Chapter XXVII


Any agency which diminishes conflict between capital and labor conduces to local peace, assuages discontent, removes an incentive to enlistment for war, and helps to stabilize society. In Europe the consumers' cooperative movement is largely promoted by the industrial working class. Their sympathy for cooperation is expressed both theoretically and practically. Workers employed in cooperative consumers' societies are in a peculiar relationship to their employer. The society for which they work is a federation of individuals. Each employee is a member of the society for which he works. He himself is one of his own employers. As an employer he has one vote in the affairs of his society. No one has more. As a worker he knows that he has as much voice in determining his wages and conditions of labor as any one else. This does not mean much, it is true, because as a worker from a parliamentary standpoint he is in a minority. This is a relationship that is different from profit business where autocracy prevails and the worker has no voice except such as he secures through his trade-union organization or stock ownership.

Mechanism for arbitrating differences between employer and employee in the cooperative movement is more effective than in profit business. Strikes in cooperation are rare in comparison. A reason for this is that in cooperative employment workers receive higher wages and enjoy better working conditions than in competing business. Profit business if it had the intelligence to do so could stabilize itself by paying labor a fixed and definite percentage of profits. Capital and labor could share profits if labor would agree to share the losses. Guaranteed annual wages could be paid if labor would guarantee to work a specific number of hours annually. Cooperative business is leading the way in this relationship between employer and employee.

Economic instability in the United States is related to loss of civil rights. Minority races, such as Negroes, are deprived of civil rights because by so doing they can be deprived of economic rights. Where these people can be regarded as inferior, objectionable, or dissimilar, they can be deprived of legal rights. People who are denied legal rights are easily deprived of economic equality or even economic rights. The cooperative way of business is based on democracy; it has to use democracy as a working method or it fails. Whatever makes for democracy makes for stability of civil and economic rights. Violation of these rights makes for instability and war.

Workers are more secure in their employment in cooperation. Labor turnover is less than in other business. During the labor depression following 1929, cooperative societies steadily increased their number of employees, while profit business was decreasing the number of its workers. When we examine countries in which cooperation is most highly developed, there business is found most stable. During the depression years immediately following 1929, when profit business suffered a serious collapse, no failure of a consumer cooperative business occurred in such countries as Sweden and Finland with great cooperative movements. In forty countries whose national cooperative societies are in membership in the International Cooperative Alliance, while workers in profit business were losing their jobs, cooperative societies were constantly adding to the number of their employees. In Great Britain, for example, at the beginning of World War I the total number of employees in the cooperative consumer societies was 148,264. From 1914 to 1938 the number of employees increased each year. During the worst years of the depression there was an increase of employment in the cooperatives. More than 32,000 new workers were taken on by British societies from 1929 to 1933. Today British employees number more than 300,000, twice as many as at the beginning of World War I. In World War II profit business prospered except in invaded countries. Supplying the armies prevented unemployment. But in all countries not under totalitarian government, cooperation expanded. This is, in general, the picture throughout the world. This is cooperation's answer to the undemocracy of unemployment.

The harmonizing effect of cooperation is seen in farmers' associations. Three national organizations of farmers are contending against one another throughout the United States. In some states one has won supremacy and in others another is dominant. But in the consumer cooperative movement leaders of these competing organizations unite in harmony. In the Board of Directors of The Cooperative League of the U.S.A. have been leaders of the Grange, of the Farmers Union, and of the Farm Bureau. No question concerning their differences ever comes before consumer societies; and representatives of these organizations, as representatives of consumers' societies, work in harmony. Their members are found united also in retail distributive societies. Their federations, the cooperative wholesales, have representatives of all three farmers' organizations on their boards of directors.

The interest of consumers' organizations is not a class interest but a general interest common to all people. This is seen exemplified in action taken recently by consumers' societies composed of farmers, which opened their membership to non-agricultural city dwellers. In Ohio, Pennsylvania, and western states, farmers' oil societies are inviting town people to become members and are setting up oil stations for their accommodation within the town limits.

Besides the harmonizing effect between employers and labor, and between consumers and producers, cooperative business stabilizes industry by minimizing business failures. This is important, because with every failure, people are thrown out of employment, capital is lost, and economic instability is worsened.

In the United States are to be seen abundant evidences of cooperative efficiency. Among the 2,460 societies in the membership of The Cooperative League, failures since 1929 have been inconsiderable when compared numerically and proportionately with failures in competing profit business. Failures of cooperative societies are usually due to lack of cooperative education within the society. An accountant says of American societies: "Failures among cooperatives have been remarkably few. There is a toughness in them that often amazes me." Cooperatives, that follow cooperative rules, do fail. Failures can be predicted because they are due to violations of definite and well recognized cooperative methods.

In the United States, the 10,000 cooperative banks, or credit unions, are, with the exception of the Postal Savings Banks, the safest banking business in the country. It is the same with cooperative insurance, now the most efficient, most equitable, and cheapest insurance in the world.

It is notable that amidst the crashing of all kinds of profit business during the depression between the two World Wars, there was no instance of the failure of a cooperative consumers' manufacturing business in any of the countries whose wholesales are in membership in the International Cooperative Alliance. Some of these wholesales are large businesses. Among the 160 manufacturing businesses of the British wholesales some are the largest manufactories in Great Britain. There are countries such as Sweden, in which it is properly said that a cooperative society can not fail, although in these countries during the 1930 period some of their biggest capitalistic businesses went into insolvency.

While these conditions may seem not closely connected with war and causes of war, whatever tends to stabilize society, to allay discontents, and to promote economic security operates as a force against war. The less clash and conflict of one class against another, and the less discontent there is among the masses, the less are men prone to entertain hostile attitudes toward others. A people at peace with one another constitutes a peace-loving people. National peace is the first guarantee of international peace.

Unemployment which characterizes capitalism and which is promoted and desired by capitalism does not characterize cooperation. Unemployed are the people who flock to the recruiting stations and feed the army and navy with new life. People with no jobs want changes that war brings. People with nothing, who have much for which to hope and nothing to lose, are dangerous people. War between the Have and the Have-not nations will always be a danger so long as at least half the people of the world can not achieve decent standards of living. Adequate housing, food, clothing, health service, education, and recreation must be attained as agencies of peace. Supplying just these essentials is the special province of cooperation. In the presence of expansion of cooperative business the general sense of security is greater. Insecurity makes war easier. Where business and employment are stabilized, war is not wanted. The cooperative method promotes social and economic stability, and thus becomes a factor in prevention of war.

Since differences always arise among human beings, the principle of arbitration is essential to peace. Cooperative societies establish a machinery to settle disputes between employees and the employing society. This is nothing more than exists in profit business. However, arbitration is more effective and more seriously esteemed in the cooperative movement.

In some countries a mechanism is in operation which promotes harmony between cooperative employer and employee. A joint board is created within the society, consisting of an equal number of workers and of representatives of the society. Disputes between labor and the society must go to this board for arbitration. In the event that the board can not agree upon a decision, the question is referred to the district board similarly composed. The most important reason why disputes and strikes are less frequent in cooperative than in profit business is that the employees have a different attitude toward their employer, and the employer has a different attitude toward employees. In the cooperative society, the worker has sympathy with the business that gives him his livelihood; he knows that the business is fair and not for the purpose of making money from anybody; he has an appreciation of its social importance; and for these reasons he is less prone to provoke need of arbitration.

The majority of members of cooperative societies are usually working people, and sympathetic to labor. It has often happened that a board of directors of a cooperative society, as business agents of the society, have made decisions which the general membership has revoked or disapproved because decisions were not sufficiently generous to employees. While there are many exceptions to this sympathetic relationship, still it is a factor in preventing disputes. And when disputes do arise machinery for arbitration is generally effective.

Cooperative arbitration societies for the specific purpose of arbitration of disputes of every kind are in operation. Hundreds of these organizations exist in India. The members agree to bring before the tribunal of the society any dispute or grievance which might require to come before a court of law. The arbitration societies are taking the place of political law courts. The procedure is simple. Costs are low. The people abide by the decisions even though there are no police or jails to enforce the decrees. These societies illustrate the rule that public sentiment is more powerful than coercive forces of government.

Cooperative arbitration societies are a contribution of the cooperative movement to the cause of peace. They demonstrate that the people, without the interposition of political government, can settle disputes. This is without recourse to force or even the coercive state. The cooperative method shows the world a way to solve problems which without arbitration lead to conflict. By taking this page from the cooperative book, the peoples of the world might find here a method applicable to their most distressing international problem. The United Nations, or whatever supernational organization is acknowledged by the nations of the world, may well be constituted after the cooperative pattern. Its purpose can thus be implemented to serve its constituent elements. The cooperative method is a stabilizing influence locally and internationally.

Cooperation is a way of life representing an economic method of production and distribution that promotes peace. Money, invested in cooperative business, and jobs in cooperative employment are more secure than in profit business. Cooperation stabilizes commerce, and tends not only to prevent recurring waves of depression, but it also makes for prevention of the social discontents that detach men from home and security.


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The content and opinions expressed on this Web page do not necessarily reflect the views of nor are they endorsed by the University of Georgia or the University System of Georgia.