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Mondragon Corporation
191–200 of 291 posts
Re: Mondragon Corporation
#192Earlier quoted context omitted.
Is the alternative 100% top-down central-managed solution to ensure no externalization happens ever? In theory that's appealing (especial from the view from Chomsky's academic ivory tower), but then in practice every time it's been tried it hasn't worked well at all. Chomsky is smart, but not very useful because "In theory there's no difference between theory and practice, but in practice there is" - Yogi Berra
Chomsky is anti-centralization, he is an anarchist (anarcho-syndicalist). In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the…
I thought the workers in Mondragon could vote to have the CEO removed. Hence mgmt being under worker's control, ultimately.
I understand that workers also, at times, vote to externalize some costs, as their jobs may depend on it.
Re: Mondragon Corporation
#193Earlier quoted context omitted.
Chomsky is anti-centralization, he is an anarchist (anarcho-syndicalist). In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the…
Surely you would need a lot of rules and enforcement to prevent things simply aggregating?
That's where it falls apart. Systems tend to aggregate to seek efficiencies of scale.
Re: Mondragon Corporation
#194Earlier quoted context omitted.
Capitalism itself cannot solve the problem of externalities. That's what the government is for. I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).
> Capitalism itself cannot solve the problem of externalities. True. > That's what the government is for. False. Government can't solve the problem of externalities either, because government is even more at the mercy of the perverse incentives that create them than free market participants are. There is no "solution" to the problem of externalities, if by "solution" you mean some system we can put in place that will…
> if by "solution", you mean some system we can put in place that will magically prevent them
Only a distributed system like capitalism rises to your bar of "magically prevent[ing]". Centralization is not magic, but when it works, it works. I prefer distributed systems too, but when it's hard to make the right incentivizes, we shouldn't throw in the towel.
Surely the parent post doesn't use a definition of "solution" that trivially invalidates their point. I think you are projecting your own preference for distributed systems as an inevitability.
In fact, I've thought of a "'race to the top' tariffs" system, which does at least create the right incentives between nations. If you are big market (e.g. US) put tariff on the difference between the manufacturing country's externalizes tax, and your own. This holds the total punitive disincentive constant, no matter who receives the revenue. The exporting country is now incentivized to raise their externalities tax so the tax revenue goes to them rather than the importing country. So simple!!
Re: Mondragon Corporation
#195Earlier quoted context omitted.
> Shareholders? The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. > Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of r…
> The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for t…
We're not talking about Boeing, we're talking about economic systems, with Boeing being an example. @jp555's comment addressed economic systems that "force no profits." @spamizbad then states "forcing profits is bad too," using Boeing as an example. My comment clarified that our system (in which Boeing exists) does not "force profits" (as distinguished from @jp555's example of a system that "forces no profits"). Our system allows profit-seeking companies as well as non-profit-seeking companies. The fact that Boeing feels compelled to earn a profit is a by-product of the financing arrangement by which Boeing was created. Nothing about our system would have prevented Boeing from having been founded as a non-profit.
Re: Mondragon Corporation
#196Earlier quoted context omitted.
Surely you would need a lot of rules and enforcement to prevent things simply aggregating?
That's where it falls apart. Systems tend to aggregate to seek efficiencies of scale.
I tend to not agree with this line of thinking. This may be the case when you subject a company to financial market pressures by listing it on the stock exchange, but I don't think it's a natural imperative.
Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.
Re: Mondragon Corporation
#197Earlier quoted context omitted.
I don't get the ecological argument. Small batch local produce has to be quite a bit less efficient than large-scale production. Transportation has to be a small fraction of the total impact?
Someone linked an article below pointing this is an oversimplification, but yes, importing produce from another continent (e.g. California when Spain has better climate for that) tends to be bad.
That's curious... ocean shipping is so massive and scaled so large, I'd guess its cheaper per item than, for instance, your drive to the grocery store to pick up that item.
Re: Mondragon Corporation
#198I thought Chomsky's quote was interesting. "Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive…
Capitalism itself cannot solve the problem of externalities. That's what the government is for. I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).
The classical argument is that when trying to address externalities you can turn to either regulation or strong property rights (if your factory pollutes a lake the citizens using it for drinking water will sue). Regulation can sometimes lead to inefficiency.
Free-market evangelists tend to strongly favor the property rights solution. But one of the interesting things about the property rights case is that it seems to fall apart when both the responsibility and cost are diffuse. Probably the best example would be climate change. It's impossible to address with property rights because there would be so many plaintiffs and so many defendants that attributing who did what would be impossible. Climate change is the ultimate externality.
Re: Mondragon Corporation
#199Earlier quoted context omitted.
Exploiting workers is a negative externality.
No. A negative externality is a cost to a transaction that's not borne by one of the parties to the transaction (and thus cannot be priced into the transaction). "This job really sucks" is not an externality -- that fact is priced into what the worker demands in payment for performing that job. "Building this factory will incerase the risk of Terry down the street getting cancer" is an externality -- Terry is not a p…
This textbook response doesn't address what often happens in reality.
Wages don't always capture the true costs of production. The public burden of the coal miner who gets lung cancer can be viewed as a negative externality.
Indeed, many labor protections in the US seek to specifically address this type of externality.
Re: Mondragon Corporation
#200Earlier quoted context omitted.
> The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets. If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for t…
We're not talking about Boeing, we're talking about economic systems, with Boeing being an example. @jp555's comment addressed economic systems that "force no profits." @spamizbad then states "forcing profits is bad too," using Boeing as an example. My comment clarified that our system (in which Boeing exists) does not "force profits" (as distinguished from @jp555's example of a system that "forces no profits"). Our…
That's my bad, I did misread the chain.