The Cooperative Question, Then and Now

by Soumyadeep Guha The idea of the “cooperative” is making a comeback. The Scottish Parliament has recently passed the Community Wealth Building Bill, which aims to ensure that local businesses, including cooperatives, prioritize local needs and that distant shareholders do not extract the wealth generated within the community. In Spain, a 2026 report titled Two Promises to Those Who Work: Voice and Ownership, published by a government-mandated expert committee, argues for the centrality of workers’ voices and ownership in addressing economic inequality. Furthermore, in Kerala, India, communist-led governments in recent years have actively shaped a network of cooperatives to empower workers and finance local agriculture. The cooperative has seemingly re-emerged in the wake of a global discourse that now seeks to come more fully to terms with how private finance is primarily oriented around usurping profit in the form of interest, rather than investing in the forms of production that make life sustainable and dignified for all. At a time of increasing wealth inequality, collective ownership is now once again being imagined as an emancipatory alternative. What is interesting in these contemporary returns to the “cooperative” is not simply the institutional form of collective ownership itself, but the language through which it becomes intelligible in the neoliberal present. This language has a deep history. Present-day arguments for cooperatives, and against usurious private bankers, often rest on the moral claim that labor must receive its due share of the wealth it creates. In this view, the problem is not necessarily a dependence on the market or the division of labor as such, but the unfair expropriation of labor within these relations. A similar argument animated nineteenth-century political economic thought. The cooperative surfaced within these historical debates as a way of reorganizing economic life around community, dignity, and democratic participation, but within a society in which the market had become the dominant mechanism of social reproduction. For instance, in colonial India, the worker produced steel in the factory but depended on the peasant for food. The peasant produced jute for the market and expected monetary returns with which to buy rice. A new relation of interdependence had thus been formed, resting on a historically unprecedented division of labor and increasingly mediated by money, debt, and commodities. Older forms of customary obligation did not simply disappear, but they were displaced and destabilized by market dependence. The argument for cooperatives, as pioneered by the likes of Robert Owen, therefore rested on two related claims. First, labor was the only true productive force, and its private appropriation was morally suspect. Second, as older forms of customary interdependence seemed to collapse, the cooperative promised to create a new and just form of interdependence within a world increasingly organized by markets. One genealogy of this idea of the cooperative or cooperative society can be found amid the formation of a “global countryside,” which linked rural areas in colonial India, Ireland, and other such regions around the world through trade. In this context, the cooperative in India emerged as a viable response to a crisis of debt, market dependence, and agrarian upheavals, and not simply as a vestigial expression of an already existing village communitarianism. In turn, “the cooperative question” is not merely about how ideas of the cooperative traveled across different contexts, as, say, a global history of the circulation of ideas might initially suggest. Instead, it’s critical to examine what made the idea historically plausible in the first place. What allowed distant societies, such as the countryside in India, Ireland, Egypt, France, and Germany, to appear comparable to one another and conceptually linked by a common and translatable vocabulary of usury, thrift, and rural reconstruction? *** At the turn of the twentieth century, the colonial state framed the problem of agrarian distress in India as a moral problem of usury. The mahajan came to embody this crisis. The term referred to a heterogeneous collection that included caste-based trading groups, mercantile intermediaries, landlords, richer peasants, and local bankers. In colonial agrarian discourse, these differences were often collapsed into a single figure of the usurious native moneylender, linked to broader anxieties among the administration about indebtedness, land alienation, and the fragmentation of smallholdings in regions like jute-growing eastern India. This figure of the mahajan became particularly powerful because it condensed a wider set of transformations that could not be contained within the village, even when they appeared most immediately as relations confined to the village boundaries. The Indian countryside was never isolated from commerce. However, by the late nineteenth century, the countryside was being reorganized through new circuits of money, grain, export crops, railway networks, and imperial trade. For example, peasants in the Bengal province of India, who had long participated in global markets, became increasingly dependent on imported food for their own subsistence. Sir George Campbell, writing in 1874 on the question of prohibiting the export of food during famine, observed that while large quantities of rice left Calcutta for consumption in indentured colonies, rice from Burma was simultaneously imported and routed through the expanding railway network to districts facing subsistence pressure. This was not simply commercialization in the narrow sense. It was a reconstitution of rural life, in which food, land, debt, and labor were increasingly mediated by forms of exchange that exceeded the village and its moral boundaries, while remaking the village from within. This restructuring unfolded alongside recurrent famines, the devaluation of silver-backed Indian currency, and episodes of peasant unrest. These developments generated tangible outrage within sections of the colonial state, as well as concerted anxiety about political stability, particularly in the lingering shadow of the 1857 Revolt. In response, the state introduced a series of legislation, including the Deccan Agriculturists’ Relief Act of 1879, the Bengal Tenancy Act of 1885, and the Punjab Alienation of Land Act of 1900. Aside from protecting peasants from exploitation, these laws reclassified agrarian society by distinguishing between productive and unproductive strata. Distinctions arose between the improving cultivator and the parasitic moneylender and the landlord, as well as between the bearer of rights and the agents of usury and excess rent. It is within this broader reclassification of rural society that the mahajan became a figure through whom the crisis of the countryside could be narrated as a failure of moral economy. Introducing the bill to amend the Punjab Alienation of Land Act, Thomas Gordon Walker, a British Indian civil servant, clearly articulated this anxiety about the moneylenders: “There appears to be every probability that unless we interfere, considerable quantities of land would before long pass from the agricultural to the privileged portion of the money-lending class.” Critically, this figure of the mahajan was also made intelligible through comparison. In Ireland, the “gombeen man” came to occupy a similar position in colonial discourse on cooperatives. Like the mahajan, the gombeen man was understood as a loan shark who mediated the peasant’s access to money, goods, and markets. At times, the gombeen man was explicitly described in texts such as The Bengal Co-operative Journal as the “Irish mahajan” (11). This analogy mattered because it rendered distant agrarian societies commensurable. India and Ireland were not the same, nor were their respective histories of landholding, colonial rule, religion, and political mobilization identical. But through a shared language of usury, debt, and rural dependence, the countryside of both regions could be understood as societies in which the peasantry required protection from exploitative credit in a world increasingly structured by capitalist exchange. It was within this context that cooperative societies, whether organized around credit, grain banks, irrigation, and marketing, were advanced as emancipatory projects by the colonial state, anticolonial nationalists, and sometimes the peasants themselves. Moreover, they were not solely envisioned by these historical actors as instruments for channeling capital. Cooperatives also became pedagogical devices designed to reconfigure the conceptual world of the countryside and reinsert solidarity into a world that had supposedly lost the spirit of community. In consequence, peasants were expected to shed habits of concealing wealth, deposit gold and silver for productive purposes, learn thrift, develop habits of trust, and awaken a feeling of solidarity within an exchange society. Tutelage, in these matters, was considered necessary for the making of democratic economic subjects and was supposed to be provided by the colonial state, native elites, and relevant experts in scientific agriculture. These ideas of frugality and transparency also cannot be reduced to colonial racial ideology. Arguments about the “backward” Indian peasant’s supposed extravagance in marriages, funerals, and festivals were often folded into colonial claims about indolence and incapacity. However, similar representations of backward, unintelligible, or economically irrational peasants circulated in Europe as well. The French peasant, the Irish tenant, and the Indian raiyat were all, in different ways, made objects of reform through a language of deficiency. *** Historians such as Meghna Chaudhuri, Iftekhar Iqbal, and Nikolay Kamenov have shown that cooperatives were never benign institutions: they trained peasants into thrift, helped contain radical politics, were often captured by rural elites, and persisted despite repeated failures. This scholarship is useful because it reveals the contradiction at the heart of agrarian capitalism, alongside what has been historically proposed as the answer to this contradiction (i.e., the insertion of morality): the recurring need for cooperation among laborers in a world organized around private appropriation. This contradiction also helps explain why Indian nationalists and anticolonial figures embraced the cooperative. Instrumental reasons, such as the accumulation of capital, aside, the cooperative was a language through which economic freedom could be achieved without rejecting market society altogether. Two such figures—Rabindranath Tagore and Sir Daniel Mackinnon Hamilton—are important here, not because they revived some timeless village ideal, but because they deliberately tried to reconstruct an agrarian community under the conditions of market dependence. Tagore’s Institute of Rural Reconstruction at Sriniketan, later associated with Visva-Bharati University, brought in Leonard Knight Elmhirst, an agricultural economist trained at Cornell University, who worked extensively in Birbhum, present-day West Bengal, to make cooperative societies successful. Hamilton’s experiment in Gosaba in the Sundarbans of the Bengal Delta similarly became a model for the wider cooperative movement in India. In both cases, the village was understood as a site where economic and ethical relations had to be reconstructed. Hamilton’s writings prove especially revealing because they bring together the ideas of Adam Smith, anti-usury critiques, arguments for cooperative banking through a newly created Reserve Bank for India, and an emphasis on the dignity of labor. For instance, Hamilton argued that “if the new Reserve Bank is to serve all India it will find the huge capital required only in the labor fund of Adam Smith—the labor capital of India’s 350 millions.”[1] Such a bank would “monetise the productive labour of all India, whatever its caste or creed,” but it would “not be able to function until the people have been organised co-operatively and made ready to receive the credit money which the bank will then manufacture out of their honest organised labour.” When he invoked Smith, Hamilton saw a way to argue that wealth could not be reduced to money alone. For him, labor was the real source of the necessities and conveniences of life. Hamilton used Smith’s observations on high interest and lending to argue that, in Bengal, unorganized peasants easily fell prey to moneylenders who extracted exorbitant rates. Thus, his proposed solution was this cooperative reserve bank, free from the control of the “hidden hand behind the British Treasury.” Leonard Knight Elmhirst’s intellectual background similarly demonstrates how cooperative thought sat at the convergence of apparently disparate economic and moral currents. For example, Elmhirst was influenced by Sir Horace Plunkett, a Christian Socialist, whose Irish cooperative movement offered one model of rural self-help. Elmhirst also engaged in dialogue with Sam Higginbottom, the American Presbyterian missionary who founded the Allahabad Agricultural Institute and believed that practical work and Christian service should go hand in hand. Elmhirst even followed Rockefeller Foundation-led community development projects in the American South and read Peter Kropotkin’s Fields, Factories, and Workshops (1899). It is no historical accident that Elmhirst made the case for cooperatives, alongside scientific agriculture in eastern India, at the same time that Alexander Chayanov, the Soviet economist, argued for agricultural cooperatives as a way to preserve smallholdings and resist large-scale collectivization. These connections show that the idea of the cooperative became plausible wherever the problem of the smallholder was posed as a problem of debt, knowledge, and social reconstruction. Obviously, German rural credit cooperatives associated with the “Raiffeisen model” remain one major paradigmatic example (although their institutional conditions did not easily travel). The French state became an important supporter of cooperative credit, as the colonial and, later, postcolonial state in India also hoped to become (albeit with different configurations). Egypt also enters into this comparative field. In all these regions, however, it was assumed that the cooperative would free peasants from exploitative debt. This freedom did not necessarily occur. In India, especially after the Great Depression of the 1930s, cooperatives could no longer be sustained as voluntary associations guided by trustees (such as native elites) alone. However, the history of cooperatives’ recurrent failures did not necessarily discredit their value. Rather, the idea of cooperatives became attached to projects of state planning. The state would now actively integrate cooperatives into wider developmental schemes, while learning from distant experiments such as the Jewish cooperative settlements in Palestine.[2] In the words of Jawaharlal Nehru, as cited by Kamenov: “‘My outlook is to convulse India with the Cooperative Movement’” (113). What had begun as a moral and pedagogical project increasingly became part of the planned economy, culminating in the now nationally famous milk cooperative Anand Milk Union Limited (AMUL), which took off in the 1970s and gave the cooperative movement its post-colonial afterlife. *** In Chapter Thirteen of Capital: Volume I (“Co-operation”), Karl Marx describes the historically specific form of cooperation under capitalism as the coming together of multiple workers within a single labor process who sell their labor for a wage. This collective power, however, is appropriated as the property of the capitalist, who figures as the personification of capital. A related problem materialized in the nineteenth-century “global countryside.” Here, the social character of labor—that is, the capacity for labor to earn its subsistence—was not mediated by working under a single factory roof. It was mediated through debt. Jairus Banaji’s reading of Marx helps us understand this history. The small producer neither had to become a wage laborer nor did the labor process have to be technically transformed. When the reproduction of rural life depended on advances and when surplus labor could be claimed in the form of interest, debt became one of the forms through which a dispersed peasant labor force was subordinated to capital. The nature of this debt owed to the usurious moneylender is historically specific, not only in its role in the service of commodity production but also because it was now unrestrained by a withering moral economy that had otherwise previously acted as a mechanism for preventing the excess appropriation of wealth. Thus, the cooperative emerged as an attempt to grapple with the disjunction between the social character of labor under capital’s rule and its private appropriation. It sought to reclaim this historically specific form of cooperation as a principle of organizing production and exchange in the name of justice. It is this same logic that connects the past and present discourse of the cooperative, by showing how a particular form of an emancipatory project has been repeatedly attempted in a capitalist society and has been founded on the need to moralize the productive agents and notions of wealth. [1] Daniel M. Hamilton, The People’s Capital (Gosaba, 24 Parganas: Sir Daniel Hamilton, 1933), 8. [2] Department of Agriculture, Report of the Indian Delegation on Co-operative Farming in Palestine (Delhi, 1946), IOR/V/27/500/39, India Office Records, British Library. Soumyadeep Guha is a PhD candidate in History at the State University of New York, Binghamton. His work focuses on the agrarian history of eastern India, specifically the changing life-worlds of peasants owing to India’s integration into the global countryside since the nineteenth century. His broad research interests are agrarian history, history of capitalism, history of science and technology, global history, and their intersections. Edited by Mayukh Chakrabarty. Featured image: “Village life in Bengal, near Calcutta” (1860s). Samuel Bourne. Edited. Wikimedia Commons (public domain).