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I recently had the opportunity to visit Mondragon, Spain to immerse myself into the world of worker-cooperatives. Mondragon has been slowly making changes to take on a larger role in pushing for equitable changes locally. The General Assembly meets at least once a year to act on what sounds like a mostly pro forma agenda. Second, as the environmental crisis worsens, it will create many new business opportunities for companies with the technical skills to address them. Marjorie Kelly—an amazing author, champion of local and democratic economies, and a co-founder of Fifty-by-Fifty—also participated in the study tour. The fundamental issues that are well addressed by cooperativism — a reduction in economic inequality and a better alignment of the interests of workers, owners and managers — are critical. Imagine the power of employee-ownership as a lever for creating social, economic, and environmental changes. 2. It has been successful in creating a democratic, sustainable, and secure living environment for its members. As I review my experience of Mondragon, I’m thinking this may well be its “secret sauce,” the key to its long-term success. Mar 25, 2009 Kris rated it really liked it. Our local guide, the father of two daughters, acknowledged that this situation was less than desirable, but noted that the situation is improving, particularly at the level of the Governing Councils, where they now represent 25 percent of the membership. Some took early retirement, and a handful took a compensation package to leave the system. Mondragon may offer a worthy alternative. However, while individuals can evaluate complex issues, they don’t always take the time to do so. By the end of our tour, I was amazed by the complexity of Mondragon’s principles and mechanisms. Since its founding in 1956 by Father Jose Maria Arizmendiarrieta, Mondragon has become the world’s largest and most advanced cooperative economy. Spain has since revised its position on coverage for worker-owners and Lagun Aro now provides benefits side by side with those offered by the government. STEM education is the right approach, but we are far from figuring out how to deliver it effectively. They were not very much in evidence on either the shop floor as worker-owners or at the management level. Faculty of Business Studies 3. Workers in Mondragon have the right to participate in a democratic decision-making governance structure. One can imagine a sophisticated, cooperatively organized, service-based economy that would also require significant technical expertise. While they are reportedly treated well they do not participate in the governance of the firm and are not eligible for many of the other unique benefits of the cooperatives. C'est une offre de voyages apprenants qui … But only 98 of those are federated cooperatives, while the rest are international production subsidiaries. On this issue, there is good news on three fronts. And all participants in the system are free to make choices with broadly defined benefits — not the narrow capitalist dictates of maximizing returns to shareholders. Second, the number of its Asian competitors was growing every day. The surprise was in the scale of the experiment. Mondragon today consists of 102 individual cooperatives united in a federation called the Mondragon Cooperative Corporation, which is also organized as a cooperative. The thing that was so refreshing about Mondragon was its willingness and ability to deal with facts on the ground, to allow practice to modify theory without losing sight of values. [3] Sie hat ihren Sitz in Mondragón im spanischen Baskenland und ist global tätig. The Mondragon Cooperative Group, which is the 10th-largest entrepreneurial group in Spain, is one of the most outstanding examples of worker cooperatives in history (Mondragon Corporation, 2013). In total, they receive 80 percent of their former salary, enabling them to retire without having to make major shifts in their lifestyle. We didn’t have an opportunity to discuss the thousand relevant details, large and small, that would give us the basis for a good comparison to the rest of the US system, but we already know our ailing system offers the worst care for the highest price of any system in the developed world. The thing that was so refreshing about Mondragon was its willingness and ability to deal with facts on the ground, to allow practice to modify theory without losing sight of values. First, immediately prior to the recession, Fagor Electrodomésticos had expanded by buying a competitor in the household white goods sector; it financed the acquisition by taking on major debt. There are ways to overcome this issue, beginning with loan guarantees from those who understand and support the model. And third, just as the cooperative’s expanded capacity came on line, the recession hit and the bottom fell out of the market. Corporations tend to talk about social responsibility, by which they mean taking responsibility for both the positive and negative impacts of the activities they pursue in the normal course of doing business. The Mondragon Cooperative Group has engaged in a domestic expansion process since the early 1960s and internationally since the 1990s. Michael Peck also offered specific examples of women in leadership positions, as the General Secretary for Mondragon’s Governing Council, the Mondragon Corporation’s CFO, and the CEO positions in several of the individual cooperatives. In the wake of the 2008 financial crisis, Fagor Electrodomésticos, the largest of the industrial cooperatives, failed, eliminating the jobs of 1,800 worker-owners in 2013. Worldwide, cooperatives are even more significant, representing well over $3 trillion in turnover, 12.6 million in employment, and over a billion people in total membership. Nonetheless, the Mondragon worker-owners are a fairly homogenous group, so one doesn’t have to travel far to experience empathy for “the other,” and the system is not being asked to address such intractable issues as homelessness, racism or multi-generational poverty, none of which were visible to me in Mondragon. This means organizing and building institutions together for what we need.”. General Assembly: In most of the Mondragon industrial cooperatives, this is the organization of all worker-owners. Workers in those other locations are not members of the cooperatives, and thus do no participate in democratic governance. As the documentary trailer says, Mondragon is a Federation of 120 worker cooperatives, which collectively have 100,000 employees and produce $25 billion in sales. Its first product was paraffin heaters. In 2011, the Basque Culinary Center was created and became part of Mondragon University. The Mondragon Cooperative Group, which is the 10th-largest entrepreneurial group in Spain, is one of the most outstanding examples of worker cooperatives in history (Mondragon Corporation, 2013). the Social Council). But there is growing evidence and support for alternatives that seek to satisfy deeper human needs, such as compassion for one’s fellows and the pursuit of meaning in one’s work. This field is for validation purposes and should be left unchanged. There are a host of intractable social problems in the US — homelessness, racism, addiction, obesity, violence, to name just a few — that may have economic elements, but cannot be solved even by a cooperative economic utopia. The structure of Mondragon University provides … Unless that shifts, the cooperative model will not work. Shortly afterwards, these cooperative members founded a credit institution to support the work of the cooperatives – and to help … In a cooperative, the janitor and the CEO have the same voice in the General Assembly — in contrast to the capitalist shareholder system, where the number of votes is based on the amount of money invested in shares of the enterprise — typically by absentee shareholders who have no other interest in the firm. As Ed Whitfield, Co-Managing Director of the Fund for Democratic Communities recently put it, “ There are three kinds of power. The desire for theoretical purity strikes me as a critical failure of both mainstream and alternative economics. While I don’t have enough data to draw firm conclusions, I believe this structure produces decisions that are both different from and better than those of capitalist firms in two specific ways. But then we can also be power ourselves. Because of the principle of “intercooperation” among the Mondragon cooperative enterprises — that is, the idea of connectedness and reciprocity among all the participants in the system — most the employees were relocated to other cooperatives. Despite its many virtues, Mondragon is not utopia. There is a need to address societal and environmental issues, and that it is everyone’s responsibility to do so. A majority of the Mondragon cooperatives are in the industrial manufacturing sector, an increasingly sophisticated part of the economy, where the need for math and science skills is clear — and the US ability to compete successfully is marginal. Within the global cooperative movement, the Basque town of Mondragon occupies a special place. The coops have retained members’ jobs in Spain’s Basque country even during economic crises. According to Michael Peck, North American delegate for Mondragon, “in the area of sustainability, where Mondragon cooperatives started with EU adhesion to the Kyoto Protocol starting in 1997 (something the U.S. never achieved), they have been very conscious of both sustainability practices as well as essential green industrial certifications (the EU versions of LEED) which they need in order to compete in global markets. Symone Jackson and Rebecca Fisher McGinty. We heard (and read) many stories of economic crises and how the cooperatives, individually and collectively, weathered them. As members of a cooperative, Mondragon’s worker-owners were not originally considered employees under state law. Although there were a handful of cooperatives where women were in the majority (such as the food service operation supporting the cooperatives) and we did see women in administrative positions in offices, I did not see or talk to enough women to get a feeling for their position in the Mondragon system. As for the availability of capital, all cooperatives — and the Mondragon cooperatives in particular — require that their member-owners invest seed capital in the enterprise, giving them a definite sense of “having skin in the game.” While these contributions are unlikely to be sufficient to meet the capital requirements of the enterprise, they are an important start. In Mondragon, all cooperatives must allocate a minimum of 10% of their net profits to the co-op’s social fund used for community investments. 6. It is the largest cooperative in the world. Mondragon retirees receive 60 percent of their pension from the government and 40 percent from the Mondragon system. In the “second level” cooperatives, that is, the cooperatives that serve other cooperatives, such as the bank and the health system, member-owners include both employees and representatives of the cooperatives served. They are given skill trainings and social safety nets to ensure sustainable employment. Qu'est ce que les "Learning Exploration" ? This is the question that brought me, and most of my traveling companions, to Mondragon in the first place. The Experience. When asked about specific issues at Mondragon that were troubling to me, our guide would sometimes shrug and say, “This is a democracy.” To me, that shrug said it all: sometimes people make thoughtful decisions, sometimes not; sometimes they take the time to participate in decision-making, sometimes not. When facts fail to conform to theory, there is a strong tendency on both sides to throw out the facts in order to preserve the theory. “It takes a tremendous re-educational effort to bring people into a culture that carries the responsibilities of running a business and sharing in a democratic process. Our thoughts on changing the banking system for good and building the new economy. The full version of the documentary TOGETHER. But only 98 of those are federated cooperatives, while the rest are international production subsidiaries. her work on mission-led employee-owned firms and their potential as the next generation enterprise design that could be key to building a just economy. The two other obstacles — culture and K-12 education — seem far more intractable at this point. Spain's Basque Country is home to the world’s largest co-operative Mondragon - a rare success story in a nation mired in recession. Each of these inspired considerable envy among our American tour group. There has been an increase in the number of women in managerial positions, conversations around using green energy in their R&D facility, and the development of a social transformation team. In an export-led economy, such as Mondragon, much of the “local living economy” is based on what Michael Porter and others call “industrial clusters.” In fact, according to Etxeberria, Michael Porter created a strategic plan for the Basque government in the 1990s and helped to shape the industrial clusters operating today. It was founded in the town of Mondragon in 1956 by José María Arizmendiarrieta and a group of his students at a technical college he founded. Over and over, I was struck by the non-doctrinaire adaptability articulated by our guide and demonstrated by the history of the individual cooperatives. And in the culture overall, we need to take responsibility for our contributions to our financial destinies, to the extent we can under existing contraints. There are several characteristics that make this an appropriate and potentially sustainable niche for a global competitor coming from a high wage country. That said, its members elect the Governing Council, which in turn selects the Managing Director. The Mondragon Cooperative Group has engaged in a domestic expansion process since the early 1960s and internationally since the 1990s. OUR AIM IS TO CONSTITUTE A BUSINESS Building wealth thru worker coops. The legacy of the past and present of the Mondragon cooperative experience, capitalised through an inmense experience and knowledge accumulated during these years, offers the opportunity to share it through unique educational offers and research areas. We were also told that to achieve a livable family wage, most families required two incomes. Benefits offered include health care, pensions, and unemployment. As for K-12 education, the current U.S. educational establishment’s emphasis on improving STEM (science, technology, engineering and math) education is not misplaced. The government pension program is an unfunded system (pay-as-you-go), while Lagun Aro is an individual capitalization system. At MONDRAGON, we welcome people from all over the world who want to visit and learn about the MONDRAGON Cooperative Experience. Admittedly, it might also be against their economic interest to include more worker-owners in the confederation. MONDRAGON is the outcome of a cooperative business project launched in 1956. the General Assembly), where all three roles are united in a one-member, one-vote democratic system. Mondragon has become the world’s largest and most advanced cooperative economy. The Mondragon group of cooperatives is likely the most successful in the world with nearly 90,000 employees, 260 companies and an annual revenue of over 19 billion dollars. OUR ROADMAP MORE COMPETITIVE, COOPERATIVE AND FLEXIBLE. I find I have a deeper understanding of the limitations of the social justice approach as a viable platform for social change, as opposed to building the institutions that undergird economic transformation, like cooperative structures. On October 27th, the United Steelworkers and Mondragon Internacional, the worldwide network of cooperatives based in Basque territory, announced a new alliance: PITTSBURGH - The United Steelworkers (USW) and MONDRAGON Internacional, S.A. today announced a framework agreement for collaboration in establishing MONDRAGON cooperatives in the manufacturing sector within the United … And second, because economic decisions may impact individual workers differently, the structure helps produce decisions based on “fairness” in balancing the needs of the few directly affected individuals with the needs of the many who are not. Die Mondragón Corporación Cooperativa (MCC) ist die größte Genossenschaft und das siebtgrößte Unternehmen Spaniens. But all of these issues cited here exist in the United States and elsewhere, regardless of whether our economies are organized under capitalist or cooperative principles. In a cooperative, where the democratic process has a direct daily impact on people’s lives and livelihoods, the participation rate and level of thoughtfulness would be expected to be higher than in the more distant matters of representative government. Social Council: This is an entity that is, in some respects, like a labor union, because it represents the concerns of worker-owners, but from the lens of their experience as workers. To work properly, democracy assumes that voters take the necessary time to educate themselves on the issues and participate in the process. Mondragon gave me further cause for such reflection. The graduates of this school founded the city’s first cooperatives. That said, when Father Arizmendiarrieta came to Mondragon, it was the poorest area of Spain. Die Mondragon-Kooperative ist eine große Bewegung, die ihren Sitz in der Stadt Mondragon im Baskenland hat und in der der Besitz den Arbeitern gehört. At the heart of this transformation is the desire to emphasize cooperation as opposed to competition as the most likely path toward creating a future that maximizes the well-being of all. The cause of the failure was a “perfect storm” of three related issues. Why doesn’t Malaysia hand out a RM1 trillion stimulus plan. This has necessitated hiring new workers in those new markets. In Mondragon, “large is beautiful” because large makes it possible to compete in global markets and thereby maximize employment — the ultimate goal of the worker-owned system. These values are well reflected in Mondragon’s operations. Note: ULMA does not make packaging for these products — it makes the machines that make the actual packaging. Cleveland, Rochester, Madison, Oakland, Austin and New York City, to name a few. As Winston Churchill and others have observed, “democracy is the worst form of government except for all those other forms.” I’ve certainly had occasion to reflect on that statement since the 2016 election and the advent of the Trump administration. Lagun Aro pension funds are invested conservatively, thereby avoiding some of the self-inflicted insolvency problems created by the US profit-maximizing system. Employee Ownership and Ecological Sustainability, over $500 billion in revenues and employs about two million people, representing well over $3 trillion in turnover, Real Estate: Everyone’s an Expert, Until They’re Not, The Sad Reason the Housing Market Is Booming During a Recession, How Congress Can Stop The Fed From Dragging Its Feet In How It Lends To Municipalities, The Daily Edge: Short-Term Flows Strengthen USD Dominance, A view on compassion or lack thereof in present times. And, of course, not all people want to be worker-owners.”. This cultural relationship and understanding of work highlights the MCC principle of the sovereignty of labor. That’s oppression. The Mondragon cooperatives talk about social transformation, a more far-reaching, future-oriented goal that seeks the creation of social and economic systems that reinforce the best in human nature. Shelves: econ. But then we can also be power ourselves. Third, each machine is customized to its specific application, thus requiring continued human intervention, providing continued employment. Few, if any, of these new workers have been offered membership in the cooperatives. She notes that the biggest change is in the younger generation and further notes that men and women doing the same jobs receive the same pay — an obvious gender equity goal that has yet to be achieved in the US. At the time, the small town was plagued by mass unemployment and poverty. First, in global terms, this is a relatively small niche market, less likely to attract a large number of competitors. In all cases, they remained true to their core value — providing long-term employment (and other benefits) to their worker-owners — but they did so with creativity, self-sacrifice, an emphasis on fairness, and an impressive commitment to collaborative decision-making. The governance structures supporting that critical difference are the General Assembly and the Social Council. And they experience a work culture of solidarity and alliances. So, ownership has compounding social benefits, stable wages and livelihoods reduce income inequality and improve public health. “ There are three kinds of power. She informed me about her work on mission-led employee-owned firms and their potential as the next generation enterprise design that could be key to building a just economy. While Lagun Aro pension funds are invested conservatively, thereby avoiding some of the system. 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