Problems and Purpose

The worker-recovered enterprise movement in Argentina was a grassroots reaction to the country’s economic depression and financial collapse. Non-violent in nature, the movement involved the occupation of closed factories by former workers in an attempt to reclaim their sources of employment and to push for self-ownership.[1] Central to the movement was an ethos of solidarity and, in many cases the demand for or establishment of worker-owned cooperative enterprises (empresas recuperadas por sus trabajadores, or ERT), based on horizontal authority, collective decision-making, and shared returns.[2]

Background History and Context

Argentina’s worker-recovered enterprise (Empresas Recuperadas) movement was sparked by the country’s economic crisis in 2001 but was part of a larger, upwards trend in social activism – the Movement of Unemployed Workers or ‘MTD’ (Movimiento de Trabajoadores Desocupados) – that began with the country’s financials troubles in the late 1980s.[3] Introduced under the Menem government (1989-1999), neoliberal economic policy and industrial privatization brought Argentina to the point of economic collapse beginning with a recession and deepening into depression from 1998-2000.[4] Over a relatively short period of time, Argentina saw widespread deindustrialisation, the closing of factories, and a corresponding rise in large-scale social movements – such as the MTD and organized efforts to establish worker-recovered enterprises – taking direct action against the political and economic status quo.[5] Beginning in the mid-1990s, unemployed workers called piqueteros (‘picketers’)[6] demonstrated by blocking highways and, in a few cases, taking over and restarting the operations of closed industrial plants.[7] The act of recovering bankrupt or abandoned workplaces escalated from 2001-2003. With the country in financial crisis, unemployed workers joined the movement in a final bid to win back jobs and control over future employment.[8] 

Organizing, Supporting, and Funding Entities

The worker-recovered enterprise movement was organized at the grassroots by former employees and laid-off workers. As direct action to establish worker-recovered enterprises (empresas recuperadas por sus trabajadores, or ERTs) escalated in the mid-1990s, attempts were made to organize the movement beginning with the creation of the National Movement of Recovered Enterprises (MNER) and its offshoot, the National Movement of Worker-Recovered Factories (MNFRT). Together with un- or under-employed workers, and other civil society activists, the MNER and MNFRT helped those on the front-lines develop strategies for winning title over the ERTs.[9] 

As well, workers often relied on the assistance and support of neighbours while occupying and attempting to restart abandoned factories and businesses. For example, the Hotel Bauen was recovered by former employees after being closed for four months. Significant renovations and repairs were needed and the workers relied on the charity of their neighbours in order to maintain occupation and, eventually, win ownership.[10] 

Participant Recruitment and Selection

While the movement was national in scope, the occupations themselves occurred at the business level, organized and run by former workers. As a result, few had any experience with business administration and many decided to form co-operatives: the legal framework suggested for ERTs by the movement’s early leaders.[11]

Methods and Tools Used

The Empresas Recuperadas used many methods and tools familiar to non-violent resistance and direct action such as occupation and protest. In Argentina, early protestors were called piqueteros (‘picketers’) who employed the corte de ruta or piquete techniques “in which protestors impede the movement of traffic and merchandise on provincial, national or international routes by cutting off access to thoroughfares.”[12] The act of occupation was central to achieving the movement’s goals: by occupying and, in some cases, to re-starting production, workers forced former employers to negotiate. Occupation also ensured the factories could not be demolished or sold and increased the likelihood that ownership would be transferred to the former workers now occupying -- and in some cases, maintaining and running -- them. ­While non-violent in intent, many of the early occupations turned violent as police attempted to evict the entrenched coop members. Writing in 2013, Emerson National Hunger Fellow Nora Leccese observed that the process of ERT establishment had become streamlined and normalized with many of the over 10,000 successful workers helping out those just beginning the occupation process.[13]

Co-operative ownership was chosen as the model of business management by upwards of 90% of the ERTs after occupying their former sites of employment.[14] The cooperative model is often  

What Went On: Process, Interaction, and Participation 

From the mid-1990s and escalating in the 2000s, the ERT movement saw abandoned factories and failing businesses reclaimed and, in many cases, restarted by their former employees. The movement was born out of necessity or desperation: individuals looked to direct action as they faced delays in wage payment or non-payment, lay-offs, non-payment of pension contributions, fraudulent management practices and, (later) asset stripping of abandoned factories.[15] Elected in 2003 after a series of “short-lived caretaker presidencies”, center-left Nestor Kirchner utilised populist rhetoric and supported the use of protest but did not go so far as to outright support the ERT movement.[16] 

Central to the ERT movement was the argument that the workers – as the labourers and, thus, the means of production – were owed the right to own and run their own businesses. As well, most employers had walked away from their businesses, either abandoning them outright or selling off of machinery or functional décor.[17]

However, the worker-recovered enterprise (ERT) movement did contain deliberative aspects both at its inception and during the process of business appropriation. From the mid-1990s, public debates were held between the leaders of the two main ERT movements (MNER, National Movement of Recovered Enterprises and the MNFRT, National Movement of Worker-Recovered Factories), un- or under-employed workers, and other civil society activists. During these discussions, the idea to adopt the co-operativist model was popularized as nationalisation under workers’ control was put in jeopardy by the opposition of state entities to the ERT movement.[18] As the ERT movement expanded, it became clear that ownership would not be immediately granted and, due to its commitment to capitalist enterprise, state entities were resistance (or inability) to nationalise and cooperativise once-proprietary firms. Following occupation, employees often entered a lengthy and complicated judicial process and the cooperativist business model was the only framework which granted the legal means to claim ownership.[19] During the legal process, workers were often required to occupy the site for months to stop former owners demolishing the sites or selling off manufacturing parts and machines.[20]

Influence, Outcomes, and Effects

The movement resulted in approximately 150-200 recovered enterprises employing some 10,000 workers.[21] Many, but not all, of those who occupied their former sites of employment established co-operatives because “cooperativism was the only legal framework that allowed them to win government sanction.”[22] As of 2005, 94% of ERTs had formed co-operatives with 3% in negotiation, 1% structured as another form of cooperative, and 2% with either no legal framework or operating as state enterprises under worker control.[23] 

As a result of the ERT movement, many factories and enterprises privatized under the Menem government and bankrupt during the economic recession restarted production or business under the shared ownership of the workers. As well, hierarchical management schemes were transformed through the new co-operative system of democratic leadership and decision-making. However, the final form of the movement is, arguably, more driven by profit than social enterprise. Researchers at the University of Massachusetts observed the state of the sector in 2005, concluding that “the new worker-run businesses are far from a unified movement.” Out of five major associations, the National Movement of Recuperated Businesses (MNER) and National Movement of Recuperated Factories (MNFR) lead the efforts. Yet their goals diverge. According to its leader, Eduardo Murua, a worker at Industrias Metalurgicas y Plasticas de Argentina, the MNER “seeks the abolition of a system that oppresses, that generates exclusion and death, that can’t even incorporate the working class.” This contrasts to the MNFR which, lead by attorney Luis Caro, “saw the need to return to profitability and compete globally.” They have sought out a friendlier relationship with the Kirchner government and shirked the cooperative model, “hir[ing] professional and technical management [which] confronted the [MNER’s] ‘social economy’ paradigm.” The divisions exist in both strategy and purpose, says Buenos Aires City Councillor Daniel Betti; “The MNER cooperatives don't just want to make money, but also to carry out sociocultural work, creating schools, cultural centers, the arts…The MNFR businesses want to make money, and only make money."[24]

While the economic results have been mixed, with some factories closing down due to lack of funding or to management issues, others have succeeded.[25] Indeed, for those that were successful, adopting the co-operative structure had long-lasting and resilient effects: “the move legitimates the ERT in the minds of potential customers and other firms within their market sector, transforms the ERT into an entity that can more easily receive credit and government subsidies, and makes it infinitely easier for worker-recovered firms to seek legal protection from returning owners.”[26]

Analysis and Lessons Learned

The movement has, at times, struggled to maintain a commitment to the social goals of self-ownership and a more democratic system of management. As leaders of the movement, many unemployed workers had and continued to face extreme economic hardship. While fighting the state and, in many cases, their previous employers, for the right to own and operate the occupied factories and businesses, workers – many with little managerial experience – had to balance a business logic with the movement’s dedication to solidarity. The ERT movement is an example of Argentina’s “social economy” in practice: a constant balance between resistance and production, all with a commitment to the cultural life of the community.[27] The cooperative model offered many benefits in this regard as Vieta and Ruggeri observe: “The legal framework of a workers’ co-op [facilitated] the addressing of workers’ communal desires, needs, and issues that arose in the processes of taking over and self-managing the [factories and businesses], including the democratic forms of one worker, one vote decision-making most ERTs adopt and the equitable redistribution of revenues many of them seek. At the same time, becoming a workers’ co-operative rather than another form of entity opens the ERT to financial benefits, protects the worker-members from the seizure of their personal property should the co-op fail, and ensures that, due to Argentine co-operative law, the ERT does not have to pay taxes on revenues.”[28] 

Once established, ERT cooperatives, like other businesses operating in Argentina’s post-crisis economy, face difficulties due to: the macro-economic context, a lack of specialist institutions responsible for their support and promotion and overseeing the regulations for the sector, a shortage of capacity to meet their needs on the part of credit institutions, and an overly rigid legal framework.[29] Having spent the summer of 2005 interviewing members of worker-owned ERTs in Greater Buenos Aires and a consumer-owned cooperative in Santa Cruz de la Sierra, Zack Fields concluded that the long-term success of the cooperatives depends on various factors such as the continued authority of provincial legislatures over the transfer of factory ownership, shifting exchange rates, and the ability for the cooperative structure to effectively encourage its members to produce efficiently. “In the long run,” Fields concludes, “an efficient organizational structure is critical for cooperatives’ survival and growth.”[30] Efficiencies, at least in 2005, continued to be driven by “workers’ beliefs about the inseparability of the worker and the firm [and] are influenced principally by a perception of limited employment alternatives and wage equality.” Efficiency will decrease should the sense of solidarity among coop members decline or weaken. However, the unique trajectory and experience of Argentina’s ERT movement may be successful in producing a resilient sense of solidarity as “establishing the cooperative, wage equality, the democratic organization of management, and kinship ties, social practices, or other customs that create a sense of togetherness in the cooperative on an ongoing basis.”[31] On a broader scale, the movement’s adoption of the cooperative structure and dedication to social and economic justice have, arguably, improved the democratic structuring of work and training while also contributing to the cultural dynamics of local communities.[32] 

See Also 

Protest (method)

Occupation (method)

Co-operative Business Management

References

[1] Tilly, C., & Kennedy, M. (2005). From Resistance to Production in Argentina. Dollars & Sense, (262), 28. Retrieved from http://ezproxy.library.ubc.ca/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19262436&site=ehost-live&scope=site

[2] Vieta, M. and Ruggeri, A. (2009). Worker-Recovered Enterprises as Workers' Cooperatives: The Conjunctures, Challenges, and Innovations of Self-Management in Argentina and Latin America, in D. Reed and J.J. McMurtry, eds, Co-operatives in a Global Economy: The Challenges of Co-operation Across Borders (Newcastle Upon-Tyne: Cambridge Scholars Publishing), 183. Retrieved from https://www.academia.edu/550278/Worker-Recovered_Enterprises_as_Workers_Cooperatives_The_Conjunctures_Challenges_and_Innovations_of_Self-Management_in_Argentina

[3] Birss, M. (2005). The Piquetero Movement: Organizing for Democracy and Social Change in Argentina's Informal Sector. Journal Of The International Institute, 12(2). Retrieved from https://quod.lib.umich.edu/j/jii/4750978.0012.206/--piquetero-movement-organizing-for-democracy-and-social?rgn=main;view=fulltext

[4] Policy Development and Review Department (2018). International Monetary Fund. Retrieved 30 December 2018, from https://www.imf.org/external/np/pdr/lessons/100803.pdf 

[5] Retamozo, M. (2006). El movimiento de los trabajadores desocupados en Argentina: cambios estructurales, subjetividad y acción colectiva en el orden social neoliberal. Argumentos (México, D.F.), 19(50), 145-166. Retrieved from http://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S0187-57952006000100007 

[6] Birss, M. (2005).

[7] Tilly, C., & Kennedy, M. (2005).

[8] Tilly, C., & Kennedy, M. (2005). 29. 

[9] Vieta, M. and Ruggeri, A. (2009)., 183.

[10] Fields, Z. (2008). Efficiency and Equity: The Empresas Recuperadas of Argentina. Latin American Perspectives, 35(6), 86. https://doi.org/10.1177/0094582X08326013

[11] Fields, Efficiency and Equity: The Empresas Recuperadas of Argentina.,183.

[12] Birss, M. (2005).

[13] Leccese N. (2013). A Decade after the Take: Inside Argentina's Worker Owned Factories. (2018). Shareable. Retrieved 30 December 2018, from https://www.shareable.net/blog/a-decade-after-the-take-inside-argentinas-worker-owned-factories 

[14] Vieta, M. and Ruggeri, A. (2009)., 183.

[15] Fields, Z. (2008)., 83.

[16] Tilly, C., & Kennedy, M. (2005)., 29.

[17] Fields, Z. (2008)., 86.

[18] Vieta, M. and Ruggeri, A. (2009)., 183.

[19] Tilly, C., & Kennedy, M. (2005)., 29.

[20] Leccese N. (2013).

[21] Tilly, C., & Kennedy, M. (2005).

[22] Tilly, C., & Kennedy, M. (2005).

[23] Vieta, M. and Ruggeri, A. (2009). 

[24] Tilly, C., & Kennedy, M. (2005)., 30.

[25] Leccese, N. (2013).

[26] Vieta, M. and Ruggeri, A. (2009)., 184. 

[27] Tilly, C., & Kennedy, M. (2005)., 31.

[28] Vieta, M. and Ruggeri, A. (2009)., 184.

[29] Leccese, N. (2013).

[30] Fields, Z. (2008)., 89. 

[31] Fields, Z. (2008)., 90.

[32] Tilly, C., & Kennedy, M. (2005)., 31.

External Links

Worker-Recovered Enterprises as Workers' Cooperatives: The Conjunctures, Challenges, and Innovations of Self-Management in Argentina and Latin America https://www.academia.edu/550278/Worker-Recovered_Enterprises_as_Workers_Cooperatives_The_Conjunctures_Challenges_and_Innovations_of_Self-Management_in_Argentina

The Piquetero Movement: Organizing for Democracy and Social Change in Argentina's Informal Sector https://quod.lib.umich.edu/j/jii/4750978.0012.206/--piquetero-movement-organizing-for-democracy-and-social?rgn=main;view=fulltext

A Decade after the Take: Inside Argentina's Worker Owned Factories https://www.shareable.net/blog/a-decade-after-the-take-inside-argentinas-worker-owned-factories 

Notes

The first submission of this Participedia entry was adapted from a research project by the Institute of Development Studies, 'Linking Participation and Economic Advancement’ licensed and reproduced under Creative Commons (CC BY 3.0).

Original source: https://www.eldis.org/keyissues/mapping-participation-economic-advancement