I also noticed a lack of emphases on social and environmental impacts. Final reflections: Could the Mondragon system work in the US? The issues of individualism and the availability of talent are related. Imagine the power of employee-ownership as a lever for creating social, economic, and environmental changes. “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. 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. One can imagine a sophisticated, cooperatively organized, service-based economy that would also require significant technical expertise. 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. The answer is, at best, a “maybe.” I would have thought that the biggest obstacles to cooperativism in the U.S. would be American individualism, access to capital, and access to talent. The University was created by the association of three educational cooperatives, with the guarantee of an extensive career and experience in the world of education, these were Mondragon Goi Eskola Politeknikoa “Jose Mª Arizmendiarrieta” S.Coop., ETEO S.Coop. 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. 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. Die Genossenschaftler der Kooperative Mondragón im Baskenland erwirtschaften trotz Wirtschaftskrise immer noch 14 Milliarden Euro Umsatz im Jahr. Here are ten takeaways from the trip: I was not aware of my assumptions about Mondragon until I arrived and found myself surprised. 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. Some took early retirement, and a handful took a compensation package to leave the system. Jill Bamburg is a Co-Founder of the Bainbridge Graduate Institute and on the Faculty of Presidio Graduate School in San Francisco. 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). … As members of a cooperative, Mondragon’s worker-owners were not originally considered employees under state law. Your host throughout your stay will be a member of the Cooperative Outreach team, who will explain MONDRAGON’s story and its current situation, as well as answer your questions. Third, each machine is customized to its specific application, thus requiring continued human intervention, providing continued employment. The cooperatives are split into four main divisions of Industry, Retail, Finance, and Knowledge. 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. Mar 25, 2009 Kris rated it really liked it. 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. Georgia Kelly, our US-based tour organizer, countered that she has seen a definite increase in the number of women in managerial positions and training programs in the nine years she has been coming to Mondragon. This means organizing and building institutions together for what we need.”. Posted 23rd January 2017 by Unknown Labels: New Economy. That’s the type of future that I see my generation striving to create. Our thoughts on changing the banking system for good and building the new economy. We heard (and read) many stories of economic crises and how the cooperatives, individually and collectively, weathered them. Spain's Basque Country is home to the world’s largest co-operative Mondragon - a rare success story in a nation mired in recession. According to our tour leader, Georgia Kelly, “You cannot impose a cooperative culture where nothing like it exists,” she said. The critical difference, as noted previously, is that the purpose of the firm is to benefit its members rather than its shareholders. And third, just as the cooperative’s expanded capacity came on line, the recession hit and the bottom fell out of the market. As our local guide, Ander Etxeberria, observed, “In Mondragon, on the one hand, we do not have enough companies to provide to us and, on the other hand, it is not mandatory to buy in our cooperatives.” Instead, their choice hinges on the most competitive bidder. But it’s not just manufacturing. The film TOGETHER available to watch on line! 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. They were not very much in evidence on either the shop floor as worker-owners or at the management level. 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. 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. There is a need to address societal and environmental issues, and that it is everyone’s responsibility to do so. Note: ULMA does not make packaging for these products — it makes the machines that make the actual packaging. This blog post reflects the author’s personal views and opinions, and does not represent the views and opinions of Beneficial State Bank and/or Beneficial State Foundation. Although Mondragon cooperatives now operate in multiple sectors, the most significant cooperatives are worker-owned industrial enterprises competing globally in niche markets. 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. Power can assist us and we must guide it. We were also told that to achieve a livable family wage, most families required two incomes. 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. But then we can also be power ourselves. Few, if any, of these new workers have been offered membership in the cooperatives. 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 Mondragon Cooperative Group has engaged in a domestic expansion process since the early 1960s and internationally since the 1990s. It is the largest cooperative in the world. 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. Cities across the U.S. are embracing worker cooperatives, writes Oscar Perry Abello at Next City. Within the global cooperative movement, the Basque town of Mondragon occupies a special place. First, in global terms, this is a relatively small niche market, less likely to attract a large number of competitors. 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. 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. How cooperatives show resilience to the crisis can be watched in English, French, Spanish, Italian, Polish, Japanese, Greek, Turkish, Bulgarian and Korean here! That’s oppression. The Mondragon Corporation has over 266 business and cooperatives, in 32 countries. On this issue, there is good news on three fronts. So, ownership has compounding social benefits, stable wages and livelihoods reduce income inequality and improve public health. Despite its many virtues, Mondragon is not utopia. Qu'est ce que les "Learning Exploration" ? There is nothing in cooperativism that is inherently greener than any other structure. The priest of Mondragón, José María Arizmendiarrieta, wanted to help his community out of economic hardship. The surprise was in the scale of the experiment. Since the traditional division of interests between workers and owners cannot, by definition, exist in a worker-owned cooperative, the Social Council was hard for me to understand initially. The Mondragon Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. Workers buy into the cooperative with a fixed sum of money; usually a few hundred to a few thousand dollars. Thus, in a very significant way, the workers are directly responsible for the long-term strategic direction of the firm and they select their own boss, who reports to them. The surprise was in the scale of the experiment. As a result, Mondragon had to set up its own social safety net, which it organized as a cooperative called Lagun Aro. As with many successful firms, regardless of structure or industry, much of the growth in recent years has come from international markets, which now account for 70 percent of Mondragon sales. I am deeply grateful for the lessons learned in the 60 years of the Mondragon experiment and hope we can apply some of them here in the U.S. as we work to create a more equitable, sustainable economy. These are old, ingrained habits of thinking that will continue to persist among large segments of the US population, reinforced by neoliberal orthodoxy and business-driven consumerism. In Mondragon, the worker democracy explicitly seeks to balance the general interests of the firm with the particular interests of the individual workers, which are not always internally aligned. Mondragon today consists of 102 individual cooperatives united in a federation called the Mondragon Cooperative Corporation, which is also organized as a cooperative. While I had imagined a “local living economy,” somewhat focused on bartering in line with E.F. Schumacher’s Small is Beautiful philosophy, that is not how Mondragon functions. As a consequence, they do not participate in the benefits of worker-ownership. There are several characteristics that make this an appropriate and potentially sustainable niche for a global competitor coming from a high wage country. Together with the inhabitants of the town he founded a vocational school. Mondragon, with its strong technical and industrial skills, will be well positioned to take advantage of these new markets. Each coop is represented at the Cooperative Congress, where system-wide plans and business decisions are made. Mondragon uses this organizational approach to augment the involvement of workers in Mondragon’s initiatives as well as their participation in the management of … First, as environmental responsibility becomes an important consideration for both customers and worker-owners, it is likely to find its way into the mission and function of the cooperatives. By the time of our 2017 visit, only 60 former employees (three percent) remained unplaced. Housing cooperatives, which have been used to address the needs of seniors, students, mobile home park residents, and (occasionally) low-income communities. The Mondragon Corporation has over 266 business and cooperatives, in 32 countries. 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. And, of course, not all people want to be worker-owners.”. The second contradiction at Mondragon relates to environmental issues. 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. The Mondragon Cooperative Corporation (MCC) is a holding company for 110 cooperatives and 147 subsidiary companies. Mondragon cooperatives. 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. Its mission is encapsulated in its Corporate Values: intercooperation, grassroots management, corporate social responsibility, innovation, democratic organisation, education and social transformation, among others. 1 View comments Dec. 16. In the end, I have come to believe the biggest impediments would be our culture and the weakness of our K-12 math and science education. First, I think it strikes the right balance between the economic survival of the firm and the economic benefits to the individual workers. This structure has created a group of people, who aren’t owners, but whose labor Mondragon now depends on. However, if an issue is particularly contentious and the Social Council is opposed to the decision of the Governing Council and Managing Director, it can bring the issue to the General Assembly for a vote of the broader membership. 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. In addition, the Mondragon cooperative system owns its own bank, university, social welfare agency, several business incubators, and a supermarket chain. … 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. Der Grund: Sie wurden mit Maßnahmen gerettet, die heute noch in Krisen­zeiten angewandt werden. The desire for theoretical purity strikes me as a critical failure of both mainstream and alternative economics. OUR AIM IS TO CONSTITUTE A BUSINESS 3. What happened next is what was unusual. Although Mondragon offers numerous benefits through its distribution of wealth and power, the model is not entirely absent of inequities. But always there is another day: so long as democracy continues, there is the opportunity for another vote, a different outcome. The first, and most troubling, was the issue of international workers who are not members of the cooperatives. As I review my experience of Mondragon, I’m thinking this may well be its “secret sauce,” the key to its long-term success. Mondragón’s history starts after the Spanish Civil War. It is an elective body that represents worker interests to the Governing Council and Managing Director. Admittedly, it might also be against their economic interest to include more worker-owners in the confederation. And sometimes it is. Third, the sustainability orientation of Mondragon is potentially further along than I could observe on the ground. Faculty of Humanities … 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. By the end of our tour, I was amazed by the complexity of Mondragon’s principles and mechanisms. There are ways to overcome this issue, beginning with loan guarantees from those who understand and support the model. 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. Like many Americans who are concerned with rising inequality and environmental degradation, I was seeking an alternative to our current system’s focus on maximizing shareholder value. Unless that shifts, the cooperative model will not work. Mondragon retirees receive 60 percent of their pension from the government and 40 percent from the Mondragon system. 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 … Mondragon Worker Cooperative Documentary (---Must Watch---) It's 50 minutes and incredibly interesting. 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. and Irakasle Eskola S.Coop., which nowadays constitute the University’s two Faculties and School: 1. These values are well reflected in Mondragon’s operations. The full version of the documentary TOGETHER. Their method is sometimes incremental improvement toward the goal of reducing harm, while preserving the essential characteristics of the existing system. Each of these inspired considerable envy among our American tour group. The basic principle of democracy, in cooperatives and in nation-states, is one person, one vote. The coops have retained members’ jobs in Spain’s Basque country even during economic crises. see review. I was impressed in my reading by the complexity of the decisions worker-owners were asked to make, collectively, about salary adjustments, unemployment benefits, overtime pay, required capital inputs, retirement benefits, and a myriad of other issues. At MONDRAGON, we welcome people from all over the world who want to visit and learn about the MONDRAGON Cooperative Experience. 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. Creating for Humanity is a massive call to action that invites social innovators to present ideas, solutions or start-ups that respond to the needs created by the health crisis But only 98 of those are federated cooperatives, while the rest are international production subsidiaries. To work properly, democracy assumes that voters take the necessary time to educate themselves on the issues and participate in the process. The cause of the failure was a “perfect storm” of three related issues. The graduates of this school founded the city’s first cooperatives. The government pension program is an unfunded system (pay-as-you-go), while Lagun Aro is an individual capitalization system. Although it may not be the perfect utopia many envision, there is room for growth and change. The tour I took was organized and led by Georgia Kelly of the Praxis Peace Institute. Workers in those other locations are not members of the cooperatives, and thus do no participate in democratic governance. Mondragon has been slowly making changes to take on a larger role in pushing for equitable changes locally. Thématique : L'apprenance au sein de la Coopérative Mondragon. 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. That said, for the public part, the Mondragon system faces the same basic funding issues of defined benefit programs worldwide: uncertainty about where the money will come from in a volatile economy where current workers paying into the system are not keeping pace with the extended lifespans of retirees. OUR ROADMAP MORE COMPETITIVE, COOPERATIVE AND FLEXIBLE. Workers in Mondragon have the right to participate in a democratic decision-making governance structure. A case in point: “intercooperation” and the bankruptcy of Fagor Electrodomésticos. Workers in those other locations are not members of the cooperatives, and thus do no participate in democratic governance. 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. The Mondragon Cooperative Group has engaged in a domestic expansion process since the early 1960s and internationally since the 1990s. There are 2000 cooperatives in the Mondragon region with 97 of those connected under the Mondragon Cooperative Corporation (Etxeberria, 2019, n.p.). 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. Die Mondragón Corporación Cooperativa (MCC) ist die größte Genossenschaft und das siebtgrößte Unternehmen Spaniens. Founded in 1956 by Father José María Arizmendiarrieta, the Mondragon Cooperative Corporation currently consists of 102 federated cooperatives employing over 73,000 people. 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. But whatever the motivation, the net result is to create a set of second-class citizens on whose backs the growth of the firm now depends. Mondragon gave me further cause for such reflection. The assumption of the dominant culture — reinforced by our current economic system — is that each of us is on our own, out for ourselves (and our immediate families), and that the pursuit of material rewards (including extraordinary rewards) is the primary motivation for our economic behavior. 10. Social justice movements tend to talk about social justice, by which they mean some sort of redress of past wrongs — whether that takes the form of backward-looking reparations or forward-looking policy adjustments. This is an issue that I think Mondragon has figured out really well, striking an important balance between the need for democratic decision-making and managerial discretion. Centro Corporativo de MONDRAGON Pº Jose Mª Arizmendiarrieta nº 5 20500 Mondragón – Gipuzkoa – Spain Tel: +34 943 779 300 Our local guide was Ander Etxeberria, Director of Cooperative Dissemination. The third issue of concern had to do with the status of women. Mondragon may offer a worthy alternative. The Basque region of Spain is an absolute EU leader in recycling and reuse — having won awards and this sustainability mentality has also influenced Basque leadership on the GINI coefficient.”. Created in 1997 and officially recognised by Law 4/1997 of 30th May. This has necessitated hiring new workers in those new markets. But then we can also be power ourselves. Benefits offered include health care, pensions, and unemployment. 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 most compelling reason we heard for why these international workers are not also owners is that there is not a culture of cooperatives in these foreign markets and Mondragon does not believe in, or have the capabilities for, proselytizing the cooperative form. This means organizing and building institutions together for what we need.”. In Spain, the state-run social safety net is designed to cover employees. Lagun Aro pension funds are invested conservatively, thereby avoiding some of the self-inflicted insolvency problems created by the US profit-maximizing system. According to what I’ve read, this happens very rarely (as one would hope and expect), but when it has happened, the decisions of the General Assembly have gone both ways — sometimes supporting “management” (i.e. Pragmatism is the only enduring “ism.”. Zur MCC gehören mehr als 100 Unternehmen verschiedener Sektoren wie Maschinenbau, Automobilindustrie, Haushaltsgeräte, Bauindustrie, Einzelhandel (u. a. Supermarktkette Eroski), Banken und Versicherungen. the Governing Council and Managing Director) and sometimes supporting the “workers” (i.e. The Mondragon Cooperative Corporation is a business-based, socioeconomic program that is committed to serving the interests of the environment, individual competitive improvement, and customer satisfaction (Tremlett, 2013). I went to Mondragon to see this system in action and to explore its relevance to the US. In a difficult year of widespread crisis, the exports of the MONDRAGON cooperatives saw a spectacular leap accounting for close to €53.5m (8.9bn pesetas) which was a rise of more than 54% although the starting position (€35.3m, 5.9bn pesetas) seen from the perspective offered by time, was very modest. This observation prompted some musings about different approaches to social change — specifically, the differences between the goals of social responsibility, social justice and social transformation. 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