Thus co-operation occupies the middle ground between competition and state or municipal socialism. In its technical sense, however, it does not cover the whole of this ground: it does not cover associations which are primarily for social, provident, or religious purposes, but only those closely connected with the production of wealth. We speak of co-operative societies for agriculture, for manufacturing, for retail, or wholesale distribution, for building or house-owning, for raising capital and so forth; while the great Friendly Societies (q.v.), though a part of co-operation as a theory of life, are not part of the co-operative movement. The line is somewhat hard to draw, and consequently is drawn somewhat arbitrarily. Thus while a society for building, or for the collective ownership of houses, is counted a co-operative society, a Building Society (as we ordinarily understand the term), though it be purely mutual in its basis, is not so counted in Great Britain, but is in the United States (see BUILDING SOCIETIES).
For the early history of the co-operative movement we have to look chiefly to Great Britain, and British co-operation acknowledges as its founder Robert Owen (q.v.). In every age and every country the origins of co-operation may no doubt be traced, where men have helped one another in the creation of wealth and agreed as brothers as to its division. In England long before the days of Owen there was much co-operation of miners and fishermen which, though scarcely obligatory on the individuals taking part in it, was largely regulated by custom. Coming to more purely voluntary associations, co-operative workshops are recorded, retail co-operation was practised in Scotland from the middle of the 18th century, while in England shops not unlike co-operative stores, but without the democratic element, were in one or two instances set up by benevolent individuals. It does not seem, however, that there was any theory of co-operation until Owen in England, and almost simultaneously Fourier (q.v.) in France, formulated their gospels, not identical, yet having much in common. Of these two Owen and his teaching are by far the more important.
The end of the 18th and the beginning of the 19th centuries were the culminating days of the industrial revolution, when the old organization of domestic industry had given way before the factory system, and the population of the factory districts was suffering a martyrdom, with ruin of body and degradation of character, from unbridled competition, long hours, women's and children's labour, pauper apprenticeship, great fluctuations of trade and employment, dearness and adulteration of provisions, the truck system and insanitary homes. Owen, having himself become a great employer of labour, after starting as a draper's assistant, saw that this was in every sense waste, and that as it paid the manufacturer to have the best machinery and not to overdrive it, but to tend it well and keep it in the best repair, so it would pay him, and abundantly pay the nation, to have the human machines well cared for, not overworked, and kept in the best condition. The popular individualistic philosophy of that day taught that the good of society would be achieved by each individual seeking in his business relations the interest of himself and his family; but Owen maintained that the well-being of the social body could only be served if each individual made that his conscious aim. For this reason he and his disciples were called Socialists. He taught further that a man's character depended mainly upon the circumstances which influenced his life; he emphasized environment, and all but denied heredity. At New Lanark, from 1799, he carried out these ideas among the workers in the cotton mills of which he was managing partner.[1] "For twenty-nine years," he wrote, "we did without the necessity for magistrates or lawyers; without a single legal punishment; without any known poors' rate; without intemperance or religious animosities. We reduced the hours of labour, well educated all the children from infancy, greatly improved the condition of the adults, diminished their daily labour, paid interest on capital, and cleared upwards of £300,000 of profit." So wonderful were the results upon the population, that New Lanark became a show-place of world-wide renown, and was visited by many of the greatest and most exalted people of the period.