A Glimpse of the Mondragon Cooperative Complex

By Grady Ross Daugherty*  Photos: Robin Daugherty

Hotel Mondragon at the Mondragon Cooperative Complex.

HAVANA TIMES, Oct. 15 — My just-graduated-from-college son and I traveled to the Basque region of Spain recently for a one-week seminar and tour of the Mondragon Cooperative Complex (MCC), the famous worker-owned cooperatives. Our trip took place under the auspices of the Praxis Peace Center of Sonoma, California.

Since I comment frequently on articles in Havana Times, arguing for a modern cooperative re-definition of workable socialism—and for Cuba to become what we advocate for the United States, a modern socialist cooperative republic—it might be expected that I would come back shouting and waving my arms about this stunningly successful cooperative experiment. This however will only be partially the case. I will speak quietly and positively, and also quite briefly.

What I would like to do is provide a glimpse of a few aspects of Mondragon, and perhaps draw a few conclusions relevant to socialist Cuba.

The Basque region, situated partly on the north Atlantic coast of Spain and nestled among the foothills of the Pyrenees, is a remarkably beautiful country. We had seen Madrid and its environs from the air and airport, and had been disappointed by its plainness and Texas-like landscape. It is small wonder that the short hop into thoroughly modern Bilbao airport on the Basque coast, with green mountains all around, was a pleasant contrast.

A chartered bus whisked us sixty kilometers east toward the mountainous village of our destination, and we became aware immediately that the Spanish highway system is state-of-the-art. There were tunnels all along the way, with entrances and exits beveled to the contour of the hills. Traffic flowed in a fast but totally relaxed manner.

During the forthcoming week, as we went through many small villages on our tour, we would realize that Basque region traffic almost never stops. They employ everywhere there a thing called a “roundabout,” in order to avoid stop signs and keep the traffic moving. (What an unpleasant shock later on to return to the US and have to stop dozens of times to go even a short distance.)

One of our first stops on the tour was a Fagor washing machine factory in Mondragon. Our curious two-dozen—all US citizens except for one Canadian—trooped single-file through the giant factory, marveling at the technological vastness.

It was difficult to accept that all this, to paraphrase Abraham Lincoln’s words, was “of the workers, by the workers and for the workers.” What was most noteworthy however was that so few workers were in evidence, and that there was not a manager in sight.

We learned that most middle management is not needed in a worker-owned cooperative factory, for worker-associates tend to manage themselves superbly.

Fagor Washing Machine Factory.

Also, we learned that relatively few workers are needed because self-employed associates push production efficiency to the maximum. When they get their target production done for a given day, for example, they simply go home.

But let us stop for a moment and recall that this is not socialism. It is a lack-luster factory existing under a capitalist political regime and within a capitalistic economic mode of production.

If you are a worker under capitalism, this is about as good as it gets. It does not change the world, but it does take the laborer part of the way to social and economic liberty.

What relevance does such a factory have for Cuban socialism? I think it argues that workers need direct legal ownership of the workplace, in order to make them happier, more self-confident, more dignified and more productive.

If either an investor-owned corporation or a socialist state should be the owner of Fagor, and be the employer of the workers, it is doubtful whether they would be anywhere near as happy, self-confident, dignified or productive.

For Cuba, this argues that the socialist state need not, and probably ought not own everything productive in sight. Primary ownership, it seems to indicate, should be with those who do the work, and that the incomes of these direct cooperative owners should depend upon their qualitative and quantitative productivity.

Spain’s Largest Grocery Chain

The 120 Basque cooperatives employ over 100,000 workers. Of these, about 30,000 operate Eroski, Spain’s largest grocery chain. But another 30,000 Eroski workers in the non-Basque regions are not cooperative associates. This has been a source of criticism of the Mondragon complex, and bears a brief explanation.

When Spain entered the European Union twenty or so years ago, the country’s market was opened to enterprise from other EU countries. The big French supermarket chains began to come into Spain, and the worker-owned Eroski markets faced the prospect of being put out of business. They could either sell out and quit, or expand and compete. They chose to expand and compete.

Mondragoni Supermarket.

Because MCC had its own bank, Caja Laboral, financial assets were available to purchase smaller chains existing across Spain. But the workers in these new acquisitions were not prepared for the responsibilities of cooperative ownership. Nor was it certain whether the expansion was going to work, that is, if Eroski would survive and consolidate.

Fortunately, the chain has kept its head above water, and now will offer Eroski workers throughout the country cooperative co-ownership in 2012. This should add another 30,000 associates to the MCC family.

MCC operates over 70 factories in foreign lands employing about 14,000 workers, but none of these workers are cooperative associates. This again has been a source of criticism of the complex. But they explain that their primary goal is to protect and increase jobs in the Basque country, not to introduce cooperative work environments internationally. They are first interested in their own protections and advances, for themselves and their families.

MCC encourages workers everywhere to learn from and perhaps duplicate the Mondragon model, but they do not and cannot do for workers everywhere what only these workers can do for themselves.

At this point, even the non-Basque workers of Spain still waste their time as wage and salary employees of capitalistic enterprise, and still resort to capitalism-compatible trade unions for minimal working class defense.

It would seem that those who are critical of the Mondragon workers’ economic experiment could expend their energies better by building cooperative enterprise.

One remarkable thing about the Mondragon experiment is that it began and succeeded under the brutal Franco dictatorship, in the aftermath of a Left-Right civil war that took a million Spanish lives.

Franco hated the Basques because of their support for the Republican government. He tried to suppress the worker-owned enterprises inspired by Father Arizmendiarrieta, but was prevented from doing so by Basque community resistance. This fact should encourage advocates of worker-owned cooperatives in every country (including of course socialist Cuba).

Mondragon Cooperative Complex

MCC has its own R&D research and development institutes; its own technical university offering advanced degrees; its own housing coops; and its own social security enterprise (Lagun-Aro).

While unemployment is severe across Spain, and is 10% in the Basque region generally, unemployment among MCC associates is zero percent. This is because workers whose positions become redundant in one cooperative are shifted to openings in another.

It is a constant struggle to maintain this excellent record, given the ups and downs of capitalism, but they are doing pretty well. They told us that their cooperatives have only survived and prospered because they support each other. This seems to be true worker solidarity.

This article has been a mere glimpse of our trip, but it is the best I can offer in so small a space. What I would like to recommend is for open-minded people of Cuba, including and especially young members of the PCC, to organize a collective trip to the Basque country where everyone speaks Spanish, and to talk one-on-one with many worker associates of various enterprises, as well as with MCC leaders.

Such a one-on-one learning process was something we could not do very well due to the language barrier, and also due to the particular design of the seminar and tour.

A final word? It was a fabulous trip; the Basque’s are a great people; and Mondragon may provide meaningful insight into the possibilities for worker-owned cooperation in noble Cuba.

(*) Grady is a semi-retired worker living in Southern California. He is a member of the non-Marxist, socialist Cooperative Republic Movement, the four cardinal principles of which are non-violence, legality, openness and persuasion. He is a frequent commenter on articles in Havana Times and welcomes your comments on this piece.

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4 thoughts on “A Glimpse of the Mondragon Cooperative Complex

  • Here is the google computer translation of the last paragraph of the last comment:
    “That a group of people are called cooperative means they have no cooperation with the society as a whole. We are not individuals or businesses, we are human beings who want a true socialism, not what’s on the island! Where the popular and democratic control overrides any business and we can build a national plan to create a better future for the majority.”

    To Orient Demerov: I think you misunderstand, Demerov. Because there is an argument put forward in favor of a retention and utilization of the institution of private productive property rights during the several-generations socialist bridge to a classless society, you mistakenly assume that modern cooperative socialists are in love with this institution.

    This is not true. We are saying that it is an historically evolved institution that is necessary and useful during the profound social, cultural, economic and political changes that we expect and hope to witness during the socialist bridge period. The experience of the Mondragon workers shows that workers themselves may take hold of the major instruments of production and run them democratically, ethically, sustainably and efficiently.

    As is indicated in the article however, these Basque workers are simply trying to make a living within the capitalist system for themselves and their families. During the last half-century the self-oriented Mondragon experiment in cooperation has shown us the economic basis of workable socialist economy. During the same period such experiments as the Soviet Union and Cuba have shown us something entirely different.

  • Yes this is all fine and good. Cuba will never want markets and private property though. We know that private property is how capitals emerge from so called cooperatives and markets are survival of the fittest we need to dream bigger than these Basque people because our problems are so much more serious.

    This new socialism is the old school socialism of the people who didn’t understand the power of corporations underdevelopment or the free market– just mistake a capitalism where the workers are the owners but socialism is more than that. It’s about making a new system of cooperation and equality. It’s for making new men and women who do not relate to one another based on profit and greed!

    The reason the Basques make a system which no one cares about is because it’s just capitalism bajo otro nombre. Just ask the workers of these so called cooperatives are exploiting in other countries!

    Que un grupo de personas se denominan cooperativistas no quiere decir que tienen cooperación con la sociedad en total. No somos individuos ni empresarios, somos seres humanos que queremos un socialismo verdadero, no como lo que tienen en la isla! Donde el control popular y democrático sobrepone cualquier negocio y podemos construir un plan nacional para crear un futuro mejor para la mayoría.

  • You’re welcome, John. As I’ve argued repeatedly, the institution of private productive property rights is not and never was the enemy of workable socialism. This institution has an exploitative, conservative potential, but it also has a potential for liberation and transformation.

    The problem with the old school of socialism is that, like the classic Utopian thinkers, the institution itself is believed to be what is wrong with society. The Basque workers have shown us that, with private productive property in the hands of those who do the productive labor, a socialist cooperative economy can function superbly, and at the same time prevent choking bureaucracy and one-party political and social absolutism.

  • Thank you Grady for taking the time to provide us with an excellent, informative view of what Mondragon is and isn’t.

    There are many lessons to be learned from this noble island of what-could-be amidst the social atrocity that is capitalism.

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