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Social businesses in twenty-first century Latin America: The cases of Argentina and Venezuela

Social Businesses in Argentina and Venezuela
Marcelo Vieta, Manuel Larrabure, and Daniel Schugurensky
Citation: Vieta, M., M. Larrabure and D. Schugurensky (2012). Social Businesses in Argentina
and Venezuela. In L. Mook, J. Quarter and S. Ryan, eds., Businesses with a difference.
Balancing the social and the economic. University of Toronto Press, pp. 132-160.
In the first decade of the twenty-first century, Latin America became an exciting laboratory of
alternatives to neoliberalism. This was no small feat, because during the last decades of the
twentieth century neoliberalism was the only game in town. The rise of neoliberalism in the
region can be traced back to 1973 in Chile, when General Pinochet took over the country
through a bloody coup d’etat. Chile soon thereafter became the first widespread test of free-
market oriented economic policies proposed by the Chicago School of Economics. These
policies, which recommended privatization of public companies, trade liberalization,
deregulation of services, reduction of public budgets, and labour flexibility, among other
strategies, were introduced by the Chicago Boys, a group of Chilean economists trained at the
University of Chicago. In the following years, in a context of military coups and strict
conditions imposed by international agencies (often related to the dismantlement of the welfare
state), neoliberalism became the dominant model in other Latin American countries as well.
This dominance became even more hegemonic after the fall of the Berlin Wall in 1989
and the rise of economic globalization. The absence of viable options led British Prime
Minister Margaret Thatcher to boast that ‘there is no alternative’ to neoliberalism. However, by
the end of the twentieth century, it became clear that the neoliberal experiment had not solved
Latin American societies’ economic difficulties. The expected ‘trickle down’ effect of the
‘invisible hand of the market’ on wealth redistribution became a ‘vacuum up’ effect instead. In
several countries, neoliberalism promoted corporate welfare at the expense of social welfare,
widened the gap between rich and poor regions and people, deteriorated labour conditions,
dismantled domestic industries though cheap imports, favoured transnational capital,
monopolies and oligopolies, and generated massive unemployment and underemployment
(Harris, 2000; Portes & Hoffman, 2003). Consequently, during the first decade of the twenty-
first century, efforts to create viable alternatives to neoliberalism began to flourish in different
parts of the region. This can be attributed to at least three factors.
First, the economic and political crises that resulted from the failure of neoliberalism –
the socio-economic collapse that was most strongly felt by the region’s working and
marginalized classes – gave birth to a variety of community groups, grassroots movements, and
social economy organizations, including neighbourhood assemblies, bankrupted factories
recovered by their workers, community kitchens, co-operatives, bartering networks, and trade
unions that included the unemployed and the retired.
Second, the ideological dominance of neoliberalism was challenged by the World
Social Forum, launched in Porto Alegre, Brazil, in 2001 as a response to the World Economic
Forum held annually in Davos, Switzerland. Since then, the World Social Forum and its
regional and local forums have congregated thousands of people under the banner ‘another
world is possible.’ In line with this slogan, Susan George (2008), a prominent critic of
neoliberal policies and a participant of the World Social Forum, contrasted Thatcher’s ‘there is
no alternative’ thesis with the idea that ‘there are thousands of alternatives.’
Third, electoral politics in many Latin American countries shifted drastically, as the
political parties that challenged neoliberalism moved from opposition to government. Election
after election, a chain of left and centre-left governments (known as the ‘pink tide’) expanded
throughout the region, promoting wealth redistribution and innovative experiments with power
decentralization, such as participatory budgeting or communal councils. Some of these
governments proposed a paradigmatic shift in development models, using as foundation the
indigenous philosophy of ‘living well,’ which includes the principles of nurturing life
(recognizing the rights of all living species), communitarianism, complementarity, reciprocity,
solidarity, and participation.1
It was in this historical context that the social economy expanded in Latin America
during the first decade of the twenty-first century, sometimes due to grassroots initiatives
responding to an economic crisis, sometimes due to projects promoted by government
agencies, and sometimes due to a combination of both factors. This expansion included
attempts to replace a ‘social economy of the poor’ (downloading social programs to
community organizations) with a new kind of solidarity economy in which alternative
economies are prefigured by grassroots and community groups, with varying levels of
government support.2
In this chapter, we present two case studies of social businesses that attempt to balance
their social and economic missions: Argentina’s worker-recuperated enterprises (empresas
recuperadas por sus trabajadores, or ERTs)3 and Venezuela’s socialist production units
(SPUs).4 In Argentina, the case study included twenty-six participants in four ERTs in different
sectors (print shop, waste disposal and parks maintenance, newspaper publishing, and health
provisioning) located in the cities of Córdoba, Buenos Aires, and Avellaneda. In Venezuela, it
included eighteen participants who belong to three SPUs located in the states of Lara and
Barinas: a tomato processing plant, a coffee processing plant, and an agricultural equipment
service centre. In both countries, we interviewed other key figures such as researchers,
government officials, and social movement leaders.
The transformative potential of the social economy and its myriad organizations and
practices span a continuum, with reformist designs for a kinder capitalist market system on one
end, and more ambitious visions for a radical economic and political democracy on the other
(Amin, 2009; De la Barra & Dello Buono, 2009; Fontan & Shragge, 2000). Both ERTs and
SPUs are social economy organizations that tend to fall towards the latter end of the spectrum.
That is, when compared with strictly capitalist firms, they engage in substantively different
economic practices under the auspices of self-management, such as worker-led decision-
making processes, worker-run or worker-reorganized labour processes, community
development, and involvement in solidarity economies. At the same time, they both face the
challenge of operating within capitalist markets while prefiguring paths beyond those markets
in the economies of solidarity they are helping to forge. Although ERTs and SPUs have
different origins – ERTs were started by workers trying to recuperate failing private firms with
little state support, while SPUs were born as state-sponsored, co-managed productive entities –
both types of social businesses result in similar outcomes for their workers and the
communities they engage with. As suggested in chapters 1 and 7 in particular, like many social
economy organizations, ERTs and SPUs incorporate values of mutual aid, community well-
being, social objectives, and democratic self-determination, and aim at overcoming gaps and
social inequalities brought on by markets and economic crises (Amin, 2009; McMurtry, 2010;
Pearce, 2009; Quarter, Mook, & Armstrong, 2009; Vaillancourt, 2010). In our research, we
explored five questions:
1 What is the history of the new kinds of social businesses that emerged as reactions to
2 What are their relationships with the state and the market?
3 How are they organized internally?
4 How do they fullfill their social mission?
5 What are their main commonalities and differences?
In the following pages, we address the first four questions, first in relation to
Argentina’s ERTs, and then regarding Venezuela’s SPUs. After presenting the findings from
the two case studies, we examine the fifth question and discuss the main similarities and
differences between these two types of social businesses. Finally, we argue that these two
experiments prefigure a new phenomenon within Latin American social economy businesses
that is somewhat different from the traditional co-operatives and the state-run enterprises of the
twentieth century.
ERTs as Social Economy Businesses
Historical Background and Current Situation
Argentina’s empresas recuperadas por sus trabajadores (ERTs), while all unique, tend to
follow a similar pattern. After years of suffering under the economic hardships of
neoliberalism faced by small- and medium-sized enterprises (SMEs) throughout the country,
broken institutional promises, the threat or outright closure of the firm due to legal or illegal
declarations of bankruptcy by owners, and the ineptitude or greed of business owners reflected
in unpaid benefits and salaries, workers at a particular firm were pushed into carrying out risky
workspace takeovers. Founding an ERT sometimes entails long periods of round-the-clock
occupation and resistance against violent attempts at eviction. The slogan of the National
Movement of Recuperated Enterprises (Movimiento Nacional de Empresas Recuperadas, or
MNER), borrowed from Brazil’s landless movement, captures the typical ERT’s three-staged
struggle towards self-management: ‘ocupar, resistir, producir.’
Argentina’s ERTs can be found in many sectors, including printing and publishing,
metallurgy, foodstuffs, waste management, textiles, tourism, health, shipbuilding, mining, and
oil refining (Fajn, 2003; Lavaca, 2004; Rebón, 2007; Ruggeri, Martinez, & Trinchero, 2005;
Vieta & Ruggeri, 2009). Currently, there are over 200 ERTs that are self-managed by roughly
10,000 workers (Palomino, Bleynat, Garro, & Giacomuzzi, 2010; Ruggeri et al., 2010). While
ERTs represent a small fraction of Argentina’s worker co-operatives,5 and their workers
represent a tiny percentage of Argentina’s fifteen to sixteen million active participants in the
urban economy (Ministerio de Trabajo, 2009), they have nevertheless inspired social change
(Palomino, 2003). These firms not only show workers’ innovative capacities for saving jobs
and avoiding the fate of precarious welfare plans or structural unemployment, but also
highlight their ability to self-manage their own work environment.
There are two distinct phases in the development of ERTs. The first phase, from 1998
to 2003, took place in the context of a deep political and economic crisis that led to record
levels of business bankruptcies, underemployment and unemployment, and a proliferation of
ERTs. During this period, strategies and tactics of workplace takeovers and business
conversions into worker co-operatives started to be articulated and formalized. ERT
associations, leaders, and lobby groups prioritized political mobilization, solidarity work with
social justice groups, and struggles to legitimate workplace takeovers and conversions with the
political-judicial system and the Argentine public. The second phase, from 2004 to 2010, took
place during a period of economic recovery and political stability. ERTs continued to emerge,
but at a slower pace. They developed specifically as worker responses to micro-economic
crises within particular economic sectors or workplaces and were not as etched with the anti-
systemic discourses that brought first-phase ERTs in close affinity with organizations of the
unemployed (piqueteros), neighbourhood assemblies, barter clubs, and land- and housing-
rights movements that swelled Argentina’s social and solidarity economies around the turn of
the millennium (Palomino et al., 2010; Vieta & Ruggeri, 2009).6
As social economy businesses, ERTs face several challenges as they consolidate
production processes: securing organizational stability, gaining market share, fixing or
replacing depreciated machinery, retraining workers, recovering social security benefits,
educating ERT workers in the values of co-operativism, forging economic networks of
solidarity with other ERTs and traditional co-operatives, and lobbying for laws that would
improve their labour conditions and competitive advantage. By the end of the first decade of
the 21st century, ERTs had secured considerable legitimacy in the eyes of Argentina’s public
and some members of the political and judiciary establishments. Furthermore, the pioneering
strategies, practices, and initiatives derived from ERTs have taken hold in Argentina’s working
class sectors. National and regional governments have yet to implement coherent policies and
procedures for assisting ERTs, mainly due to the state’s continued acquiescence to the
capitalist economic model and its continued privileging of private property. However, the
process of starting a worker co-operative from the ashes of a failed owner-managed firm is
now, together with traditional business strategies of declaring bankruptcy or ‘restructuring,’
one more option available for failing enterprises. As such, ERTs’ legitimacy is rooted in their
positive influence on the communities they work within, and their value extends far beyond
their numerical size.
Considering ERTs’ long struggles for self-management, the deteriorated technological
infrastructure recovered by workers from failing capitalist firms, the reduced size of an
individual ERT’s workforce in contrast to the firm under owner management, the limited
access to credit, and the scarce government assistance, it is not surprising that most ERTs
produce below their potential capacity when compared with their production runs under owner
management. Most ERTs have a workforce that is about 80 per cent smaller than it was under
private ownership and average from twenty to fifty workers. Workers who continue in the ERT
are often older than those who leave, and tend to be over age forty. Moreover, the younger
workers who leave tend to be professionals, administrators, or in possession of more
transferable technical skills, which results in a paucity of professional, technical, and
administrative staff by the time the remaining worker collective decides to take over a failing
firm. This is because it is easier for administrative or professionalized workers than for blue-
collar or service sector workers to find jobs elsewhere. Argentina’s job market has also
traditionally favoured younger workers. Rather than risk the problems and insecurity of self-
managing a firm in trouble, most of these younger and more technical and administrative
workers – who could help immensely in the reorganization of an ERT’s labour process –
decide to leave for more secure positions in other owner-managed private firms (Ruggeri et al.,
2005; Vieta & Ruggeri, 2009).
For some ERT workers in our study, political engagement emerged from the personal
and economic crisis they found themselves in. For almost all of these workers, their hope
grows from their responses to practical challenges rather than from an enlightened vanguard.
Carlos, a member of a recovered print shop, observed:
Early on in the struggle to reclaim our work we started fighting for our salaries,
for getting out of our severe debt loads that the boss had left us. Now, looking
back on our struggle, I can see where the change in me started, because it
begins during your struggles. First, you fight for not being left out on the street
with nothing. And then, suddenly, you see that you’ve formed a co-operative
and you start getting involved in the struggle of other enterprises. You don’t
realize it at the time but within your own self there’s a change that’s taking
place. You realize it afterwards, when time has transpired, doing things that
you would never imagine yourself doing.
About 94 per cent of ERTs self-organize under the legal framework of a worker co-
operative (Ruggeri et al., 2005), but they have few close or sustained connections with
Argentina’s traditional co-operative sector. The main reason for this is that ERTs did not
emerge from the co-operative movement but from unionized workplaces identifying with
Argentina’s labour movement. Indeed, most ERT members we spoke with still perceive
themselves as laburantes (workers) rather than cooperativistas. As Victor, a founding member
of a waste management ERT, told us:
I feel that I am a laburante, and I will continue to be one! When we go to
community meetings, we go with our overalls. And wearing our overalls all the
time while at work is important to remind us of where we came from. This is one
of the things we keep on reminding our younger members of the co-op, to always
have their overalls on when they are at work and in the community during
working hours.
Although most workers who started ERTs had no experience with any form of co-
operativism (Martí et al., 2004), they were inspired by non-hierarchical social justice
movements that emerged around the same time as responses to the neoliberal model. ERT
workers turned to the legal and organizational framework of worker co-operatives because of
the public debates that took place in the early years of the phenomenon, when a key issue on
the table was what legal and administrative frameworks ERTs were to take: nationalization
under workers’ control or worker co-operativism. While nationalization under workers’ control
(modeling the Yugoslavian or current Venezuelan models of nationalization and co-
management) was theoretically and historically plausible, early ERT adopters scrapped the
option when it became clear that the state refused to go along with it (Ruggeri et al., 2005). The
only practical and legal alternative was the already viable and long-established co-operative
Today, it is widely accepted in Argentina that ERTs not only save jobs and maintain a
community’s productive capacity, but also bring new forms of co-operative businesses into the
economy that, via their social missions and the solidarity economies they forge, contribute to
community economic development. Indeed, during the last decade, ERTs were able to respond
to economic, political, and legal challenges, and simultaneously establish themselves as viable
social economy businesses. As worker-driven and community-based organizations, ERTs’
social innovations attest to their efficacy for grassroots economic and social development.
Relation to the State and the Market
Restarting production as self-managed firms in depleted or bankrupted workplaces with little
or no inventory and capital, depreciated machinery, and lost market share often means that
ERT workers find themselves attempting to co-operatively steer a precarious business from an
unusually disadvantaged position within a competitive market. More often than not, their
competitors are private firms that have not gone through the challenges that ERTs have had to,
such as reviving production from within a failed firm while, at the same time, learning new
skills and strategies for co-operativism and self-management. These challenges are most acute
in the first year or two of an ERT as its workers face steep learning curves, the democratic
restructuring of their production processes, and making do with their depleted means of
The challenges of restarting the firm are further compounded by the scarcity of
meaningful state assistance or coherent national policies supporting ERTs. Argentina’s national
and regional governments tend to treat each ERT on a case-by-case basis, seeming to
arbitrarily assist some while overlooking others. This is in contrast to Venezuela’s state-
sponsored SPUs, or the experience of worker-recuperated or self-managed firms in Brazil,
which enjoy more support from the Partido dos Trabalhadores (PT) government and Brazil’s
main union central (Vieta & Ruggeri, 2009). The Argentine state could go a long way in
helping ERT workers restart production and stabilize by, for example, setting up a national
fund for the startup capital needs of ERTs, automatically expropriating failing firms on behalf
of their workers when a certain percentage of the workforce desires to self-manage it,
amending the country’s labour laws in order to allow self-managed workers to continue to
receive the same social security benefits afforded to them when working as employees, or
having the state engage in purchasing policies privileging ERTs and other self-managed firms’
goods and services over those of the private sector.7
Argentina’s reluctance to implement such nation-wide policies for ERTs can be
attributed to the fact that the national government still remains heavily beholden to the
capitalist-entrepreneurial class (Vieta & Ruggeri, 2009). Although the governments of Néstor
Kirchner (2003 to 2007) and Cristina Fernández de Kirchner (2007 to present) have left
stronger social democratic imprints on Argentina in contrast with other recent national
governments, the state is still caught in a conundrum: actively support these workers by setting
up official policies and programs to help convert any troubled firm in Argentina into worker
co-ops or continue to officially uphold, first and foremost, private property rights and treat
ERTs on a case-by-case basis. To date, the Argentine state has, in actions if not in words,
clearly chosen the latter.
Elena, a founding member of her ERT, underscores ERTs’ myriad challenges:
Our challenges? They are very big. Anxieties accompany us along the path [to
self-management and] toward lifting ourselves out of the difficulties we faced
[ever since things took a turn for the worse with our previous boss ...] Lifting
yourself out of the void is hard, and you already know that in this country there
are, or I should say, there aren’t regulatory frameworks in place that permit you –
for various political reasons – to have access to the means of slowly emerging out
of your difficulties, to walk along the path of production, grow, build more jobs ...
So then, you fall out of the system, you aren’t a subject of credit, you don’t have
access to working capital (no one gives it to you), you can’t access credits or
funds allocated to small and medium sized businesses because we are a formerly
bankrupted enterprise, and as a bankrupted enterprise now managed by its
workers we are not [completely] recognized in this system.
While non-conventional sources of funding – such as community solidarity fund drives,
some assistance from foreign NGOs, and some small loans and state subsidies have helped
start or sustain some ERTs, these irregular funding sources, in addition to the lack of consistent
state support, have added to their tenuous existence and to the continued instability of their
workers. Fajn and Rebón (2005) point out that the financial precariousness spawned by
inconsistent state policies and the difficulty in meeting production demands and reaching new
markets can push ERTs to focus on generating as much revenue as possible instead of on co-
operative values or their social missions. During such times, ERT workers recognize that they
might not generate sufficient revenues to pay salaries or the business’s accounts payable, and
intensify their production practices to make up for these shortfalls. These moments illustrate an
implicit tension with self-managing a firm within a system made up of highly competitive
markets (Craig, 1993; McNally, 1993): when staying afloat becomes the primary focus of
workers in co-operatives, they risk losing sight of the collective spirit and democratic ideals
that drove them to become a co-operative in the first place. Arguably the biggest challenge
faced by each ERT is the risk of falling into situations of self-exploitation’ in order to stay
afloat, such as working overtime without adequate compensation, reducing salaries, not taking
lunch and coffee breaks, mistreating associates, or the emergence of cadres of co-op members
that behave like de facto bosses (Vieta & Ruggeri, 2009).
In light of these additional challenges, workers’ autonomy to make decisions has
allowed them to develop creative responses. Indeed, ERTs depend on the ingenuity and
determination of their workers to ensure the ongoing operation and sustainability of the
enterprise. ERT workers have ‘recuperated’ a variety of business practices for co-operative
ends,8 for two reasons: first, out of necessity, because low inventory and just-in-time
production is a more affordable way to initially operate a depleted firm; and second, because
these modes of production are, in certain sectors, efficient ways to self-manage a worker co-op,
especially one that has gone through financial challenges.
Marketing and administrative needs are usually complemented by workers developing
new skills and capacities through job rotation strategies, university extension programs, and
sharing knowledge from workers in sympathetic social movements. The ways ERTs respond to
challenges suggest that workers possess the motivation, skills, and self-actualizing capacity to
contest the logic of coercion, compulsion, and forced specialization found in dominant
corporate production models.
Other innovative initiatives that respond to unmet revenue goals due to
underproduction, depleted machinery, lack of coherent state support, and capitalization issues,
and that also differ from how most capitalist firms tend to operate, include:
recycling left-over materials from production processes for economic and ecological
approaching lenders as ‘less risky’ collective coalitions of ERTs that, in effect,
creatively addresses the banking system’s risk-assessment strategies;
accessing government funding and business development programs in partnership
with university research teams, local or foreign NGOs, or research initiatives working
in conjunction with other recuperated enterprises;
organizing neighbourhood solidarity fund drives;
establishing networks of experts, facilitated by supportive university programs and
technical institutes, for aid in administrative tasks and technological repair and
working with supportive customers and social movements to re-establish and expand
market share via, for example, word of mouth; and
developing ‘economies of solidarity’ among ERTs where, in the spirit of the sixth co-
op principle (i.e., co-ops co-operating), production inputs, machinery, administrative
needs, technological expertise and repair, and even orders are shared among ERTs in
related sectors.
Internal Democracy
Most ERT workers are accustomed to hierarchical positions in capitalist enterprises. With the
creation of their ERTs, workers become members of a new co-operative, even if they continue
to work in the same physical space performing similar tasks. The main difference is that the
previous authoritarian order has become a more democratic structure, with no direction from
typical capitalist management models. Zanón, a ceramics manufacturer in the province of
Neuquén and one of the most emblematic ERTs, was renamed FaSinPat, or Fábrica Sin Patrón
(Factory Without Bosses) to highlight its new structure. Some of our interviewees reported that
a worker co-op structure facilitates addressing the communal needs and desires that resulted
from self-managing a business. Pablo, president of a print shop ERT, recalls that:
Before, under owner-management, there was always someone marking out the
rhythm of your work. Now, things are different. We have other obligations based
on our own responsibility to one another and our jobs. Before we were
‘workmates’ but today we are like socios [associates], where the problem of one
socio affects us all. Before we were just mere acquaintances, we didn’t have
direct contact with all of our workmates, but now we’re a much tighter unit, and
what binds us together is the fact that we’re all responsible for this co-operative.
These communal desires manifest in the democratic form of ‘one worker, one vote’ and
the equitable redistribution of revenues most ERTs adopt. Although Argentine co-operative
law only requires one annual workers’ assembly, ERT workers often hold more frequent
assemblies monthly, and, during particularly challenging periods, weekly. This practice alone
generates far more administrative and managerial transparency than when these firms operated
under owner-management (Fajn, 2003; Ruggeri et al., 2005). Other non-hierarchical work
processes include flexible ad hoc work committees and labour processes that change with the
needs of a particular order or production run and that are integrated into day-to-day decision-
making processes. Looser and direct communication structures on shop floors foster flexible
and open dialogue between workers.
Once the co-operative model takes hold in an ERT’s workforce, most members also
become committed to the equitable distribution of surpluses. Interestingly, there is a
preponderance of egalitarian pay equity schemes, no matter how senior or skillful a worker is
(Fajn, 2005; Palomino, 2003; Ruggeri et al., 2005).9 This is another promising innovation that
reconceptualizes work within a productive entity as it transforms organizational hierarchies
while recognizing the contributions of all workers to its production processes. This is a
noticeable innovation because the practice of equitable pay is not necessarily common in
traditional co-operatives or even in workers co-ops (Oakeshott, 1990; Smith, Chivers, &
Goodfellow, 1988).
Unlike the previous model, in recuperated enterprises revenues are distributed between
workers’ salaries, the material needs of workers that periodically arise (such as a worker’s or
family members’ health costs), and pension top-ups for retired members, before allocating
remaining revenues to the production needs of the firm. Thus, in ERTs, as in other worker co-
ops, it is the workers’ assembly that decides how revenues are distributed rather than
management or profit logic. As such, the tendency with most ERTs in our study is to attempt to
engage in forms of surplus allocation rooted in the notions of solidarity and the wellbeing of
co-op members, their families, and surrounding communities. In short, ERTs are rooted in
collective behaviours that aspire to minimize surplus value and wealth accumulation for
individuals, and maximize socialized wealth and social production for all members.
Social Mission
Like all social economy businesses, ERTs have social missions and objectives. ERTs’ new
forms of social production and the sharing of social wealth often include the surrounding
communities. Many ERTs open their workspaces to uses besides production or service
delivery, including on evenings and weekends. Some of them are always open to the
neighbourhood, and double as cultural and community centres, free community health clinics,
education programs for marginalized children and adults, alternative media spaces, and
community dining rooms run by workers, neighbours, or volunteers.
As an example, the print shop Artes Gráficas Chilavert doubles as a high school for
adults and after-school programs for children. It also houses the ERT Documentation Centre,
which is run by student volunteers associated with the University of Buenos Aires, and used
frequently by researchers interested in the ERT movement. A vibrant community centre called
Chilavert Recupera operates on its mezzanine level, hosting plays, art classes, music concerts,
and community events often linked to Argentina’s social justice movements. Industrias
Metalúrgicas y Plásticas Argentinas (IMPA), a large metallurgic ERT, is also known as ‘The
Cultural Factory’ because it dedicates a large portion of its space to an art school, silk-screen
shop, free health clinic, community theatre, and adult education high school program. Artes
Gráficas Patricios houses a primary school, a community radio station, and a dental and
medical clinic, all run by neighbours, social movement groups, and health practitioners
volunteering their time. Hosting such cultural and community spaces and involvment with the
needs of local communities is not just a way of giving back to the neighbourhood out of self-
interest or corporate goodwill. Instead, ERT members tend to see their workspaces as
continuations of the neighbourhood.
While some ERTs open up their doors to the community, others (like FaSinPat and
UST10 in the greater Buenos Aires city of Avellaneda) integrate revenue sharing with the
community into their social missions and their business practices, which extends their
productive efforts out into the surrounding neighbourhoods. These two ERTs are renowned for
dividing revenues between the needs of the firm, workers’ salaries, and community service.
FaSinPat frequently donates tiles to community centres and hospitals, organizes cultural
activities for the community on its premises, and built a community health clinic in three
months in an impoverished neighbourhood that had been demanding such a clinic from the
provincial government for two decades without success. Similarly, UST consistently redirects a
significant portion of its revenues to community development projects, such as an affordable
housing project for its workers and the surrounding community. This initiative has already
built one hundred attractive townhomes to replace inadequate housing for its own members and
other neighbours. UST’s president told us that providing for the life needs of workers and the
surrounding neighbourhood in areas such as decent housing, reskilling, education, and literacy
are key motivators for the co-op. Indeed, he added, the co-op is in business in order to help
provision the life-needs of its workers and neighbouring communities. In addition, UST built
and continues to support a youth sports complex in the neighbourhood and an alternative media
workshop and radio program, while also heading a unique plastics recycling initiative for the
large low-income housing project located near its plant.
In conclusion, ERTs emerged during a deep economic and political crisis and,
throughout their short history, have managed to survive in a hostile environment, pay back the
limited loans that they have access to, generate democratic governance processes, establish a
more egalitarian wage distribution system, create and preserve jobs when many other firms
were firing workers, extend their work out into the community, and facilitate much needed
community economic development projects. Indeed, because ERTs put people before profits,
when confronted with a drop in demand, instead of downsizing (as for-profit companies
typically do), they sometimes decide to absorb the drop in income evenly by, for instance,
reducing working hours. Finally, the transition to self-management generated a new work ethos
based on the primacy of shared responsibility, collective problem-solving, and horizontal
communication (Coraggio & Arroyo, 2009).
SPUs as Social Economy Businesses
Historical Background and Current Situation
In the first decade of the twenty-first century, Venezuela witnessed an explosion of co-
operatives. Harnecker (2008) reports a growth from 877 co-operatives in 1998 to 158,917 in
2006. Another study (ICA, 2010) indicates even higher growth, from 1,045 in 2001 to 286,485
in 2009. Contrasted with the ERT experience, this impressive expansion was less the result of
spontaneous organizing than of public policy, including the 2001 Special Law of Co-operative
Associations and the Vuelvan Caras co-operative development program (Harnecker, 2008).
The proactive role of the government in relation to co-operatives was also evident in its
economic support for the sector, which included granting preferential aid (Llerena, 2006) and
access to government contracts (Díaz, 2006). Indeed, the main factor behind the expansion of
the co-operative sector in Venezuela was strong government support, which can be traced back
to President Chavez’s electoral promise of breaking from the neoliberal model applied in the
country in the 1980s and 1990s.
The rapid and substantial growth of the co-operative sector, however, proved
unsustainable. Indeed, after a few years it was found that most of these co-operatives were
inactive either because they lacked technical capacity or because they were simply fronts
created to access government funds. The low percentage of functioning co-operatives (23 per
cent) may justify the label ‘cemetery of co-operatives’ (ICA, 2010) in reference to the
Venezuelan co-operative reality, but the absolute number (50,000 to 60,000) is nevertheless
higher than any other Latin American country, and is also higher than all active co-operatives
in Argentina, Brazil, and Colombia combined (Harnecker, 2008; ICA, 2010). Over 80 per cent
of them are very small (five to ten members), and about 15 per cent of them employ between
eleven and fifty people (Díaz, 2006). The majority of these co-operatives operate in the
services and productive sectors, with those in transportation coming at a distant third.11
The rapid expansion of the co-operative sector has created several problems. In the last
few years there has been a shift in government policy from supporting the traditional co-
operative model to the creation of approximately 3,000 Unidades de Producción Socialistas, or
Socialist Production Units (SPUs). These were designed by the Ministry of Popular Power for
the Communal Economy and are being posited as central to the country’s transition to ‘twenty-
first century socialism’ (Albert, 2008). In this transition, the Venezuelan development model
for the social economy is conceptualized as a triangle that includes social ownership of the
means of production, social production organized by workers, and production for social needs
and purposes (Lebowitz, 2010). Social ownership of the means of production ensures that
communal, social productivity is directed to the free development of all rather than to satisfy
the private goals of capitalists, groups of producers, or state bureaucrats. Social production
organized by workers allows them to develop their capacities by combining thought and action
in the workplace. In addition to producing products, they can recreate themselves as self-
conscious collective producers. The satisfaction of social needs and purposes is the necessary
goal of productive activity in the new society because it shifts the focus from self-interest and
selfishness towards the needs of others and relations of solidarity. The extent to which SPUs
are moving towards this ideal type of social economy is still an open question, as they operate
within the orbit of the state but with relative high levels of control by workers and community
Venezuela’s SPUs produce or distribute a variety of goods and services, from
agricultural production to equipment rental. Most of them are relatively small, employing
twenty to one hundred people. Institutionally, SPUs are nonprofit organizations owned by the
state and managed democratically by a combination of three actors: the workers, local
communal councils (neighbourhood associations found throughout the country), and state
representatives. These characteristics distinguish SPUs from capitalist firms and from
Venezuelan worker co-operatives. At the production stage, SPUs work closely with small and
medium local private producers. The goods they produce are then distributed through
government run discount stores known as MERCAL.
Relation to the State and the Market
SPUs can be thought of as the individual parts that comprise the larger body known as social
property enterprises (SPEs). In other words, each SPE is constituted by several SPUs.12 SPUs
are linked to the state through their umbrella SPEs, and SPEs, in turn, are linked to the state in
several ways. First, SPEs are administered by the Registry of Social Production Enterprises
(REPS in Spanish), which was created by the government in 2005 as part of the program of
social production enterprises (Arenas, 2008). The Registry is, in turn, linked to the state-owned
oil company, PDVSA, whose role as part of the program is to help SPEs through, among other
things, preferential contracts and financing (PDVSA, 2006). Second, each SPE belongs to one
of the many state corporations created by the government to promote economic and
development policies that include fostering the ‘popular economy,’ the preferred name for the
social and solidarity economy in Venezuela. For example, the three SPUs that we studied
belong to three different SPEs, which, in turn, belong to one single state corporation, the
Venezuelan Agrarian Corporation (CVA in Spanish). Third, SPEs (as well as the state
corporations they belong to) receive direct political guidance from the government ministry
responsible for the sector of the economy they operate in. In the case of the three SPUs we
looked at, the three corresponding SPEs were under the guidance of the ministry of popular
power for agriculture and land.
As economic entities, SPUs, like other businesses, produce and sell commodities. These
are produced through the labour of SPU workers who are hired by the SPU’s administration in
the context of a labour market. In other words, SPU workers sell their labour to an employer
(in this case the Venezuelan state) in return for a wage. However, according to workers
interviewed, wages at SPUs are considerably above the minimum, which reflects the
government’s commitment to provide fair and decent salaries. In order to meet its mission and
support consumers and communities most in need, the commodities SPU workers produce are
then sold in government and community-run ‘popular markets’ (MERCAL) at below-market
prices.13 As a result, millions of Venezuelans have access to a variety of goods that they would
not be able to afford otherwise.
The government’s commitment to selling the goods produced by SPUs at below market
price and to paying workers a fair salary means that SPUs do not generate enough revenue to
cover their costs and therefore depend on state funds. Indeed, as noted by a state administrator,
most SPUs do not generate a profit. This does not mean that there is not a conscious attempt by
both the SPU’s administration and their workers to produce more efficiently. Indeed, several
interviewees in the SPU workforces and in the state administration argued that eventually
SPUs could become self-sufficient. If SPUs were to operate without the financial help of the
state and were able to generate a surplus, both the government and workers would expect that
such a surplus would be managed through the SPUs’ democratic structures, similarly to ERTs.
Agricultural SPUs have a particular relationship with local producers from whom they
purchase raw materials. In accordance with their mission of developing the country’s
agricultural sector and supporting small and medium producers, SPUs purchase raw materials
from local producers at a higher than average price, paralleling fair trade practices. In many
cases, this price remains fixed throughout the year in an attempt to combat market-driven price
fluctuations that can be devastating for farming families. Moreover, to fulfill their goals of
fostering social consciousness and moving beyond market relations, SPUs engage the
producers in a variety of ways. For instance, they organize educational activities on topics
ranging from technical education on farming practices to political education; co-ordinate local
artistic fairs; and, as will be discussed later, incorporate local producers in the SPUs’
democratic structure. In some cases, SPU workers actively engage in the production process.
For example, they sometimes help producers till their land and pick their crop when producers
lack the means to do so or when they feel it is not worth investing time and effort into such
activities because the final product would not bring enough revenue.
SPU hiring practices are also unique. Although SPU workers are hired in the context of
an open labour market, in contrast to traditional businesses, all hiring is subject to a democratic
process in which communal councils, SPU workers, and state management are involved.
However, state managers have the final word on hiring. Although this may lead to tokenistic
consultations, our interviewees suggested that the needs of communities and individuals are
seriously considered in the decisions. The result is that the market logic, which dictates that
only those individuals that are most capable of generating profit are hired, incorporates the
logic of participatory democracy and community needs.
Internal Democracy
A distinctive feature of SPUs, similar to Argentina’s ERTs, is their highly democratic
character, which includes an emphasis on active participation and co-operation with local
communities and producers. Democratic practices within SPUs include both formal and
informal dynamics. Formally, all SPU participants, as with most worker co-operatives, have
the right to vote: one person, one vote. The right to vote is exercised most prominently through
the Workers’ Council, a political body composed of all SPU participants and their state
representative. The Workers’ Council meets at general assemblies, which all SPU participants,
regardless of job description, are allowed to attend. Issues that might be discussed include:
production targets; the internal organization of the workplace; the election of individuals to
working groups or committees that deal with specific issues at each SPU, such as housing,
sports, and health; and the election of a spokesperson committee. Of all committees, this is the
most important, as it represents the Workers’ Council as a whole and is responsible for making
smaller day-to-day decisions. The decisions at the assembly are made through a simple
majority. The frequency with which assemblies are held is determined by the workers at each
Although the general assembly is the main forum where voting takes place, decisions at
the committee level are also made through voting. In addition, each committee can elect a
spokesperson. Spokespeople are not quite representatives, as their job is not to represent the
larger political body but to simply voice its will (the word ‘spokesperson’ in Spanish is
‘vocero’ meaning the one who voices). Although spokespeople have some political
representation, there is a conscious attempt on the part of SPU members to minimize it.
Therefore, spokespeople can make decisions, but only after the whole committee has met and
discussed the issue at hand. This is different from typical representative models where, once
elected, representatives are often free to make decisions independent of those who voted for
In addition to the general assembly and working committees, SPU participants practice
democracy within the Socialist Council of Participation. This democratic and non-hierarchical
space is comprised of spokespeople from three different political bodies: local communal
councils, local producers, and the SPU. The spokespeople meet regularly to discuss their
activities and general concerns. The Council also participates in the hiring process at each SPU
by nominating potential job candidates. The hiring process requires four spokespeople,
including representatives from the local producers, the local communal councils, and the SPU
Workers’ Council, along with the SPU co-ordinator, who represents the state. Through a
process of democratic consensus, the council nominates a small number of job candidates, and
the co-ordinator then makes the final decision. This innovative hiring process sets SPU apart
from other social economy enterprises in Venezuela.
In addition to the formal democratic channels of the general assembly, elected
committees, and participation councils, SPU members practice democracy regularly in the
workplace. Indeed, when asked about democratic practices, SPU participants referred to daily
interactions just as much as to the formal processes. Paralleling ERTs’ job-sharing strategies,
two members of a coffee processing SPU pointed to the spontaneous and horizontal nature of
these informal interactions:
If a person is needed somewhere else, we set up a meeting: “look, who can go over there,
who is available, who is ready to go over there, who can and who cannot?” It’s done in a
democratic manner.
My job is purchasing, but if the coffee processing assembly line is going to
stop because there is a need for a set of hands, I’ll go over there. If help is
needed to unload [the coffee], then let’s go there. If somebody needs help at
MERCAL [the subsidized popular shop adjacent to the SPU], they’ll say,
“look, hold my post because I’m going out.” I’ll say, “yes, no problem.”
Rodrigo, the administrative assistant at another SPU, recalled an episode that also
highlights spontaneity and horizontality as part of informal daily interaction. He pointed to
several field operators who were moving the enterprise’s fifty-six tractors from one place in the
parking lot to another, and explained that this was done every day to keep the engines healthy.
The idea, he recalled, came from a casual conversation with a security guard who, in this case,
was part of an independent co-operative hired by the SPU, and was not technically part of the
SPU itself. Rodrigo’s story illustrates that part of what makes the SPU democratic is how
people share information and ideas openly, regardless of their actual job description or formal
rank. Rodrigo saw the security guard not as an employee that he, as administrative assistant,
could boss around, but rather as ‘a human being, the same as myself.’
Ana, a worker at a tomato processing SPU, noted that the ethos of participation
motivated her and many others who were previously passive to become more active in
democratic processes of deliberation and decision-making. As she observed, ‘Now everyone
participates, everyone. Here we have protagonistic participation. We all talk. In some cases,
there have been people, including myself, that did not want to participate in something. But
here I am participating because in the end I was convinced.’ It should be noted that Ana was
not upset at having been ‘convinced’ she should actively participate. In fact, as she went on to
explain, the act of participation became a source of personal growth. This is consistent with the
statements of many other SPU members, who expressed enthusiasm for being part of a
collective enterprise, for having a say in decisions that affect their organizations, and for being
protagonists of a new historical construction aimed at democratizing both the economy and
social relations.
Social Mission
One of the defining characteristics of social economy enterprises is that they possess a social
mission that goes beyond simply generating a profit. The SPU social mission is complex and
emanates from various government levels and from workers themselves. The government’s
executive level provides the long-term vision, which has an internal and an external dimension.
The internal dimension relates to key goals and principles of SPUs: non-alienated labour, no
discrimination, no hierarchies, gender equity, adherence to labour rights (including a fair
salary, the elimination of exploitation and access to social security), fiscal responsibility, and
equality based on participation. The external dimension relates to the contribution of SPUs to
Venezuelan society as a whole, and attempts to move beyond market relations while promoting
local development and community participation. SPUs in the agricultural sector are also
expected to contribute to the mission of the Venezuelan Agrarian Corporation (CVA in
Spanish) to achieve food sovereignty and avoid dependence on food imports.
The CVA supports farmers, agricultural producers, and consumers, but is less
concerned with the internal development of the corporation. This is not surprising, since the
CVA is a bureaucratic organ responsible for administering the policies generated at the
executive level. At the SPE level, the social mission aims at placing the means of production at
the service of small and medium producers with the support of the Socialist Councils of
Participation. The goal of these activities is to achieve integration in farming and agricultural
activities so as to bring dignity to the rural producer and the surrounding communities, a
process that is expected to occur with a high degree of solidarity and communal duty.
Our discussions with SPU workers about the goals of their organizations reveal both
similarities to and departures from the CVA’s mandate. On the one hand, workers noted that
their organizations followed the food sovereignty and national agricultural development
mandate articulated by the CVA. Most of the workers’ comments reveal that their
organization’s objectives and mission revolved around four themes that directly address the
food sovereignty and agricultural development mandate: (a) to increase and maximize the
quantity of production, (b) to establish a close relationship with local producers, (c) to produce
high quality and low cost products, and (d) to achieve agricultural self-sustainability in the
country. On the other hand, many workers made references to a mission that somewhat
departed from the CVA’s mandate. Their extensive comments about the purpose of their
organizations revolved around three themes that are closely connected with co-operative
principles: (a) to feed those who need it most, (b) to foster a social consciousness among
producers, communities and workers, and (c) to move from co-management to self-
Discussion: Commonalities and Differences
After enduring three decades of neoliberalism, in the first decade of the twenty-first century
Latin America has witnessed a surge of democratically elected progressive governments, a
strengthening of social movements and indigenous groups, and an expansion of social
economy organizations. Some of these organizations, like the ones discussed in this chapter,
are attempting to combine their economic and social mandates in novel ways, nurturing new
relations (more democratic, participatory, and solidarity-oriented) internally and with the
outside world.
In examining the worker-recuperated enterprises in Argentina and the socialist
production units in Venezuela, it is possible to observe at least four differences. The first has to
do with origin. ERTs consist of former workers of capitalist firms with an intense desire to
hold on to their jobs. They turned to co-operativism and began the process of converting their
firms to worker co-ops as a defensive strategy only when they realized that it was the most
practical and legally recognized organizational structure in Argentina for self-managing a
bankrupted firm. Eventually, however, over the course of reopening a firm as a worker co-
operative, these defensive maneuvers became long-term visions, desires, and innovations that,
in practice, see these workers take on the principles of co-operativism. SPUs, in contrast, were
the result of a proactive design by the Venezuelan state, which provided not only much of the
vision and mission, but also the technical and financial support to make them viable, as part of
an overall strategy of national development that privileges the social economy and processes of
local democracy. In short, ERTs are offspring of capitalist bankruptcies, whereas SPUs are
creatures of an emerging socialist state.
The distinct origins connect with a second difference, which is the relationship with the
state. ERT emerged from the ashes of failing capitalist firms that workers rescued and
transformed into viable co-operatives with little or no state support. In some cases, the state
may help ERTs by providing modest subsidies or public sector contracts for products or
services, but in other cases the state (particularly the judicial system) could put ERTs into legal
limbo indefinitely. SPUs, in contrast, are created and supported by the Venezuelan state, which
guarantees a market through the existence of discount stores (communal markets), and links
SPUs among themselves to promote endogenous development.
The third difference is the relationship with the market. While ERTs provision some
products or services to the state, they mostly sell commodities in the private market. This is
primarily due to their origins as capitalist firms, but is also because there is no nationwide
regulation in place facilitating or encouraging the public sector to purchase from ERTs. In
many cases, ERTs have maintained relations with the same providers and clients or purchasers
that they had before becoming co-operatives, or have found new providers and clients in the
private market. In a nutshell, ERTs must compete in a capitalist market in disadvantageous
conditions (limited access to credit, uncertain legal situations, and commitment to assist local
communities), their salaries are directly derived from their revenues, and their members’ wages
are often below those at private firms in the same sector. SPUs, in contrast, seldom compete
with capitalist firms, operate in the context of a protected market and subsidized wages, and,
for the most part, provide products and services to the social economy and state-controlled
markets. Their organizational logic combines elements of state companies, nonprofit
organizations, and co-operatives.
A fourth difference has to do with self-management. In ERTs, workers who were used
to hierarchical managerial structures suddenly experience a workplace ‘without a boss’ and
must make decisions by themselves through participatory democracy mechanisms. They must
learn self-governance and co-operative principles quickly and effectively in order to survive as
organizations. In SPUs, however, a state representative is constantly present and sometimes
acts in a managerial role, thereby limiting the possibility for self-management. When this
happens, SPU workers may have a longer route towards self-governance than ERT workers.
In addition to these differences, both cases share four basic features. First, they
emerged as direct responses by workers, other grassroots groups, and, in the case of SPUs, by a
supportive state, to the crisis of the neoliberal model of the 1980s and 1990s. Second, they
have weak links with the older co-operative movement. Third, they are characterized by
horizontal labour processes, democratic decision-making structures, and egalitarian pay
schemes. Fourth, they have strong connections with surrounding communities and contribute to
local community economic development initiatives. In some cases, particularly with some of
Argentina’s ERTs, they also combine productive activities with cultural, educational, and
social services activities. In other cases, particularly SPUs, they incorporate multiple
stakeholders in the governance and management of the organization.
When we look at these four features together, our two case studies suggest that the social
economy businesses emerging in Latin America are somewhat different from the traditional
co-operatives and the state-run enterprises of the twentieth century. At this moment, it is too
early to ascertain the future contributions of these new organizations to the democratization,
vibrancy, and societal relevance of the social business sector on the one hand, and to
endogenous development on the other. However, although still in its germinal phase, relatively
modest in size, and far from perfect in implementation, the emerging social economy business
phenomenon provides examples of ‘real utopias,’ or prefigurative arrangements of another
mode of economic and social life (Wright, 2010). They may prefigure, for example, the
development of multi-stakeholder, democratic workplaces that include workers, community
organizations, government agencies, consumers, credit unions, unions, technological institutes,
and other co-operatives, in different aspects of the management and governance of the
In any case, regardless of the particular direction that social economy businesses take in
the future, the social business experiments that are taking place throughout Latin America,
despite their problems and limitations, can help to counter the impact of neoliberalism while
creating new possibilities for productive and economic life. Moreover, by nurturing a
workplace ethos based on horizontality, caring, responsibility, and solidarity, they provide
much needed inspiration for social economy organizations interested in contributing to social
change and social justice.
1While these governments were only present in approximately half of the countries in the
region, they managed to galvanize a rejection of the Free Trade Area of the Americas,
advanced by the Bush administration), and create instead an alternative trade system known as
ALBA (Alternativa Bolivariana para alas Américas). ALBA in Spanish also means dawn, a
metaphor suggesting a new era in Latin American history characterized by horizontal solidarity
among member states.
2For example, Brazil’s landless movement; Bolivia’s cocaleros; Peru’s coffee co-operativess;
Cuba’s urban organoponicos, rural agricultural co-ops, and new initiatitives for other co-
operative businesses; and Mexico’s Zapatistas, to name a few.
3The words ‘recuperated’ and ‘recovered’ appear to be used interchangeably when referring to
these firms. We tend to use recuperated for its etymological and political proximities to the
original term in Spanish.
4We decided to use the English acronym SPU rather than the Spanish acronym UPS to avoid
confusion with the delivery company.
5Currently, 67.4 per cent of Argentina’s co-operatives are worker co-ops (INAES, 2008a). As
such, considering there were 11,371 worker co-ops as of early 2008, the 205 ERTs represent
only 1.8 per cent of all worker co-operatives in the country. This implies that 98.2 per cent of
Argentina’s worker co-ops did not originate from workers taking over failed capitalist firms
which they then had to run themselves without any previous co-operative experience. The
larger percentage of worker co-ops in Argentina are either older co-ops not recuperated from
failed private firms or part of the wave of small worker co-ops formed by government work-
for-welfare programs since 2004 (INAES, 2008b).
6Workers in ‘second generation ERTs learned about the processes of workplace recuperations
and conversions from the pioneering struggles of ‘first generation’ ERTs. Besides receiving
much sympathetic media coverage, first generation ERTs and their strategies of recuperations
and self-management have since been discussed widely amongst political parties of the left,
social justice groups, co-operative associations and federations, organized labour, and
academic research, and these discussions have pollinated into workplaces (especially those in
trouble) in Argentina and abroad.
7These are the main demands that are currently being struggled over by the various ERT
umbrella organizations. For more details on these struggles and ERT protagonists’ proposals
for labour and business law reform , see Ruggeri 2009 and Ruggeri et al. 2010.
8Some examples of how ERTs mediate structural barriers to production and lack of state
assistance include the purposeful horizontalization of labour processes and practices, such as
just-in-time or day-to-day production with minimal inventories, getting customers to pay for
raw materials when placing orders, and providing outsourced products or services for other
9Around 71 per cent of ERTs practice complete or near-complete pay equity (Fajn, 2003). The
rest tend to practice slightly more hierarchical pay schemes, which can be based on whether
members are ‘founders’ or not, with founding members getting more pay than newer members
based on the logic that they were present during the ERT’s most harrowing days of occupation
and first production runs. Even in these ERTs, however, the goal tends to be to eventually put
in place a system of equal pay amongst members, or for newer members to eventually be able
to attain the same pay as founding members. Sixteen per cent of ERTs, usually the ones that
retained their old administrative staff (such as with our newspaper ERT case study), maintain
similar salary differentials to the old capitalist firm (save for the previous owner’s portion of
surpluses). Other types of pay schemes are related to hours worked (7.6 per cent of ERTs) or
the amount of responsibility a member has in their job tasks. In total, around 23 per cent of
ERTs can be said to fall into these more hierarchical types of pay models, while the other
roughly 6 per cent of ERTs practice variations on the previously mentioned schemes (Fajn,
2003). It is important to note, however, that ERTs using more hierarchical kinds of pay models
also tend to cap the pay differential between highest and lowest paid members, similar to the
pay practices taken up by Mondragón in Spain.
10Union Solidaria de Trabajadores, a waste recycling and parks maintenance ERT in the city of
11Like Argentina, Venezuela has also seen the appearance of ERTs, albeit in a much smaller
scale. ERTs emerged in Venezuela in 2002, and by 2006 it was estimated that there were
somewhere between twenty and thirty. Most of them are small or medium in size, employing a
total of a few thousand workers. In 2005, Venezuela hosted the first Latin American Encounter
of Worker-Recuperated Enterprises, attended by 400 workers, unionists, and government
representatives from across the region. Since then, however, the ERT movement seems to have
fizzled away, having witnessed ongoing conflicts between workers and the government
bureaucracy (Lucena & Carmona, 2006; El Militante, 2008; Vieta & Ruggeri, 2009).
12For example, one of the SPEs that were included in our study has its central office in the city
of Barquisimeto, with several SPUs located in nearby communities.
13This price is ‘fixed’ in the sense that at any given time there is only one price for a given
product, but the state does change the price periodically (usually by raising it, but never to
above market value). We suggest that any analysis of the efficiency of SPUs must consider the
positive impact of externalities, including the purchase of inputs at above market prices and the
sale of products at below market prices.
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... In 2008 in Spain, for instance, there were 17,637 SALs providing 133,756 jobs, while Marcora law co-ops in Italy have seen a resurgence in recent years ( CentroStudi 2012;Vieta, Depedri, and Carrano, Vieta, Depedri and Carrano 2016). Perhaps the most fascinating dynamic is the worker-recuperated enterprise in Argentina ( Atzeni and Ghigliani 2007;Ruggeri 2009;Vieta 2010Vieta , 2013Vieta, Larrabure, and Schugurensky 2012), in which hundreds of businesses abandoned during the sharp economic downturn in the late 1990s and early 2000s were taken over-uninvited-by groups of employees, who struggled to save jobs and make the business successful. Over 95% of these firms have become non-share worker cooperatives, a recognized business model that facilitated restarting the business and made it possible to access some government subsidies and value-added tax exemptions on revenues ( Ruggeri 2009). ...
... Soon after the fall of the Soviet Union, worker cooperatives were converted mostly into conventional businesses. Examples of government initiatives are new cooperatives and cooperative-like labormanaged firms in Chavez's Bolivarian Revolution and, since 2013, with Cuba's new, "non-agricultural co-ops" in sectors such as tourism, public transport, and construction, which have been encouraged by the economic reforms of the Sixth Congress of the Communist Party ( Donestevez-Sanchez 2013;Vieta 2012;Vieta, Larrabure, and Schugurensky, 2012). It is too early to determine the outcome of the experiments in Venezuela and Cuba (Malleson 2014;Pineiro-Harnecker 2013). ...
... Given this lack of fit with any of the predominant ideologies, it could be argued that worker cooperatives represent a utopian ideal that is achieved by groups of determined workers in response to appropriate social conditions ( Melnyk 1985). Examples include the economic despair resulting in Argentina's workplace takeovers by ex-employees, mentioned above ( Atzeni and Ghigliani 2007;Ruggeri 2009;Vieta 2010;Vieta, Larrabure, and Schugurensky 2012), or the post-war destruction in the Basque region of Spain that led to the birth of the Mondragon Cooperative Corporation ( Whyte and Whyte 1988). It is impossible to predict whether worker cooperatives will become more salient in the future, although increased interest in labor-managed and communityowned organizational forms might be pointing to a revival in worker cooperatives ( Atzeni 2012;Alperovitz 2011;Curl 2009;Vieta 2010Vieta , 2013Webb and Cheney 2014). ...
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This chapter discusses different models of worker cooperatives ranging from those that are predominantly economic associations, or a form of employee ownership, to those that are more collectivist and emphasize workplace democracy, community commitment, and cooperative ideals. Worker cooperatives that focus upon employee ownership are primarily a variation of a business corporation; worker cooperatives with a more collectivist orientation are primarily a form of cooperative, but with members who are employees rather than consumers of a service or primary producers such as farmers. More recently, hybrid arrangements have been created that integrate a worker cooperative within a business corporation and a cooperative, a multi-stakeholder cooperative or social cooperative. Takeovers of abandoned investor-owned businesses resulting in worker cooperatives are a growing phenomenon in South America.
Using a combination of thorough research and practical examples, Strategy and Competitiveness in Latin American Markets explains how the concept of the sustainability frontier that the book develops resolves the long-running debate on whether sustainability requires tradeoffs or not. Through its exploration of a variety of sustainability challenges and opportunities, along with various sustainability models, the authors show how the sustainability frontier can be expanded through disruptive innovation, the building of new skills and by other means to secure no-trade off solutions.
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This article considers Argentina’s empresas recuperadas por sus trabajadores (worker-recuperated enterprises, or ERTs) as transformative learning organizations . ERTs are illustrative of how workers’ conversions of capitalist firms into worker cooperatives—especially conversions emerging from troubled firms and in moments of deep socio-economic crises—transform workers (from managed employees to self-managed workers), work organizations (from capitalist businesses to labour-managed firms), and communities (from depleted to revitalized and self-provisioning localities). Theoretically, the study is grounded in class-struggle, workplace learning, and social action learning approaches. These theoretical perspectives help the study work through how workplace conversions by workers, when converting troubled investor-owned or proprietary firms into worker coops, act as catalysts for contesting workplace exploitation and capitalist crises, while also beginning to move beyond them by forging new social relations of production and exchange. In the case of Argentina’s ERTs, crises in the political economy and micro-economic crises at the point of production during the collapse of the neoliberal model at the turn of the millennium heightened workers’ self-awareness of their situations of exploitation and motivated collective action. As a result, new worker cooperatives were created that also stimulated the social, cultural, and economic renewal of surrounding communities. The study’s research method relies on extended case studies of four diverse ERTs, which included ethnographic observation and in-depth interviews. Observations of daily workflows were conducted, as well as interviews and informal conversations with founding and newer ERT workers. In a more structured portion of the interview protocol, key-informants were asked to reflect on how they had personally changed after being involved in the ERT, and how production practices and involvement with the community had transformed in the process of conversion. The article concludes by outlining how worker, organizational, and community transformations emerge from workers’ processes of informal learning and learning in struggle as they collectively strive to overcome macro- and micro-economic crises and learn to become cooperators. This learning, the study shows, occurs in two ways: intra-cooperatively via informal workplace learning, and inter-cooperatively between workers from different ERTs and with surrounding communities. The self-management forged by ERTs thus embodies new, cooperative, and community-centered values and practices for these workers that, in turn, sketch out different possibilities for economic and productive life in Argentina.
In Understanding the Social Economy, Jack Quarter, Laurie Mook, and Ann Armstrong integrate a wide array of organizations founded upon a social mission - social enterprises, nonprofits, co-operatives, credit unions, and community development associations - under the rubric of the ‘social economy.’ This framework facilitates a comprehensive study of Canada's social sector, an area often neglected in the business curricula despite the important role that these organizations play in Canada's economy. Invaluable for business programs that address issues such as community economic development, co-operatives, and nonprofit studies and management, Understanding the Social Economy presents a unique set of case studies as well as chapters on organizational design and governance, social finance and social accounting, and accountability. The examples provide much needed context for students and allow for an original and in-depth examination of the relationships between Canada's social infrastructure and the public and private sectors. With this work, Quarter, Mook, and Armstrong illuminate a neglected facet of business studies to further our understanding of the Canadian economy.
The social impact of the movement of occupied enterprises is more closely related to its symbolic dimension than to its real strength, since it only involves about a hundred companies and fewer than 8,000 workers. Nonetheless, in providing an innovative alternative to address the unprecedented levels of poverty and unemployment in Argentina, the experience of occupied enterprises has also opened up new expectations for change among the broader population. In particular, the reactivation of production under the control of workers creates the possibility of redefining capital-labour relations and questioning the unconditional supremacy of property rights. L'ampleur et l'impact social du mouvement des travailleurs «d'entreprises récupérées» en Argentine, dépendent davantage de ses dimensions symboliques que de sa magnitude réelle—soit la participation d'une centaine d'entreprises et un peu moins de huit mille travailleurs. Le mouvement propose une solution originale pour contrer le niveau de pauvreté jamais vu auparavant et de chômage qui affligent l'Argentine tout en ayant une incidence considérable sur les attentes sociales. Cette solution redéfinie les relations capital/travail dans les entreprises récupérées et remet en question le caractère absolu du droit à la propriété privée. Ce changement ne se limite pas à la sphère culturelle mais affecte directement le système institutionnel des relations de travail en procurant aux travailleurs un nouvel outil de pression et de négociation tout en affaiblissant la capacité du patronat de discipliner les travailleurs.