The history of the cooperative movement concerns the origins and history of cooperatives across
the world. 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. Beginnings
The cooperative movement began in Europe in the 19th century, primarily in Britain and
France. The industrial revolution and the increasing mechanisation of the economy transformed
society and threatened the livelihoods of many workers. The concurrent labour and social
movements 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 1810, Rev. Henry Duncan of the Ruthwell Presbyterian Church in Dumfriesshire, Scotland
founded a friendly society to create a cooperative depository institution at which his poorest
parishioners could hold savings accounts accruing interest for sickness and old-age, which was
the first established savings bank that would be merged into the Trustee Savings Bank between
1970 and 1985.
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 , and Galashiels and Hawick Co-operative Societies 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, cooperative banks, called credit unions in the US, were invented in Germany
in the mid-19th century, first by Franz Hermann Schulze-Delitzsch , then by Friedrich Wilhelm
Raiffeisen . 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.
Robert Owen Robert Owen is considered as 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 mills 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.
William King Although Owen inspired the co-operative movement,
others – such as Dr. William King – took his ideas and made them more workable and
practical. King believed in starting small, and realized that the working classes 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 .
Rochdale Pioneers The Rochdale Society of Equitable Pioneers
was a group of 10 weavers and 20 others in Rochdale, 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 one pound sterling per person for a total of 28 pounds of capital.
On December 21, 1844, they opened their store with a very meagre 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.
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 Pioneers 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 . Through the 20th century, smaller societies merged with CWS, such as the Scottish
Co-operative Wholesale Society and the South Suburban Co-operative Society .
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 headquarters 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 , which sources and promotes
goods for food stores. There is a similar purchasing group for co-operative travel agents.
U.S. Co-operatives The United States first known Co-op was the
mutual fire insurance company founded in 1752 by Benjamin Franklin. The first dairy co-op
was founded in 1810 with small locals found nationwide by 1866. The first known consumer
co-op in 1845 was Boston's Workingman's Protective Union. The country's first organization to
promote cooperative values and the Rochdale Principles was the Order of the Patrons of
Husbandry, known as the Grange that started after the Civil War. The co-operative movement
grew during the 1890s in response to the expansion of large corporate monopolies. The country's
first credit unions were in Massachusetts while The Cooperative League of the United
States of America, known today as the National Cooperative Business Association was organized
in 1916 to promote cooperatives. In the late 1960s the Co-op movement entered a new phase
with Food cooperatives and Food Conspiracies as an alternative to corporate agriculture
that linked organic farmers to urban consumers.
The co-operative model has a long history in the U.S., including a factory in the 1790s,
the Knights of Labor, and the Grange. In Colorado, the Meadowlark cooperative administered the
only private free land program in the United States, providing many services to its members
who buy and sell together. In New York City, several food co-operatives were founded around
2010, adding to others, some existing since the 1970s. The U.S. has some diverse worker
co-operatives, such as a home care agency, an organic bread factory co-op and an engineering
firm. Some have already incorporated environmental and/or Fair Trade criteria into their products,
such as the aforementioned bread-maker, Organic Valley, and Equal Exchange.
Credit unions were established in the U.S. by 1908. Their member-owned, co-operative
structure created stable governance structure, so that they were only slightly affected by
the 2008 mortgage securities crisis.
Electrical co-operatives became an important economic strategy for U.S. rural areas beginning
in the 1930s, and continue to operate successfully through events such as Hurricane Sandy in
2012. However, the majority in the U.S. demonstrate that co-operative values do not necessarily
lead to a progressive social and environmental consciousness, as many remain focuses on fossil
fuel and nuclear fuels. Nevertheless, new generation renewable power co-operatives have
begun to be organized.
Agricultural co-operatives in the U.S. have had some mainstream success, including Welch's,
Ocean Spray, and Land O'Lakes.
In the United States, a co-operative association was founded by 1920. Currently there are over
29,000 co-operatives employing 2 million people with over $652 billion in annual revenue.
To address the need for an organization oriented to newer and smaller co-ops, the United States
Federation of Worker Cooperatives was founded after 2000.
An alternative method of employee-ownership, the Employee Stock Ownership Plan , was developed
in the U.S. by Louis Kelso and advocated by Senator Russell Long to be incentivized in
the ERISA law of 1974. For example, a large Southeastern US supermarket chain a California
manufacturer, and a furniture-maker with earnings of more than $2 billion, are employee-owned.
Employee-owned trusts have also been developed more or less independently, for example at
an established iron pipe company
Co-operative Women's Guild Alice Acland, the editor of the "Women's Corner"
in the Co-operative News publication, and Mary Lawrenson, a teacher, recognized the
need for a separate women's organization within the Cooperative Movement and began organizing
a "Woman's League for the Spread of Co-operation" in 1883. This League formally met for the
first time during the 1883 Co-operative Congress in Edinburgh in a group of 50 women and established
Acland as its organizing secretary. By 1884 it had six different branches with 195 members,
and the League was renamed the Women's Cooperative Guild.
The Guild organized around working women's issues and expanding the Cooperative Movement.
It continued to publish articles advocating for women's involvement in the Cooperative
Movement in the "Women's Corner," and later through its own publications such as "The
importance of women for the cooperative movement." The Guild also opened the Sunderland cooperative
store in 1902, which catered to poor working-class women. It engaged in many political campaigns
concerning women's health, women's suffrage and pacifism. Until recently the organisation
participated in social justice activism, but has now closed.
Other developments In Russia the village co-operative , operated
from pre-serfdom times until the 20th century.
Raiffeisen and Schultz-Delitsch developed an independently formulated co-operative model
in Germany, the credit union. The model also moved abroad, reaching the United States by
the 1880s and the Knights of Labour's projects. Leland Stanford, the railroad magnate and
Robber Baron, became a Senator and advocated for co-operatives. By 1920 a national association
had formed in the U.S. This organization began to develop international programs, and by
the 1970s, a World Council formed.
Co-operatives in the U.S. have a long history, including an early factory in the 1790s. By
the 1860s Brigham Young had started applying co-operative ideas in Utah, and by the 1880s,
the Knights of Labor and the Grange both promoted member-owned organizations. Energy co-operatives
were founded in the U.S. during the Depression and the New Deal. Diverse kinds of co-operatives
were founded and have continued to perform successfully in different areas: in agriculture,
wholesale purchasing, telephones, and in consumer-food buying.
James Warbasse, an American doctor, became the first president of the U.S. National Co-operative
Business Association. He wrote extensively on co-operative history and philosophy. Benjamin
Ward began an important effort in co-operative economic theory in the 1950s, with Jaroslav
Vanek developing a general theory. David Ellerman began a line of theoretical thinking beginning
with legal principles, developing especially the labor theory of property, and later reaching
a treatment which evaluates the role of capital in labor managed firms using the conventional
economic production formula Q = f. At one point in the 1990s he worked at the World
Bank with Nobel laureate Joseph Stiglitz.
Co-operatives today Co-operative enterprises were formed successfully
following Rochdale, and an international association was formed in 1895. Co-operative enterprises
are now widespread, with one of the largest and most successful examples being the industrial
Mondragón Cooperative Corporation in the Basque country of Spain. Mondragon Co-op was
founded under the oppressive conditions of Fascist Franco Spain after community-based
democracy-building activities of a priest, Jose Maria Arizmendiarrieta. They have become
an extremely diverse network of co-operative enterprises, a huge enterprise in Spain, and
a multinational concern. 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. There are also concrete proposals for the cooperative
management of the common goods, such as the one by Initiative 136 in Greece.
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 MPs 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, especially in the farming and industrial sectors.
Co-housing is also common in Denmark in which residents share a common eating and gathering
space. In some instances, the living spaces are financed by the Danish Housing Association,
but other times residents collectively own the land and property.
In Germany, the rebuilding of the country after World War II created a legislative opportunity
in which politician Hans Boeckler significantly lobbied for the Co-Determination policies
which were established, requiring large companies to include a Workers' Council in the Board
of Directors. These policies have had some influence on European Union policies.
Emilia Romagna, Italy had two separate and strong co-operative traditions that resisted
Cold War interference by US agencies and have worked effectively in conjunction with each
other.
Co-operative banks have become very successful throughout Europe, and were able to respond
more effectively than most corporate banks during the 2008 mortgage-securities crisis.
Renewable Energy co-operatives in Europe became important in the early development of windpower
in Denmark beginning in the 1970s. Germany followed in the early 1990s, first on a larger
scale with wind co-ops, then with a citizen's movement which challenged the reliance on
nuclear power, organized, challenged the energy monopolists there, and successfully created
a successful co-op social enterprise by 1999. A citizen's group began operating wind turbines
and involving broad community ownership in the U.K. by 1995. Deregulation of the electricity
markets allowed energy co-operative social entrepreneurs to begin to create alternatives
to the monopolies in various countries. In France, where an enormous percentage of the
power is generated by nuclear sources, this occurred after 2000. In Spain, wind power
was developed by corporate-led efforts, and it took longer for a renewable energy-focused
social enterprise to get established. Similar renewable energy co-ops around Europe have
organized in a network.
Asian societies have adapted the co-operative model, including some of the most successful
in the world. Nevertheless, the crises generated by traditional inequalities and the shareholder
model continues to require civil society and entrepreneurial responses, such as the Citizens
Coalition for Economic Justice in South Korea, the Seikatsu Club Consumer Co-operative in
Japan, and the Self-Employed Women's Association in India. Other noteworthy efforts include
Sophon Suphapong's efforts as governor in Thailand with agricultural co-ops and Antonio
Yapsutco Fortich's contributions in the Philippines helping formulate a co-operative strategy
with sugar workers.
The International Labor Organization, originally established in 1919, has a Co-operative Division.
Co-operatives were brought to Latin America and developed there by 1902. Substantially
independent efforts to develop employee-owned enterprises or co-operatives have occurred
as responses to crises, such as the systemic IMF-based default in Argentina in 2001 In
Brazil, the World Social Forum process lead to the articulation of Solidarity Economics,
a modern, activist formulation of co-operativism, with the MST landless worker's movement demonstrating
enormous courage and social entrepreneurship. In Venezuela, the late Hugo Chávez's administration
began to incentivize co-operatives, resulting in their rapid and extensive development there.
The Fair Trade certification movement established first in the Netherlands in 1988 with an international
headquarters in Bonn nine years later requires member farmers to have established a co-operative.
In 2016, UNESCO inscribed "Idea and practice of organizing shared interests in cooperatives"
on the Representative List of the Intangible Cultural Heritage of Humanity.