- ‘The story of Mondragón is the most impressive refutation of the widely held belief that worker cooperatives have little capacity for economic growth and long-term survival.’ (3)
- ‘All such associations of producers that start as alternatives to the capitalist system either fail or cease to be democracies of producers….In the relatively few instances in which such enterprises have not succumbed as business concerns, they have ceased to be democracies of producers, managing their own work, and have become, in effect, associations of capitalists…making profit for themselves by the employment at wages of workers outside their associations.’ Coates and Topham (3)
- ‘To outsiders, the first contact with the Basque country may be puzzling, for although all but a few old-timers speak Spanish like the natives they are, and economically and politically the Basques are part of Spain, they are culturally distinct from other Spaniards.’ (9)
- ‘Following the reinstitution of democracy after Franco, the provinces of Alava, Guipúzcoa, and Vizcaya joined to form the semi-autonomous regional government.’ (9)
- ‘General statements about the Basques’ views on the dignity of labor and equality need some qualification. Working with one’s hands in industry or commerce is not looked down on in the Basque country as it is in some other regions of Spain
- ‘The Franco government sought to exercise direct control over all Spanish organizations of any political or economic importance, expect the Catholic Church.’ (13)
- ‘The cooperatives movement in the Basque country developed in intimate association with the labor movement, political parties, and the Catholic Church.’ (18)
- ‘Under Franco the Catholic Church was the only organization of importance that maintained any freedom of action and that might have stimulated and guided the formation and growth of cooperatives. But the Church had no experience in creating worker cooperatives. Although it might have been anticipated that priests would continue to work to advance the cooperative movement, there was no basis for predicting that a priest would be the founder and guiding spirit of an industrial complex based primarily on the principles of the cooperative movement.’ (21)
- ‘It was generally assumed in Mondragón in that era that the son of a worker would be a worker himself – if he could get a job. Education provided no channel of social mobility. The public schools provided no training in industrial or craft skills. The Unión Cerrajera supported a training program, but enrollment was limited to sons of company employees. Higher education was out of the question. No son of a Mondragón worker had ever gone to a university. José María Arizmendiarrieta took up his pastoral duties in Mondragón in 1941 during what was known as “the hunger period.” Working-class people were desperately poor and oppressed by unemployment, rundown and overcrowded housing, and an outbreak of tuberculosis. People speak of the spirit of hopelessness. They saw themselves as a conquered people, living under a regime that offered neither political freedom nor economic opportunity.’ (26)
- ‘The eldest son of a respected farm family of modest means, José María and his younger sister and two brothers grew up speaking Euskera at home.’ (27)
- ‘Arizmendi returned to Vitoria
- ‘Arizmendi was shaping his own social gospel, in marked contrast to the traditional preoccupations of most of his fellow priests, who were concerned with individual salvation.’ (29)
- ‘He stressed that work should not be seen as a punishment but as a means of self-realization. There should be dignity in any work. He spoke of the need for cooperation and collective solidarity. He combined a social vision with an emphasis on education for technical knowledge and skills.’ (29)
- ‘This manifestation of democracy startled government officials, who were bound to be concerned about the prospects of free elections for any purpose. Some regarded Arizmendi as a demagogue and troublemaker. His supervising priest stood by him but advised Arizmendi to tone down his talks and be more cautious about engaging in unorthodox activities. On the other hand, some of the most militant Basque nationalists considered him a collaborationist with government because he took pains to ensure that all his activities were within legally prescribed limits. About six hundred residents, approximately 15 percent of the adult population, responded with pledges of support. Many small- and medium-sized enterprises joined, but the Unión Cerrajera and the local government declined to participate. The school opened in 1943 with a class of twenty students. As a branch of Accíon Católica, the parents’ association had no legal standing, and the school was not eligible for national educational subsidies. The next project was to formalize and legalize the educational organization the sponsors had created. At the time, most forms of organization were prohibited, but Arizmendi searched the statute books until he found a nineteenth-century law that made it possible to charter the parents’ association under a new name, the League for Education and Culture.’ (30)
- ‘Serving as a teacher as well as a preacher, Don José María infused the institution-building process with the social vision that would guide the Mondragón movement.’ (31)
- ‘The five pioneers were guided by a social vision, but they were also responding to concerns about their own careers based on an assessment of current economic conditions. They knew that sons of workers would never rise above minor managerial positions in the Unión Cerrahera. They also concluded that, because Spain
- ‘They built on a record of successful community organizing and their great personal prestige as the first university-educated children of blue-collar workers.’ (34)
- ‘The first break came toward the end of 1955 when the rive men learned that a private firm inVitoria
- ‘The first break came toward the end of 1955 when the rive men learned that a private firm in
- Organizational diagram (36)
- ‘The [Bank] began its legal existence with two divisions: savings and social security. Because members of worker cooperatives were not considered employees under Spanish law, the national social security system did not cover them. The cooperatives therefore had to establish a program to provide for the health and retirement needs of their members. Payroll deductions supplied most of the funds for what became Lagun-Aro.’ (52)
- ‘In 1983 the national social security system required each private firm to pay [$2,800] per worker per year. Lagun-Aro was providing superior coverage for only [$1,600]. According to Gorroñogoitia, many private firms do not pay for this coverage, and the government has not dared to intervene in cases where forcing payment could push a firm a firm into bankruptcy. Nonetheless, the cooperatives have a substantial cost advantage over private firms that do pay their social security taxes.’ (53)
- ‘Previously the League of Education and Culture had been helping students earn money for their education by arranging part-time jobs in the form of “contracts and apprenticeship” with private firms. Alecop brought this form of earning and learning through working into the cooperative complex itself. From its creation in 1966, Alecop has had two shifts each working day. Students work four hours a day in the plant and attend classes for another four hours, which means that the school must maintain two equivalent instructional programs.’ (54)
- ‘In 1984 Alecop provided employment, earnings for tuition and living expenses, and experience in work and in the cooperative processes of governance to more than 450 student members.’ (54)
- ‘Among the cultural activities sponsored by Eroski [grocer] are vacation trips and vacation housing rentals, which are available to members at moderate prices. Eroski also conducts an extensive public consumer education program.’ (56)
- ‘As the population of the city of Mondragón nearly tripled between 1940 and 1970, the leaders of the movement became concerned about providing adequate housing for workers and their families in a town surrounded by hills and mountains. This problem led to the formation of cooperative housing projects and the concomitant creation and expansion of construction cooperatives. In 1982, five construction cooperatives employed 1,511 members, and by 1984, the complex had created seventeen housing cooperatives.’ (56)
- ‘The founders of the Mondragón complex devised a set of principles designed to balance growth with organizational autonomy. To expand employment and at the same time limit the growth of existing organizations, they established a policy that whenever any line of production reached the point where its manufacturing and marketing were so efficient that it could become an independent organization, it was to be separated from its original firm.’ (58)
- ‘The leaders were applying a policy that on a national scale is called import substitution’ (59)
- ‘From the beginning, the Caja had been a development bank. According to its constitution, it was dedicated to creating jobs in cooperative enterprises.’ (72)
- ‘In 1965 Auzo-Lagun was registered as a cooperative. Formed to give part-time work to married women, the new firm began on a small scale. It provided food service to one cooperative factory and opened a small restaurant in Mondragón. The food service expanded as contracts were secured with other cooperatives and with some private firms.’ (76)
- ‘In the same period, the leaders of Auzo-Lagun were grappling with another problem: the need for child care. Women with children below school age could not work even part time unless they could arrange with relatives or friends to care for their children. Thus a child-care center was established in 1976 to provide professional care for small children during working hours. A small fee was charged for members and a somewhat higher fee for nonmembers.’ (77)
- ‘Auzo-Lagun proved to Mondragón that women could effectively manage a workers’ cooperative. In the twenty years since Auzo-Lagun was created, women have gained substantial influence in staff positions in other cooperatives and cooperative groups, but until recently Auzo-Lagun was the only firm in which women had important line-management positions. By 1987, a woman have been appointed to the second highest line-management position in Mondragón’s largest cooperative group and women were in positions as second-level supervisors and plant superintendents.’ (78)
- ‘From that time [of the 1971 strike] on, internal strikes were defined as attacks on the cooperative itself, and strikers were subject to penalties, including discharge.’ (92)
- ‘It appears that confronting the potential strikers with the penalties awaiting them intensified the conflict. Management was demanding that the dissidents take their problems to the established channel of the social council, whereas the dissidents were arguing that the social council did not really represent the workers. At the time, management was not open to dialogue with the protest leaders regarding the deficiencies they perceived in the social council.’ (102)
- ‘Until the early 1970s, worker participation in the Mondragón cooperative complex was limited to governance: from the general assembly of each cooperative to the election of members of governing councils and social councils. Participation had not been extended to the organizations and management of work, which continued along lines characteristic of private firms.’ (113)
- ‘Why did the process of redesign begin in Copreci? Mongelos explained that although Ulgor was beset with the most serious labor problems, it was nonetheless out of the question as a place to start. Ulgor consisted of long assembly lines, where the large frames of stoves and refrigerators were suspended on steel hooks from overheard chains that moved at a mechanically determined speed. Clearly, no major changes in the organization or work could be introduced until Ulgor was prepared to make the enormous investments necessary to tear out the old assembly lines and build a completely new sociotechnical system. Copreci appeared to have the best prospects for launching the new program.’ (115)
- ‘To determine where the changes should be introduced, the personnel department conducted a job satisfaction survey, which revealed substantial dissatisfaction in two work sections. Reorganization in one of these sections appeared particularly appropriate, since it made a thermostat, the simplest product assembled in Copreci. Workers sat on both sides of a conveyer belt that, at a machine-controlled speed, moved the parts of the components to be assembled at each work station. It would be easy to pull out the assembly line and substitute work tables.’ (115)
- ‘The experiment began with the removal of the 7.5-meter-long conveyer belt and the substitution of a 2.8-meter-long work table. Workers were seated around the table and could now set their own work rhythm and freely exchange information and ideas.’ (116)
- ‘It is possible to increase productivity per hour per person, due to a reduction of idle waiting time. Quality improves in direct relation to the complexity of the apparatus being assembled, due to better information regarding the work. Feedback is the basis for group self management. Changes proceed slowly. It is dangerous to create exaggerated expectations.’ (117)
- ‘When Fred Freundlich of Cornell University
- ‘To visualize the effects of the decision to increase capital contributions, it is important to distinguish between the transfer of cash money and paper transactions. Under the new policy, the cooperatives did not receive any cash money from their members. For three years, ULARCO reduced the cash it paid out on members’ capital accounts. During the same period, it credited members’ capital accounts with the sums that had been withheld from their two extra paychecks. In effect, like the members’ initial capital contribution, the sums that were withheld were treated as if they were loans from members to their cooperatives.’ (146)
- ‘The new policy eliminated as much overtime as possible by adjusting the hours worked per day to seasonal demand. Hours worked could now be increased to ten per day for weeks at a time or reduced to six per day.’ (146)
- ‘We have described these changes in compensation and employment policies in considerable detail to illustrate what is involved in carrying out major shifts in policy. Changes require an extended and complex process of discussion and negotiation within each cooperative and between the cooperatives and management of the group.’ (146)
- ‘The process involved in bringing about this major change required that extended time be devoted to education, discussion, and decision making that that a large number of members be actively involved. If the governing council’s proposal had simply been announced to the members before the membership meeting and a vote called for, it is likely that the proposal would have been rejected.’ (148)
- ‘The cooperative group assumes primary responsibility for finding jobs for surplus members of its constituent cooperatives. When the group is unable to absorb these members, as was often the case during the recession, major responsibility shifts to Lagun-Aro. But this does not mean that the cooperative group has no future responsibilities. According to policies to be described, the individual cooperative and the group of cooperatives share the expenses of the relocation and unemployment-support program.’ (151)
- ‘In 1980, Lagun-Aro established the payroll tax at 0.50 percent so that a fund could be built up to support the costs of unemployment and relocation of members. By 1985, the tax had risen to 2.35 percent. This does not mean, however, that the fund supported the entire costs of relocation and unemployment. Major costs were shared by the cooperatives and Lagun-Aro, as we will see in the following account of policies and procedures.’ (151)
- ‘At the time of our 1975 visit, the emphasis of the Caja’s Entrepreneurial Division was on the problems and processes of creating new firms. By the time of our 1983 visit, the emphasis had shifted to intervention to save threatened cooperatives.’ (169)
- ‘Except for those emergency situations in which a cooperative is flatly unable to pay the interest on its loans, the Caja makes no concessions on the interest rates on outstanding loans until it has approved a five-year business and reorganization plan prepared by the firm with the assistance of the intervenor [sic].’ (171)
- ‘Mondragón’s record from 1956 through 1983 – of 103 cooperatives that were created, only three have had to go out of business – is unparalleled. Furthermore, in all three cases very small numbers of worker-members were involved. So far, intervention in larger firms had been successful.’ (172)
- ‘The founders of the Mondragón movement was dedicated to building industrial worker cooperatives with the infrastructure to support their development and growth.’ (188)
- ‘From the beginning, Lana [farming cooperative] established a policy of distributing income according to market principles. That is, the farmers were paid what they would get for milk or forest products on the market, and the workers in processing and sales were paid according to what their work added to the value of the final product. Lana later signed a contract of association with the Caja Laboral Popular which provided limits and guidelines on what was paid to workers.’ (189)
- ‘In the evolution of the cooperatives, the 1980s have been a crucial period marked by substantial sacrifices and structural readjustments.’ (196)
- ‘The community clinic, established with the support of the cooperatives in Mondragón and earlier operated by Lagun-Aro, was recently taken over by the regional government. Furthermore, the clinic has been adopted by the government as a model for the development of clinics in small cities throughout the region. As the Mondragón complex has become important regionally and nationally, its leaders have become increasingly involved in consultation and negotiations with government officials on issues of development policy.’ (197)
- ‘Recognizing the need to send students to other parts of Spain and abroad for an upper-university-level education, the leaders of Mondragón organized a foundation, Gizabidea, whose incomes supports scholarships and fellowships for advanced study.’ (202)
- ‘The pay scale for Mondragón has been comparable to that in private industry at the unskilled and semiskilled level, but, because of the policies limiting the differential between the bottom and the top, the salaries of executives in Mondragón are substantially lower than those of executives in private industry.’ (203)
- ‘If management resists union pay demands on the grounds that the company cannot afford them, the National Labor Relations Board has ruled that the company must then open its books to the union leaders. In the United States
- ‘Leaders of the cooperative complex have seen that to deal effectively with the increasingly competitive economic environment there must be more internal coordination among the member units. One way this is being achieved is by imposing within the complex the economic discipline that would be imposed by the market if each unit were operating independently. In other words, the Caja and its Entrepreneurial Division and the management of the cooperative groups have taken over some of the responsibilities of the individual cooperatives.’ (207)
- ‘It is important to distinguish between reactive and proactive participation. In reactive participation, workers or their representatives have opportunities to make criticisms and suggestions on management plans, with some prospects of changing the plans. In proactive participation, workers or their representatives are involved in all stages of working out the plans for the reorganization of work or other issues. Workers in Mondragón seem to have far more opportunities for reactive participation than workers or their representatives in most U.S. United States
- ‘Because most of the existing literature on cooperatives has been written by true believers, motivated more by a missionary spirit than by scientific interests, this explanation has some merit.’ (217)
- ‘The employment security provided by Mondragón is another extraordinary strength.’ (219)
- ‘The leaders of Mondragón have been highly successful in building an integrated mini-economy.’ (220)
- ‘We lost the Civil War, and we became an occupied region. In the postwar period, the people of Mondragón suffered severely in the repression. I had known some people of Mondragón, but when I came after the war they all had either died, or were in jail, or in exile.” José María (226)
- ‘One of the main goals commonly shared…was to promote opportunities for practical education without discrimination. That naturally implied sensitizing people to the concept that it is necessary to socialize knowledge in order to democratize power because in fact knowledge is power….It was a process of mobilization, consciousness raising, and training, or theory and practice, of self-government and self-management.’ Ibid (226-227)
- ‘It was not our custom to distribute all the profits, because we were not trying to build a cooperative-[layman’s religious brotherhood] but rather a cooperative firm.’ Ibid (227)
- ‘…Paulo Freire’s book The Pedagogy of the Oppressed in Arizmendi’s library. He had underlined many passages. The founder’s copy of the sayings of Chairman Mao also had a number of underlined passages. Don José María was generally sympathetic to the Marxist critique of capitalism but rejected important aspects of Marxist doctrine….For example, he cited a statement by Lenin written in 1918 to the effect that cooperatives should be preserved and another written in 1923 that, when the proletariat had triumphed, cooperatives would be valid elements of a socialist society.’ (231)
- ‘Don José María had several close friends and admirers among the clergy, but the Catholic Church did not provide institutional support for his work or for the Mondragón cooperative movement.’ (235)
- ‘Although Don José María was highly critical of his church and had few friends among the priesthood in his diocese, he recognized that the Church provided an indispensable shelter from government attacks, and he did not find the Church a barrier to achieving his socioeconomic objectives.’ (236)
- ‘Arizmendi presents an impossible problem for anyone who insists on placing an influential person in the context of traditional political ideologies. As his biographer said: “He was allergic to all isms…including cooperativism. ‘Isms imprison and oppress us, without providing any final answers’ ” (Larrañago 1981, 83). On occasion, he spoke of himself as a socialist, but he has his own definition of socialism, arguing that cooperativism was true socialism not just one way to achieve it. Azurmendi (pages 776-77) comments, however, that he wrote few statements on socialism and that they were very limited in content. The founder wrote of cooperativism as “the third way of development equidistant from individualistic capitalism and soulless collectivism. Its center and axis is the human person in his social context.” ’ (237)
- ‘Taylorism has failed as a philosophy because it has considered man as an instrument to such an extent that it makes him a mere complement to the machine.” José María (238)
- ‘To build cooperativism is not to do the opposite of capitalism, as if this system did not have any useful features, when in reality it has been a very interesting experience in organization and economic activity, and its efficiency cannot be doubted. Cooperativism must surpass it, and for this purpose must assimilate its methods and dynamism within the limitations and with the improvements necessary to support supreme human and personal values.’ Ibid (238)
- ‘Democracy loyally and honestly felt and practiced cannot limit itself to the formalities and administrative expedients of the elective process, but rather must have its impact and be reflected as much in the educational and social fields as in the economic and financial fields through building it into the institutionalization process.’ Ibid (239)
- ‘We are not among those who believe that cooperativism is an exclusive formula that can be applied equally to all types of economic activities. Activities in which the labor content in all of its forms is high fit better into the cooperative formula than those others in which capital plays a preponderant part. There the systems of capitalism or socialism are more appropriate.’ Ibid (247)
- ‘The Mondragón Arizmendi encountered in 1941 was a city depressed in spirit as well as in material resources and opportunities.’ (251)
- ‘We do not deny that Basque culture has influenced the shaping of Mondragón, but we reject claims that it was culturally determined.’ (254)
- ‘The striking economic success of Mondragón has conveyed worldwide the message that a worker cooperative need no longer be considered simply a utopian ideal.’ (266)
- ‘The long-run prospects for a cooperative trying to survive in a sea of private enterprises are very poor. One aid to survival is to group cooperatives so that they can exchange services and share expenses.’ (277)
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