Leperkhan

Whose side would she take?

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I was discussing politics with one of the professors at my university, and he explained a situation that happened down in south america--Argentina I believe:

There was a factory, like any factor this factory involved skilled workers to run this factory. The owner of the factory faced difficult times in which taxes were increased on his factory, making it a seemingly worthless endeavor. As a result the factory owner left, along with the managment. Leaving hundreds of employees without a job and the factory, which was still fully equiped, idle. The factory workers, not wanting to be without jobs, decided take over the factory and since each had skills in every area the factory ran smoothly. None of the workers was considered the boss or above any other, all had equal pay (with the exception of hazardous jobs). Since the factory became functional, the owner showed up to take back the factory, and all the factory assets.

Whose side would Ayn Rand take? The workers or the factory owner? Please, give support (logic) when answering. I have my own opinion, but I don't wish to voice it quite yet. If any clarification is needed, just ask me. This supposibly is a real case, but I had not the time to research it. Thus, the information is based solely off that of which I remember the professor told me.

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Legally, the crucial question is: can the factory be considered "abandoned property"?

To illustrate, suppose you leave your home and you come back to find that some people have occupied it, improved it and even earned some money off it by renting it out... can you claim it back?

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Legally, the crucial question is: can the factory be considered "abandoned property"?

To illustrate, suppose you leave your home and you come back to find that some people have occupied it, improved it and even earned some money off it by renting it out... can you claim it back?

Yes, that's the problem, so in that case I would probably want my house back and for them to vacate. However, I believe if either I leave, or they leave, there needs to be compensation. The case mentioned above the owner still has legal rights to it.

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Legally, the crucial question is: can the factory be considered "abandoned property"?

To illustrate, suppose you leave your home and you come back to find that some people have occupied it, improved it and even earned some money off it by renting it out... can you claim it back?

Yes, that's the problem, so in that case I would probably want my house back and for them to vacate. However, I believe if either I leave, or they leave, there needs to be compensation. The case mentioned above the owner still has legal rights to it.

In the UK they get to stay. It's a pretty big problem actually. There were a bunch of them in front of Corrigan's in Mayfair. The chef was annoyed.

I can't fathom how the above situation could have worked (and I've visited over 30 factories in industries from fresh foods to electronics, including heavy industries in emerging markets and helped improve many of those). Management IS essential, especially in the less sophisticated parts. There's much more to it than running it like an engine. It's like saying you can drive a car by putting a stone on the accelerator and jumping out, and it will still get to LA from Vegas. So I have a lot of trouble believing that "story" (and I'll explain, once people have spoken, why Gore is very different) and would be very curious to find any kind of source that describes it in detail.

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Of course this question involves legal as well as moral questions. The legal I leave to lawyers. As for the moral, many questions need to be answered first. Just how did taxes fit into this. For example, the employees may not have had the burden of a tax bill, which made sales less profitable for the owner.

Morally, the owner is the owner unless he formally abdicates. A case could be made for improvements (assuming there were some), being paid for. One could also make the case that the employees were illegal squatters, in some circumstances, taking advantage of someone else's property. Then again, maybe the employees were owed wages for past labour and this is how they got paid for it.

In short, more details are needed for an answer.

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I was discussing politics with one of the professors at my university, and he explained a situation that happened down in south america--Argentina I believe:

[. . . ]

There is a documentary making the rounds at Link TV called "The Take:"

The Take is a political thriller that follows Argentina's radical new movement of occupied businesses: groups of workers who are claiming the country's bankrupt workplaces and running them without bosses.

In suburban Buenos Aires, thirty unemployed auto-parts workers walk into their idle factory, roll out sleeping mats and refuse to leave.

All they want is to restart the silent machines. But this simple act - The Take - has the power to turn the globalization debate on its head.

Link TV's special presentation of this provocative film by Naomi Klein and Avi Lewis includes an interview with Amy Goodman, host of the award-winning news program Democracy Now! seen daily on Link TV. Goodman notes similarities between the struggles of Argentine workers and a successful sit-in strike by employees of a Chicago windows and doors factory.

I haven't seen this program, but, I may have to force myself to sit through it. The programming on this channel is very left wing, and includes Al Jazeera.

While I don't know the first thing about starting or running a business, I often imagine what I would do if I were the owner of a manufacturing concern. If I was slammed with outrageous taxes or the workers voted for union representation; I would render any proprietary machinery unusable, destroy every computer hard drive I could find and say: "You're on your own."

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While I don't know the first thing about starting or running a business, I often imagine what I would do if I were the owner of a manufacturing concern. If I was slammed with outrageous taxes or the workers voted for union representation; I would render any proprietary machinery unusable, destroy every computer hard drive I could find and say: "You're on your own."

You don't need to destroy anything. First, if you want to shut down your operation, sell the machines!

Second, without management, the factory cannot be run. Note the wording above - they got sleeping mats and slept by the silent machines. They didn't get in touch with customers to match supply to demand, they didn't negotiate energy contracts with the providers, they didn't sort out transport problems, they didn't call suppliers to establish why the fourth truck still hadn't arrive halting the widget line for the rest of the week... they didn't worry about replacing spares, they didn't think twice about shift scheduling. I could go on. That just touched on the problem solving aspects of management, because you can get it easily as a layman.

They slept by the silent machines and demanded that they be turned on. Magically. Thereby "producing" money for them.

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I've looked it up and it is rather common now, with over 100 businesses taken over in this manner. It's a form of worker buyout without capital :D

2 things came to mind:

1. this is highly illegal and anticapitalist; the machinery belongs to the senior debt holders, not the workers. Every time you hit capitalism, it squeals eventually. This is "putting a wrench" (to quote the workers) in the well functioning of a capitalist economy in Argentina.

2. It says a lot about the quality of Argentinian management that the workers can take over their place, do their job and increase sales :D

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I heard about this story a couple of years ago, but it is even older, starting 2002 or so. It provoked quite a stir in the leftist circles, and a new wave of enthusiasm and hope :-)

A quick search for "Argentina abandoned factories" results in a lot of links; here are two:

Recovered Factories / South America, Wikipedia

Workers in Argentina Take Over Abandoned Factories, NYT, July 8, 2003

Here is a more recent story: Fired workers take over chocolate factory in Argentina. Here the author's conclusion:

They are setting an example for workers all around the world that through direct action and occupations they can prevent companies from using the crisis as an excuse to further exploit workers and make unnecessary cut-backs in hopes of getting a bailout plan. The government should support these experiences of worker-self-management, provide them with the same benefits and subsidies that capitalist business receive.

And if [bosses] wants to leave his or her factory, let them! But the workers have the right to continue their work with dignity. “Maybe one day our story will be included in a chapter on the working class history that a group of workers occupy a plant and begin producing,” ...And the occupied factories in Argentina are doing just that; writing a new chapter in working class history sending the message that workers can do what capitalists aren’t interested in doing creating jobs and dignity for workers.

Don't expect a serious analysis: all are about how capitalism (?) failed and the workers are rescuing themselves. Moreover, the absence of follow-ups about individual stories suggests that on the longer run they are not quite as successful as the enthusiasts hoped.

And then there is the legal aspect of confiscating property from the owners.

Alex

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Oh. My. [Rational alternative to a divine presence].

Argentina actually changed its laws to make workers prevail over senior debt holders and shareholders in case of a bankruptcy.

MADNESS.

Well, at least steaks and tango will remain nice and cheap for a long, long time in Buenos Aires.

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Oh. My. [Rational alternative to a divine presence].

Argentina actually changed its laws to make workers prevail over senior debt holders and shareholders in case of a bankruptcy.

And Obama did the same thing and didn't even bother to change the law when he took over GM and Chrysler.

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Oh. My. [Rational alternative to a divine presence].

Argentina actually changed its laws to make workers prevail over senior debt holders and shareholders in case of a bankruptcy.

And Obama did the same thing and didn't even bother to change the law when he took over GM and Chrysler.

Betsy, he did one better... He had his government take it over... for the common good of course.

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Oh. My. [Rational alternative to a divine presence].

Argentina actually changed its laws to make workers prevail over senior debt holders and shareholders in case of a bankruptcy.

And Obama did the same thing and didn't even bother to change the law when he took over GM and Chrysler.

Huge difference. Although I agree that Obama is very left wing compared to the alternatives, I don't think it is fair to compare his political move to "protect" the visible "American workers" of his district to a blatant spit in the face of capitalism by Argentinian regulators, or Chavez' regular seizing of Hiltons. There are enough conservatives left in the US to put a damper on this kind of outright socialist move, considering he is structuring every other piece of legislation in such a way as to give an excuse for his pack of rabid fans to claim loudly that the right wing is mad to call this socialism.

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Basically, as a distressed and special situations investor, watching Obama do this just confirms that I shouldn't invest in large businesses with government ownership (and I have been told there are indices of government-part-owned companies that you can short already), . Whereas the Argentinian legislative trick puts me off any Argentinian bankruptcy.

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If Argentina institutes a law where debt holders are not entitled to their assets, how are people going to get loans to start factories? Usually, debt holders have a bit of a safety net in that they can sell off the capital equipment, land, and whatever else if it looks like the entire business can't be sold as one unit. If this law is enforced on a wide scale, then workers will be getting multi-million dollar factories for free and banks will have little intensive to lend. Workers may actually have an intensive to make the business fail then become partial owners of the company once it enters into bankruptcy.

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In each case, "intensive" should be "incentive." Spell check gave me that word :D

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If Argentina institutes a law where debt holders are not entitled to their assets, how are people going to get loans to start factories? Usually, debt holders have a bit of a safety net in that they can sell off the capital equipment, land, and whatever else if it looks like the entire business can't be sold as one unit. If this law is enforced on a wide scale, then workers will be getting multi-million dollar factories for free and banks will have little intensive to lend. Workers may actually have an intensive to make the business fail then become partial owners of the company once it enters into bankruptcy.

You'll adjust the NPV/IRR accordingly, basically by assuming a bankruptcy scenario will kill your entire investment.

It won't completely wipe out all investors, but will definitely make them more risk averse and cause loans to be far more expensive. Slowing the economy, etc. etc.

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"...writing a new chapter in working class history sending the message that workers can do what capitalists aren’t interested in..." This assumes that workers aren't capitalists.

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Thank you everyone for your input; I wish I had the time to read the stories (links), but such is life as a student. As a favor to me though, could you answer what you think Ayn Rand would do? Like it would be nice if you could support which side you think she would choose, and then end the post with "owner," or "worker." I really like to see how she would take side on this, I'm getting the feeling that most everyone thinks she is on the side of the owner, but I'm not so sure. In order for the factory to work, all the workers would have to do their best, which I believe is a major value that Rand expresses. However, their communist pay would be frowned :D upon by her. Their work ethics are good, but their reward system terrible. Here's a scary coupled thought: The owner has rights to the factory, therefore he can reposses it. The government is who we rent property from, so if the people reposses it, who are we to argue since the people are goverment. Sad relization: we don't have private property, *sniff*.

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Like it would be nice if you could support which side you think she would choose, and then end the post with "owner," or "worker."

Ayn Rand would be for the correct principles which, in this context, would be property rights, the sanctity of contract, and the rule of law. Thus it depends who who owns what, who agreed to what, and whether the applicable laws are objective.

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