History of the cooperative movement
Encyclopedia
The history of the cooperative movement concerns the origins and history of cooperative
s. Although cooperative arrangements, such as mutual insurance
, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business organization.
claims to be one of the world's first cooperatives, being established in Aberdeen
in 1498 (although it has since demutualized to become a private partnership
). The industrial revolution
and the increasing mechanization of the economy transformed society and threatened the livelihoods of many workers. The concurrent labor and social movement
s and the issues they attempted to address describe the climate at the time.
The first documented consumer cooperative was founded in 1769, in a barely furnished cottage in Fenwick, East Ayrshire
, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society
.
In the decades that followed, several cooperatives or cooperative societies formed including Lennoxtown Friendly Victualling Society, founded in 1812.
By 1830, there were several hundred co-operatives.
Some were initially successful, but most cooperatives founded in the early 19th century had failed by 1840.
However, Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England Co-operative Society
), and Galashiels and Hawick Co-operative Societies (1839 or earlier, merged with The Co-operative Group) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers
established the ‘Rochdale Principles
’ on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established.
Financially, credit union
s were invented in Germany in the mid-19th century, first by Franz Hermann Schulze-Delitzsch
(1852, urban), then by Friedrich Wilhelm Raiffeisen
(1864, rural). While Schulze-Delitzsch is chronologically earlier, Raiffeisen has proven more influential over time – see history of credit unions. In Britain, the friendly society
, building society
, and mutual savings bank
were earlier forms of similar institutions.
(1771–1858) is considered the father of the cooperative movement. A Welshman who made his fortune in the cotton trade, Owen believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mill
s of New Lanark
, Scotland
. It was here that the first co-operative store was opened. Spurred on by the success of this, he had the idea of forming "villages of co-operation" where workers would drag themselves out of poverty by growing their own food, making their own clothes and ultimately becoming self-governing. He tried to form such communities in Orbiston in Scotland and in New Harmony, Indiana
in the United States of America
, but both communities failed.
(1786–1865) – took his ideas and made them more workable and practical. King believed in starting small, and realized that the working class
es would need to set up co-operatives for themselves, so he saw his role as one of instruction. He founded a monthly periodical called The Co-operator, the first edition of which appeared on 1 May 1828. This gave a mixture of co-operative philosophy and practical advice about running a shop using cooperative principles. King advised people not to cut themselves off from society
, but rather to form a society within a society, and to start with a shop because, "We must go to a shop every day to buy food and necessaries - why then should we not go to our own shop?" He proposed sensible rules, such as having a weekly account audit, having 3 trustees, and not having meetings in pubs (to avoid the temptation of drinking profits).
, England, that was formed in 1844. As the mechanization of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles
, and over a period of four months they struggled to pool together one pound sterling
per person for a total of 28 pounds of capital. On December 21, 1844, they opened their store with a very meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods.
opened their co-operative, the North of England Co-operative Society was launched by 300 individual co-ops across Yorkshire
and Lancashire
. By 1872, it had become known as the Co-operative Wholesale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (1973) and the South Suburban Co-operative Society
(1984).
By the 1990s, CWS's share of the market had declined considerably and many came to doubt the viability of co-operative model. CWS sold its factories to Andrew Regan
in 1994. Regan returned in 1997 with a £1.2 billion bid for CWS. There were allegations of "carpet-bagging
" - new members who joined simply to make money from the sale - and more seriously fraud and commercial leaks. After a lengthy battle, Regan's bid was seen off and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of charges. The episode recharged CWS and its membership base. Tony Blair
's Co-operative Commission
, chaired by John Monks
, made major recommendations for the co-operative movement, including the organisation and marketing of the retail societies. It was in this climate that, in 2000, CWS merged with the UK's second largest society, Co-operative Retail Services
.
Its headquarter complex is situated on the north side of Manchester
city centre adjacent to the Manchester Victoria
railway station. The complex is made up of many different buildings with two notable tower blocks of New Century House and the solar panel-clad CIS tower.
Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group's national board. The Group manages The Co-operative brand
and the Co-operative Retail Trading Group
(CRTG), which sources and promotes goods for food stores. There is a similar purchasing group (CTTG) for co-operative travel agents.
in the Basque country
of Spain
. Co-operatives were also successful in Yugoslavia
under Tito
where Workers' Councils
gained a significant role in management.
In many European countries, cooperative institutions have a predominant market share in the retail banking and insurance
businesses.
In the UK, co-operatives formed the Co-operative Party
in the early 20th century to represent members of co-ops in Parliament. The Co-operative Party now has a permanent electoral pact with the Labour Party
, and some Labour MP
s are Co-operative Party members. UK co-operatives retain a significant market share in food retail, insurance, banking, funeral services, and the travel industry in many parts of the country.
Denmark has had a strong cooperative movement
.
In Colorado, the Meadowlark Cooperative
administers the first and only private free land program in the United States, providing many services to its members who buy and sell together.
In the United States there are over 29,000 co-operatives employing 2 million people with over $652 billion in annual revenue.
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
s. Although cooperative arrangements, such as mutual insurance
Mutual insurance
A mutual insurance company is an insurance company which has no shareholders but instead is owned entirely by its policyholders. The primary form of financial business set up as a mutual company in the United States has been mutual insurance. Under this idea, what would have been profits are...
, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business organization.
Beginnings
The cooperative movement began in Europe in the 19th century, primarily in Britain and France, although The Shore Porters SocietyThe Shore Porters Society
The Shore Porters Society is a removals, haulage and storage company based in Aberdeen, Scotland, established in 1498.The address of the Shore Porters Society is 1 Baltic Place, Aberdeen, which is not just an address, it is also an accurate climatological description.The Society also operates under...
claims to be one of the world's first cooperatives, being established in Aberdeen
Aberdeen
Aberdeen is Scotland's third most populous city, one of Scotland's 32 local government council areas and the United Kingdom's 25th most populous city, with an official population estimate of ....
in 1498 (although it has since demutualized to become a private partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
). The industrial revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
and the increasing mechanization of the economy transformed society and threatened the livelihoods of many workers. The concurrent labor and social movement
Social movement
Social movements are a type of group action. They are large informal groupings of individuals or organizations focused on specific political or social issues, in other words, on carrying out, resisting or undoing a social change....
s and the issues they attempted to address describe the climate at the time.
The first documented consumer cooperative was founded in 1769, in a barely furnished cottage in Fenwick, East Ayrshire
Fenwick, East Ayrshire
Fenwick is a village in East Ayrshire, Scotland, UK. As of 2001, its population was 863.Fenwick is the terminus of the M77 following its extension which was opened in April 2005, at the beginning of the Kilmarnock bypass....
, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society
Fenwick Weavers' Society
The Fenwick Weavers' Society was a professional association created in the village of Fenwick, East Ayrshire, Scotland in 1761.In 1769, the society formed a consumer co-operative for the benefit of members in 1769....
.
In the decades that followed, several cooperatives or cooperative societies formed including Lennoxtown Friendly Victualling Society, founded in 1812.
By 1830, there were several hundred co-operatives.
Some were initially successful, but most cooperatives founded in the early 19th century had failed by 1840.
However, Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England Co-operative Society
Heart of England Co-operative Society
The Heart of England Co-operative Society Limited is a regional consumer co-operative in the United Kingdom. It is a registered Industrial and Provident Society, a member of the Co-operative Union Ltd., the Co-operative Retail Trading Group and a corporate member of Co-operative Group Ltd. , the...
), and Galashiels and Hawick Co-operative Societies (1839 or earlier, merged with The Co-operative Group) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers
Rochdale Pioneers
The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....
established the ‘Rochdale Principles
Rochdale Principles
The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...
’ on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established.
Financially, credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
s were invented in Germany in the mid-19th century, first by Franz Hermann Schulze-Delitzsch
Franz Hermann Schulze-Delitzsch
Franz Hermann Schulze-Delitzsch was a German economist. He was responsible for the organizing of the world's first credit unions.-History:Schulze-Delitzsch was born at Delitzsch, in Prussian Saxony...
(1852, urban), then by Friedrich Wilhelm Raiffeisen
Friedrich Wilhelm Raiffeisen
Friedrich Wilhelm Raiffeisen was a German mayor and cooperative pioneer. Several credit union systems and cooperative banks have been named after Raiffeisen, who pioneered rural credit unions.- Life :...
(1864, rural). While Schulze-Delitzsch is chronologically earlier, Raiffeisen has proven more influential over time – see history of credit unions. In Britain, the friendly society
Friendly society
A friendly society is a mutual association for insurance, pensions or savings and loan-like purposes, or cooperative banking. It is a mutual organization or benefit society composed of a body of people who join together for a common financial or social purpose...
, building society
Building society
A building society is a financial institution owned by its members as a mutual organization. Building societies offer banking and related financial services, especially mortgage lending. These institutions are found in the United Kingdom and several other countries.The term "building society"...
, and mutual savings bank
Mutual savings bank
A mutual savings bank is a financial institution chartered by a central or regional government, without capital stock, that is owned by its members who subscribe to a common fund. From this fund claims, loans, etc., are paid. Profits after deductions are shared between the members...
were earlier forms of similar institutions.
Robert Owen
Robert OwenRobert Owen
Robert Owen was a Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.Owen's philosophy was based on three intellectual pillars:...
(1771–1858) is considered the father of the cooperative movement. A Welshman who made his fortune in the cotton trade, Owen believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the cotton mill
Cotton mill
A cotton mill is a factory that houses spinning and weaving machinery. Typically built between 1775 and 1930, mills spun cotton which was an important product during the Industrial Revolution....
s of New Lanark
New Lanark
New Lanark is a village on the River Clyde, approximately 1.4 miles from Lanark, in South Lanarkshire, Scotland. It was founded in 1786 by David Dale, who built cotton mills and housing for the mill workers. Dale built the mills there to take advantage of the water power provided by the river...
, Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
. It was here that the first co-operative store was opened. Spurred on by the success of this, he had the idea of forming "villages of co-operation" where workers would drag themselves out of poverty by growing their own food, making their own clothes and ultimately becoming self-governing. He tried to form such communities in Orbiston in Scotland and in New Harmony, Indiana
New Harmony, Indiana
New Harmony is a historic town on the Wabash River in Harmony Township, Posey County, Indiana, United States. It lies north of Mount Vernon, the county seat. The population was 916 at the 2000 census. It is part of the Evansville metropolitan area. Many of the old Harmonist buildings still stand...
in the United States of America
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, but both communities failed.
William King
Although Owen inspired the co-operative movement, others – such as Dr William KingWilliam King (doctor)
Dr. William King was a British physician and philanthropist from Brighton. He is best known as an early supporter of the Cooperative Movement....
(1786–1865) – took his ideas and made them more workable and practical. King believed in starting small, and realized that the working class
Working class
Working class is a term used in the social sciences and in ordinary conversation to describe those employed in lower tier jobs , often extending to those in unemployment or otherwise possessing below-average incomes...
es would need to set up co-operatives for themselves, so he saw his role as one of instruction. He founded a monthly periodical called The Co-operator, the first edition of which appeared on 1 May 1828. This gave a mixture of co-operative philosophy and practical advice about running a shop using cooperative principles. King advised people not to cut themselves off from society
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...
, but rather to form a society within a society, and to start with a shop because, "We must go to a shop every day to buy food and necessaries - why then should we not go to our own shop?" He proposed sensible rules, such as having a weekly account audit, having 3 trustees, and not having meetings in pubs (to avoid the temptation of drinking profits).
The Rochdale Pioneers
The Rochdale Society of Equitable Pioneers was a group of 10 weavers and 20 others in RochdaleRochdale
Rochdale is a large market town in Greater Manchester, England. It lies amongst the foothills of the Pennines on the River Roch, north-northwest of Oldham, and north-northeast of the city of Manchester. Rochdale is surrounded by several smaller settlements which together form the Metropolitan...
, England, that was formed in 1844. As the mechanization of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles
Rochdale Principles
The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...
, and over a period of four months they struggled to pool together one pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
per person for a total of 28 pounds of capital. On December 21, 1844, they opened their store with a very meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods.
The English CWS and Co-operative Group
The Co-operative Group formed gradually over 140 years from the merger of many independent retail societies, and their wholesale societies and federations. In 1863, twenty years after the Rochdale PioneersRochdale Pioneers
The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....
opened their co-operative, the North of England Co-operative Society was launched by 300 individual co-ops across Yorkshire
Yorkshire
Yorkshire is a historic county of northern England and the largest in the United Kingdom. Because of its great size in comparison to other English counties, functions have been increasingly undertaken over time by its subdivisions, which have also been subject to periodic reform...
and Lancashire
Lancashire
Lancashire is a non-metropolitan county of historic origin in the North West of England. It takes its name from the city of Lancaster, and is sometimes known as the County of Lancaster. Although Lancaster is still considered to be the county town, Lancashire County Council is based in Preston...
. By 1872, it had become known as the Co-operative Wholesale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (1973) and the South Suburban Co-operative Society
South Suburban Co-operative Society
The South Suburban Co-operative Society was a cooperative retailer in south London, Surrey and Kent, England. It became part of the Co-operative Wholesale Society, now the Co-operative Group....
(1984).
Andrew Regan
Andrew Regan is a British-born polar explorer and entrepreneur. He is the chief executive officer of Corvus Capital, an investment company.-Personal life:...
in 1994. Regan returned in 1997 with a £1.2 billion bid for CWS. There were allegations of "carpet-bagging
Carpetbagger
Carpetbaggers was a pejorative term Southerners gave to Northerners who moved to the South during the Reconstruction era, between 1865 and 1877....
" - new members who joined simply to make money from the sale - and more seriously fraud and commercial leaks. After a lengthy battle, Regan's bid was seen off and two senior CWS executives were dismissed and imprisoned for fraud. Regan was cleared of charges. The episode recharged CWS and its membership base. Tony Blair
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...
's Co-operative Commission
Co-operative Commission
The Co-operative Commission was an independent commission set up by Tony Blair at the request of leaders of the British co-operative movement. Its aim was to review the strategy and structures of the sector, with an aim to suggesting ways to develop and modernise the movement, and its members...
, chaired by John Monks
John Monks
John Stephen Monks, Baron Monks is a member of the House of Lords and was the General Secretary of the Trades Union Congress in the UK from 1993 until 2003, when he became the General Secretary of the European Trade Union Confederation .-Early life:He attended Ducie Technical High School John...
, made major recommendations for the co-operative movement, including the organisation and marketing of the retail societies. It was in this climate that, in 2000, CWS merged with the UK's second largest society, Co-operative Retail Services
Co-operative Retail Services
Co-operative Retail Services Limited was the second-largest consumer co-operative society in the UK. In 2000, it was dissolved by its members, merging with the larger Co-operative Wholesale Society, to form the Co-operative Group Ltd.- History :In 1933, CWS formed a retail division tasked with...
.
Its headquarter complex is situated on the north side of Manchester
Manchester
Manchester is a city and metropolitan borough in Greater Manchester, England. According to the Office for National Statistics, the 2010 mid-year population estimate for Manchester was 498,800. Manchester lies within one of the UK's largest metropolitan areas, the metropolitan county of Greater...
city centre adjacent to the Manchester Victoria
Manchester Victoria station
Manchester Victoria station in Manchester, England is the city's second largest mainline railway station. It is also a Metrolink station, one of eight within the City Zone...
railway station. The complex is made up of many different buildings with two notable tower blocks of New Century House and the solar panel-clad CIS tower.
Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group's national board. The Group manages The Co-operative brand
The Co-operative brand
The Co-operative is a common branding used by a variety of co-operatives based in the United Kingdom.Many in the UK mistakenly consider the Co-op to be a single national business, however each Co-operative is actually a franchise selling branded goods produced by the Co-operative Group The...
and the Co-operative Retail Trading Group
Co-operative Retail Trading Group
The Co-operative Retail Trading Group is the central buying group for co-operative retail societies in the United Kingdom. It was established in 1993, and says that it supplies 100% of food bought for sale by co-operatives in the UK, after being joined by the last two independent societies in 2002...
(CRTG), which sources and promotes goods for food stores. There is a similar purchasing group (CTTG) for co-operative travel agents.
Co-operatives today
Co-operative communities are now widespread, with one of the largest and most successful examples being the Mondragón Cooperative CorporationMondragón Cooperative Corporation
The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. Founded in the town of Mondragón in 1956, its origin is linked to the activity of a modest technical college and a small workshop producing paraffin heaters...
in the Basque country
Basque Country (autonomous community)
The Basque Country is an autonomous community of northern Spain. It includes the Basque provinces of Álava, Biscay and Gipuzkoa, also called Historical Territories....
of Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
. Co-operatives were also successful in Yugoslavia
Socialist Federal Republic of Yugoslavia
The Socialist Federal Republic of Yugoslavia was the Yugoslav state that existed from the abolition of the Yugoslav monarchy until it was dissolved in 1992 amid the Yugoslav Wars. It was a socialist state and a federation made up of six socialist republics: Bosnia and Herzegovina, Croatia,...
under Tito
Josip Broz Tito
Marshal Josip Broz Tito – 4 May 1980) was a Yugoslav revolutionary and statesman. While his presidency has been criticized as authoritarian, Tito was a popular public figure both in Yugoslavia and abroad, viewed as a unifying symbol for the nations of the Yugoslav federation...
where Workers' Councils
Workers' council
A workers' council, or revolutionary councils, is the phenomenon where a single place of work or enterprise, such as a factory, school, or farm, is controlled collectively by the workers of that workplace, through the core principle of temporary and instantly revocable delegates.In a system with...
gained a significant role in management.
In many European countries, cooperative institutions have a predominant market share in the retail banking and insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
businesses.
Co-operative Party
The Co-operative Party is a centre-left political party in the United Kingdom committed to supporting and representing co-operative principles. The party does not put up separate candidates for any UK election itself. Instead, Co-operative candidates stand jointly with the Labour Party as "Labour...
in the early 20th century to represent members of co-ops in Parliament. The Co-operative Party now has a permanent electoral pact with the Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
, and some Labour MP
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
s are Co-operative Party members. UK co-operatives retain a significant market share in food retail, insurance, banking, funeral services, and the travel industry in many parts of the country.
Denmark has had a strong cooperative movement
Danish cooperative movement
The Danish cooperative movement was a means of economical organization under leadership of consumer- or producer-controlled corporations, where each individual member owned a part of the corporation. The type of organization was especially used in the farming industry and in consumer organizations...
.
In Colorado, the Meadowlark Cooperative
Meadowlark cooperative
The Meadowlark Cooperative, a farming community near Agate, Colorado, administers the only private free land program in the United States through democracy...
administers the first and only private free land program in the United States, providing many services to its members who buy and sell together.
In the United States there are over 29,000 co-operatives employing 2 million people with over $652 billion in annual revenue.
Further reading
- For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press, by John Curl, 2009