Sunday, October 27, 2013

Economist Richard Wolff


Web page: Economist Richard Wolff


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Richard Wolff: Global Capitalism March 2014 Monthly Update


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Richard Wolff on the Mondragon cooperatives – March 14, 2014

Time: 45 min.

Richard Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst, and currently a Visiting Professor in the Graduate Program in International Affairs of the New School University in New York.

The Mondragon Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. It was founded in the town of Mondragón in 1956 by graduates of a local technical college.

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Richard Wolff The Economic Crisis Why it will happen again unless we do this – March 10, 2014

Time: 57 min.

Economist Richard Wolff at Brooklyn Society For Ethical Culture explains how we got to our present economic condition and where we need to go.


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WBAI Feb 23, 2014

Richard Wolff: Economic Update - This System Does not Work (Soviet socialism...)


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WBAI - Feb16, 2014

Richard Wolff: Economic Update - The Death of the Middle Class (EU and Germany)


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Richard Wolff: Curing Corrupt Capitalism – February 4, 2014

Nearly daily, mass media report political corruption across the world. Government bureaucrats, from local to national to international, are exposed for having abused their offices for personal gain. That gain is usually financial, but can involve career advancement. Much of that corruption is driven and financed by capitalist enterprises. In that kind of corruption, officials enable tax avoidance, provide subsidies, make purchases and sometimes sales and decide many other “public” matters (e.g. locating roads, zoning cities, constructing state facilities, repressing strikes, investigating corruption, negotiating international agreements, etc.).

Official decisions are corrupt when they aim (in exchange for personal gain) exclusively or chiefly to benefit individual firms or groups of enterprises rather than any broad social or public purpose.

Corruption can be illegal (when prohibitive laws apply) or legal if such laws were repealed or never passed. Political corruption, when not hidden or secret, occurs under a protective cover (or disguise) as if done for public purposes or benefits.

What chiefly drives this sort of political corruption today is capitalism’s structure. For many capitalist enterprises, competitive and other pressures exist to increase profits, growth rates and/or market share.
Continue....


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When you check this article also watch the video which is included with the interview of Richard Wolff.

Bill Moyers & Company - February 12, 2014

Richard Wolff: Janet Yellen and I Were Taught to Revere Capitalism. But It’s a Failing System.


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Richard Wolff: Global Capitalism: February 2014 Monthly Update – February 12, 2014

Time: 2 hrs. 3 min.

We will begin with short updates on major economic developments since December:

Obama's minimum wage policy, the Federal Reserve's "tapering policy" and the new Janet Yellen leadership, slowdowns in China and the emerging markets, and Thomas Piketty's new book Capital in the 21st Century on capitalism and inequality.

We will devote major discussion to:

The chief causes and social effects of increasingly unequal wealth and income distributions.

The myth of returning manufacturing jobs in the US.

Richard Wolff on minute 27 of his seminar he mentioned an interesting fact which has not been mentioned in any place else in the US: the US government announced in January that the US GDP finally had reached the level of 2007; if you don't include the increase in population during that period.

The US economic system had “ZERO” growth during that 6 year period, but during that same period China was able to grow their economy by 90 %, almost doubling the size of their economy.

USA 0 vs. China 90

The other item that he mentioned on point 1 hr and 56 min of the video regarding the United States “Prison Industrial Complex”... This is a subject that I have been writing about it for the last 13 years and in one of my books I called it the “Brain Dead Strategy.”


The United States “Prison Industrial Complex”


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The Big Picture – February 7, 2014

Richard Wolff: What to Do when Capitalism Fails

Dr. Richard Wolff, Democracy At Work, joins Thom Hartmann. So - can Yellen help guide the US through the stormy seas ahead or is it time to radically rethink our economic course?


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Richard Wolff on 90th anniversary of Lenin's death – January 21, 2014

Today is the 90th anniversary of the death of Vladimir Lenin - the man credited with changing the course of history for Russia, and the world. His body is on public display in central Moscow, and just like him the ideas he launched a revolution for are not exactly buried. For Russians, 70 years of the Soviet Union left most people indifferent towards Lenin's legacy. Hovewer, the socialist ideas he fought for have gained some traction in the West. Economist Richard Wolff joins RT for a detailed look at socialist ideas.


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Economist Richard Wolff: Real Progressive Economic Change – December 15, 2013

-Richard Wolff, Professor Emeritus of Economics at the University of Massachusetts, and currently a visiting professor at the New School University in New York City, joins David to discuss potential strategies to bring progressive economic change, including incremental vs systemic approaches, as well as economic rights, unionism, and small producerism


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Richard Wolff: Worker Coops and a New Strategy for Labor – December 3, 2013

Time: 53 min.

A talk delivered at the Joseph S. Murphy Institute for Worker Education and Labor Studies, City University of New York, December 3, 2013.


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Richard Wolff – Global Capitalism: December 2013 Monthly Update - December 10, 2013

Time: 1 hr. 26 min.

These Tuesday evenings begin with updates and analyses of the last month's major economic events.

We focus on the global capitalist economic crisis, government responses, and the growing challenges to contemporary capitalism. We examine resistances to "austerity," "deficit reduction" and other programs aimed to "socialize" the costs of capitalist crisis. Alternative theories for understanding these issues are considered. Likewise, we examine alternatives to capitalism as solutions to today's economic problems. When time permits, we open the floor to general discussions. Our goal: to develop all participants' understanding and ability to explain economic developments to others.

Topics this evening will include the ongoing capitalist global crisis in the US, Europe and Japan versus that of China, India and Brazil and the crisis of socialisms spanning Europe to China. We will also consider emerging economic and political movements that are developing in response to these crises.


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He talks about the minimum wage that started in the 1930's reached its highest level since its inception in 1968 when adjusted for inflation would be the equivalent today of $ 10.50.

Now Barack Obama is proposing to raise the minimum wage to a level less than what the minimum wage was 40 years ago.

The minimum wage went nowhere in the last 40 years but at the same time labor productivity doubled during that same period.

During the financial collapse of 2008 the government had 2 choices, borrow the money or tax the rich.

Austerity is a way of class warfare ….


Global Capitalism: November 2013 Monthly Update – November 12, 2013

Time: 1 hr. 32 min.

In addition to our usual shorter updates on major economic events in the news over the last month, major attention will be devoted to the following:

The federal government's austerity policy, compromises with the Republicans over social security, medicare, Obamacare, etc.

The state and local governments' austerity policies (summary of a major new report on state and local cutbacks)

How and why changes in federal, state and local taxes could remove the need for austerity and achieve tax justice.

Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst where he taught economics


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November 18, 2013

David Barsamian Talks to Richard Wolff – Part 1 of 8

Journalist David Barsamian interviews New School economics professor Richard Wolff about the crises of capitalism rocking the world, and the protest movements against them. In this section, he discusses the sovereign debt crisis that the EU currently faces.

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David Barsamian Talks to Richard Wolff – Part 2 of 8

In this section, he discusses the possibility of change, using the Fukushima nuclear disaster's effects on German politics as an example.

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David Barsamian Talks to Richard Wolff – Part 3 of 8

In this section, he discusses how political movements can foment change, and attempts to get closer to the core of what Occupy Wall St is about. The US has over 100 million people living in poverty.

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David Barsamian Talks to Richard Wolff – Part 4 of 8

In this section, he discusses the expansion of the movement, through alliances with labor groups, low-income communities, etc., as well as the trend of "uneven development" that has been plaguing some U.S. cities for the past few decades, and many more for all of U.S. history.

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David Barsamian Talks to Richard Wolff – Part 5 of 8

In this section, he discusses the myth of wealthy, supply-side "job creators," the public subsidization of the private sector, the economics of the weapons industry, government monopolies and the government's decision to make taxpayers the owners of the banks' "toxic assets."

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David Barsamian Talks to Richard Wolff – Part 6 of 8

In this section, he discusses the politics of being an economics professor.

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David Barsamian Talks to Richard Wolff – Part 7 of 8

In this section, he discusses how the capitalist system sustains itself.

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David Barsamian Talks to Richard Wolff – Part 8 of 8

In this section, he discusses the undue influence the richest interests, corporate, group and individual, have over American electoral political systems and outcomes, and suggests how to break that influence.


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It's entertaining to watch The Kudlow Report on CNBC and also the group of clueless people that he has on a regular basis on his TV show.

If the US government would follow their advice of these clueless people on anything, in no time the US economy would look like Greece.

These guys can't figure out why the US economy is imploding, when a big chunk of the US economy depends on consumer demand, and the average daily consumer spending was down around 25 percent, and it's getting worse. (About 2 million people get cut off of unemployment, then they are classified as being in the black hole, they don't exist anymore, and they believe there's no economic consequences – and the artificial unemployment rate gets better...)

On point 9:00 of this video Richard Wolff mentioned that only 43.7 % of adults had full time employment August 2013 compared with 45 % in August 2012.

Average daily consumer spending in September 2008 in the US $ 113.00 and 5 years later in September 2013 it was $ 86.00 – during that period the average daily consumer spending was down 23 percent.


Global Capitalism October 2013 Monthly Update – October 9, 2013

Time: 1 hr. 52 min.


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Richard Wolff: Arise Xchange, Government Shutdown – October 3, 3013

Time: 7 min.

Richard Wolff, Professor of Economics at University of Massachusetts and New School University talked about the economic impact of the government shutdown with Andrew Schmertz.

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State of Democracy: Richard Wolff – October 3, 2013

Time: 1 hr. 30 min.

Can Democracy Cure Capitalism?


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Richard Wolff: Corporate rule hurts the US more than shutdown – October 18, 2013

Time: 12 min.

The federal government reopened Thursday, as the country narrowly avoided defaulting on its debts, which could have led to a global financial meltdown. Yet, instead of focusing on the financial and global consequences of congressional inaction, politicians in Washington seemed more concerned with furthering their political agendas. Earlier in the week, President Barack Obama said he hoped that Congress wouldn't take a crisis-driven approach in the future, such as when the continuing resolution and the debt ceiling deals run out in early 2014. RT's Ameera David talks to Richard Wolff, professor of economics emeritus at UMass-Amherst, about how governing by crisis and brinkmanship is having a negative effect on the US economy.


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The Real News Network – October 16, 2013

Richard Wolff: The Tea Party and the Suppression of the Left

Time: 9 min.


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Cary Harrison Show - October 14, 2013

OUR ECONOMY FOR DUMMIES - Prof Richard Wolff in a fast, brilliant, basic nutshell

Time: 1 hr.


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MediaChannel.org – September 20, 2013
Richard D. Wolff on Economics in Media and the Economy – Part 1 of 2

Time: 11 min.

Richard D. Wolff, Professor of Economics Emeritus, University of Massachusetts, Amherst and Visiting Professor in the Graduate Program in International Affairs of the New School University joins us to discuss the narrow coverage of economics in media, our fictional economic recovery, Occupy Wall St., and the structural problems that perpetuate a vast disparity of wealth.


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MediaChannel.org – September 20, 2013
Richard D. Wolff on Economics in Media and the Economy – Part 2 of 2

Time: 13 min.


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The Big Picture – September 17, 2013

Dr. Richard Wolff on the Bankster's Great Recession

Dr. Richard Wolff, Democracy At Work, joins Thom Hartmann. It's been five years since Bush's financial crisis ushered in the most serious economic downturn since the Great Depression. But how much has really changed? And what can we do to make sure Wall Street doesn't bring down the economy again?


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Global Capitalism: September 2013 Monthly Update – September 10, 2013

Time: 1 hr. 36 min.

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Reaganomics: 32 Years of Failed Policy | Interview with Richard Wolff - August 14, 2013

Time: 9 min.


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Democracy Now - July 25, 2013

Richard Wolff: Detroit a "Spectacular Failure" of System that Redistributes Pay From Bottom to Top

Time: 13 min.

Detroit's bankruptcy "is an example of a failed economic system," says economist Richard Wolff, professor emeritus of economics at University of Massachusetts. "There are so many other cities in Detroit's situation, that if the courts decide that it is legal to take away the pension that has been promised to and paid for by these workers, you have [legalized] theft. It is class war, redistributing income from the bottom to the top."


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Richard Wolff on the future of economics in America – July 10, 2013

Time: 10 min.

Richard Wolff's critique is simple American capitalism is dying. And his answer is simple, too the taking over of workplaces


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Professor Richard Wolff A Cure for Capitalism

Time: 2 hrs. 4 min.

The Hillside Club: Professor Richard D. Wolff presents RICHARD WOLFF A Cure for Capitalism on Thursday, September 13, 2012


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Richard Wolff presents Democracy at Work: A Cure for Capitalism at the Baltimore Radical Bookfair

Called the leading social economist in the nation by Cornel West, Richard D. Wolff, professor of economics at the New School, host of WBA Is Economic Update, and prominent critic of capitalism lays out his vision for a world without bosses, in which workers run their own workplaces democratically. Richard Wolff, Democracy at Work: A Cure for Capitalism


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The Guardian – June 24, 2013

Yes, there is an alternative to capitalism: Mondragon shows the way – By: Richard Wolf

Why are we told a broken system that creates vast inequality is the only choice? Spain's amazing co-op is living proof otherwise.

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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Richard Wolff: Economic Update - Economic Realities – June 20, 2013

Time: 1 hr.

This week's show has Richard D. Wolff giving updates on the G8 summit and Bernanke "shows", Turkey vs Brazil protests, Europe's austerity, and drug companies "pay to delay." The major discussions are on the current crisis in financing public education and of lotteries as disguised tax increases. Finally, Wolff responds to listener questions on job losses from progress, worker coops' survivability, capitalism and democracy, and campaign financing reform.


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Excellent lecture by Richard Wolff

Global Capitalism: June 2013 Monthly Update – June 12, 2013

Time: 1 hr. 50 min.


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June 13, 2013

After watching this presentation by Richard Wollf representing a perspective from the left, this lecture becomes a complement to what James Dale Davidson has to say representing a perspective from the right. The result is a very bleak, gloomy and dismal prospect for the future of the US economy and financial system.

Richard Wollf places the US economy in a coma with his presentation, and James Dale Davidson pulls the plug on the US economy with his book, and let the patient die a very quick death.

The American people should read this book for them to be able to understand what is behind the collapsing US economy, and financial system, and there's nothing that can be done about it to reverse that trend: "Brazil is the New America" - How Brazil Offers Upward Mobility in a Collapsing World" By: James Dale Davidson.

I finished reading the book, and the author not only gives an excellent outlook for the Brazilian economy in the coming years, but at the same time the book gives a lot of detail about the collapsing US economy, and why this current great depression it will be deeper and longer than the Great Depression of the 1930's for the United States.

A better title for the book should be “The Collapsing US Economy” - And why this current great depression it will be deeper and longer than the Great Depression of the 1930's for the United States.

"Brazil is the New America" - How Brazil Offers Upward Mobility in a Collapsing World" - By: James Dale Davidson


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Richard Wolff Discusses Global Wealth Inequality – May 28, 2013

Time: 4 min.

Anchor Mike Walter and economist Richard Wolff discuss wealth inequality throughout the world.


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Global Capitalism - May 2013 - Richard D Wolff – May 15, 2013

Time: 1 hr. 25 min.

Global Capitalism: A Monthly Update (May 2013)


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Why the Economic Crisis Deepens – April 24, 2013

Time: 11 min.

Economist Richard Wolff: Why the Economic Crisis Deepens...


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Democracy Now – March 25, 2013

Richard Wolff: Could Bill O'Reilly Pass Economics 101?

Economics Professor Richard Wolff challenges Fox's Bill O'Reilly's recent assertion that Cyprus and Greece are facing economic problems because they are "nanny states." "[Bill O'Reilly] gets away with saying things which no undergraduate in the United States with a responsible economics professor could ever get away it," says Wolff, who claimed the true nanny states in Europe -- Germany and the Scandinavian countries -- are prospering.


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Excellent interview of Bill Moyers with Richard Wolff


Bill Moyers interviews Richard Wolff – March 22, 2013

Time: 45 min.

Richard Wolff's smart, blunt talk about the crisis of capitalism on his first Moyers & Company appearance was so compelling and provocative, we asked him to return. This time, the economics expert dives further into income inequality, analyzing the widening gap between a booming stock market and a population that increasingly lives in poverty. Wolff also takes questions sent in from around the world by our viewers.

Wolff taught economics for 35 years at the University of Massachusetts and is now visiting professor at The New School University in New York City. His books include Democracy at Work: A Cure for Capitalism and Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It.


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Richard Wolff: A Cure for Capitalism – March 14, 2013

Time: 2 hrs. 7 min.

After five years of deepening crisis, failed "solutions," and aborted "recoveries," millions see a capitalist system no longer serving most Americans. It's time to demand a cure big and bold enough to work. Richard Wolff spoke on to hear that cure presented, explained, and justified. Instead of resignation to economic decline, come and help build real and positive change.

This evening was the launch Wolff's latest book, Democracy at Work: A Cure for Capitalism released September 1st, 2012 by Haymarket Publishers.

Filmed by LinkTV September 6, 2012


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Economist Richard Wolff

'Spending cuts won't solve problems, will only damage US economy' – March 1, 2013

Time: 5 min.

On Capitol Hill, there's still no deal in sight to avert the 85-billion-dollars' worth of cuts which will kick in later on Friday. It's known in Washington as the 'sequester' and would see significant reductions on military and domestic spending. But Republicans and Democrats just can't agree on what to do. President Obama says U.S. will get through the deep budget cuts if it has to, but admits the economy will get even worse. Economist Richard Wolff says the American people should prepare for the worst.


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Richard Wolff on the Charlie Rose Show - September 12, 2012

A sure sign of the changing consciousness and a growing presence of an economic analysis systemically counter to the mainstream.


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Richard Wolff: Capitalism Hits the Fan - December 2, 2009

Time: 1 hr. 45 min.

Economist, author, Professor emeritus UMass, Amherst, Richard Wolff, speaks about the current economic crises, its' roots and what we can do about it.

Filmed by Paul Hubbard at Brown University, Providence RI on December 2, 2009


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Italy's Marcora law


Richard Wolff on Curing Capitalism
http://billmoyers.com/segment/richard-wolff-on-capitalisms-destructive-power/

March 22, 2013

Richard Wolff’s smart, blunt talk about the crisis of capitalism on his first Moyers & Company appearance was so compelling and provocative, we asked him to return. This time, the economics expert answers questions sent in by our viewers, diving further into economic inequality, the limitations of industry regulation, and the widening gap between a booming stock market and a population that increasingly lives in poverty.

“We ought to have much more democratic enterprise,” Wolff tells Bill, in response to a question from a viewer in Oklahoma. “We ought to have stores, factories and offices in which all the people who have to live with the results of what happens to that enterprise participate in deciding how it works.”

Addressing a question about capitalism and climate change, Wolff says, “Capitalism is a system geared up to doing three things on the part of business: get more profits, grow your company and get a larger market share… If along the way they have to sacrifice either the well-being of their workers or the well-being of the planet or the environmental conditions, they may feel very bad about it — and I know plenty who do — but they have no choice.”

Wolff taught economics for 35 years at the University of Massachusetts and is now visiting professor at The New School University in New York City. His books include Democracy at Work: A Cure for Capitalism and Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It.


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Italy's Marcora law (law 49/85)

...State and local governments could and should be working instead to offset the ongoing US economic decline as corporations move and look elsewhere for workers and customers. State and local governments could borrow and fund new local industries of a democratic sort where workers function as their own boards of directors. These enterprises could function in far greater harmony with the natural environment than profit-driven enterprises did; they could focus locally to save on the wasteful energy costs of producing far away for consumption here; they could generate far more productivity because workers' lives would henceforth include not only their particular jobs in each enterprise but also democratic participation in the the tasks of directing, designing, and developing what would, for the first time, really be "their" enterprises. As was pioneered by the Marcora Law in Italy, instead of giving unemployment compensation to workers laid off by departing corporations, provide them with the capital to start and run democratic businesses that will employ and pay them. Such steps could become parts of a genuinely progressive agenda needed now more than ever.

Instead of shrinking in the wake of private corporations' decisions to focus elsewhere - what the conservative agenda seeks - state and local governments might become a social force to restart such new and better kinds of enterprises, helping them to grow and serve our economy's actual needs. Imagine a mass social movement from below that insisted on such changes in the nature of state and local governments.


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Marcora Law


The Marcora Law - Multiplying the employees’ stakes

Italy’s Marcora Law (law 49/85) allows redundant workers to use their accumulated unemployment benefit to capitalise a buyout co-operative. It thus forms part of the welfare bridge from unemployment to self-employment.


A summary of the Marcora Law’s provisions

  • FONCOOPER, a fund for the general promotion of co-operatives
  • CFI, a revolving loan fund invested in phoenix co-operatives
  • employees’ investment matched threefold
  • maximum of three years’ unemployment benefit can be capitalised
  • corporate investors permitted up to 25%, providing networking support
  • specialist monitoring and advisory body established
  • €40m invested
  • 89 businesses and 3,100 jobs saved (by end 1992)
  • 10% failure rate of co-ops
  • 5% of capital and jobs lost through failures

The institutional set-up


The Marcora Law was passed on 27 February 1985, and provided state backing for two funds to support co-­operatives. The first, FONCOOPER, is a general fund for the promotion and development of all types of co­operatives. The second, the Compagnia Finanziaria Industriale (CFI), is a special fund to help save companies in crisis. It invests only in new co­-operatives set up by employees who have been laid off when companies close or downsize. CFI was capitalised by the state, and is managed on an ad hoc basis by the co­-operative federations.

CFI invested in the share capital of phoenix co­operatives, up to three times what the employees invest, up to a maximum limit of three years' unemployment benefit. In return for this capital input, the employees lost their right to unemployment benefit during that period, should the co­operative fail.

At the end of the period, the employees could buy the shares at face value from the fund, or they could be sold externally. The law also introduced the innovation that other outside shareholders – co­operatives, private companies or public bodies – could also contribute up to 25% of the co­operative's share capital. Up to this point, private enterprises had not been able to invest in co­operatives in this way in Italy


Encouraging risk taking and adequate capitalisation

The effects of the Marcora Law were as follows:
  • It helped workers save their jobs by taking the entrepreneurial risks themselves.

  • It incentivised employees to contribute capital, because the amount of outside financing was directly related to the workers' own shareholdings. This was important because it created co­operatives which were adequately capitalised, and many co­operatives are undercapitalised. The average employee shareholding in co­operatives supported by CFI was €5,500, and in cases is as high as €15,000, which meant the co­operatives were strong, had a good relationship with their banks and could grow faster.

  • Thirdly, the link between the external capitalisation and unemployment benefit meant that there was a powerful incentive to make sure the enterprise worked; it also meant that workers were unlikely to start a co­ operative which was likely to fail.
About a quarter of CFI-­financed co­operatives have some corporate shareholding. In some cases this is a public body or a local financial organisation, and this helps the local community get involved. In other cases, it is other co­operatives which see such a shareholding as offering the potential for synergy and ways of moving forward with greater solidarity. Or it may be a private company that is seeking the benefit of organisational or industrial synergy. In general the involvement of non­co­operative shareholders has been beneficial, as it has brought in useful experience, prevented mistakes being made, and has stopped the co­operatives from becoming isolated. On the other hand there have been cases where outside shareholders have tried to take advantage of the inexperience of the co­operative members, and have tried to divide them up.

CFI feels that overall the Marcora Law worked very well. By 30th June 1992 it had invested €40 million in 89 co­operatives. These co­operatives employed more than 3,100 workers, 80% of whom were members. Their turnover exceeded €230 million. There were of course failures, and in 1992 nine co­operatives, 10% of the total, were in liquidation. However these were the smaller co­ operatives, and represented only about 5% of the capital and 5% of the jobs. Furthermore, this loss was compensated by asset and employment growth within the successful co­operatives. This experience shows that the availability of capital is a necessary condition for setting up new co­operatives, but is not sufficient on its own – other types of support are also necessary.


The benefits of a specialist institution


One decisive factor in this success was that the state aid was made available in the form of equity, not grant, and has been administered by a specialist institution. This meant firstly that the co­operatives had a partner who took an active interest in their performance, and who could bring its contacts and experience to assist the co­op. Secondly, the dividend paid on the investments (about 15%) was returned to the movement, to help promote the growth of new co­operatives. CFI's monitoring, training and support was very similar to that provided by the Caja Laboral Popular in Mondragón.

The provisions of the Marcora Law were originally limited to an experimental period, but its success was such that parliament extended it for a further two years. However CFI was aware of the danger of becoming reliant on public financing, and actually refused additional public funding of €30 million because the government wanted it to act too hastily; it preferred to forego the extra money rather than invest in unsound co­operatives and bring the mechanism into disrepute.

This experimental law was instituted to provide an option for people who were made redundant, but its value went beyond that. First, it is important that among the workers there is a nucleus that is prepared to become entrepreneurs. Secondly, the Marcora Law provided the means to surmount some of the traditional obstacles that new co­operatives face: it provides incentives that help co­ops succeed. The Marcora Law provides a very good example for pan­European legislation.


References


Source: Alberto Zevi, Compagnia Finanziaria Industriale (CFI) at the Strategies for Democratic Employee Ownership conference organised by Industrial Common Ownership Movement (ICOM) in London on 13-14 November 1992. Report by Toby Johnson. ISBN 1 870018 09 5

Text also quoted in Insolvency, Employee Rights & Employee Buyouts. A Strategy for Restructuring by Anthony Jensen, Ithaca Consultancy for the Common Cause Foundation, available at: http://www.efesonline.org/LIBRARY/2006/Insolvency,%20Employee%20Rights%20&%20Employee%20Buyouts.pdf


Description on Confcooperative site:
http://www.confcooperative.it/CD%20Finanziamenti/capitolo%20VI.swf


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Shift Change: A new film on Mondragon style co-ops in the US


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Intro to Mondragon
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How Worker-Owned Companies Work
Moyers & Company – March 22, 2013

Economist Richard Wolff is a proponent of democracy at work: an alternative capitalism that thrives on workers directing their own workplaces. In the documentary film Shift Change, producers Mark Dworkin and Melissa Young tell the stories of successful cooperative businesses from Spain to San Francisco. We caught up with Dworkin and Young to find out what makes cooperative businesses work.


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SHIFT CHANGE

SHIFT CHANGE: PUTTING DEMOCRACY TO WORK tells the little known stories of employee-owned businesses that compete successfully in today's economy while providing secure, dignified jobs in democratic workplaces.

With the long decline in US manufacturing and today's economic crisis, millions have been thrown out of work, and many are losing their homes. The usual economic solutions are not working, so some citizens and public officials are ready to think outside of the box, to reinvent our failing economy in order to restore long term community stability and a more egalitarian way of life.

There is growing interest in firms that are owned and managed by their workers. Such firms tend to be more profitable and innovative, and more committed to the communities where they are based. Yet the public has little knowledge of their success, and the promise they offer for a better life.

Amongst the organizations featured in SHIFT CHANGE are:

Mondragón Cooperative Corporation - Begun in the 1950s, the Mondragón co-ops have transformed a depressed area of Spain into one of the most productive in Europe with a high standard of living and an egalitarian way of life. They are owned and managed by their workers. Seeing the achievements of the MCC helps to overcome the idea-widespread in North America-that worker run cooperatives can only exist on the economic fringe.

The Evergreen Cooperatives in Cleveland, OH - This is an ambitious urban redevelopment model, directly inspired by Mondragón, where local institutions and public officials are supporting green cooperatives of previously marginalized, predominantly African American workers, who provide commercial laundry services, install solar energy systems, and grow vegetables in vast urban greenhouses.

Arizmendi Association of Cooperatives, San Francisco, California - Started 30 years ago, there are now six of these independent worker owned and managed cooperative bakeries that work together to provide the financial and legal services they need, and to incubate new coop bakeries.

Equal Exchange, Boston MA: Founded in 1986, Equal Exchange is one of the largest roasters of fair trade coffee in the world.




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Watch a 2012 interview Democracy Now! host Amy Goodman did with Mikel Lezamiz, director of Cooperative Dissemination at the Mondragon Cooperative Corporation in Spain’s Basque Country. He described how the project relies on a participatory model in which the workers are the cooperative’s members.


March 25, 2013

Understanding the Mondragon Worker Cooperative Corporation in Spain’s Basque Country

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman. We’re in the Basque region of Spain, not far from one of the largest worker cooperatives in the world. It’s called Mondragon. And we’re joined right now by Mikel Lezamiz. He is director of Mondragon Cooperative Dissemination. We are sitting in his backyard in Busturia, Spain.

Welcome to Democracy Now! It’s great to have you with us. Explain what Mondragon is, how it got started.

MIKEL LEZAMIZ: Mondragon started in 1956, creating the first industrial cooperative. But before that, Father Arizmendiarrieta, the leader, the priest, who started with all the projects, started in 1943 creating the school, the technical school. And after that, the students of this school, he pushed to five people to create the first cooperative in 1956—the name at that time, Ulgor; today, Fagor.

AMY GOODMAN: And why did this priest want to start a cooperative? Talk about the political times here in Spain.

MIKEL LEZAMIZ: OK. In that time, it was hard times after the civil war that finished in 1939. And Father Arizmendiarrieta went to Mondragon in order to be a priest, but he started with a school. And he wanted to—first of all, before to create the cooperative, he went to the biggest company in Mondragon to—with the directors, telling to give the possibility to all the workers to be part in management, in profits and being ownership. That was 1955. They didn’t assent him, and for that reason he pushed to some workers to set up their own cooperatives where everybody can participate in management, in profits and being ownership.

AMY GOODMAN: And these were graduates of the school that he had set up, the technical college.

MIKEL LEZAMIZ: That’s true. They were engineers in that times, and they were working in that big company. But in the company, they didn’t assent, and for that reason he pushed to these five people to create their own projects. The idea was—and it is—that the workers, everybody, has to be the director or has to be the entrepreneur or has to be the person who makes the decision and not to work for anyone. So we have to part—we have to have parts in management, in profit and being ownership. That is the most essential idea. Before, there were a lot of ideas of the Catholic Church innovate to humanize the factories, to humanize the industrialization at that times. But Father Arizmendiarrieta was—went more than only humanizing. So he wanted to give the power to decide the future each one, not depending from another manager or another capitalist.

AMY GOODMAN: So these were very difficult years. Franco was in power. People felt marginalized. They didn’t have jobs. So this priest comes into this town, sets up a college, and then tries to set up this cooperative. But didn’t he need a bank to support it?

MIKEL LEZAMIZ: Yes. After three years—that was in 1959—so, they started the first cooperatives in 1956, and after, they create another three cooperatives. And Father Arizmendiarrieta had the idea that we have to set up the cooperative bank in order to create new cooperatives and to support the cooperatives with financial support. But not only with the financial, most very clever, creating the entrepreneurial division inside that cooperative bank in order to research the market and to decide, OK, which kind of jobs we can create, which kind of product we can produce. And after that, from this entrepreneurial division, we help—or, they help to create new cooperatives. And after the bank, the entrepreneurial—no, the bank division support financially, but it was a very good idea to create the bank with this entrepreneurial division to create new cooperatives.

AMY GOODMAN: Now explain, in these first years, what were the Mondragon cooperatives? What were they making? What were the products they were coming out with?

MIKEL LEZAMIZ: Yes, in Fagor, domestic appliances, they produced domestic appliances. But the first one was a cook. And—

AMY GOODMAN: A stove?

MIKEL LEZAMIZ: A stove, a stove. And after that, they start producing the refrigerator, the washing machine and water central heatings. And now is the—

AMY GOODMAN: So why would people buy Mondragon products?

MIKEL LEZAMIZ: Because good quality and good price and good service. I think that all over the world and everybody buy because good quality and price and service. Sometimes you can buy because philosophy, but no, but if you have a bad quality or it’s more expensive, you don’t want to buy. So, for that reason, we always—we are trained to produce always with quality, train to give the best price, you know, to permit to everybody to buy this kind of good for their house. And after that, we have to give the good service.

AMY GOODMAN: Now, people probably, if they’ve heard of co-ops, have heard of food co-ops, where a community gathers together, and they provide a couple of hours a week to make a cooperative work, and that’s a lot of human effort. But Mondragon is also highly technological. You are making products. Can you talk about how you came to be on the cutting edge of technology? It wasn’t just people working in a good-natured way, in a cooperative way together.

MIKEL LEZAMIZ: Yes. In fact, we have at this moment 14 research and development centers, in order to help to the different sectors that we are producing different goods or our products. Innovation was a very important value for us, and today it is. And today maybe it’s more than before also, in order to be profitable and [inaudible]. But always we have this idea that, OK, education is very important for people, and as [inaudible] for enterprise and for the community. But after the education, innovation is very important. Social responsibility is another value. And cooperation and solidarity with the community is very, very important. But innovation, it’s a very important feature inside Mondragon. And from the first ideas, Father Arizmendiarrieta had this idea to create the research center in order to help and to be independent from the American or German or Japanese technology.

So we have to be—we don’t have to depend from different technologies. And, first of all, maybe they start buying the goods or buying the rights to produce, but at this moment, for example, we have at this moment 716 patents, worldwide patents, that give us the possibility to be independent from another high-technology companies or cities or countries. So, innovation is very important.

AMY GOODMAN: I was just speaking to lehendakari, the president of the Basque region, Patxi López, talking about Mondragon and its importance, one of the largest businesses in the Basque region. Can you talk, Mikel, about the Basque quality, if you will, of the Mondragon cooperative? I mean, why it grew out of the Basque region, for people outside of not only the Basque region, but Spain?

MIKEL LEZAMIZ: OK, well, first of all, I have to tell you that I believe and we believe that everybody can create cooperatives, and it’s possible to create cooperatives, because, as you know, cooperatives idea, it didn’t start in Mondragon. Cooperatives started in the U.K., and before to the Basque Country, they were in France, in the States and wherever. But after that, what about the cooperative culture, what about the Basque culture connected with the cooperatives? And, OK, yes, we have in fact the internal, the political democracy. In the last 10 centuries also, it was here. They were more or less [inaudible] democracy, because in each town and in each provinces, we choose. But 10 centuries ago, we choose the—or they choose the boss or the—

AMY GOODMAN: The leader of the town.

MIKEL LEZAMIZ: The leaders, OK. But also, today, we think that one of the very important features of the Basque region is the solidarity, in order to—in order to help each other. But this is not a paradise. The Basque Country is not a paradise. And Mondragon cooperatives is not a paradise. And we are not angels. And so, sometimes when we have to tighten the belt, people start having problems and speak, and we are very critical also about all the problems that we have. And so, I think that cooperatives is possible all over the world. Basque people are better than the others? No. We are normal people.

AMY GOODMAN: No, in fact, it didn’t rise out of a paradise; just the opposite. You’re talking about Spain during Franco’s years, and perhaps the most repressed area in Spain was the Basque region for Franco.

MIKEL LEZAMIZ: Yes, that’s true.

AMY GOODMAN: The bombing of Guernica, for example—

MIKEL LEZAMIZ: Yes, that’s true.

AMY GOODMAN: —in 1937, 75 years ago.

MIKEL LEZAMIZ: And this kind of problems maybe gave us the possibility to work together and to be more in solidarity, more solidarity. And that will be one of the features that permit us to create this kind of a cooperative project maybe.

AMY GOODMAN: Mikel, can you talk about the response of small businesses in the area, because Mondragon is big now? It’s not just the alternative; it is the power here in Basque region in Spain. How many people work now for Mondragon cooperatives?

MIKEL LEZAMIZ: Yes, in Mondragon cooperative groups, we have 83,000—83,000 workers, full time. And after, we have another 15,000 or 20,000 working part time, mostly in the supermarket. So, we are close to 100,000 workers altogether, full time and part time. And we have 120 cooperatives. So, cooperatives are not very big. But working together and with the close inter-cooperation that we have, we are now the best, the best now, the biggest, the biggest company in the Basque Country. And speaking about jobs and employment, we are the fourth biggest in Spain and among the seven biggest in sales.

AMY GOODMAN: And the largest cooperative in the world.

MIKEL LEZAMIZ: OK, well, there are—well, but, for example, in U.K., they design a cooperative that the name is the Co-operative Group, that is a supermarket. And after that, they have some bank services and a funeral services. And they are, for example, 110,000 workers. In that case, it’s a consumer cooperative, so the consumers or the clients are their members. In our case is that we are the workers, and we are the members.

AMY GOODMAN: How do small businesses in Spain compete with Mondragon, now one of the largest businesses in Spain?

MIKEL LEZAMIZ: OK, for us, the first market is not Spain. It’s Europe. So we are competing with—because we are selling at this moment 70 percent of our products all over the world. We are exporting to 150 different countries. And, for us, yes, the first foreign market is Europe. And also, Spain is important for us—yeah, that’s true. But I think that the other companies feel or think that, OK, we are working well, because we are working all together, because the most important feature or characteristic of Mondragon is that these 120 cooperatives, that are big and small cooperatives, are working together, and we set up one group, one corporation, but we pass people from one to the other cooperatives. We pass also money from one to the other cooperative. We pass cash, liquidity, from one to the other cooperatives, and also innovation. And that is very important in order to overcome the economic crisis. So in this moment, a lot of small companies also are thinking or think that Mondragon is going well because we can compete all over the world, because the internal amount of the exportation is very high and because we are overcoming much better than the others, in general, the crisis.

AMY GOODMAN: Well, that’s very interesting, the financial crisis and how it’s affected you. And I think this would be very interesting for people to hear in the United States. You have large banks in the United States that are only getting larger and only more profitable for the top managers, but are foreclosing on people’s houses at a very high rate, etc. How did Mondragon respond to the financial crisis, how you fared during these times?

MIKEL LEZAMIZ: Yes, we believe that, first of all, yesterday we were 430 directors of Mondragon together in a congress that we set up every year, speaking of the future, about the challenge that we have for the next years. And we believe, there also, we were—we clever said that, OK, we are going to overcome the economic crisis because this inter-cooperation, the relation between cooperatives, because if one cooperative have some problems—

AMY GOODMAN: Give us an example of a cooperative, what it makes, and another cooperative, what it makes. And—

MIKEL LEZAMIZ: For example, at this moment, we have 250 people relocated in another cooperative. They don’t have no jobs in their own cooperatives.

AMY GOODMAN: What was that cooperative doing? What was it making?

MIKEL LEZAMIZ: No, different kind of cooperatives. For example, in the domestic appliances sector, from Fagor, that they are now suffering a big problem because the lack of construction in Spain, and in Europe also, because the economic crisis. And Fagor domestic appliances, they are selling for new apartments and also to repair, that does one. But in this case, Fagor is suffering this economic crisis, and some of these workers are working in another cooperative.
AMY GOODMAN: And what is that cooperative?

MIKEL LEZAMIZ: For example, machine tools sectors, car components cooperatives. Yeah, in different cooperatives. And so, that is a very important idea. First of all, we are passing money, cash, liquidity, from one to the other cooperatives, because, as you know, the lack of liquidity from the banks, it’s very high. And some of our competitors are suffering. And some of them, they are going down and closing because this lack of liquidity. Now, we don’t have this kind of problem, because it’s very common to pass money from one to the other cooperatives, to pass liquidity, cash, from one to the other cooperatives, in order to overcome the economic crisis.

AMY GOODMAN: So here you are in Spain really actually thriving, certainly getting by, as Bankia, the largest bank conglomerate, has—is going under, involved in perhaps the biggest banking fraud in Spain’s history.

MIKEL LEZAMIZ: And in fact, for example our cooperative bank, Caja Laboral, that is the second-biggest in the Basque Country, and in the north of Spain, from Madrid to the north of Spain, it’s the—among the second-, the third-biggest bank, is going very well. In fact, all the data that we have are, in general, much better than the banks on the—most of the banks. And it’s because, in this case, we—in the Basque Country, there is not so big a problem with the construction, because the problem of the real estate and the construction was more in the east part and the south part of Spain. Here, we are not—we don’t have this kind of problems connected also with the banks. And also, it’s because the bank also is more connected with industry. And as you know, the Basque Country is more industrial than the construction or than the others. It’s the most influence or the most important industrial area of Spain, the Basque Country.

AMY GOODMAN: Mikel, can you explain how the management structure works? What does it mean to say worker-owners?

MIKEL LEZAMIZ: OK. Yes, we set up the most important things, therefore, in the cooperatives is the general assembly, the general assembly formed by all the workers that are the members of this cooperative. For example, going to Fagor domestic appliances, they are at this moment 2,500 workers, producing washing machine, dishwashers, the refrigerator, and then so on—2,500. And they set up at least once a year the general assembly in order to make the most important decision and decide the strategy, the annual report, and to approve the annual report, and then so on. And in this case, it’s the general assembly who makes the decision. But after that, we choose the governing council—the board of directors, you say—the governing council, that in the case of Fagor, they have 12 people—president, vice president, secretary and another nine. In the small cooperatives, there are maybe only three or maybe five, seven, nine; or being big, 12 people. And this governing council set up at least once a month in order to make the decision every month. And they choose the general manager, the CEO, in order to execute and to manage the company, and in this case, to propose the important decision. But it’s the governing council that makes the decision. It’s not the general manager. And after that, the general manager has the finance director, the people director, production director, marketing director, as they need.

AMY GOODMAN: And how do you share the profits?

MIKEL LEZAMIZ: OK, from the gross profit in each cooperative, they have to put some money in the cooperative—in the corporate, Mondragon corporate corporation. So, for example, all the cooperatives has to put 10 percent of their gross profits in Mondragon investment fund. This investment fund is to create new cooperatives or to help the cooperatives to set up new business or for the internationalization. If one company needs to buy a factory in the States, or they want to create a new factory in the States, the cooperatives is going to put 60 percent of the investment, and 40 percent is put from this Mondragon investment fund. They have to put another 2 percent in Mondragon education, to help mostly to the university, Mondragon University, and another 2 percent in Mondragon solidarity fund. This is—this fund is in case of losses of each cooperative, solidarity fund. But after that, they have to pay their taxes. And after paying taxes, they have their net profits.

How we share the net profits: 10 percent should go, because by law it’s compulsory to do so, 10 percent goes to the fund of education and for the society. This is to help the children or the NGOs or support for the society. Each cooperative, they say how they are going to share this 10 percent. And after that, we send another 45 percent to the fund or reserve of cooperatives. This is to invest in the cooperatives to work every one all the year. And the other 45 percent are returns, returns to workers.

But in this case, we don’t get these returns—these dividends, as you say; we say "returns"—because these returns is to work. And we don’t get these dividends in cash. We capitalize. So, everyone—we have the initial capital, and after that, all this capital, all these returns that we share between us, and I’ll get this money when I retire. But in the meantime, my company is using this capital, this investment, and that is another way of overcoming the economic crisis. One of the most important features of Mondragon is that 90 percent of the profits, we reinvest, because only 10 percent goes to the society directly, and the other 45 goes to the cooperatives to invest in new product and new machines and then so on, and the other 45 is my money, but that is inside the cooperatives, and the cooperatives invest. So, 90 percent of the profits, we reinvest in order to create employment.

AMY GOODMAN: Did you have to decide about job cuts or pay cuts during the crisis?

MIKEL LEZAMIZ: We never fire any member of Mondragon—we never—in these 56 years, because we pass, and before of going unemployed, we pass from one to the other cooperatives. At this moment, only 250 are relocated. But before, I can remember that in 1991, ’92, ’93, that were a very high crisis, in that moment we had more than 2,000 people relocated in the other cooperatives in order to overcome the economic crisis. And after that, in 1994, we started growing, and now we are more than before.

AMY GOODMAN: Mikel, Mondragon has an actual MBA program for cooperatives?

MIKEL LEZAMIZ: We have, yes. And I have already made it, the MBA, master’s business administration.

AMY GOODMAN: Where?

MIKEL LEZAMIZ: In Mondragon University. In Otalora, in my case, I made it in Otalora. Otalora, it’s our management and cooperative training center that belongs to MCC, but the teachers are connected with the university, and the title is given by the university. But after that, there are another MBA in different universities also here—in Bilbao, for example—and in the public universities. And it’s possible to do the MBA in management, cooperative management.

AMY GOODMAN: Your wife teaches in Mondragon. She teaches kids. Does she teach a Mondragon philosophy of cooperatives? Do the kids learn about what it means to live in a cooperative way in school?

MIKEL LEZAMIZ: OK, we don’t have any subjects specific with—that the name is "cooperative education," no. Only in the university, in the last year of the engineering school, but only in the engineering school, we have this subject that is cooperative education. But in the other [inaudible] schools, in the other faculties and also in the primary school and secondary school, we don’t have any subject that the name is "cooperative education." But we try to teach them and to educate them in cooperative values, cooperative values that are transpersonal values, not only the knowledge, but also we try to, for example, working together and giving them more and more autonomy, or giving them more and more participation possibility, because, for example, in the university, the students are members of the university. Not only the workers or not only the teachers and the staff are members; also the students—the students are the members, and after that, the companies, cooperatives. But also, conventional companies, they are not allowed, but all of them, they can be part of the university.

And in this case, students are participating in the cooperatives. And after that, all the works they have to do, they work in groups. And so, the cooperative values, we try to implement, to integrate in each students working every day.

AMY GOODMAN: How do you deal with having to manufacture products outside of the cooperative? You have factories in other countries. Where are they?

MIKEL LEZAMIZ: Yes, we have at this moment 77 factories overseas, all over the world. But mostly—most of them are in France and in Europe. But we have also in the States, in Brazil, Mexico, China, India. But—

AMY GOODMAN: Where in the United States?

MIKEL LEZAMIZ: We’re in Arkansas, for example.

AMY GOODMAN: Arkansas.

MIKEL LEZAMIZ: Little Rock, yes. And—but these companies, these factories, are not cooperatives yet. So, most of them, most of the workers that are abroad, are not members; they are employees. We have a plan, and we started before, two years before the economic crisis. We started with the pilot projects—one of these in Poland, another one in Mexico, and another one in Brazil—speaking with the trade unions, speaking with the workers, white-collar worker, blue-collar workers, and also with the administration, in order to give them the possibility to participate in property, so being ownership, in management and in results. But because the economic crisis, because this is a process, it’s a long process, and that it takes at least five years, and after two years, in 2008, start the economic crisis, and overseas, we have stopped. We have already started becoming cooperatives in Spain, in the Basque Country and in Spain, but not yet in the other parts of the world.

AMY GOODMAN: And where do you unions fit in? I mean, when you started during Franco’s time, unions were forbidden, and maybe Mondragon cooperative was an answer to that. But now, working with unions in this country and around the world?

MIKEL LEZAMIZ: OK, well, we have—also here, we have good relation with the trade union. As you know, here in a cooperative, trade union don’t work, because it’s the general assembly of all the workers who makes the decision, the most important decision. And, for example, how much we are going to increase the salary or how much we are going to decrease the salary, it’s the general assembly who makes this kind of decision. But overseas, we speak with the trade union, because we have to—we have to be together and to work together in order to give them the possibility to understand what does it mean to work for cooperatives. And in this case, trade unions are important, and—but the most important, in order to convince all the trade union, all the workers, is a very important value that the name is transparency. Transparency is very important here, but also overseas and in a conventional factory. If we are transparent, giving to all the workers and to the trade union the possibility to know everything about the company, and making every month meetings to explain how is going the company and what is the strategy and what is the—how we see the future and then so on, that is the best way to integrate and to motivate everybody and also to understand from the union, trade union.

AMY GOODMAN: Mondragon International, one of the world’s largest worker cooperatives, starting to work with the United Steelworkers a few years ago, you announced an agreement with Mondragon to develop unionized worker cooperatives in the manufacturing sector in the U.S. How has that gone?

MIKEL LEZAMIZ: OK, well, we have an agreement with them in order to work together or to help them to build or to create cooperatives or to become some worker-owned companies and cooperatives. We are working. We have a very good relation. Maybe it’s not easy to make steps quickly, because this kind of process, I told you before that it takes at least five years, because we have to change the culture, and it’s not easy to convince everybody. But we think that that is going well, slowly. But we think that it will be profitable for them, for us and for the world.

AMY GOODMAN: The United States, in the corporate media, capitalism is equated with democracy, so you question capitalism, you’re questioning democracy. Yet you provide an alternative to capitalism, the Mondragon cooperatives, where people live very well, and they—and no one has lost their jobs, you say. Explain how it works. Is this an alternative?

MIKEL LEZAMIZ: We—always we say that we prefer to work in our own way. We don’t want to create conflicts between us and with the others and with the capitalists and then so on. We think that in this century, in this 21st century, that everybody has a lot of knowledge. Every worker, and so, at this moment, in most of the countries, that the workers are not illiterate. So, and they have a lot of information and a lot of training. Today, the management model, also the management system, should be more participative, more democratical, because everybody wants to—everybody knows a lot, and everybody can participate, and it will be much better for them. And in this case, we think that—we don’t say that it’s another way or—no, we say that this is good for everybody. If everybody can make their own decision, it’s much better for them and for the society, because, after that, the aims is not to resolve my own problems. We have to resolve—or we have to develop the society, because our mission is to create wealth within the society. Our mission is not to earn money. Our mission is to create wealth within the society.

How? Through entrepreneurial development and job creation. That is our aim. And in this case, we think that democracy is much better for everyone, if participation possibilities is much better for everybody. And trying to be in solidarity—and being in solidarity, we can develop the community.

And for that reason, we think, OK, this is maybe another way, or not, but this is—we think that it’s a very human way, a better human way than another one. And we think that it’s possible to compete with everyone, being a cooperative and being ownership. And we think that in the future, in this 21st century, all the things, all the ways, all the affairs, also the business, should came to this idea of giving the participation possibility to everyone, and not to only one people or 10 people making the decision, and the others has to continue, has to work behind this decision.

AMY GOODMAN: The 99 percent?

MIKEL LEZAMIZ: Ninety—yeah, or more. Why not? Yeah.

AMY GOODMAN: The wage differential between the highest paid in Mondragon and the lowest-paid workers, Mikel?

MIKEL LEZAMIZ: In most of the cooperatives, the biggest differences between the top and the low is one to 4.5 times, 4.5 times. But the biggest, the CEO of Mondragon, is earning six times the minimum minimum salary.

AMY GOODMAN: Mikel Lezamiz, thank you so much for joining us.

MIKEL LEZAMIZ: OK.

AMY GOODMAN: Mikel Lezamiz is the director of Mondragon Cooperative Dissemination. We’re speaking here in Busturia, Spain, in the Basque region, not far from Mondragon, where he works and lives. More than 100,000 people work in the Mondragon cooperatives. This is Democracy Now!, democracynow.org, The War and Peace Report.


GUEST

Mikel Lezamiz, director of Cooperative Dissemination at the Mondragon Cooperative Corporation in Spain’s Basque Country.


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Ricardo C. Amaral
Author and economist

He can be reached at:
brazilamaral@yahoo.com

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