Czech cooperatives history briefly

IntroductionBy Czech Cooperative Alliance (www.dacr.cz), the co-operative system in the Czech Republic, as well as all its extensions, which will be further introduced in more detail according to the field of their activities, are also based on these principles. The leading organization of the co-operative system in the Czech Republic is the Co-operative Association of the Czech Republic, which represents the Czech and Moravian co-operative system and its interests in the public in the Czech Republic, as well as abroad. The Czech co-operative system has a rich, more than 160 years long tradition and the Co-operative Association of the Czech Republic draws upon the traditions of co-operative values and principles, in order to serve its members and at the same time contribute to the improvement of economic and social conditions of life in society,. Together with member organizations, it co-operates with the government and individual ministries, promotes the interests and needs of co-operatives and their associations and supports the general development of the co-operative system. According to the Statement on the Co-operative Identity, approved by the International Co-operative Alliance (ICA) in 1995, a cooperative is an autonomous association of persons who have voluntarily united in order to satisfy their economic, social and cultural needs, by means of a commonly owned and democratically managed company. A similar definition can also be found in a document of the International Labour Office, concerning the role of co-operatives in economic and social development. For the co-operative system, international co-operative principles, approved in Manchester in 1995 by the International Co-operative Alliance, are fundamental. These particularly include: voluntary and open membership democratic control economic participation autonomy and independence education, training and information co-operation among co-operatives concern for communityAccording to the traditions of the founders, members of a co-operative believe in fundamental values, such as honesty, openness, social responsibility and care about others.We can understand two basic types of cooperatives as workers and customers, see below. Both type are at home in the Czech Republic above 160 years having their rich history. New social cooperatives we can understand as a type of workers or producers cooperative mostly.

1. Czech workers, farmers, craftsmen and similar types of co-operatives

a) First co-operatives for provision of earnings associating people to provide living, earnings or competitiveness of their trade in the market in Bohemia were established as early as in the late 19th century, pursuant to Imperial Act No. 70 passed in 1873. This way, co-operatives emerged spontaneously, associating craftsmen such as book printers, furriers, bakers, butchers, small metal workshops, etc.[footnoteRef:2], and also occupational, workers' or processing cooperatives and other, including theatre or symphony orchestra co-operatives. In general, Czech co-operative movement reached the top of its activities before World War II when co-operatives in Bohemia built very sophisticated networks that included also purchase and selling centrals, retail shops, saving and loan co-operatives, and a co-operative bank. [2: In 1892, Prvn vrobn drustvo cvokask (the First nailers' co-operative) was established in Vn pod Temnem to become the first productive co-operative in the Czech territory. It celebrated 120 hundred years of continuous operation as productive co-operative Kovo Vn. Two years later, Prvn vrobn drustvo dlnk klobounickch (the First productive co-operative of hatters) in Prague, and a printers' cooperative Grafika in Plze were established. ]

The first one of Czech co-ops, it was the Prague foodstuff and saving fellowship (Prager Viktualien und Spaarverein) based on cooperatives principles and values in 1847. In the following ninety years, the co-operative movement flourished here. Co-operatives had created a rich network with credit unions and cooperative Bank as essential co-operatives finance agents. There were mostly full pallet of type of co-operatives with their centrals, and sale and support bodies. The empire Co-operative Code (No. 70/1874) and the Revision Law (No. 100/1903), both were in the ground. After 1938, all Czech cooperatives were obligatory subordinated to The Third Reich organisational system of war-planned economy, and uniformed. After 1945, cooperative network had renewed quickly. This situation would be demonstrated by some figures about credit unions:

In 1920 there were in the Czech region 3.820 credit unions with 409 thousands of members, 1925 4.006 506 , 1930 4.269 646 , 1945 3.625 1.070 , 1947 4.248 1.306

b) After 1948, the new totalitarian regime in Czechoslovakia started to use the co-operative form of economy as a tool of political supervision over small producers and craftsmen, and to ensure mass production within the central plan. The state also decided to establish new co-operative associations for provision of earnings productive co-operatives, e.g. in the restaurant industry (Jednota), barbering and hairdressing (Hygie), repairs of clocks and precision mechanics (Mechanika), smithy gold and other precious metals (Soluna), sewing folk costumes and folk handicraft (LUV), co-operative of plumbers (Instala), and other. Each small producer or anyone who wanted to run a craft then was obligated to join a co-operative, which often operated countrywide. Around 1955 then, the state started establishing productive co-operatives of the disabled (e.g. KARKO, INVA, etc.) to involve disabled people in the centrally planned economy. The disabled members were given an opportunity to obtain skills in handicrafts. In that time, we must remark that co-operatives were subordinated to central associations controlled by the state (starting as early as in 1938, i.e. at the beginning of World War II). In the period after 1954, members of co-operatives were bound to associate their property in question. However, immovable property continued to be registered as the original owners' property in the register of real estate, including the associated farm land, but the members owners lost their right of disposal of their property. Service co-operatives in agriculture (such as ploughing, machinery, milling, and processing co-operatives) including the purchase and selling centrals were liquidated by the state after 1954. Work was compulsory for all citizens also in co-operatives and "supplies" resulted from the central plan schedule. The nature of both productive and agricultural co-operatives became very similar to the character of workers' co-ops. Saving and loan co-operatives were liquidated in the 1950's by the state and their property and liabilities were taken over by esk nrodn spoitelna (Czech National Savings Bank) without any compensation co-operatives lost their autonomous financial sources (nor after 1990). The original cooperative and auditing acts were repealed by central planed laws. Co-operative laws reflecting principles of co-operative identity were passed. Once teething troubles were overcome, productive and agricultural co-ops have reached high productivity thanks to their professionalism and sophisticated system management. Co-operative ownership in the Czech Lands has never lost its private nature, but throughout the totalitarian period, it was considered a relic of capitalism, and at the same time, "a specific type of socialistic ownership".

c) After 1990, there were political attempts to liquidate the co-cooperative sphere as part of "return to the market" and a neo-liberal dogma. Co-operative movement became a "shady" relict of the totality for the society. Co-operative laws were repealed and co-ops were governed by the Commercial Code. Individual ownership was put above cooperation. A so-called transformation act was passed, by which the state privatized the de-facto private co-operative property. It compelled co-ops to identify the original owners and their property very quickly and to offer them to take over this property. Impacts of the transformation can be illustrated by the fact that e.g. up to 40% of agricultural co-ops' property was spent on notarial services. In the transformation process, many co-ops came apart, many were abolished, and others transformed into joint stock companies or limited companies. Due to that, the number of co-ops in the Czech Republic fell down dramatically. Many of the co-operatives lost the principle of mutuality. Many of co-operatives' production facilities were "taken over in a hostile manner" by the state and privatized. Today, many co-operative associations for provision of earnings are struggling to survive in the free market, including co-ops of the disabled, which are supported by the state by means of the Employment Act. (After January 2014 the new Acts bring no better condition but follow to depress co-operative sector to crumble it. New law for social co-operative appears within Civil Code).

However, there are also new co-ops, initiated by members associated in them, such as Fontes Retrum (research), Lkrensk drustvo (apothecias) , Templsk sklepy (winery industry), Kulturn noviny (journal) see the table below. Also, new "social" co-ops arise today in order to increase employment of the handicapped, being initiated by EU-funded projects (2007 - 2013) to support development of social and local economy. The range of "traditional" activities known from the times of centrally planned economy has extended by new activities, such as counselling, rentals, high-tech and other. Thanks to professionalism, improved management, and finding their place in the market, some co-ops have eventually become very successful, for example Grant, drustvo umleck vroby Turnov (jewellery), Vvoj odvn drustvo vTeti (textile), or Templsk sklepy ejkovice vinask drustvo Winery industry), see below. However, the law today also makes it possible to establish "co-operatives" that do not fulfil the ideas of co-operative traditions, and therefore, they are not presented here (for instance a co-op of developers owning agricultural land they have bought in order to use it for "greenfield" building of logistic centres, for business etc.).

Many of typical co-operative associations for provision of earnings, especially productive co-ops of the disabled or co-ops in areas with high unemployment have a wide portfolio of activities registered in the Companies Register. This way the co-operatives ensure their ability to employ their members in the conditions of the open market. However, being pressured by the market, they often switch from qualified work to simple and monotonous work, usually assembling. See the example of Vrobn drustvo nevidomch Karko, st nad Labem (blended people), once famous for their skillful basket-makers and brush-makers. Such co-ops have preserved the membership principle and democratic decision-making, but they pay price for it. Those co-ops that have been able to develop a specific production programme demanding a high-qualified work with a top-quality management are more successful in the market today. In such co-operatives the member principle is often suppressed (the number of real members is minimum, the number of employees is growing), and sometimes, even the socio-economic purpose of the association and non-for-profit principle fade away.

The category of co-operative associations for provision of earnings and productive co-operatives in the Czech Republic also includes many agricultural co-ops where members (both owners and non-owners of land) farm still associated or rented land together, either as successors of transformed socialistic agricultural cooperatives (in Czech abbreviated as JZD) or as associations at privatized land of former State farms. In the totalitarian period, most of "JZDs" also included so-called "subsidiary production" (repairs and manufacture of agricultural machines, building, carpentry, joinery, smithying, and lock-smithying, accommodation and boarding services, and so on). Some of the current agricultural co-ops continue this subsidiary production "to provide earnings". In areas with high unemployment, this brings more opportunities for members to earn their living till now. This is probably what makes Czech agricultural co-ops different from farmers' co-ops in Western Europe where land is usually not associated and the reason for being in the co-operative lies rather in market competitiveness. Although they are very close to co-operative associations for provision of earnings, Czech agricultural co-operatives have not been included in the table below.

The following table presents the portfolio of activities of Czech co-operative associations for provision of earnings productive co-ops today. The co-operatives named in the table are rather successful in the market or react to current challenges (employment issues).

Table Czech workers' and productive co-operatives in 2010Basic line of business, profession (number of co-ops) Examples of successful and otherwiseinteresting co-ops (incl. year of foundation)

Metal working and machinery, manufacture and repairs of electrical appliances, instruments and devices, and precision mechanics. Medal makers, cutlers, gunsmiths, watchmakers (48). Car repairs and sales, measuring emissions, manufacture of car parts, etc. (17). DUP drustvo Pelhimov (including Pelhimov brewery), 1945; Lovna - drustvo, Praha, 1920.

Computer technology, measuring and imaging systems (3). Tetronik vrobn drustvo, Terezn, 1990;

Clothes and other textile production, footwear, haberdashery, hat making, leather and fur products, folk handicraft, folk costumes, toys (36). Vvoj odvn drustvo vTeti, (sewing professional uniforms for firemen, army, police, huntsmen, etc.),1931; Znovoz sociln drustvo, Znojmo, 2006.

Upholstery and furniture manufacturing, wood working and joinery, carpentry (21). Goldsmithying and jewellery, artists (4).Bookbindery, printing, publishing houses, publishing activities, optics and photography services (9).Barbers and hairdressers (5). Pharmacists (1). Grant, drustvo umleck vroby, Turnov (incl. stone quarrying), 1945; Do & Do Orlov, drustvo umlc, 2004 (arts). FONTES RERUM, drustvo pro ekonomick, politick a sociln studia, Praha, (economic, political and social studies) 2002; Kulturn noviny - vydavatelsk a mediln drustvo, Brno, (publishing and media) 2009. Drustvo lkren, Jihlava, (pharmacies) 2002.

Chemical products, cosmetics (7); plastics, rubber, plastic moulding (9); glaziers and glass processing (1); technical ceramics and earthenware, stone quarrying and stone cutting (5). Sociln drustvo BENNA r nad Szavou, 2007.

Building and plumbing, transport, metal structures, decorators and painters, designing and engineering, turnkey buildings (14). D R I S Drustvo inenrskch slueb, Nov Bor, (engineering) 1989; Profesmont drustvo, Bruntl, 2008.

Wine cellars incl. distribution (1), food production (1). Templsk sklepy ejkovice vinask drustvo, (wine cellars) 1992; OKO Klasik drustvo, esk Tebov, 1997.

Other services: security, cleaning, property management, rental services, real estate agencies, counselling, accounting, publishing (12). Miscellaneous products and services, inc. assembling, small jobs, as well as high qualified jobs (20)Car camping site (1); ski resort (1).Purchase and sale of recycled materials (1).

AIM.CZ drustvo, Ostrava, 2003; Andlka sociln drustvo, Troubsko, 2008; AKSTA drustvo, Brno, 2009; Devotvar.com drustvo, Hradec Krlov, 2005 Podan ruce sociln drustvo, Zub, 2008; Senza drustvo CHD, Prostjov, 2000; Autocamping Beclav, drustvo, 1993 SKI Pnkav vrch, drustvo, Hradec Krlov, 2008.

Source: author's review based on websites of the Union of Czech and Moravian Production Cooperatives (www.scmvd,cz) and selected co-operatives that are not members of the Union, especially, (http://www.firmy.cz/detail/599262-druzstvo-lekaren-ostrava-moravska-ostrava.html; http://www.fontes-rerum.cz/; http://www.kulturni-noviny.cz/; (Visited on 28 February 2010)

2. Cooperatives history in the light of cooperative principles, value and terminology:

The Statement on the Co-operative Identity, declared in 1995 by the International Co-operative Alliance (ICA), defines and guides co-operatives worldwide. It contains the definition of a co-operative as a special form of organization, the values of co-operatives, and the currently accepted cooperative principles that direct their behaviour and operation. The purpose of autonomous association of persons united voluntarily is to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise and its assets. It seems to be clear and understandable, as well for us.

Some problem would appears by comparative historical or contemporary studies in area of old/new or Czech/English/German terminology[footnoteRef:3]. Some notes on this we can see below: [3: British workers and customers cooperative - versus productive, agricultural, consumer, housing coops, and credit unions in the |Check Republic and in Germany, for example]

Terminology of co-operatives can vary time to time and country to country; it depend on the legal conditions, practices, and historical background. Essay on typology of co-operatives based on purpose of members union as workers and small producers ownership:

W o r k e r s' co-operative: The purpose of autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly-owned and democratically-controlled enterprise as assets owned by united workers or small producers (to provide members live through their wages and earnings). Historically, we can know such type of co-operatives as Erwerbsgenossenschaft on German language, and vdlkov on Czech language, for example. Activity of association of workers, craftsmen and small producers is based on associated work or on production of goods and services applied usually at the market, in its specific not-for-profit regime. Recently, based on their productive activity, we usually know such co-operatives as productive / production, agricultural, fishers cooperative, etc.

C u s t o m e r s co-operativeThe purpose of autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise as assets owned and operated by united customers. Historically, we can know such type of co-operatives as Produktivegenossenschaften on German language, and hospodsk on Czech language, for example.Based on varies economic activities, members economic and social benefits are usually distributed among them outside of the market as consumption of product and services produced by co-operative enterprises, basically. Recently, based on characteristics of members needs and benefits, we usually know such co-operatives as housing, consumers, credit, insurance, transport co-operative, etc.

Note: There are some historical terms as follows: a) Produktivegenossenschaft (the co-operative is characterised by its economic activities). It would be probably customers' cooperative in the sense of British co-operatives terminology, see below, or the hospodsk spoleenstvo (drustvo) in the sense of an old time (Austrian) Acts/Codes terminology.

b) Erwerbsgenossenschaft (the co-operative is characterised by its purpose which is to make save wage, employment, competitiveness or livelihoods"). It would be workers' co-operative in the sense of the term of British co-operatives terminology, or the vdlkov spoleenstvo (drustvo) is understand as a co-op of "employees or workers or craftsmen etc.) in the sense of an old time (Austrian) Acts/Codes terminology.

Two types of co-operatives within their purpose and the activity The purpose of autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise Erwerbsgenossenschaft W o r k e r s' ( or q u a s i - w o r k e r s' ) co-operativeVdlkov drustvoProductivegenossenschaften C u st o m e r s co-operativeHospodsk drustvoThe activity (conveyor?) how to attain the purpose of establishment of that type of co-operatives P r o d u c t i o n co-operativeAgricultural co-operative (when the fields etc. are united for united work on)Consumer co-operatives,Housing co-operativesCredits (Saving and Loan cooperatives)Co-operatives in agriculture (services for farmers )

There are three sources of the co-operatives "title":(a) An old time (Austrian) Acts/Codes terminology, there are co-operatives: Witch activities are based on production with purpose of economic, social or cultural utility of members, it is productive co-operative = hospodsk drustvo like customers' cooperativeWhich activities are based on labour and cooperation to save the employment and livelihood of members (their SMEs competitiveness on market included) = vdlkov drustvo like workers' co-operative(b) British terminology within recent Co-operatives Alliance ... there are co-operatives: Customers' co-operatives (with purpose of economic, social or cultural utility of members), and Workers' co-operatives" (to save the employment and livelihood of members)(c) Recently used category of co-operatives which are based on productive activities (and used within central planned economy, and in the East Block as well in the DDR before twenty years, and in the Czech Lands till today: Production or producer co-operative = vrobn drustvo (by terminology of the Czech Co-ops Unions recently, differ to agricultural, housing, customer, and loan and saving co-ops). It seems, the terminology was installed here during The Second World War (as the old Austrian Act from 1870 didnt know this term yet).It means, it is serious problem to speak about productive or producers' or producing or production or producer co-operative. Nearly same name is very hard to interpret within the different meaning due to historical and geographical diversity.

Based on terminology described above, we can understand workers co-operatives as productive / production co-operatives legitimately. The Statement on the Co-operative Identity, declared in 1995 by the International Co-operative Alliance (ICA), defines and guides co-operatives worldwide. It contains the definition of a co-operative as a special form of organization, the values of co-operatives, and the currently accepted cooperative principles that direct their behaviour and operation. The purpose of autonomous association of persons united voluntarily is to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise and its assets. Terminology of co-operatives can vary time to time and country to country; it depend on the legal conditions, practices, and historical background.

Recently new term of social cooperative appears. It means cooperative which exceed his mutuality into the services for third persons outside of cooperative. Firstly Italian law 1990 recognize two types of social cooperative: (1) Cooperatives for association of immigrant persons into Italian society 2) Cooperatives producing social services which are produced by market or public bodies not enough in quantity, quality or range of products In the Czech Republic after 2007, there social cooperative is understand as a cooperative being established for disabled people employment or for personal social services given by or for disabled people.

Though legal body would be a member of cooperative legally, Czech cooperatives usually are not established by municipality, and the municipality is a member of cooperative only seldom (some housing coop namely). We can supply, some Czech agricultural cooperative based on land historically owned by municipality was appear in southern Moravia after 1948 when associated landless persons.

By Wikipedia, we can once more precise the worker cooperative which is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every owner-worker participates in decision-making in a democratic fashion, or it may refer to one in which managers and administration is elected by every worker-owner, and finally it can refer to a situation in which managers are considered, and treated as, workers of the firm. In "pure" forms of worker co-operative, all shares are held by the workforce with no outside or consumer owners, and each member has one voting share. In practice, control by worker-owners may be exercised through individual, collective or majority ownership by the workforce, or the retention of individual, collective or majority voting rights (exercised on a one-member one-vote basis)[1]. A worker cooperative, therefore, has the characteristic that the majority of its workforce own shares, and the majority of shares are owned by the workforce. This type of cooperative would operate as social cooperative.

By Torsten LORENZ, the cooperatives in Central and Eastern Europe and their role in the formation of national communities 18501940. An attempt of periodization.During their less than a hundred-year existence from their emergence to the outbreak of the Second World War the cooperatives experienced a rapid development. From the scattered isolated philanthropic associations of the 1850s and 1860s they evolved into a broad social movement to become an important player in the market. The cooperative principle was adjusted to different general conditions and needs, and thus a variety of its functions developed. Its success, however, required the basic economic rules to be considered. Where cooperatives ignored them, they failed. The history of modern cooperative movement in Central and Eastern Europe was thus closely connected with that of nationalism. Consequently, most of the first cooperative leaders were leading personalities of the national movement. They viewed cooperatives not only as tools to foster the economic development, but also to develop national emancipation. These members of intelligentsia and bourgeoisie were responsible for the cooperative movement being based on the principles of national separation. While at the initial stage of national movement the economic development was of secondary importance compared to the cultural requirements, the situation changed when cooperatives had become a mass movement. The cooperatives put their communication networks at the disposal of the national movement, or they were established in places where an initial cultural institution was already available. Thus, they constituted a support for national movements and contributed to the struggles shifting from the national area to the economic one. The national role of cooperatives did not change after World War I, and they continued playing a similar important role for the new minorities as they had played for the nationalities without a state of their own. However, the large shift to the authoritarian forms of political administration and to state interventionism, via a stage of mutual symbiosis, finally made the cooperatives subordinated to state control. This evolution anticipated the loss of power and importance of independent cooperatives in socialism.Keywords: History, 19th and 20th century, Central and Eastern Europe, economy, nationalism, cooperative movement

Conclusion:Czech cooperative history is rich. To understand the Czech coops history and today, we need to understand cooperative principles and values, and the terminology as well.

Literature: Hunov M.: Success Factors of Czech Producer and Workers Cooperatives. In Alls: Le Grande Magasin. Kulturamt Neuklln, 2010; HUNOV, M.: Drustva a jejich role v trn ekonomice. st nad Labem: AUP UJEP, 2006 HUNOV, M.: Social economy and social enterprise development in the Czech Republic. In: Social economy, 2004; www.dacr.cz www.ica.coop/coop/principles.html www.scmvd.cz/

Pro Grant V-4 Magdalena Hunov, v st nad Labem, dne 31. 12. 2013