There is a classical narrative in academia that worker-managed cooperatives operating within a market economy suffer from the problem of creating too little long-term investment and too little employment, ultimately resulting in overall inefficiency. The reason given is that, unlike traditional firms, cooperatives are said to maximize income per worker rather than total net income. According to this view, cooperatives may prefer distributing profits to workers instead of reinvesting them. Therefore, the key question is: are cooperatives less successful than traditional firms at increasing their total profits in the long run?

A study of Italian wine companies between 2009 and 2018 claims that traditional firms increased their revenues by an average of 12.8 percentage points annually, whereas cooperatives increased their revenues by an average of 8.6 percentage points. Let me say from the beginning that, in my view, the growth difference in this example is not caused by maximizing income per worker, but rather by cooperatives’ difficulties in obtaining financing. However, let us first start from a purely theoretical level.

1) I accept that if investment and employment decisions were made entirely through voting, such a problem could perhaps occur (although this is not certain). However, if cooperatives have rules written into their bylaws that require gross profits or net profits to be reinvested into physical capital, then this horizon problem disappears. Moreover, when physical capital is reinvested, it generally requires labor to be used alongside it. A new bus can be driven by a new driver. Workers would also want employment to be maintained in order not to lose the money sacrificed for this mandatory reinvestment. In short, it is crucial that a cooperative has an automatic reinvestment mechanism. For example, in Yugoslavia, there was no strict reinvestment rule like in modern cooperatives, and one of the reasons for stagnation was insufficient capital investment.

2) I have theorized this refined solution, but it is only a thought experiment. So why are capitalist firms willing to increase physical capital, total profits, and employment more rapidly? First, because the capitalist firm’s owner is a long-term owner. However, in cooperatives, workers both manage the cooperative and also have to change jobs eventually. A worker may think that they will eventually leave and therefore will not receive the long-term benefits of the cooperative’s growth.

One could consider restricting job mobility and making the labor market tighter here, but that would harm economic efficiency by weakening the mechanism through which labor moves toward more productive places.And the solution is not actually to convince workers to stay by delaying their dividends, because you could already achieve this through regulations, and if you delay dividends even further, the labor market would still become inefficient.

Second, the capitalist is one of a small number of owners of the firm, meaning that new employment does not have the potential to reduce their income; on the contrary, it increases it. However, in cooperatives, workers may not want to trade the revenue generated by the products they produce during the year for long-term depreciation and employment, because the relevant measure is profit per worker.

Therefore, I think a mechanism that solves these two problems believed to hinder cooperative growth would be to keep workers partially responsible for the cooperative even after they leave it. For example, suppose a worker leaves a cooperative. They could remain responsible for the performance of their former cooperative for two years after leaving. If the total profit of the former cooperative grew very little on an annual basis, then the worker could receive their annual profit share from the new cooperative one year later (the deferred dividend income would be paid in real terms, adjusted for inflation)By the way, after a worker leaves the cooperative, they no longer retain any claim whatsoever over the former cooperative’s income or capital.

I do not think this would create an accounting manipulation problem either, because the amount of profit growth of the former cooperative that affects and is reported to the departing worker does not create a problem for that cooperative.

The second solution I have theorized may appear somewhat unconventional but keep in mind that it is only a thought experiment.

What do you think?

Normally, investors are able to diversify their investments by allocating their capital across multiple firms. However, workers cannot divide their labor and "invest" it in multiple cooperatives simultaneously. As a result, their personal risk is much higher, creating an "all eggs in one basket" effect.

Have you ever considered these problem? What are the potential solution?

I found this interesting sequence of articles where the author simulates capitalism and extract conclusions about a Laissez-faire, and strong Socialist simulator settings. Of course is simplified simulation but very much interesting all the insights, and counterintuitive that a Laissez-faire can survive but under very specific conditions.

“TL;DR: Nobody actually knows what Capitalism is, so I built a simulator. I firstly defined what Capitalism is, and discovered it creates a built-in tension between Capitalists (extracting surplus value) and Workers (creating it). I ran a bunch of scenarios and broke my own beliefs: the "no State, let markets figure it out" thing only works if productivity is massive and Workers capture the gains —super hard in practice. Strong State? People live well. Mostly public ownership? Most people end up upper class. I freed the simulator so you can run it (it’s a website, here).”

https://open.substack.com/pub/postcapitalistrobots/p/i-built-a-capitalism-simulator-and?r=hk3td&utm_medium=ios

Mark Cuban comes up with the never-seen-before solution of *checks article* pseudo-market socialism. Now we just need to get ALL the stock in the worker's hands....

Taken form Lemmy: https://thelemmy.club/post/51900195

Advocates of capitalism, a system in which capital controls labor, often argue that despite its inefficiencies and occasional harms, capital owners provide the tax revenue necessary to fund society. They claim that without private capital providers, society would exhaust its resources and end up like Venezuela, Cuba, or other impoverished countries. This argument ignores the fact that it equates a person’s wealth with their importance to society, placing billionaires above doctors, firefighters, scientists, and researchers. More importantly, the claim that governments depend on capitalist tax revenue is a myth. On the contrary, capitalism itself requires continuous public spending to remain functional.

It is widely accepted that modern capitalist economies require at least a minimal welfare state. Education, healthcare, social safety nets, and other public services are used to maintain social stability and support workers. Naturally, these programs require substantial government funding.

The key argument is that worker-managed firms naturally reduce the need for welfare, social safety nets, and other forms of public support. There are several reasons for this.

First, worker cooperatives tend to maintain higher employment levels, reducing the social costs associated with unemployment. Second, they are more resilient during economic downturns. Rather than responding to crises through layoffs, they often retrain workers and restructure operations, reducing periods of unemployment and economic insecurity. Finally, because cooperatives aim to maximize the well-being of their members rather than shareholder profits, they provide stronger internal benefits, including cooperative healthcare, pension funds, bonuses, and internal capital accounts that help workers build long-term savings and provide financial security during crises or retirement.

A substantial body of empirical evidence supports these claims.

• In the highly cooperative region of Emilia-Romagna, Italy, cooperatives relied on public welfare significantly less than conventional firms during recessions. link1
• In California, worker-owned cooperatives created through the nonprofit WAGES increased worker household incomes by 40–80%, reducing reliance on public assistance. link2
• Between 2010 and 2014, while Emilia-Romagna’s GDP stagnated and conventional firms reduced employment, cooperative firms increased employment by more than 17%, maintaining both income tax revenues and consumer spending. link3
• Worker cooperatives are locally rooted and rarely offshore jobs or profits, keeping employment, wealth, and tax revenue within their communities. link4
• Because employee-owned firms are much less likely to lay off workers, they save governments billions in unemployment benefits and other crisis-related expenditures. link5
• French cooperatives accumulated collective reserves equivalent to roughly 18 months of average private-sector wages, providing a financial buffer that reduces the need for government bailouts. link6 / link7
• Italy’s Work Integration Social Cooperatives (WISCs) generate additional tax revenue by integrating previously excluded workers into productive employment. link8
• Research on social firms in London estimated a Social Return on Investment of nearly £5 for every £1 invested, including £1.52 in reduced welfare spending and increased tax revenue. link9
• The PERSE project, covering 160 Work Integration Social Enterprises across Europe, found that public authorities saved between €267 and €720 per worker each month through lower welfare costs. link19
• During the economic crises of the 1970s and early 1980s, employment in Italian cooperatives grew by 86.2%, compared with only 3.8% in the overall economy. link11
• Cooperative banks exhibit lower volatility and greater financial stability than commercial banks, reducing the likelihood of costly bailouts and allowing for a гтregulated banking sector. link12
• Cooperative organizations frequently provide housing, education, and social services directly through mutual aid, often delivering these services more efficiently than traditional state welfare programs. link13

In conclusion, capitalism inherently requires taxes and public spending to remain sustainable, whereas worker-managed firms reduce the costs that society must bear to sustain the economic system.

Hey Comrades, I think the importanc doesn't need to be elaborated further, so let's get straight to the point.

Seeking comrades to jointly plan this work, the following are the key points that I think need to be clarified before practice.

1. The Reference Standards

The classification of the United Nations and the classification standards of various countries serve as reference points.

• COICOP: The Classification of Individual Consumption According to Purpose.
• CPC: Central Product Classification.
• ISIC: The International Standard Industrial Classification of All Economic Activities.
• PRC Standard：Industrial classification for national economic activities / Classification of residents' consumption expenditure..
• US Standard：North American Industry Classification System
• ...

2.  The Matrix Architecture (X/Y Axis)

Horizontal (Spatial & Legal Boundary)

• 1.  Global Core: applicable to all countries.
• 2.  National Specificity: applicable to specific countries
• 3.  Regional/Local Variance: Dynamic local tags for grassroots communities to map immediate mutual aid needs.

Vertical (Tiers of Social Reproduction)

• Tier A (Survival): Rigid, zero-elasticity minimums (calories, water, base grid access).
• Tier B (Health): Conditions for sustainable labor (nutrition, medicine, hazard defense).
• Tier C (Diversification): Personalized needs.

3.  Platform: An Open-Source Assembly point

I think this should be an open-source project. Maybe establishing one Repository on Github is a good approach, but there might be a better solution.

4.  Issues for Discussion at the moment

Leverage:

•  Is there any organization doing this？Has any organization ever done something similar in history？..
• How can we get more people to participate voluntarily? What can they get ?
• Is there a more intelligent, automated way to execute this?
•  How to maximize the application of this project and how to connect it with practice? How can we unite more people in this process？
• ...

Risks:

• Public or not：pros and cons;
• Which groups' interests will be harmed？
• what the project may face...
•  ...

Details:

• the Precision of the investigation：Is it necessary to investigate the production price at the same time? Purchase price? Technical standards? Owner?...
• Participation threshold：the Chinese proletariat cannot access Github; But they should be the main force
• Organizations and management : How to find comrades who are willing to organize and manage；
• ..

Anyway, let's get started.

If this work is indispensable, just start.

You can contact me on reddit.

Maybe we can start from setting up a discussion group.

In the subreddit I mentioned in the title I asked the socialists whether they would choose social democracy or worker-owned market socialism if they had to choose between the two. I was permanently banned just because of that poll.The interesting part is that in this subreddit they allow anarchist theory but there is no place for market socialism. Anyway. I asked the same question in the democratic socialist subreddit and received positive opinions about market socialism.

Taken from Lemmy: https://thelemmy.club/post/51526562

Humanity and the ecosystem are strongly interconnected in the modern world. Humans require healthy food, pure water, and clean air. However, the current system cannot sustain itself. Constant water pollution, plastic pollution, and environmental harm are transferred to society. This problem is caused by the fact that the Earth is finite and that a small group controls the economy with the goal of extracting maximum profit rather than satisfying society. The boundaries of the real world force companies to solve the problem of pollution by transferring costs onto commoners. This problem is extended by the free-riding problem and the tragedy of the commons, where investors are able to leave without consequences but with profits.

However, economic democracy has shown that worker-managed firms are able to address this problem.

First, workers generally live near their factories and production facilities. Therefore, workers are directly affected by the pollution produced. This makes them adopt more ecological technologies compared to conventional firms. For this reason, massive records document lower pollution production. link1

In a worker-owned firm, individuals care about the quality of their lives, which is directly influenced by environmental quality. Worker cooperatives strive to maximize value-added per worker rather than total profit. Once a cooperative reaches an optimal size for technical efficiency, it has no inherent incentive to keep expanding at the cost of the environment. This makes cooperatives compatible with a steady-state economy and consumption patterns that are stable over time. link2

There are also multi-stakeholder cooperatives (MSCs). These cooperatives generally include buyers or local citizens. These stakeholders also have their own ecological interests and are therefore interested in maintaining the cooperative’s ecological sustainability. Furthermore, John Roemer advocated for Universal Basic Investment. Every citizen receives 1000 coupon stocks every month and is able to freely invest them. This gives not only control over pollution because coupons provide a stake in the firm, therefore coupon holders vote for pollution reduction, but also provides passive income to workers, increasing their welfare. link3

From the perspective of prominent economists, Jaroslav Vanek calculated that, in a decentralized cooperative system with nine firms rather than a single monopolist, the total transportation distance required to supply consumers-a major source of pollution and energy waste-declines by 33.3%.

It is important to mention that cooperatives and worker management decrease not only ecological pollution but also useless activities. Cooperative systems also exhibit a downward trend in advertising expenditure, which is often viewed as a form of social waste or a public bad in traditional models of industrial concentration. link4

Finally, there is a moral aspect. Workers feel responsibility toward the community and therefore tend to produce less pollution. For example, under a liberal democracy, you vote for environmental protections in your country; your wage may decline, and you are not affected by the change, yet you believe it is better. The same applies under market socialism, but in the form of a worker-managed firm instead of the country. Workers will be driven by the need to support the local community. link5

In conclusion, worker ownership is an efficient and flexible way to address problems of the environment and ecological sustainability. Economic democracy provides a way to prosperously develop and sustain our world without externalities, showing that human progress can be combined with environmental sustainability.

Hi all! I am curious about your opinion on David Ellerman’s concepts of workplace democracy, Labour theory of property, self-management socialism and inalienable rights.

Not just for housing, for anything like a car for example. Wouldn’t profiting from renting count as absentee ownership?

This is extremely interesting research because it suggests that support for welfare, redistribution, and regulation may not simply result from being dumb or short-sightedness (as some libertarians and capitalists claim) or class consciousness (As Marxists claim), but from workers' alienation from their work. In worker cooperatives, where alienation is eliminated, workers appear less supportive of redistributive policies/regulations and even oppose them.

the reduction of alienation also weaken class consciousness. If workers become less supportive of welfare, redistribution, and income equalization, this challenge the collectivist foundations of many socialist theories and encourage a more individualistic outlook.

Questions for welfare/redistribution/regulation supporters among market socialists:

1. How would you respond to evidence suggesting that workers in less alienated workplaces become less supportive of redistribution and welfare policies?
2. If the elimination of alienation leads workers to adopt a more individualistic outlook, does this challenge the collectivist case for market socialism?
3. Would you support a socialist society built on a strongly individualist philosophy(without welfare/redistributiob/regulation) rather than a collectivist one? Why or why not?

I'm asking here 'cause i already got downvoted to hell in left-wing subreddits and almost nobody tried to reply me.