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A worker cooperative has the incentive to maximize wage expenditures, which isn't exactly ideal for thriving in the marketplace. The traditional corporation's i
by jacoblyles 17y ago
A worker cooperative has the incentive to maximize wage expenditures, which isn't exactly ideal for thriving in the marketplace. The traditional corporation's incentive to maximize profits is healthier from a competitive standpoint.
- aaronblohowiak 17y agoIf the company management runs a more efficient company, than they get more profits.. it just so happens that the rest of the "shareholders" are also the workers. I don't think it is right to look at the profit-sharing is not a "wage expenditure." Also, the desire to maximize short-term profits, as a traditional corporation with liquid equity is incentivized to do so, often leads to a lack of research, maintenance and other negligence that eventually adds up. The profit-sharing employees arguably have the long-term health of their source of income in mind and so they don't suffer the same tendency.
- jacoblyles 17y agoGood point on the idea that a coop might have a longer-term planning horizon. However, the point that a corporation has only short-term profit in mind is overstated. Drug companies take decades to bring a product to market, that's some long-term planning.
- aaronblohowiak 17y agoDrug companies are a special case due to extreme regulation, research grants, and tax breaks.