Former Australian politician and co-operative historian Race Mathews has written a lot about Mondragon in articles and in his books Jobs of Our Own and Of Labour and Liberty. The latter was produced with the help of records held by Australian Mutuals History.
In a 2003[i] essay he wrote:
The great complex of industrial, retail, financial, civil engineering, service and support co-operatives based on Mondragon in the Basque region of Spain — now the Mondragon Co-operative Corporation (MCC) — offers a benchmark in the uses of employee ownership to create jobs, drive
regional economic development, facilitate entrepreneurship and empower workers to assume control of their workplaces and the wealth created by their labour. It demonstrates conclusively the feasibility of labour hiring capital instead of capital labour. It demonstrates how social and economic objectives within firms and between them and the wider community can be harmonised with one another. These are all good reasons why Australians should get to know all they can about Mondragon.
In the same article he writes, “Australia’s credit union movement is seen as a possible means of enabling worker co-operatives embodying the Mondragon principles to be established.” Mike Lezamiz, Director of Mondragon’s co-operative dissemination unit, said that, “The Mondragon Corporation is based on a commitment to solidarity and on democratic methods for its organisation and management … Our mission is not to earn money, it is to create wealth within society through entrepreneurial development and job creation”[ii].
Today the Mondragon Corporation is a conglomeration of 69 cooperatives employing 70,000 people and grossing more than 12 million Euros a year making it one of the largest enterprises in Spain. The New York Times wrote recently that, “The group includes one of the country’s largest grocery chains, Eroski, along with a credit union and manufacturers that export their wares around the planet”[iii]. The group even includes a co-operative university which educates upwards of 10,000 students at a time mostly in engineering and computing but also offers a Bachelor’s Degree in Gastronomy and Culinary Arts.
Mondragon Cooperatives are 80-85% worker owned enterprises. At annual general meetings, the workers/owners select and employ a Managing Director and retain essential powers such as deciding what to do with the profits.
A 2012 article in The Guardian highlighted some interesting and impressive facts about Mondragon:
(Mondragon’s) 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 organisations 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 …
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 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[iv].
Race Mathews narrows the origins of Mondragon down to Father Jose Maria Arizmendiarrieta. Jose Mari Arizmendiarrieta was an opponent of General Franco’s Fascists during the Spanish Civil War in the 1930s and he narrowly escaped their wrath with his life at one point.
In 1941, he became a Priest in the town of Mondragon. Part of his duties included teaching at the school for apprentices for the town’s biggest employer, Union Cerrajera. Despite having a large local manufacturer there were unemployment problems and a shortage of technical education.
When Father Jose discussed these problems with Union Cerrajera executives and suggested that they could fund expanded technical education opportunities they told him that they couldn’t help. Father Jose decided to put the same question to the local townspeople which in 1948 led to the creation of the League of Education and Culture which was a co-operative association of teachers, students, parents and townspeople which further developed the initial training school into the Mondragon Polytechnical Institute.
Thereafter writes Mathews:
The graduates of Arizmendi’s school soon found that there was little scope locally for the application of his industrial and social teachings. A need was recognised for something different from business undertakings in their conventional form. Arizmendi responded with a further application of the co-operative approach. The social doctrines of the Church were drawn on in developing solutions to the problems of worker co-operative organisation which had eluded Robert 0wen, the Rochdale Pioneers and most of their successors, and a model emerged which made sense to the Mondragon community. The first of the new co-operatives was five former students from Arizmendi’s original technical school group who were its founder members.
When, three years later, the rate at which further co-operatives were being established finally outstripped the capital available for them, Arizmendi argued successfully for the co-operatives to have a bank of their own, and the Caja Laboral Popular was born. This resulted in an explosive period of growth in the size, scope and number of Mondragon co-operatives with thirty-nine additional co-operatives starting up in the ten years from 1960 to 1970[v].
The above quote was written in 1986 and was from Mathews’ first published work about Mondragon. He was still publishing material about it in 2017 in Of Labour and Liberty. He continues to believe that the Mondragon model and cooperatives more broadly can play a big part in Australian life despite a “widespread – albeit mistaken – impression that cooperatives are out dated and there is no place for them in a world dominated by free market economics and competition policy”.
Not only does he believe that co-operatives in the style of Mondragon are feasible here under the right social and political conditions, he believes financial mutuals could play a big part in the process noting that,
“There is no reason why Australian credit unions should not re-task themselves so as to shift their lending, either in part or wholly, from its present focus on personal and housing loans to bringing about economic growth for the local and regional communities of whose capital they are custodians”.
An example of such a situation he cites is the case of United Food and Commercial Workers in Philadelphia, USA, buying two abandoned supermarkets which were then reopened as worker cooperatives with financing from their credit union.
References
[i] Mathews, Race (2003) “The Mondragon Worker Co-operatives and Their Lessons for Australia”, see racemathews.com
[ii] Bibby, Andrew (2012) “Co-operatives in Spain – Mondragon leads the way” ,https://www.theguardian.com/social-enterprise-network/2012/mar/12/cooperatives-spain-mondragon
[iii] Goodman, Peter S. “Co-ops in Spain’s Basque Region Soften Capitalism’s Rough Edges”, New York Times, December 29, 2020
[iv] Wolf, Richard (2012) “Yes, there is an Alternative to Capitalism: Mondragon Shows the Way”, https://www.theguardian.com/commentisfree/2012/jun/24/alternative-capitalism-mondragon
[v] Mathews, Race (1986) “Mondragon and Australia”, http://racemathews.com/Assets/Mondragon/1986%2008%2017%20Mondragon&Aust.pdf
