Co-operation between people goes way back to early humanity but the industrial revolution is generally considered the era that heralded in the modern form of co-operatives.
The first recorded purchasing co-operative with surviving records, called the Penny Capitalists, was established in 1769. The Penny Capitalists were a group of weavers in Fenwick, Scotland, who came together to purchase weaving supplies.
In the 1830s Friedrich Wilhelm Raiffeisen, mayor of the small German town of Flammersfeld, recognised that farmers’ financial needs were not being met by the larger, urban financial institutions of that time. He devised a system in which farmers’ savings were collected together which provided a sound financial basis for credit, establishing the first co-operative bank.
At the time, this was a new approach to banking, combining idealistic principles within a business framework.
The Rochdale Pioneers’ First Law
Meanwhile during the 1840s, a group of people in Rochdale (near Manchester) were establishing a business that traded in basic commodities including flour, sugar and milk. The purpose was to ensure fairness in trading of quality goods.
From the development of the Rochdale business, came a set of business principles that were adopted and extended into various forms of business.
Today in Toad Lane, Rochdale, the Rochdale Pioneers Memorial Museum is open to the public. It celebrates the establishment of the co-operative trading business in the very building used by the famous Rochdale Equitable Pioneers Society when it commenced business on 21 December 1844 with 28 members and £28 in capital. By 1860, the society had 3,450 members and capital of £152,000.
Rochdale may not have been the first such co-operative but from its decisions, methods and practices, what are now known as the Rochdale Principles evolved to provide the pattern for consumer co-operatives.
Other examples of early co-operative ventures include the Sheerness Economical Co-operative Society (formed 1816), the Stockport Great Moor Society (formed 1831) and Ripponden Co-operative Society (formed 1832). There are probably others whose records have not survived.
The International Cooperative Alliance
In 1895 a body was established to develop and protect the interests of co-operatives internationally: the International Cooperative Alliance (ICA). Headquartered in Geneva, Switzerland, it has 312 members in 109 countries. Cooperative Business New Zealand is a member of the ICA.
According to the ICA, co-operatives provide jobs or work opportunities to 10% of the global world employed population and the 300 largest co-operatives generate 2,034.98 billion USD in turnover.