These principles are named after the Rochdale Society of Equitable Pioneers, a group founded in 1844 by weavers in Rochdale, England. They were one of the first consumers' cooperatives, and the first to become and remain profitable for an extended amount of time. The members of this society were looking for a way to escape from their poverty. Most were self-educated skilled laborers, inspired by the work of Robert Owen, and had recently failed in a similar attempt (called the Rochdale Friendly Co-operative Society).
The principles that the Rochdale Society set down for this attempt undoubtedly had something to do with their success, and are commonly used in descriptions and definitions of cooperatives today, in places as far-flung as Japan, Michigan, Egypt and Kauai.
- Open, voluntary membership. Anyone willing to be a member - even women - was allowed to join.
- Democratic control. The cooperative should be governed by its members, whatever form that takes. For some, representatives are elected, for others a direct vote is used. Still others use consensus techniques: the method chosen should suit and represent the entire cooperative.
- Limited return, if any, on equity capital.
- Net surplus belongs to user-owners.
This may be done by decision of the members as follows: a) by provision for development of the business of the cooperative; b) by provision of common services; or c) by distribution among the members in proportion to their transactions with the society. 1
Members of a coop are not out to individually get rich, but to better the state of the group. The Rochdale group used proceeds from their store to open a calico mill in 1854.
- Honest business practices also interpreted No credit or Sales in cash. Credit was the downfall of the Rochdale Friendly Co-operative Society. Honest business practices also extended to their product: the Rochdale Cooperative became known for the purity of their goods, as they did not fall in with the common practice of adulterating the foods they sold.
- Ultimate aim is to advance common good. These are utopian goals, and you don't adopt them if your first motivator is raising yourself above those around you. Coops reinvest in their communities, as part of a larger organism that should be kept healthy.
- Education. Cooperatives should evangelize! They are to educate "their members, officers, and employees and [...] the general public in the principles and techniques of cooperation, both economic and democratic."2
- Cooperation among cooperatives. As groups that have common interest in communities as a whole, cooperatives should cooperate in order to share resources and have greater influence.
Lists of these principles will vary. The first few - open membership, democratic control, distribution of surplus and limited interest on capital - were actually part of the constitution of the Rochdale weavers. Other principles arose out of the enacted behaviors of that and subsequent coops. In Vienna in 1937, the four above-listed Rochdale principles were deemed prerequisites for membership in the International Cooperative Alliance and that political and religious neutrality, cash trading, and the promotion of education were also cooperative principles, but unstated in the Rochdale constitution and not prerequisites.
Principles, however, are more than commandments; they are also compasses. It is not enough to ask if a cooperative is following the letter of a given principle. It is equally important to know if it is following the spirit -if the vision each principle affords, individually and collectively, is ingrained in the daily activities of the cooperative. 3
Cooperatives have a long and varied history. They are commonly understood as a tool for social change, as well as community betterment: the large reflected in the small.4 As with any such tool, it is best understood as part of the life examined and lived in accord with ideals, something that can't just be signed on to on a whim but which must be conscientiously adhered to and maintained, as each part supports the whole.
1 The Rochdale Principles. http://www.weaversway.coop/rochdale%20principles.htm
3 The Rochdale Principles of Co-operation, Ian MacPherson.
4. Although some coops are not small at all; the Associated Press, for example.