Chapter 1 - Nature of Co-operative Priciples (1986)

    This document has been made available in electronic format
         by the International Co-operative Alliance ICA 
                         May, 1986

        (Source:  Co-operative Principles, Today & Tomorrow
                     by W.P. Watkins, pp.1-17)
                           Chapter 1
               The Nature of Co-operative Principles

Par principles j'entends non les regles fixees par la coutume
cooperative, mais les postulats moraux d'ou ces regles
derivent- Georges Fauquet

By principles, I understand not the rules fixed by the Co-
operative custom, but the moral postulates whence these rules

Today the term `Co-operation' and the adjective `co-operative'
enjoy a greater vogue than ever. Their increased use seems to
have originated in the American branch of the English language
and spread rapidly to the others, mainly because the use of
English for international communication is becoming every year
more extensive. The term, as it is commonly employed, denotes
"working together" in any manner whatever and therefore
carries no precise meaning. When we employ it, as now, with an
exact meaning and, in particular, to refer to a certain
technique of working together, characteristic of a whole genus
of economic and social organisations calling themselves `co-
operative' and now found all over the world, we need to write
`Co-operation' with a capital C.

This is the `Co-operation' which is the subject of this book.
Wherein does it differ from co-operation? In this way - that
whereas co-operation stands for working together under any or
no stipulated conditions, Co-operation denotes working
together according to certain fundamental principles which
those taking part agree to observe.

To define the essential Principles of Co-operation is no mere
academic exercise. It presents itself as a practical problem,
for example, to the legislator. As Co-operation spreads from
country to country and governments appreciate its advantages
as an element in their national economic systems, some form of
legal provision has to be made for it, just as for any other
type of association engaged in commerce, industry or banking.
What kinds of association are to be recognised as Co-
operatives by the law, given its protection, invested with
legal personality and any further rights and privileges
government may see fit to grant? A definition is
indispensable, not only to mark off Co-operative association
from any other types of economic association which work on
different principles, but also to prevent bogus enterprises
pretending to be Co-operative from enjoying the privileges
intended for the genuine.

The very success of Co-operation and its extension around the
world, the passage of time, and the inevitable tendency of
institutions to ensure their own survival by coming to terms
with their environment, conspire to increase the risk of its
Principles being misunderstood, misinterpreted, diluted or
even perverted. This was true at every period of the Co-
operative movement's long history. As the success of the
Rochdale system of consumers' co-operation became known in
Europe more than 100 years ago, not a few societies were
formed by would-be Co-operators who, failing to see that the
system formed an integral whole, practised some Principles,
while rejecting others and adding others still which the
Pioneers did not practise. Those societies which did not
realise their mistakes in time collapsed form a complex of
causes: restricted membership, neglect of education, feeble
democratic organs, credit trading, political and religious
dissensions, besides general business inefficiency. At a later
period, the good reputation of co-operation, especially among
migrants from Europe to other continents, prompted
unscrupulous individuals to foist on a too-confiding public
self-styled co-operatives which were thinly-disguised private
ventures, hardly distinguishable from rackets.

Co-operation is also liable to attract the attention of
ambitious politicians or of political parties or religious
organisations making totalitarian claims on the allegiance of
their members. The Irishman who insisted in one of Horace
Plunkett's meetings that the dairy Co-operative then being
promoted should manufacture butter on sound Nationalist
principles has had his counterpart in many a country since,
where the wine of emergent nationalism has temporarily blurred
the people's vision. Where Co-operation is popular, the
ambitious politician may be tempted to climb on its bandwagon
but, in any case, Co-operation places power in the hands of
the people, and parties may be either jealous of that power in
itself or apprehensive of it becoming affected to other
parties. Where there exists a close personal connection
between Co-operative Movements and political parties, there is
always a risk of pressure on Co-operatives to compromise with
their Principles for party ends and, in these days of
centrally-planned economic development, of Co-operative
Movements being diverted from their natural or normal line of
advance in order to discharge functions determined, not by
their members seeking to meet their own needs, but by the aims
and doctrines of the political party in power.

This was the nub of the controversy which divided the
International Co-operative Alliance after the Russian
Revolution of 1917 and which became acute in the 1940's after
Communist governments had been set up in other European
countries following the westward advance of the Soviet armed
forces. Two mutually inconsistent arguments were advanced from
the Communist side. The first is that in Communist countries
Co-operatives are permitted and continue to practise the true
Principles of Rochdale in conformity with the conditions laid
down by the ICA for affiliation. The second is that the
Principles as formulated or interpreted by the authorities of
the Alliance are out of date in the 20th century and therefore
constitute an obstacle to the unity of the Co-operative
Movement on a world-wide basis. They ought therefore to be
revised and reformulated in terms, not of the laisser faire
economic policies of a century ago, but of the regulated and
planned economies of the present day. This argument is to be
found in the memorandum submitted by Centrosoyus (the Central
Union of Consumer Co-operative Societies) of the USSR to the
22nd Congress of the ICA at Bournemouth in 1963 to support a
resolution, eventually adopted with amendments, in favour of a
re-examination of Co-operative Principles. Hitherto, the reply
of the authorities of the Alliance had been first, that the
Principles of Rochdale were as valid then as ever they were
and, second, that they were not adequately observed by the
organisations called Co-operatives in Communist countries.

Yet another factor of confusion about Co-operative Principles,
possibly more potent and of longer duration than those already
mentioned, is the daily wear and tear of maintaining the Co-
operative position in fiercely competitive markets. Never was
this competition more severe than it is today for the old-
established Co-operative organisations of Europe and North
America. The temptation to sacrifice considerations of
principle to the need to counter the aggressive methods of
competitors by turning their own weapons against them, grows
stronger - all the more so where Co-operative managers and
administrators, even if proficient in business techniques, are
insufficiently grounded in Co-operative Principles and
therefore do not really understand the nature of the
institution they serve or how to turn the Movement's basic
ideas to competitive advantage.

This temptation was, of course, always latent in the
competitive situation of the Co-operative Movement, especially
as its material success became assured, its commitments
increased and development of established institutions
inevitably became an end in itself, obscuring the ultimate
purpose for which the institutions were created, while the
principles on which they were founded are obscured by gloss
upon gloss, expedient upon expedient. In the 1920's, the then
General Secretary of the International Co-operative Alliance,
Henry J. May, began to call attention to the dangers inherent
in this tendency and in the extent to which departures from
accepted principles were being tolerated or even advocated in
more than one country. The Congress of the ICA in Vienna in
1930 accordingly resolved that the Alliance should carry out
an inquiry among its members into the present application of
the Rochdale Principles. For this purpose a special committee
was appointed which reported to the Congresses of 1934 and
1937. Its reports were approved and, as a result of its
recommendations, certain amendments were made to the Rules of
Alliance designed to ensure that only those organisations were
admitted to membership which conformed, in their constitution
and modes of operation, to the Rochdale Principles.

This first ICA inquiry preluded a period of swift,
kaleidoscopic changes in economic and social conditions, as
well as in the political map of the world. In this period the
Co-operative Movement achieved world-wide extension, with a
notable growth in the non-European membership of the Alliance
in consequence. If this ever more diversified membership of
the Alliance is to be held together, if the necessary help for
Co-operative development is to be provided in the right
fraternal spirit from country to country and continent to
continent, if the opportunities of inter-trading and mutual
economic support in other ways are to be seized and turned to
advantage, then Co-operators of all countries must be clear in
their minds about the Principles which they hold in common and
which determine the character of Co-operation and differences
between it and State economic organisations, on the one hand,
and all kinds of profit enterprise on the other.

In an earlier paragraph, Co-operation was described as working
together according to certain principles which those taking
part agree to observe. Unfortunately, the word `principle' has
different meanings for different people. Almost anything may
become a matter of principle if any one is not willing to
compromise upon it. The first ICA inquiry encountered this
difficulty, for before it could deal with its proper subject,
namely, the application of the Rochdale Principles, it had to
determine what the Rochdale Principles were - and were not. In
fact it accepted some pretended principles and rejected
others, stating its reasons in its report. In contrast to the
editor of Hantschke's German translation of G.J. Holyoake's
History of the Rochdale Pioneers, who enumerated no less than
15 Principles, the ICA Inquiry Committee declared the
following seven features of the Rochdale system to be really
essential and therefore to be regarded as Principles:

1.   Open and voluntary membership.
2.   Democratic control - one member, one vote.
3.   Limited interest on capital.
4.   Dividend on purchases.
5.   Neutrality in politics and religion.
6.   Cash payments in buying and selling.
7.   Promotion of education.

Nevertheless, the Committee drew a distinction between the
first four and the last three items on this list. It was
considered that the adoption and practice of the first four
are essential to the maintenance of the Co-operative character
of any society or organisation. It may be observed that,
although the Committee was studying the rules and practice of
the Rochdale Pioneers' Society, which was a consumers'
society, it was really in search of the Principles which would
apply to Co-operative societies universally and which would
accordingly define the character of the whole Co-operative
genus. Incidentally, conformity to the first four, sometimes
in a slightly modified formulation, is required today of every
organisation applying for affiliation to the International Co-
operative Alliance as evidence of its genuinely Co-operative
character. In the case of producers' Co-operative marketing
organisations, for example, dividend would require to be
calculated on the basis of sales, not purchases.

In regard to the last three Principles, however, the ICA
Committee was obliged to admit that they - in its own words -
`while undoubtedly part of the Rochdale system, may be
regarded as essential methods of action and organisation,
rather than standards, the non-observance of which would
destroy the Co-operative character of the society'. The
distinction drawn by the Committee between `methods' and
`standards' seems to be valid in one sense, but not in
another. It can hardly be denied that the first four
Principles are absolutely vital to the Co-operative character
of any society or federation. All the same, they are just as
much `methods' as the other three. In fact, all seven would
probably be more properly termed practical rules which, if
faithfully and efficiently carried out, ensure that a society
will preserve its Co-operative character and, if not make a
success of its business, at least a void some of the commonest
causes of failure.

A commission of five members, three from Europe and one from
America who unanimously chose the fifth - an Indian - as their
Chairman, was appointed by the ICA Congress of Bournemouth in
1963 to carry out the second inquiry into the observance of
the Rochdale Principles. It took as its starting point the
final report of the first inquiry which had been accepted by
the Paris Congress of 1937. The Commission, working against
the background of a greatly expanded International Co-
operative Alliance and a vastly altered world economic and
political situation, had much wider scope for research and
immeasurably more assistance and collaboration from the ICA's
affiliated organisations, even though its aims were
substantially the same as those of the earlier Committee. The
Commission did in fact recognise the historical continuity in
the search for truth and clarity in defining Co-operative
Principles which link the precursors of Co-operation, who
anticipated the Rochdale Pioneers, with those who today are
endeavouring to realise the Co-operative idea in regions in
the early stages of economic development. The Commission
declared that its task proved to be one of `clearing up
confusion and removing unnecessary rigidity rooted in
unbalanced or over-simplified interpretations, a process of
refurbishing which permits the underlying Principles to shine
with a brighter light'. It also emphasised that Co-operation's
aims extend beyond the promotion of economic interests of
individual Co-operators to contributions to moral and social
values. These justify it being tested from this standpoint, as
well as from that of business efficiency.

The Commission's final formulation, which was not only
approved by the Vienna Congress of 1966 but also in part
incorporated in ICA Rules laying down conditions for the
admission of new members and the retention of their
membership, was as follows:

1.   Membership of a Co-operative society should be voluntary
     and available without artificial restriction or any
     social, political, racial or religious discriminations,
     to all persons who can make use of its services and are
     willing to accept the responsibilities of membership.

2.   Co-operative societies are democratic organisations.
     Their affairs should be administered by persons elected
     or appointed in a manner agreed by the members and
     accountable to them. Members of primary societies should
     enjoy equal rights of voting (one member, one vote) and
     participation in decisions affecting their societies. In
     other than primary societies, the administration should
     be conducted on a democratic basis in a suitable form.

3.   Share capital should only receive a strictly limited rate
     of interest, if any.

4.   Surplus or savings, if any, arising out of the operations
     of a society belong to the members of that society and
     should be distributed in such manner as would avoid one
     member gaining at the expenses of others.
     This may be done by decision of the members as follows:
     a)   By provision for development of the business of the
     b)   By provision of common services; or
     c)   By distribution among the members in proportion to
          their transactions with the society.

5.   All co-operative societies should make provision for the
     education of their members, officers, and employees and
     of the general public, in the principles and techniques
     of Co-operation, both economic and democratic.

6.   All Co-operative organisations, in order to best serve
     the interests of their members and their communities,
     should actively co-operate in every practical way with
     other Co-operatives at local, national and international

Comparison of the above text with the committee's list
submitted in 1934 reveals how much had been gained in clarify
and precision. The Commission emphasised the universality of
the Principles; they were to be observed by all genuine Co-
operatives at all times. It had given greater precision to
such concepts as `open' membership and `neutrality' in a
political and religious context. It limited interest payment
to share capital only, while allowing greater freedom in the
allocation of surplus to benefit individual members or social
purposes. Nor would it accept the 1934 Committee's idea of
obligatory and non-obligatory Principles -`No distinction of
degree of validity can be drawn between essential Principles'.
Co-operative education should extend beyond actual Co-
operative membership to the general public. And it declared
that co-operation between co-operatives for the benefit of
their members and the community at large was a Principle to be
observed at local, national and international levels.

What the Commission did not make clear the distinction between
Principles and practices. It rather tended to confuse them by
defining Co-operative Principles `as those practices which are
essential, that is absolutely indispensable to the achievement
of the Co-operative Movement's purpose'. In the last analysis
the proof of any society's or federation's fidelity to Co-
operative Principles is its practice. Yet a distinction may
justly be drawn between rules and practices on the one hand
and Principles on the other. The rules and practices, which
may be conventions and usages as well as strict and precise
formulations in a society's statutes, are the methods by which
the Principles are carried into effect. They are bound to vary
according to times and circumstances. In recent years,
consumer co-operatives have found it practically inexpedient
under contemporary trading, if not impracticable, to adhere
rigidly to the Rochdale rule of cash payments. Or again, the
rule of `one member, one vote', which is indispensable to the
practice of democracy in primary co-operatives consisting of
individuals, may be an absurdity when applied to unions or
federations which have a membership consisting of societies
differing widely in size. Insistence on this rule in the
Finnish Co-operative Union (SOK) was one of the factors
contributing to the split in 1917, when a large group of
societies seceded to form the KK Union. With the passage of
time, the old resentments have been appeased, but the two
organisations remain apart to this day. In contrast to the
practical rules, however, the Principles which inform and
justify them remain invariable. The Co-operative philosopher
Dr. G.Fauquet was fully aware of this when he pleaded, in the
International Co-operative Congress of 1934, that the
delegates should not attach as much - or even more -
importance to formal regulations as to the general Principles
which he called `postulates' which form the foundation of the

It is the general Principles, the elements in Co-operation
which are constant in all times and places, which constitute
the true object of the present study. The seven points of the
Rochdale system enumerated by the ICA Committee, in so far as
they are methods, are means and not ends in themselves. They
derive their validity and authority from the ends which they
serve, that is say, the ultimate values and verities on which
the concept of Co-operation reposes. It is a mistake, which
only adds to confusion, to call Co-operation itself a
Principle. Neither as idea nor as practice is it a simple,
primordial, elementary thing. It belongs to the category of
methods, techniques and systems. It owes its existence to the
urge to develop an art of social organisation satisfying and
reconciling certain vital human needs which are different,
often divergent and may even be, in some degree and under
particular conditions, conflicting. In the search, therefore,
for the primary elements of the Co-operative idea we are
obliged to take a different line of approach from that taken
by the ICA inquiries embarking on this task. However, it is
indispensable to emphasise their positive achievements.

Starting our inquiry afresh, it seems reasonable to seek the
elements of the Co-operative idea in certain fundamental and
universal facts or situations of human nature and experience.

First, there is man himself, a social animal, gregarious,
living in communities, dependent on his fellow-man, not only
for physical survival but also for spiritual stimulus and
growth. Association is instinctive but it is also deliberate
because of its advantages, expressed universally in the
proverb `Union is strength' and its many variants.

Second, there is the condition of man's continued existence on
this planet: labour to produce and distribute the necessities
of physical and intellectual life. It is through measuring the
results of their labour against the efforts and sacrifices
required to obtain them that men learn to manage their
resources and so evolve the idea of Economy. From the union of
Association and Economy springs division of labour, that
inexhaustible source of material benefits and higher standards
of living.

Third, what men produce by their combined labour must
necessarily be distributed. If production be social, most
consumption cannot help being individual. Distribution,
however, must not simply satisfy men's wants, but also their
moral sense by being fair, just and equitable, taking into
account individual contributions as well as individual needs.

Fourth, if men's combined labours are to be efficient and
fruitful, they must be well organised and directed.
Organisation demands a system of government, an accepted
authority for making and executing decisions on what shall be
done and how it shall be done. In modern times, in all sorts
of associations, the tendency is for those who exercise
authority to be answerable to the whole body of those for an
over whom it is exercised or, in other words, for government
to be more or less democratic.

Fifth, there is man's unquenchable aspiration to be free.
Though he is dependent on his neighbours, he also desires to
be, as far as possible, independent of them, in order to be
himself and to fulfil himself in his own way. In any event, he
gives of his best only when he devotes his energy to what he
freely undertakes, when his participation in combined effort
is not compulsory but voluntary - in short, when his will is

Sixth, man's life is one of continual adaptation - to his own
changing needs, as he grows through childhood and youth into
old-age, and to the social order around him. The life of human
societies, their security and well being attain a high level
only when men are enlightened enough to direct the forces of
nature and to accept the need of order and discipline in their
mutual relations. Education, including re-education, in this
sense is indispensable to social stability, welfare and

These elementary facts or needs form part of universal human
experience. For that reason they themselves, or ideas to which
they directly give rise, are accepted in varying degrees
everywhere as guides to social policy or institutional
development. Any economic or political system, if it is to
achieve stability and endure and, at the same time, if it is
to remain open to possibilities of progress, must come to
terms with them. The Rochdale Pioneers recognised this. It
says much for their penetration into social realities that, in
their celebrated `Law First' of their Society's Rules, which
set forth their immediate and ultimate aims, they stated that
they would need to `arrange the powers of production,
distribution, education and government' in order to establish
the self-supporting, united community of their dreams. But
what was true of their ideal community was no less true of the
business enterprise which was their immediate objective, and
there is no ground for supposing that the same insight did not
inspire the drafting of its rules - an insight which had been
sharpened by the struggle to live and bring up families
decently on slender means and, in times of slack employment,
actual want.

The Principles and general ideas embodied in the Rules of
Pioneers' Society were not the outcome of any man's wishful
dreaming but the production of reflection upon experience,
confirmed by the test of critical discussion over the better
part of two years. What is remarkable, significant and indeed
conclusive for the present argument is that the practice and
underlying ideas of the Rochdale Pioneers were subjected to
the test, not only of discussion, but also of the hard
realities of business life for over a century and were
confirmed again and again both positively and negatively.
Positively, where the Rochdale practice was adopted (not
fundamental ideas), consumers' Co-operative societies had the
best chance of survival as business undertakings against
competitive conditions, without sacrificing in any important
respect what may be called, for want of a better term, the
spirit of Co-operation. Negatively, rejection of the Rochdale
system, or of any important feature of its practice, was
repeatedly proved to be the surest way to failure in business,
as well as degeneration in a Co-operative sense.

No less significant is the independent growth of agricultural
Co-operative Movement, for agricultural co-operators, working
in other lands within a different background of experience and
with other objectives in view, arrived at a body of principles
identical in all essentials with the Rochdale ?System. Or
again, int he late 1880's it was not difficult for Horace
Plunkett, having decided that Ireland's need was for
agricultural rather than consumers' Co-operation, to draft the
rules of his first dairy society using the Co-operative
Union's model rules for consumers' societies as a basis.

It is perhaps now possible to sum up the argument by
elaborating our previous definition of Co-operative
Principles. Co-operative Principles are the general ideas
which inspire and govern the application of the Co-operative
technique of social organisation. These ideas result from
inductive reasoning upon experience of fundamental and
universal social realities. They lay down lines for the co-
operative solution of social problems to which those realities
give rise. The Principles are common to all forms of Co-
operation in all times and places. Their effective observance
is the test of the genuineness of Co-operative institutions
and a guarantee of sound and efficient Co-operative practice.
Corresponding to the six social facts enumerated earlier,
there are six Co-operative Principles, as follows:

-    Association (or Unity):;Economy; Equity; Democracy;
     Liberty; Education.

Later chapters will discuss each Principle separately, as well
as a seventh: Function (or Responsibility) which has hitherto
remained implicit in the Co-operative System rather than
explicitly stated, still less examined. There are, however,
certain general observations applicable to all the Principles
which can be most usefully made in the present chapter.

What is the authority of the Co-operative Principles just
enumerated? From what do they derive their validity and
possibly binding force? Before attempting to answer these
questions, it should first be emphasized that they do not
derive their authority from any individual, be he visionary,
prophet or teacher. It is not that many social prophets and
teachers have not in the past thrown light on the Principles
or called attention in an impressive way to the value and
importance of Co-operation. But it is commonplace of the
Movement's history that in Great Britain the common people -
the weavers of Fenwick in Ayrshire and the dockyard workers in
Woolwich - were experimenting with Co-operative methods long
before Robert Owen expounded his `New View of Society', just
as in other countries they were groping their way towards Co-
operation before they learned of Fourier's Phalanstery or the
success of the Rochdale Pioneers. The validity of Co-operative
Principles is founded upon the experience and common sense of
the many, not on a revelation made to or by a few. In the
words of Charles Gide, "Co-operation springs from the very
bowels of the People."

The basis of Co-operative Principles and their practical
application alike stand the test of scientific analysis. As
previously indicated, their definition has been reached by a
process which is essentially inductive and, as general
propositions, they can claim the same kind of validity in
their sphere as economic or sociological principles possess in
their respective sciences. If they possess a similar
authority, they are also subject to the same relativity. In
other words, they are liable to revision and re-formulation in
the light of fresh experience. Indeed, if they are to serve
the need of Co-operative action for inspiration and guidance,
and if the Movement is to preserve its dynamism, they must be
re-examined and re-interpreted by each successive generation,
as their practical application is demanded in novel forms in a
rapidly evolving world.

But if the Principles can claim an authority which is truly
scientific, they also derive authority from a source which may
be called pragmatic: the Co-operative Movement lives and
grows, not through its theoretical rightness or consistency,
but by its superiority in achieving practical ends. For that
reason, for many of its members and leaders, Co-operative
truth is what works. If we reject such a view as an over-
simplification and as leading in the long run to an over-
narrowing concept of Co-operative aims and practice, we are
bound nevertheless to admit that the authority of Co-operative
Principles is enhanced and reinforced by the successful
demonstration of their possibilities of application, both in
the past and in the present and future also.

The aims of the Movement are achieved, in short, not when it
proves theorems but when it solves problems.

The third source from which Co-operative Principles derive
their authority, although not all to the same degree is
ethical. One of them, Equity, is essentially ethical, but the
manner in which some of the others rest upon ethical
considerations and take on the character of moral obligations
can perhaps be illustrated by reference to another principle,
namely Association. As a Co-operative Principle, Association
rests primarily upon the massive fact of human solidarity.
Bemused as we often are by what some Hindu philosophers would
call the illusion of separateness, few of us realise, until we
reach such a book as Charles Gide's `La Solidarite', what a
pervasive, dominating and inescapable fact solidarity is and
always has been in the life of mankind. To recognise and act
upon it brings its own reward; just as to ignore or defy it
brings its own punishment by natural consequences. The Co-
operative Principle of Association goes, of course, much
farther than mere recognition of the fact of man's community
and mutuality of interests. It implies that Co-operators not
only accept the associations - family, community, nation -
into which they are born, but also seek other associations
deliberately and purposefully for the sake of the material and
spiritual advantages they offer and, above all, for the power
they confer on the associates so long as they remain united.

But beyond this again, when we recognise - and who can fail to
do so? - how swiftly contemporary means of communication and
transport, coupled with international division of commerce and
industry, are linking and binding together the remotest
peoples as never before in history, so that traditional self-
sufficiency and individualism are clearly seen to be not
simply impracticable as either private conduct or public
policy, but also positively harmful as a menace to security
and a hindrance to the spread of well-being throughout the
world, then the Principle of Association acquires moral as
well as scientific and pragmatic authority. In other words, it
embodies for Co-operators and others besides a moral
obligation, a duty to be fulfilled towards their fellow-men.
Of course, the fact that Co-operative Principles have an
ethical content does not link Co-operation with any particular
moral philosophy or definition of the ultimate good, such as
Happiness or the fulfilment of Duty. Nevertheless it does
explain why Co-operators of the various continents find
sanctions for the practice of Co-operation in the teaching of
human brotherhood or good neighbourliness common to the
different world religions or outlook they individually

If it be objected that neither Association nor any other of
the Principles here discussed is peculiar to Co-operation and
that the Co-operative Movement cannot make any exclusive claim
to principles which obtain more or less widespread acceptance
and application in the world at large, two observations may be
made. Co-operators are fully aware, none more so, that the
capitalist system, as it evolved, tended to abandon the cruder
kinds of individualism and make constantly greater use of the
Principle of Association. The rings, cartels and trusts which
Co-operative organisations consistently oppose are the outcome
of processes of horizontal and vertical integration not
unlike, in certain respects, those which the Co-operative
Movement itself employs in the course of its development.
Another striking example is the speed with which in the 1950's
the smaller retailers in several countries banded themselves
together in voluntary chains and even established
international connections, in order to counterbalance the
advantages enjoyed by their mammoth competitors, the
supermarket companies.

Moreover, so far as the Principle of Democracy is concerned,
the Co-operative Movement is one of a large family of people's
movements which includes the trade unions, the mutual benefit
societies and many kinds of voluntary association, all
democratic in constitution and spirit.

Co-operators never claimed to have discovered or invented
these Principles but merely to apply them consistently to the
promotion of social welfare. Driven by hardship, insecurity,
oppression and injustice to examine the fundamental realities
of society and to build a better social system than that under
which they suffered, they selected Principles which they found
to be applied in the world at large in a limited and haphazard
manner, often in conflict with one another. Their criticism of
contemporary capitalism, for example, was - to use our present
vocabulary - that is pursued Economy with no regard or respect
for Equity, Democracy or Liberty. It permitted the
distribution of the social product to be determined by those
with the greatest bargaining power in the market. It
suppressed the self-direction of the craftsmen and replaced it
by autocracy in the workshop and slavery to machines, even
though it may have grudgingly tolerated some approach to
democracy in civic and political life. That economic progress
has been made and social welfare enhanced under capitalist
auspices it would be idle to deny, but against these gains,
there is a heavy debt of human deprivation, misery,
insecurity, and international and social strife.

On the other hand, the merit of the Co-operative Movement and
what is in fact peculiar to it is the coordination and
balancing of fundamental Principles in institutions and
practices tending to maximise social welfare. Its supreme
virtue is its capacity for concentrating in action year in
year out, so much that the consensus of men and women,
irrespective of race or creed, can accept as right and good.
This is the virtue which has enabled Co-operation in a century
and a half to spread out from Europe to the ends of the earth
and which justifies its aspiration to become universal, not
merely in extent, but also through its application
intensively, in the Owenite phrase, to `every purpose of
social life'. Human fallibility will always ensure that Co-
operative practice has its limitations and imperfections, but
so long as the Movement effectively applies its Principle of
Education, the possibility remains that it will approach
indefinitely the perfection which is its proper end.