Roughly one in four Germans is a member of a cooperative, which might make it seem like they are quintessentially German. Not really, as it turns out: the idea first originated in France before becoming a movement in England. And Spain is currently home to the largest cooperative in the world.
The Friesians took up arms against the Normans in northwest Germany more than 1,000 years ago, when Friesian freedom fighters drove the occupying forces out of their homeland in around 884. As a reward for their battle prowess, the people of the city of Norden were granted a 1,200 hectare plot of coastal land known as Theelacht. It was jointly farmed and administered from that point on, and many historians see it as the world’s very first cooperative. Theelacht provided coop members with relative economic security over the centuries and still exists today, though it has lost its economic significance.
The idea of the cooperative as a social movement would not develop until much later, in the early 19th century. It was triggered by the increasing impoverishment of Europe’s workers, artisans and, to some extent, farmers brought about by the Industrial Revolution. The prevailing conditions in early factories were untenable. People regularly worked 14-hour days, were paid starvation wages, had neither health insurance nor social security, and often lived in dark, dank tenements. Throughout Europe, people began thinking about how things might be done differently, among them French scientists Claude de Saint-Simon and Charles Fourier, and British doctor William King. In 1831, French politician Philippe Buchez was the first to suggest producer cooperatives, today regarded as the forerunner of modern cooperatives. Producer cooperatives are companies owned by the workers, making them their own employers, and which are democratically controlled at the grassroots level and not focused solely on profit. Philippe Buchez’ first attempts to establish his idea for a cooperative - first for carpenters, then for jewellers - were not successful in the long run, however.
Shorter working hours raises productivity
Briton Robert Owen, head of a cotton factory in Scotland, was the first to successfully realize this idea for a different way of doing business. He was convinced that good social conditions for workers would lead to higher productivity. In 1799, Owen reduced working hours, introduced health insurance and pension schemes, and sold workers items for their daily needs at reasonable prices. The efficiency of his factory increased dramatically as a result. The British trade unions embraced his ideas with open arms: working together to benefit everyone developed into a strategy to combat the poverty being driven by industrialisation. The cooperative idea expanded into a broad movement in England.
In Germany, two men, lawyer Hermann Schulze-Delitzsch and civil servant Friedrich Wilhelm Raiffeisen, were quite taken with Owen’s success in the British Isles. In the mid-19th century, Schulze-Delitzsch organised credit cooperatives for artisans and labourers, whose services included fronting money for supplies. This concept gradually developed into the cooperative people’s banks, which still hold significant market shares in Germany today, and the German Cooperatives Act can also be traced back to his initiative. Raiffeisen organized rural credit unions to lend money to poor farmers.
One in four a coop member
Modern cooperatives work on a simple principle: members come together and form a group to pursue a specific goal where maximising profits is secondary. There are consumer cooperatives that allow members to purchase goods more cheaply, building cooperatives for inexpensive housing, credit cooperatives for low-interest loans and agricultural cooperatives that jointly market products. In all of these, members are both owners and customers of the cooperative. In a modern housing association, for example, tenants purchase shares in the cooperative and elect the supervisory board - so they have a say in how the property they live in is managed, and are paid dividends from any profits.
Cooperatives are quite common in most European countries today. Two of Switzerland’s largest supermarket chains, Migros and Coop, are cooperatives. Spain’s seventh largest corporation, Mondragón Corporacion Cooperativa, comprises over a hundred individual companies and has 80,000 members, making it the largest cooperative in the world. In Germany there is even a national newspaper, the Berliner Tageszeitung, or taz for short, that is organized as a cooperative. And since 2006, it has even been possible to register cross-border European cooperatives inside the European Union.
The cooperative movement really caught on in Germany in particular, where cooperatives have a total of 21 million members. Statically, this means one in four Germans a coop member. It should therefore come as no surprise that Germany applied to have the cooperative officially recognised as Intangible Cultural Heritage by UNESCO. And it worked: the cooperative – and with it the European ideal of united action – was officially added to the list in 2016.