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.
BEGINNING
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,[1] 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.[5] Some were initially successful, but most cooperatives founded
in the early 19th century had failed by 1840.[6] 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.[7][8]
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.[9]
Financially, cooperative banks, called credit unions in the US, 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.
Robert Owen[edit]
Main article: Robert Owen
Robert Owen (1771–1858) 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[edit]
Main article: William King (physician)
Although Owen inspired the co-operative movement, others – such as Dr. William King (1786–1865) – 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,[10] 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).
Rochdale Pioneers[edit]
Main article: 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.[1] 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[edit]
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Main article: The 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 (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).
The old Co-operative building behind the Gateshead Millennium Bridge in Newcastle upon Tyne.
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 (CRTG), which sources and promotes goods for food stores.[11] There is a similar purchasing group
(CTTG) for co-operative travel agents.
Co-operative Women's Guild[edit]
Main article: 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.[33]
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.[34] Until recently the organisation
participated in social justice activism, but has now closed.[35]
Other developments[edit]
In Russia the village co-operative (obshchina or mir), 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.
[36]
Leland Stanford, the railroad magnate and Robber Baron, became a Senator and advocated for co-operatives.
[37]
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.[38]
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,[39] and by the 1880s, the Knights of Labor and the Grange both
promoted member-owned organizations.[40] Energy co-operatives were founded in the U.S. during the Depression
and the New Deal.[41] 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.[42][43][44]
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.[45] Benjamin Ward began an important
effort in co-operative economic theory in the 1950s, with Jaroslav Vanek developing a general theory.[46] 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(K, L). At one point in the 1990s he worked at the World Bank with
Nobel laureate Joseph Stiglitz.[47]
Co-operatives today[edit]
Co-operative enterprises were formed successfully following Rochdale, and an international association was formed
in 1895.[48] Co-operative enterprises are now widespread,[49] 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.[50][51][52][53] Co-operatives were also successful
in Yugoslavia under Tito where Workers' Councils gained a significant role in management.[54]
In many European countries, cooperative institutions have a predominant market share in the
retail banking[55] 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.
An annual general meeting of a retail co-operative in England, 2005.
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.[56]
Denmark has had a strong cooperative movement, especially in the farming and industrial sectors.[57] Co-housing is
also common in Denmark in which residents share a common eating and gathering space.[58] In some instances, the
living spaces are financed by the Danish Housing Association, but other times residents collectively own the land
and property. [59]
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 ("Mitbestimmung") policies which were established, requiring
large companies to include a Workers' Council in the Board of Directors.[60] These policies have had some influence
on European Union policies.[61][62]
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.[63]
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.[64][65][66]
Renewable Energy co-operatives in Europe became important in the early development of windpower in Denmark
beginning in the 1970s.[67] 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.[68][69] 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.[70] In Spain, wind power was developed by corporate-led efforts, and it took longer for a renewable
energy-focused social enterprise to get established.[71] Similar renewable energy co-ops around Europe have
organized in a network.[72]
Asian societies have adapted the co-operative model, including some of the most successful in the world.[73]
[74]
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.[75][76][77] 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.[78][79]
The International Labor Organization, originally established in 1919, has a Co-operative Division.[80]
Co-operatives were brought to Latin America and developed there by 1902.[81] 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[82] 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.[83][84] In Venezuela, the late Hugo Chávez's
administration began to incentivize co-operatives, resulting in their rapid and extensive development there.[85][86]
