Geography Reference
In-Depth Information
follow up the thinking of Stöhr & Taylor (1981), there are further examples, but
the message is still not clear. In Africa, from which the later examples are taken,
the initiative is sometimes from outside, from central government. This is the
case for northwest Ghana, where a credit union established for helping the most
impoverished members of society was effectively taken over by the more
powerful local elite, and its purpose subverted. This case contrasts with another
cited example in southeast Ghana, where a community combined in a number of
ways to combat the multiple crises of drought, bush-fires, and numerous refugees
from civil war in Nigeria. What Taylor & Mackenzie (1992) demonstrated was
the continuing fragility and variability in success of grassroots schemes.
An example of greater scope is that of the Spanish Basque region (Campbell
et al. 1977), where an old industrial region around the town of Mondragon built
up its industrial might in an innovative cooperation movement. It had long had
engineering industries, notably foundries and manufactures of small metal
components, existing in the hinterland to Bilbao as main industrial centre. But
these had stagnated in the twentieth century and had been hit badly by the Civil
War. In the 1940s, a young Jesuit priest, Father José Maria Arizmendi, came to
Mondragon, saw the need for training and support to industry, and set up a
technical school in the town. The first graduates of this school set up their own
industries, but had also imbibed the idea of cooperation, needed to gain market
strength in an industrial sector where new products made of many components,
economies of scale, and marketing would be needed.
From 1956 producer cooperatives began to be set up in the Basque region,
combining the forces of the various small firms, most of which employed less
than 50 workers, and thus giving them greater security of employment. On top of
the producer cooperatives, a second-level cooperative was set up which afforded
technical and financial advice, and concentrated the savings of the worker
families. Another was then set up to provide insurance and pension services and
other welfare matters. The total number of firms operating under producer
cooperatives in the region is now over 150.
This structure has proved remarkably successful, creating new opportunities as
new products have been identified, and having the flexibility through its small
firms to allow adaptation to new requirements. Democracy at the firm level, with
worker directors in rotation and each worker being required to purchase shares in
the cooperative, and thus having a financial investment in the company, has
ensured good industrial relations, in contrast to much of Spanish industry.
The example is inserted here to show the very special conditions under which
this development took place. Commentators have often noted that the failure of
Mondragon-type development to spread to other areas reflects special conditions
—the special community culture of the Basques, and the existence of many
small firms engaged in one sector in the area, each able to benefit from the
presence of others, enjoying economies of scale through combination, and
external economies in technical and financial advice as well as in marketing the
products. These are, economically, approximately the conditions for flexible
