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Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of ten of America's presidencies and who has edited alternative journals since 1964. The Review, which has been on the web since 1995, is now published from Freeport, Maine. We get over 5 million article visits a year. See for full contents of our site

January 8, 2010


Last fall, the Mondragon Cooperative Corporation, a multibillion dollar cooperative based in the Basque region of Spain, formed an alliance with the United Steelworkers, the largest industrial trade union in the U.S. The two announced that they would develop Mondragon manufacturing cooperatives in the United States and Canada that would "adapt collective bargaining principles."

This is one of the most important labor stories of the year but it has gotten tiny attention in the conventional press. In the Cooperative Business Journal, Erbin Crowell examined the history and implications of this development.

Erbin Crowell, Cooperative Business Journal - "We have lots of experience with ESOPs," said the Steelworkers' president Gerard, referring to Employee Stock Ownership Plans, which allow workers to own stock in a corporation as a retirement benefit.

But Gerard said that they "have found that it doesn't take long for the Wall Street types to push workers aside and take back control." It is exciting that Gerard, an outside observer to cooperatives, has seen so clearly the potential of the cooperative model as an alternative to business as usual: "We see Mondragon's cooperative model with 'one worker, one vote' ownership as a means to re-empower workers and make business accountable to Main Street instead of Wall Street," he said.

Of course, "one worker, one vote" industrial democracy is a central characteristic of Mondraon.

But it is also important - particularly for cooperators - to note that much of the Mondragon system includes this principle as applied to other stakeholders as well. Eroski, for example, is the second largest food retailer in Spain and a Mondragon cooperative in which both workers and consumers are members. Membership in agricultural co-ops in the network includes workers and farmers. And the members of the Caja Laboral Popular, Mondragon's bank, are workers, consumers and other cooperatives. Like the cooperative economies of northern Italy, the Mondragon co-ops are also committed to the principle of cooperation among co-ops, using their financial resources, market information and purchasing power to purposefully drive the growth and development of new cooperative enterprises and initiatives.

Mondragon is not perfect, of course, and has received some criticism over the years. In particular, some observers have questioned Mondragon's development strategy, which includes the ownership of non-cooperative subsidiaries that are mostly outside the Basque region.

In these subsidiaries, employees do not have access to membership. The issue has also been a topic of debate within the association itself, reflecting its democratic nature. For its part, Mondragon has been surprisingly open about the challenges of competing in a global economy while protecting the integrity of a cooperative system built up by its members for more than 50 years. . .

For unions, this agreement represents a new opportunity to explore the human and economic potential of cooperative ownership, as opposed to settling for an adversarial relationship with capital. For worker co-ops, this may be an opening for greater solidarity with organized labor. And for the cooperative movement as a whole, we have an opportunity to reassess our assumptions about the role of unions and the potential for engaging employees in a non-adversarial setting, one characterized by ownership shared among stakeholders.

In short, this agreement represents an opportunity not only for the United Steelworkers and Mondragon, but for the wider cooperative and labor movements.

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Anonymous Anonymous said...

They can expect the full brunt of the US public relations industry thrust upon them. We don't like unions here, for some reason. A few key "business leaders" are probably fuming mad about this.

January 8, 2010 4:47 PM  
Anonymous Anonymous said...

Oh my, this is trouble! Here in the US the people serve the economy not the other way around. That's how we can have jobless recoveries and other seeming paradoxes.

January 8, 2010 5:47 PM  

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