The history of the cooperative movement

concerns the origins and history of

cooperatives. 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, although The Shore

Porters Society claims to be one of the

world's first cooperatives, being

established in Aberdeen in 1498. The

industrial revolution and the increasing

mechanism 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 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, credit unions 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.

The 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.

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

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.

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.

The organization still exists today as

the Co-operative Women's Guild and

participates in social justice activism.

Other developments
An independently formulated co-operative

model was developed in Germany, the

credit union, by Raiffeisen and

Schultz-Delitsch. The model was carried

abroad reaching the United States by

1910. By the 1930s, a national

association was formed in the U.S. This

organization began to develop

international programs, and by the
1970s, a World Council was formed.
Co-operatives in the U.S. have a long

history, including an early factory in

the 1790s. 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 was an American doctor

who 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(K, L).

At one point in the 1990s, he worked at

the World Bank with Noble 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.

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.

Emiglia Romana, 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 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, USA the

Meadowlark cooperative administers 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 foods, 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 U.S. Federation of

Worker Co-operatives 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
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.
See also
British co-operative movement
Agricultural cooperatives

Cooperative economics
Social economy

Solidarity economy
Sovereigns of Industry

Cooperative Stock Market

References

Further reading
Birchall, Johnston, The International

Co-operative Movement.
For All The People: Uncovering the

Hidden History of Cooperation,

Cooperative Movements, and Communalism

in America, PM Press, by John Curl, 2009

Derr, Jascha, The cooperative movement

of Brazil and South Africa

Greider, William, The Soul of

Capitalism.
Kelly, Marjorie, Owning Our Future: The

Emerging Ownership Revolution.

Nadeau, E.G. & D.J. Thompson,

Cooperation Works!
Thompson, D.J., Weavers of Dreams:

Founders of the Modern Cooperative

Movement.

Whyte, W.F. & K.K. Whyte, Making

Mondragon.

External links
History of RECs

Over 160 rulebooks of co-operative

societies from Great Britain and

Ireland, 1877–1921, are available online

Digital Collection on the History of

Cooperatives in Utah: "Extension,

Enterprise, and Education: the Legacy of

Co-operatives and Cooperation in Utah":

Utah State University