“In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production.
MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits).
As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker’s salary – a rate that has increased 20-fold since 1965.)”
The ideas of egalitarianism and equality can work and work well within society, Mondragon is but one example of how we could be organizing our society in a more just mode of production.
“Given that MC has 85,000 members (from its 2010 annual report), its pay equity rules can and do contribute to a larger society with far greater income and wealth equality than is typical in societies that have chosen capitalist organizations of enterprises. Over 43% of MC members are women, whose equal powers with male members likewise influence gender relations in society different from capitalist enterprises.
MC displays a commitment to job security I have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative enterprises. MC members created a system to move workers from enterprises needing fewer to those needing more workers – in a remarkably open, transparent, rule-governed way and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, and communities, also in unique ways.
The MC rule that all enterprises are to source their inputs from the best and least-costly producers – whether or not those are also MC enterprises – has kept MC at the cutting edge of new technologies. Likewise, the decision to use of a portion of each member enterprise’s net revenue as a fund for research and development has funded impressive new product development. R&D within MC now employs 800 people with a budget over $75m. In 2010, 21.4% of sales of MC industries were new products and services that did not exist five years earlier. In addition, MC established and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requirements of the European framework of higher education. Total student enrollment in all its educational centers in 2010 was 9,282.
The largest corporation in the Basque region, MC is also one of Spain’s top ten biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2010). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise.“
We need to see more of this in our business news.