November 2011, Week 2


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Fri, 11 Nov 2011 19:29:06 -0500
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Occupy Wall Street: An Opening to Worker-Occupation of
Factories and Enterprises in the U.S. 

by Peter Ranis


The Social Economy Context

The Occupy Wall Street (OWS) movement has clearly
expressed the hopes and great potentialities of the
working class both in the U.S. and globally.  The 99
percent are speaking up and saying that they will no
longer do the bidding of the 1 percent.  In essence it
is the revolt of the masses, the underclass in their
many guises.  People in NYC's Zuccotti Park are doing
incredible things autonomously and with purpose.  They
are developing an island of political and economic
autonomy that draws attention to what people can do on
their own and for themselves.  From many walks of life
they are standing up and speaking with measured purpose
and being heard.  This is a valuable lesson for the
American working class and their right to stand up and
defend their jobs in factories and enterprises from
being "disappeared."

The crash and recession of 2008 only heightened the
concerns that we have about the capacity and
willingness of liberal capital to provide for justice
and equity for the overwhelming majority of Americans. 
The lack of societal concern by the large hierarchical
capitalist firms and financial institutions has never
been so clearly manifested.  OWS represents a momentous
breakthrough that demonstrates that we can indeed come
together at this crucial time as workers, social
movements, intellectuals, and labor unions, and use
this critical opening to move forward to confront
capital-labor relations throughout America.

The U.N. has declared 2012 the International Year of
Cooperatives.  This only adds to the imperative for
exploring the many ways that worker-managed factories
and enterprises can be seen as an alternative to
traditional capitalist firms and companies. 
Cooperatives as worker-managed enterprises, for a
number of institutional and societal reasons, represent
alternative productive vehicles attempting to override
the impact of deindustrialization, globalization, and
the neoliberal ideological offensive.  The social
economy and solidarity relationships, represented by
worker-managed enterprises, need to be examined as
focal points for working-class and middle-class
capacities to sustain the possibilities of a productive
worker-centered culture.  This has become ever more
urgent given the shrinkage of labor union density,
especially the decline of private-sector organized
workers.  Worker-managed factories and enterprises are
called for particularly at this moment with the
declining industrial base of the American working
class.  Perhaps upward of 25% of the American
industrial heartland lies idle with the potential for
unemployed workers to create cooperatives and other
self-managed enterprises to fill that vacuum.  But they
need not be limited to laborers.  The large bulk of the
American working class find themselves in the services,
in commerce, and among contingent workers,
subcontracted workers, and immigrant workers.  All of
these groups deserve the benefits and entitlements that
capital-labor reorganization would provide them.

Workers need to embrace the knowledge that
worker-managed workplaces are a realistic and grounded
alternative.  Certainly in countries such as Argentina,
Spain, Venezuela, Brazil, and Canada, worker
self-managed companies have asserted themselves as new
forms of worker solidarity, autonomy, and participatory
initiatives within the capitalist economy.  The
experiences of the 21st century's first decade
demonstrate that class consciousness and political
awakening are enhanced, not diminished, by workers
banding together into economic units that depend upon
working-class and middle-class economic initiatives
providing new forms of penetrating and mediating the
challenges of the capitalist marketplace.

The Worker-Management Alternative

There is much reason to be positive about the
feasibility, continuity, and longevity of the major
innovations among cooperatives and recuperated
enterprises.  These constitute participatory worker
involvement in managing enterprises, worker direct
democracy through periodic assemblies, job rotations
and reskilling, and educational and cultural outreach
to community groups, social movements, and labor

Research, particularly in Argentina, points to a
heightened involvement among the cooperative and
recuperated enterprise workers in public policy and its
implications for the working class writ large.2  I have
observed that workers in Argentine cooperatives have a
far better sense than other workers, even those
unionized, in relating their working lives with other
roles they play as community citizens and political
activists, thus broadening their societal place.

There is clear evidence from the Spanish and Argentine
cases that workers can organize and run the means of
production while retaining equity and justice for the
employees involved.  Income distribution is not skewed
to the top, management salaries and short-term profit
taking by owners as well as managers are avoided, and
capital is thus constantly reinvested in the firm
itself.  Cooperatives also serve as schools for
participatory democracy as workers self-manage their
work life, the largest investment of time in their
daily lives.3

The world's leading industrial cooperative, the Spanish
Mondragon multinational cooperative, serves as an
emblematic case of what can be achieved.  Judith D.
Schwartz writes:

One hallmark of the Mondragon model is its use of
capital.  Rather than flowing into the pockets of
executives and outside investors, a company's profits
are distributed in a precise, democratic way; set aside
as seed money for new cooperatives; distributed to
regional nonprofits; or pooled into shared institutions
like the university and research center.  In other
words each individual cooperative gains long-term
benefits from the financial assets of the whole.4

Cooperatives are also better organized and sustained by
values foreign to typical venture capital firms and
thus are much more likely to withstand economic crisis
such as the U.S. economy experienced in 2008.  Robb,
Smith, and Webb argue persuasively:

As the world learned in September 2008, as the value of
investor owned publicly traded shares dropped by
20-40%, the unlimited return may be negative as a
result of the unregulated pursuit of narrow self
interest.  Cooperative financial institutions did not
create any of the "toxic paper" nor did the value of
cooperative shares decline.  The absence of
cooperatives from this massive malfeasance and turmoil
are additional benefits of deploying capital as
cooperative capital.  Those benefits accrue to both
individuals using cooperatives to meet their needs and
to the public generally.  They are public policy

They go on to say:

The founders of the Mondragon cooperative wanted to
create workplaces that were participatory and to stop
the drain of people from the region.  Since launching
its first cooperative in 1956 the Mondragon group has
grown to a workforce of 92,700 in 2008.  The Caja
[bank] has successfully participated in the growth of
the Mondragon cooperative while achieving a solid
success as a financial institution.  In 1988 it
administered 1.3 billion Euros and by 2008 that had
grown to 13.9 billion Euros.5

The proliferation of OWS from New York City to Oakland
and beyond testifies to the yearning for more
democratic and participatory means of existence. 
Moreover, public opinion has cast a favorable eye on
these movements as they are touching deep-seated needs
among all sectors of society.6  The OWS represents a
progressive challenge to finance and corporate capital
by focusing on their multiple defects rather embracing
a reflexive anti-capitalist jargon.  By the same token,
where cooperatives have flourished, they represent a
radical challenge to public policy by not beginning
with a generalized, diffuse left-critique of capitalism
without a clear and defined entry point.  Recuperated
enterprises by workers combine a left outlook that has
a majoritarian basis because its demands and needs are
so reasonable yet comprehensive.  They typify the real
frustrations of the unemployed and the potentially
unemployed and should receive the sympathy and support
of most citizenry in any capitalist country.  The
Wisconsin mobilizations, the Arab Spring, and the
Spanish general strikes, as well as the proliferation
of OWS, constitute a left-populist insurgency that
bodes well for a push against corporate capital and its

The Deindustrialization Crisis in the U.S.

The U.S. crisis of unemployment and underemployment,
16% by 2011,7 is probably more severe than at any time,
including the Great Depression, because of the special
and novel structural nature of unemployment caused by a
global-oriented capitalist sector, the spread of
technology throughout the world, and the increasing
competition from skilled, low-wage workers abroad. 
Since the onset of the recession of 2008, 15% of the
U.S. industrial sector jobs have been lost.  Growing
free trade deficits arising from the NAFTA alone have
caused the loss of almost 700,000 U.S. jobs, most of
them in manufacturing.8

What is required is a fundamental reorientation of the
responsibility of public policy-making in defending the
American working class.  This has been essentially an
absent ingredient.  James Galbraith has written of the
American predator state in which the wealthy class has
taken over the government and legitimized certain
approaches to the U.S. economy, among them monetarism,
supply-side tax cuts, balanced budgets, and free trade.
 The underlying philosophy of the predator state is the
inviolability of private property as exempt from heavy
taxation.9  Robert Skidelsky has contended that
Keynesian economic thought revolving around fiscal
economic interventions has been categorically pushed
aside since the Reagan presidency to the detriment of
the U.S. industrial policy.  He argues that the
Bretton-Woods Keynesian era of 1951-1973 was superior
to the Washington Consensus periods in terms of GDP
growth rates, absence of recessions, lower
unemployment, and more income equality.  In
contradiction to neoclassical economists in the U.S.,
he demonstrates that, despite the better growth rates,
lower unemployment and greater income equality of the
former, there was no difference in inflation rates
between these two periods.10

The contemporary role of government has been ambivalent
in restoring public and private employment as has its
reaction to outsourcing and offshoring.  A Democratic
administration, confronting a demonically cynical,
neo-conservative House of Representatives, has not
embraced fundamental initiatives that would reconstruct
a declining industrial economy.  My view is that we
need a serious change in the direction of the state. 
As has been shown by OWS and its Wisconsin predecessor,
it has become increasingly evident that concerted
activism can highlight the challenge by heralding the
potential power of the solidarity economy.  We need to
examine the areas in which progressive community,
political, and legal activists, with the cooperation of
public agencies and city councils, can come together as
advocates for working-class and middle-class

In the U.S. context, the deep economic recession
beginning in 2008 with double-digit unemployment both
nationally and in various hitherto industrial states
offers a rare combination of structural and ideological
openings for reintroducing New Deal-style executive and
legislative interventions.  It is significant that the
rise of worker cooperatives in Argentina followed on
the heels of the financial default and economic crisis
of 2001 fueled by rampant deindustrialization, high
unemployment, and a dramatic growth of poverty and

The Argentine Example

In Argentina, workers have asserted their right to take
over factories on the basis of national and provincial
constitutional law that allows for the takeover of
private enterprises with reasonable compensation in the
interest of the "common good" and "public use."  These
actions occur when there is clear evidence that the
effects of economic recession are fraudulently used by
owners to decapitalize and disinvest in their firms. 
Some owners have reaped millions of dollars in
government credits for non-production-related financial
speculation while breaking labor contracts with workers
and depriving them of their earned wages.  Still others
simply walked away from their enterprises by declaring
bankruptcy and then, unburdened by financial duress,
began new ones with unorganized cheaper labor. 
Expropriation by Argentine provincial or municipal
legislatures on a case-by-case basis gives the
cooperative workers protection from the creditors'
demands upon the previous owners who incurred any
possible debts.  Without expropriation creditors can
demand the auctioning off of the buildings and their
contents, throwing the workers into the streets.  60%
of the worker cooperatives have been given legal
protection by provincial expropriations.11  In some
cases bankruptcy court rulings allow the workers to
commence production as compensation for lost wages and
benefits or allow for rental or lease agreements --
always under the legal usage of the right to set up
worker cooperatives.  In a few exceptional cases,
workers themselves purchase the bankrupt enterprise
over time.12

It should not be lost on the OWS movement that the
watchword for Argentine workers recuperating their
factories was "Occupy, Resist, and Produce!"  In many
cases workers occupied the factories that were about to
be abandoned by their owners and sought support from
neighbors, community networks, social movements,
public-spirited lawyers, and progressive left political
parties with a history of militancy.  Once established,
workers banding together can almost always make a go of
the recuperated factory or enterprise by a significant
shift in working-class cultural values and
orientations.  Workers working collectively, rather
than competing individually to please managers and
bosses, a climate of fostering a team mentality becomes
possible.  In a recuperated worker cooperative,
knowledge of the enterprise's resources necessary for
production, deeper knowledge of the product itself, and
an understanding of the challenges to market the
product become more widely dispersed among the
workforce.  The workers are involved in the hiring of
new cooperative members, participate in the discipline
of those working, and have the increasing potential to
participate in questions of reinvestment or
redistribution of the profits.  Information is no
longer held by capitalist owners and managers as a
wedge of power applied against the workers but
generously shared with those workers with a vocation
and appetite for enhanced understanding of the
production process.

The rate of continuity of Argentine cooperatives as of
2008 was 93% with only a 7% mortality rate.13  They
have managed to carve out areas of economic survival
that attests to worker initiative, collective
engagement, and reconfiguring the workplace.  As the
workers proceed in the occupation and recuperation of
their workplaces, they are touching on fundamental
questions concerning the direction of the neoliberal
economy.  As the legal advisor to the 480-member
Zanon/Fasinpat ceramic workers cooperative told me, "If
there were 100 Zanons this would be a different
country.  Zanon is struggling not to be just another
factory but to be the leading edge of social change in
Argentina."14  By their capacity to form alliances with
progressive legal, community, political, and labor
forces available to them, they symbolize an alternative
path to economic development that is predicated on
worker solidarity and democracy in the workplace.  The
collective ownership of the workplace acts as a
cultural catalyst for worker sacrifice, ingenuity, and
creativity.  Workers often originally formed
cooperatives to avoid unemployment and poverty.15 
Nevertheless through struggle and sacrifice they become
socialized to a novel working class culture they are
willing to defend.  I argue that this model can be
duplicated in the United States.

The University of Buenos Aires amassed a comprehensive
study on the current state of Argentine recuperated
enterprises.16  The number of enterprises recuperated
as cooperatives increased from 161 in 2004 to 205 in
2010, and the numbers of workers so employed and
officially documented increased from 7,000 to 9,400.17 
 Once the recuperated enterprises become cooperatives,
legitimized by provincial and municipal expropriation
laws, they demonstrate impressive solidarity among
themselves by way of inter-cooperative associations,
community and neighborhood groups, and a scattering of
political parties and social movements such as the
piqueteros (representing the poor and unemployed who
take direct action to express their grievances).18 
Though the Argentine national state has not been the
initiator of the recuperated enterprise movement, it
has not obstructed its development.  Though the support
has not been overwhelming, ministries in the federal
government as well as those of various provinces and
municipalities have intervened with subsidies, worker
training, and legal counseling as well as social
welfare programs.  There has also been support from the
public at large by way of donations, client help, food
contributions, and political party pro bono advice.19

The overwhelming majority of the newly formed worker
cooperatives meet either weekly or monthly to appraise
administrative and production policies.  In addition
the cooperatives revise and reorganize working
conditions by job rotations and other strategies to
humanize daily work habits.  More than half of the
cooperatives allow only 33% difference between the
highest and lowest paid member and over half keep the
difference to just 25% or less.  The differentiations
are understandably based on the functions performed by
the worker, the hours worked, the specialized category
stipulated by prior union contracts, and worker

Many cooperatives open up their facilities to the
community, creating specialized kindergartens,
elementary and secondary schools, as well as student
internship and training programs and even documentation
centers and worker-oriented libraries.21 
Significantly, Argentine recuperated enterprises and
cooperatives are important participants in social
movements and are particularly active in cultural and
educational outreach to their surrounding communities
and neighborhoods.  For example the Zanon/Fasinpat
cooperative ceramic factory of Neuquen Province has
created a community health clinic which it subsidizes;
in the city of Buenos Aires, Maderera Cordoba has
created a cooperative woodworking secondary school and
IMPA (Industria Metalurgica y Plastica de Argentina) an
adult education curriculum; the Chilavert printing
cooperative opens its space to publishing workshops,
literary readings, and art exhibits; and the Hotel
Bauen cooperative facilitates space for community
groups to present artistic, cultural, and political

Eminent Domain and the Solidarity Economy

In the U.S. we have the same mechanism as exists in
Argentina to achieve worker-owned and worker-managed
factories and enterprises: eminent domain.  Eminent
domain is constitutionally sanctioned and has been
applied for community, infrastructure, and development
purposes.  Plant closings have severe negative economic
repercussions and societal externalities on workers and
communities.  These events then legitimize the right to
regulate them by way of eminent domain on behalf of the
public interest.

The collective social rights of workers who have built
up the value of the firm through years of hard work and
applying their know-how and skills have to be legally
asserted.  The companies cannot be free of societal
obligations.  By outsourcing jobs they have broken a
contract for which there must be reparations and
consequences.  The use of eminent domain can spark a
public debate about the obligations of corporations and
confront the passive acceptance of the steady decline
of jobs with livable wages.

Although there are thousands of credit, consumer,
housing, utility, insurance, and agricultural
cooperatives in the U.S. servicing millions of
Americans,23 there are only about 300 small worker
cooperatives in which workers are truly involved in the
day-to-day organization and participation in production
and services.  The use of eminent domain can provide
the impetus to put worker-owned and worker-managed
enterprises into the critical discussion of recovering
jobs in America.  In a landmark decision for the
struggling American working class, the U.S. Supreme
Court in Kelo v. New London (2005) ruled in favor of
the city of New London by reason of eminent domain to
take over private property for reasons of "public
purpose."  The court ruled on behalf of New London's
economic development plan based on the "takings clause"
of the U.S. Constitution's Fifth Amendment which
states, ". . . nor shall private property be taken for
public use, without just compensation."  Justice John
Paul Stevens wrote for the majority that expropriation
of private holdings as part of urban development is
justified for the public purpose of increasing jobs,
tax revenues, and reversing urban decay.  In a previous
relevant case, Berman v. Parker (1954), a unanimous
court observed: "The concept of public welfare is broad
and inclusive."  It becomes clear in Berman that the
meaning of public use had been expanded to include
"public interest" and "public welfare" by way of
eliminating blight in a poverty-stricken neighborhood
in Washington, D.C.

In the U.S. eminent domain has been used for many
decades for building highways, airports, hospitals,
municipal offices, schools, libraries, public parks,
and sport complexes in the name of urban development
and the public benefit.  It is more appropriate to
apply this same rationale to protect against the loss
of industrial and service jobs on behalf of labor and
the American working class.24  What greater public
purpose could there be than preserving work for the
public!  We need to use eminent domain for development
purposes much as we use taxation and regulatory and
zoning legislation.

Once expropriated, the factories and enterprises would
then be turned over to the workers themselves who have
the technical skills and know-how to run these
industries.  In Argentina, for example, workers have
shown they can maintain and manage enterprises and
industries, be they metal plants, tire factories, food
processors, chemical plants, meatpacking plants,
textile factories, auto parts installations, electronic
component suppliers, ceramic factories, lumber
factories, glass factories, supermarkets, printers and
publishers, health clinics, hospitals, schools, and
hotels as successful and viable establishments.

What distinguishes worker-run firms from traditional
capitalist firms is that, in the former, workers
achieve a greater knowledge of work procedures and the
rationale for the entire production process.  In
addition workers enhance their knowledge of the
enterprise budget through open assemblies that make the
decisions concerning capital reinvestment versus profit

The formation of worker cooperatives via eminent domain
provides a platform where worker productivity and wages
move together, where shareholder dependency doesn't
exist, where equity firms have no role.  Cooperatives,
for example, do not rely on equity capital which
requires high rates of profit often resulting from
nonproductive sources of revenue.  Within the
newly-formed cooperative structure, the previously very
visible disjunction between full-time, part-time, and
temporary workers is abolished.  There is a basic
modicum of worker security and worker alienation is
substantially reduced.  Without owners and privileged
managers and their super-sized salaries, workers share
the enhanced profits equitably.  Where speedups and pay
cuts are required everyone shares in the downturn;
hours may be cut, salaries reduced, until profits are
reestablished, but the decisions are made by a majority
in worker assemblies and the workforce remains in

David Gutknecht has highlighted a salient difference
between cooperatives and traditional capitalist firms:
"Cooperatives keep capital in the community where it
was generated, while stock companies export capital
elsewhere.  Since they give surplus revenue back to
their members, cooperatives keep wealth in their
communities.  Stock companies do the reverse.  By
distributing profits to shareholders, they take capital
out of the community."25

Workers' Self-Empowerment in the U.S.

Legally, eminent domain can legitimize the worker-owned
and worker-managed factories as they strive to maintain
their jobs and salvage the enterprises for themselves
and their communities, while organizing for the larger
goal of defending industrial and enterprise development
and viable employment within the U.S.  We have seen
examples of worker comprehension of their rights as the
creators of capital and their rights to keep their
industry and jobs when equity firms have sought to
vacate the premises and break contracts with both
workers and communities.  We have the partial examples
of the Republic Windows and Doors workers in Chicago in
2008-2009, the Stella D'Oro bakery workers in the
Bronx, New York in 2008-2009, and the Taunton, MA
Haskon Aerospace workers in 2010-2011 taking the
crucial initial steps of sit-down strikes and factory
occupations to oppose equity firms leaving the workers
and communities behind (in these cases, equity firms
Gillman, Brynwood, and Esterline took out equipment to
cheaper sites in other states or other countries).  The
latter two plants, however, closed in the end, throwing
136 and 100 workers respectively into unemployment, and
in the Chicago case, a new firm has taken ownership
(Serious Materials) which has rehired only 10% of the
former 260 workers.

Factory occupations, sit-ins, petitioning public
authorities to save jobs, nevertheless, are the
necessary backdrops to advocacy for the application of
eminent domain procedures.  The formation of worker
cooperatives by the U.S. working and middle classes has
a major potential if supported by labor unions and
organizations of central and municipal labor councils
combined with community and legal organizers and
activists.  Desperate times call for desperate
measures, and factory and enterprise occupations need
to be put on the immediate horizon.  Workers must
initiate eminent domain proceedings in every single
case of a runaway ownership, making it de rigueur
activity everywhere in the U.S., so that it becomes a
reflexive, multiplier activity accepted as a legitimate
response to arbitrary and irresponsible behavior by
private owners.

The American public has shown in surveys that it
supports tax increases to bridge budget deficits rather
than decreasing pay and benefits to the working class
or reducing health care, educational expenditure, or
public transportation.26  There is little question that
public opinion would support workers defending their
jobs and homes against equity firms whose commitment is
not to any particular community or country but to
itself and its investors.  Chains of worker
cooperatives could become regional interlacing
industrial zones committed to each other's existence
and survival with an outreach to ever wider communities
in terms educational, cultural, and job opportunities.

Civil society's need must take precedent over private
property sanctity.  The writings of William Blackstone
in 18th century England gave credence to state
obligations over the John Locke's (17th century) view
of the preeminence of the absolute of private property.
 Judicial decisions, stimulated by opinions by Justice
Louis Brandeis, have broadened the eventual
redefinition of eminent domain from public use to
public purpose, public needs, and public benefit.  As
Brandeis wrote "the rights of properties and
individuals have to be remolded from time to time at
the behest of the needs of society."  Such
interpretations and applications of eminent domain were
very common in the progressive era, the New Deal Years,
and even the Eisenhower years.  We have the Supreme
Court decisions in Berman (1954), Midkiff (1984), and
Kelo (2005), plus the various state cases such as the
Poletown v. City of Detroit case in Michigan (1981) and
various private transportation and utility eminent
domain proceedings in Minneapolis (1974), New York City
(1976), Wisconsin (1978), and Connecticut (1982) -- all
strengthening the usage of the takings clause of the
constitution for a greater public purpose be it for
ending community blight, inequitable usage of land,
economic development, and providing for a public need. 
It is only since the advent of Reaganomics that we have
had John Locke's ideas imposed again via the Institute
of Justice (1991), a right-wing think tank, and the
Castle Coalition (2002), a right-wing advocacy group
who have fastened on "eminent domain abuse" as a term
of opprobrium which muddies the water of its positive
usages and outcomes.

It is more and more obvious we cannot rely solely on
the labor movement for grand initiatives, given that
only 12% of our workforce is now unionized (8% of
private-sector workers).  It has to be the laborers,
employees and middle-class workers representing 85% of
Americans upon whom we base these aspirations.

As Occupy Wall Street has made clear, at present the
American working class is subject to the overwhelming
ideology of property rights, banking and business
subsidies, flawed and give-back collective bargaining
agreements, and at-will firings that inhibit their
capacity for effectiveness as well as destroy their
sustenance.  Further we are under the aegis of
neoclassical economists (Bernanke, Summers, et al.) who
focus on the health of an economy as predicated on GNP
growth whether it provides for jobs or not.

Beyond Factory Occupations

In December 2008, the United Electrical (UE) workers
occupied the Chicago Republic Windows and Doors factory
in protest against the company throwing its workers
into the street without the two-month notice required
by the 1988 WARN labor law.  In Great Britain workers
occupied three Visteon plants which supply parts for
Ford Motor Company.  In Ireland the Waterford Crystal
plant was worker-occupied after it was bought out by a
U.S. equity firm KPS. And in France, workers took
bosses and managers hostages (so-called "bossnappings")
for a day or over night in the French Caterpillar
plant, a SM plant, a SONY plant, and a Michelin plant. 
All these protests resulted in either reducing the
numbers of workers scheduled to be laid off, saved all
jobs for a certain period, gained dramatically enhanced
severance pay or promises of a new entity that would
transfer and restore their jobs.27

The commonality in all these worker actions was the
occupation of the factory or offices before attempting
to negotiate with the owners and mangers.  That gave
the workers the legal, political, and ethical
bargaining power to confront capital on its own playing
field, namely by contending that the company is
breaking a contract and a commitment to a community. 
And because of the dramatic nature of the workers'
militancy, in all these cases of worker occupations of
plants and managers' offices, the U.S., British, and
French public officialdom got involved in the support
of the workers: in Illinois state legislators, Chicago
ward councilors, Senator Richard Durbin, Vice-President
Joe Biden, and President Barack Obama supported the
sit-down action; in Ireland, various Northern Ireland
governmental ministers gave their support to the
Visteon workers; and French President Nicolas Sarkozy
made commitments that there would be no immediate
layoffs.  This influenced and solidified legal opinion,
public support, and gave the workers the additional
moral authority to push their demands.

These are key first steps, but it is critical to take
the second step and form a worker-managed enterprise
and call for city or state legal action using eminent
domain.  Leaving the factory before securing political
support and legal initiatives, as in the case of the
courageous and defiant Stella D'Oro bakery workers on
strike in the Bronx, New York in 2008-09, is not the
best alternative.  The 136 workers had shown themselves
to be a coherent and solid group of workers, striking
for 11 months to resist draconian job givebacks.  Not a
single worker crossed the picket line, while they
engaged an important community, political, and labor
support group and used its union Local 50 of the Bakery
Confectionery, Tobacco Workers, and Grain Millers
(BCTGM) to attain a positive National Labor Relations
Board (NLRB) ruling that mandated back pay and
benefits.  Almost immediately after the NLRB ruling in
July 2009, Brynwood Partners, the equity firm that now
owned Stella D'Oro, announced plans to close the
factory and eventually sold it to the manufacturer,
Lance, Inc. which moved the company to Ohio in the fall
of 2009.

As important as the Stella D'Oro solidarity outreach
was, it was not enough to save the jobs of the 136
workers.  Without a decisive plant occupation,
community groups and labor unions alone are not enough
to carry the day.  Concerted worker activism is the
required first step followed by the use of eminent
domain proceedings instituted by the municipalities
involved.  In New York City, however, neither the city
council nor the mayor provided the necessary critical
support.  Had OWS been in place at that time, there is
no doubt that this movement could have provided the
necessary mobilization on behalf of these Bronx

The UE Chicago workers took that first principled and
reasonable step of peacefully occupying and maintaining
the Republic plant ready for production.  This stood as
a powerful message and opportunity for the American
working class to make that cultural leap.  In February
2009 a bankruptcy court judge ruled that a California
building materials company (Serious Materials) could
purchase the plant's assets and employ the 260 workers
involved in the occupation of the factory.  However,
this alternative was fraught with the uncertainty of
market calculations by the private buyer.  By mid 2010,
Serious Materials had rehired only 30 workers.  It
would have again been appropriate if a progressive
community and political coalition in Chicago had called
for the intervention from the city council to implement
eminent domain proceedings.28

In Taunton, MA, workers, again of the United Electrical
Workers (UE), were in a serious labor conflict with
Esterline Technologies, which planned to move 100 jobs
to non-union plants in California and Mexico.  The
Taunton plant, Haskon, Inc, made door seals and silicon
gaskets for aircraft.  Despite being a profitable
enterprise with profits of $120 million in 2010,
Esterline announced it would auction off the equipment
in December 2010 to pay for the workers' severance
package.  The UE was able to get the support of
Congressman Barney Frank, state legislators, and the
City Council to request a delay the auctioning of the
Haskon equipment until mid-February 2011.  For the
first time in recent modern labor history, the union
then attempted to initiate eminent domain proceedings,
with the support of the Taunton City Council and the
Mayor, to seize the Esterline machinery and buy the
property and factory on behalf of the workers. 
According to the Massachusetts Constitution law of home
rule, eminent domain can be applied to taking of
property, both personal and intangible (machinery and

This purposeful and creative methodology sadly failed
for several reasons.  Firstly, the Taunton City Council
in late December 2010 passed a home rule petition sent
to the Massachusetts legislature to apply the use of
eminent domain to purchase the company machinery and
equipment.  A home rule petition became a necessary
procedure because Esterline did not own the building,
only the machinery and equipment.  Secondly, the
Esterline Company demanded $300,000 to pay the cost of
the equipment and machinery from the Haskon workers to
avoid an auction that would probably be worth a third
of that.  Thirdly, the auction occurred on January
19th, two days before the Massachusetts legislature
reconvened to even consider an eminent domain
intervention and the severance package was approved by
the aerospace workers at Haskon.

Still, this labor confrontation in Taunton, MA showed
the possibility of applying eminent domain to runaway
plants.  The UE and the workers were able to get the
support of local unions, Jobs with Justice chapters,
Massachusetts Nurses Association, Jewish Labor
Committee, Greater Southeastern Massachusetts Labor
Council, and community residents of Taunton.  They were
able to use this groundswell to get the City Council
and Mayor to vote in favor of eminent domain and to get
voices of support from state legislators as well as
their congressional representative, Barney Frank.  As
in the Stella D'Oro case in Bronx, New York, an
important factor was the certainty of a severance
package as opposed to the challenges of the struggle,
both political and financial, to see eminent domain
proceedings to their conclusion.  This requires a good
deal of courage on the part of the workers involved as
well as the willingness to depart from the norms of
previous plant closing scenarios.  Unless eminent
domain becomes a manageable choice -- a default
alternative -- severance payouts will continue to
poorly compensate workers while closing their
industries and commerce throughout America.

The Occupy Wall Street Context

Cooperatives and recuperated enterprises are in the
last analysis defensive strategies, but they allow the
workers to act "as a class in itself and for itself" as
Marx advocated.  These structures combine human values
of self-interest and survival with real democratic
participatory life.  Theoretical liberal democratic
representative government has proven over time to be
inadequate to the needs of workers.  As the Occupy Wall
Street movement shows, people are yearning for actual
on-the-ground democratic participatory life, not just
wishing to defend economic interests.  In taking over
the factories and enterprises, workers can concretize
the OWS movement, becoming protagonists who represent
themselves and, in so doing, represent the overwhelming
majority of people in any given community.  When
workers occupy a factory or enterprise, it is really
about what they attempt to keep, not what they attempt
to take.  By dint of their work they have produced a
product, raised capital and invested it, and supplied
the surrounding community with their consumption, their
taxes, and their everyday involvement in the life of
their town or city.  It is crucial to expand the narrow
definition of private property.  Whose property is it
anyway?  The erstwhile owners and managers who
accumulated the original capital and initiated the
investment proposal, or the workers who have made them
usable and useful and magnified their value through
years and often decades of commitment and hard work?

Workers cannot be separated from the capital they have
produced.  A necessary collective contract has
developed over time that puts the workers in the
forefront of who is responsible in the final analysis. 
This relationship or, really, social contract has
superseded the simplistic notion of private property as
belonging to the owner.

The implementation of eminent domain on behalf of the
working class provides a sense of the workers as not
only the legitimate owners of the enterprise but views
workers as independently demanding equity and basic
social justice.  Deindustrialization in Argentina since
the military regimes of 1976-83, followed by liberal
and neo-liberal civil administrations in the 1980s and
1990s, led to the economic crisis of 2001.  After the
financial default and the explosion of unemployment and
poverty in 2001-2002, cooperatives became a clear and
necessary working-class choice in Argentina and the
government helped workers recuperate enterprises, as
discussed above.  These conditions approximate those in
the U.S. since the deep recession that began in 2008
and continues today to impact the U.S. working class
that is undergoing a dramatic deterioration.29

We need to expand what is politically the right of the
working class to occupy factories and offices when they
are threatened with unwarranted closure based solely on
the desire for more rapid accumulation of profit. 
There are examples, particularly in Argentina, that
demonstrate that these methods are both legitimate and
effective.  Perhaps more important, however, is the
spirit of rebellion shown us by Egyptian workers and
students.  We have seen that rebellion is correlated
with certain demographic and economic characteristics
shared by Egypt and the United States.  Where
unemployment is high, income inequality is large, and
social media penetration is significant, the potential
for rebellion is also high.  This Middle Eastern
profile fits the U.S. far more closely than our Western
European counterparts.  The OWS movement has
highlighted this American reality as never before.

Workers must respond to employer decisions to close the
plant, remove the machinery, and break the social
contract.  Worker occupations are the necessary and
required response to them, just as OWS is to the
financialization and corporatization of the American
economy.  They can be legally defended by way of
eminent domain.  Support from municipal councils and
state legislatures are important ingredients, but
worker mobilization is the indispensable first step. 
The economic crisis calls for such measures.  Alliances
must be established between public entities and
authorities and the 99 percent (!) of the Americans who
constitute the middle and working classes.  A
coalitional offensive needs to be mounted against the
self-serving U.S. employer class that no longer upholds
equity and fairness to its workers and employees.

Worker-managed factories and enterprises represent an
attempt to bypass and even subvert the traditional
capitalist firm as they experiment with workplace
organization that avoids both the state socialist model
of top-down controls and the capitalist hierarchical
firms.  They plant the seed in market economies that
points to a third way of organizing work.

Eminent domain, however, should not be considered a
revolutionary departure from traditional public policy
that includes the powers to tax and spend, to regulate
place of work environmentally, to zone for economic
purposes, to apply rent control, and to protect workers
and communities from health and safety hazards.  The
former depends on, and in turn complements, the latter.

With a novel approach to using eminent domain on behalf
of workers for the clear benefit of economic
development, social justice, and worker autonomy, we
can reverse the trend of condemning an increasing
number of communities to unemployment, a shrinking tax
base, poverty with the concomitant rise of Medicaid and
public assistance expenditures, and the continuing
erosion of America's skilled labor force.  How can
communities continue to stand idly by while crucial
employers, who have fed off the public trough and their
loyal workers, often for decades, decide to get up and
leave when the eminent domain procedure is available? 
Eminent domain is the viable mechanism that will place
worker autonomy and worker rights at the center of the
political debate in the defense against the continuing
decline of decent jobs in America.


1  Peter Ranis, "Argentina's Worker-Occupied Factories
and Enterprises," Socialism and Democracy, 19, No. 3
(November 2005): 93-115 and "Factories without Bosses:
Argentina's Experience with Worker-Run Enterprises,"
Labor Studies in Working Class History of the Americas,
3, No. 1 (Spring 2006): 11-23.

2  Peter Ranis, "Argentine Worker Cooperatives in Civil
Society: A Challenge to Capital-Labor Relations,"
Working USA: The Journal of Labor and Society, 13, No.
1 (March 2010): 77-105.

3  Carl Davidson, New Paths to Socialism (Pittsburgh,
PA: Changemaker Publications, 2011): 17-37; David
Schweickart, After Capitalism (Lanham, MD: Rowman &
Littlefield, 2011); Andres Ruggeri, Las Empresas
Recuperadas en la Argentina (Buenos Aires: Programa
Facultad Aberta, Facultad de Filosofia y Letras de La
Universidad de Buenos Aires, 2010); Marcelo Vieta, "The
New Cooperativism," Affinities: A Journal of Radical
Theory, Culture and Action, 4, No. 1 (2010): 1-8.

4  Judith D. Schwartz, "In Cleveland, Worker Co-Ops
Look to a Spanish Model," Time (December 22, 2009).

5  Alan J. Robb, James H. Smith & Tom J. Webb,
"Co-operative Capital: What It Is and Why Our World
Needs It," paper for EURICSE Conference on Financial
Cooperative Approaches to Local Development Through
Sustainable Innovation, Trento, Italy, June 10-11,
2010: 8-9.

6  New York Times, October 26, 2011.

7  New York Times, May 2, 2011.

8  Robert E. Scott, "Heading South: U.S.-Mexico Trade
and Job Displacement after NAFTA," Economic Policy
Institute, May 3, 2011.  Overall it has been estimated
that since 2000, the U.S. has lost six million jobs and
50,000 enterprises have been shuttered.

9  James K. Galbraith, The Predator State: How
Conservatives Abandoned the Free Market and Why
Liberals Should Too(New York: Free Press, 2008).

10  Robert Skidelsky, Keynes: The Return of the Master:
Why, Sixty Years after His Death, John Maynard Keynes
Is the Most Important Economic Thinker for America(New
York: Public Affairs Press, 2009).  Income inequality
in the U.S. has never been more skewed than in the
present period.  The U.S. Congressional Budget Office
has shown that, from 1979 to 2007, average after-tax
income grew 275 percent for the 1 percent of the
population with the highest income.  By contrast, the
poorest fifth of the population's income rose by only
18 percent, while the three-fifths of the population in
the middle-income sectors rose by 40 percent.  The
share of income for the top 1 percent climbed from 8
percent in 1979 to 17 percent in 2007.  Those in the
lowest fifth received 5 percent, down from 7 percent in
1979, and those in the middle three-fifth's share of
income declined by 3 percent since 1979.  See the New
York Times, October 26, 2011.

11  Hector Palomino, et al., La Nueva Dinamica de la
Relaciones Laborales en la Argentina (Buenos Aires:
Jorge Baudino Ediciones, 2010): 36.

12  Ranis (2005): 100-105.

13  Palomino (2010): 29.

14  Ranis (2010): 89.

15  Julian Rebon, Desobedeciendo el Desempleo (Buenos
Aires: Ediciones Picaso/La Rosa Blindada, 2004).

16  Ruggeri (2010).

17  Ibid., 7, 37.

18  Ibid., 18-19.

19  Ibid., 69-70.

20  Ibid., 44-46, 52, 54.

21  Ibid., 77-79.

22  Ranis (2010).

23  For example, there are approximately 7,400
cooperative credit unions servicing 93,000,000 people
in the U.S.  Worldwide, one billion people are
associated with cooperatives.

24  Peter Ranis, "Eminent Domain: Unused Tool for
American Labor," Working USA: The Journal of Labor and
Society, 10, No. 2 (June 2007): 193-208.

25  David Gutknecht, "Thinking Outside the Coop,"
Cooperative Grocer, #136 (May-June, 2008): 5.  Robb,
Smith and Webb argue similarly, "Cooperatives, rather
than being forced to invest their savings in obscure
financial instruments that offend their values and
finance investor capital endeavors in distant places,
will be able to see their savings used to meet needs
closer to home" (16).

26  New York Times, March 1, 2011.

27  Peter Ranis, "Worker-Run U.S. Factories and
Enterprises: The Example of Argentine Cooperatives," In
Emily Kawano, ed. Solidarity Economy: Building
Alternatives for People and Planet (Amherst, MA.,
Center for Popular Economics, 2009), 115-123.

28  Kari Lydersen, Revolt on Goose Island: The Chicago
Factory Takeover and what it Says About the Economic
Crisis (New York: Melville House, 2009) and Ranis,

29  Steven Greenhouse, The Big Squeeze: Tough Times for
the American Worker (New York: Alfred A. Knopf, 2008).
Peter Ranis is professor emeritus in the Ph.D. Program
in Political Science at the Graduate Center, CUNY.  He
is the author of numerous books and articles and is an
activist member of his union-the Professional Staff
Congress of CUNY.  Click here to see his CV.  He can be
reached at [log in to unmask] URL:
mrzine.monthlyreview.org/2011/ranis091111.html MR
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