Basically there are two ways to get societies out of poverty, both rooted in 19th century Germany. One goes back to Karl Marx, urging proletarians to conquer the state to strengthen their economic position. The other goes back to Friedrich Raiffeisen (1818-1888), the Mayor of a village near Cologne. On the basis of his Christian beliefs he taught poor people to help themselves by cooperating. Raiffeisen’s ideas strongly influenced agricultural and horticultural industries.
Professor Theresia Theurl, Head of the Department for Co-operatives at Münster University (Germany) tells us how Raiffeisen’s ideology has influenced co-operatives both then and now.
“Raiffeisen lived in the mid-19th Century when many Europeans were poverty-stricken. He cared about their problems, but unlike Marx he didn’t believe the state should improve their fate, rather, people should find their own solutions. He never stopped explaining his ideas and succeeded in innovating society. He was convinced that you can achieve together what you cannot on your own. All those small German farmers were weak on their own, but strong together. When there was a famine, Raiffeisen wouldn’t buy bread for the poor. Instead he founded a co-operative so they could buy flour and bake their own bread. He also used the co-operative model to establish banks thus giving poor farmers access to credit with which to invest.
“Co-operatives go back to medieval times (Hanze cities, guilds). But Raiffeisen was the right man at the right time, because he understood their potential. He said, ‘I can only help people if they learn to solve their problems themselves.’ Co-operatives are not a form of altruism but rather ‘well-defined self-interest’ as people would say in those days.
By constantly writing and speaking about his ideas and founding co-operatives whenever and wherever he could, he became the founding father of co-operatives in Germany and worldwide. Nowadays there are co-operatives (agricultural and others) in more than one hundred countries.
“In Raiffeisen’s co-operative model, many small owners have a vote. Co-operatives are successful if they are not too large and members agree on key issues. But I also know examples of extremely well-functioning co-operatives with over 40,000 members. Still, a good co-operative needs good organization. And of course it has to be profitable. To be successful it should have existing assets.
If the members of a co-operative think the co-operative has outlived its initial goals, they should ask if it is still relevant and what alternatives exist. It often appears that the alternatives are less attractive than the co-operative itself. Then people are back on track of talking again which is vital for any co-operative. In order to be economically successful you have to solve your group problems together.
“One shouldn’t establish a co-operative if the only goal is a high yield. The achievements of a co-operative and the relations with its members are vital for any co-operative. A co-operative is not about tomorrow’s yield; it is about long-term achievements for its members.
“Since Raiffeisen’s day his ideas have spread worldwide. You also find co-operatives in Latin America and Africa, established to strengthen people’s stake in their vocation. People have realized that you may move fast on your own, but you need to cooperate to reach the finish line. I think that is the foremost idea Friedrich Wilhelm Raiffeisen taught us.”