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23. Argentina Crisis Sparks Cooperative Growth


YES! MAGAZINE, Fall 2002
Title: “Starting Over”
Author: Lisa Garrigues

Title: “Don’t Cry For Argentina”
Author: Leif Utne

Evaluator: Patricia Leigh Gibbs Ph.D.
Student Researchers: Emilio Licea, Jennifer Scanlan, Dana Balicki

The citizens of Argentina are cooperatively rebuilding their country, rising above the financial devastation caused by decades of privatization and military leadership. In December 2001 the International Monetary Fund (IMF) recipe had gone sour destroying currency values and employment levels. The IMF “recipe” had used loans to prop up an overvalued peso, as well push the multinational privatization of Argentine companies.

The resulting crisis left thousands of people unemployed. Fearing a run on the banks, the government froze accounts, enraging a public that was already nervous about losing their life savings. Millions took to the streets throughout the country shouting “Que se vayan todos!” (roughly “throw the bums out!”)

The president resigned and within a month Argentina defaulted on $132 billion of foreign debt, suffered a 25 percent unemployment rate, a middle class rapidly slipping into poverty, widespread hunger and mounting crime. What had once been the world’s seventh richest nation found itself in complete economic, political, and social collapse.

Alva Sotelo was a seamstress at a Brukman Factory in Buenos Aires, where like many other debt-burdened factories the owners cut their losses and abandoned the plant. With the idea of survival fueling the factory’s “former” employees, they began sleeping in the factory hoping their employers would come back and pay their salaries. Eventually the workers at Brukman and hundreds of other previously employed factory workers, having no other alternative, began to slowly run the factory themselves. The workers at Brukman elected a six-member commission to coordinate the work; they managed to pay off the debts with factory profits and managed to pay workers an equal amount by dividing the remaining profits.

The middle and lower classes have joined in a grassroots movement to take back the country. The power vacuum is being filled by an array of grassroots democratic organizations. Asambleas populares (popular assemblies) are occurring all over the country including over 200 neighborhoods in Buenos Aires alone. These assemblies consist of people gathering in parks or plazas to address problems facing their communities: food distribution, health care, day care, welfare, and transportation. “The spirit on the streets and in the assemblies is that people can govern themselves,” notes SIC magazine. According to one poll, one third of Argentines have attended a popular assembly, and “35 percent say the assemblies constitute ‘a new form of political organization.’” Many people have even disengaged themselves from the formal peso economy by joining “barter clubs”-neighborhood-based economic networks, often with their own currency, that let citizens trade goods and services without dealing with the banks. The barter system now accounts for $400-600 million worth of business.

The spirit of the cooperative is alive and well in cities, rural areas and neighborhoods all over Argentina. Neighborhood assemblies have organized alternative forms of survival such as street corner soup kitchens. Food donations are now replacing money as the price of entrance to cultural events. Community gardens are prospering.

The most extraordinary of these new forms of survival are worker cooperatives like the Brukman factory. There are about 100 legal, worker-owned cooperatives in Argentina, which range in size from eight employees to over a thousand. Roughly 10 businesses a month are being taken over and run by the employees. Most of them share a model similar to Brukman’s, where the workers elect the managers of the company and the profits are split among the workers. The original owners often attempt to evict workers, but are unsuccessful either because they are legally challenged or because members of the local neighborhood assemblies show up and hold nonviolent protests and vigils against the eviction of the workers.

Argentina is awash in economic and political chaos; however it is clear that the Argentine people have decided to take control of their communities. The current rebuilding process does not depend on IMF recipes or capitalist promises, but rather on the co-operation of hundreds of Argentines. It’s an enormous social experiment that could prove to be the first great popular rebellion against capitalism of the 21st century. When an entire people wake from the trance of political passiveness, it seems that anything is possible.

UPDATE BY LISA GARRIGUES: Most U.S. media covered, at least briefly, the food rioting and looting that broke out in Argentina in December, 2001, as a result of its economic collapse. But few discussed the economic alternatives, experiments in direct democracy, and solidarity that began to take shape after the Argentine collapse. As the corporate driven world economy marginalizes more and more people, it becomes increasingly important to investigate the alternatives that are “growing through the cracks in the system.”

How can we learn from the Argentine experiment, its successes and failures?

The workers at the Brukman factory which was featured in the article were evicted in April, 2003, in a violent confrontation between demonstrators and police in which police fired rubber and lead bullets, then chased demonstrators twenty blocks into a children’s hospital and lobbed tear gas into the hospital. As of this writing, the workers are attempting to work out an arrangement to continue to operate in another location. However, workers throughout Argentina continue to occupy and run factories, and unemployed groups are still squatting unoccupied land, baking bread, starting cooperative businesses.
The barter clubs had faded out by the end of 2002. Most Argentines say that they ceased to function because of corruption, counterfeiting of barter “credits”, and because many people simply ran out of items to trade.

The neighborhood assemblies operate on a much smaller level, with 10-50 people per assembly. Some assemblies took over abandoned public and private property banks, empty lots, buildings and turned them into soup kitchens and cultural centers. Most of these groups have since been evicted by the government.

Some people who left the assemblies say they fell victim to takeover by established left wing political parties, an inability to work together, and increased marginalization from the middle class that had spawned them. However, the assemblies continue to take on important tasks within the neighborhood, like sending food to malnourished children, organizing vaccinations and health fairs, and one assembly has recently received official recognition by the government.

The feeling of renewed solidarity among the Argentine people has continued. As one sociologist I interviewed last year said, “It’s not important whether the neighborhood assemblies succeed or fail, what’s important is that the Argentine people have begun to think differently.”

It is this “thinking differently”, thinking beyond the ways that have been handed down to them by a collapsing system, that has remained. And this, I believe, is the lesson, not just for the citizens of this country who have finally woken up from the fear of their own neighbor that was instilled in them during the dictatorship, but for all of us.

When the system fails us, or when we see that the system if failing our neighbor, who might live down the street, or the on the other side of the world, we can choose to begin to think differently, to build a system that includes all of us.

Useful websites: (narratives and analyses of the social and economic experiments in Argentina, news and photos from 2001-2002.) (ongoing coverage and analysis of events in Argentina (go to the Argentina section for news updates in English)

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