This blog is written by Archive Volunteer - Verity Chapman Gibbs

In the quote above, Holyoake sums up the Labour Exchange well; while they were ultimately unsuccessful, the Labour Exchange was vastly significant within the co-operative movement.

Why it began

The National Equitable Labour Exchange was established by Robert Owen in 1832 after a series of grassroots attempts for labour-based currencies in London, Glasgow and Birmingham. Owen believed that the labour notes could provide the answer to contemporary debates about currency reform. He believed that labour should be rewarded as the source of all wealth, rather than traditional currency, which he believed created inequalities and class hierarchy. Unlike today, there was nothing illegal in banks or other organisations printing vouchers.

It was an experimental time-based currency system. The Labour Exchange issued workers with labour notes, which represented the number of hours they had worked removing the need for traditional currency. The Exchange was based on the idea that goods should be bought and sold based on the time it took labourers to produce them.  This meant that co-operative workers could benefit from their craftsmanship and labour and created a fairer way to reward labour.

For Owen and many other co-operators, this concept was part of the co-operative utopian community that they were working to achieve.

Front Page of Owens Journal 'The Crisis' from 1932. Periodical Collections, Co-operative Heritage Trust

Initial Success

The Exchange was initially successful and branches opened in South London and Birmingham. However, the Exchange failed after a few years due to issues and disputes about the way that it should work. One of these disputes was about the place of women in the Exchange.

Women were an important part of the Exchange and they worked largely as needlewomen and shoemakers However, at first women were paid at a lower rate than men. Many women refused to sell their products until they were offered equal pay rate, which was successful, and the Exchange then eventually benefitted women workers as well as male workers.

While the dispute around women’s pay was resolved, other issues were not. Most Owenites were artisans, so the supply of the Exchange was dominated by craft goods at the expense of food produce and other staples, which limited the usefulness of the labour notes. There were also disagreements about the time taken to make products and what the subsequent value of products should be.

Front and back of a labour exchange note from 1933. Co-operative Heritage Trust.

Outcome

It was concluded that the rate of pay would be six pence an hour, however, many were not happy with this and complained about the meagre rate of pay. As well, by the end of 1933, Owen’s focus had shifted to trade unionism, and he lost interest in the Labour Exchanges. This all combined to cause the failure of the labour notes system and after only two years after the Exchange was founded, all branches were closed in 1834.

While the Exchange lasted only a few years, it provided the foundations for some of Owen’s more successful later reforms, including shorter working days, with Owen’s goal of a workday based on the principle of ‘eight hours labour, eight hours recreation, eight hours rest’.

The correspondence of Robert Owen, copies of 'The Crisis' and many other items can be viewed by appointment in the reading room in Manchester. For more information, please look at our website pages on visiting the archive.