Institutional Development And Capital Accumulation In A Complex Of Basque Worker Cooperatives (spain).

Abstract

The objective is to study long-run processes of capital accumulation in a Mondragon-type cooperative sector, especially as it relates to transfers of ownership between generations of cooperateurs. The principle contributions are to demonstrate that a cooperative economy can reproduce itself on a larger scale over several generations under various economic conditions and scenarios of membership turnover, and to present a systematic way of understanding the flow of membership and capital. General properties of the cooperative economy to be studied are developed by means of induction from a case study of the successful Mondragon industrial cooperatives in Basque Spain. The first two chapters present this case study as an economic history paying special attention to institutional responses to changing internal and external conditions, and to special circumstances surrounding formation of these cooperatives. The third chapter is a dialogue with mainstream economic theory. It challenges apriori propositions of theorists about degenerative tendencies, the need for external financing, and the lack of economic motivation for a growing cooperative sector to exist. Chapters four and five model the intertemporal flow of members and financial capital into and out of the cooperative sector. These chapters show that cooperatives, despite the need to pay out equity to departing members, can accumulate capital internally at rates high enough to avoid the problems postulated by the apriori theories discussed in chapter three. Another finding is that cooperatives are sensitive to the business cycle, and to market conditions prevailing at the start-up time. This result suggests that the best way for a cooperative sector to grow is by splitting off new activities from existing firms. The Mondragon group has followed such a policy successfully. The study also concludes that a cooperative sector promotes workplace democracy by replacing absentee ownership, but that the scope for participation and self-governance by workers is limited by the need to earn surpluses and normal incomes for the members.