The Instigator
Capitalistslave
Pro (for)
Tied
0 Points
The Contender
Forthelulz
Con (against)
Tied
0 Points

Cooperatives are better than traditional businesses

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Voting Style: Open Point System: 7 Point
Started: 11/11/2016 Category: Economics
Updated: 2 weeks ago Status: Post Voting Period
Viewed: 121 times Debate No: 96933
Debate Rounds (2)
Comments (3)
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Capitalistslave

Pro

If you don't know what cooperatives are, they are democratically-run businesses, in other words, the workers control the means of production of that particular business and vote on the policies of the company, what decisions to make, etc. Traditional business models have one person or a few people at the top making the decisions.

The first indicator that cooperatives are better than traditional business models, is that 80% of cooperatives survive the hard first five years of being in business, compared to just 41% of traditional businesses( see page 8 http://www.uk.coop... )

In addition, cooperatives allow for workers to be paid more, since cooperatives do not have one person at the top piggybacking off of the work of the workers and taking a share of the profits. Those profits, instead, are divided up between the workers.

While cooperatives are in the minority and are not out-competing traditional businesses, this is primarily because most of the world lives in a market or capitalist economy. To begin with, the traditional businesses have an advantage because banks are more willing to lend to traditional businesses since we live in a capitalist economy, and it's tougher to get like-minded people together to contribute money to start a cooperative. ( https://www.youtube.com... ) If there was a level-playing field for cooperatives and traditional businesses, I'm sure cooperatives would take over since most people would prefer to work under a cooperative, where they have more autonomy and more profits going to them, than under a traditional business model.
Forthelulz

Con

The traditional business model is the single most effective way of raking in money for the investors. With clear-cut structure, those who have the drive and ability compete with others with drive and ability, which causes talent to rise to the top. (See: Donald Trump).

As businesses are mandated to make as much money as possible for the owners, they will, by default, gravitate towards sending as much money upwards as possible, with enough to make payroll and invest in improvements if possible sent back down or retained.

Those lowly line workers are entirely free to purchase stock in their company or others, and therefore have a personal stake in it, but that is at their sole discretion, and may suffer should they experience termination of employment.

In a hierarchical structure, it is easier for the counter-productive members of the group to be purged. In a cooperative, everyone needs to be gathered together for every single decision. If they aren't, then someone is making more decisions than they should.

This "level playing field" you speak of already exists. Rigid hierarchies succeed because people immediately know where to go to take things, instead of canvassing every single other member of their cooperative. I, for one, would be more than happy to take my grievances to my immediate superior and then wait, rather than have to spend that time waiting going to everyone and waiting for them to make a decision.

Have you ever considered the possibility that the deck is stacked in favor of capitalism because capitalism, by its very existence, stacks the deck in favor of itself, retroactively if need be? The fat cats at the top worked to get to the top, and thus enjoy the fruits of the labors of the aspirants below them. For example, look at tournaments. Tournaments have a "many will enter, few will win" deal. Many enter the private sector seeking to make it big. The ones who have made it big are the ones who pass policies. And their policies say "Keep the system we have, as it works for us, the winners."

In short, this is meaningless whining about how the rich won the economic battles and that those laurels have been worn out. Look, until such a time as the rich squander their money, they have every right to keep their money.

The traditional business model was actually brought back under the Soviet Union under the NEP. NEPMen got rich when a massive cooperative GOVERNMENTAL ORGANIZATION could not meet the demands of the populace. Said governmental organization lasted 70 years, compared to the Hanse, which lasted from 1358-1862. A modern business lasted half a millennium and was only put of action by governments.

The Honourable East India Company was a traditional business that managed to prosecute its rule of India, again for centuries, with an armed force rivaling its home country. It was able to accomplish this through having a clear-cut hierarchy, individual discipline, and unquestioning obedience, compared to the misconduct and disorder that was rife throughout the subcontinent.

On a level field, organization and logistics are paramount. The traditional business model is the most successful means of ensuring both are easy to carry out.
Debate Round No. 1
Capitalistslave

Pro

You see, you seem to be of the attitude that it's better to benefit a few people rather than the majority. Always remember, also, that if you make claims, you need to back them up. You claimed "The traditional business model is the single most effective way of raking in money for the investors." However, where is your evidence for this? Even if that is true, why should we want a few people to benefit from a business at a much greater value than the majority, hard-working workers? Workers are just as important as investors for a company, for without either, a company cannot exist. In a cooperative, the investors typically are the workers themselves.

In a comparative study performed by Gabriel Burd"n and Andr"s Dean, where they looked into how cooperatives performed in the Uruguayan economic crisis between 1999-2001, it was found that Workers cooperatives employment index rose, while their capitalist counterparts fell in employment. [1, pg. 520] In addition to this, average wage remained higher in worker cooperatives than in capitalist businesses. [1, pg. 523]

Next, I will point out that it is possible for worker cooperatives to be extremely successful and that they can turn over profit at a rate as good, or even often better than traditional businesses. Mondragon Corporation is the largest cooperative in the world and "is the tenth-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country." [2] Therefore, it is not the case that traditional businesses have a monopoly on profit turnover.

Next you argued, "In a hierarchical structure, it is easier for the counter-productive members of the group to be purged. In a cooperative, everyone needs to be gathered together for every single decision. If they aren't, then someone is making more decisions than they should." However, I would argue it is the opposite. With cooperatives, the people you work with are the ones who will be letting you go or firing you. In a hierarchical structure, it is someone in a higher position. The person who is in a higher position, is not always around to see what a specific worker is doing, however, the workers are. Because of this, in a hierarchical structure, the manager or boss doesn't know which worker is slacking off, all they know is productivity is down because products are not being made at the same rate or something. Since the co-workers are there constantly and able to see whether someone is productive or not, whereas a manager or a company owner is not, it means they can more effectively reprimand or fire the person in a cooperative. When a person is working and knows their boss is watching, they will work harder than if they weren't watching. However, since in a cooperative, the people who can fire you are always around, that worker will always be working hard since they know their co-workers are able to see them work.

In addition, "Two studies... find that on average overall firms can produce more with the technology of employee-owned firms. In other words, the way worker co-operatives organise production is more efficient. Fakhfakh et al (2012) show that in several industries conventional firms would produce more with their current levels of employment and capital if they adopted the employee-owned firms" way of organising production. In contrast, they find that worker co-operatives would always produce at least as much with their own technology as with conventional firms"[3] Therefore, there is likely no problem in cooperatives that some workers are less productive than others, since results show that cooperatives are as good or better than traditional businesses when it comes to productivity.

Finally, I wish to ask, what right does someone have to subjugate workers beneath them, and then take a large percentage of the profits of a company the workers built up through their own hard work? What legitimizes this power the company owner has over the workers? I consider the burden of proof to be on the one claiming that such power is legitimate.

Sources:
[1] http://disjointedthinking.jeffhughes.ca...
[2] https://en.wikipedia.org...dragon_Corporation#cite_note-AR2012-3
[3] http://www.uk.coop...
Forthelulz

Con

All I see is cooperatives supplying information. You are arguing in favor of cooperatives.

The power company owners has over workers is legitimate because they are beholden to their organization to eliminate problem cases in the ranks.

For when one person is working unproductively and they don't know, there is a commonly-utilized solution:

Observe.
(Profanity. Viewer discretion advised.)

One backwater Spanish town does not a world economy make. The first nine companies listed are, wait for it, traditional business models. So being number ten in your local nation means what exactly? There is more money for the people who have won the economic battles in the current model, therefore it's staying that way.

Those who own the company are free to prosecute their policies upon their line workers, who must present a case to their local arbiters of arbitrary power flowing from a barrel of a gun (such as the local government) to get any privileges beyond the right to quit whenever they want.

What burden of proof is there? The person who owns the company has every right to determine who or what is employed there, and what their roles are, and finally what they can and cannot do there. Oh, also, he has to pay them for coming in and doing their jobs, but then he gets the money left over, which he can re-invest. Everyone wins.

In spain alone, the tenth largest company made:
0.000.024.725,000
Compared to the GDP of Spain, which was:
1.393.000.000.000

This is the largest cooperative in the world, ladies and gentlemen.

Also, nice completely ignoring the public record historical sources in favor of socialist views. I prefer to keep what I earn, thank you very much.

tl;dr There is more money being made by traditional business models across the board, therefore they are objectively superior. End of discussion.
Debate Round No. 2
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by Forthelulz 2 weeks ago
Forthelulz
Fair warning: On a trip, so I may not be able to post an argument in time.
Posted by Capitalistslave 2 weeks ago
Capitalistslave
Wow, it still isn't posting properly. Just look up "mon<x>dragon corporation" on wikipedia.
Posted by Capitalistslave 2 weeks ago
Capitalistslave
Somehow my second source in argument 2 didn't post properly. Here it is:
https://en.wikipedia.org...<x>dragon_Corporation
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