When you start a co-op, just like any other bootstrapped business, you're staking your livelihood, but you're forgoing most of the upside. You also need several other people to agree with you. This screens out most of the risk, which is why they're perceived as working well. This works out great if you're lucky enough to be employed by one, but not great for people who need a job immediately.
That's a good question and it seems like it's difficult to separate from people's ideological ideas about whether they are good or bad.
My hometown in Oregon had a cooperative, Burley, that made bike stuff like trailers and tandems and some clothing. Word was that it was kind of dysfunctional because of how democratic it was even if all the people cared deeply. I think they finally ended up selling out to some outfit who scrapped everything but the trailers.
The paradox of worker-coops is that workers capable of successfully running businesses together are also capable of running businesses independently, so there's no need to form a co-op. It's those incapable of running a business individually or collectively that then form co-ops. Mondragon is the exception, not the rule.
Cooperation is difficult and does not scale well. One selfish person can act selfishly alone. But one cooperative person first needs to find someone else to cooperate with... and the other person also needs to have compatible skills and values... so it is often easier for the cooperative person to just give up, and work to make someone else rich.
And the more difficult project you have, the more extreme this gets. If it is something that most people could do, it is easy for the cooperative people to find each other. It if it something that only one person in a thousand can do, the one-in-a-thousand cooperative person will have a huge problem finding the rest of the team.
Put another way: Singers who aren't good enough to make it on their own form large idol groups (eg: AKB 48) to sell themselves, while those who are become stars on their own or form small bands with others of similar success.
Or to put it another way: Ground meat is great, but the components thereof by themselves are generally regarded as waste.
This whole train of metaphors is just bizarre and wrong. Singers who aren't good enough to make it on their own are never heard of or discussed. Ground meat made from poor quality meat is poor quality ground meat, and people do, in fact, grind the good stuff to make good stuff.
And I'm sure that plenty of people who could start a business on their own could start a business with the help and support of like-minded partners, and might even be better off for it. I'm not sure where we get the idea that founders must be lone-wolf savants.
> Why don't workers unite to democratically manage production?
Because the majority of workers are doing the minimum amount of work to get by, because ~50% of workers are below average intelligence, because those with the entrepreneurial skill and/or business management competence necessary to make this happen benefit more from the current system and have less motivation to mess with it.
Does the Basque region produce more engineers than other areas? I'm guessing their issue is more tied to the demographics of the area they are in and less of the compensation side of things. It's far harder to commit to a coop where your contribution is valued thousands of miles away and you don't have the immediate stake in things (e.g. your bar, bakery, barber, etc)
However, if your issues are tied to local characteristics, then (in maybe an abstract way) you still have another fundamental obstacle to scalability, not related to compensation..
(FWIW i think an interesting related question is whether YC might be able to scale outside SF if they werent so into the slogan “do things that dont scale” — which i sometimes interpret as the viridical paradox “scale by not scaling”)
There are a few. There's a tech coop federation in the UK for instance. A big hurdle for efforts like this is access to finance meaning they often have to be bootstrapped.
By historical reasons the Basque country has an special tax regime and economical benefits from the Spanish government. This may have an influence on the outcome. Is easier to win when the other run handicapped, and not so easy to replicate it if we remove that context.
Most people also ignores that this system exists. Out of Euskadi, the name is more associated to the (in)famous band orchestre Mondragon, that was an appropriately anarchical mess, part circus, part rock band.
It might be a lack of education (not a value statement). Socialism in Spain was not established at once. It was an effort spanning many decades.
If we would suddenly find ourselves in a medieval kingdom we would certainly need time (and help) to adapt to that system. Likewise, people from that period would need time (and help) to adapt to ours. Regardless of whether it is better.
Note that Mondragon is not a socialist enterprise. It's not obvious to me whether you're saying it is, but I think one of the interesting things about Mondragon is that it's somewhere in between the socialist-capitalist dichotomy. If you came along and said "good news, the state is in charge of all your businesses now" they would not consider their mission accomplished.
Socialism traditionally meant workers control over production. To the degree that Mondragon is democratic it is socialist.
Socialism came to be commonly associated with "State-capitalist monopoly" (Lenin) later in the 20th century but that does not describe revolutionary Spain at all.
There companies were mostly worker owned, democratically managed and freely associated within democratic regional and industrial cartels representing consumers' and producers' interests respectively. Highly advanced democratic systems. Larger companies were expropriated compulsory. Yes. But they were transferred into the ownership of the workforce. While smaller companies generally were free to operate as "private" enterprises though at a certain size that rarely made sense because all of industry was structured to serve democratically managed industrial operations.
Realistically Mondragon is rooted in Catholic social teaching (founded by a priest). Thus it requires someone to be motivated by something other than money. Religion is one of the few things that will be able to inspire such amounts of work while forgoing most economic upside.
Maybe nationalism can do that, but keep in mind that when this was combined with nationalism we got Nazism (Nazism took lots of inspiration from Austrian corporatism which was similarly influenced by Catholic social teaching here). I'm not sure it's either safe or advisable to do this aside from religion
They don’t allow genuine innovation in any shape or form, and that in particular leads to highjacking by bureaucrats and degradation. So they may work in short term (work for some at the price of oppressing the ones who don’t fit well into the collective) - I’m from USSR for example - yet the result is predetermined.
That is flatly false. Worker cooperatives are every bit as innovative as any other form of private corporation. These are owned by workers not a centralized government. There are quite a few of them and you may well have purchased their products with it even realizing it. Two additional examples you may have encountered are Equal Exchange and King Arthur Flour.
There aren't more of them because they have a hell of a time securing financing when most businesses are financed through equity sales which they can't do.
Example of innovation please. I’ve seen first hand that no collective farm is able to produce nor SpaceX nor even EV nor even plant in time and harvest in time.
It seems a bit premature to speak so generally about collectivism. It's quite possible that the USSR failed for reasons that do not apply to Mondragon.
Maybe once we've seen a few hundred of these come and go it'll be time for a general theory of their kind.
>It seems a bit premature to speak so generally about collectivism
2B people spent better part of 20th century doing the experiments, killing tens of millions of those who didn’t completely shared the ideas of the collective, and you think it is premature?
General theory is in the Das Kapital. So far the things have worked as described. People by mistake ascribe happiness to the outcomes calculated there while there is no such happiness predicted by that theory. Ie communism isn’t a happy place like some naïve readers think, communism is prison and oppression.
Mondragon has lasted 68 years and I believe the USSR had lasted 69 years. Why do you think they will fail in the next year? Also given the speed of advancement has increased in the past 30+ years, it seems like they have kept pace a lot better than the USSR (or it's successor Russia)
I don't think the USSR is a great example. The region has been under the thumb of authoritarian dictators for a 1000 years and those who most strongly disagreed with this have for that millennium either left or died leaving behind a nation largely populated by the children of people willing to go along to get along under such a system. Cultures and circumstances leave a mark on a people not least by the process by which survivors are selected.
If anything the current situation stands to worsen that situation with smart young people who might contribute to a better future dying or fleeing.
When you start a co-op, just like any other bootstrapped business, you're staking your livelihood, but you're forgoing most of the upside. You also need several other people to agree with you. This screens out most of the risk, which is why they're perceived as working well. This works out great if you're lucky enough to be employed by one, but not great for people who need a job immediately.
That's a good question and it seems like it's difficult to separate from people's ideological ideas about whether they are good or bad.
My hometown in Oregon had a cooperative, Burley, that made bike stuff like trailers and tandems and some clothing. Word was that it was kind of dysfunctional because of how democratic it was even if all the people cared deeply. I think they finally ended up selling out to some outfit who scrapped everything but the trailers.
The paradox of worker-coops is that workers capable of successfully running businesses together are also capable of running businesses independently, so there's no need to form a co-op. It's those incapable of running a business individually or collectively that then form co-ops. Mondragon is the exception, not the rule.
Cooperation is difficult and does not scale well. One selfish person can act selfishly alone. But one cooperative person first needs to find someone else to cooperate with... and the other person also needs to have compatible skills and values... so it is often easier for the cooperative person to just give up, and work to make someone else rich.
And the more difficult project you have, the more extreme this gets. If it is something that most people could do, it is easy for the cooperative people to find each other. It if it something that only one person in a thousand can do, the one-in-a-thousand cooperative person will have a huge problem finding the rest of the team.
Put another way: Singers who aren't good enough to make it on their own form large idol groups (eg: AKB 48) to sell themselves, while those who are become stars on their own or form small bands with others of similar success.
Or to put it another way: Ground meat is great, but the components thereof by themselves are generally regarded as waste.
This whole train of metaphors is just bizarre and wrong. Singers who aren't good enough to make it on their own are never heard of or discussed. Ground meat made from poor quality meat is poor quality ground meat, and people do, in fact, grind the good stuff to make good stuff.
And I'm sure that plenty of people who could start a business on their own could start a business with the help and support of like-minded partners, and might even be better off for it. I'm not sure where we get the idea that founders must be lone-wolf savants.
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Considering that I just started one, the reason is, nobody will fund it
Why? Everybody with the money to start it, wants more money or special tax treatment via charity.
I’m actively funding ours myself for 0% return in order to bootstrap the infrastructure we need
Why don't workers unite to democratically manage production? The police, propaganda, wage slavery.
> Why don't workers unite to democratically manage production?
Because the majority of workers are doing the minimum amount of work to get by, because ~50% of workers are below average intelligence, because those with the entrepreneurial skill and/or business management competence necessary to make this happen benefit more from the current system and have less motivation to mess with it.
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There have been over 20,000 communes set up in the US. They are not illegal. Pick one and join it. Or set your own up.
Socialism is seizing the workplace from the capitalist.
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A comment below suggests that they have a hard time recruiting engineers, but I believe also experts and talent in general..
There’s then also something deeper about making the trade-off between growth(rate) and stability..
OTOH photographer coops are quite common, here is a famous one https://en.wikipedia.com/wiki/Magnum_Photos
Does the Basque region produce more engineers than other areas? I'm guessing their issue is more tied to the demographics of the area they are in and less of the compensation side of things. It's far harder to commit to a coop where your contribution is valued thousands of miles away and you don't have the immediate stake in things (e.g. your bar, bakery, barber, etc)
You are probably right.
However, if your issues are tied to local characteristics, then (in maybe an abstract way) you still have another fundamental obstacle to scalability, not related to compensation..
(FWIW i think an interesting related question is whether YC might be able to scale outside SF if they werent so into the slogan “do things that dont scale” — which i sometimes interpret as the viridical paradox “scale by not scaling”)
There are a few. There's a tech coop federation in the UK for instance. A big hurdle for efforts like this is access to finance meaning they often have to be bootstrapped.
> Why aren’t there more of these
By historical reasons the Basque country has an special tax regime and economical benefits from the Spanish government. This may have an influence on the outcome. Is easier to win when the other run handicapped, and not so easy to replicate it if we remove that context.
Most people also ignores that this system exists. Out of Euskadi, the name is more associated to the (in)famous band orchestre Mondragon, that was an appropriately anarchical mess, part circus, part rock band.
Be afraid, very afraid: https://www.youtube.com/watch?v=XWKHnjWMTNI
There are more of them, but good design "just works" and so goes mostly unnoticed.
Actually, I wonder if there's a word for this effect?
I do not believe it is necessarily about that.
It might be a lack of education (not a value statement). Socialism in Spain was not established at once. It was an effort spanning many decades.
If we would suddenly find ourselves in a medieval kingdom we would certainly need time (and help) to adapt to that system. Likewise, people from that period would need time (and help) to adapt to ours. Regardless of whether it is better.
Note that Mondragon is not a socialist enterprise. It's not obvious to me whether you're saying it is, but I think one of the interesting things about Mondragon is that it's somewhere in between the socialist-capitalist dichotomy. If you came along and said "good news, the state is in charge of all your businesses now" they would not consider their mission accomplished.
Socialism traditionally meant workers control over production. To the degree that Mondragon is democratic it is socialist.
Socialism came to be commonly associated with "State-capitalist monopoly" (Lenin) later in the 20th century but that does not describe revolutionary Spain at all.
There companies were mostly worker owned, democratically managed and freely associated within democratic regional and industrial cartels representing consumers' and producers' interests respectively. Highly advanced democratic systems. Larger companies were expropriated compulsory. Yes. But they were transferred into the ownership of the workforce. While smaller companies generally were free to operate as "private" enterprises though at a certain size that rarely made sense because all of industry was structured to serve democratically managed industrial operations.
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Realistically Mondragon is rooted in Catholic social teaching (founded by a priest). Thus it requires someone to be motivated by something other than money. Religion is one of the few things that will be able to inspire such amounts of work while forgoing most economic upside.
Maybe nationalism can do that, but keep in mind that when this was combined with nationalism we got Nazism (Nazism took lots of inspiration from Austrian corporatism which was similarly influenced by Catholic social teaching here). I'm not sure it's either safe or advisable to do this aside from religion
They don’t allow genuine innovation in any shape or form, and that in particular leads to highjacking by bureaucrats and degradation. So they may work in short term (work for some at the price of oppressing the ones who don’t fit well into the collective) - I’m from USSR for example - yet the result is predetermined.
That is flatly false. Worker cooperatives are every bit as innovative as any other form of private corporation. These are owned by workers not a centralized government. There are quite a few of them and you may well have purchased their products with it even realizing it. Two additional examples you may have encountered are Equal Exchange and King Arthur Flour.
There aren't more of them because they have a hell of a time securing financing when most businesses are financed through equity sales which they can't do.
Can you explain this more? As I understand, after equity IPO, most companies use debt capital markets to raise money to expand their business.
You've just changed my brand of flour, thanks.
Example of innovation please. I’ve seen first hand that no collective farm is able to produce nor SpaceX nor even EV nor even plant in time and harvest in time.
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It seems a bit premature to speak so generally about collectivism. It's quite possible that the USSR failed for reasons that do not apply to Mondragon.
Maybe once we've seen a few hundred of these come and go it'll be time for a general theory of their kind.
>It seems a bit premature to speak so generally about collectivism
2B people spent better part of 20th century doing the experiments, killing tens of millions of those who didn’t completely shared the ideas of the collective, and you think it is premature?
General theory is in the Das Kapital. So far the things have worked as described. People by mistake ascribe happiness to the outcomes calculated there while there is no such happiness predicted by that theory. Ie communism isn’t a happy place like some naïve readers think, communism is prison and oppression.
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Mondragon has lasted 68 years and I believe the USSR had lasted 69 years. Why do you think they will fail in the next year? Also given the speed of advancement has increased in the past 30+ years, it seems like they have kept pace a lot better than the USSR (or it's successor Russia)
Or have you worked there and this is first hand?
I don't think the USSR is a great example. The region has been under the thumb of authoritarian dictators for a 1000 years and those who most strongly disagreed with this have for that millennium either left or died leaving behind a nation largely populated by the children of people willing to go along to get along under such a system. Cultures and circumstances leave a mark on a people not least by the process by which survivors are selected.
If anything the current situation stands to worsen that situation with smart young people who might contribute to a better future dying or fleeing.