Analysis of pitfalls in Argentina for Occupied factories

From workers’ control to workers’ rule
Submitted on 16 July, 2006

Argentina's 2001 economic collapse saw a wave of working-class struggles against Fernando de la Rua’s right-wing government and neoliberal IMF-sponsored economics. During these struggles, some 200 workplaces were occupied and taken over by their workers. Does this “recovered factories” movement pose any sort of threat to capitalism? David Broder, who visited the occupied Zanon ceramics factory in April, looks at the issues.


NAOMI Klein has described these “recuperated factories” as “the concrete economic alternative to neoliberalism”. It is a great ideological step for workers to ignore property rights for the sake of defending their jobs - all the more so because these workers have proven that you don’t need a boss to be able to run a factory.

But the worker-controlled businesses, whether factories, hotels or hospitals, do face real problems - legal threats, capitalist competition and the failure of the movement to spread have left them in a weak, isolated position. What is needed is for workers everywhere to take control of the means of production - but unfortunately the Argentinian Left failed to give effective leadership to the struggles, leading the workers' control movement into a dead end.

The crisis of 1999-2003 had its roots in the early 1990s' neoliberal reforms made by President Carlos Menem, who curbed an earlier hyperinflation problem with a system linking the value of the Argentinian currency (the peso) to the dollar. This was combined with the privatisation of telephones, water and gas, attacks on workers' rights, and huge foreign loans. Both this IMF-backed “liberalisation” and the cheap imports which dollar-peso parity brought on seriously undermined Argentina's industrial production - the artificially strong peso hurt the ability of Argentina to export goods, while foreign companies had an increasingly prominent share of investment.

This all went wrong when the investment from abroad started to dry up - and in 1997, the dollar was revalued, further undermining Argentinian exports.

By 1999, the economy had actually started to shrink, and the government started to issue bonds to make up for non-existent cash. This sparked an evacuation of foreign investment. By 2001, it had fallen into total disarray - a ‘run on the banks’ was stopped by a compulsory 12-month “freezing” of all bank accounts, bringing out middle-class Argentinians as well as workers onto the streets. With mass rallies on the streets of Buenos Aires, President de la Rua fled from the presidential palace. Within two weeks, three of his successors did the same.

Along with the political crisis, the collapse in the peso's value when taken off parity with the dollar saw a wave of bankruptcies. Unemployment rose to 25% and by May 2003 55% of the population were under the poverty line - up from 35% in May 2001. Under this prolonged state of crisis, many workers with no hope of getting their jobs back decided to take over their places of work and run them by themselves. Of course, not in all cases did they survive - lack of capital and a shrinking market made it impossible for many businesses to go on, even if parasitical bosses had been got rid of.

The movement included all sorts of workplaces - not just factories like Zanon (featured in Naomi Klein's film The Take) and Brukman, but even health clinics and the Hotel Bauen. Workers in all industries fought against private property rights - even mounting battles with the police - the courts and hostile trade union bureaucracies to maintain their control.

Even now, the struggle is very much ongoing - Zanon’s 480 workers only have a one-year temporary mandate to run their ceramics plant, while the Brukman textile workers have no rights to the building in which they work. In both cases the demand is “nationalisation under workers' control” - state support and legal stability are vital for the workers to fend off bankruptcy. On 5 July Zanon workers presented a 20,000-name petition to the Neuquen provincial government so that it passes a “law of expropriation” guaranteeing workers' legal control.

No socialist can fail to be excited by these struggles - when you talk to workers in occupied factories you see a deep class-consciousness, the result of grassroots workers’ struggle and the putting into practise of a system of real democratic control. The factory which used to be named after Luigi Zanon is now named “FaSinPat”, an abbreviation of “factory without bosses”. It produces a monthly paper, Nuestra Lucha (Our Struggle) which links the struggle of Zanon workers with all class conflict - Zanon workers will readily “take the morning off” to support a strike, such as the recent lecturers' dispute in Neuquen. This is not simply a co-operative - there is no hierarchy, all the workers get the same basic wage, and all decisions are taken by democratic assemblies. It even escapes from the capitalist commodification of their product - they distribute tiles for free to local schools and hospitals and occupied workplaces such as Hotel Bauen, and workers have even built a new clinic in their city. They see the social role of their labour.

But only 15,000 workers in a country of almost 40 million have followed this example - despite the fact 25% were unemployed, the currency lost 80% of its value and GDP shrank by as much as 10% a year. The government had no stability, three presidents unable to get a grip on the economy for more than a few days.

Thousands of factories lay idle as the bosses abandoned them. As the situationists used to say, the real question is not “why does [the starving worker] steal?” but rather “why does he not steal?”. Hegemony of bourgeois ideas or dominance of the belief in “property rights” does not seem to adequately explain why struggle didn't spread during these years of strife - so what was wrong with the movement's organization?


JULIáN Rebon’s Disobeying Unemployment, a statistical survey of occupied workplaces, suggests that 47% of these workers were encouraged to seize back their jobs by the MNER (National Movement of Recuperated Enterprises).

This is a co-ordinating body which looks to link up different worker-controlled businesses - it says “occupy, resist, produce, within or outside the law”, and includes the Zanon FaSinPat factory, whose struggle has been the most high-profile and radical. The Trotskyist MST group even ran an affiliated workplace. Linking together different struggles could mean mutual support against hostile trade union bureaucracies and a right-wing government.

Unfortunately, the movement was broken in 2003 with the split of Catholic lawyer Luis Caro's MNFRT (National Movement of Factories Recuperated by Workers).

This project, linked to the Argentinian Communist Party, claimed to be “apolitical” and protested at the “radicalisation” of the MNER! In fact, the MNFRT is merely right-wing, entirely under the thumb of Caro, who earned the anger of the most militant Brukman workers when he campaigned for Rico, a Buenos Aires provincial candidate who supported the 1976-83 military rgime. Caro's programme is always one of negotiations with the government, not extending the struggle in case the authorities are alienated. He tells Brukman workers not to seize control of the rest of the building in which their factory is located - he intervenes in democratic decision making, and the workers are economically jeopardized for the sake of 'moderation'. The workers who showed us the factory said that only about a third of workers are politicised enough to stand up to him at all - he has become a “leader”.

A third federation of occupied factories, FENCOOTRA, is so lacking in politics relating to the events of 1999-2003 that it does not distinguish between cooperatives and illegally expropriated factories controlled by democratic assemblies. Their affiliates in particular often fail to even give all workers the same wages - they appear to be on the road of degeneration, either into cooperativism or into bankruptcy.


ONLY by keeping up the level of struggle and repeating the recent wave of expropriations can the movement extend, bringing more workers under its wing and posing a more effective ideological challenge to capitalism.

Often you hear in the movement of occupied workplaces that “all we want to do is work”. It is great that workers are prepared to breach property rights to ensure this goal, while it also shows the “reasonability” of their demands. But the slogan also has an enfeebling character. Caro says that “we don't need any ideological or political consequences” - yet the very survival of the worker-controlled businesses relies on the struggle broadening and assuming a political character.

Bourgeois governments will undoubtedly try and reverse gains made during capitalist crises by the working class - the representatives of the ruling class will want to crush an ideological threat which surfaced when capitalist regimes were in turmoil. 15,000-odd workers cannot easily resist this alone.

The 'open spaces' taken when the economy was self-destructing are not easy for workers to maintain by their own strength now. Brukman’s achievement of legal status in Congress relied on the support of very conservative parliamentarians, not just on being able to fend off the police.

The MNER and MNFRT have no roots in the working-class as a whole, so cannot serve as the basis for a challenge to the existing order. But the problem is not only that these radicalised workers cannot overthrow capitalism by themselves - it is that even their limited conquests will not survive unless the struggle is broadened.

The MNER demand of “nationalisation under workers' control” shows an admirable recognition that they cannot exist as an island in the sea of capital - they need support from the state. But why would a bourgeois state want to guarantee their survival, particularly in the long term? Kindness? The goal is surely not simply to establish dual power under capitalist society, giving them slight relief from their exploitation - but that all workers control their workplaces democratically, the ideal of their movement becoming the ethos of the whole of society! This won't happen unless the working-class assumes state power, neutralising the threat of bourgeois state power and “property rights” to expropriated businesses.

During the biggest wave of worker occupations, the unemployed workers movement (piqueteros) played a big role in supporting workers' demonstrations, setting up anti-government blockades and even setting up co-operative barter markets. The piqueteros’ Movement of Unemployed Workers has historically seen Trotskyist groups like the PO and PTS in command - yet it has also been co-opted by Peronist regional administrations, including that of current president Nestor Kirchner.

Socialist Worker says that “trade unions prepared to collaborate with the [bosses] are surplus to requirements” - but without the Left fighting within, democratising and taking leadership of the unions which organize Argentinian workers, however corrupt and Peronist they are now, how can the working-class as a whole be mobilsed to defend occupied factories?

It is anarchist and utopian just to hope that millions of workers will simply pick up the baton of the Zanon workers and spontaneously expropriate their bosses. The movement has long stopped growing - the peak was in 2002. Without political organization workers will not be able to take on the organs of bourgeois state/legal power and fight for a socialist state - if the bourgeoisie is left in power, a disorganised workers' movement will be in no position to defend the worker-controlled factories. With increasing political stability and economic recovery, the prospects for building this socialist alternative look weak.

A recent conference in Venezuela to link up worker-controlled factories across Latin America provided no answers. Venezuelan co-management and partial worker participation are dead ends for the working class - workers have no real power, but provide a ‘proletarian’ cover for state-bureaucratic control.

The real solution is grassroots control of trade unions, an effective political challenge to the bourgeois state and the extension of worker expropriations of factories. The struggles of the past few years did not really push Argentina into a “pre-revolutionary stage” - the working-class never had anything like the kind of organisation to win a workers' government. Although able to profit from the capitalist crisis of 1999-2003, it is by no means clear that working-class organization has been built on the back of these struggles in order to defend or extend the movement.

Working class power must exist at the national and ultimately international level, or it will not exist for long.