Mondragon Corporation
en.wikipedia.org
en.wikipedia.org
Here's a video of a presentation they gave on the format: https://agaric.coop/blog/show-and-tell-agaric-sharing-work-o...
The most exciting part is that they're now trying to share the model with tech worker co-ops abroad, and maybe even figure out how to build similar trust between international co-ops.
Disclaimer: I'm a member of a new tech worker co-op in Toronto, Canada (Hypha[3]), and have a big crush on FACTTIC.
[1]: https://facttic.org.ar/ [2]: https://facttic.org.ar/fit/ [3]: https://hypha.coop
An analogy I'm trying with friends is that a worker co-op is less like a company that does a specific thing, and more like a ship that sails where it's members wish it to go. It might present as a solid "WE ARE A COMPANY THAT DOES X", but it only does that so long as that serves its members. If the destination doesn't serve the crew, they create a new destination, they don't necessarily ditch crew members.
Also, the crew doesn't worry about the ship sailing away without them :)
"Take the most advanced case: Mondragon. It’s worker owned, it’s not worker managed, although the management does come from the workforce often, but it’s in a market system and they still exploit workers in South America, and they do things that are harmful to the society as a whole and they have no choice. If you’re in a system where you must make profit in order to survive, you're compelled to ignore negative externalities, effects on others."
“LF: So it sounds as if you might support something like the Cleveland model where the ownership of the company is actually held by members of the community as well as the workers…
NC: That’s a step forward but you also have to get beyond that to dismantle the system of production for profit rather than production for use. That means dismantling at least large parts of market systems. <<here this quote about Mondragon>>
Markets also have a very bad psychological effect. They drive people to a conception of themselves and society in which you’re only after your own good, not the good of others and that’s extremely harmful.
LF: Have you ever had a taste of a non market system — had a flash of optimism –– oh this is how we could live?
NC: A functioning family for example, and there are bigger groups, cooperatives are a case in point. It certainly can be done. The biggest I know is Mondragon but there are many in between and a lot more could be done.”
1 - https://www.counterpunch.org/2012/04/30/talking-with-chomsky...
Chomsky is smart, but not very useful because "In theory there's no difference between theory and practice, but in practice there is" - Yogi Berra
In general, his ideal end-goal world would include smaller states with more direct control by the populace, with worker-owned and worker-managed corporations, with free markets of goods and services between different corporations and different states, and of course freedom of movement. Strong environmental control would be almost implied if the people doing an economic activity were in charge of decisions and were also directly impacted by the effects of those decisions. Localizing and letting corporations be small would also put a natural cap on inequality, though democratically run states could impose additional safeguards where needed (minimum wages, estate taxes, non-discrimination clauses etc.)
I understand that workers also, at times, vote to externalize some costs, as their jobs may depend on it.
That's certainly not Anarchism, in which there are no states and no commercial corporations. And of course - no markets.
Now, as for what Chomsky supports personally - that's more difficult to say, since he's been known to support Democrats in US politics, to support a two-state arrangement in Palestine etc.
Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.
A free market, lacking counter-pressure to maximizing firm size, favors large firms, and large firms becoming larger is a positive feedback loop. Note that this is an idealized model and there's plenty of room for counter-pressure in reality (can the large firm actually pull demand away from the smaller firm, or does the smaller firm have a leg-up in e.g. customer relations that the larger firm can't compete with?).
How do you account for that?
I also strongly suspect that they're less present, on average, in unlisted companies.
You may be right that centralization is inevitable for game-theoretic reasons.
On the other hand, I'm not sure how well game theory can model the decisions of large groups of people who participate in multiple organizations at the same time.
Definitely though, there are no examples from history of a society of democratic societies and how it might behave. Perhaps the closest examples are the ancient Greek cities and post-WW2 Europe (looking only at the state level, democratic corporations have not been tried to any large extent that I know of). In both those cases, there was no spontaneous centralization from within (i.e. one entity conquering the others), though for Europe it is still very early to tell, and there are future signs which may point to more centralization.
There are multiple ways an anarchist society might respond to a corporation growing too large: convincing its workers to split or find work elsewhere to avoid economic collapse, seizing its assets and forcibly splitting or shuttering its operations, denying it use of supply chains, of debt if the market has currency, etc. a critical aspect of anarchist societies is lack of private property and capital.
Trade unions can hold much of the power; I can’t speak to the concepts of anarchist states. In fact the idea of anarchist currency (anarchy-capitalism or market socialism, I guess?) is something I am unfamiliar with, in part because it obscures the cost in man time and effort it takes to produce a good or service—rather easy too, just consider subscription services where you pay a flat rate, or the labor it takes to get you chocolate or coffee vs how much it is valued in terms of your wages (presumably in a post-industrialization service economy if you’re on this forum). Similarly I do not know what an anarchist state is.
Regardless, the idea is founded in large part on the concept of mutual aid. There is certainly plenty of research into how mutual aid tends towards or away from stability. A quick google search turns up this, for instance: https://halshs.archives-ouvertes.fr/halshs-00275386/document
I agree, but I believe a firm past a critical mass of size can defend against all of them, and defense breeds the resources for further defense.
> convincing its workers to split or find work elsewhere to avoid economic collapse
Unlikely if the firm's size lets it offer better life than alternatives
> seizing its assets and forcibly splitting or shuttering its operations
Hard if a firm's size grants it the ability to challenge monopoly on violence
> denying it use of supply chains, of debt if the market has currency, etc.
No longer possible if the firm is large enough to have vertical integration
How do you figure? This implies the compensation is different from other "firm"s.
> Hard if a firm's size grants it the ability to challenge monopoly on violence.
How do you figure? Monopoly typically implies private property.
> No longer possible if the firm is large enough to have vertical integration.
How do you figure? Monopoly typically implies private property.
Well the traditional linguistic connotations of possession certainly persist. Here "seize" simply means take control of.
To be clear, I'm criticizing the notion that small worker-owned / worker-managed corporations and a free market are an inherently stable structure (because free markets will favor consolidation). I'm not against large worker-owned / worker-managed corporations, and I think they could be a significant improvement on the ecosystem of shareholder-owned corps we find in the US.
As I see it, open source technology IS the great decentralized of power. We just need people to build Good open source software.
My personal passion (which I poured a lot of money into) was qbix.com and intercoin.org . That’s also why I reached out to Andrew Yang back in early 2018 when he announced running and met him in May 2018. We agreed my company would build https://yang2020.app to support his campaign, and he would help introduce us to mayors of cities that want UBI locally (he knew a few dozen, like Michael Tubbs of Stockton, although since then Michael has not been a fan of Yang’s approach for various reasons).
I believe in UBI + Gift Economies / Collaboration as the best system, better than socialism or capitalism. But we have a while to get there.
Yang is trying to boil the ocean by going for UBI on a national level. I believe the future is in decentralization, and I talk about it extensively. I think UBI can be done via cryptocurrency on a local level. We can also do voting this way. I’m writing a piece about this at the moment, very apropos of the recent fiascos.
Printers, Email, Blogs, the Internet have replaced large corporate and state gatekeepers we used to have (newspapers, cable channels, telephone companies, printing presses etc) and costs went down to near zero. Technology decentralizes power.
We can have towns and cities run decentralized:
Solar power networks (resilient to EMPs and carrington events)
Mesh networks (better than cellphone networks)
Social networks (chat, events, appointments, everything that fb does but w local servers)
I’m trying to build the software to run on these networks (https://m.youtube.com/watch?v=pZ1O_gmPneI)
PS: sorry for all the links but honestly I am passionate about this stuff and need to illustrate it instead of talking. A video is worth a thousand words. To mitigate the shilling I will say that TimBL’s solid and MaidSAFE * IPFS and others are also working on decentralizing power
I would have agreed with that statement at one time. Now I'd qualify it to read "Technology can decentralize power." Unfortunately, it can also do the opposite. I'm at a point now where I'm torn on the question of whether or not technology inherently tends one way or the other. But in either case, I'm now convinced that human nature is much more a factor in the centralization / decentralization of power than technology.
In that system, there are no stock holders demanding ever greater returns, those doing the work are always completely in control. They can choose to do "just enough" to live a good life. Or they can choose to focus on the more fulfilling aspects of their work, and not on the profit.
In that system, it's easier to pass regulations that prevent the worker cooperatives from externalizing, because the survival pressures aren't nearly as intense.
But it's not top-down centrally managed.
Enforced by a central top-down bureaucratic organization.
In this hypothetical world would you let foreign companies motivated by profit compete in your country that only has worker co-ops? Or would you have a closed down market, similar to North Korea that only Approved Co-ops would be allowed to work in?
Under your standard, all regulation is "top down bureaucratic driven". In practice this has not proven to be incompatible with market driven economics. Not that libertarians don't scream about it anyway.
This is the same thing, just a different shape.
The comment you selectively quoted ends with "But it's not top-down centrally managed.".
A complex interconnected system will adapt in unforeseeable ways, causing novel externalities for which we have no built up immunity. Ask a soviet.
We can pursue self-organization that pursues escape from the pathological patterns of profit driven production without advocating for, striving for, or tolerating a totalitarian, bureaucratic nightmare. See, e.g., https://thenextsystem.org/start-with-worker-self-directed-en...
I think this is a bit simplistic or at least too optimistic. The pressures of being listed on the stock market are such that management is more or less compelled to pursue short-term goals.
Indeed in the very long run a lot of corporations are harming themselves by harming the environment, impeding innovation etc. but in the short run firing people, cutting R&D budgets, digging up more coal, oil etc. can be very effective. And shareholders really only care about what your profits are gonna be in the next few quarters, not so much about what's gonna happen decades down the line.
Now, here's an interesting thing to consider. You bring up coal and oil - both industries that are on the way out in the long term. Would it be wise for shareholders to push these companies to invest in R&D to improve their long-term capabilities? No, if coal and oil are on the way out, then the best financial strategy would be to run the companies into the ground as you slowly liquidate them, ideally so that there's nothing left on the very day that fossil fuels are no longer needed. In that case, short-termism is the best strategy.
All in all, putting lives at risk was a good move for Boeing, and they'll surely do it again.
In any case, such judgement is only clear in hindsight (that is, calculating effectiveness implies a time window over which effects are to be tabulated).
Most charitably, the executives perhaps felt they were making judicious, acceptable tradeoffs that would maximize business outcomes over the time horizon they were concerned with - periods measured in quarters or years or even decades.
How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window? What happens when a black swan occurs and significantly drives down the effectiveness of prior decisions (which until then had been deemed quite effective)? Are profits clawed back?
If the judgment was really only clear in hindsight then no power structure could have altered it. What's clear only in hindsight to a CEO is clear only in hindsight to a union boss, or a collective, anyone else.
>How would we incentivize people to only take profits over an arbitrarily long (and ever-widening) window?
The corporation is already incentivized: in exchange for thinking about long-term profits, it is rewarded with long-term profits. However, executives often have different goals than the corporation they're supposed to represent. If you could figure out how to better align the interests of executives with their corporations, you would see more effective profit-seeking, which would include less killing due to blunders but more killing due to tobacco-industry style exploitation. Giving executives the freedom to put their own interests first (the source of next-quarterism and next-bonusism) is necessary if you want to give them the freedom to pursue ethical goals. You either trust them to make the right decisions or you don't.
>Are profits clawed back?
Yes! That's what happens when something causes you to lose money.
Shareholders?
> If you want to start a non-profit aerospace company, nobody is stopping you.
Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
The system doesn't force anyone to make a profit. If you borrow capital from people, your investors may demand a profit. But that's between you and your investors. Nobody is forcing you to take investment or sell equity in your company on the public markets.
> Yeah, just found an aerospace company. You don't need anything beyond hard-work and a can-do attitude. Definitely don't need decades worth of relationships, unimaginable capital, or readily hirable talent. You just gotta believe in yourself.
My point is to contrast a system where everyone is forced to be a non-profit or co-op (@jp555's hypothetical), and our system, where you are free to be a non-profit or co-op, if you want to. If you can't raise capital or hire top-notch employees under that structure, then that's a problem with the non-profit/co-op organization, not a shortcoming of our economic system.
If you want to just completely change the conversation, and hyperfocus on the individual, then you're free to do so, but I don't want to be brought along for the ride. You responded to a comment concerning Boeing, not some fresh-faced up-and-comer of your own creation.
In practice, powerful corporations have enough influence over the government that regulating them in that manner isn't possible without flipping the whole system on its head (i.e. removing the profit motive that drives monopolization and cost externalization).
Penalizing the behavior sounds like a top-down solution to me. Government decides it's bad, then government sends the police to come get you if you do it.
I dump some chromium waste on my property, pretty soon this "government" is saying it's bad and sending police to come get me saying that "the green goo is making people sick". I hate that top-down big gubmint telling me what I can and can't do!
I refuse to employ black people, pretty soon there's a top-down big gubmint telling me that's "discriminatory" and "violates labor laws"! What's next, telling a man what he can and can't do with his own business!?
Yes. Regulation from a central source of authority is what a top-down model is. I'm not sure what your contention is here.
"I don't like Erik Satie or any of that stuffy, high falutin' classical stuff."
In both cases, the writer is unwittingly saying very little about the subject and very much about their ignorance.
Governments on the other hand have a monopoly on violence, so I am more wary of handing them power over the choices I can make in my life.
https://en.wikipedia.org/wiki/Battle_of_Blair_Mountain#Battl...
If you're in another country working for a U.S. corp you're in much worse shape. Coca-Cola can murder you for forming a union in another country and get away with it!
In both cases, borders matter.
If you really want to judge him on his real-world solutions, then take at look at Michael Albert's Participatory economics that he's been supporting for a while : https://en.wikipedia.org/wiki/Participatory_economics
But according to me, what Chomsky lacks in his analysis is some hegelian stuff, so I'd recommend to go further and dig some Slavoj Zizek and Deleuze and so on..
I mean that I find him too theoretical - His thinking is all very smart and appealing but useless in practice.
Fake easy-solutions are good to make you feel better before work, but it prevents you from going into deep thinking from which real solutions may emerge.
Wages don't always capture the true costs of production. The public burden of the coal miner who gets lung cancer can be viewed as a negative externality.
Indeed, many labor protections in the US seek to specifically address this type of externality.
This is my point. Ignoring concerns of worker exploitation and focusing on textbook definitions comes off as dismissive, even if that wasn't the intent.
Similarly, your comment comes off as dismissive which highlights the importance of the context that I added.
Worker exploitation does result in negative externalities, even if the exploitation itself is not an externality.
Worker exploitation does result in negative externalities, even if the exploitation itself is not an externality.
I don't understand why would anyone think that it can. This is not just my opinion but an opinion of famous capitalists (for example Buffett or Soros).
Free-market evangelists tend to strongly favor the property rights solution. But one of the interesting things about the property rights case is that it seems to fall apart when both the responsibility and cost are diffuse. Probably the best example would be climate change. It's impossible to address with property rights because there would be so many plaintiffs and so many defendants that attributing who did what would be impossible. Climate change is the ultimate externality.
It's all kind of insane.
True.
> That's what the government is for.
False. Government can't solve the problem of externalities either, because government is even more at the mercy of the perverse incentives that create them than free market participants are.
There is no "solution" to the problem of externalities, if by "solution" you mean some system we can put in place that will magically prevent them from happening or from doing harm. The only way to deal with externalities in general is to remove them wherever possible, by enforcing property rights and minimizing transaction costs.
Do you enjoy the the benefits of the Clean Water Act and the Clean Air Act?
In your view, does government at least partially solve the problem of some negative externalities?
(Based on your bio, I assume you're in the US.)
I like having clean water and clean air. That's why I have air filters in my house and don't drink tap water.
> does government at least partially solve the problem of some negative externalities?
Government can certainly change incentives in ways that will, at least temporarily, reduce particular negative externalities. But to say that "solves the problem" implies that, once that particular government solution is put in place, we can stop worrying about that particular negative externality and move on to ther things. I do not think that is the case.
I'll assume this is a joke.
> we can stop worrying about that particular negative externality
I'm not sure who said this. In any case, we're all in agreement that the government plays a key role in addressing negative externalities.
It's not.
> I'm not sure who said this.
I'm not sure what "solved" means if you still have to keep worrying about the negative externality.
> we're all in agreement that the government plays a key role in addressing negative externalities.
I don't think our agreement is as broad as you seem to think it is.
I've been enjoying this quote for a week:
"If you think the economy is more important than the environment, try holding your breath while counting your money. - Guy McPherson"
Only a distributed system like capitalism rises to your bar of "magically prevent[ing]". Centralization is not magic, but when it works, it works. I prefer distributed systems too, but when it's hard to make the right incentivizes, we shouldn't throw in the towel.
Surely the parent post doesn't use a definition of "solution" that trivially invalidates their point. I think you are projecting your own preference for distributed systems as an inevitability.
In fact, I've thought of a "'race to the top' tariffs" system, which does at least create the right incentives between nations. If you are big market (e.g. US) put tariff on the difference between the manufacturing country's externalizes tax, and your own. This holds the total punitive disincentive constant, no matter who receives the revenue. The exporting country is now incentivized to raise their externalities tax so the tax revenue goes to them rather than the importing country. So simple!!
How is capitalism a distributed system? It concentrates capital in the hands of a small minority.
A free market is a distributed system, but "free market" is not a synonym for "capitalism".
> Centralization is not magic, but when it works, it works.
I guess we have very different definitions of "works".
There is a lot I'm unaware of, possibly market systems without prices is one of those things?
Even under a barter system, there is an intrinsic profit. If you're a farmer, after you feed your family, what's leftover is the surplus (i.e. profit) that you use to trade for other essentials. The difference that matters between a currency system and a barter system is that bartering is less flexible (if someone doesn't want your apples for their furniture, you're not getting that furniture) - but the same forces apply.
So like when Bezos makes $4M+ per hour, it's not a wage because he is not working for it, he could be sleeping or shitting and he would make the same money. He gets that just because it's his name on all of the capital that generates this profit. The actual work is being done by the many people working for amazon, peeing in bottles in fulfillment centres because of lack of breaks and whatnot. They get paid very little, so there are low costs, so there is great profit to line Bezos' pockets.
Since co-ops like Mondragon need to compete with companies that are run like Bezos' in order to survive, they are under pressure to do similar things in their management structure, even though they want to share all "profit" with all workers, since all workers are owners (which is why it's not really "profit" for co-ops, since there are no non-working capitalists that earn it). Therefore, it is the profit motive, rather than the market system, which forces co-ops to act in ways that are inconsistent with their mission statements (worker control, fair pay, etc.)
No. That is a dishonest distortion.
If providing and owning capital is such a nothing, why don't you try it and see how easy it is. Capitalization carries with it immense risk, which Communists conveniently ignore. Whereas the labourer gets a salary regardless of how the business performs, the one who capitalizes does not have this privilege. I've seen first hand how much work and how difficult it is to start and run a business. You only need to look at bankruptcy stats to see how many businesses fail and take down all the capital that was invested. It's not very pleasant to run a business, sink your life savings into it, only for it to go under with your savings and years of life.
>So like when Bezos makes $4M+ per hour,
That is another dishonest distortion.
Bezos does not make $4M+ per hour. He holds stock in Amazon that rises in value at that rate (Amazon's actual profit is on the order of 2% after close to two decades of 0 profit). The value of stocks stems from the fact that there are people who are willing to buy it at that price. This carries risk, because this willingness by others to buy the stock is subject to many factors, and it can go down to zero. Again, if you think it's easy, feel free to dump your savings into Amazon stock and see how easy it is for you to live of that or even make a good return - though I'm sure in your fictitious communist reality this would mean you would make millions without doing anything!
Why does a price necessarily include a profit or a loss? This is a self-referential belief: my price includes a profit or loss because a prior price includes a profit or loss which would earlier ... etc, etc.
It includes a profit or a loss because you need to eat and provide for yourself. If you're making chairs but the cost of materials is larger than what you sell those chairs for, how are you going to provide for your family? If you want to save up for a house or a car, or family vacation, how are you going to do that if you don't sell your chairs with a surplus (i.e. a profit)? A market-based system necessarily implies a profit motive.
This is the "self-referential" thing I was referring to. You're entering into this thought experiment with a pre-defined conception of how an economic mode of production must operate. You're presupposing the profit motive.
The one that comes to mind is Communism (and its many flavours), and we've seen what a humanitarian and economic disaster that turns out to be.
Look into libertarian socialism if you're actually interested.
Also, there are real-world examples of libertarian socialism, like the Zapatistas and Rojova. Not ideologically pure, no, but certainly not authoritarian shitholes or capitalist dystopias.
"Motion Twin is run as an anarcho-syndicalist workers cooperative with equal salary and decision-making power between its members."
Also, this is where the Haxe programming language was created.
Spawning more small cooperatives when faced with financial success is a pretty nice alternative to a traditional growth strategy.
That's a lot more boring then.
On that subject, Haxe has been interesting me more and more lately. Does anyone have any thoughts on it they care to share?
I co-founded one, Sassafras Tech Collective, in Ann Arbor. It's been an amazing journey. I don't think I could ever go back to working in a non-democratic workplace.
So you sold it, eh?
It's not co-ops that distort the value of the firm, it's that permanent ownership necessitates complicated and opinionated financial/statistical reasoning to put a number on what is fundamentally a weird social relation.
;-)
> I don't think I could ever go back to working in a non-democratic workplace.
I would love to read a bit more about that sometime.
Furthermore, it's not clear that "seniority" would trump "skill" in a co-op, either. Or that the opposite is true of a more "traditional" workplace.
The job of each worker-owner is, in part, to help other worker owners developer their strengths to their fullest for the benefit of co-op.
An employee-owned co-operative corporation (EOCC) governs as form of direct democracy. In my experience, your biggest obstacle is going to be collective decision-making. How well you do that is a test of the people in the co-op. Consider: management is just another skill, not a rank. You don't have a boss. You have people who are counting on you. Management serves at the pleasure of the worker-owners.
Unless everyone can make equally large payments on behalf of the company, you most certainly have bosses.
Find those people. They are the bosses. Everything else is theatre.
- relevant prior experience (before joining the coop) - longevity (aka seniority) - dependent care responsibilities - membership (a small raise once you become a member)
The prior experience piece is determined with a points system, designed to take as much of the self-advocacy (with all of its race/gender/class pitfalls) out of the process as possible.
The system also includes annual cost of living adjustments.
greetings from a worker that work at Ikerlan (a research/technological center part of the corporation). We are a second degree cooperative. Formed by workers and companies that we work for. You can see things that we do at https://www.ikerlan.es/en/
Happy to answer to questions if I can :)
I've just started a worker coop last year with some colleagues. We serve for-profit traditional businesses in the cannabis industry, helping them build data and analytics capabilities.
I've wanted to do something like your "second degree" approach, with the goal of creating closer relationships to help guarantee a sustainable long-term lifestyle business.
Do you think you could have gone the "second degree" route if you had served for-profit clients? How did early conversations about this ownership model unfold?
Do you have any advice for others who want to follow your model?
Can new customer-owners join? How does that work with existing customer-owners?
Thank you! Much respect.
Moreover, we also offer always the possibility to do a PhD in different domains. (power converters, batteries, embedded electronics, safety critical systems, wireless technologies, IoT , AI, etc). In my team we have 4 PhD students right now in collaboration with different universities.
You do pass the ALL Rochdale principals?
They work in open source projects and are big contributors to Chromium/blink, WebKit, V8, Vulkan, etc...
At Mondragon, there are agreed-upon wage ratios
between executive work and field or factory work
which earns a minimum wage. These ratios range
from 3:1 to 9:1 in different cooperatives and
average 5:1. That is, the general manager of an
average Mondragon cooperative earns no more than
5 times as much as the theoretical minimum wage
paid in their cooperative. For most workers, this
ratio is smaller because there are few Mondragon
worker-owners that earn minimum wages, because
most jobs are somewhat specialized and are
classified at higher wage levels. The wage ratio
of a cooperative is decided periodically by its
worker-owners through a democratic vote.
edit: added "worker" to "coop" (as I'm not interested in non-worker coops)
So maybe there is a study to be done about what could be the optimum wage ratio that allows a company to attract top talent for management positions and at the same time is not perceived as injust and exploitative by the lower workers.
A weak CEO with strong people beneath him can still very much succeed, but the best CEO in the world won't help a company with otherwise sub-par employees.
And it's not just hiring: a company where people are not financially punished for sticking to what they are best at can have a huge advantage over a competitor ravaged by the Peter Principle because that's the only way to get a party of the pie.
They brought in the "White Revolution" making India the largest milk producer in the world!
I mean, kind of? idk if India has the concept of a worker's cooperative company but this is not super far away from it
> It is important to note that Amul Federation passes on 80-85% of consumer rupee back to milk producer members thus encouraging them to produce more milk.
https://amul.com/files/pdf/GCMMF-sales-Turnover-2017-18-0104...
It matters because it validates that cooperatives can grow very large, and refutes the claims such as "yes it's nice, but of course it works only for small ventures and could never grow)
On the other hand, you have a business that generates a decent largely passive income that lets the owner take lots of time off and basically not work any harder than they want to.
I consider the latter a lot more lifestyle-businessy than the former.
And this isn't heartless, capitalist efficiency, sometimes there's a large environmental cost to distributing work across a population, like if everyone dumps a little bit of waste into the sewer because it's too expensive to treat (or burns their own coal for cooking), where a much larger entity has the efficiencies to treat the waste properly (or generate electricity much more cleanly) and the government can actually monitor the single entity.
Additionally, a lot of things are only affordable to most people because they are mass produced. There's a very good argument that a lot things that are produced are just utterly unnecessary, but that doesn't invalidate the point that some very necessary things are only affordable to the poor because they are made by the million.
> At Mondragon, there are agreed-upon wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns no more than 5 times as much as the theoretical minimum wage paid in their cooperative. For most workers, this ratio is smaller because there are few Mondragon worker-owners that earn minimum wages, because most jobs are somewhat specialized and are classified at higher wage levels. The wage ratio of a cooperative is decided periodically by its worker-owners through a democratic vote.
There is a tech-aligned version of the worker co-op called a platform co-op, with some examples at https://en.wikipedia.org/wiki/Platform_cooperative#Examples .
The Main Uk coop is both a worker and consumer coop.
John Lewis is a bit of an edge case is sort of a worker coop its doesn't call its self a coop for branding purposes and its governance has some diferesnce form what a real worker coop does.
My work was on some "business simulators" for a management course they were preparing.You would first pick what kind of response you'd like from your employees or clients (i.e. "passion" - they would consider their project worthwhile, back the vision, realize that people are key... ) and then you'd be able to control 15 management parameters (like job security, management transparency, salary range, leadership style, training... ) then you'd see a chart with the output and even see "thoughts" that your employees would probably have.
There's nothing special about the region or the culture, if you artificially favor a certain type of business structure then you will get more it. Mondragon is a classic case of incentives at work.
The other benfit they had was the isolation of the Basque region in Spain during the 1950s. They weren't served by railroads and the region itself is quite mountainous, so for regular people they tended to be the only game in town. In fact, their slogan at the time was "savings or suitcases". In other places credit unions would compete with each other so you couldn't establish a dominant position in the way that Caja Laboral did. Liberalization of the banking industry in Spain during the 1970s tended to level the playing field further. So you have the right mixture for a single dominant cooperative in Mondragon.
I did a small slideshow/presentation for those interested: https://docs.google.com/presentation/d/1EFgwKNLgRgQQf8Kv236_...
As I know the general objective is to be around 60-70%.
If you are a retail operating in Spain both rental and energy are the key factors that might take you out of business.
Just having a way to 'detect' your energy consumption is going to peak and act before it happens is a huge competitive advantage.
For instance, knowing X% your fridges at a location might have a problem and beign able to either cancel/reroute orders in transit is a huge improvement on the P&L.
But you work there so you probably know better
Here are some positive links about Eroski from spanish newpapers.
- https://cincodias.elpais.com/cincodias/2019/05/23/companias/...
- https://www.larazon.es/economia/eroski-cierra-2018-con-benef...
That excludes the other areas (Finance, Retail and Knowledge) and the non-coop companies in the Industry area.
Especially in places like Seattle and San Francisco, where there are strong lefty communities. I wonder if we'll see the folks who get frustrated with the policies of Google/Amazon/etc splinter off to form coops.
My partners of the consultancy we founded last year decided to go this route. There aren't many great local examples to learn from so we're kind of figuring it out as we go. Obviously B2B tech/software/consulting is very different than for example Arizmendi, a local cooperative bakery.
If anyone else is interested or involved in coops in the Bay Area, please let me know and I'd be happy to meet up.
But I think it's because of risk -- leaving a FAANG to found a tech coop is a risk. Why give up $400k/year for a moonshot?
Democracy at Work Institute: https://institute.coop/
https://www.legalnature.com/guides/top-states-for-incorporat...
Related to that, is there something to be said for basing a cooperative/corporation in your home city/state specifically to bring in tax income for schools, infrastructure, police, firefighters, etc? What about nonprofit corporations, is this a nonissue for them?
In Boise, ID (where I live), HP and Micron/Crucial have enjoyed tax breaks for years as an incentive to be based here. But people have speculated that those breaks made it harder for other tech companies to compete here, because their tax burden lowered the wages they could offer. That may have set back the startup scene here for many years. It also potentially raises residential property taxes since someone has to pay for those incentives, and that's become a major issue as more people move here.
I worked at HP for a year as a contractor 15 years ago and it was wonderful, so I'm not disparaging them. I'm just curious to see what others think of this issue.
https://purpose-economy.org/en/
They have a lot of interesting materials and case studies (Bosch, Zeiss and others).
Basically you can form an LLC the majority of which will be owned by the employees and will also guarantee that the company can never be acquired. There are a few schemes that can attract investments on special fixed terms, such as redeemable shares with 3x return.
This type of companies live much longer on average, according to some studies, and are also more stable and less prone to economic crises.
Anyway, fascinating stuff. I'm seriously considering steward ownership for my next company now.
eg abc.coop may 100% own abc.com, the employees of abc.com will be members of abc.coop
During the due diligence we saw the high level of political corruption, and terrorism financing Mondragon was involved in. Very distrubing. Once we saw this, we stopped looking at the acquisition.
So a lot of companies paid. Even if they had no sympathy for the criminals.
But there were other companies that didn't need much "convincing". Was this one of that kind? I have no idea.
Edit: oh, these are the owners of Eroski. I remember they were in the news a long time ago exactly for that. I don't remember how the trial ended, but some guy was definitely charged.
The Mondragon Group already had some history of financing terrorism(1), but we didn't know affiliates outside the Basque Country could be involved. Ecotecnia was based in Barcelona.
(1): http://www.interior.gob.es/noticias/detalle/-/journal_conten...
Caja Laboral was not involved and they even fired that worker sortly after his detention (next day). [2]
I fail to see how that link proofs that the "Mondragon Group already had some historry of financing terrorism".
[1]https://www.lavanguardia.com/politica/20020531/51262755730/l...
[2]https://www.lavanguardia.com/politica/20020530/51262755722/c...
Come on dude, is this really necessary in HN? Don't you think you're stretching it a bit?
In the past this included ETA which was a separatist terrorist group from the Basque region. https://en.m.wikipedia.org/wiki/ETA_(separatist_group)
ETA was most definitely a terrorist group, infamously known worldwide for their use of car bombs.
It should also be mentioned that the UN had said that the Spanish occupation of the Basque region violated human rights.
Again, I assumed that you are a conservative or libertarian. I apologise. I'm sorry that I just assumed you were a right winger.
After doing some cursory googling, it looks like you were probably referring to the ETA. I would like to hear more about the terrorism and corruption, if you feel like going into it.
I have to admit, though, as an investor you and I see the world very very differently. If you don't mind me disagreeing with you I will try not to make any more assumptions.
All I can tell you is that our legal/compliance team did reach out to authorities.
As you can imagine, I won't entertain your ideology discussion when I'm refering to facts.
You make a claim like "Mondragon invests in terrorism" and you had better back that up.
> The path to becoming a member of one of the cooperatives begins much like any other employment relationship – a position must be available, and the individual needs to be the right person for the job, as well as pre-disposed to cooperation. Once that is established, the worker is hired into a six-month contract as a temporary employee, much like the provisional period for many employees in a conventional enterprise.
> Depending on the proven suitability of the employee for the job and the availability of long-term work in the company, a good employee may be proposed for membership, or in cases where long-term work is not yet available, offered a renewed contract (for no more than three years). In some cases, “unsuitable” workers, who just don’t work out, may be asked to leave.
> Once membership is mutually accepted, the worker has 36 months to contribute his or her initial capital share of €15,000 , which represents the system’s minimum annual salary. This can be amortized through salary deductions, or in some cases borrowed from a bank as “capital to work.”
> At any given time at least 80% of the workers of any Mondragon cooperative must be full-fledged members.
That all seems fair. I wonder how many people are put off by the 15k buy in? That's about 500 euros a month for 2.5 years. That's a lot for many workers imho. I wonder if its tax deductable...
The quality isn't great, though.
This generates an environment that allows for certain things to happen. One is an area less prone to economic recessions, with higher wage equality and a more egalitarian and humanistic approach to business. On the negative side though there is an insidious xenophobia that permeates the area. Essentially a lot of the ads they run (for example for their supermarket brand Eroski) do so on a platform of "its better because its basque". Like basque cows, basque cheese etc. Many of our companies brag about "we only hire local people", so music festivals for example have all the staff hired locally rather than having an open hiring process or allowing bands to bring their staff.
This is a bit of a double edged sword where we are creating a bit of a local maximum for the basque country economy at the expense of a worse average for everyone else (assuming market conditions can create Nash equilibriums). Now I do believe Mondragon has done some fantastic stuff, but they are not without a fault and they also exist thanks to an environment that allows such conditions to exist and do the work they do.
I also really doubt what you explain is universally applicable as it looks to be a very large corporation anyway.
There are tons of objective reasons to promote local products, we have incredible soil and weather, we have a historical tradition of shepherding and sea faring. But none of that is promoted, its the "its from here" with vague connotations.
It is a large corporation that has had a huge trouble expanding outside the local area of influence. Eroski has been a huge supermarket in the basque country for decades and has never hold more than a minimun influence in spain (despite other supermaket chains like Mercadona appearing much later and now dominating the country). Fagor grew steadily to 5,600 employees and then went bankrupt leaving all but 700 unemployed when a company from elsewhere bought the remains. The university has 4 thousand students and most are basque.
They are massive but they are massive because they have a huge influence on a very rich part of spain
Everyone knows that "buying local" is about supporting local jobs/industry. There's nothing xenophobic about caring more about your neighbors than some people you'll never meet thousands of miles away.
If it is to be a meaningful term, xenophobia has to be about fear or hatred. It can't mean "favoring local over non-local".
I.e. a supermarket advertising "it's from here" produce is not xenophobic. From my experience, Spain is actually one of the countries in Europe where it is extremely hard to find local produce. Almost everywhere else I can find specific aisle for "it's from here stuff" and again I fail to see why that would be xenophobic. At least I always prefer to buy from there since it's usually more reasonable ecologically-wise.
Perhaps it is not xenophobic, but it definitely is populist nationalistic retoric based on in-group/out-group dichotomy.
The fact that nationalists of every country do that is no excuse.
Not always true. https://www.theguardian.com/environment/2008/mar/23/food.eth...
I'd also argue that lots of relatively limited local maxima where everyone is happy and materially comfortable is a million times better than centralised hell of capitalism as it stands. Limited maybe, but most people won't approach the ceiling in more dynamic places. It's the greatest good for the greatest number.
Edit: Downvoters should read about distributism.
Distributism is not Catholic doctrine. It's a third-way economic system that is compatible with Catholic social teaching, and several influential Catholic figures, such as G.K. Chesterton, helped promulgate it. But you don't have to be Catholic to be a distributist, and you can be a Catholic without being a distributist.
Distributism is just a great idea that everybody should support.
Motto is: "Born in Spain, admired through the world" (that is an official Spanish government site, for the record"
edit: site motto translated.
In regards to game theory, the outcomes of this particular game may even be more optimal given that the set of actions is more constrained and the strategies are better known.
> At the end of 2014, it employed 74,117 people... > By 2015, 74,335 people were employed
So the increase of 0.29% over a brief although somewhat ambiguous period of time is supposed to tell me what?
Given the size of the company, I imagine this data exists in a tabular format and someone was just converting to a (maybe imperfect) natural language representation of the data.
What's so interesting about b2b cooperatives? Recently we have seen the rise of market/directory platforms in fields where the network effect is so strong that it's impossible to sustain real competition for long and once they are effectively monopolistic they can squeeze entire industries dry at will, degenerating into pure rent seeking. Poster child example: there cannot be a second booking.com, the closest they have to competition is airbnb.
A buyer cooperative with the explicitly defined mission to just run the platform at low cost would be the perfect antidote and a massive improvement for everybody in the buying sector (those that purchase directory listings) and their customer base. It wouldn't even be an impediment to innovation because frontends could still be a multitude of conventional for-profits, they'd just not compete in listing breadth (they'd all get the same offers from the coop backend). Works roughly like that in the airline industries, despite multiple competing backends. The big difference: those backends are (were?) owned by airlines, not by outsiders trying to maximise value extraction.
Real socialism is:
Mitchell Lama Housing Cooperatives
Food Cooperatives
Credit Unions
Employee Owned Companies
I define socialism as collective ownership of the means of production. By that broad definition, the public stock market — a quintessentially capitalist institution — would also be socialist, since corporations own most of the means of production in this country. So the definition needs to be refined a la Richard Wolff ... namely, DEMOCRACY inside an institution is socialism. One person - one vote. The extreme opposite of that is one share one vote where one person has so many shares that whatever he says goes:
https://medium.com/swlh/facebook-investors-cant-remove-mark-...
All of us who run a startup probably begin in a capitalist structure, but could be encouraged to transition to a socialist structure by giving employees more voting power once the business is thriving:
1. https://amp.ft.com/content/8a70b692-0967-11ea-b2d6-9bf4d1957...
2. https://www.hrcapitalist.com/2020/02/cards-against-humanity-...
I specifically thought to choose the domain “hrcapitalist” for their comments on this move to socialism:
”Cards of Humanity is doing an acquihire with a twist with this acquisition - they found a troubled company for sale, and believed in the talent that existed. BUT - this form of acquihire transfers wealth to the talent not directly to their bank account, but by giving them ownership in the company. That's a powerful retention tool, and if for some reason they can't make it work, the talent is sure to remember that Cards gave them a chance to save the company and turn it around through their investment and subsequent transfer of ownership. Moving acquired talent to ownership positions is a powerful play.”
This is what capitalists had to say about a move to socialism in this case.
I would argue that socialist institutions (much different than state-capitalism or its near-synonym: state-socialism) are preferred to capitalist ones, in the marketplace.
People form lines around the block stretching for years to get into the Mitchell Lama housing cooperatives in NYC. They have far lower costs than landlord-owned buildings, and yet the same level of facilities or better. They are effectively nonprofits, because they are run by and for the cooperators. Few vacancies because many people don’t want to leave, unlike the high turnover and 12%+ vacancy rate in privately owned buildings. I suspect credit unions vs banks are similar.
Workers in a company would not vote to ship their own jobs overseas or do massive layoffs.
So do I advocate libertarian socialism? Yes. I want to see more institutions be democratically governed, like many universities are close to it, etc.
Note: SOCIALISM is different than SOCIAL DEMOCRACY which is typically done on a city or state level to tax capitalist organizations and give public services and universal safety nets to everyone.
However, socialism isn’t a panacea. Newcomers are still hazed and treated just like countries treat peniless immigrants. So we need social democracy too. Perhaps one day social democracy will take place on a global level. (We are working on that at intercoin.org)
Finally... I should say there are better systems than socialism and capitalism, that involve UBI AND COLLABORATION rather than HUNGER AND COMPETITION. They are primarily gift economies found in the information space, and include:
Science
Open Source Software
Wikipedia
The Web
Cryptocurrency (as it was originally intended, ie scalable tech not the monolithic blockchain crap) was going to let the network be owned by participants and even VCs loved it for a hot second until the non scalability killed it (we’re working on that too).
Wikipedia vs Britannica
Web vs AOL
Science vs Private Alchemy
WebKit vs IE
You get the idea. Who wins? Hint: not the capitalism.