Cooperative business

 Food and Cooperatives



 Working Class Institutions

The cooperative business was devised during the 19th century as a counter to the exploitation felt by ordinary people from "conventional" businessmen - especially in consumer shops. This included poor quality of food (adding poisonous ingredients to increase profits). (See James Gilk)

The pioneering cooperative retail shop was devised in Rochdale Lancashire. These are generally known as the Rochdale Pioneers. It started by an agreement to buy in bulk and share the profits among the members.

From this single business there spread a network of cooperative stores throughout Britain, imitated in many other countries. Any profit made was returned to the customer members in the form of the "dividend", after allowing for investing in the business. The network of coop shops built up a suppliers' business in the form of farms and food processing factories.

A pioneer in promoting cooperatives of Producers - workers making things - was Robert Owen who was responsible for the New Lanark factories near Glasgow in Scotland.

Another form of cooperative is the John Lewis chain of department stores found in most large cities in Britain, and its supermarket affiliate Waitrose. The business began as a conventional store, owned by John Spedan Lewis. He was afraid that the gap between ordinary people's income and the wealth of capitalists would lead to revolution. His response was to donate the business to an employee trust so that the employees - known as Partners - are owners and receive an annual bonus depending on the profitability of the business. Since being formed the business has been a success and has expanded continually with new stores and a new chain of supermarkets (Waitrose).

Cooperative producer businesses are also found. One of the most successful is said to be the Mondragon network in Spain, founded in the Basque Country during the Franco regime. See the book by Race Mathews for a full description or this web site.

Advocates of cooperatives see them as an alternative to the Capitalist system, and a cure for the imbalance within society between the Owners and the Workers - one version of socialism.

When the industrial revolution began, the conventional system of business ownership treated ordinary people as serfs like the village workers they had been, but without the occasional benevolence of the village "Squire". It made the owners very rich, so that they took the place of the descendants of the feudal landowners as the people with the wealth who made things happen. Consumers tend to be treated only as buyers rather than as fellow human beings.

Former socially owned businesses such as the gas companies and former building societies change in their attitudes to their customers if they are "privatised". The member-owner of a building society has a say in how it is run (easier with the smaller societies than with the larger). The customer of a large investor owned company is treated merely as a source of money - a "mark" to be exploited.

If the "economy" were to be dominated by cooperatives could the financial catastrophe of 2007-9 have occurred? The conventional system (capitalism) has ended with the bankers in control, able to use the money generated as profits as they wish. Clearly, they have no incentive to treat ordinary people well. In a cooperative those profits would not end in these quasi-feudal hands. "Derivatives" and Casino capitalism would not have arisen. Cooperative is also a means of filtering out the psychopaths who dominate modern business, with their lack of ethics.

The best solution to the mass unemployment that has occurred in Europe and the United States may be to replace the investor owned business by Common Ownership businesses.

Common Ownership

Mondragon enters the US

Interesting Reading

Race Mathews - Jobs of our own description of Mondragon and others

Jobs of Our Own: Building a Stake-Holder Society

Richard Williams - The cooperative movement

The Cooperative Movement: Globalization from Below

BBC radio 4 on cooperatives.
Nick Robins - The Corporation that changed the world

The Corporation That Changed the World: How the East India Company Shaped the Modern Multinational

Last revised 12/06/12


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