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George Melnyk (1985) has argued that the practice of Co- operation has developed through three different phases, Utopian, Movement and Sy stem. Co-operatives have shifted from small, decentralised, utopian communities which where attempting to build a new world one village at a time, to large centralised conglomerates trying to keep abreast of their private, for-profit counterpans. Despite this and other critiques there remains an implicit and overarching set of values expressed by the Co-operative movement that Co-operatives are agents of social change. The CO-operative principles are cornmonly thought of as the source and embodiment of

these values. This thesis examines whether the Co-operative

movement's own expression of its ideology, as expressed by the International Co-operative Alliance three reviews and declarations of

'the Co-operative Rinciples', has followed this same shifi from social transformation to organisational sumival. Acknowledaements

There are a number of people who were invaluable to the progression of this thesis and my life in Fredericton. 1 would Like to thank:

My supervisors. Prof. Jim Richardson and Prof. Jennie Homosty,

for their patience with rny slow and erïatic progress on this project.

1 would like to thank Jim for allowing me to be involved in a variety of research projects over the past seven years. I am grateful to Jennie for sharing her passion for politics and for her willingness to

assist me in navigating the various administrative and bureaucratic road blocks that I came across.

Susan Doherty, for her willingness to share al1 that she hows about navigating the University bureaucracy and. her irreverent

sense of humour that could often brighten the darkest days. Hester. Jack. Thea and Aaron for their never-ending

encouragement and support, botb emotional and matenal, and lively intellectual discussions over the past seven years.

Chris Colwell, for his love and support, and the time he gave and patience he exhibited while editing the many drafts of this thesis.

My parents, Paul and Joan Ford, for their constant love and support through the many, often difficult and turbulent years of academic life, from grade school to the present day.

1 wish to express my appreciation to the University of New

Brunswick for the various employment opponunities available to me during during the coune of my graduate work. Table of Contents

Chapter 1: Introduction

Cbapter 2: History of Co-operative Organisations

2.1, Co-operative Thought before Rochdale: Utopian Socialists 2.2- The Rochdale Equitable Pioneers' 2.3. Rochdale as Mode1 to the Movement 2.4. The Beginning of the Systems Stage

Chapter 3: Literature and Tbeory Review

3.1. Movement literature 3.2. Empincal Literature 3.3. Historical literature

Chapter 4: Method and Methodology

4.1. Purpose 4.2. Discussion of Content Analysis 4.3. Source of Data 4.4. Limits and Possibilities of Content Analysis 4.5. Data Collection and Other Rocedures

Chapter 5: Data Preseatiition and Analysis

5.1. The ICA'S First Review of the Rochdale Rinciples: 1930-37 A. Statement of the Rinciples (1937) B. Summary of 1937 Report 5.2. The ICA'S Second Review and Revision of the Co-operative Rinciples: 1960-66 A. Statement of the Rinciples (1966) B. Summary of 1966 Report 5.3. The ICA'S Third Review and Revision of the Co-operative Principles: 1988- 1995 A. Statement of the ninciples (1995) B. Summary of 1995 Repon 5.4. Presentation of Data A. Analysis of Progression of each of the 10 Co- operative Rinciples with lFigure 5-2: Sumrnary of Analysis of ICA Reports of 1937, 1966 & 1995) B. Summaries of the Analysis by Year

Chapter 6: Conclusion

6.1. Summary of the Findings 6.2. Summary of Secondary Analysis 6.3. Relevance of the Literature 6.4. Directions for Future Research

Bibliograpby

Appendix

Figure Summary of Rinciples chart terms of reference chart Melnyk's Characteristics chan 1

Chipter L

introduction

My search for housing as a student in Kingston, Ontario lead to my first expenence witb CO-opentives. At fint glance, the student housing options seemed to be either the run down Victorian houses of the 'student ghetto' or the many expensive houses, with their overly restrictive leases, owned by one notorious landlady. 1 was impressed and relieved to find Science '44 Student Housing Co- operative which provided a low cost, high quality, student owned and operated alternative. I was intrigued by the organisations philosophy and goals and soon became actively involved. With this involvement grew a belief that Co-operatives; as non-profit. collectively owned, democratic organisations; provided an aitemative to private. for-profit enterprises and might have an impact on the nature and direction of the economy. This was a springboard for my involvement with the Guelph Campus Co-operative, Ontario Regional

Co-operative Council, the Nonh Amencan Students of Co-operation

(N ASCO). and the Canadian Co-operative Association (CCA).

In every CO-operative 1 was involved with 1 found an implicit, commonly understood, package of overarching values with which the Co-operative movement identified. This package of ideas maintained that Co-operation was. and had alway s been, about mutual-aid. equaiity, unity, democracy and social change. It was, and still is, a widely held notion that these overarching values are embodied in the Rinciples of Co-operation.

As my experience with CO-operatives broadened, 1 realised that the practice of Co-operation was not fulfilling its promise as a social movement and that CO-operative organisations were not living up to these overarching values. This frustration lead to a desire to understand more about the development of the Co-operative movement from its original goal of replacing capitalism with a Co- operative economy to its successful co-existence with liberal democratic capitalism. My reading eventually led me to the work of George Melnyk (1985). Melnyk (1985) traces the development of Co-operatives from radical utopian communities, to a world-wide movement which aimed at the total conversion of the economic system, to organisations concemed pnmafily with their own survival. He argues that there are three distinct phases, Utopiaa, Movement and Systems. which mark this transformation of Co-opentives. The

Utopien phase, dating from approximately 1800 to 1850, was characterised by integrated CO-operative communities which offered an escape from the abuses of modem life. The Movement phase, from approrimately 1850 to 19501, was characterised by the tremendous growth of single-function, single-interest CO-operatives. In the current Systems phase Co-operatives are primarily concerned with managing the success which they achieved in the previous phase and ensuring organisational suwival.

1 began to wonder about the disparity between the overarching values of the movement and its practice. This led me to question whether these values had in fact remained constant from the rnovement's earliest day. In an attempt to answer this question, I began to read histories of CO-operative philosophy and thought. While these histories provided invaluable information about abstract philosophical thought of key individual thinkers, I was hstrated that they did not trace the development of the CO-operative principles as expressed by the collective movement. This led me to the International Co-operative Alliance (ICA), the world-wide alliance of national and intemationai Co-operative organisations, which has made three successive statemeats of 'the

Co-openitive Rinciples' . 1 wondered whether the ideas and values

Melnyk (1985) says that the movement phase came prior to 1900 in Europe, after 1900 in North America, and even later in 'developing corntries'. embodied in 'the Co-operative Rinciples', as expressed by the ICA, remain constant over tirne, or do these statements in fact change to reflect the changes that have taken place in the practice of Co- operation.

In this study, 1 use the International Co-operative Alliance's expression of the Co-operative Pnnciples' as a proxy for CO-operative ideology. 1 undertake a content analysis of the ICA'S 1937, 1966 and 1995 statements of 'the Co-operative Rinciples' to determine whether they follow the same trajectory as the development of CO- operative practice. I rely on the Utopian. Movement and Systems phases of Melnyk's (1985) schema as analytical categoties, to examine each report's expression and treatment of the individual ptinciples. Thus, the purpose of this thesis is two-fold: 1) to determine whether the development of the CO-operative ideology follows

Melnyk's (1985) mode1 (thus enlarging the scope of this mode1 from its current focus on the development of CO-operative organisations) and 2) to expand Our understanding of the development and transformation of Co-operative ideology, for scholars interested in social movement organisations* and people interested in marshalling the emancipatory potential of social movement organisations.

In this thesis 1 use a number of terms in specific or limited ways and 1 would like to clarify my usage. 1 use ideology, Co- operative ideology. and the ideology of the Co-operative movement to refer to the ideas and values as expressed by the movement's periodic reviews of 'the Co-operative Rinciples'. 'The Co-operative

Principles' refers specifically to the ICA'S statements; the term principles is used when any other reference is required. Movement (capitalised) refers to Melnyk's second phase of development; movement (lower case) refers to the CO-operatives collectively. as in the Co-operative movement. 1 use Co-operative to refer to the Iarger picture - Co-operative ideology. Co-operative movement, etc., while I employ CO-operative to refer to a single or few cosperative societies.

Chapter two provides a narrative history of Co-operation from its utopian origins in the Industrial Revolution, to the movemeot's preseot status in Britain. This is intended to give the reader a more comprehensive picture of the progression from social transformation

2 Social movement theorists, McAdam, McCarthy, and Zald (1992), suggest ttLat there is a deartb of studies wbich examine the role of ideology in the emcrgrncr and development of social movements due to the nebulous nature of ideology. The IC A's extensive and inclusive process of consultation, repea ted three times within a sixty year span, and the resuiting ehborate statements offer a rare opportunity tu examine the development of the ideology of a social movement organisation. to organisational survival which Melnyk (1985) describes. In the third chapter, I review the various bodies of literature which focus on Co-operation and CO-operativesand deal in some way with the principles of the movement, the ICA's statement of 'the Co- operative Rinciples' or ideas of Co-operation. Chapter four is a description of the methods and methodology used in this study. I employ content analysis in an attempt to understand the histoncal development of the ideology of fonnal Co- operation, as expressed by the International Co-operative Alliance's three revisions of 'the Co-operative Rinciples'.

Chapter five offers a brief account of the context of each of the ICA's reviews and revisions of 'the Co-operative Principles'. This is followed by a presentation and analysis of the ICA's 1937, 1966, and 1995 revision of 'the Co-operative Pnnciples' to determine whether their development follows the same upjectory as the practice of Co- operation. as described by Melnyk (1985). In Chapter six 1 summarise the findings of the previous chapter, discuss the implications of this study for CO-ops and other social movernent organisations, as well as scholprs who are interested in the development and transformation of ideology of social movernent organisations and suggest directions for future research. 7

Chapter Two

An Overview of the History of Co-operation

Co-operatives are democraticalIy-controlied. jointly-owned associations of people who unite voluntarily to meet their common economic, social, or cultd needs and aspirations. Co-operatives can range from self-contained communities. like the Kibbutz in Israel, to organisations designed to fulfil a single function. The vast majority of CO-operatives are of the latter type. Single-function CO-operatives run the gamut from consumer-owned stores, credit unions. and insurance organisations to daycares. Man y contemporary Co-operative organisations trace their mots back to the consumer CO-operativestore established in 1844 by the Rochdale Equitable Pioneers. The store and its operating principles provided the basis for a worldwide movement. However, a nineteenth century British writer on Co-operation, George

HolyOake, made the case that the ongin of modem Co-operative institutions lay before Rochdale. He points to the idem of Eumpean thinicers of the late eighteenth and wly nineteenth century such as

French utopian socialists St. Simon ead Charles Fourier, as well as the

English industrialist reformer Robert Owen, as important precursors of Rochdale ~olyOake.19071.

The roots of Co-operative thought lay in the dramatic social upheaval of the Industrial Revolution. Many social, political, and economic thinken searched for solutions to the problems of the day. Generally speaking, the proposed solutions can be categorised in one of two groups - socialist solutions which focused on collective action and association as the path to developing human potential, and liberai solutions, which focused on human potential as dependent on the development of the individual. Early proponents of Co-operation, such as Robert Owen. Dr. William King, Fourier. Saint-Simon and

Philippe Buchez3 adamantiy believed in the power of association to transform humanity and society. Of these. the work and thought of

Robert Owen and Dr. Wm. King were most infiuential in the development of the modem Co-operative movement. As a result I will briefly review the work and contribution of these two men. Robert Owen (1771-1858) is often described as 'The Father of

F.C.M. Fourier ( 1772- 1837) a French Utopian socialist, advocated the establishment of self-supporting, democratic, CO-operative communities to address issues of production as a means of eliminating poverty. Fourier was not a mm of action. Despite this, others acted on bis ideas and many Fourierist communities were started in France and in the USA, altbough they too eventually failed (Watkins, 1986: 160). Claude Henri Saint-Simon ( 1760- 1a%), a French philosopher, and bis followers were advocates of democratic production vnits and viewed society as a vast association of producers. It was Philippe Buchez (179Cl863). originally a disciple of Saint-Simon, who is credited with developing the basic principles of producer's CO-operatives. Co-operation', primarily because his Co-operative ideas provided stimulus to the 'Rochdale Pioneers' and many other CO-operaton. Owen, a wealthy British factory owner. was a prolific author on Co- operation, an advocate of education and factory reform, and later in his life a founder of British Trade unionism. He envisioned 'villages of CO-operation' as an ideal type of society that would transform humanity. These democratic villages would specialise (some would be agricultural. other industrial) and would barte+ amongst themselves. forming an informal CO-operative commonwealth (Potter,

1899; Lambert. 1963; Cole. 1965: Watkins, 1970; Birchall. 1994) Education was a comerstone of Owen's plan; education would enable people to form villages of CO-operation and opt out of capitalism into the 'New Moral World's. While Owen agreed that capital should receive a dividend, this was a practical concession to the economic times. However. he believed that the villages of co- operation would be so successful and attractive that 'capitalists w[ould] voluntarily surrender the dividend of their capital (Lambert, l963:43)".

-- - -. . . - . -. -- - The barter system was designed to reject and subvert the idra of 'market price' fixing the price of goods, instead goods werr exchanged based on the labour hours required to make hem. 5 'The New Moral World' was a weekiy paper which began in 1837 and was published by an association of CO-opetatives. Owen spearheaded this association and was a regulv and key writer for the paper. After many futile attempts to convince the state, anstocracy and wealthy factory owners to set up CO-operative villages, Owen, with the assistance of wealthy supporters. in 1839, began villages at

Orbiston in Scotland, New Hannony , Indiana and Queenswood. W hile they were "noted scientific and cultural centresw of their time, after a few years each of these communities failed (Desk Encyclopedia: 1984:83O). Owen's wtitings and experimental 'CO-operative villages' typiq the Utopian phase of CO-operative development - 'a time of experirnentation, when a return to the small agrarian-style village community was considered the best answer to new capitalist industrialisationw (Melny k. 1985:6). This phase is characterised by a focus on the larger picture -- on the whole rather than the part. This is reflected in Owen's determination chat a complete village had to be established at the outset, rather than by building the components of the village over time. Dr. Wm. King (1786-1865). generally recognised as a follower of Owen, was a physician, a Co-operative thinker, educator and publisber of 'The Co-operatof6 wbich offered a number of practical rules for operating CO-operative shops. Some have even aedited

- - - 'The Co-operator' appeared monthly from May 1825 to August 1830, and reached a peak circulation of approximately 12, 000 (Birchall, 1994) King with being the author of the 'complete down to earth social and economic philosophy of Co-operation" (Birchail, 1994:23).

While King believed that the establishment of 'villages of co- operation' was the ultimate goal'. he felt it was better to begin Co- operation on a limited basis than not to begin at alla. Through his

rote as an educator. King was influentid in a the establishment of co-

operative societies, and a number of co-operative historians have

suggested that 'The Co-operator' was read by some of the Rochdale

Pioneers (Hoiyoake, 1858 & 1906; Potter. 1899; Watkins, 1970). This initial historical stage of Co-operation was characterised

by the belief that comprehensive CO-operative communities were the

answer to both the abuses of capitalist indusmalisation and to the

question of what social. economic and political structure should

replace that same capitalist system. There was a belief that the

various utopian experiments would serve as a seed for the transformation of society - not a violent revolutionary battle, but a

steady giving way toward Co-operation.

King's writing in 'The Co-operator' makrs his cornmitment to the goal of an integrared CO-operative community clcar; as does his instrumentai role in a 1862 London Congress which passrd the following resolutiou: 'Let it be universally understood, that the grand and ultimate object of al1 CO-operative soc ieties, whether rngagrd in trading, manu facturing, or agricultural pursuits, is full community on landw (Lambert, 1963:47). * Owen was a vocal skeptic of CO-operative stores, saying that while a community could build a store, a store could never build a community. Wôiie no one quotes ûwen directly, a plethora of seconâary sources articulate this position (Potter, 1899; Holyoake, 1906; Clayton, 19 12; Cole, 1944; Birchll, 1994). It is here that Mant and Engels found fault with these early socialists and labelled them 'utopian socidist', claiming the titie of 'scientific socidism' for their own work. Despite their disdain, they thought enough of this school of socialism to give it some attention in the third section of the 'Contmunist Manvesro.' Marx and Engels felt that these 'utopian' socialists had offered 'a strong and well articulated attack on every principle of existing societyw and found their writings 'the most valuable material for the enlightenment of the working class* (Richter, 197156). Despite this Marx and Engels argued that the utopian socialists had been unabie to explain its essential nature. In writing 'Socialism. Utopian and Scientiic' , Engels argued that the task of the socialist was not to 'manufacture a system of society as perfect as possible" (Engels, 1892:42-43), but rathet to explain actual society and to change it.

Mm and Engels' impatience with intangible or remote ideals and plans is echoed in the work of Dr. Wm. King. Rather than al1 or nothing, Dr. King aiid (as we will see in the upcoming section) the Rochdale Pioneers attempted to build a CO-operative community one step at a time. They brought a new approach to achieving CO- operative goals, and the result was the CO-operative movement. Rochdale. England is known by millions for one reason - a handful of labourers established a CO-operative there in 1844 known as the Rochdale Society of Equitable Pioneers. That Co-operative was adopted as the inspiration and mode1 for a movement that now includes nearly 700 million people around the world. (Fairbain, 1994: 1)

In the 1840'9, Rochdale, a town in northem England, famous for its flannel, was suffering from the effects of the Industrial

Revolution? In 1842 a group of people began to meet regularly to try to figure out what could be done to improve their situation. They considered a number of options and met with a variety of different groups, including a group of Owenites inspired by the works of Dr. Wm. King.

In 1844, with alrnost every contemporary social and political movement represented, 28 members contributed a minimum of fl each. and established the 'Rochdale Equitable Pioneers'. The ultimate goal of the Pioneers was to establish a 'self-supporting home colony' but their plan involved a number of sepamte steps: 1) establishing a CO-operative store; 2) building a number of houses for their members; 3) establishing industries in order to employ their mernbers; 4) establishing a CO-operative farm on which unemployed

9 Weavers. previously considered skilled artisans, were iiow suffering a ciramatic reduction in pay and increased and often wide spread unemployment duc to the effects of the mechanisation of the textile industry. members could work; and 5) establishing a CO-operative community

(Holyoake, 1858; Poner, 1899; Cole, 1944; Birchall, 1994).

The store was enormously successful and it grew quickly. in three different ways: 1) the store expanded the lines it stocked, and eventually established separate departments within the store (food stuffs. clothing, footwear etc.); 2) stdng in 1856, the society began to establish branch stores; 3) starting in 1850, the society began a wholesale operation. The wholesale operation supplied their society's own stores, as well as those of other CO-operative societies which

had, by that point, been established. Many of these CO-operative

stores had used Rochdale as their mode1 (Birchall, 1994). So in

addition to its own immediate growth, Rochdale was indirectly

responsible for the growth of CO-operative stores in the United Kingdom.

During this growth a shift occurred. The society focused on the store, on that singular component, rather than on the deveiopment of

the other components of the 'self-supporthg home coloay'. Memben

remained fh in their belief in the importance of the other elements - of establishing CO-operative housing, industries and farms - but

rather than expanding and diversifying, they began to assist in the establishment of new CO-operative societies to undertake these functioas. With their vertical integration and the branch system of the retail 'enterprise', the society's original vision, of an holistic. fully integrated Co-operative community, gave way to the belief that a commonwealth of individual, single-function CO-operatives could

(and would) fom the basis of a Co-operative society. Rochdale was the watershed. signalling the end of the utopian vision of co- operatives and ushering in the burgeoning Co-operative movement.

W hi le the Pioneers did not establish the first CO-operativestore or even the first consumer CO-operative! they invented a panicular model of CO-operative organisation. From very earl y in Rochdale's history. Co-operative advocates charnpioned the use of the

'Rochdale model' by other CO-operative stores (Potter. 1899; Clayton,

19 12; Cole. 1944: Birchall. 1994). Contemporary references generally attribute Rochdale with articulating the pnnciples of the modern movement (Cole, 1944; Birc hall, 1994; Fairbain, 1994; Macpherson,

1995). The Pioneers set out their rules in 1844. amended them

1845 and 1854. There is a great ded of variation in the number

Tbere is evidence of a consumer CO-operative, (a fleur mil1 and bakery) early as 1760; by 1797 the idra had spread to thee or four port cities. Cooparativss didn't gain significant strength until the late 1820s. Some reports suggest that there were as many as 500 CO-operative societies in Britain in 1832. but by 1834 almost al1 had coltapsed Only a few teuacious socitties in the north of Eagland and Scotland managed to hong on. (Birchall, 199491-14) (Claytoa, 1912:iO) principles that various authors have gleaned fiom the statutes, minutes and other records of the society (Birchall, 1994; ICA, 1937).

The seven cited by the ICA in 1937 will be reviewed here. These include: 1) Democracy; 2) Open Membership, 3) Fixed and Limited Interest on Capital, 4) Distribution of Surplus as Dividend on Purchases. 5) Cash Trading, 6) Education. and 7) Political and Religious Neutrality .

First. the Pioneers set up their society democratically by assigning voting privileges on the basis of memberships ('one rnember. one vote'). not on the basis of capital contribution. as was and still is the case in traditional business. Second. the society had a policy of open membership. By opening membership to anyone who wished to join the Pioneers set the stage for the rapid growth and spread of CO-operation. The Pioneers firmly believed that people. not capital. should control an organisation (thus not giving capital voting power in the organisation). However they, like Owen, realised that in order to secure financing for theit work they would have to offer a return on investment. They arrived at the principle and practice of fixed and limited intetest on capital. The fixed rate of interest meant that the interest was predetermined at the tirne the capital was borrowed, it was not based on the profits. Limited interest meant that the society would not pay any more thaa it had to to secure the capital required. The Pioneers decided that they should return the surplus to members in proportion to their purchases rather than accumulating it until a CO-operative cornmuaity could be established. This practice has been cited as the point at which Co-operation tumed away from its socialist roots. While this analysis may be an accurate assessrnent of the net effect of this principle, it is important to keep in mind that the Pioneen established their CO-operative in severe economic times. The distribution of surplus would have offered some immediate relief to its members and wouid have seemed preferable to some distant promise of a CO-operative community. While the principle of open membership encouraged the increase in numbers needed to create a CO-operative movement, retuming the surplus (or profit) to the membenhip offered a powerful, tangible and immediate incentive to join.

The practice of cash trading was important to the Pioneers for a number of reasons. They saw credit as a social eM1 which oppressed individuals, resulted in higher prices for the consumer and threatened the stability of CO-operatives. By requiring cash eading, the Pioneer's society could keep its phces low, its mernbers free of debt and the organisation more stable. Following the lead of both Owen and King, education was a cornmitment of Rochdale from its beginning. Believing that education was an important transformative tool, the Pioneers provided news rooms and libraries, schools, adult education programmes and organised discussion groups.

George Holyoake ( 1906), an eariy histotian of Rochdale. aptly summed up the principle of political and religious neutrality by stating that the Pioneers had, from the beginning, been advocates of

'the school of practical tolerance'. The rule was designed to ensure that the society would avoid taking positions that might divide the society. As early as 1906 Holyoake noted that this principle had been reinterpreted by some within the movement in an attempt to justify an apolitical. status quo appmach for Co-operatives. However, given that most of the founâing Pioneers were politically radical, it is not reasonable to assume that the society intended to be politically conservative. These 'principles' and the organisational modei that flowed from Rochdale proved to be enormously important for the growth of CO-operative organisations". The industrial revolution brought about a revolution in production but at the time Rochdale was being

established there had not yet been an equivalent change in

distribution. Srnail, famiiy ~n shops dominated and wholesaling was

poorly organised. It was the Pioneers who brought about the

'revolution of distribution', with their use of the branch system and

vertical integratiod*. The movement's collective size gave it a

- -- Il The overview provided hrre focuses on the drvtlopment of Co-operative movement in Britain, leaving continental Europe, North America and 'developing countries' untouched. Continent al Europe -- Co-operative organisational forms also developed in continental Europe at this same tirne. Denmark, France, and Ireland had significant success in agricultural CO-operaiivcs. France also had sucçess with industrial profit-sharing and other (non-agricultural) producer CO- operatives. in Germany two variations of Co-operative Credit Unions arose; thme was also a strong presence of Credit Unions in My. In chapter seven of his book Co-operation, Clayton provides an outlinr of iha development and history of 'the continental CO-operator'. Also ser Macpherson. 197957. North America -- See Knapp, 1969 for a history of Co-opantives in the United States, and Macpherson, 1979 for histoiy of CO-opentives in Englisb speaking Canada. bDeveloping Count1 ies' -- Co-operatives in Africa and Asia also arose out of intense dissatisfaction with social and economic conditions - the difference king that the discontent often focused on oppressive colonial regimes. In 'developing countries' CO-operatives would corne to be seen as a tool of the Western advocates of development and as a tool for leaders of independence movements. See Crdig, 1993:134-176 for a more in deptb discussion of the history, and the development of CO-operatives in so called 'developing countries. ' l2 At the outset of the industrial revolutioa retailing was domimted by single famil y -owned and operated stores. These stores were restricted by both capital and availability of family members to manage the stores. Wholcsaling was poorly orgaaised and largely reliant on a variety of middlemaa. Co- operatives developed a centralised system where by one organisation owned and operated numerous stores - 'branch stores'. In addition, the societies (each with a number of stores) came together to organise coliective wholesaling, production, and manufacturing. Thus giving the movement the adviintage of both horizontal (the bnnch system) and vertical integration (wholesaling, production, manufacturing). cornpetitive advantage and their new approach to the problem of distribution gave it a sense of power - a sense that it could, even that it was, shaping and remaking the economic realm.

One area of the movement where this vertical and horizontal integration was powerfully demonstrated was wholesaling . By 19 14. the Co-operative Wholesale Society (CWS), one of the earliest examples of a second tier CO-operative, was a leader in wholesaling and the level of vertical integration in the society is amazing, even by modem standards. The society imported cheap foods from abroad; opened storage faciiities in order to buy direct from growers; processed these foods. sometimes in Britain and sometimes by building factories in the country in which the raw goods originated; owned and operated tea plantations; and, at one point, they were one of the largest flour millers in the world (Cole, 1944; Birchail, 1994).

Birchall tells us that 'they even became ship owners, thus connecting up ail the stages in the manufacture, distribution and retailing of foods." If this was not enough, CWS manufacnired a wide variety of items. including boots and shoes, clothing, soap, and furniture

(Birchall, 1994933). Thus the weaith and power of the CWS. a CO- operative of CO-operativesallowed it to undertake a variety of social programmes, including education and running a free convalescence home for its societies' members.

W hile CO-operative development in Britain was uneven 13. after the Co-operative Union. a national federation of CO-operatives, was formed in 1869, the movernent no longer had to rely on 'Owenite- style missionaries' to spread Co-operation. The Union employed their own development officen. The movement continued to grow and

fkom 1881 to 1900 the membership of societies tripled from 547.000 to 1.707.000. Some really big societies emerged with Leeds the largest at 48,000 members ... Between 1900- 19 14 membership nearly doubled again to over 3 million, but growth slowed: there was heavier competition with multiples and department stores. and a high dividendlhigh price policy in some areas and overlapping societies in others had inhibited growth. (Birchall, 1994:80)

Dunng this time the Co-operative movement was also an innovator and leader in the larger society. The Women's Co- operative Guild's impact on social reform provides an excellent example of this. The Guild was instrumental in wornen achieving political positions both within and outside the Co-operative movement (Birchall, 1994). Soon they began to address women's issues outside the movement. They were euly and stroag activists i3 'Co-operative societies flourished best in the industrial no&, rspecially in close-bit communities where they were able to generate enormous loyalty. In big cornmerciat cities, where the was more competition and a weaker sense of community, they found it much harder going. This was the case in places where there were lots of differrnt industries or many small employas." (Birchall, 199439) for reforms to the divorce laws [tlhe Guild campaigned for women's trade unions. They got maternity benefits included in the 191 1 Insurance Act, and then insisted the benefits be paid directly to women, in 1913 winning a amendment to that effect. They campaigned for improved health care for mothers and infants, through school clinics, matemity centres and municipal midwives. (Birchall, 1994: 10 1-2)

The Movement was by this time playing a significant and increasingly important role in the larger British society.

The movement in Britain received a major set back during the First World War when CO-operatives suffered the backIash of discriminatory government policies and rapacious private business practice. There was a growing perception that CO-operatives were an unfair competitor in the market, and should be disbanded. Collectively frustrated by the unfair treatment Co-operatives received during World War 1, the movement responded by forming a

Co-operative Party! In the 1930s Co-operatives responded boldly and creatively to strong-arm business tactics, for instance, by manufacturing the goods that producen rehised to sel1 to them. Yet again. the movement was making important forays into the larger social. political and economic fabric of British life. The Co-operative movement in Btitain emerged from World l4 In the 1918 slrction ihrre were 10 CO-operative candidates, one of which won a sat in parliament. War II as strong as when it had begunis. The power of their network and associations still gave them important cornpetitive and practical advantages over private storesl6. In fact, by 1950 the

CWS's17 wholesale vade had 'nearly doubled from £200 million to

£400 million of which its own production reached £114 million*

(Birchall. 1994: 141). The movement was still an innovator and leader in some fields. For example. Co-operatives took the lead in developing the American style. self-serve 'supermarket' and by

1950. 20 of the 50 supermarkets in UK were CO-operatives.

At about this same time the continuous and sornetimes furious growth in membership. sales and market shares, and the ideologicai fewour were coming to an end. There were important areas where the movernent was losing ground, where they were no longer the

Leaders and innovators. They lost an important advantage when many family-owned depanment stores became public limited

15 The Co-operative Party's political presence went a long way to ensuring that the discriminatory poliçies and practicrs of World War I were not employed in World War II. l6 Many CO-operative stores were badly âamaged during the bombing raids on Britain but thsit network of CO-operative societies and system of mutual aid had these societies up and on their feet quickly. in some cases within 24 hours. This was a distinct advantage over private stores. 17 The Co-operative Wholrsaling Society (CWS) had 155 factories of which tbere were: 10 fiour mills, 9 fms, 5 bacon works. 4 packing factories, 3 butter factories, 3 soap works. 3 mi& products. 2 glass factories. 2 biscuit and 1 margarine factories, 7 footwear, 6 clothing. 5 shirt factories, 3 cotton and 3 woollen mills and a milway wagon works. (Birçhall, 1994) cornpanies. with ready access to large amounts of capital. These and other problems within the movement did not go unnoticed and there were four major inquiries into the state of the Co-operative movernent in Bntain between 1953 and 1964. The most important of these was the Co-operative Independent Commission, whose report provided a much needed objective picture of the problems facing individual CO-operatives and the larger movement. as well as recommending some important changes. For example. the report found that many of the local societies were suffering from poor management. As a response to this problem, CO-operatives began to hire specialised managers. However, this solution presented another problem. The volunteer

Directors of local societies had traditiondly been involved in day to day management and were reluccant to relinquish this responsibility to managers. In response to this problem, fhe Co-operative Union established an institute to train the directors of local societies in their new role as long term plannen and policy developers.

The Movement was by this time decentralised into thousands of societies - small, community-based stores with a high degree of local autonomy. niis had proven successful before, but it was now a liability. The increased ownership of cars allowed for the development of supermarkets and retail warehouses on the outskirts of towns. This presented a senous challenge to a movement which had focused much of its development, even its philosophy. on the small community store (Birchall, 1994:154). This cycle of solving ever-compounding problems so enveloped their energies. that Co-operatives were unable to remain the innovaton and leaders that they had once been. Through this brief historical ovewiew, we can see the evolution of Co-operation, from its utopian socialist ongins to Rochdale Pioneers and the birth of a new approach. to the fabulous growth and success of its heyday, to

In the next chapter 1 will review some of the literature dealing with CO-operative organisations, the movement and its principles. 26

Chapter Tbree Literature Review

Written works on Co-operation and CO-operatives can be roughly divided into three different categones: movement literature, empirical studies and historical literature. As its name suggests, movement literature is generated from witbin the Co-operative movement. Empirical studies are conducted by social scientists who may or may not be active or invested in the movement. Similarly. historical rudies have been written by both CO-operative advocates and more ob.jt,c:ive historical scholars. This classification system is by no mcans a perfact or precise means of categorising all of the available literature. Some of the literature classified as 'empirical' could also be classified as 'movemeat': there are a number of empkical studies which rely on historical data and as a result cross over with the historical category. That said, the classification system used provides a framework for reviewing the literature available in this field.

Movement literature, whether it originates from within CO- operative organisations or is authored by individual CO-operative activists, is written prirnarily for those within the movement and is characteriseci by an unwavering support for, and belief in. Co- operation. While movement literature covers a wide variety of topics including educational rnanuals. promotional literature, and interna1 policy documents, the vast majority deals with the CO- operative principles. My review of the movement literature will focus on the latter group. Co-operative organisations have undertaken regular, open, and self-reflexive examinations of the principles that guide their daily practices. The resulting literature provides the reader with a view of the changing interpretation and application of 'the Co-operative

Rinciples' by those CO-operative organisations.

The International Co-operative Alliance (ICA). the world wide association of national CO-operative movements, has undertaken three reviews and revisions of the Co-operative Rinciples. (A brief history and description of the ICA will be undertaken later in this chapter.) Each of the ICA'S three reviews resulted in one or more reports: the Special Committee, which undertook the review of the

Rochdale Rinciples frorn 1930-1937. produced two such reports

(ICA, 1934; ICA, 1937); the Commission, which was responsible for the review conducted from 1960- 1966, produced one final report

(ICA, 1966); and the review which was conducted fkom 1988 to 1995 resulted in three such reports (Marcus. 1988; Book. 1992; ICA. 1995).

The latter two of the three reviews involved extensive consultation with the ICA membership. who in turn consulted their membership (0th national associations representing specific types of CO-operatives). which in turn consulted their membership (individual CO-operative societies). These consultation processes, the resulting reports and the tension between remaining true to CO- operative ideals and the pull to change CO-operative practices. al1 spurred considerable discussion and debate. This further resulted in wntten responses to these different reviews. both from organisations (Davidovic. 1966; Webb. 1993) and from individual activists or thinkers [Ravoet, 1992: Bedford et al. 1993). For example. the intermediary report from the 1988 to 1995 review. Co-operative Values in Changing World ( 1992). suggested significant changes to the principles and practice of CO-operation which would help CO-opetatives become more cornpetitive with private enterprise. Both the process of consultation undertaken to produce the report. and the report's suggestion that CO-operative organisations should adopt a number of market economy tactics. prompted responses from organisations and individuals (Ravoet,

1992: Fairbain. 1992; Bedford et al, 1993). Responses to this report uaderline the tension over maintaining or altering CO-operative principles. There are reports which argue that the suggested changes compromised the spirit of the principles (Fairbain, 1992; Bedford et al. 1993) and those ihat express concern that the changes were insufficient to ensure CO-operatives competitiveness in the market economy 18.

However. movement literature relating to the CO-operative principles and values has not been limited to direct responses to the reviews of those principles (Coady, 1939; Co-operative College of

Canada, 1977; Craig. 19801; l98Ob; Laidlaw. 1980; Co-operative

Future Directions Cornmittee. 1982a; Co-operative Future Directions

Project. l982b; Laidlaw. 1980; Jordan. 1980). One example, Moses

Coady's Master's of Their Own Destiny (1939). illustrates how the co- operative principles provided a structural framework for co- operative practice. in this case the Antigonish Movement. and uses that as a springboard for a more abstract discussion of the principles.

-- l8 In 1993, at a meeting of the Canadian Association for Studies in Co- operation, Sven Book, author of the intermediary report of the ICA'S 1988-1995 rcvirw of the Priaciples, outlinrd the reports findings and his suggestions. Book reviewed a aumber of the problems or issues facing the movement and discussed how the suggested changes in the principles would address them. The discussion tbat followed revealed a wide variety of ructions. Tbere were those wbo felt that the suggested changes would compromise the spirit of the muvement. Others disagreed with this view. Some argued thai the suggested changes would not address the problerns which they were intended to, and that thcre wsr otber problems within the movement thrt the report neithet recognised mt tried to address. Others of these wotks are vision statements which also serve to encourage thought and discussion about the future of 'the Co- operative Principles' specifically, and the movernent generally.

'The Co-operative Principles' have been a constant focus of the rnovement literature. However, in the early 1980s there was a marked increase in the number of Canadian works which examined these pnnciples and the future direction of the Movement. For example, 'The Co-operative Future Directions Roject', based at York University in Toronto. produced a series of working papers discussing the vision and future direction of the Co-operative movement. Some of these documents are statements of vision (Craig, 1980b; Co-operative Future Directions Project, 1982b), while others are specifically designed to encourage thought and facilitate discussion within individual CO-operatives (Co-operative College of

Canada, 1977; Co-operative Future Directions Cornmittee, l982a;

Jordan, 1980). At this same time, Alexander Laidlaw. working independently from the Co-operative Futures Project, produced a work entitled Co-operatives in the Yeor 2000 (1980), in which he concluded that the movement was experiencing an 'ideological crisis' and was in need of a clear vision of Co-operation in terms of fundamen ta1 precepts. 3 1

Shortly there after W.P.Watkins, a Brit, offered one of the most comprehensive attempts to clarify the fundamental precepts of Co- operation. In Co-operative Principles: Todoy and Tomorrow, Watkins

(1986) analysed the histoncal basis of the CO-operative principles, individually and collectively. As a result. he argues that Co- operation was built on seven fundamental ideas. These are: Association (or Unity), Economy. Equality, Democracy, Liberty, Education and Responsibility . Watkins (1986) recognises that the principles were the result of a union between an intellectual ideal and a practical attempt to achieve that ideal. He argues that this fact exacerbated the tension between remaining true to the principles and a desire to change the practice in response to the changing environment. The available works show there has been a strong emphasis on principles within the movement literature. That which has been generated within CO-operative organisations is largely caught in a struggle to find a balance between principles and practice. A smaller number of works have explored the origins of the principles with the goal of explicating the purpose and vision of the modern movement.

While much of the movement iiterature looks at the CO- operative pnnciples as a whole, the very nature of empirical work rneans that individual studies are limited to examining specific aspects of the pnnciples and values. Empirical studies on CO-operatives usually focus on a specific type of CO-operative such as, worker or producerl9, consumer or retail20, agricultural* 1. comprehensive22, or on CO-operatives in developing countries*3, rather than comparing two different types of

CO-operatives. Despite the fact that these studies examine differeat types of CO-operadves. the vast majority share a common focus on issues of the dernocratic nature and function of CO-operatives. There are those which have looked at democracy and the democratic process of CO-operatives generally (Warbasse, 1936; Loucks. 1943;

Bowen. 1953; Bowen. 1966). those which examine issues of member

------l9 Stuûies on worker co-operatives: Belas. 1972; Gutierrer-Johnson, 1978; Poole, 1978; Frieden, 1980; Gamson and Levin, 1980; Arzensek, 1983; Holmstrom, 1985; Rothchild and Whitt, 1986; Cornforth, 1987; Apland, 1990; Gray, 1991. 20 Studies on consumer CO-operatives: Warbasse, 1936; Ostergaard and Halsey, 1965; Shaviro. 1982; Brown, 1985; Dufler and Hamm, 1985; Furstenburg, 1985; Gray, 1985; Bailey, 1986; Book, 1989; Yamagishi, 1989. S tudies on agriculhiral or rural CO-operatives: Lomemark, 1967; Ewell, 1972; Knutson, 1980; Lamming, 1983; and Gray 1985. 22 Studies on comprehensive CO-operatives and communes: Gide, 1930; Albenson, 1936; Bennett, 1967; Moss-Kanter, 1972; Rigby, 1974; Bouvard, 1975; Spiro, 1975; Keghan and Kephart. 1976; Gardner, 1978; Spear, 1982; Axwortby, 1985; Weiner, 1987; Whyte ad Whyte, 1989. 23 Studies on the role of Co-operatives in development: International Labour Office, 1943; International Labour Office, 1954; International Labour Office, 1965; Engelmann, 1968; Raper, 1970; Inayatullah, 1972; Development Alternatives lac., 1975; United Nations Research Institute for Social Change, 1975; Black, 1975; Fais-Borda, 1976; Cnig, 1976; Mbithi and Rasmussen, 1977; Bennett, 1979; Lamming, 1983; Smith, 1987; Mayoux, 1992; 1993; Cniig, 1993. participation (Chickering. 1972; Berstein, 1976: Poole, 1978; Cornforth, 1987; Smith. 1987). and those which focus on issues of member control (Holmstrom, 1985; Gray, 1991, Mayoux, 1992; 1993; Vakil. 1994). Co-operatives, as relatively small, self-contained, democratic organisations. offer social scientists environments in which to examine the possibilities and dilemmas of democratic practice. This has resuited in a constant Stream of empirical studies the specific focus and tone of which has evolved over time. The earliest academic studies of CO-operatives as democracies were broad. speculative pieces. and were only loosely based on empirical observation. These works advanced optimistic views of the potential and promise of the CO-operative system of economic democracy

(Warbasse. 1936; Loucks. 1943; Bowen, 1953; Odhe, 1955; Bowen,

1966). For example. Bowen (1966) in The Coming Co-operative

Economy. discusses five principal economic problems resulting From the cornpetitive-profit system. and how CO-operatives are increasingly solving them.

By the late 1960s. empirical research has largely replaced this speculative approach but the overarching emphasis on the potential and promise of CO-operatives continues (Ostergaud & Halsey, 1965; Lonnemark, 1967; Ewell, 1972; Belas, 1972, Bernstein, 1976; Campbell, et al, 1977; Gutierrez-Johnson, 1978). Of the empirical studies conducted on CO-operatives in the 1970s. those which focus on the democratic ptocess of worker CO-operatives are among the the most plentiful (Belas, 1972, Bernstein, 1976; Elden. 1976; Campbell, et al, 1977; Gutierrez-Johnson, 1978; Poole. 1978;). For example, Elden (1976) conducts a study of worker CO-operativesand hnds that the level of participatory democracy is central to ensuring worker satisfaction and that it is effective in achieving the goal of worker control.

By the early 1980s. many of the studies which examine the dernocratic process in CO-operative organisations have narrowed to focus on issues of member participation (Lamrning. 1983; Brown, 1985; Smith, 1987; Book, 1989: Mayoux, 1992; Craig, 1993). This new emphrsis on member participation coincides with a change in the nature and tone of the studies. While earlier studies look at CO- operatives in the larger social setting, exploring what CO-operatives could conmbute to society, the studies conducted in the 1980s focus on problems and concems within the organisation, such as declining member participation; whether or not CO-opentives were measuring up to the CO-operative ideal (Gutierrez-Johnson. 1978; Arzeosek, 1983; Smith, 1987; Mayoux, 1992)24; and the efficiency and success of CO-operatives in cornparison with mainstream businesses (Frieden,

1980: Arzensek, 1983; Foxall. 1984; Grunberg, 1986; Book, 1989).

Of the studies which try to assess whether CO-operatives are living up to their ideal, there are those which focus on CO-operatives' performance as democratic organisations (Brown, 1985; Dufler &

Hamm, 1985; Gray. 1985; Book. 1989; Yamagishi, 19891; their performance as tools for economic development generally (Bennett.

1979): and whether CO-operatives are meeting the needs of socially and economically marginalised groups, particularly women in developing countries (Lamming. 1983: Smith, 1987; Mayoux. 1992;

1993; Craig , 1993)25.

A number of the studies which focus on CO-operatives' performance as democratic organisations find that the democratic nature of many CO-operatives is being compromised by their increasingly bureaucratic structure and the increased power and influence of professional managers (Dufler & Hamm, 1985; Gray,

. -- - -- 24 Jack Craig (1993). a Canadian sociologist wbo has mitten extensively on Co- operation, argues that co-operatives are studied in cornparison to their own ideais far more often than they are compared to other organisations. 25 Craig (1993) fouad that the constraints to women's participation in co- open tives (in both developiag and industrialised countries) were very similar to those obstacks to women's participation in other organisations including traditional social and religious customs, the time coastraints of the double ghetto, differing rates of specialisations of education etc. 36

1985; Yamagishi. 1989). For example. Gray (1985) interviewed the volunteer Board of Directors and the paid management of 14 CO- operatives and found that the current goals of the CO-operatives are much more in line with the goals and vision expressed by the management than those expressed by the volunteer board members.

These studies, which look at the impact of the rising managerial influence on CO-operatives, are among the first to shift away from a focus on member participation to a focus on member control. Shonly after these studies are conducted a number of researchers explicitly argued that member participation is neit her an appropriate nor adequate indicator of an effective democracy, and advocated for a new focus on mernber control (Apland, 1990; Gray, 1991).

As previously mentioned. the other trend of empirical studies in the 1980s is to compare the performance of CO-operative organisations to mainstream business. There are those which question the efficiency of democratic decision-making (Cote, 1986;

Craig, 1986). productivity (Grunberg, 1986), and the 'market competitiveness' of CO-operatives (Fneden. 1980; Foxail, 1984; Cote,

1986; Gninberg, 1986; Hammond Ketilson 1988; 1990). A number of these studies find the performance of CO-operatives lacking and proceed to explore what changes are necessary for CO-operatives to be cornpetitive in the modern market economy LFrieden. 1980; Foxall. 1984). Others, acknowledging the interdependent nature of principles and practice, are more cautious and thoughtful about the long term repercussions of making changes to the practice of Co- operation (Craig, 1986; Cote. 1986).

The fact that much of this empirical research examines CO- operatives with the implicit or explicit goal of solving some problem of CO-operativepractice. limits the scope of the studies. Most ofien these studies are undertaken for confirmation rather than for exploration; as a result the findings often seem self-evident or unremarkable.

Taken as a whole, the empirical studies do bring to light an interesting trend. A shift from a focus on democracy generally. to member participation and finally to member conml cm be seen in an overview of al1 the empirical studies on CO-operatives, as well as those which focus on each specific type of CO-operative. Likewise. a review of these studies reveals a shift €rom outwatd-oriented research which explores the potential and promise of CO-opetatives. to research which focuses inward, on the problems of CO-operative practice. In addition to the movement and empirical literature on Co- operation there is a significant body of historical literature. Co- operative organisations and many individual co-operators are aware of. and influenced by. the roots and history of Co-operation. Perhaps

it is as a result of Co-operation's emphasis on. and interest in, its history. that a rich and varied body of literature has developed which includes histories of individual thinkers or CO-operative

activists, such as Robert Owen (M. Cole. 1965; Butt. 1971). Wm. King (Mercer, 1947) and Toyohiko Kagawa (Schildgen, 1988); national or reg ional movements in Canada (Coady. 1939; Macpherson. 1979; Co- operative Future Directions Project. l982b; Fairbain, 1989; McLaughlin. 1996). Britain (Potter, 1899; Coie, 1944; Birchall. 1994).

the USA (Knapp, 1969), France (Furlough, 1991), Israel (Viteles.

1966). and India (Tyagi. 1968); individual CO-operatives or CO- operative organisations. such as the Rochdale Equitable Pioneers (Birchall, 1994; Fairbain, 1992). International Co-operative Alliance (Watkins. 197 1: Rhodes, 1993). Co-operative Union of Canada (Macpherson, 1972) and Rochdale Student Housing Co-operative in Toronto. (Sharpe. 1987) and of the development of CO-operative

ideas (Bright, 1953; Lambert. 1963; Saxena, 1974; Co-operative

College of Canada, 1977; Schaar, 1980; Watkins, 1986). The Rochdale priaciples and 'the Co-operative Priaciples' feature strongly in much of the historical literature (Coady, 1939;

Watkins. 197 1 ; Macpherson, 1979; Furlough, 199 1 ; Rhodes, 1993;

Birchall. 1994). as they do in both the movement and empirical literature. In fact. the historical literature builds on the some of the knowledge and findings that these two bodies offered. While the empirical and movement literature reveal the tension between remaining true to the principles and responding to demands to change the practice. the historical literature suggests that this has been a concern from the movement's eatliest days (Potter. 1899;

Cole. 1944; Lamben 1963: Watkins. 1971 ; Macpherson. 1979;

Furlough. 199 1 ; Birchall, 1994).

There are a relatively few works which survey thinking on Co-

operation and how it developed. most notable are the works of Bright

( 1953). Lamben ( 1963), and Saxeena (1 974). These authors provide

richly descriptive. clear pictures of the prominent CO-operative

thinkers through ages. These works are long on description and

short on analysis. They do not look at the relationship between CO-

operative thougbt and practice.

W.P. Watkins' (1971) and Rita Rhodes' (1993) histones of the

International Co-operative Alliance (ICA) offer two of the most interesting and insighthl histories of a CO-operative organisation. It is the ICA'S prominence, as the independent. non-governmental association which unites, represents and serves CO-operatives world wide, which makes Watkins' study an important contribution to unders tanding the movemen t. The In ternational Co-operative Alliance, formed in 1895, has grown to comprises 230 national and international CO-operative organisations which represent over 730 million people from more than 100 countries. According to Watkins (1971) there were. in the iate 1860s. two faiied attempts to form an international alliance of CO-operative organisations26. in the end the International Co-operative Alliance grew out of an attempt. which began in 1891. to form an international association in support of CO-partnership and profit sharingz? Within two years this group widened its focus to include al1 foms of Co-operation. But it was not until 1895 that the alliance

26 In 1867 there was an anempt to form an international alliance of co- operatives. lt failed whea the group did not receive the necessary governmental approval to proceed witb iheir plans to hold a Congress in Paris (Watkins, i971A4-15). In 1869, a group of Owenites and Christian Socialists assrmbled with the goal uf forming an international association of co- operative organisations. However, after just four Congresses, the group cmerged as the British Co-operative Union and thereafter its sights stopped at the national Irvel (Holyoaks. l9M; Watkins. 197 1; Bkcball. 1994). 27 In 1891. Neale, former secretary of the British Cosperative Union. began io collaborate with the French Co-operative movement, which had strong worker CO-operatives. a national federation. and govemment support for profit sharing and CO-partuership. The goal was to form an international association to support profit-sharing and CO-partnership. However, shortly after the group's first officiai Congress, in 1893, Neale died and the focus of the organisation was expanded to include al1 forms of Co-operation (Watkins, 1971)- had sufficient support and representation to hold a Congress.

This Congress, held in ~ondon28. formally constituted itself as

the 'International Co-operative Alliance', and stated that the

objectives of the organisation were:

a) To mdce known the co-operaton of each country and their work to the co-operators of al1 other countries by congresses, the publication of literature. and other suitable means. b) To elucidate by international discussion and correspondence the nature of true co-operative principles. c) To establish commercial relations between co- operators of different countries for their mutual advantage. (Watkins, 197 1 :40)

This suggests that the ICA. fiom its beginnings. saw itself as the

guardian of the co-operative principles. However. there was at that time no attempt to establish a clear listing of those principles. At the 1910 Congress in Hamburg a decision was reached that the principles

would be established gradually. by discussion and resolution at the

ICA Congresses (Watkins. 1971). It was not until 1930 that a Special Committee was cornmissioned to undertake a comprehensive review of the Rochdale or co-operative principles. The Special Committee undenook archival research of the

Rochdale Equitable Pioneen to determine a precise account of their

- - - - 28 The Co-operative movements of Britain, Austria, Belgium, Holland. Switzerland. Romania. France, Grrmany and Iuly were al1 represented at this fist Congress of the ICA. principles. Using this information they surveyed the ICA membership in an attempt to determine which of the priaciples were still relevant. The ICA also conducted reviews of the principles from

1960 to 1966 and 1988 to 1995. Both were held to assess whether the principles were still relevant given changing times and environment. 'The Rinciples of Co-operation' are central to Watkins'

(1971) and Rhodes' (1993) histories of the ICA and to the bistorical literature of CO-operation generally. The work of George Melnyk (1985) cannot be strictly classified as historical literature. However. Melnyk. building on the work of

Henri ~esroche29. relies on the wealth of historical information available on the development of Co-operatives and offers an interesting and insightful perspective. Melnyk examines the history of the developrnent of Co-operative organisations and argues that there are three distinct historical and developmental phases which

- 29 It was H~MDeaoche (1969) who tkst suggested that the history of the Co- operative movrment could be divided into three-distinct phases. He referred to these phases as Utopian. Ideological. and Demythologising. Melnyk's (1986) description and definitions of the first two phases, Utopian and Movement mirror that of Desrochc' s Utopian and Ideological stages. Melny k's sçhema drparts from that of Desrochc! in its portrayai of the third phase. In Desroche' s Demy thologi sing phase 'the myth * of the ideology of Co-operation is revaled and there is a conscious and explicit rejection of it. In Melnyk's third phase, Systrms, the movsmsnt*~focus bas sbifted inward in order to maintain previous gains and to ensure its own survival. One of the result of this interna1 preoccupation is an end to the proselytising of phase two and a more ideological neutral stance. In the Systems stage Co-operation unconsciuusly shifts away from the ideology ratber tban coasciously or explicitly rejected it. he terms Utopian. Movement or Rochdale, and Systems stages. Melnyk provides an overview of these three phases in the history of CO-operativepractice. He wntes: The first phase is the pre-Rochdale or utopian phase, which can be dated from approximately 1800 to 1850. This was a time of experimentation. when a retum to the srna11 agrarian-style village community was considered the best answer to new capitalist industrialisation. The second phase is the Rochdale or Movernent stage, when CO-operative institutions took hold in a great variety of areas. It was a phase of spectacular expansion and establishment of the CO-operative system. This period can be dated from 1850 to 1950 with the movement phase coming pnor to 1900 in Europe and after 1900 in North America, while in the Third world it did not begin till after 1950. Quite rightly this is considered the golden age of European inspired Rochdale CO-ops. The third stage is the post-Rochdale or systems stage in which we are presently living. This stage is charactensed by the end of the ideological fervour of the son that existed during the proselytising years of phase two. Duting that phase CO-operatives were trying to win the world, while in phase three they are primarily concemed with managing their success. They now practice co- existence rather than conversion. (Melnyk, 19896)

In this schema the initial Utopian phase is characterised by CO-

operative villages which are multi-functionai and designed for group production and consumption. Falling outside the mainstream of

society, these communities were designed to offer an escape from the abuses of the industrial revolution. In the Movement phase, the CO-operative village was replaced by. the single-interest, single function wbich allowed individual consumption while maintaining the advantage of group protection and power. This new structure meant that CO-operative organisations could offer a large number of people some relief fkom the worst abuses of the market economy. The fact that they combined individual consumption with group protection made it more appealing to the masses. As a nsult, individual CO-operatives grew in size. in numbers and in type. Co-operative organisations were no longer taking a protective. insular, isolationist stance against the outside world. They became increasingly open, aggressive. proselytising organisations which collectively. as a rnovement, set their sights on replacing capitalism with a CO-operative economy. Melnyk (1985) suggests that CO-operatives are presently in the Systems phase, which is characterised by an organisational focus on maintaining. consolidating and stabilising the gains which were achieved in the Movement phase. In this Systems phase, CO- operatives abandon their aggressive and ambitious goal to build a CO- operative economy, settling instead to fonn an alternative sector within the market economy. The single-function, single-interest structure which emerged in the movement phase is maintained, but the growth which its appearance facilitated is largely gone. The growth that does occur is primady restricted to producing ever larger conglomerate forms (secondary and tertiary CO-ops). To summarise. Melnyk (1985) argues that there are three distinct phases in the historical development of CO-operatives; the Utopian. Movement and System phases see CO-operatives progress from the CU-operative as a 'comprehensive CO-operative village' to a 'CO-operative enterprise with a specific function', to a 'Co-operative business% It is an evolution fkom the practice of opting out of modem life to attempting to transform the entire economic system. to a position of forming a sector of the econorny. It is a shifi fiom a movement of and for social transformation. to one preoccupied with its own sunival.

As this review of the literature has shown. the principles are prominent within the movement and empirical studies. The movement literature is ripe with persistent reflection on the principles; the empirical studies examine aspects of the principles in practice; and the historical literature relies heavily on the principles in its telling of the development of Co-operation. Embedded in this literature is data which can enhance an understanding of the

30 Melnyk (1986) suggests thai a similar cycle can be scea in the development of individual co-operatives. development of the principles themselves, as well as Co-operative ideology .

In the next chapter 1 will look at the methodology and method used to determine whçther the three developmental phases. which Melnyk (1986) reveals in the practice of Co-operation, are applicable to the International Co-operative Alliance's three statements of the

Co-operative ptinciples (ICA. 1937; ICA. 1966; and ICA, 1995). 47

Chapter Four Methods and Methodology

The history of CO-operativeorganisations can be divided into three distinct phases - Utopian. Movement and Systems (Melnyk 1986). The purpose of this study is to determine whether Co- operative ideology has also progressed through these three phases.

It is commonly held that the CO-operative pnnciples are an embodirnent of the movement's ideology. The International Co- operative Alliance (ICA). as representative of the world-wide Co- operative movement and guardian of its pnnciples, has made three successive reviews and declarations of the Co-operative Principles. These statements and accompanying reports provide a written record of the movement's own expression of these priaciples at three distinct points in its history. As a result, these statements provide a rich source of data to answer the question at hand.

1 have chosen to do a content analysis of this material, but, before tuming to a discussion of this method we must ascertain if these reports are suitable sources of data. based on a number of other criteria.

Documentary sources themselves must not be viewed uncritically. Researchers are concerned about four major ctiteria which determine the quality of the documents: authenticity, credibility, representativeness & [sic] meaning. (Holloway. 199751)

The authenticity of the ICA documents cannot be questioned.

The ICA'S reviews are the result of consultations with their membership. which represents a substantiai portion of the world's Co-operative organisations. Holloway (1997) argues that a 'writer's proximity in time and place and the conditions under which the information was acquired" could affect the accuracy and credibility of a document. These reviews rely on information and feedback from the members and a smali Committee which synthesised that information. So it is possible, even likely. that the Committee's composition shaped the data somewhat. But, if this resulted in a significant misrepresentation of the rnembers' views, we could reasonably expect recrimination rather than the overwhelming acceptance of the results. While al1 data sources have some limitations, it is important to find sources with minimal limitations and to recognise the limitations that do exist. In his discussion of the limits and possibilities of content analysis, Camey (1972) discusses how the nature of the document to be analysed, and its use of language, limits or facilitates the process of content analysis. Source materiais which impose the least constraints on the process of content analysis are those which are straight-forward, available in series, ample in length, wide- ranging in topic and where the language has been unconsciously used.

The ICA'S three successive reports of 'the Co-operative Principles' span approximately sixty years and each, the result of years of research. consultation and deliberation. is of substantial length31. Each of the three reports is wide-ranging in its approach and each discusses a minimum of seven separate principles. The 1934 and 1937 repons of the Special Committee were extremely matter-of-fact and straightforward. While the 1966 and 1995 reports are more verbose and increasingly abstract in their discussion. they cannot be characterised as allusive. The reports were consciously crafted with the intent to communicate the principles as they had, at that point in time. been defined or redefined. However. the authors seemed unconscious of their use of laaguage in tems of the overali progression or development of CO- operative ideology. which is the focus of this research. Therefore. these ICA repons demonstrate a high degree of representativeness, authenticity and credibility as documentary sources and are suitable for the purposes of content anaiysis.

3* The 1937 report is 23 single-spaced pages; the 1966 report is 41 single- spacrd pages; and the 1995 is 56 single-spaced pages. The histotical roots of content aaalysis date from the 19th century. However, it is not until the publication of the work of Berelson and Lazarfeld (1948) and Berelson (1952) that an integrated picture of content analysis is presented. Their work facilitated the development of content anaiysis as a multidisciplinary

method. In his work. Content Analysis ln Communications Research. Berelson (1952) defined content analysis as "a research technique for the objective. systematic and quantitative description of the manifest content of communication." (Berelson. 1952: 18) Thomas Camey . writing in the early 1970s. disputed Berelson's definition as being too narrow and restrictive. saying,

It restricts the operations of the technique to those with the highest validity on the immediate face of things. It is also an unsatisfactory definition, because it does not reflect what was being done by content analysts even prior to 1952. Analysts were making inferences and on non-quantitative evidence. (Carney , 1972:23-24)

He argued that the notion of content analysis as a glorified frequency

count was outdated, stating.

'Content analysis is any technique for making inferences by objectively and systematically idenciQing specified characteristics of messages.' (Camey, 1972: 25)

Today there are three recognised types of content analysis: manifest content analy sis (classical content analy sis), latent content analy sis. and inductive content analy sis. Manifest content analysis is the analysis of the elements which are physically ptesent and countable. in other words the surface structure present in the message. Like manifest content analy sis. latent content analysis requires the development of concepts and categories before undenaking the examination of the data. However, latent content analysis 'goes

beyond surface themes to underlying phenornena and their interpretations". Latent content analysis is of the underlying meaning conveyed by the text. Rather than presenting 'frequency counts'. Vesearchers demonstrate the inferred meaning of the

document data by giving excerpts from the data' (Holloway. 1997: 35). In inductive content analysis the researcher searches for general patterns and develops working hypotheses.

Analysis of both the manifest and latent messages is

accomplished by means of explicit niles called 'criteria of selection'.

These selection criteria must be established before beginning the

actual analysis of data. and rigidly and consistently applied during the analysis.

My initiai operating assumption was that the ICA'S three

successive statements of 'the Co-operative Priaciples' were expressions of the ideas and values of the movement. As a result of this assumption, 1 began to undertake an analysis of the manifest content of these repons. 1 soon came to the redisation that 'the Co- operative Rinciples' were not strict1y statements of the movemeat 's ideals and values. but rather were a mix of values and methods for putting those values into action. This led me to shift to an examination of the latent meaning of each text. Source of Data In order to conduct the research, I ecquired the reports and statements of principles resulting from each of the ICA's reviews from the ICA's web site. A copy of the 1934 Report of the Special Committee was obtained directly from ICA head office in Geneva.

(While the reports of 1934 and 1937 are very similar. the 1934 report was included because ii included a review of the Cornmittee's historical work on Rochdale.) Recognising the potential importance of the context in which each document was produced, 1 examiaed a number of historical sources to discover the impetus and/or rationale for, and goals of each of the reviews. A summary of this information. for each of the three repons, is preseated in Chapter Five.

1 read each of the documents twice in order to achieve geaeral familiarity. 1 read each document a third time, with the goal of idenciQing a series of themes to use as units for the analysis. While each report was written in a very different style, in different

historical periods and, in some cases, with significantly different terms of reference. each reviewed and discussed 'the Co-operative

Principles' one by one. As a result, 1 decided that the principles

themselves would be appropriate units for analysis.

1 read each of the documents again in order to divide the text into sentences andor paragraphs relevant to each principle. When

this process was complete. 1 reviewed the documents to ensure that

the designations of text to principles was thorough and accurate. 1

made multiple copies of each of the documents and cut them up. then sorted and filed text fragments according to the relevant principle

and year of the report. The result was a file for each principle listed

in each of the three reports. In some cases there was a file for a

principle even if it wasn't listed as such in that year. For example,

'Political and Religious Neutrality' was not listed as a pxinciple in the 1966 report. but the report discussed the rationale for dropping it. Where a phrase or paragraph was relevant to two or more principles,

1 included it in al1 the relevant files. The 1934 and 1937 reports focused almost exclusively on a discussion of the individual principles and had very little preamble or general discussion. However. the 1966 and 1995 reports were considerably longer and more verbose, including more general and abstract discussions of Co-operative pbilosophy, values, goals and challenges. It became apparent that within every report there were some sections which could not be assigned to specific principles. I created three additional fües. one for each report. for this material.

Before undertaking the initial stage of analysis 1 tumed to

Melnyk's (1985) mode1 to develop a cnteria of selection. Relying on Melnyk's descriptions of the Utopian. Movement and Systems phases of Co-operative development. 1 developed a cornprehensive list of the charactenstics of each phase. 1 then organised and compared the characteristics of the phases in order to get a clear picture of the progression of important elements from one stage to the next. This process is reflected in a reference chart which demonstrates how each characteristic is exhibited in each phase: 'Chart 4-1: The

Characteristics of the Utopian. Movement and Systems Phases', is included in the Appendix. From this list of characteristic 1 developed a list of key. or defining characteristics of each phase which set it apart from the other phases. I determined that the defining charactenstics of the Utopian phase were multi-function, multi-interest communities, with group consurnption and production, decentralised power and coneol; and the goal of building an altemate economic system - a Co-operative economy, which would grow independent of the market economy and would eventually replace capitalism.

The defining charactenstics of the Movement phase were an orientation towards growth and expansion; an ideologically fervent approach; a high degree of centralisation; and the goal of converting capitalism by competing with it (rather than opting out). The defining characteristics of the Systems phase were the focus on finding solutions to problems and issues facing the movement. and a more ideologically neutral approach; the god - to fonn a third sector within the market economy rather than transforming it. Once I had the defining characteristics of each phase the next step was to identiQ which words, terms, phrases or concepts would be used to determine whether a report could be said to be exhibiting a given characteristic. The fact that Melnyk's descriptions of the three phases are characteristics of Co-operative practice, not of Co- operative ideology presented difficulties in terms of developing a clear, simple, and exhaustive 'criteria for selection' for the characteristics of each phase. In the end 1 broke with the canon of content analysis and did not develop an exhaustive criteria for selection. That is. 1 did not develop comprehensive lists of words. phrases or concepts to account for each characteristic or each of the three phases. The fact that the characteristics of each phase would linguistically manifest themselves in different ways in each of the principles. in each of the three different reports, made it prohibitive to develop an exhaustive criteria of selection. Instead. 1 developed 'coding sheets' which listed the defining characteristics, (as well as other minor characteristics) of each of the three phases with space for notes and comments.

For the initial stage of the analysis, 1 organised the text files by pnnciple. That is to Say. 1 grouped the 1937, 1966, 1995 democracy files together; then, 1937. 1966, 1995 membership files, etc. Each file was exarnined twice. First. to determine whether the practices or characteristics of the Utopian, Movement. and System phases was acknowledged or discussed, and if so. what was the nature of the reports response. Did the report condone. condemn, modify, or disregard a particular practice or characteristic? As 1 examined each principle I recorded relevant phrases or a passages on the coding sheet under the appropriate characteristic. The second examination of the individual pnnciple files was to find and record any instances where the report's own declaration. discussion. treatment or interpretation of individuai principles was consistent. or inconsistent with the practices or characteristics of any of three phases. The coding sheets were then reviewed and summarised to determine the List of the characteristics demonstrated by each pnnciple file in order to determine which phase. if any. each year's treatment of each principle could be categorised - Utopian. Movement or System. If a principle did not clearly demonstrate the characteristics of any particular stage 1 classified the principle as

'Other'. When 1 had completed this analysis of the individual principles of each year. the results were assembled in 'Chart 5-2: The

Progression of Principles'. This chart is included in the Appendix. My original thought was that the categorisation of the individual pnnciples in each year would determine the categorisation of that year. The problem with this approach was that significant portions of the texts were not relevant to. and not assigned to individual principles and therefore not yet analysed. In an attempt to overcome this problem. 1 re-examined the individuai principle files along with this previously unanalysed text (often the more abstract prearnble or conclusion to the report), to ensure that the categorisations I had made were accurate. After this process, the final categorisation of each report was made.

In the following chapter 1 will briefly review the context of each of these reviews and revisions of 'the Co-operative Principles' before tuming to a presentation of the data. 59

Cbapter Five Data Presentation

Before turning to the ICA's three successive reviews and revisions of 'the Co-operative Rinciples' I will review the resolutions of the ICA Congress which led to each review. the rationale for it, the full statement of 'the Co-operative Principles'. and provide a btief summary of each report in order to provide a context in which a more in-depth discussion of each year's principles can be understood.

After this I will tum to the presentation and analysis of the data.

The ICA's 1st Review of the Princioles of Co-o~eration:

1930-1937

At the 1930 ICA Congress in Vienna, the French National Federation of Consumers' Co-operatives submitted a resoiution to Congress which asked for a Special Cornmittee to be appointed 'to enquire into the conditions under which the Rochdale prhciples are applied in various countries and if necessary. to define them" (Watkins. 1971: 17 1). In the accompanying memorandum, they argued that, reference to the Rochdale ptinciples was being used excessively to restrict the examination of the problems arising from the unceasing development of commerce and industry, problems which a century before had neither the same aspect nor the same dimensions. (Watkins, 1971:171)

The Soviets were in favour of the proposal, arguing that the original principles had been written with the assumption that CO-operatives existed in a capitalist environment. While the 'Rochdale Principles' were commonly referred to within the ICA. and in fact the larger Movement. a forma1 histoncal review had never been carried out, nor the principles clearly articulated. The resolution was adopted and the Special Committee decided that the first step would be to determine which of Rochdale's policies and practices were fundamental to Rochdale system of Co- operation. The ICA General Secretary was assigned the job of histoncal researcher; he examined the Constitution, bylaws, and the early minutes of the Rochdale Equitable Pioneers and presented a summary of his findings to the Committee.

These findings formed the basis of the Committee's 1934 report to the London Congress. Response to the Committee's report was far from unanimous. Some delegates argued that the Rochdale principles. were designed for consumer CO-operation and as a result did not fit the non-consumer movement. In the end. the Congress charged the Committee with examining whether or not 'the Rochdale Principles' could be univendly applied to al1 forms of Co-operation and to completing the task of determine member adherence to and interpretation of 'the Rochdale Rinciples' (Watkins, 197 1). The results of this survey confirmed the Committee's belief that the Principles, listed in its 1934 report to Congress. were valid for al1 CO-operatives forms (Watkins. 1971). While the report appeared to be holding steadfast to this position it stated. 'that a las rigid interpretation of certain principles was necessary in those organisations which were different fiom the simple form of consumers' society" (Watkins. 1971:214). In an attempt to make it clear which principles were open to a less rigid interpretation, the Committee made a distinction between the principles; some were deemed 'essential', others were classified as 'important'. The 1937 report of the Specid Committee, unlike that of 1934. received a warm reception and was adopted by the ICA Congress with only two dissenting votes. Even though. it refuted the charge that adherence ta the Rochdale Pnnciples rendered CO-operatives unable to respond effectively to 'modem developments of industry and commerce. which had been behind the French Movements resolution to review the principles (Watkins. 197 1:215).

The 1937 Statement of 'the Rochdale Rinci~les'

The Committee are of the opinion that there should be some discrimination in the importance attached to these seven points in deciding the essential CO-operative character of a society or organisation. They suggest that the observance of CO-operative ptinciples depends on the adoption and practice of the first four of the seven principles. viz..

1. Open membenhip 2. Dernocratic Control (One Man. One Vote), 3. Distribution of the surplus to members in proportion to their transactions, 4. Limited lnterest on Capital.

In the opinion of the Committee. the remaining three Mnciples. viz..

5. Politicai and Religious Neutrality. 6. Cash Trading 7. Promotion of Education while undoubtedly part of the Rochdale System, and successfully operated by the Co-operative Movement in the different counuies, are, however, not a condition for membership of the ICA. (The Rochdale Principles of Co-operation, 19373212)

Summaw of the 1937 Rebort

In this first officia1 review of the pnnciples. the Special Committee's work was tied to the historicd reality of Rochdale - to the policy and practice of the Pioneers. In his account of the history of the ICA, W.P. Watkins wrote. ... the chief object of the proposa1 was to obuin what had never yet been obtained, a correct and complete list of the principles of Rochdale ....the purpose in view was to obtain a clear definition of Co-operative doctrine and of those methods which are recommended in the interest of the development of the Co-operative Movement in every country (Watkins. 1971 :171).

While the original cal1 for the review had argued that CO- operative practice was suffering from inflexible 'CO-operative principles'. the Special Committee's task was to articulate the essential principles of Rochdale and, as a result it made few allowances for conternporary practices of the movement.

The ICA's Second Review of the Co-o~erlitive Princi~les:

The 1960's

At the 1963 Congress at Bournemouth. a representative of Soviet Centrosoyus moved the resolution for the ICA's second review of the Rochdale Principles. He argued that the principles had been designed to transfom capitalism and 'now that CO-operatives existed in non-capitalist societies - the rules should be reexamined" (Watkins. 197 1:309). During the debate two opposing positions emerged - those who felt it unwise to tinker with the power of traditional wisdom, and advocates for the review, who believed modemity required adaptation of the principles. The advocates for the review were in favour of changing the principles to fit the practices and reality of the world's Co-operative Movement; those opposed believeà that it was the practices that should be changed to fit the principles. But. at the end of the debate, the resolution was accepted with an overwhelming majority. The resolution read as foilows: The Central Committee recommends to the Congress: @To constitute an authotitative commission to formulate the fundamental principles of activity of CO-operation under modem conditions; @To empower the Commission to study which of the principles of the Rochdale Pioneen have retained their importance to the present time; which of them should be changed. and how. in order to contribute in the best manner to the fulfilment of the tasks of the Co-operative Movement and finally, which of them have lost their importance and should be substiruted by others; @To empower the Commission to formulate new principles of CO-operative activity; @Toinclude in the Agenda of the 23rd Congress of the Alliance consideration of new principles for the activity of the Co-operative Movement; .To empower the Executive to request the National Co- operative Organisation. members of the ICA, to send their proposals on this subject; .To ask the Central Committee to consider the proposals of the National Co-operative Organisations and those of the Commission at a meeting preceding the 23rd Conpss and to submit its opinions to the Congress. (ICA, 1963) (Watkins, 197 1 :322) The Central Committee, responsible for implementing the resolution. substituted some of the Executive Committee's tecornmendations about procedure and the terms of reference for the

Commission for those of the original resolution. The primary differences were that, 'the Executive's terms linked the enquiry with that of 1930-1937 and did not prejudge the question whether any of the principles should be changed or reformulatedw (Watkins.

1971:326). This substitution proved to be a point of contention for the representatives from the USSR, as well as significantly shaping the Commission's wotk.

In the end the Central Committee determined that the Principles Commission's task was: *To ascenain how far the Priaciples of Rochdale -- as defined by the ICA Congress at Paris in 1937 -- are observed today and the reasons for any non-observance; *To consider, in the light of the results of the foregoing srudy, whether the Rochdale Rinciples meet the needs of the Co-operative Movement having regard to the present day economic, social and political situation or whether any of the Rinciples should be reformulated in order the better to contribute to the fuifilment of the aims and tasks of the CO-operative Movement in its different branches; *If so, to recommend a new text or texts. (ICA, 1963) (Watkins, 197 1 :3X)

Shortly after the composition of the Commission was determined32 it began the first step of its task. to survey the membership about the 'present observance of the Principles of Rochdale as formulated in the report adopted by the ICA Congress at Pans in 1937" (ICA. 1966. introduction:2/8). The Commission received over one hundred responses from member organisations and individual CO-operative 'authorities'. In addition to this input the Commission conducted personai interviews with CO-operators from three continents. as well as top officials at Centrosoyus. the national organisations for Soviet Co-operatives. in Moscow. The ICA'S

Research Section sumrnarised. analysed and presented the data from the surveys to the Commission when it met in London. in December 1965.

The Commission discussed 'the Co-operative Principles' 'against the background of contemporary economic and social life and the significance of the seven principles defined by the Report of 1937" (ICA. 1966. Introduction:2/8).

The 1966 Statement of Co-ooerative Pnnciples The 1966 Commission determined that there were six principles that were "absolutely indispensable to the achievement of

32 The Commission's composition ensured wide representation. including members from: Great Britain to represent the Rochdale tradition; India, who hew the conditions of the developing countries; the United States. who were to represent the Western Hemispherr; the Soviet Union, who were CO represent Eastern Europe; and Germany, who wera to represent Western Europe. (Watkins, 197 1 :326) the Co-operative Movement's purpose" (ICA, 1966, Introduction:

4/8). Those six principles were:

1) Membership of a CO-operative society should be voiuntary and available without artificial restriction or any social, political or religious discrimination, to al1 persons who can make use of its services and are willing to accept the responsibilities of membership.

2) Co-operative societies are democratic organisations. Their affairs should be administered by persons elected or appointed in a manner agreed by the members and accountable to them. Members of pri mary societies should enjoy equal rights of voting (one member, one vote) and participation in decisions affecting their societies. In other than primary societies the administration should be conducted on a democratic basis in a suitable form.

3) Share capital should only receive a stnctly limited rate of interest, if any.

4) Surplus or saving, if any, arising out of the operation of a society belongs to the members of that society and should be distributed in such manner as would avoid one member gaining at the expense of others. This may be done by decision of the members as follows: a) By provision for developrnent of the business of the Co-operative; b) By provision of common services; or, C) By distribution among the memben in proportion to their transactions with the society. 5) Al1 CO-operative societies should make provision for the education of their member, officen, and ernployees and of the general public. in the principles and techniques of Co-operation, both economic and democratic.

To these we have thought it important to add a principle of growth - mutual CO-operation among CO-operatives:

6) Al1 CO-operative organisations. in order to best serve the interest of their mernbers and their communities, should actively CO-operate in every practical way with other CO-operatives at local, national and international levels. (ICA, 1966)

The discussion of the 1966 Commission's report lasted almost two sittings of the Congress. Finally, the Central Cornmittee's resolution was put it to a vote and the new expression of 'the Co-operative

Principles' was adopted by the Congress with an overwhelrning majority .

The Commission's enquiry and repon offered a great deal more than an accounting of the essential principles of the movement. It revealed the commonalities that CO-operatives had with one another. W.P. Watkins (1971) offers this summary of the Commission's findings:

From the mass of material examined by the Commission three things emerged. Fint, al1 Co-operators concurred in accepting the aim of Co-operation as 'the creation of a working community in which al1 men have an equal status and in which no one benefits at the cost of another'. Second, al1 Co-operators 'entertained the highest regard for the rules and methods of Rochdale, which they try to follow to the greatest possible extent.' Third. al1 had found it necessary, in some respect or other 'to recast one or more of these mles and practices in order to redise more hlly the aims of the Co-operative Movement in their own peculiar circumstances'. (Watkins. 1971:335)

Summarv of the 1966 Commission's Report

What the 1937 repon lacked in the way of scope. vision and ideological fervour. the report of the 1966 Commission made up for.

In many respects the report was developed with the spirit that characterised the 1960s. The Commission's task was much broader; it was no longer confined to the historical reality of Rochdale, as the previous Review had been. The Committee was given some creetive license to define and elaborate on the principles; it was able to recommend oew principles and eliminate old ones. The Committee took full advantage of this and painted a colourful vision of a 'Co- operative Commonwealth'.

The ovemching tone of this repon was that of a manifesto -- an ideologically potent cal1 to action. The report is saturated by a seemingly unshakable belief that CO-operation. and the Co-operative Movement. will mumph over other economic forms. It will do so not only because it is ethically and morally superior, but also because of its natural efficacy. The ICA'S Third Review of the Co-o~erative Princioles:

1988-1995

By the mid 1980s there were rapid changes taking place in the world's political and economic system and within CO-operatives.

There were the dramatic changes in Central and Eastern Europe; Co- operative movements in Asia and Latin America were experiencing strong growth, and the state's relationship with CO-operatives continued to change. In addition to these challenges. changing business realities meant that CO-operatives throughour the industrialised world were experiencing an increasing need for capital. In recognition of these changes and the challenges which they posed for the Co-operative Movement, the theme 'Co-operatives and

Basic Values' was chosen for the 1988 Stockholm Congress. At that Congress, Lars Marcus. the president of the ICA. 'challenged the International Movement to re-examine its basic values and to provide a clear picture of the Movement's purpose" (ICA, Co- operative Pnnciples, ICA Review 1995:2/11). The topic was well received and the Congress adopted a resolution in which it,

Entrusts the ICA Executive Committee to set up an independent International Committee of Experts to analyse these principles in the light of new challenges facing CO-operators and CO-operative institutions today and in years to corne; Requests that the ICA Executive Committee regularly inform the ICA Central Committee on the progress being made in implementing the provisions of this resolution and draw appropriate conclusions and recommendations as to the future policy of the ICA to be represented to the ICA Congress in 1992. (ICA, 1988: minutes of the Congress)

In 1989 the ICA Executive Committee appointed Sven Ake

Book. Chairman of the ICA Research Working Party and Former

Director of the Co-operative Research Institute in Sweden. to serve as project director and to be responsible for this report? The task and the purpose of the project was defined as:

1. To serve as a basis for discussion and review at the ICA Congress in Tokyo in 1992 of CO-operativevalues and of the need to change the ICA principles. If the Congress decides there is such a need. the Executive will make funher study on such changes to Congress in 1995; 2. To initiate and encourage a process of consideration and development among CO-operative organisations on how to apply CO-operative values and principles in order to improve CO-operative performance and effectiveness.

The resulting report, 'Co-operative Values in a Changing World'. was the major policy document for the ICA'S 1992 Congress in Tokyo and an explosive one at that. The discussion of Book's report lead the

33 Book was assisted hy an Advisory Committee which had representation €rom Finland, the United Kingdom, the former USSR, France, Hungary, Zambia, Japan, Italy, Grrmany, Argrntina, Canada and Israel, as well as the International Labour Office. Congress to decide to undertake a third review of 'the Co-operative

Canadian academic and CO-operative scholar, lm Macpherson, was selected to chair this re~iew3~.Once again the review of the principles relied heavily on extensive consultations with CO-operators the world over. The result of these efforts was the document entitled 'Statement on the Co-operative Identity' and the corresponding background paper. In addition to reviewing and revising the Co-operative Pnnciples. the 'Statement' offered a definition of a CO-operative, and identified basic CO-operative values.

These two documents were presented at the 1995 ICA Congress in Manchester and were overwhelmingly adopted. The 1995 statement of 'the Co-operative Mncipies' reads: Definition A CO-operative is an autonomous association of persons united voluntarily to meet their common economic, social. and cultural needs and aspirations through a jointly owned and dernocratically controlled enterprise. Values Co-operatives are based on the values of self-belp. self- responsiblity, democracy, equality, and solidarity. In the tradition of their founders, CO-operative mernbers believe in the ethical values of honesty, openness, social responsibility, and caring for othen.

34 Macpherson workzd in conjunction with a 'Resource Group', which had rrprrsentation from Finland. Germany, Isnel, lapaa, and the Director-General of the ICA. Principles The CO-operatives principles are guidelines by which CO- operatives put their values into practice. 1st Principle: Voluntary and Open Membership Co-operatives are voluntary organisations, open to al1 persons able to use their services and willing to accept the responsibilities of mernbership, without gender, social. racial. political, or religious discrimination. 2nd Principle: Democrvtic Member Control 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. 3rd Principle: Member Economic Participation Members contribute equitably to, and democratically control, the capital of their CO-operative. At least part of that capital is usually the common propeny of the CO- operative. Members usually receive limited compensation. if any, on capital subscnbed as a condition of membership. Members allocate surpluses for any or ail of the following purposes: developing their CO-operative, possibly by 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. 4th Principle: Autonomy und Independence Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including govemments, or raise capital from external sources, they do so on tems that ensure democratic control by their members and maintain their CO-operative autonomy . 5th Principle: Educrtion, Training rad Information Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their CO-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of CO-operation. 6th Principle: Co-operition among Co-operatives Co-operatives serve their members most effectively and strengthen the CO-operative movement by working together through local, national, regional, and international structures. 7th Principle: Concern for Community Co-operatives work for the sustainable development of their communities through policies approved by their members (ICA, 1996)

Summarv of the 1995 Rewn on the 'Co-operative Identitv'

At first glance the 1995 Report seems to be as ardently ideological as the 1966 repon. It addressed the application of a number of principles and some new practices which had arisen. arguing that some of these varîed from the original goal and intent of Co-operation. In doing so, the report was considerably more ideological in its tone than the repon of 1937. and dramatically iess dogrnatic than the 1966 repon.

An examination of the 'Statement of Co-operative Identity' and the 'Background Paper' alone rnight give a reader the false impression about the ideological toae of this work. Closer analysis of the statement and the inclusion ofcThe Declaration Towurds the 21st Cenrury' results in a different understanding of the overall tone of the report. It is in this section that it becomes clear the degree to which the Movement has scaled back its vision. The report reveals a retreat from the claim that total conversion is possible or even probable. It recognises that the Movement is no longer an innovator and even makes the suggestion that CO-operatives could lem from some of the practices of the private sector.

Data Presen tation

Due to the volume and breadth of the reports. 1 have broken the data presentation into three distinct components. First. 1 summarise the progression of each individual principle through the three time periods. Each of these summaries is fotlowed with a chan which provides the official statement of principle, relevant quotations from the report and a commentary / summary for each time periods' discussion of each principle. The chart is organised by principle, presenting the information on each principle for each of the three periods including the statement of principles, relevant excerpts from the report, as well as some of my own comments for the principle in each year it was listed. This facilitates the readers examination of the development of each principle over time. Finally

1 summarise the three ICA reports individually and discuss how they have developed over time. Develo~rnent of the Individual Princi~les

Membershi~: 1937. 1966. 1995 As previously mentioned. the 1937 Special Cornmittee's approach to. and discussion of the pnnciples was profoundl y shaped by the mandate it was given by the Congress35. The report summarised its findings as to the Rochdale Pioneers' rule and practice of the principle of 'open membenhip'. as well as the results of its own survey, which found that the vast majority of those surveyed were tnie to the principle of 'open membership'.

In contrast to the 1937 report's narrow and exact accounting of the Rochdale principle of open membership. the 1966 report's interpretation was more inclusive and was used as part of an expansion strategy. In 1937, the pnnciple was 'accept al1 who apply and are eligible': in 1966 the approach was to actively encourage, even facilitate people joining . The 1995 report's actual expression of the membership principle is similar to that of 1966. However, each report's discussion of the principle reveals significant differences. The 1995 report's treatment of the membership principle emphasises the rnembers responsibility to actively participate in the

35 They werr to 'to enquirr into the conditions undrr which the Rochdale Principlrs are applied in various countrirs and if necessary, to definr thern."(Watkins, 197 1: 17 1) CO-operative. In 1995 the membership principle is no longer part of an aggressive expansion strategy, rather it is part of an attempt to combat decreasing member participation.

The 1937 statement of this principle faiis to demonstrate sufficient characteristics of any of the three phases to be classified as such. As a result 1 have classified it 'Other'. In terms of the Utopian,

Movement. System continuum the overall progression of tbis principle is from 'Other'. in 1937 to 'Movement', in 1966 and

'System' in 1995. The membership principle progresses from a simple. matter-of-fact statement that Co-operatives welcome al1 who wish to join (and are of reputable character) in 1937, to an active and aggressive recruitment campaign to ensure the movement's continued growth in 1966. to an attempt to regain or retain the essential CO-operative characteristic of member controi in 1995. 78 Figure 5-1: Summarp. of the Concent Analysis of the ICA'SStatements of 'the Co-operative Rinciples'

5-1 a: Membership Principle

- '.nie Rules of the Rochdale Piomm' The report takes a very matter of Society were fiamed to secve an open door fact apprcmch to this principle. and perfkdy tk admission to eveq fit and The reput stated the Roctidale's proper persorr.... nie ibst democracy under nile of 'open membership' & *designatecl an the sun eliminates 'undesirables' and discussed how the umîempocary csstntial prevents hcir admission. The only tesi that movcrnent was applying this principle Coqmation applies to membership is to the principle. character and genuinencss of the applican~" nie tcpoct discussed Voluntary [ICA, Report of the Rocecdings of the 14* Membership in the section "Orher Cmgress of the Inteniaiional Ccmpedve Basic Rinciples of Cmtion Alliance. 1934: 135) not Expressly lncluded in '-...the cases in which the Rinciple and Rodidale". However the Coiigress praaice of 'open mernbnship' are nat ttlly did nor oficial l y adopc it as one of applied may be rqarâed as exceptional. It the men grinciples in 1937. is. nevertheiess, neaxsary that they should nie 1937 report's mentof be noticed here and an oidcavor made to this principle is dificult to secm their cmfmity with the Rochdale categh. There was not vq basis."(lCG Their fksat, 1937: 2/ 1 1 ) much discussion of the principle. lt focused mainiy on the tacts of the historical and swey worlr. It did na demoiistrate any of the characteristics of ttie Ulopian or Systems stages. It did demonstrate sœne diaractcristics of the Movanent phase, however insufficiait to catcgorize it as such. Categarioe as 'Thha". 79 Figure 5-1: Summarg of the Content Anaiysis of the ICA'SStatements d 'die (&-operative kiples'

5-1 a: Membership Principle

pwtations hmthe Retwirts

'Mcnibcnhip of r -.....thevtry nature of the Cctopa!ivc The Coqmarive Mwcmcnt was CMperrtive Movmcint which is at once a socid movmcni setknig growth m mcmbcrship as wcll sockîy sbould bc wAing to mneasc: the numbers of it adhrrrrits as the expansion of its Yiulds of vdunury and and an econornic opismcapabk of apanding activity". Acharactcristicofttic witbout rrtifwirl and occupying wicler f~ldsof rrtivity. Its movmeni phasc. restriction or rny attitude to pcmns cIigiik for memkrship is. Thc Principk ctiangcd hmthe social, poliilor hrreforc normaiiy to welcornc thm when thq 1937 stafcment which said rtligiocis wish to join it and cvcn more. to imo>uragr and mernbcrship is opcn to any mdividuals discrimination. to assist them to join mieties appropiate to their who are eiigibk. The 1966 statrmat dl penons who sininth and nd*( 1966-!/la) of this principk ûctively encourageci & anmrlrc use of "..hi. decision IO apply for mmbrrship hid facilitatcd membership growth. The its services and nomaiiy br the rrsuk of his unfeuered ovcralf tonc was striongfy kkobgical r rc willing 10 apprriciation orcx~opcrativcvalues and and obted toward growzh both of rcclpt the considcmtion of his cconomic ;idvantage...... ln which are ch- of the mponsibilitia of the nacure of ihings. this t'mQm (open and Movmmt phase. nnaibtnbip" voluntap rnmberstiip) can mek. if at all be The 'Voluntiq' aspx2 of the absolute it can k rnodificd or ovdhby prhcipk. mmcndtd but not olhcr considrrations of widet application and adopctd in the 1937 repon was geam esmùai valid@ .,." off^ ad&d in 1966. Howcvcr. the ( ICA Consideration of the Coopcrativc report lM anumkrof Uistanccs Principles, !kction IL 1966314) whether it wouid tu iuqabk to bmhboth the volunmy and op aqmsof the principk. Most of the cxcepions yticulated favoud the mtrrcsts of the collective's growth .if ntcd k ovcr the wishcs of the collective. The ritport n=asond bat if men an individual ch- not to participate the coqauive wwM still function for hidm ktmteres This trament of the membrrship principk is ripe with idtobgcai fmowand. designcd to kiIitatc pu2h. Catcgornt as 'Movcmcnt* . 80 Figure 5-1: Summaq of the Gmtent Analysis of the ICA'SStatements of 'the Ceoperative Ptinci ples'

5-1 a: Membership Principle

Omtatioœ hmtbe lborts

'Vdiintrry and "Mmbership is arguably the most The proselytizing tme which Opca powerîûl - but often the most underrateû - =haiicterized the 1966 report is Membership: of al1 the Principles. ln essence, it means mot present in the 1995 treatment Ctwpentives there should be a special relationship of this principle. It stressed the an vdmntr y benveni the coqmative and the people it importance of member wgrniutioas essentially ma. That relationship participation as a means of qen to ail should define the business conducted by giving each persori ' a voie in ~~ abk to the tmoperative, affm the way it does heir own affiirs' and me tbeir chat business, and shape its plans for the acknowledgeà that Co-operation services and fùture. Further, a recognition of the needeû to work to ensure that willing to centrality of 'mernbership' must mean better levels of member iicctpt the that cwqmatives will be committeû to a participation. respoasibilities particularly high level of service to The report acknowledgeà that of mcmbcrship, members. the main reason for the coqs are largely single focus witboiit gender, existence. ( 1995: 121 1 7) organizations and as such cm social, racial. 'Coups are voluntary organizations' - serve only limited interests. pdihlor reaffirms the hdamental importance of Members are encwraged to join reiigiops people choosing voluntarily to make a co-opmtives if the t'unction and dkriminatioi" cornmitment to their ccqmatives. services ofthe coqmative fit People cannot be made to be cooperators... their nd.Gme is the idea that Nevertheiess, in many countties arwnd Coqmatives were a group of the world ecmmic pressures or people who collectively govenirnent regulations have sometimes detmined their needs and met tended to push people into becoming them. rnernk of some coqmatives In hose This view and the idea that 'Ce instances, cooperatives have a special opefatives are to have a special resporisibility to ensure that al1 mernbers relationship with their mernbrrs are hlly involved so that they will come indicates that the ICA now sees to support their coqxmtive on a Coqmatives as organisations voluntary basis."( 1995: 1 O/ 1 7) distinct tiom theu membership. -'Open to al1 people able to use their Categorize as 'System'. services' - acknowledges that cuoperatives are organized for specific purposes: in many instances, they can only effectively serve a certain kind of mernber..," (ICA. Background Paper to the Statement on the Cwperative Identity. 1995: 10/I7) 8 1

Democracv: 1937. 1966. 1995

The 1934 report states the ptinciple of democracy for the

Pioneers was an attack on the capitalist practice of assigning voting privileges according to the amount of capital held. It was also intended as a means for people to control their immediate economic reality and to simultaneously remake the larger economic system.

The 1937 report reiterates the method of 'one member. one vote' that the Rochdale Pioneers had utilised. While it reported that sorne

ICA members had deviated fkom the method of one member one vote, it neither criticised nor condoned it.

The 1966 report stated that the growth of the movement would inevitably require changes to the practice of democracy. While the Commission clearly articulated their belief that the principle of democracy was central to the spirit of Co-operation they did not recommend or explore new democratic processes. The Commission is so feverish in desire to facilitate the growth and expansion of the movement that they leave it to individual CO- operatives

The principle of democracy moves from 1937's simple. matter- of-fact prescription for democracy (classified as 'Other'): to the 1966 report. which is steeped in ideology and focused on attaining its goal of conversion (classified as 'Movement '); to the 1995 report which has opted for flexibility over a clear statement of democratic process (classified as 'System'). 83 Figure 5-1: Summary of the Content AMlysis of the ICA'SStatements of 'the (hprative

Ouotaîioœ hmtbe Rem-

In Rochdale ..." Every member was rhis report talked about the equal in right. and was allowed to mtrality of democracy to the express his opinions on whatever topic Pioneers. Economic he took an interest in ... The Board was iiemoçracy tluough CCF open to everybody, and in fact, operation was the means for every body went everywhere. Distrust the comrnon man to take dies out where nothing is concealeci control of, and transform the ....Every member was a master - he economy . was at once purcher and proprietor." The Special Cornmittee (Hdyoake as quoted in Report on ..., acknowledged diffetent forms 1 934: 138) of cwperation had modified "so far as Primary Societies of this principle. tt did not Consumers are concemed, there is very condemn the modifications. It little deviation from the Rochdale stated that if the Principle in present &y practice... but representatives are duly elected we find divergence fiom the simple democratically. the principle is metM of 'one man, one vote" in other rnaintained. There has been a co-operative fonns. (ICA, Report on shift fiom direct participatory the Proceedings of the 14& Congress of democracy to accepting a the ICA, 1934: 138-9) variety of forms including representative democracy. It doesn't demonstrate any of the characteristics of the Utopian or Systerns stages. The move away fiom a focus on direct partic ipatory democracy facil itaies the growth and developrnent of ever larger CO- operative fom. This is a rnovement characteristic but it alone is insufficient to detemine the c1;issification of the principle. Categotize as 'Other' . 84 Figure 5-1: !hmmary of the Gmtent Analgsis d the ICA'S Scatements of 'the Co-operative

'C~ratives -.. al1 should have equal opportunities of The implicaîion was that the are dtmocratic participating in decisiau and expressing praflice of 'one memk. one vote' orgaiiptim viws on policy. 'lhere is no way of muring would ensure that manbers would Tbeir rffriir his Save by giving radi mmber one vote and play a meaningful role in the D slorild bt me ml?... sincc thc CmiveMovement opcrarivc - that thcy were saved hm rdmhistcrcd by mists in orda to place the awnmon peuple in king a 'cog in the mechanism'. prnoBs tkcted effective rxnitrol of the mechanism of modem The Commission admowledged or ippoiitd ii r Me. it musc give the individd (only too oh that demoaatic organs would nad maimer 4d reducrd to the role of a cog in that mechanism) to undergo significant chelopnient by the memkn a chance to express himsclf, a voiœ in the to kqpaœ with growth but did not iidrccoontabk firsand destinics of his aqmuive. disaiss how this was to be aEhicvd. ta them. 'It is not thefithat the principle is in any lt arguai that the evolution of the Mcmknof doubt. but thits implementation becornes Coqmative Movemcnt mmt thst primiry sacidia more and more complicated with thc growing modifications to the principlc and sborld erjay si= of Coopcriive institutim and the soope practia of dcmoaocy wm qiil righrs of of thcir cainomic commiunents. ~IS well as irwvitablc and that thq would na vdag (oie w ith the mpid and fi-hi ng changes now constitutc a departure hmthe wmber, me going on in the Movmcnt's ammic and pn'nciple. lt was vcry idealistic - Ce vote) rid social cnvironmmt. The evolution of indus. uperatim was gmwing and %king participrtioii im and of cmpmtive enterprises in particular. on the world". Smgideologid dcchions maki: mtind modification inevitabls. ovmones. These are chacteristics rffktimg heir Refinernents in the fiand machin- of of the Movement pk. Socicties. lm administration arc MM. thmfm, to be The 1966 Commissian took the &er tbri regardcd as a dqarturc tiwn the dcmocratiç position that growth of the CL) primiry socih principlc...., The tdqIO evolvc tow;uds openiive Movement was nor only a the the mation of ever largt!r and mmclmly pdthing but inevitable - rdmiaistrrtiai intepuai opentional nits is not cmly modifications to the principles are shoald cmductd chancteristic of the ccoriomic world but also acceptable to finhm the 'cru'. an a del~~mtic inhmt in the coqmuive form of in its discussion of this principle the buis iir bation. The Coogcratibe Movement mua report recognid the growth of ever soitable form" mempt to match it b? componding lqer amgiomcrate fmsand the devclo~mcntof its dcmacmiç org~sand a cffccts this would have on the judicious balancing of œnmdizatiori and praaia of dmamq. decentraliairion.-( 1966:8-9/ 1 4 1 Categoria: as "Movement" .many srcondap awps had modifi4 the prixtice of one mernber. one vote. The Commission me: may nprcscnt a nasapad desirable amcession for the sake of the ~nit.~(lCA.Consideration of the Cwpemive Pnnciples. Seaion L l%6:lO/ 14) 85 Figure 5-1: Summay of the Gmtent Analysis of the ICA'SStatements d 'the Coopentive

"fkmocntic "Democracy is a complex word. It can By the 1995 report the discussion Memkr usefblly be thought of as a listing of of the principle of democracy had Coatrd: Ca- rights; indeed, the struggle for democratic becorne more abstract and it operativu an rights on a political level is a common retreated fiom any attempt to democratk theme of the history of the last two define how demmcy shwld be Orgaaiutioas centuries. Within co-operatives realized in anything but prirnary caatrdl«l by 'democracy' includes amsideratioris of sucieties. lnstead it said that - t hcir uwmkrs, rights: indeed, rights and responsibilities. operatives were best able to who actively But it means more: it means fostering the determine their own democratic participate in spirit of dernocracy within co-operatives, practices. ln a clear attempt to setting tbeir a never ending, difficult, valuable, even manage the results of Cc+ policies and essential taskW.(1995: 121 17) operation's previous growth. and mriking The sentence 'In primary ccqxratives. to meet its currmt challenges, decisioas. Men members have qua1 voting rights ....' the report argueâ that CLF and womcn "describes the customary rules for voting uperation requircd new, more serving as in c-tives. The nile for primary m flexible applications of the eked operatives is xlf-evident. The rule for principle of demmcy. representatives voting at other than the primary level is The issue of effective mmber are accouotabk open-ended in the belief that coqmatives involvement and control is a to the rnovernents themselves are best able to rccurrent theme of the report's membersbip In define what is dernomtic in a given treatment of the principle. At the pn=ry circum stance.. .. In many semd;uy and same time there was an c~rativ~tertiary c~tives,systems of increasing emphasis on the ce membcn bave proportionai voting have bcen adopted so operative's responsibility to eqml votiig as to reflect the diversity of interests. the fâcilitate member participation. rigbts (me six of mernberships ....."( ICA. Member control uas no longer mmber, me Background Paper to the Statement on the referred to as a means to building vote), and Co-opaative Identity, 1995: 13/17) a new social and momic order. coopntives at Mem ber cmtrol had berne an aber kveb an end in itself. abo orgaaized in a democntic mamer." Distribution of Surplus: 1937. 1966. 1995

While the overail tone and structure of the 1937 report is very matter-of-fact. its treatment of this principle is not. Concemed about the evolution of the principle. it engaged in a discussion about its intended spirit or purpose.

With ideological fe~our,the 1966 report argued that the principle of the 'distribution of surplus' was a critical characteristic in setting CO-operatives apan from private enterprise and that it was being misinterpreted and misapplied. It expressed concem that this misapplication might hinder the movement's goal of conversion. The 1995 report ernphasised that surpluses could be used for the benefit of the CO-operative rather than exclusively being distributed to individuals. The 1995 report's treatment of this principle explicitly tries CO adâress issues of capital formation while

retaining some degree of autonomy. It does this by encouraging CO- operatives to retain the surpluses which had previously been

distributed to the membership. Thus going a long way to solving one

of the rnovement's most pressing organisational dilemmas. This focus on organisational survival places bis expression of the principle in the 'Systems' phase.

The 1937 report's statement of this principle failed to demonstrate sufficient characteristics of either the Utopian, Movement or Systems phases to be classified as such. The overall progression of this principle is from Utopian. Movement, Systern continuum is from 'Other'. in 1937, 'Movement'. in 1966 'System' in

1995. 88 Figure 5-1: Summary of the Content Analysis of the ICA'S Statements of 'the Cwpentive Priacipies'

SIC: Priwipte of the Distribution of Surplus

"Distribiitioa "It is suggested that the practice of This report stated htthe of tbe surpie paying either too high a dividend or a distribution of the surplus was to members in regular fixed rate should be avoided misinterpreted and rnisapplied proportion Co One of the principal aims of ce This was a result of the use of tbeir operative trading is to increase the the distribution of surplus as mmactiom- value of real wages by supplying the an enticetnent for membership, wage eamr with the necessaries of life thus flrthering the at the cheapest possible rates consistent developmcmt of the Movernent. with the maintenance of the business on In an uncharacteristically a sound financial basis adcornpliance ardent manner. the 1937 report with the general principles of the tried to claritjr the intent or Movernent. In the practical pursuit of goal of the principle. these aims the making of some surplus This can be seen as an attempt is inevitable and it is only such surplus to revive an earlier practice of that should be available for the selling at or below market dividend on purchases. One of the prices and distributhg the greatest services which Co-operation surplus. The report argued can render to the community is that of agaimt the practice of raising a price f'king standard for the prices in order to ensure a high production and distribution of dividend. It was concerned co~ities.That valuable purpose is that it would datroy the rnuâified to the point of non-existence rnovernent's goal to help fix in the degree in which the practice of market prices at a reasonable high dividends. or hed dividends, is level. It demonstratecl one of adopted - rather than conformity to the characteristics of the prices based upon a reasonable margin Movernent stage, to challenge above cost price for expenses, and the market, to act as a taking into account the necessities of consumer advocate and price compeiition. (ICA, Report on the regulator. but it does not Proceedings of the 14' Congress of the exhibit any of the 0th ICA, 1934: 140- 1 ) characteristics of the that ph. Categorize as *W. 89 Figure 5-1: Su- d the Content Analysis d the ICA'SStatements of 'the Cooperative Principles'

Me: Principle of Distribution of Surplus

Ouotations fhm tbe Retmrb

"Surplus w This principle. .-has been much confiseci The report offerai amsiderable srviags, if any, in the past through misconceptions discussion in an attmpt to arising out of springing fiom analogies mistakenly cliuifi the intent and practice of the Opemtiom drawn between the hancial benefits this principle because it was of a sockty derived by memk fiom their ce concemeci that it was king belmg to tbe operative society and the profits camfkd with the practices of nwrnbtrs of distributed by joint-stock companies to the mainstream, capital ist tbtsockty rad hoiders of their ordinary (equity) shares businesses. Cwpcmtives are sbopld be and as a consequence. through the use of trying to maintain their distributeâ in ambiguous terms...." (1 966: !/IO) distinctiveness. This can be seen auch a mrnaer "...the question wtiether to divide (the as a sign that the 'Movement' as wdavoid surplus) or not. and, if there is division. was slipping fiom conversion to me memôer what shall be the method. have been coexistence but at this point it is gaining at the constantly present to the min& of still fighting the notion of CO- espense of coopetators throughout the movernent's existence. otbers. Tbh histw'... in Great Britain, the net surplus The report took a strong may be dont by ..were to be kept indivisible ...to assist ideologicai position. arguing that decisioa of the their development into self-supporting this principle play an integral mcmbcrs as communiti=...The Rochdale role in setting awpmtives apart fdlaws: a) Pioneers,.decided..,that there should be fiom private businesses. tn this ptwuioa Cor division. ... in ocder to gain the support of way it fits within the Movement dcvelopwnt of any considerable numk of members, phase. the bpsiam of their society must offer them me The report acknowledged that the c* immediate or short-term advantages... mecoqeratives. in the +rative; b) by (nie) decision to divide and to divide in process of their growth. had pnwisioa of proportion to purchases was really modifiecl the principle. It was commoa dependent on a previous decision as to critical of these moâifications. services; or c) price policy. They chose to retail gdat arguing that they hilesi to by distribmtioa current market pria, as this would maintain the spirit of the ammg the administratively be easier and simplet principle. This detailed mcmbers in than sale at cost pri ces..." but some coops discussim is an atternpt to propmioa to have modifiesi principle by adopting a manage the Movements growth their fixed rate of dividend - managers and evolutiori. Nmally an trr.srctioaJ calculate it into the prices - report says attempt to manage success is a with the 'thus in effect tuming the system on its diaracteristic of the Systems sockty." head." phase but hert it is combined (ICA, Consideration of the Cooperative with an ernphasis on continucd Rinciples, Section 11. 1966:2/10) growth and eventual conversion. Categdze as "Movement" 90 Figure 5-1: Summary of the Gmtent Analysis of the ICA'SStatements d 'the &operative Rinciples' WC:PMciple of Distribution of Surplus

--

* When the activities of cwperatives "Co-operative Values in a mate surpluses, members have the Changing World" was the right and the obligation to decide how intermeûiary step in the 1988- those surpluses should be allocated. 1995 review of the principles. They allocate such surpluses for any or One of the themes of that work al1 of the following pupes: a) they was a concem about the can choose to develop the cwperative acquisition of capital. That 'possibly by setting up reserves. pan of work called for a modification which at least would be indivisible.' of the principles to allow erisier This approach. which in rnany co- access to externat sources of operatives should be the nonnal way to capital. allocate surpluses that are not returned The emphasis on mernbers' to members. is vitally important in econornic participation and securîng the long-term viability of the use of 'self-financing' cosperative. b) They can chme to techniques. like allocating pay a return to rnembers. usually surpluses to indivisible refened to as the 'dividend' based on reserves, or using it to support the mernber's participation in the ce other co-operative operative. This is the traditional way development was a response to reward members for their support of to this. There was a shifi in the co-operative. emphasis fiom 'what has been C) They can support other activities done traditionalty - to what can that are approved by the memben. and should be done'. One of the most important activities The report was trying to they can - and should - chme to rnake modifications to support is the ttrther developrnent of accommodate growth that had the co-operative movement. localiy, takm place, and manage the nationally, regionally, and demand for capital that intemationalIy.~ICA,Background resuhed. and took a less Paper to the Statement on the Ce ide~lo~calapproach to it. operative Identity. 1995: 14/17) Both of these are Systems c harac tetlstics. Categorize as 'Systern'. Limited Interest on Ca~ital:1937. 1966. 1995 The 1937 report does not make the ideological basis of this principle apparent. The principle appears as nothing more than common sense - 'do not pay more interest than you have to, to secure the funding you need'. The 1937 treatrnent of this principles fails to exhibit the characteristics of any of the three phases and must therefore be classified as 'Other'. In 1966 the principle of limited interest on capital is faced with the problem of securing adequate for the movements continued growth. The tone is ardently pro-conversion but the report realises

*a more elastic system of interest limitation" is needed if the Co- operative Movement is to lead the economic system, not when. The report still has its sights set on conversion. a distinct characteristic of the Movement phase. The report's argument for 'an elastic system approach to the principle" to ensure organisational stability and sumival are characteristic of the 'System' phases. In 1995 the discussion of 'limited interest on capital' is

included in the 'Member Economic Participation' principle. which deals with the larger issues around capital in CO-operatives. There is

an emphasis on the ways in which members con and should contribute capital to their CO-operatives. The report is attempting to

93

Summary of the Content Analpis of the ICA'SStatements of 'the Cbqetative Rinciples'

54d: Principle of Limiteâ Intemt on Capital

Ouotatioœ from tbe Rem*

- - -- -The position, therefore appears to This principle is treated in a be that the Principle of the Pioneers very rnattersf-fact rnanner, was that Coperative Societies should The section States what the pay a strictly limited interest on rules of the Pioneers were and capital. but that the exact timit was not that "the practice of the and could not be a rigid percentage, but Pioneers is king followed with an elastic amount conesponding to the fidelity to the Principle." lowest rate which would be sufkient Non-idedogical - no to obtain the necessary hnds for the discussion of reasons why development of the Society's business." interest on capital should be (ICA Report on the Proceedings of the limited. I 4" Congress of the ICA. 1934: 14 1 ) It doesn't demonstrate any of the characteristics of the Utopian, Movement or Systems stages. Categorize as 'ûther'. 94

Summaq of the Content Aiillysis of the ICA'SStatements of 'the Cooperative Principks'

Sld: Principle of Limited Interest on Capital

Priaciple of Limited [ntenst oa Eapitai

'Sbrre caphl 9is(principle) has its origins ndably in nie 1%6 Repat did what the rboutd oaly hie tesentment with whidi many working 1937 report fhiled to do - to give an meive r strictly -le regardecl the distribution of pro~erty ckological ratiociale for this limitai rate of muid inmein the 19'" cenhuy xinciple. In doing so the repat intemt, if rny." sociny... While the inunediate goal ...might honstrated the ideological be to dieapen the necesmies of lik ...the hour that chmerizes mu& of ultimate aim was to establish a new social he 1966 rcpoit. wder ctiaraaerized by what they cal ted This report maintaincd that self 'equity' in the disaibution of wealth and financing, the traditid matiod of incomc... People who possessed or apital formation fbr axqeratives, commandcd moncy for invtstment wielded a was dl1the best approsch, It also bargaining power which enabied them to achowlcdged that it was &tain. at the expense of the ather f3ctors of increasingly di fficul t to secure pductia hi& dividends and an accreiion adquate capital for the of capital values tepffscnting ... the lion's Movernent's continu& growth. stiare of the profits of industry."( 1966: 1 Il14) While the discussion of this "Provided that capital is fhhcoming in principle is markcd by an adequate mounts whcn rquited seif- ideological ferva which is financing is an added guarantee. in a ctiatacteristic of the Movement cornpetitive econorny. of a cmpative phase, there was an society's independence and t'reedm to solve acknowledgmcnt that axqxmtives its proôiems of gtowth and had tàllen bchind thc private sca~r developmcnt... seIFfim6ng tends to becorne in tmof king innovative, Cc+ ever harder and may end by becoming operation was banling for mere impossible for primary dstence, seemingly giving up sociaies... Conm9orary the Qcam of complere amvcrsicm. conditim... demand some more elastic This principle combines systun of interest limitation. If the charaacristia of bath the Movement is to be more than a mere camp 'Movement' and 'Systcms' stages. fdlower of the more progressive private Its tone is ardently version sector and biaze new trails and lead the but it said ifthe Coqxmîion is to entire economic systcms, the whole question be more than a hllower.. ratfier of capital availability has to be studieâ in a than claiming that it is destined to much mare mobile and dynamic msinner than shapettie economic system. was possible in dierdays." (ICA, Calegoriatas Consideraiion of the Cooperative Rinciples, .M,,,, 6ysml' Seaiai I, I966:l l-I$/lj) 95

Summary of the Content Analysb of the ICA'SStatements of 'the Chqxrative Principies'

5-ld: Principle of Limited Interest on Capital

Membcr "Co-operatives operate so that capital Capital has become a very Ecommic is the servant not the master of the persistent practical issue for Participation: organization. Cwperatives cxist to co-operatives that are trying to Members meet the needs of people, and this maintain their previous contribute principle describes how members success. The d for capital qw 10, and invest in their cwperatives ... is as great as. if not greater democraticaüy 'Members contribute equitably to. and than, ever before ... control, the democratically control, the capital of The 'Book report' suggesteû capital of tbeir their cooperatives' ...reinforces both pennitting external sources of cwperative- the need for members to contribute capital formation and offering At kpst part capital to their cwperative and for tinancial incentives to âraw of tbt capital them to do so in an quitable fashion. that capital. In the context of is usdy the In essence they can contribute capital this report the 1995 report cornmon in four ways ..." emphasizeû members ' propers of 1 ) as part of requirement of obligation to contribute the a+ rnembership invest in required capital. The report stood firm opemtive. mem bers shares on the original intention of the Membem 2) dedicate some or al1 surpluses to principle despite a persistent usiinuy teceive resewes practical 'need' within Ce iimitd 3) some cwperative require mernkts operation. compensation, to contribute a portion of their dividend It dmn't dernonstrate any of if aay on to capital accounts - no interest is paid the characteristics of the capital on these fùnd. Utopian. Movernent or suknbed rrs 4) special appeals to members for Systems stages. It does not a condition of addi t ional investments, these fùnds have the ideological fmour or membership*.. receive limited rate of interest. overarching sense of optimisrn w (ICA, Background Paper to the of the Movement phase, nor Statement on the Cwperative Identity, does it exhibit a willingness to 1995: 13/17) compromise the practice of the principles in order to mintain the success it has achieved thus far. Categorize as 'Other' Cash Trading: 1937. 1966

The 1937 report declared the practical benefits of this principle both for the individual and for the CO-operative society. The individual is Free from the burden of credit and the CO-operative is saved from the financial instability that often results from extending credit. Unlike the overall tone of this report. the discussion of this principle is characterised by a strong ideological tone. In this way it demonstrates one of the characteristics but this is insufficient to determine its classification; as a result 1 have classified it as 'Other'.

In 1966 the principle is dropped. The report refers to the need to stay cornpetitive with the private sector. It argues that Co- operatives need to be free to offer credit when their counterparts in the private sector are doing so. Despite the fact that the overwhelming tone of the 1966 report is ardently ideological. the discussion of this principle is not. It argues that CO-operatives must foilow the lead of capitalism: it does not advocate innovation or conversion in its discussion of this principle. The overall progression of this pnnciple in terms of the Utopian, Movement, System continuum is from 'Movement'. in 1937. to 'System' in 1966. As can be seen from the 'Figure 5-2: The Progression of Rinciples', (included in the Appendix) this is the only instance where a 1937 pnnciple is categorised as 'Movernent' and the only instance where a 1966 principle is classified as 'System' only. 98

Summay of the Caitent Analysis of the ICA'SStatements of 'the Cooperative Rinciples'

54e: Principle of Cash Trading

"Our weavers determined that the The 1937 report maintained society should transact its business on that cwperatives could break what they denorninatecl the 'Ready away fiom the practices of the Money Principle' ... l t was a part of larger environment. They were *designated an theu wcialistic education to regard capable of converting the important, but credit as a social evil - as a sign of the economic system! Tk mt essential anxiety. excitement and hudof practice of not giving credit 6 priacipîe competition. As social reformers they consistent with kir ideology. had been taught to believe that it would The report also pointai out the be better for society. that commercial practical benefit of greater transactions would be simpler and financial stability of the honester. if credit were abolished. This organization. It exhibits was a radical objection to credit". ideulogical fmour, an (ICA. Report of the Procdings of the optimism about the goal of 11' Congres of the International converting the economic Cooperative Alliance. 1934: 145) system and a focus on the individual unit as building block for the whole. Ca tegorize as "Movement ' 99

Summary of the Cmtent Analysis of the ICA'SStatements of 'the Ccwpetative Principles'

5-le: Principle of Cash Traàing

Priacide of Ouotatiom from tbe Remi.Q Cash TrPding

------Cash Trading "doesn't have universal The 1996 report dropped this validity of principle.... if consumers' principle arguing that it was cwperatives find thernselves obligeû not applicable to al1 forms of to conforrn more ot less to what is Coqmation. In addition. it considered sound practice in retail said Cosperation must trade in general, the same is also me, maintain the patronage of Say, of agricultural marketing or members and gain new industrial producers societies. which members. by offering the same ailow their customers whatever trade services as private sector (like terms are usual in a given market....." credit). While the 1937 report but as coqmatives grew and emphasid the benefit of expanded tfiey financial security/stability of -were forced to face the fact that the organisation, the 1 966 they could not secure or retain their report focused on the goal of members' custom without providing increased growth of the facilities for payment qua1 to those Movement by increasing the offered by their cornpetitors. (ICA, membership. Consideration of the Cwperative It exhibits a nurnber of Principles. Section 11. 1966:6/10) c haracteristics of the 'Systems' phase: it stated that the private sector leads the way and ce operat ives must follow (testricted in its ability to innovate); the ideological fervour of the previous report is al1 but gone; and in that it is following the pmctices of the private sector it appears to be practicing coexistence rather than conversion. Categork as 'System' . Political & Religious Neutralitv: 1937. 1966 & Autonomv 1995

The principle of Political and Religious Neutrality is listed in the

1937 repon, discussed, and then dropped in the 1966 report. and at least paniaily reincarnated in the 1995 Principle of Autonomy. In the 1937 repon the principle serves two functions: to ensure that CO- operatives admit al1 who apply and are eligible; to ensure that CO- operatives do not align thernselves with religious doctrine or political associations. The purpose was to avoid any intemal divisions within individual CO-operatives and to ensure that CO-operatives are free to pursue there own best interest at any given time. The discussion of this principle does not exhibit enough of any of the characteristics to fit any of the categories. In 1966 the principle of political and religious neutrality is dropped from the official 'Co-operative Principles'. The repon argues that neutrality has been misconsmied to mean passivity. In keeping with the overall proselytising tone of this report. it States that CO- operatives must distance themselves from this notion of passivity.

The repon acknowledges that there may be instances where CO- operatives should practice neutrality. but that those should be determined by each individual CO-operative. Neutrality should not be listed as a principle; individuai CO-operatives'shouid be free from ties that would inhibit them acting on their own best interests" (ICA.

1966). The discussion is ideologically powemil. It is focused on the power and importance of the individual CO-operative. The

Movement must shed the principle because it doesn't fit with the image of an aggessive converter of the economic system - it cannot be apolitical and transform the world. nie 1966 report exhibits the characteristics of the 'Movement' phase.

In 1995 this principle is rebom in the Principle of Autonomy. Political and religious discrimination are still prohibited in the expression of the Membership Rinciple. The Rinciple of Autonomy was designed to ensure that CO-operatives' interest are not compromised when they are dealing with governments and businesses in the private sector; CO-operatives should ensure that they have sufficient autonomy from such forces that they can remain member-controlled and member-directed. Co-operatives are no longer presented as having powerful revolutionary potential. The tides have changed. and rather than co-operatives challenging the status quo. the repon achowledges that there is a very real danger that external forces could compromise the essential CO-operative characteristic of member control. Interestingly the repon does not acknowledge that there is a relationship between the 'new' principle - the principle of Autonomy and the cvolving notion of Political and Religious Neutrality . The evolution or development of the principle of Political and

Religious Neutrality is one of the most interesting. The spirit of the pnnciple is reinterpreted from 1844 (Rochdale) io 1937 to 1966 when the Principle is rejected because of the new dominant interpretation of the principle. The 1995 Review creates a 'new' principle which embodies the spirit of the principle as it was interpreted in 1937.

The overall progression of the principles of 'Political and

Religious Neutrality' and 'Autonomy' in terms of the Utopian. Movement. System continuum is from 'Other' in 1937. to 'Movement' in 1966. to 'System' in 1995. 103

Summaq of the Content Analpis of the ICA'S Statements of 'die Ccmprative Principles'

SIE Priaciple of Political and Reügious Neutraüty

- The Principles of the Rochdale Co- This principle was seen as an operaton are. first, not to enquire into extension of the principle of the political or religious opinions of open membership as well as those who apply for membership, into acting to preserve unity of the +designoted an ours or any of the various Cooperative association. important but Societies in out tom: second that the Once again it is given a very aot esseatiril consideration of the variou political practical and non-ideo logical principie and religious difference of the members treatmmt. It doesn't who compose Our Societies should dernonstrate any of the prevent us from allowing into our characteristics of the Utopian councils or practices anything w hich Movement or Systems stages. might be constnied into an advantage to any single one of each sect or Categorize as 'Other' . opinion."(lCA, Report on the Proceedings of the 14' Congress of the ICA. 1934: 142-3) 104

Summary of the Content Analysis of the ICA'SStatements d 'the Coqjerative Rincipfes'

5-lt Principle of Poütical and Reügious Neutraüty

--- "It is the tem, 'Neutrality' itself which Theis a strong ideological is increasùigly called in question by :one to the discussion of this Cwperators more or less everywhae. principle. The report uisisted It was never a good tenn, because it hat the principle nevn meant canied overtones of passivity and that the cwperatives were to indifference which did not harmonize be neutral or apolitical. with the facts or the practice of Ce Rather, the principle was an operat ive organizations w hich were attempt to ensure autonomy not, and had no intention of king, 60m set political or religious indifferent or inactive where the doctrine in order that co- interests of the rnovment were operatives could pursue their involv eû... but to reject the terrn is not own best intetests at any given necasarily to abandon al1 the tirne. As a result. it was underly ing ideas.. .The Commission dropped for the 1966 feels it cannot follow the Report of Commission's list of 'Ce 1 937 in giving the same absolute operative principles'. authority to Neutrality as a principle. As they did with the Neutraiity in certain circumstances is a discussion of the other right and propet policy. Thete should principles. the 1966 be fieeâorn in al1 levels of the ce Commission retreated fiom operative structure for the individual prcscribing how cwperativs rnernbers, primary societ ies, secondary sbould practice the principle. organizations. and international They simpty said that it was institutions, to take political questions up to individual ccwiperatives the attitudes which are necessary or to decide for themselves. mat appropriate to their circumstances It exhibits a number of the at any givm iime or place ....."(ICA, characteristics of the C onsideration of the Cooperative Movement phase inc luding Principles. Section 11, 1966:3-5/10) ideologîcal fmour, focus on growth and expansion of Ce operation whic h includes fieeing up m*hods and allowing individual co- operatives to daennine what best facilitates their progras. Categorize as 'Movement' 105 Summary of the Gmtent Analysis of the ICA'SStatements of 'the Cooperative ninciples'

Mg: Principk of Autowmy

Princi* of ~utowmv

*Automrny "...the Autonomy Principle addresses This report emphasized the ml the essential need foc co-operatives to importance of Ccwperation [dependonce: be autonomous, in the same way that ichiwing the same degree of C~perativa enterprises controlleâ by capital are autonomy fiom the state as the mre autonomous in theu dealings with private sector enjoyed. autoaomoa9, governments.. .. It acknowleâged that Ce &belp In referring to '0th organizations' the operatives wwe engaging in orgnniatioas Principle acknowleâges the fact ht, joint projects with private matrolled by around the world. more co-operatives sector partners and was not îheir are entering into joint projects with critical of îhis trend. The membem. If private sector fim, and there is no report maintained chat in these tbey enter into reason to believe that this tendency will joint projects it was important agreements be reversed. It does stress. however. that swperatives remain witb otber how important it is that coqmatives member-controiled but the organkatious, retain their fieedorn ultimateiy to tone is far fiom ideologically incllliding control their own destiny w henever ardent. The report did not governmeats, they enter such agreements." indicate how (besides king or raise capital (ICA. Background Paper to the rnember-controlleû) ce from exteruai Statement on the Co-operative Identity, operatives were radically WU^, tbey 1995:14-15/17) different in their goals & do so on te= objectives fiom their private tbat ensure sector counterparts. democdc This discussion exhibits a control by number of criteria of the tbeir mernôers 'Systems' stage including: the and mintain absence of an ardent tbeir a~ ihlogical approach, joint opemtive partnerships with non-ce autommy." operative enterprisa to create the whole, coexistence with capitalist system rather than trying to convert it. It is unçlear whekthe Commission is tryuig to manage Cwperations 'success' of its dedine. Categotke as 'System' . Education: 1937. 1966. 1995 In 1937 the repon reviews the historical research of Rochdale's practice of this principle and discovers that many of those surveyed were not financially supporting education as Rochdale had. Despite the discrepancy with the Rochdale tradition. the Committee offers no indication whether this is acceptable or not - there is simply no discussion. It designated education 'an important but not essential pnnciple'. It is worth noting that it is only the 'essential' principles which are used as criteria for membership in the ICA. If the

Committee had classified education as an 'essential' principle. a significant percentage of the membership would have failed to meet the ICA'S basic ctiteria for membership. The 1937 discussion fails to demonstrate the characteristics of any of the phases.

The 1966 report's treatment of the education principle demonstrates charactenstics of both the 'Movernent' and 'Systems' phases. The discussion of this principle is characterised by the same ideological zeal that pervades most of this repon. The report acknowledges the growth of ever larger conglomerate forms and suggests that education of leaders be used to manage and maintain the Movement's gains. This would suggest both the 'Movernent' and

'System' phases. The report's suggestion of establishing a Co- operative Institute also combines characteristics of the 'Movement' and 'Systems' stages. This institute would help to correct some of the non-ideological approaches of the management (thus 'System') but it will also enable further growth (thus 'Movement'). There is an attempt to clariQ the spirit of the principle of education in the 1995 review. It is not trying to correct any impression left by the 1966 report but instead focuses on the pnctices that have been cmied on in the name of education. which might better be categonsed as public relations andor marketing. It is prescriptive. in that it argues for a special focus on 'opinion leaders and young peoplew. who have been previously overlooked.

The report says that if CO-operatives are to play the role of which they are capable. then opinion leaders and young people must be educated. The report talks about the potcntial of CO-operatives,but it is no longer assumed that they will naturally redise their potential. It is categorised as 'System' .

The overall progression of the Principle of 'Education' in terms of the utopian. movement, system continuum is from 'Other' in 1937. to 'Movemeat / System' in 1966. to 'System' in 1995. 1O8 Summary d the Gmtent Analgais d the ICA'SStatements of 'the Coqmative Rinciples'

5-1 h: Principle of Education

-- - - "Promotion of "the Piomdid fiom the beginning Once again the 1 937 report Edumtion" undertake definite educational work offdlittle or no discussion amongst the members, organkâ in of the principle: it simply theù interest and financed fiom th& stated the rule and pnctice of *desigoated ao Fiinds.... one of the objects the Rochâale and report4 what important bat founders... had in view ...was to raise the contempomy practice was. not es!Bentiril the people to a higher level by There was no discussion of the priacipie educating th...the maintenance of the ideological bais for the principle is essential, and that regular principle. allocations kom the 'net surplus' of the It doesn't demonstrate any of societies should provide the rneans of the characteristics of the promoting education s hould provide the Utopian. Movement or means of promoting ducation in tbose systm stages. matters which specially interest Co- Categorize as 'Other'. operators as ai& to the reaiization of their ideals (ICA Report of the Proceedings of the 14" Congras of the ICA 1934: 147- 149) 1O9 Summaq of the Content Analysis of the ICA'SStatements of 'the Cwperative Principles'

5-1 h: Principle of Education

Priacide of Education

*AI1 D "Cwperation requirw of those who The 1966 discussion of this operative would practice it effectively the principle is marked by an POCiQties icceptance of new ideas, new standards ideological zea 1 - educat ion ~bodumb 3f conducf new habits of thought and ~re-eciucationwas seen as part pmviai br whaviour, based on the supetior values ~f the battle plan for the goal tbe educatioa af ceoperative association.... of conversion. of tbeir ducation needs to be defined in a very This is another example mmben, broad sense... All persons engaged in where a principle is taken to odiecm and C~petationneed to participate in this higber level of abstraction, empioyees and procss of ducation and re- where the principle is of tkgeeed education... intqreted in a brmder sense pubüc, in the The battle for ttie acceptance of cc+ than it had been previously. priacipies and operative ideas has to be fought in the The report acknowledged the techniques of intellectual, as well as the economic growth of ever larger aboperntion, field.. .. the movements educational conglomerate forrns. Their botb ecommic standards mut be constantly rising if concern about how to manage ad they are to match those of the outside this gtowth effectively and democratic." world ... the co-op uni& are getting their suggestion that education bigger and more complex dong with be used to this end, are other organizationai fomand characteristics of the systm educat ion of membets, oficers, stage. The focus on educating employees and potential rnernbers is 'leaders' (IE. managers) is a critical for maintaining this growth." recognition of the problems suggests that an international CO- presented by the rise of the operat ive ducational institute be managerial class and kirnon- fod... ideological approach. This is "such an institute ..is needed to also indicative of the 'Systems' produce leaders capab le of phase. Hcwever, the idea and spearkading the accelerated goals for the institute developrnent of cwperation on the ernphasize constant growth - international level now within the men conversion which is the Movement's reach. The time has gone primary characteristic of the for small beginnings.."(IC A. 'Movement' phase Consideration of the Cwperative Categorize as Principles, Section 11, 1966:%-9/lO) 'Movement/S y stem' 110 Summaq of the Content Analysis of the ICA'SStatemenni of 'the Ceoperative kiples' 5-1 h: Principle of Education

Education, "Education means more than just In its discussion of this Troibing ad distributing information or encouraging principle, the 1995 report tned IntOrIMtioa: patronage; it means engaging the min& to clarifj not only what Cooperatives of members, elected leaders, managers. education is, but also what it provide and employees to comprehend fùlly the isn't. In an attempt to capture educrition and complexity and richness of CO- the spirit of the principle the training for operative thought ad report distinguished the tbeir action. .. Education and training... should principle of education from members, be conducted in such a way Wt they basic marketing and public ekcîed continuously assess the activities of the relations techniques. This representative co-operative and suggest ways to report argued that education S, umnagem improve operations or to provide new could and should be used to adernpîoym services... The principle ends by supplement democracy as a so they am recognizing t hat co-operat ives have a means of member participation contribute panicular responsibility to inform and control. They saw effedively to young people and opinion leaders (for ducation as an opportunity for tbe example politicians. pub1 ic servants, the staff and board to get developmeat media representatives. and educators) feedback fiom members. It is of tbeir * about the 'nature and benefits' of CO- clear in the discussion of this operatives operation. If cosperatives are to play principle that the issue of They inform the roles of which they are capable in member participation and the gemd the future, it is a responsibility that will member control were setious public - have to be better met. People will not concem. There was an particularly appreciate, they will not support. what attempt to manage the YOPns people they do not understand." growth/success of the and opinion (ICA, Background Paper to the movement through leaâe~about Statement on the Cwperative Identity, reinterpretation & application the nature and 1995:15/17). of this principle. beaefits of cck The tone was less ideological 0pecotio~~ than in 1966. The report talked about if co-operatives reach rather than when. This is a significant shift fiom the predetennined destiny of complete conversion that characterized the movement phase. Categorize as 'System' Co-o~eration among Co-o~eratives: 1966. 1995

This principle is first mentioned in the 1966 report. The report argues that it is a 'natural extension of the CO-operative idea of association for mutual benefit" and that this is where the

Movement's growth will be. It encourages the growth of secondary organisations from the local to regional to national and international levels suggesting that they can take on the world36. The 1966 presentation of this principle is categorised as fitting the 'Movement' phase.

In the 1995 statement of Co-operation among Co-operatives argues that CO-operatives need to work collaboratively to maximise their impact and to 'try to achieve their full potentialw (ICA. 1995).

It argues that secondary CO-ops are the focus in order that co- operatives can 'maximise their impact". This focus on the continued growth of ever larger conglomerant forms places the 1995 discussion of this principle within the 'Systems' stage.

Both discussions. by nature, focus on the growth of secondary

CO-operatives. or in the words of Melnyk, 'ever larger conglomerate forms" but their tones are very different. In 1966 the message is

36 Therr is every reason of principle and practical advantage why the Co- operative Movement shouId break through the material and mental barriers of conventional natiunalism into a new era of international CO-operation (ICA. 1966). that secondary CO-operatives are important areas of growth which will play a key role in the attack we are mounting on the world's economic systems. In 1995 the report says. if CO-operatives are io

*maximise their impact' (ICA, 1995). then they must focus on international growth. Summary of the Content Analpis of the ICA'SStatements of 'the &-operative Principles'

Ouotatbas hmtbe Remris

------.- - "GU ab "...the Commission would point out The birth of 'co-operation operative that this cmperation of the second among co-operatives' as an organizatinu!3 degree is playing in the Cwperative oficial principle was rnarked in order to Movement today, and is destined to by an ideological zal that best serve the play in the fùture. a much more bordered on dogmatism. interest of important role than hitherto. It The Commission was tbeir memben represents. of course. no more than a convinced that by continuing adtbeir natural and beneficial extension of the the principle of association to communities tùndamental c~perativeidea of ever higher levels, cwperation sbould active association for mutual could bring in a "new era of mperate În benefi t.. .Ssondary organizat ions. if international co=operation" every precticril they operate at first on a district or and successfully challenge "rhe way with regional basis eventuatly grow or monopo 1ies". 1t was ardent ly other tm coalesce into national ideological: its aim was operatives at organizations... there is every reason of nothing less than conversion of local, =ba principle and practical advantage why the wortd's economic system. and the CwptiveMovement should Through association, parts of internationai break througb the material and mental the movement would kek" barriers of conventionat nationaiism eventually equat the whole. into a new era of international Categorize as 'Movement'. cooperation.... It needs only to concentrate its power in large organilational units by applying consistently without restriction. tiom the local to the international place. the principle of cw operation among cwperatives. to make its greatness manifest and to act successfully against the monopolies.(ICk Recornmendations and Conclusions, l966:34/5)

Concern for Communitv: 1966. 1995

This principle is first officially listed in 1995. However. in 1966 the phrase 'in order to best serve the interest of their members and their comrnunities" is included in the pnnciple of Co- operation Among Co-operatives. In addition. the report maintains that CO-operatives' goal is more than the promotion of individual interests. but also to promote the progress and welfare of humanity. The 1995 review places a greater emphasis on the interests of the membership. 'Co-operatives are organisations that exist primarily for the benefit of their membersW. The interest in, and concem for. community is an outgrowth of this focus. Members belong to a larger community. The report does not prescribe the level or quality of involvement. simply stating that it is the memben who decide how and to what depth the CO-operative should be involved with community. The report only States that 'it is not..a responsibility that members should seek to avoid."(ICA. 1995) This discussion of the principle of 'Coacern for Community' is categonsed as 'System'. The overall progression of the principle of 'Concern for

Community' in terms of the utopian. movement. system continuum is:

1937 - (not listed): 1966 -'Movement' (not listed); 1995 - 'System'. The discussions progress from the idea of a CO-operative as community, to the idea that CO-operative communities corne together to form a world-wide community (CO-operative commonwealth), to

CO-operatives should be concemed about community because their members are part of the larger community. Summaq of the Gmtent Analpis of the ICA'SStatements of 'the Cooperative hiples'

54: Principle of Cwperation Among Caqwatives

See the statement of Principle for Ce Community was inherent in operation arnong cwperatives the utopian notion of Co- "...serve the interests of members and operation - it was to be a Co- their community" operative village. However, "the cGmmon element at al1 times has the growth of Cosperation in been that Cwperation at its best aims the form of single interest, at something beyond the promotion of single focus organisations has the interest of the individual members resulted in a shift away fiom a who compose a cwperative at any focus on the community. Here time. Its object is mther COpromote the the 1966 Commission includd progres and welfare of hurnanity. It is a reference to the interest of this aim that rnakes a cc~operative the community in the principle socirty somcthing different from an of Cwperation among Co- ordinary economic enterprise and operatives The discussion's justifies its being tested ... fiom the tone is idealistic, and the stated standpoint of iîs contribution to the aim of Cwperation "to moral and social values which elevate promote the progress and hurnan life above the rnereiy material welfare of humanity" are both and anirnal."(ICA, Introduction. characteristic of the 1966:8/8) 'Movement ' phase. Categorize as 'Movement*. Summiuy of the Cairent Analysis of the ICA'SStatements of 'the Co-operative PrUiciples'

5-1 i: Principle of Cwpention Among Cwperatives

Ouotatiom hmtbe Reports

Coacern for '~~tivesare organizations that In 1995, the Principle of Commmiiy: exist primady for the benefit of their 'Concm for Community' was Co-apentives mem bers. Because of th is strong officially listed as me of the work for association with mem bers, often in a seven Rinciples of C-tim. sustaiaabk specific geograph ic space, aqmatives But the 1995 rw's apprœch developnwst of are also often closely tied to their to the 'Concern for Community' tbeir communities. They have a special is msiderably les ideological communitiu resporisibility to ensure that the than in 1966. The 1966 report thrqh policies development of their communities - saw as its goal the betterrnent of apprdby momically, socially, and cuiturally - is humanity and as an extension of tbeir sustained. They have a responsibility to this, were ccmcemed about the ~mbelY.- work steadily for the environmental interest of the cornmunity at protection of those communities. It is up large. In 1995, this general to the mernb to decide how deep and in abstract cmcern for comniunity what specific ways a cc~operativeshould had diminished and its rnake its contributions to their importance becarne an extension community. It is not. however. a of the importance of the resporisibility that members should se& to membership - the mernbers avoid."(lCA. Background Paper to the belmg to the mmunity, Statement on the Ceopmative identity, thetefore Co-aperatives should be 1995:16/17) mcerned about that community. There was a shi fl fiom the utqian view of ccqmative as comrnunity in smôryo, to community focus as means to the further gowth and betterment of humanity, to, coqeratives should care about the community because their members betmg. Rather than members king em bedded in cunmunity - mrnunity is induded because mern bers are em bedded. Categorize as 'System'. A Discussion of the ICA Reviews of the Co-oprative Princi~lesbv Year

1937 The narrow and limited focus of the Special Committee's work resulted in reports which were business-like. even matter-of-fact.

Both the 1934 and 1937 reports have the tone of a dry. intemal policy document rather than the tone one would associate with a statement of doctrine. Even in the final stage of their review of each principle. namely the presentation of the 'accepted' interpretation of the Principles. the Cornmittee was very brief in its discussion. The tone of both documents is decidedly non-ideological. The reports stated the principles. demonstrated their historical basis. summarised how the principles were interpreted and applied. and in a few instances offered very brief assessments of whether the practices met the Committee's interpretation of the principle. In some ways this report can be seen as an early policy document for the ICA itself. The report makes a distinction amongst the principles, labelling some 'essential' and others 'important'; the former. it States, are to be used for criteria for membenhip in the

ICA. In this way it can have been viewed as an attempt to clari@ the doctrine of the Co-operative Movement. and of the ICA itsetf.

The 1937 Statement of Co-operative Principles does not demonstrate any of the characteristics of the Utopian phase. As previously mentioned. George Melnyk's work suggests that the Utopian. Movement and Systems phases exist on both a macro and micro level. On a macro level. 'Co-operation'. as a form. had progressed beyond the goal of small. insular agrarian villages by

1937. On the micro level. the progression cm be used to understand the development of individual CO-operative organisations. At the outset. 1 thought that the International Co-operative Alliance's first review of the principles would demonstrate the characteristics of the

Utopian phase. However. it did not. While most of the principles exhibiied some characteristics of the Movement phase it was insufficient to classifi it as such. By 1937 The International Co-operative Alliance was over forty-two years old and was well established as an organisation.

While the ICA had not formally declared and detailed a CO-operative doctrine. they had officially relied on the Rochdale Rinciples as their precept. As previously mentioned, the Society of the Rochdale Pioneers was the watershed which divided the history of 'Co- operation'. While Rochdale was utopian at its outset, its principles and practices formed a successful mode1 for CO-operative development which lead to the Movement phase. The centraiity of the 'Rochdale Principles' to the 1937 review might lead one to an alternate hypothesis, that the 1937 report would demonstrate the characteristics of the Movement phase. To a limited degree this is true. a number of the principles do exhibit some of the characteristics of the movement phase but these characteristics, with exception of the principle of cash trading. are insufficient to determine the classification. The 1937 report's approach to the principles of 'Membership', 'Democracy'. 'Distribution of Surplus', 'Limited Interest on Capital*.

' Political and Reiigious Neutrality *, and 'Education' have al1 been categorised as 'Other'. The 1937 report does not fit within the

Utopian phase. This is probably the result of the fact that one of the very characteristics of the Utopian phase is its experimentd nature.

By definition there can be no accepted doctrine or mode1 of the

Utopian phase. By the time the ICA is established in 1895, CO- operatives themselves had progressed to the Movement phase of their history. As a result, it would be unlikely that the expressed doctrine of an international organisation would be utopian in nature.

However, it is surprising that this first expression of the principles is not more ideological. -1966 The difference in tone between the 1966 and 1937 reviews of the principles is like night and day. While the 1937 report was factual. sober and unadomed. and had an almost disinterested tone, the 1966 report was passionate and sublimely ideologicd. There is no doubt that some of the differences in the 1937 and 1966 reviews of the priaciples can be attributed to the dramatically different mandates each were given. However, this does not account for the intense and unwavering ideological tone that pervades the 1966 review. While the 1937 report is a careful articulation of the historical basis for the 'CO-operative doctrine', the 1966 report is the manifesto for the Movement.

The 1966 report's statement and discussion of the pnnciples of

'Membenhip', 'Democracy', 'Distribution of Surplus', and 'Political &

Reiigious Neutrality' al1 display the characteristics of the Movement phase and are categorised as such. In addition the 1966 repon's treatment of the new principle of 'Co-operation Among Co- operatives' also manifests the properties of the Movement phase. While the principle of 'Concem for Community' was not listed as a separate principle until 1995. a pertinent statement, included in the principle of 'Co-operation among Co-operatives', embodies the attributes of the Movement or Rochdale phase. Tiie report's presentation and discussion of the principles of

'Limited Interest on Capital'. and 'Education' exhibit some traits of both the Movement and Systems stages and as a result have been jointly categorised.

The principle of 'Cash Trading'. which was the only principle in the 1937 report that embodied the characteristics of any of the three phases. is also the exceptional case in the 1966 Report. In this report the principle of 'Cash Trading' is the only principle which does not demonstrate any of the properties of the Movement phase - it only exhibits the features of the Systems stage. 'Cash Trading' is the first principle to progress through the Movement phase and on to the

Systems phase. It is interesting to note that as the principle embodies the features of the Systems stage. it loses its position as an officia1 CO-operative principle. While a number of the principles in the 1966 review demonstrate some characteristics of both the

Movement and Systems phases, and still others are solely categorised as the systems phase. the report taken as an aggregate epitomises the very spirit of the Movement phase. It is thoroughly and ardently ideological. it is proselytising, it is issuing a rallying cry - calling Co- operation into battle with the econornic system. It is aiming for nothing less than the total conversion of the economic system. The findings demonstrate that the 1966 report can be categorised in the 'Movement' phase. 1995

While the official phrasing of the principles does not vary significantly from 1966 to 1995. each report's approach to. and discussion of the individual principles and their overall tone are dramatically di fferent. The 1995 Report is dramatically less ideological in its tone than the 1966 report. It has scaled back its vision for the future of Co-operation. Rather than talking in terms of Co-operation's destiny. the repon spoke about its 'promise'. The repon retreated from the belief that economic democracy would replace al1 other economic systems, to a belief that Co-operation holds the promise of retaining and expanding its position as a third sector of the economy. The report also recognised some of the

limitations of Co-operation and in this way it stripped away some of the myths of Co-operation's power that had developed dwing the Movement phase.

In the 1995 report the principles of 'Membership'. 'Democracy ',

'Education', 'Co-operation Among Co-operatives' and 'Concern for

Community' al1 embody the features of the systems stage. The properties of the Systems stages are also evidenced in the report's treatment of the distribution of surplus, in the principle of 'Member

Economic Participation'. In fact it is only the principle of 'limited interest on capital' (also part of the larger 'Member Economic

Participation' principle) which failed to demonstrate the attributes of the Systems phase. 'Limited Interest on capital' can not be categorised by any of the three phases. An analysis of both the 1995 report's treatment of the individual principles, and the report in its aggregate. support the hypothesis that it fits within the 'Systems' phase. 126

Chapter Six Conclusion

George Melnyk (1986) has argued that co-operatives have moved from being organisations of social transformation to organisations which are focused on ensuring their own survival. The

Utopian. Movement. and Systems phases mark different stages in this transformation. This thesis asked whether or not the ideology of the Co-operative movement. as expressed by ICA's three successive revisions of 'the Co-operative Rinciples'. follows this same trajectory . While 'the Co-operative Principles' are not in and of themselves an ideology" the ideology can be seen through the reports' treatment of the principles.

Summarv of the Direct Findine

An analysis of the manifest meaning of the ICA's three successive reviews demonstrated that the development of 'the Co- operative Pnnciples' follow the same pattern that Melnyk found in the practice of Co-operation. That is, the principles moved from being rules of conduct for social transformation to rules of conduct for organisational survivai.

- 37 For the purposes of this study 1 have defined ideology as a system of ideas undcrlying or informing social and political action. Generally speaking. the principles as expressed in the ICA's

1937 statement demoiistrated some characteristics of the Movement phase but not sufficient to classify them as Movement. For wani of a better term I have classified them as 'Other'. However. the fact that the principles were drawn from the ~atershed~~between the

Utopian and Movement phases. and exhibit some charactenstics of the Movement phase. helped to place them in the overall progression of the principles from 1937 to 1995.

Taken as a whole, the pnnciples as expressed in the ICA's 1966 statement demonstrate the charactefistics of the Movement phase.

Two of the principles also exhibit some characteristics of the Systems phase. while a third. the principle of cash trading, demonstrates only

Systems characteristics. The principles expressed in the 1966 statemeni. though classified 'Movernent'. have begun to show the shift towards the organisational imperative that drives the Systems stage.

Generally speaking, the pnnciples as expressed in the ICA's

1995 statement demonstrate the characteristics of the Systems phase and are classified are classified as such. An initial reading of this

- - 38 The ICA had, hm its begiming. relied on the Rochdale mode1 of Co- operation, which was the modd that allowed Co-operation to grow hto the Muvernent phase. Becausr this mode1 represents the begimings of the phase, it is not surprising that the ICA's represeatation of the mode1 exhibits oaly some of the chmcteristics of the Movement phase. report might lead one to think that the ICA is trying to recapture an earlier spirit of Co-operation. For example, a new principle. 'Concem for Community', appears to reinstitute an idea that was fundamental to social transformation but closer inspection reveals that it functions to ensure organisational survival. So we see that 'the Co-operative

Principles', as expressed by the ICA in 1937, 1966 and 1995, have followed the progression which Melnyk described as occumng in organisational practice.

Summary of the Second- Analvsis

The ICA'S reports discuss the debates and concems which arme. dunng the consultation process with the ICA membership, on particular principles. This is followed with an explanation of the

Committee's (or Commission's) rationale for revising or eliminating existing pnnciples, or adding new ones. A secondary analysis of this material in each report reveals the current interpretation and its intended purpose at that point in time. When the ideas and purposes of each expression of the individual principles are revealed. we cm see that the ideas behind them have changed from one report to the next.

In fact. the ideas that drive the rationale for and application of the principles change and follow this shift, from ideas of social transformation to those of organisational survival. For example. in 1937, the idea that drove the ptinciple of cash trading was that credit was oppressive to individuals, and offering it might threaten the well-being of the collective. In 1966 the principle is dropped, with the rationale that in order to survive Co-operatives must adopt the standard practices of the market. No mention is even made about their previous concem of the oppressive nature of credit to the members. Organisational survival eclipsed the belief that credit was a 'social evil'.

The principle of political and religious neutrality begins as a means to ensure unity among the different radical sects that composed the membership so they can focus on the common cause. in 1937 the idea behind the principie is that Co-operatives should be autonomous from the state and not politically active beyond their immediate and limited concems. In 1966 the principle of political and religious neutrality is rejected because of its connotation of passivity, but the ICA still maintains that participation in the politicai realm should be limited to that which is directly relevant to the practice of Co-operation. The goal shifis fmm unity of various sects of the left in order to bring about social transfimnation to a narrow, limited participation in the political realm to ensure organisational needs and survival. The education ptinciple first emerged as a means to elevate the working class in order to empwer them 'to build a new social order'.

By the 1937 articulation of this principle, the idea has narrowed; education focused on the 'specific interests of Co-operation". In 1966 the purpose of the education principle became a means of insuring growth and stability. Education was now a means for the recruitment of members and training of staff. While education is listed as a principle in 1995. it is but a sheil. 'Education should be conducted in such a way that they [members] continuously assess the activities of the CO-operative and suggest ways to improve operations or to provide new services (ICA, 1995:2/17)." The education principle has moved ftom a being a means toward a new social order to functioning as a means for the assessment of organisational performance.

The ideas which have driven the various applications of the principles of distribution of surplus, democracy. and coacem for community also shift from an ideology of social transformation to that of organisational survival. ure

Let us now tum to the question of what the relevant Iiterature has to contribute to this study. In rny literature review there were three different categories of literature on Co-operation, in which the principles were a recumng theme. The movement literature is. in essence, a dialogue about what should happen with 'the Co-operative Rinciples'. In attempting to achieve a balance between the desire to remain true to the principles. and the pull to alter them so as to enhance the practice of Co-operation, the movement unknowingly reinterprets the purpose of the principles.

In Co-operurive Principles Today and Tomorrow Watkins

(1986) asks 'what are the ideas behind the Co-operative Principles?'

He undenook this project in order to provide clarity of the purpose of Co-operation for the movement. He conducted a historical analysis of the ideas that informed the principles when they were first created. He succeeds in developing a clear picture of original

ideology of Co-operation, but then mistakenly assumes thrt the

ideology of the modem movement is more or less consistent with the original ideology. My analysis of the ICA'S three successive

statements of 'the Co-operative Rinciples' illustrates that the ideas bebind the principles have changed and that they are radically different from the original ideology . The way in which empirical studies have examined CO-ops as democratic organisations has changed. They moved from looking at CO-ops as democratic organisations generaily, to examining issues of member participation, and most recently to issues of member control. 1 suggest that these shifis in the way researchers have examined democracy within CO-operatives has been shaped by the rnovement's changing interpretation of democracy (Democratic member control was originally a means towards social transformation; by the 1966 statement of principles. member control was an end in itself.)

Ernpirical research which appears to look at whether CO- operatives are tools for social change are, in fact. assessing whether

CO-operatives are effective in helping people who are traditionally

marginalised in the market economy cope within that same system.

The question of whether CO-operatives are effective in msforming the social and economic system, which marginalises and exploits these people. is lost. Historical literature on the development of Co-operative thought has generaily given the reader a synopsis of the work or writing of various Co-operative thinkers throughout history. These histories show us the development of absmct, philosophical thinking on Co-operatioa, not collective expressions of the Co-operative ideology which bas informed the practice of the rnovement over time. As a result this literature fails to ask how the principles, and the collective ideology of the movement, have developed over time.

As a result we are unable to see if the ideology of the collective is consistent with that of Co-operative thinkers, and whether it is consistent with the rhetoric of the movement.

Tbough Co-operative principles and, to a lesser degree, ideology are a focus of much of the Co-operative literature, there are limitations in the way these have been approached. The movement literature fails to recognise the nature of the shift in 'the Co- operative Principles' fiom their original goals of social transformation to their preseat organisational imperative. Ernpirical literature, with its focus on social policy research, is similarly unable to see the shift. The historical literature, focusing on individual thinken, also fails to examine the trajectory. An important exception to this literature is the work of George Melnyk (1986) who demonstrates that CO- operatives undergo three phases during this shift. wnificance of the Studv

This study of the ICA expression of 'the Co-operative Rinciples' is significant or interesting for at least two reasons. First, the fact that the practice. principles and ideology of Co-operation al1 demonstrate a shift, from the movement's original goal of social transformation towards organisational survival39, is interesting because Co-operation has retained the rhetoric that it is a movement for social transformation. The movement still communicates the message that co- operatives are community based organisations which offer significant and meaningful alternatives in the economy, while simultaneously combating and chatlenging capitalism; and that it is a powerful agent in sbaping the course of the economy. This rhetoric exists in interna1 CO-operative communication and in its presentation to the general public. mis is exemplified by the television advertising campaign of

Co-op Atlantic. In one of these ads40 . as a large fish is being chased by a school of small fish in shape of an evea larger fish, an announcer urges people to join their local CO-operative, saying that togethet we can challenge big business while creating a community oriented service.

39 Outside the rralm of CO-opcratives, social researchers have recognised that there is a tendency for the original goals of an organisations to be cclipsed by issues of organisational survivat. This tendency has been found in both businesses and non-profit organisations, so it is not surprising that similar transformations have occuned in CO-operative organisations. 40 This Co-op Atlantic ad nn on Global affiiiated, and CBC TV sîations for well over a year in the mid 1990s. A number of other ads, with diffetent approacbes with the same message aued at the same time. Second. the International Co-operative Alliance offers an excellent opportunity to examine the changing principles and ideology of a social movement. Ideas play a central role in the emergence and development of social movements. However, social movement theotists have recognised that it is very difficult to examine the development and dissemination of ideas, and their impact on social movements. The Co-operative movement is unique because it has an international association which assembles penodically in order to discuss, and reach new agreements on, the movement's operating principles.

My research has made more transparent the way in which the guiding ideas of the Co-operative movernent have changed. This study has examined the development of the principles and the ideas over tirne. laying the initial ground work for future studies to look at the dissemination of those ideas or their impact on the movement. Directions For Future Research My findings lead me to two different possible directions for future research: a deeper analysis of the Co-operative movement and, an exploration of these issues in 0th- social movements. Future studies might examine how Co-operation has maintaineci the illusion that it is a Location for social transformation. given the present state of its principles and its status as a sector of the economy. One might also examine the hinction or purpose of this rhetoric. 1s there a relationship between the rhetoric and the beliefs or ideology of individual members? Does the rhetoric transform people's ideology? Do members joia believing and spouting the rhetoric and then slowly become practical? Do individuals join for reasons of self-interest and then begin to spout the rhetoric? This study suggested that there is a disjuncture between the

Co-operative practice, princi ples and ideology of the movement and its expressed rhetoric. This might lead to an examination of the environmental rnovement, where there is now a debate about whether or not there is a disjuncture between the rhetotic and the actions of the movement's organisations. This might reveal something about the how the rhetoric and the actions diverge and the purpose of maintaining the rhetoric.

Figure 4-1 :Characteristics of the Utopian, Movement and Systems Pbases

'Movemeat' or 'Rochdale'

.. . ------Coilperative Village or Ccwperative C-tive Sector Cornmunity Commonwealth (Gml: Coexistence within larger (Goal: Opring out of (Goal: Conversion of the emomic system - at best an attempt to modern life and returning entire momicsystem.) offer a people-cmtrolled ratfier than to a srnail agrarian capital-mtrolld alternative-) comrnunity is seen as the solution to societies ills.) 'Lefi anarchist' approach 'Socialist' goals with a More ideologically neutral- Cmpentivcs which is more fkirly hi& degree of cœxist within the larger economic system decentralized than centralization. (what ever that may be). contemporary ideas of socialism. 'Association' 'Enterprise' (gives way to. ..)

Whole greater than the Smof parts will eventually Ccwqmatives connect with ottier ce surn of parts (viilage rn ust qua1 the whoie (build al1 operatives and non-coqmative be begun as a whole) the btocks or units then organizations (inciuding private sector assern ble them ) businesses) to complete the whoie. There is some recognition that these associatims rnay mdce it difficult for CO- operatives to achieve their goals. At the same time goals begin to shift toward that of mainstream oraanizations. ------Community is seen as Specidization and arsh Single-function. single-interest is maintaineci. indivisible whole. Cc+ eamomy bcc;unr: the nom. operatives serve multiple Compartmentalizatim and tünaions. Thcre is no spezialization wcre a retlectiori distinction bcnvcm credit. of ttic evo1u:ion of indusmd housing. produam'. & Society. wnsumsrs' coqmuives (Single thdion amp. single The? wcre JI part of the same interesL) unit. (biuiti-tiinction. multi- interest)

A numk of rutempts and C011pt:ntivcs take hold in a Growth of C+opmation is primarily trsvictrd cxtmcly high hilurc rates. gr- variety ofareas. Thm is to reproducing rver largrr mglometatr forms. T)iere is no ;rgrd modcl for sprctanilar expansion and the (hdaryand tmiary coqmatives.) It is utopian communities - they establishment of the D oniy in devcloping oountrics that gras mots arc cxpririmcntd by nature. oprative modeVsystm. a~opsare growing. No mdel or agrd schema smrrges

Group production md Rorhddc mode1 dtowed individual production and awisumption is c;owumption, maintenance of individu1 rnaincaind. [t wuld bc ygud ihot group wnswnption and produdon protection and powcr is ciec~asing. with group proieaion and pwer.

- -- The id~is to rrtuni COan lnnovativc and vwsuccesstùl Rcsuictd in its ribility to innovace - it fbllows arlier modcl of @an in its approacti to delivering the lead of capitalkt organisations. This Id wrnrnunity. services. (Cwpcmives mle cospentivcs to fil they are in cornpetition in the 'distribution revoiution' with opitalist organisations mther than is an excellent exampie of this) dtmativcs to them.

Rmwitmcnt and proscltysing Proseltysing is pasive -thy mis& but it is tausçd on a are uying to 'win the wwld'. is vying to manage its success and the goal of vec small nurnber of people Conversion of the mnomic aw?tistrrict: replaces the gml ofcwiversion, int~rrstdin 3 radid sptem is the goai. Cwpcmivo are led by 'rnana2erial dus dtmûtivc. whose point of viw is ami-idmiogid. Figure 5-2: The Progression of the Priaciples

. . Membenbip l 'Otber' 'Movement' 'System' Democracy 'Otber' 'Movemen t' 'System'

'Other' 'Movement' 'System'

- - 4 Limited Interest on 'Movement 1 'Otber' Capital System '

Cash Trading 'System ' NIA (principb was (not listed) dropped) Political and Religious 'Other' 'Movement' NIA Neutrality (principle was (not listed) droppd) -- - Au tonomy NIA NIA 'System ' (not listed) (not listed) Education 'Other' 'Movement 1 'System ' System ' Coopemtion among NIA 'Movement' 'Systern' Coope ratives (not listed)

Concem for Community NIA 'Movemea t' bSystem' (mot listed) (included as (listed part of CO- separately for opention tbe first time) Among Co- openitivclr) 141 Figure 54: Structure of Each ICA Report

Materia Rie Resent Application of the Report of the [CA -.mtive Principles for 1s that Rochdale Principles. Report of Commission on Co- he 21* Cenhvy, 1995 were the S&al Cornmittee 1934 & operative Rinciples used The Principles of Cwmeration, [1937)

- -- -- Slrrictiu I - The Questionnaire I - Introduction I - Ceoperative Rinciples e of tbe il - What are the Principles of -Meeting Composition ?or the 2 1* Century/ Report Roch da1e? & Procedure. Introduction or -Open Mmbershi p -Terms of Reference, 1 - Staternent on the CO- Reports -ûemûcratic Control -historical background pxative ldentity -Dividend on Purchse -Cornmission's Analysis Defin it ion -Limitai Interest on Capital and Approach, .Values -Political and Religious -Principles, their Principles Neutrality definition and relation Voluntary and Open -Cash Trading to C-. objectives and rnmbership, Dernomtic -Education. ldeals MemkControI, Member (Research, Presat Application II - Consideration of the Econom ic Participation, and Conclusion for each of the Ceoperative Rinciples Autonomy & Principles) -Mmbersh ip Independence, Educatim, m - Other Basic Principle of -Dernomtic Training & Infmatim, Ceoperation not Expressly Administration Coqxmtiori among Ce Included in the Rochdale Rules -Interest on Capital qxratives. Conclusions -Disposal of Surplus Concern fot Community -Politics and Religion Uï - Background Paper to -Business Practices the Statement on the -Education. Cmperative ldentity In - Recommenâatims IV - Declaration Towards & Conclusions the 2 1* Century

------Notes: The texts of the1934 and 1937 There was an intermediary Reports overlap a great deal. step in review that took The primary differences are: place in the 1990's. This 1) The 1934 Report reMews intmediary step produced historic.1 research of the its own publication - 'Co- Rochdale principles; 2) The operative Values in a 1937 Report provides more Changing World' infmation about the which was over x pages. application of the principles in non-ccmsumer ccqmatives.

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