The Mondragon Corporation is the largest and most successful worker-owned cooperative group in the world. Based in the Baque Country, with its headquarters in the town of Mondragón, the Mondragon Corporation is a network of over one hundred constituent worker cooperatives, working in a range of sectors including industrial production, agriculture, and retail, and also including both a bank and a university. It is in the ten largest companies in Spain, with over 67,000 workers in its constituent cooperatives, and is the largest business group within the Basque Country. Ander Etxeberria is Mondragon’s director of “cooperative dissemination”: the person charged with explaining the values and operating principles of Mondragon to those outside the organisation. He talks here with Renewal commissioning editor Martin O’Neill about how Mondragon works, the values it aims to embody, and what lessons can be learned from its example for the development of cooperatives elsewhere in the world.
(This conversation took place during a visit by Ander Etxeberria to York, which followed a visit Martin made to Mondragón as part of a group from the Democracy Collaborative. Martin’s visit was part of an ISRF funded research project on “Democracy at Work”.)
Martin O’Neill: Ander, it’s wonderful to see you in York, and many thanks for finding time to talk to Renewal! I think a lot of our readers would know a little bit, at least, about the Mondragon Corporation. So just to start us off, could you say a little bit about your role in the organisation? You have perhaps a unique job title. I don’t know if there’s anyone else anywhere who’s a Head of Cooperative Dissemination.
Ander Etxeberria: Mondragon is special. It’s something particular around the world. We have therefore had visits since the first moment. In the 60s, the person who would that take care of visitors was personally the founder of Mondragon, Fr José María Arizmendiarrieta. It was Arizmendiarrieta himself. Then, not only the founder, but also the followers of the founder would welcome guests. We have had visits over the years from journalists, researchers, politicians, students. For the last 20 years or so, more or less, there’s been one person in Mondragon Corporation to attend to our guests and visitors. And now this person is me.
My job is to explain to visitors what we are. If they come to Mondragón to know what is the Mondragon experience, what are you doing, what are your principles, your values, your history, your challenges. We have more or less every year 2000 people, 2000 people interested in coming to visit Mondragon.
Martin O’Neill: When I visited Mondragon in May 2018, with a group from the Democracy Collaborative from the US, very memorably you described the Mondragon Corporation to us as an island in a capitalist sea. I think the very fact that your job exists, the fact that it is so unusual to have an organisation like yours, and the fact that people all over the world want to know about it, raises some interesting questions about why Mondragon is so unusual. So you must get asked this question quite often. Why has this very different economic model worked in the Basque country? Or, why has it worked for Mondragon in a way that has had such a successful history, but which we perhaps don’t see in other places?
Ander Etxeberria: There are many reasons for that. There is not only one reason, or one factor. One is, when we started, it was after the war. There was no welfare state. It was during a dictatorship. In our case, there was a brilliant man, the founder, the priest Arizmendiarrieta. It was in a Basque country that used to understand property in a special way. In our thinking property is not only for buying and selling, but property is justified by use. Not only property to sell the product, but especially the property to use. Yes? If you are not going to use, okay. Give the opportunity to another one to use. This can be a farm. It can be a forest, or it can be a company.
There was, in the Basque country since centuries ago, a sense of democracy. Also there is a sense that work has always been seen as something positive in our country. For everyone, it doesn’t matter your status, if you are an aristocrat or not. Work is something positive. Historically, we have understood work as a way to develop ourselves. So there are many factors together that allows Mondragon to be born.
Martin O’Neill: Given the very specific historical situation in which Mondragon was founded, do you think it really was just a unique set of circumstances, the combination of having this very charismatic founding figure of Fr Arizmendiarrieta, together with some very specific broader political circumstances? Do you think that it’s something that could be repeated elsewhere in other times, or really was there something that was very special about that set of circumstances there?
Ander Etxeberria: First of all, to do the same it will be impossible, even in the Basque country. But on the other hand, to replicate something similar to Mondragon, is possible everywhere. When I say this, is because now in my job I have messages from people who were visiting Mondragon 20 years ago, 10 years ago, five years ago, and they are now saying, “We want to visit again Mondragon because we now have another management board, and we want to show Mondragon to this next generation, because Mondragon inspired the cooperative that we created and it is still growing.” This sometimes could be a cooperative school, an industrial cooperative, or sometimes it could be a group of cooperatives. We have examples created, thanks to the inspiration of Mondragon, in Brazil, in the United States, in the United Kingdom, in France, in the Netherlands. So it is certainly possible to create organisations like Mondragon.
Martin O’Neill: In Britain there’s been a lot of interest recently in what gets described now as “the Preston model”, the work that is being done by Matthew Brown and his colleagues in Preston City Council. I know that Matthew has been a visitor to Mondragon, and that he was very inspired by that visit, and also by the work being done by the Democracy Collaborative in Cleveland, which itself took a lot of inspiration from what happened in Mondragon. Are people within the Mondragon Corporation taking an interest in these developments in the US and the UK? Is there an interest in how some of these ideas are being applied, whether in Preston or in Cleveland, or in other places?
Ander Etxeberria: There is an interest, but is a kind of informal interest. Many people in our cooperatives are asking, “What about the inspiration of Mondragon around the world?” Well, this is something that I’m planning, to get this information, to collect all the information and to do a report about it, because it will be very interesting not only for us to know that Mondragon is important not only in the region where our cooperatives are located, but Mondragon is important for the rest of the world.
Martin O’Neill: One thing that struck me as being very interesting when I was visiting was the role of the Mondragon bank, Caja Laboral, as well as the role of the Mondragon Foundation, and the fact that there are financial institutions that are linked to the cooperative, the industrial cooperatives, and the other cooperatives within the group. There is an institutional ecosystem there, with these different institutions supporting one another. One thing that people are thinking about quite a lot in Britain now is different ideas around local banking. I know that’s something they’re looking into in Preston, with a Lancashire Bank, looking at the idea of setting up a local bank there that would then help to finance the activities of cooperative firms within the Preston area.
Martin O’Neill: Some of the ideas around regional development banks now that are coming out of the Labour Party also seems to take very seriously the role of financial institutions as part of the institutional ecosystem that allows for cooperatives to develop. Could you say a little bit about the role of sympathetic financial institutions in how Mondragon was able to develop?
Ander Etxeberria: Historically, the first industrial cooperative of our group was created in 1956. In 1959, the founder, Arizmendiarrieta in his brilliant mind identified a problem, an important future problem. At that time, our cooperatives were very wealthy, and very profitable at that time. But our founder saw that when we needed that money, because we are a cooperative we can’t take part in the stock exchange, in the capital market. So when we need money, we have to use the money we have and the money we have saved, or we have to ask a bank. So he saw that it is a good idea to have a bank in the group.
So Arizmendiarrieta created a bank in 1959. First, the bank was created with the money of the companies, and then the bank began to use the savings of the region to create companies. But to create companies means that every year in the general assembly, they said, “We have for the next year the intention to create six cooperatives.” And in one year, in the next general assembly, they said, “Well, we have already created six cooperatives this year. Next year we will create six or seven.” That means that they were using at that time in the ’50s, in the ’60s, in the ’70s, the money of the people, the savings of the people, to create cooperatives.
The reality now is that to create jobs, especially to create industrial jobs, more and more money is needed, so we need more and more money. We are looking for other sources to finance our cooperatives. We are collaborating especially with public institutions, so we can get part of our finance money from the public institutions.
Martin O’Neill: It is an ambition of the Shadow Chancellor, John McDonnell, and a commitment of the UK Labour Party in its 2017 manifesto, that Labour would seek to double the size of the cooperative sector. [See the NEF report, Co-operatives Unleashed, by Mathew Lawrence, Andrew Pendleton, and Sara Mahmoud.] That ambition to use the state’s power to help cooperatives to grow is certainly something that’s been thought about within the Labour Party. What do you think are the most important things the national government or local government could do to help support the development of cooperatives?
Ander Etxeberria: In my opinion, the most important is visibility, and the sense of possibility. It is important to explain to the society and to show the society that there is a way to create and run companies that is different from the traditional way, and this alternative kind of companies are cooperatives. When I am in some countries explaining Mondragon, my hosts say, “It is important that you are here, so we can show people, we can show politicians and the society in general that cooperatives are efficient. Cooperatives earn money, and they are real companies. They are not surviving because of public subsidies, but they are competing around the world with other companies that usually are not cooperatives.”
Ander Etxeberria: So for the public administration, it’s important to show that this is possible. This is possible, and of course this is good for the society.
Martin O’Neill: I think you’re right that there’s often a lack of awareness or imagination of what the different options are, of the range of institutional possibilities, that strangely constrains the freedom of action that people have. There are certainly alternatives, even if we are often told otherwise!
Ander Etxeberria: Yes. And if you look to Mondragon, it it is not necessary to imagine it, because it’s a reality. For us, cooperatives are something natural and something normal. We have been living in this environment with cooperatives for decades, and in the case of the Mondragon experience, for over sixty years. For us it’s normal. And this is a good news. Because if we are ordinary normal people working in a normal way in a cooperative, this is possible to do. It doesn’t matter what part of the world. We are not super-powerful! We are ordinary people.
Martin O’Neill: I heard a few times on my visit that, “This is not heaven and we’re not angels”. That this is a normal form of organisation seems a very important point.
Ander Etxeberria: Yes. This is important because maybe some people can think that Mondragon is so special, the people of Mondragon is so special that it’s impossible to replicate. No. Normal people can accept the rules of a cooperative.
Martin O’Neill: One thing that you mentioned when you described your job of cooperative dissemination was to explain what the values of Mondragon are. Could you say a little bit about your understanding of those values are? Because although you want to emphasise that it doesn’t take kind of unusual motivation to work at a cooperative, as opposed to working in other kinds of firm, presumably people who do work within a cooperative to some degree have to align their values with the values of the organisation. So could you talk a little bit about that?
Ander Etxeberria: We have many values. For example, inter-cooperation. Cooperation is fundamental. We are 102 cooperatives, and if my cooperative is in trouble, the rest of the cooperatives are going to help me. Or in terms of a member of a cooperative, if I have no work, I have the right to work in another cooperative. This is inter-cooperation, this is solidarity. Solidarity is also that, in our system, the difference between the lowest wages and the highest wages within the organisation is a maximum multiple of six times. This is also an expression of solidarity.
Ander Etxeberria: Then we have, for example, the value of democracy. The daily decisions are taken by the directors, but the most important decisions are taken in the general assembly once per year. One member, one vote. It doesn’t matter the seniority, if you are a member since two years ago, or you have been a member for twenty years. It doesn’t matter if you have €20,000 of capital or €200,000 of capital. One member, one vote. This is very important. And it’s very important to remember that work is something positive in the Basque tradition, and it’s not that you are condemned to work. No. Because working, you have the opportunity to develop your skills. This is not easy, because depending on what you are doing, sometimes it’s not so easy to feel comfortable working. This is something that is not yet an answer in the whole of humanity. But we have these values. We have these principles: cooperation, solidarity, and the value of work.
But what about the reality? There is sometimes a gap between what we are saying in our webpage, our principles and values, and what we are doing. Of course. Because we are companies, and if we want to continue being companies, if we want to implement these values and principles, then we have to be profitable. So one of our components is also pragmatism.
The thing is that there is another, wider gap between what we are in reality and the rest of the companies in our region, or around the world. There is an important gap. And this gap allows a higher quality of life in the region where our companies are. So, okay. There may be a gap between what is written, our aspirations, and the reality, but there is a larger gap between our reality and the reality of the rest of the companies. And this second gap is important, because in the region where most of our companies are located, the Alto Deba comarca of Gipuzkoa, this region usually has the lowest ratio of unemployment of the whole of Spain, it has the highest ratio of investment in research and development of the whole of Spain, and the lowest economic inequality of the whole of Spain. This is because we want to continue existing, and our cooperatives bring these benefits for the people of our region.
Martin O’Neill: When I visited Mondragon, I was very struck by some similarities – in both landscape and history – between your region and, say, parts of South Wales or parts of Yorkshire or Lancashire, that had a lot of heavy industry in the late 19th and early 20th century, and then went through de-industrialisation. But it certainly struck me, as a visitor, that dealing with those economic changes over the last decades had happened much more successfully in your region than it had done in South Wales or in the north of England.
But let me ask you something a bit more critical. In his book After Occupy, Tom Malleson, who is an academic in Canada who works on issues of political economy and social justice, writes about different economic models that people might turn to, if they’re dissatisfied with current forms of capitalism. He has some statistics there that suggest that levels of democratic participation within Mondragon may be not as high as one might hope for them to be. I think his figures had something like one third saying that they were very involved, another third saying that they were somewhat involved, and maybe a third being not very involved at all with the democratic side. Are there some cooperative members who actually aren’t very engaged with the democratic elements of the organisation?
Ander Etxeberria: I don’t know these figures, but if we are normal people, then some of them are very engaged, and some of them are not! Usually in history, we invent names for a special moment. For example in the French Revolution, you were a citizen, ciudadano, citoyen. That means that you are virtuous. You are worried about the revolution, about the situation of your country, about the kingdom at that moment, the republica, and you’re worried about the problem of the people. During the Soviet revolution, it was komarade. Yes? Now in our democracies, we say “ciudadano“. Citizen. And a citizen is not a person that votes every four years, but citizen is a person that is worried about the problems of the society, and take part in different events to improve that society. So we are always looking for this kind of people. And if you are going to analyse cooperatives, you expect that members are going to be special. Citizens are special, members are special. But all of us, we are normal, and some people are going to be very, very normal, and they are not going to take part in different meetings. They are not going to take part, except if what we are going to talk about is very, very important. And you are going to have people that always are taking part, and they are also normal people. I don’t expect anywhere 100 or 75% of the people engage. It doesn’t matter what event.
Martin O’Neill: Let me ask you about one thing that I know you got asked about by the group that I visited with, from the Democracy Collaborative, and that’s a question about the overseas subsidiaries of Mondragon, and the fact that there are many people who work for Mondragon as employees, just as kind of regular employees rather than as members.
Ander Etxeberria: We have 12000 workers for subsidiaries around the world, and very few of them are members of the parent cooperative.
Martin O’Neill: And, for the cooperatives within Spain, how many workers are full members and how many are temporary workers within the cooperative?
Ander Etxeberria: More or less 85% members. 15% are non-members, temporary contract workers.
Martin O’Neill: Have there been efforts to try to get more members among people who work in the Mondragon corporation in overseas location? Is that an ambition that you have? Is that something that Mondragon would like to do, or is the focus very much on just encouraging kind of full cooperative membership only in the home region?
Ander Etxeberria: We have 140 subsidiaries, and they’re not cooperatives in some countries, because in some countries there is no an appropriate cooperative law. In other countries there’s a cooperative law. If you are going to work with us, we meet with the potential members and we explain them that if they are members, they are going to work not only for somebody on a machine, but some hours per month they are going to take part in debates, they are going to read reports. Some reports are not easy, but we are going to train them. They are going to take decisions. Some of the decisions are not popular. And to start being a member, they are going to put money, initial capital. And they say, “Sorry? I have to put money to start working with you as a member? I have to not only work in this machine, but take decisions? No thank you.” So we don’t see cooperative culture in many locations.
This is by one hand. By the other hand, our cooperatives were created by people. We are a group of people, who come together to create products or provide services. How can we spread the cooperative culture and organisation to our subsidiaries in other places? This is something that we think about, but we have no answer yet. For that, we need imagination, because the answer and the solution will come. For the moment the criterion in Mondragon is, if we have subsidiaries, the situation of the workers in these subsidiaries must be better than in that region in terms of salary, in terms of training, and in terms of information transparency. This is what we are doing now, and we are thinking about what else can we do.
Martin O’Neill: For those reading this who wouldn’t maybe know much about the detailed structure of the cooperatives, could you just say a few words about the social councils and the role that they play? I suppose in some ways their role is similar to a kind of trade union role, although you do not have regular trade unions within Mondragon cooperatives.
Ander Etxeberria: We have a general assembly, that meets minimum once per year, to take the most important decisions. And in the general assembly we vote for some people to be the managers of the cooperative. This is the governing council. They are representative of the members, and of course they are part of the general assembly. But they are not experts, so they are going to elect a general manager to work full-time for the cooperative. The general manager is then going to elect his/her directors. And we have another body, it’s not about directing, but is about communication. This is the social council. The social council is elected in each department. That means that where I’m working, close to me physically is going to be working a member, a representative of the social council, because the social council is about communication between cooperative members.
Ander Etxeberria: The social council have two meetings per month. One meeting is with the president of the cooperative, the president of the governing council, and the general manager. And at the other meeting, each representative of the social council with his/her department. In this meeting that we call consejillo, in English would be “little social council”, the representative is going to explain to his/her department, his/her team, the situation of the company. And at the end of this meeting, he/she is going to ask his/her colleagues, “What are your problems? Your questions?” He/she takes these questions to the whole social council, and next month in the little social council there are the answers.
Martin O’Neill: One final question given that here you are in the north of England. Do people within Mondragon see their tradition as connected with the Rochdale Pioneers, and the English tradition of cooperativism?
Ander Etxeberria: Yes. But even before Rochdale was Owen. And before Owen, there was Plato. Humanity has always been thinking of a better world!
Martin O’Neill: Ander, thanks ever so much. I think that’s a fine note on which to end!
Some further reading:
Gar Alperovitz and Thomas Hanna, “Mondragon and the System Problem,” Truthout, 1 November 2013.
Matthew Brown and Martin O’Neill, “The Road to Socialism is The A59: the Preston Model,” Renewal, 24 (2), 69-78
Joe Guinan and Martin O’Neill, “The Institutional Turn: Labour’s New Political Economy,” Renewal, 26 (2), 5-16
Mathew Lawrence, Andrew Pendleton, and Sara Mahmoud, Co-operatives Unleashed: On Doubling the Size of the UK’s Co-operative Sector, (New Economics Foundation, 2018)
See also: https://neweconomics.org/2018/07/co-operatives-unleased
Tom Malleson, After Occupy, (Oxford University Press, 2014)
Dylan Riley, “An Anticapitalism That Can Win,” Jacobin, 01 July 2016
Erik Olin Wright, Envisioning Real Utopias, (Verso, 2010)
With many thanks to Joe Guinan, Thomas Hanna, James Hickson, Ted Howard, Sarah McKinley, and Kate Pickett.