No Stupid Questions

It's easier to get loans or investment if you can offer ownership of the business or its assets as collateral or equity. That's easier to do with concentrated private ownership than with a business that starts as a cooperative with shared ownership. So there is a structural¹ bias in favor of concentrated ownership and away from cooperative ownership when starting a new business.

In some successful worker-owned businesses, the business started as a traditional private endeavor and then converted to worker-owned through the deliberate choice of the founders & workers. For instance, the Cheese Board Collective here in Berkeley started as a privately owned cheese shop which was then sold to its workers a few years later. It's been a cooperative since 1971.

¹ That is, the system can have this bias, regardless of whether the individuals making up the economy have this preference.

You need a lot of capital to start a business, which is usually held by people who don't have an incentive to start a business for others benefit.

Also, entrepreneurs are usually individualistic (not talking shit, that's just the nature of it).

I spent a lot of my twenties trying to get a publishing group off the ground using a worker co-op model. It became clear pretty quickly that a hierarchy of responsibility was needed simply to keep the workflow moving, as relying on the self-motivation of contributors was a recipe for disaster, especially for those doing editorial or production work.

In my estimation, it can work, but only if the workers take on the attitude that they truly own the business and are responsible for it. This requires a higher level of scrutiny on incoming members than in a traditional business structure, as bad actors can have an outsized affect on a organization with loose hierarchical controls.

Sadly, my experience led me to believe that most people are more willing to work for someone telling them what to do than they are for themselves. The ability to muster effort and energy behind effective self-motivation is a rarer trait than most of us would like to admit. For a co-op to be successful against corporate competitors, every worker has to take responsibility for the organization and its success. In a corporation, only the boss has to - the workers only have to be responsible for what their boss thinks of them, not the direction of the company.

Survivor bias. The only ones that make it are the extraordinarily well run ones. I worked for one that feel apart. All it takes is one period where for whatever personal reasons there aren’t enough committed core members to manage the business.

They're tricky. While they can be extremely healthy and successful, with extremely high employee morale, they can also be cumbersome and bureaucratic, as that's the power structure that replaces the traditional hierarchy. So, very much a pros and cons thing, they're not just exclusively more fun and amazing to work at.

When it works its great though.

The Mondragon Corporation is a federation of worker-owned coops in Basque, Spain that involves 81,000 people and has been running since the 1950s. They have coops for manufacturing, banking, retail and education and they all work together to support each other.

https://en.m.wikipedia.org/wiki/Mondragon_Corporation

The book "From Mondragon to America" (available on Kindle and elsewhere) goes into extensive detail about how it works.

Just speculating, but it’s hard to organize a thing when responsibility is diffuse. If ownership is concentrated in one person, that person is incentivized to run the place actively. If ten people pool their money to start something, it’s hard to organize and move effectively.

The resources for starting a co-op are a lot more scarce than other businesses. I’ve looked into it and it was incredibly difficult to find information about what I’d need to do. I eventually just gave up on it rather than starting a business, because I really only want to start a co-op.

From my limited experience usually it's because they implode from internal drama. To be human is to be lazy, and most people can't get past that.

Other people have given good answers in terms of the structural and financial reasons, but if you want to see an alternative there's the example of this region of Italy where there's a substantial number and % of coops. I believe this is due to preferential taxes and subsidies by their government, although I haven't looked into it nearly enough to say anything conclusive.

It’s expensive to start a business. You’d need some seed money to start the thing for rent, products, salary and more. If a bunch of people go together, pool their money, sure they might get it to work, but they also share all the risk of failure. Also, who decides if there is conflict? Who has the final say? Not everything can be solved by compromise.

the man