Making Mondragon

Twenty-three workers in 1956; 70,000+ workers generating €11.2 billion today—Mondragon is the most impressive refutation of the belief that worker cooperatives have little capacity for economic growth. This Cornell study documents how one-worker-one-vote governance scaled to industrial complexity, paralleling quorum sensing in bacterial colonies where cells coordinate collective action only after reaching a threshold population. The key insight: Mondragon invented cooperation-enforcement mechanisms that prevented free-riding—including a 9:1 CEO-to-worker pay ratio (versus 600:1 in typical US corporations) and mandatory profit reinvestment. Only 3 of 100+ cooperatives failed between 1956-1986, a survival rate that defies the conventional wisdom that democratic governance slows adaptation. Yet the Whytes also document the tensions: as Mondragon integrated with European markets, democratic participation declined and temporary workers without voting rights rose to 30% of the workforce. Coalition-formation requires trade-offs; even bacterial quorum sensing can be exploited by cheaters.