Workers' Control and Nationalization - Part Four

In Part Four we look at the developing struggle for workers’ control in Venezuela. This struggle indicates that the Venezuelan working class is beginning to actively intervene in the Bolivarian revolution and has led some of the more advanced layers of the movement to the conclusion that the socialist transformation of society is the only way forward for the Latin American revolution.

Workers’ Control and the Venezuelan Revolution

And this brings us to Venezuela. What does all of this mean for the Bolivarian Revolution and the movement for cogestion? What the events in Venezuela show is that the workers can run industry. The old saying is true: the bosses need the workers, but the workers don’t need the bosses. Of course, technicians, experts and specialists are needed, but they must be placed under workers’ control. The experience of the workers at PDVSA clearly demonstrates this. PDVSA is no small company. In fact it is one of the largest in Latin America and involves incredibly high-tech coordination, involving computers, satellites and so on.

This is one advantage that Venezuela has over Russia in 1917. The development and extension of capitalism since the Second World War has led to the strengthening of the proletariat on a world scale. The workers today are much better educated now than in 1917. They work with complex machines, computers, satellites, etc, and require a relatively high degree of education. PDVSA shows that workers can assume management of industry much more easily than in Russia 1917.

Another important thing to bear in mind is that the idea of cogestion is included in the Venezuelan constitution. Although the form of cogestion is not always clear, and although the language used can appear confused to us and the law not very clear, these things are not decisive. Workers’ control is not what the law makes it, but what the workers make it. As Trotsky explained, “At a certain stage the workers dislocate the framework of the law or break it down, or else simply disregard it altogether. Precisely therein consists the transition to a purely revolutionary situation”.

It is clear that by cogestion the working class in Venezuela means workers’ control and workers’ management. If you visit the ALCASA website, an aluminum smelter where the most advanced co-management is taking place, you can see a poster the workers have created with the main slogans, “Workers’ Control” and “All Power to the Working Class”.

The struggle for workers’ control and management finds its beginnings with the bosses’ lockout of 2002-2003. The workers in PDVSA, the state-owned oil company, took over their installations and ran them on their own, overcoming sabotage organised by the managers. The workers of CADAFE, the state electricity company that provides 60% of Venezuela’s electricity, implemented contingency plans to prevent sabotage by reactionary managers from taking place. The workers at these companies effectively prevented the sabotage of the industry. The oil workers at first did not think that they could run the installations, but quickly realized that they could. They realized that management was often on holidays or away and that they had really run the company on their own before.

After the lockout workers’ control disappeared in PDVSA. However, the workers are aware that the company is again being run along capitalist lines. After the lockout the PDVSA workers had a number of discussions on the issue of workers’ control. As a result of these meetings, Pedro Montilla from the La Jornada movement of oil workers drafted a proposal for a decree on co-management in PDVSA. Unfortunately, these proposals were never ratified. As a result, tensions are rising in the oil industry as the workers are demanding the implementation of workers’ control.

These were some of the demands made by the PDVSA workers:

  • that cogestion involve all aspects of extraction, distribution, production and storage, including the control of prices for buying and selling

  • that all books are open to all representatives at all levels elected by the workers

  • that cogestion is exercised by all the workers through their elected representatives in every plant and factory, and that they will not stop working and be given time for management duties

  • everyone is accountable to the assembly of workers, and there must be strict maintenance of order and discipline and protection of goods

  • reports will be made to the workers assembly on a regular basis

  • all representatives will be subject to the right of recall (full proposal in Spanish: http://venezuela.elmilitante.org/index.asp?id=muestra&id_art=93)

On the basis of these proposals the oil workers have also made the following arguments:

  • that sabotage of PDVSA cannot be prevented without workers’ control and without the adoption of the above measures to ensure accountability, discipline, and transparency.

  • President Chavez has threatened to stop selling oil to the United States. If this threat were to be followed through, it would not happen without workers’ control of the oil industry as management would attempt sabotage.

At the same time the workers at CADAFE started a struggle for cogestion. Both the PDVSA and CADAFE workers are aware of the differences between workers’ control and workers’ participation. The CADAFE workers also wrote a series of concrete proposals for workers’ control. The workers are angry because some token measures and steps have been taken, but genuine workers’ control has not been implemented. Of the 5 member coordinating committee, 2 positions have been reserved for trade unionists who were appointed and not recallable. The president of the company does not need to heed the directives or instructions of this board. In this case it is the managers in this state company that are resisting the workers’ demands. Both the managers and the state wanted to restrict the workers’ decision making power to secondary issues (in Valencia for instance they gave the workers full consultation rights over X-Mas decorations in the company buildings!). The workers have fought for every inch of workers’ control, and have now launched a struggle for real cogestion.

The workers in these two industries now face another argument from management who say that there should be no workers’ participation or control in strategic industries. This is a joke. It was the PDVSA workers that recovered production during the bosses’ lockout, it was the aluminum and steel workers in Guayana who fought their way to the gas installations to maintain supplies, and it was the CADAFE workers who maintained the supply of electricity to the country and prevented the sabotage of the industry and the Venezuelan economy as a whole. The argument is that the workers cannot be trusted with strategic and vital industries, a smokescreen behind which lies a generalized assault on the idea of workers’ control. However, if the Venezuelan government wishes to ensure the smooth running of these industries and prevent their sabotage, they should entrust them to the workers, as they have already proven that they will defend and protect these industries against the sabotage of the bosses and managers in defence of the revolution. But there is another important point to make – similar to what Trotsky argued about the Donets Coal Basin. That if PDVSA is left in the hands of a workers’ cooperative, that this cooperative would control the oil of PDVSA and could conceivable hold the rest of the country hostage. The most powerful force in Venezuelan society would be the PDVSA managers, who would control some 70%-80% of Venezuela’s economy. If something similar to what is happening in Venepal were to take place in PDVSA, this would surely be the case. Workers’ control and management must be put in place in PDVSA, but to ensure that the working class as a whole democratically controls the economy, and to ensure workers’ democracy in general, all major companies, including PDVSA, must be incorporated into a centralized, democratic plan for the economy. This would mean that the board of directors for PDVSA be composed of 1/3 of the workers, 1/3 from the trade unions, and 1/3 from the state (or some variation thereof).

A good example of workers’ control is CADELA, a subsidiary of CADAFE in Merida which is run under a form of workers’ cogestion. A few weeks ago there were serious mudslides and floods that cut the electricity supply to the surrounding communities. The experts thought that it would take 2 months to restore the supply. However, the organized communities were in direct contact with the workers and helped to repair the damage. Through working together and planning the work, and after a lot of overtime to benefit the people, the electricity supply was restored in 2 weeks.

After the defeat of the bosses’ lockout the bosses across Venezuela closed and locked-out many factories and enterprises – for political reasons not economic reasons. Some 250,000 to 500,000 jobs were lost. This where you can see that workers’ control does not generally come about over questions of production, but the defence of jobs, communities and so on.

Shortly after these widespread lockouts and factory closures, the workers began to take over the factories and places of work. The most advanced struggle at this time was Venepal. At one point the workers took it over and wanted to run it as coop. The workers were able to demonstrate the superiority of workers’ control. There was a machine at the plant that was made in Germany. The machine had broken down and needed to be repaired. Management refused to fix it because it required that an engineer be flown over from Germany to repair it (so they said). This left the plant running at less than full capacity. After management left and the workers occupied the plant, they simply improvised and repaired the machine and restored the factory to full productivity.

It was our comrades in the CMR who first put forward the demand for workers’ control and nationalization and it was then adopted by the workers. On January 19th this year the company was expropriated and Chavez announced it would be run under workers’ control. Now the workers’ cooperative owns 49% of the plant and the state owns 51%, to guarantee the nationalized character. The workers elected the directors and the ministry sent two representatives to go through the experience of running the factory with the workers.

However, problems have developed. A workers’ assembly decided to disband the union and now hope to buy the state’s shares so that they can become the owners of the plant and keep any profits made from production.

Alexis Ornevo, a member of INVEPAL’s directorate stated earlier this year at the International Gathering in Solidarity with the Venezuelan Revolution, that since the workers no longer had bosses, they no longer needed a union. According to the constitution, through some sort of loophole, the workers’ cooperative can legally increase its 49% share to 95%. Ornevo has openly expressed his intention to do this. Contradictions like this are inevitable. An all-embracing, genuine, workers’ control is needed to prevent groups of workers from going down the path of individual enrichment.

Angel Navas, the CADAFE union president worries that the development at INVEPAL will create a model of cogestion as a capitalist cooperative. He said the following:

“As we saw in yesterday’s presentation of INVEPAL, they are having some problems, they seem to be thinking as managers. According to what we heard yesterday, they want to own all the companies shares. 800 workers will be the owners of a company. And if it becomes profitable, are these workers going to get rich? This is a company that is supposed to belong to the entire country; my company can’t only belong to the workers. If we make profits they belong to the entire population. This is a responsibility that we all have – workers in the oil industry, those who make the most: how do we spread this to the rest of the country? These profits are not for me. It doesn’t make sense that because I work in the oil industry, for example, I can make 90 million bolivars when the minimum wage is 4 million bolivars.”

Compare that to Yugoslavia, where the workers felt that they owned their factory and competed on the market. Again, this was the major problem is Yugoslavia – the inequality of wages. Certain workers were simply lucky that they had a monopoly of access to good jobs, whereas other workers were left out in the cold. The whole point is that the profits of a state-owned, nationalized company should be taken by the state and redistributed and reinvested in society as a whole, in order to develop the economy and rid it of inequality. This is what is meant by the socialization of the economy. If productivity is raised, there is more profit to be distributed to society, which in turn creates more social wealth, ridding society of inequality. In Yugoslavia, it was a still a system of individual appropriation of profit by individual firms, not socialized appropriation. If the current group of directors succeed in INVEPAL in their project of taking over a majority stake in the company in order to enrich the workers of INVEPAL, this will simply set one group of workers against the others and increase inequality. It could also create a struggle within INVEPAL for control of those shares. If the workers of each industry or enterprise are allowed to keep the profits of production, profit will not be redistributed socially but remain private – which is basically capitalism and will in no way lead to the development of socialist relations of production.

Then there is the CNV, where we also have a certain amount of influence. The CNV was nationalized in May and renamed INVEVAL. Here the difficulties are coming not from the workers’ cooperative but the state. Well, it must be said that the former owner has launched an injunction demanding to be paid compensation for the expropriation, but the real problem is that when it was nationalized Chavez made it very clear that the workers had to have a majority of representatives on the board of directors and that the highest decision making body should be the General Workers’ Assembly. However, when the representatives of the Ministry for People’s Economy read the proposed statutes of the company to the workers, there was no mention of the participation of the workers. The mass meeting of workers rejected this proposal and began to mobilize around the demand for workers’ control. They have now linked up with workers in other companies where there is workers’ control in order to spread the struggle beyond INVEVAL. We will come back to this in a few minutes. (1)

The most advanced experience of workers’ control is taking place in ALCASA, the massive state-owned aluminum plant. It is absolutely amazing to read the material on cogestion in Venezuela. The debates and discussions on workers’ control and socialism are very advanced, in many ways more advanced than in Russia 1917, and this is without the benefit of a Bolshevik Party!

The workers at ALCASA are absolutely clear about what cogestion means. Edgar Caldera, one of the workers’ union leaders has written the following:

“If there is something the workers must understand clearly it is that our co-management cannot become a weapon to deepen the exploitive capitalist mode of production. We cannot repeat the sad story of Europe, where the system of co-management was used to get rid of the rights of the workers and their acquired rights.

The co-management that we have begun to apply in ALCASA has nothing to do with this. It is about a genuine emancipation of our class, based on the revolutionary principles of Marx, Rosa Luxemburg, Gramsci, and Trotsky, amongst others. It is about creating a model of co-management with the aim of transforming the capitalist mode of production, which is based on the exploitation of man by man, into a mode of social relations based on the principles of cooperation, solidarity, justice, equality, co-responsibility and common well-being of the workers and the population in general.” (ALCASA:Cogestion, workers’ control and production, http://venezuela.elmilitante.org/index.asp?id=muestra&id_art=1999)

In another article he writes:

“The workers of ALCASA are pushing forward workers’ control and community control, based on the General Assemblies as supreme authority… which have totally transformed the old structure of power and are giving all power to the workers and the community…

In ALCASA the workers elect the managers, who are paid the same wages, and are subject to the right of recall. The most important decisions are made by the General Workers’ Assembly. The managers have also said they will not shut themselves away in the office, they will continue to work.” (ALCASA: bourgeois cogestion or workers’ cogestion, http://venezuela.elmilitante.org/index.asp?id=muestra&id_art=1917)

Trino Silva, another one of the workers’ leaders said the following in an interview:

“The workers should choose the president of ALCASA. But the Board of Directors should not be composed of only workers. We are thinking of a 14 person board: seven primary, and seven substitutes. Of the seven primary members, four should be ALCASA workers, two should be government representatives (so that they can oversee what we are doing with the business), and another should a representative of the organized community.”

Significantly he adds:

ALCASA does not only belong to the ALCASA workers, nor to Trina Silva and the ALCASA workers, but to all of the people. Therefore the public has the right to representation on the Board; first for transparency, and second to ensure that ALCASA benefits everyone.” (Aluminum Workers in Venezuela Choose Their Managers and Increase Production, interview by M. Harnecker, http://www.venezuelanalysis.com/articles.php?artno=1407)

The experience at ALCASA and community participation in management has led them to other excellent ideas, which demonstrate the power of workers’ control to transform society. Last year ALCASA spent 24 billion bolivars on health care in private clinics for workers. The union believes that they own some land close to the plant and that they can give this land to the state to build a public clinic for ALCASA workers and the surrounding communities. ALCASA and several businesses in the area are also going to chip in and build an industrial kitchen for workers and the community. There are some 200 cooks in the area they could organize and provide jobs to. They also want to break the transportation monopoly on the area. They want to help fund and create a better, more comfortable and more affordable public transportation system. This is a clear demonstration of workers’ control, workers’ democracy, can replace the market as a regulator of the economy. The workers’ can clearly see what needs to be done, what needs to be improved, and can demand that investment be made in these areas. If this experience were repeated on a national scale, and social wealth available to all through a democratically planned economy, it is easy to see how quickly Venezuela could develop.

However there are some dangers that ALCASA faces. ALCASA is in fact a loss-making enterprise. The reformists and the bureaucrats may use the creativity of the workers to turn it into a profit-making enterprise, and then try to squeeze out workers’ control. Or, if ALCASA continues to make a loss, the reformists may try to argue that workers’ control does not work and that it should be abandoned as part of a generalized attack on the working class and any elements of control or management they may have over the economy.

I hope everyone here had a chance to see Jorge Martin’s article which appeared about a week and a half ago on the expropriation of idle factories. The total number of idle companies being investigated in Venezuela is 1149. This is a measure designed to defend jobs, break the sabotage of the bosses, and break Venezuela’s dependency on imports. If the state is to run these enterprises under workers’ control, they will need to provide these companies with raw resources. These companies will then in turn have to sell their finished product. This will force the beginnings of an economic plan and may eventually force Chavez to consider the expropriation of the bourgeois. This demand will more than likely come from the working class itself. The workers will begin to ask questions: why is nationalization limited to factories that are bankrupt or shutdown? Why should the state always nationalize the losses and privatize the profits? In order that these former idle, soon to be nationalized enterprises are viable, they must be part of a general plan of production. That will not be possible as long as the key sections of the economy, such as banking and credit, remain in private hands. These nationalized companies will be at the mercy of capitalism, will face sabotage, and will face the refusal to sell products. This will force Chavez and the government down the road of expropriation.

Jorge Martin’s article also explains that for any employers that want to keep their companies open, the state will help them out with low interest credit, but only on condition that “the employers give workers’ participation in management, the direction, and the profits of the company”.

Under normal conditions this would be a clever trick to disarm the working class. However in Venezuela today, this will only serve to increase the confidence of the workers and sharpen class struggle in these factories.

Now, the final point I want to make about Venezuela is the national meeting of workers involved in the experiences of workers’ control which was held on June 16-18. This involved the workers of INVEVAL, ALCASA, PDVSA and several other companies. Some of the decisions made were:

  1. the construction of a National Front for the Defence of Revolutionary Co-management, Endogenous Socialist development… at a local and state level.

  2. to characterize our cogestion as a movement that will affect capitalist relations and drive towards workers’ control, the power of the assemblies of citizens and the construction of a socialist state.

  3. the National Front proposes labour, social, and military co-management.

  4. to include amongst the proposals for revolutionary co-management that the companies must be the property of the State, without distribution of shares to the workers, and that any profits will be distributed according to the needs of society through the councils of socialist planning. These councils of socialist planning must be understood as bodies which implement the decisions taken by the citizens in assemblies.

  5. to fight for, promote and sytematize social and political education and socialist ideology in order to deepen the Bolivarian Revolution by the creation of local centres, state and regional centres with the view of building a National Network of Revolutionary Socio-Political education

  6. to build solidarity and spread the revolution throughout Latin America and the world.

  7. acknowledge the excluded, exploited, and oppressed as class allies of the struggle for the building of socialism of the 21st century.

It is quite clear from these resolutions that cogestion or co-management in Venezuela is in fact seen as a step towards the building of a socialist society. This national meeting of workers experiencing workers’ control is obviously an enormous step in the right direction. It is bringing the different groups of workers together and bringing them under one banner, it is giving shape to the movement, and giving shape to the ideology of the workers, which is moving inexorably towards socialism. The workers, through their own experience, have drawn the conclusion that workers’ control is a powerful tool in the hands of the working class. The struggle for workers’ control directly challenges the private ownership of the means of production, and is the struggle for the creation of the new society within the old. The socialist transformation of society depends on the transformation of the mode of production, and workers’ control and management is the revolutionary method of the working class to effect this transformation and attack the very heart of capitalism – on the factory and shop floor. This is why the revolution in Venezuela is moving in the direction of socialism – the form of struggle the working class adopts to defend the revolution, their jobs and livelihoods, and their interests, takes place on the shop floor against their enemy, capitalism and the bosses, in the form strikes and demonstrations but also of workers’ control and management. The socialist aims of the revolutionary movement are born out of this struggle, and workers’ management lays the foundations of the new society.

The movement for workers’ control is leading the working class to one conclusion: that the Bolivarian revolution must break with capitalism. It is the workers who see that in order to achieve their goals, the Revolution must break, radically, from capitalism. In order to solve problems such as unemployment, housing, education, and food production, it is necessary to draw up and economic plan based on the needs of the majority, not the profit of the minority. However, you cannot plan what you do not control, and you cannot control what you do not own. As long as the most important levers of economic power remain in the hands of the bosses, they will be able to organize sabotage, and even possibly the overthrow of the revolution.

The control of one, or several factories, as in Spain 1936, or in Chile in the early 1970s, or as in Venezuela today does not mean the end of capitalism. Inevitably, while the capitalists remain in overall control of the economy workers’ control cannot be maintained. Workers’ control is a big step. It gives the workers priceless experience in administration that is essential in a socialist planned economy. However, again, as long as the key elements of the economy remain in private hands, as long as there is not a genuine nationalized planned economy, the experience of workers’ control will only have a partial, unsatisfactory character.

Again, while workers control develops from below, from the shop floor through the plant upwards, workers' management develops from above and is only meaningful in the context of a socialist planned economy, with the monopolies nationalized. It means management by the workers of the overall plan of the economy, not just their own factory or local economy, making the general investment decisions' and plans for growth to meet the needs of the people. Socialists are not syndicalists who believe that control of individual plants or industries by the workers in them can guarantee the harmonious running of industry without overall management of the economy by the workers as a whole.

This means that ownership of industry cannot remain in the hands of the capitalists. Only public ownership of the major monopolies would guarantee workers' management and workers' control in the individual plants.

These workers councils must involve all sections of the working class including tenants, housewives, students and old age pensioners as well as the industrial trade union organizations of the workers. Regular elections of delegates, subject to immediate recall, and officials tied to the average wage of a skilled worker would safeguard the workers from the growth of a bureaucracy of officialdom usurping power.

The struggle for workers’ control must move forward, must be extended, and must be linked to the demand for the socialist transformation of society. The workers in Venezuela are doing this. Nationalization must be extended to the banks, the telecom sector, the land and food production centers, and to manufacturing and heavy industry. The economic power of the oligarchy and the imperialists must be broken. The Venezuelan working class is undergoing a massive transformation and becoming aware of its strength and its goals. Herein lies the hope for the Bolivarian Revolution. The successful extension of workers’ control and the building of socialism in Venezuela would spread across the entire continent. It would give hope and confidence to the working class in Bolivia, Argentina, Brazil, Mexico, and Cuba. The Latin American revolution would be a source of inspiration to the whole world.

I will end here with the words of Hugo Chavez: “A revolution is a process in which new ideas and models are born, while old ideas die, and in the Bolivarian Revolution, it is capitalism that will be eliminated!”

(1) The conflict has now been solved through a halfway compromise. The director’s board will be composed of three members appointed by the government and two by the workers cooperative. But Chavez insisted that the main director which is appointed by the government be the main leader of the workers’ struggle.


See also Part Three, Part Two and Part One