insights into the immediate needs of a business. You bring up technical debt as an example of the dangers that businesses face, but technical debt is famously a problem that is noticed initially by the workers, and only later by the business as a whole (as velocity falls and new features start becoming painfully slow to implement). The companies that handle technical debt the best are typically the ones where developers are given the freedom and flexibility to make decisions regarding paying off that debt. Similarly, you might expect that when the small problems in a restaurant show up, it's the workers who will notice them first. And the point of a coop is that those workers then have both the motivation (it's their business) and the power (it's their business) to fix those problems immediately, rather than being forced into handling less relevant tasks by a management that doesn't have full visibility of the problem. Fwiw, I'm a fan of the idea of worker coops, but I don't think it's the only setup that works, nor necessarily the best setup in ever case. But worker democracy as a whole - the idea that workers in a company must have a right to contribute to the decisions of that company - seems both moral, and also practically very useful. If you want a good overview on this topic, I recommend the YouTuber Unlearning Economics, who has a whole video on worker democracy and what different forms of it look like (and what the costs and benefits of those forms are): https://youtu.be/yZHYiz60R5Q?si=t4Q9qQLc9K7wsIx_ https://youtu.be/yZHYiz60R5Q?si=t4Q9qQLc9K7wsIx_
  - __loam 3y ago
    The only reason we have the intuition that these would not be viable is because we've been indoctrinated by a capitalistic system since childhood. All the evidence, as you have shown repeatedly in this thread, suggests that workers give a shit when they have a stake in the business, and when they have a say in how the business is run. The results should not be surprising.

by MrJohz 3y ago

hot_gril 3y ago

Because of the big leap involved in "worker owned cooperatives that have been created by workers buying a business." Either the workers are unusually wealthy and dedicated or a rich owner is doing a bit of charity, in both cases their odds are way better with a corp too. If you're starting with nothing, it'll be difficult to find investment for a co-op.

MrJohz 3y ago
Do you have evidence to back up that claim? I would imagine that only a minority of coops are actually founded by existing workers, and the majority would be new companies - certainly this is the experience I've had with worker coops near me. But it would be interesting if that wasn't the case. EDIT: the France study is particularly interesting because they specifically talk about this as a potential reason for the surprising longevity, but then point out that "the overwhelming majority of cooperatives are created from scratch, and hence this explanation remains incomplete".
- hot_gril 3y ago
  Created from scratch probably means someone with a lot of money beforehand decided to do it. The same study calls coop formation rare, and it's hard to control things when you're sampling a rare case.
  - MrJohz 3y ago
    That's true of conventional businesses too, though. It's not like banks hand out loans to anyone who walks in off the street with grandma's best bolognese recipe.
    - hot_gril 3y ago
      Even more money for the coop, though. Like, enough to not need other investors/banks.
      - MrJohz 3y ago
        Coops also use banks and can have investors.
        hot_gril 3y ago
        A business with stakeholders who aren't employees is not a co-op.
        MrJohz 3y ago
        That is a very unusual definition of worker co-ops.
        hot_gril 3y ago
        "A worker cooperative is a cooperative owned and self-managed by its workers" is what Wikipedia says. If investors are given stake in the company, it no longer matches that definition. It's not just a technicality, it changes the incentives to being for the profit of the investors.
Turskarama 3y ago
Why would the workers be unusually wealthy? They can always get a business loan, a bank is going to be relatively confident if you're buying the same business you have worked in for years and know all the ins and outs.
- hot_gril 3y ago
  Most workers can't afford that kind of risk or time. They have bills to pay.

cjbgkagh 3y ago

I do wonder about selection criteria biases, it's not like both types of business were started with the same set of circumstances. I.e. if you flipped a coin on a non-cooperative and if heads made it a cooperative would it's probability of success increase or decrease.

MrJohz 3y ago
Some of the studies do try and control for the type of business, and the effect still seems to come through. Feel free to click through the sources - that's why I provided the Wikipedia link, because I was too lazy to copy all of their sources into my comment! ;)
- cjbgkagh 3y ago
  "type of business" is not really sufficient of a control to glean anything really. I know economists/social science make a profession out of trying though, it does not mean we should listen to them.

TylerE 3y ago

It just all seems so very fragile. It would be very easy for institutional culture to slip, or for whatever the restaurant equivalent of technical debt is to accumulate. You see the same thing with a lot of non-profits - they mean well, but they send so much of their funding right back out the door - and the first unexpected expense ruins them.

MrJohz 3y ago
And yet evidentially, they aren't so very fragile. Clearly there's something about coops that make them viable businesses, even if that goes against our intuition for what viable businesses ought to look like. I think part of it is that workers typically have very good insights into the immediate needs of a business. You bring up technical debt as an example of the dangers that businesses face, but technical debt is famously a problem that is noticed initially by the workers, and only later by the business as a whole (as velocity falls and new features start becoming painfully slow to implement). The companies that handle technical debt the best are typically the ones where developers are given the freedom and flexibility to make decisions regarding paying off that debt. Similarly, you might expect that when the small problems in a restaurant show up, it's the workers who will notice them first. And the point of a coop is that those workers then have both the motivation (it's their business) and the power (it's their business) to fix those problems immediately, rather than being forced into handling less relevant tasks by a management that doesn't have full visibility of the problem. Fwiw, I'm a fan of the idea of worker coops, but I don't think it's the only setup that works, nor necessarily the best setup in ever case. But worker democracy as a whole - the idea that workers in a company must have a right to contribute to the decisions of that company - seems both moral, and also practically very useful. If you want a good overview on this topic, I recommend the YouTuber Unlearning Economics, who has a whole video on worker democracy and what different forms of it look like (and what the costs and benefits of those forms are): https://youtu.be/yZHYiz60R5Q?si=t4Q9qQLc9K7wsIx_ https://youtu.be/yZHYiz60R5Q?si=t4Q9qQLc9K7wsIx_
- __loam 3y ago
  The only reason we have the intuition that these would not be viable is because we've been indoctrinated by a capitalistic system since childhood. All the evidence, as you have shown repeatedly in this thread, suggests that workers give a shit when they have a stake in the business, and when they have a say in how the business is run. The results should not be surprising.