The solidarity ethos has its allure given mounting research by the IMF and other bodies that the extreme gap between rich and poor was a key cause of the global asset bubble and financial crisis, as well as being highly corrosive for democracies. The GINI index of income inequality has reached levels not seen since the 1920s across the West.
Mondragon weathered the 2009 slump in machine tools, car components, and its other cyclical niches by putting 20pc of full staff leave for a year at 80pc pay, with names chosen by lottery. Some of its 256 co-ops froze pay, others took a 10pc cut.
The membership rule is that all new workers must put up €13,400 in share capital, which they can borrow from the group’s Caja Laboral, one of the few Spanish savings banks in robust health.
Profits are largely reinvested or sunk into research centres, though a chunk is spent on social projects. Worker dividends are paid into retirement accounts. The whole system is run by an elected Congress, known as "the supreme expression of sovereignty".
Such an egalitarian venture creates all kinds of problems. "We can’t offshore, so we have to keep climbing the technology ladder and improve core engineering here," said Mr Ugarte.
The group is stepping up investment in thermal insulation, and water purification, and grinding machines for the aerospace industry. Its machine tool arm Danobat has bought Newall in Peterborough.
If a co-op keeps losing money, it is given three years to come up a credible plan, but ultimately workers have to be retrained and found other work. Paid-up 'Co-operativitistas' cannot easily be fired. The wider headcount fell by 7,000 during the crisis, but they were outsiders in building.
So far none of Mondragon’s plants in China, India, Latin America or the rest of Europe have opted for co-op status. "We encourage them to be owners of their future, but they are afraid of the obligations that go with it," said Mr Ugarte.
Mondragon pays global staff the market wage, which creates an odd disparity with the Spanish mother company. Mr Ugarte said the net effect of overseas expansion has boosted jobs at home, still 84pc of the total.
America’s United Steelworkers has sought help from Mondragon in creating its co-ops, hoping to emancipate itself from a Wall Street that "hollows out companies by draining their cash and shuttering plants". Yet it is unclear whether the model can easily be exported.
Mondragon’s strength comes from the powerful clan ethos of the Basques, the oldest nation in Europe with a tightknit global diaspora (Nevada, Idaho, Argentina, Brazil) and a unique pre-historical language. Linguists doubt claims that Basque is linked to old Etruscan or Berber dialects.
Recent studies of DNA suggest that the Basque have a very close genetic profile to the Irish and Welsh, who also pre-dated the Celtic agrarian settlements of the 6th Century BC.
There is a dark side to Mondragon. The town is a cauldron of ETA terrorist sympathies. A socialist politician was gunned down in broad daylight two years ago, and the mayor has still declined to condemn the act. The Corporacion adamantly denies any links to ETA, insisting that it is "radically opposed to intolerance and any type of violence". There is now hope of a lasting peace settlement in any case.
"The Myth of Mondragon", based on fieldwork by anthropologist Sharryn Kasmir, argues that political tourists from all over the world have been willing to overlook the subtle forms of peer pressure and worker stress in the valley.
Yet the movement is still flourishing half a century after critics said it would never survive. It generates 3pc of Spain's industrial output of the Basque region and generates annual sales of €24bn. Almost 60pc of its heavy production is exported.
As chairman Jose Maria Aldecoa puts it, with a Churchillian twist: "the co-operative model is absolutely flawed, but it has shown itself the least flawed in a crisis of values and models".
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