----- Original Message ----- From: "Hughes, James J." <jhughes at changesurfer.com> To: <DemocraticLeft at yahoogroups.com> Sent: Tuesday, October 11, 2005 11:24 AM Subject: [DemocraticLeft] The Argentine coop-by-occupation movement
http://mondediplo.com/2005/10/13survey
'Occupy, resist, produce' Argentina: the coops' dividend
Argentina's economic crisis in 2001 sent many businesses to the wall. But many who lost their jobs have occupied their workplaces and successfully resumed production without their former bosses. Now these new cooperatives are calling upon the state for reforms and policies to support them.
By Cécile Raimbeau
ON 20 March 2003 30 workers who had lost their jobs at the Bauen Hotel broke into a car park, forced a door and made their way into their former workplace. The five-star hotel, a 20-story building in the centre of Buenos Aires built for the 1978 World Cup, had been closed for 15 months. As well as striking a blow against private property rights, the occupation was an attack on a symbol of unbridled capitalism favoured by the dictatorship in power at the time the hotel went up.
After working on reception for 23 years, Marcelo, 56, spent 2002 searching desperately for work. Gladys, a former chambermaid, made $5 a night booking illegal taxis. Rodolfo, previously a caretaker, became one of the tens of thousands of newly unemployed sifting through the dustbins of Buenos Aires for recyclable packaging.
The audacity of this small group was not unusual in a country where unemployment had reached 20% and 45% of the population were living below the poverty line. Such acts of "recovery" are regarded as re-appropriations, for the public good, of places abandoned by "thieves" from the private sector. A mass revolt in December 2001 helped unite previously isolated events into a coherent movement: from 44, the total of businesses taken over has since risen to 170, employing more than 10,000 people (1).
Ex-workers began taking over collapsed businesses in the mid 1990s. President Carlos Menem's enthusiastic application of neoliberal principles was then destroying thousands of jobs every year (2). Massive privatisations were throwing public employees on to the streets, and the removal of import restrictions and export subsidies were generating a flood of foreign goods with which Argentina's small businesses could not compete.
What makes Bauen unusual is that it is in the service sector. Most of the salvaged businesses are small and medium-sized industries, mainly in metallurgy, engineering, printing and food. Whether bankrupt or in liquidation, all have collapsed beneath the burden of their debts. Their creditors include the tax authorities, the banks, their suppliers - and also their staff, to whom they owe wages and compensation.
Workers attempting to salvage a business prefer to receive compensation in the form of machine tools than money. But although Argentine legislation on business failures gives them priority over other creditors, it does not clearly encourage reactivation rather than liquidation. And one particular article enables investors to buy up a business without redress for former employees who are owed money. The International Monetary Fund blackmailed the government into reintroducing this provision, known as "cramdown", which has often encouraged the appearance of phantom buyers, acting as a cover for bosses greedy to repurchase their own companies for a song.
Bauen is symbolic of this process: the public loan that subsidised the hotel's construction, at the height of the dictatorship, has never been repaid. The building was sold in 1997 for $12m to a Chilean businessman who repaid only $4m before shutting up shop at the end of 2001.
Before they occupied "their" hotel, the sacked Bauen workers set up a cooperative, supported by the National Movement of Revived Businesses (MNER). This federation came to prominence in the early months of 2002 under the leadership of two former sympathisers of the Montoneros, the Peronist guerrillas of the 1970s. Eduardo Murua and José Abelli borrowed a formula from Brazil's Landless Workers Movement to summarise their three-point strategy: "Occupy, resist, produce!"
In 2002 Argentine law was reformed to make it possible for cooperatives to rescue failed businesses. But any magistrate trying to encourage a cooperative must either negotiate a lease with the owner or wait for the authorities to make an expropriation order. MNER representatives can't help wondering why, since the state is always making expropriations to build roads, it can't do the same for the public good and the right to work.
Many rescued businesses are operating without legal authorisation and 31% have negotiated a lease. That leaves 29% where there has been an expropriation which, as a rule, authorises the workers to use the machines and occupy the building for two years. After that, if the owners and their creditors have not received state compensation they can demand the sale of the premises and plant.
In November 2004 revived businesses won a more encouraging victory when the city of Buenos Aires expropriated 12 companies outright and granted the cooperatives concerned three years' debt relief and 20 years to buy the buildings and plant on credit. But this sort of case-by-case support isn't enough: what workers want is definitive legislation on expropriation covering all salvaged businesses.
The mass media have responded to pressure from big business and condemned such "attacks on private property" as part of a Bolshevik campaign. A team led by the sociologist Gabriel Fajn sees it differently: "There was a time when it was ideology, rather than the need to defend the right to work, that inspired the takeover of businesses. Now there are all sorts of people involved, most of whom have no experience of trades unionism" (3). Ideology would seem to emerge as a consequence of the rescue process, creating "new political subjects" in the process.
Unemployed workers who choose to take this path inevitably come up against employers, the legal system and the police. When that happens, they need all the support and loyalty they can get from their families and colleagues. The shared experience of revolt creates new forms of cooperation and friendship, and also leads to the emergence of a process of democratic decision-making: the assembly, where every worker has a voice. A sense of freedom
Marcelo, the president of the Bauen cooperative, says: "The sense of freedom we feel is incredible. But we don't all have the same attitude. Some see this as a chance to do what they want, others see it as a chance to do nothing. That's the hardest part of worker management: you have to struggle against individualism and inertia. We've got to teach ourselves to be more than just workers, without turning into bosses."
In this new situation some ex-workers drop out - mainly managers, who have anyway participated in only 20% of salvaged businesses. Free from bosses and managers, and driven more by pragmatism than ideology, the assemblies introduce equal pay and reassign responsibilities according to skill and experience. They encourage versatility and elect non-permanent coordinators for different sectors. They transfer workers from production to administration, train them and create mechanisms to guarantee transparent accounting.
After four months of free lessons in marketing from a teacher, Maria - a former cleaner - now handles sales. Osvaldo has swapped his old porter's cap for a chef's hat and is making a living from his passion for cooking. Every evening on the third floor, hesitant voices chorus: "May I help you, sir?" as language teachers give the staff lessons in exchange for the use of rooms for their paying classes.
Two and a half years into the occupation, the Bauen cooperative has restored the hotel's fabric and rooms. Its only capital has been the solidarity and ingenuity of its members. It has gradually built up a clientele attracted by its moderate rates and easy terms. The recruitment of 60 new members has brought its numbers to 110, all of whom earn more than a primary teacher. When things are going well, the staff share 40% of the profits; the remainder is reinvested.
Currently 79% of occupied businesses are productive. But although they have benefited from the economic recovery and the devaluation of the peso, they have all had to contend with legal complexities, a lack of capital, subsidies and a reliable customer base, and with suppliers who are often suspicious of worker management. Most of them produce to order: the workers sell an industrial service to clients who provide the raw materials and pay upon delivery of the finished product. Since this means that the cooperatives earn less and become dependent upon their client-suppliers, it can only be a transitional stage, until the workers can amass sufficient capital to buy their own raw materials. They are still producing at less than half their previous capacity.
Cooperatives benefit mutually from becoming each other's clients and suppliers and allowing credit. Most of what they produce goes to other industries, rather than direct to the consumer. This is a drawback: it is difficult to see how direct sales can be reconciled with a cooperative market. Andres Ruggeri, an academic in a section of Buenos Aires university's philosophy department that supports worker management, sees this as a real handicap: "Say a revived business is manufacturing parts for cars: it can only sell them to car manufacturers. But the multinationals don't want to deal with cooperatives, and certainly not with salvaged businesses. The workers can get round this by selling to a go-between who sells on to the manufacturers, but they lose a percentage on these transactions."
During 2002 there was a lively debate on whether revived businesses should get involved in capitalist markets. A Trotskyist minority called for nationalisation under worker control. It took over four businesses, including Brukman, a garment factory in Buenos Aires, and Zenon, a tile manufacturer in Neuquén. The workers involved saw the rescue as a first step towards a socialist system in which the state would control economic planning. The hard-left parties associated with them did not believe that cooperatives could survive in a capitalist market.
Beyond the ideological debate, this stance had one significant consequence: the indefinite continuation of conflict. This is certainly the lesson to be drawn from what happened at Brukman which, after police expelled the workers, became a cooperative and, ironically, came under the influence of the more reformist National Movement of Factories Revived by the Workers (MNFRT) founded by Luis Caro, a lawyer with links to business, the Catholic Church and the Peronist right. As Andres Ruggeri points out sadly: "In the name of business efficiency he purged the cooperatives, drawing them away from MNER influence and from any alternative cultural model."
Although workers at the Zanon tile factory have set up a legal framework for their cooperative, they continue to call for nationalisation. The unity that they have showed has made their revived business a national symbol of resistance. The strong links they had forged with various social movements have allowed them to withstand seven attempts to expel them. They have recruited 210 workers and illegally manufacture more than 300,000 square metres of tiles every month. Their members earn as much as the police and have enough left over to make regular donations to community causes.
The ability to create jobs in a business that has supposedly collapsed may be one in the eye for the bosses; but there is no guaranteed future for all these revived businesses. Each depends upon its own viability and global economic conditions, and also to a large extent upon the financial, technical and legal support of the Argentine state. The MNER argues that, with this support, the movement could restore 150,000 jobs and members of this small movement constantly put themselves forward as possible partners for the state in the struggle against unemployment. But they have never been able to secure either the hoped-for interest-free loans or legislative reforms. Big business has such a hold over the country's political and legal authorities that MPs and judges would rather turn their back on rebel workers than help them - despite the popularity of these salvaged businesses.