The Third Place: Cooperatives

There are many different types of economic organizations, but the one that has continued to persist under both Liberal Capitalism and Pure Socialism is the Cooperative. Sometimes referred as “Coops,” Cooperatives are an economic organization where its important and mundane decisions are decided democratically and autonomously. The distinction between Employer and Employee at a Cooperative is blurred insofar as the people involved in its day-to-day operations are also its property owners. The people involved in a Cooperative are entitled to a share of its financial firepower (be it in Kapital and Schuld or Arbeit and Geld in this case). The same can be said for who in turn will purchase the goods and services created by one, indicating that Cooperatives are self-sustaining and self-governable compared to other types of economic organizations.

Cooperatives provide educational opportunities and training experiences for new Employees, including those who cannot otherwise find Meaningful Work elsewhere. There may be instances where the Council State assists in the establishment of new Cooperatives, instead of resorting to “Work-Conscription” into the workforces or “Military Conscription” into the armed forces. There can be opportunities where Cooperatives might consider collaborating in order to strengthen the cooperative movement in the Socialist Nation and elsewhere. The Council State should consider evaluating that option once it becomes feasible.

Overall, much has been said about Cooperatives by others in their own respective writings. What we will be discussing is how the concept of the Cooperative fits into the broader framework of the Work-Standard. There are plenty of fine nuances that a Cooperative is capable of experiencing, should it be allowed to continue operating once they start receiving Sociable Currency, which is any Currency backed by the Work-Standard. What key distinctions are there, if any, between a Cooperative with Sociable Currency and one that continues to use Fiat Currency? What else can be said about other aspects explored in various Entries of The Work-Standard (2nd Ed.)?

To begin, it is important to recall the basic classification system of economic organizations discussed in “Types of Economic Organizations”: State-Administrated Enterprises (SAEs), State-Owned Enterprises (SOEs), National-Socialized Enterprises (NSEs), Public-Owned Enterprises (POEs), and Public-Directed Enterprises (PDEs). Most Cooperatives in general fall under the category of PDEs, with the largest being suitable for POEs. In the aforementioned Entry from The Work-Standard, I described POEs and PDEs as the following:

  • Publicly-Owned Enterprises (POEs) are enterprises owned and operated by an affiliated Guild or several Guilds united as a District, a Syndicate, or a Workers’ Council of PDEs. As Districts, Syndicate, and Workers’ Councils, all POEs are situated across the many cities and towns within a given geographical region. Thus, ownership is widespread and delegated by an affiliated Regional Civil Chamber within the regional General Economic Council.
  • Publicly-Directed Enterprises (PDEs) are enterprises owned and operated by a family or individual as part of an affiliated Guild. PDEs are for the most part small-scale affairs situated within small cities and towns. They may also be Cooperatives, Associations, where the ownership is also controlled by the workers themselves. Owners are registered members of a local municipal or metropolitan Guild. Each Guild of PDEs is represented as Districts delegated by a superior Local Civil Chamber of the local Workers’ Council. Workers’ Councils answer to a Regional Civil Chamber within their regional General Economic Councils.

Another set of characteristics exclusive to the Work-Standard has to do with the obvious fact that Cooperatives, just like any other economic organization, is going to be relying on Arbeit and Geld as opposed to Kapital and Schuld. The notion of “Profit Sharing,” as it is understood in the cooperative movement, will be reconfigured into the more appropriate “Life-Energy Charging.”  

Prior to the Work-Standard’s adoption, the Cooperative was accustomed to its members having to balance their Quantity of Kapital against their Quantity of Schuld. As with any other conceivable form of economic life, they too had to make sure that they yielded the “greatest Quantity of Kapital for the least Quantity of Schuld.” The whole notion behind Profit Sharing served as a way in which the members got a distributed amount of Kapital and an equally distributed amount of Schuld as part of their control over the Cooperative. Under that arrangement, everyone volunteered to bear the burdens of running the Cooperative together in return for being capable of controlling its future.

With the Work-Standard, the “Profit Sharing” has to change in order to accommodate Arbeit and Geld. “Life-Energy Charging” involves everyone in the Cooperative having a proportional share of the Arbeit and a proportional share of the Geld. This entails every Vocational Civil Servant exerting the same amount of Life-Energy into the Cooperative to yield the same amounts of Actual Arbeit. It may seem like an odd statement, but one has to realize that the Theory of Value informing the Work-Standard, the Reciprocal Theory of Value (RTV), and the Life-Energization Reciprocity (LER) Process both necessitate the implementation of Life-Energy Charging.

In any other economic organization, the Arbeit contributed by one Civil Servant at a State Enterprise is capable of being different from that of another. RTV can provide at least four well-known factors as to why this might be the case:

  • Dasein Motive: The Civil Servant is contributing more Arbeit because they realized that their current Profession has been their Vocation all along. They are passionate about their Profession and are willing to do more than the next person.  
  • Meaningful Work: The Civil Servant has come to realize that their Profession, in addition to being their Vocation, is what gives them a higher sense of purpose and meaning in Life. Their lifelong dedication to their Vocation was rewarded in kind by the Council State in the form of medals, promotions, letters of commendation, and special prizes.
  • Education and Experience: The Civil Servant already received the necessary education and experience from their days at the Socialist Student Economy (SSE). Their added experience is what enables them to know more and be more flexible than the next person.
  • Skills and Specialty: The Civil Servant may have had the required skills and specialties for a particular Profession, despite it not being their Vocation to begin with. This too is another factor that enables them to contribute more Arbeit than the next person.    

Granted, there may be other, less discernible factors, but these are the most common ones articulated by RTV. For Cooperatives, it should be recalled that its Administrators and Civil Servants are the same people unlike other economic organizations. It might explain why the Arbeit contributed by them happens to be the same across the board. The Geld they are generating is a slightly different matter altogether.

Suppose for a moment that a Cooperative’s contributions of Arbeit to the Life-Energy Reserve is coming from the production of an Equipmentality (the Work-Standard’s equivalent to a “Commodity”) or a finished good. To illustrate that, let’s say that its Quality of Arbeit runs a weekly average of “6,000 GDM” on any given workweek. Before we even bothered to ascertain how much that might be in Actual Geld, let’s also say that the Cooperative sells its products to the Tournament (the Work-Standard’s equivalent to the “Market”) in exchange for Actual Geld.

Here, this single Cooperative is creating its wealth from three sources:

  1. Completed Creation of the Finished Product
  2. Successfully Selling it to the Tournament
  3. The Transactional Sales themselves

RTV would state that the first source is coming from the conversion of Arbeit into Geld vis-à-vis the LER Process. It would also state that another conversion may be occurring through the act of arranging and conducting the sales to interested persons from the Tournament. That leaves us with two sources where “Arbeit-into-Geld” is occurring. What does the Work Theory of Money (WTM) have to say to buttress what RTV might also suggest about the third source of wealth? Can it explain why the third source of wealth happens to “Geld-into-Arbeit?”

In essence, WTM states that while the Price of Geld through conversions from the Value of Arbeit, its assertion is still applicable to how Prices are set in the VCS Economy. It also explains why the Transactional Sales alone only yielded the Cooperative Actual Geld rather than Actual Arbeit. That should not be a complete surprise to anyone because WTM has addressed a similar circumstance where the Council State generated Actual Geld through its official Taxation Rates. Therefore, going back to those three sources of wealth:

  1. Completed Creating the Finished Product → Actual Arbeit → Actual Geld (Arbeit-into-Geld)
  2. Successfully Selling it to the Tournament → Actual Arbeit → Actual Geld (Arbeit-into-Geld)
  3. The Transactional Sales themselves → Actual Geld (Geld-into-Arbeit)

For Geld-into-Arbeit, WTM is anticipating that most economic organizations within the VCS Economy might consider saving that Actual Geld at the State Bank or spending it now to repeat the LER Process by creating more Actual Arbeit. Our Cooperative from earlier might do pursue the first or second options, but its members might decide on Life-Energy Charging instead. What happens in Life-Energy Charging is that the members of the Cooperatives decide to split the Actual Geld they had generated from Transactional Sales into proportional amounts. We can then write a simple equation for Life-Energy Charging:

LEC = (Coop Drawings / No. of Coop Members) + (Coop NSFIs / No. of Coop Members)
LEC = Life-Energy Charging

Under the Work-Standard’s Command-Obedience Account Bookkeeping, a “Drawing” refers to any amount of Actual Geld that an economic organization has at any given point. We will take the amounts of Geld that the Coop Members have in Coop Drawings and any issued National-Socialized Financial Instruments (NSFIs), divide the Coop Drawings and Coop NSFIs by how many Coop Members are currently employed, then find the final sum of LEC.

Note that LEC is a method exclusive to the Cooperatives and other economic organizations that are PDEs and POEs (like Small Businesses, a topic for discussion in the next Entry). This method becomes impractical for larger economic organizations such as NSEs, SOEs and SAEs, all of which have more intricate organizational structures. If applied at NSEs, SOEs, and SAEs, beware that the result is a sort of “trickle-down effect” where the amounts of Geld allotted to everyone becomes smaller the further it reaches the lowest-Ranking persons.

Before we move on to Small Businesses, it is necessary that I discuss about the role of Cooperatives in Mission-Type Economic Planning (MTEP). It is true that Cooperatives were advocated as a way to promote a more democratic form of economic governance, but it be remiss of this Author to not mention how Cooperatives operate under MTEP. Unlike other conventional types of economic planning, MTEP is flexible enough to specialize in both centralized and decentralized planning. This is made possible thanks to the capabilities of NSFIs, Kontore (Financial Office), the State Commissariats of Wages and Prices, and the significance of the Auftragstaktik (Mission-Type Tactics) and Schwerpunkt (Focal Point) concepts from The Work-Standard.

The simplest way to describe MTEP for Cooperatives is to imagine a thousand economic plans all occurring at the same time and in fulfillment of a central economic plan that has no time limit. This central economic plan does not have anything quantifiable like quotas, figures, percentage targets, and so forth. What does have are a general set of goals that is to be expected of every conceivable activity capable of contributing Arbeit and generating Geld. Together with the variety of NSFIs that are available for issuance by the Kontore and the oversight of the State Commissariats on regulating Arbeit and Geld creation, Cooperatives will be able to thrive and become an integral part of the VCS Planned/Command Economy. The fate of every Cooperative, like any other economic organization, depends on the efforts of everyone involved in the production process.   

Categories: Third Place

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