The Ten Basic Principles of Mondragon

Details

  • Author: Mondragon Cooperative Corporation (originated by José María Arizmendiarrieta)
  • Category: Constitutions
  • Published: 1987
  • Source: Mondragon Corporation
  • Source URL: https://www.mondragon-corporation.com/en/co-operative-experience/our-principles/
  • Access: public

Description

The ten principles guiding the Mondragon cooperative federation in the Basque Country, Spain, the largest worker cooperative system in the world, with around 70,000 worker-owners across more than 80 cooperatives.

Annotation

The ten principles are the constitutional core of Mondragon's federated structure. They are short, declarative, and operational. The pay-solidarity principle (a wage ratio capped at typically 5:1 between highest and lowest paid) is one of the most cited cooperative governance rules in the world and worth reading in full.

Full text

Mondragon was founded in 1956 by five engineers trained by José María Arizmendiarrieta. From a single appliance cooperative it has grown into a federation of more than 80 cooperatives with around 70,000 worker-owners.

The Ten Basic Principles, codified in 1987:

1. **Open Admission.** No discrimination in admitting new worker-owners.
2. **Democratic Organisation.** One worker, one vote.
3. **Sovereignty of Labour.** Workers control and benefit from profits.
4. **Instrumental and Subordinate Nature of Capital.** Workers own the enterprise; capital is rented, not controlling.
5. **Participatory Management.** Progressive development of member participation in business management.
6. **Payment Solidarity.** Wage ratios capped at 3:1 to 9:1, averaging 5:1.
7. **Inter-cooperation.** Cooperatives cooperate with each other and with the wider cooperative movement.
8. **Social Transformation.** 10% of net profit to charitable organizations; reinvestment in community job-creation.
9. **Universality.** Solidarity with all working for economic democracy.
10. **Education.** Continuous training as the pre-condition for everything else.

Arizmendiarrieta's phrase: knowledge must be socialized so that power can be democratized. The tenth principle is structurally first.

For a researcher, Mondragon is a case where the constitutional text is genuinely operational. The 5:1 pay ratio is enforced. The vote-by-worker rule is enforced. The 10% donation is enforced. The principles are not aspirational; they are the day-to-day rules of the corporation.

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## Living examples and entry points for community builders

Mondragon is currently operating, employing around 70,000 worker-owners across the Basque Country with revenues exceeding 11 billion euros annually. The principles documented here govern a real corporation, in real time, with enforceable rules.

The most accessible living expression outside the Basque Country is the Arizmendi Association of Cooperatives in the San Francisco Bay Area. Seven independent worker-owned bakeries operate under a federated structure inspired directly by Mondragon. Each is governed by its worker-owners but shares a brand, a training model, and an inter-cooperation philosophy with the others. Walking into an Arizmendi bakery is the closest most people in the United States will get to seeing Principle 7 (inter-cooperation) in practice.

Evergreen Cooperatives in Cleveland, Ohio was explicitly designed with Mondragon's principles as a reference. Three worker cooperatives in laundry, solar installation, and greenhouse food production serve anchor institutions including the Cleveland Clinic. The Cleveland Model was built to show the Mondragon principles could work in a United States urban context without a pre-existing cooperative movement.

Cooperation Jackson in Jackson, Mississippi draws explicitly on both Mondragon and ICA principles, adapted to the racial and economic conditions of the Mississippi Delta. Their Jackson-Kush Plan puts cooperative principles inside a broader political project of Black economic self-determination.

**Entry points for community builders**

Read the ten principles on Mondragon's own website before reading anything else. They are short, operational, and worth sitting with as a set before the secondary literature. Pay particular attention to Principle 10 (Education) and Principle 4 (Capital is subordinate) as a pair: together they describe a constitutional inversion of the standard corporate priority order.

The pay ratio is the most immediately applicable principle for any group building a worker-owned or income-sharing structure. Whatever number your group can sustain, naming it explicitly in your founding documents changes accountability. Deciding your ratio is a values conversation worth having early.

If you are in the United States, visit an Arizmendi bakery and talk to a worker-owner. The bakery workers are generally open to conversations about the cooperative model.

One caution: Mondragon has made significant compromises. Non-worker-owned subsidiaries have been created in lower-wage countries, and some larger industrial cooperatives have moved toward standard management hierarchies in practice. Reading Sharryn Kasmir's The Myth of Mondragon (1996) alongside the principles is an honest way to understand the gap between the constitutional text and the lived reality at scale.