Co-operatives and co-operation have been around in one form or another for as long as people have worked, played or lived together! The ideas behind co-operatives can be traced back to as long ago as 2067 BC when King Hummurabi of Babylon introduced a co-operative form of tenant farming. Other early forms of co-operatives include credit unions in ancient China, crafts persons guilds in Rome, and funeral benefit societies in early Greece.
This Information Sheet provides a very short history of the development of the co-operative movement.
While co-operatives have a long history, it was the Industrial Revolution which is generally considered the era which heralded in the modern form of co-operatives. From the mid 18th Century through to the mid 19th Century new industries were being created throughout Europe, and traditional social arrangements were being radically altered. Often working conditions were harsh, and workers had few if any rights.
People fought back against oppressive conditions in a range of ways, and movements under banners such as 'associationist', 'communalist', 'mutualist', 'socialist', and'harmonist'were spawned. Central to most of these movements was the idea of people working collectively to achieve individual and common goals.
The first recorded consumer co-operative in this period was the 'Penny Capitalists' established in 1769 by a group of weavers in Scotland who came together to share weaving supplies. Later, in Rochdale, England in 1844 the co-operative which is credited as being the first fully 'modern' co-operative business organisation was established by a group of 28 craft persons and other interested people. The Rochdale co-operative was established with the funds of its members in response to needs created by unemployment. While this co-operative purchased supplies and sold them to their members at current prices (to avoid price wars), surpluses were returned to members on the basis of their patronage. Key elements of the Rochdale co-operative which characterise modern co-operatives are one vote per member irrespective of share holdings, political and religious neutrality, and the active education of the co-operatives members.
Since Rochdale there have been an abudance of successful co-operative endeavours with perhaps the most famous being the Mondragon Group in Basque, Spain.
In 1943 a Basque priest who had fought for the Basques against Franco, Father Arizemendi, was appointed to a parish by the name of Mondragon. Father Arizemendi persuaded the locals to establish a technical college which taught, among other things, that people in industry should work co-operatively. In 1956 five college graduates decided to put the principles Father Arizemendi preached into practise and established a business owned by its workers, Ulgor, which made paraffin cookers. Starting with 23 workers in 1956, the company had 170 workers by 1959 and a wider range of products. Over the same period si2~ other similar co-operatives were established in the same area and a savings bank, setup by these co-operatives, was established to raise more money for worker owned businesses.
Operating on the principles that ownership and control of enterprises must be confined to people working in the enterprise, and at least 90 of workers in an enterprise must be members of the co operative, the Mondragon Group has flourished.
In 1980 in Mondragon there were, among other co-operatives, 76 trading co-operatives employing 15,621 workers; 5 co-operatives with 1,580 worker owners providing services to the Group; the savings bank which started from a one room office had grown to consist of 93 branches and a technical research unit; 36 school co-operatives; a technical college; and 14 housing co-operatives.
From Rochdale in 1844 co-operatives have taken hold and spread around the world. Countries such as Canada and Australia, with large primary industry sectors, saw the rapid growth of rural co-operatives. In Australia names such as Dairy Farmers, Malanda Milk, Caboolture Yoghurt and SAFCOL - all co-operatives - have become household names. Other common forms of co-operatives include credit unions, Friendly Societies, workers co-operatives, most university bookshops, news agencies such as ANCOL, food co-ops, and, of course, rental housing co-operatives.
It has been estimated that in Australia today there are over 6,000 co-operatives with assets valued at more than $35 million and an annual turn over of $16 billion. In NSW co-operatives contribute some $600 million annually to the economy, with most of that contribution being reinvested or otherwise remaining in the region where it was generated.
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