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Catalyzing worker co-ops & the solidarity economy

The Spanish Basque Country as a 21st Century model

By the second half of the 20th Century Basque traditions of solidarity also fostered one of the world’s strongest worker cooperative movements. Worker-owned cooperatives, companies, and associations now account for around 10 percent of all jobs in Euskadi, and 17 percent of exports. Mondragon Cooperative Enterprises was founded in 1956 by five former students of a priest inspired by Catholic and socialist ideals, José María Arizmendiarrieta. Today with more than 80,000 employees worldwide and sales of over 12 billion euros annually, it consists of some 261 separate organizations in 31 countries, of which 105 are cooperatives. Mondragon companies manufacture and export machine tools, telecommunications equipment, computer chips, solar and wind energy equipment, and automobile components, to name a few.

Mondragon and the cooperative movement emphasize that economic development is not an end but a means to human and social fulfillment. Workers are co-owners and the salary differential between the lowest paid worker and highest paid manager in a cooperative can be no higher than 1:6. In Mondragon coops major decisions must be approved by General Assemblies, where all members from CEOs to lowest paid workers have one vote. If a Mondragon cooperative needs to reduce its workforce, the group ensures that workers are retrained and placed in one of the other cooperatives.

But Mondragon and the cooperative movement face increasing pressures to remain competitive internationally. Management has outsourced new production and distribution to affiliates in lower wage countries, and only around 40 percent of group workers are full-fledged owner-members in the cooperatives, located mainly in Euskadi. Mondragon also now includes 143 affiliated companies in 31 nations—including 20 in Mexico and 21 in China, and 6 in the United States. Almost none are cooperatives, so in effect the group has two kinds of corporate citizenship—one, more privileged, imbued with socially progressive rights in the coops, and a second tier of conventional companies in the rest of Spain and abroad.

Moreover, Basque researchers examining Mondragon and globalization found that “managers… are often more committed to efficiency than to the cooperative culture.”

Mondragon’s recent problems may be early warning signs of risks to Euskadi’s deeply rooted egalitarian traditions. Nonetheless, these same values continue to be reflected in initiatives of the government and private sector to integrate environmental sustainability into all areas of Basque society.

Read the rest at Open Democracy

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