By Aaron Dawson, Equal Exchange Interfaith Customer Service Manager
For my second post about Mondragon, I would like to talk about the 6th co-operative principle: cooperation among co-operatives. Mondragon has done amazing work with cooperating amongst the different co-ops within their network, but they’ve also faced challenges.
I was blown away by Mondragon’s network of various co-ops. As noted in my previous post, there were worker-owned home appliance and auto parts factories, worker/consumer-owned credit unions, worker/consumer-owned grocery stores, worker-owned universities, to name a few, and they are all working together. The ways that they work together is just as impressive as the variety and types of worker co-ops themselves.
The first and most basic way in which the Mondragon co-operatives cooperate with each other is through the divvying up of each co-op. Below is a chart of how each co-op puts their profits towards the general Mondragon network:
Gross Profits (general funds):
- 15-20%: the average that goes to the group reserves (most co-ops choose 20%)
- 10%: goes to Mondragon investment for new products and co-ops
- 2%: goes to Mondragon education (a.k.a. – Research & Design, Mondragon University)
- 2%: goes to a general solidarity fund (to cover individual co-ops’ losses)
So, around 34% of an individual co-op’s profits go straight to the Mondragon network to supporting a variety of activities, from growing the reserves, to investing in new products and co-ops, to support education, and even toward a solidarity fund to help co-ops in financial difficulty. Not only does this profit allocation provide a healthy safety net for all of the co-ops, it also helps fund innovation and future projects that allow the co-ops to continue to be profitable and innovative far into the future. This is one very direct way in which all the co-ops in Mondragon cooperate!
There are other ways that co-ops in Mondragon cooperate. Our group took a shopping trip to the Mondragon worker/consumer hybrid super market: Eroski. The particular store we went to can only be compared to a store like Super Walmart or a Super K – it sold groceries, appliances, luggage, clothing, etc., but all of the workers were also owners! On the shelves of the co-op, you could buy products that were manufactured by other Mondragon worker co-ops, like refrigerators and washing machines. The machines were very likely researched and designed by one of the Research & Design co-ops, and the products were transported from the factory to the store by a worker owned transportation co-op. They also had tons of Eroski private labeled items, which came in handy when I had to find some Spanish deodorant with a name I could trust! The point is, this is just one of many examples of how these co-ops, who are distinctly separate in business, are able to work together to create a vibrant co-operative economy.
So with all this cooperation going on, our group was left with the question: “How is Mondragon co-operating with co-operatives outside their network”? In all truth, Mondragon typically teams up with any company in a given area that can best do what Mondragon is looking to do, regardless of their ownership structure. When we asked Jesus Herrasti, who was the former head of Mondragon’s International Division (and current head of Mondragon’s Innovation Park – Garia), about partnering with any co-ops in the United States, he noted that Mondragon had talked with a few co-ops in America, some of them with quite a lot of resources, but in the end, the American co-ops were not able to come up with any projects for collaboration with Mondragon. Herrasti felt that this was the case because co-ops are thinking about their own time, their own stuff – and that co-ops do not trust each other. He noted that often times, in co-op organizations with social missions, you can find that people are very proud and thus the organizations are hard to manage and hard to work with. The point of bringing this up is that we, as a co-op community, have to do better. We need to work together, we need to work with each other in the U.S., and we need to work with large co-ops such as Mondragon in other countries if we are to accomplish our missions!
It is time to put aside our egos and our pride and just do something, together. If unions and worker co-ops can cooperate to build something new (see my first post: A Timely Visit to Mondragon), then it should not be asking too much to expect consumer co-ops and worker co-ops to cooperate, or worker co-ops cooperating with other worker co-ops, or Credit Unions with housing co-ops, etc. The point is, we in the co-op world recognize that we need an alternative model; that much is obvious.
I, personally, also believe that the co-op world has that alternative model to give to the world. So the question is, are we going to be able to work together to build that alternative? I would like to leave off with a quote from Herrasti that highlights what we need to do in cooperating with each other: “We do not need to be something big and fight with capitalism; we just need to create something different.”