Finance and Industry: Co-operative Movement at a dead end (1962)

The Finance and Industry Column from the December 1962 issue of the Socialist Standard

A few months ago Reynolds News, the Co-operative Sunday newspaper, came out in its new form as the Sunday Citizen. Whatever other reasons for the change there may have been, doubtless the fall in circulation of the old paper from 720,0000 in 1947 to 310,000 in 196I has something to do with the effort to appeal to a new circle of readers. We do not know whether the change has won new readers, but we can tell what readership one of their regular contributors has in mind. He is Scorpio, "Sunday Citizen Economic Expert," who has a column headed Your Money. In the issue for October 21st he urged his readers “ Buy Oil Shares":

My advice has always been that you can't get high income yield, security against loss, quick access to your money, and hope of capital growth all at once.

Today I suggest a chance to come much nearer having it all four ways than you will often get. Buy some British Petroleum or Burmah Oil shares or, better, some of both.

Scorpio, or his editor, obviously thinks that no newspaper can be complete and up-to-date without a city column in which readers are helped with their investment problems. The Sunday Citizen has to keep up with the Jones’s of Fleet Street — what they do it must do, too.

And if Scorpio were to ask what is wrong with a Co-operative newspaper trying to have as wide an appeal as any other Sunday paper, the answer is that there is everything wrong with this particular venture, that of advising workers to risk what little savings they have (or some of them have) in buying shares.

In the first place it is a very dangerous game for workers to play. The inducement is the belief that they can make money. So they may at backing horses, and just as easily lose it. Scorpio's particular advice may turn out to be based on a correct guess about the future of the oil industry and of these two companies but, like all the other City recommendations it can be little more than a guess.

Very much to the point, how does it come about that a newspaper which belongs to the Co-operative Movement is not telling its readers to put their spare money into the Co-operative movement which so badly needs it?

There was a time when enthusiastic co-operators would have been shocked to find in their own Press someone who had so little belief in co-operation. Probably few readers are shocked today because, as a movement aiming at social change, co-operation has long been dead. More worrying still to many of its officials it hasn’t even been holding its own as a capitalist trading group in competition with commercial rivals. 

From the standpoint of the original solid aims of the movement probably few of its more than 12 million members even know what the original aims were. Some of them may have heard of Robert Owen and of the Rochdale Pioneers who formed a co-operative society in 1844, but few will know that for Owen and for the Rochdale Group the trading society was looked on not as an end in itself but as a means to revolutionise society:

. . . . Owen was not interested in "store keeping”. He wanted to set up self-supporting and self-governing villages of co-operation, organised committees providing work and happiness for their members. At first he advocated these as a means of over-coming unemployment, but later he broadened his plan to embrace all mankind.

(The Co-operative Movement. Published by the Labour Party.)

Such aims have been long forgotten as the co-operative movement enrolled its members by the million and gave them the satisfaction of their dividend on purchases. In the co-operative movement\ prosperous years it was possible to recruit new members by publicising the “divi" But the co-operatives have not kept up with the leaders in the race for trade. In 1960 their sales reached the record level of £1,066 million, but their proportion of total retail sales actually fell slightly and their average dividend payment was 11¾d. in the pound, compared with 1s. in the pound in 1953 and 1s. 9½d. in 1939.

In 1958, after two years’ investigation, a committee presided over by Mr. Hugh Gaitskell and with Mr. C. A. R. Crosland as secretary issued a long report on the methods and problems of the co-operative movement. They found that the expansion of membership and trade was slowing down.

In the period 1890 to 1920 the cooperative share in total national expenditure on goods and services more than doubled, but in the next thirty-six years it increased by only one-sixth.

Comparing the I950’s with the beginning of this century, the small private retailers lost ground heavily but the principal gainers were the multiple shops and to a smaller extent the department stores. The Committee found the relative lack of progress of the co-operatives since the war “the most disturbing feature.”

The Committee, some of whose recommendations came in for much criticism, urged big changes, including the amalgamation of retail societies to reduce the number from about 950 to 200 or 300, more efficient management, better service and better staff recruitment, and the improvement of labour relations.

But although some amalgamations are taking place and costly schemes of modernisation are being introduced, the troubles have continued for many of the retail societies:

In 1960 retail sales as a whole rose by four per cent., department store sales by as much as seven per cent.. Co-operative sales by only one per cent. Even the small shopkeeper did better. And now the cut-price super market is menacing the Co-ops’ traditional strongholds. Well may Co-operative officials shiver in their ” Sunday Footwear. 

If there is any mystery about the Co-ops' decline, a visit to the local branch may clear up part of it—though not for people who live in Leicester. Nottingham and certain other places where the Co-ops’ are notoriously efficient. ’’Dowdy, parochial and technically backward” were Mr. Crosland’s words for the Co-op. and the shelves sometimes tend to confirm them. (Daily Telegraph, 11.5.61.)

Trying to compete with private traders, some co-operatives are going in for cut prices but while this increases sales it means, as for the big Liverpool society, that there is no surplus available for the traditional dividend on purchases, for the first time in the Society's 47 years’ history.

Where they have been more successful is in the insurance field. The Co-operative Insurance Society, has just opened its new skyscraper headquarters in Manchester. The Co-operative News (27/10/62) found this noteworthy because it was opened by Prince Philip—

. . . the first occasion on which a member of the Royal Family has declared open a co-operative building.”

As employers the co-operatives have their problems too. Strikes are not unknown (including in the C.I.S.).

Before the war the pay and conditions of co-operative employees compared rather favourably with the majority of their private competitors. It is doubtful if they do so today. A few months ago the Union of Shop, Distributive and Allied workers made an inquiry into staffing conditions in a number of Co-operative societies. They found that two-thirds of them were understaffed and two in every five of the Union's branches gave as the reason “that recruits could not be found because of the low wages paid by the Society when compared with pay in outside jobs.” The Socialist attitude towards the cooperative movement is that it solves no working class problem. Even if modernisation enables the co-operatives to recover lost ground in their fight against their retail rivals, they cannot achieve the social revolution which is the aim of the Socialist Movement. The dreams of Robert Owen and some of the Co-operative pioneers can be achieved only through Socialism.

Edgar Hardcastle