Chapter I


Cooperation is a way of life whereby people unite democratically in the spirit of mutual aid to get the largest possible access to things and services they need.

The basis of argument in this book is the cooperative method of carrying on economic affairs. This means supplying the necessities of life. Necessities mean more than needs. They mean everything that people want. The luxuries of yesterday are the necessities of today. Cooperation is a way of harmonizing human interests, receiving help and sympathy from others by giving help and sympathy to others. It means working together in mutual aid in contrast to isolation and antagonism.

The cooperative method is older than humankind. It goes back to the animals. Beyond that in vegetable life, the practice of one plant contributing to the welfare of another is a basic biological need. And primarily in the field of inorganic matter this same principle is in operation--among the planets, holding one another in their orderly orbits as they swirl in space; among the protons and electrons, as they move in harmonious relation, each contributing to the power of the other to preserve the atom in which they dwell.

From the primitive place of cooperation in inorganic matter down through the ages to its place in the world of men today, its function has been a social function. To understand its meaning the meaning of society must be understood. There is a society of elemental forces governing that minute universe called the atom. There is a society in the cosmos of astronomy with orderly galaxies of stellar nations and sympathetic systems composed of stars solving their problems in peace and harmony.

In the animal organism of man himself is a society of living, breathing moving individuals called cells, exemplifying in their conduct toward one another the cooperative principle which makes life possible and holds society together. These cell individuals are organized into communities, races, and nations, each group performing some special function in which they excel, in the interest of all the other groups. The community that constitutes the liver provides bile, not for the liver but in the interest of the total economy of the whole body. The stomach digests not for the sake of the stomach itself. Survival and happiness of each organ depend upon survival and happiness of every other organ. Exchange and communication among them are free and unhampered. The blood stream with its freight and express, the nervous system with its message and power transmission, cooperate to serve the remotest and smallest communities. Where tariffs, passports and visas, in the form of sclerosis, tumor, or toxin, interfere with freedom of communication and intercourse, disorder and death are threatened. The individual man is a great society composed of individual cells, comparable to world society with its many nations, races, crafts and industries, and vastly more populous than the world itself.

In this society of animal cells the cooperative principle prevails. Where an economic competitive struggle, with acquisitiveness such as prevails in human society, is exemplified in the society of cells, disease and collapse of the whole society result. When an organ supplies itself with more than it needs, a condition called congestion or hypertrophy results. When a cell or group of cells violate the cooperative principle and over-supply themselves with privilege or nourishment, invade the precincts or rights of other cells, and display the signs of excessive plethora, a condition called cancer prevails. Unless it is eliminated, death ensues. This cooperative principle is basic. The very survival of matter and of life depends upon it.

The cooperative idea has always been in operation in the economic life of man. Men would be foolish to reject it. They show their wisdom in getting together to help one another in emergencies. If there were any "normal times" men might cooperate less. There are no normal times. All times are exceptional. Life in fact is one constant emergency.

Neighbors help the farmer put the roof on his barn, and he helps them. Long ago when a house burned the neighbors helped the owner replace it. Then they all chipped in money for his relief. Later they organized to standardize responsibility and agreed that each would pay his proportion of the total damage so that each would be fully protected against loss. This was the beginning of cooperative insurance, which is the oldest form of insurance in the world.

Cooperative distribution began in a similar way. A few people united to become their own merchant. A number of people with common wants unite to form a cooperative society. They pool their capital and buy what they need. A thousand poor men thus by mutual action, pooling ten dollars each, place themselves in the economic position of one man with $10,000. But they have the consuming power of one thousand men. The American Indians, hundreds of years ago, practiced the cooperative method. They united their lands and resources and administered them as a whole in the interest of fairness and economy, and for the sake of promoting harmony among themselves.

To supply needs as consumers, people united to form cooperative societies to carry on retail stores. The idea was to pool their buying power, buy at wholesale, distribute to themselves at wholesale cost, and thus become their own retailers instead of paying other people to do it for them. They thus had a control over quality, fairness of dealing, and honest measures as well as price.

In the course of time when there were some cooperative retail stores in Great Britain, a group of people studied the cooperative practices and formulated certain methods which they had observed were necessary for success. In Rochdale, England, in 1844 they set up the Society of Equitable Pioneers and with 28 members opened a little retail food store with $140 capital. It succeeded. They saved money, got honest measure, and learned how to carry on business for themselves. At the end of the first year membership had increased to 74, paid in capital was $900, and the total business for the year was $3,550. At the end of fifty years there were 12,000 members and $2,000,000 capital, and the savings (or profits) amounted to $300,000. At the end of ninety years there were 44,000 members and a yearly business of $3,250,000. The society continues to prosper and expand. What was once the smallest became the largest retail business in the town. During its first 100 years of existence, its total turnover amounted to $150,000,000, its total savings which the members got back in cash amounted to $20,000,000. This was 13 percent on turnover. But on their investment, which is the way of capitalistic calculation, the return was greater. The members had put in $3,000,000 capital and made $20,000,000.

The Rochdale Pioneers adopted certain methods which are now regarded as the standard pattern, although they are modified in all countries. Use of these methods has won success for cooperative business. Their modern interpretation is set forth on page vii. The most important are democracy with one vote for each member; and surplus savings, or profits, returned to the members in proportion to their patronage.

The first of these, democracy, is held up not as an ideal or theory, but is a practical rule and is an essential of success. Cooperative societies that do not practice democracy fail. Return to the customer of the difference between the cost price and distributing price means that profit is abolished, and business is done for the sake of service. The savings are not allocated to capital as in profit business but capital is paid only a fixed amount called its wages. Open membership makes for democracy. (See Chapter on Unlimited Membership, page 27) . Cash business keeps the society and the members out of debt. Members who need credit get it at the credit society or cooperative bank. Education in cooperation is carried on among the members to increase their understanding and among nonmembers to increase membership. Neutrality means that the cooperative society furnishes a common ground upon which all people may stand regardless of race, politics, or creed. As cooperative societies succeed in supplying one service, they expand into other fields, with the ultimate view of supplying all needs of the membership. In the same way that individuals united to form the primary cooperative societies, societies unite to form federations--district, regional, national, and international--moving toward a world federation or fellowship. People are not born into a cooperative society, they join and are accepted voluntarily.

These methods with modifications have prevailed since 1844. A consistent upward curve has represented an increase in individual members, societies, invested capital, amount of business, and fields of service. According to the International Labour Office of the League of Nations, 143,000,000 persons were in membership in cooperative societies of all kinds in 43 different countries in 1946. Most memberships represent a family. More than one-fourth of the population of the world are embraced in these societies. About 78,000,000 of the membership are in cities and towns. This membership is not problematical; the names, addresses, and amount of investment of every one of these people are matters of business record.

Consumer societies supply the essential needs of the members. They conduct retail stores, in some towns the largest and finest, in some the most numerous. Some of these in the United States are neither large, fine, nor numerous. But wherever they are they represent an ideal and they aim toward betterment. In Sweden, for example, are over 700 consumer cooperative societies with 6,500 stores. The Stockholm society is characterized by the esthetic beauty of its 400 retail cooperative shops, including a department store in the central business section. The London Cooperative Society is the largest retail distributive business in London with nearly 1,000,000 members.

Cooperative wholesaling follows when there are enough societies in a district to federate for wholesale purposes. Such wholesales exist in 40 countries. In time the wholesales engage in importing and manufacturing. They produce the important commodities, from chemicals to automobiles, from food and clothing to lumber and bricks. The largest shoe production in Great Britain, the largest meat production in Switzerland, and the largest flour mills in Sweden are those of the consumer cooperative wholesales. Their products are made in the interest of the consumers. The lamp bulbs of the Scandinavian cooperative wholesale are purposely made to last 25 percent longer than the bulbs of the lamp trust whose bulbs are purposely made to last 25 percent shorter time. These wholesales reach back to the raw materials and are owners of extensive forests for lumber production; farm lands for raising food, including vegetables for their canning factories; livestock for the production of milk, cheese, ice cream, meat, and hides; wheat lands for their flour mills; fishing fleets; coal mines; water supply and water power. In the United States in 1950 the cooperative consumer wholesales owned 21 gasoline refineries with a total capacity of 130,000 barrels a day, 1,670 miles of pipe lines, and 821 oil wells. More than 3,500 cooperative consumer societies are engaged in the oil business.

Cooperative housing is a form of domicile in which the tenants are the owners of the stock of the cooperative housing society whose property they occupy. One such society in New York has over 5,000 members. Freidorf, a small town in Switzerland, is 100 percent cooperatively owned--houses, streets, park, schools, and all business places. In Switzerland after World War II, three-fourths of the houses built were owned by consumer societies. Fifteen percent of the people of Stockholm live in cooperative houses. Gothenburg has half its population in such houses.

Cooperative banking is carried on in the interest of depositors and borrowers. The credit union is a form of cooperative banking. There are over 120,000 such societies with 50,000,000 members and an annual business of $ 15,000,000,000.

Cooperative insurance exists in at least 43 countries. It represents a large part of the industrial insurance of Great Britain. In the United States are over 2,000 cooperative insurance societies supplying insurance at cost.

Cooperative education is carried on in all countries which have a cooperative movement. These societies and federations have their educational committees, schools, and colleges. A large amount of cooperative literature in libraries and reading rooms consists of books, magazines, and weekly and daily papers. It contributes to cooperative understanding. Recreation is represented in cooperative recreational societies and in departments in distributive societies.

A cooperative press exists in many countries. Printing and publishing are well developed. Cooperative publishing houses are widely distributed. The British Cooperative Press is a federation of 652 cooperative consumers societies. This book is the product of a cooperative publishing society, owned by a federation of 150 consumer societies. As the author of many books, I can testify to the high quality of efficiency of this service.

Bakeries have long been expressions of cooperative production. They are found in all cooperative countries. They keep down the price and improve quality of baked goods. The largest bakery in Scotland is the Cooperative Bakery of Glasgow, owned by 212 consumer societies.

Cooperative restaurants, laundries, and undertaking establishments reduce costs to consumers. Transportation is provided by cooperative bus lines in many countries. Airplanes are now owned by cooperatives. Radio stations are conducted by cooperative societies and the listeners determine what shall be broadcast.

Electric power and light are provided cooperatively in many countries. There are over 800 cooperative consumers' electric supply societies in the United States. The 3,000 cooperative telephone societies supply 350,000 families with service.

Cooperative health protection is expressed in organizations of patients and prospective patients to prevent and cure disease. They own hospitals, clinics, drug stores, and laboratories. They employ physicians, nurses, and technicians on a salary basis. They maintain up-to-date health institutions. Costs are reduced and service is improved. Expenses are almost entirely borne by the 98 percent of the people who are not sick.

These, in general, are some of the services the people as consumers organize to perform for themselves. They show that when people set up a business it need not be a business to supply the needs of others and for the purpose of making money by selling to other people; they show that when people want something, they need not go to somebody else to get it; they show that people can unite as neighbors and friends and together carry on business to supply themselves. That this is more than a theory is proved by the increasing success of the cooperative method in the hard world of business affairs.

The countries which exhibit the highest degree of civilization are the countries practicing the most cooperation. Cooperation is both a cause and a result of civilization. Denmark, Sweden, Norway, Switzerland, and England represent the highest degree of civilization and have the largest proportion of their population in cooperative societies. According to the criteria of civilization the most highly civilized country in the world is Iceland. This country has 75 percent of its population served by cooperative societies and more than 75 percent of the business of the country is done by these societies.

Cooperatively organized consumers represent the nonprofit service motive in action. Cooperative societies of producers in which workers, manufacturers, and agricultural producers unite cooperatively to sell their products to the general public, may be truly cooperative in organization, but the purpose and results of their activities are in many respects diametrically different from consumer organization. Producers are interested in making profits from the needs of the consumers. Accordingly, they want high prices, scarcity, tariffs, and preferential laws as do other profit businesses. A natural tendency of these organizations is to use consumer cooperative methods in supplying themselves. They buy cooperatively and manufacture for their own use. Thus the two economic methods are often found in the same organization. In many farmers' associations of this sort, the purchasing in time exceeds the selling, and the farmers then organize themselves into consumer societies.

Cooperative interests of the consumer are peculiar. He wants lower prices and abundance. His interests are the same as public interest, because he represents no class, but everybody. Everybody is a consumer all the time. He is a worker but part of his life and only part of the day. Consumer interest is the universal interest. It is a social and cultural interest and not wholly an economic concern. It is addressed to everybody and not to special classes, groups, and occupations. While need for labor declines and the worker works less, and becomes less necessary, the needs of the consumer become greater. It is not as a worker but as a consumer in the enjoyment of life that man plays his most important role. The consumer is the worker in the moments which he controls and in which he does what he most wants to do. Finally the voice of the consumer is the decisive voice. What he wants is what will be produced. What he rejects will no longer provide employment. The consumer's word is the last word.

While the organized cooperative consumers are working for low prices and abundance and for every device that makes it easy for people to get things, this is the opposite of the prevailing economy that is causing distress and tension in a world that could supply everybody's needs. Scarcity and high prices are causes of the discontents that make for war. Nations with people crying for things, often try to get them by conquest instead of by changing the economic system to one of abundance.

Cooperative business springs up where people believe they can supply themselves more effectively. It can not be said that cooperation puts the profit merchant out of business. He puts himself out of business. Failure is commonly his destiny. Cooperation like any other business comes upon the scene of this inefficiency. If it supplies a need better, if its prices are lower and its quality higher, if it is more efficient, it thrives. If not, it does not go on. Profit business teaches: "Competition is the life of trade." Cooperation accepts the teaching.

Cooperation needs the challenge of other kinds of business, for cooperative societies do not engage in competition with one another except for excellence. The totalitarian state that would press all business into one mould is moving toward mediocrity and indifference. Where cooperative business exists, profit business or the government in business should always be free to come into the field and compete with cooperation. This challenge of other methods can keep cooperation up to the mark. Whatever kind of business serves the people best should have their support. Cooperation asks for no favors from the state. It would be disadvantaged were it coddled and helped by government agencies as is profit business.

In the profit business world one business attacks another and by fair methods or foul attempts to destroy it. Cooperation attempts destruction of nothing. It represents wider distribution of ownership. Instead of few owners of a business or many voiceless owners, cooperation puts the shares of a business in the customers' hands. These local people have control, and success depends upon their patronage and their control of their own business.

I have lived in communities where the people as cooperatively organized consumers own all the buildings and businesses; where the children play in playgrounds owned by their parents, and are entertained in movie shows where parents select the films; where the parents are all employed in the cooperative society; where the cooperative method provides the food, clothing, and housing, the banking, insurance, and recreation; and I can testify that the human relations, health, esthetics, and general happiness are superior to those in communities of a similar size where profit capitalism prevails as the dominant economic method. This is only my observation, with my bias in favor of the cooperative method--but a bias born of many years of scientific study of this subject, in some twenty-three different countries. It has back of it my search for methods making for peace. This study shows that the methods here described conduce toward the natural contentment that promotes peace. It shows that people engaged in cooperative undertakings are less inclined to war than those occupied in the profit competitive struggle. Profit business can be converted into cooperative business. Since cooperation stands for private ownership and free enterprise, it differs from the prevalent methods of profit business chiefly in that the first is carried on for the purpose of service, the latter for the purpose of profits; substitute the service motive for the profit motive and the change is made from the one to the other method of business.

Building up cooperatives by organization of consumers to learn how to start with small retail distributive business is the slow and substantial way to develop cooperative democracy, but there are faster ways. Existing distributive businesses can be made cooperative by organizing the customers, teaching them the meaning and methods of cooperation, letting them buy stock in the corporation until it is owned by the customers, who then elect a board of directors and proceed with the business on a cooperative basis. This method has been successfully practiced.

The large business corporations are owned by stockholders. Three changes are necessary to make them cooperative. (1) Limit the amount of stock each person may own, (2) provide one vote and no more for each stockholder and allow no proxy voting, and (3) allocate profits to the stockholder patrons in proportion to their patronage. Thus the capitalistic profit corporation becomes a cooperative. This method is applicable to corporations great and small. It fails unless accompanied by education in the meaning and methods of cooperation. There is no such thing as cooperative democracy without education.

If general education from youth taught the people the fundamentals of cooperation, this change could be brought about voluntarily, springing from the people. It can be brought about politically. A political government, supported by a large majority of the electorate who are cooperators in understanding and aim, can employ the above program. Such a government thus becomes the instrument of its own undoing. It can promote and witness the expansion of voluntary cooperative organization of the people. While such organization proceeds, an accompanying decline in the functions of government is inevitable. Later in this book it will be seen that the rise of cooperation means decline of the need for government and that the evolution of cooperation predicates the fading out of governmental politics and the expansion of free and voluntary action in the economic field. This is the field where life is lived.

The Nazi Government in Germany changed the thinking of a great nation in a period of six years. This change was from imperialistic capitalism to national socialism. While the same sort of totalitarian regime was developing in Italy ten years earlier, Germans in Germany told me such a change was impossible in Germany. But it came. The Government did it. The Russian Government had done a similar thing still earlier. The United States Government in 1917 and 1918 converted a peace-loving people into a belligerent mass, screaming for blood. So great is the propaganda power of government. The educational potential could be equally great. A government could use its power for the cultural advancement of the people. It could change the public psychology from that of profit seeking to that of mutual aid in the twinkling of an eye--speaking in terms of the vast reaches of history. Government could institute cooperative democracy. Most reformers who think and plan for peace miss the cooperative method. They describe idealistic and imaginary ways of peace which are supposed to do what the cooperative method does. Indeed, some actually describe the cooperative way as an hypothetical ideal, apparently unconscious of the existence and practice of the method they are conjuring up from their imagination. They are surprised when informed that what they propose as their idea has been in practical operation for a hundred years and is to be found in all the countries of the world. Some seem to think that the great plan that is to bring peace and prevent war must be gotten out of the realm of the unknown and can not have been in operation, because everything in operation has had its chance and failed. As a result, the obvious cooperative method is by-passed for the sake of finding a less obvious cooperative method somewhere else.

Many reformers think of cooperation as an idealistic scheme a bit too good for human beings' daily food. Some think of it as a crass bread and butter business without the idealism necessary to a peace movement. The aim of this book is to bring the cooperative method out into the field of battle where its peace promoting power may be observed.