Abolish the Rochdale Principles

Co-operators go on and on about the “Rochdale Principles”. If you hear someone doing this, you can know right away they are less than familiar with happened at Rochdale, or why Rochdale is an important part of Co-operative history. There are no “Rochdale principles”, in the sense of principles written down by members of the Rochdale society in the 1840s. Co-operative principles pre-date the Rochdale society, and the innovative principles attributed to Rochdale, cash trading and the dividend, are practiced by hardly any co-ops today. The Rochdale group did talk about “objects”, which included -setting up an Owenite commune, starting a temperance hotel, and taking over the state. How come those didn’t end up in the “Rochdale Principles”? What is called the Rochdale principles are principles set down by the International Co-op Alliance (ICA), first in 1937, then ’66, then ’95. Why did the ICA refer to a small group of weavers in 1840s Rochdale when writing up principles of the Co-op movement? They certainly were not the first to operate a co-op store. The Co-op store emerged out of friendly societies, with the Fenwick Weavers often being mentioned as the first experiment. By the 1830s there were more than 300 co-operative societies in the UK, and Co-operative Congresses began being held in 1831. The Rochdale 1844 Co-op wasn’t even the first co-operative store on their street – the Rochdale Friendly Co-operative Society operated a store at 15 Toad Lane from 1833-35. The reason why Rochdale was and is so central in Co-operative memory is largely attributable to the fact its founders went on to found the Co-operative Wholesale Society (CWS) in the 1860s, which became a large reason for the success of the UK co-operative movement as a whole. And yet the huge majority of North American co-operators wouldn’t be able to tell you anything about that. I’ve literally never been to a Co-op presentation in North America, other than ones I’ve given myself, which mentioned the CWS.

The extent of this disjunction is such that it needs some kind of explanation, how could people be getting this so wrong – how could the reason something is so important be so ignored, and the thing that is important be so focussed on, without genuine understanding? There is something religious about this problem.

And I think I’ve figured it out. Co-operation was a genuinely alternative political theology to liberalism. It isn’t anymore, or at least no one sees it that way (even its most passionate adherents), and the incessant repetition of the “Rochdale Principles” is a fudge to cover the hole left in our hearts. According to Carl Schmidt, political theology is the correspondence of the metaphysical image of the world in a time/place with the form of political organization which is recognized in that time/place as immediately appropriate, i.e. to be accepted without question.

The metaphysical image that a definite epoch forges of the world has the same structure as what the world immediately understands to be appropriate as a form of its political organization. (Political Theology, 46) 

 Schmidt talked about how the political theology of the early modern era, characterized by the planning of a “sole architect”, which could be either God or the political sovereign, had been replaced by a pervasiveness of scientific thinking, which presumes a law of nature applying without exception. It’s not surprising that Chicago school economists began to characterize the economy as natural system, one which any attempt to intervene in will compromise its internal, natural functioning, of revealing the most efficient use for everything. It has been more recently argued that the political theology of neoliberalism is divinationHuman activity in the market reveals the most efficient production of value. Co-operation, on the other hand, warns against the drive towards maximization, and instead calls for mediation, for mutual discussion, for sharing, for harmony. For example, the 1909 rules of order of the Co-operative Union of Canada specified that a condition of membership in the union was

the “conciliating the conflicts in interest of the capitalist, the worker and the purchaser, through the equitable distribution among them of the fund commonly known as Profit. (8)

The rules also insist societies prevent the “waste of labor now caused by unregulated competition”(8) (the American spelling of “labour” is actually a political statement, first adopted by the CWS, in solidarity with the fight against slavery).

If the eschaton of neoliberal market activity is innovation, the ongoing reduction in price and improvement in service, the eschaton of co-operative activity is harmony between the needs and interests of all members of society. If neoliberal theology is the radicalization of the “sole architect” metaphysics into the absent architect, the architect who can’t intervene within the bounds of time, co-operative theology moves in the other direction, it is a metaphysics of multiple architects, of ongoing deliberation, of ever repeating intervention from all corners (properly regulated of course, with a not at all autonomous governmentality).

One way that a political theology can be seen manifested in a political realm is the emergence of a corresponding utopian vision, and the story of co-operation is a story of the decline and fall of that vision, not once but twice. The first is the experiments of utopian socialism, i.e. Robert Owen’s villages of mutual co-operation, Fourier’s “Familistaires”. While it’s still possible to find references and homages to Owen and Fourier within the co-operative movement, it’s quite difficult to find people who’ve actually read anything they’ve written, or studied their projects in any level of detail. And maybe that’s because the success of the modern co-operative movement, meaning the success of “co-operatives”, was the defeat of Owen’s vision for villages of mutual co-operation. More than a dozen of these communities were set up, the most famous being New Harmony, Indiana. In Owen’s village, every aspect of social and economic life would be operated co-operatively, whereas a “co-operative” is the attempt to take a single element from that village, i.e. a store, or a factory, and operate it as a self-standing organization. This sundering of the unity of human life as one of consumption, production, socializing, etc, led to consumers’ co-operators getting into arguments with Marxists about whether it was the productive or consumptive capacity which truly defines the nature of the human being. However, the decline of Owenism as a philosophy of co-operation did lead to another utopian vision.  

The second, and for our purposes much more important, was the vision of co-operative federalism, developed by the CWS Chair T.W. Mitchell in the 1860s, which envisioned the ownership of the means of production and distribution to be all owned by workers, as consumers. Individual co-operative societies would not own factories, farms, or transportation companies themselves, but these could be purchased by wholesaling societies which could in term be set up for and owned by individual consumers’ societies. The power, and the success of this vision from the 1860s till about the 1950s is the reason why the UK co-operative movement has traditionally been central, and looked up to. If you’re wondering what people have been “looking up” to, it’s certainly not some weavers selling oats in the 1840s. At the time, having stores own a wholesaler was innovative – vertically integrated retail firms did not yet exist, and therefore store prices were high not simply because storekeepers tried to maximize profits, but because they in turn bought from wholesalers who were themselves trying to maximize profits. The CWS still exists today, although it changed its name to the Co-operative Group, and I think it’s the largest consumers’ co-operative society in the world, trading approximately 10 billion British pounds annually (excluding credit unions, and obviously excluding producers’ co-operatives and retail co-operatives owned by franchise owners rather than consumers). However, it no longer owns and operates its own factories, and it seems to have largely abandoned its former rhetoric of creating a complete and viable alternative to capitalism. 

Today an international slogan of Co-operation is “Co-ops build a better world”, which on the face of it sounds radical and transformative. But with the decline of co-operative federalism we are left without a workable plan for using co-operation to build a better world. Many co-op developers will tell you that it’s not practical to start a new project without state or foundation funding, and this expresses the difficulty of expanding the movement without access to capital. The old strategy of leveraging capital already in the movement to expand it – federalism – is now generally seen as too risky by co-ops, which act in increasingly individualistic, self-serving manners, unwilling to risk their own benefits to grow the movement. Sure there are “start up funds”, and various programs (often based in the discourse of entrepreneurial capitalism), but in general there is nothing like the willingness in co-ops to invest in shared structures with the goal of taking control of means of distribution and production, to impose harmony upon it and undo the waste caused by relentless competition and maximization.

It’s possible to give an account of the decline of radical visions of co-operation in various ways. One can point to the emergence of privately owned vertically integrated “chain stores” which presented a challenge to the efficiencies previously held exclusively by co-op federalists. One can point to the internal problems with various large co-operative wholesalers, like the CWS or the National Co-operatives in the United States, and blame particular managers or management cultures, or a lack of appropriate democratic mechanisms, or the rise of cultural individualism. One can also point to the success of areas of the co-operative movement which were traditionally much less radical, such as agricultural and retail co-ops, which are owned by small business owners rather than consumers or employees. Today of the 30 largest co-operatives in the world, only one is a workers’ co-operative, and three are consumers’ societies, whereas 10 are retail or agricultural co-ops, and the rest insurance or credit unions. It isn’t my intention to weigh the relative force of any of these causes in the decline. What matters for purposes here is that there was a decline of co-operative federalism, which sought harmony in society and global peace through the ownership of society by consumers, and that this utopian vision has not been successfully replaced by any other one.

Historically, the articulation of the “Rochdale Principles” by the ICA in 1937 should be read as part of the decline of the utopian vision held by consumers’ co-operation. The ICA was never as dominated by consumers’ societies compared to the UK co-operative movement, also in the mid 1930s the Co-operative Federalist orientation of the Co-op League of the USA was being challenged by farmers who were staunchly opposed to the socialization of their farms, which would turn them into employees. It’s in this context that Co-operators attempted to articulate a universal vision of Co-operation, one which is inclusive of all different movements calling themselves “co-operative”. By focussing on the Rochdale pioneers, these values appropriated the legacy of the UK co-operative movement, widely recognized to be the most successful, without appropriating the politics and strategy that movement developed starting in the 1860s. A special committee was entrusted with determining the extent to which the consumers’ co-operative movements were in fact, as was often repeated, based on principles “laid down in a statesmen like constitution and subsequently practice” of the Rochdale society. They found,

that the observance of
co-operative principles depends on the adoption and practice
of the first four of the seven Principles, viz.,

1.   Open Membership,

2.   Democratic Control (One Man, One Vote),

3.   Distribution of the surplus to the members in proportion
     to their transactions,

4.   Limited Interest on Capital.

In the opinion of the Committee, the remaining three
Principles, viz.,

5.   Political and Religious Neutrality,

6.   Cash Trading,

7.   Promotion of Education,

What is notably absent from the principles is the practices that made the UK co-operative movement wildly successful, and ultimate the historical explanation as to why Rochdale is seen as important at all – the development of the Co-operative Wholesale Society in the 1860s. There is nothing here about co-operative federalism, and therefore this account of consumers’ co-operation is one which is anaesthetized of the radical elements of consumers’ co-operation which threatened other elements of the co-operative movement (especially agricultural co-operatives).

In 1966 a revision eliminated neutrality, and added a provision for public education, as well as “Co-operation amongst Co-operatives”, perhaps an attempt at reviving a sense of federalism in the movement. The 1995 revision ads “concern for community”, and further defines “co-operation amongst Co-operatives” as the participation in common structures to better meet the needs of members. Because this principle doesn’t define the difference between educational and wholesaling federations, however, co-ops can claim to be meeting this principle simply by belonging to an educational and advocacy federation. Also, many co-operators believe that having their co-op patronize other co-ops (i.e. banking with a credit union) is an example of “co-operation amongst co-operatives”, possibly because they rarely read more about the principles than the list itself.

The ICA Principles, technically called the ICA “Statement on the Co-operative Identity”, commonly referred to as the “Rochdale Principles” (many co-operators somehow believe that the current version, developed in 1995, was actually developed by the Weavers in the 1840s), serves as the pat answer to the questions “What is a co-op?” and “What makes your org a Co-op?”. They serve to answer this question quickly and efficiently, before anyone has a chance to reflect on whether what is ever called the “Co-operative Movement” is going anywhere, or moving in a coherent organized way at all (it is not). They serve as a substitute for a political theology, harmony, which few of them any longer believe in. It’s difficult for anyone who isn’t an activist to believe in a metaphysical image of the world which conflicts with the dominant one – it was easier in the 19th century because (neo) liberalism was not as entrenched, there was still a sense of possibility that co-operation rather than competition might become the organizing principle of society.

The call to “Abolish the Rochdale Principles” is not a call for Co-operators to stop practicing the principles stated in any version of the ICA/Rochdale principles. Rather, it is a call to co-operators to abandon the simple answer “what is co-operation” that these principles give, and to renew a sense of openness to the future which has been closed off. The making-eternal of principles provides only the simulation of a political theology, one produced by compromise rather than genuine metaphysical insight. The co-operative movements period of intense strength and growth it did not need a universally valid set of “Rochdale Principles”, it was rather characterized by a multiplicity of co-op movements struggling to replace capitalism, and sometimes in tension with each other. To create workable, believable visions for a world beyond liberalism, co-operators need to develop a dynamic relationship with principles, revive an interest in harmony as an alternative to neo-liberalism’s political theology of divination, and question the dominance in the Co-operative movement of the enormous organizations which are not owned by human beings.

 

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What Happened to Worker Co-op Federalism?

19th century American worker co-ops practiced co-operative federalism – they put portions of their surplus towards creating new co-operatives, and they belonged to federations that participated in creating and managing new co-op firms.

“In 1885, the Solidarity Watch-Case Co-operative, was organized in Brooklyn, New York, by the Knights of Labor (KOL) after a strike against the Brooklyn Watch Company for a shorter work week.  It became a thriving business, growing from eight to a hundred and ten workers, and was the first in the industry to give themselves a paid half-holiday on Saturday.  The members were part of a group called the Solidarity Co-operative Association, run by a committee appointed by KOL District Assembly 49 (Manhattan and Brooklyn).  This umbrella association raised funds to start new cooperatives and participated in their management.”

This breaks the mould of consumer=cooperative federalism and producer cooperation=cooperative individualism, which was believed as absolute truth by many members of the CWS/Co-operative Union movement in the UK, as well as by early CLUSA leaders.

Today, however, I’m struggling to find examples of cooperative federalism amongst producer or worker co-operatives outside the Mondragon system. Everyone I meet doing cooperative development is seeking grant funding, or government funding. And every worker co-op I learn about is a paradigm of cooperative individualism. Some of the only coops I’ve been able to find that are strongly committed to federalism are some of the large student housing co-ops, specifically the investing members of NASCO Development Services.

Campus Co-op’s Legacy

Campus Co-op Residence Inc. was formed by four University of Toronto students who, after seeing Toyohiko Kagama speak at a conference in Indianapolis during the 1935 Christmas break, returned to Toronto determined to start a co-operative of their own. Our first house at 63 St George was leased for a nominal fee from Victoria College starting in October 1936 and was strictly male-only. The co-op was entirely member-run, with all operations managed by students – including our first student general manager, Arthur Dayfoot. General meetings were a monthly occurrence, and kitchen and house committees dealt with all maintenance, food, and house issues, and members were expected to contribute 5 hours of volunteer labour to the co-operative every week. There was also an element of class consciousness to the early day’s of CCRI – the U of T residential colleges were much more expensive, and populated by the children of the elite, and there was a quiet but firm expectation that if a student could afford to live in one of the colleges they would not move into CCRI.

 

CCRI expanded rapidly throughout the 1940s and 50s by leasing many new properties. Leasing properties were seen as unstable, however, as we lost and gained new leased properties on an almost yearly basis. A semblance of continuity was maintained by giving new houses the names of houses we had lost. Some houses were purchased, but it was difficult to balance the desire for cheap rents with the need to build capital to purchase properties. We did purchase some houses in this period which we still own, however, including 95 Willcocks (1950), 582 Spadina (1956), and 596 Spadina (1958).

 

In the 1950s CCRI began its first experiment with hired staff – a “Summer Manager” position, which in 1961 became the position of General Manager when then-Summer Manager Howard Adelman convinced the board to hire him on full time. Adelman spearheaded a campaign for growth within the co-op, buying 14 new houses between 1961 and ‘64. This required raising the rents, which provoked resistance from the membership, but in the end Howard won the day and at a general meeting in 1962 the members voted for a substantial fee increase to make possible the purchase of more new houses. The houses purchased included all of North Division, the former Sussex Division, and in ‘67 Annex Division began to emerge with the purchase of 120 Madison and 614 Huron. The liberal 60’s also saw the decline of gender-segregated housing at CCRI. Also, in 1968, Campus Co-op was a founding member of the North American Students for Co-operation (NASCO), a North-American wide network for the advancement of student housing co-operatives and the student co-operative movement.

 

The now infamous Rochdale College was originally CCRI’s plan to build a modern student residence. However, CCRI’s original vision for Rochdale was precluded when the land we had purchased was zoned high density, turning our modest notion of 4 story residence to an unwieldy 18 story tower block. Also, disagreements emerged over whether the residence would be operated as an educational college, and this led to CCRI separating itself from the Rochdale project, and Howard Adelman leaving Campus Co-op.

 

The failure of Rochdale College cast a shadow over the student co-operative movement, which may have contributed to the beginnings of a material and social decline in CCRI during the 1970s. We suffered problems such as member apathy, inadequate maintenance and legal problems from the City. Worse, a decline in applications led us to eliminate the previously stringent member selection process, and even drop the requirement to be a student to live in CCRI during the school year (this condition would not be renewed until the 90s). There was even a proposal at the April 1974 General Members Meeting to dissolve the co-op entirely. Maybe it was the organizational nightmare that Adelman’s expansion had caused – the now larger co-op lost the cohesive unity of the previously smaller member-run organization with its monthly general meetings. Or maybe it was that the early 60s ethic of building a better tomorrow had fallen way to the late 60s “let’s get high and burn shit”, and the Co-op was paying the price. Either way, the greatest success story of CCRI is that despite hard times, we continued to survive.  

 

The 1980s saw the first major co-op wide renovation project. Partly funded by grants, these upgrades were done by paid staff, whereas previously house maintenance was mostly left to regular members. Between 1976 and 83 we operated a successful hostelling operation which raised significant funds for the Co-op, and was ended only due to legal issues with the city. Like the Toronto Heritage Residences program we operate today, it showed that CCRI can utilize its assets creatively and for the benefit of all its members.

 

In the early 1990s CCRI began to take on the form we know it by today. Financial matters were centralized to the office at 395 Huron (previously, rents had been collected at the division level, and often weren’t). The vacancy rate in Toronto was very low and we took the opportunity to evict our non-student year round residents, who made up about 20% of our membership at the time. However, this was also period of some financial recklessness – the rising property values of our houses allowed us to borrow funds at a dangerous rate, costs ballooned and CCRI ran deficients year after year.

 

In 2004 CCRI adopted “Restructuring” which continued the centralization of our governance structure. Division councils were stripped of their budgets, and the Division Chore member work requirement was centralized and became “Co-op Hours”. We distanced ourselves from NASCO, an organization we had been part of since the 1960s, and focussed instead on building connections between the Ontario student housing co-ops. In 2012 CCRI began hiring “House Managers”, who serve as member-staff in each of our houses. These new hired positions replaced the previously elected “House Representatives”, which meant the formal end of the Division Councils. In 2013 we renewed some ties with NASCO by beginning to send members to their yearly “Institute” conference in Ann Arbour Michigan.

 

In early CCRI we hired Wayne Brandt, our current General Manager. Since then we have seen an upsurge in summer revenue thanks to his Toronto Heritage Residence initiative. We have also embarked on a significant energy-savings plan which will make Campus Co-op better off both in terms of our energy costs as well as our carbon footprint. Our largest challenge for the future, however, is a project to undergo significant repairs to all of our century-old houses. By accessing grants and maximizing summer revenue, we hope to have upgraded all of our houses by 2020.

 

CCRI’s legacy fundamentally pivots around the positives and negatives of Howard Adleman’s expansion of the Co-op in the 1960s. On the one hand, he drove the expansion drive that led us to own 24 houses in downtown Toronto, making up the material basis of our organization. On the other hand, since that expansion we have struggled to maintain the democratic character of the co-op, slowly transitioning to an increasingly centralized organization where the average member has over time been less and less involved in communal work and communal decision making.