Showing posts with label Europe. Show all posts
Showing posts with label Europe. Show all posts

19 April 2012

David P. Hamilton : French Elections: Francois Hollande and the Socialists

Presidential frontrunner Francois Hollande of the French Socialist Party. Image from Jegoun.net.

The French presidential election:
Francois Hollande offers
an opportunity for the Left
The simple explanation of Sarkozy’s failure is that the majority of the French electorate do not like the man personally and disapprove of his policies.
By David P. Hamilton / The Rag Blog / April 19, 2012
David Hamilton and Philip Russell will discuss the upcoming presidential elections in France and Mexico on Rag Radio with Thorne Dreyer on KOOP 91.7-FM in Austin on Friday, April 20, 2012, from 2-3 p.m. (CDT). The show will be streamed live here.
Voting in this year’s French presidential election begins on April 22 and will provide an important opportunity for the Left. In the first round, there will be candidates representing 10 political parties, half of them leftist, including the Socialist, Left Unity, Green, New Anti-capitalist, and Worker’s Struggle parties.

This is fewer than in 2007 when there were 12 parties and in 2002 when there were 16. If no one wins a clear majority in the first round, an event that has never come close to happening previously, the two leading candidates advance to a run off on May 6.


The French electoral system

There are major differences between the U.S. and French procedures for electing a president.

In stark contrast to the U.S., corporate financing of political campaigns in France is strictly illegal. Individual contributions are limited to about $6,000 and must be thoroughly documented if over 150 euros ($200). This is not to say that political corruption does not exist. Envelopes full of cash are doubtless passed under the table.

Sarkozy is currently being investigated, accused of accepting millions during his 2007 campaign from Colonel Gaddafi of Libya and Liliane Bettencourt, heiress to the L'Oreal cosmetics fortune and the richest woman in France.

High level officials have been prosecuted for political corruption, including recent ex-president Jacques Chirac who was found guilty, but given a suspended sentence. Sarkozy will very likely be prosecuted when he leaves office and looses his immunity.

In the US, thanks to the Supreme Court's "Citizens United" decision, such political bribery is considered free speech. In France there is an official campaign period of about one month. During this period all candidates are given free and equal media time, 43 minutes each divided into 18 segments of 90 seconds to 3½ minutes during which they may state their case.

They are not allowed to solicit funds or disparage their opponents. No other mass media political advertising, such as inundates the U.S., is permissible. Campaigns thus cost a very small fraction of what they cost in the U.S.

The amount that campaigns can spend is also strictly limited, to only about 20 million euros ($28 million) for each of the two candidates that reach the run off. That's about as much as Mitt Romney spent in the Florida Republican primary.

The U.S. presidential election of 2012 is predicted to cost the campaigns $3-4 billion, several hundred times more than the French campaign. And the French government reimburses about half of all campaign costs.

The voting is nationwide, not filtered through some intermediary devise such as the Electoral College that distorts the outcome and negates to meaninglessness nearly half the votes cast. The voting always takes place on a Sunday to maximize the turnout, whereas in the U.S. elections are intentionally held on a workday so as to minimize worker participation.

As a result, while the turnout in the most recent French presidential election in 2007 was considered low at 84%, the 70% who voted in the U.S. presidential election in 2008 was considered high. Ballots in France are on paper and counted by hand. As a result of these features of its electoral system and its significantly greater income equality, France's is a far more democratic country than the U.S.

The French electorate is independent, traditionally polarized, and not centrist. The current most centrist candidate, Francois Bayrou, is running a distant fifth and fading into irrelevance. The most graphic recent example of French polarization was the 2005 vote on the constitution of the European Union which failed by a wide margin despite being strongly favored by all French political parties except the far left and far right.

Many, such as Karl Rove, think there is really no center in U.S. politics either, but this phenomenon is particularly evident in France and has been for centuries, during which time they have on several occasions killed each other mercilously.


The horse race

It is certain that no one will have a majority in the first round and the runoff will be between the incumbent president, Nicolas Sarkozy representing the UMP (Union pour un Mouvemente Populaire) and Francois Hollande representing the Socialist Party.

Third place is now up for grabs. Early in the race, the far right wing National Front candidate, Marine Le Pen, was solidly in third but trailing the top two candidates by more than 10%. She has since been overtaken by the charismatic and fast rising leftist leader, Jean-Luc Mélenchon, representing Left Unity, a coalition to the left of the Socialists, including the Communist Party and other leftist groups.

Mélenchon has made the biggest move of any candidate in the race, moving from an initial 5% to 15% in the most recent polls, while Le Pen dropped from about 15% to 12%. Polls show Mélenchon rising fastest, with Sarkozy rising more slowly, Hollande and Le Pen dropping. Hollande is losing votes to Mélenchon. Le Pen is losing votes to Sarkozy.

Regardless of these trends, the polls have consistently shown for months that Hollande and Sarkozy will both easily make the runoff and Hollande will win that by a wide margin. Despite Sarkozy's recent gains, every poll for months has shown him losing badly in the second round to Hollande, even if he is able to win the first round. No poll has shown Hollande's lead at less than 6% in the runoff, outside the margin of error.

Sarkozy's defeat will make him only the second French president to not be reelected since the founding of the Fifth Republic in 1958. The crucial polls show Sarkozy only getting a minority of the vote of the far-right National Front candidate, Le Pen, in the second round while Mélenchon's voters overwhelmingly switch to Hollande.

Sarkozy is running to the right in an effort to enhance his standing among Le Pen voters for the second round. But polls continue to show that many Le Pen supporters are unwilling to switch to Sarkozy and many of her ex-leftist supporters (the French analogy to the blue-collar Reagan Democrat) will switch to Hollande.

The simple explanation of Sarkozy’s failure is that the majority of the French electorate do not like the man personally and disapprove of his policies. It is hard to say which is more important. His anti-immigrant measures, austerity advocacy, and militarism in Libya do not represent the political thinking of the majority of the French, where 43% of respondents to a recent poll agreed with the proposition that "capitalism is fundamentally flawed."

Given that Sarkozy's father was an immigrant, his anti-immigrant positions seem exemplary of a particularly repellant form of political opportunism.

But in image conscious France, his personality and stature may be his biggest liabilities. He’s hyperactive, aggressive, ostentatious, and short. Take away Sarkozy's platform shoes and de Gaulle would have been nearly a foot taller.

Napoleon could get away with short, but not Sarkozy. He’s just not the distinguished presidential figure most French want to represent them to the world. Sarkozy is also widely thought to be corrupt, as was his mentor, ex-president Chirac, who now hates him too.

The recent shootings in Toulouse turned the campaign temporarily to the issue of security, considered a strong suit for Sarkozy, but it didn't help his standing noticeably in subsequent polls. He has flailed fruitlessly trying to find an issue that would resurrect him as his approval ratings sank into the 20's. Meanwhile French unemployment has crept up to 10% and economic growth has stalled despite Sarkozy's promises of prosperity.

With only two weeks to go, Sarkozy's approval ratings have climbed to 40%, but 58% disapprove of him and 57% approve of Hollande. Those numbers have been remarkably static and spell Sarkozy’s political doom.

Before the first round, expect Sarkozy to become ever more desperate in his attempts to attract Islamophobic support from the right. He has recently denied entry into France of Muslim clerics he labels as "extremists," has ordered the arrest and deportation of several individuals accused of being Muslim terrorist sympathizers, and said that people who log on to jihadist websites should be arrested.

Sarkozy is running a campaign that ignores the center while trying to build and energize a right-wing base. That strategy only works in a low turnout setting, not with 80% or better participation.


What a Hollande victory means

What is the meaning of Francois Hollande being the next president of France? Many Americans will probably say "not much," since they don’t consider France itself important. That view is ill-informed and often masks envy.

France is the world’s ninth largest economy, but along with Germany, it is the nucleus of the European Union, the world’s largest economy. France is also one of five permanent members of the UN Security Council with a veto and an independent nuclear power. It is and has been for centuries a political and cultural model for others. By having hosted four since the original in 1789, Paris is the cradle of democratic revolutions that have inspired millions around the globe.

Today France has arguably the most sophisticated social welfare system in the world. It is perpetually the world’s number one tourist destination despite the alleged grumpiness of its citizens. Its cuisine is a UNESCO World Heritage cultural phenomenon and it produces the world's most sought after wines by a very wide margin. Its art is universally revered. It probably provides the world's most commonly used advertising motif to symbolize chic and fashionable.

In essence, France matters a lot more than even its size and wealth might indicate. The last time a Socialist was newly-elected president of France, it was 1981 and Francois Mitterrand was coming into office in coalition with the Communists and with a long list of nationalizations and other aggressive socialist initiatives.

Francois Hollande will have relatively little of that. He's running as a moderate and that is what the French leftist intelligencia consider him. However, were he running as a Democrat in the U.S., Labour Party in the UK, or Social Democrat in Germany, his platform would be considered quite leftist indeed.

It goes without saying that he promises very significant differences from Sarkozy. These include France’s position on the European debt crisis, its willingness to cooperate with U.S. militarism, and a range of French domestic issues, particularly in regards to the tax structure. The take-off point to determine what Francois Hollande offers comes from a campaign document containing his “60 pledges."

These include:
  1. The renegotiation of EU financial arrangements designed to confront the “debt crisis” by including more emphasis on growth relative to austerity.
  2. Re-hiring 60,000 teachers.
  3. Subsidizing 150,000 jobs for youth.
  4. Increasing the number of public sector jobs.
  5. Raising the current top marginal income tax rate from 41% to 45% and creating a new bracket that taxes income over a million euros a year at 75%.
  6. Cutting the minimum age to receive a pension back from 62 years to 60 and a full pension from 67 back to 65.
  7. Capping executive compensation.
  8. Ending tax havens and cutting out 29 billion euros in tax breaks for the wealthy.
  9. Instituting a financial transactions tax.
  10. Taxing investment income at the same rate as wages and salaries.
  11. Creating a public European credit-rating agency.
  12. Forcing banks to separate their retail banking from their investment operations.
  13. Using revenues from the new taxes on the rich to cut the budget deficit to 3% in 2013 and to balance the budget by the end of his first term.
  14. Legalizing gay marriage and adoptions.
  15. Achieving international recognition for the Palestinian state.
  16. Cutting France’s current high use of nuclear energy by replacing it with sustainable nonpolluting energy.
  17. Bringing home all French troops from Afghanistan early -- by the end of 2012.
  18. Cutting the salary of the French president by 30%.
For an American presidential candidate, this platform would be radical beyond our wildest dreams. Of course, much of it may be dismissed as campaign rhetoric and there is little doubt that eventually many on the left will be disappointed in Hollande. But much of his program could be accomplished without greater public sector expenditures and his new taxes on the wealthy are popular.

Much depends on whether the Socialist Party and its left allies are able to win enough seats in the National Assembly elections to be held in June in order to avoid divided government. Sarkozy’s UMP now holds 317 of the 577 seats. This gives Hollande two months after winning the presidency to exploit his momentum in order to help the Socialist Party in the National Assembly elections.

A clear Socialist Party majority is unlikely. Although recent regional elections have been trending left, the Socialists would need to win 85 additional seats to gain a majority. A left coalition majority, however, is more within reach. There are currently 25 members to the left of the Socialists in the National Assembly. That number would need to grow along with the Socialists.

Such a left coalition will be necessary in order for Hollande to be able to name a Socialist as prime minister and form a unified government with control of both the executive and legislature. That coalition would necessarily include parties to the left of the Socialists, the forces now being mobilized by the candidacy of Jean-Luc Mélenchon of Left Unity. Having them as coalition partners pushes Hollande's positions further to the left.

The most obvious and important change a Hollande presidency might bring would be in negotiations within the EU concerning its "debt crisis." There is currently a consensus among the right-wing-led governments of Germany, France, Italy, Spain, and the UK that cuts in government spending and austerity measures imposed on social services are the sole acceptable means of government debt reduction. As a leftist, Hollande crashes that party with a different perspective that supports greater government expenditures, government sponsored growth and higher taxes on capital and the rich.

How that debate will evolve is the most important issue in Europe. Within the EU, will Hollande demand a new approach that gives greater emphasis to government sponsored growth or will he settle for rhetorical flourishes?

In foreign policy insofar as it relates to affairs outside Europe, Hollande is certain to take France in a new direction. With the disintegration of Libya into warring tribes, the decimation of women's rights there in the wake of the Sarkozy-led invasion, and the great unpopularity of French involvement with NATO in Afghanistan, one can be confident that French cooperation with U.S./NATO military adventures will be much harder to achieve with Hollande.

This attitude has already been reflected in an adamant statement, given by the man said to be Hollande's future Minister of Defense, that France pulling its 3,600 soldiers out of Afghanistan this year was non-negotiable. Hollande is also complaining about the French role in the NATO command structure and has floated a concept of "European defense" with reduced reliance on the US.

In addition, his support for Palestinian statehood is a reversal of French policy that will run head-on into U.S. opposition in the UN Security Council. Expect increasing French opposition to Israeli Likud government actions, given the widespread hostility toward Likud and Zionism among the staunchly secular and pro-Palestinian French left.

Domestically, Hollande will primarily be concerned with raising taxes on capital in order to continue funding some of the world's best social services. Hollande has explicitly said that "my biggest enemy is finance capital" and "I don't like the rich."

His support for a cap on executive compensation, a financial transactions tax, taxing capital gains like wages and higher marginal tax brackets at the top signals a radically different approach to solving government debt issues from that advocated by Sarkozy and currently favored by Europe's conservative leaders.

He will also put greater emphasis on the integration of immigrants into French society in contrast to Sarkozy's penchant for instigating Islamophobia and Roma roundups. And Hollande's promised enactment of gay marriage and adoption would be a huge victory for gay rights worldwide.

If Hollande is successful as France's next president, he will be offering Europe and the rest of the world a social democratic model that will have great appeal. Such a model would stand in sharp contrast to that provided by the U.S.

Hence, the French presidential election may have more important global implications than the one in the U.S. in November, which will again offer two candidates in relatively closer agreement on basic policy issues than the candidates in France, a phenomenon to be expected given the heavy corporate influence on both major U.S. political parties.

[Unabashed Francophile David P. Hamilton, a graduate of the University of Texas at Austin in history and government, spends part of each year in France and writes about France and politics (and French politics) for The Rag Blog. Read more articles by David P. Hamilton on The Rag Blog.]

The Rag Blog

[+/-] Read More...

27 March 2012

Larry Ray : America's Gas Pains

Gasoline pump, Naples Italy, March 11, 2012 Photo from la Republica. Graphic by Larry Ray / The Rag Blog.

Reality check:
America's gas pains?
Most Americans have not lived anywhere other than in America, and many still live not too far from the gas pumps in the towns where they were raised.
By Larry Ray / The Rag Blog / March 27, 2012

GULFPORT, Mississippi -- A March 11, 2012, front page story in the Italian daily, la Republica, detailed a new record high for gasoline prices in Naples, Italy. While drivers were wailing about gasoline being $3.58 a gallon here on the Mississippi Gulf Coast, Neapolitans were upset over regular gasoline being priced at what would be $9.58 per U.S. gallon.

Gasoline in Italy is priced per liter. A liter, for those not metrically inclined, is a little less than 34 ounces or 1.1 quart. The pump in the photo above shows a price of 1.917 Euros per liter, or close to U.S. $2.53 a quart, at the conversion rate on March 11, 2012. Try to picture filling your family or business vehicle a quart at a time at $2.53 a quart.

I looked up the cost of a gallon of gas across Europe in March 11, 2012 when Naples hit the $9.58 a gallon record:
  1. Belgium 1.68 euros per liter - $9.08 USD/gal.
  2. Florence, Italy, 1.55 euros per liter - $8.38 USD/gal.
  3. Luzerne, Switzerland 1.97 franc per liter- $8.86 USD/gal.
  4. Netherlands 1.42 euro per liter - $7.68 USD/gal.
  5. Fountain Bleu, France 1.62 euro per liter - $8.75 USD/gal
  6. Munich, Germany 1.64 per liter - $8.86 USD/gal.
Gasoline has always been more expensive in Europe for a number of reasons. But the specter of $4 a gallon gasoline in the USA has caused a real uproar with cable news talking heads threatening the unimaginable possibility of four-buck gasoline before the end of this year. They are even calling for opening our strategic emergency oil reserves with the threat of four-buck gas. Breaking news folks today rarely consult even recent history.

We had $4 a gallon gas back in June of 2008 as speculators pushed up the price of crude oil just like we are seeing today. But by the end of December 2008, the bubble popped and crude oil prices plummeted to less than $37 a barrel. The U.S. average price for a gallon of regular unleaded gasoline fell to an amazing 5-year low of $1.61.

That we were paying only two-fifty something a gallon here on the Gulf Coast just a few months ago is an interesting historical benchmark. Consider that in May of 2005 they were paying U.S. $5.96 a gallon in bella Napoli. Their good old days. It will be interesting to see how far gasoline prices fall after the current 2012 bubble pops. And it will... after November.

Gasoline prices in the USA have gone up in the past few months just as in 2008 almost completely as a result of unregulated Wall Street futures traders and speculators artificially forcing up the cost of a barrel of oil. Today they are using worries about economic and political instability in Europe and the Middle East and the unreality of a presidential election year to inflate their bubble. A bubble that is forcing drivers already facing tough economic times to pay for this uncontrolled speculation which had a barrel of oil up to $112.61 last month.

America actually has a surplus of refined petroleum products in the USA today because of more fuel efficient cars and a serious change in driving habits here after similar gasoline price spikes in 2008. U.S. refineries are actually exporting refined gasoline abroad. Refinery inventory figures indicate no gasoline shortage in the USA.

However, never one to miss a play in fantasy politics, as gasoline prices have moved upwards in recent months, Newt Gingrich trotted out a new campaign promise to bring Americans gasoline for $2.50 a gallon "when he is elected." And there are many, many voters who cling to that same fantasy.

Most Americans have not lived anywhere other than in America, and many still live not too far from the gas pumps in the towns where they were raised. Folks my age still remember gas for 25 cents a gallon when we were kids. This older generation, soon retiring or already retired, will always want gasoline to be a couple or three bucks a gallon.

The present administration is being ridiculously blamed by strident GOP critics for the annual increase in gasoline prices which we have seen many times before, under many U.S. administrations in years past. Here's a quick reality check:

Filling up that 25 gallon tank on a big tricked-out Ford F150 8 cyl 4WD pickup that gets 13MPG, or any other vehicle for that matter, at Naples gas prices it would be around $240 U.S. for a fill-up.

Filling up that same 25 gallon tank in the U.S. even with $4.00 a gallon gasoline would be $100. And don't look for gas to come back to a couple of bucks a gallon this time.

Reality Check over.
Conversion to the price per U.S. gallon:
As of March 11, 2012 the 1.917 Euros / liter = $2.53 U.S. Dollars / liter
One U.S. Gallon = 3.7854118 liters
$2.53 X 3.7854118 = $9.57709185 or $9.58 a gallon
[Retired journalist Larry Ray is a Texas native and former Austin television news anchor who now lives in Gulfport, Mississippi. He also posts at The iHandbill. Read more articles by Larry Ray on The Rag Blog.]

The Rag Blog

[+/-] Read More...

06 October 2010

Carl Davidson : Mondragon Diaries V: Innovation and Transformation

Image from Mondragon website.

Mondragon Diaries, Day Five
Innovation and transformation
towards a third wave future


By Carl Davidson / The Rag Blog / October 6, 2010
“The world has not been given to us simply to contemplate it, but to transform it. And this transformation is accomplished not only with our manual work, but first with ideas and action plans.” -- Father Jose Maria Arizmendiarrieta, founder of the Mondragon Coops
[This is the fourth of a five-part series by Carl Davidson about the Mondragon Cooperative Corporation, a 50-year-old network of nearly 120 factories and agencies, involving nearly 100,000 workers -- centered in the the Basque Country but now spanning the globe. Go here for the series so far.]

BASQUE COUNTRY, Spain -- Today the Mondragon valley is misty and grey, with small clouds drifting close to the valley floor between the mountain peaks. It's somewhat otherworldly, I think to myself on the bus ride up the slopes, almost like a scene from “The Lord of the Rings.”

Today is also our last day, and we're full of mixed feelings. Melancholy that our week-long seminar is coming to a close and that the new friends we've made will scatter. But there's also excitement that we'll soon be back home and able to share it all with our communities.

Our first stop is another component allied with Mongragon University called SAIOLAN. It's an incubator project for helping to launch new coops and high-tech businesses.

We're greeted in a classroom by a young woman from Mexico, Isabel Uriberen Tesia, who is also our presenter. She wastes no time bringing up her powerpoint on the screen and getting into the topic.

“Our aim is generating employment, creating new jobs,” she says. “our purpose is to do this by developing new business projects and training new entrepreneurs.”

A few years back, as the economic crisis was developing, nearly 60 percent of the students graduating in the Basque Country were having a hard time finding employment. The government, the MCC coops, and other businesses, as well as the students themselves, all turned to SAIOLAN to help launch new enterprises that could put young people to work.

“There are five levels in the training of entrepreneurs,” Isabel explained. “First is motivation. Second is finding opportunities. Third is defining a suitable project for the student, in tune with his or her interests and ideas. Once you get past these three, the next two, planning the startup and launching what you have developed, also involves finding resources, such as grants and loans, that can get the new businesses operating.”

What kind of businesses were being started? One involved processing plants for cleaning waste water in a new and better way, another was called "micro-manufacturing," producing very small components accurately, quite a few were new software products. One from FAGOR, the large home appliance worker-cooperative, involved finding new uses for stainless steel, including exterior products, like one-piece transit stop structures.

Some in our group were concerned that many of the new startups were simply new businesses rather than also coops. This was 80 percent, or 138 out of 172 new small enterprises over the last few years, with 2,281 new employees. SAIOLAN didn't seem worried. “It's their choice,” was the explanation. “Some of them will later transform into coops, and in any case, it's good to create new employment for our entire Basque community, not just the minority in cooperatives.”

We got deeper into the subject in our next session. It was further up the mountainside at Otlalora, and we had as our resource person Jesus Herrasti, one of the senior MCC leaders, the head of the “Innovation Group," who had been with Mondragon for 48 years.


After laying out some of the basic features of innovation -- infrastructure, science, technology, strategic planning -- Herrasti made it much more real by talking about a fundamental conflict facing all manufacturing businesses, not just MCC.
Take FAGOR, our home appliance manufacturing coop. It's a mature business. We can continue to compete by making some additional improvements in quality, or cutting our profit margins. But in the end, it's going to be very hard to compete with similar products produced in Asia. We should keep at it as long as we can operate in the black and our worker-owners can maintain their standards, but where, really, is our new growth potential?
He named three broad areas -- renewable energy, health and eldercare, and information technology. It got even more interesting to me as he became more specific about new product lines -- fuel cells, wind turbines, photovoltaics, embedded software, wireless, ambient intelligence, and bioprocessing in supercomputers. He was presenting the shift from second wave manufacturing to the high-design and high-touch products of a third wave future in a knowledge economy, and he had 200 people working full time on coming up with new ideas and plans.

I asked a question.
Have you had any inquiries from those countries trying to define a new 21st century socialism, in whatever way, such as Venezuela, Cuba, China, Vietnam, or even South Africa, on how they might use Mondragon's ideas and services? Do you think you have something to offer here?
“Yes and no,” was the cautious answer.
We get queries from all of them. We've been to China and other places, and there is some genuine interest, to a point. But since spreading knowledge and worker's power at the workplace also often runs against the clinging to control by bureaucrats, socialist or otherwise, the interest often comes to a dead end. But it's not always the case, and we keep working on doing what we can.
He went on to discuss the problems of cultural differences.
We Basques are often risk-adverse when it comes to business, unlike Americans. We often avoid risks when we shouldn't. On another hand, when we talk with Mexican workers about taking over and owning the firms we start there for themselves, and where they elected the leadership, they simply don't believe us. They want to know where "the trick" is hidden, since businesses, in their culture, are always owned by bosses, never by workers. There is no trust, at least trust with us, that it can be otherwise.
So what are the basic things needed to start worker-cooperatives in our countries, asked one of our group?
First the workers themselves must FEEL THE NEED. Without that, it's hard to get anywhere. Second there must be a culture of TRUST, since you are sharing money, sharing risks, and supporting new leaders. Third, is to BE REALISTIC. You need successes, especially in the beginning. Too many early mistakes, and you are finished. Finally, you need friends and collaborators -- but pick them carefully!
This had us inspired and buzzing all through lunch, another amazing sampling of Basque cuisine. I had steamed artichokes with a delicious sauce and braised pork, finished off with dark strong coffee and ice cream with slivers of dark chocolate.

The afternoon session featured a presentation of one of the students in MUNDUKIDE, a small overseas assistance program with the people of Mozambique, Brazil, Cub, and a few other countries. One discussion was largely about microloans, which weren't working very well, and another about road-building, which was rather successful.

Our final session was with Fred Freundlich, the American professor, who was a veteran of the movements against plant closings in the U.S. a few decades back, who now was a faculty member at Mondragon University. Since he understood both our realities and those at MCC, he could handle any outstanding questions.

There were a lot of them. The first was how much was MCC's success a result of factors unique to the Basque Country. “It's somewhat important, but not decisive,” Fred answered.
One very important factor was it started at just the right time. If it had started 10 years earlier, conditions may have been too harsh. But the first coops were launched at a time when people really needed a lot of things, and finally had a little savings to spend. Many businesses grew in this period. If it started 10 years later, MCC may have had much stronger competition, and may not have gotten off the ground so well.
I asked what was the response of the socialist and communist groups in the Basque County and Spain to MCC? “Mixed and confused,” was the answer. Some thought it utopian. Others dismissed it as a diversion, as making workers into capitalists. "But they still keep sending delegations for visits, and going away impressed," Fred noted. The Basque left was also fragmented over violence, when ETA, the Basque armed resistance group, assassinated a former leader of one of the MCC coops who was also a socialist official.

After a thoughtful pause, Fred made a point that applied to the U.S. Left as well. “There's two trends in the left,” he explained. “Those who think long and hard about business and what to do with it. And those who mainly like to discuss left ideas.” The implication was that the two trends most often didn't overlap, even if it was wise to do so, both tactically and strategically.

Mikel brought the session to an end by asking us all for our new ideas on how we might implement what we had learned, and possible projects for doing so. There were all sorts of plans in the works on the part of our group, from networking food coops, to producing new green products, to making a new film about Mondragon for a U.S audience.

We clearly all had our imaginations fired up by the experience. Mikel gave us each a certificate for completing a 40-hour study seminar, which was a lovely touch. But the truth was that most of us would need no reminder hanging on our walls. What we had learned here had changed us, in some ways deeply, and we would be looking at people and projects in new ways for some time to come.

[Carl Davidson is a national co-chair of the Committees of Correspondence for Democracy and Socialism, a national board member of Solidarity Economy Network, and a local Beaver County, PA member of Steelworkers Associates. His website is Keep on Keepin' On, where this series also appears. Davidson is also available to speak on the topic. Contact him at carld717@gmail.com. For more info on these tours, go here.]

Also see:The Rag Blog

[+/-] Read More...

01 October 2010

Carl Davidson : Mondragon Diaries IV: Banking on the Future

Arrasate-Mondragon in the Basque Country of Spain. Image from SolidarityEconomy.net.

Mondragon Diaries, Day Four
Worker coops, worker banks, worker skills:
Weathering today's crises


By Carl Davidson / The Rag Blog / October 1, 2010

[This is the fourth of a five-part series by Carl Davidson about the Mondragon Cooperative Corporation, a 50-year-old network of nearly 120 factories and agencies, involving nearly 100,000 workers -- centered in the the Basque Country but now spanning the globe. Go here for the series so far.]

BASQUE COUNTRY, Spain -- Most new small businesses fail. That's a fact, whether they are in the Basque Country or in the U.S. Or anywhere else. Yet the Mondragon Coops, which all started as small worker-owned businesses, have hardly ever failed. Why? The key is in Father Jose Maria Arizmendi's original founding conception of cooperatives as the interlocking of school, factory, and credit union.

This was the thought I was rolling over in my mind as our bus again climbed the slopes on the Arrasate-Mondragon valley, this morning with grey skies and a light drizzle. We were headed for an administrative office of Caja Laboral, the worker-owned banking network of the MCC Coops. The ride wasn't far, and we were soon whisked into a small auditorium. Our mentor, Mikel, introduced the staff member who would introduce us to the world of banking, and Mondragon's modification of one corner of that reality.

Some people might question why workers for social change would want to be involved with banks at all. But certain kinds of credit and finance are important components of any society -- capitalist, socialist, or somewhere in between.

Father's Arizmendi's conclusion that two of the many reasons cooperative movements failed in the past was the lack of reliable credit and the lack of innovation and new ideas. Hence the reason he started with a school, but was soon to add a small credit union formed from the small deposits of his parishioners and their neighbors. To start a factory, you had to borrow some money, and borrowing the money of people close to you at low cost was the best way to go.

By 1959, the small credit union had grown and transformed into Caja Laboral. Today it is one of the major banks in Spain, with assets of 21 billion euros and 1.5 billion in equity. It has 18.6 billion in customer deposits, offset by 16.4 billion in credit loans. It has 1,2 million clients, only 120 of which are the MCC coops.

It has 2,000 people working for it, and all are worker-owners. Actually, the bank is owned 55% by the MCC coops and 45% by the staff workers. But the rule they have adopted is that the factory coops pick eight of the board members, while the staff workers elect four. Since Caja Laboral, is a coop of coops, it is what MCC calls a "second degree" coop. Other second degree coops are their schools, medical clinics, and insurance agencies.

“We are rated the best bank in Spain in customer satisfaction,” says our presenter. “One reason is that we are worker-owners ourselves, and not socially distant from them. We work closely with our clients. We are prudent and conservative

Mikel gave a wry laugh from the back of the room, and interjected: “Except for the Lehman Brothers fiasco...” It turns out Caja Laboral had taken a hit of 160 million euros it had tied up in Lehman Brothers securities when the Wall Street investment bank collapsed at the beginning of the financial crisis two years back. Not only had MCC's bank been hurt, but

“Yes,” said our presenter. “But we followed our rule of transparency. You and everyone else knew it the same day, and we announced it to the press the next morning.”

This opened up a discussion among all of us on the proper role of banking and credit unions, including cooperative ones. It's not a subject progressive activists are all that familiar with, but we had it anyway.

First it was clear that Caja Laboral's big sin in the Lehman Brothers case was believing in the validity of the AAA ratings of its securities, set by U.S. Government agencies, which turned out to be a sham. Second, it was also clear from the numbers presented that Caja Laboral was really something on the order of a strong and relatively cash-rich savings and loan operation and consumer services bank. Its managers didn't get rich, but had incomes within the same narrow and modest salary spread as all MCC coop members. Its profits were plowed back in to building new coops.

It was not in the same league as the giant Wall Street speculators in derivatives, with their billion dollar bonuses, who were trying to gain wealth not by creating new wealth, but by pure gambling with other people's money.

Most of us concluded that Caja Laboral was a sound and necessary part of MCC and its growth, but the arguments continued out the door and on the bus ride further up the mountainside to our next talk at the Otalora conference center.

Here we had a new topic, the training of governing boards of the coops. It did no good to elect workers to coop governing boards, and then just let them sink or swim. A skills transfer and training program was in order.

Our presenter was Juan Ignacio Aitpunea. He was a well-seasoned and tough-minded older Basque worker with strong cooperative values in his heart.

“We use a Basque word, ORDEZKARI, for our program,” he started off. “It means 'representative,' because that's the task of the boards, to represent the workers. Our boards are elected to four-year terms, but we stagger them. Every two years, only 50% change, but with 120 coops, that means we have about 1,000 new board members to train every two years.

“We do it in steps. In the first six months, we get the new people to do self-evaluations, to find out their competencies, or the lack of them, so we know what to stress over the next year or so.

What were the skills needed?

“First,” Juan continued, “you have to know the basics, the laws on cooperatives and the functions of coop leaders. Second, you need common skills -- teamwork, how to communicate, how to lead, how to make timely decisions. Third, you have to know how to design and work through a followup plan."

All this was crucial because the governing board not only shaped policy, it hired and fired managers. Worker-owners, by their nature, cannot be fired. Over 50 years there was only one case, where a small group got caught embezzling.

Juan went into more detail on this, but our crew had other questions: how were people nominated, and what was involved in running?

First, if there are two vacancies, there must be at least three candidates, he explained. Any worker could volunteer to run, but he or she had to get signatures of 10% of the workforce. Next, the workplace's social council, which serves some of the functions of a trade union, could suggest a candidate. Finally the old board could name one new candidate itself. But an initial vote was taken so each of the final minimum of three candidates to get a 50% minimum, then the vote was held to determine the final two.

“We need this to make sure board members have a wide respect throughout the workplace,” Juan added. “This is especially important in hard times, like now, when hard decisions often have to be made." This meant firing the temp workers or cutting salaries to deal with the downturns.

"Leading is not just about friendship, or making friends. This is not mainly a place for that. But it is a great school where you can learn what it means to be responsible. You may also make a few new friends. In fact, in tough times, that's when you can make the best and truest friends.”

Juan also stressed the need for diversity and the need to bring forward younger leaders. “When you get old like me, you get too used to having your own way. A time comes when you need to let new people in, but still find other ways to make a contribution.”

Mondragon University. Image from Universidad.es.

Our last stop of the day was Mondragon University. It was formed as a second degree coop by joining the engineering school, the business studies program, and the humanities and pedagogy teaching coop. It currently has about 3,600 full time students. Tuition is about 5,000 euros a year, considered moderate for a European university. Most of the students are from middle-income families in the area or from the workers in the coops.

Fred Freundlich was our faculty presenter, an American who had been in the coop movement in the U.S. in the 1980s, but had lived in the Basque County for a good number of years. He gave frank and critical answers to our questions.

I raised my hand, and asked: “Suppose I'm a young worker in one of the local industrial coops, and I decide I want to become part of the management. How does MU help me? Do they?”

The short answer was, "Yes." But Fred added that management usually required a college degree, and you didn't necessarily need to get it from MU. If you had a good resume and vita from elsewhere, you'd still be considered. On the other hand, if your coop saw that you were eager to gain new skills, they would give you a good deal of support, including financial, and going through MU for your degree would be a plus.”

Others raised the general question of activism among youth.
Frankly, Basque youth aren't all that active inside the coops. They're into third world global justice issues, environmentalism in general, and Basque nationalism. About the coop managers, I'd say a strong minority, maybe 30 percent, have solid cooperative values at heart, another minority pays lip service to them, and the rest are somewhere in between. We clearly need a new surge of activism to spread cooperativism beyond the factories, but my guess is only about 30 percent of the workers today are activists on the matter. You really need to talk more with Mikel, who's really a leader on this topic.
Mikel went up front and drew us a wave-like graph, showing an initial surge in the early MCC decades, then a leveling off, then a dip at the beginning of the crisis, and now a small upward turn.

“This is the beginning of a rich discussion, how we need to redefine and reinvent ourselves for the 21st century? But the bus is waiting to take us to dinner in San Sebastian. We can return to it tomorrow.”

[Carl Davidson is a national co-chair of the Committees of Correspondence for Democracy and Socialism, a national board member of Solidarity Economy Network, and a local Beaver County, PA member of Steelworkers Associates. His website is Keep on Keepin' On, where this series also appears. Davidson is also available to speak on the topic. Contact him at carld717@gmail.com. For more info on these tours, go here.]

Also see:The Rag Blog

[+/-] Read More...

27 September 2010

Carl Davidson : Mondragon Diaries III: Visions of the Future

Otalora: This old blockhouse fortress now houses a worker-owned credit union. Image from Udalatx / Flickr.

Mondragon Diaries, Day Three
Visions of the future, ties to the past:
Tools for shaping organization for tomorrow

By Carl Davidson / The Rag Blog / September 27, 2010

[This is the third of a five-part series by Carl Davidson about the Mondragon Cooperative Corporation, a 50-year-old network of nearly 120 factories and agencies, involving nearly 100,000 workers -- centered in the the Basque Country but now spanning the globe. Go here for the series so far.]

BASQUE COUNTRY, Spain -- This morning our bus again takes us far up the winding mountain road to the 15th Century blockhouse fortress now transformed into a conference center. I've since found out it's called Otalora, after an old noble family that owned the whole area reaching back 600 years. In those days, in was an armed way station on a trade route between the center of Spain and the sea, and the Otalora family extracted heavy taxes on the traffic going both ways.

This led to wars among the noble families over these spoils, and at one point the tall armed tower on one end of the building was destroyed by a rival. In the years that followed, to bring a degree of stability, all the armed towers on other castles in the area
were also lopped off . This imagery brought smiles to the faces of the women in our group, who caught the symbolic significance immediately, even if the men took a moment or two to catch up with the laughter.

In any case, Otalora is now owned by Caja Laboral, the worker-owned credit union of the Mondragon Cooperative Corporation, which operates on the scale of a major bank with outlets across the country, in addition to serving as a source of finance to all the MCC coops, that dominate its governing council. The other voice on the council is a bloc of representatives from the Caja Laboral staff workers themselves. A few farmers use the land for dairy cows and sheep, but otherwise, the whole area looks like a well-tended national park.

After the Otalora story, our more serious topic this morning is the wider range of the cooperative movement, both in the Basque Country and Spain. Mikel introduces Lorea Soldevilla, a young worker-owner from KONFEKOOP, the Basque Cooperative Confederation. MCC is part of this, but it turns out that there are many more cooperatives in the region that are not from MCC. From the group's acronym, I also learn that the Basque language does not use the letter "C."

There are currently 755 cooperatives in the Basque Country, she explains, and only 80 of them are the worker-owned MCC coops. There are a total of 537,000 members of all the coops, but only 54,919 are worker members, and 37,860 of these are the MCC worker-owners.

Where did these other nearly 500,000 come from? Lorea brings up a spreadsheet on a screen to show us that there are all kinds of cooperatives and members. Eroski, the supermarket chain, for instance, has consumer members as well as worker members, and there are other consumer coops. There are also producer coops, such a dairy farms where the farm owners are members, but not necessarily the farm workers. There are also marketing coops, transport coops of independent truckers, cooperative schools, food coops, and housing coops.

At the center of KONFEKOOP's work as a confederation is the concept of "inter-cooperation," the idea that coops should help each other. "Inter-Coop," as it's called, has several organized components. ELKAR-LAN helps people with the legal and organizational consulting needed to form new coops. ELKAR-IKERTIGIA is a volunteer policy and research center. PromoKoop helps find new markets and helps coops enter new markets. OLINARRI helps to link coops to the wider social economy.

But there is another vital function as well. MCC is nonpartisan; it's not tied to any political party, and the same is true of many of the others. Still, they need to influence and work with the Basque and Spanish governments, especially on matters of law and regulations that can help or hinder them.

Konfekoop enables them to do this, both as a lobbying arm and by directly having its people serve on government bodies and study groups. It's a way of working with favorable politicians of all parties without directly being members of any of them. The Basque government, for its part, is largely favorable to MCC and the other coops, since they have helped to bring a higher-than-average degree of prosperity to the region.

We all gave Lorea a round of applause for expanding our horizons. It was now time for our caffeine break, and we all headed downstairs to a room in the old castle that was now a coffee bar. There were three workers getting us expressos and cafe con leches, so I asked, 'Are you guys worker-owners of this fancy Caja Cabral enterprise too? I asked. “Of course,” was the answer, as if it was the most natural thing in the world.


As we returned for the next round, I heard a few groans about the title: "The Corporate Management Model." Some gritted their teeth for a technical lecture; a few said, “can't they find a better word than 'corporate'?” “Give it a chance,” I replied. “'Corporation' doesn't always translate with the same meaning we put on it.”

Mikel introduced Jose Luis Lafuente, whose title, accordingly, was "Director of Corporate Management Model." Jose started off by explaining that their model was developed over decades, going back to Father Arizmendi's Ten Principles, but in a 1990's update, was also deeply rooted in the TQM outlook, or Total Quality Management. Again a few eyes were rolled, because a version of TQM was used against U.S trade unions back in those days, and a few around the table remembered it.

But as Jose continued expanding on MCC's approach, which put the core values of worker ownership and democracy at the center of an ever-widening set of values and organizational principles, the mood in the room began to change. He then took each component, and in a wonderful set of inter-linked graphic images, he unfolded a number of powerful tools that could be adapted to any progressive organization to build its strength, grow its size, and achieve its goals.

He posted "people in cooperation" as the first starting circle, then went on to connect that concept to the necessity of participatory organization, wage solidarity, social transformation, and many others. By the time he was done, everyone was wide-eyed. “So what do you think?” he asked. “I love it,” I blurted out. “But I'm going to adapt it to building my socialist and other political organizations.”

He laughed, but in the front of my mind was the conclusion that I had a powerful, modernized framework to update and supplement Lenin's "What Is To Be Done" and a number of other classics on organization.

It was time for lunch, and all the tables were buzzing with excitement over the presentation. Jose sat across from me, but he immediately asked about other matters. “We made an agreement with the U.S. Steelworkers about a year ago to form some worker coops in the U.S. How's it going?”

“From what I know,” I replied, “they want to proceed with caution, finding a few profitable firms to buy up and then transform into coops. Plus a lot of their members had bad experiences in the past with Employee Stock Ownership Plans or ESOPs, and they have an educational task to show how the MCC model is not at all the same as ESOPs.

He countered that it was often easier to form a worker coop as a new startup, but he understood my points. He went on to speak highly of GAMESA, the Spanish wind turbine outfit that had opened up three new plants in Pennsylvania in cooperation with the USW. GAMESA got along fairly well with MCC, even though it wasn't a coop, but simply a high-road green capitalist firm.

After lunch, we boarded our bus and headed back down the mountainside to the town of Assarte-Mondragon. We were next visiting IKERLAN, one of MCC's 13 Research and Development cooperatives. It was the first and the largest, and had a number of research lines. It included 209 full-time research scientists as worker-owners, and another 54 trainees.

“Effective Innovation at the service of our company clients” was how Maria, our presenter, summed up their mission. She went on to describe energy saving power stations, micro-needles for bio-tech medicine, new computer components for smart electrical grids, touch screen control panels for home automation, and so on. “Less energy, with lighter materials at lower costs” is a common thread, she added.

Again I was impressed by seeing the advanced productive forces, created by high design, that would be critical to solving problems like the climate change crisis. One of our team, however, asked an interesting question: “Does serving your clients mean working on nuclear weapons or other military instruments?” No, she said firmly, we turn these down. “Is that written down somewhere?” She wasn't sure, but added that with their values, “We would simply not think of doing things like that.”

The comment served as a transition to the last part of our day, a 40-minute bus ride even higher into the mountains. We were headed to a Franciscan monastery with a new secular institution, BAKETIK, the Basque Peace Center of Aranzazu, far above the small town of Onati.

Basque Country denizens. Image from Epicurean Ways.

The ride itself was a joy, with forest broken up by high mountain meadows with dairy cattle and, once you got higher, the sheep the Basques are known for raising. The cathedral at the top was a powerful piece of modern architecture, one you had to walk down through cut stone to enter.

The peace center itself had taken on a tough task. There were hundreds of undocumented refugee children, mainly from bloody civil conflicts in Africa, who had wound up on the streets of Spain, homeless. Many were brought here, and paired with volunteer "big brothers" and "big sisters" to help them regain trust and their own physical and mental health. It took patience, but it served the children well.

On the way back we stopped for an hour in Onati, known for good chocolate stores. It was true, as I picked up a large bar of truffle-flavored 80% cacao dark for only two Euros. But as I strolled through the town square at evening, I noticed something of far greater value. The town's working-class families were sitting in the town square, drinking beer and coffee, engaged in conversation. Children had the run of the streets, playing games and riding bikes -- and there wasn't a bevy of police cars to be seen. It was a place of community and solidarity, where people still enjoyed the simple company of one another and the smaller pleasures of life.

[Carl Davidson is a national co-chair of the Committees of Correspondence for Democracy and Socialism, a national board member of Solidarity Economy Network, and a local Beaver County, PA member of Steelworkers Associates. His website is Keep on Keepin' On, where this series also appears. Davidson is also available to speak on the topic. Contact him at carld717@gmail.com. For more info on these tours, go here.]

Also see:The Rag Blog

[+/-] Read More...

23 September 2010

Carl Davidson : Mondragon Diaries II: It Starts With a School

Mondragon Cooperative Corporation in Basque Country. Image from PermcultureCooperative.

Mondragon Diaries, Day Two
It starts with a school:
Knowledge and the path to workers power


By Carl Davidson / The Rag Blog / September 23, 2010

[This is the second of a five-part series by Carl Davidson about the Mondragon Cooperative Corporation, a 50-year-old network of nearly 120 factories and agencies, involving nearly 100,000 workers -- centered in the the Basque Country but now spanning the globe. Go here for "Mondragon Diaries I: Bridges to Socialism."]

BASQUE COUNTRY, Spain -- This bright and sunny morning in the Basque Country mountain air again begins with our bus slowly winding up the mountain slopes. But this time it's a short ride. We stop at ALECOP, a unique worker-student cooperative that is at once part of Mondragon's production units and its educational system. Think of it as a small worker-owned community college, but with technology shops that actually produce items for sale in industrial markets, and you won't be far off.

Once we get settled in a classroom, our MCC mentor, Mikel Lezamiz, introduces us to a young 30-something worker-technician who is going to explain ALECOP to us, and a good deal more.

“First of all, we are a mixed cooperative,” he states. “This means we are made up of both worker-owners and students. There are 59 worker members and about 300 student members. Some of our students also work in other coops part-time, but our students are mainly working as part of their studies, and to earn a little money to support themselves as students.”

He goes into some history, reminding us that MCC started back in the 1940s, with the polytechnical school started by Father Arizmendi, the innovative priest who envisioned MCC, as his very first effort to help the war-torn Basque workers find a path out of the devastation of World War II. The first school's students helped form the first factory, but the school also continued, and over the decades, it evolved into what is now ALECOP, several more coop high schools, and what is now Mondragon University.

“To democratize the power, we have to share the knowledge,” interjected Mikal, summarizing Arizmendi's theories. “Thus continual study throughout life must not only be for the rich, but also for the workers.”

What kind of jobs do the ALECOP students have? Our young guide shows us a list: R & D assistant, storekeeper, publisher, process technician, electronic assembler, and several others

What kind of products do they make? “Most important, we design educational tools, to help in teaching electricity, electronics, automation, telecommunications, and other subjects needed in high schools and in factory training. But we are also a nonprofit. We make money, but our hope is mainly to cover our expenses. He goes on to describe a list of 'competencies' that they hope to instill in the students, so they can go to work in FAGOR or other MCC factories with a good degree of skill.

It all becomes much clearer once he takes the 25 of us out into the shop area. As someone who taught computer repair to inner city youth and ex-offenders by recycling old computers, I step away from the group and examine some of the teaching stations.

Teaching stations at Mondragon worker-student cooperative. Image from The Syndicalist.

They are large panels with, for example, critical automotive parts on one side, connected with various testers and gauges. I examine the back side and find the motherboards and circuitry connecting them all. A student who wanted to become an auto mechanic, for example, could test and work through the key components of dozens of vehicles on the front side, while the programming embedded in the back side would give him or her the proper positive or negative training responses.

Very cool, I thought. Even cooler was the fact that the students not only used these machines for their own learning, they also made the circuit boards and wrote the software to make these instructional learning tools in quantity, ready to be sold and used anywhere.

After ALECOOP, our bus makes a quick stop at Mondragon University's top-line coffee bar. We're in a hurry, so Mikel gets busy: How many with milk? How many black espresso? He turns in the bulk order, and with our caffeine fixes, we're back on the road in 20 minutes.

The late morning session is at Mondragon Assembly, a mind blowing and thought bending state-of-the art high-tech and high-design worker cooperative competing on a world scale. Its products are the software and hardware of room-sized automatic assembly machines making solar photovoltaics and many varieties of electronic components for robotics.

“It's rather easy to design a machine that can make a switch or solar cell every 1.8 seconds,” explains a young coop member. “But it's very hard to make the same switch or cell in 1.2 seconds. Yet that is what our clients are demanding of us, and it changes every six months, with higher and faster standards. We either do very well, and make lots of money for the cooperative, or we fail and we lose a lot.

“But this is what we want to be doing,” he adds. “We don't have too many workers in this coop in the 40 to 55 age range. We're all younger. Some say we try to make up in attitude and spirit what we lack in experience!” This brings a round of laughter, but we all know exactly what he means. He goes on to describe the global market for these advanced means of production, with China leading the way in many of them.

“We can't just produce for the Basque Country, or even Spain and Europe. We have clients everywhere, and we are setting up factories everywhere -- Germany, Mexico and China, too.” While owned by MCC, none of these abroad are yet full worker-owned coops. But neither are they sweatshops; they are very advanced production units with skilled workers.

Still, it is a contradiction, and MCC's aim is to eventually convert them all to cooperatives. But they have to move in accordance with the host country's laws and customs on the matter. Or simply make the decision to abandon proposed startup projects in that region to other regular capitalist firms.

How are his clients spread around? “Right now, we have 85 here in Spain, 30 in Mexico, 25 in France, six in China and 20 in Germany. For this kind of equipment, you don't get a large number of orders. Maybe 10 a year. But each one is worth millions, but only if we are successful! But keep in mind that for every two jobs we create globally on the outside, we also create one new job here inside MCC.”

As we left, many in our group were debating the pros and cons of global economic justice. I shared their concerns, but I also saw something else. Here were the beginnings of some of the most advanced productive forces in the world, the means of both economies of abundance and the means of clean and safe renewable energies and far lighter ecological footprints.

n any dynamic socialism of the 21st century, these young people and their creative efforts would be invaluable. I would want to shape their boundaries, but I would not want to stifle them or just send them off to work for the neoliberal globalists. We needed them with us.

As is the custom in this part of the world, our main meal was a long mid-day "lunch," really a dinner. We were driven higher up into the mountains on a winding road to an immense building that looked like a blockhouse or small fortress of stone. "When was it built?" someone asked. We checked the carvings, and translated. Around 1400 to 1500, before the time of Columbus. But now it was updated into long stone-walled dining rooms, with a conference center on the upper floors. Needless to say, lunch was exquisite and Basque cuisine deserves its reputation.

In our last session for the afternoon, Mikel gives us all a detailed technical talk about cooperative structures, how they can vary, and especially, how they are financed and governed.

“People are the core, not the capital. This is the main point,” he starts off. “If capital has the power, then labor is simply its tool. But if labor has the power, then capital is subordinate. It becomes our tool.”

This is part of Father Arizmendi's 10 principles, which he presented yesterday. “Labor is sovereign" is one of them. “This means one worker, one vote -- whether you have more money or less or anything else, it doesn't matter. You have an equal voice and the access to knowledge and transparent information.

“One journalist once said back in the 1970s that Father Arizmendi had created a progressive economic movement that was anchored in an educational institutions. When Arizmendi heard it, he said, 'No, its just the reverse. We are creating an educational movement for social change, but with anchors in economic institutions.'”

It's the whole of humanity that matters most.

[Carl Davidson is a national co-chair of the Committees of Correspondence for Democracy and Socialism, a national board member of Solidarity Economy Network, and a local Beaver County, PA member of Steelworkers Associates. His website is Keep on Keepin' On, where this series also appears. Davidson is also available to speak on the topic. Contact him at carld717@gmail.com. For more info on these tours, go here.]

Also see:The Rag Blog

[+/-] Read More...

20 September 2010

Carl Davidson : Mondragon Diaries I: Bridges to Socialism

Not paradise, but close: Mondragon Cooperatives in Spain's Basque Country. Photo from Model-Economy.

Mondragon Diaries, Day One
Bridges to 21st century socialism:
Why humanity comes first at work

By Carl Davidson / The Rag Blog / September 20, 2010
“This is not paradise and we are not angels.” -- Mikal Lezamiz, Director of Cooperative Dissemination, MCC
[This is the first of a five-part series by Carl Davidson.]

BASQUE COUNTRY, Spain -- After a short bus ride through the stone cobbled streets of Arrasate-Mondragon and up the winding roads of this humanly-scaled industrial town of Spain's Basque Country in a sunny fall morning, taking in the birch and pine covered mountains, and the higher ones with magnificent stony peaks, I raised an eyebrow at the first part of Mikel's statement.

The area was breathtakingly beautiful, and if it wasn't paradise, it came close enough.

I'm with a group of 25 social activists on a study tour organized by the Praxis Peace Project. Our focus is the Mondragon Cooperative Corporation, a 50-year-old network of nearly 120 factories and agencies, involving nearly 100,000 workers in one way or another, and centered in the the Basque Country but now spanning the globe.

We're here to study the history of these unique worker-owned factories, how they work, why they have been successful, and how they might be expanded in various ways as instruments of social change. Georgia Kelly of the Praxis Peace Project is our cheerful and helpful tour leader, but Mikel is our MCC host in charge of teaching us what he knows.

The MCC reception center is part way up on a slope of a much larger mountain, but it offers a magnificent view of the town and the dozens of industrial and commercial cooperatives in and around it in the valley below. After watching a short film on the current scope of MCC, we move to a lecture room for Mikal's talk. The signs on the wall say "Mondragon: Humanity at Work: Finance-Industry-Retail-Knowledge," in Basque, Spanish, and English.

“Humanity at Work,” Mikal starts off, reading the slogan. “This means we are the owners of our enterprises, and we are the participants in their management. Our humanity comes first. We want to have successful and profitable businesses and see them grow, but they are subordinate to us, not the other way around.”

The other part of the slogan -- finance, industry, retail, knowledge -- refers to the scope of the cooperatives. Of the 120 workplaces, 87 are industrial factories, making everything from kitchen appliances and housewares, to auto parts, computers, and machine tools. One of the coops is a large bank, Caja Laboral. One is a Mondragon University, with some 3,600 students; seven others are research and development centers. One is retail, the huge network of hundreds of Eroski supermarkets and convenience stores, four are agricultural, and six are social service agencies managing health care, pensions, and other insurance matters.

All are worker owned. All have the management selected by the workers and the coop governing boards. All have yearly assemblies where the workers set strategies, make or change policies, and elect their governing boards -- one worker, one vote.

Mikal also introduces this by telling us a little about where we are. The Basques are among the oldest people in Europe, with a unique language, unrelated to any others. They have a strong sense of culture and solidarity, and an ongoing quest for autonomy, even independence, from Spain.

The region is made up of four political divisions in Spain and two just across the Pyrenees in France, with 3 million Basque inhabitants there and another 3 million living abroad. They were a center of resistance to Franco's fascist regime, and have won a good deal of autonomy today in some of the districts.

After World War II, the area was poor and devastated, and the Franco regime was in no mood to give it much help. But one who did rise to the challenge was Father Jose Maria Arizmendiarrieta, a priest who had fought Franco, ended up in prison, but managed to get released instead of executed. Father Arizmendi, as he is popularly called, was assigned by the church to the valley in the Basque containing the small town of Arrasete-Mondragon.

He set to work trying to solve the massive war-created problems at hand. He began building a small technical school, and then a credit union where the region's peasants and workers pooled meager funds. After a few years, with just five of the best students of the school, he started a small factory making one product: a small paraffin-burning stove so people could cook and heat water. It was a good stove, and sold well.

Most important, he gave the project a set of ten carefully thought-out principles to serve as guidelines for the current and any future endeavors:
  1. Open Admission, meaning no worker is to be discriminated against because of nationality, gender, political party or religion and such
  2. Democratic organization, meaning one worker, one vote
  3. Sovereignty of labor
  4. Instrumental and subordinate nature of capital
  5. Participatory Management
  6. Wage Solidarity
  7. Cooperation between Coops
  8. Social Transformation
  9. Universality
  10. Education
How each of these is implemented, and with what success, will be spelled out in this series of diaries -- at least I'll give it a good shot. But following this introduction and a barrage of questions -- Mikal answered a good many -- he soon had us all get back on the bus. The best way to learn was to see for ourselves. So he took us off to FAGOR, the relatively large industrial coop that had grown from the first tiny shop that built that first small paraffin stove.

FAGOR today is several connected coops with about 6,000 workers overall, both here in the Assante-Mondragon area and in China. All the employees in the Basque areas are worker-owners; those elsewhere are in varying stages of becoming so.

As we got off the bus, we were at a large modern structure that could easily enclose several football fields. We were given headsets so we could hear our young woman guide over the din of the assembly lines. Once inside, we saw a very modern and computer-assisted assembly line that was putting together household washing machines, from beginning to end. It wasn't completely automated; workers were required at many points, especially at those checking quality.

This quality was a hallmark of MCC products generally. They compete by selling very high quality goods at reasonable prices and good service. They have very few supervisors. I didn't see a single one covering the whole process of making the washing machines, and later some convection ovens, from one end of the line to the other. Self-supervision was thus a competitive advantage. Not having a lot of supervisors to pay means lower prices.

Before the crisis hit two years ago, 15 percent of FAGOR's workers were temporary "trial period" new hires, meaning they couldn't become worker-owners for six moths to a year. All these were laid off due to the fall in demand, but all the regular worker-owners remained on the job or were shifted to other related coops.

At the moment, the workers were on two shifts. "One group starts at 6 a.m. and ends at 2 p.m.,” our guide explained. “The other goes from 2 p.m. until 10 p.m. There are breaks every two hours, after which each worker can take a different position on their section of the line. The workers decide this rotation among themselves. It helps with safety and spreads skill sets around.”

We noticed that some of the components were in boxes shipped from other countries, and asked Mikal about it. “Our policy for purchasing is set by three things -- quality, price and service. If an outside firm does better, we use them.”

He picked up a wiring harness from a box.
Here is a good example. We used to have this made by one of our student-run coops. They had two products, this wiring set and another computer component. The quality and service was good, but the price was poor. This piece, made in Turkey was just as good, the Turkish firm had good service, but at a much lower price.

Our students only worked a four hour day, and paid themselves 550 Euros a month, but the Turkish workers put in 60 hours at 200 Euros. In that situation, we encouraged the students to shift to improving the product where they were better, and to design new products.
Some in our group groaned at the concept, but others felt that, given a market economy, it was the best way to handle the problem -- although raising the conditions of the Turkish workers would be a good idea, even if beyond the reach of MCC at the moment.

One thing that stood out of the Fagor line was a concern for both safety and quality. One hundred percent of the machines were tested on the line for safe operation, and another 3 percent were tested again at random just before final packaging. There were numerous station stops where workers kept daily records of any accidents -- a green smiley face sticker was a good day, a red frowny face was a problem day. I only saw one red face on a chart on the entire line.

FAGOR is producing 850,000 units a year, shipped mainly throughout Europe. Their pressure cookers are very popular in U.S. department stores.

After a delicious and leisurely lunch, Mikal gave us another talk, stressing two topics -- the spread of MCC to other countries, and its ongoing and often difficult efforts to transform its factories in areas outside of the Basque country into full worker-owned cooperatives.

Of the 100,000 people who work for MCC, of the 39,000 in the Basque Country, some 99 percent are worker-owners. Of the 40,000-to-50,000 recently brought into MCC in the rest of Spain, Portugal, and parts of France, many are in various stages of becoming worker-owners, although some are discouraged by the low or negative earnings in the last two crisis years. The remaining 17 percent in countries like China and Brazil still remain wage labor in firms owned by MCC. MCC, however, is still trying to find ways to deal with local laws and customs in these countries to make a full transformation.

This discussion ran into overtime, so the last part of day one, a visit to an Eroski supermarket, was limited to 30 minutes. This one, a full-sized supermarket, was an excellent facility, owned both by all the workers and many consumers as well. Think of it as a high quality worker-owned Walmart combined with a Whole Foods with much lower prices, and you'll get a reasonably good idea on what it was like. But all I can vouch for at this point is that the fair trade 70 percent chocolate bars come very close to being a small piece of paradise.

[Carl Davidson is a national co-chair of the Committees of Correspondence for Democracy and Socialism, a national board member of Solidarity Economy Network, and a local Beaver County, PA member of Steelworkers Associates. His website is Keep on Keepin' On, where this article also appears. Davidson is also available to speak on the topic. Contact him at carld717@gmail.com. For more info on these tours, go here.]

The Rag Blog

[+/-] Read More...

09 June 2010

David P. Hamilton : Where's Our Sense of History?

Rocamadour, a historic village in the Dordogne region of France. Photo from Les Bau-Tremblay en voyage website.

A sense of history:
We don't have it. France does.


By David P. Hamilton / The Rag Blog / June 9, 2010
“Living in France is the first time I can honestly say I feel at home.” -- Johnny Depp, Owensboro, Kentucky
I recently got around to seeing Quentin Tarantino’s Inglourious Basterds (sic) and hated it. I’ve never been a fan of Tarantino, principally because of his idea that gratuitous violence is funny if not liberating. I expect him to soon remake the Three Stooges with AK-47’s. What bothered me more on this occasion was his contempt for history and that he seemed to relish that contempt.

To fictionalize history is normal. Tolstoy’s War and Peace centers on Napoleon’s invasion of Russia. More recently, Irene Nemirovsky’s Suite Francaise brilliantly deals with the same subject Tarantino tackles, the Nazi occupation of France. These authors honor the actual history. Tarantino mocks it. The events he depicts not only did not happen, they are wildly contradictory to what did.

It’s like remaking The Alamo, but having the Texans win or having regiments of newly liberated slaves marching across Georgia at the head of Sherman’s army. Tarantino’s cavalier approach to history is typically American and contrasts sharply with Europe where history is an ever-present feature of people’s lives and they take it seriously.

During our trip to France this year, my wife and I visited Rocamadour, a historic village in the Dordogne region. The date of its founding is uncertain, but by the Middle Ages it was already a major pilgrimage site. On important occasions, tens of thousands were said to have gathered in the narrow valley below its ecclesiastical center. In May of 1270, the French King Louis IX (aka, Saint Louis), his queen and three brothers visited. That was in its heyday.

Rocamadour’s setting is striking, ancient churches clinging to vertical 500 foot limestone cliffs. Centuries ago, penitents climbed hundreds of steps leading to the cathedral on their knees in chains. A medieval village nestled below provided services for the pilgrims. Today, those steps are traversed daily by thousands of unrepentant tourists. The medieval village has barely changed, ancient buildings and still full of restaurants, hotels and souvenir shops.

Not far north of Rocamadour are the ruins of the village of Oradour-Sur-Glane. On June 10, 1944, four days after the Allied landing on Normandy’s beaches, a detachment of Nazi SS troops entered the village, rounded up the inhabitants, including 247 children, and massacred them all. As the Michelin guide says, it was “chosen for its very innocence and insignificance, the better to terrorize the French.” In April 1945, before the war was even over, De Gaulle made a pilgrimage there and declared that the ruins should remain forever untouched as a memorial. And so they have.

Sally and I stayed a week in the nearby village of Sarlat, a gem of medieval architecture with many half-timbered houses dating from the 15th century. The town’s cathedral, dating from the 12th century, contains the memorial that one sees in literally every French community to those who died “pour La France” in WWI. Although Sarlat has only about 10,000 inhabitants today and had fewer then, the memorial lists hundreds of names, many family names appearing more than once.

Overall, France suffered 1.4 million soldiers killed and five million wounded in that war, fought largely on French soil, out of a total population of roughly 40 million. A short distance away on the edge of its medieval town center is a quiet park with the monument to the martyrs from Sarlat who died in the resistance to Nazi occupation. It lists over 500 names, many with the same surnames as found on the memorial in the cathedral.

All around Sarlat are chateaus and churches dating from the 15th, 16th, and 17th centuries, and before. One, the Chateau des Milandes, was once owned by the black expatriate American performer, Josephine Baker, a sensation in Paris of the 1920’s and 30’s. There she gathered together her numerous adopted children of different races, religions, and nationalities, bringing them up to create a “world village” of mutual understanding. She was decorated by the French government with the Legion of Honor for her support of the resistance against Nazi occupation and returned to the U.S. briefly in August 1963 to march for civil rights with Dr. King in Washington.

The Dordogne area is also extraordinarily rich in pre-historic sites including the famed Cro-Magnon cave paintings at Lascaux. People have chosen to live in this splendid valley continuously for tens of thousands of years.

In terms of its historical richness, this area is not unique in France, nor would it be in many parts of Europe. A couple of years ago we toured Burgundy, staying in Sens, Auxerre and Autun, all stops on the road from Paris to Rome during the Roman empire. In Provence, we stayed in St. Remy-de-Provence where, along with nearby Arles, Nimes, Orange, and Marseilles, there are major Roman ruins. Neighboring Avignon was the seat of the papacy for 70 years in the 13th century. Many small villages in the area date from
the Middle Ages if not the Gallo-Roman era.

Houses in France are still built of stone. They are meant to last a long time. I would guess that there are close to a million houses in France that date from the 19th century or before. The restoration business is lively. A few years ago we saw the Samaritaine department store on the Seine in Paris being remodeled. A giant framework of scaffolding preserved the 19th century façade while they modernized the interior. Then they reattached that façade so that it continues to look like a 19th century building.

When I was in the U.S. Army in Orleans, France, from 1964 through 1966, much of the area between the 12th century cathedral and the Loire River was bombed out ruins from WWII. When I returned in 2000, the area had been rebuilt as it had been centuries before and was considered the “medieval center” of Orleans.

Paris has an even more dense historical quality. Hemingway wrote here and Chopin composed there. In Paris, Marx met Engels, Lenin was a waiter, and Ho Chi Minh was a pastry chef. Victor Hugo lived on the Place de Vosges and Voltaire was born nearby. A short walk from there brings you to the Pere Lachaise cemetery where the Communards fought to the last man and hundreds of notables are buried. Louis XVI, Marie Antoinette and hundreds of other aristocrats were beheaded on the Place de la Concorde.

Walk from there down the Rue Rivoli past the five star Hotel Meurice where German general Dietrich Von Choltitz refused Hitler’s orders to destroy Paris in August 1944, past the Hotel de Ville, site of innumerable historic events including De Gaulle’s assumption of power the day after von Choltitz surrendered, past the 16th century St. Paul’s cathedral and soon you are at Place Bastille where the French Revolution began.

Modigliani and Diego Rivera lived in Montparnasse, Picasso lived in a dozen different spots, and almost every major artist or writer of the early 20th century lived somewhere in Paris. Practically every block has centuries of history and the catalog of notables and events is endless. The walls could crumble under the weight of commemorative plaques.

Replica of John Neely Bryan's original 1840s log cabin in West End Historic District, Dallas. Photo by Artdirectors / National Geographic Photo Gallery.

In contrast, most Americans rarely see a building that is over a hundred years old, let alone five hundred. In Dallas, where I grew up, there is a reconstructed log cabin in a park downtown that was originally built by some early settler. That’s about all.

Houses in the U.S. are built of wood and sheet rock and typically last a few decades at most. They are built with planned obsolescence, meant to be torn down and replaced so that capitalists in the construction industry can continue to maximize their profits. The solid brick house where I was raised was built in 1940, torn down and replaced in the 1980’s by a McMansion, and replaced again only a few years later to please someone’s swelling vanity.

A large majority of Americans never possess a passport or leave their own country. With naïve sincerity, I’ve heard them question why anyone could possibly want to go anywhere else since we already live in the best country in the world. Pangloss would be proud.

Europeans see their history all around them every day of their lives and, hence, have an innate sense of their history that it is simply impossible for most Americans to fathom. You can’t visit any of the sites mentioned above without seeing groups of French students. Entrance to most historic sites and museums in France is free to those under 25 years old. These groups may be composed of inattentive teenagers, but their heritage can’t help but sink in because it is ubiquitous in the environment in which they live. By contrast, the environment in which most Americans live is a historical blank page.

As a result of this historical deprivation, most Americans are unable to grasp their role in history or the world. A foundation stone of American exceptionalism is obliviousness to the past. The result is a national egotism that can only exist through denial of a sense of history. To most Americans, history is unimportant. The rest of the world is far away or
long ago and doesn’t matter anyway. Why should it matter that my ancestors owned slaves or that the U.S. stole half of Mexico or that the Red Army was primarily responsible for defeating the Nazis or that our invasions of Vietnam and Iraq were based on lies rooted in historical fabrications?

History is just a boring course we are compelled to take in high school, often taught by an ill informed football coach who doesn’t much care about it anyway. We slept through it since it had no relevance to our future earning power. What little we know of our past is distorted by unalloyed chauvinism, the fount of a plethora of national prejudices that make us uniquely vulnerable to political manipulation.

Of course, this is not to say that the U.S. doesn’t have important history or great historians or a significant population of historically well-informed people. But these people are too few and they had to work extra hard to dig their knowledge of the past from books, not from their immediate surroundings. In Europe, the past confronts you every time you walk out your front door.

In the early 1980’s I met a local woman in Oaxaca, Mexico, from the village of San Juan Migote. Flor was the housekeeper working for my friend and mentor, Dick Hodge. He was elderly and lived alone in a large house. At that time, archeologists were excavating major tombs in the vicinity of Migote. Lots of ceramics, sculptures and jewelry were being found. They had established a regional museum of local pre-Columbian artifacts in the village.

I asked Flor, probably in her 40’s, if she had always lived in Migote. Yes, and her parents and their parents as well as far back as she knew. So, the artifacts being unearthed were from her ancestors? Yes, of course. She was proud of the recognition the new museum gave her ancestry. I could in no way comprehend that sense of being rooted in history.

At the beginning of our 2010 trip to France, we had a long conversation over dinner with a middle-aged American couple sitting at the adjoining table at a restaurant in Chinon. They were very congenial and seemingly intelligent people. Both were U.S. Department of Defense civilian employees, teachers working with the children of U.S. military personnel at a school at NATO headquarters in Belgium. They had been there for the last five years and before that taught several years at schools on U.S. military bases in Japan.

I asked them why the U.S. Army was still in Europe 65 years after the end of WWII and now almost two decades after the fall of the Soviet Union. They were taken aback by the question as if it had never occurred to them before. After a moment of reflection, they admitted that they had utterly no idea.

[David P. Hamilton is an Austin-based activist and writer.]

The Rag Blog

[+/-] Read More...

Only a few posts now show on a page, due to Blogger pagination changes beyond our control.

Please click on 'Older Posts' to continue reading The Rag Blog.