Is the Co-operative the answer to income inequality?
A Co-operative is a business that is run and maintained by the workers, who distribute the risk and make decision on what to do with the profits if the company make any, instead of investors and shareholders. That means that if a company is successful, then all the workers will share in a percentage of the profit.
If you work for a Co-op, then you have a portion of the responsibility for that company, usually democratically. Any and decisions are made by the employees who are closest to the business. This has its challenges, but also benefits.
The idea is that you get all the economic benefits of a capitalist economy without the vast income disparity. It is democratization of the corporate enterprise. Could this business model potentially replace most traditional businesses?
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Just try to start a business with many partners and you will understand why tis model sounds good but do not work...
There are some business that work in this co-op scheme with all employees being partners. It never grow, unless some partnership with public sector/the employees give up their "right to command" to a common board of directors that will make more money than the owners itself.
Pedrohbds
Level 7
May 13, 2019
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I’ve had dealings with a couple of cooperatives and great idea, the politics is terrifying!
Geoffrey51
Level 8
May 13, 2019
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There are still some around. We have REMC here (Rural Electric Member Cooperative?) as local utility.
Ultimately aren't things based on # of shares? Kind of like the stock market?
twill
Level 7
May 12, 2019
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They can be, although not necessarily. Some of the smaller ones just share all the profits equally, others just require employees to buy in too a certain share of the company when they get a job there, and then they will make back that money if the company is profitable.
Similar to profit sharing?
t1nick
Level 8
May 12, 2019
0
Sort of. What the Amish do is the best example in America, although co-op's are more popular in Europe for all sorts of businesses, and a few exist in silicon valley. Basically a group of friends gets together and start a business where there is no one leader and they all share responsibility, risk if the business fails, and profits if the business makes any.
@Happy_Killbot
When I taught on the Hopi reservation, the non-idian medical staff and the teaching staff participated in a co-op. We bought bulk foods to reduce costs. I know we had a sponsor, but I do not know if he operated it as a business, or just a sponsor.
the secret is to do exactly what we have been doing. Take advantage of the open market while still keeping disadvantages lower by regulations and standards. It's complicated so there's no single, tricky, gimmick tool to miraculously work. We have to keep correcting on the fly both ways.
JeffMesser
Level 8
May 12, 2019
1
It only works in miniature. Imagine a cooperative with 1000 workers. Who decides how much a person gets in wages? What weight should a cleaner have in deciding where to locate a new office or whether to purchase a new IT system?
Petter
Level 9
May 12, 2019
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Having lots of smaller businesses seems like it would be beneficial to society as a whole, promoting competition over monopolies thus driving efficiency and low prices.
It is possible to have some form of management structure within a Co-op, some consists of sub divided groups that are geographically isolated or have representatives for certain decisions. The weight of any choice could be divided by shares or equally. That depends on what the individuals founding the business decide.
I'm guessing not. The Amish have been around America for over two hundred years, I think, and their system has no caught on with the rest of America. Co-ops used to be popular with farmers in America as a way to prevent the railroads and grain elevators from cheating them out of their fair share of profits, but those have gone away in the last few decades as family-owned farms have been replaced by corporate agribusiness.
TomMcGiverin
Level 8
May 12, 2019
1
Perhaps not on its own, but the fact that these things did exist means that they can and do work. I think for something like this to become mainstream we would need a societal shift towards them as the primary means of how we do business over private businesses.
@Happy_Killbot America's core problem when it comes to rejecting socialism and not dealing with inequality is the pervasive individualism that is preached in our media and by our politicians of both parties. Until collectivism is the dominant value in the culture over individualism, we are doomed to more of the same.
@TomMcGiverin I think collectivism is part of the problem. People don't really stand up for themselves, and try to outsource decisions in their own lives to managers and politicians who of course, take advantage of them. The reason most cultures we call socialist (like USSR, Mao's china, Nazi germany ) failed is because they claimed to be collectivist while people with individualist personal philosophies take charge. In capitalism, a few people take charge of a mass who do what they say. In other words, the business owners are individualists while the workers are collectivist.
A Co-op strikes a good balance between individual and collective ideas, because individuals share responsibility and risk, instead of individuals.
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