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The Cooperative Movement

The Co-operative movement started during the second half of the industrial revolution. With the loss of the common use of land, workers had nothing to sell but their labour, and it was a buyers’ market. Those who failed to find work in the factories were forced either to rely on meagre parish relief, or to starve. By the early 1800s, food prices were artificially high and wages were being reduced, while much of the population suffered extreme poverty and deprivation.

During the early part of that century, the social reformer Robert Owen (b.1771, d.1858) commenced some of the first experiments in co-operation. A Welshman who had made his fortune in cotton, Owen was convinced that working-class people, given the right environment, could form co-operative communities. He put this into practice in New Lanark, Scotland, where his own business was based. For his employees, he built an Institute for the Formation of Character, which contained schoolrooms, public halls, community centres, and a nursery school — all extremely radical ideas for the time. Owen believed that these villages of co-operation would solve the problems of poverty, by allowing people to opt out of capitalist society and into a New Moral World.

Owen went on to establish other model communities in America and Glasgow,in keeping with his socialistic vision. Although these experimental mini-societies eventually foundered, he communicated some of the profound underlying values of co-operation to those who would later make them work, and Owen is thus seen as the spiritual father of the co-operative movement.

1827 : Dr William King (b.1786, d.1865) founded a monthly periodical, The Co-operator. It was published for the next three years, and during that time set out a complete social and economic philosophy of co-operation. He urged the formation of small, local co-operatives to tackle the effects of the raw capitalism cutting across the country :

These evils may be cured: and the remedy is in our own hands. The remedy is CO-OPERATION.

Setting out the theory, he wrote that co-operation is not the immediate and general adoption of a new order of things, foreign to the ideas and habits of a race of beings the very law of whose existence is HABIT; but the slow and gradual formation of small societies of the more intelligent workmen, laying aside their antipathies and animosities, and uniting their labour for a common good attainable by union alone. Although after 1830, when The Co-operator ceased publishing, King was not involved with the practical formation of co-ops, his pamphlets served as guides for the future success of others.

1844 : A number of strikes by weavers in Rochdale over the preceeding 40 years had failed to have the lasting effect of improving wages and living conditions. After the collapse of the 1844 strike, the weavers wondered if there was a better way of improving their situation. They decided to form the Rochdale Equitable Pioneers Society, which started off with 28 subscribers — the original Rochdale Pioneers. They decide to begin with a shop; King had written that this should be so because :

We must go into a shop every day to buy food and necessaries — why then should we not go into our own shop?

Although the Rochdale Society was not the first co-operative, it was the first really successful one, from which others took their lead.

In setting up the society, the Pioneers established a number of fundamental principles which went on to be the foundation of the co-operative movement :

democracy; open membership; distribution of the surplus produced from the store dividend on purchases (this is the famous Co-op divvy, paid to those who lend capital, those who work in the business, and those who are customers at the store); commercial honesty (unlike many other traders, the society’s store sells only pure and unadulterated goods); and education (2.5% levy on purchases is set aside for a fund with the aim of intellectual improvement of the members and their families).

By the end of the year the Rochdale Pioneers’ Co-op store had opened for business in one small room of an old warehouse in Toad Lane, Rochdale. On sale were butter, sugar, flour, oatmeal and candles. After a slow start, the store succeeded in expanding its stock, and the Society gradually increased in membership. Trade increased to such an extent that by 1856 other branches had opened.

By 1867 the original Toad Lane shop occupied the entire warehouse; it subsequently expanded to other buildings nearby. By the 1860s the Society had accumulated 300,000 pounds in capital.

1861 : Formation of The Rochdale Pioneers Land and Building Company, with the aim of constructing a superior class of dwelling for the working man. 25 houses were built for Rochdale society members. Within six years, the company built an entire Co-operative estate comprising 84 houses. By the end of the century the Rochdale Society was renting out more than 300 homes at an affordable price.

1863 : The Co-operative Wholesale Society (CWS) was set up, a vertical expansion to form a federal wholesale agency. Co-operatives were now also responsible for the wholesaling and production of the goods that the steadily growing number of Co-operative societies needed to sell in their stores.

There was a pressing need for a federal wholesale agency, the market being one in which small Co-op societies found themselves rebuffed by private wholesalers, sometimes even boycotted; supplies had also been cut short or of poor quality. Now, however, the CWS could set up its own factories to process the food and other good required by its own customers, and control its own imports. It imported tea from India, for example, and soon had its own plantations. Before long it also owned the ships that brought its tea to Britain.

1867 : The Co-operative Insurance Company was formed. By the 1980s, it was one of the country’s leading insurers, serving over four million families.

1870 : The massive success and growth of the Co-op movement was a source of both pride an anxiety to its leaders. There was a worry that co-operation might be in danger of losing its original vision — that the desire to change the world could be forgotten in the midst of material success. It was agreed that the need existed for a national organisation to bind the movement together and emphasise its wider role in society; that an annual national Co-operative Congress be held; and that a central federal body be set up to which all societies could belong : the Co-operative Union.

The Union quickly established itself as the backbone of the movement; working at local, regional and national level to nurse ailing Co-operative societies, it helped stamp out bad management and promote the setting up of new Co-ops. It organised the yearly Co-operative Congress, and also defended the movement’s interests at a national level.

1883 : Alice Acland founded the Women’s Co-operative Guild. In her initial appeal to women Co-op members, she wrote :

What are men always urged to do when there is a meeting held at any place to encourage or to start Co-operative institutions? Come! Help! Vote! Criticise! Act! What are women urged to do? Come and buy… That is the limit of the special work pointed out to us women!

The Guild set out to remedy this by educating and raising the confidence of women members in their own autonomous local guilds attached to each Co-op society, and later by sponsoring women as candidates for places on Co-op boards of directors, sectional boards, and even as CWS directors.

Mary Llewelyn Davies was elected secretary of the Guild in 1889. In her 32 years in the post, she turned it into an effective campaigning organisation whose influence extended far beyond the Co-op movement and into the nation at large. During her reign, the Guild undertook research into subjects such as female local councillors, women factory inspectors, women and labour legislation, women’s suffrage, and women’s trade unions. Among the Guild’s greatest achievements was getting maternity benefits included in the 1911 Insurance Act. It also succeeded in getting the divorce laws changed so they were fairer to women.

1903 : Albert Mansbridge, a CWS employee, set up the Workers Educational Association (WEA), with its first two branches in Reading and Rochdale. The idea was for the WEA to give working-class people the chance to study, not just through a series of lectures, but through intensive tutorial work. One of the first WEA tutors was R.H. Tawney, one of the finest economic historians and philosophers of socialism of this century.

1904 : With the CWS already running a convalescent home to which retail societies could send sick members, the Co-operative Insurance Society started to offer death benefits; now Co-op societies could ensure that all their members were well looked after, literally from the cradle to the grave….

1914 : Within weeks of the outbreak of the First World War, the CWS was turning out 10,000 suits a day for the army, had stockpiled 70,000 blankets, and was working flat-out to supply the government’s food needs at prices as close as possible to cost. Co-op halls got requisitioned for troops, CWS drivers went to France to drive for the army, and factories were turned over to war production. As the war continued the sacrifices became greater. The CWS agreed to pay the difference between all their employees’ army pay and their Co-op wages.

Such loyalty to the country, however, was not reciprocated by the government. Private traders profiteered by hoarding food and then releasing it at higher prices, so the Co-op movement asked the government for a national system of rationing to control prices and give fair shares to all. The government initially refused. When rationing was eventually introduced for sugar, the Co-operative Union was refused representation on the government commission set up to control it — even though the Co-op was the largest wholesaler and retailer of sugar in the land! All the Co-op could do was undersell its competitors, to keep price rises in check. Private traders, resentful of their Co-op competitors, started excluding Co-op members from local War-Relief committees, to which the Societies contributed generously. Local military service tribunals were also packed with private traders, who took the opportunity to send Co-op members to the battlefront, while exempting their own workers. As the historian Sidney Elliot later observed :

Every action of the government seemed to indicate a latent hostility to Co-operators, and an assumption that the only system for the distribution of commodities was that of the private merchant, wholesale dealer and shopkeeper!

The overwhelming feeling of Co-operators coming out of the war was one of bitterness and anger at the way they had been treated.

1917 : Following their experiences during the war, the Co-operators’ view on political neutrality, which stood firm through all the previous decades against attempts to propel the movement into politics, got reversed at the Annual Congress. They now decided to seek representation in parliament and local government in their own right. A National Co-operative Representation Committee was set up. In spite of the government’s hostility during the now-ended war, the movement had never looked stronger; national membership had risen to four million, and it was by far the world’s largest business enterprise under the administration of the wage-earning class. Within a year, the Co-operative Party was formed.

1918 : At the general election, Alfred Waterson became the first Co-op MP, for the seat of Kettering. He immediately joined the Labour Party and became a member of the Labour parliamentary group — pre-empting the expected debate on how a Co-op MP should operate once elected.

1922 : Four independent Co-op MPs were elected in the general election. Despite past votes by the annual Congress against any direct alliance with the Labour Party, it was seen that in practice this was impractical; all four new MPs had been elected only with the agreement of the Labour Party anyway, and took the Labour whip in parliament. So the two parties worked together to produce Labour and Co-operative MPs at every election.

1927 : The Labour Party conference and Co-operative Congress each passed a joint working scheme that formalised their links.

1939 : The Second World War. This time, there was no way the government could ignore such a strong and extensive movement. CWS officials served on many advisory bodies for food and non-foods. Contact with the government started well before war was declared. Despite the strong anti-war feelings the movement held in the 1930s, there was no doubting its willingness to serve the nation in this war. Co-op factories were turned over to produce goods for the war — like sandbags, aircraft parts and uniforms.

1942 : A member of the London Co-operative Society tried out an idea he saw in America : take away the counter of the Co-op shop and give customers a basket, letting them wander round the store picking their own goods. They pay at a smaller counter at the exit. This revolutionary idea lifted the limits on store-size. The supermarket had arrived!

1955 : Following the Co-op movement’s first-ever experience of a halt in growth, the Co-operative Independent Commission Report was set up. The inquiry recommended a drastic program of modernisation to update its practice and image. It also recommended a national strategy to counter the competition. These changes, however, were slow to be carried out, and over the years major retailers like Sainsbury and Marks and Spencer emerged as serious competitors to high street Co-ops.

1976 : In response to the mushrooming of workers’ co-operatives, the industrial Common Ownership Act was passed and the National Co-operative Development Agency formed. The Act aided the setting up of local authority based Co-op development agencies — business advice agencies for people wishing to set up their own Co-ops.

1979 : The Credit Union Act, one of Labour’s last pieces of legislation, was passed. Credit unions could now be formed, with easier lending facilities for millions of people and lower interest rates. They provide working-class people with much-needed relief from loan-sharks.

1974 : A key piece of legislation, the Housing Act, is passed. It made available capital grants for non-profit housing schemes, and thus led to the greatest ever expansion of Co-operative housing.

1994 : 150 years after the Rochdale Pioneers first decided to set up shop, the Co-operative movement could boast 700 million members worldwide, looking after ordinary working-class people from the cradle to the grave in more than 100 countries.

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