Argentina

The Children of Bakunin and Coca-Cola

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I'm out of the country at the moment, so I haven't been able to follow the Republic Windows and Doors story closely enough to formulate a firm opinion about it. But as laid-off workers occupy a factory and demand the severance pay they're reportedly owed, it's revealing to watch the glosses that observers with different ideological agendas put on the event.

The Huffington Post's Peter Dreier, for example, presents the occupation as an early sign of reinvigorated government activism:

The symbolism of the workers' take-over also adds credence to Obama's call for a major government-funded infrastructure program that will stimulate several million jobs—almost all of them in the private sector—and help jump-start the ailing economy.

"The workers want Bank of America to keep the plant open and the workers employed," said UE President Carl Rosen. "There is always a demand for windows and doors. But with Barack Obama's stimulus proposal, there will be even greater demand for the products made by Republic's workers. It doesn't make sense to close this plant when the need is so obvious."…

During the past two weeks, as Obama appointed moderates and former Clintonites to high-level positions in his economic brain-trust, some progressives worried that the president-elect was already moving to the center, even as the economy nosedived. But Obama's call for the largest public investment plan since the interstate highway program begun in the 1950s, his support for a major federal loan to the Big 3 auto companies if they retool to become more energy-efficient, and now his embrace of the Republic workers' occupation of their factory has given many progressives assurance that Obama hasn't forgotten his liberal instincts.

Meanwhile, the autonomist writer Ben Dangl has a more anarchistic take:

Argentina's crisis was similar to the current recession in the US in the sense that in December of 2001, almost overnight, Argentina went from having one of the strongest economies in South America to the one of the weakest. As the occupation of the factory in Chicago indicates, there are some tactics and approaches to combating economic crises that were used in Argentina that could be applicable during the US crisis.

During Argentina's economic crash, when politicians and banks failed, many Argentines banded together to create a new society out of the wreckage of the old. Poverty, homelessness and unemployment were countered with barter systems, alternative currency and neighborhood assemblies which provided solidarity, food and support in communities across the country.

Perhaps the most well known of these initiatives were the occupation of factories and businesses which were later run collectively by workers. There are roughly two hundred worker-run factories and businesses in Argentina, most of which started in the midst of the 2001 crisis. 15,000 people work in these cooperatives and the businesses range from car part producers to rubber balloon factories. Though the worker occupation of Republic Windows and Doors is different in many respects to examples of worker occupations in Argentina, it is worth reflecting on the strikingly similar situations workers in both countries found themselves in, and how they are fighting back.

For those of you who aren't familiar with them, those Argentine cooperatives were usually born when their previous owners, facing failure and debt, skipped town; the employees then decided to keep the abandoned enterprises alive.

I'm in Argentina myself right now, and I'm afraid the remnants of the 2001-02 rebellion aren't easy to find. The barter-based alternative currency is long gone, and most of the neighborhood assemblies dissolved after Trotskyists and the like decided they'd be a good place to bloviate. Many of the worker-owned businesses are still thriving, though. I stopped in one of the most famous coops, the Hotel Bauen, a few days ago. My wife and I took our seats in its coffeeshop and, in a post-ideological gesture, I bought a bottle of Coca-Cola.

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  1. Look to Somalia, where Libertopia is being born!

  2. Pensions, healthcare and other contractual obligations to workers ought to rank equally with bonded debt in Chapter Eleven proceedings. Since such obligations probably exceed outside debt by an order of magnitude in such cases, a standard debt-for-equity swap should result in the creation of a lot of worker cooperatives.

  3. Moderators please …

  4. If Atlas isn’t starting to shrug, he’s at least thinking about it.

  5. The workers actually have first claim. Only after paychecks are made do creditors get theirs. I wonder if the workers could place a lien on the factory?

  6. Uh-oh.

    As I’ve said elsewhere, if the workers’ contract has been violated, they are acting entirely within their rights by expropriating the factory (provided, of course, that the factory actually belongs to the corporation in question. If some other creditor has a legitimate lien on it, arranged before the union contract was signed, they they are protesting in the wrong house).

    I predict some vulger libbing in this thread.

  7. “There is always a demand for windows and doors. But with Barack Obama’s stimulus proposal, there will be even greater demand for the products made by Republic’s workers”

    Yes, when Obama pays young lads to go around throwing stone through windows, demand for their products will be way up!

    Seriously though, even though I think Obama will be less fail than Bush on the economy (mostly because I trust his advisers will talk him out of campaign promises), I really really wish people would stop telling themselves that Obama can fix all of our economic problems by Jan 27th.

  8. Have a glass of Malbec for me, Jacob.

    (I’m sure you’re already having a few for TWC so you should be nice and tipsy soon.)

  9. Shoot, obviously I see Jesse and read Jacob.

    Damn. And sorry.

  10. As I’ve said elsewhere, if the workers’ contract has been violated, they are acting entirely within their rights by expropriating the factory (provided, of course, that the factory actually belongs to the corporation in question. If some other creditor has a legitimate lien on it, arranged before the union contract was signed, they they are protesting in the wrong house).

    Well, I would have two problems with that. My first, and more minor, problem with it is that the workers are specifically demanding 60 days’ extra pay for work they never even performed because of the Plant Closure Notification law. That law is a travesty, and almost certainly constitutes involuntary servitude for employers, and so I tend to look askance at the workers’ demand here.

    But that’s a minor quibble and arguments over it mainly come down to differences of opinion over the plant closure law. My major problem is that the workers’ claim is actually moot, since Republic has no money to give them their wages, and the workers, Illinois politicians, and Barack Obama aren’t demanding that Republic give them 60 days’ pay for nothing. They’re demanding that BankAmerica give the workers their pay. BankAmerica used to provide a short-term financing facility to Republic, which they terminated per the loan agreement when Republic’s sales fell below a certain level. Barack Obama seems to think that BankAmerica should continue to extend credit to a failing corporation, even if that credit will simply immediately be transformed into severance payments for workers and won’t go towards maintaining operations at all. In other words, Obama wants BankAmerica to take a deliberate loss so these workers can get 60 days’ severance.

    This means that Barack Obama is a fucking idiot and jackass who thinks that the way to solve an economic crisis brought on by a shaking financial system is to demand that major banks make loans that are deliberate and obvious losses. Fuck him and the party he rode in on.

  11. As a BofA stockholder, I was disappointed they gave in to extortion by that piece of filth, Gov. Bloggy who threatened to pull all the State of Illinois business from BofA unless they gave in to the Republic workers’ demands.
    Also disturbing is the unintended consequences: all banks will start examining their open lines of credit. Already yesterday, the bank that provides a line to my employer has called to discuss the interest rate and the state of our incoming orders.
    Lines of credit can generally be cancelled at will, so banks may start pulling out of more unsecured loans at the first hint of trouble rather than risk being trapped into making loans to bankrupts because of the political clout of their friends. Being denied a line of credit is a death sentence for many companies that just need to get through a rough patch.

  12. Fluffy,
    I agree with your comment as presented but did BofA get any bailout dough?

    (I swear I’m not trying to be lazy here but I’m unpacking from a trip and was hoping I could catch up on a couple of details via you. If my husband walks in, sees that I’ve clothes all over the house, haven’t yet showered and I’m feverishly catching up on Internet news, he might think I need to go back to work. ;o)

  13. I agree with your comment as presented but did BofA get any bailout dough?

    I believe they were one of the firms ordered by Paulson to take bailout money “or else”, so that other banks wouldn’t face a stigma if they took the funds.

    Now we can see that one of the [predicted by this magazine] outcomes of the bailout is that it will now be used as an argument for forcing the banks to take care of politically popular causes or clients. In fact, this is pretty much the exact scenario a Hit and Run post put forth, with the only difference being that Reason used a technology company instead of a windows company as the theoretical example. So once again the prediction/objection of libertarians comes true to essentially the letter.

    But even if BofA had enthusiastically lined up for the bailout, rather than been threatened into it, the point of the bailout was supposed to be to provide capital to banks so they could fix their balance sheets and operate in a sound manner going forward. If the banks are now going to be extorted into making even more unsound loans, there was no point to the bailout at all.

  14. As I’ve said elsewhere, if the workers’ contract has been violated, they are acting entirely within their rights by expropriating the factory

    Not until they prove their case in court.

    Right now, they are trespassers, pure and simple, that nobody has the balls or the inclination to evict.

    This is a contract dispute. We have courts for that. Resolving your contract disputes by “self-help” is a very poor precedent to set.

    Fluffy, again, says just about everything that needs to be said.

  15. Also disturbing is the unintended consequences: all banks will start examining their open lines of credit.

    Been going on for over a year already.

    When BoA bought LaSalle Bank, BoA axed lines of credit to several companies in the area. While this is certainly their right, it did put some companies in a bind – especially seasonal businesses who get the bulk of their revenue in one quarter but have to pay employees over several quarters. Kind of short-sighted on BoA’s part, though they have short-term balance sheet problems of their own they need to address.

    However, Republic Doors and Windows is not going to be profitable in the near term – house building and remodeling is WAAAAY down and there is little chance that company would turn a profit in the next few years.

    The difference with Republic versus the other companies is Republic is a union shop and the union knows how to play to the media – worker sit-in’s make nice video. But it only makes another anecdote as to the stupidity of unions – they want a bank to take a loss so they can get paid for producing non-profitable items.

  16. Believe me, I agree with you but I’m trying to think like the non-libertarian might.

    There’s a situation in Florida where a modern day Robin Hood is pairing up homeless people and forclosure properties for squatting purposes. I have to admit that the idea made even me smile. I mean, if the government and corporations are going to continue to ass-rape taxpayers it’s sort of nice to see somebody fight back using unconventional methods. The right to property is very important in my world so I have to admit the government has been very successful in blurring ownership lines when I smile at something that would normally make me scream.

    The tin foil hatter in me thinks that may have been the idea though.

  17. “There’s a situation in Florida where a modern day Robin Hood is pairing up homeless people and foreclosure properties for squatting copper theft purposes.”

    Fixed.

  18. Don Mynack-

    My impression is that copper theft has reduced to almost nothing now that scrap yards are paying pennies for it. Even a thief can see the limited economic sense in it.

  19. Where do you read that the workers are demanding 60 days of pay they didn’t work?? By law, they are supposed to receive 60 day *notice* of the closing. They are demanding that the company pays them their last pay check and compensate them for accrued vacation and sick time. Per compensation law, this is correct. They are not demanding anything extraordinary…just what *all* laid off workers receive.

  20. After 30 years with BoA (starting with their affiliates) I closed all my accounts with them. They started charging me account fees after 30 years. I kinda figured something was amiss. Don’t have to be a weatherman…

  21. Where do you read that the workers are demanding 60 days of pay they didn’t work??

    Here’s a link to a union representative saying that since Republic didn’t give 60 days’ notice of the closing, the workers should receive 60 days’ pay.
    http://www.dailyrecord.com/article/20081210/UPDATES01/812100461

    They are demanding that the company pays them their last pay check and compensate them for accrued vacation and sick time. Per compensation law, this is correct. They are not demanding anything extraordinary…just what *all* laid off workers receive.

    Wrong. The company has no money, so they are demanding that BankAmerica provide the money. BankAmerica is not their employer, so whatever we think of the plant closing law whose provisions you’re citing, they ARE asking for something extraordinary.

    Demanding that BankAmerica pay these workers what they claim they should get is about as just as walking up to any random person the street and demanding that THEY pay these workers 60 days of severance.

  22. There’s a situation in Florida where a modern day Robin Hood is pairing up homeless people and forclosure properties for squatting purposes.

    If you wanted to make damn sure that one foreclosed house takes the rest of the block down with it, this would be the way.

  23. “Not until they prove their case in court.

    Right now, they are trespassers, pure and simple, that nobody has the balls or the inclination to evict.

    This is a contract dispute. We have courts for that. Resolving your contract disputes by “self-help” is a very poor precedent to set.”

    Well, yes and no. If you steal my car, I have a right to take it back from you, whether I go through the court or not. Of course, it would probably be classier for me to press charges against you formally, but I don’t think I’m obligated to do so.

  24. “Demanding that BankAmerica pay these workers what they claim they should get is about as just as walking up to any random person the street and demanding that THEY pay these workers 60 days of severance.”

    Yeah, I agree with this. As per usual in cases like this, everyone tends to point fingers in the wrong direction. Still, it’s not like the workers are occupying the BoA building. They (probably) have a legitimate claim against RW&D, and that’s who they are taking action against.

  25. It’s important to remember that there’s no real conflict between the notion of worker cooperatives and libertarianism, so long as the worker co-ops can survive in a free market without government support. The trouble is with bailouts and subsidies – which means the state favoring some individuals above others by taking money from the public treasury and funneling it to the business in question. Worker owned or not, it’s a basic question of fairness – the state shouldn’t be picking winners or playing favorites in the market.

  26. Lefiti or Lefiti Spoof Troll (LST),
    If you are Lefiti, then it need not be said again that you are an idiot. If you are spoof troll, however, the Lefiti/Somalia spoof is getting old. Find some new material, please.

  27. “mostly because I trust his advisers will talk him out of campaign promises”
    Excuse me while I laugh/cry, and get drunk.

  28. “There’s a situation in Florida where a modern day Robin Hood is pairing up homeless people and forclosure properties for squatting purposes.

    If you wanted to make damn sure that one foreclosed house takes the rest of the block down with it, this would be the way.”

    It’s not my fault that people are afraid to have drunken/drug addicted nutjobs near their kids.

  29. Chase is ponying up $400k for the Republic employees. Link

  30. It’s not like the banks don’t get their profits from lending out money created out of nowhere anyway …

    And it’s within that framework that you worry about BofA’s property rights. Of course nowdays they get bailouts as well.

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