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Abstract

This paper focuses on the British state’s attitude towards co-operatives, focusing mainly on the Thatcher (1979–1990) and Cameron (2010–2015) governments. After the 2008 crisis, the Cameron-led government, under the umbrella of its Big Society project, developed measures to shift responsibility on British society for the development of the co-operative model as a contribution to self-help, the pursuit of economic growth and the rebuilding of social bonds. We trace the origins of these efforts to the Thatcher governments, where these attitudes towards workers’ cooperatives were consolidated. In so doing, we find the concept of ordoliberalism rather than neo-liberalism alone, particularly useful for explaining the nuances of the governments’ relationship with the cooperatives; including the symbolic backing of co-operatives for their perfect embodiment of self-help and the entrepreneurial spirit, integrating them into a social policy of total competition and economic growth and the constant legislative and financial control of state support. This exemplified and operationalized a larger governmentality later also pursued by the coalition, aimed at entrenching a competitive order and the bourgeois spirit of self-sufficiency through the deployment of the agenda of popular capitalism. Both the Thatcher and Cameron governments, in the spirit of ordoliberalism, instrumentalized cooperatives as part of a project that sought to govern through society to reshape and depoliticize it. This was an attempt to simultaneously eliminate British society’s political demands while recasting the role that the state is expected to play in social and economic policy.

Keywords

British state co-operatives depoliticization ordoliberalism neoliberalism governmentality

Introduction

Starting in 2008, the Great Recession ripped through the social and economic bedrock of capitalist societies. One of the many consequences of the crisis was widespread industrial failure and concomitant social discontent. This context of industrial collapse, and more largely of the unparalleled crisis of neoliberalism, brought renewed calls to explore different models of ownership, such as employee ownership and co-operatives, hailed for their robust economic performance and their emphasis on worker control and equality (Mulder, 2015; Ranis, 2016; Restakis, 2010; Webb and Novkovic, 2014; Wolff, 2012). Co-operatives, in particular the workers’ type – in which owners, members and workers are one – epitomize economic democracy, and as such have been considered an alternative to capitalism by the left since the Industrial Revolution (Bailey, 1955; Cole, 1944). Present in all sectors, co-operatives redistribute profits to their members, who democratically own the enterprise – each having one vote in decision-making, regardless of their financial contribution. This gives them a number of advantages (such as greater control over one’s work and enterprise) and disadvantages (such as the impossibility to accept equity finance which, by nature, contradicts democratic control of the enterprise). Because of such structural disadvantages, scholars have argued that co-operatives would need multi-faceted state intervention to scale up and one day join the ‘mainstream’ economy (Bennett, 1984; Jefferis and Cornforth, 1989; Jossa, 2017; Thornley, 1978).

After 2008, governments picked up on the renewed interest for co-operatives and enacted laws to promote those enterprises as well as the Third Sector at large, like Spain in 2011, Portugal in 2013, France in 2014, and beyond (CIRIEC, 2017; Hiez, 2014; Persais, 2017). In the UK, a law for co-operatives was passed in 2014, thinktanks have been offering new ideas (Gowan and Lawrence, 2019) and the Labour Party developed policies aiming at promoting employee ownership and workers’ co-operatives (Labour Party, 2017, 2018). Nonetheless, some have noted that both pre- and post-crisis, actual support given to co-operatives and the wider Third Sector in the UK has been underpinned by an agenda of austerity and responsibility-shifting in the conduct of social policy (Alcock, 2010, 2012; Amin et al., 2002; Milbourne and Cushman, 2013). It is within this context that this article provides a detailed account of the Thatcher and Cameron governments’ attitude towards co-operatives to uncover the neoliberal principles driving this agenda.

In doing so, we situate our argument within recent discussions demonstrating the resilience of the neoliberal model since the Great Recession (e.g. Berry, 2016, 2019; Berry and Hay, 2016; Hay, 2013). Here, we see British economic policy in the wake of the crisis as reinforcing existing political–economic paradigms rather than challenging them (e.g. for the case of industrial policy, see Berry, 2016, 2019). This recent literature, to which this piece and the special issue contributes, further recognizes that the shibboleth ‘neoliberal’ state is increasingly problematic, as examination of post-crisis policy reveals variegated directions and layers which cannot be contained under this umbrella. This constitutes an attempt to move beyond the analytical abstraction offered by early taxonomic efforts (e.g. Harvey, 2005; Prasad, 2006) by presenting a detailed empirical study of economic policymaking and discourse in order to map the width and contradictions of various political economic projects.

In this context, we argue that the ways the Thatcher (1979–1990) and Cameron-Clegg (2010–2015) governments understood and co-opted co-operatives have been consistent with an ordoliberal governing logic. Indeed, more largely, we believe that the concept of ordoliberalism, not in replacement but in conjunction with neo-liberalism, is an additional, insightful framework to capture the oscillating expressions and rationales of state intervention since the Thatcher governments in Britain. We are not suggesting that British governments have been directly influenced by ordoliberal thought or their German figureheads, or have followed an ordoliberal rulebook,¹ like some have argued regarding the EU or other countries (e.g. Biebricher and Vogelman, 2017; Blyth, 2013). Rather, we see the study of ordoliberalism and its thinkers as a useful lens which enhances our understanding of some government policies and language. Indeed, a number of authors including Werner Bonefeld (2012a, 2012b, 2015, 2017, 2019) and Johanna Oksala (2011, 2017) have highlighted the usefulness in applying an ordoliberal lens to Britain, the EU and beyond. The argument is that ordoliberal thought sheds light on some governmental tools, especially rhetorical, of legitimation that those countries use – tools which represent state attempts to govern and stabilize capitalist economies (Bonefeld, 2017, 2019). This article contributes to this argument in the British context, effectively proposing that in trying to manage successive crises of capitalism, governments since Thatcher have employed legislative and discursive techniques of legitimation akin to those favoured by the ordoliberals.

The remainder of the article first underlines our understanding of ordoliberal thinking by locating it within recent literature on neoliberalism and ordoliberalism. Our case study takes place within the realm of ‘social policy’; we show that this formed ordoliberalism’s critical contribution to neoliberalism, thereby highlighting its distinct usefulness as a label to analyse governmental attempts to shore up the neoliberal paradigm, in particular through discourse. Second, using recently released archival sources we argue that the Thatcher governments, by managing the demands of the Co-operative Movement, applied a depoliticizing governmentality best understood through the lens of ordoliberal logic. This project operated through the concept of ‘popular capitalism’, which attempted to remake co-operatives as self-responsible entities while disengaging the state’s responsibility for support. The final section contends that after a gap in time during the Major and Blair governments, the Cameron government reproduced and broadened this approach in an attempt to remake co-operatives as the perfect incarnation of the Big Society; a project also operationalized through the policy of popular capitalism, which sought to refashion the role of both the state and society in an attempt to discipline and eliminate political demands.

Eliminating the proletariat: Neoliberalism, ordoliberalism and depoliticization

The ordoliberal (aka Freiburg) school of thought emerged in response to crises taking place in Germany around the 1920s and 1930s. It was an attempt to show that capitalism was indeed imperfect and contradictory and, as such, needed a framework which would manufacture a stable economic and political order (Bonefeld, 2012a; Oksala, 2017). A reinvention and naturalization of the relationship between the state, the market and the ‘masses’ was needed, since laissez-faire had failed (Foucault, 2008). Certainly, as a whole neoliberalism is itself a corrective to the non-intervention of classical economics (Watson, 2018). Indeed, despite various disagreements almost all neoliberal currents recognized that the market was not self-regulative and that seizing the state was essential in order to intervene for competition and construct a free-market order (Mirowski, 2013: 53; Peck, 2010: 4; Slobodian, 2018: 2). Hayek best epitomized this fact, as he was the intermediary in productive discussions between the German ordoliberals and other neoliberal strands such as the Chicago school and consistently drew attention to the extent and rationales of state intervention (Peck, 2010: 17, 47–48, 65). Increasingly doctrinally divorced from the rest, the Americans were really the ones showing a growing distrust from the state; they increasingly conceptualized the market as the superior entity, almost autonomous and self-regulative (Peck, 2010: 54–68). Perhaps because the Chicagoan vision became so preeminent both in thought and in US government practice (Mirowski, 2013), both neoliberal theory and actually existing neoliberalisms were often misread as this specific school was used as a lens. But recent literature has shown the true nature of neoliberalism; that is pro-market, radical interventionism.

Nevertheless, we wish to emphasize that the term ordoliberalism still has analytical purchase. That is because we see ordoliberal texts as the sophisticated expression of some principles and language which governments de facto use to manage the capitalist contradictions between accumulation and legitimation (Bonefeld, 2017, 2019). A central legislative and discursive tool here is depoliticization, which is a legitimation attempt aimed at resisting and eliminating political demands. Of course, all neoliberal currents have been concerned with the impact of political demands on the elites’ ability to stabilize and consolidate the market order. Numerous discussions between neoliberals on the need for mechanisms to insulate capitalism and the state from democratic pressures – going as far as advocating for a supranational form of government – arose out of concern for the power of the ‘misguided’ masses (Slobodian, 2018: 92–118).

However, we do see ordoliberalism as making a crucial and distinct contribution to the neoliberal anguish over popular demands: ‘social policy’ or Vitalpolitik. It is a policy of state intervention emphasizing not just its extent but more importantly following a specific rationale (Foucault, 2008). Indeed, Vitalpolitik is an unequivocal strategy of social engineering aiming to stabilize capitalism and prevent crises happening in the first place, thanks to the creation of a depoliticized order of entrepreneurs that is best suited to the smooth operation of the free market (Bonefeld, 2017: 193). Neoliberalism’s ambition to remake citizens as homo oeconomicus is similar (see Brown, 2015), but is arguably not guided by the same encompassing plan.² Indeed, the ordoliberals’ sophisticated view of state intervention advocated for ‘organising actions’ – whereby the state intervenes in social spheres to instil the conditions necessary for competition and growth – which added to and departed from ‘regulatory actions’ – state intervention to safeguard competition and the price mechanism – usually present in neoliberalism (Foucault, 2008). Organizing actions seek to reshape social relations so that individuals internalize the values of the market (competition, entrepreneurialism, resilience, etc.) as though they were moral virtues, instead of asking the state for help (Oksala, 2017). In other words, only the ordoliberals developed a full-fledged strategy for the ‘social question’ (Mirowski and Plehwe, 2009: 101–106), or how to best legitimize and shore up the dominant economic paradigm through depoliticization to avoid a political crisis of the state (Bonefeld, 2012a, 2012b, 2015, 2017). Ultimately, our case study of state-co-operative relations illustrates our hypothesis that neoliberal projects such as those in post-crisis Britain have not necessarily moved away from such legitimation efforts – especially through the use of discourse (e.g. Lavery, 2018) – and thus cannot solely be understood as ‘authoritarian’ (Bruff, 2014) or ‘punitive’ (Davies, 2016).

Vitalpolitik is a critical plank of such legitimation efforts; it seeks to naturalize the principles of the free market economy in citizens and to produce homo oeconomicus amenable to capitalism, entrepreneurs accepting ‘responsibility for the consequences of their non-coerced decisions’ (Biebricher, 2011: 177; Bonefeld, 2017: 23). Indeed, ordoliberal thinkers argued that the economic chaos of laissez-faire and the malady of state welfare discouraged the vitality of entrepreneurialism and instead led to proletarianization (Bonefeld, 2012a, 2012b, 2017). This enslaved workers to the state, making them dependent on handouts and precluding them from experiencing the true freedom of market engagement and the satisfaction of well-executed investment and the economic risks of taking calculated chances (Röpke, 2017a: 164–165, 2019: 99). To solve this problem, the ordoliberals envisioned a social policy of ‘popular capitalism’, which sought to restore workers’ access to ‘disposable funds’ and remedy to their lack of property, ‘that leading characteristic of the proletariat’ (Röpke, 2017b: 156–157). The objective was to transform the workers’ mindset from the morose proletarian relying on ‘short term income’ and welfare support to the propertied (bourgeois) class engaging as economic citizens (Bonefeld, 2015). These stakeholders and entrepreneurs would also acquire the responsibility of ‘having more at stake’ in a system offering less security and plying individuals, situated in communities with the same economic/moral values, with ‘more to lose.’ This popular capitalism was presented as a system in which everyone participates as a stakeholder and access to private property was its foundation, since it combined ‘economic freedom … with individual responsibility’ (Bonefeld, 2012b: 38). In popular capitalism, social relations are ideal since they are based on ‘individual effort and responsibility, independence based on ownership, prudence and daring, calculation and savings, responsibility’, etc. (Röpke cited in Bonefeld, 2017: 108). To embed this bourgeois order in the population, ordoliberals for instance praised home- and share-ownership, and most notably, here, the ‘beneficial activities of saving banks, mutual building societies, and co-operatives’ (Röpke cited in Bonefeld, 2017: 108).

It is in this context that we draw attention to depoliticization as a crucial tool of ordoliberal government. Some scholars have paved the way through their reflections on depoliticization as constitutive of ordoliberal practice and discourse (e.g. Bonefeld, 2012a, 2012b, 2013, 2015, 2017; Oksala, 2011, 2017). Extending this work, our case study on co-operatives makes a novel contribution in highlighting the centrality of depoliticization to ordoliberal governmentality, in particular, via the rhetoric of popular capitalism. We see depoliticization as fundamental to the operation of ‘distinctly capitalist’ (Berry and Lavery, 2017) governing rationalities, crucial to sustain logics synonymous with ‘growth models’ (Berry and Lavery, 2017), neo-liberalism (Foster et al., 2014) and, here with state/co-operative relations, ordoliberalism. In agreement with the narrow definition in critical political economy (Burnham, 2001), we see depoliticization as an ‘attempt to move to an indirect governing relationship and/or seek to persuade the demos that they can no longer reasonably be held responsible for a certain issue, policy field or specific decision’ (Flinders and Buller, 2006: 295–296). In addition, we understand processes of depoliticization to promote simultaneously a ‘contraction of the available space within which “politics”/political agency can occur’ (Foster et al., 2014: 228). In other words, depoliticization, when narrowly defined, is about ensuring that the state is not responsibilized for a particular issue and, when broadly defined, is about closing down the space for an issue to be debated and potentially politicized. Both of these modes are observable in ordoliberal governmentality and, as we go on to show, in state/co-operative relations.

Depoliticization is crucial to ordoliberal governmentality because it is the key operationalizing device of Vitalpolitik. Indeed, the free market inevitably functions through inequality, but inequality produces political dissatisfaction. As such, a key role of government is to prevent these inequalities from being politicized. To do so, the strong state has to deploy numerous tools, especially rhetorical, to transform the parameters of state and society responsibility. Rather than being the provider of welfare, offering economic security for the population, the ordoliberal state is instead tasked with providing the moral and economic framework necessary for individuals to help themselves through voluntary engagement in the free market and access to property. This works to depoliticize socio-economic relations since the state now deflects and even eliminates political demands from individuals and communities by producing the conditions necessary for people to be self-sufficient and responsible (Bonefeld, 2017; Oksala, 2017). Unlike the welfare state burdened by politicized demands, through action and rhetoric, the strong state normalizes demands as lying not in its remit but with the individual and its entrepreneurial success or failure in navigating the economic landscape (Bonefeld, 2015: 416). As Oksala (2017: 185) concludes: ‘The goal of ordoliberal governmentality is thus a depoliticised society in which individuals compete against one another as entrepreneurs, not as political actors’.

In this sense, depoliticization is key to the endurance of a stable state and stable capitalist economy (Bonefeld, 2013: 779). Indeed, depoliticization works to ensure that individuals are responsibilized, and any dissatisfaction they experience as a consequence of the market mechanism is rendered an individual problem and not one linked to the state. Consistent with broader conceptualizations of depoliticization, this closes down the space for debate on matters that are now cast as economic (not political) and as a consequence of individual (not state) decisions.

In sum, this constitutes a considerable recomposition of the role of both the state and society. We explore this process in our case study of state-co-operative relations in Britain and argue that both the Thatcher and Cameron governments deployed a depoliticizing strategy which was mainly operationalized through discourse reflecting an ordoliberal logic, aiming to remake co-operatives into a tool of popular capitalism and, later, the Big Society.

‘Hands would have to dig into pockets’: Tracing the co-option and depoliticization of co-operatives

The mid-1970s saw a unique animation of the British Co-operative Movement which, for the first time in its history, formulated assertive and radical political demands to the state.³ These centred on greater state support – especially financial – for the movement as a whole, with a focus on consumer and workers’ co-operatives. This was unprecedented, since, historically, the Co-operative Movement had mainly developed through an emphasis on self-help and distrust of the state (Ellison, 2011: 54–55; Gurney, 1996: 180–186). Pioneer co-operatives were mostly formed out of self-help, especially during the Industrial Revolution when neither the market nor the state were able or willing to provide the conditions for basic survival (Bailey, 1955; Cole, 1944). This tradition persisted through time and was vindicated in many quarters as the state legislated and the capitalist class acted in indifferent or even detrimental and hostile ways to the Co-operative Movement in the first half of the 20th century (Adams, 1987; Carbery, 1969). On the other hand, however, increasingly, this perceived mistreatment politicized large swathes of the Movement, as a realization emerged that co-operatives were not ‘living in a political vacuum’ (Carbery, 1969: 4). This led first to the formation of the Co-operative Party in 1917 and to successive waves of political agitation within the Movement as some governments in power damaged co-operative interests. This grew louder and more bitter especially when their political ally, the Labour Party, ignored their interests and marginalized co-operative thinking and ideals both when in (e.g. 1945–1951) and out (e.g. 1930s) of office (Barou, 1948; Whitecross, 2015; Webster et al., 2012). This trend culminated in the 1970s. Many in the Movement, its leadership and its more radical supporters increasingly embraced a policy of state-led co-operation (Benn, 1979; Coates, 1976; Tomlinson, 1980). Nonetheless, the Movement’s politics have always been, and continue to be, contested. Both within the membership and the leadership, many have kept the belief that the Movement should remain independent from the state (Mills, 2009; Robertson and Chase, 2010; Webster et al., 2012; Yeo, 2002) – although some have argued that British co-operatives and other civic models have best fared when supported by private and especially public-sector networks (Alcock, 2012; Amin et al., 2002).

In the 1970s, the Movement’s politicization intertwined with the rise of co-operatives as an ownership alternative to failing nationalized and private industries in the larger landscape of a serious crisis of British industry and capitalism more generally (Coates, 1976; Jefferys, 1993; Morgan, 1997). Pressured by the Co-operative Movement, the 1974–1979 Labour Governments eventually made some concessions, focused in particular on stimulating the fledgling workers’ co-operatives sector, thereby committing little and resisting many of the Movement’s demands.⁴ For the Movement, the main gains were the 1976 Industrial Common Ownership Act (UK Parliament, 1976), which allocated five years of limited financial support for new worker’s co-operatives, and the creation of the fragile and small Co-operative Development Agency (CDA),⁵ the only quango in British history solely tasked with developing workers’ co-operatives, by raising their visibility and offering advice to such prospective enterprises.

This constitutes the background against which the Conservatives came to power in 1979. The Thatcher administration thus inherited these instruments set up under Labour, which they saw as unjustifiable and misguided. Indeed, Conservative heavyweights such as Kenneth Clarke, Norman Tebbit and Keith Joseph had been following these developments since the mid-1970s. Observing the collapse of some co-operative experiments, they came to argue that public spending had been used to advantage co-operatives and distort market forces. Instead, they wished that co-operatives would not be subsidized and would compete on an equal footing with other firms.⁶ Their views heralded significant change, which would jeopardize the shaky gains that had been made under Labour.

Indeed, beyond simply reflecting the well-known neoliberal tenet of free and fair competition, this in fact typified a full-fledged project which operated through a social policy consistent with the tenets attributed to ordoliberalism. In their pursuit of growth, employment and competition, the Thatcher governments would first integrate co-operatives within a developing set of Small Firms and employee ownership policies and consequently co-opt the progressive aspect of Co-operation. But, most crucially, this entailed the depoliticization of co-operatives. This assimilation and depoliticization of co-operatives was accomplished by ending the existing support for workers’ co-operatives – the landmark of any socialist and Co-operativist governmental agenda aiming to take the co-operative sector beyond the margins of the economy (Jossa, 2017; Wolff, 2012) – and reshaping the co-operative model through the rhetoric and policies of ‘popular capitalism’.

As early as 1979, upon its appointment as Secretary of State for Industry, Keith Joseph promptly met with the CDA Board. During the meeting, he made clear that co-operatives were now simply considered a ‘desirable expression of private enterprise’ and would be treated as such.⁷ Thus, after 1981, the state funding earmarked for workers’ co-operatives under the 1976 Industrial Common Ownership Act was intentionally not renewed.⁸ Co-operatives were now seen as any other small firm – evolving in an environment of free and fair competition – and no small firm would be shielded from ‘economic reality’.⁹ Thus, co-operatives could only access the existing Department of Trade and Industry assistance schemes, like other small firms.¹⁰ However, these schemes were being drastically cut in line with the government policy to encourage small firms (and co-operatives) to use the energy and resources of the private sector first and foremost.¹¹ One important example of this was the Local Enterprise Agencies (LEAs), which included local CDAs (locally funded organizations supplementing the work of the national CDA). LEAs gave advice and matching finance for small firms and co-operatives and were faced with increasing pressure to find private-sector finance as government support was rapidly withdrawn.¹² The Government applied the same rationale to the workers’ Co-operative Movement, which was simply told to seek funding from private sources for its survival instead of expecting any state backing.¹³

Following the same blueprint, the Conservatives restructured the CDA to ingrain financial efficiency and self-responsibility. Indeed, more generally, as early as 1979, Conservatives had started streamlining or simply axing dozens of quangos (Gamble, 1988: 102–103). In the same way, from 1981 the Conservative Government cut the CDA’s staff and budget, disregarding both the positive assessment of the CDA by independent consultants and the cross-party support it had in Parliament. Simultaneously, the government impressed upon the CDA the necessity to become financially self-sufficient should it wish to continue.¹⁴ The Government asserted that the Agency should become even more efficient and completely autonomous through charging for its services.¹⁵ Cuts in the budget would force the agency to realize this task, become more ‘businesslike’ and ultimately to ‘prove its value’.¹⁶ This rationale persisted, especially when the Government reluctantly attributed more funding to the Agency in 1984. The freedom to charge for the services given to the Agency by the Government was equated to the freedom to become self-sufficient.¹⁷ Through this discourse, the Government shifted responsibility onto the CDA, while continually stressing that more public spending would be unwise and would make the CDA less eager to find support from the Co-operative Movement or others.¹⁸ It thus shaped the CDA in line with the newly co-opted co-operative model; stripped of funding and having to rely on its own entrepreneurial grit and the resources of the private sector for its survival.

In the Conservative’s eyes, this was necessary and considered akin to the way most institutions and enterprises were expected to perform. This echoed their larger view of small firms in general, seen as the ‘seedbed’ of enterprise and economic growth, and the route to innovation and entrepreneurship.¹⁹ In the Government’s mind, this was crucial and necessary as they suspected that ‘there may be insufficient entrepreneurial individuals and firms to respond to the profitable opportunities that exist in the economy’.²⁰ As such, Government policy sought to change ‘attitudes to enterprise, the creation of wealth and entrepreneurship’ and in so doing provide a consistent roadmap to restore growth and combat unemployment.²¹ The Government envisioned various ways to accomplish this from tax relief to tailoring educational curriculums for business and enterprise.²²

However, this reinvention of British society was best seen through the Conservatives’ agenda of the ‘property-owning democracy’ – or in ordoliberal terms, the Vitalpolitik of popular capitalism. With this mantra, Conservatives believed that owning property (homes, shares, etc.) was key to encouraging enterprise and entrepreneurship in the British population (Francis, 2012). Property ownership meant that British citizens would finally be ‘enfranchised’ with a stake in the economy. This in turn propelled what was commonly referred to as ‘popular capitalism.’ In the 1980s, the term became synonymous with the dignity lent by newly acquired economic freedoms that were considered crucial to shaping people’s entrepreneurial character (Francis, 2012). This emerging bourgeois-class would willingly participate in the free economy by courageously engaging in profitable ventures, thus enlisting in the governmental pursuit of economic growth. Or, as Margaret Thatcher (1986) put it: ‘Popular capitalism is nothing less than a crusade to enfranchise the many in the economic life of the nation’.

Perhaps, unsurprisingly, co-operatives fit neatly with that agenda because of their emphasis on the joint ownership of enterprises. As such, co-operatives were smoothly integrated into the Government’s Employee Ownership policy, which considerably contributed to the ostensible achievement of the so-called property-owning democracy.²³ In addition to exemplifying the value of ownership, Conservatives saw co-operatives as a way to further interpellate the entrepreneurial spirit, leading to the creation of new efficient businesses and viable jobs. For example, co-operatives offered people who would probably not dare start their own enterprise the security of doing so by associating with others.²⁴ Keith Joseph, in a reference to Victorian bourgeois values, added that the co-operative model was a product characteristic of the ‘flair’ and ‘inspiration’ of the mid-19th century, which were much needed now (Lawrence, 1988: 160). Co-operatives were thus a welcome addition to the agenda of popular capitalism, a supplementary tool to embed the bourgeois order.

Yet, their inclusion in this social policy was only tenable on the condition that the co-operatives proved their responsibility as a movement that could weather economic realities. Accordingly, as co-operative supporters kept formulating requests, especially regarding the finances of the CDA by arguing that the Agency could not become self-financing,²⁵ the government attempted to discipline co-operators and suppress their expectations. In a depoliticizing move, the Government thus warned them that there was no alternative to how co-operatives and the Agency were being treated and that there was simply ‘no more money’.²⁶ After years of an ongoing politicized situation that they saw as unacceptable, government and state officials reasserted their view that there was no justification to focus on a movement that they believed should be independent and thus had no right to ask for state support.²⁷ The Agency had not been able to fund itself, and it was perceived that the Co-operative Movement had not been responsible enough to help fund it.²⁸ As such, in 1989, the Government decided to abolish the CDA. Against the opposition’s outrage, the Government’s final answer²⁹ was to recall to the House its own continuous generosity, shifting liability by highlighting the Co-operative Movement’s own irresponsibility:

[W]hat is the Movement doing to recreate, from its own resources, a body that will continue the work of the CDA? … It can be seen that it was an error to allow the CDA to become dependent on Government largesse … Hands would have to dig into pockets — but the rewards would be the dignity of self-help instead of the humiliation of passing the begging-bowl round Whitehall.

Noteworthily, this accusation had been explicitly extracted from an article in the Co-operative News, the Movement’s very own journal. The Government had strategically played upon the co-operatives’ contested legacy of self-help to use it as a springboard operationalizing its discourse attempting to eliminate political demands by shifting responsibility onto the Co-operative Movement. This move by the Conservatives constituted an early depoliticizing attempt at blurring the line between neoliberal self-responsibility and Co-operativist self-help, while reshaping perceptions of what support the state should or should not provide. Two decades later, David Cameron would further develop this project, under the banner of the Big Society.

‘We must use the state to remake society’: The Big Society and the depoliticization of co-operatives

As recounted above, throughout the 1980s, Thatcherite popular capitalism sought to install a free bourgeois economy through, in part, the rhetorical promotion and co-optation of co-operatives as a unique model of self-help. We now turn to the Cameron coalition period. Indeed, while Major and especially Tony Blair’s Third Way emphasized a social policy (Amin et al., 2002; Bauman, 1998; Byrne, 1999), which one could also analyse through the lens of ordoliberalism, their governments did not overtly pursue the specific project of popular capitalism as a solution to the ‘social question’. Under Blair, although the Third Sector was paramount to social policy (Alcock, 2010), co-operatives were not singled out by New Labour as a unique model representing entrepreneurship and responsibility. Blair did create a Co-operative Commission in 2000 at the request of the co-operative leadership, which produced a report with recommendations the year after (Co-operative Commission, 2001). The document was nonetheless largely written by and for the movement itself, and its salient autonomist accents did not formulate substantial demands to the state – illustrating the changing mood after the attacks on state support during the Thatcher years.³⁰ Arguably, then, Blair did not need to depoliticize the Movement by instrumentalizing its self-help tradition as the Conservatives had done, since this very thinking appeared to rise back to proeminence within the Movement (e.g. Mills, 2009: 1; Yeo, 2002).

After the financial crash, however, thanks to the creation of a coalition, the Conservatives re-entered office in 2010 and sought to fully reappropriate the co-operative model as a tool of the Big Society. Some have argued that the Big Society was only empty rhetoric acting as a cover for the pervasive deployment of austerity, the shrinking of the state and, more largely, the consolidation of accumulation through the reassertion of market logic and class interests (Bone, 2012; North, 2011; Wiggan, 2012). Within this scholarship, the few available reflections on the Government’s treatment of co-operatives pointed out to a policy of entrenching market rationality while withdrawing the state in the provision of social policy (Wiggan, 2012: 31). Countering these views, we however reject the ‘withdrawing of the state’ narrative rather seeing the omnipresent extension of its logic following a sophisticated rationality. Like others (e.g. Bulley and Sokhi-Bulley, 2014), we see the Big Society as governmentality, calculated action and in particular rhetoric attempting to govern through society and push people to govern themselves. We nevertheless extend this governmentality framework to emphasize that the Big Society is consistent with ordoliberal ideas attempting to restructure expectations and behaviours regarding the role of both the state and society in an attempt to legitimize capitalism.

With Cameron at the helm, the coalition prolongated the Thatcherite project of popular capitalism, notably through co-operatives. In fact, before coming to power, the Conservatives had been working on a blueprint encompassing all co-operatives (not just the workers’ type, as under Thatcher). At the centre were Philip Blond and Jesse Norman, credited with conceptualizing the Big Society, the programme which informed much of the Cameron Government’s social policy. For them, the bloated welfare state had crowded out community strength and action, especially the most virtuous models of association: mutuals, friendly societies and co-operatives. This sentiment incidentally echoed the principles underpinning ordoliberal thought. Just like Röpke had, Blond and Norman identified the withering away of the civic economy as a direct consequence of the welfare state, which had replaced natural attachments with dependency by responding to political demands (Bonefeld, 2015; Edwards, 2012; Ellison, 2011). Informed by Blond and Norman’s work, Cameron himself echoed this sentiment in 2009 arguing that the ‘synthetic bonds of the state’ had replaced the ‘natural bonds’ of duty and responsibility that once used to link people into a moral economy (Corbett and Walker, 2013: 455–456).

The conclusion which Cameron (2009) derived from this observation is best understood through what we recognize as an ordoliberal rationale: ‘we have to use the state to remake society’. Here, the strong state had to replace the welfare state in order to provide a framework remedying to the unacceptable poverty of the British spirit and restore the conditions upon which co-operatives could thrive once again. Norman offered a distinctly ordoliberal solution to this in the form of a state-led reimposition of the order needed to facilitate the disciplined, free and moral society: I–C–E – Institutions, Competition and Entrepreneurship (Bonefeld, 2015: 419–420; Norman, 2010: 164–170). Norman insisted that this would provide the conditions in which ‘individual entrepreneurship can succeed’, the sole way that Britain might return to the path of growth. This paradigm, he finally noted, had been the source of postwar prosperity for the United Kingdom and, interestingly, Germany (Norman, 2010: 178). Notably, Norman asserted that the Big Society would make virtuous socio-economic forms flourish again. Co-operatives in particular had to be developed, as they were among the most entrepreneurial models one could find in Britain (Norman, 2010: 171). Indeed, their limited capital reserves meant that since the Rochdale pioneers of 1844, their members had succeeded by deploying exceptional courage, self-help, vitality and entrepreneurship – the values of the Big Society (Norman, 2010: 171–174). Norman (2010, 172) concluded: ‘[I]t becomes evident that co-ops are in many respects — hold onto your hat — a rather conservative, indeed capitalist, idea’.

This quite explicit appropriation of the model followed that made by Cameron himself, when launching the Conservative Co-operative Movement in 2007. He had declared that it was ‘a shame’ that the co-operative model had been ‘associated with the political left’; indeed, he saw co-operatives as ‘independent’ and ‘partners’ of free enterprise in a ‘healthy society’ (Cameron, 2007). Thus, the entrepreneurship of co-operators was now eriged as an exemplary individual virtue, as opposed to the reality of their roots in the misery of 19th-century Victorian capitalism, which had forced the collectivist self-help tradition to emerge in the first place. In addition, the co-operative model was presented as a natural symbol of the free economy, obfuscating the Movement’s historical rejection of and struggle with capitalist enterprise (Bailey, 1955, Cole, 1944). In sum, co-operatives were co-opted and depoliticized – remade into capitalist, competitive survivors, embodying self-help, a virtuous trait representing individual responsibility. In all, it is arguable that Norman, along with David Cameron, brought about the integral Conservative assimilation of the co-operative model (Birchall, 2011: 151–152). In turn, this already diluted any expectations for state support.

David Cameron thus came to power within this intellectual landscape. In turn, he incessantly argued that the only solution to the crisis would be growth through entrepreneurship and competition (e.g. Cameron, 2011a, 2011b, 2012, 2014). The courageous citizen-entrepreneurs were designated as the growth-generating section of society and opposed to the unproductive, welfare-dependent proletarians (Lavery, 2018). From the outset, the goal was to reengineer an irresponsible society into a self-reliant one, which accepts that the only solution is economic growth, not positing political demands. As many have documented, the Coalition government resorted to exhortation to push the British people to internalize their responsibility to build and accept the Big Society (Bonefeld, 2015; Lister, 2015; Slater, 2012; Wright, 2012).

Nonetheless, the government could not rely on exhortation alone; it also had to deploy the social policy of popular capitalism. This would remake the weak welfare state into a strong state that deflects political demands for welfare, while simultaneously transforming the broken British society into a nation of willing entrepreneurs bravely facing the challenges of rebuilding the British economy and society (Bonefeld, 2015). To accomplish this, David Cameron openly followed Thatcher, who had always argued that Britain should become a nation of savers, home- and share-owners. To embed this bourgeois order in the British population, markets had to be enlarged to form a ‘genuinely popular capitalism’ (Cameron, 2012), in which employee ownership and co-operatives had an important place. Mirroring Wilhelm Röpke,³¹ Deputy Prime Minister Nick Clegg (2012a) noted: ‘We don’t believe our problem is too much capitalism: we think it’s that too few people have capital’.

Cameron and Clegg’s view was that promoting those forms would give more people the opportunity to own assets and, as a result, disperse the economic ‘rewards of success’ (Cameron, 2012; Clegg, 2012a). This would also ingrain a productive, entrepreneurial arrangement and contribute to solving the crisis of British capitalism, as people would be more engaged in the business they own (Cameron, 2012, Clegg, 2012a). The Cameron government thus offered tax cuts to employee ownership in 2013 and announced a consolidation bill for co-operatives in 2012 (Cameron, 2012). Consolidation bills are very limited pieces of legislation which assemble and update numerous, often outdated, texts into one. In this case, this led to the 2014 Co-operatives and Community Benefit Societies Act. Its main accomplishment was to offer greater legislative clarity, making it easier for people to understand the co-operative option, ‘empowering’ them to choose it and to follow its rules (James, 2014).³² As such, the government was insuring that co-operatives had the adequate ‘legislative environment’ for the sector to thrive (HM Treasury, 2013: 3). As a whole, combined with the regular discussion of the co-operative option through speeches and other ‘symbolic’ acts – such as Cameron’s formation of the Conservative Co-operative Movement – it sought to raise awareness of the co-operative form to incentivize more entrepreneurs to choose that model. As such, we see the Act not as an empty piece of legislation but as a light-touch ordoliberal intervention. The same goal was pursued for employee ownership schemes, with a combination of tax incentives and clarifications of existing rules for citizens’ use (Clegg, 2012b, 2013).

Ultimately, what these measures do is to present a greater choice when partaking in the free economy, or as Cameron (2012) put it when introducing the bill:

[G]enuine opportunities for everyone to participate and benefit … You can never create a fair economy if there are people who are automatically … encouraged to think that the only way to live their lives is to depend on state handouts. People need the capacity to succeed.

With this, Cameron effectively fused responsibility with economic growth. In this configuration, the state enlarges market relations, encouraging citizens to responsibly engage and participate in the game of competition instead of waiting for the state to cede to their proletarian demands (Corbett and Walker, 2013: 460–461). To fully cement this responsibility-shifting of choosing the co-operative option to the civic sphere, the 2014 Act implemented only one financial provision; namely, raising the threshold of an individual’s financial contribution to a co-operative, from a previous £20,000 to £100,000. This was of course needed in practical terms as the previous threshold was outdated because of inflation over time (Co-operatives UK, 2017), but what matters is the government’s introduction of this change and not another. Indeed, the stated aim of this measure was one of ‘encouraging increased investment in the country’s co-operative sector’.³³ This effectively positioned the state as the provider of the adequate framework for entrepreneurs to invest in. As opposed to any kind of proactive, socialist interventionist policy which would also address the obstacles faced by co-operatives when accessing finance (see Jossa, 2017; Wolff, 2012), this ordoliberal intervention very clearly extended the framework that the Thatcher governments had started.

Processes of depoliticization, as part of an ordoliberal governing rationality and in relation to co-operative policy, are thus overt here. Indeed, this provision implicitly asked prospective entrepreneurs to invest themselves, while an active participation for the state in providing finance was disregarded. This was to be expected, as Norman had already identified the success of co-operatives with self-help and entrepreneurship as opposed to state patronage (Norman, 2010: 171–174). Accordingly, the 2014 Act entrenched the co-operative model as reliant on the resources and energies of the private sector and civil society. In effect, the Conservatives continued the Thatcherite reframing and suppression of co-operators’ expectations, since co-operatives would be treated as any other firm, and the responsibility for developing them would be on autonomous citizens engaging in competition (Conservative Party, 2008: 66): ‘Because co-operatives are both independent and democratic, they allow a community of individuals to exercise their rights and responsibilities without the intervention of the state’.

This way, the co-operative model further became about the economic citizen of ordoliberalism and their duty to select an economic option to enter the competitive world. On the other hand, the role of the state was further reconstructed as the provider of the conditions for this choice, away from the socialist co-operative policy of positive discrimination and the possibility to form political demands. Rather, here, co-operatives were thus fully integrated in the economy of free competition and self-responsible participation and, as such, became a tool of the Big Society. British citizens – not the state – became the ones accountable for building not only the self-reliant Co-operative Movement, but the economy as a whole. In this process, the role of the state was to ‘empower’ the British population to become productive and self-sufficient members of the free economy. The result would be the depoliticized, property-owning democracy, or as Cameron (2012) concluded – again echoing Röpke:³⁴

An economy where people feel in control of their destiny, because they've started their own business, or are shareholders in the company they work for, or are part of a co-operative … That is how we will make markets work for all of us, to spread wealth, freedom and opportunity.

In practice, however, although the 2014 Act introduced some small-scale beneficial changes (Co-operatives UK, 2017), it is clear that the policies and language of the coalition have not changed the historically marginal character of Co-operation in the British economy. Worse, in some sectors, the coalition’s embrace of co-operatives has had deleterious effects. In public service, delivery in particular, the government’s upbeat promotion of public sector spin-out mutuals/co-operatives concealed the structural barriers to entry that have been entrenched in the sector, such as inadequate pension law, competition from monopolies and austerity (see Birchall, 2011; Myers and Maddocks, 2016). As a result, this has concealed the very real advantages of co-operatives and made the coalition’s goal of transferring one million of public sector employees into mutuals/co-operatives wholly unattainable.

Conclusion

This article has sought to analyse the Thatcher and Cameron administrations’ political management of the British Co-operative Movement. To that end, we argued that the study of ordoliberalism, with its emphasis on Vitalpolitik, sheds light on a systematic mode of economic management attempting to shore up the neoliberal paradigm through depoliticizing policies and language concerned with austerity, competition, access to property and self-responsibility. Indeed, ordoliberal governmentality relies upon naturalizing the belief that the state ceding to outside political demands is economically damaging because it results in the impoverishment of the entrepreneurial spirit. Within this logic, market relations have to be consolidated and expanded so that workers can be included and given access to ‘real’ satisfaction. The state, then, is the actor that promotes the conditions for entrepreneurship and competition to flourish, unleashing the potential for economic growth for all. Through policy designed to promote popular capitalism, the state governs through the political society to reshape it into the entrepreneurial society. Both the Thatcher and Cameron governments followed this approach in order to eliminate proletarian political demands. In particular, Cameron’s Big Society exemplified this by seeking to direct the British population towards self-responsibility and demonstrating the courage to engage in market relations to solve the crises of British capitalism. As part of this project, the Conservatives in coalition achieved the complete reshaping of the co-operative model consistent with the traits of ordoliberalism; simultaneously offering greater choice for economic participants while attempting to eliminate the political demands of the Co-operative Movement and the British population at large.

Overall, it is difficult to assess if this decades-long process of the depoliticization of co-operatives has been successful at all in restructuring the Movement’s political demands. As aforementioned, under Thatcher, co-operative supporters stuck to their radical socialist line; however, under Cameron, leaders of the Co-operative Movement appeared to have been more complicit, generally praising Cameron’s interest and policies towards co-operatives and inserting themselves within Conservative government research and advice (Ainsworth, 2012; Julian, 2013; Wright, 2014). On the other hand, both the mainstream media and the Co-operative Party had noted, in 2007, that Cameron’s embrace of the co-operative model was in reality a strategical attempt to ‘colonise Labour territory’ (Robertson and Chase, 2010: 28). More recently, the Movement’s leadership also sat with Labour in an attempt to start redeveloping a socialist–interventionist industrial policy for Co-operation and employee ownership (Labour Party, 2017, 2018). Nonetheless, in light of the difficult relation between the Movement and the state that this article has explored – permeated as it has been by a depoliticizing governmental strategy – it is unclear to what extent such a collaboration would bring success to the Co-operative Movement.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iDs

Thomas Da Costa Vieira

Emma A Foster

Notes

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The elimination of political demands: Ordoliberalism,the big society and the depoliticization of co-operatives

Abstract

Keywords

Introduction

Eliminating the proletariat: Neoliberalism, ordoliberalism and depoliticization

‘Hands would have to dig into pockets’: Tracing the co-option and depoliticization of co-operatives

‘We must use the state to remake society’: The Big Society and the depoliticization of co-operatives

Conclusion

Footnotes

Declaration of Conflicting Interests

Funding

ORCID iDs

Notes

References