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1. Introduction and presentation of Mondragon
Mondragon is a network of cooperatives, located in Basque Country, in the estate of Spain. Mondragon,s activity is structured into four areas – Finance, Industry, Retail and Knowledge – which function separately within a group strategy.
The Finance area includes the activities of banking, social welfare and insurance. The Industry area consists of twelve Divisions specialising in the production of goods and services. The Retail area includes commercial distribution and agro-food businesses, and the Knowledge area comprises Research Centres, a University with 4000 students and several Vocational Training and Education centres.
Each individual Cooperative of 103 is one of the building blocks in the organizational structure of MONDRAGON, and each is independent and autonomous. The average number of employees at MONDRAGON is 74.000. 39.7% of these employees work in the Basque Country, 44.2% in other parts of Spain and 16.1% work abroad. Total sales are about 12.500 milion euros a year, and 394 milion euros of investment last year.
The mission of Mondragon is wrote this way: MONDRAGON is a co-operative business organisation integrated by autonomous and independent cooperatives that competes on international markets using democratic methods in terms of its company organisation, job creation, both the human and professional development of its workers and a commitment to the development of its social environment.
When the first Mondragon co-operatives were created, 50 year ago, or during the early years, co-operative social action involved a series of collective meanings of which we can highlight the following four:
a) THE SOCIAL PROBLEM. The Mondragon Co-operative Experience aimed to provide a solution to the social problem generated by capitalist industrial society.
b) TRANSFORMING STRUCTURES. The structure of capitalist companies was considered unfair: it enhanced social differences and did not guarantee the dignity of workers. It was therefore necessary to change both the structure and the relationship between capital and work in order to create a new collective subject which would unite both capital and work, but which would also recognise the primacy of work.
c) SELF-TRAINING OF THE CIVIL SOCIETY. The subject of the transformation should be the workers themselves: the social majority. In modern terms: the idea was to promote the responsible participation of the civil society. It was important to demonstrate that workers were capable of managing companies without any external interference.
d) MULTIDIMENSIONAL TRANSFORMATION OF SOCIETY. The historical challenge did not only consist of successfully managing their own companies. The workers also needed to demonstrate their capacity for self-government in other areas of community and social life; such as in the fields of education and health.
Society today is very different from what it was during the early years of the Mondragon co-operative movement, in the sixties. There have been many changes. Political context, the strengthening of the public area in democracy afther Franco dictatorship, the economic context, social context, ideological and cultural context changed, and it have had an irreversible effect on co-operation. Furthermore, we should also bear in mind that the changes which have occurred over the last two decades are gradually leading us towards a change of historical period, mainly as the result of globalisation and the scientific-technical revolution. All this should prompt us to rethink the nature and meaning of co-operation. In other words, the new world will bring with it new ethical dimensions, and co-operation projects will need to adapt to new ethical-economic needs and goals.
2. The core of the Mondragon co-operativism
The core of the Mondragon experience is to set up organisations based on the sovereignty of individuals. The word –sovereignty– is important, since referring to organisations “based on individuals” is tantamount to saying everything and nothing. The basic tenet of the Mondragon co-operative experience is the sovereignty of individuals forming the bedrock of its organisations: an experience in corporate democracy with a social commitment.
When summarising it as far as possible, we could say that two things characterise these co-operatives as enterprises. Inwardly, their institutional character of democracy.Outwardly, their social commitment, their specific way of occupying their place in society. This is what the Mondragon co-operatives are deep down: socially committed, democratic enterprises.
All this has a wider framework. The Mondragon co-operative approach comes within a project for transformation with a basic idea –self-management– which goes beyond it. The basis of the co-operative approach goes beyond the very co-operative itself as a corporate formula. And the fact is, as we have pointed out, the basic idea is about setting up organisations based on the sovereignty of the individual: that the protagonists in any sphere (industrial, educational, financial, social, cultural) should be the sovereign agents who, in the final analysis, should determine the directions to take when setting up democratically-based organisations. That is the underlying idea in Mondragon. The seal of this Basque co-operative experience has been about setting up organisations in a range of spheres including the industry, banking, education, consumer, university, and technological research spheres; all are based on power architectures that have a bedrock, in the final analysis, in self-management and co-management.
3. Some key of the experience
Something that attracts the attention of outsiders to Mondragon co-operativism is the fact that it refers to itself as an “experience”. It is a significant term that indicates a whole way of being understood in the world and in history. The Mondragon co-operatives are understood as an experience. This concept indicates to a certain extent the meaning of trial and the sense of trodden path. What do you do with an experience internally? You live it, you improve it. What do you do with an experience externally? You share it.
The world of the so-called “solidary economy” is an archipelago with hundreds of thousands of undertakings, in which exists a vast range of social enterprises from small artisan networks of indigenous women to solvent industries worldwide. Solidary economy is a vast humanising reality all over the world, in the South of the planet, in particular.
For many of them ‘Mondragon’ is a brilliant, contradictory, distant, as well as attractive reference. But what key points does Mondragon co-operativism provide for these experiences that are endeavouring to practice a humanising economy with self-managing intuitions?
The Basque co-operatives have five decades’ worth of experience with successes, problems and paradoxes. The experiences for transformation like the Mondragon experience are limited, contradictory, partial lights that can illuminate possible small alternatives. Mondragon has been an experience in corporate effectiveness of a co-operative type and has a series of practical ideas that are worth sharing with agents of this archipelago known as the solidary economy.
For a start, it has a central message: its experience asserts that self-management is good for human dignity and that it is possible to set up self-managed organisations that are efficient and strong in today’s market. This path trodden that spans half a century shows that despite the limitations and determining factors involved in operating in a capitalist market system, it is possible to be democratic and efficient at the same time, that it is difficult and requires certain compromises, but that it is possible, that it is possible to set up enterprises that are as competitive as the best capitalist enterprises when the sovereignty of the workers is taken as the basis. That hard co-operativism works and can be strong. And that it can all be done while maintaining the social commitment to the community and a commitment of mutual assistance in the network of inter-co-operation among the co-operatives.
In this task of sharing experiences it is also important to establish the limits and gaps in the Mondragon experience. Mondragon provides the experience of self-management, but it has no practical responses when faced with other current ethical challenges, like the sustainability of the model for global development, for example. It also has contradictions in the fulfilment of some of its principles (rates of temporary employment, forms of internationalisation, etc.) and important gaps have been identified (like co-operative education) which it is endeavouring to tackle. These are samples that show that it is a dynamic, complex, paradoxical experience in some aspects… all in all, alive but beset with problems.
I think that Mondragon must not be a model to be copied. It can be a reference for trying out some of its practical ideas. Each movement, immersed in its own history and human geography, seems to have to develop its own self-managed paths, and Mondragon is born with the seal of the Basque community, with its historical characteristics, its conditions and its social psychology. Yet it is interesting to know the problems of Mondragon and it is interesting to know what has worked in Mondragon, its keys to success. The work conducted almost throughout the decade of 2000 in this line of sharing the Mondragon experience with agents in the solidary economy of the South of the planet yields some clues: there are some important elements in Mondragon that could serve as a reference for solidary economy experiences worldwide. Let us mention eight of them with a phrase for each one.
(1) The education strategy is an important idea and highlights the idea that transforming co-operativism can only be maintained in an ethical and socio-political and technical education that provides it with a bedrock. (2) The central position of efficiency could be a wake-up call for not very rigorous undertakings in solidary economy. (3) The central idea of the sovereignty of labour and the legal formulas for getting the workers to be co-operators or members, even when there are other collectives that are also co-operators (agricultural producers, consumers, users, etc.), can overcome some limits in the conception of co-operatives. (4) The practice of intercooperationis crucial, the development of the Basque co-operatives has been made possible by the network and mutual support formulas which it has had. Some of these formulas can serve as a certain reference for setting up regional or sectoral groups in the solidary economy.
(5) The practical vision of Mondragon has been to set up self-sustainable structures that respond to a range of needs (production, credit, social security, education, technological research, etc.), by constituting autonomous cooperatives linked to the group as a whole in each sphere. (6) The social commitment to the regional community as a whole is, on the other hand, the link that ensures the orientation of the co-operative towards a project for transformation. (7) The dual aspect of participation, in the socio-structure (institutional or political participation in the sovereignty of the co-operative) as well as in the techno-structure (participation in the work process) is a way of responding to the challenge of efficient participation. (8) Finally, the Mondragon co-operatives historically use planning (annual management plan and strategic plan) as a social and managerial tool, and this is an indispensable element in the social and technical metabolism of the co-operatives. These plus a few others are just some of the ideas Mondragon can provide –with decades of practice and perfection as the guarantee in each of them– to experiences in co-operativism and solidary economy in other latitudes.
The Mondragon experience at this stage in its history needs reflection on the future of the ideas that drove it forward and which support it: human dignity, the sovereignty of labour, self-management, solidarity, participation. It needs to think about where it is heading, a reflection process that in some way has already started and which is the task of the protagonists of the Basque experience. In this reflection it is also necessary not to lose contact with the flow of ideas, dreams, visions and experiences of other experiences and movements on the planet. It is necessary to learn to look and listen, and to discern the whereabouts of the agents, who despite apparent big distances, vibrate on a similar wavelength as far as deep values are concerned.
4. Does this paradigm have a future?
It is the self-management paradigm that underlies co-operativism: the idea of organisations based on the sovereignty of individuals working colectivelly.
It could appear that the fall of the Berlin Wall and the increased dominance of capitalism might also have eroded the visions of socio-economic experiences with a colective sense. History has taken it upon itself to knock the total, state planning socialist system. The self-managing paradigm, however, is a paradigm with a very different bedrock, and is taking shape as one of the lines of humanisation in the current socio-economic panorama. The paradigm underlying co-operativism offers a number of key issues for thinking about the future.
Co-operativism could be along the lines of the kind of proposals brought up in current globality on the path towards models more in line with human dignity. Human dignity is understood in terms of autonomy, solidarity and the expansion of real capacities in order to opt for what is regarded as good. The central idea of co-operativism (to set up organisations based on the sovereignty of the individual) is a peripheral idea and right now only practiced in a limited way, but it could be an idea for the future, particularly because it is an idea that is accompanied by important elements of human dignity, recognised in theory in the declarations formulated by today’s human being.
5. Basic horizons when faced with globality
What place does the co-operative proposal have in the world of the 21st century? We could formulate three ideas followed by a series of potentials that co-operativism contributes in this context. In this section we will be dealing with co-operativism or economic self-management in general.
a) Co-operativism is set within the need for alternative, diverse, creative responses that the current socio-economic situation needs. This is not a time in which there is a global system that presents itself as an alternative to capitalism. Humanising trends point to these being times for putting forward and experimenting with a range of responses to the uniformisation driven by the socio-economic system. These are times for trying out, in different fields, limited alternative responses, which could be real proposals in the present, and seeds for the future. Mondragon co-operativism is a test bed for a future response in the socio-economic field. Its historical mission could be to go further into the self-managing paradigm which drives it forward, and raise the possibility of combining organisational democracy with corporate efficiency, by advancing in levels of personal and social transformation.
b) Co-operativism is set within the paradigm of democracy. Democracy is a deep model, a futuristic paradigm which in the present only includes a limited part of social life. We live in an approximation to democracy on the political fringe, the rest of the lives of individuals lies outside the democratic model. The democratic paradigm means organising people’s lives from the sovereignty of the individual; it is a horizon waiting to be built, it could be said to advance but is doing so only slowly. The co-operative fact constitutes an experience in enterprise democracy, and in this respect is a school of democracy oriented towards the transformation of the broad democratic paradigm.
c) In this respect, co-operativism has a fundamental idea that is broader than the co-operative fact itself. It is the idea we have referred to in the preceding section, the idea of sovereignty, in other words, that the protagonists of the realities and the organisations should be the ones to decide about their present and their future: the idea of colective self-management whereby the organisation should be based on the capacity of the individual’s autonomous decision. The background idea of co-operativism as an orientation and as a horizon is to move towards a society increasingly based on self-management in all spheres (industrial, consumer, financial, education, cultural, care) and be the driving force behind this process. In this respect, co-operativism has a horizon that is beyond itself.
Within these basic horizons, co-operativism has certain specific potentials that it can contribute to the socio-economic panorama of humanity in this new century.
• Properly tuned co-operativism contributes an experience of interconnection between the individual and the community. This tricky interconnection is a kind of matter pending for modernity and which, in general, neither liberal nor socialist proposals have managed to achieve once and for all. The co-operative is an ongoing, small-scale experience which tries to harmonise individual and collective interests, and provides the way forward.
• Co-operativism contributes the potential for creating development, in which development (endogenous, deeply-rooted, personal and community) is understood as something more complex and multi-dimensional than economic growth. The conception of development constitutes a central ideological debate in current globality, on which it is necessary to contribute experiences that go beyond theoretical formulations.
• Co-operativism contributes to the economy and to the notion of deeply-rootedness. Faced with the serious problem posed by capital’s lack of commitment, co-operativism set the enterprise, the capital, the economy, in a human geography.
• Co-operativism has a specific potential for creating and maintaining employment, owing to its own pro-activity in making it a social aim.
• Co-operativism has the potential to develop coherent and integral participation in the enterprise as it is one of the only corporate forms in which, beyond discourses and theories, the enterprise actually belongs to the workers legally; it is their sovereignty that supports it, and it can bring corporate institutional participation and organisational or tecnichal participation together.
• Co-operativism has a special potential for a social commitment to the milieu, an element that is in the genes of the co-operative fact itself. Within this potential, too, it can also activate certain forms of global solidarity, thus addressing the problem of the colossal divide between wealth and poverty through the sharing of development experiences.
• Co-operativism offers the potential for inter-cooperation by setting up networks comprising synergies and loftier aims.
In these potentials (participation, social commitment, individual-community equilibrium, conception of development, deeply-rooted nature), in other words, in its most genuine aspects, Basque co-operativism is heading in the direction in which many voices are saying that 21st century enterprises should be heading. That can clothe the Basque experience with a certain self-confidence and a certain responsibility. On the other side of the coin, it is precisely some of these potentials that have been undergoing a certain amount of erosion in co-operative practice.
6. Looking at the driving force
In addition to feeding on a personalist ideology with christian roots, Arizmendiarrieta established himself within a culture: a people, the Basques, and a milieu, the Basque-speaking areas with a rural tradition and an industrial culture, in which at that moment there existed a specific humus of values, behaviours, and psycho-social characteristics.
This co-operative project is not exactly a corporate formula. What is in the mind of its promoter is not a portable corporate formula, but a project with deeply rooted implications and a vision of certain integrality. In other words, it is about promoting the development of a community basing itself for this purpose on the cooperating and self-managing capacity of the individual. Let us take a closer look at these two aspects: the deeply rooted nature and the integrality of the experience that drove the first leadership of Mondragon co-operativism.
On the one hand, the Arizmendian proposal is a proposal for deeply-rooted development, in other words, thought up from the seal and concrete potentialities of a country and a social milieu, and, above all, thought up with the country’s promotion in mind –as a country, which in other aspects like natural resources, size, political matters, etc., has few resources–. But, on the other hand, the proposal has a certain integral calling. It is a project that does not begin and end in the enterprise. The Mondragon experience set up self-managed organisations in industry, and later in the financial sphere, and in the education sphere, and in the sphere of research, and in the agricultural sphere … it is a proposal that endeavours to provide a self-managed response to a range of social spheres from the educational to the technological.
We could sum up the Arizmendian ‘idea’ thus: a concern for different aspects of the community development of the individual and a response to them by setting up self-managed organisations,organised into a network with a sense of group.
So let us sum up the bases referred to so far. We spoke of an experience that pivots around the idea of creating organisations based on the sovereignty of the individual. As a result, we see the setting up of enterprises whose internal differential resides in their character of democracy and whose external differential lies in their social commitment. This social commitment emanates from the very conception of the cooperative experience as something that goes beyond a corporate formula and which forms part of a community development project rooted in a call for the integral development of the individual and the colective.
Jon Sarasua
