THE LATIN AMERICA SOLIDARITY ECONOMY: Venezuela & Argentina

Elizabeth Bowman
Robert Stone
Wednesday, February 1, 2006

Latin America is looking for alternatives to corporate globalization, and with good reason. The Center for Economic Policy Research recently summed up results of the neo-liberal experiment that has been imposed on the region since the mid-1970s. Between 1970 and 2000: tariffs on imported goods were halved, most controls on investment inflows and outflows were lifted or drastically reduced, and state-owned enterprises were privatized on a massive scale. (In the 1990s alone they amounted to 20 times the value of Russian privatizations after collapse of the Soviet Union.) The International Monetary Fund had predicted that per capita income and economic growth would take off. In fact: “Income per capita for the region grew by more than 80% from 1960-1979, but only about 11% from 1980-2000…the region has suffered its worst 25-year economic performance in modern Latin American history, even including the years of the Great Depression.”

Resistence to corporate globalization started with the 1994 uprising of the Zapatistas. But the region’s social movements have also been busily constructing viable alternatives. More recently, governments opposing neo-liberal policies have joined this construction, voted into power by clear majorities in Venezuela, Brazil, Argentina, Chile, and Bolivia. In Mexico, with elections coming July 6, an anti-corporate globalization front-runner is currently increasing his lead.

The alternatives that are cropping up are highly varied, both between and within countries. On a recent trip to Argentina, Brazil and Venezuela, we visited some of these initiatives and talked with their creators.

We’d heard that the solidarity economy was advancing in these countries. Since 1989 we have been active in the worker cooperative movement in the U.S. In the wake of 19 th century utopian religious communities, the U.S. created thousands of housing, rural electric, farming, and child care co-ops and credit unions. A social-change-oriented part of the movement was added in the 1960s: roughly 300 worker co-ops are now run by about 10,000 worker-owners who share profits and vote on policy and managers. Often located in college towns like Amherst, Berkeley, and Madison, they print books, consult on computers, and make bikes, furniture, photo-voltaics and precision tools. The movement newsletter we’ve helped edit since 1993, Grassroots Economic Organizing, helped start our U.S. Federation of Worker Coops. But compared to nations with deeper traditions our movement is small. We have about the same number of worker coops as France but 4.8 times France’s population.

Worker co-ops are part of “the social and solidarity economy,” which can be defined as production, distribution and consumption activities aimed at democratizing the economy and thereby subordinating profit to human ends. It embraces movements for: ethical consumption, fair trade, local currencies and barter systems, micro-finance and credit unions, socially conscious investment, and co-ops of all kinds. We came home feeling confirmed in our belief that worker co-ops and the solidarity economy are major tools for deep and positive social transformation.

Let’s start with Carlos Sanchez, manager of a Super Mercal grocery co-op in Caracas, elected by his neighborhood assembly. He proudly pointed to basic staples — flour, oil, milk — that were also products of co-ops. Such “intercooperation” did not happen overnight. (See photo.) Instead of nationalizing on the Cuban model, the Chavez government, wielding the new constitution of 1999, launched a national plan in 2001: oil wealth went to universal literacy and health care but also to a fund to extend credit to workforces starting up (or converting to) worker co-ops. Behind the fund is a full cabinet-level Ministry of the Popular Economy. There are glitches. Some Best Western hotel workers we met wanted to cooperativize but feared that as new owners they might lose union-protected worker benefits. 

Intercooperation in Caracas. L to R: author Betsy Bowman, Super Mercal manager Carlos Sanchez, and philosophy grad student Yvonne Caldera, in the Super Mercal branch in the Katya district. To assure that nobody starves, all over Venezuela, this chain’s subsidized basic staples are very cheap.
“Cooperatives are the businesses of the future,” holds former Planning and Development Minister Felipe Perez-Marti, since workers who own their firm must seek its efficiency and success. And if as economic agents “people are solidaristic, they will elect a solidaristic government.”

As government-supported cooperativism was elicited in Venezuela, co-ops were springing up in Argentina like mushrooms. The metaphor is not entirely apt since for a period in 2002-2003 elements of a full solidarity economy — neighborhood assemblies; community gardens, kitchens, dining and cultural spaces; local currencies and skill banks — had appeared in all their variety. The 2001 crisis had made it cost-effective for many Argentine business owners to lay off whole workforces, seek bankruptcy protection, stash capital in tax havens, and abandon debt-laden factories. Presto: massive unemployment and poverty. For older workers this capital flight meant an economic death sentence. To hold onto jobs and machines, many occupied workplaces — with government permission. Why then not cooperativize, produce, and ask for expropriation? The slogan “Occupy, Resist, Produce” arose. Many co-ops — often without union support — now face former owners who, seeing their abandoned plants operated profitably by workers, want them back. Worker co-ops are the part solidarity economy of 2002-2003 that survives and thrives, reflecting Argentina’s deep worker co-op tradition. With one-seventh the population of the US, the movement that sprang up since 2001 is already the size of the U.S.’s!

Take Cooperativa Unidos por el Calzado (CUC), formerly a major Gatic shoe factory. (See photo) The owners had racked up large debts to workers and the state. Again invoking worker’s needs, and with union support, they applied for and got new government subsides — but they also cut pension payments and wages further as they declared bankruptcy. It was the last straw. The factory was under a judge’s control when the workers, with neighborhood support, took occupancy, cooperativized, and re-started production. The cooperative has since been granted a 5-year temporary expropriation in which to prove itself, with usufruct of the machines and building. It cannot bring many former workers back as members, but its head is above water as we write.

Hold on! It may be said here that such occupations are plain theft and that honest recognition of private property rights would put the CUC in jail. And secondly, this co-op scheme is impossible since greed is human nature.


Worker-managers of a cooperativized shoe factory in Buenos Aires.
L to R: Alicia Eulalia, Jorge Torres, Jorge Monzon. Torres, the plant’s new manager, is a worker elected by the plant’s other 120 workers. After cooperativizing, CUC lost contracts with Adidas and other big brands.
To the first complaint we note that modern private property is always conditional, never absolute. Thus a corporation is chartered in the people’s name to serve the public good and this charter can be withdrawn if it ceases to do that.

To the second objection, we point out that these “impossible” co-ops exist. We further remark that generosity, like greed, is also a human possibility. Which of these (and other) possibilities gets elicited often enough to appear as “human nature”? That depends on which is encouraged by the dominant social practices.

For our parts we incline toward Perez-Marti’s observation that setting up a cooperative system “is like a virtuous circle as opposed to a vicious circle: where the ownership structure generates solidarity, this solidarity in turn generates stability in the business.” So: “in the long term, under stable relationships, I don’t gain that much by stealing and all sides benefit more from not stealing.”

Yet there is a radical incompatibility between a regime allowing one human to profit from another’s labor merely because the latter works on the former’s private property, and a regime whose businesses are held in common and all profits (and losses) are shared. Neither regime has a monopoly on morality. Their c;laims about what morality itself is, are mutually exclusive. Casuistry and combinations are thus ruled out; we must choose which one will be our morality. And history now seems to be imposing this choice on us.

We will devote a third article to the solidarity economies of Brazil and Mexico and a fourth and final one to the recent World Social Forum in Caracas.