Co-ops against capitalism

Arthur Bough reviews Nicole Robertson's 'The co-operative movement and communities in Britain, 1914-60' Ashgate, 2010, pp268, £55

For today’s generation, growing up in a world dominated by Tesco, it’s impossible to understand how important the Co-op was in working class life. When I grew up in the 1950s and 1960s, the Co-op was ubiquitous. I grew up in a small mining village. The high street was two or three hundred yards in length, but in that short distance, there were two Co-op shops: a grocery, and a butcher. Half a mile away, in the next small settlement, there was another Co-op store, combining both grocery and butchery. The only other stores were the corner shops, which amounted to nothing more than the front room of a terraced house, and several small shops selling clothes, sweets and tobacco, and a fishmonger. But it was the Co-op which formed the centre of everyone’s shopping experience.

It was not just shopping. Our coal was delivered by a Co-op coalman and our milk by a Co-op milkman. The Co-op even had its own money - milk was paid for with blue, plastic ‘milk cheques’. Every so often, the Co-op laundry collected my father’s greasy overalls to be cleaned. At the end of the 50s or very early 60s, just after the village cinema closed down, the Co-op took over the premises, and established a supermarket, which was a retailing innovation at the time.

In the towns adjoining the village, there were larger Co-op stores, which sold drapery, or furniture and electrical goods, as they started to become available. There was even a separate Co-op TV and electrical repair store. For most of the 1950s, I had a lot of second-hand clothes, but, on the occasions I can remember being taken to buy new clothes, it was up to the main Co-op emporium. When my sister left school, she went to work in the offices of the North Midland Co-op, which had its headquarters a couple of miles away. It’s this history of the Co-op - its heyday - and its impact on working-class lives that Robertson’s book details.

The co-operative community

The book focuses on retailing. It deals with the co-op as a movement, including its political and educational activities, intended by its leaders as a means of establishing a co-operative community, but it is perhaps an indication of the failure of that goal that these other activities are refracted through the lens of the retail business. The idea of community goes back to Owen, who envisaged a system of communes exchanging with each other. The utopian followers of Owen framed this in terms of dropping out of capitalist society, but, in fact, the co-op developed necessarily within capitalism, whilst presenting an alternative to it.

Robertson sets out several things necessary, such as playing fields, public buildings, churches, schools, shops, etc. The co-op provided almost all these things. She provides a powerful image on p30:

“The new town centre has some fine shops bearing nationally known names, but Co-operative House is the largest and most prominent. At night, the word ‘Co-operative’ in white neon lights can be seen from a good distance away. There is also a clock similarly illuminated. The pleasant mass of Co-operative House dominates the centre of this brave new town.”[1]

We should not underestimate the degree to which these visual symbols affect us.

For nearly all the period under review, there was no welfare state. The co-op effectively was the welfare state, the difference being that it was the creation of workers themselves rather than the creation of capitalists - contrary to myth, the welfare state is largely the brainchild of Tory Neville Chamberlain[2] - but, as with the other such creations, remains capable of being reformed, democratised and brought under their control.

The co-operative movement has been largely ignored by the labour movement and historians. In my own study of co-ops, I noted that fact, and gave some suggestions as to why that is. The labour movement has been based on the statist ideologies of Lassalle and Fabianism.[3] And for historians, it is always the heroic event or the history of institutions that make more attractive subjects than the gradual social processes going on within society. As Robertson also suggests, the Co-op focus on the consumer (often a woman) rather than the producer (often seen as a man) partly explains it.

There has been some work done on the role socialist organisations played in providing alternative culture and lifestyles for workers. Some work has been done, for instance, in relation to organisations such as the Plebs League, and the establishment of the National Co-operative Film Archives has enabled further research in this area. Further work by feminists is opening up other areas, such as that of the Co-operative Women’s Guild.

It is difficult to speak of a single co-op history; the individual societies were vastly different, ranging from a few thousand, up to the largest like the London Co-op, which had 1.2 million members in 1957.

There is a wealth of evidence in the book of workers creating their own alternatives from the ground up. Marx spoke about the few willing hands who established the co-operative factories, providing a lesson indeed.[4] It was no less ordinary workers who established by their own efforts co-op societies that grew and prospered. By the mid 20th century there were 12.5 million co-op members.

The St Cuthberts Co-op in Edinburgh was established in 1859 by joiners and cabinetmakers. By 1960, it had over 100,000 members, 80 grocery stores, 75 bakeries, 28 fruit shops and nine tailors, and was involved in activities from dairies to wallpaper shops. The Leicester Co-op was established in 1860 by seven weavers. By the 1950s it had over 80,000 members and a branch in every one of the 400 square miles it covered. The Birmingham Industrial Co-op was set up in 1881 by 25 mainly railway workers. By 1960, it had almost 400,000 members. The London Co-op was formed by mergers in 1920-21 of the Stratford Co-op, established by railwaymen, the Edmonton Co-op established by tramwaymen, and the West London Co-op, again established by railwaymen.

The Co-op was innovative. In 1942, it pioneered the first self-service store in Britain. It was able to use its centralised buying, and its own production to an extent that, at the beginning of the last century, it threatened the existing department stores. Even in architecture it created its own style of art deco buildings.

And it was natural that from the start they should have more of a role than just being a shop. Robertson quotes the services provided from aid given to members during times of hardship (such as sickness and unemployment) to an array of needs for special occasions, such as wedding day. Robertson details how, prior to the welfare state, the Co-op provided extensive welfare support for its members. It set up funds to cover hardship and illness to cover medical costs, and convalescence, and such funds continued to be provided even when times were hard, and not just to members.

The Co-op provided sports facilities for its workers. It led the way in introducing paid holidays for workers, and in introducing the 48-hour week when most other workers were working a 50-60 hour week. It had funds for its workers to cover long periods of illness, and to cover the costs of their convalescence. Even after the NHS was established, the Co-op continued to provide its members with medical equipment, for example. Similar welfare support covered death, and in areas like South Wales community projects to relieve distress caused by colliery closures. It was able to provide support through credit, even though this contradicted the original principles of the Rochdale Pioneers, who had opposed credit because they did not want to encourage workers to get into debt. Workers settled their accounts when they were paid, not when they shopped. But, as with credit unions, members were not allowed to simply continue to run up debts. Their debts were discussed, and they were advised on reducing them.

Yet there was a gap between the vision of the leadership and activists, and the concerns of the majority of members. The leadership and Owenite organisations had a view of increasingly self-sufficient co-operative communities developing and of education, etc resulting in growing numbers of co-operators. It never happened. The majority were happy to remain passive beneficiaries of the Co-op - consumers of what it had to offer rather than activists, as with the trade unions or Labour Party. This is inevitable from a view of socialism that emphasises the idea that workers can have things done for them, provided to them, rather than that workers have to be actively involved in providing for themselves. And the Co-ops did provide for almost every need. They became involved in hairdressing, sweet shops, fish and chip shops, jewellers, opticians, funeral directors, coal dealers and pharmacies in the inter-war years. After the war, they expanded further into removal services, wallpaper shops, dry cleaning, and electrical goods.

The aim was to create an “integrated economy from bakers shop to flour mill, from tea table to tea plantation”.[5] But this entailed an inevitable contradiction. The interests of consumers were paramount. The protection and fair treatment of those it employed was part of its ethos, but its employees remained wage-workers. What confronted them was still capital. That it was capital owned by other workers did not change the fundamental social relation of labour to capital in the way it is changed where the workers themselves own their means of production.

This is a problem that a socialist society would face. Where the means of production are owned by the state, each group of workers is confronted, so long as commodity production continues, by capital, and their relation to it remains that of wage-workers. That it is a workers’ state owning the capital would not change that relation. The fundamental economic relation would be that of state capitalism. This is why Engels says he and Marx envisaged that co-operatives would play a major role for a prolonged period, with the state acting only as a holding company retaining the deeds, so that property could not be privatised, rather than exercising active ownership and control.[6]

Consumers’ co-ops do have a role to play. It is possible producer co-ops might use monopoly power to make monopoly profits. Consumer co-ops can act as commissioning agents to counterbalance such power, and at the same time formalise connections between workers as producers and consumers. One of the areas where this is probably important is in the provision of services such as welfare.

A strong point illustrated by Robertson is the co-op’s natural tendency to internationalism. That is so not just because of its concept of ‘community’, but also because the same economic forces that drive capital to expand, and create deeper and more extensive links, operate on co-operative property too. As early as the 1850s the Co-op had extensive international links, through which it learned the latest technology and techniques. Co-operators from around the globe came to the Co-op College at Stanford Hall, and that helped to reinforce the ideology of internationalism.

The Co-op and the fight against capital

Robertson shows how World War I was important for the Co-op. It pressed for food rationing, and set up its own systems prior to the government doing so. In the aftermath there was widespread profiteering, and price-fixing, causing rapidly rising prices. This set the Co-op model in stark contrast to capitalist business. A cartoon in Co-operative News of December 14 1918 showed a co-operative St George killing a capitalist dragon with the caption, “The people’s co-operative fight with the capitalistic menace”. And that difference had been shown in the standing committee on trusts’ Report on the soap industry (1921), which concluded that there had been widespread profiteering by the soap manufacturers, whilst “The Co-operative Wholesale Society has generally taken the lower of the two costs, which is the exact reverse of what other soap makers have done.”

The Co-op played an important role in the Workers National Committee set up in 1914, providing it with figures for food and other prices. The London Co-operative Society also worked with the London Trades Council and Labour Party to form the London Food Vigilance Committee, which set up committees in 30 districts and organised a 50,000-strong demonstration in Hyde Park. Such activities show how the transitional demand for a sliding scale of wages could be practically implemented.

But it was important for another reason. When the government did introduce rationing, the Co-op was discriminated against by the private traders who controlled the quotas. Lloyd George brought influential businessmen into government, but the Co-op was excluded. The competition against capitalist property meant it must inevitably have to engage in politics. In May 1917, the Co-op congress made that decision. A focus was excess profits duty, which classed the ‘divi’ - the dividend Co-ops paid to their members/customers - as profits, even though the increases in divi were due to rising prices.

The bosses and government had no difficulty seeing the Co-op as part of the labour movement, even if sometimes it appeared the trade unions did not. In 1919, fearing a miners’ strike, Lloyd George wrote to Bonar Law: “The miners I happen to know are relying upon the co-operative stores to feed them. The great co-operative supplies are outside the mining areas. They ought not to be removed. Once the strike begins, it is imperative that the state should win. Failure to do so would inevitably lead to a soviet republic.”[7]

During the 1919 railway strike co-ops supplied food to the strikers. The shopworkers union in 1921 devised a plan to get supplies to members of the Triple Alliance, in case of a strike, via a national strike food committee, made up of the alliance, the co-operative movement and its employees. Co-op societies would be urged to move stocks lying at railways and in warehouses, “so that stores can be in our hands before the government commandeers the larger accumulation of supplies”. In case of shortages, committees would rely on the wartime experience of co-ops in organising rationing.

The unions did not often reciprocate. They continued to place their funds in capitalist banks, and when the General Strike was underway, the Co-op was given no dispensation. As it encouraged its workers to join unions, it was in fact harder hit than private retailers, who opposed unions and used scab labour. Yet retail societies contributed £48,000 to national appeals, food and clothing worth £131,000 was handed over, and trade union credit of nearly half a million pounds was extended. It was alleged that £400,000 was transferred from the USSR to the Miners’ Federation, through the Co-operative Wholesale Society.

When the Tories attempted to prevent a repeat by introducing the Trades Dispute and Trades Union Bill in 1927, the central board of the Co-operative Union noted that “capitalist interests that have demanded this bill from the government are the same business and political interests that are striving to hamper the legitimate development of co-operation” and called upon “all co-operators to assist the trade unions in every possible way to defeat this reactionary measure”.[8]

In the 1930s the Co-op Union organised support for the National Unemployed Workers Movement and the hunger marches, even though they were ignored at a national level by the trades unions and Labour Party.

But the Co-op had to compete with other retailers. When it was strong it could lead the way. The more capitalist retailers grew, however, the more it had to adopt similar practices to them. So worried was it that its workers would use their own membership to dominate the boards and raise wages that it introduced rules to prevent them having full voting rights. But it was precisely becoming worker-owned and -controlled that could have saved them. It was the employees who could have the new ideas and dynamism that would have provided the competitive edge.

It is also necessary to understand that trade union bureaucrats have an incentive to oppose co-ops. Trade unions are there to bargain within capitalism, and it is from that role that the bureaucrats earn their living. The whole point of a worker-owned co-op is to establish non-capitalist property, and thereby to end the system of wages and wage bargaining. The function of the union bureaucrat disappears.

A similar problem existed with the Labour Party, for the same reason. Labour was set up to bargain for better conditions within capitalism. Although the Co-op Party had close links with Labour, there was always a friction based on that different ideology. Moreover, Labour basically thought that the Co-op should just hand over its money.

The difference was highlighted with the 1945 government. the Co-op always felt that Labour governments did nothing to promote the co-op movement or ideals. They were excluded from the Economic Planning Board. The idea of social, as opposed to state, ownership divided the two, and the aspect of democratic control implicit in Co-op ideals played no part in Labour’s ideas about nationalisation. That was marked when the Co-op colliery was transferred from workers’ hands into the hands of the capitalist state, as part of the nationalisation of mines, and similar threats were raised against the Co-op’s industrial insurance business. As Peter Gurney puts it, it led Co-op leaders to believe “their own distinctive form of economic organisation would be snuffed out because of Labour’s preference for bureaucratic and statist alternatives”.[9]

In the same way that Marx describes how capital traps workers - and, the more affluent they become, the more trapped they are, dependent on it for the continuation of those wages - so this dependence on the capitalist state reproduced that relation, whether it was as employees of it or as effective serfs dependent on welfare.

That is why Marx, in the programme of the First International argued for direct taxes: “Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers, while indirect taxation destroys all tendency to self-government.”[10]

The co-op and an alternative culture

Robertson deals at length with the way in which the Co-op attempted to promote the idea of community through its work in other areas, such as education, sport and leisure. The extent of all these was dependent upon the size and success of the retail society in the area, which funded the activity.

Again, it was the nature of a consumer Co-op which limited the potential for this activity. The vast majority of members did not participate in Co-op democracy, and were mainly just interested in low prices and the divi rather than Co-op philosophy. Most of the store managers shared that outlook, and, as already pointed out, the workers in the stores had no reason to view their position as much different from that of any other worker.

The Socialist Workers’ Sports International was formed in 1920 with the aim of educating “a new and healthy generation which will propagate socialism, fight capitalist exploitation, fight against war, fight for peace of the world and for the political, economic and cultural emancipation of the working class”.[11] The co-operative movement was encouraged “to use sporting activities as part of its ideological advancement, arguing that ‘by the provision of adequate sports facilities and the stimulating of sports participation the movement can hasten forward the Co-operative Commonwealth’” (p79).

The Co-op initially organised sports activities for its workers, not members. That changed in 1948, when it was agreed that the newly formed National Co-operative Sports Association should also be for members. As with many aspects of Co-op activity, there was no uniformity. Many of the smaller societies provided no facilities at all. An argument against extending facilities to members had been the logistical problem of catering for so many people over wide areas.

The answer was to focus on specific groups, particularly the young, who it wanted to socialise into its community. Whilst annual events such as Co-operators Day and International Co-operators Week provided family events, which demonstrated that the Co-op was a central part of working class communities, emphasis was placed on youth events. This was linked to Education. The Co-operative Educator argued that activities on Co-op-owned playing fields showed that the Co-op was more than just a trading concern.[12]

From 1923, the annual Summer Carnival was designated International Co-operators Day, and continued to draw large crowds into the 1960s and 70s.

At a time when holidays were becoming common for workers, societies organised outings, buying their own transport. Some bought country estates, which were leased to the Workers Travel Association as holiday homes. The larger stores played a part too, because they increasingly had space set aside for eating, drinking and socialising, both during shopping and for evening activities. The Co-op halls were central to working class life - hired out not just for weddings, funerals and dances, but to trade unions and other labour movement organisations. Turnbull and Southern describe them as “an alternative working class power base to the local middle class establishment.”[13]

In 1950, the Birmingham Co-op Dairy attracted 3,000 to its Sports Day. The society only employed 7,000. However, as Robertson points out, in Britain it faced much more competition from commercial leisure than in the rest of Europe. The reasons for participation were no doubt different from the motivations of the leadership and activists, just as was the case in regard to consuming other goods and services. With rising affluence, and the growth of consumerism in the 1950s, the Co-op found it was losing young people to these commercial providers.

The Rochdale Pioneers established a library and reading room above their premises and, from 1852, a proportion of the surplus was devoted to education. It was the only education available for workers in the 19th century. Even in the 20th century it remained important. The education committee of the Birmingham Society wrote: “We realise that without trading, our educational work could not be done, but there is another side to co-operation. The movement stands for human betterment. We seek to provide food for the mind.”[14]

Again it depended on the size of local societies, and again the spread of a consumerist attitude - this time the consumption of education provided by the capitalist state - undermined co-operative education, just as it undermined other forms of independent working class education. Ownership and control passed from the workers to the capitalist state. Where the churches took advantage of state education to finance their own schools, the Co-op did not. It did not see itself as an alternative to state capitalist education, but as an adjunct to it.

Marx and the First International had been wholly opposed to the idea of state education. Marx described it as “wholly objectionable”. The only role for the state, they argued, was in setting general guidelines. In a speech to the International Workingmen’s Association in 1869, Marx spoke of the system in Massachusetts, where the establishment of education was the responsibility of townships. He seems to have favoured this idea as a means of keeping the government out, but argued the need for national standards and inspection, as with the Factory Acts.[15] The IWA in its programme tied education to the employment of children, and argued that the cost of the education should be defrayed out of the products of that labour.

Marx was also totally opposed to the instruction of children in schools in anything that could be open to class interpretation: “Nothing could be introduced either in primary, or higher schools that admitted of party and class interpretation. Only subjects such as the physical sciences, grammar, etc were fit matter for schools. The rules of grammar, for instance, could not differ, whether explained by a religious Tory or a free thinker.”

Everything else they would learn from adults as part of their daily lives at work. That is they would learn the lessons of class struggle from adult workers. From this perspective co-operative education tied to worker-owned co-operative production makes sense, particularly as Marx argued the need to tie education to productive activity, which he saw as being vital to raise working class children way above the level of the children of the bourgeoisie.

The determination of Co-op educators was exemplified in London during the war: “For a period we were stunned by the avalanche of human misery and, with homes, classrooms and meeting places destroyed, the hard work of many, many years seemed to have come to an inglorious end. But, within a few weeks, there arose from the ashes new life, new hopes, and with commendable courage, Guild Youth branches, choirs and classes began to re-form. The need for co-operative education is greater now than ever before; we must ‘Build for tomorrow’.”[16]

The Co-op Union maintained education for members in the forces, devising correspondence courses for members and employees alike, and subjects included the co-op internationalist alternative to war. The problem was the lesson that a consumer Co-op gave in practice: that by owning capital and employing workers it was possible to acquire goods and services cheaply, and to make a surplus. That was a lesson capitalists had learned long before. This is one reason that Marx and the First International had argued: “We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system; the former attacks its groundwork.”[17]

They were not the only organisation doing that. From the early part of the century there had been a movement for independent working class education that sprang from the Plebs League and developed into the National Council of Labour Colleges (NCLC). They stood for no compromise with bourgeois education, and against the Workers’ Educational Association (WEA), which had been set up by sections of the liberal bourgeoisie to head off rising working class self-education, just as the emerging welfare state acted, as Marx put it, to destroy “all tendency to self-government”[18] - which is why he had demanded that the state keep its hands off the Workers’ Friendly Societies set up for that purpose.

State education was indoctrinating the workers’ children; the WEA sought to do the same thing with adult workers. Nevertheless, a continual struggle existed to win the TUC for independent working class education against the ability of the WEA to offer ‘professional’ lecturers, and considerably more resources. The Co-op worked with both the NCLC and WEA, though many activists believed that this undermined the Co-op’s own ideas.

As early as the 1930s the Co-op was also providing specific education for women. The Co-operative Women’s Guild helped members develop a range of skills. George Barnsby describes it as “a school of democratic action and empowerment for working class women, starting typically with a young, timid, inexperienced housewife and taking her through confidence-building stages until many were capable of speaking before mass national audiences and taking national and even international positions within the co-operative and labour movement.”[19]

Peter Gurney says that by 1930 the revolutionary potential of the Co-op had gone. In the post-war period, the rise of consumerism, and the greater strength and competitiveness of increasingly large stores, meant that the basic model of the consumer co-operative was undermined.

The weakness of Robertson’s book is that, although as a history it reveals some of the problems and weaknesses of consumer co-operatives, it does not really discuss the lessons or solutions. I have tried to do that as part of this review. One of the usual criticisms of the statist left against co-ops is that they cannot compete with private capital. The co-op clearly did. Established by small groups of workers in the most unfavourable conditions, the retail co-ops grew to dominate the retail space and acquired millions of members. And they expanded into production and wholesaling. Even today, the Co-op is the biggest farmer in Britain.

Globally, the number of co-ops has continued to grow over the last century, and they employ more people than multinationals, as well as dominating production or distribution for certain products in a number of countries. In Britain, however, the retail Co-ops lost their dominating position. But for a socialist to account for that simply by saying that it was due to the rise of consumerism is inadequate. The question would be, why could the Co-op not adapt to cater for that consumerism?

In part, I think the rise and fall of the retail co-ops is similar to the rise and fall of the USSR. The economy of the USSR grew extremely rapidly, when the things it had to do were quite straightforward. It began to fail when it went past that stage, and had to accomplish more complex tasks, particularly responding to consumer needs. Partly that was due to its continued primitiveness, partly to the attempt to prematurely plan a complex economy, partly to the lack of democratic workers’ control of production.

The co-op was established initially to deal with the problems of the adulteration of workers’ food and profiteering. By supplying good-quality products at low prices, it met workers’ basic needs and grew rapidly. In the absence of a welfare state it was able to succeed in providing some measure of worker-owned services in education and welfare. Its success in basic food retailing enabled it to expand into other retail areas.

But there was no requirement for the members of a consumers’ co-op to involve themselves in its running. They did not do so, and this enabled the management to increasingly exercise control as a bureaucracy. In a producer co-op, there are decisions that workers have to make every day, and so a culture of involvement, and democracy develops automatically. To the extent that such a co-op has to operate in a market, the individual workers as owners have a vested interest in ensuring that its production meets consumers’ needs, and that production is carried out efficiently. Again there is a necessary involvement of workers in participating in management and decision-making within their company. The retail co-ops prevented their own workers from exercising that role.

A wider history needs to look at the experience of other forms of co-operatives, in particular the worker-owned producer co-ops. At least in this book there is some discussion of workers’ self-organisation, whether it be in relation to co-operatives, or in relation to independent workers’ education. That is a beginning.


  1. Quoting C Fox, ‘The Corby story’ Agenda 1956.
  2. simple.wikipedia.org/wiki/Neville_Chamberlain
  3. www.marxists.org/archive/draper/1966/twosouls/5-lassalle.htm
  4. www.marxists.org/archive/marx/works/1864/10/27.htm
  5. J Bailey The co-operative movement London 1952.
  6. revolutionarydemocracy.org/rdv1n2/englletr.htm
  7. C Wrigley Lloyd George and the challenge of Labour Hemel Hempstead 1990.
  8. Kettering Co-operative Magazine May 1927.
  9. P Gurney The battle for the consumer in post-war Britain London 2005.
  10. www.marxists.org/archive/marx/works/1866/08/instructions.htm#07
  11. G Elvin, ‘The progress of the workers’ sports movement’ in Co-operative Wholesale Society People’s Year Book 1936.
  12. Co-operative Educator July 1920.
  13. J Turnbull, J Southern More than just a shop Preston 1995, p43.
  14. Wheatsheaf, Birmingham, May 1939.
  15. www.marxists.org/archive/marx/iwma/documents/1869/education-speech.htm
  16. LCS quarterly report, education section, December 7 1940.
  17. www.marxists.org/archive/marx/iwma/documents/1866/instructions.htm#05
  18. www.marxists.org/archive/marx/works/1866/08/instructions.htm#07
  19. G Barnsby Socialism in Birmingham and the Black Country 1850-1939 Wolverhampton 1998.