HISTORY OF COOPERATIVES
IN THE UNITED STATES:
AN OVERVIEW
By Lynn Pitman, UW Center for Cooperatives
Revised December 2018
Cooperative organizations have been organized 1858) and Charles Fourier (1772-1837),
throughout history to meet many different needs, searching for paths to a more harmonious,
often in response to economic and social stress. In utopian society, articulated arguments that
the United States, cooperative organizations provided a broader rationale for cooperative
appeared very early, reflecting both the European organizations.
heritage of early settlers and the basic need for
cooperative solutions to rural conditions. The more pragmatic William King (1786-1865)
advocated the development of consumer
EUROPEAN INFLUENCES
cooperatives to address working class issues. His
self-published magazine, "The Cooperator",
The development of U.S. cooperative provided information on cooperative practice as
organizations are rooted in the upheavals that well as theory. King emphasized small
characterized the Industrial Revolution in England cooperatives that could be started with capital
during 1750-1850. During this period many small, supplied by members. He stressed the use of
home-based enterprises disappeared, forcing democratic principles of governance, and the
workers to move to cities where they faced harsh education of the public about cooperatives.
working conditions and low wages. In rural areas,
the enclosure movement and changes in land The wave of consumer cooperatives that
tenure patterns drove many small farmers off followed were part of a broader vision in which
their lands into towns and cities looking for work. social needs could be met through cooperative
action. The Rochdale Society of Equitable
Building on trade and social guild traditions, Pioneers, considered the prototype for the
mutual aid and "friendly society" organizations modern cooperative association, was organized
sprang up to address the conditions of the times, in 1844. Building on the successes and failure of
and contributed to the development of the previous organizations, the Rochdale pioneers
cooperative business ideas. Robert Owen (1771- developed and codified a set of principles for
History of Cooperatives in the United States | 1
, successful cooperative business operations. These
principles were widely publicized and distribution,
and are the basis for the seven cooperative
principles that continue to influence cooperative
practice today.
The 1840's was a period of extreme famine and
hardship in Europe, and cooperative responses
emerged in other European countries as well. In
Germany, F.W. Raiffeisen and Herman Schulze
organized cooperative loan and credit
organizations. These were models for the
cooperative banks that spread across Europe, and
were the forerunners of credit unions and the
cooperative farm credit system in North America..
Two men pose at the Barron Coop Creamery (Dairy) next t
Cooperative farm marketing and farm supply
the churns full of butter, which is ready to be packed into th
organizations took hold and flourished in Denmark
small barrels nearby. Barron, WI, USA.c. 1900, WHS #323
in the 1870's without government assistance or
subsidies. The success of these cooperatives has
been attributed in part to the Folk High School The first recorded dairy and cheese cooperatives
system, which were established to provide a non- were organized in 1810, and cooperatives for
formal, liberal arts education to adults. The other agricultural commodities followed. These
education provided the foundation for an active early cooperative efforts on the part of
and engaged citizenry who are essential to a well- agricultural producers were local, independent
functioning democratic society. of any larger organization, and relatively short-
lived.
DEVELOPMENT IN THE
UNITED STATES Small, localized cooperatives during this time
were organized to purchase products in bulk for
members and sell them at cost. Many of these
EARLY HISTORY consumer cooperative ventures developed
Cooperative development in specific economic independently throughout the 19th century; by
sectors sometimes followed divergent paths, 1866 they could be found in most important
influenced by the social and market conditions of a industrial towns nationwide. (Parker, p.25)
given time and place. Periods of significant cross-
pollination between sectors also occurred, The westward expansion in the first half of the
especially when broader socio-economic forces 19th century created a surplus in agricultural
were at work. It is in the agricultural sector, production as those lands were settled and
however, that cooperatives have had the most cultivated. Farmers faced difficult economic
significant economic impact in the U.S. conditions that included low prices, wide
marketing margins, high freight charges, and
The first recognized cooperative business in the high interest rates. Marketing cooperatives were
U.S. was a mutual fire insurance company. It was organized by farmers to counter these
founded in 1752 by Benjamin Franklin, and conditions. (Bakken and Scharrs, p. 47)
continues to operate today.
History of Cooperatives in the United States | 2
IN THE UNITED STATES:
AN OVERVIEW
By Lynn Pitman, UW Center for Cooperatives
Revised December 2018
Cooperative organizations have been organized 1858) and Charles Fourier (1772-1837),
throughout history to meet many different needs, searching for paths to a more harmonious,
often in response to economic and social stress. In utopian society, articulated arguments that
the United States, cooperative organizations provided a broader rationale for cooperative
appeared very early, reflecting both the European organizations.
heritage of early settlers and the basic need for
cooperative solutions to rural conditions. The more pragmatic William King (1786-1865)
advocated the development of consumer
EUROPEAN INFLUENCES
cooperatives to address working class issues. His
self-published magazine, "The Cooperator",
The development of U.S. cooperative provided information on cooperative practice as
organizations are rooted in the upheavals that well as theory. King emphasized small
characterized the Industrial Revolution in England cooperatives that could be started with capital
during 1750-1850. During this period many small, supplied by members. He stressed the use of
home-based enterprises disappeared, forcing democratic principles of governance, and the
workers to move to cities where they faced harsh education of the public about cooperatives.
working conditions and low wages. In rural areas,
the enclosure movement and changes in land The wave of consumer cooperatives that
tenure patterns drove many small farmers off followed were part of a broader vision in which
their lands into towns and cities looking for work. social needs could be met through cooperative
action. The Rochdale Society of Equitable
Building on trade and social guild traditions, Pioneers, considered the prototype for the
mutual aid and "friendly society" organizations modern cooperative association, was organized
sprang up to address the conditions of the times, in 1844. Building on the successes and failure of
and contributed to the development of the previous organizations, the Rochdale pioneers
cooperative business ideas. Robert Owen (1771- developed and codified a set of principles for
History of Cooperatives in the United States | 1
, successful cooperative business operations. These
principles were widely publicized and distribution,
and are the basis for the seven cooperative
principles that continue to influence cooperative
practice today.
The 1840's was a period of extreme famine and
hardship in Europe, and cooperative responses
emerged in other European countries as well. In
Germany, F.W. Raiffeisen and Herman Schulze
organized cooperative loan and credit
organizations. These were models for the
cooperative banks that spread across Europe, and
were the forerunners of credit unions and the
cooperative farm credit system in North America..
Two men pose at the Barron Coop Creamery (Dairy) next t
Cooperative farm marketing and farm supply
the churns full of butter, which is ready to be packed into th
organizations took hold and flourished in Denmark
small barrels nearby. Barron, WI, USA.c. 1900, WHS #323
in the 1870's without government assistance or
subsidies. The success of these cooperatives has
been attributed in part to the Folk High School The first recorded dairy and cheese cooperatives
system, which were established to provide a non- were organized in 1810, and cooperatives for
formal, liberal arts education to adults. The other agricultural commodities followed. These
education provided the foundation for an active early cooperative efforts on the part of
and engaged citizenry who are essential to a well- agricultural producers were local, independent
functioning democratic society. of any larger organization, and relatively short-
lived.
DEVELOPMENT IN THE
UNITED STATES Small, localized cooperatives during this time
were organized to purchase products in bulk for
members and sell them at cost. Many of these
EARLY HISTORY consumer cooperative ventures developed
Cooperative development in specific economic independently throughout the 19th century; by
sectors sometimes followed divergent paths, 1866 they could be found in most important
influenced by the social and market conditions of a industrial towns nationwide. (Parker, p.25)
given time and place. Periods of significant cross-
pollination between sectors also occurred, The westward expansion in the first half of the
especially when broader socio-economic forces 19th century created a surplus in agricultural
were at work. It is in the agricultural sector, production as those lands were settled and
however, that cooperatives have had the most cultivated. Farmers faced difficult economic
significant economic impact in the U.S. conditions that included low prices, wide
marketing margins, high freight charges, and
The first recognized cooperative business in the high interest rates. Marketing cooperatives were
U.S. was a mutual fire insurance company. It was organized by farmers to counter these
founded in 1752 by Benjamin Franklin, and conditions. (Bakken and Scharrs, p. 47)
continues to operate today.
History of Cooperatives in the United States | 2
