Terry Mollner is the director of the Trusteeship Institute (Baker Rd, Shutesbury, MA 01072), and a consultant who helps companies become worker-owned. The following article provides some additional insight into the Mondragon Cooperatives described in the Spring 1983 issue.
MANY HAVE DIFFICULTY implementing Mondragon in America, not because they can’t find friends with solidarity among themselves like the Basques had, but because they try to place Mondragon on the left-right political axis. Many see it as a better form of socialism, one easily utilized inside a capitalist society. Even the popular BBC film "Mondragon: An Experiment" suggests it is a descendent of the English cooperative movement begun by the Rochdale Cooperatives.
My research while visiting Mondragon and my study of its structures and procedures suggests to me something different. That something different comes from the philosophy of Father Arizmendi.
In both capitalism and socialism things come before people. They are both based in materialism. The "apple" is where the value lies and the only question is who gets how much of it. The process of material distribution is more important than the "relationship" among the people receiving parts of the apple.
Mondragon runs on an axis that is perpendicular to the above one. People come before things. It is based on the nonmaterial (call it "mind" or "spirit" or "relationship"). The apple is not seen as where the value lies. The "relationship" among people interested in the apple is where the value lies. How much each person receives is assumed to be known without conflict from right relationship.
What is the right relationship among people? We all know from our personal experience the one word answer to that question – its "love." But how does love play itself out in the structuring of a business enterprise?
Philosopher Arizmendi observed that lovers behaved differently around "things" than enemies did. If we are lovers, and we have a Granny Smith apple which we would both like, we would probably split the apple as evenly as possible and share it. If one of us hadn’t eaten all day and the other just had a full meal, the latter would take a little piece and give the rest to the other.
Lovers behave as if they have only one mind. With little effort they arrange "things" as easily together as they each arrange their own "things" alone.
Enemies on the other hand behave as if they are of two minds. If we are enemies and we have a Granny Smith apple, one of us might try to gobble it down while the other is not looking. Or, the other being too smart for that, we might just agree to share it by cutting it in half. Then we would both look to see which half was bigger and try to take it.
Enemies behave as if they have two different minds. This is because they think "things" are most important. There being only so many things around at any one time, they try to acquire as many of them as they can. Life for them is a process of competing and taking.
The difference lies in whether or not you understand that relationship, unlike matter, is timeless and spaceless. For instance, if we make a mistake with a loved one, say we are sorry, and he or she forgives us, it can be as if it never happened. Yet materially it did happen. Relationship is timeless and spaceless; matter is in time and space. If the relationship is truly loving, there will be no conflict around matter. This was Father Arizmendi’s main discovery
This understood, he asked his young students and the men and women in the bars and drinking clubs, "If the above is so, what kind of an organization does it suggest?"
First, they realized that if you want to have a loving organization, you can’t separate opposite roles and give them to different people as if they could be separated in time and space.
To have one mindedness the "owner" and the "worker" in a business must be the same person.
If I am the person who decides what movie to go to and you are the person who goes to the movie, that will seem ludicrous to us. In this example we can easily see that to separate the "choosing" and the "doing" from one another in time and space (into different bodies) brings fear into the relationship. We will each fear that the other will not be sensitive enough to our needs and wants. The potential for conflict is great.
However, if I am the "chooser" and the "doer" I have no fear at all. I know I will be sensitive to myself. In fact, knowing I will be sensitive to my needs and wants every moment, the relationship between the chooser and doer, being both in me, is inner peace. It is the result of freedom. The capitalist in us is happy.
If we are going to attend a movie together and we "both" are the chooser and the doer, then "our relationship" is timeless and spaceless. If we are lovers and you want to go to movie A and I want to go to movie B, we will talk about it. If you want to go to movie A more than I want to go to movie B, we will decide to go to movie A. We will both be happy; yet in the material world I didn’t get anything I initially wanted and you got everything you initially wanted. We are happy because we acted with one mind. The limitations of the material world are fully accepted – we could only go to one movie together. There is relationship peace. It is the result of solidarity. The socialist in us is happy.
So, the first rule of a Mondragon cooperative is that the chooser and the doer, the owner and the worker, must be the same person and every member must be both. This must not be in name only. This must be the actual inner and outer (operational) experience of the member.
In terms of the inner experience, every worker is working in the business all day so there is no need to do more to be sure he or she is invested as a worker. However, especially after years of being only a worker and not an owner, for the business to succeed, the worker needs to be equally invested as an owner.
Mondragon believes there is only one thing that will assure that every worker is fully invested as an owner – capital. Everyone knows what ownership is. It’s being at risk if something which is yours gets damaged or lost. People can be fully invested in something without being financially at risk. However, Mondragon wants everyone in the community to be equally invited to be members. So they need to make sure everyone becomes invested 100% as an owner. So, to insure this in every case, every member is required to loan the cooperative a substantial sum, the equivalent of a third of an average year’s salary; it’s the equivalent of about $6000 in U.S. dollars.
The new member doesn’t have to have this capital on day one. He or she simply signs a note and it will come out of his or her salary over time with no interest attached. However, if the business goes bankrupt the next day, the worker- owners will still need to pay off the loan to the bankruptcy courts. Thus, membership, with full rights and responsibilities, is open to all, rich or poor.
The rest of the structure of a Mondragon Cooperative is equally insightful into human nature.
Only members of the cooperative can be on the Board of Directors. This assures an adult-adult psychology pattern. Many worker cooperatives in the past have invited non- members to be on their Boards which resulted in parent- child (chooser-doer) psychological patterns.
There are two main committees of the Board – the Management and Social Council. The Manager is a worker- owner who is hired as Manager for a four-year term. During that time the manager cannot be told what to do; he or she can only be fired. This is another unique aspect of the Mondragon design.
Management is recognized as a specialty skill. So Mondragon hires people to manage who have that skill and then gets out of their way and lets them do their jobs. This has solved perhaps one of the greatest problems of all other worker cooperative efforts.
In past efforts, managers were suspect because the workers had come from capitalist enterprises where the hierarchy was used as a power tool. So managers were not given sophisticated training and the other worker-owners used their influence to demand changes in management’s business plans without sensitivity to the sophistication of its design. For these reasons it has been widely believed that worker-ownership could never compete in a capitalist society.
Mondragon has solved this problem by looking into the essence of hierarchy. They discovered that its essence is "efficiency" and not "power." A hierarchical division of labor is the most efficient way for a group of people to do a complex task. If the relationships among the people are of the timeless and spaceless variety described earlier, then hierarchy is "only" an efficiency system.
At the same time, the Social Council is the equivalent of a union "within" the cooperative and also ensures full worker participation in management.
Every division of 20 to 50 worker-owners in an industry meets once a week to discuss any issues which may arise. It has a representative who will later meet with all the other representatives as the Social Council. The Board delegates to the Social Council all the issues with which unions are normally concerned – job descriptions, salary scales, fringe benefits, safety, etc. It is also responsible for donating 10% of any annual net profits to charity.
When the division of 20-50 worker-owners have their weekly meeting, they can discuss anything they choose. Management and their Social Council representative will be part of the group, of course, and a member of the Board may be a member also. Through this system every worker- owner participates in managing every aspect of the enterprise.
Whether a worker-owner becomes enthusiastic about management issues or traditional union issues, his or her substantial capital investment keeps the commitment as an owner and worker both 100% present in his or her mind. All worker-owners have one share of voting stock. This keeps them all equal in power. Thus, their relationship within themselves and with each other is a one-minded one.
This same approach applies to their relationship to society. The main focus of the Association of Mondragon Cooperatives is the creation of worker-owned jobs. There probably is no better service to themselves. Job creation gives the current worker-owners greater job security and allows them to be enthusiastic about automation. They are very aggressive in robot development. They recognize that it both eliminates repetitive and dirty jobs and increases productivity.
At the same time they view worker-owner job creation as the best service to the community at large. Once a person has a worker-owner job in a Mondragon Cooperative it is guaranteed for life. Thus the person’s family will never be dependent upon public assistance but continually contribute to the needs and development of society.
Therefore, every act of every worker-owner every day is experienced as providing for one’s self and serving society, both simultaneously and both 100%. The for-profit/non- profit personality split we are so familiar with is absent in the attitude of the Mondragon member. When walking through a factory you feel like you are visiting with someone in their kitchen.