Worker-Recovered Enterprises as Workers' Cooperatives: The Conjunctures, Challenges, and Innovations of Self-Management in Argentina more

CHAPTER SIX WORKER-RECOVERED ENTERPRISES AS WORKERS’ CO-OPERATIVES: THE CONJUNCTURES, CHALLENGES, AND INNOVATIONS OF SELF-MANAGEMENT IN ARGENTINA AND LATIN AMERICA MARCELO VIETA AND ANDRÉS RUGGERI Introduction Since the late 1990s, around 185 mostly small- and medium-sized companies in Argentina that had declared or were near bankruptcy or were otherwise abandoned by their owners and bosses have been taken over and self-managed by former employees. In almost all cases, and usually after many months of struggle, these “worker-recovered” firms formally organize under the legal framework of a workers’ co-operative. Especially visible in the two years immediately after the country’s financial collapse in late 2001, and responding directly to Argentina’s exhausted neo-liberal political-economic system, the micro-economic and social transformations being shaped by empresas recuperadas por sus trabajadores (ERTs, or worker-recovered enterprises) are confronting the inability of Argentina’s traditional institutions to contain historically high levels of underemployment, unemployment, and poverty that have gripped the country in recent years. This chapter examines this phenomenon of ERTs in Latin American countries, with a special emphasis on the case of Argentina. Based on our ongoing quantitative and qualitative political economic and ethnographic work over the past five years with over 70 ERTs across all economic sectors and regions, we highlight two particular characteristics that are often overlooked or downplayed by studies that examine worker-recovered enterprises in Argentina.1 First, workers’ initial actions involving the seizure of control of their deteriorating or failed companies from former owners, their occupation of them for weeks or months, and eventually their putting them into operation once again under autogestión (self-management), arise out of fear and anger rather than a preconceived predilection for workers’ control or working-class revolt. That is, WORKER-RECOVERED ENTERPRISES most ERTs originate as direct responses to their worker-protagonists’ deep worries about becoming structurally unemployed (Olmedo and Murray 2002; Ruggeri 2006). ERT protagonists’ original motivations for self-management were—especially in the “first era” of ERTs between 1997-2003—defensive reactions against a callous and collapsing neo-liberal system that was embodied in the nefarious actions of business owners, bosses, and managers (Fajn 2003; Palomino 2003). Second, most ERTs reorganize themselves within the legal rubric of a workers’ co-operative only after workers have gained control of the plant—and usually after many weeks if not months of struggle—not because the recovered firm’s workers already had a vision of becoming co-operativists, nor because they possessed presupposed political ambitions, but rather as a legal and pragmatically defensive strategy that emerges during or after the struggle to occupy or seize their workplaces. For reasons that we will elaborate upon in the following pages, this organizational move has become an especially important defensive manoeuvre for ERT workers in light of the very real threat of repression on the part of the state and Argentina’s capitalist establishment. It is also a manoeuvre that is usually adopted for structuring horizontally democratic models of decision-making; adopting egalitarian remuneration schemes; and for securing market share, loans, and other forms of financing that are otherwise difficult to obtain. To begin to understand these two characteristics, we first briefly look to the historical and political conjunctures from which ERTs emerge and in which they find themselves. We then explore some of the distinguishing features of Argentina’s ERTs as workers’ co-operatives. To illustrate how these features play out in practice, we map out some of the innovations impelled by ERT workers’ desire to self-manage that they adopt in order to defend their jobs and workspaces, as well as several of the challenges faced by these experiments in self-management. Lastly, we examine some of the connections with the wider ERT phenomenon in South America. As we emphasize throughout, ERT’s innovations and challenges shape their very organizational structures and cooperative practices and in some ways distinguish them from other workers’ cooperatives in other conjunctures. The Historical and Political Conjunctures of ERTs in Argentina Argentine labour expert Hectór Palomino writes that the political and economic impacts of the ERT phenomenon are more “related to its symbolic dimension” than to the strength of its size (2003: 72) since, to date, the phenomenon involves about only 185 mostly small- and medium-sized 179 CHAPTER SIX enterprises estimated to include between 9,000 and 10,000 workers (Ruggeri, Martinez, and Trinchero 2005). While currently making up the largest conglomeration of ERTs in Latin America (Trigona 2006b), the phenomenon constitutes less than one per cent of Argentina’s 14,393,000 officially active participants in its urban-based economy (Ministerio de Trabajo 2004). As Palomino points out, however, while it is true that this reflects only a fraction of the economic output of the country, ERTs have nevertheless inspired “new expectations for social change” (2003: 72) since they show an innovative and viable alternative to chronic unemployment and under-employment (see also Scarano and Sánchez 2005). But the road to self-management has been, and in many ways continues to be, economically and politically rocky for these fledgling workers’ co-operatives despite the relative recomposition of the Argentine economy in recent years under the governments of Presidents Nestor Kirchner (2003-2007) and Cristina Fernández de Kirchner (2007-present). Beginning around 1995, thousands of smaller- and medium-sized businesses in Argentina began to lose market share and amassed unwieldy debt loads due, in part, to the drying up of export markets during Argentina’s economic liberalizations of the 1990s and, in particular, to the after-effects of President Carlos Menem’s (1989-1999) “dollarization” of the peso and the sell-off of over 150 once-nationalized firms. By the mid-1990s it was clear that these neo-liberal policies were affecting the competitive advantage of Argentine products in foreign markets (Damill 2005). Moreover, the large wave of privatization schemes, company downsizings, and the foreign capitalization of large portions of Argentina’s industrial base further compromised the competitiveness of thousands of small- and medium-sized firms, eventually causing a growing number of them to declare bankruptcy at unprecedented rates starting around 1995 (Boron and Thwaites Ray 2004). By 2001, the national month-over-month business bankruptcy rate had reached its highest point in Argentina’s modern history: During the Menem/de la Rua presidencies (1989-2001), bankruptcies soared from an average of 772 per month in 1991 to over 2,600 per month by 2001 (Magnani 2003: 37).2 These macro-economic realities effectively relegated hundreds of thousands of workers to the growing ranks of the unemployed (Damill 2005; Patroni 2004). Some business owners simply abandoned their companies in the wake of the economic difficulties, leaving employees in the lurch. In many cases, workers were let go after weeks or months of not receiving the employer’s portion of social security contributions, bonuses, and ultimately after having not received their paycheques. While some of the ensuing bankruptcies were legitimate, due either to the incompetence of management or the firm’s inability to compete in the new globalized reality, others were illegal; many business owners, encouraged by the frontier-style economic free-for-all that defined Argentina’s economy in the 1990s, were willing to incur questionable debt, to speculate away 180 WORKER-RECOVERED ENTERPRISES their business assets in risky investment schemes, or to turn to embezzlement to stay solvent (Damill 2005). In most cases of bankruptcies or owner-abandonment, workers also became creditors because bonuses, benefits, and paycheques (usually in that order) made up the growing debt load that negligent owners never had the intention of paying back. The major difference between workers’ transformations into creditors and the firm’s other creditors is that workers had little choice in the matter: The implicit ultimatum given to workers by their bosses—an ultimatum that was well understood by workers—was to either work for vastly reduced wages, pay vouchers, without benefits, or without overtime pay, or else to have their positions terminated (Magnani 2003). Thus, the massive erosion of jobs throughout the 1990s, the growing rate of immiseration, a national currency crisis, eroding export and national markets, a national debt that cannot be paid off, and exorbitant debt-servicing and structural adjustment demands insisted upon by the IMF and enthusiastically carried out by the Menem and Fernando de la Rúa regimes—all wedded to the political and economic establishments’ greed—serve as the macro-economic backdrop to the growth of the ERT phenomenon in Argentina that began to noticeably surge in the socially and economically volatile years between 2001-2003 (Palomino 2003, 2005). In response, the chronic economic instability and an increasingly precarious job-market forced some workers to look to themselves and their surrounding communities for job security and dignified living conditions. Moreover, the indifference, if not outright hostility, towards the plight of the lessfortunate and the working classes by the country’s elites compelled ERT workers to feel that they had on their side a moral imperative to take over companies and self-manage them. And many Argentines across all social sectors, aware of the chronic rates of unemployment and poverty that plagued the country, supported workers’ tactics of occupation, takeovers, and self-management (Palomino 2003). ERTs as “Recovered” Workers Co-operatives Faced with these stark realities, workers from enterprises that were nearing bankruptcy or were already bankrupt decided to take direct action. While 94 per cent of ERTs eventually self-organize under the legal framework of a workers’ co-operative during or just after the embattled workers choose to regroup and reoccupy the firm (see Figure 6-1; see also Fajn 2003: 105), the path to cooperatively organized self-management in Argentina—especially for those ERTs that originated during the socio-economically tumultuous years that saw the implosion of the zealous neo-liberal model between 1997-2003, the “first era” of ERTs—is usually long, emotionally draining, and sometimes life-threatening. And in most cases, while some of the workers have experience in union 181 CHAPTER SIX organizing and community politics (Rebón 2004), most workers just starting an ERT have no experience in any form of co-operativism (Martí et al. 2004). 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 1% 0% Workers' cooperative State enterprise under worker's control Other type of co-operative Still in negotiation No legal framework as yet 1% 3% 94% 1% Fig. 6-1: Legal Structures of ERTs in Argentina as of 2005 (Ruggeri, Martinez, and Trinchero 2005: 67) Thus, in addition to having to recompose a deteriorated plant, learn new administrative and marketing skills, reorganize purchases and customer orders, and generally run a firm in difficulty, learning how to be co-operators adds to the challenges ERT workers face early on. And while it is true that as of 2002, 41 per cent of Argentina’s universe of co-operatives were identified as workers’ co-ops (see Figure 6-2), only 1.5 per cent of these (or 98 co-ops) were ERTs as of 2002 (Palomino 2003: 75). That is, 98.5 per cent of workers’ co-ops that existed in 2002 did not originate from workers’ taking over failed capitalist firms via tumultuous political struggles, which they then had to run themselves without any previous experience in co-operativism. The great majority of workers’ co-ops in Argentina are, rather, co-operatives that were formed before the era of ERTs (i.e., pre 1997), and therefore their workers did not have to pass through the traumatic circumstances of taking over plants from deteriorating owner-run firms, and are usually staffed by more experienced co-operators working within better economic conditions, with better machinery, and with more stable productive capacities.3 So then, why is it that starting around 1997 roughly 10,000 workers on the brink of structural unemployment who were engaged in risky takeovers of their failing or failed companies, and without any previous experience with working in or organizing a workers’ co-op, then turned to worker co-operativism as a way of 182 WORKER-RECOVERED ENTERPRISES securing their jobs? The most direct answer is to be found in the public debates that were, in the early years of the phenomenon, preoccupying ERT workers, social economy and social movement activists, and the phenomenon’s first political leaders, such as Eduardo Murúa of the Movimiento Nacional de Empresas Recuperadas (MNER, National Movement of Recovered Enterprises), and Luis Caro, who has since split from MNER and formed the Movimiento Nacional de Fábricas Recuperadas por sus Trabajadores (MNFRT, National Movement of Worker-Recovered Factories). One of the major issues on the table at the time was the legal and administrative framework ERTs were to take: nationalization under workers’ control or workers’ co-operativism (Ruggeri, Martinez, and Trinchero 2005: 67; Fajn 2003: 105-106). While nationalization under workers’ control was theoretically and historically plausible, early ERT protagonists eventually scrapped the option when it became clear that the state— municipalities, provinces, and the national government—was refusing to go along with the proposal for the ERT movement (Fajn 2003; Murúa 2006). The only practical and legally recognized alternative for ERTs, it was decided in these debates, was, out of “convenience,” to turn to the co-operativist model, especially in light of a state that could not, because of its strong commitments to capitalist enterprise, set the precedent of nationalizing and co-operativizing onceproprietary firms (Ruggeri, Martinez, and Trinchero 2005: 67; Murúa 2006). Number of Cooperatives Agricultural and livestock Consumer Credit Provisioning Insurance Public services Workers’ co-operatives Housing and construction Others Total Fig. 6-2: Percentage of Coperatives 13.7% 1.5% 1.9% 9.4% 0.3% 11.7% 41.0% 18.5% 2.0% 100.0% 2,190 243 311 1,512 50 1,868 6,549 2,966 319 16,008 Traditional Co-operatives per Sector (as of 2002) (Montes and Ressel 2003: 20) 183 CHAPTER SIX Thus, a point we must underscore here is that the “decision” by an ERT’s workers to eventually organize as a workers’ co-operative is not really a choice between many other options in Argentina, given the state’s lack of will to seek alternative organizational models for ERTs. Each ERT’s workers’ collective comes to the awareness of a co-operativist solution usually after the process of occupying or taking over the firm has begun and often after consulting with social economy protagonists who had been a part of these early debates, including older ERTs, sympathetic lawyers and local politicians, or ERT organizations such as MNER and MNFRT. In other words, rather than turn to cooperativism proactively out of a preconceived or longstanding desire to be cooperativists, ERT protagonists “decide” to turn to co-operativism as part of their defensive strategy once they realize that it is the most practical, already-available, and ultimately one of the only feasible and legally recognized organizational structures in Argentina for re-opening and self-managing a bankrupted firm (Fajn 2003; Martí et al. 2004).4 Eventually, as some workers have told us in interviews and as we examine below, an ERT’s workers collective comes to the realization that becoming a workers’ co-operative actually offers them a much more egalitarian foundation from which to counteract the effects and memories of the exploitative structures and practices of the capitalist firm they had once been a part of (Centro de Documentación 2007). The legal framework of a workers’ co-op thus facilitates the addressing of workers’ communal desires, needs, and issues that arose in the processes of taking over and self-managing the plant, including the democratic forms of one worker, one vote decision-making most ERTs adopt and the equitable redistribution of revenues many of them seek. At the same time, becoming a workers’ co-operative rather than another form of entity (see Figure 6-1) opens the ERT to financial benefits, protects the worker-members from the seizure of their personal property should the co-op fail, and ensures that, due to Argentine co-operative law, the ERT does not have to pay taxes on revenues (Fajn 2003: 105-106). Becoming a co-op is also fairly straightforward in Argentina: co-operators need only wait thirty days for the founding paperwork to be processed, and they can start to commercialize the co-op immediately after filing the papers requesting to become a co-operative (2003: 106). There are also practical benefits to forming a co-operative: the move legitimates the ERT in the minds of potential customers and other firms within their market sector, transforms the ERT into an entity that can more easily receive credit and government subsidies, and makes it infinitely easier for worker-recovered firms to seek legal protection from returning owners. A more nuanced answer to the question of why ERTs become workers’ coops requires us to examine some of their distinguishing features, the history of workers’ struggle in Argentina, recent experiences with workers’ control and workers’ co-operativism in other conjunctures, and current ERT experiences 184 WORKER-RECOVERED ENTERPRISES throughout Latin America. While ERTs possess some peculiar characteristics that distinguish them from workers’ co-ops in other conjunctures, in several ways they too fit the broader definition of a workers’ co-operative found in the literature. For example, ERTs are voluntary associations of workers co-operating in the running of a productive entity wherein each worker has an “equal say” in the running of the co-op (cf. Matthews 1999: 198) via workers’ boards or councils elected from its membership base (cf. Quarter 1992: 27). ERTs also are productive entities whereby “labour hires capital” (cf. Smith, Chivers, and Goodfellow 1988: 25), where “work” is the common contribution of each member (cf. INAES 2007), and where “control is linked to work” (cf. Oakeshott 1990: 27). And an ERT’s revenues and profits are also the common property of the co-op (cf. Ontario Worker Co-op Federation 2007), although, as with the workers’ co-op movement historically and worldwide, how to distribute revenues and surpluses to individuals and reinvest revenues back into the firm remains an open-ended question being worked out within each individual ERT (Ruggeri, Martinez, and Trinchero 2005; cf. Oakeshott 1990). But in some other practical ways ERTs delineate new experiments in worker co-operativism. Their novelty, as we will outline in the next pages, flows from five main characteristics that are rooted in their origins in direct action and their subsequent organizational innovations; these are characteristics that are present in almost all ERTs we have examined. First, all ERTs are distinguished by the fact that they were taken over by embattled former employees in risky occupations or confrontations with owners or with Argentina’s juridical-political establishment out of fear and desperation at having to face the closure of their workplace within the political economy described above. Second, most ERTs endeavour not to replicate the management hierarchy and exploitative practices of the former company, at least in their first months of operation as a self-managed firm. Even though, as we will discuss shortly, subsequent economic hardship within highly competitive markets has compelled some ERTs to return to more hierarchical management practices (Fajn and Rebón 2005), ERT workers tend nevertheless to struggle against this temptation as much as possible. Third, and as such, many ERTs have extremely flat self-management structures and almost all to some degree engage in one worker, one vote direct-democracy adopted not necessarily from the values of co-operativism but, rather, from the anti-capitalist “contagion” of horizontalism that emerged from Argentina’s anti-neo-liberal social movements of the 1990s (Ghibaudi 2004: 6). Fourth, unlike most other cooperative experiences, many ERT workers’ co-ops are distinguished by a predominance of total or near-total across-the-board egalitarian pay schemes despite variations in worker seniority or skill-sets (Bell 2006; Matthews 1999; Ruggeri, Martinez, and Trinchero 2005). Finally, these four factors, as we will discuss throughout the rest of the chapter, emerge out of and because of ERTs’ 185 CHAPTER SIX long road to self-management (Palomino 2003; Ruggeri, Martinez, and Trinchero 2005). Of course, while we do not claim that other workers’ co-operatives in other conjunctures have not encompassed one or more of these distinguishing marks, we do make the argument here that the pervasiveness of these tendencies in most of Argentina’s 185 or so ERTs are, taken together, unique experiences in the history of workers’ co-operatives and workers’ struggles against capital in Argentina and perhaps also beyond its borders (see also Fajn 2003; Martí et al. 2004; Camilletti et al. 2005). It is perhaps no surprise that the early ERT debates that settled on the worker co-operative model emerged in a country with a long past in co-operativism. With its first co-operative society founded in 1875 (Shaffer 1999: 149), Argentine co-operativism is linked to the country’s long history of European economic influence and the waves of immigrants from all corners of Europe who arrived beginning in the last quarter of the nineteenth century with new ideas of how to organize working life (Montes and Ressel 2003; Munck, Falcón, and Galitelli 1987). Indeed, Argentine co-operativism was the “first to begin in a country outside the industrialized countries of Europe, Australia, Canada, Japan, and the United States” (Shaffer 1999: 149). But in the past two decades, Argentina’s cooperative sector has passed through fairly profound economic changes. 1985 1991 2002 Fig. 6-3: Total Co-operatives per year 4,204 8,142 16,008 Total Co-operators per year 10,592,359 9,103,269 6,874,064 Number of Argentine Co-operatives and Co-operators, 19852002 (Montes and Ressel, 2003: 18-19; Shaffer 1999: 149) For example, Argentina’s co-operative sector has witnessed a paradoxical development as an outcome of the country’s sharp turn to neo-liberalism over the past three decades. As Figure 6-3 shows, there was, on the one hand, a marked increase in the number of co-operatives between 1985 and 2002. In the former year, there were a total of 4,204 co-operatives in Argentina, jumping to 8,142 by 1991 and 16,008 by 2002. While this represents almost a fourfold increase in the number of registered co-operatives in Argentina in less than two decades, combined membership in co-operatives, on the other hand, dropped by almost 35 per cent in the same seventeen-year period: In 1985 there were almost 10.6 million co-operative members in the country; in 1991, over 9 million. And by 2002, the number of total co-operators in the country had fallen to just under 6.9 million members (Montes and Ressel 2003: 17-20; Shaffer 1999: 139). Recent 186 WORKER-RECOVERED ENTERPRISES studies hypothesize that this paradoxical inversion of growth in the number of coops with a concomitant decline in membership had to do with the rise of neoliberalist policies, especially the establishment of an unregulated free market system and the entrenchment of a globalized marketplace in Argentina which intensified competition, destroyed established national networks of production and distribution, and subordinated much of the country’s economic development to the whims of international financial capital (Basañes 1999; Camilletti et al. 2005). While this truculent neo-liberal model was strengthening its hold on the Argentine economy throughout the 1990s, labour flexibilization and privatization schemes were also exerting strong blows to co-operatives, especially on those that operated within sectors most affected by Menem’s unregulated free market policies, such as agriculture, transportation, public services, and natural resources (Muñoz 2005; Roggi 2002). As Alberto Muñoz has recently written: “In the privatization process of the mid-1990s, the co-operative movement was not only denied the possibility of participating as an alternative, it was effectively excluded” (2005: 97). Some have theorized that this inverse growth relationship between co-ops and the drop in members might have to do with the rise in what in Argentina are called “false co-operatives”—co-operatives that were formed by the outsourced workers of larger firms and multinationals that were downsizing during the 1990s in order for these corporations to unburden themselves of so-called “high labour costs.” “Assisting” former workers and entire workspaces to become “cooperatives” that downsizing firms were then ostensibly to do business with were, in reality, practices of labour flexibilization and union busting. Fundamentally, the practice served to deaden the inevitable negative reactions by organized labour to what in essence were job cuts. As Mario Mittelman suggests, these firms facilitated the creation of these “false co-operatives” in order to appear to be supporting an “alternative to the loss of jobs” (2005: para. 2); for Mittelman, these practices were counters to a “problem that presents itself periodically” in Argentina—the tension between labour strife and the entrenchment of labour-cost savings by capitalist firms in the midst of downturning economies and unemployment (2005: para. 2).5 Indeed, the rise in worker productive co-operatives in Argentina, from 25 per cent of total co-operatives in 1991 to over 40 per cent by 2002 while the number of co-operators dropped by almost 35 per cent over the same period, can in part be explained by the surge in these “false co-operatives.” Nonetheless, the rise in the number of small- and medium-sized ERTs and co-operativized microenterprises in recent years, plus the state’s subsidization of new co-ops as a method of outsourcing the delivery of public services that it had privatized in the 1990s, have also contributed to the surge in worker productive co-ops throughout the country (Montes and Ressel 2003; Muñoz 2005; Roggi 2002; Una Argentina Solidaria 2005). 187 CHAPTER SIX Antecedents of Argentina’s ERTs Notwithstanding the emergence of ERTs across Latin America in recent years that is estimated to include over 30,000 workers (Trigona 2006: para. 1), worker takeovers of firms and even large portions of economic sectors is not new in the region. Historically in Latin America, however, instances of workspace occupations and attempts at co-management or self-management have occurred in exceptional political contexts and usually with direct leadership from state governments, political parties, or unions. The most salient historical examples include the 125 factories that were nationalized under workers’ control in Salvador Allende’s Chile between 1970-1973; the nationalization and comanagement of mines and rural enterprises during Bolivia’s National Revolutionary Movement of the 1950s and J.J Torres’s left-leaning dictatorship of the early 1970s; the surge in co-operativized “industrial communities” in General Velasco Alvarado’s leftist military regime in Peru during the late 1960s; and various situations of union-instigated workplace takeovers in Argentina during the governments of Presidents Arturo Frondizi (1958-1962), Isabela Perón (1974-1976), and Raúl Alfonsín (1983-1989) (Petras and Veltmeyer 2003; James 2003). Argentina’s earlier experiences with workspace takeovers were not ERTs, however; in those instances occupations were temporary union tactics occurring over short periods of time in the pursuit of labour demands (Palomino 2005). The phenomenon of worker-recovered enterprises as we know it today in Argentina is, rather, a unique process associated with another type of socio-economic situation that emerges out of the hegemonic and regressive neo-liberal politics of the 1990s. The practices of workspace occupations by ERT protagonists are only loosely linked to these earlier cases, drawing some inspiration from them in the collective memory of those ERT workers, historians and theorists, and other social protagonists who lived through them or recollect them. Moreover, the practice of self-management in the Argentine ERT phenomenon is not about the revolutionary takeover of the state by the working class, as was the intention of the Bolsheviks or the case with the role of workers’ co-operatives and industrial collectives in 1936 during the Spanish Civil War (Woodcock 2004); nor about the reinforcing of an already-established or aspiring socialist state under the rubric of co-managed factories, as in the state-owned and worker-run factories in Tito’s Yugoslavia, Allende’s Chile, or the current aspirations of President Hugo Chavez in Venezuela (Petras and Veltmeyer 2003; Trigona 2006b); nor about fighting for sectoral labour victories via temporary workspace takeovers, such as the experiences of earlier Argentine factory occupations, or worker takeover of plants in Canada as with the occupation of the Maple Leaf meat packing plant in 188 WORKER-RECOVERED ENTERPRISES Edmonton, Alberta in 2005 (United Food and Commercial Workers 2005) or by the ALCAN workers in Quebec in early 2004 (La Nuit 2004). Nor do Argentina’s ERTs emerge out of workplace buyouts as with some Employee Share Ownership Plans (ESOPs) in the United States (Bell 2006; Melnyk 1985). Metallurgical Graphics Textiles Foodstuffs Other Services Other Manufacturers Health Housing and Construction Materials Total Fig. 6-4: City of Buenos Aires 6% 25% 13% 13% 19% 12% 13% 0% 100% Greater Buenos Aires (Province) 35% 5% 8% 11% 3% 30% 3% 5% 100% Interior 29% 0% 7% 21% 21% 14% 7% 3% 100% Percentage of ERTs per Major Sector and per Major Region (as of 2005) (Ruggeri, Martinez, and Trinchero 2005: 40) Instead, the origins of Argentina’s ERTs more closely resemble other situations that emerge in other conjunctures during downward economic cycles that see a large and sustained rise in unemployment. In these situations, as Johnston Birchall asserts, “the most direct response” to the effects of economic depression, deregulation, and globalizing markets “was to set up workers’ cooperatives that took over failing firms or parts of firms that were still viable” (2003: 48). Other than the recent Latin American experiences with ERTs, similar surges in workers’ co-ops as solutions to the growing rate of unemployment occurred, for example, with the noticeable expansion in labour co-ops in Finland in the 1990s in the wake of the economic disruption of that country’s white collar and service sectors caused in part by the break-up of the Soviet Union (Birchall 2003), and the exponential growth in the Industrial Common Ownership workers’ co-op movement (ICOM) in the United Kingdom during its deep economic recessions in the late 1970s and early 1980s (Melnyk 1985; Oakeshott 1990). But 189 CHAPTER SIX something different also happened with ERTs in Argentina when compared to these other historical conjunctures of rising unemployment: As indicated in Figures 6-4 and 6-5, ERT worker co-ops are multisectoral and cut across Argentina’s entire territory. In addition, they are not affiliated with state politics, tend not to be union aligned, are not directly associated with an older cooperative sector, and have been, despite the disparate nature of the sectors represented and the lack of strong solidarity networks between ERTs, surprisingly long-lasting. Sector Metallurgical Foodstuffs Textiles Hotels and restaurants (tourism) Paper products Liquid gas Ceramics/brickworks Glass Chemical products Dairy Print-shops/ publishing Fig. 6-5: Percentage 26.4 6.9 4.6 1.1 3.4 1.1 3.4 4.6 1.1 2.3 5.7 Sector Plastics/rubber Services Education Meat packing/ refrigeration Transport Health Water treatment Mining Construction materials Supermarkets Electronics/appliances Percentage 2.3 2.3 2.3 8.0 5.7 4.6 1.1 2.3 1.1 1.1 8.0 Breakdown of ERTs per Sector (as of 2003) (Fajn 2003: 157) Taking over workspaces to gain labour victories has been a practice that in Argentina extends as far back as the anarchist labour movements of the early twentieth century (Munck, Falcón, and Galitelli 1987). Over the past 60 years, in particular, the cultural and political practices of the country’s workers in these militant labour sectors have been most vividly influenced by the nationalist and corporatist ideologies of Peronism and the political tactics that in the past had been taken up by more militant trade unions falling under the pro-Peronist Confederación General del Trabajo (CGT, General Confederation of Labour). This Peronist-tinged imaginary has, not surprisingly, intruded into the ERT phenomenon’s cultural and political milieu via the memory of ERTs’ most militant workers. Politically, many ERT protagonists have come from some of 190 WORKER-RECOVERED ENTERPRISES the most militant industrial sectors of Peronist syndicalism such as the metallurgic, meat packing, and graphics sectors which, not surprisingly, together make up 40.1% of all of Argentina’s ERTs (see Figure 6-5). We have especially witnessed this Peronist imaginary in the narratives related to us by many of the ERT protagonists we interviewed (Centro de Documentación 2007); for them, work is not only a “right,” but also defines much of one’s human dignity. These are views that, within the context of the Argentine working class, Juan Perón himself was the first to persuasively articulate (Munck, Falcón, and Galitelli 1987; Svampa and Pereyra 2004). Paradoxically, the Argentina of the 1990s also witnessed an intensification of the severing of the strong ties that syndicalist Peronism had traditionally enjoyed since the late 1940s with the country’s popular sectors (Svampa and Pereyra 2004). The dismantling of the “just society” that was first consolidated by Perón in the 1940s began most fully with the brutal repressions of the 1976-1983 dictatorship (Patroni 2004). The final vestiges of Perón’s vision of social justice for all Argentines and an economically self-reliant Argentina finally dissolved with Menem’s zealous neo-liberalist plans (Svampa and Pereyra 2004). Menem’s final dissolution of Perón’s nationalized “benevolent state” throughout the 1990s relegated hundreds of thousands of traditional grassroots supporters of Peronist syndicalism—the unionized working classes—to the ranks of the unemployed and the desperate. In response, starting around 1996, thousands of those who were part of this descendant urban class began to take to the streets and highways of the nation in the only form of protest that remained for the unemployed: squatting roads and highways. With these tactics, organized groups of the structurally unemployed managed to directly strike at the economic veins of the country. These mobilized and horizontally organized groups have since come to be known simply as los piqueteros (the picketers) (Svampa and Pereyra 2004: 5054). Beginning in the mid 1990s, what spilled over from these mobilizations of the unemployed onto other forms of popular struggle was a renewed sense of collective purpose against a callous, exploitative, and socially alienating system; a growing ethos of democracy “from below” (Colectivo Situaciones 2002: para. 3), and a massive “reactivation” of “communitarian social experience” (Svampa and Pereyra 2004: 222). Antonio Negri (2003) observes that the responses of groups such as the piqueteros to the radical liberalization of the national economy—tactics of occupying and squatting public and private spaces, horizontal forms of organizing, myriad neighbourhood grassroots social initiatives, and so on—bore witness to a new “energy of universal conviction and of egalitarian social recomposition” (para. 2) that emerged from the urban barrios and rural towns of the country at the time. These are the most direct roots of Argentina’s recent horizontal contagion that also caught on with the ERT protagonists, a contagion that impelled thousands of grassroots activists to self- 191 CHAPTER SIX organize organically and under the rubric of peoples’ assemblies working within the principles of direct participatory democracy. And ERT protagonists’ tactics of workspace occupations and seizures were most directly modelled after the new social transformations that were taking shape around them (Svampa and Pereyra 2004). Thus, ERT workers’ strongest roots are not in the country’s recent cooperativist or union movements but, rather, in a history grounded in grassroots workers’ struggles, Peronist syndicalism, and newer forms of social protest against neo-liberalism. And it is the political tools that they have learned from these sources, and not the co-operative model, that inspired thousands of Argentine workers to begin to subsequently experiment with manager-free, horizontalized, and self-managed workplaces. The Challenges of Forming ERT-Specific Organizations in Argentina The complex historical and micro-particularity of each ERT in recent years makes identifying a unified “ERT movement” virtually impossible. One reason for this is that ERTs tend to become, on the whole, progressively isolated from each other once they start production again, despite the support they garner from other ERTs during the stages of occupation and resistance, and despite incipient attempts at creating networks of solidarity between them, with each ERT living out its own experience of self-management within a capitalist sea that has managed to calm itself after the most intense crisis years of 2001-2002 (Fajn 2003: 76; Ruggeri 2006b). Consequently, it has been difficult to organize ERTs as a “movement,” under any particular umbrella organization, or within unions. Between early 2005 and the time of the majority of this writing (the first trimester of 2007), MNER, the lobby-group and umbrella organization that between mid 2002 and mid 2003 constituted the largest grouping of ERTs (and that, via the relentless early work of its president, Eduardo Murúa, had done much to articulate the processes and tactics of workplace occupation and recovery), has been experiencing a period of acute fragmentation (Centro de Documentación 2007).6 This fragmentation was perhaps foreshadowed by MNER’s bifurcation in 2003, which produced the other major umbrella organization, MNFRT, under the tight leadership of the young conservative lawyer Luis Caro.7 In our ethnographic and quantitative investigation of ERTs, we were able to determine a numerical parity of ERTs belonging to either MNER and MNFRT as of early 2005—each organization represented roughly 34 per cent of ERTs that existed at the time (Ruggeri, Martinez, and Trinchero 2005: 94). At the same time, we were also able to identify a fairly marked lack of commitment 192 WORKER-RECOVERED ENTERPRISES on the part of most ERTs with regards to these two umbrella organizations that were supposed to be representing their interests. We also found that there was a deeper identification with these organizations among ERTs that were in the midst of their takeovers, lobbying actions, and early attempts at producing as a selfmanaged co-operative—i.e., within their most conflict-filled days—and less of an identification with these umbrella organizations among those ERTs that perceived themselves to be past their most intense conflicts. These findings, perhaps more than any other in our work with ERTs, suggest the difficulty of forming inter-ERT organizations. One reason for their non-committal, autonomous nature to organizational politics, we hypothesize, lies in the perception amongst ERT workers that their struggles were indeed their struggles and that, at the end of the day, it was only themselves, their families, friends, and neighbours that at times truly risked their lives for the fight to open up their workspaces as self-managed entities.8 The vacuum caused by the subsequent dissolution of MNER and MNFRT’s tightened control of their ERTs has recently given impetus to several new fledgling ERT federations. The Federación Argentina de Cooperativas de Trabajadores Autogestionados (FACTA, Argentine Federation of Self-Managed Workers’ Co-operatives), for example, was formed in mid 2006 by several Buenos Aires-based ERTs with aspirations to create a space where ERTs could collectively lobby and co-ordinate funds from the state and forge alliances with universities and NGOs. Their hope is that these alliances will assist with technical and administrative upgrading, increase ERTs’ revenue potential and market share, create or reinstitute lost retirement benefits, secure medical and health coverage for ERT workers, and articulate tighter links between ERTs from the interior and other co-operatives (Castiglioni 2006; EnRedAndo 2006). Another promising solidarity initiative is being spearheaded by a group of steelworkers represented by a local of the national steelworkers union based in Quilmes, Buenos Aires (province), the Unión Obrera Metalúrgica de Quilmes (UOM Quilmes, Metallurgic Workers’ Union of Quilmes), which happens to be one of the only union locals that has consistently supported ERTs from the beginning (Davolos and Perelman 2003). This co-operative/ERT/union consortium, currently assisting 13 member ERTs, most notably managed to also negotiate agreements with several European agencies and with the National University of Quilmes to provide the involved ERTs with sources of technical assistance and professional consulting services (Proyecto Redes de Personas 2006). Yet another small group of ERTs are linked to the Federación de Cooperativas de Trabajo de la Provincia de Buenos Aires (FECOOTRA, Federation of Workers’ Co-operatives of the Province of Buenos Aires) and other political sectors working out of the municipality of Avellaneda, Buenos Aires (province) (FECOOTRA 2006; Saavedra 2003). And finally, ERTs working in the graphics and printing sector are currently attempting to formalize a solidarity network of co-operatives 193 CHAPTER SIX throughout greater Buenos Aires in order to pool resources and more effectively tackle the various challenges they face in a highly concentrated and competitive printing and publishing market (Centro de Documentación 2007). Interestingly, the only group that has formed in recent years along the lines of a formal trade union for ERTs has been the Asociación Nacional de Trabajadores Autogestionados (ANTA, National Association of Self-managed Workers). Emerging from within the progressive Central de Trabajadores de la Argentina (CTA, Central of Argentine Workers) and founded in late 2005 by sympathetic union activists who have had experience with various forms of self-management, ANTA formed as a response to the state’s and traditional unions’ general indifference or outright hostility to the plight of the self-managed, underemployed, and the unemployed. Initially made up of 83 entities which included ERTs, microenterprises, and other workers’ collectives, ANTA has begun to lobby the state to recognize the labour rights of the self-managed, to agitate to secure pensions, to stabilize sector-wide wages, to create a national health and workers’ compensation plan, and to provide these self-managed entities with favourable loans. While a promising initiative, there are to date only a handful of ERTs that associate themselves with this still-nascent organization; the majority of ANTA’s members are co-operatives and microenterprises associated with Argentina’s promising but still-insipient “solidarity economy” and which have not originated from formerly capitalist firms (Centro de Documentación 2007; CTA 2007; Vales 2005). ERT-specific organizations such as MNER and MNFRT formed in the early days of the phenomenon, during its “first era” (1997-2003), in part in order to articulate the processes of workspace recovery and to give ERTs and their unique experiences their own particular political voice and identity. The unifying identity for the ERT phenomenon envisioned by MNER’s and MNFRT’s leaders early on was not co-operativism per se but, rather, the very fact of being a formerly owner-managed and now worker-recovered enterprise (Lavaca 2004). And, by placing emphasis on the figure of the worker rather than the figure of the cooperator, MNER and MNFRT steered ERTs away from forging strong links with the co-operative movement during ERTs’ “first era.” While co-operative associations such as the Instituto Movilizador de Fondos Cooperativos (IMFC, Organizing Institute for Cooperative Funds) and FECOOTRA had tried to make inroads with ERTs during the “first era,” they had an uphill climb in convincing most ERT workers that linking up with the cooperative sector would be beneficial, given that a good number of them had been employees in capitalist firms with no experience with co-operativism or had had negative experiences with “false co-operatives.” Having said this, in the current, more politically stable “second era” of the ERT phenomenon (2003-present), some ERTs have been encouraged to link themselves more closely with the cooperative organisms they once shunned. Moreover, when talking to ERT workers 194 WORKER-RECOVERED ENTERPRISES today, one begins to notice a new tendency among them to revalorize or reconsider what it means to actually be a workers’ co-operative. The emergence of newer ERT-specific organizations like ANTA and FACTA, the loss of the political clout of MNER and MNFRT, popular educational initiatives geared at ERT workers, and the reconsolidation of the Argentine economy have led many ERTs to take a second look at the more established co-operative sector as a possible space within which to forge new alliances and collectively “recover” from capitalist interests (if not “recreate”) larger sections of Argentina’s economic output. In addition, the tax advantages and financial and legal support that Argentine co-operative legislation offers ERTs have begun to be recognized by its protagonists as important reasons to emphasize more their role as cooperators. Current ERT leaders such as those working with ANTA also feel that the state should establish a unique legal status for ERTs that would recognize the particular needs and challenges of self-managing recovered workers’ cooperatives within current national and global conjunctures and in light of the fact that these workers had to take it upon themselves to learn things they could never have imagined they would have needed to know (Petras 2003). What one notices when taking stock of inter-ERT organizations is that the character of formalized associations of ERTs has transformed since the earlier days of the ERT phenomenon: The early and implosive socio-economic years between 1997-2003, the ERTs’ “first era,” required MNER and subsequently MNFRT to focus primarily on articulating and assisting ERTs’ direct action tactics as well as initiating the struggle—quite effectively, as it turned out—for a national political voice for its workers and for the reformulation of the country’s bankruptcy and expropriation laws. MNER’s and MNFRT’s persistent lobbying for the redrawing of national legislation consequently saw regional and national legislatures and the juridical establishment begin to reconsider these laws in light of the possibilities that the ERT solution offers for curbing rising unemployment rates (Ruggeri 2006b). In the current “second era” of ERTs, the need for more politically minded entities such as an MNER or an MNFRT has diminished substantially given the new and recomposed socio-economic climate of Argentina. Currently, more economically focused and conciliatory umbrella organizations such as FACTA or ANTA are stepping in to meet the new challenges faced by already-established ERTs working within a reconsolidated Argentine economy. Challenges and Innovations of Argentina’s ERTs In this section we lay out some of the ways in which the challenges faced by each ERT on their path to self-management shape their new work processes, their 195 CHAPTER SIX egalitarian remuneration schemes, and the forms of horizontality adopted by each particular ERT co-operative. The span of time between the initial threats of owner-led closures of the business or bankruptcy and full workers’ control as a workers’ co-operative tends to be long and filled with arduous struggle. While most ERTs were either seized or taken over by workers, our research found that 50 per cent of ERTs currently operating in Argentina had to engage in lengthy periods of courageous workspace occupations sometimes pitting militant workers against the state, the police, thugs in the service of owners, and even the indifference or rancor of their sector’s unions (Ruggeri, Martinez, and Trinchero 2005: 54). Whether workspaces were seized without much fuss or occupied for an extended period of time before becoming an official workers’ co-operative, most ERTs subsequent to workers seizing them have had to engage in lengthy battles with the courts and regional legislatures for legal recognition of the workers’ co-operative and its right to control and use the machines and assets of the recovered firm. Hence the slogan that was adopted by MNER from the landless peasant movements of Brazil and popularized by MNER’s Murúa: “Occupy, Resist, Produce” (Murúa 2005). The slogan also serves to concisely capture the three distinctive stages most ERTs pass through on their way towards workers’ control and self-management (Murúa 2006; Vieta 2006a). It is thus important to note that once the co-operative is formed, the struggle for legal recognition and self-management is, more often than not, not over: Full workers’ control of the workspace also assumes that local courts will override the outstanding bankruptcy proceedings that are usually still pending during the first months or years of the ERT’s existence, or that a new debt repayment scheme will be struck with the workers’ co-operative or even between the co-operative and the former proprietor (Fajn 2003: 107-9). It also assumes that local legislatures will ultimately decide to grant the legally recognized workers’ cooperative the right to use the former proprietary firms’ assets—inventory, land, machines, building, patents, and trademarks—by having the ley de expropiación (expropriation law) declared on their behalf, or work out some other method of guaranteeing that the ERT has unencumbered access to assets.10 Usually, such court and legislative decisions only come after weeks and months of more struggle as ERT workers lobby judges and legislators, or even resort to the public pressure of worker sit-ins at courthouses and legislative buildings.11 Practices and Tensions of Workers’ Co-operation in ERTs Most ERTs become workers’ co-operatives for the pragmatic reasons we have been outlining thus far. However, the form that co-operation is to take is still being worked out within each ERT and across the sector. For example, the 196 WORKER-RECOVERED ENTERPRISES practical nature of the third principle of co-operatives—how “member economic participation” is to be taken up (Shaffer 1999: 45; MacPherson 1995: para. 46)— is still open to debate within most ERTs. That is, besides the widespread agreement among ERTs of the value and necessity of “members controlling the capital” of the firm (MacPherson 1995: para. 46)—made easier and encouraged by the flat horizontal model and small size of most ERTs12 —how ERT members are to receive “limited compensation on the capital” (para. 46) of the co-operative or how losses are to be contended with continue to be worked out pragmatically and debated within each ERT as it matures and lives out the intricacies of selfmanagement within a globalized market economy. For example, while in many ERTs revenue capitalization and salary amounts are regularly debated, voted on, adjusted, and agreed upon by the workers’ council or assembly, there is no trend across ERTs concerning what percentage of revenues should return to the cooperative as capital, how much should be allocated to salaries and benefits, and whether a percentage of revenues should go to local community needs.13 Also, these revenue allocation decisions are often very susceptible to market cycles. More financially challenging months are usually bridged with cuts to community contributions or, most often, salaries. These difficulties have multiple causes but tend to be rooted in the reality of intensifying market competition, chronically low cash reserves, a fleeting customer-base, difficult orders to fulfil, or challenges in securing loans. Irrespective of these cyclical challenges, the continuing debates within ERTs and throughout the ERT sector underscores what Ian MacPherson (1995) has characterized as one of the “remarkable special characteristics” of the International Co-operative Association’s (ICA) co-operative principles: their “inherent flexibility” to adapt to the economic and political particularities of a cooperative and to the collective needs of its members (para. 34). Indeed, the continued discussions within each ERT and throughout the sector concerning the form that member economic participation should take accentuate the importance that many ERT protagonists give to the principle of “democratic member control” (para. 34). And it is this aspect of Argentina’s ERTs—the high number of ERT members who “actively participate in setting…policies and making decisions” (para. 34)—that many journalistic reports often highlight (see, for example, Albert 2005; Garrigues 2002; Lewis and Klein 2004; Utne 2003; Vieta 2006a). Our research, as well as other recent in-depth studies (Fajn 2003; Rebón and Saavedra 2006), has found however that there is also, not surprisingly, a wide range in nuance in how democratic member control is carried out in practice. On the whole, larger ERTs tend to be administered by workers’ councils made up of ERT members elected with a mandate of one or two years, while many ERTs also hold regular workers’ assemblies that meet either on a regular periodic basis (sometimes weekly, usually monthly) or when major issues arise, or both. Smaller ERTs tend to administer themselves primarily via the workers’ assembly 197 CHAPTER SIX and the collective solidarity of their members. Day-to-day concerns are more often than not worked out on an ad hoc basis on actual shop floors via the adoption of production processes that are (re-) organized around flexible work teams. The internal tensions between viable production processes and an ERT’s democratic values are intimately related to and echo the tensions of pitting democratized co-operatives against capitalist markets. These tensions mean that ERTs must ensure that production runs remain as efficient as possible while also balancing the needs and skills of each worker and the ERT’s horizontal commitments. Also, their ad hoc work processes and the empowerment that many ERTs give to each worker on the shop floor ensures that, as we have mentioned before, the workers’ co-op contrasts as much as possible with the exploitative conditions that existed when the current members were employees. 80% 70% ERTs with egalitarian pay schemes 60% 50% 40% 30% 20% 10% 0% Before 2001 2001 Recovery year 2002 2003-2004 Fig. 6-6: Pay Equity and Year of Recovery of Argentine ERTs (Ruggeri, Martinez, and Trinchero 2005: 80) One notable innovation being worked out by many ERTs is the preponderance of pay equity schemes no matter how senior a worker is or what skills she or he possesses (also see Palomino 2003; Petras 2003). Our research found that 56 per cent of ERTs as of early 2005 were practicing complete pay equity (Ruggeri, Martinez, and Trinchero 2005: 67). This is perhaps one noticeable innovation that differentiates ERTs from the practices of other workers’ co-operatives in Argentina and beyond its borders. The other 44 per cent of ERTs practice varying 198 WORKER-RECOVERED ENTERPRISES degrees of more hierarchical remuneration schemes tied to specific skill sets, seniority, or—highlighting again how an ERT’s history of struggle shapes their organizational and remuneration structures—whether or not workers were present during the initial days and months of occupation (2005: 80; also see Zibechi 2006). Interestingly, the longer the ERT has been under workers’ control the more likely it is to practice pay equity as compared to more recently recovered firms. For example, as Figure 6-6 shows, 70 per cent of ERTs recovered during or before 2001 practice complete pay equity while only 39 per cent of those recovered during 2003-2004 do so (2005: 80). In addition, the size of the firm tends to also be linked to pay equity: 64 per cent of firms with 20 workers or less practice pay equity, compared to 47 per cent of firms having between 20-50 workers and 54 per cent of firms with more than 50 workers (2005: 81). 29% Non-egalitarian pay schemes Egalitarian pay schemes 71% Fig. 6-7: Occupied and Highly Conflictual ERTs (as of 2005) (Ruggeri, Martinez, and Trinchero 2005: 82) There are several explanations for these differing remuneration practices: Most notably, the collective of workers belonging to smaller ERTs tend to spend more time interacting with each other on a daily basis than those in larger ERTs and also have more intimate knowledge of each other’s jobs, personal lives, and communal concerns. This means, we have found, that smaller ERTs also tend to 199 CHAPTER SIX experience less factionalism, individualism, and shop-floor competition as compared to larger ERTs with more dispersed work teams (2005: 81). Another reason some ERTs tend towards pay equity more so than others is because workers from more egalitarian ERTs have usually known each other and worked together for longer periods of time or have a longer history of experiencing common struggles together. As Figures 6-7 and 6-8 illustrate, a related reason for an increased likelihood of pay parity suggested by our data was specifically linked to an ERT co-op’s most economically and socially harrowing early days. For instance, 71 per cent of ERTs that were involved in lengthy acts of occupation or other intense conflicts in its early days subsequently practice pay equity (Figure 6-7) while only 37 per cent of ERTs that were not occupied or had not experienced intense conflicts do so (Figure 6-8). Tellingly, many workers at ERTs that incorporate equitable pay schemes told us that their desire to practice pay equity was—again—one specific way of counterbalancing the most exploitative practices they experienced under owner-management (2005: 81-2). 37% Egalitarian pay schemes Non-egalitarian pay schemes 64% Fig. 6-8: Non-occupied or Not-as-conflictual ERTs (as of 2005) (Ruggeri, Martinez, and Trinchero 2005: 82) On the whole, our findings here suggest that a tight, intersubjectively 200 WORKER-RECOVERED ENTERPRISES existential social structure rooted in necessity and direct action, common bonds, shared experiences, and caring for one another permeate ERTs that organize their work and remuneration schemes in more horizontal ways. Responses to Intensifying Market Competition The rise in new labour struggles in the past six years marked a change in Argentine workers’ perceptions of their own plight that has also influenced ERT protagonists. The era of workers’ deep-seated terror of “death in life,” the moniker evocatively characterizing structural unemployment in Argentina, is perceived to have been left behind by many Argentine workers. As a consequence, fewer new ERTs have emerged since 2003 as Argentina’s economy recuperated and official unemployment rates dropped. In its place an insipient but committed workers’ struggle has returned to the social stage, increasingly challenging capital to once again improve workers’ living standards. In recent years, for example, strikes, demands for better work conditions, and struggles for union representation—representation that hundreds of thousands of Argentine workers lost during the anti-labour privatization years of the 1990s—have returned (CTA 2006). ERT workers were, in many ways, a vanguard within this new antagonistic labour landscape. Indeed, the new imaginary of worker agency ERTs helped carve out has assisted in reviving the active and grassroots political participation of workers in Argentina. But this new conjuncture in the “second era” of ERTs (2004-present) has not been without its difficulties. First, while the current socio-political and socio-economic landscape within a recomposed national economy favours workers more than did the landscape of the 1990s, the recuperation of higher levels of national economic activity brings each ERT face-to-face with the need to recompose itself within economic sectors and markets in full expansion (Fajn and Rebón 2005). This means that economic success for ERTs in this expanding capitalist system must unfold in terms conditioned by competition with companies that have not experienced the same traumatic processes of recuperation. Moreover, these competitors have maintained their old hierarchical management structures, capitalist labour processes, suppliers, and customers; in sum, they have not had to confront the challenges of reconstructing their business models around principles of selfmanagement, which adds myriad complexities to an ERT’s micro-economic situation. Similarly, ERTs must confront challenges that older or more stable cooperatives working within the same capitalist market paradigm usually do not have to face. Second, while non-conventional and irregular sources of funding such as community fundraising drives and selective government and NGO financing have helped complement ERTs revenue sources and have sustained some ERTs longer 201 CHAPTER SIX than they perhaps could have without these funds, many ERTs continue to remain at a disadvantage years after they have begun production as self-managed entities because of the intensification of competition within particular market sectors. Gabriel Fajn and Julián Rebón (2005), for instance, point out that the financial precariousness undergirding ERTs push some of them to focus primarily on generating as much revenue as possible from the meagre inputs available to them. This insecurity heightens the daily pressures and precariousness of the particular ERT co-operative. As such, many ERT workers work with the constant awareness that not being able to reach either established or new markets due to the lack of productive capacity, capital investment, or raw materials necessarily means that sufficient revenues will not be generated to pay salaries. These material difficulties underscore a large part of the daily concerns of most ERT cooperatives. They also illustrate the main contradiction implicit in selfmanagement within a greater capitalist system: When staying afloat becomes the primary focus of an ERT, it risks losing sight of the collective spirit and democratic ideals that in part drove them to become a workers’ co-operative in the first place. The resulting pressures that come with the desperate pursuit of sufficient returns refocuses the attention of the ERT from its co-operativist possibilities back into the very capitalist system that it contested in the first place. These economic pressures heighten the risk of reconverting the ERT, once again, into a workspace motivated by capital accumulation and competition rather than one rooted in communal values and a collective desire for autogestión (selfmanagement). For Fajn and Rebón, the effects of these challenges are reflected in the increasing trend within some ERTs to return to an organizational and management style in tune with more capitalist norms, such as the reinstitution of fragmented and repetitious work tasks, job intensification, overtime work without adequate compensation, and situations where the control once exercised by the shop floor supervisor is returned in the form of the “collective foreman.” As the authors point out, echoing Karl Marx’s critique of co-operatives, when workers become overwhelmed by the daunting demands of self-management, their compensatory reactions often lead to modes of production ensconced in “selfexploitation and [self]-bureaucratization” (Fajn and Rebón 2005: 7; and see in particular Marx 1981: 571-2; McNally 1993: 184-8). Resorting to these exploitative tendencies in order to survive within a cut-throat market not only risks returning the co-operative workplace to an ideology of capitalist rationality above other values, but also—as has already happened with some ERTs—tempts workers to return the co-operative to former owners or to new proprietors, or for its members or workers’ councils to transform into co-operativist capitalists that, once again, privilege profits above all else. In these regressive situations, “what was formerly abandoned is desired once again” as workers, in essence, either give up the vision of self-management or become “new capitalists” (Fajn and Rebón 2005: 7). 202 WORKER-RECOVERED ENTERPRISES Third, the risk of falling into the capitalist trap—i.e., hierarchical divisions of labour, the intensive pursuit of surpluses, capital accumulation, etc.—also means that ERTs must carefully consider how they will reinvest funds that are hard to come by back into the firm. This also means that ERT workers are faced with the necessity to constantly reassess (and perhaps even redesign) the organization of their production to most effectively meet customer orders while also carefully balancing the production capabilities of the ERT and workers’ democratic and egalitarian desires in light of the often depleted conditions of the ERT’s machinery. Consequently, these necessities require workers to learn new skills that are too expensive for an ERT to contract out, such as marketing, sales, accounting, administration, technical assistance, and so on. Usually, these needs also mean that an ERT must hire new workers. The challenges many ERTs face when they need to hire more workers serves as an illustrative case in point regarding ERTs’ ongoing challenges. In addition to the market and financial challenges that confound their situation, the first barrier ERTs must face when attempting to hire new workers is Argentina’s legislation for co-operatives, which stipulates that a co-op’s full-time “hires” must be incorporated as members. By legislation, this requires probationary periods not to exceed six months. Once a new member has become a socio (associate) of the cooperative, any subsequent decision to exclude him or her from the co-op is a long and complicated process. As such, the decision to incorporate new workers takes on a level of gravity and consideration not experienced by private companies in Argentina, which have benefited since the Menem years from lax labour laws. In other words, ERTs that decide to incorporate new workers must be very sure that these workers will be able to execute and maintain a level and quality of work that will justify their salaries. Indeed, a bad hiring decision by the co-operative could, for example, cause its already tight bottom line to decrease, possibly taking it into a crisis situation once again. Moreover, the question of how much decision-making capacity the ERT co-operative should vest in new workers, as well as how much they should be remunerated, remain crucial points of debate within many ERT’s workers’ assemblies. This is in no small part related to the uncertainty that incumbent workers have concerning a newer worker’s level of commitment to the ideals of co-operativism and horizontal work processes that for many of the ERT’s “founding” workers were formed during the long months of occupation and struggle. Hence, new hires add to the co-operative’s uncertainty concerning the future “returns” on their hiring “investment.”14 These are all challenges that demand important strategic decisions around which ERT workers cannot afford to err. Despite—or perhaps because of—these difficulties, many ERTs have had to turn to their members’ resourcefulness and invent unique ways of strengthening their work processes and skills in light of their financial challenges by, for example, teaching themselves new skills; adopting job rotation schemes and just-in-time production processes; 203 CHAPTER SIX collaborating with other ERTs, local universities, and even oversees NGOs to upgrade technological capacity and skill sets; or building networks of solidarity with the neighbourhood and communities that surround them through, for example, community fundraising drives, open houses, temporarily taking on interns or hiring students from local high schools or technical schools, or raising awareness and solidifying the relevance of the ERT within the local community by hosting community centres, free schools, and free health clinics on their premises. Elsewhere we have called these initiatives the “social innovations” being invented by ERTs, innovations that are linked to a nascent “solidarity economy” being forged by the ERT sector (Ruggeri 2006b; Vieta 2006b). But these innovations have been, to date, too insipient to improve most ERTs’ immediate competitiveness within the intensifying capitalist markets they find themselves in, and still too far from the level of “socio-technological adequacy” required of them to be able to compete on a level playing field with capitalist firms (Dagnino and Novaes 2004: 21). ERTs Across Latin America Comparative studies of the strategies and tactics of ERT workers’ cooperatives and other forms of self-management, particularly in Argentina, Chile, and Uruguay (Camilletti et al. 2004; Martí et al. 2005) and Argentina and Brazil (Ghibaudi 2004), emphasize the surprising longevity that ERTs have enjoyed throughout Latin America despite their challenges. These studies also assert that the sharp rise in recent years in worker-recovered enterprises that then transform into workers’ co-operatives in the region is proving the ERT form to be a viable grassroots answer for workers facing structural unemployment and the dismantling of national economies by speculative global capital and neo-liberal market policies. A comparative examination of Argentina’s ERT experiences in light of other Latin American countries over the past 15 or so years shows how the defensive strategy developed by workers who have faced the most negative effects of neo-liberal policies across the region unfolded within similar socioeconomic and political conjunctures. It also reveals the outcomes of the more supportive position towards ERTs taken up by governments and unions in other Latin American countries in contrast to how ERTs have had to innovatively work around the ambivalence or outright hostility to their situations from the state and unions in Argentina. Indeed, in light of the lack of any consistent institutional support, the relative longevity of ERTs in Argentina is a testimony to the resilience, agency, and innovative capacities of its workers. While Argentina’s ERTs are the most celebrated in the literature, ERT-type co-operatives currently exist in Bolivia, Brazil, Ecuador, Mexico, Peru, 204 WORKER-RECOVERED ENTERPRISES Venezuela, and Uruguay (Centro de Documentación 2007). Next to Argentina’s experiences, however, and for reasons we will elaborate on in the next few pages, Brazil, Uruguay, and Venezuela’s are the most developed in Latin America (Camilletti et al. 2005; Martí et al. 2004; Ruggeri 2006; Zubechi 2006). Ecuador and Mexico have only a few cases of ERTs each (Centro de Documentación 2007) and space will not allow us to get into their particularities. In Bolivia, grassroots occupations of property and nationalization schemes are most readily found in the primary resources sector such as mineral extraction, agriculture, and water (Ceceña 2005; Grant and Shuffler 2005). But if we stick to our strict definition of ERTs based on their most common experiences—formerly capitalist entities that have failed due to bankruptcy or owner abandonment in the face of dire economic conditions and that were subsequently taken over by their former employees and transformed into workers’ co-operatives—in Bolivia only a few small-scale mines could be said to be ERTs (Bocangel 2001). And in Peru, a handful of ERT-type workers’ co-ops share the scene with hundreds of smaller self-managed agricultural and housing initiatives (Babilon Poma 2005). Because of the relative incipiency of ERTs in Bolivia, Peru, Mexico, and Ecuador, a closer economic and political comparison to Argentina can be gleaned from looking at the Brazilian, Uruguayan, and Venezuelan experiences with ERTs. In Brazil, ERTs, called the autogeridas (the self-managed), began to emerge in the early 1990s as a consequence of the rise in bankruptcies and unemployment due to the inflation and monetary crises of that decade (Ghibaudi 2004; Oxfam 1999). As with Argentina, almost all of Brazil’s 140 ERTs take on the organizational structure of workers’ co-ops, and for similar legal reasons (Ghibaudi 2004). The major difference between the two countries is the strong support most Brazilian autogeridas enjoy from national and state governments, as well as the solid presence of the ERT umbrella organization Associação Nacional dos Trabalhadores de Empresas de Autogestão (ANTEAG, National Association of Workers of Self-Managed Enterprises) which assists the autogeridas with technological, financial, and administrative needs. In addition, and unlike the Argentine experience, unions affiliated with the Central Unica do Trabalhadores (CUT, Central Workers’ Union)—the latter in turn affiliated with the Partido dos Trabalhadores (PT, Workers’ Party)—have been heavily involved in assisting Brazilian ERT workers with the processes of company takeovers and the challenges of self-management. Moreover, the Brazilian state considers ERTs to be integral players in its burgeoning social economy and, subsequently, they have the full attention of President Lula da Silva’s PT. Consequently, to date, Brazilian self-managed workers have not had to traverse as many political and economic hurdles as in Argentina (Ghibaudi 2004). As with Argentina’s recovered enterprises, Uruguay’s 20 ERTs also began to emerge around the late 1990s as responses to growing unemployment and bankruptcies in a country with an economy heavily intertwined with Argentina’s 205 CHAPTER SIX and Brazil’s (NETICOOP 2005; Zibechi 2006). The subsequent institutional experiences of Uruguay’s ERTs, however, differ from Argentina’s in that they, like Brazil’s ERTs, were supported early on by the country’s only union federation, Plenario Intersindical de Trabajadores-Convención Nacional de Trabajadores (PIT-CNT, Inter-union Assembly of Workers-National Workers Central). As in Brazil, Uruguayan ERTs have thus enjoyed more economic stability than Argentina’s, on the whole (Camilletti et al. 2005). In addition, Martí et al. (2004) contend that because in Uruguay, in contrast to Argentina, there has historically been a tighter and more amiable relationship between working-class organizations and the co-operative sector, the Federación de Cooperativas de Producción del Uruguay (FCPU, or Federation of Productive Co-operatives of Uruguay) has played a major role in helping to articulate the methods for transforming formerly owner-managed workspaces into workers’ co-ops. The FCPU has also done much to provide start-up funds to new ERTs as well as offering them various forms of technical, educational, and administrative assistance (Marti et al. 2004: 94). And in Venezuela, President Hugo Chavez has been inspired by the ERT experiences in Argentina, Brazil, and Uruguay in his vision of blending selfmanaged workspaces with his project of nationalizing industrial plants via cogestión (co-management) (Argenpress 2005). The concept of cogestión in Venezuela has affinities with Yugoslavia’s model of state-sponsored co-managed factories working within a mixed market and centrally-planned economy (Lebowitz 2005). While in Venezuela as of late 2006, according to Marie Trigona, only “some 20 companies have been nationalized and function under worker co-management or control” (2006b: para. 2), a further 1,200 formerly owner-managed companies that, as in Argentina, Brazil, and Uruguay, had declared bankruptcy or had been abandoned by their owners were estimated to be occupied by their workers under no legal framework as of yet. To a greater degree than self-management in these three countries, the Venezuelan state has had a prominent role in cogestión, and occupations have been inspired and even openly encouraged by Chavez’s vision of a worker-led “Bolivarian” revolution (Argenpress 2005; Lavaca 2005). Indeed, since 2005, the Chavez government has passed numerous decrees facilitating such actions by workers (Campos 2007). However, while in mid 2005 Chavez predicted the worker takeover and nationalization of 800 or so plants by the end of 2006, these state-sponsored, worker-run expropriations have, on the whole, failed to materialize to date. And the 20 ERTs currently operating under the model of co-management in Venezuela represent only a handful of the 1,200 plants that are currently thought to be occupied in the country (Trigona 2006b; Venezuela Analysis 2005). In light of the slow pace of nationalization, a grassroots, worker-based umbrella group called Frente Revoloucionario de Trabajadores de Empresas en Cogestión y Ocupadas (FRETECO, or Revolutionary Front of Workers of Co-managed and 206 WORKER-RECOVERED ENTERPRISES Occupied Enterprises) was formed in mid 2006 by workers of the nationalized and worker-managed industrial valve-manufacturing plant INEVAL in order to “strategize how the worker occupied factory movement can multiply industry under genuine worker control” (Trigona 2006b: para. 3). It is still too early to tell how successful FRETECO will be in the task of redirecting “industry under genuine worker control” or if its presence will assist in and quicken the pace of Chavez’s nationalization plans. A Network of ERTs Across Latin America: Tentative First Steps The Primer Encuentro Latinoamericano de Empresas Recuperadas por los Trabajadores (First Latin American Encounter of Worker-Recovered Enterprises) that took place in Caracas, Venezuela in October of 2005 was the first regionwide gathering of ERTs in Latin America (Lavaca 2005; Martín 2005; Trigona 2006a). Attended by 400 worker protagonists from 235 recovered enterprises as well as sympathetic unionists and government representatives from Argentina, Bolivia, Brazil, Ecuador, Haiti, Mexico, Peru, and Uruguay, the event seemed to finally “internationalize” the ERT phenomenon. Until then, the sharing of ERT experiences had been relegated to comparative academic studies (e.g., Camilletti et al. 2005; Ghibaudi 2004; Martí et al. 2004) with occasional contacts between the various countries’ ERT leaders and invited workers at social economy events such as the World Social Forum (Centro de Documentación 2007). And the Argentine delegation of 300 workers, led by MNER’s Eduardo Murúa, took on an inspirational role at the Encounter (Murúa 2006; Vieta 2006b), while Chavez’s presence and his “Bolivarian” project offered the legitimacy, financial backing, and organizational force of the Venezuelan state, and also helped articulate the first real regional vision for ERTs. Aside from completing 75 contracts and promissory agreements between the region’s ERTs, the conference participants also managed to cobble together what has come to be called the Compromiso de Caracas (Caracas Accord) (Lavaca 2005).15 The accord detailed the vision for a multinational, worker-led, and continent-wide initiative for a solidarity network of ERTs and other worker-run enterprises that Chavez termed “Empresur,” (Movimiento 13 de Abril 2005). Empresur was envisioned as an intercontinental social economic network that would engage not only in traditional forms of trade between the region’s selfmanaged firms, but would also see ERTs interact with each other outside of the neo-liberal marketplace. As the gathering’s participants envisaged it, such solidarity-based interactions would also include the sharing of technical knowhow, the creation of funds for “fair loans and investments,” and the provisioning of raw materials rooted in bartering, all working within a transnational network of co-operation that would also offer political support for the legal hurdles faced by 207 CHAPTER SIX ERTs across the region (Martín 2005). The accord also took a strong stand against U.S.-led neo-liberal economic designs in Latin America (i.e., the FTAA) with delegates envisaging Empresur as a key component of Chavez’s alternative to the FTAA: the Alternativa Bolivariana para América Latina y el Caribe (ALBA, Bolivarian Alternative for Latin America and the Caribbean). Additionally, the Accord urged all of the region’s governments to set aside capital funds for ERTs and demanded that state governments draft national laws and engage in constitutional reforms that would better support worker-recovered enterprises and other forms of microenterprises. But this event would also prove to be the apogee of the move to internationalize the ERT phenomenon across the region to date; most of the contracts and initiatives that were signed, especially with the Argentine ERTs, have yet to come to fruition. This was highly discouraging for Argentina’s delegates of ERT workers who had gone to Caracas with high expectations of signing numerous lucrative contracts. And while the Caracas gathering witnessed Chavez officially launching his nationalization and factory expropriation plans for Venezuela, the vision for an alternative Latin American network of “multinationals without a boss” fell short of its promise. Our reading of why Empresur has failed to tangibly materialize is linked to the substantial differences between ERTs in Argentina and those in Brazil, Venezuela, and Uruguay. Argentina’s official government delegation to the Caracas gathering, which was made up of third-string bureaucrats with little political power, clearly delineated its government’s indifference towards ERTs and its unwillingness to co-finance or add to the USD $50 million in subsidies for the region’s ERTs that the Venezuelan government put on the table at the gathering. This has had real material consequences for Argentina’s ERTs: While various deals between the Venezuelan state and ERTs in Brazil and Uruguay have already been consummated thanks to these states’ full support of their ERTs, international diplomatic protocol has prevented Venezuela from allocating these funds to or finalizing deals with individual Argentine ERTs without the mediation of the Argentine state. Something similar occurred with union representation at the Caracas meetings. While, as we have already indicated, in Argentina ERTs have surged without the support of most unions, in Brazil, Venezuela, and Uruguay ERTs have always been intimately linked to major unions as central players in national labour struggles. Recognizing this central role, the Uruguayan co-operatives at the gathering, for example, were accompanied by representatives from PIT-CNT. And Brazil’s ERTs in Caracas were also grouped with representatives from the CUT. Argentina’s unions, on the other hand, were represented by a handful of observers. Because of the mixed outcomes of the Caracas meetings and the lack of government and widespread union support for Argentina’s ERTs, it was 208 WORKER-RECOVERED ENTERPRISES impossible to plan the second gathering for the region’s ERTs that was slated for 2006. And the accords and contracts signed between Venezuela and Argentina’s ERTs have mostly been forgotten. Moreover, while regional conferences on selfmanagement, such as the Caracas meeting and smaller academic gatherings, have guaranteed some continuing cross-pollenization of experiences across the region, the bulk of the organizational decisions, daily economic challenges, and sociopolitical situations faced by the region’s ERTs remain uniquely tied to the national economic and political conjunctures they find themselves in. Consequently, the Caracas Accord’s vision for Empresur remains largely a dream. In Argentina, this has meant that most ERTs have had to put the project of forging a network of solidarity across Latin America to the side as they continue to rely on the ingenuity and drive of their own workers, the solidarity of the surrounding neighbourhoods, and fledgling national ERT networks. Thus, the Caracas gathering put on display for all of Latin America’s ERT protagonists an example of how deeply in Argentina the state, most unions, and even the traditional co-operative sector have been slow to step up and assist its fledgling ERTs, unlike the situation in Venezuela, Brazil, or Uruguay. As we have articulated throughout this chapter, this reality has greatly influenced the cooperative practices and structures adopted by Argentina’s ERTs. Conclusion This chapter has mapped two key trends that often go unnoticed or are undertheorized by academic research and journalistic articles covering Argentina’s worker-recovered enterprises: First, employees’ initial motivations for seizing control of deteriorating companies from former owners and eventually putting them into operation under their own self-management comes out of their fears of becoming structurally unemployed and from their desire to save their jobs rather than from any predetermined political predilections. Second, most ERT workers restructure their workplaces as a workers’ co-operative only after workers have gained control of the plant because it is the most practical method for transforming former owner-managed workplaces into self-managed ones. More specifically, ERT workers organize themselves as a worker’s co-operative not from any deep-seated desire to become co-operators but, rather, as a legal and pragmatically defensive manoeuvre to protect themselves from returning owners or state repression, to legitimate themselves as a legal entity to customers and other firms in their market sector, to more easily restructure into horizontally democratic workspaces, and for securing market share, loans, and other forms of financing. Fundamentally, the myriad challenges ERTs across the region have had to 209 CHAPTER SIX manoeuvre around and the subsequent social innovations they fashion on the path to self-management within their local, state or provincial, and national political and economic conjunctures—from the first months of recuperation to their unfolding struggles to stay afloat and self-manage themselves—shape their organizational structures and mediate their ultimate success as a workers’ cooperative. Their social innovations are also aspirations to counterbalance the most exploitative practices they experienced under owner-management. Moreover, ERT workers’ capacities to put pressure on those within the juridical and political spheres of power, plus the production and organizational innovations they manage to create, are what determine the early survival of an ERT during its first two stages of struggle—the stages that Murúa’s MNER has characterized as “occupy” and “resist.” These two stages of struggle predominated the concerns of ERTs during the first six tumultuous years of the phenomenon—its “first era”— during 1997-2003, the years when most workspace occupations and seizures took place in Argentina. Once these first two stages are surmounted, the third stage— “produce”—involves experimenting with strategies of economic viability and new networks of solidarity within and beyond each ERT’s particular market sector. And all three stages towards full self-management—the activist (“occupy”), the political (“resist”), and the economic (“produce”)—must be engaged with care and inventiveness in order for the co-operative to become a long-lasting experiment. Non-partisan, pragmatically driven, and yet in many ways anti-capitalist models for transforming work into something much more democratic and just, the ERT phenomenon in Argentina and across Latin America can be seen in many ways as being something inspirational—perhaps even “something else”—in the history of workers’ struggles despite their ongoing challenges. Ultimately, while small in numbers, ERTs are proving to be promising micro-experiments in new forms of self-managed and co-operative work practices that, collectively, are drawing out tentative sketches for an alternative economic and social reality for working people in Argentina, throughout Latin America, and beyond. Notes 1 The findings and analyses we report in this chapter draw from the work and growing data sets emerging out of our various and overlapping research projects that explore Argentina’s ERTs (Ruggeri 2006b; Ruggeri, Martinez, and Trinchero 2005; Vieta 2006b). The results of the first phase of our work on the ERTS were reported in the 2005 book Las empresas recuperadas en la Argentina (Ruggeri, Martinez, and Trinchero 2005). Argentina’s most recent economic woes arguably began to take shape with the selling off of over 150 nationalized firms to multinational interests in the early 1990s 2 210 WORKER-RECOVERED ENTERPRISES (ostensibly, to pay down the mounting national debt that, paradoxically, ended up ballooning from USD $58.5 billion in 1991 to USD $155 billion by 2001). This policy was coupled with the fixed-rate exchange policy (ley de convertibilidad) introduced by the Menem administration in 1991 and encouraged by the IMF in order to stem the tide of acute inflation and hyperinflation that had plagued Argentina throughout much of Raúl Alfonsín’s tenureship in the 1980s. For good political economic accounts of the consequences of these policies, especially their connections to the rise of underemployment, unemployment, indigence, and business bankruptcies throughout the 1990s that prefigured and led to the socio-economic collapse of Argentina in 20012002, see Damill (2005), Patroni (2004), and Velde and Veracierto (2000). A large number of Argentina’s co-operatives—59 per cent—belong to the rural, housing, insurance, consumer, public services, and credit sectors, rather than to the economic sectors where most ERTs are to be found (compare Figures 6-2 and 6-4). To date, most ERTs have come from the urban economic sectors most affected by the implosion of the neo-liberal model of the 1990s, which include urban industrial sectors or service sectors made up mostly of small- and medium-sized firms that deal with intermediary production (i.e., graphics, metal works, food processing, etc.) or final consumption (i.e., editorial houses, schools, bakeries, hotels, etc.) (Fajn 2003: 157; Montes and Ressel 2003; Ruggeri, Martinez, and Trinchero 2005: 47; Una Argentina Solidaria 2004). Argentina’s bankruptcy law (Article 21 of Law 25.589) stipulates the following concerning employee ownership of a failed firm: “the continuity of the enterprise [in the case of bankruptcy] will consider the formal requests of its employees in their dependency…, or as labour creditors, who must act in the subsequent period of continuity under the form of a workers’ cooperative” (Ministerio de Economía y Producción 2002; see also Martí et al. 2004: 104). Such was the case, for example, with the workers of the waste recycling and parks maintenance co-operative Unión Solidaria de Trabajadores (UST, Solidarity Union of Workers), which was formally a branch of Argentina’s largest home-grown multinational, Techint. In 2000, the UST workers were fractured from the company and repositioned as either a co-operative or as independent contractors. Soon after Techint began to outsource the work once done within the company to the cooperativized former branch-plant workers, their job-orders became unwieldy as their production costs began to surge and unremunerated overtime became the norm, now without union representation. In response, in 2001 the UST workers occupied the plant, reconstituted their co-operative under the rubric of an ERT, sought expropriation, and have now formed into a thriving ERT in the municipality of Avellaneda. For an account of their struggle, see Clemente (2007) and (2006). A large part of MNER’s internal conflicts involve differing opinions amongst its leadership and affiliated ERTs regarding what kind of role it is to play now that the national economy has stabilized somewhat. While Murúa, for example, continues to believe in an antagonistically combative posture towards the state and advocates “fighting for a different Argentina, an Argentina without exploitation” (Murúa 2006), others within MNER felt that a more conciliatory role towards the state and the administration of Nestor Kirchner should be taken up. The split between MNER and MNFRT was due to various conflicts that revolved around ideological issues (e.g., MNER’s desire for the basic autonomy of each ERT 3 4 5 6 7 211 CHAPTER SIX versus MNFRT’s more traditional union-like approach), strategies of how to deal with the state, and, in particular, whether or not community centres should be opened within ERTs. For example, as a further protective strategy and as a way of giving back to the community, MNER actively encouraged ERTs to open up community centres and other community-based initiatives within their premises, proactively supporting those ERTs that interacted openly with the neighbourhoods that surround them. MNFRT, on the other hand, encourages its worker-recovered co-operatives not to engage in community services for fear that such activity would detract from the business efforts of the worker-run firm. Due to its organizational reliance on open assemblies and its focus on the autonomy of each ERT MNER also tended to operate more chaotically than MNFRT. It aligned itself closely with the global social justice movements and the World Social Forum and tended to also distance itself as much as it practically could from the state while, at the same time, lobbying the state for strategic subsidies (e.g., pensions, funds for technical upgrading, funding for cultural centres, etc.). Independently of each other, on the whole, MNER and MNFRT lobbied hard for the reform of certain laws that would ease an ERT’s legal burdens, seeking, for example, amendments to national and regional bankruptcy and expropriation laws to favour worker takeovers without having to accept the financial burdens left by former owners. MNER was particularly instrumental in lobbying regional legislatures to reinterpret Argentina’s national law of expropriation. For detailed accounts of the history of these conflicts and the various ideological differences between Eduardo Murúa’s MNER and Luis Caro’s MNFRT, see Heller (2004), Lavaca (2004), Magnani (2003), and Rebón and Saavedra (2006). 8 Tellingly, some ERTs have decided to open up their factories and workspaces to the community and offer to it free spaces from which to facilitate community centres, popular schools, medical clinics, theatres, and art galleries specifically in response to this support and solidarity that many barrio neighbours, friends, and family members showed to agitating ERT workers during their most risk-filled days of occupation. 9 That these two initiatives rely on European funding and technical assistance also alludes to the Argentine state’s general indifference towards ERTs. 10 If all goes well with the occupation or seizure of the plant and the early months of selfmanaged production—and there are no guarantees that this will be so—the process of workplace recovery culminates in the firm becoming an official, worker-run cooperative, fully controlled by its workers under the legal protection of (usually) a temporary version of the ley de expropiación (Law of Expropriation) and Argentina’s legislation covering co-operatives, as well as other forms of legal protection. The law of expropriation found in Article 17 of the Argentine constitution—which the legislative branches of local governments began to interpret in favour of workers’ cooperatives primarily because of the lobbying efforts of ERT umbrella organizations such as MNER and MNFRT and the legal arguments of their lawyers—is vitally important to ERTs because it prevents the auctioning off of the failing company’s assets and, together with Article 21 of Law 25.589 (see note 4), gives the workers’ cooperative partial or total control of the plant and its assets for a specific period of time. As of 2003, only 28 per cent of ERTs had managed to obtain the legal protection of at least a temporary version of the expropriation law, which usually lasts two to five years, after which the ERT must struggle to extend the temporary expropriation or secure permanent expropriation (the latter has, to date, with the exception of ERTs 212 WORKER-RECOVERED ENTERPRISES within the city of Buenos Aires, rarely happened). Telling of the continued dire instability of a large minority of ERTs during the “first era” (1997-2003), 19.5 per cent were without any form of legal definition for protecting their assets as of 2003 (Fajn 2003: 99-109, 160). By 2005, most ERTs had at least secured their organization around the legal framework of a workers’ co-operative and were in the process of negotiating the control of the firm’s assets with bankruptcy trustees and local courts (see Figure 6-1). Well known cases of these long struggles that included public lobbying tactics and standoffs with the police and local legislatures have garnered an impressive amount of press coverage. Notable cases include the printing houses Artes Gráficas Chilavert and Artes Gráficas Patrícios, the Brukman clothing factory, the ceramic factory Zanón/FaSinPat, and the Hotel BAUEN (see Vieta 2006a). The mean number of workers making up an ERT in Argentina is around 35, which, as a side note, represents a substantial drop in their personnel from an average of 180 employees per company when ERTs were under owner-management (Ruggeri, Martinez, and Trinchero 2005). Most of the absent workers are made up of employees who either did not want to go along with the occupation, retired early, or, most likely, were part of the management, administrative, or technical teams that had an easier time finding work elsewhere (Fajn 2003; Rebón 2004). Allocating a percentage of revenues to community initiatives such as neighbourhood athletic clubs, neighbourhood kitchens, barrio microenterprises, or other local infrastructural needs is a practice which some—but not all—ERTs have adopted in light of the solidarity given to them by the neighbourhoods that surround them (and usually in the most economically challenged barrios) (see notes 7 and 8) (Vieta 2006b). In addition, the period of member/worker expansion adds an additional long-term worry for the ERT: If the number of “new” associates supersedes the number of “founding” members of the co-op, could the co-operative be voted out of existence one day and become, once again, a capitalist firm if the latter form is perceived by newer members to be a much more efficient model for securing their jobs and tackling capitalist markets? Due to these risks, many ERT co-ops have decided to incorporate new workers as temporary contract workers without making them members of the cooperative. At times these contracts are renewed far beyond the six-month probationary period that they would have had to respect had they taken on these contract workers as outright members of the co-operative. Ironically, these situations may reproduce the very exploitative capitalist practices that led to the labour instability that ERT protagonists were contesting in the first place. In some ERTs, however, there is a marked preoccupation with balancing the equitable treatment of all its workers with the ERT’s new organizational and production processes and the long-term viability of the co-op. In these cases the balance seems to be maintained by strategies that could be interpreted as nepotism: hiring family members, ex-workers of the co-operative (including retired workers), or workers recommended to them by the ERT’s incumbent members or friends (Ruggeri, Martinez, and Trinchero 2005). 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