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This is the text (less the three final paragraphs) of a talk given by Jack Shallcrass of Wellington on the weekly Radio New Zealand feature "Sunday Supplement" on 16 August 1992.

In the Basque country of Northern Spain there is a highly successful industrial system known as Mondragon. It has been going for about 50 years with increasing strength. Even though models like this don't necessarily transfer to other places and conditions, we can learn a great deal from them.

The people concerned began Mondragon with no money, but there was a vision, there was conviction, and there was human capital.

They began in an old garage, and within a generation they had nearly 100 enterprises producing a complete range of manufacturing goods. They had also set up and completely financed their own banking system, research institutions, polytechnic, university and social security and health systems. The people themselves own and run these systems - we are selling ours.

Each productive enterprise works independently. There is no external share-holding because all shares are held by the employees. All senior positions in the factories are by election and they carry no privileges.

On retirement, workers' shares become their pensions and the replacement employees begin to buy into the business by contributing from wages. Every enterprise shares the cost of the health, education and research systems which serve the general good.

It is a self-directed, self-sustaining system that draws its strength from the skill, imagination and energy of its members.

Mondragon seems to have combined some of the best of capitalism and the best of socialism in ways that avoid the worst of each. At its core is the strength and flexibility that came from engaging people's intelligent commitment through shared ownership and control.

In New Zealand we have recently followed a different path. The co-operative spirit of the past has given way to a fiercely competitive ethic, in which the market rules within and between organisations. Used indiscriminately it has not only caused a good deal of social misery and disillusion, but also threatens divisiveness in institutions like schools and hospitals which require collegial, co-operative behaviour. We could find guidelines in the principles which animate Mondragon that would help us strike new and more appropriate balances between co-operative and competitive models.

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