While I have not dug into the paper yet, if it's based upon the same reasoning as the blog post, given this is the author's promotion of it, I'm going to dismiss it as drek based upon, in his own...
While I have not dug into the paper yet, if it's based upon the same reasoning as the blog post, given this is the author's promotion of it, I'm going to dismiss it as drek based upon, in his own words, the gist of the arguement. He's arguing that there is essentially no reason we should be promoting co-ops over traditional ownership. I'm going to quote the key bit.
My point is that there are very few additional benefits, to society in general, above and beyond the benefits that are enjoyed by the members. Cooperatives are good for their owners, just as corporations are good for their owners, with the implication that neither is intrinsically better than the other. The appearance of superior virtue for the cooperative form is most often based on differential sympathy, and in particular, a rather striking lack of sympathy for investors as a constituency. If one adopts an impartial perspective, treating the economic interests of all individuals equally, there is no real basis for this asymmetry.
The problem with this dismissal of sympathy of co-ops is that, broadly speaking, the vast majority of people are not investors. Co-ops thus recieve more sympathy because they create investors out of laborers. So when you hone on the specific answer to the clickbait title:
My point is that there are very few additional benefits, to society in general, above and beyond the benefits that are enjoyed by the members.
It is easily dismissed by rudimentary logic.
Cooperatives are better for members than traditional companies
Members are people
People are part of society
Therefore, having all people being members of a co-op is better for society
Thus, we should promote cooperative ownership so more people are members
This does not dig into whether the co-ops will make more moral choices than companies, but if they are otherwise equal, there is still a net benefit to society. You could argue that it is not a net benefit because investors lose out, but you would be wrong because it's been proven time and again that societies with low income inequality provide a better quality of life.
I didn't read the journal article either, as the blog post didn't leave me wanting more. I'm not sure he's dismissing co-ops, I suspect he isn't. But then I don't see the value in the point that...
Exemplary
I didn't read the journal article either, as the blog post didn't leave me wanting more. I'm not sure he's dismissing co-ops, I suspect he isn't. But then I don't see the value in the point that both co-ops and corporations exist to serve their members (where members = investors). It's true, but only without context.
As you say, if a co-op is better for its members, and those members are part of society, then it's good for society. With co-ops the majority of customers are also members, with corporations, investors are a tiny minority of customers.
I think we can dig in to moral choices without getting too far into the weeds, simply put co-ops are highly incentivized by their nature to care about the communities they serve. Co-op investors are largely everyday community members. Corporations are highly incentivized by law, custom and enonomics to care primarily about investors. They have no meanful connection to any community outside of investors, except where they're forced to care for marketing or regulatory reasons. It's hard to pretend the two are comparable with a straight face.
On top of that, co-ops (of the sort the post seems to be referring to) don't exist to make large profits for their investors. They exist to sell their customer/investors things at fair prices. Whereas corporations exist to extract as much value out of communities as possible and ship a large part of that value off to investors who are not a part of the community. That might be better for society at large if the extracted value was benefitting a large part of society... but we know that most of that extracted value goes to less than 1% of the population.
I suppose the frustratingly obtuse and unsupported claim that the two entities are comparable could be the point of the post, as a way to get people to rage click to the journal article wherein they'll be surprised by the compelling nature of the arguments there... But I'll leave that discovery to someone else.
My thoughts exactly. This final point is willfully ignorant of the dynamics at play. Of course there's a striking lack of sympathy for investors, not everyone is an investor, and those that are,...
My thoughts exactly. This final point is willfully ignorant of the dynamics at play.
in particular, a rather striking lack of sympathy for investors as a constituency. If one adopts an impartial perspective, treating the economic interests of all individuals equally, there is no real basis for this asymmetry.
Of course there's a striking lack of sympathy for investors, not everyone is an investor, and those that are, are not doing it for any benefit beyond their own.
Strongly agreed, although I'd maybe add a point 2(a) along the lines of "There are more members per co-op than investors per corporation" - and since the author is so keen on impartiality, I'm...
Strongly agreed, although I'd maybe add a point 2(a) along the lines of "There are more members per co-op than investors per corporation" - and since the author is so keen on impartiality, I'm sure they'd agree that it's superior to benefit more people rather than fewer, after all.
I think the most revealing line about the author's attitude as a whole is this:
If one adopts an impartial perspective, treating the economic interests of all individuals equally, there is no real basis for this asymmetry.
For that to make sense, they're necessarily saying that it's "impartial" to disregard current wealth, and even if we ignore that they're also saying that it's somehow possible to consider the economic interests as "equal" whether a vast sum of money goes to a single person or is shared among hundreds of people.
Genuinely, the only way I can retrofit that to any definition of impartiality that I understand is if we're personifying the money itself and saying it doesn't care which bank account it sits in. With any sane reading, it sounds as if the author is using the language of detachment and scientific rigour to make what is, in fact, a very strongly opinionated point.
Your rudimentary logic can be equally applied in the other direction by replacing members with shareholders (who are also people). The distinction needs to be the constituency of those groups,...
Your rudimentary logic can be equally applied in the other direction by replacing members with shareholders (who are also people).
The distinction needs to be the constituency of those groups, since while shareholders includes middle-class 401k owners, it's overwhelmingly dominated by a small number of the rich. An illustrative example is 100 people investing $1 each (either liquid or as labour) vs 1 person investing $93, 1 person investing $5, and then 2 people investing $1 each. Benefiting 100 people is obviously a greater benefit for society than benefiting 4 people (even though 1 of those 4 benefits a lot).
This may be valid from a pure economic extraction paradigm(I am dubious), but there are other considerations. What incentive does a 401k shareholder have to care about the working conditions of...
This may be valid from a pure economic extraction paradigm(I am dubious), but there are other considerations.
What incentive does a 401k shareholder have to care about the working conditions of the company they've invested in? Furthermore, what options does this shareholder have to direct their investments towards companies that align with their interests? There are, IME, very few retirement funds, 401 or otherwise, that give you any granularity in your choice of investments. It's just a pool of pre chosen market funds that you can put your money into. The lack of agency in this decision adds a layer of abstraction to whatever you're investing in and forces you to choose the investment which will maximize your return. In the handful of plans I've been a part of, I haven't seen a green energy fund, a unionized shop fund, or anything along those lines which to me would be more "virtuous".
There definitely are "socially responsible funds". Not an endorsement, due diligence green washing etc, but as an example (wealthsimple) and ESGs in general (Schwab) Edit: non expert advice. If...
EFT funds for [...] stocks that do not violate social and environmental values [...] Green and social bonds, which provide fixed income exposure and directly fund projects linked to environmental and social causes
Common approaches to ESG include:
Values-based investing, also called negative screening, which focuses on excluding companies from the portfolio. This approach appeals most strongly to investors who care about avoiding investments in companies that don't align with their values.
Integration, which attempts to improve the risk/return profile by considering environmental, social, and governance (ESG) risks in the investment process. In this approach, portfolios are constructed by selecting companies that score well on material ESG issues that are important for those companies' sector.
Impact investing, which refers to explicitly deploying investment dollars in an effort to directly achieve a desired outcome. Impact investors are typically more concerned with making a difference in the world or environment through the companies they invest in.
Edit: non expert advice. If possible, I would encourage everyone to transfer, don't pull out, the funds from your company mandated packages, to funds that align with one's values. They do exist: access is behind platforms that cater to YOU as a retail investor instead of your employer. There are so many options, and some platforms now give small potatoes investors a lot of granularity and choice for even several hundred bucks of your portfolio, or lets you choose percentages and make adjustments throughout the year without penalties. Don't like this country? Pick an EX-[country/region] fund. Don't like these companies? Try this fund which excludes Nestle. They do exist, but most employees don't know how to get to them that's all.
This is all well and good, but my comment was limited to the context of access to funds within a retirement plan. Many(a majority I would posit) can't just pick any fund in the world to invest in....
This is all well and good, but my comment was limited to the context of access to funds within a retirement plan. Many(a majority I would posit) can't just pick any fund in the world to invest in. We are limited by the plans offered in the plan.
I would never dispute the existence of these funds, but access is limited. Most people don't hold any investments outside their retirement plansnand therefore are unable to choose their investments freely.
Agreed, and yea I hate how limited they are and how punishing they make it to transfer out. It makes me feel like part of a bundled product my company sold to these firms, rather than myself...
Agreed, and yea I hate how limited they are and how punishing they make it to transfer out. It makes me feel like part of a bundled product my company sold to these firms, rather than myself having any agency and being an actual customer.
One thing I didn't see mentioned in the blog post is sustainability. Cooperatives have a much higher potential to be sustainable, both in the economic and the environmental sense than...
One thing I didn't see mentioned in the blog post is sustainability. Cooperatives have a much higher potential to be sustainable, both in the economic and the environmental sense than corporations. Both types of entities have the potential to be extractive, but the severity of the extraction, whether it be economic(excessive executive compensation, dividends to shareholders, etc.), environmental (resource extraction, inproper waste disposal)- I would expect a co-op to have a greater stake in choosing the more sustainable option. Who would you expect to make better decisions where the competing interests are either maximize profits or have an environment that is livable?
I also would like to know why the author chose this framing. Why is "virtue" the paradigm he chose to operate in, and not something more quantifiable? It smells like he had a conclusion and worked backwards from there. ED: I now see why he chose this framing, the author is not a sociologist or economist, but a philosopher. This sufficiently explains the framing for me. Shame on me for assuming bad faith.
You seem pretty sure about this, but how do we know that coops are more sustainable than corporations, on average? For example, I think that in the US, both credit unions and banks are pretty...
You seem pretty sure about this, but how do we know that coops are more sustainable than corporations, on average? For example, I think that in the US, both credit unions and banks are pretty long-lived, and I couldn’t say offhand which ones are older or how many of each have gone out of business. It seems like someone would need to do a study.
It would also matter a lot how one decides to do the comparisons. I would want to do comparisons within the same industry, at least.
Meanwhile, I would guess that there are a lot fewer coops than corporations in extractive industries like mining, but I’m not sure that a coop would necessarily make sense or do a better job. The customers of mines are businesses, so I’m not sure how it would work.
Look at the incentives. Where are the incentives of a corporation owned by private equity(now a majority of corps in the us) or publicly traded corporations? Do they align with environmental...
Look at the incentives. Where are the incentives of a corporation owned by private equity(now a majority of corps in the us) or publicly traded corporations? Do they align with environmental sustainability in the communities they operate in? Of course not. They're beholden to their ownership to maximize profits. Does that logic make sense to you?
Take consumer packaged goods like soap. Does Procter & Gamble have an incentive to use more expensive non plastic packaging that doesn't pollute the environment? Having trouble thinking of a co-op CPG company at the moment, but in my mind there would be more motivation in my mind to lessen environmental impact when the owners of the company are local to that company and would see the impacts first-hand.
You made two different claims (about economic versus environmental sustainability) that have different answers. For example, ExxonMobil (if you include its predecessors) is more than a 140 years...
You made two different claims (about economic versus environmental sustainability) that have different answers. For example, ExxonMobil (if you include its predecessors) is more than a 140 years old and shows no signs of disappearing. Whether a company is environmentally friendly isn't the same thing at all.
I don't think Procter & Gamble shows any signs of disappearing either?
My point in the P&G example is that when presented with the choice- make more money or preserve the environment- they will always choose the former. This is undeniable. For them, choosing the...
My point in the P&G example is that when presented with the choice- make more money or preserve the environment- they will always choose the former. This is undeniable. For them, choosing the latter when they didn't have to would be shirking their fiduciary duty in the eyes of their owners. This has little bearing on their economic sustainability. A co-op can make that choice, since they can choose the point at which they're making "enough profit". For P&G there is no such thing as "enough profit".
Going back to your example of a mining company, I can envision a co-operative mining company. Co-ops generally trend smaller, and locally owned. So this hypothetical company has a stake in preserving, somewhat, the integrity of the environment that they operate in since their worker-owners don't want to live in a deteriorating environment. Contrast this with a large multinational mining corporation, which will operate under an economic imperialist mindset, extract as much as you can, as cheaply as you can, environment be damned. If the local government tries to put the brakes on, you sue under ISDS to be able to continue what you're doing.
Now back to the original premise of your post. Which of these do you view as more virtuous? I think you could guess my answer.
ED: a better way of phrasing the question may be- which has the capacity to act in a more virtuous way?
I don’t think it’s true that for-profit businesses always choose the plan that will make them more money. Predicting the future is hard and it’s not always clear which plan will succeed. There are...
I don’t think it’s true that for-profit businesses always choose the plan that will make them more money. Predicting the future is hard and it’s not always clear which plan will succeed. There are a wide variety of things a company could do and also a wide variety of arguments that managers could make about what’s in the firm’s best interest.
I'm not sure what you're trying to say here. Are you saying that you agree it is virtuous for a company to choose profit over protecting the environment provided that there was a possibility that...
I'm not sure what you're trying to say here.
Are you saying that you agree it is virtuous for a company to choose profit over protecting the environment provided that there was a possibility that the chosen action had a chance to not turn a profit?
I'm saying that often it isn't that clear-cut a choice because future profits and environmental impact are both unknown. And since it isn't that clear, sometimes companies might happen to pick...
I'm saying that often it isn't that clear-cut a choice because future profits and environmental impact are both unknown.
And since it isn't that clear, sometimes companies might happen to pick something that's better for the environment.
If we have no basis for judging individual decisions (and it would be hard to judge them without even knowing what decisions were made), how can we say anything about the virtues of one type of...
If we have no basis for judging individual decisions (and it would be hard to judge them without even knowing what decisions were made), how can we say anything about the virtues of one type of organization over another one?
I'd be really interested in your answer to this. I figure since you posted this topic, surely you have some thoughts beyond pedantic quibbling about hypotheticals.
I'd be really interested in your answer to this. I figure since you posted this topic, surely you have some thoughts beyond pedantic quibbling about hypotheticals.
I shared the blog post because the Canadian historical context interested me. Rephrasing the question as "we assume co-ops are more virtuous than regular businesses, but are they really?" It seems...
I shared the blog post because the Canadian historical context interested me. Rephrasing the question as "we assume co-ops are more virtuous than regular businesses, but are they really?" It seems like a decent question. (Also, he points out that New York City already has co-op grocery stores, which seems like a good point in light of Mamdani's plan to open government grocery stores.)
But I don't think the article or the paper really answers the question. Joseph Heath is a conservative Canadian philosopher and tries to answer the question using philosophical methods, and I don't think that gets very far, because it's an empirical matter.
It might be better converted to a research question: when do co-ops have advantages over other businesses, and what advantages are they? And that would better answered using historical research.
I'm not going to do the research, so the only answer I have is "sometimes!"
I work for a co-op & have done so for many years, my part of Canada is still clinging to this idea of egalitarianism I haven’t seen in the cities and that’s part and parcel what made me a...
I work for a co-op & have done so for many years, my part of Canada is still clinging to this idea of egalitarianism I haven’t seen in the cities and that’s part and parcel what made me a socialist. Changing but it still feels like the 2000’s culturally. I will miss this, due the the inevitable march of progress.
I digress, co-op’s are a proven method of paying your neighbours / workers, and cycling that money back into the community. My 2 cents.
I'm curious about your experience working at one, with regards to the article's truism that coops are better for their members. I've mused that I don't find it to be true, but upon further...
I'm curious about your experience working at one, with regards to the article's truism that coops are better for their members.
I've mused that I don't find it to be true, but upon further reflection, that's because I'm rich (asterisk) and have better corporate alternatives. For my elderly, fixed income neighbours, these co-ops are essential because of there being no incentives for growing like cancer. Oh the other hand, being local and "fine" also means there is no will to actually compete on prices.
Take Gateway Meat Market in Atlantic Canada. They've become line-up-around-the-warehouse famous because of their successful low profit large volume strategy; they take great care of their employees; they're independently owned and all the money stays in the province. Not a co-op.
So, not to put you on the spot, but my question to you is, is your co-op awesome for the neighborhood by virtue of it being a co-op, or by virtue of it not being a greedy mega Corp?
I happen to belong to several co-ops, and personal anecdotally, (upon reflection, no,) they are not "better" for me as a member. Co-Op Pros Cons Overall subjective "better" Credit union Staff...
“it is a truism that cooperatives are better for their members – if they weren’t, then their members wouldn’t be their members”
I happen to belong to several co-ops, and personal anecdotally, my mileage very greatly varies, on if they're (upon reflection, no,) they are not "better" for me as a member.
Co-Op
Pros
Cons
Overall subjective "better"
Credit union
Staff recognize me, can transact without bringing in ID
I dread the day another East Asian moves into the community and they try to give them my money or vice versa
Not better
"
Walkable distance
worse interest rates, fees, speed of services than my virtual only bank
Not better
Grocery
short driving distance
much higher prices, plus $1 member share fee per week even when I don't go
Not better
Farm goods
no membership fees
no discernible difference from another farm store on same street except the co-op sells Irving brand wood shavings which are a total rip off
not better
Past credit union
funnier ads, friendlier looking Teller desks.
don't know me from Jack, worst rates and fees than virtual only, had a serious cyber security incident
not better
Housing co-op
very low cost rent compared to market rates
extremely rough neighborhood, scary level health concerns of units
Better *
why Housing was "Better"
The housing one, we were moving from one province to another. The co-op rep charged us a fee and sent pictures etc, and when we showed up to see it in person it was a shock. My friends who were driving us had politely expressed concerns over the area, which we nodded politely to. But the condition of the units was a shock: severe pest current infestation, unusable portions of unit, not working appliances, and doors that felt insecure for the area. To this day, I feel like the co-op rep did a good job bringing in additional income for its members, charging that fee (IIRC about 150-200) before showing us the unit. Probably a good revenue stream from people who then decide they can't live there. Good job. But having said all that: the rent would have been much cheaper than most places we saw, and I see their value. We were moving from one rough cheap rental to see this, and finally moved into another very sketchy part of the region, so we're not picky people who turn our noses up at pawn store / payday loan / soup kitchen / tent in park neighbourhoods at all. Still, we had a young child at the time and the pest issue wouldn't have been something we can overcome. I'm glad it was an option for folks who really super needed the cheaper rent though, so still **Better**, I would say.
Overall, I would say that my experiences with co-op are NOT better at all. But they have value in that they're not part of the oligarchy, that they represent a last bastion of choice for consumers. That's pretty marginal, and unlike the author I would say their benefits is only for society at large, as a source for alternative options, rather than for its members.
I think they're partially joking that that the credit union recognizes them only because they're the only East Asian, so when another East Asian moves to town, they're going to get mixed up. I'm...
I think they're partially joking that that the credit union recognizes them only because they're the only East Asian, so when another East Asian moves to town, they're going to get mixed up. I'm in a similar, flipped situation as one of the only white guys living in a non-white country; a number of the local shops and neighbors recognize me... as the white guy.
:| how does it feel? Do you feel a little like you have to be on your best behaviour, and have become the ambassador of your entire culture? There must be advantages as well, I guess, aside from...
:| how does it feel? Do you feel a little like you have to be on your best behaviour, and have become the ambassador of your entire culture? There must be advantages as well, I guess, aside from free facial recognition.
For a bit of context, I'm currently in Singapore - 75.5% Chinese, 15.1% Malay, 7.6% Indian, and 1.8% "Other" (a category which Wikipedia says are "largely Eurasians", so I'm part of some even...
For a bit of context, I'm currently in Singapore - 75.5% Chinese, 15.1% Malay, 7.6% Indian, and 1.8% "Other" (a category which Wikipedia says are "largely Eurasians", so I'm part of some even smaller percent). My understanding is that historically white people and Europeans would be here with some very high expat compensation package while representing their business, so they tended to self-segregate both by wealth and by culture since they were just here for business. Those big expect packages are much, much less common now, though expats from wealthier countries in general still concentrate in certain areas and housing (city center, private condos, etc.). As a result, there's some mixed feelings about white people, more so with the older crowd, though nothing held strongly as far as I've seen. Walking downtown you'll get a decent mix of people from all over. Where I'm living in one of the heartlands, there's vanishingly few white people, to the point where it wasn't uncommon for my wife to hear things like "Oh, your married to the white guy, right?".
To answer your question, I don't feel any obligation or responsibility to be a shining representative of my race, nationality, or any other similar identity. Don't get me wrong, I'm happy to share my culture and traditions, and lean into exaggerated stereotypes of the white American male for laughs with people who know it's a joke, but I'm not motivated to be better or to compensate for any of these kinds of broad, involuntary identities. An open minded person will see you as an individual regardless of how you behave, while a bigot will attribute any perceived positive as being "one of the good ones" and any perceived negative as "a typical [X]", so no point in making a special effort. Yes, this is a privileged stance as I am not in any elevated danger for my identities where I live. I just try to be a generally good, respectful, civic-minded person, and in general I just care about what my friends and family think about me, not strangers. I am a bit more lawful, but that's just to ensure I don't put my visa at risk.
An interesting perspective! Thank you for sharing that :) it's a bit different for me but 100% agree on this:
An interesting perspective! Thank you for sharing that :) it's a bit different for me but 100% agree on this:
An open minded person will see you as an individual regardless of how you behave, while a bigot will attribute any perceived positive as being "one of the good ones" and any perceived negative as "a typical [X]
@DrStone is spot on. I'm in rural Atlantic Canada. There's not a lot of us East Asians, and the local folks have been living here for many generations without seeing East Asians, so they're not...
I'm in rural Atlantic Canada. There's not a lot of us East Asians, and the local folks have been living here for many generations without seeing East Asians, so they're not very good at picking out differences.
I kid you not, occasionally, I'll get stopped while out shopping outside of my local community, and people will say Oh hey it's so nice to see you again / fancy bumping into you here. Which is dreadful because I have prosopagnosia. It'll take a while for them to mention something I know to be completely impossible, such as seeing me 100s of km away yesterday or at another tourist location. And then we both feel embarrassed. *
At least in my immediate local area we don't get a lot of tourists, so it's always just me they're seeing. And to their credit it's been 5 years I've never seen them do the eye thing or refer to me in slurs or anything like that, just...they recognize me lol.
Edit: the social progressiveness here has been amazing. I don't have people assume I must be related to the other East Asian person they know. Back 20 years ago in Calgary I got asked if I know / am related to rando's a lot.
Great question. I remain a member of all of them except the housing co-op. The grocery co-op is our neighborhood's only option aside from convenience stores: many seniors solely rely on it, and...
Great question. I remain a member of all of them except the housing co-op. The grocery co-op is our neighborhood's only option aside from convenience stores: many seniors solely rely on it, and the co-op donates to our food bank when their stuff expires. So I feel the socially responsible thing is for me to continue my $52 annual fee as well as occasionally paying through the nose when the weather is bad enough I can't drive to the big box stores at the next town. It's not virtue though, I just want that option to keep existing....
The other entities don't actively cost me money to maintain so sure why not. I'll join as many non-oligarchy owned co-ops as feasible, if they're free above a certain low threshold of deposits or whatever and no ongoing fees. They offer no benefits to me as a member but I do believe in their existence has value on a societal level.
The article's author made a distinction between members and non-members, but there's often little difference between inactive members and non-members (particularly when it doesn't cost anything),...
The article's author made a distinction between members and non-members, but there's often little difference between inactive members and non-members (particularly when it doesn't cost anything), so I think that distinction fails.
For websites, that's why they use other metrics, like users who are active within the last week or month.
Also, I think your experience shows that some things (like location) are more important to customers than whether a firm is a co-op or for-profit. Particularly for other people you care about, like seniors.
I guess co-ops are more likely to get "donations" in the form of pricey memberships. Though, some non-profit music or arts venues do that too.
activity is hard to gauge, though, for example, a credit union has votes every now and then, and membership meetings. I attend / vote, but I don't really "contribute" anything. On the other hand,...
activity is hard to gauge, though, for example, a credit union has votes every now and then, and membership meetings. I attend / vote, but I don't really "contribute" anything. On the other hand, there's value, hard economic value, in money just sitting there, and an account that's "active" and accumulating interest. For example, loyalty programs don't even have members that vote, and are completely free, and yet they're worth billions of dollars.
Getting back to the article, the co-ops of the writer's youth provide very tangible benefits to active members in the form of purchasing discounts, or easier access to credit, or the ability to bring in farming products that the local community actually wants.
I guess I should be fairer to co-op here, and say that even though I derive little/no value from my co-ops, my community members super do: many of them might have a hard time building credit, qualifying for loans, recovering from debt, or being able to afford car trips to the big box stores. But that's because of the local-ness of these places, like you said, location, rather than the co-op structure. The local pharmacy allows community members to put groceries and medication "on the tab" until government cheques clear at the end of the month. There were informal co-op's in my parents' generation, where one can buy a cup of rice at a time or a quirt of detergent or to borrow a suit/watch for interviews/meeting the parents. Their very existence is antithesis to a world of multinational conglomerates, and their values are where these conglomerates have shortfalls.
In fact, I wonder if value of co-op isn't highly related to the financial mobility of an individual. A lot of the "nice" things that fancy credit cards and whatnot give to their customers are just things that used to be freely offered by one's community: ability to defer mortgage payments when you get fired, no foreign exchange fees, perks and discounts, notification for concerts, overdraft fees being waived, occasional interest forgiveness, preferred interest rates on loans, credit building etc etc etc. The evil part is that this is all for money now. But the less evil part is that money has evened out discrimination somewhat: these kinds of community perks weren't evenly accessible to everyone: communities can exclude and bully just as readily as they can help one another.
Credit cards can substitute for store credit for people who have them. Before credit cards, I imagine that store credit and other various forms of mutual aid were more important. Nowadays there...
Credit cards can substitute for store credit for people who have them. Before credit cards, I imagine that store credit and other various forms of mutual aid were more important.
Nowadays there are also store-branded credit cards (like for Costco, for example).
In Finland, we have a huge co-op store chain called S-Group. They have roughly 49% market share currently, with the next largest group being at 34%. There seems to be a fair bit of corruption...
In Finland, we have a huge co-op store chain called S-Group. They have roughly 49% market share currently, with the next largest group being at 34%.
There seems to be a fair bit of corruption related to them. Their board is selected by public votes -- anyone who is a member of the store chain can vote. In the end, a lot of people who are in the board of S are also representatives in municipal or national governments. Not surprisingly, if S-group wants something, like a piece of land for their huge megamarket, they get it.
That said, the second largest actor in that market, the Kesko Group (public company, in the stock market), wields similar power.
But it seems that being a co-op does not make a group significantly more benevolent magically. When they get big, they more or less behave just like any other huge company would.
Oh this is certainly a take. I mean, I get that this is basically an ad for the proper journal article, but this blog post basically narrows down to "both corps and coops benefit their owners,...
Oh this is certainly a take.
I mean, I get that this is basically an ad for the proper journal article, but this blog post basically narrows down to "both corps and coops benefit their owners, thus they are the same" which wow.
I do, out of some morbid curiosity, want to check out the proper essay to see if there's any grounding to it other than that?
Because if it isn't then this is just an absolute reductio ad absurdum to the extent that I would've entirely believed to be satire if given as such.
From the blog post, which links to a journal article with the same name: ...
From the blog post, which links to a journal article with the same name:
The status of cooperatives in Western Canada gave rise to one of the major points of divergence between the Canadian and British left in the 20th century. Whereas the U.K. Labour Party’s Clause 4 committed it to “common ownership of the means of production, distribution, and exchange,” which was generally understood to mean public ownership, the Co-operative Commonwealth Federation (CCF) in Canada distinguished itself by affirming a commitment to “social ownership,” which included both public and cooperative management of the economy. It was only much later, especially after the CCF was rebranded as the New Democratic Party (NDP), that unions came to play a more important role. Its primary impetus, in the early days, came from the cooperative sector – especially the tradition of mutual insurance among farmers.
...
I have absolutely no doubt that cooperatives provide enormous benefits to their members (as I put it in the paper, “it is a truism that cooperatives are better for their members – if they weren’t, then their members wouldn’t be their members”). Thus there is good reason to ensure that the law is neutral between different organizational forms. We do not want people to be stuck transacting with a corporation when they could be better off organizing a cooperative. My point is that there are very few additional benefits, to society in general, above and beyond the benefits that are enjoyed by the members. Cooperatives are good for their owners, just as corporations are good for their owners, with the implication that neither is intrinsically better than the other. The appearance of superior virtue for the cooperative form is most often based on differential sympathy, and in particular, a rather striking lack of sympathy for investors as a constituency. If one adopts an impartial perspective, treating the economic interests of all individuals equally, there is no real basis for this asymmetry.
That’s the gist of the argument. The details are more complicated, which is why it’s a journal article and not a blog post.
While I have not dug into the paper yet, if it's based upon the same reasoning as the blog post, given this is the author's promotion of it, I'm going to dismiss it as drek based upon, in his own words, the gist of the arguement. He's arguing that there is essentially no reason we should be promoting co-ops over traditional ownership. I'm going to quote the key bit.
The problem with this dismissal of sympathy of co-ops is that, broadly speaking, the vast majority of people are not investors. Co-ops thus recieve more sympathy because they create investors out of laborers. So when you hone on the specific answer to the clickbait title:
It is easily dismissed by rudimentary logic.
This does not dig into whether the co-ops will make more moral choices than companies, but if they are otherwise equal, there is still a net benefit to society. You could argue that it is not a net benefit because investors lose out, but you would be wrong because it's been proven time and again that societies with low income inequality provide a better quality of life.
I didn't read the journal article either, as the blog post didn't leave me wanting more. I'm not sure he's dismissing co-ops, I suspect he isn't. But then I don't see the value in the point that both co-ops and corporations exist to serve their members (where members = investors). It's true, but only without context.
As you say, if a co-op is better for its members, and those members are part of society, then it's good for society. With co-ops the majority of customers are also members, with corporations, investors are a tiny minority of customers.
I think we can dig in to moral choices without getting too far into the weeds, simply put co-ops are highly incentivized by their nature to care about the communities they serve. Co-op investors are largely everyday community members. Corporations are highly incentivized by law, custom and enonomics to care primarily about investors. They have no meanful connection to any community outside of investors, except where they're forced to care for marketing or regulatory reasons. It's hard to pretend the two are comparable with a straight face.
On top of that, co-ops (of the sort the post seems to be referring to) don't exist to make large profits for their investors. They exist to sell their customer/investors things at fair prices. Whereas corporations exist to extract as much value out of communities as possible and ship a large part of that value off to investors who are not a part of the community. That might be better for society at large if the extracted value was benefitting a large part of society... but we know that most of that extracted value goes to less than 1% of the population.
I suppose the frustratingly obtuse and unsupported claim that the two entities are comparable could be the point of the post, as a way to get people to rage click to the journal article wherein they'll be surprised by the compelling nature of the arguments there... But I'll leave that discovery to someone else.
My thoughts exactly. This final point is willfully ignorant of the dynamics at play.
Of course there's a striking lack of sympathy for investors, not everyone is an investor, and those that are, are not doing it for any benefit beyond their own.
Strongly agreed, although I'd maybe add a point 2(a) along the lines of "There are more members per co-op than investors per corporation" - and since the author is so keen on impartiality, I'm sure they'd agree that it's superior to benefit more people rather than fewer, after all.
I think the most revealing line about the author's attitude as a whole is this:
For that to make sense, they're necessarily saying that it's "impartial" to disregard current wealth, and even if we ignore that they're also saying that it's somehow possible to consider the economic interests as "equal" whether a vast sum of money goes to a single person or is shared among hundreds of people.
Genuinely, the only way I can retrofit that to any definition of impartiality that I understand is if we're personifying the money itself and saying it doesn't care which bank account it sits in. With any sane reading, it sounds as if the author is using the language of detachment and scientific rigour to make what is, in fact, a very strongly opinionated point.
Exactly. If it were arguing about an abstract model or whatever, sure, but this is knowingly and willfully ignorant of the author.
Your rudimentary logic can be equally applied in the other direction by replacing members with shareholders (who are also people).
The distinction needs to be the constituency of those groups, since while shareholders includes middle-class 401k owners, it's overwhelmingly dominated by a small number of the rich. An illustrative example is 100 people investing $1 each (either liquid or as labour) vs 1 person investing $93, 1 person investing $5, and then 2 people investing $1 each. Benefiting 100 people is obviously a greater benefit for society than benefiting 4 people (even though 1 of those 4 benefits a lot).
This may be valid from a pure economic extraction paradigm(I am dubious), but there are other considerations.
What incentive does a 401k shareholder have to care about the working conditions of the company they've invested in? Furthermore, what options does this shareholder have to direct their investments towards companies that align with their interests? There are, IME, very few retirement funds, 401 or otherwise, that give you any granularity in your choice of investments. It's just a pool of pre chosen market funds that you can put your money into. The lack of agency in this decision adds a layer of abstraction to whatever you're investing in and forces you to choose the investment which will maximize your return. In the handful of plans I've been a part of, I haven't seen a green energy fund, a unionized shop fund, or anything along those lines which to me would be more "virtuous".
There definitely are "socially responsible funds". Not an endorsement, due diligence green washing etc, but as an example (wealthsimple) and ESGs in general (Schwab)
Edit: non expert advice. If possible, I would encourage everyone to transfer, don't pull out, the funds from your company mandated packages, to funds that align with one's values. They do exist: access is behind platforms that cater to YOU as a retail investor instead of your employer. There are so many options, and some platforms now give small potatoes investors a lot of granularity and choice for even several hundred bucks of your portfolio, or lets you choose percentages and make adjustments throughout the year without penalties. Don't like this country? Pick an EX-[country/region] fund. Don't like these companies? Try this fund which excludes Nestle. They do exist, but most employees don't know how to get to them that's all.
This is all well and good, but my comment was limited to the context of access to funds within a retirement plan. Many(a majority I would posit) can't just pick any fund in the world to invest in. We are limited by the plans offered in the plan.
I would never dispute the existence of these funds, but access is limited. Most people don't hold any investments outside their retirement plansnand therefore are unable to choose their investments freely.
Agreed, and yea I hate how limited they are and how punishing they make it to transfer out. It makes me feel like part of a bundled product my company sold to these firms, rather than myself having any agency and being an actual customer.
One thing I didn't see mentioned in the blog post is sustainability. Cooperatives have a much higher potential to be sustainable, both in the economic and the environmental sense than corporations. Both types of entities have the potential to be extractive, but the severity of the extraction, whether it be economic(excessive executive compensation, dividends to shareholders, etc.), environmental (resource extraction, inproper waste disposal)- I would expect a co-op to have a greater stake in choosing the more sustainable option. Who would you expect to make better decisions where the competing interests are either maximize profits or have an environment that is livable?
I also would like to know why the author chose this framing. Why is "virtue" the paradigm he chose to operate in, and not something more quantifiable? It smells like he had a conclusion and worked backwards from there. ED: I now see why he chose this framing, the author is not a sociologist or economist, but a philosopher. This sufficiently explains the framing for me. Shame on me for assuming bad faith.
You seem pretty sure about this, but how do we know that coops are more sustainable than corporations, on average? For example, I think that in the US, both credit unions and banks are pretty long-lived, and I couldn’t say offhand which ones are older or how many of each have gone out of business. It seems like someone would need to do a study.
It would also matter a lot how one decides to do the comparisons. I would want to do comparisons within the same industry, at least.
Meanwhile, I would guess that there are a lot fewer coops than corporations in extractive industries like mining, but I’m not sure that a coop would necessarily make sense or do a better job. The customers of mines are businesses, so I’m not sure how it would work.
Look at the incentives. Where are the incentives of a corporation owned by private equity(now a majority of corps in the us) or publicly traded corporations? Do they align with environmental sustainability in the communities they operate in? Of course not. They're beholden to their ownership to maximize profits. Does that logic make sense to you?
Take consumer packaged goods like soap. Does Procter & Gamble have an incentive to use more expensive non plastic packaging that doesn't pollute the environment? Having trouble thinking of a co-op CPG company at the moment, but in my mind there would be more motivation in my mind to lessen environmental impact when the owners of the company are local to that company and would see the impacts first-hand.
You made two different claims (about economic versus environmental sustainability) that have different answers. For example, ExxonMobil (if you include its predecessors) is more than a 140 years old and shows no signs of disappearing. Whether a company is environmentally friendly isn't the same thing at all.
I don't think Procter & Gamble shows any signs of disappearing either?
My point in the P&G example is that when presented with the choice- make more money or preserve the environment- they will always choose the former. This is undeniable. For them, choosing the latter when they didn't have to would be shirking their fiduciary duty in the eyes of their owners. This has little bearing on their economic sustainability. A co-op can make that choice, since they can choose the point at which they're making "enough profit". For P&G there is no such thing as "enough profit".
Going back to your example of a mining company, I can envision a co-operative mining company. Co-ops generally trend smaller, and locally owned. So this hypothetical company has a stake in preserving, somewhat, the integrity of the environment that they operate in since their worker-owners don't want to live in a deteriorating environment. Contrast this with a large multinational mining corporation, which will operate under an economic imperialist mindset, extract as much as you can, as cheaply as you can, environment be damned. If the local government tries to put the brakes on, you sue under ISDS to be able to continue what you're doing.
Now back to the original premise of your post. Which of these do you view as more virtuous? I think you could guess my answer.
ED: a better way of phrasing the question may be- which has the capacity to act in a more virtuous way?
I don’t think it’s true that for-profit businesses always choose the plan that will make them more money. Predicting the future is hard and it’s not always clear which plan will succeed. There are a wide variety of things a company could do and also a wide variety of arguments that managers could make about what’s in the firm’s best interest.
I'm not sure what you're trying to say here.
Are you saying that you agree it is virtuous for a company to choose profit over protecting the environment provided that there was a possibility that the chosen action had a chance to not turn a profit?
I'm saying that often it isn't that clear-cut a choice because future profits and environmental impact are both unknown.
And since it isn't that clear, sometimes companies might happen to pick something that's better for the environment.
And what relation does that have to the virtue of one type of organization versus another?
If we have no basis for judging individual decisions (and it would be hard to judge them without even knowing what decisions were made), how can we say anything about the virtues of one type of organization over another one?
I'd be really interested in your answer to this. I figure since you posted this topic, surely you have some thoughts beyond pedantic quibbling about hypotheticals.
I shared the blog post because the Canadian historical context interested me. Rephrasing the question as "we assume co-ops are more virtuous than regular businesses, but are they really?" It seems like a decent question. (Also, he points out that New York City already has co-op grocery stores, which seems like a good point in light of Mamdani's plan to open government grocery stores.)
But I don't think the article or the paper really answers the question. Joseph Heath is a conservative Canadian philosopher and tries to answer the question using philosophical methods, and I don't think that gets very far, because it's an empirical matter.
It might be better converted to a research question: when do co-ops have advantages over other businesses, and what advantages are they? And that would better answered using historical research.
I'm not going to do the research, so the only answer I have is "sometimes!"
I work for a co-op & have done so for many years, my part of Canada is still clinging to this idea of egalitarianism I haven’t seen in the cities and that’s part and parcel what made me a socialist. Changing but it still feels like the 2000’s culturally. I will miss this, due the the inevitable march of progress.
I digress, co-op’s are a proven method of paying your neighbours / workers, and cycling that money back into the community. My 2 cents.
I'm curious about your experience working at one, with regards to the article's truism that coops are better for their members.
I've mused that I don't find it to be true, but upon further reflection, that's because I'm rich (asterisk) and have better corporate alternatives. For my elderly, fixed income neighbours, these co-ops are essential because of there being no incentives for growing like cancer. Oh the other hand, being local and "fine" also means there is no will to actually compete on prices.
Take Gateway Meat Market in Atlantic Canada. They've become line-up-around-the-warehouse famous because of their successful low profit large volume strategy; they take great care of their employees; they're independently owned and all the money stays in the province. Not a co-op.
So, not to put you on the spot, but my question to you is, is your co-op awesome for the neighborhood by virtue of it being a co-op, or by virtue of it not being a greedy mega Corp?
I happen to belong to several co-ops, and personal anecdotally,
my mileage very greatly varies, on if they're(upon reflection, no,) they are not "better" for me as a member.why Housing was "Better"
The housing one, we were moving from one province to another. The co-op rep charged us a fee and sent pictures etc, and when we showed up to see it in person it was a shock. My friends who were driving us had politely expressed concerns over the area, which we nodded politely to. But the condition of the units was a shock: severe pest current infestation, unusable portions of unit, not working appliances, and doors that felt insecure for the area. To this day, I feel like the co-op rep did a good job bringing in additional income for its members, charging that fee (IIRC about 150-200) before showing us the unit. Probably a good revenue stream from people who then decide they can't live there. Good job. But having said all that: the rent would have been much cheaper than most places we saw, and I see their value. We were moving from one rough cheap rental to see this, and finally moved into another very sketchy part of the region, so we're not picky people who turn our noses up at pawn store / payday loan / soup kitchen / tent in park neighbourhoods at all. Still, we had a young child at the time and the pest issue wouldn't have been something we can overcome. I'm glad it was an option for folks who really super needed the cheaper rent though, so still **Better**, I would say.Overall, I would say that my experiences with co-op are NOT better at all. But they have value in that they're not part of the oligarchy, that they represent a last bastion of choice for consumers. That's pretty marginal, and unlike the author I would say their benefits is only for society at large, as a source for alternative options, rather than for its members.
What is this in reference to?
I think they're partially joking that that the credit union recognizes them only because they're the only East Asian, so when another East Asian moves to town, they're going to get mixed up. I'm in a similar, flipped situation as one of the only white guys living in a non-white country; a number of the local shops and neighbors recognize me... as the white guy.
:| how does it feel? Do you feel a little like you have to be on your best behaviour, and have become the ambassador of your entire culture? There must be advantages as well, I guess, aside from free facial recognition.
For a bit of context, I'm currently in Singapore - 75.5% Chinese, 15.1% Malay, 7.6% Indian, and 1.8% "Other" (a category which Wikipedia says are "largely Eurasians", so I'm part of some even smaller percent). My understanding is that historically white people and Europeans would be here with some very high expat compensation package while representing their business, so they tended to self-segregate both by wealth and by culture since they were just here for business. Those big expect packages are much, much less common now, though expats from wealthier countries in general still concentrate in certain areas and housing (city center, private condos, etc.). As a result, there's some mixed feelings about white people, more so with the older crowd, though nothing held strongly as far as I've seen. Walking downtown you'll get a decent mix of people from all over. Where I'm living in one of the heartlands, there's vanishingly few white people, to the point where it wasn't uncommon for my wife to hear things like "Oh, your married to the white guy, right?".
To answer your question, I don't feel any obligation or responsibility to be a shining representative of my race, nationality, or any other similar identity. Don't get me wrong, I'm happy to share my culture and traditions, and lean into exaggerated stereotypes of the white American male for laughs with people who know it's a joke, but I'm not motivated to be better or to compensate for any of these kinds of broad, involuntary identities. An open minded person will see you as an individual regardless of how you behave, while a bigot will attribute any perceived positive as being "one of the good ones" and any perceived negative as "a typical [X]", so no point in making a special effort. Yes, this is a privileged stance as I am not in any elevated danger for my identities where I live. I just try to be a generally good, respectful, civic-minded person, and in general I just care about what my friends and family think about me, not strangers. I am a bit more lawful, but that's just to ensure I don't put my visa at risk.
An interesting perspective! Thank you for sharing that :) it's a bit different for me but 100% agree on this:
@DrStone is spot on.
I'm in rural Atlantic Canada. There's not a lot of us East Asians, and the local folks have been living here for many generations without seeing East Asians, so they're not very good at picking out differences.
I kid you not, occasionally, I'll get stopped while out shopping outside of my local community, and people will say Oh hey it's so nice to see you again / fancy bumping into you here. Which is dreadful because I have prosopagnosia. It'll take a while for them to mention something I know to be completely impossible, such as seeing me 100s of km away yesterday or at another tourist location. And then we both feel embarrassed. *
At least in my immediate local area we don't get a lot of tourists, so it's always just me they're seeing. And to their credit it's been 5 years I've never seen them do the eye thing or refer to me in slurs or anything like that, just...they recognize me lol.
Did you remain a member of any of these? If so, why, if there are better alternatives?
Great question. I remain a member of all of them except the housing co-op. The grocery co-op is our neighborhood's only option aside from convenience stores: many seniors solely rely on it, and the co-op donates to our food bank when their stuff expires. So I feel the socially responsible thing is for me to continue my $52 annual fee as well as occasionally paying through the nose when the weather is bad enough I can't drive to the big box stores at the next town. It's not virtue though, I just want that option to keep existing....
The other entities don't actively cost me money to maintain so sure why not. I'll join as many non-oligarchy owned co-ops as feasible, if they're free above a certain low threshold of deposits or whatever and no ongoing fees. They offer no benefits to me as a member but I do believe in their existence has value on a societal level.
The article's author made a distinction between members and non-members, but there's often little difference between inactive members and non-members (particularly when it doesn't cost anything), so I think that distinction fails.
For websites, that's why they use other metrics, like users who are active within the last week or month.
Also, I think your experience shows that some things (like location) are more important to customers than whether a firm is a co-op or for-profit. Particularly for other people you care about, like seniors.
I guess co-ops are more likely to get "donations" in the form of pricey memberships. Though, some non-profit music or arts venues do that too.
activity is hard to gauge, though, for example, a credit union has votes every now and then, and membership meetings. I attend / vote, but I don't really "contribute" anything. On the other hand, there's value, hard economic value, in money just sitting there, and an account that's "active" and accumulating interest. For example, loyalty programs don't even have members that vote, and are completely free, and yet they're worth billions of dollars.
Getting back to the article, the co-ops of the writer's youth provide very tangible benefits to active members in the form of purchasing discounts, or easier access to credit, or the ability to bring in farming products that the local community actually wants.
I guess I should be fairer to co-op here, and say that even though I derive little/no value from my co-ops, my community members super do: many of them might have a hard time building credit, qualifying for loans, recovering from debt, or being able to afford car trips to the big box stores. But that's because of the local-ness of these places, like you said, location, rather than the co-op structure. The local pharmacy allows community members to put groceries and medication "on the tab" until government cheques clear at the end of the month. There were informal co-op's in my parents' generation, where one can buy a cup of rice at a time or a quirt of detergent or to borrow a suit/watch for interviews/meeting the parents. Their very existence is antithesis to a world of multinational conglomerates, and their values are where these conglomerates have shortfalls.
In fact, I wonder if value of co-op isn't highly related to the financial mobility of an individual. A lot of the "nice" things that fancy credit cards and whatnot give to their customers are just things that used to be freely offered by one's community: ability to defer mortgage payments when you get fired, no foreign exchange fees, perks and discounts, notification for concerts, overdraft fees being waived, occasional interest forgiveness, preferred interest rates on loans, credit building etc etc etc. The evil part is that this is all for money now. But the less evil part is that money has evened out discrimination somewhat: these kinds of community perks weren't evenly accessible to everyone: communities can exclude and bully just as readily as they can help one another.
Credit cards can substitute for store credit for people who have them. Before credit cards, I imagine that store credit and other various forms of mutual aid were more important.
Nowadays there are also store-branded credit cards (like for Costco, for example).
In Finland, we have a huge co-op store chain called S-Group. They have roughly 49% market share currently, with the next largest group being at 34%.
There seems to be a fair bit of corruption related to them. Their board is selected by public votes -- anyone who is a member of the store chain can vote. In the end, a lot of people who are in the board of S are also representatives in municipal or national governments. Not surprisingly, if S-group wants something, like a piece of land for their huge megamarket, they get it.
That said, the second largest actor in that market, the Kesko Group (public company, in the stock market), wields similar power.
But it seems that being a co-op does not make a group significantly more benevolent magically. When they get big, they more or less behave just like any other huge company would.
Oh this is certainly a take.
I mean, I get that this is basically an ad for the proper journal article, but this blog post basically narrows down to "both corps and coops benefit their owners, thus they are the same" which wow.
I do, out of some morbid curiosity, want to check out the proper essay to see if there's any grounding to it other than that?
Because if it isn't then this is just an absolute reductio ad absurdum to the extent that I would've entirely believed to be satire if given as such.
From the blog post, which links to a journal article with the same name:
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