Cooperatives

1955 Article

The practice of cooperation in human history is as old as is the practice of competition. Both cooperation and competition describe aspects of the human social process. They are expressions of behavior with contrasting characteristics. Cooperation is the act of two or more. individuals or agencies working together to obtain common objectives, while competition is the act of two or more individuals or agencies striving against one another, each to attain for himself the same objective.

Cooperation in the form of an organized socio-economic movement with clearly stated principles and permanent organizational structure is, however, less than 200 years old. The origin of the present-day cooperative movement dates back to 1844. In the little industrial town of Rochdale, England, a group of textile weavers developed a set of operating principles which have since served as the basic premises of the world-wide cooperative movement. These principles called for economic organization which provided that all profits be distributed to the patrons on the basis of their respective patronage; it provided that each member had only one vote in the business affairs of the organization regardless of the number of shares held or the amount of money invested; it demanded that all capital invested earn a fixed rate of interest rather than a fluctuating rate, depending on the profitableness of the enterprises; it required political and religious neutrality and an open membership; and it insisted that a portion of the earnings be spent for educational purposes to promote the understanding of the cooperative technique.

Mennonites have practiced a form of cooperation much older than the Rochdale cooperative system. Their cooperation has traditionally been called mutual aid. This has been characterized by its basic religious motivation and is a type of brotherhood economics. It has generally been more spontaneous and informal in organization than the present-day systemized and organized cooperative movement. Mennonite communities were significantly affected by the modern cooperative movement, but there was great variation according to geographical locality and official church attitudes. In some communities Mennonites remained completely aloof from all cooperative organizations. In other communities they participated in patronizing cooperative organizations but refrained from holding membership and from accepting offices; and in still other communities they were active promoters of the cooperatives and took the lead in organizing new cooperative ventures and in enthusiastically promoting the growth of cooperatives.

The reasons for opposition to cooperatives were primarily two. First from a religious angle, church members were urged to refrain from joining cooperatives because it was feared that to join such an organization would mean becoming unequally yoked with unbelievers (2 Corinthians 6:14). The second basic objection sometimes offered was that cooperatives seemed to be a threat to such basic tenets of capitalism as freedom of individual enterprise and the profit motive. However, those who were attracted to the cooperative movement saw in this economic method an ethical ideal superior to the prevailing ethics of competition under capitalism. They felt the cooperative principles were more nearly commensurate with basic Christian ethics than was the unregulated competition of capitalism.

Cooperatives significantly affected the economic life of many American Mennonite communities, and the growth of cooperatives was everywhere apparent. The cooperative movement in America was strongest among farmers, and Mennonites, being predominantly agricultural, found themselves directly affected by both local and national economic currents. The most common types of cooperative organization in Mennonite communities were grain elevators, oil service stations, creameries, groceries, and credit unions. In most areas where Mennonites engaged in specialized farming, such as orange growing in California, potato growing in Idaho and Ohio, poultry and dairying in Indiana and Pennsylvania, fruit growing in British Columbia and Ontario, raising sugar beets in Alberta, wheat in Kansas, and sunflower seeds in southern Manitoba, Mennonite farmers tended to join marketing cooperatives to dispose of their products to the best possible economic advantage. Many Mennonites join the Farm Bureau Co-operative.

In Canada, especially, there are numerous illustrations of cooperative health prepayment plans and a number of cooperative burial societies. The latter were generally carry-overs from the older mutual aid organizations, and are not properly classed as cooperatives.

Organized cooperatives were found much more frequently in the United States and Canada among the Mennonites of Russian origin than among those of Swiss and South German or Alsatian origin. The explanation in part probably lays in the fact that the Mennonites in Russia and in Prussia developed an extensive system of mutual aid organizations (see Mutual Aid) to which modern cooperative organizations are a natural appendage. In at least some of the Mennonite communities studied, it was found that the leaders of mutual aid organizations were also the leaders in establishing the more modern cooperatives. There was therefore something of a continuous chain between the older mutual aid organizations and practices of the Mennonites and the modern cooperative organizations in Mennonite communities.

Among Mennonite colonists in Paraguay the cooperative was the most important economic organization. It was a legally incorporated entity chartered by the national government in the country where it was located. Its primary and original function in each colony was to serve as a store. However, the cooperative performed a much wider scope of functions. It not only served as the buying and selling agency for the ordinary consumer goods of the colonists but it served also as the chief, and in many cases the only, marketing agency for all salable commodities. In addition the cooperative served as a colony bank. Since very little cash was handled many colonies had their only liquid assets as credit on the books of the colony cooperative.

Almost all Paraguay family heads belonged to a cooperative. It resembled a farmers' cooperative in the United States and Canada except that it did not operate on the Rochdale principles, under which dividends were paid to the members in proportion to their savings which had been determined by the amount of business done. In South America the cooperatives were operated solely for the benefit of the entire colony somewhat on the order of a company store. Members were paid interest rates on balances due on their accounts and adjustments were made between time for withdrawals. Colony members could borrow money from the cooperative as well as make loans to it.

The cooperatives were so essential to the welfare of the colonies that it is doubtful if the colonization efforts could have succeeded without them. The extreme isolation of the colonies from markets, the lack of transportation, and the poverty of the colonists made it impossible for individuals to market their produce or to journey to the markets to make their purchases in person. (See Fernheim Agricultural Cooperative and Friesland Agricultural Cooperative) -- J. Winfield Fretz

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1990 Update

The cooperative movement, seen in global perspective, is not languishing; on the contrary, it is one of the fastest growing economic institutions. Although still predominantly expressed in the form of consumer cooperatives, producer cooperatives are increasing, and in some countries, combined with consumer cooperatives, are literally remaking communities and regions. Two examples are the Mondragon movement in the Basque region of Spain, and the cooperative movement in Israel, including the kibbutzim. Outside Europe and North America most development initiatives by governmental and non-governmental organizations operate on the cooperative principle, indicating the power of this form of economic development, which ignores the ideological strictures of socialism and capitalism and pragmatically takes advantage of private and collective resources, motivations, and needs, especially those of women (Development International, vol. 1; vol. 2, 40ff). The Mennonite interpretation of and experimentation with cooperatives had been largely described and analyzed by J. Winfield Fretz above. This article describes developments since the 1950s.

Mennonite community participation in agricultural and community cooperatives was seen by Fretz as an expression of the mutual aid tradition of Mennonites. E.K. Francis, in his monumental study of Manitoba, proposes the opposite -- cooperatives expressed the secularization of the sacred Mennonite mutual aid practice (p. 224ff.) He documents further that the cooperative movement itself was in process of losing its influence and power in Manitoba, a fact which has been corroborated in other community studies since that time (Epp-Tiessen, Ens, Redekop) , This may well be due to accommodation to the capitalist free-enterprise milieu, as Francis maintains and Fretz suggests.

There are developing, however, several new forms of Mennonite cooperatives, which may be heralding a renewed interest in mutual aid and economics. One form is found primarily in North America, another in the service and development work being done in the Two-thirds World.

(1) The emergence of credit unions in North America. Following the credit union established in Altona in 1939, as part of the larger cooperative movement in Manitoba (J. J. Siemens), credit unions have slowly begun to be established by and for Mennonites in Canada and the United States, and they promise to be a major area of growth in the near future. Beginning with Crosstown Credit Union in Winnipeg, in 1944, credit unions were organized at the Mennonite Publishing House at Scottdale, Pennsylvania (1955); Hesston, Kansas (1960); Kitchener, Ontario (1964); La Junta, Colorado (1965); Harrisonburg, Virginia (1964); Kidron, Ohio (1985); and Evanston, Illinois (1988). Canada-United States conferences on Mennonite credit union philosophy, held in 1987 and 1989, assisted in the emergence of a new awareness of Anabaptist-Mennonite theology regarding economic mutual aid and caring.

(2) The support and initiation of cooperatives in underdeveloped countries. The Mennonite Central Committee (MCC) and several Mennonite mission boards have helped establish cooperative ventures in India, East Asia, Africa, and Latin America. The Mencoldes project in Colombia is one such example (Juhnke, 156-58). A new thrust which has enhanced the cooperative movement abroad is the emergence of Mennonite Economic Development Associates (MEDA), which has promoted economic development including entrepreneurial assistance as well as cooperative organizations where feasible. Thus MEDA has worked alongside MCC, and numerous mission boards, in establishing and expanding cooperative organizations, including credit unions, agricultural, and handicrafts cooperatives, in Haiti, Jamaica, Colombia, Bolivia, Uruguay, Paraguay, India, Zaire, Ethiopia, and Somalia (Fretz, 1947, 1978).

The MEDA program is confronted with the melding of the capitalistic and cooperative dimensions in its foreign program, and its successes and failures show how economics can operate for the benefit of all in the most effective way. What has already been learned is that strict Western capitalistic patterns will not work in most non-North American settings; this does not even touch the issue of the ethical dimensions of biblical views on economics. The promotion of domestic and international cooperative economic institutions among Mennonites in the future is a part of the larger issue of whether Mennonites are going to retrieve the "communal ethics"; the jury is still out on this critical issue. -- Calvin W. Redekop

Bibliography

"Cooperatives." Encyclopedia Britannica, 14th ed., vol. 6 Chicago, 1966.

"Cooperatives." International Encyclopedia of the Social Sciences, vol. 3. New York, 1968.

Dawson, C. A. Group Settlement: Ethnic Communities in Western Canada. Toronto, 1936: Part II.

Epp-Tiessen, Esther. Altona: The Story of a Prairie Town. Altona, 1982.

Ens, Gerhard John. The Rural Municipality of Rhineland. Altona, 1984.

Francis, E. K. In Search of Utopia. Glencoe, 1955.

Fretz, J. Winfield. Christian Mutual Aid. Akron, 1947.

Fretz, J. Winfield. The MEDA Experiment. Waterloo, 1978.

Fretz, J. Winfield. "Mutual Aid Among Mennonites." Mennonite Quarterly Review 13 (1939): 28-58, 187-209.

Fretz, J. Winfield. "Mennonite Mutual Aid: A Contribution Toward the Development of a Christian Community." Ph.D. Thesis, Univ. of Chicago, 1941.

Fretz, J. Winfield. Pilgrims in Paraguay. Scottdale, PA: Herald Press, 1953.

Fretz, J. Winfield. "Recent Community Building in Canada." Mennonite Quarterly Review 18 (1944): 5-21.

Gingerich, Melvin. The Mennonites in Iowa. Iowa City, 1939: Chapter 20.

Juhnke, James C.  A People of Mission: A History of General Conference Mennonite Overseas Missions. Newton, KS: Faith and Life, 1979.

Miller, D. Paul. "Co-operative Transforms Rural Economy." Mennonite Life 4 (April 1949): 18-20.

Redekop, Calvin. "The Cultural Assimilation of the Mennonites of Mountain Lake." MA thesis, U. of Minnesota, 1954.

Siemens, J. J. "Sunflower Rebuilds Community." Mennonite Life 4 (July 1949): 28-31.

Various accounts by mission and development workers, e.g., Development International. Arlington, VA.

Author(s)	J. Winfield Fretz
	Calvin W. Redekop
Date Published	1990

Cite This Article

MLA style

Fretz, J. Winfield and Calvin W. Redekop. "Cooperatives." Global Anabaptist Mennonite Encyclopedia Online. 1990. Web. 22 Nov 2024. https://gameo.org/index.php?title=Cooperatives&oldid=113305.

APA style

Fretz, J. Winfield and Calvin W. Redekop. (1990). Cooperatives. Global Anabaptist Mennonite Encyclopedia Online. Retrieved 22 November 2024, from https://gameo.org/index.php?title=Cooperatives&oldid=113305.

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Adapted by permission of Herald Press, Harrisonburg, Virginia, from Mennonite Encyclopedia, Vol. 1, pp. 707-709; vol. 5, p. 206. All rights reserved.

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