Date: Wed, 07 Dec 1994 19:51:03 -0500 (EST)
From: James Lawler <PHIJIML-AT-ubvms.cc.buffalo.edu>
Subject: Schweickart on Mondragon


The following was sent to me by David Schweickart, presently in Italy.  
--Jim Lawler (phijiml-AT-ubvms.cc.buffalo.edu)

Reflections on Mondragon--excerpts from a letter to a colleague

Let me tell you a bit about Mondragon.  We weren't able to any kind of
in-depth investigation, but we did form some impressions.  We visited the
town twice, once on Sunday, just to see if we could find it, and then the
next day to keep our appointments with a PR person from the bank (Caja
Laboral Popular) and with a public relations person from Ikerlan, their
research institute.  We also spent two hours or so in conversation with two
academics from San Sebastian, an economist and a labor specialist, who are
part of a research group on self-management sponsored by the university in
San Sebastian.

It's quite interesting just trying to *find* Mondragon.  It's in the middle
of nowhere--nowhere being about an hour's drive inland from San Sebastian,
into the Pyrenees along winding mountain roads.  (As it turns out,
Mondragon is only few kilometers from the even smaller town of
Loiola--birthplace of St. Ignatius, founder of the order that founded our
university.)

Suddenly, we enter a valley, and there's this town--I'd guess of about
50,000.  It's a pretty, prosperous looking town.  Lots ofnew housing being
built, a couple of nicely kept parks.  But clearly a working-class town: no
tourist shops, no signs for pensions, nothing ostentatious or luxurious. 
And there on the side of the mountain, overlooking the town are couple of
buildings I recognize from the video I'd seen.  So we drive up.  No gates
or security guards.  Here we are at the headquarters of MCC, the Mondragon
Corporacion Cooperativa (it's new name, since 1986).  Close by is the
central office of the Caja Laboral Popular, and a separate building that
houses the banks data processing center.  A little further down the
mountain is Ikerlan, their research center.  Further down still is
Lagun-Aro, their private social-security facility and at the base, the
Escuela Politecnica.

One is struck by how *non-flashy* it all is.  All the building are of a
modern (not post-modern) functional design.  The grounds are well-kept, but
everything looks just a bit run down.  And wide open.  We don't try to go
into the buildings, but we wander all around them, taking pictures, etc. 
There are a couple of cars parked nearby, and we meet an old couple out for
a stroll, but no cops or watchmen or anything.

And yet, as we learn later: MCC is a more important economic player in the
Basque region (the *whole* region, not just this little town) than GM is in
the US; Ikerlan is the only Spanish research firm to have met the NASA
technical specifications and hence permitted a project on the Columbia
space shuttle last summer; Caja Laboral Popular has been rated as among the
100 most efficient financial institutions in the *world* in terms of its
profit/asset ratio; the Escuela Polytecnica, enrolling 2000 students is
considered the best technical institute in Spain; MCC's distribution
branch, Eroski, opened more "hypermarkets" than any other retailing group
in the country; MCC's capital goods division is the market leader in metal
cutting tools in Spain, as is its division that makes refrigerators,
washing machines and dishwashers; MCC engineers have built "turnkey"
factories in China, North Africa, the Middle East and in Latin America. 
All in all MCC has a workforce of 25,000, and of financial assets of about
$8 billion.  Frankly, it's hard to believe, standing on the steps of the
modest little building that is the general headquarters, that all this
could be true.  But apparently it is.

It's also true that these are extraordinarily hard times in the Basque
region, which is in the middle of the deepest economic recession it has
experienced since WWII.  Official unemployment is about 25%.  Indeed,
employment in the MCC industrial cooperatives had fallen from 17,000 in
1991 to 15,000 now--though overall employment is MCC has not fallen.  It's
still quite rare, our San Sebastian colleagues tell us, for a person to
actually lose his job.  Cutbacks are effected through reassignment to other
cooperatives and through non-replacement of retirees.

The big culprit here, of course, is the usual suspect: globalcapitalism--in
this case Spain's incorporation into the European Economic Union, which has
greatly intensified competition.  Which brings me to the downside of MCC. 
The good news is that it is surviving.  It's showing itself able to compete
in the Brave New World of hypermobile capital.  But its sense of itself as
a radically different form of economic organization, as a pioneer opening
up new possibilities--that's not what it once was.  "Let's face it," said
Balaren (the economist from San Sebastian), "MCC is now just another
multinational corporation."

I'm not sure that's quite right.  The woman who showed us around Irkerlan
expressed a similar sentiment--but when asked if was important to be a
member of the cooperative, rather than a contract laborer, her reply was
immediate, "Oh yes.  As members we have job security.  And we get to vote."

I'm not as dismayed by the resemblance between MCC and a multinational firm
as many are, because I've *never* viewed Mondragon as the seed from which,
by a process of spontaneous multiplication, a new economic order would be
born.  Mondragon is important because it shows what is possible without
capitalists.  Democratically structured enterprises can be technically
sophisticated and highly efficient.  Mondragon continues to prove that
point.  But capitalism will never be brought down by some process of
peaceful, fair competition with worker-owned firms.  Because the
competition will never be *fair*.   Not when capitalism can scour the world
for low wages and compliant governments.

So I actually feel good about Mondragon.  Under extremely difficult
circumstances, it's surviving.  Economically it is not in crisis.  That's
good.  I'm pleased.   I only wish I'd had more time there to talk to more
people.


     ------------------