It has been a day full of values as I was taking part in the launch of a new research report in Westminster, which retells the extraordinary story of Mondragón and its network of co-operatives in the Basque country as a social innovation.
The event was in collaboration with the Young Foundation and Mondragón itself. The founder Father José María Arizmendiarrieta declared that justice can not be practiced where human dignity is ignored.
It was these values, of humanity at work, concluded the research team at the Young Foundation, led by ethnographer Dr Mary Hodgson, that underpinned an eco-system of innovation that is flourishing today – with 260 different companies and subsidiaries, with over 75,000 workers in 35 countries and annual revenues of 12 billion euros.
‘Social innovation’ as Mary characterised it, is best when it is ‘social in means and in ends’. She stressed that the ownership and democracy were essential ingredients in the continued success of Mondragón today as a social innovation.
The research demonstrates three key features:
- the economic and social benefits of worker ownership and control along co-operative lines
- the viability and value of co-operative entrepreneurship
- the huge positive impact worker ownership can have on values and cultures, and mission, within commercial businesses
In addition, it shows how worker co-operation can result in Swedish levels of equality, without Swedish levels of taxation (the Gini coefficient in the Basque region is as low as Sweden’s, but the tax burden is at the EU average).
Mondragón operates with salary ratios, from top to bottom, of no more than one to nine. This was on the day when the Business Select Committee has declared, on rocketing CEO pay in British business, well into the one to hundreds, that “we do not have confidence that progress will be made without further pressure being exerted”. Sadly the honourable Select Committee members overlooked the idea that if we have different forms of business ownership, we might get different behaviours.
In the launch questions today, people asked about challenges that had come up – such as the closure of one business under the Fagor label and the threat of automation. In every case, the response of Mondragón was helping to turn those challenges into opportunities to develop and to compete, in line with its values (redeploying, for example, two thousand workers from the closing co-op in other co-operatives in the nexus). Mondragon has demonstrated, and intends to demonstrate further, how decent work can be secured even as competitive pressures and technology change looks to disrupt and destroy work.
What was their advice for us here? Ibon Zugasti Gorostidi was clear – “build up inter-co-operation between co-operatives, to help make them more competitive and more successful.”
That is likely to be one of the key themes in the coming National Co-operative Development Strategy that we have been working on with members, for launch later this year.
We have also worked with the Young Foundation to develop a national policy agenda for the UK, that learns from the experience of co-operation in the Basque country. This includes our proposal for a Co-operative Entrepreneurs Programme to help entrepreneurial people coming together to own and control their own livelihoods through co-operatives and social enterprises. And a Worker Buyout Fund designed to address the growing challenge of business succession, not least as the option of foreign investment in domestic firms dries up in the context of Brexit.
Back to Father Arizmendiarrieta. Another of his sayings was that the idea is to institutionalize honesty. Better yet, he then went on to add, the idea is to institutionalize human greatness.