Chavez Calls for Democracy at Work
The heat and the noise are almost unbearable in the casting room of Line 3 at Alcasa. This is one of two big aluminium plants in the south-eastern city of Puerto Ordaz, where most of Venezuela’s basic industries are concentrated.
It is also the test bed for a new experiment in co-management, which President Hugo Chavez says is a key step towards a “socialism of the twenty-first century”.
Alcides Rivero, who works here as a maintenance electrician, says co-management means that for the first time in this company’s 37 years of existence, the workforce has control.
“It’s us, the workers”, he says, “who decide on questions of production and technology, and it’s us who elect who will be our managers.”
Marivit Lopez, from the personnel department, explains that the workers are also drawing up a “participatory budget” for 2006.
“The different departmental works councils are discussing and amending the existing proposal so that we get a budget that really fits the company’s needs,” she says.
Modern Socialism
The works councils are the cornerstone of this co-management experiment at Alcasa.
During a session at Rodding Shed No. 3, one elected representative from each area team work amid reams of statistics, charts sketched on the white board and scale models.
The representatives are discussing possible solutions to their department’s biggest technical problem; how to reorganise maintenance and procurement in order to get a longer working life out of the graphite anodes, the components used to separate the pure aluminium.
According to the man steering this whole process, one of the aims of co-management is to break down the barriers between intellectual and physical labour; between those who do the thinking and those who do the work.
Carlos Lanz, recently appointed president of Alcasa, and himself a former guerrilla leader, says the results are already visible.
“Democratic planning is such a powerful lever that even with rather outdated technology we have managed to increase production by 11%,” he says.
Mr Lanz points out that this is not the co-management of European social democracy, which in his view has been limited to giving the workers shares and a seat on the board.
“This is about workers controlling the factory and that is why it is a step towards socialism of the twenty-first century.”
Worker Involvement
So far, Venezuela’s co-management plans have been confined to state owned companies like Alcasa, and to two small private companies that had already gone bankrupt.
Early this year the government took over the Venepal paper factory and the Valvulas valve factory.
They were relaunched under co-management, with 51% of the shares owned by the state and the workers organised in a co-operative holding the remaining 49%.
But last Mayday President Hugo Chavez said he wanted to go further.
He suggested that many more private companies might qualify for government assistance if they too involved their workers in the management.
He announced that a draft bill was being presented to Congress for discussion.
State Intervention
The president’s announcement has made some business leaders confused and concerned.
Tony Herrera, of the Venezuelan-American Chamber of Commerce, says it is still very difficult to grasp exactly what is meant by the government’s co-management proposal.
He fears it may just mean more state control over the economy.
“The problem in Venezuela has been that the road to hell has been paved with good intentions in the past,” he says.
“The state has made many attempts to intervene in the economy over many years, and the result is there for all to see.”
The head of Venezuela’s main business association, Fedecameras, agrees.
Albis Munoz says she doesn’t want to see co-management imposed on Venezuelan companies by law, but she says she wouldn’t have a problem with the kind of co-management developed by the Christian Democrats in Germany - in other words, a freely negotiated, strategic alliance between employees, employers and consumers.
That, however, does not seem to be what the people at Alcasa have in mind.
Marivit Lopez speaks enthusiastically of pressing ahead with what she calls “revolutionary co-management”; part of “the transition to a new system of production”.
With government support, she and some of the others from the aluminium factory are running courses for employees at the other state industries in the region - on “how to organise your own system of co-management”.
View the original story: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4155936.stm
© BBC MMVI
2 Responses to “Chavez Calls for Democracy at Work”
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October 12th, 2006 at 3:11 pm
This is a fascinating development, of potentially world-historic proportions—if implemented properly. Theoreticians of Economic Democracy have long held that enterprises should be run democratically. If citizens are deemed capable of electing those who govern them politically, why should they not elect those who govern them economically? Why are we allowed to elect our mayors and congressmen and senators and even the president–but not our bosses? To the rejoinder that workers will vote their short-term interests to the detriment of the long-term good of their enterprise or that they simply lack the expertise to make the kinds of decisions that must be made in a sophisticated modern industry, these theoreticians have replied that there are lots of successful worker-run enterprises around the world. They often point to the enormously successful Mondragon Cooperative Corporation, headquartered in the Basque region of Spain, which is now the seventh largest corporation in Spain in terms of sales, third largest in terms of employment, or to the networks of sophisticated producer cooperatives that have thrived in the province of Emiglia-Romagna, Italy.
But now were in for a real test–a central government attempting to make workplace democracy a central feature of a new economic model, a new form of socialism. Chavez seems to be doing exactly what the theory of Economic Democracy would suggest: introduce workplace democracy cautiously, beginning in the state sector; proceed slowly, learning as you go as to what problems to expect and how to deal with them; encourage existing capitalist firms to move in the direction of greater democratization. (Of course the capitalist firms can’t go all the way–or they would cease to be capitalist firms.)
Lessons will be learned as this experiment unfolds. I for one am holding my breath
October 13th, 2006 at 1:20 pm
I have to agree with David Schweickart. Despite my deep reservations about Chavez (he often seems more populist than left and appears to be buildin a cult of personality around himself rather than ideas or a movement) his articulation of what 21st century socialism would look like is wonderful, and Venezuela is now taking significant steps toward moving in the direction of Economic Democracy. A related development, equally as impressive, is the move toward participatory budgeting at the community level.
There’s another role for government in the transition to Economic Democracy–particularly when looking at advanced industrial economies: dealing with the question of ownership succession.
In the United States (and the same is true elswhere, often more so than in the United States) more than 90% of businesses are small and medium and privately owned, often family-owned.
These firms — not the handful of multinational firms — are the real drivers of employment, wealth creation and innovation in an economy. Most people are NOT employed by a fortune 500 firm, in fact the fortune 500 firms in the US are net liquidators of jobs.
In the United States there are about 296,000 small and medium manufacturers. These companies employ 8 million people and account for 40 percent of total US production: this is the backbone of the economy.
Multinationals can easily compete on cost by offshoring production. These small and medium firms cannot. In most cases the owner would have to offshore herself along with the workforce. And very few small business owners are willing to move to China or Mexico.
So that means that these small firms, to survive, have to become incredibly nimble, flexible and innovative to compete globally. And they are doing this.
Yet only 15% of these small and medium firms will successfully transition ownership from the first to the second generation. And the birth rate of new firms in manufacturing is not keeping up with the death rate.
This is a major problem for our society as a whole: we loose these firms, and we loose the engine of job creation, and the main drivers of innovation in new technology, processes and products.
A logical solution to this problem is employee ownership.
The sons and daughters of entrepreneurs don’t necessarily have a vested interest in the business (they often prefer to go work on Wall St. rather than go back to dad’s factory). And when a small firm is sold to an outside investor or competitor, it’s usually for a fraction of its value and even then the company’s assets are liquidated and its poached for the customer list.
The employees, on the other hand, have a vested interest in the long-term success of the firm. In fact, the research shows that ESOPs that combine ownership with participation outperform comparable private firms.
Despite the many short-comings in the American ESOP legislation, it has provided a powerful incentive to owners to sell to their employees (and not another company or investor) and a powerful tool for labor and communities to use in seeking control of the productive assets of our society.