Can’t predict the future but a system like this could be better than our current state of affairs where we already suffer user-hostile services and corrupt action all concentrated in a few private companies to which we have no alternatives.
If cooperatives were a more prevalent structure, there would likely be more of them since the power incentives to consolidate are lessened, but not eliminated. Because there would be more competition in the marketplace, there would be more incentives to provide good products and services. We can assume that underperforming cooperatives would generally be less successful.
Also, with more participants in the marketplace and greater decision-making by members, less power would be concentrated in the hands of the owners and managers. While that’s not a guarantee against corruption, limiting power concentration lessens the impact of any individual’s corrupt actions and provides opportunity for others not to have to do business with them. Compare to the current state of Google’s leadership directing so much of the company’s efforts not toward providing service but toward manipulating people and markets to squeeze more money out of them.
There are, however, things we likely would lose out on with a more cooperative-based economy. For one, while there would be more incentive for co-ops to produce higher quality products and services, they would probably spend less effort on the “high polish” (for lack of a better way to say it) that attracts marginal customer/user growth. In other words, things would work better but probably be less pretty.
Another potential drawback is in economies of scale. Theoretically, market-dominant and tightly integrated companies can produce more for less while every piece of the puzzle just fits together. I don’t see this as a very compelling argument since the efficiency gains don’t usually benefit anyone but the owners, with excess profit directed not to increased quality but to marketing and manipulation. Since cooperatives would be less able to build up their own “walled gardens,” interoperability may be more incentivized and this drawback may be mitigated.
Really, though, anything has got to be better than having so many smart people working toward finding new ways to squeeze money out of us rather than doing something actually productive.
Another potential drawback is in economies of scale. Theoretically, market-dominant and tightly integrated companies can produce more for less while every piece of the puzzle just fits together.
Personally, I have a pet theory that economies of scale fall start working backwards once a company reaches a certain size because so many employees become so disconnected from the actual activity that makes the company money that 1. Various management types try to do good but instead accidentally impede the money making process, 2. Various inefficies emerge just due to the sheer number of people involved and miscommunications are amplified 3. You reach a scale where lots of B2B products (especially SAAS products) start making sense, but B2B generally charges you a premium for the convenience compared to doing it in house, so the cost benefit can quickly get out of whack while lock-in and corporate intertia makes it harder and harder to change
That’s a really good point. I’d add to that: instead of performing well in a narrow domain and being able to scale just on that specialty, large orgs tend to diversify in order to expand into other markets and make more money. Those different business goals can be in conflict, like we see with Google’s ads vs search vs cloud vs AI.
Can’t predict the future but a system like this could be better than our current state of affairs where we already suffer user-hostile services and corrupt action all concentrated in a few private companies to which we have no alternatives.
If cooperatives were a more prevalent structure, there would likely be more of them since the power incentives to consolidate are lessened, but not eliminated. Because there would be more competition in the marketplace, there would be more incentives to provide good products and services. We can assume that underperforming cooperatives would generally be less successful.
Also, with more participants in the marketplace and greater decision-making by members, less power would be concentrated in the hands of the owners and managers. While that’s not a guarantee against corruption, limiting power concentration lessens the impact of any individual’s corrupt actions and provides opportunity for others not to have to do business with them. Compare to the current state of Google’s leadership directing so much of the company’s efforts not toward providing service but toward manipulating people and markets to squeeze more money out of them.
There are, however, things we likely would lose out on with a more cooperative-based economy. For one, while there would be more incentive for co-ops to produce higher quality products and services, they would probably spend less effort on the “high polish” (for lack of a better way to say it) that attracts marginal customer/user growth. In other words, things would work better but probably be less pretty.
Another potential drawback is in economies of scale. Theoretically, market-dominant and tightly integrated companies can produce more for less while every piece of the puzzle just fits together. I don’t see this as a very compelling argument since the efficiency gains don’t usually benefit anyone but the owners, with excess profit directed not to increased quality but to marketing and manipulation. Since cooperatives would be less able to build up their own “walled gardens,” interoperability may be more incentivized and this drawback may be mitigated.
Really, though, anything has got to be better than having so many smart people working toward finding new ways to squeeze money out of us rather than doing something actually productive.
Personally, I have a pet theory that economies of scale fall start working backwards once a company reaches a certain size because so many employees become so disconnected from the actual activity that makes the company money that 1. Various management types try to do good but instead accidentally impede the money making process, 2. Various inefficies emerge just due to the sheer number of people involved and miscommunications are amplified 3. You reach a scale where lots of B2B products (especially SAAS products) start making sense, but B2B generally charges you a premium for the convenience compared to doing it in house, so the cost benefit can quickly get out of whack while lock-in and corporate intertia makes it harder and harder to change
That’s a really good point. I’d add to that: instead of performing well in a narrow domain and being able to scale just on that specialty, large orgs tend to diversify in order to expand into other markets and make more money. Those different business goals can be in conflict, like we see with Google’s ads vs search vs cloud vs AI.