Cooperative Business


From Dave Smith
Ukiah

The Mondragón cooperatives of Spain combine credit unions and service cooperatives such as grocery stores with industrial manufacturing cooperatives, research centers, and a university — all as one intergrated unit. As a cooperative corporation, they are “an association of persons rather than an association of capital.” That means one person, one vote rather than votes apportioned to the amount of capital invested. It also means that the individual workers own and control the company they work in. They are the largest worker-owned cooperative in the world, doing many billions of dollars in sales. They own and operate thousands of supermarkets, a travel agency with hundreds of units, and gas stations. They also manufacture automotive parts, domestic appliances, bicycles, and bus bodies.

Although cheap energy has allowed organizations to balloon into huge monoliths that will now have to breakup and scale down into decentralized pieces, it is instructive how well the cooperative model can adapt to financial environments and serve its members. As our giant governments, banks, and corporations flounder trying to save a way of business that will have to change drastically in the years ahead, the cooperative model, along with small-scale private businesses, is a way local communities, such as ours, can adapt to the coming “mandates of reality.”

The Mondragón cooperative model can be compared to the corporate structure as follows:

· Owner-workers are valued as people. Management professionalism, product excellence, and customer satisfaction matter more than the rapid growth of profits.

· Owner-workers participate in management, with salary difference limited to a three-to-one ratio, rather than just being used at the whim of a grossly overpaid management class.

· The social contract commits everyone involved to the development of the business, with member-owner security and partnership with capital, rather than confrontation between labor and capital.

· Profits and losses are shared among all proportionally, rather than profits being internalized and costs being externalized irresponsibly.

Mondragón’s Community Bank, a credit union that serves as the core of its financial system, is owned and controlled by the member-owners of the cooperative. Without their own banking sytem, the cooperative would have failed. The bank invests in the development of new enterprises under the motto “Savings or Suitcases,” meaning members can either invest in their own community or watch their money leave their community to work elsewhere and enrich others. The cooperative also operates their own social security facility, which provides unemployment insurance, medical services, and medical insurance.

The Mondragón consumer cooperative grocery chain, with 264 stores, is run by a general assembly composed of an equal number of consumer-members and worker-members. The assembly elects a board that is similarly balanced, with six employees and six consumer-members, with a chairperson who is always a consumer.

Mondragón principles include (1) openness to all, regardless of ethnic background, religion, political beliefs, or gender; (2) the equality of all owner-workers and democratic control on the basis of one member, one vote; (3) the recognition of labor as the most essential, transformative factor of society and the renunciation of wage labor in favor of the full power of owner-workers to control the co-ops and distribute surpluses; (4) a definition of capital as accumulated labor, necessary for development and savings, with a limited return paid on that capital; (5) cooperation, defined as the development of the individual with others, not against others, to self-manage (managers are elected by the workers) and develop training and skills; and (6) wages that are comparable to prevailing local standards.

According to Don José María Arizmendiarrieta, the founder of Mondragón: “Cooperation is the authentic integration of people in the economic and social process that shapes a new social order; the cooperators must make this objective extend to all those that hunger and thirst for justice in the working world.”

Greg MacLeod, author of From Mondragón to America, writes: “The Cooperative Corporation itself is a moral entity having responsibility at three levels: (1) towards the individual employees, (2) towards the cooperative corporations which make up the Mondragón family, and (3) towards the general society of which it is the basic unit. As a microcosm of the general society, the enterprise must practice all the virtues demanded of the total society such as respect for the members, personal development and educational programs, social security and distributive justice.”

This successful alternative to the classic, top-down corporate model allows thinking outside the box store. Bottom-up democracy works and is the next step in bringing meaning into our work as well as our politics. Some of our politicians love to constantly spout off about bringing democracy to other nations, even if it takes our bombers and infantry to preemptively force it on them. Politicians who love democracy should not stop with politics. Let’s take them at their word, in our own local communities where the action will be in the future, and ask them to help us complete the American revolution by bringing democracy into our workplaces and our economies.


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