I’ve known a few in the U.S., and even worked at one. Maybe people won’t become billionaires doing this, but why wait for a complete overhaul of society to implement more of what are good ideas.
I’d also like to see more childcare co-ops, or community shared pre-k schools. Wheres the movement to build communities and pool resources around these business models in the US? In short, co-ops are the closest socialist/communist business model that’s actually implemented in the U.S., so why are more leftists not doing this?
They tend to get out competed by companies with enough investment funds to undercut them without making a profit until they have a stranglehold on the market and can jack up prices.
They don’t have access to capital (means of production). Consider the following scenario:
All of the employees at a car manufacturing plant are sick of being paid a fraction of the total sale price of the cars they make. They decide, in solidarity, to quit en masse and start a worker co-op car plant instead so that they can all enjoy sharing 100% of the profits themselves.
So they quit. Now what? Well, knowledge isn’t an issue because they already knew how to operate all the machines in a car plant. The problem is that they don’t have the money (or the land) to build a new car plant. We’re talking billions of dollars and a huge piece of land which ideally should be located on a railroad line so that parts (which are very large and heavy) can be delivered affordably by rail.
So where are they gonna get the money? Not from private investors, of course, since that nixes the worker only profit sharing arrangement. Not from banks either because these workers, while highly knowledgeable and motivated, don’t have any collateral to put up for the bank loans. The banks do not want to be in the position of repossessing a bunch of specialized manufacturing equipment and trying to resell it at a loss.
The common response to this is: the government. But think about that. Do you want your government giving billions of dollars to a few hundred people so they can start a car plant and then keep all the profits?
And they’d have to buy parts and materials from the same suppliers feeding the major automakers who have already streamlined their logistics and costs from the smelter to the finished product - and you know they’d exploit those efficiencies and supplier connections to create financial hardship on the upstart automaker. Same way airlines use fare wars to undercut competitors to pressure them out of a market.
There’s nothing the business world hates more than a well treated and well paid workforce. They’ll band together to crush the idea.
And even if you don’t need billions in startup capital for land and buildings and machinery, you’ve still got cash flow concerns.
Say you want to make software, and you know you can make it in 3 years with 20 people. What are you going to use to pay the bills until you’ve finished making whatever it is? Where are you going to find people who will go without money for that time? What if there’s no market for it by the time you’ve done?
Even something very simple like a coffee shop is difficult to run as a co-op.
Yes, if you have a few friends who are all passionate about coffee it’s possible for you all to get loans / mortgages to pool together enough money to buy/lease a small commercial property and open a coffee shop together. The only really significant pieces of equipment are the espresso machine and coffee grinder, both of which can be bought used for a few thousand dollars.
But here comes the issue: suppose it’s you and 4 friends who started the coffee co-op with $200k each (total $1 million) to buy the real estate and all of the furniture and machinery. Now the 5 of you work in the coffee shop and it starts growing more successful so that you need to hire more baristas (or pastry chefs or sandwich artists) to work there. How many baristas can you find who can afford to put up $200k to buy into a share of the co-op?
Or even more fundamentally: what if 2 out of the starting 5 decide that working in a coffee shop is too exhausting and they don’t want to do it anymore so they quit? Now the other 3 need to put together a total of $400k to buy them out? Or do you have a clause in the contract which says they forfeit their investment if they quit? Now I dunno about you, but as much as I love using my espresso machine I would never want to enter a contract like that! I’d much rather keep my $200k in the bank and work as a regular employee barista knowing I could quit any time I want.
If I share profits, then how do I, a lowly CEO, keep all of the profits for myself?
co-ops don’t get loans. It’s hard to start a business without loans.
Loans are also the reason houses are usually so expensive.
Rei says it’s a coop.
a union busting so-called that, at that.
It’s a consumer co-op (barely) not an worker co-op.
We have different company styles here (Swiss, but Germany, Austria, France similiar).
From the name: there was this company i worked in, it had a pool of investment money with other companies together. Another one, that makes accounting & finances, projects, with companies under their wing.
Is it something like that?
I think a lot of people don’t know what co-ops are. I have been pretty left leaning my whole life and I only found out co-ops in my late 20s and the majority of people I talked to in real life have no idea what coops are. And from that few that do know, many dont know how big cooperatives can be.
For the uninitiated, I am sharing the [International Cooperative Alliances definition of coops here: https://ica.coop/en/cooperatives/what-is-a-cooperative
and the list of largest coops in 2023 here: https://ica.coop/en/media/library/research-and-reviews-world-cooperative-monitor/world-cooperative-monitor-2023
Screenshot of the top 10 coops based on turnover in USD from the report here:
FWIW, according to this site, 24% of Germans are co-op members. The number of co-op employees is only a fraction of this, however.
I’m currently educating myself on how to create a co-op shares portfolio for some long-term investment.
Look into Germany’s co-determination laws for an example of this being required to a certain degree, in every corporation.
It’s a good question OP. I think about this too.
They’re extremely popular in the US, especially in banking (credit unions). I have yet to find any country in Europe or South America with US-style credit unions snf it drives me crazy
American banks offering credit card have the highest profit margin of ANY US industry. In most other countries cash is still king. Hence credit unions in those countries need to charge fees and offer worse services. That is true for other banks as well.
If EU “credit unions”:
- Are not nonprofits,
- Everyone with a bank account isn’t an equal member and voter in meetings,
- All members aren’t given the opportunity to present proposals and decide how to spend excess revenue
…then it seems like that’s the problem
Credit unions are a type of cooperative bank. The key is that anybody who opens a bank account becomes a member automatically. That is not the case for other types of cooperative banks.
What you’re describing is not a cooperative.
The definition of a cooperative is where they’re Democratic and decisions are made collectively by all members.
It sounds to me like what you’re describing is a for profit company
I have yet to find any country in Europe or South America with US-style credit unions
Huh? Maybe I don’t know what a US-style credit union is, but the German-language countries have large banking Genossenschaften (cooperatives), often called People’s bank. Many of them have origins in farmers lending each other money.
I don’t know about Fennoscandia, but it would surprise me if there aren’t equivalents, given the cooperationist history in very local economies.
Not sure about others in fennoscandia, but at least Finland has multiple large co-ops. One of the largest banks, OP ( literally named co-op bank) is a co-op which many own a part of. Many of my friends are part of the co-op.
Also, Finland’s largest retail conglomerate (with 48.3 % market share of retail in Finland) is a consumer co-op, which is also causing a very difficult situation for all other businesses in retail, as they’re able to undercut practically everyone since they have less of a profit incentive. 2.4 million people have a membership, which is quite a sizable amount in a country of under 6 million (though I’m not sure if the number includes Estonians as well)
Yeah, I’ve lived in Germany and those are terrible. Most charge monthly fees.
Credit unions are nonprofit banks that are coops. Everyone who is a member votes on what to do with the excess revenue, which usually gets paid as dividends back to the members (everyone with a bank account) or gets reinvested to cover cool services like ATM refunds, free travel/phone insurance, etc.
Its curious that the ides of a credit union was born in Germany but their credit unions suck
Yeah, they’re for-profit banks and not everyone is a member who has an account.
They’re also very popular in Denmark.
Do they have monthly fees? If not, I wouldn’t say they exist
That’s what public companies are. You buy their shares to help out with business and they share their profits. How much more of them do you want?
This is some ignorant shit
No, public companies and cooperatives are completely different things
The investors is not who they’re talking about sharing profits with
No, they’re not different. If you’re creating a co-op - your partners are still shareholders and investors. The only difference is that co-op is private, but public company is… Well, public. But the end result is the same.
Capitalism and socialism are the same thing.
You should probably ask more questions and make less statements.
Effort, risk
People who would start co-ops are usually decent and don’t care about profits that much. They wouldn’t exploit their workers or other obvious strategies that would put profit more important than wellbeing.
All the companies that don’t care about this have much less costs. Thus the companies that don’t care about morality can offer lower prices than the co-ops, and since most customers care about that more than anything else, the co-ops are driven out of business much more often.
All the companies that don’t care about this have much less costs. Thus the companies that don’t care about morality can offer lower prices
Non sequitur. You forgot that the “cost” of satisfying stockholders is far less than the cost of labor even if wages are doubled.
Lots of people have ideas, few people actually want to implement ideas. This is why there’s more workers than business owners.
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.
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.
