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Self-management or Workers' self-management (also referred to as Labor management, Workers' control, Industrial democracy and Producer cooperatives) is a form of management that involves management of an organization by its workers. Self-management is a characteristic of many models of socialism, with proposals for self-management having appeared many times throughout the history of the socialist movement, advocated variously by market socialists, communists and anarchists.
There are many variations of self-management. In some variations, all the worker-members manage the enterprise directly through assemblies; in other forms, workers manage indirectly through the appointment of managers through election. Self-management may include worker supervision and oversight of an organization by elected bodies, election of specialized managers, or management without any specialized managers as such. The goals of self-management are to improve performance by granting workers greater autonomy in their day-to-day operations (self-directed activity), while reducing alienation and eliminating exploitation.
Self-management of an organization may coincide with employee ownership of that organization, but self-management can also exist in the context of organizations under public ownership, and to a limited extent within private companies in the form of co-determination and worker representation on the board of directors.
An economic system consisting of self-managed enterprises is sometimes referred to as a participatory economy, self-managed economy or cooperative economy. This economic model is a major version of market socialism, stemming from the notion that people should be able to participate in making the decisions that affect their well-being. The major proponents of self-management and self-managed market socialism in the 20th century include the economists Benjamin Ward, Jaroslav Vanek and Branko Horvat. The Ward-Vanek model of self-management involves the diffusion of entrepreneurial roles amongst all the partners of the enterprise.
The economist Branko Horvat notes that participation is not simply more desirable but also more economically viable than traditional hierarchical and authoritarian management as demonstrated by econometric measurements, which indicate an increase in efficiency with greater participation in decision-making. According to Horvat, these developments are moving the world toward a self-governing socialistic mode of organization.
In the economic theory of self-management, workers are no longer employees but partners in the administration of their enterprise. Management theories in favor of greater self-management and self-directed activity cite the importance of autonomy for productivity in the firm, and economists in favor of self-management argue that cooperatives are more efficient than centrally-managed firms because every worker receives a portion of the profit, thereby directly tying their productivity to their level of compensation.
Historical economic figures who supported cooperatives and self-management of some kind include the anarchist Pierre Joseph Proudhon, classical economist John Stuart Mill, and the neoclassical economist Alfred Marshall. Contemporary proponents of self-management include the American Marxist economist Richard D. Wolff.
In the 19th century, the idea of a self-managed economy was first fully articulated by the anarchist philosopher and economist Pierre-Joseph Proudhon. This economic model was called mutualism to highlight the mutual relationship among individuals in this system (in contrast to the "parasitism" of capitalist society) and involved cooperatives operating in a free-market economy.
Karl Marx championed the idea of a "free association of producers" as a characteristic of communist society, where self-management processes replaced the traditional notion of the centralized state. This concept is related to the Marxist idea of transcending alienation.
In his book Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink argues on the basis of empirical evidence that self-management/self-directed processes, mastery, worker autonomy and purpose (defined as intrinsic rewards) are much more effective incentives than monetary gain (extrinsic rewards). According to Pink, for the vast majority of work in the 21st century, self-management and related intrinsic incentives are far more crucial than outdated notions of hierarchical management and an over-reliance on monetary compensation as reward.
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It then became a primary component of some trade union organizations, in particular revolutionary syndicalism which was introduced in late 19th century France, and guild socialism in early 20th century Britain, although both movements collapsed in the early 1920s. French trade-union CFDT ("Confédération Française Démocratique du Travail") included worker self-management in its 1970 program, before later abandoning it. The philosophy of workers' self-management has been promoted by the Industrial Workers of the World (IWW) since its founding in the United States in 1905.
Critics of workers' self-management from the left such as Gilles Dauvé and Jacques Camatte do not admonish the model as reactionary, but simply as not progressive in the context of developed capitalism. Such critics suggest that capitalism is more than a relationship of management. Rather, they suggest capitalism should be considered as a social totality which workers' self-management in and of itself only perpetuates and does not challenge - despite its seemingly radical content and activity. This theory is used to explain why self-management in Yugoslavia never advanced beyond the confines of the larger state monopoly economy, or why many modern worker-owned facilities tend to return to hiring managers and accountants after only a few years of operation.
Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related guilds "in an implied contractual relationship with the public". It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century. It was strongly associated with G. D. H. Cole and influenced by the ideas of William Morris.
"But by taking the land and the industrial plants under their own management they have taken the first and most important step on the road to Socialism. Above all, they (the Workers' and peasants self-management) have proved that the workers, even without the capitalists, are able to carry on production and to do it better than a lot of profit-hungry entrepreneurs.
In the 1950s, at the height of the Cold War, Yugoslavia advocated what was officially called socialist self-management in distinction from the Eastern Bloc countries, all of which practiced central planning and centralized management of their economies. The economy of Yugoslavia was organized according to the theories of Tito and – more directly – Edvard Kardelj. Croatian scientist Branko Horvat also made a significant contribution to the theory of workers' self-management (radničko samoupravljanje) as practiced in Yugoslavia. With the exception of a recession in the mid-1960s, the country's economy prospered under Titoist Socialism. Unemployment was low, the education level of the work force steadily increased. The life expectancy (which was about 72 years) and living standards of Yugoslav citizens was nearly equal to the life expectancy and living standards of citizens of “western” capitalist countries such as Portugal. Due to Yugoslavia's neutrality and its leading role in the Non-Aligned Movement, Yugoslav companies exported to both Western and Eastern markets. Yugoslav companies carried out construction of numerous major infrastructural and industrial projects in Africa, Europe and Asia.
After May 68 in France, LIP factory, a clockwork factory based in Besançon, became self-managed starting in 1973 after the management's decision to liquidate it. The LIP experience was an emblematic social conflict of post-68 in France. CFDT (the CCT as it was referred to in Northern Spain), trade-unionist Charles Piaget led the strike in which workers claimed the means of production. The Unified Socialist Party (PSU), which included former Radical Pierre Mendès-France, was in favour of autogestion or self-management.
In the Basque Country of Spain, the Mondragon Cooperative Corporation represents perhaps the longest lasting and most successful example of workers' self-management in the world. It was been touted by a diverse group of people, such as the Marxian economist Richard D. Wolff and the research monograph Capital and the Debt Trap as an example of how the economy can be organized on an alternative to the capitalist mode of production.
During the Great Depression, worker and utility cooperatives flourished to the point that more than half of US farmers belonged to a cooperative. In general worker cooperatives and cooperative banking institutions were formed across the country and became a thriving alternative for workers and customers. Now, due to the economic downturn and stagnation in the rustbelt, worker cooperatives such as the Evergreen Cooperatives have been formed in response, inspired by Mondragon.
In October 2005 the first Encuentro Latinoamericano de Empresas Recuperadas ("Latin American Encounter of Recovered Companies") took place in Caracas, Venezuela, with representatives of 263 such companies from different countries living through similar economical and social situations. The meeting had, as its main outcome, the Compromiso de Caracas (Caracas' Commitment); a vindicating text of the movement.
The fábricas recuperadas movement
English-language discussions of this phenomenon may employ several different translations of the original Spanish expression other than recovered factory. For example, recuperated factory/business, reclaimed factory, and worker-run factory have been noted. The phenomenon is also known as "autogestion," which comes from the French word for self-management (applied to factories, popular education systems, and other uses). Worker self-management may coincide with employee ownership.
Argentina's fábricas recuperadas movement, which emerged in response to Argentine's 2001 economic crisis, is the current most significant workers' self-management phenomenon in the world. Workers took over control of the factories in which they had worked, commonly after bankruptcy, or after a factory occupation to circumvent a lockout.
Fábricas recuperadas means "reclaimed/recovered factories." The Spanish verb recuperar means not only "to get back", "to take back" or "to reclaim" but also "to put back into good condition". Although initially referring to industrial facilities, the term may also apply to businesses other than factories (e.g. Hotel Bauen in Buenos Aires).
Throughout the 1990s in Argentina's southern province of Neuquén, drastic economic and political events occurred where the citizens ultimately rose up. Although the first shift occurred in a single factory, bosses were progressively fired throughout the province so that by 2005 the workers of the province controlled most of the factories.
The movement emerged as a response to Argentine's 2001 economic crisis, and about 200 Argentine companies were "recovered" by their workers and turned into co-operatives. Prominent examples include the Brukman factory, the Hotel Bauen and FaSinPat (formerly known as Zanon). As of 2005, about 15,000 Argentine workers run recovered factories.
The phenomenon of fabricas recuperadas ("recovered factories") is not new in Argentina. Rather, such social movements were completely dismantled during the so-called "Dirty War" in the 1970s. Thus, during Héctor Cámpora's first months of government (May–July 1973), a rather moderate and left-wing Peronist, approximately 600 social conflicts, strikes and factory occupations had taken place.
Many recovered factories are run co-operatively and all workers receive the same wage. Important management decisions are taken democratically by an assembly of all workers, rather than by professional managers.
The proliferation of these "recoveries" has led to the formation of a recovered factory movement, which has ties to a diverse political network including socialists, Peronists, anarchists and communists. Organizationally, this includes two major federations of recovered factories, the larger Movimiento Nacional de Empresas Recuperadas (or National Movement of Recuperated Businesses, or MNER) on the left and the smaller National Movement of Recuperated Factories (MNFR) on the right. Some labor unions, unemployed protestors (known as piqueteros), traditional worker cooperatives and a range of political groups have also provided support for these take-overs. In March 2003, with the help of the MNER, former employees of the luxury Hotel Bauen occupied the building and took control of it.
One of the highest difficulties such a movement faces is its relation towards the classic economic system, as most classically managed firms refused,[verification needed] for various reasons (among which ideological hostility to the very principle of autogestion) to work and deal with recovered factories. Thus, isolated recovered factories find it easier to work together in building an alternative, more democratic economic system and thus manage to reach a critical size and power which enables it to negotiate with the ordinary capitalistic firms.
- Consensus decision-making
- Council communism
- Democratic socialism
- Employee ownership
- Industrial democracy
- Market socialism
- Mutualism (economic theory)
- Participatory economics
- Socialization (economics)
- Workers' council
- Workplace democracy
Examples and organizations
- Ceylon Transport Board
- Economy of Yugoslavia, an economy based on self-managed cooperatives
- Mondragón Corporation, probably the world's largest self-managed enterprise
- Orpheus Chamber Orchestra
- Unified Socialist Party (France)
- United States Federation of Worker Cooperatives
- Paris Commune of 1871
- 1971 Harco work-in (a four-week "work-in" by Australian steelworkers)
- Steele, David (1992). From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation. Open Court Publishing Company. p. 323. ISBN 978-0875484495. "The proposal that all the workers in a workplace should be in charge of the management of that workplace has appeared in various forms throughout the history of socialism…among the labels attached to this form of organization are ‘self-management’, ‘labor management’, ‘workers’ control’, ‘worker control’, ‘industrial democracy’ and ‘producers’ co-operatives’."
- Steele, David (1992). From Marx to Mises: Post-Capitalist Society and the Challenge of Economic Calculation. Open Court Publishing Company. p. 323. ISBN 978-0875484495. "The self-management idea has many variants. All the workers may manage together directly, by means of an assembly, or indirectly by electing a supervisory board. They may manage in co-operation with a group of specialized managers or they may do without them."
- O'Hara, Phillip (September 2003). Encyclopedia of Political Economy, Volume 2. Routledge. p. 9. ISBN 0-415-24187-1. "In eliminating the domination of capital over labour, firms run by workers eliminate capitalist exploitation and reduce alienation."
- Gregory and Stuart, Paul and Robert (2004). Comparing Economic Systems in the Twenty-First Century, Seventh Edition. George Hoffman. pp. 145–146. ISBN 0-618-26181-8.
- Horvat, Branko (1983). The Political Economy of Socialism: A Marxist Social Theory. M.E Sharpe Inc. p. 173. ISBN 978-0873322560. "Participation is not only more desirable, it is also economically more viable than traditional authoritarian management. Econometric measurements indicate that efficiency increases with participation...There is little doubt that the world is moving toward a socialist, self-governing society at an accelerated pace."
- Proudhon, Pierre-Joseph (1866–1876). 'Oeuvres Complètes', volume 17. Paris: Lacroix. pp. 188–9.
- O'Hara, Phillip (September 2003). Encyclopedia of Political Economy, Volume 2. Routledge. p. 836. ISBN 0-415-24187-1. "it influenced Marx to champion the ideas of a "free association of producers" and of self-management replacing the centralized state."
- "Guild Socialism". Encyclopædia Britannica. Encyclopædia Britannica Online. Encyclopædia Britannica Inc., 2012. Web. 31 May. 2012
- Dolgoff, S. (1974), The Anarchist Collectives: Workers' Self-Management in the Spanish Revolution, ISBN 978-0-914156-03-1
- Liotta, P.H. "Paradigm Lost :Yugoslav Self-Management and the Economics of Disaster". Retrieved 18 August 2010.
- "Yugoslavia: Introduction of Socialist Self-Management". Country Data. December 1990. Retrieved 18 August 2010.
- LIP, l'imagination au pouvoir, article by Serge Halimi in Le Monde diplomatique, 20 March 2007 (French)
- Richard D. Wolff (June 24, 2012). "Yes, there is an alternative to capitalism: Mondragon shows the way." The Guardian. Retrieved 15 November 2013.
- Guido Galafassi, Paula Lenguita, Robinson Salazar Perez (2004) Nuevas Practicas Politicas Insumisas En Argentina pp.222, 238
- Hugo Moreno, Le désastre argentin. Péronisme, politique et violence sociale (1930-2001), Editions Syllepses, Paris, 2005, p.109 (French)
- Movimiento Nacional de Fabricas Recuperadas
- Marie Trigona, Recuperated Enterprises in Argentina - Reversing the Logic of Capitalism, Znet, March 27, 2006 (English)
- Pagina12: Nueva Ley de Quiebras (April 2011), Fábricas recuperadas y también legales (June 2nd 2011)
- CFK promulgó la reforma de la Ley de Quiebras in Página/12, June 29th 2011
- Bolloten, Burnett (1991). The Spanish Civil War: Revolution and Counterrevolution. Chapel Hill: University of North Carolina. ISBN 0-8078-1906-9.
- For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press, by John Curl, 2009, ISBN 978-1-60486-072-6
- An Anarchist FAQ, Vol. 2, (2012, AK Press), see section: I.3.2 What is workers' self-management? 
- Anarcho-syndicalism, Rudolf Rocker (1938), AK Press Oakland/Edinburgh. ISBN 978-1-902593-928.
- Living Utopia (Original, 1997: Vivir la utopía El anarquismo en Espana) is a documentary film by Juan Gamero. It consists of 30 interviews with activists of the Spanish Revolution 1936-39 and one of the biggest examples of Workers' and peasants self-management during the following Social revolution.
- Argentinian workers preparing to defend control of factory, April 26, 2005
- THE NEW RESISTANCE IN ARGENTINA, by Yeidy Rosa
- Self-management and Requirements for Social Property: Lessons from Yugoslavia by Diane Flaherty
- Worker self-management in historical perspective by James Petras and Henry Veltmeyer
- Yugoslavia's Self-Management by Daniel Jakopovich
- Movimiento Nacional de Fabricas Recuperadas (National Movement of Recovered Factories, Spanish only)
- The Worker-Recovered Enterprises in Argentina: The Political and Socioeconomic Challenges of Self-Management Andrés Ruggeri, University of Buenos Aires, Argentina
- Official site for El Cambio Silencioso, book on recovered factories by Esteban Magnani (Spanish and English mostly)
- The Social Innovations of Autogestión in Argentina’s Worker-Recuperated Enterprises: Cooperatively Reorganizing Productive Life in Hard Times (Labor Studies Journal, 2010) by Marcelo Vieta
- Selbsthilfe von Erwerbslosen in Krisenzeiten. Die empresas recuperadas in Argentinien, by Kristina Hille
- Democracy at Work A social movement for a new economy founded by economist Richard D. Wolff
- The End of Illth: In search of an economy that won’t kill us. Harper's Magazine, October 4, 2013.
- American Solidarity Party — New 3rd party which favors workers' self-management