Problems of Cooperation

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PROBLEMS OFCOOPERATIONA Study of the Deficiencies of theCooperative Method of

Economic Organizationand the Diffic ultiesin the Wayof Its Expansion

By JA M ES PETER W ARBASSE


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Sp ec ia l CooperativeEdition 1.00CONSUM ERS' COOPE RATIV EBOOKSCOOPERATIONANDNATIONALITY,by GeorgeW.Ru ss ell (AE) beautifulstatemen t of the phi losop hy ofcooperationby the great Irishpoetco operato r. $.25COOPERATIONASAWAYOFPEACE,by J. P. W arbas se isc us sio n of theeconomics of war andpeace. $. 50THE M OR ALE OF DEM O CRACY, byC ong re ssm an JerryVoorhis hree ad dresses on the Coo pe rat ive M ovement by the liberal Con gressman from California,with an epilogue by Dr. Jam es P. Warbasse. Co-op ed ition, $.5 0THE STORY OFTO M PKIN SVIL LE, by M ary EllicottArnold ow tobuild yourown hou ses; the story of a co op erativ ehousing projectinNova Sco tia .Paper, $.65; Clo th, $1 .00THEPEO PLE 'SBUSINESS, by Jo shuaK.Bolles reporter'sstory of progress ofco ns umer coop erati ves inAmerica . $1.50COOPERATIVE DEM O CR ACY (S pecialEdition),by J.P.W arbasse (1936)-omprehensive discussion of theorie s, principlesandpractice of consumers' coo pe ration written fromfirst-hand studyin manyco un tries . $1.50C O OPERATIV ES INAM ER IC A, by EllisCowling (1938) actual current story of co nsumers' co op era tiv es : their pas t,present and future. $1.50THE DOCTOR AND THE PUBL IC , byJ. P. Warb asse, M .D . stud y of theSociology, Economics, Ethics, and Philosophy ofM ed ici ne , based onM edical History. 575 pages . $5.00


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PROBLEMS OFCOOPERATION


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W H A T is C O O P E R A T I O N ? ( 927)TH E D O C T O R AN D T H E P U B L I C ( 935)C O O P E R A T I V E D E M O C R A C Y , in E D I T I O N ( 936)C O O P E R A T I O N , A W A Y O F P E A C E ( 939)

PROBLEMS OFCOOPERATIONA Study of the D eficiencies of the Cooperative Method ofEconomic O rganizat ion an d the D ifficulties

in t he W a y of I ts Expansion

BY JAMES PETER WARBASSED irector of Rochdale Institute, President Emeri tus of TheCooperative League of th e U . S . A . , Member of theCentral Committee of the InternationalCooperative Alliance

T H O M A S C A R L Y L E

THE COOPERATIVE LEAGUE OFTHE UNITED STATES OF AMERICA

N ew Y o r k Chicago W ashington1942


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NOTICE

CO PYRIGHT 19 42BY J AMES PE T E R W ARBASSE

AL L RIGHTS RE SERVED

CHARLES APRINTED IN THE UNITED STATES O MERICA

DEDICATEDD U C A T O R S , E X E C U T I V E S , a O R K E R S i


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CONTENTS

ABRAHAM L

INTR ODUC T I ON . xI. DE FECTS A S S HO W N B Y A UTOPSIES

O N DE A D SOCIETIES.....E R R O R S I N F I N A N C I A L P O L I C Y .....2

1. Cr edi t Business..........2 . Too Little Capital.........3. Bad Bookkeeping and Acco unting ....4. Paying Sav ings Returns T oo S oo n.....5. U ndersel l ing C o mpet ing Stores .....6. Using D onated C ap ital........0E R R O R S I N E D U C A T I O N A L A N D S O C I A L W O R K . . .111. Beginning With a M e mbership Unfamiliar

With Coopera t ion.........12. Neglecting to Mainta in Educat ional Work. . . 133. Ig noring the Social Side of Coopera t ion...64. Fai lure to D e v e l o p a nd Maintain Loyalty . . .175. Factions in the Society.......2

E R R O R S IN A N D A B O U T T H E S T O R E......41. Store in the W rong Locat ion......42. P o o r S to ck...........53. Waste fu l Store Equipment.......64. Neglecting Appearance of P remises....0

vii


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CONTENTS

5. Waste and Losses.........56. Misuse of Services of Em ployees.....7

E R R O R S I N O R G A N IZ A T I O N A N D M A N A G E M E N T . . 391. Org anization Fr om the Top Down.....92. In co m petent Directors........13. Ine fficient and In adequa te M an age m en t...34. Au tocratic M eth od s on the Part of M an agem en t . 485. Ce ntra lizing Too M uc h Po wer in Di rectors or

M ana gem en t..........06. Continuing With In com petent Employees. . . 517. Failure to Serve..........28. Nepotism ...........69 . Poorly Conducted M ee tings......7

10 . Fa ilure to Federate .........0D A N G E R S F R O M W IT H OUT........2

1 . Underselling by Com pet in g Busine sses ...22. False Reports A bo ut the Cooperative....63. Admitting Disloyal an d Disru ptive Members . . 68

II. OBS TA CLES TO COOPER ATIVE DE VELOPM ENT 69TH E N O N - C O O P E R A T I V E E L E M E N T......11. The Individu al Factor........1

2. Profit Bus iness Selfis hness.......43. An Ind ifferent M embersh ip......7

CONTENTS C

4. Un informed Em ployees.......95. The Econom ically Weak an d In experie nced . . 806. Cooperative Ex ecu tives Hired Away....27. In dividu alism Cr iticized.......48. Lackof Opportunity fo r the Dominating Indi vidual 869 . Th e Po or as Poo r Co operators......8

10. Th e Ri ch as Unwilling Cooperators....111. TheNeglect of Yo ut h........212. Incred ulity...........513. The A version of Cha rity Workers an d Reform ers . 10 0

O R G A N I C H I N D R A N C E S.........041 . The Un democracy of Large Organiz ations . . .1042. Sm all Sa vi ng s Not Sufficient In ducem en t . . .1063. HighPrices...........084. Cooperation Sl ow in A cti on . . . . . .1115. Prosperity Sometimes the E nd . . . . . .1146. Th e M any Obligations of Coo pera tion. . . .1167. Misrep resentation no t Practicabl e . . . . .1178. Un fai r Bu sine ss Prac tices Forbidden . . . .1199. Cooperative Ex ploitation of Labor . . . . .120

10 . Labor E xploitation of Coo pera tion. ....2311 . M on opoly...........2612 . Paying Unnecessary In ter est . . . . . .12913 . Violationof Cooperative Pr inciples. . . . .132

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CONTENTSPAGE

. 139. 1 4 0. 1 4 8. 1 5 3

r14 . Violation of By-Laws and Parliamentary Rules15. Inadequate Coo perative Te aching....16 . Uncoordinated Cooperative Teaching .17 . Co mpetition Among Cooperatives....18. Lack of Gr owth and Vision. . . . . . .15619 . Failure to Pe nsion Employee s . . . . . .16420 . Influence of Changeful Movemen ts . . . .16521 . Opposition of Capit alists an d Small Traders . . 1 6822. Difficulties of Acquiring Big Business. . . . 17 323 . R eputation of D estroying Profit Business . . . 17524 . Reputationof Being Foreign and Subversive . .177

P O L I T I C A L H IN D R A N C E S.........791. Laws and Customs Against Cooperation . . . 17 92. Man Power Ta ken by War.......823. In ternational Barriers........834. The Advancing Stateism .......855. Harmful State Help........906. Assuming the Qu alities of the St ate....9 37. Inability to Promote War.......958. An tagonism of the Political State.....989. Inability to Right Immediate Wrongs....02

CONCLUSION............04

COOPERATIVE PRIN CIPLES AND M ETHODSMILTON

1. D emocracy of control: Each member one vote.2. L im ited returns on capital: Not more than the currentlegal rate of interest paid.3. Savings-returns: If a surplus-saving accrues from the

difference between the net cos t and dis tribution price,it shall be returned to patron members in proportionto their patronage.

4. Unlimited membership.5. Cash business.6. Allocation of funds fo r cooperative education.7. Neutrality in political, religious, and oth er controversial

subjects.8. Fe deration of cooperative societies.9. Expansion into other fields of se rvice.

INDEX..............09


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N T R O D U C T I O Nhalf. W hen ever a deficiency or an obstacle in th e wa y ofcooperative advancement has been mentioned, th e intelligent mind is discovered try ing to visualize th e remedy or tothink ou t th e w ay to circumvent th e obstruction. I haveon occasions presented to students of cooperation in co llege classes only this obverse side of th e subject, and havebeen amazed at their resourcefulness in thinking of waysto meet difficulties. A s a critic of cooperation, I have seenstudents of th e subject n ot only analyze cooperative weaknesses an d prescribe their remedies, bu t I have seen themturn upon m e an d overwhelm my criticisms with an av alanche of propaganda in its favor. C riticism ha s seemed toelicit defense. Cooperation is basically so rich in merits,that an exhibition of it s shortcomings to th e intelligentm i n d results in stimulating protagonism an d arousingloyalty to its fundamental principles.

Whatever may be said of th e weaknesses of cooperation,there remains th e fact that, compared with profit business,its failures are immeasurably fewer, th e losses of investedcapital are proportionately less, and the security of jobs ism uch greater. A s time goes on, this discrepancy increases.C ooperation in the U nited States now represents th esoundest form of distributive business. A n d this soundnessis strengthened by frank, open, an d uncompromising facingof th e facts. The strength of cooperation is proved by fullknowledge an d discussion of its defeats as well as of itsvictories.T hi s book is a study of the pathology of cooperation.Everything that grows in nature suffers deviation from th enormal. Cooperation is a natural growth; an d its pathologyis responsive to laws which are similar to those governingdisorder in other bodies. In al l living things, when disease

I N T R O D U C T I O N xoccurs, th e organism itself creates wha t are called alexinsor antitoxins. T hese ar e substances which counteract an ddestroy th e disease-producing factor. Every living organismha s the power to create within itself, to some degree, notonly healing of its diseases bu t immunity against th e illswhich threaten its life. The physiological nature of cooperation is proved by it s curative reaction to the disordersby which it is attacked.

We do not think an y th e less of mankind because it ha sdiseases an d because there is study an d a voluminous literature dealing with human disorders. We should certainlythink less of mankind if there were no such study or literature. The same is t rue of cooperation. H e r e is an at temptto show the maladies from which cooperation suffers. Ineach case th e curative processes have been examined. It isan interesting fact that a remedy is available fo r every on eof these ills, an d the inherent healing power of nature isdiscovered. T h u s cooperation, in it s place among the livingthings of th e earth, is protected by th e conserving powerof nature which guarantees its life, its growth, an d itsevolution.

What ha s been se t down here ar e only th e cogent an dobvious facts fo r the purpose of suggesting th e more fu ndamental implications an d courses of action. A m uchgreater elaboration of this subject is possible. It is limitless,because on e m ay be wrong in many different ways, butright only in one. T hi s is w hy it is so easy to fail an d sodifficult to succeed.

B ehind al l right action there m us t be right thinking, an dright thinking must be based upon th e facts of experiencean d observation. T hi s book, accordingly, is factual . Bu t because it reveals th e weak spots in cooperation, it will be


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INTRODUC TIONtaken advantag e of by theenemies of theco operative m ov ement. There are profit business in terests that will liftfromthese pages pa ssages which, when detached from theircontex t, will seemto reflect disc redit uponco operative business. Th is wi ll cause a certai n am ou nt of misund erstanding of the cooperative movem ent on th e part of thosew ho are either not capable of com prehension or no t in clined tound erstand. But in the en d, fr ee discussion, pu blic ity,fra nk ness, an d absence of concealment should prove th ebest policy. While this book is essentia lly for cooperativestudy groups an d for cooperativ e officials, surely no thi ngconcerning cooperation sho uld be withheld from th e m embers of cooperativ e societies. And since cooperation is fo rall, pe rh ap s all students of econom ics, if they wish, are en titled to know what there is to kno w of th is cooperativeway of li fe an d affairs.W oods Hole, Massachu setts22 November, 1941

J. P. W.

DEFECTS AS SHOWNBY AUTOPSIES ONDE AD SOCIETIE S


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ER R O R S IN FI NANCIAL PO LIC Y

ERRORS IN FINANCIAL POLICY

B O V E E

[1]Credit Business

N E C K E R

TH E M E M B E R S of a co op era tive societyhaveput in money,bought goo ds with it, an dplaced th ego od s on th e shelves.T hey own th e goods; an d, if they wish, they can ca rry thego od s hom e, consum e them , an d no t put in another ce nt.Un der those circumstance s they wo ul d ha ve no store le ft.In or der always to have go ods on th e shelves, whe never am em be r takes away an y article for his us e, he m ust leaveat le ast en ough m oney to replac e what he ha s ta ke n. T hisis called "cash tr ading. " It is ess ent ial to co ope rative success .Ifon e person does no t pa y cash, th en those wh o dom us t

putin th em on ey to kee p him supplied with go od s. Ifon eperson m ay hav e this cre dit priv ilege, de m ocracy de m an dsthat all m ust ha ve th e sam e privilege ; an d if all too k it,that wou ld be th e end of th e society . O r for thos ewh o donot pa y ca sh at the tim e of car rying away the goods, them oney m us t be borrowe d elsewh er e and intere st paid . O rgo ods at wholesal e m us t be bo ught on credit at a higherprice th an fo r cash. O r surplu s sa vings, which m ig ht beused for ex pansion or give n to th e m em be rs as savings re

tu rn s, m ust be used to ca rry m em be rs on credit. Creditbusiness ad ds the ex pen se of m or e bo ok kee pingwith th epossibilit ie s of mistak es an d co m plicatio ns . All thi s en tailsm ore ex pens e upon th e pe ople who pay cash .

Credit business m ea ns hi ghe r pr ices, re striction of develop m ent , hampered ed uc ation, an d loss es from ba d accounts . It m eans charity from the thrifty bestow ed uponth e dil atory . It m ea ns that so m e m em be rs exploit theothe rs. In th e en d it conduces to fa ilure. And still th iscre dit bu siness is wi dely prevalen t am ong co ope rativesoc ie ties.

For a co op era tive store to gi ve credit is to engage in aform of business which th e store is no t set up to perform .A store is to sup ply th e m em be rs wi th go ods , no t withcredit. Credit is a bank ing fu nct ion. E ve ry m em ber of acoopera tive store society sh ould be a m em ber of a creditun ion or coo perativ e ban k. When cre dit is wa nted , itsh oul d be gotten not from th e sto re but from the creditso ciety. This is so sim ple an d so ob viou s that it is a co op erative essential.M em ber s wh odesire th e convenience of chargin g shouldm ake a de pos it pay m en t periodically in advance, or buy atrading bo ok ag ain st whi ch pur chases ar e m ad e, or buyscrip or stam ps of the socie ty whi ch are acc epted as cash.

E xperience shows thatsocie ties which have alway s gi ve ncr edit, whi ch are locate d in co m m unitie swh ere credit trading is th e univers al pr actice, hav e go ne over to cash bus ines s an d ha ve thrived . A fe w m em ber s have be en lost, butth e new prosperity that has developed ha s always abundantly com pe nsa ted fo r an y di sadvan tages that have ap peared.

Cre dit is bad for th e m em be r as wel l as for th e so cie ty


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4 P R O B L E M S O F C O O P E R A T I O Nbecause debt is a bad kind of poverty; fo r however littleth e debtor has, hi s debt makes hi m have still less. It is atrap easy to get into but hard to get ou t of. The size of debtchanges its character, fo r while a little debt m ay createfriendship, a large debt makes hostility; an d the nature ofdebt is to grow.

T oo Little Capital

T H E E R R O R of beginning prematurely is found when asociety opens a store an d then discovers that it has startedwith insufficient capital. A s a result, it has too little goodson the shelves, inadequate store fixtures, an d lack of fundsfo r cash buying. To call upon members fo r more moneyafter th e business is started gives disappointing results.With th e above inadequacies, th e customers become di ssatisfied with th e service. Loyalty holds them fo r a while,but in t ime they tend to patronize another store.

An unbalanced financial set-up has damaged many societies. They have often been short of paid-in share capital ,an d also have at tempted to build up a surplus fund, an d atth e same time have carried a large number of accountsreceivable. This produces a well nigh hopeless situation.B y maintaining unl imited membership and unlimitedshare capital, ne w members are invited, ne w stock is issued, an d more funds ar e brought in . The shares seemattractive because their value is kept at par. Speculationin cooperative shares is discouraged by their constant

E R R O R S IN F I N A N C I A L P O L I C Y 5value. The payment of savings returns not in cash but inshares helps to develop capital in hand. The best time toraise capital is before business starts. At th e beginning,each member should pa y in what he ca n from hi s personalresources up to the ma x imu m am o unt required from each.H er e the credit union serves a useful purpose in personalloans. The memb er may also borrow money from othersources especially relatives. The F i nns us e what they call"the brother-in-law method" of raising money. Then, i fmore is needed, th e society itself ca n borrow money.Cooperative banking is developing for this purpose, an din time should make large resources available. Privatebanks and non-member individuals loan money to cooperatives. Money, in addition to share capital , m ay besecured by bonds, notes, or preferred stock. T h i s latteroffers certain advantages from the legal standpoint. Preferred stock is non-voting stock. Finally , th e Governmentis a source of credit. I n this financing, it is best that goodand adequate security be given. Getting money for nothin g is bad for cooperation. The best sources of money ar eth e cooperatives themselves. Other sources ar e but a stopgap-

The sparsely stocked store is not inviting. An abundance, or a plenty, changes th e very nature of things.C3]

B ad B ookkeeping an d AccountingR O U S S E A U

T H E D A Y O N C E W A S when the manager kept unpaid billsin on e drawer and paid bills in th e other; an d that was th e


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6 P R O B L E M S O F C O O P E R A T I O Nextent of his bookkeeping. Even th e smallest cooperativebusiness now maintains an adequate set of books, thanksto the education on this subject an d to th e instruction inaccounting which ha s been promulgated from th e beginning of educational federation. Accuracy in accounting hasbecome an accepted cooperative essential.Failure to have accounts audited spells trouble. Slovenlybookkeeping ha s ruined many societies. This deficiencyin acounting, with neglect of the periodic inventory, hasm e ant that societies were uninformed as to their solvencyor financial standing. Accurate control is th e only way toknow of losses from waste, theft, an d unbalance of accounts. Without it, a cooperative business can be reducedto an empty shell.A crying reproach of American cooperatives even todayis failure to control the accounting. To leave the auditingfinally an d wholly to a firm of auditors, or even to a cooperative auditing bureau, is unwise. Auditors are su pposed to watch the cooperatives but their work will alsobear watching. The accounting system of no cooperativesociety is on a sound basis unless th e society ha s a committee which supervises or checks over the auditor's reports.A cooperative insurance society a fe w years ag o had al lits assets stolen by the treasurer. T h e y were in th e form ofhigh class bonds in a safe deposit box. But for years th eauditor, directors, an d members accepted the treasurer'sreport that they were on hand. The bo x ha d been fo r along time empty. At present a cooperative h ousing societyis adjusting its losses due to the speculations of a realestate agent manager. He had gone so fa r as to forge th ebank statements, and present always a false report offinances. The auditors accepted the forged statements. It

E R R O R S IN F I N A N C I A L P O L I C Y 7wa s not they w ho discovered th e fraud, but a member ofth e board.A cooperative wholesale ha s reported that n ot morethan twenty-five of its one hundred twenty-five memb ersocieties ar e "in excellent financial condition." Ano t h e rtwenty-five member societies ar e described as "satisfactory." The rest are in ba d condition. These seventy-fivesocieties go along with inadequate control of their accounting.Every society should have a control committee. Thiscommittee should assume that th e auditors' reports require scrutiny th e same as th e auditors assume that th ebookkeeper requires scrutiny. A nd the control committeeshould take nobody's word for anything, bu t should checkup on th e facts as fa r as possible.Where cooperative societies are federated into leaguesor wholesales, th e central organization should conduct asupervisory accounting system. E a c h society should senda daily or weekly report to th e central office which shouldhave complete knowledge of inventory, turnover, overheadcosts, etc. This central office should have experts who cananalyze these reports to know when mistakes are beingmade or when deviations from good business practices ar edeveloping. When a society is going wrong too mu c hoverhead or to o mu c h inventory, or to o little turnover, orother error the central office takes th e necessary action.If capital is needed, th e central organization has th e othersocieties to call upon. With a mo v emen t thus coordinated,failure can be ma d e impossible. It was because of such aset-up in the national Swedish cooperative league that aneconomist who studied th e situation stated that a Swedishcooperative society could not fail.


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8 PR O B L E M S OF COOPERATIO N[4]

Paying Savings Returns Too Soon

COLTONTo P A Y "purchase reba tes" for ad vertising purposes is amistake. I have mad e au topsies on societies which paid"dividends" with th e money obtained from the sale ofs tock in order to induce more people to buy more stock.This sort of fra ud is now less common. Savings re turnsshould neve r be paid unless th e assets of the society are greater than the indebtedness , ex clu sive of course, of secured mortgages. First sh ould be the paym ent of all obliga tions, then funds should be set aside for education andreserve, before savings returns are paid.M em bers of cooperative societies like to know that theirsociety is not only solvent bu t has substantial reserves .However, in these day s of economic and political uncertainty, when governments are confiscating re serves, w he ninflation is th reatened, go od policy m igh t dictate re tur ning to each individual what is his for his use as promptlyas poss ib le. Thebuilding up of cash reserves is no t altogether free of disadvantages .

Und erselling Competing Stores- S A A D I

MANY C O O P E R A T IV E S T O R E S have s tarted ou t to "get thebusiness" by undersell ing competing stores. This is al l

ER R ORS IN FINA NCIA L POLICY 9right in the course of time, after th e business is well estab lished and after the wholesale source of supply has beenwell tested; but it is dangerou s as an initial experiment.It often results in incurring th e active ho stilityof competitors, causing th em to unite on cutting prices . A conspiracy of cut prices by a group of competitors can make a cooperative store much trouble, and has cau sed the closingof m any. The cooperative store should never ac t asthough it were th e en emy of other business . Ex periencesho w s that it is best to be on friendly relations w ith co m petitors, so fa r as possib le. I once saw a cooperative m anager publicly boast that he w as going to "put out ofbusiness" his competitor. The competitor put the cooperative ou t of business .

The job of the cooperative is to ser ve its mem bers totheir best advantage . It is no t to fight anybody. The cooperative manager who joined the loc al Chamber of Com merce, an d in time becam e it s president, was a mu ch be ttermanager than th e m an who al w ay s had th e merchants ofth e tow n on hi s heels like a pack of hounds. In th e courseof time, when the cooperative is sure of itse lf , an d ha sproved it s ef ficiency, it m ay proceed to lower pr ice s . Thisis particularly indicated if the prevailing prices am on gcompetitors are higher th an th e market justifies. But pricessh ould not be reduced below th e po int where surplus sa ving and re serves are no t possib le. This is do ne on ly whe reth e aggressio n of competitors compels it. In some comm unities, expe rience shows that the best ultimate policy is to have prices a shade lower than those of competitors,but not so low as to prevent th e accumulation of reservesand the paying of savings returns. Exceptions to all su chco nditions, of co urse, arise.


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1 0 P R O B L E M S O F C O O P E R A T I O N[6]

U s i n g Donated Cap i talE R V A N T E S

O C C A S I O N A L L Y there has been ma d e available fo r startinga cooperative store, money donated from some philanthropic source. That meant the people di d not pool theirresources but used somebody else's resources an entirelydifferent thing. But money that comes too easily is dangerous. Cooperation succeeds best when a group of peoplepool their own resources and administer them together inth e mu tu a l interest. Cooperative societies have failed whenthis was not the dominant idea.Stores have sometimes been started by employers fo rtheir employees. T hese may be converted into genuine cooperative stores by these employees buying out the employers an d taking complete control themselves. However ,if th e members cannot put up all the money needed tostart th e business, they should at least put u p some. Therest is best borrowed with adequate security on a strictlybusiness basis. Philanthropy is a hazard which alwaysthreatens cooperatibn. Gifts from individuals, as from th eGovernment, are to be avoided whenever possible. Selfreliance is proved to be best.

Where philanthropic or Government capital is seeking awa y to help cooperation, it m ay better be used fo r educational purposes than for commercial enterprise.

ERRORS IN EDUCATIONAL ANDSOCIAL WORK

E M E R S O N

[1]B eginning with a Membership Unfamiliar

with Cooperation

P L A T O

T H E S O C I E T I E S of the last century an d first part of thiscentury were started by people with little knowledge ofcooperative principles. I have seen societies in which nomember an d no director knew what th e Rochdale Principles were. Failure always befell them. T h i s was becausethey violated cooperation ou t of sheer ignorance, an d co nverted their societies into confused business enterprises.But despite the information made available by The C ooperative League, there are now many societies in th eU n i ted States in this same condition. Failure awaits themunless they engage in cooperative education. When TheLeague was started, the prevalent method was to get together some people an d se t up a cooperative store. Theidea wa s that they would learn cooperation by practicing1 1


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P R O B L E M S O F C O O P E R A T I O Nit . This is a fine theory, bu t it fails in cooperation. Thetrouble is that most of such stores fail before th e membersca n learn about cooperation. The difference between thepresent cooperative era in th e United States and the erawhich preceded The Cooperative League is that since th efounding of The League, it ha s been demonstrated thateducation should precede cooperative business. T his isthe change of policy that ha s ma d e th e difference betweenfailure and success. T h e re is a hazardous interval betweenth e seed an d the fruit. In th e cooperative field, that interva l is best protected by education.

The ol d societies that failed thought of themselves asbusiness organizations and did n ot realize th e social implications in cooperation. T rue , many of them regarded themselves as businesses which might ultimately change th ebusiness methods of the world; but still their ideas revolved around business. A larger conception of cooperationha s developed as a result of education. It adds a social ideato th e business purpose. Cooperation is more an d morethought of as moving on toward a way of life as well asof business. As a result, social functions are developed inconnection with business. The ol d farm organizations madetheir contribution to this end. Their picnics, festivals, an ddays devoted to speech making an d social intercourse haveinfluenced cooperative practice. Now every good cooperative society ha s not only an educational committee, bu t acommittee on recreation and social affairs as well. Thelarger societies have educational directors an d allocate su bstantial sums to these purposes. If any one should ask,w h at is th e on e thing that ha s ma d e the greatest differencebetween failure and success of cooperatives in th e U n i tedStates, th e answer is cooperative education.

E R R O R S IN E D U C A T I O N A N D S O C I A L W O R K 13[2]

Neglecting to Maintain Ed u cat ional Work

C O W P E RT H E R E H A V E B E E N S O C I E T I E S which used education in thebeginning and then lost interest and discontinued it. Failure has been common among them. Education is n ot a stepfo r getting onto the cooperative wagon; it is part of th epermanent equipment and mu st be in constant us e an dpractice. Rochdale Institute, the national cooperative trainin g school, recognizes this principle and requires that itsmembers continue always to be students and pursue theirstudies throughout their active lives. It recognizes th e factthat there is no educated person; there are only personsin process of education.A small society in N ew England, which was strugglingalong on the edge of insolvency, borrowed a lot of money,had donated outside advice, and set up a new storemodeled after the pattern of a profit business shop. Theenthusiasm fo r the new store seemed to take th e place ofeducation. N ew members were added and the businessseems to be booming. B u t little education is carried on . Astranger who enters th e store sees nothing that impresseshim as different from a profit store, except that th e pricesar e higher. T he management thinks that packages bearingthe word "Co-op" are th e great difference, bu t this meanslittle to the stranger. He ca n see this word on profit business signs an d labels in other places. T his store has largewall spaces between the shelves an d th e ceiling which ar e


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14 PR OBLEMS OF COOPERATIONleft wholly blank except for on e placard advertising a p rofitbusiness product. All this wall space might be used to carrysome cooperative message, to give this store a cooperativecharacter, an d to drive home cooperative education. Thereare no shelves nor table with cooperative literature. Thesepeople entertain the delusion that the streamlining of thisstore is enough. Their disillusionment is ye t to com e.*Promotion, advertising, an d salesmanship cannot beregarded as substitutes for ed ucation. They have educational possibilities, bu t us ually they are associated withoverstatem en t and exaggeration of virtues an d benefits. As a result, people ge t a wron g impression of cooperation.This is the hazard of placing cooperative education underthe control of commercial interests. It is apt to partake of promotion, an d to treat educatio n wholly as a means forincreasing sales.Cooperative education is no t on a sound basis unless atsom e point, an d that is preferably at the top, it is in aposition to be impartial an d free to discuss al l aspects of cooperative problems, irrespective ofwhether such discussionha s propaganda value or not. The strengt h of the cooperative movement in the United States fo r the past twenty-five years has been that na tional federation ha s been in aneducational league. This likewise is the reason for thestrength of theSwedish m ovement.

The ever-presen t need of coo peration is fo r an educational institution that is free to promote real cooperation.Discussion must be critica l as well as laudatory. Harm ha sbeen done th e m ovement in this country by ov er-statement.Cooperatio n has so much merit, that a frank ex posure ofthe facts, pro an d con, can well be practiced. The advan-* See page 30 herein, "Neglecting Appearance of Premises."

ERRORS IN EDUCATION AND SOCIAL WORK 15tages of cooperation so infinitely exceed the disadvantagesthat free presentationof the facts in itself possesses propaganda value.*Cooperative educators need no t only to understandmethods of education, bu t they need to have in mind itsfundamental principles. Education is a process and not aresult. It is never given , it is only gotten. And on e mustkeep on getting it or he loses what he ha s. The best ed uca tion is that which one gets himself in the effort to makea living. Many a m an might speak th e truth wer e he to saythat he could no t go to college because he wa s too busygetting an education. The whole cooperative process herediscussed, if properly approached, understood, and carriedout, can be highly educational. That m eans educational fo rexecutives an d em ployees, and for members of cooperatives also.

There prevails a ge neral notion that culture rises abovethe material an d resides in the atmosphere of the esoterican d sp iritual. But culture is a matter of bread, lumber,an d textiles. The fine attributes of truth, kindness, industry, jus tice, generosity, and th e creation of beauty ar e madeout of material things an d impinge upon material things ,or they come to nothing. In concerning itself with food,housing, and clothing, coop eration is capable of promotingevery virtue . Its exercise offers a vast fieldof education.Education must be la rger than cooperation . Its purposem us t no t be learning, nor even culture, bu t the development of the power to understand, an d the kn owledge thatunderstanding m ust precedewise action; an d it must resultin initiative an d the ability to function effectively .* See pamphlet by the Author on C ublished by Th eCoo perative League.


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16 P R O B L E M S O F C O O P E R A T I O N

Ignoring th e Social Side of C ooperationH E S T E R F I E L D

To G O T O T H E S T O R E , ma ke purchases, go to an occasionalmeeting, and think of cooperation wholly as a business isnot enough. People often get into a hu md r u m wa y withtheir cooperative an d depend upon entirely different relationships fo r their social life. Such societies miss an opportunity. People who have united in a cooperative business,an d who look into on e another's faces at members' meetings, are capable of expanding this relationship; an d bydeveloping social activities, the membership is cementedmore closely together. The members meet not only at th eplace of business, but at th e cooperative movie, dance,picnic, lecture, theatrical, banquet, recreation park, vacation house, an d in other social diversions. To neglect recreation, is to confine cooperation to business; whereas th eai m is to make cooperation a way of life.*Programs for recreational activities may be ha d fromThe C ooperative L eague. A pam ph l e t on this subject isavailable. There ar e some cooperative plays drama developed around the cooperative idea. A num ber of cooperativemovies are to be had. Several excellent novels deal withcooperation. The Cooperative Society fo r R ecreational Education of The Cooperative League promotes interest inthis subject.Some of the district leagues an d some retail societies inthe U ni ted Sates maintain centers of recreation. CentralStates Cooperatives ha s a farm at a lake in Michigan with a* See pamphlet on C

E R R O R S IN E D U C A T I O N A N D S O C I A L W O R K 17number of houses for year-round use. Summer camps ar epopular. The Finnish societies take a farm an d convert itinto a recreation park with facilities fo r swimming, trackathletics, dancing, drama, an d singing. C ooperative toursar e recreational as well as educational.

In Europe cooperative recreation has been developedm u c h further. The cooperative movie house, the theatre,orchestra, an d recreational parks an d buildings prevail.A ll these ar e th e answer to th e lack which exists inm a ny societies. It is slowly being overcome. In th e sociallife of th e members, through their contacts with on e another in their societies, th e general spirit of th e organization affects their relationship. In th e successful society,this is giving its members many advantages not otherwiseto be had. The members ar e drawn together in the enjoymen t of th e success. It creates a stronger fraternity. A ndwhile it may be said that adversity tests friends, it may alsobe said that prosperity makes friends.[4]

Failure to D evelop and Maintain Loyalty

DECLARATION OF INDEPENDENCE

MAN Y S O C I E T I E S have failed because of simple indifference on th e part of th e members. T h e y had no special interest in th e society, an d di d not know why they shouldhave. It conducted just another store. There were othersin the town that were better. T h i s fault goes back to amu ltitude of other faults. A ll th e errors contribute to thisend.


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18 P R O B L E M S O F C O O P E R A T I O NC ooperative education should not only provide unde rstanding but it should prejudice th e member in favor ofcooperation. When Sydney Smith said that if he ha dto write a review of a book, he never read the book becausehe found that it prejudiced hi s mind, he was, perhaps,

carrying neutrality too far. But cooperation is not like abook; it is th e book. A n d the member ha s read it an dbelieves in it as hi s economic missal. Loyalty is increasedby more reading and mo r e understanding of it.Ma n y societies lack a med iu m to cement the membersto th e cooperative ideal an d to one another. Meetings an da society paper ca n do this. T w o kinds of cooperative literature ar e needed. O ne is th e informative, statistical,philosophic, an d interpretative. It is fo r leaders, students,an d executives. The United States movement is rich inbooks of this type, and poor in current periodicals. Thecrying need is fo r magazines not of propaganda, bu t offact-finding, analysis, an d criticism.Another need is fo r attractive, breezy, well written po pular papers, addressed to th e family. This kind of literatureshould contain a great variety of matter something tomeet every taste. It should be especially rich in news an ddiscussions of personalities. People like to know aboutpeople. T hey ar e th e most interesting creatures in theworld. People like to read about others; they like to readabout themselves. A popular paper that goes into everymember-family can contribute mu c h to the promotion ofloyalty by uniting the cooperative idea with th e simple an deveryday humanities. Some cooperative societies ar e su ccessfully developing such papers.Interest in th e society an d prejudice in its favor are alsopromoted by action. Democracy is strengthened by respon-

E R R O R S IN E D U C A T I O N A N D S O C I A L W O R K 19sibilities. The board of directors of a cooperative societyshould be divided into committees, converting each director into a specialist in some part of th e business. Thesame should be done with the members. There ar e a m ultitude of committees that can be created to give everymember some special responsibility. Committees on ed ucation, entertainment, store, esthetics, and health ar e indications of th e needs of societies whose members show alack of interest.* There ar e societies in which each memb eris ma d e a member of a special committee as soon as hejoins th e society. H is special interest is discovered an dhe is put on th e committee to which hi s interest adaptshim. If his interest is not expressed in any committee, anew committee is created. D emocracy works best whenpeople have responsibilities as well as opportunitieswhen they have things to do. D emocracy needs action;without action democracy perishes.It is good fo r cooperation that it is in competition withprofit business an d is always threatened by such business.This competition n ot only keeps cooperation spurred toits best action an d challenged by a competitor, bu t it alsois a basis of loyalty of the membership. These membersar e the proprietors of a business. And their business is incompetition with another method of business. The cooper-ators believe that their method of business is the better.That is th e reason they are in it. T hey have pride in theirstore, bank, insurance, refinery, or whatever it is. T heyincrease their loyalty by social understanding and socialactivities. T h u s cooperation naturally promotes loyaltyan d loyalty promotes cooperative success.I f a merchant could say that all his customers were* See pamphlet, C


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20 P R O B L E M S O F C O O P E R A T I O Nanxious fo r th e success of hi s business an d jealous of itsprestige an d standing, he would be in a very happy position. He cannot say this. B ut th e cooperative store ca nsay it.Loyalty is increased by education and understandingof cooperation as a social as well as an economic force.B ut above al l it is fostered by efficiency. The society thatprovides incontrovertible advantages fo r its members,an d to these adds education an d expanded culture, is th esociety that is guaranteed a loyal membership.A ll th e above applies equally to th e relations existingbetween th e retail an d th e cooperative wholesale. The retails unite to create th e wholesale. It behooves them to setup a wholesale that will serve them well. Often at thebeginning the service an d prices may not be wholly satisfactory. The retails have made th e wholesale. If it ha sweaknesses, the retails ar e responsible; and th e retailsshould remedy them. O ften the retails give their patronageto a profit business wholesale where they find th e priceslower or the service better. This is a common practice.B ut it is n ot th e answer to th e problem. The first duty ofretails is to ge t together and ma ke their wholesale function to their satisfaction. To say, "We ca n ge t better priceselsewhere," is evading the issue as well as th e responsibility.T oo many retail managers go sneaking off to profitbusiness with orders which should go to their wholesale.It m e a ns that they do not understand cooperation, thatthey are imbued with profit business psychology, or thatthey are downright dishonest. The directors should knowwhat is going on an d correct it. Suppose th e prices are toohigh, th e place to go is not to a competitor, but the con-

E R R O R S IN E D U C A T I O N AND S O C I A L W O R K 21stituent retails should all go together to a meeting of theirwholesale. If they cannot organize their wholesale so asto make prices satisfactory, then they should jointly an dby mu tu a l agreement close up th e wholesale an d confessdefeat. B ut fo r each to dribble away from it until it failsis the profit business way, not the cooperative way. In th ecooperative movement this practice is cowardly. The issueshould be faced and dealt with squarely an d boldly.*

No retail society should think of th e wholesale as another business which it m ay patronize or not. That is th ecompetitive profit business attitude. The cooperative retailmust honestly carry its responsibility. The wholesale is apart of its business mechanism, set up by it, and maintained by it, fo r its service.What is said here is equally applicable to wholesaleswhich are members of a district wholesale or of a nationalwholesale. Those that ar e not loyal to th e wholesale ofwhich they are members ar e disloyal to cooperation. Nomember can justly go off alone and patronize some othercompeting business.Reasons fo r dissatisfaction should openly be laid beforethe other members an d steps fo r their correction shouldbe taken. The memb er that will not cooperate should bedropped from membership.Improve th e society, retail or wholesale, until it servesits members better than does any other business. This isth e essence of cooperation. T h i s is th e basis upon whichloyalty mu st be built.T he best results fo r self-interest are to be gotten byloyalty. What is one's interest becomes one's duty; an dduty is the other n a me of loyalty.

See page 43 herein, "Inefficient and Inadequate Management."


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22 PR O B L E MS O F CO O P E R A TI O N[5]

Fa ct ion s in the Society

A S O C I E T Y IN NE W Y ORK went to pieces be cause of twopolitical factions. Each fought the other. E ac h tried to getcontrol of theboard ofdirectors . E ac h was more concernedfor itself than for the so ciety. This same factiona lism dest royed so cieties in New England and in the NorthernS ta te s twenty ye ars ag o, when cooperators were takingpolitics more se riously thanthey do tod ay.

Religious cults have split cooper atives. A number ofsocieties in Pennsylvania failed for the reason that certaintrade un ion s attempted to secure control. The non-unionists in one instanc e quit the society and left the m em bersof a singl e union inpo ssession . The society then becam ean adjunct to the union. The union wa s superior to theso cie ty . Failure naturally fo llowed.Cults, fa ctions, and cli ques have de veloped around in div iduals who went out to geta followingto put throughsom e personal scheme sometimes good, so metimes bad.Ambitious individuals create cliques to promoteso me planto advance themselves. Often this results in deprecatingso mebody else . Wherethere is freedom ev ery body m ay doit. Unfortunately it does not always happen that an equalizing force rises up to oppose a force that would be co medominant. Where bitterness and untruth prevail, m uchdamage results.

It is so metimes said thatcontrove rsy is good for thesociety; it creates interest and gives themem be rs som ething

ERROR S IN E DU CATIO N AND SO CIA L W O R K 2to talk about that pertains to the soc iety. This may betrue. It may be lik e the stimulant that makes the tenantshoot the landlord, and also make s the tenant miss him.

It beh ooves the directo rs of a society toprevent the development of disruptive factions. That is one of their jobs.Unfortunately directo rs themselve s are often in volved inthe fa ctionalism . Here is where the president of the cooperative can perform invaluable service. He ca n protestagainst misrepresentation and expose unfairness. He ca nplacate disgruntled elements . He ca n call a members'meeting and impartially discuss the disruptive practices.An ho nes t, fair-minded, impartial president, who has thecourage to challenge anything that threatens the good ofthe so cie ty , is one of the most important elements in cooperative organization. Heaven help the so ciety that ha s anice, wishy-washy president, or one of the dull butpompo us type, when danger appears!


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ER RO R S IN AND AB OU T THE ST O R E 25

ERRORS IN AND ABOUTTHE STORE

L A O -T S Z E

[1]Sto re in theWrongLoc at io n

C O N F U C IU S

IT T A K E S a lot of lo yal ty, qua lity good s, and low pricesto kee p pe ople go in g to an out-o f-the-w ay locati on fo rtheir su pplies. A so ciety in Ca lifornia did ever ything rightex ceptfo rone thing the store w as in conveniently locate d.A nd that ba d loca tion ruined the soc iety . When theytried to chan ge to a more desirab le location, it w as toolate. The prim ary ar dor had coo led ; an d futherm ore , thelocal merch ants' association had gotte n sc are d at theirpos sibilitie s an d preve nted them from renting m ore desirable pre mise s. C he ap rent is im po rtant, but peo plenow wan t to do their sh op ping at a co nvenien t pla ce. E xpe rience show s that a co ope rative st ore , es peci ally if ithas no del iver y, mus t be withinea syreach o f themembe rs 'hom es. Pe ople soon ge t tiredof going to "the othe rsid e ofthera ilroad tra cks"forgo ods. Alittlemor erent m ay spellthe di ffe re nce betw een suc cess and failu re.

On the othe r ha nd, the store is in the wrong place ifthe rent is toohigh .The hop ethat an ex pen siv e store in anexp ens ive loc atio n would attract en ou gh ex tra bu sine ss tom ake itpa y ha s us ually fa iled tobe re aliz ed. Coop erati oncannot fly too hig h. The bes t p la ce fo r a store is som ewhere inthe mid dle grou nd. The exception is in the la rg eand w el l established so cie ty .Be fore de ciding upon a lo cation , thematter sho uld beca nv as se d from ev ery side. The ques tion of loc atio n m ay prop erly be su bmitted to a m em bers' mee ting so thateve rybo dy m ay ha ve his say . As a society grow s and dev el op s, itm ay ha ve m em be rs distant from the original sto re.A bran ch store sho uld the n be established in the vic in ity of an y considerable gr oup of memb ers .This is better thana new socie ty toac com mod ate new cooper ators.

[2]Poor Sto ck

S E N E C A

C O O P E R A T IV E S T O R E S hav e at tempted to start with (inadequa te sto ck and with (b) poo rly sele cte d stock. A soc iet y in Pennsylvani a raised $1,2 00. The y sp ent $10 0 onorgan ization exp en se s, $80 0 on st ore fix tur es , and $3 00 on good s fo r th eir shelv es. A sm ar t salesm an hadthem inve sta goo d part of their $300 in a barga in lo t of can nedsa lm on, an d an ot her sa lesm an ind uced the man ager totake ad vantage of a great opportunity to get a jo b lot ofco nde nse d mi lk. But presently it w as real ized that the


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26 P R O B L E M S O F C O O P E R A T I O N E R R O R S IN A N D A B O U T T H E S T O R Emembers could n ot live on salmon an d milk; and inside ofthree months, th e fancy coffee grinder wa s in the secondhand market . The amount of goods necessary to satisfya membership is n o longer a matter of speculation Peoplestarting a cooperative society ca n ge t exact information.The society in Michigan that ha d enough clothes-pins tohang out the wash of th e whole State; th e society inwestern Pennsylvania that ha d enough shoe polish toblacken all th e shoes in Pittsburgh fo r th e next ten years;th e society in I llinois with enough bottled olives to lasttill 1967; an d th e on e that was overloaded with sugarwhen the sugar market collapsed are no longer excusable.The growing cooperative wholesales, th e central sourcesof exact information, and the voluminous literature oncooperative business make these accidents unnecessary.Inadequate stock does prevail in th e buying club, butthat is expected and understood. A little store that is notmuch more than a hole in the wall had better remain abuying club until ready with adequate capital an d membership to be something effective. The premature store is on eof th e accidents to be avoided. Like a too-early cabbage,it does not head well.

[3]Wasteful Store Equi pm ent

C L A U D I A N U SINVES TING T O O M UC H in fixtures is the result of high pressure salesmanship and bad judgement . The argument thatth e good appearance created by fancy showcases, scales,

refrigerators, an d display gadgets attracts people and willsoon build up a rapid turnover is overdone. A cash registerthat looks like the infant offspring of a hotel indicatorcrossed with a church organ does not impress anybodylooking fo r a ca n of spinach that is not on th e shelves.People go to th e store to ge t things for their ow n use theycannot eat fixtures. The less conspicuous th e gadgets are,the better.Some day th e cooperative movement will wake up to itsopportunities, m a ke its place of business wholly unlike amodern grocery store, an d give it a n ew character. Thegadgets will be ou t of sight, an d in their place will bethings of beauty, comfort, an d of cultural importance.

The nature of cooperative business is wholly unlikethat of other business; why should not the place of business be wholly different? L et us visualize a cooperativegrocery store as it might be . The front is like that of a clubhouse, a modern home, or a parish house no goods in

' th e windows, bu t an inviting entrance. O ne enters a roomnot unlike a modernistic living room of a cultured home.This is th e store where th e woman orders wh a t sh e wants.There ar e easy-chairs, curtains, rugs, tables with books an dmagazines, bookcases and literature. The room is homey,comfortable an d inviting. I n recessed bookcases are samplesof th e goods not dozens upon dozens of canned peas,bu t on e ca n of peas one of everything. T h i s display ofgoods is not the most conspicuous thing in th e room, bu tth e least conspicuous. In th e room is a clerk or the m anager an d a cashier. T h i s is th e room upon which th e moneyis spent. B a c k of this room is th e larger part of th e premises. H e r e is th e storeroom with pine shelves on which thegoods ar e stored.


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28 PROB LEM S OF COOPERATIONThe modern idea of equipping a st ore with plate glassfixtures and ch romium ste el, an d storing thou sa nds ofcans, bottles, and packages on this highly expensive shelv

ing does no t mak e go od sense in co operation. Plate glassand ch romium steel wareho using is unnecessary whenit can be done on pi ne she lves. Just what put it in to anybo dy's head that can s upo n cans of string beans ca n bem ad e to look esthetic is di fficult to im agine.

Thewareho us e roo m of this store is thebusyplace. Her ethe ord ers ar e filled. A belt system running ar ound theroom expedites bus iness. To sa ve overhead, this room ma ybe arrange d for self-service. The sto re we are conside ringca rries only a limited nu mber of bran ds. The quality isgo od. To save cost s, perishabl e go od s ne ed no t at first beha ndl ed . One kind of coffee is eno ugh . The m ultitude ofthings encouraged by profit bus iness ca n be eliminated bycooperative education. Each week the st ore issues a li st ofits good s with prices and a blank sp ace op po siteeach ite mto fill in for orderin g. A soc iety in New Jersey has nostore, only awarehouse. Ea ch memb er ha s a tele pho ne and orders com e in th rough this means. This lis t goes to ev erymember. Members ar e en courage d to com e with an ordersufficiently la rge to carry the family for on e or two weeks.A goo d bi g discount is taken off theorder of $5 or more.This discount is bi g enou gh to mea n a substan tial saving.No family can afford to ign ore it. This mean s big pa ck ages . It lit erally co nverts the bu siness in to retai l who lesa ling . The indolent habit of living fro m ha nd to mou th, ofbu yin g ev ery day or so a quarter of a po und of this anda small ca n of that, is expensive for the con sumer. Familyplanning ca n be subs tituted . It is goo d for th e family tota ke this grocery list, chec k off the amount of each item

ER RO RS IN AND ABOUT THE ST ORE 29[wanted, and send itto the store.Th is means familybudgetin g, an d this is edu cat ional.Thebusiness is on a cash-and-carrybasis. Asm all ch ar geis m ad e fo r eac h de livery . This store does not nee d to bein a hi gh rent are a. The prices can be so low,or the savingsreturns so large, that mem bers will patronize it wh ereverit is . Th is is the first store of the society. As more storesare developed, one ca ter ing to the less provident and themore affluent can be set up. Su ch a store would supplyva rieties, luxu ry go ods, an d sm al l orde rs . The savingswo uld be less.Thefront roo m of this store woul d be no t only a ce nte r of bu siness but al so a ce nter of education. The educational sec retary or educa tional co mmittee wou ld hav e its desk here. Here also woul d be the headquarters of thecredit union, the in surance society, an d othe r allied organizations or de partments . These could be accommod ated in adjacent rooms, in dicating a co ordina tio n of co ope rativeactivities.This set-up would be sm all an d si mple in th e sm allsociety, an dex pan ded as the socie ty exp ands. The tim e hascome for cooperators to develop cooperative im ag inationand pla nning. Cop ying the expensive method s of profitbus iness does not do cooperation credit, especially whiletho se methods are illy adapted to cooperation.

Theold-fas hioned st ore wa s a forum wh ere men gathered ro und the cra ck er barre l to exchange news an d sol ve the problems of th e day. Theco ope rative store ca n mod ernize this anc ientpractice, an d m ak e itself a pleasan t plac ewh ere ne ighbors meet upon a commo n ground. Here thefin e art of conversation ma y reveal th e folly of the learnedan d the wisdom of the unt utored.


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30 PROBL EM S OF COO PERA TION

NeglectingA ppe arance of Pr emises

A U E R B A C H

TH E S L O V E N L Y S T O R E b es pe aks a sl ove nly pe ople, jus t as corrupt gove rn men t sig nal ize s a corrup t elec to ra te . Thedi rty cooperative s tore is an an om al y to co operation b eca us e coope rat ion is by nature clean, an d the di rty storem ean s only that so m e no n-cooperative elemen t ha s gainedent rance to the so ciety . The proble m is so lve d by discover ing and reform ing th e slo ppy store or by not permittingit to st art. Ei the r a nic e store sh ould be st arte d or no neat a ll.The sl ovenly cooperative store ha s do ne its da mage an dse en it s day . It sh oul d be a thingof the pas t. Theco operative m ovemen t of the U ni ted S ta te s ha s bee n dam aged bydisord erly ha nd s as w ell as by disorderly minds. Thereisan idea that a disorderly store is ass oci a te d w ith busyness.It is the oppos ite . It is ea sier to ke ep a st ore in order thanin di so rder. Les s work is en tai le d w here thin gs ar e sy stem atized than where chaos pre va ils. A ba sk et of shr iveledlem ons, a le ttuce leaf on the floor, a lost potato repo sin gin a dus ty co rner are the telltale language of m is m an agem ent , with a m ultitude of th ings left und on e. Ord er is

ano ther na m e for c leanlines s. And cle anl ine ss m ust preced e beauty .Cleanlin es s m us t pre vai l not only in the co operativepr em ise s bu t in the pe rsonn el as wel l. Theef fec t of clea nlin ess upo n a m an is so grea t that itextends to his m ora lch aracter. Tr us tw orthy men li ke to be dean. Virtue an d

ER RO RS INAND ABOUT THE ST ORE 31[m er it do no t abide in th e co mpa ny of di sorder an d dirt.A st o re m anager with soiled ha nds an d an unclean ap ronI on ce ex pla ined to me, "Weca te r to work in g peo ple, an dI the y don'tw an t us to put on an y airs." He insulted labor .We have had en ou gh of th is so rt of thing in the Uni tedStates and we nee d to clean hous e. Besides ord er , cleanliness, and sy stem , attention to the necessary estheti cs is ne ed ed to stre ng the n the cooperative m ov ement. Harm onious co lo rs , paint properly applied, flowers, flow er b ox esand de co rative shrubs are cr y in g nee ds. Thes e th in gs canno tbe le ft to chance. G oo d es th etic ef fe ct s req uire the skillan d tast e of exp erts . The Com m itte e on Art an d Achitec-ture an d the Co operativ e D es ign S erv ice of The Cooperative Leaguesh ould reachev ery so ciet y. Consumer D istribution Corporation is do ing eff ectivework in th is field .Not onl y is cr eative art ne eded, bu t sup erv ision , to gu arante e the m ai ntenan ce of order an d bea uty , is necessary.A co operative so ciety in M assachusetts spe nt a largeam ou ntof m oney tobeautify its restaurant and food store.Thi s in cl uded a st ained glass win do w m ade by a ca pa bl eartist . Then es thetic su per vision re tire d. Thestaine d gla sswindo w one tim e was pa ste d ove r w ith gaud y adv ertisi ngsig ns , adv ising pe ople to drink thi s or that unhealthful

' co coa con coctio n, or walk a m ile to ge t to bac co hea rt. Avu lgar displa y ca n easily des tro y at te m pt s at b eauty . Cooperative s tores, to m ee t the poss ibi lities which co oper ation offers, can be m ade un ique in their a tt ractiveness. People have grow n tired of the unattractive stores. Su ch stores hav e failed an d cl osed up . The tim e has co me forcooperation not ev en to co py the m ethod s of profit bu sine ss, bu t to do the un iqu e th in g and create in it s premisesabeautythat isou tstanding an deve n superb.


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32 P R OB L E M S O F C O O PE R A TIONs an amazing fact that most cooperative st ores in the

United States look like ordinar y profit business stores.O ne can go int o them, make a purchase an d go out, an dno t know the y were different fro m any other bu siness.They miss the greatest opportunity their business offers,the op portunity to de clare their co operative character. Itis th ei r big business asset an d the y neglect to take advantage of it.

The cooperativ e store should no t attempt to im itate eventh e bes t profit business store. It should have its own charac ter. The stores of the Stockholm society, in Sweden,posses s a beauty peculiarly their own. American stores cando th e same. Besides harmonious colors, order, symmetry in the placing of goods on the shelves, an d scrupulous cleanliness, there shouldbe dis tinctiveco operative features.There are three good aids to this end. First, there is th erainbow flag of th e International Cooperative Alliance,now used in forty countries. The rainbow colors lend the mselves to a variety of arrangements. Second, th ere is th eseal of The Cooperative League two pi ne trees of greenwith their roots ex tended in a circle of the same coloragainst a background of gold symbolizing th e sun. Thisha s been used to produce some highly artistic effects inthe hands of competen t artists . Third, cooperative legendsor mottoes can be used. These can be painted on the wallsin such a way as to be both educational an d artistic.

The use of such cooperative leg ends ha s great possibilities. The literature of cooperation is rich with suchmaterial. Simple short sentences are best. The followingar e examples: "This store be longs to the cu stomers.""There is no single owner who makes profits from thisbusiness ." "The savings in this business belong to its

ERRORS IN ANDABOUT THE ST ORE 3 3patrons alone." "C onsumers , this is your business." "Wehave united with our ne ighbors to conduct this businessfo r ourselves. " "This store is on e of m an y thousand cooperatives in everyco untry in the world." "We do businesswith ourselves." "Neighbors unite in cooperation to supplytheir needs." "T hi s is on e of the world 's 500,000 cooperative bu sinesses." "Be your own m erchant." "In this storethe difference between the cost pr ice an d the price yo u pa ybelongs to you." "T hi s store belong s to a so ciety of consumers w ho run it, no t to make profits from other people ,but to supply themselves with the things they need." "Inco operation, pe ople unite and learn to supply their retailneeds; the n retail societies unite to form cooperativewholesales ; the wholesales proceed to manufacture thethings the retails need, an d th en to supply themselves with ra w m at erials. Thus by s imple experience, beginningsmall, consumers have built up great distributive businesses, large wholesales, an d some of the mos t efficientm anufacturing businesses in the world, an d are savingth emselves the profits in all th ese activities that otherwisewould go to somebody else." "The more cooperation expands, th e less is the ex pansion of the political government in business an d in autocratic control over the livesand property of the people." "Cooperative business isprivate business run by the people for their ow n privatewelfare." "The world is going to have totalitarian state-is m running all business, or it is going to ha ve cooperation.Which do your pre fer?" "Cooperation is th e way of plenty,of justice, an d of peace." "In cooperation, all help each."Here ar e some mor e: "B y cooperating with on eanother,we im prove the golden m oment of opportunity an d catchthe good that is within our reach." "This store represents


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3 4 P R O B L E M S O F C O O P E R A T I O Nconsumers in business." "Each member in this society ha son e vote and no more; it is an example of democracy atwork." "This is ou r store an d we never cheat ourselves.""T r y buying at cost an d see ho w yo u like it." "In cooperative business, th e more yo u consume th e more yo u save;join th e cooperative and ea t yourself into house an dhome." "This store is an institution for education ineconomics."There is a tendency n ow to take a good looking profitbusiness store as a model an d m a ke th e cooperative storelook like it. T h i s has been successfully done in severalinstances, with the result that th e appearance of cooperative stores has been greatly improved. B ut an experiencedcooperator would know this is not enough. These storesusually have nothing in them but some packages bearingthe word "Co-op" to show that they ar e different. O n t h estrength of this imitation of profit stores, members ar eexpected to flock in an d swamp th e clerks with their demands . But something more must be added or disappointm e nt results. Legends on th e walls and bulletin boardwill help but they do not alone suffice.

The fundamenta l need is that th e members be m a d eaware of the unique nature of their business. They mustknow that their store, while it m ay look like another store,is different. It is a store owned by th e consumers. It makesno profits for other people bu t returns its savings to itsmembers. It is their private storehouse for their service.These things can be taught only by making us e of educational methods. If education is not carried on , th e streamlining of the store is in vain. From th e cooperative standpoint, it is so m u c h waste. Experience proves this to beth e case. Of th e two, education can do more to m a ke a

E R R O R S IN A N D A B O U T T H E S T O R E 35cooperative store look good to th e eyes of its members-than ca n an y amount of store engineering. But the twotogether ca n create great results.

C5]Waste and Losses

R A N K L I NW A S T E is F O U N D most prevalent where disorder prevails.T h e r e are many kinds of waste. They all spell leakage an dcost to th e society. I was walking through a store in northern Michigan with the president of the society. To showm e that he was a privileged person, he picked up twoapples from a basket, put on e in his pocket an d proceededto ea t th e other. Leakage! Y e s , worse than leakage: downright theft. When th e store manager was closing up thatnight and getting ready to go home, I do n ot know whetherhe slipped a ca n of sardines in his pocket or not, bu t Ido know that th e president of the society ha d suggestedthat he might.A n ol d society in N e w Y o r k melted away because ofunaccountable waste or leakage. N o b o d y ever found whereth e goods went. T h i s al l comes back to the need of punctilious accounting methods, inventories, an d auditing.Boards of directors must watch th e overhead costs. Thesecosts must bear a definite relation to th e total intake fromgoods or services. The overhead expense must be keptdown. It must never exceed th e difference between th e costan d distribution price of the goods or services supplied.Efficiency does it. The Central Cooperative W holesale ofW isconsin sends out to managers an d directors a bulletin


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3 6 P R O B L E M S O F C O O P E R A T I O Non "Expenses." These it itemizes in percentages an d showswhat they should be . It gives recommendations entitled"Means of Reducing Expenses," an d furnishes a list ofover twenty possible wastes which may occur in a cooperative store. E ven where the business seems to be going well,th e board may wisely sit down with the manager at regular intervals an d go over this list. Litt le things n ot readilythought of thus receive attention. D eterioration caused byplacing moist goods in a place where they dry ou t too fast,goods spoiled by storing in a d a m p location, waste inwrapping parcels, unnecessary an d careless us e of machinery, permitting goods to deteriorate and suffer total lossrather than move them with a low price are some of thelittle things that m a ke fo r waste an d loss. The saving ofa fraction of on e per cent here, an d also there, m ay easilya d d u p to success instead of failure. "Trifles make su ccess, bu t success is no trifle," said Michael Angelo. O n l ylittle m i n d s scorn little things.The dishonesty in profit business an d in political business is well known. It also occurs in cooperative business,but, I believe, to a lesser degree. Accountants sometimesfind th e accounts of cooperative employees short. Stealingdoes occur to the discredit of cooperation. E verything p ossible should be done to prevent it, and to develop amongemployees th e sense of duty which they first owe to themselves and, secondly, to the society. Above al l is neededthe inculcation of th e idea among th e employees that theyare not only th e custodians of goods, but of goods whichare factors in a great cause, goods which are sanctifiedby th e function they are performing in purifying th e business world, goods which must not be profaned by an ydishonorable act.

E R R O R S IN A N D A B O U T T H E S T O R E 37[6]

Misuse of Services of Employees

H A Z L I T T

W H O H A S N O T S E E N th e clerks in a cooperative store doingnothing when a hundred things cried ou t fo r attention?Socrates said: "He is not only idle w ho does nothing, bu the is idle w ho might be better employed." Every cooperative store should have literature and a reading room, ora table, or corner, or some comfortable place where peoplewho need to kill time can read about cooperation. If clerksor manager have put everything in order, have cleanedup al l the bad spots, have whitewashed the cellar, an dpolished th e truck, an d there remains nothing more to do ,in th e absence of customers they could be better employedreading good cooperative literature than the tabloid papersI have often found them perusing. And it behooves th esociety to see that it is m a d e available for them. Cooperative employees should be kept busy in some way promotingcooperation. If they waste time, time will in th e end wastethem. They must be taught that cooperation is so important that they cannot kill time without injuring eternity.

It is said that For tune knocks once at every door. Manypeople on opening the door do n ot recognize For tunebecause she stands there disguised as Work; they turnaway an d close th e door. The idle employee is n ot onlystealing something from his employer but he is injuringhimself when he fritters away t ime that might be put toprofitable use. It is fo r directors to see that the manager


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38 PROBL EM S OF C O O PE RATIONdoes no t steal time, and for the manager that th e clerksar e occupied. D es pite the fa ct that cooperative employeesare often overworked, still there is enou gh latent energyin the un used time of th ese employees to b ui ld a greatmovem ent.

AND MANAGEMENT

Y RU S

[1]Organization From the Top Down

D R . JO H NSONTH ER E H A V E BEEN a number of attempts in the UnitedStates to organize co operatives and presen t to a gr oup ofconsumers a ready-made society. Usually it ha s been awealthy philanthropist w ho ha s done this. There are instances where it has been done by corporation s for theirem ployees. Trade unio ns , with large surpluses, have doneit fo r their member s. A s imila r result is seen w her e asingle individual, of aggressive ability, does th e wholejob; while the m em bers, w ho m he inv ites to jo in, st andqu ietly aside and se e on e m an create a cooperative storefo r them. Su ch societies have gone along after a fashionuntil the parent pow er or the gu iding genius becomesexhausted or disappears, and then th e en d co m es quickly.N. O . Nelson, awealthy manufac turer, built up a cooperative organization w ith sixty-one stores in an d ab out NewOrleans , with yearly sales of nearly three million dollars.So long as he could ca rry th e responsibility, an d pay th e

39


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P R O B L E M S O F C O O P E R A T I O Ndeficit, the business we nt on . The membership in these"top down" cooperatives have not taken th e initiative, n orthemselves raised th e money, nor learned ho w to assumethe responsibility, nor educated an d raised up people fromtheir own ranks to carry th e executive responsibilities.Failure is inevitable.The most effective wa y philanthropy ca n make cooperation succeed is to begin with education. Instead of startin g a store an d giving it to th e people, cooperative education may be carried on a m o n g the people until theyknow so m u c h of cooperation that they spontaneously express a desire to go into cooperative business. Philanthropy ca n then see that they are guided toward the bestsources of information. It ca n supply necessary instruction.B u t th e work must be done by the people themselves,developing their ow n officers to assume responsibilities.A nd t h e people must raise th e money. T h e y m u s t put inwhat they can, an d wh a t they need to borrow m ay besupplied from the philanthropic source. B ut this shouldbe on a strictly business basis with adequate security. B ydonating only educational help, an d moving ahead onlyas the people show their ability to run their ow n business,philanthropy m ay promote cooperation without doingactual harm. It m ay also finance schools fo r th e trainingof cooperative educators an d executives. It m ay m a k eavailable expert advice an d critical supervision of cooperatives. B ut in th e end, all these services are best suppliedfrom purely cooperative sources. Self-reliance is best.

The best help that philanthropy or extra-cooperativeinterest ca n render cooperation is to help finance cooperative education. Education must precede cooperative business. Education can always go farther an d faster than

E R R O R S IN O R G A N I Z A T I O N A N D M A N A G E M E N T 41business. This means that more education ca n be conductedthan cooperative business can finance. C ooperation ca n bedamaged by getting "easy money" fo r business, but "easymoney" fo r education ca n greatly assist cooperation's advancement. N. O . N elson did cooperation harm with thefortune that he spent. He could have used his moneywholly fo r its good, had he devoted it to cooperativeeducation rather than to cooperative business.*

It might be possible fo r a philanthropic fund, with effective guidance, to start a big store as a profit business,and then carry on cooperative education among the cu stomers an d invite them to bu y shares in the enterprise.When enough shareholders have been secured, they mightbe organized into a cooperative society, an d th e ownership and control of th e business turned over to them. Thiswould be after they ha d demonstrated their interest an dability to run th e business successfully as a cooperative,I an d ha d m a d e themselves owners of the property. Sucha plan has never been put into successful operation inAmerica. But no one ca n say that it could n ot be done.[2]Incomp etent D irectors

D R . J O H N S O NS O C I E T I E S H A V E P E R I S H E D because th e membership haveelected th e wrong people to their board of directors. T h i sparticular cooperative function is not taken seriously* See page 11 1 herein, "Cooperation Slow in Action."


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42 P R O B L E M S O F COOPERATIONenough. Socie ties give thought and take pa ins in selectinga store site; b ut when i t comes to selecting a b oa rd o f directors, they often fa il to us e th e same critical ju dg ment .It is a subject which needs in format ion an d discrimination.A temporary executive or o rganiza t ion committee m ay beelected during the organizati o n s tage; but when a p ermanent board of directors is chosen, more del ibera temethods must be used. The temporary organiza tion co mmittee is no t necessarily th e best materia l fo r permanentdirectors. Often they ar e a different sort. A transient residen t or an outside organizer m ay function efficiently asa promotor and temporary chai rman; b ut fo r a pe rm a n e n tpre sident, it is necessary to have a pe rm a n e n t res ident ofth e community.

The co m m o n practice of a members ' meet ing to re ceivenominations from the flo or and then and there to electdirectors is no t wise. A so ciety must have great vital ityto survive such a blow. U nder such circumstances, nominations a re too often animated by friendship, em otion, o rth e complimentary im pulse .To ge t th e best results, a nominat ing committee sh o ul dcanvass th e membership and pick out th e best materia l .Th en , after th ey have presented their candidates, nominations from th e floor should be accepted. B ut under nocircumstances should the election of directors take place

at that t ime. One or two months should intervene beforeth e election . This gives th e members t ime to ge t inform at ion about th e candidates, and talk them ov er. Many g o o dso cieties publ ish a pic ture of each candida te wit h a statement concerning hi s qualifications, send it to the members ,and permit them to vote by mail.

When it comes to electing directors of a district league ,

ER R OR S IN ORGANIZATION AND MANAGEMENT 43o r a regiona l o r nat ional federa t ion , th e pro b l e m becom esm or e serious. Wh er ever possible, consum er membersshould be elected rather than employees . B ut this is oftendifficult because th e ordinary members of a co opera t ivesociety ar e usually not as well informed as managers an dit is often difficult for them to t ravel distances to atte ndmeetings. H owever, th e directors should as fa r as possib lerepresent the sort of duties th e organiza t ion is required toperform. Persons experienced in business are bes t adap te dto th e directorship o f business organizations, and personswith knowledge a nd ex perience in educat ion are bes t fo reducational o rganizations.

The best director is not always th e best ta lker or glad-ha nd e r. The directors are going to select from their nu mb er th e pres ident ; and they need th e most competent material in th e society. S om etimes a po m pous fellow is electedpres ident when there is no t much to hi m but a magnificentabili ty to do nothing. Gravity is often only a mysteriou squiet which co ve rs th e defects of the mind. The good m a nis not enough. Directors must not only be good, they mustbe good fo r something.

[3]Inefficient and Inadequate M a n a g e m ent

A R I S T O T L E

T H I S is O N E of the most co m m o n causes of fa i lure ofcooperat ive societies. It ha s alrea dy been discussed underage 37 . The nature o fincompetence is too l a rge a subject to be t rea ted here.


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P R O B L E M S O F C O O P E R A T I O NIt means not doing th e right thing at the right time. A n dno cooperative can exist in th e presence of this deficiencyin a manager. There ar e four different courses whichcooperatives ar e found to follow. The first is to continuewith the incompetent manager and let th e society fail. Thesecond is to transfer the manager to some other positionfo r which he is better fitted. T h i s is dangerous because heoften changes from an incompetent employee to a disgruntled employee, an d continues to do th e society harm.The third is to try to educate him an d patiently encouragehi m to improve his ways. T h i s is th e way of charity, butit commonly fails because a m a n, wh o ha s not withinhimself the motive power to d o a good job, can only withth e greatest difficulty be given that motive power by somebody else. The fourth course is to dismiss th e manager.This is direct, simple, an d effective provided a co mpetent manager can be put in th e vacant place. Many asociety has cast out the devil and taken on chaos in hisstead.There is on e strange aspect to this subject. Loyalty isoften urged in place of demanding efficiency. A s a resultof incompetence, giving rise to higher prices, poor quality,ba d service, or unattractive store premises, members decrease their patronage of the cooperative an d go to somecomp eting store where they get better satisfaction for theirmoney. The directors notice this falling-off of patronage.The committee on education is called into action. It putson a campaign to increase loyalty to the cooperative. "Beloyal to your store" becomes th e slogan. The heat is turnedon . Members ar e m a d e ashamed of going to other stores.Business is increased. I once sa w in a store in Pennsylvaniaa bulletin board at the entrance of the store an d on that

E R R O R S IN O R G A N I Z A T I O N AND M A N A G E M E N T 45board wa s posted the amount of patronage each memberha d given th e store during the past month. The peoplew ho were trading elsewhere were held u p to shame.Loyalty wa s th e watchword. A nd wh i le this was going on ,th e incompetent manager, in his dirty store, passed poorquality goods across th e counter at high prices, to intimidated cooperators w ho ha d been cajoled into giving ittheir patronage. All this was in the name of "a greatideal!"

Loyalty is like liberty: it m u s t be deserved, or it isworth nothing. Loyalty should come naturally. The bestw ay to promote it is by good service. It must be worthwhile to be a member of a cooperative society. If th esociety serves th e member well , it ha s taken the first an dmost essential step to guarantee his loyalty. A rtificiallywhipping up loyalty is no substitute for firing th e manager.A ll that is said here concerning managers applies alsoto other employees. Cooperative success depends upon awell coordinated group of competent employees, knowingthat they are answerable to the manager; a manager, co nscious constantly of his answerability to the board of directors; a board, realizing they are th e agents of th e members;an d a membership which understands that they are responsible, by their patronage an d control, fo r a business whichnot only serves them but which is a part of a great nationaland world community of mutual interests an d obligations.Without this chain of responsibilities and efficiencies, cooperation fails.

The seaworthiness of a vessel is not known until itencounters wind an d waves. The competence of the marin er is proved only by gale and shoal. A competent captaincan, nevertheless, bring to port a leaky craft; and an


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46 P R O B L E M S O F C O O P E R A T I O Nincompetent captain ca n wreck a perfect vessel. Since failur e of a cooperative society is bound to occur if th e m a nage r is incompetent, an d since failure among cooperativesis n ot common and is growing rare, managers seem to begrowing more competent. This is logically an d factuallyth e case. While finding th e competent manager is a problem, still many are being found. The training schools inthe Uni t e d States an d th e widespread cooperative education help toward success in this field.However, there is throughout the U nited States a strikin g num erical inadequacy in th e supply of competent m a nagers. There ar e in this country thousands of groups ofpeople w ho have studied cooperation, w ho have met anddiscussed th e possibilities of starting some cooperativebusiness. They are satiated with theories an d ideals, an dthey wa nt to go into action an d accomplish something;bu t they do n ot know where to turn fo r a manager. Totake an employee from a chain store or some on e w hoha s failed in his ow n business, or some inexperiencedperson, is n ot th e answer to their problem. There is m u c htalk of building cooperatives faster, bu t it cannot be doneuntil trained executives ar e available to administer th ebusiness. If I were asked why cooperation does not growfaster in th e Uni t e d States, I should say because of th einadequate supply of informed and trained educators an dexecutives able to take cooperative societies in hand an dmake them succeed. The people w ho wa nt cooperation areready, th e need an d the opportunity are there, bu t th esupply of administrators is insufficient.

There is another problem. C ooperative societies oftenhave to go away for managers an d other employees. Som etimes they do this when just as good workers ar e to be

E R R O R S I N O R G A N I Z A T I O N A N D M A N A G E M E N T 47had a t home. D irectors often prefer outsiders because theyar e more easily hired an d fired without local complications.This gives rise to discontent on th e part of members whomight be eligible for th e jobs. It is far better to employmembers of th e society where they are available and co mpetent; and their investment in the society, as members,makes fo r trustworthiness. The American Finns have adhered strictly to this method with excellent results. A llthis is a part of th e policy of local self-sufficiency. Itmay be laid down as a fundamenta l that a cooperativesociety should within itself be as self-sufficient as possible.That means with regard to th e supply of capital, th e supplyof commodities, an d th e supply of labor. Where there areno members of a society available to render competentservice, those w ho are possibilities should be tried inunderstudy positions. It is in th e interest of local sufficiency. The people in th e local units should do everythingfo r themselves that they possibly can. The best improvem e n t is from within outwards. T h i s is on e of th e manyrespects in which cooperation differs from political go vernment which moves toward centralization an d awayfrom local autonomy.

B a c k of it all, th e members in general are responsiblefo r inefficiency an d inadequacy in the management of cooperative societies. They cannot shirk this responsibility.It is th e price of democracy; an d democracy imposes itupon them. The power of control resides with the m embers; an d responsibility walks hand in hand with power.It does not suffice for members to complain about management as though it were something outside of their sphere.The management is created by them; they must m a ke itright; or th e guilt is theirs.


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48 P R O B L E M S O F C O O P E R A T I O N[4]

Autocratic Methods on th e P a r t of the Management. .

H E R B E R T S P E N C E RS O M E T I M E S societies have failed through permitting anautocratic board of directors to ignore th e membership.Such boards have acted as though they owned th e society.They have done important things without consulting amembers' meeting or have even defied th e members andhave taken actions which were contrary to th e wish ofth e majority of th e members. O f t e n a board resents th ethwarting of their plans by th e members. T h e y do notwa nt to be bothered by a members' meeting. I have ha dthe president of a society tell me that members' meetingswere a nuisance, an d they wished they could ge t alongwithout them. That m ay be good executive business bu tit is n ot good cooperation.

The members must control. They must fe

Problems of Cooperation

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