Give co-operatives a go

When an engineering factory in Argentina was reopened by employees after the owner had closed it down and caused massive unemployment, the workers decided to run the organisation with a committee structure and whatever their skills and responsibilities all worked for the same pay. In another reopened workplace, also in Argentina, the staff as a committee agreed on a differential wage structure according to each person’s work responsibilities.

One of the longest established co-operatives is Mondragon Cooperative Corporation [MCC] in northern Spain, a favourite interest of former Australian Federal and Victorian Member of Parliament Race Mathews.

A priest, Don Jose Maria Arizmendiarreta, had been running an industrial apprentices school in a region of very high unemployment when in 1954 he asked five students to raise money to buy a business. They raised enough to take over a small company and brought it to Mondragon, where in a disused factory, using hand tools and sheet metal, they made oil-fired heaters and cookers. In 1956 the company had 24 owner-employees, increasing to 149 in 1958, and 21,000 in 1990.

MCC is now the 7th largest business group in Spain, the third largest employee and a major competitor in European and global marketplaces. It has become a conglomerate of some 160 manufacturing, retail, financial, agricultural and support co-operatives with annual sales exceeding US$6 billion. When the level of unemployment in the Basque region in recent years was around 25 per cent, employment in the co-operatives increased to 78,000, MCC providing jobs for roughly 6 per cent of the region.

The MCC is Spain's largest exporter of machine tools, largest manufacturer of domestic appliances, and the third largest supplier of automotive components in Europe. Subsidiaries manufacture semiconductors in Thailand, white goods components in Mexico, refrigerators in Morocco, luxury motor coach bodies in China. MCC construction co-operatives have built key facilities for events such as the Barcelona Olympic Games and the Guggenheim Museum in Bilbao. It has Spain's largest retail chain with 37 hypermarkets, 211 supermarkets, 419 self-service and franchise stores and 333 travel agency branches.

The manufacturing co-operatives are serviced by a system of secondary support co-operatives, also owned and governed jointly by their workers, whose aim is to make the MCC self-sufficient in key requirements of capital, education and training, and research and development.

Principles

The MCC is based on several fundamental principles. Every worker in the company has a vote on the election of the boards of directors which hire managers. If they don't like what management is doing they can vote out the board at the workers' congress.

All members put money into the MCC's own bank, itself a co-op, which serves the interests of individuals while its mission is to fund new jobs and enterprises. This money accumulates interest and can be taken out on retirement.

There is a two-way process between education and industrial experience. The original school for apprentices now bestows degrees and is closely integrated with the industries.

In contrast to most large firms where the salaries of chief executive officers outstrip those of other workers by a long chalk - 344 to 1 in one US company in 2009, according to The Star Ledger, New Jersey, 1 September 2008 - in MCC those in top management earn only 15 times the wage of the person at the bottom of the pay-scale. If the boss wants a rise, all get a rise. All members have an equal share, proportionate to salary, in profits or, on occasion, losses. Programs are in place to ensure no one loses his job, but if that is inevitable he or she is recompensed and paid educational benefits for retraining. At a period in the1980s when the Basque region lost 150,000 jobs, MCC created an additional 4,200.

British co-ops

The seeds of the co-operative movement date back to the early 19th century in Scotland when successful industrialist Robert Owen found productivity in his factories increased when he provided good working conditions. The British co-operative movement was launched in 1844 when 28 cotton weavers founded the Rochdale Equitable Pioneers, responding to a pressing need for affordable food, light, fuel and clothing. The Co-operative Wholesale Society was founded in 1863 and to this day is Britain's largest co-operative body, with more than 500 food stores, supermarkets and hypermarkets employing 35,000 workers, extensive funeral and farming interests, the country's second largest mutual assurance society with 35 million members, and a rapidly growing bank with two million customer accounts.

The British Liberal Party's policy platform after the 1939-1945 world war advocated worker-owned business enterprises and a number of coal mines and shipyards in the UK have operated on this principle.

Australia has its own co-operative history with Rochdale consumer co-operatives founded in New South Wales in 1859 and operating thriving local stores throughout much of Australia up to the decades following World War II, although meeting its demise in 1986.

Robert Theobald described a community garden in a distressed neighbourhood of New Orleans giving people an opportunity to produce vegetables and fruits which were not easily available in that city and therefore costly. In Peru, when the government nationalised tin mines then pulled out, leaving whole communities with no alternative work, ten thousand miners created four co-operatives to keep them going.

In USA at present many houses are standing empty because the owners could not sustain mortgage payments. At the same time many people are homeless because they cannot afford to buy or pay rent. This is a bizarre use of a resource as basic as shelter. However, nature is taking the obvious course, with homeless families moving in to empty houses anyway. To do otherwise would compound nonsense. And some authorities are turning a blind eye.