Democratic Institutions of Undemocratic Individuals: Privatizations, Labor, and Democracy in Turkey and Argentina

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Democratic Institu tions of U ndemocratic Individuals

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Democratic Institu tions of U ndemocratic Individuals Pr ivatiz atio ns, L ab o r, an d D em o cr acy in Turkey an d A rgen t i n a

Peride K. Blind

democ ratic in st it ut ion s of undemocrat ic ind iv id ual s Copyright © Peride K. Blind, 2009. All rights reserved. First published in 2009 by PALGRAVE MACMILLAN® in the United States – a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN-13: 978-0-230-61158-0 ISBN-10: 0-230-61158-3 Library of Congress Cataloging-in-Publication Data Blind, Peride K. Democratic institutions of undemocratic individuals : privatizations, labor, and democracy in Turkey and Argentina / by Peride K. Blind. p. cm. Includes bibliographical references and index. ISBN 0-230-61158-3 1. Labor—Turkey. 2. Labor—Argentina. 3. Privatization—Turkey. 4. Privatization—Argentina. 5. Democracy—Turkey. 6. Democracy—Argentina. I. Title. HD8656.5.B65 2008 331.109561—dc22

2008025847

A catalogue record of the book is available from the British Library. Design by Macmillan Publishing Solutions First edition: January 2009 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

Contents

List of Tables and Figures

vii

Abbreviations and Glossary

ix

Preface and Acknowledgments

xv

Introduction: 1: 2: 3: 4: 5: 6:

Democratic Institutions of Undemocratic Individuals

A Recipe for Deciphering Democratization Today: Privatizations and Labor

1 7

History of Labor Developments in Turkey: From State-Dependent to Cautiously Autonomous Unionism

31

History of Labor Developments in Argentina: From Peronist to Cautiously Independent Unionism

57

Turkish Labor in the Global Era: Autonomous Unions and Transiently Unified Workers

85

Argentine Labor in the Global Era: More Plural Unions and Atomized Workers

123

Effects of Privatizations on Labor: A Cross-Cultural Comparison and Implications for Democracy

183

Notes

209

Bibliography

225

Index

253


Li st of Tables and Figures

Tables 1.1 Definitions of privatization 1.2

Workers involved in labor activity (in thousands), 2001–2002

8 14

1.3 Working days lost due to labor activity, 2001–2002

15

2.1 Collective agreement making in Turkey (1996–2005)

54

3.1 3.2 4.1 4.2

Deputies of union background in the Argentine House of Congress (1983–1995)

77

Revisions of collective agreements in Argentina (1991–2001)

78

Classification of the Turkish labor union system in the 1990s

97

Classification of the Turkish labor union system in the 2000s

100

4.3 Focus Groups in Turkey, 2005 5.1 5.2 5.3

Classification of the Argentine labor union system in the 1990s

143

Classification of the Argentine labor union system in the 2000s

143

Sector-Wide comparison of labor federations and unions within the CGT and the CTA

147

5.4 Focus groups in Argentina, 2006 6.1

112

Pedagogic snapshot of Turkish and Argentine organized labor after privatizations

161 184

viii

L i s t o f Ta b l e s a n d Fi g u re s

Figures 1.1

Trends of labor conflicts (strikes) in Argentina (1980–2002)

16

Trends of labor conflicts (strikes and other protest actions) in Argentina (2003–2005)

16

Trends of labor conflicts (strikes) in Turkey (1996–2005)

17

2.1

Turkish deputies with union background (1940–2005)

50

6.1

Employment and unemployment levels as a result of privatization in selected public sectors in Argentina (1985–1996)

194

Employment and unemployment levels as a result of privatization of SOEs in Turkey (1989–2005)

194

Worker typology and reactions to privatizations in Argentina: Pragmatic reasoning and union-bound action taking

196

Worker typology and reactions to privatizations in Turkey: Ideological reasoning and collective action taking

196

1.2 1.3

6.2 6.3

6.4

Abbrev i ations and Glossary

AFL—American Federation of Labor AID—Agency of International Development AKP—Adalet ve Kalkinma Partisi (Justice and Development Party) ANAP—Anavatan Partisi (Motherland Party) APDFA—Asociacion de Personal de Dirección de los Ferrocarriles Argentinos (Association of Argentine Railway Managers) APJGas—Asociacion de Personal Jerarquico (Union of Gas in Buenos Aires) ATE—Asociacion de Trabajadores del Estado (Union of Public Employees) ATTAC—La Asociacion por una Tasa a las Transacciones financieras y Ayuda a los Ciudadanos (Association for Taxing Financial Transactions and Help to Citizens) BASIN-IS—Istanbul Print Workers Union in Turkey CATEP—Confederacion Argentina de Trabajadores de Empresas Privatizadas (Argentine Confederation of the Workers of Privatized Enterprises) CCC—La Corriente Clasista y Combativa (The Class-Conscious and Combative Current) Ce.P.E.Tel—Centro de Profesionales de Empresas de Telecomunicaciones (Center of Telecommunication Professionals) CFSM—Comite de Movilizacion por el Forum Social Mundial (Committee of Mobilization for the World Social Forum) CGT—Confederacion General del Trabajo (General Confederation of Labor) CHP—Cumhuriyet Halk Party (Republican Peoples Party) COA—Confederacion Obrera Argentina (Argentine Workers Confederation)

x

A b b r e v i at i o n s a n d G l o s s a r y

CoGT—Comision de Gestion y Trabajo (Commission of Administration and Labor) CORA—Confederacion Obrera Regional Argentina (Regional Workers Confederation of Argentina) CTA— Central de los Trabajadores Argentinos (Congress of the Argentine Workers) CTERA—Confederacion de Trabajadores de la Educacion de la Republica Argentina (Public Teachers Confederation) DIU—Duyun-i Umumiye (Office of Foreign Debt Management) DISK—Turkiye Devrimci Isci Sendikalari Konfederasyonu (The Revolutionary Labor Unions Confederation of Turkey) DSP—Demokratik Sol Parti (Democratic Left Party) DSI—Devlet Su Isleri Mudurlugu (General Directorate of State Hydraulic Works) DP—Demokrat Parti (Democrat Party) DYP—Dogru Yol Partisi (True Path Party) ENTEL—La Empresa Nacional de Telecomunicaciones EOI—Export-Oriented Industrialization ESOs—Employee-Share Ownership Programs FAECYS—Federacion Argentina de Empleados de Comercio y Servicios (Federation of Commerce Employees) FATEL— Federacion Argentina de las Telecomunicaciones (Argentine Federation of Telecommunications) FATLyF—Federacion de Luz y Fuerza (Light and Power Federation) FETERA—Federacion de los Trabajadores de Energia de la Republica Argentina (Federation of the Workers of the Energy Sector of the Republic of Argentina) FETIA—Federacion de los Trabajadores de la Industria y Afines (Industry and Industry-Related Workers Federation) FNC—Federacion Nacional de la Construccion (Federation of Construction Workers) FNM—Federacion Nacional Metalurgica (National Federation of Metallurgy Workers) FOA—Federacion Obrera Argentina (Argentine Workers Federation) FOECYT—Federacion de Obreros y Empleados de Correos y Telecomunicaciones (Federation of Workers of Postal and Telecommunication Sectors)


xi

FOEESITRA—Federacion de Obreros, Especialistas y Empleados de los Servicios e Industria de las Comunicaciones de la Republica Argentina (Telephone Unions Federation) FOETRA—Federacion de Obreros y Empleados Telefonicos de la Republica Argentina (Federation of Telecommunications Sector Workers) FORA—Federacion Obrera Regional Argentina (Regional Workers Federation of Argentina) FTRA—Federacion de los Trabajadores de la Republica Argentina (Federation of Workers of the Republic of Argentina) GIDA-IS— Gida Sanayi Iscileri Sendikasi (Food Sector Union in Turkey) HAK-IS—Hak Isci Sendikalari Konfederasyonu (Confederation of Turkish Just Workers Union) HISB—Hur Isci Sendikalari Birligi (Free Labor Unions Federation) ICFTU—International Confederation of Free Trade Unions IDTs—Iktisadi Devlet Tesekkulu (State Economic Enterprises) IISB—Istanbul Isci Sendikalari Birligi (Federation of Istanbul Labor Unions) IMB—Intermediary Management Body (term describing the new role of a group of Argentine unions as a response to privatizations) IPOs—Initial Public Offerings ISI—Import-Substitution Industrialization KIGEM—Kamu Isletmeciligini Gelistirme Merkezi (Public Administration Development Center-Foundation) KIKs—Kamu Iktisadi Kurulusları (Public Economic Enterprises) KITs—Kamu Iktisadi Kuruluslari (Public Enterprises in Turkey) KRISTAL-IS— Cam, Cimento, Seramik ve Toprak Sanayi Iscileri Sendikasi (Glassworkers Union in Turkey) LASTIK-IS— Petrol Kimya Ve Lastik Sanayi Iscileri Sendikasi (Rubber Workers Union) M/EBOs—Management or Employee Buy-Outs MADEN-IS—Mineworkers Union in Turkey MHP—Milliyetci Halk Partisi (Nationalist Peoples Party) MISK—Milliyetci Isci Sendikalari Konfederasyonu (Nationalist Labor Unions Confederation)

xii


MSP—Milliyetci Selamet Partisi (Nationalist Security Party) MTA—Movimiento de los Trabajadores Argentinos (Argentine Workers Movement) OAC—Osmanli Amele Cemiyeti (Ottoman Workers Association) OI—Ozellestirme Idaresi (Privatization Administration) OM—Ozelles¸tirme Magdurlari (Victims of Privatizations, social movement of the rank and file in Turkey) ON—Oro Negro (Black Gold, social movement of the rank and file in Argentina and unionized within the CTA) OTC—Osmanli Terakki Cemiyeti (Ottoman Association for Progress) PAP—Politics of Above Parties (strategies and style of negotiation employed by TURK-IS) PETROL-IS— Turkiye Petrol Kimya Lastik Iscileri Sendikasi (Turkish Petroleum, Chemical, Rubber Workers Union) PJ—Partido Justicialista (Peronist Justice Party) PPP—Programas de Propiedad Participada (Employee Share Ownership Programs) PSO—Partido Socialista Obrera (Socialist Workers Party) SDSB—Sosyal Demokrat Sendikalar Birligi (Movement of Social Democrat Unionism) SALs—Structural Adjustment Loans SEKA—Turkiye Seluloz ve Kagıt Fabrikasi (privatized paper and cellulose producing former Turkish SOE) SHP—Sosyal Demokrat Halk Partisi (Social Democrat Peoples Party) SINAPA— El Sistema Nacional de la Profesion Administrativa (National System for the Civil Service Profession in Argentina) SOEs—State-Owned Enterprises SPO—Devlet Planlama Teskilati (State Planning Organization) SUPE—Federacion de Sindicatos Unidos Petroleros del Estado (Labor Federation of Petroleum Unions of the State) TBMM—Turkiye Buyuk Millet Meclisi (Turkish Grand National Assembly) TDI—Turkiye Denizcilik Isletmeleri (privatized Turkish SOE of maritime administration) TIP—Turkiye Isci Partisi (Workers Party of Turkey)


xiii

TISK—Turkiye Isveren Sendikalari Konfederasyonu (Turkish Employers Association) TKKO—Toplu Konut ve Kamu Ortaklıgı Kurulu (Mass Housing and Public Participation Administration) TURK-IS—Turkiye Isci Sendikalari Konfederasyonu (Turkish Confederation of Labor Unions) TURK-METAL IS—Union of Metal, Steel, Ammunition, Machinery, and Automobile Assembly and Related Industry Workers of Turkey UceDe—Union del Centro Democratico (Union of the Democratic Center) UCR—Union Civica Radical (The Radical Party) UF—Union Ferrovíaria (Union of Railroad Workers) UGT—Union General de Trabajadores (General Workers Union) UGTT—Union General de los Trabajadores del Transporte (General Union of the Transportation Workers) UPCN—Union del Personal Civil de la Nacion (Union of the Civil Personnel of the Nation) UIA—Union Industrial Argentina (Industrial Union of Argentina) UOM—Union de los Obreros Metalurgicos (Union of Metallurgical Workers) YHK—Yuksek Hakem Kurulu (High Arbitration Board)


Preface and Ack nowledgments

I started thinking about the questions of democracy and democratization when I was a high school student at Galatasaray Lisesi, Istanbul. In this establishment, denominated as the “window of the East opening to the West,” I had the great opportunity and privilege to meet and discuss with students and scholars from Turkey and all around Europe the democratic and undemocratic attributes of the Turkish political system. Having pursued my university studies in the United States, I became convinced that neither Europe nor the Middle East provided a theoretically sound and subjectively immune area for grasping the democratization process in Turkey. I thus started looking around the world and thinking outside the box. This book project came into being in its most rudimental form when Sabri Sayari, then director of the Institute of Turkish Studies at Georgetown University, Washington, D.C., encouraged me to study Latin America in greater depth for possible comparisons to Turkey. Having received invaluable advice and constant attentiveness from experts on democratization and Latin America at Georgetown, I put forward a dissertation proposal under the guidance of John J. Bailey. George Shambaugh supported the idea of examining the globalization trends as discerned in the massive privatization programs undertaken by the developing world. Andrew Bennett’s intensive courses on qualitative research methods contributed to the forging of the methodological skeleton. Adrian Goldin engaged me in intellectually nourishing discussions tracing the historical development of labor in Argentina. It is to these experts and scholars that this book is indebted to the most. Countless individuals and institutions in Turkey, Argentina, and the United States assisted me throughout the course of this book. All of them contributed significantly to my understanding of democratization and labor politics, although none are responsible for any oversight or error of analysis. In Turkey, I relied on the theoretical insights and rich experiences of academics, civil society activists, and private sector leaders such as Yilmaz Esmer, Ziya Onis, Emre Kocaoglu, Ayfer Egilmez,

xvi

P re fac e a n d Ac k n ow l e d g m e n ts

Aziz Celik, Salih Kilic, Gulay Aslantepe, Suleyman Celebi, Veysel Tekelioglu, Tugrul Kutadgobilik, Faruk Buyukkucak, Mehmet Kilic, Taskin Gundag, Mustafa Tas, Ali Ufuk Yasar, Yasar Erbas, Ayla Yilmaz, Unver Uygar, Kurtcebe Gurkan, Mehmet Aydogdu, Demir Atac, and Ozge Kemahlioglu. In Argentina, my analysis benefited from the insights and enriching discussions with Sergio Berenzstein, Juan Carlos Torre, Sebastien Ethcemendy, Marcelo Jose Cavarozzi, Juan Abal Medina, Walter Sosa Escudero, Carlos Acuna, Hector Palomino, Pedro Elosegui, Cecilia Senen, Santiago Senen, Claudio Marin, Martha Novick, Leticia Pogliaghi, Silvia Garro, Emannuel Ynoub, Adriana Marshall, Rosalia Cortes, Natalia Araguete, Jose Tribuzio, Horacio Meguira, Hector Recalde, Carlos Negri, Pedro Galin, Antonio Jara, Guillermo Defays, Silvia Beatriz Di Leo, Roberto Izquierdo, Alan Cibils, Jorge Sappia, Osvaldo Battistini, Damian Pierbattisti, Alvaro Orsatti, Osvaldo Giardano, and Valeria Brusco. Victoria Murillo, Peter Ranis, and Steven Levitsky provided generous contact information and offered valuable comments on the research topic. In Turkey and Argentina, numerous labor union leaders, at all levels of hierarchy and representation, and blue-collar workers confided their personal stories related to globalization, privatizations, and democracy. These and other individuals opened their doors and offered both intellectual and logistical assistance in penetrating the secluded world of labor in both continents. Members of the Alumni Association of the University of Illinois at Urbana-Champaign, Buenos Aires, provided all kinds of help, ranging from logistical assistance to practical advice and networking. My sincere thanks go to Mercedes Iacoviello and her family, Marisol Navarro and her family, and Maria Ponce Navelino for their kind hospitality and friendship. In Turkey, my sister, Merve Eren, mobilized her friends and colleagues to obtain all relevant library material written in Turkish. I also highly benefited from my discussions with two colleagues in France and in the United States. My thanks, therefore, go to Dr. Severine Bellina at the Institut de recherche et debat sur la gouvernance who offered me in-depth analyses of the French approach to democratic governance, and Prof. G. Shabbir Cheema, without whose help and understanding it would have been impossible to complete this manuscript. The entire staff at Palgrave Macmillan was a pleasure to work with, offering helpful comments and graciously accepting last-minute changes. In particular, I would like to thank Anthony Wahl, Emily Hue, Farideh Koohi-Kamali, and the staff of Macmillan Publishing

P re fac e a n d Ac k n ow l e d g m e n ts

xvii

Solutions, particularly Sailendra Dewan, Matt Robison and Allison McElgunn. Finally, I am immeasurably indebted to my husband, Sebastien Blind, and my son, Teohan Blind, who patiently waited for this project to reach fruition while traveling around the world with me en route. This book, however, is dedicated to the memory of my father, Seydi Vakkas Kaleagasi, who lost his battle to cancer before seeing the book materialized, and to my mother, Fatma Munevver Ozakman, who made several trips between the United States and Turkey to take care of our family during my long hours of absence.


Every man, wherever he goes, is encompassed by a cloud of comforting institutions, which move with him like flies on a summer day. Bertrand Russell (1872–1970)


Introduction

4

Democratic Institu tions of U ndemocratic Individuals

P

rivatizations are a standard feature of the transition toward a market economy and the restructuring of state. They stand out among the other components of structural adjustment reforms, such as trade and capital account liberalization or tax reform, by their direct and immediate impact on specific societal groups. The shortterm effects of privatizations are not general and dispersed on society as a whole. A blue-collar worker dismissed as a result of privatizations, for instance, will certainly feel the immediate effects of privatizations much more so than a small-business owner or a white-collar professional, who will simply note privatizations on television news reports. Privatization programs as such have direct, immediate, and strong effects on blue-collar workers worldwide. These unique characteristics of privatizations render their social and political consequences on labor much more significant and readily observable. Privatizations stand out in globalization also because they are among the most widely used tools of economic development in the developing world. Between 1980 and 1993, the number of privatizations increased in Asia from 108 to 367, in Africa from 210 to 254, and in Latin America from 136 to 561. Over the same period, the revenues governments obtained as proceeds from these privatizations totaled $19.7 billion in Asia, $3.2 billion in Africa, and $55.1 billion in Latin America (World Bank 1995, 27–28). Between 1997 and 2004, more than 4,000 privatization operations were carried out in the world, bringing to governments a total revenue of over $1,350 billion (Bortolotti and Miella 2007). There is thus no doubt that

2

D e m o c r at i c I n s t i t u t i o n s

privatizations are important not only for their direct and immediate effects on workers but also for their own sake. Privatizations have such an important place in globalization that they are often equated with structural adjustment plans as a whole by citizens. In Latin America, for instance, the extensive surveys conducted by Baker (2001) found that privatization is sometimes the only policy that Latin Americans could name as an example or component of the structural adjustment plans. One might be surprised to know that names of political leaders who undertook privatizations have come to be identified with globalization itself. “Menem,” “Menemism,” “privatizations,” and “globalization” are often used interchangeably in Argentina. The picture is not dissimilar in Turkey: “Ozal,” “privatizations,” and “globalization” are synonyms to most Turks. Labor unions and workers constitute the most important sector of society immediately affected by privatizations. • In what respects do privatizations affect labor unions and unionized workers? • How do the effects of these changes in post-privatization settings, in turn, affect the ways unions interact with one another and with other important actors, primarily government bureaucracies, political parties, interest groups, and social movements? • How do privatizations affect the attitudes and behavior of unionized workers, including those who retain their jobs in the newly privatized workplaces versus those who do not? • How do these simultaneous transformation processes within the body of labor unions and the working class translate into the democratization process? In short, what is the nature of democratization in globalization? This book attempts to provide answers to these questions though a study of the two “model students” of globalization: Turkey and Argentina. Four intertwined lines of analysis make up the empirical skeleton: (1) examining the unions and the unionized workers in the pre- and post-privatization periods; (2) studying the changes spurred by privatizations in the labor unions’ internal organization as well as in their external interaction with the governing party or coalition of parties; (3) examining the significant changes, if any, in the political attitudes of current and former union members in the face of globalization; and (4) comparing the two seemingly different worlds from Eurasia and Latin America only to find that similarities

Introduction

3

in democratization patterns abound in globalization, that is to say institutions democratize while individuals do not necessarily do so. This study finds that while Turkish labor unions cooperate more with each other and voice their support for the democratization of state-society relations in the post-privatizations period, the apathy of the masses increases in tandem. Workers who lose their jobs as result of privatizations seldom increase their political participation, rarely join social organizations, and at best, temporarily engage in collective action to convey their discontent and seek their rights. The shortlived Victims of Privatizations Movement in Turkey constituted an important learning experience for Turkish democracy, but came to an abrupt end due to dwindling trust and difficulties implied by collective organization; lack of adequate financial resources and weak political influence. In Argentina, partisan links seem to have weakened and stateness appears to have increased as a result of a modified set of union strategies with and after privatizations. In both countries, while unions regroup and act, individual workers voice helplessness and isolation in the face of globalization. How is it possible that institutions adapt to and embrace privatizations and globalization while supporting democracy more overtly and avidly, whereas individuals who constitute these institutions become more and more disgruntled and marginalized? Are privatizations to blame? Understanding the relationship between globalization and democracy is complex. While this book attempts to simplify the analysis by focusing on one of the most important tools of globalization and narrows down the target population to the world of labor, the task still proves daunting. To gauge the extent and to understand the nature of democratization in the global era, this book looks at the impact of privatizations on the internal organization, external participation, and structural configuration of labor institutions. The scope of analysis is not limited to the institutional level. If studying the metamorphosis of labor institutions is relevant and important for the understanding of democracy in globalization, so is the transformation in the democratic attitudes and behavior of the individuals who make up these institutions. Workers are thus brought into analysis to see whether their participation levels in the system and their perception of democracy have increased and improved, respectively, in any way after and due to privatizations. It is as important to enumerate the main contributions of a book as it is to state what it does not entail. This book does not aim to explain why some unions participated in privatizations while others

4


rejected them. Instead, it endeavors to understand the profound changes that occurred in unions after privatizations in terms of their internal organization and structure, their external participation patterns in decision-making mechanisms, and the attitudes of their current and former members vis-à-vis democracy. As such, the book focuses on the shifting degree and nature of inclusion of unions and workers, the multifarious political bargaining processes between the state and labor unions, and the new social movements involving workers. This book does not profess to offer groundbreaking explanations about why privatizations are pernicious, or a panacea, for democratization. Instead, it aims to tease out the complex nature of democratization in the era of structural adjustments via changes detected in the roles and activities of labor and the concomitant shifts in workers’ behavior and attitudes toward democracy. As such, this book will not give any verdicts on the overall democratization of either Argentine or Turkish politics, but will show tendencies and trends. Finally, this book is not concerned with finding out what renders privatizations successful or not. Victoria Murillo (1997) has established that labor’s reaction to privatizations is an important determinant of how successful the latter will be in Latin America. Glen Biglaiser and Michelle Danis (2002) have enlarged the scope of analysis to the developing world for showing that privatizations are more likely to be successful in democratic countries than in authoritarian regimes. This book investigates the reverse direction in this relationship, that is, the impact of privatizations on democratization.1 To understand privatizations in practice and not only in theory, we need to disentangle them into their different types and observe the actual process of their implementation in different societies. To grasp the complex nature of democratization in the era of globalization, in turn, we need to disaggregate it into its specific components and note how the actors most involved in the intersection of privatizations and democratization adjust to changing circumstances. Labor unions as institutions and workers as individuals stand at this intersection. The world of labor unions and workers, as such, offers a propitious ground for studying the impact of privatizations on democratization. On the basis of such theoretical grounding and empirical observations, this book attempts to provide a qualitative synopsis of the social and political consequences of globalization in the developing world. It does that through a thorough comparison of two most different systems, Turkey and Argentina, which share no more than their endemic economic crises as a common characteristic. The book is organized around five main parts. The first chapter delineates the

Introduction

5

main concepts, working hypotheses, and methodology. It defines privatizations, weaves them into globalization, clarifies the meaning of democratization for purposes of this study, and links them with labor. The second and third chapters offer insights on the similarities and differences in the historical developmental patterns of labor institutions and the evolution of working class in Turkey and Argentina. The fourth and fifth chapters bring the analysis to our days, attempting to outline the possible relationships between privatizations and the observed social and political changes at the institutional and individual levels of analysis. New union strategies and developments are illustrated in these chapters along with the personal experiences of Turkish and Argentine blue-collar workers affected and not affected by privatizations. Finally, the sixth chapter synthesizes the historical and the present only to deconstruct it later through a juxtaposition of Kemalist with Peronist projects of state and nation building, including the idea of stateness. The conclusion of this book is, in this sense, only a new beginning in the quest for understanding the counterintuitive finding of the overall analysis: labor institutions open up, participate, innovate, and in a way, cautiously democratize in Turkey and Argentina, while individual workers do not.


Chapter 1

4

A Reci pe f or Decipher ing Democratiz ation Today Privatizations and Labor

G

lobalization is the increasing interconnectedness of the world through economic, political, and social ideas, institutions, and exchanges. The dominant and unfettered role of state in the production of goods and services does not belong to the globalized world. Economic globalization entails the downgrading of state interventions in economy through the privatization of state-owned sectors and enterprises. Privatization, as the most significant and direct tool for reducing the scope of state in the economic sphere, also involves a restructuring of state-society relations. The new forms of politics created and stimulated by privatization bring the possibility of “globalization from below”—social movements that seek to create autonomous political structures from the grass roots up. Privatization, in this regard, is not only the most political tool of economic globalization but also its microcosm.

Privatizations While globalization goes hand in hand with privatizations, there is no single recipe for privatizations just as there is no unique understanding of globalization. The myriad definitions of privatization range from a simple transfer of assets from the public to the private sector to outright liberalization. With privatizations, the state abandons the economic sphere of production by getting rid of the firms and functions under its control.

8


Table 1.1 Definitions of privatization DEFINITION RANGE

DEFINITION

DEFINITION SOURCE

Narrow

Transfer of company assets from the government as owner to a private sector receiver

Thomas Callaghy and Ernest Wilson (1988)

Narrow

Shifting into nongovernment hands some or all roles in producing a good or a service that was once publicly produced

Marc Bendick (1989)

Narrow

Transfer of assets and service functions from public to private hands

Steve Hanke (1987)

Medium

Reduction of the role of state in supplying goods and services to the population

Michael O’Higgins (1989)

Broad

Process that shows every sign of reconstituting major institutional domains of a contemporary society

Paul Starr (1989)

Broad

Attempt to differentiate between public and private sources but also means of striking a new balance between them

Alan Walker (1989)

Broad

Liberalization, deregulation

Jacques Dinavo (1995)

To do that, the state may keep all of its equity and delegate management of an enterprise to the private sector. It can also choose to sell all or a portion of the enterprise’s assets. Liberalization means the removal of restrictions in entering a particular market. Liberalization breaks up monopolies and increases competition in the marketplace. The main definitions of privatization are summarized in table 1.1. No matter which definition is chosen, privatizations entail a profound transformation of the role of state and the balance between public and private spheres. The same goes with globalization. This study opts for a narrow definition of privatization as the total or partial sale of assets of state-owned enterprises (SOEs) to the private sector. This restricted perspective on privatizations is for purposes of parsimony, but it also makes it easier to separate privatizations from the rest of the structural adjustment reforms in terms of processes and impact.1 There are as many methods of privatization as definitions of it. Direct sales or tenders to national or international businesses, initial public offerings (IPOs), management or employee buy-outs (M/ EBOs), employee-share ownership programs (ESOs), allocation of shares to the public, debt-equity swaps, and liquidation of public enterprises or sale of their assets are some of these methods (Nestor and Nigon 1996, 12). In general, many of these alternatives are used in combination in the privatization of a big firm or a sector.

D e c i p h e r i n g D e m o c r at i z at i o n To d ay

9

Regardless of the variety of methods employed, privatizations may have common goals that can be classified as economic or political. The economic goals of privatizations include an increase in economic efficiency through enhanced competition, an improvement in the quality of goods and services provided, the expansion of consumer choice, a recovery in the balance of payments and the national budget, the promotion of foreign direct investment, and enhanced technology. All of these forces can work to fuel economic growth. As such, the implicit logic of privatizations is to solve the problems of sluggish growth and inefficient SOEs, which constitute a substantial drain on government finances in many developing countries. Privatizations are inherently political. The political goals of privatizations include a reduction in corruption through a cutting down of state’s role in supplying goods and services. An improvement in the economic and political position of minority and/or ethnic groups can also be targeted through privatizations. In Malaysia, for instance, an obligatory allocation of 30 percent of shares in privatized companies to members of the minority ethnic group Bumiputras has redistributed wealth and income in society (Ghosh 2000, 11). In Turkey, privatizations provided the stimulus for the effective use of political Islam as a “language of social disadvantage” to reincorporate the unemployed into the labor market (Bugra 2002). As such, Islamic values of social justice and equity were often contrasted with the notion and practice of privatization by politicians and civil society activists. In Argentina, the reknowned employee-share ownership programs (Programas de propiedad participada, PPP) not only were about obtaining workers’ acquiescence to privatizations, but also entailed their empowerment by making them owners of stocks and shares in the firms in which they worked (Tomada et al. 1992). Does the political agenda behind privatizations mean that they might potentially shape and mold processes of democratization? And what is democratization?

Democratization A careful analysis of the definitional map of democracy shows that three important categories have dominated political science literature. The first comprises the “instrumentalist” definitions pioneered by Joseph Schumpeter (1965), who defined democracy as a system in which people, political parties, and interest groups pursue their interests according to peaceful and rule-based competition (269). The second is the “culturalist” definitional category in which democracy is perceived as a specific type of culture. Between the “minimalist-instrumentalist”

10


definition, which takes elections as the most important component of a democracy, and the “ideational-culturalist” definition, in which the norms and traditions of democracy replace elections as its core element, there lies a third approach: the “institutionalist.” This approach endeavors to combine the useful elements of both the minimalist and ideational schools. As such, the “institutional” definition of democracy takes into account elections as well as institutions. Institution building is democratization if the institutions are or aspire to be democratic. Democratization, therefore, refers to political changes toward more democratic institutions and political regimes (Potter 1997, 3). It entails liberalization2 but includes more than just a relaxation of repression and the granting of certain freedoms (Whitehead 1991, 8–9). According to Juan Linz and Alfred Stepan (1996), democratization requires, first and foremost, open contestation and free and competitive elections. According to Guillermo O’Donnell and Philippe Schmitter (1986), it then takes shape through a gradual application of the rules and procedures of citizenship to political institutions previously governed by other principles, such as coercive control or social tradition. Some scholars advocate dividing the democratization process into two specific, but interrelated, phases: transitional and consolidation.3 The former refers to the “time between the breakdown of a dictatorship and the conclusion of the first democratic national elections” (Bermeo 1997, 305). The latter denotes the lengthy and difficult process whereby democratic structures and norms are accepted as legitimate, partly or entirely, by civil society and by the political elite. In this dichotomous view, democratization is conceived as being mainly a game played by and among the elite. Elite settlements or pacts prompt processes of reconciliation and launch a series of procedural arrangements whereby functions and status in the next regime are negotiated and bargained away (Przeworski and Wallerstein 1982). Elite convergence, as such, stimulates the transition to democracy, which then takes on the difficult and gradual task of consolidating the institutions. This study adopts the middle-ground institutionalist perspective on democratization, which it conceives as a continuous and gradual process. Therefore, democratization is not seen as suddenly started by elections alone or as driven only by elite settlements. Frances Hagopian (1990) has shown how elite negotiations have ended up in the restoration of authoritarian ties between the civilian and military elites of the old regimes in Brazil, Peru, South Korea, and the Philippines. Similarly, the plethora of political systems with free and fair elections


11

but without the necessary and well-functioning systems of political and civil rights shows that elections are not equal to democratization (Kaplan 1997; Zakaria 1997). In a continuous understanding of democratization, it is essential to detect processes of collective action, social mobilization, and institutionalization over time so that a fuller account of democratization can be obtained (Collier and Adcock 1999; Collier and Mahoney 1997). In this regard, labor constitutes an especially interesting arena for the study of democratization from an institutionalist perspective since it embodies par excellence both the collective action and social mobilization variables while providing an important institutional link between the masses and the political elite. In this vein, social movements and associationalism, mass uprisings, and worker mobilizations become central to the study and understanding of electoral democracies (Snow and Manzetti 1993).

Labor: Linking Privatizations and Democratization Labor is important in and for democratization. Historically, labor unions and workers have been active in democratization movements in different parts of the world. It was, for instance, the general strike of 1977 in Portugal that led the government to set up a constituent assembly, thereby precipitating the transition to democracy. In Spain, organized labor’s demands concerning union democracy soon escalated into demands for political liberties for the people at large, ultimately causing the end of Franco’s regime. In Argentina, labor protests and working-class resistance intensified divisions within the military, thereby instigating a process of political opening (apertura) in the 1980s (Collier and Mahoney 1997, 289, 91).4 When the military closed down the legislature in Uruguay in 1973, workers were the only social group that protested publicly (298). Even in Turkey, a nation with no historical experience of democracy before the 1950s, labor took an anti-coup stand against rumors of a possible military takeover in the face of rising Islamism in 1997. Labor unions and workers, in addition to being important actors in democratization, are also the groups most intensely and directly affected by privatizations (Cook and Murphy 2002, 1). Privatizations have effects on wages, job security, working conditions, employment levels and conditions, the internal organization of unions and their relations with one another, unions’ strategies, the type and extent of

12


labor movements and protests, and finally, the very idea of unionism. While many scholars argue that privatizations result in layoffs and increased unemployment (Odekon 1998), others maintain that privatizations have actually increased employment. David Fretwell (2002) argues, for instance, that employment increased by 10 percent in the ten Chilean SOEs privatized between 1985 and 1990. Murillo (2002) uses the same example to argue for the opposite. She maintains that even though employment increased following privatizations in Chile, the unemployment rate was still a considerable 10 percent in 2000. Despite disagreements regarding the impact of privatizations on employment levels in the long term, there is a general consensus on their ramifications on union membership. The consensus is that privatizations decrease union membership, thereby rendering unions weaker and politically less powerful. These critical conditions may push unions to look for alternative strategies of survival and participate more actively in decision making in the global age. The same is valid for workers who make up the unions. It might very well be that privatizations provide the stimulus to transform workers from passive names on union lists into active participants of social movements, thereby rendering their exclusion from the political system more and more problematic. As a result of the changing rules of the institutional game and citizens’ reactions, governments can then feel more prone to reform toward promoting new and effective sociopolitical inclusion processes. Seen from this perspective, privatizations can trigger a whole chain of action-reaction in state-society relations, which would then significantly affect the democratization process. There are many other possible ways in which privatizations can influence democratization through the changes in the world of labor. Economic development changes class structure, enlarges the working and middle classes, and facilitates their self-organization, thereby rendering their exclusion more and more difficult, according to Evelyne Huber Stephens, Dietrich Rueschemeyer, and John Stephens (1993, 14). Although privatizations are engines of economic change for better or worse, political scientists rarely study those who are most affected by them—workers. Murillo (2001), for instance, omitted workers from her study of government-union relations arguing that it is the union leaders, and not the workers, who participate directly in decision-making processes. A focus on democratization would necessitate bringing in the workers because not only are workers important collective actors in democratization, but also democratization itself is a process of organizing and mobilizing the masses.


13

Workers and the modes and modalities in which they have coped in and with globalization are relevant for the study of democratization. The post-privatizations period in different parts of the world has shown that the rank and file can organize and mobilize without the approval of union leaders. In India and Russia, for instance, the inability of union leaders to protect jobs and incomes has prompted individual workers to rely on informal bargains struck with their firms or communities (Candland and Sil 2001, 305). In Argentina, “worker councils” comprising delegates of the rank and file in individual plants have continued their activity throughout the consecutive military regimes (Natalicchio 2005). Considering these precedents, one would expect the workers touched by privatizations to take action, including joining or even founding their own social organizations or movements. New organizations and avenues for participation in which citizens have been active in the developing world are many: popular consultation (consulta popular),5 popular assemblies (asambleas barriales),6 anti-globalist or anti-capitalist groups such as The Association for a Fee on the Speculative Financial Transactions and for Aid to Citizens (La Asociación por una Tasa a las Transacciones Financieras y Ayuda a los Ciudadanos, ATTAC),7 Dialogue 2000 (Dialogo 2000),8 and the Committee of Mobilization for the World Social Forum (Comite de Mobilizacion para el Forum Social Mundial, CFSM),9 and societal groupings such as neighborhood associations, picketers (piqueteros), human rights organizations linked to leftist parties, and oppositional movements by the center-right are only some (Gambina and Campione 2003, 154). These new forms of association and representation might constitute new modes and practices of democracy in the developing world. Yet, one wonders whether they are related to privatizations in any way or degree. Privatizations concern workers not only because of the implicit and explicit threats of unemployment and relocation, but also because they may encompass social programs such as temporary income support, active training programs, special assistance programs, direct dialogue between the government, enterprise management, workers, and community leaders, and other social support packages and labor redeployment services. Such social programs linked to privatizations may provide transitional income support until displaced workers find alternative sources of employment. They may also assist such workers in finding other jobs by providing psychological support in the search process. If successful, these programs can have political ramifications, including an impact on democratization. The question is whether

14


social programs included in and associated with privatizations have been effective in meeting their stated objectives. Labor is an actor in both privatizations and democratization because it is the target group of “labor capitalism.” This universally used term implies and includes the M/EBO and ESO components of privatization programs. The M/EBOs allow workers to set up investment companies and to borrow from banks in order to participate in the privatizations of the SOEs they are working for. This is a technique most suited for medium-sized firms that require less capital. The ESO programs, on the other hand, consist of a legally fixed percentage of shares to be sold to the employees of a company at discounted prices. Labor capitalism may enhance the role of unions by making them active participants in privatizations. It may make them more businessand policy-oriented. Unions may thus become equal partners of business and government in negotiations. Workers, likewise, may become shareholders. They may acquire a more direct stake in how well their firm is doing and, as such, take greater interest in economic and political developments in general. This renewed interest may lead them to participate more actively in sociopolitical decision making. Such developments can potentially improve labor relations with the government and the private sector (Gates and Saghir 1995). Has this been the case? Labor constitutes a fertile terrain for gauging globalization’s impact on processes of democratization because it disposes of important democratic tools such as protest marches, strikes, sit-ins, lockouts, and collective bargaining, all of which can be galvanized by privatizations. Tables 1.2 and 1.3 show the global trends in labor activity from 2001 to 2002. Although privatizations and other economic reforms spurred by globalization have ended up in unemployment and Table 1.2 Workers involved in labor activity (in thousands), 2001–2002 Number of countries covered Regions

2001

2002

Africa America Asia Europe Oceania

10 22 15 30 2

13 23 17 32 2

Total

79

87


15

Table 1.3 Working days lost due to labor activity, 2001–2002 Regions

Number of countries covered 2001

2002

Africa America Asia Europe Oceania

10 28 15 29 2

13 28 17 31 2

Total

84

91

Source: ILO Yearbook of Labor Statistics, 2001 and 2002.

deunionization, these tables show that, at the peak of privatizations in the beginning of the twentieth century, the number of workers involved in protest movements increased, as did the total number of days spent without work due to labor conflicts. Yet, with time, worker mobilization seems to have dwindled. The total number of working days lost due to strikes and lockouts decreased in the world from 441 in 1996 to 35 in 2004.10 Strikes have also decreased by a factor of ten since 1979 (Addison and Schnabel 2003). Although strike statistics are useful in terms of giving us the larger picture and trends in organizational activity spurred by globalization, they do not tell us what causes the strike waves, nor do they convey country-specific information. As seen in figures 1.1 and 1.2, while strikes initially increased in Argentina following the advent of privatizations, the trend has been downward and low except for short peaks coinciding with economic crises. In Turkey, on the other hand, strike patterns have stayed relatively constant except for minor surges in 1999–2000 and 2003–2005, as seen in figure 1.3. What has the role of privatizations been in the changing patterns of strike activity in Turkey and Argentina? Do privatizations make workers more active members of their unions and communities or do they end up in increased apathy?11 Strikes are one social facet of globalization kindled by privatizations. Globalization also changes the way unions interact with political parties. Privatizations can again act as a catalyst in this metamorphosis by mitigating what one can call the “partisan links.” Defined as traditional links of populist pedigree, partisan links between unions and political parties make it less likely for labor to communicate with political actors other than the preferred party. A decrease in partisan links injects pluralism into the clientelistic partisan links.


Number of Strikes

16 1000 900 800 700 600 500 400 300 200 100 0 1980

1985

1990

1995

2000

Source: Centro de Estúdios Nueva Mayoria (Palomino and Senen, 2003) cited in Cardoso (2004, 43).

Figure 1.1 Trends of labor conflicts (strikes) in Argentina (1980–2002). 180 160 140 120 100 80 60 40 20 0 January03

August-03

March-04

September -04

Strikes

April-05

October -05

Other

Source: Documents of Argentine Ministry of Labor prepared in cooperation with the Independent Social Science Consultation Center (2006).

Figure 1.2 Trends of labor conflicts (strikes and other protest actions) in Argentina (2003– 2005).

Christopher Candland (2001) argues that partisanship renders unions excessively dependent on party rivalries, causing what is called “involuted pluralism.” Defined as an excessive multiplicity of unions, involuted pluralism paves the way for management and party leaders to exploit labor (Rudolph and Rudolph 1987, 259–89). As a result, labor union leaders with partisan links to parties tend to be more corrupt, conservative, and autocratic (ibid., 86). This is in stark contrast to cases in which the absence of partisan links works to bring


17

60 52

Strikes

50 40

38

44 37

30

34

35

34

27 23

20

30

10 0 1995

1997

1999

2001 Years

2003

2005

Source: Based on statistics published by Turkish Ministry of Labor and Social Security http.//www.calisma.gov tr/istatistik/cgm/yillar_resmi_grev.htm

Figure 1.3 Trends of labor conflicts (strikes) in Turkey (1996– 2005).

closer cooperation between unions and nongovernmental organizations. Accordingly, unions without their political patrons by their side seek new allies, engaging in more participation, negotiation, and research. A change in the relationship between unions, political parties, and eventually the state can have consequences on the internal functioning of unions as well. A decrease in partisan links might lead these unions to implement gradual changes in their election procedures toward more competitiveness in the selection of labor representatives. Many labor unions in the developing world are well known for the lack of turnover in their top leadership positions. Once a leader gets to the top of a confederation, federation or union, he often occupies that post until his death. Privatizations, by damaging the patronclient ties between government and union representatives, might facilitate a more democratic internal reorganization of unions in the post-privatizations period (Fiorito, Jarley, and Delaney 1995, 618). The internal organization of unions is important for democratization since “genuinely democratic and outwardly connected unions bring substantial benefits to workers and their organization” (Candland 2001, 129). How labor union leaders are selected is an important measure of unions’ internal democracy. Accordingly, the secret ballot election of union leaders increases the confidence of the rank and file that its preferences count in negotiations of collective bargaining. Elections within unions also reduce the ability of political parties to penetrate and fragment the labor movement. Finally, union elections expand the social ties within the “laborpopular milieu,” composed of the rank and file, nongovernmental organizations, and representatives inside and outside the workplace

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who claim to speak on behalf of workers. Unions’ collaboration with various civil society actors, including former union members and the unemployed, provide examples of some of the new alliances and forms of democratic participation in the post-privatizations period. Privatizations may also increase the social ties within labor and between labor and other social actors. The strengthening of social ties as a result of privatizations might create what Bert Klandermans (1990) calls an “alliance system”—the more decentralized and informal way in which labor and management are connected to each other. Candland and Rudra Sil (2001) observe that the 1990s witnessed the emergence of what they call “new unionism.” Defined as a process of increased cooperation and interaction between unions and other social organizations, new unionism also implies deeper roots by these institutions within their local communities, that is, an alliance system (20). Are alliance systems and traits of new unionism present in postprivatization Argentina and Turkey? Are the posited links between privatizations and democratization observable and present in the real world? To find the answers to these questions, one has to analyze (i) the political conflicts over privatizations and their effects on the organizational adjustments within both the overall union structures and individual unions; (ii) the shifts in the type and intensity of unions’ dealings with the political elite, including the political parties and the state; and (iii) the changes in the nature and degree of unions’ cooperation with civil society organizations and social movements. Studying labor institutions not only helps us appreciate how legacies of existing institutions shape privatizations, but also reveals how new legacies themselves are created by processes of privatizations. As Thomas Carothers (2002) writes, “Democracy promoters need to take a serious interest in privatizations to make a credible case to economists that they should have a place at the table when such programs are being planned” (19). One way to do that is to look at how unions as institutions and workers as individuals respond to the challenges posed by privatizations.

Methodology To study the nature of democratization in globalization, intensive, in-depth interviews with labor union leaders, civil society representatives, and politicians responsible for privatizations in Turkey and Argentina were undertaken in 2003, 2005, and 2006. In addition, a total of 15 focus groups, composed of about 30 blue-collar workers in Turkey and 50 in Argentina, were carried out.12 The workers came


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from different educational, geographical, socioeconomic, and political backgrounds and were affiliated with the main labor confederations in both countries. They were thus chosen nonrandomly and principally through networking with labor specialists, civil society activists, and workers, and most of the time after long waits and arduous convincing in front of workplaces and unions. The reasons for the use of a nonrandom sample were manifold. First, in this specific case, it was impossible to draw on random sampling, since some unions did not want to share the lists of their members, nor did they all have access to workers who lost their union memberships as a result of privatizations. Second, the qualitative strategy of controlled sampling, that is, the selection of respondents on the basis of the dependent variable of labor, was appropriate for the nature of the research question at hand. It was so because I expected the responses of workers to privatizations to be strongly correlated with their labor confederation affiliation, given that both union affiliation and political attitudes are strongly determined by political and ideological predispositions in both Turkey and Argentina. It was therefore in the best interest of this study to include as much causal heterogeneity as possible into the sample with respect to sector and union affiliation.13 Random sampling, even if it were possible, would in fact have been problematic in this case: “In small-N studies,” David Collier and James Mahoney (1996) write, “random sampling may produce more problems than it solves. The alternative approach of nonrandom sampling can be used in such cases” (20). While selection bias can be a problem when the sample size is small and a qualitative selection strategy is required, it must also be acknowledged that other interesting details are better grasped by the use of focus groups. While random sampling would have provided results that would be more easily generalizable to the whole population of Turkish and Argentine workers, generalizability comes at the expense of parsimony, accuracy, and causality (Przeworski and Teune 1970). Controlled sampling, on the other hand, allows the setting up of a carefully contextualized and conceptually valid analysis of a few cases of the outcome. As Ronald Rogowski (1995) maintains, “Some of the most influential studies in comparative politics have managed to produce valuable findings even though they violate norms of case selection proposed by the quantitative literature on selection bias” (468–70). Ex post facto, I should also confess that it would have been utterly hard, if not impossible, to convince tired and sometimes half-illiterate workers to fill out extensive survey questionnaires about their experiences and views on as abstract and multidimensional concepts as democracy.

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Findings Results of the fieldwork show that privatizations create convergent institutional changes across different cultures, but they produce divergent individual responses from workers. Privatizations cause or reinforce similar divisions within the labor union structure in Turkey and Argentina with comparable changes in the relations unions have with interest groups, civil society organizations, political parties, and the government. They, however, produce disparate responses from the rank and file: while Turkish workers affected by privatizations choose to mobilize to obtain some kind of restitution from the state, Argentine workers do not attempt to contest privatizations by forming a grassroots movement independent of the union structure. That said, the Turkish grassroots mobilization dwindles in time and the movement peters out as participants of the movement obtain jobs in the formal market. This finding is intrinsically important since many political economists have argued that privatizations, by being standard recipes for shrinking an overarching and inefficient state, produce similar sociopolitical consequences in different countries implementing them.14 An equally important number of scholars of political science, on the other hand, have adopted a sociological neoinstitutionalist15 or even a culturalist perspective to argue that privatizations produce divergent results depending on the specific country undertaking them.16 This book demonstrates that both of these arguments are unsubstantiated. Privatizations do not produce the same results in different countries applying them, nor do they produce completely divergent results depending on the country and contextual factors. A systematic comparison of Turkey and Argentina also shows that privatizations seem to produce highly similar changes in institutions and the ways in which they try to adapt to the shifting social and political parameters stimulated by privatizations. The convergent effects of privatizations on institutions do not appear at the individual level, however. In the short term, individual workers react differently to privatizations in different parts of the world. In the long term, however, collective action by individual workers and their temporarily increased political participation, if any, subside. Convergence at the Institutions: Signs of Democratization The convergent institutional changes to which privatizations have contributed their fair share in both Turkey and Argentina are threefold: structural changes in labor systems, changes in unions’ external


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relations with nonunion actors, and minor changes in unions’ internal organization. Structure of Unions: Triad Fragmentation and Gradual Collaboration A study of the Turkish and Argentine labor institutions since the beginning of the privatization programs in the mid-1980s shows that privatizations have led to similar structural divisions determined by the distinct responses and reactions of groups of unions toward privatizations. This has been the case whether or not the union structure in question was already divided by political ideologies or other factors in the pre-privatizations period. In Turkey, for instance, where the labor movement was compartmentalized along ideological lines into three major labor confederations, each one of the confederations and their affiliated unions took separate and distinct attitudes toward privatizations. The Confederation of Turkish Trade Unions (Turkiye Isci Sendikalari Konfederasyonu, TURK-IS), as the largest labor confederation in the public sector and the labor institution most directly affected by privatizations, chose to support privatizations implicitly by astutely modifying its previous partisan links with the governing parties. The left-leaning Revolutionary Labor Unions Confederation of Turkey (Turkiye Devrimci Isci Sendikalari Konfederasyonu, DISK), barred from organizing in the public sector because of its revolutionary stigma dating back to its intense involvement in the popular uprisings of the 1970s, opted for a strongly anti-privatizations stand. The right-leaning and relatively younger Confederation of Turkish Just Workers Union (Hak Isci Sendikalari Konfederasyonu, HAK-IS), on the other hand, adopted a clearly pro-privatizations stance, actively supporting and participating in privatizations. While each one of the three labor confederations adopted a pro-democratic political rhetoric, DISK was the most active in reaching out to the civil society and overtly supporting democratization. In Argentina, although only one labor confederation is legally recognized by the state, there too, the labor union structure split into three separate branches with distinct responses and reactions to privatizations. The legally recognized and the largest labor confederation, General Confederation of Labor (Confederacion General del Trabajo, CGT) broke up into the pro-privatizations CGT-San Martin, the anti-privatizations CGT-Azopardo, and a third group of unions that declared themselves independent in the beginning of the 1990s. The left-leaning CGT-Azopardo left the CGT in 1992 to

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form an independent labor confederation without the state’s legal endorsement or personeria gremial. The former CGT-Azopardo, today’s Center of Argentine Workers (Central de los Trabajadores Argentinos, CTA), openly and strongly contested privatizations while pressing for the democratization of both the Argentine labor movement and the political system. As opposed to the CTA, the strongly Peronist CGT-San Martin continued its support of the privatizing Peronist Party and its leader, Carlos Menem, in exchange for political appointments and privileged relations with the executive during privatizations. Although one other group of Peronist unions, organized under the banner of Argentine Workers Movement (Movimiento de los Trabajadores Argentinos, MTA), initially opposed privatizations, this group never envisaged leaving the CGT-San Martin. In fact, the MTA dissolved itself as soon as its popular leader, Hugo Moyano, was elected to lead the CGT as its secretary-general. A large group of previously independent unions representing wellpaid workers in the public sector switched to what might be dubbed as business unionism, thereby actively supporting and participating in privatizations. Finally, more recently, Argentina also witnessed the formation of a strongly ideological movement of the rank and file with more direct and loose links to retired workers and the unemployed. The Class-Conscious and Combative Current (La Corriente Clasista y Combativa, CCC) is a loose association of union representatives, rank and file, the unemployed, picketers, and retired workers subscribing to an assortment of leftist ideologies across Argentina. The CCC works in close cooperation with the CTA and is increasingly perceived and categorized as a separate labor confederation by Argentine scholars (Gonzalez 2001). At a glance, there are similarities with respect to the positions adopted toward privatizations and the resulting compartmentalization of the union structures in Turkey and Argentina. Privatizations converted some unions into business unions, such as the CGTaffiliated and previously independent unions in Argentina and the HAK-IS in Turkey. More traditional and official labor unions usually devised strategies on the basis of their historically partisan ties with given political parties or the state to become clientelistic unions as exemplified in the cases of the CGT-San Martin in Argentina and the TURK-IS in Turkey. Finally, privatizations transformed the reactionary labor unions into civic unions as demonstrated in the cases of the CTA in Argentina and the DISK in Turkey. Business unions used privatizations to acquire firms and businesses, clientelistic


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unions used privatizations to retain and obtain economic and political privileges, and civic unions used privatizations to become watchdog organizations on government for the implementation of social reforms. These divisions in labor did not prevent a gradual and cautious trend toward cooperation. In Turkey and Argentina, civil society initiatives were undertaken by a cooperative action of union confederations and individual labor unions in collaboration with other civil society organizations. The initiatives in question involved privatizations directly and explicitly in their formation rationale, as seen in the Platform of Retired Workers (Emekliler Platformu) in Turkey and the Argentine Confederation of the Workers of Privatized Enterprises (Confederacion Argentina de Trabajadores de Empresas Privatizadas, CATEP). Both organizations were founded by the collaborative efforts of several branches of the union movements in their respective countries to encourage debate and research on both privatizations and democracy. Although short lived, such initiatives constituted important learning experiences for labor unions in Turkey and Argentina. External Role of Unions: Government-Union Relations and Stateness Privatizations increased government-union negotiations, more so in corporatist Argentina than in Turkey, where unions are not the traditional interlocutors of the state. Sebastian Etchemendy (2001), in investigating the patronage networks between the privatizing Argentine governments and their clients, including the labor unions and business organizations, contemplates the processes of coalition building and allocation of sectoral payoffs in privatizations. He shows that Menem’s Peronist administration favored the pro-privatization unions in Argentina by according them the right to continue their oversight of the social security system for their members and to expand it to the whole citizenry. In Turkey, depending on the ideological stand of the political party or coalition of parties in power, different labor confederations had dissimilar degrees of access to the state and its resources. Pro-Islamic HAK-IS, for instance, had extensive encounters and intensive dialogues with the privatizing and equally pro-Islamic government of the Justice and Development Party (Adalet ve Kalkinma Partisi, AKP). In contrast, the leftist DISK and the anti-privatization unions within TURK-IS had a much closer dialogue with the representatives of social democratic parties

24


in the Turkish political matrix, such as the Republican People’s Party (Cumhuriyet Halk Partisi, CHP) and the Democratic Left Party (Demokratik Sol Parti, DSP). While partisan links have thus continued in the privatization and post-privatization periods, the considerable weakening of such ties is apparent in Turkey and Argentina. A close analysis of the relationship between the state and the labor unions shows that privatizations have contributed to the mitigation of patron-client nexuses between union leaders and government representatives adhering to different political tenets by simply giving patron-client links visibility. Such exposure has intensified the public’s discontent with corrupt behavior of political and labor representatives. As a result, there are clear signs that stateness has increased in both countries. Stateness refers to the “capacity of the state to specify the terms of economic interaction, to extract resources, and to centralize administrative procedures and coercive means” (Schamis 2002, 192). As such, it is intrinsically related to the capacity of the state to take the ultimate decision (Bakir and Onis 2007). It is also more than that. In stateness, the state also has the autonomy to plan, negotiate, and act. Privatizations have given the upper hand to the state in deciding the rules and the context of the game, even if this means that union leaders could participate in and be active players of privatizations, whether for or against them. Stateness is a critical variable in determining whether or not a given country can benefit from a global economy. It is also intrinsically and strongly related to democratization. Hector Schamis (2002) affirms that in the absence of stateness, democracy collapses (194). This corroborates Linz and Stepan’s (1996) dictum that “modern democratic governance is inevitably linked to stateness” (27). Privatizations, by remolding the nature of the relationship between the leaders of union movements and their political patrons in the government, have contributed to the formation of a “competent state.” The competent state is one that aspires to “steer rather than row.” Such a state ensures that services are provided effectively rather than delivering them itself. The competent state is also community empowering: it encourages local groups to solve their own problems rather than dictating bureaucratic solutions (Rondinelli and Cheema 2003, 246). It strives to use privatizations to interlink the effectiveness of the government with the efficiency of markets while pursuing the collaboration of all actors, (Cheema 2005, 152) including that of labor.


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Unions’ Internal Organization: Internal Union Democracy The internal organization and functioning of labor unions remains a mystery in political science literature. Although most of the unions in the developing world publish pamphlets and booklets that explain their bylaws and the ways in which they function internally, the implementation of these rules might not always conform with what is written either in their own publications or in the national Constitution. Theoretically, union elections could result in the selection of the same group of people over and over again because of the advantage of incumbency. All the same, suspicions of electoral fraud in union elections are widespread, both in Turkey and Argentina. This study failed to detect any significant effects of privatizations on the internal organization of unions in Turkey or Argentina. Several union leaders and the diverse groups of the rank and file interviewed for this study all affirmed that the election procedures had not undergone any changes whatsoever since or due to privatizations, nor did they perceive any such changes in how elections were conducted. This was the case regardless of whether the internal organization was perceived to be undemocratic or democratic at the start. In Turkey, for instance, workers consistently pointed to the lack of turnover as the major reason for the perceived lack of democracy in unions’ internal organization. In Argentina, despite the same lack of turnover in top leadership positions, unions’ internal organization was deemed to be essentially democratic by a majority of the respondents. The main justification offered by the Argentine rank and file was that the first-level union elections, for shop representatives, were generally free and fair. In neither Turkey nor Argentina, however, did workers perceive any effect of privatizations on the internal democratization of unions. The finding that privatizations do not seem to have any perceived effects on the internal organization of labor unions is intrinsically important. This is because it goes against the idea that privatizations might enhance unions’ internal democracy by the spillover effects of the decrease in partisan links between representatives of the unions and the government. The fact that no such change has taken place might be explained by the learning effect: it takes time for actors to learn to react to new conditions brought about by privatizations.17 This explanation is buttressed when one considers the rise of a new type of union leader at the local level of union representation in Argentina. As a general observation, the more a union was involved

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in privatizations, the more salient was the change in the attitude and behavior of the local union leader interviewed. In Argentina, local union leaders in the post-privatizations period tend to be younger, more educated, less politicized, and more pragmatic than national union leaders. Local union leaders are also more ambitious, pursuing higher education simultaneously, and are familiar with financial markets and their ups and downs. The leaders of the Union of Metallurgical Workers (Union de los Obreros Metalurgicos, UOM) in San Nicolas, Gran Buenos Aires, explained this obvious but gradual transformation of the profile of local union leaders by the indispensable necessity to “catch up” with the class of employers: if they, the union representatives, learned the “employers’ language,” the chances were that they could draft more effective and successful collective agreements.18 Lawyers working for various labor unions and labor politicians corroborated the same trends in the UOM of San Quilmes and in several other Argentine unions at the local level.19 In Turkey, the same “thirst for professional unionism” was clearly present among local union leaders. The Bursa branch representative of DISK-affiliated Union of Metallurgy Workers (Birlesik Metal, BM), for instance, forged ties with the union representatives of the factory in Germany where the same private company as the new private owner of the Bursa plant operated. As such, better conditions were obtained in plant-level negotiations with the new employer, during and after privatizations.20 The new union leaders with a new identity and view of the world emerge from the bottom in Turkey and Argentina. Such leaders prefer negotiation rather than rebellion as the main tool for dealing with the private sector and the privatizing government. Privatizations play an important role in the emergence and evolution of these leaders since they compel them to learn about the management of ESOs—ways to protect their shares and make a profit from them while keeping their worker identity so that membership levels can stay steady or increase. Such union leaders also influence other union representatives who contest privatizations. The latter intransigent union leaders, in turn, become effective lobbyists, who combine the power of persuasion, social mobilization, and research to negotiate and bring about social reforms. It is no surprise that this gradual change in the identity of union leaders starts from the bottom and at the local level of union representation. This is so because union leaders at the head of confederations and federations are usually perceived as having enriched themselves personally and illegitimately from privatizations.


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Since the very same privatizations caused unemployment, workers and the society as a whole tend to view the top union leaders as the corrupt political allies of an equally corrupt government carrying out fraudulent privatizations. The so-called Gordos in Argentina21 and the TURK-IS leadership in Turkey have often been stigmatized as practicing “yellow unionism.”22 Therefore, as the rank and file becomes more and more discontented with the ways privatizations are handled by the top leaders, the path is paved for the emergence of the new breed of local leaders. The convergent institutional changes that privatizations have created in Turkey and Argentina do not mean that these two countries have responded similarly to privatizations. On the contrary, the historical legacies of state and labor institutions have greatly influenced the individual attitude of workers in the face of privatizations. As a result, Argentine workers have reacted to privatizations in distinct ways than their Turkish counterparts, and vice versa. Divergence of Individual Responses: Apathy and Feelings of Isolation Even though institutions have chosen to adapt to privatizations in highly similar ways in Turkey and Argentina, individual citizens directly affected by privatizations have done so in quite different ways. Focus groups conducted with Turkish and Argentine bluecollar workers who lost their jobs as result of privatizations have demonstrated that privatizations do not have a considerable impact on the political standing and activity of workers, although they may ultimately exert negative effects on their political participation. The same finding came out of focus groups conducted with workers who retained their jobs after privatizations and those who were relocated after staying unemployed for a while. Workers’ political participation in both Turkey and Argentina was instead shaped by a combination of political ideology, rational calculations of expected benefits, and prior civic involvement. In Turkey, more educated, previously active and partisan workers continued to be politically active and mobilized against privatizations. In Argentina, workers previously active in their respective unions were shielded off from the negative effects of privatizations such as downsizing. Most workers in both Turkey and Argentina, however, chose to secure a severance package with as many potential benefits as possible from the new private owner, who typically wanted to downsize.

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The closer a worker was to retirement, the higher was his propensity to try to get the highest short-term monetary compensation and leave the SOE, regardless of the risk of not being able to find another job afterward. This was valid for both Argentine and Turkish workers affected by privatizations. For workers who were younger, better educated, civic minded, and socially and politically active, things were different in Turkey, but not so much in Argentina. A vibrant anti-privatizations grouping called the “Movement of the Victims of Privatization” came into being as soon as the first massive dismissals took place in 2000 with the privatization of the national Petroleum Company (Petrol Ofisi, PO) in Turkey. The rank and file, seeing that union administrators were either uninterested in or incapable of fighting for workers’ rights, got together and formed a national protest movement. Protest marches and recurrent gatherings in front of government buildings and union headquarters were some of the widely used tools of protest. Meetings with local and national government representatives, forging links with civil society representatives, and making their voice heard in the media were other techniques of exerting pressure on the state by trying to shape public opinion against privatizations. The Movement of the Victims of Privatizations was not long lived, however, and failed to become institutionalized due to a lack of trust and commitment on the part of the majority of its members. Nevertheless, it constituted an important learning experience for those workers who actively participated in it and landed a new job as a result of their collective mobilization. Focus groups and in-depth interviews with the Argentine workers affected by privatizations showed a consistent pattern of high disillusionment with unions and a sense of individual worthlessness among those who were dismissed with the “not so much voluntary retirement packages.”23 For Argentine workers, the fight was over once they realized that their respective unions were not backing them up. It was clear from the interviews with the rank and file that unions and union leaders were perceived as demigods in Argentina. Disillusionment and denial that a Peronist government could defy the legacy of Peronism, which had rallied for nationalizations of the same sectors only a few decades ago, were present in the hearts and minds of most Argentine workers.24 This finding is quite interesting since Argentina is a hub of vibrant social movements and political activism by the masses. Piqueteros, cartoneros, villas, asambleas, fabricas recuperadas, and other new social formations abound in Argentina.25 These organizations and movements, however, are generally composed not of former state workers but of young and marginalized individuals who have either never had a job or who come from the private sector.


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Conclusion: The Main Puzzle This book argues that privatizations might have similar effects on institutions in the countries of the developing world, while having divergent effects on their individual citizens. The convergent institutional effects of privatizations can be observed in structural fragmentation, internal organization, and external participation of the labor unions. Accordingly, privatizations result in three different lines of responses and reactions from the unions: (1) explicit and active participation in privatizations (business unions), (2) implicit support of privatizations (clientelistic unions), and (3) strong repudiation of privatizations (civic unions). Privatizations also decrease or mitigate the patrimonialist and partisan associations between the labor union leaders and government representatives and, as such, contribute to the conditions that make the formation of an effective and autonomous state possible. Finally, although privatizations do not seem to have immediate effects on unions’ internal democracy, such as more transparent and competitive union elections, they do contribute to the emergence of a new type of union leader at the local level. The new leader acts and thinks more professionally, is better educated, has more competitive goals, and describes himself as a “worker at heart but capitalist in mind for the good of the workers in this new era.”26 The impact of the institutional effects of privatizations on democratization is indirect because it is the reaction of unions to privatizations, which might incidentally promote democratization. Privatizations, in other words, act as an invisible hand at the institutional level. This is because privatizations incite unions to start looking for ways to adapt and survive in a new environment. Were it not for privatizations and the disturbances caused by them, unions would not have to renew their strategies and adapt to the changing circumstances. The democratizing effects of privatizations can only take place if (1) the important influence of corrupt and rich union leaders is broken, (2) increased state autonomy does not translate into arbitrary or personalist power, and (3) individual workers and marginalized citizens can effectively be incorporated into the system. The effects of privatizations at the individual level are divergent in Turkey and Argentina. Although most workers choose short-term monetary compensation when downsized as a result of privatizations, the more educated, relatively younger, and politically active workers choose to organize against privatizations in Turkey. Social movements and increased political activism on the part of the rank and file depend, however, on the historical and cultural legacies of the country

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at hand. While Turkish workers who lost their jobs as a result of privatizations form vibrant social protest movements, Argentine workers do not. The higher institutional and political weight of the unions and the imposing weight of Peronism on the elite might explain the difference between the Turkish and the Argentine workers’ divergent responses to privatizations. In other words, the Argentine union leaders’ astute use and manipulation of the Peronist ideology might have deterred the rank and file from taking any independent action with regard to privatizations. The lack of a parallel labor ideology in Turkey, on the other hand, might have facilitated Turkish workers organizing and contesting privatizations without the backing of their unions. At the end, however, workers in neither country have been able to form enduring social movements, nor have they increased their civic activism. In conclusion, the Turkish and Argentine experiences indicate that privatizations tend to democratize (labor) institutions, while they negatively affect individuals since most of the unemployed ultimately choose not to mobilize and cease to become union members as a result of privatizations. While these findings should be taken with a grain of salt due to nonrandom sampling and can hardly be generalized beyond Turkey and Argentina, the fact that they emerge from two countries so different from each other should be enough to at least stimulate research in the parts of the developing world that are implementing privatizations and undergoing democratization at the same time. For now, the task is to process-trace the rich histories of labor politics in Turkey and Argentina so that we can better understand the ways in which privatizations have influenced labor and democracy there.

Chapter 2

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Hi story of Labor Developments in Turkey 1 From State-Dependent to Cautiously Autonomous Unionism

T

urkey is the heir to the centuries-long Ottoman Empire and is currently the only secular democracy in the Middle East. Of its 70 million inhabitants, 98 percent subscribe to the faith of Islam, although the ways in which religion is practiced and lived vary considerably across its myriad ethnic and religious groups. The highly important political positioning of the country in world politics is mainly due to its role as the essential bridge between the East and the West, both in geographical and cultural terms. This chapter traces the emergence and the evolution of the Turkish labor movement. As such, it provides a background for understanding the present-day reactions to privatizations on the part of the Turkish labor unions and the rank and file. It identifies three idiosyncratic characteristics of the Turkish labor movement: (1) the patrimonialist nature of labor relations, with the clear dominance of state, as opposed to the more corporatist Argentine labor system, where the supremacy of the state is more nuanced; (2) the relatively weaker political position of labor unions in Turkish politics as compared with their Argentine counterparts; and (3) the lack of an ideology equivalent to Peronism in the historical evolution and structuring of labor relations. These three factors have rendered the reactions of Turkish labor unions to privatizations weaker, the divisions within the labor union system less acute, the internal structure of unions

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less affected, and the external role of unions less transformed than in post-privatizations Argentina. Yet, changes have occurred and are all the same present in Turkey as in Argentina. The New Institutionalist approach,2 followed in this chapter, illustrates well the reasons why individual Turkish workers have reacted to privatizations without their unions’ backing, and even against their stance. The three structural/institutional variables listed above have obviously contributed to this divergent outcome at the individual level of analysis. A fourth factor that has influenced the mobilization of Turkish workers against privatizations is that economic crises prior to privatizations were less powerful and thus less controversial in Turkey than in Argentina. This made Turkish workers bolder since they did not have to worry about going back to a hyperinflationary situation. It was, therefore, easier for them to contest privatizations. Fifth and finally, Turkish labor, although severely weakened by the 1980 military coup and the ensuing military dictatorship, has not experienced atrocities comparable to those committed by the Argentine military during its Dirty War (1976–1983). This has made Turkish workers less fearful politically in terms of mobilizing to defy the privatizing authorities. The lack of any fear of hyperinflation, in turn, has made them more flexible economically and less violent socially when contesting the changes brought about by privatizations. These and other characteristics of Turkish labor unions and workers are apparent in the following historical analysis of labor developments in Turkey.

The Turkish Political Context: A Historical Perspective While the scope of analysis here is limited to the context of labor, one needs to understand the complex social, political, and economic underpinnings of the Ottoman system to better grasp the evolution of the Turkish labor movement. To avoid conceptual stretching, it suffices to say that the Ottoman Empire was a sultanistic regime with virtually no civil society.3 Labor unions were not a part of the Ottoman system, either in theory or in practice. Kernels of the labor movement started to take root with the first modernization efforts of the Ottoman State in the mid-1800s. Turkey’s European past goes as far back as the 1800s, when modernization initiatives were undertaken during the reigns of Sultan Mahmut II and Sultan Abdulmecit. The liberalization efforts and the shift to a constitutional monarchy in 1876 under Sultan Abdulhamit prepared the terrain for the end of the Ottoman regime following its

H i s to ry o f L a b o r D ev e lo p m e n ts i n Tu r k ey

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defeat in World War I. Europeanization continued at full speed with Ataturk’s founding of the Turkish Republic in 1923. Ataturk, having liberated the country from the invading Allied forces, abolished the Sultanate in 1922 and the Caliphate in 1924. He banned the wearing of religious costumes in public while encouraging the wearing of suits and hats instead: this was established in a constitutional law in 1925. Ataturk also replaced the Arab alphabet with the Latin alphabet in 1928, adopted the Western calendar and units of measurement in 1931, and accorded Turkish women the right to vote and to be elected as government representatives as early as 1934.4 Elections were instituted with the founding of the Turkish Grand National Assembly (Turkiye Buyuk Millet Meclisi, TBMM) in 1920. The declaration of the Republic in 1923 inaugurated a period of single-party government by the party founded by Ataturk himself. This period in Turkish history can be characterized as an authoritarian regime with limited pluralism.5 Transition to a multiparty system took place in 1946.6 Since then, Turkey has instituted a plethora of political reforms toward the consolidation of its democracy. A prominent feature of the Turkish democratization process has been its interruption by consecutive military interventions, often executed with the alleged objectives of restoring order and protecting the secular nature of the Republic. The high degree of fragmentation of the party system, apparent in unstable coalition governments, has also complicated the democratization process. After the ideological polarization of the 1960s, the 1970s, and the 1980s, marked by three military interventions, the neoliberal Motherland Party (Anavatan Partisi, ANAP) came to power in 1983 and ruled until 1991. The period 1991–2003 was characterized by successive coalition governments and electoral volatility. The election of the right-wing Justice and Development Party (Adalet ve Kalkinma Partisi, AKP) with an Islamic pedigree, in 2003, finally put an end to the political instability produced by coalition governments. The AKP government also brought stability on the economic plane while reshaping the divide between the secularist and the more conservative sections of Turkish society.7 Although the main determinants of the democratization process in Turkey, as anywhere else in the world, are political, politics has not operated in isolation from the economic arena. Much to the contrary, economics has always greatly influenced the political process of democratization in different and important ways. It has done so with the political effects of consecutive economic crises as well as the social impact of various belt-tightening structural adjustment

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plans implemented under the guidance of international financial institutions. How has the economic restructuring affected the Turkish democratization process? What are the best empirical tools to study this complex relationship? One way to capture the effects of economic restructuring on the democratization process is to look at the changing structure and role of the labor unions and the shifting attitudes of workers in Turkey. Overall, the Turkish labor movement can be characterized as weak and dispersed when compared with equivalent labor movements in the rest of the world. The few studies on the formation and development of Turkish labor institutions attribute these characteristics to the lack of factors that, in general, yield a vibrant labor movement. In contrast with the Western European experience, for example, there was no feudalism, no landlords, no serfs, no bourgeoisie, no aristocracy,8 no industrial revolution, no civil society, and no proletariat that could have offered the necessary bases for potential labor institutions to flourish in Turkey. The sultanistic regime of the Ottoman Empire (1299–1923) and the quarter century of authoritarian single-party government in the beginning of the Turkish Republic (1923–1946) did not help in promoting unionism.

The Turkish Labor Movement: A Historical Perspective One way to understand the evolution of the Turkish labor force and institutions is to look at their historical progression. Paul Pierson (2000) argues that in determining sociopolitical outcomes timing, sequencing, and a few key events matter more than the rational ordering of preferences of key actors. As such, the order in which certain key events take place becomes particularly important in causing the end results. For such an approach, the appropriate methodology is a historical narrative as opposed to a variable-centered statistical analysis (Collier and Mahoney 1996). From such an analytical perspective, the history of the Turkish labor movement can be divided into three phases: (1) the formation phase starting with the establishment of the first SOEs in the erstwhile Ottoman Empire, (2) the development phase starting with the transition to a multiparty system in the Turkish Republic, and (3) the restructuring phase starting with the switch to free-market economics in the global era. The critical junctures that have initiated and determined each one of these phases are (1) the 1838 Free Trade Agreement between the Ottoman Empire and Britain, (2) the 1946


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transition to a multiparty democracy, and (3) the 1983 election of Turgut Ozal’s neoliberal government.9 Formation of Labor: An Ethnically Segregated Workforce Divided by Nationalism The Ottoman Empire consisted of a highly centralized state structure under the absolute hegemony of a sultan, whose power extended to all spheres of life. As the sole source of power, the sultan made sure that no other locus of control existed, including labor. The sultan followed two approaches against the formation of a potential labor movement. One was the legal route of making laws that explicitly banned any association based on class. The second was the so-called timar system. The timar system divided all of the land in the empire among the state, the peasants, and the soliders called the sipahis. The state owned all the land, which was then rented out to peasants. Peasants were free to leave at any time. But, if they chose to stay, they had to work on their assigned plot of land to keep production going. They gave fixed portions of their produce to the state and kept the rest for themselves and their families. As for the sipahis, they were soldiers assigned to specific plots of land to ensure steady and peaceful production while ensuring the safety of the peasant families. The principal objective of the system was to feed the large Ottoman armies. Peasants, in the timar system, were not allowed to sell, transfer, donate, mortgage, or inherit the land they worked on. They were not evicted as long as they cultivated their land and paid their taxes in the form of produce. Eviction occurred only if the land in question had stayed idle for three consecutive years. Then, it was transferred to another peasant (Yazici 2003, 55–64). This cycle ensured that state and society relations were stable and quid pro quo. The timar system, as such, precluded the emergence of a feudal society.10 It made sure that neither big landlords nor serfs would emerge as separate and self-conscious social groups while preserving the mainstay of societal organization based on small subsistence farming by peasant families. A working class did not fit anywhere in this structure. If the timar system was the mechanism of control in the countryside, guilds were their counterpart in the cities. Guilds were artisan associations of small shopkeepers devoid of any employer-employee relationship found in production lines in big factories. The organizing principle in the guilds was expertise, not rank. Typically, three or four apprentices worked alongside a qualified workman. There was ample

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opportunity for upward social mobility. One only had to have talent and acquire experience by working for a time on a specific craft. Craftsmen and apprentices were not wage earners. Instead, they were part of an elaborate scheme of social and ceremonial institutions. Strong links of brotherhood among the craftsmen constituted the power of the guild system. Artisans engaged in a given craft came together to form the professional associations called ahis.11 The task of the ahis was to draft contracts and agreements between craftsmen and the state. They also kept records of the prices of goods purchased and sold by members. Yet, along with and in addition to these administrative duties, ahis were fraternity associations with an important symbolic and social value. An apprentice who desired to join an ahi association, for example, had to be shaved, had to wear a salvar,12 and had to repent for all his sins. Nonbelievers, non-Muslims, scientists, drinkers, masseurs, butchers, surgeons, hunters, gamblers, and fraud-artists were not allowed to apply for membership. The centralized state structure and the absolutist power of the sultan, along with the elaborate timar, guild, and ahi systems, were extensively used by the Ottoman Palace to control the society and divide it into two large classes: (1) the “governors” consisting of the military and the palace bureaucracy and (2) the “governed” comprising peasants and a few categories of craftsmen. This societal composition was very different from what a typical pre-capitalist Western society looked like in the early 1800s: a large aristocracy composed of absentee landlords and contested by the emerging middle class of entrepreneurs and the large flocks of serfs who were gradually migrating to cities to become wage earners in the factories being established as result of industrialization. Labor started to form in the Ottoman Empire concomitant with the liberalization efforts undertaken in the second half of the nineteenth century. The 1838 Free Trade Treaty signed by the empire opened the Ottoman markets to England while planting the seeds of the Turkish labor movement. The treaty in question decreased import and export taxes on all except the local products sold locally within the empire. It also brought in considerable foreign direct investment and new businesses. As such, it fostered the first industrialization endeavor in the empire while contributing to the gradual disintegration of the traditional guild system (Ozugurlu 2003, 51). Small and docile peasant families of the timar system and the inexperienced apprentices in the guilds now had the option of working for firms set up by the Europeans in collaboration with the Ottoman Palace. They could, in other words, become wage laborers in the first SOEs of the empire.


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The first SOEs, which were launched with European capital, technology, and know-how and which operated under Ottoman supervision, were at the root of the emergence of a segregated working class in the Ottoman Empire. Established in 1840 by foreign capital and located in sectors working to meet the needs of the army, such as naval arsenal and machinery, the first SOEs promoted a workplace organization in which workers were separated according to their ethnicity. Skilled workers and the technical personnel were Europeans. Unskilled workers were recruited from among the non-Muslim subjects of the Ottoman Empire. There were a few Muslim Turks hired as seasonal or contracted unskilled personnel (Onsoy 1988, 57). Economic liberalization, instigated with the Free Trade Treaty, was quickly followed by political modernization, with important consequences for the incipient workforce. The wide-ranging Reorganization Reforms of 1839 (Tanzimat Reformlari) initiated the protection of life and property, tax reform, the elimination of corruption, and the reform of the military in the Ottoman Empire. Workers were also included in these reforms. They could now have a say in the running of workplaces outside the scope of the guild system. The 1876 Constitution (Mesrutiyet), the empire’s first, included the right of association. This meant, at least in theory, that it was now legal to form unions. The kernels of what would later on become labor unions soon started to emerge in the empire. Although segregated by ethnonationality, the emerging working class was unified around one common issue in this initial period—the apprehensiveness of all toward the dictatorship of Sultan Abdulhamit II. The first labor organization was founded in 1895 as a reaction to the increasing despotism of the sultan.13 Secretly established by the cannon-ball factory workers, who were influenced by liberal Western ideas, the Ottoman Workers Association (Osmanli Amele Cemiyeti, OAC) pledged to remove Abdulhamit from power. It was disbanded by the secret police only a year after its formation (Toprak 1982, 22). Although symbolically considered the first labor organization, the OAC was not a union in the current sense of the term. It was a civic alliance of bureaucrats, intellectuals, and worker representatives who had allied to topple the dictatorial government. While secret labor organizations were unsuccessful in putting an end to the tyrannical regime of Abdulhamit II, economic difficulties in the mid-1800s were. The empire had borrowed heavily from Britain and France to finance the Crimean War of 1854–1856. This war and others financed thereafter with European funds were lost. The formation of the Ottoman Bank with British and French aid could not

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solve the empire’s financial plight. The Ottoman State declared bankruptcy in 1876, the same year in which the Constitutional monarchy was instituted. As a result, creditor European nations established the Office of Foreign Debt Management (Duyun-i Umumiye, DIU) in Istanbul in 1881.14 The foundation of the DIU signaled the beginning of the second wave of foreign direct investment in the empire. Europeans invested heavily in the ports, railways, mines, and commercial agricultural products such as cotton and tobacco. French investors obtained management rights over the boron15 mines in Balikesir in 1865. The Italians and the French acquired the administration of coalmines in Eregli in 1882. The increasing penetration of foreign ownership into the empire exacerbated the segregated workplace organization and introduced a discriminatory wage system: foreigners received monthly wages, locals daily wages, and Turks hourly wages. By the same token, the highest wages went to the foreigners, followed by the local non-Muslims, and finally, the Muslim Turks. The declaration of the Second Constitutional Monarchy (Mesrutiyet II) first made it seem like the segregated workplace organization could be reformed. The Young Turks,16 who were the architects of this important 1908 liberalization effort, initiated the National Economic Program (Milli Iktisat Programi, MIP). The MIP aimed at the creation of a unified nation of free enterprise and competition (Ozugurlu 2002, 83). Some former members of the OAC formed the Ottoman Association for Progress (Osmanli Terakki Cemiyeti, OTC) in August 1908. Workers of the Eastern and Anatolian Railway Companies formed organizations that very much resembled labor unions. Nevertheless, the segregated workforce organization initiated by the first SOEs survived. Most members of these first labor organizations were non-Muslim subjects of the empire, that is, Jews, Greeks, Bulgarians, and Armenians (Quataert 1987, 149). While classical liberalism was particularly prominent in the initial phase of the Young Turk rule in 1908, it was gradually replaced with extreme nationalism. The Young Turk government undertook the nationalization of businesses owned by foreigners and non-Muslims. To carry out the transfers, it established provincial mobilization bureaus that provided easy credit to Muslim and Turk entrepreneurs for the formation of national cooperatives to buy out foreign firms. The plan was to get rid of the ethnonationalist organization of the workforce. Accordingly, union activities would be restricted to forming worker cooperatives, establishing credit unions and reserve funds, and setting up night schools and educational conferences for workers.


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Unions would not be allowed to embrace Socialism or affiliate with international labor movements. Even though the idea of a labor union was now embraced for the first time in the empire, it was still unclear how unions differed from guild associations. Like guilds, unions were perceived to be reliable tools for controlling the incipient working class in the changing order of the post-Tanzimat era. Therefore, unions could exist only as complementary to the state and not against it. The state was to continue to be the sole authority in all matters, including employeremployee relationships. There is no consensus among historians on the first strike that took place in the empire. Some attribute it to telegram workers in Beyoglu, Istanbul, others to ship workers in Kasımpasa, Istanbul, both in 1872 (Agrali 1967, 18). Nor is there a consensus over the number of strikes in the period 1870–1907. Alpaslan Isikli (2002) claims that there were 22, while Turan Yazgan (1982) argues there were 50. What is clear, however, is that the first mass protests and strikes by the labor force took place between 1900 and 1910. The most active year was 1908. Known as the “1908 Strikes” (Sencer 1969, 205), these mobilizations included one hundred-thousand workers unified around demands of improving working conditions, getting wage increases, and guaranteeing regularity in payments. Strikers were unsuccessful in securing these demands. The few worker protests that took place in the second half of the 1800s could not become part of a collective memory of resistance mainly due to the ethnonational divide in workforce organization (Koc 1992, 329). By the end of the first decade of the 1900s, things were different. The demands advanced by the strikers were significantly different in 1908 compared with before. The small-scale protests of the period 1870–1907 had mostly been targeted toward wage increases. In 1908, workers’ demands became much more political: the 76 strikes that occurred during the first few months of the Young Turk government sought the abolition of ethnic segregation in the workplace (Guzel 1980). Most of the 1908 Strikes occurred in foreign-owned firms, as opposed to the post-Tanzimat strikes that occurred in the SOEs. Foreign business owners were afraid that the 1908 strikes would escalate into a national fury of violence. They were particularly upset when labor protests culminated in sporadic independence movements in different parts of the empire. They pressured the Ottoman State to repress the uprisings. The consequence was the first strike and union laws in the empire: the Strikes Law (Tatil-i Esgal Kanunu) followed

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by the Associations Law (Cemiyetler Kanunu), both promulgated in 1909. The first worker movements in the empire, therefore, transpired as resistance movements against both the Ottoman State and foreign capital (Agrali 1967, 18). The Associations Law banned any association based on family, race, gender, and class. The Strikes Law disbanded all unions and worker associations. It prohibited strikes in firms dominated by foreign capital. This comprised firms operating in the public sector, such as tramways, railways, tobacco plants, and ports. Instead of strikes, a “system of compromise” was instituted. Accordingly, in case of disagreement between employer and employee, a commission of three representatives from both the business and labor groups would be formed. If the commission could not reach an agreement satisfactory to both parties, strikes could be staged (Gulmez 1985, 799–800). The Young Turk government justified this relapse in political liberalization by arguing that strikes create a bad reputation, thereby hampering the foreign investment desperately needed in the empire. The onset of World War I in 1914 silenced the workers even more. It was very hard for the Christian and Muslim Ottomans to rally under either socialist or other ideological causes when the nonMuslim workers were perceived by the Turkish workers to be in close contact with the British, the French, and the Greek occupying forces. Nationalism hampered the first plan for a general strike in the history of the Ottoman Empire in 1921. The establishment of the Turkish Republic in 1923 did not change the main rationale vis-à-vis the nascent labor force. The goal of the Republican People’s Party (Cumhuriyet Halk Partisi, CHP) government was to create a classless national society. Party representatives questioned the need for a labor movement on various occasions. Occupational and social groups, such as farmers, craftsmen, businessmen, workers, professionals, merchants, and civil servants, were desired as constituents of the new Turkish society. At the same time, however, it was indispensable that these groups maintained harmonious relations with one another. Class struggle was simply not part of the Turkish nation-building project. The 1936 Labor Law reiterated the reigning state ideology dating back to the late Ottoman times: “The Turkish worker is not and should not be a trouble-maker. Only a patriotic labor movement as a complementary force to the central power of the state is permissible” (Turkdogan 1981, 611). Another reason why the early Turkish labor movements and institutions rested on weak grounds was that there were only a handful of workers to start with. The Ottoman Empire had 282 industrial firms


41

with 14,060 workers as of 1915. Of the total population of 13.5 million in 1927, 76 percent lived in agricultural areas, leaving a mere 24 percent residing in cities. Only 8.9 percent of the working population was employed in the industrial sector in that year. This number had increased to 11.7 percent by 1935 (Yazici 2003, 105). Small firms and businesses dominated the Turkish industry. More than 70 percent of businesses employed less than four workers in the beginning of the Republic. This number was up from two workers in the late Ottoman Empire (Isikli 2003, 7). The unification and institutionalization of labor became more difficult in the post-World War I era since the invasion of the empire by the victorious allies once again led to the explosion of ethnonationalist currents among workers. Then, the onset of World War II buttressed the state policy of excluding an active, and potentially troublemaking, labor force from the sociopolitical scene. Although Turkey did not take part in the war,17 economic hardship and political oppression ruled the day. Paid mandatory work and longer hours were legislated during the war. Many women and children joined the workforce to make up for the men drafted into the army. The 1940 Customs Administration Law (Orfi Idare Kanunu, OIK) suspended the freedoms of speech, meeting and association, protest, organization, mobilization, and press. In the same year, the National Security Law introduced the close regulation of commerce, industry, and agriculture. Martial law was declared on December 17, 1946, and stayed in force until December 23, 1947. Development of Labor: Politicized Labor Divided by Ideologies Labor unions finally became legitimate actors in Turkish politics with the transition to a multiparty system in 1946. This period was one in which the governing party since 1923, the CHP, and the newly emerging opposition party, the Democrat Party (Demokrat Parti, DP), found themselves in a constant struggle over who would win the workers’ vote. To that end, the CHP stuck to its plan of a classless society with a unified and nationalist labor. It legislated the Employer and Employee Unions and Union Federations Law (Isci Ve Isveren Sendikalaiı ve Sendika Birlikleri Kanunu) in 1947. The law sought to inject nationalism and statism in the newly formed labor organizations. According to this law, any union that acted against the national interest and waged strikes or organized lockouts could be shut down for anytime between three months and one year by the courts (Gungor 2002, 156). Unions were also to abstain from becoming involved in politics.

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Ironically, however, the CHP simultaneously launched its own network of unions called the CHP Worker Organizations, which were subsequently unified under the aegis of the Federation of Istanbul Labor Unions (Istanbul Isci Sendikaları Birligi, IISB) in 1948. The IISB worked in close cooperation with the Ministry of Labor and was a political organization par excellence (Erisci 1951). The DP’s counterpart for the IISB was the Free Labor Unions Federation (Hur I˙sci Sendikalari Birligi, HISB). The HISB and the DP, as opposed to the IISB and the CHP, supported the right to strike. They maintained that the right to strike did not go against national interest. On the contrary, they argued that this was a basic democratic right that Turkish workers would use in a beneficial way. The divergent positions of the CHP and the DP on the strike issue contributed to the latter’s coming to power in the 1950 elections strongly backed by the working class. While labor was active and highly politicized during the DP’s reign, the party’s strong prolabor campaign rhetoric took a shift once in power. Instead of its promised liberalization package, the DP government started to look for ways to make unions dependent on the party. It did that by (1) interpreting the 1947 Unions Law requirement of union noninvolvement in politics in different ways, thus seeking to politicize unions in conformity with its ideology and political agenda; (2) obstructing any union activity contrary to its precepts, using police brutality or outright shut-down; (3) introducing the legal cap of 120 liras18 per month in union revenues, thereby making unions financially dependent on the state; and (4) disbursing state money to friendly unions. The DP also abandoned its campaign promise of allowing strikes and did not tolerate a single one for the ten years during which it governed. Furthermore, it resuscitated the Mandatory Arbitration Mechanism from the World War II era. According to Work Conflicts and Arbitration Regulation decree, the state was to review and approve all cases involving any employer-employee conflict. The state’s decision in each case depended on the relationship between the government representatives and the union leaders involved in the dispute (Gungor 2002, 177). The hard line adopted by the DP was, in large part, due to its objective of gaining the support of the emerging Anatolian bourgeoisie. The degree of politicization of the union leaders was surprisingly high given that the Unions Law stated explicitly that they should stay out of politics. The Worker and Friends of Workers Deputies Congressional Support Committee (Isci ve Isci Dostu Milletvekillerini


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Destekleme Komitesi, IDK), formed in 1954 by ten deputies who were also union leaders, is the quintessential proof of the partisanship and politicization of the Turkish labor unions (Isikli 1990, 322). The most pressing goal of this committee, like the Workers Party19 before it, was to bring more worker deputies into parliament. The committee was dispersed and its members prosecuted on basis of the fifth clause of the Unions Law. The atmosphere of political liberalization created by the transition to a multiparty system and the economic freedom preached by the DP ultimately led to the formation of the first and most important labor confederation of Turkey. External dynamics accounted largely for the formation of the Confederation of Turkish Trade Unions (Turkiye Isci Sendikalari Konfederasyonu, TURK-IS), although some internal factors also played a role.20 The United States’ rising fear about a possible communist insurgency in Turkey contributed to the proclamation of the 1947 Truman Doctrine and the Marshall Aid Plan for Turkey and Greece. In addition to the economic aid plan, the United States sought to organize the Turkish labor force in the American style, that is, as a nonpolitical, highly centralized, and well-organized movement. As a result of countless meetings organized by the International Confederation of Free Trade Unions (ICFTU), the American Federation of Labor (AFL), and the Agency of International Development (AID) with Turkish union and government officials, TURK-IS was officially established in Ankara on July 31, 1952. Irving Brown, an American unionist, was especially active in the creation of TURK-IS. Brown emphasized in many of his speeches that TURK-IS would (1) represent the ideals of freedom and democracy against the Cominform;21 (2) be centralized, with a high degree of patriotism among its members; (3) reject affiliation with political parties; and (4) repudiate class struggle to favor a type of unionism with close cooperation between employers and the state (Beseli 2002, 245). On the basis of these ideals, TURK-IS grew rapidly. By 1954, there were 18 federations and 150,000 workers affiliated to it (Sulker 1969, 81). By 1960, there were 800,000 formal workers of whom 300,000 were unionized. By 1967, the number of unionized workers affiliated with TURK-IS had reached anywhere between 850,000 and 1.5 million (Yazici 2003, 129). The de jure separation between political parties and unions meant, in the Turkish case, the de facto symbiotic relationship between the two. Union representatives in TURK-IS were eager to, and could, become deputies in the Turkish Parliament. On various occasions, progovernment union leaders threatened their members that if they

44


were not elected, the government would disband the confederation (Gungor 2002, 179). Under the DP government, all union activity was tightly controlled and had to be approved by the government. In 1953, for instance, TURK-IS tried in vain to join the ICFTU, which ironically had helped found the Turkish confederation in the first place. Due to the DP’s disapproval, it was not until the 1960s that TURK-IS could accomplish this project of its own. The dependency relationship between the official labor confederation, TURK-IS, and the state had reached its zenith by the mid-1960s when the confederation ratified the nature of the relationship into its bylaws and dubbed it partilerustu politika or the “politics of above parties (PAP)”. The PAP doctrine reiterated the traditional aversion to partisanship, but in practice it meant quite the opposite. PAP was a strategy for survival that consisted of maintaining friendly relations with the governing party or parties, regardless of their political leanings, their democratic character, or workers’ interests. In other words, PAP was not about staying outside politics, as it seemed to imply; it was about getting more ingrained into it. It was an implicit compromise, a pact of collaboration between the unions and the government shrouded in the rhetoric of “patriotic unionism” (Ozugurlu 2002, 181). PAP made sure that a stable and predictable quid pro quo relationship existed between TURK-IS and the state. Accordingly, labor would approve the politics of a given government. The government, in exchange, would let the unions and union leaders govern independently. TURK-IS also ensured its financial survival with PAP. The state had a part of Marshall Aid reserved for TURK-IS, which upon receiving the money from the government would distribute it to its affiliated unions (Beseli 2002, 247). The aid was very important for TURK-IS since monthly dues from members were limited and there was no check-off system.22 The practice of having the government pay TURK-IS continued until 1962. After that, aid money was directly given to the confederation by the aid agencies. This made TURK-IS somewhat less dependent on the state but increased its internal centralization: it was now the headquarters of the confederation, which disbursed an important sum of money to the local unions. The confederation also had monopoly over educational travels to the United States. Since it became the locus of financial and political power, opposition by member unions decreased substantially. The top-down state-labor nexuses were thus now reproduced in the confederation-union-section relations.


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If it was the right to strike that divided the emerging labor force in the 1950s, it was the murky PAP principle that did so in the 1960s. The two main political parties, the secular-modernist CHP and the liberal-traditionalist DP, once again played out the controversy over this doctrine rather efficiently to manipulate and divide the labor movement. The CHP mounted its opposition to the exceedingly intimate relations between the DP government and TURK-IS officials. It prepared the so-called Declaration of First Objectives (Ilk Hedefler Beyannamesi, IHB) in which it demanded a quick end to partisanship. It also called for the institutionalization of a senate, free and fair elections, independence of universities, the establishment of a High Arbitration Board (Yuksek Hakem Kurulu, YHK),23 a Constitutional Court and a High Economics Board (Yuksek Ekonomi Surası, YES), the prosecution of corrupt civil servants, and greater attention to social justice (Gungor 2002, 185). The IHB was subsequently incorporated into the 1961 Constitution. Following the CHP’s ratification of the IHB, the DP government grew more authoritarian. At the same time, society became exceedingly polarized between the DP and the CHP camps. These developments precipitated the military coup of May 27, 1960, which brought the CHP back to power after an interlude of 10 years. The coup produced a regime with both democratic and anti-democratic elements. The right to strike and collective bargaining were granted for the very first time since the founding of the Republic. This was a landmark development in Turkish political and labor history. However, the accomplishment did not come as a result of a bottom-up process whereby workers and unions mobilized to obtain these rights. Instead, these rights were promulgated largely as a result of the personal efforts and political agenda of the then minister of labor, Bulent Ecevit. With the liberalization of labor and expanded freedoms, new subgroups sprang up within the Turkish labor force. The first internal fissure in TURK-IS occurred in February 1961, when 12 union leaders left the confederation to form the Workers Party of Turkey (Turkiye Isci Partisi, TIP). The party strived for independent unionism. Its raison d’être was stated as the creation of a union system devoid of PAP and the organic relationship between TURK-IS leaders and the state. TURK-IS isolated the TIP and accused it of being communist. At that point, the TIP had started flirting with the idea of forming a new confederation. The initiative of forming a new labor confederation in Turkey did not come from the TIP, however. When TURK-IS decided to stop a strike organized in the Pasabahce Crystal Factory in 1966, the

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striking unions, that is, the Petroleum Workers Union (Petrol-Is), the Glassworkers Union (Kristal-Is), Mineworkers Union (Maden-Is), the Rubber Workers Union (Lastik-Is), and the Istanbul Print Workers Union (Basin-Is), were temporarily expelled from TURK-IS. As a consequence, the last three unions came together with the previously independent Food Sector Unions (Gida-Is) and the Turkish Mines Union (Turk Maden-Is) to form the second labor confederation in Turkey. The Revolutionary Labor Unions Confederation of Turkey (Turkiye Devrimci Isci Sendikalariı Konfederasyonu, DISK) came into being on February 13, 1967 (Beseli 2002). The three main reasons for the formation of DISK were: (1) TURK-IS was not a real worker organization, (2) it was based on American aid, and (3) its adherence to PAP did not work according to its original intent. DISK wanted to create an alternative to the dominant PAP principle. Its plan was to establish a kind of unionism that would be political, independent, and revolutionary all at the same time. In the interim, it pushed for land reform and a more extensive and efficient public sector. DISK had 50,000 members upon its founding (ibid.). The third split from TURK-IS came in 1971 with the formation of the Movement of Social Democrat Unionism (Sosyal Demokrat Sendikalar Birligi, SDSB). TURK-IS members, who defined themselves as Social Democrats,24 were disturbed by the fact that the rank and file was getting closer and closer to DISK. They pointed to PAP as the main culprit for this decline in TURK-IS membership. Ironically, therefore, PAP, whose purpose was to protect the unity of the union movement, had become the main reason for the three consecutive splits from TURK-IS at that point: first in 1961, with the formation of the TIP, then DISK in 1967, and finally, the SDSB in 1971 (ibid., 243). TURK-IS did not try to compromise in order to prevent the secessions. Divisions in the union movement were caused not only by the political observance of PAP. The escalating economic difficulties were also responsible for the crisis in which the unions found themselves in the 1960s. The Import Substitution Industrialization (ISI) model, in effect since the 1930s, was not working properly anymore. Social unrest had reached its zenith by 1968. Student and worker protest movements, strikes, factory takeovers by workers, and university takeovers by students characterized the period 1968–1970. The army intervened on March 12, 1971, once more, to restore order. The first deed of the 1971 military-backed civilian government was to change the liberal 1963 Unions Law (no. 274). The new Unions Law (no. 1317) outlawed the formation of union federations.


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It required workers to be active in their specific industry for at least three years to be eligible for establishing a union. It allowed the check-off system only in unions that met the conditions for drafting collective agreements. It made it mandatory for a union to represent at least one-third of the workforce in a given professional sector in order to be able to engage in collective bargaining. These and other restrictions introduced by the new law made many groups uneasy, including the DISK and the TIP as well as intellectuals and the independent unions. The ICFTU and TURK-IS, on the other hand, welcomed the 1971 Unions Law. The military-backed civilian government was unable to put a stop to the politicization of the Turkish labor movement. Partisanship increased and links between the political parties and unions continued to multiply in the 1970s as well. The CHP’s new leader, Bulent Ecevit, adopted an explicitly anti-TURK-IS position, holding it responsible for workers’ pauperization (Beseli 2002, 242). The dissident group of Social Democrats within TURK-IS affiliated with the CHP. With time, the CHP and DISK grew closer. DISK openly supported the CHP in the 1973 and 1977 elections (ibid., 241). Toward the mid-1970s, it seemed as if each political party had to have its own union movement and labor constituency. On June 23, 1970, the ultra-right Nationalist People’s Party (Milliyetci Halk Partisi, MHP) established the Nationalist Labor Unions Confederation (Milliyetci Isci Sendikalari Konfederasyonu, MISK). This led the Nationalist Security Party (Milliyetci Selamet Partisi, MSP) to launch its own labor confederation, the Confederation of Turkish Just Workers’ Union (Hak Isci Sendikalari Konfederasyonu, HAK-IS), on October 22, 1976. The CHP and the Justice Party (Adalet Partisi, AP),25 on the other hand, fiercely competed for the control of TURK-IS. It took another and a much more violent military intervention to finally put an end to growing partisanship and the extreme fragmentation of unions in Turkey. The military government of September 12, 1980, abolished all political parties on the grounds that they were riddled with corruption. It initiated a neoliberal restructuring program to cleanse the economy of the recurring economic crises. Labor was particularly hard hit. Strikes were forbidden, social rights abolished, right to seniority compensation eliminated, job and social security, vacation and leave of absence, and health coverage curtailed, and collective agreements suspended (law 2822). Many unions were disbanded, while all union activity was put on hold until 1984 (law 2821). Bank accounts of DISK, MISK, and HAK-IS were frozen. Their property and documents were confiscated by martial law command centers.

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On October 10, 1980, the military government appointed representatives to govern all the labor organizations. Military management of MISK and HAK-IS lasted for only a short period of time.26 As for DISK, the 1980 coup opened a long period of legal prosecutions. In the trials that lasted from June 26, 1981, to December 24, 1986, the 264 DISK defendants were given sentences ranging from five to sixteen years for their allegedly communist activities. The 1982 Constitution eliminated the “principle of social state” and replaced it with the “principle of equilibrium among non-equals” (Pekin 1985, 258). In terms of the organization of unions, the new Constitution made it harder to establish new ones. It required workers who wanted to establish unions to have worked in their specific sectors for over one year27 and not have been convicted for any crime, including that of having participated in strikes. Becoming a national union leader now required having worked in a given sector for more than ten years. Becoming a local union leader required a term of one year.28 The 1982 Constitution made it illegal to serve more than four consecutive terms as a union leader.29 It also made it harder for workers to become unionized by requiring them to go to a public notary and pay for membership registration prior to joining a union. Finally, the 1982 Constitution nullified the membership of anyone registered in more than one union. These and the accompanying legal regulations greatly increased the state’s influence on unions, both politically and financially. Accordingly, unions that would terminate their activities by their own will were required to transfer their property to the Treasury. If abolished by a court order, the union in question would have to leave its property to the Unemployment Bureau (Isci Bulma Kurumu, IBK).30 It was now forbidden to draw up more than one collective agreement in a given workplace. The “double threshold” requirement made it extremely hard for a union to actually enter into a collective agreement. According to this requirement, a union had to enroll 50 percent plus one of the workers in the workplace and 10 percent of workers31 in the sector as a whole, to be able to participate in collective bargaining. Such regulations gave tremendous power to the state since it was the Ministry of Labor and Social Security that determined the total number of workers in each industry. If the latter was announced to be higher than it actually was, many unions could be disqualified from collective bargaining. Nevertheless, TURK-IS defended the 10 percent limit on the grounds that it prevented union inflation and employer-dominated unionism. But the 50 percent plus one clause proved to be controversial for both DISK and TURK-IS.


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The 1982 Constitution was very specific and rigid on the question of strikes (Pekin 1985, 276). Strikes with political objectives, general strikes, solidarity strikes, slowdowns, and other types of worker protests were banned. Strikes could not go against the national interest or the public good, as defined by the military. Only “strikes of interest” were permitted. Such strikes stemmed from conflicts during and arising from collective bargaining. “Strikes of rights” were strictly forbidden, which meant that no strike could be staged after the signing of collective agreements. This deprived unions of their supervisory power over labor relations.32 The 1982 Constitution limited union activities to “protecting and developing economic and social rights and interests of their members.” The fifty-second clause and the Unions Law no. 37 barred unions from becoming involved in politics (Genis 2002, 278). They could, however, engage in “professional activities” to advance workers’ economic interests. The wording of “professional activities” was later expanded to “activities and declarations.” Nevertheless, unions were not allowed to pursue political objectives, participate in political activities, collaborate with political parties, or contribute money to them. Unions and confederations were also prohibited from acting in tandem with civil society and professional organizations for political purposes. Union and confederation leaders were now barred from holding simultaneous positions in political parties. If a union leader became a candidate in local or general elections, her union job was suspended during the time of candidacy. If elected, her union job was terminated. In addition to the constitutional restrictions on strikes, many nonlabor authorities possessed the authority to ban, postpone, or require prior permits for strikes in certain industries and workplaces, in the cases of war, fire, and natural disasters. These authorities were the cabinet, regional governors appointed by the military, and martial law generals. Free industrial zones established by the Free Regions Act in 1985 banned all strike activity in these areas for ten years. Once a strike was banned, it could not be restaged. The Anti-Terror Act of 1982 exacerbated the isolation of workers. The YHK made sure that strikes would be less frequent by explicitly stating that the damages incurred in the workplace during a strike would be the sole responsibility of the union involved. Although the 1980 military coup dealt a serious blow to the politicization of labor through the 1982 Constitution, TURK-IS stayed faithful to its founding principle of maintaining good relations with the government regardless of whether the latter was democratically

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elected or not. Many TURK-IS leaders held important positions in the military government. The objective of the confederation was, as usual, to derive as many benefits as possible from collective agreements. This, in turn, was only possible by adhering to the doctrine of PAP and the tradition of dependent state unionism. Restructuring of Labor: Tripartite Division of Labor by Privatizations

Number of deputies

Amid growing social discontent over its rule, the military relinquished power to civil authorities in 1983. If the military coup of 1980 could not entirely succeed in its objective of eliminating the PAP, the ANAP, which won the 1983 general elections, certainly had the potential to do so. The ANAP had the perfect technocratic cadre to carry on with the neoliberal program initiated by the military. The post-1983 era was clearly about deunionization and the isolation of workers. New practices such as the hiring of contracted personnel and interns, who were not allowed to unionize, and working from home, where union rights did not apply, were some of the policies employed to push for deunionization (Koc 1991). Toward the end of the 1980s, the ANAP started using more subtle anti-union tactics, including anti-union propaganda directed at the public. Consequently, as shown in figure 2.1, deputies with a labor background substantially decreased in the Turkish Parliament in the 1980s and the 1990s. Furthermore, most national deputies of union origin who entered the parliament came from the social democrat parties such as the CHP, the Social Democrat People’s Party (Sosyal Democrat Halk Partisi, SHP), and the DSP (Mahirogullari 2005, 416). 20 17 15 12

12

10

10

3 0 1940

7

6

5

1950

7

9

8

7 5

4

5

2 1960

1970 1980 Election Years Source: Data based on Mahirogullari (2005).

1990

Figure 2.1 Turkish deputies with union background (1940–2005).

2000

2010


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It took a few years for TURK-IS officials to realize that the ANAP government was reluctant to continue with the tradition of statedependent unionism. So, until 1987–1988, TURK-IS tried in vain to enter into a standard patron-client dialogue with the government. Meanwhile, the rank and file grew uneasy with the confederation representatives’ inability to secure wage increases and other benefit packages from the government. The discontent over the consecutive collective agreements devoid of wage increase stipulations culminated in the notorious “1989 Spring Strikes.” The 1989 Spring Strikes were the first mass worker movements devoid of official union leadership backing in Turkish history. They included protest movements that were previously unheard of. Hunger strikes, leaving work altogether to go see the firm’s doctor, protest marches with bare feet, mass telegrams to politicians, and mass divorce proceedings based on the premise that the belt-tightening policies were incompatible with a steady and happy family life were some of the innovative forms of dissent. Agitation within the rank and file contributed to diametrical changes in TURK-IS’s modus operandi to make it, for the first time since its foundation in 1952, an explicit opposition block in the 1989 local elections. A massive turnover also took place in the union confederation’s leadership. In all, 48 percent of local union leaders and 49 percent of federation representatives and union leaders quit as result of the mounting pressure from the base (ibid.) The strikes showed first of all that the rank and file could become unified and demonstrate its collective indignation, with desired effects on the political position of the confederation. This was a first in the history of Turkish labor. Second, again for the first time, a confederation took an openly anti-government stand and influenced government actions as a result. Third, the mass movement led to the first general strike in Turkey in 1991. Fourth, there was, for the first time, collaboration between unions of different hierarchies, in this case, at the confederation, federation, and local levels, and individual workers in the staging of the 1991 general elections. Among the reasons for the failure of the ANAP in the 1991 national elections were the 1989 Spring Strikes and the 1991 general strike. The new government was a coalition of the True Path Party (Dogru Yol Partisi, DYP) with the SHP. The bulk of the electoral support for the DYP had come from labor, which, for the first time, pressed forward with the demand for democratization. As political but more autonomous actors, labor unions seemed to take on a new role of watchdogs making sure that the DYP-SHP coalition

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government kept its campaign promises and expanded union freedoms (Genis 2002, 285–87). Labor unions also supported the International Labor Organization (ILO) Conventions no. 59, 87, 135, 142, 144, 151, and 158, which were approved in the parliament on November 22, 1992 (Gulmez 1988).33 And the traditional and closed-door patron-client dealings abated. In addition to changes in the PAP doctrine and the first viable labor opposition to the government in the 1990s, one other visible novelty in the Turkish labor movement of the global era was the voicing of new demands, including a new and democratic Constitution, the democratization of laws pertaining to work conditions, and a greater freedom of association. The new strategy to accomplish these goals involved strengthened collaboration among the confederations and new alliances with the emerging civil society. In 1992, unions, for the first time, directly mobilized for democracy. A civil society organization, the Platform of Democracy (Demokrasi Platformu),34 was formed by the three confederations in collaboration with 18 professional associations on November 29, 1993. The new organization published a communiqué in which unions were declared to be the guardians of democratization. When, in February 1994, rumors of a coup circulated in the media, unions openly opposed such a course of action (Genis 2002, 288). Another important change in the 1990s was the reemergence of DISK on the Turkish labor and political scene. With the Court of Appeals’ decision of July 16, 1991, DISK leaders and members who had been imprisoned since the 1980s were acquitted. After 11 years of cessation of its activities, the first general meeting of DISK took place on July 20, 1991. DISK declared its new mission to be “the earning back of confidence, work for democratization and the resolution of political problems” (ibid., 214). DISK proposed to espouse the necessary economic, industrial, and technological changes to survive in globalization while defying privatizations. The distrust towards DISK’s leftist ideology and its recourse to violence in the pre-1980 coup is still a problem plaguing its “culture of confrontation” in dealing with privatizations. While DISK was resuscitated with the democratization efforts that accompanied economic restructuring, another important change in Turkish labor in globalization was the divergence in the strategies of TURK-IS and DISK for the first time. Until the 1980s, these confederations had both targeted increases in workers’ wages through legal changes and bargaining with the government. Doing that, they had neglected the issues of better work and living conditions.


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They had also limited strikes and other protest activities to workplaces (ibid., 296). In contrast, in the 1990s, TURK-IS took an anti-government position for the first time and gradually shed its allegiance to the traditional PAP doctrine, subscribing to a more professional “culture of compromise.” Both DISK and TURK-IS put emphasis on the issues of work and living conditions in addition to wages in the 1990s. The HAK-IS also underwent changes in the post-1980 period. First, it became a more active confederation. It had had only limited activities in the 1980s, since it was confused about its project of Islamic unionism. Its role had thus stayed confined to being a critic of TURK-IS with no clear plan of its own during that period. In the 1990s, HAK-IS resolved its ideational dilemmas by redefining the Islamic values of labor and adopting a more secular outlook. The change of its emblem from the triad of a “mosque, crescent and factory” to a set of “oracle, olive branch and crescent” is a case in point. In the mid-1990s, HAK-IS redefined Islamic unionism as procapitalist and capital friendly, but against a patrimonial state. As such, its panacea became the formation of a vigorous civil society and a vibrant private sector, which could then potentially produce an Islamic model of labor and social relations on its own (ibid., 286). HAK-IS concentrated on counterbalancing the state’s power by following a policy-based approach and pioneered a “culture of business unionism.” New union attitudes signaled the beginning of a more autonomous, engaged, and pragmatic union movement. Collective agreement making, on the other hand, did not seem to undergo any changes in the global era. Table 2.1 gives the breakdown of the number of collective agreements per year (1996–2005) in the public and private sectors. It shows that the number of collective agreements signed in workplaces active in the public and private sectors, respectively, are generally close to each other except in 2001 and 2002.35 The number of collective agreements increases in both sectors starting with 2003. The number of workplaces involved in the collective agreements fluctuates from year to year and does not seem to present any consistent pattern over time. This is because the number of unions that can sign collective agreements changes according to the legally preset threshold levels of representation comprising 10 percent of the workers active in a given sector and 50 percent plus one of the workers in a given plant. Therefore, the number of collective agreements is much more determined by institutional rules than by economic factors in Turkey.

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Table 2.1 Collective agreement making in Turkey (1996–2005)

YEARS

1996

1999

2002

2005

NUMBER OF AGREEMENTS

NUMBER OF WORKPLACES INVOLVED

NUMBER OF WORKERS INVOLVED

Public

861

6.971

281.190

Private

1.010

3.319

234.650

TOTAL

1.871

10.290

515.840

Public

1.137

9.638

544.995

Private

1.149

2.735

283.463

TOTAL

2.286

12.373

828.458

Public

1,113

4,741

131,852

Private

660

2,712

123,207

SECTOR

TOTAL

1,773

7,453

255,059

Public

1.176

10.302

382.992

Private

2.801

4.086

204.464

TOTAL

3.977

14.388

587.456

Source: http://www.calisma.gov.tr/istatistik/cgm/yillar_tis.htm.

Conclusion: The Turkish Labor Movement in Perspective The Turkish labor movement, since its inception in the Ottoman Empire, has been dogged by ethnonationalist cleavages, military interventions, and partisan policymaking. The economic and political changes introduced by the neoliberal ANAP government between 1983 and 1991 have transformed the Turkish labor movement in specific ways. Until the 1980s, the labor movement was characterized and shaped primarily by (1) state-dependent unionism and its PAP doctrine, (2) ISI and a closed economy, and (3) labor unions’ lack of independent and competitive political experience, especially in the case of the unions active in the public sector. The profusion of SOEs contributed immensely to the failure of a vital labor movement until the 1990s. A worker whose employer was the state failed to act, or simply opted out of acting, as a political animal, meaning that he did not participate in politics knowing and defending his legal and civic rights. That is so because a


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state-employed worker (1) was part of the tradition of state- dependent unionism and benefited from it and (2) took it for granted that whatever political party was in power, his needs would be taken care of. The simple arrangement was for him to vote for the party in power as instructed by the union leader and support government policies to receive wage increases and other benefits from the paternalistic employer (ibid., 295). Ozal’s restructuring of the economy through privatizations broke this historical pattern and is thus an important critical juncture in changing the developmental pattern of the labor movement in Turkey. In sum, the three ways in which the labor movement changed toward being a more democratic and active player in Turkish politics, starting with the 1990s, can be categorized as follows: Political Unionism: This refers to the new strategy of TURK-IS to first try to negotiate with the government in power through patronclient relations to see if PAP can be resuscitated. In case this strategy fails, constituting a strong opposition block and questioning the policies and the very legitimacy of the government in power follows. In case negotiation with the government is welcomed, TURK-IS embarks upon extensive political bargaining involving market research on the issues discussed, comparisons derived from the experiences of other countries, and the modernization of the labor movement. This type of political attitude and this style of negotiation are quite different from the former clientelistic style wherein TURK-IS positioned itself as the government’s interlocutor, regardless of the government’s political platform. Socioeconomic Unionism: This refers to attempts by HAK-IS to restrict the state in the socioeconomic sphere for civil society and the private sector to take over these areas. To achieve this aim, the use of civic strategies of reaching out to communities and businesses for social projects, visiting foreign countries and studying their labor experiences to learn from them and devise new projects, and actively participating in Turkish privatizations have been some of the features of the type of unionism adopted by HAK-IS in the global era. Ideo-Intellectual Unionism: This refers to attempts by DISK to tap into a new societal consensus involving Turkey’s accession to the European Union and the industrial requirements of being an advanced democracy. Hiring younger and highly educated personnel as researchers and advisers, involvement in research and development, and the publication of detailed reports and analyses of political, economic, and social projects encompassing the Turkish society as a whole are

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some of the methods espoused by DISK to shape its new role and identity in globalizing Turkey (ibid., 302). In addition to these distinct yet mutually inclusive identities regarding the three branches of the Turkish labor movement, confederations have also contributed to democratization in the 1990s by (1) cooperating more with each other and civil society organizations while preserving their autonomy; (2) explicitly supporting the democratization project and taking a clear stand against attempts at reversing it; and (3) giving in to the demands of their rank and file and the unemployed to support, or at least, not to become a barrier against formations outside the scope of unions. Despite the considerable progress unions have made in becoming democratic players in Turkish politics, they still have a long way ahead to transform themselves into undisputable actors of democratization. Part of the unfinished task awaiting the Turkish labor unions can be summarized as (1) overcoming the ideological barriers dividing the confederations to more actively cooperate with each other, (2) democratizing the internal functioning of unions through more transparent elections and regular reports about the internal workings, and (3) making the system of revenue collection and spending more transparent. Why did such changes occur in the post-1980 period and accelerate in the 1990s? What are some of the obvious consequences of these changes in the 2000s? Can convergent patterns of development be found in the labor movements in other parts of the developing world? One way to answer this question is to look at another developing country that is historically, religiously, and culturally distinct from Turkey and geographically as far away from it as possible. Ideally, this country would also have distinct political and electoral systems to avoid any possible causality between these two factors and the structural/institutional changes observed in the unions. I, thus, now turn to Argentina to see how its labor history, despite being shaped by completely different historical forces, has ended up with surprisingly similar traits and divisions in the global age.

Chapter 3

4

Hi story of Labor Developments in Argentina From Peronist to Cautiously Independent Unionism

A

rgentina, located in South America’s Southern Cone, is an ethnically homogenous country composed primarily of immigrants from Italy and Spain. Its history and polity are marked by the centurieslong colonization by Spain (1516–1816). Of its 70 million inhabitants, 80 percent subscribe to Roman Catholicism, although most Argentines do not practice religion. While not a pivotal state in the sense that Turkey is in East-West geopolitics, Argentina is important for it used to be one of the richest countries in the world at the beginning of the twentieth century and was ranked as one of Latin America’s richest countries and its third-largest economy, after Brazil and Mexico, until recently (Ramakrishna et al. 2003, 1). This chapter traces the emergence and evolution of the Argentine labor movement. It strives to give us a better understanding of present-day reactions to privatizations on the part of Argentine labor unions and the rank and file. It also contributes to the main argument of this study, that privatizations have convergent effects on labor institutions, by identifying the three main characteristics of Argentine labor relations: (1) the statist nature of labor relations embedded in a corporatist system, (2) the strongly political and partisan role of Argentine labor unions and union leadership in politics, (3) the dominant populist ideology of Juan Domingo Peron whereby the working class is empowered socially, politically, and economically, even though

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the union leaders, and not the rank and file, appear to be the most obvious and direct beneficiaries of such empowerment. These three factors have rendered the reactions of Argentine labor unions to privatizations stronger, the divisions in the union structure more acute, the internal structure of unions more affected, and the external role of unions more transformed than in post-privatizations Turkey. The historical analysis and the New Institutionalist approach adopted in this chapter also illustrate the reasons why individual Argentine workers have not reacted to privatizations by organizing protest movements without their unions’ backing. The three structural/institutional variables outlined above have contributed their fair share to this unexpected outcome. A fourth factor that has contributed to the lack of mobilization among Argentine workers against privatizations is that economic crises prior to privatizations were extremely powerful and thus much more controversial in Argentina than in Turkey. This made the Argentine rank and file more accepting of privatizations as a possible solution to hyperinflation. Fifth, and finally, Argentine labor was severely weakened by the Dirty War (1976–1983). Thousands of labor activists who disappeared or were killed during the military dictatorship rendered Argentine workers more fearful politically, thereby inhibiting their mobilization against the privatizing authorities. In sum, fear of hyperinflation coupled with the memories of military repression seriously weakened the links of solidarity and collectivism in the Argentine working class. As such, Argentines were more welcoming of privatizations as a possible solution to economic calamities, just as they were more violent in contesting them when democratization gradually made them less fearful of the military. These and other unique characteristics of the Argentine labor unions and workers are apparent in the following historical analysis of labor developments in Argentina.

the Argentine Political Context: A Historical Perspective Argentina was one of the many Spanish colonies in Latin America until its declaration of independence from Spain in 1816. It was historically a poor country due to its insufficient convergence with European markets, particularly when compared with the busy port of Lima in Peru between the sixteenth and the eighteenth centuries. Its political disarray, marked by feuds among provincial caudillos, who refused to share power with one another and with the city of Buenos Aires, only exacerbated Argentina’s political and economic

H i s to ry o f L a b o r D ev e lo p m e n ts i n A rg e n t i n a

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plights (Grindle 2000, 151).1 The main internal conflict in Argentina concerned the power-sharing arrangements between centralists from the city of Buenos Aires, who fought for the creation of a liberal republican government, and federalists from the interior, who resisted both central authority and liberalism and viewed Buenos Aires as the headquarters of the exploitative Spanish colonialism. In clear contrast with the highly centralized and institutionalized Ottoman State, which never underwent colonization,2 Argentina was the epitome of colonization and countless unsuccessful efforts at national unification thereafter. In fact, the idea of “Argentina,” as a nation, did not appear in official writings until after 1860 (Whitaker 1964, 37). The general picture until the end of the nineteenth century consisted of semi-autonomous regional powers fighting with one another to be established as the legitimate representative of the country. By the mid-nineteenth century, Buenos Aires had become the entry port for thousands of skilled immigrant workers from all over Europe, primarily from Spain and Italy, seeking a better future. By the beginning of the twentieth century, the political and economic power of Buenos Aires had clearly become superior to the interior, leading to the gradual disappearance of the centralist-federalist feud. Presidents chosen thereafter by the National Assembly, composed of caudillos from Buenos Aires and the interior, unified the country and ensured relative political stability. The political and economic victory of Buenos Aires over the rest of the Argentine provinces did not only mean the end of the political problem of unification. It also signified the rapid economic development of the country as a whole. By choosing not to take part in World War I, Argentina had clearly made the right decision as opposed to the Ottoman Empire, which by becoming a German ally had literally signed its own death warrant. In 1914, therefore, Buenos Aires was the nascent “Paris of the South,” with a booming population, technological innovations, economic prosperity, political stability, and cultural richness (O’Driscoll 2002). Istanbul, on the other hand, was a decaying capital—the “Sick Man of Europe” was how the disintegrating Ottoman Empire had come to be known by the end of World War I (Livanios 2006). Despite increasing foreign investment, immigration, cultural blossoming, and an economic boom, tensions continued to plague Argentina. The old oligarchy, the new urban middle class, and the emerging working class of immigrants clashed over the sharing of power and resources (Grindle 2000, 154). The emergence of new classes and actors spurred by the country’s rapid economic expansion

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led to the establishment of a new political force in 1916: the Radicals, led by Hipolito Yrigoyen. They became the main adversaries of the traditional rural caudillo elite who, until then, had ruled the country single handedly. The Radicals, for the first time, emphasized free and fair elections, universal suffrage, and democratization while welcoming the emerging middle class. These developments in Argentina were very different from those in the Ottoman Empire, which was also opening up with the 1838 Free Trade Treaty signed with Britain, but within the strict boundaries of centuries-long state traditions and deeply ingrained political rules and norms. These same rules and developments in the Ottoman context were not propitious for the creation of a middle class or a working class. By the time World War I had ended, all hopes of economic development were lost, as was the empire. Argentina, much in contrast with Turkey, had its first encounter with democratization as early as 1916 with the formation of the Radical Party. Another contrast was that its political history was characterized by the rise to prominence, in the mid-1940s, of a single individual, General Juan Domingo Peron, who became the architect of the strongest labor movement in all of Latin America. Peron, by tapping into the marginalized power of the large labor constituencies, quickly became a national hero. His populist policies were instrumental in paving his way to the Argentine presidency. The international economic environment, which favored the ISI model of development, also helped him in his ascension. Consecutive military interventions against the rising influence of Peronism and concomitant attempts to open up the economy to market forces dominate the political and labor history of Argentina between the 1950s and the 1980s. Peron had nationalized foreign firms operating in Argentina when he came to power in 1946. It is, therefore, ironic that it was a Peronist government that led the neoliberal restructuring of the Argentine economy in the mid-1980s. The Peronist Justice Party (Partido Justicialista, PJ) and its leader, Carlos Saul Menem, who was a conservative caudillo from the smallest province of the interior, La Rioja, justified a shift in ideology and methodology on the basis of Peron’s adherence to pragmatism and the need to adapt to changing circumstances. The world was globalizing, and countries all over the world were opening up to attract foreign direct investment and to favor export-oriented models of industrialization. Argentina had to adapt in order to overcome its recurring economic crises. Turkey’s transition to a free market economy in the mid-1980s was also justified on similar grounds.


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The Argentine Labor Movement: A Historical Perspective Argentina is the country with the strongest labor movement in Latin America (Etchemendy 2001, 1). The former general and labor leader Peron has come to personify the Argentine labor movement, even though the history of the Argentine working class goes further back than Peron. As such, the emergence of the first and strongest labor confederation, the CGT, in 1930 constitutes the first critical juncture in the history of the Argentine labor movement. Peron’s rise to power in 1946 is the second, and Menem’s accession to the presidency and his neoliberal reforms in 1989, the third. These critical junctures, respectively, are associated with the following three phases of development in the Argentine labor history: (1) the formation phase starting with the influx of European immigrants in the 1900s, (2) the development phase starting with the surfacing of Peronism in 1946, and (3) the restructuring phase starting with the transition to free markets in the 1990s.3

Formation of Labor: A Nationally Diverse Workforce Divided by Ideologies The pre-Peron labor history in Argentina can be seen as a period of endless clashes among anarchist, socialist, and syndicalist groups of workers, each of which had a different opinion on how to organize the working class and the Argentine society as a whole. Anarchists, who constituted the first wave of immigrants from Spain and Italy in the mid-1800s, sought to destroy the then dominant gentry or estancieros.4 They aimed at the creation of an egalitarian society controlled by workers and advocated the use of strikes, walkouts, and sabotage to reach their respective ends (Alexander 2003). Socialists, composed mainly of immigrants from Northern Europe, aimed for the political rights of voting, collective bargaining, and protective labor laws. They wanted to attain these goals by mainly using parliamentary methods. The socialists’ main opponents were the anarchists, followed by the estancieros. Unlike the anarchists, who opposed direct and explicit links with political parties, the socialists encouraged using parties as legitimate means of advancing labor interests. Socialist workers set up caucuses in individual labor unions to coordinate the actions of the working class with those of the socialist parties (ibid.). Syndicalists who, for the most part, were native Argentines, were interested in bread-and-butter politics and had no aspirations toward

62


social engineering. While the syndicalists as a group were against any involvement with political parties, many of the members had their origins in the Socialist Party. Syndicalists’ main opponents were the estancieros, while their main support came from the Radical Party. It was during the Radical administration of Hipolito Yrigoyen (1916–1921) that the syndicalists abandoned their principle of antipolitics and leaned toward partisanship (Garguin 2000). The first worker associations in Argentina, a country with a predominantly immigrant population, were mutual aid societies formed by immigrant workers, who sought to assist one another in adjusting to life on a new continent (Decker 1983, 67). Mutual aid societies included workers from the same country—each aid society having its own language, customs, and ideologies. At a first glance, it seemed as if it would be difficult to set up a vigorous union movement among people with vastly different backgrounds. Obstacles notwithstanding, immigrant workers were virtually all from Europe. As such, cultural affinities were relatively high. Unification of the working class was further facilitated by the fact that, much to the contrary of what happened in the late Ottoman and early Turkish contexts, ideologies rather than nationalities determined the initial phase of the Argentine labor movement. The reason ideological differences overrode the nationality divide may be that all workers were immigrants in a new continent and country, as opposed to the static and legally defined ethnonational boundaries in the Ottoman Empire. Furthermore, Argentina did not participate in wars that could have exacerbated the nationalist tendencies and divides amongst the populace. The first Argentine labor union was formed in 1871 by the Mutual Aid Society of Printers of Buenos Aires. The rationale for the foundation of the Printing Trades Union was to obtain higher wages and better working conditions. The first labor union newspaper, The Typographic Worker (El Obrero Tipografico), was published only a year later. The first walkout and work stoppage took place in 1878, again by the Printing Trades Union (Schiller 2008, 10). The first general strike occurred in 1902 (Munck 1987, 42). The first labor federation, known as The Federation of Workers of the Republic of Argentina (Federacion de los Trabajadores de la Republica Argentina, FTRA), was established in 1890. The first federation experience, however, was cut short by violent clashes between the socialists and the anarchists. Attempts to revive the FTRA in 1894 and 1896 proved unsuccessful. Finally, the Argentine Workers Federation (Federacion Obrera Argentina, FOA) was formed in 1901. Its name was changed to the Regional Workers Federation of Argentina (Federacion Obrera


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Regional Argentina, FORA) following the anarchists’ protest that no labor organization could national, but only be regional. Socialists soon seceded from the FORA and established their own labor federation in 1903. Their organization was called the General Workers Union (Union General de Trabajadores, UGT). During this initial phase in the Argentine labor movement (1890–1912), the anarchist FORA dominated over the socialist UGT (Di Tella 2003). The 1890s constituted a favorable decade for the labor movement in Argentina. In addition to the first labor federation, the first labor party, known as the Socialist Workers Party (Partido Socialista Obrera, PSO), also came into being. This party, established in the late 1890s, was initially organized along the nationality divide like the former mutual aid societies, though with significant cooperation and collaboration among members. The major opposition to the Socialist Party came from Argentina’s Radical Party, Union Civica Radical (Medina and Cao 2002, 170). Socialists did not fare well against the Radicals since they, the Socialists, required citizenship for membership and the Radicals did not (Haas 1987, 2). This was another proof that nationality was not as important as ideology in Argentine politics. The first legislative measure directly targeted at labor was the 1902 Residency Law (Ley de Residencia). This law allowed the president to extradite any foreigner guilty of a common crime or posing a threat to national security and public order. It also determined the characteristics of the type of labor movement that was about to emerge in Argentina: constant warfare between an authoritarian government and the rising unions, regardless of ideological backgrounds. This development contrasted starkly with the incontestable and wellestablished power of the Ottoman State, which clearly dominated a weak and an ethnically divided workforce. The palpable contrast in the emerging conditions of the Argentine and the Turkish working classes and labor movements proved crucial in their subsequent developments as well. The Argentine working class was searching for a leader who could unify the movement and a system with clear rules to help organize labor in the first place. As for the incipient Turkish working class, the objective was a liberalization of the existing structures and norms within which labor was cast. The first attempt to create a labor confederation in Argentina was made in 1907, when the socialist UGT pushed for unification with the anarchist FORA. The effort resulted in the Regional Workers Confederation of Argentina (Confederacion Obrera Regional Argentina, CORA). Instead of bringing unity to Argentine labor, however, CORA worked more to strengthen the anti-anarchist groups. Once the

64


anarchists were out of the picture by 1910, the syndicalists started their own domination of the Argentine labor. Most members of the anarchist FORA joined the now syndicalist CORA, also known as FORA IX. This body became the strongest labor organization in Argentina in the period 1915–1921 (Di Tella 2003). The syndicalists’ domination of the emerging labor movement came to an end with the so-called Tragic Week (La Semana Tragica).5 This stemmed from a strike that started in a metal products plant in Buenos Aires in January 1919 and quickly spread to other cities across the country. Several strikers were killed in the clashes with the security forces. After this incident, the Radicals put an end to the incorporation of labor into their party and refused to give preferential treatment to the syndicalists. Instead, they concentrated on the support of their traditional constituencies—the middle class and the national bourgeoisie (McGuire 1995, 207). Following the syndicalists’ loss of power, the socialists gradually replaced them as the dominant voice in the labor movement. The 1920s and the 1930s were all about the power struggle between the socialists and the syndicalists. The institution that would host this new clash was the Argentine Workers Confederation (Confederacion Obrera Argentina, COA), founded in 1926. The myriad labor confederations of various ideological affiliations were finally united when the largest and the most influential labor organization of Latin America—the CGT—was founded in September 1930. The CGT was the result of a merger between the syndicalist USA and the socialist COA. The FORA once again refused to join and formed its own communist confederation, the Committee of Class and Union Unity (Comite de Unidad Sindical Clasista, CUSC) (Di Tella 2003). Although the formation of the CGT brought about a unification of the different ideological currents within the incipient labor movement in Argentina, the communists, who joined the CGT in 1932, controlled the two main unions within it: the National Federation of Construction Workers (Federacion Nacional de la Construccion, FNC) and the National Federation of Metallurgy Workers (Federacion Nacional Metalurgica, FNM). Syndicalists were out of the picture during the conservative dictatorship of 1930–1943, leaving the scene to the socialists and their new foe, the communists. As a result, the CGT was divided into two groups, led by the socialists and the communists as early as 1942. The Railways Union (Union Ferroviaria) and the Tramway Union (Union Tranviaria) represented the socialist faction, also called “CGT Number One.” The metal, construction, and packinghouse workers represented the communist faction, also called the


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“CGT Number Two.” The CGT Number One and the CGT Number Two had different political affiliations and strategies. The socialist CGT Number One used the Socialist Party to voice its aspirations. Meanwhile, communists were busy discussing how to establish an independent labor party6 (ibid.). By 1942, therefore, the clashes within the Argentine labor movement continued to be of an ideological nature, as they had been in the 1890s. While the conflicts remained dictated by ideology, however, they were now different in that they were institutionalized under the aegis of a single labor confederation. Divided by ideology yet unified structurally at its birth, the CGT came to be the most important institutional hub of Argentine labor politics. The ideologically divided workforce was awaiting the arrival of a strong leader for unification. The early formation of an institutional basis for labor, with the direct initiative on the part of workers themselves, presented a very different dynamic for the development of labor in Argentina compared with that in Turkey. The CGT’s equivalent labor confederation in Turkey, TURK-IS, had to wait until the 1950s to see light of day, and even then, the initiative was not bottom-up, but top-down. TURK-IS was founded as result of the initiatives of the United States government and labor institutions in collaboration with the then ruling DP. At that time, the impact of the Cold War and perceptions of the rising communist threat were considerably stronger than in 1930, the year the CGT was formed. Development of Labor: A Loyal Peronist Clique The military put an end to the conservative dictatorship in 1943. Labor unions were once again allowed to operate. The military imposed its own restrictions, however. The CGT Number Two was outlawed for being communist. The CGT Number One, on the other hand, was placed under administrators appointed by the military government instead of under elected union leaders. Peron, then an army colonel, was appointed director of the Department of Labor and Social Security (Departamento del Trabajo y Obras Sociales), an insignificant department at the time of his appointment in 1943. Initially, the military government strongly backed Peron and his pro-labor policies. Workers were seen as a possible source of support by the military, especially after the failed attempts at co-opting the industrialists, who continued to long for the Radical Party’s return to power (Horowitz 1990).

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Peron worked hard to empower the workers. He established a retirement fund for commercial employees and journalists. Maximum hours of work and minimum wages were fixed for bank employees and sugar workers. Ten days of paid vacation per year were accorded to all workers. Peron also improved the existing pension plans and introduced new ones. He strived to strengthen the unions and bring them back to political life. He presided over the signing of collective agreements as the minister of labor and intervened in the workers’ favor during industrial disputes. As result of his efforts, the initially insignificant Department of Labor evolved into an independent ministry. He became the minister of war, the provisional vice president, and the labor minister by mid1944. Meanwhile, the CGT Number One was transformed into the most important support center for Peronism. Since the great majority of labor organizations belonged to the CGT Number One, Peron had substantial influence over almost all workers and worker organizations by as early as 1945.7 By that time, the rank and file looked up to Peron, not to their union leaders, for better wages and working conditions. They now called themselves Peronists (ibid.) Many of the Peronist workers were tired of the constant ideological warfare that plagued the labor movement before Peron’s rise. More importantly, Peron finally gave them what they had sought for decades, that is, better pay and significantly better working conditions. Peron’s extensive use of patronage networks, apparent in the appointment of countless union leaders to various governmental posts, and the direct contacts of his wife, Eva Peron, with the rank and file also helped to strengthen Peronist allegiance among union members. Conversely, unions did not even have the right to strike at around the same time in Turkey. While working toward improving workers’ welfare, Peron also made sure that they became more and more dependent on him. The first labor-related regulation, decree number 23, 852-45 of October 2, 1945, for instance, allowed only one union per industry in a given geographical region. This referred to the principle of “single unionism.” The government’s recognition and approval were necessary for these unions to be legitimate and for them to engage in collective bargaining, to petition authorities, and to legally and fully represent their members. This second principle, called the “legal recognition” or personeria gremial, would also leave enduring marks on the Argentine labor movement, as would the beginning of the socalled Peronist Revolution on October 17, 1945. On that day, thousands of Peronist workers flooded the entrance to the military hospital in Buenos Aires where Peron was being


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detained by the military. The military had grown restless with the increasing organization and strengthening of the working class and the so-called Peronist movement. It had, therefore, toppled Peron. The workers protested, demanding his release. The demonstrations were so intense that the ruling military commander, General Eduardo Avalos, had to negotiate with Peron so that protesters could be dispersed. Peron’s conditions for convincing the demonstrators was the formation of a new cabinet composed of Peronists and a public speech in front of La Casa Rosada8 (Munck 1987). Peron’s October 17 speech was a tremendous success and a turning point for Argentine labor. There are various reasons for considering this date as a critical juncture in Argentine labor history. First, the October protests established the workers on the political scene as an organized group for the first time. Second, it made them aware of their political power. Finally, in his speech, Peron announced his retirement from the military and his candidacy for the 1946 presidential elections. Peronism from then on would render the development of the Argentine labor movement very distinct, not only compared with Turkey, but in the entire developing world. While Turkish labor would embark upon a highly political and ideologically partisan labor movement divided mainly by the left-right cleavage in 1946, in the same year, Argentina would start off what would be a highly personalistic and clientelistic labor movement.9 The only divisions within the Argentine labor structure from then on would be between the “ultra” Peronists and the more independent Peronists, leaving little room for the few non-Peronists. With his election as the President, Peron made sure that only workers and unions loyal to him could survive. Union leaders suspected of having an independent streak were sacked. The usual trend consisted of the government concocting an internal conflict in any union thought to be disloyal. Fresh elections would then be organized immediately. The new leadership would more often than not be Peronist since the rank and file itself was Peronist. If that did not work, however, the main Peronist tool of manipulation, the CGT, would intervene in the rebel union. No direct government interference would take place since the 1946 Law of Professional Associations prohibited such interference.. The installation of a new leadership and intervention by the CGT were not the only ways of dealing with non-Peronist unions. Denying or retracting the personeria gremial and using police raids were others. The highly centralized structure of the CGT itself was sufficient for controlling the affiliated unions. Accordingly, local

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unions could not have any kind of fiscal autonomy. The CGT levied a per capita tax on each affiliate in the amount of 20 cents per union member. It also received special payments, including the wages paid by employers to workers for paid holidays.10 It should come as no surprise, therefore, that most unions remained obedient to Peron by default. The equally centralized union structure in Turkey did not work to promote allegiance to any specific leader or ideology. It was relatively easier in Turkey to form, and affiliate with, the labor confederation of one’s choice. If the riddle in Argentina consisted of who was a real Peronist and who was not, in Turkey the leading question was how and to what degree labor unions should be allied with the government and political parties. While the dependency nexus between Peron and the workers grew, so did organized labor. There were only 500,000 workers in 1946 when Peron became President. By 1948, 1.5 million workers were unionized (Torre and De Riz 1991, 82). This number burgeoned to 3 million by 1951—a unionization rate of over 90 percent. The new constitution Peron promulgated in 1949 contained the article “Rights of the Worker,” which included, among others, the right to work, training, decent working conditions, welfare, social security, economic improvement, just remuneration, preservation of health, protection of families, and defense of professional interests. This period in Argentine labor history was dubbed the “golden age” of state and union cooperation (Halperin 1983, 105). The dependency nexus forged by Peron was not able to prevent the emerging troubles of the early 1950s, however. The worsening economic conditions, bad harvests due to drought, and the death of Eva Peron, who was very close to the rank and file, were significant in eroding Peron’s popularity. The last straw was Peron’s decision to privatize the state petroleum company, Yacimientos Petrolíferos Fiscales (YPF). In June 1955, Peron said, “The Peronist Revolution has ended. I cease being the head of the Peronist Revolution and become the president of all Argentines now” (Alexander 2003, 104). This could not, however, prevent his overthrow by the military in September 1955. If there was only one explicitly anti-labor military coup in Turkey, that is, the final 1980 military intervention, in Argentina, there were three. The first one, the 1955 military coup, known as the Liberating Revolution (Revolucion Libertadora), was targeted at weakening the Peronist labor movement and the increasing power of unions. Thousands of Peronist leaders were arrested and jailed. Military men were appointed to the CGT and its affiliate unions as interventors.


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The principle of “single unionism” was abandoned so that more than one union could operate in a given sector. This coup against Peron also sowed the seeds for the enduring structural fragmentation of the Argentine labor institutions along those who were for and against Peron and Peronism. The question of what to do about Peron split the organization into three different factions by 1957. The 62 Organizations controlled by Peronists, the 32 Democratic Organizations led by anti-Peronists and anti-communists, and finally, the 19 Unions of the Communists. The last two organizations were not long lived, but the 62 Peronist Organizations survived, as the core of the underground CGT, for more than a decade following the 1955 coup. Overall, the coup failed to depoliticize or weaken the labor movement as it had set out to do. On the contrary, if anything, it rendered it more Peronist over time, as reactions to the curtailing of freedoms grew more and more powerful. In spite of deep ruptures over the nature and degree of allegiance to Peron, Argentine labor unions tried to achieve some degree of unification after the 1955 military intervention. The 62 Organizations, along with some independent unions, were able to come together to revive the CGT in 1961. The confederation was restored to its full legal status in 1963. The CGT asked for the freeing of political detainees, restoration of the personeria gremial, the participation of workers in economic decision making at the governmental level, an increase in wages, the decrease of taxes, the end of petroleum contracts with foreign firms, freedom of speech, and the protection of SOEs. These demands were not met. As a result, the CGT grew increasingly militant (Torre 1988). Not everyone within the CGT was happy about the militant course of action undertaken by its leadership. The independent unions within the CGT favored a more conciliatory approach toward the non-Peronist government of Arturo Umberto Illía, which succeeded the military in 1963. Soon, a second split occurred within the CGT when independent unions seceded from it by 1964. The remaining 62 Organizations also contained a plethora of voices internally: (1) those who wanted to strictly follow Peron and his directives, (2) those who wanted a labor party that would consult informally with Peron, and (3) independents and communists. Clearly, this picture was starkly different from that of the Turkish labor movement, in which, by 1964, the CGT’s counterpart, TURK-IS, was far from being divided over the question of allegiance to anyone or any specific ideology. On the contrary, the leadership of the Turkish labor confederation was united around the well-functioning doctrine of PAP.11

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Despite the divisions in the Argentine labor movement, the military was still not convinced that Peronism had ceased to pose a threat; hence the 1966 coup, called the Argentine Revolution (Revolucion Argentina). General Juan Carlos Ongania’s main antilabor tool was economics: he rejected populism as a possible course of action. Instead, he adhered to laissez-faire economics with the ultimate aim of eliminating inflation. He suspended all political activity arguing that politics interfered with efficient allocation of resources. From 1966 to 1970, membership in all of the most important unions—the Railways Union (Union Ferroviaria), the Metallurgical Union (Union Obrera Metalurgica), the General Confederation of Commercial Employees (Confederacion General de Empleados de Comercio), the Workers Association of Textile (Associacion Obrera Textil)—declined. At the same time, the rank and file, supported by student groups and leftist organizations from the middle class, grew more and more radical (Godio 1991). The CGT again experienced splits after the 1966 coup. This time, the splits were over the relationship between labor unions and the military dictatorship. By the end of 1967, there were three main factions within the CGT: (1) those who wanted full collaboration with the military, (2) those who favored dialogue but no formal agreements, and (3) those who rejected any kind of contact with the military government. The first group did not have any connection with the two other CGT factions and was eventually isolated. The second and third groups, respectively, were called the CGT-Azopardo and the CGT–Paseo Colon. Not long after the coup, the military shut down the CGT–Paseo Colon.12 (ibid.) The end of Ongania’s regime came with the 1969 Cordobazo disaster. This was the civilian uprising, by worker and student groups, against the military and its economic policies. The Cordobazo led to the formation and strengthening of other social movements, including the anti-military and Peronist guerilla movement known as the Montoneros.13 Following the Cordobazo, the military overthrew Ongania, who was succeeded by General Roberto Levingston and General Alejandro Agustin Lanusse, successively. General Lanusse opened the political arena to Peronists once again. Hector Campora, representing Peron, who was still in exile in Spain, won the 1973 elections against the Radical candidate Ricardo Balbín. Campora thus became the second Peronist president since Peron’s overthrow in 1955 (ibid.). Campora’s term in office was rather short. After only 49 days, Peron returned from exile to replace him. Once President again, Peron undertook to reinvigorate the dependency links with the


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traditional union leaders. To this end, he first repudiated the newcomers to Peronism. Students and the independent Peronist youth organizations as well as leftist intellectuals were banished. Peron then worked to strengthen the top trade union bureaucracy by authorizing it to remove local union leaders and shop stewards deemed unfit. He also extended the national union leaders’ terms in office from two to four years. Reports on union finances were now required every other year rather than annually. These and other measures helped forge closer relations between the union leaders and the Peronist government (Bonasso 1997). Upon Peron’s death in July 1973, union leaders were once again confused regarding the nature and extent of their ties with Peronism and the future of the labor movement: some unions advocated total submissiveness to the Peronist political movement, while others, like the 62 Organizations, opted for a more cautiously independent unionism. At the end, the second group of unions prevailed. The victory of the 62 Organizations was greatly helped by the ineptitude of the new government, led by General Peron’s second wife, in dealing with soaring inflation. It was thus not Juan but Isabel Peron who precipitated the third military coup—the National Reorganization Process (Proceso de Reorganizacion Nacional)—on March 24, 1976 (Ramos 1981). This coup led by General Jorge Rafael Videla and his subsequent regime brought about a much more vigorous restructuring of Argentine politics, society, and economy than the previous military interventions against Peron and Peronism. Termed the “Dirty War,” this period (1976–1983) involved the militarization of all sectors of society and the elimination of basic rights and freedoms in all domains and spaces, including political, social, economic, and public and private spheres. Labor was one of the most affected sectors in this ordeal: the military government suspended all trade union activity, including strikes. Anyone suspected of leftist leanings risked persecution. Thousands of Peronist leaders of all ranks were kidnapped and killed. The government could intervene in all aspects of unions’ internal organization. No union could extend beyond the Federal Capital, or the limits of an individual province, which equaled a de facto prohibition of all federations. Unions’ social welfare functions were eliminated, while their funds, bank accounts, and property were seized by military interventors. The CGT itself was ultimately dissolved, once again, on November 12, 1979 (Munck 1987). Direct attacks on individual rights by the military were coupled with the indirect effects of the harsh economic policies adopted.

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The minister of economy, General José Alfredo Martínez de Hoz, freed all prices and exchange rate, froze wages, decreased tariffs, and annulled protections in the manufacturing sector. It is estimated that one million workers lost their jobs between 1975 and 1980, decreasing the numbers of the Argentine working class from six to five million (Abos 1984, 73). While Martinez de Hoz became the anti-labor figure par excellence in the minds of the Argentine rank and file, there was no equivalent military figure for the Turkish workers to name as the foe of labor, nor was there any political figure like Peron whom they could point to as labor’s savior. The Turkish military’s minister of economy, Turgut Ozal, was in fact a relatively liked figure. It is true that he was associated with belt-tightening policies, but his legacy also reverberated with political liberalization and civic freedoms. This is because Ozal, in contrast to de Hoz, formed his own political party and distanced himself from the military. The relatively milder and much shorter Turkish military intervention in 1980 compared with the prolonged Argentine Dirty War also might have helped assuage the Turkish workers’ negative feelings toward neoliberalism, the military, and their connection and association with one another. This was not the case in Argentina. Despite political and economic tribulations, nonintervened and relatively smaller local unions from the interior began reorganizing the labor movement as early as 1977. They came together to form the Committee of 25 in March 1977. This committee initiated a wave of strikes and walkouts in November 1977. Some of its members established the Peronist Union Movement (Movimiento Sindical Peronista, MSP), which was a revival of the 62 Organizations. A second unofficial trade union group that sprang up during this period of resistance was the Commission of Administration and Labor (Comision de Gestion y Trabajo, CoGT), formed by labor unions active in the metal, commerce, textile, telephone, and railroad sectors. Shortly after its foundation, the CoGT changed its name to the National Labor Commission (Comision Nacional del Trabajo, CNT). The CNT favored dialogue with the military regime in order to secure changes in labor policy. As opposed to the CNT, the Committee of 25 rejected any cooperation with the military (Munck 1987). As labor resistance was building against the military dictatorship, economic difficulties were also mounting. Escalating debt, mainly due to excessive military spending and the artificially high value of the Argentine peso as well as the inefficient SOEs run by corrupt soldiers, contributed to the rising budget deficit. The military could find no solution other than fabricating the crisis of the Malvinas Islands


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in order to take the social pressure off of itself.14 The Argentine armies invaded these British-controlled islands on April 2, 1980, with the premonition that the patriotic flurry of war would replace the roaring civil unrest and labor discontent. Things did not turn out as planned, however. The Argentine armies were badly defeated by the British, this only stepping up Argentines’ frustration with the military dictatorship. The War of Malvinas was especially important for labor since the disaster led to the unification of the previously promilitary CNT and the anti-military CGT. Now called CGT-Azopardo and CGT-Brasil, respectively, the two labor confederations collaborated for the first time in the staging of the national general strike of December 6, 1982. In addition to the strike, CGT-Brasil held a massive demonstration known as the “March for Democracy” on December 16, 1982. Such strikes and protest movements became crucial destabilizing forces for the military regime in the 1980s (Haas 1987, 8). Pressure from labor unions was an important factor influencing the military government’s decision to call for free elections on October 20, 1983. The 1983 elections were the first free and fair elections in which the Peronists lost after participating without restrictions. Raul Alfonsin of the Radical Party won the elections against the Peronist union leader Lorenzo Miguel of the UOM. Alfonsin’s impressive work with regard to Argentina’s transition to democracy did not register the same amount of success in his relations with the labor unions, however. Labor stayed Peronist, while the main supporters of the Radicals continued to be the national industrialists. Alfonsin’s inability to deal with the economic chaos certainly did not help to bring labor on to his side. By 1984, inflation had rocketed to 566 percent yearly. Nor did his proposed labor reforms succeed in democratizing the internal workings of unions or in bringing them under tighter government control.15 Successive failures in the political and economic domains caused Alfonsin to resign in 1989, six months before the end of his official term. Internal clashes within labor resurged with Alfonsin’s election and multiplied with his controversial labor policies. There was the militant wing of the CGT, led by Secretary-General Saul Ubaldini, which supported the use of work stoppages, protests, and demonstrations against the government. Support for the Ubaldini faction was stronger in the upper levels of union leadership than among the rank and file. Militant rhetoric notwithstanding, this group maintained amicable relations with the business sector, especially the Industrial Union of Argentina (Union Industrial Argentina, UIA), as well as the Catholic Church and the military (Gonzalez and Bosoer 1990).

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There were many other factions within labor in the 1980s besides the one led by Ubaldini. A second splinter group, called the “11 faction,” was a small corporatist alliance forged between some CGT leaders, the Argentine Rural Society, and big businesses within the UIA. A third group, called the New 25 Group, supported the Renovating Peronist Party, a faction within the PJ led by Antonio F. Cafiero, the Peronist governor of Buenos Aires. The Renovating Peronist Party and the New 25 Group aimed at democratizing the workings of the PJ and ousting the Radicals. The still-existing 62 Organizations comprised the fourth group. Composed, this time, of the old-line union bureaucracy and the paternalistic trade unionists, they thrived in the UOM as well as unions operating in the sectors of petroleum, light and power, meat packing, and healthcare. Their perspective was corporatist, guided by a liberal-capitalist ideology. Finally, the Group of 15 was an alliance built among some members of the 62 Organizations, the New 25 Group, and the UOM in March 1987 (ibid.). As shown in the myriad divisions within the CGT along different understandings and degrees of Peronism and the associated question of the type and level of cooperation with the non-Peronist military, the Argentine labor movement developed along more complex and controversial lines than the Turkish labor movement. Loyalty to one man and his ideas dominated and determined the evolution of the Argentine labor force for decades. While Peronism was strong in the union leadership, its strength and meaning were quite different among the rank and file. For generations, workers talked their sons and daughters out of becoming workers, although they themselves were Peronists. Dr. Osvaldo Battistini, a researcher at the National Council of Scientific and Technical Research (Consejo Nacional de Investigaciones Cientificas y Tecnicas, CONICET) and a professor at the University of Buenos Aires, says My father, a Peronist worker, wanted me to become an engineer, a doctor or a businessman. He did not want me to follow him in his footsteps as a worker. He wanted me to be my own boss. Many workers dreamt of putting up their own businesses.16 (Buenos Aires, June 2006)

Peronism, therefore, was a tool of political strategy that belonged to the ranks of the political elite (Heymann 1991). And with time, there were as many Peronisms as there were members of the political elite, including individual union representatives and politicians, but with


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the exception of the overtly non-Peronist Radicals. As one union representative put it, Peronism is more like a mystical religion. We all feel compelled to adhere to it in one way or another emphasizing some of its tenets, while downplaying or entirely discarding the rest. Some do it to obtain benefits, and some by conviction. Of course, the two are not necessarily mutually exclusive of each other. That is why it is safe to say that most Argentines are Peronists without being the exact same thing at all.17 (Buenos Aires, June 2006)

There was no equivalent political figure who had left his marks and ideas on the Turkish labor movement. The founder of the Turkish Republic, the only man who had a comparable impact in Turkey, never targeted labor or any other specific class to build his political power or to advance his project of state and nation building. Kemalism in Turkey was about political and economic modernization, with particular emphasis on secularism. On the socioeconomic plane, the main goal was the creation of a national middle class and not the empowerment of the working class. Peronism, on the other hand, was concerned with the creation and strengthening of a nationalist working class loyal to Peron himself and to his project of corporatism. Labor union leaders were less important in Turkey than in Argentina. While partisanship was a reality for the largest labor confederation, TURK-IS, PAP was in no way comparable to Peronism. PAP was a doctrine about following every kind of government in exchange for favorable policies, mostly economic benefits obtained during collective bargaining. Peronism, a unifying ideology and national identity, was also that but involved so much more. Peronism came to be equated with emotional ties and loyalism to one man and his ideas. Peronist union leaders were directly in touch with their corporatist allies in the Peronist governments. In Turkey, perhaps except for a brief period in the 1970s, governments almost always dominated over the union leaders, who, then, controlled the rank and file. Restructuring of Labor: Tripartite Division of Unions by Privatizations Following the transition to democracy in 1983, Alfonsin’s radical government focused primarily on the issue of human rights and punishing the military for the atrocities committed during the preceding dictatorship. Although combating the hyperinflation and

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initiating the privatizations process were among the economic objectives of the first democratic government of Argentina, Alfonsin failed to achieve the first objective and did not implement the second. Alfonsin’s motto was “With democracy, one can eat.” Economics proved him wrong (Panizza 1993). With the election of Peronist Carlos Menem in 1989 as Argentina’s President, a new era started in Argentina. Despite his populist rhetoric and promises of salariazo,18 once President, Menem initiated the most orthodox restructuring program ever seen in Argentine history. His restructuring program started with two emergency laws. The first one was the Law of Economic Emergency, which decreased subsidies to the SOEs and reduced public employment by attrition. The second was the State Reform Law, which initiated the privatization of a large number of SOEs, including the telephone, airlines, railway, oil, and coal companies, electric firms, water services, postal service, ports, and the Buenos Aires subway system. During the first year and a half of Menem’s administration, 60,000 government employees were dismissed (Alexander 2003, 210). The unemployment rate reached 18.6 percent by 1995. Privatizations were the main culprits for the dismissals (Novick 2000, 55). Before Menem, the Argentine model of labor relations was based on state corporatism in which the state was the de facto and de jure arbitrator between business and labor. Unions had an important role in this power arrangement, especially with respect to wages, which were constantly negotiated according to the expected rate of inflation and the associated cost of living (Tomada and Rigat 1999). This was also a system based on long-term employment, with significant revenues for the unions. Two levels of union representation, with little contact between themselves, existed: the bottom-level representation at the firm level by the internal commission of delegates and the toplevel representation by the national union confederations (Novick 2001, 27). Solidarity among workers sprang more from the top-level union representatives and their role as providers of social services, such as access to education, housing, health services, and vacation days to the members. Labor scholars writing on this period complained that unions had become more like service-lending agencies than organizations representing workers’ interests (Rosanvallon 1988). Menem introduced a decentralized system of collective bargaining. Instead of the traditional industry-wide collective agreements, he promoted labor-management negotiations at the individual plant level, thus depriving labor of its power to disrupt entire sectors in case sector-wide collective agreements failed. He also attempted to lessen


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Table 3.1 Deputies of union background in the Argentine House of Congress (1983–1995) Deputies of Union Background

1983– 1985

In numbers As a % of the total number of deputies

35 13.80%

1985– 1987 28 11.0%

1987– 1989

1989– 1991

1991– 1993

1993– 1995

26 10.2%

23 9.0%

18 7.1%

10 3.9%

Source: Compiled from Centro de Estudios para la Nueva Mayoría cited in González (1996, 202) and in Bambaci, Saront, and Tommasi (1999, 32).

the unions’ role in administering the country’s social welfare system, known as obras sociales, while strengthening that of the government and the private agencies.19 The number of labor leaders elected to the Chamber of Deputies in the 1991 election was only half of that elected in 1983 (Cardoso 2004). The decreasing trend in the numbers of deputies with union background in the Argentine lower chamber can be seen in table 3.1. Menem also canceled the indexation of wages to inflation. Instead, he linked wage increases to increases in productivity in any given firm (Novick 2001, 32). Accordingly, national labor union leaders would no longer deal with employers for questions of wage increases or working conditions. Local union leaders would do that in individual firms. Between 1991 and 1994, 62.5 percent of collective agreements signed between capital and labor were by sector. Between 1995 and 1999, this percentage dropped to 23.3 percent. In the same period, 76.6 percent of agreements were signed in individual firms by local union leaders. This shows that the local union leaders and internal commissions had a new, powerful role in representing the interests of the rank and file in the global era. The decreasing pattern in the number of sector-wide collective agreements and the increasing pattern in the number of firm-based collective agreements can be seen in table 3.2. One of the most important tools Menem used to reshape labor was the privatization of the SOEs. Privatizations rendered the workforce and labor disputes more heterogeneous (Novick 2000, 58). Unions, which participated extensively in the new decentralized and dynamic collective bargaining, operated in the privatized sectors, that is, the automotive, petroleum, railroad, gas, water, and electricity sectors (Tomada 1999). Hector Palomino and Cecilia Senen Gonzalez (1995) described the new labor relations of the global era as a continuously changing amalgam of subsystems of sectors, unions, and firms. In other words, with privatizations the single institutionalized

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Table 3.2 Revisions of collective agreements in Argentina (1991–2001) Scope Year

Activity

Sector

Firm

TOTAL

1991

38

41

18

97

1992

109

56

44

209

1993

88

39

91

218

1994

77

21

104

202

1995

67

4

125

196

1996

31

14

107

152

1997

31

10

167

208

1998

28

2

189

219

1999

28

4

152

184

2000

12

0

64

76

2001

22

0

128

150

2002

27

—

181

208

2003

56

—

338

394

2004

112

—

236

348

2005

203

—

365

568

2006

278

—

494

772

1207

191

2803

4201

TOTAL

Source: Argentine Ministry of Labor, Employment and Social Security. Note: For data after 2002, due to availability, the activity and sector variables were combined and put in the activity column.

system of business-labor relations ended. The previously centralized labor institutions and the clientelistic relations between the unions and the state were gradually replaced with what resembled a “social dialogue,” which consisted of consultations and negotiations between more independent unions and a more independent state (Cardoso 2004, iii). Privatizations also changed the nature of the workforce. A new type of contractual hiring, spurred by and for privatizations and sanctioned by the Law of Labor Contracts (Ley de Contratos de Trabajo), made outsourcing legal.20 Downsizing and rationalization significantly increased unemployment levels, which reached a record high of 18.6 percent in 1995 (Fraga 2001). Most of the unemployed were so by “exclusion,” meaning that their lack of skills made the likelihood of their returning to job markets in the future very low. The size of the informal workforce, therefore, grew rapidly—rising


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from 17 percent in 1975 and 18.7 percent in 1980 to about 35 percent toward the end of the 1980s and more than 50 percent by the end of the 1990s (Rosales 2007). The level of informal workers as of 2004 was estimated to be at a record high of 60 percent (Whitson 2007). Those who continued to be employed in the formal job market, on the other hand, received dwindling social benefits. The decline in social coverage was accompanied by increasing poverty: household income decreased by 51 percent between 1974 and 1990 and by 32 percent between 1994 and 1997 (Minujin 1999). Despite serious discontent against attempts at similar policies by Alfonsin, not a single general strike had taken place against Menem and his neoliberal policies by 1991. One reason for any lack of reaction on the part of labor might have been the rapid and secretive way in which policies were made. Technocrats worked behind closed doors and in cooperation with international agencies (Dominguez 1997, 3). Moises Naím (1995, 31) described this secluded way of policymaking as “chemotherapy” and contrasted it with a more gradual and consensual approach of economic restructuring. The second possible reason why Argentine labor was unable or unwilling to react to Menem’s policies right away was that it had partisan connections with, and an allegiance to, the Peronist government. The fact that the Argentine labor unions did not miss one opportunity to react to Radical Alfonsin’s privatization attempts supports the validity of the hypothesis that partisanship was a plausible explanation for the delayed mobilization against privatizations. The lack of identical partisan nexuses in the case of the Turkish labor, which also demonstrated a protracted period without any reactions to privatizations, suggests that there might be another and a stronger explanatory factor for labor’s response to privatizations. The explanation lies in the fact that labor, like many other sectors of society in both Turkey and Argentina, wanted and acquiesced to privatizations initially. The growing consensus toward the end of the 1980s in Turkey was that privatizations were necessary to eliminate the inefficient and corrupt SOEs. Argentines were so afraid of inflation soaring back again that anything was preferable to the Alfonsin era of hyperinflation, let alone privatizations. Menem’s honeymoon period also helped create this positive outlook. Finally, Menem’s charisma and his effective use of patron-client relationships were decisive in buying labor’s support. This was similar to Ozal’s astute coalitionbuilding strategies in Turkey (Acar 2002). Although apathetic at first, Argentine labor underwent new divisions as a result of these revolutionary changes in industrial relations.

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The new culprit for the ruptures within the CGT was now Menemism, epitomized by its privatizations of the SOEs. The CGT-Azopardo led by Ubaldini retained its militant posture and refused to take part in privatizations. Its counterpart, the CGT-San Martín led by Guerino Andreoni, was amenable to compromise. Despite their differences, the two CGT factions unified in 1992 to oppose the planned reform of social security (Gonzalez 1996, 78). This unification was followed by a new split a few months later: Some of the more militant unions in the CGT-Azopardo abandoned the CGT altogether, forming the CTA in 1992. The CTA was distinct from the CGT in its strategies, principles, and organizational structures. It claimed to represent all workers regardless of whether they were CTA members or not. The CTA resembled more an association based on social support and community networking than a labor confederation in the traditional sense. It included NGOs, human rights organizations, intellectuals, social and professional researchers, and artists in its board of directors. The CTA even granted membership to the unemployed, the retired, housewives, and prostitutes. It was supportive of the movement of worker-occupied factories and enterprises (Ranis 2005). Adhesion to the CTA was more of an ideological affiliation rather than an instrument for collective bargaining. The CTA thus pursued a type of unionism that was more autonomous of the state, political parties, and businesses, and geared more toward research, development, and mobilization of the labor force (Novick 2001, 38–40). Another rupture occurred in the CGT in 1993. The so-called Argentine Workers Movement (Movimiento de Trabajadores de Argentina, MTA) was composed mainly of transport, construction, metal, and metallurgy workers. Initially, the MTA very much mirrored the CTA in its discourse and programs. Both the CTA and the MTA refused to take part in privatizations and recommended that their members not participate in the privatized social security system (AfjPs).21 The MTA joined the CTA in militant opposition against Menem’s neoliberal government on various occasions. It also organized various protest movements taking a firm stand against foreign debt and social inequalities. Like the CTA, the MTA also strived to incorporate a multitude of social groups within its institutional boundaries (Fernandez 1998). The MTA’s essence, however, remained confined to the traditional Peronist credo of more state intervention and protection for the wellbeing of workers. As opposed to the CTA, the MTA encouraged partisanship with, and subordination to, the Peronist Party (Novick 2001, 40). When the MTA’s populist leader, Hugo Moyano, was elected as


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the CGT’s secretary-general in 2005, the MTA was virtually dissolved, and the CTA was left as the only alternative to the official CGT. As for Moyano, along with Jose Pedraza, the leader of the Menemist Railways Union (Union Ferroviaria, UF) and Chinese and Canadian investors, is now a buyer in the privatization of Belgrano railways.22

Conclusion: the Argentine Labor Movement Today The Argentine labor movement is much older, stronger, and institutionalized than its Turkish counterpart, in which top-down restructuring of labor relations seems to be more prevalent and pronounced. Both empowered and weakened by its Peronist heritage, the Argentine labor history was driven first by ideological then by Peronist discourse and cleavages. The economic and political changes introduced by Menem between 1989 and 1999 have transformed the Argentine labor movement in specific ways. Until the 1980s, the Argentine labor movement was characterized primarily by (1) a dominantly Peronist and state corporatist system based on closed-door patron-client dealings, (2) ISI and a closed economy, and (3) the lack of a nonpartisan and autonomous labor union movement. The profusion of SOEs contributed immensely to the maintenance of these characteristics. The worker, whose employer was the state, failed, or simply opted out of acting as a political animal, for the reasons that (1) he was part of the tradition of Peronist-style populism and benefited from it and (2) he took it for granted that as long as the Peronist party was in power, not only would his basic needs be taken care of, but there was even a chance for him to climb the ladder within the union hierarchy to obtain a management position within the SOE and possibly a place within the Peronist party. Menem’s restructuring of the economy via privatizations shook this historical pattern and thus marks a critical juncture in shaping the developmental pattern of the labor movement in Argentina. The three ways in which the Argentine labor institutions have changed in the 1990s can be summed up as follows: Political Unionism: This refers to a political strategy of continuity of loyalty between Peronism and Menemism adopted by the CGT-San Martin. While Peronism in the 1950s was about the nationalization of foreign-owned firms and sectors, Menemism was about the privatization of these very same places. All the same, the Menemist state employees’ union (Union of the Civil Personnel of the Nation,

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UPCN), water provision workers, chemical workers, meatpackers, textile workers, construction workers, pasta industry workers, lifeguards, railroad workers, and state oil workers, who constituted the San Martin branch of the CGT, preferred using privatizations as a tool to obtain economic and political perks. In exchange for its loyalty and consent to privatizations, the CGT-San Martin kept its monopoly on the provision of social security to its members and other worker groups. It also obtained various political posts and the opportunity of firsthand dialogue with the privatizing government in order to minimize the possible damages to its membership body. The strategy of political unionism was to refuse any direct and explicit involvement in privatizations while at the same time avoiding an openly anti-privatization stand. The justification for this strategy was that there was no other way but to privatize the economy in order to save it from its endemic crises. As such, the traditional clientelist partisanship dealings with the Peronist party were now adapted to the era and new requirements of privatizations. The exchange of patronclient benefits was now done on more neutral and professional terms, thereby adopting what can be called a “culture of professional compromise.” While as clientelist as before, the culture of professional compromise involved a socioeconomic justification of privatizations and thorough and open-door negotiations on their terms. Economic Unionism: This refers to the active involvement in privatizations of a group of previously independent unions within the CGT. Relatively large and financially well-off unions in the sectors of electrical energy, oil, retail, automobile, and metallurgy acquired organizational autonomy by expanding their services to segments of society other than just their members. They purchased firms in their respective sectors, created and administered private social security accounts, provided health care insurance to members and nonmembers, established firms that hired their downsized members to provide goods and services to private firms, and managed the employee-owned stocks of privatized enterprises (Murillo 1997, 86). As such, this group of unions created the kernels of what can be called a “culture of business unionism.” Business unionists were managers and union leaders, just as their affiliates were shareholders and workers simultaneously. They actively participated in negotiations with the government to change the conditions of privatization transactions, and not the privatizations themselves. Ideo-intellectual Unionism: The CGT remained as the representative of the most favored workers by privatizations, such as those in the sectors of auto-making and petroleum. The unifying point among


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them all was that to one degree or another, they all espoused capitalist solutions to the restructuring problems brought about by privatizations. The CTA, on the other hand, defied traditional unionism shrouded within the professional rhetoric of compromise while rejecting business unionism for its participation in the privatizations against workers’ interests. The CTA adopted a clear and consistent anti-privatizations outlook (Murillo 1997, 82–83), thereby adopting a “culture of confrontation.” While the MTA was also part of this culture at the outset, it moved from confrontational to business unionism upon its leader’s election as CGT’s secretary-general. In addition to these distinct yet mutually inclusive identities, Argentine labor confederations and the labor movement as a whole contributed to the democratization of the Argentine labor and political systems in the 1990s by virtue of (1) the CTA’s explicit support of the democratization project and its clear stand against attempts at reversing it; (2) the CTA’s formation of extensive links with civil society and international research organizations; (3) a cautious but gradual collaboration at the regional level, such as the CTA-affiliated UOM of Villa Constitucion, the CGT-affiliated UOM of Rosario, and other CGT-affiliated unions against privatizations in San Nicolas; (4) the formation of a new labor leadership at the local level comprising less ideological, more pragmatic, better educated, and more passionate union leaders; and (5) a stronger participation of local union leaders in collective agreements, and an increase in their power to determine the destiny of members at the plant or local level. Argentine labor unions still have a long way ahead to become fullfledged actors in democratization. Some of the unfinished tasks awaiting the Argentine labor movement can be summarized as follows: (1) Overcoming the political barriers dividing the confederations to enable more active cooperation between them and with other governance actors; (2) Democratizing the internal functioning of the unions by publishing regular reports about election procedures and by ensuring the turnover of top leadership; (3) Narrowing the gap between the rank and file and the union and confederation representatives by adopting a more civic, as opposed to a clientelistic, approach to union governance; and (4) Making the system of revenue collection and spending more transparent. Why did similar changes occur in the post-1980 period and accelerate in the 1990s in Argentina and Turkey? One possible explanation is the increasing isolation of the workers and unions amidst soaring unemployment, deunionization, and outsourcing—all of

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these factors being direct upshots of privatizations. The other potential account for why parallel structural changes occurred in the labor movements in Argentina and Turkey from the 1990s onward is the changed stand of the neoliberal governments toward labor, which then ignited the transformation of the unions. In any case, privatizations seem to be part of the reasons for the changed course of action adopted by labor institutions. The next two chapters review the privatization experiences of Turkey and Argentina and attempt to identify the causal mechanisms that operate between privatizations and the changing labor movements in these two countries.

Chapter 4

4

Turki sh L a bor in the Global Era 1 Autonomous Unions and Transiently Unified Workers

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ffects of privatizations on Turkish labor unions and workers have been manifold. Each one of the three major labor confederations has taken a separate and distinct approach toward privatizations, thereby differentiating and redefining their respective identities and roles in the Turkish political system. Privatizations have also generated an increase in stateness, defined as the “capacity of the state to specify the terms of economic interaction, to extract resources, and to centralize administrative procedures and coercive means” (Schamis 2002, 192). While labor unions were relatively strong in the period of state-led economy in the pre-1980 period, their political power has dwindled along with and as result of the privatization of SOEs where union leaders exercised influence in decision making. Unions, as the main clients of a quasi-socialist “Father State,” compensated for their loss of political power by adopting a more active and civic type of unionism, conducting social and economic research on privatizations, engaging in less violent, more creative, and diverse types of social protest, and employing a more professional and less ideological style of negotiation with the reforming governments and private employers. Parallel to these changes, unions also demanded, for the very first time, the democratization of the political system using privatizations as a scapegoat in the case of some unions, and as a window of opportunity in the case of others. DISK, for instance, vilified privatizations as the main enemy of political development and started a campaign of democratization against privatizations. TURK-IS complained about privatizations

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while using them as the main tool for dissemination of, and access to, information. HAK-IS, on the other hand, openly supported privatizations to embark upon its project of reforming an overarching state. While privatizations did not seem to have significantly altered the internal workings of unions as of 2005, they might have played a role in the rise of a new type of local union leader. The new union leader, at the local level, was typically more educated, younger, more pragmatic, less ideological, and more ambitious. He understood that in a world of either potential or actual privatizations, union representatives needed to be aware of their plants’ productivity levels and the financial markets and to keep track of the value of workers’ shares in privatized enterprises. The new union leader strived to be an equal interlocutor of the employer, to understand his language, and to respond to it in ways that best protected workers’ interests in a global and competitive world. The effects of privatizations on individual Turkish workers are complex. This research has shown that the majority of the relatively older workforce has chosen to employ individual or family networking solutions to deal with the negative consequences of privatizations, such as the loss of a job or downgrading in one’s position. The relatively younger and more educated workers have chosen to mobilize and engage in collective solutions in order to secure jobs in the formal market. Still a substantial group of workers has opted for partisan solutions in dealing with the adverse effects of privatizations by using their party affiliation to obtain jobs in the post-privatizations period. Overall, privatizations have not had a significant impact on Turkish workers’ social and political levels of activity, which has continued to be determined mainly by where they situated themselves on the left-right political spectrum. Privatizations, however, have led to temporary mobilization by the younger and more educated rank and file, who have demanded restitution, sometimes against the will of their union and union leaders. It is somewhat surprising to observe that privatizations’ impact on income level and social class has not translated itself into changing patterns or level of political activity for those affected by them. The reasons for this paradox might have to do with what privatizations are and how they are applied. The first part of this chapter therefore treats the definition of privatizations and their implementation in Turkey. The second part attempts to link privatizations to the changing structural features of the Turkish labor movement. The third section deals with the impact of privatizations on individual workers and how they have tried to cope with privatizations. As such, the chapter attempts to locate the causal mechanisms that operate between privatizations and the changes observed in the Turkish labor force and institutions.

Tu r k i s h L a b o r i n t h e G lo b a l E r a

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The Background of Privatizations: The Pre-Privatizations Period in Turkey As in most of the developing world, Turkey applied ISI policies in the period from the 1960s to the 1980s. These inward-looking development strategies consisted of import controls such as high tariffs, quantitative restrictions, and import licenses. The reasoning behind adherence to ISI was the indispensable need to become self-sufficient as a country. Coupled with Keynesianism as the guiding economic template of the times, the ISI was taken as more than a mere economic development strategy in Turkey. Although probably less forceful than the Prebisch doctrine in Latin America, Turkey adopted the French model of economic development called etatisme (statism). Statism can be defined as a form of interventionist economic policy involving a multitude of public enterprises. After the crumbling of the centuries-long Ottoman Empire and the devastation caused by the consecutive World War I (1914–1918) and the Revolutionary War (1919–1923) against the Allied Forces, Turkey was born as a parliamentary republic with very little infrastructure or capital. Statism was a tool of the nascent state to help forge all these necessary ingredients and build an economy from scratch.2 As such, it was also viewed as an indispensable condition for forming an independent and a strong state, with a leading role in the mobilization and allocation of resources (Shaker 1995). Statist ideology was also a natural upshot of the patrimonialist legacy of the Ottoman Empire, which involved a political center that did not want to share its authority, opting instead for a monopoly of power over political and economic resources (Kayhan 2006). Incorporated into the Constitution of 1937, and retained in the constitutional changes of 1961, the statist ideology provided the perfect ground for the ISI to become more than a simple developmental formula.3 The ISI worked more as an ideology than a tool of development in this sense. Despite initial successes with ISI, the eventual consequences of the policy were grim in Turkey, as they were in the rest of the developing world. The early phases in the 1960s and the beginning of the 1970s emphasized the production of consumer goods and brought relative prosperity. With the deepening phase in the late 1970s, however, significant debt was accumulated to finance the production of capital and investment goods (O’Donnell 1998, 58–64; Hirschman 1968). The resulting inflation, coupled with the deleterious effects of the oil crisis of 1973 and the Mexican default of 1982, brought uneven and

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discontinuous growth, backward agriculture, and massive budgetary and current account deficits. These and associated economic difficulties were soon accompanied by political predicaments, including consecutive inefficient coalition governments and consequent social unrest. Trade union strikes and violent student uprisings were everyday occurrences toward the end of the 1970s. As the ISI was reaching its end, extreme ideological polarization plagued the organized labor, professional associations, civil bureaucracy and the society as a whole (Ozman 2000). The recurrent military interventions that besieged both the Argentine and Turkish processes of democratization were, to one extent or another, also related to the political, social, and economic difficulties associated with the ISI. In both cases, the military solemnly declared itself to have the solution. The Turkish military in the 1980s, like its Latin American counterpart in the mid-1970s, aimed to change the economic development plan and rationale of the country from the old ISI to the new Export-Oriented Industrialization (EOI) model.4 Its main and more immediate objective, though, was to put a stop to rampant crimes and terror reigning over the country. Although the military was relatively successful in its economic stabilization plans, new problems arose. Bankers, who gathered large sums of money thanks to the freeing of interest rates, left the country or went bankrupt. Ozal, who was the military government’s minister of economy, resigned (Kongar 1997, 372). The apparent economic failure was one of the reasons that contributed to General Kenan Evren’s decision to voluntarily transfer power to Ozal’s civilian government in 1983. Unfortunately, the transition was not as smooth for Argentina. The 1980–1983 economic reforms undertaken by the Turkish military created a radical change in the economic path that Turkey was to adopt thereon. The reforms in question meant a clear shift from a quasi-socialist ISI to a liberal EOI model. They also involved a reconfiguration of the daily social life. In the pre-1980 period, one would be afraid to walk in the street with dollar bills in his pockets since this was against the law. The economic freedom and liberalism endorsed and dictated by the military put an end to the fear of prosecution. The military achieved that by instituting price deregulation and devaluation. The military also barred the deficit-prone and inefficient SOEs from borrowing from the Central Bank. It allowed them to increase the prices of their products and stopped the direct subsidies they received from the Treasury. These measures allowed the SOEs to report profits for the first time since the early 1970s. Some steps, albeit modest, were also taken in


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capital account liberalization by eliminating ceilings on bank deposits (Krueger 1995). These and the five structural adjustment loans (SALs) in 1980–1984 led to substantial amounts of financial resources flowing into the country. The World Bank (WB) and the International Monetary Fund (IMF) made it clear that they wanted Turkey to be a model of success for the rest of the developing world. These ambitions were identical to those that the same international financial institutions had in mind for Argentina (Demir 2002, 5).

Summary of Turkish Privatizations: Planning and Implementation While many scholars agree on 1980 as the starting date of Turkish privatizations, Latif Cakici (1990) suggests that privatization as a concept in Turkish politics was first seen in a decree of the military government dating back to December 12, 1972. Although the term “privatization” never made its way into the text literally, what policymakers meant by “opening up to the public” was nothing less than privatizations. The decree in question read as follows: SOEs shall be transformed into corporations and linked to holdings compatible with the principles of free market economics. They will then sell their shares (1) first to the workers of the SOEs being privatized, (2) then to the local population, (3) followed by the emigrant workers outside Turkey, and finally to (4) the national firms with good standing. If shares are left after that, private foreign firms can be considered as prospective clients, given that they invest in technology. (19)

Hulki Cevizoglu (1989), like Cakici (1990), claims that the Turkish privatizations started before the 1980s. He goes even further in maintaining that privatizations were imminent in the establishment of the first SOEs themselves. The statist ideology in Turkey never entirely excluded the private sector as a potential economic actor (Patton 1992). That said, the first actual privatizations of the SOEs had to await the military regime of the 1980s. Cevizoglu (1989) states that the first serious privatization undertakings date back to January 24, 1980, when the military government introduced its “Stabilization Program” (77). This program outlined the necessary structural changes to be made in the SOEs so that they could learn to operate according to the principles of free markets. These changes were formulated under three specific pieces of legislation and decrees issued under the civilian government of Prime Minister Ozal (Onis 1991): (1) law 2983 on Promoting Savings

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and Accelerating Public Investment, (2) decree 233 on State-Owned Enterprises (SOEs), and (3) privatization law 3291. The first piece of legislation, law 2983 of May 1984, divided up the SOEs (Kamu Iktisadi Kuruluslari, KITs) into two distinct categories: State Economic Enterprises (Iktisadi Devlet Tesekkulu, IDTs) and Public Economic Enterprises (Kamu Iktisadi Kuruluslari, KIKs). IDTs would be those KITs that were created to operate according to commercial and market principles. KIKs, on the other hand, would be those KITs providing “public services” active in service sectors and/or possessing a monopoly of production. Law 2983 also transferred the right to decide which SOEs to privatize from the parliament to the cabinet. This transfer of power on the oversight of privatizations from the legislative to the executive branch was the first step toward the gradual centralization of state power that went hand in hand with privatizations.5 The second part of the 1980 Stabilization Program refers to the somewhat contradictory decree 233, which introduced the principle of “contracted personnel.” The decree in question precluded that redundant personnel of the former SOEs be rehired. Those who kept their jobs after the privatizations were enticed to change their status to that of “contracted personnel” by offers of monetary compensation. Policies of contracted personnel created a gap between the incomes of the contracted and the permanent SOE workers. As such, decree 233 was also the most contested part of this preparatory phase of privatizations (Cevizoglu 1987). The third and most important privatization law was law 3291 of May 1986. It enumerated the agencies and ministries that would implement and control the privatization processes. Correspondingly, it divided the authorities in charge of privatizations into two categories: the cabinet would be responsible for the privatizations of the SOEs themselves, and the Mass Housing and Public Participation Administration (Toplu Konut ve Kamu Ortaklıgı Kurulu, TKKO), as a separate agency, would be responsible for the privatization of the affiliates and partners of the SOEs. Five different methods of privatization of the SOEs and their affiliates were prescribed by law 3291: (1) direct sale, entirely or partially; (2) sale of share certificates; (3) renting; (4) transfer of management rights; and (5) takeover and liquidation. Each privatization would consist of first transforming the SOE into a corporation. Once converted into a corporation, the SOE in question would be removed from the supervision of its affiliated ministry and placed under the jurisdiction of the Office of the Prime Minister.


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The TKKO was split into two bodies in 1990: the Housing Development Administration (Toplu Konut Idaresi, TKI) and the Public Participation Administration (Kamu Ortaklıgı Idaresi, KOI). The first organization was in charge of providing affordable housing to lower- and middle-income groups. The second supervised the tobe-privatized SOEs. The KOI would also determine the conditions of the sale, the amount of shares to be privatized, and all other matters associated with the divestiture.6 Once the legal and institutional dimensions were developed, the Turkish government contracted the American financial firm Morgan Guarantee Trust to draft a Privatization Master Plan (Ozellestirme Mastır Planı, OMP). The plan enumerated the SOEs to be privatized and ranked them according to the urgency of needed privatization. The plan also outlined the objectives of privatizations as enhanced industrial efficiency, economic growth, and the development of capital markets. Generating revenue from the sale of the SOEs was listed as a desirable but not a primary objective, although this was soon to be revised in tandem with the increase in financial needs7 (Tecer 1992, 5). Upon formulation and submission of the plan, the government swiftly changed course and chose not to implement it, arguing that it was not applicable to the realities of the Turkish economy. This sudden change in approach was later interpreted by scholars of Turkish politics as the natural consequence of the dead end reached by the ministries, none of which desired to let go the political and economic benefits associated with the SOEs operating under their jurisdictions (Yeldan 2005). The KOI changed its name to the Privatization Administration (Ozellestirme Idaresi, OI) and became autonomous with full responsibility for taking all decisions concerning revenues of sales. The objective of the OI was to promote privatizations in the parliament and in various circles of Turkish society. The OI also sought to privatize the profitable SOEs while excluding sensitive areas like military equipment and minerals. Law 3291 also included clauses to speed up the emerging privatization process, such as exemption from taxes and all other fees for prospective buyers. Other clauses aimed at preventing any potential social protest, such as the employment guarantee given to the Retirement Trust affiliated personnel, that is, the permanent workers of the SOEs to be privatized, so that they would keep their job until the government’s share went below 50 percent. The loophole in the social dimension of the law, on the other hand, was that it did not specify options for those not affiliated to the Retirement Trust, implying that they would either be fired or retired

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(Cevizoglu 1989, 87). They would have to wait for the 1994 law 4046, which instituted a social safety network in the form of unemployment insurance and assistance with job search and training. While legal preparations for privatizations took place in the early 1980s, the first actual privatization of a SOE did not take place until 1988, when Teletas, the government-owned telecommunications company, was privatized.8 The ANAP government, in line with its rhetoric and promises of popular capitalism, opted for the method of public sale of shares for this first privatization attempt. Much to the government’s dismay, however, only a meager public demand appeared for the shares on the part of national investors. This, in large part, originated from weak domestic capital markets in Turkey at the time. The weak demand was also caused by the general decline in stock markets and the announcement of a major investment cut by Mail, Telegram, and Telephone (Posta-Telgraf-Telefon, PTT), the state-owned postal service and a major customer of Teletas products. Teletas’ shares lost half their value the year its privatization was announced. By offering the shares of Teletas to the public, ANAP’s leader, Ozal, was acting in line with his campaign rhetoric, which emphasized popular capitalism as the main goal of privatizations. His stated objective of privatizations was the incorporation of the middle class and the workers into decision-making processes. “Workers,” he said, “from now on, will not only be owners of the company where they work but will also have a chance to participate directly in its management. In case a worker loses his job, his/her share will continue to be a source of revenue for him” (Aysan 2000, 27). The 1983 and 1987 government programs reiterated that the SOEs would be sold to the Turkish citizens, thereby facilitating the spread of capital to the masses (Ertuzun 1990, 33). Promises of popular capitalism were soon abandoned following the Teletas disaster. After that, the privatizing governments turned to the method of block sales, mainly to foreign purchasers, since the local entrepreneurs did not seem to be interested in privatizations, the latter due again to weak domestic capital markets. Selling SOEs to foreign companies, however, created nationalist resentment, leading many observers to dub Turkish privatizations “foreignization.” Ertuzun (1990), for instance, likened the sales to foreigners to the infamous capitulations, that is, economic privileges given out by the late Ottoman sultans to Europeans and believed to have contributed to the downfall of the empire. Comparisons were constantly drawn between privatizations at home and those in industrialized countries,


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mostly Western Europe, where privatizations have always included a cap on foreign ownership, typically ranging from 15 to 25 percent. Public opinion, which initially was in favor of privatizations thus quickly turned against them after the initial attempts at “foreignizations” toward the end of the 1980s. In addition to the “foreignization” dilemma, privatizations were also stained for the way in which they were carried out. The dominance of a technocratic style of policymaking and the excessive centralization of power in the executive branch started to foment distrust (Yalcıntas 1990). The TKKO consisted of a small group of technocrats chosen directly by Ozal to whom they, the TKKO technocrats, were directly accountable. The government personnel responsible for privatizations were thus independent of other ministries, such as the Treasury, the State Planning Organization (Devlet Planlama Teskilati, SPO),9 and the Central Bank. This arrangement gave this top privatizing institution significant autonomy vis-à-vis the parliament as well as the traditionally statist bureaucracy (Shaker 1995, 32). The centralization of power and excessive decree making in the global era are characteristics that are not unique to Turkey. Many privatizing countries in Latin America resorted to them in order to accelerate their processes of privatizations. Menem’s Argentina is notorious for bypassing the parliament and using it as merely a rubberstamping body in the making of laws pertaining to privatizations.10 This tendency, also called decretismo, is visible in excessive decree making by the administration of President Menem in Argentina. While Argentine presidents prior to Menem had used their decree power about 30 times in total, Menem used it more than 300 times in his first four years in office. The majority of the decrees were issued on issues related to the implementation of structural adjustment reforms and privatizations (McGuire 1997, 225–26). The centralization of political power did pay off in Turkey: five cement factories were sold to the French Societe Generale de Ciment, and airport ground services were given as a concession to Scandinivian Airlines (SAS) in 1989. The privatization of these two profitable sectors showed that the primary objective of privatizations in Turkey had by then shifted from increased efficiency and popular capitalism to revenue generation and debt reduction (Yeldan 2005). The privatization of the cement and airport sectors was followed by that of other equally profitable sectors of petroleum, telecommunications, paper, electricity, and iron and steel. In the sixth five-year plan (1990–1994), the government reemphasized its commitment to “privatizations as a key instrument

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in reforming the economy.” The goals of this plan were to increase economic efficiency, disperse ownership, and improve the quality of goods and services provided by the SOEs in local and international markets (Shaker 1995, 34). Despite these reassurances, however, the structural changes required for privatizations were still not undertaken in practice. The political instability caused by the inefficient and unstable coalition governments did not help. Nor did the recurrent economic fluctuations characterized by short periods of growth followed by increasing inflation and rising fiscal deficits. Labor unions had also become more active in generating resistance in the form of mobilizations and legal proceedings directed against privatizations. Their alliance with the left-leaning intellectuals in the parliament created a strong buffer against privatizations there. As a result of inauspicious political, economic, and social forces, the privatization of the gas company TUPRAS, the petrochemical company PETKIM, and the alcohol-producing state monopoly TEKEL did not generate the expected demand by international firms (Gunes 2004). Only limited success was recorded in the privatization of the iron and steel complex, Erdemir, the Turkish Airlines (Turk Hava Yollari, THY), and the telecommunications sector. Instead, these were put on the privatization list and left without being invested in until 2004–2005, when the sales took place. Meanwhile, courts canceled the privatizations of CI˙ TOSAN and USAS on grounds that they were illegal for not having been offered through public offerings prior to the block sale, as prescribed by the privatization law 3291. The legal opposition was accompanied by mounting social distrust due mainly to the increasing elitism and secrecy attributed to the Ozal government and the rumors that Ozal himself favored his political allies and friends in privatization transactions. The inefficiency of the post-Ozal coalition governments made the implementation of privatizations even more sluggish. In fact, seven years after the start of privatizations, only 0.5 percent of all SOEs’ fixed assets were sold. As of 1992, the entire divestiture process had generated a meager US $530 million (Shaker 1995, 34). Between 1986 and 1998, only 10 percent of state-owned assets were divested (Ficici 2006, 2). More importantly, however, the state still retained control of most of the companies to be privatized. It also continued to uphold its populist policy of bailing out several ailing public sector companies. The 1994 economic crisis characterized by high inflation and persistent balance of payment problems brought a new stabilization program with privatizations occupying an important place in it.


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The new privatization law 404611 demonstrated that Tansu Ciller’s center-right True Path (Dogru Yol Partisi, DYP) government was finally going to undertake the implementation of the long-planned privatization projects. This did not materialize, however, due mainly to her coalition partner from the ultra-right religious Welfare Party (Refah Partisi, RP), Necmettin Erbakan, who was staunchly against privatizations and pursued extremely populist economic policies including high increases in the working class wages and food subsidies to the poor. Mesut Yilmaz’s ANAP government, which followed the DYP-RP coalition government, was the first to receive a vote of no confidence by the parliament, due to corruption allegations in privatization transactions. Since privatizations proceeded very slowly, opposition had ample time to build up. Workers protested against layoffs, civil servants disputed the loss of their status in the SOEs, special interest groups objected to losing their privileged access to local political patrons, local industrialists complained of losing their access to domestic markets and subsidies, and finally, politicians complained about the loss of their constituencies. With sagging political support, civil governments in the second half of the 1990s resorted once again to the inflationary politics of increased expenditures apparent in wage resettlements, subsidies to SOEs and to other special interest groups, and increasingly generous export incentives. They thus followed the same recipe of neopopulist policies12 that the second Menem administration (1995–1999) applied in Argentina and did so for the very same reason: sagging political support. This led many scholars to conclude that democratization and economic liberalization do not go hand in hand due mainly to the virus of populism endemic to fragile democracies (Eder 2003).

Institutional-Level Analysis of Privatizations: Labor Unions in Turkey While the history of privatizations merits more attention, the direct and indirect effects of privatizations on labor is the focus of this study. The impact of privatizations on labor unions and workers in Turkey was substantial. Cevizoglu (1989) outlines two ways in which the 750,000 public sector workers in the mid-1980s were affected by privatizations: (1) by being the first group entitled to buy share certificates in the SOEs where they were employed and (2) by facing the risk of losing their jobs. In a previous study by the same author (1987), the labor unions’ knowledge of, and reactions

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to, privatizations were studied through questionnaires and in-depth interviews with union leaders. In this study, five questions were directed to the main Turkish labor union confederation, TURK-IS, and its affiliated unions. The questions were as follows: ➢ What do you understand of privatizations (definition and interpretations)? ➢ How do you evaluate the current situation of the SOEs? ➢ What do you think the downsides of privatizations are? ➢ Do you have any alternative suggestions to privatizations? ➢ Ultimately, are you for or against privatizations? The results of the 1987 survey demonstrated that the union leaders’ understanding of privatizations was either incomplete or ambiguous. Many did not know what privatizations were. Others were biased because they relied exclusively on socialist-leaning or ideological publications. As such, most were tempted to view privatizations as a political polemic rather than an economic tool. Finally, by the end of the 1980s, neither TURK-IS nor its affiliate unions had yet published any document related to the privatizations. I repeated Cevizoglu’s 1987 research in Western Turkey in 2005. I conducted extensive interviews with 14 Turkish union leaders at various levels of union hierarchy. I asked them the same five questions, plus five others:13 ➢ How do you think privatizations have affected the structure of the union movement, such as the divisions and groupings within federations and unions? ➢ How do you think privatizations have affected unions’ relationship with the state? ➢ Have privatizations changed the way unions interact with business and civil society organizations? ➢ Have privatizations changed the functioning of unions’ internal democracy in any way? If yes, how? ➢ What do you think the relationship might be between privatizations and democratization? This study corroborated the finding that the initial period of privatizations did not incite any significant reaction on the part of the three main confederations and their affiliated unions and sections. The two most commonly cited reason for the lack of a strong labor response to privatizations between the mid-1980s and the mid-1990s


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were (1) the cultural personality trait demonstrating a lack of concern for what does not affect one directly and (2) the government’s lack of credibility in implementing the privatizations. The secretary-general of TURK-IS’s first regional federation, Faruk Buyukkucak, said, Labor union leaders saw privatizations as a possible meteor that would not reach the planet Earth for thousands of years. (Istanbul, August 2005)

Mehmet Kılıc, the leader of the Bursa section of the United Union of Metallurgy Sector Workers (Birlesik Metal), affiliated with DISK, narrated the following anecdote to describe the initial reactions of the Turkish labor unions to privatizations: Three boars were living happily in their forest until one day when a friendly-looking lion appeared. The lion asked one the boars in private why he was always sticking up with his two other friends. He suggested that he, the lion, eats one of the boars so that they can rule the whole forest together. The first boar complied and the lion ate one of the two other boars. The next day, the lion asked the second boar the same question, and the second boar was eaten. The lion then said to the only remaining boar: for you, I don’t even have an excuse. (Bursa, August 2005)

Unions surveyed in the mid-1980s by Cevizoglu (1987) agreed that privatizations went against one of the basic founding principles of the Turkish Republic, namely the principle of the “social state.” The main reason the union leaders gave to support this argument at that time was that privatizations were destroying lucrative and competitive SOEs while hurting employment, thereby resulting in unequal distribution of income and resources. The arguments of “social state” pointed to the prevalence of political ideologies as a driving force in union leaders’ perceptions of privatizations. As shown in table 4.1., Table 4.1 Classification of the Turkish labor union system in the 1990s: Political ideology as the main divide and neoliberalism becoming controversial Division

DISK

TURK-IS

HAK-IS

MISK (1984–88)

Political LEFT—Social CENTER— RIGHT— RIGHT— Ideology Democrat Conservative Political Islam Nationalist Position toward neoliberalism Against Mixed In favor Against Strategy Confrontation Compromise Business Not relevant

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the main Turkish labor confederations could be differentiated from one another by their political leanings until about the mid-1990s. By 2005, all of the interviewed union leaders acknowledged that in the pre-privatizations period, the SOEs were decaying economically and were corrupt politically. Only a minority continued to cling to the argument of social state. The realization that privatizations were real and that all governments, regardless of political ideology or leanings, took a stab at them gradually convinced labor unions that globalization had hit Turkey and that they had to adjust. This showed the declining importance of political ideology among the ranks of union leadership and the growing impact of privatizations on the Turkish labor union system. Taskin Gundag, the secretary of education and mobilization for the Union of Food Sector Workers (Gida-Is) in Istanbul, said Privatizations go against the very foundation of the Turkish Republic because they destroy Populism (Halkcılık) and Statism (Devletcilik), which are two of the six pillars of Kemalist ideology. For some [showing his pack of a cheap Turkish-brand cigarettes], it is a matter of national pride and emotional attachment to smoke Samsun, and not Marlboro, even though, I must admit, the latter tastes better. (Istanbul, August 2005)

The survey questionnaires and in-depth interviews I conducted with the Turkish union leaders in 2005 also showed that, in contrast to 1987, they all now had a clear understanding of privatizations, regardless of their ideological and political leanings. Moreover, by 2005, union leaders had all devised numerous innovative strategies to act with or against privatizations. There was practically no union that had not published a report, an informative brochure, or even entire books defining, analyzing, and explaining privatizations and strategies about how to prevent and to survive them. Finally, interviews and the focus groups conducted with groups of workers, living in different cities and active in different sectors that have undergone privatizations, showed that union leaders and workers tend to direct their frustrations against privatizations at international financial institutions such as the IMF and the WB, and at the United States much more so than at the privatizing governments or the national entrepreneurs. As Ayfer Yılmaz, the senior researcher at the Union of Petroleum Workers (Petrol-Is), said This is ideological on the part of those international powers dictating the privatizations. So, we should respond in an ideological way if we want to prevail. That is why we came up with the idea of harnessing the


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anti-war groups by showing how privatizations in the gas sector were in fact helping the war in Iraq. This strategy paid off. (Ankara, August 2005)

The creative anti-privatization media campaign that the PetrolIs devised against privatizations included pamphlets, brochures, booklets, and advertisements in the major Turkish newspapers. One of these advertisements displayed a gas pump held as a revolver by a hand, against the neck of a lady wearing a golden necklace, the latter representing the economic well-being and honor of a family in the Turkish culture. The slogan read, “Tupras [the state-owned gas company] is our future. It cannot be sold” (Petrol-Is 2005). These and other strategies adopted by Turkish labor unions indicate that they have responded to privatizations in unusual and innovative ways. Until the mid-1980s, the Turkish union movement was primarily shaped by (1) state-dependent unionism and its strategy of PAP by TURK-IS on the political plane, (2) ISI on the economic plane, and (3) a lack of independent and competitive political experience on the social plane. These political, economic, and social features affected all unions, but more particularly those active in the public sector, since they were living in symbiosis with the state. In other words, unions active in the SOEs were also those managing their company, either literally or because they had considerable power over the civil servants who acted as their managers. Privatizations either lessened or changed the nature of the symbiotic ties between “state” unions and the “big cumbersome state” by transforming the former into “private sector” unions and the latter into a “smaller effective state.” Privatizations also offered a fertile ground for undemocratic and apathetic labor unions to gradually shift their political identity to adopt a different strategy that actively supported democratization. While such developments do not mean that corruption has ended, it does mean that the nature of unionism and labor-government relations has changed. According to an anecdote narrated by a former TURK-IS representative, it sufficed for a labor confederation leader to phone the prime minister in order for bureaucrats managing the SOE to be transferred, or better put, exiled to different parts of Anatolia in the 1970s.14 Now, it is state, and not the unions, that has the final say about the rules of the game. The replacement of PAP by more autonomous union strategies, the substitution of the ISI with the EOI model of economic development, and a more active union leadership are some of the visible changes introduced or stimulated by privatizations in the Turkish union movement.

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Table 4.2 Classification of the Turkish labor union system in the 2000s: Privatizations as the main divide Name

TURK-IS

DISK

Position

Implicit Proponent

Explicit Opponent

Enthusiastic Participant

Main Strategy

Survive in privatizations Pragmatic compromise Access to information

Defy privatizations Active confrontation Access to democracy drive

Thrive with privatizations Active collaboration Access to financial freedom

Culture Main Tool (Privatizations used as)

HAK-IS

As shown in table 4.2, neoliberalism and distinct attitudes toward privatizations were used more and more as position shapers in the Turkish labor union system in the 2000s. TURK-IS—Implicit Proponent of Privatizations The prelude to the transformation of labor as a result of privatizations started with the realization by TURK-IS, the largest confederation organized in the public sector, that the Politics of Above Parties (PAP) was no longer a suitable political strategy. Written into the bylaws of TURK-IS since 1964, the principle in question entailed maintaining friendly relations with the governing party or parties, regardless of their ideology, their stand on labor issues, or democratic credentials. PAP was not about staying above or outside politics, as it seemed to imply. Quite the opposite, it was about getting more entrenched in it. It was, to say the least, an implicit pact of collaboration between TURK-IS and the government of the day, wrapped in a package of “patriotic unionism” (Ozugurlu 2002, 181). In practice, PAP helped preserve a stable and predictable quid pro quo relationship between the unions and the state. Accordingly, labor would acquiesce to the policies of a given government, which, in turn, would allow the corresponding union leaders to enjoy political and economic benefits. With the elimination of PAP and the gradual decline of state-dependent unionism, unions started to become more independent. For the first time in the Turkish union history, unions voiced their explicit demands regarding union freedoms promised by the DYP and the SHP coalition government in 1991. Labor unions were important in forming an important check


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on the government by making sure that the coalition government signed the ILO Conventions 59, 87, 135, 142, 144, 151, and 158 in 1992 (Gulmez 1988).15 Privatizations led to the abolition of PAP by drying up the subsidy flows to the SOEs and the workers employed in them. Once the scheme of economic benefits in exchange for electoral support was abandoned, it became harder for the working class to get by. The disgruntled workers of the SOEs took their cause to the streets and staged the famous 1989 Spring Strikes. The 1989 Strikes were the first workers’ mass movement in the history of Turkish labor, which was organized without the initial intervention of union leadership. They also involved protest movements that were previously unheard of in terms of scope and strategies. Refusing to eat, leaving work to go see the firm’s doctor, organizing protest marches with bare feet, and sending mass telegrams to politicians were some of these innovative forms of social dissent. Agitation within the rank and file ultimately led TURK-IS officials to take an anti-government stand in the 1989 local elections. This was a first in the history of TURK-IS since its founding in 1952, leading ultimately to the erosion of its PAP rationale. The eradication of PAP signified the end of conspicuous and unconditional political support for whatever political party or coalition of parties was in the government. TURK-IS was astute enough to substitute PAP with another political strategy: the “implicit support of privatizations.” TURK-IS, in other words, by adopting an attitude less transparent vis-à-vis privatizations, became the implicit client of privatizations either by complying with them implicitly, that is, by inaction, or by supporting them. Doing that, TURK-IS continued to publicly criticize privatizations and altered its rhetoric from case to case. Although TURK-IS made less explicit use of its PAP strategy to contest privatizations in the beginning, it continued to experiment with patron-client type dealings with the governing parties. In fact, TURK-IS resorted to anti-government campaigns and mobilization only if and when PAP failed to produce the desired results. The negotiations that TURK-IS led with the government on the rehiring of the downsized personnel as a result of the massive privatizations of the 1990s, for instance, led to the formulation of the “4-C clause” of the 1994 privatizations law no. 4046. The 4-C clause gave the downsized workers the choice of transferring to public administration as temporary, nonunionized personnel. In this way, 1,800 of the 7,000 workers unemployed as a result of privatizations

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were placed in various government agencies as contracted public servants.16 TURK-IS’s intensive negotiations with the government showed its resolve to protect as many workers as possible and in any way possible in the privatization processes deemed inexorable by 2000. These negotiations, among others, also showed that TURK-IS had become more deliberative and autonomous and that partnership with privatizing governments was valued to minimize damage and to maximize interests. With privatizations, TURK-IS has also solidified its links with the private sector. The Turkish Employers Association (Turkiye Isveren Sendikalari Konfederasyonu, TISK) designated TURK-IS as its best interlocutor with the rank and file at the time of this study in 2005. Employers operated in harmony with TURK-IS representatives since “they alone knew how to speak the language of the workers from all corners of the country. The employers, factory owners and industrialists did not necessarily know how to talk to the rank and file,” said Tugrul Kutadgubilig, the secretary-general of TISK (2005).17 This confession attested to TURK-IS’ new role in the global era as an active hub of political bargaining and a facilitator between the government and the business sector in the 2000s. Privatizations also affected the relationship between the TURK-IS leadership and the rank and file. It is interesting to note, for instance, that the 4-C clause that the TURK-IS leadership was proud of, and cited as a positive accomplishment in many instances, was consistently referred to as the “infamous 4-C” among its rank and file, regardless of whether the interviewed workers were affected by privatizations or not. The fact that unionization was debilitated and workers with many years of valuable experience in different industrial sectors were obliged to work as cleaning staff or office boys for only ten paid months in a year in the public sector were some of the reasons cited by workers for vilifying the 4-C. A visible and significant distancing thus occurred between the rank and file and the union leadership due to the latter’s hinging role in the privatizations. As Kadir, a worker at the Turkish Telecom, which was sold a day before the interview to a private company from Saudi Arabia, put it “The privatizations have proved the chameleonic nature of the union leaders” (Istanbul, August 2006). As a result of privatizations, TURK-IS has found itself obliged to resort to new and modern union strategies of researching profitability, efficiency, and economic participation in the firms to be privatized as well as the globalization trends and the business practices of prospective buyers. TURK-IS has produced multiple reports and


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communiqués, has lobbied the government, mobilized its rank and file, and forged links with civil society organizations such as the Public Administration Development Center-Foundation (Kamu Isletmeciligini Gelistirme Merkezi, KIGEM) without entirely letting go of its old and trusted practices of partisanship with the governing party or parties, patron-client nexuses with the main industrial associations and employers, and its populist links with the rank and file.18 This innovative mixture and the fragile balance of old and new, traditional and modern, populist and liberal are not unique to TURK-IS or Turkey. Many labor confederations in other parts of the developing world have also ingeniously combined their old tactics with new ones once convinced of the inevitability of privatizations.19 DISK—The Explicit Opponent of Privatizations While TURK-IS cautiously collaborated with privatizations, DISK has taken a clearly and ideologically anti-privatizations stand. This was ironic in a sense since DISK is a labor confederation organized solely in the private sector, hence not as much affected by privatizations. This irony can be explained by the fact that privatizations were starting to be implemented when DISK reemerged in 1991 after a political ban on its activities dating back to the 1980 military government. Privatizations, therefore, provided DISK with a timely tool to forge itself a new identity. DISK equated its struggle against privatizations with one for self-reinvigoration. It declared its new mission to be “the earning back of social trust, the advancement of democratization, and the resolution of political problems.”(TISK 1995, 214). To attain these goals, it was indispensable to contest privatizations, which were causing poverty and social distress. Suleyman Celebi, the secretary-general of DISK, explained Privatizations hurt social development by pauperizing and marginalizing large segments of society. They also promote deunionization. So, it is inconceivable that they contribute in any way to democratization. Countries that are not industrialized cannot be democracies. Privatizations do not contribute to industrialization. Industrialization, and hence democratization, are possible only through institutionalization and planning under the auspices of the state. Turkey is at such a point that I would not be surprised if democratization itself is privatized one day. If we like privatization, why not hire a private company to democratize Turkey and the Turkish state? (Istanbul, August 2005)

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DISK’s project of democratization has consisted of tapping into the new societal consensus on Turkey’s membership in the European Union as well as the industrial requirements of being an advanced democracy, while making sure its “members were educated, informed and content with their lives” (Celebi 2005). To achieve these aims, DISK hired young and well-educated personnel as researchers and advisers and prepared research projects and analyses of political, economic, and social projects involving the whole community and the Turkish society (Genis 2002, 302). In fact, DISK stands out among the Turkish confederations as one that most overtly works on and for democratization. Participation in privatizations was refused by DISK on the ideological grounds that such endeavors would negate the very identity of a workers’ association. Unions participating in privatizations, in turn, were seen as examples of “yellow unionism.”20 Despite ideological repudiation, DISK has concentrated on the pragmatic consequences of privatizations. Researching and predicting that privatizations will most certainly extend to the education system soon, DISK has undertaken an innovative research project on, and an early organization of workers in, the sector of education.21 The case of DISK shows that privatizations, by rekindling an intellectual and social struggle, have worked as an invisible hand of democratization. Privatizations have promoted democratization not directly or purposefully but because they have sparked reaction, thinking, organization, and action. Privatizations, and the very struggle they have ignited, have contributed to the remaking of DISK as a center of research and activism on democratization. In its new identity and role, DISK has chosen to pursue a political project of democratization in which socialism no longer has a part. HAK-IS—The Enthusiastic Participant in Privatizations As opposed to the center-right TURK-IS and the left-wing DISK, HAK-IS, which subscribes to the Islamic ideology, has been an active participant in privatizations.22 Examples abound. In the privatization of Kardemir Steelworks in 1995, the HAK-IS-affiliated Union of Steel Workers (Ozcelik-Is) collaborated with the local population and a group of industrialists to purchase this industrial complex.23 The Union of Food Sector Workers (Ozgida-Is), another affiliate of HAK-IS, also participated in the privatization of the state conglomerate processing fish, milk, and meat products (Et ve Balık Kurumu, EBK; Sut Endustrisi Kurumu, SEK) in 1994, even though the


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government later abandoned the deal in the face of rampant criticism in the media.24 The Ozcelik-Is became a viable participant in the privatization of the Seydisehir aluminium plants. The AKP government, however, its ideological and partisan links with the HAK-IS notwithstanding, refused the privatization plan drafted by the labor confederation. According to Osman Yildiz, senior adviser to the secretary-general of HAK-IS, by refusing to even review the proposition, “the AKP government committed hara-kiri.” Yildiz (2005) said Were they to accept our participation in the privatization of the plant, many more privatizations could be accomplished and much more smoothly. But since the government refused, HAK-IS is not in good terms with the AKP government, at least for now. (Ankara, August 2005)

HAK-IS’s rationale for acquiescing to and participating in privatizations was that less government involvement in the economy would be beneficial for both economic and social development in the long run. Its involvement in the privatizations changed HAK-IS in two distinct ways. One was its activity level. Although HAK-IS had had only limited activities until the mid-1980s, it became much more active in the 1990s. It gave up its passive role as a mere critic of TURK-IS with no clear plan of its own to adopt a more active role as an enthusiastic participant in the privatizations. HAK-IS’s new plan consisted first of convocation, deliberation, and discussion; then the formation of alliances with societal actors, including the producers, farmers, and civil society representatives; and last but not least, engagement in extensive research. Yildiz (2005) calls HAK-IS’ new style of unionism as lobicilik or lobbying. The second way in which HAK-IS was affected by privatizations, albeit indirectly, was ideational. Arguably, the opportunity to participate in the privatizations in the form of acquiring and managing shares for union members ultimately contributed to HAK-IS’ resolving its identity dilemma and a redefinition of its values and future objectives. HAK-IS adopted a more professional look and a more secular outlook with privatizations. The change of its emblem from the trio of “a mosque, a crescent and a factory” to that of an “oracle, an olive branch and a crescent” pointed to more than a mere symbolic renewal. In the mid-1990s, HAK-IS redefined Islamic unionism as pro-capitalist and anti-state. Its panacea from then on became the formation of a vigorous civil society as an antidote to a cumbersome and overarching state. This made HAK-IS

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the first Islamic organization to move from political Islamism to the rhetoric of Western-style democracy and secularism (Bugra 2002). The confederation’s learning experience with privatizations provided it with the perfect terrain gradually to construct its renewed identity as an active “business union” in the 2000s. In its new role and identity in the global era, HAK-IS has made use of the civic strategies of reaching out to communities and business associations with multifarious social and economic projects. It has created cooperatives to help its affiliated members become shareholders in the privatized SOEs It has established social bureaus in major cities for educating and guiding workers and their families dislocated as a result of privatizations.25 It has set up “community houses” that welcome their displaced members and their families. These apartments offer temporary housing, counseling on economic, social, and psychological issues, and temporary financial help. HAK-IS representatives have also visited European capitals and contacted labor union leaders there to learn about their experiences and strategies used in dealing with privatizations. As a result, HAK-IS has chosen to become part of privatizations without losing its identity as a workers’ organization. Toward these ends, HAK-IS has undertaken extensive research on the possible ways of integrating into the global world. The research and policy orientation of HAK-IS has not stayed confined to the political economy of privatizations. The social dimension has also received its share of attention. The confederation’s report on the child labor industry in Turkey, for instance, is unique in that it outlines the problem in detail and suggests strategies to alleviate it (HAK-IS 2000). Finally, HAK-IS, much like its Argentine counterpart, Federation of Light and Power (Luz y Fuerza), is currently in the process of discussing the project of establishing a school of labor unionism where all workers, regardless of their affiliation or ideology, would be welcome.26

Privatizations and Democratization at the Level of Institutions: Paths and caveats A general typology of the main Turkish labor confederations according to their distinct positions vis-à-vis privatizations should not be taken to mean that the strategies of TURK-IS, HAK-IS, and DISK have been uniform and monolithic in their reactions. On the contrary, privatizations, by penetrating and perforating confederations, have placed unions along pro- and anti-privatizations lines also. As a result,


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a cluster of unions within TURK-IS has espoused clear and consistent anti-privatization policies à la DISK. One of these anti-privatization unions affiliated with the TURK-IS, the Petrol-Is, for instance, has instituted an active department of research that has produced informative and educational publications, anti-privatization brochures, posters, newspapers ads, and campaigns on radio and television stations. In its struggle against privatizations, Petrol-Is has reached out to many left-wing politicians, social democratic academics, journalists, and other intellectuals and made full use of multimedia technology to produce informative material on privatizations while simultaneously acknowledging the indispensable need to adapt to the changing circumstances.27 While each of the three labor confederations has taken a sui generis approach to privatizations, they all have converged in their new and explicit support for political democratization in Turkey. Since the beginning of the privatizations in the mid-1980s, TURK-IS has abandoned its pro-state PAP strategy to favor a more mixed and autonomous approach of political clientelism and professional negotiation. HAK-IS has used privatizations as an important tool to change its identity from passive and Islamic to active and pro-democratization unionism. Finally, DISK has channeled its antiprivatization ideology into a political project of democratization. As such, they all have reached out to the newly emerging Turkish civil society to organize panels, establish research institutions, giving the message that labor unions are now autonomous and legitimate actors of governance. They have tried to compensate for the loss in their membership via the image of a “professional negotiator” in the case of TURK-IS, an “intellectual activist” in the case of DISK, and a “compassionate entrepreneur” in the case of HAK-IS. The three confederations have also cooperated among each other as a direct result of privatizations. In fact, the pinnacle of the new union-promoted democracy movement in Turkey came at a time when privatizations were being accelerated and globalization was fiercely debated. The Platform of Democracy (Demokrasi Platformu), instituted in 1993 by the collaborative efforts of the three confederations, was a social enterprise that would have been unheard of in the pre-1980 period. Within the framework of this initiative, university professors, professional associations, and other white-collar professionals worked hand in hand with union representatives to organize conferences, produce research articles, and promote public awareness about privatizations. Although this civil society initiative by

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the Turkish union movement subsided by 1995, regional working committees remained, as did the desire to transform Turkish labor unions into more active and transparent entities.28 The Public Administration Development Center-Foundation (Kamu Isletmeciligi Gelistirme Merkezi, KIGEM), a nonprofit, nongovernmental research organization dedicated to labor issues and privatizations, is another organization founded by the collaborative efforts of labor and civil society organizations. This is an organization directly related to privatizations since its raison d’être is to scientifically establish that public enterprises can be run efficiently with adequate reforms and that privatizations are not indispensable. KIGEM, like DISK, constitutes a good example of the intriguing way in which privatizations have worked as an invisible hand of democratization, producing unintended consequences of increased civil society formation, activism, and research on and for democratization. This is the case because it was not privatizations per se, but the aversion toward them and their possible negative consequences, which led to the establishment of this vibrant civil society initiative. Internet sites, where leaders from labor and civil society sectors interact and publish their opinion pieces and articles, also emerged and spread rapidly in the late 1990s. The Labor Update (Sendika Gundemi) site, for instance, gives labor news from all around the world and interconnects the Turkish rank and file through social activities and research databases. The site also provides links to various national and international labor unions and organizations, newspapers and periodicals, youth organizations, and democratic civil society organizations. Privatizations constitute a category separate from globalization and politics on the homepage of the site. The Union Net (Sendikanet) is another portal that aims to connect the trade unions of Turkey with those of the rest of the world. The flashing slogan, “It is our future that is sold with privatizations; we are not going to sell our future,” shows the direct link between privatizations and the foundation of this civil society initiative in 2005. The new project that this organization is working on is the connection between democratization and a vibrant labor movement. Last but not least, the Center for the Investigation of Class in Turkey (Turkiye Sinif Arastirmaları Merkezi, TUSAM) is a civil society initiative founded in 2001 as part of the Center of Social Studies (Sosyal Arastirmalar Vakfı, SAV) whose aim is to study the Turkish society from a class perspective. In difference from the last two initiatives, this one has a more blatantly leftist tone and theoretical coverage. TUSAM also provides a rich source of articles and research initiatives


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on privatizations. All of these social initiatives have had privatizations at the root of their formation, as they explicitly state in their institutional history and objectives. To recapitulate, the interviews with Turkish union leaders and an overview of the recent developments in the Turkish labor movement from a historical perspective show that the effects of privatizations on the latter have been manifold. Structural Fragmentation with Strategic Cooperation: Privatizations have divided and reinforced the existing political divisions at the confederation level and led to a differentiation of union strategies in the political arena. The center-right TURK-IS has adopted a culture of compromise whereby it has acted as an implicit proponent of privatizations, whereas the left-leaning DISK has subscribed to a culture of confrontation whereby it has functioned as an explicit opponent of privatizations; finally, HAK-IS has espoused a culture of business unionism whereby it has become an enthusiastic participant in privatizations. Divisions with respect to the stand of labor on privatizations have also taken place within the confederations. Within TURK-IS, for instance, the Petrol-Is, the Gida-Is, the Union of Port Workers (Liman-Is), and the Union of Leather Workers (Deri-Is) have adopted an anti-privatizations stand in a similar way to DISK. The relatively well-off Union of Metallurgy Workers (Turk-Metal) and the Textile, Knitting and Clothing Industry Workers’ Union (Turkiye Tekstil Orme ve Giyim Sanayi Iscileri Sendikası, TEKSIF) have been proprivatizations à la HAK-IS. New Union Leadership and Governance Style: Although privatizations have not led to any visible changes in the internal organization and workings of labor unions, they have contributed to the emergence of a new and cautiously more autonomous leadership style at the local level. The active local leadership that has emerged in parallel to the privatizations has coexisted with the old and traditional ways of conducting labor politics. This has meant a decrease in and not the disappearance of the patronage-based partisan links between labor union confederations, as exemplified in the mitigation of the PAP principle. If one has to define the dominant leadership style in each one of the three labor confederations, it is possible to say that the TURK-IS leadership has chosen to “survive” in privatizations, HAK-IS has elected to “thrive” in privatizations, while the leaders in DISK have opted to “defy” privatizations. Demands for Democratization: Turkish unions have for the first time and explicitly supported political democratization in Turkey in

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the period starting with privatizations. Doing that, they have each used their respective and peculiar perceptions of privatizations as one of the principal stimulating factors for their new project of democratization: DISK’s negative perception of privatizations as the main culprit of all woes, such as growing poverty and marginalization; TURK-IS’ ambiguous perception of privatizations as both the force of deindustrialization and the tool for better access to information; and finally, HAK-IS’ positive perception of privatizations as a means to develop and strengthen civil society are the visible paths through which privatizations have advanced the democratization of labor unions in Turkey.

Individual-Level Analysis of Privatizations: Turkish Workers Labor unions are important institutions in both democratization and privatizations. Labor unions do not, however, provide us with a comprehensive picture of labor movements. The latter necessitate the scrutiny of those workers who make up the labor unions and whose lives have been directly and significantly affected by privatizations. It is true that in most countries, developing and developed alike, union leaders rather than the rank and file, determine the path a union takes in politics. But even then, a focus on democratization necessitates bringing in the workers and their perceptions for four reasons: (1) organized groups of workers, with or without their unions’ lead, are crucial collective actors in democratization processes (Collier and Collier 1991); (2) democratization is not only about strategic games played by the elite only, it is also about social movements and grassroot organizations; (3) if labor unions constitute a fertile ground for the study of the effects of privatizations from a meso-institutional perspective, perceptions of workers do the same for the study of the impact of privatizations from a micro-individual perspective; and finally, (4) individual and group perceptions are indispensable parts of the social and political life and are thus worth examining for a thorough understanding of privatizations. There are not many studies investigating the effects of privatizations on workers in the case of Turkey. Theo Nichols et al. (2002) carry out a historical analysis of Turkish unions from a sociological perspective and exclude privatizations outright. Cem Surhan’s (1999 and 2002) economic analyses examine the effects of privatization on job security, wages, and unionization from an economic perspective, without


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discussing democratization. Studies that focus on the impact of privatizations on workers examine the question of whether workers agree with privatizations or not, rather than attempting to gauge their political activism in response to the privatizations (Nichols, Sugur, Demir, and Kasapoglu, 1998). The only study that directly includes workers is the work by Aysit Tansel (1998), who examines workers displaced as result of privatizations in the cement and petrochemical sectors. Tansel’s focus, however, stays confined to socioeconomic hardships and professional endeavors of workers in the post-privatization period. It does not extend to the political dimension of privatizations. Have workers affected by privatizations in different ways and degrees changed their political attitudes toward democratization? Have they lost trust in democracy in the wake of privatizations? Have they become more or less active politically? Have they joined social movements or gotten involved more in local community activities to voice indignation or to protest? How has their voting pattern changed toward political parties with a specific positioning on the issue of privatizations? Have they tried to chastise the pro-privatizations government by granting their political support toward another party? Do these workers themselves perceive a link between the potential changes in their political attitude and the privatizations? These and related questions are important for a thorough understanding of the sociopolitical consequences of privatizations.

Research Methodology and Findings This research on the impact of privatization on workers uses three different methods. One is the short survey questionnaire conducted in a nonrandomly selected sample of 28 male Turkish workers in several cities in Western Turkey, who are currently or were previously employed in sectors that have undergone privatizations.29 The other method is the focus groups involving 20 out of the 28 workers surveyed. The third method used in this study is the in-depth interviews run with eight individual workers. All three methods complement one another by allowing the analysis to focus on both context and substance, analyzing the individual experiences of workers to tease out expressions of causality between privatizations and democratization. The focus groups, summarized in table 4.3, constitute the most important methodology from which come the conclusions of this part of the study. Accordingly, two to three short questions were directed to workers in five focus groups, two of which were conducted

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Table 4.3 Focus Groups in Turkey, 2005

I II

Place/Sector BURSA automotive I˙ZMIT

Participants

Dominant Ideology

Confederation affiliation

Partisanship

Priv. Impact

Priv. Perception

PPPP

5

Left

DI˙SK

Yes

None

⫺

Same

4

Right

HAK-I˙S¸ if allowed

Yes

⫺

⫹

Same

paper III

I˙STANBUL ports

3

Center-right

Previously TÜRK-I˙S¸

No

⫺

⫺

Up temp.

IV

ANKARA Petroleum/cement I˙STANBUL tobacco

3

Center-left (Social Democrat) Left

Previously TÜRK-I˙S¸

No

⫺

⫺

TÜRK-I˙S¸

Yes

None

⫺

Up temp. Same

V

5

Note: PPPP refers to Post-Privatization Political Participation.


FG


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in Istanbul, one in Bursa, one in I˙zmit, and one in Ankara. The questions were as follows: ➢ What do you think of privatizations? ➢ How have privatizations affected your life in social, political, and economic terms? ➢ Have privatizations made you more active politically—leading you to participate more than just through voting, including involvement in street protest movements, contacting your local and national representatives, organizing or joining a social movement, a local grassroots organization, et cetera?30 Focus groups conducted with Turkish workers showed that they have very strong opinions about, and generally a hostile position toward, privatizations. This was the case regardless of whether they were directly affected or about to be affected by privatizations, or not affected at all. Workers from the German-owned Gramer factory, which produces car seats, in Bursa, for example, were all from the private sector, thus not affected by privatizations. They, however, portrayed a much more anti-privatizations attitude than some of the workers who were directly and negatively affected by privatizations, like those former workers of the now privatized paper and cellulose producing SOE (Turkiye Seluloz ve Kagit Fabrikasi, SEKA) in Izmit. These workers lost their jobs along with their accustomed way of life with privatizations since they and their families had also worked in the same plant for generations. Yet, after less than a year following the divestiture, they were now converts of privatizations, dubbing them “a sour but necessary medicine for the Turkish economy.” What explains this incongruity? Why those workers downsized as result of privatizations are for privatizations, while those who are not affected by them are against? This incongruity is easily explained when the political ideologies of the constituents of the two focus groups are considered. The private Bursa-Gramer factory workers were affiliated with the left-wing and strongly anti-privatizations labor confederation DISK. The former SOE workers of Izmit-SEKA, on the other hand, while legally barred from becoming union members due to their status as “temporary public employees” in the Izmit municipality, were replicas of what the right-wing, pro-Islamic labor confederation HAK-IS stands for. As a matter of fact, all of the participants of this focus group, except for one worker, were members of the Islamic AKP. In both cases, workers were active both in their unions, and in some cases, in the political parties of which they were members,

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except for one worker in the Izmit focus group who was neither a supporter of AKP nor a convert of privatization. These two groups of workers were young, their ages ranging between 20 and 35 years. When asked about the links between privatizations and democratization, surprisingly the new converts of privatizations extrapolated a much more positive linkage than the workers with an anti-privatizations attitude in Bursa. The latter saw privatizations as decreasing the social status and economic well-being of workers, hence pernicious for democracy. In contrast, the former focus group thought that “privatizations may bring democratization when and if workers’ standard of living can be improved over time” (Izmit, August 2005). These contrasting perspectives showed that privatizations were less important than ideological and political allegiances in determining workers’ attitudes toward privatizations and their level of activity during and after them. But, what about the vast number of workers who do not necessarily subscribe to a strict political ideology, but who rather swing in between the two far ends of the political spectrum? Would these workers change their political perceptions of state-society relations or the nature and level of their participation in the political system as result of privatizations? In this regard, the Istanbul focus group presented a different, but equally important, effect of privatizations on workers: workers devoid of any definite and strong political ideology, who lost their job as a result of privatizations, became active in contesting the privatizations to regain their jobs. They did so only temporarily, however, as their collective action subsided once a good enough compromise was reached at the end of negotiations with the government and the unions, and they were then allocated to different government institutions as temporary public employees via the 4-C clause of law 657 starting with 2001. As such, the former workers of the SOE Turkish Maritime Administration (Turkiye Denizcilik I˙sletmeleri, TDI) who placed themselves in the center of the political spectrum and did not subscribe to any given political ideology, discontinued their activism upon recuperating jobs in the General Directorate of State Hydraulic Works (Devlet Su Isleri Mudurlugu, DSI). The participants of the Istanbul focus group were former members of a grassroots protest movement against privatizations started by the downsized rank and file in Turkey. Called the Victims of Privatizations (Ozellestirme Magdurlari, OM), the OM was a nonviolent protest movement of workers and independent of union leadership support. It was, however, very hard to keep the members of the movement together once their mobilization paid off and they obtained new jobs.


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As the founder of the movement, Unver, confessed “the lack of trust by the adherents of the movement toward one another was so high that it was impossible to maintain unity once the 4-C was legislated.” Unver and his small circle of friends in the OM sought to institutionalize the movement by transforming it into a grassroots organization, or alternatively, a “Union for the Victims of Privatizations.” They were then blamed by other members of “trying to squeeze money out of them, just like unions have done!” (Ankara, August 2005). The self-proclaimed leader of this movement, Unver, lost his job after having worked for nineteen years in the previously state-owned Petroleum Refineries (Petrol Ofisi) when the latter were privatized in July 2000. He decided to organize a movement of the rank and file when its union stayed inactive during the first 19 months after the privatization of his firm. When 4-C was legislated, he was assigned to the Ministry of Health as a clerk. Unver’s case shows, in his own words: An individual who is conscious politically and active civically continues to be so with or without privatizations. Privatizations only constitute a catalyst for more participation and social mobilization by necessity and for a temporary period of time at best. (Ankara, August 2005)

The Ankara focus group, of which Unver was a participant, also involved two other downsized workers, Halil and Rasim. They were the current members of the now more dispersed and less popular OM movement. When asked why they were participating in such a social mobilization, they answered “We would like to secure a stable job and not be condemned to the informal markets forever.” These two former workers of the Lalapasa Cement Factory (Lalapasa Cimento Fabrikasi) in Edirne,31 which was undergoing privatizations at the time of the interview in August 2005, used their severance payment to sustain their family after privatizations. They held various temporary positions in informal markets because they were not able to find a stable job in the formal markets, nor did they really desire to do so initially since this would mean that they would not qualify for the 4C clause.32 They wrote letters and sent out several faxes to their local representatives and to the Office of the Prime Minister until they met Unver by pure coincidence. They then organized small-scale protest movements in front of the building of the Privatizations Administration (Ozellestirme Idaresi Baskanlıgı, OIB) in Ankara, thereby becoming the self-appointed regional leaders of the OM movement from the region of Thrace.

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What is interesting to note about the case of these two relatively new OM members is that they put extreme emphasis on their onetime talk with Kemal Unakitan, the Turkish minister of economy, who also happens to be a native of their hometown, Edirne. Using their “village camaraderie,” in their own language, they were able to obtain the word of Unakitan for their inclusion into the 4-C as public employees.33 They were now working to have the word put in writing. It was clear from the accounts of these two victims of privatizations that they were in this political struggle only until obtaining a new and secure job in the formal market, and not thereafter. While the OM was a provisional social movement, it was uniquely and directly about privatizations. Therefore, it presents a direct and indisputable upshot of privatizations on social and societal grounds.34 The OM was also one of the first overtly anti-union and entirely grassroots-based social movements in Turkey, even though later on in the struggle, when the popularity of the movement increased in the eyes of the public, TURK-IS and HAK-IS leadership gave partial support.35 As an innovative social movement, the OM was able to make itself public through the use of various means of protest. Waiting in front of the TURK-IS building in Ankara every day after 5:00 PM, organizing for busloads of workers from all around the country to come to Ankara for staging protests in front of government and union buildings, organizing a big march from Istanbul to Ankara in September 2002 were some of these new and innovative forms of protest.36 In all, the OM experience has been an important learning experience in the Turkish democratization process by (1) showing that citizens from all over Turkey can mobilize around common goals and projects; (2) putting pressure on the government and union leaders; (3) acting collectively to voice demands publicly using effective, peaceful, and diverse means of social protest; and (4) making effective use of the media to make itself heard on television and through written means of communication. While smaller in size and influence, the links forged between the new victims of privatizations and the employed founders of the OM have persisted. The OM members staged a march from all of the Anatolian cities to Ankara in July 2006 to protest the 4-C clause.37 Although the OM constitutes a temporary but important collective action experience, the second Istanbul focus group has made clear that privatizations had to be real and implemented to ignite workers’ action. That is to say that for workers who were still employed in the SOEs lingering in privatization programs without yet being privatized, it was


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virtually impossible to collectively organize against prospective privatizations. This was the case of the workers employed in the state-owned Turkish State Monopoly on Tobacco (Tutun Mamulleri, Tuz ve Alkol Isletmeleri, TEKEL) that has been in the privatizations program since 2001.38 Although the participants of this focus group held a strongly anti-privatizations attitude, they had not yet taken any concrete steps toward a collective plan of action, were they to be downsized in the upcoming privatizations. Faced directly with the threat of privatizations, why would these workers with leftist ideologies not take any action? What could possibly explain their apathy? Whatever the cause for the lack of action on the part of the tobacco workers, it could certainly not be a lack of credibility vis-à-vis the upcoming privatizations. TEKEL Tobacco had already reduced employment from 67,000 in 1980 to 17,000 in 2004 (Akduran and Senesen 2005, 9). These workers had thus seen their friends leave the company one by one in the long preparatory pre-privatizations phase. Perhaps, one can look for an explanation in the ways in which privatizations were carried out in other TEKEL plants. If their previously downsized friends were perceived to be better off, or at least, not worse off in their post-privatizations adjustment, these workers could choose not to spend any efforts for mobilization. Indeed, TEKEL’s privatization program ensured that the downsized personnel be reallocated to other TEKEL plants throughout the country. One of the participants in this focus group was a transferred worker from TEKEL’s alcohol-producing plant in Diyarbakır privatized in 2001. This finding, of course, is interesting in itself since it shows that privatizations have resulted in waves of internal migrations of workers and their families in Turkey. Although beyond the scope of this analysis, such displacements have entailed various problems of cultural and social adaptation for all family members, especially for those who have had to move from the interior hinterland to industrial metropolitans like Istanbul. Taskin Gundag, the secretary-general of the Union of Food Sector Workers, confirmed Privatizations have created a stressful and depressed Turkish society. People were obliged to move from their single-family homes in the agricultural interior to small apartments in noisy and unfriendly metropolitan cities like Istanbul, Tokat or Samsun. In some cases, two or three families share an apartment due to the high living costs in these cities. (Istanbul, July 2005)

The lack of action on the part of the workers until the moment of actually losing a job was corroborated by the in-depth interview

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conducted with Kadir, a Telecom employee, who placed himself at the center of the political spectrum. Turkish Telecom (Turk Telekom) was bought by a consortium led by Saudi Arabia’s Oger Telecom at the time of the interview in 2005. The very next day after the sale, workers in none of the call centers all over Istanbul had organized or taken any action to contest the privatizations. As Kadir stated We could potentially do so if we lose our job. We will first wait to see the end of the union negotiations and take it from there. (Istanbul, September 2005)

To summarize, focus groups, in-depth interviews, and survey questionnaires have made it clear that Turkish workers have responded in three distinct yet mutually inclusive ways to privatizations: individual-family, clientelist-party, and collective-social. Individual Solutions Using Family Connections Although not visible in the outputs of the focus groups, previous research by Tansel (1998) has shown that most Turkish workers who lost their job as a result of privatizations were those who were close to retirement. These people accepted the generous retirement packages and severance payments coupled with seniority compensation (kidem tazminati).39 The typical post-privatization activity of a retired worker as a result of privatizations was to return to his or her hometown in Anatolia and become a shopkeeper or a taxi driver or a farmer cultivating his family land. In case these investments went awry, which fortunately was not frequent, these former workers would then rely on family support. Since most of the Turkish workforce also own land in less industrialized parts of Turkey, additional revenues and/or food from their land would be enough to get by on through the transition period between the privatizations and the finding of a new income-generating activity. Clientelist Solutions Using Party Connections Younger and more ambitious Turkish workers seem to have crafted a new and a much more political strategy for coping with the deleterious effects of privatizations. The former workers of the Izmit-SEKA paper plant, currently employed in the AKP-run local municipality in the same city, used their party connections to obtain their jobs. As a creative way to pressure the government to reinstitute their jobs after privatizations, these workers went as far as to collectively cancel their party membership when they were downsized. The AKP Izmit


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branch rejected this request, and they were all promptly reassigned to their new posts. It seems that using their party connections was the most efficient and fastest way to recover a job lost as a result of privatizations, given that the party in question was in the government.40 These workers also shifted their stand on privatizations from being nonbelievers to being believers in privatizations. Collective Solutions Using Social Mobilization This was the most arduous yet socially and politically vibrant way of responding to privatizations. It took a lot of hard work, courage, and time to organize against a bulwark of established institutions such as a privatizing government, well-organized business groups, and overtly or implicitly complying unions. Union leaders did not want to share the lists of the unemployed, which would have facilitated informationsharing and collective organization. Moreover, they did not like the fact that a few workers were thinking about self-organizing to protest the privatizations of which most union leaders were part in one way or another. The government personnel responsible for privatizations complained about the absurdity of some claims from workers who were being displaced or relocated as result of privatizations. Veysel Tekelioglu, the department head in the Privatization Administration in Ankara, for instance, stated There are workers who are coming to see us or are bombarding us with faxes asking us to change their jobs so that they can be included in the 4-C. They want to change their jobs because of some trivial reason such that the new private owner does not let them park their cars close to the plant anymore, this causing them to walk to work. They say they prefer having more vacation and less money but continuing to work for the state, and not a private owner. (Ankara, August 2005)

Privatizations and Democratization at the Level of Individuals: Paths and caveats This research carried out in different cities across Turkey with bluecollar workers active in sectors as diverse as tobacco, auto, petroleum, cement, ports, and paper and affiliated to union confederations of diverse political tendencies has shown that ideological convictions more so than cost-benefit analyses have determined workers’ reactions to privatizations. While political ideology has a sway in determining the nature and degree of social and political action vis-à-vis privatizations,

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all of the workers included in this study regardless of their union affiliation or political standing were against privatizations emotionally, except for the right-wing former state employees who turned into pro-privatization actors after obtaining jobs. This change in position was also in line with the ideology of the political party, the right-wing AKP with an Islamic pedigree, of which they were active members. Finally, all workers ceteris paribus seemed to avoid any kind of planning or organization before the privatizations really hit them. The idea and prospects of privatizations, in other words, were not sufficient to incite any concrete action or mobilization on the part of workers. I complemented the focus groups with a short survey questionnaire on the relationship between privatizations and the consequent sociopolitical activity on the workers’ part. The latter showed that privatizations do not seem to have a significant effect on the voting decisions of workers. None of the surveyed 28 workers responded “yes” to the question: “Have privatizations led (or might lead) you to change the party you have voted for in (the last) elections?” This finding runs counter to the initial hypothesis of this study that privatizations should stimulate the rank and file to change its voting behavior as a way of protesting the privatizing government for the sudden fall in their income levels and standard of living. This finding also supports Yilmaz Esmer’s (2002) conclusion that the first and foremost factor molding the Turkish voter’s behavior continues to be the leftright ideology (110). One can safely assume therefore that religious values and nationalist sentiments continue to be better predictors than relative deprivation, economic well-being, or income for voting patterns in Turkey.41 These findings on privatization’s lack of influence on political behavior such as voting or social mobilization do not mean that privatizations are superfluous politically. One major finding of this analysis is that privatizations have indeed generated a provisional but vibrant social movement of the Turkish rank and file, due mainly to the workers’ perception of the unsatisfactory handling of privatizations by labor union leaders. In other words, privatizations have increased the lack of trust between the rank and file and union representatives, thereby driving the former to take their destiny into their own hands and to mobilize outside the scope of unions. Such national mobilization and organized protest movements by the rank and file have had the pragmatic aim of securing jobs in the formal labor market. Thus, the maxim for a typical Turkish worker overall has remained, “Being a member of the worst union is still better than not being a member of any union at all.”


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Conclusion: Impact of Privatizations on Unions and Workers in Turkey The analysis of the impact of privatizations on Turkish labor shows that labor institutions were greatly affected by them. As result of privatizations, the Turkish labor unions became more amenable to democratization. From the 1990s onward, Turkish labor confederations and unions were (1) cooperating more with each other and civil society organizations while at the same time keeping their autonomy and moving toward a less hierarchical union structure; (2) implicitly and explicitly supporting democratization and taking a clear stand against attempts at reversing it; (3) giving in to the demands of their rank and file and the unemployed, albeit to different degrees, to support, or at least, not to forge a barrier against, new formations outside the scope of the unions; and (4) searching for innovative ways to adapt to the changing economic imperatives of a globalized world. One reason the Turkish unions were engaging in these activities is because privatizations and their perceived or real negative impact on unionization and employment forced them to find new ways of doing union politics. As such, the negative consequences of and expectations about privatizations, and not the privatizations per se, acted as an invisible hand in producing the unintended changes in question in the Turkish labor movement. The analysis of the impact of privatizations on Turkish workers shows that the effects of privatizations on individuals are not strong in the long run. While privatizations rarely change the political activity and the nature of participation of workers affected by them, individuals who were active politically and socially before the privatizations continue to be so after the privatizations. Although the vibrant social movement of the Victims of Privatizations was formed and spread throughout the whole country, the undertaking in question dwindled, without coming to a complete halt, once the desired end of obtaining a job in the formal markets was reached. The initiative, however, came from the masses, and despite union leadership, and constituted an important learning process of social mobilization. Privatizations are not the only factors influencing the development of labor unions and the attitudes of workers. An alternative and highly plausible explanation for labor union developments can be the “historical model of labor unions” in a given country (Goldin 2001). One way to strengthen the hypothesis that privatizations are at the cause of the various structural, institutional, and attitudinal changes in the labor movement in the post-privatization period is to

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compare the findings from the Turkish case with a different historical labor model. Ideally, this second labor model should be as far away as possible from Turkey, geographically, culturally, and historically. Argentina constitutes such a case where the effects of privatizations on labor can be examined from a comparative perspective.

Chapter 5

4

Argentine Labor i n th e Global Era More Plural Unions and Atomized Workers

E

ffects of privatizations on Argentine labor unions and workers have been manifold. At the institutional level, the General Confederation of Labor (Confederacion General del Trabajo, CGT) was fractured into groups of labor organizations that have taken separate and distinct approaches to privatizations, including diverse strategies of collective action and revenue generation. Privatizations also have generated an increase in stateness1 by breaking the organic ties between union leaders acting as the managers of SOEs and the government. Finally, a new union leader has emerged at the local level of representation with a broader horizon, stronger educational background, and more ambitious plans of both personal and organizational advancement. The divisions within the union structure have coincided with the distinct attitudes adopted vis-à-vis privatizations. Some unions have taken on a more active and civic type of unionism, becoming involved in extensive social and economic research on privatizations and crafting less violent, more creative, and diverse types of social protest. Others have compensated for their loss of political prominence without breaking their ties with the Peronist ideology or government, hence keeping the patron-client type of arrangements that have long characterized the Argentine system of labor relations. Another group of Peronist unions with a historically more independent attitude toward Peronism has adopted a more professional and less ideological style of negotiation with the reforming government and the private sector. Many of

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those unions have pushed for the democratization of the political system. Unions affiliated to the CGT have not been as vociferous about the democratization process. Nevertheless, they also have included demands of democratization in their discourse and projects much more so in the privatizations and post-privatizations periods than before. While privatizations’ impacts have not reached the level of internal functioning of the labor unions, they have facilitated the rise of a new type of local union leader. The new leader understands that in a period where privatizations are either happening or have happened, union representatives need to be aware of the productivity of their plants, and the financial markets in general, in order to keep track of the value of workers’ shares in privatized enterprises. The new union leader of a pro-privatizations union at the local level tends to be more educated, younger, more pragmatic, and less ideological. In a similar way, the new union leader of an anti-privatizations union at both the local and the national levels is more open to dialogue with different ideological tenets, more active in social and political domains, and well-versed in current research on privatizations and development. At the individual level, privatizations’ impact on democratic attitudes and perceptions has not been significant. The main determining criterion for what an Argentine worker should do in the post-privatizations period seems to be determined principally by the degree of his previous participation in union affairs, and less so by variables such as education, cultural outlook, or historical connections. This finding is important because 15 years ago, Peter Ranis (1991) had found that these innate variables were the most important determinants of workers’ views on democracy in Argentina. My research shows that today, they seem to matter less. Instead, being a member of a labor union and the degree of activity in it appear are critical. I call this characteristic “unionismo.” If it was partisanship, including the left-right political ideologies, which determined how individual workers would react to and deal with privatizations in Turkey, in Argentina it was unionismo. The Argentine rank and file tends to be unionist, meaning that they have emotional and ideational attachments to labor unions and they are active in them. This is different from partisanship, where the emotional and ideational attachments are with political parties situated on the left-right political spectrum, not unions. If loyalty to political parties was the main determinant of the perception of and attitude toward privatizations in Turkey, loyalty to unions was in Argentina. Accordingly, unionist and nonunionist workers reacted differently to privatizations in Argentina. Most nonunionist workers, that is, those

Argentine Labor in the Global Era

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nonaffiliated workers and workers who only paid their dues without participating actively in union activities, resorted to “individual or family networking” solutions to deal with the negative consequences of privatizations, such as the loss of a job or downgrading in one’s position. Accepting large sums of compensation money within the scheme of voluntary retirement packages (retiro voluntario), many older nonunionist workers moved to the interior of the country, where the cost of living is relatively lower. The younger and the more educated nonunionist workers, on the other hand, chose either to migrate to European countries in search for a better future or to pursue their hobbies professionally. Most unionist workers, that is, those workers who were active in their respective unions, both in top positions or those acting as floor representatives, were usually protected from the negative impacts of privatizations in Argentina. Unionist workers kept their jobs and their positions within the union in the post-privatizations period. Relatively younger, more ambitious, and Peronist unionists used privatizations to engage in entrepreneurial activities with the political and organizational support of their unions. Such workers grew richer, both financially and professionally, by privatizations. They did so because they acquired training, they continued their education in relevant fields, and some of them established small-scale businesses using the small loan programs of privatizations called the microemprendimientos. The unionist workers of pro-privatization unions thus applied the socalled organizational/entrepreneurial solutions toward privatizations. The unionist workers of anti-privatization unions, on the other hand, kept their positions within their unions and continued their activism against privatizations. In the case of Argentina, as opposed to Turkey, privatizations did not produce any large-scale social movement or organization on the part of workers affected by them. Individual solutions for those outside the union framework and union-related solutions for those inside it dominated. Only one social movement called the Black Gold (Oro Negro, ON) was detected by this study. The ON was started by the downsized Argentine workers of the previously state-owned company of petroleum, Fiscal Petroleum Fields (Yacimientos Petroliferos Fiscales, YPF), now called Repsol. This movement, however, was distinct from the Victims of Privatizations (Ozellestirme Magdurlari, OM) movement in Turkey on many grounds. A comparison of the OM in Turkey and the ON in Argentina shows that the latter came into being a decade after the actual privatization of the plant in question, while the OM in Turkey was a spontaneous

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reaction to the massive downsizing that occurred during the privatization of the same energy sector. Second, the ON in Argentina aimed at the renationalization of the energy sector as a whole, while the OM in Turkey did not target more than the landing of formal jobs for its adherents. Third, the ON in Argentina was quickly institutionalized and got affiliated with the unofficial labor confederation, the Central of Argentine Workers (Central de los Trabajadores Argentinos, CTA). This is in contrast to the experience of the OM in Turkey where the movement stayed as a loose and informal association of self-appointed regional leaders. The ON experience corroborated, among other things, the notion that “collective and social solutions” were possible in Argentina only within the framework of union structures, not outside. The counterintuitive finding at the individual level of analysis in Turkey as well as in Argentina is that the impact of privatizations on income and social class does not translate into a changing level or nature of political activity for those affected by them. The Argentine workers interviewed for this study felt the overwhelming power of the Argentine labor unions to such a degree that any type of collective action outside of union support or leadership was almost unthinkable for them. The reasons for this paradox might derive from the historical and institutional legacies of the Argentine political system. It might also have to do with how privatizations were applied in Argentina. Following these premises, the first part of this chapter deals with the implementation of privatizations in Argentina. The second part attempts to connect the privatizations with the changing structural features of the Argentine labor movement. The third section deals with the impact of privatizations on individual workers and how they have tried to cope with privatizations. The chapter attempts to locate the causal mechanisms that operate between privatizations and the consequent changes in the Argentine labor force and institutions.

The Background of Privatizations: Pre-Privatizations Period in Argentina As in Turkey and the rest of the developing world, Argentina applied ISI policies prior to privatizations. The populist leader Peron, who had become president of Argentina by 1946, launched his first Five-Year Plan in 1947. The plan nationalized large parts of the economy, while putting up significant trade barriers. Peron also decreased the prices of consumer products and implemented


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policies supporting the working and lower-income classes. Among these polices were the overvaluation of the peso, easy credit, and negative interest rates. The consequent expansion of the role of the state and government expenditures increased inflation. A series of economic and political conflict led to crisis, and Peron was ousted by the military in 1955 (Gerchunoff 1989). The post-1955 military rule, which lasted on and off until the brief prelude of Peron’s return to the political scene in 1973, consisted of stop-and-go policies of stabilization and state involvement in economic affairs with the aim of promoting industrialization. Radical Arturo Frondizi’s first civilian government of 1958–1962, the first to follow the 1955 military coup, worked on deepening the importsubstitution regime by investing in heavy industries and repudiating any export-based economic initiatives (Petrocolla 1989). The civilian government of the Radical Arturo Umberto Illia, the last before the second coup of 1966, shifted gears with the aims of controlling inflation, establishing ties with foreign capital, and eliminating subsidies to the agricultural and oil sectors. Private industry was rarely, if at all, accorded a central role in the economy (Guadagni 1989). Inconsistent policies went hand in hand with unstable governments and periods of military rule. In March 1967, General Juan Carlos Ongania’s government devalued the currency by 40 percent per U.S. dollar in order to put a stop to inflation in the short run, to attract foreign investment, to encourage competitive industrial production, and to promote exports of manufactured products. This stabilization program reduced the budget deficit and increased public savings (Datas-Panero 1970, 67). Due to factors such as the structural weaknesses of the economy, the fixed exchange rate and the world meat crisis, however, the program ended in failure in 1970. General Alejandro Lanusse, who gained power in March 1971, declared his intention to restore constitutional democracy by 1973. In March 1973, general elections were held. Peron was banned from running, but a stand-in candidate, Hector Campora, was elected as the president. Less than a month after Campora took office, Peron returned from an 18-year exile in Spain. The Peronist government of 1973–1976 followed policies diametrically opposed to the preceding military government’s program of fiscal and monetary contraction. Coupled with the negative repercussions of the worldwide oil crisis, Peron’s expansionary policies culminated in rampant inflation. As a result, social unrest grew (Terragno 1974). The military coup of 1976 was about eradicating the populist Peronist ideology and repressing its adherents (Di Tella 1989).

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The economic tool of doing so was to make a definitive turn from the ISI to the EOI model. Charles Blake (1998) classified the eight years of military rule in Argentina (1976–1983) into two distinct economic periods. The first phase from 1976 to 1980 marked an improvement over 1975 in terms of inflation rates, investment rates, and the average annual GDP growth rate. Trade liberalization and a limited liberalization of capital markets were undertaken (Sjaastad 1989). Nevertheless, government expenditures continued to increase along with foreign debt. It was not a surprise when the second phase of the military rule, from 1980 to 1983, brought rapid economic deterioration. Much like in Turkey, the previous capital liberalization introduced by the military government caused massive amounts of capital flight in Argentina. This was financed through borrowing from abroad and by cutting workers’ wages. Rudiger Dornbusch (1989) identified external debt and inflation as the two main culprits of the economic troubles during the final years of the military regime before the latest transition to democracy in 1983. As opposed to Turkey, where the 1980 military intervention recorded some success on the economic plane, the Argentine experience was a total disaster. In the wake of its economic collapse, the Argentine military invaded the Malvinas Islands in April 1982 as a last resort to dissipate public dissatisfaction by shifting the focus to nationalism. This approach was much more dangerous than the Turkish military’s relatively smooth resignation of power before the institution of elections in 1983. In both cases, however, the military was unsuccessful in entirely converting the model of economic development from the ISI to the EOI. In Argentina, to top it off, the military was unsuccessful in its endeavor to curb the power of the Argentine labor unions. In Turkey, the military regime had effectively accomplished its objectives on that plane. Argentina’s predicaments in transitioning from the ISI to the EOI model had to do, to a large extent, with the entrenched statist ideology (Whitehead 2000; Baer and Hargis 2000; Gereffi and Wyman 1990). Hector Mairal (1996) has argued that since Peron’s nationalizations in the 1940s, Argentina has adhered to the French model of service public (SP), or public service, in organizing its economic relations. The SP model is based on the assumption that the operation of public utilities is a government or administrative function, while the government itself is nothing but a “cooperative of public services”. This principle was incorporated into the 1949 Argentine Constitution: “All assets and businesses whose operations


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have or acquire the features of a national public service, or of a de facto monopoly, must become the property of the community at large” (136). The French model, which also constitutes the principal source of the Turkish statist ideology, conceived the state principally as a social benefactor, rather than an impartial watchdog.2 Both in Argentina and in Turkey, therefore, the state controlled the major public services such as electricity, gas, oil, and communications; it also owned banks, financial institutions, and insurance companies prior to privatizations. In Turkey, however, private enterprise was veneered and conceived as the ultimate end of the state-led development project. This was seldom the case in Argentina. The above analysis shows the following convergence points between the pre-privatizations periods in Argentina and Turkey: (1) the ISI as the dominant model of economic development; (2) statism as the main ideological justification for the ISI model of economic development; (3) the French, as opposed to the Anglo-Saxon model in conceiving the role of state in society; and (4) highly stateownership-dominated economies. Coupled with the political instability and social unrest caused by the successive military interventions that had plagued them both, Turkey and Argentina started playing with the idea and practice of privatizations in an unhurried manner. It took some time for the first civilian governments of Ozal in Turkey and Alfonsin in Argentina to implement their respective projects of privatizations starting with the mid-1980s.

Summary of Argentine Privatizations: Planning and Implementation Although Argentines tend to equate the name of the Peronist President Carlos Menem with privatizations, it was the previous Radical President Raul Alfonsin, who started the preparations for privatizations in Argentina. One can therefore take 1983 as the start date of Argentine privatizations. Alfonsin’s government was unsuccessful in this endeavor, as it was in many of its economic undertakings. There were several reasons why Alfonsin failed in his attempt at privatizations: (1) his electoral campaign and presidential mission focused more on political democratization than bringing economic recovery per se; (2) his understanding of democracy was much more about the “distribution of resources” than their privatization; (3) his attitude toward the powerful labor unions was confrontational and emphasized their alleged lack of democracy and excessive privileges; (4) his political circle consisted of politicians who were mostly of the old

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school and not willing to sacrifice their special status and privileges; and (5) his rule was extremely difficult since his government never had the majority in the Senate and also lost the congressional majority as early as 1987, this leaving him with the serious problem of a “divided government” in a strongly presidentialist system (Campione and Munoz 1994).3 Like the first law of privatization, law 2983 of 1984 in Turkey, which differentiated between the SOEs that were involved in public services (KIKs) and those that were not (IDTs), Alfonsin’s first legal attempt at privatizations with the decree 414 in January 1984 was to identify and differentiate the SOEs that provided services of national or social interest from those that did not. Like in Turkey, Argentina decided that only the second group of SOEs was swiftly to be returned to private ownership. As a result, only a few minor privatizations were carried out under Alfonsin’s administration: Siam (an industrial conglomerate), Opalinas Hurlingham (ceramics), and Sol Jet (a travel agency). As in Turkey, the initial sluggish pace of privatizations in Argentina led to the privatization of Austral Airlines as late as in 1987 (Llanos 2002, 51). Other privatization attempts were blocked by the Peronist party-dominated Congress and Senate. The 1980s, for Argentina and Turkey, can therefore best be characterized by slow structural reforms driven essentially by populist and heterodox policies. The second legal attempt at privatizations in Argentina came in 1986, when Alfonsin’s minister of economy declared that the traditionally strategic sectors of the petrochemical and steel industries, where the state had always dominated, would be taken into privatization program. This constituted the first time in Argentina that the French model of “service public” was being abandoned in favor of a model of “free-markets”. The bill organizing the proposed privatization procedures, and the extension of executive powers to carry them out, was submitted to the lower house in October 1986. This bill, like the Turkish decree 233, contained some contradictory clauses. While privatizations in the public service area were now encouraged, the state could still intervene in the determination of prices in Argentina. Furthermore, the SOEs operating in the areas of telephones, postal services, the railway system, television, and basic production such as gas, oil, coal, and hydroelectric power were still explicitly excluded from privatizations, while the national defense sectors of petrochemicals and steel were given a green light. The 1986 bill did not pass through the Argentine Congress (Mairal 1996, 53).


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Two new bills were sent to the Senate in 1988. They proposed and outlined the privatization of Argentine Airlines (Aerolineas Argentinas, AA) and the National Telecommunications Company (La Empresa Nacional de Telecomunicaciones, EnTel), that is, the telephone company, which only two years earlier, had been designated as a sector to be shielded from privatizations. These privatizations were to be partial in that the state could not sell all of its shares. Like the two previous legal undertakings on privatizations, these privatization laws were parallel to the third and the principal privatizations law in Turkey, law 3291 of 1986, which stipulated that once government shares in the SOE to be privatized dropped below 50 percent, privatization would be deemed complete. In contrast to Turkey, the Argentine Senate never approved these bills. It was not only the Argentine Congress that opposed privatizations in their initial stages during Alfonsin’s government. Unions, along with the entrepreneurial sector, were also very much in opposition to the privatization efforts in this period. Once again, much like in Turkey, unions were concerned with maintaining their established privileges, as were the business sector and the state bureaucracy. In 1987, therefore, the Argentine unions were in permanent mobilization, organizing national and sectorial strikes against privatizations. Failure to deal with the rising economic difficulties and the rampant social discontent fueled by hyperinflation led to the Peronist politician Carlos Menem of the Justice Party (Partido Justicialista, PJ) taking over the presidency six months before the scheduled date in 1989. The actual implementation of the privatizations did not happen until the 1990s in Argentina. This was no different than in Turkey. The only difference was that it took a turnover of power in Argentina, from Alfonsin’s Radical government to Menem’s (neo)Peronist Justicialista administration, for privatizations to start. In Turkey, on the other hand, the center-right Anavatan Party’s leader, Prime Minister Turgut Ozal, stayed in power and continued to press forward with his neoliberal restructuring of the state-led economy in the 1990s. Compared with Menem, Ozal did not do as good a job in this domain. That is why after 1989, we see a significant divergence in the pace and pattern of privatizations in Turkey versus Argentina. Starting with the 1990s, Turkey becomes the sluggish, and at best, the gradual privatizer, while Argentina becomes the speedy and vigorous privatizer. Both countries, however, show accelerated patterns of privatizations in the 1990s compared with their previous performance records individually.

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Ziya Onis and Metin R. Ercan (2000) suggest that the reason the Turkish privatizations of the 1990s recorded only a limited achievement in terms of the scale of implementation and the realization of the efficiency objectives was because Turkey never had as serious an economic crisis as Argentina’s 1989 hyperinflation. They suggest that the Argentine 1989 economic crisis and the preceding economic problems since the end of the ISI in the mid-1970s were much longer in duration and stronger in intensity than in Turkey. They argue that, as a consequence, Argentines supported privatizations much more robustly than Turks since they perceived privatizations as almost a panacea to their endemic economic tribulations, at least initially. While the argument of the impact of the degree of pre-privatizations economic crisis on the nature of the privatizations is plausible, one should bear in mind that the intensity of economic crises is hard to gauge. Crises are perceived differently by members of different societies due to their divergent past experiences and future expectations. Miguel Kiguel and Nissan Liviatan (1995) argue, for instance, that the hyperinflationary periods in Latin America are not what hyperinflation implies in general since, having had several of them, Latin American governments and societies have devised efficient ways to cope with them.4 Ergo, it might very well be that the relatively milder economic crises in the pre-privatizations period in Turkey, were perceived as negatively by the Turks as was the hyperinflation by the Argentines. Sebastian Galiani and Diego Petrecolla (2000) divide the Argentine privatization period of the 1990s into four subphases. Accordingly, the first phase had as its primary objective the lessening of the massive public external debt and promoted the use of debt-equity swaps in privatizations. The latter sought to guarantee the buyers a high profit due to the underpricing of assets and other incentives offered in profit-making SOEs, which mostly operated in monopoly sectors. The first stage of Argentine privatizations in the 1990s ended with the announcement of the Convertibility Plan in 1991. The plan, which also initiated the second stage of privatizations, established the exchange rate as the nominal anchor of the new stabilization program and eliminated the practice of the indexation of wages to the rate of inflation. The Convertibility Plan also limited the ability of the Central Bank to create money through the expansion of domestic credit. The third stage of privatizations started with the signing of another plan. The Brady Plan, signed with the IMF in December of 1992, aimed at decreasing Argentina’s external debt and contributed to the rise of much-needed foreign direct investment. As a result, financial


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goals were much less important than those of efficiency and competition in the third stage of Argentine privatizations, as opposed to the first and the second stages. During the fourth stage, starting in 1995, financial priorities made a slight return due to short-run cash constraints that had reemerged during the second Menem administration (1995–1999).5 Each one of the four privatization phases in Argentina was characterized by aggressive implementation. By the mid-1990s almost all public utilities and industrial enterprises had been privatized. The total gains derived out of privatizations between 1991 and 1996 amounted to US $14.2 billion. The need to get out of the hyperinflationary period required, according to the principal architect and epitome of privatizations, President Menem, regaining the trust of the business community (la comunidad de negocios).6 To do that, two simple but radical actions were to be undertaken: one was to break off the interclass alliance forged between the wage earners and the local bourgeoisie during the preceding ISI period. The second was to transfer the most important and valuable SOEs to the business sector to raise revenues and foment the trust of the international financial markets and organizations. In other words, the “inter-class alliance” based on the “internal demand” from the domestic markets and driven by the ISI was to be substituted with the “within-class alliance” based on the “external demand” from the international markets and determined by the EOI (Arceo and Basualdo 2002). With these economic aims and the project of building a new political power base in mind, Menem acted quickly. Law 23.696 on Economic Emergency (Emergencia Economica) and law 23.697 of the Reform of the State (Reforma del Estado) were legislated during the first months of his administration. The first law dismantled the regimes of subsidy and industrial promotions associated with the state-led economy. As such, the first piece of legislation aimed at modifying the role of the state. The second law conferred full power to the executive so that it could undertake privatizations and determine their conditions unilaterally. These two pieces of legislation, like law 2983, decree 233, and law 3291 in Turkey, ended up constituting the legal-structural basis for the subsequent implementation of the privatizations. The privatizations of the state-owned EnTel and of the AA came first. These were two of the most lucrative sectors in the state-owned Argentine economy. They were also the most important ones in terms of their political and symbolic power since they constituted the seeds of the Peronist Party in the eyes of the business community

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(Azpiazu 2003, 180). EnTel was privatized in 1990. The monopoly of the state-owned phone service was split into two territories: France Telecom was given the “upper half” of the country, from the middle to the north, and Telefonica of Spain was given the southern part. Each company was accorded an initial monopoly of seven years, which they were allowed to extend given the approval of the government. Telecom and Telefonica recorded high levels of profit following the privatizations, despite the equally high levels of investment in technology and services (141). Their monopoly of the telecommunications market was strengthened after the complete deregulation of the sector, including the sale of cell phones and services of longdistance calls (Ynoub 2007). Along with EnTel, the AA was also privatized. The AA was sold to the Spanish state-owned Iberia in 1990. The low price paid by Iberia as well as the subsequent mismanaging of the firm by this Spanish state-owned company drew many criticisms, including accusations of corruption. The minister of welfare and public services, Roberto Dromi, who was in charge of the privatization of the AA at the time, said that it was shameful for a country like Argentina to have sold its national airlines to another state (Rey 2003, 38). Like the cases of EnTel and AA, the first privatization projects for the Argentine Railways date back to the 1983–1989 Radical government of Alfonsin. The then opposition PJ stood against the privatization of this sector as it did against the privatization of the telecommunications and airline sectors. Ironically, once in power, the PJ went full speed ahead with privatizations. The Argentine Railways (Ferrocarriles Argentinos, FA) were privatized in September 1989. The privatization of FA was unique in that railways were not a profitable sector. Bernardo Neustadt, a well-known Argentine television reporter, had become legendary for starting his weekly programs by solemnly stating that the railways were losing one million pesos as he spoke. Concessions of thirty years or more to municipal and provincial governments as well as to the private sector were the preferred methods of privatization in this sector. In the face of opposition and consecutive strikes by the railway workers, many lines were closed either until the actual implementation of privatizations or forever due to their alleged lack of profitability. As a result of the privatization of the railway system, the total network of functioning railway lines in Argentina decreased from 35,000 to 8,500 kilometers, as did the number of railway workers from 95,000 to 15,000 (Veschi 2006).7 When Menem said: “Ramal que para, ramal que cierra,” he meant it.8


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The lack of adequate regulatory mechanisms and the supremacy of political over economic concerns dominated the privatization of railways in Argentina. The same problems dogged the privatization of the water sector. The privatization of water started in 1991 and ended in 1993 with the transfer of National Water Works (Obras Sanitarias de la Nacion, OSN) to the consortium, Argentine Water Inc. (Aguas Argentinas S.A.), composed of Suez Lyonnaise des Eaux-Dumez of France and the local firm, Soldati. Prior to the transfer, the Argentine government considerably increased tariffs both in terms of real prices and the taxes collected on water service, called the Impuesto al Valor Agregado (IVA). S.A. was the consortium that offered the highest decrease in tariffs, even though the latter was renegotiated many times after the actual privatization, with the ultimate increase in consumer prices. The private firm’s noncompliance with the clause of mandatory investments listed in the concession contract9 and the consequent dearth of the basic sanitary conditions in the provision of water services culminated in the renationalization of water in 2006. In addition to the lack of adequate regulatory mechanisms and the dominance of political over economic concerns in the implementation of the privatizations, a third common feature of Argentine privatizations was the segmentation of sectors toward extreme centralization and concentration of ownership. This can clearly be seen in the privatization of the energy sector. The privatization of the state-owned Gas of the State (Gas del Estado), the Electricity Services of the Province of Buenos Aires (Servicios Electricos del Gran Buenos Aires, SEGBA—distribution, generation), the Northern Patagonia Hydroelectricity (Hidroelectrica Norpatagonica, Hidronor—generation, transmission) and Water and Electric Energy (Agua y Energia Electrica—generation and transmission), and Fiscal Petroleum Fields (Yacimientos Petroliferos Fiscales, YPF), were all tainted with explicit drives toward the formation of either oligopolies or monopolies (Azpiazu 2003). The gas sector, privatized in 1993, was divided into two distinct zones controlled respectively by the Spanish company Repsol-YPF and the local group Perez Companc in the south, and the foreign conglomerate Techint with predominantly Argentine capital and the national group Soldati in the north. The electricity sector, which was segmented into the three subsectors of generation, transportation, and distribution, also led to the concentration of power. The 1997 takeover of the Spanish firm Endesa by the Chilean group Enersis brought the latter to control 90 percent of Edesur SA, the electricity distribution company in the south of the

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capital Buenos Aires. The Secretariat of Defense of Competition took up the issue of the illegal concentration of assets as late as in 2000. This was three years after the illegal expansion (ibid., 161). Finally, the 1991 privatizations in the petroleum sector brought to the fore the same firms dominating the electricity and gas sectors. As of 2000, Repsol controlled more than half of the production of crude oil. Perez Companc and Chevron’s shares were 10 percent each, Pan American’s were 8.6 percent, and Tecpetrol’s shares were 5 percent. Altogether they controlled 82.8 percent of crude oil production, creating an almost perfect oligopoly. Clearly, therefore, the Argentine privatizations in the energy sector brought “not the deregulation of the markets but their regulation by a few big firms and partners” (ibid., 179). The final sectors to be privatized under Menem were the postal service and the airports. Both sectors were given out as 30-year concessions via national and international offerings. The Argentine company Macri won the bidding for the postal service, and the Argentine group Eurnekian obtained control of the airports of Ezeiza, Jorge Newbery, and the other 31 Argentine terminals by 1997. These privatizations were also dogged by a persistent lack of investment, rumors of corruption, and insufficient monitoring. Macri had stopped paying its annual concession dues after 1999. It owed the Argentine state almost three hundred million dollars by the time it publicly declared bankruptcy. Macri defended itself by arguing against the too-powerful labor union in the postal service sector and citing the fierce competition presented by a multitude of private postal companies that had mushroomed throughout the country in the wake of the privatizations. The Argentine postal service, like that of water, underwent renationalization in 2003 by Kirchner’s government. In the case of the airports, as in the rest of the privatization transactions in Argentina, concession owners renegotiated the original contract, as well as the associated requirements concerning investments. The concessioners of the airports also ended up owing millions of dollars to the Argentine state due to their noncompliance with the payment of the mandatory annual concession fees and the pre-fixed levels of required investments. Dr. Roberto Dromi, who was in charge of the privatization of the Argentine Airlines (AA) in 1989, and who had become the lawyer of Argentine Airports (Aeropuertos Argentinos) by 2000, said “Argentine airports will not pay what the ENTE10 asks because the state is not complying with its part of the contract to start with” (Azpiazu 2003, 212).


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The above analysis of the individual privatization transactions in Argentina shows that the privatization process as a whole was tainted with the increasing concentration of economic powers, a lack of adequate regulation, serious noncompliance with the terms of the privatization contracts and a lack of transparency in implementation. A similar picture can also be found in the Turkish privatizations process. Although Turkey applied privatizations gradually, the end result was neither transparency nor adequate monitoring. Like in Argentina, corruption allegations also dogged the privatization transactions and public tenders there.11 Concerns regarding the concentration of economic power and the creation of monopolies as a result of inadequately regulated privatizations were also as prevalent in Turkey as they were in Argentina. In fact, Erinc Yeldan (2005), in his report of Turkish privatizations, characterized the latter as an episode of “surplus transfer to capital-owners” (30). In addition to the similarities in the implementation of the privatizations, Turkey also imitated Argentina in the governance style of its privatizing leaders. Both Menem and Ozal extensively employed coalition-building strategies and took recourse to technocratic style of policymaking to implement the privatizations. Menem’s State Reform Law and the Emergency Law in 1989 allowed him to put technocrats in charge of the privatizations. Ozal’s discretionary budgets did the same.12 As for coalition-building strategies, Menem appointed as ministers of economy Miguel Roig and Daniel Rapanelli from the largest Argentine multinational, Bunge and Born, and made a coalition with the small center-right pro-liberal party Union of the Democratic Center (Union del Centro Democratico, UceDe), with the aim of garnering the support of Argentina’s entrepreneurial groups. This coalition-making strategy was similar to that used by Ozal in appealing both to the traditional sectors of society using religious symbols in his discourse and siding with the national bourgeoisie in his liberal approach to economic relations.13 Unions were another important group targeted by Menem and his co-optation techniques in implementing the privatizations in Argentina. Offering financial and political privileges for union leaders’ support, Menem succeeded in dividing the strong labor movement in Argentina into unions that were for or against privatizations. The strongest labor confederation, the CGT, was divided into pro-privatization and antiprivatization branches, leading to the formation of a completely new labor union, which not only contested the privatizations but also challenged the undemocratic nature of the labor system. Privatizations led to identical divisions and issues in the Turkish labor unions.

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Institutional-Level Analysis of Privatizations: Labor Unions in Argentina I conducted two series of in-depth interviews with various Argentine labor leaders active in different sectors and hierarchical levels in the Argentine union structure and labor movement. The first series of indepth interviews took place in the summer of 2003 and the second in autumn and winter 2006. A total of 31 in-depth interviews were conducted.14 For purposes of reliability, I asked the same set of questions to the Argentine union representatives as I did to their Turkish counterparts. The questions were as follows: ➢ How do you think privatizations have affected the structure of the union movement, such as the divisions and groupings within federations and unions? ➢ How do you think privatizations have affected unions’ relationship with the state? ➢ Have privatizations changed the way unions interact with the private sector and the civil society? ➢ Have privatizations changed the functioning of unions’ internal democracy in any way? If yes, how? ➢ What do you think is the relationship between privatizations and democratization? Unlike in Turkey, it was the initial stage of the privatizations that incited mobilization on the part of the labor unions in Argentina. It was later on that labor unions either acquiesced to privatizations or contested them consistenly. The main reason for this discrepancy can be found in the highly partisan nature of Argentine labor: labor unions created by Peron in the 1940s have been strong adherents of Peronism and the party that claims to be its ideological adherent, the PJ. Since it was the Radical government of Alfonsin that introduced the project of privatizations for the first time and attempted to prepare the legal ground for it, unions went, almost by instinct, against the privatizations. Furthermore, Alfonsin’s government had made the strategic error of introducing a previous restructuring of the Argentine union system with the 1983 Mucci Law.15 The 13 general strikes staged against the government of Alfonsin were thus not protesting privatizations as much as they were the government itself. The shift in the Argentine labor unions’ reactionary attitude as soon as the Peronist Party’s leader Menem came to power is a great illustration of their partisan nature. Menem used his Peronist identity,


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personal charisma, and elaborate patronage scheme involving labor and business to ease the transition to a market economy. In this vein, he not only transformed the statist nature of the Argentine economy but also that of the Peronist party itself. Labor union leaders did not contest the transformation of the economic model, nor did they oppose the change in the identity of the Peronist party, as many among them received substantial benefits for their support. The negotiations between the Peronist government and the Peronist unions involved three kinds of challenges and benefits directly related to privatizations: institutional stability, and direct and indirect participation. Institutional Stability This referred to the survival instinct of the labor unions to maintain their institutional structure intact in the face of privatizations. Prior to privatizations, there was one SOE in any given sector. With privatizations, these huge state enterprises were broken down into different segments depending on the type of subsector and specialization, except for the water sector where the private firm continued to operate as one company. Accordingly, Gas del Estado was divided into ten big firms in charge of the transportation and distribution of gas. SEGBA was divided into seven private companies in charge of distribution and generation. Each segment was then transferred to a different private owner. In this restructuring of industrial relations and the state’s role in the economy, labor unions were also automatically reorganized: they changed from being one union per one big state firm to a multitude of unions per a number of smaller private firms. This reordering brought a whole new array of questions and issues, inluding the decentralization of union relations and the ensuing problem of “union framework” (encuadramiento)16 (Gonzalez 1998, 3). Privatizations entailed a restructuring of industrial relations where the players and incentives for collective agreement making underwent substantial changes. Prior to the privatizations, collective agreement making was centralized per sector (Novick and Catalano 1995). Since there was one big state firm in each sector, collective agreements were made in the headquarters of the SOEs. In this framework, the union branches in the interior did not have much say in the decision making as much as did the higher echelons of the union hierarchy, such as the federation of unions or the national union (Tomada and Gonzalez 1998, 4). As of 2006, instead of one collective agreement for an entire sector of activity, there were collective agreements per individiual firms. This empowered the local union sections in a given geographical region, and as such, decentralized the labor system in Argentina.

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In addition to the decentralization of collective agreement making and the empowerment of union representatives at regional and local levels, privatizations have also been accompanied by the outsourcing of different tasks to firms other than the privatized companies. Many of these private firms performing tasks not directly related to the core activity of the sector in scrutiny, such as cleaning or security, were formed by none other than the former employees of the SOEs themselves. As such, these workers automatically went from their previous collective agreement to being covered under other sectors’ collective agreements. This led unions active in the main sector to vindicate the reincorporation of these workers within the collective agreement regulating the main sector of activity. Workers also mobilized on various occasions to demand their incorporation into the collective agreement of their choice, usually the one providing them with better salaries and working conditions (Tomada and Gonzalez 1998, 16).17 This is what is referred to as the encuadramiento problem. Direct Participation Unions could participate in public offerings by buying assets in privatized firms. The Labor Federation of Petroleum Unions of the State (Federacion de Sindicatos Unidos Petroleros del Estado, SUPE), for instance, bought several tankers during the privatizations and formed a private company of its own in 1993, the Naviera Sur Petrolera S. A. Fifty percent of the stocks of this new union firm were distributed to the workers, while 50 percent stayed in the hands of the union leadership and under its administration.18 The Light and Power Federation (Federacion de Luz y Fuerza, FATLyF), which includes regional unions in its body, declared in 1997 that it was adopting a twin strategy of mobilization and business unionism in the face of the privatizations. FATLyF became the owner and manager of stocks in various private firms active in the sectors of electricity generation, transmission and distribution. FATLyF also managed the actions owned by its members within the framework of the Program of Participative Property (Programa de Propiedad Participada, PPP).19 Finally, FATLyF acquired life insurance companies and hotels and began managing private retirement accounts and work-related accident insurance programs. Hugo Giarelli, the secretary of funds and finances of FATLyF, corroborates the business attitude and mentality adopted by the federation as a result of privatizations: In FATLyF, we had had experience in managing complex systems of industrial and labor relations prior to the privatizations. Privatizations


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buttressed this tradition and enhanced our expertise whereby we could now become more immediate owners and managers of firms and shares in them. Of course, we have always acted with an eye to social philosophy. The profits we make at the company grounds, we pass on to the union grounds. We make sure the two realms are separate, and that the interests associated with each do not get intermingled. (Buenos Aires, July 2003)20

Indirect Participation The PPPs were part of almost every privatization program in Argentina. They referred to prefixed percentages of shares transferred to the workers of the privatized firms. With privatizations, unions obtained the right to administer the PPPs for the workers. In San Nicolas, the Union of Metallurgy Workers (Union Obrera Metalurgica, UOM) created an independent firm managed by a board of experts to administer the PPP of its affiliates. Since the company worked efficiently and workers had detailed instructions on when to sell and how much to sell, the values of the stocks rose. This was the opposite of what happened with the Telecom and Telefonica companies, where workers sold their stocks because the union administration followed the logic of aggressive selling to obtain quick cash. This was the case more for Telefonica, where no worker shares were left, than for Telecom, where 50 percent of the shares were still under the control of FOETRA-BA at the time of this study in June 2006.21 The three-fold strategies of institutional stability, direct and indirect participation in privatizations have been intensively applied by Argentine unions that, in one way or another, participated in and benefited from privatizations. This does not mean, however, that all unions cooperated with privatizations in Argentina, nor does it mean that all cooperating unions did so in similar ways and degrees. The three distinct union strategies crafted by the Argentine labor unions toward privatizatons were “confrontation,” “tough negotiation,” and “collaboration or soft negotiation.” The first strategy was applied by those unions active in SOEs and/or whose members belonged to the ranks of the middle class. The number of labor unions that confronted privatizations steadily increased and spread to unions active in the industrial and service sectors. The second strategy was adopted by a small group of unions that initially confronted privatizations but then switched sides to collaborate with the privatizing government. The third strategy consisted of total support to the privatizing government and its reform program (Palermo and Novaro 1996). It was this strategy that was adopted by the majority of the Argentine labor unions.

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Vicente Palermo and Marcos Novaro’s (1996) tripartite typology on union responses to privatizations is not the only categorization in the literature on Latin America. Murillo (1997), for instance, also created her own typology of labor union strategies under Menem’s administration. Accordingly, labor unions that were situated in the CGT-Azopardo, and initially composed of more militant unions such as the teachers’, state employees’, and metalworkers of Villa Constitucion, were against Menem and his neoliberal program. Murillo categorized these labor unions under the banner of “opposition labor unions.” The Movement of Argentine Workers (Movimiento de los Trabajadores Argentinos, MTA) that later shifted to become an implicit player in privatizations, was also categorized as a confrontational union at the time of Murillo’s writing. Murillo characterized the second union strategy and attitude toward privatizations as “loyalty.” This strategy was adopted by the Peronist unions in the CGT-San Martin and consisted of staying loyal to the Peronist party, with the aim of obtaining political appointments within, and privileged relations with, the government in exchange for their support of privatizations. The labor leaders, in this group, were appointed by President Menem as the regulators of the welfare funds or the so-called obras sociales. “Loyal labor unions” were composed of one of the two state employees’ unions, the Union of the Civil Personnel of the Nation (Union del Personal Civil de la Nacion, UPCN), the water provision workers, the telephone workers, the meatpackers, the textile workers, the construction workers, the chemical workers, the pasta industry workers, the lifeguards, the railroad workers, and the state oil workers. Finally, the unions that opted for the third strategy of “organizational autonomy” were large unions representing well-paid workers who were active in the public or protected sectors. These unions chose to remain independent in 1990 when the CGT split to heavily invest and participate in privatizations to acquire businesses and engage in services and activities previously restricted to their own members only. The Federation of United Unions of State Oil Workers (Federacion de Sindicatos Unidos Petroleros del Estado, SUPE), the Federation of Electricity Workers (Federacion Argentina de Trabajadores de Luz Y Fuerza, FATLyF), the Union of Railroad Workers (Union Ferroviaria, UF), and the Federation of Commerce Employees (Federacion Argentina de Empleados de Comercio y Servicios, FAECYS) were included in this third group of unions and were characterized as “business unions.” The tripartite division of the Argentine labor union structure in the 1990s is shown in table 5.1.


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Interviews carried out with labor union leaders in 2003 and 2006 corroborated this tripartite division in the union structure, but also showed signs of additional trends instigated more particularly by privatizations. As one Argentine union leader put it, “Privatizations is Menemism and Memenism is privatizations. There is no difference between these two phenomena, linguistically or conceptually” (Basteiro 2006).22 The one significant difference found was that the MTA, a dissident group within the CGT in the late 1990s, was now a co-opted subgroup, which could easily be situated somewhere between the loyal and the business unions. Also important was the emergence of a new and more radical anti-privatizations formation, the Class Conscious and Combative Current (Corriente Clasista y Combativa, CCC), denominated by some as an Argentine labor confederation of and on its own. The transformations introduced by privatizations in the Argentine labor union structure in the 2000s are shown in table 5.2.

Table 5.1 Classification of the Argentine labor union system in the 1990s: Neoliberalism as the main divide Division

CGT-AZOPARDO

CGT-SAN MARTÍN

CGT-INDEPENDENTS

Position

Opposition Labor Unions Confrontation

Loyal Labor Unions Tough Negotiation

Business Labor Unions Soft Negotiation

Strategy

Table 5.2 Classification of the Argentine labor union system in the 2000s: Privatizations as the main divide

Division Position

CTA Explicit Opponent Defy privatizations legally and institutionally Confrontation

CCC

MTA/ Traditional CGT

Violent Implicit Opponent Actor Defy privatizations Survive in Main privatizations socially and Strategy ideologically Culture Picketing Pragmatic Compromise Access to Promoting Promoting Main Tool information/ new forms of (Privatizations new forms of Negotiation institutionalization participation used as)

Gordos/ Modern CGT Enthusiastic Participant Thrive with privatizations Business Unionism Access to financial freedom

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The CTA—The Pragmatic Opponent of Privatizations Privatizations played a crucial role in the defection of a sizeable group of unions from the CGT in 1991. These unions subsequently formed their own labor confederation, which not only contested privatizations and globalization in general, but also the incumbent administration. The Central of Argentine Workers (Central de los Trabajadores Argentinos, CTA) originated in the Grupo de Burzaco23 formed by the State Workers Association (Asociacion de los Trabajadores del Estado, ATE), the Argentine Confederation Education Workers (Confederacion de los Trabajadores de la educacion de la Republica Argentina, CTERA) and the Union of Metallurgy Workers (Union Obrera Metalurgica, UOM) in Villa Constitucion. Later on, unions active in the private sector also joined the CTA. Although the CTA was formed against Menem’s plan of reforming the economy and the resulting unemployment, unions that joined the Central justified their action based on their indignation with CGT’s pro-privatizations attitude. The three basic founding principles of the CTA were declared to be (1) autonomy from the state, private employers, and the political parties; (2) emphasis on union ethics; and (3) democratization of labor and politics (Gonzalez 1996, 76). One of CTA legal counselors, Dr. Hector Garcia, said With the privatization of the 80 percent of the SOEs, a new socioeconomic environment emerged. Defined by unemployment and social instability, and devoid of reinsertion mechanisms into the formal labor markets, the new socioeconomic environment required a different type of labor organization. The CTA was created to satisfy this need. The CTA included the unemployed, fought against social instability and proposed new mechanisms of reinsertion into the society. The CGT still thinks that power lies in the number of affiliated workers, and now the number of enterprises or hotels owned and managed. The CTA, on the other hand, understands that the new source of sociopolitical power lies in territorial organization and face-to-face contact. New societal strata created by privatizations do not need a rigid and vertical structural organization. A more flexible and horizontal organization is the answer to the new demands of workers, including those employed in the formal and informal sectors and those who are on the job market. (Buenos Aires, August 2006)

The CTA is a pluralist organization not only in its membership but also in its ideology. Among its members are Social-Christians, Peronists, Trotskysts, Commnists, Socialists, Radicals, and others. The composition of the leadership of FOETRA-BA, the leading CTA-affiliated union


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in the telecommunications sector in Buenos Aires, is a good example of the pluralist membership and harmonious working of many ideological tenets within the CTA.24 The secretary-general of the FOETRA-BA is a Peronist, the associate secretary is a Social Democrat, and the secretary of education is a member of the Workers’ Pole (Polo Obrero), the leftist mass-organization associated with the Workers’ Party (Partido Obrero). The CTA does not have any partisan links with political parties but three main groups dominate within it: the “Front” composed of CTA and Polo Obrero members, the “Block,” composed of Moyanists and the CGT supporters, and finally the “New Proposition,” composed of the more independent Social Democrats.25 The democratic nature of the CTA does not end in the plurality and harmonious co-habitation of a variety of ideologies and affinities within its body of leaders and members. The CTA also includes organizations of retired workers, the unemployed, and prostitutes as affiliate organizations and accepts individual membership. A worker can thus be affiliated with a union that adheres to the CGT while subscribing to the CTA as an individual for a symbolic fee of one Argentine peso per month.26 The same is true for an unemployed worker or a housewife. The CTA, as such, embodies the qualities of a social organization rather than a traditional labor union. In addition to individual membership and easy accessibility, elections for any given position within the CTA are direct and secret. Members of the CTA choose their secretary-general as well as other representatives together and directly. They do not, in other words, select their worker representatives, who then choose the members of the commission, which then selects the secretary-general, as is the modus operandi in the CGT and its affiliated unions. Individual membership and direct elections provide for a more inclusive and transparent representation of workers, even though as with the CGT, the same representatives are typically selected over and over again.27 Many Argentine academics, and the CGT leaders, define the CTA as primarily an ideological movement and a rather insignificant labor organization in practical terms. This study suggests otherwise. Although the CTA started out as a conglomeration of public sector workers belonging to the ATE and the CTERA only, it has extended its affiliation to unions in almost all sectors of industry and services. The CTA currently encompasses unions and federations active in the railways, aviation, metallurgy, electricity, postal service, and commerce sectors. Thus, it would not be wrong to state that the CTA is a smaller replica of the CGT, and operates extra-legally but as a parallel labor confederation.

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The CTA is a smaller-scale replica of the CGT because most of labor federations that exist within the CGT are also present in the CTA. The telecommunications sector federation in the CGT is FOEESITRA and is replicated by the new formation of the Argentine Federation of Telecommunications (FATEL) in the CTA. The energy sector federation in the CGT, FATLyF, is replicated by the FETERA in the CTA. The public sector employees union in the CGT is the UPCN, and in the CTA, it is the ATE. The railway workers in the CGT are organized within the pro-privatization UF, but a similar organization accepting technical workers in the same sector exists in the CTA. It is called the Association of the Management Personnel of Argentine Railways (La Asociacion del Personal de Direccion de los Ferrocarriles Argentinos, APDFA). The metallurgy sector workers are divided between the CGT-affiliated UOM in San Nicolas and the CTA-affiliated UOM in Villa Constitucion. The section of the UOM in Quilmes is affiliated with the CGT but is very much akin to the CTA in mentality and collaborative action. The Federation of Workers and Employees of Postal and Telecommunications Sector (Federacion de Obreros y Empleados de Correos y Telecomunicaciones, FOECYT) affiliated with the CGT also has its counterpart in the CTA. It is the Argentine Postal Workers (Trabajadores de Correo Argentino, TCA). The Industry and Industry-Related Workers Federation (Federacion de los Trabajdores de la Industria y Afines, FETIA) is the CTA equivalent of the Argentine Federation of Commercial and Service Industry Employees (Federacion Argentina de Empleados de Comercio y Servicios, FAECyS) in the CGT. The counterpart of CGT’s airline sector union Argentine Aviators’ Association (Asociacion de los Aeronauticos Argentinos, AAA) in the CTA is the Association of Aviation Personnel (Asociacion del Personel Aeronautico, APA). Union federations and unions with personeria gremial and active in the education and media sectors, such as those of educators and journalists, are affiliated with the CTA and do not have counterparts within the CGT. Table 5.3 shows these and other parallel labor federations and unions within the CGT and the CTA. The CTA is also a hub of research and analysis on questions of direct and indirect impact on workers. The Institute for Training and Research (Instituto de los Estudios y Formacion, IEF), a center of research and development on sociopolitical and economic policies concerning labor, is set up by the CTA itself. The IEF organizes conferences on issues of political participation, labor rights and democratization. Many of IEF’s affiliated institutions are formed and established by unions under the aegis of the CTA. The Institute


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Table 5.3 Sector-wide comparison of labor federations and unions within the CGT and the CTA Sector/Labor Organization Telecommunications Energy Public Sector Railways Metallurgy Postal Service Airlines Industry Education Journalists

CGT FOEESITRA FATLyF UPCN UF UOM-San Nicolás FOECyT AAA FETIA — —

CTA FATEL FETERA ATE APDFA UOM-Villa Constitución TCA APA FAECyS CTERA UTPBA*

* Union of the Workers of Argentine Press (Unión de Trabajadores de Prensa de Buenos Aires, UTPBA).

for Research on Participation and the State (Instituto de Estudio on Estado y Participacion, IEEP), for instance, is formed by the ATE. The Professional Institute for Study and Research (El Instituto Profesional de Estudios e Investigacion, IPEI) is formed by the Center of Telecommunication Professionals (Centro de Profesionales de Empresas de Telecomunicaciones,Ce.P.E.Tel). Its objective is to make this union an interlocutor equal to the private capital in political, technical and legal questions in the telecommunications sector. The IEF is also interested in issues of gender equality and equality of opportunity in social, political and economic life. The publication and research engine of the CTA called CTA’s News Agency (La Agencia de la CTA, ACTA) provides an efficient and accessible Internet site for the study of these and other related questions.28 The lack of democracy in the Argentine labor union structure has been one of the main complaints advanced by the CTA on both national and international grounds. Particularly, the CTA contested the Argentine union law 23.551 for its undemocratic nature. The CTA argued against the legal requirement of obtaining an official permit, also referred to as the personaria gremial, from the Ministry of Labor in order for a labor union to become legitimate and dispose of the legal rights of staging strikes, administering welfare funds, drafting collective agreements, et cetera.29 The contrast between the CTA and the CGT’s views on the impacts of privatizations on labor relations is apparent in the following juxtaposition of the input by the two union representatives from the same sector. Fernando Ledesma, the secretary of organization of the CTA-affiliated Light and Power Union

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(Luz y Fuerza) in Mar del Plata affirmed: “In the CGT, union representatives are ‘labor bureaucrats’ (burocratas sindicales); in the CTA, they are ‘labor democrats’ (democratas sindicales).”30 The CCC—The Ideological Opponent of Privatizations It might be argued that the CTA is a mere ideological organization with no substantial say or impact in Argentina. In this view, the CTA is conjured up as an overly leftist, and most likely, a temporary organization.31 Yet, this does not seem to be the reality in the Argentina of 2006. Though rebellious, it is not the CTA, which is ideologically driven in its formation and organizational principles. Instead, it is the CCC. The CCC is characterized by its generally combative attitude, its high capacity for mobilization and radical activism. As a much more fluid and ideological movement than the CTA, the CCC was started by the Revolutionary Communist Party (Partido Comunista Revolucionario, PCRA) in 1994, even though its historical legacy goes back to the resistance movement against the military dictatorship of the 1970s. The CCC was behind the social protests of “Argentinazo” and the associated demands for the construction of a popular government in 2001.32 Although its website defines the movement as mainly an apolitical and sindical union with class-based ideas, the CCC of today seems to be anything but apolitical. The three main branches of the CCC are composed of workers that are currently employed and members of other unions, the unemployed, and the retired workers.33 Although there is a plurality of ideologies ranging from Peronism to Radicalism and from Evangelism to Maoism, the main discourse is leftist. As the leader of the unemployed CCC members, Juan Carlos Alderete, who became famous for his organizing and leading the twenty days of picketing and camping out on Route 3 in La Matanza during Argentinazo, said I am a revolutionary. My lifelong dream was to go to Cuba and be a guerrilla fighter. But my old man, who was a traditional Peronist union leader, did not want me to. When I was younger, I would read everything I could find: Mao, Trotsky, Marx. I never made it as a worker since I was always organizing my friends. Privatizations helped us forge links with other revolutionary groups across the country and mobilize together. Our goal is to organize and mobilize per neighborhood (barrio) and continue to establish cooperatives for the unemployed across the country. Cooperatives are especially important for the construction of dwellings (viviendas). That is how we now have homes and water, which we did not have before in La Matanza. (La Matanza, August 2006)


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Dario Perillo, member of the CCC and also a union representative at the Unified Union of Education Workers of Buenos Aires affiliated with the CTA (Sindicato Unificado de Trabajadores de la Educacion de Buenos Aires, SUTEBA) stated I am a Maoist. Our objective in the CCC is to establish alliances with the popular forces of Argentina. That is the only way to break Argentina’s chains of international dependency… We are affiliated with other national and international grassroots and labor organizations, such as the Movement of Those Without Land (Movimiento de los Sin Tierra, MST), the Paraguayan Peasant Federation (Federacion Campesina Paraguaya, FCP), the Bolivian Workers Front (Frente Boliviano de Trabajadores, FBT), et cetera. (Buenos Aires, June 2006)

Although currently classified as the third largest labor confederation of Argentina,34 the CCC is mostly a movement of piqueteros. Juan Carlos Alderete said We are the strongest and the most institutionalized movement of the unemployed. Kirchner suggested that we become the union of the unemployed but this would be like legalizing unemployment. Luis d’Elia of FTV35 was co-opted by the government. Go and see his people now. They are left without a leader. (La Matanza, June 2006)

The Gordos (Fatsos)—The Enthusiastic Participant in Privatizations This group refers to the official CGT, which was directed by Rodolfo Daer before the dissident subgroup MTA’s leader was elected as the new secretary-general in 2005. It is composed of those unions most powerful in terms of financial and political power and that chose to stay independent when the CGT split in 1990 in line with pro- and anti-Menem stands, including the question of privatizations. The gordos are the union leaders active in the sectors of services and commerce, banking, insurance, healthcare, food, water, energy, et cetera. These unions have actively participated in privatizations and have adopted the strategy of “business unionism” in dealing with privatizations. According to Jorge Gustavo Simeonoff, the executive secretary for the renegotiation and analysis of the public service contracts in the Argentine Ministry of Economy, privatizations created small but powerful unions led by the CGT’s Gordos. He enumerates among others,

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Jose Luis Lingieri (water), Jose Pedraza (railways), Oscar Lescano (electricity), Julio Cesar Ieraci (electricity federation), and Juan Manuel Palacios (motorized rail workers). These union patrons have participated in privatizations and have obtained the right to manage and own several firms in different sectors, providing goods and services not only to their members, greatly reduced in numbers after privatizations, but to the society at large. For them, privatizations do not represent an ideological issue; they are just a matter of political reality. As Pedraza, the secretary-general of the Railways Union said “Privatizations are against labor mentality, everybody says. I was at the table when Menem turned to everybody present and asked the question of what else to do with the decaying SOEs, if not privatizations. Nobody came up with an alternative, so what other choice did we have, really?”36 The MTA—Implicit Proponents of Privatizations The MTA was a temporary formation within the official CGT, which in contrast to the compromising stand adopted by the latter, questioned privatizations and organized various protest movements in collaboration and in cooperation with the overtly anti-privatizations CTA. The financial power of the MTA came from the adherence of rich and powerful unions like the UOM. As for its political power, much of it originated from the charismatic attributes of its selfproclaimed leader, Hugo Moyano, a former truck driver and the secretary-general of the General Union of the Transportation Workers (Union General de los Trabajadores del Transporte, UGTT). The MTA was dissolved as soon as Moyano was chosen as the secretary-general of the CGT. According to one Argentine analyst: “Moyano put on some weight and became one of the “gordos” as soon as he was elected to lead the CGT.”37 The MTA was composed of transportation unions, such as the truck drivers, urban transportation drivers, taxi drivers, but also the pharmacy workers. They were all important and strong unions, and became even more so after outsourcing, included in privatization programmes, led to considerable increases in the affiliates of these unions.38 The MTA constitutes the primary example of political unionism because it radically changed its position from anti-privatization to proprivatization once its leaders were co-opted within the official CGT. Upon joining the CGT, the MTA put an end to its explicit criticisms of privatizations and neolibealism as a whole, and concentrated instead on long-standing labor issues, such as wage increases and working conditions.39 The selection of President Nestor Kirchner, his


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government’s renationalization of the water and postal service sectors, the establishment of the new SOEs Energia Argentina (ENARSA) and The Federal Airlines, Inc. (Lineas Areas Federales Sociedad Anonima, LAFSA) in 2004, the wage increases obtained in collective agreements, and the re-regulation of the social security system in 2007 also constituted good-enough accomplishments for the MTA leading it to put an end to its focus on and fight against privatizations. Finally, and more importantly, Moyano’s own participation in privatizations clearly and significantly helped in mitigating the polarization between antiand pro-privatization unions (Orsatti 2007).40 The MTA was not the only formation within the CGT-San Martin that became an implicit actor of privatizations following Moyano’s new role as the secretary-general of the CGT. Several other unions were political clients of Menem’s government long before the MTA joined their ranks. These were the public sector workers in the UPCN, the water provision workers, telephone workers, meatpackers, textile workers, construction workers, chemical workers, pasta industry workers, lifeguards’ unions, railroad workers, and state oil workers. These unions provided critical support to the privatizations program, mainly by staying loyal to Menem and pursuing their “strategy of tough negotiations.” Among these unions, the UPCN is the archetype political union, as it has followed the strategy of implicit support of privatizations. Its leader, Andes Rodriguez, was very skillful in dealing with the Menemist government. His negotiation skills were also coupled with the logistical advantage that most of the UPCN member unions were located in the provinces, therefore not as much affected by privatizations as those unions of the capital Buenos Aires area. Dora Orlansky (2001) maintained that privatizations actually increased the number of employees in the political jurisdictions of the federal government and in the top cabinet positions. This gave the Pro-Menem UPCN control over processes of employee recruitment, recategorization, and promotion in the National System for the Civil Service Profession (SINAPA), a promotion system established in 1991 for the National Public Administration personnel and dedicated to the organization of civil servants’ administrative careers. Although the institutional background of the UPCN did not include any significant entrepreneurial management experience, privatizations raised the need to create a new role for the union. The UPCN chose to reorganize itself as an “Intermediary Management Body (IMB),” that is, an “organization with the means necessary to provide mediation for accompanying, monitoring and training

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in undertakings and for self-employment.” The union as an IMB had the “basic goal of triggering a dynamic process for the creation of new enterprises through the recruitment of personnel with a potential entrepreneurial profile” (Villaroel, 1999, 261-262). Andres Rodriguez, the leader of the UPCN, underscored the success record of the union rather than its struggle with privatizations: With privatizations, we have succeeded in obtaining shares in the form of PPPs for our members. We also have maintained our union affiliation and minimized as much as we could the effects of downsizing. We continued and expanded our social security services. But then again, privatizations affected us minimally compared to other sectors like water, energy and telecommunications. (Buenos Aires, July 2003)41

Other pro-Menem unions that followed similar strategies of “tough negotiation” like the UPCN, corroborated Mr. Rodgriguez’s words regarding the ultimate goal of their unions as the minimization of damages of privatizations. The pro-privatizations Telephone Unions Federation (Federacion de Obreros, Especialistas y Empleados de los Servicios e Industria de las Comunicaciones de la Republica Argentina, FOEESITRA) which was divided and severely weakened by the disaffiliation of its capital Buenos Aires union, FOETRA-BA, was quick to introduce a parallel labor union organization in capital Buenos Aires, called the SOEESIT-Buenos Aires. Osvaldo Castelnuovo, the secretary-general of FOEESITRA, said At first, we tried to fight privatizations. But with a determined government and a pro-privatization society, we were left alone in our fight. We therefore chose to negotiate. We participated in the PPPs and we now have a few hotels in different parts of the country as an alternative source of revenue. Our affiliates can go and spend their vacation there for a very small fee. (Buenos Aires, May 2006)

Privatizations and Democratization at the Level of Institutions: Paths and caveats A general typology of the main Argentine labor confederations according to their stands on privatizations should not be taken to mean that the MTA and the traditional CGT, the Gordos and the modern CGT, and the CTA and the CCC have been uniform within themselves. On the contrary, an important consequence of


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privatizations on union structure has been the more autonomous and defiant stand adopted by a group of unions within the CGT itself. Privatizations, in other words, have penetrated each confederation, dividing them along pro- and anti-privatization lines. As a result, a cluster of unions within the CGT has espoused clear and consistent anti-privatization policies a la CTA. This is the case of the temporary formation of the MTA. The MTA was highly active in contesting privatizations and other reforms and new trends spurred by globalization such as the labor reform, reform of the social security system, high levels of unemployment, and the rising prices. It actively cooperated with the CTA and the CCC-related picketer groups. The MTA also cooperated with the rest of the CGT of which it continued to be a dissident, but still an integral part. The unity and consistency in the actions and deeds of the MTA centered on its being against Menem and his neoliberal agenda while supporting the centralized Peronist labor system. With the election of its leader, Hugo Moyano, as the secretarygeneral of the CGT, the MTA was no longer active as of 2007. Moyano and his movement seem to be co-opted into the official CGT rhetoric and stand vis-à-vis privatizations. This is apparent in Moyano’s participation in the privatization of the Belgrano railways, which the government is contemplating (Pedraza 2006).42 Other participating actors in this project of privatization are Jose Pedraza, the secretary-general of the Railways Union, and Canadian and Chinese investors. While pro-privatizations in action, in rhetoric the MTA still opposes the privatizations. Hugo Moyano’s and the MTA’s lawyer and the current national deputy in the Argentine Parliament, Hector Recalde, said It is thanks to Moyano and his efforts that we have the postal service and the water sectors back into the hands of the Argentine state, today. Privatizations have negatively affected the social and labor relations in Argentina. I am currently working on a project of law, which will put limitations on the sectors in which private capital can invest above a certain percentage. After all, there are limitations on labor’s strike activities. So, why shouldn’t there be restrictions on capital’s investment activities? (Phone Interview. New York, February 2007)

While the MTA switched sides from an anti- to pro-privatizations stand, the CTA and the CGT were more consistent in their positions. The CGT was for and the CTA was against them. In addition, the CTA, for the first time in Argentine labor history, expressed its explicit

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support for political democratization in Argentina. As such, the CTA became the “intellectual activist” of the Argentine labor movement. The CGT, on the other hand, cooperated with the Peronist governments to support privatizations using a mix strategy of “political clientelism” in the case of the unions with most of their members located in the interior and less affected by privatizations, and a strategy of “pragmatic negotiation” in the case of unions with most of their members located in capital Buenos Aires and highly affected by privatizations. The latter group of mildly Peronist, more autonomous and financially better-off unions within the CGT used privatizations to become entrepreneurs and to act as “business unions”. The former group of more Peronist and ideologically and financially dependent unions enhanced their aptitude in political bargaining to become intermediary bodies between the Peronist governments and the private sector. Finally, the most recent formation of the CCC epitomized the “institutionalized street activists,” demanding basic goods and services to the government of the day. As in Turkey, in Argentina as well, there was collaboration between unions and labor federations as a result of privatizations. Between 1991 and 1999, the CGT, the CTA, the MTA, and the CCC joined forces to bring about nine general strikes (Carrera 2006). That said, cooperation took place mostly at the interunion level than along confederational lines in Argentina.. Unions affiliated with the pro-privatization CGT collaborated with each other but not as much with those active within the anti-privatizations CTA. When interconfederation cooperation existed, it took place at the regional level between two or more local branches of unions affiliated with separate labor confederations. For instance, the CGT and the CTA-affiliated unions collaborated at the regional level. The UOM-Villa Constitucion, affiliated with the CTA, collaborated with the UOM-San Nicolas affiliated with the CGT, which also cooperated with the CGT-affiliated UOM of Rosario on various occasions, including for staging joint mobilizations.43 The best example of the cooperation effects spurred on by privatizations within the CGT is the Argentine Confederation of Workers of Privatized Firms (Confederacion Argentina de Trabajadores de Empresas Privatizadas, CATEP). The CATEP was formed in 2002 by the collaborative efforts of the Federation of Petroleum Sector Workers (Federacion de Sindicatos Unidos Petroleros e Hidrocarburiferos), the Federation of Telecommunication Sector Workers (Federacion de Obreros, Especialistas y Empleados de los Servicios e Industrias de las Telecomunicaciones de la Republica Argentina), the Federation of Light and Power Workers (Federacion Argentina


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deTrabajadores de Luz y Fuerza), the Union of Light and Power Workers (Sindicato de Luz y Fuerza de Capital Federal), unions active in the railways sector (Sindicato La Fraternidad and Union Ferroviaria), the Federation of Gas Sector Workers (Federacion de Trabajadores de la Industria del Gas Natural de la Republica Argentina), the Union of Water Sector Workers (Sindicato Gran Buenos Aires de Obras Sanitarias), and the Federation of Postal and Telecommunication Sector Workers (Federacion Obreros y Empleados de Correos y Telecomunicaciones). CATEP’s raison d’être was to bring the worker organizations together nationally and internationally so that new projects of dealing with the privatizations and a globalizing world could be created and implemented. CATEP’s founders stated four reasons for why privatizations required the active collaboration of labor unions: a) Preservation of jobs and maintaining of labor and union rights in privatized enterprises; b) Collaboration between consumer organizations and labor unions in order to guarantee high quality goods and services offered by the privatized firms; c) Participation of union members in the design and implementation of new products and management schemes in the privatized firms through adequate union representation in them and the appropriate training of workers; and, d) Resolution of the Argentine labor unions active in the service sectors to fully and effectively adapt to the new requirements of the economic model in effect, and to ensure that economic growth is accompanied with the necessary social policies and employment for all Argentines. (UNI 2002)

Strong cooperation existed between the MTA and the CTA before the former was co-opted into the pro-privatizations block. After the virtual disappearance of the MTA, some cooperation took place between the CCC and the CTA. Nevertheless, cooperation was minor since the CCC rejected becoming part of the “illegitimate” capitalist system, while, as of 2006, the more pragmatic and institutionalized CTA was vying for personeria gremial to become an official actor in this very system. To summarize, interviews conducted with the Argentine union leaders and an overview of the recent developments in the Argentine labor movement show that the effects of privatizations on labor have been manifold.

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Structural Fragmentation with Strategic Cooperation: Privatizations divided and enforced the existing divisions at the confederation level. Privatizations also resulted in the differentiation of union strategies in the political arena. The Peronist MTA block along with the Menemist unions in the CGT adopted what can be called a “culture of compromise” whereby they acted as implicit proponents of privatizations. The left-leaning and pluralist CTA subscribed to a “culture of confrontation,” whereby it functioned as an explicit opponent of privatizations. The more independent and financially richer unions in the CGT espoused a “culture of business unionism,” whereby they became enthusiastic participants in privatizations. Finally, the CCC became the institutionalized labor organization of workers who lost their job and those who have never had one, engendering thereby what can be called a “culture of street unionism.” Divisions also took place within unions and federations. The CGT-affiliated postal service union, FOECYT, lost a group of members, who subsequently formed the alternative federation, the Federation of Argentine Postal Employees, FOECOP. The participants of the FOECYT focus group in Cordoba pointed to the proposed but never implemented PPP program44 as the main culprit of FOECYT’s fragmentation and the subsequent formation of the FOECOP. With privatizations, the Federation of Telecommunications Sector Workers (Federacion de Obreros y Empleados Telefonicos de la Republica Argentina, FOETRA) was also divided. The union in the city of Buenos Aires, FOETRA-BA, took an anti-privatizations stand as opposed to the unions from the rest of the country that followed the pro-privatizations leadership of the federation, FOETRA. As such, the FOETRA-BA recently disaffiliated from the FOETRA. Divisions within unions and federations spurred on by privatizations did not always mean strife. On the contrary, different positions taken vis-à-vis privatizations even produced harmony in some cases. Plurality and collaboration within the CGT, the CTA, and the CCC were already described. Furthermore, although interconfederation collaboration was slim, some cooperation existed at the regional and local levels. The structural organization of the union FOETRA-BA is good example of such harmony amidst diversity. In FOETRA-BA, the union’s secretarygeneral, Osvaldo Iadarola, is close to Moyano in the CGT. The associate secretary, Claudio Marin, is an individual member and leader in the CTA. Finally, the secretary of education, Silvia Hidalgo, is a member of the leftist grassroots organization Polo Obrero.


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Cooperation and cohabitation notwithstanding, privatizations also triggered competition among unions. Privatizations brought about interunion competition in terms of workers’ affiliation, also referred to as the problem of “union framework” or encuadramiento. Journalist and labor specialist Santiago Senen Gonzalez explained Today, the strikes staged in the subway system are due to the encuadramiento problem. The Transport Workers Union (Union Tranviarios Automotor, UTA) used to represent all workers employed at the subway system prior to the privatizations. But after the privatizations, all activities not directly related with the subways, such as security or selling items, were outsourced to different firms. Outsourced workers of the subway system want to become members of the UTA again. Same problems dog the construction sector workers. Those working in the petroleum sector would like to become members of the petroleum sector union. Supermarket Carrefour’s truck drivers are members of the union active in the commercial sector. Yet, they would like to switch to being members of Moyano’s truck drivers’ union. They so desire because these unions offer better salaries and their collective agreements guarantee better working conditions. (Buenos Aires, May 2006)

New Union Leadership and Governance Style: A cautiously more autonomous leadership style and active unionism emerged with privatizations, these changes coexisting with the old ways of conducting labor politics. However, if one has to define the dominant leadership style in each one of the three labor formations, it is possible to say that the MTA and the traditional Menemist unions in the CGT chose to “survive,” and the modern and independent unions in the CGT opted to “thrive” with privatizations, while the new and innovative formations of the CTA and the CCC decided to “defy” privatizations. Privatizations also contributed to the emergence of a more competitive union leader at the local level. This will be analyzed in more detail in the following section dealing with the personal accounts of workers and worker representatives. Demands for Democratization: More vociferous demands for democracy and democratization have also been present in Argentina. The CTA-affiliated unions have for the first time explicitly supported political democratization in Argentina in the period starting with

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the privatizations. In doing so, they have each used their respective perceptions of privatizations as one of the principal stimulating factors for their new projects on democratization: the CTA’s negative perception of privatizations as the main culprit of all woes, such as the rising poverty and marginalization; the CGT’s perception of privatizations as a possible tool for better access to information and entrepreneurial opportunities; the former MTA’s view of privatizations as anti-Peronist; and the CCC’s defiance of privatizations as a plot by the capitalist enemy have all entailed the cautious expansion of the Argentine labor mentality outside the corporatist box. Although only the CTA has advanced explicit demands for democratization, the CGT has also adopted a smear of democratic rhetoric, which hitherto has seldom been the case. The UPCN’s secretary-general, Andres Rodriguez, for instance, referred to its union’s success in the 2005 collective agreements as an achievement of democratization: At a time of profound changes, it was our union, the Union of Argentine Civil State Employees, the UPCN, that conducted the first collective bargaining in the national public sector. This was not simply a trade union claim, but a demand for a superior form of democracy in the workplace. The people who make up the workforce do not act as mere individuals. They do so collectively through social organization and participation. Only if we get organized, can we prevail in the upcoming era; if we act alone, however, we will fall pray to external forces.45

The Cases of Renationalizations in Argentina: The renationalized sectors of the water and postal services constitute areas of their own both in terms of the attitude of the union representatives and their members’ stand vis-à-vis the privatizations. Union representatives in these sectors all tend to be against privatizations based on pragmatic and ideological reasons. The pragmatic justification they give is that the private owners did not make the required investments. Their ideological reasoning for being against privatizations, on the other hand, is that privatizations are, by nature, antithetical to social welfare and national sovereignty. Although idiosyncratic in many ways, these union leaders act similarly to business union leaders in certain respects. They refer to “their company,” “their profit,” “their investment strategies,” and “their projects of expansion”. Roberto Julio Depetris, the advisor to the vice president of the now state-owned postal service company Correo Oficial says, “With the renationalization, the state and the union have reunited as partners in undertaking the important task of development and drawing up a common destiny for the country.”46


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In sum, although this analysis has shown that the Argentine labor structure has survived privatizations, privatizations have produced considerable changes in the way institutions work within this structure. It is true that “single unionism” and “official recognition” principles still persist. Yet, privatizations were instrumental in infusing plurality to labor unions; federations were divided to include more diversity in terms of ideological and professional composition and services offered; collaboration, albeit limited, existed at the regional and local levels; and finally, new formations came into being: the CTA with direct elections, individual affiliation, and extensive involvement in research constituted an important innovation distinct from the traditional, corporatist, and monolithic world of labor a la CGT. The CCC with direct democracy, neighborhood convocations, and street protests, created the new social movement of the fluid unions of the unemployed. Many traditional unions within the CGT became business unions, while others reinvented themselves as intermediate organizations between the state and the private sector. These developments show that the Peronist system of labor established in the 1940s, though still powerful, is not intact by the end of the first decade of the 2000s. That said, there is an important caveat for the privatization-spurred forces to reshape the Argentine labor system toward more democratic structures and institutions, and that is, the much-yearned generational change within the ranks of the top union leadership. As one Argentine government representative, Jorge Gustavo Simeonoff, the executive secretary for the Renegotiation and Analysis of the Public Service Contracts in the Ministry of Economy, put it Privatizations have not changed the unions because union leaders still sit at their secretary-general seats and have done so for decades. They and no one else have negotiated the privatizations. There is no generational change in the Argentine labor union system. Moreover, it is hard to conceive such change since almost all gordos have male brethren who will follow them in their footsteps. (Buenos Aires, July 2006)

Individual-level Analysis of Privatizations: Argentine Workers This study assumes that labor systems and institutions are more than just what their leaders say or do. Labor unions are made up of thousands of workers many of whom are active in their respective unions. Although there are many studies examining the impact of privatizations on labor in Argentina, rarely do they encompass workers.

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When they do, the scope of analysis stays confined to the sectoral without undertaking systematic comparisons of Argentine workers in general. To give some examples, Luis Beccaria and Aida Quintar (1995) look at the socioeconomic consequences of the privatization of the steel mill factory SOMISA in San Nicolas. Daniela Blanco and Carlos Germano (2005) describe the conditions under which the privatizations of radio and television channels took place in Argentina. Cecilia Senen Gonzalez and Jorge Walter (1998) concentrate on the confrontation between those outsourced workers and others affiliated with the core activity unions in the telecommunications sector. Damian Pierbattisti (2005) is another labor scholar who takes a sectoral approach on privatizations and their impact on internal union democracy. He finds that the former state employees now employed in the private company Telefonica are perceived as lazy, incompetent, and rebellious, while the young professionals hired in the postprivatizations period are deemed to be competitive, efficient, and loyal to Telefonica. Pierbattisti links these differences to the privatizations, which have made the employees of the privatized firm into potential consumers, thereby promoting professionalism, individualism, and competition. Such qualities, in turn, have been contrasted with the characteristics associated, rightly or wrongly, with state ownership, namely parochialism, solidarity, and employment for life. Research Methodology and Findings I conducted eight focus groups and several interviews with Argentine workers in the spring of 2006 in Capital and Grand Buenos Aires and the city of Cordoba. Thirty-four workers from the steel, telecommunications, energy, postal service, and transportation sectors were involved in the focus groups (see table 5.4.). The total number of workers interviewed was ten, and included the additional sectors of water and airlines. The workers were chosen nonrandomly based on the sector affected by privatizations and the affiliation of labor confederation. Networking and waiting in front of the workplace or unions to request workers to become participants in the study were the basic mechanisms used in selecting the participants and forming the focus groups. I directed the exact same questions to the Argentine participants as to their Turkish counterparts. The questions were as follows: ➢ What do you think of privatizations? ➢ How have privatizations affected your life in social, political, and economic terms?

Table 5.4 Focus groups in Argentina, 2006 FG

Place/Sector

Participants

Dominant Ideology

Confederation Affiliation

Unionismo

Priv. Impact

Priv. Percept.

PPPP

4

Pragmatic Peronism

UOM CGT

High

⫹

⫹

Same

II

Mar del Plata (Electricity)

3

Pragmatic Left

LyF Fetera CTA

Low

⫺

⫺

Same

III

Córdoba (Gas)

2

Pragmatic None

APJGas Fetera CTA

Low

⫺

⫺

High

⫹⫹

⫹⫹

More active (not due to Priv.) Same

IV

Buenos Aires (Telecomm.)

5

Left

FOETRA-BA Fatel CTA

High

None

⫺

Same

V

Buenos Aires (Telecomm.)

3

Pragmatic None

FOETRA-BA CGT individual CTA

LowMedium

None

Neutral

Same

VI

Avellenada (Railways)

6

Pragmatic None

AFDPA CTA

Low

⫺

⫺

More active (not due to Priv.)

VII

Córdoba Postal (Service)

5

Peronist

FOECYT CGT

High

None

⫺

Same

VIII

La Plata Postal (Service)

6

Peronist

FOECYT CGT

High

None

⫺

Same

Note: PPPP refers to post-privatization political participation.

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San Nicolás (Steel)


I

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➢ Have privatizations made you more active politically—leading you to participate more than just by voting, such as engaging in street protest movements, contacting your local and national representatives, organizing or joining a social movement or a local grassroots organization, et cetera? Focus groups and interviews in Argentina showed that Argentine workers do not portray a generally and consistently hostile attitude toward privatizations when compared with their Turkish counterparts. Instead, workers affected negatively by privatizations tend to be against them, while those that were positively affected by them tend to justify and support privatizations. The rationalist vision of Argentine workers is clearly seen in the juxtaposition of the focus group of San Nicolas-Siderar Steel Mill factory (former SOMISA) with that of Mar del Plata-Edea electricity distribution plant (former SEGBA). Privatizations led to wage increases, and opportunities for promotion, education and training for three out of the four participants in the first focus group. The three participants were pro-privatizations while the fourth was less so. Privatizations led to temporary or permanent unemployment in the second focus group, so the participants of this group displayed clearly anti-privatization attitudes. German, a former SOMISA employee, who was now working for the contractual company Industrias Electricas Houston Inc. in San Nicolas, and also a shop-floor representative in the same plant, said “As a general rule, what belongs to everyone is in reality no one’s.” He argued that only the three elements of what makes a nation, namely education, security, and health, should be owned and regulated by the state. As for the rest, the private sector could take charge. Etgardo, who was UOM’s secretary of communications, and a business administration student in a regional Catholic University, went even further to affirm Privatizations have invigorated the union structure and workers’ mentality. We don’t sit down comfortably in our chairs anymore. We need to get out, educate ourselves, and learn how to interact with the employer. With the PPP, we are now stock-owners, hence in the same category as the employer. Now, we need to keep track of international financial markets, stock prices, productivity and our rights as workers. New union members and representatives of the rank-and-file are now obliged to be more educated, more conciliatory and more ambitious. There is no space for slackers or for libertinaje [doing as one pleases]. With privatizations, we have now become labor activists with a worker’s soul and an employer’s mind. (San Nicolas, June 2006)


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German’s observations, followed by Etgardo’s passionate comments on the workings of the world of business, almost bothered the third and relatively older participant, Alfredo, with a more traditional outlook on labor issues. Alfredo, like German, was a floor representative, and has been so for the last 20 years of his life. He was a Peronist, although he was neither from the Left nor from the Right Peronist wings. Alfredo has constantly educated and enriched himself intellectually, and his colleagues around the table agreed that this was the reason why he was able to keep his union position after the privatizations: “Alfredo reads a lot, and possesses the art of speech and persuasion as well as invaluable experience in union affairs.” A fourth participant of the UOM focus group, Claudio, was grateful to privatizations and to his union. He was grateful to privatizations because they made his entrepreneurial initiative a possibility. He was grateful to his union for the support it gave him in his initiative. Claudio lost his job during the restructuring of SOMISA in 1991. Then he decided to take advantage of the opportunity to found a small business of his own, through the microemprendimientos. He thus established a cooperative of workers, Provser, which provides steel auto-scrubbing services (autolavador) to the private firm SIDERAR. In the beginning, SIDERAR lent Claudio and a few friends of his, four machines, which in time, they were able to increase to fifty-three. Provser is now advising the French company Polycon, which is a service provider in Cordoba. Claudio’s goal is to expand to South America taking advantage of the free trade zones (zonas francas) in cooperation with the international capital. Claudio characterized Provser as the third biggest and well-paying “firm” of San Nicolas, and not as a cooperative. Meanwhile, he did not forget to express his gratitude to UOM for its political and emotional support at every step of the way. He concluded by repeating the pro-privatization workers’ maxim: I can be a boss now, but I have union mentality. This allows me to take care of workers’ problems in Provser without any difficulty. I was once in their shoes so I understand them from the heart. (San Nicolas, June 2006)

An interview, and a visit to the center of San Nicolas,47 with a former senior union member, Armando, attests to the power of UOM and its prominent leader Nicolas Naldo Brunelli’s role in Claudio’s success story. Armando asserts Brunelli is more important than the government of San Nicolas itself. He is our spokesman to Kirchner. Nothing gets done in Argentina

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without the approval of Kirchner nowadays. We cannot talk to Kircher, but Brunelli can. (San Nicolas, June 2006)

The second focus group involving current and former workers in the electricity distribution sector’s Union of Light and Power (Luz y Fuerza) in Mar del Plata presented a completely opposite array of experiences than in San Nicolas. Juan Jose, Roberto, and Juan were downsized as result of the privatization of the state enterprise Eseva after working an average of 15 years in it. Their fathers and uncles also used to work in the same plant. After losing his job, Juan invested his compensation money in a small grocery store. Most of the workers went bankrupt following their brief adventure in investing their compensation money in various small businesses of their own, such as taxis, street kiosks, and grocery stores. Juan was lucky to keep his business going. He was also helped by the fact that his wife had a stable job. Juan was recently reincorporated into the private firm following the hard work of the union and its resuscitated program of Bolsa de Trabajo.48 He was now working as a night watchman at the plant, but he was convinced that this was all good fortune. He, furthermore, thought that he would have been better off were he allowed to keep his job and progress without the interruption caused by privatizations. He was against privatizations and despised them. Both Juan Jose and Roberto were also against privatizations. They likened privatizations to the HIV-virus because just like the virus, privatizations spread fear and aversion among workers, none of whom wanted to have the contagious disease. Juan Jose and Roberto were both forced to accept the voluntary retirement packages (retiros voluntarios), which they deemed anything but voluntary. They had to have psychological counseling as a result of consecutive business failures and attempts to make it in their new lives as middle-aged, unemployed men following the loss of their jobs after privatizations. Juan Jose devoted himself to soccer. His friends thought at times that he was half crazy since the episode of the privatizations. As for Roberto, he even became a piquetero after various unsuccessful attempts at selling homemade delicacies in the streets. Roberto said My kids were just tired of eating the unsold pan dulce49 every night. Nobody wanted to give me a job at 55 years old. They required me to be 20, thin, blond and with blue eyes. But, I refuse to say that I am an “unemployed” (desocupado). In contrast, I am very much “employed” (ocupado). I take care (ocupo) of myself and my family. I repair


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electricity, I paint, I clean… I do all these things to maintain myself. Hence, I am an “ocupado” but with high blood pressure, diabetes and vision problems. All these, thanks to privatizations. (Mar del Plata, June 2006)

Obviously, Roberto and Juan Jose’s interpretations of privatizations were quite different from those of the privatization winners German or Claudio in San Nicolas. While the juxtaposition of the pro-privatization UOM affiliates with that of anti-privatization Luz y Fuerza/Mar del Plata adherents clearly shows that Argentine workers have instrumental rather than ideological views on privatizations, it does not eliminate the alternate hypothesis that it was perhaps the sectoral or regional differences that accounted for their divergent assessment of privatizations.50 Another plausible explanation of the self-interest based interpretation of privatizations by Argentine workers can be found in the labor confederation with which different first-degree unions are affiliated. Accordingly, the UOM members may be pro-privatizations not because they benefited from them or because they are employed in the steel sector, but because the labor confederation CGT with which their union is affiliated supported privatizations. By the same token, workers affiliated with the Luz y Fuerza in Mar del Plata might be against privatizations because their union seceded from the CGT in 1996 as result of the latter’s support of privatizations. Instead, it is now an active member of the alternate but not officially recognized labor confederation, the CTA. The third focus group conducted with three workers in the sector of gas in Cordoba provides a good testing ground for the validity of these alternate explanations of the impact of privatizations on individual workers. The Cordoba section of the Union of Gas seceded from the CGT due to reasons unrelated to privatizations. Union of Gas in Buenos Aires (APJGas), however, was still a member of the CGT, even though its leader, Ruben Ruiz, was deemed to be getting closer to the CTA in 2006. Finally, Cordoba is a region with a strong leftist political history and the heart of worker movements. Therefore, the alternative explanations of region and labor confederation affiliation could adequately be tested with the case of this third focus group. The two participants of this focus group of gas sector workers in Cordoba also provided me with the tools for testing the alternative hypothesis that it is the sector in which a worker works which determines his/her attitude about privatizations. This is so because Nelida and Christian were both gas sector workers who kept their jobs as a result of privatizations. Nelida, however, was highly critical of the

166


privatizations, while Christian was not. The reasons for the discrepancy were surprising: Nelida saw her position downgraded as a result of privatizations, while Christian was promoted to a position equivalent of an engineer. Nelida thought privatizations did not create equal opportunities for self-advancement of all employees, while Christian equated the whole idea and process of privatizations with the enhancement of opportunities for professional self-improvement. In another region and in a different sector, the contrasts between Christian’s and Nelida’s attitudes vis-à-vis privatizations are directly related to their perceptions of personal success or failure resulting from privatizations. Christian likened the pre-privatizations period of state ownership to an imperial era for the workers: When my father was a worker of the SOE Gas del Estado, everything was free. We would go on vacation every year to any part of Argentina, and it was free. Seeing the doctor was free. If the specialist we wanted to see did not exist in Cordoba, we could travel free to Buenos Aires just to see the doctor. But between the time I became a worker of the state firm in 1985 until the time of the privatizations in 1992, I witnessed the corrupt dealings of the public managers from very close. Ministers would put their teenage daughters and sons as directors. They would practically do their school homework at work, and get paid. Toward the end of the state ownership, there was not even paper or ink to print in the company. Privatizations meant a good cleaning of the house. Those who did not work and did not want to work were eliminated. Those who stayed had to prove to the private employers that they were capable and willing to work. (Cordoba, July 2006)

Nelida disagreed. She was the director of personnel at the time of privatizations. She said Privatizations came like a hurricane and put me even behind where I had started when I first entered Gas del Estado. I am now a basic staff member. I took some computer classes, but that is all. I learnt how to use Excel, which I enjoy a lot. But getting a promotion is just impossible. So, I have gotten involved in union activities a little more now. (Cordoba, July 2006)

In Turkey, workers placed themselves51 on the left-right political spectrum, which was very important in determining their social and political activity regarding privatizations as well as their understanding of them. In Argentina, on the other hand, workers were much more self-centered, materialistic, and instrumental


167

in their assessment of privatizations when compared with their Turkish counterparts. While this does not mean that the Argentine workers were apolitical, it means that ideologies and partisanship were less apparent in Argentina than in Turkey, except for Argentine workers with leftist ideologies who still used political and ideological reasoning in their rhetoric when analyzing and describing the privatizations. A comparative analysis of the four focus groups conducted with workers from the telecommunications sector provides a good illustration of the impact of political ideologies in molding the attitude and behavior of Argentine workers vis-à-vis privatizations. The focus group I conducted with six workers, who were active members of the anti-privatizations FOETRA-Buenos Aires, showed that Marxism, Trotskyism, and other variants of the leftist ideology made workers into strong opponents of privatizations. If anything, Omar said, privatizations pushed him and his friends to read more about capitalism as an ideology and a system of organizing the polity. At the end, he became convinced that capitalism was the enemy. Even though his father was a Peronist and a prominent union leader affiliated with the CGT, privatizations confirmed that he was right not to have walked in his father’s footsteps. Like Omar, the other five participants of this focus group, were all active union members and floor representatives with leftist ideologies. None of them had lost a job as result of privatizations even though the restructuring of the telecommunications sector had decimated this sector’s employees from 24,000 to 12,000 approximately. They had all endured “psychological torture” by the private employers so that they would accept the large sums of voluntary retirement packages (retiro voluntario), and leave. Since they were floor representatives in the pre-privatizations period, they were deemed to be dangerous in the eyes of the “capitalists.” They were offered twice the normal rate of compensation to make it more attractive for them to leave. Were they not to accept the money, they were left without any work to do. Sometimes, they could go on idle for months. Their family members, especially their wives, were contacted by the private firm in order to make them convince their husbands that retiro voluntario was in their families’ best interest. Omar said I resisted these capitalist tactics. I took it day by day and I am still a floor representative today. I plan to stay as such for the rest of my days. Being a worker is my passion. (Buenos Aires, July 2006)

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The FOETRA-BA/CTA focus group provides a good contrast with the results of an interview conducted with a floor representative affiliated with its Menemist counterpart, the SOEESIT/CGT. Jorge was an active member in this Peronist labor union in the telecommunications sector.52 Jorge lamented that the state did not support them in their initial fight against privatizations, which brought him and his friends affiliated with the former FOETRA, now SOEESIT, to switch to the negotiation mode for the sake of workers. He was now grateful that he did not accept the retiro voluntario because when he sold the stocks that he had obtained as part of the PPP during the privatizations, he obtained much more than he would have gotten with the retiro voluntario. Jorge said, “I am equally grateful to EnTel (SOE) as I am to Telefonica (private company). Everything that I and my family have today is thanks to them.” Jorge’s attitude was typical of members of unions that cooperated with the privatizations in other sectors. The comparison of FOETRA-BA/CTA with SOEESIT/CGT workers’ accounts showed that workers with leftist ideologies were much more likely than their Peronist counterparts to justify their stand toward privatizations in ideological terms, regardless of their sector, age, or education level. In other words, the impact of materialistic and individual explanations were much less obvious in the case of workers who described themselves as leftists than in workers who described themselves as Peronists. Peronist workers typically used the argument that privatizations were going to come one way or another and that there was nothing they could do about it. As Carlos, who was a Peronist floor representative affiliated with FOETRA-BA, and currently working at Telecom, said “Privatizations proved to be good because with the state enterprise, each government change would mean a change in the managers.”53 The caveat for both groups of workers, however, was that they be active members in their unions. Leftist workers were more ideological and Peronist workers were more rationalistic about privatizations, only if they were unionists, that is, active members of their respective unions. But, what about those workers who were not active members in their unions or who were not members of any union at all? What was their attitude toward privatizations? The focus group, involving three relatively less active members of FOETRA-Buenos Aires, who also were individual members of the CTA, indicated the relative weakness of ideology in forging attitudes toward privatizations. For Cesar, Ezequiel, and Gustavo, privatizations had to be done, and they improved technology, infrastructure, and ultimately, life in terms of access to goods and


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services. They, thus, agreed with privatizations in general terms. They disagreed, however, on the ways in which they were carried out. They cited the lack of transparency, dearth of adequate regulation, and the high degree of unemployment as downsides of privatizations. In this group of nonactive members of the left-leaning CTA, only Gustavo was an ex-EnTel worker, while Ezequiel and Cesar had joined the firm after the privatizations. All of them, however, used very analytical, pragmatic, and rational criteria when assessing the pros and cons of privatizations. The same is valid for Fernanda, who was interviewed on a separate occasion. Fernanda was only nine years old when EnTel was privatized in 1991. She thought that apart from the problems of unemployment and marginalization, privatizations provided many opportunities for Argentina. Fernanda was not a member of any union. She thought overall that the “union people were overly ideological, too much on the left, and too confrontational for her taste” (Buenos Aires, July 2006). Another lively example of the lack of significance of variables of partisanship and ideology as determinants of Argentine workers’ attitudes toward privatizations comes from the focus group conducted with workers in the railway sector in the suburbs of Buenos Aires. Olarte and his five friends never became union members during the state administration, nor did they do so after the privatizations. They recently mobilized, however, to become union members for the first time. What prompted them to suddenly want to unionize and be active in the labor movement was their finding that the private owners cared much more about the unionized workers than they did about the nonunionized workers. Olarte of Ferrocarril Roca said When the privatizations came in 1993, we thought we would be the owners of the company because we were not union members and we were hierarchically higher in the scale of skills. We thought the private owners would like that and consider us as their equal. On the contrary, year after year, we saw that the workers covered by the collective agreements of their respective unions got raises and worked under better conditions, while we were consistently left out. As supervisors, the workers we supervised started earning more than us. They then started disrespecting us. We, therefore, decided to join the union of railroad technicians and supervisors in 2005 simply because we were betrayed by Charlie (a.k.a. Carlos Menem) and the private employers. (Avellenada, May 2006)

A contrary case to the argument of the relative weakness of ideology in forging Argentine workers’ attitudes (except for left-leaning workers)

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toward privatizations came from the focus group I conducted with postal workers in Cordoba in the section affiliated with the FOECYT. This focus group showed that Peronist workers, who were active in their union and who were not affected negatively by privatizations, were actually against privatizations for partly ideological reasons. The postal workers of Cordoba were proud of all the mobilization activities they had engaged in to prevent privatizations. They had staged many strikes and protest marches during which union leaders were injured in their several encounters with the police. The postal service union section in Cordoba was also engaged in creative protest movements against the private owner Macri. Very much like Petrol-Is affiliated with the pro-privatizations TURK-IS in Turkey, the Cordoba branch of FOECYT used creative slogans, posters, and other means of the written media to inform the public about the corrupt dealings of the private owners. One of them showed Mr. Macri dancing with a woman and read “This is how Macri spends the perks of privatizations.” The argument of the newly selected secretary-general of the local union section, Jose Miguel Del Giudice, was interesting: Macri is not an Argentine but an Italian firm in essence. Its basis is in Italy, and has taken all the profit abroad. This is similar to the rest of the foreign firms that have participated in privatizations. (Cordoba, July 2006)

Why were postal union workers of this part of Argentina ideological even though they were not negatively affected by the privatizations? Why did they not use an interest-based explanation to privatizations like the rest of the active union members who were pro-privatizations? Cordoba is a part of Argentina known for its social democratic and leftist political legacy. The famous working-class protest of 1969, Cordobazo, happened there. This could have been a plausible explanation for understanding the deviant reactions and attitudes of the postal sector workers in Cordoba, had it not been for the findings of the gas sector focus group also run in the same city. However, the experiences of the gas sector workers in Cordoba has shown that the legacy of the city and the location by themselves did not have any significant impact on workers’ reactions to privatizations since reactions of the gas sector workers in Cordoba were equally rationally driven and self-centered as were the reactions of workers in other sectors in Buenos Aires. There had to be, therefore, a third factor, in addition to, and apart from, ideological/rational


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and national/regional divides influencing workers’ attitude toward privatizations. The focus group I conducted with the postal workers in La Plata provided clues to this puzzle. The seven workers of different age groups and with different levels of education, some of them active, others less so in the union of postal workers in La Plata, the capital of the province of Buenos Aires, showed the prevalence of emotional and ideological arguments in workers’ negative assessment of privatizations despite their not being negatively affected by them. The participants, in this focus group, concurred Privatizations went against the Argentine core tradition of drinking mate.54 Private owners divided postmasters across different regions so that they could not take breaks and drink mate together. (La Plata, July 2006)

Why did not these postal workers of La Plata, who were not negatively affected by privatizations, assessed them in ideological and negative terms? The explanatory factor might have come from one common point that they shared with the postal workers in Cordoba: the postal sector was recently renationalized, following a brief period of private ownership by the group of Macri between 1997 and 2004. We can thus safely affirm that the attitude of the postal sector workers vis-à-vis the privatizations were distinct.. It was not the leftist/Peronist ideology or the rational-individual reasoning that drove their understanding of privatizations. Nor was it the regional legacies per se. It was instead their unique identity as workers of a company owned by the state that determined their understanding and perceptions of privatizations. This is apparent in some of their following statements (La Plata, June 2006): During the era of the private firm, union was not listened to. Now, there’s hope that they listen to us. . . because now, we are the State. We could not fight against privatizations effectively because the state was not with us at the time. Without the state, unions cannot do much. Now that we are the state again, there is no more fear. It is much easier to foment and maintain solidarity. It is easier for us, the workers, to speak with a politician than with a businessman. For a politician, one worker means one and even several votes, including those of his family and friends. A politician must protect and cater to us. For a private employer, however, we represent mere numbers in registration records. This makes the private employer arbitrary, authoritarian and inflexible toward workers.

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Such statements coming from postal workers in La Plata were echoed in the following statements of their Cordobose counterparts (Cordoba, July 2006): In the state administration, as opposed to private ownership, the state delegates management to workers. Many union leaders become the actual managers along with, and in addition to, more direct political appointees of the government. Carlos Rossi of FOECOP is one such union leader who now is the vice president of the Company. We finally have the guarantee and stability of work under state administration as well as opportunities for advancement in the management of the firm. Now, it is the era for new politics and a new mentality. The postal service is the honor of a country and it is a social service. People have a basic right to information and communication. Private firms only invested in areas where they expected profits.

The uniqueness of the attitude of the renationalized postal service sector verifies the impact that privatizations have on workers’ attitudes toward them. In fact, to better understand the impact of privatizations on the changing attitude and behavior of workers, one must not look into the effects of privatizations only, but also the consequences of the opposite of privatizations, that is, nationalizations. As seen in the cases of the postal service workers in La Plata and Cordoba, it does not take long for workers to go back to state-dependent and patron-client language of the state ownership era. The same rhetoric of symbiosis was also easily detectable in the former private sector employee and current union employee in the water sector that was undergoing renationalization at the time of study in 2006. Maria Del Carmen Framil, the coordinator of the training program “Technological Institute of Leopoldo Marechal” of the Union of Sanitary Workers of Grand Buenos Aires (Sindicato G.B.A de Trabajadores de Obras Sanitarias) emphasized that (1) the water sector was not privatized but given out as a concession, and that the two were distinct phenomena since ownership stayed in the hands of the state in the latter, and that (2) there was no room to defy privatizations but only to survive them using innovative and intelligent strategies, among which training occupies a central role. Now that the water sector was in the process of being returned to state ownership, the union itself was undergoing a structural reorganization acquiring an increasing degree of importance and power in the management of the firm.


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The sui generis stand of renationalized unions notwithstanding, one important finding of this research on the changing attitude and behavior of Argentine workers as result of privatizations is that none of the focus groups under scrutiny has shown that privatizations render Argentine workers more active politically. On the contrary, the consistent finding of the focus groups has been that privatizations did not change workers’ level of political activity. Instead, workers who had a union consciousness before, and who were active union members prior to privatizations, continued to be so after. Privatizations played the role of a catalyst at best, making such workers more active temporarily and pushing them to change their strategies in accordance with the changed conditions. As for those workers, who were merely registered members of unions without necessarily having union consciousness, that is, not active union members, they continued to be inactive, looking for alternative means of survival in the aftermath of the privatizations, as did the deunionized workers. The only exception to the lack of increased political activity as a result of privatizations in Argentina came from the focus group I conducted with the founders of the Oro Negro (ON) social movement. This was a protest movement against privatizations and was started by a group of nonunionist and downsized workers of the state petroleum firm YPF. The peculiarity of the movement was that it was formed in 2001, eight years after the actual privatization of this sector. The leader of the movement, Ana Maria, explained Every time we gathered with friends after our sad departure from the YPF family, I witnessed nothing but complaints about the injustice of privatizations and of the vicious scheme of ‘retiro voluntario’. Many of us were downsized before the privatizations. Therefore, we were not offered the PPP stock options, as were thousands of workers downsized after the privatizations. As such, there were many injustices that needed to be brought into light. Together with my husband and a couple of friends, we obtained copies of electoral lists and went to the polls to meet the victims of the YPF privatization. We henceforth started our legal fight against privatizations: we had a project of law passed in the Senate, which decreased the age requirement for retirement eligibility. Those who were 50 years old and/or those who have worked for 25 years could now retire. We also succeeded in getting law 25.471 passed: this law prevents the seizure of goods of those former YPF workers who default on their debts. Our legal fight found a great institutional niche in the CTA. (Buenos Aires, August 2006)

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In contrast to the Turkish protest movement of the OM, which came into being as soon as the first mass firings took place after the privatization of the same sector, that is, petroleum, it took years for ON to come into existence. Once it did, the adherents of the movement fought not only for the recuperation of their jobs but also for the renationalization of the energy sector as a whole. Ana Maria said “The water and postal service have been renationalized. There is a proposal to renationalize the railways sector. Why not the oil sector also?” If the OM in Turkey was a spontaneous and loose movement of practical needs and aims, the ON in Argentina was one of careful and long planning with the associated political and ideological goals and premises. The main ideological template of the movement came from General Enrique Mosconi, who had directed the state-owned YPF from 1922 onward. Ana Maria said that their objective was to spread the Mosconian ideals of state ownership of natural resources. Each year, along with its partner NGOs, that is, the Movement for the Recuperation of National Energy (Movimiento por la recuperacion de la energia nacional, MORENO), the Federation of the Workers of the Energy Sector of the Republic of Argentina (Federacion de los trabajadores de energia de la Republica Argentina, FETERA), and the National Commission for the Commemoration of the Hundredth Anniversary of the Discovery of Petroleum in Argentina (La Comision Nacional para la Conmemoracion del Centenario del Descubrimiento del Petroleo Argentino, CoCePA), the ON paid homage to General Mosconi by visiting his tomb at the famous Recoleta Cemetery in capital Buenos Aires. The account of the ON and its ideological objectives notwithstanding, one can conclude that it was not as much the impact of political and ideological groundings that determined Argentine workers’ experiences with privatizations, as much as their rational and individual assessments of their gains and losses as a result of privatizations. Except for the active union members with leftist ideologies and active union members in renationalized sectors, Argentine workers supported, or at least, did not contest privatizations, if the latter made them richer. Argentine workers took an antiprivatizations stand, if privatizations made them poorer. Generally, active union members, regardless of their individual or their unions’ political affiliations, were better off as a result of privatizations, compared to those workers who either were not union members or those who were, but merely on paper. This refers to the critical variable I call “unionismo.”


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Unionismo can be defined as the consciousness of being active union members, regardless of ideological groundings. Workers with leftist, rightist, centrist, or other ideological groundings can either be unionist or nonunionist. Those who are unionists are active union members; those who are not, are either only registered members of unions with no active participation in them or are not unionized at all. In Argentina, unionist workers survived privatizations because they were protected thanks to their positions within the unions or because they were backed by them. In the case of unions that supported privatizations, unionist workers fared even better because they could increase their wealth and status using privatizations. In the case of unions that contested privatizations, unionist workers kept their union positions and continued their activism toward the protection of worker rights, this time against privatizations. Nonunionist workers did not fare as well. They did not have the protection of established union organizations. As a matter of fact, the Avellenada focus group showed that even those workers who were not downsized as result of privatizations needed union protection and coverage to feel secure in the post-privatizations period. Overall, my study showed that the Argentine workers have responded to privatizations using three kinds of strategies: individual, organizational-entrepreneurial, and collective. Individual Solutions for Nonunionist Workers Unions in Argentina are still very powerful entities, politically, institutionally and socially. This is so because all the nonunionist workers justified their lack of social or political action after privatizations based on the grounds that they did not have the necessary support of a union. For the Argentine rank and file, any social movement devoid of union support or leadership was unthinkable. The case of Carlos, an ex-Aerolineas worker, is telling: “Unions supported privatizations, but they did what they had to do and what they could do. That’s all.” Carlos was now the doorman in the CTA-Capital Buenos Aires because he was a good friend of the secretary-general of the same institution. Like Carlos, many victims of privatizations used their friend and family connections to survive in the post-privatizations period. The ex-YPF worker, Roberto, worked as a clerk in the unionmanaged Social Security for the Employees of Commerce and Commerce-Related Industries (Obra Social de los Empleados de Comercio y Actividades Afines, OSECAC) in La Plata because his wife was the best friend of the secretary-general’s wife. Sara, an ex-railways ticket clerk, became a nurse and home-care provider. She never envisaged

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going to the union to ask for any kind of help or to join a protest movement for that matter. Sara said I have never really liked unions. They are the reason why I lost my job. They are corrupt. Pedraza [the secretary-general of the Railways Union] is now a millionaire thanks to no other than privatizations. (Buenos Aires, June 2006)

Friends and family connections were not the only solutions that the nonunionist Argentine workers resorted to in the post-privatizations period. The nonunionist workers chose different individual solutions to survive in the post-privatizations period. Younger workers, particularly those with a minimum of skills, went abroad, mostly to Spain. Both of Roberto and Juan’s sons, from Luz y Fuerza in Mar del Plata, were in Spain doing manual work at the time of my interviews with them in 2006. The elderly, who were already retired or close to retirement, went to the interior of the country. The father of the successful gas sector worker in Cordoba, for instance, was downsized as result of privatizations. He bought three homes in the interior of the country with his generous compensation package and was successfully renting them to tourists. The middle aged mostly engaged in entrepreneurial activities, such as buying and managing taxis, kiosks, and small grocery stores. Most of them went bankrupt since there was too much supply and not enough demand. These failures brought many problems, including an increased rate of alcoholism, drugs, divorce, crime, and in some cases, suicide (Chervo 2003). Those with higher education and/or additional skills simply continued their lives converting their hobbies into a profession. Juan Carlos, an ex-EnTel worker, learned French and continued to run his deceased father’s plastic workshop. Guillermo, also an ex-EnTel professional with a Masters degree from the London School of Economics, began teaching in FOETRA-BA. Ana Maria’s husband made his hobby into his main job as an iron-maker. This does not mean, of course, that they were entirely happy with how things turned out. Juan Carlos missed wearing a tie every day and working in front of a computer. He said he did not feel like he belonged in the society anymore. Even to get a loan, he needed his friends to sign as guarantors for him, and he felt shame when he gave out his wife’s business card when he introduced himself. Guillermo liked the slow pace and lack of stress in his new life as an educator but complained that he was not earning as much as he used to. Ana Maria’s husband spent his extra time in the ON-related activities.


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Organizational-Entrepreneurial Solutions for Unionist Workers Workers who were active in their respective unions, either in top positions or as floor representatives, were usually protected against the negative impact of privatizations. They kept their jobs and their positions in the union. This was the case for both the leftist members of the CTA, which contested privatizations, and the Peronist members of CGT-affiliated unions, which supported and participated in privatizations. Relatively younger, more ambitious, and less ideological unionists actually used privatizations to engage in entrepreneurial activities with the political and organizational support of their unions, as was the case with the UOM affiliates in San Nicolas and the successful gas sector worker in Cordoba. Many of them acquired education and training in as diverse areas as psychology, business administration, human resources and sociology. Collective Solutions for Re-Unionized Workers It would be safe to say that in Argentina, privatizations did not produce any large-scale social movement or organization on the part of affected workers. Individual solutions for those outside the union framework and union-related solutions for those inside dominated. The only minor exception to this trend was the ON. However, the case of ON cannot be cited as a pure example of a mass-based social movement formed as a result of privatizations. A juxtaposition of the Argentine ON with its Turkish counterpart, the OM, makes this clear. The OM movement in Turkey was formed as a direct result of, and immediately after, the privatization of the SOEs in the petroleum sector. The first and foremost goal of the movement was the securing of jobs. Renationalization was never part of the picture in the OM experience and project. Once jobs were obtained, the movement withered away. Nor did the movement draw on any specific historical figure to justify its raison d’être. Finally, the OM movement was a loose grouping of regional self-elected victims of privatizations, who mobilized their friends to engage in protest marches and dialogue with the government representatives. As such, the OM did not benefit from the institutional and organizational infrastructure that the CTA has provided to the ON movement in Argentina. In contrast to the OM in Turkey, the ON in Argentina was formed years after the actual privatization of the petroleum sector. Its objectives included the political and ideological project of renationalizing the energy sector. Furthermore, soon after it was established, the movement joined the unofficial labor confederation

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of Argentina, the CTA, and was still an active member of this institution in 2006. ON, therefore, reinvented itself as part of the union movement in Argentina as soon as it was born in 2001. One cannot help but wonder if the ON would have endured had it not been for the institutional framework and support provided by the CTA.

Privatizations and Democratization at the Level of Individuals: Paths and caveats To recapitulate, the three main findings of the focus groups conducted in Argentina are that (1) the main determinant of workers’ reactions to privatizations was unionismo, that is, the degree of affiliation with unions, (2) Argentine workers tend to be instrumental and individualist in their assessment of privatizations and their attitude toward them, and finally, (3) privatizations did not render Argentine workers more active politically or socially, and no immediate social movement coming from the collective efforts of the rank and file was formed as a way to question or protest privatizations. Regarding the first finding on the main determinant of worker reactions to privatizations, one cannot help but wonder whether history has been at play here. This is to say that in Turkey workers’ reactions toward privatizations were mainly determined by partisanship, that is, individual standings on the left-right political spectrum and loyalty to a given political party. In Argentina, partisanship or political ideology, except for leftist ideologies, were not significant in determining the level of political activity in the post-privatizations period or the attitude toward privatizations in general. Unionismo was. Accordingly, active union members regardless of their geographical milieu, sector of activity, hierarchical level in the union, educational level or age, continued to be active after privatizations, while nonunion members looked for individual solutions, and did not necessarily increase their political participation after being negatively affected by privatizations. This brought the second divergence at the individual level of analysis between the Argentine and Turkish workers. Argentine workers’ attitude toward privatizations was driven by an instrumental cost-benefit analysis except for the nonleftist and the nonstate workers. Argentine unionists were sheltered from privatizations because they had an official position within their unions. The floor representatives, for example, were sheltered by their respective unions since private employers were reluctant to touch these workers due mainly to the fear of having to deal with the union. Nonunionist Argentine


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workers never envisaged taking action unilaterally or collectively to contest privatizations because they felt weak against the institutional and historical power of the unions. The leading rationale was: Even if unions are for privatizations, what does it matter what I think or do? In Turkey, on the other hand, leftist and rightist workers affected or not affected by privatizations defied them on ideological grounds and acted along the lines adopted by their political party of choice. As examined in more detail in the next chapter, the historically important place of the political parties and unions as drivers of political change in Turkey and Argentina, respectively, might have determined the distinct attitudes adopted by the Turkish and Argentine workers toward privatizations. Although neither the Turkish nor the Argentine workers increased their political participation or changed their voting patterns as result of privatizations, a third difference among the social outcomes of privatizations at the individual level of analysis concerned the emergence of collective action and social movements. In Turkey, privatizations generated a provisional but a vibrant social movement of the rank and file, due mainly to the workers’ perception of the unsatisfactory handling of privatizations by their labor unions. Privatizations did that by increasing the lack of trust between union representatives and the rank and file, thereby driving the latter to take its destiny into its own hands and mobilize outside the scope of the unions. Privatizations did not create an immediate movement of anti-privatizations coming from the rank and file and devoid of union support in Argentina.

Conclusion: Impact of Privatizations on Unions and Workers in Argentina The analysis of the impact of privatizations on Argentine labor shows that the labor institutions were affected by them. Privatizations provided the necessary stimulus for a group of anti-privatization Argentine labor unions to secede from the CGT and to form the new institutional formation, the CTA, which was much more amenable to democratization. From the 1990s onward: (1) the CTA-affiliated unions were fully cooperating with each other and civil society organizations at local, national, and international levels; (2) the CTA supported the democratization of the labor structure as well as that of the political system as a whole; (3) the CTA gave in to the demands of its rank and file to introduce direct and secret elections of its secretary-general; and (4) the CTA opened its doors to the unemployed, the retired, and social movements such as the ON. The CGT

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and its structure stayed relatively intact during the privatizations. Nonetheless, the CGT also (1) undertook several research activities to analyze privatizations; (2) created research organizations, including the CATEP; and (3) cooperated, albeit regionally, with the CTAaffiliated unions. The MTA, the once equivalent of the CTA within the CGT, became extinct once its leader was chosen to lead the CGT itself. While this showed the enduring power of the existing Argentine labor structures, the CTA remained as a separate organization. The CCC’s formation was less directly related to privatizations since only a minor group of former state employees were included within its body. The CCC was instead a creation and the institutionalization of the piquetero movement in Argentina. This did not prevent many labor scholars to dub it as the “union of the unemployed,” however. All of these organizations searched for ways to adapt to the changing economic conditions and tendencies of a globalized world. One reason why the Argentine unions were engaging in these activities is because privatizations’ negative impact on unionization and employment forced them to find new ways of doing union politics. As such, the perceptions of privatizations and the expectations about their negative consequences, and not privatizations per se, acted as an invisible hand in producing the unintended changes in the Argentine labor institutions and politics. The analysis of the impact of privatizations on Argentine workers shows that the effects of privatizations on individual workers are not strong either in the short or the long run. Privatizations seldom changed the political activity and the nature or degree of participation of workers affected by them. Unionist workers who were active members of their unions and who had some representative position in them continued to be so after the privatizations. These were also the workers who could partially escape the negative effects of privatizations thanks to the institutional and political power of their unions. Some of them even benefited from privatizations by using them as a means for self-enhancement educationally, professionally, and financially. A vibrant social movement by the rank and file devoid of union support was not formed and possibly not even envisaged in Argentina. The only social formation that came close to such an independent mass organization was the ON. The latter, however, became a member of the CTA as soon as it came into being. Its members were also members of the CTA. These and other accounts by the Argentine workers reaffirmed the still substantial institutional, political, and symbolic power of the Argentine unions in the minds and lives of the Argentine working class.


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These findings from Argentina show that privatizations created highly similar results in the institutions of labor there as in Turkey. These can be seen in the tripartite division of the respective labor institutions and their taking distinct attitudes toward privatizations. This analysis has also shown that privatizations have produced slightly dissimilar results on individual workers in Argentina and in Turkey in terms of their responses to privatizations. These can be seen in the formation of the mass-based OM in Turkey, created without union assistance, and the lack of an equivalent creation in Argentina. Why have privatizations had convergent effects on institutions and divergent consequences for individuals? Why has the collective organization of workers in Turkey not been a long-term social movement leading to the ultimate and dichotomous outcome of individual apathy versus institutional change? While possible answers to this puzzle are complex enough to constitute a topic of its own for a separate research project, tentative solutions can be found in the respective histories of political development in Turkey and Argentina.


Chapter 6

4

Effects of Pr ivatiz ations on Labor A Cross-Cultural Comparison and Implications for Democracy

M

any students of political economy argue that privatizations, by being standard recipes for shrinking an overarching and inefficient state, produce similar sociopolitical consequences in different countries. Privatizations, in this view, enable a better allocation of resources, the efficient use of market resources, and possibly, political liberalization.1 Other students of political economy, on the other hand, take a sociological neoinstitutionalist or even a culturalist perspective to argue that privatizations produce divergent results depending on the country or the region implementing them.2 They argue that increasingly uniform institutions, practices, and policies brought about by privatizations do not mean that there is a unifying paradigm for analyzing the effects of privatizations on workers and labor unions (Candland and Sil 2001, 285). It is true that labor institutions and movements vary from country to country and region to region. These country- or region-specific variables, in turn, significantly influence what effects privatizations produce in any given context. The findings of this study warrant the need for a middle-ground approach between the usually proprivatizations universalists and the anti-privatizations contextualists. It suggests that privatizations do not produce the same results in different countries implementing them. Nor do they produce completely divergent results depending on the country and contextual factors. Privatizations produce highly similar changes on institutions, which

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craft similar strategies to adapt to the changing social and political parameters created by privatizations. However, the convergent effects of privatizations on institutions do not replicate themselves at the individual level. Privatizations affect citizens of different countries in different ways. The comparative analysis of the cases of Turkey and Argentina shows that there is a high likelihood that privatizations create convergent institutional changes in the labor unions but divergent responses on the part of individual workers, at least in the short run. From a democratization perspective based on social mobilization and institutional adaptation, the fact that institutions, and not individuals, adapt to the changing circumstances in the long run brings the conclusion of this study that privatizations have democratized the labor unions in Turkey and Argentina, but not the individual workers. These tendencies and links are summarized in Table 6.1. The finding that labor unions have changed as result of privatizations is controversial. Unions around the world are stigmatized as corrupt and anachronistic entities. One Turkish scholar likened Turkish labor unions to “parasites” for always supporting the government of the day and living off of it.3 Maurizio Atzeni and Pablo Gigliani (2007) maintain that old trade union practices have prevailed in Argentina, while Sebastian Etchemendy and Ruth Collier (2007) argued that traditional cooperative approaches have dominated in union-state relations. While sometimes recognizing the change and deeming it important requires comparing it with the other, it is also a matter of seeing the glass half Table 6.1 Pedagogic snapshot of Turkish and Argentine organized labor after privatizations Country

Level of Analysis Individual

Outcome relevant for Democratization

SR:

⫹

LR:

⫺

Turkey Institutional

Internal: ⫺ External: ⫹ Structural: ⫹

Individual

SR:

⫺

Institutional

LR: Internal: External: Structural:

⫺ ⫺ ⫹ ⫹

Argentina

• Some learning experience of democratic participation and contestation. • Temporary formation of the loose OM movement. • Increased autonomy, new unionism, cooperation, and explicit demands of democratization. • No grassroots mobilization devoid of union backing and only one detected (Oro Negro) with it. • Increased autonomy, new unionism, and demands of democratization mostly in the CTA. Cooperation mostly regional.

E f f e c t s o f P r i vat i z at i o n s o n L a b o r

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full instead of half empty. Opting for what Albert Hirschman (1971) called “Bias for Hope” in his analysis of the development process in Latin America, the transformation of labor unions in Turkey and Argentina observed in this study and the accounts given by union leaders at various levels of union hierarchy and in different sectors of activity show that change is gradual but visible. In fact, studies arguing otherwise off the bat tend to be single-case studies relying exclusively on descriptive statistics of union density, labor conflicts, and the number of collective agreements made per year. Labor unions and workers, as the entities most directly and significantly affected by privatizations, constitute a fertile ground of study to gauge the social and political effects of privatizations at the institutional and individual levels of analyses (Posusney and Cook 2000, 1). Convergent institutional changes privatizations bring about in labor unions can be categorized as structural, organizational, and functional transformations in the labor institutions. Divergent individual changes that privatizations bring about in workers’ political attitudes and behaviors can be categorized as individual, partisan or unionist, and collective.

Convergent Institutional Changes Spurred on by Privatizations The comparative histories of the development of labor in Turkey and Argentina have shown that these two countries have highly dissimilar labor institutions. In pre-Peron Argentina, the evolution of the labor unions was characterized as a bottom-up process led by a relatively homogenous group of European immigrants divided along ideological lines (Anarchist-Socialism-Syndicalism-Communism) but working toward the establishment and protection of workers’ rights. With the emergence of Peron and his ideological template of Peronism from the late 1940s onward, the Argentine labor movement and institutions have become polarized along the Peronist versus non-Peronist discourses and allegiances. Argentine labor unions have always been one of the major players in the Argentine political landscape. As for the individual workers, they have existed as long as and to the degree to which they have been union members and activists. Peronism, in this sense, has often acted as both a bulwark against increased worker mobilization and a catalyst of union-led collective action. This panorama is in sharp contrast to the sultanistic regime of the Ottoman Empire, where labor activism was hardly an issue for an emerging workforce strongly divided by acute ethnonationalist allegiances rekindled by involvement, to one degree or another,

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in consecutive world wars. The evolution of labor unions in the newly established Republic of Turkey has followed the same logic of political centralization whereby unions were established top-down by the state and with the objective of buttressing state power, and never as a counterweight locus of authority. Although the voice and political influence of unions increased temporarily in the 1970s, the military intervention of 1980 was highly effective in putting an end to labor’s brief supremacy. As for Turkish workers, their allegiance to their unions has seldom become an issue, neither for ideological nor for interest-based purposes. While Peronism unified the ideologically divided Argentine working class starting with the 1940s, Turkish labor never had a unifying leader or ideology. Instead, it was the left-right political schism that defined and shaped the emerging Turkish labor institutions in the 1950s. As a result, the Argentine labor union system evolved into a corporatist and Peronist stronghold, while its Turkish counterpart grew to be more plural and partisan. Although powerful in both cases, the state maintained a much more explicit and institutionalized hegemony over the labor unions in Turkey than it was the case in Argentina. In Turkey, the control of state was more obvious and strong than in Argentina where the state controlled the labor unions through more subtle means and always within the scheme of a sui generis corporatism. Coupled with the Peronist project of the empowerment of the working-class, which in reality meant the empowerment of Peronist unions and union leaders, the Argentine labor unions grew to be much stronger and important political actors than their Turkish counterparts, who rarely played a comparable role in the Turkish political system. In addition to the differences in their labor histories, Turkey and Argentina are hardly alike on any background criteria that could have contributed to the convergent changes observed in the evolution of their labor institutions in the post-privatizations period. Turkey is Muslim, while Argentina is Catholic. Turkey is a centralized state with a multiethnic population composed of Turks, Kurds, Zazas, Circassians, Laz, Hemshins (Armenian Muslims), Pomak, Turkmen, Arabs, Romans, Caucasians, Georgians, Bosnians, Albanians, and others. Argentina has a federal system with an ethnically homogenous population—97 percent of which are of Spanish and Italian origins. Turkey has a parliamentary system, while Argentina is a presidential system. Coupled with the disparities in the historical and institutional underpinnings of Turkish and Argentine labor movements, it is interesting to note that globalization starting with


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the mid-1980s in both countries has gone hand in hand with similar developments in their labor institutions. Privatizations have been an important factor contributing to these convergent institutional changes, which can be grouped under the following three main headings. Structure of Labor Unions: Divisions and Reticent Collaboration Privatizations have either deepened the divisions within the labor union system or contributed to the creation of new splits on the basis of the distinct responses to privatizations of different unions, or both. In Turkey and Argentina, privatizations have played a major role in the creation of the tripartite labor union systems composed of “business unions,” which explicitly and actively participated in privatizations; “traditional unions,” which implicitly and passively participated in privatizations; and finally, “civic unions,” which contested privatizations and did not participate in them. Business unions have employed tools of socioeconomic unionism based on financial strategies; traditional unions have mostly resorted to political unionism based on a mixed strategy of partisanship and pragmatism; and finally, civic unions have drawn on ideological and intellectual means of unionism based primarily on social mobilization and protest. The business unions in Turkey were those affiliated with the proprivatizations labor confederation HAK-IS. In Argentina, business unions were represented by the more independent and less traditional branch of the labor confederation CGT, or the so-called Gordos. The traditional unions that were implicit proponents of privatizations without, however, an active enrollment in them were the affiliates of the largest labor confederation TURK-IS in Turkey. The counterpart of TURK-IS in Argentina was the traditional and more loyal Peronist group of unions within the CGT, or the so-called MTA, and other Menemist unions, which opted for loyalty to the Peronist party and Peronist politician Menem. Finally, the civic unions that contested and searched for alternatives to privatizations were those affiliated with DISK in Turkey and the CTA in Argentina. In addition, the unemployed organized and institutionalized street protest demonstrations in Argentina. This brought into being an additional labor organization, the CCC. The CCC was only an indirect upshot of privatizations, however, since the rationale for its foundation as well as the objectives it set out to accomplish were only indirectly and partially related to privatizations.

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The tripartite division of the Turkish and Argentine labor systems depended mainly on their distinct reactions to privatizations. The coincidence in the patterns of fragmentation of the labor institutions in these otherwise quite different countries is interesting in itself. One other important finding of this study, however, is that each of the three groupings of labor unions also adopted a distinct approach toward democratization in their respective countries. The business unions in both Turkey and Argentina used privatizations as a means of financing social service projects for their members. As such, they equated, albeit in different degrees, their participation in privatizations and the diminishing role of the state in economics with the expansion of civil society and the private sector. The traditional unions in Turkey and Argentina used privatizations as a means of gaining easy access to information thereby questioning the actions of governments and employers. As such, they became intermediary organizations of deliberation and negotiation between the political elite, the rank and file, and the private sector. Finally, the civic unions in Turkey and Argentina used privatizations as a challenge against which to reinvent themselves as active supporters of the democratization of their respective political systems. In each of the three cases, privatizations acted as an invisible hand to promote a democratic transformation at the institutional level. Privatizations did that because they were seen (1) as a means of financing and expanding services and civic space for members of the business unions,4 (2) as a means of access to information and becoming less partisan in the case of the traditional unions, and (3) as antilabor projects to defeat in the case of the civic unions. In other words, privatizations per se do not seem to have forced the labor unions to take a sudden interest in democratization, but the implications or perceptions of privatizations unintentionally do. External Role of Labor Unions: Autonomous Negotiation and Stateness The fragmentation of labor unions based on their stand on privatizations has not meant an automatic decrease in their power. Divisions have brought a different, and not necessarily a weaker, role for the labor unions in Turkey and Argentina. Privatizations have disrupted the historically intimate and partisan links attaching the labor unions to political parties of various ideological and political backgrounds. In the case of Argentina, privatizations have played a role in shaking the Peronist links between the CGT and the Peronist governments.


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As a result, various unions affiliated with the CGT have come together to secede and to form their own alternative institutions. Such fissures and the resultant new groupings have not meant a decrease in the strength of the Peronist ideology. They have signaled instead a new era of multiplication of Peronist ideologies, whereby different groups have focused on distinct pillars of Peronism to understand and interpret it differently. The diversification and the infusion of pluralism into the Peronist template have contributed to the emergence of more open and pragmatic labor unions as more independent actors in the political decision-making processes. Privatizations have also changed the role and image of the state, which also has become more autonomous in its dealings with the labor unions. Partisanship has not disappeared between the Peronist labor unions and the Peronist governments in Argentina. It has, however, become mitigated. This has increased the autonomy of the state, which then has gained leeway in dictating the rules of the game. The game of privatizations has included the privatizing state as the “principal” or the “patron,” and the labor unions of the privatized sectors as the “agent” or the “clients.” As in Argentina, privatizations in Turkey have also changed the nature of the links between the state and the labor unions. The gradual mitigation of the partilerustu politika or the “politics of above parties (PAP)” provides a good example of the weakening partisan ties between TURK-IS and the state. PAP was a doctrine of the Turkish labor unions, used particularly by the largest and official labor confederation, TURK-IS, to pursue an implicitly political and partisan unionism. In practice, PAP signified a simple quid pro quo relationship whereby labor confederations mobilized their affiliates’ votes in order to support a given government regardless of its democratic credentials. The latter, in turn, would let union leaders govern independently while bestowing additional political and economic privileges on them once in power. Since Turkey did not have an equivalent labor ideology to Peronism, PAP could be exercised with many governments of different political affiliations, not just with one political party with a particular ideology. Privatizations shook the PAP principle of patron-client dealings between the Turkish state and the labor unions. The indignation of certain unions within TURK-IS against this confederation’s implicit acquiescence to privatizations and their subsequent regroupings to protest both privatizations and PAP can be cited as evidence. The state was powerful in both Argentina and Turkey before the privatizations. In Argentina, the corporatist system of political

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decision making was likened to “state corporatism” more so than to “societal corporatism.”5 As such, the state had substantial authority over the labor unions. Yet, labor unions still had a legitimate and a relatively strong say in the decision-making processes when compared with Turkey, where the idea of the “Father State” (Devlet Baba) persisted. Nevertheless, privatizations increased stateness in both Turkey and Argentina. This meant an increase in the capacity of the state to specify the terms of economic interaction, to extract resources, and to determine the administrative procedures (Schamis 2002, 192). Stateness meant a less patrimonialist and a more professional state in Turkey. It meant a more pragmatic and more open state in Argentina. Stateness, as such, played a positive rather than a negative role in the democratization processes of Turkey and Argentina. There is, however, a caveat for privatizations to increase stateness, and thereby contribute to the democratization processes in Turkey and Argentina. Too much increase in state power can translate into the arbitrary or personalist rule of the political leaders. Single-handed policymaking by the increasingly popular AKP government and by President (former Mr. or current Mrs.) Kirchner in Argentina would not bode well with democratization. For privatizations to contribute to democratization through stateness, it seems that a modicum of democracy, including the existence of adequate and well-functioning mechanisms of accountability, is a requirement. In other words, it appears that the democratizing effects of privatizations on labor institutions might come into effect only if kernels of effective and democratic political institutions are already in place. There is also a second caveat for privatizations to contribute to the democratization process. This concerns their contribution to the increasing autonomy of labor unions. Although the increasing autonomy of labor institutions makes them important actors of civil society, their increasing independence must not end up in the strengthening of the power of individual labor union leaders. It is a glaring fact that privatizations have not led to the turnover of the old and seemingly corrupt labor union leaders in neither Turkey nor Argentina. Much to the contrary, many of these union leaders have used privatizations to enrich themselves and build on their already substantial political power. Privatizations, therefore, should be channeled into growing “institutional” and not “personal” autonomy in order for democratization to ensue. Generational change in the ranks of union leaders and adequate mechanisms of accountability can assist privatizations in striking the right balance between stateness and autonomous unionism.


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Internal Functioning of Labor Unions: Same Organization, New Styles Privatizations do not seem to have had a significant impact on the internal workings of the labor unions either in Argentina or in Turkey. Privatizations, in other words, have not perpetuated changes in the internal organization and electoral systems of the labor institutions. This finding is important in and of itself since it challenges Fiorito, Jarley, and Delaney’s (1995) hypothesis that privatizations can bring about a more democratic internal reorganization of unions (618). The absence of change at the level of internal union elections does not mean, however, that the impact of privatizations has been nil at this level of analysis. As a result of privatizations, a new type of union leader has emerged at the local level of union representation. The new union leaders at the local union branches in Argentina were younger, more educated, less politicized, less ideological, more pragmatic, more ambitious, highly familiar with financial markets and their ups-and-downs, and often enrolled in higher education programs in tandem with their union jobs. In Turkey, the same thirst for professional unionism at the local level of representation was also present among the union leaders. I found them to be greatly involved in political and economic research activities, regardless of their union affiliation and political ideology. The need to understand privatizations and to construct more viable strategies to deal with the changing circumstances spurred on by them had brought these union leaders to forge extensive links with civil society representatives at both the national and the international levels. In addition to the emergence of a new union leader identity, “alliance systems” and traits of “new unionism” were also present in Argentina and Turkey. An alliance system or new unionism can be defined as amplified links of interaction and cooperation between labor unions and other social organizations. Increased interaction and collaboration between the labor unions and civil society imply more extensive and deeper roots of labor within local communities (Klandermans 1990, 20). Privatizations have played a considerable role in stimulating union collaboration with civil society organizations of various convictions and activities. Privatizations have pushed labor unions to establish links with various universities and other institutions of higher education for the purposes of collaborative research, publication, and the training of union members. Privatizations have also led many unions to include associations of former union members or the unemployed in their ranks. Privatizations have

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engendered interest on the part of unions in their counterparts in foreign countries in order to seek advice, collaboration, and partnerships. Privatizations have promoted extensive research and publishing activities undertaken by the labor unions on the themes of privatizations, globalization, and democratization. The strengthening of social ties between anti-privatization unions and nongovernmental organizations at the local, national, and international levels have been the defining characteristics of both the CTA in Argentina and the DISK in Turkey.

Divergent Individual Changes Spurred on by Privatizations While privatizations have resulted in similar structural, external, and internal transformations of the labor institutions in Turkey and Argentina, their effects have not reached the individual level, at least not in the short run. This study has concluded that privatizations do not seem to have a significant impact on the individual political attitude and behavior of the rank and file. In fact, both the Argentine and the Turkish workers gave one common answer to the question of whether or not privatizations have rendered them more active politically. The ubiquitous answer was no. They suggested that an individual, who is politically conscious, continues to be so after privatizations. They reasoned that privatizations constitute at best a catalyst for a temporary increase in the level of political activism of individuals. This is an important finding because it shows that privatizations per se do not contribute to changes in the nature or the level of political participation among blue-collar workers even though they may considerably alter their income level as well as their social standing in society. While privatizations do not seem to have had a significant impact on the nature or level of political activity among workers, the Turkish and Argentine workers conceive privatizations differently and react to them differently. Turkish workers negatively affected by privatizations voiced indignation, while the younger and the more educated among them mobilized to demand restitution through collective action. Their Argentine counterparts, on the other hand, voiced helplessness and isolation, with no actual or planned projects of collective action or mobilization. The Turkish workers’ positions vis-à-vis privatizations seemed to be determined by partisanship and where they placed themselves on the left-right political spectrum. The Argentine workers’ stands on privatizations, on the other hand, were very much influenced by unionismo, that is, whether they were active


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union members or not. The distinct reactions of the Turkish and the Argentine rank and file to privatizations can be grouped under three separate strategies: individual-family, partisan or unionist, and collective-social. Individual/Family Networking Solutions: Most of the workers, who lost their jobs or who were forced to seek early retirement as a consequence of privatizations, chose to resort to their families as their main source of emotional and financial support. Accordingly, the typical post-privatization activity of a retired Turkish worker was to return to his hometown in inner Anatolia and become a shopkeeper, a taxi driver, or a farmer. Since most Turkish workers had a family business or land in the cities of inner Anatolia, they already had viable alternatives of social and economic resources apart from their job in the SOEs. As for the older Argentine workers who chose the path of early retirement, they also went to their homeland in the interior of the country and invested their compensation money in a variety of small business ventures. These resulted in an explosion of kiosks, taxis, and small grocery stores in Argentina, most of which went bankrupt due to the exceeding levels of supply over demand. The workers who lost their jobs as result of privatizations seemed to be better off in Turkey than in Argentina. Some possible explanations for the difference might be found in the much higher poverty rates in Argentina (36 percent as of 2006 measured as an average of all poverty indices) than in Turkey (20.4 percent as of 2005 measured as an average of all poverty indices).6 While increase in poverty levels can be partly attributed to privatizations, Argentine privatizations ended up in much higher unemployment rates than did privatizations in Turkey, where the strategy of reallocating the downsized workers, particularly through the famous 4-C clause, dominated (See figures 6.1 and 6.2). Finally, the dominance of single-family small landholders in Turkey contributed its fair share to the mitigation of the negative effects of privatizations on workers. This was in contrast to Argentina where large estancias owned by a few rich families have constituted the main arrangement for landholding.7 Partisan or Unionist Networking Solutions: Younger Turkish workers who were downsized as a result of privatizations crafted a new strategy of using their political party affiliation as a possible source of support in dealing with the negative consequences of privatizations. They became active members of different political parties and used their connections there to recuperate jobs in the post-privatizations period.8 This innovative technique of overcoming

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D e m o c r at i c I n s t i t u t i o n s 20

300000 250000

15 200000 10

150000 100000

5 50000

Employment Unemployment

0 85 86 87 Source: Duarte (2001).

88

89

90

91

92

93

94

95

0

96

Figure 6.1 Employment and unemployment levels as a result of privatization in selected public sectors in Argentina (1985–1996). (in absolute values and percentages)

35000 Laid off workers Unaffected workers 30000

25000

20000

15000

10000

5000

04 20

02 20

00 20

98 19

96 19

94 19

92 19

90 19

88 19

19

86

0

Source: Based on the unpublished data provided by Privatization Administration in Ankara, Turkey (August 2005).

Figure 6.2 Employment and unemployment levels as a result of privatization of SOEs in Turkey (1989–2005). (In absolute values)


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the negative impact of privatizations was in perfect harmony with the main characteristic of the Turkish working class as being political and partisan. The historical account of the Turkish labor union system in Chapter 2 described the latter as weak, dispersed, and divided by political affiliations of left and right. As such, some Turkish workers used this characteristic to their advantage to cope with the negative effects of privatizations. In Argentina, the labor union system was neither weak nor dispersed. It was, in contrast, strong and centralized. As a result, many Argentine workers who were active in their respective unions, either in top positions or as floor representatives, were usually protected by the negative impact of privatizations. These workers kept their jobs and their positions within the union. This is the case for both the leftist members of the CTA, which contested privatizations, and the Peronist members of the CGT-affiliated unions, which supported and participated in privatizations. Union activism did not provide a comparable protection in the case of the Turkish workers. In Argentina, the relatively younger, more ambitious, and less ideological unionists were more than protected by privatizations. They actually used privatizations to engage in entrepreneurial activities with the political and organizational support of their unions. This was the case for the UOM affiliates in San Nicolas and the gas sector worker in Cordoba. Many of these younger unionist workers of the pro-privatization unions acquired education and training in areas as diverse as psychology, business administration, economics, human resources, and sociology. In Turkey, the tools of privatizations such as loans for small and medium enterprises (microemprendimientos, in Spanish) and outsourcing (tercerizacion, in Spanish) were not as prevalent as in Argentina as of 2005.9 Therefore, comparable accounts of the use of privatizations for workers’ individual professional success and self-improvement were not as common. Collective/Social Mobilization Solutions: This was the type of answer to privatizations where the Turkish and the Argentine workers differed the most. A group of Turkish workers decided to organize and mobilize against privatizations seeing that their unions were not taking any significant action to protect the benefits of the rank and file. As such, the social organization of the Victims of Privatizations (Ozellestirme magdurlari, OM) was born. The OM was the prime example of a vibrant and nonviolent protest movement against privatizations. It was a movement started and led by the downsized rank and file and independent of union support. Although a loose and temporary association of workers engaging in sporadic collective

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action from different regions and cities of the country, the OM was important because it was solely and directly about privatizations: it was formed after the privatizations and because of them. The OM was also the first overtly anti-union and entirely grassroots-based social movement. Using innovative methods of protest, such as mass divorces, the OM succeeded in its pragmatic goal of landing jobs in the formal market for its adherents. While smaller in size and less popular today, the links forged between the recently unemployed as result of privatizations and the now employed founders of the OM have persisted. The workers’ reactions to privatizations in Turkey and Argentina are summarized in figures 6.3 and 6.4. In contrast to the Turkish case, Argentine workers who were negatively affected by privatizations, and who did not enjoy the support

Non-Unionist

PRINCIPAL TOOL older

Family Connections

younger

Immigration

Unionist

WORKER TYPOLOGY

PRINCIPAL REACTION pragmatic

Individual

pragmatic

Individual

Left ideological All ages

Union Connections

Union-bounded protest

Peronist Union-bounded pragmatic negotations and/or Small business Renationalized Union-bounded protest

ideological

Figure 6.3 Worker typology and reactions to privatizations in Argentina: Pragmatic reasoning and union-bound action taking. PRINCIPAL TOOL

PRINCIPAL REACTION

older

Individual

Family Connections ideological

WORKER TYPOLOGY

Young

Party Connections

& partisan

Young

Clientelist political

Social Movements

& non-partisan

ideological

Collective

Figure 6.4 Worker typology and reactions to privatizations in Turkey: Ideological reasoning and collective action taking.


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of their labor unions, did not envisage forming any sort of social organization, nor did they engage in collective action to obtain compensation. The leading rationale in the mind of an Argentine worker was “In a world where even the labor unions support privatizations, what does it matter what I think or do?” These and similar responses coming from Argentine workers of various geographical, professional, educational, and ideological backgrounds attested to the still high symbolic power of the labor unions in the eyes of the workers. This was definitely dissimilar to the typical Turkish worker’s response on this same issue: “We cannot be with the unions but we cannot be without them either. Being without a union is probably worse than being a member of the worst union . . . ” It would be safe to say that in the case of Argentina, privatizations did not produce any large-scale social movement or organization on the part of workers affected by privatizations. Individual solutions for those outside the union framework and union-related solutions for those inside it dominated. The only minor exception to this trend was the Black Gold (Oro Negro, ON) movement. The ON movement was started in 2001 by the downsized workers of the former state-owned petroleum company, YPF. The main ideological template of the movement came from General Enrique Mosconi, who had directed the state-owned YPF starting in 1922. The principal objective of the movement was the renationalization of the petroleum sector. The ON became part of the unofficial labor confederation of Argentina, the CTA, as soon as it was formed. The ON, thus, became part and parcel of the Argentine labor union system. The ON experience corroborated among other things that collective solutions were possible in Argentina only within the framework of union structures. Oro Negro (ON) differed substantially from the social movement of the Victims of Privatizations (OM) in Turkey. First, the ON in Argentina came into being almost a decade after the actual privatization of the plant even though the OM in Turkey was a spontaneous reaction to the massive downsizing that was a result of the privatization of the same energy sector. Second, the ON in Argentina aimed at the renationalization of the energy sector as a whole, while the OM in Turkey aimed only at securing jobs in the formal economy. Third, the ON in Argentina quickly became institutionalized and affiliated with the labor confederation of the CTA. This is in contrast to the experience of the OM in Turkey, where the movement remained a loose and informal association of self-appointed regional leaders, distinct from the labor unions.

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Institutional Similarities and Individual Differences: Two Hypotheses This study has shown that privatizations have created highly similar changes in the labor institutions in Argentina and Turkey. These similarities can be seen in the tripartite division of the labor systems, the distinct attitudes toward privatizations held by each of the three branches, their distinct and innovative styles of participation in decision-making processes, and the emergence of new types of alliance systems and identities of union leaders at the local level of representation. More fragmented structurally, but collaborative strategically, labor unions have become more autonomous and active in their dealing with the state, the private sector and the civil society. As a result of privatizations, labor unions have also engaged in extensive research and analysis of financial markets, political systems, privatization schemes, and labor strategies. Increasing stateness, mounting social activity, and the interconnectedness of the labor unions, as well as less partisan nexuses between them and the state suggest the possible democratizing effects of privatizations on labor institutions. Privatizations have produced slightly dissimilar results on individual workers in Argentina and Turkey in terms of their responses and reactions to privatizations. Although privatizations have not culminated in increased political activity in either Argentina or Turkey, workers have reacted to privatizations in different ways in the short run. These different reactions can be seen in Turkey in the formation of the mass-based organization OM by the rank and file and devoid of union assistance, and the lack of an equivalent workers’ initiative in Argentina. Why have privatizations produced collective action and mobilization in Turkey, while they have failed to do so in Argentina? Does the lack of worker mobilization in Argentina and the dearth of longevity of Turkey’s OM point to the fact that privatizations have rendered individuals more apathetic, atomized, and thence, less democratic in the long run? The divergence in Turkish and Argentine workers’ short-term responses to privatizations cannot be the distinct implementation of privatization plans since we have already seen that the privatization programs applied in Turkey and Argentina were similar to each other in many respects. Privatizations in both Turkey and Argentina started slowly and took off with the arrival of popular political figures such as Menem in Argentina and Ozal in Turkey. These two leaders were highly similar to each other in their charismatic attributes, eclectic strategies


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of combining neoliberal tools with patron-client tactics of cooptation, reliance on technocratic style of policymaking, and their centralization of political power. In addition to the resemblence between the governance strategies of the Argentine and Turkish political leaders and their governments, privatizations were associated with increased corruption, lack of adequate monitoring, and excessive concentration of economic power in both countries as elsewhere in the developing world. Finally, the same logic of reluctance of privatizing public goods and services has dominated the political debate in Turkey and Argentina. Two possible explanations for the divergent effects of privatizations at the individual level of analysis in Turkey and Argentina can be (1) the background conditions of privatizations and (2) the dominant templates of nation building. The first possible explanaory factor, the background conditions, refers to the degree of former economic and political crises that afflicted each of the two countries. The second possible explanatory factor, the dominant nation-building project, refers to the principal frameworks of ideas that were at the roots of forming and unifying the Turkish and Argentine nations, respectively. These ideological building blocks refer to Peronism in Argentina and Kemalism in Turkey. Background Conditions: Previous Political and Economic Crises One possible explanation for why privatizations produced collective social action by the rank and file in Turkey, and not in Argentina, can be found in the divergent degree of economic and political crises experienced by these two countries before privatizations. Accordingly, it can be argued that Turkey has never had a hyperinflation in the way and to the degree that Argentina has. Nor has Turkey ever witnessed a military dictatorship whose duration, level of oppression, and brutality equaled those of the Dirty War in Argentina. In fact, the economic terror produced by hyperinflation and the political terror of the military dictatorships were two of the most frequently cited reasons by Argentine workers for their lack of reaction and mobilization against the negative effects of privatizations. By the same token, the transition to democracy and the gradual normalization of social and political relations in Argentina were other reasons cited for the recently increasing rank-and-file activity against privatizations in Argentina. The fact that Turks never saw prices quadruple minuteby-minute might have rendered them less fearful in general and more amenable to engaging in protests of privatizations than their

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Argentine counterparts. By the same token, the fact that the 1980 military coup in Turkey lasted only three years and ended with a smooth and gradual transition to democracy might have made the Turkish workers more forceful in contesting the privatizations. While the differing background conditions relating to economic and political crises might constitute a plausible explanation for why the Argentine workers did not react to privatizations in the same way the Turkish workers did, it seems problematic to measure and compare degrees of hardships felt by different populations as result of crises. After all, the real impact and intensity of economic crises is hard to measure. This is because crises are perceived differently by members of different societies due to their divergent past experiences and future expectations. It might thus very well be that Turks perceived the relatively milder economic crises in the pre-privatizations period in Turkey as negatively as Argentines experienced the hyperinflations in Argentina. In the same vein, the fact that Turkey did not witness the equivalent of a Dirty War in the last 1980 military intervention does not mean that the long political history of the country is devoid of accounts of oppressive regimes and brutal episodes. Dominant Nation-Building Templates: Kemalism versus Peronism The second possible explanation for the divergent impact of privatizations at the individual level of analysis can be found in the dominant national ideologies and their impact in Turkey and Argentina. The Turkish nation-building project started with Mustafa Kemal Ataturk and the seeds for Kemalist ideology in the 1920s.10 The Argentine project of national unification and development, in turn, awaited the emergence General Juan Domingo Peron and his Peronist ideology in the mid1940s. While Kemalism consisted of the building of a secular nationstate on the ruins of a theocratic empire, Peronism concerned the rearrangement of class power between the rich ruling landholders and the poor masses of workers. Accordingly, Mustafa Kemal was dubbed the First Turk (Ataturk) by the emerging nation of Turkey. As for Peron, he was named the First Worker (Cavarozzi 1988, 6). Kemalism and Peronism are hardly comparable phenomena. This is because they happened in different periods of history, and therefore, were subject to dissimilar international circumstances. Kemalism was born in the aftermath of World War I and Peronism emerged after World War II. Kemalism and Peronism have one point in common, however: they both have shaped the soul and identity of their


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respective nations and state institutions. Today, in almost all government institutions, there is a portrait of Mustafa Kemal Ataturk as the liberator and founder of modern Turkey. By the same token, most Argentine government institutions display on their walls portraits of General Peron and his wife, Eva Peron, who also was greatly involved in charity and social work. Peronism has molded the national and popular conscience while reshaping the meaning of what it is to be an Argentine (Surra 2003). The six principles of the Republican Peoples Party (Cumhuriyet Halk Partisi, CHP) founded by Ataturk also have formed to a great extent the Turkish national identity.11 At the very least, Peronism and Kemalism have determined the national discourse for decades, and probably centuries, to come in their respective countries. From an economic perspective, although both Turkey and Argentina adhered to a statist developmental model until the advent of neoliberalism in the mid-1980s, Ataturk and Peron’s conceptions of statism differed. Ataturk’s statism (Devletcilik) was about keeping private enterprise as the most important economic unit while having a state-controlled economy in the interim (Aysan 1982, 85). This type of statism required the state to gradually de-nationalize government companies so that balance could be maintained between government and private enterprises (106). The ultimate goal was economic development, which Ataturk deemed indispensable for achieving complete political independence (104). Peron’s statism, on the other hand, required state to maintain harmony between capital and labor. Economic development was not a goal in itself but only a tool for achieving the happiness of Argentines toward “accomplishing the greatness of the Nation.” With that aim, “the state and organizations of the people were to promote the nationalization of public services” (Podesta 2004, 310). Differences between Ataturk and Peron vis-à-vis economic development were substantial. Their divergences vis-à-vis political development were even greater. Ataturk wanted, first and foremost, to build a secular and modern nation. He pursued Republicanism and the institution of an efficient party system as his main strategy of modernization. In fact, Kemalism itself as an ideology was very much an ex-post invention of the scholars of Turkish politics. Ataturk himself did not intend or work to establish an ideology, but institutions (Giritli 1980, 1982a and 1982b). He said The Republic of Turkey does not have a religion. Government decisions, laws and all official deeds shall be done according to the

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principles and requirements of positive sciences. Separating religion from mundane affairs is indispensable to attain the level of modern civilizations. (Kocaturk 1999, 68)

Peron, on the other hand, wanted Argentina and Argentines to follow his “third way.” To understand and follow Peron’s “third way,” one had to be a Peronist. Peronism was a personalist movement against the institutionalization of any type of power blocks other than the Peronist CGT. Peron pursued the ideals of an organized community and the establishment of a strong, centralized, and Peronist labor union confederation as his main strategy for reorganizing society. He said The world has offered us two possibilities so far: capitalism and communism. The alternative means for the efficient conduct of government affairs is the Christian way that is nonpolitical, national and social. This third way requires one to say no to the Yankees as well as to the Marxists . . . It requires one to be Peronist. (McGuire 1997, 301–302)

As two great political leaders of the twentieth century, Ataturk and Peron had very different goals and institutional projects in mind: Ataturk believed in political institutions and political parties as the main engines of political and economic development. He therefore established the CHP as well as the TBMM even before the Turkish War of Independence of 1919–1924 was over. Opposition parties sprang up as early as 1924. Ataturk encouraged the founding of loyal opposition parties that would not contest the defining features of the new Turkish Republic, particularly secularism and republicanism (Zurcher 1993, 186). Though imperfect, the basics of a procedural democracy, such as periodic elections, political parties, and a national parliament, were formed and left in place by the single-party rule of the CHP. A largescale mobilization of the population was never attempted (ibid., 194). Peron, in contrast to Ataturk, relied mainly on the mobilization of the masses of Argentine workers for his project of rebuilding Argentina. His nation-building project was about changing the parameters of the power equation determining the respective place and status of social classes within the Argentine society. Peron aimed at the empowerment of the working class to the detriment of the rich, landed aristocracy and the authoritarian military. To this aim, he relied on social and political mobilization and not institutionalization. He voiced his dislike of institutions and of political parties on many occasions. He said “The Peronist movement is not a political party; it


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represents no political groupings. It is a national movement . . . We represent only national interests . . . The Peronist party exists only to give spirit to the movement” (McGuire 1997, 64–65). Peron’s view of political parties as obsolete organizations did not mean that he was against all type of institutions. He thought labor unions and not political parties were to be the leading organizations in politics. He said “Unions, just like families, spring almost from natural law . . . We still have a Peronist party because political parties are a prejudice beyond which we have not evolved” (ibid., 53, 64). It was no surprise, therefore, that Peron exercised complete control over the Peronist party. He could modify or annul the decisions of the party, and inspect, intervene, and replace its constituent bodies at will (McGuire 1997, 62). By 1950, the CGT in Argentina had formally become synonymous with the Peronist party itself. As Peron himself said “These days you win elections like ours with unions, not political parties” (McGuire 1997, 63). Peron used the CGT and the national unions to mobilize support for elections and dispense welfare benefits. He established tight, organic links between a “patron state” and its “client CGT.” To receive benefits, workers had to become affiliated with unions that were affiliates of the Peronist CGT. Any anti-Peronist union or union leader was banned from the CGT, and thereby declared illegal. Any union that did not comply with the state policy, that is, with Peron, was subject to intervention. Intervention implied the loss of the right to sign collective agreements, the freezing of bank accounts, and/or the replacement of union leaders with government-appointed trustees. Things were very different on the other side of the hemisphere. To quell opposition, Ataturk often resorted to institutional means, such as courts and the promulgation of laws. Ataturk never envisaged calling the CHP he founded with his own name or identifying it with his persona. Ataturk’s emphasis on political parties and disciplined party systems are in stark contrast to Peron’s favoring of labor unions and union systems. Ataturk’s project of secular modernization and a veneer of democratization involving elections and political parties during the initial authoritarian phase of the Turkish Republic (1923–1946) stand out against Peron’s project of the mobilization of the working class using loyal and dependent labor unions as his main instruments. This institutionalist versus movementist contrast also provides important clues on the idiosyncratic evolution of the national psyche among Turks and Argentines in decades to come. Accordingly, political parties were the most important institutions in the Turkish political

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system. Therefore, Turkish workers might have seen political parties as the main institutional decision-making hubs in dealing with privatizations. When confronted with privatizations, they might have used the institutional mechanisms of interest aggregation and representation via political parties akin to their ideological and political affiliations. Accordingly, it might have been easier for Turkish workers to envisage and create a protest movement without their unions’ support because labor unions were never really the issue in Turkey. The more educated and the more partisan the Turkish worker was, the easier it became for him to engage in some sort of (collective) action against the negative effects of privatizations. In Argentina, on the other hand, labor unions have always been one of the most important and political organisms. Accordingly, it might be the case that the Peronist nation-building project in Argentina pushed Argentine workers, almost unconsciously, to turn to their unions when confronted with privatizations. Given these conditions, collective action devoid of union support might have been harder to envisage in Argentina. This would explain why the level of education and partisanship were not significant variables in determining workers’ attitudes vis-à-vis privatizations; unionismo was.

Some Implications for Further Research It is an utterly complex task to pin down the direct and separate effects of privatizations apart from the rest of the restructuring reforms entailed by globalization. It is equally hard to conceptualize, operationalize, and measure democratization. This book attempts to overcome these difficulties by focusing on labor unions and workers as important actors of democratization and the most direct targets of privatizations. By comparing labor institutions and individual workers affected by privatizations in different degrees, and active in different sectors of activity and across countries, a modest attempt is made to understand the effects of globalization on democratization. The variety of research methods used, including questionnaires, in-depth interviews, focus groups, and descriptive statistics, attempt to find preliminary answers to the question of the social and political impact of privatizations. The findings of this study about the effects of privatizations on democratization, however, stay as hypotheses at best. For starters, a view of democratization as institutional adaptation, based on the principles of cooperation, autonomy, and stateness, and as individual activism based on the principles of collective action and political participation is rather limited. Democratization is also about political parties and elite politics


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such that the acts and actions of labor union leaders can be more relevant than the structures and workings of unions and the attitude and behavior of workers. The assumption that democratization is inclusion of local voluntary efforts independent from and along with centralized and professionally managed institutions has shortcomings of its own.12 Second, although this study has done its outmost to include workers from all spheres of society and life, a selection of focus group participants based on their union affiliation and sectoral activity can by no means allow for sweeping generalizations on the social and political impact of privatizations in the global era. Relying on networking and waiting in front of the previously privatized firms to randomly request workers to participate in focus groups can inject “science” into the selection process only to a certain degree. That is why we cannot off the bat assume that the ways in which workers have dealt with privatizations as outlined in this study are the only and exlusive responses to privatizations in Turkey and Argentina. Nor can we maintain that privatizations alone have been responsible for the visible resemblance in the ways in which the Turkish and Argentine unions have dealt with privatizations. The apparent tendencies and links that this study has posited, therefore, purports to open the way to further research on the social and political consequences of neoliberal policies on targeted societal groups. Third, the fact remains that economic globalization or neoliberal structural adjustment plans cannot be reduced to privatizations alone. Although studying privatizations as a proxy for economic globalization implies a wider perspective than equating it with, say, McDonaldization (Ritzer 2004), everybody knows that globalization is so much more than either a specific group of policies, like privatizations, or the growth and reach of one multinational for that matter. In the world of labor, globalization implies changes in the working conditions, work rules, subcontracting, precarization of the workforce in and outside the privatized state enterprises, and overall conditions in international markets that have incited a plethora of labor responses around the globe (Pion-Berlin and Epstein 2006). The post-2001 crisis in Argentina has produced the piquetero movement and the Asembleas Populares where workers have been active as vociferous critiques of neoliberalism. This study, however, in its targeted focus on the effects of privatizations, and not the overall currents of globalization, was unable to detect a link between these sporadic movements and privatizations per se. Fourth, different sectors of activity that have undergone privatizations abide by different logics of implementation and dissimilar

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constraints. As such, a sector-wide comparison suffers from similar predicaments as those associated with a ceteris paribus assumption. The same limitations dog the choice of ideological/rational and unionsanship/partisanship criteria concerning the categorization of worker responses to privatizations since the value spectra of workers around the world are much more complicated and can involve various other degrees and shades between such extremes. As Nancy Powers (2001) concludes as a result of her in-depth interviews with about 40 residents of Buenos Aires, the Argentine people express their material interests not in terms of their quantitative possessions and needs but in terms of constraints on opportunities and constraints on choice (11). But then again, Powers’ study proves as impotent as this one when it comes to making generalizations to the Argentines as a whole based on a small-N study. Finally, although the most different systems design generates important findings about the convergent effects of privatizations at the institutional level of analysis, a generalization to the developing world based on two cases alone is problematic. But then again, what this study attempts to do is not to generalize its findings to the developing world but to delve into the explicit and implicit causal links between privatizations and democratization. As such, while the sometimes not so obvious causal linkages are unearthed from the personal accounts and confessions of workers and union leaders, this study also hopes to open a whole new avenue of research for students of development and democratization regarding the posited links between the differential effects of privatizations and democratization. What are the links that this study posits between privatizations and democratization? The two general categories of potential links are (1) the role of privatizations as an invisible hand of democratization in the case of labor institutions and (2) the lack of any significant long-term impact of privatizations on individual workers.13 The comparative analysis of the Argentine and the Turkish cases of privatizations and labor developments has shown that privatizations are likely to contribute to increased plurality, tolerance, openness, and autonomy of the labor unions, leading some to demand democratization, directly and explicitly, and for the very first time. The involvement of labor unions in research and civil society activism14 as well as their adopting a more professional attitude in their dealings with the government and the private sector are some of the other mechanisms that seem to link privatizations with democratization. Interestingly, unions acquire these characteristics and engage in such activities, not only because


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of privatizations but against them. Privatizations, therefore, seem to unintentionally produce democratization at the institutional level. While privatizations and democratization are connected to one another, parallel developments that suggest the reverse are also present in Turkey and Argentina. This refers to the dominating power of structural rules and legacies against change spurred on by privatizations. The fact that the pro-democracy CTA recently applied for the personeria gremial, which it had long contested as an authoritarian practice, is a good example. The continuing legacy of the “Father State” in Turkey is another one. These continuous legacies and practices show that the democratizing effects of privatizations on labor institutions may not suffice to change decades long habits and practices at one stroke. It is important to detect and analyze the changes in labor insitutions brought about by privatizations. It is, however, equally vital to understand the individual worker responses to privatizations and to listen to their voices (Ranis 1991). This study’s finding that privatizations do not necessarily elicit collective action or increased participation on the part of individual workers in the long run, underlines the importance of historical legacies in social and political development. Accordingly, the Peronist and Kemalist nation-building projects and their respective emphasis on labor unions and political parties as the drivers of political change might have contributed to the divergent short-term reactions of workers to privatizations in these two countries. As a final word of caution, there seems to be at least three caveats for privatizations to positively contribute to democratization. One is the condition that the institutional power of the unions not be captured by the personalistic rule of the union leaders. This means that the increasing independence of labor unions as institutions should not merely equal the rising power of individual union leaders in them. Second is that the increased capacity and autonomy of the state, that is, stateness, as result of privatizations does not translate into the overly increased personal power of politicians. Third caveat for privatizations to contribute to democratizations is for individual workers and marginalized citizens to be effectively and gradually incorporated into the sociopolitical system. Clearly, privatizations are an important facet of economic globalization and influence democratization in myriad ways in different parts of the world. While this study has attempted to inject a modicum of order to this brouhaha of links and consequences, it has also demonstrated

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the validity of the dictum that democratization projects are ubiquitously and consistently political. Only a few would disagree that the Turkish process of democratization entails principally the project of accession to the European Union, including above anything else an improved record of human rights. Reciprocally, there is consensus among scholars and practitioners alike that the Argentine process of democratization mostly concerns the repudiation of military regimes and the divulgence of crimes committed by them. That is why privatizations are doomed to be the indirect and less significant factors in democratization, but factors nevertheless in an ever-globalizing world.

Notes Introduction 1. Clearly, there is an endogenous relationship between privatizations and democratization. This should not, however, preclude the analysis of causality, given that endogeneity is clearly acknowledged. For more on endogeneity, see Keohane, King, and Verba (1994).

Chapter 1 1. This study focuses only on industrial, service, and energy sectors, thereby omitting less prevalent, more recent, and controversial privatizations of social security, pension plans, education, and banks. 2. O’Donnell and Schmitter (1986) define liberalization as “the process of making effective certain rights that protect both individuals and social groups from arbitrary or illegal acts committed by the state or third parties” (7). 3. These scholars are transitology literature scholars, such as O’Donnell and Schmitter (1986) and Przeworski (1995). 4. Political opening here means liberalization. 5. Consulta Popular is a participatory tool whereby people living in a town or district come together to decide on a vital political, economic, or social issue that affects them all. See http://www.fmmeducacion. com.ar/Historia/Cacerolazos/077consultapopular.htm 6. Asambleas Barriales refer to spontaneous groupings of members of a community in village or city centers or in corners of streets to debate the social and economic problems that afflict them. For more, see Bloj (2004). 7. La Asociacion por una Tasa a las Transacciones Financieras y Ayuda a los Ciudadanos is a movement that originated in France toward the end of 1998. It fights against speculative global investment. For more information, see http://www.argentina.attac.org/. 8. Dialogo 2000 is an interregional organization that works to cancel external debt, eliminate poverty, and enforce human rights and peace. For more information, see http://www.dialogo2000.org.ar/marcos1.htm 9. The World Social Forum was created to find an alternative road to sustainable and equitable development. It refutes neoliberal globalization and provides an open platform for debate against the International

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10. 11.

12.

13.

14. 15.

16. 17.

18.

19.

N ot e s Monetary Fund and the World Bank. For more, see http://www. forumsocialmundial.org.br/index.php?cd_language=2&id_menu= See http:// laborsta.ilo.org/cgi-bin/brokerv8.exe Union density and unionization rates can also be used for comparison of worker and union activity in the pre- versus post-privatization periods. The data on union membership across countries, however, are hardly comparable since data collection methods and reliability remain issues of concern. Union density has decreased considerably in Argentina, from 65 percent in 1985 to 29 percent in 2007, as opposed to a meager decline in Turkey, from 61.5 percent in 1985 to 58.6 percent in 2008. (Data obtained from International Labor Organization’s World Labor Report 1997–1998 and the respective sites of Labor and Social Security Ministry of Turkey and Argentina.) Focus groups entail observing the interaction and recording the conversations of a specific group of people. The researcher asks one or two specific questions and leaves the discussion to follow its own course (Morgan 1997). King, Keohane, and Verba (1994) argue that observations should not be selected on the basis of the dependent variable (108–09) since this practice might lead the researcher to pick only those cases and values that prove her hypothesis. This guideline, borrowed from statistical reasoning, was contested by other social scientists such as McKeown (1999) and Collier and Mahoney (1996). These and other scholars rejected the logical positivism adopted by King, Keohane, and Verba (1994) and supported the opposite idea that a lack of variance in the dependent variable does not inherently pose a selection bias problem if the research objective is to capture heterogeneous causal relations. This approach is usually adopted by economists, including Jeffrey Sachs (2005). Sociological New Institutionalism focuses on the impact of norms, cultural beliefs, and traditions on organizations and individuals. Fore more, see Thelen (1999). Some examples are to be found in Farazmand (2000), Birch and Haar (2000), and Suleiman and Waterbury (1995). There are various definitions and types of learning. Here learning is defined as a process in which individual learning interacts with social and political dynamics to become an important part of an organization. For more on learning theories, see Bennett (1999, 75–112). Focus group with the Union of Metallurgy Workers (Union Obrera Metalurgica, UOM) worker representatives in San Nicolas, Argentina, June 2006. Interviews with Dr. A. Monsalvo, lawyer of UOM, Buenos Aires, Argentina, May 2006 and Jorge Sappia, the former minister of labor of Cordoba, Cordoba, Argentina, July 2006.

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20. Interview with Mehmet Kilic, section leader of the Union of United Metallurgy, affiliated to DISK. Bursa, Turkey, August 2005. 21. These are rich CGT leaders in banking, commerce, and energy sectors in Argentina. 22. Yellow unionism refers to secretly cooperating with private employers and the government. For more, see http://www.emep.org/trade/ Brochure.html 23. The voluntary retirement packages (Retiro Voluntario) consisted of high sums of monetary compensation given to workers who were dismissed as a result of privatizations. Although voluntary in name, employers and the government used various tools of coercion, such as psychological pressure, to make the workers leave. 24. This was not the case for the non-Peronist leftist workers affiliated to the CTA and the CCC. 25. The picketers (piqueteros) are unemployed protesters. For more, see http://www.americas.org/News/Features/200202_Argentina/ 200202index.htm The cardboard collectors (cartoneros) are the unemployed in Argentina who try to make a living by sorting through the day’s trash in search of recyclable material that can be exchanged for money. For more information, see http://www.worldpress. org/photo_essays/cartoneros/cartoneros.htm Recuperated factories (fabricas recuperadas) refer to those plants and workshops whose private owners declare bankruptcy and leave the plant. Workers, who then refuse to leave, continue with the production process. To learn more, see http://www.nodo50.org/derechosparatodos/EmpRecu/ Home_empresas.htm 26. Interview with the secretary of education and mobilization, Etgardo Hollstein, UOM, San Nicolas, Argentina, June 2006.

Chapter 2 1. Parts of this chapter were taken from the unedited version of my article published in the Journal of Turkish Studies by Taylor and Francis. See Blind, Peride Kaleagasi. “A New Actor in Turkish Democratization: Labor Unions,” in Turkish Studies 8, 2 (Fall 2007): 289–311. 2. New Institutionalism is an approach, which puts emphasis on the independent and enduring effect of institutions on individual action. See March and Olsen (1984). 3. For more, see Sunar and Sayari (1986). 4. For more on Ataturk’s reforms, please see Renda and Kortepeter (1986). 5. Fore more on single-party rule in Turkey, see Ozbudun and Kazancigil (1981). 6. For more on the multiparty system in Turkey, see Sayari (2002). 7. For more, see Sayari (2002) and Keyman and Onis (2007).

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8. Although resembling a burgeoning aristocratic class, ayans could never establish private property on land. Ayans were provincial notables who had private armies of mercenaries and slaves, which they sometimes lent to the palace as additional military force in return for recognition of their autonomy by the sultan. For more, see Pamuk (2005). 9. While this categorization is necessary for analytical purposes, it is also subjective. The 1980 military coup, for instance, also constitutes a very important break in the history of labor developments. 10. In this system, peasants were not serfs nor were the “timarlı sipahis” the equivalent of landlords. Peasants never attended to the personal needs and demands of the sipahis, nor were the latter entitled to any portion of the peasants’ produce. 11. Ahi means generosity and brotherhood in Ottoman. For more, see Cagatay (1981). 12. Traditional baggy trousers worn in the Middle East. 13. Some argue that the labor organization in question was founded in 1854. Others consider another labor organization called the Ottoman Association of Friends of Workers (Osmanlı Ameleperver Cemiyeti, OAC) to be the first. Nor is there consensus on whether the latter was a union-like institution or a charity organization established by intellectuals who cared about workers’ problems. Still others claim that it was a Marxist organization (Erdinc 2003, 73). 14. The DIU was composed of European and Ottoman politicians overseeing the collection of the external debt owed by the empire. 15. A nonmetallic element extracted chiefly from kernite and borax and used in abrasives and hard metallic alloys. 16. The Young Turks can be considered as the first national entrepreneurial class in the history of the Ottoman Empire. For more, see Mardin (1983). 17. Turkey declared war on Germany one day before the war ended. 18. This amounts to 84 cents in 2006 US dollar terms. 19. The CHP and the DP were not the only political parties of the 1950– 1960 era. The Socialist Workers and Farmers’ Party of Turkey (Turkiye Sosyalist Emekci ve Koylu Partisi, TSEKP) and the Socialist Party of Turkey (Türkiye Sosyalist Partisi, TSP) helped establish countless unions in this period. A few independent unions came together to form the first Workers’ Party (Isci Partisi, IP) in 1953 (Sulker 1987, 118). 20. Internal factors also played a role in the formation of TURK-IS, albeit to a lesser degree. Rivalry between the CHP and the DP was important in determining the emergence and evolution of the confederation later on (Gungor 2002, 173). 21. Information agency organized in 1947 composed of Communist parties of Bulgaria, Czechoslovakia, France, Hungary, Italy, Poland, Romania, the Soviet Union and Yugoslavia. 22. The check-off system refers to the automatic deduction of union fees from the paychecks of member workers.

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23. The YHK had all the decision-making power for cases where collective bargaining failed in workplaces. The YHK was composed of three groups. The first group included a politician from the Ministry of Labor and Social Security, an academic working group on labor or economics and an independent judge. The second group comprised two union representatives selected by the biggest confederation. Finally, the third group was formed by two representatives selected by the biggest employers confederation and two SOE representatives selected by the Cabinet. 24. A social democrat in the Turkish context refers to a person who believes in democracy and market economy while, at the same time, working to embrace social welfare and justice as important elements of the political system. 25. The AP (1961–1980) was a political party founded in 1961 by the DP’s lower echelons. After the 1980 military intervention, the AP was dissolved. See http://www.bookrags.com/history/worldhistory/ adalet-partisi-ema-01/ 26. MISK and HAK-IS were perceived as possible alternatives to leftist unionism, and thus, were easily acquitted. MISK gradually lost its members to TURK-IS and was dissolved in 1988. HAK-IS became the second largest confederation of the country after the coup due largely to the banning of DISK (Genis 2002). DISK union leaders had to wait for a 1991 decision of the military Supreme Court of Appeal (Yargıtay) to be acquitted. 27. This clause was canceled in 1986 when the state of siege was lifted (ibid.). 28. This clause was changed to “currently working” in 1988 (ibid.). 29. The maximum of four consecutive terms for the secretary-general was changed to eight terms in 1988 (ibid.). 30. In 1988, it was added that in order for a transfer of property to take place, prior consent from the General Assembly of the union in question should be obtained (ibid.). 31. A change in law no. 2822 in 1986 made the 10 percent requirement more anti-democratic. If a union was under the threshold, it was banned from rejecting or questioning other unions’ applications for representation (ibid.). 32. Turkey introduced an extensive package of Constitutional changes in September 2001, including but not restricted to the areas of freedom of expression and association. These and other liberalization efforts toward joining the European Union have also benefited the democratic development of the labor movement. See Beris and Gurkan (2001). 33. Despite significant advances on union freedoms, Parliament was unable to ratify the ILO Convention no. 158 due to the lack of unanimity. Contradictions between the 1982 union laws (no. 2821 and 2822) and the ratified ILO Convention no. 87, the Liberty of Unions and Protection of the Right to Unionize, stayed. These contradictions

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referred to the banning of union offices in workplaces, the requirement that union leaders be de facto workers for ten years and never arrested for participating in strikes, the banning of union activities deemed to be political, the double threshold system for collective bargaining and the transfer of union property to the Treasury upon closure. 34. The Peace and Democracy Platform is a civil society initiative formed by a group of intellectuals having a common belief in democratic values and peace. See http://www.evrensel.net/02/09/25/sendika.html 35. Additional research is needed on the question of why these two years deviate from the general pattern. Since 2001 and 2002 coincide with the peak of privatizations, the relationship between the latter and collective agreement making constitutes a research project on its own.

Chapter 3 1. Caudillos were owners of large estates who rose to power once they assembled gaucho armies. Gauchos were cattle herders, similar to North American cowboys. See Lynch (2001). 2. Capitulations were economic and administrative rights and privileges accorded to Europeans on a unilateral basis. 3. While this categorization is necessary for didactic and analytical purposes, it is also arbitrary. The 1976 military coup, for instance, also constitutes an important milestone in the history of the Argentine labor movement. 4. Estancieros were owners of large estates. 5. For more, see Diaz (1999) http://www.po.org.ar/po/po616/ a80aosde.htm and Godio (1972). 6. The Communist Party was formed in 1918 and disappeared by the 1930s (Di Tella 2003). 7. Not all unions were protected by Peron. The Argentine Confederation of Catholic Workers (Confederacion Catolica de Trabajadores Argentinos) went out of existence during Peron’s reign for not following his lead (McGuire 1995). 8. Argentine Presidential Palace and the heart of the executive power. 9. Some authors have described the Argentine labor movement as a variant of societal corporatism. See Acuna (1995) for such an account. Others have characterized it as statist and less than democratic. For such an account, see Goldín (2001). 10. Other sources of funds for unions were membership dues deducted automatically from workers’ paychecks by employers and paid directly to the unions’ national headquarters, direct contributions to the national headquarters of a certain amount of the wage increases obtained in national collective agreements, and services run by unions, such as vacation resorts and special medical facilities (Munck 1987).

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11. The PAP was a strategy of survival that signified maintaining friendly relations with the governing party or coalition of parties, regardless of the latter’s political leanings, democratic character, or workers’ interests. See Chapter 2 for more on PAP. 12. Both organizations were named after the streets on which their respective headquarters were located in Buenos Aires. 13. The Montoneros were a group of Peronist students founded in 1955 and implicated in the assassination of the military personnel and the union leaders who cooperated with the military. For more, see Novaro 2006. 14. The Malvinas Islands in the South Atlantic have been a British territory for more than 150 years; the Argentines have disputed British sovereignty. See Kanaf (1982). 15. Alfonsin’s labor reforms included measures such as the introduction of proportional representation in union elections and a reversal of the top-down union electoral processes such that elections would first take place in shop committees, then extend all the way up to the union and CGT executive leaders. Alfonsin also envisaged treating certain socioeconomic questions as matters of utmost urgency and crisis, so that the government could have complete power of legislation over those areas. The reform package was defeated in the Peronist-controlled Senate (McAdam, Sukup and Katiz 1999). 16. Personal Interview with Dr. Osvaldo Battistini. CONICET June 1, 2006, Buenos Aires. 17. Personal Interview with Gabriel Martinez, secretary of public relations, Federation of Workers of Energy of the Republic of Argentina (Federacion de los Trabajadores de la Energia de la Republica Argentina, FETERA). June 2, 2006, Buenos Aires. 18. Salariazo was Menem’s campaign promise that all wages would be increased. 19. The scope and extent of social services administered and provided by unions were also reduced starting in 1998. In 1996, there were 300 national social works (obras sociales) of which 200 were union provided, covering 22.8 percent of the population. The decrease in the number of affiliates also correlated with the decline in unionprovided social services since worker contributions decreased alongside the wages (Novick 2001, 34). 20. This refers to contracted workers who are not members of any union. 21. With the reform of the social security system in Argentina, employees could now elect to remain in the old allocations system or have their contributions, equal to 11 percent of their salary, deposited and managed by private funds known as Retirement and Pension Fund Administrators (Administradoras de fondos de jubilaciones y pensiones, AFJPs). For more, see (Demarco and Maciel 1996). 22. Interview with the secretary-general of the Union of Railway Workers, Jose A. Pedraza. June 2, 2006, Buenos Aires.

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Chapter 4 1. Parts of this chapter were taken from the unedited version of my article published in the Journal of Turkish Studies by Taylor and Francis. See Blind, Peride Kaleagasi. “A New Actor in Turkish Democratization: Labor Unions,” in Turkish Studies 8, 2 (Fall 2007): 289–311. 2. For more on the economic reforms in the early Republican period, see Barkey (1992). 3. Some scholars argue that statism is not, and has never been, an entrenched ideology in Turkey. For such an account, see Patton (1992). Others maintain that the statist mentality was one of the determining factors in the sluggish pace of privatizations in the 1990s. For more, see Shaker (1995). 4. Economic restructuring was not the only item in the agenda of the military. More important were the elimination of old political loyalties and extremist groups. See Nas and Odekon (1988, 1992). 5. In this regard, Eder (2003) went as far to argue that Turkey evolved toward a corporatist system where business and labor representatives would occasionally meet to discuss the needed reforms. It should be remembered, however, that this consultative experience refers to a very brief period in the history of the Turkish privatizations. 6. For more, see http://www.oib.gov.tr/baskanlik/yasal_cerceve.htm 7. While this is the opposite objective of the Argentine privatizations, it would not be too long before revenue generation becomes the primary objective in Turkey as well. 8. Privatizations really started with a trial case in 1986 with the issuing of the Revenue Sharing Certificates for the Bosphorous Bridge connecting the European to the Asian Continent, and the Keban and Oymapınar Dams. The method of Revenue Sharing Certificates was chosen to learn about the public stand toward privatizations and to attract the support of middle class by involving them in the process and turning them into share owners. The results showed that the Turkish public was in favor of privatizations. 9. The SPO develops and manages the investment programs of the state. For more, see http://www.dpt.gov.tr/dptweb/turkin.html 10. Decree making considerable fastened the implementation of privatizations. As a result, the privatization of electricity sector was completed in three months while that of the gas sector took less than five months. Decree making did not have the same effect in the privatization of the social security system, however, due to the more conflictual nature of this project. For more, see Alonso (1998). 11. The law prepared the legal ground for the implementation of privatizations. It expanded the scope of the SOEs to be privatized. It established the Privatization High Council and Privatizations Administration to centralize the process. It allowed those workers subject to civil servants law 657 to be transferred to other government

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13. 14. 15.

16. 17.

18. 19.

20.

21. 22. 23.

24.

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institutions following privatizations. It also initiated a severance package for the workers working under temporary service contracts and covered under labor law 1475, which was replaced with labor 4857 in 2003 (Yildiz 2002). Economic neopopulism is when the government is able to maintain its monetary base and reserve levels as required by law, as it simultaneously increases public spending. For more on economic neopopulism, see Palermo (1998). Detailed interviewee list can be obtained from the author upon demand ([email protected]). Confidential personal interview. Istanbul: August 15, 2006. Despite significant advances in union freedoms, the coalition government was not entirely successful in its democratization program. The ILO Convention no. 158 on job security was returned to the Parliament by the President. The Parliament was unable to ratify it due to a lack of unanimity. Contradictions between the 1982 union laws (no. 2821 and no. 2822) and the ratified ILO Convention no. 87 on the Liberty of Unions and the Protection of the Right to Unionize remained. Personal interview with Salih Kilic, secretary-general of TURK-IS. Istanbul, August 2005. Personal interview with Tugrul Kudatgobilik, the secretary-general of the Turkish Employers Confederation (Turkiye Isveren Sendikalari Konfederasyonu, TISK) and the secretary-general of the Turkish Metal Industrialists Union (Turkiye Metal Sanayicileri Sendikasi, MESS). Istanbul, August 2005. Salih Kilic, secretary-general of TURK-IS, refers to employers as the “mother,” and unions, as the ‘father’ of workers (TISK 1995, 69). CGT-San Martin in Argentina and its subgroup, the Movement of Argentine Workers (Movimiento de los Trabajadores Argentinos, MTA), have also adopted similar strategies. The Turkish left-wing daily Evrensel defines “yellow unionism” as a type of union strategy whereby union leaders get into a close and dependent relationship with employers. Personal interview with Suleyman Celebi, secretary-general of DISK. Istanbul, August 2005. HAK-IS’ formation in 1991 coincides with the implementation of privatizations. The success of the privatization of Kardemir is debatable. Some scholars see it as a success story, pointing out the modernization of its technology and profitability (Bakan, Erarslan and Sarac 2002). Others draw attention to the continuing subsidies from the state for ensuring the survival of the company (Yilmaz 2005). The domination of the media by large national private owners, who were also active participants in the privatizations, might have had a role in media’s reactions against the involvement of labor unions in privatizations.

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25. The practice of transferring workers downsized as result of privatizations to government agencies around the country has meant a busy traffic of migration from region to region and city to city in Turkey. This has created problems of social and cultural adjustment. 26. Personal Interview with Osman Yildiz, advisor to the secretarygeneral of HAK-IS. Ankara, August 2005. This is similar to the labor university project of UOM in San Nicolas, Argentina. The Federation of Light and Power (FATLyF), active in the energy sector in Argentina, already has a labor university where workers and others can attend for training in union management and other labor-related matters. Personal interview with Hugo Giarelli, secretary of funds and finances of FATLyF. Buenos Aires, June 2003. 27. Personal interview with Mustafa Oztaskin. secretary-general of the Union of Petroleum Workers (Petrol-Is) Istanbul, August 2005. 28. The Platform was revived in 2000 under the name of Platform of Labor (Emek Platformu). 29. Labor Force Questionnaire can be provided by the author upon demand. The qualitative methodology of nonrandom sampling is appropriate for the research question of this study because I expect the responses of workers to privatizations to be strongly correlated with their labor confederation affiliation. That is why I chose the focus groups on the basis of (1) labor confederation affiliation and (2) impact of privatizations. Accordingly, the four out of five sectors comprised by focus groups, namely, the petroleum, maritime, cellulose, and tobacco sectors, were largely influenced by privatizations. The control group of automotive sector was not. Three out of five focus groups came from the largest labor confederation in Turkey, TURK-IS, one from HAK-IS, and one from D SK. Contact information of workers was obtained from the unions, academics, and civil society representatives. 30. The third question was asked only if the group seemed to drift away from the topic. 31. City in Western Turkey. 32. With a change made to the civil servants law 657 in 2001, blue-collar workers who lost their jobs as a result of privatizations could be transferred to public institutions under the status of “temporary workers” and employed at a minimum wage and for only ten paid months. They could not be union members and had two months of unpaid vacation. 33. This style of negotiation can also partly be explained by their educational level: they were both high school graduates while the more erudite and civic-minded Unver from the Ministry of Health in Ankara or Kadir from the General Directorate of State Hydraulic Works in Istanbul were university graduates. 34. Membership in the OM movement ranges anywhere from 500 to 1,000. It is not a formal and institutionalized movement, this making

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35.

36.

37. 38.

39.

40. 41.

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its adherents free to leave and join when they want. The nucleus of the movement is composed of representatives in every city, who mobilize the victims of privatizations in their own area. There are 20 to 30 representatives. Personal interview with the leader of the movement, Unver Uyar (Ankara, August 2005). DISK was a supporter from the very beginning, but the support was symbolic since DISK is a labor confederation that is institutionalized in the private sector only. The OM members also made full and effective use of the media to disseminate their cause. They participated in television programs such as Hayata Bakıs (in the episode called Sermaye vs. Sinif, or Capital vs. Class) by Ferhan Sayeleman on Flash TV, Teke Tek on ATV by Fatih Altayli, and Soz Meclisi on Kanal Turk by Tuncay Ozkan. For more, see http://www.evrensel.net/06/07/16/sendika.html#1 TEKEL’s alcohol section was privatized in November 2001 by a block sale of 100% of shares for US$ 292 million to the NurolOzaltin-Limak-Tutsab Consortium. The Tekel cigarette tender was cancelled by the tender commission. See http://www.oib.gov.tr/ portfoy/tekel_eng.htm Kidem tazminati is the compensation money that must be given to workers who are laid off by an employer. The worker has to be employed for at least one year to have the right to receive the KT. For each year worked, the worker receives a monthly salary that corresponds to his highest monthly salary. For more, see http://www. alomaliye.com/bilgi_kidem_tazminati.htm This strategy should be taken with a grain of salt since it is hard to generalize to the whole population based on what one focus group did. The other reason for the lack of impact of privatizations on voting decisions is also that there are not really explicitly anti-privatization parties left in the Turkish political scene. Onis (2000) argues that since the 1990s, there has been a strong convergence on privatizations by political parties regardless of their political leanings or constituents’ stands (303).

Chapter 5 1. Capacity of the state to specify the terms of economic interaction, to extract resources, and to centralize administrative procedures and coercive means. See Schamis 2002, 192. 2. As opposed to the French system, the US model takes neoliberal restructuring and privatizations as its main pillars and views public utilities as private industries subject to intensive regulation by the state. The operation of utilities, therefore, does not constitute a bastion of government as it does in the French model (Mairal 1996). 3. A divided government happens when the presidency and the Congress are controlled by two different parties opposed to each other. In extreme

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4.

5.

6. 7.

8.

9.

10.

11.

12.

13.

cases, a divided government can lead to gridlock between these two institutions. For more, see Mainwaring and Shugart (1997). Latin American hyperinflations do not happen all of a sudden but usually come about as a result of gradually increasing inflation rates. Latin American governments are also unique in that they can still collect taxes during the hyperinflationary periods (Kiguel and Liviathan 1995). Margheritis (2000), as opposed to Galiani and Petrecolla (2000), divides the Argentine privatization experience of the 1990s into two distinct phases. The first stage starts with Menem’s accession to power in 1989 and ends in 1992 with the completion of the privatization of EnTel and Aerolíneas Argentinas. The privatizations of the television and radio channels, the railway system, petrochemical companies and oil pertain to the second phase, which also coincides with the final stage of Menem’s political term. The community in question includes both the so-called captains of industry and multinationals. For more, see Gerchunoff (1992). Personal interview with the engineer Elido Veschi, secretary-general of the Association of Argentine Railway Managers (Asociacion de Personal de Direccion de los Ferrocarriles Argentinos, APDFA). Buenos Aires, May 2006. “All lines that go on strike will be closed.” My own translation. Menem said this in November of 1989 in a television program. See Clarín. Argentine Daily. May 25, 1997. http://www.clarin.com/ diario/1997/05/25/i-01602e.htm During the first five years of the concession, the amount of promised but not executed investments equaled almost 700 million dollars. See Azpiazu 2003, p. 137. This refers to the state regulatory mechanism created for the purposes of monitoring and ensuring the compliance of the private firms with the clauses of privatization contracts. During the Galataport privatization, the Turkish minister of finance, Kemal Unakıtan, was accused of making private negotiations with the Ozer family. Cem Uzan, another Turkish politician, was also said to be illegitimately involved in the public tender for the sale of Telsim, one of the GSM companies in Turkey. For more, see “Corruption Report on Turkey” at http://www.saydamlik.org/engcorreport.htm (June 2005-June 2006). Ozal used discretionary funds to include traditional patronage politics in the implementation of privatizations. The recipients were mostly the potential losers of the restructuring. For more, see Waterbury (1992). Menem started the road to privatizations by putting in place emergency measures such as currency devaluation and an increase in taxation, as well as a strong program of structural reforms aiming at the elimination of the fiscal deficit. These were identical to strategies employed by the Demirel government in 1991, which succeeded Ozal’s administration in Turkey. For more, see Onis (2004).

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14. Detailed interviewee list can be obtained from the author upon demand ([email protected]). 15. The law in question sought to change the winner-take-all quality of the electoral system in place for the selection of union leaders in Argentina. It proposed the adoption of proportional representation to open the Peronist power blocks to minority Radical groups or others. Antonio Mucci was the Minister of Labor in Alfonsín’s government. 16. This refers to the problem of clearly delineating the sector, and therefore the union, of Argentine workers who were outsourced during and after privatizations. For more, see http://www.oit.org.pe/sindi/ ceacr/arg/c98/obs9.html 17. While workers’ strikes based on the encuadramiento problem were organized without their official unions’ backing, they were welcomed by the potentially receiving union. Furthermore, such protests were often sporadic and limited in scope. As such, they did not include the characteristics of a social movement in the general sense of the term, as did the OM in Turkey and the ON, to a certain extent, in Argentina. 18. See La Flota Historica de YPF at http://www.flotaypf.com.ar/notas. htm 19. This refers to pre-fixed percentages of shares transferred to the workers of the privatized firms. 20. Personal interview with Hugo Giarelli, secretary of funds and finances of FATLyF. Buenos Aires: June 2003. 21. There are differences among the worker members of the dissident telecommunications sector union, Foetra-BA, depending on whether they work for Telecom or Telefonica. Accordingly, workers employed in Telefonica are much more radical and anti-privatization than those working for Telecom. One reason for this difference might be that there are more leftist floor representatives in Telefonica than in Telecom. However, this can also be the consequence of the general attitude of the respective rank and file (Garro 2007). 22. Personal interview with Fabio Basteiro, secretary-general of the capital Buenos Aires Union of CTA. Buenos Aires, July 2006. 23. Burzaco is the name of a city in the Buenos Aires province. 24. Foetra-BA is formally affiliated with the CGT but is considered to be closely associated with the CTA. 25. Personal interview with Silvia Garro. Instructor of labor relations at the University of Buenos Aires. Buenos Aires, July 2006. 26. This is equal to a little more than US 25 cents in 2006 prices. 27. Personal interview with Roberto Izquierdo, professor of labor law at the University of Buenos Aires and former secretary of labor under President Menem. Buenos Aires, April 2006. 28. For more on CTA-affiliated research and civil society organizations, see http://www.ief.redcta.org.ar/spip.php?rubrique25. For more on ACTA, see http://www.agenciacta.org.ar/

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29. Ironically, however, the CTA applied for personeria gremial in 2005. According to Goldin (2006), this was a clear proof of the victory of the “establishment” over a possible “renovation” in the labor movement, and therefore, the lack of force of the privatizations, or any other parameter for that matter, on transforming the paternalistic/clie ntelistic nature of the system. In 2007, however, the CTA has gathered enough national and international support to push the International Labor Organization (ILO) to ask the Argentine government to grant the CTA the personeria gremial (Goldin 2007). 30. Personal interview with Fernando Ledesma. The secretary of organization for the CTA. Mar del Plata, August 2006. 31. Personal interview with Sebastien Etchemendy. Professor of political science, University of Torcuato di Tella. Buenos Aires, July 2006. 32. Argentinazo refers to worker protest movements and the sacking of the supermarkets following the economic crisis in December 2001. 33. See www.cccargentina.org.ar 34. See Argentina Unions at http://www.mundodeltrabajo.org.ar/ english/linkseng.htm#Sindicatos 35. Luis d’Elía was the leader of the popular movement of the unemployed called the Federation of Land and Dwelling (Federacion de Tierra y Vivienda, FTV). 36. Personal interview with Jose Pedraza, Secretary-general of the Railways Union (Union Ferroviaria, UF). Buenos Aires: June 2006. 37. Personal Interview with Leticia Pogliaghi. Instructor of labor relations at the University of Buenos Aires. Buenos Aires, June 2006. 38. Transportation-related jobs were outsourced in almost all sectors that underwent privatizations. 39. The MTA can also be categorized as a business union, due to Moyano’s recent involvement in the privatization of the Belgrano Railways. Personal interview with Jose Pedraza. Secretary-general of the Railways Union (Union Ferroviaria). Buenos Aires, June 2006. 40. Email communication with Alvaro Orsatti, ORIT-CIOSL. New York: April 28, 2007. 41. Personal interview with Osvaldo Castelnuovo. Secretary-general of the Telephone Unions Federation. Buenos Aires, May 2006. 42. Personal interview with Jose Pedraza. Secretary-general of the Railways Union. Buenos Aires, June 2006. 43. Personal interview with Victor Paulon. Secretary-general of UOM of Villa Constitucion. San Nicolas, June 2006. 44. This refers to prefixed rates of shares accorded to the workers of an SOE to be privatized. PPPs were an integral and an important part of privatizations in Argentina. 45. See http://www.upcnsfe.org.ar/upcn_ingles/rodriguez_message.htm 46. Personal interview with Roberto Julio Depetris. Advisor to the second vice president of the Official Postal Service of Argentina. Buenos Aires, May 2006.

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47. The city center, libraries, a health clinic, a stadium, an elementary and a high school built by the UOM were glaring proofs of the important role played by the union in San Nicolas. 48. Before the privatizations, many state-owned enterprises hired new personnel through these “work pools” called bolsas de trabajo coordinated by the unions. The hiring process was based on family connections. Workers whose fathers or others family members were former employees of the state firm had priority in being hired in the privatized company. 49. This is a chewy, lightly sweetened bread. 50. Ages and education levels of focus group participants were similar, between their 40s and mid-60s. 51. There were no female workers in this sample. 52. When FOETRA-BA took an anti-privatization attitude as opposed to the leading union FOETRA in the sector, the remaining collaborationists assembled to form SOEECIT, which does not have personeria gremial due to its smaller number of affiliates. 53. Personal interview with Carlos Ruggiero. Floor representative at FOETRA-BA and employed in Telecom. Buenos Aires, August 2006. 54. Mate is the national drink of Argentina. It symbolizes solidarity and trust. The same cup and straw are used by everybody in a group. Refusing to do so might be seen as impolite.

Chapter 6 1. See Dinavo (1995), Buttle (1996), Kurtz, Cunningham, and Adwan (2001). 2. See Suleiman and Waterbury (1995); Birch and Haar (2000). 3. Etem Erol, historian and lecturer Turkish Language Section at Columbia University. Panel “Meaning of Turkishness and Democratization,” at the 8th Annual Convention of the Association for the Studies of Nationalities. New York: Columbia University, 10–14 April 2008. 4. The change in question has been more apparent in the case of Turkey with HAK-IS taking a much more explicit and active prodemocratization attitude than the business unions within the CGT. However, the rhetoric of democratization has been apparent in the discourse of the business unions in Argentina as well. For more, see Chapter 5. 5. Corporatism is defined as a system of interest representation for linking the associationally organized interests of civil society with the decisional structures of the state. Societal corporatism is found in political systems with relatively open and competitive electoral processes, and party systems and coalitions across different ideologies. State corporatism, on the other hand, is a political system in which elections are nonexistent or plebiscitary, party systems are dominated or monopolized, and executive authorities are ideologically exclusive (Schmitter 1986, 22).

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6. For poverty rates in Argentina and Turkey see, respectively, http:// web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/ LACEXT/ARGENTINA and http://www.tuik.gov.tr/PreTablo. do?tb_id=23&tb_adi=Yoksulluk 7. It was estimated that the number of the unemployed in Turkey was 2,498,000, and the rate of unemployment 10.3 percent in 2004. See http://www.byegm.gov.tr/YAYINLARIMIZ/kitaplar/turkey2005/ content/english/368-369.htm. Argentina’s rate of unemployment was also 10.4 percent in 2006. See https://www.cia.gov/cia/publications/ factbook/print/ar.html However, this rate did not include workers who were looking for a job or those employed in the informal sector. The actual unemployment rate in Argentina was calculated to be between 20 and 25 percent in 2002. See http://www.oit.org.pe/ english/260ameri/publ/panorama/2002/textos2_decent_work_ deficit_rises2.pdf 8. This finding should be taken with a grain of salt since it is based on the outcome of one focus group only. 9. Outsourcing (Taseron, in Turkish) was most prevalent in the sector of construction in Turkey. 17.1 percent of workers employed the public sector were outsourced in Turkey, as opposed to the 7.9 percent of workers employed in the private sector (Mahirogullari 2005, 369). In Argentina, more than one-third of 5.866.208 wage earners and of 2.123.170 unemployed workers who were looking for a job were outsourced as of 1998. See Molina (1999). 10. The exact timing for the emergence of Kemalism as an ideology was debated among scholars. While the question of when and how Kemalism as an ideology emerged constitutes a separate research endeavor, for all intents and purposes, this study assumes that its seeds were sown in the 1920s with Mustafa Kemal Ataturk’s coming to power. 11. The six principles are Republicanism, Nationalism, Secularism, Statism, Populism, and Reformism. 12. See Skocpol (2003) and Tilly (2007) for similar conceptions of democratization. 13. The 2008 uprisings of Argentina’s rural landholders and farmers have also taken place devoid of union participation. It should be noted that these uprisings are irrelevant for the scope of analysis adopted by this study since agriculture as a sector was not affected by privatizations in Argentina. 14. Civil society activism here means more than protest movements. Union-originating protests have gone from 54 percent in the 1990s to 31 percent by 2003. Even then, unions have been active participants of protest movements originated by nonunion actors (For more, see Schuester et al. 2006). In the Argentine case, the formation and workings of the CTA itself is a proof of the increasing convergence of labor and civil society activism.

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Interviews Personal interview with Adrian Goldín, professor of law and political science at the University of San Andres. Buenos Aires: June 2006. Phone interview with Adrian Goldín, professor of law and political science at the University of San Andres. Buenos Aires: July 2007. Personal Interview with Ana María Sacchi, member of the board of FETERA and the secretary-general of the movement Black Gold (Oro Negro). Buenos Aires: June 2006. Personal interview with A Monsalvo, lawyer of Union of Metallurgy Workers (UOM). Buenos Aires: May 2006. Personal interview with Andres Rodriguez, secretary-general of the Union of Argentine Civil Employees of State (Union Personal Civil de la Nacion, UPCN). Buenos Aires: July 2003. Personal interview with Ayfer Yılmaz, director of Public Administration Development Center-Foundation (KIGEM). Ankara: August 2005. Personal interview with Carlos Rossi, vice president of the renationalized official postal service of Argentina (Correo Oficial Argentino). Buenos Aires: August 2006. Personal Interview with Ing. Elido Veschi, secretary-general of Association of Managing Personnel of Argentine Railways (Asociacion de Personal de Direccion de los Ferrocarriles Argentinos, APDFA). Buenos Aires: May 2006. Personal interview with Emre Kocaoglu, former TURK-IS representative, former national deputy and the current director of the Turkish Association of Democracy. Istanbul: August 2006. Personal interview with Fabio Basteiro, secretary-general of the Confederation of Argentine Workers (Confederacion de los Trabajadores Argentinos, CTA) of Buenos Aries. Buenos Aires: July 2006. Personal interview with Faruk Buyukkucak, secretary of the TURK-IS First Region Federation. Istanbul: August 2005. Personal interview with Fernando Ledesma, secretary of organization of Light and Power (Luz y Fuerza) Mar del Plata: August 2006.

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Personal interview with Gabriel Martinez, secretary of mobilization of the Federation of Energy Workers of the Republic of Argentina (Federacion de Trabajadores de la Energia de la Republica Argentina, FETERA) affiliated to the Center of Argentine Workers (Central de los Trabajadores Argentinos, CTA). Buenos Aires: June 2006. Personal interview with Dr. Hector Garcia, legal counselor to CTA. Buenos Aires: August 2006. Personal interview with Dr. Horacio Meguira, legal advisor to the CTA. Buenos Aires: June 2006. Personal interview with interview with Hugo Giarelli, secretary of funds and finances of FATLyF. Buenos Aires: June 2003. Personal interview with Jorge Beneitez, secretary of public relations of the Union of Workers, Specialists and Employees of Telecommunication Services and Industry (Sindicato de Obreros, Especialistas y Empleados de los Servicios e Industria de las Telecomunicaciones, SOEESIT). Buenos Aires: July 2006. Personal interview with Jorge Gustavo Simeonoff, the executive secretary for the renegotiation and analysis of the public service contracts in the Ministry of Economy in Argentina. Buenos Aires: August 2006. Personal interview with Jorge Sappia, the former minister of labor of Cordoba. Cordoba: July 2006. Personal interview with Jose Angel Pedraza, secretary-general of the Union of Railway Workers (Union Ferroviaria, UF). Buenos Aires: May 2006. Personal interview with Marcela Natalicchio, PhD Political Science, MIT. Washington D.C.: October 2005. Personal interview with Jose Miguel Del Giudice, secretary-general of the Cordoba section of the Federation of Workers of Postal and Telecommunication Sectors (FOECYT). Cordoba: July 2006. Personal interview with Leticia Pogliaghi, instructor of labor relations at the University of Buenos Aires. Buenos Aires: June 2006. Personal interview with Maria Del Carmen Framil, coordinator of training at the Technological Institute of Leopoldo Marechal of the Union of Sanitary Workers of Grand Buenos Aires (Sindicato G.B.A de Trabajadores de Obras Sanitarias). Buenos Aires: June 2006. Personal Interview with Mehmet Kilic, section leader of the Union of United Metallurgy, affiliated to DISK. Bursa: August 2005. Personal interview with Mustafa Oztaskin, secretary-general of Union of Petroleum Workers (Petrol-I˙ s). Istanbul: August 2005. Personal interview with Oscar Lescano, secretary-general of the Union of Light and Power in capital Buenos Aires. Buenos Aires: June 2006. Personal interview with Osman Yildiz, senior advisor to the secretary-general of HAK-IS. Ankara: August 2005. Personal interview with Osvaldo Castelnuovo, secretary-general of the Telephone Unions Federation (Federación de Obreros, Especialistas y Empleados de los Servicios e Industria de las Comunicaciones de la Republica Argentina, FOEESITRA). Buenos Aires: May 2006.

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Personal interview with Dr. Osvaldo Ruben Battistini, Ceil-Piette Conicet. Buenos Aires: June 2006. Personal interview with Rodrigo Perez Graziano, chief economist at the Argentine Chamber of Commerce (Camara Argentina de Comercio). Buenos Aires: August 2006. Personal interview with Dr. Roberto Izquierdo, professor of labor law at the University of Buenos Aires and former minister of labor. Buenos Aires: April 2006. Personal interview with Roberto Julio Depetris, advisor to the second vice president of the Official Postal Service of Argentina. Buenos Aires: May 2006. Personal interview with Santiago Senen Gonzalez, journalist and labor specialist. Buenos Aires: May 2006. Personal interview with Sebastien Etchemendy, professor of political science at the University of Torcuato di Tella. Buenos Aires: July 2006. Personal interview with Silvia Garro, instructor of labor relations at the University of Buenos Aires. Buenos Aires: July 2006. Personal interview with Taskın Gundag, secretary of education and mobilization for the Union of Food Sector Workers (Gida-Is). Istanbul: August 2005. Personal interview with Unver Uyar, leader of the Victims of Privatizations (OM) Movement. Ankara: August, 2005. Personal interview with Salih Kılıc, secretary-general of TURK-IS. Ankara: August 2005. Personal interview with Suleyman Celebi, secretary-general of DISK. Istanbul: August 2005. Personal interview with Tugrul Kudatgubilik, secretary-general of Turkish Employers Confederation (Turkiye Isveren Sendikalari Konfederasyonu, TISK) and secretary-general of Turkish Metal Industrialists Union (Turkiye Metal Sanayicileri Sendikasi, MESS). Istanbul: August 2005. Personal interview with Veysel Tekelioglu, department head at Privatization Administration. Ankara: August 2005. Personal interview with Victor Paulon, secretary-general of UOM in Villa Constitucion. San Nicolas: June 2006. E-mail communication with Emanuel Ynoub, instructor of labor relations at the University of Buenos Aires. Buenos Aires: February 2007. Phone interview with Dr. Hector Recalde, MTA’s lawyer and the current national deputy in the Argentine Parliament. February 2007. E-mail communication with Alvaro Orsatti, ORIT-CIOSL. New York: April 2007. E-mail communication with Aziz Celik, Kristal-Is Union (Glass sector workers union). New York: February 2007.


Index

Page numbers for tables are in boldface. AKP, Adalet ve Kalkinma Partisi 23, 33, 105, 113–114, 118–120, 190 Alfonsin, Raul 73, 75–76, 79, 129–131, 134, 138 Alliance unionism, see also new unionism 18, 52, 191, 197 ANAP, Anavatan Partisi 33, 50–51, 54, 92, 95 Anarchism 61–64, Ataturk, see also Mustafa Kemal 33, 200–203 Black Gold, see also Oro Negro 125, 184, 197 Bursa 26, 97, 112–114 CATEP, compare with Emekli (Demokrasi) Platformu 23, 154–155, 180 CCC, Corriente Clasista y Combativa 22, 143, 148– 149, 152–160, 187 CGT, Confederacion General del Trabajo 21–22, 61, 64–74, 80–83, 123–124, 137, 142–149, 150–159, 161, 165, 167, 177, 179, 187–189, 195, 201–202 Check-off system 44, 47 CHP, Cumhuriyet Halk Partisi 24, 40–42, 45, 47, 50, 201–203

Collective action 11, 20, 110, 114, 116, 117, 119, 158, 175, 177–179, 181, 196–198, 203–204, 206 agreement 26, 47–51, 53–54, 66, 76–78, 83, 140, 147, 151, 157–158, 169, 185, 203 bargaining 14, 45, 47–49, 61, 66, 75, 77, 80 mobilization 28 Cordoba 156, 160, 163, 165–166, 170, 171–172, 176–177, 195 Cordobazo 70 Corporatism 158–159, 186, 189–190 Coup d’etat in Argentina 68–71, 127 in Turkey 32, 45, 48–50, 52, 199 CTA, Central de los Trabajadores Argentinos 22, 80–83, 184, 187, 192, 195–197, 206 De Hoz, Martinez 72 Democracy, internal union 25, 29, 30, 86, 96, 109, 184, 191–192 Democratization in Argentina 58, 60, 73, 75–76, 83, 124, 127–129, 138, 147, 157–160

254

Index

Democratization (Continued) in comparison 184, 188, 190, 192, 203–207 in theory 9–14, 17–18, 20–22, 24–25, 29–30 in Turkey 33–34, 51–52, 56, 85, 88, 95, 99, 103–108, 110–111, 114, 116, 119, 121 Deputies (of union background) in Argentina 77 in Turkey 43, 50 DISK—Left-leaning labor confederation in Turkey 21–23, 26, 46–56, 96–97, 100, 103–104, 106, 109–110, 113, 187, 192 Economic crisis 15, 32–33, 47, 58, 72–73, 94, 128, 132, 205 development 12, 59, 60, 87–88, 91, 99, 128–129, 200–201 globalization 7, 98, 102, 107–108, 205 growth 9, 68, 91, 94, 155 Emekli (Demokrasi) Platformu, compare with CATEP 23, 52 Encuadramiento 139–140, 157 Etatism, see also statism 87 Export-oriented industrialization 60, 88, 95, 127 FATLyF—Light and Power Federation 140, 142, 147 FETERA—Energy Sector labor federation in Argentina 146–147, 161, 174 Focus groups in Argentina 167–175, 204 in Turkey 98, 111, 112, 113, 114–120, 204 FOECYT (Argentine federation of postal service workers) 146–147, 156, 161, 170

Globalization, see also economic globalization 1, 8, 13–15, 18, 52, 98, 102, 107–108, 144, 153, 155, 180, 186, 192, 203–207 HAK-IS (labor confederation with an Islamic pedigree in Turkey) 21–22, 47–48, 53, 55, 86, 97, 100, 104–107, 109–110, 112, 113, 116 Hirschman, Albert O. 87, 185 Identity 26 Identity, labor 103–107, 171, 191 Identity, national 75, 201 Ideologies 31, 40, 57, 60, 63, 65, 68–69, 96–98, 100, 103–107, 112, 117, 119–120, 124, 127–128, 143, 145, 148, 158–159, 165, 168–171, 174–179 Import-substitution industrialization 46 Informal sector 78–79, 115, 126, 144 Interests, national 42, 49, 202 Interests, workers 49, 61, 76–77, 83, 86 Intermediary Management Body (IMB) 151, 154, 188 International Labor Organization (ILO) 52, 101 Islamism 11, 104–107, 113, 120 Izmit 113–114, 118–119 Justicialista Party (Partido Justicialista, Peronist Justice Party) 60, 131 Kemalism 98, 116, 199–201, 207 KIGEM 103, 106 Kirchner, Nestor 136, 149–150, 163–164, 190

Index Labor unions 29 labor unions, business 22, 53, 82–83, 106, 109, 140, 142, 143, 149, 154, 156, 158–159, 187–188, 193, 195 labor unions, civic 85, 106, 126, 187–188 labor unions, clientelistic 26, 55, 67, 78, 82, 84, 107 LyF (Luz y Fuerza) 140, 142, 148, 155, 164, 165, 176 Mar del Plata 148, 162, 164–165 Menem, Carlos 22–23, 60–61, 76–79, 81, 93, 95, 129, 131, 133–134, 136–138, 142, 144, 149, 150–151, 169, 187, 198 Menemism 80, 82, 143, 156 Microemprendimiento (small loans) 125, 163, 195 Movement of Victims of Privatization, see also Ozellestirme Magdurlari 114–116, 120 Movimiento de los Trabajadores Argentinos, (MTA) 22, 80–83, 142–143, 149–151, 153–158, 180, 187 Moyano, Hugo 22, 80–81, 150–153, 156–157 Murillo, Victoria 82–83, 142 Mustafa Kemal Ataturk, see Ataturk Neoinstitutionalism 20, 183 Neoliberalism 47, 50, 54, 60–61, 72, 97, 100, 142–143, 150, 153, 198, 200–206 New unionism 18, 86, 107, 109, 123–124, 140, 157, 162, 184, 189, 191 Onis, Ziya 24, 89 Oro Negro, see also Black Gold 125, 184, 196 Ottoman Empire 37–40, 59–60, 63, 87, 92, 185

255

Outsourcing 78, 84, 140, 157, 160, 198 Ozal, Turgut 35, 55, 72, 79, 88–89, 92–94, 129, 131, 137, 198 Ozellestirme Idaresi, OI 91, 115 Ozellestirme Magdurlari, see also Movement of Victims of Privatization 114, 125, 195 PAP (politics of above parties) 50, 52–55, 69, 75, 99–101, 107, 109 Participation 13, 17–18, 20, 27, 29, 69, 83, 112, 114–115, 121, 139–143, 146–147, 151, 153, 155, 158, 175, 178, 180, 184, 188, 192, 197, 204, 206 Partisanship 16, 43–47, 62, 75, 79–80, 82, 86, 103, 105, 109, 112, 124, 167, 178, 185–189, 192–193, 195, 197, 203, 205 Patronage 66, 95, 101, 103, 109, 139 Peron, Juan 66–72, 126–127, 200–203 Peronism 28, 30–31, 66–82, 124, 127, 129–131, 133, 138–139, 142–144, 168, 171, 177, 198–203 Petrol-Is 46, 98–99, 107, 109, 112, 115, 170 Piquetero 13, 28, 149, 164, 180, 187, 205 Pluralism 15–16, 33, 186, 189, 206 PPP (programas de propiedad participada) 9, 140–141, 152, 156, 162, 168, 173 Protest in Argentina 68, 73, 80, 148, 150, 159, 162, 170, 173–174, 176–178 in general 11–12, 14–16, 28, 30, 189, 195 in Turkey 39, 41, 46, 49, 51, 53, 91, 95, 101, 111, 113–116, 119–120, 196, 203

256

Index

Radical Party 60–65, 73–75, 127, 129, 131, 133–134, 138, 143–144, 148 Retiro voluntario, see also voluntary retirement 125, 164, 167–168, 173 Sampling 19, 30 San Nicolas 26, 83, 141, 146, 154, 160, 162–165, 177, 195 Social movements 18, 26, 29–30, 65, 110–111, 113, 115–116, 119–121, 125, 159, 173, 175, 177–181, 184, 187, 195–198, 202 Social security 65, 68, 78, 80, 82, 111, 150–153, 175 Socialism 39, 61–64, 104, 185 SOEs (state-owned enterprises) in Argentina 69, 72, 76–81, 130–133, 139, 140–141, 144, 150–152, 166, 177 in general 8–9, 12, 14, 28, 193 in Turkey 34, 36–39, 54, 88–101, 106, 113–114, 117 Stateness 23–24, 85, 123, 188, 190, 197, 204, 207 Statism 41, 85–87, 89, 98, 129, 201 Street fighter, see piquetero Strike 41–42, 45–49, 51, 61, 71–73, 79, 88, 101, 131, 134, 138, 147, 153–154, 157, 170 Structural adjustment 8, 33, 89, 93, 130, 205 TBMM (Turkish Grand National Assembly) 33, 202 Technocracy 50, 93, 199 Tilly, Charles 224 Timar 35–36

TURK-IS 21–23, 27, 43–49, 51–53, 55, 95–97, 99–110, 116, 170, 187, 189 Unemployment 76, 78, 80, 84, 92, 101, 119, 121, 144–145, 148–149, 153, 159, 162, 164, 169, 179–180, 193, 194 Unionism 43–46, 50, 53–55, 66, 69, 71 unionism, economic 82, 187 unionism, intellectual 83, 187, 192, 203 unionism, political 81–82, 150, 187 Unionism, new 184, 191 Unionism, yellow 27, 104 Unionismo 124, 174–175, 178, 192, 203 Unions, see labor unions UOM (Argentine union active in the metallurgy sector) 26, 73–74, 83, 141, 144, 146, 147, 150, 154, 163, 165, 177, 195 UPCN (Argentine union of state employees) 82, 142, 146, 147, 151–152, 158 Voluntary retirement, see also retiro voluntario 28, 125, 164, 167 Workers’ responses to privatizations, Argentina 159–178 responses to privatizations, comparative analysis 192–197 responses to privatizations, Turkey 110–120 Yacimientos Petrolíferos Fiscales (YPF) 68, 125, 135, 173–175, 197

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