Co-operation. What It Is, and What It Ought To Be

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Contents:—The errors of the present movement. Illustrations: Padiham, Bradford, &c. A better spirit: Bingley, Bury.—The true plan of co-operation.— A contrast between the two.

The priest, if you inveigh against his priestcraft, says you are an enemy of Christianity itself. So does the co-operator, if you inveigh against that kind of so-called co-operation, which, in reality, is profitmongering, say you are an enemy of co-operation itself. But the reverse is the case. As the true christian tries to rescue Christianity from priestcraft, so does the real friendoî co-operation endeavour to rescue that from the pernicious tendencies into which it is being launched.

In No. 2 of this publication it has been shown how the present erroneous system of co-operation leads, in reality, to competition, and through that to monopoly. I will not recapitulate the arguments here, to weary by repetition those readers who have already seen that article—but most earnestly do I invite for it the attention of others.

On the present occasion, I will dwell on the actual working of some of the co-operative efforts, on what they are, and then, on what, as it appears to me, they ought to be.

The plan on which co-operative attempts are now conducted, is to buy cheap in the wholesale market—and to sell dearer.

The sale takes place, in some few instances, only to the shareholders themselves—in most, however, to the general public.

Where the sale takes place to the shareholders, the profit goes partly to pay the working expenses, and the remainder of the profit is divided among the shareholders at the end of the year. What is the real meaning of this?—it means that the shareholders buy in the wholesale market, that they then are charged so much more for the retailing than they ought to be, and that, having lost the use of the money for an entire year, they receive back that out of which they have been robbed, at the end of twelve months. Can there be greater folly than this? People deliberately charge themselves too much, and pay themselves back at the end of the year, having lost the use of their money during all the intermediate time! The excuse for this is, that they must charge more than the wholesale price, to cover the working expenses, and that they cannot know beforehand what the working charges will be. In the first place, this might be known within a very narrow margin of allowance,—but the fact is this, that they want none, or scarcely any of these working charges. If twenty people club together to form a co-operative store, and then get the articles they want retailed to them at second hand by their own agents, they might just as well send one of their number to the wholesale market, buy at first-hand, and divide the goods in the proportionate shares required, among themselves, without any working charges, or any other expenses, except the one journey (if such were required) and the one transit of the goods. For instance, if twenty families agree together to buy their groceries wholesale, in the mass,—each says how much he wants,—he lays by so much per week, and keeps it at home, or pays it into the hands of any one who may be appointed to act as banker for the rest (instead of, as now, subscribing it to a store), and at given periods one or more of this little domestic league goes into the wholesale market, buys the groceries, divided there or afterwards into such portions as each of the members has given an order for,—the individual members receive their several shares as ordered—and there the transaction is complete. This is done every day by rich families of the middle-class. Two or three club together to get their coals or potatoes, &c, wholesale; one of them buys the lot,—they get them at the wholesale price—save all the retailing charges, and then divide the articles among themselves.

This could be done by twenty or thirty, as well as by two or three. Here you have all the advantages of a co-operative store, without any of its expenses and difficulties. You require no payment of rent, taxes and rates; no feeing of officers; no fittings and counters; no advertising and placarding; no payments to lawyers; no registering, enrolling, or certifying; no profitmongering whatever, under the plea of covering working charges;—-the whole thing is merely a domestic arrangement of a few families among each other—and there you have all that is required: you keep your money in your own pockets; you do not clash with the law if unenrolled, or become slaves to it if enrolled—every member has the usual legal security against the other,— for the purposes of buying wholesale and selling to the shareholders, a co-operative store is utterly unnecessary—it is plundering yourselves—it is doing at second-hand that which you can do with a large saving of money at first-hand! Can anything be more comical, than men saying we’ll buy at first-hand, but we won’t take our goods home, we’ll let them stop half way, we’ll charge ourselves too much, we’ll pay for an expensive machinery in order that we may be overcharged, and then, at the end of the year, we’ll pay ourselves back a portion of what is left after payment of the working charges, that is, of the charges that are necessary for the process of enabling us to cheat ourselves]

Such is the real working of co-operative stores that profess to sell to the shareholders alone. But of such there are but few—for most profess to sell to the general public. The former are imperatively harmless, for a man may cheat himself, if he is fool enough to do so, without inflicting much injury on others.

But, if a man has a right to cheat himself, he has no right to cheat another. And this is done in the other modes of so-called co-operation, as existent at the present day.

The next order of co-operation is that in which the goods are sold not only to the shareholders, but to the public at large. In the former kind, we have seen that it is an absurd waste of time, trouble, and money, for an object that could be much better achieved without any co-operative store at all. But in the case now before us, the whole system of profitmongering, leading to competition and monopoly, is attempted over again, under the soothing name of co-operation itself.

Here the profit is taken direct from the purchaser, and no return made at all. The “co-operator” buys in the cheapest market, and he sells as dear as he can, coolly telling us that he is doing this with a view to the destruction of that horrid profitmongering of the shopocracy. The poor customer pays him the “profit” — and that he divides at the end of the year between himself and his brother co-operators. Then they boast, that they have made £2,000 net in one year! What did these £2,000 consist of? Of the difference between the wholesale price (the price at which they bought) and the retail price (the price at which they sold) over and above the working charges. Every farthing of this £2,000 is profitmongering of the most odious description, because it is done under the name of co-operation; every farthing of this £2,000 is as much direct plunder taken from the public.

Now, since during the last few months an exposure has been made of this new system of profitmongering, all the so-called “co-operators” have disclaimed violently against the charge, and have tried to slip unscathed through the imputation, by tacking some supposed “saving-clause” to their rules. For instance, the London tailors gravely tell us that they see the full force and justice of the resolution passed by the National Convention, for nationalising the tendency of co-operation, and therefore they intend to set five per cent of their net profits aside for a national fund. Five per cent! Then they are to pocket ninety-five per cent of clear profit! Every fraction of that 95 per cent is a deliberate robbery upon their customers! For, no man has a right to take more from society than the value of what he gives to it. All beyond that is robbery. The London tailors, therefore, have a right to a fair remuneration for their labour, and no more. A fair remuneration for labour is, supposing that the labourer gives his full strength to society, as much as will enable that labourer to live in comfort.

Therefore, every farthing of those net profits after the working charges are paid (a portion of the working charges being a fair remuneration for the work performed), is an imposition and a cheat upon society.

Some societies, however, try to evade the charge of profitmongering by a more roundabout, but equally transparent, trick. I will illustrate this by the Bradford Co-operative Store. This store professes to divide only half the profits among its members. Let us analyse the scheme.

Rule 1 says: The object of the Association is “to furnish its members with provision and clothing at prime cost.”

Rule 6 says: “All goods shall be sold at reasonable market prices, for ready money only, and the whole surplus profits, after deducting working expenses, and five per cent interest on shares, shall be divided half-yearly among the members according to the amount of purchases made by each; but no member to receive interest on part shares.”

Now, in the first place, if the goods are to be sold at “prime cost,” there could be no “surplus profits.” But the “members” only get them at “prime cost,” the “surplus profits” are to come from the public.

Pretty well this! In the first place, the members get their goods at prime cost. They are not even to bear their proportion of the working charges—the poor, good-natured “public” are to pay for this. In the second place, the members are to receive “five per cent interest on their shares.” Pretty well again!

Rule 3 provides that members may have as many shares as they like (though only one vote). A snug investment that! Five per cent! Elsewhere they could get only 3^1/2- Here they are to get five! Firstly, they get what they want at prime cost; secondly, they get five per cent on their investment. The poor, good-natured public are expected to pay for this too!

In the third place, “the surplus profit shall be divided half-yearly among the members, according to the amount of purchases made by each.” Pretty well once more! So these lucky members are to get their goods at prime cost, to get five per cent, for their money, and besides all this, to get “surplus profits/’ and divide them every half-year among themselves. And the poor, good-natured public are expected to pay for all this as well!

Pretty well in the profitmongering line. This is worse than the shopkeepers. You catch us with a threefold gripe—and tell us all the while you are our benefactors.

In Rochdale and Padiham, “Co-operation” has assumed a form more injurious still to the best interests of humanity and progression. At the latter place, a “co-operative” factory has been built, by shares of £25 each payable in 5s. calls. This is a workingman’s factory with a vengeance!—and here, as in almost all the co-operative attempts in England, all the profits are to be divided among the shareholders—the amount of profit to be extorted from the public, being left to the consciences of the profitmongers themselves.

Workingmen! Democrats! Can you for a moment tolerate or sanction such a system?

The least objectionable stores I know of, are those at Bingley and Bury.

So much of the true metal rings at these places, that they have not been as deeply tainted with the rust of profitmongering, as Padiham, Rochdale, Bradford, London, and most other places.

At Bingley they have raised, in two pound shares, a grocer’s and draper’s shop. In this, Rule 1 says—”One-half of the clear profits to be divided annually among its members, the other half to be given to the society, and never to be divided, but to go to extend its operations to other branches of business.”

There is some recognition of principle in this, but, in reality, there is only a distinction without a difference. Though the members receive only half the profits direct, yet, as the other .half goes to extend the business of the association, it, in reality, goes to extend their profits, or by enlarging the concern, it enlarges the “half” which they are to divide among themselves.

At Bury, if I understood them rightly, they adopt the rule, that any one of the general public, who chooses to deal at their store, and subscribe one penny weekly towards it, shall be entitled to a share of the profits proportionate to the amount of his purchase. This is a great advance on every attempt at “co-operation” that has hitherto been made.

Let us now glance at what co-operation ought to be. I believe the principle of co-operation is but very imperfectly understood in this country. People imagine if a few individuals co-operate together to start a trading concern and make as much money as they can, that this means co-operation in the real sense of emancipated and associated labour.

Nothing of the sort! If that were so, every railway, banking, or shipping company would realise the true principles of co-operation.

By co-operation, a very inadequate word, by the way, we mean the abolition of profitmongering and wages-slavery, by the development of independent and associated labour. But this can be established only on the basis of the following principle already laid down in this article.’

No man has a right to take more from society, than the value of that which he confers upon it.

Consequently, associated labour has no right to take more from its customers, than will pay for the prime cost of production, and enable the man to live adequately, who devotes all his time to the production or the distribution of wealth.

To meet this position, associated labour has two alternatives: to charge merely thus much additional between the prime cost and the retail price, as will cover the expenses of retailing; or to charge more, but devote every fraction of that overcharge to a national purpose, such as the purchase of land, machinery, &c, whereon to set the present wages-slave at employment in self-remunerating labour.

Considering the present circumstances by which society is surrounded, I prefer the latter, as being the best calculated to further labour’s emancipation.

Let us see how this would work. A co-operative association is formed; after payment of its working charges (including labour in production or distribution), it finds itself at the end of the year with a surplus in hand; instead of dividing this surplus among the members, it employs it to purchase land or machinery, which it lets out to other bodies of workingmen, on the associative principle. The rent paid for the land or the machinery, and the surplus of each concern beyond the working charges, is again to be applied to the further purchase of machinery and land, on the same terms, and under the same conditions; and so on, continually extending the power, strength, and resources of association. This is co-operation. It is co-operation, because it establishes a community of interest—the success of each “branch” furthers the success of every other, and of the whole collectively. There can be no conflicting interests—no rivalry—no competition—for the greater the success of each undertaking, the more the stability and permanency of the whole is ensured. It makes it the interest of each and of all to see co-operative associations spread and multiply. This, I repeat emphatically, this is real co-operation.

But what is the present isolated system? It is based on individual and antagonistic interests. It makes the vital interest of the “co-operator” to prevent others from co-operating—to hinder the spread of the associative principle. And it does it in this way: a co-operative trading concernais started on the present isolated plan; that is, the concern forming a “close borough,”—admitting no more within its pale—making what profits it can, and pocketing them among the same few individuals. What now becomes the interest of these individuals? To prevent another co-operative concern from being started in their immediate neighbourhood—to prevent another body of workingmen from deriving the advantages of co-operation. Because, if the original concern flourishes, it absorbs all the trade of the locality (if one don’t, two or more do, it becomes merely a question of numbers—of how many customers there are in a place); if another independent concern is started, it must have a portion of that custom, or it cannot exist. Consequently it becomes a rival of the other association; it begins to compete; there not being customers enough for all, the one concern too many must try to draw away customers from those already established. To do this, it must undersell—it must buy still cheaper, and pay still cheaper for its labour, in order that it may undersell; the other concerns must do the same in self-defence; and there you have the old system of competition, with its necessary consequences, wages-slavery, plunder, ruin on the one hand, and monopoly on the other, added to that profitmongering on which the present plan, as already shown, is altogether based!

Therefore, the present plan is not true co-operation; it is essentially hostile to the spread of associated labour; instead of ending profitmongering, it renews it; instead of abolishing competition, it recreates it; instead of abrogating monopoly, it re-establishes it, and is the death-blow to the hopes of labour’s emancipation. Now, my friends, let me implore of you to weigh these remarks, and those previously given in this work, without prejudice or anger. I write with a sincere conviction of the truth, and of the paramount duty of combating a pernicious fallacy. I am not the enemy of co-operation, but its friend—its true friend—I do not oppose co-operation, but wish to rescue it from that course, in which it is digging its own grave. I trust those who have supported “cooperation” on its present plan, will not be offended by these