Getting Ready for Mondragon

As part of my class at St. Mary’s, I will participating in a 10-day seminar at Mondragon Cooperation Corporation. It is sure to be an exciting time and to get ready for the trip, we are starting to read up on this incredible cooperative experience. The following are my notes from one of the works being used in the class. It is We Build the Road As We Travel by Roy Morrison (now out of print).

Mondragon has many “types” of cooperatives:

Industrial (86)
(casting and forging, capital equipment, parts and components, consumer goods and construction)

Agricultural (8)
(Dairy, agriculture, hogs, sheep, feed production and marketing)

Service Sector (4)
(Industrial food and cleaning systems, data processing)

Educational (46)
They have a primary school system (Ikastolas) with 35,000 students
6 special training institutes:
•Institute of Industrial Design, p
•Postgraduate engineering and technical studies (abroad)
•Iranukor—continual education both general courses and courses designed at the request of specific coops.
Iraskale Eskola—teacher training
Saiolan—worker training in new technologies.

Alecoop is a cooperative where students work and put their education into practice.

Retail (1)
Eroski has 270 outlets. It has 1,600 members with a mixture of workers and consumers.
Housing (15)
Second-degree support (6)

The coops vary in size from 6 to 2,000

Cooperative Structure

One really needs to see the structure chart, because it is almost too complicated to place in simple words. However, the system known as Mondragon consists of individual cooperatives, secondary cooperatives and a tertiary cooperative congress.

Individual cooperatives consist of six basic features:
1. General Assembly consists of all members and has ultimate authority
2. Governing Council, elected by GA, in charge of day-to-day implementation of Coop Policy and Plan
3. Social Council, elected by GA, makes decisions about Personnel issues
4. Account Control Board, elected by GA, audits books and monitors operations
5. Coop Manager, hired by Governing Council, runs the business according to the plan
6. Management Council consists of managers and coop officers, meets monthly to review the coop’s progress.

Secondary cooperatives

1. Cava Lab oral Poplar (CLP) controlled by worker-owners and primary cooperatives (who are the membership). It is divided into financial and business divisions. Cooperatives sign an agreement of Association.
2. Lagun-Aro is the social security insurance system. It provides a full range of retirement, disability and health insurance.
3. FISO provides resources beyond what the CLP can do to help aid economically distressed cooperatives.

Cooperative Congress

This is a tertiary organization that meets bi-annually to consider broad system wide issues. While each cooperative is guaranteed one seat, the 350 members are allotted on a prorated basis based on the size of the cooperative. The congress has a president and vice-president, a commission to follow up on its decisions and its own General Council that includes members from the secondary cooperatives.

Industrial Modernism

Morrison argues that the Mondragon system, which he calls a “cooperative social system,” is a constructive response to the rise of Industrial Modernism. In this sense, Mondragon represents an ecological postmodernism and the Mondragon system faces six issues:
1. Pursuit of equilibrium
2. Ecological protocols and ethics
3. Engagement and change of social structures
4. Tension between centralization and autonomy
5. Freeing of social practice from ideology of industrialism
6. Diverse and convergent paths informing the reimagination of society.

Mondragon is concerned with the why and how the social means and social product is used, not who owns them. It sees class as a function of the industrial ideology and notes that the mere changing of ownership of the means of production has not transformed the nature of its use.

Industrial Modernism exists through the construct of a “steel triangle” in which the three sides are Technique, Hierarchy, and Progress.

Technique (science, technology, industry, bureaucracy) has built a culture that is capable of transforming the landscape, climate and biosphere. It is a means for dividing things and people.

Hierarchy (and power) create the class dynamic that allows small groups to control large groups

Progress is a “go code” combined with the false belief of “social Darwinism” it provides a seamless rationale for greed and cruelty and the idea that competition and self-aggrandizement were not social creations of capitalism but part of human nature.

Mondragon challenges this triangle through the concept of Equilibrio.

Equilibrio—life in a cooperative should not be carried out as if it were a “zero-sum” game. There must be a balancing of interests and needs.

Dynamics of Ecological Postmodernism

Mondragon Accomplishment is demonstrated through it cooperative economic sector and convivial social institutions.

The slogan  “Unity in Diversity” is the outcome of successful Equilibrio. It has three characteristics:

1. Values importance of individuals and groups
2. Recognized the integrity and validity of varying levels of responsibility
3. Recognizes differences among degrees of organization, time, scale, and intimacy.

“As individuals, we see that which appears to be “below us” (or smaller and simpler in structure) as a tumult of noise and motion; but this apparent chaos is, in fact, the murmurings, stirrings voices of life. What appears to be “above” us (or larger or more complex) looks implacable and unchanging, a source for reference or reverence. These grand structures are, in fact, a reflection of our aggregate being and behavior. They are also in motion, with dynamic and living rhythms.”

“The health of social and natural systems is reflected in the functioning, integrity, and interrelations of all of their components. Power in such systems reflects a facilitating freedom, an interactive potential whose apotheosis is love—a “power to” that is constrained and responsive, and can exist fully only within an ecological context.”

Chapter 2: Mondragon History and Development

•Basque region rich in environmental gifts
•Euskadi ancient civilization whose language is so ancient that it is separate from other indo-European languages
•Long history of metal working (made munitions in WWI)
•Tradition of community that was only displaced by capitalism (public ownership became private ownership)
•Tended to fight against Franco and paid dearly (Guernica)
*Franco’s victory meant political and economic repression for region (language banned, priests and community leaders executed)

By the 1950’s the Falangist Economy was failing and Franco’s grip on the economy slipped. Prodded by the Catholic sect, Opus Dei, Franco allowed reforms.

The Basque Church needs special mention because it was decidedly different from the mainstream Church. While the Hierarchy of the Church sided with Franco (the Arch Bishop called himself a soldier in Franco’s army), the Basque priests joined the resistance. They valued the village culture and nationalism of the Basque and fought to defend it. Many of these priests were executed until the Church hierarchy intervened sparing the life of many, including Don Jose Maria Arizmendiarrieta.

Don José María Arizmendiarrieta

Born 4/22/1915 in Vizcaya.
Entered the seminary in 1928, but joined the loyalists in the civil war. He was a journalist for a Basque resistance newspaper. After the war, he was imprisoned and scheduled for trial and inevitable execution, but was spared. He returned to the seminary and was assigned (as a punishment) to Mondragon. It was thought that keeping him (and other loyalist priests) in backwater towns would limit their influence.
JMA did not belief in the basic notions that work should be a form of suffering. Instead, he saw work as rewarding. His concepts and beliefs diverged from the Church of his day, but in 1981, many of his ideas would be found in John Paul II’s “On Human Work”.

On arriving in Mondragon, JMA became an instructor in the towns only school The school was owned by the steel plant and only allowed children of workers to enter (with the exception of 12 students from the community). JMA lobbied the owners to open the school to all and they refused. This led JMA to open his own school by soliciting donations from the community.

In 1943, the school opened with 20 students. Contributors elected a management committee and the pupils assisted with fund raising. This created a strong foundation of workers trained in skills and cooperative thought. In 1952, eleven of his initial students graduated from the University. Five of them formed the first Mondragon cooperative (ULGOR) in 1954 after working in capitalist firms and finding the owners unwilling to adopt worker input.

ULGOR followed JMA’s concepts and asked the community for help. They managed to raise $100,000 and moved the company to Mondragon in 1956. They also “borrowed” a design for an Aladdin Stove in France, managed to get the Spanish patent for it and began producing stoves. In 1958, they had grown to 149 employees

By 1959, they still had no legal status and several other cooperatives had started up. They all faced limited access to capital since the banks refused to loan them money. They found their own solution:
1. They developed and formalized a series of organizational and operational principles for each cooperative
2. They created their own bank, the CLP.

By 1964, the associated cooperatives have 27 coops and 2,620 cooperators.

Why didn’t Franco crush this movement?
1. Anarchists were hard at it in Barcelona
2. The Communist Party had reformed in 1958
3. Coops met the basic nationalist concepts of the Falange movement
4. Franco had yielded on economic control in order to maintain political control.

Mondragon was the natural outcome of industrial modernism. They followed the basic S curve of economic growth (start-up, rapid growth, slowing growth, renewal expansion).

I will try to add more as we get closer to the date. . . .

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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