Mondragon

Kleins proposal for averting climate

catastrophe
1. Reviving the public
sphere
Big investments designed to
reduce our emissions on a
mass scale (transportation and
housing and energy)

2. Planning
3. Reigning in corporations
4. Relocalizing production
5. Ending the cult of
shopping
6. Taxing the rich

A revolt against
market
fundamentalism. We
need a new
economic
system.

The great false dilemma

The alternative to capitalism

Richard Wolf
American
economist
New School

Mondragon

Mikel Lezamiz
Director
Mondragon

What is Mondragon?
Corporation (but owners are not outside investors)
Federation of worker cooperatives
289 co-ops
77 factories in other countries (including France , Brazil, USA, China)

Employs 83,000 people fulltime; 20,000 part-time

four main areas: finance, industry, retail and knowledge
exports products to 150 countries

Basque Region
Largest company

Spain
4th largest company in employment
7th largest company in sales

Origins of Mondragon
Basque regional independence
Spanish Civil War; Oppression by Franco

Robert Owen
A founder of the co-op movement

Father Don Jose Maria Arizmendiarrieta

Progressive Christianity (social justice)
Rejected industrial capitalism but also communism

A third way (between capitalism and communism)

Maintain private property
Fight for social justice
Prioritize labor over capital (laborism vs. capitalism)

Practical education for social justice

1943
Technical
College

1956
Ulgor:
stoves

Mondragon

Core Co-op Principles

1. Democratic Organization
Management is elected by workers
Workers participate in the management of the company

2. Sovereignty of Labor
Capital is purely instrumental and subordinate
All capital comes from workers themselves

3. Payment Solidarity
CEO of Mondragon earns 6 times the lowest paid worker (6:1)

4. Inter-cooperation
Workers and capital is moved between co-ops when needed

5. Social Transformation
Mission is not to earn money but to create wealth within the society
Entrepreneurial development and job creation

6. Education
10 percent of all profits goes to education and social programs

Management structure

Distribution of profits
10% To the community
Education Fund

45% Co-op Reserve

45% Workers
Cant be withdrawn until retirement
Paid back upon retirement with capital at 6%
interest

Other features
No firing or lay-ofs:
Workers relocated or re-educated

Initial capital (in 2014):

15,000 Euros

Transparency:
All earnings reported to Mondragon headquarters

Size:
There are limits to the size of an efective firm (Mondragon: 500)

Solidarity
No competition between co-ops

Worker-owned vs. Investor-owned

Empirical evidence:
Successful track record of growth and profits
Spain:
26% unemployment; economy shrinking 1.9% / year

But Mondragon is not shedding jobs:

When times are bad, we cut wage costs by deciding it
among ourselves. And, as owners, we forsake dividends.

Theoretical advantages in efficiency:

No conflict between labor and management
No need for supervisors
Workers have additional incentive or motivation

Designated question
Designated Speaker:
Raphael

Question:
In what ways and to what extent do worker
cooperatives overcome the social and environmental
problems that we have seen in other capitalist
corporations, such as Enron, Walmart, Monsanto?
Do you agree with Richard Wolf that worker
cooperatives (not more regulations) are a solution to
the problems of corporate capitalism? Explain.

The sins of Enron

1. Investors burned by other
people handling their money
irresponsibly
2. Employees lost their
pensions through company
mismanagement
3. No checks and balances on
company accounting. Banks
were in on the fraud.
4. California citizens were
ripped of with artificial price
hikes and blackouts.

The sins of Walmart

1. Workers exploited by
management in the
interests of shareholders.
Low pay
Poor benefits
No unions

2. Communities are
destroyed through closing
of local businesses
3. Jobs shipped overseas to
the place of cheapest labor

Not possible with

Mondragon
1. No external investors to be
ripped of.
2. Workers run the factories
themselves and will not rip
themselves of or squander their
pension funds.
3. Companies must be completely
transparent in order to receive
any funding from the bank. Enronstyle fraud is highly unlikely.
4. Employees live in the
communities in which they work
and have an incentive not to harm
it but rather to build it.

A stark contrast

Shift change
(documentary about worker coops in the US)

Based on a very interesting idea

http://shiftchange.org/video-c
lips
/

"Nobody spends
somebody else's money
as carefully as he spends
his own. Nobody uses
somebody else's
resources as carefully as
he uses his own. So if
you want efficiency and
efectiveness, if you want
knowledge to be properly
utilized, you have to do it
through the means of
private property."

Mr. Libertarianism himself