Worker-Capitalist Success Story
ALAN, RAY
Euro Vista BY RAY ALAN Worker-Capitalist Success Story It is a tragedy of the Basque country that the eta terrorist group, although it has fewer than 200 members, is better known than a far...
...Another: "Our co-op is more dynamic than equivalent private firms and offers more scope for innovation...
...Each group of 200 workers is represented on a social council, too...
...Earnings differentials may not exceed 3-1...
...In addition, the bank carries out market surveys for coops, is promoting automation ("so as to relieve tedium") and has financed a major new research center in collaboration with the technical college...
...Some co-ops have equipped entire factories in Central America and Africa...
...By limiting reinvestment and expansion, many co-ops could distribute more money to their members," a senior official of the Caja Laboral Popular told me, "but it is not our aim to make a privileged class of cooperators...
...A worker whose job becomes redundant must accept any other job offered him by the co-op and agreeto retraining, if necessary...
...And it is fortunate that, while class differences exist in northern Spain, they do not blister man-to-man relations as sorely as differences of accent and culture can do in England...
...During the next three years more co-ops were started, and in 1959 the new cooperative movement set up its own bank, the Caja Laboral Popular, whose role was to attract savings and lend money to new and expanding co-ops...
...Building on this sound social base, the Mondragon movement runs courses to "promote solidarity and the cooperative spirit" which all new workers are required to attend...
...Some 27 men who held an antimanagement strike a few years ago were reprimanded...
...After the War, appalled by the efforts of General Franco's officers and officials to eradicate not only Basque institutions but the Basques' culture and language, Don Jose Maria preached the virtues of mutual aid and communal initiative...
...Most workers cannot pay this much at once and are given a low-interest loan, repayment of which is deducted from their earnings...
...Applicants must first work in the enterprise for a year on probation...
...So did the underdeveloped state of Spain...
...It is now a technical college with about 600 teenage day-students and 600 adults who attend evening classes...
...Many new cooperators are Castilian-speaking immigrants from central and southern Spain...
...Cooperators are required to observe a clear disciplinary code that lists offenses, and the appropriate sanctions (mainly suspension from work, without pay, for from two to 60 days), in three categories...
...Communists and other old-fashioned Left-wingers dislike the Mondragon movement because it diverts workers from the class struggle...
...Money is merely a servant ; only fools let it become their master, " says an executive of one of the most successful co-ops...
...In 1960, funds provided mainly by the co-ops and public subscription financed a major expansion of lhe trade school...
...Even so, its members are justifiably proud of its material achievements...
...Because all enterprises are worker-owned, strikes are rare and self-defeating...
...The center attracted keen local support and funds, and before long it became a technical school...
...Social relations between workers and managers, and between their families, are easy at Mondragon...
...The current value of their share is reimbursed when they retire or if they leave...
...A senior bank official says: "The first important task of a cooperative movement is to form managers of the right type—people who are highly qualified and dedicated, more interested in achievement than money...
...a general assembly of 2,000 workers subsequently voted for their dismissal...
...capital markel...
...Co-op publications stress that "the motive force of our movement is not material gain but human fulfillment...
...Like most Basque priests, Don Jose Maria Arizmendi supported the Republic during the Spanish Civil War of 1936-39...
...The other co-ops are owned entirely by their workers...
...In 1956, five of its former pupils, encouraged and advised by Don Jose Maria, founded Mondragon's first cooperative, Ulgor, making oil-fueled heating stoves...
...they do not share in the profits and have no voice in policymaking...
...The reinvestment of a high proportion of profits, bank officials say, has resulted in most industrial co-ops being better equipped then their competitors in the private sector, and confident of their ability to compete with French, British and Italian firms when Spain enters the European Economic Community...
...The sales of these industries and five associated agricultural co-ops rose from $87.5 million in 1969 to $791.6 million in 1979...
...Most are industrial co-ops that manufacture an amazing variety of goods ranging from electronic components and dishwashers to excavators, equipment for steel mills and refineries, and even small ships...
...Other important components are 14 housing cooperatives, a big regional consumer co-op, five co-ops offering medical and social services, and 35 educational cooperatives that provide general and specialized courses for children and adults and promote the Basque language...
...The co-op bank has therefore been able to supply new and expanding co-ops with a steady flow of cheap money...
...This means that many executives are earning a quarter of what they would be paid by private firms...
...About the only people around who hanker after big differentials are said to be some young executives' wives—their eyes, no doubt, on the Joneses...
...The Franco dictatorship's challenge to the Basques' sense of identity was, no doubt, a factor making for the movement 's success, but its importance should not be exaggerated...
...Since the early '60s the bank and the college have been the brains and heart of the Mondragon movement...
...Minor faults" include lack of consideration for workmates and inadequate personal hygiene...
...This year's budget for "education in cooperation" is more than $1.4 million...
...This serves as the liaison between factory floor and management, communicating ideas and suggestions both ways and reaching agreement on such matters as working hours and conditions...
...The town is the financial and intellectual center of a network of 140 cooperative enterprises throughout Euskadi...
...lack of punctuality, absenteeism, theft, cheating, and other antisocial acts, inside or outside the place of work, are "very grave faults...
...In 1943, shortly afler being appointed to Mondragon, he persuaded local businessmen to open a training center for apprentices...
...If accepted for membership, they must buy a share in the firm at a cost of about $2,500...
...In Euskadi, as in Catalonia, [here is an ingrained savings habit among farmers and (he middle classes, and strong loyalty to local savings banks, even though their inierest rales, fixed by the government, have for years been far below the inflation rate...
...Whether it is considered a middle way between capitalism and socialism or an attempt to turn workers into capitalists, it has so far been a striking economic success...
...The index for unskilled workers is 1, for foremen 1.6, for middle executives 2, for "important executives" (who must have a university degree or its equivalent) 2.3, and for top management 2.5-3...
...It also has a social purpose: the creation of new jobs...
...Mondragon was privileged from the outset in possessing educated idealistic executives with a flair for business...
...Whereas eta's murders and exactions have deepened the depression in the old industrial cities of Euskadi (the Basques' name for their country), the Mondragon movement is a powerhouse of practical and idealistic good sense...
...An essential part of the group, without which development of the industrial and agricultural cooperatives would have been slower and more hazardous, is its cooperative bank with 93 branch offices...
...Half the cost of unemployment pay to workers who lose their jobs must be contributed by workers who still have jobs...
...The assembly appoints a supervisory board that meets monthly and makes senior managerial appointments...
...The regime's legislation governing co-ops and savings banks, and its policy of keeping down interest rates, helped the Mondragon movement...
...Nonmembers may invest money in the co-ops but receive only a fixed rate of interest (about 6 per cent...
...Mondragon is a small town built at the foot of a dragon-shaped mountain between San Sebastian and Vitoria...
...Mondragon's cooperators attach great importance to education—not surprisingly, since the whole movement grew from an educational acorn planted by one of those "red Basque priests" General Franco used to complain about...
...We prefer to extend the benefits of cooperation to as many workers as possible...
...Every co-op is controlled by an annual general assembly of its worker-owners, each of whom has one vote...
...About 45 per cent of profits go to reserves and investment, 10 per cent is spent on educational and welfare projects in the community where each co-op is located, and the remainder is distributed to workers in proportion to their earnings...
...Euro Vista BY RAY ALAN Worker-Capitalist Success Story It is a tragedy of the Basque country that the eta terrorist group, although it has fewer than 200 members, is better known than a far more interesting and constructive organization—the complex of industrial, agricultural and other cooperatives centered on Mondragon, involving nearly 20,000 people...
...Ownership of the bank is shared 50-50 between its "employees" and the rest of the movement...
...The key words in Mondra-g6n are "cooperation" and "worker-ownership," and one hears them spoken not only in factory canteens but in stylish executives suites...
...But most stay with the co-op, and for a variety of reasons...
...In 25 years it has become a source of life and hope for communities throughout the region...
...All of the co-ops have waiting-lists of people who want to join...
...insolent and noisy acts of protest" are "grave faults...
...One executive says: "I owe my education to the Mondragon college...
Vol. 63 • November 1980 • No. 20
