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Mondragón and the Other Fr. José María

Mondragon and the Other Fr Jose Maria Mondragon Corp

Mondragon Corp

Elias Crim - published on 02/23/14

A new way of doing business.

Last summer, my family and I found ourselves on Copacabana Beach with a million-plus pilgrims from around the world, all eager to welcome Pope Francis to Rio.

I can testify that standing amidst a sea of happy people — mostly teenagers and twenty-somethings bearing flags from some 140 countries — is a fine way to realize just how big and wonderful the Church really is.

This experience also reminded me that the Catholic faith is full of paradoxes, as famous convert G. K. Chesterton loved to point out, including our sense of being both parochial and universal at the same time. We have a local loyalty — to our own parish — and yet we attempt to “think with the Church”, i.e., in a universal sense.  

But there are different ways of being parochial. The ongoing economic crisis which began in 2008, we should note, did not suddenly inspire first Pope Benedict and then his successor into speaking about the connections between the faith and our workday preoccupations.

And yet many American Catholics continue to have a kind of startled head-in-the-sand response to encyclicals such as Caritas in Veritate and Pope Francis’ recent exhortation, Evangelii Gaudium. Their reaction suggests a narrow focus on American society and its style of bipolar debates (mostly libertarians on one side, mostly welfare statists on the other), oblivious to the springtime of evangelization which has been going on outside (and even inside) the U.S. for several years now.

One example of these new flowerings I described in an earlier article here on the Focolare Movement’s Economy of Communion, the largest network of faith-based businesses in the world.

In this article I want to sketch out another important development — one which is indeed old news to some careful observers, but will perhaps be eye-opening to many others. It begins with a little known Basque priest.

The most famous Basque priest of all time, of course, would be St. Ignatius of Loyola, born in the small province of Gipuzkoa in the Basque country in northern Spain. (The runner-up would have to be St. Francis Xavier.) In modern times, readers might remember that St. Josemaría Escrivá, the founder of Opus Dei, was also from northern Spain (the province of Aragon).

It is curious to note the parallels between St. Josemaría Escrivá and Fr. José María Arizmendiaretta, the latter born not far from St. Ignatius Loyola’s birthplace. Although Fr. Arizmendi (as his name is sometimes shortened) was seventeen years younger than St. Josemaría, their lifetimes overlapped, with Fr. Arizmendi dying in 1976, one year after his colleague, St. Josemaría.  The latter founded the Priestly Society of the Holy Cross (which became Opus Dei) in 1943, the same year that Fr. Arizmendi founded the Mondragón Technical School.

In 1950, Opus Dei was approved as an institution of pontifical right, while the Mondragón Cooperative Corporation (MCC) was founded in 1956. Today, Opus Dei has some 90,000 members, with almost 2,000 priests in 90 countries, while the MCC employs 85,066 people working in 256 companies across 19 countries, and generating some $24 billion in revenues. It operates its own bank, its own university (with multiple campuses), three R&D centers, and a healthcare system. It has been the subject of numerous studies, PhD theses, films, and books (Catholic and otherwise). It is fascinating to compare the fruits of these two spiritual leaders.

“Sanctify your work,” St. Josemaría urged fellow members of Opus Dei. And in a kind of parallel fashion, that is what Fr. Arizmendi’s teams of workers did (using the tools of Catholic social teaching) in the remarkable model of person-centered industrial capitalism they created in the little town of Mondragón, Spain.

Here’s a closer look at what Fr. Arizmendi (who now has a cause for his canonization underway) and his team accomplished:

Let’s pretend you are a twenty-something college grad looking for a job today. You get an interview with a certain international company (a cooperative, the brochure says) which looks interesting and has a great — indeed, fabulous — track record. For example, they simply don’t lay people off. Worst case, they transfer them to other groups in the organization which is set up as a network of cooperatives. Even the global recession in 2008 affected them comparatively little.

Waiting for your interview, the HR person hands you a description of the company’s organizational philosophy, their Basic Principles. They are as follows (just for fun, I add responses a typical applicant in today’s job market might make in ital):

1. Open admission. Our company is open to all persons who are capable of carrying out the available jobs. There is no discrimination based on religious or political grounds, nor due to race, gender, age, or socio-economic levels. The only requirement is the acceptance of these Basic Principles.

OK, fine — not so unusual but good to see spelled out in print. I think this means they hire poor people, too.

2. Democratic organization. Workers are owners, and owners are workers. Each cooperative is managed by a system of “one person, one vote.”

Wait, what? I’ll be an owner? What does that even mean? I get a “vote”?

3. Sovereignty of employee’s work over capital. Workers join our company and become owners after making a capital contribution at the end of a trial period. All workers are entitled to an equitable distribution of profits. The return on saved or invested capital is just but limited, and it is not tied to the surpluses or losses of the cooperatives.

So this is not just some little employee stock ownership plan — we’re getting a share of profits? “Not tied to profits or losses”?! How can they do this?

4. Subordinate character of capital. Capital is a means to an end, not an end in itself. Available capital is used primarily to create more jobs.

Never heard of such a thing. They act like jobs are sacred or something. How can the creation of jobs be a company goal? Labor over capital?

5. Participatory management. Worker-owners participate in decision-making and the management of the cooperatives. This implies development of self-management skills. Formal education and adequate information is provided to improve worker-owners’ ability to participate competently in decision-making.

Me? A decision-maker? Already? Is this part of that crazy “open book” management thing?

6. Payment solidarity. Remuneration is regulated internally and externally. Internally, an agreed differential between the highest and lowest paid job is applied. Externally, a remuneration level is maintained in relationship with similar local industries.

Huh. I hear the wage ratio is about 5:1 in this company. So the CEO will not be making 300 times what I’m making? Won’t he be steamed about that when he finds out it was the worker-owners’ decision?

7. Intercooperation. Cooperatives form groups to pool profits to absorb worker-owner transfers when necessary and to attain synergies. These Groups associate with each other to support corporate institutions. Our company associates with other cooperative organizations to promote the cooperative model.

Aha! Now I get it: this is a cooperative! But it makes $24 billion in annual profits? I thought coops were just a hippie thing!

8. Social Transformation. Our cooperatives invest a majority of their profits in the creation of new jobs. Funds are also used in community projects and in institutions that promote the regional culture.

Wait till the shareholders know about this! No, wait: that’s right — employees are the shareholders. We can do what we want!

9. Universal nature. Our company proclaims its solidarity with other cooperative movements, with those working for economic democracy and with those who champion the objectives of peace, justice, and human dignity. We proclaim our solidarity especially with people in developing countries.

Solidarity? Is this some kinda socialist thing? But where does the government come in? I don’t see it anywhere.

10. Education. Our cooperatives commit the required human and economic resources to basic, professional, and cooperative education in order to have worker-owners capable of applying all basic principles mentioned above.

So everybody gets groomed to advance in the company. Imagine that.

These principles, as the reader may have guessed, are the ones actually used currently by MCC. Their influence has reached the U.S., notably in two different recent connections.

First, the United Steelworkers (USW) have evolved beyond an earlier suspicion of schemes of employee ownership to a new collaboration with the Mondragon model, one which could put their 1.2 million members on a different path, one toward something called union coops. We’re talking about nothing less than looking past the classic labor/management standoff toward a new vision of collaboration here.

Second, in inner-city Cleveland, a consortium of startup co-op businesses (called the Evergreen Cooperatives) are taking the Mondragon model and using it to create worker-owner jobs for ex-offenders in a variety of new companies.

Neither the USW nor the Evergreen Cooperatives are Catholic organizations, of course. Yet are these projects (and others, such as the Economy of Communion network) not testimony to the applicability of Catholic social teachings to the real world?

So another Catholic paradox here: It is our recent popes who, in their references to these kinds of principles and projects, have the genuine worldly wisdom here and not their talking-head critics on cable television or radio. It is they who are in touch with the real world of business, especially those areas in which the human person has a chance of thriving.

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