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Not a direct response to OP's question, but I wanted to give some general background info on worker cooperatives and coops in general. A cooperative is type of
by jawns 13y ago
Not a direct response to OP's question, but I wanted to give some general background info on worker cooperatives and coops in general.
A cooperative is type of a business entity that does not have outside shareholders. Rather, its members are its owners.
So, in the case of a worker cooperative, the people who work for the business are its member-owners. (In the case of a consumer cooperative, its patrons are its member-owners.)
What are some benefits of cooperative businesses?
For one thing, because the business is not beholden to outside shareholders, who typically only have an interest in the financial health of the company, it can make decisions that a for-profit company might not be at liberty to make.
For instance, a for-profit bank, under shareholder pressure, might introduce sneaky hidden fees to increase its bottom line -- but at the expense of irritating its patrons. That just wouldn't happen with a credit union (a form of cooperative), because the investors and patrons are one in the same, and their interests are aligned.
Another big benefit, and this is especially true with tech companies, is that the member-owners are invested in the company's success in a way that mere employees are not -- and they have the decision-making power to actually influence how the company operates, because coops are democratically controlled. A lot of tech companies grant stock options and offer profit-sharing programs, but stock options can be a crap shoot (there are a lot of ways for them to end up being worthless, even when the company is profiting handsomely), and profit-sharing doesn't necessarily mean power-sharing.
There are two major downsides to operating a business as a coop, though. One is that you have to raise all of your capital from your members, rather than relying on outside investment. That can be really tough, especially when you're just starting out.
The other downside is regulatory. I'm not sure how it works in other countries, but in the U.S., there are a lot of restrictions and hoops you have to jump through. For instance, consumer cooperatives must restrict membership based on some type of common bond -- a geographic area or an alumni association, for instance. But some types of businesses just don't flourish unless you open them up to everyone. This is less of a problem, though, for worker cooperatives.
I'm a big fan of the cooperative movement, and the broader distributist movement (http://en.wikipedia.org/wiki/Distributism http://en.wikipedia.org/wiki/Distributism), and I wish more people knew about the benefits coops offer.
- stronglikedan 13y agoThanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous? The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience. What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions? Thanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous? The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience. What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions? EDIT: jawns has clarified that the democratic process can be used to appoint an executive heirarchy. I was under the impression that every business decision was put to a vote by the entire cooperative. I understand now that key decision makers can be elected in order to mitigate decisions that may be harmful to the business.
- nickbauman 13y agoI find it amusing that you think a hierarchy can solve the bad decision problem. You may be right, though not in the sense of mitigating a bad decision by having hierarchies, but that hierarchies have the uncanny ability of redefining a bad decision as a good one. At least that's been my experience.
- zwegner 13y agoSeems like it might be an appropriate place for representative democracy. Every year or so, everyone votes on a new CEO, etc. There's probably a lot of decisions that could still be left up to workers, but I agree that having some clear direction is important, and there's lots of questions that just need a "no". The BDFL model of open source is a good example of how this can work without excessive hierarchy.
- 13y ago