I’ve known a few in the U.S., and even worked at one. Maybe people won’t become billionaires doing this, but why wait for a complete overhaul of society to implement more of what are good ideas.
I’d also like to see more childcare co-ops, or community shared pre-k schools. Wheres the movement to build communities and pool resources around these business models in the US? In short, co-ops are the closest socialist/communist business model that’s actually implemented in the U.S., so why are more leftists not doing this?
They tend to get out competed by companies with enough investment funds to undercut them without making a profit until they have a stranglehold on the market and can jack up prices.
They don’t have access to capital (means of production). Consider the following scenario:
All of the employees at a car manufacturing plant are sick of being paid a fraction of the total sale price of the cars they make. They decide, in solidarity, to quit en masse and start a worker co-op car plant instead so that they can all enjoy sharing 100% of the profits themselves.
So they quit. Now what? Well, knowledge isn’t an issue because they already knew how to operate all the machines in a car plant. The problem is that they don’t have the money (or the land) to build a new car plant. We’re talking billions of dollars and a huge piece of land which ideally should be located on a railroad line so that parts (which are very large and heavy) can be delivered affordably by rail.
So where are they gonna get the money? Not from private investors, of course, since that nixes the worker only profit sharing arrangement. Not from banks either because these workers, while highly knowledgeable and motivated, don’t have any collateral to put up for the bank loans. The banks do not want to be in the position of repossessing a bunch of specialized manufacturing equipment and trying to resell it at a loss.
The common response to this is: the government. But think about that. Do you want your government giving billions of dollars to a few hundred people so they can start a car plant and then keep all the profits?
And they’d have to buy parts and materials from the same suppliers feeding the major automakers who have already streamlined their logistics and costs from the smelter to the finished product - and you know they’d exploit those efficiencies and supplier connections to create financial hardship on the upstart automaker. Same way airlines use fare wars to undercut competitors to pressure them out of a market.
There’s nothing the business world hates more than a well treated and well paid workforce. They’ll band together to crush the idea.
And even if you don’t need billions in startup capital for land and buildings and machinery, you’ve still got cash flow concerns.
Say you want to make software, and you know you can make it in 3 years with 20 people. What are you going to use to pay the bills until you’ve finished making whatever it is? Where are you going to find people who will go without money for that time? What if there’s no market for it by the time you’ve done?
Even something very simple like a coffee shop is difficult to run as a co-op.
Yes, if you have a few friends who are all passionate about coffee it’s possible for you all to get loans / mortgages to pool together enough money to buy/lease a small commercial property and open a coffee shop together. The only really significant pieces of equipment are the espresso machine and coffee grinder, both of which can be bought used for a few thousand dollars.
But here comes the issue: suppose it’s you and 4 friends who started the coffee co-op with $200k each (total $1 million) to buy the real estate and all of the furniture and machinery. Now the 5 of you work in the coffee shop and it starts growing more successful so that you need to hire more baristas (or pastry chefs or sandwich artists) to work there. How many baristas can you find who can afford to put up $200k to buy into a share of the co-op?
Or even more fundamentally: what if 2 out of the starting 5 decide that working in a coffee shop is too exhausting and they don’t want to do it anymore so they quit? Now the other 3 need to put together a total of $400k to buy them out? Or do you have a clause in the contract which says they forfeit their investment if they quit? Now I dunno about you, but as much as I love using my espresso machine I would never want to enter a contract like that! I’d much rather keep my $200k in the bank and work as a regular employee barista knowing I could quit any time I want.
Even for software there’s still equipment needed to host it, whether that be your own or rented from AWS or Azure etc. unless you’re looking to sell it as an on prem solution(but that’s not what most customers will be expecting in the current year so probably won’t sell very well). One way around that would be to only rent the hosting as needed once you have a paying customer.
co-ops don’t get loans. It’s hard to start a business without loans.
Loans are also the reason houses are usually so expensive.
Many of these profits aren’t liquid so they can’t turn into money right away
People who would start co-ops are usually decent and don’t care about profits that much. They wouldn’t exploit their workers or other obvious strategies that would put profit more important than wellbeing.
All the companies that don’t care about this have much less costs. Thus the companies that don’t care about morality can offer lower prices than the co-ops, and since most customers care about that more than anything else, the co-ops are driven out of business much more often.
All the companies that don’t care about this have much less costs. Thus the companies that don’t care about morality can offer lower prices
Non sequitur. You forgot that the “cost” of satisfying stockholders is far more than the cost of labor even if wages are doubled.
I think a lot of people don’t know what co-ops are. I have been pretty left leaning my whole life and I only found out co-ops in my late 20s and the majority of people I talked to in real life have no idea what coops are. And from that few that do know, many dont know how big cooperatives can be.
For the uninitiated, I am sharing the [International Cooperative Alliances definition of coops here: https://ica.coop/en/cooperatives/what-is-a-cooperative
and the list of largest coops in 2023 here: https://ica.coop/en/media/library/research-and-reviews-world-cooperative-monitor/world-cooperative-monitor-2023
Screenshot of the top 10 coops based on turnover in USD from the report here:
FWIW, according to this site, 24% of Germans are co-op members. The number of co-op employees is only a fraction of this, however.
I’m currently educating myself on how to create a co-op shares portfolio for some long-term investment.
I actually tried to do this with a bar I owned back in the day. It was exciting / hopeful.
It went into effect January 1st, 2020. January for bars is rough because people do “dry January” so we hoped February and March would be good.
We all know what happened. It didn’t survive. Spent a good year or so continuing to pay wages and healthcare out of my own pocket, but I hit a point where I had to call it (mostly because I ran out of money and couldn’t get any more loans).
I plan to try again in the future, once I have the loans paid off and some padding saved again.
I also dream of a day where somewhat self-sustaining communes become more prevalent. Everyone living together on a shared plot and exchanging goods & services instead of money. Maybe it’s a pipe dream? I don’t know. I feel like it’ll become necessary over the next 4 years though.
This is what I’d want to do (the bar not the commune) if I won the lottery.
So yes I agree with the top post here, it’s lack of access to capital that limits this. Farm cooperatives happen because people own farms. It’s very difficult to grow these from the bottom. You would have to buy your share, with money or work.
We need more co-op businesses and also more entrepreneurship from the bottom and small business grants can help with that. You can’t only yank wealth from the top, they got it from us, we can make more and keep it in our communities.
Hippie 1: Right now we’re proving we don’t need corporations. We don’t need money. This can become a commune where everyone just helps each other.
Hippie 2: Yeah, we’ll have one guy who like, who like, makes bread. A-and one guy who like, l-looks out for other people’s safety.
Kyle: You mean like a baker and a cop?
Hippie 1: No no, can’t you imagine a place where people live together and like, provide services for each other in exchange for their services?
Kyle: Yeah, it’s called a town.
Hippie 1: You kids just haven’t been to college yet. But just you wait, this thing is about to get HUGE.
That’s damn bad timing. Wishing you luck for the next one.
We’ve gotten so far away from that communal living spirit, culturally. Look at the way people get into snits with their neighbors over little things like fence repair or whatever. It’s been a long time since people depended on the folks next door for survival, and we’ve forgotten how to give a shit. It can be relearned, and there are little candles of that spirit burning here and there still. But it ain’t the old days in the farming village anymore.
Everyone living together on a shared plot and exchanging goods & services instead of money.
Can’t imagine looking for an alcoholic shoemaker willing to exchange a pair of shoes for 10 liters of vodka.
The kind of people who would start a business (to enrich themselves) and the kind of people who value co-ops and employee-owned businesses (to enrich others) does not have much overlap. I love the idea of coops, but I do not have the skills or ambition to start any kind of business.
Don’t forget money. Can’t just decide to fart out a co-op.
Human greed is the common point of failure in any of societal systems. In any system … capitalism, socialism, religious, commune, authoritarian … the common thing that holds it together is concentration of power. The problem that it suffers from is … concentration of power.
No matter what group you create, power eventually gets concentrated to smaller groups of people and it only attracts a certain group of individuals who only understand the need to want power and control over everyone and everything to the detriment of everything else.
Once we find a way to build a societal system that is able to distribute power and keep any one or group of people from dominating everyone else, then we might have a chance of developing a sustainable civilization. In the meantime, no matter what you want to call it or do with it, if the end process just concentrates power to a small group of fallible ignorant humans, nothing will ever work.
Do you think it would be viable to make it law for a business to slowly start becoming a coop once the founder had made a fixed amount of money (say, mil.s of dollars) from it?
only if it were global. otherwise those with money would start a business elsewhere.
If I share profits, then how do I, a lowly CEO, keep all of the profits for myself?
I can’t afford it and it’s hard to get people to agree on things, especially where their money is concerned.
They are run out of business, most simply.
The operation that does not focus their profits on building further capital and establishing monopoly will fail in the arms race of those that do.
For example: there are countless community and public efforts establishing childcare and pre-k through pooled resources. They are in direct competition with things like Bezos’ childcare academies. (Personal anecdote: they bought out my kids’ building for public pre-k and evicted them.)
And a successful co-op will get pressure to be bought out like a start-up. (Often starts as a great way to expand! Then the expansion changes the culture, the new location feels corporate and the original location is later shut down and left vacant. -Also personal anecdotes for a grocery co-op and an employee owned operation I once worked at.)
Not every business needs to expand, though. There are quite constrained markets for very specialized goods or services. I know several B2B companies that have 10-20 employees, serve several dozens up to few hundred rather small, regional customers, and they’re perfectly happy with that.
I am sorry, but what does bought out mean? The person running it simply didn’t have to sell. If you’re saying “money was too tempting”, then isn’t that an inherent flaw in any Marxist Leninist theory in practice? So let’s say, the business wasn’t run by someone who cared enough about others and got greedy, so why not start one where you pick the right people? If you can’t do that, then why should any state ever cede over production to workers? How would we ensure greed doesn’t take over then?
In the one example with the grocery co-op: I can assure you, few if any, of the people involved with the co-op were Marxist-Leninists, let alone comfortable with Marxism or the ‘S’ word. So that was kind of a critical flaw in any Marxist-Leninist theory in practice.
A lot of people practice forms of community action without having any sort of class consciousness. A wealthy philanthropist can offer a bunch of money with strings attached and people will jump at the promises without second thought and rarely keep up with the follow-through.
Point I was making nonetheless was these operations tend to exist under seige from competing and profiteering interests. If I remember correctly the grocery co-op was having issues making the skyrocketing rent payments for the commercial lot. That was the problem the money solved: the one created by the landlord.
So in a sense I was saying ‘the pressures of capital tend to be too great’ than money being tempting or greed from the community.
If you’re saying “money was too tempting”, then isn’t that an inherent flaw in any Marxist Leninist theory in practice?
HA, yes, yes it is. Marxist Leninist works most effectively when everyone is moralistic and considers the larger picture. It doesn’t work when you have a world of selfish money grubbers. Notice which system is winning today?
I’d like to see you own a small business and get offered 10x its value by a large corp. Then you can see whether you want to maintain your praxis or retire on a nice beach somewhere the rest of your life.
Marxist Leninist works most effectively when everyone is moralistic and considers the larger picture.
Which is why it can never work
That’s one of the most dangerous myths about marxism and similar ideologies.
It wouldn’t work even if everybody had their best intentions in mind, and did their absolute best to contribute.
Which is why it can never work
That’s right. OP had an amazing moment of self-awareness.
In that model they wouldn’t be able to sell without the workers agreement.
Rei says it’s a coop.
It’s a consumer co-op (barely) not an worker co-op.
a union busting so-called that, at that.
Poor communities already do this to support each other. They watch each other’s kids. They run errands for each other. They don’t keep track and charge cash and create an LLC. But community support is real.
They’re extremely popular in the US, especially in banking (credit unions). I have yet to find any country in Europe or South America with US-style credit unions and it drives me crazy
American banks offering credit card have the highest profit margin of ANY US industry. In most other countries cash is still king. Hence credit unions in those countries need to charge fees and offer worse services. That is true for other banks as well.
If EU “credit unions”:
- Are not nonprofits,
- Everyone with a bank account isn’t an equal member and voter in meetings,
- All members aren’t given the opportunity to present proposals and decide how to spend excess revenue
…then it seems like that’s the problem
Credit unions are a type of cooperative bank. The key is that anybody who opens a bank account becomes a member automatically. That is not the case for other types of cooperative banks.
What you’re describing is not a cooperative.
The definition of a cooperative is where they’re Democratic and decisions are made collectively by all members.
It sounds to me like what you’re describing is a for profit company
Customer and member are not the same thing. A member owns a share of the business and has a vote, with cooperatives having one vote per member. That makes it different to company stock. For consumer cooperative like credit unions, most customers will own a share in the company, but it is not a requirement. For example when you withdraw money from a credit unions ATM, you are a customer of the credit union, but are not necessarily a member. There also are workers cooperatives, where the workers of the company are the members.
Also cooperatives are meant to benefit their members, which makes them different from charities.
I have yet to find any country in Europe or South America with US-style credit unions
Huh? Maybe I don’t know what a US-style credit union is, but the German-language countries have large banking Genossenschaften (cooperatives), often called People’s bank. Many of them have origins in farmers lending each other money.
I don’t know about Fennoscandia, but it would surprise me if there aren’t equivalents, given the cooperationist history in very local economies.
Not sure about others in fennoscandia, but at least Finland has multiple large co-ops. One of the largest banks, OP ( literally named co-op bank) is a co-op which many own a part of. Many of my friends are part of the co-op.
Also, Finland’s largest retail conglomerate (with 48.3 % market share of retail in Finland) is a consumer co-op, which is also causing a very difficult situation for all other businesses in retail, as they’re able to undercut practically everyone since they have less of a profit incentive. 2.4 million people have a membership, which is quite a sizable amount in a country of under 6 million (though I’m not sure if the number includes Estonians as well)
Yeah, I’ve lived in Germany and those are terrible. Most charge monthly fees.
Some waive the fees if you have direct deposit or a minimum balance, but if you loose your job or leave the country for a decade, they’ll fuck their members pretty hard
Credit unions in the US are nonprofit banks that are coops. Everyone who is a member votes on what to do with the excess revenue, which usually gets paid as dividends back to the members (everyone with a bank account) or gets reinvested to cover cool services like ATM refunds (as in, they give you money for fees charged by other banks), free travel/phone insurance, etc.
Its curious that the idea of a credit union was born in Germany but modern German credit unions suck
Yeah, they’re for-profit banks and not everyone is a member who has an account.
They’re also very popular in Denmark.
Do they have monthly fees? If not, I wouldn’t say they exist
Our regular banks in Sweden do have yearly fees, does that count? (No obviously not)
Look into Germany’s co-determination laws for an example of this being required to a certain degree, in every corporation.
