Opinion

Economic crisis a test for Mondragon

Values must change for the co-operative movement to grow, writes Guy Crouchback.

I have always been interested in the Mondragon industrial co-operative in Spain, which was the subject of an article in The Record on 16 November. It sounds an attractive idea. My main question about it is this: if it is so successful, why has the idea not spread farther?

It was founded by a Catholic priest, and has grown from five people in 1956 to 85,000, with some overseas subsidiaries. Yet it is almost the one and only one of its kind, and the only one on this scale. Has the Church done anything to support the setting up of similar co-operatives elsewhere? It has been very silent about it, if so.

Somehow, for reasons I am unclear about, this creative and apparently very successful enterprise has not spread beyond a couple of very isolated pockets.

Now it seems Spain is going to be drawn into Europe’s economic calamity, following Greece and Italy. Its unemployment rate is about 22 per cent and its youth unemployment rate about twice that. There seems to be little other hope on the horizon, and some of the media are talking in apocalyptic terms.

While this is bad news, there may be a small silver lining to the black cloud: if the Mondragon co-operative can survive this, its general credibility will be enormously enhanced. So far Mondragon has undergone only a slight contraction, with employment down to 83,800, and anticipates a return to profitability this year.

I have written repeatedly about the fallacy of talking of a “third way” between Communism and Capitalism, which is like talking of a third way between apples and elephants: capitalism is a means of production, and claims to be no more than that; communism is an ideology which makes totalitarian claims on the whole moral as well as economic life, and the two cannot be compared. There is no compromise way between them.

What is plain is that communism is dead and can never be resurrected - and nor should it be – and capitalism is in desperate straits. The co-operative movement, as I understand it, is not a way “between” the two, but something different.

I don’t think it can get off the ground if there is a strong union movement, fixated on higher wages on the Australian pattern, rather than on things like health and safety issues. Nor can it get off the ground with a class of bosses and managers whose sole concern is paying themselves as much as the enterprise will stand. A great change in values and attitudes will be needed. Yet we know that people can be inspired to do great things. Mondragon itself proves that.

I see nothing wrong with the co-operative movement except that it has worked on a large scale only in one Spanish town. We might do well to invest time and energy in finding out why it is so limited.
If the Mondragon co-operative weathers the present economic storm, we need a panel of professional economists to study it and see why and to consider all the reasons – not amateurs like me pushing barrows and simply thinking it might be a good idea.

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