Historical background and terminology of the cooperative

Daniel Hermes

The author

Historical background and terminology of the cooperative

The cooperative system is not a new phenomenon - quite the opposite! Historically, cooperatives are firmly rooted in our legal system. The first origins of the cooperative system go back to the Germanic protective communities. The cooperative land system dates back to the 10th century and has survived in some areas into the early modern era. One example of this is Switzerland. The collective property of the members of such a village association, also known as a settlement community, formed the Allemande. This was common land that could be used by anyone, in addition to the individual property of the individual members called allodium. Each member was entitled to use an equal share.

Cooperatives were also an integral part of society in the Middle Ages. This is evidenced by dyke cooperatives, craftsmen's guilds and merchants' guilds, which had political, religious and charitable functions in addition to their economic function of securing livelihoods. However, these "corporate structures" became increasingly less important due to the freedom of trade. In the early days of industrialization, market pressure on small and medium-sized businesses increased and existential problems grew, as industrially manufactured products, even from distant regions, displaced local craft businesses in supplying the population. It therefore became imperative for these businesses to merge in order to remain marketable.

The solution to this problem was a revival of the cooperative system, which finally became established in the 19th century. Well-known representatives of this period include Schulz-Delitzsch, who founded the first raw materials associations for carpenters and shoemakers in 1894. Probably the best known and most important representative was Raiffeisen, who founded the first loan association in 1862. This was followed by the rapid establishment of credit and purchasing cooperatives.

Due to the growing popularity of cooperatives, they were enshrined for the first time in the Prussian law of 27.03.1867, which was promulgated with amendments on 04.07.1868 as a North German federal law. This law formed the foundation of today's cooperative law. Consequently, the legal anchoring of the cooperative system is even older than the BGB. The complete codification was implemented by the law concerning the Erwerbs- und Wirtschafts-Genossenschaft of 01.05.1889. This was followed by reforms, the most fundamental of which were the amendment of 1973 and the Register Procedure Acceleration Act of 20.12.1993, which shifted the management of the list of members to the cooperative itself and resulted in the promulgation of the new Cooperatives Act.

However, the popularity of the cooperative system initially only lasted until 1933. This was due to the fact that the basic democratic structures of the cooperative were not compatible with the hierarchical National Socialist idea and consequently fell victim to the pervasive Gleichschaltung. However, the tide turned again in the subsequent post-war period and the advantages of the cooperative system were reconsidered. This movement was strengthened by the founding of the German Cooperative and Raiffeisen Association.

At the beginning of the 21st century, the latest adjustment became necessary in accordance with new requirements. The law on the introduction of the European cooperative was newly anchored together with the amendment to cooperative law of 14.08.2006, which also created attractive relief for so-called "small cooperatives". For example, a European cooperative allows several cooperatives based in different countries to merge. For the time being, the cooperative system reached its high point when the idea of cooperatives was declared an intangible cultural heritage - a kind of accolade cast in stone and a unique selling point among the many different forms of society.

Conclusion:

The cooperative system has an impressive history dating back to the early Germanic communities. Over the centuries, cooperatives have proven themselves time and again as a valuable form of organization - from medieval guilds to modern credit and purchasing cooperatives. What is particularly exciting is that the cooperative idea has even been recognized as intangible cultural heritage. This tradition shows that cooperatives are not only historically significant, but are still relevant and forward-looking today. Discover the advantages and unique strength of the cooperative model!

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