The Mondragon Co-operative Federation:
A Model for our Time?
Mike Long
[Reprinted from Freedom, Winter 1996]
The Mondragon Co-operative Federation (MCF) is a community of
economically highly successful worker-owned, worker-controlled
production and consumption co-operatives centred around Mondragon, a
town in the Basque region of northern Spain, and now spreading
throughout the Basque provinces and beyond. The MCF is an experiment
in participatory economic democracy rooted in a powerful grassroots
movement for Basque cultural revival and autonomy, but inclusive of
non-Basques.
The MCF began quietly on a tiny scale with one co-op and 12
workers nearly 40 years ago under the fascist Franco dictatorship.
The original members were educated but poor and had to borrow money
from sympathetic community members to get started. By 1994, the MCF
had become the fifteenth biggest business group in Spain, comprising
some 170 co-ops and over 25,000 worker members and their families,
with vast assets, large financial reserves, and annual sales of
around three billion US dollars.
Studies have shown that the co-ops have consistently outperformed
surrounding capitalist industry on all the usual measures, and while
unemployment in Spain has hovered around 20% for many years, full
employment has been maintained within the Federation. All this has
been achieved with a level of internal democracy and concern for
social justice undreamt of by most workers struggling under
exploitative state systems, whether capitalist or authoritarian
socialist.
Not surprisingly, international interest in the MCF has grown
over the past 20 years, especially now that so many governments are
unable to provide even for basic human needs food, shelter,
education, healthcare, art and recreation - and are increasingly
recognised as uninterested in doing so. (As anarchists have long
pointed out, that is not what governments are for, after all.) There
is a sizeable literature in several languages on Mondragon. Harvard
business students study management within the Mondragon co-ops.
Stanford law students learn about the legal obstacles to setting up
such entities in the USA Enlightened Australian trade unionists
consider whether using union funds to start "mini-Mondragons"
for their unemployed members might be more effective than filling
politicians' pockets in the vain hope of slowing corporate job
export to non-union, low-wage, third world countries. And some
anarchists wonder if the MCF is a test, or even a vindication, of
their ideas.
This article has three aims. The first is to sketch the
historical context for the MCF, including the wide-scale
experimentation with worker-controlled industry and agriculture that
took place during the early months of the Spanish Civil War.
There are similarities, ignored by many professional MCF
observers, although not by all, between the internal structure and
day-to-day functioning of the CNT/UGT collectives in 1936 and 1937
and the MCF co-operatives since 1956. This is so despite the
undeniable compromises which today's worker-owners have made (or as
most of them see it, have been forced to make) in order to stay
afloat in the hostile capitalist sea in which they operate, and
despite the fact that the debt appears to go unrecognised by many of
the co-operators themselves, few of whom consider themselves
anarchists. The second aim is to provide a brief overview of the
Federation's development, structure and functioning. The third is to
evaluate its significance for anarcho-syndicalists.
Industrial unions are not only the means to an end, for
anarcho-syndicalists, however. They also offer a mechanism for the
rational co-ordination of the production and distribution of goods
and services in the new society on a scale demanded by its modern
size and complexity - a scale that is difficult, perhaps impossible,
for either pure anarcho-communism or collectivism to manage. To
illustrate, union and industry-wide councils can preempt the
potential for selfish competition inherent (although not inevitable
of course) in collectivism, with its retention of assets and
property ownership by collective members. They can do this, for
example, by sheltering one collectively owned farm, factory or
service from a more successful one, or by researching planning and
funding the initial implementation of new unionfunded ventures, such
as co-operatives, ensuring that they will be useful, economically
viable, and will not duplicate services offered elsewhere. Their
size and strength also allow industrial unions to guara ntee
protection for sick, weak or temporarily unproductive community
members, rather than leaving them to depend on what is essentially
the charity of others, as pure collectivism tends to do. Finally, as
evidenced by the historical record, anarcho-syndicalism has long
been recognised as relevant to their needs by far more than "just"
blue-collar smokestack operators, appealing instead to workers of
all kinds: to sailors, dockers, miners, lumberjacks, bakers,
cobblers, barbers, needleworkers, educators, postal workers, flight
attendants and computer operators, to white-collar providers of
numerous other goods and services, and to collectivism, with its
retention of millions of landless peasants.
In addition to all these options and variants in anarchist
economics, there are disagreements within the various camps about
how to get from here to there. Anarchists have long argued over
whether, as one collectivist, Proudhon, believed, it is possible to
evolve gradually and peacefully towards one or the other system, or
whether, as another collectivist, Bakunin, asserted, what they
aspire to can only be achieved by revolution and expropriation of
the existing means of production, forcibly if necessary. Not
surprisingly, therefore, anarchists' attitudes towards Mondragon
vary, too, ranging from enthusiastic (e.g. Benello, 1986/1992) to
dismissive (e.g. Chomsky, 1994). What follows is based on my reading
of English, and some Spanish, literature on the MCF, coupled with a
week-long visit to Arrasate (the Basque name for Mondragon) in June,
1994, with fellow Wobbly, Charlene "Charlie" Sato (we
visited as individuals, not as representatives of any organisation).
Our stay in Arrasate included an intensive series of pre-arranged
interviews, informal group discussions, and site visits, as well as
enjoyable and equally informative evenings spent socialising with
co-op members over bottles of the MCF's excellent Rioja wines.
A model for our times?
The generalizability of the Mondragon model may be considered in
at least two ways: in terms of its practical viability and its
ideological acceptability. Much has been written about the former,
with some debate about the relative contributions to the MCF's
economic success of the following factors, and various combinations
thereof: Basque nationalism; co-operative values; a strong sense of
(Basque or any other) ethnic, linguistic and cultural identity among
the participants; the foresight and leadership of Father
Arizmendiarrieta; the compatibility of MCF values with Basque
traditions, such as co-operative farming practices and the
relatively equitable land distribution among Basque families
compared, for instance, with the hacienda system of southern Spain;
the rapid expansion of the Spanish economy after the Civil War, with
a heavy demand for household goods and other early MCF products; the
political and economic history of Spain, with its strong anarchist
and anarcho-syndicalist traditions and lengthy prior experience with
agricultural, fishing, and industrial production co-ops; Mondragon's
strategic location, with easy access to large ports like Bilbao, and
short distances to major export markets; the scope and diversity of
the MCF's high technology products; the use of crucial second degree
co-ops; early establishment of the CLP; the centrality of the
industrial co-ops; the relatively low cost of land for the
agricultural sector; the availability of a highly educated work
force with relevant skills; and the felt need to look to a self-help
model, given the Basque people's long history of state oppression.
Also widely considered crucial is the MCF co-ops' internal
worker-member economic structure. My own view is that perhaps all,
of the above factors were differentially important at various times
in the MCF's history, it is in their internal structure and
functioning that the co-ops' main ingredient for success lies - and
in this domain, too, that they come closest to anarchist principles
and values. I believe that (a) the motivation and commitment needed
to buy or work one's way into a co-op; (b) the initial extra
capitalisation provided by retention of a portion of members' income
in their internal capital accounts; (c) the equality and mutual
respect produced by the one person, one share, one vote, system; and
(d) the stability and freedom from external control guaranteed by
the impossibility of members selling shares to each other or to
outsiders, have made for a system of worker ownership and (with some
dilution in the interests of operational size and efficiency) worker
control. The pride and security this brings the MCF members, the
feeling of control over their own lives, the visible economic
success of their efforts, the decent standard of living they have
achieved for themselves and their families, and the positive impact
all this has on the communities to which they return after work each
day, have had a liberating effect on the workers of Mondragon, just
as anarchist theory would predict.
If this analysis is accurate, or even close to it, variants of the
model adapted for local conditions must be of interest to
like-minded individuals or whole communities elsewhere. In fact,
co-ops on something like the Mondragon model are already operating
in several countries, including Germany and the USA. Many writers
have discussed the MCF or similar projects positively, and several
have provided practical information on how to go about setting up
new co-ops.
Whether worker or union-owned and/or controlled, and no doubt
accompanied by militant union organising in existing workplaces, it
is clear that something like Mondragon-style co-op federations, and
federations of federations, are urgently needed in many countries
today. Quite apart from the human misery and environmental
devastation it causes, capitalism simply does not work even judged
by its own execrable standards. The desperate plight of growing
millions of unemployed and never-to-be-employed workers in the inner
city ruins of so many "advanced" industrialised countries
attests to this. So does the poverty, disease and starvation that is
the lot of millions of capitalism's third world victims. These
people are viewed by "their" governments merely as the
inevitable statistical fall-out from multinational corporate "restructuring"
and increased "efficiency". Politicians, states and the
capitalist system have nothing to offer them. Radical industrial
unions, like the CNT, the SAC and the IWW have something.
Ultimately, however, their future lies in their own hands, just as
it did the oppressed citizens of the small town of Arrasate some
fifty years ago.