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Joined 2 years ago
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Cake day: June 14th, 2023

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  • Even something very simple like a coffee shop is difficult to run as a co-op.

    Yes, if you have a few friends who are all passionate about coffee it’s possible for you all to get loans / mortgages to pool together enough money to buy/lease a small commercial property and open a coffee shop together. The only really significant pieces of equipment are the espresso machine and coffee grinder, both of which can be bought used for a few thousand dollars.

    But here comes the issue: suppose it’s you and 4 friends who started the coffee co-op with $200k each (total $1 million) to buy the real estate and all of the furniture and machinery. Now the 5 of you work in the coffee shop and it starts growing more successful so that you need to hire more baristas (or pastry chefs or sandwich artists) to work there. How many baristas can you find who can afford to put up $200k to buy into a share of the co-op?

    Or even more fundamentally: what if 2 out of the starting 5 decide that working in a coffee shop is too exhausting and they don’t want to do it anymore so they quit? Now the other 3 need to put together a total of $400k to buy them out? Or do you have a clause in the contract which says they forfeit their investment if they quit? Now I dunno about you, but as much as I love using my espresso machine I would never want to enter a contract like that! I’d much rather keep my $200k in the bank and work as a regular employee barista knowing I could quit any time I want.


  • They don’t have access to capital (means of production). Consider the following scenario:

    All of the employees at a car manufacturing plant are sick of being paid a fraction of the total sale price of the cars they make. They decide, in solidarity, to quit en masse and start a worker co-op car plant instead so that they can all enjoy sharing 100% of the profits themselves.

    So they quit. Now what? Well, knowledge isn’t an issue because they already knew how to operate all the machines in a car plant. The problem is that they don’t have the money (or the land) to build a new car plant. We’re talking billions of dollars and a huge piece of land which ideally should be located on a railroad line so that parts (which are very large and heavy) can be delivered affordably by rail.

    So where are they gonna get the money? Not from private investors, of course, since that nixes the worker only profit sharing arrangement. Not from banks either because these workers, while highly knowledgeable and motivated, don’t have any collateral to put up for the bank loans. The banks do not want to be in the position of repossessing a bunch of specialized manufacturing equipment and trying to resell it at a loss.

    The common response to this is: the government. But think about that. Do you want your government giving billions of dollars to a few hundred people so they can start a car plant and then keep all the profits?