Poster from the vast German consumer cooperative purchasing organization
Image courtesy: Cooperative Museum
The origins of the modern nd cooperative stretch back over 175 years, to the small English town of Rochdale, near Manchester. The ”Equitable Pioneers,” impoverished handloom weavers, took matters into their own hands, explains Hamburg publicist Armin Peter. In 1844, these 28 weavers established the world’s first consumer cooperative.
Initially, the “Honest Pioneers” stocked only basic goods—flour, sugar, butter, and porridge—prioritizing quality. Adulteration and deception were rampant in the 19th-century grocery industry. The Rochdale pioneers’ model served as a blueprint for diverse cooperative endeavors, notes Peter, curator of the Hamburg cooperative museum.
Hamburg rose to prominence as a center of the German cooperative movement. A pivotal event was the 1896/97 dockworkers’ and seamen’s strike. The eleven-week walkout involved up to 17,000 workers, and with no established union strike funds, families faced severe hardship. This crisis spurred the cooperative solution: 700 people attended the founding meeting.
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During the 1970s, numerous cooperatives consolidated, altering their legal structures to become joint-stock companies to attract new funding. The Coop AG, a merger of most West German consumer cooperatives, ultimately failed, resulting in its liquidation in 1989 despite employing 50,000 and generating over ten billion D-Marks in revenue.
Volksbanks Serving Small and Medium-Sized Enterprises
Cooperative banks demonstrate more sustainable operations. In the mid-1800s, the rise of capitalism threatened the livelihoods of many farmers and craftspeople. Pioneers Hermann Schulze-Delitzsch (1808-1883) and Friedrich Wilhelm Raiffeisen (1818-1888) independently established cooperative credit institutions, challenging the banking practices of large-scale commerce and industry.
Since their inception, Volksbanken and Raiffeisenkassen have provided financial support to countless individuals, financing winter harvests, homes, farms, and small businesses. For an extended period, farmers and artisans were overlooked by traditional banks. Only in the 1960s did larger private banks recognize the middle class as a valuable client base, viewing their savings as a low-cost resource.
Similar to consumer cooperatives, some cooperative bankers shifted their focus. This caused friction with the Trade Union, Banks, Insurance, and later Verdi. The union expressed concern that some Volksbank and Raiffeisenbank were prioritizing shareholder value, advocating for them to remain niche players rather than large-scale operations. Many now adopt both strategies.
Following numerous mergers, predominantly in rural areas, 814 of the initial 7,000-plus Volks- and Raiffeisenbanks remain, according to the Bundesbank. Employment has decreased by 20,000 to 138,000 since 2012. However, 18.4 million members entrust their funds to these institutions—a greater number than ever before.
Housing cooperatives are less impacted by the pressures of a capitalist market characterized by oversupply
The DGRV, based in Berlin, represents a significant cooperative force. A remarkable statistic reveals that one in four German citizens is a cooperative member. Growth continues, even in unexpected sectors. For example, the Berlin Society of Parlor Games, with its vision of a cooperative football league, recently garnered the German Academy for Football Culture’s “Utopia Prize,” attracting the attention of clubs like FC St. Pauli.
Cooperatives have achieved significant recognition, attaining UNESCO World Heritage status. Economically, they are no longer viewed as idealistic; instead, they represent a robust sector. This stability is underpinned by the German Cooperative Law, established in 1889 and recently revised. This law mandates that each cooperative affiliate with an auditing organization, such as the “Cooperative Association – Association of Regions,” which holds state-granted auditing powers. While some cooperatives have faced financial challenges, leading to occasional bankruptcies, this self-regulatory structure has, at times, faced scrutiny. However, the majority operate as profitable businesses prioritizing member welfare rather than public benefit.
Consequently, cooperatives frequently function as efficient service providers. Individuals seeking alternative models might find them in smaller cooperatives fostering alternative lifestyles, financing renewable energy projects like wind farms, or establishing community stores. Hundreds of these cooperatives, including non-profit organizations, have united under the Central Association of German Consumer Cooperatives, which also operates a museum in Hamburg. A notable member is “taz Die tageszeitung Verlagsgenossenschaft.”
when was the first cooperative founded?
## From Rochdale to Germany: A Century and Three Quarters of Cooperative Evolution
The recent article on the history of German cooperatives offers a fascinating glimpse into the enduring power and evolving nature of this economic model. The narrative traces a lineage back to the Rochdale Society of Equitable Pioneers, established in 1844 in Rochdale, England [[1]], [[2]], [[3]]. These 28 impoverished weavers, dubbed the “Equitable Pioneers” or “Honest Pioneers,” created the world’s first successful consumer cooperative, initially offering essential goods like flour, sugar, and butter with a strong emphasis on quality in an era rife with adulteration. This model served as a blueprint for countless cooperative ventures globally.
The article highlights the German cooperative movement’s rise, particularly in Hamburg. A key moment was the 1896/97 dockworkers’ and seamen’s strike, where the absence of union strike funds led 700 individuals to establish a cooperative solution to alleviate the hardship faced by the striking 17,000 workers. This demonstrates the immediate practical application of cooperative principles during times of crisis.
However, the article also reveals a complex evolution. The 1970s saw many German cooperatives restructure into joint-stock companies to secure funding, a pivotal shift that ultimately led to the failure of Coop AG in 1989 despite its considerable size and revenue (over ten billion D-Marks). This collapse serves as a cautionary tale about the potential tension between retaining cooperative principles and the pressures of scale and financial markets.
The article then focuses on the more enduring success of German cooperative banks, specifically Volksbanken and Raiffeisenkassen. Founded in the mid-1800s by Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen, respectively, these institutions provided vital financial support to farmers and artisans – groups often overlooked by traditional banks. This highlights the cooperative model’s ability to address market failures and serve underserved populations. Interestingly, even these institutions haven’t been immune to change and internal debate. The tension between focusing on member value and shareholder value, mirroring the Coop AG experience, has led to friction with trade unions concerned with the shift towards larger-scale operations. While mergers have reduced the number of Volks- and Raiffeisenbanks to 814 from over 7,000, membership has actually increased, exceeding 18.4 million.