Why are Catholics so good at creating co-ops?

After a talk I gave in Melbourne, Australia, this past June, a friend introduced me to an elderly man who had been in the audience. The man had something he wanted to say. He came close to me and began to speak, from which I recollect only one crucial word: formation.

Formation—yes. I could feel my neurons forming new pathways around that bit of Catholic jargon, and suddenly a bunch of puzzling stuff made sense.

I was in Australia at the invitation of the Archdiocese of Melbourne, but this event was a thoroughly secular one, on the subject of cooperative enterprise—businesses owned and governed by the people who use them. The gentleman was Race Mathews. And despite his reference to a theological concept, he confessed to being neither a Catholic nor a believer. For most of his career, before retiring to study the prehistory of the modern cooperative tradition, he was a politician in Australia’s Labor Party*. The importance of formation was his latest discovery.

Formation is a word Catholics use a lot, in a rather distinct way, rarely pausing to define it. In the life of faith, it is our ongoing conversion to Christianity. It is how we allow prayer, experience and study to mature us. Our formation makes us the kinds of Christians we are, and it comes in many different forms, including quite secular ones. It may be happening when we do not even know it. Mr. Mathews helped me make the simple connection: Business, too, is a kind of formation, for better or worse.

Over the years Mr. Mathews has made a series of visits to the Mondragon Corporation, a network of worker co-ops in Spain’s Basque country that currently employs over 70,000 worker-owners. It emerged under the shadow of Franco in the 1950s with the guidance of a local priest, the Rev. José María Arizmendiarrieta, or Arizmendi for short. This is a system of factories, schools, banks, retailers and more, all owned and governed by people who work in them. It is also a beacon of possibility, the world over, that democratic business can work at large scale, though it has yet to be outdone or replicated.

Why is it that at Mondragon and elsewhere, Catholics have been so good at creating co-ops? Mr. Mathews’s book Jobs of Our Own traces Father Arizmendi’s precursors from Pope Leo XIII’s 1891 encyclical “Rerum Novarum,” to the ideas of Hilaire Belloc and the Chesterton brothers in England, to the Antigonish movement in Nova Scotia. But only recently, while studying the Catholic Action and Young Christian Workers movements that influenced Father Arizmendi, did Mr. Mathews zero in on the concept of formation.

Mondragon is a monument not only to a particular way of doing business but to a vision for forming the souls who participate in it. “Hand in hand, of one mind, renewed, united in work, through work, in our small land we shall create a more human environment for everyone,” Father Arizmendi wrote just days before his death in 1976. “Everyone shall simply work for the benefit of everyone else, and we shall have to behave differently in the way we work.”

Before Mondragon’s first cooperative factory opened, Father Arizmendi started a school where he and his students developed their plans together over the course of a decade. They let diverse influences form them, religious and otherwise. Following the teachings of Cardinal Joseph Cardijn, the founder of the Young Christian Workers—teachings that also influenced Jorge Bergoglio—they practiced the method of “see, judge, act.” They tested their ideas relentlessly and creatively through practice, and then adjusted the ideas accordingly.

Bergoglio, as Pope Francis, once recalled that while a teenager, he heard his father, an accountant, talk about the kind of patient formation that cooperative business requires. “It goes forward slowly,” his father said, “but it is sure.” Francis has recommended co-ops as an antidote to ills ranging from polluting power plants to a technology-obsessed culture.

How is your economic life forming you? For many of us, business is a matter of duty and necessity, a thing we do in order to do other things. But it still shapes us. The rules we take for granted at work inculcate habits of mind and heart that surely also guide our reach toward God. I worry for myself about what catechism the economy of competition and accumulation is teaching me. Yet by worrying about questions like this, people of faith have come to believe, and prove, that another way is possible.

Correction, Aug. 8: The spelling of Australia’s Labor Party has been corrected.

This article appears in August 15-22 2016.