An American Mondragón?

In late August, my colleague Tom Prugh blogged about a non-capitalist, worker-owned corporation—the Mondragón Corporación Cooperativa (MCC) in Spain’s Basque region. For Americans who are skeptical about European ideas of how to run the economy in a more socially-conscious manner, it may be all too easy to dismiss MCC as yet another crazy idea that will never take root in American soil.

But on October 27, the United Steelworkers (USW)—North America’s largest industrial union—and Mondragón Internacional, S.A. signed an agreement to collaborate in establishing Mondragón-style manufacturing cooperatives in the United States and Canada. These cooperatives are to be governed by MCC’s model of “one worker, one vote.”

MCC has its own—highly regarded—university. Photo credit: Mahaiburuak

MCC has its own—highly regarded—university. Photo credit: Mahaiburuak

MCC is a federation of democratically-run enterprises that produce and sell a range of goods and services (including appliances and machinery needed to produce solar panels). Set up in 1956 in the Basque town of Mondragón, it relies on democratic methods in its organizational structure and is concerned with generating assets for the benefit of its members and their communities, rather than for shareholders. Today, MCC is the seventh largest company in Spain. It has about 100,000 cooperative members in about 250 cooperative enterprises that operate in more than forty countries. (It should be noted that MCC has acquired some companies that are run in conventional capitalist style, although the idea is to convert them to cooperatives in due time. An MCC enterprise in Poland, Fagor Mastercook, has been embroiled in controversy over low wages and anti-union tactics.)

The loss of nearly 6 million U.S. manufacturing jobs over the past decade and the stagnation of real wages across the economy during the last three decades are throwing more and more families and communities into a tailspin. Signing the agreement, USW President Leo Gerard commented: “Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities.”

It remains to be seen how well the USW-MCC agreement can be translated into a new U.S. economic model. Even before this agreement was struck, some promising new worker co-op initiatives motivated by the Mondragón experience were started, including the Evergreen Cooperative Laundry and a solar installation service and an industrial-size hydroponics greenhouse, all located in Cleveland, Ohio. If the USW-MCC connection takes off, such initiatives may well multiply—not just in the service sector, but also in manufacturing.

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