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The Spanish Town Doing Capitalism Better
Key Excerpts from Article on Website of Reasons to be Cheerful
Posted: August 31st, 2026
https://reasonstobecheerful.world/mondragon-cooperatives-spa...
There are all kinds of enormous, impressive and, frankly, noisy machines at work across the 20,000 square meters of industrial warehouses at the headquarters of Fagor Arrasate, a manufacturing company in Spain’s northern Basque Country. Fagor Arrasate belongs to the larger Mondragón Corporation, which in 2025 had a revenue of €11.3 billion ($12.8 billion U.S.) and aggregate profits of more than €600 million. Founded by five coworkers in 1956 as a small stove factory, Mondragón Corporation is today the largest federation of worker-owned cooperatives in the world. It employs more than 70,000 workers across 92 cooperatives ... making it the largest employer in the Basque Country and the fifth-largest private employer in Spain. Its grocery-store chain, Eroski, has hundreds of outlets across the nation; the Mondragón University offers college degrees; it includes Spain’s ... largest producer of bicycles; and according to Mondragón’s estimates, more than a third of Europe’s solar panels use its tech and 60 percent of the world’s trains contain its parts. The group, despite being owned by its workers ... is capitalist. Yet Mondragón’s model has social good and humanism — rather than profit-maximizing — at its heart. The base salary for a Mondragón worker is on average 40 percent higher than Spain’s minimum wage. On top of that, company profits are shared. From annual earnings, 60 percent is reinvested in the business, 30 percent goes to employees (as capital that can only be claimed once they retire or leave the group), and 10 percent is invested in the local community. In 2025, Mondragón allocated more than €49 million for projects spanning social inclusion, poverty reduction, education, culture, sports, preservation of the Basque language and environmental sustainability. While cooperative governance may slow business decision-making, studies have found that cooperatives can make as much profit as companies under conventional systems.
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