Page 14 RAIN May/June 1984 Dragons of Democracy (in Spain?): Lessons from Mondragon Co-ops The movementfor worker-owned and -controlled business dates back at least to the principles set down by English weavers in the 1840s. Despite some 140 years of trying out various designs of cooperative enterprise, we have few working models in the U.S. that show how an integrated cooperative economy might work. The best model, perhaps, has been developing in the Basque region of northern Spain for 28 years. Scott An- droes, a RAIN intern in summer 1981 and an economics graduateof Harvard, sketches below the socio-economic innovations of these co-ops.—KN by Scott Androes In Spain there is a region where much of the economy is run by cooperatives. One of these (employing nearly 4.000 workers) builds household appliances that are sold in all parts of Spain. It is the largest manufacturer of consumer durables in Spain. A large foundry and a large electronics firm, also cooperatives, provide parts to the appliance maker. Cooperative schools—with over 30.000 students—are governed democratically by a combination of staff, parents, and students. There are 14 housing cooperatives with 1,200 apartments. There is one large consumer cooperative with over 40 branches that is operated jointly and, of course, democratically, by its employees and the consumers. To coordinate all these cooperatives, a central cooperative bank—besides being the nerve center of the cooperative movement—functions as an ordinary consumer savings bank. It has more than half a million customers at 120 branches and is the 26th largest bank in Spain. It uses its huge assets, rich experience, and central position in the local economy to act as a sort of democratic venture-capital firm by financing and coaching the development of new cooperative companies. So far it has had 83 successful cooperatives and one failure. The cooperatives look to the bank for business and organizational guidance—and for money. Collectively, these cooperatives are known as the Mondragon co-ops. They are named after the town of Mondragon, in Guizpacoa, where the first cooperative was founded in 1956 and where the headquarters of the movement resides today. As businesses, they are an impressive example of coordinated development, utiliz- • ing multiple interlinkages to create the optimum environment for shared growth. As cooperatives, with a proven commitment to local, democratic control, they are an inspiration to advocates of a democratic society around the world. In the last five years, they have caught the attention of American progressives. In that time, news of the Mondragon model has spread like a brush fire through American colleges and universities and wherever else social activists gather to try to chart the avenues of change. Many good essays and magazine articles and an occasional book have resulted from the considerable attention paid to the cooperatives. There is little need to add to the thorough studies already available (see access). Most of those studies assume there are valuable lessons to be learned from the Mondragon experience. That assumption has withstood close study of the federation. Admittedly, the Mondragon cooperatives are not perfect. They don't involve shop-floor workers as much as may be possible. They are just beginning to consider
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