A Glimpse of the Mondragon Cooperative Complex

By Grady Ross Daugherty*  Photos: Robin Daugherty

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.

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.

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).

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.

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(*) 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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