The Mondragon Corporation, a network of autonomous coöperatives in Spain, has managed to survive nearly 70 years of capitalism’s creative destruction. Its persistence suggests that there are fairer and more sustainable ways of doing business.
Jorge Vega Hernández, a mechanical engineer working in northwestern Spain, returned from a business trip and started to feel sick. It was March, 2020—the beginning of the pandemic—and so he called a government help line. He was told that he might have the coronavirus and that he should stay home. But, without leaving the house for a test, Hernández couldn’t get proof of his illness—and, without that proof, he had no excuse for not coming into work.
Worker-owned coöperatives are often considered both idealistic and inefficient; the model is seen as suitable mainly for upscale grocery stores or boutique bakeries in progressive towns. At a 2019 conference, the economist Larry Summers characterized co-ops as intrinsically sleepy and short-sighted. “When you put workers in charge of firms and you give them substantial control over the firms,” he said, “the one thing you do not get is expansion.
Born in 1915, Arizmendiarrieta lost an eye in a childhood accident; mobilized during the Spanish Civil War but unable to take part in the fighting, he still served as a Basque-language journalist for a publication opposed to the Nationalists led by Franco. He was arrested by Franco’s forces and spent a month in prison before being released. After the war, he became a priest and was assigned by the Church to the town of Mondragón, in 1941, when he was twenty-five.
I stood for a while, absorbing the atmosphere. I saw that the pamphlet included a suggested prayer to Arizmendiarrieta, and information on whom to contact if it were answered. I walked back out into the sun. A man interrupted by standing up, then announced that he’d just received an e-mail confirming the sale of a €1.8-million machine to a company in Germany. Applause broke out around the table. “What are you still doing here?” someone joked. “Go sell another!”
Much of the social life in the town of Mondragón happens in culinary clubs—hybrids between clubs and restaurants that are managed coöperatively, with logistics handled by rotating committees. New members can join a culinary club only after their applications have been approved in a vote; membership fees are around twenty euros a month.
As an allegory for the Mondragon coöperatives, the myth is irresistible. The poverty of post-Civil War Spain, the oppression of the Franco dictatorship, the 2008 crash, the pandemic—the co-ops have subdued many menacing dragons through collective action. But the model also has limits.
Around the table, there were murmurs of assent. Ormaetxea described a recent controversy within the Fagor Group of coöperatives. Engineers and managers had proposed raises for themselves that would help bring their salaries closer to market rates; the salaries would not exceed the six-to-one ratio, but would be near the top end of the range, creating a larger internal pay gap.
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