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When Workers Own Their Companies, Everyone Wins

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Re: When Workers Own Their Companies, Everyone Wins

#41

Post by nraynaud »

asgard1024 wrote: post #35
nraynaud wrote: post #16

I think the article does a poor job of explaining why factories are generally not coop. When you have 1 employee = 1 vote, you can't sell (a significant amount of) capital to external entities. This leaves you with borrowing money, for which you can't use a significant amount of capital as a collateral. That leaves the coops mostly to sectors that are not capital intensive (mostly service and retail). There is a bit…

Yes, that's a big problem. The owners of capital want to have a say about what the company does, because their money are at stake. Perhaps this is just a cultural thing though. Take money lending - although a bank gives capital to someone else in exchange for profit, it doesn't require strict controls over the actual use of the money; it relies on contract law to get the money back. Similarly, the executives of the p…

For the lending, there will often be a collateral, for a company it will often be shares. That limits the leverage to 50% since a default will make the bank an investor and external investors can't have control.

The collateral will not always be shares, sometimes it could be the acquired physical good, then it's accessible to coops (too bad if you want to borrow for service or immaterial goods). Using real estate or company planes as a collateral suggests that you already got a credit to acquire them in the first place.

Re: When Workers Own Their Companies, Everyone Wins

#42

Post by nraynaud »

walshemj wrote: post #29
nraynaud wrote: post #16

I think the article does a poor job of explaining why factories are generally not coop. When you have 1 employee = 1 vote, you can't sell (a significant amount of) capital to external entities. This leaves you with borrowing money, for which you can't use a significant amount of capital as a collateral. That leaves the coops mostly to sectors that are not capital intensive (mostly service and retail). There is a bit…

Well you can how poptel did it was sell some equity in the company. coop structures can be complex Normally the coop owns the company that employs the members - as long as the members have 50%+1 of the votes they control the company.

From wikipedia, it looks like they where not in a capital intensive market. (Also I can't be sure, did they have their own network?).

Re: When Workers Own Their Companies, Everyone Wins

#43

Post by michaelochurch »

barry-cotter wrote: post #33
rmc wrote: post #12

Earlier quoted context omitted.

You're presuming a perfect market where the most economically efficient organisation will win. There is no guarantee that our current economy is like that.

ADBOC. This is like the efficient market hypothesis, the strong version is wrong and the weak version is so weak as to be almost tautological. In a perfect market the most economically efficient organisation would win, end of story. What we've got isn't that but it's an approximation thereof. The closer it gets to fulfilling all the conditions the more likely it is that the outcome is economically efficient. The only…

Co-ops don't expand as much as privately or publicly held firms because they maximise something approximating profit per worker whereas normal firms maximise straight profits. I think I picked up that argument from Paul Krugman.

r- and K-selection. Companies like Google and Microsoft, which grew large at the cost of culture, are r-selective. Valve and Github, which grow more slowly while maintaining open allocation and cultural health, are K-selective.

It seems impossible, in the long run, to be K-selective if you take venture capital. You're now controlled by people with the attention spans of five-year-olds.

Re: When Workers Own Their Companies, Everyone Wins

#44

Post by michaelochurch »

consz wrote: post #38

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups tha…

Trading houses accept that people are mercenary, which means it's socially acceptable to be that way. The result is that it's much harder for these companies (especially prop shops) to take advantage of their workers.

VC-funded tech, on the other hand, values effeteness and neoteny. You have to pretend to be a "true believer", and that creates enough actual true believers who'll take jobs with terrible terms, and that kills the market. Consequently, you have people working 80-hour weeks for "equity" that is 0.05% of a 60-person company. It's ridiculous.

Re: When Workers Own Their Companies, Everyone Wins

#45

Post by rayiner »

consz wrote: post #38

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups tha…

It's one of the things I like about legal practice. No outside shareholders, no non-lawyers in the management chain, and every shareholder labors for a living billing hours. I understand the importance of passive investment to the economy, obviously. As an employee, I just prefer not to work in that framework.

Re: When Workers Own Their Companies, Everyone Wins

#46

Post by asdfologist »

consz wrote: post #38

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups tha…

I don't think so. Yes, you do get paid more, but you're expected to put in more hours and forced to work within a much more rigid environment with less transparency. Also, throughout finance firms (even among the more tech-saavy ones), the programmers are ostensibly considered second-class to the portfolio managers, and this is reflected in the pay.

So yes, they get paid more, and as a result they may be more a bit more motivated, but there's nothing egalitarian about programmer pay on Wall Street.

Re: When Workers Own Their Companies, Everyone Wins

#47

Post by walshemj »

nraynaud wrote: post #42
walshemj wrote: post #29

Earlier quoted context omitted.

Well you can how poptel did it was sell some equity in the company. coop structures can be complex Normally the coop owns the company that employs the members - as long as the members have 50%+1 of the votes they control the company.

From wikipedia, it looks like they where not in a capital intensive market. (Also I can't be sure, did they have their own network?).

Try working with ICANT without capital ;-) effectively the coop did a deal and sold 40%. It in the end didn't work out the first dot com crash an the lack of forward thinking by the coop movement did for us.

You right poptel was an ISP and I think was a small ADMD. I think originally it was in the business of doing software for foundry's

Still at on point all of the members where worth over 1 Mil on paper :-)

Re: When Workers Own Their Companies, Everyone Wins

#48

Post by scarmig »

yummyfajitas wrote: post #39
rmc wrote: post #12

Earlier quoted context omitted.

You're presuming a perfect market where the most economically efficient organisation will win. There is no guarantee that our current economy is like that.

What imperfections do you believe exist that prevent efficient coops from taking over? Please be specific.

Not the comment author and I wouldn't commit to the idea that co-ops are more efficient, but here's a stab:

1) Coops have different governance structures than traditional businesses. Diffused knowledge, institutional practices, and the legal system itself are oriented toward the dominant paradigm. Given a choice between a traditional business and a co-op that is otherwise equally well-situated, if I'm a profit maximizer I'm going to loan capital to the traditional business, since it's more of a known quantity. I've got no idea of the unknown unknowns that go along with getting involved with a co-op.

2) This goes along with the idea that co-ops are inefficient instead of trying to argue they aren't, but the incentives of a co-op are different than a traditional business. A traditional business will attempt to maximize total profit per unit capital (I think); a co-op will try to maximize something closer to total profit per unit labor. The former will succeed in a capital-poor world, while the latter is better for a labor-poor world.

Re: When Workers Own Their Companies, Everyone Wins

#49

Post by walshemj »

rayiner wrote: post #45
consz wrote: post #38

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups tha…

It's one of the things I like about legal practice. No outside shareholders, no non-lawyers in the management chain, and every shareholder labors for a living billing hours. I understand the importance of passive investment to the economy, obviously. As an employee, I just prefer not to work in that framework.

But only the ones at the top get to be partners the support and paralegal staff doing get nothing from the partnership.

Re: When Workers Own Their Companies, Everyone Wins

#50

Post by walshemj »

asdfologist wrote: post #46
consz wrote: post #38

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups tha…

I don't think so. Yes, you do get paid more, but you're expected to put in more hours and forced to work within a much more rigid environment with less transparency. Also, throughout finance firms (even among the more tech-saavy ones), the programmers are ostensibly considered second-class to the portfolio managers, and this is reflected in the pay. So yes, they get paid more, and as a result they may be more a bit m…

I think its more egalitarian than SV if only because if your working in that area your probably take a more realistic view of your value.

And what about all that unpaid OT that SV companies expect?

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