Principles of the Rochdale Cooperative
The Rochdale principles form the core of cooperative values
that even today, after several revisions, are similar in many ways
to those points first set down by the Rochdale Society of
Equitable Pioneers in 1844. A review of these principles as
developed by the early Society will be reviewed below.
Membership
The Rochdale Society adopted the principle of open
membership, meaning that anyone who was able to meet the requirements
of the Society could apply for membership. Initially members were
required to agree to purchase at least one share of the Society at the
cost of one pound each [1], although later this was
raised to higher levels when more capital was
needed [2]. However, members only had to pay a
deposit of three pence per share up front if they agreed to pay three
pence per week every week thereafter (240 pence=20 shillings=1 pound).
Members who neglected their payments were fined except in the case of
``distress, sickness, or want of employment'' [3].
In addition, every member ``was to be formally proposed, his name,
trade, and residence made known to every one
concerned'' [4] and, according to Society rules, had
to ``be proposed and seconded by two members, and if approved of at
the next general meeting by a majority then present'' would then be
admitted to membership [5]. The ability of new
members to become part of the cooperative for a relatively small
investment proved to be very successful-membership went from 28 in
1844 to over 10,000 in 1881 [6].
Closely associated with the principle of open membership was the
principle of political and religious neutrality. The early
members of the Society came from a wide variety of political
inclinations (e.g., Chartists, Owenites, Teetotallers) and religious
beliefs (e.g., atheists, secularists, Unitarians, Protestants). Many
of the members were radicals (sort of by definition), and so tolerance
of a variety of opinions was essential for the organization to
function at all. As Holyoake later wrote,
Sectarianism is at all times the bane of public unity. Without
toleration of all opinion, popular co-operation is
impossible [7].
However, as might be expected, most members of the Society tended
to be associated with a more liberal then conservative political
outlook. One test of this principle occurred in 1860 after a local bank
collapsed and the Society had an influx of Methodists who wanted to
close the Society's meeting room on Sundays [8]. The
Society responded by passing the following motion:
That every member shall have
full liberty to speak his sentiments on all subjects when
brought before the meetings at a proper time, and in a proper
manner; and all subjects shall be legitimate when properly
proposed [9].
They promptly closed the Society to new members for six months so that
tempers could cool. Nevertheless, this principle remained difficult
to apply in practice. For example, in 1869 two groups of
conservatively-minded members split off from the main Society to form
their own cooperative associations [10].
The ability of these groups to secede from the main Society was itself
the exercise of another principle implicit in the aforementioned
membership principles: voluntary association. As Dr. William
King, an early proponent of the cooperative movement, wrote:
Co-operation is a voluntary act, and all the power in the world cannot
make it compulsory; nor is it desirable that it should depend on any
power but its own. For if Co-operation (as seems likely) be the form
which the greater part of the world is destined to assume, the
interference of governments would only cramp its energies and
misdirect them [11].
Hence people cannot be forced to join a cooperative and they must be
free to leave a cooperative (subject to reasonable rules that protect
the interests of the organization). For example, the early rules of
the Rochdale cooperative allowed a member in times of distress to sell
all their shares except for one [12].
Democratic Member Control
The Rochdale Society adopted the principle of democratic control by
its members as its means for decision-making. The idea of ``one
person, one vote'' democratic control was familiar to many of the
founders through their participation in their religious congregations
and in political movements like Chartism which promote universal
suffrage (not even all men were allowed to vote at this time).
But as Birchall writes,
What was remarkable was that they were applying it to business;
they could have given votes in proportional to share capital, as in
capitalist firms, or in proportion to purchases, but here power was
shared out to persons, not to property. [13]
In addition, women were not excluded from the voting; indeed, one
women (Ann Tweedale) was among the original twenty-eight founders. In fact,
the 1844 version of the Society's rules took the principle of ``one
person, one vote'' so much for granted that it was not even
listed [14]. This omission was rectified the following year.
Economic Principles
One of the main reasons that the Rochdale Society succeeded where its
predecessors failed was the careful adoption of several basic
economic principles:
- The Rochdale Society required a fixed and limited interest on
capital. This meant that they paid a fixed rate of interest on
all shares and limited the number of shares that an individual member
could hold. Many previous cooperative societies had refused to
pay an interest on its member's investment and the resulting lack of
capital contributed to their failure. [15]
- The Rochdale Society required distribution of
its surplus in proportion to a member's purchases.
Here again, this marked a break with some of the
previous cooperative associations who attempted to accumulate the
surplus for the purposes of building a large-scale cooperative
community. However, it was not a new idea-several cooperatives
in Scotland had adopted the concept as early as the
mid-1820s [16].
- The Rochdale Society only engaged in cash trading. Many
previous society had failed because they extended credit to
impoverished members who later defaulted. In fact, any officer of the Society
who gave or took credit was to be disqualified from office and
fined ten shillings. [17]
- The Rochdale Society only sold pure and unadulterated
goods. We take this for granted today, but it was a common practice
during the time of the Society for shopkeepers to add
cheaper ingredients to items to increase their
profits (e.g., adding extra water to milk [18]). As a
result of this principle, the Society gained the trust of its members.
While they might pay more at the cooperative than other places,
members were assured that they were actually getting what they paid
for.
It is a credit to the founders that they were able to construct a
business model that was not only stable and successful, but really
gave rise to a ``retailing revolution'' [19]
that spread throughout the world.
|
| When the Co-operative Wholesale Society
began its own production in 1873, purity and quality were foremost
among its objectives. These advertisements show some of the early
products that were manufactured. [I1] |
Education
|
| The Co-operative News acted as
the Movements's weekly newspaper starting in 1871. [I2] |
The Rochdale Society made education an important priority.
The rules of 1854 required that 2.5% of the Society's surplus be
dedicated to the ``intellectual improvement of the
members'' [20]. The importance of education to the
Society grew out of the writings of the early advocates of the
cooperative movement. For example, Robert Owen believed that
education was necessary for causing the changes in character that
would result in widespread social reform [21]. In
fact, the very first educational program sponsored by the Society was
given by Samuel Tweedale who gave a lecture at the Toad Lane store
entitled ``Morals in their relations to every day
life'' [22]. Another influence was Dr. William King
who believed that education was necessary for people to trade
successfully and achieve economic independence [23].
His publication The Co-operator was so influential that it
became a sort of textbook for the early cooperative
movement [24].
The application of 2.5% of the surplus resulted in a rapid growth of
the educational efforts of the Society:
In 1846 they were already holding regular Saturday afternoon
discussions at the store, and in 1848 they were able to set up a
newsroom and book department, buying up the library of a failed
People's Institute. By 1850 they were running their own school and
adult education classes, and by 1860 had established the principle
that each branch should have its own newsroom and library above the
store [25].
The Society's insistence on political and religious neutrality also
provided members the ability to have a means for freely discussing
controversial issues without fear of negative consequences. The
libraries and newsrooms also tried to maintain information about a
wide variety of topics at an affordable price. Holyoake notes that in
1854
... the news room, a bounteously filled room in
those days, abounding in dailies, weeklies, and quarterlies, was open
from nine in the morning to nine at night, at a charge of twopence per
month. ... Co-operative information is the cheapest the working class
ever found, if regard be had to convenience of hour and day; and the
quality of it is higher, because two-sided, than gentlemen can
usually command [26].
These efforts of the Society were quite ahead of their time in some
ways. For example, it was not until the 1876 that there was a compulsory
educational system for children [27].
As public institutions gradually took up more
of the educational burden, the Society expanded its efforts to new
avenues for adult education:
When the university extension movement was launched, linking academic
lecturers with part-time students, the Co-op provided both the
students and the grants to pay for their tuition. ...
More directly, in 1903 Albert Mansbridge, a CWS [Cooperative Wholesale
Society] employee, set up the Workers' Education Association. ...
The idea of the WEA was to give working-class people the opportunity
to study not just through a series of lectures, but through intensive
tutorial work [28].
The emphasis on education is still part of the modern cooperative
principles, as can be seen from the abundance of information about
the cooperative movement available on the World Wide Web.
Conclusion
Several international conferences have revised and extended the
Rochdale principles from their original form. They have deleted
obsolete principles like cash trading and explicitly added
principles like cooperation among cooperatives and
concern for community to meet the concerns of the cooperative
organizations of today. Nevertheless, the spirit of the original
Rochdale principles form the foundation upon which the cooperative
movement has expanded and thrived.
Side Bar: 1995 Rochdale Principles
Remarkably, many of the core ideas of the original Rochdale
principles developed in 1844 have been retained in the mostly recently
revised principles as approved by international committee in 1995:
DEFINITION: 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.
VALUES: Cooperatives are based upon the values of self-help,
self-responsibility, democracy, equality, equity, and solidarity.
In the tradition of their founders, cooperative members believe in the
ethical values of honesty, openness, social responsibility, and
caring for others.
PRINCIPLES:
- Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all persons able to
use their services and willing to accept the responsibilities of
memberships, without gender, social, racial, political, or religious
discrimination.
- Democratic Member Control
Cooperatives are democratic organizations controlled by their members,
who actively participate in setting their policies and making
decisions. Men and women serving as elected representatives are
accountable to the membership. In primary cooperatives members have
equal voting rights (one member, one vote) and cooperatives at other
levels are organized in this manner.
- Member Economic Participation
Members contribute equitably to, and democratically control, the
capital of their cooperative. At least part of that capital is
usually the common property of the cooperative. They usually receive
limited compensation, if any, on capital subscribed as a condition of
membership. Members allocate surpluses for any or all of the
following purposes: developing the cooperative, possibly setting up
reserves, part of which at least would be indivisible; benefitting
members in proportion to their transactions with the cooperative; and
supporting other activities approved by the membership.
- Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by
their members. If they enter into agreements with other
organizations, including governments, or raise capital from external
sources, they do so on terms that ensure democratic control by their
members and maintain their cooperative autonomy.
- Education, Training, and Information
Cooperatives provide education and training for their members,
elected representatives, managers, and employees so they can
contribute effectively to the development of their cooperatives. They
inform the general public-particularly young people and opinion
leaders-about the nature and benefits of cooperation.
- Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, national,
regional, and international structures.
- Concern for Community
While focusing on member needs, cooperatives work for the sustainable
development of their communities through policies accepted by their
members.
References
- [1]
-
Johnston Birchall, Co-op: The People's Business
(Manchester University Press, Manchester, UK, 1994), pp. 43.
- [2]
-
G. J. Holyoake, The History of the Rochdale Pioneers,
(Charles Scribner's Sons, New York, 1918), 10th ed., p. 4.
- [3]
-
Holyoake, p. 17.
- [4]
-
Holyoake, p. 17.
- [5]
-
Holyoake, p. 133.
- [6]
-
Birchall, p. 45.
- [7]
-
Holyoake, p. 20.
- [8]
-
Birchall, p. 62.
- [9]
-
Holyoake, p. 20.
- [10]
-
Birchall, p. 63.
- [11]
-
Birchall, p. 28.
- [12]
-
Holyoake, p. 17.
- [13]
-
Birchall, p. 54.
- [14]
-
Birchall, p. 54.
- [15]
-
Birchall, p. 56.
- [16]
-
Birchall, p. 58.
- [17]
-
Birchall, p. 59.
- [18]
-
Birchall, p. 13.
- [19]
-
Birchall, p. 65.
- [20]
-
Birchall, p. 61.
- [21]
-
Birchall, p. 93.
- [22]
-
Holyoake, p. 87.
- [23]
-
Birchall, p. 61.
- [24]
-
Birchall, p. 23-25.
- [25]
-
Birchall, p. 61.
- [26]
-
Holyoake, p. 134-135.
- [27]
-
Birchall, p. 94.
- [28]
-
Birchall, p. 94.
Image References
- [I1]
-
Birchall, p. 14.
- [I2]
-
Birchall, p. 95.
Copyright 1999 by Ronald Kumon
Laurel House Co-op & Laurel Net Cooperative /
Austin, Texas, USA /
Created 11 Mar 1999 / Updated 02 May 1999
This page is published by Laurel Net Cooperative, a registered student
organization. This page is not an official publication of The
University of Texas at Austin and does not represent the views of The
University or its officers.