The development of this model has been largely a theoretical exercise. But the important question is, will the proposed structure work in practice? I will comment here on a few of the most obvious issues.

The accurate valuation of assets in a worker cooperative remains a challenge. The valuation should be somewhat simplified since we are dealing with real assets, rather than fictitious assets and goodwill. Rules on valuing assets will need to be formulated in advance. This will be particularly true for custom assets, with no ready market. In some cases the replacement cost (in the absence of market value) may have to suffice. The valuation challenge will have to be met with openness, and transparency that includes a much higher level of detail. However unlike past situations where absurdly high valuations on business assets were common (1920’s), the inclination to place arbitrarily high values on assets will be mitigated by the higher interest payments they will result in.

Ironically, the largest part of the difficulty in valuing assets arises from the metric. Real productive assets must be valued in dollars, a fiat currency of zero intrinsic value and widely varying transactional value. Under current monetary management there are frequent asset price bubbles that severely distort the nominal value of assets. Real assets have intrinsic value from their utility, regardless of how many dollars they are worth. We are attempting to measure assets of fundamental intrinsic value in terms of something less fundamental, a questionable task.

Coop asset backed securities have an intrinsic inflation hedge, as their nominal value is tied to the price of assets. This is a valuable feature in a perpetual security. But coops must compete for funds in an environment that rewards fast growth and high return on investment at all costs. It remains to be seen whether a market for these types of investments can be created.

Securities laws and regulations also present a challenge, as do transactions costs. Coops (at least domestically) have some exemptions for members, but they are limited. The irony is that it is legal to gamble regardless of income or net worth, yet using money to creating products, services, and jobs is heavily regulated and highly restricted.