What are some success stories of coops? I’m thinking United , REI , Winco.
I’m curious why aren’t there more and why they generally have mediocre success if not failure
I’m curious why aren’t there more and why they generally have mediocre success if not failure
Cooperatives face complex tax structures that can be less advantageous compared to traditional corporations. Unlike C-corporations, which have clear tax advantages and deductions, cooperatives must navigate unique tax rules, such as Subchapter T of the IRS code, which governs patronage refunds.
The tax code heavily favors investor-owned firms through incentives such as lower capital gains taxes and deductions for stock-based compensation, which cooperatives do not benefit from in the same way.
Beyond that, banks and financial institutions are often hesitant to lend to cooperatives, as their ownership structure does not provide the same level of collateral or control as investor-owned firms. Government-backed loans and grants that support small businesses often don't adequately accommodate cooperatives. For instance, SBA loan programs historically have been difficult for cooperatives to access.
And because co-ops are a niche business structure, many federal and state laws are designed with traditional corporate structures in mind, making it difficult for cooperatives to navigate compliance requirements. Cooperative incorporation laws vary by state, leading to inconsistent legal protections and administrative burdens.
Ownership structure doesn't change many of the business risks, but coops can avoid the "expand or die" that sometimes normal companies experience.
The largest coops are mutuals (think: insurance) and banks (think: credit union).
Others exist in farmer's coops (Land o' Lakes, Dairy Farmers of America, etc).
https://ncbaclusa.coop/blog/2022-world-cooperative-monitor-r...
The hardest part is converting an existing corporation into a coop.
The vast majority of coops are, like credit unions, relatively small and local. Instead of expanding to new areas, they often "split" into new areas, so you'd expect them to remain just below the noise threshold of the large multinationals.
I'm just straight-up offended at this. Co-ops are the job most people want. What you refer to as "amazing success" is dismantling our society and the people who run them appear to struggle to empathize with other humans.
Granted, i'm sure coops can be equally antisocial and misanthropic. But growth surely isn't what we want to be optimizing for.
It’s clear they meant success as in success in profit and growth, and in that lens, coops do tend towards mediocre success because incentives are different. But I don’t see that as a bad thing, and I don’t think OP does either?
I don't really have much energy to argue with true believers today, so all I'll say is "read schumpeter dammit". For an industry allegedly founded by the dude I haven't met a single person working with VCs who's actually read the man. He would not consider today's America to have a healthy economy.
-- what are some examples?
• Democratic workplace
• You can have input in whether to optimize for longevity or short-term profit.
• If you do choose to have a profit-sharing, you experience arguably proportional reward for the work you invest.
• Unions are less necessary if you don't need to actively organize to engage in democratic decision structures.
These are examples of qualities that I've found that appear to be desired by the majority of both my tech social-circles and certainly my non-tech-social circles. Certainly there's immense bias in my viewpoint, but I'm not the person equipped to draw together evidence that people want something they aren't even presented with, but it's something I do believe is generally true.
For more historical evidence, to put aside the co-op structure (which is, in my opinion, secondary to the qualities that people want from their business), flat companies have had their moments of popularity with both Valve and Zappos. (obviously neither are co-ops, and I doubt either have labor-proportional profit-sharing now if they ever did, but it's limited evidence people are turned off by the dysfunction of hierarchical businesses.)
More evidence: in the fight between workers and shareholders, shareholders had to use the courts to enforce shareholder primacy: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co. This indicates the natural tendency of society is to mediate between the needs of the shareholders and workers, something most naturally achieved by making the workers the shareholders.
I realize little of this is likely to be as convincing as the evidence of so many for-profit companies largely not owned by workers, but there's a lot of literature discussing the perverse incentives of divorcing ownership (and investment) from labor that is far too large for a HN comment.
There are, of course, very large co-ops others point out (health insurance, REI (I think?), credit unions), but I can't say I have the insight into the historical reasons why they appear in some industries and not others, in some regions (states) and not others, etc etc.
FWIW, I have worked in for-profit environments where I don't own stock and I've observed genuine concern for all the qualities above. This isn't a hard and fast rule. But most of my workplaces don't show this behavior, and it's quite soured me on gambling with my time (the typical capitalist-to-worker-pitch) rather than finding a lower-return but stabler form of employment that prioritizes quality of work and life. You can get a lot of this by working at large tech companies, but they often undersell how much this affects quality of life despite enormous compensation, and also undersell the sort of dysfunction that would normally be remediable if you let the workers have true representation on the board and among stockholders.
There's something deeply wrong with a society that can label moderate success as "mediocre".
I wish society gave more incentives to healthy, moderately successful, profitable companies instead of "growth and greed at all costs" success.
Or, as you put it, "amazing/startup-style success". Fuck that noise.
expand or die is a bullshit concept employed by those more concerned with a quick buck than creating something lasting
The sad part is when something on the startup track fails as a startup but is a perfectly workable "lifestyle" business; but it can't switch tracks and instead plows along until destroyed.
(which happens to be featured somewhat prominently in Kim Stanley Robinson novel 'The Ministry For The Future', which I am currently working my way through, and recommend for anyone who (a) likes coops and (b) is feeling overwhelmed by humanity's current situation)
REI is a consumer coop. At least some of their employees are actually unionized. https://www.motherjones.com/politics/2022/02/rei-coop-union-...
The grocery co-op near me has occasionally faced the prospect of the formation of an employee/worker union. I imagine that unionization is a thing that doesn't happen (or get seriously discussed) in a workers' co-op.
I find this distinction vaguely fascinating, but (apparently) not enough for me to actually get informed about it.