Unit 1: History of Co-operative Thought

Introduction: What is Co-operative Thought?

Co-operative thought is an idea or philosophy that people can work together voluntarily to meet their common economic, social, and cultural needs.
It is based on values like self-help, equality, democracy, and mutual respect.

The concept evolved over time through different thinkers and models — mainly before and after the Rochdale Movement.

Pre-Rochdale Co-operative Thought (Before 1844)

Before the official cooperative movement began, several thinkers and social reformers gave early ideas about cooperation. The main goal was to reduce poverty and inequality during the Industrial Revolution (when factories and machines were replacing human labor).

a) Robert Owen (1771–1858) – “Father of Cooperation”

A successful businessman and social reformer from Wales.

Main Ideas

• Believed that the environment shapes human behavior.
• Said workers’ problems (like poverty, long hours, low wages) could be solved if people worked and lived cooperatively.
• Promoted the idea of “Villages of Cooperation” — self-sufficient communities where people would share resources and profits.
• Improved conditions in his factory at New Lanark (Scotland) by reducing working hours, building schools, and providing housing.

Contribution: Owen’s experiments inspired future cooperatives, even though his large-scale plans didn’t always succeed.

b) Dr. William King (1786–1865)

A medical doctor from England who believed in “practical cooperation.”

Main Ideas

• Started a monthly journal called “The Co-operator” (1828) to spread cooperative ideas among common people.
• Believed that cooperatives should start small, such as cooperative stores run by workers themselves.
• Emphasized education as the key to successful cooperation.

• Famous Quote: “Knowledge and union are power.”

• Contribution: Dr. King helped ordinary workers understand how they could form and manage cooperatives.

c) Charles Fourier (1772–1837)

A French philosopher and social thinker.

Main Ideas

• Dreamed of creating “Phalanstères” – large self-sufficient communities where people would live and work happily together.
• Believed people should do the kind of work they enjoy.
• Supported collective ownership and profit-sharing among all members.

• Contribution: Though his ideas were idealistic, Fourier influenced later social movements and cooperative experiments in France and the U.S.

Rochdale Model (1844)

In 1844, 28 poor weavers and workers in Rochdale, England, formed the Rochdale Equitable Pioneers Society. They opened a small cooperative store selling everyday goods like sugar, flour, and tea.

Why It Was Successful

Unlike earlier experiments, this one succeeded because it followed clear principles — now known as the “Rochdale Principles.”

Rochdale Principles

1. Open Membership – Anyone can join.
2. Democratic Control – One member, one vote.
3. Limited Interest on Capital – Members get limited returns on investment.
4. Distribution of Surplus – Profits are shared based on members’ purchases, not investment.
5. Cash Trading Only – No credit, to avoid debt.
6. Promotion of Education – Members should be educated about cooperation.
7. Neutrality – No discrimination on religion, politics, or gender.

Significance: The Rochdale Model became the foundation for modern cooperatives worldwide — in banking, agriculture, housing, and consumer sectors.

Post-Rochdale Co-operative Thought (After 1844)

After the success of the Rochdale Pioneers, the cooperative movement spread quickly across the world. New ideas developed to make the system stronger and more inclusive.

a) Spread of the Movement

• Cooperatives started in Europe, America, and Asia.
• In India, cooperatives began during the British period to help farmers and small traders.

b) Key Developments

• Cooperatives were formed in agriculture, banking, credit, housing, and consumer goods.
• Governments began to pass cooperative laws and provide support.

c) Modern Cooperative Thinkers and Ideas

• Focus shifted to economic democracy, member participation, and professional management.
• International Cooperative Alliance (ICA) was formed in 1895 to promote cooperative values globally.
• Modern cooperatives use technology, marketing, and training to compete with private businesses.

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Summary Table

Phase	Thinkers/Contributors	Key Ideas	Significance
Pre-Rochdale	Robert Owen	Villages of cooperation, better working/living conditions	Father of cooperation
	Dr. William King	Practical cooperatives, education, small beginnings	Popularized cooperative idea
	Charles Fourier	Self-sufficient communities, collective ownership	Idealistic foundation for later cooperatives
Rochdale Model (1844)	Rochdale Pioneers	Clear cooperative principles, democratic control	First successful cooperative society
Post-Rochdale	ICA and others	Economic democracy, government support, professional management	Modern global cooperative movement

Dr. Warbasse, Charles Gide, Raiffeisen and Schulz

After the success of the Rochdale Model, many other thinkers contributed to developing and spreading the cooperative philosophy across the world.

(a) Dr. James Peter Warbasse (1866–1957)

An American physician and social reformer who became a leading figure in the cooperative movement in the United States.

Main Ideas:

• Believed that cooperation could bring economic independence and social justice to people.
• Promoted consumer cooperatives where people could buy goods at fair prices.
• Wrote several books on cooperative theory like “The Cooperative Movement in America.”
• Focused on education and unity among cooperative members.

• Contribution: Dr. Warbasse helped organize and lead the Cooperative League of the U.S.A., now known as the National Cooperative Business Association (NCBA).

(b) Charles Gide (1847–1932)

A French economist and professor who strongly supported the cooperative movement in Europe.

Main Ideas

• Believed that cooperatives could replace capitalism by creating a fairer economic system.
• Promoted “Cooperative Republic” — an economy where cooperatives dominate production and distribution.
• Advocated for consumer cooperatives, because they help protect buyers from exploitation by middlemen.
• Emphasized education, ethics, and social responsibility in cooperatives.

• Contribution: He spread cooperative ideas through teaching and writing, inspiring many European cooperatives.

(c) Friedrich Wilhelm Raiffeisen (1818–1888)

A German social reformer who started rural credit cooperatives to help poor farmers.

Main Ideas

• Saw that farmers were trapped in debt due to moneylenders.
• Created credit cooperatives (Raiffeisen Banks) where members pooled savings and gave loans at low interest rates.
• His principles: self-help, self-responsibility, and self-governance.
• Focused on honesty, trust, and mutual aid.

• Contribution: He is called the Father of Credit Cooperatives. His model inspired many cooperative banks worldwide — including in India.

(d) Hermann Schulze-Delitzsch (1808–1883)

A German economist and politician who also worked for the upliftment of small traders and craftsmen.

Main Ideas

• Started urban credit cooperatives for artisans and small businessmen.
• Promoted self-help through savings and loans.
• His cooperatives were democratic and self-reliant (no government help).

• Contribution: He developed the urban cooperative bank model, while Raiffeisen worked for rural areas. Together, they laid the foundation for modern cooperative banking systems.

Capitalism, Socialism and Cooperation as Economic Systems

System	Basic Idea	Ownership	Goal	Main Features
Capitalism	Individual freedom in business	Private ownership	Maximize profit	Competition, inequality, consumer choice
Socialism	Collective welfare	State ownership	Equal distribution of wealth	Central planning, government control
Cooperation	Mutual help and shared benefit	Member ownership (democratic)	Service before profit	Voluntary membership, equality, democracy

In Simple Words

• Capitalism focuses on profit and individual benefit.
• Socialism focuses on equality but may reduce individual freedom.
• Cooperation balances both — it allows economic activity with social welfare through democracy and fairness.

Thus, cooperation is often called the “third way” between capitalism and socialism.

ICA Cooperative Identity Statement (1995)

The International Co-operative Alliance (ICA), formed in 1895, is a global organization representing cooperatives worldwide. In 1995, it adopted a formal “Co-operative Identity Statement” at its Congress in Manchester (UK).

The Statement Includes

A. Definition of a Cooperative

“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.”

Meaning in Simple Terms: A cooperative is a business owned and run by its members for their shared benefit, not just for profit.

B. Values of Cooperation

Cooperatives are based on the values of:

• Self-help – helping yourself by helping others
• Self-responsibility – taking responsibility for actions
• Democracy – equal voting rights
• Equality – fair treatment of all members
• Equity – justice and fairness
• Solidarity – working together for mutual benefit

Ethical values: Honesty, Openness, Social Responsibility, and Caring for others

C. Seven ICA Principles (1995)

No.	Principle	Meaning (Simple Words)
1	Voluntary and Open Membership	Anyone can join; no discrimination.
2	Democratic Member Control	One member = one vote; members make key decisions.
3	Member Economic Participation	Members contribute capital and share profits fairly.
4	Autonomy and Independence	Cooperatives are self-controlled, even when getting government help.
5	Education, Training and Information	Cooperatives educate members and promote awareness.
6	Cooperation among Cooperatives	Co-ops support each other locally and globally.
7	Concern for Community	Cooperatives work for sustainable community development.

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Summary Table

Thinker / Concept	Main Contribution	Key Idea
Dr. Warbasse	Spread cooperatives in the U.S.	Consumer cooperatives, education
Charles Gide	Cooperative Republic theory	Consumer protection, social reform
Raiffeisen	Rural credit cooperatives	Self-help, credit for farmers
Schulz-Delitzsch	Urban cooperative banks	Savings, self-reliance for workers
Capitalism	Private profit system	Profit motive, inequality
Socialism	State-controlled system	Equality, government ownership
Cooperation	Member-owned system	Economic democracy, mutual benefit
ICA 1995 Statement	Unified global cooperative definition	7 Principles, values, and ethics