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60-464: The Hotel Bauen was a recuperated business located at 360 Callao Avenue in Buenos Aires run collectively by its workers, serving both as a hotel and as a free meeting place for Argentine leftist and workers' groups. It is also used as a personal residence by some of the worker-owners. Inaugurated in 1978, the four-star establishment received generous government subsidies in anticipation of

120-420: A free-market economy. The classical liberal philosopher and economist John Stuart Mill believed that worker-run and owned cooperatives would eventually displace traditional capitalist (capital-managed) firms in the competitive market economy due to their superior efficiency and stronger incentive structure. While both Mill and Karl Marx thought that democratic worker management would be more efficient in

180-415: A government owning all or a controlling stake of the company's shares . This form is often referred to as a state-owned enterprise . A state-owned enterprise might variously operate as a not-for-profit corporation , as it may not be required to generate a profit; as a commercial enterprise in competitive sectors; or as a natural monopoly . Governments may also use the profitable entities they own to support

240-441: A practical formulation that ensures degrees of living by transforming informal solidarity networks into remunerative distribution cooperatives. This dialectic, echoes the idea of formally managing the crisis, which reproduces itself not in spite of, but because of, official policy initiatives to combat it. Workers' collectives and cooperatives, Self-Help Groups, Local Exchange Trade Systems (LETS), Freecycle networks and Timebanks, and

300-436: A productive organization, being distinct from the questions of ownership and what economic system the organization operates under. 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

360-423: A rather moderate and left-wing Peronist, approximately 600 social conflicts, strikes and factory occupations had taken place. The proliferation of these "recuperations" has led to the formation of a recuperated 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,

420-479: A sense of autonomy, competence and relatedness (the three needs that self determination theory identifies for autonomous motivation). 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

480-423: A specific state institution or branch of government, used exclusively by that branch, such as a research laboratory. The latter refers to assets and resources owned by the population of a state which are mostly available to the entire public for use, such as a public park (see public space ). In neoclassical economic theory , the desirability of state ownership has been studied using contract theory . According to

540-406: A whole. As such, state ownership is only one possible expression of public ownership, which itself is one variation of the broader concept of social ownership. In the context of socialism, public ownership implies that the surplus product generated by publicly owned assets accrues to all of society in the form of a social dividend , as opposed to a distinct class of private capital owners. There

600-550: Is a natural monopoly or because the government is promoting economic development and industrialization . State-owned enterprises may or may not be expected to operate in a broadly commercial manner and may or may not have monopolies in their areas of activity. The transformation of public entities and government agencies into government-owned corporations is sometimes a precursor to privatization . State capitalist economies are capitalist market economies that have high degrees of government-owned businesses. Public ownership of

660-416: Is a process of transferring private or municipal assets to a central government or state entity. Municipalization is the process of transferring private or state assets to a municipal government. A state-owned enterprise is a commercial enterprise owned by a government entity in a capitalist market or mixed economy . Reasons for state ownership of commercial enterprises are that the enterprise in question

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720-416: Is a wide variety of organizational forms for state-run industry, ranging from specialized technocratic management to direct workers' self-management . In traditional conceptions of non-market socialism, public ownership is a tool to consolidate the means of production as a precursor to the establishment of economic planning for the allocation of resources between organizations, as required by government or by

780-563: Is desirable. In their model, the government and a private firm can invest to improve the quality of a public good and to reduce its production costs. It turns out that private ownership results in strong incentives to reduce costs, but it may also lead to poor quality. Hence, depending on the available investment technologies, there are situations in which state ownership is better. The Hart-Shleifer-Vishny theory has been extended in many directions. For instance, some authors have also considered mixed forms of private ownership and state ownership. In

840-452: Is the ownership of an industry , asset , property , or enterprise by the national government of a country or state , or a public body representing a community, as opposed to an individual or private party . Public ownership specifically refers to industries selling goods and services to consumers and differs from public goods and government services financed out of a government's general budget . Public ownership can take place at

900-644: The 1978 FIFA World Cup , which took place in Buenos Aires that June. The original owner, Marcelo Iurcovich, received US$ 37 million for its development in 1976 from the Banco Nacional de Desarollo (BANADE), a state-owned business lender later absorbed into the Banco de la Nación Argentina . The hotel's finances worsened during the crisis in the early 2000s and after systematic firings, the Hotel Bauen

960-482: The 2007–2008 financial crisis , a number of factories were occupied and became self-managed in Greece, France, Italy, Germany and Turkey. In Greece, solidarity-based distribution is partially the result of austerity policies' privatization of public services, which exacerbates on-the-ground solidarity activities. These have mostly emerged as a consequence of ambitious politicized thinking and mobilization, as well as

1020-613: The Brukman factory , the Hotel Bauen and FaSinPat (formerly known as Zanon). As of 2020, around 16,000 Argentine workers run close to 400 recuperated factories. The phenomenon of empresas recuperadas ("recovered enterprises") 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),

1080-559: The COVID-19 pandemic . Under a new court order, the building is to return to its original owners. Workers%27 self-management Workers' self-management , also referred to as labor management and organizational self-management , is a form of organizational management based on self-directed work processes on the part of an organization's workforce . Self-management is a defining characteristic of socialism , with proposals for self-management having appeared many times throughout

1140-641: 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. In 1950, the Law on self-management introduced worker's councils. The "beginning of the end of bureaucracy" was declared along the pretenses of the Marxist concept of withering away of

1200-423: The means of production is a subset of social ownership , which is the defining characteristic of a socialist economy. However, state ownership and nationalization by themselves are not socialist, as they can exist under a wide variety of different political and economic systems for a variety of different reasons. State ownership by itself does not imply social ownership where income rights belong to society as

1260-436: The national , regional , local , or municipal levels of government; or can refer to non-governmental public ownership vested in autonomous public enterprises . Public ownership is one of the three major forms of property ownership, differentiated from private, collective / cooperative , and common ownership . In market-based economies, state-owned assets are often managed and operated as joint-stock corporations with

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1320-438: The 20th century include the economists Benjamin N. Ward, Jaroslav Vanek and Branko Horvat . Horvat says 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. Writing from the perspective of socialist Yugoslavia in

1380-495: The 20th century. It was strongly associated with G. D. H. Cole and influenced by the ideas of William Morris . One significant experiment with workers' self-management took place during the Spanish Revolution (1936–1939). In his book Anarcho-Syndicalism (1938), Rudolf Rocker stated: But by taking the land and the industrial plants under their own management they have taken the first and most important step on

1440-425: The 21st century self-management and related intrinsic incentives are far more crucial than outdated notions of hierarchical management and an overreliance on monetary compensation as reward. More recent research suggests that incentives and bonuses can have positive effects on performance and autonomous motivation. According to this research, the key is aligning bonuses and incentives to reinforce, rather than hamper,

1500-466: The Charter of Self-management, defined self-management and social property as supreme values and it defined Yugoslavia as a "socialist self-managed democratic community". The Law of Associated Labor of 1976 represented the last stage of the development of Yugoslav self-management. On the grounds of the 1974 Yugoslav constitution, it created a completely autonomous system grounded in direct sovereignty of

1560-498: The Hart-Shleifer-Vishny model it is assumed that all parties have the same information, while Schmitz (2023) has studied an extension of their analysis allowing for asymmetric information . Moreover, the Hart-Shleifer-Vishny model assumes that the private party derives no utility from provision of the public good. Besley and Ghatak (2001) have shown that if the private party (a non-governmental organization) cares about

1620-462: 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 and decentralized planned economy , 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-managed market socialism in

1680-644: The closure order. The ownership of the building remains unclear. A bill of expropriation, the Ley Nacional de Expropiación , would have definitively entitled the Bauen workers to ownership of the hotel. Sponsored by Deputy Victoria Donda in the National Congress , the bill introduced in 2007 but failed to pass. During the 2010s, the hotel, still under the worker cooperative's management, barely managed to stay open. It finally closed down in mid-2020, citing

1740-413: The early 1980s, Horvat suggested that the larger world was moving toward a self-governing socialistic mode of organization as well. The theory of the labor managed firm explains the behavior, performance and nature of self-managed organizational forms. Although self-managed (or labor-managed) firms can coincide with worker ownership (employee ownership), the two are distinct concepts and one need not imply

1800-478: The earnings of the enterprise. He noted that this behavioral rule, if made a part of the theoretical model, implies that the market behavior of a labor-managed firm is, contrary to theses by Ward and his followers, much more similar to the hypothetical behavior of a "traditional", profit-maximizing firm. Building on a larger body of empirical studies, contemporary Canadian economist Gregory Dow has carried out extensive theoretical research on labor-managed firms from

1860-471: The election of specialized managers, or self-directed 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, boosting morale , reducing alienation and eliminating exploitation when paired with employee ownership . An enterprise that is self-managed is referred to as a labour-managed firm . Self-management refers to control rights within

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1920-696: The first worker-occupied factory are examples of non-capitalist social experiments and innovations that have emerged in Greece since 2012. At the height of the Cold War , Yugoslavia, as a consequence of the Tito-Stalin split , pursued and advocated for, 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 . It replaced central planning with planning basic proportions that

1980-467: The general budget. The creation of a state-owned enterprise from other forms of public property is called corporatization . In Soviet-type economies , state property was the dominant form of industry as property. The state held a monopoly on land and natural resources, and enterprises operated under the legal framework of a nominally planned economy , and thus according to different criteria than enterprises in market and mixed economies. Nationalization

2040-509: The history of the socialist movement, advocated variously by democratic , libertarian and market socialists as well as anarchists and communists . There are many variations of self-management. In some variants, all the worker-members manage the enterprise directly through assemblies while in other forms workers exercise management functions indirectly through the election of specialist managers. Self-management may include worker supervision and oversight of an organization by elected bodies,

2100-409: The hotel was informed that, while a legal right of former employees to keep residence in the hotel was recognised, they were not permitted to function as a business. Upon delivery of this notice, entrances were closed off with official tape, but this tape was quickly removed by hotel workers, and business operations continue today. In May 2006, Judge Carla Cavaliere officially approved the suspension of

2160-495: The larger Movimiento Nacional de Empresas Recuperadas (National Movement of Recuperated Businesses, or MNER) on the left and the smaller National Movement of Recuperated Factories (MNFR) on the right. The movement led in 2011 to a new bankruptcy law that facilitates take over by the workers. The legislation was signed into law by President Cristina Kirchner on June 29, 2011. Public ownership State ownership , also called public ownership or government ownership ,

2220-527: The long run compared with hierarchical management, Marx was not hopeful about the prospects of labor-managed and owned firms as a means to displace traditional capitalist firms in the market economy. Despite their advantages in efficiency, in Western market economies the labor-managed firm is comparatively rare. Karl Marx championed the idea of a free association of producers as a characteristic of communist society , where self-management processes replaced

2280-516: The longest lasting and most successful example of workers' self-management in the world. It has been touted by a diverse group of people such as the Marxian economist Richard D. Wolff and the research book Capital and the Debt Trap by Claudia Sanchez Bajo and Bruno Roelants as an example of how the economy can be organized on an alternative to the capitalist mode of production . Following

2340-533: The means of production may be labelled state socialism . State ownership was recognized by Friedrich Engels in Socialism: Utopian and Scientific as, by itself, not doing away with capitalism, including the process of capital accumulation and structure of wage labor. Engels argued that state ownership of commercial industry would represent the final stage of capitalism, consisting of ownership and management of large-scale production and manufacture by

2400-430: The neoclassical perspective, focussing on explaining the rarity of labor-managed firms relative to capital-managed ones. 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 and involved cooperatives operating in

2460-410: The original Spanish expression other than recovered factory . For example, worker-recuperated enterprise, recuperated/recovered factory/business/company, worker-recovered factory/business, worker-recuperated/recovered company, worker-reclaimed factory, and worker-run factory have been noted. The phenomenon is also known as autogestión. Argentina's empresas recuperadas movement emerged in response to

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2520-411: The other. According to traditional neoclassical economic theory, in a competitive market economy ownership of capital assets by labor (the workforce of a given firm) should have no significant impact on firm performance. Much of the research on labor-managed firms in the neoclassical tradition revolved around the question of the presumed maximand ( objective function ) of such firms (i.e. the answer to

2580-411: The part of workers in enterprises . 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

2640-399: The property rights approach based on incomplete contracting (developed by Oliver Hart and his co-authors), ownership matters because it determines what happens in contingencies that were not considered in prevailing contracts. The work by Hart, Shleifer and Vishny (1997) is the leading application of the property rights approach to the question whether state ownership or private ownership

2700-590: The question "what do labor-managed firms maximize?", e.g. income per worker or profits) and its implications. The first model of a labor-managed firm in this tradition has been suggested by American economist Benjamin Ward in 1958 who was interested in the analysis of Yugoslav firms. According to Ward, the labor-managed firm strives to maximize income per worker as contrasted with the traditional capitalist firms' objective function of maximizing profit for external owners. Based on this assumption, Ward presented an analysis that

2760-593: 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 . After May 1968 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

2820-567: The run up and aftershocks of Argentina's 2001 economic crisis . Empresas recuperadas means "reclaimed/recovered/recuperated enterprises/factories/companies". The Spanish verb recuperar means not only "to get back", "to take back" or "to reclaim", but also "to put back into good condition". The movement emerged as a response to the years of crisis leading up to and including Argentina's 2001 economic crisis. By 2001–2002, around 200 Argentine companies were recuperated by their workers and turned into worker co-operatives . Prominent examples include

2880-621: The state under the "Factories to the workers'!" parole. According to Boris Kanzleiter, the inspiration for workers' councils came from the People's councils – the revolutionary governing bodies of the People's Liberation Army and the Paris Commune . The 1953 Yugoslav Constitutional Law , introduced self-management in the constitutional matter and transformed state property into social property . The 1963 Yugoslav Constitution , also called

2940-484: The state's management policies, though these rights are not property rights as they are not transmissible. For example, if a family is allocated an apartment that is state owned, it will have been granted a tenancy of the apartment, which may be lifelong or inheritable, but the management and control rights are held by various government departments . There is a distinction to be made between state ownership and public property. The former may refer to assets operated by

3000-513: The state. Within the United Kingdom, public ownership is mostly associated with the Labour Party (a centre-left democratic socialist party), specifically due to the creation of Clause IV of the "Labour Party Manifesto" in 1918. "Clause IV" was written by Fabian Society member Sidney Webb . When ownership of a resource is vested in the state, or any branch of the state such as a local authority , individual use "rights" are based on

3060-527: The state. State ownership is advocated as a form of social ownership for practical concerns, with the state being seen as the obvious candidate for owning and operating the means of production. Proponents assume that the state, as the representative of the public interest , would manage resources and production for the benefit of the public. As a form of social ownership, state ownership may be contrasted with cooperatives and common ownership. Socialist theories and political ideologies that favor state ownership of

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3120-414: The traditional notion of the centralized state. This concept is related to the Marxist idea of transcending alienation . The Soviet-type economic model as practiced in the former USSR and Eastern Bloc ( самоуправление ; samoupravlenie ) was introduced in the state-owned enterprises in the 1980s. It is criticized by socialists for its lack of widespread self-management and management input on

3180-432: The worker and citizen. It foresaw the formation of Basic Organizations of Associated Labor (BOAL) as the basic economic units that every worker had to be a part of based on the precise role played by that worker in the production process. It associated with other BOALs to form an Organization of Associated Labour (OAL) that could, with other OALs form Complex Organizations of Associated Labor. The assembly that consisted of all

3240-476: The workers' of a BOAL elected a delegate, which was bound with an imperative mandate, into the workers' council of the OAL that decided on all matters: from electing the director, to decisions on salaries, investments, association, development and specific production goals. Another feature of Yugoslav self-management were Self-management agreements and Social compacts, these replaced classical contracts. The goal of OALs

3300-714: Was an emblematic social conflict of post-1968 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 autogestión or self-management. In the Basque Country of Spain, the Mondragon Cooperative Corporation represents perhaps

3360-527: Was closed on December 28, 2001. In March 2003, with the help of the Movimiento Nacional de Empresas Recuperadas (National Movement of Recovered Businesses, MNER), the hotel's former employees occupied the building. While fighting for ownership through activism and negotiation, they began repairs and slowly reopened for business. However, the long-term legality of the worker's rights to ownership and operation were ambiguous. On October 21, 2005,

3420-433: Was critical of labor-managed firms. In particular, he argued that a supply curve of a labor-managed firm has a negative slope: an increase in the market price of the product produced by a labor-managed firm will not make it increase production and hire new members. It followed that an economy consisting of labor-managed firms would have a tendency to underutilize labor and tend toward higher rates of unemployment. Ward's model

3480-403: Was developed further by Evsey Domar and generalized by Jaroslav Vaněk . These purely theoretical analyses were criticized by Yugoslav economist Branko Horvat in 1971 who argued for empirical analysis of actually existing labor-managed Yugoslav firms and practices utilized by their members. In particular, he noted that workers fix wages at the beginning of a year and then adjust them based on

3540-632: Was not for-profit but a social goal – it was supposed to facilitate education, healthcare, employment and resolving the housing issue. Macro-economic reforms and structural adjustment programs that were imposed by the International Monetary Fund (IMF) and the World Bank brought an end to workers' self-management in Yugoslavia. English-language discussions of this phenomenon may employ several different translations of

3600-427: Was supposed to stop "the chaos of social production and distribution that is innate to capitalism". It was organized according to the theories of Josip Broz Tito and more directly Edvard Kardelj . Yugoslav economist Branko Horvat also made a significant contribution to the theory of workers' self-management ( radničko samoupravljanje ) as practiced in Yugoslavia. Due to Yugoslavia's neutrality and its leading role in

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