From Mondragon to America: Experiments in Community Economic Development

Alternatives Journal, Fall, 1998 by Sally Lerner

Reviewed by Sally Lerner

Here's one scenario for the future of work in Canada that worries many thoughtful people: there are even fewer secure, adequately waged jobs for Canadians than at present. Most manufacturing and much highly skilled "knowledge work" is done by smart machines, by low-paid workers in less developed countries or by Canadians who earn less than is required to participate fully in Canadian society - that is, to purchase adequate food, shelter, transportation, clothing, education and the basic amenities for themselves and their children. Private sector organizations don't need more "core" employees and they have all the "independent" suppliers they can use. The public sector, once the employer of last resort, now operates more like the private sector. The large majority of families would fall below the poverty line if one of their two earners became unemployed. It is frequently reiterated in media that "it is not the business of business to create jobs." Not a pleasant vision.

If you've begun to fear that there are no real alternatives to this scenario and to the global hegemony of multinational corporations, reserve some time to read these timely books by Greg MacLeod and Zellig Harris. Both deal with alternative ways of organizing work and setting societal priorities, and both spotlight Mondragon, the highly successful co-operative corporation based in the Basque area of Spain since its founding in 1956. Mondragon is seen as an exemplar of more humane values, a different distribution of power and a better quality of life than are promised by a McWorld under the control of an international elite of the rich.

MacLeod's book is a good introduction to the Mondragon phenomenon. It offers a historical perspective on Mondragon's founding values with their strong emphasis on human needs, community benefit and flexibility in organizational arrangements, and relates the Mondragon model to current experiments with community business development. He describes how Mondragon has evolved throughout its 42-year existence and is now responding to the intense competition of globalization. The one constant has been the co-operative's determination to remain viable and to provide the employment that underpins the security of its member communities.

MacLeod, who was a founder in the early 1970s of the New Dawn co-operative corporation in Cape Breton, details both the compromises made by Mondragon in the 1990s in order to stay competitive and the corporation's continued creation of new employment in both the Basque area and its newer operations in Valencia. He is at pains to emphasize that Mondragon managers have experimented with mixed co-operative/conventional organizational models to ensure survival so that the original community value goals could be met.

What local economic development needs to get right, MacLeod argues, is realizing that to benefit a community over the long term, businesses must succeed and make profits that can be re-invested to create more jobs, community facilities, education and housing. In conclusion, he offers a range of Canadian examples of community business ventures, from Nova Scotia to British Columbia, that seem to have "some potential for evolution" in the Mondragon sense. And if you're convinced but uncertain how to get started in your community, there is a short guide to the steps required to form a community business corporation. The book also provides a detailed bibliography of Mondragon materials for those who want to explore further.

Harris' posthumously published book provides a sweeping historical perspective on the development of capitalism and the implications for its late-stage evolution of its characteristic "openness" to all who want to try their luck as entrepreneurs. Harris' culminating focus is on types of worker-controlled enterprises such as producer and consumer co-operatives, and Employee Share Ownership Plans (ESOPs) that might be nurtured in the interstices of late capitalism and serve as a stimulus for more genuine democracy in the developed capitalist countries.

In his foreword, Wolfe Heydebrand (professor of sociology, New York University) notes: "This book radiates a cautious optimism . . . . [It] deals with the possibilities of economic democracy and employee ownership and control as viable, socio-economic strategies of transformation of capitalist societies. It sees this transformation as a non-political, non-violent potential growing out of existing and possibly increasing tendencies within contemporary capitalism itself . . . . Given the globalizing tendencies of contemporary capitalism, it seems especially important to consider the remaining options of internal transformation under democratic auspices."

Harris envisions "participant-controlled enterprises", that is, the development of worker ownership of the means of production through grassroots, enterprise-specific change. Workers borrowing capital is one way of creating the new type of enterprise, he suggests. He believes that as people work more co-operatively, they will come to think more co-operatively and democratically, and that this change rippling through a society will forestall the alternatives of international top-down economic monopoly or fascistic state control. Because Harris intentionally raises as many questions as he tries to answer, his book is stimulating rather than definitive. But he too points out a path that may be an alternative to governance by global hegemons.