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What imperfections do you believe exist that prevent efficient coops from taking over? Please be specific.

• scarmig 12y ago
  Not the comment author and I wouldn't commit to the idea that co-ops are more efficient, but here's a stab: 1) Coops have different governance structures than traditional businesses. Diffused knowledge, institutional practices, and the legal system itself are oriented toward the dominant paradigm. Given a choice between a traditional business and a co-op that is otherwise equally well-situated, if I'm a profit maximizer I'm going to loan capital to the traditional business, since it's more of a known quantity. I've got no idea of the unknown unknowns that go along with getting involved with a co-op. 2) This goes along with the idea that co-ops are inefficient instead of trying to argue they aren't, but the incentives of a co-op are different than a traditional business. A traditional business will attempt to maximize total profit per unit capital (I think); a co-op will try to maximize something closer to total profit per unit labor. The former will succeed in a capital-poor world, while the latter is better for a labor-poor world.