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The Basque Country’s Mondragón Corporation is the largest industrial co-op
- helsinkiandrew 3y agoThis seems to be fairly unique in its breadth of different enterprises. Most co-ops seem to stay in a single industry e.g John Lewis with 80,000 employees in UK retail or the many agricultural/distribution co-ops owned by farmers. Wikipedia page is a clearer read: https://en.wikipedia.org/wiki/Mondragon_Corporation https://en.wikipedia.org/wiki/Mondragon_Corporation
- n1b0m 3y agoThe Co-operative Group in the has a group of retail businesses, including grocery retail and wholesale, legal services, funerals and insurance, and social enterprise
- dv_dt 3y agoIn the US a lot of the ag coops seem to be marketing oriented with maybe some capital equipment sharing (regional packing shipping facilities, etc).
- AbrahamParangi 3y agoCo-ops are fascinating to me as an alternate evolutionary branch of capitalism. Like the marsupials to the placentals. Also like the marsupials, in most cases where co-ops compete with regular capitalist businesses they go extinct.
- nervousvarun 3y agoAgreed but you could say the same thing about monopolies though right? Anti-trust legislation exists to prevent that sort of extinction.
- darby_eight 3y agoIt exists to preserve competition, which theoretically is supposed to ameliorate the negative aspects of privately owner enterprise.
- JumpCrisscross 3y ago> which theoretically is supposed to ameliorate the negative aspects of privately owner enterprise It’s because non-competitive markets are a market failure [1]. Not amelioration. [1] https://en.m.wikipedia.org/wiki/Market_failure https://en.m.wikipedia.org/wiki/Market_failure
- soco 3y agoImportant note: yes they go extinct in a market shaped by regular capitalist rules.
- JumpCrisscross 3y ago> they go extinct in a market shaped by regular capitalist rules Source? Because unless America, much less Wyoming [1], are not “shaped by regular capitalist rules,” this statement is false. [1] https://www.wyomingrea.org/about/coop-map/ https://www.wyomingrea.org/about/coop-map/
- mminer237 3y agoWhy are there so many co-ops in existence today then?
- rqtwteye 3y agoIn the short term dictatorships usually are superior to democracies because they can move fast and have less stakeholders to satisfy. So a capitalist business will usually beat out a co-op. That doesn't mean that society as a whole gains.
- solarpunk 3y agoI'm afraid I don't understand. My state is chock full of co-ops that compete with their corporate counterparts. Hell, there's (at least) 3 separate co-op grocery stores in my city, they each compete with an Aldi, and multiple local grocery chains in their respective neighborhoods.
- JumpCrisscross 3y ago> My state is chock full of co-ops that compete with their corporate counterparts Same, and we’re deep red. My power company is a member-owned co-op. It’s cheap as hell (6.8¢/kWh for wind) and doesn’t enjoy burning down the state as a hobby.
- solarpunk 3y agooh damn, I completely forgot about utility co-ops! I'm envious of those, they're all over the state but they're only out in the sticks.
- thesuitonym 3y agoCo-ops are just the way that socialism can exist in a capitalist society. And while capitalist businesses can usually undermine them using all the tools of capitalism, notice that co-op workers are usually happier and paid better, co-op customers are treated better and receive better service, and the community suffers less from having a co-op in the area.
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- gadflyinyoureye 3y agoHow are co-ops anti-capitalist? They appear to me no different than a shareholder or partnership. Are most law firms socialistic in that they have partners who work for the firm getting a share of its profits?
- anon291 3y agoThey're objectively not any less capitalist than a private company with restrictions on share transfers.
- thesuitonym 3y agoThe workers own the means of production. That's the only thing that socialism means.
- rybosworld 3y agoThis is completely incorrect.
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- greenie_beans 3y agohow is "socializing" the ownership of a business not socialist?
- Dibby053 3y ago>in most cases where co-ops compete with regular capitalist businesses they go extinct After seeing time and time again the success of workers of bankrupted companies pulling up their compensations and unemployment benefits to rebuild the company in a co-op model, I wonder if it's not the opposite. "Money attracts money", and I don't think it's too crazy to think that if everybody had access to low-interest credit under the same conditions as the big players, this model would be the norm, rather than the exception.
- Nasrudith 3y ago"Everyone has access to low-interest credit under the same conditions as the big players." just sounds like a fantastic (in the fantasy sense) recipe for inflation as the underlying capital and goods sought remain constant but the monetary supply increases. In addition to potentially creating something resembling another 2007 financial crisis worth of mispackaged bad debts.
- Dibby053 3y agoCentral banks fought the 2007 crisis by increasing the monetary supply of a receding economy, so I don't see how removing the intermediaries and having the central bank itself allocate the resources in a fair way could make things worse than they are now. I'm not talking about letting people borrow at 0% to spend in food and utilities. What I'm thinking of is a system where the path from business plan to business isn't determined as much by the amount of capital one already has, which is what causes the usual corporate structures to be formed in the first place: those who assume "all" the risk in turn receive "all" the benefits. That often doesn't reflect the real stakes at play. Investors can have a diversified portfolio (and often plenty of spare capital for more tries), while workers invest 100% of their work on the same company for years or decades. The co-op model is more natural but the dynamics of money make it more rare than it should be.
- marssaxman 3y agoThat may well be what tends to happen in the large-scale economy, but in my personal experience, co-ops crowd other businesses out over time because they are far less likely to piss me off and alienate me. At this point "co-op" has become a pretty strong quality signal: it's not going to be flashy, and it might be a little inefficient, but it will always be decent.
- sangnoir 3y agoREI competes with corporates just fine in the US, a country so capitalist they still ask everyone it they ever were associated with Communism before they let them visit - more than 2 decades after the fall of the USSR.
- oldpersonintx 3y ago[dead]
- Nifty3929 3y agoI'd love to see more details about the business model and corporate structure and how it works. Also, they mention that the workers are "liable for any losses." - How does that work? If I own a share of Acme stock, I'm not liable for their losses, though the value of my share may go to zero. Pretty interesting idea. Are there other examples as well?
- solardev 3y agoWikipedia has a list: https://en.wikipedia.org/wiki/List_of_worker_cooperatives?wprov=sfla1 https://en.wikipedia.org/wiki/List_of_worker_cooperatives?wp... In the US, I'm most familiar with Equal Exchange (fair trade coffee), Nebula (creator owned YouTube for documentaries), TESA (educational board games), Alvarado St Bakery (the tiger-branded breads available in many stores).
- bombcar 3y agoIt maybe "liable for losses" in the way that shareholders often are - if they want the company to continue when it is losing money, they need to "pony up" and invest more. But it may be a different type of corporation than the standard US "limited liability" type (where you can only have your shares go to zero unless you're significantly materially involved AND do criminal shit).
- s1artibartfast 3y agoIf you run ACME as sole proprietorship S-corp in the US, you are also on the hook for the losses. If you spend 9K but spent 10k, you have 1K less in your bank at the end of the year.
- thelastgallon 3y ago> The salary differential between the highest and lowest paid workers in Mondragón, for example, remains about six to one; for the largest 500 listed companies in the US, the gap is closer to 272 to one. At the year end, members of Mondragón’s co-operatives also decide collectively on whether they should pay themselves bonuses and, if so, how much. This profit-sharing comes in addition to a base pay rate that, on average, is 40% above Spain’s minimum wage. Workers are better off.
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- usrusr 3y agoIt's an amazing success story (even if surely not without any bad spots), it makes me happy just knowing that it exists. But I do wonder how much of its workability hinges on Basque nationalism rechanneled into something more useful than nationalism usually is. If that nationalism also had something like an independent state as a default outlet, the balance between cohesion and corruption creep might shift just enough across a tipping point. I'm really not sue that it can be replicated (but I'd love to be proven wrong!)
- Arkhaine_kupo 3y ago> But I do wonder how much of its workability hinges on Basque nationalism rechanneled into something more useful than nationalism usually is. Basically none, it does not hinge on that. If anything basque nationalism hurts the proyect more than it helps. Many of the workers in the basque country came "to disrupt" basque nationalism. So many of the old workforce in Mondragon is not basque born. there was a civil war in spain, most of the industrial capacity was destroyed in the country but not in the basque country. There was a nationalist movement there, so the far right dictatorship thought they had a great strategy. Move people from poor spain to the basque country, you utilise the little industry that remains and you take over the nationalism with people who feel spanish. The only bit of Basque "nationalism" that helped mondragon was that many of its competitors were kicked out. In the 70s and 80s a ton of american companies came to Spain, the far right dictator hiding his axis friends allied with america in exchange for some military bases and allowed american expansion in Spain. Basque country having some of the largest industrial network was a prime candidate for their location. Then the 80s and 90s had a ton of terrorism which scared american companies which left industrial giants like Mondragon without competition. So basque nationalism played little part in its success, its more like the American boom of the 1950s, everyone else had a detroyed industry and they didnt so there was a boom. Basque country had the same thing but instead of building coca cola and taking over south american countries to sell cheap bananas they opened cooperatives. There is little reason other than chance that Sillicon Valley is not like that, early companies like IBM could have set up as coopearatives and their early advanatge would not have been disrupted in the sleightest.
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- roenxi 3y ago[flagged]
- toomuchtodo 3y agoCapital is magic numbers in a database. You're asking for folks to farm coins like an MMORPG vs simply changing labor laws and regulations, or leveraging existing laws.
- thesuitonym 3y agoIf it's so easy to accumulate capital, why aren't you a billionaire?
- JTbane 3y agoC-suite salaries are so high in America I'm wondering if these sort of co-ops could be more competitive on that cost saving alone.
- zbyforgotp 3y agoIt is an interesting question why they don’t outcompete other businesses.
- yoyohello13 3y agoMost likely because growth is not really the primary goal. If an organization has any goals besides growth at all costs it will fall behind.
- office_drone 3y agoThe simple explanation is that the actions of C-suite executives add value, even after factoring in their compensation
- skulk 3y agoshades of https://www.newyorker.com/cartoon/a16995 https://www.newyorker.com/cartoon/a16995
- NovemberWhiskey 3y agoJamie Dimon, the CEO of JPMorgan Chase, was paid $36M in 2023. The company had, at the end of the year, 310,000 employees. So we can assume that if got paid zero, the company would've been able to distribute about $116 to each of them. Doesn't look very compelling to me, in that particular case.
- enraged_camel 3y agoCool, now combine the salaries of the entire C-suite. That’s what the parent comment is referring to.
- jmyeet 3y agoFor all the fearmongering of the Red Scare, this is what socialism looks like. Socialism is an industrial co-op like this where workers are fairly paid for their labor. Capitalism is Walmart where all profits are captured by a handful of shareholders and executives, being subsidized by the Federal government through food stamps to employees and decimating local economies to the point where they're left with dollar stores. There's a Tiktoker who is having the Amish build a barn on the land she bought in upstate New York and she keeps calling them "capitalist". The Amish in question are entrepreneurial for sure but that's not capitalism. The Amish keep their surplus labor value. It saddens me to see how fundamentally people misunderstand what capitalism actually is. All we've done is replace the divine right of kings and landed aristocracy with the capital-owning class of the likes of Jeff Bezos. It's sad to see how many people champion their own serfdom when examples like Mondragon show it doesn't have to be that way.
- mgaunard 3y agoIn my experience, people would rather be employees paid in cash whose amount is agreed ahead of time than partners where they're paid depending on the company's profits.
- teaearlgraycold 3y agoI have been wondering if you could make it work in Silicon Valley for a small firm. Take 2-10 people that could be founders and give them the alternative of being the Nth partner. They’d need to bring in 1/N of the profit to earn their keep. I think it’s doable.
- monknomo 3y agoI have long suspected a model like this, borrowing from lawyer shops and worker co-ops, could be pretty good for software. Since software is sort of inherently project based, could have a mix of product and contracting, and could have wins both on the co-op side and whoever the co-op is doing work for/selling product to
- s1artibartfast 3y ago
- Quarrel 3y agoThe co-op structure is less used in the US, but there are quite a lot of significant employee owned corporations (which come with the limited liability benefits to shareholders). There are also quite a few with mixed founder / employee ownership. Publix for instance employ 250,000 people across their supermarkets and are employee / founder owned. A recent list of the largest from Oct 2023: https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100
- xhkkffbf 3y agoWould it be fair to say that companies like AMZN or GOOG have "employee ownership" because of the stock options? If so, it means many tech companies meet this definition.
- dmoy 3y agoThe percentage of ownership is relevant, as is where the profit goes.
- Ericson2314 3y agoBoard control is probably more important than profit on this one, I'd say
- dmoy 3y agoRight, percentage of ownership (since board control stems from that?)
- stonogo 3y agoNot really, but technically yes. "Employee-owned" is being used in a specific way here; it's a specific form of ownership governance. Most often the shares are owned by employees via a trust, which the business funds. None (or mostly none!) of the stock options available to Amazon or Google staff are useful in terms of controlling the business. When someone is using the term "employee-owned business," they are generally referring to a business in which employees have actual control, not just a profit-sharing certificate. Of course, any publicly-traded company can be 'employee-owned' to whatever degree the employees buy shares. But this term usually indicates something else.
- mgaunard 3y agoHow is it different from a normal partnership?
- badpun 3y agoPartnership can have employees who are not partners.
- wwarner 3y agoI visited Bilbao a few years back and the claim then was that Basque Country had the highest average income in Spain. Today Wikipedia [0] lists it as second. [0] https://en.wikipedia.org/wiki/Ranked_lists_of_Spanish_autonomous_communities https://en.wikipedia.org/wiki/Ranked_lists_of_Spanish_autono...
- Arkhaine_kupo 3y agoIts the highest median income in that table. Its second only in GDP per capita because a number of big corporations moved to Madrid. There has been a slow but fairly unstopable centralisation in Spain, specially since the Catalan independence debalce a few years ago, more and more companies have moved their headquarters to Madrid. Which has raised the GDP of madrid a ton and moved many jobs there.
- triceratops 3y agoI might be wrong but in most unitary states, the capital region tends to have the highest GDP. I'm not aware of significant exceptions to this rule.
- namlem 3y ago>Pursuing a co-operative model is far from plain sailing, however. Numerous hurdles exist. For one, membership does not come cheap. To join a co-operative, workers typically put up a one-off payment of about €17,000 each. Plus, just as they are entitled to a share of any profits, so, too, are they liable for any losses. Commercial pressures can also prove acute, as Fagor Electrodomésticos’s troubled history shows. The fact that all major investment decisions have to be put to the vote can also make Mondragón’s co-operatives less agile than their conventional competitors. And finding financing can be problematic as the private capital markets are effectively closed to them, admits Fagor Arrasate’s Mendieta: “We can’t incorporate external capital into the co-operative’s share capital because we are governed by the principle of ‘one person, one vote’, which no capitalist investor would accept.” As with any system, there are tradeoffs.
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- neonate 3y agohttps://archive.md/8y0mj https://archive.md/8y0mj
- pphysch 3y ago> Mondragón Corporation is the globe’s largest industrial co-operative, with workers paying for the right to share in its profits > That sentiment is echoed by Mondragón’s 70,000 other workers. According to SCMP [1], Huawei has over 130,000 shareholding employees 3 years ago. So the "globe's largest" claim seems factually incorrect. [1] - https://www.scmp.com/business/article/3173121/huawei-pays-out-us965-billion-dividends-current-and-retired-staff https://www.scmp.com/business/article/3173121/huawei-pays-ou...
- bigbacaloa 3y ago[dead]
- Collisteru 3y agoI wonder why co-ops are so comparatively rare in the US, even though everybody seems to like them (customers and employees). It could just be tradition and the effects of history. But then why did US history create more shareholder corps while European history created more co-ops? It could be that US investors are less willing to invest in co-ops. But then, why? Is there something about them that makes them less competitive? Why are they ostensibly worse in the US than in Europe?
- jltsiren 3y agoI guess it's because American culture is more focused on property and ownership. The co-op movement arose as a reaction to industrialization and capitalism, which threatened many workers. You could understand it as capitalism based on membership rather than ownership, or as a third way that's neither capitalism nor socialism. But just like socialism never really took root in the US, other alternatives to capitalism didn't fare that well either.
- jampekka 3y agoWorker co-ops are quite concretely socialist in the sense that the workers control their means of production. Of course when embedded in largely capitalist economy, e.g. banks do still have often de-facto control over them.
- fransje26 3y ago> Worker co-ops are quite concretely socialist Or you could say that they are co-owner of their means of production. So, as business owners, are they actually the ultimate capitalists in disguise? :-)
- jampekka 3y agoBusiness owner who doesn't have employees is not really a capitalist, but a self-employed worker. At least if they do some practical labor instead of e.g. investing. In general, self-employment is quite a different thing from owning of means of production that other people work.
- CLiED 3y agoThis is tangentially related at best but I always found it amusing that a forum for founders and populated mainly by pampered white-collar workers happens to be one of the hot-spots of revolutionary sentiment in the interweb, very ironic.
- mharig 3y agoFor German speaking folks, there is a free book about Mondragón: http://www.weisenbacher.de/mondragon/Mondragon_von_Hans_Nerge.pdf http://www.weisenbacher.de/mondragon/Mondragon_von_Hans_Nerg... But after 45 pages or so Nerge drifts to communist Blabla.
- amadeuspagel 3y ago> “If I’d had to compete in the open job market against all the youngsters coming out of university, I’m not sure I’d have ever found another job.” So this is the reason Spain has the highest youth unemployment rate in europe?