In an area of study that is plagued with a history of failure, The Mondragon system of cooperatives is one of the only successful workers cooperatives in the world, operating since its founding in 1956. Mondragon is an incredibly old city located on the north coast of Spain in the basque region, an unlikely place for the most important industrial complex in Spain. A workers cooperative is just one of the many forms of socialism that have been tried throughout world history. The Mondragon workers cooperative's unique system has many benefits the rest of the world can learn from, and it may provide hope to those who still want to see socialism have a legitimate chance to influence how nations govern themselves.
The Mondragon system was founded by a priest named Jose Maria Arizmendiarietta (Arizmendi for short) and 5 of the students in the first graduating class of the Escuela Politecnica in 1956. The Escuela Politecnica was a school founded by Arizmendi 20 years prior to the founding of the Mondragon system. This school was founded with the workers cooperative's success in mind. Arizmendi believed that normal education systems were built upon the teachings fundamentals of self-preservation, solely monetary success, and a lack of care for a community's success. Arizmendi's students were taught the social and economic lessons that the future leaders of the complexes would need in order to successfully flourish. These lessons focused on collective success rather than individual, something that is very unique to Arizmendi’s schools. Many of the leaders of the Mondragon cooperatives are graduates from this school.
The Mondragon system of mutually supportive cooperatives has been an example to the rest of the world for alternative and sustainable methods of worker relationships. Their system of cooperatives has grown extensively since its founding in 1956. Today, it has roughly 80,000 workers included in their worker owned cooperatives. There are 110 cooperatives based in Spain's Basque region and they have 147 subsidiary companies with total revenue in the billions of euro (Alperovitz, 2013). The number of benefits for the members of the coops is astonishing. The statistics for the ratios in salary gap between the highest ranking officials and the lowest is as little as 3:1 and only as high as 9:1. This is compared to Spain's average ratio of 127:1 and some U.S companies with 200-300:1 (Kasmir, 2020) . Social councils within the cooperatives ensure fair anticipo pay (wages paid in anticipation of work to be done), reasonable hours, and security outside of the workplace. Some of these securities include health care, pension, and unemployment (Whyte, 44). One example of the Mondragon cooperatives benefits system is the Fagor branch situation in 2013. When the branch announced that they were going under, Mondragon cooperatives, “announced that its internal insurance company Lagun Aro [would] pay 80 percent of the cooperative member's salaries for two years and the corporation will strive to relocate as many employees as possible to other cooperatives in the network” (Alperovitz, 2013). All of these benefits are layered over the fact that the workers have a say in the direction of the company as well as a personal stake (some members have more stake and say). According to Mondragon officials, these great conditions only support and build upon the likelihood for the social cohesion Arismendi introduced. Workers taking pay-cuts, investing additional funds, and transferring between coops when needed are all testament to this social growth (Kasmir 2020). In many countries around the world where systemic crisis is rising, Mondragon has set the example of what social cooperatives can accomplish both economically and socially.
Breakdown of Mondragon System cooperative chain of power. Pay ratios discussed in paragraph refer to those of the highest executives in "supreme governing body" and workers in "department A, B, etc..."
https://www.managementexchange.com/story/mondragon-cooperative-experience-humanity-work
It is important to pay attention to their successes and how they arrived there in order to learn how to potentially include aspects of their corporation in future governments, but we should also pay attention to the areas in which where they fall short. The Mondragon system of cooperatives has veered away from their defining characteristics in order to secure growth on an international level. In the 1990s the Mondragon system of cooperatives expanded globally, outside of strictly Spanish markets. The cooperatives now control and employ over 100 subsidiary companies, most of which are in post socialist countries. The subsidiary firms they control are not worker owned and the employees do not receive any of the benefits or rights that are given to the members of the cooperatives, including systems to determine fair pay and conditions , health care security, voting rights, and unemployment options. As employment numbers rise in order to establish a national name, it becomes more costly to include all these workers as true members of the cooperative, allowing them to have benefits and stake in the company.
https://www.managementexchange.com/story/mondragon-cooperative-experience-humanity-work
Although the Mondragon system consists of many good ideas, its need for a pre-existing and specific kind of education, along with difficulties to remain a true cooperative system throughout a growing process indicate that the rest of the world is not yet ready to experiment with this idea. That being said, the thought and work that have gone into the survival of this system for close to 75 years is a remarkable feat. The Mondragon system of cooperatives, if nothing else, has provided the world with a great starting point for critical thought about economic and political systems outside of capitalism that can be successful in the long run.
SOURCES:
https://geo.coop/content/gar-alperovitz-and-mondragon-fagor-bankruptcy
https://globaldialogue.isa-sociology.org/mondragons-third-way-reply-to-sharryn-kasmir/
Making Mondragon by William Foote Whyte (EBOOK)
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