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The idea of cooperative distribution has thus developed into a kind of thrift made easy, with this circumstance added, that most of the stores were started by more or less zealous social reformers, so that the propriety of allotting part of the annual dividend for purposes of common interest is usually admitted, and a special kind of public spirit fostered by the habit of handling large funds with a sense of collective ownership and responsibility. This Rochdale type of cooperation, as it may fairly be called, was developed by gradual and tentative processes. The original twenty-eight pioneers were for the most part Chartists or Socialists, and we may trace the record of the wide visions with which they started in a summary of the Objects and Rules' of the society published in 1854, ten years after its formation, containing the following clause: That, as soon as practicable, this society shall proceed to arrange the powers of production, distribution, education, and self-government, or, in other words, to establish a self-supporting home colony of united interests.' In this same year the society opened its first cotton mill; four years before it had started a corn mill; in 1853 a wholesale trading department was opened; in 1856 branch stores began to be opened (at the rate of two or three yearly) in new quarters of the town, and 2 per cent. was steadily voted off nett profits for educational purposes. The measure of success that was merited came, slowly perhaps, but in due course, and, to sum up the credit side of the account, the 'Co-operative News' reports the sales of distributive societies on the 'Rochdale plan' in England, Scotland, and Wales as amounting in 1881 to a total of 14,330,460l., and the net profits to 1,715,369l.

Proputty, proputty sticks, and proputty, proputty graws;

but the powers of production, distribution, education, and selfgovernment' are not yet quite finally arranged.

The pioneers aimed so high, and have actually achieved so much, that there can be no disrespect or ingratitude in noting how far and in what directions the pressure of circumstances and human frailty have led them to modify their original programme. The means of attaining a good end soon became exalted into an end in itself; the duty of a good cooperator was to be loyal to the store,' i.e. to deal with it to the full extent of his requirements; and the reductio ad absurdum of this theory of the virtues of consumption was reached in 1868, when it was for a short time actually proposed to pay interest to shareholders in proportion, not to their investments, but to their purchases. Of course, this vagary was short-lived, but we fall on the leaning side,' and so it may help to explain the intense preoccupation with the problems of consumption and thrift which made these excellent men blind and deaf to the true principles of cooperative production. Down to 1860 the Rochdale Co-operative Manufacturing Society adhered to its original programme of dividing profits amongst the members, giving an equal percentage to capital


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subscribed and labour performed. But the share list being open to the whole town, and not restricted to the workers, as the stores are to customers, many became shareholders who had less than no sympathy with the cooperative idea, and in 1862 the supporters of a mere joint-stock method outvoted the real cooperators, and the principle of bonus or bounty to labour was finally rejected. Most of the mills now successfully worked in Oldham under working-class management have followed the Rochdale precedent, and are only joint-stock companies, with a large number of small shareholders. By their help many of the operatives have raised themselves to the position of rentiers, or bourgeois, as they would be called in France, where such transformation has always been commoner than with us; but the result in both countries seems rather to be, to increase the numbers of the middle, than to improve the condition of the operative class.

The history of corn mills on the Rochdale pattern is less disappointing. The demand for flour in a large cooperative society is something fixed and calculable; it has been estimated that 1,000 families can't, 2,000 may, and 3,000 certainly will support a corn mill; while as a matter of principle there seems little difference between a society grinding its own corn, or its own coffee. The corn mill does not employ much more labour in proportion than the store itself, and its produce is likely to be bought impartially by all the members; it seems, therefore, not unreasonable that the society as a whole should appropriate the profits of the machinery it sets to work, though we cannot take such an extension of the store business as an equivalent for the original proposal of the pioneers to commence the manufacture of such articles as the society may determine upon, for the employment of such members as may be without employment, or who may be suffering in consequence of repeated reductions to their wages.'

This phase of so-called cooperative production is well worthy of attention. Over twenty corn mills, besides bread and biscuit works, and the manufacture of sweets, soap, shoes, and a few other articles, are now being carried on more or less under the direction and for the benefit of the members of cooperative stores. Advocates are even to be found who maintain this to be the true and highest type of cooperation. Dr. Watts, in his evidence before the Committee of the House of Commons, stated that many retail stores now employ workmen for manufacturing purposes, and that this course is likely to be extended. He explained that in the case of manufacture by the retail store, the profits go directly to increase the members' dividend on purchases, while in the case, also of frequent occurrence, where the manufacture is carried on by federated societies (i.e. by a company the shares of which are held by societies) the profits are first divided amongst the various stores according to the capital they have provided, and then pass to the members of each store as dividend on purchases. In other words, the profits gained by the judicious

employment of the labour of Leicester shoemakers are divided. amongst the largest consumers of grocery in Manchester, or elsewhere, as the rewards of thrift; and the Leicester shoemaker is expected to emancipate himself, if at all, by a corresponding process, which will make him, not his own employer, but (what has always passed for more profitable) the employer of somebody else.

It is easy for outsiders to see the unideal character of this arrangement, and there have always been, within the cooperative camp, a faithful few who have maintained that cooperative societies, in their character of employers, are wanting to their own principles unless they take their employers into partnership, by allotting a share of profits to labour. But well-meaning persons do not desert their principles without temptation. It is said, and no doubt honestly believed, that cooperative principles are as much endangered by competition amongst makers as by competition amongst sellers. It is a sound idea that the consumer ought to know his own wants, and be prepared to order and pay (cash) for what he wants. It is a fair calculation that the manufacturer who has an assured market for his goods can afford advantages to his customer like those given by the stores to their members and customers, and a store that is at once member and customer of a manufacturing society has, on cooperative principles, an undoubted right both to a share in its profits and to a bonus on purchases. But if cooperators are to banish selfishness and selfish competition from the realms of commerce, they must stop short here. There are only two parties to the transactions of a store that buys and sells, the shareholders and the consumers: the store exists for the benefit of the latter, who will cease to patronise it if they cease to benefit. Distributive societies on the Rochdale plan therefore content themselves with paying a moderate interest to capital and divide the mass of their shopkeeping profits among the frequenters of the shop; and societies of the Civil Service type have to adjust their prices so as to leave but a moderate margin of profit to the shareholders, under penalty of being deserted by their customers, who are bent upon being served as near as may be at cost price. There is thus far nothing that the fiercest Socialist could call exploitation of man by man or class by class-in the cooperative invention of bonus on purchases. The labour employed in distribution bears so small a proportion to the profits realised, that it seems scarcely worth while, or even possible, to allot the infinitesimal percentage which might represent the value of the salesman's


The case is very different when the stores enter as capitalists on the work of production-when they undertake to manufacture the goods they distribute. The reason is obvious. The profitableness of cooperative distribution comes from its abridging and simplifying a process which had grown unnecessarily long and indirect; the cooperators honestly earn all that they save by dealing at the store: they collect their own debts, do their own advertising, provide their

own capital, and run their own trade risks; they have, therefore, no one to contest their claim to the wages of distribution. It it were possible to abridge the processes of production to anything like the same extent, no doubt the economical result might be equally gratifying; but no economy is effected, or even attempted, by the mere substitution of a mass of shareholders for the one or more private capitalists who stand between the labourer and the purchaser of the fruits of labour; in fact, the private capitalist is the simpler, and so far the more economical, instrument of the two, for he undertakes himself the work of supervision, which the society must delegate to a paid agent. The cooperative store commits no legal or moral wrong in becoming a joint-stock company for certain specified purposes; it only ceases at that point to deserve any more of the sympathy and admiration which it commands as long as it aims at making commercial transactions subservient to the social welfare of those engaged in them.

Still it must be confessed that these pseudo-cooperative societies for production come nearer to rivalling the success of the associations for distribution than the majority of manufacturing firms that are really and truly cooperative. The fact is noteworthy, and the advocates of cooperative production would be wise to take a hint from it. Where cooperative associations of skilled workmen have failed to establish a successful business, the failure has come, nine times out of ten, not from their inability to do the work proposed, but from their failure to secure a sufficient supply of orders to keep skilled hands regularly employed in sufficient numbers to be profitable. The large capitalist spends part of his money in inducing people to deal with him; a group of associated workmen have no money to spare for this purpose and would not know how to use it if they had; the best mechanic is very likely the worst salesman, and in these days of competition the best work cannot be trusted to sell itself. The cooperative stores are sometimes reproached for not being better customers to the few independent productive societies in existence; but it is clearly unfair to expect the officers of a society established for one purpose to endanger that in the interests of another in which they are less immediately concerned. If private firms can supply all that the stores want, better, or cheaper, or more conveniently than any cooperative society, the society has no right to complain. Only let us remember how much enthusiasm and missionary zeal has been spent in providing the original body of customers who have made the success of every successful store. If productive cooperation is to succeed, the cooperators must learn, first of all, to provide a market for their goods; they must calculate, as the pioneers did about their corn mill, how much custom will enable the society to live, and not launch it until they have secured promises of the necessary minimum of support. If a cooperative society undertakes to manufacture some article in constant request at the stores, it should be able to reckon upon a fair trial. But there may be intelligent and

ambitious mechanics in trades appealing to other classes than those represented at the stores. If these mechanics are to succeed by force of skill with little capital behind it, they must either see their way clear to sell in the ordinary way of business, or they must bring together a little band of customers who consent, for the sake of inaugurating a social reform, to buy what they want through an unaccustomed channel. If this is done, the cooperative producer will be able to reward his customer with cheaper goods or a bonus on purchases, because in this case, as in that of the stores, the customer's goodwill represents a money saving, an economy of unproductive expenditure in puffing and touting; while if the customer is a store, the arrangement of the powers of production and distribution' will be pretty nearly complete.

Cooperators have no right to denounce the régime of competition while they accept as final the scale of prices fixed by competition which is often unscrupulous. When the stores or the wholesale society undertake to employ labour at its market price, and no more, they forget that this market price has been fixed, partly by the competition of labourers for employment, and partly by the competition inter se of non-cooperative traders, which lowers wages in order to lower prices: it does not represent the rate of wages which would rule in a self-supporting home colony of united interests.' The cooperative ideal will not be reached until every man is a partner in the factory where he earns as well as in the stores where he spends his wages. The members of stores, as such, cannot expect to monopolise the profits of industry as well as those of wholesale and retail trade. They may very profitably enter into an alliance with cooperative industry for the direct supply of their wants, but as long as they fail to offer to their employees the same advantages as an industrial partnership or cooperative firm, so far from being able to defy competition,' they continue to invite competition in its most dangerous form, namely, from those who have chosen a more excellent


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There is some reason to hope that these truths will soon receive more attention in cooperative circles than they have done of late. In those parts of the country where cooperation has done most, it has by this time done so much that the time has come when it must either do more still, or confess that it has come to the end of its resources. The North-country stores have proved themselves almost embarrassingly potent engines for the promotion of thrift. A large proportion of the money saved through them has been left with them for reinvestment, and many of the extensions already referred to were really prompted by the need of fresh investments for the rapidly accumulating capital of members and societies. The Wholesale Society, which acts as general warehouseman to cooperative stores, has for some time provided the latter with an outlet for their spare cash. Its funds are provided as follows:-New societies joining the Wholesale are obliged to take up one share of 5l. (18. paid up)

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