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Comment by drewmcarthur | Hacker News Reader

> 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 board seats. if boards only had one seat for an investor, that’d be one thing, but usually workers only get a single seat, if any.

> protect current workers’ democratic governance

you could do this with preferred shares, voting shares, etc. investor shares are non voting, voting shares can only be owned by workers, etc. you still have to counter their concentration though.

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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.

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.

I think you may be too committed to dogmatic stances to constructively discuss other possibilities. I think this is no better when it's from the collectivist side than when it's from the capitalist fundamentalists.

> Cooperative guarantee that profit is owned by the people who create it.

I don't think all the value created by workers is realized as profit immediately. Workers can create value which only shows up in contributions to revenue much later. If you and your coworkers figured out the design and manufacturing process for a new product and the product only goes to market after you retired, you helped create the profits even if they arrive after you left the firm.

If the coop structure as you narrowly define it doesn't allow workers to receive the profits of their labor in industries that have a long time to market or R&D cycle, then isn't that a recipe for those high value industries to be inaccessible to coops?

Try to imagine an alternate history where Nvidia was a coop. A lot of the value behind its current high revenue was done many years ago. Cuda was released in 2007. I don't know how much of the hardware has inherited from older designs. If only current workers benefit from the current high sales, has the organization really ensured that "profit is owned by the people who create it"? That seems implausible.

I understood from the article that workers remain working for the coop (possibly in different companies) until they retire, and then, the coop provides them with pensions; so they continue to receive value after retirement.

What if they pass away? I assume their shares are sold immediately and the money paid out to their estate.

Now suppose that all the work they did was in the R&D phase (and fundamental to the project) but the final product had not been released at the time of death of the contributor — so the profits had not been realized — thus the payout on those shares would be a small fraction of their true valuation.

Imagine if a novelist died just after submitting their final draft to their editor but prior to the book’s publication. Forcing the estate to sell off the book before it had a chance to hit the shelves — and become a bestseller — would be an outrage, yet the rigid nature of worker co-ops (cessation of work forces the sale of shares) guarantees this.

Where’s the cooperative in your example? Either you are a freelance author who has a contract with a publishing cooperative. In this case you have a contract with that cooperative and during the negotation process both sides decide together what happens in case of death before publication. Or you are an author inside a publishing cooperative, so you own part of that cooperative and decide together with the other authors, publishers etc. what will happen, if somebody dies before the publication of their book. In both cases the author is part of the decision of what should happen in case of an early death.

The example way above was NVIDIA. Suppose the person who passed away was one of the founding researchers at the NVIDIA worker coop. They developed most of the key technologies that go into a graphics card, but they died during the later stages of production ramp up, before the first GPUs are able to hit the market.

The issue is that the deceased researcher's contribution to the project may be so central and foundational that they may be entitled to a large plurality (or even majority) stake, but forcing the other worker-owners to buy out that stake to pay the estate would bankrupt the coop at this critical pre-production stage. Since only active workers are allowed to maintain ownership, allowing the estate to retain those shares and later receive dividends on future profits is off the table. This issue seems to tie everyone's hands and sound the death knell for the coop.

The novelist case was meant to show an extreme non-coop situation. I don't see any compelling reason for writers of books to join coops, since the writing of the book is the only hard part these days (and countless ways to self-publish exist).

I recommend reading more about existing cooperatives. They offer way better packages to their employees than manager-owned companies. This can also include life insurances, health insurances, child care etc. And since everyone working and owning a company, where the profits might come in at a later stage, you can be sure, that these people working towards that goal, will make sure that they have the security they require. Why wouldn’t they? It’s their job and their company. They have everything required to set up the necessary legal work.

The case with the novelist is also easy to answer. Publishers do more than just printing books. They also do marketing, host events, send authors to interviews etc. All of that work becomes smaller if you share it with others. Plus being new to the industry, you can get the help from experienced writers. Cooperating with other people has loads of advantages. I could go on for hours. Also nobody is forced to join cooperatives. Every novelist can decide to remain a freelancer. It’s basically a cooperative with a single worker. A lot of cooperatives are founded by groups of freelancers by the way, because already having a business mindset, having experienced the freedom of owning your own business and wanting to stay in control when collaborating with others, makes cooperatives the obvious choice.

You are always more free, have more options and are treated better when you own the result of your work.

> I don't think all the value created by workers is realized as profit immediately.

And as the worker creating that future profit you are very well aware of that, plus everyone else working on the design and manufacturing is in the same situation as yourself. The good news is: all of you are also owners of the company. So together you can decide how an exit package should look like for people deciding to leave before the design reaches the market and generates profit.

The same situation in a non-cooperative is a lot worse, because you have no stake in the company. The owner might be willing to negotiate an exit package before you even start working there, but they also might not. Plus before working at the company, you have no idea what the profit margins look like and what you might be working on. It’s the worst time for you to agree on an exit pacakge. Also during employment you are in a worse position, because the owner(s) can just let you go, if you are the only one asking for your fair share of future profits. You don’t have a say in the company. Most often they see your current salary as your share of the profit, no matter how much profit your design might create in the future.

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