Poster of the large purchasing company of German consumer associations
Photo: Cooperative Museum
The roots of the new nd cooperative go back over 175 years, geographically as far as the small town of Rochdale, which is near Manchester. The “Equitable Pioneers” were hand weavers, their incomes were low, the families lived in poverty. 28 Weavers »help themselves«, explains the Hamburg publicist Armin Peter. In 1844 they founded the world’s first consumer cooperative.
In the beginning, the “Honest Pioneers” only offered flour, sugar, butter and porridge. They were primarily concerned with proper quality. Counterfeiting and fraud are common in the 19th century grocery trade. “All types of cooperatives learned from the Rochdale pioneers,” says Peter, who works in the small but fine cooperative museum on the eleventh floor of the trade union building in Hamburg.
Hamburg became the uncrowned capital of the German cooperative movement. The impetus was the strike of dock workers and seamen at the turn of the year 1896/97. Up to 17,000 proletariat struck the port for eleven weeks. Union strike funds did not yet exist in the German Empire, and hunger was rampant in working-class families. The idea of helping through a cooperative grew: the founding meeting then has 700 participants.
The “Konsum-, Bau- und Sparverein Produktion”, or “Pro” for short, developed rapidly from then on: Hundreds of shops were opened in the Hanseatic city and neighboring towns. The first consumer cooperatives were also soon founded in Berlin, Hanover, Frankfurt and elsewhere.
In the vicinity of the legendary Pro on the Elbe, the Arbeiterwohlfahrt and the insurance company Volksfürsorge (today Generali) were founded. And soon their own products were being offered in the pro shops: bread rolls, bicycles and cigars. During the Weimar Republic, the umbrella association, the Großeinkaufs-Gesellschaft Deutscher Consumvereine (GEG) in Hamburg, then maintained over 50 large production companies across Germany. Adolf Hitler’s rise to power in 1933 heralded the interim end of the major non-profit corporation GEG.
Consumption and HO
The Soviet military administration allowed consumer cooperatives a few months after the end of the war. Assets confiscated by the Nazis were returned to HO and Konsum. As early as mid-1946 there was a complete network of cooperatives in East Germany.
In the west, the new beginning was more difficult. Cooperatives were rather alien to the occupying powers; they were viewed critically, as by the British, as “socialist”. The new GEG countered the food crisis with its own fishing fleet and a fish goods factory in Altona.
But the competition from the first self-service shops, later from discounters like Aldi, intensified the competition in the 1960s. “For the two million consumers, in-house production will later become a block on the leg,” says Peter. The investments that were not made during the Nazi era are now taking their revenge, and the banks mistrusted the already unpopular cooperative clientele.
In the 1970s, many cooperatives merged. They changed their legal form and mutated into a stock corporation in order to get fresh capital. The Coop AG, in which most of the West German consumer cooperatives had merged, ended in disaster. Despite 50,000 employees and a turnover of more than ten billion D-Marks, Coop was liquidated in 1989.
Volksbanks for the “Mittelstand”
Cooperative banks operate more sustainably. In the middle of the 19th century, the flourishing capitalism had threatened the existence of many peasants and artisans. The founders Hermann Schulze-Delitzsch (1808 – 1883) and the eponymous Friedrich Wilhelm Raiffeisen (1818 – 1888) built on their own, cooperative credit institutions, “against the banking movement of the wholesale trade and the factory industry.”
Since then, Volksbanken and Raiffeisenkassen have financed the livelihoods of millions of “little” people, approved loans for winter crops, for house and farm or for the corner shop. For a long time, farmers or craftsmen were not considered customers of “normal” banks. It was not until the 1960s that the larger private banks discovered the “middle class” as a potential clientele, and their savings as cheap raw materials.
As in the consumer cooperatives, many a comrade banker cut their roots. To the annoyance of the Trade Union, Banks, Insurance, and later Verdi. Some Volksbank and Raiffeisenbank are “on the way to shareholder value,” the union said. The cooperative banks should remain “boutique instead of Aldi”. Most are now both.
According to the Bundesbank, 814 of the formerly more than 7000 Volks- and Raiffeisenbanks have remained after a number of mergers, which are particularly strong in rural areas. The number of employees has decreased by 20,000 to 138,000 since 2012. 18.4 million members entrust their money to them. More than ever.
Housing cooperatives do not feel the pressures of a capitalist market in which there is an oversupply and on which new competitors are constantly appearing via the Internet or smartphones. At the end of the 19th century, citizens and individual professions founded the first cooperatives to build apartments. This was a reaction to the increasing housing shortage as a result of industrialization, which in a short time multiplied the population of many cities.
Of the 42.8 million apartments in Germany today, 2.2 million are cooperative apartments. Due to its long tradition, Hamburg has a particularly high share of cooperatives: 135,000 apartments, a good fifth of all rental apartments, are cooperative. According to the umbrella organization HWG, the average rent was always around 20 percent below the average of the rent index. “Here again,” said a spokesman, “the housing cooperatives are the real brake on rent.”
Longing for idyll
»Help people to help themselves« was the unwritten motto of all cooperatives founded. “What they all have in common is that the members are both owners and customers of their cooperative,” according to the German Cooperative and Raiffeisen Association (DGRV). The so-called identity principle distinguishes a cooperative from all other forms of cooperative cooperation, such as the “common economy” founded by trade unions.
The idea of decentralized cooperatives did not remain free from left-wing criticism. “This populism dreams of a medium-sized, also cooperative economy,” criticized the economist Herbert Schui, who died in 2016. Behind this is the longing for an idyll, according to Schui, in which there are no powerful large companies and no threatening globalization.
“The cooperative as a legal form is very democratic,” countered Ralf Barkey, the long-standing chairman of the board of the “Cooperative Association – Association of Regions”. Each member has the right to vote in the general assembly or – in larger cooperatives – can elect delegates for the representative assembly.
On top of that, profits are distributed to the members. Around 50,000 members in predominantly large-scale agricultural cooperatives also benefit from this. Around 700 former LPG farms an estimated 40 percent of the agricultural area in eastern Germany.
Nationwide, 22.6 million members in 7000 cooperatives belong to the umbrella organization of the cooperative group, the DGRV in Berlin. Statistically speaking, every fourth citizen is a member of a cooperative. And the scene is growing – even where one might at least suspect it. The Berlin Society of Parlor Games won the “Utopia Prize” of the German Academy for Football Culture and the attention of clubs such as FC St.Pauli for its sketch of a cooperative football association.
In the meantime, cooperatives have been recognized by Unesco as a World Heritage Site. In economic terms, cooperatives are no longer a utopia, but solid. This has been ensured in Germany since 1889 by the cooperative law that was last updated in August. According to this, every cooperative must belong to a testing association such as the »Cooperative Association – Association of Regions«. The right to examine is granted to the association by a state authority. This does not rule out economic difficulties, as a few bankruptcies show. Occasionally, this form of self-control was criticized. Ultimately, however, most cooperatives are commercial enterprises that are committed to the welfare of their members but not to the welfare of the general public.
As a result, cooperatives are now often only useful service companies. Those who want more can find it at smaller cooperatives that practice alternative forms of living, finance wind turbines or set up village supply stores. Hundreds of such cooperatives, some of which are not for profit, have joined forces in the Central Association of German Consumer Cooperatives, which also runs the museum in Hamburg. The most prominent member is called “taz Die tageszeitung Verlagsgenossenschaft”.
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