In spite of these shortcomings, it must be said that, in the absence of the joint – stock principle. industrial development and efficient exploitation of the natural resources of a country would not have been possible. It has proved to be a powerful and an efficient engine of economic growth.
As distinguished from the ordinary capitalist enterprise. there is the co-operative enterprise. The workers are painfully were of the fact that the entrepreneur takes away the lion’s share of profits. Being convinced that they could themselves run the industry without the aid of the entrepreneur, the workers decide to take up the entrepreneurial work upon themselves. They contribute some capital themselves and borrow the rest; they elect their own foremen and managers and employ some staff. After paying all expenses, interest on capital, salaries and wages, the profits are divided among themselves. This type of co-operation is called the Productive Co-operation or Producers’ Co- operation.
Producers’ Co-operation has been generally a failure. The reasons are nor far to seek. With the disappearance of the entrepreneur profits also disappear. It is his initiative. power of direction and organizing ability which produce profits. The workers are not in a mood to pay ell their managers. The elected foremen are not able to enforce discipline over their own people. Everybody’s business is nobody’s business. Little wonder that there are no profits.
There is another type of co-operation which has a long record of success. It is Consumers’ Cooperation. The arrangement is that the consumers of a locality contribute capital in small shares and start store of their own. The co-operative store buys goods from wholesalers like other dealers. and sells these goods to their members at the ordinary market rates. Profits are distributed among the members in proportion to their purchases or, what is more common. in proportion to the share capital. Generally. share capital is equally contributed and profits are. therefore, also equally divided among members.
The co-operative movement has proved specially suited to agricultural and allied occupations. It was successfully applied first in Germany and Denmark. and it has now spread to almost every country. In India. Co-operative Departments are functioning in every State. Mostly these are agricultural credit societies but non-credit and non-agricultural societies are also being established. Special attention is being paid to the establishment of co-operas farms and service co-operatives under the Five-Year Plans.