Argumentos a favor das cooperativas (I)

Arguing for co-ops I: growth por Chris Dillow:

One lesson of the financial crisis is that hierarchical firms with outside owners are prone to catastrophic failure. This presents an opportunity for the left - to press the case for more egalitarian co-operative forms of ownership and control (...).

In the next few days, I hope to sketch some arguments for co-ops. These are intended to be first words, not last ones.

I’ll start by considering an argument against co-ops which I consider to be quite weak.

A common argument against co-ops is that they have a bias against growth. This is because if a co-op is to expand, it must take on more workers or customers and this dilutes the ownership stake of incumbent workers (or customers if these own the firm). And workers/customers will be reluctant to do this.

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A co-op dominated economy will therefore grow more slowly than a shareholder-dominated economy.

Even if we concede that growth is a good thing, however, this argument, however, is not as strong as it looks.

This is because existing firms, on average, don’t often grow anyway, whatever their ownership. Bart Hobijn and Boyan Jovanovich show (pdf) that the value of firms that were on the stock market in 1972 fell relative to GDP, even though falling discount rates alone should have raised it.

In other words, all of the US’s massive stock market boom between the early 70s and late 90s came because of new firms. Aggregate economic growth occurs not so much because existing firms expand, but because new ones enter.

(...)

All this raises the question: why do we think quoted firms are an engine of growth? In part, because of cognitive biases. They talk incessantly about pursuing growth, and we mistake talk for deed. And, of course, there’s the salience effect. We see the tiny minority of successful growth stories whilst the many failures get forgotten; everyone knows Tesco, but few remember Fine Fare.

The bottom line here is simple. The tendency for co-ops not to grow is no argument against them, relative to quoted firms. If you want economic growth, the key thing is to ensure that barriers to entry for new firms are low.