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Comment by troad | Hacker News Reader

> People love to talk about how capitalism (or free market) solves the tragedy of the commons, but it actually doesn't. The only way to solve it is to make people care about commons by giving them a say in managing it, i.e. socialism.

There do exist worker-managed companies under capitalism, they consistently underperform. There also exist (and have existed) worker-managed companies under various forms of socialism, those were an utter disaster (for the workers themselves, for the environment, for business productivity, for overall societal welfare, for human dignity, the list goes on).

> How can you have "drive to win" if you are just an employee of a company, and have no stake in it?

Bonuses, raises, equity.

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They do not consistently underperform. Just go to wikipedia:

> According to Virginie Pérotin's research which looked at two decades worth of international data, worker cooperatives are more productive than conventional businesses. Another 1987 study of worker cooperatives in Italy, the UK, and France found "positive" relationships with productivity. It also found that worker cooperatives do not become less productive as they get larger. A 1995 study of worker cooperatives in the timber industry in Washington, USA found that "co-ops are more efficient than the principal conventional firms by between 6 and 14 percent".

I wonder why there aren’t more worker co-ops then. Maybe they’re more productive per worker but struggle to grow big enough? Or maybe they’re less likely to survive a downturn because layoffs are harder?

Don’t discount that they’re also seen as a threat to the status quo

No they are not, there are so few co-ops that nobody cares about them. No politician campaigns promising to destroy co-ops, not even Trump, because there is no reason to.

I doubt the demographics of coop participation are even partisan. Urban organic food coops probably skew left, but all those rural infrastructure coops, fuel/etc service for farmers, probably skew right. Attacking coops wouldn't win you votes with many people on either side.

They aren't a threat , which force is stopping coops from starting exactly?

Because it takes capital to start a business. People with capital like to retain control over their capital, so they don’t start cooperatives.

Coops don’t have the same incentive structure as external-investor-beholden corporations, so they don’t pursue “growth at all costs”, but rather survival at all costs (job preservation), and then growth where appropriate (pie expansion).

It’s kind of like the trade off between authoritarian regimes and democratic regimes. One is fast but flimsy, the other is slow but robust.

Banks dont want to lend money to them as often/much/favorably, coops usually don’t want investment.

To start a business you need capital, if you have enough on your own, you do not need a coop, much more difficult to convince a group of people to risk together unless they’ve all had previous experience with one another.

Why would Banks shy away if they are more productive and have better margins?

Banks calculate risk by looking at data, and there is far less of it for coops. And they are often irrational actors.

> There do exist worker-managed companies under capitalism, they consistently underperform.

Of course, according to a metric, how much money I can make out of an investment, without having to do any work, they underperform!

> There also exist (and have existed) worker-managed companies under various forms of socialism, those were an utter disaster

This is simply not true. Where it was a disaster, it was for the similar reason, workers didn't have the stake in the company.

> Bonuses, raises, equity.

Possibly but you have no say how these things get distributed, and they still are only a small portion of what the investors get.

Perhaps you could name some worker-managed companies under socialism that did well - for example, East German companies that subsequently managed to compete against their West German peers. I can think of one - Zeiss Jena - though I don't know how truly worker-managed it was. (For some reason, the East Germans were very expert at manufacturing lenses ...)

> > How can you have "drive to win" if you are just an employee of a company, and have no stake in it?

> Bonuses, raises, equity.

And significant ones, too. None of this "Hey, you saved the company $1M, here's a $500 bonus!" bullshit.

I once had a founder privately lament to me the this employees don't play to win, and don't "treat the company as if they owned it," and it took all my willpower not to fire back with: "Dude, you're the sole shareholder with 100% of the equity, what do you expect?"

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