Spectrum, Trajectory and the Role of the State in Workers’ Self-Management

Introduction

Workers’ self-management and related forms of workers’ control over production is associated with periods of societal transformation. In its most advanced form it presents a challenge to capitalist property relations as part of a revolutionary process. Workers’ Councils, as a form of self-management, have occurred under capitalism but also in Communist command economy states (Ness and Azellini, 2011). The relationship between the practice of self-management and the class nature of the state is not, however, straightforward. The state, when perceived as an agent of coercion or control, may seek to either facilitate or suppress social movements which develop from below (Tilly,1978). Facilitation may be used to institutionalise and contain conflict, suppression may mean the use of force to dispel the movement. There remains strategic choice for the state because of the structural interdependency of state and capital.  The state may thus act to restrict or contain the potential for self-management, most trenchantly within capitalism by resisting any challenge to property relations. An example can be taken from the revolutionary turmoil of Germany in 1918, when in return for concessions on trade union rights and recognition of collective agreements, the social democratic leadership of the unions agreed not to touch existing property structures or advocate any socialisation of occupied factories (Grebing, 1969). Collaborationist Works Councils were established following the agreement between Hugo Stinnes for the employers and Karl Legien for the trade unions as an alternative to the revolutionary workers’ councils.  The state also reflects the balance of class forces, including factional tensions between sections of the ruling elite, which further complicates the relationship. For this reason it is vulgar to suggest that self-management should not be a legitimate project until the capitalist state is destroyed, just as we should not assume that the destruction of capitalism in state form would automatically lead to self-management and workers’ control from below.

This paper examines self-management in the wider context of political economy and the role of the state. Most literature focuses either on labour process analysis or social movement aspects of the phenomenon (see De Peuter and Dyer-Witheford, 2010 for a recent review). Self-management and workers’ control is also often viewed as a practice isolated from wider political economy. Most importantly,  there appears less emphasis on understanding the role of the state in shaping or re-shaping practice, or the state is even eschewed as an inevitably conservative and bureaucratic independent agent (e.g. Holloway, 2002) In developing our understanding we utilise a mix of contemporary documents and case study interviews in assessing our three country examples. First, we examine self-management in Titoist Yugoslavia in the aftermath of the Tito-Stalin split of 1948. Self-management was a central policy of the Titoist regime as it sought to distance itself from authoritarian and bureaucratic Communism and modernise its production capability as it turned towards western markets. Indeed, Yugoslavia has been used as a comparator yardstick in recent discussions of other experiments such as those in Chavez’s Venezuela (e.g. Lebowitz, 2001: 44-46).  To pursue this comparison, and make more sense of the role of the state and the market, we examine the particularities of the new movements for self-management and co-operative working in the contemporary Latin American arc of protest against neo-liberalism, focusing on both Argentina and Venezuela. The national specificities of each of these two countries is different, with the recovered companies which emerged ‘from below’ in Argentina contrasting with the movement ‘from above’ as part of Hugo Chávez’ Bolivarian Revolution and ‘Twenty First Century Socialism’ in Venezuela.  In our examples we record the contextual factors which shaped the movements, and isolate the state’s influence to either promote or contain them. In our conclusion we analyse factors of continuity and change, and discuss the state’s role in relation to these different episodes of workers’ self-management.

Some theoretical considerations

We outline here some key features which can be utilised to describe the concept and practice of self-management.

Spectrum, Trajectory?

Self-management is a slippery concept, and can be schematically located within a spectrum. It may simply consist of shared decision-making, or a co-operative venture containable within the capitalist mode of production. As Ramsay (1977) suggested, employers may utilise forms of worker participation (joint consultation, profit sharing etc.) as a way to demobilise worker militancy. In its most socially advanced form, however, it may embrace workers’ control over both production and decision-making, enabled by the eviction of management from the enterprise, and the socialisation of ownership as part of a wider socialist project. Self-management may address the ‘property question’ by means of a full-bloodied socialist project to overthrow capitalism. Within this spectrum, we discern a trajectory, whereby self-management may be seen as a mobilising force for social transformation away from capitalism, or, alternatively, forms of worker participation may be used by capital and/or the state in reverse trajectory to demobilise, contain or discipline worker militancy and self-determination. Along the spectrum, but in a transformative direction, the circuit of capital may be interrupted or even broken, as surplus is capable of being distributed socially rather than recycled in money or commodity form. De Peuter and Dyer-Witheford (2010: 30) construct a concept of ‘labour commons’ whereby the logic of such redistribution would act to create a ‘circulation of the common’ by which associated labour acts with redistributive motives, adding socialist principles to the practicalities of co-operative working. Self-managed factories may thus deviate from the capitalist social relations of production as they may replace capital as the mediator between the worker and their labour power. As such, self-management may not simply be seen as a technical exercise in workers’ decision making, but be seen in ideological terms, as an expression of challenge to the logic of capital.

Figure 1: Spectrum and Trajectory Towards Workers Control

 

 

Such a dynamic is reflected in the writings of classical Marxists, albeit with caveats on the limitations of co-operative working.  For Marx, workers’ co-operation in self-management ‘was a practical demonstration that capital was not necessary as a mediator in social production’, (cited in Lebowitz, 2003: 89). Rosa Luxemburg similarly saw co-operatives positively as isolated units of ‘socialised production’ (Luxemburg, 1900). Both warned of the limitations of such projects still locked as islands of socialism in a sea of capitalism. For Marx, co-operatives ‘naturally reproduce, and must reproduce everywhere in their actual organization all the shortcomings of the prevailing system’ (Marx, 1967: 440). For Luxemburg, co-operatives were ‘totally incapable of transforming the capitalist mode of production’ and could only survive ‘by removing themselves artificially (authors’ emphasis) from the influence of the laws of free competition’ (Luxemburg, 1900). Thus, while self-management and co-operative working may challenge the circuit of capital, it struggles to do so permanently, and may only do so by existing artificially within the general logic of capital. Atzeni and Ghigliani (2007: 653) provide a fascinating empirical account of social processes within the over two hundred worker-recovered companies in Argentina. They conclude from their case studies that:

‘...the act of occupying a factory gives room to workers’ control of the labour process and to a more democratic, collective decision-making, but workers’ need to compete in the market reduces the sphere of collective decision, leading to centralisation of power and divisions between directive and productive workers, hampering the possibility for workers to enrich their job and avoid self-exploitation’.

The inference is that to be successful and sustainable, self-management, or workers’ control, must be combined with a conscious socialist political project to overthrow capital and to construct a workers’ state.

The state

While classical Marxists have drawn caveats on the sustainability of self-management and workers’ control within capitalism, others have been more circumspect. The caution focuses on the nature of the state and the assumed (by Marxists) need to overthrow the (capitalist) state to achieve workers’ control of the productive process. Hahnel and Albert (1991) and Albert (2003), from an anarchist perspective, introduce the concept and guide to practice of ‘participatory economics’, or ‘Parecon’.  Parecon is presented as an alternative to both capitalism and what is described as ‘co-ordinationism’, or rather Communist command economy planning. Participatory economics presents a programme for which the constraints and disciplines of the market may be overcome by an alternative framework of indicative pricing and negotiated planning ‘from below’. The challenge to the power of capital, and hence the capitalist state, is avoided by assuming that a system of participatory economics could be achieved by a ‘long march’ which emphasises ‘councils of workers and consumers’ as intermediary institutions (Hahnel and Albert, 1991)

[i]

. Transformation is seen as something which gradually evolves from below rather than something which challenges capital and state power directly in an historical moment of confrontation. The prescribed process of emancipation or liberation echoes Holloway’s (2002: xi-xii) ‘open Marxist’ critique of classical Marxism to ‘change the world without taking power’. Holloway’s vision is that ‘the rejection of the notion of taking state power is part of a deeper process...in which people refuse to bow to the logic of capital, in which they decide to stop creating capitalism and do something sensible with their lives’. He argues that the society we should aspire to should be neither in the reformist or revolutionary tradition of assuming power but should instead be a ‘non-power’ society based on direct rather than representative democracy ‘..where power relations are dissolved’. The question of how power is achieved, or arrested from the state, is deliberately left open, subject to a constant process of self-education ‘You cannot build a society of non-power relations by conquering power’ (Holloway, 2002: 17). This voluntaristic interpretation of the revolutionary process, on closer reading, also appears to downplay class as an agency of transformation. Holloway argues, for example, that ‘Social discontent today tends to be expressed far more diffusely, through participation in non-governmental organisations...through the individual or collective concerns of teachers, doctors or other workers......(and) in the development of autonomous community projects of all sorts’ (2002: 21). More recently, in addressing problems of ‘social cooperation’ under ‘Twenty First Century Socialism’,  Lebowitz (2012) has further stretched the analyses of  state power by differentiating between the state in its form of ‘vanguard Marxism’ - equivalent to the Stalinised command economies, and the conditions necessary for the development of a ‘genuine Marxist socialism’ from below. In these interpretations the state is continually viewed with suspicion, a potentially hostile force. For Holloway the possibility of a ‘workers’ state’ is viewed with equal hostility, an oxymoron which is ‘absolutely absurd’ (Callinicos and Holloway, 2005: 122).

Endogenous or exogenous?

In refining our understanding the relationship between state, labour and capital we must accept that many examples of self-management can be driven by exogenous shocks as well as by endogenously generated ideological projects. The development of workers councils in 1918/1919 Germany, the soviets in revolutionary Russia, or the cordones in 1970s Chile may well be seen as cases whereby worker co-operation and solidarity emerged endogenously as an ideological expression of emerging revolutionary class struggle and consciousness among workers. In contrast, the key driver for the worker occupation movement in Britain in the 1970s was an exogenous shock as British employers and state sought to restructure British industry in the face of economic crisis and soaring inflation. The same might be true of the ‘recovered factories’ movement in Argentina, whereby the movement from below was initially a defensive reaction to job loss, albeit a reaction that ignited expressions and emerging ideologies of worker solidarity as it progressed. The relationship between the two processes must therefore be conditioned by interplay within the productive forces of the base and the ideological and social forces of the superstructure. Within both spheres the state also acts to preserve and encourage the ‘national interest’, and seeks to create an environment that is conducive for capital accumulation within the wider world economy. Self-management may pose a threat or an opportunity to such accumulation, and the state’s response will reflect both regional and national specificities as a result. Specificities will in turn, as Martinez Lucio (2011:657) suggests, reflect historically developed workplace/labour movement legacies, repertoires of protest, traditions and discourse which may even include ‘sabotage’ and direct action as a motivating force rather than participation and control.

It is to these specificities that we now turn to further our analysis. In each of our cases we first present some contextual detail of self-management, before addressing the ideological impetus and trajectory of the project and the role of the state in determining outcomes.

Yugoslavia under Tito: A Reverse Trajectory?

Post war Yugoslavia was a testament to the success of Tito’s Communist partisans in defeating the Axis occupation. In the liberated areas,

‘...the old order was overthrown and a new popular administration constructed around liberation committees. ...a hierarchy of committees would control a whole town or territory, complete with postal service, health service, and publicly controlled industry’ (Swain and Swain, 1993: 17-18).

Seizure of factories and productive facilities was by military means, and enterprises were taken into state ownership ex post facto. The state was framed within the historic split between Stalin and Tito, which isolated the fledgling Yugoslavia from the Soviet Bloc. The final split came in January 1948 when Tito stationed troops in Albania to provide help to the communist partisans fighting in Greece. Stalin had already promised the Allies that he would not support the fight for a Greek Communist government, and so this break of ‘discipline’ by Tito was a move too far. Stalin then insisted that the Yugoslav communists should surrender foreign policy initiatives (including in the Balkans) to the Soviet Union. Following negotiations between Stalin and Yugoslavia’s emissary Milovan Đilas in Moscow, the Central Committee of the Yugoslav Communist Party rejected Stalin’s proposal on 1 March 1948.

The Yugoslav State

Tito characterised the Soviet Union in terms of an unhealthy relationship between Party and State whereby ‘ ..the Party in the Soviet Union is becoming more and more bureaucratic and is growing to be part and parcel of the bureaucratic state apparatus, becoming identified with it, and simply a part of it’ (Tito, 1950: 14). Đilas, the Montenegrin Vice President of the Republic and one of the key intellectuals of the Yugoslav Communist Party, denounced the Soviet Union as ‘state capitalist’, inferring that a counter-revolution had taken place under Stalin within the socialist motherland (Swain and Swain, 1993: 73). In terms of overall policy Tito had expressed no previous preference for anything other than the orthodox Stalinist position. He became General Secretary of the Yugoslav CP in 1937, at the height of the Moscow Trials, and his Government after 1945 was built on solidly Stalinist principles of one-party rule, the deliberate development of a leader-cult, and ‘socialism in one country’ (Đilas 1969: 14). The Government’s economic and political programme followed the Stalinist command model. Ministries determined output and prices in a drive towards capital accumulation over consumption. The rigid command structure of the partisan army was carried over into everyday life and social organisation. In the process a privileged nomenklatura was confirmed (graphically described by Đilas in 1957 in The New Class). As was common in other Stalinist states, there was no legal right to strike.

It is in this context, to help create further distance from the ‘Stalinist Bureaucracy’, that the party leadership under Tito developed the theory and practice of self-management (samoupravljanje). The ideology framed by the Slovenian intellectual and party leader Edvard Kardelj alongside Đilas and Boris Kidrič  and enacted by the Government in 1950. As reported in The Programme of the League of Yugoslav Communists (published 1959):

 Our own experience, and that of other socialist countries, has shown that when the management of the economy is exclusively in the hands of the State machinery, the inevitable result is a growing tendency towards greater centralisation of power and closer amalgamation of State and Party machinery: they grow stronger and strive to divorce themselves from society and impose their power upon it. (page 21 cited in Lane 1976: 144).

Further insight is provided in Tito’s speech to the Yugoslav Parliament, when he introduced the legislation (Workers Manage Factories in Yugoslavia, Josip Broz Tito, 1950). Tito refers to the writings of Marx, Lenin and Engels, but also to the discourse of ‘socialism in one country’ associated with Stalin. He focused on Marx’s predilection of the ‘withering away of the state’ as a necessary transition from socialism to communism:-

How do things look in the Soviet Union thirty-one years after the October Revolution? The October Revolution made it possible for the state to take the means of production into its hands. But these means are still, after 31 years, in the hands of the state. Has the slogan “the factories for the workers” been put into practice? Of course not. The workers still do not have any say in the management of the factories....The workers only have the possibility and the right to work but this is not very different from the role of the workers in capitalist countries. The only difference for workers is that there is no unemployment in the Soviet Union and that is all. 

Self-management, in Tito’s vision, was intended to fulfil the dual role of de-bureaucratisation of the state by limited decentralisation of decision-making on the one hand, and raising the consciousness of the peasant to that necessary for an industrial worker on the other. The combination of Tito’s two political aims suggests that self-management was a modernisation project, necessary to enable capital accumulation within the new state. . The contradiction between command economy Stalinism and de-bureaucratisation unfolded with the reality of practice. Tito also foresaw self-management as a vehicle for a disciplining force on workers in the enterprise:-

The role of the trade unions under the new conditions where the working people are taking part in the management is somewhat altered....The work of trade unions will also be eased by the fact of the workers becoming acquainted with the process of management of production...In any case, this will contribute a great deal to the stabilisation of work discipline in the factories, mines and other enterprises.

An ideological assertion was made by the Communists that workers’ councils represent a harmony of interests within the enterprise. This assertion flowed from the consideration that, as private property was abolished, there should be no conflict of interest between workers, management of enterprises and the (workers’) state. In concrete terms, the purposes of self-management were referred to by Tito as they were expressed in Article 27 of the Bill on the Participation of Working Collectives. The management board of the factory, elected by the enterprise Workers’ Council :-

.....undertakes steps to improve the production of the enterprise, especially as regards the rationalisation of production, increasing labour productivity, lowering the costs of production, improving the quality of the products, decreasing waste; makes decisions on work norms in the enterprise..... 

The emphasis was on self-management of an enterprise to increase its internal efficiency, to improve quality, and to impose discipline. The market orientation of the project would fulfil the purpose of allowing Yugoslav industry to trade with the west, given its new found isolation from the Soviet bloc (Lydall, 1984: 67).

A reverse trajectory?

A second feature of self-management was therelationship with the market and dubiety over the role of ordinary workers in the decision-making structure of the enterprise. This contradiction emerged in 1957 when the regime was shaken by a strike in the coal mines at Trbovlje which, as Wilson (1979: 117) records, led to fear in the regime as it ‘might easily have spread to other mining districts’. The strike presented an alternative way forward for ordinary workers to achieve their goals of better living and working (Marinković, 1995), and challenged the official ideology. Partly in response, a law agreed that year gave more discretion to the Workers’ Councils to determine how the ‘social product’ (i.e. profit) of individual enterprises might be distributed between investment and wages.  A contemporaneous turn to foreign trade led to a period of capital formation and the growth of the economy. Reforms in 1965 were intended to further liberalise the economy and provide a solution to the emerging crisis of corporate and national indebtedness. Banks were given the freedom to run along ‘capitalist’ lines, and to invoke discretion when granting credit to individual enterprises. In 1969 a further major strike took place among dock workers in Rijeka, and in 1973 a strike of 2,000 workers took place in the Zmaj factory in Belgrade (Shabad, 1980). Strikes once again developed towards the end of the 1980s when strikes were finally allowed legality (USDS 1987, 1988). The problems of the economy, this time that of a rapid rise in the rate of inflation to 150 per cent, were again met by further market-based liberalisation. This included the expansion of private investment and the encouragement of further foreign direct investment.

The majority of strikes were about pay, but were short-lived as most factory ‘managers/directors’ (who were appointed or elected by the Workers Councils) quickly conceded to the workers’ demands. The significance of these unofficial strikes is that they exposed an underlying division between state, party and enterprise management (the self-management ‘class’), and rank-and-file workers. Basic wage levels set within centrally-fixed limits, but enterprises were free to establish top-up bonuses, and in this fashion the role of the centre was confirmed.  Lane (1976: 152) reviews the evidence of decision-making structures and concludes that ‘Studies which have examined the participation of various groups also show that the workers’ council is not the source of effective power in the enterprise’. A hierarchy of power and authority existed with top management and party and union officials exhibiting most power, and workers through the workers’ council being the least influential. Kolaja (1965: 67) suggested that ‘in both factories [studied] the workers’ council fell under the influence of the director who was also a prominent member of the League [of Communists] organisation’. In 1967 the process of separation was deepened when firms were given the right to retain part of their foreign earnings from exports (thus releasing them from the obligation to cross-subsidise other firms through transfers of earnings via the central bank). Foreign-owned companies were allowed to invest in Yugoslavia, subject to a maximum 49 per cent holding of assets. Such market-based liberalisation had the side effect of increasing unemployment as firms laid-off workers in less profitable areas. The resultant unemployment among sections of workers in turn acted to increase inequality among workers in general (Lydall, 1984: 84).

As Yugoslavia built bridges with western market capitalism, self-management proved useful in terms of enterprise innovation, worker discipline, control and direction. In effect the pull of the market confirmed self-management as little different from the employee participation or ‘industrial democracy’ experiments which had run in parallel in western capitalist enterprises. As more powers to retain and redirect surplus were given to self-managed enterprises, so too were those enterprises forced into competition with one another and with those in the western markets. So while the state wished to enable self-management as a modernisation project, it contemporaneously imposed market discipline, thus negating the possibility of ‘commons’ as the logic of capital prevailed.

If the ideology and political economy of the state had corrupted self-management ‘from above’, what might happen within a liberal democracy when workers control came ‘from below’? We now turn to the British example to explore this question.

1970s Britain: A Blocked Trajectory?

The 1970s was a period of heightened industrial and political unrest in western Europe at the faltering end of the post-war economic boom. Factory occupations occurred throughout , most notably in France in 1968, in revolutionary Portugal in 1974/75, and in Britain in 1972 and beyond. In Britain the economy was in deeper crisis, exhibiting higher inflation than competitors, a weak currency and with the Labour Government in 1974 turning to the IMF for a $4bn loan. Post-war economic expansion had been marked by a growth of TUC affiliated union membership from 9.3 million in 1950 to 11.2 million twenty years later. As trade union power had increased, so too had the network of independent shop stewards, creating a duality of power between trade union leaderships and the rank-and-file (see Upchurch et al, 2009: 81-112).  Restructuring inevitably posed a threat to trade union power. It also threatened the material base of the weak corporatist industrial relations polices pursued by successive post-war governments.

Exogenous shock, endogenous movement

The shock of factory closures sparked rank-and-file led work-ins, occupations and worker co-operatives.  A movement developed, crystallising ideologically around the politically left-leaning Institute of Workers Control (IWC) and left Labour Party leaders such as Tony Benn. Alternative political visions were promoted, including an ‘Alternative Economic Strategy’ of import controls, a siege economy and alternative production per se. (Cooley, 1982).  An internal IWC debate between the two positions of revolution or reform came to a head following the occupation and work-in of the Upper Clyde shipyard in 1972 and the subsequent wave of over 260 factory occupations in the engineering industry (Tuckman, 1985: Darlington and Lyddon, 2001). An article in Socialist Register by Richard Hyman (1974) exploded the debate, when he challenged the ‘reformist’ position of the IWC as untenable. The majority position in the IWC favoured an extension of workers’ involvement through practices of ‘co-determination’ not dissimilar to the system of Mitbestimmung found in West German Works Councils (Coates and Topham, 1974). Hyman argued, in contrast, that workers’ control could only be achieved by challenging the power of capital directly.

Each perspective demands wholly different strategies; yet within the IWC literature the issue appears fudged and confused. The lack of clarity on this point, it seems to me, reflects a more general ambivalence on the issue of reform and revolution (Hyman, 1974: 249-250).

This apparent ‘fudge’ posed indirectly the role of the state, or rather the lack of ambitions towards the state from the ‘reformist’ position of the IWC.

The State Debate

The theoretical ‘debate’ within the IWC appeared locked within the Left’s traditional ideological divide between revolution and reform. A polemical argument gathered pace between the academics Ralph Miliband and Nicos Poulantzas. For Miliband (1969), writing in The State and Capitalist Society, the state was to be explained as a sociological phenomenon whereby its machinery is used by the ruling elite to protect and gain its riches from the working class. Holloway (2002) later echoed this view, by eschewing all state power, in either its capitalist or non-capitalist form. The question of how this machinery of state can be captured remained unexplained. As Barker (2007) suggested, a satisfactory explanation to this problem was neither provided by Poulantzas.  He argued that socialist transformation involves two parallel processes, a parliamentary campaign combined with the development of self-management towards ‘democratic socialism’:

...how is it possible to radically transform the State in such a manner that the extension and deepening of political freedoms and the institutions of representative democracy (which were also a conquest of the popular masses) are combined with the unfurling of forms of direct democracy and the mushrooming of self-management bodies? (Poulantzas 1978: 256)

The political formation of this co-existence remained obscure,  ‘the answer to such questions does not yet exist—not even as a model theoretically guaranteed in some holy text or other’ (1978: 264-65). Poulantzas had adopted the Althusserian position of the post-1968 French Communist Party (PCF), which had made an ideological shift and dropped the Marxist concept of the ‘dictatorship of the proletariat’ in the development of its ‘Eurocommunist’ position. This position, anti-Stalinist in intent, was rooted in the proposition that all attempts to construct workers’ direct control over the state would lead to despotism. Indeed, instead of rehearsing projects of workers self-emancipation from below, Poulantzas presented a reformist ‘check’ on such processes by embracing the simultaneous continuance of bourgeois democratic forms in the guise of parliamentary, representative democracy. ‘If we base everything on direct, rank-and-file democracy...sooner or later, (it) inevitably leads to statist despotism or the dictatorship of experts...if workers’ councils form their own state power...it is not the withering away of the State or the triumph of direct democracy that eventually emerges, but a new type of authoritarian dictatorship’ (1978: 255, 264).

A Blocked Trajectory

The workers’ occupation movement in the UK began to fade as the occupations were defeated and workers’ take-overs of such workplaces as the motor cycle manufacturers Norton Villiers or the Scottish Daily News proved unsustainable. This was despite some limited Labour Government support in1974 under the influence of the new left-wing Secretary of State for Industry, Tony Benn. The support, however, was partial and limited to ‘compensate the owners for the workers takeover in the purchase of usually obsolete plant and equipment’. (Tuckman, 2010: 31). The demise of the factory occupations and worker co-operatives related to their inability to escape the logic of capital. As Clarke (1977: 373) noted ‘the co-operatives were impelled to conform to many of the practices of private industry on matters of pay, hours, intensity of work, management control and so on... pay was generally lower than in outside industry’. As an alternative to worker co-operatives the TUC, in talks with the Labour Government, supported the 1974 and 1977 Bullock Reports on Industrial Democracy, which sought to place workers’ representatives ‘on the board’ of both nationalised industries and large private enterprises. However, the more militant wing of the trade union movement rejected such calls for being too collaborationist, and the key moment of industrial ‘democracy’ passed by (McIlroy et al, 1999).

However, a new era of neo-liberal prescriptive ideology and practice also began to redefine the landscapes of political economy. Within Latin America, a new wave of factory occupations occurred in Argentina, and a revival of ‘Bolivarian’ socialism was generated in Venezuela which included the enablement of workers co-operatives. It is to these that we now turn.

Argentina: A fragmented trajectory

Argentina’s experiment with autogestion emerged during 2001 in the midst of economic and political crisis in which the government announced the largest sovereign debt default ($93bn) in world history. Argentineans responded with social uprisings which removed four Presidents in two weeks. Millions of citizens began to collectively participate in self-organised actions designed to reclaim control over the decisions that affected their daily lives, including neighbourhood assemblies, pots and pans protests, piquete road blocks, community soup kitchens and barter clubs. An estimated 10,000 employees in over 160 factories, hotels, hospitals and other industries decided to restart the production process themselves by ‘recovering’ the workplaces that their bosses had abandoned. While participants in the worker-recovered companies (ERTs in Spanish) may not have possessed a clearly-defined ideological agenda, self-management in Argentina did contain an expansive political edge inspired by the ideas of autonomy, removal of hierarchy and promotion of horizontal decision-making (Dinerstein, 2007) as the people demanded the removal of the entire political class.

Exogenous shock, endogenous movement

Workers’ self-management has been interpreted as a defensive response by non-unionised employees to preserve their jobs motivated by the desire to confront the injustice of having remained unpaid for many months (Monteagudo, 2008). More positively, it has been presented as evidence of anti-power (Holloway, 2002). This is signalled by the recovery of autonomous spaces left by the abandonment of both the state and the traditional reformist agents of political parties and  trade unions. Most workers felt betrayed by the CGT (Argentina’s only legally recognised union confederation), because it had used its corporatist prerogative within the Peronist government to tacitly support structural adjustment.  The more pluralist CTA confederation, established by dissident unions in 1992 and which opposed President Menem's neoliberal reforms (Serdar, 2012), also remained paralysed when confronted with the radicalisation of workers’ and other social movements (Svampa, 2007). The ERTs emerged out of the tension between workers’ perceived right to work and the business-owner’s legal right to maintain possession of the firm - a contradiction which could not be satisfied. Autogestion in Argentina was thus the product of the synthesis of two contradictory processes – on the one hand as a collectivist class response to defend jobs, and on the other an individualist ‘save yourself’ mentality inculcated in workers’ minds as part of the neoliberal project. The movement  allowed workers to improve their personal material circumstances whilst also engaging in a political project that sought workers’ control through the National Movement of Recovered Companies (MNER).

Role of the state

The response of the state was initially ambiguous (Rebón, 2004). Under President Duhalde, support for recovered factories was limited only to those ERTs viewed as his political allies. Things changed in May 2003 with the election of President Nestor Kirchner, who positioned himself on the side of the social movements and was voted in on a populist, left-leaning Peronist ticket.  He legitimised the existing ERTs through the introduction of favourable microeconomic policies (Svampa, 2007). The state’s broadly supportive position can be explained because firstly it is clear that the principle goals of the project aligned closely with the professed ‘National-Popular’ objectives of Kirchnerismo. Supporting autogestion helped to give credence to the government’s narrative against neoliberalism. However, in reality Kirchnerismo helped to embed the Argentine economy in global capitalism and reproduced an unequal class structure (Wylde, 2011). The policies that the Argentine government enacted have been used as tools to depoliticise the movement through the process of institutionalisation. The 2004 Programme for Self Managed Work (PTA) provides subsidies to the ERTs, and in this way the political goals of the movement have been exchanged for the recognition of their practical aspirations (Dinerstein, 2007). The Kirchner government launched a series of social projects (Planes) that have led to the creation of some 13,000 state-sponsored cooperatives employing 300,000 (Silveira, 2011). However, within these cooperatives the degree of workers’ control is more limited than in the ERTs as they are run by administrative councils rather than workers’ assemblies and are heavily reliant on state patronage (Orgaz, 2005). The attempted containment of autonomous movements confirms the Kirchners’ famously-stated desire for the restoration of a ‘normal capitalism’ after the crisis, and also exemplifies a return to traditional segmented neo-corporatist practices of social control historically favoured by Peronist governments (Etchemendy and Collier, 2007). The sympathetic state role is also attributable to the fact that at no point has the existence of the ERTs fundamentally challenged the capitalist nature of property relations. In over a decade since the birth of the movement, only 12 per cent of recovered companies have been granted permanent legal expropriation (Facultad Abierta, 2010) whilst the remainder possess some form of temporary status. The state has also failed to adequately support self-managed enterprises in terms of marketing their products (Svampa, 2007).

Finally, the National Institute for Cooperativism and Social Economy (INAES) has helped to further incorporate and normalise the radical goals of many of the recovered companies. However, in 2003, divisions over  political strategies caused the movement’s national coordinating body – the MNER to splinter and the rival National Movement for Worker-Recovered Factories (MNFRT) was founded in an attempt to move away from the MNER’s preferred strategy of using direct confrontation and street mobilisations (Ranis, 2005). In this sense it can be said that Argentina’s self-management project was established ‘from below’, but during the last decade has since largely been assimilated and co-opted ‘from above’.

A fragmented Trajectory

Most of the original ERTs have thrived since 2001 and workers’ self-management has now expanded from 161 into 205 workplaces (Facultad Abierta, 2010). This has occurred in the face of enormous legal, financial and operational hurdles such as being saddled with the failed enterprises’ huge debts, inheriting broken machinery, and legal precariousness. For many individual ERTs this has only been possible because they have pragmatically sought to succumb to legal institutionalisation in order to gain tax advantages and access to credit (Ranis, 2005), whilst simultaneously pursuing defiant acts of resistance that break with the logic of capital and resist the ruthlessness of market competition.

For example, despite the legal requirement as companies with ‘cooperative’ status to implement managerial hierarchies, the authenticity of workers’ control has largely been preserved, with 88 per cent of ERTs regularly staging workers’ assemblies as their sovereign body. However, in terms of a ‘labour commons’ the recovered companies have had little choice but to integrate into the market economy. Yet although they have been forced to maximise their own efficiency in order to remain competitive, but rather than generate profit many of the ERTs instead commit to generating new sources of work, maximising wages or to establishing social projects in the local community. Indeed creating jobs has remained a priority, with four fifths of such enterprises having added to their workforce in recent years (ibid. 2010). For example whilst a large number of traditionally-organised Argentinean factories executed a wave of redundancies when output fell during the 2009 global slowdown, in the equivalent ERTs, workers collectively decided to prioritise the protection of jobs and cut down their own working hours, reduced production or lowered their salaries (Magnani, 2011). Although debates exist about whether or not workers are submitting themselves to the practice of self-exploitation (Heller, 2004; Svampa, 2007), favourable interpretations are that the ERTs are proactively challenging the circuit of capital. Perhaps the most celebrated example of the recovered companies in Argentina, FaSinPat ceramics factory in Neuquén has increased its workforce by 85 per cent since 2001 (and not only donates its tiles to nearby community centres and hospitals but has also built a complementary health clinic in a poor local neighbourhood

[ii]

. Half of all ERTs pay all their workers an equal ‘wage’, whilst two thirds insist on an equal length for the working day. Where wage differentials do exist, they were found to be largely marginal and symbolic (Facultad Abierta, 2010) and where self-managed companies have consolidated their operations, workers now receive higher rates of remuneration than they do in equivalent traditionally-organised companies (Magnani, 2011).

Finally, what remains clear is that whilst much of the workers’ self-management movement has been at least partially co-opted by the state, in particular those workplaces which experienced a lower intensity of “struggle” or state violence at their inception (Coraggio and Arroyo, 2009), for those elements which have resisted neocorporatist containment,  today it offers  a counter-hegemonic alternative and a direct challenge to market-based capitalism in Argentina. For example the Red Gráfica (Graphics Network) is an initiative that brings together fifteen cooperatives (eleven of which are ERTs) at different points in the supply chain of the printing and design industry. It is successfully neutralising market competition in its industry by sharing resources and expertise, as well as negotiating favourable terms with suppliers or even arranging closed-shop supply or bulk-purchase agreements with other network members (Giuffrida, 2011). This process of exerting collective control over certain productive sectors reflects the organisational evolution of the recovered companies’ movement and has also arisen as a response to its ideological fracturing and the frustrated attempts of its various national umbrella networks to coalesce around the same political project. Other examples are starting to emerge in different industries (La Vaca, 2007), and although relatively small-scale, they illustrate that the social logic that facilitates productive links between recovered companies requires not only techno-productive needs but also a measure of political will. If the ERTs have succumbed to varying degrees of state cooptation since 2001 then their trajectory can be described as “fragmented.” Yet those that currently exist ‘as islands of socialism in a sea of capitalism’ but which remain more ideologically pure have built a number of bridges to link them over troubled waters

Venezuela: Endogenous Development?

In Venezuela workers’ self-management emerged as a top down process, as part of the Bolivarian Revolution initiated by Hugo Chávez in 1998-1999. This process, renamed 21st century Socialism in 2005, has been funded by booming oil revenues (Karl, 1997). Indeed, the state is the nations’ landlord, which means that it ‘can charge a royalty to international oil capital to produce on its subsoil’ (Purcell, 2011: 569). Historically there had been a fusion between the economic and political domains, which allowed the development of a rentier capitalist class - notably managers from the state enterprise Petroleos de Venezuela, PDVSA (Coronil, 1997). To maintain social peace, the state redistributed a fraction of oil revenues to the middle class and to a much lesser extent the working class through social programmes.

The Chávez State

The pact between oil company and state exploded in the early 1980s as the result of three series of pressures: the rise of external debt from 1983, falling oil revenues, and the exhaustion of the redistributive system. PDVSA produced as much oil as possible, opened up to foreign capital, and escaped taxation through creative accounting (Hammond 2011: 364). There was no longer a political commitment to reinvest oil revenues in the social economy, which had been at been at the core of Venezuela’s democracy. It was in this context that Hugo Chávez, a military man of humble origins, attempted a coup in 1992. Although the coup failed, Chávez became a symbol of the rise of the oppressed. When he became President in 1998, he inherited a deeply impoverished and highly polarized country. Chávez had no real distinctive political agenda at first, apart from the promise to break away from neo-liberal policies and to place human needs at the heart of all economic activities.

There are three distinct phases in the political reform process. In the first phase (1998-2003), market relations were kept in place (Lebowitz, 2006). The government’s priority was to stabilise the social and economic situation through the Plan Bolivar 2000 (which was directly managed by the armed forces). When Chávez was elected, the price of oil had hit a low point, further undermining the state of the economy. In 2000 Chávez persuaded OPEC members to abide by their quotas (Hammond, 2011: 365).  The government then promoted a mixed economic model where cooperatives and small family businesses could coexist with privately controlled circuits of production and distribution.  The creation of cooperatives was seen as a key instrument for achieving a transition to an endogenous model of economic development based on the satisfaction of human needs in the community.

Endogenous Development?

In the second phase (2002-2005), the Bolivarian Revolution became radicalised. It became clear that the political opposition, supported by the employers association FEDECAMARAS, the Confederación de Trabajadores de Venezuela, CTV, and PDVSA, would do everything in their power to force Chávez out of office. The government response was to take  a more anti-business stance. Chávez announced that 1,149 enterprises were to be expropriated. In the event, the government did not implement a systematic expropriation policy. Moreover, the Venezuelan labour movement did not demonstrate a strong capacity to occupy/and manage expropriated factories, in contrast to its Argentinean counterpart.

Crucially, the government wanted to keep direct control of the some of the most strategic sectors of the economy, especially the oil industry, PDVSA.  As a result, the government resisted workers’ calls for self-management and repossession, arguing that it needed to grant special status to the organisation because of its strategic importance (Azzelini 2009: 13). 2005 was also a crucial year in that the government openly declared its commitment to 21st Century Socialism, by which they meant the participation in the decision-making process of excluded or semi-excluded sectors of the population as opposed to the traditional working class (Ellner 2012). For Chávez, what mattered was not the form of property relations,but whether enterprises reinvested their resources in the community forsocial needs. In this socio-productive model, social enterprises (empresas de produccion social, EPS) were meant to lead to the adoption of ‘socialism of the 21st century’, by opposition to the socialism of the 20th century as experimented by the Soviet Union (a model of state capitalism) or workers’ self-management in Yugoslavia (Alvarez, 2009).

Another key element of the emergency response to the economic and social crisis of 2002-2003 was the creation of the Missions. The Missions, Barrio Adentro and Mercal, for example, were originally set up in the municipality of Caracas to attend to health and alimentation needs. In February 2003 the city asked the Cuban government to send Cuban doctors to deprived neighbourhoods, the barrios. The programme was piloted  and then rolled out nationally. The Mission Mercal provided subsidised food in government-sponsored cooperatives.  From 2004, the government used the massive windfall in oil revenues to fund the expansion of the Missions by creating a mission each time it identified a new social need. In the Mission Vuelvan Caras  the aim was to create a model of endogenous development based on local socio-economic projects. The contours of the whole project could be defined by six principles and objectives:1) The state should assume a pro-active role in the economy through the nationalisation of strategic industries; 2)economic development should be endogenous; 3) the state should promote participatory democracy through Communal Councils; 4) civic engagement of the people in the revolutionary process; 5) market-led mechanisms should ultimately disappear and be replaced by  alternative forms of social relations  based on the socialisation of revenues: and 6) new values of altruism, solidarity and social utility of work should be promoted as an alternative to consumerism and individualism. 

The development of the Bolivarian Revolution can thus be analysed as an initial counteraction against an endogenous political threat in 2002/2003. The political mobilisation of socially excluded people was crucial for the survival of the Presidency, leading to a war of position between pro and anti-Chavistas. During the Presidential re-elections of 2006 Chávez asserted the socialist character of the Bolivarian Revolution, which was later confirmed in the 2007-2013 Plan. Booming oil prices led to an increase in rent revenues and enabled the government to experiment its vision of 21st century socialism on a large scale. 

The last and third period (2007-2010) consisted in an acceleration of the radicalisation process.. As usual, the President attempted to regain the political ground by launching a series of initiatives. First, confronted with a phenomenon of massive desertion in the Mission Vuelvan Caras, the government officially replaced it with the Mission Che Guevara in 2007. This corresponded to an official recognition of the failure of the cooperatives on the grounds that they were not conducive to socialism. Second, in 2007-2008 the Chavista government expropriated strategic sectors including electricity, steel, cement and telecommunications (Ellner, 2012: 111).

There had been a substantial increase in the number of registered cooperatives, from 400 before 1998 to 131,050 in 2006. It must be noted, however, that 60/70 per cent of these registered cooperatives are in fact not economically active (Hintze, 2010: 96). Initially the development of cooperatives corresponded to massive job creation programmes through the injection of micro-credits in the local economy. Left to their own devices, a sizeable majority of these cooperatives and endogenous development projects would simply not survive. Cooperative members often lack administrative and technical skills and are unable to compete with their capitalist counterparts, even with the massive injection of microcredit (Piñeiro, 2009: 841-842). There is a strong element of window dressing for micro-development projects which, on closer inspection, are the functional equivalent of occupational welfare programmes (Hintze, 2008, Piñeiro, 2009). According to a representative of the Direction of Cooperatives (SUNACOP), the real purpose of the cooperatives is not to increase national production and to diversify the economy, but to give local people a sense of purpose and a job, consistent with the Marxist perspective that underlines the ‘Bolivarian revolution’:

“Cooperatives represent a new way of life, a means to improving people’s living standards, a way of giving people a job full of dignity and exempt of exploitation.”

[iii]

The official explanation from senior Government officials for the failure of Vuelvan Caras is that individuals were motivated by ‘greed’, as they received a monthly allocation to be part of the programme or micro-credits. This moral argument served to justify the official rejection of Vuelvan Caras and its replacement by the Mission Che Guevara. In fact, the cooperatives faced tremendous difficulties in getting access to circuits of distribution controlled by big corporations (Elia, 2006:76, Piñeiro, 2009). Second, the constitution of cooperatives reflected a culture of amateurism both on the participants' and the government’s side (Elia, 2006: 77). Third, a phenomenon of massive desertion occurred as a result of irregularities in the payment of the monthly allowances. From 2005, approximately 15,000 students quit the Mission. One interviewee explained in this respect:

“From 2005-2006 we witnessed a movement of massive desertion. Field work studies showed that people became tired, especially as they had to deal with inefficiency in public administration and implementation “

[iv]

.

Finally, as Hintze (2008) suggests, the programme suffered from a lack of continuity in terms of political orientations, especially as there was a high degree of turnover at the executive level. This process of permanent change became a clear obstacle to programme consolidation.

Conclusion

In this paper we have sought to explore the relationship between the state and movements for self-management and workers’ control. In doing so we have located our analysis in contemporaneous political economy, noting a spectrum of self-management in practice and a trajectory of development (or retreat). What is clear is that the state, far from having a neutral or passive role, has often sort to shape developments, especially at our key points of trajectory when (capitalist) property relations are threatened or when the circuit of capital is fractured or interrupted. In such instances the role of the state cannot be ignored, or reduced to a ‘non-power’ position whereby the question of state power and the manufacture of ideology based on state power is sidestepped. In our British case an exogenous shock of industrial restructuring led to an endogenous movement for ‘workers’ control’, exemplified by occupations of factories and other workplaces and a campaign to enhance the theory and practice of self-management. However both the occupations and the intellectual movement stumbled as the British Labour government sought to deflect and contain the momentum by the creation of passive forms of ‘industrial democracy’ that sought to bring workers ‘on the board’ but left managerial prerogative and capitalist property relations intact. Support for practical projects was minimal and the intellectual movement, perhaps thrown off course by a weak state response, was similarly thrown into confusion by a ‘fudged’ debate between the exigencies of revolution or reform. This debate challenged and engaged (albeit without definite conclusion) with contemporary theories of the state from Miliband and Poulantzas.  The trajectory towards workers’ control was nevertheless blocked, and the movement receded. In Argentina, the state acted in not dissimilar fashion towards the emerging movement ‘from below’. As in Britain, the movement of recovered factories was initially spurred by a defensive reaction to an acute financial and industrial crisis, but this time firmly located within neoliberal prescriptive restructuring. Following the exogenous shock an endogenous movement developed, which not only challenged capitalist property relations but also began to exploit potential fissures in the circuit of capital, creating genuine alternatives to the logic of capital. Forms of participatory democracy began to take centre stage, circuits of capital were fractured through the establishment of  ‘commons’ and the theoretical debate between state and ‘non-state’ power coagulated. However, the momentum for transformation appeared subsequently to be blocked, and the circuit of capital restored, as the neo-Peronist Kirchner governments incorporated the movement from below by legislation designed to normalise capitalist property relations. Alternative forms of co-operative projects were initiated by the state which blunted the ideological challenge of the movement from below. In effect the role of the state appeared crucial in slowing down and then blocking the trajectory.  In Venezuela, were see a more complex arrangement between state and movement locked into the peculiarities and specificities of the ‘Bolivarian’ revolution. The state has played an active role in encouraging and shaping endogenous projects designed to both modernise industry and also to raise consciousness among the masses. However, the project appears stalled by a lack of ‘real’ self-determination, and is in effect an exogenously produced endogeneity prone to the risk of failure. Finally, in our first example of Cold War Yugoslavia, we see a reverse trajectory of movement away from socialised production to the primacy of the market. We suggest that the Titoist state had constructed self-management from above in its early years ideologically to distance itself from the Soviet alternative but also as a modernisation and disciplining project on a small but growing proletariat. All the weaknesses of self-management were contained in the contradictions between top down authority, still in the Stalinist mode, and a developing class-based divide within the enterprise that denuded self-management of any radical edge. The strategy of survival chosen by the Yugoslav state within the world economy was to introduce market principles into self-managed enterprise, which eventually restored the (capitalist) circuit of capital and full capitalist property relations in post Tito times. As such we see in the Chavista self-management and worker co-operative apparatus an emerging bureaucracy that has echoes of the Yugoslav self-management class. The ‘turn to the market’ was a strategic choice of the Yugoslav state leadership, restricting and containing the opportunities for ‘commons’ in much the same way as the Argentinian state has operated in contemporary times. In all three cases the state has actively intervened to shape or re-shape processes of self-management as part of a strategic choice to reconstitute the nature of the state in the interests of capital accumulation. The state’s adjustment to wider political economy has in such fashion played a crucial role in determining the trajectory and position on the spectrum of self-management.

In summary, our survey would suggest a defining, rather than marginal role for the state. This is not to say that self-management cannot offer a transformative vision towards full workers’ control and socialised production, but rather that this vision cannot be understood in isolation from an understanding of the nature of the state, and neither can it be accomplished without facing the realities of state power. 

 

[ii]

www.obrerosdezanon.com.ar  accessed 2nd July 2012

[iii]

Interview with a representative of the direction of cooperatives, SUNACOOP, Caracas, September 2008.

[iv]

Interview with Professor Hector Constant , Instituto de Altos Estudiosos Diplomáticos, Caracas, September 2008.

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Comments

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