Saturday, November 29, 2014

Maori, Maori economy, and Mondragon...

I'm working on a great project led by Dr. Shaun Awatere of LandCare looking at the 'Maoriness of the Maori economy'.

My role is minor, reviewing some of the models of managing collective resources such as those owned and operated by Maori collectives. One example I've always been fascinated by is the Mondragón Cooperative Group in the Basque Country. Mondragón began in the 1950s with the production of small oil stoves. These principles are can be mapped onto a broad Socialist Christian interpretation of how to conduct business, with worker solidarity being coupled to a strong humanitarian charitable ethos.

Needing capital to expand, the group founded their own bank based on the same collective prinicples (based on the teachings of Father José María Arizmendiarrieta Madariaga). More success saw the group splitting into new ventures of inter-related worker-owned businesses.

Now Mondragon is up of nearly 300 businesses, most in the Basque Country and Navarra, employing over 80,000 people, 70,000 in Spain with the rest employed all over the world.

Mondragon has been a fascination for researchers for many years, not least because of its flourishing during a severe economic recession in Spain and the rest of Europe between 1975 and 1985. While the rest of the Basque region lost 150,000 jobs, Mondragon added 4,000 jobs

At its core are a set of values encapsulated by ten principles:

1.       Open Admission
The Mondragon co-operative experience is open to all men and women who accept these Basic Principles without any type of discrimination.
2.       Democratic Organisation
The basic equality of worker-members in terms of their rights to be, possess and know, which implies acceptance of a democratically organised company based on the sovereignty of the General Assembly, electing governing bodies and collaborating with managerial bodies.
3.       Sovereignty of labour
Labour is the main factor for transforming nature, society and human beings themselves. As a result, the systematic recruitment of salaried workers has been abandoned, full sovereignty is attached to labour, the wealth created is distributed in terms of the labour provided and there is a will to extend the job options available to all members of society.
4.       Instrumental and subordinate nature of capital
Capital is considered to be an instrument subordinate to labour, which is necessary for business development. Therefore it is understood to be worthy of fair and suitable remuneration, which is limited and not directly linked to the profits obtained, and availability subordinate to the continuity and development of the co-operative.
5.       Participatory management
The steady development of self-management and, consequently, of member participation in the area of company management which, in turn, requires the development of adequate mechanisms for participation, transparent information, consultation and negotiation, the application of training plans and internal promotion.
6.       Payment solidarity
Sufficient and fair pay for work as a basic principle of its management, based on the permanent vocation for sufficient collective social promotion in accordance with the real possibilities the co-operative has, and fair on an internal, external and MCC level.
7.       Inter-cooperation
As the specific application of solidarity and as a requirement for business efficiency, the Principle of Inter-cooperation should be evident: between individual co-operatives, between subgroups and between the Mondragón co-operative experience and Basque co-operative organisations, and co-operative movements in Spain, Europe and the rest of the world.
8.       Social Transformation
The willingness to ensure fair social transformation with other peoples by being involved in an expansion process that helps towards their economic and social reconstruction and with the construction of a freer, fairer and more caring Basque society.
9.       Universality
Its solidarity with all those who work for economic democracy in the area of the Social Economy by adopting the objectives of Peace, Justice and Development which are inherent to the International Co-operative Movement.
10.   Education
To promote the establishment of the principles stated above, it is essential to set aside sufficient human and financial resources for co-operative, professional and youth education.

It's not all beer and skittles for Mondragon. In 2013 one of the most important Mondragon ventures, whiteware manufacturer Fagor (a direct descendent of the original stove business), filed for bankruptcy. 

The larger questions posed by the failure of Fagor is the relationship of large-scale economic institutions to the market regardless of the wider economic system, and the lessons this holds for long-term systemic evolution for societies and collectives looking to move beyond the failings of corporate capitalism and traditional socialism.

While Mondragon is having to rationalise its workforce there remains a commitment to reinvest in its workers and communities once the wider economic situation improves. Current economic constraints have seen harsh austerity measures around the world, including Aotearoa. 

There are always AlterNatives...

A proud history of struggle and a strong cultural identity has helped the Mondragon collectives survive industrial and economic upheavals from the economic and cultural periphery of a major economic trading bloc. This hybrid approach is not without its failures. But the accumulation of considerable business acumen and market intelligence embeds continually evolving networks while retaining the democratic decision-making the supports consensual principles.

Maori can learn from others. And we can teach.

We're looking at publishing our first reports soon. And Shaun has secured more funding to take it even further!

Watch this space...

Alperovitz, G., & Hanna, T. M. (2013, Nov 1, 2013). Mondragón and the System Problem. Retrieved October 14, 2014, from

Flecha, R., & Ngai, P. (2014). The challenge for Mondragon: Searching for the cooperative values in times of internationalisation. Organization, 21(5), 666-682.

Macleod, G. (1997). From Mondragon to America: Experiments in Community Economic Development. Sydney: University of Cape Breton Press. From Mondragon to America: Experiments in Community Economic Development

Father José María Arizmendiarrieta Madariaga

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