The Rochdale Pioneers

Owen left a legacy to the working classes as they took from his work those parts that they wanted, in so much mixed this with their own pragmatism, and developed a movement for which they could take ownership. Others, such as Dr William King, did much to spread the idea of co-operation through publications such as ‘The Co-operator’ and through education, especially education in how to run a business. Unlike Owen, who wanted to change the system, King emphasised individual and collective action as a force for change. He believed that working people were capable of taking their fate into their own hands in a constructive way – and that is just what The Rochdale Pioneers did.

The Rochdale Society of Equitable Pioneers was founded by 28 flannel weavers in 1844 and made the first successful attempt at consumer co-operation. They were not driven by hunger but by firm belief in their version of the co-operative ideal. Following Dr King’s advice, and in response to the Tommy Shop with its overpriced and adulterated food (for example, water added to butter, sand to sugar, chalk to flour), they started retailing provisions. There was nothing unusual in that, but what made their co-operative distinctive at the time was the adoption of a democratic approach and an ownership system that kept control in their own hands. Their organisation was much more businesslike than many of the previous attempts at co-operation, which had generally failed due to inefficient management and even dishonesty among officials. Particularly relevant here is that absolutely no credit was allowed, the breaking of which principle had caused the demise of many before them.

The original members of the Rochdale Society each subscribed £1 as the capital with which they bought goods in bulk to be sold on to members without profit. They had no reason to adulterate food in order to increase profits, as other shops did, and prided themselves on selling the ‘purest provisions’. They also sought to avoid getting into political or religious disputes but instead to focus their energy on the common benefits of their society. To this end they formulated a clear statement of their objectives and rules which were then policed by external arbitrators. However, the innovation that is probably most often attributed to them is the introduction of the dividend scheme – ‘the divi’. As the Society developed, they increased their margins and sold their goods at normal retail prices. What was novel was the way in which the profits generated were shared among the members on a pro rata basis according to the amount spent on purchases during the year.

The Rochdale Principles (1860) ¹⁰

That capital be of their own providing and bear a fixed rate of interest.
That only the purest provisions procurable should be supplied to members.
That full weight and measure should be given.
That market prices should be charged and no credit given nor asked.
That profits should be divided pro rata upon the amount of purchases made by each member.
That the principle of ‘one member one vote’ should obtain in government and the equality of the sexes in membership.
That the management should be in the hands of officers and committee elected periodically.
That a definite percentage of profits should be allotted to education.
That frequent statements and balance sheets should be presented to members.

Looking at their list of nine principles it is easy to recognise the concerns generated by the backlash against capitalist exploitation: the raising of capital from within the group; concern for product quality and fair trading; and profit sharing. In addition, there are positive social aims represented in the list. The principle of open and democratic governance was challenging in a political system which did not yet have universal suffrage. The emphasis on education for all (echoing Owen) was also innovative and was to lead to the establishment of The Co-operative College. Perhaps the most radical (and shrewd, since women did the shopping!) was the principle of equality of the sexes which was to take shape as the Women’s Co-operative Guild whose members challenged the prevailing ideas about the role of women. Overall, the balance across all the principles was right and it was this, as much as the principles themselves, that has given rise to The Rochdale Pioneers’ reputation as the founders of the first successful co-operative.

There were, in fact, many other co-operative shops in existence at the time and some of them gave dividends, but the focus and energy of the Rochdale people meant that they also gave their energies as missionaries for co-operation and mentors to existing societies. They enabled lapsed co-operatives to revive and energised new ones. More than that, they broadened the scope of their organisation and pioneered co-operative production, insurance, wholesaling and education. It was their involvement which led to the formation of the Co-operative Wholesale Society (CWS) and some of the people whom they educated went on to become influential figures in the development of The Co-operative Movement in their own right. For example, Walter Cooper, who established a successful working men’s association run on democratic lines, called the Castle Street Tailors, and Lloyd Jones, who was manager of the London Co-operative Stores and made the first attempt at incorporating wholesaling into retail co-operation.

The principles of co-operation have been carried through to the present day and are now protected and periodically revised by the International Co-operative Alliance. The most recent revision of these principles was adopted in 1995 and is much more explicit than the original Rochdale formulation.¹¹ The pioneers had taken voluntary participation and autonomous organisation so much for granted that they did not bother to include them in their original principles. They had also left implicit the idea that there should be co-operation between co-operatives yet did not even contemplate international co-operation. In addition, changes in the context of co-operation have necessitated shifts in emphasis. For example, consumer protection legislation now reduces the need for concern about food quality and weights and measures, yet raising public awareness of co-operation has become more of an issue, as has concern for the community and for sustainable development.

Co-operative Principles (1995) ¹²

Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member one vote) and co-operatives at other levels are also organised in a democratic manner.
Members contribute equally to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by the members and maintain their co-operative autonomy.
Co-operatives provide education and training for their members, elected representatives, managers, and employees so that they can contribute effectively to the de velopment of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
Co-operatives work for the sustainable development of their communities through policies approved by their members.

Building on the work of The Rochdale Pioneers, the Christian Socialists started to engineer co-operation as a movement at a national level. The Christian Socialists (1848–1854) were a group of churchmen and lawyers who opposed the prevailing version of the capitalist system as being counter to the Christian doctrine since it encouraged selfishness and competition thereby causing the neglect of our obligations to our fellow humans. Their vision was one of people living together communally in spiritual fellowship, sharing property and working co-operatively on practical tasks. They produced much propaganda but this rarely reached the working classes for whom it was intended. Instead, it was read by the middle classes and went some way to shocking them out of their comfortable complacency. However, prevailing circumstances probably did more to prepare the way for change. The 1840’s were known as ‘The Hungry Decade’ as poor harvests compounded other social and economic problems. 1848 was dubbed ‘The Revolutionary Year’ since, among other acts of civil disobedience across Europe, the Chartists had staged an unsuccessful bid for social and legal reform aimed at extending political power to the working classes through adoption of the People’s Charter.

Unlike Owen’s Utopian vision of communal co-operation, the Christian Socialists realised that co-operation needed to be forged from within the capitalist system if it was to appeal to the working classes and, therefore, to be feasible. The legislation current at that time related to Friendly Societies and to joint stock companies, neither of which was particularly appropriate for co-operatives. To this end they lobbied for a new law which would enable co-operation to become more widespread. The Industrial and Provident Societies’ Act 1852 ensured that the ownership of co-operatives could not pass into the hands of just a few people through the selling of shares. All members’ shares now had to be either sold back to the co-operative or sold to new members in order to guard against the concentration of power in the hands of a small sub-group within a co-operative society. Because the Christian Socialist lawyers had drafted something which they thought would be politically acceptable enough to get onto the statute books, some of the things which they would have liked to include had to be left out. For example, there was no limited liability for co-operative members who could be held liable for their share of a Society’s debts for up to two years after their membership had ceased.

10 As stated in the 1860 Rochdale Society Almanac.
11 A more full analysis of the 1995 co-operative principles may be found in Birchall, J. (1997) 'Co-operative values and principles: a commentary' in Journal of Co-operative Studies 30(2) No. 90, pp42-69.
12 Cited in MacPherson, I. (1996) Co-operative Principles for the Twenty First Century Geneva:International Co-operative Alliance.