Skip to main content

1941, Office of the Archbishop of Spain:

"They just released you?" Archbishop Balbino Oliver eyed the priest standing before his desk with suspicion. Something about the young man unsettled him.

"I believe it was in error. They did not realize I had written so much against Franco. When God spared my life, I enrolled in the seminary."

He possessed humility. Good. Yet something about the eyes... "Even under the care of the church, Franco may not let you go so easily."

"Yes, it is best if I left Spain. I could continue my writing in Belgium. I think I can..."

"God granted you a precious gift, my son." The Bishop leaned back, considering. His left eye. That was it. "It would be unwise to waste the gift with further agitation of forces beyond your control." Yes, his left eye stared back slightly wider, giving him a permanently quizzical expression. Father Bertolli had mentioned him losing his eye in an accident.

 "But the work I've been doing..."

"Is against Church official policy." The Archbishop leaned forward to study the documents the priest had presented him. "You are Basque, no?"

"Yes, but in Belgium..."

"Father Tillous requested an assistant in Mondragon, only 50 miles from where you grew up. Franco is unlikely to bother you, there."

"Out there, he is unlikely to need to." The young man bowed his head curtly, murmuring the obligatory goodbye.

The bishop's gaze followed his receding figure. Even with his back turned, the young man disturbed him. Perhaps something other than his eye then...

Balbino had no way to know, he had just set Don Jose on course to change the world.

History of Mondragon

    Don Jose (1941-1955)

*1943: One coop, 24 workers/owners

"Knowledge must be socialized so that power can be democratized."

Basque is nestled high in the Pyrenees Mountains of Northern Spain. The native population has lived there with its unique culture for all of recorded history. During most of that time, the tiny nation has been occupied.

The Basque Church broke with the Catholic Church during the Spanish Civil War (1936-39), openly opposing Franco in support of the democratically elected, socialist government. The Republicans promised Basque its independence under an amicable split from Spain. After centuries of outside rule, they eagerly threw their support behind the Republicans. Franco struggled to defeat the motivated Basques in their remote mountain location. After he won, he singled them out for deprivation and repression. He banned the Basque language and culture. Their leadership was forced to flee or face the firing squad.

The activist Jesuit priest, Don Jose Maria Arizmendiarrieta (Don Jose), had had his own brush with Franco. After his writings landed him in jail, a clerical error released him, saving him from certain death. He immediately joined the priesthood and returned to Basque, their prodigal son.

He arrived in Mondragon to discover his homeland desperate for social justice and economic security. Centuries of oppression robbed them of any positive vision for their future. Unemployment was high and worker's unions banned. His countrymen were poor, undereducated and underfed.

Don Jose taught in the apprentice school of Union Carrajera, the main employer of the town. The school only admitted the children of their employees plus 10-12 other students per year--15% of the youth in Mondragon. The other 85% had nothing. Don Jose offered to raise funds in order to expand enrollment. The company firmly refused.

"The socialization of education, the access to it by everyone in the community without discrimination, the granting of opportunities to all persons are fundamental postulates of all social movements of our times. The proclamation of human rights that are not matched by economic and educational guarantees are ephemeral concessions just for show and are destined to produce poor results...These people must be concerned with education, because only slavery Will be found if they follow the path of illiteracy and ignorance instead."

Don Jose saw his responsibilities to the area not just to uplift the spiritual realm of the people, but to also improve their earthly lot by helping their social and community development--a view that made him a pariah with Church hierarchy. To cure economic poverty, he knew he needed to combat "poverty of intellect" or control of knowledge. The winners of revolutions always commandeered education. These privileged few, eventually reenslaving the masses. Control of knowledge kept the powerful in power and the poor in poverty:  The engineer's son would always become an engineer, while the son of a laborer always became a laborer. Don Jose wanted to avoid this pitfall in Mondragon. He felt only universal education could help workers avoid becoming a tool of the larger machine and safeguard Mondragon from future tyranny.

"Knowledge is power and in order to democratize power, one must socialize knowledge beforehand. We accomplish nothing, with the proclamation of rights, if afterwards the people whose rights we have proclaimed are incapable of administering those rights or if, to be able to act, these people have no recourse but to count on only a few indispensible members in the group."

Instead of placing a new school under the control of the Catholic Church, Don Jose traveled around the town presenting a proposal for a school run by democratic control. He was a remarkably bad lecturer--people fell asleep during his sermons. Instead, he met them on the streets, in bars and restaurants. His strength lay in his convictions and his dogged persistence. He placed ballot boxes on street corners. Six hundred respondents pledged cash or other support for his proposed school.

In 1943, he opened a community owned and run school. Not only did he provide training in technical skills, but he also developed a base of young people capable of freethinking. Don Jose made community service part of the curriculum. He wove ethics and social consciousness into his lessons, questioning the conventional labor and social practices. After hours, he educated the adults. Upon graduation, students had 11 years experiencing cooperative ideals. This created a base of workers able to engage in the democratic control of the work place and capable of combating worker subordination. They became the foundation of his cooperative movement.

Five of the graduates from the school's engineering program went to work in the main conventional business of the area, Union Cerrajera, only to discover management wanted no part of these new ideas. By 1955, the five graduates left Union Cerrajera. Under the tutelage of Don Jose, they traveled the countryside collecting donations from their impoverished neighbors.

They had no business plan. In fact, they did not even know what their new business would produce. Yet, on the strength of people's trust in Don Jose alone, they were able to raise $361,604 ($2 million in 1990 US dollars) and buy a simple paraffin stove manufacturing business.  They named their new enterprise Ulgor, an acronym based on the initials of their last names. When butane arrived in Spain, they were first to convert and led the butane wave in Spain, setting the standard for Mondragon to be a trendsetter in Spain for the rest of its history.

    Expansion (1956-69)

*1958:  149 members

Don Jose started with one co-op of 12 workers under the fascist dictator, Franco. Instead of getting lost in the areas significant disadvantages, he concentrated on Mondragon's few inherent strengths. They pocessed a tradition of co-operative farming practices and relatively equitable land distribution. A long history of state oppression forced them to become a self-reliant and cohesive people. They had natural resources, including iron ore, coal for steel, and metalwork skills.

Don Jose took advantage of programs the Spanish government already had in place. The government gave coops a great deal of support in the early days, providing 12.5%-20% start-up capital at a low fixed interest rate. Coops paid no corporate tax for the first ten years and half the standard rate after that. Spain's protectionist import policy after the war further protected the budding cooperatives. They had room to grow and develop without serious competition from powerful and sophisticated foreign companies. They also took advantage of the destruction form the Civil War and WWII, producing goods for growing disposable incomes in the years after the wars.

After the initial seed money gathered from the town as donations, Mondragon's workers self-capitalized their business, making them worker/owners. In 1959, they created their own bank, Caja Laboral Popular.

In 1969 Spain declared coop members self-employed and thus ineligible for state health care and unemployment benefits. Mondragon created its own system of health care, Lagun Aro. They provided health care service at a lower rate than the state was able to provide. They eventually expanded to provide pensions and life insurance.

    Programmed Development (1970-84)

*1974: 45 coops with 17,000 members. Strike at Ulgor.

*1975: Francisco Franco dies.

*1982:  Basque finally wins local autonomy. Mondragon has 20,000 worker/owners, 85 industrial coops, 6 agricultural coops, 2 service coops, 43 cooperative schools, 14 housing coops, 40 stores for its consumer coop, a bank with 120 branches, a research institute, a polytech college, a social security and health care coop.

*1980-83: Spanish Recession

Mondragon expanded at break-neck speed through the 70's. As they grew, they reorganized into regional subgroups that strategized together. The "Contract of Association" linked the new coops together into a network. A strict policy prohibited direct competition among them. They bought and sold to each other whenever possible. True to its socially conscious roots, the fledgling organization made a commitment to refrain from making weapons, useless luxury goods, or pollute the environment.

In the 1980's, a severe recession hit Spain. Unemployment hovered around 20%. To weather the storm, Mondragon spent all accumulated profits on wages. They pulled in their investments, investing more cautiously, and attempting to diversify their business model. Wages dropped by 15% throughout the cooperative. Hours were cut without effecting pay, with the guarantee that unworked hours would be made up later in the year.

When these measures failed, the management and worker/owners met for three days. Finally, the workers agreed to hold a lottery, and 20% of the workforce was laid off with 80% pay. Some of these workers transferred to other coops within Mondragon. Some were retrained or retired early. At the end of the year, workers still out of work came back at full pay and another set was laid off.

During the decade long crisis, Basque lost 150,000 jobs but Mondragon created 4,200 jobs (an increase of 36%). During that time, only 104 (0.6%) ended up briefly unemployed with 80% of their salary.

"Teaching should be ongoing in order to be effective. Tools and machines need to be continuously renewed but above all there has to be a renewal in the mentality of human beings because they are destined to be the masters or these tools."

While 80% of traditional start up businesses fail, Mondragon's success rate for new ventures has been 80-90% from the beginning. One of the reasons is its internal capital fund (see Organization in Part II). But Saiolan also deserves some of the credit. In 1981, Mondragon founded an incubator for new products offering budding entrepreneurs coaching, technical resources, funding and help with business plans. In all, 285 entrepreneurs have been helped to create their own company under the Mondragon system.

Mondragon also created an R&D center (Ikerlan) to incubate and refine new ideas before implementing them. The R&D center works closely with the business school. Ikerlan research is commonly given as coursework to one of the classes, creating student incentive by letting students know their homework will create new enterprises. Ikerlan played a key role in keeping Mondragon on Spain's cutting edge and creating well-researched successful ventures. Mondragon manufactured Spain's first computer chips. They lead Spain's industry in wind, solar, and hydrogen power as well as communications, health industry, and food.

This is not to say it has always been all harps and roses at Mondragon. In 1974, their oldest and biggest cooperative, Ulgor, went on strike.

Ulgor bought a refrigeration manufacturing business, adding it to their stove manufacturing and increasing workers to 3,500. The new workers were given little ideological training in cooperativism. In Mondragon, wages were set by a formula taking into account the difficulty of the job, personal performance, experience level, and interpersonal skills. The management at the failing Fagor refrigeration plant exceeded the salaries of the successful Ulgor plant, while labor at Ulgor made more than Fagor's workers.

Ulgor grew large so fast, communication between management and labor was compromised. Management unilaterally convened a committee to reassess the difficulty of various jobs. They filled the committee from their own ranks and, not surprisingly, the committee adjusted engineering and management wages up while dropping relations and assembly jobs down. Wages dropped for 22% of the jobs and supervisors were given power to grant merit points that increased some worker's wages. This was widely seen as an attempt to value mental work over physical--something Don Jose was against.

Workers argued monotony should be part of the formula for wages. They wanted some control over supervisors to counter the merit credit system. When the Governing Council refused to hear the request from workers, 700 of them left the factory. The strike only lasted one day, but 24 leaders of the strike, two thirds of them women, were "fired".

Only the General Assembly could actually fire a worker. Since the General Assembly would not meet for four months, the workers were provisionally "fired". Management had four months to give "informational chats" before the General Assembly met. The bars became an ideological battlefield in those months, creating a deep rift in Mondragon society that is still felt today.

When the General Assembly met, it upheld the firings. The fired workers were not readmitted to their jobs until 1978, when the workers launched a general campaign on their behalf.

    Adaptation to Market Forces (1985-90)

*1986: Spain opens its economy to Europe.

*1987:  Mondragon does $1.6 billion in business, 19% for export out of Spain

*1989: Spain opens its economy to the World. Basque adopts Mondragon-style business as the official economic policy of the fledgling nation.

*1990: Mondragon has 21,241 members, more than 100 coops, $2.6 billion in assets, schools with 6,500 students

Globalization hit Mondragon hard. We have all witnessed local companies collapse when faced by giants like Wal-mart. In response to this threat, Mondragon centralized their leadership, to make it as nimble as other multi-nationals. They expanded their reach--first across Spain and then around the globe.

To avoid import tariffs, Mondragon purchased subsidiaries in China, Mexico and Brazil creating an influx of nonmember, international workers. They took advantage of NAFTA to import their home appliances into the US. To date, the coop has not offered full membership to all of its workers. (Some of these countries have laws prohibiting cooperative organizations.)

In recent years, Mondragon has restricted membership. They argue that members are guaranteed a lifetime job, so over expansion of membership in uncertain times puts current members at too much financial risk. Additionally, to insure new members are suited to cooperative work and responsibilities they have initiated a one year probationary period. Many workers do not have the maturity or far-sighted vision to work in the cooperative setting.

    Centralization (1991-present)

*1996:  Mondragon is the 15th largest business in Spain with 86 production coops, 44 educational institutions, 7 agricultural coops, 15 building coops, 66,000 members

*1997:  Mondragon does $5 billion in sales, has financial assets of $7.5 billion. It is the leading producer of domestic appliances and machine tools in Spain, third largest supplier of automotive components in Europe. Mondragon University is founded.

*1999: External nonvoting capital is allowed into MCC equity and now comprises 13% of equity.

*2003:  Mondragon has 75,000 members, 160 coops (135 industrial, 6 financial, 14 distribution). Spain's seventh largest business. Mondragon teaches multi-lingual classes and has 4,000 students. Their college has four university level programs: engineering, business, humanities-enterprise, and teaching. Their consumer coop, Eroski, is Spain's third largest grocer.


*2007: Mondragon has 100,000 worker/owners and another 30,000 employees, $24 billion in generated revenues. One quarter of the products scheduled to be made by the company in 2012 are not yet in production. The Bank has 389 branches over all of Spain. Their educational system has 45,000 students. Eroski successfully keeps Wal-mart at bay by out competing them!

In 1991, Mondragon reorganized again into Mondragon Cooperative Corporation (MCC) with three major business arms: Financial, Industrial, and Retail/Distribution with divisions under each branch. Each division has its own bank but they are organized under the Central Inter-cooperative Fund (FCI) which is financed by 10% of profits of member coops.

"Such co-ops outstrip all types of capitalist firms in productivity not in spite of being democratic, but to the extent that they are."Levine and Tyson

Mondragon did well in the financial crisis of the 1980's because it was structured to share the wealth and the burden. This has allowed it to weather the most recent economic instability as well.

With its relaxed, welcoming workplace atmosphere, including childcare and European style coffee bars in the break room, you might think Mondragon would not be able to compete with multi-nationals in the age of globalization. You'd be wrong. It has equaled or out preformed conventionally owned rivals in both productivity and per capita profit since its inception. The Mondragon model is required reading for both Harvard business school and Stanford law students for that reason.


Mondragon has survived the onslaught of multinationals and the push for globalization, but at some cost. Many of the original social values of Mondragon have been displaced for the sake of market efficiency. They are more centralized and hierarchical. They hired non-member workers, and increased the pay differential between workers and management. This led to a gap in power and increased dissatisfaction for the workers. Just-in-time inventorying, work-movement monitors, and swing shifts were introduced. These sorts of changes left the workers feeling their responsibility and stress had increased, while self-determination declined.

Mondragon has been a local force in the Basque nation. The town of Mondragon, with its population of 23,000, is nestled in unspoiled countryside with smooth roads and no billboards. The area is solidly middle class without the extremes of mansions or shanties. The Basques enjoy a strong sense of community that is friendly and trusting.

Mondragon, however, is big enough to be an economic force, particularly in light of today's collapsing markets and they have yet to step into that role.

In 2009, the General Assembly voted to open membership to non-Basques within Spain. One of the many criticisms leveled at Mondragon is their use of non-member workers. Nine percent of employees are not members. Most work in Eroski, the largest supermarket chain in Spain and most are women.

Next time, I detail how Mondragon's unique organization created their success.

Originally posted to T. P. Alexanders on Sun Jul 31, 2011 at 03:00 PM PDT.

Also republished by Global Expats and Anti-Capitalist Meetup.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  rec up this diary: get it on the front page! (11+ / 0-)

    This is what a truly progressive economy looks like.

    Nothing is as powerful as a working example.

    We can do this if we have the will.  

  •  Anti-capitalist meet-up diary schedule (4+ / 0-)
    Recommended by:
    slatsg, Justina, G2geek, Lisa Lockwood

    7th august: geomoo part II
    14th august: T'Pau, mondragon part II
    21st August: JustJennifer, Omar Barghouti and the BDS movment
    28th August: open
    4th September: open
    11th September: geminijen part II on co-ops; Latin America
    18th September: open
    25th September: open

    Here are the upcoming diaries for the anti-capitalist meet-up. As you can see we have some openings. If you would like to submit a diary for the meet-up or have an idea for a diary, please write to us at the group email: dkanticapitalististgroup@gmail.com or write to ny brit expat or justina here or send a message to the group.

    We are still trying to compile our group email list; it really does help us to stay in contact with people better and facilitates input and communication. If you do not want to use your personal email (and we do understand why you would not want to do so), consider creating an email on gmail that we could use to contact you. Again, please send us an email at the group email address above. Thank you!

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jul 31, 2011 at 03:17:15 PM PDT

  •  T'Pau, I just wanted to begin by telling you how (8+ / 0-)

    wonderfully the diary has been written (I honestly felt like I was watching the initial scene) and how informative it is. This is simply an excellent diary and I wanted to thank you for all your hard work. I'll add more comments later, but I just wanted to share my initial thoughts and gratitude.

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jul 31, 2011 at 03:19:50 PM PDT

  •  They succeeded under Franco's fascism. (9+ / 0-)

    What's our excuse?

    Hint: there is no excuse.

    •  There are cooperatives in the US, there is a (7+ / 0-)

      network, but as of yet they have not made the in-roads and have the history that exists in other countries. I am wondering if that is due to a skepticism in the US or the fact that they are up against such a strongly developed capitalist system so that they are unable to compete except at the smaller, more local levels?  

      We can support them by being members in consumer coops, we can support the formation of workers and producer coops and we should be using credit unions as opposed to big banks. There are many ways to try and develop this; obvious examples are in worker purchased failing businesses. There are problems in developing networks for producers of intermediate goods to find goods producers. A lot of us are really interested in the development of cooperatives in the states.

      I am wondering if the low level of capitalist economic development in Spain was what enabled this to grow and also the fact that the Basque region was so far away from the centre of power in Spain under Franco helped. He also probably thought he was using them to develop the region rather than the opposite. What an amazing thing to survive and grow in Fascist Spain.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 31, 2011 at 03:43:09 PM PDT

      [ Parent ]

      •  That is the million dollar question... (4+ / 0-)

        Why has it worked elsewhere but not in the US.  Until I did this diary, I thought of coops as single, local entities, usually grocery stores or other food related goods.  Most were not well run and had trouble competing.  I think all of what you said is true, but I also think they networked themselves.  That did become a two edged sword. It made them stronger, but it also hampered communication and centralized control.  It created bureaucracy for them.

        De air is de air. What can be done?

        by TPau on Sun Jul 31, 2011 at 03:49:03 PM PDT

        [ Parent ]

        •  there has been success in other countries (3+ / 0-)
          Recommended by:
          TPau, shantysue, G2geek

          in Europe, but those are more along the line of consumer cooperatives; but there are producer cooperatives in Italy.  I am wondering if the level of economic development was important, the fact that there was space to develop this niche or perhaps the long history of support and sympathy for this model. Definitely the million dollar question; there has been success in Latin America which others are going to write about, perhaps we can come to an understanding through people's posts and analyses. I really think that this may be the way to create a transitional type of change moving towards a post-capitalist system.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 31, 2011 at 04:04:28 PM PDT

          [ Parent ]

          •  It is the intermediate goods producers that are (3+ / 0-)
            Recommended by:
            shantysue, G2geek, TPau

            hard to crack, there is no way that we can compete with capitalists; the only thing that I can think of is to ensure that they have a network of final goods producers to sell to that can use their products. Agricultural goods can certainly be produced cooperatively; but what is needed is to be able to sell to producers of final products ... thinking of cotton for example, final goods production of clothing, linens can be done cooperatively ... it is the full production cycle including production of machinery that needs to be cracked.

            "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

            by NY brit expat on Sun Jul 31, 2011 at 05:25:53 PM PDT

            [ Parent ]

            •  Yes, and that is where Mondragon is problematic (4+ / 0-)

              But we have only just begun to study and explore this. As I study, more comes together for me from the most unlikely places. I am constantly led to the same place. No matter if I'm studying science, math, indigenous ways, etc., the same piece keeps coming to me. I feel this particular group is a powerful source of change. Thank you acc and acm: a really focused and incredibly valuable group of heightened people here. I am so grateful to all of you.

            •  That is the model Wal-mart used... (3+ / 0-)
              Recommended by:
              Justina, NY brit expat, G2geek

              Dominate the market in on vertical area.  Coops could do the same thing.

              De air is de air. What can be done?

              by TPau on Sun Jul 31, 2011 at 05:44:08 PM PDT

              [ Parent ]

              •  exactly, I am thinking of a vertically (4+ / 0-)
                Recommended by:
                TPau, shantysue, G2geek, Lisa Lockwood

                integrated model; actually horizontal would also be useful ... but vertical done in a cooperative framework could crack some of the problems that have been encountered historically; this is my economist background ... I tend to think of the system as a circular process and how to create an alternative to the capitalist system by understanding things in that type of way. :)

                "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                by NY brit expat on Sun Jul 31, 2011 at 06:19:04 PM PDT

                [ Parent ]

                •  You said the word that keeps coming to me (0+ / 0-)

                  The circle - I keep finding it everywhere. There is something to this that needs to be explored. I'm even currently using it as my avatar.

                  What do you mean by a vertical/horizontal model?

                  •  if we think about the way that (2+ / 0-)
                    Recommended by:
                    shantysue, Lisa Lockwood

                    production takes place within all economies:

                    to produce a final product, we need to have inputs into production; these include labour, raw materials, machinery. so for example to produce a t-shirt, we need to have produced cotton (agriculture), that needs to be processed (carding, spinning, weaving, dyeing), this requires the use of machinery (already produced) and labour, then the prepared cotton needs to be cut, sewn into shirts (using labour and machinery and tools) which are final commodities. These then need to be distributed (transported) to be sold.

                    When I am talking about vertical production, it means looking at the industry from agricultural production up to final sale. Horizontal production could be referring to the production of other goods requiring the same inputs and also production of same goods of varying qualities using different materials. It could also refer to concurrent stages of production.

                    What we need is production of machinery and refined inputs done in a cooperative context. Agricultural production and production of final products are already being done cooperatively; it is the middle stages of intermediate good and machine good production.

                    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                    by NY brit expat on Mon Aug 01, 2011 at 05:46:08 AM PDT

                    [ Parent ]

                    •  Gotcha-I was looking from a different perspective (0+ / 0-)

                      I was thinking within the three aspects of the Mondragon model itself: the work itself, education and getting it going/keeping it flowing (the word finance comes to mind, but that's not quite it).

                      I understand the linear aspect of what you meant now: the element of the work itself--how certain elements are purchased (if need be) produced and supplied. Gotcha.

                      •  Actually... (0+ / 0-)

                        ...finance is the word I would use to describe the third leg of the Mondragon system.  The fact that the cooperative relies upon its own bank/credit union for internal financing is an important aspect of Mondragon's success, IMO.  Banks are usually at the heart of the Japanese keiretsu system as well.

                        Muslims and tigers and bears, oh my!

                        by JDsg on Mon Aug 08, 2011 at 04:47:44 AM PDT

                        [ Parent ]

                        •  Question on Far Eastern business forms (0+ / 0-)

                          What are the differences between the keiretsu of post-war Japan, the zaibatsu of Imperial Japan, and the chaebol of South Korea?

                          •  There is very little difference... (0+ / 0-)

                            ...between keiretsu and zaibatsu.  Both are or were circles of businesses, almost always with inter-locking shares of ownership between the different corporations, and centered around one main corporation. These central businesses are normally banks although, with the mergers of several Japanese banks in the 90s, the older "strict" model of keiretsu are not as commonplace as they used to be.

                            Zaibatsu and chaebol both share(d) the feature of being primarily family-owned business conglomerates, as opposed to the keiretsu which are more corporate-owned conglomerates.

                            Muslims and tigers and bears, oh my!

                            by JDsg on Mon Aug 08, 2011 at 07:43:32 AM PDT

                            [ Parent ]

        •  Hi TPau - great diary - wasn't able to get to (4+ / 0-)

          computer to read earlier! I wrote my major comment re getting the initial capital in my response to ExPat above (i didn't know myself until I read it heare that 10-15% of the intial capital came from the Spanish government and how liberal (even under Franco) the Spanish government was in terms of coop laws -- but then most of Europe (even including Germany under Hitler) had quite liberal and positive support systems for cooperatives (one of the contradictions between political and economic relations in a particular period of history).

          I think by selecting the parts of the istory that you have chosen to highlight you really captured the the changing dynamics of Mondrago -- why it has grown and is still  more successful than almost any other form of social/economic sytem) and how it is being compromised under capitalism.

          I would point out, while I agree that the centralizing of the structure led to bureaucracy, loss of democratic control and inequality, that the underlying cause of the increasing changes to a more and more traditional capitalist model (though still heads and shoulders above other models), was more from the systemic issues of ecnomic competition (the way they started tradtional wage work, hiring noncoop members to avoid tariffs, etc.)rather than the idea of networking, itself.  without the pressures from capitalist competition and financial crisies, I  I don't think the networking, itself, had to be its downfall.  networking can be horizontal and remain much more decentralized.

          •  I agree, that is one thing we should keep... (1+ / 0-)
            Recommended by:
            shantysue

            in mind when we are building our own systems. We need to learn from their success AND their mistakes.

            De air is de air. What can be done?

            by TPau on Mon Aug 01, 2011 at 09:33:45 AM PDT

            [ Parent ]

          •  I also read that there's a certain amt of apathy (0+ / 0-)

            within the groups, especially with the youth. They are working on that.

            All good points Geminijen.

            It is concerning also that the Mondragon coop bank (forgot the name of it) lost a lot of its banking power, although I don't know the exact percentage. I've read anywhere from 20% to 50%.

            •  Banking Power??? (0+ / 0-)

              De air is de air. What can be done?

              by TPau on Mon Aug 01, 2011 at 12:20:13 PM PDT

              [ Parent ]

              •  Ya, from what I see (0+ / 0-)

                But I'll leave it to you to interpret.

                This link shows they were downgraded:

                http://saladeprensa.cajalaboral.es/...

                and

                Key developments for Caja Laboral Popular Sociedad Cooperativa de Credito
                Caja Laboral Popular Sociedad Cooperativa de Credito expected to report Fiscal Year 2011 results on February 18, 2012. This event was calculated by Capital IQ (Created on June 16, 2011).
                06/16/2011

                Caja Laboral Popular Sociedad Cooperativa de Credito expected to report Fiscal Year 2011 results on February 18, 2012. This event was calculated by Capital IQ (Created on June 16, 2011).
                Caja Laboral Announces Earnings Results for the Year 2010
                01/19/2011

                Caja Laboral announced earnings results for the year 2010. The company saw an 8.9% annual fall in its net profit for 2010 to EUR 51.4 million. The result was affected by the provisions set aside under the bank's management plan. Net interest income slumped by 19.5% on the year to EUR 257.5 million, while gross income came in at EUR 376.9 million, down 15.9%.

                Caja Laboral Reports Earnings Results for the First Half 2010
                07/30/2010

                Caja Laboral reported earnings results for the first half 2010. The bank booked an annual fall of 41.8% in its after-tax profit for the first half of 2010 to EUR 35.1 million. The bank closed the first six months of the year with provisions worth a total EUR 64.7 million.

                http://investing.businessweek.com/...

                and this is their 2010 Consolidated Annual Report:

                https://www.cajalaboral.com/clweb/pdf/sobre_nosotros/informes/2010/en/2010Consolidated_annual_accounts.pdf

                I'm noticing the above link isn't working, so I guess you can find the main website and then click to the appropriate place to read the 2010 annual reports.

      •  Sorry I was out of town and no computer yesterday. (3+ / 0-)
        Recommended by:
        NY brit expat, TPau, shantysue

        Will respond to TPau separately.  This diary is amazing.
        Re your questions, susan.  Their are an increasing number of worker-owned and managed enterprises in the U.S., but Cooperative law in the U.S is much more restrictive . and U.S. government tends to provide more dfinancial support to the ESOP coop model where management is not necessarily run by workers and the total amount of the support is less. Actually, as TPau pointed out, the Spanish government even under Franco had laws wish allowed Mondragon to get quite a bit of their initial capital, which was critical to their development and subsequent success from the Spanish government I didn't know that!). Also, as you point out, the Basque country formed a distinctly separated society from the rest of Spain -- culturally (own language), economically
        (a depressed area in the mountains). This isolated situation both allowed, as you suggest Expat, the growth and strength of the coops to be ignored --also, the cohesiveness and trust within the Basque community, allowed it to get a good part of the initial capital from the Basque community itself.

        •  thanks geminijen, that explains a lot (0+ / 0-)

          much appreciated. I knew that you would have the information as you had been looking at this recently. :)

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Aug 01, 2011 at 05:47:37 AM PDT

          [ Parent ]

    •  No, I think we have an excuse (5+ / 0-)
      Recommended by:
      NY brit expat, G2geek, TPau, Justina, Geminijen

      We simply didn't know better. We have to forgive ourselves for our errors and move ahead - forward on.  Financial collapse is upon us now and we have nothing to fear. I realized not long ago that I feared going into nature. I've been so crippled by convenience that I forgot how freeing earth is. I now welcome it and building from there. It actually excites me. The call of the wild, so to speak. They who are bringing inevitable collapse should be afraid of the new world they will create. It will be grand. I am convinced.

  •  This is the model for progressives to follow (8+ / 0-)

    Since it looks increasingly like national politics will not produce any real change in a progressive direction, no matter which party gets elected, we need to start working for change outside the political process.

    We can do this by creating corporations explicitly chartered to operate according to progressive values. Since corporatism is emerging victorious as the new model for socioeconomic organization, we must embrace this reality and learn to beat the corporations with conservative values by creating alternative corporations that reflect our values. And the marketplace will decide which vision of life and society will prevail.

    Eric Stetson -- Author, Speaker, Visionary. www.ericstetson.com

    by Eric Stetson on Sun Jul 31, 2011 at 03:24:39 PM PDT

    •  There is a difference between a cooperative (4+ / 0-)
      Recommended by:
      TPau, Justina, shantysue, Geminijen

      and a corporation; fundamentally, these differences relate to ownership of the means of production, decision-making processes, the fact that any surplus earned does not have to be shared as profits to those not doing the work and is either distributed back to workers or invested in the business. Without the constraints imposed by the demands of profitability and capitalist concepts of efficiency and competition, we can ensure that the situation for workers and members of the cooperative (in the case of consumer coops or credit unions) fulfill the needs of the workers and community rather than the needs of constant growth and profitability of capitalism.

      Progressive corporations do not exist; that is an illusion. Certainly some corps can be run or are run in less exploitative ways than normal corporations, but they need to be able to survive in the system. Coops are both inside and outside of the system, they may have to deal with some of the problems engendered by the system but are able to set up a different structure. If we pushed a cooperative framework, I am certain others would agree; but the last thing I want to push is a so-called progressive capitalism.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 31, 2011 at 03:35:27 PM PDT

      [ Parent ]

      •  I agree that "progressive capitalism" is a farce.. (5+ / 0-)

        created to make corporations look good, I like Eric's comment.  He has a bit of the Coyote "Trickster" Spirit. Take the advantages given to the system you don't like and turn them to your advantage. I like that. I think Don Jose would be proud of that thinking.

        De air is de air. What can be done?

        by TPau on Sun Jul 31, 2011 at 03:43:27 PM PDT

        [ Parent ]

      •  What type of incorporated entity is a coop (1+ / 0-)
        Recommended by:
        G2geek

        under U.S. or state law? Does it have to be incorporated as a non-profit, or is there a type of for-profit corporation status that it could incorporate as?

        Your statement that "progressive corporations do not exist" is incorrect, because all non-profits are, by definition, corporations, and plenty of non-profits are very progressive.

        But I'm still wondering if there is a way to do a coop type of corporation without it having to be incorporated as a 501(c)(3) and operate within the limitations of such status. Hopefully so. Does anybody know?

        Eric Stetson -- Author, Speaker, Visionary. www.ericstetson.com

        by Eric Stetson on Sun Jul 31, 2011 at 03:47:03 PM PDT

        [ Parent ]

        •  How about this corporate structure? (0+ / 0-)

          A progressive nonprofit owning a majority of the stock in a for-profit corporation, and therefore exercising all control over such matters as choosing the board of directors and setting policy for the for-profit company?

          Would that work?

          Eric Stetson -- Author, Speaker, Visionary. www.ericstetson.com

          by Eric Stetson on Sun Jul 31, 2011 at 03:48:47 PM PDT

          [ Parent ]

        •  There is a large cooperative network (5+ / 0-)

          and many cooperatives in the US. Here is a list of cooperatives in the world:

          http://en.wikipedia.org/...

          cooperative networks:

          http://www.cooperativenetwork.coop/...

          workers cooperatives in the US:

          http://cultivate.coop/wiki/Cooperative_Alliances,_Fe
          derations,_and_Networks

          Here is the cooperative development fund that can help you with the information for setting up a coop in the US; they may have info, but I think to get cooperative status you may need to operate under 501(c) (3), but writing to them will certainly offer more information than I can give you:

          http://en.wikipedia.org/...

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 31, 2011 at 03:59:43 PM PDT

          [ Parent ]

        •  In the U.S., A Cooperative a Corporation, But.... (5+ / 0-)

          its rules for ownership and control of the company can be quite different than other corps.  Each state has its own rules, but most are similar and it is very easy to file Articles of Incorporation to be legally recognized. The benefit of doing this is that it limits the liability of individual members to the amount of their ownership share.

          The By-laws which may be required set forth the manner in which the cooperative will be owned and operated and how the profits will be shared.

          Here in Venezuela, there is a standard form which sets forth the basic legal requirements for its formation,ownership and operation.  There are strong rules requiring broad democratic control and setting forth several mandatory offices for internal auditing of actions and for self-education of the membership.

          Here's some information from Wisconsin law put out by the University of Wisconsins'Center for Cooperatives:

          An excerpt:

          A. Legal Status of Cooperatives

          1. Incorporation
          To conduct its business effectively, a cooperative must exist as a legal entity separate from its members.  Incorporation is necessary to achieve such status.

          Like other corporations, cooperatives obtain significant advantages from incorporation.  The primary one is limited liability.  Under incorporation, the personal liability of the individual owner/ members for the co-op’s losses are limited to the amount of equity each member has invested in the co-op.

          All states have statutes pertaining specifically to cooperatives (in Wisconsin, cooperatives are governed by Chapter 185).  The documents necessary to incorporate a co-op are the articles of incorporation and the bylaws (see below for instructions on preparing these documents).  Filing the articles of incorporation creates the co-op as a legal entity; while the bylaws provide the co-op with guidelines for conducting business.  It is advisable to obtain legal counsel to review the articles of incorporation and bylaws.

          Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

          by Justina on Sun Jul 31, 2011 at 04:17:55 PM PDT

          [ Parent ]

        •  I know. I know it in so much detail... (6+ / 0-)

          ..... that you'd freak out if you had any idea.

          I've studied this stuff for literally three decades, developed models that were considered the best of their type, built test cases, and seen most of them fail.

          In the end I concluded that I wasn't going to waste my time and exploit myself mercilessly doing this stuff any more UNTIL there was a group of people who were sufficiently motivated that it would be worth the effort.

          I'll do the exercise again under a few conditions:

          We take it outside dKos to a private forum of some kind that has restricted membership, and a tight nondisclosure agreement as to the names and identities of the members.

          That forum will not be Google or Facebook, both of which are surveillance machines.  Someone other than me will handle the administrative stuff to get it up and running.  It will have to be cross-platform so people can get on with nothing more than their existing browser and email software.

          Then if you want to learn how to replicate Mondragon in the US, I'll be willing to teach what I know.   This is not idle speculation, and I guarantee it will be worth your while if you're serious.  

          SO: who's in?

          •  I want to be part of this - it's all I care about (2+ / 0-)
            Recommended by:
            G2geek, Lisa Lockwood

            And there's so little time left.

            I will do everything I can do make this type of change.

            •  Ditto. Little hope left working (1+ / 0-)
              Recommended by:
              TPau

              within the system as it is here and now. It is stacked utterly against us. Being able to work toward something positive with like minded comrades would be empowering and uplifting. I'd like to help in some capacity.


              "When the powerless are shut out of the media, we will make the media irrelevant" ~Anonymous~

              by Lisa Lockwood on Mon Aug 01, 2011 at 12:22:20 PM PDT

              [ Parent ]

          •  Don't Mean To Denigrate Legalism But... (5+ / 0-)

            as a former lawyer I highly respect your specialized expertise in a complicated area, but I think that worrying about replicating Mondragon's legal structure now is putting the cart before the horse.  After all it is a 7 billion dollar a year transnational now.  Better we emulate its original formation.

            The fundamental units of any cooperative are the human beings who join together to form it.  As I"m sure you are aware, getting folks to come together to work cooperatively is not an easy job.  Just getting people to come out to meetings can be extremely time-consuming and frustrating.

            I know this intimately.  I was one of the founders of a cooperative here in Venezuela.  In the process, I discovered some of the obstacles one faces.  Here, beside the formidable difficulty of getting people to come to meetings, a major obstacle was that while the law recognizing cooperatives here is superb (cooperatives are recognized in the 1999 Constitution, and by law given start-up grants and low cost loans, the incredible delays caused by the government bureaucracies forced members to take other jobs.

            (The problem is that long before  Chavez and his great laws came into effect, the Venezuelan bureaucracy was created.  (By the Spanish in the 1500's).  The 14 and 15th century bureaucracy has survived and entrenched its practices and procedures despite all the laws passed since then, but they still control a lot of what goes on.  But that is a subject for another diary.)

            Suffice it to say, we need to start simply and locally with small groups of human beings.Once we have committed individuals, we can create simple legal forms which meet the needs of small cooperatives.  Then, as the cooperatives succeed, they can decide whether they want to expand and how they want to expand, and amend the legal paperwork accordingly.

            The initial (and continuing) challenge is organizing people, not drafting documents.

            Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

            by Justina on Sun Jul 31, 2011 at 06:27:38 PM PDT

            [ Parent ]

            •  We have a lot to learn from you (0+ / 0-)

              I'll go read your diaries now and any other information you would like to point me to (i.e., links, websites).

            •  I'm not a lawyer. (2+ / 0-)
              Recommended by:
              Lisa Lockwood, NY brit expat

              (I'm a telecoms engineer.)  

              A number of things are needed.

              Having the right legal structure is essential.

              So is having the right people, with strong personal discipline (martial arts, meditation, music practice, are all good examples), and the right attitudes (insert long list here beginning with nondogmatic and unselfish).

              So is having the right product & service mix.

              So is having adequate startup capital.

              So is having a ferocious work ethic.

              So is being educated in the history of cooperative enterprise and strong employee ownership.

              All of it is essential.  

            •  Absolutely true. It has to start with the members (4+ / 0-)

              ala Nora Casntaneda, "Creating a Caring Ecnomomy and the women's Development Bank in Venezuela."  Venezula has a particularly bad and corrupt economy from the past.  I think the new laws about community councils that can work directly with the Bolivarian national government, by passing the corrupt (bribes) local majors and governments is part of the solution. But boy is the private conservative sector (and of course the mayors and governors) fighting the creation and dvelopment of that system.

          •  I would be interested in at least the discussion.. (3+ / 0-)

            Being a writer is in an exciting time right now and a few other writers and I have had discussions about buying our own printing equipment and vertically integrating our craft up to the level of selling it. I'm not sure if a Mondragon style coop would work.

            De air is de air. What can be done?

            by TPau on Sun Jul 31, 2011 at 07:06:28 PM PDT

            [ Parent ]

          •  Sorry for butting in, but what do you think of (2+ / 0-)
            Recommended by:
            NY brit expat, TPau

            WordPress for private blogging? I believe you can run a private blog there that you can set permissions to only allow users you invite to be able to view/participate in your blog.
            From a commenter about WordPress:

            Wordpress is considered very high-end software in the blog world.  I run it myself, but rather than going through wordpress.com, I have the wordpress software set up on my own hosting account.  This allows a somewhat higher degree of control, and I use a plugin called "Private Entries" that allows me to mask certain blog posts from anyone who isn't logged in, but the blog itself is public.

            I know a mutual friend used/uses blogger.com, setting it to 'private' and then inviting people to view it 'anonymously' by advising them to set up throw away user accounts/email addys that are 'sandboxed', or used for nothing else but that blog. However, you have to go through Google to use blogger.com.... and we all know how Google is re privacy ;-(


            "When the powerless are shut out of the media, we will make the media irrelevant" ~Anonymous~

            by Lisa Lockwood on Mon Aug 01, 2011 at 03:55:28 AM PDT

            [ Parent ]

          •  Definintely want to do this, but not sure why (2+ / 0-)
            Recommended by:
            NY brit expat, shantysue

            all the restrictive rules except lmited memberhship by invitation.  Also, there is a new, very open website of a bunch of people who are in the EASTERN CONFERENCE for WROKPLACE DEMOCRACY (ECWD) who have been running worker-managed coops for years. It is very pragmatic, with very pragmatic info. there is also a space of more informational articles, but they just started the website and there were any of those on it yet. the site is Cultivatecoops.com

      •  Actually, MCC now is a corporation -- see that's (1+ / 0-)
        Recommended by:
        shantysue

        part of the problem when you start a progressive form
        in the structure of the old! It gets eroded.  but I agree this is still the way to go, where historical conditions and our will make it possible and Mondragon is stil lhead and shoulders above the rest.

    •  Changing our language is key (5+ / 0-)

      Cooperativism is the opposite of capitalism. Workers own the work they do and thus have choice in what is done. It is a grand idea whose time has come. Thank goodness for Don Jose. One person can change the world. That is for sure.

    •  Agree -- we may have to figure out how we get (1+ / 0-)
      Recommended by:
      shantysue

      the more restricted aspects of the law and financial options for support in some countries.

  •  Well done (6+ / 0-)

    I did not know of this quote before:

    "Knowledge must be socialized so that power can be democratized."

    That has a nice ring to it.

  •  Wonderful diary (5+ / 0-)

    Inspiring.

    Thank you. I am looking forward to the next installments.

    Thanks also to the folks who coordinate the A-C Meet up.

    A proud member of the Professional Left since 1967.

    by slatsg on Sun Jul 31, 2011 at 03:31:29 PM PDT

  •  Fantastically Informative Diary, Thanks so Much TP (5+ / 0-)

    This article presents lots of potential topics for discussion, and I'm sure they will come up in the comments. It's a great read and I am really looking forward to your next posts on Mondragon.

    Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

    by Justina on Sun Jul 31, 2011 at 03:37:36 PM PDT

  •  Necessities and talents: (5+ / 0-)

    Mondragon had two simple products to start with:

    Product #1 was the solid fuel cook stove.

    Product #2 was a sewing machine based on Singer patents.

    Both of these were household necessities in the region at the time.  Both could be produced relatively easily in local shops.

    A bit of history: The Basque people had long ago established the industrial capacity to produce steel that was legendary throughout Europe, and was highly valued for the making of swords.  Making steel is one part high technology, one part artistry: adding just the right combination of materials to molten iron, using just the right combination of heat and timing and other factors, judging the quality of the steel in its molten state before it is poured into molds and cooled for use.

    The lesson is:  Look for the necessities, and use the skills and talents you have.

    The necessities and talents today, won't necessarily look like those of yesterday.  

    There are new "necessities" waiting to be discovered.  Some of these are merely "wants" rather than "needs," but a "want" accompanied by a strong enough emotional pull, becomes a "need."  Think of "smart phones," Google, Facebook, video games.  The video game industry's revenues far exceed those of the film industry.  

    The key results to be obtained are the same: jobs for worker/owners, and profits for reinvestment into additional new enterprises.  

    Your mission, should you choose to accept it:  Find the next Facebook, the next Google, the next "smart phone," the next video game, or the next new business model for delivering existing products & services in a manner sufficiently compelling as to take off in an analogous manner.

    Find a way to leverage existing talents to meet those needs and those "needs."  Find a way to market it.

    And then reinvest, and reinvest, and reinvest some more.

    Once this gets going, there is no stopping it.

    •  Good practical history. But didn't the (2+ / 0-)
      Recommended by:
      TPau, shantysue

      refrigeration company (which was somewhat more an economy of scale) give them them the first bigger coop to provide capital and help keep the other burgeoning coops afloat until they grew sufficently to maintain a fair supply of capital (I hate to harp on this capital is so important to success -- and yes, I know there are arguments about just how much "scale" a coop can or should have).

    •  And if that "need" could be a green (2+ / 0-)
      Recommended by:
      TPau, Geminijen

      product, manufactured in an environmentally responsible way, even better. Small super efficient and portable/adjustable backyard windmills generating household power, or lighter, affordable and more efficient solar panels for the average homeowner's standard weight-bearing rooftop, etc. etc. And then, convincing business owners to put solar panels on top of every (now wasted space) rooftop in Phoenix??? lol...
      I dunno. I guess the sky's the limit if someone gets a brilliant idea ;-)
      Anyways, I'm late to the conversation but very interested.


      "When the powerless are shut out of the media, we will make the media irrelevant" ~Anonymous~

      by Lisa Lockwood on Mon Aug 01, 2011 at 12:32:18 PM PDT

      [ Parent ]

      •  Inrteresting idea that presents an interesting (1+ / 0-)
        Recommended by:
        Lisa Lockwood

        problem.  One coop in Baltimore, got some stimulus funds to help develop their coop.  They have a set product and considered 1)developing  a product along the lines of what they knew how to do only with more tech savy or 2)start a very different path with a totally new and different product (in this case a type of solar panel project).  Since the stimulus money supports green projects, it is not surprising that they chose the solar panel project -- however, it was not at all clear if, without the incentive of the stimulus $, they would have chosen the solar panels.  So that can be viewed as "good" in that it creates more green jobs -- but it can also be viewed as "bad" if it pressured the group to do a project that they may not be as equipped to do or market as well (new market), because that's where the funds were. In other words, did the funding take away the choice of the workers democratic decision making. Remember, it is the coop members who have to make it work and their livelihoods depend on the success.

  •  Social Security (4+ / 0-)
    Recommended by:
    TPau, shantysue, G2geek, Lisa Lockwood

    Thank you, TPau.  Nice going -- well written, very appealing.  A great way to get started building "social security" in another way, much more personally and locally controlled.  Eliminate all the middle men, aye?

    Was rather fascinated today when one of the diarists mentioned a Social Security Party being formed since Dems and Repubs all seem to belong to the Wall Street Party.  I just thought that phrase had a nice ring to it.

    Perhaps this is a phrase that describes the need for a social contract, a social safety net that is free from associations with labels people fear from the past.  And it relates to a current and very real threat to the social security of everyone who does not have wealth in the financial markets backing up their retirement security.

    Maybe the "anti-capitalists" could become the "pro-social security co-op"!

    Find your own voice--the personal is political.

    by In her own Voice on Sun Jul 31, 2011 at 04:19:13 PM PDT

    •  Our Soc Security is a Form of Community Cooperatio (6+ / 0-)

      n.  We all pay in and we all get pay-outs depending on what we have paid in.

      Many, if not most, of our local credit unions are organized on the cooperative model.  The members own them and vote on the managers/directors.  Many pay out dividends to their member-owners.

      So, you can easily join a cooperative by joining your local credit union.  In the 1930's and 40's, there were a lot of farmer cooperatives and market cooperatives. Some still exist, so there is a real American tradition of cooperativism.  We need to revive that and expand it to many different kinds of services.  

      We could organize small cooperatives in our immediate neighborhoods for collective purchasing of food, household necessities, transportation, WiFi and technical services, even medical and dental services.  If we start small and local, we could meet the specific needs of our community with the possibility of later expanding to larger area groups.

      Knock on the doors of 5 or 6 neighbors, find out what their needs are and what skills they could contribute and share, and the ideas and energy will flow from that.  A group of 9 or 10 people working together could make major changes in community and political life.

      Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

      by Justina on Sun Jul 31, 2011 at 04:35:53 PM PDT

      [ Parent ]

    •  oooo...I do like the sound of that... (6+ / 0-)

      I have infinite arguments with my "progressive" democrat friends about how the Dems aren't ever going to help them. Unfortunately, both parties have stacked the deck against any other parties.  Independents and other parties can not get on debates and they don't get air time in the news.

      There are dozens of parties out there including the Greens, Socialists, Democratic Socialists, and Working Families. None of them are getting very far.  Adding another probably won't help.  

      We need to find ways to do end runs around the Federal Government--like miliary democracy: Setting up a large number of voter initiatives to run in all states at one time.  Things like taking away corporation's rights to personhood or universal healthcare could be achieved in this fashion. Perhaps helping coops become the dominant business form could also be done this way.

      De air is de air. What can be done?

      by TPau on Sun Jul 31, 2011 at 04:40:58 PM PDT

      [ Parent ]

      •  Someone already set up a successful model: (1+ / 0-)
        Recommended by:
        Geminijen

        The evangelical religious right. They started over  a decade ago, first with bible study meetings in peoples living rooms, discussing what was "wrong" with society/non-religious issues from their warped biblical perspective. Almost serendipitously, many resolved to change things at a local level specifically because they vehemently disagreed with public schools not allowing public prayers. Then came the running for school board offices. And local city counsel spots. County education board positions. And then state party spots. Fast forward to today, and you can see how very successful a committed group has been in their industrious (some might call it diabolical ;-) efforts to transform this into a "Christian" nation. Gah.

        But, the point is, there's a method there that actually works. And, if you think about it, it really only took one decade of determined networking, marketing, campaigning, etc.
         Not a result I like, but I'm willing to be taught by my "enemies" ;-)


        "When the powerless are shut out of the media, we will make the media irrelevant" ~Anonymous~

        by Lisa Lockwood on Mon Aug 01, 2011 at 12:42:42 PM PDT

        [ Parent ]

  •  Excellent diary TPau (7+ / 0-)

    I'm looking forward to your following diaries as well.

    Quite the opposite of the evil eye, eh?!

    I think focusing on cooperativism is the most important area to focus on during these "changing" times. When the fall comes, we must have things in place so that the way through this evolves in a kind and gentle way: a progressive way, a natural way, with wisdom as our guide.

    I will be studying this thesis and concentrating my energy on this subject.

    I hope people pose a lot of questions, so that the answers can be researched.

    Thank you TPau.

    •  I think you won't be disappointed, particularly... (7+ / 0-)

      with part 3.

      De air is de air. What can be done?

      by TPau on Sun Jul 31, 2011 at 05:09:32 PM PDT

      [ Parent ]

      •  I won't be disappointed (6+ / 0-)

        I know your writing and some of your ideas. I am so excited about this, I have chills. My only wish before I die is to leave the opportunity for a better world to those who come after. I look forward to the word capitalism going the way of the dinosaur once we get this movement going more strongly, whether it is in the underdeveloped countries or in the U.S. or elsewhere. Leaving a body of work behind is an awesome thing to do. Don Jose! Don Jose! Don Jose!

        Thanks again TPau. This is a magnificent piece. The Mondragon Manifesto for all is my motto!

      •  Did I miss something? have we had Pt2 yet? (2+ / 0-)
        Recommended by:
        shantysue, Lisa Lockwood
        •  no part II is the second week of August, she (2+ / 0-)
          Recommended by:
          shantysue, Lisa Lockwood

          is just getting information out about the future diaries on the subject. :)

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Aug 01, 2011 at 05:55:15 AM PDT

          [ Parent ]

        •  No, TPau has it in three parts - this was #1 (1+ / 0-)
          Recommended by:
          TPau

          I think you both have a three part series, if I remember correctly. I love it.

          Maybe someone needs to start a new group here called Mondragon or Cooperativism or something. Not sure if that's necessary, but it's good to have all relevant info in one place. Last night I spent a lot of time here looking up past dkosers who have spoken well on the subject. Plus there are so many sites out there on the subject. I had no idea until last night that my information was limited on just how far this has come now.

          Two areas in particular struck me: home healthcare and solar. I have a business design set up as a worker coop. It is service oriented, but I see a real need to help the elderly and have also thought of venturing into that area and adding education, as the model is set up, to the mix.

  •  Just Re-Published This Diary to "Global Expats". (5+ / 0-)

    I would really like to see this great diary republished widely.  It is important to fire the imaginations of suffering Americans with ideas about how they can respond to this miserable political-economic crisis our capitalist over-lords have bestowed on us.

    If its OK with TPau, I'd like to republish this on Democratic Underground as well.  There are a lot of very angry Democrats over there.  We are all in this together.

    Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

    by Justina on Sun Jul 31, 2011 at 05:57:25 PM PDT

  •  A few thoughts. (0+ / 0-)

    First, sorry for coming to this discussion so late.  However, I thought I'd add a few comments.

    First and foremost, while the ideology toward creating a cooperative form of business is important, what's most important is the fact that you're creating a business.  And like any other form of business, it has to be able to survive using traditional business principles.  Even non-profits are ultimately businesses run through traditional business principles, even if they don't intend to make a profit.  Thus, any cooperative that's started must have a viable product or service for sale, and a business plan must be written up to indicate how that business will work.

    Cooperatives, then, are really about corporate governance, how the organization will be run.  Which is why, as others have noted here, the human resource element to the organization has to be done very carefully.  You are bringing in other people into the organization whom you will be working with very closely, not only as fellow employees, but as fellow partners.  You all have to be on the same page, not only philosophically toward the goals of the organization, but in how the business is going to be managed with respect to both the micro and macros levels.  You may not see eye-to-eye with your fellow partners.

    I'm not terribly familiar with laws regarding cooperatives (as opposed to, say, corporations, which I'm more familiar with); however, with regard to the structure of the corporation, I don't see why the cooperative itself can't be structured around a C-corporation.  What is a cooperative other than a closely-held private corporation; the only difference being that the shareholders are the employees?  The real question that I think has not been asked nor answered is, what do you do when someone wants to leave the cooperative to work elsewhere?  From what I understand about Mondragon, one share costs each worker/partner several thousand dollars.  Joe Blow wants to leave the cooperative and take his investment and profits with him. How is this paid back, especially if the cooperative is short of the necessary cash to pay him back immediately?

    Ultimately, I would say, remember that this is a business first and needs to be treated as such.  Many of you seem to be focusing upon the corporate governance issue, which is fine, but that's really a very minor issue compared with the business itself.  Companies are difficult enough to start-up and continue without worrying about the minor details that entail corporate governance.

    Muslims and tigers and bears, oh my!

    by JDsg on Mon Aug 08, 2011 at 07:30:07 AM PDT

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site