The cooperative form of economic and social organisation has long since proven its value in both urban and rural spheres. Cooperatives operate successfully the world over in nearly every area of human endeavour, from agricultural supplies and rural electrification to urban consumption and housing. ICA's Statement on Cooperative Identity defines cooperative values as: “self-help, democracy, equality, equity, and solidarity. Cooperative members believe in the ethical values of honesty, openess, social responsibility, and caring for others”.
Currently, private enterprise and democracy are high on the global political agenda. Governments in most countries are in retreat because of declining revenues, the constraints of structural adjustment programmes, and the new political atmosphere. Deep cuts have been made in subsidies and other forms of support for socially-oriented institutions, while international aid funds are also declining. Retrenchment is the order of the day, citizens are expected to stand on their own.
Cooperatives could be ideally suited to fill the void created by this turn of events. In the industrialized countries, considerable rethinking is going on about cooperatives and their rôle in society. There, cooperatives have mainly been successful as businesses, perhaps even too successful, making often highly-paid cooperative managements, trained in the business ethic, complacent with regard to the cooperative ethic they are supposed to be defending. In developing and former Soviet bloc countries, most institutions known as “cooperatives” have little in common with the genuine product and are going through a difficult privatisation process. Nearly everywhere, cooperatives are living through a crisis which could, in some cases, be mortal:
an identity crisis: in the developed world because they are becoming so big as to be ungovernable on cooperative lines, in the developing world and former Soviet bloc because they have so long been instruments of government and not of their members that changing into genuine cooperatives represents a sea-change compared to their past experience;
a business crisis: because liberalisation is taking away privileges in some countries, and compelling cooperative management to mimic capitalist practices in others, and because increasing competition is forcing cooperatives everywhere to improve their business efficiency at all costs;
a democracy and commitment crisis: because “top-down” management styles and insufficient attention paid to member education, training and information services have led to declining member participation rates; because excessive concern for business efficiency in some areas, has relegated the social dimension, and member involvement, to the background; both factors have led to member disenchantment; and
a gender crisis: because cooperatives have generally done at least as badly as other institutions in involving women in decision-making and in contributing to the success of the cooperative's business activities.
What initially distinguished a “cooperative” from other types of business organization was its adherence to the “Rochdale Principles”, which were originally very simple (see Appendix). Over time, these basic principles have been up-dated, and most recently by the International Cooperative Alliance at its Centennial Congress in September, 1995. In fact, the principles have been interpreted, or even changed out of recognition that a variety of organisations has entered the cooperative fold which operate under rules that bare scant resemblance to those governing the original cooperative at Rochdale.
In many transitional and developing countries, cooperatives are losing the central role they played in agricultural policy and rural development strategies. However, rural cooperatives could still play a critical role. Yet, for a variety of reasons, there are few today which are fulfilling their function as economic, or social or democratic institutions. Few cooperatives outside the developed countries seem to be in a position to face the challenges and they are being overtaken by other types of rural institution.
The cooperative movement was born out of adversity when the 28 Rochdale Pioneers joined forces in 1844 to surmount harsh economic and social conditions when they opened a cooperative consumer store. Will the harsher economic environment and the social changes of the late XXth Century produce the same chemistry and will they lead to different solutions?. Will deregulation make or break cooperatives in the developing world?. Are cooperatives able to become breeding grounds for democracy, or is the cooperative institution irremediably associated with authoritarianism1
1 In Poland, after decades of trumped-up elections, there was a low turn-out in the first free cooperative elections in 1990.