cooperative movement(redirected from History of the cooperative movement)
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cooperative movement,series of organized activities that began in the 19th cent. in Great Britain and later spread to most countries of the world, whereby people organize themselves around a common goal, usually economic. The term usually refers more specifically to the formation of nonprofit economic enterprises for the benefit of those using their services.
Types of Cooperatives
An old and widespread form is the consumers' cooperative, in which people organize for wholesale or retail distribution, usually of agricultural or other staple products. Traditionally, membership is open, and anyone may buy stock. Goods are sold to the public as well as to members, usually at prevailing market prices, and any surplus above expenses is turned back to the members. Money is saved through direct channeling of goods from producer to consumer. Producers' cooperatives are manufacturing and distributive organizations, commonly owned and managed by the workers. Another development in such cooperatives has been the acquisition of failing manufacturing plants by labor unions, who run them on a cooperative basis. Agricultural cooperatives usually involve cooperation in the processing and marketing of produce and in the purchase of equipment and supplies. Actual ownership of land is usually not affected, and in this way the agricultural cooperative differs from the collective farmcollective farm,
an agricultural production unit including a number of farm households or villages working together under state control. The description of the collective farm has varied with time and place.
..... Click the link for more information. . Agricultural cooperatives are often linked with cooperative banks and credit unionscredit union,
cooperative, not-for-profit financial institution that makes low-interest personal loans to its members. It is usually composed of persons from the same occupational group or the same local community or institution.
..... Click the link for more information. , which constitute another important type of cooperative. There is also cooperative activity in insurance, medical services, housing, and other fields.
The origin of cooperative philosophy is found in the writings and activities of Robert OwenOwen, Robert,
1771–1858, British social reformer and socialist, pioneer in the cooperative movement. The son of a saddler, he had little formal education but was a zealous reader.
..... Click the link for more information. , Louis Blanc, Charles FourierFourier, Charles
, 1772–1837, French social philosopher. From a bourgeois family, he condemned existing institutions and evolved a kind of utopian socialism. In Théorie des quatre mouvements
..... Click the link for more information. , and others. Its early character was revolutionary, but under the impact of such movements as Christian Socialism this aspect diminished. After some early 19th-century experiments, consumers' cooperation took permanent form with the establishment (1844) of the Rochdale Society of Equitable PioneersRochdale Society of Equitable Pioneers,
one of the first consumers' cooperatives, founded in 1844 in Rochdale, England, by 28 Lancashire weavers. Influenced by the theories of Robert Owen, they opened a grocery store that was so successful that they were able to establish a
..... Click the link for more information. in England.
The cooperative movement has since had considerable growth throughout Great Britain and the Commonwealth, where local cooperatives have been federated into national wholesale and retail distributive enterprises and where a large proportion of the population has membership. Various examples of cooperative organization are also found in the Scandinavian countries, Israel, the People's Republic of China, Russia, and France. In the United States the cooperative movement began in the 19th cent., first among workers and then among farmers. The National Grange, a farmers' cooperative, was founded in 1867 and later exercised considerable political influence (see Granger movementGranger movement,
American agrarian movement taking its name from the National Grange of the Patrons of Husbandry, an organization founded in 1867 by Oliver H. Kelley and six associates. Its local units were called granges and its members grangers.
..... Click the link for more information. ). An international alliance for the dissemination of cooperative information was founded in 1895. Today the major types of cooperatives include those of farmers, wholesalers, and consumers, as well as insurance, banking and credit, and rural electrification cooperatives (the growth of the latter two facilitated by loans from the federal government). There has been increasing international collaboration among the various kinds of cooperatives and a growing trend toward the establishment of international cooperative distribution.
See J. Berry and M. Roberts, Co-op Management and Employment (1984); E. Spanner, Brotherly Tomorrow (1984); G. Melnyk, The Search for Community (1985).
social and economic activity aimed at creating and developing cooperatives (consumers’, credit, producers’, supply-and-marketing, and housing cooperatives).
Origins of the movement in the advanced capitalist countries. The cooperative movement first spread in Great Britain, where consumers’ cooperatives began emerging in 1769. The first of these disintegrated rapidly. The movement assumed broader dimensions in the country during the first half of the 19th century, when, in the context of the accelerated development of capitalist production after the industrial revolution, certain strata of workers and other sections of the exploited population saw cooperatives as a possible means of struggle against the intensification of social oppression. R. Owen played an important role in the development of the cooperative movement in Great Britain. He called on workers to join cooperatives; in his opinion, this trend would ensure the gradual shift of production into the hands of those who create material wealth through their own labor. Of paramount importance in Owen’s social activity was the propaganda he conducted for the creation of cooperatives with the goal of the socialist transformation of society and his attempts to ground this Utopian idea in theory and to implement it.
The illusion that the socialist transformation of society was possible through the development of cooperatives within the framework of capitalism was shared by many Utopian socialists, among them C. Fourier, who put forward the idea of establishing phalanxes, or cooperative-type production associations encompassing industry and agriculture. Followers of Saint-Simon, especially P. J. Buchez, also held to this illusion. Utopian plans for eliminating the defects of capitalism by means of cooperatives were also proposed by P.-J. Proudhon.
In 1844, followers of Owen in the city of Rochdale, Great Britain, organized a consumers’ society (initially including 28 people), which they called the Rochdale Equitable Pioneers’ Society. The Rochdale Pioneers formulated the major principles of the cooperative movement, which took roots as the movement developed. These principles included the voluntary nature of participation in the cooperative; the democratic character of administration and control (all of the cooperative’s bodies to be elected and accountable to its members); equal rights for the members of the cooperative, regardless of their shares (one member, one vote); the sale of goods at average market prices, and only for cash; the sale of only high-quality goods, at net weights and accurate sizes; the allocation of a share of the profits to raising the cultural level of the society’s members and building schools, reading rooms, libraries, and so forth; and the distribution of most of the profits among the cooperative’s members according to the amount of merchandise acquired. These principles spread widely in the cooperative movement, which was subsequently supported by a group of British Christian socialists who saw it from the viewpoint of petit-bourgeois reformism.
After its beginning in Great Britain, the cooperative movement began to develop in other countries as well. In France, weavers in Lyon organized a consumers’ society, the United Workers, in 1848. After the promulgation of the 1867 Law on Societies “with changing members and capital,” cooperatives began developing more rapidly in France. The first congress of cooperatives, at which the Cooperative Union was established, was held in Paris in 1885. In Italy, the first consumers’ society arose among railroad workers in the city of Turin in 1853. Roch-dale-type consumers’ cooperatives also arose in the mid-19th century in Germany. The Hamburg orientation in the cooperative movement became prevalent there; its characteristics were the limitation of profits allotted by a cooperative for distribution proportional to the purchase of goods, and the establishment of an aid fund for needy members.
In 1849 the German bourgeois economist and political figure H. Schulze-Delitzsch presented a plan for “saving” industrial workers and artisans who were becoming proletarianized from need, by establishing credit, supply-and-marketing, and consumers’ cooperatives among them. In contrast to Schulze-Delitzsch, F. W. Raiffeisen gave special importance to the establishment of cooperative credit associations among the peasants. The cooperative conceptions of Schulze-Delitzsch and Raiffeisen diverted the masses of the people from class struggle, because they spread the illusion that it is possible within the limits of capitalism to create conditions for increasing the economic stability of small producers and providing a secure livelihood for working people, through organizing cooperative associations. In Belgium, where the first workers’ consumers’ cooperative had been established in the late 1840’s, the Forward consumers’ society, organized in Ghent in 1880, became particularly important. Its members proposed important regulations concerning the ties between cooperatives on the one hand and the Socialist Party and trade unions on the other.
In the mid-19th century, cooperatives (at first consumers’ cooperatives, and later credit and supply-and-marketing cooperatives) began to spread gradually in Austria, Italy, Switzerland, Sweden, Norway, and Denmark, as well as Russia and other Eastern European countries. In the late 19th century, cooperatives spread in Japan. Housing and production cooperatives (primarily producers’ cooperatives among artisans) spread on a smaller scale. Agricultural cooperatives arose in the countries of Western Europe as early as the first half of the 19th century. In the second half of the 19th century, as these countries were drawn into the orbit of the capitalist mode of production, agricultural cooperatives came to include an increasing portion of their gainfully employed rural population. In Russia and other Eastern European countries, agricultural cooperatives began to develop in the second half of the 19th century. Agricultural cooperatives developed primarily as supply-and-marketing cooperatives whose members produced to a large extent for the market and banded together to sell their produce jointly. These cooperatives also supplied their members with certain goods to be used in production. In the early 20th century, agricultural cooperative societies appeared in India and other Asian countries. (In these countries, the establishment of cooperatives was often ordered by the colonial authorities, who used them as a means of organizing the system of exploitation of colonized peoples.) Agricultural cooperatives also appeared in Latin America.
The development of the cooperative system was accompanied by the improvement of organizational forms and the establishment of nationwide cooperative organizations. (For example, in Great Britain the Cooperative Wholesale Society was established in 1863, the Cooperative Wholesale Society of Scotland in 1868, and the British Cooperative Union in 1869; in Sweden, the Swedish Wholesale Cooperative was founded in 1869; in the USA, the Cooperative League of the United States was founded in 1916.)
The founders of scientific communism carefully studied the experience of the international cooperative movement. In the program document of the First International, the Founding Manifesto of the International Working Men’s Association, K. Marx addressed himself to this experience, noting that the successes of the cooperative system proved the ability of workers to cope with the organization of production on a large scale without capitalists. But at the same time, the results of the activity of cooperative societies under the capitalist system in-contestably proved “that however excellent in principle and however useful in practice, cooperative labor, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries” (K. Marx, in K. Marx and F. Engels, Soch., 2nd ed., vol. 16, p. 10). The real means of liberating the working class, and the greatest duty of the class, is the conquest of political power.
As a result of the spread of illusions in cooperatives among a segment of workers—illusions (encouraged by Proudhon, Lassalle, and Owen’s followers) that diverted workers from the revolutionary struggle—Marx returned to the question of cooperatives in the course of preparations for the First (Geneva) Congress of the First International (1866). In the Instruction that he wrote for the congress, he again pointed out that the transformation of social production “into a unified, extensive, and harmonious system of free cooperative labor” was possible only as a result of “the transition of the organized forces of society, that is, state power, from the capitalists and landowners to the producers themselves” (ibid., p. 199). The correctness of Marx’ viewpoint on the question of cooperatives was reflected in the resolution adopted by the Geneva Congress despite the resistance of the Proudhonists.
The struggle of the revolutionary and reformist currents in the workers’ movement over the question of the cooperative system continued even after the First International was disbanded in 1876. Moreover, the question did not lose its topicality for the Social Democratic parties that joined the Second International, founded in 1889. Many of them succeeded in establishing close ties with cooperatives, and this success helped to rally broader strata of working people around the workers’ movement. The support of the members of cooperative societies enabled workers’ parties to obtain increasing numbers of votes in parliamentary and municipal elections. Under the influence of the socialists, the cooperatives gave workers vital material aid during strikes and lockouts. At the same time, the experience of the workers’ movement refuted the cooperative-reformist illusions spread by the opportunists, who regarded cooperatives as elements of socialism that contribute to capitalism’s gradual development into socialism without revolution. E. Bernstein, E. David, F. O. Herz, and other Bernsteinist revisionists shared these views.
In conducting a struggle against reformist conceptions of different kinds in Russia and in the international arena, V. I. Lenin exposed the Utopian character of the cooperative reformism of liberal populists, Socialist Revolutionaries, Mensheviks, and Western European social democrats. Polemicizing against the Mensheviks, Lenin wrote: “While power remains in the hands of the bourgeoisie, consumers’ societies will remain a paltry fragment, ensuring no serious changes whatsoever, introducing no decisive alteration whatsoever, and sometimes even diverting attention from a serious struggle for revolution” (Poln. sobr. soch., 5th ed., vol. 11, p. 370).
Noting the important role of workers’ cooperatives as mass organizations, Lenin and the Bolsheviks regarded it as essential that social democratic ideas envelop the cooperative societies, despite the reformist partisans’ desire to protect their “independence.” Lenin’s view is evidenced, in particular, in the resolution on cooperatives adopted in 1908 by the Central Committee of the RSDLP. The Leninist position on cooperatives was clearly formulated at the Eighth (Copenhagen) Congress of the Second International (1910), in the draft resolution proposed by the RSDLP in opposition to the draft of the majority of the French Socialist Party (the draft of J. Jaurès), which distinctly reflected cooperative-reformist conceptions. As a result of Lenin’s negotiations with J. Guesde, who presented a draft that was close to that of the RSDLP in a number of its major propositions, a single resolution containing, “in essentials, a correct definition of the tasks of the proletarian cooperative societies” was worked out and adopted by the congress (ibid., vol. 19, p. 353). (The congress also considered an “intermediate” Belgian draft.) This resolution noted that “the cooperative movement, although under no circumstances capable of bringing about the liberation of the workers, nonetheless should be an effective weapon in the class struggle.”
The ideas expressed by Lenin and the study of the recent experience of the cooperative movement were taken as the basis of the Communist International’s resolutions on the cooperative system. The theses of the Third Congress of the Comintern (1921) on the work of communists in cooperatives stressed that communists should work in these mass organizations of the toiling people and should try to get them more actively involved in the class struggle.
In its resolution on the cooperative system, the Fourth Congress of the Comintern (1922) reaffirmed the theses of the Third Congress, stressing again the need to wage a very energetic struggle against illusions in the cooperative system and its supposed political neutrality, which in reality concealed patent and secret support of the policies of the bourgeoisie and its hirelings.
The subsequent development of the cooperative movement in the capitalist countries confirmed the correctness of the classic works of Marxism-Leninism and of the international Communist movement in regard to their evaluation of the role of cooperatives. This development showed that under capitalism in all its stages, including state-monopoly capitalism, cooperatives are totally bound up in the capitalist economy, which constantly influences their development.
After World War I the relative importance of the cooperative system grew significantly in various spheres of the economies of several capitalist countries. Thus, in the Scandinavian countries, for example, where agricultural cooperative societies began developing at a particularly rapid rate after the economic crisis of 1929–33, the cooperative system essentially had a monopoly in the sale of a number of agricultural products. Consumers’ cooperatives remained an important factor of economic life in Great Britain and many other capitalist countries. Housing cooperative societies also developed in capitalist countries (particularly after World War II in Denmark and Sweden).
Bound up with the capitalist economy, cooperatives were subject to the general laws of its development. The process of the concentration and centralization of capital that develops in capitalist states extended to cooperatives, whose numbers in many capitalist countries began a decline of 30–60 percent in the mid-1950’s. During these years, the total number of shareholders in Sweden increased by 26 percent, whereas the number of cooperatives declined by more than half; in West Germany, the number of cooperative societies decreased from 303 to 154 between 1955 and 1970, and among these 154 cooperatives there were mergers into 20 large regional societies; in Belgium, the ten largest cooperative associations provided 96 percent of the retail goods turnover of the country’s consumers’ cooperatives in early 1972. Many cooperative organizations invest their funds in shares of commercial and industrial firms or in state securities and have close ties with private banks and enterprises. Thus, the British Cooperative Wholesale Society, for example, virtually became an empire in the wholesale trade. It is the main shareholder of the major British sugar monopoly Tate and Lill, as well as one of the main proprietors of the state-monopoly Manchester Ship Canal Association, which controls a significant portion of Great Britain’s internal waterways; it has warehouses and purchasing organizations in New Delhi, Montreal, Vancouver, Sydney, Wellington, and Buenos Aires. There are huge wholesale cooperative societies operating in a number of other countries. The broadening of the scope of activity and dimensions of cooperatives and their enterprises and the process by which large cooperative associations merge into a unified system of modern state-monopoly capitalism are sometimes accompanied by the repudiation of fundamental cooperative principles (including “one member, one vote”). Consequently, some cooperatives become similar in the nature of their activity to joint-stock companies. This phenomenon refutes the reformist conception that cooperatives in bourgeois countries can turn into a decisive force capable of “transforming” capitalism into socialism.
At the same time, cooperatives, primarily in the sphere of exchange, can play a definite role in alleviating the situation of the toiling masses in the capitalist countries (as evidenced by the experience of the cooperative movement over many years). Seeing the importance of working in cooperative organizations, the Communist parties of the advanced capitalist countries consider not only the relative weight of cooperatives in a particular branch of the economy in a country, but, even more, the fact that masses of the working people are joined together in the ranks of cooperatives, and that even in states where cooperatives are not an important factor of economic life, they include very significant strata of the industrial and agricultural workers. (In the capitalist countries, more than 150 million people belong to cooperatives; 70–80 percent of the members are blue-collar workers, peasants, craftsmen, office workers, and self-employed professionals.) For this reason, Communists make it their task to direct the masses who are united in cooperatives to the struggle against monopoly capital, using the opportunities created by cooperative organization. This is why Communists stand for the preservation and development of the democratic principles underlying the cooperative movement and oppose the forces striving to undermine cooperative democracy. An important activity of the cooperative movement, in which Communists and other democratic forces participate, is the struggle for democratic cooperative legislation: that is, support for laws serving the development of the cooperative system and opposition to laws that are aimed at subordinating the cooperatives to the monopolies and that place cooperatives under worse conditions of economic activity than those of private capitalist enterprises (especially those that provide for the petty regulation of cooperative activity by the bourgeois state).
The social role of cooperatives grows when they participate in the economic and political struggle of the working class. In the cooperatives where a progressive orientation is dominant and true representatives of the working people are in the leadership (for example, the National League of Cooperatives of Italy and the Central Cooperative of the Mine Region of France), great attention is devoted to improving the situation of industrial and office workers and using cooperatives as a means of providing employment. In Italy, for example, in the Emilia-Romagna region and the province of Mantova there are cooperative societies for the collective leasing and joint cultivation of the land. These cooperatives provide work for “surplus” agricultural laborers, small tenants, and sharecroppers. Progressive cooperative organizations acting as large wholesale buyers make a considerable effort to influence working conditions in the enterprises of the suppliers of goods; they conduct a struggle against price increases for consumer goods, primarily by assuming some of the functions of commercial middlemen. In the capitalist countries the participation of broad masses of the working people in the cooperative movement encourages a struggle by the political parties for influence among the cooperatives’ members. In a number of countries (primarily Great Britain, Sweden, Norway, Japan, and West Germany), many cooperatives are influenced by the Social Democratic parties, and in agricultural cooperatives, conservative parties—often the Christian socialist parties—enjoy considerable influence.
The collaboration of left-wing forces in the cooperative movement is the basis for drawing the members of cooperatives into an antimonopoly front, the most important cohesive force of which is the Communist and workers’ parties. Communists participate actively in the struggle led by cooperative members for the improvement of the situation of the broad masses of working people and the struggle for peace and democracy, which is indissolubly linked with the struggle for socialism.
Socialist countries. After a socialist revolution, when state power passes into the hands of the working class and its allies, the socioeconomic nature of cooperatives, and consequently their role in social development, changes radically in the context of the prevalence of public ownership of the means and implements of production. Under the new conditions, cooperative property becomes socialist in nature; for this reason, the development of the cooperative system, directed by the government, serves the construction and development of socialist society. As early as the first legislative enactments of Soviet power, the role, functions, and principles of activity were defined for various forms of cooperatives as important elements in the economy of the Soviet state and in the construction of socialism. During the first years of Soviet power, Lenin continued to work out the scientific theory of involving the peasantry in socialist construction on the basis of organizing peasant farms into cooperatives; this theory went down in history as V. I. Lenin’s Cooperative Plan. On its basis, the implementation of the mass collectivization of agriculture began in the USSR in 1929, the completion of which signified the victory of socialism in the countryside. (See the special section of this article on the cooperative movement in Russia and the USSR.)
Other socialist countries used the experience of cooperative construction in the USSR in relation to the specific characteristics of their historical development and socioeconomic and political conditions. The support shown the cooperative movement by the state power in the socialist countries is reflected in constitutions and other legislative enactments that strictly protect the rights which cooperative organizations have to the property that belongs to them. These enactments also guarantee the cooperatives legal status, by which they can occupy an independent place in the socialist economic system. This support also includes state industry supplying cooperative organizations with consumer and production goods and granting sizable credits, privileges, and preferences for taxes, rents, and insurance.
In most other socialist countries, as in the USSR, there has been extensive development of agricultural producers’ cooperatives. The socialist restructuring of agriculture was carried out on the basis of the establishment of these cooperatives. They are the most predominant cooperatives, and they hold a leading place in the agricultural production of the socialist countries outside the USSR.
Besides producers’ cooperatives, various other kinds of cooperatives operate in the socialist countries; consumers’, supply-and-marketing, producers’, and housing cooperatives play a particularly important role. In Poland, cooperatives bought 75 percent of the agricultural products sold by peasant farms in 1971. The cooperative trade as a whole accounted in 1972 for more than 50 percent of the total retail goods turnover in Poland, 37 percent in Bulgaria, 34.2 percent in the German Democratic Republic (GDR), more than 31 percent in Hungary, 27 percent in Czechoslovakia, and 30 percent in Rumania. The range of goods encompassed by cooperative trade includes foodstuffs, industrial goods, domestic and cultural items, agricultural implements, and fertilizers. In some socialist countries, supply-and-marketing cooperatives perform very important tasks in strengthening domestic economic ties. In the Democratic Republic of Vietnam, for example, half of the entire rural trade was in the hands of supply-and-marketing cooperatives in 1971.
The cooperatives in socialist countries are extensively developing their own production, which is based on the maximal utilization of local resources. In 1971 in the GDR, for example, cooperative enterprises accounted for 31 percent of the production of meat and sausage, 24 percent of white bread, 60 percent of matches, and 41 percent of soap. In Czechoslovakia, consumers’ cooperatives produced 45 percent of all rolls and buns and 25 percent of confectioneries. In Poland, the value of the output of cooperatives amounted to 15 percent of the value of the indus-trial produce of the country in 1971. The role of cooperatives in ordinary repairs and other services is considerable. In Hungary, for example, cooperative societies accounted for 70 percent of the ordinary services offered to the population in 1971. Cooperative organizations in socialist countries conduct a great deal of cultural-educational and training work among their members and the rest of the population. The great successes of the cooperative movement in the socialist countries are due to the advantages that the socialist economic system provides for cooperative activity, leadership of the cooperative system by the Communist and workers’ parties, and the creative energy and initiative of millions of members of and workers in cooperatives who participate actively in the building of socialism and communism.
Developing countries. The cooperative movement in developing countries is an important means of gradually overcoming economic and cultural backwardness, creating an independent economy, and liquidating feudal relations; it serves as a school of collective management and a means of training and educating the population. In these countries, the number of cooperatives of various types is growing, primarily in the main branch of their economies, agriculture. In India, for example, the number of cooperative members has tripled since independence, exceeding 55 million by 1972; at this time, local agricultural cooperative societies included 89 percent of the total number of Indian villages and 42 percent of the rural population of the country. In Africa, a distinct advance in the development of the cooperative movement was made in the 1960’s, after most of the countries were freed from colonial rule. In 1969, the membership of cooperatives in the African countries reached 3.5 million. (In 1937 it was 332,000.) The cooperative movement is relatively advanced in the following African countries: in East Africa—Tanzania, Kenya, Zambia, and Uganda; in West Africa—Nigeria, Ghana, Sierra Leone, Cameroon, and the Ivory Coast; and in North Africa—Egypt. In Central Africa the cooperative system is developing at a considerably slower rate.
The kinds of agricultural cooperation in the developing countries are quite varied because of differences in their socioeconomic structures and levels of economic development. Thus, in the countries of South and Southeast Asia and the Near East, for example, where the development of commodity and money relations was somewhat faster than in the developing countries of other regions, credit cooperatives spread widely along with supply-and-marketing cooperatives. However, in the African coun-tries, too, the spread of commodity and money relations is stimulating the establishment of credit cooperatives, although still on a small scale. (In 1971, credit unions in African countries numbered 4,100.) On the whole, it is the marketing cooperatives that predominate in the African countries, as a consequence of the difficulties in resolving the problem of marketing in these states. This problem is linked, in particular, with the monocultural nature of their economies, the legacy of the colonial period. In Tanzania, for example, cooperatives supplied one-third of the exports of agricultural produce in 1972. (Marketing of cotton and coffee, the country’s main crops, took place almost completely through the cooperative system there.) In Nigeria cooperatives supply 20 percent of the exports of agricultural produce; in Kenya the cooperative system sells 86 percent of the coffee crop; and in Senegal the cooperative system sells 53 percent of the groundnut harvest. Often, marketing cooperatives in the African countries also perform the functions of supply-and-marketing cooperatives. Supply-and-marketing cooperatives have developed a great deal in the countries of Latin America, where they were created as a means of protecting the interests of the peasants against the encroachment of the large landowners and monopolies, some of which were foreign.
In the developing countries the activity of consumers’ cooperatives is becoming increasingly important. Thus, in India, where the government had adopted a plan to aid the development of the cooperative system in 1962, there were more than 10,000 consumers’ cooperatives with 816,000 members by 1972. In Egypt about 400 consumers’ societies with nearly 200,000 members were operating in 1972. In Sri Lanka consumers’ societies include about 1 million people. Consumers’ cooperatives have grown up in Algeria, Burma, Syria, Tanzania, and several other developing countries. In the African countries south of the Sahara, the growth of the consumer cooperative system is hindered by the competition of small traders and particularly by the acute shortage of skilled cooperative cadres.
In the countries that have taken the noncapitalist path of development, producers’ cooperative societies have begun to be important in agriculture. In the countries where reforms are being implemented to undermine the foundation of private property and to prepare the conditions for abolishing exploiting classes and groups, the cooperative movement can aid in creating the economic base for a society without exploitation. It becomes an important factor in social progress.
The cooperative movement is developing in Asia, Africa, and Latin America, where it is overcoming various obstacles and difficulties: lack of funds and cadres, competition with private small entrepreneurs, and the resistance of big landowners and moneylenders to the creation of producers’ and other kinds of cooperatives that would threaten the size of their incomes and undermine the cheap labor market. The further growth of the cooperative system in the developing countries will depend primarily on the path of social development chosen and on the rate and depth of socioeconomic transformations.
International collaboration among national cooperative organizations is conducted bilaterally as well as multilaterally. The biggest international association of cooperatives is the International Cooperative Alliance.
A. I. KRASHENINNIKOV
Russia and the USSR. The cooperative movement arose in Russia in the 1860’s in the context of relatively well-developed commodity production and circulation. It united blue-collar workers, craftsmen, white-collar workers, and small peasants; by its class nature it was a petit-bourgeois, reformist, democratic social movement. It developed under the strong influence of the Western European cooperative movement. The emergence of the first cooperatives in Russia was encouraged by the social upsurge in the revolutionary situation of 1859–61, the Peasant Reform of 1861, and the establishment of the zemstvos (district and provincial assemblies). In Russia, cooperatives existed in the form of producers’ artels, consumers’ societies, savings associations, and other such organizations. An agricultural artel appeared in Bessarabia Province in 1863. A number of similar artels subsequently appeared in Poltava, Kiev, Chernigov, and other provinces. These were petit-bourgeois attempts in the peasant struggle against poverty—against dependence on landlords, moneylenders, and the middlemen who bought up the crops. In 1864, consumers’ societies were formed among the office workers of the Kynkovskii Plant in Perm’ Province and the workers of the Petrovskii Plant in Transbaikal Oblast. In 1865, the land-lords S. F. and V. F. Luginin founded a savings association for the peasants in Kostroma Province. Consumers’ cooperatives spread, chiefly in the cities. Insufficient development of capitalist relations and the vestiges of serfdom restrained the growth of the cooperative movement. Of the 75 consumers’ societies that were formed between 1865 and 1870, 59 soon collapsed. Many agricultural artels also met with failure. The initiators and participants of the first cooperatives were relatively well-to-do peasants and liberal members of the intelligentsia.
In the 1890’s, aided by the increased pace of capitalist development in the country, there was an upsurge in the cooperative movement. In 1891 agricultural artels were established in Perm’ Province on the initiative of the zemstvo figure N. G. Fedorov; by 1892 there were already 108 artels there. But as peasants acquired horses and implements, they left the artels, which disintegrated after a few years. In the 1890’s several agricultural artels sprang up in Viatka Province on the initiative of the peasants themselves. The organizing of peasant artels in Kherson Province began in 1894 under the guidance of the district agronomist N. V. Levitskii. Between 1894 and 1897, 119 agricultural artels were formed there, but by the beginning of the 20th century only 16 remained. The first artel creameries appeared in Siberia in the late 1890’s. In 1898 the Moscow Union of Consumers’ Societies (MSPO) was created, and it subsequently became the national center for this kind of cooperative. (In 1917 its name was changed to Central Union of Consumers’ Societies.) Between 1881 and 1905, 1,198 consumers’ cooperative societies sprang up in the country.
At the beginning of 1901, there were 1,625 cooperatives in Russia (837 credit cooperatives, 600 consumers’ cooperatives, 137 agricultural societies, and 51 artel creameries). The development of the cooperative credit system was spurred by the Statute on Small-scale Credit of June 1, 1895. The Board for Small-credit Affairs, established in 1904 under the Gosbank (State Bank), granted loans to cooperatives. The entire Russian cooperative system developed under the patronage of the government and under its supervision and control; it was thus tied to the government and dependent on it. The capitalists managed to use the cooperative movement of workers in their own interests through the creation of factory and mill and railroad consumers’ societies that were dependent on the administration; the leading role in these societies was played by the owners of the enterprises and their representatives. The scope of the cooperative movement broadened after the Revolution of 1905–07, when the number of cooperatives increased by 15–17 times and their membership increased by 20–25 times. The revolutionary struggle of the proletariat aided the establishment of ties between the cooperative movement and the workers’ movement, as well as the emergence of workers’ cooperatives that were independent of the proprietors. The leadership of these cooperatives fell into the hands of the Mensheviks (for example, L. M. Khinchuk, P. A. KolokoPnikov, and V. Ezhov).
The agricultural cooperative system developed through the preferential growth of credit cooperatives, which was the result of the increasing need of the prosperous strata in the countryside for equipment and agricultural improvements—an outcome of the Stolypin agrarian reform. These cooperatives performed purchase and marketing functions. N. P. Gibner, A. E. Kulyzhnyi, S. L. Maslov, A. V. Chaianov, N. P. Makarov, and S. N. Prokopovich stood at the forefront of the agricultural cooperative system. V. N. Zel’geim, D. S. Korobova, A. M. Berkengeim, A. V. Merkulov, and E. O. Lenskaia were linked to the development of the consumers’ cooperative system.
The theoretical principles of the Russian cooperative system did not differ essentially from the conceptions of figures in the Western European cooperative movement. S. A. Kablukov, V. F. Totomiants, M. I. Tugan-Baranovskii, S. N. Prokopovich, and A. V. Chaianov preached universal collaboration, the neutrality of cooperatives, the achievement of social progress through peaceful economic struggle against big capital, and moral improvement of the individual. Figures in the cooperative movement attached great importance to the initiatives of artels and communal traditions of the people. A. A. Nikolaev, E. D. Maksimov, S. S. Maslov, and V. E. Ziuriukin acted as apologists for the artels.
The classics of Marxism showed that the theories of achieving socialism peacefully under the conditions of capitalism solely through cooperative organizations are scientifically groundless. The cooperative system, brought into existence as a means of struggling against capitalism, is ultimately drawn into the system of capitalist relations; it becomes itself an exploiter of wage labor. In imperialist Russia, the cooperative system was a necessary link, a channel connecting financial capital with small-scale production. The Bolsheviks strove to make use of cooperatives— primarily workers’ cooperatives—as legal organizations, in order to strengthen the party’s ties with the broad masses. This work became particularly vigorous from 1910 to 1914. For the Bolsheviks, consumers’ cooperatives were organs of the economic struggle of the working class, as well as bases that made it possible to conceal a part of the party’s work from the police. V. P. Nogin, I. I. Skvortsov-Stepanov, N. L. Meshcheriakov, and other Bolsheviks worked in cooperatives. The all-Russian congresses of cooperative societies were an arena of sharp struggle between revolutionary and reformist elements in the cooperative movement. At the first congress in Moscow (1908) and the second in Kiev (1913) there was manifested a strengthening of democratic tendencies in the cooperative movement and a demarcation of political currents (in particular, the separation of an independent workers’ cooperative system).
On Jan. 1, 1915, there were 35,200 cooperatives in Russia (14,000 credit societies, 6,600 agricultural societies and associations, 2,700 artel creameries, and 650 artisans’ and other societies). During World War I the network of cooperatives nearly doubled as a result of increasing government orders and difficul-ties with respect to the food supply. On Jan. 1, 1917, there were 63,000 cooperatives of all types, with 24 million members. (The consumers’ cooperative system included 35,000 societies and 11.5 million members; the credit cooperative system had 16,261 societies and 10.5 million members; there were 5,500 agricultural societies with 1.6 million members, 2,300 agricultural associations with 230,000 members, 2,900 dairy artels with 435,000 members, and 1,200 artisans’ and producers’ artels with 60,000 members.) The Russian cooperative system was basically rural. Counting the 31,000 rural consumers’ societies, which had 7.5 million members, the entire cooperative system servicing the rural population included 56,600 cooperatives with 18.6 million members, or 88.8 percent of all cooperatives and 76.2 percent of the entire population organized in cooperatives. The rural cooperative system serviced 94 million people, or 82.5 percent of the rural population (calculated on the basis of a peasant family of five persons).
Specialization resulted in the formation of cooperative centers. The Union of Siberian Artel Creameries was established in 1907. The cooperative Moscow People’s Bank (MNB, formed in 1912) played a large organizing role in the cooperative movement— exercising credit; facilitating the delivery of agricultural equipment, fertilizers, and seed to the peasantry through cooperatives; and coordinating the work of local cooperative unions. The Central Association of Flax Cultivators (1915) and the Central Union of Consumers’ Societies (1917) were established subsequently. The workers’ cooperative system became independent, and the All-Russian Council of Workers’ Cooperatives (1917) was its central body. The role of cooperatives developed with the formation of associations of cooperatives. Local unions drew cooperatives and the peasantry they united into regional markets, and large branch unions led them into the national and world markets. The banking center of the cooperative system included the entire system in the general credit and monetary system of Russia. In 1914 the commodity division of the MNB signed an agreement with the British firm known as Union for the Delivery of Grain, Bast, and Hemp. Zakupsbyt and the Union of Siberian Artel Creameries, both Siberian unions, sold butter, furs, wool, and other goods abroad.
After the February Revolution of 1917, cooperatives played an active role in political life. Cooperative leaders supported the Provisional Government, which approved a liberal cooperative law on Mar. 20, 1917. Cooperative figures obtained remunerative orders and joined government bodies. The All-Russian Cooperative Congress held in Moscow, Mar. 25–27, 1917, approved the policies of the Provisional Government. The Council of All-Russian Cooperative Congresses was elected to direct the non-commercial activity of the cooperative system (N. A. Kablukov, S. L. Maslov, A. V. Merkulov, V. N. Zel’geim, A. V. Chaianov, and V. V. Khizhniakov).
In September 1917 bourgeois cooperative figures participated in the work of the Democratic Conference. The leaders of the cooperative system presented an independent slate in the elections to the Constituent Assembly, but they received very few votes.
The victory of the October Revolution of 1917 created the conditions for turning the cooperative system from an appendage of capitalism into an instrument for the socialist transformation of society. Greeting the October Revolution with hostility, leaders of cooperatives chose the path of sabotage and counter-revolution. While they demagogically called for the unification of all democratic forces for the fight against the devastation and impending famine, they rejected collaboration with the Soviet government, thus exacerbating the food crisis. The counterrevolutionary attitude of the leadership of the cooperative movement met resistance from the middle and lower sections of the cooperative machinery. By the decree of the All-Russian Central Executive Committee and Council of People’s Commissars of Apr. 12, 1918, On Consumers’ Cooperative Organizations, the cooperative system was enlisted in the purchase and state procurement of provisions and their distribution among the population. V. I. Lenin’s work “Immediate Tasks of the Soviet Government” played an important role in substantiating theoretically the policy of compromise with the cooperatives. The petit-bourgeois, prerevolutionary cooperative system began turning into a Soviet socialist system, a cooperative system of the broad masses of workers. In the 1918–19 season, the cooperative system procured 25.6 million poods (1 pood = 16.38 kg) of grain (25 percent of the total procured), 2.1 million poods of flax (total state procurement was 3.2 million poods), and more than 2 million poods of butter and other food products. It also supplied felt boots, leather, and wool for the Red Army. The work of the cooperative system was facilitated by the expulsion of bourgeois figures from its leading bodies. The shift of the cooperative system to the side of Soviet power was consolidated by the Third Congress of Workers’ Cooperatives in December 1918, at which Lenin spoke.
As a result of the growing activity of the population and increasing difficulties with food, by 1919 the number of cooperatives grew to 53,000 (17,500 of which were credit cooperatives, 3,000 agricultural associations, 4,000 dairy artels, and 4,000 various kinds of producers’ cooperatives). The Central Union of Consumers’ Societies system alone included an average of 75 percent of the population of Soviet Russia. A number of specialized centers for agricultural cooperatives were formed in 1918: Plodoovoshch (fruit and vegetables), Soiuzkartofel’ (potatoes), Pen’kosoiuz (hemp), Cooperative Eggs, Cooperative Grain, and a purchasing center, Sel’skosoiuz, based on the commodity division of the MNB, as well as a directing body, Sel’skosovet (Agricultural Council). However, the specialization process was not completed, and many cooperatives with mixed functions remained.
About 1,500 agricultural production cooperatives sprang up in 1918, including communes, artels, and associations for the joint cultivation of the land (TOZ). During the period of war communism, there was a reorganization of the cooperative system on the basis of the Mar. 20, 1919, decree of the Council of People’s Commissars On Consumers’ Communes, which proclaimed the transformation of cooperatives into a state system. The state took the organization of agricultural production and barter between the city and countryside into its own hands. For this reason, agricultural cooperatives were in essence curtailed or transferred to the jurisdiction of the consumers’ cooperative system (membership in which became compulsory for all citizens), and the latter became an adjunct of the People’s Commissariat of Food. Lenin and the party studied the role of the cooperative system under the new historical conditions and defined its tasks. V. P. Miliutin, I. I. Skvortsov-Stepanov, O. lu. Shmidt, A. A. Sol’ts, A. M. Lezhava, V. P. Nogin, and A. D. Tsiurupa discussed the cooperative system and its practical work.
The introduction of the New Economic Policy (NEP) required that the cooperative system be restructured and that it be confronted with new tasks. At the Tenth Congress of the RCP (Bolshevik), Lenin substantiated the need to approach the cooperative system in a new fashion and, in particular, to grant it a certain degree of freedom of action. By the Apr. 7, 1921, decree of the Council of People’s Commissars On the Consumers’ Cooperative System it was withdrawn from the jurisdiction of the People’s Commissariat of Food and permitted to establish voluntary unions of consumers territorially or on the basis of occupation. In December 1923 the resolution of the Central Executive Committee (CEC) and the Council of People’s Commissars of the USSR “On the Reorganization of the Consumers’ Cooperative System Along the Principles of Voluntary Member-ship” was promulgated. The Aug. 16, 1921, decree of the All-Russian CEC and Council of People’s Commissars of the RSFSR “On the Agricultural Cooperative System” represents stage of the greatest importance in the system’s restoration. The All-Russian Union of Agricultural Cooperatives (Sel’skosoiuz) was established. In April 1922 the All-Russian Union of Producers’ Cooperatives (Vsekopromsoiuz) was formed.
As early as 1918, in his work “Immediate Tasks of the Soviet Government,” Lenin pointed to the special significance of the cooperative system under the conditions of the Soviet system. In the article “On Cooperatives” (1923), Lenin stressed the importance of the cooperative system as an organization on the basis of which the peasantry, in alliance with the working class and under its leadership, takes a direct path to socialism. On the basis of Lenin’s cooperative plan, the Soviet state carried out a great deal of work to develop all forms of cooperation. The relationship of different kinds of cooperatives and their place in the life of the countryside changed with changes in the objective conditions and tasks of socialist construction. The cooperative movement developed under the leadership of the party and the Soviet state in the interests of building socialism, and it was considered in state plans for the development of the national economy. From a spontaneous movement under capitalism, the cooperative movement turned into socialist cooperative construction.
During the first years of NEP, consumers’ cooperatives grew rapidly, sparing the peasants from exploitation by commercial capital, unifying them in the simplest and most understandable way and tying them to socialist industry. The enormous benefits of the cooperative trade served as the basis for the rapid growth of the consumers’ cooperative system. In 1926–27, more than half of the retail goods going to the countryside passed through the consumers’ cooperative system, which successfully sup-planted the private trader, speculator, and middleman; restricted the sphere of bourgeois relations in rural commodity circulation; and strengthened economic collaboration between the working class and the peasantry. In the process of its development, the agricultural cooperative system created transitional stages between the cooperative organization of commercial circulation and the cooperative organization of production (for example, credit, supply-and-marketing, machinery, land-reclamation, and seed-growing associations). Associations of various types made up a “local network” of the agricultural cooperative system, which was joined by local territorial unions belonging to the system of the central unions of the republics. There were a number of these in the RSFSR in 1927 (Khlebotsentr, L’notsentr, Sveklotsentr, Maslotsentr, Zhivotnovodsoiuz, Soiuzkartofel’, Plodovinsoiuz, Ptitsevodsoiuz, and Tsentrotabaksoiuz). The All-Russian Union of Agricultural Cooperatives, which directed the entire system of agricultural cooperatives, became the All-Russian Purchasing and Production Center in 1927. The Union of Unions of Agricultural Cooperatives began exercising general leadership in the summer of 1927. A special central union of collective farms was established as well—Kolkhoztsentr, which led the work in organizing producers’ cooperatives of the peasantry.
In 1928 and 1929, new strata of the countryside were enlisted in agricultural cooperatives, partially because of the extensive application of contracting. The number of agricultural cooperatives reached 107,000 in 1928 and 165,000 in 1929. About 6–7 million farms joined agricultural cooperatives during the two-year period. The total number of farms organized in cooperatives increased from 30 to 55 or 60 percent. Qualitative changes took place in the very nature of cooperative construction, changes reflected in the shift from cooperative organizing of peasants in the sphere of circulation to cooperative organizing in the sphere of production. A vital social prerequisite for the incipient transition from cooperative organization of the goods turnover to cooperative organization of production was the strengthening of the role of poor peasants in the cooperative system and the ousting of the kulaks. With the victory of the kolkhoz system, credit cooperatives, specialized cooperatives, and other elementary kinds of agricultural production cooperatives became outdated. (In 1931 the Union of Unions of Agricultural Cooperatives was abolished.) At the same time, marketing and purchase operations were concentrated in the hands of the state and the consumers’ cooperative system.
Parallel with the agricultural and consumers’ cooperative systems, other forms of cooperatives also developed in the 1920’s —producers’, housing, and invalids’ cooperatives. The Ail-Union Council of Housing Cooperatives, established in 1926, consolidated two types of organizations: cooperative tenant housing associations (ZhAKT) and home-building cooperatives (ZhSK). In 1929 the ZhAKT’s had 112,800 members and the ZhSK’s had 107,200. The activity of the ZhSK’s was curtailed in the 1930’s and resumed in the 1950’s. The ZhAKT’s were abolished in 1937. The invalid cooperative system, which was directed by the Ail-Union Council of the Invalids’ Coooperative System (Vsekoopinsoiuz), included garment, knitwear, haberdashery, and food artels. (The first invalid cooperative appeared in 1920.) On Jan. 1, 1935, there were 2,340 artels in the system, with 5,722 industrial installations, 1,847 public food establishments, and so forth. In 1935 the total number of people employed in the system of invalids’ cooperatives was 164,700. The gross product of Vsekoopinsoiuz was 526.5 million rubles in 1935, and the retail turnover was 761.6 million rubles. The artisans’ and producers’ cooperative system, which began to develop intensively in 1921, consisted of two independent systems. Metalworking artels were united in Vsekopromsovet, and those manufacturing wood products belonged to Vsekopromlessoiuz. At the end of 1935, there were 11,000 artels, 363 branch unions, and 1.31 million members in the Vsekopromsovet system; Vsekopromlessoiuz had 4,400 artels, 195 unions, and 380,000 members. The gross product of the producers’ cooperative system was 6,515.2 million rubles in 1934 (4,907.2 million rubles from Vsekopromsovet and 1,218 million rubles from Vsekopromlessoiuz).
During the Great Patriotic War of 1941–45, the Soviet consumers’ cooperative system redoubled work to find supplementary sources of food and to mobilize local resources. The role of the producers’ cooperative system in supplying goods for the population and army grew.
In 1944 the cooperative enterprise in each settlement were amalgamated into trades combines. In the consumers’ cooperative system, the organization of auxiliary farms under the auspices of village consumers’ societies, district consumers’ unions, and other such institutions became widespread during the war years. In 1945 there were 15,000 such farms with 164,000 hectares in crops. In 1944 and 1945 they provided 178,000 tons of potatoes, 83,000 tons of vegetables, 21,500 tons of milk, 5,500 tons of meat and poultry, and 1.6 million eggs.
In order to aid the development of trade and production of goods by cooperative organizations, the Central Board for Affairs of Producers’ and Consumers’ Cooperatives was established under the auspices of the Council of Ministers of the USSR in 1946.
As of November 1946, cooperative organizations were permitted to trade in grain, groats, meat, and so forth at market prices (not to exceed commercial prices—that is, prices for nonrationed goods) in cities, in worker settlements, at transportation junctions, and on the docks. Gorkooptorgi directed the urban cooperative trade, which was a significant source of supplies; it supplemented the state trade, influenced market prices in a downward direction, and was a link in the chain of measures preparing the transition from the rationing system to full-scale commodity circulation. In the postwar period, the sphere of activity of cooperatives gradually shifted to the area of state procurement and trade. In 1953 the invalids’ cooperative system merged with the producers’ cooperative system, and in 1960 the latter was eliminated.
A new stage in the development of the housing cooperative system began in the late 1950’s and early 1960’s. A resolution of the Council of Ministers of the USSR of Mar. 20, 1958, recognized as expedient the broader development of home-building and dacha-building cooperatives alongside individual housing construction.
The historically established and consolidated kinds of cooperatives (agricultural, consumers’, and housing) are used in the USSR in the context of an advanced socialist society. They play an important role in developing the national economy and meeting the needs of the working people.
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V. V. KABANOV [13–298–2; updated]