28 March 2012

Co-op beats Spanish recession

As one of the PIGS, the four (or six) European countries whose dysfunctional economies are much in the news these days, Spain is perhaps not the place you would expect to find a thriving economic enterprise. But one such enterprise is in fact flourishing, weathering the financial storm quite nicely. I refer to the Mondragon Corporation, the world's largest co-operative. Although it suffered from the recession, it bounced back nicely in 2010 with a profit of $240-million, triple that of 2009. It also added jobs and new products and services.

Founded in 1956, Mondragon is now one of Spain's largest companies, employing over 80,000 people in 256 companies that have expanded into 18 countries. The co-op includes supermarkets, travel agencies, service stations, manufacturers of everything form refrigerators to industrial components, business consultancies, architecture and engineering services, language and graphic arts services, and many others. Mondragon has its own savings bank and university and technology park. The companies are owned by their worker-members and power is based on the principle of one person, one vote. Bosses are not allowed to make a wage more than nine times that of the lowest paid worker. (In the European Union's top 100 companies, the ratio is as high as 200 to one.)

In a world where corporations are increasing their power over democratically-elected governments and the disparity between rich and poor worsens, Mondragon offers a highly successful alternative to the conventional competitive enterprise. It offers a model that is competitive yet advances both democracy and equity. For a future that demands much more co-operation among people and among nations if we are to avoid economic and environmental collapse, there is no better model available.

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