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13 January 2007

VISIT TO MONDRAGÓN

On the morning of January 3, 2007, when many people were still on holidays, Mikel Lezamiz, Director of Cooperative Dissemination, was waiting for us. Four of us had driven together eight hours through the fog to the city of Mondragón in the Basque Region of northern Spain. Mikel is like a living cooperative encyclopedia – ask him anything, and he remembers the facts.

This is the largest and most successful cooperative network in the world. Begun in the 1950s, today more than 50,000 workers are employed in 120 cooperatives, all of them part of the Mondragón Cooperative Corporation (MCC).

The Mondragón Cooperative Experience has ten basic principles, three more than the International Cooperative Alliance (ICA):

1. Open admission
2. Democratic organization
3. Sovereignity of labor
4. Instrumental and subordinate character of capital
5. Participatory management
6. Payment solidarity
7. Intercooperation
8. Social transformation
9. Universality
10. Education

Payment solidarity is not one of ICA’s stated goals. Mikel explained that the annual starting salary today in every co-op is €13,000-14,000 (approximately US$17,000). A one-to-three wage differential in worker salaries lasted more than 20 years. However in order to avoid losing their top management to private companies, they have raised the highest salaries to 4.5 times more than the minimum in most of the cooperatives, in the Caja Laboral Bank to 8 times more, and the Chief Executive Officer of the Mondragón Cooperative Corporation gets 9 times more, or €126,000 (US$164,000) per year.

All new workers in the Basque Country start with a six to twelve month trial period. If they demonstrate that they are good workers and accept the cooperative system, they can become a member by investing about one year's salary – they can get a bank loan to pay this over 36 months at 3.7% interest. But the benefits of being a cooperative member are impressive. For €30 per month, all members and their families get full health coverage. For €15 per month, members can send their children to the best private school, which is also run as a cooperative. There is subsidized housing, and, most important, they have job security for life! If for any reason their cooperative needs to layoff workers, they will be transferred to another cooperative. Of the 120 cooperatives, only 12 of them lost money last year, and a total of 110 workers had to be relocated to other co-ops.

Education, research and innovation have always been essential to MCC’s growth, and much profits are invested every year into the MCC University (with 4000 students), seven other cooperative schools, and 11 research and development cooperatives. The sophistication and high technology of the hundreds of products produced in cooperative factories make them very competitive throughout Spain and the world, earning the corporation €11 billion in total sales.

Each cooperative is responsible for its own marketing. Most of the cooperatives are industrial or in services – there are only four agricultural cooperatives, and some of some of those are very small. In the same way that the Mondragon Cooperative Corporation is not actively promoting cooperativism to local farmers, they also do not promote it in MCC factories and companies in the other regions of Spain or in 15 other countries; however the MCC board has finally passed a resolution to begin cooperative dissemination throughout their global network of companies. Women comprise 42% of the total cooperative members of Mondragón, but sadly they are elected to only 15% of management positions.

Every cooperative has a general assembly of all members which decides the general policies and strategies of the cooperative and appoints and removes by secret vote the members of its Governing Council and the Account Auditors. The Governing Council in turn appoints the managing director and other directors.

I asked whether they have had problems with dishonesty or corruption. Mikel said, “Each cooperative has both internal and external audits. In addition there is strong social control, meaning our Basque culture and the cooperative spirit that has developed for 50 years encourages group trust and solidarity. So far,” he said, knocking on wood, “there have only been three cases to my knowledge of members stealing from a cooperative. None of them were top managers, all of them were discovered relatively quickly, and all three were dismissed by the general assembly of their respective cooperatives.”

Last year 18 activists from the Brazilian Landless Peoples Movement trained for two months in Mondragon to learn how to start and manage co-ops effectively. This year a similar one-month course will begin in March; the Prout Research Institute is trying to convince SUNACOOP and other Venezuelan organizations to send participants.

We are committed to continuing our study of the very successful Mondragon Cooperative Experience, and we carried many books and materials when we left. Afterwards Mikel sent an email in which he wrote:

“I have been reading on the Internet about Prout, and I have been surprised by its clear and pragmatic ideas of the socio-economic development of communities. I believe that a lot of similarities exist between the philosophy of our Mondragón Cooperative Experience and that of Prout: for example, the importance of economic decentralization (in MCC each cooperative is independent and it maintains its own autonomy), participatory democracy, the balance between the social and the economic, etc. In general, I agree with all that appears in the Prout Study Guide.

“Allow me to make the following reflection. Perhaps the biggest difference that exists between you and us is that we have always avoided being too belligerent with the nearby economic systems (capitalist and communist) to avoid arousing suspicions and to make our own road, being pragmatic in the search for balance between the economic efficiency of our companies and the social development of the region. Our main mission is undoubtedly to generate wealth in the society. Another significant difference (allow me to say it) could be that our cooperativism is more directed at the level of labor. Outside of the company we are not too sensitive with spiritual life (although we do strive for social transformation toward a more fair, equal and united society). I believe that you are more spiritual than us and your philosophy of life and your practice of it is very consistent with the values that you propagate. I would say that you demonstrate cooperativism 24 hours a day, while we do so only during the eight working hours! Of course in our personal and family lives we also try to continue with solidarity and cooperative values, but without being very perfectionist.

“In conclusion I hope that we meet again and that in way or another it improves this world. With sincere cooperative greetings,
“Mikel Lezamiz, Director of Cooperative Diffusion MCC”