Out of the ashes of the Washington Consensus,
workers in Argentina have forged an alternative model of economic progress that has much to teach the world.  After faithfully following World Bank and International Monetary Fund privatization prescriptions, by 2001 Argentina found itself on the brink of a complete economic meltdown. People took to the streets  in December banging pots, blocking roads, demanding change, and in a dizzying succession of events, including five presidents in the Casa Rosada over the course of eight days, Argentina moved out of Washington’s orbit on a trajectory that is still taking shape.
Beginning in the 1980’s (“the lost decade” ) Argentina fell under the growing influence of the IMF, the World Bank, and what has come to be known as the “Washington Consensus,” a neo-liberal project advocating removal of tariffs and government subsidies, the shrinking of social safety nets, privatization of state enterprises, and deregulation of commerce. In Argentina, the result of these programs was the massive collapse of small and medium enterprises and an unemployment rate that reached a record 23%.  Another 40% of Argentineans were unable to find adequate employment and 53% of the population lived below the poverty line by 2002. 
During the 1990’s resistance to the Washington Consensus began to build as conditions worsened. In 1990, less than 15% of Argentinean families lived below the poverty line. By 2000, more than 30% lived below the poverty line, and by 2002 the majority of Argentineans lived in poverty.  In tandem with these worsening conditions, capital flight  produced thousands of shuttered, padlocked factories, with workers’ idle fingers gripping the chain link fences keeping them from their means of livelihood. Many of the locked out workers were owed months of back pay, a crucial fact which in many instances gave workers the right to make claims in bankruptcy proceedings. As owners gradually stripped the factories, selling off anything they could to pay off debts, workers’ anger grew, then turned into action. Workers cut through the locks, occupied their former workplaces, and began bringing the idle enterprises back into operation. Even more provocative than the expropriation of the means of production were the management principles employed. These were to be enterprises without bosses. In the process of saving their jobs, workers also produced an entirely new political culture.
Direct action, factory occupations, and the formation of workers’ co-operatives were not entirely new to Argentina. In the 1960s factory occupations were fairly common, the unemployed workers movement engaged in direct action routinely during the 1990’s, and there were even earlier examples of worker owned and operated co-operatives.  In the 1980s workers had formed 15-20 co-operatives, but only five or six were fully functioning, and of these, most were actually dominated by previous owners.  But there was little awareness of these experiments among workers. Indeed, few, if any, workers were aware of successful worker owned and operated enterprises outside Argentina such as the Mondragon companies in Spain or the early plywood factories in the United States. Thus, the spontaneous emergence of a movement employing direct action in the form of occupations, expropriations, and street protests, along with an ethic of horizontal relations, direct democracy, and community solidarity is all the more remarkable.
In 1992 the first of these different, more militant cooperatives was established in the capital when former workers of the Boletín Oficial formed the cooperative Gráfica Campichuelo after the state granted the workers ownership of the bankrupted print shop, including the buildings and equipment.  But this was an isolated event and the first militant expropriation, marking the beginning of the “Recuperated Enterprises” movement, took place in 1996, in La Matanza, when workers took over Frigorífico Yaguané. Two years later, in the capital, workers took over Industrias Metalúrgicas y Plásticas Argentina (IMPA), and simultaneously, workers in Santa Fe recovered Frigoífico Ledesma. Suddenly there was a movement. The IMPA recovery proved to be the pivotal event in the Recuperated Enterprises movement, giving birth to an umbrella organization, Movimiento Nacional de Empresas Recuperadas (MNER), that continues, along with three other organizations subsequently emerging out of the movement,  to facilitate the take over of other enterprises. By 2005, there were more than 180 recuperated enterprises employing more than 10,000 workers. 
Workers made great sacrifices to make the recuperated enterprise movement a success. Often workers went months without an income,  on several occasions workers were forcibly evicted and had to re-occupy enterprises, leaders were kidnapped and beaten,  former owners brought law suits to recover their property, and there was great uncertainty over whether or not legislative bodies would accommodate the workers’ challenge to capitalism. While many of the legal battles continue, there is no turning back the workers’ determination to protect their hard won victories, the most important of which is a new movement culture based on horizontal relations, social solidarity, and the militant assertion of rights.
In the overwhelming majority of recuperated enterprises there are no bosses and everyone is paid the same wage. Decisions are made democratically, in worker assemblies, with everyone having an equal say. For example, Alberto, a member of the Pismanta Hot Springs cooperative explained the process : “Once a month we hold an assembly to plan what we are going to do the next month. All the compañeros can discuss and decide whether it’s a good idea or not.”  Once the enterprises are up and running, wages are almost always higher than under the previous management or in comparable enterprises.  Established recuperated enterprises help spawn new additions to the movement through barter arrangements, the donation of materials, and through sharing of experience with workers starting their own recuperative projects. Recuperated enterprises are also much more tightly integrated with their surrounding communities. Community representatives sometimes have formal representation within the workers’ assemblies, and recuperated enterprises contribute labor and materials to community projects. The link between recuperated enterprises and neighborhood assemblies was strongest in the cases were the conflict between workers and former owners was particularly intense.  Recuperated enterprises are also much safer places to work with dramatically reduced workplace injuries. Because recurperated enterprises are run democratically, there is considerable variation from enterprise to enterprise, with some enterprises employing managers or deviating from the equal pay principles, but by and large the general description herein applies to the overwhelming majority of cases.
In general, there have been three paths to recuperation, all motivated not by ideology, but by the desire to save jobs. Indeed, as will be argued below, the ideological principles of the new culture emerged more out of local conditions than any pre-conceived prescriptions. In 46.7% of 170 cases studied by the Centro Cultural de la Cooperacion, workers occupied factories in the process of recuperation. In 24% of the cases workers surrounded the business, blocked streets and prevented owners from liquidating the enterprises. In 26.7% of the cases, workers engaged in direct negotiations with former owners in order to obtain title to the enterprises.  As the authors of the Centro study commented, “The workers’ objective was in every case the survival of the enterprise in order to maintain their jobs.”  Of the 170 cases studied, in 6% of the cases workers abandoned efforts to reclaim the enterprise ; in 17% of the cases the workers either rented the facilities from the former owners or reached a legal agreement allowing the workers to run the business ; 29% of the cases were successful direct expropriations ; in 2% of the cases (e.g., Brukman and Zanon), where conflict was particularly intense, the workers appealed for state intervention ; in 14% of the cases workers reached agreement with the former owners ; 12% of the cases fell into a catch-all “other” category ; and 20% of the cases were without any legal resolution as of late 2003. 
Geographically, 64% of recuperated enterprises are in the greater Buenos Aires area, 20% are in the city proper, and the remainder are spread throughout the rest of Argentina (e.g., 16.1% in Sante Fe and 4.6% in Córdoba).  In terms of size, 13% of recuperated enterprises employ less than 10 workers, 23% employ between 12 and 20 workers, 40% employ between 10 and 50 workers, and 24% employ more than 50 workers.  Recuperated enterprises also cover the full range of commerce : 26% are in metal products, 8% in machinery and electronics, 8% in refrigeration, 6.9% in the food services, 5.7% in printing, and 5.7% in transportation.  In short, from baking bread, to making shoes, furniture and clothes, to health and child care, to building ships, recuperated enterprises operate in every sector of the economy and include small, medium and large businesses. Prior to the 2001 economic crisis there were only a few dozen recuperated enterprises. Two years after the crisis, there were almost two hundred.  Indeed, the bulk of recuperations occurred between 2001 and 2003 as shown in Figure 1.  Clearly, the events of December 2001 marked a watershed in Argentina’s political culture, with direct action, solidarity, and principles of “horizontalidad” coming to the fore.
To date there is no national legal structure governing the recuperation process. Rather, municipal and provincial legislatures have acted mostly on a case by case basis, although there is some movement toward standardization of the recuperation process, primarily through tinkering with bankruptcy laws. In the capitol, the municipal government legitimized eleven recuperated enterprises by passing legislation granting workers the right to run the enterprises collectively.  In one of the most visible struggles, the recuperation of the B.A.U.E.N Hotel, a mediation agreement has been signed between the municipal government, MNER representing the B.A.U.E.N. collective, and the former owners, the outcome of which is still pending. In the mean time, the hotel is operating without any legal protection. The B.A.U.E.N. Hotel, located only steps away from the legislature, sits on
prime real estate and the stakes for all involved are high. A group of 30 former workers out of 150 locked out by the owners took over a dilapidated building on March 21, 2003 and after investing labor and capital, the hotel has been brought back into operation and now employs over 140 people.  Significantly, the “workers are able to do what capitalist employers aren’t interested in doing : creating more jobs and better salaries. ‘Today, everyone employed at Bauen makes 800 pesos a month (roughly US$265).’” 
Another approach is being pursued by the Zanon Cooperative, formally named FaSinPat, an acronym for Factories Without Bosses. The cooperative is autonomous but is also part of the Ceramists Union in Neuquén. FaSinPat is demanding national expropriation and continued operation under workers’ control, but they are meeting stiff resistance :
“The government’s response to Zanon has been violent, using different tactics to evict the factory workers. The government has tried to evict five times using police operatives. On April 8, 2003 over 5,000 community members from Neuquén came out to defend the factory during the last eviction attempt.” 
Similar community support led to the Brukman cooperative’s successful resistance to various legal manoeuvres to wrest control of the suit factory from the workers. The Brukman case is also important because almost all the workers are women.  As with other enterprises, as the economic crisis mounted, Brukman reduced salaries or stopped paying workers entirely. In the weeks before the take-over the employers reduced wages from $5 per week to $2 per week and finally stopped paying at all.  Eventually, owed months of back salary the workers occupied the factory on December 18, 2001 just as Argentina was about to erupt. The workers decided to form a cooperative and run the factory themselves, which they did for two years. Then the struggle reached a turning point on April 17, 2003 when an adverse court decision led to the police forcibly evicting the workers for the third time. This time the police erected a metal fence around the entire block and welded the factory gate shut. In a matter of hours thousands of supporters, including the Mothers of the Disappeared, academics, and the unemployed workers movement, surrounded the six story factory, now occupied by police, chanting “Brukman belongs to the workers and those who don’t like it can screw themselves.”  The resulting conflict, and the repression of the protests in the heart of the capitol, brought the workers’ struggle to the attention of the nation.
For four days more than a thousand police faced off against the workers and several thousand of their supporters. Eventually a handful of Brukman workers moved aside a barricade and attempted to enter the factory. The police responded immediately, advancing on the crowd while firing tear gas and rubber bullets at point blank range.  Fallen protesters were beaten and kicked by police and the crowd eventually dispersed. The workers re-grouped in somewhat smaller numbers and occupied the street corner while police remained ensconced in the factory doorway until early May. Some of the workers called on representatives in the government to assist in a resolution of the conflict and surprisingly the workers won their case in the Buenos Aires legislature. The locks were sawed off and today Brukman is a fully functioning recuperated enterprise. 
There have also been a number of cases that have not involved occupation of an enterprise’s physical plant, but have been every bit as confrontational. In some cases rather than occupying the premises, workers surround the business blocking ingress or egress in order to stop systematic looting by previous owners. Magnani (2005) provides the example of the Cristal Avellaneda co-op :
"A worker tells us, ‘December 12, 2000, the factory closed due to bankruptcy, and we were left on the streets, waiting to receive a piece of paper that would say that we were going to get money once the whole thing was auctioned. We were so naive.’ Many trucks soon arrived, and loaded up anything they could. When the workers realized what was happening, they decided to set up a big tent in front of the factory to protect the assets from this looting, most likely done by the former owner with the ‘permission’ of the judge. The workers then set up a co-op, and asked the judge in charge of the bankruptcy to allow them to keep on running the factory. Their main argument was the constitutional right to work. Unfortunately, the pace of justice is far slower that the pace of hunger, and the judge took a year and a half to give them permission. So the workers of the factory managed on their own with no capital and after more than a year of taking home no money...,finally, an expropriation law was passed by the legislature which gave them five years to establish themselves and start paying for the factory."
As remarkable as the recovery of more than 10,000 jobs is,  even more remarkable is the change of consciousness brought about in the midst of the economic crisis of 2001. The most important changes in consciousness were the rupture of faith in hierarchical relations and the emphasis on collective as opposed to individual action. As Carina, a member of Comité Movilizador del Foro Social Mundial en Argentina, commented, “One of the first things we recovered on the 19th and 20th [of December 2001] was face to face relations.”  She characterized the 90’s as a period of fragmentation and isolation, a period in which many social spaces were lost, but in the moment of rebellion community was re-established :
“What we had lost was face to face relations with our neighbors. When we took our pots to the streets on the 19th, it was crazy. People with whom we never talked or even greeted, were standing together, banging pots in the street. My butcher, by farmacist, in the street together.” 
Perhaps of equal importance to the recovery of their jobs and a sense of community was the recovery of dignity. As a worker at Brukman commented, “It’s not like before when the bosses, the bourgeoisie, stole our money and treated us like slaves. All we are asking is for decent wages and dignity.”  Another Brukman worker commented,
“Before, when the bosses were here, it was different. You’d come to work, work your hours, without knowing the people. It was only ‘hi’ and ‘bye’, there was no communication. I didn’t even know the people from the other floors. Now everything is more open. We know each other because we co-exist together.” 
Thus, each day, in the process of producing goods and services, the recuperated enterprises also reproduce solidarity.
Simultaneously, the recuperated enterprises undermine key assumptions of capitalism. Not only are workers proving themselves capable of managing the workplace, they do a fundamentally better job than the capitalists were ever able to do. It must be remembered that in every case, the workers took over enterprises that had been run into the ground by their former owners. In most cases, after recuperation the enterprises reached previous levels of production or exceeded those levels, paid higher wages than the capitalists while expanding the number of jobs, also producing safer work conditions, and demystified the management process. As Hebe de Bonafini, from Mothers of the Disappeared, explained :
“This shows that the factories can work fantastically without the owners....We need to explain that the workers running the factories is the most marvellous thing that has happened in this country....they are all examples. Without the bosses, the factories work. And that’s what hurts them. It hurts the oligarchy, it hurts imperialism, it hurts capitalism and it hurts the politicians. It’s a stick up the ass of the politicians.” 
One of the Brukman workers concurred when commenting on the efforts of the authorities to oust the workers :
“It’s clear why they are preparing...these attacks on the workers. Because they know that the workers are doing what the bosses weren’t capable of : to make the factories work and generate genuine jobs for the workers... We know how to work, we know how to make a factory produce, We know how to administer it. We’re showing that to society.” 
Likewise, a long-time worker at Brukman confirmed that a major lesson learned as a result of the recuperation process was that managers are unnecessary : “For us as workers, accounting is easy. I don’t know why it’s so hard for the bosses to pay salaries, buy materials and pay the bills. For me it’s easy — you add and subtract (laughing).” 
Not only were managers proved dispensable, workers began to realize that to a large extent managers are the problem, not the solution :
"If shrewd industrialists with an open credit line ran these companies into bankruptcy, how can worker-controlled co-operatives with no capital and no prior business experience be carrying on, and even thriving, during the worst economic slump in Argentina’s history ? Wiping the books clean of debts does not hurt. But more importantly, say the workers, are the profits freed up by removing the owner’s hefty take and the higher salaries earned by managerial and administrative staff.
At the Union and Force plant, the owner and 10 managers together took home $38,100 a month, according to Salcedo.
‘Split among 54 workers, that’s plenty to make this viable,’ he says.” (Lindsay, 2002, p. B4.)
While direct expreience managing enterprises was of fundamental importance, the larger rebellion which took place in late 2001 through 2003 involving neighborhood assemblies, the unemployed workers movement, and a variety of other mobilized groups, was key to the success of the much smaller recuperated enterprise movement. In many cases, it was the support of the larger movement which forced police to back down, which mobilized support in the legislature, and which gave workers the courage to challenge the owners. But the larger movement also created problems for the workers as existing groups vied for influence in the emerging new consciousness. As has so often been the case over the past two centuries, one of the primary conflicts occured between Marxist and anarchist groupings :
"More significantly, neighbourhood popular assemblies spread throughout the city of Buenos Aires, as hundreds of thousands met spontaneously to discuss their losses and their predicament. Those who previously suffered quietly spoke up at meetings voicing their anger, and the debates continued for hours at a time. Hundreds of proposals and radical demands were voted on and approved — though few, if any, were implemented. The established small Marxist parties and anarchists intervened — each with their own agenda and conception of the role the assemblies should play. Arguments between them extended into almost nightly meetings in parks, plazas and street corners. The anarchists argued as ‘horizontalists’ for open-ended meetings without agendas, leaders, spokespersons, or closure. The Marxist grouplets were for a fixed agenda (their priorities), for an established leadership (their cadres) and majority votes. Each saw the assemblies as prototypes of ‘communes’ or ‘soviets.’" (Petras, 2003a)
Petras went on to argue,
"Among the mobilized unemployed and barrio assemblies there was a general rejection of the traditional political leaders expressed in the slogan, ’’Que se vayan todos’’ — which, for the anarchists, spontaneist and many social movement leaders, meant a rejection of any form of political organization and electoral activity. What was an initial healthy spontaneous rejection of the dominant political class turned into a dogma, precluding the development of a new political leadership and flexible tactics capable of gaining institutional political power." (Petras, 2003a)
Here Petras makes the classic Marxist assumption that revolution necessarily means capturing institututional levers of political power, whereas the anarchist approach is to focus on creating a new social reality. Clearly, the anarchist perspective won the day in that spontaneity, horizontal relations, a rejection of traditional political parties, and the rejection of any kind of bossism whether political or economic, permeated the new political culture, but not because of anything anarchists did. Petras rightly emphasizes that the uprising in December 2001 was “a spontaneous mass rebellion with a limited agenda and widespread popular support.” It was the conditions workers were confronted with that molded their perspective, not ideological debates among Marxists, anarchists, Peronists, or any other political formation. When workers occupied factories, with very few exceptions, it was without former managers by their side. The management class sided almost uniformly with the capitalists. Consequently, workers had no alternative but to rely upon their own resources. When the workers occupied enterprises, there were no bosses. All the occupiers were in the same situation, taking the same risks, facing the same consequences. Out of these fundamental conditions of equality arose the horizontal ethic, or as Piaget might have noted, “Consciousness follows upon the heels of action.”