Difference between revisions of "User talk:PatrickA"

Revision as of 23:50, 7 October 2008

Hi Patrick,

A good point you make on your user page - yes, I've often wondered whether some form of totally transparent, open-source co-operative  might be a way forward perhaps. It is something that I need to give further thought. --CharlesC 23:35, 7 October 2008 (CEST)

Perpetual Cooperation

Thanks for the feedback Charles.

I've been thinking about this proposal and trying to solidify, debug and explain it since late 1999.

There is one fine detail that I have trouble communicating - maybe because it seems like an unimportant nit-pick that people would rather not bog themselves down with when there is so much more 'exciting' things to think about.

This detail has a very large cumulative effect on the distribution of control as the cooperative grows. If we do not heed this detail, the coop either cannot grow (in some cases that is OK), or, as it does grow, control is centralized toward the founders instead of being continuously distributed to those willing to pay for that growth.

I will try to relay this info here hoping you will include it in your ponderings...

When most people think of the word 'cooperative' they imagine an organization owned by the Workers. The employees and the owners are the same set.

Another, far less common approach is for the organization to be owned by the Consumers. The customers and the owners are the same set.

A "Consumers' Cooperative" attempts to be owned by the collective customers, but there is a subtle problem with the treatment of profit that moves such an arrangement further and further from truth as it scales because new customers do not become owners as they should when they pay price above cost.

For instance, http://en.wikipedia.org/wiki/Consumers%27_cooperative says:

The difference is that where a for-profit enterprise will treat the difference between cost (including labor, etc.) and selling price as financial gain for investors, the consumer owned enterprise may retain this to accumulate capital in common ownership, distribute it to meet the consumer's social objectives, or refund this sum to the consumer/owner as an over-payment.

But this treatment of profit is "incorrect" if the goal is to keep the organization owned by the consumers themselves, since only non-owning consumers ever pay profit.

So, the answer is to treat any such payment (all profit) as an investment in more productive sources, and for the fractional ownership of those new purchases of Land and Capital to become the property of the very consumer who paid it so the coop can both scale AND so all of it's members gain democratic control (with maximum rights of secession).

For example, let's say a coop restaurant is being operated as I describe and a non-owning consumer purchase a hamburger there.

When consumer is pays a price above cost, he has paid profit. I claim profit should be collected from consumers because it represents their need for ownership in the sources of that production. And since it will be treated as THEIR investment, they gain that ownership they need to protect them from paying profit in the future.

So the profit gained from the sale of that hamburger would be invested into more Land, Water rights, beef cattle, tools, etc. needed to increase production - or, alternatively, some of the current owners might be selling part of what they have (if they decide they have more than they need) which would then become the property of the consumer who paid for it.

If the price of the hamburger were $5, but it only cost (including wages) $3.50 to make it, then the profit of $1.50 would be invested FOR THAT CONSUMER in more productive sources meant to facilitate the production of more hamburgers.

It may seem stupid to own 13 cents worth of a beef cow, but the idea is that such transactions would be cumulative, and that over time, as the facility grew, the ownership would continue to stay in the hands of the consumers instead of slowly being concentrated into the hands of the originators.

Whew! Thanks for reading. I hope it makes sense, and otherwise I hope you will ask questions.