Historically, worker cooperatives rose to prominence during the industrial revolution as part of the labour movement. As employment moved to industrial areas and job sectors declined, workers began organizing and controlling businesses for themselves. Workers cooperative were originally sparked by “critical reaction to industrial capitalism and the excesses of the industrial revolution.” (Adams et al. 1993: 11) The formation of some workers cooperatives, such as those of the Knights of Labor in 19th century America, were designed to “cope with the evils of unbridled capitalism and the insecurities of wage labor”.
Most early worker co-ops did not adhere to clear cooperative structures or ideologies. Starting in the 1830s, worker cooperatives were formed by hat makers, bakers, and garment workers.
In the United States there is no coherent legislation regarding worker cooperatives nationally, much less Federal laws, so most worker cooperatives make use of traditional consumer cooperative law and try to fine-tune it for their purposes. In some cases the members (workers) of the cooperative in fact “own” the enterprise by buying a share that represents a fraction of the market value of the cooperative.
When the current cooperative movement resurfaced in the 1960s it developed mostly on a new system of “collective ownership” where par value shares were issued as symbolic of egalitarian voting rights. Typically, a member may only own one share to maintain the egalitarian ethos. Once brought in as a member, after a period of time on probation usually so the new candidate can be evaluated, he or she was given power to manage the coop, without “ownership” in the traditional sense. In the UK this system is known as common ownership.
Some of these early cooperatives still exist and most new worker cooperatives follow their lead and develop a relationship to capital that is more radical than the previous system of equity share ownership.
1752 – The first successful cooperative was organized in the United States when Benjamin Franklin formed the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire — the oldest continuing cooperative in the U.S.
1844 – The Rochdale Equitable Pioneers Society was established in Rochdale, England. These pioneers wrote down a set of principles to operate their food cooperative which contributed to their success and spread to other cooperatives around the world. The successful establishment of the cooperative in Rochdale marks the beginning of the modern cooperative era.
1865 – Michigan passed what is believed to be the first law recognizing the cooperative method of buying and selling.
1895 – The International Cooperative Alliance (ICA) was established. Today over 200 national cooperative organizations representing 92 nations belong to ICA, the apex organization of all national cooperative movements. The ICA aims to promote cooperative development and trade worldwide and boasts an individual membership of more than 750 million people.
1916 – The first national cooperative association was formed — now known as the National Cooperative Business Association.
1922 – Congress passed the Capper-Volstead Act allowing farmers to act together to market their products without being in violation of antitrust laws.
1920s & 30s – Congress established governmental agencies — the Farm Credit Administration (1929), the National Credit Union Administration (1934) and the Rural Electrification Administration (1936) — to provide loans and assistance to cooperatives.
1978 – Congress passed the National Consumer Cooperative Bank Act, establishing the National Cooperative Bank.
Writings by John Curl
The Populist Moment: A Short History of the Agrarian Revolt in America by Lawrence Goodwyn
Coop Made in USA: Worker-owned and consumer coops in the USA a dossier prepared by Enrico Massetti
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