Help, I Need Somebody: The Economic and Social Power of Cooperatives

rochdale-pioneers"Oh I get by with a little help from my friends." -- John Lennon and Paul McCartney, The Beatles, "Sgt. Pepper's Lonely Hearts Club Band," 1967

The United Nations has designated 2012 as the International Year of the Cooperatives, raising awareness about a democratic type of business ownership that has the power to advance human rights and social equality around the globe. It's the perfect time to assess the potential of this socially forward-thinking model: Global membership in cooperatives has hit the one billion mark, according to the Geneva-based International Co-operative Alliance (ICA), an independent NGO founded in 1895 that represents 267 co-ops around the world.

Unlike the traditional shareholder business model, co-ops are not only owned, but also governed, by their members. Today, the billion people who are members of cooperative span nearly 100 nations. In 2008, the 300 largest of these co-ops flexed their economic muscle, generating revenues of over USD 1.6 trillion--about the GDP of India, the world's 9th largest state economy.

YOU SAY YOU WANT A REVOLUTION

While today's statistics are impressive, the modern cooperative had humble beginnings. In the mid-18th century, British weavers were toiling away in low-wage jobs under miserable working conditions in the cotton mills of Rochdale, an Industrial Revolution boomtown nestled in the foothills of the Pennines in Greater Manchester. A small group of them decided to do something about it. They banded together, pooled their limited resources and in 1844, established the first modern co-op, the Rochdale Society of Equitable Pioneers. At first, the co-op was open for just two days a week and sold only four food necessities: flour, butter, sugar and oatmeal. Soon, they expanded to offer tea, tobacco and a wide range of high-quality goods.

"The Pioneers decided it was time shoppers were treated with honesty, openness and respect, that they should be able to share in the profits that their custom contributed to and that they should have a democratic right to have a say in the business," according to ICA. "Every customer of the shop became a member and so had a true stake in the business."

TAKE A SAD SONG AND MAKE IT BETTER

But while the Rochdale Pioneers were originally motivated by their need for basic goods at affordable prices, they had a larger vision of how a just world should look. In their Laws and Objectives document, they wrote, "That as soon as practicable, this society shall proceed to arrange the powers of production, distribution, education, and government, or in other words to establish a self-supporting home-colony of united interests, or assist other societies in establishing such colonies."

They also published a series of fair practices, which were later codified as the "Rochdale Principles":

1. Open membership
2. Democratic control (one man, one vote)
3. Distribution of surplus in proportion to trade
4. Payment of limited interest on capital
5. Political and religious neutrality
6. Cash trading
7. Promotion of education

ONE THING I CAN TELL YOU IS YOU GOT TO BE FREE

"Members of co-ops can use their collective power to fight for their common economic, social, or cultural interests," according to Worldwatch Institute. "embers of a worker co-op might set working-hour limits and wage rates, while members of a financial co-op can access savings, loans, and other financial services that commercial banks might deny them. Co-operatives can play a key role in improving the quality of life of their members, particularly in countries where official protections for workers’ or consumers’ rights are not enforced."

Indeed, cooperatives have played an important role in spreading social justice and economic inclusion in emerging markets. Village savings and loan associations (VSLAs), for example, have emerged as a low-risk solution to provide basic financial services to the 2.5 billion people around the world who are currently "unbanked." Spreading across Africa, Asia and Latin America, these cooperatives are a hot trend in microfinance, boasting some 4.6 million members across 54 countries.

MONEY CAN'T BUY ME LOVE

The Rochdale Pioneers and the Beatles share some strong similarities. Like their predecessors, the Beatles were a small group of British pioneers, came from humble origins and helped to ignite a sociocultural revolution that remains extremely vital and influential today. The Beatles' 1964 hit "Can't Buy Me Love" became an anthem of the poor working man, a song whose theme the Pioneers would likely have understood well.

The song's chorus perfectly expresses the fact that the Rochdale Pioneers were ultimately more concerned about such high ideals as access to education, political and religious tolerance and an open democracy than about lowering the price of sugar: "I don't care too much for money / Money can't buy me love."

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NOTES

International Co-operative Alliance. Statistical Information on the Co-operative Movement. January 24, 2012. Accessed February 28, 2012.
International Co-operative Alliance. Introduction to ICA. August 30, 2011. Accessed February 28, 2012.
Worldwatch Institute. "Membership in Co-operative Businesses Reaches 1 Billion." February 25, 2012. Accessed February 28, 2012.
International Co-Operative Alliance. Co-operative History: The Rochdale Pioneers. July 21, 2005. Accessed February 28, 2012.
Ibid.
Rochdale Society of Equitable Pioneers. Laws and Objectives of the Rochdale Society of Equitable Pioneers, Rochdale 1844. Cooperative Grocer for Retailers and Cooperators. July-August 1994. Accessed February 28, 2012.
Ibid.
Worldwatch Institute. "Membership in Co-operative Businesses Reaches 1 Billion." February 25, 2012. Accessed February 28, 2012.
The Economist. "A new model of microfinance for the very poor is spreading. December 10, 2011. Accessed February 28, 2012.

image: The Rochdale Pioneers (source: gerald-massey.org.uk)

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