Worker Cooperatives(pro) versus traditional, capitalist businesses(con)

Productivity of worker cooperatives compared to conventional/traditional businesses. It has been found in a study conducted by Ben Craig, of the federal reserve bank of Cleveland, and John Pencavel, of Standford University, that worker cooperatives within the plywood industry are more materially productive than traditional firms[4, pg 124]. The reasons they believe for this are because: 1) "A co-op mitigates he agency cost associated with a corporation's division between ownership and control". Since co-ops are owned by the workers, they are much more likely to be informed about the business decisions than if they weren't owners, thus there is no need to spend extra time from business owners to educate them on this matter. [4, pgs 124-125) 2) Worker co-ops eliminate "the separation of interests between workers and owners. "[4 pg 125] As one can imagine, there are many instances in which a conventional firm would be presented with opportunities where they can make a decision that more benefits them and harms the workers. The workers would be opposed to this, and normally what happens in a conventional firm, is that bargaining goes on and this takes up precious time that could be devoted to work. In a co-op, this bargaining would not take place, since worker-owners would likely choose what benefits the majority of the workers, whereas in a traditional business, the owner would choose what only benefits themselves. 3) Workers are able to monitor each other better than in traditional businesses where the monitor is a single manager [4, pgs 125-126]. This makes sense as well, since in co-ops, the workers are the ones who make the decisions of the company, and would be involved in hiring and firing other workers. Co-workers are more often among their co-workers than a manager is, so they would be able to monitor their co-workers more effectively than a manager. This provides incentive for each worker to provide their best work and not laze around. 4) This fourth reason they give is only applicable in the case where both traditional businesses and workers co-ops exist in a society, so since I am arguing for worker-coops, it can be assumed I would argue for a society with mostly or only worker coops, I suppose this one wouldn't apply to help my case so I won't mention it, but you can look at it yourself, if you want, it's on page 126. Now, to play part of my opponent, it could be argued that worker co-ops would take longer to make ordinary business decisions and this would negatively impact productivity. I would argue to the contrary, howeve. Since multiple people are involved in the decision process rather than just one, two, or a few business owners, it means the decision is more likely to be beneficial to the company as a whole, so while it may take longer, it will be a higher quality policy. The evidence I present later in this round will also support this idea, such as how coops are more likely to survive the first 5 years of being in business than traditional firms. Additionally, when a rich person is in charge of the decisions of a business, they are more likely to be dissociated with the majority of people(who are poor and middle class) and so they may make decisions for the business that would only help the minority of people(rich) when a good business would try to appeal to majority of people in order to survive. It should be noted that in the study, it was found that labor productivity of traditional firms is higher than in coops, however material productivity is usually higher in coops. [4, pg 141] In other words, traditional firms produce more at a lower quality than coops. I would argue that quality should be preferred to quanitity. If you can buy a product that is of higher quality, it will last longer, and over all, you spend less because you don't have to spend on transportation to the stores as much as you would for a lower quality product. How do co-ops and traditional businesses compare for success? Cooperatives are actually, in many ways, more successful than traditional business models. For example, 80% of cooperatives survive the first 5 years of being in business, compared to 41% of the traditional business model. [5, pg 8] This makes sense for the same reasons I said in the previous topic in the second to last paragraph where I said "additionally, when a rich person. .. " In a comparative study performed by Gabriel Burdin and Andres Dean, where they looked into how cooperatives performed in the Uruguayan economic crisis between 1999-2001, it was found that "average employment and wages in WCs[worker cooperatives] tend to be greater than in CFs[capitalist firms]. " [6, pg. 522] The wage being higher definitely makes sense, since in a worker-cooperative, there is no person at the top taking a percentage of the business profits as their own, personal, income. Instead, this income is spread across the workers, which would mean their wages would be higher. It is also the case that capitalist businesses do not have a monopoly on being the only business type that has multi-billion profit turnover. Mondragon Corporation is the largest cooperative in the world and "is the tenth-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country" where, in 2015, they had a revenue of 12.11 billion euros[7] Now, there are many more capitalist firms which have more profit than the world's largest cooperative, this is true, but as I will point out later, there is reason why capitalist businesses are the majority in the world, and this would also mean they will likely have more businesses who are much more succesful than the best worker-coop. Morality of cooperative businesses versus traditional businessesTraditional businesses are immoral because they have an unncessary position which takes money away from people who could be earning it instead. The business owner is an unnecessary position and they take a percentage of the profits based on what the workers do. That profit could be distributed amongst the workers if the business owner was not there and the employees owned the business. The fact that cooperatives do exist, show that a business owner is not necessary. While someone could argue that since there are so few cooperatives, this shows that a business owner is necessary in order to have success in a company, this is proven false with the facts I showed about cooperatives above. Essentially, a cooperative gives a level of consent not seen in traditional businesses. A person has to work in order to survive, so the fact that business owners know this mean they can have outrageuous demands on the workers, since they may not have any other option. It often takes many applications to jobs to finally get one, so a person is desperate enough to make a living that they will be forced to put up with a tyrannical business owner. However, if all of the businesses were cooperatives, the worker would have a say in business rules, decisions, etc. Similar to how governments that don't give a consent to the governed are immoral, so are traditional businesses for the same reason. Potential argument against cooperatives:"If cooperatives were so much better than traditional businesses, then we should see cooperatives out-competing traditional businesses, but traditional businesses are still the vast majority"While cooperatives are so few and far between, the primary reason is because the system is constructed in such a way that favors capitalist companies. For one, banks rarely loan out to cooperatives[8](despite the fact that the ones that do exist are generally more successful than their capitalist counterparts as established above), most governments only ever bail out traditional businesses and almost never cooperatives, cooperatives are not generally set-up to out-compete other companies either[8], and finally cooperatives are at a disadvantage since the vast majority(89%) of people can't even define what a cooperative is[9], I personally didn't even know what a cooperative was until I was 20, but I could give you a basic idea of what a capitalist business was before I was 10. I think I can safely assume that a vast majority of people have heard of and can define what a traditional/capitalist business is like, so most people shop at those and people looking to create a business probably never thought about making it a cooperative instead of a traditional business since most don't even know what one is. I would also argue that, for those seeking to become business owners if they do know what a coop is, they don't want to make it a coop because they are selfish and don't want to share the business with the workers of that business. Sources:[4] . http://citeseerx.ist.psu.edu...[5] . http://www.uk.coop... [6] . http://disjointedthinking.jeffhughes.ca... [7] dragon_Corporation">. https://en.wikipedia.org... dragon_Corporation (I often have trouble posting this link on here, somehow it always gets broken up. "mon dragon" in general gets broken up every time I type it. If it happens again, just search for "mon dragon corporation" on wikipedia without anything in between the n and d in the word) [8] [9] . http://www.geo.coop...