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The Pellervo Story

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The Pellervo Story MARKKU KU1SMA ANNASTllNA HENTT1NEN SAMl KARHU MAR1TTA POHLS THE PELLERVO STORY A CENTURY OF F1NN1SH COOPERAT10N, 1899-1999 TRANSLATED BY MICHAEL WYNNE-ELLIS PELLERVO CONFEDERATION OF FINNISH COOPERATlVES KIRJAYHTYMÄ OY HELSINKI • Text and illustration editors: Maritta Pohls and Michael Wynne-Ellis Illustrations: Unless otherwise stated, the illustrations are from the Pellervo Photo Archives. Typography and layout: Liisa Holm Paper: Metsä-Serla, Galerie Art Silk 115 g Copyright © 1999 Pellervo Confederation of Finnish Cooperatives ISBN 951-26-4520-3 Printed by Tammer-Paino Oy, Tampere 1999 FOREWORD In a country like Finland, sparsely populated with a short summer and a long hard winter, the idea of people working together in their common interest comes naturally. So when cooperation in its organised fo rm arrived on Finnish soil, the idea readily took root. The birth of cooperation is generally considered to have occurred on Monday, October 2nd, 1899, when the Pellervo Society was fo unded at the Helsinki University Student House in Helsinki. The year 1899 was a critical time fo r Finland and the fo unding of the Pellervo Society was one response to the emergency. Over the century since then, Finland has been transformed from a relatively backward agrarian state into one of the leading industrial countries in the world. In this cooperation has played a significant role. The overall significance of cooperative history has, however, been neglected, even though numerous studies of aspects of the cooperative movement and individual cooperative organisations have been written. The most comprehensive study of the Pellervo movement is already fifty years old, as it was published in 1949 in celebration of the Society's first half century. No up-to-date study of the movement exists and this was considered a serious deficiency. The need is even more urgent considering the fu ndamental changes that have taken place in the operating environment of the cooperatives in more recent times. In autumn 1995 a team of researchers under Markku Kuisma, Professor of History at the University ofTurku, was assembled to write a up-to-date scientific history of the Pellervo cooperative movement's first century. The other contributors were Annastiina Henttinen, PhM, Sami Karhu, PhL, and Maritta Pohls, PhD. The Pellervo Society appointed a History Committee under Heikki Haavisto, chairman of the council of representatives, to assist 5 the researchers in their work. Risto Alapuro, Professor of Social History at the University of Helsinki and Professor Risto Tainio of the Department of Organisation and Management at the Helsinki School of Econornics and Business Administration contributed greatly to the history project. The book, Kartsan Talous - Pellervo ja yhteisCrt yrittämisCrt idea 1899-1999 (A people's economy - Pellervo and the idea ofjo int entrepreneurship 1899-1999), was published in early 1999. Its rather unique structure of three different approaches to the history is explained in Markku Kuisma's introductory essay. Long before its pllblication, however, the idea of a translation had been sllggested. The example of Pellervo cooperation, it was believed, would prove not only of interest to cooperators in other countries, but also useful. However, translating the 700-page book would not achieve this aim, so a shortened version was decided on explicitly fo r fo reign readers. Researcher Maritta Pohls and translator Michael Wynne-Ellis were given the task of editing the new book, assisted by translator Jiiri Kokkonen. The translation has been generously financed by the Finnish Cultural Foundation We hope that our fo reign readers will find The Pellervo Story - A History of Firtrtish Cooperatiort, 1899-1999, of constructive interest in their work in the cooperative movement. PELLERVO CONFEDERATION OF FINNISH COOPERATIVES HEIKKI HAAVISTO SAMULI SKURNIK Chairman of the CEO CounciI of Representatives 6 CONTENTS Preface .. .... , ... , , .. , ......., .... 5 of the state - A centralised model fo r the cooperative movement Bullders of a farmer natlon .. .... 47 Markku Kuisma: The old and new Pellervo membership - From "WE HAVE NO ROCKEFELLERS ... the gen try ta the commoners - At the source BUT WE HAVE COOPERATIVES" . .. ".9 of power - From a rural spirit to a prodllcer ideology - National lln ification an d the private From the Pellervo of professors to a mass business offen sive - The cooperatives learn to movement of fa rmers - "By their own efforts, but adjust joined together" - The third way an d the basic fo rm of en terprise - Three paths to the third way Cooperatives, combat organisation and party polltlcs .. .. ... , ...... ..58 Conservative elements in society - MTK an d the Agrarian Un ion covet the cooperatives - The Maritta Pohls: state an d cooperation -The eyes an d ears of MTK HANNES AND HEDVIG GEBHARD: - Cooperative ideals scrutinised PIONEERS OF PELLERVO COOPERATION ... ..... .. .... 25 When safeguards fall .. .... .... 68 1n a market economy - Safegllards fa il - Towards Concern fo r the nation's fl lture - The Pellervo a gen eral lin e ? - A new national strategy ? Society - Wo rking fo r society - Principles - Two peop le Sami Karhu: THE COOPERATIVE ECONOM Y AND Annastiina Henttinen: ITS STRATEGIES .. ..... .... ... ..73 SEARCHING FOR THE THIRD WAY , ...29 The Pellervo Society organlses ... .. 74 The market economy challenged . .. ... 30 Cooperative societies established - Sllccessflll A national emergency - Cooperatives an d business operations popular education - The third way - The agrarian-national an d the in dllstrial-international Under the leadership of central fronts - Cooperatives an d keeping fa rmers on the socletles ................. , ... ....87 land - Pellervo and the constitll tionalists - The Changes in the corporate environmen t - With Pellervo cooperatives an d the labour movement - varymg success - The problem with retail Nationalism in the economy - With the sllpport cooperatives 7 MTK takes the inltiatlve .............98 The winds of cooperatlon sweep Guaranteeing the target prices - Inner and outer the countryside . 131 circle companies - The fight fo r market shares - The old cooperative system becomes established - The consumer cooperatives in crisis - Metsäliitto New cooperatives emerge - The Pellervo expands - Restructuring the credit societies and network - Collaboration between cooperators - insurance associations - The capital question - The apolitical bourgeoisie Instructive The importance of know-how in trading with cooperation - From economic diversity to the Soviets standardisation - Standardisation of labour among the genders Member resistance to The milestones of Integration ....... 112 standardisation Supranational competition - The Pellervo Society awakens - Preparing fo r the European From processing to production ....... 150 Union The crux of competition From village co-operatives to provincial societies Disintegration of the Pellervo concentrations - - Nationwide cooperatives - Local cooperation - The problems of capital and raw materials - The role of transport and technology - Provincial Standing on one's own fe et operations - The emerging bond among produc­ ers - New style membership The era of enterprlses . _ . _ . 164 Maritta Pohls: A PEOPLE'S MOVEMENT IN KUORTANE ........ ...... .. ..... 121 Flve paths to cooperation . 122 From tar to butter - Pellervo propaganda - Scions of the Society fo r Popular Education - Mobilising the masses - A familiar tradition 8 "WE HAVE NO RO CKEFE LlERS ." BUT WE HAVE COOPERAT IVES" eldom does the good fo rtune of winning many other fields. As Virtanen wrote: "Coopera­ a Nobel Prize come to a small nation. tion is playing an increasingly dominant role in Finland's two winners were both closely society ... and so it must also take on those tasks S connected to the countryside: the writer that earlier belonged to private capital and still are F.E.Sillanpää was awarded the Nobel prize fo r lit­ in many countries." erature in 1939 and the biochemist A.I. Virtanen F.E. Sillanpää (1888-1964), the son of a poor the Nobel prize fo r chemistry in 1945. cottager, came to the fo re in 1919 with his realis­ Although Professor Virtanen (1917-1973) and tic novel Hurskas ku(juus (Meek Heritage) . The the AIV method he developed fo r preserving novel is set against the same poor rural backcloth silage have become part of academic lore in as the dairy farmers who created the Valio Finland, less is known about the background that cooperative and fo r whom the AIV method made it all possible. Since the early 1920s, Virta­ proved so indispensable in raising the quality of nen had been director of research at Valio, a com­ exported products. pany owned by numerous local dairy cooperatives That both Nobelists had strong connections to themselves owned by a hundred thousand fa rm­ the countryside is no accident as Finland in the early ers. Virtanen's AIV method was developed in the 20th century was a predol11inantly agrarian country. Biochemical Research Institute established in Four-fifths of its population of three million lived 1931 by the Chemical Research Foundation, and worked in the fields and fo rests. Emerging owned by Valio, Hankkija and SOK in association industry, particularly the fo rest industry, depended with OKO and three other banks. on rural resources and labour. The distress of the It is quite natural, therefore, thatVirtanen had a landless masses, which Sillanpää describes, was one great respect fo r cooperative enterprises and like­ of the most serious
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