The International Co-operative Alliance notes, “In 1844, a group of 28 artisans working in the cotton mills in the town of Rochdale, … England, established the first modern co-operative business, the Rochdale Equitable Pioneers Society.”
“The weavers faced miserable working conditions and low wages, and they could not afford the high prices of food and household goods. They decided that by pooling their scarce resources and working together they could access basic goods at a lower price. Initially, there were only four items for sale: flour, oatmeal, sugar and butter.”
Based on respect for both the consumer and worker employee, a set of principles was established, and remained essentially the same as those set in 1844, and form the basis for cooperatives today:
1. Voluntary and open membership
2. Democratic member control
3. Member economic participation
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community
Spain's Mondragon cooperative history is unique and born of a similar necessity to give people jobs sprinkled with a goodly dose of deep compassion for the Basques, a devastated people following the end of World War II. The region was decimated, people were starving, and the Basques were vilified by the Spanish government and its leader, Francisco Franco.
José María Arizmendiarrieta, who became a priest after having narrowly escaped execution by Franco after the Spanish Civil War, was assigned in 1941 to the town of Mondragon near his own Basque hometown, replacing the priest who had been shot by Franco's forces.
The poverty that surrounded him inspired him to find a way to create jobs, and cooperatives seemed the obvious answer to keep resources local.
Arizmendi, as he became known, established the Polytechnic School in 1943 to educate workers to run and work in cooperatives. Today, the school continues as Mondragon University.
In the early 1950s, five graduates of the Polytechnic School and Arizmendi set up the first cooperative producing paraffin cook stoves, a rural necessity where little wood was not available. The company name, Ulgor, diversified and expanded, later becoming Fagor and the Mondragon Corporation.
Arizmendi established a credit union for the workers.
“Keep in mind the main point that makes Mondragon work is the three-in-one combo of worker-owed credit union, school and factory. All three are essential, and it's the combination that's needed for long-term sustainability,” Davidson said.
Today, Mondragon sets the standard for worker-owned cooperatives worldwide because of its success.