I want to see if the “hype” is true.
A while ago someone here posted a youtube video about some business in Brazil that was worker managed (it wasn’t actually a coop though). It was pretty interesting and I’ve been trying to find that video again, but I can’t.
Which “hype”? If you’re referring to information about the labor cooperative being a more efficient/productive form of organization than the orthodox hierarchical capitalist firm, consistent with the fact that some degree of horizontal management is necessary to yield Pareto optimality and the centralized firm is subject to the same distributed and tacit knowledge problems that Hayek identified, the empirical literature on the topic virtually provides a consensus…just start typing into Google Scholar, honestly.
What does it mean to be “more efficient” or “more productive”?
If worker coops were as amazingly productive and efficient as you claim them to be, one would expect them to be the prevalent form of economic organization in this country. That’s the real empirical evidence.
Agrarian farmer A produces 25 units of edible staples with 10 units of grain. Agrarian farmer B produces 50 units of edible staples with 10 units of grain. I’ll prefer the latter.
Well, no…the market utopianist would. The person who realizes the concentrative effects of market power would realize the shallow nature of such a claim, as I explored in my first post on the forum. It’s curious, because I’ve become quite accustomed to the junior Misesians across the Net rejecting every single study in existence because of their insistence that the inability of social science to completely isolate all variables renders them all useless. It’s certainly a shift to find someone claiming that raw data without any controls whatsoever proves anything, though if it lines up with your preconceived ideological biases, I can see why it would be tempting.
Really? You prefer 25 units over 50 units?
I’ll go with the 50. It’s…late here. :\
They are. My family are farmers in Spain, and we use “cooperatives” for most of our production. The problem is the way that people believe they are set up. For all intents and purposes, they are private enterprises. I’ll use our wine cooperative as an example. The cooperative is set up by a number of farmers willing to set up the firm. Other farmers can then become members, whereas they exclusively sell their grapes to that cooperative to make their wine. It is a private company.
No, someone with an understanding of economics would.
Your argument is basically “competition begets oligopoly.” This is simply a logical fallacy. The fact remains that the vast majority of businesses in the United States are small businesses and it follows that if so many businesses somehow can resist your imaginary “market concentration,” then small worker cooperatives should be able to do the same.
I’m actually only arguing you on your own terms. Of course, you cannot draw any conclusions from empirical data without tainting those conclusions with your own theories.
They might be the prevalent form of economic organization in rural Spain, but they definitely aren’t the prevelant form of economic organization in most of the capitalist world.
In any case, I have nothing against worker coops as long as they are voluntary. If they are profitable in a certain segment of the market, they will become the norm in that market. Ultimately, however, coops will never become the prevalent form of economic organization in all of society because of the key role of entrepreneurs in the market process. Entrepreneurs take risks for profits, whereas most workers are comfortable in taking a non-risky source of income called wages.
I came to know about cooperatives in a debate with socialists a few weeks ago, I must admit I wasn’t too impressed with the concept, my first reaction was “if its voluntary its fine by me” but they argued that cooperatives supposedly are “non-profit” organizations.
Is that true? Can a non-profit organization be successful in a free market?
Organizations termed “non-profits” by the US tax code still seek to earn a profit, otherwise, they would go bankrupt. Any organization which does not take in more revenue than it spends would go bankrupt.
I strongly doubt it, but at any rate, let’s focus on you.
That’s quite correct. It’s also the case that small businesses (proprietorships, partnerships, smaller corporations) control a far lower market share than established large corporations, which proves my point quite effectively. Never heard of the Herfindahl Index? Or the Statistical Abstract of the United States?
You’re not, actually. I would never make any claim so fallacious as an assertion that the nonexistence of workers’ ownership and management as the dominant form of firm organization illustrated its inefficiency without considering a single other factor and denying basic economic realities.
Neither is the “free market.” Come to think of it, the laissez-faire free market isn’t an existent form of economic organization in any part of the capitalist world. What would that illustrate, if we were consistent?
That sounds interestingly familiar. Been reading a little Caplan?
Perhaps you and he haven’t considered the fact that more equitable distribution of firm ownership provides similarly equitable incentives for ensuring firm success, since it’s employees’ own financial investment that is at stake? Perhaps you and he haven’t considered the fact that the horizontal nature of the labor cooperative eliminates the distributed and tacit knowledge problems created by the hierarchy of the orthodox capitalist firm? Perhaps you and he haven’t considered the fact that the combination of ownership and management in the hands of workers eliminates principal-agent problems, since the interests of “owners” and “managers” are one and the same?
Mises wrote a harshly critical piece on cooperatives, emphasizing the special legal and political protection they enjoy in many countries: http://mises.org/mmmp/mmmp18.asp
On the purely economic issues, see the links and discussion here: http://organizationsandmarkets.com/2007/04/04/vaguely-defined-property-rights/
And for good, clean fun you might look at some of the exchanges between Roderick Long and me, which involve (among other things) the economic attributes of cooperatives: http://organizationsandmarkets.com/2008/12/01/government-and-the-corporation/
Translation = robbery, correct?
You remind me of someone from another forum who refused to identify as socialist or communist and called themself “crazy left of left”.
So, what is it you actually advocate? Voluntarism allows people to form collectives all they want. It doesn’t allow forced income redistribution and murdering scab workers. What is your objection to allowing people to form businesses or be a non-owner employee if they want?
Excellent questions.
Z.
In which case a) either these firms are more capable at providing mass markets with goods or b) they’re legally empowered. Or maybe both. If the latter, they’re efficient, no reason to care, in the latter they should not enjoy those protections. See?
An antidote to robbery, actually, since currently existing property distribution is based in theft. Since effectively all property in industrialized society was acquired by force, coercion, or fraud or created through the utilization of productive resources that were acquired through force, coercion, or fraud, why do you have any interest in defending the present distribution of wealth and resources, stepchild of a phase of primitive accumulation that it is?
There aren’t any. I simply share the common libertarian/anarchist belief that firm organization will not be inclined toward hierarchy due to the inefficiency and authoritarianism of that arrangement.
Hmmm. Returning to reality, control of larger market shares often does not necessarily reflect efficiency or this greater capability so much as previously existing concentration. Market power skews affairs so that those with the greatest amount of resources to draw on remain established firms, with this constituting a barrier to entry for small firms regardless of their efficiency. Market competition is generally regarded as producing allocative efficiency. See?
In an anarcho-communist society, how would efficiency, as you define it, fit into society getting what it wants?