Economic Update: Workers Successfully Take Over their Workplaces

[S11 E15] New
On this week's show, Prof. Wolff discusses how the US home rental market is failing over 20% of all renters, and the  basic flaws in Biden's $2 trillion infrastructure proposal. On the second half of the show, Prof. Wolff interviews Prof. Marcelo Vieta on his studies of workers' success in taking over enterprises mismanaged by capitalists.

About our guest: Prof. Marcelo Vieta is associate professor of workplace learning and the social and solidarity economy at the University of Toronto. Prof. Vieta has published widely on critical theory, socialist and anarchist economic practices, workers’ control and self-management, the sociology of work and cooperatives, and the social and solidarity economy. Since 2005 he has been investigating these themes and practices, and has worked with labour, cooperative, and social movements and policymakers, in Latin America, especially Argentina, and in Italy and Canada. His most recent book is Workers’ Self-Management in Argentina: Contesting Neo-liberalism by Occupying Companies, Creating Cooperatives, and Recuperating Autogestión (Leiden/Chicago: Brill/Haymarket, 2020).
Website: www.vieta.ca


Transcript has been edited for clarity

Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives: jobs, debts, incomes — our own and those of our kids. I'm your host, Richard Wolff. 

I want to begin today's program with a brief summary of what the reality is in the rental-housing market. Let's begin this way: 43 million American families rent their living space. That's an enormous number of us. Out of the 43 million renting families, nine million are now behind in their rent. That's over 20 percent of families in this country who rent haven't been able to pay in the last year or so, and are behind. When you're behind in your rent, it's one of the best arguments a landlord has to evict you — you haven't paid the rent. Which meant that since the United States’ political economic system, capitalism, had not provided people with income adequate to provide them with housing, nine million, or better than 20 percent, of renters haven't been able to pay the rent. 

But they've avoided eviction because, for a few months at a time, the government has said you can't be evicted for lack of paying rent. What this did was give landlords the incentive to come up with other reasons to use to evict you. And that has been going on; that's not all that hard to do. But wholesale eviction for not paying rent has been postponed. It was supposed to end at the end of last year, then it was extended to March 31st, and now the Centers for Disease Control has extended it to the end of the month of June. 

No one seems to mind the torture that this imposes on families who have to worry every few months that they're coming to the end of their rope. Because having been unemployed, having seen no wage increase, having had all kinds of extra expenses during the pandemic, they can't pay the regular rent. And they certainly can't pay the accumulated months’ rent when it comes due. So they are threatened, of course, with the eviction.

I just want to say one basic thing, partly as an economist, partly as a human being. One of the tests of any economic system is the adequacy with which it provides food, clothing, and shelter — the three basic conditions for a livable life. In order to provide housing in a capitalist system, you either have to give people enough wages and income to afford it, or you have to bring down the price of the home or the housing so that they can afford it without raising their income. Either income or price has to be put in a position that housing is achieved. By that standard, US capitalism is failing. It is not providing adequate income to pay for the privately owned housing that is the way we organize that system. And that failure is a basic critique of US capitalism as I speak.

But I want to devote most of the first half of today's show (before the very interesting interview that we'll have) to President Biden's infrastructure program, the proposal of spending roughly $2 trillion to update, to renew, infrastructure. So let's go through that. An infrastructure is the roads, the highways, the harbors, the train systems — all of the basics that hold up any economy. And by all accounts — by engineers, by economists, by specialists — the infrastructure of the United States is in terrible shape. Far worse than in many, many other countries less wealthy than the United States. In short, our infrastructure — roads, highways, bridges, all of that — has been neglected. And I'll come back and talk about why.

But the Biden administration wants to be patted on the back because it has this dramatic program of $2 trillion. We are not, the president said, merely tinkering around the edges of the problem; we're meeting it head-on. My response: No you're not; you are tinkering. Just what you say you are not doing is what you are doing. And that has become a bad habit of our leading politicians, as you've probably noticed. To not tinker around the edges would be to make basic structural changes. For example, Mr. Biden refers to FDR. 

Yes, FDR, back in the ‘30s, did make structural changes. They weren't enough; they didn't solve our problems, because that's why we're in the soup now. But compared to what Mr. Biden is doing, they are indeed dramatic. Let's remember: created 1) a Social Security System we never had before, 2) an unemployment compensation system we never had before, 3) a minimum wage in this country we never had before, and 4) a federal jobs program that put 15 million unemployed people to work, giving them a decent income. Mr. Biden isn't doing anything like that. Social Security is no longer support for people of the sort it was imagined and hoped it would be. So far, he's failed to get anywhere on the minimum wage. And he doesn't even discuss a federal jobs program. 

And moreover, Roosevelt not only did that; he made corporations and the rich pay for it with a dramatic increase in rates of taxation on them. In contrast, Mr. Biden proposes only to raise the corporate tax rate halfway up to what Mr. Trump reduced. Trump dropped it from 35 to 21 percent. Mr. Biden proposes to bring it back only to 28 percent, thereby leaving the business class with half of what Trump gave them. Not even challenged by the Democratic Party. 

What would you have to do, Mr. Biden, if you really wanted to deal with these issues? Well, here's what we would do. First of all, à la FDR, create a federal jobs program. Give the 20 million Americans right now that are officially unemployed, with another five to 10 million that have left the labor force — so we're talking 25 to 30 million people — give them a job, Mr. Biden. You're silent on that. What could they do? Put them to work helping to vaccinate, helping to test, helping to really manage this disease — far better than Mr. Trump ever did, and far better than you have so far been able to do.

Here's another one: Do something for the climate that is so urgent, you say, in your mind. Millions of people committed to climate control, offsetting the damage of environmental degradation — there would be a dramatic job for people, plus a serious attack on the climate problems we have. Provide daycare for the millions of people who cannot work unless they get it. Provide real programs for the elderly becoming a larger part of our society. These would be structural changes. And make them permanent, the way Mr. FDR was able to do.

Okay. And how would you pay for it? Come on, Mr. Biden; you kind of know. Raise the corporate tax. And if you're worried about impacting small business, make it a progressive corporate tax, like we have a progressive personal income tax. If you're a little business, you pay a little. If you're a middle-level business, you pay a middle level. And if you're Mr. Bezos at Amazon, well then you pay the high rate. Raise the rates. Raise them back to what they were in the ‘60s and ‘70s, not even beyond that, and that would raise the kind of money that would fund a serious, structural program to update our infrastructure. None of that is being done. None of that is even being proposed. What you have is tinkering around the edges. 

And now perhaps the most important issue of all. What Mr. Biden's program amounts to, classical Democratic establishment policy, is to throw an enormous amount of money — but let's be clear at whom. To big corporations, and to governments. And what are they supposed to do? Repair the road; restore the bridge; improve electric charging stations, and build them for the new generation of electric cars. And you know, when you give money to big corporations, and you give money to political leaders who in turn will use it to give contracts to (you guessed it) big corporations, here's what you get: Those corporations will use the money to pay out fat dividends to their shareholders, fat pay packages to their CEO. You know the story. We've been doing that for 200 years, and we have the grotesque inequality we see around us. 

For 75 years since the end of World War Ⅱ, the United States gave foreign aid to poor countries in Asia, Africa, and Latin America — same kind of throwing money. And where did it go? To the corporations and the governments in those societies who took care of themselves first and never solved their poverty programs. Sure, a road got built here, a bridge got restored over there, and that will happen here too. And that's better than nothing. But you're not changing this basic economy because you're putting the money in the hands of the people who have shown us for 200 years here, and for at least 50 in the rest of the world, that they're going to take that money and reproduce the unequal social systems they preside over.

Don't do that. And if you do it, admit what you are doing. You are reproducing this system of inequality in income, inequality in wealth, and inequality in the power to shape what's going on. You're keeping the system going. That's your top priority, and that's what shows in the program you're doing.

Last point on this infrastructure. Look, Mr. Biden is not going to get even the profit tax rate increase from 21 percent, which is where Trump left it, to 28. So he's going to end up borrowing. And let me be real clear with you about government borrowing — whether it's for the infrastructure, or for treating covid, or for anything else. Let me explain to you, please, that deficit spending is an enormous gift to corporations and the rich. Here's how it works. You could pay for the solution to our covid problem, or this infrastructure program by taxing corporations and the rich. They have the money to do it, and you have the political power to tax it. If you don't tax them, then you're going to have to borrow the money if you're going to get this done. 

And you know who you're going to borrow most of that money from? The corporations and the rich. Because they will have the money to lend to the government. And you know why? Because the government didn't tax it from them. Look at it from the point of view of a corporation or rich people. Either the government taxes the money away and does these important social things, or it doesn't and instead comes to me, borrows the money, has to pay it back, and pays me interest while I wait. That's a no-brainer for corporations and the rich. For them, deficits are a fancy way of giving them a monstrous gift. Don't be fooled.

This is Richard Wolff. We've come to the end of the first part of today's show. Before we get to the second half, I want to remind you, our new book, The Sickness Is the System: When Capitalism Fails to Save Us From Pandemics or Itself, is available at democracyatwork.info/books. I also want to thank our Patreon community for their ongoing and invaluable support. If you haven't already, please go to patreon.com/economicupdate to learn more. Stay with us; we'll be right back with today's guest, Professor Marcelo Vieta. 

WOLFF:  Welcome back, friends, to the second half of today's Economic Update. And it is my pleasure to bring to our microphones and our cameras Professor Marcelo Vieta. He's an associate professor of workplace learning and the social and solidarity economy at the University of Toronto in Canada. And, might I say, I am very impressed that the University of Toronto has such a position, since most American universities that I've ever been near have not yet figured out that that's an important topic. He's published widely on critical theory, socialist and anarchist economic practices, the sociology of work, cooperatives, workers management, and a whole raft of issues like that. He has focused most of his research on Argentina, Italy, and Canada. And it is his latest book that caught our attention and made us decide to pursue this interview with him. That book, published in 2020, is Workers’ Self-Management in Argentina: Contesting Neo-liberalism by Occupying Companies, Creating Cooperatives, and Recuperating Autogestión.

So first of all, Professor Vieta, thank you so much for joining us.

VIETA: It's my pleasure. Thank you for having me.

WOLFF:  Okay. This new book — and I'm going to mention the title again because I really think people ought to take a look at it if they're interested — is Workers’ Self-Management in Argentina: Contesting Neo-liberalism by Occupying Companies, Creating Cooperatives, and Recuperating Autogestión. Give us, if you will, to start, a brief summary of what that book is about and what it tries to do.

VIETA:  Well, the book (thank you for having me, again) is in many ways — although it talks about a movement that's been emerging over the past 20 years — it's really a timely book, because it's about workers in Argentina taking over their places of work, and really putting their destiny into their own hands. And it's really a response to a very virulent form of neoliberalism that landed upon Argentina, so to speak, that was imposed in Argentina, in the 1990s. But let's take a step back a little bit and remember that Argentina, like Chile, were test beds for neoliberalism. And they have, neoliberalism has, blood on its hands, because in Argentina 30,000 mostly workers and working-class people disappeared.

In the ‘90s, with high rates of unemployment and inflation, the IMF decided to impose a really virulent form of austerity. And this really meant that Argentina lost its control over its money. It pegged the peso to the dollar. And it had to sell over 150 public utilities assets and businesses. In the process, many people became unemployed. And the private sector found it very hard to compete against an inundation of foreign capital into local markets. So many businesses went under. What also happened is some nefarious bosses and business owners started to practice nefarious practices, like declaring bankruptcy and then stealing their own assets and selling them, or moving somewhere else with cheaper labor. So workers caught on to this and started occupying their companies, and then converting them to cooperatives. 

But this doesn't only just emerge out of nowhere. It emerges because the rates of exploitation on shop floors in Argentina at the time — so the mid-’90s to the early 2000s — were so high that workers saw that their wage-labor contracts were violated, the basic tenets of the wage-labor contract were violated. And so they decided to take matters into their own hands. I borrow from British historian E.P. Thompson that what they did was, they seized on a moral economy of work, where the basic agreement between capital and labor is ruptured. 

And so workers took over their workplaces, and also seized on the social memory of a militant labor-union activism in Argentina — occupying streets, and plazas, which historically has a long tradition in Argentina. And in a convergence of, a contagion of, bottom-up social struggles, as Antonio Negri called Argentina at the turn of the millennium, you saw many social groups seizing plazas, seizing workplaces. And so the ERT movement emerges in this moment. And increasingly more and more workers in small and medium-sized enterprises that had gone under, bankrupt, started taking over their workplaces. And they're still emerging, and they still exist. 

So what I wanted to do was capture this through case studies, through what I call a political economy of the working class, (and I borrow that from Marx, as well) because I think that this is a moment where it's not just about the political economy of capital but what's interesting, the inversion of that is workers actually seizing their capacities from what they have sold off to the capitalist for themselves and running the shop, and basically running a part of the economy. So that's what the book is about. It captures this moment and this working-class experience.

WOLFF:  Well, you know, a hundred questions come to my mind. Let me just ask one before we go on. Where were the capitalists, the initial owners, operators of these enterprises? Where in this story? Do they just fade away? Did they disappear? Did they fight this? What happened there?

VIETA:  Oh, indeed, they fought it. And they fought it with the collusion of the state. And in the ‘90s, also, the form of neoliberalism was so virulent that most unions were co-opted into the model as well. So initially, the labor movement wasn't supportive of workers taking over workplaces because they didn't find a place for themselves. That's changed over the past two decades. 

The owners basically wanted their properties back. And so they seized on private-property rights and laws, and the state kindly supported them and repressed many of these workplaces initially. Now, the state also found that they couldn't have a lot of people unemployed, and that actually these workplaces were kind of productive, and it's better to have workers working than workers unemployed. So eventually the state — with the change of government from this virulent form of neoliberal government in the ‘90s to a more kind of pro-worker government of the Kirchners in the 2000s — became sympathetic to workers taking over workplaces. On top of that, most of the Argentine public supports them, because they view this as workers actually wanting to work for themselves and not be on the dole, so to speak, but actually be productive. And so eventually this started to change in the minds of the state. 

But the capitalist owners wanted their properties back. And, in many cases, they're still wanting their properties back. And this has gone to courts, and prolonged battles. But it's also turned, at times, repressive through the use of repressive violence, with the collusion of the state at times. Now, this happened mostly during the turn of the millennium, as I call them. Increasingly now, these kinds of violent desires to take back their property don't happen anymore — although it still does happen, it doesn't happen to the same extent. 

But the capitalist owners, it's really important to know — they were part of the problem. They ran their businesses to the ground by engaging in nefarious practices, like I just mentioned — declaring bankruptcy when they couldn't compete against foreign capital, and stealing their own assets, stealing their own machines. 

Workers caught on to this. And workers understood that if you take the machines away, you take our capacities to work away. And so they literally occupied the plants. Slept next to the machines. Engaged in often weeks or months of struggle. And ultimately courts would decide in favor, increasingly, of workers working. Initially, interestingly, they worked under usufruct, so they had the rights to the shop, but eventually this became institutionalized, and now the worker cooperative model is the way that kind of stabilizes their conditions of work and allows them to keep on working.

WOLFF:  So is it reasonable, you know, for us to say that, based on the Argentinian experience — and we must recall that Argentina was one of the most industrially developed countries and economies in all of Latin America, and therefore in many ways closer in its overall social organization to developed capitalist countries in North America, Western Europe, and so on. Is it then reasonable to infer that we have an actual historical test case in which workers were able to capture the workplaces that they depended on, to reorganize them, to run them, and to run them so effectively that even a government beholden to capitalist interests had to, in the end, recognize their popularity, their ability to provide gainful employment, etc., so that thousands and thousands of them have survived?

VIETA:  Absolutely, absolutely. The workers in Argentina have shown time and time again, and through various macro- and microeconomic crises, that they can run the shop. And let me also say what you said initially in your last comment, that Argentina up until about 1975, between ‘45 and ‘75, had a 50-50 national income split between capital and labor. It had the strongest unions in Latin America, it had the largest working class in Latin America. And so, in many ways, one can draw similarities between the US economy, the Canadian economy. To be part of the working class up until about ‘75 was to be part of the middle class in Argentina. That's my background. My father worked with cars, and my grandfather was a metal worker. And they very much could guarantee to get a house, and all those trappings of middle-class life. But with the imposition of neoliberalism and the way that it was imposed in Argentina, this impoverished this traditionally strong working class. And it was a way of breaking them up, actually. And it was a bloody way, with the dictatorship.

But what this shows is that workers can run their shops, they can run the economy, and they can run businesses, in ways that are just as viable and competitive, if not more so in many ways. What research shows — and my research included— is that workplaces run by workers actually survive difficulties much better, and they are in many ways much more productive. But what they also show is that they recreate what's important. So when we talk about efficiency in these workplaces — in worker-recuperated enterprises, and worker co-ops — what is exactly being efficient about it? They recreate this. So it's not only efficiently producing widgets, or whatever they do, but it's also efficiently producing sustainable livelihoods. It's efficiently producing democratic workplaces, more humane workplaces.

WOLFF:  You know, in the very few moments we have left — how did the workers feel about it? In other words, I would expect that there would be a transformation of the lives of workers, who suddenly go to a workplace that they are not drones in, but that they are part of what runs it, what makes the big decisions. That the sense of having some control over your life — that's important to all of us — was in some way enhanced. You know, in the 20 seconds you have —is that the case? Did your case studies encounter workers who were celebratory about what had happened?

VIETA:  Yes, but it's contradictory, in the sense that initially they told me, when I asked them how do you feel about it, well I never signed up for this. Because, remember, they were employees before. They never signed up for running a shop. Much more infinitely complicated, and much more work involved. But at the same time, when I asked them, then would you return to working for a boss? No way. No way, because life is better now. And because we can control our workplace. And we feel a sense of what they call compañerismo, or camaraderie, in solidarity.

And they also learn how to be cooperators, through struggle, and this kind of transforms — I talk in my book about transformations of subjectivities, organizations, and communities — because these workplaces also become community economic development centers as well.

WOLFF:  Well, we've run out of time, Marcelo, but thank you so much.

And let me address my audience: This is the kind of evidence about what worker co-ops can mean in a modern industrial society. We should all understand, this is not a mere utopian dream. This is something that working men and women have struggled for and achieved.

Thank you, of course, for your attention, and I look forward to speaking with you all again next week.

Transcript by Marilou Baughman
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Showing 1 comment

  • Pasqual DiGesu
    commented 2021-05-05 00:59:59 -0400
    So what happened to the industry heads, business owners, capitalists when the workers took over the manufacturing facilities?? After capitalizing on bankruptcy, They wanted their property back to further capitalize by liquidating remaining assets. Like the financial firms who buy out factories in this country. How did they attempt this? By colluding with … THE STATE. And when the government realized that in a broken and raped economy that the workers actually were providing new life using those factory owners means, they switched their support to the workers rather than attack them under proprietary law and then were permitted to continue with the blessing of … THE STATE ! Now who will the workers support and who will in turn strengthen the nation as a whole with their cooperation and support? THE STATE.

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