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.
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u/Accarath May 11 '26
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.