Mondragon Worker Coops shows resilience in the Great Recession

 “It has been said that cooperation is an economic movement that uses methods of education.  This definition can also be modified to affirm that cooperation is an educational method that uses the methods of economics”  – Don Jose Maria Arizmendierrieta

 The Guardian reports that The Mondragon  Worker Cooperatives, a federal corporation made up of over a hundred enterprises is surviving what in Spain is an economic depression.   The effects of the crisis in the Mondragon area has been buffered and softened by the workforce being able by democratic means to share the sacrifices required to survive.

  Democracy at work cannot be imposed,  becoming a member of a  worker cooperative is a choice and  commitment.  The Mondragon cooperatives have had difficulty in incorporating workers as cooperative members in firms they have acquired abroad.   When a majority of workers become non members, cooperative integrity is threatened. It seems that  worker cooperatives and perhaps other mutual forms of enterprises tend to thrive in cultures where the  cooperative principles are well understood and valued. A spokesman from the Mondragon cooperative said that he thought that their model was difficult to replicate as their cooperatives had emerged in a community were egalitarian attitudes prevailed. 

The Mondragon Corporation has a federal structure composed of  over two hundred worker cooperatives who are free to leave but rarely do so. They are held together by secondary cooperative instruments that are shared between the cooperatives.  One is the Caja Laboral a credit union like organisation which acts as a financial hub.   The other is a Mondragon University were enterprise ideas are researched,  training for cooperative administration, other education, including introductory events for interested outsiders. 

With the Mondragon Cooperatives members serve a probationary period and are required to subscribe to making an investment with the Mondragon complex derived from a small portion of their wages.  This investment is returned to them with added dividends when the worker retires.

 Arrizmedierrieta stated his work as a priest in the Mondragon community as an educator.  It was only after fourteen years that in the face of chronic unemployment that he gathered five of his pupils in 1956 and helped them set up a paraffin stove manufacturing cooperative. They had difficulty accessing finance and as a next step, he prompted the community to set up a credit union like enterprise the Caja Laboral.  The Mondragon project had education as a primary component which is now manifest as the Mondragon University .  The Mongragon Cooperatives are to a large degree self generated, by use of  education and  ability to self finance, which allows the development of new worker cooperatives from within the group. The bank like Caja Laboral  helps build up the commonwealth of the community through retention of funds belonging to members and  also that of the individual  cooperatives, so bring a distributive effect to work  with a light collectivism.

The Mondragon Corporation is overseen by a social council where representatives of the cooperatives set the policy and normative values of the federation.  The Corporation bases its actions on 10 cooperative principles , 1. open admission to those who agree with its principles,   2. A governance based on democracy, as equals and one member one vote,  3. Sovereignty of labour  giving the workers the right to decide the distribution of income and to promote this principle.  4. Capital as funds and assets to be used in service of labour,   5. Democratic governance of the enterprises including all members,  6.  Pay solidarity. remuneration kept within limited differentials, the maximum standing at 9:1 though usually 6;1,  7. Cooperatives working together in a federal relationship,  8.  The group encouraging social transformation, 9. Universal nature, the group affirms solidarity with labour, for peace, justice, dignity and development. 10. Education; spreading the skills to help  set up democratic worker enterprises; to support research into administration, service and product development.  Underlying these principles is the notion of “equilibrio” , balance.  

The  Mondragon Cooperatives do not claim to be perfections and have had some problems. Their cooperative principles have sometimes been put under pressure as they compete in a corporate capitalist world.  The more worker cooperative federations there are in the world the more support they have to renew their democratic character.  There is much international interest in the Mondragon cooperatives. An interesting aspects of this is the interest coming from the USA, see links ;  Evergreen Coops,  Union Coops, Democracy at Work,  Solidarity Economy, Democracy Collaborative, Gar Alperovitz, David Korton.   They are all coming from slightly differing view points but find inspiration from the Mondragon Project; an impressive example of principle and practice, that mostly works!

PS: Added on May 27th:  There is an informative article on the Mondragon Cooperatives, which comes from a conventional business and management point of view; the Harverd Business Review.  The Mondragon Coops draw attention from a wide spectrum of views. We are in a jam, in the end large problems impact all, so is there a search for  more clever and humane solutions. 

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