What is a Co-op?

Lee Hartman,
Neighborhood Food Co-op, 104 E. Jackson St., Carbondale, IL 62901, U.S.A.

[ Lhartman@siu.edu ]

"You can have public ownership of the means of production without State ownership. You can have free enterprise without capitalism" (The Economist, Dec. 11, 1976, headline on co-ops in Spain).

"A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise" (International Cooperative Alliance, "Statement of Cooperative Identity", September 1995).

Cooperatives keep economic benefits within the community. Profit is not siphoned off by outside interests. The co-op's members are its owners.

There are consumer co-ops (food, housing, rural electric power, credit unions, etc.); producer co-ops (farming, fishing...); and worker co-ops (carpenters, mechanics...). There are co-ops for day care, health care, farm supplies, insurance, tourism, and more. A "primary" co-op has human beings for members; a "secondary" co-op has whole co-ops for members. It is estimated that more than 750 million people in the world are members of one or more co-ops.

How did co-ops begin? In the late 1700s, the Industrial Revolution was transforming the economy of England. Mass production was driving independent artisans out of business, and factory wages were plunging. Industries were constantly looking for ways to reduce labor costs, like the "downsizing" corporations of today. As early as 1760, in response to these hardships, a group of shipyard workers in northern England set up cooperative flour mills and a bakery to break a local monopoly that was making bread unaffordable.

Co-ops continued through the early 1800s with the planned communities of Robert Owen -- first in Scotland, and later in the U.S. at New Harmony, Indiana (now a "museum town", 28 miles west of Evansville).

But the modern cooperative movement began in 1844, near Manchester, England, when a group of flannel weavers in a factory founded the Rochdale Society of Equitable Pioneers. Their first food store, open only two evenings a week, sold butter, sugar, flour, and oatmeal.

From the beginning, co-ops stressed the purity of foods and honest dealing. They also stressed the principle of democratic control: one member, one vote -- not votes in proportion to capital. Women members had their own share accounts, 40 years before British law allowed married women to keep their own property.

Surplus earnings -- the "profits" that in capitalism go to investors -- were returned to the customer/owners in proportion to their purchases. The Rochdale Pioneers grew phenomenally. They opened branch stores and a wholesale department for other co-ops; they diversified into non-food products such as clothing and hardware; and they started doing some of their own manufacturing (cloth, boots, soap, cabinetry...). Eventually the Rochdale cooperative owned its own tea farms in India and its own ships to bring the tea to England.

From these beginnings in England, the Cooperative Movement expanded to other industrialized capitalist countries (including the USA), as well as to countries with planned economies such as the Soviet Union and China. After World War II, many new national governments in Africa and Asia tried to use co-ops as a tool for economic development, with varying success.

The International Cooperative Alliance was formed in 1895 in order to "promote and protect cooperative values and principles". The ICA has issued a set of Cooperative Principles on three occasions: 1937, 1966, and in September 1995. The latest statement begins by declaring a set of values: "Cooperatives are based on the values of self-help, self- responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility, and caring for others." The 1995 statement goes on to list seven principles that are to serve as guidelines for putting these values into practice. The principles include open membership, democratic control, and concern for the sustainable development of communities. Cooperatives are to be user-owned and user-controlled for user benefit.

Co-ops in the twenty-first century will face stiff competition from large capitalist corporations, but they continue to offer an extremely flexible way of pooling individuals' resources in order to improve the wellbeing of the entire group. Co-ops promote the idea of modest savings or benefits for all, rather than excessive accumulation of profits by a few.

  • Birchall, Johnston. Co-op: The People's Business. Manchester: Manchester University Press, 1994.
  • "cooperative-bus@relay.doit.wisc.edu". Electronic mailing list. Send message to "listserv@relay.doit.wisc.edu" saying "subscribe cooperative-bus ".
  • "Directory of U.S. Food Cooperatives". Web site with links to other good sites. http://www.prairienet.org/co-op/directory .html
  • Hoyt, Ann. "Cooperative Principles Updated". Cooperative Grocer, 62 (Jan.-Feb. 1996), 18-22.

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