If I gave you the names Robert Owen ,Dr William King and the place Toad Lane in the town of Rochdale Lancashire would you know the history of the Co Op movement.

THE CO-OPERATIVE MOVEMENT

"The standard of life from 1800 to 1834 sank to the lowest possible scale; in the south and west, wages paid by employers fell to three to four shillings, augmented by parochial relief from the pockets of those who had no need of labour; and insufficient food has left its mark in the physical degeneration of the peasantry. Herded together in cottages which, by their imperfect arrangements violated every sanitary law, generated all kinds of disease, and rendered modesty an unimaginable thing … compelled by insufficient wages to expose their wives to the degeneration of field labour, and to send their children to work as soon as they could crawl".

The start of the 19th century in the UK was an age of child labour, exploitation and poverty. Those who failed to find work in the new factories were forced to rely on meagre parish relief for the poor or to starve. By the early 1800's, food prices were high and wages were being reduced. Much of the population suffered extreme poverty and deprivation. The prevailing economic philosophy of the time was the capitalist free-market philosophy of Adam Smith, who claimed that through the impersonal mechanism of the free market, self-interest would automatically lead to the public good. Adam Smith took for granted in his book "The Wealth of Nations" that this market economy was one in which human relations were reduced to the buying and selling of labour and that workers could never improve their lot through industrial or political action. Labour, and the poverty and starvation that go with unemployment, was simply a market commodity subject to the free market rules of supply and demand. Added to this were the population theories of the Reverend Thomas Malthus, which suggested that any attempt to help the poor would simply increase the population and make matters worse. These individualist theories removed any incentive from those with wealth and power to seek to improve the conditions of the majority who were poor.

There were however, a small number of enlightened individuals appalled by the poverty and ill health of the poor who had an alternative vision. Two of these enlightened individuals are now seen as the founders of the co-operative philosophy that eventually underpinned the development of the international co-operative movement. These two enlightened individuals were a wealthy industrialist, Robert Owen, and a Brighton medical practitioner, Dr William King.

During the early part of the 1800' Robert Owen a Welshman who made his fortune in cotton but who had known poverty in his early life, tried to establish co-operative communities in New Lanark, in Scotland and New Harmony in the United States. While these early experiments in creating complete mini-communities eventually foundered, Robert Owen identified some of the profound underlying values of co-operation as a means of organising economic activity: kindliness, toleration, co-operation, respect for youth and the belief that the right to full humanity was to be available to all. Robert Owen was the intellectual founder of co-operative ideals.

In 1828, Dr William King founded a monthly periodical, The Co-operator, which he published for 3 years. Through it he expanded Owen's ideas. Unlike Owen, who favoured the foundation of new utopian co-operative communities, Dr William King saw the benefits of applying Owen's co-operative ideals to local economic activity. He urged the formation of small local co-operative shops to tackle the poverty and distress he saw as the result of unfettered capitalism. He concentrated on the importance of food trading because almost all food and drink was heavily adulterated with cheap additives to bulk it out. It was both a direct threat to the health of the poor and an indirect one, because the purchase of adulterated foods made the poor poorer. Dr King's views, as well as originating from Robert Owen, also were formed as a result of meeting working class leaders who were setting up the Brighton Co-operative Society in the 1820's. He concluded that the working class poor had to use whatever capital they could muster to trade their way out of poverty. Dr Johnston Birchall summarises William King's views like this:

"King sees it as ironic that the worker, who produces 'all the wealth of the world that ever did exist, or ever will exist', has to take whatever wages the capitalist is prepared to pay, wages that are determined not by the value of the product but by ruthless competition between masters, who have no choice but to compete. Trapped by the logic of the market, workers become mere hands working a machine, which, by overproducing goods, eventually puts them out of work.

How can the worker break out of this trap? We must recognise that without labour, capital is nothing; it is really only stored labour and cannot begin to work until the worker makes use of it. Why then cannot the worker take all the value of the product? Because while he or she is working to make the goods, the worker must live, and so the capitalist advances capital in order to keep the worker alive. But supposing the worker had enough capital to do this, then the product would all go to the worker. The key is to store up enough capital to get control over our own labour, and then, possessing both labour and capital, we will be able to do without the capitalist altogether. But individual workers cannot do this on their own; there is too much risk, the process of accumulating enough capital takes too long, and if we become ill or grow old there is nothing to fall back on. But together, if we learn to co-operate, we can do it.

Three decades later, Karl Marx was to see the capitalist system as about to be transformed into the higher stage of society, which he called communism. The means by which this would happen would be a bloody revolution. Dr William King also saw capitalism as about to give way to a higher stage, Co-operation, but the means was much more peaceful and constructive; the workers once they got hold of capital, would simply buy out the capitalists gradually until a Co-operative economy would result. There would still be competition in such a society, but it would be the friendly competition to see who could run the best most efficient co-operative".

What happened to these early attempts to set up co-operatives that Dr William King promoted? For a number of reasons they failed. Some reasons were external, the working poor placing faith in achieving political change rather than investing their energies in practical economic co-operation. There was also no legal status for a co-operative. Co-operatives could not rent or own property in their own right but had to do so through individuals and the capital that was accumulated belonged, legally, to no-one. Some reasons for failure were internal. Some co-operatives failed because of fraud or because they traded by giving members credit and rapidly encountered cash-flow difficulties. Others, still hoping to set up an ideal Owen-type community, limited members and locked-up the benefits of the co-operative within the business itself. Some hoped eventually to employ all their members or sell the goods they produced. As a result, there was pressure from members to fold the business to release the capital it had created.

During the same period, strikes by the weavers in Rochdale had failed to have any lasting effect on their wages and living conditions. The weavers, wondering if there was a better way of improving their situation, turned to the ideas of Owen and King. It was the Rochdale Pioneers who solved the structural problems with early co-operative trading in a crucial way. They saw the need to distribute some of the fruits of co-operative trading to the members so members saw an immediate benefit from co-operation. The Rochdale Pioneers admitted unlimited numbers of members and distributed part of the co-operative's profits as a dividend on purchases. With 28 members they started not the first, but the first successful co-operative enterprise, the Rochdale Equitable Pioneer Society at their shop in Toad Lane Rochdale, now the Rochdale Pioneers Museum. They began trading on 21 December 1844, the date now recognised as the birth-date of the International Co-operative Movement.

The Rochdale Pioneers began in a very modest way. They sold the basic necessities of life to their members, butter, candles, soap, flour and blankets. Their aim was to supply good quality goods, cheaply and to return any profit to members of the co-operative. Where the Rochdale Equitable Pioneers succeeded was that, from their own harsh experience of poverty and the theories of Owen and King they worked out that to succeed, their co-operative enterprise must work on a number of key principles which are now recognised internationally as the seven co-oprative prinnciples

The success of the Rochdale Pioneers was remarkable. By the 1870's the co-operative movement had its own wholesale and insurance societies and accumulated capital of over £300,000. Today, despite intense competition in food retailing, UK retail co-operatives still have a total turnover of over £7.7 billion and there is a renaissance of interest in all forms of co-operative