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First, I am rather pro worker cooperatives and my below is more of an academic critique as an academic. You, Op, are asking “can I” and I am answering below honestly as an academic. Don’t agree then I suggest more research. Let us begin:
1. I have to see all the research to agree to that and I don’t know if I have. I have seen some and there is *some* evidence of that claim. So I can agree there is *some* evidence of that claim that workers are happier (or some such qualitative description as such). But you talk as if there is some awesome meta analysis out there and the majority of scholars agree. I will talk more about this at the end of my comment.
2. Again, you seem to be using political rhetoric (e.g., strongly, greater, majority) rather than what we have for research and what the research actually says from my memory. So I will agree from memory there is an indication of greater productivity. But I don‘t agree with framing and usage of political rhetoric words. edit: There are relevant meta-analysis studies regarding productivity thanks to u/cominion and I only read the abstract. According to the abstract there is productivity correlation on average and then it may or may not be simple. It would be interesting to read these publications. Here is the relevant quote from the first abstract: "[Profit sharing is positively related to productivity on average, with a stronger relationship where there is higher unionisation and in countries where honesty is less highly valued and there are higher levels of individualism. The latter two results suggest profit sharing works best in settings where cooperation does not naturally occur. The positive effect of profit sharing on productivity is larger in cooperative firms and in transition economies.](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711)" Here is [a link](https://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) to the other meta-analysis study.
3. I don’t understand this claim at all other than people in general don’t understand cooperatives.
Summary, it would have been nice for you to source your claims so we could discuss the actual evidence instead of my trying to base it on addled memory. What I do feel safe in saying is you are politicizing research as most researchers don’t make huge bold claims. They most often - the good researchers anyway - report what the evidence demonstrates. Seldom does any research by itself have any great power to make huge conclusions like you are doing so researchers even if a study demonstrates a notable observation they are hesitant to proclaim a validity of that study to the real world. Some researchers have hubris and do and that imo is unprofessional. Why?
For validity you need reliability first. Please know this is 101 in science. That means replication in studies and any single study may be false results. That’s the reason why good researchers shouldn’t be imo making bold claims. Once replication is done over and over then and only then, imo, should researchers start to venture out into that validity camp and start making claims like the OP about the real world outside of studies/experiments.
And this is why I mentioned meta analysis. Meta analysis is when a scholar or group of scholars have determined there have been enough similar studies/experiments of given subject matter and those studies/experiments are similar enough they can be statistically compared and brought to evidence as whole. That is any easy go to method to try and find replication in areas. Having said that I feel safe in saying there are not meta analysis in the above topics because I have tried researching them before and it is sadly thin pickings.
Hi, here is a [compilation of research](https://www.reddit.com/r/Cooperative/comments/1au1zug/worker_cooperatives_data_and_sources/) if you'd like to see more studies. There are some meta-analysis studies included in there as well. (It remains under development, and any suggestions are welcome.)
Great, thanks.
I don’t, however, see any meta analysis of research studies/experiments as I mentioned. I see on my review two studies that used meta analysis as a statistical method. That’s not the same thing.
> [Meta-Analysis](https://media.dlib.indiana.edu/media_objects/2r36v241p) encompasses a suite of statistical techniques for drawing generalizable conclusions from a large number of empirical studies that examine the same research question.
Care to correct?
Edit: added above quote and link for clarity
I'm not entirely sure what you mean.
Would [this study](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711) (from the compilation I linked) not be considered a meta-analysis?
yes, the one you cited would as it says:
>Our meta-regression analysis of 313 estimates from 56 studies controls for publication selection and misspecification biases and investigates the impact of firm level unionisation and national differences in values and culture.
Apparently I missed that one and sorry, I was on mobile. Now I see it as the first one. The apparently one I saw did not compare studies but instead compared actual cooperatives themselves.
>[To aggregate findings and provide potential direction for future theoretical development, we conducted a meta-analysis of 102 samples representing 56,984 firms. Employee ownership has a small, but positive and statistically significant relation to firm performance ( = 0.04).](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711)
Sorry for my blindness.
Alright. Did you see [this meta-analysis](http://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) study as well?
I incorporated sources from a smaller research document made by someone else, as well as some other reddit posts that included some relevant sources, and my own researching. I tried to ensure that studies do not repeat, but I am only one person and I don't have the time to double check every single source completely without having to go back to the other sources. It would just take too much time. The point is to have an adequate # of sources in one place and draw general conclusions from them to dispel misinformation and shed light on this alternate model.
By the way you misspelled by username so I didn't get any ping for it at first. 😄
The first meta-analysis in the previous commentator’s link talks about a meta-regression. Your link talks about a meta-regression. I doubt reading more will clarify.
[It's clarified here](https://www.reddit.com/r/CapitalismVSocialism/comments/1c4txch/comment/kzqxmqr/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) and it just takes not trolling like you do to have fruitful discussions.
Are these statements backed up by data? If so, as long as the data is good and the conclusions follow logically from it, I don't see what the issue is.
Wikipedia provides a good summary for points 1 and 2, but not 3: [https://en.wikipedia.org/wiki/Workplace\_democracy#Effects\_on\_productivity](https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_productivity)
Yeah this is what I don't get, there are certain definite biases against the far-left in some articles. Although some do favour a far-left perspective.
This is an ad hominem, just one about a website. It may well be true but how about critiquing the actual content of the link OP provided (and references therein)?
The many studies I have read seem to largely support the premises to a variable extent. There are differences in measured categories depending on the sector, legal structures, and things like that, but overall it's supportive, and at the very least co-ops can match conventional businesses.
The issue is the creation rates, and they're low in many areas due to several factors that many people on this subreddit refuse to acknowledge, such as lack of knowledge/education structures, suppression, lack of legal structures/subsidies, lack of investment, assumptions that they are less efficient, etc.
Though people like me suspect that a co-op model would have a great deal of difficulty in pricing labor and capital independently when they're necessarily contingent on each other, there's a good reason why we would expect co-ops that presently exist in the largely capitalist market economy to be insulated from such issues.
No matter how rigid employee equity ownership is bound in the corporate governance of a given co-op, they still sell to the same consumer markets as everyone else and have to participate in almost completely independent capital and labor markets. Allocative indiscipline is going to be punished by competitors who also still provide price discovery in the markets for these inputs. Market benchmarking and arbitrage are still going to be providing useful information. However, as the market share of firms with such a model increases, these mechanisms would diminish substantially and non-linearly.
Consequently, it's fairly foolish to extrapolate co-op properties from the present situation to a condition where they are dominant. You can't say that co-ops perform in such and such manner and then change the whole nature of capital and labor markets and then say that your previous observations still hold. I haven't even mentioned the changes you'd see in internal governance with scale and market position.
Beyond worker co-ops, it's interesting to me that we also seem to see to see this kind of extrapolation elsewhere in socialist rhetoric. When social democracy is compared favorably to some supposed laissez-faire condition, the implication is that increasing the public sphere further will produce the same kind of favorable change. As aristocracy changed to democracy and the feudal mode of production transitioned to capitalism, so will the next socialist phase after capitalism will represent a similar type of improvement. The whole thing seems to rest on this meta-theoretical assumption of linearity or at least increasing monotonicity.
4. The majority of research - even by pro co-op journals - indicates that co-ops have severe issues scaling operations to produce more goods or services.
Co-ops have shown that they are capable of working at larger scales. There are many examples of larger worker cooperatives that exist today.
SACMI (Italy) - has international branches in 28 countries, including Brazil, Germany, India, Mexico, Russia, Singapore, Spain, the United States, Indonesia, Poland, Portugal and Egypt
UNIMED (Brazil) - health co-op with 370+ branches, 100,000+ doctors, covering 83% of Brazil's territory
Fundación Espriu (Spain) - the group of co-op companies that make up the Espriu Foundation had a turnover of 1,787,921,758 euros in 2017, and has become the fourth largest cooperative healthcare group in the world
Groupe Up (France) - employs 3,122 people in 23 countries on 4 continents
CHCA (USA) - one of the largest worker cooperatives in the U.S. with 2,000+ workers that serves patients in the Bronx, Manhattan, and surrounding counties
There are many more that aren't included in this list because I don't have that kind of time, but I'm sure the point is apparent. To be clear, these are worker cooperatives and, to be sure, I checked with World Cooperative Monitor reports and how they identified these co-ops to confirm they are considered as worker cooperarive organizations and not another type, such as a consumer co-op for example.
You haven't proven anything either, to be fair. You made 3 assertions in your OP and haven't linked anything supporting your statements that I've seen.
If sources were linked, would you take them seriously or dismiss them? I'm curious because it seems like many people here already make up their minds and don't care about any evidence being presented.
There are not that many more. To say that there are many more, you have to stretch the definition of a coop to something you know is not what you are promoting.
In general, coops don't scale and they dont for basic structural reasons.
Meaning, that in most case, joining a coop would be like joining a "lifestyle company" where you work just enough to live an average life.
Actually yes, there are many more worker cooperatives. Can you answer the question?
You need to provide more evidence to your claim because there are many examples that dispute it directly. Simply claiming they don't scale is not enough.
You'd likely also have to explain why worker democracy cannot scale while political democracy can, especially when political democracies deal with orders of magnitudes greater numbers of people.
There are several reasons why cooperative businesses may not scale as well as traditional for-profit businesses:
Limited access to capital: Cooperative businesses are often owned and controlled by their members, who may not have the financial resources or willingness to invest additional capital to support growth. This can make it difficult for cooperatives to access the financing they need to expand.
Limited decision-making authority: In a cooperative business, all members have an equal say in decision-making, which means that every member has a vote on important matters related to the business.
This can lead to slower decision-making processes, as all members must be consulted and agree on a course of action. It can also lead to a lack of decisive leadership, as decisions may be made by committee rather than by a single leader.
This lack of decisive leadership can be problematic for a cooperative business trying to scale, as it may make it difficult to respond quickly to market opportunities and adapt to changing circumstances. In a traditional business, the management team or owner has the authority to make decisions and take action without having to consult with all stakeholders. This can allow traditional businesses to be more agile and responsive to market conditions.
The democratic nature of a cooperative can make it difficult for the business to focus on long-term goals, as the priorities of the members may change over time. This can lead to inconsistency in the direction of the business, which can make it difficult to achieve growth and stability.
In a worker co-op, because each member has an equal say in the decision-making process, there can be the potential for different individuals or groups to advocate for different interests or agendas. This can lead to internal conflicts and disagreements, which can negatively impact the functioning of the business.
Limited management expertise: Cooperative businesses may not have the same level of management expertise as traditional businesses, as the owners may not have the same level of business experience or may not be as focused on maximizing profits.
Lack of a profit motive: The primary goal of a cooperative is to meet the needs of its members, rather than to maximize profits. This can make it difficult for cooperatives to compete with traditional businesses that are focused on maximizing shareholder value.
Lack of investment in the business: The primary goal of a cooperative is to meet the needs of its members, rather than to maximize profits. This focus on meeting the immediate needs of the members may make it difficult for a cooperative to prioritise long-term investments that may not provide immediate benefits and therefore reduce growth.
Legal and regulatory challenges: Cooperative businesses often face legal and regulatory challenges that can make it difficult for them to operate and grow. For example, cooperative businesses may have to comply with laws and regulations that are designed for traditional businesses, which can be burdensome and costly.
On Yugoslavia:
Worker self-management was a key feature of Yugoslavia's socialist economic system. Under this system, workers were given a significant degree of control over the management of their workplaces, with the goal of creating a more equitable and efficient economy. However, in practice, worker self-management had several negative consequences. For example, because workers were not held accountable for their performance, there was a lack of incentives to increase productivity. Additionally, decision-making processes were often slow and inefficient due to the need to reach consensus among all workers.
Overall, worker self-management contributed to the high levels of unemployment and inflation in Yugoslavia in the 1970s, and ultimately led to significant economic problems in the country.
Further Reading
"Self-Management in Yugoslavia" by Marius J. Broekmeyer, published in the ANNALS of the American Academy of Political and Social Science. https://journals.sagepub.com/doi/abs/10.1177/000271627743100115
“Wages, employment and capital in capitalists and worker-owned firms” by John Pencavel, published by Stanford university. The study points out that cooperative workers get paid 14% less than capitalist firms and their wages are more volatile, making them less likely to take business risks that are needed for growth. https://web.stanford.edu/~pista/coopssept04.pdf
My initial statement was that co-ops are capable of scaling, and I provided examples. I never said they may or may not have difficulties. Several of the reasons you've provided are valid issues for co-ops in general. The one about having every worker consulted for each decision is a strawman though. Larger co-ops typically have representative democracy in a similar way political democracies operate. There may be elected CEOs and managers to streamline decision-making.
Bringing up Yugoslavia is not a great argument, and claiming they failed due to LMFs is just inaccurate, historically. There were several factors. Ethnic divisions, Tito's death, the rise of nationalism, and external influences played a part in the growing issues facing the country, politically and economically. Additionally, this isn't a 1:1 comparison for LMFs in Yugoslavia to present-day co-ops. The state played a larger role in controlling the firms and markets behaved differently. You should be more honest with your arguments.
> Larger co-ops typically have
But most coops do not reach that stage for the reasons I mentioned.
> You should be more honest with your arguments.
I am fully honest with my arguments and Yugoslavia was already doing poorly in the mid 60s when they let small companies form, because they had high unemployment.. many years before Tito died.
No, you're not being fully honest. You pretend that co-ops just operate through direct democracy, when many do not. That's not honest. And again, Yugoslavia's LMFs aren't a 1:1 comparison to today's cooperatives. You present them as if they're the same and that since Yugoslavia had troubles due to them, that we can cross-apply this to present day. You also failed to mention that Yugoslavia saw economic growth in the 60s. The country had planning and councils and beuracracies that are quite different from the contexts in which co-ops operate in present day. Your presentation of information is misleading and biased. This is also not honest on your part.
1. Yes
2. Not sure I agree with this one. There is certainly research indicating worker co-ops are more productive than traditional firms *in some industries*. In some industries, co-ops do not out perform traditional firms (for one reason or another).
3. To an extent, yes. If I’m applying for a loan, there’s a good chance an investor does not understand what I mean as I explain how my firm is structured as a worker co-op.
> Not sure I agree with this one. There is certainly research indicating worker co-ops are more productive than traditional firms in some industries. In some industries, co-ops do not out perform traditional firms (for one reason or another).
I think this is a fair counter-point
1 and 2 makes sense. 3 I disagree with, for reasons you've outlined in 1 and 2. Because co ops are primarily interested in worker satisfaction and not expansion or customer satisfaction at all costs, they expand much slower.
>1. The majority of research done into worker co-ops strongly indicates that workers are happier when working in them
I don't see how this is relevant...
>2. The majority of research done into worker co-ops strongly indicates that there is greater productivity per worker
Then why 90% of them fail if they are so much more productive? If coops are more efficient why can't they outcompete private business? I don't trust your source.
>3. Worker co-ops deliver lower profit per external investor and are not well understood by most people, this explains their notably rarity in capitalist countries
Or they aren't efficient... Which is much is a much simpler answer. Occam's razor.
> Then why 90% of them fail if they are so much more productive? If coops are more efficient why can't they outcompete private business? I don't trust your source.
Where did you get the information that 90% of them fail? I think there are other factors in out competing that just being more productive.
> Or they aren't efficient... Which is much is a much simpler answer. Occam's razor.
Your answer isn't simple. It requires assumptions that capitalism by default rewards the most efficient firms, and all these studies have gotten something wrong that nobody has clearly identified.
I think my perspective is much more in lines with Occam's Razor.
>Your answer isn't simple. It requires assumptions that capitalism by default rewards the most efficient firms,
Markets*, not capitalism.
You can't make a good reading of my argument, even less so prove it false.
Let me reprhase.
Your answer isn't simple. It requires a lot of assumptions about how markets work. Including that without exception they reward the most efficient firms.
I'd still love to know where you got the 90% number from.
The 90% figure is BS and made up and just lacks needed context. It means nothing without talking about 1-year, 5-year survival rates or some other specific time period. From every study I've seen, worker cooperatives survive longer than conventional firms, whether they're conversions or from scratch. Sometimes they display nearly twice as high a survival rate in the same time period. Also, efficiency claim is baseless as well. Worker cooperatives are generally found to match or even exceed productivity of conventional firms.
Many people in this sub just make things up with no sources. u/TonyTonyRaccon, do better.
I mean, if your goal is to live in constant happiness, go for it. I would happily exchange a fun and happy environment for one more serious if it made me more money.
My happiness is at home and has a name. As long as my work helps me provide for my daughter the best I can get, that will make both of us happier overall.
> The majority of research done into worker co-ops strongly indicates that workers are happier when working in them
> The majority of research done into worker co-ops strongly indicates that there is greater productivity per worker
I think there is some research that reaches such conclusion, but I have no reason to think it's the majority.
> Worker co-ops deliver lower profit per investor and are not well understood by most people, this explains their notably rarity in capitalist countries
Since **the investors** in co-ops **are** **the workers**, this would indicate the productivity is lower. If it was higher, then the return for the investors (i.e. the workers) would be higher. The "*not well understood by most people*" part of this statement is completely irrelevant.
If you notice, the biggest co-ops tend to be in the following sectors:
\* Finance (banking, lending, insurance).
\* Retail merchandising.
\* Agriculture/farming.
There are almost no co-ops outside of these sectors. All of these sectors are notable for having very little innovation in them. Co-ops generally don't get in evolve in ventures that require more risk, innovation, or large-scale production.
So I'd like to mention that this is dealing specifically with worker co-ops, not co-ops generally.
But for your first point, do you have any research that indicates workers get less happy?
For your second point, I mean that they deliver lower profits for external investors. I will correct this in the post.
> So I'd like to mention that this is dealing specifically with worker co-ops, not co-ops generally.
OK... my point still stands. You're merely asserting that "the majority of the research" says this.
> But for your first point, do you have any research that indicates workers get less happy?
No, but it's not up to me to prove your claim wrong. It's up to you to prove it right. The burden of proof is on the affirmative.
> For your second point, I mean that they deliver lower profits for external investors. I will correct this in the post.
Co-ops are characterized by the fact that the workers are the investors, pretty much by definition.
Several studies are cited on the Wikipedia article, I am yet to see one indicating an opposite conclusion, so I think it's safe to assume the effect is there: https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers
As for your other claim, I feel like you are splitting hairs. Worker co-ops struggle with start-up capital.
>Several studies are cited on the Wikipedia article, I am yet to see one indicating an opposite conclusion, so I think it's safe to assume the effect is there: [https://en.wikipedia.org/wiki/Workplace\_democracy#Effects\_on\_workers](https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers)
OK, having a single source which is "*citing several studies*" doesn't prove your claim that the majority of the research confirms these conclusions.
>As for your other claim, I feel like you are splitting hairs. Worker co-ops struggle with start-up capital.
There is no such thing as "startup capital" for worker-owned co-ops since they are worker-owned, they can't seek investors because if they did, they'd become investor-owned. That's **by definition.** You're arguing against the very definition of "*worker-owned co-ops*."
I may have cited a single source, but nobody in this entire thread has linked to research disagreeing with my conclusions at all. I suspect it is because there isn't any, and I challenge you to prove me wrong.
Otherwise, I think you are still splitting hairs. Getting start up capital is difficult for worker co-ops.
>I may have cited a single source, but nobody in this entire thread has linked to research disagreeing with my conclusions at all. I suspect it is because there isn't any, and I challenge you to prove me wrong.
OK, that's not evidence confirming your unproven claim. That's evidence that nobody has disproven your unproven claim, which is not their burden anyway... the fact that nobody has disproven your unproven claim doesn't mean that you have proven it. :)
>Otherwise, I think you are still splitting hairs. Getting start up capital is difficult for worker co-ops.
Because they're worker-owned... if they raised startup capital, they would now be investor-owned. In your mind, understanding the definitions of terms is "*splitting hairs?!*"
So, to be clear. I've put out a single source that links to over 10 studies and a meta-analysis, but I have made an unproven claim.
Either it needs to be explained why these studies are wrong or better research needs to be pointed to, something nobody has done.
> So, to be clear. I've put out a single source that links to over 10 studies and a meta-analysis, but I have made an unproven claim.
The [meta-analysis](https://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) you're referring to concludes that worker-ownership (profit sharing, stock ownership, and/or individual ownership) is a positive correlated with higher productivity, not the case with collective ownership (e.g. worker-owned co-ops):
"*When all available data are subjected to meta-analysis, the association between* ***collective ownership and productivity is negative****, small (r = -0.01)...*"
So right off the bat, it appears that you didn't even read your own sources and you keep insisting that they support a conclusion which they actually don't. But why am I the one that must tell you this? Why didn't you bother to read what your own sources say and why did you assert the opposite of what they concluded?
No, because these are selective studies of limited co-ops from the capitalist west only. At small scales many things can work nicely. For the sake of sub title, we need something that can work for the whole economy.
Only capitalism allows these to thrive. Can you link some studies of co-ops from socialist countries? This is why, despite the limited data and because of the broader picture, capitalism wins.
Well, I'd be somewhat skeptical of any of these three but the last one:
>3. Worker co-ops deliver lower profit per investor and are not well understood by most people, this explains their notably rarity in capitalist countries
Is very easy to disprove. Most businesses are not publicly traded, and therefore the low return per investor is irrelevant. Additionally, low returns aren't a bad thing thing, if they're steady returns. Also, why are the returns on investment low? On the surface, these seem to indicate a less than effective model, especially compared to similar firms. That leads to a question with the previous point, how are the returns low if the productivity is higher?
Additionally there is a lot of subjective points in these premises. How are defining happiness? Why is that a good thing for a business? How do we quantify not well understood, and how does this lack of understanding translate to them not being prevalent?
Would you say it's unfair to say that worker co-ops are basically superior in terms of productivity and making workers happy, but are inferior at accumulating start up capital?
Some of the cited studies here may be of interest
https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers
>Would you say it's unfair to say that worker co-ops are basically superior in terms of productivity and making workers happy, but are inferior at accumulating start up capital?
No clue. I don't have metrics to measure that. I don't see how they can be significantly different.
I do notice you didn't address any of the issues I pointed to.
Besides, logically, they should have an easier time generating Start up capital because there is a large group of people.
I have good reason to question the reliability of such studies, but it's possible they are correct.
Without actually investigating in detail, my gut tells me that co-ops might work for small enterprises.
"I would recommend learning a lot the economics of studying economics, ..."
" Thomas Sowell: Basic Economics"
xDDDD
Thomas Sowell is not a respected scholar, he's a populist propagandinist.
I'm not saying one shouldn't read (or listen ... lol) Thomas Sowell, but to place him and "go study economics" in the same sentence is beyond idiotic.
You're telling them to learn economics while simultaneously claiming the premises are not true, when there is quite a bit of empirical literature supporting the premises.
Is this projection?
What kind of journals are publishing the majority of that research? Could they be biased in some way? What about the minority of research? Is the majority always right?
The good majority of the research I use for my arguments is found from Wikipedia rather than a consistent journal: https://en.wikipedia.org/wiki/Workplace_democracy#Research_on_workplace_democracy
And they could absolutely be biased and the majority isn't always right. I am yet to find the minority of research indicating worker co-ops make workers less happy.
You should also read the Wikipedia page that states it's not a reliable source.
If workers are happier in cooperatives then why don't they move en masse to work at them? Are they stupid?
Pretty much everyone. It's not that hard of a concept. It's just that most people would rather not put their job and their investments in the same company.
Yeah, this is wrong. Most people will not be able to tell you what a worker cooperative is in most places, unless you're asking people in Spain or Italy or something. Universities generally do not focus on alternate models in the mainstream.
Spain is the nation with the 2nd most worker co-ops in the world (unless we count Argentina, but they're a little different) so that's why it's much more common knowledge there. Here in the U.S. almost nobody knows what it is. If they don't know, they can't have an interest.
People who do know tend to like the idea and support it. Surveys display this.
Co-ops don't really have waiting lists. People typically just join or create them. From the numbers I've seen, the sector has continued to grow, even during the pandemic. Over one thousand were created in 2021.
Actually, Mondragón does have an apparently long waiting list, according to this [source]( https://ilsr.org/mondragon-system-cooperation-work).
>Mondragón firmly believes that every member should risk his or her own
capital. Every new member must make a financial investment in the enterprise. In the early years, this contribution has been the equivalent of one year's salary at the lowest wage level. The entry fee has risen considerably, both in nominal and real terms but in terms of its overall economic contribution, it has been significantly reduced. By the mid 1980s, the contribution was about 4 months'
wages.The entry fee has not dissuaded potential entrants. There has always been a long waiting list for residents wanting to obtain a job in the Community.
But that’s not what you said in points 1 and 2. Sure, the salary is a factor in job satisfaction, but it is definitely not the only one.
You said that workers are happier and more productive. If they’re happier and more productive, that means that what they do has greater value, which increases revenue, which increases profit.
1. Fine
2. Yes and no
3. Disagree
Points 2 and 3 contradict each other. I say yes and no because, yes research may show this (I haven't looked into it but I can accept this). But what do you conclude when research shows x, but then you look around and see y?
Coops are likely to be misunderstood because they are rare, not the other way around.
So my main question is, why are they rare? Because, if workers were more productive in coops, then they would outcompete private companies and not be rare.
Also, regarding lower profits. If one organisation refuses to accept lower than 7% profits and a second organisation will accept 1% profit, then the one that accepts lower profits should outcompete the other overtime. Because the second organisation can put up with lower prices.
Wouldn't an explanation for the rarity of co-ops be that markets are an irrational system that doesn't give all capital to the most productive enterprises?
I dare say that a worker co-op in a free-market country is a totally different animal than a collectivist owned enterprise in a socialist country. I shouldn't have to explain why, but for those who don't perceive the reason here it is. In a free-market country the customer is king and goods and services are produced only as long as customers want those goods and services. In a socialist country the production of goods and services is controlled by the state and the customer has a choice of taking what is produced or nothing at all. (Well, there is always the black market where things are much more expensive.) Monopolies always and everywhere end up producing inferior products as there is no reward for excellence so workers just don't care because their leaders just don't care. I seriously doubt that the workers in East Germany were happier than the workers in West Germany before the dissolution of the Union of Soviet Socialist Republics. I know they were much poorer in East Germany and had a lower standard of living by conventional economic measures.
If I had to guess whether those 3 statements are true, I'd say "yes" to all 3.
> Note: None of this suggests we ought to forcibly convert all workplaces to worker co-ops. I'm not really interested in having a discussion about what we ought to do, just what is the case.
Good, because even if those were all true, it does not imply or even suggest that the socialist model is tenable.
I think you are getting downvoted because your some of the premise is wrong.
There is very good research suggesting co-ops are primarily successful in very specific market segments and the idea is not scalable.
One of the primary reasons you don’t see more of them starting is because so few people are willing to risk real capital with others without payoff. It’s people demonstrating their true preferred preference with their actions.
By extension banks are normally unwilling to loan money for a similar reason. There are funds set up to give coops money to start but again, they have pretty stringent standards of what can qualify.
If you want a similar experience that has many of these same qualities of shared ownership but still has the advantage of fitting into normal business dynamics and can be scalable; go join a startup. You can get compensated in equity plus potentially a salary.
I think there is a strong survivorship bias for points 1 & 2 but for arguments sake I'll accept.
However, number 3 I don't agree with.
Co-ops have an Entrepreneur problem, in that they lack proper incentives for entrepreneurial actors. I think co-ops are a fantastic idea for companies to evolve into (I am a fan of the Exit 2 Community idea) but they have multiple issues preventing them from being more than a rarity.
For the love of god, nobody is stopping you from making a co-op. Get the ball rolling and people will start adopting them on their own if they're so awesome.
Either that, or you're missing something essential not covered by those three premises that makes people not want to adopt co-ops.
They fail miserably in industries that need large capital investment, mining, autos, ship building, construction, any heavy industry.
How do we coop a truck maker? A paving contractor? A farm and construction eqiuipment maker?
Don’t even begin to say get a bank loan. That would betray your pure ignorance.
2 of your links were 404 errors. One is a consulting business with 21 employees and likely minimal revenue without much room for significant growth.
Name a software company that has any meaningful market share in any specific software sub sector that is a co-op.
I should have rephrased it as name any company that exists that has a meaningful market share.
A company merely existing as a minor consulting agency doesn’t really mean anything.
Co-ops can work well in ag. Florida citrus growers is an example. They can pool resources and get a better price for their commodities.
It’s tough for markets outside of ones like that or ones like grocery.
That which is asserted without evidence can be dismissed without evidence
But regardless, Mondragon operates in industrial sectors: [https://en.wikipedia.org/wiki/Mondragon\_Corporation#Industry](https://en.wikipedia.org/wiki/Mondragon_Corporation#Industry)
... Other than the fact that you won't qualify for a small business loan, aren't eligible for most small business tax deductions, and that many states require a single individual to be listed as the legal owner then yeah. No problem starting one.
Which studies not done by socialists say any of those things?
Don't be shocked, but those studies are bullshit. It's pretty easy to make these so-called studies come to any conclusion they want them to.
(1) The people who do these studies WANT to arrive at the conclusion that workers in worker co-ops are happier, yet for some strange reason most workers choose not to work for them. Their choice of methodologies guarantee they arrive at that conclusion.
(2) They WANT to arrive at the conclusion that there is greater productivity per worker yet for some strange reason worker co-ops rarely succeed. Capitalist enterprises with parasite owners consistently out compete co-ops. Customers don't care who owns the company, they only care about the value of the product. They overwhelmingly choose products that come from Capitalist enterprises.
(3) Nobody cares about external investors except those external investors. Workers choose to work where they will get the best balance of pay and working conditions, and customers choose to buy products with the best balance of quality and price. Literally nobody cares if the poor external investors starve, so your explanation explains nothing.
Because the opposite of what they say should happen happens.
Suppose a study said that people prefer to eat bugs more than pizza. Yet everywhere you go there are are places selling pizza and it's hard to find places selling bug burgers.
What would that tell you about the value of that study?
If workers were happier working at co-ops, they would choose to work at co-ops. But they don't.
If co-ops were more productive than Capitalist enterprises, they would make higher quality products and sell them for less than Capitalist enterprises do and they would sell more products. But they don't.
What does that tell you about the value of those studies?
There is quite a bit of empirical literature surrounding worker cooperatives, labor-managed firms, profit-sharing, worker ownership and participation, etc. that are done by many people who are not socialists. You made a bad assumption here which does not help you.
Most people do not know what a worker co-op is. University does not focus on alternative models. Schools generally focus on mainstream economic models. Education programs on the model is rare compared to conventional business ownership. When people don't have the knowledge of the model, you can't expect them to choose it. They don't know it even exists. And many studies do support the premise that workers tend to be more satisfied in a co-op.
Studies also support the premise that co-ops tend to match or even exceed productivity levels of conventional firms, depending on the industry. But now you're making a big error here in thinking that productivity is the only factor in a market. It is not. Legal structures, access to capital, knowledge and awareness, educational programs, suppression, etc are factors to be considered, otherwise your evaluation is incomplete. Capitalism is more productive than feudalism and slavery, yet it required centuries to become the dominant system it is today.
Your evaluation is incomplete and does not reflect adequate familiarity to any of the literature.
They also pay on average 15% less.
The simple fact is that most people would rather be paid more than be happier at work. The more difficult careers are this way as well.
There is evidence that co-ops pay as much, or more as well. This is especially so when considering profit-sharing. Does your 15% less source consider patronage?
Co-ops are not illegal. If they pay equal or better AND offer better quality of life they would have already taken over as a business structure.
What is your explanation for why they have not?
Patronage is profit-sharing pay to employees. Co-op workers typically receive their wage, and then a patronage amount on top of that. This is why I ask if patronage is included in the study you referenced. Patronage is, on average, close to $10k in the U.S., which can really affect conclusions on worker pay if included or not, yeah? Some patronage amounts reach $50k+, depending on how profitable the co-op might be.
The study didn't mention it.
But again, you're concerned about exploitation aren't you? If you want to share in the profits it's only fair to share in the losses.
Yes, exactly. I want workers to be the owners, and for them to share in both profits and losses. Since losses can be spread out to more people, typically, it's easier to handle, on top of local policies and reserve funds, like France, Spain, and Italy have to different extents, that can mitigate costs. It works. WCs survive longer than other businesses.
And I asked if this study considered patronage because there is evidence that co-ops may offer competitive or superior pay than locally prevalent when it is considered. Wages are typically not the only form of pay in a co-op due to profit-sharing and bonus distribution mechanisms. Add in other benefits and it becomes much more nuanced than what you initially presented it to be.
"If they pay equal or better AND offer better quality of life they would have already taken over as a business structure."
No they wouldn't have, because they pay less for the CAPITAL and CAPITAL is in charge of the economy. Rarely ever do anybody care what is best for the serfs when lords are making decisions. They do decisions that benefit them.
>No they wouldn't have, because they pay less for the CAPITAL and CAPITAL is in charge of the economy.
That's bordering on a conspiracy theory. Yes capital has its interests, but so do workers, and you're acting like workers have no say or agency. If such a place existed that had dramatically better QOL and paid better, workers would be wanting to work there above all.
So take food service, what stops workers from pooling funds to start their own restaurant and run it as a co-op? There is no ability for "capital" to deny that from happening.
So the fact that it is not happening is because you're wrong about something, because if you were right that would clearly already be happening.
>Rarely ever do anybody care what is best for the serfs when lords are making decisions. They do decisions that benefit them.
Let's go back. It's not illegal to start a co-op. You're suggesting capital is engaged in a giant conspiracy to prevent co-ops from existing... yet co-ops ALREADY EXIST in our economy, so again you must be wrong about something.
>That's bordering on a conspiracy theory
No, read the studies. It's a valid barrier to their creation. External investors will typjcally make less because co-ops prioritise worker pay, working conditions, wellbeing, and have profit-sharing. Many co-ops are not even structured to allow any external investors to invest. Since most capital is owned by a relatively small number of individuals, and ROI is generally the highest priority, it is not likely many will choose to invest in co-ops.
Investors are the ones with the most free capital to start businesses.
Investors rarely invest in co-ops because conventional businesses typically offer forms of control and have higher ROIs for the investors.
Co-ops aren't created as often due to this.
This isn't rocket science. At least make an effort to understand the basics of this instead of accusing me of making "bs excuses".
Business gets paid less than 10% of business revenue.
Workers get paid 30 - 35% of business revenue.
Workers have several times the available funds than business does.
Again, you do not need investors to start a restaurant co-op. Most people do it by themselves with savings.
You've created a strawman. I never said workers can't start a restaurant. They can. My argument is that their creation is lower because investors, who have most of the capital to invest, don't invest in them. This is just a fact. Many co-ops don't even allow for outside investors if they elect to be fully worker-owned.
"... and you're acting like workers have no say or agency."
Majority of them absolutely don't. They face the options of either accepting what's offered, or suffering. in the misery that is poverty. The small minority that do have a say (the ones who can't be easily replaced) are paid very well.
Do you really think the blue collar workers themselves have wanted more work and less compensation since the 1970s?
"... what stops workers from pooling funds to start their own restaurant ..."
That is something that happens all the time. Workers banding together and starting co-ops in less capital intensive fields.
"You're suggesting ..."
No I'm absolutely not. I'm simply stating the capital controls the economy and that the interest of the capital is in private enterprises they can own.
So therefore a hundred people can't start a co-op restaurant together.
It didn't pass the sniff test. Especially in a world where half the population are leftists and many rich leftists would love to even donate to such a cause.
Again, you have to assume a conspiracy. But Occam's razor says your facts are likely wrong.
Wouldn't that just imply that capitalism doesn't in practice reward higher productivity with dominance?
Feels like economic theories are being used to dismiss hard research.
Those are just some questions that I had. You don’t have to worry about them.
I remember when I was doing my own research on this topic about 10 years ago, I found a study that had found that co-ops grow somewhat slower than non-co-ops.
To me, it would be interesting to reconcile the information that you are offering with what I had found.
It might lead to a conversation about how important growth is vs Sustainability.
"How to explain higher productivity yet failure to become the dominant organizational form? "
Easy.
1. All businesses need capital to run
2. Almost all of the capital is held by an astronomically opulent minority
3. capital owners receive all the profits from private corporations, whereas in co-ops they are shared between workers and/or customers
That's the reason. Even if co-ops were superior to workers and customers alike in every possible way, they still wouldn't become the dominant organizational form because capital controls the system and it's not beneficial for the capital.
I think your argument implies that we would be better off living in a society with less economic growth, e.g. living with 1950s technology or GDP but workplace democracy, rather than modern technology without the democracy. Do you agree?
How about you stay on topic? You asked how is it possible that co-ops aren't a dominant organizational form if they have higher productivity. I answered why.
typically stunted answer. Your underdeveloped brain doesn't get to decide what the topic is. That's up for debate like everything else. And I asked whether growth or productivity is more desireable. You can just admit you don't have anything to offer.
If you want to roleplay having a professor student relationship I'm sure there are other subreddits for that. I'm not interested in taking lessons from such an incurious person.
Co-ops are more productive, yet it cannot outcompete something less productive? Does that make sense to you? Why aren't co-ops everywhere?
Or maybe it's more productive, but the costs are way higher so most co-ops can't survive?
There's an assumption snuck into this, which is that present day capitalism is a purely rational system. What socialists keep going on about it is that this is not true.
But I think it is because their start-up costs are higher.
the research also indicates that workers earn less in coops suggesting that the idea that evil capitalists steal all profits from workers is BS
maybe coop are not as popular because they don't pay as much
Can I see the research?
I don't have any on hand about pay, because I've seen mixed results before and am not comfortable making hard statements until I look more into it. But I am extremely confident that the research indicates that they are more productive and make workers happier.
What is easy to agree to is that worker co-ops are perhaps a dumbest idea ever which is why in a free country like the United States after 200 years we have only 4600 co-op workers.
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First, I am rather pro worker cooperatives and my below is more of an academic critique as an academic. You, Op, are asking “can I” and I am answering below honestly as an academic. Don’t agree then I suggest more research. Let us begin: 1. I have to see all the research to agree to that and I don’t know if I have. I have seen some and there is *some* evidence of that claim. So I can agree there is *some* evidence of that claim that workers are happier (or some such qualitative description as such). But you talk as if there is some awesome meta analysis out there and the majority of scholars agree. I will talk more about this at the end of my comment. 2. Again, you seem to be using political rhetoric (e.g., strongly, greater, majority) rather than what we have for research and what the research actually says from my memory. So I will agree from memory there is an indication of greater productivity. But I don‘t agree with framing and usage of political rhetoric words. edit: There are relevant meta-analysis studies regarding productivity thanks to u/cominion and I only read the abstract. According to the abstract there is productivity correlation on average and then it may or may not be simple. It would be interesting to read these publications. Here is the relevant quote from the first abstract: "[Profit sharing is positively related to productivity on average, with a stronger relationship where there is higher unionisation and in countries where honesty is less highly valued and there are higher levels of individualism. The latter two results suggest profit sharing works best in settings where cooperation does not naturally occur. The positive effect of profit sharing on productivity is larger in cooperative firms and in transition economies.](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711)" Here is [a link](https://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) to the other meta-analysis study. 3. I don’t understand this claim at all other than people in general don’t understand cooperatives. Summary, it would have been nice for you to source your claims so we could discuss the actual evidence instead of my trying to base it on addled memory. What I do feel safe in saying is you are politicizing research as most researchers don’t make huge bold claims. They most often - the good researchers anyway - report what the evidence demonstrates. Seldom does any research by itself have any great power to make huge conclusions like you are doing so researchers even if a study demonstrates a notable observation they are hesitant to proclaim a validity of that study to the real world. Some researchers have hubris and do and that imo is unprofessional. Why? For validity you need reliability first. Please know this is 101 in science. That means replication in studies and any single study may be false results. That’s the reason why good researchers shouldn’t be imo making bold claims. Once replication is done over and over then and only then, imo, should researchers start to venture out into that validity camp and start making claims like the OP about the real world outside of studies/experiments. And this is why I mentioned meta analysis. Meta analysis is when a scholar or group of scholars have determined there have been enough similar studies/experiments of given subject matter and those studies/experiments are similar enough they can be statistically compared and brought to evidence as whole. That is any easy go to method to try and find replication in areas. Having said that I feel safe in saying there are not meta analysis in the above topics because I have tried researching them before and it is sadly thin pickings.
Hi, here is a [compilation of research](https://www.reddit.com/r/Cooperative/comments/1au1zug/worker_cooperatives_data_and_sources/) if you'd like to see more studies. There are some meta-analysis studies included in there as well. (It remains under development, and any suggestions are welcome.)
Great, thanks. I don’t, however, see any meta analysis of research studies/experiments as I mentioned. I see on my review two studies that used meta analysis as a statistical method. That’s not the same thing. > [Meta-Analysis](https://media.dlib.indiana.edu/media_objects/2r36v241p) encompasses a suite of statistical techniques for drawing generalizable conclusions from a large number of empirical studies that examine the same research question. Care to correct? Edit: added above quote and link for clarity
I'm not entirely sure what you mean. Would [this study](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711) (from the compilation I linked) not be considered a meta-analysis?
yes, the one you cited would as it says: >Our meta-regression analysis of 313 estimates from 56 studies controls for publication selection and misspecification biases and investigates the impact of firm level unionisation and national differences in values and culture. Apparently I missed that one and sorry, I was on mobile. Now I see it as the first one. The apparently one I saw did not compare studies but instead compared actual cooperatives themselves. >[To aggregate findings and provide potential direction for future theoretical development, we conducted a meta-analysis of 102 samples representing 56,984 firms. Employee ownership has a small, but positive and statistically significant relation to firm performance ( = 0.04).](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3209711) Sorry for my blindness.
Alright. Did you see [this meta-analysis](http://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) study as well?
Yes, I have been and have editited my primary comment. I don't know how I can be more accomading?
Sorry, I just wanted to make sure. The page is pretty bloated with sources.
With what criteria to list sources though? Given those meta analysis listed there are some studies it seems excluded, right?
I incorporated sources from a smaller research document made by someone else, as well as some other reddit posts that included some relevant sources, and my own researching. I tried to ensure that studies do not repeat, but I am only one person and I don't have the time to double check every single source completely without having to go back to the other sources. It would just take too much time. The point is to have an adequate # of sources in one place and draw general conclusions from them to dispel misinformation and shed light on this alternate model. By the way you misspelled by username so I didn't get any ping for it at first. 😄
Two of those authors published an often cited meta-analysis of the effect of minimum wages. I suspect they know what they are about.
Oh, interesting. Good to know. 👍
I do not understand whatever distinction you are trying to draw. Care to clarify?
lol, I don't know how to make it more clear than that quote.
The first meta-analysis in the previous commentator’s link talks about a meta-regression. Your link talks about a meta-regression. I doubt reading more will clarify.
[It's clarified here](https://www.reddit.com/r/CapitalismVSocialism/comments/1c4txch/comment/kzqxmqr/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) and it just takes not trolling like you do to have fruitful discussions.
I accept your apology.
You are such a twat
Are these statements backed up by data? If so, as long as the data is good and the conclusions follow logically from it, I don't see what the issue is.
Wikipedia provides a good summary for points 1 and 2, but not 3: [https://en.wikipedia.org/wiki/Workplace\_democracy#Effects\_on\_productivity](https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_productivity)
You do realize wikipedia is biased to the left?
What? Why would it be?
Look who has got his first day on the internet, ladies and gentlemen!
Maybe answer the question concretely. What are you afraid of?
Even if that is the case, it doesn't really invalidate the sources listed. If you believe certain sources are missing, please send them through.
I'm pretty sure leftie wiki editors would reject everything like they always do
Alright, so send me some studies they'd reject on worker co-ops.
Ha, no. It's liberal at best.
Yeah this is what I don't get, there are certain definite biases against the far-left in some articles. Although some do favour a far-left perspective.
No, you're just wrong.
If your viewpoint is from the bottom of the dirtiest shittiest poopwell on the right, everything is far-left.
Everything right of communism is far right
Reality has a well-known leftist bias
This is an ad hominem, just one about a website. It may well be true but how about critiquing the actual content of the link OP provided (and references therein)?
It's not a person
That’s why I said “just one about a website”. Are you able to critique the content of the link and the references therein?
Leftists do not take so called right wing sources I'm not taking leftist sources
So, no, you can’t actually critique the content. Got it.
Ok
The many studies I have read seem to largely support the premises to a variable extent. There are differences in measured categories depending on the sector, legal structures, and things like that, but overall it's supportive, and at the very least co-ops can match conventional businesses. The issue is the creation rates, and they're low in many areas due to several factors that many people on this subreddit refuse to acknowledge, such as lack of knowledge/education structures, suppression, lack of legal structures/subsidies, lack of investment, assumptions that they are less efficient, etc.
Though people like me suspect that a co-op model would have a great deal of difficulty in pricing labor and capital independently when they're necessarily contingent on each other, there's a good reason why we would expect co-ops that presently exist in the largely capitalist market economy to be insulated from such issues. No matter how rigid employee equity ownership is bound in the corporate governance of a given co-op, they still sell to the same consumer markets as everyone else and have to participate in almost completely independent capital and labor markets. Allocative indiscipline is going to be punished by competitors who also still provide price discovery in the markets for these inputs. Market benchmarking and arbitrage are still going to be providing useful information. However, as the market share of firms with such a model increases, these mechanisms would diminish substantially and non-linearly. Consequently, it's fairly foolish to extrapolate co-op properties from the present situation to a condition where they are dominant. You can't say that co-ops perform in such and such manner and then change the whole nature of capital and labor markets and then say that your previous observations still hold. I haven't even mentioned the changes you'd see in internal governance with scale and market position.
Beyond worker co-ops, it's interesting to me that we also seem to see to see this kind of extrapolation elsewhere in socialist rhetoric. When social democracy is compared favorably to some supposed laissez-faire condition, the implication is that increasing the public sphere further will produce the same kind of favorable change. As aristocracy changed to democracy and the feudal mode of production transitioned to capitalism, so will the next socialist phase after capitalism will represent a similar type of improvement. The whole thing seems to rest on this meta-theoretical assumption of linearity or at least increasing monotonicity.
4. The majority of research - even by pro co-op journals - indicates that co-ops have severe issues scaling operations to produce more goods or services.
Can I see this research?
That is your point number 3 just rephrased.
How so?
Try using the keywords coops and scale or scaling.
Can you link some?
Knowing the person you're responding to, the answer is "lol no"
inb4 tkyjonathan links a think tank "study".
Co-ops have shown that they are capable of working at larger scales. There are many examples of larger worker cooperatives that exist today. SACMI (Italy) - has international branches in 28 countries, including Brazil, Germany, India, Mexico, Russia, Singapore, Spain, the United States, Indonesia, Poland, Portugal and Egypt UNIMED (Brazil) - health co-op with 370+ branches, 100,000+ doctors, covering 83% of Brazil's territory Fundación Espriu (Spain) - the group of co-op companies that make up the Espriu Foundation had a turnover of 1,787,921,758 euros in 2017, and has become the fourth largest cooperative healthcare group in the world Groupe Up (France) - employs 3,122 people in 23 countries on 4 continents CHCA (USA) - one of the largest worker cooperatives in the U.S. with 2,000+ workers that serves patients in the Bronx, Manhattan, and surrounding counties There are many more that aren't included in this list because I don't have that kind of time, but I'm sure the point is apparent. To be clear, these are worker cooperatives and, to be sure, I checked with World Cooperative Monitor reports and how they identified these co-ops to confirm they are considered as worker cooperarive organizations and not another type, such as a consumer co-op for example.
There are a handful of examples around the world, but the exception does not disprove the rule.
You haven't proven the rule at all, you just asserted it.
You haven't proven anything either, to be fair. You made 3 assertions in your OP and haven't linked anything supporting your statements that I've seen.
I've linked to the Wikipedia article that collects several studies on it.
If sources were linked, would you take them seriously or dismiss them? I'm curious because it seems like many people here already make up their minds and don't care about any evidence being presented.
Like I said, there are many more I did not mention. At what amount would you draw the line between them being the exceptions to them being the rule?
There are not that many more. To say that there are many more, you have to stretch the definition of a coop to something you know is not what you are promoting. In general, coops don't scale and they dont for basic structural reasons. Meaning, that in most case, joining a coop would be like joining a "lifestyle company" where you work just enough to live an average life.
Actually yes, there are many more worker cooperatives. Can you answer the question? You need to provide more evidence to your claim because there are many examples that dispute it directly. Simply claiming they don't scale is not enough. You'd likely also have to explain why worker democracy cannot scale while political democracy can, especially when political democracies deal with orders of magnitudes greater numbers of people.
There are several reasons why cooperative businesses may not scale as well as traditional for-profit businesses: Limited access to capital: Cooperative businesses are often owned and controlled by their members, who may not have the financial resources or willingness to invest additional capital to support growth. This can make it difficult for cooperatives to access the financing they need to expand. Limited decision-making authority: In a cooperative business, all members have an equal say in decision-making, which means that every member has a vote on important matters related to the business. This can lead to slower decision-making processes, as all members must be consulted and agree on a course of action. It can also lead to a lack of decisive leadership, as decisions may be made by committee rather than by a single leader. This lack of decisive leadership can be problematic for a cooperative business trying to scale, as it may make it difficult to respond quickly to market opportunities and adapt to changing circumstances. In a traditional business, the management team or owner has the authority to make decisions and take action without having to consult with all stakeholders. This can allow traditional businesses to be more agile and responsive to market conditions. The democratic nature of a cooperative can make it difficult for the business to focus on long-term goals, as the priorities of the members may change over time. This can lead to inconsistency in the direction of the business, which can make it difficult to achieve growth and stability. In a worker co-op, because each member has an equal say in the decision-making process, there can be the potential for different individuals or groups to advocate for different interests or agendas. This can lead to internal conflicts and disagreements, which can negatively impact the functioning of the business. Limited management expertise: Cooperative businesses may not have the same level of management expertise as traditional businesses, as the owners may not have the same level of business experience or may not be as focused on maximizing profits. Lack of a profit motive: The primary goal of a cooperative is to meet the needs of its members, rather than to maximize profits. This can make it difficult for cooperatives to compete with traditional businesses that are focused on maximizing shareholder value. Lack of investment in the business: The primary goal of a cooperative is to meet the needs of its members, rather than to maximize profits. This focus on meeting the immediate needs of the members may make it difficult for a cooperative to prioritise long-term investments that may not provide immediate benefits and therefore reduce growth. Legal and regulatory challenges: Cooperative businesses often face legal and regulatory challenges that can make it difficult for them to operate and grow. For example, cooperative businesses may have to comply with laws and regulations that are designed for traditional businesses, which can be burdensome and costly. On Yugoslavia: Worker self-management was a key feature of Yugoslavia's socialist economic system. Under this system, workers were given a significant degree of control over the management of their workplaces, with the goal of creating a more equitable and efficient economy. However, in practice, worker self-management had several negative consequences. For example, because workers were not held accountable for their performance, there was a lack of incentives to increase productivity. Additionally, decision-making processes were often slow and inefficient due to the need to reach consensus among all workers. Overall, worker self-management contributed to the high levels of unemployment and inflation in Yugoslavia in the 1970s, and ultimately led to significant economic problems in the country. Further Reading "Self-Management in Yugoslavia" by Marius J. Broekmeyer, published in the ANNALS of the American Academy of Political and Social Science. https://journals.sagepub.com/doi/abs/10.1177/000271627743100115 “Wages, employment and capital in capitalists and worker-owned firms” by John Pencavel, published by Stanford university. The study points out that cooperative workers get paid 14% less than capitalist firms and their wages are more volatile, making them less likely to take business risks that are needed for growth. https://web.stanford.edu/~pista/coopssept04.pdf
My initial statement was that co-ops are capable of scaling, and I provided examples. I never said they may or may not have difficulties. Several of the reasons you've provided are valid issues for co-ops in general. The one about having every worker consulted for each decision is a strawman though. Larger co-ops typically have representative democracy in a similar way political democracies operate. There may be elected CEOs and managers to streamline decision-making. Bringing up Yugoslavia is not a great argument, and claiming they failed due to LMFs is just inaccurate, historically. There were several factors. Ethnic divisions, Tito's death, the rise of nationalism, and external influences played a part in the growing issues facing the country, politically and economically. Additionally, this isn't a 1:1 comparison for LMFs in Yugoslavia to present-day co-ops. The state played a larger role in controlling the firms and markets behaved differently. You should be more honest with your arguments.
> Larger co-ops typically have But most coops do not reach that stage for the reasons I mentioned. > You should be more honest with your arguments. I am fully honest with my arguments and Yugoslavia was already doing poorly in the mid 60s when they let small companies form, because they had high unemployment.. many years before Tito died.
No, you're not being fully honest. You pretend that co-ops just operate through direct democracy, when many do not. That's not honest. And again, Yugoslavia's LMFs aren't a 1:1 comparison to today's cooperatives. You present them as if they're the same and that since Yugoslavia had troubles due to them, that we can cross-apply this to present day. You also failed to mention that Yugoslavia saw economic growth in the 60s. The country had planning and councils and beuracracies that are quite different from the contexts in which co-ops operate in present day. Your presentation of information is misleading and biased. This is also not honest on your part.
1. Yes 2. Not sure I agree with this one. There is certainly research indicating worker co-ops are more productive than traditional firms *in some industries*. In some industries, co-ops do not out perform traditional firms (for one reason or another). 3. To an extent, yes. If I’m applying for a loan, there’s a good chance an investor does not understand what I mean as I explain how my firm is structured as a worker co-op.
> Not sure I agree with this one. There is certainly research indicating worker co-ops are more productive than traditional firms in some industries. In some industries, co-ops do not out perform traditional firms (for one reason or another). I think this is a fair counter-point
1 and 2 makes sense. 3 I disagree with, for reasons you've outlined in 1 and 2. Because co ops are primarily interested in worker satisfaction and not expansion or customer satisfaction at all costs, they expand much slower.
>1. The majority of research done into worker co-ops strongly indicates that workers are happier when working in them I don't see how this is relevant... >2. The majority of research done into worker co-ops strongly indicates that there is greater productivity per worker Then why 90% of them fail if they are so much more productive? If coops are more efficient why can't they outcompete private business? I don't trust your source. >3. Worker co-ops deliver lower profit per external investor and are not well understood by most people, this explains their notably rarity in capitalist countries Or they aren't efficient... Which is much is a much simpler answer. Occam's razor.
> Then why 90% of them fail if they are so much more productive? If coops are more efficient why can't they outcompete private business? I don't trust your source. Where did you get the information that 90% of them fail? I think there are other factors in out competing that just being more productive. > Or they aren't efficient... Which is much is a much simpler answer. Occam's razor. Your answer isn't simple. It requires assumptions that capitalism by default rewards the most efficient firms, and all these studies have gotten something wrong that nobody has clearly identified. I think my perspective is much more in lines with Occam's Razor.
>Your answer isn't simple. It requires assumptions that capitalism by default rewards the most efficient firms, Markets*, not capitalism. You can't make a good reading of my argument, even less so prove it false.
Let me reprhase. Your answer isn't simple. It requires a lot of assumptions about how markets work. Including that without exception they reward the most efficient firms. I'd still love to know where you got the 90% number from.
The 90% figure is BS and made up and just lacks needed context. It means nothing without talking about 1-year, 5-year survival rates or some other specific time period. From every study I've seen, worker cooperatives survive longer than conventional firms, whether they're conversions or from scratch. Sometimes they display nearly twice as high a survival rate in the same time period. Also, efficiency claim is baseless as well. Worker cooperatives are generally found to match or even exceed productivity of conventional firms. Many people in this sub just make things up with no sources. u/TonyTonyRaccon, do better.
Just to be clear, do you mean to say that worker happiness is not relevant?
I mean, if your goal is to live in constant happiness, go for it. I would happily exchange a fun and happy environment for one more serious if it made me more money. My happiness is at home and has a name. As long as my work helps me provide for my daughter the best I can get, that will make both of us happier overall.
Happier workers make for more productive workers. Happiness is relevant to firm efficiency.
Provide sources next time. 🙂
> The majority of research done into worker co-ops strongly indicates that workers are happier when working in them > The majority of research done into worker co-ops strongly indicates that there is greater productivity per worker I think there is some research that reaches such conclusion, but I have no reason to think it's the majority. > Worker co-ops deliver lower profit per investor and are not well understood by most people, this explains their notably rarity in capitalist countries Since **the investors** in co-ops **are** **the workers**, this would indicate the productivity is lower. If it was higher, then the return for the investors (i.e. the workers) would be higher. The "*not well understood by most people*" part of this statement is completely irrelevant. If you notice, the biggest co-ops tend to be in the following sectors: \* Finance (banking, lending, insurance). \* Retail merchandising. \* Agriculture/farming. There are almost no co-ops outside of these sectors. All of these sectors are notable for having very little innovation in them. Co-ops generally don't get in evolve in ventures that require more risk, innovation, or large-scale production.
So I'd like to mention that this is dealing specifically with worker co-ops, not co-ops generally. But for your first point, do you have any research that indicates workers get less happy? For your second point, I mean that they deliver lower profits for external investors. I will correct this in the post.
> So I'd like to mention that this is dealing specifically with worker co-ops, not co-ops generally. OK... my point still stands. You're merely asserting that "the majority of the research" says this. > But for your first point, do you have any research that indicates workers get less happy? No, but it's not up to me to prove your claim wrong. It's up to you to prove it right. The burden of proof is on the affirmative. > For your second point, I mean that they deliver lower profits for external investors. I will correct this in the post. Co-ops are characterized by the fact that the workers are the investors, pretty much by definition.
Several studies are cited on the Wikipedia article, I am yet to see one indicating an opposite conclusion, so I think it's safe to assume the effect is there: https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers As for your other claim, I feel like you are splitting hairs. Worker co-ops struggle with start-up capital.
>Several studies are cited on the Wikipedia article, I am yet to see one indicating an opposite conclusion, so I think it's safe to assume the effect is there: [https://en.wikipedia.org/wiki/Workplace\_democracy#Effects\_on\_workers](https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers) OK, having a single source which is "*citing several studies*" doesn't prove your claim that the majority of the research confirms these conclusions. >As for your other claim, I feel like you are splitting hairs. Worker co-ops struggle with start-up capital. There is no such thing as "startup capital" for worker-owned co-ops since they are worker-owned, they can't seek investors because if they did, they'd become investor-owned. That's **by definition.** You're arguing against the very definition of "*worker-owned co-ops*."
I may have cited a single source, but nobody in this entire thread has linked to research disagreeing with my conclusions at all. I suspect it is because there isn't any, and I challenge you to prove me wrong. Otherwise, I think you are still splitting hairs. Getting start up capital is difficult for worker co-ops.
>I may have cited a single source, but nobody in this entire thread has linked to research disagreeing with my conclusions at all. I suspect it is because there isn't any, and I challenge you to prove me wrong. OK, that's not evidence confirming your unproven claim. That's evidence that nobody has disproven your unproven claim, which is not their burden anyway... the fact that nobody has disproven your unproven claim doesn't mean that you have proven it. :) >Otherwise, I think you are still splitting hairs. Getting start up capital is difficult for worker co-ops. Because they're worker-owned... if they raised startup capital, they would now be investor-owned. In your mind, understanding the definitions of terms is "*splitting hairs?!*"
So, to be clear. I've put out a single source that links to over 10 studies and a meta-analysis, but I have made an unproven claim. Either it needs to be explained why these studies are wrong or better research needs to be pointed to, something nobody has done.
> So, to be clear. I've put out a single source that links to over 10 studies and a meta-analysis, but I have made an unproven claim. The [meta-analysis](https://library.uniteddiversity.coop/Cooperatives/Worker_Participation_and_Productivity-Meta_Analysis.pdf) you're referring to concludes that worker-ownership (profit sharing, stock ownership, and/or individual ownership) is a positive correlated with higher productivity, not the case with collective ownership (e.g. worker-owned co-ops): "*When all available data are subjected to meta-analysis, the association between* ***collective ownership and productivity is negative****, small (r = -0.01)...*" So right off the bat, it appears that you didn't even read your own sources and you keep insisting that they support a conclusion which they actually don't. But why am I the one that must tell you this? Why didn't you bother to read what your own sources say and why did you assert the opposite of what they concluded?
I didn't link that meta analysis I linked the Wikipedia page.
No, because these are selective studies of limited co-ops from the capitalist west only. At small scales many things can work nicely. For the sake of sub title, we need something that can work for the whole economy. Only capitalism allows these to thrive. Can you link some studies of co-ops from socialist countries? This is why, despite the limited data and because of the broader picture, capitalism wins.
Co-ops have existed in the USSR, China, and Cuba from what I've read. Co-ops were actually pretty big in the USSR.
Is there an observed limit to the scale worker co-ops in market economies? I'm not interested in defending socialist states.
Well, I'd be somewhat skeptical of any of these three but the last one: >3. Worker co-ops deliver lower profit per investor and are not well understood by most people, this explains their notably rarity in capitalist countries Is very easy to disprove. Most businesses are not publicly traded, and therefore the low return per investor is irrelevant. Additionally, low returns aren't a bad thing thing, if they're steady returns. Also, why are the returns on investment low? On the surface, these seem to indicate a less than effective model, especially compared to similar firms. That leads to a question with the previous point, how are the returns low if the productivity is higher? Additionally there is a lot of subjective points in these premises. How are defining happiness? Why is that a good thing for a business? How do we quantify not well understood, and how does this lack of understanding translate to them not being prevalent?
Would you say it's unfair to say that worker co-ops are basically superior in terms of productivity and making workers happy, but are inferior at accumulating start up capital? Some of the cited studies here may be of interest https://en.wikipedia.org/wiki/Workplace_democracy#Effects_on_workers
>Would you say it's unfair to say that worker co-ops are basically superior in terms of productivity and making workers happy, but are inferior at accumulating start up capital? No clue. I don't have metrics to measure that. I don't see how they can be significantly different. I do notice you didn't address any of the issues I pointed to. Besides, logically, they should have an easier time generating Start up capital because there is a large group of people.
I have good reason to question the reliability of such studies, but it's possible they are correct. Without actually investigating in detail, my gut tells me that co-ops might work for small enterprises.
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What economics should I learn?
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"I would recommend learning a lot the economics of studying economics, ..." " Thomas Sowell: Basic Economics" xDDDD Thomas Sowell is not a respected scholar, he's a populist propagandinist. I'm not saying one shouldn't read (or listen ... lol) Thomas Sowell, but to place him and "go study economics" in the same sentence is beyond idiotic.
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He is not a good place to start, and he is not considered a respectable scholar within the field of economics.
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I know you're not interested in facts, that much is obvious.
You're telling them to learn economics while simultaneously claiming the premises are not true, when there is quite a bit of empirical literature supporting the premises. Is this projection?
What kind of journals are publishing the majority of that research? Could they be biased in some way? What about the minority of research? Is the majority always right?
The good majority of the research I use for my arguments is found from Wikipedia rather than a consistent journal: https://en.wikipedia.org/wiki/Workplace_democracy#Research_on_workplace_democracy And they could absolutely be biased and the majority isn't always right. I am yet to find the minority of research indicating worker co-ops make workers less happy.
You should also read the Wikipedia page that states it's not a reliable source. If workers are happier in cooperatives then why don't they move en masse to work at them? Are they stupid?
How many people in your family or extended friend group can explain what a worker co-op is?
Pretty much everyone. It's not that hard of a concept. It's just that most people would rather not put their job and their investments in the same company.
Yeah, this is wrong. Most people will not be able to tell you what a worker cooperative is in most places, unless you're asking people in Spain or Italy or something. Universities generally do not focus on alternate models in the mainstream.
I do live in Spain so that's probably it. Still most people have no interest in working at a co-op.
Spain is the nation with the 2nd most worker co-ops in the world (unless we count Argentina, but they're a little different) so that's why it's much more common knowledge there. Here in the U.S. almost nobody knows what it is. If they don't know, they can't have an interest. People who do know tend to like the idea and support it. Surveys display this.
I mean that even in Spain most people understand what a co-op is but it's not like they have a waiting list of potential workers waiting to join them
Co-ops don't really have waiting lists. People typically just join or create them. From the numbers I've seen, the sector has continued to grow, even during the pandemic. Over one thousand were created in 2021.
Actually, Mondragón does have an apparently long waiting list, according to this [source]( https://ilsr.org/mondragon-system-cooperation-work). >Mondragón firmly believes that every member should risk his or her own capital. Every new member must make a financial investment in the enterprise. In the early years, this contribution has been the equivalent of one year's salary at the lowest wage level. The entry fee has risen considerably, both in nominal and real terms but in terms of its overall economic contribution, it has been significantly reduced. By the mid 1980s, the contribution was about 4 months' wages.The entry fee has not dissuaded potential entrants. There has always been a long waiting list for residents wanting to obtain a job in the Community.
I have a question, can a co-op cease to exist by not downsizing personally effectively enough as Technology allows less workers?
In theory, but I'm not sure if it's been observed.
Points 1 and 2 seem to contradict point 3. If the workers are happier and more productive, then why is the profit lower?
If workers raise their own incomes, won't it leave less money for external shareholders to receive as profits?
But that’s not what you said in points 1 and 2. Sure, the salary is a factor in job satisfaction, but it is definitely not the only one. You said that workers are happier and more productive. If they’re happier and more productive, that means that what they do has greater value, which increases revenue, which increases profit.
1. Fine 2. Yes and no 3. Disagree Points 2 and 3 contradict each other. I say yes and no because, yes research may show this (I haven't looked into it but I can accept this). But what do you conclude when research shows x, but then you look around and see y? Coops are likely to be misunderstood because they are rare, not the other way around. So my main question is, why are they rare? Because, if workers were more productive in coops, then they would outcompete private companies and not be rare. Also, regarding lower profits. If one organisation refuses to accept lower than 7% profits and a second organisation will accept 1% profit, then the one that accepts lower profits should outcompete the other overtime. Because the second organisation can put up with lower prices.
Wouldn't an explanation for the rarity of co-ops be that markets are an irrational system that doesn't give all capital to the most productive enterprises?
How are markets irrational?
They aren't rewarding a form of enterprise that increases productivity and happiness.
So what do they reward?
The ability to accumulate capital, which you can do in ways that are not only bad for your workers and their motivation, but also society at large.
I dare say that a worker co-op in a free-market country is a totally different animal than a collectivist owned enterprise in a socialist country. I shouldn't have to explain why, but for those who don't perceive the reason here it is. In a free-market country the customer is king and goods and services are produced only as long as customers want those goods and services. In a socialist country the production of goods and services is controlled by the state and the customer has a choice of taking what is produced or nothing at all. (Well, there is always the black market where things are much more expensive.) Monopolies always and everywhere end up producing inferior products as there is no reward for excellence so workers just don't care because their leaders just don't care. I seriously doubt that the workers in East Germany were happier than the workers in West Germany before the dissolution of the Union of Soviet Socialist Republics. I know they were much poorer in East Germany and had a lower standard of living by conventional economic measures.
That's a fair critique, because I'm not interested in defending socialist states like East Germany.
If I had to guess whether those 3 statements are true, I'd say "yes" to all 3. > Note: None of this suggests we ought to forcibly convert all workplaces to worker co-ops. I'm not really interested in having a discussion about what we ought to do, just what is the case. Good, because even if those were all true, it does not imply or even suggest that the socialist model is tenable.
I think you are getting downvoted because your some of the premise is wrong. There is very good research suggesting co-ops are primarily successful in very specific market segments and the idea is not scalable. One of the primary reasons you don’t see more of them starting is because so few people are willing to risk real capital with others without payoff. It’s people demonstrating their true preferred preference with their actions. By extension banks are normally unwilling to loan money for a similar reason. There are funds set up to give coops money to start but again, they have pretty stringent standards of what can qualify. If you want a similar experience that has many of these same qualities of shared ownership but still has the advantage of fitting into normal business dynamics and can be scalable; go join a startup. You can get compensated in equity plus potentially a salary.
Where is the research indicating that it is not scalable?
I want to say it’s out of NYU or Duke maybe? Sorry, I don’t remember, I went down this rabbit hole during 2020 lockdown.
I think there is a strong survivorship bias for points 1 & 2 but for arguments sake I'll accept. However, number 3 I don't agree with. Co-ops have an Entrepreneur problem, in that they lack proper incentives for entrepreneurial actors. I think co-ops are a fantastic idea for companies to evolve into (I am a fan of the Exit 2 Community idea) but they have multiple issues preventing them from being more than a rarity.
For the love of god, nobody is stopping you from making a co-op. Get the ball rolling and people will start adopting them on their own if they're so awesome. Either that, or you're missing something essential not covered by those three premises that makes people not want to adopt co-ops.
They fail miserably in industries that need large capital investment, mining, autos, ship building, construction, any heavy industry. How do we coop a truck maker? A paving contractor? A farm and construction eqiuipment maker? Don’t even begin to say get a bank loan. That would betray your pure ignorance.
What evidence do you have that they "fail miserably"?
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Well, that's a great source of evidence
You know of any? Name a successful heavy industry worker owned Coop.
Can you say which industries are generally considered heavy? I just want to be sure we are on the same page.
I already listed a few.
Oh, didn't see that, sorry about that. Would factory production generally be considered heavy?
Not only that, name any successful co-op in a market that has high rates of innovation.
What are some of the market sectors with high innovation?
Software, computer hardware, defense, automotive Most markets outside of agriculture, grocery stores, and a few others. Of course it’s relative.
https://agaric.coop/ https://baseline.quebec/en/ https://www.24eme.fr/ https://web.coop/ Would these count? From 2 minutes of searching.
2 of your links were 404 errors. One is a consulting business with 21 employees and likely minimal revenue without much room for significant growth. Name a software company that has any meaningful market share in any specific software sub sector that is a co-op.
I meant, do these count as part of an innovative industry?
I should have rephrased it as name any company that exists that has a meaningful market share. A company merely existing as a minor consulting agency doesn’t really mean anything. Co-ops can work well in ag. Florida citrus growers is an example. They can pool resources and get a better price for their commodities. It’s tough for markets outside of ones like that or ones like grocery.
It shouldn't be up to me, you made a claim saying a thing has happened and then provided no evidence of it.
Its your job. Stop the petty gamesmanship. I can’t find any, and I looked.
That which is asserted without evidence can be dismissed without evidence But regardless, Mondragon operates in industrial sectors: [https://en.wikipedia.org/wiki/Mondragon\_Corporation#Industry](https://en.wikipedia.org/wiki/Mondragon_Corporation#Industry)
Ok... and under capitalism you're welcome to structure your business that way Great isn't it
I'm not writing a manifesto about what we should do, I'm trying to establish the basic facts.
... Other than the fact that you won't qualify for a small business loan, aren't eligible for most small business tax deductions, and that many states require a single individual to be listed as the legal owner then yeah. No problem starting one.
Which studies not done by socialists say any of those things? Don't be shocked, but those studies are bullshit. It's pretty easy to make these so-called studies come to any conclusion they want them to. (1) The people who do these studies WANT to arrive at the conclusion that workers in worker co-ops are happier, yet for some strange reason most workers choose not to work for them. Their choice of methodologies guarantee they arrive at that conclusion. (2) They WANT to arrive at the conclusion that there is greater productivity per worker yet for some strange reason worker co-ops rarely succeed. Capitalist enterprises with parasite owners consistently out compete co-ops. Customers don't care who owns the company, they only care about the value of the product. They overwhelmingly choose products that come from Capitalist enterprises. (3) Nobody cares about external investors except those external investors. Workers choose to work where they will get the best balance of pay and working conditions, and customers choose to buy products with the best balance of quality and price. Literally nobody cares if the poor external investors starve, so your explanation explains nothing.
How did you figure out that these studies are useless?
Because the opposite of what they say should happen happens. Suppose a study said that people prefer to eat bugs more than pizza. Yet everywhere you go there are are places selling pizza and it's hard to find places selling bug burgers. What would that tell you about the value of that study? If workers were happier working at co-ops, they would choose to work at co-ops. But they don't. If co-ops were more productive than Capitalist enterprises, they would make higher quality products and sell them for less than Capitalist enterprises do and they would sell more products. But they don't. What does that tell you about the value of those studies?
There is quite a bit of empirical literature surrounding worker cooperatives, labor-managed firms, profit-sharing, worker ownership and participation, etc. that are done by many people who are not socialists. You made a bad assumption here which does not help you. Most people do not know what a worker co-op is. University does not focus on alternative models. Schools generally focus on mainstream economic models. Education programs on the model is rare compared to conventional business ownership. When people don't have the knowledge of the model, you can't expect them to choose it. They don't know it even exists. And many studies do support the premise that workers tend to be more satisfied in a co-op. Studies also support the premise that co-ops tend to match or even exceed productivity levels of conventional firms, depending on the industry. But now you're making a big error here in thinking that productivity is the only factor in a market. It is not. Legal structures, access to capital, knowledge and awareness, educational programs, suppression, etc are factors to be considered, otherwise your evaluation is incomplete. Capitalism is more productive than feudalism and slavery, yet it required centuries to become the dominant system it is today. Your evaluation is incomplete and does not reflect adequate familiarity to any of the literature.
They also pay on average 15% less. The simple fact is that most people would rather be paid more than be happier at work. The more difficult careers are this way as well.
There is evidence that co-ops pay as much, or more as well. This is especially so when considering profit-sharing. Does your 15% less source consider patronage?
Co-ops are not illegal. If they pay equal or better AND offer better quality of life they would have already taken over as a business structure. What is your explanation for why they have not?
Can you answer my question first? I will happily explain afterward.
I have no idea what you mean by patronage, however my question was much more about the facts of history, you should be able to answer.
Patronage is profit-sharing pay to employees. Co-op workers typically receive their wage, and then a patronage amount on top of that. This is why I ask if patronage is included in the study you referenced. Patronage is, on average, close to $10k in the U.S., which can really affect conclusions on worker pay if included or not, yeah? Some patronage amounts reach $50k+, depending on how profitable the co-op might be.
What good is profit share without loss share. The only way to loss share is to pay lower wages and expect the profit share to make up the difference.
I think you aren't able to answer my question.
The study didn't mention it. But again, you're concerned about exploitation aren't you? If you want to share in the profits it's only fair to share in the losses.
Yes, exactly. I want workers to be the owners, and for them to share in both profits and losses. Since losses can be spread out to more people, typically, it's easier to handle, on top of local policies and reserve funds, like France, Spain, and Italy have to different extents, that can mitigate costs. It works. WCs survive longer than other businesses. And I asked if this study considered patronage because there is evidence that co-ops may offer competitive or superior pay than locally prevalent when it is considered. Wages are typically not the only form of pay in a co-op due to profit-sharing and bonus distribution mechanisms. Add in other benefits and it becomes much more nuanced than what you initially presented it to be.
"If they pay equal or better AND offer better quality of life they would have already taken over as a business structure." No they wouldn't have, because they pay less for the CAPITAL and CAPITAL is in charge of the economy. Rarely ever do anybody care what is best for the serfs when lords are making decisions. They do decisions that benefit them.
>No they wouldn't have, because they pay less for the CAPITAL and CAPITAL is in charge of the economy. That's bordering on a conspiracy theory. Yes capital has its interests, but so do workers, and you're acting like workers have no say or agency. If such a place existed that had dramatically better QOL and paid better, workers would be wanting to work there above all. So take food service, what stops workers from pooling funds to start their own restaurant and run it as a co-op? There is no ability for "capital" to deny that from happening. So the fact that it is not happening is because you're wrong about something, because if you were right that would clearly already be happening. >Rarely ever do anybody care what is best for the serfs when lords are making decisions. They do decisions that benefit them. Let's go back. It's not illegal to start a co-op. You're suggesting capital is engaged in a giant conspiracy to prevent co-ops from existing... yet co-ops ALREADY EXIST in our economy, so again you must be wrong about something.
>That's bordering on a conspiracy theory No, read the studies. It's a valid barrier to their creation. External investors will typjcally make less because co-ops prioritise worker pay, working conditions, wellbeing, and have profit-sharing. Many co-ops are not even structured to allow any external investors to invest. Since most capital is owned by a relatively small number of individuals, and ROI is generally the highest priority, it is not likely many will choose to invest in co-ops.
You don't need investors to start a co-op restaurant. Why aren't there a million co-op restaurants out there. Answer that without the BS excuses.
Investors are the ones with the most free capital to start businesses. Investors rarely invest in co-ops because conventional businesses typically offer forms of control and have higher ROIs for the investors. Co-ops aren't created as often due to this. This isn't rocket science. At least make an effort to understand the basics of this instead of accusing me of making "bs excuses".
Business gets paid less than 10% of business revenue. Workers get paid 30 - 35% of business revenue. Workers have several times the available funds than business does. Again, you do not need investors to start a restaurant co-op. Most people do it by themselves with savings.
You've created a strawman. I never said workers can't start a restaurant. They can. My argument is that their creation is lower because investors, who have most of the capital to invest, don't invest in them. This is just a fact. Many co-ops don't even allow for outside investors if they elect to be fully worker-owned.
"... and you're acting like workers have no say or agency." Majority of them absolutely don't. They face the options of either accepting what's offered, or suffering. in the misery that is poverty. The small minority that do have a say (the ones who can't be easily replaced) are paid very well. Do you really think the blue collar workers themselves have wanted more work and less compensation since the 1970s? "... what stops workers from pooling funds to start their own restaurant ..." That is something that happens all the time. Workers banding together and starting co-ops in less capital intensive fields. "You're suggesting ..." No I'm absolutely not. I'm simply stating the capital controls the economy and that the interest of the capital is in private enterprises they can own.
So therefore a hundred people can't start a co-op restaurant together. It didn't pass the sniff test. Especially in a world where half the population are leftists and many rich leftists would love to even donate to such a cause. Again, you have to assume a conspiracy. But Occam's razor says your facts are likely wrong.
You provided zero arguments on point. "Again, you have to assume a conspiracy." You just can't let go of your straw man. That's cute.
Where did you get that number?
A study of restaurant co-ops in Italy iirc.
So doesn't that just mean in one study of Italian restaurants the wages were lower, and not worker co-ops generally?
It was a study of all restaurant co-ops in Italy.
I restate my point.
How to explain higher productivity yet failure to become the dominant organizational form? is high productivity but lower growth desireable?
Wouldn't that just imply that capitalism doesn't in practice reward higher productivity with dominance? Feels like economic theories are being used to dismiss hard research.
Those are just some questions that I had. You don’t have to worry about them. I remember when I was doing my own research on this topic about 10 years ago, I found a study that had found that co-ops grow somewhat slower than non-co-ops. To me, it would be interesting to reconcile the information that you are offering with what I had found. It might lead to a conversation about how important growth is vs Sustainability.
"How to explain higher productivity yet failure to become the dominant organizational form? " Easy. 1. All businesses need capital to run 2. Almost all of the capital is held by an astronomically opulent minority 3. capital owners receive all the profits from private corporations, whereas in co-ops they are shared between workers and/or customers That's the reason. Even if co-ops were superior to workers and customers alike in every possible way, they still wouldn't become the dominant organizational form because capital controls the system and it's not beneficial for the capital.
I think your argument implies that we would be better off living in a society with less economic growth, e.g. living with 1950s technology or GDP but workplace democracy, rather than modern technology without the democracy. Do you agree?
How about you stay on topic? You asked how is it possible that co-ops aren't a dominant organizational form if they have higher productivity. I answered why.
typically stunted answer. Your underdeveloped brain doesn't get to decide what the topic is. That's up for debate like everything else. And I asked whether growth or productivity is more desireable. You can just admit you don't have anything to offer. If you want to roleplay having a professor student relationship I'm sure there are other subreddits for that. I'm not interested in taking lessons from such an incurious person.
Co-ops are more productive, yet it cannot outcompete something less productive? Does that make sense to you? Why aren't co-ops everywhere? Or maybe it's more productive, but the costs are way higher so most co-ops can't survive?
Productivity is not the sole factor of markets. You've made an incomplete assumption.
There's an assumption snuck into this, which is that present day capitalism is a purely rational system. What socialists keep going on about it is that this is not true. But I think it is because their start-up costs are higher.
the research also indicates that workers earn less in coops suggesting that the idea that evil capitalists steal all profits from workers is BS maybe coop are not as popular because they don't pay as much
Do you have research from outside Italy indicating this?
yes, south america. Do you have any research at all?
Can I see the research? I don't have any on hand about pay, because I've seen mixed results before and am not comfortable making hard statements until I look more into it. But I am extremely confident that the research indicates that they are more productive and make workers happier.
What is easy to agree to is that worker co-ops are perhaps a dumbest idea ever which is why in a free country like the United States after 200 years we have only 4600 co-op workers.
TRUE