http://www.guardian.co.

uk/commentisfree/2012/jun/24/alternative-capitalism-mondr agon Yes, there is an alternative to capitalism: Mondragon shows the way Why are we told a broken system that creates vast inequality is the only choice? Spain's amazing co-op is living proof otherwise Share inShare0 Email Richard Wolff Richard Wolff guardian.co.uk , Sunday 24 June 2012 15.13 BST Jump to comments ( 227 ) Mondragon Dani Martinez, innovation director at Orbea bicycles, part of Mondragon Co-opera tive Corporation, in Mallabia, 2011. Photograph: Vincent West/Westphoto for the Guardian There is no alternative ("Tina") to capitalism? Really? We are to believe, with Margaret Thatcher, that an economic system with endlessly repeated cycles, costly bailouts for financiers and now austerity for most people is the best human beings can do? Capitalism's recurring tendencies t oward extreme and deepening inequalities of income, wealth, and political and cu ltural power require resignation and acceptance because there is no alternative? I understand why such a system's leaders would like us to believe in Tina. But w hy would others? Of course, alternatives exist; they always do. Every society chooses consciously or not, democratically or not among alternative ways to organize the production and distribution of the goods and services that make individual and social life possible. Modern societies have mostly chosen a capitalist organization of production. In capitalism, private owners establish enterprises and select their directors who decide what, how and where to produce and what to do with the net revenues from selling the output. This small handful of people makes all those economic decisi ons for the majority of people who do most of the actual productive work. The ma jority must accept and live with the results of all the directorial decisions ma de by the major shareholders and the boards of directors they select. This latte r also select their own replacements. Capitalism thus entails and reproduces a highly undemocratic organization of pro duction inside enterprises. Tina believers insist that no alternatives to such c apitalist organizations of production exist or could work nearly so well, in ter ms of outputs, efficiency, and labor processes. The falsity of that claim is eas ily shown. Indeed, I was shown it a few weeks ago and would like to sketch it fo r you here. In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basq ue region of Spain . It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production. MC is composed of many co-operative enterprises grouped into four areas: industr y, finance, retail and knowledge. In each enterprise, the co-op members (averagi

ng 80-85% of all workers per enterprise) collectively own and direct the enterpr ise. Through an annual general assembly the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how and where to produce and what to do with the profits). As each enterprise is a constituent of the MC as a whole, its members must confe r and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively c hoose, hire and fire the directors, whereas in capitalist enterprises the revers e occurs. One of the co-operatively and democratically adopted rules governing t he MC limits top-paid worker/members to earning 6.5 times the lowest-paid worker s. Nothing more dramatically demonstrates the differences distinguishing this fr om the capitalist alternative organization of enterprises. (In US corporations, CEOs can expect to be paid 400 times an average worker's salary a rate that has increased 20-fold since 1965.) Given that MC has 85,000 members (from its 2010 annual report) , its pay equity rules can and do contribute to a larger society with far greater income and weal th equality than is typical in societies that have chosen capitalist organizatio ns of enterprises. Over 43% of MC members are women, whose equal powers with mal e members likewise influence gender relations in society different from capitali st enterprises. MC displays a commitment to job security I have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative ente rprises. MC members created a system to move workers from enterprises needing fe wer to those needing more workers in a remarkably open, transparent, rule-govern ed way and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, a nd communities, also in unique ways. The MC rule that all enterprises are to source their inputs from the best and le ast-costly producers whether or not those are also MC enterprises has kept MC at the cutting edge of new technologies. Likewise, the decision to use of a portio n of each member enterprise's net revenue as a fund for research and development has funded impressive new product development. R&D within MC now employs 800 pe ople with a budget over $75m. In 2010, 21.4% of sales of MC industries were new products and services that did not exist five years earlier. In addition, MC est ablished and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requireme nts of the European framework of higher education. Total student enrollment in a ll its educational centers in 2010 was 9,282. The largest corporation in the Basque region, MC is also one of Spain's top ten biggest corporations (in terms of sales or employment). Far better than merely s urviving since its founding in 1956, MC has grown dramatically. Along the way, i t added a co-operative bank, Caja Laboral (holding almost $25bn in deposits in 2 010). And MC has expanded internationally, now operating over 77 businesses outs ide Spain. MC has proven itself able to grow and prosper as an alternative to an d competitor of capitalist organizations of enterprise. During my visit, in random encounters with workers who answered my questions abo ut their jobs, powers, and benefits as cooperative members, I found a familiarit y with and sense of responsibility for the enterprise as a whole that I associat e only with top managers and directors in capitalist enterprises. The easy conve rsation (including disagreement), for instance, between assembly-line workers an d top managers inside the Fagor washing-machine factory we inspected was similar ly remarkable. Our MC host on the visit reminded us twice that theirs is a co-operative busines

s with all sorts of problems: "We are not some paradise, but rather a family of co-operative enterprises s truggling to build a different kind of life around a different way of working." Nonetheless, given the performance of Spanish capitalism these days 25% unemploy ment, a broken banking system, and government-imposed austerity (as if there wer e no alternative to that either) MC seems a welcome oasis in a capitalist desert .