The Solidarity Economy: Nonprofits and the Making of Neoliberalism after Empire
Tehila Sasson
Princeton University Press, $39.95 (cloth)
The fight against global poverty was once all the rage. From the 1950s to the 1980s, when the Global South’s exploding populations desperately searched for jobs and food, everybody seemed to look for a solution: UN officials gathered emergency conferences, aid groups stepped up their work, and rockstars even organized charity festivals.
Among the most ambitious actors in this universe were British nonprofits. Led by left-leaning scholars and activists, aid organizations like Oxfam and War on Want declared that Europeans had a historical mission: to bring about global equality. In their telling, the famines and destitution that plagued countries in Asia, Africa, and Latin America were the legacies of imperialism. Britain, and the West more broadly, were therefore morally obligated to help their former colonies to gain economic independence. The way to do so, however, was not through reparations, state-led programs, or radical restructuring of global trade, as the leaders of postcolonial countries demanded. It was rather through educating British consumers to make ethical choices—say, buying food from poor countries (sugar from Barbados instead of from France), even if doing so was more expensive. Consumption loomed so large in the minds of such activists that they also promised it could achieve ecological sustainability. They heavily advertised slogans like “Meatless Sunday” or “Clean Your Plate!” which targeted housewives and children with injunctions to consume the “right” food and to reduce waste.
In the long run, such campaigns did precious little to reduce paucity: from Bangladesh to the Congo, dozens of millions still suffer from scarcity and hunger. It’s tempting, then, to dismiss these efforts as insignificant. But in her provocative recent book, The Solidarity Economy, historian Tehila Sasson explains that we shouldn’t: these were crucial engines for normalizing neoliberalism on the left. In Sasson’s telling, the anti-statist effort to substitute politics with individualized consumption was not simply a right-wing project. It also emerged in progressive circles, among thinkers and activists who hoped to promote economic equality and justice. Unlike their conservative counterparts, these left-leaning figures were guided by a deep sense of solidarity with the disadvantaged. At first, they hoped to strengthen civil bonds among workers in Britain; later, with the aid of huge nonprofits, they aimed to overcome colonialism’s legacies by fostering growth and empowering poor communities in the Global South. But the tools these reformers developed—such as fair-trade campaigns or microfinancing—were not merely ineffective. In their narrow and misguided equation of solidarity with voluntarism, they helped popularize the market’s destructive logic among left-leaning circles.
This is a profoundly original story, and a moving one at that. At its center is a moral ambiguity: well-intentioned people helped reinforce catastrophic economic inequalities. Yet one question Sasson’s study leaves hanging is whether the reformers’ allergy to state institutions and international treaties was the only or principal source of their failure. What they also ignored was that changing patterns of inequality required a very different kind of solidarity than the one they had in mind.
When scholars tell the history of neoliberalism, they usually look to the right. Conservative think tanks, reactionary politicians, or charismatic entrepreneurs: these are the monsters that brought the market’s obsession with competition to all spheres of life. By contrast, The Solidarity Economy traces the emergence of neoliberal thought to a surprising place: the universe of left-leaning reformers in postwar Britain, well before the neoliberal revolution under Margaret Thatcher. The backdrop for their work was the massive expansion in state-led welfare following World War II. Under the Labour Party’s rule, this was the heyday of high taxes, centralized planning, and unprecedented new public benefits. But amid this social-democratic revolution, multiple Labour-affiliated thinkers and activists wondered if economic justice could instead be achieved through local, decentralized, and small-scale structures. What was needed, they claimed, were not just new programs but a new kind of ethics. Initially, the theories they crafted focused on the domestic sphere, trying to find new ways to ease the persistent tensions between Britain’s middle and working classes. Within a few years, however, reformers set their eyes on global affairs, claiming that non-state mechanisms would bring universal prosperity.
The person who more than anyone articulated the reformists’ new fantasy of a tension-free society was economist Ernst Friedrich Schumacher. An immigrant from Germany to Britain, Schumacher was initially an ardent believer in state-run welfare. As a young protégé of John Maynard Keynes, he helped draft the famous Beveridge Report (1942), the blueprint for postwar reforms like the nationalization of health care. Yet as time passed, Schumacher became disillusioned with large-scale programs and centralized planning. In his mind, socialists’ obsession with increasing production and growing incomes mostly duplicated capitalism: like the large factory, the welfare state ran through faceless bureaucracies and alienated people from their work. Schumacher argued that a just economic system had to foster a deep sense of community. Instead of nationalizing industries, socialists had to strengthen local businesses and community initiatives. In turn, he argued, this approach would empower individuals, releasing them from dependency on distant employers and bureaucrats and imbuing them with self-worth. Schumacher went so far as to claim that a mindful economic exchange could become the basis for spiritual rejuvenation. As he mused, the goal was to practice “economics as if people mattered.”
As idiosyncratic as Schumacher’s ideas may have been, they slowly gained traction in progressive circles in the 1950s. Especially after Labour suffered repeated electoral defeats, multiple reformers claimed that the party’s focus on national programs and class conflict had to be replaced with something more personal and conciliatory. The scholar and policymaker Michael Young, for example, wrote in 1952 that economic justice could only emerge from “a sense of solidarity, of oneness, of belonging together.” One way to achieve this, he argued, was to focus on consumption: by buying the products of local firms and patronizing businesses that treated their workers well (instead of chain stores), people could spend communities into cohesion.
To many, ethical consumption also seemed like a way to empower Britain’s Afro-Caribbean communities, which grew considerably during the era of decolonization but which suffered from state-led racial discrimination (most migrants were excluded from public housing, for example). Richard Titmuss, who helped establish social policy as an academic field, was hopeful that campaigns to encourage shopping in migrants’ businesses could provide minorities independence from the state’s racism. Such progressive reformers worried that state welfare, while effective in reducing some inequalities, could not mitigate people’s sense that they lived in an atomized society, economically at the mercy of anonymous forces. Perhaps buying from, or investing in, local businesses could rebuild their sense of community and autonomy. Schumacher and others never quite explained why it was consumption and investment, and not protest or struggle against employers, that had to be the basis for this program. In their minds, the left’s options were either bureaucratic welfare or small-scale community building, and the two were inherently in tension with each other.
Despite its fixation on local communities, this vision of economic justice quickly acquired planetary ambitions. Reformers focused in particular on cultivating solidarity with the poor in Asia, Africa, and the Caribbean, where many nations had gained political independence during decolonization but still suffered from persistent poverty and economic dependency on the West. Schumacher and likeminded reformers were deeply anxious that workers in the Global South were experiencing an even more extreme alienation than their counterparts in Europe. To prevent social chaos, they thought, it was imperative that those with means—Europeans—bring stability and prosperity to the postcolonial world. Titmuss in fact insisted that Europeans’ conception of social justice had to include people who were dependent on their conduct, even if they were not members of the same national community. As he put it, “We can no longer consider welfare systems solely within the limited frameworks of the nation state,” because “what we do or fail to do . . . affects other countries.”
As in Britain, however, reformers believed that European solidarity with the Global South should not take place through funding state-led industrialization and development programs, which were in vogue in the postwar decades. They were also skeptical of the New International Economic Order, a set of proposals presented by countries from the Global South at the UN in the 1970s that demanded an overhaul to trade relations. Instead, they envisioned small-scale initiatives led by corporations and consumers. Schumacher, for example, argued that well-intentioned corporate leaders could be convinced, through education, to invest in producers from postcolonial countries. He founded a nonprofit aid agency that encouraged British businesses to provide postcolonial communities with small-scale technology and training to build rural industries. Titmuss had higher hopes for consumers, claiming that Europeans could support postcolonial independence with their wallets: they could buy garments from India, coffee from Kenya, and sugar from Jamaica. Others mused about schemes like “Adopt a Village,” through which European donors could help support a specific community. Together, the reformers hoped, thousands of charities, corporations, and well-meaning individuals would build a vast web of investment.
Like the domestic ideas on which they were based, these visions for the Global South were laced with wishful thinking. These reformers never explained, for example, why Western corporations and consumers, who had long cheered colonial extraction and exploitation, would suddenly change their minds. The colonial baggage on which their plans were built was also considerable. Correcting the Global South’s dependency on European imports was rarely discussed in terms of correcting historical wrongs; it was rather imagined as an act of benevolence and charity. Still, Schumacher and others genuinely believed that only decentralized campaigns and initiatives beyond the state could help communities from postcolonial countries break their reliance on one crop or industry and instead build diverse economies. As Schumacher wrote in his popular Small Is Beautiful (1973), providing poor villages with self-sustaining industries was “perhaps the greatest task in front of modern man,” and one that would provide the basis for international economic solidarity.
Imagining communal bonds is one thing; creating them in the world is quite another. The Solidarity Economy really takes off when it traces how ideas such as Schumacher’s helped legitimize a new form of action for the left. While not all activists and operatives who worked in the new crop of nonprofit organizations read the writings of Schumacher, Titmuss, and other reformers, they all shared the belief that Britain’s mission in a postcolonial world was to bring prosperity to the Global South. And like Schumacher, they introduced a kind of market logic to the left decades before that ideology triumphed politically.
Charities and associations in Britain had long sought to improve the lives of the unfortunate, but their operations reached a new level in the postwar era. Tired of waiting for state-run agencies or labor codes to make a difference, and eager to find a new global mission after empire, a whole phalanx of activists, donors, and scholars flocked to organizations that promised to solve injustices through coordinated individual action. This enthusiasm was manifested in the proliferation of British nonprofits, which exploded in number from 56,000 after World War II to 120,000 in 1975. The scale of these operations also greatly expanded. Organizations like Oxfam, which began as a modest charity in 1942, enjoyed donations from millions who worried about the chaos brought by the Great Depression; in the postwar era, they ballooned into huge operations, employing hundreds and managing vast sums of money. Sasson charts how these nonprofits, whose officials were often well-versed in Schumacher’s writings, labored to make international solidarity through consumption a living reality.
In the process, the organizations also became economic actors in their own right, generating a constant stream of new economic tools. One such innovation was charity shops, which sold donated items to finance international aid. At Oxfam’s first charity shop, which opened in 1948, volunteers worked hard to link consumption with bringing self-sufficiency to poor communities in Asia. “These Soapstone Carvings presentation mugs, spoons and necklaces,” explained one pamphlet, “are equivalent to 10 large fishing nets for one of our fishery programmes in India.” Within a few years, Oxfam operators started selling products made by workers in the Global South themselves, claiming that this would support indigenous traditions. Field agents roamed Asia and Africa in search for what one official called “exotic and attractive” items, especially jewelry and garments. This approach proved enormously popular, especially once specialists from the retail world joined nonprofits and helped make the shops a profitable enterprise. Charity shops mushroomed everywhere, and by 1971 Britain’s cities boasted more than 350 Oxfam stores, surpassing behemoth retailers like Marks & Spencer.
This success helped bolster other experiments that focused on responsible choices. From the 1970s onward, nonprofits such as Christian Aid and War on Want launched public campaigns to encourage ethical food consumption. By flooding buyers with information about labor conditions and ecological sustainability, they hoped to increase the sales of employers in the Global South who paid decent wages in their coffee plantations and protected the soil in their wheat fields. Other initiatives sought to nudge corporations into social responsibility. In what became known as the “social audit,” nonprofits publicized companies that helped support local communities (for example, by training farmers in Nigeria).
One of Sasson’s most important contributions is to show how all these initiatives prospered well before Thatcher’s electoral victories from 1979 onward. Years before British conservatives launched their successful crusades to weaken organized labor, reduce taxes on top earners, slash state regulation, and impose selective austerity, left-leaning figures had already insisted that the solution to global inequality lay in markets, consumption, and investors’ choice. This was in part why the implementation of state-managed neoliberalism in the 1980s only enhanced the growth of these market-driven measures. Buoyed by effective advertising, nonprofits seamlessly ingratiated themselves with the right’s agenda. By 1987, the government introduced direct payroll deduction, which enabled Britons to automatically transfer donations from their paychecks, all while receiving tax relief on their income.
In fact, it was during Thatcher’s time as prime minister that the most ambitious and famous of the nonprofits’ projects in the Global South emerged: microfinancing. During the 1980s, nonprofit operatives joined hands with financiers and promised to build direct links of solidarity between small European investors (usually middle-class individuals) and farmers in Asia and Africa. Through small donations, they provided tiny loans—just enough to purchase a goat for milking or beads for necklaces. By supporting initiatives like the Grameen Bank, whose founder Muhammad Yunus became microfinancing’s poster boy, nonprofits promised to free postcolonial societies from the crushing debt imposed on them by Western banks. Microfinancing was especially appealing for its ethos of self-sufficiency. Rather than working for low wages under employers, Asians and Africans could gain economic independence themselves through hard work.
Ultimately, postwar reformers’ ideas became mainstream for the Labour party. After a series of devastating electoral defeats, they followed Schumacher’s steps by ditching state welfare and replacing it with market logic and small-scale investments as the path to solidarity and prosperity. Among the first was London’s mayor, Ken Livingstone. In the 1980s, he hosted conferences on corporate social responsibility in Asia, claiming that ethical investment was the way to right colonialism’s wrongs. Once Tony Blair and New Labour came to power in the 1990s, the techniques initiated by nonprofits abroad helped alter the British state. The most prominent of those was microfinancing: instead of expanding jobs in the public sector, Labour operatives initiated loan programs and financed small-scale businesses. Perhaps because many of the people who ran these programs were veterans of the nonprofit sector, their loans especially targeted ethnic minorities. Like their counterparts in Asia and Africa, so the logic went, they were to overcome economic disadvantages by becoming entrepreneurs.
Even by their own measures, almost all these small-scale measures were a resounding failure. No matter how much money donors and consumers poured into their coffers, nonprofits hardly made a dent in inequality and poverty—both within Britain and globally.
The most depressing example was microfinancing, which actually worsened borrowers’ lives by trapping them in a cycle of debt. In India, as several scholars have noted, huge numbers of farmers and small producers were never able to repay their loans, and were pushed into despair and suicide. In fact, the programs of nonprofits sometimes deepened international dependency, as local communities moved to produce the “authentic” jewelry and garments ordered by charity shops. As The Solidarity Economy explains, Oxfam and others may have dreamed of global equality, but their vision “nevertheless, inadvertently, cemented a global division of labor between the West (as the consumers) and the ‘the rest’ (as producers) in the global economy.” In the end, little was left of the hopes for economic self-reliance and independence. The freedom offered by consumers and markets, it turned out, is unforgiving.
For Sasson, this story casts a harsh light on efforts to forge ethical capitalism without state intervention. She draws on cultural critic Stuart Hall, who already in 1966 condemned Oxfam’s international charity drives as a futile project of “de-politicization”—an effort to address the political problem of global inequality as if it were a humanitarian challenge like earthquakes. Even more broadly, this historical record raises doubts about the focus on individualized actions. Adopting a village may be kind, but it doesn’t improve much beyond the donor’s mood. To be sure, Sasson takes her protagonists seriously, portraying them as thoughtful people. The problems they sought to solve were real, and the solutions they offered well-intentioned. In the end, however, their projects were mostly a distraction from the reality that only states and international trade agreements can overcome global poverty and inequality. What is needed are fewer fundraisers with Bono and more state-led investment in infrastructure, education, and welfare.
All of this is true enough. But there’s another reason—which Sasson never quite discusses—that Schumacher and his fans in the nonprofit world did so little to reduce global inequalities: unlike more militant theorists and writers, they failed to recognize that solidarity was rarely politically successful when it was pitched as a benevolent act to avoid friction. On the contrary, its greatest triumphs have come when it was antagonistic, forging ties between groups and people against mutual enemies.
This was certainly the record of economic solidarity in Europe. When philanthropists, municipalities, and states began to offer public housing or labor codes in the nineteenth century, they rarely did so out of ethical considerations. They mostly sought to draw workers away from more radical alternatives like socialism or anarchism, which proclaimed solidarity in a struggle to demolish social hierarchies and upend existing power structures. This was in part why the welfare state witnessed its most radical expansion at the beginning of the Cold War. The propertied classes and business elites accepted high taxation and some nationalization of industries not because they felt indebted to the unfortunate but because they were anxious to lure the masses away from communism. Even conservatives, who were hostile to state welfare, were forced to accept it as a fact of life in the 1950s and 1960s. In Britain, they kept it intact even when they returned to power; in places like West Germany and Italy, they actively expanded it.
The point is that the consumer-based vision for global economics was undermined not just by its insistence on markets and suspicion of state intervention, though these played their role. Equally important was reformers’ flawed theory of change, which could never meet the scale of its ambitions. The kind of sums needed to make a real difference were going to require a different form of solidarity: not between producers and consumers across continents, but between workers united in mutual antagonism toward their employers. Sasson’s book does not explore what a vision grounded in this kind of solidarity would look like, but how to forge it is a problem that continues to weigh today on all those who still advocate for global debt relief, reparations, or large-scale redistribution. It is a dilemma for which our predecessors offer very little guidance.
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