PROTOTYPES of the Contract

Preliminary Observation

The Partnership Contract is conditioned upon the execution of the “globalizinghousing” Project. This Project, defined in the Web page, is the only one that generates sufficient resources to finance it. Therefore, when I refer to the contributions of the State, the State only acts as administrator of the existing resources, supplied by the financial system that I have described, autonomous and outside the general National Budgets. The globalization of housing is the concrete, real and immediate proposal that, as a reliable alternative, I offer to the antiglobalization movements as the entrance to collateral globalization of massive employment, healthcare, education, pension funds, family aid, development and the fight against poverty. For all these goals, enormous amounts of money are needed that are obtained from the unlimited construction of self-financed housing, that is, with ZERO COST for the States. If this offering falls on deaf ears, all those groups, associations, movements, NGOs and similar organizations to whom I am writing, will fail in their strategy, they will be shown in a bad light and their collective credibility will be called into question, leaving exposed the fact that among the leaders, arrogant personalities have precedence, with those who demand things at the top of their voices operating on the same level as those who do not even say Good morning.

Therefore, in the different forms of occasional association of the State with the workers, I consider it to be true that the State is in a position to supply as much financing as needed.

The Partnership Contract can begin as follows:

1. CONTRIBUTIONS FROM THE STATE, complying with the initiative of a group of workers, financing them 50 percent of the value of the investment and provisionally figuring as capitalist partner for the remaining 50 percent, percentage which is available to private capitalist groups.

2. PROMOTE PRIVATE INITIATIVES, contributing 50 percent of the capital in favor of the workers, who will be the owners.

3. EXPANDING THE EXISTING COMPANIES by means of equal contribution of capital, in benefit of the workers.

4. DIRECT PRIVATE ORGANIZATION, by agreement between the management and workers.

5. TRIPARTITE ASSOCIATIONS BETWEEN THE STATE, MANAGEMENT AND WORKERS, with the recovery of the State’s share in order to convert the company into 50 percent participation.

a) Collaboration of the workers with the State as owner

The objective of the State is not to become an owner, but there are moments in which it intervenes directly in the economic activity. This is the special case for initiating a new form of labor relationship.

What is important in this new form of labor contract, which I call the third way, is that with the initial intervention of the State, the creation of a company of a mixed nature is sought, formed by 50 percent of the capital from the workers, financed initially by the State, and the remaining 50 percent is contributed by the State-owner, which occasionally participates in the company as just any partner.

The Partnership will consist of two equal packages of shares, whose nominal capital is contributed completely by the State. One of the packages of shares will be the property of the workers, of all the workers without exception, each one of them having ownership of a quota calculated by one of the systems that will be explained. The other package of shares belongs to the State, which will relinquish them to third persons at their corresponding price. The transferees will never be the workers.

The reimbursement of the capital financed for the workers will be done by annually reserving a percentage of the benefits until the advanced capital is paid back. Interest will not be calculated.

The Partnership will have management bodies just like the public limited companies.

The vocation of the State is not managerial or of active participation in the new Companies, and, therefore, it will try, as soon as possible, for the workers and the private businessmen to exploit together the activities of the company with greater productivity and competitive power.

b) Promoting the private initiative with the State financing the workers’ 50 percent

This is just a variant of the previous paragraph in which the State promotes the company or accepts the promotional proposal by the workers. Here the company will be created as a consequence of the stimuli generated by the State to favor the private investors that adhere to the system of the third way.

These investors see in this system the form of uniting substantial capital contributed by the State, with the workers as the main beneficiaries. For the investors it is an advantage to count on beforehand the certain subscription of 50 percent of the capital of the partnership and to participate in a business organization that promises stability in salary costs, productivity superior to that of other companies in the sector, greater competitive power of the products they manufacture, labor peace and projection of greater benefits. For future businessmen, being able to plan a company in the long term will be an inducement, free of the oscillations in production derived from labor conflicts. These conflicts will disappear because they will have not reason to exist.

c) Expansion of existing companies

The expansion of a company requires, as a condition, the capital to be doubled. It must be this way because of the principle of equality of participation between work and capital. New contributions will be made whose direct beneficiaries will be the workers. The principle of equality of participation would also occur if the businessman cedes 50 percent of his capital to the workers, but this practice does not belong in the third way, for the following reasons:

1. If the businessman sells to the workers half of the company and the workers pay with loans received from the State, the operation does not create new jobs, but rather only represents a change in the ownership and the reimbursement to the businessmen of 50 percent of the value of his company.

2. It presents the problem of assessment of the assets and reserves. It is not the same to assess these assets when they are being liquidated as when they form part of a dynamic operation. The same happens with the reserves that can or cannot be materialized. For this I say that it should be an expansion, equivalent to expanding the company with the immediate opportunity of new sources of work.

d) Transformation of the private company into a mixed company by agreement between management and workers

This is the most important case in putting in motion the third way, because it points directly at the present work organization. It concerns transforming a company with private capital and regular labor contracts into another type of company with a mixed composition, in which the workers own 50 percent of the company, acquired through an agreement with management. The work contracts are replaced by the Partnership Contract. The State does not intervene directly and will only intervene by establishing incentives that make the transformation of the company attractive.

As I affirm that the transformation of the private company into a mixed company is the most important case, I also should add that it is the most difficult to carry out, because it needs to be accompanied by a change in mentality of the employer, which is difficult to attain. The persuasion of the convenience of integrating the company in the third way should come from the assessment of the advantages that the new work system can bring. It is the special interest that should be in balance and the certainty of attaining substantial advantages.

e) Tripartite Associations

Among the combinations that can be thought of in the organization of the third way, is the collaboration of the State-management-workers, when the necessary operating capital is high. In this case, instead of the partnership being formed at 50 percent between the workers and capital, a company can be constituted with a third of the shares for each one of the groups.

The State has no interest at all in conserving permanently its share in the company. This share is negotiable in equal part for workers and employers, so that the mixed company has the 50/50 participation.

While the basic condition of the workers of the company forming a group with 50 percent participation in the capital is conserved, as many initiatives, combinations and associations can be admitted as are capable of being projected.

Next Editorial April 10, 2002

Forms of participation

See ALL the Editorials at the end of the CONTENTS on the first page.

Francisco Montaner

Globalizing housing with zero cost