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Thread: Cooperatives

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    Senior Member Lateralus's Avatar
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    Default Cooperatives

    I don't know a lot about them. I know a lot more about corporate business structures. What are the advantages and disadvantages of cooperatives versus corporations? (I can think of a few, but I want to see what other people have to say, first) Would our economy still flourish if cooperatives were the dominant type of business?
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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    Senior Member Gerbah's Avatar
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    I also don't know much about them but as far as I know, one of the biggest advantages is you don't have the danger of international investors who play a much bigger field and aren't so attached to the long-term well being of the local community up and leaving overnight and pulling out their capital with them because of sudden price changes or fear of local events. The cooperative would be more committed to long-term success and sustainability and stick it through the tough times.

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    ^He pronks, too! Magic Poriferan's Avatar
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    I'm not sure from where to start my answer. Do you need an explanation on the basic concepts of cooperatives? Their nuts and bolts? Or do you know all of that and want cut to the more abstract cost/benefit analysis of the system?
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    Minister of Propagandhi ajblaise's Avatar
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    If you've ever stepped inside your local credit union -- you've been a part of a cooperative. It's a form of cooperative banking.

    Cooperatives have found themselves successfully operating in lots of sectors in society. So they can function, and there is a strong argument for taking steps to increase their involvement in society.

    For example, more small community credit unions means less "too big to fail" banks.
    There is actually a whole Move Your Money movement getting started right now. It's very smart

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    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    I'm not sure from where to start my answer. Do you need an explanation on the basic concepts of cooperatives? Their nuts and bolts? Or do you know all of that and want cut to the more abstract cost/benefit analysis of the system?
    I think I understand the basics, but I could have a misunderstanding. Feel free to let me know where I'm wrong.

    Cooperatives are owned by their members, which are either the producers (sometimes workers) or consumers. Each member has a "share". The value of that share is based on how much business that member conducts with the cooperative. Profits are distributed as dividends to members based on their share value.

    The obvious (at least to me) disadvantages to cooperatives are:
    -difficulty raising capital (they can't issue stock, they can only take on debt)
    -could lack direction since power is decentralized
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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    Senior Member Lateralus's Avatar
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    Quote Originally Posted by ajblaise View Post
    If you've ever stepped inside your local credit union -- you've been a part of a cooperative. It's a form of cooperative banking.

    Cooperatives have found themselves successfully operating in lots of sectors in society. So they can function, and there is a strong argument for taking steps to increase their involvement in society.

    For example, more small community credit unions means less "too big to fail" banks.
    There is actually a whole Move Your Money movement getting started right now. It's very smart
    I know credit unions are cooperatives. Unfortunately, there aren't enough of them.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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    ^He pronks, too! Magic Poriferan's Avatar
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    Good enough. I'll skip to the disadvantages.

    Quote Originally Posted by Lateralus View Post
    The obvious (at least to me) disadvantages to cooperatives are:
    -difficulty raising capital (they can't issue stock, they can only take on debt)
    -could lack direction since power is decentralized
    Decentralization vs centralization is the same double-edged sword everywhere. It is true that a centralized system is usually both more focused and more expedient, but it of course is also more capable of ruining itself with one wrong committment, and generally leaves much more to be desired among it's contituents (that's the really important part here).

    Consumer and worker cooperatives are two rather different beasts, but what one of the main things they have in common is the concept that they both have more encompassing interests. The corporation is behest to a relatively small amount of disconnected investors. The corporations is one giant tool for giving them profits, and that's about it. Cooperatives, by being democratically moved by a much larger, and more common categores of people (workers or consumers) essentially provides more common good. It's just like with a government. Would you want a government to be focused and expedient, when there's no guarantee is will use those capabilities for anything the people want?

    Now, I understand too much decentralization is dysfunctional. I prefer representative democracy, and that includes within cooperatives. I'm a part of a credit union (consumer coop) and a management election has just come around. So that alleviates the problem a little bit.

    The issue of capital is more complicated. I'll get to that later because I'm busy with homework.
    Go to sleep, iguana.


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    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    Decentralization vs centralization is the same double-edged sword everywhere. It is true that a centralized system is usually both more focused and more expedient, but it of course is also more capable of ruining itself with one wrong committment, and generally leaves much more to be desired among it's contituents (that's the really important part here).

    Consumer and worker cooperatives are two rather different beasts, but what one of the main things they have in common is the concept that they both have more encompassing interests. The corporation is behest to a relatively small amount of disconnected investors. The corporations is one giant tool for giving them profits, and that's about it. Cooperatives, by being democratically moved by a much larger, and more common categores of people (workers or consumers) essentially provides more common good. It's just like with a government. Would you want a government to be focused and expedient, when there's no guarantee is will use those capabilities for anything the people want?

    Now, I understand too much decentralization is dysfunctional. I prefer representative democracy, and that includes within cooperatives. I'm a part of a credit union (consumer coop) and a management election has just come around. So that alleviates the problem a little bit.
    There are certainly advantages to this sort of business model - I wish corporations had stronger incentives to take a longer term approach. I wonder how viable this structure would be on a larger scale. I know there are successes, like REI. But REI seems to be more of an exception, and possibly more of a by-product of their clientele than of any particular merit of the cooperative model.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  9. #9
    Senior Member ceecee's Avatar
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    Quote Originally Posted by ajblaise View Post
    If you've ever stepped inside your local credit union -- you've been a part of a cooperative. It's a form of cooperative banking.

    Cooperatives have found themselves successfully operating in lots of sectors in society. So they can function, and there is a strong argument for taking steps to increase their involvement in society.

    For example, more small community credit unions means less "too big to fail" banks.
    There is actually a whole Move Your Money movement getting started right now. It's very smart
    That site is great. We don't belong to a CU but we do use a smaller community bank. After years with Bank of America this was very refreshing. There are branches around so it's not inconvenient at all. The tellers know our names, ask about our kids, work, talk about community goings on. Even if it wasn't the smarter way to go financially, I'd still prefer the little bank.
    I like to rock n' roll all night and *part* of every day. I usually have errands... I can only rock from like 1-3.

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