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John Restakis (ch. 2 of Humanizing the Economy):

"Stages of Co-operation:

The co-operative model, and the movement more generally, has always been in a state of evolution, adapting and transforming according to the conditions and contexts in which it finds itself. In its first stage, lasting from 1817-1840, co-operation was at the heart of a visionary social impulse. Philosophers and activists struggled to develop the co-operative ideal of the good society and to put this ideal into practice. It was a period when many were persuaded that co-operation was the gateway to a new millennium, a kind of paradise on earth. To this end, hundreds of co-operative communities were established in a grand social experiment spanning countries and continents to discover a model for a just and humane society. Robert Owen was one of these pioneers and his own efforts to create a functioning co-operative community became the model for others that followed in the United Kingdom, France and other parts of Europe, and the United States. Most of these efforts failed.

The second stage of the movement was marked by a shift from the ideal to the pragmatic and by the successful application of the co-operative idea directly to the market by groups like the Rochdale Society of Pioneers. This was in the period between 1844 and the turn of the century. It was at this time that large segments of England’s working and artisan classes felt the impacts of the international commercial systems that were to form the first wave of a globalization process that has today become the dominant reality of world markets. Then, just as today, capital sought the cheapest means of producing goods through automation and by locating production in low cost areas, close to cheap labor and resources. The effect of this process on the textile industry in England was profound and the displacement of skilled weavers by machine production, along with the destruction of craft traditions, was the spark that ignited the start of the consumer co-op movement at Rochdale. Prior to World War I the Raiffeissen movement in Germany also took root, creating the co-operative credit societies that became a model for credit unions that spread around the globe.

The third stage of the movement was the period from World War I to the 1960s when the co-op model took root in countries the world over and expanded to fuel the creation of thousands of co-operatives in every sector of national economies. In the Netherlands and Scandinavia large sections of agriculture were transformed through co-operative forms of production that to this day maintain a major share of agricultural production. In France industrial worker co-operatives finally established a bridgehead in manufacturing and a sizeable consumer co-op movement also arose. In Italy the co-operative movement developed a unique capacity to bridge sectors and to transform the manner in which the mainstream capitalist economy functioned across entire regions of the country. It was at this time too that the credit unions, consumer co-ops and agricultural marketing co-operatives took root in the United States, English Canada, and Quebec.

In most countries, the consumer co-op remained the most influential form of the model, followed by agricultural co-ops, credit unions, and worker co-ops. As the co-operative movements grew, however, and the co-op form became more and more adapted to the market realities of specific industries, the original vision of a co-operative community and the creation of a co-operative commonwealth became marginalized by the main currents of co-operative development. Co-op success in practical terms seemed to come with the sacrifice of the unifying and comprehensive vision of co-operation as a medium for a just economy on a societal scale. In many places, co-operative culture and practice reflected more and more the conventional attitudes and practices of firms in the industries where co-operatives operated. Instead of challenging and changing mainstream practice, many co-ops ended up borrowing from it. The regeneration of co-operative culture inside these organizations was stifled by the termination of co-op education programs, a mainstay of co-operative principles. In many industrialized nations, the co-operative movement entered a phase of conservatism.

Thousands of co-operatives were also created in countries like the Ukraine, Poland and Hungary before state socialism extinguished their autonomy and usurped the co-op model for state purposes. With the rise of centralized socialism in the USSR, Eastern Europe, Asia and parts of Africa, co-operatives became the instrument of choice to implement state policies for production and economic development. Voluntary co-operation was replaced by mandated co-operation. And so it came about that centralized socialism became far more damaging to the integrity of the co-op idea and the realization of its potential than capitalism itself. To this day co-operatives in many of these countries signify little more in the minds of the populace than instruments of state coercion. It is a tragedy of economic and human misuse whose negative effects are still being felt.

During the 1960s and after, the dominance of the consumer co-operatives was being challenged by the ascendance of new co-op forms such as producer co-ops, and the vision of a new world order of a co-operative commonwealth was gradually receding. In Canada, a new openness to social intervention on the part of the state resulted in the creation of a co-op housing movement through the skillful and determined lobbying on the part of Canadian co-ops and their allies in the labour and social justice movements. The co-operative movement experienced a new wave of growth as popular attitudes in the West become more open to alternative ways of viewing and being in the world. The rise of the New Left rejected orthodox socialist ideas and pushed for the creation of more democratic and inclusive alternatives in politics, economics, culture and social life. National co-operative movements became more diverse. In Canada and the US co-ops sprung up like mushrooms to open the way to whole new industries in health food, organics and housing, and the original ideal of the co-operative community was recast in the form of communes, co-operative farms and the rise of the environmental movement. It was an era of experimentation and new divides opened up within the traditional co-operative movement that were both generational and attitudinal. At an institutional level, the lack of attention to new and emerging forms of the co-operative model slowed the development of co-operative theory and its relevance to changing times.

Beginning in the eighties a new stage emerged for the co-operative movement. It builds on the visionary roots of its founders, while moving beyond the industrial and retail models that had conditioned the growth of co-operatives as an alternative for the organization of enterprises. In the West, with the retreat of many governments from the support of public services that followed in the cost-cutting and privatization decades of the eighties and nineties, co-operatives arose to fill the gaps in human and social services. The provision of social care emerged as one of the fastest growing areas for new co-op development all across industrialized societies.

But the most significant feature of the current stage of the co-op movement’s evolution is the rediscovery and reinvention of co-operatives in developing countries, often as a direct response to the destabilizing effects of globalization. Today, the co-operative vision is contending at a global level with factors that in many ways mirror the conditions of the early co-operatives of newly industrialized England. Like then, a single worldview in the form of the free market doctrine has come to dominate both the theory and practice of economics and public policy. Like then, individuals, communities and entire nations are subjected to the narrow interests of tiny elites with catastrophic consequences to individual lives, the environment and the well-being of societies. And like then, the effects of globalization are forcing communities and nations to seek alternatives that can make the market work for the many, not just the few. With the global economy in crisis and the old financial order in disarray, with the free market idea in disrepute and with the corruption bred by the absence of democratic institutions in the political and the economic arenas, viable alternatives to the free market myth have never been more urgently needed than they are now."

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