This is a system I could support.

This bill surpassed 1400 hits on the Occupy Eugene Oregon site today. It hasn't been up a month yet. And we are starting the discussion. We are very happy about this. And I am posting as many Occupy sites I can. Even if this never becomes a bill we need to discuss these real solutions, in economic community development.

Democratic economics is not socialism.The workers at Mondragon make equal salaries according to their services and time. They split the dividends every 15 years equaly. It is a capitalist system based on worker ownership and democratically controlled capitalism. This system we have now is failing. The financial institutions in the world have been bailed out by the taxpayer,the workers. Yet the M.C.C. is growing right now not failing. Mondragon has 120 different companies, 42,000 worker-owners, 43 schools, one college, does more than 4.8 billion dollars of business annually in manufacturing, services, retail and wholesale distribution, administers more than $5 billion in financial assets. In 1941, a bishop sent a young priest to teach in a vocational school in Spain's "Basque Country." In addition to the technical curriculum, young Father Jose Maria Arizmediarrieta taught the social doctrine of the Catholic Church to his students. Some of the students began a small cooperative that built kerosene stoves. In 1959, they started what we would today call a credit union. Today, the associated Mondragon Cooperatives manufacture automobile parts, electronic components, valves, taps, appliances. They have a full line of retail outlets (small & large) offering consumer products, food, appliances, and a wholesale food business catering to restaurants. Their bank has more than 100 branches, they offer a full range of insurance, and take care of their own social security and health insurance programs. They are not only holding their own within the "globalizing" economy, they are expanding.
This principle is an evident truth, the priority of labor over capital, that emerges thru the whole of man's history. This is one of the success stories of people who take social doctrine seriously, in particular, the teachings regarding (1) the dignity of the human person and his or her labor, (2) social solidarity, (3) the primacy of labor over capital. In most for profit businesses, labor is hired at the service of capital. For the Mondragon cooperatives, capital is something they rent to benefit the worker-owners.
To Americans, this sounds like an Employee Stock Ownership Plan, but the Mondragon model is not only about distribution of the profits, it is also about the control of the business. Management is elected by the workers, not hired by the money men, and the managers are part of the cooperative process in the enterprise. Each enterprise has a social committee that considers issues of health, safety, environment, and the social responsibilities of the enterprise. Capital is borrowed, stock is not sold for financing. All new employees become worker owners. A new cooperative begins with a group of friends. Experience in starting 120 businesses over a 40 year period has taught the Mondragon cooperators that the pre-existing bonds of friendship are a good basis for building a productive working relationship. The Mondragon association provides business and marketing research and assistance; their bank provides capital. The workers themselves must invest some of their own money, either as an upfront contribution or as deductions from wages paid over a 2 year period (about $5,000). Their bank sticks with the new co-op until they can go it alone; if the business gets into trouble, interest on their loans is waived, payments may be suspended, and parts of the loans may be forgiven. The group may be assisted into another line of business or work. As a result, since 1956, they have had only one total failure of a cooperative. Put that against the system we have in place today. Acorrding to the Mondragon history co-operation is more succesfull than competion.This system creates job security as well as capital security.

5500 hits at occupy eugene in Oregon http://occupyeugenemedia.org/discussion/viewforum.php?f=33

From the Company's Website: http://www.mcc.es/ENG.aspx (Frequently asked questions)

Corporation
1.
What is the basic structure of the MONDRAGON Corporation?
As a business association, MONDRAGON’s activity is structured into four areas - Finance, Industry, Distribution and Knowledge – which function separately within a group strategy, coordinated by the Corporate Centre.
The Finance area includes the activities of banking, social welfare and insurance. The Industry area consists of twelve Divisions specialising in the production of goods and services. The Distribution area includes commercial distribution and agro-food businesses, and the Knowledge area comprises Research Centres, a University with 4000 students and several Vocational Training and Education centres.
Each individual Cooperative is one of the building blocks in the organizational structure of MONDRAGON, with the Congress being the supreme body for joint expression and sovereignty, with its Steering Committee as the highest management and representative body, whose duties include the election of the CEO. Those Cooperatives that operate within the same business sector comprise a Sectorial Group, with this in turn being part of the corresponding Division.
Each Division is headed by a corporate Vice-president. The President of the General Council and the 14 Vice-Presidents, together with the Departmental Managers at the Corporate Centre make up MONDRAGON’s management bodies. The General Council is the body charged with drawing up, coordinating and applying corporate goals and strategies.
In turn, the Standing Committee of the Cooperative Congress is the governing body whose mandate is to oversee and drive the implementation of the policies and agreements adopted by the Congress itself, permanently monitoring MONDRAGON’s business development and the management performance of the General Council’s Presidency. The Committee has 19 members chosen in representation of the Corporation’s various Divisions.
The Cooperative Congress is the supreme expression of the sovereignty and representation of MONDRAGON, being the equivalent of a General Meeting. It consists of 650 delegates who represent all the member cooperatives and its decisions are binding for each and every one of them.

2.
What is the secret to the MONDRAGON Experience’s success?

3.
Has the MONDRAGON Co-operative Movement ever been linked to the State or the Public Administration?

4.
How many companies does MONDRAGON currently comprise and how many of them are not co-operatives?
We have a total of 256 companies and bodies, of which approximately half are co-operatives.

5.
How many of your employees are cooperative members and how many are not? What areas do the non-members usually work in?
By the end of 2008, the average number of employees at MONDRAGON was 92,773. 39.7% of these employees work in the Basque Country, 44.2% in other parts of Spain and 16.1% work abroad.
As a result of the rapid growth you have experienced over the last few years, with the number of employees going from 25,322 in 1992 to 92,773 in 2008, only somewhat less than a third of the Corporation’s workers are cooperative members at present. The non-members mainly work in the distribution sector outside the Basque Country and at the industrial plants that are also based outside the Basque Country, either in other parts of Spain or abroad.
This percentage of worker-members will have substantially increased in three years’ time, when Eroski has completed its cooperativisation process for all its non-member employees, who work mainly outside the Basque Country and Navarra. When this process is complete, the percentage of cooperative members in the Corporation as a whole could be over 75%.
Along these lines, Eroski already has a highly successful precedent. This involves a project introduced in 1998 whereby the firm Sociedad Gespa offered its non-member employees the possibility of sharing in the capital and management of their work centre. This is a formula for participation that has been taken up by the majority of non-member workers in the Eroski Group who have been offered this opportunity.

From the Company's Website: http://www.mcc.es/ENG.aspx

Business Strategy
1.
How do MONDRAGON Cooperatives access the capitals market?

By means of “Subordinated Financial Contributions”, which is an instrument provided for by the Cooperatives Act of the Basque Country and paves the way for accessing the capitals market through the so-called secondary market or AIAF fixed-income market. Eroski was the first one to use this instrument in June 2002.

It did so through the corresponding issue, which was approved beforehand by Eroski’s Congress and by Spain’s Securities and Investment Board (CNMV), initially amounting to 60 million euros, a figure that was subsequently raised to 90 million in view of the positive response made by investors.

The main features of this extremely successful issue were: interest indexed to the Euribor +3 points, fixed interest not linked to results, instruments favouring liquidity, security and guarantee assured by Eroski and the fact that the issue and subsequent development were submitted to the approval of the CNMV.

In July 2003, Eroski arranged a new “Subordinated Financial Contributions” issue amounting to 70 million euros, followed by a third in 2004 for 125 million euros, with similar terms to its two predecessors, that is, with an interest rate of the Euribor raised by three points.

For its part, another of our flagship Cooperatives - Fagor Electrodomésticos – likewise decided to access the capitals market in 2004, successfully launching an issue of “Subordinated Financial Contributions” to the tune of 60 million euros, doubling the issue initially planned of 30 million euros and generating a demand for these securities that tripled the offer available. It arranged a new issue in 2006 amounting to 125 million euros.

2.
How is MONDRAGON responding to globalisation and how are its factories abroad organised?
As mentioned earlier, one of the main assets of the MONDRAGON Cooperative Movement is its ability to adjust to change at any given moment in time. Faced with the phenomenon of globalisation, early in the 1990s Mondragón decided to step up its international presence, favouring not only the export business but also the deployment of production facilities abroad.
The results speak for themselves: we have gone from 25% of international sales achieved in the industrial area at the start of the 1990s to 58.2% in 2008, and we have 73 production plants in 16 different countries (see MONDRAGON worldwide), which brought in 23% of our total industrial production and 13,759 jobs (34% of the industrial area staff) in 2008. If we add to this figure the staff of our corporate and sales offices and the employees of Eroski’s shopping centres in the south of France, our international staff reached a total of 14,938 employees in 2008, which is 16.1% of the Corporation’s staff as a whole.
All our companies abroad are organised as Limited Companies. There are several reasons for this: most of the countries do not have the appropriate legislation of a cooperative nature that we have here; in many cases we incorporate these companies as a joint-venture with other partners and, thirdly, and this is perhaps the main reason, the setting-up of cooperatives requires cooperative members who are used to working within a cooperative culture, and this is a process that takes time.
At our Congress held in May 2003, the decision was taken to drive the creation of formulas that allow for the participation in ownership and management by employed workers that pursue their activities in our non-cooperative companies.

Some Video Reviews:
BBC Good Historical Overview (1979)


A "liberal" "progressive" perspective


Some Mondragon Official Videos on YouTube

From: http://www.solhaam.org/articles/mondra.html

OVERVIEW

Producer co-ops are owned by their members. Each member contributes to the co-op's capital when he becomes a member and individually owns a share of his co-op. His share is realised when he leaves or retires. Each member is an owner of the co-op.

The initial capital contributions from individual members and the co-op's profits which are retained by the co-op, are a cheap source of capital for the co-op.

The Spanish government provided a good deal of support, providing from 12.5 to 20 per cent of the capital required by a new co-operative, at a fixed low rate of interest. And there were tax concessions. Co-operatives paid no corporation tax for the first ten years, and half the standard rate after that. Further, the Mondragon co-operatives were protected from foreign competition by import controls.

Protected and subsidised by the state they were able to form and successfully develop the Mondragon group of co-operatives, and in the process 'gain a large share of the Spanish electrical appliance and machine tools market'.

By 1982, twenty-five years after starting the first co-operative, the Mondragon group of co-operatives consisted of 85 industrial, 6 agricultural and 14 housing co-operatives. The group was successful and had been making rapid progress.



Successful formation, successful operation and rapid expansion of co-operative enterprises was the result of
Rules of co-operation and association which they adopted right from the beginning.

Forming a bank for providing needed capital. Capital was provided in a way which prevented the bank or those who control capital from taking over co-ops to whom funds were lent.

Economic support and financial help from government.

The key mover at that time was the savings bank (Caja Laboral Popular). The consumer co-op (Eroski) is equally outstanding.

Key supporting co-ops at that time were an insurance co-op (Lagun-Aro) which provided social security and pensions, a medical and hospital services co-op, and a research and development co-op (Ikerlan).

And 43 schools and colleges were part of the group. Almost all seem to have joined the group during the previous five years. Presumably each school or college would be financially supported by industrial co-ops or the Caja (bank) and would have co-op members on its board of governors or control.

@abin22, Some of the Advantages of "producer cooperatives" in the style of Mandragon are outlined in the above posts. But questions have to be asked regarding their feasibility of application, universality of their application for systemic use, and their overall appropriateness for our time all related to the "underlying assumptions" / "point of reference or point of view" / "logic" / "ideology" according to Socratic Questioning method. For example,

1)What was the key to initial success and establishment of Mandragon, and how feasible is such a course practical for other similar initiatives in our current financial environment? Could any significant problems be overcome / if so how?

2)What is the fundamental problem with "producer cooperatives" like Mandragon that limits their effectiveness in addressing the critical problems associated with global capitalism? (i.e., What are the assumptions for their success / Are there any internal contradictions that would limit this?)
Hint: notice how vulnerable they have been to the instability of the global markets despite general outperformance over their traditional capitalist corporations counterparts.

Evolution in the different areas of the Corporation has been as follows: in Finance, the MONDRAGON companies ended the financial year on a successful note thanks to their measures for improving the companies' efficiency, despite the tough scenario affecting the sector; the Retail area made significant progress in reducing its bank debt, improved its internal efficiency and has placed its stakes in a strategy based on "the most competitive price" for its clients, all in a year characterised by low consumption; the Knowledge area continued to progress with the MONDRAGON Health project and advance in the creation of inter-cooperation platforms for promoting new business projects; and in the Industry area our increased presence on international markets has enabled business to improve while enabling employment to be created in industry. We would also stress that international sales have increased 13.3% with respect to last year, with international sales now representing 63% of the total and our business presence becoming consolidated on the European markets and those of emerging countries such as Brazil, China, Russia and India. This is from their website. During the failure of the world economic financial institutions Mondragons international sales grew 13%. Inh the 80's they survived the recession and actually grew.

@abin22, I am not questioning Mondragon's "business success" and even "superiority" (i.e., "profitability") compared to the traditional non-coop and more hierarchical business models. My issue is at what cost? i.e., internal and especially any unaccounted externalized costs. Specifically, I would appreciate your response to the above two questions.

If a child were to grow up like a fly on the wall in a generic corperate setting. to a family that was totally unaware of the alternate universe that their child was a privy to. it would only be a matter of time before the childs more predatory nature is quickly exploited and refined. taking over the childs thought processes making them do things they wouldnt normally do if they werent conditioned to behave otherwise. exhibiting the thought patterns not unlike that of a caged dog that would sooner go for the throat of a baby (which rarely ever happens), if it were forced to choose between taking out the weaker species in order to appease its abuser(s) or incurring the wrath of the violent and disappointed owner. before you care to realize the child is indistinguishable from an ordinary corporate desk jocky.
I would like to end this with a little side note:
perhaps the only thing that is truly retained and perpetuated from our high school years and on; the only thing that seems to be prevalent in nearly any (monetary) institution and the animal kingdom alike, are probably the cliques and the bullying. If a wolf is disowned by a pack it often dies unless another pack adopts him.
The first thing that should be addressed and nurtured in any developing mind is the attitude. before any politics can ever play an effective role in the actions and conscience of man, our attitudes have to change.