Research Article

Producer co-operatives of the Knights of Labor: seeking worker independence

Published: 2022-5-4

Journal: Labor History

DOI: 10.1080/0023656x.2022.2109009

Abstract

ABSTRACT Currently, there is renewed interest in organizations providing greater economic benefits to its members given the widening divide among social classes. A major source of alternatives to capitalist organizations in the U.S. was the co-operative movement sponsored by the Knights of Labor during 1870–1889. This study examines cases of the Knights’ producer cooperatives to understand how they functioned and why they failed. The intent of the co-operatives was to restore worker independence and control over their work in the emerging factory system. This study applies core frames of social movements to examine the motivation and processes the Knights used to establish their cooperatives. Micro histories of selected co-ops in three regions of the U.S. were developed from primary research conducted during the 1880s as well as contemporary journals and newspapers. Rather than being radical, the co-operatives were based on American republican ideals, and they borrowed governance structures similar to corporations, both of which contributed to their success. Reasons for the failure of the Knights and their co-ops are examined. The legacy of the Knights’ producer co-ops is discussed along with ideas for future research. KEYWORDS: Co-operatives, Knights of Labor, labor republicanism, micro histories, social movement analysis. Disclosure statement No potential conflict of interest was reported by the author(s). Correction Statement This article has been corrected with minor changes. These changes do not impact the academic content of the article. Notes 1. The nineteenth century hyphenated spelling of ‘co-operative’ is used throughout the paper. 2. Early non-labor co-operatives included communities of Robert Owen’s co-operative community in the 1820s and Charles Fourier’s Associationists in the 1840s; see, Wright (Citation2010). 3. The Knights backed Greenback Party sought monetary reform during a recession, but it faded with an upturn in the economy in 1879–82, see Curl (2012, pp. 89–90). 4. In the 1880s John Bates Clark, an economist at Johns Hopkins University in Baltimore was interested in the growth of organizations using employee ownership and profit sharing. He divided up the country into five regions and assigned a doctoral student to study the development of these firms in each region. The five researchers (i.e. Edward Bemis, Albert Shaw, Amos Warner, Howard Shinn, and Daniel Randall) conducted onsite visits and interviews with many co-ops in their assigned regions. These studies formed the basis of their dissertations and were eventually published as the History of Co-operation in the United States (1888) which represented Vol. VI in the Johns Hopkins Studies in Historical and Political Science edited by Herbert B. Adams. 5. According to Curl (2012, pp. 88–91), by 1872 two-thirds of the employed were estimated to be wage earners. 6. For example, both the National Labor Union and the International Working People’s Association referred to or quoted the Declaration of Independence (Powderly, Citation1889, pp. 81–82). 7. The KoL’s first assemblies included sojourners, shipwrights, weavers, and riggers. 8. The great upheaval that resulted in over 100 strikers killed, over 500 wounded and more than 1000 jailed. Hayes use of troops to quell labor unrest was the first such presidential action in the U.S. 9. Powderly had been elected mayor of Scranton, PA, a mining and railroad center, under the Greenback Labor Party; once the party failed, Powderly became disillusioned with a political solution (Dubofsky & McCartin, 2017). 10. Prior to his KoL work, Sharpe had founded a co-operative community in Missouri and in 1884 became the editor of the Co-operative section of the Journal of United Labor. 11. Another poll taken at the General Assembly in 1884 revealed that only 14 members were in favor of a compulsory fee or tax to fund co-ops; thereafter it was left up to local assemblies. 12. In the face of bad harvests and depression, the French King was overthrown, and the Second Republic was established under Louis Napoleon III after a brief worker rebellion in Paris. It established the right to work among other things in France (see Agulhon, Citation1983). 13. Corporations had boards made up of both managers and outside members. The board hired the president who in turn hired other top managers who need not come from within the firm; it was not democratic like the co-ops. Furthermore, shares were sold to outsiders, and votes were based on shares held. Reports to shareholders were provided from one to four times a year. For more on corporate governance of the period see, see for example, Hilt (Citation2015). 14. Massachusetts co-op laws were amended in 1870 and 1879. 15. This proportional share of profits was modeled after the Rochdale distributive co-ops who distributed profits based on value of members’ purchases. This became a common practice in many KoL producer co-ops. 16. In 1869, forty-five artisan coopers were able to make all the oak and elm barrels needed by the flour mills. By the 1870s, the mills produced 10–20 long rail trains of product every 24 hours, hence, the growth in cooper co-ops. 17. The article went onto say that co-ops were most successful in New York, the West, and the South but not in New England. 18. During the final decade of the century, the Sherman Act was used to break at least a dozen unions, but not once to break a corporate trust. 19. The use of federally protected Employee Stock Ownership Plans (ESOPs) developed as part of the Employment Security Act (ERISA) of 1974 made union buyouts feasible, see for example, ‘New York Times’ (Citation2003). Additional information Notes on contributors Richard C. Hoffman Richard C. Hoffman (Ph.D. Indiana) is Professor Emeritus of Management in the Perdue School of Business at Salisbury University. His research on business and management history have appeared in Journal of Management History, Labor History, Management and Organizational History as well as over sixty business publications. He has been a Fulbright Scholar, served as Interim Dean, was twice named a distinguished professor as well as being the recipient of the business alumni faculty award.

Faculty Members

  • Richard C. Hoffman - Perdue School of Business, Salisbury University, Salisbury, MD, USA

Themes

  • Economic empowerment of workers
  • Historical analysis of cooperative movements
  • Legacy of the Knights of Labor
  • American republican ideals in cooperative governance
  • Social movement theory
  • Successes and failures of labor cooperatives
  • Social inequality and class divide
  • Labor organization and worker independence

Categories

Download Article