Here is a glimpse of the world's most successful coop system and the
nature of its access to capital. Imagine it also using its own bank
to support local government structures as well. That is what I have
envisaged to expand the human endeavor across the planet.
Much of what I have understood has already been evolved here and
certainly needs to be replicated. Do notice that all this is immune
to external financial manipulation as it is based on the credit and
good faith of the whole active population. With 100,000 employed
today, it is clear that well over 250,000 are participating fully in
this enterprise. Besides it is also an engine for local growth and
has made it all work.
Also notice just how naturally flexible this setup has to be. It
soon has ample internal capital to launch a new enterprise and ample
internal human resources to make anything succeed. It is also
continuing to grow.
What is key is that it accesses manpower and preserves that access.
This is what is fundamentally flawed about industrial agriculture.
Manpower unavailability restricts you to a capital model and huge
fields while giving up all other prospective opportunities. This is
a terrible vulnerability that must fail as this type of regime is
established.
Please note that this has grown steadily for seventy years and will
continue to grow for thousands of years because it naturally grabs
the talent. You are looking at our real future.
A Timely Visit
to Mondragon
November 4, 2009
by Phyllis Robinson
The following article
was written by Aaron Dawson, Equal Exchange Customer Service Manager
and former Worker-Owner Coordinator.
It seems somewhat
ironic that exactly a week after I return from my St. Mary’s
Master of Management – Cooperatives and Credit Unions study
tour of Mondragon, Spain, where the world’s largest formalized
network of worker co-ops lives, the United Steelworkers announced
their collaboration with Mondragon to develop and grow manufacturing
worker co-ops in the U.S. & Canada (click here to visit that
announcement from the United Steelworkers Union). Had I known
this announcement was coming, maybe I could have just waited a couple
years and visited a Mondragon co-op somewhere in the U.S.
But let’s back up a
little and ask: Why is the fact that some Spanish company is opening
manufacturing plants here in the U.S. so exciting? Well, for one, we
could certainly use more manufacturing jobs, but that’s just the
beginning. Mondragon is exciting because it is such a large and
complex network of worker-owned businesses, ranging from worker-owned
auto parts manufacturing plants, worker-owned kitchen appliance
manufacturing plants, worker-owned and consumer-owned grocery stores,
worker-owned credit unions and even a worker-owned University where
professors and university workers own the University.
What is also amazing
about Mondragon is its history. The worker co-ops were started by
a young priest, Don Jose Maria Arizmendiarrieta, who
came to Mondragon in 1941. At that time, Mondragon was one of the
most economically depressed areas in the Basque region of Spain. Soon
after his arrival, he organized the community to help fund a
democratically structured Polytechnic school to teach young people
both the skills they needed to get work, as well as teaching them the
overall dignity of their labor. Shortly after the opening of the
school, a few of his early graduates found that working in a
traditionally structured company was not enough. They wanted to work
in a company that placed value on their labor above all else,
empowered workers to not only share in the profits of the company
they worked for, but also share in the decision making as well. Thus,
five of the early graduates, with Don Jose Maria’s guidance and
again, the financial help of community members, purchased a small
factory, hired worker-owners and started manufacturing and selling
small ovens. Soon after, again with the guidance of Don Jose Maria, a
credit union was formed to help fuel the rest of Mondragon’s
growth.
From these humble
beginnings, we now have a co-operative network that has a total of
$49.5 billion, with over 70,000 worker-owners and 92.3% of the share
capital coming from those same worker-owners. Along with the
types of organizations listed above, they also have a worker-owned
insurance co-op, research and design co-ops and worker-owned
distribution co-ops. On top of this, every co-op in Mondragon invests
10% of their profits toward the research and design for new products
and services. Two percent of each co-op’s profits goes towards a
solidarity fund for individual co-ops who may be struggling and need
assistance. When looking at Mondragon 50 years later, we can see
not only a powerful co-operative network, but also an area that,
through Don Jose Maria’s guidance, went from one of the most
economically depressed areas in the Basque region to one the biggest
employers in the Basque Region. In the end, one could say that Don
Jose Maria Arizmendiarrieta accomplished what most community
developers can only imagine in their wildest dreams, all through the
vehicle of worker-owned co-ops!
So, when the United
Steelworkers Union announced that they would be collaborating with
Mondragon to create worker-owned manufacturing jobs in the U.S. and
Canada, it is an understatement to say that this is very exciting
news for the Worker-Owned Co-operative movement in the North America.
My own excitement was furthered when I heard that one of the people
in attendance (via phone) for that announcement was the head of
Mondragon’s America’s Division, Fernando De Landa – Director of
International Operations (America), who had spoken to our group just
the week before in Mondragon. And although when we met with him, he
did not announce this partnership, he did talk a bit about what
Mondragon looks for when going into partnership with organizations
overseas: organizations that not only are familiar with the local
area and the market, but also organizations that match their values.
He likened this type of relationship to a marriage, where the
matching of values is as important to anything else in making a
successful collaboration.
In my opinion, not
only will Mondragon’s decision to collaborate with the United
Steelworkers result in good bit of splash, it will also result in a
terrific marriage. Mondragon will be working with an organization
that has been fighting since 1942 for the right of workers to have
such things as collective bargaining, higher wages and paid
vacations, and believes that the true value of a product comes from
the labor that goes into it. These beliefs are shared by Mondragon,
whose new corporate name is, Mondragon: Humanity at Work, and has
been striving to empower the worker-owners in its own organization
for over fifty years.
The collaboration of
these two organizations is a monumental move for both the U.S./Canada
labor movements and the U.S./Canada worker co-op movements. Although
no specific plans have been laid out as of yet, it is definitely a
step in the right direction. Unions will have a chance to innovate
the working world once again by actively working with and encouraging
a worker-owned model. This partnership will also help shine new light
on the successes and benefits of Mondragon and the benefits of the
worker co-op model as the labor union movement continues to look for
new ways to advance the working conditions and the empowerment of
workers in the U.S. and Canada.
For my second post
about Mondragon, I would like to talk about the 6th co-operative
principle: cooperation among co-operatives. Mondragon has done
amazing work with cooperating amongst the different co-ops within
their network, but they’ve also faced challenges.
I was blown away by
Mondragon’s network of various co-ops. As noted in
my previous post, there were worker-owned home appliance
and auto parts factories, worker/consumer-owned credit unions,
worker/consumer-owned grocery stores, worker-owned universities, to
name a few, and they are all working together. The ways that they
work together is just as impressive as the variety and types of
worker co-ops themselves.
The first and most
basic way in which the Mondragon co-operatives cooperate with each
other is through the divvying up of each co-op. Below is a chart of
how each co-op puts their profits towards the general Mondragon
network:
Gross Profits (general
funds):
So, around 34% of an
individual co-op’s profits go straight to the Mondragon network to
supporting a variety of activities, from growing the reserves, to
investing in new products and co-ops, to support education, and even
toward a solidarity fund to help co-ops in financial difficulty. Not
only does this profit allocation provide a healthy safety net for all
of the co-ops, it also helps fund innovation and future projects that
allow the co-ops to continue to be profitable and innovative far into
the future. This is one very direct way in which all the co-ops in
Mondragon cooperate!
There are other ways
that co-ops in Mondragon cooperate. Our group took a shopping trip to
the Mondragon worker/consumer hybrid super market: Eroski. The
particular store we went to can only be compared to a store like
Super Walmart or a Super K – it sold groceries, appliances,
luggage, clothing, etc., but all of the workers were also owners! On
the shelves of the co-op, you could buy products that were
manufactured by other Mondragon worker co-ops, like refrigerators and
washing machines. The machines were very likely researched and
designed by one of the Research & Design co-ops, and the products
were transported from the factory to the store by a worker owned
transportation co-op. They also had tons of Eroski private labeled
items, which came in handy when I had to find some Spanish deodorant
with a name I could trust! The point is, this is just one of many
examples of how these co-ops, who are distinctly separate in
business, are able to work together to create a vibrant co-operative
economy.
So with all this
cooperation going on, our group was left with the question: “How is
Mondragon co-operating with co-operatives outside their network”?
In all truth, Mondragon typically teams up with any company in a
given area that can best do what Mondragon is looking to do,
regardless of their ownership structure. When we asked Jesus
Herrasti, who was the former head of Mondragon’s International
Division (and current head of Mondragon’s Innovation Park –
Garia), about partnering with any co-ops in the United States, he
noted that Mondragon had talked with a few co-ops in America, some of
them with quite a lot of resources, but in the end, the American
co-ops were not able to come up with any projects for collaboration
with Mondragon. Herrasti felt that this was the case because co-ops
are thinking about their own time, their own stuff – and that
co-ops do not trust each other. He noted that often times, in co-op
organizations with social missions, you can find that people are very
proud and thus the organizations are hard to manage and hard to work
with. The point of bringing this up is that we, as a co-op community,
have to do better. We need to work together, we need to work with
each other in the U.S., and we need to work with large co-ops such as
Mondragon in other countries if we are to accomplish our missions!
It is time to put
aside our egos and our pride and just do something, together. If
unions and worker co-ops can cooperate to build something new (see my
first post: A Timely Visit to Mondragon), then it should not be
asking too much to expect consumer co-ops and worker co-ops to
cooperate, or worker co-ops cooperating with other worker co-ops, or
Credit Unions with housing co-ops, etc. The point is, we in the co-op
world recognize that we need an alternative model; that much is
obvious.
I, personally, also
believe that the co-op world has that alternative model to give to
the world. So the question is, are we going to be able to work
together to build that alternative? I would like to leave off with a
quote from Herrasti that highlights what we need to do in cooperating
with each other: “We do not need to be something big and fight
with capitalism; we just need to create something different.”
