“Alongside profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves. It is from their reciprocal encounter in the marketplace that one may expect hybrid forms of commercial behaviour to emerge, and hence an attentiveness to ways of civilizing the economy.”

The quote above is from the:

* Book: Dr. Race Mathews in Jobs of Our Own: Building a Stakeholder Society, Alternatives to the Market and the State. The Distributist Review Press, 2009

In a review of the book, John Médaille, makes the important point, often forgotten under the general demonination of ‘cooperative’:

Mondragon is a successful Distributist project focusing productive community and stakeholder property.

John Médaille:

“As Race Matthews puts it,

The lesson from all the consumer co–operatives and co–operative movements that have failed, either wholly or in part, is that the experience of consumption either of goods or services is insufficiently central to the lives of ordinary people to provide the foundation on which a lasting co–operative consciousness — and thereby an enduring immunity to the basic agency dilemma — can be established. As the account of Mondragón in the following chapters makes clear, the only experiences equal to the task of developing a lasting co–operative consciousness or culture are those of work and property. It is only through stakeholding in property and the exposure on a daily basis to workplace democracy that members can acquire the habit of seeing themselves as the masters of their own destiny, and fully accepting the entitlements and obligations consequent on their status.

It is the sense of ownership alone that can build an enduring distributist culture, and this sense that makes Mondragón the more interesting example. Founded in 1953 by students of a rather remarkable parish priest, Father José Maria Arizmendiarrieta, it has grown from a simple paraffin stove factory into a giant corporate conglomerate with several hundred worker-owned firms involved in the manufacturing of the most sophisticated products, banking, retailing, research, education, construction, business services, and insurance. Today, the Corporation has €33 billion in assets, does €16 in sales, employs 104,000 workers, 81% of whom are worker-owners to whom they distribute 52% of the profits. But Mondragón is more than a mere “corporate success story.” It is a business model that is completely counter to the modern corporation.

In the first place, Mondragón is ruled by the principle of subsidiarity; that is to say, the higher level exists to serve the lower levels. Indeed, the individual cooperatives have the right to leave the corporation; participation is voluntary. This makes it impossible for a centralized authority to “lord it over” the member cooperatives. The corporation itself is ruled not by outside investors (there are none) but by the workers themselves. You might call this an inverted model of corporate organization. The firm is built from the ground up rather than the top down.

But that is only part of the story, because Mondragón is more than just a business enterprise; it is a social one. It is of course a profit-making enterprise, but profit is not an end in itself. It is merely a means to a much broader set of ends. In addition to its normal business enterprises, Mondragón runs an education system, a university, social safety networks, retirement systems, research and training institutes—things normally provided by governments through taxes—and provides all on its own resources, without the help of government. The guiding principle is solidarity, people caring for each other with the help of formal structures and institutions.

Between these two principles, subsidiarity and solidarity, Mondragón takes the principles of Catholic social doctrine and turns them into a living reality. And a successful one at that. The fear of implementing a “morality-based” system is that it might compromise the necessary business goals. But the opposite seems to be the case; the cooperative model doesn’t merely work, it works to produce a strong and growing network of firms that are fully profitable and competitive in local and world markets. Moreover, it lessens the need for big government by providing social services from its own resources. But more than these successes, what Mondragón really builds up is community, that sense of mutual caring and obligation that must be the real point of any sane economic system.

And therein lies the significance of Race Mathews’ book.”