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Mondragon as the new city-state

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Re: Mondragon as the new city-state

#51

Post by abeppu »

drewmcarthur wrote: post #35
abeppu wrote: post #25

Earlier quoted context omitted.

I can kinda see how one can argue that this is a feature rather than a bug, but I still think this points to the more distinctive feature in these coops being democratic governance of workers rather than ownership. I own shares of past companies I've worked at, but I don't have any representation in how the company is run. It doesn't matter if my interests have diverged from current workers, because I have no influen…

> democratic governance rather than ownership yes and no, i’d call the distinction collective ownership. you can sell your shares (by quitting), or you can stay and participate democratically. but you can’t do both, and that protects your say in the company, preventing investors from overruling worker-owners. > i have no influence neither do the current workers. the issue isn’t retail investors, but the ones with boa…

I think we're roughly in agreement?

Any organization that arranges for its workers to govern it has some organizing document that describes this structure. Any organization that arranges for its workers to become owners must pick mechanism for this to happen. My view is that these can be basically independent choices:

- A firm can pursue a profit-sharing-for-current-workers approach as described for Mondragon, or can issue RSUs or options ("real" and transferable ownership)

- And regardless of what "ownership" vehicle they pick, they can still be organized to be democratically governed by its workers (establishment of which need not be dependent on any stipulated "ownership"). I.e. your organizing docs can describe a board composed of current employees, elected by employees, etc.

I am skeptical of the claim that profit-sharing while you're an employee is "ownership" in part because you are incentivized to prefer that the firm take profits while you work there. By comparison, if as a worker your vested stake persists even after you leave or retire, you might be much more inclined to vote for large reinvestments this year (and for the next several) which may not yield a profit until after you've left. Temporary "ownership" may not encourage the same long-term view as ordinary literal ownership.

Re: Mondragon as the new city-state

#52

Post by jmyeet »

shafoshaf wrote: post #13
jmyeet wrote: post #4

There is no value without labor. This was recognized by everyone from Karl Marx to Abraham Lincoln to Adam Smith. Smith even conceded that profit was impossible if workers retain their surplus value, which is exactly the point. I bring this up because that's what capitalism is: draining the surplus labor value from workers to the capital-owning class. In feudalism, the artistocracy and th emonarchy extracted that val…

I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say. >>>Locally-owned businesses. That's socialism. There is definitely nothing in the definition of socialism that says everything is locally-owned. Moreover, that can be a way to end up with things like Redlining and other institutional racial issues. >>>There is no value without labor. The great thing Marx did…

> I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say.

It's an oversimplification to highlight the main point: workers' relationship to the means of production. In capitalism, capital owners own the means of production. In socialism, the workers own the means of production.

IME most Americans not only don't know what socialism is (despite being opposed to it), they don't know what capitalism is either (despite supporting it).

> Now, our current implementation of Capitalism is clearly wreaking havoc on our environment.

It's doing an awful lot more than that. It's pillaging the Global South. It's impoverishing us under the massive weight of housing, medical and student debt. And it's quite literally killing people. People decry the failures of the USSR, for example, but 9 million people die of starvation every year. Why isn't this attributed as a failure of capitalism in the same way?

Re: Mondragon as the new city-state

#53

Post by m_ke »

hansonkd wrote: post #43
m_ke wrote: post #29

It's a shame there's not a YC like incubator for tech worker coops, cut out the VCs and have milestone based funding in exchange for a percentage of future profits that would be reinvested in future projects.

Isn't that almost the opposite? In a Co-op you put up your own money to buy into a co-op. This is the opposite of VC where an external party joins your org with money. So a co-op model would only help to serve the already wealthy. However, maybe it would be interesting to have a co-op for developer resources for example. As in companies or startups can buy into the coop in return for cheaper rates and more vertically…

Imagine a indie hackers founders cooperative, you take a few successful bootstrapped founders and start a new holding company that shares an office space and has staff to handle legal, accounting and all the other stuff that most engineers hate to deal with.

You offer founders that apply a coworking space and a stipend that can get renewed each year if the members of the coop agree to keep funding it. In exchange the new member commits to giving up 10% of their future profits that get split into an investment budget and dividends.

If a company is failing the members can vote to stop funding them and set them free of the agreement.

If a company needs way more funds and VC route makes more sense you spin it out as a c corp, convert the 10% profit agreement into equity and let them raise funding like any other startup would.

Re: Mondragon as the new city-state

#54

Post by bboygravity »

sgu999 wrote: post #27
RHSeeger wrote: post #16

Earlier quoted context omitted.

> There is no value without labor. While this is generally true, it's also not the entire equation. For example, there's no gain without risk. - When I work for someone else, I am offloading some of the risk to that person/owner. When someone starts a company and hires other people... if the company goes belly up, the founder loses their investment; the workers find another job. - When I rent from someone else, I am…

> the founder loses their investment So does the bank, and the state that (more often than not) subsidised said investment through diverse vehicles. If the bank goes belly up, we've seen what happens, we collectively contribute to save them... because we're collectively sharing all the risk of investment in our financialized economies. I agree that some people don't want risk and others do, but as soon as you start s…

Sure, but using tax-payer money to save malfunctioning banks is pretty much the opposite of capitalism.

Re: Mondragon as the new city-state

#55

Post by orthecreedence »

cies wrote: post #34
m_ke wrote: post #29

It's a shame there's not a YC like incubator for tech worker coops, cut out the VCs and have milestone based funding in exchange for a percentage of future profits that would be reinvested in future projects.

It's inherent to the way a coop works that it's not possible to follow the same path. There is no 7% equity to be given, only the repayment of a loan. The coop model does not promote taking risk and hence have many fail, yet a few grow very quick. Another problem is law. At this point it favors the common ownership forms of business. Starting a coop is hence much harder than it should be. This is what i think where t…

A possible model is to divide your shares into ownership/control class shares (reserved only for workers) and profit shares which can be bought/sold by third parties. This gives workers ultimate control over the venture while allowing third-party investment. I don't know if this has been implemented anywhere, but it's a possibility. It's not going to fuel explosive growth like VC funds do, but TBH I'm finding as I get more experienced that those types of ventures generally end up being trash dumpsters once the honeymoon phase is over.

Re: Mondragon as the new city-state

#56

Post by bboygravity »

jmyeet wrote: post #47
RHSeeger wrote: post #16

Earlier quoted context omitted.

> There is no value without labor. While this is generally true, it's also not the entire equation. For example, there's no gain without risk. - When I work for someone else, I am offloading some of the risk to that person/owner. When someone starts a company and hires other people... if the company goes belly up, the founder loses their investment; the workers find another job. - When I rent from someone else, I am…

> When I work for someone else, I am offloading some of the risk to that person/owner. Workers generally risk their lives or simply injury. Owners "risk" capital. I put that in quotes because our government is typically set up to rescue failing businesses and by that I mean bailing out the owners. If the business fails, the owner simply has less money or they have to become a worker. So who is really taking a risk he…

What are you suggesting as a better system?

To withold basic needs for profit, you need to be able to provide basic needs in the first place.

All of the alternatives I know of can't even reach that point.

Re: Mondragon as the new city-state

#58

Post by max_hoffmann »

abeppu wrote: post #51
drewmcarthur wrote: post #35

Earlier quoted context omitted.

> democratic governance rather than ownership yes and no, i’d call the distinction collective ownership. you can sell your shares (by quitting), or you can stay and participate democratically. but you can’t do both, and that protects your say in the company, preventing investors from overruling worker-owners. > i have no influence neither do the current workers. the issue isn’t retail investors, but the ones with boa…

I think we're roughly in agreement? Any organization that arranges for its workers to govern it has some organizing document that describes this structure. Any organization that arranges for its workers to become owners must pick mechanism for this to happen. My view is that these can be basically independent choices: - A firm can pursue a profit-sharing-for-current-workers approach as described for Mondragon, or can…

Cooperatives guarantee that only people working in the company benefit from the profit of their own work. If one can stop working and still take a share from the profits, everyone else would have to not just work for themselves and lose part of their profit to an increasing amount of people, who are not taking part in creating that profit. Cooperative guarantee that profit is owned by the people who create it.

Re: Mondragon as the new city-state

#59

Post by jujube3 »

calvinmorrison wrote: post #14
jmyeet wrote: post #4

There is no value without labor. This was recognized by everyone from Karl Marx to Abraham Lincoln to Adam Smith. Smith even conceded that profit was impossible if workers retain their surplus value, which is exactly the point. I bring this up because that's what capitalism is: draining the surplus labor value from workers to the capital-owning class. In feudalism, the artistocracy and th emonarchy extracted that val…

> There is no value without labor. is this a serious statement?

He's a Marxist and believes in Marx's labor theory of value.

https://en.wikipedia.org/wiki/Labor_theory_of_value

As wikipedia says, "modern mainstream economics rejects the LTV" (for very good reasons). It leads to some pretty obvious absurdities if you take it seriously. For example, 10,000 people digging holes should be more "valuable" than one guy designing a microchip, because hey! The holes take more labor.

Re: Mondragon as the new city-state

#60

Post by vladms »

jmyeet wrote: post #47
RHSeeger wrote: post #16

Earlier quoted context omitted.

> There is no value without labor. While this is generally true, it's also not the entire equation. For example, there's no gain without risk. - When I work for someone else, I am offloading some of the risk to that person/owner. When someone starts a company and hires other people... if the company goes belly up, the founder loses their investment; the workers find another job. - When I rent from someone else, I am…

> When I work for someone else, I am offloading some of the risk to that person/owner. Workers generally risk their lives or simply injury. Owners "risk" capital. I put that in quotes because our government is typically set up to rescue failing businesses and by that I mean bailing out the owners. If the business fails, the owner simply has less money or they have to become a worker. So who is really taking a risk he…

Depends on the field what you risk. Many white collar jobs will not risk their lives or injury, plus nowadays regulations should reduce these extreme risks.

Saying "owner simply has less money" can have many implications on their life. If they choose to put money in a company rather than have a bigger apartment/TV/car/whatever, I find it fair for that to be rewarded a bit.

I think it is disingenuous to think "basic needs" is simple to define, considering that there is no cheap and free energy source (and other resources). For someone living in a warm climate, the basic need for heating in north of Europe will look like a waste.

My opinion is that tax systems are completely outdated and they should use more "asymptotic/exponential/complex formulas". Sure a tax of x % on profit worked 100 years ago when most people were "closer" but with today's growth (of many things), you get too much concentration. But of course that would imply that people understand both tax and math, so most will not demand it.

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