[Baff]

Not quite.

Wearing a splint can fix a broken leg. Not being able to afford a splint means your broken leg will soon result in your untimely death.

How you broke your leg becomes entirely irrelevant compared to your ability to fix it once broken.
In life we expect for legs to get broken. We take steps to mitigate aganst this when it occours. Those who can are more likely to survive than those who cannot.

Myself I don't like going to the doctors on principle. But when I break my leg this is a principle I will quickly abandon.
Just as the Co-op is now looking for shareholders when previously it refused to.

In allegory, you typically don't know your roof has a leak in it until it rains.
But you should still count on the rain even if you can't always count on your roof.



Too many cooks spoil the broth.
This negative economy of scale is true in all co-operative endeavours of any fiscal model.
Be it a corporation, a family business, a workers co-operative, a publicly traded company, or a government body.
It is as equally true in non business models of human co-operation.

P.S.
I'm not really looking to The Guardian for any insights into greater efficiencies.
They operate at a loss. They run probably the consistently worst performing newspaper in the history of our nation.
Perhaps you should try the Daily Mail, Britains best performing newspaper?

LMAO, I'm guessing your prefer political principle to managerial efficiency when you choose which people you wish to take advice from.

[SueDeNîmes]

Not quite.

Wearing a splint can fix a broken leg. Not being able to afford a splint means your broken leg will soon result in your untimely death.

How you broke your leg becomes entirely irrelevant compared to your ability to fix it once broken.
In life we expect for legs to get broken. We take steps to mitigate aganst this when it occours. Those who can are more likely to survive than those who cannot.

Myself I don't like going to the doctors on principle. But when I break my leg this is a principle I will quickly abandon.
Just as the Co-op is now looking for shareholders when previously it refused to.

Absolutely. The disadvantage for co-ops in capitalism has to do with capital, not their goods and services. Co-op bank was consistently one of the highest scorers in customer satisfaction. Its losses had no more to do with being a co-op than RBS's et al. And nothing to do with the profitable supermarket chain which is going neither down nor public.

In allegory, you typically don't know your roof has a leak in it until it rains.
But you should still count on the rain even if you can't always count on your roof.

Absolutely. Doesn't say much for all the non-mutuals which couldn't even cover their losses with public share issues then, does it? You're making a pretty good case for co-ops here.

Too many cooks spoil the broth.
This negative economy of scale is true in all co-operative endeavours of any fiscal model.
Be it a corporation, a family business, a workers co-operative, a publicly traded company, or a government body.
It is as equally true in non business models of human co-operation.

But not necessarily co-ops which typically hire managers and specialists like other businesses.

P.S.
I'm not really looking to The Guardian for any insights into greater efficiencies.
They operate at a loss. They run probably the consistently worst performing newspaper in the history of our nation.
Perhaps you should try the Daily Mail, Britains best performing newspaper?

LMAO, I'm guessing your prefer political principle to managerial efficiency when you choose which people you wish to take advice from.

I have actually tried the Daily Mail and am happy to leave assertions of its verity standing on their merits

[Baff]

This is indeed correct. One disadvantage for a co-op is capital.

Capitalists are people who are looking to invest their capital in places.
They go to great lengths in their life to acquire capital and they have a strong willingness to co-operate with other people and lend it to them. A common self interest in the success of other peoples endeavours.

Hippies and commies have no capital. They believe the very idea of capital investment to be evil.
They recognise no self interest in investing in other people at all.
They are not very socially minded people. Misfits.


So there are easy ways to raise capital and there are hard ways.

The easy way is to present a viable business model to someone who is looking for viable business models to invest in and perhaps add to this an amount of your own capital that proves you to be equally as commited to the project yourself.


The hard way is to go out and find a number of like minded friends all who have enough cash free at the same time and all who believe that your proposal is the best use for their cash all at the same time.
To whit... you must do the job of the bank or the stock market yourself individually.
And unlike the banks and the stock markets you aren't very skilled at this and you haven't got the infrasttucture all ready in place and you don't have enough assets of your own to cover an investors potential for losses and you don't have a strong track record of reliability spanning over hundreds of years... and all your friends are hippies and commies with no money and they already have the full expectation of owning part of your company even without any capital investment of their own because that's what you told them you were all about.
In short.. it's a job you suck at and ultimately are unlikely to succeed in.

Plus of course you will still need to do all the other work needed by someone setting up an enterprise. So you have made a lot of extra work for yourself.

So instead of using easy, established and workable infrastructure, if you decide to thumb your nose at a widely used opportunity and make life much harder for yourself you are of course still able to successfully do this. Bloody minded as it may seem. This is something that I admire. The spirit of individuality holding stready against the flow is a romantic one.



So pretty much co-ops are doomed to always be small scale enterprises.
Because they have trouble raising capital.

So even if you chose to enter into a mainstream enterprise, you are unlikely to be able to raise the capital to achieve any grand economies of scale or to be able to compete openly against those who do have ready access to capital. The Tescos and the HSBC's of this world.
It's niche.

I wonder how much customer satisfaction the same customers quized at the Co-op bank would demonstrate once the realise they can't all have their money back?.
Customer service my arse.
When a bank loses my money, that is not good customer service.


When you say "all the non mutuals" who couldn't cover their loses via shares, I agree it doesn't say much for them that they were unable to.

What it does say a lot for is all those many many others who did manage to cover their loses in this way.
IE the vast bulk of all of them worldwide. As opposed to the handful who were unable to.

If the wearing of lifejackets manages to save the lives of 600 people during a shipwreck... do we accuse them of having failed because 5 people wearing lifejackets still drowned?
It's a pretty weak argument that one. I shan't be making it myself.



Co-ops hiring managers and specialists in the same way as all the other companies do, leaves them open to the exact same dis-economies of scale all the other companies experience from doing this. Growing your business is not a magic wand solution to make it more efficient or profitable. In some cases this will work, in more cases it will not.

The specialist and manager in my company is me. It pays enough to support one person. Me. Add another person and it goes from being a good job for one person to a shit job for two people. Adding extra overheads to the workforce does not make the marketplace you operate in magically grow more customers looking for your service.

You can add as many specialists to co-op groceries stores as you like. It sells shit produce and not much of it. It can't afford to build many supermarkets (if any at all). It's still shit and what keeps it shit is not just it's lack of capital it's it's lack of social integration. It caters to the misfit market. Free trade bollocks. Overpriced ethical foods.
As long as they persist in being moralistic dicks who stick their fingers up at society... society will never embrace them.
We want cheap and tastey food, not morality lectures.



The Daily Mail is the most efficiently run newspaper in the land.
The Guardian is the least efficiently run newspaper in national history.
Those are their merits. The verity of their business advice is most clearly demonstrated not by our politcal sympathies but by their endeavours.
Unfortuantely for The Guardian, it has no merit at all in this department. Except of course as an example of how not to manage anything efficiently or even successfully.
Probably you want to be quoting Alan Sugar or something.

On the otherhand if you want to know how the public sector operates, I fully expect The Guardian to know more about it than The Mail. That is after all who it's readership is targeted at. The kind of person it's stories are written to please.
So in The Guardian I expect "capitalism is shit", because The Gaurdian sells to people whose worldview that is, and they themselves suck at it. Embarrasingly so.
And in The Mail I expect "public services are shit", because The Mail sells to people whose worldview that is and want to hear such stories...and they themselves feel disadvantaged by public services.

[Coyote]

So I was shopping at walmart the other day (guilty, it had been a while) and it got me thinking about economies of scale.
Walmart is able to get its low prices because they can afford to purchase more supply than its competitors.
So I wondered what if the government did the same and started a government store.
The government would be able to purchase an even greater supply than walmart and return a profit, paying the initial investment and then some.
And that leads me to the conclusion that government is able to offer better prices than its free market competitors.

But it doesn't do that now.

The government pays almost three times as much for a public road as a private citizen (or citizens) pay for a private road. From the exact same contractors.

Why?

[quetzalcoatl]

Economies of scale exist at the apex of industrial societies. When outside forces threaten complex and fragile industrial systems, economies of scale begin to loose their stranglehold. The Walmart paradigm (for example) is dependent on cheap transportation, long supply lines, just in time delivery, a harried and oppressed workforce, and an international political regime that enforces free trade dogmas. All of these factors must be optimal for it to function well, yet all of them are under constant threat. Walmart may be politically powerful, but it cannot guarantee the cheap fuel prices that enable its long supply lines to be economically viable. Moreover, the demand-constrained economy now being engineered by the austerians will eventually decimate even the most powerful and efficient business models - at some level the elite already know this, but they have become so captured by short-term decision making that they cannot change course.

[quetzalcoatl]

The government pays almost three times as much for a public road as a private citizen (or citizens) pay for a private road. From the exact same contractors.

Why?[/b]

Only "almost"? Why not four times? ...or five? Personally, I'd go with 3.7 times more expensive, since precise numbers sound more convincing.

[Coyote]

Economies of scale exist at the apex of industrial societies. When outside forces threaten complex and fragile industrial systems, economies of scale begin to loose their stranglehold. The Walmart paradigm (for example) is dependent on cheap transportation, long supply lines, just in time delivery, a harried and oppressed workforce, and an international political regime that enforces free trade dogmas. All of these factors must be optimal for it to function well, yet all of them are under constant threat. Walmart may be politically powerful, but it cannot guarantee the cheap fuel prices that enable its long supply lines to be economically viable. Moreover, the demand-constrained economy now being engineered by the austerians will eventually decimate even the most powerful and efficient business models - at some level the elite already know this, but they have become so captured by short-term decision making that they cannot change course.

The only constraint on demand is a potential lack of supply. So long as Walmart keeps the supply arriving, demand shall take care of itself.

[mikema63]

And the only constraint on supply is how many third world workers that China will keep in slavery.

[AFAIK]

And the only constraint on supply is how many third world workers that China will keep in slavery.

Does this make a socialist revolution inevitable? Eventually the system reaches the upper limits of growth and there will no longer be enough resources available to expropriate from the weak, distribute amongst the active and hoard by the strong?

Dipping back into the thread....

" Private enterprise can get funds only from satisfied, valuing customers and from investors guided by profits and losses." Investors are guided by a hell of a lot more than just profits and losses. Their perception of the world is greatly distorted by "market sentiments," personal ideology, limits on information, insider information, etc. Not to mention the fact that assuring their own personal profits does not mean seeking the overall optimum economic solution for everyone. It means choosing the solution from the set that best benefits them; that is not even remotely the pareto optimum choice for the economy as a whole. In other words, while the statement may be true, it does not actually mean what Rothbard meant for it to imply.

Rothbard failed to mention charity. Corporations are highly reliant upon the welfare state. Many expect bailouts to be forthcoming during a crisis so will take risks that they would never dare to consider if debtors prison was awaiting their boards of directors.

[lucky]

Corporations are highly reliant upon the welfare state. Many expect bailouts to be forthcoming during a crisis so will take risks that they would never dare to consider if debtors prison was awaiting their boards of directors.

Let me try to correct all the inaccuracies in this one statement:

• A debtors prison would have awaited owners, not a board of directors.
• The fact that you sometimes don't fully pay company debts in a bankruptcy does not rely on a bailout, but on limited liability nature of the debt.
• The cost of a defaulted debt is not borne by a welfare state, but by the corporate bond investors.

[quetzalcoatl]

The only constraint on demand is a potential lack of supply.

This is a literally insane statement. What I mean by "insane" is not that you are personally insane, but that a commitment to an ideology leads you to make statement clearly contrary to reality - and this process then becomes the functional political equivalent of insanity. We now are seeing this very process replicated throughout our society and theatrically staged in our legislatures. Such is the sad result of praexological thinking: deduction from preconceived axioms that are assumed to be self-evident...or if they're not, they damn well should be.

You have stood traditional scientific empiricism on its head, and are now demanding that reality conform to your assumptions.

And the only constraint on supply is how many third world workers that China will keep in slavery.

That is a constraint, yes, but it is not the only constraint. Coyote's delusion is that production is exclusively top-down, while in fact there is a complex ecosystem of buyers and sellers with information flowing in all directions. Yes, under certain conditions, supplies can become constrained...while under other conditions demand can become constrained. Even the briefest glance at real world conditions will tell you which of these conditions now predominate.

Many expect bailouts to be forthcoming during a crisis so will take risks that they would never dare to consider if debtors prison was awaiting their boards of directors.

The death penalty for wrecking is a magnificent idea whose time is now come (once again).

[AFAIK]

Corporations are highly reliant upon the welfare state. Many expect bailouts to be forthcoming during a crisis so will take risks that they would never dare to consider if debtors prison was awaiting their boards of directors.

Let me try to correct all the inaccuracies in this one statement:

• A debtors prison would have awaited owners, not a board of directors.
• The fact that you sometimes don't fully pay company debts in a bankruptcy does not rely on a bailout, but on limited liability nature of the debt.
• The cost of a defaulted debt is not borne by a welfare state, but by the corporate bond investors.

1- Depends on the terms specified in the contract.
2- Limited liability was awarded to allow the formation of joint-stock companies by royal decree. It wasn't 'discovered' by free agents interacting in the market place. The sovereign had the power to terminate corporations before they gained immortal 'personhood'.
3- Investors who make campaign fund contributions and employ lobbyists in an attempt to co-opt politicians when in need of bailouts. Have you heard of state owned enterprises or infant industries? The welfare state will often nurse and pamper the rich at all stages of their projects' development.

I like to overstate my arguments sometimes. Thanks for keeping me grounded.

[Coyote]

This is a literally insane statement. What I mean by "insane" is not that you are personally insane, but that a commitment to an ideology leads you to make statement clearly contrary to reality - and this process then becomes the functional political equivalent of insanity. We now are seeing this very process replicated throughout our society and theatrically staged in our legislatures. Such is the sad result of praexological thinking: deduction from preconceived axioms that are assumed to be self-evident...or if they're not, they damn well should be.

It's utterly sane, my friend. No one can desire iPhones that do not exist. But, in their birth, they create their own demand.

Just like almond milk did.

Was there a demand for almond milk? Of course not. Until the supply came into being.

[AFAIK]

iPhones are popular due to the success of the commercial propaganda used in the 'manufacture of wants'. Few people would even know they existed if it weren't for the mass-media broadcasts of advertising.

[quetzalcoatl]

It's utterly sane, my friend. No one can desire iPhones that do not exist. But, in their birth, they create their own demand.

Just like almond milk did.

Was there a demand for almond milk? Of course not. Until the supply came into being.

You can demand iPhones all you want, but you won't get them if you don't have a job - and manufacturers won't manufacture goods there are no customers for. Government policy has focused for the past half a century on creating incentives for investment, and that's a good thing up to a point. But we now have a global industrial overcapacity that has lasted uninterrupted for three decades, despite all the factory closings and consolidations. As a result we have evolved a near permanent state of disinflation and high unemployment, the telltales of a demand-constrained economic slump. You can only stretch marketing gimmicks so far, and you can't build an economy off of almond milk and iPhones built in China.

If supply really created its own demand, we'd now be in the throes of an overheated economy with virtually no voluntary unemployment - after all, we've had excess supply for many decades already. This is another disproven myth, like the market clearing rate for labor.

[AFAIK]

Lots of people desire vaccines and cures that don't currently exist.

[Coyote]

If supply really created its own demand, we'd now be in the throes of an overheated economy with virtually no voluntary unemployment - after all, we've had excess supply for many decades already. This is another disproven myth, like the market clearing rate for labor.

In the absence of government (which is to say, peoples) intervention, yes.

You can have it all. All you have to do is stop trying to have it all.

[mikema63]

In economic terms there is less demand for vaccines and cures than ongoing treatments. Companies make more from ongoing treatments so they don't spend as much on cures and vaccine development is almost unheard of.

So in a perverted way consumers only demand their ongoing treatment.

In a strange way what people want is not the same thin as economic demand.

[AFAIK]

I think economists' would call that time preference, mikema.
Should I save/ invest in something long term or consume something today?

[mikema63]

That doesn't apply at all.

Demand is given in how much people spend for certain things and how often, people pay more for ongoing treatments so business focus on temporary treatments rather than cures.

The development of vaccines is 99% government funded and nobody is really developing new anti-biotics.