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Socialist Project • E-Bulletin No. 888
October 18, 2013

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Bolivian Government Authorizes Workers
to Take Over Closed or Abandoned Firms

Richard Fidler

On October 7, President Evo Morales issued a government decree that allows workers to establish “social enterprises” in businesses that are bankrupt, winding up, or unjustifiably closed or abandoned. These enterprises, while private, will be operated by the workers and qualify for government assistance.

Enatex workers

Morales issued Supreme Decree 1754 at a ceremony in the presidential palace marking the 62nd anniversary of the founding of the Confederación General de Trabajadores Fabriles de Bolivia (CGTFB – the General Confederation of Industrial Workers of Bolivia). The Minister of Labour, Daniel Santalla, said the decree was issued pursuant to article 54 of Bolivia's new Constitution, which states that workers

“in defense of their workplaces and protection of the social interest may, in accordance with the law, reactivate and reorganize firms that are undergoing bankrupty, creditor proceedings or liquidation, or closed or abandoned without justification, and may form communitarian or social enterprises. The state will contribute to the action of the workers.”

In his remarks to the audience of several hundred union members and leaders, President Morales noted that employers often attempt to blackmail workers with threats to shut down when faced with demands for higher wages. “Now, if they threaten you in that way, the firm may as well go bankrupt or close, because you will become the owners. They will be new social enterprises,” he said.

The Process Begins

Labour Minister Santalla noted that the constitutional article had already been used to establish some firms, such as Enatex, Instrabol, and Traboltex, and that more such firms could now be set up under the new decree.

Business spokesmen predictably warned that the new provisions would be a disincentive to private investment and risk the viability of companies.

Santalla also said that firms that do not comply with their workforce obligations under the law will lose preferential mechanisms to export their products to state-managed markets. And he cited some recent cases in which the government had intervened in defense of workers victimized for their attempts to form unions. In one such case last month, Burger King, the company was fined 30,000 Bolivianos ($4,300 U.S.), ordered to reinstate the fired workers and to recognize the union.

In the following article Alfredo Rada, Bolivia's Deputy Minister of Coordination with the Social Movements, draws attention to some important developments within the country's labour movement and suggests some means by which the unions can be more effectively incorporated within the “process of change” being championed by the government of the MAS-IPSP, the Movement for Socialism – Political Instrument for the Sovereignty of the Peoples. My translation from the Spanish. •

Richard Fidler is an Ottawa member of the Socialist Project. This article first appeared on his blog Life on the Left.

The Working Class and
the Political Process in Bolivia

Alfredo Rada

Five months ago, I was in Tarija participating in a forum debating the political process in Bolivia, a process we call the Democratic and Cultural Revolution. One of those attending asked me whether it was possible to deepen this revolution, to make it an economic and social revolution, without the participation of the working-class. My immediate response was no, that to consolidate a period of transition to the construction of a new form of communitarian socialism it was absolutely necessary that the workers participate within the revolutionary social bloc that has managed this process of transformations starting in 2000 in the so-called water war, when the overthrow of neoliberalism began.

It was a very relevant question since at that moment, in May of 2013, the mobilizations over the Pensions Act called by the leadership of the Central Obrera Boliviana (COB – Bolivian Workers Central) in opposition to the government of Evo Morales were at their height.[1] Strongly influenced by ultraleft political tendencies organized around the self-described “Partido de los Trabajadores” [PT – Workers Party], the COB committed a monumental error in mobilizing their ranks with fevered speeches calling for replacing Evo with “another government,” as a leader of the urban teachers in Santa Cruz put it.

This maximalist orientation led the COB inexorably to defeat, since the strike and the mobilizations never met with popular support and in the end the union leadership had to retreat in virtual disarray. The diversion that led to the defeat originated in the characterization that the ultraleft makes of the present government as “bourgeois and pro-imperialist,” a simplistic deceit peculiar to the political currents of an excessively classist and workerist ideological mould that blocks them from understanding the varied nature of the Bolivian social formation, which can only be analyzed in terms that combine nation and class.

Communitarian Socialism

The present process of change is made up of a dynamic deployment of social class struggles within capitalism that are combined, sometimes in a contradictory way, with the historic struggle of the indigenous nations against the internal capitalism. That is the dialectical nature of this process, in which the anticapitalist and anticolonialist structural tendencies expressed in the political action of exploited classes and oppressed nations make possible the revolutionary transformation of the economic relations of exploitation, the political relations of exclusion and the cultural relations of oppression. Yet there is always the risk that this course of transformations, as a result of external pressures, internal fragmentation or programmatic concessions, will become exhausted or reversed.

Turning to the conflict with the COB, following its dénouement the government set itself the task of rapidly mending its relationship with the working-class sectors while at the same time the rank and file workers began to settle scores with the ultraleft leaderships within the unions. That is what has just occurred in the Sindicato Mixto de Trabajadores Mineros de Huanuni [Combined Union of the Mining Workers in Huanuni], an emblematic organization because that district, located in the western department of Oruro, has the largest proletarian concentration in the entire country. Its 4,500 miners more than a year ago had elected a union leadership radically opposed to the government. This leadership led in the May strike, the blockade of roads in Caihuasi and the blowing up of a bridge located in that locality. Today, weakened and isolated, that ultraleft that was perched for some time in the Huanuni union has ended up being removed by a mass general meeting of the workers, who also decided to approve the construction of a new political pacto de unidad [unity agreement] with the government of Evo Morales.

No doubt such repositioning within the workers' movement will have a major impact on the future of the PT since that political instrument has now lost its backbone; the effects will also be felt in the orientation of the Federación Sindical de Trabajadores Mineros de Bolivia [Federation of Mining Workers of Bolivia] and in the COB itself.

Construction Workers

Let's look at another industrial sector, that of the construction workers. This is one of the fastest growing sources of employment owing to the expansion in public and private investment in new building construction. Everywhere in Bolivia's cities you can see building and housing complexes under way, and with them the hiring of many workers as casual or piecework labour. But the unions in this sector are weak and dispersed, partly because their leadership tends to be controlled by the big construction companies but also because of the sparse regulation exercised by the state.

This submissiveness of the unions began to change at the most recent national congress of the Confederación Sindical de Trabajadores en Construcción de Bolivia [Bolivian Construction Workers Union Confederation], which met in the city of Santa Cruz. The construction workers elected a new union leadership and set their sights on the mandatory organizing of all the building workers, teachers and assistants, replacing oral agreements with the bosses with collective labour contracts in all construction projects. This will also be a means of overcoming the situation of “informal workers” that is one of the worst legacies of neoliberalism in a country in which less than 20 per cent of the workers are unionized.

Manufacturing workers have been one of the hardest-hit sectors, decimated by the massive layoffs euphemistically labelled “relocations” by Supreme Decree 21060 of August 1985. The manufacturing sector was subsequently subjected for almost two decades to the labour flexibility policies of neoliberalism in order to reduce payloads and increase the profits of capital.

Today the manufacturing sector is undergoing a rapid reorganizing of the unions that has helped to strengthen the Confederación General de Trabajadores Fabriles de Bolivia [General Confederation of Manufacturing Workers of Bolivia]. Yet to be consolidated is the organization of new unions, particularly in the cities of El Alto and Santa Cruz, the two major concentrations of industrial factories in Bolivia.

The importance given to reincorporating workers in the process of transformations around a common programmatic agenda with the Morales government lies not only in the fact that it will help to bring together a strong labour base of support, but also that it will strengthen the anti-imperialist and revolutionary tendencies in the process. The programmatic agenda to which we refer could address the following aspects: (1) a new General Labour Law which, while preserving the advances already in the present law, will grant new rights to the workers; (2) a natonal campaign of massive union organization in all industries that are unorganized; and (3) the strengthening of the social and communitarian sector of the economy, in alliance with the nationalized state sector. •

Alfredo Rada is Bolivia's Deputy Minister of Coordination with the Social Movements. The original Spanish version of this article first published at Rebelión.


1. The COB demanded an increase in state pensions to 8,000 bolivianos ($1140) annually for miners, and 5,000 bolivianos ($715) for other sectors. The government offered 4,000 and 3,200 bolivianos respectively ($600/$470), saying that any more would risk the financial sustainability of its pension scheme.

The conflict saw miners, teachers and health workers take to the streets of La Paz, while roadblocks and strikes took place across the country. Police were deployed to break up blockades in Cochabamba and La Paz, leading to several arrests and injuries, while workers at the state-run Huanuni mine joined the La Paz protests, paralysing tin production and costing several million dollars.

Other social sectors in Bolivia organized counter-marches in favour of the government. Representatives of the Confederación Sindical Única de Trabajadores Campesinos de Bolivia (CSUTCB), and the Confederación de Mujeres Campesinas y Originarias Bartolina Sisa marched in La Paz to reject the blockades and mobilisations organized by the COB, while coca workers also protested in favour of the government in Cochabamba. At a rally in La Paz, Morales strongly criticised the COB leaders, accusing them of being at the service of imperialism, capitalism and neoliberalism.

After 16 days of protest, COB leaders agreed to lift the strike for 30 days to allow time to analyse a government offer to reform the current pensions system. Union leaders negotiated for several days in La Paz with officials from the labour and finance ministries, during which the union lowered its demand on pensions to 4,900 bolivianos for miners and 3,700 bolivianos ($700 and $530 respectively) for other sectors. It remains to be seen whether permanent settlement can be reached. (Source: “Strikes and blockades organized by trade unions in pension protest,” Bolivia Information Forum, News Briefing May-June 2013)


#8 Ajamu 2013-10-28 15:01 EST
Why is labour self-management absent the socialist agenda in imperialist states?
Comrades, it is one thing for a regime to declare legislative support for labour self-management. It is a completely different matter to put in place the structures, organizations and other resources to engender the successful operation and growth of producer/worker cooperatives and other labour-managed enterprises.

Please draw lessons from the worker cooperatives in Jamaica's sugar industry during the reformist administration of Michael Manley in the 1970s.

Capitalist enterprises are nestled in a web of institutional and organizational support. Do we believe it is going to be different from for labour-managed firms?

This step by the Bolivian state is an important development on this front. However, the question that I have for comrades who are organizing in the imperialist centres of the world, why is it that labour self-management is absent from our prescriptive agenda?

Karl Marx on Labour Self-management or Worker Cooperatives:
"But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially of the co-operative factories raised by the unassisted efforts of a few bold ‘hands’. The value of these great social experiments cannot be over-rated. By deed, instead of by argument, they have shown that production on a large scale, and in accord with the behest of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolised as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart." - Marx, K. 1864. Inaugural address of the Working Men’s International Association, in Marx–Engels, Collected Works, Vol. 20 (cited in "Marx, Marxism and the cooperative movement" by Bruno Jossa, Cambridge Journal of Economics 2005, 29, 3–18).

Mikhail Bakunin on Worker Cooperatives and the Social Revolution:
"The cooperative workers’ associations are a new fact in history. At this time we can only speculate about, but not determine, the immense development that they will doubtlessly exhibit in the new political and social conditions of the future. It is possible and even very likely that they will some day transcend the limits of towns, provinces, and even states. They may entirely reconstitute society, dividing it not into nations but into different industrial groups, organized not according to the needs of politics but to those of production But this is for the future. Be that as it may, we can already proclaim this fundamental principle: irrespective of their functions or aims, all associations, like all individuals, must enjoy absolute freedom...." in the Revolutionary Catechism (Sam Dolgoff, Bakunin on Anarchism,1971).

#7 Richard Fidler 2013-10-24 15:15 EST
Bolivia's Enatex
My comment on some of the previous comments, and some further remarks on Enatex:

#6 Adam 2013-10-21 19:11 EST

Richard Fidler seems to be confused about what's going on in Bolivia. Enatex isn't worker-owned and it has nothing to do with the definition of a "social enterprise" set out either in Article 54 of the constitution or in this latest decree. It's a conventional state-owned enterprise (the name should give us a clue: Empresa Pública Nacional Estratégica Textil) that was set up when the government struck a deal to lease Ametex's plant and machinery. If I recall correctly, there was some negotiation around discounting some of Ametex's debts to the pension system from the price of the lease. In July of this year Enatex's workers went on strike to demand a raise (which they got) and the firing of the general manager Alejandro Zárate (which they didn't get).

Okasis is right to point out that workers' takeovers of failing firms aren't doomed to fail and they'd likely have a better chance of succeeding in Bolivia than in Argentina or Venezuela. The point is that no such takeovers have taken place yet and there's good reason to be skeptical of Fidler's claim that the government wants to promote them or give them any of the support they'd need to be successful. As I pointed out in my earlier comment, the government has basically ignored Article 54 up to this point. So what's different now? Why should we think this a serious proposal that's going to lead to any concrete action, especially in light of the continued tension between the MAS and the Bolivian workers' movement?

#5 Sam 2013-10-21 12:22 EST

I agree that the political context is crucial; thanks Richard for more detail on this. My concern was that we don't romanticize or generalize this but are sensitive to its limits and, as Richard says, its particular context. Updates are important.

By the way, at a Argentinian worker-owned plant I visited, three interesting aspects were:

a) While wages became market dependent and limited by debts, strong health and safety protection seemed to have become a given.

b) Because Argentina introduced some protectionism during the crisis, the plant was able to survive; without that, China would have captured the market (kitchen electric blenders). Argentina was able to act in a protectionist way because it exported resources (beef, grain, minerals) that were in large demand and wouldn't lead to retaliation.

c) Even so, the workforce was a small fraction of what it once was because of the loss in market that led to the original closure.

#4 Richard Fidler 2013-10-21 04:16 EST
Comment on Sam Gindin's note
Sam's general warning about the potential pitfalls of "worker owned" firms echoes the classic arguments the left has always raised against this kind of measure under capitalism. The argument is, generally speaking, valid. But as Sam indicates, there may be cases where a worker takeover, even short of nationalization under workers control, may be supported: for example, to avoid the mass unemployment and dispersal of an established concentration of workers, especially in localities where there are few alternative means of employment, or to maintain intact a work force with certain specialized skills in the hope of finding alternative employment opportunities over time.

Political context is important, too. Sam does not address this. It may seem strange to workers in North America, where we have become inured to neoliberal capitalist governments, but in Bolivia most working people have developed a different relationship to government since they began to break consciously with neoliberalism at the beginning of this century -- first, in the "water war" in Cochabamba, then in the "gas war" in 2003 when they overthrew a neoliberal government, and subsequently in 2005 when they elected Evo Morales president. The new government oversaw the adoption of a Constitution with a pro-worker orientation that includes many progressive provisions, including the one I cited in my article.

The article noted that the "social enterprise" formula being adopted in the Bolivian legislation had some precedents in practice. The Labour Minister cited some examples. One was Enatex, a textile firm. It turns out there is a fair amount of material on this company available on the web.

Enatex was established as a worker-owned "social enterprise" in June 2012 when its forerunner, America Textil (Ametex) was on the verge of bankruptcy. Ametex's difficulties had begun in 2002 when it lost its US tariff preferences. A major concern last year was to preserve Bolivia's textile industry and the jobs and pension savings of the company's 1700 employees, many of them with more than 20 years experience on the job. The government provided the new enterprise with $7.7 million in initial start-up funding and advice from financial and commercial experts.

Enatex currently exports 90% of its production. It major sales are in Venezuela and Cuba through contracts negotiated under ALBA, the Bolivarian Alliance for the Peoples of Our Americas, which privileges barter agreements and mutual economic assistance independent of the prevailing "free trade" and investment pacts. Other major clients are in Brazil and Argentina.

The company is apparently operating efficiently, with sales in the hundreds of millions of dollars. It has one of the most advanced cotton fibre laboratories in South America. And it recently launched its own new brand, "Dressing with Dignity." It has plans to expand its domestic market to 30% of production using indigenous Bolivian designs for its products.

The other "social enterprise" precedents cited by the Minister are much smaller; Traboltex, for example, has only 120 employees. And information on them is not so readily available. None of these experiences, of course, should be taken as offering general formulas for emancipation of the working class from wage-labour and exploitation. They are all defensive in nature.

However, as the Enatex example indicates, a crucial factor in its apparent success has been the existence of government support in a number of key areas: funding, on-going supervision and advice, and not least the beneficial trade agreements negotiated by Bolivia with other progressive governments in Latin America. As the new Supreme Decree 1754 indicates, such assistance would be available to workers in similar situations who "voluntarily" decide to fight closures through forming their own "social enterprises."

In the light of these considerations, Sam's main point is à propos: "What is crucial is that this be part of a larger movement that understands the ultimate goal as a planned economy under democratic worker/community control and so such takeovers are seen as experiments or as second-best solutions when other alternatives don't exist."

I think that is a fair description of how the Bolivian government views these "social enterprises" and how they fit within its overall long-range development plan. A succinct explanation of that plan is contained in the "Agenda Patriótica 2025," which the governing MAS-IPSP will be campaigning on in the 2014 presidential and legislative elections. The government's view of the role of the working class in Bolivia's "process of change" is further described in the article by Alfredo Rada, the deputy minister, that accompanied my report on the new "social enterprise" decree.

Naomi Klein's documentary film The Take, about an (ultimately unsuccessful) attempt by some Argentine workers to fight a factory closure by forming their own worker-owned enterprise, could stand as a counter-example. In that case, a prevailing theme throughout the film was the workers' inability to obtain even a sympathetic hearing from the government authorities.


#3 Okasis 2013-10-21 01:40 EST
Worker Ownership
These takeovers are not doomed to failure. Argentina workers did exactly that: they took over companies whose owners walked away during the financial crisis there. After the Company and Country recovered, Owners sued to get property returned, and the courts said no. The workers got full title from the Government.

Bolivia and Venezuela are very different countries, just as Argentina and Brazil are. The actions of one may not be at all similar to the other. Venezuela has a big population of wealthy people who have little interest in the Country or its poorer Citizens. Before Chavez, they were happy to reap the benefits of an extraction economy that pays well even now with the high price of oil. Basically, they lived in a 'rentier' society, much like any wealthy Colonialists. The fact that most people were living is extreme poverty and had no health care or education was meaningless to the upper class. The lower-classes had no sense of ownership or political action. Cuba before Fidel was much like Venezuela before Chavez. If Chavez had not garnered the support of the Military, his Revolution would have failed in 2000, or as a result of the 2002 Coup.

OTOH, Bolivia has a history of working-class activism, and it has always been based on the indigenous population groups. The Communist Party also has a lengthy history in Bolivia, for all that they refused to support Che [they were Stalinists, not into Trotskyite Revolutionary actions]. In the early 1950s the Tin Miners were organized by the Communist Party, and their union staged lengthy, bloody strikes. We got involved during the Eisenhower Admin and used it as a practice field for Latin American subversion. The organized protests to Evo's policies that are fairly common in Bolivia, are not new behaviors for the Bolivian Working Class. The indigenous people of Bolivia are much more used to a Communal Society than any Euro-centric Capitalistic Society. Running a small business should not be beyond the capabilities of a group of experienced workers.

Watching Evo Morales' reactions to the disrespect shown him by both European Nations and the US, is note-worthy. It may give him an opportunity to be more forceful when dealing with the Capitalistic Bastards, than he has been. It's obvious that 'making nice' isn't working for him...

#2 Adam 2013-10-20 03:05 EST

I agree with most of what Sam has to say here. Many of his fears have already been borne out in Venezuela, where half-assed experiments with co-operatives and co-management failed badly and some of the few expropriated firms that are still up and running (e.g. Industrias Diana, La Gaviota, Lácteos Los Andes) likely won't make it through the present crisis.

For what it's worth, I also think it's silly to act as though a couple of press releases can tell us much about the Bolivian government's plans or its conflict with the workers' movement. Why should we treat this particular decree so seriously if Article 54 of the constitution has basically been letra muerte? Anyone who reads the decree itself ( will see that the references to "social enterprises of a private character" and workers' taking on all "responsibility and risk" are actually a step back from what Article 54 was meant to allow and the process of forming one of these enterprises is now little more than workers getting a right of first refusal when a failing firm is put up for sale.

Also, can someone explain the point of publishing Alfredo Rada's attack on the C.O.B. so uncritically and without any of the context that would be needed to make sense of it?

#1 Sam 2013-10-19 15:30 EST
A quick note ...
A quick note on encouraging workers to take over bankrupt firms. This is not always progressive. More accurately, we should be sensitive to its limits. It seems to be labour-positive in this case, but...

When workers confront corporations who decide to pull out and the workers have no choice but to accept the loss of their jobs or take over the facility, the takeovers should clearly be supported. But we should be honest about what this means:

a) Workers are taking over the worst facilities and leaving the best intact.
b) This 'right' may reduce pressures on corporations to stay; it may actually ease corporate exit
c) The workers who take over the facility still face the power of national and international competition and so pressures to behave like 'ordinary' corporations (or at least to minimize the differences).
d) The ultimate result can be to discredit worker ownership and demoralize workers.

What is crucial is that this be part of a larger movement that understands the ultimate goal as a planned economy under democratic worker/community control and so such takeovers are seen as experiments or as second-best solutions when other alternatives don't exist. Moreover,

i) Workers need to continue to challenge the right to close productive facilities and not endorse closures

ii) The alternative should not be group ownership (the particular workers there) but social ownership (eg state or municipality ownership) so society and the state have a responsibility in supporting them and integrating them into socially useful production.

iii) Broader conditions must be put in place that make jobs less dependent on competitive markets (limit free trade; a degree of planning with state, municipalities and para-state institutions like hospitals and schools as purchasers; environmental plans linked to production).

iv) Where there are such takeovers, workers must get the training and access to engineers, funds, and new investment to support the operation so they don't compete simply by greater self-exploitation or simply fail (especially since these operations were already in danger of failing).

v) Beyond all this, a socialist strategy must include plans to take over profitable and not just failing facilities so their strength can be used for social purposes and not become a lever to win more business concessions and more business-friendly policies.

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