Thank you for keeping a fire going for the example of Mondragon & other cooperative initiatives. You have been extremely generous with all your thoughtful responses to inquiries and exclamations about what the Mondragon collaborative is or isn’t in term of how it fits or not in certain current political societies. Personally, I sense a deep pragmatic spirit that favors positive outcomes for the people involved in the work, with both capitalistic and socialistic patterns used when and if appropriate based on the collaborative entities’ experiences, needs & vision.
Part of what attacks me to Mondragon is Fr. Arizmendi’s deep faith in the dignity of each individual human being & their specific call to work in their times & circumstances. Somehow he was able to convey to and imbue in his fellow collaborators the same commitment to each other.
There’s something more than a specific methodology or educational program behind all this effort to humanizing work and social life.
Capitalism gives Capital a bad name. There is nothing wrong with Capital – it is a brilliant tool for creating wealth – but has just been expropriated by the greedy.
This is a brilliant article and piece of research. Thanks Elle. I live in Spain now and have seen Mondragon's impact. A really hopeful alternative to the current mess we live in.
I also love your point, in a nod to the libertarians, that if we opted for coops and social enterprises as the main form of business organisation (leaving a small wild sector where the sociopaths etc who currently run our world could eat each other in unfettered uber capitalism), then government could be much smaller – it would not need to do what it does now – mop up the mess made by Capitalism.
Exactly, capital is good! The problem with capitalism is that there are not enough capitalists. That’s what organizations like Mondragon are trying to change.
Thanks for the kind words about my work. More to come!
I work for Symbiota (https://symbiota.coop/), the UK-based worker co-op behind the Dandelion events platform (https://dandelion.events/) and I take huge satisfaction from working in a co-op!
Elle, it is the day before the Trump US Presidential inauguration. This article resonates with MAGA ideas. Maybe the US will move in this direction as the dust settles from Trumps cleansing actions. Food for thought and something to consider.
Okay so I finally got round to reading this and it puts forward a good case for the mass-cooperative model.
My biggest criticism, I guess, is how we get from here to there - there's a clear destination but no obvious path to get there. Whether this is an impenetrable obstacle or merely a hurdle to overcome - well, I suppose we won't know until we try!
Coming to this a bit late from ACX. The question foremost in my mind is: how do they hire and fire people? It's great that within their selected group of employees they are so collegial and still manage to make a profit. But sustaining that collegiality while still succeeding in a competitive market demands the ability to exclude people who aren't going to be net positive contributors for whatever reason. And that exclusion inherently limits how egalitarian they can really be in the larger scheme of things.
Mondragon does have the ability to lay people off, and in some cases they have also offered early retirement packages. But laid off people also have the right to appeal.
As people don’t become members until two years after working at the company, it is unlikely that they would become laid off after that point. It would be more likely that they would reskill or join other parts of the organization to which they are better suited.
Ok, but those are the easy cases. What I mean is things like:
— How do they screen during hiring for people who will actually work productively despite not being able to make 10x money for 10x productivity?
— How do they fire people (fire for cause, not lay off) who either have an attitude problem or some other issue that caused them to become unproductive or negatively productive (e g. malfeasant)?
If they claim the latter case never happens I call BS. You can make it rarer with good management (including very selective hiring!) but you can't avoid it entirely in any org of sufficient size.
Been daydreaming about a similar concept for a while. I have never heard of Mondragon until now! Thank you so much for this write up. Really opens my eyes to a proven framework. Excited to learn more about Mondragon and how I can attempt to replicate their systems here in the US.
Elle, you say in your post , "Knowledge about the company is limited to educational materials, a sparse Wikipedia page, and a spattering of articles that extol the benefits of cooperatives without really explaining how they work". I don't want to sound nasty and school-marm-ish here, but actually a lot has been written about Mondragon, mostly by academics, but also in the last few years in the general media, say, by Nick Romeo for the New Yorker and P. Goodman in the New York Times. The Financial Times I believe also sent a journalist here in recent years. Here's a list of just a few.
Arando, S., Freundlich, F., Gago, M., Jones, D. C., & Kato, T. (2011). Assessing Mondragon: Stability and Managed Change in the Face of Globalization. In E. J. Carberry (Ed.), Employee ownership and shared capitalism: New directions in research (pp. 241–272). Labor and employment relations association at the University of Illinois Urbana-Champaign.
Arregi, A., Gago, M., & Legarra, M. (2022). Employee Perceptions About Participation in Decision-Making in the COVID Era and Its Impact on the Psychological Outcomes: A Case Study of a Cooperative in MONDRAGON (Basque Country, Spain). Frontiers in Psychology, 13. https://www.frontiersin.org/articles/10.3389/fpsyg.2022.744918
Azkarraga, J., & Cheney, G. (2019). Mondragon: Cooperatives in Global Capitalism. In S. Berger, L. Pries, & M. Wannöffel (Eds.), The Palgrave Handbook of Workers’ Participation at Plant Level (pp. 205–220). Palgrave Macmillan US. https://doi.org/10.1057/978-1-137-48192-4_11
Basterretxea, I., Cornforth, C., & Heras-Saizarbitoria, I. (2022). Corporate governance as a key aspect in the failure of worker cooperatives. Economic and Industrial Democracy, 43(1), 362–387. https://doi.org/10.1177/0143831X19899474
Bretos, I., & Errasti, A. (2017). Challenges and opportunities for the regeneration of multinational worker cooperatives: Lessons from the Mondragon Corporation—A case study of the Fagor Ederlan Group. Organization, 24(2). https://doi.org/10.1177/1350508416656788
Cheney, G. (1999). Values at work: Employee participation meets market pressure in Mondragon. ILR Press, Cornell University.
Freundlich, F., Leceta Ruiz de Alegría, I., Loyola, A., & Legarra, M. (2023). The Mondragon Corporation and its member company Soraluce: The accomplishments and challenges of broad, networked employee ownership over six decades. In G. Hernández & R. Zuloaga (Eds.), Ownership in the Americas: A Path to Shared Prosperity. ITESO-Instituto tecnológico y de estudios superiores de occidente.
Kasmir, S. (1996). The myth of Mondragón: Cooperatives, politics and working-class life in a Basque town. State University of New York (SUNY) Press.
Mathews, R. (1999). Jobs of our own: Building a stake-holder society. Pluto Press Australia.
Stikkers, K. W. (2020). Institutionalizing the Common Good in Economy: Lessons from the Mondragon Cooperatives. Humanistic Management Journal, 5(1), 105–115. https://doi.org/10.1007/s41463-020-00093-8
Whyte, W. F., & Whyte, K. K. (1991). Making Mondragon. The Growth and Dynamics of the Worker Cooperative Complex (2nd edition). ILR Press.
You are so right, and I read some of these materials in my research. I admit that I lumped many of these into my "educational materials" point which was maybe too vague. What I meant more specifically is that, though Mondragon has been a successful working model for decades, the case study still isn't as well known internationally as it should be. Apart from a few articles written in the mainstream media (the ones you point out), most of these are PDFs written for academic and niche journals. My point was that there need to be a lot more of us working to make Mondragon a much better understood and more widely known model internationally, because it's very much one we should all be learning from. I apologize if that wasn't clear, and I appreciate you pointing out these additional resources for other readers who want to research the model and dig deeper.
Hi. Very interesting exchange. Thanks to Elle and the other participants. I've been working in Mondragon for many years and most managers I've heard talk about this say quite openly that they created foreign subsidiaries to protect employment / the co-ops at home in the Basque Country. If their conventional competitors located in low-wage countries and significantly lowered their production costs, then the co-ops are, at some level, obligated to do so. ... though it is a complicated debate. Many agree with German Lorenzo about the lack of suitable legal structures (and financing mechanisms) for worker co-ops in many countries, though some commentators argue that other kinds of legal structures could be used to share ownership in those places. Other multinationals that share owneship broadly with employees in their home countries have found ways to do it in at least some of their foreign subsidiaries. W. L. Gore (of Goretex fame) is an example. ... Many think it is partly a question of priorities and risk aversion. The issue has arisen several times over the years in Mondragon group-wide debates, but serious action has not been taken. Some enteprising, committed Mondragon co-op will have to "take the plunge" at some point if others are to begin to be persuaded. It's a tough one.
Thank you so much for this perspective Fred, I so appreciate it! I'm very curious about the idea of how this model can be replicated both within and outside of Mondragon so this is helpful to understand.
What a concept! I have always promoted employee owned businesses. Out goal and process should become activist in pursuit of this kind of reality. Wonderful essay!
I can't decide what I love more, here! The article itself or the comments discussion! I feel like I'm reading a Cliff's Notes of economic evolutionary thought in late stage capitalism and what comes next for local, state, and global economics and finance. I want to spend time digesting all of this and researching more. And this kind of avid engagement and dialogue is exactly why I will keep throwing money at this work. The capitalist in me appreciates exchanging my funds for the services and goods being provided here and the optimistic futurist in me recognizes the enormous potential of this collaborative creation and distribution of knowledge by all of us who engage with Elle's products and services. Thank you!!
Lee, I can't tell you how much this means to me. Thank you so much for taking the time to thoughtfully engage with my work. I so resonate with the struggle of, "yes capitalism is the best economic theory we've experienced so far, AND it could work so much better!" I'm still piecing together what that could look like, but I'm grateful to explore that here with so many incredibly smart people!
Thank you for keeping a fire going for the example of Mondragon & other cooperative initiatives. You have been extremely generous with all your thoughtful responses to inquiries and exclamations about what the Mondragon collaborative is or isn’t in term of how it fits or not in certain current political societies. Personally, I sense a deep pragmatic spirit that favors positive outcomes for the people involved in the work, with both capitalistic and socialistic patterns used when and if appropriate based on the collaborative entities’ experiences, needs & vision.
Part of what attacks me to Mondragon is Fr. Arizmendi’s deep faith in the dignity of each individual human being & their specific call to work in their times & circumstances. Somehow he was able to convey to and imbue in his fellow collaborators the same commitment to each other.
There’s something more than a specific methodology or educational program behind all this effort to humanizing work and social life.
Yes, exactly. Arizmendi was a humanist, and believed in human dignity for everyone. I wrote a follow up about him and his ideology that led to Mondragon if you’re interested: https://www.elysian.press/p/the-cooperatist-manifesto-of-mondragon
Capitalism gives Capital a bad name. There is nothing wrong with Capital – it is a brilliant tool for creating wealth – but has just been expropriated by the greedy.
This is a brilliant article and piece of research. Thanks Elle. I live in Spain now and have seen Mondragon's impact. A really hopeful alternative to the current mess we live in.
I also love your point, in a nod to the libertarians, that if we opted for coops and social enterprises as the main form of business organisation (leaving a small wild sector where the sociopaths etc who currently run our world could eat each other in unfettered uber capitalism), then government could be much smaller – it would not need to do what it does now – mop up the mess made by Capitalism.
Many congrats on this piece Elle and your work.
Exactly, capital is good! The problem with capitalism is that there are not enough capitalists. That’s what organizations like Mondragon are trying to change.
Thanks for the kind words about my work. More to come!
Brilliant piece!
I work for Symbiota (https://symbiota.coop/), the UK-based worker co-op behind the Dandelion events platform (https://dandelion.events/) and I take huge satisfaction from working in a co-op!
Thank you, and wow that’s very cool!
Brilliant- thank you for this
Elle, it is the day before the Trump US Presidential inauguration. This article resonates with MAGA ideas. Maybe the US will move in this direction as the dust settles from Trumps cleansing actions. Food for thought and something to consider.
Great article, thanks.
Thank you for this piece. Very interesting to learn more about Mondragon.
Glad you enjoyed it!
A truly comprehensive story with beautiful but useful graphics
🙏
Okay so I finally got round to reading this and it puts forward a good case for the mass-cooperative model.
My biggest criticism, I guess, is how we get from here to there - there's a clear destination but no obvious path to get there. Whether this is an impenetrable obstacle or merely a hurdle to overcome - well, I suppose we won't know until we try!
I think the path there is:
1) Incentivizing the model as outlined in this post: https://www.elysian.press/p/founders-can-make-millions-selling-to-workers
2) And with that incentive in place, more founders choosing to make their companies coops and selling them to employees.
Coming to this a bit late from ACX. The question foremost in my mind is: how do they hire and fire people? It's great that within their selected group of employees they are so collegial and still manage to make a profit. But sustaining that collegiality while still succeeding in a competitive market demands the ability to exclude people who aren't going to be net positive contributors for whatever reason. And that exclusion inherently limits how egalitarian they can really be in the larger scheme of things.
Mondragon does have the ability to lay people off, and in some cases they have also offered early retirement packages. But laid off people also have the right to appeal.
As people don’t become members until two years after working at the company, it is unlikely that they would become laid off after that point. It would be more likely that they would reskill or join other parts of the organization to which they are better suited.
Ok, but those are the easy cases. What I mean is things like:
— How do they screen during hiring for people who will actually work productively despite not being able to make 10x money for 10x productivity?
— How do they fire people (fire for cause, not lay off) who either have an attitude problem or some other issue that caused them to become unproductive or negatively productive (e g. malfeasant)?
If they claim the latter case never happens I call BS. You can make it rarer with good management (including very selective hiring!) but you can't avoid it entirely in any org of sufficient size.
By laid off, I mean fire. They can absolutely still fire people.
Been daydreaming about a similar concept for a while. I have never heard of Mondragon until now! Thank you so much for this write up. Really opens my eyes to a proven framework. Excited to learn more about Mondragon and how I can attempt to replicate their systems here in the US.
Thanks Kade!!! So glad it was helpful! More posts coming....
The audio was great — pls keep including that!
Thank you for this feedback. I'll keep doing that!
Elle, you say in your post , "Knowledge about the company is limited to educational materials, a sparse Wikipedia page, and a spattering of articles that extol the benefits of cooperatives without really explaining how they work". I don't want to sound nasty and school-marm-ish here, but actually a lot has been written about Mondragon, mostly by academics, but also in the last few years in the general media, say, by Nick Romeo for the New Yorker and P. Goodman in the New York Times. The Financial Times I believe also sent a journalist here in recent years. Here's a list of just a few.
Arando, S., Freundlich, F., Gago, M., Jones, D. C., & Kato, T. (2011). Assessing Mondragon: Stability and Managed Change in the Face of Globalization. In E. J. Carberry (Ed.), Employee ownership and shared capitalism: New directions in research (pp. 241–272). Labor and employment relations association at the University of Illinois Urbana-Champaign.
Arregi, A., Gago, M., & Legarra, M. (2022). Employee Perceptions About Participation in Decision-Making in the COVID Era and Its Impact on the Psychological Outcomes: A Case Study of a Cooperative in MONDRAGON (Basque Country, Spain). Frontiers in Psychology, 13. https://www.frontiersin.org/articles/10.3389/fpsyg.2022.744918
Azkarraga, J., & Cheney, G. (2019). Mondragon: Cooperatives in Global Capitalism. In S. Berger, L. Pries, & M. Wannöffel (Eds.), The Palgrave Handbook of Workers’ Participation at Plant Level (pp. 205–220). Palgrave Macmillan US. https://doi.org/10.1057/978-1-137-48192-4_11
Basterretxea, I., Cornforth, C., & Heras-Saizarbitoria, I. (2022). Corporate governance as a key aspect in the failure of worker cooperatives. Economic and Industrial Democracy, 43(1), 362–387. https://doi.org/10.1177/0143831X19899474
Bretos, I., & Errasti, A. (2017). Challenges and opportunities for the regeneration of multinational worker cooperatives: Lessons from the Mondragon Corporation—A case study of the Fagor Ederlan Group. Organization, 24(2). https://doi.org/10.1177/1350508416656788
Cheney, G. (1999). Values at work: Employee participation meets market pressure in Mondragon. ILR Press, Cornell University.
Freundlich, F., Leceta Ruiz de Alegría, I., Loyola, A., & Legarra, M. (2023). The Mondragon Corporation and its member company Soraluce: The accomplishments and challenges of broad, networked employee ownership over six decades. In G. Hernández & R. Zuloaga (Eds.), Ownership in the Americas: A Path to Shared Prosperity. ITESO-Instituto tecnológico y de estudios superiores de occidente.
Kasmir, S. (1996). The myth of Mondragón: Cooperatives, politics and working-class life in a Basque town. State University of New York (SUNY) Press.
Mathews, R. (1999). Jobs of our own: Building a stake-holder society. Pluto Press Australia.
Stikkers, K. W. (2020). Institutionalizing the Common Good in Economy: Lessons from the Mondragon Cooperatives. Humanistic Management Journal, 5(1), 105–115. https://doi.org/10.1007/s41463-020-00093-8
Whyte, W. F., & Whyte, K. K. (1991). Making Mondragon. The Growth and Dynamics of the Worker Cooperative Complex (2nd edition). ILR Press.
You are so right, and I read some of these materials in my research. I admit that I lumped many of these into my "educational materials" point which was maybe too vague. What I meant more specifically is that, though Mondragon has been a successful working model for decades, the case study still isn't as well known internationally as it should be. Apart from a few articles written in the mainstream media (the ones you point out), most of these are PDFs written for academic and niche journals. My point was that there need to be a lot more of us working to make Mondragon a much better understood and more widely known model internationally, because it's very much one we should all be learning from. I apologize if that wasn't clear, and I appreciate you pointing out these additional resources for other readers who want to research the model and dig deeper.
Hi. Very interesting exchange. Thanks to Elle and the other participants. I've been working in Mondragon for many years and most managers I've heard talk about this say quite openly that they created foreign subsidiaries to protect employment / the co-ops at home in the Basque Country. If their conventional competitors located in low-wage countries and significantly lowered their production costs, then the co-ops are, at some level, obligated to do so. ... though it is a complicated debate. Many agree with German Lorenzo about the lack of suitable legal structures (and financing mechanisms) for worker co-ops in many countries, though some commentators argue that other kinds of legal structures could be used to share ownership in those places. Other multinationals that share owneship broadly with employees in their home countries have found ways to do it in at least some of their foreign subsidiaries. W. L. Gore (of Goretex fame) is an example. ... Many think it is partly a question of priorities and risk aversion. The issue has arisen several times over the years in Mondragon group-wide debates, but serious action has not been taken. Some enteprising, committed Mondragon co-op will have to "take the plunge" at some point if others are to begin to be persuaded. It's a tough one.
Thank you so much for this perspective Fred, I so appreciate it! I'm very curious about the idea of how this model can be replicated both within and outside of Mondragon so this is helpful to understand.
What a concept! I have always promoted employee owned businesses. Out goal and process should become activist in pursuit of this kind of reality. Wonderful essay!
Thank you so much! I'm so with you there!
I can't decide what I love more, here! The article itself or the comments discussion! I feel like I'm reading a Cliff's Notes of economic evolutionary thought in late stage capitalism and what comes next for local, state, and global economics and finance. I want to spend time digesting all of this and researching more. And this kind of avid engagement and dialogue is exactly why I will keep throwing money at this work. The capitalist in me appreciates exchanging my funds for the services and goods being provided here and the optimistic futurist in me recognizes the enormous potential of this collaborative creation and distribution of knowledge by all of us who engage with Elle's products and services. Thank you!!
Lee, I can't tell you how much this means to me. Thank you so much for taking the time to thoughtfully engage with my work. I so resonate with the struggle of, "yes capitalism is the best economic theory we've experienced so far, AND it could work so much better!" I'm still piecing together what that could look like, but I'm grateful to explore that here with so many incredibly smart people!