I'm currently part of the administration of a co-op. It's in Portugal and it's a Multisectorial co-op, meaning instead of being focused on one type of activity we do anything as long as we have a member with that skillset. We are an agregation of freelancers and small businesses that go from small scale farming, to web development or architecture. The coop serves as a way to have a lot of the nice things of a bigger corporation like someone to help you with burocratic processes while allowing people to keep their independence. People can be very involved in the decision making or just financially contribute to the central structure. We have both general assemblies where all members vote in a very horizontal process but the day to day work has hierarchies to keep processes going smoothly
The biggest thing I've learned from being part of this process is that co-ops vastly destroys competition among peers and replace that we the mindset of "what's the best way to benefit the collective". Best thing to make it work is that it's not just altruism, benefiting the collective benefits yourself. Kind of like OSS works.
I'm part of Cooperativa Integral Minga in Montemor-o-Novo. We we're the first one in Portugal in the concept of Integral Cooperative (took some inspiration from Cooperativa Integral Catalana). In Portugal there's now a few coops based on the same general principles. Rizoma Coop In Lisbon, Regenerativa in S. Luís, Cooperativa da Terra in Aljezur, A Geradora in Trancoso, Coop. Cápsula in Leiria, Húmus in Madeira (in process of forming), Coop. AlmaOhana in Odemira and Estação Cooperativa also in Montemor. Feel free to get in contact if you want to know more.
I’m also very interested to learn more and also super curious to brainstorm about your governance protocols since we are building a community platform and I wish we support these cases better. If you have 30 minutes sometime, can you drop me an email to mikhail at peerboard dot com?
That is neat, so do members barter between each other? Or would that hurt accounting into supporting the central structure, or does it support direct barter?
Members do barter between each other, and members sometimes organize micro-credits between each other the central structure takes no percentage from those transactions. We encourage them to happen even if they are a bit more work with no moneraty compensation to the central structure. Whatever makes projects and cooperators thrive in the coop the management will very likely support it. It makes the whole ecossystem healtier and gives more reasons for people to want to be a contributing part of it.
We take 5% from goods and services sold through the cooperative to the outside world and that's what mantains the whole central structure.
How does it work from a commitment standpoint? Do you have to give something like a full time equivalent once you're in, or you're free to do how many hours you want (I presume with some minimum) while there is available work overlapping with your skillset?
No commitment. People enter because they are already freelancers looking for more of a business structure or they enter to join some specific project. People manage themselfs either alone or in small groups like for example the architecture studio, or the biocosmetics lab.
People directly earn the money they generate so they choose how much they want to work.
>The biggest thing I've learned from being part of this process is that co-ops vastly destroys competition among peers and replace that we the mindset of "what's the best way to benefit the collective".
It’s high time I stopped reading Medium articles shared here.
I got the distinct feeling I was being sold something while reading it, and the last paragraph confirmed it. It’s filled with vague, corporatey platitudes about ego and altruism, and there’s almost nothing in it about how this concept applies specifically to tech.
The supposed “cons” sound like the ad equivalents of leading questions:
> The relationships in a cooperative are adult-adult oriented
> All of those might be very painful if you’re not used to vocalizing your inner thoughts in non-violent ways
Well jeez, I guess I’ll skip it if I’m not allowed to respond to assigned Jira tickets with my fists.
> I got the distinct feeling I was being sold something while reading it, and the last paragraph confirmed it.
I have this feeling medium is being kept alive on the shoulders of other companies’ marketing teams in an attempt to write thinly-veiled sales pitches disguised as blog posts from a “neutral” 3rd party.
Coupled with the zero-life-experience blogger trope, the signal to noise ratio on medium is practically nil.
The signal I’ve started looking for is an above the fold “minutes to read” stat. Sites, like Medium, that have it are practically all worth ignoring because it’s either astroturfing or just navel gazing.
Absolutely agreed, there's a huge difference between a 5 minute article you can quickly read whenever you stumble upon it, and a 30 minute post (like acoup.blog's excellent articles) that you might have to save to read later.
Co-ops and partnerships work very well for low capital intensity businesses, and coding is a low capital-intensity business in this day and age. It makes total sense that people are interested in such arrangements, it's not just a matter of wishful thinking.
I don't understand... I work as a software contractor in EU. I don't see a single thing I'm missing by not being in a coop. 5% of my income is a lot of money. For that money I can buy all the accounting and tax advisory services I need with enough money left over to get a Wework All Access membership and even then I'd have a significant portion of the 5% left. Why does it make total sense that people are interested?
I would assume that the benefits are in having coworkers that fill in the gaps in your own business skills. For example: finding clients, invoicing, server maintenance, customer service, training, documentation, implementation consultants. There are a variety of job skills that one person will not have or want to contribute 100% of the time that are valuable jobs for junior or more senior coworkers.
If you are paying someone to do any of these jobs, you are doing it out of income that you've paid taxes on. If they are a part of your cooperative then it comes out of the businesses own funds pretax. There are also incentives to share in other resources, such as buildings, child care and other invisible labor that we normally place little value on.
Also, some cooperative companies will only outsource work to other cooperative groups.
Not to mention the camaraderie of working with people with similar goals in a noncompetitive environment where they value your success.
Clients find me, not the other way around. Documentation and implementation are my own lines of work.
I have an accountant, tax advisor and lawyer as subscriptions. I also have a coworking pass. These cost me about 1.5% of my annual income.
Trainings are given for free in coops? I can't imagine myself or my friends working for free, are you forced to work for free in a coop? As in, would I be forced to give trainings too? I value my time too much for this. Of course I do the occasional free tech talk for my friends/the public, but that's not in any way comparable to a "full" training.
> If you are paying someone to do any of these jobs, you are doing it out of income that you've paid taxes on.
No. As a contractor, all of the above are my business expenses (also including conference passes, trainings/certifications, driving to/from the client, all my hardware I use to work etc). Companies and contractors pay tax on profit, not turnover.
> Also, some cooperative companies will only outsource work to other cooperative groups.
Yeah indeed there's a coop like that where I live. They pay like half of what I make to their top guys (I myself am not a top guy; they offered me even less). Not encouraging.
> Not to mention the camaraderie of working with people with similar goals in a noncompetitive environment where they value your success.
I have this at the coworking space - and we don't share any money so there's no chance of any bad feelings whatsoever. I have very bad experience with that, it ends friendships.
Thanks for sharing your experience. I’m not familiar with the space but I wonder if it’s just a matter of elite-ness. Hypothesis: The top 1 or 10 percent of a field are better off in their own, whereas the rest benefit from collective benefits. Another example that comes to mind is Matt Yglesias leaving Vox. He was well paid at Vox but now on his own I’m sure he’s even higher paid and has more freedom etc. I donno just speculating.
>Trainings are given for free in coops? I can't imagine myself or my friends working for free, are you forced to work for free in a coop? As in, would I be forced to give trainings too? I value my time too much for this. Of course I do the occasional free tech talk for my friends/the public, but that's not in any way comparable to a "full" training.
No one said anything about training for free. This was an example of work that needs to be done for a client that you may not want to do yourself. A junior level member of your coop could travel to the client's site and train them on how to use your software, learn from the experience and make valuable ties, while you stay at home and work on more appropriate tasks.
Ah, okay, that makes more sense. Sorry I misunderstood. This is not really something applicable to my line of work (standard software development tasks on a larger project in an agile team managed by the client) but I can imagine some of my friends doing this.
If you're worried about rent seeking wait till you find out how a traditional business works. The owner of the company takes all the profit, and then pays out a small portion of that profit to the workers doing the work in form of wages.
On the other hand, in a coop the profit is shared fairly amongst the people actually doing the work. It's frankly incredibly that somebody thinks this is a worse model of compensation.
The labor theory of value has basically never been shown to work, while the subjective theory of value, however many its flaws, has been shown to work and bring us the world we see today.
It's never true. It's like a broken clock - it's right 2 times a day. When the conditions are exactly correct, it seems like the labor theory of value is true - but it's not. Consider a simple example - food production. Nothing changes about the labor necessary to produce it but that doesn't mean you won't have to sell your produce way under price (or let it rot) if you and other farmers make too much of it.
The question isn't about the amount of labour needed to produce food, it's regarding who collects the profit from the labour that is done. Not sure what point you were trying to make with food production there.
The labor theory of value has nothing to do with collecting profits and isn't concerned with who gets it. It argues that the economic value of a good or service is determined by the total amount of "socially necessary labor" required to produce it. (https://en.wikipedia.org/wiki/Labor_theory_of_value)
My point is that value is actually not determined by "socially necessary labor" but by supply and demand, even within a commune. The food you produce will rot if you and others produce too much of it = it has no value, and nobody collects profit (not even in the form of social capital) because everybody lost any possibility of selling for a good price by producing too much.
On the other hand during a shortage people will start valuing food much more than they previously did, gradually paying higher price as they have less of it - again totally disconnected from the "socially necessary labor" required to produce it.
Most importantly - the value of most if not all things is subjective and different based on time, place, etc. Even within a commune - some people simply don't like peppers, so even though you put a lot of work into them they have no value to these people (which will quickly change once there's a food shortage).
Of course it has to do with profits and who gets it. That's the whole context for introducing the theory of value in Kapital, which one of us actually read while the other evidently skimmed a wikipedia page.
Labour theory of value is not in anyway at odds with the idea of supply and demand. In fact, the whole idea of value in Kapital is derived from supply and demand.
The labour theory of value states that the inherent value of a commodity is directly related to the combination of labour and cost of the machinery needed to produce the commodity. This is what acts as the foundation for the value that the market assigns to the commodities. The market value doesn't just appear out of thin air, it's rooted in material costs of production.
To put it bluntly, you have an infantile understanding of the subject you're attempting to debate here.
If you read the book then you'd understand what labour theory of value is. Your comments make it pretty clear that you don't. You literally don't understand how it relates to market. Kek as you say.
True, in a commune or something like that, it does work. I think though once we hit Dunbar's number, then it breaks down and we need a subjective value based market.
Yeah, subjective theory of value brought us the world where a handful of individuals have more wealth than over half the world population, while the rest live in shit.
Industrialization via the profit motive has been the single greatest lever of increasing humanity's quality of life.
The people who say that the rest live in shit in my experience have never been to a third world country and actually lived there. If they did, they'd realize just how shit the first world is.
As long as we have scarcity of goods that must be distributed somehow, communism only works in theory, not in practice.
Edit: Ah, I see, so you're a tankie who grew up in the USSR yet still supports them. Thanks, I have no need to speak to you further.
> I got the distinct feeling I was being sold something while reading it, and the last paragraph confirmed it.
You mean the last paragraph where they _volunteer_ to have coaching sessions with people? "Selling" usually implies an exchange of money or an expectation of something in return, but there's no product here – the author is offering their time for free to help others start or join cooperatives. Is it fair to dismiss that as "being sold" something?
I think so. Plenty of companies offer product samples or free services upfront. But even if you think the author has no specific “sales” goal with the article, self-promotion still seems to be its main objective.
> Plenty of companies offer product samples or free services upfront
Sure, but a startup using VC money to offer you something for free is very different from "I will personally volunteer to help you".
Also the entire point of sharing articles is that they're being read, so there isn't any way to avoid implying they're doing "self-promotion" – should people just stop writing and sharing articles?
Sometimes people aren't after some self-serving goal, and I think it's a little dangerous to think everyone is – charities exist. Cooperatives are more ethical businesses because they build democracy into their structure unlike traditional businesses, why would I assume whoever is talking about them isn't just hoping to see more of that in the world? Or do we reduce that to "that's just the author being selfish again"?
I might be inclined to agree with your points if the article weren’t mostly fluff, as stated in my original comment. The reason I read it was because I was genuinely interested in how this specific approach works in practice and how it applies to tech, but there was little actual information and a lot of what seemed like corporate cult-speak.
Perhaps the article is devoid of insightful content to such an extent that we were both forced to interpret its author’s motivations based on our preconceived notions of the idea they’re discussing. You believe they’re genuinely seeking to improve worker’s rights, and it just looks like another hustle to me.
One thing I can say for certain is that I did not get much from the article, and I suspect there will be comments that are shorter yet far more insightful than the article a few hours from now.
I think you're biased against cooperatives which made you uber-critical of the article. I did not find it to be "fluff."
Many of the engineering blogs shared on HN have a "by the way, we are hiring"[0] stinger, or a promotion of the author's startup's product as a solution to the engineering problem described by the post, or if its a benchmark, then the entire post would be promoting their product as the superior product. This article no worse than others wrt self promotion.
0. Maybe not so much now, but perhaps we'll see an uptick of "I'm looking for my next move, if you're hiring, contact me."
Another issue with Medium is that you earn money for your content. The problem with this is it attracts a large bunch of people who have extrinsic motivations. When your goal is monetization, you tend to resort to any trick in the book that will move the numbers.
I find non-monetized content generally to have higher quality than monetized ones. The author is intrinsically motivated to produce quality and there is no other goal other than to share what they have with the world.
A not insignificant portion of HN posts are selling something and not all are related to tech. It's worth having a similar skepticism for other posts, it's eye opening
I used to work for the post office in the early 90s and a couple coworkers got into one of these visible frustration violent communications with the one who started the argument getting two weeks paid leave for ‘stress’.
> Decision-making in cooperatives can be very daunting for beginners.
Having 13 years+ of experience in cooperatives I can tell you that it is daunting even for old-timers. We started off with most decisions being made in weekly meeting (that sometimes dragged on for most of the day), and ended up with having monthly meetings for the large decisions, but weekly meetings in smaller groups instead. In short, meetings everywhere, about all things large and small. Meetings about whether to have consensus or majority rule, about whether the principle that everyone needs to follow a decision is sound etc etc.
Personality might have something to do with it. But making fast about turns that you sometimes need to do in a business setting is nigh impossible, which is actually hazardous to everyone in the cooperative. This might even be the primary reason cooperatives (being an old idea) hasn't survived other than as a fringe phenomena.
This is a common mistake, actual functioning cooperatives operate like any other enterprise with an set executive structure a CEO and a board of directors. The big difference is the ownership model so shareholder meetings are basically employee meetings so a successful cooperative simply runs like any other business just one where the employees are treated as the shareholders they are when it comes to decision making the bad ones are the ones trying to run like a commune and reach a consensus on everything.
Startups that give out shares are rare. Startups tend to give options. Options take years to accumulate, and don't give any significant rights by themselves, such as voting or profit share. Employees can typically only afford to exercise options at key company financing events, because they have to sell many of the resulting shares to cover the cost of exercising and cost of tax.
Most startup employee recipients of options never get to exercise them for various reasons, often unable to due to cash flow or restrictive timing reasons, or because they aren't profitable (the employee would take a large financial loss). Many of those who do exercise the options get their shares after leaving the company or they're about to leave. And finally, of the small subset of employees who have shares as a result of exercising while still employed, the number of shares they have is a tiny percentage even in aggregate, so they have effectively no influence at shareholder meetings, if they choose to attend, and if their shares have voting rights which they don't always have.
In co-operatives, the majority of shares as well as voting rights are usually held by a high proportion of employees, so that's a completely different dynamic. As well as voting rights, it means any profit distributed as a dividend tends to go to employees as well.
Outside of startups that might not amount to anything never it’s a pretty poor habit to sell shares to cover the cost of tax. It’s nearly always more beneficial to finance the tax due through other means including taking a loan even today after the base interest increase.
But the rest is more or less correct even when the options mature and you can exercise them you usually do not get voting rights it’s nearly always restricted shares.
Also note that unlike cooperatives there is also quite often restrictions on how much stock you can own as a regular employee in a public or even private company the employee shares in cooperatives usually have a different legal framework than regular company shares.
One of the key differences is quite often as someone already mentioned is that shares in cooperative grant a single voting right to a shareholder rather than per share.
You can also have some more complex tiered holding structures such as where all the employee held company shares are issued to a single entity that represents the employee shareholding collective and that entity then grants a single share to each employee, alternatively other models than direct shareholding can be used such as trusts where the trust holds the company shares and the trustees get voting rights.
In a startup, employees usually don't really have much influence even if they have shares, because each successive funding round dilutes the existing shares.
Also, there's some significant differences in how shares work between cooperatives and corporations (at least in Germany, where I live). In a corporation, you get one vote per share, and shares can be freely traded once given out. In a cooperative, you only one vote per shareholder, no matter how many shares you hold, and shares cannot be traded. You can invest into the cooperative to get shares, and you can return your shares to get your capital back, but the cooperative gets final say in who gets to hold shares.
That's an odd critique considering coops exist to solve the friction between unions and businesses by building the democratic control into the business itself, avoiding the need for a union.
Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you? Coops come at that from a different angle: you get democratic control, straight up. Don't like your leadership if you choose to structure the business that way? You can actually vote them out of their role.
"Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you?"
Even when you manage to form a union, companies have ways of screwing you over.
Case in point was the recent successful unionization of a Starbucks location in Seattle you might have heard about on the news. Starbucks' reaction? They just closed that location.[1]
If you have broad support from the employee base, “they” can’t block a union certification election. If you’re having trouble forming a union, you’re probably struggling at the “get employees to want your union” step in the process.
You should let Amazon, Starbucks, Walmart and similar know this. Their union busting tactics are widely documented (including shutting down locations starting to form a union).
They do know this. Many of their tactics are specifically directed at “make the employees not want the union”. Some of those tactics are under-handed, even despicable, but it’s safe to say that they know this and act in accordance.
Firing everyone in a store in the process of unionizing isn't "make employees not want the union", it's retaliating against those that do and instilling fear in the rest.
You might not like the methods (and in some cases, they are not legal), but I think that’s exactly what it does. Fear makes (some) people not want the union.
Firing pro-union employees also obviously directly reduces the number of employees who are pro-union.
Normally with union done right, you would have voice in management. Problem is all you see is non-working unions ( union busting etc also from sibling comments)
Thats why I commented union done good from the beginning.
There are coops where a union acts as a VC of sorts. Unions are supposed to take over bussinesses and turn them into Coops. Workplace democracy is always the end goal, decent compensation is just a step along that route and arguably even at times a distraction.
My personal theory (I don't think it is very popular amongst my fellow coops) is that co-ops need well defined hierarchies that have the power to take a lot of decisions and the dutty to report on the decisions taken and the resoning behind it but with that also well defined rules to make sure power changes hands via democratic processes every x amount of years.
Your personal theory has what backing? Care to share why you think hierarchy is necessary?
The only semi-valid reason to have a hierarchy in a cooperative is to optimize voting and reduce meetings. That would be less necessary if your cooperative runs in a more digital way and concerns of various members are known ahead of time.
Otherwise hierarchical cooperatives can be literally corrupted by the hierarchy or sold out, turning them into an almost regular company with board of shareholders.
There's something to be said for representative democracy. I want to work in something like a cooperative, but I don't want to be constantly engaged in managing it. I'd rather assign my vote to someone who seems like they have their head on straight, and get a monthly email that tells me what's been going on lately.
Maybe like how pure hierarchical capitalists need a fairly large financial industry to handle the movement of wagers and prizes between investors and producers, a flatter system might need a big and active enough group of secretaries/reporters to keep everybody so informed about internal decision-making and events that normal members don't feel like they have to attend meetings.
It's really a privilege of power not to have to explain yourself. A flatter system might have to dedicate a standing portion of its efforts to explaining itself.
> But making fast about turns that you sometimes need to do in a business setting is nigh impossible, which is actually hazardous to everyone in the cooperative. This might even be the primary reason cooperatives (being an old idea) hasn't survived other than as a fringe phenomena.
There are large cooperatives, but only in "solved" industries so there aren't many hard decisions left to make. Programming is not one of those fields yet.
You think that there are no hard business decisions to make in established – i.e., non-software – industries? It's just smooth sailing along predefined routes?
Berkeley which was a major area for co-ops have almost none left. My family was part of a co-op. Challenges:
Often very political - seen as a good thing but can add conflict (ie divesting/not stocking/opposing apartheid Israel while some members are Jewish). No x because y etc - repeat for many topics.
Decision making - both hard and strong feelings internally- can lead to claims around “violent” communication, micro aggression, privilege, disrespect etc etc when there are disagreements. Coops will say a good thing, but I think can wear people out sometimes.
Accountability/performance mgmt. not always, but sometimes difficult to take action in this area - maybe a good thing - goal is to work together.
One interesting variant are employee owned businesses that do not run as co-ops. ESOPS etc. I’m not an expert at all, but I think there are a number of really industrial scale businesses that have this structure successfully.
I am unsure if fast turns is a thing of hierarchical organizations, especially the successful ones, what I see that the bigger (some say more successful) it is the slower it turns. Period. Also it's will to turn is lower by getting bigger, trying to stick to past success and methods as much as pussible because every change is constly and every change is risky, and the members don't want to risk the livelyhood of their family, rightfully. When have a choice then will rather not turn but go straight when it is big. I admit some big turn very quick, like Elon Musk with Twitter, but thats the other wrong end of the scale, finding the balance is not easy and most of the time unsuccessful except for a short period. And those could be attributed to luck in many many cases too. We remember the success stories not the failures (except the huge ones) and being sentimental with those being successful and gone. Big organizations' success come and go, rare to shine more than several decade and could die easily if the decisions are wrong (or forget to make decisions). How is their decision making is better then if they go away or fall? They grow quick, then comes an other due to the constant need for competition and the old one goes or falls back. The need for quick decisions and neckbraking pace is actually fuelled with quick decisions and neckbraking race of the organizations themselves and call it business setting if that was not their making but some kind of external condition. Also not always (or rarely) turn to a direction that is good for a society and not just for those very few being in the position of making the decision (mostly it is coincidental or side effect then). Also success of a hierarchical organization does not necessarily mean it is making any good for customers and people but just being big enough to force its views and interests on others. That's not really success and good then just a social form of violence.
Decisions are not easy when it affects lots of people and that's why those should be made as carefully as possible in the settings available and we know from social studies, it is proven, that individual decision making is quick, group decision making is accurate, in overall. For the group of people in the long run group decisions was better. As a side effect it was not making life unbearably quick by themselves and may eliminate the need for some of the quick decisions (some, as there are aspects outside of human groups that mandate actions, those cannot be eliminated).
My view (not OP) is that Elon will break the company and get it to fail.
He does not understand that Twitter is an ad driven business which also means PR is critical or you don't get advertisers.
Most businesses that tried to pivot from ad driven to subscribers have failed. One that tried to do so in so dramatic a way? Never heard of it.
Elon is not doing a simple management style change, he's changing everything with next to zero money. Unlike a startup, a company the size of Twitter cannot compromise what is feeding them without failing quickly. A startup can survive on small VC funding for a pivot, Twitter eats millions of dollars to just operate.
A badly run cooperative fails because the people involved don't take it seriously, or lose their alignment and break apart. A well run cooperative fails (or succeeds) for all the usual reasons any business does. A well run coop ends up feeling a lot like a small business with a traditional structure, and an owner who respects their employees and doesn't act like a tyrant. That's cool, but it's a lot of work to reproduce the performance characteristics of an existing technology.
I've been involved in many sessions where we tried to experiment with the structure and mechanics of how a cooperative works, in order to address what seem to be persistent shortcomings in the model. Nobody has really cracked the code yet, in my opinion.
When it comes down to it, having done both, I think I'd rather work for a good boss at a small company than be in another coop, even a good one. I want someone competent to do all the behind the scenes work, and make most of the decisions, asking me for my opinion on the things that affect me directly or for which my expertise can provide some direct insight.
The advantages: If I don't like the company, I can leave without feeling like I've failed: there are no non-work relationships, or sense of ownership holding me there. I don't have to attend additional meetings. I don't have to look at budgets. I don't have to be on a committee or working group. I don't have to pick a side and convince the other side of anything. If the company makes a bad decision, I say "ha ha, those morons did it again" and keep on doing my job.
In short, as I have come to identify less with work, I have become less interested in the cooperative model because the value of ownership has gone down.
Some of the worst politics I ever saw were in nonprofit entities.
Primarily, it was because some with dominant personalities made decisions that were not rational, informed, and or fair. The faithful talent tend to get hurt the most, as they invest more resources being driven by their ideals.
I am all for profit sharing, but someone has to take responsibility for risk mitigation. The worst firms are ones where every narcissist thinks they are the CEO. The more money at stake... the quicker things tend to turn nasty.
Cooperatives aren't nonprofit entities – they can be, sure, but many of them are profit-driven.
The claim that cooperatives act irrationally (and the implication that they're less efficient) requires some factual data to back that claim up, otherwise it's just that – an anecdotal claim. Here's academic data to dismiss those claims:
> Labor-managed firms are as productive as conventional firms, or more productive, in all industries, and use their inputs efficiently; but in several industries conventional firms would produce more with their current input levels if they organized production like labor-managed firms. On average overall, firms would produce more using the labor-managed firms’ industry-specific technologies. Labor-managed firms do not produce at inefficiently low scales
Source: Fakhfakh, F., Pérotin, V., & Gago, Mó. (2012). Productivity, Capital, and Labor in Labor-Managed and Conventional Firms: An Investigation on French Data. ILR Review, 65(4), 847–879. doi:10.1177/001979391206500404
Similar results were also found to hold in an older study by Craig and Pencavel in 1995.
> Cooperatives aren't nonprofit entities – they can be, sure, but many of them are profit-driven.
A tech consultancy cooperative works exactly like most non-profits: they don't post a profit and distribute everything as salaries. The "non-profit" part is for the entity, not the people running it.
Many have taken issue with William Forster Lloyd's assertion: "tragedy of the commons is a situation in which individual users, who have open access to a resource unhampered by shared social structures or formal rules that govern access and use, act independently according to their own self-interest and, contrary to the common good of all users, cause depletion of the resource through their uncoordinated action in case there are too many users related to the available resources."
Rule by consensus is messy, inefficient, and ultimately prone to failure in commercial settings without slave labor.
I am not suggesting you are wrong for interjecting off-topic straw-man arguments, but your naive input lends credibility to the observations on human nature.
>I am not suggesting you are wrong for interjecting off-topic straw-man arguments, but your naive input lends credibility to the observations on human nature.
I find that comment odd, given that they cited papers that directly spoke about the functioning of coops. Conversely, your comment mentioning the tragedy of the commons seems very off topic. Could you explain more how it relates?
In this case YC is a shared resource, and two accounts segued a thread about personal experience in an attempt to defend an unrelated issue they presented themselves.
Again, if you have specific examples of functional firms outside subsidized communist regimes, it would be more relevant.
> In this case YC is a shared resource, and two accounts segwayed a thread about personal experience in an attempt to defend an unrelated issue they presented themselves.
I'm afraid I don't follow. The commenter above cited papers concerning the topic (coops/labor managed companies). You made a comment about personal experience (nonprofit politics) and then also equated it with the tragedy of the commons (which seems as if you conflated nonprofits with coops and the commons- i.e., three things that appear adverse to private profit). It seems as if you are shifting the goal posts now in a way that means we aren't going to understand each other, which is a shame.
Most coops tend to be registered as nonprofits in my part of the world for tax reasons, and others have an elected board which distributes earnings though a share structure to members.
You have failed to provide data to explain the context of your input. Thus, still remain off-topic, and orthogonal to the line of observations corroborated with other members experiences.
As initially inferred, unaccountable individuals that normally get away with cowing people tend to destroy shared environments which should be otherwise sustainable in theory.
I agree without relevant data your perspective may be beyond comprehension.
Off-topic Rhetoric about productivity is unrelated to observations of political nastiness from covert narcissists responsible for polarizing toxic environments.
Talented people with options tend to identify such situations, become disenchanted with being exploited, and eventually leave.
Less Off-topic, as some political theories mistakenly assume theoretical efficiency in control of supply and demand resolves most problems. For these individuals Compliance and Conformity definitions are conflated (which is factually incorrect.)
That is the surprising part... it is not that simple. It does however allude to an inevitable decline under theoretically ideal living conditions, as rates of aggression and stupification increase.
You may be amused by the highlights from the paper, and how it closely resembles numerous punitive subcultures. =)
I've been interested in forming this kind of organizational structure for a while. However, I have doubts about how to ensure sufficient levels of trust between individuals involved, given the different dynamics in terms of monetary compensation and "hiring processes" compared to traditional top-down companies.
In that light, I wonder if perhaps a better alternative is for each individual to remain independent as their own one-man company in a freelancer kind of way, and instead to focus on streamlining the process of establishing ad-hoc micro contracts whenever collaborative tasks are to be undertaken -- while still keeping the community aspect of a cooperative in place somehow. At the same time, I guess the reason this isn't done more extensively, is simply due to the overhead of having to reach a consensus of the worth of contributions on a task-by-task basis...
Trust is built over time. Specially on the trenches when dealing with difficult situations. The initial parts of a coop, need a little bit of trust but mostly people that can align their self interest with a collective interest.
I've worked on this idea too, except a little inverted. Everybody is a full member of the coop, but those who bring in more earn credits which can be used to fund new projects or bump up salaries to a point.
You don't need to reach a consensus, you can just have an internal marketplace, like kickstarter. If you want something done, you can help fund it, perhaps getting some benefits in return, like a best-effort ROI.
One difference is the reduced friction of starting new projects. Starting a new company now is major task, from legal to funding starting salaries to developer setup, but in a company you have everything ready to go.
Some other differences are:
1. Salaries are limited, so hopefully more money stays available for new projects.
2. All the source code, docs and databases are shared.
I’ve found the comments on this article interesting partly because of the discussion of specific implementation details without bandying about broad bucket terms like “capitalism”.
So maybe you can be more specific and avoid trigger terms like that. What’s wrong with having a coop that still rewards for performance?
Tried to found one 25+ years ago. In the end not enough people were left of those initially interested and we founded a startup. Should have gone through with the cooperative even with 5 people.
The startup went bust during the dot com bubble bursting when our series B fell through (like everyone else). I think a cooperative would be more future proof and not having a binary result.
In general I prefer cooperative work and have experienced too much antogonistic work in startups.
Cooperatives have a higher survival rate, both in general and during crises.
> A 2013 report published by the UK Office for National Statistics showed that in the UK the rate of survival of cooperatives after five years was 80 percent compared with only 41 percent for all other enterprises.[5] A further study found that after ten years 44 percent of cooperatives were still in operation, compared with only 20 percent for all enterprises.
> A 2012 report published by The European Confederation of cooperatives and worker-owned enterprises active in industry and services showed that in France and Spain, worker cooperatives and social cooperatives "have been more resilient than conventional enterprises during the economic crisis".[47]
Weirdly most large companies are surprisingly similar to co-ops. No, seriously bear with me.
hierarchies replace meetings - but there are still awful interminable meetings because agreement still needs to be reached because work is too complex to allow for total command and control because management will screw it up
salaries are held down for the good of the organism (try outbidding one line of business for a really good person or team and see if that's allowed)
the failure point is equitable sharing but if you took all fortune 500 companies and allocated shares to employees it would be hard to tell the difference. Especially as the managers would be up for election - you tend to get that when your employees own the company.
I've been looking for something like that for a long time. I still remember someone remarking to me at Schmoo that one day I'll need a "real bank" rather than a credit union, and how cold they got when I replied "Well, I've got savings, checking, they give a good rate on home loans, and while you can't beat the market I'm getting about 9% on my index funds. Other than help you cheat on your taxes, what specifically does Chase Manhattan do that [redacted] does not?"
He replied "Things like that are why you'll never find a real job." and stormed off.
(I was trying to escape my PhD at the time, but the world being what it was in the Summmer after Snowden, somehow the only offer I got was a K Street NGO, and absolutely zero companies that would pay me a fair wage for my labor.)
Anyways, if anyone is looking for something with information security experience for their co-op feel free to reply -- I'd love to log out of this nym, which was supposed to only last for a weekend in Las Vegas, forever, but I can not do that until I complete my... mission.
I'm happily employed but I still want to keep an eye out for interesting developments in the tech coop space for AI. The field being what it is these days, N people sharing knowledge, code, and (as permitted) data could handle N similar applied AI projects much more easily than 1 person could handle 1. Are there successful examples of this model anywhere?
Not in the tech field but in the consulting space, both Crisp https://dna.crisp.se and Enspiral https://enspiral.com came up with interesting organisational structures that they've extensively documented.
The fact that enspiral keeps coming up as an example tells me that doing this right is really hard; if it were easy there would be more examples people would mention, no?
edit: I hope it's clear I'm not trying to diminish the efforts, to the contrary!
Here's also an interview with Richard Bartlett on the matter:
I think the difficulty in finding other examples is reflective of the "emergent"/"meta modern"/"systems thinking" space being extremely heady to this day. The people there are good at conceptualizing how to maintain a well running group horizontally, but growing one anew requires a different set of skills and traits. Chiefly knowing what's important right now, whereas the emergent thinkers seem to get lost in the weeds of their thoughts and big words.
That field is also, in my humble experience, in a bind. Very few people outside of the coach/consulting sphere seem to talk about this as fervently as they do. I think mass adoption will require the concepts to be attractive and simple to people who may not be ardent supporters of the cause quite yet.
There's also a whole contingent of people who have built orgs that already do this, they just don't advertise themselves and do their work.
I think the next step is to deeply integrate the concepts of Enspiral and such into organisational design tools. Something like murmur.com but with a super low conceptual barrier to entry, that makes it obvious what the next distributed leadership shift is for a given group. That's what I'm developing, if you're curious contact me :)
I'm going to counter this a bit -- if most of your coworkers want you gone, do you want to work there? Does it make sense to continue or would staying just mean continuing a toxic relationship for all parties? I think this just formalizes the quiet grumblings of people who who think "how is x person still here, they don't carry their weight" etc.
I think a more important concern is how does an org ensure that people remain tolerant and accommodating (both in legally required ways and in ways that expand your views and ideas) of people that may not mesh perfectly? I don't think a "divorce" of the org should be frowned upon and I think many orgs ought to codify how they sever to account for the possibility that people don't agree. I don't, however, believe that it's good to avoid conflict and sever every org over every meaningless spat.
> I'm going to counter this a bit -- if most of your coworkers want you gone, do you want to work there?
There are two things here, "competent", and "nice to work with". I've met co-workers that are perfectly nice people, I thought they do shit work but I wasn't the one paying them so I didn't really cared if they stayed working. Yeah they are negative for the company but I personally don't care, more than that, working with pleasant people is worth more to me than company being that 0.5% more efficient by not employing them.
That does shit a bit in coop as your share in profit grows when someone bad at the job gets fired.
> I think a more important concern is how does an org ensure that people remain tolerant and accommodating (both in legally required ways and in ways that expand your views and ideas) of people that may not mesh perfectly? I don't think a "divorce" of the org should be frowned upon and I think many orgs ought to codify how they sever to account for the possibility that people don't agree. I don't, however, believe that it's good to avoid conflict and sever every org over every meaningless spat.
Yeah I can imagine that being even harder the more interconnected the org structure is, people are naturally tribal
So, I think your first point is something that still works with coops, but you have more ownership, so you have a greater say in whether or not somebody pleasant stays or somebody efficient stays. I think either are possible outcomes in coops depending on who is there.
For your second point, maybe that's okay? I think you're right with the tribal nature of people -- so if teams disagree, maybe the org isn't healthy and it's time to form two healthy orgs as part of a codified severance that doesn't result in layoffs or bankruptcy. I think the reason they don't is its expensive and difficult because you have to hire lawyers to figure it out after something is wrong. If tribes are mature enough to disagree and coexist, I'd call that healthy and worthy of continuing if both sides value each other.
I'm not sure many orgs codify severance. Typically this is something that partnerships account for but not corporations - corporations just fire people.
True, but coops are also more selective about firing and hiring. So if you're a bad fit, you're less likely to end up in a coop, and if you do end up there, you will have more stable employment because coops generally don't fire people during crises, they collectively cut their salaries by a certain percentage, or give up yearly bonuses, and when things get good again, they reinstate their old salaries or bonuses.
FWIW I'm starting a Mutual Benefit Corporation. (It's non-profit, but not a charity.) It's not a coop, but the board works by a Quaker-inspired consensus model (rather than Robert's Rule of Order or something like that.)
I realized that I didn't want to start a regular startup. I want to do business, but without the pressure of maximizing profits.
We're going to do things like: create extremely simple and elegant computer systems; build robots to collect litter and clean up the Great Pacific Garbage Patch; acquire land and create parks that double as agriculturally productive "food forests"; build fancy hich-tech ecologically-integrated homes and shops; etc...
(If you were to trawl though my comment history you'd find me yammering on about all this for years now. I finally got my hands on a tiny bit of capital. In a rocket metaphor, this is ignition and liftoff. The engine is roaring and I'ma crack the sky.)
The article is ok doing the questions if you wants this or this and if you would like to work or build a coop if you wants based on that.., and the situation that you has been fired.
Anyway it is very naive at least.
Where the clients come from?
If you has been fired, look for another job.
If you has been fired and you were working with other 10 people that are skilled, and you like to work together and you knows someone that want your skills or you know how to sell yourself and you wants to take your own decisions as a group (like in a pirate boat), then yes, a coop is a choice.
It is not the panacea, it is hard, you will deal with things than never before faced, and is not like you are with people to face that together, you are alone together to face that. I talk for myself and coming form IT i hate bourocracy. And you must to deal with that every day, or at least you must to know that some people must to deal with that, someone. It is a must. Spoiler: you can hire people to do that for youyou, but the reason you build a coop is that you are a worker and you wants to participate in the board. Both.
A coop is not the answer of your lack of employment. It is the answer to deal equally with a capitalist model, inside the capitalism.., something like that.
Anyway, I love coops, the trustworthy level you needs, the equal vote for decisions you have, it is your company, you will take care of that. But everyone must to be in the same boat.
No, if you has been fired look for another job. A coop needs more from you than that.
I'm actually part of a founding team of a for-profit tech & other consulting cooperative. Not because of any altruistic or idealistic thing, but because we have a good team that has fantastic ability and wants to try doing some independent work, but having shared systems, and a centralized umbrella to do C2C under is nice.
I have worked in a consensus environment and I know it can work. The concern I have is when it doesn’t work.
It doesn’t take many sneaky sociopaths or psychopaths to subvert a system built on assumptions of good faith and good will. And even among good people, strong visions arise which may clash with other strong visions.
I need to know there is a clear method of resolving conflict, otherwise I am confident that all those smiling people are going to be carrying concealed knives.
I helped run a housing coop in the US several years ago, not something that I ever thought to put on my tech resume, but I'd be interested to hear if someone wants to start a digital coop near me, I suppose..
I like the idea of a co-op, but I'm always worried about "in a perfect world," not happening (like Communism sounds like a great idea, but human nature screws it all up).
For myself, I'm not competitive. It's a life choice. When we compete, we win, and winning always means that someone else loses. I've spent my entire adult life, in an environment, where I help "losers" to get back on their feet, and it has had quite an impact on me.
Nowhere did he mention salary levels. The main reason we work is to make money, if worker cooperatives makes you less money then that would be the biggest reason to not join one. I really doubt there are many cooperatives paying more than FAANG, so why not just join one of those instead?
Regardless of the commercial success of coops, your premise that the main reason for work is money does not hold up to scrutiny. If merely adequately compensated, money turns out to be really low on the list of things that actually motivates people.
I see this claim a lot in different contexts, and personally have never quite understood who it really talks about.
It cannot talk about everyone, because there are many different kinds of people and work sectors. I'd expect the motivational priorities to exist on a continuum, on which some people are more motivated by money than others. Also, the "adequate compensation" varies from person to person; some are happy with some level, some are never happy.
I mean, I find it extremely hard to believe that things like, say, "respect from co-workers" and "interesting work tasks" would factor in as the primary source of motivation for e.g. anyone working a low-paying job and living from paycheck to paycheck, regardless of who exactly (worker, employer, state, someone else) thinks the compensation is adequate. In contrast, for someone who already possesses a hefty surplus of money, obtaining more money probably plays a smaller role in the overall motivation.
However, none of this means that it's generalizeable to say all working people are not primarily motivated by money (or are primarily motivated, for that matter). One could just as well argue the opposite: (for some people) money turns out to be really high on the list of things which motivates them. Whichever way, it still is weird to claim this as an absolute, applying to everyone.
To put this into a more concrete context: a C-suite executive of a Fortune 500 company might say "money is not my primary motivation, energizing coffee machine discussions, personal fulfillment, yada yada" -- they already are on a level with plenty of material wealth and opportunities for recreation. In contrast, a single parent sanitary worker is unlikely to claim motivation comes from "I'm energized by the interesting work tasks" or something else than money; certainly they are motivated by being able to pay rent and buy food for their children and would rather have more money than less.
You see it a lot because there has been extensive empirical research that led to this conclusion, which does get summarized in discussions to a point where nuances have been lost. If you earn a really low wage, a little bit of extra money buys a lot of happiness. If you earn quite decent, there's a point it doesn't buy more happiness at all.
For C-suites I imagine money is more of a symbol for power and prestige, though I know little about it.
And yes, everybody is unique and all that, but also probably not as special as they like to think. Social research is never generalizable to a point where you can say: all people are like this or that, nor does it have to be to make an interesting point. I also didn't qualify the statement in that way, because I don't know the numbers by heart. But I remember reading from the actual research that there was a large difference in what motivates people (it was not equal as you seem the suggest) and salary was quite low on the list.
The C-suite probably does it more for power, influence, impact than the money. Of course it's nice to have some more money, but that's not going to meaninfully change your life at that point.
Of course if you don't have enough to live by, the main goal is going to be to earn more or just to survive
Past that, more money helps remove day-to-day problems in life, at various levels. But it becomes less important than other factors like having a healthy and meaningful life. I think it's assumed that the generalization applies to that level.
Okay but coop also doesn't automatically mean your happiness in work will grew.
Some people will be perfectly happy working in a team with manager shielding them from most of the office politics vs pretty much having to take part in politics in coop
If this is true why do well paying companies have their pick of employees and less well paying ones have to take their left overs? I exaggerate for effect but most companies don’t have anything like an attractive mission so they need to compete on pay, somewhat on benefits, but overwhelmingly on pay.
The well paying companies have no trouble hiring someone good, but I wouldn't say they have "their pick" of employees. There are a lot of people out there who politely decline or ignore every approach from FAANG recruiters, for example, because the mission or company are unattractive and high pay doesn't make up for it.
So from a statistical perspective you can say that paying well means they have a lot of people to choose from. But some types of mission are greatly affected by the few particular people who are really specialised or inspired in some area or another, and those people aren't always willing to give up their personal dreams to work for an unattractive company just for a larger pay packet.
People differ, not everyone wants to work there. Also Goldman & perhaps not Google but Amazon have infamously high churn - suggesting to me the money's not enough to stay (maybe could never be) vs. next best, so they move on now they have the badge for their CV.
Because in the current climate that's not a sure thing..
If FAANGs* remove themselves from the equation due to hiring freezes or redundancies a lot of people will be left earning below FAANG pay in a non co-operative environment.
It is proposing joining a co-operative as a possible alternative to that.
That, and it's not always about the money. It's surprisingly rewarding working outside of monetisation of attention.
Co-ops are in the first place about shared ownership which is a big help in bringing meaningfullness to the work one does. If the amount of money earned is the biggest motivation then I would say a cooperative is probably not the right fit in most situations.
There's no extensive research on this topic. I really doubt coops are paying more than FAANG and if the only thing that you're after is money then coops are surely not your thing and that's OK ;)
In tech though, money is not the main unique value proposition and I would suggest getting curious about investing in happiness[1] so one can increase it's baselines[2]
Working at Google for a few years made me lots of money so now I don't need to work for many years. Working a lower paid job means I would need to waste more time working and less time doing what makes me happy.
I have the money and left the shitty organization that produced it, and now I don't have to work, and find after some time of happy relief, all my hobby interests do not provide enough sense of purpose.
I will not voluntarily go back to a bad work culture, nor just be a free volunteer somewhere, and this co-op idea sounds very interesting now.
If it can pay even merely acceptable, then it would not be wasting time to have been doing that all the time, if the sales pitch is at all true.
I never chose to work in the huge shitty company, I was working in a small but continuously successful company that was sold to the big company. For 20 years I was perfectly happy making good but not faang money, and I would have loved to just keep doing that forever. (and the big company didn't even pay well, my money came from being a part owner and got part of the sale price)
There is always a chance to find a good fit and a good culture like that by specifically looking for smaller normal companies I suppose, but it seems to be uncommon. I think I just had a rare good gig.
But my rambling repetative point again is just that it's not wasting time to make a bit less such that you do have to keep working at something useful, because now that I don't have to, I want to. The daily life does matter more than the cash, even if the cash gets to the point where you don't have to work at all. I had a good daily life and a good sense of worth and purpose, since the company did upstanding boring but necessary and useful to society back end work not just any scammy way to extract cash from some process, and my part of that work was interesting, required me to be good and clever and thoughtful, and was appreciated and respected.
I don't have to suffer the bad parts of work, but I also no longer have the good parts of work, and even working on open source projects doesn't replace it.
Maybe this co-op idea is a way that more people can have that ideal life I had instead of just me being very lucky. I'm interested in it now let alone as my 25-years-ago self who just needs a job.
I think coops are meant to be the thing that makes you happy. Obviously it's not for everyone, but a lot of people really want that sense of community.
Why don't we all just join FAANG and make the big bucks? That's kind of a ridiculous statement on its face. There are multiple reasons why someone may not want to work for a FAANG company.
Autonomy, real ownership, democratic decision making, profit sharing, etc are all reasons why someone would want to join a cooperative.
As an employee, you are at the whims of your employers when it comes to something as important as the way you're able to support yourself and your family.
I agree it should've been added to the list, but you might not like the form it would take: "Are you a moneygrubbing asshole who's only concerned with compensation? Maybe a co-op isn't for you. Go work for an oil company or something instead, you fascist."
The biggest thing I've learned from being part of this process is that co-ops vastly destroys competition among peers and replace that we the mindset of "what's the best way to benefit the collective". Best thing to make it work is that it's not just altruism, benefiting the collective benefits yourself. Kind of like OSS works.