AskProfWolff: Worker Co-op Based Economies

A patron of Economic Update asks: "What different models would be available for different kinds of firms? I imagine the same organizational structure wouldn't work for a handful of workers as for a firm that employs thousands. Would a firm have to transition from one model to another as they grew? If we have democracy in the workplace, does that mean it would be representative democracy @work with workers voting for top-level managers? Or would it be more issue-by-issue? And in that case, who would decide how to put the issues forward?


If the workers control the means of production through co-ops, would unions still exist? Would you anticipate any downsides of a worker co-op's interests vs the interests of people outside of that particular firm? (Maybe nothing new outside of what exists under current Capitalism.)"

Follow Wolff ONLINE:

[palpaloma]

The co-op experience of Lip a watch factory in the 1970ties in Besançon in France was really a wonderful initiative by the workers of that factory taken over by them to avoid bankruptcy. This created a wave of co-op initiatives!

[josephgrove]

While you could theoretically have a co-op based economy with a stock market, I think it would be a very bad idea.

If co-ops were dependent upon investment capital from private individuals or companies, they would be under enormous pressure to maximize profits for them in order to prevent them from pulling out their investments (if that happened, the co-op would die).

This would lead even democratic co-ops to export labor to foreign sweatshops, exploit the environment, overproduce and speculate on markets which would lead to economic crashes, buy influence in politics so as to ensure policies that are beneficial to their profit margins, etc. Domestic workers might be treated better, but aside from that, the subservience to profit for a few investors would still create the same problems we have with capitalism.

That's why a public investment system is a crucial part of any co-op based economy. It can make investment decisions based on a combination of economic, social and environmental concerns that we as a society can democratically determine. Co-ops would then be under pressure to meet social and environmental needs, not make a profit over and above all else.

[gerardwhite]

The difficulty with worker coops is much the same as housing coops, only a small minority of members participate in the running of the organisation and the small minority then run the organisation to their own interests. In the case of housing coops this has led to volunteer management committee's mistakenly believing they are the members landlords with eviction powers which they exercise liberally.

[shpensive]

Richard has good taste, you can tell from things in the background of his videos. Seen here, a noticeable lack of drywall.

[BiaeMaira]

Love to wake up by a notification of your new videos, thanks professor!

[pezpeculiar]

Wolff, I'm confused about your openness to stock markets in a cooperative economy. Would stock markets essentially just be places for people to loan money to cooperatives? My expectation would be that dividends for shareholders, as well, continues the problem of people making money without contributing their labor, instead sitting on the backs of workers. My expectation would be that shareholding would inherently give ownership and control to people not working at the company (not a worker coop) nor consuming its goods/services (not a consumer coop).

[Polimeroize]

Hello, thx for your lections, thx for your job, comrade. From Russia with love.

[andrewsullivan]

Thank you so much for spelling this out for me! My fiancee and I have been discussing these details of a future economy for about a year. Your explanation confirms our suppositions!!!

[phatphred]

Is there a lobby in D.C. for this? I would like to see congress be lobbied to create an agency that creates co-ops. Our government should be encouraging co-ops. REI calls itself a co-op, but I would like to see companies that are co-ops in that the employees control the company be the only companies allowed to benefit in the environment of government encouraging co-ops. Companies that are co-ops in other ways, or co-ops in name only, must be excluded from this type of a program.

[cavl]

I think only the worker's should have shares

[keving.]

What happens when the private co-op takes more outside investors due to poorly managed employee decisions? If the co-op becomes too big to fail for a local community or limited with resources. Who decides to restructure, reappropriate funds, and business operations?

[pygmalion]

what about it?

1. State buys shares and regards enviromental factors as a major factor for making investment decisions for coops. While i think local coops will not polute their enviroment (because it is the worker's home) some forms of coops will, if we have still a profit incentive. So state, just like nowadays Norway do (Oslo stock market is %31 owned by the state) provide liqiudity for big investments and back up huge coops that are necessary for exploiting economies of scale and after some point of time when productive forces grew faster than population and automation takes place in some areas basically automated factories will be owned by local community (just like alaska) and give UBI to the people apart from welfare services that is already covered up by shares that are owned by the state and it would be a better option than individual shareholders and as you can see, it would not be like %50 of the people's rights will be owned by the state why? because while state do huge investment decisions they are not diffused to all firms but majority of them is big and productive firms. and while these decisions can be dangerous, like it is not a constant capital flow to the state, it flactuates, state will tax people a little to pool resource for losses of share value. If you think this is problematic just think of state owned enterprises that is sucessfull and failure. State can already do fucked up decisions while it can do good decisions too. But notice that state will not elect managers in the firm. Instead it's only force will be the right to cut back the money it give to that firm.

2. Literally credit unions. They can provide low interest loans and they make healthier decisions that will not fuck up the economy when they make a decision.

[cherubinth]

Even without formal ownership, if the coop needs the money from the investor, they will do whatever the investor wants or the investor will not give money anymore.

[TheLeksilijum]

Let's please not forget about about the informal power of celebrity when we talk about owning shares which are in theory separated from decision making. Nothing stops some of the workers who are influenced by a friend or "renowned member of society" to make decisions that favor them out of their "own free will". I don't think any kind of shares should be owned by people outside the worker co-ops. Communal ethical banks are a much better idea for that.

[mranderson]

Mr Wolff you should do a video on Yugoslavia when it had a market socialism or just a video on market socialism.

[ThaZMP]

In other words, we still have capitalism, compete ourselves out of existence. Until monetary systems are surpassed, and cooperation becomes the basis of whatever system gets adopted by humanity, humanity will perish, period end of story. Co-ops are a step in the right direction, but if co-ops have to compete against other co-ops, then all we are doing are shifting the chairs around on the titanic.

[kimwelch]

Economies are systems for extracting wealth from resources. The distribution of that wealth creates a reward feedback system that drives further extraction above the needs for a given society. It is this feedback that is driving global climate change, incentivizing pollution and both socialistic and capitalistic oppression. Societies centered on economic systems are an inevitable dead end--emphasis on dead. How do you build a society not centered on an economy? I don't know, but we had best start figuring out how to do it or go extinct.

[omsi]

Professor, I am curious about efficiency and competitiveness within a worker co-op. It's probably fair to assume it would be difficult to compete with a capitalist organisation that is willing to exploit workers and/or replace them when their contribution to surplus is surpassed by a new technology. I would assume that this could partly or entirely be offset if there is not capitalist class syphoning off so much of the surplus. If this alone isn't enough, what do you think would be necessary for a co-op to be the most efficient and competitive institution in labour?

[DualTasticToday]

I like tariffs. If overseas product is more than domestic you make them the same price with a tariff. All tariff collected you loan to start coop business to now compete with foreign made goods.

[jgalt]

Again, not exactly the question asked, which was:

A patron of Economic Update asks: "What different models would be available for different kinds of firms? I imagine the same organizational structure wouldn't work for a handful of workers as for a firm that employs thousands. Would a firm have to transition from one model to another as they grew? If we have democracy in the workplace, does that mean it would be representative democracy @work with workers voting for top-level managers? Or would it be more issue-by-issue? And in that case, who would decide how to put the issues forward?


If the workers control the means of production through co-ops, would unions still exist? Would you anticipate any downsides of a worker co-op's interests vs the interests of people outside of that particular firm? (Maybe nothing new outside of what exists under current Capitalism.)"

Now, voting shares are called "common stock", and if the only difference is that co-ops would not
issue them...then nothing that was described by Wolff is fundamentally different than what already
exists. ( although I did find the idea that a loan from the "government" would be forgiven as somewhat
humorous. In the real world this is known as bankruptcy. ).

How are co-ops then a solution to or a departure from the system, yet they essentially operate the same way,
with the same goals, for the same reasons and if it did not, it too would fail???

One wonders what the marketing approach would be: Yes, we produce inferior, overpriced items,
inefficiently, but you should buy them because we distribute our ill-gotten gains more equally,
and because despite all of this, we managed to produce this result, "democratically".