Biography of The
Co-operative Bank

The individual gains from the support and protection of the group and the group gains from the contribution of the individual to the pool of its shared resources. Where this drawing together goes beyond instrumental self- interest and furthers the more socially-motivated joint ends of self-help and mutual assistance it forms the essence of co-operation.

In mediaeval times working together was achieved through the manorial system. Rural communities were organised at a local level and, although the Lord was more wealthy and powerful than the rest of the community, each individual was recognised as being an important contributor to this rural social economy. The Lord gave his protection in exchange for agricultural labour, for example. Society was strictly hierarchical and, in turn, the Church and the State granted titles and lands in exchange for the support of the Lord.

The manorial system later found a parallel in the craft guilds, such as The Guild of Cutlers for the makers of knives and other cutlery. Craftsmen organised themselves in such a way as to further their individual interests and ensure that their communal rights were honoured, particularly when dealing with the powerful institutions of the State, Church and Nobility. Their collective skills were protected through controlled entry to the guild, full membership being restricted to those who had undergone a lengthy apprenticeship and attained the status of ‘Master’ at their particular craft. The guildhalls, such as the sumptuous Cutlers’ Hall in Sheffield (where you can see a display of the master cutlers’ craft throughout the history of the guild), testify to the financial success of this form of community.

There is a danger, however, that these past forms of social organisation might be romanticised and portrayed as more idyllic than was actually the case. Ordinary people were, by 21st century standards, abjectly poor and faced starvation and disease unless they had the protection of the Lord of the Manor. This protection carried with it the requirement to bear arms for the Lord when he, in turn, was called upon to support his masters. The craft apprentices and their families would also face abject poverty if it were not for their Masters. Apprentices often lived in the household of their masters for the lengthy duration of their apprenticeship and it was not unusual for them to be required to remain single during their apprenticeship. If the individual accepted these rigorous conditions, the guild system offered ordinary people the chance eventually to secure a station in life where they were relatively protected from starvation. However, much rested on the way the Lords and Masters exercised their considerable power and, inevitably, some were unjust and tyrannical and others indifferent in their competence as leaders and managers. The ordinary people were, in short, hostages to fortune.

The early foundations of what later became The Co-operative Movement are detectable in the efforts of some small groups of peasants to break free from the prevailing social system and become self-supporting. Grappling successfully with poverty through co-operation among equals was necessary if a group was to escape the abuse of some of the powerful Lords and Masters. At first co-operation was experimental in nature and took many idiosyncratic forms which seldom lasted for very long. For example, the 17th century Quakers, or Society of Friends, experimented in communal living.

It was not until the 18th and 19th centuries1 when capitalist principles began to spread, catalysing The Industrial Revolution, that the idea of self-supporting communities of ordinary working people became more widespread, public awareness grew, and ‘co-operation’ took on the character of a social movement. The 18th century was a time of tremendous change, one aspect of which was the advent of the water- and steam-powered machines that made it possible to become rich and powerful without the trouble of maintaining a manor or mastering a skilled craft. Those who had sizeable sums of money, or ‘capital’, could invest it in building ‘manufactories’ full of machines. These machines could do the work of many people and replaced the need for skilled workers, such as spinners or handloom weavers. Instead, machines required relatively few unskilled workers to tend them, thereby reducing the cost of production per unit e.g. bobbin of thread or bolt of cloth.

Factory-made goods became cheaper than their hand-made predecessors and were now more easily within the reach of the less well-heeled. Greater variety meant that there was more choice for those who had always had money to spend. So, more people bought more of the goods, which now cost less to produce. The result for the ‘capitalist’ owners was a most attractive level of financial profit.

Changes in the agricultural system marked the end of mediaeval working patterns and saw workers drifting to the towns in search of employment in the new factories. Agricultural work dwindled with the enclosure of the land into more economically-managed units and the development of labour-saving machinery, such as the steam threshing machine. Traditional skills were no longer needed, nor were the many hands that had once been required to make light of intensive tasks such as the annual harvest.

Towns sprung up and cities grew at prodigious rates as the population became concentrated around the factories. Factory owners had no shortage of people willing to offer their labour and many succumbed to the temptation to keep wages low and hours long. Children were an especially cheap source of labour, particularly for fiddly jobs such as cleaning under the machines without the necessity to stop their operation. Parents, especially those with large families, could find themselves in such dire straits that they gave in to pressure to, effectively, sell their children into factory slavery. Early factories that are preserved as museums, for example Quarry Bank Mill, Styal in Cheshire, document the conditions that late 18th and early 19th century workers faced and the relationship they had with their employers.

Some workers reaped the benefit of a regular wage and the availability of cheap manufactured goods to spend it on. A few were even able to accrue enough capital and credit to enable them to join the ranks of the owners themselves. Yet others were promoted to the role of factory master and acted as well-paid proxy for the owners. However, most paid the price of losing such freedom as they had and suffered exploitation. Aside from being a means of personal survival, work now became a commodity to be bought and sold rather than a contribution to the continuation of a community. The basic need to survive meant that workers sold their labour to another person who had the simple advantage of capital yet did not necessarily feel any social purpose or obligation, and therefore may have seen little need to take on the governance of their business.

The rapid urbanisation consequent upon industrialisation brought about a housing crisis. Mass, cheap housing was the response of the relatively affluent capitalists to the need to put rooves over workers’ heads in order to keep them fit for work, and out of their sight. Overcrowding and poor quality housing produced urban slums riddled with disease, vermin and what we would now regard as crime. For some, already bad conditions of employment degenerated into sweatshops where workers tolerated unsafe and insanitary conditions, long hours, continual bullying and abuse in return for pitifully low wages. When it came to spending these wages, there was little choice as to where to shop. Often the employers also owned the shops and compelled workers to use them. In towns dominated by one company this resulted in the ‘Tommy Shops’ which were effectively operated as local monopolies, able to get away with selling adulterated food and low quality goods at inflated prices. The output of the factories gave those who could afford it a wider range of goods and more variety within each type of good and, since choice is compelling, resulted in an escalation in purchasing. Before too long the demand for goods had become dislocated from their supply and it was the working people who found themselves in the position of holding the economic system together by working ever more productively in exchange for little or no benefit except staving off unemployment.

To add to the vulnerability of the displaced agricultural workers, immigrants from Ireland swelled the labour pool. In general, new patterns of communication were falling into place as roads, canals and railways each played their part in facilitating transport, both nationally and internationally. By the early 19th century, England had fought a long war with France and all across Europe there were conflicts and revolutions. As a result of so many political, economic and social changes everywhere was in a state of muddle, insecurity, stress and strain.2

Above all, poverty had become endemic and it was this that triggered a moral backlash amongst social reformers, who sought to counterbalance what they saw as capitalist exploitation with the weight of a moral sense of social responsibility. The late 18th and early 19th centuries saw the foundation of many socially responsible self-help organisations. An important example of this type of organisation are the Friendly Societies, such as The Ancient Order of Foresters and The Royal and Ancient Order of Buffaloes, which began to spring up in the 1840’s. Those in employment could pay a small weekly sum to the Society and qualify for a ‘relief’ payment should the wage earner fall sick, lose their job or even require to have their funeral expenses covered in the event of death. These societies were democratically organised and administered by their members.

This was the era of great thinkers who still influence us today. Men such as Adam Smith, with his idea of economic natural law, and Jeremy Bentham, who gave us the utilitarian approach to moral philosophy. More radically, writers such as Marx and Engels argued for the overthrow of capitalism in order to replace it with an entirely new, egalitarian, social and economic system. The Co-operative Movement represented another, ethically motivated, strand of this response to capitalism and, with its ideals of local self-help, mutual assistance and democratic participation, was to become a dominant force in the century to come.

1 Asa Briggs (1968) Victorian Cities, Harmonsworth: Penguin.
Martin J Daunton (1995) Progress and Poverty: An economic and social history of Britain, 1700-1850, Oxford: Oxford University Press.
Patricia Hudson (1992) The Industrial Revolution, London: Edward Arnold.
Edward Palmer Thompson (1991) The Making of the English Working Class, Harmonsworth: Penguin.

2 Bonner, A. (1961, Revised edition 1970) British Co-operation, Manchester: Co-operative Union Ltd.

 

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