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Traditional Cooperative

History of the cooperative movement


The cooperative movement began in Europe in the 19th century, primarily in Britain and France, although The Shore Porters Society claims to be one of the world's first cooperatives, being established in Aberdeen in 1498 (although it has since demutualized to become a private partnership). The industrial revolution and the increasing mechanism of the economy transformed society and threatened the livelihoods of many workers. The concurrent labour and social movements and the issues they attempted to address describe the climate at the time.
The first documented consumer cooperative was founded in 1769, in a barely furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society.
In the decades that followed, several cooperatives or cooperative societies formed including Lennoxtown Friendly Victualling Society, founded in 1812.
By 1830, there were several hundred co-operatives. Some were initially successful, but most cooperatives founded in the early 19th century had failed by 1840. However, Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England Co-operative Society), and Galashiels and Hawick Co-operative Societies (1839 or earlier, merged with The Co-operative Group) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers established the "Rochdale Principles" on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established.
Financially, credit unions were invented in Germany in the mid-19th century, first by Franz Hermann Schulze-Delitzsch (1852, urban), then by Friedrich Wilhelm Raiffeisen (1864, rural). While Schulze-Delitzsch is chronologically earlier, Raiffeisen has proven more influential over time – see history of credit unions. In Britain, the friendly society, building society, and mutual savings bank were earlier forms of similar institutions.


Co-operatives today

Co-operative enterprises were formed successfully following Rochdale, and an international association was formed in 1895. Co-operative enterprises are now widespread, with one of the largest and most successful examples being the industrial Mondragón Cooperative Corporation in the Basque country of Spain. Mondragon Co-op was founded under the oppressive conditions of Fascist Franco Spain after community-based democracy-building activities of a priest, Jose Maria Arizmendiarrieta. They have become an extremely diverse network of co-operative enterprises, a huge enterprise in Spain, and a multinational concern. Co-operatives were also successful in Yugoslavia under Tito where Workers' Councils gained a significant role in management.
In many European countries, cooperative institutions have a predominant market share in the retail banking and insurance businesses. There are also concrete proposals for the cooperative management of the common goods, such as the one by Initiative 136 in Greece.An annual general meeting of a retail co-operative in England, 2005.
In the UK, co-operatives formed the Co-operative Party in the early 20th century to represent members of co-ops in Parliament. The Co-operative Party now has a permanent electoral pact with the Labour Party, and some Labour MPs are Co-operative Party members. UK co-operatives retain a significant market share in food retail, insurance, banking, funeral services, and the travel industry in many parts of the country.
Denmark has had a strong cooperative movement.
In Germany, the rebuilding of the country after World War II created a legislative opportunity in which politician Hans Boeckler significantly lobbied for the Co-Determination ("Mitbestimmung") policies which were established, requiring large companies to include a Workers' Council in the Board of Directors. These policies have had some influence on European Union policies.
Emilia Romagna, Italy had two separate and strong co-operative traditions that resisted Cold War interference by US agencies and have worked effectively in conjunction with each other.
Co-operative banks have become very successful throughout Europe, and were able to respond more effectively than most corporate banks during the 2008 mortgage-securities crisis.
Renewable Energy co-operatives in Europe became important in the early development of windpower in Denmark beginning in the 1970s. Germany followed in the early 1990s, first on a larger scale with wind co-ops, then with a citizen's movement which challenged the reliance on nuclear power, organized, challenged the energy monopolists there, and successfully created a successful co-op social enterprise by 1999. A citizen's group began operating wind turbines and involving broad community ownership in the U.K. by 1995. Deregulation of the electricity markets allowed energy co-operative social entrepreneurs to begin to create alternatives to the monopolies in various countries. In France, where an enormous percentage of the power is generated by nuclear sources, this occurred after 2000. In Spain, wind power was developed by corporate-led efforts, and it took longer for a renewable energy-focused social enterprise to get established. Similar renewable energy co-ops around Europe have organized in a network.
Asian societies have adapted the co-operative model, including some of the most successful in the world. Nevertheless, the crises generated by traditional inequalities and the shareholder model continues to require civil society and entrepreneurial responses, such as the Citizens Coalition for Economic Justice in South Korea, the Seikatsu Club Consumer Co-operative in Japan, and the Self-Employed Women's Association in India. Other noteworthy efforts include Sophon Suphapong's efforts as governor in Thailand with agricultural co-ops and Antonio Yapsutco Fortich's contributions in the Philippines helping formulate a co-operative strategy with sugar workers.
The International Labor Organization, originally established in 1919, has a Co-operative Division.
Co-operatives were brought to Latin America and developed there by 1902. Substantially independent efforts to develop employee-owned enterprises or co-operatives have occurred as responses to crises, such as the systemic IMF-based default in Argentina in 2001 In Brazil, the World Social Forum process lead to the articulation of Solidarity Economics, a modern, activist formulation of co-operativism, with the MST landless worker's movement demonstrating enormous courage and social entrepreneurship. In Venezuela, the late Hugo Chávez's administration began to incentivize co-operatives, resulting in their rapid and extensive development there.
The co-operative model has a long history in the U.S., including a factory in the 1790s, the Knights of Labor, and the Grange. In Colorado, USA the Meadowlark cooperative administers the only private free land program in the United States, providing many services to its members who buy and sell together. In New York City, several food co-operatives were founded around 2010, adding to others, some existing since the 1970s. The U.S. has some diverse worker co-operatives, such as a home care agency, an organic bread factory co-op and an engineering firm. Some have already incorporated environmental and/or Fair Trade criteria into their products, such as the aforementioned bread-maker, Organic Valley foods, and Equal Exchange.
Credit unions were established in the U.S. by 1908. Their member-owned, co-operative structure created stable governance structure, so that they were only slightly affected by the 2008 mortgage securities crisis.
Electrical co-operatives became an important economic strategy for U.S. rural areas beginning in the 1930s, and continue to operate successfully through events such as Hurricane Sandy in 2012. However, the majority in the U.S. demonstrate that co-operative values do not necessarily lead to a progressive social and environmental consciousness, as many remain focuses on fossil fuel and nuclear fuels. Nevertheless, new generation renewable power co-operatives have begun to be organized.
Agricultural co-operatives in the U.S. have had some mainstream success, including Welch's, Ocean Spray, and Land O'Lakes.
In the United States, a co-operative association was founded by 1920. Currently there are over 29,000 co-operatives employing 2 million people with over $652 billion in annual revenue. To address the need for an organization oriented to newer and smaller co-ops, the United States Federation of Worker Cooperatives was founded after 2000.
An alternative method of employee-ownership, the Employee Stock Ownership Plan (ESOP), was developed in the U.S. by Louis Kelso and advocated by Senator Russell Long to be incentivized in the ERISA law of 1974. For example, a large Southeastern US supermarket chain a California manufacturer, and a furniture-maker with earnings of more than $2 billion, are employee-owned. Employee-owned trusts have also been developed more or less independently, for example at an established iron pipe company
The Fair Trade certification movement established first in the Netherlands in 1988 with an international headquarters in Bonn nine years later requires member farmers to have established a co-operative.