The following is a wonderful excerpt from the "Organizer’s Handbook, bringing new cooperatives to life," published by the National Associations of Students of Cooperation. Click here to see the entire document on the NASCO website.
Cooperation, economic and otherwise, is a concept which has been around for most of history.
People learned ages ago that by working together they can accomplish more than the sum of each
individual’s efforts. Early cultures recognized the advantage of collective strength and the potential
of cooperation by hunting, living, worshipping, cooking and providing shelter together in groups.
The history of human economic cooperation is perhaps older than the history of competition. Even
before agriculture had become the basis of human economy, cooperation was a necessity.
The modern cooperative movement dates to a group of twenty-eight textile workers who organized
the Rochdale Society of Equitable Pioneers. In 1844, these weavers pooled 140 British pounds to
open a small dry goods store stocked with oatmeal, sugar, butter and flour. Their effort was rooted
in poverty and desperation. The previous year they had been fired and blacklisted by employers
after an unsuccessful weavers’ strike.
The Rochdale Pioneers incorporated several important features of democratic organization
previously tried by earlier cooperatives. Most importantly, they codified their features and rules into
what is commonly known as the Rochdale Principles. These principles helped strengthen the
organization and formed the basis of a growth-oriented movement. The International Cooperative
Alliance revised the principles in 1995 after the 150 birthday of Rochdale. The new document,
called the Statement on Cooperative Identity is recognized as the basis of any cooperative.
These principles make several distinctions about cooperation. First, cooperatives are member-owned and -controlled
businesses, in which all members have an equal say in the governance of the business: one
member, one vote. Co-ops stand in contrast to proprietary ownership, in which one person holds all of the
authority, and "traditional" corporate ownership, in which bases control on the size of one’s investment.
Second, cooperatives serve their members, and not the interests of speculative capital. By establishing limits
on the return of investment and on share holdings, cooperatives discourage profit-seeking investments.
Instead co-ops encourage local control and investments by the people who use the business. Third,
cooperatives help the members actively govern their organization through education and help other
cooperatives to better serve their members. This is done through buying goods from other cooperatives and
providing development assistance to organizing groups. Finally, cooperatives exist not just for the benefit of
the members but to serve, strengthen, and sustain local communities. They are community organizations.
It is of interest to note that the cooperative principles state nothing about member labor or low cost, two
common perceptions of cooperatives. While member labor is a method frequently used by smaller
cooperatives to keep the costs of operations low (thereby maximizing savings to members), member labor is
not a principle or even an overwhelming characteristic of the cooperative movement. Involving membership in
the daily operations of the cooperative, however, is another means of fostering cooperative education,
participatory democracy, and a sense of community amongst the members.
Similarly, although cooperatives operate at cost and keep their prices as low as possible, many people equate
cooperatives with the potential to under-price mainstream competitors. In many cases, it is possible to price
below competing businesses, particularly through the use of member labor. However, cooperatives are
generally subject to the same market conditions as other businesses, and there is no magic, nor mandate,
that cooperatives' prices be lower than that of the competition. In fact, in contemporary markets, national and
transnational corporations sell merchandise at incredibly low prices by paying their employees poorly, and/or
relying on the lower costs of labor and materials in other countries. Some cooperatives have made a
conscious decision to keep prices high enough to pay their employees fairly, provide higher quality goods,
offer some additional service, or achieve other social goals.
In housing, most new co-ops are constrained from offering low rates due to the expensive nature of
purchasing property. While members may realize some savings due to the co-op's nonprofit nature, or through
the use of member labor and group purchasing, most new housing co-ops will operate near market rates.
Fortunately, mortgage payments remain relatively constant over the term of the mortgage, and, due to
inflation, the co-op becomes lower in cost over time. In the meantime, the co-op members are building equity
for themselves and future members.
Cooperatives
On a world-wide basis, modern cooperatives have developed for over 200 years. In many countries, such as
Sweden and Japan, cooperative businesses figure prominently in their national economies. More importantly,
cooperatives exist all over the world providing goods and services which would otherwise be unattainable. In
many Third World countries, cooperatives such as credit unions and agricultural organizations have been
very successful in helping people provide for themselves where private and other corporate capital do not see
high profitability.
In Canada and the US, the roots of the cooperative movement sprang up for similar reasons. Rural electric co-ops,
credit unions, and agricultural co-ops were founded to meet the needs of populations, particularly rural,
which did not attract investment or where goods and services were provided at unfair prices.
In the early 20th century, cooperatives in these two countries began to see a need for national organizations.
In the US, cooperatives organized the Cooperative League of the USA, which later became the National
Cooperative Business Association (NCBA). NCBA provides networking, technical assistance, and
development assistance. One of NCBA’s major contributions has been lobbying at the national level for
cooperatives. For instance, it lobbied for legislation which made cooperative incorporation possible and
helped pass legislation which formed the National Cooperative Bank in 1978. Today, NCBA remains the
premier cross-sectoral link among co-ops in the United States.
Canada enjoys an even stronger network of cooperative support organizations. The Canadian Co-operative
Association (CCA), formed from a merger of the Co-operative Union of Canada and the Co-operative College of
Canada in 1987, provides educational services to its member cooperatives and sponsors cooperative
development in lesser-developed nations. The Co-operative Housing Federation of Canada (CHF) provides
technical assistance to developing and established co-ops throughout English-speaking Canada. Canadian
cooperatives have also benefited from the support of the Canadian Mortgage and Housing Corporation
(CMHC). However, the CMHC has not provided financing for a student cooperative since the early 1970s, and
funding for the program has dropped off sharply in recent years. Other sources of financing are available,
primarily from within the cooperative movement itself.
The contemporary cooperative movement is strong and diverse. Cooperatives exist all over Canada and the
United States. Some of the larger cooperatives have an annual income of several billion dollars. In addition to
rural electric co-ops, credit unions, and agricultural co-ops, there are cooperatives to serve almost every
need: food co-ops, automotive co-ops, insurance co-ops, housing co-ops, book co-ops... the list goes on.
Student Cooperatives
The beginnings of student cooperatives are unknown, but it is believed that the first student co-ops were
bookstores and group houses that began in the late 1800s. The Harvard “Coop” is the best known example of
the early bookstores. Recent research by Deborah Altus has documented the existence of women’s housing
co-ops during this period. These houses, owned and controlled by the university, were established to provide
affordable housing for women. They were “cooperative” only in that the members shared responsibilities and
ate meals together. Most of the pre-Depression Era student housing cooperatives were university owned and
operated.
The Great Depression of the 1930's brought many student cooperatives into existence in both Canada and
the United States. This period of economic hardship encouraged people to think in new directions and a wave
of new co-ops was started. If one event can be seen as the birthplace of student cooperative movement it
was a lecture by an internationally-renown Japanese labor, cooperative, and peace activist, Toyohiko
Kagawa. Kagawa spoke at a Student Christian Movement conference in Indianapolis, Indiana. Students from
Ann Arbor and Toronto went to this conference and returned home to start student housing cooperatives that
thrive even today. Other student activists saw him speak elsewhere and where similarly inspired.
The 1930s also saw the start of other long standing cooperative systems including Berkeley, Austin, Los
Angeles, and Eugene. By 1941, about 150 cooperative housing associations had some 10,000 student
members. An association was formed called, the North American Students Cooperative League (NASCL),
which survived into the 1950s. The Second World War deflated much of the momentum of this period, drafting
members for the war. As most of these co-ops were in rented buildings, most of them died during the war. The
organizations that survived were usually the ones that had begun to purchase their own buildings.
In the 1950s, new systems in Kingston, Ontario; Oberlin, Ohio; and Lincoln, Nebraska were established.
However, McCarthyism did not encourage progressive answers to social problems. No one can tell, with
cooperatives or other progressive movements, to what extent the fear and guilt of the McCarthy era damaged
the chances for revival and expansion. At any rate, there was little new development of cooperatives during
these years.
In the 1960s, the political fervor over the civil rights, free speech, and anti-war movements brought new
enthusiasm to student communities around the world. This enthusiasm translated into a keen interest in non-traditional
forms of democracy, such as cooperatives. New cooperatives were started in places such as
Austin, Texas; St. Paul and Minneapolis, Minnesota; and Providence, Rhode Island, among others.
Throughout the 1970s, former student activists put their ideas into action by creating food and other
cooperatives based on the idea of participatory democracy and a healthy life. This activity translated into
what is known as the “New Wave” cooperative movement, as opposed to the “old wave” co-ops of the 1930s.
Some of these organizations existed on college campuses but most were integrated into communities and
served community needs. The New Wave cooperatives, with their emphasis on healthy and organic foods,
were the beginning of the contemporary health food movement.
In 1968 at a conference sponsored by the Inter-Cooperative Council at the University of Michigan a proposal
was passed to form an organization to meet the growing needs of the student cooperatives in Canada and the
United States. Three weeks later, a group gathered in Chicago to organize the North American Students of
Cooperation (NASCO), based on the NASCL model of the 30s and 40s. During the 1970s, NASCO was
composed not just of student cooperatives but of the new wave co-ops that were popular in youth circles. The
contemporary NASCO is composed mainly of student cooperatives and serves as the voice of a strong and
future-oriented movement.
In the realm of development, an important change that took place during the late-60s and early-70s was in the
area of federal funding provided by the US and Canadian governments. Most of the existing student housing
cooperatives took this opportunity to expand rapidly. However, the late-70s and early-80s were the end of this
period of fantastic growth. Established cooperatives expanded during this period, but only a few new systems
were started. For this reason, in 1987, the Campus Cooperative Development Corporation (CCDC) was
founded as the development partner of NASCO. With the vision of a co-op system on every campus, CCDC
has advocated for and assisted student groups.
Student cooperatives are considered to be unique in relation to the rest of the cooperative movement in many
respects. First, campus cooperatives have higher rates of member turnover than most because of the limited
time students attend college. Second, most student cooperatives have a higher degree of member
participation —both in governance and operations— because of the labor responsibilities of membership.
Third, student co-ops often serve the social needs of their members more intensely, since they are frequently
based upon group houses and/or shared dining groups.
Click here to read more of the "Organizer’s Handbook, bringing new cooperatives to life," published by the National Associations of Students of Cooperation.
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