Problems in American Democracy Part 18

Credit cooperation has been most successful in Germany, particularly among artisans and small farmers. It has also attained considerable success among the small tradesmen and artisans of Italy. In the United States cooperation in credit is less highly developed, but recently its influence has been slowly increasing. In many cases it supplies the principle underlying building and loan a.s.sociations in this country.

116. COoPERATION IN MARKETING.--The cooperative principle has also been applied to the marketing of agricultural products. In Denmark, for example, it has been found that farmers can market their dairy products cooperatively, and thus save for themselves much of the profit that would otherwise go to commission agents and other middlemen. A similar saving has been effected in Holland, Belgium, and, to some extent, in France. Of recent years, cooperation in marketing has become important in the United States, finding particular favor among the farmers of the Middle and Far West. At the present time there are in this country more than two thousand cooperative cheese factories, and more than three thousand cooperative creameries. There are also more than a thousand societies for the cooperative marketing of fruit, as well as numerous live-stock selling agencies.

117. COoPERATION IN PRODUCTION.--The three forms of cooperation which we have been considering seek to eliminate unnecessary middlemen from industry. In producers' cooperation, on the other hand, the attempt is made to get rid of the entrepreneur, or managing employer. A group of workmen get together, subscribe or borrow the required capital, purchase tools, materials, and plant, and set up as producers. They seek markets for their product, direct the enterprise either as a group or through salaried agents, share the profits among themselves, and accept the risks of the enterprise.

Cooperation in production has been tried repeatedly in the various countries of Europe, but without success. True producers' cooperative a.s.sociations have also met with almost universal failure in the United States, though experiments have been made in a variety of industries, and in nearly every part of the country. Formerly the Minneapolis Coopers were a cooperative group which seemed destined to attain a considerable success in production, but this group has now abandoned the cooperative principle. The cooperative marketing of fruit, cheese, and other agricultural products is, of course, not true producers'

cooperation, but rather the cooperative marketing of commodities produced by individual enterprisers.

118. BACKWARDNESS OF COoPERATION IN THE UNITED STATES.--In all forms of cooperation, progress has been much slower in this country than in Europe. There are several reasons for this. For one thing, American workmen move about to a greater extent than do European workmen, whereas cooperation succeeds best where the cooperators have a fixed residence and develop a strong sense of group solidarity. The fact that our population is made up of diverse racial types likewise checks the growth of the feeling of solidarity.

An important reason for the backwardness of the cooperative movement in this country is that American workmen "make, rather than save money," whereas cooperation requires thrift, and a willingness to practice small economies. Again, the efficiency and progressiveness of our industrial system renders cooperative ventures less necessary in this country than in some parts of Europe. It is particularly true that retail stores in the United States are more efficient than similar shops in England and on the Continent.

Altogether, the most successful cooperators in this country are not native-born Americans, but groups of Finns, Russians, Slovaks, and other peoples of immediately foreign derivation. It is among these groups that the thrift and group solidarity demanded by cooperation are best found.

119. LIMITS OF COoPERATION.--Consumers' cooperation, cooperation in credit, and cooperation in marketing all seek to improve the capitalistic system by eliminating some of the unnecessary middlemen from our industrial life. In so far as this is true, these forms of cooperation are desirable developments, and deserve to succeed. Though the movement is limited by the considerations set forth in the preceding section, it is to be hoped that these three forms of cooperation will in the future show a considerable development in this country.

Producers' cooperation is a different affair. Rather than attempting to decrease the number of unnecessary middlemen, it attempts to supersede the entrepreneur or managing employer where he is most needed. For this reason producers' cooperation will probably continue a failure. To run a modern business of any size at all requires a degree of intelligence, imagination, judgment, courage, and administrative ability which is altogether too rare to be found among casual groups of laborers. Varied experience, high ability, the determination to accept the risks of the enterprise, and a consistent singleness of purpose are necessary in modern production. Even though cooperators are able to secure an amount of capital sufficient to initiate production, they rarely have the requisite ability or experience; too often they object to accepting the risks of the enterprise; practically never can they administer the business with that unity of control which characterizes the most successful business enterprises.

120. BENEFITS OF COoPERATION.--While no longer considered a far- reaching industrial reform, the cooperative movement brings with it many benefits. Cooperation in retail trade, credit, and marketing cuts down the waste between consumer and producer, and thus helps substantially to reduce the cost of living. Cooperation in production, though it fails to reach its chief objective, has the virtue of demonstrating to groups of workmen that the entrepreneur is of far more value in our industrial life than they might otherwise have realized. Aside from these advantages, cooperation in any form is an important educative force. It fosters the spirit of solidarity and mutual helpfulness among members of a group or community. It teaches thrift. It trains the cooperating individuals to exercise foresight and self-control. Altogether the training which it affords is productive of good citizens.h.i.+p.

QUESTIONS ON THE TEXT

1. Explain clearly the nature of profit sharing.

2. What is the att.i.tude of the trade unions toward profit sharing?

3. What is the att.i.tude of the employer toward profit sharing?

4. Does profit sharing result in increased efficiency on the part of the workmen? Explain.

5. What is the relation of profit sharing to cooperation?

6. What are the essential features of cooperation?

7. Explain the principle involved in consumers' cooperation.

8. Where has this form of cooperation been most successful?

9. What are the essential features of credit cooperation?

10. Where is credit cooperation most successful?

11. What is the aim of cooperation in marketing?

12. In what way does producers' cooperation differ from the other forms of cooperation?

13. To what extent is producers' cooperation a success?

14. Why is cooperation backward in this country?

15. Outline the chief benefits of cooperation.

REQUIRED READINGS

1. Williamson, _Readings in American Democracy_, chapter xii.

Or all of the following:

2. Fay, _Cooperation at Home and Abroad_, part iv, chapter v.

3. Harris, _Cooperation, the Hope of the Consumer_, chapter vi.

4. _International Encyclopedia_, vol. 19, article on "Profit Sharing"

and vol. 6, article on "Cooperation."

5. Taussig, _Principles of Economics_, vol. ii, chapter lxix.

QUESTIONS ON THE REQUIRED READINGS

1. What is the principle upon which profit sharing is based?

(_International Encyclopedia_, vol. 19, page 244.)

2. Discuss the origin of profit sharing in the United States.

(_International Encyclopedia, vol. 19, page 244.)

3. Give some examples of profit sharing in this country.

(_International Encyclopedia_, vol. 19, pages 244-245.)

4. Describe the earlier forms of cooperation in this country.

(_International Encyclopedia_, vol. 6, page 44.)

5. For what purpose was the "Rochdale plan" originated? (Harris, page 88.)

6. Discuss voting rights under the Rochdale plan. (Harris, pages 90- 91.)

7. Describe the store service under the Rochdale plan. (Harris, pages 93-94.)

8. How does the Rochdale plan promote thrift? (Taussig, pages 348- 349.)

9. Why has cooperation succeeded in Great Britain? (Taussig, page 350.)

10. What is the Schulze-Delitzsch plan? (Taussig, pages 352-353.)

11. What is the Raiffeisen plan? (Taussig, page 354.)

12. Among what cla.s.ses of the population is cooperation of greatest importance? (Taussig, pages 347-349.)