When I explain surplus value to people, I use the example of a Starbucks. You’re working for $15/hr, selling hundreds of $5 drinks per hour, the surplus value covers the other costs like rent and supplies, but, as most investor-facing documents will lay out, that $15/hr/person is the largest expsense. So, fudging numbers here, you sell 50 drinks at $5 each, that’s $250-15-15 for labor and other costs, so $220/hr getting taken from the workers and sent to the owners.
So, even if a) I’m wildly off with the numbers, which makes perfect sense because I made them up and b) startup capital is hard to come by if you aren’t already rich, the existence of profit from seemingly simple businesses like a standalone coffee shop should be something workers can organize and replicate without much involvement from capital. So, why don’t we? Is it that we all have been propagandaized to want the surplus value for ourselves?
Singular coffee shops are incredibly difficult to run profitably. You need economies of scale to make it work. Starbucks buys coffee way cheaper than a small co-op could, same with cups and every other consumable.
Then you’ve got startup capital which is way higher for a new co-op than to open just one more Starbucks because the machines are bought at scale, the IT is centralized, and a bunch of other shared services are leveraged across the corporation.
Finally, sales volume will be way lower for a co-op coffee shop than for Starbucks because a) marketing and b) variety. It takes a lot of investment to have all of the ingredients and equipment you would need to make the same number of drinks that Starbucks makes. Without that variety, you get many fewer customers and therefore many fewer sales.
I’ve looked at the finances of a local independent coffee shop before. It’s not pretty. They struggle hard unless there’s some other factor involved like they own the building they operate in or they operate in a historic district where Starbucks is not allowed to operate or whatever.
“It’s expensive to be poor” applies to businesses and organizations just as much as it applies to individuals.
seemingly simple businesses like a standalone coffee shop should be something workers can organize and replicate without much involvement from capital.
I think you might be underestimating the amount of capital needed.
Rent and decor for the premises, business and food licensing, equipment and stock are all racking up a significant initial outlay.
And it’s against the class interests of the banks, who hold a monopoly on finance, to invest in co-ops.
Exactly. A ballpark figure I’ve seen and experienced is a simple casual restaurant needs startup capital of at least $1M or equivalent. Split over 50 or even 100 employees and that’s a good chunk if not more money than they’d expect to make in a year.
Some guesses:
- As you said, you need to be able to risk losing quite a lot of money to start a co-op, which the vast majority of people don’t have
- Huge capitalists can manufacture goods with greater efficiency and have far more money to spend on advertising (and slander), so smaller worker co-ops have very little chance of significant success
- Many people likely have no idea what a worker co-op is or how much surplus value is being appropriated by capitalists
- Anti-worker propaganda (e.g. “capitalists deserve more money because they took a risk”)
Agree with all these. Similar reasons unions aren’t more popular. Tons of anti-worker propaganda, threats to outsource jobs, etc.
Hakim’s video on the problems of Co-ops illuminates this
But doesn’t provide a link to it
A coffee shop, or any food service business, is kind of a bad example in terms of surplus value/profit calculations. Labour is often the plurality, ie. the largest share, of the costs, but not the majority. For example, place I worked at for a while sat around 25% labour and 23% food cost (% of total revenue). Generally speaking a restaurant making 9% profit is doing really well. Franchise fees, if applicable, may fudge this a little, but surplus value is pretty low either way.
Now for worker co-ops… From my observations it’s really hard to find people who are qualified, who want to buy in, and who have the resources (cash or credit) to buy in. Even a small business isn’t cheap, even when it’s split amongst the staff. Local laws may also hinder the process. In general I think the idea of working for a company, or being the owner outright, is so ingrained in western societies that people often don’t even consider cooperatives. Or, on the flipside, the idea of all the employees owning equal shares is so foreign that most people dismiss the idea out of hand before they have a chance to think about the positives. “Not everyone can be equal in a company: someone started it/put in more work/has to be the leader…” etc. There could also be some selfish resistance from the original owners/founders of the company, as they “put in the hard work so why should others benefit from it” or similar. That should be mitigated by setting up the company as a co-op from the start however.
Oddly enough customer owned co-ops seem to be the somewhat more dominant model of cooperative business. I suppose giving the customers the surplus value is marginally better than giving some idle and absent capitalist the surplus value, but instead of doing that you may as well lower prices or give workers a buy in.
I also wonder how a co-op manages against competition in a capital dominated market, although my thoughts haven’t really gotten past idle wondering on that point.
