The following is the introduction and conclusion of a far longer article
which will appear in the _New Labor Review_ sometime in 1996. The following
will be published in FREEDOM again sometime in 1996.
------------------------------------------------------------


The Mondragon Co-operative Federation: A model for our times?
by Mike Long

     The Mondragon Co-operative Federation (MCF) is a community of
economically highly successful worker-owned, worker-controlled
production and consumption co-operatives centred around Mondragon, a
town in the Basque region of northern Spain, and now spreading
throughout the Basque provinces and beyond. The MCF is an experiment
in participatory economic democracy rooted in a powerful grassroots
movement for Basque cultural revival and autonomy, but inclusive of non-
Basques .
     The MCF began quietly on a tiny scale with one co-op and 12 workers
nearly 40 years ago under the fascist Franco dictatorship. The original
members were educated but poor and had to borrow money from
sympathetic community members to get started. By 1994, the MCF had
become the fifteenth biggest business group in Spain, comprising some 170
co-ops and over 25,000 worker members and their families, with vast
assets, large financial reserves, and annual sales of around three billion US
dollars.
     Studies have shown that the co-ops have consistently outperformed
surrounding capitalist industry on all the usual measures, and while
unemployment in Spain has hovered around 20% for many years, full
employment has been maintained within the Federation. All this has been
achieved with a level of internal democracy and concern for social justice
undreamt of by most workers struggling under exploitative state systems,
whether capitalist or authoritarian socialist.
     Not surprisingly, international interest in the MCF has grown over the
past 20 years, especially now that so many governments are unable to
provide even for basic human needs food, shelter, education, healthcare, art
and recreation - and are increasingly recognised as uninterested in doing so.
(As anarchists have long pointed out, that is not what governments are for,
after all.) There is a sizeable literature in several languages on Mondragon.
Harvard business students study management within the Mondragon co-
ops. Stanford law students learn about the legal obstacles to setting up
such entities in the USA Enlightened Australian trade unionists consider
whether using union funds to start "mini-Mondragons" for their
unemployed members might be more effective than filling politicians'
pockets in the vain hope of slowing corporate job export to non-union,
low-wage, third world countries. And some anarchists wonder if the MCF
is a test, or even a vindication, of their ideas.
     This article has three aims. The first is to sketch the historical context
for the MCF, including the wide-scale experimentation with worker-
controlled industry and agriculture that took place during the early months
of the Spanish Civil War.
    There are similarities, ignored by many professional MCF observers,
although not by all, between the internal structure and day-to-day
functioning of the CNT/UGT collectives in 1936 and 1937 and the MCF
co-operatives since 1956. This is so despite the undeniable compromises
which today's worker-owners have made (or as most of them see it, have
been forced to make) in order to stay afloat in the hostile capitalist sea in
which they operate, and despite the fact that the debt appears to go
unrecognised by many of the co-operators themselves, few of whom
consider themselves anarchists. The second aim is to provide a brief
overview of the Federation's development, structure and functioning. The
third is to evaluate its significance for anarcho-syndicalists.
      The last is especially problematic, for anarchists differ on economics.
Some believe in collectivism, as envisaged, e.g. by Proudhon, Bakunin or
Malatesta, whereby the means of production belong to the community, and
people collaborate in collectively owned farms, shops and factories, which
trade with one another via a union-run system, and at the individual level
receive goods in exchange for work - from each according to their abilities,
unto each according to their deeds. The prosperity of a collective, of its
union, and of the individual workers within it in principle depends on how
hard they work and how skilled and creative they are, but in practice
sometimes also on how well they trade, on their starting assets and on the
demand for their products or services. The system discourages slackers
and freeloaders, that is, but can have the additional effect of promoting
survival of the strongest and fittest. Others aspire to the more idealistic
"honour system" of anarchist communism, favoured, e.g. by Godwin,
Winstanley, Morris and Kropotkin, whereby money, exchange systems and
the market are abolished, property is publicly owned, and people cooperate
within and across loosely federated groups to receive food, goods and
services without reference to work done or other contributions - from each
according to their abilities, unto each according to their needs. Such a
system is more open to abuse, but it offers protection for non-producers,
such as the weak, the sick, and the unemployed. Still others (like many non-
anarchists) advocate everything from LETS schemes, through local
currencies, to gift economies. As Holmstrom (1993) noted, however, how
best to organise economically in the  new society, and how to get from here
to there:

"is not just a problem for anarchists or Spaniards. It has been  a concern
for the left everywhere, especially where ideas of  workers' control were
taken seriously: how to balance the  interests of self-managing groups of
workers against those of  consumers and of social justice." (Holstrom,
1993, 25)

     A third major option, one which attempts to capture the strengths, but
avoid the perceived (potential) weaknesses of pure collectivism or anarcho-
communism is anarcho-syndicalism as propounded, among many others,
by Rocker, Monatte, Cornelissen, Pouget, Grave, Yvetot, Pelloutier,
Pataud, Flores Magon, Ascaso, Durruti, Mann, Brown and Chomsky.
Anarcho-syndicalists propose a central role for inclusive, egalitarian
industrial unions (as opposed to elitist and divisive trade, or craft unions) as
the central mechanism by which working people can organise towards three
ends: (1) to eradicate wage slavery, whether capitalist or state socialist, (2)
to operate the new stateless society, including its economy, education and
social programs, peaceably and justly, and (3) to protect that society
against threats from traditional enemies, such as racists, fascists,
capitalists,
Stalinists and bureaucrats. The union is not everything, however. Contrary
to the pathetic charicature portrayed by Bookchin (1993 and elsewhere),
both the theory and historical practice of anarcho-syndicalism stress the
interdependence of union and community. Workers and their families are
obviously members of both, after all. Anarcho-syndicalists support
community organisations of all kinds, not just organisation in the
workplace, critically important though that is. These range from workers'
education, literacy and recreation centres, through schools and co-
operatives, sports teams and "mixed local" union halls, to women's centres,
day-care centres and holiday clubs. Through the strength and resources of
its unions and union federations, anarcho-syndicalism provides options for
achieving and protecting anarchist goals (and for masses of working
people, not just small privileged elites) which are unavailable to or from
small, local communities alone - a problem which "social ecologists" like
Bookchin simply ignore.
     Industrial unions are not only the means to an end, for anarcho-
syndicalists, however. They also offer a mechanism for the rational co-
ordination of the production and distribution of goods and services in the
new society on a scale demanded by its modern size and complexity - a
scale that is difficult, perhaps impossible, for either pure anarcho-
communism or collectivism to manage. To illustrate, union and industry-
wide councils can preempt the potential for selfish competition inherent
(although not inevitable of course) in collectivism, with its retention of
assets and property ownership by collective members. They can do this,
for example, by sheltering one collectively owned farm, factory or service
from a more successful one, or by researching planning and funding the
initial implementation of new unionfunded ventures, such as co-operatives,
ensuring that they will be useful, economically viable, and will not duplicate
services offered elsewhere. Their size and strength also allow industrial
unions to guarantee protection for sick, weak or temporarily unproductive
community members, rather than leaving them to depend on what is
essentially the charity of others, as pure collectivism tends to do. Finally, as
evidenced by the historical record, and contrary to Bookchin's
unsupported assertions, anarcho-syndicalism has long been recognised as
relevant to their needs by far more than "just" blue-collar smokestack
operators, appealing instead to workers of all kinds: to sailors, dockers,
miners, lumberjacks, bakers, cobblers, barbers, needleworkers, educators,
postal workers, flight attendants and computer operators, to white-collar
providers of numerous other goods and services, and to collectivism, with
its retention of millions of landless peasants.
     In addition to all these options and variants in anarchist economics,
there are disagreements within the various camps about how to get from
here to there. Anarchists have long argued over whether, as one collectivist,
Proudhon, believed, it is possible to evolve gradually and peacefully
towards one or the other system, or whether, as another collectivist,
Bakunin, asserted, what they aspire to can only be achieved by revolution
and expropriation of the existing means of production, forcibly if
necessary. Not surprisingly, therefore, anarchists' attitudes towards
Mondragon vary, too, ranging from enthusiastic (e.g. Benello, 1986/1992)
to dismissive (e.g. Chomsky, 1994). What follows is based on my reading
of English, and some Spanish, literature on the MCF, coupled with a week-
long visit to Arrasate (the Basque name for Mondragon) in June, 1994, with
fellow Wobbly, Charlene "Charlie" Sato (we visited as individuals, not as
representatives of any organisation). Our stay in Arrasate included an
intensive series of pre-arranged interviews, informal group discussions, and
site visits, as well as enjoyable and equally informative evenings spent
socialising with co-op members over bottles of the MCF's excellent Rioja
wines.
(...................)
main article
(...................)

A model for our times?

     The generalizability of the Mondragon model may be considered in at
least two ways: in terms of its practical viability and its ideological
acceptability. Much has been written about the former, with some debate
about the relative contributions to the MCF's economic success of the
following factors, and various combinations thereof: Basque nationalism;
co-operative values; a strong sense of (Basque or any other) ethnic,
linguistic and cultural identity among the participants; the foresight and
leadership of Father Arizmendiarrieta; the compatibility of MCF values with
Basque traditions, such as co-operative farming practices and the relatively
equitable land distribution among Basque families compared, for instance,
with the hacienda system of southern Spain; the rapid expansion of the
Spanish economy after the Civil War, with a heavy demand for household
goods and other early MCF products; the political and economic history of
Spain, with its strong anarchist and anarcho-
syndicalist traditions and lengthy prior experience with agricultural, fishing,
and industrial production co-ops; Mondragon's strategic location, with easy
access to large ports like Bilbao, and short distances to major export
markets; the scope and diversity of the MCF's high technology products;
the use of crucial second degree co-ops; early establishment of the CLP;
the centrality of the industrial co-ops; the relatively low cost of land for the
agricultural sector; the availability of a highly educated work force with
relevant skills; and the felt need to look to a self-help model, given the
Basque people's long history of state oppression.
     Also widely considered crucial is the MCF co-ops' internal worker-
member economic structure. My own view is that perhaps all, of the above
factors were differentially important at various times in the MCF's history, it
is in their internal structure and functioning that the co-ops' main ingredient
for success lies - and in this domain, too, that they come closest to
anarchist principles and values. I believe that (a) the motivation and
commitment needed to buy or work one's way into a co-op; (b) the initial
extra capitalisation provided by retention of a portion of members' income
in their internal capital accounts; (c) the equality and mutual respect
produced by the one person, one share, one vote, system; and (d) the
stability and freedom from external control guaranteed by the impossibility
of members selling shares to each other or to outsiders, have made for a
system of worker ownership and (with some dilution in the interests of
operational size and efficiency) worker control.(14) The pride and security
this brings the MCF members, the feeling of control over their own lives,
the visible economic success of their efforts, the decent standard of living
they have achieved for themselves and their families, and the positive
impact all this has on the communities to which they return after work each
day, have had a liberating effect on the workers of Mondragon, just as
anarchist theory would predict.
     If this analysis is accurate, or even close to it, variants of the model
adapted for local conditions must be of interest to like-minded individuals
or whole communities elsewhere. In fact, co-ops on something like the
Mondragon model are already operating in several countries, including
Germany and the USA. Many writers have discussed the MCF or similar
projects positively, and several have provided practical information on how
to go about setting up new co-ops.
     Whether worker or union-owned and/or controlled, and no doubt
accompanied by militant union organising in existing workplaces, it is clear
that something like Mondragon-style co-op federations, and federations of
federations, are urgently needed in many countries today. Quite apart from
the human misery and environmental devastation it causes, capitalism
simply does not work even judged by its own execrable standards. The
desperate plight of growing millions of unemployed and never-to-be-
employed workers in the inner city ruins of so many "advanced"
industrialised countries attests to this. So does the poverty, disease and
starvation that is the lot of millions of capitalism's third world victims.
These people are viewed by "their" governments merely as the inevitable
statistical fall-out from multinational corporate "restructuring" and increased
"efficiency". Politicians, states and the capitalist system have nothing to
offer them. Radical industrial unions, like the CNT, the SAC and the IWW
have something. Ultimately, however, their future lies in their own hands,
just as it did the oppressed citizens of the small town of Arrasate some fifty
years ago.


FREEDOM PRESS
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