No one should be surprised these days when yet another company goes belly-up in these difficult financial times, especially in devastated economies such as Spain. Yet the bankruptcy of Fagor, the flagship cooperative in the Mondragon Cooperative Corporation (MCC) has shaken many anti-capitalists around the world as akin to witnessing the ending of Camelot. The fact that at least two of the other largest cooperatives in the Mondragon network, Caja Laboral (the bank and financial center of the corporation) and Eroski (a chain of retail stores throughout Europe) are in dire financial straits has only added to the ominous threat.
Fagor, with its 5,600 workers, is a relatively small part of the whole. Even so, Trevino (Fagor’s CEO) warns that its fall “will have an uncontrollable domino effect on the rest of the group with major social implications.” He believes Fagor’s liquidation would create a €480m hole at Mondragon, including inter-group loans and payments the group’s insurance arm would have to make on Fagor workers’ unemployment policies.
Mondragon has promised to find new jobs or offer early-retirement terms for as many as it can of Fagor’s Spanish workers, but this is a tall order in a country with 27% unemployment. Besides their jobs, workers stand to lose the money they had invested in the co-op if it is liquidated.
Demystifying the Mondragon Myth
For the last 50 some years, the growth of what is now the Mondragon Cooperative Corporation has given many anarchists, socialists and other progressives in the cooperative movement the hope that yes, Virginia, there really is a viable alternative to Capitalism or, at the very least, an economic system that could provide a transition to socialism. Moreover, although many socialists won’t easily admit it, there is often the underlying hope that somehow this transition could occur “peacefully”, without a real class struggle ending in state ownership; that somehow, within the belly of the beast of capitalism, the cooperative model could “out compete” the capitalist multinationals at their own game and become the dominant economic paradigm.
Yet, as one blogger commented in Alternatives to Capitalism,
“There is no escaping the need to challenge Wall Street and the other big financial centers across the world for political and economic power which requires a well-organized and intense class struggle […] something the promoters of these cooperative schemes try to evade as they try to convince workers there are ways around bringing mines, mills and factories under public ownership which is going to require the nationalization of entire industries.”
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