Chapter 2 - Association or Unity (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.18-35)
                         -------------

                 *************************
                         Chapter Two
                    Association or Unity
                 **************************

The Principle discussed in this chapter appears under two
names for no other reason than that it is often more
convenient to use one rather than the other, according to the
context. Association is perhaps more appropriate in
considering the origins and early stages of Co-operative
Movements every where, that is, the coming together of persons
or social groups hitherto standing apart or mutually
independent. Unity, on the other hand, seems the handier term
when discussing, as this chapter will do before it concludes,
the structures and policies of Co-operative organisations. At
all times, however, the meaning is the same; the idea of
individuals or entities joining together, coalescing,
combining, integrating and remaining united in order to
satisfy common needs, achieve common ends, or derive mutual
advantage from their association.

Nor need it be any occasion for stumbling at the outset that
the ICA Committee of 1930-37 should not have included
Association in its list of Rochdale Principles or that the
Pioneers themselves said little about it. Both parties were so
deeply committed to it that they took it for granted. Much
more important is the fact that the Pioneers not merely
practised association within their own society, but also
applied it, in conjunction with neighbouring societies, in
solving some of the most vital of their problems, notably
wholesale purchase and supply. Least of any, however, should
the present generation of Co-operators take the Principle of
Unity for granted or regard it as too obvious to need
discussion. More than a century of Co-operative practice since
the Pioneers has served only to enhance the importance of the
Principles and its role in Co-operative policy and structural
development on all levels, from the local to the international.
Some of the most difficult, not to say desperate, problems now
confronting the older national Co-operative Movements threaten
to prove intractable, largely because the Principle of Unity has
not been sufficiently appreciated and discussed - and in
consequence, understood and intelligently applied. Contrary to
the opinion expressed by certain authorities, who regard
Democracy as the fundamental Co-operative Principles, the present
writer holds that Unity is the most vital of the seven. Unity is
the source of whatever power any Co-operative Movement acquires
or wields. Its maintenance is the indispensable condition of the
effective observance of the other six Principles-its impairment
or propagation in false forms or on wrong bases is the worst
injury that can be inflicted on the Movement. It carries an
overriding authority to which all the other Principles may all
be obliged in the last resort to defer and it has therefore been
taken first for individual examination in the present work.

Significantly, if some what late in the day, the Principle, in
the guide of `Co-operation between Co-operatives', was
recognised by the ICA Special Commission of the 1960's. It
appears last in the Commission's list because it was
considered after the list in the 1937 Report had been examined
and amended. Its adoption was proposed by Howard A. Cowden,
who had himself played a leading role in the evolution of the
Consumers' Co-operative Association into Farmland Industries
in the USA and the establishment of the International Co-
operative Petroleum Association. Cowden declared that he had
been mandated to put forward his proposal by the Co-operative
League of the USA. He had not the slightest difficulty in
securing ready acceptance by the other four members of the
Commission and their collaboration in its final formulation
which was in due course adopted by the second Vienna Congress
in 1966.

Historically, the need for conscious affirmation of
Association as a doctrine arose from the fact that, when the
Industrial Revolution of the 18th and 19th centuries broke
over Europe, the social nature of man was insufficiently
realised or understood. Economic science was in its infancy,
but unfortunately was taken as revealing more truth than it
had in fact discovered. Other social sciences, which might
have corrected or modified the doctrines of the economists and
their over-simplifying popularisers and which in time actually
did so, were not then existent. The very fact of society
seemed to vanish from the minds of men dazzled by new
technical inventions and their promise of unlimited riches.
But if the sciences did not yet exist, the facts were there -
the competitive struggle for wealth and the consequences of
covetousness and ignorance, the exploitation, degradation and
misery of the economically weaker, trodden underfoot in the
struggle for a livelihood. The 20th century parallel of this
atomised society may now be seen in the great seaports,
industrial centres and mining settlements of the newly-
developing countries, where the new proletariat, created by
the impact of modern economic organisation on ancient ways of
life is to be found.

No countervailing or remedial action could be expected without
a powerful assertion of the truth of solidarity and the value
of Association in the fact of the prevailing individualist
value of Association in the face of the prevailing
individualist orthodoxy. That was the life's work of Robert
Owen. At New Lanark, Owen tried, with a great measure of
success, to weld into a community the assorted collection of
rootless, immigrant workers and their families who had
gravitated there in search of employment and who depended for
their livelihood on his mill. After he left there, he went on
throughout his long life preaching community, co-operation,
socialism, whatever was fashionable at any time - in other
words affirming the necessity of Association for normal,
balanced, healthy, human life. It was Owen's preaching which
gave inspiration and direction to the instinctive mutual aid
among British working people already taking shape in their
trade unions, mutual benefit and Co-operative societies. From
the marriage of Owen's community idea with working class good
neighbourliness and common sense sprang the Co-operative
Movement in Great Britain.

While the debate about competition and society continued in
time and widened in space with the extension of machine
industry and the factory system. Owen's community idea and,
more particularly, its practical realisation were expounded in
England by William Thompson and Dr. William King. In
contemporary France the ideas of Saint-Simon, who prophesied
an age of organisation, of Fourier, one of a number who
projected ideal communities, of Buchez, who advocated self-
governing workshops, contained formidable criticism of the
competitive market economy and set the minds of many
thoughtful men on the track of Association and Co-operation as
constructive alternatives. In Germany the plight of the
handicraftsmen and peasants during `the hungry 40's' moved
Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen to
attempt practical organisation tending in the same direction.

If in the middle of the 19th century competition appeared to
gain somewhat in scientific authority from popular over-
simplification of Darwin's evolutionary theories, Association
later gained even more from the studies of the Russian social
philosopher Peter Kropotkin who not only demonstrated the role
of mutual aid in animal and human society and the evolution of
man's moral qualities, but also revealed the new opportunities
for associated labour offered by modern technology. From the
middle of the 19th century, the pendulum began to swing back
from extreme individualism. In the half-century between 1840
and 1890 the four basic types of Co-operative (the consumers'
society, the workers' productive society, the credit society,
urban and rural, and the farmers' marketing and processing
society) had been worked out and in a number of European
countries had demonstrated their value and their ability to
survive. The argument for unlimited competition went by the
board when capitalist industry itself recoiled from it and
sought refuge in collusion through the familiar forms of
vertical and horizontal combination which are all-pervasive
today.

The primary objective of Co-operative associations, whether
their founders or members do or do not dream of far-reaching
social consequences, is normally to obtain power over the
nearest part of the economic mechanism on which their
livelihood or standard of living depends. They associate in
order to perform the functions of ownership, organisation,
direction and risk-bearing ordinarily discharged in a market
economy by individuals or groups of entrepreneurs. Urban
consumers set up retail shops, urban artisans people's banks,
industrial wage-earners workers' productive societies,
peasants or farmers rural credit or agricultural supply,
marketing and processing societies, and so on. The various
economic advantages they thereby secure are reserved for
discussion in the chapter on Economy. The important feature
for our present purpose is that Co-operative societies of
whatever kind are mechanisms for the generation and employment
of economic power, which is mostly out of their members' reach
as individuals. In a market economy, the simplest form of this
power is bargaining-power which the associates may exercise as
either buyers or sellers. The bargaining, i.e. purchasing
power of a single consumer, even if he or she buys for a large
family, may be negligible; the purchasing power of a thousand
in a local market will probably the appreciable. The
purchasing power of hundred thousand can dominate the retail
market of a big city, that of a million can influence a
nationwide market, when they concentre it in the hands of a
single buying organisation.

This bargaining power is, of course, not dissimilar in kind to
that exercised by trade unions in the labour market. However,
in order to be effective, it needs to be exerted in a rather
different manner. Consumers' strikes are not unknown, but
experience suggests that consumers' purchasing power yields
more satisfying results when it is not expended in spasmodic
actions, but embodied in permanent institutions of which the
Co-operative society is one of the most important. In
Principle, Association tends to lighten the burden of
competition resting on the individual consumer or producer,
and may often shift the balance of competition form one to the
other side of the market. In the marketing of certain kinds of
agricultural produce, Association enables the peasant with
produce to sell to cease going in search of a buyer and may
compel the buyers to come to the co-operative in search of the
product. This is the effect of the system of sale by auction
adopted in Holland by the Co-operatives of vegetable, fruit
and flower growers, in whose warehouses the buyers may be seen
bidding against one another by pushing a button, while a
rotating pointer passes over the price-figures painted on a
large dial.

Association confers power on the economically powerless by
providing them with a means of making their numbers tell.
Other things being equal, that is assuming competence in
organisation and business policy, the greater the numbers, the
greater the power and the greater the benefits to be shared.
Co-operative associations are therefore almost invariably open
associations, membership in which is deliberately kept open to
all who have a use for the services which the associations
provide. In the case of consumers, interested in purchasing
the necessities of life, the application is obvious and the
tendency, as consumers' Co-operative movements grow, is to
make entry easier by reducing to a minimum the formalities of
registration and the down-payment required. For example,
shares are often paid, up to the minimum holding prescribed in
the rules, not in cash, but by the retention by the society of
part of the dividend due to the member on his or her
purchases. For obvious reasons, the societies normally reserve
the right to protect themselves against notoriously bad
characters or persons likely to cause disruption, but in the
normal way the rule of open membership is applied without
discrimination.

The case of certain of the producers' societies is somewhat
different. Most of the services provided by agricultural Co-
operatives are of interest only to farmers or cultivators, but
it is nevertheless often observable that membership of credit
or supply societies is open to any member of the rural
community.

The most difficult case is probably that of the workers' co-
operative productive or labour contracting society, membership
of which can be affected one way or another by the employment
situation. If business is booming such societies may be
obliged to engage supplementary or auxiliary workers in order
to fulfil their contracts, but they will never grant their
workers full membership rights until they have had an
opportunity of proving in the factory or other work place that
they are technically competent, of good character and likely
to take seriously their responsibilities as members if they
are admitted. On the other hand, in industries which absorb a
high proportion of juvenile labour, particularly young girls
who expect to give up their employment on getting married or
soon afterwards, workers' productive societies have
encountered great difficulty in persuading workers to apply
for full membership.

To sum up, it may be said that, while certain practical
limitations on the practice of open membership, dictated by
common sense in the light of external circumstances, are
admissible, the Principle of Association is violated when any
Co-operative society refuses admission to membership in order
to restrict the enjoyment of its benefits to a limited circle.

Associations does not confer bargaining power alone. Societies
which are so efficiently managed as to maintain their position
in the market and also expand enable their members to acquire
economic power in other ways. Successful Co-operatives make
for their members both collective and individual savings,
which may be employed as capital for their common advantage.
The members acquire individual savings through sharing in
their society's trading surplus in proportion to the volume of
business they do with it. They may not be obliged to withdraw
these dividends or patronage refunds but may leave them on
deposit to be employed in the society's business operations.
The members accumulate collective savings by not distributing
the whole surplus but setting aside reserves, creating special
funds and depreciating more or less heavily their society's
property and equipment. This self-capitalisation, especially
when it is carried out a national scale by federations of Co-
operative societies, is a method of generating economic power
of the utmost importance. It has employed, for example, by the
consumers' Co-operative Movements of Switzerland and the
Scandinavian countries with remarkable results through a
further application of the Principle of Association we are now
to consider.

On the evidence of their `Law First', the Rochdale Pioneers
intended their society to follow the pattern set by Dr.
William King in The Co-operator and grow by a process of
intensive development into a self-supporting community
providing its members with employment as well as their daily
needs. In so far as the Pioneers envisaged collaboration with
other societies, it was for the purpose of establishing
communities. Yet in the event, when collaboration began on a
permanent basis, it was for another purpose with entirely
different consequences for the development of the Movement.
The practical problem to be solved was the organisation of the
wholesale purchasing on behalf of the societies and the
avoidance of competition between them in regional wholesale
markets at such centres as Manchester. The solution was found
by the usual process of trial and error. After experience with
a wholesale department, managed by the Pioneers, from which
the smaller societies drew supplies, and with the Central Co-
operative Agency, which was set up for the societies rather
than by them, the leaders of the Rochdale and neighbouring
societies concluded that the only true and satisfactory
solution lay through a further application of the Principle of
Association. They accordingly decided to proceed from the
association of individuals to the association of Co-operative
societies by constructing, on the basis and with the
participation of the primary societies, a Co-operative
organisation of the second degree, federal in constitution,
which without infringing the self-government of the societies,
should undertake certain common services for them. This
organisation, conceived at first as serving the North of
England, grew rapidly to national dimensions and, as the Co-
operative Wholesale Society Ltd., celebrated its centenary in
1963. It inevitably became the model to be reproduced, with
appropriate modifications, by the younger consumers' Co-
operative Movements of Europe and other continents.

The further advantages brought by the concentration of the
purchasing power of consumers' Co-operative societies in
federal wholesale organisations can accordingly be described
in general terms applicable to virtually all of them. As in
the primary societies, federation makes possible a
concentration of capital, at once through the deposit with the
wholesale of funds which the societies have no immediate need
to employ in their own business and through retention by the
wholesale of a proportion - larger or smaller according to
policy - of its trading surpluses, instead of distributing
them as dividends on purchases. The combination of purchasing
power, backed by an assured market, with capital resources
enables the wholesale organisations to gain a foothold,
whenever expedient, and often fairly early in their
development, in import trade and manufacturers, as the CWS did
in its first 10 years. They are thus able to embark upon the
integration, under the ultimate control and for the sole
benefit of the consumers enrolled in their member-societies,
of a series of economic operations reaching back towards the
sources of raw materials. At each stage of the productive
process, given reasonably efficient management, the wholesales
are able to retain for their members the equivalent of what
would otherwise be the profits of manufacturers and merchants.
The advantages of Association in the second degree thus tend
to be cumulative.

A notable example of rapid and powerful integrated development
is given by one of the best-known regional Co-operative
organisations in the USA, the Consumers' Co-operative
Association, with headquarters at Kansas City, a main
department of whose business is the supply of petroleum
products to a membership consisting chiefly of farmers. From
the time the tractor began to replace the horse as a source of
power, the prices of gasoline and lubricants became an item of
growing importance in farmers' costs of production. These
prices were manipulated by the petroleum-producing and
distributing combines. The farmers accordingly set about
reducing them by setting up their own local Co-operative
gasoline and service stations. From this beginning in the
1920s, they worked their way, by bulk purchasing through the
Consumers' Co-operative Association, to the ownership of
cracking plants and refineries and ultimately to their own oil
wells and pipelines. Although they did not obtain all the
supplies they needed, they did secure an important part of
their requirements from their productive and distribute
system, could keep an efficient check on costs and prices, add
to their revenues from remunerative by-products and capitalise
the profits in order to establish parallel series of
enterprises which justified their change of title to Farmland
Industries.

The embodiment of the Principle of Association in federal
organisations is a pattern of development in fact normal and
common to all Co-operative Movements. Just as consumers'
societies in retail trade federate in wholesale societies, so
credit societies unite in regional or central banks, the
primary societies for the collection, storage, and first
processing of agricultural produce into marketing federations
such as the great Canadian wheat pools or the coffee unions of
what was then Tanganyika, and so on. Nor is federation limited
to trading, production and finance. All kinds of non-
commercial services are provided by associations, under
various titles, of Co-operatives. These are mostly national in
extent and serve as centres for technical advice, staff
training, publicity, the diffusion of Co-operative ideas and
information through books and periodicals, the representation
before governmental authorities of Co-operative interests and
views on public policy, and the maintenance of contact with
Co-operative Movements in other lands. They express and
conserve whatever sense of unity exists among the Co-operators
of the same branch of the Movement in the same country, as
well as their feelings of fraternity with co-operators
elsewhere.

The application of the Principle of Association could not stop
and, in fact, has not stopped short at national frontiers.
Consumers' Co-operative wholesales seeking supplies for their
members are driven into world markets, just as are the
producers' marketing federations which need direct contact
with buyers abroad. Both kinds of organisation sooner or later
establish regular trading connections and even depots and
offices in other continents than their own. Possibilities of
international inter-Co-operative trade were foreseen and
discussed at the London International Co-operative Congress of
1895, when the International Co-operative Alliance was
founded. Association in the form of permanent organisations of
the third degree with a membership drawn from a number of
countries was logically indicated. Practically, however, it
has been somewhat slow in developing.

The International Co-operative Alliance corresponds in its
constitution and functions to the national non-commercial
federations mentioned in an earlier paragraph. Throughout its
existence it has symbolised the belief of leading Co-operators
that their Movement should bring together, in combined efforts
to establish a better world economic and social order, men and
women of goodwill, irrespective of nationality, race, creed or
politics. Despite the interruptions resulting from two world
wars, the Alliance has maintained its unity and grown steadily
as the Co-operative Movement, in country after country in the
different continents, has reached national dimensions and
created institutions able to undertake international
responsibilities. The Alliance is not restricted in its
membership to any particular types of co-operative enterprise,
but accepts as members all which are genuine of their kind.

Apart from the Alliance, it is possible to point to a few
other organisations which demonstrate what is not only
desirable but possible. The most outstanding is undoubtedly
the Scandinavian Co-operative Wholesale Society, Nordish
Andelsforbund. This is the joint purchasing agency set up in
the First World War by the wholesale societies of Denmark,
Norway and Sweden which were later joined by the two Finnish
and Icelandic wholesale societies. For them it carries on
buying operations, mostly outside Europe and especially in
tropical countries. Its success prompted the formation in the
middle 1950's of a parallel organisation for export trade,
Nordisk Andels-Export.

Back in the 1930's the impetus imparted by the growth of the
petroleum trade of the Consumers' Co-operative Association led
its then director, Howard A. Cowden, to propose the formation
of an international Co-operative association to handle fuel
oils and lubricants. The Second World War delayed practical
operations but the project was revived soon after the war
ended, and realised in fact by the formation of the
International Co-operative Petroleum Association which
continued throughout the 1950's to add to its membership of
national co-operative federations, mostly, though by no means
entirely, consumers' Co-operative wholesale societies. In the
1960's it was felt that enough experience and confidence had
been gained to justify a policy of expansion and the
Association set up in Holland in 1963 what was intended to be
the first of a number of processing plants located in various
countries. The idea of joint purchase on the international
level of farm supplies, notably fertilisers, was first applied
about a generation ago by certain of the European agricultural
Co-operative wholesale societies, for which the Central Bureau
at Rotterdam acted as agent. It is noteworthy that the Central
Bureau has in recent years joined the International Co-
operative Petroleum Association.

So far the application of the Principle of Association has
been discussed mainly by reference to the federation of Co-
operative organisations of the same type. These, of course,
are much more numerous and conspicuously successful than joint
organisations of Co-operatives of different types. Unity to
promote common interest is obviously easier to achieve and
maintain than unity to promote differing interests, even
though they may be mutually complementary. In other words,
organisations of producers `or' consumers offer fewer
difficulties than organisations of producers `and' consumers.
Sometimes the very fact that they are strongly organised
separately seems to militate against mutual understanding and
joint action between Co-operative producers and consumers. It
is worth noting, however, that here and there, even in Europe,
where the distinction between the two types of organisation is
sharpest, joint institutions have been set up and mutually
advantageous trading relations have been established on a
permanent basis at local, national and international levels,
witness the following examples. In the city of Geneva, the
retail distribution of milk  was carried on for over 30 years
by a society in which the local consumers' co-operative and
the co-operative of dairy farmers who supplied the milk were
partners.  The arrangement was terminated when the changing
structure of retail trade made it necessary for the consumers'
society to take sole responsibility for distribution. On the
national level, the French consumers' and agricultural Co-
operative Movements operate an agreement laying down the
general conditions under which inter-trading is carried on
between agricultural and consumers' societies. On the
international level may be mentioned the organisations created
jointly by the English CWS and the Co-operative marketing
federations of several Commonwealth countries for the sale of
agricultural products, e.g. New Zealand butter, in the United
Kingdom, partly though not entirely through the consumers'
societies.

The problems of inter-Co-operative relations form part of a
series of questions involving applications of the Principle of
Unity which are grouped today under the general term of
integration. In any national economy the Co-operative sector,
if it is at all developed, may be seen to consist of
fragmented `movements' in which the societies and federations
serve particular economic interests; the consumers, the
farmers, the artisans and so on. If these `movements' owe a
common loyalty and send fraternal delegates to give friendly
greetings at one another's congresses, they are not as a rule
organically connected and they pursue separate policies
determined mainly by the economic interests they severally
represent. They may even find themselves on opposing sides in
controversies over national economic policy. Hitherto their
Co-operative affinities and allegiance to Co-operative
principles have usually been less powerful to bring them
together than existing social and economic cleavages to keep
them apart. Most of them might well have contentedly drifted
along in this fashion, had not radical changes in their
economic environment since the Second World War brought a rude
awakening.

These changes are too well known to need detailed description
here. They can be summarised under two headings: the one, the
advent of the welfare state with its concern to promote full
employment and rising standards of living among wage and small
salary earners; the other, the transformation of distributive
trade by new techniques employed by enterprises of
unprecedented magnitude. The two are not unconnected, for the
chief motive force for the transformation of distribution is
the prospect of greater profits from the freer spending of the
so-called affluent society. The impact of the new types of
enterprise, supermarket chains and so on, brought about a
shift, probably irreversible and therefore permanent, in the
balance between large scale and small scale enterprise in the
retail markets on the advantage of the former.

For the consumers' Co-operative Movements of all but a few
industrially advanced countries, it revealed the two-deck
structure described earlier in this chapter - local primary
societies plus national federations - to be largely out of
date. It showed the Movements, with few exceptions, to be
fixed in 19th or early 20th century moulds. The primary
societies were still mostly local, small (and therefore too
numerous), jealous of their independence and inclined to
attempt too much in isolation. Their outlook was parochial and
their management efficiency not equal to contemporary
requirements. Defective loyalty to the Co-operative wholesales
in the matter of purchasing supplies prevented the latter from
using the size of the co-operative market to the fullest
advantage. The Movements' lack of cohesion, in short, deprived
them of the very advantages of large-scale operation which
were being employed against them by their competitors. In
every country there were a few alert managers and leaders with
foresight who prepared to meet severer competition in good
time but the low average level of management skill and wisdom
in formulating policy meant that the societies were late in
awakening to their situation and slow in reacting to it. It
seemed unavoidable that consumers' Co-operation would lose
ground, both absolutely and relative to its large-scale
competitors, unless it could accept and carry out with speed a
series of structural changes which would permit the
consolidation, concentration and centralisation so urgently
necessary. It is a sobering thought that many of the measures
now regarded as innovations were first put forward by
foresighted leaders like J.C. Gray and Earnest Poisson three
quarters of a century ago.

The structural changes now required include the fusion of
local into regional societies, closer interlocking between
them and the federations for the sake of rationalised handling
of goods, the transfer of various branches of distribution
from local to national management, the organisation of new
common services on a national scale, centralised planning and
financial control. Their execution is much more than a
technical or organisational affair. It requires a change of
mental attitude, outlook and sentiment among the Movement's
members and leaders. It demands that they have enough faith in
their own Principle of Unity, as the ultimate source of the
Movement's economic power, to think out anew the forms of
association and federation it needs in order to survive and
fulfil its proper functions in the contemporary  world.
Excessive respect for long-standing institutions, old
applications of the Principle of Association which have
outlived their usefulness, is the chief hindrance to the more
comprehensive and dynamic collaboration now demanded of co-
operators, for in many branches of distribution today, the
true operational unit has ceased to be the local society and
can be nothing smaller than the whole national Movement.

Although the preceding paragraphs have been written with
special reference to consumes' Co-operative Movements, it has
not been forgotten that the enlargement of the scale of
economic operations in general, and especially in
distribution, has created difficult problems for agricultural
Co-operation also. The big distributor, like the supermarket
chain, is skilful and ruthless in exerting power on the
producer, particularly the small man. The expansion of the so-
called broiler industry, which supplies the large provision
dealers with poultry prepared for the table, has been
accompanied by the spread of contract farming, a system under
which the big concern offers the farmer an assured market and
cash return, provided that he will undertake to supply
chickens bred, fed and prepared for the market as the big
distributor requires them.

Agricultural Co-operative organisations rightly regard this as
a most insidious attack on the farmers' independence which it
has always been one of their chief functions to safeguard.
Their own authority, however, and their command over the
loyalty of their members are likely to be undermined, unless
they can offer them benefits comparable with those held out by
contract farming. In this situation the agricultural co-
operative organisations rightly seek to ally themselves with
the consumers' organisations with a large supermarket trade as
their natural partners in building up an inter-co-operative
marketing system which provides an alternative to the
subordination of the producer (or the consumer) to large-scale
profit enterprises. Such integration within the Co-operative
sector is, of course, one of the most difficult forms in which
the Principle of Association needs to be applied in the
contemporary world. It demands a realisation of the mutuality
of interest of consumer and producer which may be called the
pons asinorum of co-operative theory and practice. Yet the
harder the pressure grows on the Co-operative sector from the
governmental and capitalist sectors, the more will the
different branches of Co-operation be obliged to study and
support one another and the less will it be practically
possible for them to advance independently in their respective
ruts.

A special case of the problem of welding Co-operative
consumers' and producers' organisations together in a common,
coherent system is presented by the growth of Co-operation in
the developing regions and claimant needs of the latter to
market their products in the economically advanced countries.
To expect the newly liberated nations to make progress without
enabling them to obtain a steadily increasing share of world
trade is to ask them to lift themselves by their own boot-
strings. The young Co-operatives of those countries expect
more than good advice and technical assistance from the older
Movements; they want exchanges of goods and services on an
equal business footing. But between the consumers' co-
operative movements in the temperate zones, working their way
back to the sources of raw materials, and the co-operative
movements of tropical producers of raw materials, working
their way forward to their ultimate export markets, there
exist, for example in the soap and edible oil industries,
mammoth capitalist combines competing with each in its own
sphere and only likely to be circumvented, to say nothing of
dislodged, by the interlocking of the two forms of Co-
operation and co-ordinated action at both ends of the
productive process.

No less important, and even vitally so in the early stages of
their development, are the relations of Co-operative movements
with their national governments and the need for mutual
support through their own federations to replace as soon as
possible tutelage by government departments. The second half
of the 20th century has seen a remarkable increase int he
variety of forms Co-operative Association may take and the
range of economic interests which may have recourse to it, not
least the countries where more or less `affluent' economies
have unexpectedly declined into a state of depression for
which scarcely any other palliative than Co-operation can be
found. The lack of contact between these new Co-operatives and
the older co-operative movement, as well as the absence of
cohesion with one another, reduces the term `Co-operative
sector' to a merely arithmetical or statistical expression.
This lack of a common organ for reciprocal contact and
consultation for the representation of the Co-operative
Movement as a whole in its dealings with government (and other
external organisations) is the most obvious structural
weakness of many, if not most national Co-operative Movements.
To overcome it, French Co-operatives succeeded by persistent
persuasion over a number of years in bringing every branch of
their Movement into a single representative association, the
Groupement National de la Cooperation, one of its functions
being to express their united views to government on any
appropriate subject. When a Co-operative and governmental view
coincide, the Groupement becomes the instrument of efficient
and fruitful collaboration. It is also the medium for
harmonious collaboration between the Co-operative
organisations themselves and the mutual benefit societies
which observe the same principles as the Co-operatives.
Together they form the bulk of the social sector of the
economy which the government recognises as being separate and
essentially different from private and state enterprise.

The track followed by the proceeding discussion of the
Principle of Association or Unity has led from the
constitution of primary and secondary Co-operative
organisations 100 years or more ago to contemporary problems
of world economy. That is not surprising, for it is through
successively widening applications of this Principle that the
Co-operative Movement has grown to world dimensions. The only
real limits to its application are world limits. Artificial
limits, of course, are imposed or accepted, often
unconsciously, by Co-operators on their own thinking or
creative planning. One of the commonest of these is to
conceive unity as being essentially static and to forget its
dynamic aspects and uses. Granted that unity is essential to
the stability of Co-operative institutions, the power which
springs from it can and must be expressed in mobility and
flexibility no less than in rigidity. After all a Movement
must, by definition, move, that is, change. In our generation
the Movement's worst internal obstacles to its progress and
development are found in excessive reverence for traditional
institutions and usages, allied with too much consideration
for minority vested interests which cluster around them. The
narrower unity is allowed to block the road to the broader. To
change the simile, just as crustaceans grow by shedding their
shells, so the developing Co-operative movement has to burst
its way out of cramping institutions it has outgrown and
clothe itself in new ones in which it can freely grapple with
new and greater tasks. To be able to make this transition, not
merely smoothly and rapidly, but all, many more Co-operators,
and especially those exercising leadership, must be able to
keep clearly and steadily in mind the underlying unity of all
the specialised forms of Co-operation. The fact that the Co-
operative Movement has attained world-wide extension means
that its future development must lie more and more along lines
of closer and stronger integration of its multi-tudinous
fragments.