Without bosses: the Process of Recovering Companies by their Workers in Argentina, 2001-2009

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by Red Libertaria de Buenos Aires *

Introduction

Self-management in Argentina

From late 2001 and the beginning of 2002, sectors of the Argentine working class staged an extraordinary experience of struggle. The occupation of companies and the commencing  of production without bosses. In the context of an economic crisis, high levels of unemployment, bankruptcy of companies and massive retrenchments, thousands of workers organised themselves to keep their jobs.

Economic and Political Crisis

Between 1997 and 2001 there was a severe economic crisis in Argentina that impacted heavily on the bloc in power. This crisis was surmounted by a popular rebellion on the 19th and 20th of December that, facing a state of siege, forced the resignation of President Fernando De la Rúa and the opening of a process of leaderlessness in the executive branch of the Republic [1], and an advancement of popular struggle. This rebellion put an end to a series of neoliberal governments in the country, while there was a breakthrough in popular struggle: neighborhood assemblies, movements of unemployed workers and the recovery of factories and businesses by workers.

During the ‘90s an economic model based on the “convertibility” of the currency was imposed in Argentina. This meant that 1 peso was equivalent to 1 U.S. dollar. Clearly, the only way of maintaining this parity was through external credit. When, from 1997, credit became more expensive, Argentina’s economy went into a severe recession. While the economic model had generated a high rate of unemployment (over 10%), the crisis of unemployment now soared to over 25%. Many businesses went bankrupt, pushing more workers onto the streets. The government’s response, following the advice of the IMF and World Bank, was to implement national budget cuts, which worsened the people’s situation. By 2001, Argentina had ceased to be a haven for financial investments, with much capital having left the country. The government’s response was to freeze savers’ bank deposits, a situation that eventually constituted an expropriation of the workers and middle class to save the banking system.

Faced with this situation, the bourgeoisie was divided around two programmes to overcome the crisis. One side sought to abandon “convertibility”, devaluing the currency, to make local production more competitive at a global level. The other side wanted to adopt the dollar as legal tender, making the local economy more dependent on the U.S. economy.

The social situation became intolerable in December 2001. The freezing of bank deposits prevented workers from having access to their wages. The lack of money supply accelerated the process of bankruptcy and unemployment increased. It was in this way that, on the 15th, the looting of shops began in the slums of the big cities. The government responded by declaring a state of siege (state of emergency), suspending the population’s constitutional rights on the night of 19th December. After transmission of the presidential message on national TV, the population of the large cities began to take to the streets, banging pots and pans, chanting “What jerks, what jerks! They can put the state of siege up their ass!” or “All of them must go – not one of them must remain!”, demanding the resignation of the minister of finance, the president and all the politicians. Thus began the popular rebellion, of an insurrectional nature, that ended the presidency of Fernando De la Rúa.

Popular Mobilisation

In the months following the fall of De la Rúa, Argentina was submerged in a process which saw the development of popular organisations and their demands. Noteworthy are the emergence of the Neighbourhood Assemblies and the central role played by the Piquetero Movement (Unemployed Workers/Picketers Movement).

The Neighbourhood Assemblies emerged in the first weeks after the fall of De la Rúa. In almost all the public squares and important corners of the big cities, thousands of residents gathered for the first time in years. They discussed politics, organised street actions (demonstrations, escraches [a sort of sit-in aimed at shaming someone]) and sought, through mutual aid, to meet the needs of the unemployed residents. They also managed to establish Inter-neighbourhood Assemblies that had weekly sessions to coordinate joint actions.

On the other hand, the piquetero movement that had emerged in 1997, organising workers dismissed after the privatisation of the state oil company in Patagonia and the northwest of the country, who were struggling to obtain jobs and subsidies that would provide some respite during their unemployment, spread to become a nationwide phenomenon. In 2001, the poor and unemployed in the slums (townships) of the country’s political center, the City of Buenos Aires, were also organised and mobilised. The transitional government of Eduardo Duhalde, elected by the Legislative Assembly (comprising the Lower House and Upper House) on January 2, 2002 should have increased unemployment subsidies to try and ease the minds of the millions of unemployed workers, but instead led to the growth of  proletarian protest organisations. In addition, the unemployed workers set up their own, self-managed, co-operative projects in order to create work for themselves.

The piquetero organisations thus became an important political actor in those years, articulating themselves around popular demands from different sectors and demonstrating a high capacity for mobilisation and for pressuring the government. In the early months of 2002, a strong alliance was established between the assemblies of urban origin, comprised mostly of middle-class sectors, and those of the unemployed in the cities’ neighbourhoods, as expressed in the slogan “picket and pan, the struggle is one alone”.

Factory Occupations

It is in this context of economic crisis and popular mobilisation that one of the phenomena that has most attracted the attention of anti-capitalist militancy around the world was produced: the process of the occupation of factories and businesses and their being put into production by the workers, without bosses.

While this process was new in Argentina, it does have important links with the workers’ traditions and methods of struggle. The tactic of occupying factories has a long history in the country. The most important precedent in this sense was promoted by the CGT (General Confederation of Workers) in 1964. In one day 10,000 of the most important manufacturing establishments in the country were occupied by workers with military precision. The conduct of this measure was bureaucratic and enacted with a hit-and-negotiate logic in order to accumulate corporate power within the system and not to generate a break with the system. But the move shocked both the bourgeoisie and the union bureaucrats themselves to such an extent that the plan of struggle, organised into distinct stages, was aborted midway.

The occupation of workplaces was also a means of resistance against dictatorships or attempts at privatisation. Some examples of this are the seizure of the Lisandro de la Torre refrigerator company (which was done to prevent its privatisation and produced a strong workers’ uprising in the district in which it was located), the seizure of the Alpargatas textile company during the last military dictatorship, or that of the El Chocón Dam works, etc..

There are also intermediate measures which have their roots and history in the Argentine labour movement: the strike with a workplace presence, for example, is a moderate derivative of the plain and simple factory “occupation”.

But after the crisis of 2001 a novelty appeared: workers occupying closed factories to keep their jobs and to re-start production without bosses.

Most of the time, the occupations began as preventative measures. By these means the workers sought to prevent the employers from removing the machinery, goods and commodities before declaring bankruptcy. If this happened, companies would be insolvent and could avoid paying the wages and severance pay that were due, as they would not have property that could be auctioned to pay off their debts.

However, they soon began to recommence production at these plants. They had as an precedent the occupation of the Argentina Metallurgy and Plastic Company (Industria Metalúrgica y Plástica Argentina – IMPA), which had been occupied since 1996 and whose workers had begun to self-manage it, after resisting for weeks or even months, in what was a big political and legal struggle. At this point the solidarity given by local residents, the assemblies and piqueteros – which enabled massive mobilisation to obtain possession of the factories and the rights to operate them – was essential. In most cases, they did not win the support of bureaucratic, yellow (pro-employer) union leaders, although, in some specific cases, some union sectors also supported the occupation. The most prominent case, but not the only one, is that of Zanon (now called FaSinPat or Fábrica Sin Patrón – Factory Without a Boss), where workers managed to recover the union structures (first the grassroots, then the union) from the hands of the bureaucracy, turning it into a combative, class-struggle organisation.

The usual mechanisms of company recovery can be outlined as follows. First, the company is occupied to avoid the depletion of stocks of products and capital goods, to confront a lock-out or to claim payment of outstanding wages. It is then decided to put the plant into production as a way of covering the employer’s debts. For this, workers formed themselves into workers co-operatives and undertook a legal battle to be awarded the right to operate the company. Most of the time they initially obtained temporary rights of operation (2 years or more), but not the property rights. So they had to undertake further struggles to obtain the expropriation of the businesses and only then were they awarded the property. These struggles have come to last years, as in the case of the Zanon ceramics producer.

But this path of struggle was very long and hard. The context of popular mobilisation and the political crisis of bourgeois and state rule were the conditions that allowed these demands to be achieved. The government was greatly weakened and could not prevent the occupation of factories.

However, we should not believe that once the legal framework for the operating of factories has been obtained the problems have been overcome. You now have to face problems as profound as the others, but of a commercial nature. The recovered factories have often been empty. They had no stocks of prime materials or finished products. Often the bosses had already removed a large part of the machinery. In other cases, the fact of having been closed for months had caused damage to machinery. This happened in several glass or metal factories, where the ovens were ruined by remaining turned off. Moreover, due to the large debts, they had their supply channels and energy or water supplies cut off, and had lost important clients due to inactivity. For these companies access to credit was zero.

Nor should we forget that this is about companies that had folded due to their inability to compete in the capitalist market. Many of the companies had outdated technology and were undercapitalised. Thus, in most cases, the start of activity was based on a

strong dose of self-exploitation in order to begin the process of capitalisation. Often, workers had to work long hours without being able to make any withdrawal of money to buy new goods, and because they could not use their machines, they had to produce in an almost artisanal way.

Characteristics of Companies Without Bosses

According to a study by the collective of journalists from lavaca.org, there were 163 companies operating without bosses in 2007 [2]. The categories of businesses involved are varied, to say the least. Basically, there are both service companies (information technology, supermarkets, newspapers, schools and nursery schools, etc.) as well as productive enterprises (construction, auto parts, food, oil, plastic, glass, etc.). They are generally small and medium-sized enterprises, with the majority of companies having around 50 shareholders, although extremes range from 10 members in the case of the smallest to 500 in the largest. Thus we’re talking about the occupation of a minority fraction of Argentine companies.

As to the forms of organisation, all have taken the legal form of co-operatives. In this sense, the law governing co-operatives is very restrictive with regard to organisational aspects, as it imposes the existence of an administrative committee and a president. Presidents have almost full powers at their disposal, but have to give an account for the financial year to the shareholders at ordinary assemblies once a year. However, over and beyond this legal coverage, most co-operatives have indeed adopted other forms of organisation, that ensure the full participation of the associates in many different aspects of the life of the company.

On the other hand, in most cases an attempt is made to ensure that the distribution of profits is equal among all workers. In cases where there are wage differences they are much smaller than in other companies of the same sector.

In cases where companies without bosses have had to take on new partners, in many cases this was done among activists who had supported the occupation from the outset. This is the case of the FaSinPat ceramists, which in the early years of workers management experienced a strong growth in production, having to introduce new partners. Many of them were members of the Unemployed Workers Movement (MTD), which accompanied the workers during the occupation, in clashes with security forces and in the demonstrations demanding the expropriation of the plant.

One last point of note is that many of the recovered companies began to diversify their activities, seeking to go beyond being mere production centers for commodities. Thus, in many recovered companies there are also cultural centers, libraries, primary healthcare wards, schools, etc. This diversification was a very useful tactic in gaining support in the communities, as well as a way of showing gratitude for that support. In this way, the recovered companies experienced a major transformation, occupying themselves with different aspects of social life in the neighborhoods.

The Debate: Co-operatives or Workers’ Control?

An important debate of a strategic nature arose within the left and the movement of recovered companies. The problem to be solved was how these companies should be organised in the framework of the capitalist system. The most widespread solution has been the creation of co-operatives. This form, which has a precise legal character, has enabled these self-managed companies to operate legally and carry on their activities.

However, as we have already said, the Argentine State does interfere to quite an extent in the organisational life of the co-operatives. While during the initial struggle, all workers were on an equal footing, deciding how to move the struggle forward through assemblies, the law on co-operatives in Argentina sets in place an organisational mechanism that is based on representation, one which alienates the entire membership from the daily management of the company. This first obstacle was in fact overcome by many businesses without bosses, as they adopted the formal status of co-operative but gave themselves democratic management mechanisms.

But under capitalism, co-operatives must face more important problems. The process of competition between businesses compels the bosses to introduce changes in the forms of production, to increase work rates, incorporate machinery, fire workers, etc.. As you can see, production for the market conflicts with the interests of the workers. Not just with regard to what is produced, but also to how you work in order to produce. For this reason, workers from some recovered companies have developed another model of organisation known as “workers’ control.” This mode implies the control by all of the workers of the entire production process. It is accompanied by an organisational form that emanates from the grassroots assemblies of each section of the company, the direct and democratic election of representatives to councils or other organisms, the revocability of those mandated by the assembly, the permanent control between the worker base and its representatives, encouraging all stakeholders to be prepared to work as managers and the projection of the practice of control at the factory to the domain of society. This mode is also accompanied by the demand for the nationalisation of the companies [3].

However, the predominant form is the co-operative (over 90% of recovered enterprises), while 4.7% have taken the form of Corporation or Limited Liability Company and only 2.3%

with workers’ control.

Kirchnerism and the Reconstruction of Bourgeois Hegemony

The election of interim President Duhalde in early 2002 marked the beginning of the reconstruction of bourgeois rule following the crisis. The devaluation of the currency ended the 10-year convertibility policy, and the faction of the upper bourgeoisie that sought to create better conditions to compete in the global market imposed itself. The other faction of the bourgeoisie, which sought the adoption of the dollar and was represented mainly by financial capital and public services privatised during the nineties, was defeated.

All that remained was to discipline the people who were continuing to struggle, mobilise and organise themselves. For this, the government used a double tactic: on the one hand, repression, on the other, the nullification of social movements through co-optation or political annihilation. The repression was brutal and claimed the lives of two young people (Maximiliano Kosteki and Dario Santillan) from the piquetero movement on June 26, 2002, when unemployed workers launched a battle plan that sought to cut off the main accesses to the city of Buenos Aires.

While the repression caused the hasty call for Presidential elections, it also meant the beginning of the decline of the piquetero movement. The assemblies, which had been so active during the summer of 2002, began to languish. The lack of concrete objectives, the lack of experience and an economic situation that had begun to normalise, were some of the factors that led to this retreat.

It was Nestor Kirchner, who became president of the country on 25 May 2003, who had the task of rebuilding the State’s power. This former governor of a province in the far south of the country, was unknown to many. In a context of widespread rejection of political parties, he presented himself as being opposed to neoliberalism and to the human rights violations during the military dictatorship (1976-1983). Thanks also to his revolutionary political background as a militant in the seventies, he drew strong popular support, particularly from the human rights organisations (including the Mothers and Grandmothers of Plaza de Mayo), the social movements, intellectuals, etc.

The recovery in the economy (in recent years, the economy has grown at a rate of between 7% and 9% annually), the creation of new jobs – most of which are of a precarious nature with long working hours – and the implementation of social plans against unemployment and poverty, have also served to quench much of the rebelliousness of the days of 2001. Little remains of that movement that, banging pots and confronting the police, sang “all of them must go, not even one must remain!” in the streets.

This does not mean to say that popular mobilisation has been exhausted. But it has been transformed. The vast majority now takes place through institutional channels, and although the bipartisan system that was characteristic of Argentina has not yet been rebuilt, the political parties of the regime have regained much of their importance. On the other hand, most of the piquetero organisations have aligned with the government. Those that did not do so have lost much of their influence and presence in national politics. These organisations depend on State resources in order to function, and the government, once again strong, only gives these funds to movements which share common interests with it.

The International Crisis of 2008 and New Occupations

In mid-2008, in this political context of the strengthening of the state and its government, the international financial crisis was produced. At the time it was responsible for new business failures, though they were not as widespread as before. The State had sufficient reserves to face the economic crisis. Thus, in 2009 there was a reduction in economic growth, but not a recession.

Some companies went bankrupt, while others were declared to be in a critical situation. The workers occupied these plants but this time, not only did the government not allow  company recoveries to be made, it actually bailed companies out by means of loans or intervened in order to reorganise their finances and then return them to their owners. This is what happened with the larger companies, while some small companies declared bankruptcy (in many cases fraudulently, deliberately caused by the owners) and their workers occupied them with the intention of putting them to work without a boss. In these cases, the recovery of businesses was more difficult. If in 2002-2003 the recoveries had to face a weakened government, busy trying to regain its authority, and the judicial power seemed overwhelmed by popular mobilisation, they now faced a strengthened enemy in conditions of greater isolation. Moreover, the possibility of getting new jobs meant that many workers did not stay in the struggle. The strength of the State allowed the bourgeoisie to better control the situation, preventing it from spreading.

Conclusions: An Anarchist Assessment of Companies Without Bosses

Much has been written about the factory occupations in Argentina in 2001-2003. A great many anti-capitalist militants all over the world focused on this experience in their search for a path towards a socialist society. However, ten years after the rebellion of 2001, we believe it is necessary to conduct a deeper assessment of the experience.

In the first place, we would like to summarise some aspects that we believe are central when analysing the process. They can briefly be summarised as follows:

  • The occupations and recoveries are expressions of the class struggle between the bourgeoisie and the proletariat. Furthermore, they are an integral part of the Argentine labor movement, they are produced by workers or unemployed workers and they are a return to long-held fighting tactics.
  • The particular features of these processes are not the result of being outside the labor movement and the class struggle, but of the different stages in Argentina’s economic and social development over recent decades. The workers’ response arose as a response to the policies of the bourgeoisie.
  • The occupations and recoveries were not the work of communist or anarchist political groups (minorities). Indeed, they were not planned by anyone. They are legitimate expressions of class struggle. The defeat and division of the working class and its bureaucratic leaderships have often led to the occupations and recoveries being seen as a juvenile phenomenon or of leftist parties, as these were their main defenders in the absence of an organised labor movement.

In this sense, we believe that in assessing the experience it is possible for us to draw lessons for other regions and times.

We cannot fail, therefore, to highlight the most salient points of the experience. While we must keep in mind that these experiences were defensive in nature and were mainly focused on small and medium businesses, with low levels of technology, and for that reason vulnerable to capitalist competition, they are valuable experiences of self-management that demonstrate the potential to produce without bosses. The recovered companies were able to demonstrate the possibility of self-management to the majority of the population. The existence of hundreds of companies working without bosses, where it is the workers who decide the course of action in production, expanding their concerns to the other problems of life in their communities. In this sense, the example of Zanon perhaps best demonstrates the possibilities of self-management, of production guided by social interest, not private gain. Furthermore, between 2002 and 2005, the company managed to greatly increase production and in the same period doubled the number of jobs at the plant. Perhaps more importantly, in the same period, without the employer’s monitoring and pressure, work “accidents” fell dramatically. Under employer management there were 300 accidents per year, whereas in the period 2002-2005 there were only 33, all of a minor nature, without recording a single death [4] – evidently a clear improvement in working conditions.

However, we should also examine the limits that capitalism imposes on recovered enterprises. To do this, we must clarify what our objectives are as anarchists and what we understand by self-management.

As we noted above, most of these companies had to return to production under very adverse conditions: a lack of supplies and access to credit, obsolescent technology, marketing chains destroyed. They therefore had to base their production on high rates of worker self-exploitation. Many of the recovered companies, desperate for access to credit and subsidies, ended up handing over management of the business to people with political ties, who then ended up calling in a new boss to manage the companies. Thus, many workers renounced self-management in order to keep their jobs. On the other hand, the need to maintain competitiveness led to the workers in many of these companies having lower incomes to those of workers performing the same tasks in private companies. Zanon itself (perhaps one of the most typical companies and that which has often achieved most) has been facing economic difficulties in recent years. Unlike its private competitors, they can not count on any kind of subsidy for the energy they consume, which means their production costs are higher.

That is why we should ask ourselves about the feasibility of self-management on small scale. If it is possible to generate islands of self-management within the framework of the capitalist system or whether capitalism has mechanisms that can neutralise these experiences. The reality of many recovered companies is that in reality they are self-managing misery: economic sectors that the capitalist system has rejected as non-viable. For this reason, we should aim to self-manage the totality of production and of social life. And for this it is necessary to expropriate the bourgeoisie on a massive scale and build a libertarian, socialist society. There can be no oasis of socialism in the framework of capitalist society and you cannot built it outside the system and live there: you have to destroy the system. No coexistence is possible. As they say in Zanon: “If you do not make the revolution, Zanon will be left on its own and will be destroyed.”

In the process of the occupation of factories, anarchists have a lot to contribute as well as to learn. We must contribute our political perspective while providing our moral and militant support and our technical and economic assistance. Always looking for the solution to the conflict in the interests of those involved: preserving work. As part of that struggle advances in consciousness can be achieved. Advances that may accumulate in the construction of a class-struggle labor movement if these experiences remain linked to workers’ organisations, participating in their struggles side by side.


Footnotes:

  1. The leaderlessness came as the vice president had resigned after having been reported for paying bribes in parliament before the treatment of a labour flexibility law.
  2. Colectivo lavaca, Sin Patrón, Buenos Aires, 2007. More information (in Spanish) at: http://www.lavaca.org.
  3. Aiziczon, Fernando, “Teoría y práctica del Control Obrero: el caso de Cerámica Zanón, Neuquén, 2002-2005”; in Revista Herramientas.
  4. Aiziczin, Fernando, op. cit.

* This article was written specifically for Zabalaza: A Journal of Southern African Revolutionary Anarchism by Red Libertaria de Buenos Aires, a specific anarchist political organisation based in Buenos Aires, Argentina.

Translation: Jonathan Payn (ZACF)

Revision: Nestor McNab

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