The History of Credit Cooperatives in Germany

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Jose Alejandro Gomez History of Finance The history of the financial cooperative: The German credit union as a quintessential social innovation and the origin of modern collaborative consumption. In light of the prolonged malaise of the global market driven capitalist system there appears to be a rising intellectual interest, public concern or in some cases political push for a more ethical economic order that prizes greater levels of equity, equality and social purpose to be incorporated into the political economy of nations, the business models of corporations and the organization and management of economic institutions within the framework of free market enterprise. Beyond being just the subject of intellectual fodder, these concerns are shaping a generation of ethically aware and communally oriented consumers that are empowering the rise of businesses with a social value proposition those in favor of this shift see a potential emergence of an era of socially driven innovation as a way out of the present productivity stagnation it is easy however to dismiss this movement as a passing trend due to the present disaffection with the economic climate only time and the market will tell if the communal social economy encapsulated in disruptive businesses like AirBnB, innovative financial mechanisms like crowd funding and promising new corporate structures like the social enterprise prove a cursory fad within the process of capitalisms insatiable creative destruction or emerge as a the dominant political economic paradigm. The present growth of communal consumption trends and the future potential of a social economy are conceptually in collective debt to an innovation that arose in the German financial system predating social media by almost two centuries, the credit cooperative or credit union emerged in the mid-19th century as a perfectly tailored response to the era’s economic transition in particular the shocks this had on the asset less sectors unable to gain


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