[lucky]

In a typical coop income surpluses (profits) are either re-invested in the business or distributed to the members depending on what the voting members decide to do. [...] I said that 100% of the coops assets are owned by the coops corporate name not that members couldn't divide the profits amongst themselves.

In every company, the company's assets are owned by the company in the company name. In every company, profits are either reinvested or distributed to owners.

What you said was: "members don't have equity shares", which is false, since you just said they get a vote and a share in profit distributions, which is exactly what an equity share is by definition.

[SolarCross]

@someone5

Okay that is different from the usual workers coop. It is actually less communist than regular coops so ought to be more acceptable to the rugged individualists than a worker's coop as it normally works.

There is a taxi company in Hereford (where I work) that is organised very much like your model.

[SolarCross]

In every company, the company's assets are owned by the company in the company name. In every company, profits are either reinvested or distributed to owners.

What you said was: "members don't have equity shares", which is false, since you just said they get a vote and a share in profit distributions, which is exactly what an equity share is by definition.

What I mean is they don't have tradable equity shares. You don't buy a share to become a member in the coop. Membership allows voting rights as to what is done with profits which is usually either re-invest or distribute it amongst the membership. It is not very hard to understand.

[Someone5]

Okay that is different from the usual workers coop. It is actually less communist than regular coops so ought to be more acceptable to the rugged individualists than a worker's coop as it normally works.

It's quite communist; what could be more communist than direct worker ownership of the means of production? It's less orthodox than marxists would like, but that doesn't really mean anything. I mean, the orthodox answer is to just have the workers use the vanguard party to seize the property rather than buying it jointly. It's non-confrontational communism.

There is a taxi company in Hereford (where I work) that is organised very much like your model.

I don't doubt that they exist. It's a model that would seem to make sense. Maybe not in every situation, but certainly for many of them.

[lucky]

What I mean is they don't have tradable equity shares.

Of course they don't. That's a very different claim.

You don't buy a share to become a member in the coop.

Right. You get it for free when you join / get accepted.

It is not very hard to understand.

Correct. Don't go be condescending now, it was you who made inaccurate claims.

The two limitations mentioned above (shares can't be traded, and you have to dilute your ownership for free every time you hire somebody / acquire a new customer) are exactly why such rigid ownership rules would be inadequate for most businesses.

[SolarCross]

@someone5
I agree it is communist (in a good way - not silly marxist vangaurd crap) but it is less communist than a regular worker's coop because in a regular workers coop members don't have to buy into the coop in order to have a share in its management and profits.

[SolarCross]

Lucky - I don't mean to offend but you are making this hard work. I didn't make inaccurate claims you just misunderstood them. Let me spell it out just to be sure you get it.
A worker's coop - does business like any other (selling goods / making goods / performing services / other) - ownership resides in a corporate identity that is controlled democratically by the membership - membership is not tradable or transferable - income surpluses are either reinvested by the members or distributed otherwise as the membership sees fit - capital investment comes from loans not by selling shares.

You may not like it and lazy people who like to make money through owning rather than working might not like it but it works wonderfully.

[mikema63]

Do you see people being able to invest in a growing company without working at it, perhaps through bonds, it is entirely possible that a coop might be producing something capital intensive. They might not have space for enough workers to make buying in cheap enough to get enough workers or the price would be to expensive and they would not have enough workers.

[lucky]

A worker's coop - does business like any other (selling goods / making goods / performing services / other) - ownership resides in a corporate identity that is controlled democratically by the membership - membership is not tradable or transferable - income surpluses are either reinvested by the members or distributed otherwise as the membership sees fit - capital investment comes from loans not by selling shares.

Agreed. This agrees with my understanding of your preferred business model, and is precisely what I wrote in my previous post. I don't see why you're trying to be confrontational about an agreement.

You may not like it and lazy people who like to make money through owning rather than working might not like it

So that's ... pretty much everybody! And it's a good thing humans are so "lazy", because the history of technological and economic progress is one of such human "laziness" and a desire to replace human labor with capital investments.

but it works wonderfully.

Coops, as described by you, work reasonably well for some nonprofits and things like membership-based drinking clubs. They would work horribly for successful businesses making huge profits. Here is why:

Suppose 10 guys run, and work hard in, a greatly successful business. They've been doing it for a while, and after so many years they've finally built it up to the point that it has started bringing in big bucks. Say, $11M in profits per year. What they now do is they distribute profits at the end of every quarter equally, so they get $275K / quarter each.

Now, they have a small problem that has been growing: their office starts to smell. They need a janitor, because they have too much work and are messy people who don't like cleaning. In the real world, they would hire a janitor for $20/hour or whatever and be done with it. In the coop world, they presumably have a choice: either no janitor, or the janitor becomes a member getting an equal share of equity.

Suppose they decide to hire the guy on September 8th. The janitor works for 3 weeks, and then September 30th comes around, time to distribute profits. Now they get $250K each. On October 1st, the janitor, all happy with the $250K he has "worked for", says "it's been a great time, now it's time for me to move on to my next big adventure!" and quits.

So, these guys end up paying $250K for 3 weeks of janitorial services, which comes out to $2083/hour. Being smart people, they realize this beforehand, and probably decide that they can survive another quarter without a janitor, which is a lose-lose outcome (smelly office, janitor doesn't get the job).

You can see why they would prefer to set up a corporate structure where it's OK to just hire a guy for $20/hour.

Of course there *are* many successful, mostly employee-owned corporations (United Airlines), but they don't operate by such ridiculous "coop rules". Crucially, the two rules you mentioned are not satisfied in such businesses: shares are transferable, and are not given in bulk for free to new hires when they start.

[SolarCross]

You keep saying you understand and then say something that shows you don't.

Lets take your (silly) example of why a coop wouldn't work. Ok so you got a coop that is doing really well it has just 10 members but they are pulling in $11million in profits (what are they drug dealers?) but they need some help cleaning the office, someone has to vacuum up all that spilt coke. They could decide to hire a cleaning company or coop to do that at whatever rates they normally charge but since they are drug dealers security is important so they want a guy they can trust. They find a suitable new member but decide that given cleaning is a really easy job compared to shooting pigs and knee-capping rival dealers members on janitor duty don't get an equal share of the profits. He gets a generous $40 an hour for the first year as a provisional member then after a year the original 10 re-evaluate the new guy. Say after a year the new guy is working out well but doesn't want to do anything more than cleaning and original 10 still think cleaning isn't as difficult or dangerous as their jobs in the coop, so they decide to give a base pay of $40 and bonus of 1% of the profits.

The moral of the story is that coops (as i describe them) don't have to give equal shares of the profits and most don't and I never said they did.

But lets say your drug dealing coop had a constitution that required equal shares and they were too lazy to vote on an amendment of their constitution. They could simply make base pay for drug dealing members $500 per hour and $20 per hour for janitors then their profits won't be so huge and it won't matter so much if new members with easy jobs have an equal share.

[lucky]

They could decide to hire a cleaning company or coop to do that at whatever rates they normally charge

That seems to nullify any restrictions on employment, since the employee could always start a one-person company.

coops (as i describe them) don't have to give equal shares of the profits

Ah! But if the profit distribution rules are so completely up to the members, why do you authoritatively say equity shares are not transferable? Isn't that up to what the members decide about profit distribution?

Can they also decide to not give equal shares of the votes to new members? And if so, how exactly does your vision differ from a regular corporation?

If not, if all employees must have equal votes, that would make it hard to run companies in most circumstances. For example, I build a company over 10 years, then hire 2 new guys to help me out on the cash registers. Given that they now have 66% of the vote, they just declare that all profits go to them, or just that I'm fired and they take over everything I've built so far.

If you want to rely on "trust" for new employees instead, then the whole idea is pointless, since the whole point of laws is to allow people who don't quite trust each other, to securely cooperate. If they do fully trust each other, then no laws or contracts are necessary.

If you tell me to hire an outside contractor instead to avoid giving up voting rights, then again the whole idea is pointless - why create rules only to leave a simple workaround open, and advocate its use.

[SolarCross]

Lucky - There are lots of way of doing a coop - the main way (as far as I am aware) is as I already described. Someone5 mentioned another way. Probably there are other ways too. The main idea is a way of organising a business such that those that actually do the work are in control. Do you object to this principle? Or is it just that you think you can come up with a better way of putting the workers in control?

You cited a scenario in which a soletrader converts his business into a coop and then you worry that the new members will just vote to have the former owner fired. Well the soletrader assuming he owns the business assets (no liabilities to complicate the picture) could assign a reasonable monetary value to the assets and sell that to the newly formed coop as a going concern with a goodwill value on top. Assuming the prospective members of the new coop agree to those terms then the former sole trader and the new members continue their business as before except now in a democratic and ethical way. The coop as a corporate identity has a contract with the former soletrader to pay X amount of money each year in order to buy the business from the soletrader. So it doesn't matter that much if the other members fire the soletrader as he will still get the value he put into the business at the point he converted it to a coop, (if the coop fails to pay he can reposses the property in the usual way that unrepaid debts are recovered.) Given that the new members can't steal his capital by firing him they probably won't fire him unless he was a liability and didn't work very well.

[libertarian_4_life]

There is nothing inherently exploitative about wage employment. Earlier in this thread I accepted the concept of "wage slavery", the topic of the thread, as one that sometimes (but certainly not as a rule) accompanies wage relationships.

As I and many other people can attest, one can be employed as an ordinary, wage-receiving employee without being treated as, or feeling like, a "wage slave". In fact, I would argue that in most cases, from the employer's own interests (specifically the interests of the owners, rather than of the managers), treating people as "wage slaves" is counterproductive.

I agree that wage employment is not inherently exploitative. It can be 100% voluntary.
Stated more accurately ...... explotation may lead to wage slavery.

Let's suppose I owned all the land and water around your home.
Via government land (property) laws,
I can make you my "slave" by charging you a high fee anytime you or anyone else wishes to pass through my land/water or through my airspace.

Some people will say .... we need public roads, so that such "landlocking" is not possible. And I would agree. Public roads reduce the likelihood of such occurences.
But why stop at public roads?

Another example ....
Let's suppose I "own" an island. One day, not far from shore, a boat sinks and survivors swim to my island.
Do I have a moral right to force them off my island, even though they may die at sea?
Do I have a moral right to charge a daily fee, for staying on my island?
Do I have a moral right to force them to work, if they can not pay the daily fee?

My point is .... wage slavery is what can happen when an "owner" exploits an unfortunate "non-owner".

Proposed remedy
The poorest "wage slavers" have little or no means to buy capital (such as land) in order to build a home,farm,business,etc.
Instead of buying capital, the wage slaver sells his labor to an owner in order to survive.
The owner pays enough wage to feed, clothe, shelter,etc. his/her workers, but tries to avoid paying enough so that the worker can afford to quit.

To alleviate this situation, I advocate land/water/natural resource distribution/re-dsitribution to every resident person or citizen.
If there is not enough available land (or if someone prefers not to accept land), then compensation can be given.

Fund government with land tax auctions.
http://www.politicsforum.org/forum/viewtopic.php?f=49&t=136073
Any excess tax revenues from these auctions can be distributed back to non-landowners as compensation.

Capitalism can not exist if people are unable to own capital. Libertarianism can not exist if people are unable to exercise liberty.
Under my system, more people would have an actual chance to become a capitalist and/or libertarian.
Capitalism and libertarianism are for everyone, not just for the current owners, or the current favoured social class, or the current ruling class.
If you disagree, then dont be surprised when the poor classes do not vote for libertarian politicans.