Eleven billion three hundred twenty-two million euros in sales. Seventy-one thousand four hundred fifteen workers. One thousand three hundred forty-six net jobs created. Two hundred eighteen million invested in research and development. Forty-nine million allocated to social projects. The headlines that followed Mondragon's annual report point to an apparent conclusion: industrial cooperativism is not only possible but manages to thrive even in turbulent years. The international cooperative movement and the UN, which declared 2025 the International Year of Cooperatives, read these figures as proof that there exists a middle path between shareholder capitalism and state ownership.

It's a compelling story. It deserves careful examination before it gets questioned.

Mondragon emerged in the Basque Country in the 1950s, led by the priest José María Arizmendiarrieta, starting from a small group and a modest stove factory. Today it operates as a federation of more than a hundred cooperatives spanning manufacturing, distribution, banking, and university education. Turning a profit, generating net employment, and allocating tens of millions to social initiatives when overall profit fell by only one point two percent constitutes, objectively, an achievement. Researchers who have spent years analyzing alternative business models consider Mondragon one of the most durable and ambitious industrial cooperative experiments in the modern world. On that, they're right.

However, those same headlines skip over a central question. Of those seventy-one thousand four hundred fifteen reported workers, how many are actually owners with full rights?

This is not a minor distinction. A cooperative, by its foundational definition, is an organization where workers own the entity and democratically decide its direction. If that condition holds for only part of the workforce, what emerges is something different: perhaps valuable and admirable, but different.

Mondragon's public reports don't precisely break down how many workers are voting members with access to surplus and individual capital accounts, versus those hired under conventional arrangements at international subsidiaries. What researchers like George Cheney and analysts within the movement itself have documented is that expansion outside the Basque Country was carried out mainly through non-cooperative subsidiaries. Plants in Asia, Latin America, and other regions operate with standard labor structures. Their employees don't take part in assemblies, don't accumulate their own capital, nor do they share in surplus the way a member in Arrasate does.

This doesn't imply hypocrisy. It reflects the tensions that arise when any organization grows. Beyond certain scale thresholds, original characteristics become difficult to sustain: the structure starts following dynamics native to other models, not because its leaders betray their ideals, but because global competition demands speed and standardization incompatible with broad deliberation. Organizations tend to optimize the metrics that are visible while letting those that don't show up on balance sheets dilute. It happens regularly.

This pattern repeats throughout the history of cooperativism. The Rochdale pioneers built a nineteenth-century consumer network based on one member, one vote, and mutual education. As it expanded, actual member participation declined until it became symbolic. The business survived; democratic governance did not. Something parallel happened with agricultural cooperatives in northern Europe that reached competitive export volumes but ended up concentrating strategic decisions in increasingly autonomous management bodies. Market pressure pushes toward hierarchies and speed that clash with large-scale direct democracy.

What sets Mondragon apart is that its Basque core still maintains functional mechanisms of ownership and democratic control: individual capital accounts, assemblies with the power to remove executives, and formal limits on wage differentials. That doesn't exist in conventional multinationals and deserves genuine recognition. Even so, if those mechanisms cover only a fraction of the total workforce, then Mondragon is not a cooperative of seventy-one thousand four hundred fifteen people. It is a cooperative of X people plus Y conventional employees distributed globally. Presenting the aggregate figures without that clarification turns the data into an ideological argument, not a precise diagnosis.

The UN and the global cooperative movement need visible success stories. That's understandable. But that same incentive can discourage the uncomfortable questions that would allow the model to be adjusted rather than fossilized within its own narrative. Demanding the transparency the cooperative ideal claims to stand for isn't an attack on it: it's taking it seriously.

Annual reports should clearly separate how many workers are full-rights members, how many participate in a limited way, and how many operate under standard conditions abroad. That real percentage of effective governance matters more than sales, R&D investment, or jobs created — metrics that any large conventional company can also display.

The Eroski case illustrates the point. The retail chain went through a financial crisis in the 2010s that forced restructuring, with layoffs and loss of accumulated capital for affected members. The final outcome resembled that of any corporation, even if the internal process had different nuances. Sometimes the more elaborate story doesn't change the ending. It just makes it harder to see.

What real proportion of a structure at this scale can preserve its democratic foundations without them diluting into the merely nominal?

Sources:

1. Mondragon Corporation. Annual Report 2024. Arrasate-Mondragón, 2025. [mondragon-corporation.com]

2. Cheney, George. Values at Work: Employee Participation Meets Market Pressure at Mondragon. Cornell University Press, 1999.

3. Birchall, Johnston. The International Co-operative Movement. Manchester University Press, 1997.

4. Paranque, Bernard, and Willmott, Hugh. "Cooperatives—Saviours or Gravediggers of Capitalism?" Organization, vol. 21, no. 5, 2014, pp. 604–625.