There is no alternative ("Tina") to
capitalism?
Really? We are to believe, with Margaret
Thatcher, that an economic system with endlessly repeated cycles, costly
bailouts for financiers and now austerity for most people is the best human
beings can do? Capitalism's recurring tendencies toward extreme and deepening
inequalities of income, wealth, and political and cultural power require
resignation and acceptance – because there is no alternative?
I understand why such a system's leaders would
like us to believe in Tina. But why would others?
Of course, alternatives exist; they always do.
Every society chooses – consciously or not, democratically or not – among
alternative ways to organize the production and distribution of the goods and
services that make individual and social life possible.
Modern societies have mostly chosen a capitalist
organization of production. In capitalism, private owners establish enterprises
and select their directors who decide what, how and where to produce and what
to do with the net revenues from selling the output. This small handful of
people makes all those economic decisions for the majority of people – who do
most of the actual productive work. The majority must accept and live with the
results of all the directorial decisions made by the major shareholders and the
boards of directors they select. This latter also select their own
replacements.
Capitalism thus entails and reproduces a highly
undemocratic organization of production inside enterprises. Tina believers
insist that no alternatives to such capitalist organizations of production
exist or could work nearly so well, in terms of outputs, efficiency, and labor
processes. The falsity of that claim is easily shown. Indeed, I was shown it a
few weeks ago and would like to sketch it for you here.
In May 2012, I had occasion to visit the city of
Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of
the Mondragon Corporation (MC), a stunningly successful alternative to the
capitalist organization of production.
MC is composed of many co-operative enterprises
grouped into four areas: industry, finance, retail and knowledge. In each
enterprise, the co-op members (averaging 80-85% of all workers per enterprise)
collectively own and direct the enterprise. Through an annual general assembly
the workers choose and employ a managing director and retain the power to make
all the basic decisions of the enterprise (what, how and where to produce and
what to do with the profits).
As each enterprise is a constituent of the MC as
a whole, its members must confer and decide with all other enterprise members
what general rules will govern MC and all its constituent enterprises. In
short, MC worker-members collectively choose, hire and fire the directors,
whereas in capitalist enterprises the reverse occurs. One of the co-operatively
and democratically adopted rules governing the MC limits top-paid
worker/members to earning 6.5 times the lowest-paid workers. Nothing
more dramatically demonstrates the differences distinguishing this from the
capitalist alternative organization of enterprises. (In US corporations, CEOs
can expect to be paid 400 times an average worker's salary – a rate that
has increased 20-fold since 1965.)
Given that MC
has 85,000 members (from its 2010 annual report), its pay equity rules can
and do contribute to a larger society with far greater income and wealth
equality than is typical in societies that have chosen capitalist organizations
of enterprises. Over 43% of MC members are women, whose equal powers with male
members likewise influence gender relations in society different from
capitalist enterprises.
MC displays a commitment to job security I have
rarely encountered in capitalist enterprises: it operates across, as well as
within, particular cooperative enterprises. MC members created a system to move
workers from enterprises needing fewer to those needing more workers – in a
remarkably open, transparent, rule-governed way and with associated travel and
other subsidies to minimize hardship. This security-focused system has
transformed the lives of workers, their families, and communities, also in
unique ways.
The MC rule that all enterprises are to source
their inputs from the best and least-costly producers – whether or not those
are also MC enterprises – has kept MC at the cutting edge of new technologies.
Likewise, the decision to use of a portion of each member enterprise's net
revenue as a fund for research and development has funded impressive new
product development. R&D within MC now employs 800 people with a budget
over $75m. In 2010, 21.4% of sales of MC industries were new products and
services that did not exist five years earlier. In addition, MC established and
has expanded Mondragon University; it enrolled over 3,400 students in its
2009-2010 academic year, and its degree programs conform to the requirements of
the European framework of higher education. Total student enrollment in all its
educational centers in 2010 was 9,282.
The largest corporation in the Basque region, MC
is also one of Spain's top ten biggest corporations (in terms of sales or employment).
Far better than merely surviving since its founding in 1956, MC has grown
dramatically. Along the way, it added a co-operative bank, Caja Laboral
(holding almost $25bn in deposits in 2010). And MC has expanded
internationally, now operating over 77 businesses outside Spain. MC has proven
itself able to grow and prosper as an alternative to – and competitor
of – capitalist organizations of enterprise.
During my visit, in random encounters with
workers who answered my questions about their jobs, powers, and benefits as
cooperative members, I found a familiarity with and sense of responsibility for
the enterprise as a whole that I associate only with top managers and directors
in capitalist enterprises. The easy conversation (including disagreement), for
instance, between assembly-line workers and top managers inside the Fagor
washing-machine factory we inspected was similarly remarkable.
Our MC host on the visit reminded us twice that
theirs is a co-operative business with all sorts of problems:
"We are not some paradise, but rather a
family of co-operative enterprises struggling to build a different kind of life
around a different way of working."
Nonetheless, given the performance of Spanish
capitalism these days – 25% unemployment, a broken banking system, and
government-imposed austerity (as if there were no alternative to that either) –
MC seems a welcome oasis in a capitalist desert.
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