Argentina’s Worker-Run Factories: What Next?

“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” (

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” (
 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.


Leave a Reply