The Beginning of the Modern Cooperative

The Rochdale Society of Equitable Pioneers, one of the first consumers' cooperatives, was 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 cooperative factory and textile mill. Their rules combined a fixed interest on capital with a distribution of profits in proportion to purchases. This has remained the basic structure of consumers' cooperatives. While not the first cooperative, the Rochdale Society was the first cooperative to last for a significant period of time. This can in large part be attributed to the rules under which they operated.

The Rochdale Principles of Cooperation

1. Open, voluntary membership. Membership in a cooperative society should be voluntary and available without artificial restriction or social, political, racial or religious discrimination, to all persons who can make use of its services and are willing to accept the responsibilities of membership. Co-ops strive to break down society's prejudices. This principle does not prohibit student-only membership, however.
2. Democratic control. Cooperative societies are democratic organizations. Their affairs should be administered by persons elected or appointed in a manner agreed to by the members and accountable to the members. Members should enjoy equal rights of voting and participation in decisions affecting the co-op. No member has greater control than any other. Members must "co-operate" to effectively govern their business.
3. Limited return, if any, on equity capital. Share capital should receive a strictly limited rate of interest. This means that cooperatives do not seek speculative investments that care more about profits than people. Investments in the cooperative are for the good of the whole
4. Net surplus belongs to user-owners. The net savings from the operations of a co-op belong to the members of that co-op and should be distributed in an equitable manner. This usually means one of three things: (a) setting aside money for the development of the co-op; (b) providing a service to the members; or (c) distributing money to the members in proportion to their transactions with the co-op.
5. Education. All cooperative societies should make provision for the education of their members, officers, and employees and of the general public in the principles and techniques of cooperation, both economic and democratic. Members who understand the social vision of cooperatives, and who understand how their co-op works, can and do play a more active role in controlling their business.
6. Cooperation among cooperatives. All cooperative organizations, to best serve their member's interests and their communities, should actively cooperate in every practical way with other cooperatives at local, national, and international levels. The same way that co-ops seek to aid and protect their members through the implementation of these principles, co-ops can do the same for each other. Through helping one another, co-ops can strengthen the movement and broaden the social vision.

More information - http://uts.cc.utexas.edu/~laurel/cooproots/history.html

The original Rochdale Store Building