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?
Starting a business requires resources and coordination. It is easier for one individual with many resources to get the ball rolling than for many people with few resources to do the same. Even if you need to take out a loan, it’s simpler to do as an individual than as a group. Most people who front all the resources for a business are going to want creative control over the structure and operation, and consequentially claim to the profit. It’s much easier, logistically, for one person to roll existing capital into a new business than to coordinate a board of founders. Democracies are much slower at making decisions than dictatorships, obviously.
I am 100% pro co-op. I’d love to see credit unions offering start-up loans to groups of founding members, specifically designed to develop co-ops. It’s just currently uncommon, so the infrastructure isn’t there. Without that financial infrastructure, you’re relying in everyone fronting a portion of the start-up funding.
So, in short: it’s more complicated, financially and logistically. I’m all for it, but before we see co-ops carve out a more significant market share, we’ll need to see some chipping away at these barriers to entry.
First of all, most people have no understanding or conceptual of even what the hell you’re talking about. Second of all, setting up, co-ops, etc., is extraordinarily difficult, as is becoming part of one. Most people believe it isn’t worth the effort, regardless of the reality of it.
The government makes the entire concept of a co-op, extremely difficult to exist, mostly because the government favors capitalism and punishes anything that runs against it. And, most notably, if there is anything the government can do to stop helping poor people and or minorities, that is always the first to target. Because people in control of our government are extra extraordinarily shitty.
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.
I can’t afford it and it’s hard to get people to agree on things, especially where their money is concerned.
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?
Starting a business (that is based on a sound and viable business plan that has even a snowball’s chance of surviving its formative early years) is really REALLY hard. It takes massive amounts of money or debt, the early years promise years of having no income for yourself (or paying yourself below minimum wage), it means a staggering amount of hours you need to put in to keep it going, forgoing vacations and important family events, loss of friendships because you’re having to put all your time and energy into the business without socializing, having to work when you’re incredibly ill, incredible amounts of stress (which increases by 10 times when you have employees that now depend on you for their livelihood) and even if you do everything perfect your business can fail leaving you with nothing for the years that you put into it, and potentially also with tens of thousands or millions of dollars in debt. It means many times being force to make decisions that massively affect other people’s lives (your employees or your customers). It can be versions of the Trolley Problem time and time again.
“According to the U.S. Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.” source
So ask yourself if you want to go through all of that, and instead of wealth you can live on and support your family with at the end of it, you get simply a “thank you” for building a co-op.
Yes, I agree, it is very hard. I’ve talked to a lot of founders and was working on getting a company off the ground myself.
The perspective and the idea of a co-op however is completely different from what you describe: to distribute the hardships, the risks and rewards right from the start onto many shoulders. There’s no more “my company, my sacrifices” etc. It’s all we.The perspective and the idea of a co-op however is completely different from what you describe: to distribute the hardships, the risks and rewards right from the start onto many shoulders. There’s no more “my company, my sacrifices” etc. It’s all we.
That sounds great, but how does that translate into real-world scenarios that organizations experience? As an example:
How do co-ops decide who needs to be fired when there isn’t enough money to cover payroll?
These are great points, and looking at some of the other responses I get the sense that it’s a time and skills issue. So, what exactly do communists and socialists imagine will happen when “workers seize the means of production”?
I don’t want to discourage anyone from pursuing these ideas, I think at least in the U.S. it might be cool to have a consultancy or non-profit which helps connect such founders and provides them with education, training and startup resources.
Edit oh and some of the other points are that one wouldn’t get rich doing this. So what? I’ve already seen people look down on wealth accumulation, so I think it’s fair to say that the motives for someone who’d start such a business venture are different, which is valid and reasonable.
Secondly, I don’t think market forces will impact such businesses because if you’re creating communities around them, then people will choose what they know and trust.
These are great points, and looking at some of the other responses I get the sense that it’s a time and skills issue. So, what exactly do communists and socialists imagine will happen when “workers seize the means of production”?
I admit I’m not a scholar in this area, but my college reading of Marx and Engels they were taking about nation-state levels of “seizing the means of production”. As in, the entire nation’s ability to produce goods, grow and transport food, facilitate communications, etc. Doing so on such a grand scale that the elites/bourgeois would be forced to cede control of the levers of power because society effectively halts with the means of production in the hands of the working class (proletariat).
Marx wasn’t talking about a socialist group starting up a competing grocery store to the entrenched established players in that market space.
I don’t want to discourage anyone from pursuing these ideas, I think at least in the U.S. it might be cool to have a consultancy or non-profit which helps connect such founders and provides them with education, training and startup resources.
There are educational resources for starting non-profits organizations (and I’m assuming co-ops). The real resource any org (for-profit or nonprofit) needs to start up is: large amounts of money. In for-profit ventures (assuming your business plan is respectable) you can get bank loans or outside investors. Both of these groups expect a return on the money they’re giving you to get started up.
With a co-op, I’m guessing the only sources of startup capital are: government grants, philanthropic donations, or a founder that already has amassed their own fortune.
Edit oh and some of the other points are that one wouldn’t get rich doing this. So what?
At those really dark times for your business you ask yourself “why the hell am I even doing this?” for most business owners the answer is “so that at some point in the future my life will be much easier”. For a co-op, there has to be a very deeply held belief that what you’re doing is extremely meaningful and your sacrifice will be “worth it” somehow. While those people exist with almost a religious level of obligation to their cause or their community, I think they are extremely rare.
I don’t envy the leadership in a struggling co-op. Running an organization is hard enough at the best times as a single owner. Having to run it by committee when it is crumbling sounds like a painful death.
I’ve already seen people look down on wealth accumulation, so I think it’s fair to say that the motives for someone who’d start such a business venture are different, which is valid and reasonable.
You may already have your answer. In your first post you said: “I’d also like to see more childcare co-ops, or community shared pre-k schools.”
What is stopping you from you creating a child-care co-op?
Secondly, I don’t think market forces will impact such businesses because if you’re creating communities around them, then people will choose what they know and trust.
This is naive. Market forces (and other externalities) can have massive impacts on your organization irrespective if you’re a for-profit or co-op. Just think of what COVID did to many organizations. Though nothing change in the business model or service offering, thousands of companies went under because the conditions of the market changed through no fault of the organization owners/leaders.
I don’t know, it seems the whole argument seems to boil down to “there’s not enough time, money or skill”. I guess my question is why do ML theorists think workers can organize enough to run a state when they can’t organize enough to run a business?
I guess my question is why do ML theorists think workers can organize enough to run a state when they can’t organize enough to run a business?
I’m not a Marxist, but my understanding of the theory is the difference between having all the the resources available to a nation-state to re-organize the state vs having to work with the meager resources provided by the existing state while working side that state’s existing restrictive system.
I don’t know, it seems the whole argument seems to boil down to “there’s not enough time, money or skill”.
“money” - what does money mean after you’ve toppled the state? Do you need money for rent? No. There’s no rule of law that will evict you from your home if you don’t pay your rent. Do you need money for food? No (in the short term). You break open the stores to take what food you need and is needed to feed the populous. The “money” problem can also be for required material resources the specific service you’re trying to set up. If you need something to carry out the will of the new state, you take it from whoever has it (which under Marxism usually means from the ruling elite), so that’s not a problem under this system.
“time” - The nation-state has been toppled. You don’t need to go to your wage job anymore for your life essentials. You’ve got all the time in the day you can dedicate to setting up the new state.
“skill” - If you have the skill to do the job but couldn’t do that job before because it didn’t pay you a living wage, that problem is now gone. The state will provide for your means, and you will do job X which the state needs done. If the state doesn’t have someone with a skill, the state will provide free education to train up citizens who will then be skilled enough to do job X needed by the state.
So none of those are actual problems on paper under Marxist because its generally applied to the nation-state level, not working in micro within an existing oppressive regime.
I say “on paper” because Marxist itself is flawed because it requires humans to act purely altruistically forever, and frankly thats beyond the capacity for humanity. Or said another way, Marxism would work great if there were no humans involved, which defeats the purpose of Marxism.
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Sorry, in retrospect that was entirely too flippant and answer for a pretty good discussion and question. Deleted.
This requires capital to do and the traits that drive having capital in the first place under capitalism also drive making capitalist structures to get more capital. It takes acting against your interests in capitalism to make a co-op.
That said, as a group a bunch of people could invest equally and have a fair amount of capital, especially with access to business loans. The key problem here is accessing finance and legal structures. The structure of an LLC is not really ideal for a co-op as it assumes individual ownership not group ownership. This can be worked through in a few ways but it is always a workaround, just something to make it work in the current system. The ideal would be some sort of shared, maybe creative commons, legal frameworks written up and cross checked by a bunch of lawyers. I think it could be done and very successful, but making that structure would require input from a bunch of people with experience with co-op structures. That said, once it is done they can all benefit for future endeavours and so can anyone else.
The other issue is culture. The USA has a culture of avoiding interdependence and being very individualistic. This is great for atomising workers and preventing unions, so it is encouraged from all capitalist sources including western media such as film and TV but also in things like which books are published and which are passed on. Nobody wants to produce media that will result in their own loss of financial wellbeing or status. Finding a way of shifting the culture is definitely a hard and currently unsolved problem.
Companies don’t do profit-sharing because they have no pressure or incentive to do so. In other words, they can get away with not profit-sharing so they do.
Co-ops are community projects. They arise out a strong, educated and engaged community. This does not exist in the US at large. That’s why about the only place with co-ops in the whole country is NYC.
For the same reasons you haven’t done so yourself. Also if you’re the owner you can still share profits or vote or whatever else you want.
Why should an owner share profits equally if they’re responsible for most of the startup push?
Looks like you’re answering your own question now. I wouldn’t but you can if you want.
Okay fair, sometimes I can lose patience when I feel like I am up against some kind of religious thinking. A lot of good points have been raised in this thread, and I believe in the strength of different ideas coming together to serve a common good, goal for people.
Because the initial startup push is a time-limited effort. Once the company is more established and the risk is lower, why should a founder get to continue reaping outsize rewards off the backs of others’ labor… indefinitely? Surely there comes a point when their initial risk and effort becomes fully repaid and the founder has been made whole.
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.
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.
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.
Don’t forget money. Can’t just decide to fart out a co-op.
Many of these profits aren’t liquid so they can’t turn into money right away
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.
Because he who controls the capital, controls the legal structures of capitalism.
Aka pedons ain’t got no money, boy
This doesn’t make sense, there are people already doing this and making millions, at least.
They make millions because they structured in such a way that working clowns get bare min as for the arrangement to be classified as slavery per se.
It’s a good question OP. I think about this too.
Unknown! Profit share is something I’ve done with my own business and feel like it produces better outcomes for everyone (we measure our impact on customers, employees, owners, the business and community to make sure we are serving all of them). I’m looking into actually granting shares, so it is more real for the employees. Maybe other owners don’t do it because it does require some amount of effort and transparency into company performance. IMO, owners can be really lazy.
There’s lots and lots of low level community support, bartering and exchange. But once a good natured soul tries to organise that into something… taxes!
Can you please cite some examples? What does that even mean?
When people trade their time or skills with each other locally there is mutual benefit and all the value of that trade naturally stays in the community (because it often doesn’t involve cash, and even where it does it’s off the books). Once someone spots these kind of good things (unofficial homework club, meal sharing, unofficial community kitchen etc) and tries to make it a more organised co-op so that more people can be involved, the co-op now has to register all its activities and pay taxes, which has the effect of removing some of the value from the community. If it’s an area seeing underinvestment from local government (as many poorer areas are) then there’s a great risk that’s a net-negative for the community even if the co-op is doing a “good thing”. There’s a critical mass at which the local community receives a net benefit and I wonder if many good ideas ever make it that far.
See: tax treatment of co-ops in the UK. I’m sure there are parallels in the US.
