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Worker co-ops, an idea as old as the Industrial Revolution (and really, civilization itself), have the potential of becoming a major front in the Occupy movement, not to mention the wider global social justice movement. Like most people, I've known about worker co-ops for a while, but it was only recently that I became conscious of their far-reaching implications. For me, this happened during a night out with a friend, enjoying fine food and drink at a fine establishment. It was the kind of night that, some might say, could only have been made possible by our capitalist system. Yet on that night, somewhere between the first and second glass of wine, it occurred to me that no one directly responsible for making my first-rate experience possible - from the waitstaff to the cooks; to the producers, packagers and shippers of the food; to the people who made the tables, chairs and silverware; to those who designed and built the building - made anything close to 7 or even 6 figures.

So what exactly are the implications of this? To start, let's define what a worker co-op is. A worker co-op is, simply put, a business whose ownership and decision making power is shared equally amongst the workers. By "€œworkers,"€ we don'€™t just mean those putting hammer to nail - it also includes those fulfilling administrative, development, or managerial roles. A worker co-op does not, as is often assumed, imply equal pay to all its members. It is entirely possible that workers could collectively decide to enact an incentive structure of some kind, or grant higher salaries to certain positions, which is indeed the case with many worker co-ops. The difference is that in a worker co-op, it is the workers themselves deciding this, rather than a detached CEO halfway across the country. In short, at a worker co-op, the cherished American act of voting isn'€™t relegated to a booth every 2 years, nor does the ideal of freedom take a siesta when one clocks in for work.

Probably the biggest concern defenders of the status quo bring up about the worker co-op concept is the question of incentive. If employees are all seen as equals, without the gross variance of compensation seen in traditional companies, what incentive would one have to do anything but the bare minimum? Humans are greedy, we are told. Thus, we must have an economic system which rewards this greed and allows us to act on this natural impulse. Of course, the justification for this view comes by way of collectivist reasoning. The reason we should accept this system, its proponents argue, is because it will lead to the greatest level of prosperity for the greatest number of people. If it didn't, surely we wouldn'€™t accept it, right?

This opens up all sorts of goodness for us greedy humans. Overworking our employees and paying them inadequate wages for our own gain is not only completely natural, it's morally justified. The more money we make, the more jobs we create, improving the quality of life for everyone. We'€™re capitalists and philanthropists at the same time. As if that weren'€™t enough, further vindication is provided by the free market principle of non-aggression. Technically, no one is holding a gun to anyone'€™s head forcing them to work in a Chinese sweatshop. At its core, employment is an agreement between employer and employee. So as long as the agreement is "voluntary,"€ we can all sleep at night.

Be that as it may, until technology can provide for all our needs through automation, work will never be mandatory. For a low-skilled, uneducated worker, the choice between a dead-end job and a life of destitution is not a choice at all. "Get an education then!" the CEO might retort, perhaps forgetting momentarily that his company'€™s bottom line is in fact dependent on those without one. Fortunately for him, getting an education isn'€™t an option for many of these people, as education, too, is a for-profit venture - plunging those seeking to better themselves into deeper and deeper valleys of debt. In an increasingly uncertain economy, with its rising costs and falling job security, ever more fine-tuned for the benefit of the 1%, the prospect of ever scaling this debt is looking less and less likely, making wage slavery the far more palatable option. If humans really are greedy, and the possibility of becoming a billionaire, however remote, is needed to get each of us out of bed each morning, maybe we should consider refining this impulse. It sure seems like only a few of us are truly thriving in a system driven by this ethos.

The other main worry people have about worker co-ops has to do with incentive's twin brother - innovation. What will spur someone to innovate if the potential for unlimited profits is removed? For a partial answer to that question, one need only re-read the definition of a worker co-op, which will remind us once again that equal pay and an incentive-less internal structure, while common, are not defining characteristics of the worker co-op model. For the full answer, however, let'€™s revisit the example from the first paragraph, where I reflected on the fact that my restaurant experience had been made possible by the hands of those operating without a significant financial incentive. Does this reality hold true for our most vital fields? Say, health care, technology or education?

When it comes to health care, are the ones we truly depend on to meet our needs -€“ not just doctors and nurses, but the pharmaceutical researchers and medical technicians at the forefront of our medical breakthroughs - the ones making massive amounts of money? They might make a handsome paycheck, but the ones really capitalizing in this industry are the medical and insurance company hierarchies, none of which have a direct hand in providing the products and services we regard as our lifeline. What about technology? Is it the CEO of Sony who is responsible for your 60-inch flat screen? Or is it the engineers, designers and assemblers? As for those who educate our children, is it the teachers and college professors who make millions? The historians, scientists and philosophers whose contributions form the basis of their craft? Most likely, it's the Regents, connected government officials, charter shareholders, and for-profit student loan companies who are truly benefiting from our educational system.

But even if we acknowledge the fact that the progress and innovation pushing our world forward is provided by those who would likely make MORE money in a worker co-op system, is it really realistic to think that these people could band together and collectively take on the role of a CEO? That they could essentially "fire the boss," as Avi Lewis would like them to? This is another question that requires deeper examination.

If we accept the premise that the central purpose of any company is to maximize profits, and that the central purpose of our economy is to perpetuate endless growth and expansion, the role of the CEO in this context is indeed vital, and an MBA is nothing to sneeze at. The question, though, isn't whether we need CEOs in our current system. The question is whether the values of our current system reflect the values of everyday Americans, and whether or not those values serve us. Do most Americans really care about limitless growth? Or are their daily concerns based closer to home, typically revolving around things like the well-being of their families and being of some use to their surrounding community? If so, why do we then have an economy where virtually every job is designed with the purpose of maintaining this limitless growth, the benefits of which only go to the minority of people who actually care about such matters?

If a factory like Serious Materials closes down, is it really because it is no longer profitable? Or is it just not profitable enough to sustain the million dollar salaries of those at the top? What if the factory was run by folks whose primary motivation wasn't global expansion or the welfare of their shareholders, but local expansion and the welfare of their employees? What if the factory was run by people who considered making an honest living and providing a valued product or service to be all the incentive they need? How would our society be transformed if we had an economy driven by the values of everyday people, which the truly greedy among us would have to adapt to, as opposed to now - an economy driven by the values of the truly greedy, which everyday people have to adapt to? How would the role of the CEO change in an environment like this?

One of the best things about the worker co-op model and the reason I feel it has so much potential is the fact that it doesn't actually violate any of the cherished free market principles many in this country hold dear. If we are to act on our greed, for example, joining a worker co-op would be far preferable for a low-skilled worker than joining a traditional company, since profits are more equitably distributed. Unlike a McDonald's employee, whose wage is static regardless of how many burgers he flips, an employee at a worker co-op would have a true incentive, as an increase in company profits would almost assuredly translate to an increase in personal profits.

In addition, the realization of an economy in which worker co-ops represent a greater percentage of businesses would not and should not come from any government edict or oppressive regulation. It would come from workers realizing their own power, not agreeing to the terms of employment currently thought of as the only option, and requiring more concessions in exchange for their labor. If the job interview process were to become as much a test for employers as it is for employees, businesses could either adapt, or workers could go their own way. No true free market evangelist should have any issue with this scenario, as workers are simply acting in their own self-interest, and declining the proposed employer-employee agreement.

The transition to a worker co-op economy will be an organic process, and will not come overnight. Granted, some fields will be harder to transform, such as health care and technology. Others, such as food service and manufacturing, will be easier. The best thing we can do at this time is support the worker co-ops already in existence, and do what we can to assist and encourage the formation of new ones. As more of the 99% experience the benefits of a system designed by and for them, and the respect and appreciation for the American worker is returned to its proper place in society, a cultural shift will occur. The thought, long discouraged and overshadowed by that piece of cheese just beyond the edge of another week'€™s toil, will at last become conscious in the minds of many -€“ the notion that freedom isn'€™t just for business people, and that workers, regardless of one's bailiwick, might be entitled to some say in the goings on of the place they spend the majority of their waking hours. The sense that, in the words of Phil Rockstroh, an individual may in fact be more than a job resume on two legs, and that nature may in fact be worth more than what it can be rendered down to as a commodity. The understanding that a vocation need not imply a surrender of one's life force in order to sustain the disastrously narrowed, self-serving agendas that ensure the privileged status of the economic and political elite, and can instead serve as the vehicle for the sustained act of revealing one'€™s innate self.

This post and others appears at Primitive Times, a new media source documenting and reflecting on these primitive times, currently focusing on the Occupy movement.

Originally posted to Primitive Times on Wed Mar 14, 2012 at 03:44 PM PDT.

Also republished by DK Lending and Community Spotlight.

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Comment Preferences

  •  Broken Link (1+ / 0-)
    Recommended by:
    MKSinSA

    Check the second one.

    Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

    by a gilas girl on Wed Mar 14, 2012 at 03:59:24 PM PDT

    •  ah, thanks (1+ / 0-)
      Recommended by:
      MKSinSA

      Primitive Times...A new media source and Occupy think tank.

      by Primitive Times on Wed Mar 14, 2012 at 04:20:45 PM PDT

      [ Parent ]

      •  Primitive Times - ten of thousands of (4+ / 0-)

        businesses are sold in the US every year. What we need is a business model where employees could band to together and compete to buy the businesses.

        "let's talk about that"

        by VClib on Wed Mar 14, 2012 at 11:16:17 PM PDT

        [ Parent ]

        •  that's what's happening (1+ / 0-)
          Recommended by:
          FarWestGirl

          with the Serious Energy workers right now, and it's really the only way worker-co-ops are going to gain ground, because most people who start businesses are still thinking in terms of their own personal profits. So any change will have to come from the workers themselves, and more of them are realizing this.

          Primitive Times...A new media source and Occupy think tank.

          by Primitive Times on Thu Mar 15, 2012 at 03:09:04 PM PDT

          [ Parent ]

          •  PT - Serious Energy is a special class of company (1+ / 0-)
            Recommended by:
            FarWestGirl

            it is failing, at least by traditional standards, and maybe it's a good place to start. In many manufacturing operations a 60 day notice is required to close. It would be good if there was a labor union funded SWAT team who could respond and make a hard nosed determination if the employees could acquire control of the company and the manufacturing facilities. These "failing" companies have a history, customers, and some manufacturing assets and might not require large amounts of outside capital. Something to think about.

            My original thought was regarding successful small and medium sized companies, hundreds of which are sold every week. The challenge is finding the capital to buy the business from the current owners. Maybe union pension funds are a source? It will take something like a dedicated large investor to have any impact in increasing the number of co-op owned businesses.

            "let's talk about that"

            by VClib on Thu Mar 15, 2012 at 04:48:35 PM PDT

            [ Parent ]

  •  When I was a kid (5+ / 0-)

    My single mother had health care through the "Group Health Co-OP" in the Seattle area.

    It was formed by doctors willing to work for straight up salary in exchange for not having to work crazy hours and being able to have some predictability in their lives.

    It's still going strong and is amazingly inexpensive for the service it provides compared to every other medical provider I've seen in my life (I live in California now, but I've seen everything from low income clinics to catholic hospitals to affiliated-care organizations...the latter is pretty good at providing decent doctors but damn, it is expensive)

    My other experience with co-ops is REI - they provide high quality products, good selection, at a price higher than big-box but with durability/usability that is worth it.  Plus good customer service.

    Frankly, I don't know why more companies aren't organized this way.  People who work there seem happier, customers seem happier and they seem to be able to compete pretty well against more traditional alternatives.

    Heck, most credit unions have a hell of a lot more in common with a co-op than a typical bank.  Although the depositor-owned aspect adds an extra wrinkle....they aren't owned by the employees.

    •  We are Group Health (3+ / 0-)
      Recommended by:
      Odysseus, MKSinSA, FarWestGirl

      members. Have been for about 10 years. It is absolutely the best medical care we've had since HMOs became the norm.

      We've also been Credit Union members for 25+ years. Definitely better customer care there, too.

      Keep holding on so long, 'cause there's a chance that we might not be so wrong. We could be down and gone but we hold on...

      by Purple Priestess on Wed Mar 14, 2012 at 07:51:10 PM PDT

      [ Parent ]

    •  Medical "Coops" are essentially a medical group (0+ / 0-)

      unless the nurses, technicians, receptionists, clerks, etc.. are also owners, share in profits and control.  These Medical Groups are not Worker Coops.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Thu Mar 15, 2012 at 09:23:49 AM PDT

      [ Parent ]

    •  I had no idea (0+ / 0-)

      REI was a co-op! I just looked it up, and it doesn't look like they're a worker-owned co-op though. Seems to be more like a membership club like Costco? I'll have to read more about it.

      Primitive Times...A new media source and Occupy think tank.

      by Primitive Times on Thu Mar 15, 2012 at 03:14:45 PM PDT

      [ Parent ]

  •  why arent there more of them? (3+ / 0-)
    Recommended by:
    VClib, nextstep, Sparhawk

    If it were such a great model, we'd expect more of them.

    •  From what I've heard (2+ / 0-)

      Most biz schools and community/NGO based education programs don't teach businesses how to set them up.  It's sort of a temporarily forgotten business model.

      There's also a conflict of interest at times with business incubator programs who don't want to encourage start ups that can't be bought out by private investors.

      Many start ups mistakenly try to use the non-profit business model, which doesn't work as well. The coop system would actually work far better for many of these businesses.

      There's a growing movement in the US to teach start ups how to use the coop model.

      I'm not an expert, but one of my kids is involved in a tech coop, so I've learned a lot from him.

      Here's another helpful link:

      Link

    •  You really do love capitalism (0+ / 0-)

      don't you?

      Do you ever make comments that aren't curmudgeonly?

      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

      by AoT on Thu Mar 15, 2012 at 10:34:22 AM PDT

      [ Parent ]

      •  What makes you think that (0+ / 0-)

        co-operatives are not capitalism?  It's just that the workers are both workers and owners.  

        •  Capitalism is private ownership of the means (0+ / 0-)

          of production.  Certainly, worker run worker owned coops can fit into that system.  My point was more that wurster seemed to think that somehow the prevalence of something in a capitalist system is indicative of its value.  I disagree with that.

          There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

          by AoT on Thu Mar 15, 2012 at 12:05:21 PM PDT

          [ Parent ]

          •  It may not be (0+ / 0-)

            evidence of its value, but it may be evidence of limits inherent in the model.  That isn't a bad thing or a good thing.. its just a thing.  Every model have its strengths and weaknesss.   Co-operatives work beautifully in the right setting, but unfortunately, given the limits on the model, they cannot in many, or even most, circumstances (at least in their purest form).

            •  Or it may be evidence of the limits of (1+ / 0-)
              Recommended by:
              helpImdrowning

              capitalism, which was part of the point of all of this.  Capitalism inhibits these sorts of coops not so much through competition but through initial denial of resources.  If capitalists, meaning those who have capital, can't make a profit on it then there is no incentive to put money in it, which means that coops have to figure out other ways to get started, and that's hard.

              There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

              by AoT on Thu Mar 15, 2012 at 12:47:49 PM PDT

              [ Parent ]

              •  If that's the case then (0+ / 0-)

                the answer isn't co-operatives... its a different economic system.

                •  Perhaps, but that isn't happening any time soon (1+ / 0-)
                  Recommended by:
                  helpImdrowning

                  so cooperatives are a good middle ground.  They allow for collective ownership without being government mandated.  More coops would go a long way toward fixing the income disparity in this country.

                  There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

                  by AoT on Thu Mar 15, 2012 at 01:42:11 PM PDT

                  [ Parent ]

                  •  How (0+ / 0-)

                    They might be a good deal for low-skill workers, but how do you get highly compensated technical specialists to work for your coop?

                    Low-skill workers are easy to find. The core of any company are technical specialists in the company's core business.

                    Those specialists are not going to want to give up either compensation or decision making in favor of people who could never do their job in a million years.

                    It isn't just startup capital, you need technical specialists to even start the business. Why would they want to share the company with unnecessary people, especially people who bring little to the table in terms of either skills or capital?

                    That's the fundamental issue here that prevents coops from getting off the ground.

                    (-5.50,-6.67): Left Libertarian
                    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                    by Sparhawk on Thu Mar 15, 2012 at 01:51:24 PM PDT

                    [ Parent ]

                    •  I am planning on starting a bicycle (1+ / 0-)
                      Recommended by:
                      FarWestGirl

                      cooperative.  Building and fixing bikes.  Sure, there is some difficulty with getting specialists, but they are often the ones who form collectives.  The most successful collectives in the Bay Area, at least that I know of, are a series of bakeries.  There are training programs to learn how to bake.  Sure, if you're talking about Aerospace design or computer ship design then it might be tough, but even then there are a lot of different jobs to be filled to make those things happen, not just engineers.

                      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

                      by AoT on Thu Mar 15, 2012 at 01:55:14 PM PDT

                      [ Parent ]

                      •  When I say 'specialist' (0+ / 0-)

                        I don't necessarily mean engineer. I just mean 'someone skilled in the core competences of the business'.

                        In your bicycle shop, you plan to run it at a profit, do you not? So you make money? How will it help you to give partial ownership to someone who didn't contribute anything to starting the business?

                        Also, collectives of technical specialists are called 'companies'. In these 'collectives', the specialists don't give ownership to non specialists. Why would you?

                        (-5.50,-6.67): Left Libertarian
                        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                        by Sparhawk on Thu Mar 15, 2012 at 02:08:08 PM PDT

                        [ Parent ]

                        •  Because it's a better and more fair way to (0+ / 0-)

                          run a business.  Are you really blind to that?  It helps build a world that I'd like to live in on a model that is just and fair.  If you are so tied to capitalism as an economic structure then I'm not sure why you even want to talk about coops, you oppose them because your interests are best served by the model that a majority of companies use, that's fine.  Don't run around assuming that everyone agrees with you about that though.  I'm perfectly happy to train people on how to build and fix bicycles to expand the collective.  Sure, I could probably make more money if I went the ruthless capitalist route, but I hate that model, a lot.

                          There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

                          by AoT on Thu Mar 15, 2012 at 02:12:52 PM PDT

                          [ Parent ]

                        •  A point of my article (2+ / 0-)
                          Recommended by:
                          Question Authority, AoT

                          was that even the high-skilled people- engineers, scientists, etc.- would be better served in a worker co-op. They are not the ones making crazy amounts of money. It is the CEO making crazy money, and believe it or not, the CEO is far more expendable than the scientist.

                          Another point- It's not necessarily true that everyone will get paid the same, but it's up to the workers to decide. Even if I were a skilled scientist, I'd feel better about having a democratic process decide my pay, rather than a CEO, who I already know is acting purely for his own personal gain.

                          Last point- I patently disagree with your use of the term "unnecessary people." There is no such thing as unnecessary people in a company. Steve Jobs isn't Steve Jobs without all the assembly people putting together his iPhone. They are vital to the company, and all a worker co-op would do is acknowledge that.

                          Primitive Times...A new media source and Occupy think tank.

                          by Primitive Times on Thu Mar 15, 2012 at 03:53:55 PM PDT

                          [ Parent ]

                  •  We agree (2+ / 0-)
                    Recommended by:
                    AoT, FarWestGirl

                    that cooperatives are a good thing - however, collective ownership has always existed at least legally.  As a legal matter, its a straight up business corporation.  So its really not a change in our legal or economic system - its just a recognition that different economic decisions might be made by an entity when equity ownership and worker status are totally aligned.

                    •  You're right, it's not a change (0+ / 0-)

                      in our legal or economic system.  I do think it is a better way to do things and if encouraged and expanded it could challenge the economic system as it exists now.

                      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

                      by AoT on Thu Mar 15, 2012 at 02:22:45 PM PDT

                      [ Parent ]

                      •  Yes, that's the whole point. (1+ / 0-)
                        Recommended by:
                        AoT

                        People are now seeing the limits of a greed based system. Hopefully, when more worker co-ops become the norm, people would see the benefits and it would lead to fundamental changes in our economic system and philosophy. Too many of us assume our system can't be any other way simply because it's all they've ever know. It can be any way we want it, we just have to know what we want first.

                        Primitive Times...A new media source and Occupy think tank.

                        by Primitive Times on Thu Mar 15, 2012 at 04:02:10 PM PDT

                        [ Parent ]

                        •  I want to push on that a little (0+ / 0-)

                          it's still a greed based system... its just a different person's greed.  The whole idea is that the workers are going to make decisions that benefit the business because at the end of the day that means greater salaries and/or profit distributions for the workers.  While one would hope that the nature of the organization would tend toward sustainability or socially responsible corporate action - there is nothing inherent in the system to say that they couldn't collectively make bad decisions (eg dispose of toxic waste poorly) if it meant that it would improve the bottom line.  

                          •  It's only greedy in the sense that (0+ / 0-)

                            improving the welfare of others benefits you as well. If giving to charity makes us feel good, we could call that greedy, but then it's pretty much impossible to not be greedy. Worker co-ops simply recognize that it is in everyone's interest to work together, as opposed to each individual fighting for themselves. So really they are being both greedy and unselfish at the same time.

                            But it's absolutely true that a worker co-op doesn't automatically mean they will make ethical decisions, however, it is much more likely. The company would be accountable to and live in their communities, so they would be affected by whatever actions they take, and of course, it's up to the community at that point to take action if the company is harming them. Also, the simple fact that the company culture would be built around cooperation over competition I think would substantially reduce the likelihood of that type of negligent behavior.

                            Primitive Times...A new media source and Occupy think tank.

                            by Primitive Times on Thu Mar 15, 2012 at 09:22:03 PM PDT

                            [ Parent ]

    •  The reason there aren't more co-ops (1+ / 0-)
      Recommended by:
      Question Authority

      is more cultural than anything else. We live in an individualist society where personal profits and wealth accumulation are seen as the highest aspirations, so the majority of people starting businesses these days do so with those goals in mind. Most people who aren't motivated by obscene amounts of money(which is most of us), simply don't know about worker co-ops.

      So, the only people for whom it would be in their interest to have a worker co-op model are the workers. They have the ability to bring this about, as there are far greater numbers of workers as there are entrepreneurs. The problem is, our economic culture and collective consciousness is dominated by the thinking of those at the top. The workers fear the CEOs and fear losing their jobs, rather than the CEOs fearing the workers. As soon as more workers start to realize that the entire system depends on them, and they start asserting their power, the system will change.

      Primitive Times...A new media source and Occupy think tank.

      by Primitive Times on Thu Mar 15, 2012 at 03:42:54 PM PDT

      [ Parent ]

    •  There are actually quite a lot of them, they're (0+ / 0-)

      just not paid attention to because they work and don't make a big deal out of things. ESOP's & other employee-owned businesses are all over the place. Not sure if United Airlines is still employee-owned, but it was for a while. Amana, the appliances manufacturer, used to be a community owned business before selling out. One of our chain stores here in the NW, Bi-Mart, is now worker owned. And if you want to look at bigger things, look into Spain's Mondragon Corp. Now that's a super model for American workers to aspire to.

      Information is abundant, wisdom is scarce. The Druid

      by FarWestGirl on Thu Mar 15, 2012 at 05:35:03 PM PDT

      [ Parent ]

  •  This is a fact-free opinion but (5+ / 0-)
    Recommended by:
    Odysseus, VClib, TexasTom, AoT, helpImdrowning

    It might have to do with the fact that most companies require a certain amount of capital to get going.

    This is usually cash, but might also include things like specialized skills.

    For example, lets say you want to start a restaurant.   If Dad is the chef, his adult children do the dishes/bus tables/wait on customers and Mom does the books, you just need enough money to rent the place, equip it, provide food, pay the first month of living expenses for the family and advertise.   Plus presumably hire an extra person or two in case any of the family members get sick.

    Any slot you can't fill for "free" needs more startup capital.

    Mom&Pop businesses are started with a nest egg of money plus whatever skills the family provides.  Same goes for most small partnerships that aren't family-based.

    Most other businesses...you either sell a stake in the company (stock) or you borrow money (if you can).

    A lot of these businesses fail, so you need either enough capital to avoid going bankrupt if it fails or you need a bank/investors willing to take the risk.

    My bet is...most workers in a co-op don't have the money to invest in the startup.  Most banks or venture capitalists see it as a more risky model, whether or not that's actually true.   Traditional investors will want traditional ideas of ownership, ie a say proportional to how much money they put in.   Unless the co-op starts giving ownership stock to employees as part of their salary AND that stock is significant compared to the initial startup stock investors, it'll end up as a normal corporation rather than a co-op.

    Capital seems to be the big problem.  It might actually be easier to reorganize an existing corporation as a co-op than start one from scratch.   Similar in concept to a typical buy-out.   Trouble is you have to pay off the shareholders somehow before you can begin.   If the company is essentially worthless in terms of market cap compared to its assets, this might be possible.  Or it might come out of  bankruptcy proceedings.

    That kind of co-op would be an ongoing business that likely would start with an unusually large debt load, but the debt investors would be taking the chance based on past performance.

    •  "...traditional investors (4+ / 0-)
      Recommended by:
      MKSinSA, brae70, AoT, FarWestGirl

      want traditional ideas of ownership".

      That pretty much explains it.  US Business Culture isn't conducive to co-ops.

      Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

      by a gilas girl on Wed Mar 14, 2012 at 07:00:00 PM PDT

      [ Parent ]

    •  Another question is whether it scales. (3+ / 0-)
      Recommended by:
      MKSinSA, nextstep, Sparhawk

      Can this model be used for a Fortune 500 company?  What kinds of issues arise at larger scales?  Social dynamics can be different when "everybody knows everybody".

      -7.75 -4.67

      "Freedom's just another word for nothing left to lose."

      There are no Christians in foxholes.

      by Odysseus on Wed Mar 14, 2012 at 09:15:16 PM PDT

      [ Parent ]

      •  Odysseus - I think greblos had the answer (1+ / 0-)
        Recommended by:
        MKSinSA

        As soon as the capital needs of the co-op exceed the ability of the workers to provide needed funds the outside investors and/or lenders impose a more traditional structure on the organization.

        "let's talk about that"

        by VClib on Wed Mar 14, 2012 at 11:13:58 PM PDT

        [ Parent ]

      •  Co-ops can scale to be mid-sized companies (3+ / 0-)
        Recommended by:
        helpImdrowning, FarWestGirl, Odysseus

        REI is a chain that started in the Pacific Northwest but they've got big stores down where I live in California.  They aren't WalMart but they're not small either.

        I know there are some manufacturing companies organized along the same lines too, so it scales up to at least "we have some factories, warehouses and a way to market our products".

        The thing is, if you have enough capital to get started, and your business model is sound (there is enough demand for growth to happen) the co-op becomes self-funding for growth and doesn't need outside capital.   It grows when it can afford to bring in new employee/owners, and that is baked into the business model.

        (there are some savings to be had by NOT having to deal with the capital markets and being squeezed to show income growth or pay dividends just to make shareholders happy)

        •  There are always times (1+ / 0-)
          Recommended by:
          Odysseus

          in the life of a business ooperation where ongoing capital needs exceed income - usually in terms of replacement of equipment etc.

          At that point, then, the choices are new private capital from employee members, new private capital from outside sources in return for equity (and thus changing the cooperative nature of the entity) or loans.

          The problem with loans, as we've recently seen, is that they can be hard to come by and by and large require current cash flow payments - for the amount we are talking about here, its hard to envision balloon payments at the end of a term.

          While I think a cooperative ownership model has its benefits, I am very doubtful that a "pure" model  (as opposed to some type of hybrid" works in equipment intensive industries or in any industry that might have uneven cash flow or depends on appreciation for an increase in valuation.

          Like anything else, its a tool that works in some circumstances, but not others.

      •  look into Mondargon (2+ / 0-)
        Recommended by:
        Question Authority, FarWestGirl

        http://en.wikipedia.org/...

        it certainly can scale. and with Kickstarter and all the new bottom-up funding/investment things like Kiva... this will be the next big thing.

      •  Check out the Mondragon Corporation (1+ / 0-)
        Recommended by:
        FarWestGirl

        in Spain.  It started out very small in 1956 - and now employs over 80,000 people.  

      •  I would say that (2+ / 0-)
        Recommended by:
        FarWestGirl, Odysseus

        whether or not the co-op model can be used for a Fortune 500 company is not the point. This is a different kind of incentive structure. It isn't motivated by "growth," but simply providing their product/service well enough to provide adequate profits and a high standard of living to their employees. When the incentives change, all the other technical details required for the company to stay afloat change as well.

        Primitive Times...A new media source and Occupy think tank.

        by Primitive Times on Thu Mar 15, 2012 at 04:23:27 PM PDT

        [ Parent ]

      •  Look into Spain's Mondragon Corp. It's BIG. n/t (0+ / 0-)

        Information is abundant, wisdom is scarce. The Druid

        by FarWestGirl on Thu Mar 15, 2012 at 05:37:14 PM PDT

        [ Parent ]

    •  Single restaurants not too profitable (1+ / 0-)
      Recommended by:
      nextstep

      Here are some numbers.  

      An industry survey from restaurantowner.com shows for a median restaurant on its own land:  

      Startup costs are $425,000.00, sales are $950,000 and profits are $52,000.  There are 100 seats.

      In a co-op, that $52,000 is available for wages/shares.  Typically crappy restaurant pay plus 5% or 10% of that $52,000 will not convince people to put their money into a venture, especially if said venture is not a guaranteed success.  

      Let's say that an investor is found so that staff does not have to contribute their own money.  Over the years, they receive shares in the business as part of their pay as the investor is paid off.  What happens to an employee's shares after the employee leaves?   Short of buying him out (with what, pray tell?), you have another outside investor on your hands.

      "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

      by Yamaneko2 on Thu Mar 15, 2012 at 02:03:41 AM PDT

      [ Parent ]

    •  There are equity funders out there (3+ / 0-)

      It's a growing area for investors.  Quite a few grantmaking organizations, too.

      •  It's not "pure" then (0+ / 0-)

        In a pure worker cooperative, only workers are owners.  A grant making organization or an equity investor can't own a stake in a pure worker cooperative -otherwise it ceases to be a worker cooperative by definition.

        In reality, the pure worker cooperative is the extreme end of a continuum of a business organization with some or all of its governance and equity ownership in the hands of workers.  In that regard, then, the real discussion is the value of worker ownership of a business entity.  This could be an ESOP, it could be stock options -it takes many forms.

        To be clear, though, as soon as a non-worker enters into the equity structure, there is a different set of priorities and incentives at work.

  •  You Must Read “America Beyond Capitalism” (5+ / 0-)

    By Gar Alperovitz and also familiarize yourselves with his Democracy Collaborative project established, in 2000.
    http://www.community-wealth.org/...

    His work speaks directly to the power of this form of production and other new forms of community organization geared towards a more equitable and sustainable development model.   These approaches being practiced all over the world hold the power to help fight the status quo and truly transform our society.

    •  thanks for the link (1+ / 0-)
      Recommended by:
      MKSinSA

      the worn-out always-mistaken myth of the "self-made man" needs to disappear without ceremony

      if sense of community were aroused in the american electorate, the "great experiment" could proceed

      •  Tell that to Steve Jobs (0+ / 0-)

        well, he's dead so that would be kinda hard.. but tell all those successful entrepreneurs, like Steve, with a dream that they are a "myth".

        Just because you don't have the vision and drive some of those folks do, you have to change the entire system?

        •  They didn't make themselves. (3+ / 0-)

          Neither Jobs nor any other successful entrepreneur could have become a success without the prior existence of the technological and social infrastructure that provides the context in which they can tweek.

          That is not to denigrate their accomplishments, but simply to put them into context. No self-made man is an island. With apologies to John Donne.

          We cannot win a war crime - Dancewater, July 27, 2008

          by unclejohn on Thu Mar 15, 2012 at 07:27:07 AM PDT

          [ Parent ]

          •  meh.. that is available to most everyone.. (1+ / 0-)
            Recommended by:
            Sparhawk

            some take advantage of it, some don't.

            But some of the most successful entrepreneurs used social programs hardly at all.

            Let's take Steve Jobs again, for instance.  He dropped out of college after one semester.  Even before that, he was a self-starter who was interested in electronics and begged for parts from Hewlett Packard for a school project, which got him a summer job offer.

            Steve Jobs: From college dropout to tech visionary

            While at HP, Jobs befriended Steve Wozniak, who impressed him with his skill at assembling electronic components. The two joined a Silicon Valley computer hobbyists club, and Jobs soon teamed with Wozniak and two other men to launch Apple Computer Inc.

            It's now the stuff of Silicon Valley lore: Jobs and Wozniak built their first commercial product, the Apple 1, in the garage of Jobs' parents in 1976 (the same year Microsoft began developing software). Jobs sold his Volkswagen van to help finance the venture. The primitive computer, priced at $666.66, had no keyboard or display, and customers had to assemble it themselves.

            Yes.. everything he touched or that touched him had some component that was government funded along the way.  But let's not romanticize government's role in everything.  We could romanticize war if you like, since that is one of the most prolific mothers of invention throughout history.

            There are truly gifted people that have a burning desire for knowledge and to succeed.  Let's not stifle that.

            •  Some start with more (2+ / 0-)
              Recommended by:
              unclejohn, isabelle hayes

              Jobs didn't come from nothing, he came from at least a middle class life style and a college education, even if not completed, that was likely heavily subsidized.  The best way to stifle those people is to expect them to do great without any support, which is exactly what the myth of the self made man leads us to.

              There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

              by AoT on Thu Mar 15, 2012 at 10:40:03 AM PDT

              [ Parent ]

            •  Let's include in the social/technological (1+ / 0-)
              Recommended by:
              isabelle hayes

              infrastructure such contributions as wide-spread electrification, a reliable, inexpensive transportation system, the invention of semiconductors, a literate, compute-hungry population. Are you beginning to see the picture?

              Without any one of these prerequsites and far too many others to name, Jobs, or any other entrepreneur would be hard pressed to shine. Entrepreneurs may be exceptional people in some contexts, but they are never self-made.

              We cannot win a war crime - Dancewater, July 27, 2008

              by unclejohn on Thu Mar 15, 2012 at 12:03:20 PM PDT

              [ Parent ]

            •  Jerry, when I was writing this piece, (2+ / 0-)
              Recommended by:
              unclejohn, isabelle hayes

              I knew the question of Steve Jobs would be brought up. I plan to write more extensively on this soon, but I'll give you the short version.

              1- As it has been said here already, Jobs was not a self-made man in any respect. He was dependent on his educators, family, etc., and when he built Apple, he was dependent on his employees. No one gets to the top of the mountain alone.

              2- The majority of the true innovators in history- Einstein, Edison, Tesla, etc. etc., were not motivated by money. Jobs is a seeming exception to that as someone who appeared to be motivated by both innovation AND money.

              3- I would actually question the notion that he was motivated by money. Say we had an economic system that was entirely dominated by worker co-ops. What would Jobs have done? Would he have just sat on his hands and watched TV for his whole life? I don't think so. He still would have contributed his gifts to the world, because that's the whole point of life, and he knew that. I guarantee his biggest source of satisfaction and motivation came not from his billions of dollars, but from his contribution to society and history. Similarly, the respect people have for him has nothing to do with how much money he made, and everything to do wtih his brilliance and innovation.

              Primitive Times...A new media source and Occupy think tank.

              by Primitive Times on Thu Mar 15, 2012 at 04:52:09 PM PDT

              [ Parent ]

              •  Hmmm.. Let me say this.. (1+ / 0-)
                Recommended by:
                Support Civil Liberty

                I'm not here spouting against co-ops as a viable model for some industries.  It's just fine.  I could care less how a company is organized when I buy its products.

                However, that also means I will not support a co-op made product over a corporately made product if the co-op product is inferior in quality or price.  And, I think I represent most consumers on this.

                So, that said, it is hard for me to conceive of a society where folks like Steve Jobs, etc. would fit in and thrive if "we had an economic system that was entirely dominated by worker co-ops".

                Co-ops are fine for tried-and-true services and industries.  But how do they fit with the speculative start-up?  Venture capitalists are often needed for start-ups, and often they have to come up to speed very quickly to promote cutting-edge ideas.  Where are the venture capitalists in the co-op model?  A VC often demands a large stake in the company in exchange for the risk they are taking in the initial investment.  And don't even suggest you think you could get thousands of workers in other industries to quit their safe co-op jobs and come over and work for, and invest their savings in,  a risky company that may be out of work in a year.  Nope.. it just wouldn't work.

                So, a society with mixed models - co-op, corporate, publicly owned - still seems the best model to me.  A co-op only model stifles creativity and invention.

                •  There is no reason why Steve Jobs couldn't thrive (0+ / 0-)

                  in a worker co-op economy. There’s nothing about a worker co-op that stifles innovation. It actually encourages it, because it recognizes the true value of everyone. Steve Jobs was a genius, no doubt. It would be in the co-ops interest to allow his genius to flourish. At the same time, I’ll bet the people assembling Apple products in the Chinese factories have some talents as well, but they aren’t being utilized, because they are seen and treated as cogs in a machine.

                  The point about innovations is that it’s supposed to improve our lives. But, if that innovation comes at the cost of exploiting others, then we have to reconsider if the purpose is being defeated or not. If Steve Jobs wants to innovate, please do, but there’s nothing wrong with having a system that ensures people aren’t taken advantage of in the process. If we had had a system like this in place for the last 100 years, no one would question it, just like most of us don’t question capitalism today. Innovation would be encouraged and celebrated. The only difference is that it would be a more enlightened innovation, because it really would have the purpose of contributing to the world, with the recognition that that is also how you get personal satisfaction. Innovation with the sole motive of personal gain results in exploitation. Of course, people are free to pursue their own personal gain, but that also includes non-entrepreneurs. If workers decide to stand up and demand a seat at the table, that is their right as well.

                  But I don’t think we have any real disagreement here. The way worker co-ops will become a bigger part of our economic system is simply little by little. As more co-ops appear, they will begin to affect people’s consciousness and we will start to think about business and the economy in an entirely different way. This will take awhile, and no one will have any opposition to it, because the only way it will come about is from the people. It certainly won’t and shouldn’t be imposed by government. People will simply be deciding for themselves that it is in their interest to work in cooperation rather than constant competition, and the system will have to adapt.

                  Primitive Times...A new media source and Occupy think tank.

                  by Primitive Times on Fri Mar 16, 2012 at 03:02:37 PM PDT

                  [ Parent ]

        •  Wow! What a snotty comment. (1+ / 0-)
          Recommended by:
          isabelle hayes

          Just because people want to explore other forms of business models doesn't automatically translate to not having "the vision and drive some of those folks do".  On the contrary, it shows vision in another direction.  Just because someone advocates a business model where no one is going to become enormously wealthy, but many enjoy employment, a living income, and job satisfaction, does not mean they envision the destruction of capitalism, nor does it suggest a lack of creativity or drive to succeed.  It certainly doesn't mean they are advocating changing the entire system.  Your attitude is interesting and suggests you have ingrained ideas that are part of the problem, not part of the solution.  Additionally, your comment was sort of a hit and run.  I wish you well.

          "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

          by helpImdrowning on Thu Mar 15, 2012 at 02:12:12 PM PDT

          [ Parent ]

    •  This idea of a "status quo" is a myth (1+ / 0-)
      Recommended by:
      Sparhawk

      You are free to do whatever you like in this country.  Set up a co-op.  Get everyone in your geographical area to sign on to only buying from your co-ops.

      The problem with that is that it takes a lot of work. And some people might like the freedom of buying their goods outside the co-op system.

      So, the solution, of course, is always the government should step in and force a particular model.  It has never worked, and never will.

      •  "Status quo" is a myth? (1+ / 0-)
        Recommended by:
        helpImdrowning

        The idea that the Status quo is a myth is out of set with what has happen in this country since 2008. The Status quo refers to the current state of affairs in a given society. Monopoly crony capitalism, is the current state of affairs. It is that, which we are trying to change, no one mentioned anything about a government base solution. A co-op system has nothing to do with the government. The only thing it changes is the ownership structure of the enterprise not how you buy the products produced. The idea is that by having more companies owned and operated by the people who actually work in them, you will have companies that are tied to the community since those that work in them also live in the community. The benefit of this is that worker-owned firms do not have the same incentives to get up and leave a community for cheaper labor elsewhere as the traditional hierarchical corporation, which is always looking for higher and higher profits. What you will find when you look into firms that shut down and move to China, is that they were profitable that is rarely ever been their problem. The problem is that they were not profitable enough for upper management.

        •  That's all fine and dandy.. (0+ / 0-)

          And I understand all the benefits and fully agree with the concept.

          But..  How do you do that without governmental intervention?

          As I already said above, there are tens of thousands of successful co-ops already hard at work in this country producing a variety of goods and services.

          It seems to me if co-ops were able to compete, there would already be a lot more of them.

  •  There is no reason co-ops cannot co-exist (2+ / 0-)
    Recommended by:
    nextstep, FarWestGirl

    with other forms of businesses.

    In fact, tens of thousands of businesses in the USA are co-ops.

    Why does everyone who is a proponent of co-ops insist we need to move to a co-op only model?

    Co-ops are fine for some folks.  Others would prefer striking our on their own as an entrepreneur.  Both can co-exist quite nicely in a free market system.  And each model can suit each worker's desire for the type of work environment they wish.

    •  I agree, But (2+ / 0-)
      Recommended by:
      helpImdrowning, FarWestGirl

      I am in no way saying that co-ops should be the only model. You also have more traditional employee stock ownership plans (ESOPs), for example. I am not saying we need to outlaw traditional corporate structures. However, the idea is to open up the playing field for more democratic forms of ownership of capital to exist and give people more choices.  And I have to disagree about why co-ops have not caught on more than they have. Education is a huge part of the process. Knowing how to set one up is not that readily available, well at least people don’t think it is. It is not as if the mainstream media is going to advertize a viable alternative to the corporate masters that pay their salaries.  

      The co-op movement has only recently, over the last 2 decades, started to really grow in popularity, as more and more economically devastated places such as Detroit and Cleveland started looking for alternatives to a more sustainable re-development of their communities.  The main idea is that our economics should be as democratic as our politics and God knows our politics can stand to be more democratic. I think what people are starting to understand is that it is not enough to be just involved in the political aspects of their communities, but it is just as important to be involved in the economics as well, the two go hand in hand.

      •  At the end of the day... (0+ / 0-)

        ...the coops need to be economically competitive with other organizations.

        The fact that these cooperatives are showing up in economically devastated areas is not a good sign for their viability, because they will always be competing with other regions that are economic powerhouses.

        A business model that emerges out of desperation and futility composed principally of people who do not have other options does not exactly inspire confidence.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Thu Mar 15, 2012 at 09:52:00 AM PDT

        [ Parent ]

      •  I think that there is a confusion (1+ / 0-)
        Recommended by:
        FarWestGirl

        in most cases, as a legal matter, a co-operative IS a traditional business corporation under U.S. state law.  Some, but not all, states have added bells and whistles to make it a "cooperative" but in reality, its usually just a regular old business corporation with limits on who can own equity and more liberal governance rules.   In some cases, it can qualify for special tax treatment under Subchapter K of the Internal Revenue Code.

        What is really at play is that the incentives that workers and owners have come into alignment when they are alll the same people.  That's an economic and social issue, but its not a legal one.  

      •  Very good thoughts, Thirdworldrising. (0+ / 0-)

        Jerry J- The great thing about worker co-ops, is that if we do someday move to a worker co-op only system, it will only be because the people themselves are deciding it. If that's the case, I have no problem with a co-op only model.

        If entrepreneurs want to strike out on their own, great, but they'll be dependent on others to realize their dreams. But if the realization of their dreams depends on exploitation, it's incumbent upon workers to reject that arrangement and go their own way. The whole point of the system is that it's supposed to work for everyone.

        Primitive Times...A new media source and Occupy think tank.

        by Primitive Times on Thu Mar 15, 2012 at 05:17:43 PM PDT

        [ Parent ]

  •  Re (1+ / 0-)
    Recommended by:
    nextstep
    If we are to act on our greed, for example, joining a worker co-op would be far preferable for a low-skilled worker than joining a traditional company, since profits are more equitably distributed. Unlike a McDonald's employee, whose wage is static regardless of how many burgers he flips, an employee at a worker co-op would have a true incentive, as an increase in company profits would almost assuredly translate to an increase in personal profits.

    It probably would not make sense for a high skill worker, though, and those are the people you really need for a modern business to be successful.

    A worker owned business where engineers or scientists take a pay cut so janitors or clerks can make more will not stay in business long because the technical people will go work somewhere else where they are paid more.

    Additionally, how do you start a worker coop business? Someone needs to have the skill set to do that, and whoever it is has no incentive to, say, cut the janitor in on the microprocessor business they are starting. Why would they when they can just get a janitor anywhere?

    To prove that the worker coop concept is viable, one needs to suggest a plausible narrative by which such a business starts up and rises to profitability in a world dominated by the traditional corporation. Who has the original idea? How is it financed? How do you handle new hires? How do you lay people off in a company where everyone owns it? And why would the high skill talent necessary to start such an endeavor do it when they don't really need to?

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Thu Mar 15, 2012 at 07:06:12 AM PDT

    •  I replied to a lot of this in a previous comment, (0+ / 0-)

      but regarding starting up the co-op- It would be no different than a regular business, it would just begin with fundamentally different incentives. This does happen, and will happen more, as more and more people realize that there are, in fact, other incentives besides financial.

      Also, at this point, I think the majority of worker co-ops will come about from workers of already established businesses. They will decide to demand better pay, working conditions, decision making, etc., and the owners will decide to either fire them all, or meet their demands. If they get fired, they can go their own way and start a worker co-op.

      Things like hiring and firing, like every other decision, is decided democratically. Trust me, this is no different than any other business. If you aren't holding up your end of the bargain, you'll be gone.

      Primitive Times...A new media source and Occupy think tank.

      by Primitive Times on Thu Mar 15, 2012 at 05:31:17 PM PDT

      [ Parent ]

  •  Making the Case for Worker Coops (3+ / 0-)
    Recommended by:
    Sparhawk, helpImdrowning, FarWestGirl

    should include notable successes to show that these can actually work or in what situations they can work.  The absence of examples suggests to many readers that these don't work in the real world.

    There is a long successful history where people of special skill build companies and share ownership with those of special skills - these include high tech startups, law firms, accounting firms, medical groups, investment bankers, private equity firms, etc..  Many of those in the S&P 500 started this way.

    What distinguishes worker coops is expanding significant ownership and control beyond just those with special critical skills to those of ordinary skills or limited skills.

    I can see how a worker coop can work in a simple business like a cab company, as highly and specially skilled people are not required, getting this to work where specially skilled people are required will be difficult to make work as they will be asked to give up the significant value of their special skills.

    Consider a person such as film maker Michael Moore.  While in interviews, books and movies he advocates for the average person, greater pay equality, etc. -- however when the opportunity to put these principles in practice come up he let's the opportunity pass.  Does anyone expect Michael Moore to adopt the principle that he will re-distribute his compensation to others on the film project so that he does not make more than 10 times the lowest paid person (on an hourly basis).?

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Thu Mar 15, 2012 at 09:15:43 AM PDT

    •  May I suggest a Very Large Example (2+ / 0-)
      Recommended by:
      nextstep, FarWestGirl

      The firm is called Mondragon. http://www.mondragon-corporation.com/... The worlds largest co-op owned firm out of Spain of +80,000. They have recently been in contact with the big Union organizations here in the US, who are looking at their worker own model as way to start fighting back against corporate power here in the US. There are major things happening out there that is just not widely known at this time.

      •  An interesting example, good link (1+ / 0-)
        Recommended by:
        FarWestGirl

        Not fully a Coop as diary discusses, less than 1/3 of Mondragon employees are Coop members.  From the link http://www.mondragon-corporation.com/...

        only somewhat less than a third of the Corporation’s workers are cooperative members at present. The non-members mainly work in the distribution sector outside the Basque Country and at the industrial plants that are also based outside the Basque Country, either in other parts of Spain or abroad.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Thu Mar 15, 2012 at 10:54:09 AM PDT

        [ Parent ]

        •  Distribution of Capital Ownership (0+ / 0-)

          Is the key point behind the co-op argument. I am aware of the overall structure of Mondragon. However, its ownership structure roots it a bit more firmly to the people in the Basque Country than a normal corporate structure would. The idea here for me, is to imagine what Walmart might behave like as a corporate citizen if a similar percentage of it was owned by those that work there.

          For me it is not just arguing for co-ops its about democratizing capital ownership in what ever way we can to whatever degree we can, if we are ever to regain some level of equity in our society.

    •  There are plenty of worker co-ops (0+ / 0-)

      and worker co-op organizations, just google "list of worker co-ops" and I'm sure you'll find plenty. Arizmendi is a worker co-op bakery chain around here that does very well. Obviously, they're the minority, because our system doesn't encourage them and most don't even know what one is.

      And yes, it will be harder to have them in more technical fields, but the reason for this has more to do with patent/copyright laws that would forbid workers from producing certain products, not about a disparity in pay for skilled technicians, etc. I've spoken about this in the article and in my other comments, so I'll just say quickly- Skilled workers would likely make MORE in a worker co-op, because the bulk of the profits are no longer going to billionaire CEOs.

      Primitive Times...A new media source and Occupy think tank.

      by Primitive Times on Thu Mar 15, 2012 at 05:45:29 PM PDT

      [ Parent ]

  •  Perhaps "CO-OP Banks" are a necessary ingredient (2+ / 0-)
    Recommended by:
    Words In Action, FarWestGirl

    to the spread of Co-Ops; any business needs to be able to borrow, and you need a sympathetic bank.
    Here in Berkeley where I work, there are 4 long-time co-ops that I know of: the Cheese Board, the Juice Bar Collective, the Missing Link bicycle shop, and longest lived, the University Students' Cooperative Association (dorm-equivalents dating back to WWII) . All at least 40 years old, all ravingly successful. Not all co-ops that started at that time have done so well! But these are shining lights in their respective areas.

    Berkeley also had food co-ops. At one time the Shattuck Ave. co-op (now an Andronico's), had the highest revenue per square yard in the U.S. for grocery outlets. Apparent mismanagement doomed these co-ops, and perhaps the 70's were a bad time for idealists in general. There was a history of Finnish co-op activists in Berkeley who had something to do with the food co-op and I don't know much about that "ancient history".

    •  Don't forget Arizmendi bakeries (1+ / 0-)
      Recommended by:
      FarWestGirl

      They are growing in number.  The one on San Pablo actually ran the starbucks next door out of business.  That's a victory.

      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

      by AoT on Thu Mar 15, 2012 at 05:12:57 PM PDT

      [ Parent ]

  •  I thought this was beautifully written (2+ / 0-)
    Recommended by:
    Words In Action, FarWestGirl

    and put forward some interesting ideas, thank you.

    "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

    by helpImdrowning on Thu Mar 15, 2012 at 02:16:41 PM PDT

  •  How are worker co-ops different from guilds? (0+ / 0-)

    Guilds had positive effects for their members, but negative effects for others (even others in their field).

    •  Guilds are closer to unions (1+ / 0-)
      Recommended by:
      FarWestGirl

      They were collectives of skilled workers that had exclusive rights to doing specific jobs.  Having a worker coop doesn't mean others can't do the same thing.  You can have a bunch of different worker coop bakeries for example.

      There revolution will not be televised. But it will be blogged, a lot. Probably more so than is necessary.

      by AoT on Thu Mar 15, 2012 at 05:11:41 PM PDT

      [ Parent ]

  •  I was surprised to find many of the comments (2+ / 0-)
    Recommended by:
    AoT, Words In Action

    here were not reflective of Democratic principals at all, but were very Republican in nature.  Attacking the idea that supports more folks enjoying a piece of the pie.  Greed, it seems, is alive and well.

    "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

    by helpImdrowning on Thu Mar 15, 2012 at 02:43:38 PM PDT

    •  In what way? (0+ / 0-)

      I co-op model is no less "capitalist" then a non-coop model.  It's all private ownership of means of production.  As I indicate above, nothing inherent in the model ensures social corporate responsibility, only a responsiveness to a new set of incentives, which may be based on worker desire to maximize return.

      I am troubled because it throws around labels as epithets and makes no effort to detail which "Democratic principal" exactly is no being reflected by which "Republican" e.g. Greedy one is.  

      •  It's not capitalist, because ownership transfers (1+ / 0-)
        Recommended by:
        joe wobblie

        Only the workers can own a co-op business.

        As for irresponsibility only being a capitalist thing- says who?  Lots of non-capitalist systems have been huge polluters, etc.  But worker cooperatives should tend to be less of jerks, because they decisions are being made by people that actually live in the community.  They'd be personally affected and they would face the shame of their neighbors.

        •  The definition of capitalism (0+ / 0-)

          requires private ownership of the means of production.  The company is still in private hands - the workers.  So its still capitalism.  

          As to the community issue - that might be true, it might not.  However, it does seem to put an upper cap on the ability to grow.  The larger and more diffuse the geographical impact, the lower the "shame" factor becomes in decision making.

          •  That's no definition of capitalism I've ever heard (1+ / 0-)
            Recommended by:
            joe wobblie

            Anarcho-Syndicalism also puts ownership of the means of production in the hands of the workers, but it's hardly capitalist, for example.

          •  Elaine, you are befuddled... (1+ / 0-)
            Recommended by:
            helpImdrowning

            Capitolism is a system of private ownership of the means of production in a market-economy, where labor itself is a commodity, and ownership is in
            the fat, pudgy hands of the capialist.
            The purpose of capitalism is to amass wealth (money).
            The higher market price of the commodity produced over the cost of
            its hired-labour in production is called 'surplus value'; which is created by
            the hired wage-labourers and is the source of profit for the capitalist.
            "The despotism of capital over labour is the condition of their own parasitical existence." - Karl Marx
            For a more complete explanation Read 'Das Kapital, volumes 1, 2 and three', by Karl Marx & Friedrich Engels

            ! The swinistic greed and racial hatred of the American ruling elite is abysmal !

            by joe wobblie on Fri Mar 16, 2012 at 02:58:06 AM PDT

            [ Parent ]

            •  I think the (1+ / 0-)
              Recommended by:
              joe wobblie

              caracature of a the guy from the Monopoly board (aka Mitt Romney) taking a gazillion dollars in CEO comp hangs over the discussion.  

              When a worker enters a co-op, he or she needs to provide capital to that organization.  It is no different than the capital provided through the purchase of stock on the stock market - its money added to the equity base of a business enterprise in order to operate.  It is also a portion of the source of the right of the individual to participate in decision making over the enterrprise.

              Through the requirement that these indivduals also be workers, a co-op makes that person wear two hats - labor and capitalist .  By residing those roles in the same person, the hope and intent is that the goals align together and you no longer get the domination and exploitation of one over the other - in theory, the work in harmony.

              It is, however, and does remain, two different roles - the participant gets wages for his labor, and to the extent there is profit over and above the payment of all wages, it is distributed in proportion to ownership.  To the extent these two roles exist, there is still tension.  The CEO and the janitor may be equal owners, but the get different salaries, and will therefore bring differing perspectives to the table when it come to what is paid in salaries and what is distributed a profits.  One hopes the at the collective goals of benefiting of the organization (rising tide raises all boats etc.) as an internal matter mutes this tension such that it is manageable - currently, that tension exists in a place where there is nothing to mute it, as the external capitalst and the internal laborer have no common ground.  But the two roles still exist.

              This isn't about labor over capital.  It is about providing incentives that aligni the interests of labor and capital within an entity that competes in a free market.  

              •  Bravissima, you're an anarchist! (0+ / 0-)

                Perhaps you would prefer for now, a system such as they have in Germany, where workers, by law, sit on a corporate board of directors.
                       "Workers will own the corporations" - IWW
                       (There is no discussion of Romney with me, he is too disgusting...)

                ! The swinistic greed and racial hatred of the American ruling elite is abysmal !

                by joe wobblie on Fri Mar 16, 2012 at 12:28:02 PM PDT

                [ Parent ]

                •  Who knew? (1+ / 0-)
                  Recommended by:
                  joe wobblie

                  I was certain I was to branded a corporatist or a republican or some such chuckle.  In reality, I'm a tax and corporate lawyer who actually sets these things up, and I've on more than one occassion had to talk through the practical realities of organizing and operating them.  The concerns I raise aren't just mine.. its the thing that they talk about around the table as they work through their bylaws and hope to preserve their legacy of social justice and corporate responsibility into the future.

              •  Tension is a simple matter of physics, it exists (0+ / 0-)

                in the universe in which we live.  As you lay it out here, it is also a matter of individual personality traits.  It does not necessarily point to the feelings of any one individual in a corporate entity that is set up to more equitably distribute income to all participants in a business enterprise.  It does not necessarily follow that the janitor will harbor feelings of ill will towards the CEO who gets paid more total compensation than he/she does in this type of business model.  In fact, it is my experience that employees who work for companies that are employee stock ownership plans, co-ops, or private companies that simply distribute income as bonuses to all employees, regardless of the exact formula used to distribute the extra value, experience a better quality of work life and are happier employees period.  They appreciate the acknowledgement of their contribution associated with the extra compensation.

                It seems that you feel a need to flex your corporate, legal, and intellectual muscles here, which in the context of this diary and this website, devoted to Democratic ideals, seems out of place and inappropriate.  I wish you well.

                "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

                by helpImdrowning on Fri Mar 16, 2012 at 11:40:35 PM PDT

                [ Parent ]

                •  In more simple terms, you seem to have (0+ / 0-)

                  succumbed to a common (used as an adjective here) need to prove how smart and clever you are rather than contribute to the ideas that the diarist put forth in this diary.  I'm just sayin' .... (and I was trying not to).  I wish you well.

                  "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

                  by helpImdrowning on Sat Mar 17, 2012 at 12:21:18 AM PDT

                  [ Parent ]

      •  If you mean "epithets" in terms of a disparaging (1+ / 0-)
        Recommended by:
        joe wobblie

        characterization of anyone here, that is your own interpretation and methinks the lady doth protest too much.  I was simply surprised to see many comments disparaging this diary, on what is supposed to be a very Democratic blog, with very Republican-like ideas.  So, if you are "troubled" I suggest you look inward.  And btw, where in my comment do I say anything about capitalism?  I wish you well.

        "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy

        by helpImdrowning on Fri Mar 16, 2012 at 12:35:39 AM PDT

        [ Parent ]

  •  I'll pass (0+ / 0-)

    Based on the hair-pulling frustration I've had deciding simple things like a project schedule, I don't want my company run by committee.  

    My CEO is doing just fine.

    GOD! Save me from your followers.

    by adversus on Thu Mar 15, 2012 at 05:29:55 PM PDT

  •  The the railroad Robber Barons put so much (2+ / 0-)
    Recommended by:
    AoT, helpImdrowning

    pressure on farmers that they banded together and started farm co-ops to have negotiating power to get decent prices for their farm products. Many of those co-ops still exist, but some have collapsed or sold out to private interests.

    Personally I think that the Bain Capital-type business model is going to force American workers to reconstitute the businesses that Bain & its ilk gut and kill with debt and make their own jobs and maintain control of those businesses to keep them from being vulture bait again. I think it's the only way to fight back against the vulture model and take control of our own work and products and I hope that we can get the word out so people start thinking of it as a viable option.

    Information is abundant, wisdom is scarce. The Druid

    by FarWestGirl on Thu Mar 15, 2012 at 05:51:50 PM PDT

  •  Always thought this was a good fit for (1+ / 0-)
    Recommended by:
    helpImdrowning

    Occupy and have commented as much several times.

    I think the easiest start would be a Goodwiil Industries type store, could even be consignment if you want to avoid sinking capital in inventory. The market is good for used products and most metros could support another such store in the right location.

    This, too, shall pass. Just like the last global ecological cataclysm. C'est la vie, dude. Take a chill pill, recite the serenity prayer, go with the flow and the moderates into that "goodnight".

    by Words In Action on Thu Mar 15, 2012 at 07:01:37 PM PDT

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