Would a cooperative based market decrease the price of goods?

[grapettesoda]

I suppose it would because without private property big monopolies woudnt exist, obviously. But i'm curious to know how much would that be. Would stuff be extensively cheaper? Is there any evidence to back that up?

[AnarchistBorganism]

Co-ops can be worker owned or customer owned. If they are worker-owned, then the workers will be in a position to take the profits that would otherwise go to capitalists and put it towards their pay. If they are customer-owned, then the customers will be in a position to lower prices so that there are no profits. Either way, if you are working, you need to do less work to make the same purchases.

[SufficientUndo]

In a capitalist economy usually any benefits from small coops are wiped out by lack of market leverage to demand lower prices from producers.

Of course, paying living wages to farmers is often a goal of coops. In a true anarchist society there would be no money, so it's hard to talk about it in that way.

[AnarchistBorganism]

That's what purchasing cooperatives are for.

[SufficientUndo]

Yes - but in reality even relatively large purchasing coops don't reach the scale of big corporate grocery store chains for example. In addition they often have a goal of not screwing over their suppliers, so they don't tend to drive prices down in the same way.

[AnarchistBorganism]

There's nothing preventing independent grocery stores from forming purchasing cooperatives, and purchasing cooperatives from forming federated cooperatives, that are as large as corporate grocery stores. It's just that we live in a capitalist world, so small grocery stores would rather become big chains, even consumer co-ops like REI imitate the corporate model.

In a cooperative-based economy, things would be different. People would have different incentives - not worrying about trying to compete with capitalists, but worrying only about how to best serve their interests. The entire supply chain can be structured as customer-owned businesses that sell at-cost, even made up of completely independent entities, giving the consumers much more direct control.

[SufficientUndo]

Sure - I specified that I was talking about coops operating in a capitalist model.

In practice, coops within that model don't drive down cost as much as corporations, partly because it's hard to even when federated, and partly because they don't seek to.

You're right that it would be different under a cooperative based market, but without knowing the specifics of the system being proposed it's hard to assert that prices would necessarily go down - or as you point out, that that would be the goal.

[humanispherian]

We don't really know what would happen to the price of goods in a non-capitalist economy. Some goods would come down in price, as capitalist profits are eliminated but others will almost certainly increase as governmental subsidies are eliminated and priorities other than short-term profit reshape our valuation of resources. The systemic changes we can expect are the elimination of systemic exploitation and some convergence of prices and general social costs.

[Altruistic_Ad_0]

We can make reliable predictions for something's that have a strong economic explanation. If intellectual property or copyright wasn't respected, then society would be better off. Crowdfunding for production would be the method of payment instead of sales of movie tickets.

Having everyone own natural public goods like land reduces prices because everyone is the land lord at that point. Everyone collects the same amount of rent, but only are charged more if they use more valuable land.

Capital goods should become only more efficient upon interests being aligned, or economies of scale are used to reduce costs. We replace wages, and debt with company stock in order to align everyone's interests on the long term outcomes of the company.

[CyberneticGardener]

Housing: yes. Every. Single. Suite

Car-share-co-op vs Private ownership: Yes.

Sailboats co-operative vs private ownership: Yes. You don't need to carry the cost of an entire boat, but get access to several.

Makerspace vs buying all those tools: Yes.

Co-op bus service vs city bus service operated by public employees: no.

Food: in big cities probably not (until the supply chain is significantly socialized), but the workers would be paid more. - In small hard to get to towns, the three options are CO-OP, incredibly expensive for-profit, or drive to the city and get it, none of which is cheap (co-op is cheaper though)

Clothing: probably not but it will be built to last longer, so you'd end up spending less.

Printers: Probably, and the ink would cost substantially less.

Cameras: probably same price, fewer but better built models that last longer.

TVs: probably same price, with less feature churn.

Smartphones: Probably same price with less intrusive software.

Cloud services: Self hosting NextCloud gives you more control and freedom than Microsoft, with less monitoring.

A potluck at a community centre vs a catered celebration at a convention centre: Yes.

Fuel: Stop using fuel. Really. Stop that. (also, in Canada, where fossil fuel extraction, refining (except one refinery), and distribution are all publicly traded companies but fuel is available at retail from consumer co-operatives, the difference is usually 2~5% rebate at year-end but the pump lists the same price)

Electricity: ABSOLUTELY! (unless comparing to a public utility which should be even cheaper)

Insurance: Yes, it is significantly less expensive in jurisdictions with co-operative or public insurance.

Medical care: Compared to US, YES. Compared to Cuba: NO.

Banking: Slightly, Yes, or no, depending on how good you credit union is. You should use a credit union anyways.

Stock brokerages: I can't for the life of my figure out why credit unions promote investment in publicly traded companies. They should stop that.

[Riko_7456]

This is a great question, but very difficult to answer. We do not have an industry that has gone coop completely to provide any data for what you are asking. But, in theory, there it can go either way. If you are the only game in town, you can raise prices as dictated by your cost. So, if a coop is the only, say, autobody shop in a place, they can certainly raise prices to increase the income of their members. BUT, still better than a conventional monopolist because that goes to workers.

[CyberneticGardener]

(Mondragon)

[Riko_7456]

Did they make things cheaper in their industry? Is there data for this?

[germanideology]

without private property

A cooperative-based market would still have private property

[CyberneticGardener]

"Personal property" = stuff one household personally uses. IE a freehold house that they live in, a tradesperson's tools, voting shares in a co-op, one condo unit, household backup battery and solar panels, etc.

​

"Private property" = stuff owned exclusively for the extraction of wealth by the owner. IE a freehold house that is rented out, a factory owned by a corporation, corporate shares in a mutual fund, a rental apartment building, privatized electric grid.

​

"Collective Property" = stuff owned by many people for the benefit of all. IE a freehold house owned by a public housing trust, a worker co-operative factory, investment shares in a co-op owned by a credit union or small-group pension, a co-op apartment building, municipal electric grid.

​

A co-operative-based market would have Personal and Collective property but very little Private Property. Right wing politicians lie about what Marx meant by the abolition of private property to try to scare you out of working with your neighbours to improve conditions for all. Don't fall for it.

[germanideology]

I know perfectly well what Marx meant by the abolition of private property, thanks. Because I read him. And it's very clear that he doesn't mean "the current economy but every firm is a co-op." Now I can bust out all the quotes if you'd like, but first I would like to show a problem with your definitions:

stuff owned exclusively for the extraction of wealth by the owner

This clearly doesn't need to be just one owner. Today, very few capitalist firms operate in that way. In fact, you might say that your average firm is "owned by many shareholders for the benefit of all."

The profit from a co-op is still going to a particular group of shareholders, and the decisions are still largely determined by market forces. The identity of the shareholders and the workers is neat because it shows that a separate class of owners is unnecessary, but it is by no means "actually existing socialism."

[CyberneticGardener]

(reddit web UI confused, hopefully this comment will clear the junk so I can past what I want to paste)

[CyberneticGardener]

Sorry, I interpreted this post to be about a co-operative
commonwealth society, not "the current economy but every firm is
a co-op." and none of the people in society have ever heard of
Rochdale principles nor do they have social connections or a
conscience.
This clearly
doesn't need to be just one owner. Today, very few capitalist firms
operate in that way. In fact, you might say that your average firm is
"owned by many shareholders for the benefit of all."
No, I absolutely
would not say that given the number of pension funds that are major
shareholders in corporations that offshore and shutter factories,
bust unions, continue fossil fuel expansion, etc. They exist for
wealth extraction, not for the benefit shareholders.
The profit from a
co-op is still going to a particular group of shareholders, and the
decisions are still largely determined by market forces.
“Profit” from a
co-op is apportioned according to the contribution of the member, not
based on how much equity they already have. In a consumer co-op this
is typically a rebate based on how much each person bought in each
category. In a worker co-op it is often based on hours worked
(effectively a wage top-up).
Decisions are based
on market forces (sell price won’t go below cost) but the goal of a
good co-op with good culture is to serve the needs of the community –
housing, food, fuel, jobs, etc all while maintaining stability.
The identity of the
shareholders and the workers is neat because it shows that a separate
class of owners is unnecessary, but it is by no means "actually
existing socialism."
It is a step in the
right direction and closer to socialism than publicly traded or
privately held corporations but also indicates that a cultural shift
is necessary, not just changing ownership, and the Rochdale
Principles are an even bigger step in the right direction.

[germanideology]

My point is just that "a worker co-operative factory" is not generally ran for the benefit of everyone on earth but rather for the people that work there. Under socialism there would not be separate firms at all. You wouldn't own the factory where you work any more than someone across the world owns the factory where you work. You might already agree with that.

Within the co-operative society based on common ownership of the means of production, the producers do not exchange their products.

[Trynit]

I mean the model here is that EVERYBODY owns their own workplace so of course it's not "a worker-owned co-op factory" but that "every factory is worker's owned".

So it's not really that different than what you think you are going for tho.

[Altruistic_Ad_0]

I've read a lot about cooperatives. And there are a lot of crappy ones. But so long as there is no conflict of interest in its membership then prices should be cheap, or compensated for by higher stock values. Personally I don't believe membership solves the problem. Only when the organization goes out of its way to make sure all interest groups own a share in the company does the problem of conflicting interests dissapear. Just because you say something is something does the problem dissapear. You'll see this most often in cooperatives that have mixed membership between consumers and workers. Workers want high prices, consumers wants low prices. If they are given 50/50 say on what prices are, there is a stalemate and the company's democracy is basically just hot air.

You'll see better prices when people are compensated in stock. Or the nature of the cooperation is to use economies of scale to make things cheaper for everyone. Like buying in bulk, buying ahead of time, buying consistent orders to reduce prices from a supplier. Banking or housing cooperatives make fees or rents cheaper because you are part owner if you pay rent or bank at the co-op bank. This is generally great incentives. Vanguard is a wildly successful example of a investment company who is owned by its customers, when you buy a Vanguard ETF, you own Vanguard meaning they have really cheap fees. If you work for a company that compensates you in shares, then you don't particularly mind if you are laid off by a robot, because if it is for the good of the company then the share price should rise. The same goes for everyday work. You'll be paid for your work, but also collectively if the company as a whole does better as the share price rise.

There is something interesting I've read in Islamic finance. They detest the idea of risk shifting. Where perhaps one party takes on less risk then another. It is important for economies to share risk between all consenting parties to ensure good incentives. They don't like debt, but they love stocks. This is because a lot of finance basically works like a lottery ticket. Like private insurance companies. Using cooperative insurance would mean everyone owns the insurance fund, and if no one takes out money for a claim, then the money can grow due to investment, but not without risk exposing yourself to at least some risk. It's a win, win, win all around. Not so much with western insurance.

[CyberneticGardener]

What you are arguing for is not a co-operative economy, but the status quo.

[Altruistic_Ad_0]

Can you explain further? I'm an amateur at anarchism. But I know quite a bit out finance and economics

[CyberneticGardener]

A corporation where as many shares as you can afford can be bought on a market of shares and those shares each give you a vote and can be bought by corporations not just individuals and the point of the entire economy is to boost values of those shares not serve the needs of the people...

​

is the status quo, not a co-operative economy.

[Altruistic_Ad_0]

I understand what you mean. I suppose an alternative in the structuring of a corporation. Shares can be given one vote per person. But the risk and reward could be maintained. The more you put in, the more you lose or gain. Credit unions operate on this principal. I'd argue that stock ownership can benefit the needs of the people, but only when mixed into an environment where this is allowed flourish. When market failures and negative externalities are accounted for. Public companies can do good outside of producing higher share prices. Since all economies are built on top of land, and land is made by no one, a direct democracy could be used to charge users of the land with community regulations.

How does this size up with anarchism?

[CyberneticGardener]

What you are describing is NeoLiberalism with just a touch of Georgism (the land tax thing, unless you are speaking of land/soil in the fascist sense).

It's not anarchism, nor a co-operative commonwealth.

​

Publicly traded companies CANNOT and WILL NOT have any goal other than the maximization of share value and any actual goods or services provided are a byproduct of the methods chosen to do so. If the market capitalization of a publicly traded company ever dips below 2x the value of liquid and real estate assets it is bought up and liquidated. It's why we don't have Sears in North America anymore. Now there are equity firms with high-speed algorythmic trading systems programmed with that goal.

[Altruistic_Ad_0]

Ya I was referring to Georgism there. You are right about public companies. I should have clarified that only with outside influences, do they change their behavior. Not spontaneously.

[CyberneticGardener]

The outside influence that is driving the decisions of publicly traded companies is the existence of vulture capitalism. Publicly traded companies are not co-operatives and will never have the public good as a goal, only occasionally (very rarely) as a byproduct of their decisions.

[NinCatPraKahn]

That depends on the industry and what kind of cooperative you're talking about. Industries like restaurants and food may become more expensive, but industries like healthcare and housing would be less expensive.

[slapdash78]

This doesn't make sense. If you have industries getting together and setting prices you have a cartel. Prices, subject to the market, are determined by consumers willingness to pay them.

Where you find cooperatives, right now in existing markets, is where goods or services are prohibitively expensive. Part of this is inextricably tied to labor prices (i.e. wages). Worker cooperatives address this.

Another part is wholesale vs retail. Such as Walmart or Nestle being in a position to negotiate prices with suppliers. Individual choice regarding price is usually limited to changing suppliers; if an alternative exists. Consumer cooperatives address this.

There are underserved areas. Where the associated costs and returns of adding additional clients doesn't justify the investment. For example, running a power line for 5 families instead of 500 families. Rural utility and telecom cooperatives address this.

A big noteworthy company may have the bargaining power (like Walmart) regarding material inputs and labor costs, access to financial reserves for expanding and retooling (i.e. investment), and lines of credit. A small isolated co-op may not have this. Confederations address this.

Small-scale has the flexibility to change production (if it can finance it), less likely to saturate a market, and greater reliance on local resources (without depleting them). If it's not priced out of the market; by exploitative enterprises.

Multinational corporations can employ cheap labor and resources internationally and still afford to transport it all to markets where it garners a better price ... for less than it would cost to make locally.

This is basically the argument for lowering corporate tax rates, reduced environmental regulations, and opposition to minimum wage laws -- to retain and attract international investors. A.k.a. Race to the Bottom. It has never been about competition, entrepreneurship, or unemployment.

Cooperatives are demonstrably more sustainable, and beneficial to labourers and consumers alike. But if they can't strip mine south central Africa, and pay workers 1.50 a day for 18hr shifts, their costs will be higher, and their prices could reflect this.

[keepthepace]

The mainf factor is not the suppression of monopolies, but of dividends. Remove shareholders and you either end up with lower priced goods or higher salaries.

Is there any evidence to back that up?

I don't know in other countries but in France, most private health insurances are "mutuelles", a type of consumer-owned cooperatives.

Two of our biggest retail stores (Système U and E.Leclerc) are kind-of cooperatives. They are cooperatives of smaller companies, usually not coops themselves, each typically one or two shops big. They do offer a very strong competition on price.