“11. Worker Participation, Dependency, and the Politics of Reform in Latin America and the Caribbean: Jamaica, Chile, and Peru Compared” in “Worker Participation and the Politics of Reform”
WORKER PARTICIPATION, DEPENDENCY, AND THE POLITICS OF REFORM IN LATIN AMERICA AND THE CARIBBEAN: JAMAICA, CHILE, AND PERU COMPARED
Evelyne Huber Stephens
Workers’ participation schemes, such as producer cooperatives, hold considerable attraction for advocates of development models with higher degrees of equity and democracy than pure dependent capitalist or state-socialist development models. Participatory forms of organization of production satisfy the criteria of equity, participation, and decentralization, and such reforms are not ruled out by the context of scarcity of resources. Nevertheless, participation schemes broader than isolated experiments have been rare occurrences in Latin American and Caribbean countries, and successful ones have been even rarer. The frequently heard facile argument that the lack of participation schemes in these countries is due to the low level of development and thus to low qualification, education, and ability of the labor force to participate in decision making is flatly contradicted by the Chilean experience, which shows that these factors are not unsurmountable obstacles. Rather, the following analysis points to two different important reasons for the scarcity of successful workers’ participation reforms in Latin America and the Caribbean: (1) the impact of dependency on the class structure and power relations in society and thus on the relative weakness of forces favoring the development of participation schemes, and (2) the limitations of the ability of state elites to simply legislate participation schemes as vehicles for the promotion of their overall political project.
In contrast to West Europe where the principal driving forces behind workers’ participation have been unions and labor parties,1 the origins of participation schemes in the dependent capitalist societies of Latin America and the Caribbean are mostly to be found in the initiative of state elites with a reformist political project, whose coming to power was not primarily due to union support. The class structure (i.e., the small size of the industrial working class and the large pools of urban and rural surplus labor) and the industrial structure (i.e., the large number of small enterprises) have tended to prevent unions from acquiring sufficient organizational strength to be the major promoters of workers’ participation. The unions have been unable to wrest participation rights directly from employers or to provide a sufficient political support base to elect governments with the mandate to legislate such rights on their behalf. Thus the nature of participation schemes has been shaped by the governments’ overall political projects, and the development and consolidation of the schemes have been largely dependent on the governments’ strength and capacity to implement their reformist projects as a whole. And this capacity has been limited by the constraints of dependency.
Governments committed to reformist political projects have promoted workers’ participation schemes for a variety of reasons. First, governments have done so for ideological reasons. Participation schemes are important elements in two types of reform ideologies, the democratic socialist one and that promoted by the progressive wings of Christian Democratic parties. Progressive Christian Democratic doctrine, with its roots in Catholic social thinking, is not opposed to private ownership in principle, but it emphasizes social responsibility of employers, integration of workers into the enterprise, and some notion of social justice. It also advocates the creation of intermediary institutions between the individual and the state in order to facilitate cooperation among human beings as members of the society and to provide opportunities for the full development of human abilities.2 Thus the concept of workers’ participation in decision making in enterprises and co-ops fits into Christian Democratic inspired reformism as well as democratic socialism. It conforms to the goals of equity, participation, and decentralization, which are central to both ideologies, although to varying degrees. Second, the traditional importance of the role of the state in these societies has served as a facilitating factor, as have other reform policies. The state in Latin America has traditionally played a very strong role in all aspects of labor relations,3 which suggests in a quite obvious way the option of reshaping these relationships in a participatory direction through governmental action. Furthermore, land reform, a high-priority item on the agenda of any government with a serious reform commitment in Latin America and the Caribbean, has offered the option of establishing cooperatives on expropriated estates, where the need to maintain economies of scale and/or considerations of equity have ruled out subdivisions of the lands. Third, state elites have frequently regarded participation schemes as excellent vehicles for social transformation, insofar as they would promote egalitarian, solidaristic, and participatory attitudes and behavior among their members. These attitudes and behavior would constitute the essential base for active popular support for the larger process of social transformation and for the government initiating and implementing this process.
However, experience indicates that even in periods of strength, reformist governments cannot simply legislate the establishment of participatory forms of organization of production and rely on them to function as carriers of transformation. Rather, as the following comparative analysis of initiatives for workers’ participation in Jamaica, Chile, and Peru will show, such reforms are fragile creations indeed and cannot run ahead of the overall process of transformation in the society. In fact, they can even have counterproductive effects on the overall process of change in the desired direction. Besides unity of the state elite, a sustained effort at implementation, and bureaucratic capacity to carry the implementation through, reactions of organized forces (particularly unions and political parties) at the enterprise and the national level are important.
The structure of the design itself has some importance, although the same design can have different effects depending on the involvement of organized forces. Designs that emphasize the experience of direct participation in decision making rather than simply in election of representatives have a greater potential to generate involvement of workers and support for the larger process of change. Furthermore, channels for communication and participation at higher levels are crucial for linking the members of participatory enterprises and co-ops to one another and to the government, and for involving them in planning and policy making in the process of social transformation.
Ultimately, the consolidation of participatory forms of organization of production depends on the governments’ ability to maintain a degree of stability in the macroeconomic situation, since economic crisis conditions weaken reformist governments and parties as well as unions, and thus the crucial forces supporting participatory schemes. The tenure of reformist governments is particularly susceptible to the repercussions from austerity policies imposed by the International Monetary Fund (MF) in balance-of-payments crises. Furthermore, even governments committed to participation are likely to abandon promotion of such schemes under pressures from the IMF, particularly its insistence on policies designed to cultivate business confidence. The layoffs and drastic deterioration of real wages, which invariably result from IMF stabilization policies, absorb labor’s attention and relegate the defense of participation schemes to secondary importance. Thus in order to understand the origins, development, and effects of workers’ participation and self-management schemes, one has to understand the political base and the political project of the government and the constraints on the government resulting from the structures of a dependent economy and society.
The Political Base and Project of the Governments
Jamaica
Participatory reforms were promoted by the People’s National Party (PNP) government of Michael Manley, which came to power in 1972.4 The PNP in 1972 was a largely nonideological, middle-class dominated party with cross-class electoral support. In the 1972 election 52 percent of the unemployed and unskilled, 61 percent of manual wage labor, 75 percent of white collar wage labor, and 60 percent of business, managerial, and high-income professional people voted for the PNP.5 Despite its mass party structure, there was little grassroots involvement; lower-class followers were tied to the party through patronage.6 Like its rival, the Jamaica Labour Party (JLP), the PNP had a union affiliated with the party, which provided help in election campaigns but was not the decisive support base. The PNP-affiliated National Workers Union (NWU) and the JLP-affiliated Bustamente Industrial Trade Union (BITU) had an exclusively economistic orientation and were not the source of major policy initiatives of the parties when in government. The union leadership in these two dominant blanket unions, as well as in several smaller unions, was predominantly of middle-class background and co-opted from the outside. Union leaders that had risen through the ranks were extremely rare, which further reduced the autonomous strength of the union movement.
Even before 1974, when the PNP officially revived its socialist heritage of the 1940s and declared its commitment to the pursuit of a democratic socialist development model, the government started to implement a set of policies consistent with such a model. These policies included state sector expansion, reduction of dependency through trade diversification, increased domestic food production, a renegotiation of relationships to the transnational bauxite-aluminum corporations, redistributive fiscal and wage policies, social and cultural policies aimed at inclusion of the lower classes, and a nonaligned foreign policy. By the 1976 elections these policies, together with the PNP’s rhetorical style and close relations to Cuba, had caused a trend toward class polarization and political realignment. The bourgeoisie had turned against the government virtually in its entirety, and the PNP suffered heavy losses in the business, managerial, and professional group as a whole (down from 60 percent PNP in 1972 to 20 percent in 1976) and among the white-collar employees (from 75 percent to 57 percent), but it was able to offset these losses with gains among blue-collar workers (up from 61 percent in 1972 to 72 percent in 1976) and the unemployed and unskilled (from 52 percent to 60 percent).7
By the end of 1976 the government found itself confronting a severe balance-of-payments crisis. Jamaica’s traditional trade deficit was aggravated by declining export volumes and prices in 1975 and 1976. Capital flight as well as a press campaign in the United States that negatively affected tourism further contributed to the balance-of-payments pressures. Thus in its second term, the government had to accept IMF agreements, the second of which was extremely stringent. The resulting rollback of living standards and deep recession rendered the population susceptible to a vicious delegitimization campaign of the opposition and led to a massive defeat of the PNP in the 1980 election, with 41 percent of the vote against the JLP’s 59 percent share.
Chile
Workers’ participation was introduced by Salvador Allende’s Unidad Popular (UP) government during its tenure in office from 1970 to 1973. The UP was a coalition with an explicit socialist ideology and a strong union base, but it was also dependent on cross-class electoral support. A 1970 survey in greater Santiago showed that Allende received 60 percent of his support from industrial workers, 10 percent from those employed in personal services, 17 percent from office and sales employees, and 14 percent from professional, managerial, and entrepreneurial groups.8 Despite mass party structures and the dominance of ideological politics at the national level, grassroots politics at the local level had a heavily clientelistic character as well.9 Unions in Chile were clearly more politicized than in Jamaica; union leaders had a stronger ideological outlook, and the political education of the base was more developed.10 This was partly a result of the Labor Code of 1924, which had made all labor federations illegal and thus virtually forced the unions to align themselves with prolabor political parties in order to be able to generate collective action on a larger scale than the enterprise. Within the Central Unica de Trabajadores (CUT), which had been formed in 1953, the unions close to the UP parties were dominant, but the unions close to the Christian Democrats received 27 percent of the vote in the 1972 elections to CUT,11 and they were very strong in the rural sector. Yet despite their strong political ties, the orientation of Chilean unions was also predominantly economistic in the sense of putting direct material benefits of members above the struggle for socioeconomic transformation.
From its accession to power, the UP embarked on its path of democratic socialist transformation in a much more radical way and at a much faster pace than the PNP ever did. More enterprises were nationalized, large agricultural estates expropriated, and the wage/price policies effected a more rapid and substantial increase in the buying power of the lower classes. The effects of these policies, together with deliberate attempts of the internal and external opposition to damage the economy, resulted in severe inflationary and balance-of-payments pressures and in shortages and disruptions in production. These economic dislocations in turn contributed to class polarization and the growth of the militant disloyal opposition and popular countermobilization in support of the government. The resulting threat to the economy and to public order, reinforced by growing civilian calls for military action and by U.S. encouragement of such action, shifted the internal balance of forces in the military from the constitutionalists to the interventionists, preparing the way for the 1973 coup.
Peru
Various forms of participation were introduced by the Peruvian Revolutionary Government of the Armed Forces under President Velasco, which seized power in 1968.12 The military’s main concern was with integral security, which they perceived to be threatened by the structures of the dependent economy and exploitative society and by the weakness of the civilian government. Thus they embarked upon a set of structural changes in economy and society that were designed to bring about economic strength and national integration, the prerequisites for integral security. These changes included reduction of dependence, expansion of the state sector, land reform, social programs for the urban lower classes, support for popular organization under tutelage of the state, and redistributive and participatory reforms for labor.13 To the extent that members of the military government were ideological, the majority held some variety of communitarian ideas, highly averse to the idea of class struggle, and they hoped that the reforms would weaken class-based organizations. A few younger officers close to Velasco and some important civilian advisers had a socialist conception of the desirable social order, however, and were able to exert some influence on the reform process in its first six years.14
Initially the government enjoyed a high degree of autonomy from civil society, but by about 1973 opposition from the dominant classes had strengthened and started to narrow the government’s room for action.15 At the same time, pressures from popular forces increased. The Peruvian labor movement as of the late 1960s was divided into two major confederations with close links to Apra, Peru’s only mass party, and to the Communist Party; there also were a small Christian Democratic confederation and several independent radical unions. The unions close to Apra and the radical unions opposed the military government, whereas those close to the Communist Party supported its reform policies. Thus the government sponsored its own central union organization to compete with the other confederations. This, together with the effects of other reform policies, caused a dramatic increase in unionization; the number of unions doubled between 1968 and 1975, with the Communist-linked confederation remaining the strongest.16 The result was a heightened level of mobilization capacity of the unions and increasing militancy in strike action.
By 1975 severe balance-of-payments problems resulting from a high debt burden and declining export volumes and prices called for the beginning of ever more stringent austerity policies. The coup replacing Velasco with Morales Bermudez in 1975 marked the transition to the Second Phase of the process, which (despite official proclamations to the contrary) involved not only a stop but a partial rollback of the reform process. Under the stabilization programs negotiated with creditor banks in 1976 and with the IMF from 1977 on, opposition to the government from all social classes rapidly mounted, and in 1978 the military initiated the process of withdrawal from government with elections to a Constituent Assembly, which ended in the presidential and congressional elections of 1980.
The Role of Participation in the Reform Project
Jamaica
In the conception of Michael Manley, who decisively shaped the PNP’s political project, workers’ participation in decision making in enterprises was one institutional form contributing to the widest possible participation of the mass of the Jamaican people in the process of transformation toward a more egalitarian society, overcoming the stark class and race divisions characterizing Jamaica.17 This process was to redistribute material resources as well as power and thus required increased participation of the lower classes in politics, in the process of production and the benefits from production, and in the social and cultural life of Jamaica. In the political arena, the PNP attempted to achieve this by turning the party into a real mass party, emphasizing political education and promoting grassroots involvement in the party’s policy-making bodies. In the cultural arena the government launched a variety of initiatives to stimulate and put greater value on indigenous cultural expressions. In the economic arena it emphasized job creation through the expanded state sector, along with the establishment of cooperatives on sugar estates owned by the government, strengthening of workers’ rights vis-a-vis employers, and plans for workers’ participation in decision making in public and private enterprises. Higher levels of popular participation, organization, and assertiveness in all these areas were to bring about a shift in the balance of power in society, thus facilitating and reinforcing the redistribution of material resources.
The establishment of cooperatives on the sugar estates, besides transferring power and resources to the sugar workers, had a great symbolic significance, as it eliminated one of the most visible legacies of slave society and the colonial economy. A reform of labor relations in the private sector became important because the mixed economy was to be a permanent feature of the Jamaican democratic socialist model. In many enterprises labor relations were characterized by authoritarianism and even disdain on the part of employers, and hostility and a propensity to spontaneous militancy on the part of workers.18 Arrangements for workers to participate in decision making in the enterprise were to put the two sides on a more equal footing and to establish relationships of mutual respect and cooperation. Workers’ participation, then, was a goal in itself as well as an element in the process of transformation, intended to shift the power balance in enterprises, thus contributing to shifts in the society at large, and to generate attitudes of solidarity among workers and cooperation between employers and workers.
Chile
For the UP, promotion of popular participation in the economic, political, and cultural spheres was to perform the same mobilizing and transformative functions as for the PNP. However, the UP’s commitment to a faster and more far-reaching process of transformation resulted in some important differences in approach. Since the social area, consisting of fully and majority state-owned as well as state-administered enterprises,19 was to rapidly become the dominant sector in the Chilean economy, workers’ participation schemes were only introduced there, not in private enterprises. In the rural sector, on the expropriated land of large private estates, the UP attempted to establish more inclusive forms of agrarian reform enterprises than traditional co-ops. The government was hampered in these attempts, however, by its inability to change the reform legislation passed by the Christian Democratic government of Eduardo Frei (1964–70).20
As on many other issues, there were disagreements among the UP coalition parties on the importance of workers’ participation in the enterprises in the social area. For most of them, workers’ participation was a goal worth pursuing in itself because of its democratic and egalitarian qualities, as well as an instrument to mobilize workers and strengthen the popular base for the construction of a democratic socialist society. The Communist Party, in contrast, advocated a more statist model of economic organization as well as a more controlled process of popular mobilization.
Peru
The approach of the majority of the Peruvian military government to popular participation emphasized incorporation of peasants, workers, and the urban poor into participatory institutions and into organizations linked to the state. Redistribution of resources and transfer of certain decision-making rights to popular classes through the establishment of agrarian producer co-ops, urban squatter organizations, and workers’ participation schemes were to be guided from above and to bypass existing class-based organizations in order to weaken them. This, in turn, would reduce the potential for class struggle at the bottom. The land reform, which eliminated the economic power base of the old oligarchy, would also reduce this potential at the top and thus facilitate the achievement of national integration.
Workers’ participation in private and state enterprises was designed with both political and economic goals in mind. By reconciling interests between employers and employees and by increasing investment and productivity, it was to strengthen the enterprises and the national economy; by making unions superfluous, it was to weaken them both at the enterprise and at the national level. Officially, the government denied that its workers’ participation reform was intended to weaken unions, but it did insist that the reform was to overcome antagonisms between labor and capital. Unofficially, the government clearly hoped that its reforms would constitute a noncoercive tool for the weakening of unions and would thus be compatible with its policy of cooperation with existing unions, which it pursued to reduce labor militancy.
However, the radical faction in the government had a different conception of the political project and the role of popular participation in general and workers’ participation in particular. They saw the reforms as tools to strengthen popular organization and mobilization, thus modifying the balance of power in society in favor of the popular classes and pushing the government’s reform course to the left. They regarded workers’ participation in private enterprises as a step in a gradual movement toward socialization and full workers’ control. They saw existing popular organizations that had the same goals as allies in this process, rather than as competitors, and they collaborated with them in practice. By 1974 it became clear that the radical faction was on the decline in the internal power struggle. Yet up to that point its activities had contributed to real gains in strength of popular organizations, as well as to a hardening of opposition of the bourgeoisie, through the introduction of ambiguities into the reform designs and through the encouragement of and assistance to popular organizations pressuring for more far-reaching reforms.
Designs of Workers’ Participation Schemes
Jamaica
In 1975 the PNP government appointed a commission composed of experts and representatives from the private sector, labor, and the government bureaucracy to study the issue of workers’ participation and come up with suggestions for Jamaica. The commission looked at experiences in other countries and carefully studied the solicited submissions from unions and employers. In 1976 it presented to the Cabinet a report that suggested the establishment of workers’ participation schemes in both public and private enterprises employing more than 40 workers. Works councils composed of half worker and half management representatives were to be in charge of personnel and social affairs. In enterprises with more than 100 workers, an Economic Committee was to be consulted on all major economic developments in the enterprise and was to have the right to full financial information. The unions were to be included insofar as some of the worker representatives would be elected by the workforce and some appointed by the unions. The commission also recommended worker representation on the board of directors, one-half in public sector enterprises and one-third in the private sector. Finally, the commission emphasized that after a period of careful study of various pilot projects, legislation would be needed on the subject, since one could not rely on voluntary action on the part of employers.21
Manley’s budget speech in May 1977 contained outlines for the establishment of participation schemes that followed the commission’s recommendations, but with two important modifications.22 First, the position and functions of the unions were differentiated more explicitly from those of the works councils, and the commission’s recommendation that the unions democratize their own operations was omitted. Questions of remuneration, working hours, and individual worker grievances were to remain the exclusive responsibility of the trade unions. Within the guidelines, detailed structures for participation would be the subject of collective agreements between unions and employers. Second, the number of worker representatives on the boards of directors was preliminarily limited to two seats in both private and public sector enterprises, to be changed after a revision of the Company Law.
The UP government, in collaboration with CUT, elaborated a set of guidelines for workers’ participation schemes in enterprises belonging to the social area.23 The guidelines provided for an administrative council as highest authority in the enterprise, composed of five worker representatives, five state representatives, and a state-appointed administrator. The worker representatives were elected by a general assembly that was to meet monthly and was charged with supervising the participation of various groups in the enterprise. At the level of production departments, section assemblies were to meet monthly, elect representatives to a production committee, and oversee operations in their section. The presidents of all the production committees in an enterprise belonged to a coordinating committee, which was the main channel for communication with the administrative council. The scheme, then, combined opportunities for direct participation in decisions about matters of daily concern on the shop floor with participation of worker representatives in decisions at the top enterprise level. The unions were assigned an important role in the participation scheme insofar as the union commission, composed of the leaders of all the unions in an enterprise, was to preside over the general assembly and participate in the coordinating committee.24 Unions were also responsible for educating workers about the participation schemes. However, in order to maintain an organizational differentiation between the unions and the workers’ committees and assemblies, union leaders themselves could not run for election to the administrative councils or the production committees.
Peru
Workers’ participation in Peru was introduced by legislation in 1970 for all industrial manufacturing enterprises with six or more workers or roughly $250,000 gross annual income. The next year the legislation was extended to the fishing, mining, and telecommunications sectors, covering public as well as private enterprises. It provided for the establishment of an Industrial Community (CI) in every enterprise, composed of all employees from janitor to manager, except those with a share in ownership. The enterprise was required to give 25 percent of net profits before taxes to the CI every year, 10 percent in cash to individual employees, and 15 percent to the CI as a collectivity in the form of shares newly issued or sold to the CI by existing shareholders. Initially, the CI was entitled to one representative on the board of directors of the enterprise, and its representation was to grow in accordance with its share in ownership. Ownership by the CI was to grow up to 50 percent, at which point the CI and the owners would jointly manage the enterprise. The exact arrangements for that point, in particular the question of how to solve deadlocks, were left unspecified in the law and in official interpretations, as a result of diverging conceptions of the whole political project by the different factions in the government. An early draft of the legislation supported by the radical faction had actually not set the 50 percent limit and had thus contained the potential for private enterprises to gradually come under majority worker ownership and management.
Under the CI as legislated, workers were not given any participation rights in decision making in the enterprise. The general assembly was in charge only of electing its officers and representative(s) to the board of directors, of deciding what to do with the collective income of the CI from its shares, and seeking ways to improve enterprise operations in collaboration with management. The general assembly was specifically barred from dealing with any personnel issues. In accordance with the intention of the majority in the government to weaken existing unions, union officials were barred from holding office in the CI or acting as representatives of the CI in dealings with employers or the state bureaucracy.
Clearly the CI legislation was in no way satisfactory to the radical faction in the government. As an alternative, they promoted the project of a Social Property Sector, to be composed of collectively owned (by all the workers in the sector) and fully worker self-managed enterprises. After consultation with many groups and advisers familiar with worker self-management schemes around the world, legislation establishing this sector was decreed in 1974.25
The Functioning of Workers’ Participation Schemes
Jamaica
The participation schemes in Jamaica, never got beyond the planning stage except for a few experiments in public sector enterprises. The main reasons for this were the predominantly negative reactions of the unions to the proposals, followed by the government’s loss of political initiative and room to maneuver because of the economic crisis. As expected, employers strongly objected to the idea, and their leverage vis-à-vis the government was strengthened by the IMF’s involvement beginning in 1977.
The unions’ reaction was motivated in part by partisan political reasons (in the case of the BITU), and in part it was a result of their rather authoritarian structure and their lack of ideological vision and education. Officially only the Union of Technical, Administrative and Supervisory Personnel (UTASP) offered opposition, forbidding any of its delegates (i.e., shop stewards) to participate in training schemes.26 All the other unions paid lip service to the goal of workers’ participation. Unofficially, however, the unions were concerned about a possible erosion of their power by losing influence over their members at the workplace. Relationships between rank-and-file members and the middle- and top-level leadership in many unions have been neither close nor based on strong trust, which is one of the factors underlying the phenomenon of frequent wildcat strikes in Jamaica.27 Thus the availability of alternative channels for the direct articulation and defense of workers’ interests might well have weakened the position of these outside leaders. The BITU, true to its particularly undemocratic and paternalistic tradition,28 cautioned extensively about the lack of education and preparation of workers and emphasized the need for extensive training prior to any significant legislative initiatives in the area. The NWU and the Jamaica Association of Local Government Officers (JALGO) were the only major unions supporting the concept, but for the NWU it was just one among many goals and not one with high priority. The University and Allied Workers’ Union (UAWU), headed by the general secretary of the communist Workers’ Party of Jamaica, also supported the project but with the clear implication that participation was only a step toward full workers’ control. As a result of their apprehensions and hesitations, the unions (other than JALGO and the UAWU) served as brakes on the process, rather than as pressure groups mobilizing workers in support of it.
Employers were virtually unanimously opposed to the introduction of workers’ participation, particularly to any legislation on the issue. Reactions ranged from mild and pragmatically argued to quite rabid and principled opposition. An example of the former is the statement submitted by the Grace Kennedy Corporation to the commission set up by the government.29 The company cautioned about the problem of “translating the worthy idea of worker participation into an effective operating reality,” and it pointed out that it already had initiated a number of programs for active involvement of the workforce, such as group discussions held by supervisors to solicit and “discuss plans and ideas for completing assigned task [sic]” and others. The All-Island Cane Farmers Association’s submission provides an example not only of the more strident opposition to workers’ participation but also of the authoritarian and disdainful attitude of a large portion of Jamaican employers. The association explained its opposition to workers’ participation with an analogy to military organization. The worker was regarded as equivalent to a foot soldier and management to the “commanding sector” of the army; given the limited training of the footsoldier-workers, they would naturally be ill-equipped to give advice on operations outside of their ambit of operations; at most, they might make suggestions as to the techniques that would make their tasks easier and more productive and pleasant. Reynolds, the Jamaican subsidiary of a U.S. aluminum company, categorically objected to workers’ participation on the grounds that “we cannot accept the right of a worker to decision-making that belongs to ownership.” Finally, the Citrus Company of Jamaica argued that the concept was ill defined and warned that “producer democracy which is not compatible with consumer freedom and entrepreneurial rewards is doomed to create fertile grounds for a new tyranny.”
In 1977 the government set up a Worker Participation Unit in the Ministry of Labor that was in charge of organizing participation schemes, studying them, and making suggestions for improvements where needed. However, within the following years, the impetus behind the project largely dissipated. In February 1978 eight of fifteen field organizers trained for the Worker Participation Unit were laid off, and in June 1978 new guidelines concerning participation in the public sector were issued, along with the universal restriction that only experimental schemes were to be set up, and on a purely voluntary basis.
The layoff of these field organizers was an immediate result of strong union objections to the personalities and political inclinations of the people chosen and trained. But the scaledown of the project as a whole was largely a result of the economic crisis, which absorbed the energies of the top-level political directorate. This meant that the only force that could have overcome union as well as employer opposition was otherwise occupied. Even if there had been more union support for workers’ participation, the 1978 agreement with the IMF, with its premium on the cultivation of private sector confidence, would have made a compulsory introduction of workers’ participation against the strong employer opposition virtually impossible.
Thus the only two participation schemes with any significance that were ever established were in the public sector, at the Jamaica Broadcasting Corporation and Jamintel. Some boards of the utilities moved in the direction of accepting worker representatives. In the government-owned sugar factories, works councils were set up for joint consultation at the lowest level, in questions of working conditions and social services. In contrast, not a single participation scheme approximating the guidelines was experimented with in the private sector.
Chile
In Chile the speed of implementation and the successful development and functioning of participation schemes varied considerably. There was no central administrative apparatus exercising control over state enterprises that was capable of enforcing implementation of the guidelines. Therefore the establishment and promotion of participation schemes were dependent on local initiatives from administrators, union leaders, and party activists. The unions showed different reactions to the guidelines. Some of them, in a similar fashion to Jamaican unions, manifested considerable reluctance because they feared losing influence; bureaucratic and paternalistic behavior existed among parts of the Chilean labor movement, just as in Jamaica.30 Furthermore, political splits in the labor movement resulting in union rivalry and partisan political competition within enterprises obstructed the development of the participation schemes in many cases. However, in contrast to Jamaica, there were more ideologically motivated unions that were supporting workers’ participation, seeing it as part of the larger process of transformation. In addition, the UP parties themselves had more ideologically committed cadres at local levels, including in the factories, that were able to promote the participation schemes, bypassing obstructionist union leaders where necessary.
By June 1972 some type of participation scheme was in operation in 76 percent of the enterprises in the social area.31 The crucial variables determining the degree of actual involvement of workers in decision making were the degree of labor mobilization and consciousness, the political ideology and attitude of worker leaders toward participation, and the composition of political party support in the enterprise.32 Where workers had an experience of struggle, for instance in strikes and militancy before or during the transfer of the enterprise into the social area, or where unions and political parties had reached workers with political education about the process of social transformation and the workers’ role in this process, workers had a higher propensity to actively participate in decision making and in supervising the implementation of decisions. Where union and sectional leaders were supportive of participation and of the wider process of transformation, the schemes were also more intensely used.
In contrast, where Christian Democratic influences were strong among leaders as well as workers, the levels of participation were lower.33 This was also true for enterprises with strong Communist influence. Though the latter was less a matter of partisan political motives than in the case of the Christian Democrats, the Communist Party was only lukewarm toward participation, because it favored a more centralized, state-directed model of organization in the social area and was more skeptical toward popular mobilization at the national level. Where worker involvement and leadership support was strong, however, the government-appointed administrator and members of the administrative council tended to be receptive, disseminate information, and collaborate with the various committees, which in turn increased the importance of these committees and further heightened the level of participation. In the case of reluctant administrators, the workers had the opportunity to mobilize pressure and enlist the help of those sectors in the government committed to workers’ participation to get the administrator replaced.
Where actual workers’ participation in formulation, execution, and evaluation of decisions at the various levels in the enterprise was high, it had a favorable impact on enterprise performance as well as on workers’ attitudes.34 Since the elimination of the traditional hierarchical system of authority was accompanied by the creation of a new democratic, participatory system of authority, peer pressure came to substitute for the previous disciplinary powers of supervisors. Since the new work experience under these participatory structures increased workers’ sense of dignity and responsibility, work motivation and effort increased. The result was lower absenteeism, a decrease in strikes, and an increase in innovations in the enterprise and productivity. Furthermore, enterprises with higher participation levels also tended to have higher investment ratios.35
The effects of high participation levels on egalitarian and solidaristic attitudes and behavior also manifested themselves in more egalitarian and collective structures of remuneration. Wage differentials between different categories of employees were reduced, and individual piece rates were replaced by collective incentive systems. There was also strong emphasis on an improvement of collective social services, such as medical facilities, day-care centers, and recreational facilities.36 In short, in enterprises with a dominant political and union presence supportive of the process of transformation, workers were mobilized into utilizing the new channels for collective decision making, and this experience in turn fostered egalitarian and solidaristic behavior.
Peru
Union reaction to the participation reform in Peru was also initially cautious—not in the least surprising, given the implicit co-optative intention of the reform. However, experienced union leaders at the enterprise and at higher levels soon realized that the CI could actually strengthen their position if they became actively involved in defending the rights of the workers as members of the CI. In many cases much of this activity had to be unofficial because of the legal exclusion of union leaders from CI positions and from the handling of CI affairs, but in other cases leaders resigned from their union positions to run for CI positions.37 Employer opposition was virtually universal and intense, and all kinds of evasive maneuvers were used to foil the impact of the legislation. First, employers attempted to delay the establishment of the CIs, and where the workforce was unorganized, the CI was frequently not established at all until the Ministry of Industry launched an enforcement drive. Where the workforce was organized and informed about the legislation, however, the union often became the driving force behind the establishment of the CI.
Once the CI was established, serious conflicts erupted as employers started to use evasion tactics and workers attempted to assert their rights. For instance, accounting tricks were used to reduce the amount of declared profits, new enterprises and partnerships were created to which profits were channeled, information was withheld from the CI, and the CI representatives were ridiculed at board meetings. Naturally, the workers with most experience in confronting employers and enlisting the help of the state bureaucracy, namely union officials, played the leading role in the defense of CI rights, notwithstanding their formal exclusion from CI affairs. The only formal recourse for the CI to insist on its rightful share of profits and on its other rights in the face of employer intransigence was to claim to the Ministry of Industry, which was in charge of supervising the implementation of the legislation. However, the ministry had neither the bureaucratic capacity to perform this function on its own initiative nor the sanctioning power to force enterprises to comply with the law where CI complaints were followed up on and verified. Thus it took strong direct worker pressure on the enterprise and on the ministry to get involved in forcing recalcitrant employers to grant the benefits to the CI. This, of course, only served to strengthen the position of the unions in the unionized enterprises. In nonunionized enterprises the experience of conflict over the CI legislation, combined with the demonstration effect from CIs in unionized enterprises that successfully defended their rights, led to the formation of new unions.
The Cl, then, did not redistribute decision-making rights, nor did it smooth labor relations; on the contrary, it intensified the conflict of interest between labor and capital.38 Accordingly, it did not result in any attitudinal or behavioral changes among the workers regarding work effort, as the conflict over the distribution of the results of work efforts became highly visible and there was no change in their daily work experience. Participation for rank-and-file workers was restricted to attendance at the twice-yearly general assembly of the CI and the election of a council and a president as executive organs of the CI. The main activities of the CI centered on the supervision and disposition of its collective financial assets. The CI lacked the right to participate in managerial decisions at any level but the board of directors, where its representatives could make suggestions, but acceptance of these suggestions was left to the discretion of the board and management. Furthermore, the CI was officially barred from dealing with any labor relations questions, which remained the preserve of unions. Thus there was no direct experience of participation in decision making about work organization that could have changed workers’ attitudes, but the CI did strengthen solidaristic attitudes indirectly via the experience of highly visible conflicts with the employers, which reinforced traditional union solidarity.
There were exceptions to the general pattern of conflict. In some highly profitable enterprises with a relatively small workforce in which management complied with the legislation, the CI did have the desired co-optative effects.39 The profits distributed to the workforce were very large compared with prevailing remuneration levels, and thus the workforce became concerned with maximizing enterprise profits. This entailed not only labor peace but also an effort to keep the workforce small by hiring temporary workers rather than full-time permanent workers to replace those leaving. In other words, a spirit of group egoism emerged in these enterprises, putting group interests and solidarity above class interests and solidarity.
Effects on Labor’s Strength and Support for the Government
Jamaica
Since the project never got off the ground, the strength of labor was not affected one way or the other, nor did the government gain or lose much labor support because of its initiative in this area. At best, one can speculate that it managed to increase its support base slightly among the members of JALGO, while at worst it might have heightened suspicion among members of other unions mediated by their leaders’ hostility toward the project.
Ironically, workers’ participation had a highly indirect negative effect on support for the government. In one of the very few cases where participation developed to a certain extent, at the Jamaica Broadcasting Corporation, though on a largely informal experimental basis, it strengthened the influence and visibility of the UAWU and thus indirectly of the communist Workers’ Party of Jamaica. Through participation in hiring decisions, employees with UAWU ties managed to significantly influence the composition of the newsroom staff and thus the presentation of news and special reports. The Workers’ Party took a position of “critical support” for the government, pursuing a strategy of “collaboration of all progressive force.” Thus the UAWU’s gains could have been, at best, a mixed blessing for the government. In reality its influence on the newsroom of the public broadcasting station, which in Jamaica has traditionally been perceived as the government’s mouthpiece, probably did more damage than good to the government’s credibility and wider popular support in 1980 because of the radical slant given to the news presentations and analyses.
In terms of opposition among employers, the workers’ participation project contributed at most marginally to their alienation. This is not to say that it would not have provoked strong opposition had it been implemented; but since it was not, it never became nearly as important as other factors in generating opposition against the government. None of the business leaders interviewed in 1982 even mentioned the project when asked about the reasons why they or other members of the business community had turned against the government.40 Their attention in 1976, when the commission report on worker participation was presented, was absorbed by the rapidly deteriorating economic situation and by the heightened political polarization and mobilization visible in the election campaign. By 1977, when Manley presented the guidelines, there was little support left to lose for the government among the bourgeoisie. With very few exceptions, the business community had turned to strong opposition against the government by the 1976 election. Furthermore, the business community never felt immediately threatened by the project because they (correctly) perceived that the project was not a high priority item on the government’s agenda.
Chile
By strengthening solidarity among the workers, the successfully functioning participation schemes in Chile also strengthened the mobilization capacity of labor. The demands for participation at higher levels of economic policy making from the participants in these schemes also indicate a heightened level of understanding of and support for the larger social transformation project. One can reasonably conclude that this support translated into support for the government carrying out the project. However, there is a question as to the importance of the independent contribution of the participatory experience to union solidarity and support for democratic socialism. As Espinosa and Zimbalist show,41 experience in solidaristic struggles and ideological orientations of workers and their leaders were the factors determining the successful functioning of the participation schemes to begin with. Thus one should conclude that the participation schemes had a reinforcing effect on labor strength and governmental support where these factors were present already, rather than generating them where they were not.
Since the participation schemes did not directly affect private employers, this project per se did not involve high costs to the government in the form of increased business opposition. It was the process of incorporation of enterprises into the social area itself, preceding the introduction of workers’ participation, that fundamentally threatened the bourgeoisie. However, the workers’ participation project did have an indirect effect on business opposition to the UP government, insofar as it reinforced labor solidarity and militancy and thus sharpened the perception of threat on the part of the bourgeoisie.
Peru
The introduction of the CI, by heightening the visibility of the conflict between labor and capital and of the utility of unions in protecting labor’s interests, contributed directly to the increase in unionization and thus the growing strength of the labor movement. The government’s reactions to these developments further reinforced labor mobilization and ultimately militancy. The CI provided not only the motivation but also the organizational shelter for establishing unions at the level of industrial establishments.42 The CI assemblies brought workers together, thus reducing fears of individual reprisals from employers for signing membership lists. Such fears were further reduced and unionization efforts facilitated by the Law on Stability of Employment, decreed by the government in 1970 to thwart employer opposition to the CI. Employers threatened mass firings and the government responded with this law, which stated that after an initial trial period of three months, an employee could be fired only for serious misbehavior.
The experience with the limitations of the CI also gave rise to demands for an expansion of participation rights at the enterprise level and at higher levels of economic policy making. To put some collective pressure behind these demands, as well as behind the efforts to enforce the CI rights already given, some CIs in enterprises with a strong union tradition initiated the formation of a national organization linking individual CIs together. These efforts were supported by SINAMOS, the government’s agency for national mobilization, and they culminated in a national congress of CIs where—contrary to the official position of SINAMOS—quite radical resolutions were passed that called for transformation in the direction of full workers’ control.43 After a change in its top leadership in 1974, SINAMOS took a more interventionist and decidedly more conservative position, and it managed to effect a split in the national organization of CIs, bringing one faction closely in line with government policies. However, the other faction, around the CIs that had originally promoted the organization, remained the more influential and visible one, and the actions of SINAMOS only reinforced the determination of the members of this faction to act in a collective fashion.
Similar developments occurred in the union movement. The government decided to set up a new central union organization sponsored by SINAMOS to compete with the three existing union confederations, in the hopes that it would eventually eclipse the others and prevent unwanted labor militancy. Because of the manipulative tactics used in setting up the new confederation (such as co-optation and intimidation of existing unions into joining) and its obvious subservience to the government, it never made any inroads into the hold of the other confederations, particularly the one close to the Communist Party, on the key industrial sectors. Rather, the whole attempt strengthened solidarity among the existing unions and provoked militancy in defense against intimidation and co-optation attempts.
The CI, and related activities of SINAMOS, strengthened support for a process of social transformation and for the radical faction into the government, but not for the class-conciliation project advocated by the mainstream in the government. The resulting process of mobilization led to a significant increase in strike action, motivation for which was reinforced by the deteriorating economic conditions. The shape of strikes got shorter and larger, indicating the growing use of protest strikes, many of which were directed at the government as well as employers.44 With the onset of the Second Phase and its economic austerity policies, militant labor opposition against the government of Morales Bermudez mounted, and with the purge of the radical officers from the government in 1976, the last rallying point of support for the government was eliminated. Despite the government resorting to repressive measures, such as the selective declaration of states of emergency, the deterioration of real wages under the IMF policies continued to galvanize labor into militant action. The heightened capacity for solidaristic action manifested itself in Peru’s first successful national strike in 1977 and several others in the following years.
In contrast to the workers’ participation reforms in the other two countries, the CI was a major contributing factor in the opposition of the bourgeoisie to the government. Nationalization in Peru was directed predominantly at foreign capital and thus posed no real threat to the national bourgeoisie. Although the CI did not constitute a direct threat either, in the sense of a potential loss of control over the enterprise in the short or medium run, the uncertainty about the long run and the very idea of having to share ownership with the workers and having to accept worker representatives on the board was highly offensive to most employers. Accordingly, they not only attempted to circumvent the CI at the enterprise level, they also continued to pressure the government for a weakening of the legislation. The Law on Stability of Employment was the second major issue of contention, solidifying the determined opposition of the bourgeoisie against the government of the First Phase. The CI also had an indirect effect on bourgeois opposition by way of increasing labor mobilization and militancy, which the bourgeoisie blamed on government encouragement. During the Second Phase, then, under pressures from the bourgeoisie supported by the IMF, government policy shifted in a distinctively antilabor direction and the most opposed pieces of legislation were suspended or changed.
The Decline of the Workers’ Participation Project
Jamaica
The abandonment of the workers’ participation plans in Jamaica was clearly linked to the economic crisis. The crisis fully absorbed the attention of the government. Furthermore, the budgetary austerity imposed by the IMF greatly reduced the government’s capacity to pursue any of its reform policies. In the case of the participation project, austerity meant that financing for the “unproductive” activity of selecting and training new field organizers and implementing programs for worker education to prepare them for a participation in decision making on enterprise organization and operations would be obstructed. The IMF’s insistence on restoration of business confidence did not allow for any additional policies resolutely opposed by the business community.
Essentially, the austerity policies forced a near general arrest of the reform process, and the resulting drastic decline in Jamaican living standards ultimately brought about the decisive defeat of the government in the 1980 elections. Thus the economic crisis prevented the consolidation of the democratic socialist reform project. In order to understand this failure, the reasons for the balance-of-payments crisis of late 1976 need to be explained. They are to be found in the weakness of Jamaica’s dependent economy on the one hand and certain policy mistakes and omissions on the other hand. In the 1960s Jamaica ran a balance-of-trade deficit, financed by the inflow of investment into bauxite-alumina and tourism. When the investment cycle in these industries was completed in the early 1970s, the country was faced with an immediate severe balance-of-payments problem, because it was highly dependent on imports of all kinds, from food and energy to raw materials, capital, and consumer goods. This problem was then aggravated by the increases in oil prices as well as in prices of non-oil imports. The crisis was precipitated by the decline in bauxite-alumina and sugar exports in 1975-76, and by a simultaneous decline in tourism revenues caused by an adverse press campaign in the United States and the cessation of commercial bank lending to the government.45 The illegal flight of capital, which appears to have picked up considerably in 1975 and 1976, also contributed to the crisis.
Notwithstanding the importance of these results of dependency, however, part of the reason for the decline has to be sought in the government’s lack of an economic plan in accordance with its overall transformation project and in its consequent neglect of policies promoting a slow reorientation of the economy toward greater self-reliance and diversification of external economic relations.46 In the crisis situation of early 1977 an alternative, non-IMF emergency economic plan that contained such suggestions was elaborated. It emphasized promotion of agricultural production to reduce reliance on food and raw material imports and to create employment, establishment of Community Enterprise Organizations (a form of socially owned self-managed enterprises), support for small businesses, and the search for trade partners and sources of finance outside the traditional metropolitan channels.47 However, given the severity of the crisis at that point and the consequent dislocations in the traditional manufacturing sector resulting from the restriction on imports of industrial inputs envisaged by the plan, the government anticipated a strong political backlash, not only from the bourgeoisie but also from parts of the labor movement. Thus it decided not to take this risk and to accept an IMF package instead. Arguably, if this type of plan had been adopted earlier and some of the distributive expenditures in the more favorable economic circumstances of 1974, for instance, had been redirected toward such a plan, the blance-of-payments problem might have been alleviated, the implementation of the IMF dictates avoided, and the chances for success of the whole transformation process increased.
Chile
The reason for the demise of the workers’ participation project, of course, was the coup against Allende. The coup was triggered by the high degree of political polarization and intense mobilization on both sides, which in turn was partly a result of the severe deterioration of the economic situation.48 As in Jamaica, the economic deterioration had its roots in the vulnerability of Chile’s dependent economy, particularly the high import dependence on food, capital, and intermediate goods, the export concentration on copper, and the high foreign debt accumulated by previous governments. But the much faster pace of change pursued by the UP government, together with the stronger politically motivated internal and external pressures, rendered the foreign exchange crisis, the shortages, and the disruptions of production much more acute than in Jamaica. Moderation in the pace of change, in particular in the takeover of enterprises and in redistributive wage-price policies, could have alleviated the strains on the economy, and it could have opened the way for the political compromise necessary to stem the process of rapid polarization.49
Workers’ participation in Peru also fell victim to the economic crisis, insofar as the crisis aggravated internal splits in the government over the decision whether to adopt austerity policies in 1976. This forced decision resulted in the purge of the remaining radical officers from leading positions and a decisive shift to the right in the government’s composition and policies. The first package of severe austerity policies was negotiated with and implemented under the supervision of private banks, but by 1977 the banks insisted on an agreement between Peru and the IMF.50
The project of the Social Property Sector was the first casualty of austerity. There were simply no more funds made available for the execution of plans and already elaborated concrete projects for socially owned, worker self-managed enterprises. Accordingly, only a very small number of such enterprises ever started operating.51 The CI legislation was changed in 1977, with a new upper limit of 33 percent on the share of ownership and thus seats on the board of directors that the workers could attain. Furthermore, collective ownership by the CI was transformed into individual share ownership of its members. Also, the Law on Stability of Employment was suspended, to great acclaim from the bourgeoisie. As in Jamaica, the key emphasis under the IMF austerity programs was on business confidence, and the price for this confidence was the repeal of legislation that had strengthened the position of labor in the enterprise. The labor movement, despite its gains in mobilization capacity, was not strong enough to block these rollbacks of labor rights. Furthermore, the decline in real wages and the threat of unemployment were so strong that they were the central subjects of all protest action; the importance of the CI paled by comparison.
Also parallel to Jamaica, the economic crisis was caused by a combination of a long-term trend and short-term precipitating factors, both related to Peru’s dependent economy, and of policy mistakes. Peru’s major raw material exports, except for mining, were undergoing a secular decline in the 1960s and 1970s,52 causing a shortfall in foreign exchange revenues. Furthermore, beginning in 1973 the anchovy catch declined drastically, the 1975 world recession depressed mining exports, and in 1976 it became clear rather suddenly that the expected discoveries of commercially viable oil deposits in the jungle area would not materialize. This was particularly detrimental to Peru’s balance of payments, because in anticipation of the oil revenues, the government had borrowed heavily from commercial banks to finance ambitious capital-intensive development projects whose capacity to generate or at least save foreign exchange was low or nonexistent in the short and medium run.
To summarize, then, the decline of workers’ participation in the three cases was a result of the failure of the governments to consolidate their larger project of social transformation; a failure manifesting itself in either the fall of the government or drastic policy changes. In all three cases, this failure was closely linked to the economic crisis that either precipitated the fall of the government or forced it to implement IMF austerity policies. The economic crisis, in turn, was a result of dependency on the one hand and policy mistakes and omissions on the other hand. Problems with export production and prices combined with high import dependence for energy, food, and industrial inputs, and with a high accumulated foreign debt brought about the critical foreign-exchange shortages. In the case of Chile, the rapid redistribution through wage-price policies and state sector expenditure aggravated the shortages by greatly increasing demand for imports of food and industrial inputs. In Peru and Jamaica redistribution and increases in state sector expenditures, though still significant, were slower, but crucial mistakes were made in the financing and the pattern of expenditure. Both governments borrowed heavily from commercial banks, and neither one made a concerted effort to reorient the economy toward greater self-reliance or to channel resources into small-scale production geared toward a wider distribution of productive assets in the society. Thus neither government laid the basis for protecting its economy from severe disruptions resulting from the certain cut-off of external financing in case the government decided to reject IMF austerity policies.
Conclusion
The comparison of the different experiences with workers’ participation in Jamaica, Chile, and Peru showed how the conception of the participation schemes was shaped by the nature of the larger political projects of the governments, and how the schemes developed in accordance with the trajectory of the overall projects, namely with the governments’ (in)ability to strengthen their support base and consolidate their reform policies. Comparison established that the governments’ failure was closely linked to the economic crises, which not only resulted in a halt of all significant reforms but also critically weakened the governments’ support base and strengthened the militant opposition instead. Finally, comparison showed how the economic crises were largely due to a combination of constraints of dependency and inappropriate policies.
However, in further exploring the reasons for the inappropriate policies themselves, the economic crises, and the following rapid erosion of the governments’ support base, one has to look more closely at power relations in the society. The low initial strength of the political movements supporting the governments and their projects, and the insufficient progress in strengthening these movements directly, obstructed (1) the prevention of the economic crises and the rejection of the IMF austerity policies and (2) the preservation of the reform processes. In Jamaica the divided, nonideological labor movement and the nonprogrammatic party, with little grassroots involvement, little ideological unity, and little ideological understanding at the mass and elite levels, hampered the government’s ability to chart and follow a clear path of change and did not provide a strong organizational base to generate support for this process. Thus opportunities for solidifying the process economically by, for instance, promoting small-scale, self-reliant, collective forms of production were neglected, and more traditional distributive expenditures were emphasized instead. When workers’ participation was put on the agenda, the lack of union support deprived the government of leverage to overcome employer resistance, particularly once the presence of the IMF strengthened the employers’ position. Efforts to build a real programmatic mass party were made and significant progress was achieved, but not enough to provide the support base needed for a significant deepening of the reform process in the crisis conditions of 1977.
In Chile the level of political understanding in the labor movement and the UP parties was higher, but the partisan political splits among the unions and the significant internal disagreements in the UP coalition also weakened the government. Most importantly, the organizational strength of the UP parties was insufficient to widen the UP’s electoral base to include a majority of the population; consequently, the UP had control over the presidency only, not Congress. The government’s approach to this problem was to put primary emphasis on rapid social transformation in the assumption that this would automatically strengthen its support base, and it rather neglected direct organization and unity-building efforts. As the experience with workers’ participation demonstrates, this assumption was not correct. The reforms functioned successfully and had the desired effects on mobilization in support of the UP’s transformation project predominantly where supportive unions and party activists were present to begin with. As in Jamaica, the organizational weakness of its support base induced the government to rely on greater distributive expenditure than the economic situation warranted and thus contributed indirectly to the economic problems. The lack of ideological unity in the movement hampered a moderation in the pace of change and a political compromise when the economic crisis and political polarization had achieved such alarming proportions that the danger of an imminent coup became obvious.
In Peru the military government was initially without an organized support base in the society, and the attempt to build such a base by incorporating popular groups into state-sponsored organizations failed, mainly because the existing unions resisted these attempts. The government’s hope that the CI would lead to class conciliation and the withering away of existing unions, thus facilitating its incorporative attempts, was not borne out. On the contrary, the CI contributed to labor mobilization and militancy and the growth of independent unions. The internal disunity in the government contributed to the failure of the incorporative project, in that the radical faction tacitly encouraged mobilization and autonomous action on the part of labor organizations, and the conservative faction insisted on more direct controls and intervention, thus increasing labor’s propensity to defensive reactions. The radical faction on its part was not strong enough to consistently promote the growth of independent unions and build a unified support base among these unions for its own conception of the reform process. Thus they could not mobilize nearly enough popular pressure to win in the internal power struggle over the direction of the process in 1976.
The comparison of the three cases also showed that the introduction of participation schemes did not necessarily generate support for the governments’ reforms and strengthen the labor movements. Rather, the development and effects of the participation schemes depended on the presence and reactions of unions. In Jamaica the unions were hostile or indifferent to the project, which was one of the reasons why it was never implemented and remained largely without any effect. In Chile participation functioned successfully in enterprises where unions were active and supportive of the project, and in these enterprises the experience with participation reinforced these positive attitudes and strengthened solidarity and support for the government’s larger project of social change. In Peru, in enterprises where strong unions were present, they were capable of defending the rights of the CI against evasion tactics of employers. The experience of conflict over the CI strengthened these unions and also facilitated unionization efforts in other enterprises through a demonstration effect. This heightened strength of labor, however, only strengthened support for the conception of the transformation process held by the radical faction; in contrast, from the point of view of the mainstream project, the workers’ participation reform had outright counterproductive effects.
The design of the participation schemes itself had some importance in their potential development and effects. The emphasis of the design on the experience of direct participation in decision making at all levels in the enterprise in Chile increased work motivation and performance, as well as egalitarian and solidaristic attitudes. In contrast, the CI in Peru did not provide for any real participatory experience in decision making on matters of production. It only increased conflicts over the distribution of the fruits of production, and thus did not cause any changes in work performance. Isolated examples in Peru demonstrated that schemes with an emphasis on ownership and profit sharing could have integrative effects, but only in highly profitable enterprises that had an employer willing to grant the CI its share, a small workforce, and a weak or absent union tradition. However, the scarcity of such cases underlines the impossibility for a government to bring such integration about on a sufficiently large scale to carry out a successful class-conciliation project on the national level.
The key, then, to the successful development of workers’ participation schemes in Latin American and Caribbean countries is the ability of reformist governments to reduce the constraints of dependency on their overall process of transformation and to strengthen the political movement supporting the process. Rather than relying on the legislation of participation schemes to generate and strengthen this support, parties and unions have to be strengthened directly through legislative and material support for organizational activities and for unification efforts. Political education also has to extend to unions as well as to the party grassroots and other popular organizations. Political education is as important for the successful development of participation schemes as technical education about enterprise operations.
If reformist governments are to lessen the constraints of dependency and strengthen their organizational support base, they must first achieve ideological unity at the leadership level. Leaders must have a common vision of a desirable social order and of the strategy to achieve it if they are to send unambiguous signals to society about the direction of the process and so develop of a coherent economic plan to reduce the vulnerability of the dependent economy. In such politically and economically supportive environments, workers’ participation schemes can develop and contribute to the progress of transformation.
Notes
Acknowledgments: The field work in Jamaica in 1981-82 and in Peru in 1975–76 on which this article is based was supported by fellowships from the Joint Committee on Latin American Studies of the Social Science Research Council and the American Council of Learned Societies and by a Fulbright Research Award for the American Republics. While in Jamaica, the author greatly benefited from an affiliation with the Institute for Social and Economic Research at the University of the West Indies, Mona. All of these institutions deserve thanks; none of them bears any responsibility for the views expressed in this article. The Jamaican research was part of a larger project, in collaboration with John D. Stephens, on the Manley government’s attempt to pursue a democratic socialist development path. Thanks are also due to Carmen Sirianni and John D. Stephens for the helpful comments offered on earlier drafts of this chapter.
1. Evelyne Huber Stephens and John D. Stephens, “The Labor Movement, Political Power, and Workers’ Participation in Western Europe,” in Gösta Esping-Andersen and Roger Friedland, eds., Political Power and Social Theory 3 (Greenwich, Conn.: JAI Press, 1982).
2. For a discussion of progressive Christian Democratic doctrine and its philosophical roots, see Brian H. Smith, The Church and Politics in Chile: Challenges to Modern Catholicism (Princeton, N.J.: Princeton University Press, 1982); for specific attention to its conception of workers’ participation, see Peter T. Knight, “New Forms of Economic Organization in Peru: Toward Workers’ Self-Management,” in Abraham F. Lowenthal, ed., The Peruvian Experiment: Continuity and Change under Military Rule (Princeton, N.J.: Princeton University Press, 1975), 357–61. Alfred C. Stepan, The State and Society: Peru in Comparative Perspective (Princeton, N.J.: Princeton University Press, 1978), develops the concept of organic statism to analyze the reform approach of the Peruvian military government, which was heavily influenced by Christian Democratic reformist thinking.
3. See Stanley M. Davis and Louis Wolf Goodman, Workers and Managers in Latin America (Lexington, Mass.: D.C. Heath, 1972), esp. 205–40.
4. The discussion of the Jamaican experience is based on field research on the Manley government carried out in 1981–82. For analyses of the socioeconomic and political background and the whole experience of the Manley government, see Evelyne Huber Stephens and John D. Stephens, Democratic Socialism in Jamaica: The Political Movement and Social Transformation in Dependent Capitalism (Princeton, N.J.: Princeton University Press, and London: Macmillan, 1986), 373–411; “Democratic Socialism in Dependent Capitalism,” Politics and Society 12, no. 3 (1983); “Democratic Socialism and the Capitalist Class: An Analysis of the Relation between Jamaican Business and the PNP Government,” Social and Economic Studies (forthcoming); “Bauxite and Democratic Socialism in Jamaica,” in Peter Evans et al., eds., States versus Markets in the World System (Beverly Hills, Cal.: Sage, 1985).
5. Carl Stone, “Jamaica’s 1980 Elections: What Manley Did Do; What Seaga Need Do,” Caribbean Review 10, no. 2 (Spring 1981):40.
6. On the importance of patronage in the Jamaican political system, see Carl Stone, Democracy and Clientelism in Jamaica (New Brunswick, N.J.: Transaction Books, 1980). On Jamaican unions, see Ralph Gonsalves, “The Trade Union Movement in Jamaica: Its Growth and Some Resultant Problems,” in Carl Stone and Aggrey Brown, eds., Essays on Power and Change in Jamaica (Kingston: Jamaica Publishing House, 1977); and Michael Manley, A Voice at the Workplace (London: Andre Deutsch, 1975).
7. Stone, “Jamaica’s 1980 Elections,” 40.
8. Brian H. Smith and Jose Luis Rodriguez, “Comparative Working-Class Political Behavior: Chile, France, and Italy,” American Behavioral Scientist 18, no. 1 (Sept.–Oct. 1974):59–96.
9. Arturo Valenzuela, Political Brokers in Chile: Local Government in a Centralized Polity (Durham, N.C.: Duke University Press, 1977).
10. Alan Angell, Politics and the Labour Movement in Chile (London: Oxford University Press, 1972).
11. Juan G. Espinosa and Andrew S. Zimbalist, Economic Democracy: Workers’ Participation in Chilean Industry 1970–1973 (New York: Academic Press, 1978).
12. The discussion of the Peruvian experience is based on field research on the workers’ participation reforms in the industrial sector carried out in 1975–76. For a detailed analysis of dynamics between labor, capital, and the government, see Evelyne Huber Stephens, The Politics of Workers’ Participation: The Peruvian Approach in Comparative Perspective (New York: Academic Press, 1980). For a summary statement highlighting the political implications, see Evelyne Huber Stephens, “The Peruvian Military Government, Labor Mobilization, and the Political Strength of the Left,” Latin American Research Review 18, no. 2 (1983):57–93.
13. Two excellent collections of essays that cover the various reform areas and the reasons for the demise of the government and its political project are Abraham F. Lowenthal, ed., The Peruvian Experiment: Continuity and Change under Military Rule (Princeton, N.J.: Princeton University Press, 1975), and Cynthia McClintock and Abraham F. Lowenthal, eds., The Peruvian Experiment Reconsidered (Princeton, N.J.: Princeton University Press, 1983).
14. See Liisa North, “Ideological Orientations of Peru’s Military Rulers,” in McClintock and Lowenthal, The Peruvian Experiment Reconsidered, for a discussion of the different ideological tendencies within the military government.
15. Peter S. Cleaves and Henry Pease Garcia, “State Autonomy and Military Policy Making,” in McClintock and Lowenthal, The Peruvian Experiment Reconsidered.
16. Stephens, The Politics of Workers’ Participation, 176–83.
17. Michael Manley, The Politics of Change: A Jamaican Testament (Washington, D.C.: Howard University Press, 1975).
18. Stone still found these attitudes to be important in his work attitudes survey carried out for the Jamaican government in 1982. See Carl Stone, Work Attitudes Survey; A Report to the Jamaican Government (Brown’s Town, Jamaica: Earle Publishers, 1982).
19. Integration of private enterprises into the social area through “intervention” or “requisition,” followed by state administration, was legally possible if labor conflicts or economic problems obstructed the normal process of production. By September 1973 the social area was composed of 420 enterprises, approximately 260 of which had been intervened in or requisitioned; see Espinosa and Zimbalist, Economic Democracy, 47–48.
20. See Stefan deVylder, Allende’s Chile: The Political Economy of the Rise and Fall of the Unidad Popular (Cambridge: Cambridge University Press, 1976); and Cristobal Kay, “Agrarian Reform and the Transition to Socialism,” in Philip O’Brien, ed., Allende’s Chile (New York: Praeger Publishers, 1976).
21. See “Report of the Advisory Committee on Worker Participation,” Kingston Library, Kingston, Jamaica, 1976. The report also includes the submissions from unions and employers on which the following discussion is based.
22. This speech was reprinted in Jamaica Daily Gleaner, May 25, 1977.
23. Unless otherwise noted, the entire discussion of the workers’ participation schemes, their structure and functioning, relies on Espinosa and Zimbalist, Economic Democracy.
24. In Chilean enterprises, there were mostly two types of unions, one for blue-collar (obreros) and one for white-collar (empleados) workers; in addition, there could be employees belonging to professional unions. Frequently, the various unions had different political affiliations.
25. See Knight, “New Forms of Economic Organization in Peru.”
26. The fact that this particular union was strongly opposed to workers’ participation is not surprising at all. Well-functioning shopfloor workers’ participation makes many supervisory functions superfluous and thus threatens the status as well as the jobs of supervisory personnel. In other countries, similar types of unions have also offered resistance to the introduction of participation schemes.
27. This was repeatedly pointed out by knowledgeable analysts of the Jamaican labor movement as well as by participants in labor relations in interviews carried out in Jamaica.
28. The founder and leader of the BITU, Alexander Bustamente, was President for Life and was empowered to appoint the executive committee as well as the leading officers of the union.
29. See “Report of the Advisory Committee on Worker Participation.”
30. Espinosa and Zimbalist, Economic Democracy, 55, 77.
31. Ibid., 53.
32. Ibid., 183.
33. Party strength was measured by the percentage of the vote given by the workforce to the candidates with respective party affiliation in the 1972 CUT election; see ibid., 99ff.
34. Ibid., 138ff.
35. Ibid., 148–57.
36. Ibid., 140–41.
37. The original law made this possible by simply prohibiting simultaneous exercise of leadership functions in CI and unions.
38. For a similar view, see Giorgio Alberti, Jorge Santistevan, and Luis Pasara, eds., Estado y clase: La comunidad industrial en el Peru (Lima: Instituto de Estudios Peruanos, 1977).
39. See Luis Pasara, “Comunidad Industrial y Sindicato,” 217–8, and Jorge Santistevan, “El Estado y los Comuneros Industriales,” 319–23, both in Alberti et al., Estado y clase.
40. Stephens and Stephens, “Democratic Socialism and the Capitalist Class.”
41. Espinosa and Zimbalist, Economic Democracy, 99 114.
42. Under Peruvian law, unionization is restricted to the establishment level; thus companies with several branches or centers of production have several unions.
43. Luis Pasara, “El Congreso de Comunidades Industrials,” in Luis Pasara et al., Dinamica de la Comunidad Industrial (Lima: Desco; Centro de Estudios y Promocion del Desarrollo, 1974).
44. Stephens, The Politics of Workers’ Participation, 195–204.
45. Norman Girvan, Richard Bernal, and Wesley Hughes, “The IMF and the Third World: The Case of Jamaica,” Development Dialogue 2 (1980): 134–45.
46. Pointing to these policy mistakes and omissions is not to suggest that they were obvious or could easily have been corrected. Rather, many of them had their roots in the preconditions encountered by the PNP, in particular the nonprogrammatic nature of the party, the split nature of the labor movement, and the limited capacity of the state apparatus. See Stephens and Stephens, Democratic Socialism in Jamaica, 270–319.
47. George Beckford et al., Pathways to Progress: The People’s Socialist Plan (Morant Bay: Maroon Publishing House, 1985).
48. It is impossible here to cite even the most important part of the voluminous literature on the UP government and the reasons for the coup. Sergio Bitar, Transicion, socialismo y democracia: la experiencia chilena (Mexico, D.F.: Siglo veintiuno editores, 1979); Arturo Valenzuela, “Chile,” in Juan J. Linz and Alfred Stepan, eds., The Breakdown of Democratic Regimes (Baltimore: Johns Hopkins University Press, 1978); and Frederico Gil, Ricardo Lagos E., and Henry A. Landsberger, eds., Chile at the Turning Point: Lessons of the Socialist Years, 1970–1973 (Philadelphia: Institute for the Study of Human Issues, 1979), are among the most useful sources because of their nondogmatic analyses and the wealth of information presented.
49. Arguments concerning the dangers of the “maximalist” approach to a democratic socialist transition and the utility of a more gradualist path are developed in Evelyne Huber Stephens and John D. Stephens, “The ‘Capitalist State’ and the Parliamentary Road to Socialism: Lessons from Chile” (paper delivered at the Latin American Studies Association Meeting, Bloomington, Ind., 1980. Similar conclusions are drawn in Bitar, Transicion, a carefully substantiated analysis of the UP’s experience.
50. Barbara Stallings, “Peru and the U.S. Banks: Privatization of Financial Relations,” in Richard R. Fagen, ed., Capitalism and the State in U.S.-Latin American Relations (Stanford, Cal.: Stanford University Press, 1979).
51. Martin J. Scurrah and Guadalupe Esteves, “The Condition of Organized Labor,” in Stephen M. Gorman, ed., Post-Revolutionary Peru: The Politics of Transformation (Boulder, Colo.: Westview Press, 1982), 128–29.
52. Rosemary Thorp, “The Evolution of Peru’s Economy,” in McClintock and Lowenthal, The Peruvian Experiment Reconsidered, 41.
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