Some while I ago, I noticed a lot of incoming links from a Basque Spanish-language blog, from Julen Iturbe-Ormaetxe, affiliated with the Mondragon cooperatives. Julen promised me to write up some contributions in English on the relationship between P2P and the cooperative movement. Motivated by this, I’m reprinting some of the earlier info and comments which appeared in P2P News 87. My own comments, comparing P2P and cooperatives as modes of production, are under heading 4.

P2P and the Cooperative Movement

After a sound introduction to the network form of organisation, with an argument on why cooperatives are better equipped than businesses to do it, this essay compares the hierarchical structure of the Basque Mondragon cooperative, with the decentralized structure of the Italian cooperatives of the Emilia-Romagna region.

Prompted by this article, I’ve tried to formulate my own preliminary conclusions about the differences and complementarity between cooperatives and P2P processes, see part three.

I must share a certain skepticism about the cooperative movement however. It has existed for over 200 years now, and it has always remained marginal. The reason is that, however socially more desirable it may be in terms of creating more cooperative human relations, it is outcompeted by for-profit firms. And that is the big difference with peer production: peer production is more productive than its for-profit alternatives, and socially more desirable.

Another important point is to which degree cooperatives may require a sacrificial individuality, in which the individual must somehow curtain himself for the benefit of the community. Isn’t this why many young people have left the Kibbutzim where they grew up? There also, peer to peer represents a new kind of collective, that is not at all predicated upon any sacrificial limitation of individuality, but on the contrary on its full flowering.

1. Mondragon

“Mondragon Corporation Cooperativa (MCC) is one of the biggest and well known cooperative groups in the world. Organized in a network, it contains over 150 industrial enterprises (workers cooperatives and their affiliated companies which can be conventional businesses). But MCC can also depend on its powerful financial group made of two units: a very large bank, Caja Laboral Popular, and a dedicated social security system, Lagun-Aro; The MCC network is completed by a distribution group which notably holds the Eroski consumer cooperative where over 32.000 people work today. MCC also operates three R&D centers and supports the Mondragon University were about 4.000 students are enrolled.

Mondragon is the first industrial group of the Basque Country and sixth industrial group of Spain, with total sales of € 9.232 millions and an operating profit of € 380 millions in 2002. MCC’s workforce has impressively increased in the ten last years to reach 68.625 employees in 2003 against 25.317 in 1993, and still grew by 10.5 % in 2002 despite international recession. But only half of this workforce is made of cooperative members, although cooperatives keep on joining the group every year: three did so in 2002. From the day its first cooperative was founded in 1956, Mondragon has always been a very centralized and hierarchical business.

2. Emilia-Romagna

In the industrial districts of Emilia-Romagna, cooperatives and conventional small and medium size enterprises cooperate with each other. In this region, there are about 8.000 cooperatives which have built up their own organizations and solidarities in such a way that one might say they have formed networks of cooperatives within the Emilia-Rmagna clusters. Consequently, it is difficult to isolate the network of cooperatives from the rest of the local reticular structures.

Small and medium sized enterprises, both cooperative and conventional, have specialized and formed industrial districts. One can find a knitwear district, a clothes district and a ceramic tiles district in Modena, an automatic machinery district, a packaging machinery district and an agricultural machinery one in Bologna, a wood working machine tools district in Carpi, a tomato canning district, a ham district an a food processing machinery one in Parma … (Brusco, 1982).

3. Book: American Beyond Capitalism. Gar Alperovitz

‘His new book, America Beyond Capitalism, is a roadmap of these pioneering efforts ­ ones that Gar sees as “likely to establish significant foundations for what could potentially become far-reaching changeÅ ” But towards what? The book is not just replete with descriptive details of particular projects; it develops a robust vision of a new and much-improved economic and political system ­ a “Pluralist Commonwealth”. With this vision, according to Gar, we can begin to weave together and strengthen our all-too-often disconnected energies.’

4. Comments: P2P and the cooperative movement

P2P and the cooperative movement share the desire for equality and autonomy, but also differ in significant respects.

– P2P is based on cyber-collectives that are organized on a global scale; it is strongest in immaterial production; Cooperatives are mostly local groups; and they are perfectly geared for physical production

– P2P is a form of common property that ‘belongs to all’; cooperatives belong to the collective of specific producers

– P2P produces use value, not exchange value; Cooperatives are geared towards the marketplace and many of their decisions are dependent on that marketplace; they create exchange value. While P2P is emerging and growing and is proving to be ‘more productive’ than for-profit alternatives, that does not seem to be the case with cooperatives, who have always been marginalized in a capitalist market.

– P2P is a form of communal shareholding: anyone contributes and uses freely; Cooperatives are a form of Equality Matching: work and income are distributed in a formal way to insure equality. Cooperatives are based on reciprocity, P2P not.

5. P2P Directory: Grassroots Economic Organizing

“GEO (Grassroots Economic Organizing) Newsletter is a bimonthly publication that reports on worker cooperatives and community-based economies in the U.S. and World wide, and their development through local cooperative action. GEO also provides a global forum for the cooperative movement.”