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Rh and the chief outlet for the always redundant capital of the well-established stores. The Scottish stores also have their Wholesale Society, not less important relatively. For many purposes these two are in partnership. In each of them the net profits are returned to the stores as a dividend on purchases, and thence to the whole body of members; but in the Scottish Wholesale a part is also paid to its employees as a dividend upon their wages. There are also a few local federations of stores, mostly for corn-milling and baking.

Strongly contrasting with this production by associations of consumers, or “consumers’ production,” is the co-partnership, or labour co-partnership, branch of co-operation. Its simplest form is an association of producers formed to carry on their own industry. Originally such societies

were intended to consist solely of the workers employed; the ideal was the “self-governing workshop,” introduced from France by the Christian Socialists of 1850; but membership is now open to the distributive societies, which are the chief customers, and usually, to all sympathizers. Shares are transferable, not withdrawable. Profits first pay the agreed “wages of capital,” usually 5%, and of what remains the main part goes to the employees as a dividend on their wages, and to the customers as a dividend on their purchases. In well-established societies the dividend on wages averages about 1s. on the £. This is not usually paid in cash, but credited to the employees as share capital, whereby all may become members. Besides other producers’ associations, more or less co-operative, there are over a hundred co-partnership societies at work in England, against a dozen or fifteen in 1883. They are engaged in boot-making, printing, building, weaving, clothing, wood-working, metal-working, and so on. Some of them are very small, while others have businesses of £50,000 a year or more, the average being about £10,000. The majority show fair, sometimes large profits. Each is governed by a committee, which is elected by the members and appoints the manager. A minority of them sell in the open, i.e. the non-co-operative, market, and a few sell largely for export.

We constantly hear that co-operative production is a failure. There have no doubt been failures, especially of big experiments attempted among men totally unprepared. But many of the failures counted were not truly co-operative. At the present day consumers’ production is successful

beyond all question, while the net growth of producers’ associations in the last twenty years has been marked both in number and importance. These two forms of production best illustrate the two rival theories which divide British co-operation, and between whose partisans the conflict has at times been sharp. The consumers’ theory maintains that all profit on price is abstracted from the consumer, and must be returned to him; while to him should also belong all capital and control, subject to such regulations as the state and the trade unions enforce. This theory is fully exemplified in the English Wholesale Society, and in some of the smaller federations for production, which employ workmen, whether co-operators or not, for wages only, and admit no individual, but only co-operative societies, to membership. It is also exemplified by the great majority of the stores, though in their case the employee may become a member in his capacity as a consumer. The co-partnership theory, on the other hand, maintains that the workers actually employed in any industry, whether distributive or productive, should be partners with those who find the capital, and those who buy the produce, and should share with them the profit, responsibilities and control. The consumers’ party contend that societies of producers make a profit out of the consumers, and thus are never truly co-operative, while as they multiply they must compete against each other. The co-partnership party answer that labour at least helps to make the profit, and that competition, as yet almost insignificant between their societies, can be avoided by federating them (a process long ago begun) for buying and selling in common, and for other common purposes, while leaving each the control and responsibility of its own internal affairs. They further advocate the eventual federation of the productive wing of co-operation with the distributive, for settling prices and all matters in which their interests might conflict. In this way they say the co-operative system may extend indefinitely without sacrificing either individual responsibility and freedom, or a general unity and control, so far as these are necessary to secure the common interest. On the other hand they hold that the opposing system tends more and more to centralization and bureaucracy, and divorces the individual workman from all personal interest in his work, and from any control over its conditions. They contend, moreover, and it is indeed admitted that, in spite of the great advantages which consumers’ production has in its command of a market and of abundant capital, only a small part of industry can ever be carried on by associations of the persons who actually consume the produce. Outside this small part, therefore, voluntary co-operation is impossible except as some form of co-partnership.

On the working-out of these two principles depends the future of co-operation. The example of Scotland probably throws light on the problem. There co-operative production, amounting to some millions sterling, is nearly all carried on by federations of consumers’ societies, including the Scottish Wholesale, which apply more or less successfully the co-partnership principle—i.e. their employees are admitted to share in profits, and may become members, whereby they are further admitted to share in capital and control. The type of organization hence resulting is very much the same as where a society of producers admits consumers’ societies to membership, and sets aside a proportion of the profits to be returned to them as dividend upon their purchases. To this combined type, we have seen, English productive societies, started by producers, have come; and it would appear that those started by consumers must ultimately tend to it. However, in spite of honoured leaders of the early days, the consumers’ party is at present greatly in the ascendant in English co-operation, and even in the Scottish federations it is almost strong enough to abolish co-partnership, and allow no one to share in capital, profit or control except in his capacity as a consumer.

An association of co-operative societies and individuals, called the Labour Co-partnership Association, exists to maintain the principle of co-partnership in co-operation, and also to promote its gradual adoption in ordinary businesses. Some progress in this latter direction is being made, there being a tendency to improve upon simple profit-sharing by capitalizing the workman’s “bonus,” whereby he becomes a shareholder, and the business is gradually modified in a co-operative direction. There are remarkable instances of such modification abroad, notably that of the great iron foundry and Familistère at Guise in France. The most noteworthy, among several, in England is that of the South Metropolitan Gas Company, where after eighteen years of the system 5000 odd employees had in 1907 more than £320,000 invested in the company; they also elect three of themselves directors of the company, this being one-third of the board. Unfortunately this example is, or at least was, marred by a feud with the trade unions, whereas there is friendship between trade unionism and co-partnership, as indeed between trade unionism and co-operation generally.

One of the most recent and promising developments of English co-operation is the tenants’ co-partnership movement for the common ownership of groups of houses, which the society owning them lets out to its members. These societies are but few as yet, but they have sprung up rapidly and promise great usefulness and extension. Somewhat similar societies have long been a recognized branch of co-operation on the continent of Europe.

Such, then, are the history and present extent of co-operation in Great Britain. Turning abroad we find in almost all civilized countries, besides other forms of co-operation, important and growing movements roughly similar to those above described, but on the whole less identified with the working classes and less coloured by their social and economic ideals. In France, Germany, Switzerland, Italy and elsewhere, there are very important co-operative