In 1812, bands of British weavers and knitters raided textile mills and smashed industrial machines with their hammers. According to the Luddites, the new mechanized looms had eliminated thousands of jobs, broken communities, and deserved to be destroyed. The British government disagreed and called in a battalion of 14,000 soldiers to brutally repress the worker revolt and protect the machines.

Fast-forward two centuries to another textile factory, this one in Buenos Aires. At the Brukman factory, which has been producing men's suits for fifty years, it's the riot police who smash the sewing machines and the 58 workers who risk their lives to protect them.

On Monday, the Brukman factory was the site of the worst repression Buenos Aires has seen in almost a year. Police had evicted the workers in the middle of the night and turned the entire block into a military zone guarded by machine guns and attack dogs. Unable to get into the factory and complete an outstanding order for 3,000 pairs of dress trousers, the workers gathered a huge crowd of supporters and announced it was time to go back to work. At 5 p.m. , 50 middle aged seamstresses in no-nonsense haircuts, sensible shoes and blue work smocks walked up to the black police fence. Someone pushed, the fence fell, and the Brukman women, unarmed and arm in arm, slowly walked through.

They had only taken a few steps when the police began shooting: tear gas, water cannons, first rubber bullets, then lead. The police even charged the Mothers of the Plaza de Mayo, in their white headscarves embroidered with the names of their "disappeared" children. Dozens of demonstrators were injured and police fired tear gas into a hospital where some had taken refuge.

This is a snapshot of Argentina less than a week before its presidential elections. Each of the five major candidates is promising to put this crisis-ravaged country back to work. Yet Brukman's workers are treated as if sewing a grey suit were a capital crime.

Why this state Luddism, this rage at machines? Well, Brukman isn't just any factory, it's a fabrica ocupada, one of almost 200 factories across the country that have been taken over and run by their workers over the past year and a half. For many, the factories, employing more than 10,000 nationwide and producing everything from tractors to ice cream, are seen not just as an economic alternative, but as a political one as well. "They are afraid of us because we have shown that if we can manage a factory we can also manage a country," Brukman worker Celia Martinez said on Monday night. "That's why this government decided to repress us."

At first glance, Brukman looks like every other garment factory in the world. As in Mexico's hyper modern maquiladoras and Toronto's crumbling coat factories, Brukman is filled with women hunched over sewing machines, their eyes straining and fingers flying over fabric and thread. What makes Brukman different are the sounds. There is the familiar roar of machines and the hiss of steam, but there is also Bolivian folk music, coming from a small tape deck in the back of the room, and softly spoken voices, as older workers leaned over younger ones, showing them new stitches. "They wouldn't let us do that before," Martinez says. "They wouldn't let us get up from our workspaces or listen to music. But why not listen to music, to lift the spirits a bit?"

Here in Buenos Aires, every week brings news of a new occupation: a four-star hotel now run by its cleaning staff, a supermarket taken by its clerks, a regional airline about to be turned into a cooperative by the pilots and attendants. In small Trotskyist journals around the world, Argentina's occupied factories, where the workers have seized the means of production, are giddily hailed as the dawn of a socialist utopia. In large business magazines like The Economist, they are ominously described as a threat to the sacred principle of private property. The truth lies somewhere in between.

In Brukman, for instance, the means of production weren't seized, they were simply picked up after they had been abandoned by their legal owners. The factory had been in decline for several years, debts to utility companies were piling up, and over a period of five months, the seamstresses had seen their salaries slashed from 100 pesos a week to a mere two pesos - not enough for bus fare.

On December 18, the workers decided it was time to demand a travel allowance. The owners, pleading poverty, told the workers to wait at the factory while they looked for the money. "We waited for them until evening. We waited until night," Martinez says. "No one came."

After getting the keys from the doorman, Martinez and the other workers slept at the factory. They have been running it every since. They have paid the outstanding bills, attracted new clients, and without profits and management salaries to worry about, managed to pay themselves steady salaries. All these decisions have been made democratically, by vote in open assemblies. "I don't know why the owners had such a hard time," Martinez says. "I don't know much about accounting but for me it's easy: addition and subtraction."

Brukman has come to represent a new kind of labour movement here, one that is not based on the power to stop working (the traditional union tactic) but on the dogged determination to keep working no matter what. It's a demand that is not driven by dogmatism but by realism: in a country where 58 per cent of the population is living in poverty, workers know that they are a pay cheque away from having to beg and scavenge to survive. The specter that is haunting Argentina's occupied factories is not communism, but indigence.

But isn't it simple theft? After all, these workers didn't buy the machines, the owners did - if they want to sell them or move them to another country, surely that's their right. As the federal judge wrote in Brukman's eviction order, "Life and physical integrity have no supremacy over economic interests."

Perhaps unintentionally, he has summed up the naked logic of de-regulated globalization: capital must be free to seek out the lowest wages and most generous incentives, regardless of the toll that process takes on people and communities.

The workers in Argentina's occupied factories have a different vision. Their lawyers argue that the owners of these factories have already violated basic market principles by failing to pay their employees and their creditors, even while collecting huge subsidies from the state. Why can't the state now insist that the indebted companies' remaining assets continue to serve the public with steady jobs? Dozens of workers' cooperatives have already been awarded legal expropriation. Brukman is still fighting.

Come to think of it, the Luddites made a similar argument in 1812. The new textile mills put profits for a few before an entire way of life. Those textile workers tried to fight that destructive logic by smashing the machines. The Brukman workers have a much better plan: they want to protect the machines and smash the logic.