Argentina’s Worker-Run Factories: What Next? (2005)

From the December 2005 issue of the Socialist Standard

“cooperatives will never be able to outcompete ordinary capitalist enterprises”

In November anti-capitalists were urged, via email, to send a letter of protest to the President of Argentina about the threat to evict the workers cooperative, set up by former employees, that took over the bankrupt Bauen Hotel in the centre of Buenos Aires two years ago and has been running it ever since.  When in December 2001 the Argentine economy and currency began a melt-down many small and medium-sized enterprises went bankrupt or were simply abandoned by their owners. Faced with joining the already huge and growing army of unemployed, workers in some of these businesses took matters into their own hands. They occupied the workplace and resumed production on their own account.

At the time some saw this as the beginning of a social revolution in which the  workers take over the factories and organise production without the bosses. A more sober assessment was that this was workers, in a crisis situation, reacting in a pragmatic fashion to try to ensure that they had some source of income to maintain themselves and their families. But it did at least show, to any who might not have realised it, that workers can organise production without bosses.

This was not really a mass movement, but it currently involves some 200 enterprises employing in total a maximum of 10,000 people, i.e. the average “recuperated enterprise” as they call themselves (recuperated, that is, from bosses regarded as undeserving or even thieving) is one employing about 50 workers. And 10,000 less unemployed is a drop in the ocean compared with the total number of unemployed in Argentina which, even today, is still over 2 million.

The authorities, not wishing to aggravate an already disastrous economic and financial crisis, accepted this situation as a fait accompli and passed a law allowing workers cooperatives to play a part in rescuing failed businesses. Under this law, local and regional authorities were empowered to compulsorily acquire a failed business and authorise it to be run by a workers cooperative for up to two years pending a settlement with other creditors (the workers themselves were often also creditors in respect of unpaid wages) or the former owners. Some recuperated enterprises went down this road. Others negotiated a lease with the former owners, which of course involved paying them a share of any profits. Others continued to operate outside the law.

The two years are now coming up, and with the Argentine economy having recovered a little and the social and political situation stabilised, the authorities are beginning to enforce the law, which gives property rights over a business either to the former owners or their creditors. A number of businesses taken over by the workers in 2002 have already been recuperated back from them. Now, it appears, it is the turn of the Bauen Hotel. 

Evicting the bosses and organising production without them is one thing; escaping from the economic laws of the market is another – as, within capitalism, it is not just a question of organising production, but also of selling what is produced. Because of their precarious legal position, the workers cooperatives running a recuperated enterprise have been at a competitive disadvantage. They can’t get proper bank loans and, because ordinary capitalist businesses are not too keen to deal with them, often have to sell to them via a go-between (who naturally demands a share of the profits).

What the workers cooperatives, some of which  are organised in a Movimento Nacional de Empresas Recuperadas, are now demanding is a stable legal framework; basically, that the state or regional or local authorities compulsorily purchase the business they are running and legally hand it over to them. Thus, the petition to the President of Argentina on behalf of the Bauen Hotel cooperative calls upon “the Argentinian government and its legislators to act  immediately to . . . pass a law of definitive expropriation in favour of the Workplace cooperative B.A.U.E.N.”

Apart from wanting to secure their own position, the broader vision of those behind the Bauen cooperative seems to be an economy based on a network of worker-owned businesses. Even anarchists in Argentina, who might be expected to look favourably on this, have criticised it:

“Cooperativism does not provide a real solution to the workers’ situation. It is incapable of providing an answer in the interests of all workers. At no time does it question the capitalist production relationships – it questions only superficial features (monopolies, competition, etc.). Even less can a network of cooperatives create a parallel subsystem to capitalism” (www.zabalaza.net/phorum/read.php?f=2&i=156&t=156).

Yes, cooperatives can only ever involve a minority of workers, and the more they are integrated into the capitalist economy and its profit-seeking, the more their members will have to discipline and pressurise themselves in the way the old bosses did – what used to be known as “self-managed exploitation”.

The Trotskyists have another solution. According to an article in the October Le Monde Diplomatique:

“During 2002 there was a lively debate on whether revived businesses should get involved in capitalist markets. A Trotskyist minority called for nationalisation under worker control. It took over four businesses, including Brukman, a garment factory in Buenos Aires, and Zenon, a tile manufacturer in Neuquén. The workers involved saw the rescue as a first step towards a socialist system in which the state would control economic planning. The hard-left parties associated with them did not believe that cooperatives could survive in a capitalist market” (mondediplo.com/2005/10/13survey).

It is certainly true that cooperatives will never be able to outcompete ordinary capitalist enterprises, but the Trotskyists’ alternative of the state subsidising the recuperated enterprises, without requiring them to compete in the marketplace, just to provide jobs is even more unrealistic – and has nothing to do with socialism. (It is more than likely, however, that this is just another of the Trotskyists’ dishonest “transitional demands” which they know can’t be achieved under capitalism but offered as bait to obtain a following for their vanguard party.)

The fact is that there is no way out for workers within the capitalist system. Not cooperatives, not reforms, not trade unions. At most these can only make their situation a little less unbearable. As long as capitalism lasts workers will have to find a source of money one way or another and so will always be in a dependent and precarious position. 

But a number of lessons can be drawn from the recuperated enterprises movement in Argentina.

Firstly, that built into capitalism is a class struggle between those who own the means of wealth production and those who don’t and who are therefore forced by economic necessity to sell their ability to work to those who do. This class struggle is not just over the price and conditions of sale of the commodity workers are selling.

Ultimately, it’s about control over the means of production.  If, as happened in Argentina after the economic melt-down of December 2001, capitalists abandon their factories or, as happened in Russia in 1917, Spain in 1936, and Hungary in 1956, the capitalist state is temporarily incapable of protecting capitalist property, then the workers more or less spontaneously take over their workplaces and keep production going.

Workers are not going to let themselves starve: if the means of production are there, and there’s no state to stop them using them, they’ll go ahead and use them, even if they have no revolutionary pretensions. However, as soon as the state has got its act together again, then it is in a position to confront the workers and re-impose access to the means of production only on its terms.

Which leads to the second lesson: the importance of who controls the state. At the moment, in Argentina as elsewhere, this is in the hands of people favourable to the continuation of capitalism, itself a reflection of the fact that most workers too don’t see any alternative to capitalism. The state, therefore, upholds legal private property rights. The importance of political power is in fact fully recognised by the recuperated enterprises movement.  This is why they are calling for the law on property rights to be changed so as to recognise the property rights of the workers cooperatives which are running recuperated enterprises; which will only happen if they can get the elected law-makers to do so, either by pressuring them from outside or by electing ones  favourable to a change in the law. This is why, too, they want people to petition the President of Argentina.

The end of capitalism can only come as a result of a consciously socialist political movement winning control of political power with a view to abolishing all capitalist property rights and ushering in the common ownership and democratic control of the means of production. The preconditions for ending capitalism are a majority socialist consciousness and workers democratically self-organised in a large-scale socialist party. Neither of which, unfortunately, existed in Argentina.

Which is why the recuperated enterprises movement there has proved a dead-end and why the workers cooperatives it gave rise to are now forced to compromise and integrate themselves into capitalism to survive.

Adam Buick

Cooking the Books: Pensioned Off (2005)

The Cooking the Books column from the December 2005 issue of the Socialist Standard

According to the government and the capitalist media, there is a “pensions crisis” in that, given the growing proportion of retired people in the population, the capitalist class is not going to be able to afford to maintain pensioners at the same level as existing ones. Therefore, the argument goes, people must set aside more of their current income to purchase future pension rights. And they must retire later.

It seems to make sense. If there are more retired people compared to those at work, surely that must mean that those at work have to work more and/or consume less? This would be true but for one thing: it ignores the point that over time productivity increases, even if only fairly slowly. This means that more wealth can be produced by a workforce of the same size, out of which, in theory, both current wages and future pensions can be maintained at the same level as today.

“In theory” because the fact that this could happen is no guarantee that it will. But it does show that the capitalist class can’t plead poverty here. They can afford to maintain pensions at current levels. That this is so was confirmed in a report, The Ageing Population, Pensions and Wealth Creation, released on 31 October by a pro-business think-tank, Tomorrow’s Company. According to the BBC News of that day:

“One of the report’s authors Philip Sadler said there was no ‘ageing crisis’. ‘As a society we can afford to grow old,’ he said. ‘Rising productivity will outweigh any negative influence on living standards from an ageing population.'”

The report asked “how can a working population that is expected to remain around 27 to 28 million create sufficient wealth over the next 35 years to support an additional five million pensioners?” and answers:

“The main factor affecting our ability to afford an ageing population without the erosion of living standards is the impact of rising productivity. More than anything else, rising productivity explains the paradox that ageing societies have simultaneously become wealthier. At a mere 1.75 per  cent productivity growth per year, by 2045, an average British worker will be about twice as productive as today. In other words, a doubling of new value and resources being produced while the number and share of over 64s grows by less than 50 per cent.” 

What is interesting in a report from a pro-business lobby is that it acknowledges that it is the “working population” who are the “wealth creators” rather than the usual guff we get from such groups about entrepreneurs being wealth creators. Wealth can only be created by human beings applying their mental and physical energies to materials that originally came from nature.

But they do write as if there was a direct transfer from the “working population” to the pensioners. In fact, this only happens indirectly, as the wealth is taken from its direct producers, the workers, by the capitalist class and then transferred by them, via the state and pension funds, to pensioners. So pensions come out of profits, not wages. Which is why how to pay for pensions is a problem for the capitalist class. However they solve it, what we get will never be enough to compensate for a lifetime of exploitation.

Monkey Business (2005)

From the December 2005 issue of the Socialist Standard

According to the New Scientist (5 November) some monkeys can be taught to be captivated by capitalism. The research is gleefully popularised in the Daily Mail (3 November). The reports don't actually talk about capitalism but the message is clear — the money system is not only embedded in human nature, it also goes back to monkey nature.

Apparently scientists at Yale University conducted experiments on capuchin monkeys showing that they can be taught how to use money and even master the art of shopping for bargains. They learned to use silver discs as coins to buy pieces of apple and cucumber from the researchers. When the apple slices were made "cheaper" than cucumber — meaning more apple was offered for the same amount of money — they opted for the better-value apple.

The monkeys then resorted to underhand tactics to hold on to their cash — by hiding the real coins and offering up "counterfeit" coins made of cucumber. They also showed a gambling streak. enjoying a game which enabled them to win or lose prized grapes on the flip of a coin.

Fascinating stuff. But the New Scientist report didn't tell the whole story. Some of the more intelligent monkeys went on to figure that they were living in an animal class society The human experimenters possessed all the means of production and distribution: the laboratory, the stockpile of silver discs, the food rations for the workers. All the monkey-workers could do was earn a precarious living by doing various tricks to please their masters in return for food portions.

So the class-conscious monkeys got together and decided the only way to achieve their emancipation was to mount a revolution. They conveyed to the researchers where they could put their silver discs. Instead of access to the means of life only by earning discs, they decided to build a new and classless animal society in which all monkeys and researchers would stand equal in regard to the means of wealth.

The experimenters didn't like the prospect of being dispossessed of their wealth and privilege. They threatened to use armed force to put down the revolution. Fortunately this turned out to be an idle threat. Although a few lumpen-monkeys briefly took the side of the experimenters, the vast majority saw that the new system of production for use and free access was in the best interests of all animal-kind.

Stan Parker

Don't take me to your leader (2005)

From the December 2005 issue of the Socialist Standard

The subject of leadership has been much in the news recently. The Labour Party conference breathed fresh life into the ailing story of how long Tweedleblair will hang on to the top job, thus denying Tweedlebrown the juicy fruits of office. The Conservatives, trying hard to find a leader who will last more than 15 minutes, have engaged in a drawn-out beauty contest long on candidates but short on beauty. Even leaders need their leaders — George Dubya is reported to have said that he was instructed by God to invade Iraq.

The socialist view on leadership is quite simple and straightforward. We don't need leaders and can do very well without them. Socialists are neither leaders nor followers — we are participants in the socialist movement and will be social equals in a socialist society.

That is not to say that some of the qualities sometimes associated with leadership will not be relevant in socialism. Today we rightly reject the idea that the Socialist Party has a leader, but it does have a General Secretary to carry out certain democratic functions. Similarly, we don't have leading writers or leading speakers, but we do have an editorial board and a procedure to test members who want to speak publicly on behalf of the Party.

Leadership is not to be confused with exercising initiative. The Socialist Party as an organisation, and socialism as a future society, both need people who will start something or improve on what exists. Thus the fresh design and layout of the Socialist Standard since the beginning of this year was the result of a few members using their initiative, responding to what they saw as a need and supported democratically by the Party as a whole. The same applies to Capitalism and Other Kids' Stuff, the first of what is intended as a number of socialist DVDs.

For socialism celebrities are out, while developing everyone's potential is in. If someone paints a number of acclaimed pictures, gives excellent theatrical performances, makes an outstanding contribution to a particular branch of science, they will no doubt be recognised — but they won't be worshipped as demi-gods.

Stan Parker

Cooking the Books: Who needs the rich? (2005)

The Cooking the Books column from the December 2005 issue of the Socialist Standard

To be one of the idle rich these days £1 million is not enough, according to the private bank, Coutts & Co., who specialise in dealing with the accounts of such people. The “super-wealthy”, said Coutts’ chief executive Sarah Davies, was “a person who didn’t have to work if they chose not to, and who was able to lead a life of luxury” (Times, 18 October).

Twenty-five years ago £1 million would have allowed you to lead a life of luxury, defined as having a 5-bedroom house with two staff, an apartment and a yacht in the south of France, eating out twice a week in a posh restaurant, and going on three two-week holidays to a luxury destination. To lead such a life today you need, apparently, some £3 million.

Nobody could amass that amount by working. Those that do possess such a fortune will have got it either by inheriting it or by wheeling and dealing in the City or in property speculation, as a look at the Sunday Times annual Rich List confirms. In other words, they can only lead their life of luxury on the proceeds of the exploitation of those who do work. They are not the only ones doing this since the “fat cats” at the top of private and state industry who pay themselves bloated salaries and bonuses are at it too.

A million pounds is still a lot of money of course and would still allow a person not to work if they chose not to, though not the sort of life of luxury just described; rather not much above the average of the rest of us.

But it’s a measure of how non-rich most people are – and so have to go out onto the labour market to find an employer – that there are only 425,000 millionaires in Britain, which is under 1 percent of the adult population.

It couldn’t be otherwise of course, since the basis of capitalism is the wages system and, to work, the wages system requires that most people are forced by economic necessity to sell their mental and physical energies as the means of obtaining money to buy the things they need to live.

One old socialist definition of a capitalist was a person who has sufficient wealth and unearned income from it to avoid having to sell their ability to work. In other words, someone who plays no part in producing the wealth of society but lives off the backs of those who do. The pro-capitalist economist Keynes called such people “rentiers” and looked forward to their gradual “euthanasia”.

In Russia after 1917 they actually did this. The idle rich were dispossessed without compensation and went into exile. Some people thought that this meant the abolition of capitalism. But it didn’t: capitalism continued without them, but run by the state. The lesson of this was that if you abolish the super-wealthy and the idle rich you don’t necessarily abolish capitalism.

Capitalism is essentially an economic system (of capital accumulation out of the surplus-value obtained by exploiting wage- labour). It is this impersonal economic mechanism that wage and salary workers are up against and which involves their exploitation irrespective of who manages the system or benefits from it (whether private capitalists or those who directly control the state).

It is this system, not the idle rich as such, who are only a by-product of it, that socialists are out to abolish.

Greasy Pole: Private (?) Lives (2005)

The Greasy Pole column from the December 2005 issue of the Socialist Standard

Political nerds will have found some excitement in the Tories’ leadership election, if only because of the possibility that it would repeat the mistakes of the recent past – like John Major, William Hague and Iain Duncan Smith. Spending so many years in opposition has caused the Tory membership to ask the unbearable question of whether they are any longer the natural party of government – a nightmare from which, many of them have been hoping, the new boy David Cameron will awaken them. Perhaps Cameron’s rise in the Conservative Party announces that they have moved away from the Thatcherite style, as the favourite of estate agents and car salesmen. For Cameron, like Carrington, Whitelaw and Hurd before him, is a toff; he is related to the 6th Duke of Somerset, the 7th. Earl of Denbigh, the 2nd Earl of Shrewsbury and others of that ilk.

With so much blue blood in his veins it was entirely natural that he should go to Eton and then to Oxford, to Brasenose College where they expect everyone to be touched by “the tranquil consciousness of an effortless superiority” (which is not meant to include Jeffrey Archer, who was an undergraduate there). Perhaps being superior led Cameron to join the Bullingdon, a club of upper class yobs whose only reason for existence is to drink and eat to excess in some defenceless restaurant before they smash the place up. As might be expected, Boris Johnson was in the Bullingdon; recalling an evening of their typical revelry, he refers to his fellow members as a “proud phalanx of tailcoated twits”. The idea is that after the Bullingdon had had their fun they would evade being arrested by offering to pay generously for the damage – a tactic denied to working class rowdies causing problems in their local Tandoori, who have to pay for the damage as well as being arrested, fined or even sent into custody. There is no record of how active Cameron was in the Bullingdon; in any case he obviously devoted some time to work as he emerged with a first class degree in something other than Criminal Damage, which was his passport into a job in the Conservative Research Department.

Ascent

From there he ascended the greasy pole – although this was not always smoothly. He was a “special adviser” to Chancellor of the Exchequer Norman Lamont when the financial strategy of the Major government lay in ruins and Lamont had to make his wretched announcement that British capitalism was getting out of the ERM. Then he worked at the Home Office under Michael Howard who became memorable, not as an effective Home Secretary but for his regular defeats by the judges and for the memory of his minister for prisons, Anne Widdecombe, that there was “something of the night” about him.

After a spell in what he called “industry” – the TV company Carlton Communications – and after the obligatory contest in a safe Labour Seat, in 2001 Cameron was selected to fight Witney for the Tories and at the election romped home. He was then closely involved in writing the Tory manifesto for the 2005 election, which was widely blamed for their third defeat through its concentration on the many negatives of Labour rule without persuading the voters that the Tories would be noticeably different. On the now-sensitive matter of drugs that manifesto declared: We will stop sending mixed messages on drugs by reversing Labour’s re-classification of cannabis as a less serious drug, changing it from Class C back to Class B.

Well times have changed and with them Cameron’s ideas; he now refuses to commit himself about re-grading cannabis and his aides say he prefers a full debate of the issue involving academics and doctors.

Privacy

Of course drugs are a delicate matter for Cameron, made even more so by his refusal to give straight answers to questions about him using them in the past.” I did a lot of things before I came into politics that I shouldn’t have done” was one of his evasions. Another was “I had a normal university experience…We’re allowed to have had a private life before politics in which we made mistakes and we do things that we should not and we are all humans and we err and stray”. That may have convinced the more gullible among the Tory party but it is not good enough. Using any controlled drug is breaking the laws which Cameron and the other MPs have laid down. He may try to avoid the matter by calling it part of his “private life”, which in any case happened some time ago, but this simply does not answer the question.

All over the country, every day, members of the working class are arraigned in the courts for using controlled drugs, or stealing, or breaking other laws made by the likes of Cameron. They are not allowed to excuse their offences by referring to them as part of their “private life” and as an outcome of their being human and so liable to err and stray.

It is also noticeable that Cameron is capable of taking refuge in the concept of a “private life” only when it suits him. For example he makes a lot of the fact that he has a sadly disabled son, who suffers from epilepsy and cerebral palsy and who is unlikely ever to be able to walk or talk. Cameron has made references to this child in terms which his listeners have found deeply moving, so that none of them ever asked whether a disabled child was not essentially a “private” matter not to be used to boost a politician’s desired image as a caring father, a man fit to be a parent to the entire nation. Then there was the matter of Cameron’s pregnant wife and of the TV publicised act of him fondly placing his hand on her anatomical bump while the audience swooned and the votes in favour of him as party leader mounted up.

Arm Twisting

It says something about the Tories’ panic and how desperate they are to erase bad memories, that they should promote an MP as inexperienced (although practised in cynicism) as Cameron as the man to become prime minister in a few years’ time. It may also say something about arm twisting and bullying behind closed doors, about cynical deals done in elegant Notting Hill houses and discreet restaurants. Among all this Cameron strives to persuade us that he is a new style of politician – candid, trustworthy, sincere – even if this is just like Tony Blair and his “I’m a pretty honest kinda guy”. But Cameron’s character and his motivation have been shown up in his campaign for the leadership, in the attempt to stifle inconvenient memories and the fashioning and selective exposure of his “private life” while asserting a right to protect it. A Cameron premiership would have nothing different to offer from all those wretched failures in the past. The most we can expect is that his wife, who is said to be a talented designer, does something to spruce up the wallpaper in Number Ten.

Ivan

Clarification: 

In the November Greasy Pole column we stated that the men who threw Walter Wolfgang out of the Labour conference were “beefy, enthusiastically respectful, Labour Party members”. This was spin put on the incident at first – that the stewards were party members, so amateurs, so if they went a bit over the top it was understandable… It quickly came to light that in fact they were hired “stewards” from some “security” company (perhaps with a target for the number of people ejected?).