The idea of the cooperative is one of the greatest British inventions. It all began with a small shop in Toad Lane, Rochdale in Lancashire. The “Rochdale pioneers” wanted to change the world.

How to start a cooperative and change the world

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The pioneers of cooperation

By John Kuti

The idea of the co-operative is one of the greatest British inventions. To be more exact, it all began with a small shop in Toad Lane, Rochdale in Lancashire.

At the time of the “Rochdale pioneers” (the 1840’s) there were a number of suggestions as to how the lives of ordinary people could be improved:

1. Teetotalism: One simple answer was that their problems all came from drinking alcohol. All they had to do was stop drinking and keep the money for their families.

2. Chartism: Another opinion was the argument for democracy. The supporters of this view said that when everybody had the vote, the laws that kept poor people poor while the rich got richer would be changed.

3. Cooperation: the opinion that won… to work with the laws as they were and the very little money that they had.

People can easily work together for a short time. Examples of co-operation without money changing hands are everywhere, and often it’s the only way for the poorest people to achieve anything. Neighbours in slums might agree to clean out a drain, in a remote village they can set up a rota for bringing water. It’s easy to understand how everyone benefits from this sort of agreement, but the Rochdale pioneers wanted to do more than that. They wanted to create an alternative to capitalism, a way of organising their lives which would completely change their situation and, finally, change the world.

How to start

The process of setting up your cooperative is going to be long and difficult. The pioneers began with 28 members who each paid a subscription of 2 pence a week. I think it was important that they all knew and trusted each other, and that all of them had the same problems. They had to collect enough to rent a shop, their first project, at ten pounds a year. The records of early meetings show that they discussed how to spend every penny. If you calculate with old money there are 240 pence in a pound, so they had to be patient and start small.

Credits for the poor

It was impossible for the pioneers to borrow any money to begin their project. They tried to get advances from their employers but this was unsuccessful and caused the members a lot of problems at work because they got a reputation as radicals and trouble-makers. More recent experience, like the success of the Grameen Bank in Bangladesh, shows that a very small amount of money can be a vital start for the very poor.

The Rochdale pioneers were against credit on principle, and at the time, maybe they were right. Other similar projects ran into problems because they couldn’t make the interest payments on loans. Maybe the pioneers discussed and thought about their expenses more seriously because they had saved every penny of it themselves. The pioneers didn't want to give credit in their business either. Customers in their shop had to pay on the spot in cash. At that time, a lot of other shops offered credit to poor customers and took the payment when the workers received their wages.

Have cooperatives changed the world?

Nowadays, there are examples of very big and successful cooperatives: a lot of people in Britain do their shopping in John Lewis or Co-op supermarkets. A lot of people in Spain do theirs in Eroski. Unfortunately they haven’t changed the world, and I think this is mainly because they have not followed their own principles. They only share a small part of their profits, they do not work especially to provide things that poor people need or limit themselves to their local neighbourhoods. It seems that their success as business organisations has made them less radical and less effective as tools of development.

Five principles of the co-op movement which can still change the world:

1. Start with the most essential products

When the first cooperative shop opened in Rochdale on 21st December 1844 there were only four items on sale: flour, butter, sugar and oatmeal. As the business grew they added tobacco and tea, and later meat, books and magazines were sold on another floor of the building.

2. Produce and sell things within your own community

This means making things that low-income people need and use. In 1840s Rochdale it was difficult for workers to buy even basic foods. Nowadays maybe the problems are furniture, shoes or a taxi service. Cooperatives also work successfully to give housing and banking services in poor areas.

3. Do not link the cooperative with any religious or political views

The co-operators agreed to let people discuss any question at their meetings, but the organisation itself did not depend on any religious or political ideas. This seems to have helped the society to survive. New members wanted to join because of the practical benefits of buying from the shop. Anyone could join and it wasn’t important what political or religious opinions they had. It also meant that when the members disagreed about theoretical issues, it did not affect the organisation.

4. Use some resources for education

From the very start, the pioneers wanted to put a proportion of their profits into an educational fund. This, in time, became a library and a news-room on the first floor above the shop. The Mondragon group of cooperatives, which began in Spain about 100 years later, started with a school which taught practical subjects like mechanics and electronics.

5. Share the profits

Members of the coop paid in a weekly sum of 2 pence, which later rose to three. However these payments made them the owners of the shop and they received money back, five percent interest on the money plus their share of any profit the shop made.

Glossary

benefit (v.): to receive good things

capitalism (n.): the economic system where profits belong to the owner of a business.

drain (n.): a channel or pipe for taking away dirty water.

interest (n.): the extra money you have to pay back if you borrow money from a bank.

issue (n.): question or problem.

item (n.): thing.

low-income (adj.): receiving very little money.

profit (n.): the money that a business makes, its income minus all its costs.

remote (adj.): far away from other places.

rent (v.): to pay for using something for a particular period e.g. a building or a car.

rota (n.): a timetable which divides work among several people.

set up (v.): to organise / to arrange.

share (v.): to divide so that each person receives a certain portion.

slum (n.): a poor part of a city, often without basic services.

subscription (n.): a payment for a specific period, made every week or every month for example.

vital (adj.): very important, something which you must have.

vote (v.): (verb) to show your opinion in a democratic process.

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That is a good story.

This is amazing article! I like this

This article is very interesting, it has helped me understand the history of the cooperation but also how and where this way of working has been developing throughout the world.
I have been interested in cooperation since a few years and I thought it was a good way to avoid using the capitalism system. But in fact I realize with the article that : first it is not common in the world even in poor countries, second when the number of employees increases, the spirit of the cooperation may disappear and it’s a pity.
Near from my city, I know a firm that is based on the cooperation and I think it’s a chance to work in it.  With the international crisis, may be many people have  rethinking the type of society they want for the future and cooperation is a way to achieve that.
In fact one step at a time,  the changing is coming also thanks to  the new technologies. You can find on the internet several websites where you can lend a little amount of money to help someone whom you don’t know to start his project . And the examples are very different. You can help an African to buy a cow that will supply with what to live to his family and to go out of poverty. You can help someone of you own country who wants to open a shop. But you can also help a singer to make a CD.
I think it’s one way that people found  to help themselves without going to ask the banks  that are occupied  to earn money in a virtual way.

A Bad Experience with Cooperativism in Colombia
 
 
It's interesting the author's opinion about why cooperatives haven't changed the world, he says that's why cooperatives don't follow their rules and they're more interested now in profits and stuff than in helping the poor, and I agree with him, based mainly in the Colombian experience with labor cooperatives in recent years.
 
In Colombia, since twenty years ago, the State has subcontracted through Associated Labor Cooperatives, employees to work in different institutions, e.g. schools, governmental offices and hospitals, as cleaners, nurses and even doctors.
 
If you want to apply for these jobs you are obliged by the institutions to associate in a cooperative which hires with the former your services; when the institutions pay, cooperatives retain important sums of money from their workers, i.e. their own members, just for the benefit of their directors really. 
 
Most of these employees are paid by their cooperatives with less than one minimum wage, i.e., less than US$330 a month**, and when you sue for the fair payment, cooperatives directors can easily remove your membership and, of course, fire you. That's why anybody do take the risk. 
 
Since last year, president Santos has been taking measures in order to avoid that public institutions and private companies subcontract with labor cooperatives, but now the government wants to do some reforms to the cooperatives legal regime to promote cooperativism in Colombia.
 
So, cooperatives, as an alternative to capitalism, need to be encouraged but, at the same time, also watched and controlled by the government because maybe they can be an instrument for the rich to get richer and not really an effective aid for the needy. 
 
Carlos Andrés Pérez Garzón
 
 

** http://colombiareports.com/colombia-news/economy/21075-minimum-wage-to-i...
 

cooperation, which must be in human beings 
 

Bao Tan writes “This is an interesting article that helped me to know a lot about co-operatives in the world. Nowadays, There are more and more kinds of co-operatives in various domains. It's really profitable and expected to be expanded in future. Some body said that cooperation can make the power which allow us to change our world. But it would be better if the companies used a small proportion to improve education in their own nation. The main thing is that salaries should be paid fairly and reasonably, nobody should be poor or unemployed. Finally, co-operatives must not be linked to any religions or politics. In my country, Vietnam, co-operatives have become much more common than they were many years ago. The evidence shows that when lots of co-operatives are founded, the standard of living gets better and the income is higher than before. The right policies at present would be useful for Co-op development.” BuiDuyQuang writes “Now cooperatives are popular all over the world. In Vietnam people usually go to cooperatives. Examples are Metro or Maximax, etc. But in Vietnam cooperatives don't put a proportion of their profits towards education. If we want to increase the number of cooperatives in the world, we should share their profits among everybody. And don't mix in politics or religion.”