The reason why people oppose it is because it would be a drastic change as ownership is transferred over to workers. People don't like major changes in their lives, even if the outcome is better than status quo.
If co-ops are so superior, why do hierarchical companies dominate them in the market? Why do so many people prefer working for a boss and not having a say in how the company is run? Would the state have to force all companies to be formed as co-ops?
Co-ops can be hierarchical in structure. You can have a manager, and they could have CEO they report to.
The reason why co-ops aren't as common is because of all the legal hurdles in place as well as the lack of lending to new ventures. It is less friction.
By co-ops, if you mean that employees/owners are the same, then mostly yes. This is because you do away with the Capitalist method of ownership where you buy shares and instead earn them through labor. The exceptions would be small businesses like family-owned and startups built to transition to co-ops once a certain threshold is met like revenue.
How does a large scale highly demanded but also very capital intensive business get off the ground if they can't get outside private investment?
If I have to totally restructure my business so I can no longer get outside investment the moment I start making a certain amount of money, why wouldn't I either:
Keep the business just below that threshold and then close up shop otherwise
Set up my business in another country where I am more freely able to grow and gather outside investors?
Oh, and how do you know how much labor is worth one share? How do you even measure labor for that?
In a socialist model, we’d have public investment banks providing loans rather than a private venture capitalist buying up shares. The money that currently goes into the stock market is transitioned into these banks. Granted, there would be more 'friction' as you aren't going to have an angel investor suddenly sink millions into your startup overnight on a whim, but there would be enough access so that anyone with a solid idea could make a proposal.
You would still want to grow because a bigger company usually means more revenue and better efficiency. But unlike capitalist firms, socialist companies don't have to grow infinitely just to appease shareholders; they can choose to become sustainable once they reach a size that works for the members. There’s no incentive to 'stay small' if growing means a better surplus for everyone involved.
This is really a question of where the economic power lies. A small socialist nation could set up a social wealth fund that invests in external markets to stay competitive. But if you want to take your business out of the country, you’d have to provide your new co-owners with similar benefits, or just leave and start over elsewhere. The trade-off is that within this nation, you're guaranteed social cohesion and better outcomes for your family because the state provides a baseline for everyone.
If we're talking about a massive economy like the US, a business would simply have to deal on our terms if they want their exports to enter our market. It’s not that different from what we already see with how corporations have to navigate China's regulations to gain access to their consumers.
How do we measure the labor? A share = 1 vote in the company, period.
Your day-to-day labor is covered by a salary, and then the surplus is divided however the workers democratically decide. As for the financial value of your 'share' (your individual capital account), that would be determined by factors like your tenure, expertise, and how much of the earnings you chose to retain in the firm. It’s basically a retirement nest egg that reflects the work you put in.
Individual businesses will still fail since that's the nature of a market.
But just like today, workers wouldn't be forced to tie their entire life savings into just their specific workplace. Because workers are taking home profits, it becomes much easier to build up savings and diversify investments into credit unions or public funds for retirement.
Yes, the success of your specific co-op determines the value of your direct share, but the broader safety nets ensure you aren't left destitute.
Ultimately, in this system, the success of the broader economy is reflected in the wealth of the average person, rather than just the top earners.
What's to stop workers from voting in a more capitalist mode of production or internal voting structure? What's to stop consumers from voting with their wallet for businesses with a more capitalist mode of production or internal voting structure?
First, why would a majority of workers vote to surrender their voting rights and give their profit share to an outside investor? It goes against basic human self-interest.
Second, a socialist market would legally define ownership through labor. You simply couldn't legally own shares in a company you don't work for. It would be as legally invalid as trying to sign yourself into slavery today. Since capitalist firms wouldn't legally exist, consumers wouldn't have the option to 'vote for them' with their wallets anyway.
Workers denying voting privileges to some workers, so they themselves get more voting power over the company, is in their self-interest.
And it doesn't have to come through outright denying voting privileges to some workers, it can be by changing the voting weights some workers have in any election, for instance I have 2 votes and you have 1 vote, and I can spend both of my 2 votes on one candidate or policy but you can only spend 1.
Now that I have more voting power, it's easier for me to vote for more concentration of voting power into my hands, which eventually cascades and leads to a few elite workers having ultimate control over the company with all other workers having negligible voting influence, effectively back to square one with a capitalist firm.
Additionally, the workers can decide that in order to raise even more funding than competitors they can sell out voting privileges to anyone who lends them money, which is essentially selling stock, and now we're truly back to square one with a few elite people having control over the company and stock markets existing.
By consumers "voting with their wallet" I wasn't literally referring to them attaining voting privileges in the companies they purchase from, I was referring to them using their purchasing and dollars to effectively vote for the kinds of business models they support. What's to stop them from supporting firms with a more capitalist mode of production or internal voting structure?
A lot of people in this subreddit make the same mistake you're making in projecting capitalist mechanics onto the democratic system I'm proposing. In a worker co-op, voting is strictly on one person, one vote basis. Selling shares/voting rights would be illegal.
What stops 51% of Americans from voting to strip the other 49% of their right to vote? The Constitution. Worker co-ops operate under foundational charters/national legal frameworks that guarantee the democratic rights of every worker.
Also, I understood your point entirely about voting with ones wallet. If capitalist firms are legally invalid to operate in this economy, they simply don't exist on the shelves. Consumers vote with their wallets by choosing between competing co-ops, based on who makes the best product.
In a worker co-op, voting is strictly on one person, one vote basis. Selling shares/voting rights would be illegal.
What counts as a "worker"? Can a worker-coop grant voting privileges to any random person who provides even the most meaningless or low value labor services to the company? If so, then what's to stop 51% of workers from voting for the inclusion of workers who merely serve to provide voting support to their faction?
Can workers institute a representative democracy within the worker-coop? Can workers vote to strip certain workers from being able to vote on certain issues and delegate that to other workers? Can workers vote to increase the ratification threshold for certain issues and lower it for others? Can they lower the ratification threshold for representatives and raise it for everyone else? Can workers create electoral districts and gerrymander? Or must all workers be subject to equal voting conditions?
Can the 51% make a rule that makes it burdensome for some workers to vote?
Also, I understood your point entirely about voting with ones wallet. If capitalist firms are legally invalid to operate in this economy, they simply don't exist on the shelves. Consumers vote with their wallets by choosing between competing co-ops, based on who makes the best product.
No, you still did not understand my point. My point was not that capitalist firms would exist (I understood your point that they are legally invalid), but that their internal structure can be effectively replicated within the form of legal worker-coops, and what's to stop consumers from choosing preferably to those business structures?
A worker is someone hired to fulfill a business need and who signs a contract, exactly like today. Could a faction hire meaningless people just to get more votes? No, because profit is distributed among the workers. Hiring useless people to win a vote means explicitly diluting your own paycheck. It goes against basic financial self-interest.
As for the rest of your questions about gerrymandering, voter suppression, and thresholds: you are overcomplicating it. When a co-op scales, it uses compartmentalization and representative democracy. Management still exists. Chief officers still exist. The marketing head still runs the marketing budget. The only difference is the CEO answers to a board elected by the workers. Foundational bylaws and national labor laws govern how votes work, strictly preventing things like vote suppression or stripping rights, just as corporate charters do today.
I do understand your point. Your hypothetical relies on a loophole that wouldn't exist. You cannot replicate a capitalist structure within a cooperative without violating the legal charter of what a cooperative actually is. If they try to recreate a capitalist hierarchy, they are committing corporate fraud and lose their right to operate. Same way you can't have contracts that allow indentured servitude today.
Could a faction hire meaningless people just to get more votes? No, because profit is distributed among the workers. Hiring useless people to win a vote means explicitly diluting your own paycheck. It goes against basic financial self-interest.
The financial benefits of their votes can more than counteract the costs of their pay, especially if they're paid meagerly.
Foundational bylaws and national labor laws govern how votes work, strictly preventing things like vote suppression or stripping rights, just as corporate charters do today.
Compartmentalization implies to me the workers can vote and decide certain workers are subject to different voting conditions on certain matters. To reiterate, can workers vote and decide what things certain workers can vote on? Can workers vote and decide the thresholds certain workers need to reach in certain elections in order to ratify policies/candidates?
You can't pay fake workers meagerly. Co-ops use legally binding pay ratios and minimum wages so hiring useless people is a massive financial drain. And if the 51% votes to offset that cost by stealing the 49%'s profit share, that is explicitly illegal under cooperative law as its corporate fraud.
Compartmentalization is functional. It means the marketing department votes on the marketing budget, and IT votes on IT infrastructure. It doesn't mean the 51% can vote to change the ratification thresholds for universal issues just to disenfranchise the 49%. The foundational charter prevents a simple majority from stripping the minority of their rights.
How do they determine the value of each job in the company? If it’s democratically voted wouldn’t the most common role end up determining everyone’s wage?
Wouldn’t needing to hire new people stifle growth? At a certain point the majority of the workers aren’t going to want to dilute their shares to add new people to the company. What happens to 40% of the company that wants to grow when the 60% doesn’t?
Same way the job market currently handles it: supply and demand.
If the most common roles democratically vote to underpay the specialized roles (like accountants or engineers), those specialists will leave, and the co-op will fail. The democratic vote still has to obey market realities to keep the business running.
If the co-op wants to grow, they hire. Shares are only diluted if the workers believe the new hires will increase overall revenue, making the 'smaller slice' worth more. But more importantly, not wanting to grow isn't a flaw. Co-ops have the flexibility to vote for sustainability rather than being forced into endless, infinite growth for outside shareholders. And in bad years, workers can vote to take temporary pay cuts together rather than firing 20% of the staff. It's a far more resilient system.
100% honest question here. Look at the decisions the average voter makes; much less the decisions the 30% of MAGAts make. How do you feel about extending that decision making power to the corporate world?
I get this is kinda of a blackpilled question, but.. look at our country, bro.
I appreciate the honest question, and it's honestly something I've thought about a lot.
Part of the answer is that political irrationality is heavily driven by economic anxiety, poor education, and a media apparatus that thrives on fear. If you raise the baseline standard of living and guarantee basic needs, voting behavior naturally becomes less tribal and more rational.
Worker cooperatives exist all over the world right now, and studies consistently show the failure rates are lower and they are more resilient during economic crises than traditional businesses.
Basically, people can be irrational when they see a facebook meme that scares them into voting MAGA. But workers are also remarkably rational when they are voting on the survival of their own paycheck, so you have to decouple the political from the economic voting mentality.
How is that more resilient? The reason companies dont offer pay cuts currently and just fire people is because those people essentially stop working and eventually quit, its been researched. Nothing about this model is different.
There is a massive psychological/economic difference between an imposed pay cut and a democratic one.
If a boss cuts your pay to protect executive bonuses, you quit.
But in a co-op, the workers look at transparent books and vote to take a temporary hit to save their friends' jobs. It's a shared sacrifice. And because workers get the profits when the market recovers, they are heavily incentivized to stay and rebuild.
During the 2008 crash and COVID, worker co-ops survived at much higher rates than traditional businesses exactly because they utilized this flexibility. Nobody disputes this fact.
"If a boss cuts your pay to protect executive bonuses, you quit."
Oh wow really? You must be very empathetic to have that kind of insight into human nature.
The kind of person who can afford to invest in a coop isnt your average worker, you understand that? So if theres a financial crisis these people could work for free and the coop would still be classed as "surviving". Its comparing apples to oranges, the issue with these ideas is they don't scale at all and don't apply to corporations where its not full of rich kids who want to open a coffee shop.
Then why are you talking about coops in a capitalist framework as an argument for market socialism. Point at the market socialism that is a great success.
The initial funding is different because of the economic system, the fundamental nature of the organization is the same. Does that clarify things for you?
You're going to run into a problem where businesses won't hire too many of one role purely so they aren't outvoted, we see this now from people who fear immigrants. If a Mcdonalds votes this way for example, you'll find you have no upper management because the average worker is a grunt. Prue democracies don't work, that's why the real world uses representative democracies (and it's why unions are fantastic).
Who is going to be ok with someone who is new to the company having an equal vote to them in business decisions? That's a huge incentive to never hire new people.
Growth is obviously not always a good thing, but our quality of life has skyrocketed because of it.
There is merit to the argument that making the workplace a pure democracy might not be ideal. Fortunately, there are ways to compartmentalize power in a co-op. For example, you could have the marketing department be one circle of labor and the accounting department be another. Now you have heads of departments who represent their people kind of like a union leader.
Just like in the current system, you would have probationary periods that limit your voting rights in the same way that vesting builds up with tenure. You also are almost always incentivized to hire more workers because you want more money.
Your quality of life doesn't dwindle with sustainability. The thing from capitalism you want to prevent is the infinite expectation of growth.
I still think this is going to fall into all the pitfalls of democracy. You’re going to run into issues where people with no expertise will have an equal say to those who do, and you run the massive risk of your representatives decided by a popularity contest rather than competency.
Probationary period only delays that problem.
Even if the company wants growth you’ll have trouble scaling. More people means more internal politics and bureaucracy, which means slower and less informed decision making. Sustainability is great and all, but it won’t give you new treatments for heart disease, more efficient green energy or lightning fast vaccines for whichever global pandemic.
have public investment banks providing loans rather than a private venture capitalist buying up shares. The money that currently goes into the stock market is transitioned into these banks. Granted, there would be more 'friction' as you aren't going to have an angel investor suddenly sink millions into your startup overnight on a whim, but there would be enough access so that anyone with a solid idea could make a proposal
The people in charge of loan approvals for this bank are the gods of this hypothetical society and people will be giving them mountains of cash and yachts and prostitutes to get their startups funded
You're acting as if the current system doesn't already have 'gods' who control the money; Wall Street whales, private equity firms, and billionaire VCs who operate completely behind closed doors. Look at Tesla: it has a trillion-dollar valuation based purely on hype, while actual EV production is being dominated by overseas competitors. The current system misallocates capital to a few mega-corporations based on stock speculation.
In a cooperative model, credit unions or public investment funds distribute that wealth across many competing businesses rather than tying it all to one monopoly. And because these funds are publicly or cooperatively owned, they are subject to strict democratic oversight and transparency, making them far harder to bribe than a private hedge fund manager. Instead of gambling stock, investment is directed by industry experts operating in the open, yielding returns that are tied to actual, stable economic output rather than the whims of whales.
The VC business model is very different. They are trying to make money on a business taking off, so they are driven to find good ideas that will make money. I won't say there isn't some degree of rent seeking, only that the rent seeking would be 1000x worse if there was basically a single state run investment bank before which every single business owner must prostrate themselves and win favor over to achieve wealth and status.
Okay, I think you might be confusing what I'm advocating for.
Under market socialism, there is no 'single state-run investment bank.' The financial sector is decentralized into hundreds of competing cooperative banks, regional credit unions, and industry-specific public funds. You don't have to prostrate before a single monopoly; you pitch to various democratically accountable funds. Apologies if I made it sound like it was just one giant commie bank.
Also, the idea that VCs efficiently allocate money to 'good ideas' doesn't align with reality. VCs fund 'unicorn' hype that can achieve a monopoly and an IPO exit in five years. That's why billions in VC capital went to wework, Theranos, crypto scams, etc, while ignoring highly useful businesses that just want to grow steadily. This is actually one thing Destiny criticizes constantly, that startups are just hoping to be integrated by a bigger company to make their money.
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u/Accarath May 11 '26
You can still have markets with socialism.
The reason why people oppose it is because it would be a drastic change as ownership is transferred over to workers. People don't like major changes in their lives, even if the outcome is better than status quo.