Socialism: lend for voluntary sales to workers, on a separate track

Add buyouts.md: owners who choose to sell a healthy firm to its workers can borrow on a separate $100M track with its own test (money plus a pay floor), a capped independent price, a seller note that shares the risk, a vote of the whole workforce and the lock. Restate the total worst case as $450M and answer open problem #12. Co-Authored-By: Claude Opus 5.5 <[email protected]> Claude-Session: https://claude.ai/code/session_01QWPs69B8nQZjtPEUXMKzZx
2026-09-24 00:59:20 -06:00
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@@ -15,7 +15,7 @@ The rules that stop people from gaming the pilot (sham co-ops, hidden owners, ri

 | | |
 | --- | --- |
-| **Money** | $350 million, once. |
+| **Money** | $350 million, once, plus a separate $100 million for [worker buyouts](buyouts.md). |
 | **Lending window** | Years 1–5 (up to year 8 if good applicants are scarce). |
 | **Target** | About 400 new worker co-ops. |
 | **Loan size** | Up to $3 million per co-op, including all later loans. |
@@ -47,7 +47,7 @@ Private co-op lenders exist and do good work, but they're small. Shared Capital

 ## How much money, and why

-**$350 million, one time.** In the pilot, the bank lends only its own capital. It doesn't borrow on top of it. That makes the worst case easy to state: taxpayers can lose at most $350 million, minus whatever is repaid.
+**$350 million, one time.** In the pilot, the bank lends only its own capital. It doesn't borrow on top of it. That makes the worst case easy to state: taxpayers can lose at most $350 million, minus whatever is repaid. A separate $100 million for owners who choose to sell to their workers has its own rules and its own test ([When an Owner Wants to Sell to the Workers](buyouts.md)), which makes the total worst case $450 million.

 It breaks down like this:

@@ -77,7 +77,8 @@ That creates exactly the pressure that sank Venezuela: an institution with a tar

 - **New worker co-ops only, for the main test.** "New" means the *business* is new, not just the legal paperwork. A conventional firm that reincorporates as a co-op isn't new (see [Guarding the Pilot](pilot-safeguards.md)).
 - **Existing co-ops may borrow too, but they're scored separately.** Firms that have already survived for years would make the results look better than they are.
- **No rescues of failed conventional firms.** That's where FONDES lost its money, and it's a different experiment (see *Voluntary buyouts* in [Open Problems](open-problems.md)).
+- **No rescues of failed conventional firms.** That's where FONDES lost its money.
+- **Healthy firms whose owners choose to sell to their workers** can borrow on a separate track, with its own money and its own test, so they can't flatter the main result ([When an Owner Wants to Sell to the Workers](buyouts.md)).
 - **At least three worker-members at the first loan**, meeting the [co-op definition](worker-ownership.md) and accepting [the lock](the-lock.md).
 - **Members are on the payroll as employees.** That gives them minimum wage, unemployment insurance and workers' compensation like any other worker. It also means the co-op shows up in the government business records the test relies on.
 - **Any legal industry.** Loan officers judge business plans, not industries. But no single industry may take more than 25% of the money lent, and no single county more than 10%, so one bad sector or one local market can't sink the whole test.
@@ -195,7 +196,7 @@ At year 12, both measures must pass:

 **There is no "inconclusive, keep going" option.** If the evidence doesn't clearly show co-ops holding their own, that counts as a fail. The burden of proof is on the co-ops, which is where a skeptic would put it.

-**The emergency stop.** If net losses ever pass 20% of the capital ($70 million), new lending freezes, and the reviewers report within six months on the cause:
+**The emergency stop.** If net losses ever pass 20% of the capital ($70 million), new lending freezes (the [buyout track](buyouts.md) has its own stop, at $20 million), and the reviewers report within six months on the cause:

 - **A recession:** lending restarts only if the SBA's own loans from the same years lost money at a similar rate. That's a fixed comparison, not a judgment call.
 - **Fraud:** lending restarts once the reviewers certify the specific gaps are closed and recovery has been pursued. Otherwise one organized fraud ring could end the experiment on purpose (see [Guarding the Pilot](pilot-safeguards.md)).