captialism

Yes, There Is an Alternative to Capitalism

Mondragon

We are to believe, with Margaret Thatcher, that an economic system with endlessly repeated cycles, costly bailouts for financiers and now austerity for most people is the best human beings can do[.] Capitalism’s recurring tendencies toward extreme and deepening inequalities of income, wealth, and political and cultural power require resignation and acceptance – because there is no alternative[,]

Right? Wrong.

In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production.

MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits).

As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker’s salary – a rate that has increased 20-fold since 1965.)

If Americans knew these two facts alone: that top incomes are tied to bottom incomes and that workers can hire and fire directors, it would make their heads spin. How is this possible without running the company into the ground? But Mondragon is living proof that it is.

[At 85,000 member strong, MC is the] largest corporation in the Basque region, [and] also one of Spain’s top ten biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2010). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise.

I wonder how many Americans know about Mondragon and how they operate. I would venture to say next to none. I didn’t. But now that I know, I will be doing some research on it and maybe even taking a trip to Spain to see for myself what they have to offer.

It does, however, give new meaning to the mainstream news stories I’ve heard over the years about Basque separatists…

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