Erik Loomis writes enthusaistically about a bar/restaurant in Austin organized as a co-op, though he concedes that “[t]here may be problems with the model I don’t anticipate.”

It seems to me that co-ops and various forms of worker-owned firms keep being the idea that seems appealing without ever really taking off. I was talking to someone the other day who was extolling the virtues of a freelance economy and being your own boss. There was then some lamentation about health insurance and other details. But I think the problem with freelancing as a lifestyle is in many ways more fundamental. There’s a balance to be struck between a desire to not be bossed around and a desire for the security and predictability that comes with having a regular job. Desire to be your own boss is one of the most-cited reasons that people launch small businesses, and that’s great. But of course most people don’t launch small businesses, which is also great. All things considered, they prefer the upsides of a structured work environment to the downsides. A co-op exposes you to a lot of the same doubling-down on risk that’s involved with entrepreneurship but doesn’t do nearly as well in terms of producing autonomy. People tend to sort, I think, into either the kind of person who wants to start his own brewpub that he’ll control or the kind of person who just wants to show up and do his job and then get to forget about it when the shift ends. One of the things that’s appealing to people about the heyday of industrial age unionism is precisely that workers were able to get a high share of the unionized firm’s revenue without contributing to the management of the enterprise. And then there’s the risk issue. Typically what you’d want is to get some of the workforce’s compensation put into a nice pension fund that invests in stuff that’s insulated from the financial fate of the company. Working at a coop is like having your pension fund all invested in company stock. And we do see some firms organized around an Employee Stock Ownership Plan (ESOP) including big ones like Publix that aren’t necessarily as warm and fuzzy as a typical grocery coop. But this model hasn’t quite taken the world by storm, in part because it goes against standard investment diversification practice.



All that said, as the world becomes more affluent it does make sense for more and more people to become more interesting in the autonomy and quality of life benefits that can accrue to non-standard workplace arrangements. This is especially true if some of the returns to large firm size that are associated with the current health care system attenuate.

