AskProfWolff:  How do worker co-ops acquire the capital needed to run the businesses?

AskProfWolff: How do worker co-ops acquire the capital needed to run the businesses?


This question was sent in by Firaz Khan
and he sent the question to the Ask Prof. Wolff page of our website
rdwolff with two Fs dot com and his question was how do worker coops acquire
the capital needed to run their businesses. This may surprise you, but
actually, they acquire the capital pretty much in the same way that lots of
capitalist businesses do. So here are the things that they can do. Sometimes the
businesses start with money of one or two individuals ,that they’ve inherited,
or that they’ve gotten from members of their family, and that’s the kind of
startup capital with which a co-op begins. Sometimes it’s a different system,
everybody puts in a little bit of money at the beginning; sometimes it’s in
another system, some people put in money, and other people have a portion of their
weekly wage set aside to be their contribution, until they get to the level
that everybody else was able to do at the beginning. But beyond that, there are
other ways. You can borrow from a bank. Are their banks that lend to worker
coops? Yes, some of these banks have been doing it for many years, know how to do
it, are confident in it, and are not afraid to do it. Other banks may be
hesitant, because it’s an unusual thing, in the United States at least, and in
certain other countries, but it is doable. And now let me give you some ideas about
other sources of capital that capitalist enterprises don’t have so readily. Most
churches will not invest in a private company. They don’t really do that with
the money that they have in their church. But if the church is located
particularly in a working class or poor neighborhood, it might very well
understand its mission of helping the people where it is the parish, to help
them get their businesses going, After all, the most successful worker co-op in
the world right now, the Mondragon Corporation, started when a local
Catholic priest in the Basque area of Spain helped his parishioners start a
worker coop, and when he helped them, he may well have, I don’t
know the details, but clearly a church could provide some of the capital to get
such a business going. Likewise, a labor union could do it, likewise a political
party could do it, likewise you could have crowd funding of all kinds, as we do
in this country this day, getting together the money to start an industry
that provides a service that isn’t being provided, that provides jobs in
communities that aren’t being offered them. There are all kinds of ways to
raise the capital to start a worker co-op business.
Lastly, Mondragon and the Steel Workers of America, a major union, are currently
operating several union partnerships with worker
coops, that the Union helped to set up, and that the Union helped to provide
capital to, out of the money that the Union has for its needs. So, all kinds of
sources are there, if there’s the will, the money can be found. The key operating
problem is not the money, it’s the commitment of workers to go in that
direction, to want to run their own businesses. You have that, you do it well,
the money will be found.

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8 thoughts on “AskProfWolff: How do worker co-ops acquire the capital needed to run the businesses?”

  • You share the same gift as a Chomsky and other great intellectual leaders and keep it plain and simple so that all can understand. Thanks for your work.

  • You are on the right side of History professor and the down trodden people of your nation are starting to see the lies of Capitalism,McCarthyism will not work this time.

  • I've been wondering this for months! Until watching this video, I was under the impression that STATE BANKS would be about the only way…..but now I see there are many options! God bless the Wolff!

  • Professor Wolff,
    With all do respect,
    This is how the Capitalists have us by the balls.
    They have the Capital to start businesses. We do not.
    This is not where Worker Co-Ops are failing. This is where they have their work cut out.
    The need of an expanding models. Such as mandates for funding start up co-ops based on already established markets.

  • In Venezuela The National Banks are required to set aside 3% Reserves for local co-ops. Of the hundred eighty thousand coops that where started under Chavez, 50000 are still in business. Maybe coops will work next time.

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