Origins of Cooperation

The beginnings of much of the modern cooperative movement can be traced back to Great Britain in the early part nineteenth century. As the cradle of the Industrial Revolution, Great Britain was one of first countries to experience the pains of transition from an agrarian to an industrial economy. The story of how people reacted to these sweeping changes includes the origins of the first cooperatives.

Problems

The economic and political transitions associated with the Industrial Revolution had many consequences. Often workers in traditionally agricultural jobs found their wages dropping steadily as mechanization made the production of agricultural products cheaper and more efficient. These laborers were then forced to stop their independent enterprises and began working in factories for steadily decreasing wages. Soon industrial production became so efficient that overproduction occurred, thereby driving down both prices and wages further. Moreover, the wealthy new industrialists who controlled the factories also controlled the political landscape, thereby making it difficult, if not impossible, for workers to change their wages and working conditions. For example, workers were restricted from farming traditionally common lands, forbidden from organizing labor unions, required to buy goods only at company stores which provided poor quality products at inflated products, and forced to build large debts from buying on credit in order to just survive [1]. Even skilled artisans found their professions to be less in demand as the mechanization of production resulted in the splitting of tasks into simpler parts requiring less skill and the paying wages for piecework [2]. With conditions deteriorating to the point where labor was commonly considered as a mere commodity to be bought and sold at whatever price (regardless if this price was sufficient for the workers to provide for themselves and their family) and with the dominant economic theories of the day arguing that such a development was inevitable, people began to react to try to change their circumstances.

Solutions

Several approaches were possible. First, workers could try to reform the laws that governed labor and property rights through political action. A movement known as Chartism (1838-1848) attempted to secure better working conditions through mild social reform legislation but failed to have a lasting effect [3]. A second, more aggressive measure was to illegally organize labor unions and exert influence via strikes. After many failed attempts, the unions eventually became powerful enough that they were recognized by law and acted as a major power broker in industrial capitalism. But in the early part of the nineteenth century, this activity was risky and, for the most part, ineffective [4]. A third, even more extreme reaction was the philosophy of revolutionary socialism advocated by Karl Marx whereby the capitalistic exploitation would eventually lead to the overthrow of the industrial system and redistribution of wealth to the proletariat masses. While this movement also eventually established itself, mostly notably in Russia and China and to a lesser extent worldwide, it too was in a nascent state in England at that time with more ideals than practical plans. Finally, a more immediate and practical response developed under the name of "friendly societies" or "cooperative societies" whereby members would pool resources to develop enough capital to open their own mills, bakeries, stores, etc. They could then sell the produced goods at market prices but redistribute the surplus revenue back to members. Of course, cooperatives also faced difficulties in establishing themselves. In fact, many different cooperatives were formed prior to Rochdale (see the selected chronology below), all of which eventually failed. What made the Rochdale cooperative different was that it was the first cooperative that was successful over a long period of time.

Conclusion

In summary, the modern cooperative movement was founded as a response to the rise of poverty caused by the redistribution of wealth that occurred during the Industrial Revolution. In an effort to ameliorate their poverty (or at least ease their pain), people began to work together to create cooperative organizations that provided good quality products at prices affordable to themselves.

Side Bar:
Brief Chronology of Cooperation Prior to Rochdale

???? Ancient China and Japan
In China, loan societies called Yao Hui allowed members to contribute a given amount every week, creating a total sum which was drawn out by lot until each had received his share. A similar system developed in Japan called tanomushi [5].
1756 Philadelphia, Pennsylvania, U.S.A.
Benjamin Franklin helped to form the Philadelphia Contributorship of Insurance of Houses by Fire [6].
1760 Woolwich and Chatham dockyards, England
Cooperative bakeries were set up by shipwrights to provide reasonably priced bread to their families in reaction to a local monopoly of millers and bakers. The Woolwich mill was eventually burned down and the local bakers accused of arson [7].
1769 Fenwich, Scotland
A pioneers consumers' cooperative was founded to purchase work materials for its members and later food supplies [8].
1794 Mongewell, Oxfordshire, England
A local bishop set up a shop to allow villagers to buy goods at near wholesale prices. However, it was a cooperative only in the sense that it eliminated the "profit element." The shop was really only patronage store relying on the backing of a rich philanthropist and did not teach the values of self-reliance [9].
1812 Lennoxtown, Scotland
A consumer cooperative named the Lennoxtown Friendly Victualling Society. was established. The Lennoxtown Society distributed patronage refunds before the Rochdale pioneers, and hence some claim the Cooperative movement began in Scotland, not England [10].
1816 Sheerness, England
Skilled artisans rebelled against millers who were adulterating flour with china clay by establishing a cooperative baking society. Later this developed into a cooperative store run by the Sheerness Economical Society [11].
1825 Brighton, England
Local artisans organized the Brighton Co-operative Benevolent Fund Association to set up a cooperative general store, buy land, and employ unemployed members [12].
1828 London, England
George Mudie and some London printers founded the London Cooperative and Economical Society to attempt to put into practice a plan for a self-supporting community of 250 families and develop the first cooperative newspaper, The Economist [13].

Editor's Note: This is not a complete chronology, but only a sample of some of the cooperative efforts prior to the Rochdale Pioneers.

References

[1]
Johnston Birchall, Co-op: The People's Business (Manchester University Press, Manchester, UK, 1994), pp. 1-3.
[2]
Birchall, p. 6.
[3]
E.S. Bogardus, History of Cooperation (Cooperative Publishing Association, Superior, Wisconsin, USA, 1955), p. 10.
[4]
Birchall, p. 3.
[5]
Bogardus, pp. 57, 59.
[6]
Bogardus, p. 72.
[7]
Birchall, p. 4.
[8]
Bogardus, p. 19.
[9]
Birchall, p. 3.
[10]
Bogardus, p. 19.
[11]
Birchall, p. 5.
[12]
Birchall, p. 9-11.
[13]
Birchall, p. 9.

 

Copyright 1999 by Ronald Kumon


Laurel House Co-op & Laurel Net Cooperative / Austin, Texas, USA / Created 11 Mar 1999 / Updated 02 May 1999
This page is published by Laurel Net Cooperative, a registered student organization. This page is not an official publication of The University of Texas at Austin and does not represent the views of The University or its officers.

File translated from TEX by TTH, version 2.00. This page is best viewed by browsers that support HTML 3.2 or higher (Netscape 3.0+, IE 3.0+).