-- [ From: Greg MacLeod * EMC.Ver #2.5.02 ] --
Dear friends,
Attached is another summary with the addresses of distributors.. a number of
people wrote looking for distributor names... please pass it on
greg MacLeod
Mondragon Book
by Greg MacLeod
1. TABLE OF CONTENTS
2. SUMMARY OF BOOK AND POST-SCRIPT
2. AND WHERE IT CAN BE PURCHASED
OF INTEREST ALSO, BCA WEB SITE : http://www.uccb.ns.ca/bca
CHAPTERS
1. Inside Mondragon
A: Background
B: Mondragon: The Parts
C: Structures and Governance
1. Single Enterprise
2. The Zone Group
3 The General Congress
2. The Strength of Mondragon
A: Mission Statement
B: Ten Principles
C: Enterprise Creation And Development
D: Providing For Continuance
3. New Vision
A: Sources
1. The Church Tradition
2. The Basque Social Tradition
3. Socialism and Personalism
B: Don Jos� Maria's Synthesis.
4. A Critique of Private, Social and State Enterprise
A: Capitalist Corporation
B: Traditional Cooperatives
C: Soviet Model
D: Towards a New Model
5. A New Model
A: The Cooperative Corporation
B: A New Role for Management
C: Role of Workers
D: Evaluation and Replicability
6. The Valencia Experiment
A: Beginnings and Development
B: The Parts
C: Evolution to a New Phase
D: The Future
E: Basic Principles
7. North American Glimmerings
A. Community Business Corporations
B. Alternative Financial Initiatives
C. Mexico: A Sustainable Development Project
8. Practical Reflections for Community Economic Solutions
A: Community Economic Development
B: Getting Started
C: Person-Centered Economics
Appendix I: Biographical Sketch of Don Jos� Maria
Appendix II: List of Mondragon Companies
Appendix III: Useful Addresses
Abstract
CHAPTER ONE describes the facts about Mondragon, what the visitor will see
on a visit there or what one will read in the annual business report of the
Caja Laboral Popular (Credit Union or Cooperative Bank) which for many years
served as the glue to hold the complex together. The description includes
how the components function and relate to one another. Mondragon exists as a
concrete, functioning and profitable enterprise.
CHAPTER TWO explains how the strength and success of Mondragon is rooted in
the founders' vision of society and their guiding value system. Aggressive
expansion in response to community needs is seen as a virtue. The complex
techniques of enterprise creation are described in detail. Also analyzed is
their freedom from bankruptcy.
CHAPTER THREE responds to interest in the original intentions and innovative
ideas that gave rise to all this activity. The researcher will find that
none of the components is original but that each was proposed by some
earlier thinker.1 The genius of Don Jos� Maria was to construct out of these
elements an original synthesis which proved to be applicable to the world in
which he lived. Syntheses are extremely important for the advancement of
knowledge. The synthesis of ideas behind Mondragon is important because it
triggered a collaboration among a variety of institutions that are normally
divided and in competition.
CHAPTER FOUR contains a critique of different models for a business
enterprise: capitalist, communist or communitarian. With the fall of the
communist systems in Eastern Europe these questions are important. An
extremely simplistic attitude might assume that the capitalist model has
'won'. However, problems like chronic unemployment, pollution, and events
such as the Los Angeles riots, indicate that traditional capitalist systems
have not provided a formula for human wellbeing.
CHAPTER FIVE presents the new model as envisaged by Don Jos� Maria, the
communitarian model which has yet to be widely tried in the Western world.
An examination of its success in the Mondragon complex reveals that it is
neither simply cooperative nor simply capitalist. The chapter shows how
Mondragon takes elements from several models and results in a community-
based business system which is very flexible and adaptable to changing
social needs and circumstances.
CHAPTER SIX describes the Valencia experiment as an example of the
transferability of Don Jos� Maria's model. Founded by a group describing
itself as followers of the Mondragon approach, the Valencian experiment
consists of a community bank, a string of cooperative retail stores, an
insurance company, employee-owned factories and a professional school.
CHAPTER SEVEN examines how the original motivation which inspired the
Mondragon experiment is shared by many groups in North America, including
one in Mexico, who are struggling to fight unemployment and economic decline
in their own communities. Also discussed are examples of other community
businesses which contain, in various degrees, some of the values associated
with the Mondragon experiment.
CHAPTER EIGHT explains how technology is a way of thinking and a way of
organizing. Based on his involvement in community economic development in
Atlantic Canada during two decades, as well as his visits to the Spanish
projects, the author proposes that basic guiding values and good technology
are essential in making a new economy for a sustainable future.
Appendix II is a useful list of the 96 member-enterprises of the Mondragon
Cooperative Corporation, including product lines and addresses.
Postscript - THE DEBATE
Like so many founders of social-economic movements, Don Jose Maria would be
surprised and puzzled by the giant international Mondragon Cooperative
Corporation of today. By 1997 Mondragon had established subsidiary
factories in Argentina, England and China. These resemble subsidiaries of
General Electric or any other large multi-national corporation. Also in
Spain, the cooperative retail systems of Eroski of Mondragon and Consum of
Valencia have joined forces to create a holding company called Erosmer.
Erosmer is now setting up subsidiary supermarkets throughout Spain as
private stock companies. The Eroski group owns 51% of the shares with the
other shares being owned by venture capital groups such as ONCE, a managed
fund owned by the national organization for the blind in Spain. The reality
of the retail food business is that small companies do not survive well.
The Eroski group is now one of the giants. It is number three in Spain. The
two top grocery chains are multi-nationals. Number four is another multi-
national. If Eroski did not go big there would be very little Spanish
control in the food business. However, it should be noted that, even if the
Eroski chain looks like the multinationals, there are important differences.
Within the Mondragon and Valencia areas the retail stores are still co-
operatively run. Both Eroski and Consum have central elected boards. The
central Eroski board, like the Consum board, has 12 members, six employees
and six consumers. The consumers are usually delegates from other
cooperatives. While each local consumer store does not have a management
board, it does have a consumer quality-committee. The consumer committee
provides continual input into management concerning quality of products and
services. The multi-nationals do not do this. Also, the Eroski system
promotes locally produced products, especially products from its own
community- owned producer systems. On the shelves of Eroski stores one will
find a surprising high percentage of Eroski produced goods. A further
difference is the policy of selling 8% of the shares to the supervisory
staff of each non-cooperative Eroski supermarket.
The debate about the seeming contradiction in philosophy is deeply rooted.
It is similar to the debate among the personalist philosophers in the early
part of this century. Some said that cooperative, democratic businesses
could not survive in a capitalistic dog-eat-dog society. Others said that it
is possible to organize democratic, socially responsible businesses in a
hostile competitive economy. Don Jose Maria took the optimistic side, hoping
that new democratic businesses would influence the others. Leaders in
Mondragon and Valencia say that they hold to their original philosophy of
promoting participation and serving the larger community but they recognize
the hard, cold realities of the international economy. If they did not
expand the Eroski cooperative store system to the whole of Spain then they
would have been swamped by the multi-national grocery chains who have lower
prices through economies of scale. They judged it impossible to maintain a
small chain of worker and community owned stores and still remain
competitive in price and product range. The only options they saw was to go
big or disappear altogether. To organize worker-owned supermarkets in other
cities like Madrid and Grenada was simply not practical. With multi-
nationals analyzing every city for market penetration decisions had to be
made rapidly and these decisions involved many complex factors which are
beyond ordinary citizens and ordinary workers. It involves much
sophisticated technology. So, the end result is that a cooperative,
community owned complex is flourishing in Mondragon but its health and even
survival depends to some extent on its non-cooperative subsidiaries in other
centres and in other countries.
There is a parallel situation in the area of electro-domestic products and
automobile parts. Huge multinationals have the dominant control. Over 30%
of the Mondragon production is exported. If they stay as there are they
will be put out of business by the competition; the original factories in
Mondragon simply would not last if they relied on the local market. Yet
they cannot organize democratic factories in England or the United States.
So they simply buy subsidiaries sometimes in strategic partnerships with
other corporations. Also, they will accept contracts to produce components
for large capitalist corporations like General Electric. It is a very real
dilemma. If they stick to their original worker-owner system, then harm
will be done in that workers in Mondragon will eventually lose their jobs.
If they participate in the capitalist, multi-national system then they will
go against their original democratic philosophy. I think that Don Jose Maria
Arrizmendiarrieta would have seen this as a classical problem of life. In
such a dilemma where one is faced with an evil on both sides, the rule was
to choose the lesser of two evils. This, the leaders of Mondragon have done,
but they have done it reluctantly. They did it, not because they wanted to
, but because they were forced to, and that is a good ethical stance.
The trend towards mergers and giant conglomerates became very clear during
the 1990's. For example, in May of 1997, when the Grand Metropolitan
Corporation and Guinness Corporation announced what soon became known in
London as the blockbuster merger of the year. It involved combining under
one corporate umbrellas such diverse companies as Haagen Daaz ice cream,
Bell Whiskey, Burger King, Johnny Walker Whiskey and Guinness Stout. This
new corporate combination was valued at over 50 billion dollars (23.8
billion pounds sterling). Part of the rational was that 2000 jobs could be
cut from the combine workforce of 85,000. This last fact brings out a
fascinating difference between the traditional corporation and the Mondragon
corporation. In its five strategic plan for 1997-2002 MCC projected the
creation of 8000 new jobs. While the traditional capitalist corporations
merge to reduce jobs, the community oriented Mondragon corporation merges to
create jobs. This manifests a very fundamental difference in the underlying
philosophies. Professional management and efficiency can be instruments to
impoverish communities or they can be instruments to enrich communities.
The difference lies in the vision and the philosophy.
The debate in Mondragon concerning the tension between efficiency and
participation is not unique. The same kind of dilemma exists in Eficoop in
Mexico, in New Dawn/BCA in Canada and in most cases where community-based
groups organize business enterprises. There seems to be an inherent tension
or even a contradiction between efficient wealth creation and democratic
participation. Professional management is necessary for efficiency and
wealth creation, but professional management can only function with
authority delegation and indirect democracy. It has often happened that
cooperative, community businesses destroyed themselves in resisting outside
control and insisting on local decision making. The worthy goal of local
democratic control led to incompetent people attempting to make decisions in
highly technical matters that they simply did not understand. It is not a
question of being malicious or self-seeking, it is simply a fact of life
that most businesses in our technological age require systems and networks
with highly trained, sophisticated managers.
This kind of debate is an ongoing one. It is paralleled in our general
political system. The ideal kind of political system would be one of
continual referendums where every citizen has an equal say in all decisions.
Thomas More in his Utopia of the 16th century designed a marvelous
democratic system, but it depended upon all citizens becoming well educated
and morally enlightened. No one has been able to implement such an ideal
system up to now. Most countries have chosen a system of representative
democracy with a great deal of indirectly delegated powers. It works more
or less for most people, but is certainly not satisfactory for the poor and
the unemployed.
For some activists in the cooperative movement the essence of
cooperatives is participation. Some cooperatives refuse to participate in
larger networks and ventures through fear of losing control. They would
rather remain small and democratic than grow bigger and have to submit to
outside control. A good number of cooperatives are commercially successful
following this formula. They have their qutonomy. However, some could
consider this a selfish view. It can happen that such a cooperative is
providing wealth and security for its five hundred or so members but that
outside that cooperative there are masses of poor and unemployed. Perhaps
Kropotkin was thinking of this when he signaled the danger of cooperatives
becoming exercises in collective egoism. The Mondragon leaders would say
that each cooperative has a duty to expand and create jobs as long as there
are unemployed people in the community. If a cooperative is profitable, it
has all the more obligation to set aside part of its profits and to invest
in the development of new businesses. Likely, the International Cooperative
Alliance was thinking this way when they added as one of the basic
principles of the cooperative movement: "Cooperatives work for the
sustainable development of their communities through policies approved by
their members."
`
In this book we have looked at Mondragon, Valencia and a number of smaller
examples of community initiative to set up businesses dedicated to the
common good. The ones that survive seem to be the ones that maintain a set
of ideals and values but who admit that they cannot be all achieved. Rather
, they hold the ideals as a kind of horizon which we aim at. Progress is
judged not simply in attaining the ideal, but rather coming closer and
closer to the ideal. The danger is that the incomplete, compromise
situation will be accepted as the ideal and that no effort will be made to
change and improve what we have.
While almost every other corporation in the world is cutting back and
reducing the number of employees, MCC has as part of its five year plan the
goal of creating at least 8,800 new jobs in Spain. This is accepted as a
duty to the general community which is suffering from unacceptably high
levels of employment. While for the Guiness Corporation, the priority is to
increase profits, the priority for Mondragon is to increase jobs and
preserve the community. This manifests the over-riding fidelity of
Mondragon to its most basic distinguishing characteristic: THE PRIORITY OF
PEOPLE OVER CAPITAL.
Merger.. Times of London, p. 31, May 13, 1997
"From Mondragon to America- Experiments in Community Economic Development"
by Greg MacLeod. UCCB Press, sydney, ISBN 0-920336-53-51- $24.95 cAN.
Available from Coles Book Stores and most other bookstores.
or
Goose Lane Editions
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--
Greg MacLeod
University College of Cape Breton
P.O. Box 5300
Sydney, N.S.- B1P 6L2
CANADA
FAX 902-567-0153
Univ. tel 902-539-5300
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