Comments on: Co-operative ownership – the liberal way

By: Ian Eiloart

Ian Eiloart — Thu, 18 Feb 2010 11:33:31 +0000

@Tim Carpenter

Well, a constitution can be amended, but only with the permission of relevant regulators. Covenants can also be rewritten, with agreement. And the laws that govern all of this can be changed. My point is that safeguards can be put in place, and they can be whatever is appropriate. For a care home, a housing co-op might well be appropriate.

I’m not sure I understand what you mean about LVT not looking forward or back. It’s a tax on current and largely unearned wealth. After all, and acre of land has no inherent value in isolation – look at land prices on “Inaccessible Island”, for exampe

By: Liberal Vision » Blog Archive » All about Co-ops…

Liberal Vision » Blog Archive » All about Co-ops… — Wed, 17 Feb 2010 11:08:53 +0000

[...] Co-operative Ownership – the Liberal Way: I have written before that co-ops and similar ventures are part of the rich tapestry of a market economy. After all, before the days of statutory regulation, the Stock Exchange was a mutual – you can’t get closer to the market economy than that. Co-ops and mutuals certainly have their limitations – access to capital and corporate governance being the two main ones. People complain about profit-making banks being owned by shareholders but mutuals can be captured by management and pay poor interest rates to savers and co-ops can be captured by a senior management clique without any possibility of facilitating change. There is a big literature on all this and I hope that Osborne’s team has read it. Neverthelessm, mutuals and co-ops definitely have their place. Three cheers for George Osborne’s attempts to create co-ops in the public sector then? Not yet. [...]

By: Tim Carpenter, Libertarian Party

Tim Carpenter, Libertarian Party — Wed, 17 Feb 2010 00:14:35 +0000

@Ian Eiloart,

Yes, constitutions can prevent, but can be amended. I am not sure I like the sound of “within the co-operative movement” either! That could cover “social housing” and all manner of things. Redevelopment churn is lucrative. Covenants on a lease are trickier to bypass.

As for Land Value Taxation, I have heard many attempts to explain LVT, but in each case the term “sensible” is non-sequitur. LVT does not know how far back to go while refusing to look ahead.

By: Ian Eiloart

Ian Eiloart — Tue, 16 Feb 2010 18:59:10 +0000

There are ways of preventing asset-stripping. For example, constitutions can require that assets remain within the co-operative movement. Charities and community interest companies have similar requirements. Other similar models could be devised.

Land value taxation would be a sensible way to recompense the taxpayer.

By: Tim Carpenter, Libertarian Party

Tim Carpenter, Libertarian Party — Tue, 16 Feb 2010 18:00:54 +0000

I most certainly agree that the “co-op” ideas put forward by the Tory Party are not very advantageous, in particular where they envisage them – they replace a State-run monopoly with a co-operative operating a State-mandated monopoly. They will fall victim to the “third party payer” problem that most of the NHS and Educational apparatus suffers.

As for your points

1. Agreed

2. A Co-op handed a prime site might asset-strip unless re-investment was enforced somehow – a lease? If the co-op keeps profits, the original owner of the asset (taxpayer) cannot be left out. Can get messy, but must not be overlooked.

3. Agreed, if and only if private entities are also competing, as you say in 4.

By: Philip Walker

Philip Walker — Tue, 16 Feb 2010 17:52:35 +0000

And I should say sorry for having glided over the fact that you’d put it correctly in point three! I’m perhaps just very alive to the dangers of putting things in short-hand: if we ‘get’ the idea of free choice then we understand what the short-hand stands for, but people who don’t agree can find talk of ‘competition’ and ‘the market’ all a bit impersonal.

By: len shackleton

len shackleton — Tue, 16 Feb 2010 16:55:57 +0000

All attempts at reforming the public sector under New Labour have floundered on the rock of trade union intransigence and the “we know best” of the professional educators, social workers etc. Giving these groups extra power is a big leap of faith. The John Lewis model is not a good analogue. JL have to compete against all the other retailers. How much competition do the Cameroons think that the unions – disproportionately strong in key parts of the public sector -will permit?

By: Peter

Peter — Tue, 16 Feb 2010 16:36:19 +0000

One problem with co-operatives is that they become an end in themselves: their purpose is to co-operate rather than to provide a service. Likewise, the Conservatives focussing on this issue risks confusing means with ends.

By: Philip

Philip — Tue, 16 Feb 2010 16:18:32 +0000

thanks, it was a typo

By: Philip Walker

Philip Walker — Tue, 16 Feb 2010 15:49:38 +0000

“If competition is not the arbiter of quality, the state will always step in.”

It would be clearer to say that service users should be the arbiters of quality, and only a competitive system can put them in the driving seat. ‘Competition’ doesn’t make the decisions, as it is an abstract concept.