Report of the ICA Commission on Co-operative Principles (1966)

Introduction

1. Composition, Meetings and Procedure of the Commission

The Commission on Co-operative Principles was set up, at the request of the International Co-operative Congress at Bournemouth, 1963, by a resolution of the ICA Central Committee which met at Belgrade from the 3rd to 5th October, 1964.

On the recommendation of the Executive Committee, the Central Committee appointed five members to serve on the Commission as follows:

In December 1965, Professor Kistanov, acting on medical advice after a severe illness, did not attempt the journey from Moscow. His colleague, Professor G. Blank, Head of the Department of Economics, Moscow Co-operative Institute deputed for him at this and at subsequent meetings.

The Commission held its first meeting at the Headquarters of the ICA in London on the 15th and 16th December, 1964. Professor D.G. Karve was elected Chairman, to preside over the meetings and deliberations of the Commission throughout.

Secretarial services, it was decided, should be provided from the Secretariat of the ICA under the direction of the Director Mr. W.G. Alexander, who should enlist the services of a rapporteur to assist him in the drafting of the Commission's report. Accordingly, Mr. W.P. Watkins, formerly Director of the ICA, was commissioned to undertake this function.

The plan of work of the Commission provided, first, for the collection and analysis of information relating to the present observance of the Principles of Rochdale as formulated in the report adopted by the ICA Congress at Paris in 1937. It was agreed that this purpose would best be achieved through the issue of a questionnaire to the ICA's affiliated organisations, as well as to selected non-member organisations and individuals well- known for their wide acquaintance with the Co-operative Movement and their acknowledged position as exponents of co-operative ideas. On the basis of proposals submitted by members of the Commission, a questionnaire was drafted by the Secretariat and, after approval by the Commission, was circulated on 1st June, 1965.

The final date for the receipt of replies by the Secretariat was fixed at 31st August, 1965. Although a large number of replies were received by that date, many others continued to arrive in succeeding months until the total actually exceeded 100. As they were received, replies were copied, translated when necessary, and circulated to the members of the Commission. The information, opinions and fresh suggestions they contained represented a large sample of the ICA's affiliated organisations, a number of which brought their own affiliates into consultation. This material gave the Commission a useful insight, not only into the extent to which the Rochdale Principles were actually observed at the present day, but also into the reasons why co- operatives of different types considered it impossible or inexpedient in certain cases to apply them in practice.

The Commission held a second series of meetings, partly at Helsinki from the 18th to 22nd September, and partly at Moscow from the 24th to 26th September, 1965. As Helsinki was also the venue of the Central Committee of the ICA, it was possible to arrange a number of interviews at which the commission was able to hear the opinions of leading Co-operators from American, Asian and European Co-operative Movements on questions which ranged over the whole field of its investigation. At Moscow the Commission had the advantage of a meeting with the President and Board of Centrosoyus, and of hearing their explanations of various features of Co-operative activity in the USSR.

The Commission entered upon its own discussion of its approach to the study of Co-operative Principles against the background of contemporary economic and social life and on the significance of the seven principles defined by the Report of 1937. These discussions, begun at Helsinki, were continued in Moscow.

While in Helsinki, a further request was communicated from the central Committee that the Commission should endeavour, by all means, to complete its work in time for its final report to be discussed by the next International Co-operative Congress at Vienna in September 1966. To enable the Commission to fulfil the Central Committee's request, it was agreed to hold meetings in December 1965 and February, 1966.

The analysis of the replies to the questionnaire was completed by the Research Section of the IC_ Secretariat in November 1965 and made available to the members of the Commission before the third series of meetings was held at ICA Headquarters from the 12th to 16th December, 1965., As the Commission had the benefit of studying the originals, summaries and analyses of the replies to the questionnaire, it was in a position to take decisions after dull deliberation regarding the retention, reformulation or rejection of the Principles adopted in 1937, together with any suggestions for additional principles offered for its consideration.

The draft report was completed and dispatched to the members before the end of January in time for consideration at its fourth series of meetings in London from the 14th to the 18th February, 1966. At this meeting the final report of the Commission was unanimously adopted.

The Commission would like to place on record its sense of obligation to the large number of co-operative organisations and individual co-operators who readily and unreservedly placed their information and views at its disposal. The trouble which some among them took to respond to our invitation to meet us in Helsinki and Moscow is deeply appreciated by us. In Finland, UK and USSR, the National Co-operative Unions, and some of their affiliated organisations, were good enough to offer cordial hospitality which enabled the Commission to broaden its understanding of conditions and views of the respective co- operative movements.

Mr. W.P. Watkins, former Director of the ICA, who accepted the Commission's invitation to act as Rapporteur helped the Commission in several ways. The efficiency and the speed with which he prepared drafts of the Report for the Commission's use were indeed very remarkable. Without his assistance in this respect, it would have been well nigh impossible to produce the report within the limits of time desired by the Central Committee of the ICA.

Mr. W.G. Alexander, who had been good enough to accept the Commission's invitation to act as its Secretary, in addition to his heavy duties as Director of the ICA, has borne a very heavy burden, administrative as well as deliberative, cheerfully and most fruitfully. The Commission would like to make special mention of Mr. Alexander's contribution towards the timely and satisfactory results of the Commission's work.

Staff and assisting members like Mr. I. Williams, who recorded a verbatim statement of the deliberations, Mr. V. Kondratov, who helped with Russian interpretation and Mr. J.H. Ollman and Mrs. L. Stettner of the ICA Office, along with other members of the ICA staff, have helped in their respective positions very materially towards organising the Commission's work. The Commission's best thanks are due to all these.

2. Terms of Reference

The objects and scope of the Commission's investigation were first indicated in the resolution adopted by the Bournemouth Congress in the following terms:

"The Congress requests the Central Committee to: constitute an authoritative commission to formulate the fundamental principles of activity of co-operation under modern conditions; empower the Commission to study which of the principles of the Rochdale Pioneers have retained their importance to the present time; which of them should be changed and how, in order to contribute in the best manner to the fulfilment of the tasks of the co-operative movements and, finally, which of them have lost their importance and should be substituted by others; empower the Commission to formulate new principles of co-operative activity; include in the Agenda of the 23rd Congress of the alliance consideration of new principles for the activity of the Co-operative Movement; empower the Executive to request the national co- operative organisations, members of the ICA, to send their proposals on this subject; ask the Central Committee to consider the proposals of the national co-operative organisations and those of the Commission at a meeting preceding the 23rd Congress and to submit its opinion to the Congress; ask the Central Committee to consider the proposals of the national co-operative organisations and those of the Commission at a meeting preceding the 23rd Congress and to submit its opinion to the Congress."

The Central Committee, after considering the request of Congress, adopted a resolution providing for the constitution and administrative arrangements for the Commission and stating its terms of reference in para 4, which runs:

"4. The task of the Commission shall be: To ascertain how far the Principles of Rochdale - as defined by the ICA Congress at Paris in 1937 - are observed today and the reasons for any non-observance; To consider in the light of the results of the foregoing study, whether the Rochdale Principles meet the needs of the Co-operative Movement having regard to the present-day economic, social and political situation or whether any of the Principles should be reformulated in order the better to contribute to the fulfilment of the aims and tasks of the Co-operative Movement in its different branches; if so, to recommend a new text of texts."

The first part of the Commission's task, as will be seen above, was to enquire into the present-day observance of the Principles of Rochdale and into the reasons for any non- observance disclosed by its enquiries. It was in order to enlist the assistance of interested Co-operative Organisations, especially on this part of the Commission's terms of reference, that the questionnaire already mentioned was framed and circulated. Their answers, summarised and tabulated by the ICA Research Section will become generally available in due course.

The replies to the questionnaire provided only part of the basis for the Commission's findings and judgement, which also had to depend largely on the studies and experiences of its members. The whole body of material received from correspondence was contributed entirely voluntarily, and a number of organisations brought their own affiliates into consultation before submitting their replies to the Commission. The material thus represented a large sample and its value for purposes of information and illustration was very considerable.

Even more valuable was the evidence, given by the replies, of the great extent to which Co-operators all over the world, irrespective of the type of co-operative organisation to which they are attached and its economic and social environment, posses a common co-operative philosophy, from which they derive common sentiments and attitudes to basic problems greatly outweighing their inevitable diversities of objectives and method. A further result was to reveal the historical continuity which connects the pioneers of Co-operation in the early stages of the Industrial Revolution of the 19th century, even before the Rochdale Pioneers, with the pioneers of the newly developing regions of the 20th. This made the Commission's tasks of answering the question, whether the Principles of Rochdale meet the needs of the Co-operative Movement today, much easier than it might have been. The task proved to be one, not so much of revision, as of clearing up confusion and removing unnecessary rigidity rooted in unbalanced or over-simplified interpretations, in other words, a process of re-burnishing which permits the underlying principles to shine with a brighter light.

3. Historical Background

The Resolution of the Bournemouth Congress which called for the present investigation was adopted by an overwhelming majority. The need for a review of the Principles of Co-operation was recognised from several standpoints. Far-reaching changes had occurred in the political constitution and economic organisation of nations. Under the stress of a revolution in distributive trade many co-operative organisations encountered difficulties in maintaining their traditional practices. In the newly- developing regions of the young co-operative movements had still to reach their full capacity to implement the Movement's principles and apply them in their special economic and social setting.

Compared with the Special Committee of 1930-37, the Commission has been working in greatly altered circumstances. Although the basic problems may appear to be essentially the same, namely, to maintain the Co-operative Movement's autonomy vis-a-vis political parties and governments; to correct tendencies to compromise on principles for the sake of business advantage; to clarify the essential differences between true co- operatives and other enterprises apparently imitating co- operative methods to stress the vital necessity of keeping the Movement's democratic machinery and its educational system up to date, they were posed in different forms and with somewhat less urgency thirty years ago. The general situation was less dynamic than it is today. The main work of that Special Committee was not merely to clarify, but also to reaffirm the principles handled down from the Movement's pioneer days. The International Co- operative Alliance itself was smaller in respect of its total membership and mainly dependent for support on consumers' Co- operative Movements in Europe, a fact which was bound to influence the outlook of the Special Committee and the focus of its interest.

Even during the Second World War the Co-operative Movement played an important part in the economic life of many countries. After the fighting ended and the work of national and international reconstruction began potentialities of co-operative organisations for economic and social reorganisation became more widely recognised in all countries irrespective of their economic and social systems.

Meanwhile important changes have taken place in technology and especially management. The world appears to stand on the threshold of a new industrial revolution even more comprehensive than the old. The function of Co-operative Organisations, therefore, is more than the defence of group interests; they should be making a positive contribution to the welfare of their participants in an expanding economic system. The needs of co- operatives for large masses of capital and for trained man-power will therefore grow, though capital used by them will not dominate but only earn its fair interest. Again, in the development over a long period of large-scale business undertakings with many ramifications, an intricate form of organisation is necessary, in which too absolute interpretations of principle are not appropriate. The Movement cannot remain content for the future. This consideration is as important for the newly-developing countries as for the more advanced, for wrong applications of principle may not only hinder the Movement's progress but produce results with Co-operators do not desire. They must recognise that involvement in public policy and in other sectors of the economy than their own is inevitable, and they would be mistaken to wish it otherwise.

As the awareness of the demands of the new era into which the movement is passing has spread amongst Co-operators, they have reacted at every level - local, national and international. Structural changes involving far-reaching consolidation, concentration and integration have already been made in a number of national Co-operative Movements; more are contemplated. In the last five years, these changes have been the subject of study and exchange of ideas in the Authorities and the Auxiliary Organisations of the International Co-operative Alliance. But as they carry through their measures of reconstruction many leading Co-operators feel with greater urgency the need for guidance in matters of principle - the need to distinguish what is essential and must be maintained at all costs from what may be varied, discarded or added, according to circumstances. They also feel the need of making firmer the common intellectual and moral ground on which Co-operators of all nations, of all schools of thought, of all branches of the Movement, can unite. The work of the Commission therefore takes into account the structural transformations now in progress and proposed for the future.

4. The Commission's Analysis and Approach

The Co-operative Movement is world-wide. The International Co-operative Alliance is becoming steadily more and more representative of it. Although co-operative organisations of many countries in Africa, Asia and Latin America have yet to join it, the Alliance grows in membership from year to year and its membership becomes better balanced because it is more inclusive of the diverse types of co-operative society. Consumers' and agricultural co-operatives still greatly predominate, as is inevitable, but it is significant that a growing number of unions and federations operating in the field of credit, housing, fisheries, etc. are being admitted. Sharp divisions formerly existing between co-operatives of various types can no longer be maintained. In the newly-developing regions especially, multi- purpose societies tend in several cases to replace co-operatives of specialised types which may be too small or otherwise ineffective. More important still is the fact that despite the obvious differences between the economic and social systems under which co-operatives carry on their work, the Alliance maintains its unity, as the only international organisation dedicated entirely and exclusively to the propagation and promotion of Co- operation.

The Commission, in its approach to its tasks has been profoundly influenced by its awareness of these facts. On the one hand, it felt bound to recognise that the practices of co- operative organisations must needs vary, in ways too numerous to mention and with considerable differences of emphasis, not only according to their purpose and type, but also according to the environment in which they have to further their members' interests and survive. On the other hand, there must necessarily be common elements from which they derive the resemblances which prove their membership of the co-operative family. This or that branch of the Co-operative Movement may have specific principles which are of minor importance to others, but the Commission considered that principles which are of minor importance to others, but the Commission considered that its primary task was to attempt to formulate those general principles which could and should be observed by co-operatives of all types in all social and economic systems.

It has already been remarked that the ICA Special Committee in its Report of 1937 may have been influenced to a certain degree by the composition of the Alliance at that time. This notwithstanding, the principles it enumerated were intended to apply universally to co-operatives of all kinds at all times and places. The Commission, therefore, took this Report as its starting point, as requested by its terms of reference, and based its discussion on the principles formulated therein. Since experience has shown that too brief or simple a formulation can be misleading, the Commission has deliberately chosen, at the risk of being no longer and more qualified in its statements, to bring out the full implications of its thought on any given topic.

Moreover, it has endeavoured at all times to bear in mind the point of view of practical co-operators, emphasising in many cases the spirit rather than the letter of principle. It has preferred to keep in the foreground the consideration that, in varying contexts and historical circumstances, different aspects of Co-operation receive varying degrees of emphasis and that innumerable groups of Co-operators in their own environment have been trying out how best to attain the ultimate goals of the Movement. What the Commission has considered important was not so much the verbal or semantic formulae as the substance of these objectives.

5. Co-operative Principles and Ideals

It is also in relation to these objectives that the Commission framed its working definition of Co-operative Principles as those practices which are essential, that is absolutely indispensable, to the achievement of Co-operative Movement's purpose. This purpose has been described in various ways at different stages of the Movement's historic development. The Rochdale Pioneers, like some of the Co-operators who preceded them, declared their aim to be the establishment of communities supporting themselves by their own labour on their own land. For the most part, the Movement did not advance along this line of intensive development but developed extensively, by spreading out geographically and by breaking into one field of economic activity after another. Its success encouraged many to visualise its ultimate end and ideal as a Co-operative Commonwealth. At a later stage again, and with broader experience, many Co-operators became content to accept the less ambitious ideal of a Co- operative Sector complementary to, but exercising an influence upon, the public and private sectors of the economy.

The common element at all times has been that Co-operation at its best aims at something beyond promotion of the interests of the individual members who compose a co-operative at any time. Its object is rather to promote the progress and welfare of humanity. It is this aim that makes a co-operative society something different from an ordinary economic enterprise and justifies its being tested, not simply from the stand point of its business efficiency, but also from the standpoint of its contribution to the moral and social values which elevate human life above the merely material and animal.

It follows from the standpoint adopted by the commission that no distinction of degree of validity can be drawn between essential principles. The Commission has not given some principles a higher priority than others. On the contrary, if every principle denotes something essential, all posses equal authority and the essential substance of all must be equally observed to the full extent and in the manner that circumstances permit at any time and place. This qualification is inevitable in the application of theoretical principles which have to be effective in a variety of circumstances. The Commission has done its work in the hope of arriving at formulations of essential values in Co-operation which will supply meaningful interpretations and guidance to Co-operators who have to meet the challenge and grasp the opportunities of the modern world.