Global Policy Forum

The Work of Changing Minds


Recovered Factories in Argentina

Esteban Magnani

December 17, 2003

In the last couple of years Argentina has become part of mainstream news, watched by the citizens throughout the world. Before that, for the most part, Argentina was simply the birth place of the well known football legend Diego Maradona. By the end of 2001, the Argentinean flag was not only watched blazing on the chests of its football players, but over the fire that burned on the streets of Argentina, held by mainly bourgeois middle class citizens beating the ATMs with their pots and pans. That was the kind of image the CNN cloned endlessly.

For others throughout the world, Argentina was the Mecca for discovering what came after the neoliberal cliff. The reason is that among the ruins of the system—ruins which included citizen corpses—started to grow new and innovative ideas, along with the realization that bourgeois complaints (because others classes of society were working hard from before) were not enough: it was time to get our hands soiled in intensive work. More than that: if we allowed the usual mummies to decide our future, the result would be the same disaster we had complained about for so long.

The end of 2001 was a strange time. It had been usual to see the "others", the poor, complaining on the streets throughout the country. But this time it was the middle class and their endless cries. The same ones who were showing off with their 4 wheelers, were throwing eggs against the bank doors as the police stood in silence in front of them. From that chaos and devastation, in which everything was being questioned, grew new forms of organizing. Each one tried to do what he/she knew best before politicians did it themselves. The middle class gathered in the street corners to discuss politics, the unemployed demonstrated everywhere asking for state aid, and the workers... well, some of them went beyond what was known and decided that work was not something to ask for but to build for themselves.

This last consequence had been growing before the December 2001 events, but with the crisis their momentum increased and provided them with vital social legitimacy. A few months before, any workers who thought they could become the owners of a bankrupt company would have been considered thieves endangering sacred private property. After the December events, when all that was known before seemed bleak and distant, these same workers could be considered partners and neighbors fighting for something legitimate: work and dignity. It was clear they were not brainwashed communists, but people who were seeing the corroding machinery of the empty factories and the deteriorating health of their children.

How does it work?

The entrepreneurial tradition in Argentina is quite sad. As in the rest of the world, the aim of any capitalist is to enlarge profits as much as possible. The Argentinean particularity (actually not that particular in the third world) is that there is no state control, and the economically powerful are also the politically powerful. Almost no negotiation is required. To make things worse, during the nineties the ruling ideology said that everything allowing the capitalist pockets to gain weight, would be good for the whole of society. Things were made easy for businessmen and most of them took advantage of the spirit of the nineties, asking for state subsidies "to hire more people", acquiring private credits, and also not paying salaries, taxes nor providers. At the end of the road was bankruptcy and the auction that would allow the "entrepreneur friend/daughter/lawyer" to recover his/her factory very cheap and free of debt. The system worked smoothly. There were few isolated demonstrations and useless prosecutions. The bankruptcy law allowed them to do all this without punishment.

In January 2001, after a long struggle, a group of workers who had suffered through this capitalist system, and had set up a coop called Unión y Fuerza (Union and Strength), obtained the first expropriation granted by the government to the ex workers of a bankrupted company. That turned the workers into proprietors for at least two years. What does "expropriation" actually mean? The system is not easy to understand, but basically works as follows: after a company enters bankruptcy, the workers set up a coop, something that establishes them as a legal entity. Afterwards they ask the judge to stop the auction.

Meanwhile, they present a project to the legislative powers of their province to declare the factory as a common good and ask for an expropriation. According to our National Constitution, expropriation is the only legal figure limiting private property. The state has to pay an indemnity within a two year period in exchange for the expropriation. That money is meant to be administered by the judge to pay the creditors of the bankruptcy, among which the workers are usually found. As the Argentinean state is broke, it does not pay anything, and therefore the workers have to raise the money to pay the state, and the state pays the judge, who pays the creditors, if possible. If the workers can raise that kind of money in two year, the expropriation is usually extended for another two years. It should be noted that this "renovation" has happened in only a couple of companies.

The procedure is of course much more complex and allows a tremendous amount of diversions. There are however ways to recover a factory that do not include expropriations. For instance, the workers can get the permission to keep the company working and use the profit to buy it over. Recently, there was a case in which the judge accepted the debts of the "bankrupted" party as part of the money to buy over the company. This is a very important step, because the workers are usually the main creditors of the bankrupted company, and using their debts would be a great help.

New praxis

There are many more legal issues to explain and questions to answer, including how the self-organized workers manage to be more productive than before, or how saving the administrative salaries (who usually flee with the owner) allow them to invest more. But I would rather focus on a more qualitative issue, one that is harder to understand and analyze, but which is the one that may bring deeper changes to the whole of society. That is, how the new way in which workers organize themselves change the way they perceive their lives.

To explain that change we need to delve into the theoretical tool box and bring out a fundamental concept: praxis. Marx´s historic materialism teaches us that it is reality what determines consciousness and not the other way round. "We go from the earth to the heaven not from the heaven to the earth". This common sensed but profound idea says that it is everyday life - what we do, what we eat, how we travel, who we talk to, our job, etc., i.e. our "praxis" - that mostly determines the way we think.

Argentinean workers usually come from an everyday praxis built on control and obedience. Whoever does not respect that, is easily laid off. His/her role is to obey and try to cheat the bosses as much as possible. But in every relationship of domination there must be some symmetry: the worker does not have to make any decisions, and whatever happens he has the right to receive his/her salary. If he/she does not at least he/she can complain. When a factory closes down, the worker usually demonstrates to get as much money as possible, something that usually does not pay back (the workers are among the last on the list of the ones to be paid by the judge after the auction). After demonstrations the worker usually goes home and starts trying to find a new job. During the late nineties and the early new millennium, looking for a job was not only stupid but also useless. Most of the time the unemployment rate reached far over 20%.

From that hunger and desperation, from the certainty that they would find no new jobs, the workers realized they needed to try something else: to create jobs instead of finding them. As we've seen, this goes against all their previous experiences. This change implies an emotional and symbolic price they have to pay. They have to discuss with the judges, fight against the police, and live on the salaries of their husbands and wives. The fight took most of their free time, commonly leading to divorce. As an example, in the Zanón factory - one of the largest - the workers have acquired the assistance of psychologists. Most of the unions tell them to give up, to get the little money they are offered and start a small shop beside the other thousand of laid off neighbors who have set up shops. This is why only the elderly decided to fight to the end: they know it was their last chance, as nobody would rehire them. It is only those in desperate need that finish the fight.

Now there is not only desperation. There is also more hope: when workers started to recover metal and crystal factories, print shops, schools, shipyards, clinics, etc. others became aware that it was possible. This was of great help for these who could see no other options and started to hold on to this hope like castaways hold a piece of wood.

Coops also became a very good threat for the owners. Around the recovered factories, the owners tended to become more punctual with their employees salaries. In fact, setting up a coop was sometimes just a way to put pressure on the owners. Only when the workers start to flirt with the idea of being entrepreneurs, being their own bosses and deciding their own salaries, they reach a point of no return. Once they sense the feeling of being in control and the certainty they would not be laid off again, receiving their salary on time is not good enough any more.

The fight is ruthless. Workers go through hunger, they become zombies roaming around the corridors of the court houses and the legislations, they are asked for production plans, lists of committed clients, etc.. all requiring a great deal of time and patience. Most of the time they just have to wait in the frozen factory for the next legal step to happen, sometimes to find out that they must start all over again. They don't usually have electricity or gas, they are cold, living on the food brought to them by other workers or neighbors, and that is if they are lucky. It can last months, sometimes a year, sometimes more. During these periods of waiting, their main activity is the assemblies, where the workers decide what to do, how to continue the struggle, and how they will continue to organize. These assemblies are a key activity. This is where they exercise democracy, the one that will allow them to run the company for themselves.

Let's bring back our small marxian tool to remember these workers have always been a piece of the hierarchical machinery in which their opinions were not needed, in consequence affecting their self perceptions. They were told they didn't have to think. Most of the interviewed entrepreneurs thought that workers can't run a company, even against all the evidence that indicates the contrary.

Workers suddenly have to prove that they can do it, that their opinions count and that they have a vote. That is a tremendous leap, one hard to achieve. One of the men who were assisting the workers of a metal factory asked me "How do you manage to stop everybody saying "yes" when one of the ex section bosses says something? That's what they had done for years". But even if it is hard for them, as room for opinions became available, some workers start to fill the space and sensed that it was normal to give one´s own opinion. But they already know what happens when they delegate decisions. Against everything they are, against the praxis they've lived in all their lives, the praxis they are made of, some of them start to awaken. And when they do, they act as an example to their compañeros, their neighbors, and to other workers. Perhaps this is the beginning of a deeper and more real change.

After a few months of struggle, the workers have changed. They feel able to do anything. This feeling grows more when they start producing. They know that any mistakes will cost them as the ones behind. They have more responsibility and have to deal with it. When they take the responsibility, it impacts right on the companies' productivity. There are no bosses to cheat anymore.

But, is that all there is? Just very democratic groups struggling in the wild market, unable to change anything else? There are numerous answers to these questions. Some workers reach only that point: they know they need to be close together to fight against competition and the evil that is out there. But there are some others who can't stop once they've started the momentum. These ones help in other struggling factories: they lend money, open cultural centers for the good of their neighbors, ask for changes in the legal framework so the workers of any bankrupted company can automatically become the new managers.

During an interview with one of the leaders of the National Movement of Recovered Factories, Eduardo Murúa, I asked him about the commitment he could see in the recovered factories. He was not very optimistic, just a few workers become activists in each factory: "The only thing we can ask for is that they help the others. But if they don't do it, it is their decision and we won't do anything". He knows the only way to build genuine support is through example. Factories, for good or bad, are autonomous, and they nurture their autonomy as their most precious breed. The ones who delegated the power after the struggle have usually paid for it.

How far will they get?

It is hard to find the answer for this question. Some of them have gone very far. Others are just small entrepreneurs trying to maximize their profits, dreaming the dream of consumption that publicity has so carefully placed on them. Still others have turned into political tools of a political chief.

New factories are being opened by the workers almost every week. There are about 200 hundred recovered factories. Their economic impact is almost insignificant, but their symbolic value is priceless. Some political parties are trying to open factories out of political conviction, but almost all the recovered factories are the result of few options and the hope built by other recovered factories.

On the other hand, the tide is turning. Argentinean society seems to have finished with the community feeling we had a couple of years ago. The middle class has started complaining again because picketers dirty the parks and cut the roads they need to take to get to work. The new president has caught in his hands most of the flags that were raised during the social uprisings. Even if the social climate is much better than it was 4 years ago, it is hard to guess what's coming next. The bankrupted companies have become attractive since the economy started to recover.

It is within this frame that the second wave of change will have to take place. The first wave was recovering factories under workers control and it can already be labeled as a reasonable success if it keeps momentum. In this second wave the workers will have to decide between being part of the same system that kicked them out as soon as things got rough or keeping the fighting spirit alive and well and inspiring the struggles of tomorrow. They can prove that bosses are not necessary. Today they have changed their praxis, now they need only to show the others that it is possible. The fact that this dilemma is real, demonstrates a great leap forward, but it is hard to avoid crossing one's fingers in hopes that they will be the ones who can show the rest of the society it is possible.

Translation: Dina Khorasanee

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.