Home > Uncategorized > The Mondragon cooperatives – valued workers instead of shareholder value

The Mondragon cooperatives – valued workers instead of shareholder value

Economists often have a stunning lack of knowledge about the kaleidoscope of different kinds of companies which exist. The neo-liberal, financially focused, manager based, non-family, private business with shares which are traded at some kind of stock exchange seems to be their main frame of reverence, despite the fact that many other kinds of businesses do better and often much better, for one thing because they focus less on short-term shareholder value. One of these non neo-liberal kinds of businesses are Mondragon type of cooperatives (over 80.000 employees). Some data:

“MONDRAGON Corporation is the embodiment of the co-operative movement that began in 1956, the year that witnessed the creation of the first industrial cooperative in Mondragón in the province of Gipuzkoa; its business philosophy is contained in its Corporate Values:

Co-operation.
Participation.
Social Responsibility.
Innovation.

The Corporation’s Mission combines the core goals of a business organisation competing on international markets with the use of democratic methods in its business organisation, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment. In terms of organisation, it is divided into four areas: Finance, Industry, Distribution and Knowledge, and is today the foremost Basque business group and the seventh largest in Spain.”

Look here for figures

(Back in the eighties I was taught about ‘Mondragon’ by Hans-Jurgen Wagner, by the way. But soon, his ‘economic systems’ course came under attack, in the same period when people like Francis Fukuyama predicted ‘the end of history’ and neo-liberal victory. Believe me, I was present at the meeting of the council of the Groningen faculty of economics time at the time and was flabbergasted by the absence of arguments: “The Soviet-Union has come down, so no need to think about our system anymore, as there is just one system”. Only procedural arguments prevented the meeting from, without prior discussion, abolishing the course.)

  1. February 4, 2012 at 11:35 am

    The trouble with co-ops is they assume the factory has workers in it. But engineers like myself have been working for 300 years to improve human productivity by inventing labor saving devices. We have succeeded. The need for labor as a constituent of production has been reduced to zero in at least some factories. The term “dark factory” was introduced recently to describe the phenomenon. After you install the robot that displaces the last worker, you can turn off the lights because the robots don’t need them and there are no more workers.

    “Co-op”? “Labor movement”? Meaningless for a dark factory. And there are more and more of them. Capex is replacing opex all over the place.

    Time to talk about social credit, not co-ops, as the means for providing the wealth sharing needed to insure that the output of a dark factory, or any other kind, will find a market.

    • February 4, 2012 at 11:56 am

      Aren’t engineers workers? Are they all self-employed?

      • February 4, 2012 at 12:41 pm

        Good question. But asking it implies you haver worked in a factory, where line workers are very distinct from the engineers who design the product and set up the line. This is reflected in the accounting, where labor is always charged to cost of goods sold- “opex”- and engineering almost never is.

        The notion that engineering is labor also leads to the call for improvimg education to restore jobs. If only we retrained those displaced workers to be robot engineers, all would be well.

        Yes, and if only we had retrained the horses we once relied on for transportation they could all have become bus drivers instead of being sent off to the glue factory .

        What we have to understand is that the jobs are gone and they are not coming back. And the ex-workers will not go quietly off to the glue factory.

      • February 4, 2012 at 12:56 pm

        I have worked as an software engineer alongside hardware engineers, managers and all other types of workers. It’s called business. What’s the problem of the workers in a business owning the capital – just a simple transfer of shares?

      • February 4, 2012 at 2:12 pm

        here’s a lot wrong with workers always owning the business they work in. Should the workers in a hi cap business like an oil refinery own the refinery? There is a big difference from business to busines in profits per worker. Dividing all the profits of every business amonmg the workers in the business would lead to gross inequities. And there is the problem caused by more and more businesses needing fewer and fewer workers.

        And “a simple transfer of shares” it is not. Anything but. Just ask any current shareholder to transfer their shares to you in return for nothing.

    • merijnknibbe
      February 4, 2012 at 3:22 pm

      Tom,

      it’s not really a question of workers who drain profits from the company. It’s the other way around. They actually finance the companies. And these companies exist for quite some time now, while total employment is 80.000.

      • February 4, 2012 at 6:41 pm

        Workers do not finance companies, except in rare instances. I speak as CEO of my present company, as CEO of my former company, and and Sr. VP for engineering of the company before that. I was a cofounder of all three. As one San Francisco VC said, the chief job of a CEO is to raise the funds needed to run the company. I laughed when I heard that because it is all too true.
        The best source of those funds is customers of course, but customer cash must almost always be supplemented with paid in capital coming from investors not from employees. At least on this planet.

  2. robert r locke
    February 4, 2012 at 11:39 am

    It is indeed astonishing how little attention has been paid to alternative forms of firm governancxe, even when people like Michel Albert were writing about the Rhineland system and I started to write about them in the 1980s as well. Also the Japanese Corporation as an alternative to neo-liberalism was very much in vogue in the 1980s, too.. Is it possible that the American managerialist model could so completely dominant ideas of firm governance, when it is so obviously a bad system?

  3. Keith Wilde
    February 4, 2012 at 11:58 am

    Thanks especially for the comment from personal experience. I have always had a hard time believing that the apparent spirit of triumphalism that permeated English-language news after 1989 could actually be shared by the presumably intellectual elite.

    The spirit of Mondragon did have its manifestations in North America, however, in the Rust Belt region after 1980. It was touted as “The Ownership Solution”, anchored in places like Detroit and Kent State University, and as “Democratic Capitalism” (2004) by a crusading former CEO of ADT corporation, Ray Carey. The dominance of the financial sector over real industry is denominated by Carey as “Ultra-Capitalism”.

  4. Keith Wilde
    February 4, 2012 at 3:05 pm

    Re dark factories and social credit: Not every kind is dark, or heading that way soon. Since turning 65 I have spent quite a lot of time in hospitals. Lots of brilliant equipment there, but also a lot of reliance on individual workers, many of them dedicated, overworked and underpaid. (Also, plenty of light.) And they, along with the dark factories, turn out plenty of nasty effluents which need people power to take care of. One of the earliest American writers on social credit (also an enthusiast for it) made a pointed if parenthetical caveat that he didn’t expect that jobs for people would go away, precisely because of the need for cleaning up after the “progress” of automated machinery. A structural shift is doubtless required in current circumstances, but the essentially utopian approach of resolute social credit enthusiasts for the “leisure society” looks less and less like the practical one. And as health promotion and medical care loom as primary issues, environmental cleanup and a reversal of factory farming toward the more labor intensive requisites of ecological practices suggest there is plenty of potential for paid employment and dignified work.

    • February 4, 2012 at 7:09 pm

      True, there will always be jobs for people. Just not enough jobs. And not factory jobs. As is becoming evident in all of today’s advanced economies. The UAW thinks co-ops are a great ides, wants to turn GM into one. I think it was GM who announced it would be building a $10,000 dollar car in Detroit. How, against conventional wisdom that it can’t be done profitably? Easy – lots of automation, so few assembly line workers are needed. And for those few, a special deal with the UAW that will let them be hired for 1/2 UAW’s minimum hourly rate. That’s how desperate the UAW is to get a few jobs in Detroit. And how long will these $12 per hour workers have jobs? Until they are displaced by automation.

      Then what? A sit down strike? No workers. And if the factory is a co-op, owned by the workers, wouldn’t you love to be the last one?

      It was Henry Ford who famously is supposed to have said he was raising wages so his factory workers could buy what they produced. How will unemployed former members of the UAW buy cars produced without them?

      • February 4, 2012 at 7:20 pm

        So there is no demand for services?

      • February 4, 2012 at 8:13 pm

        Yes, there is demand for services. Just not enough to provide full employment. The economic problem has been correctly analyzed as one of insufficient demand. So the inequality increases of the last 30 years, which have seen more and more of the fruits of production go to the top 1%, would be “harmless” (except for its unfairness) if the top 1% would just put their gains back into circulation by buying enough services to keep everyone employed. But they don’t, they won’t and they can’t. So something else has to happen. But co-ops are not it.

  5. February 4, 2012 at 3:41 pm

    Tom Hagan’s comment seems to be about co-ops in general from a theoretical perspective. I wondered if he had ever looked closely at the Mondragon experience from an empirical basis? The article seemed to indicate that the co-op was for more than factory fabrication.

    • February 4, 2012 at 7:51 pm

      I have followed Mongragon for some years and also PROUT, which envisions co-ops as forming the next thing after capitalism. I am a big fan of co-ops, but I notice that many don’t last. Remember when UAL emerged from bankruptcy as a co-op? No more. It abandoned that form of ownership after a few years. Why?

      Mondragon is the exception, oft cited.
      Clearly it works, and not just for really small enterprises. But after 50 years, why only 80,000 jobs?

      And what does it do once automation allows a factory to go dark. Who owns it then? The few senior managers and engineers who still work there? What about everybody else? Many of them can no more be retrained for those jobs than a horse can be retrained to become a bus driver.

      Social Credit was the term used by its inventor, C. H. Douglas, an engineer and a factory manager, not a disconnected do-gooder. He saw the inevitable inability of his plant workers ever being able to buy what they produced. The pigeons have come home to roost with a vengeance, and co-ops are not the answer.

      What I think is needed is Social Credit, as in Basic Income Guarantee, and steeply progressive taxation that pays for it. Otherwise capitalism can be left alone, the “free market” to do its work, as long as money is kept from buying government. A very tall order, and in my opinion the only way to avoid a violent revolution. Once those displaced workers wake up to the fact that their jobs are gone forever and government’s response is “austerity” it will be heads on pikes.

      • February 4, 2012 at 8:37 pm

        The problems you cite for co-ops are no different from the problems experienced by other types of business organisation.

        The reasons why worker-owned co-operatives do not thrive everywhere is because there is very little experience of this type of operation and there are vested interests to maintain the status quo.

  6. February 4, 2012 at 3:49 pm

    Yes, I will plug in my own blog. Why? Because Cooperative Market Socialism is the model that drive my academic life (now outside academy). In 2010 I visited Arrasate-Mondragon, just to get a feel of the place. I wish I had arranged for a guided tour, at least I took lunch in their University (that´s right, they have their own university to form technicians and management).

    My blog is: http://marketsocialism-economicdemocracy.blogspot.com/

    And I promise that it will be updated shortly. Meanwhile, you can peruse the extensive work of Economic Democracy theorists such as David Schweickart, Michael Albert (PARECON) and others. There is a little bit of bibliography there:

    http://marketsocialism-economicdemocracy.blogspot.com/2011/10/accumulated-glossary-and-bibliography.html

  7. Podargus
    February 4, 2012 at 7:09 pm

    Tom Hagan,people with your attitude and mindset are part of the problem,not the solution.

    • February 5, 2012 at 12:22 am

      Attitude? I thought I displayed multiple attitudes. Which did you find disagreeable?

  8. February 4, 2012 at 7:49 pm

    What becomes apparent in reading the comments is that for some there is a “one size must fit all” mentality. There is not one type of factory or business and each has is own best efficiency organization. Beyond this, what one chooses to analyze the data around has much to do with how one judges efficiency. The most important thing is that expense are covered and the product/service is in enough demand to allow sustainability and adaptability for the future. If the survivability is most important, there is nothing more efficient then a family business where the family members love what they do. The time then spent in community and cooperation is a non-monetary reward that generates its profit without taking money away that can be used for expenses. In this case the use of modern high tech equipment to replace all the family members would need to produce enough money as profits for the entertainment of the Ex-employee-family-workers. I would suggest this would drive up the cost of the product/service and reduce the customer base. I guess shares could be sold and in the IPO (only one that counts) could finance bigger machines and then ramp up the production for what ever economies of scale are necessary but then an advertising department would need to be grown to push the product/services and this would require a larger building and more utilities which require higher prices which…….

    There are rules of scale every mouse and elephant know – size size, surface area, volume are all related to each other by power factors so the volume (number of employees, building space, share holders, management ……) scale up or down much faster then the ability to make and sell the service or product. The only way out is to minimize and exchange the loads/energy/methods or combine the parts in the volume or where the profits go. This is why all those who came into the country from countries where family is together from their culture or from the pressures of the culture they move into can start businesses and grow.

    Certainly as a small family type business like I mentioned above one can not own, run, and utilize the equipment to put millions of transistors on a piece of silicon and then package these into boxes which we can use to comment on post on a blog……but then those organizations doing this would not be a good model for a Chinese Restaurant or an Indian run motel or a thrift shop (these are doing well today)

  9. david glover
    February 4, 2012 at 8:43 pm

    industrialization is continually both creating and destroying industries

    but the new industry’s require less manual labour

    as the planet’s human population increases @ 200,000/day

    Collapse, a la Jared Diamond, is inevitable

    • February 4, 2012 at 9:31 pm

      Elderly people will love being dressed by a robot. I ljust ove electronically generated music, literature, art, don’t you? Have you seen R119675’s pirouettes?

  10. Alice
    February 4, 2012 at 8:58 pm

    Tom Hagan sums up the core problem well in this comment

    “if the top 1% would just put their gains back into circulation by buying enough services to keep everyone employed. But they don’t, they won’t and they can’t. So something else has to happen. But co-ops are not it.”

    I agree but Im amazed that we really cant seem to get past the impasse of the top 1% using the gains they have made to actually block sensible solutions to this problem.
    Higher taxes is the answer and we will get there in the end because the unemployed will not go quietly to the glue factory and the unemployed are also a source of insufficient demand.

    If only the top 1% would actually see that they are the source of the problem with their fight to keep all their gains at the expense of the 99%..

    Some do, like Warren Buffet.

    • February 5, 2012 at 12:32 am

      Many see the present system as unfair. But it’s worse than unfair – it’s doomed, unsustainable. And the question is why there aren’t more in the 1% who see this, and support a change that will let them keep their heads. A friend points out they are like poker players cheting on the Titanic. But it’s worse – it-s as though cheating at cards actually caused the collision witht the ice berg. And still they play on.

      • Alice
        February 5, 2012 at 10:25 am

        Tom that is why I worry…totally agree.

      • Alice
        February 5, 2012 at 10:43 am

        I will also say this – the top 1% may be as much figureheads as the lady on the bow of the Titanic, supported by legions who would happily sup;plant them in their roles across vast conglomerate corporate structures permitted to go anywhere globally and do anything. Its not the consumers or the shareholders driving this unustainability for those two groups increasingly are often coralled into paying higher prices than is decent and / in the case of shareholders receiving lower returns than is decent.

        No its something deeper than that, that even the 1% cant stop the direction we are going in…..and are compelled. Perhaps Souris had something worthwhile to say when he drew an analogy for the lack of controls in the financial services sector. The mistake was made in permitting the cross activities between banking and investment services etc. He compared it to an oil tanker at sea where the compartments were removed and the oil allowed to slosh freely from one end of the ships hull to the other. Not wise at sea at all.

        The sheer freedoms permitted this sector have been astonishing – the gambling, the shadow banking, the obscene growth of complex derivatives….we gave the 1% the toys to play. We followed the “no intervention” path to a point where now there is talk of very little else but the need for intervention.

        It is my thought that despite the very proliferation of well resourced arguments to the contrary…intervention in this sector as a start, along with higher taxes is something the 1% needs and yes, to keep their own heads and perhaps they also need help to understand why it is they need it.

  11. February 5, 2012 at 2:08 am

    I think the Mondragon phenomenon is as much an ethnic/social one as it is one of economic organization. Cohesive groups can work well together on many levels.

    • Dave Taylor
      February 7, 2012 at 7:06 pm

      On the contrary, Helge, it was the result of carefully thought-out Catholic strategy. Race Mathews’ “Jobs of Our Own: Building a Stake-holder Society” (1999), is a richly informative study of the story in its context. As against Tom Hagan’s comment at #13 on the reluctance of the 1% to spend their money, this was a deliberate policy by a small group of (themselves poor) people to invest “where the money wasn’t”, in mutual training and initially primitive facilities.

      Incidentally, I’ve read with great interest Carminegorga’s blog at http://me-a-new-economic-atlas-and-you.blogspot.com/ (see “From Forbes, with Love”, #2); at the end of the second paper, “Give us our Cash”, is a quote from Quadragesimo Anno, ## 105-106, which outlines the problem Fr Arizmendiarrieta set out to avoid by means of internal financing.

      Merijn, thanks for drawing attention again to Mondragon. (I read a paper on it as a practical model of my own theory of economic structure at the 2005 Critical Realist conference in Sydney). Here’s another – moving – version of its of Mission Plan (Mathews, op cit, p.205), written by Fr Ariz a few days before he died in 1976:

      “Hand in hand, of one mind, renewed, united in work, through work: in our small land we shall create a more human environment for everyone, and we shall IMPROVE this land. We shall include villages and towns in our new equality; the people and everything else: ‘ever Forward’. Nobody shall be a slave or master of anyone, everyone shall simply work for the benefit of everyone else, and we shall have to behave differently in the way we work. This shall be our human and progressive union – a union which CAN be created by the people”.

      • Dave Taylor
        February 7, 2012 at 7:09 pm

        Apologies for a forgotten edit: the Mathews quote should read p.230.

  12. February 5, 2012 at 5:05 am

    Thanks for posting this Merijn. Despite the inability of some commenters to contemplate something different, it is excellent news that Mondragon is becoming more widely known.

  13. February 7, 2012 at 11:52 am

    William Foote-Whyte is a great resource on worker coops.
    Suirprised Tom Hagan seems unaware of the important role coops played – and play – in the economies of Germany and UK and Scandinavia. Originated at height of Victorian capitalism to provide working poor with reliable unadulterated food. In UK today the coop movement is a major player in retail of all kinds, banking,, insurance, mortgages, agriculture and household goods. The John Lewis Partnership is widely recognised as a well-run, high-quality up-market high-street chain. The buidling societies were hit hard by Thatcheite privatization and the resultant CEO madness, but are recovering as the reality of neo-liberalism has sunk in and the virtues of even slightly over-cautious but highly stable coops is once-again being appreciated.

    Check out German and Scandinavian coop businesses for yourselves.

  14. Keith Wilde
    February 9, 2012 at 10:34 pm

    Tom Hagan’s comments make very clear his belief in the social credit article of faith that jobs will disappear, making necessary the governmental distribution of purchasing power to maintain aggregate demand. At the same time he has called attention to the fact that social credit is an engineer’s diagnosis and an engineer’s solution. His focus, and that of Douglas before him, is on the factory, its effectiveness, efficiency and desired output. The observation that technological progress in the factory increasingly displaces human labor is indisputable. (But tell it to the Chinese workers caged, like pigs or chickens on a factory farm, to make Apple components!) What is missing from the genteel social credit vision of utopia is the factory effluent. Let “effluent” stand for all of the disutilities of Technological Society and recall Ezra Mishan’s imagery of a carpet being rolled out temptingly in front of us but rolling up even more rapidly behind us.

    It is no secret that the “effluent” generated by the post-industrial system is enormous and that it is a threat to all living systems. Coping with it is an overwhelming prospect. Even the earliest enthusiasts for Douglas’ vision in the U.S. recognized that progress in the factory system was not going to eliminate the need for a lot of clean-up work. The fantasy of an affluent leisure society is retreating, not approaching. Thus there is enormous work to be done, but as Hagan may have meant to imply, it doesn’t necessarily offer a lot of jobs. To make jobs (i.e. wages) out of the work will require significant changes in social structure.

    It has been suggested by die-hard believers in the Douglas vision that the citizens of a leisure society living on dividends and perpetually falling prices would do the clean-up work (every kind of “service” industry) as civic-minded volunteers, expecting no pay because of already having a “sufficiency” due to the social surplus generated by capital in the factory system. This is very close to replicating Thomas More’s concept of Utopia where social pressure keeps everybody working as hard at unpleasant necessities as his neighbor, but experience of industrial society does not encourage it. Migrant labor is a manifestation of unpleasant work that people who have access to unemployment insurance would rather not do. Would they react any differently if U.I. were called a consumer’s dividend?

    Given the growing share of work-to-be-done as effluent management, does it seem likely that individual consumers will be able to buy it off the shelf? From either cooperatives or traditional private enterprises? Some on this list are old enough to remember the economics literature of public utilities. Government looms.

  15. Joe
    February 13, 2012 at 2:45 am

    Yes, and yes again. It’s not a question of converting every enterprise to the cooperative approach. There will always be some whose insatiable greed will require amassing a fortune beyond any level that their family or their family’s family could ever need. Let them take the risk of dealing with the victimized workers….
    For the rest of us, let us simply consider the benefits of the cooperative – the balancing of economic and social needs, the enterprise that flourishes by supporting and sustaining the fabric of society. Let us become members, and devote our work lives to building a better society for everyone.

  16. February 14, 2012 at 9:39 am

    If converting everything to dark factories one thing is neglected. Purchasing Power Parity. Who will purchase the goods produced if there is no workers earning money? Hence, capitalism has a tipping point. It is logical and predictable that when the those people on the bottom of the financial hierarchy can no longer afford to purchase the goods, the system will come to a stand still, and collapse. It requires a balanced approach like the gears that operate a clock. The cause of failure seems to be the greed at the top, because it is a result of the competition to be wealthiest that will ultimately tip us off the balance and recovery is no longer possible.

  17. February 14, 2012 at 4:08 pm

    I have read all comments but failed to see a reference to the social doctrine of the Catholic Church… Myself I like to think that I am a very secular person, albeit respectful of other peoples’ religious beliefs. That said, one has to acknowledge that, now and again, here and there, the Catholic Church does express opinions about Capitalism and does encourage alternative ways of creating and distributing wealth.
    One further comment (thinking of Tom Hagan’s comment along the lines that engineers have been taking work away from other workers – in the sense of devising ever more efficient machines and methods), is the following in the form of a question: «When machines and integrated expert systems do most of the work, what will they – the owners of capital – do with people?»

  18. February 14, 2012 at 4:10 pm

    The reference to the Catholic Church was in order as it that institution that was at the source (the seed, so to speak) of the Mondragon cooperative movement.

  19. Douglas Woodard
    February 15, 2012 at 2:01 pm

    The belief that automation can continue indefinitely seems to require that cheap energy and materials will continue to be available. This is not to be expected. What we can expect is that the cost of energy and materials will rise as their readily accessible supply declines, indefinitely.

    Further, as Douglas Reynolds has pointed out, the cost of mineral resources (including fuels) can be expected to rise abruptly at times, making sole reliance on the invisible hand imprudent. Markets depend on limited human perceptions to function, and their ability to aggregate those perceptions is not infinite. As George Soros and others keep telling us, markets are subject to some of the same limitations as mobs.

    Moreover, the requirements for a stable climate and a productive biosphere, both for ecosystem services and for high availability of biologically produced inputs to the human economy as well as for other reasons, requires limits to be set to the human population and its required inputs and effluents. The pattern of the human economy must in future be highly regenerative if the number of humans is large. A pure market economy cannot be expected to set limits other than through scarcity and human misery.

    We may expect that in the moderate term future our outfit of material production equipment will be austere. It will be important to make the most of it through high skill, the ability to innovate, cooperate and organize, and in general a degree of devolution of the entrepreneurial finction. So our quality of life will depend on cultures that foster the accumulation of both human and biological capital.

    Government will have to play a large role in our future, but its role in patterning and in fostering the accumulation of human and biological capital will be more important than its assistance in individual incomes and consumption. It will be necessary to avoid extreme concentrations of both economic and political power, so a system with some drag on accumulation of individual wealth will be needed, especially accumulations which do not serve a purpose in coordinating economic activity. At the same time we can be confident that decentralized onwership and management will be essential to a frugal, productive and adaptive economy.

    I doubt that I have said anything that most readers are not aware of, but a reminder of priorities may be useful. We need to keep in mind where we need to be heading.

    Douglas Woodard
    St. Catharines, Ontario, Canada

    • February 16, 2012 at 4:13 pm

      I agree with most of what you say, and yours are good and enlightening remarks. The question «when machines and integrated expert systems do most of the work, what will they – the owners of capital – do with people?» was/is also posed in the context of «finitude» of the planet itself.
      Georgescu-Roengten had it right when he spoke of the need for our governments (and their economist advisers) to look at economics, not from a «flows» perspective, but from a «stocks» perspective. In that context («stocks»), in one way or another all the energy that we have available comes from the Sun. The planet itself has an huge (but finite) amount of stored energy (ocean waves, winds, volcanoes…). Still, a lot of that «stored energy» comes from this planet being in a constant state of motion. On the other hand, there is no visible indication that human creativity and inventiveness is coming to an end. As for the «limits to materials», recycling and growth in efficiency (and, most importantly, a paradigmatic change in our social/collective way of living…) should enable us to reach a balance between 10 billions humans and the natural resources of our Planet.
      Although you are right when you speak of «limits – that are required – to be set to the human population and its required inputs and effluents», there is no reason why, we humans, cannot «delegate to machines» most of the work being performed by humans today. The city of Windhoek (Namibia) already in the Sixties had a water recycling system (the core of it looked like a crude oil refinery) that «automatically» converted all liquids from the sewage system into drinkable water and a number of solid and semi-solid residues that were put to agro-industrial uses. It was working and those were the days o «Spaceship Earth» and the «Silent Spring» by Rachel Carson.
      In summary, and I repeat « there is no reason why we humans cannot «delegate to machines» most of the work being performed by humans today».
      That question ««What will they do with people, when machines and integrated expert systems do most of the work» is also (BUT MAINLY…) posed in the context of the fundamental contradiction of the capitalist system between, on the one hand, «consumption» (or simple «enjoyment of life») which requires some form of «income» and, on the other hand, «accumulation» and the pursuit of maximum profits…

  20. August 14, 2012 at 9:04 pm

    Tom Hagan :
    here’s a lot wrong with workers always owning the business they work in. Should the workers in a hi cap business like an oil refinery own the refinery? There is a big difference from business to busines in profits per worker. Dividing all the profits of every business amonmg the workers in the business would lead to gross inequities. And there is the problem caused by more and more businesses needing fewer and fewer workers.
    And “a simple transfer of shares” it is not. Anything but. Just ask any current shareholder to transfer their shares to you in return for nothing.

    Tom, you miss a very big point. In that “big refinery” perhaps the profits would be lowered along with the price of the product if the refinery were operated by a coop with a wage range of 3:1.

  21. davetaylor1
    August 15, 2012 at 4:13 pm

    I’m glad Charles Layne has opened up this thread again. Among other things, it would be very interesting to know how Mondragon is faring in the economic turmoil of 2012 Spain. Do you have any useful contacts here, Meryjn?

    Guilherme (#35, Feb 14th) “failed to see a reference to the social doctrine of the Catholic Church”? See my #28 (Feb 7th). Otherwise, spot on, Guilherme: one shouldn’t judge a product by its label and the opinions of ignorant competitors.

    I had thought Tom Hagan an engineer and so possibly (if from his comments, narrowly) still human, but (at #7) it seems he is/was a CEO, whose chief job is raising funds. Seeing only the money coming in from sales and investors, he doesn’t concern himself with where the capital ultimately comes from, though of course much of our discussion on the implications of its creation “out of nothing” has been subsequent to Feb 4th; i.e. that (at #14) there is no NEED for “steeply progressive taxation” because the whole system can be run on credit so long as interest, rents and monetary profits are eliminated and the credit available is proportional to need and the prices of the goods available. Retrospectively, from those who have acquired much on credit, much should be demanded – and in default, taken; but fining the guilty is not taxing the worthy.

    I think he is right that Social Credit (though as “Citizen’s Income”) is necessary to avoid “heads on pikes”, but co-operation is about GIVING people jobs so the CAN earn their keep and enjoy the social and skill satisfactions that even industrial work can provide. (See Elton Mayo on “The Hawthorne Experiments”, and the likes of Dorothy L Sayers, E F Schumacher, Edward de Bono and James Robertson on “Why Work?”, “”Good Work” and “Intermediate Technology” in “Small is Beautiful, “The Happiness Principle” and “Future Work”. This system works well enough just so long as the jobs get done well enough to maintain what we have and renew what we use. Its financial system works well enough in the Charity sector, where with pensions providing their Citizen’s Income, old folk can work and job-share because they want to; and sane people have always been motivated by honorary prizes: only idiots get sucked into the games of financial blackmail and blackguarding the refuse collector. (Well said Kevin Wilde @ #32, but you might reflect on the difference between Citizen’s Income being mandated in Constitutional Law and it being at the whim of Governments in their role of national CEO).

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