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Historian Tehila Sasson challenges the traditional view that neoliberalism originated on the political right, arguing instead that its roots run through the British Left and the growth of international nonprofits that unintentionally helped legitimise the neoliberal project. Our editor Jonny Gordon-Farleigh interviewed the author to find out more.
JGF: The central provocation of your book, The Solidarity Economy: Nonprofits and the Making of Neoliberalism, is its challenge to the prevailing narrative that neoliberalism originated primarily from the political right.
Instead, you offer an alternative account – one that traces the roots of neoliberalism through the British Left from the 1950s and, in particular, through the growth of the nonprofit sector. By doing so, you illuminate a more complex relationship between the Left and the neoliberal project.
Rather than continuing with a commitment to state-managed economies and the welfare state, parts of the Left shifted toward an approach described as being “in and against the market” – a form of market-based socialism that would advocate for a “distinctively nongovernmental project.“
Could you retrace this historical process that links capitalist development, decolonisation, and the rise of INGOs?
TS: The Solidarity Economy explores how nonprofits – particularly large international aid organisations such as Oxfam, Save the Children, War on Want, and Christian Aid – emerged as key actors in the British, and to some extent global, economy through their development and aid programmes.
Traditionally, these organisations have been studied through the lenses of politics and international governance. Historians, international relations scholars, and anthropologists have often framed NGOs within the broader narrative of "non-governmental governance" that gained prominence in the latter half of the twentieth century. Their activities have also been situated within what historian Charles S. Maier describes as the emergence of alternatives to the "project-state".
My book builds on this scholarship – an essential foundation for the narrative I trace – but seeks to broaden the scope. Rather than viewing these NGOs solely as instruments of governance, I argue that they played a formative role in shaping the British and the global economies. These organisations were not only influenced by economic theories and policies; they also developed economic ideas of their own, like fair trade, and actively shaped economic life through their development and aid initiatives. In doing so, they became integral to the third sector of the British economy.
Historians often refer to organisations like Oxfam and Save the Children as ‘NGOs’ or as ‘charities’. Instead, I use the term ‘nonprofits’ to highlight the unusual positionality these organisations occupy, particularly in how they relate to the world of profit.
On one hand, they hold charitable status and benefit from associated tax exemptions. On the other hand, they actively engage in profit-generating activities, most notably through trading companies they establish and operate. These organisations were key players in shaping the fair trade movement, campaigning for corporate social responsibility, and, at times, calling for consumer boycotts against multinational corporations while simultaneously partnering with other businesses. Some were deeply involved in the distribution of microfinance, while others experimented with models that blurred the line between commerce and ethics. Across these initiatives, they developed a range of practices aimed at being not just economically sustainable but morally justifiable.
A central concern of the book is to explore how these organisations navigated – and often embodied – the tensions at the heart of what is sometimes called "ethical capitalism”.
JGF: And this is all taking place within the context of post-war decolonisation. It's not just domestic; it's part of international economic development and governance.
TS: The history of fair trade, ethical capitalism, and corporate social responsibility is not uniquely British. Similar movements emerged across the United States, Western Europe, and even in the Soviet Bloc, where concerns about labour conditions, consumption, and responsible business took shape in different forms. However, the British version of this story was shaped in particular by the politics and economics of decolonisation. The growth of this sector was closely tied to the end of empire, not only in terms of ideology but also through institutional and personal continuities. As formal imperial structures dissolved, many individuals from the Colonial Office transitioned into the emerging humanitarian and development sector, bringing with them administrative experience, technical expertise, and established networks in Africa, South Asia, and the Caribbean. One well-known example is Jimmy Betts, who became Oxfam’s first Field Director for Africa. These former colonial officials helped reframe Britain's global engagement through development aid, humanitarian relief, and small-scale economic projects that replaced the functions once carried out by colonial governance.
By the 1970s, this earlier generation was increasingly joined by a new cohort of professionals with backgrounds in marketing, business, and retail. These individuals brought a different set of skills, more attuned to consumer culture, branding, and private enterprise. Together, they helped reshape British nonprofits into more complex economic actors, contributing to the formation of what came to be known as the ‘third sector’.
But the transformation was not only about who worked in these organisations. The long process of imperial withdrawal also raised broader questions about the future of Britain’s global economic role. As access to colonial markets and resources diminished, postcolonial economies became important spaces to test domestic ideas about decentralisation, anti-statism, and corporate responsibility. Ethical capitalism in Britain emerged in part as an attempt to reimagine the country’s position in the world through aid, trade, and moral engagement rather than through direct political control. In this way, decolonisation was not simply a political or diplomatic transition; it was an economic turning point that restructured Britain’s connections with the former empire and helped give rise to new models of market-based development.
JGF: Given the ethical critiques of state-led economics – such as concerns about ‘economism’, the emphasis on ‘growth’, and other normative reservations – could we understand this stance more as a form of scepticism towards the state rather than outright anti-statism? In other words, for your cast of economists and political theorists – which includes R. H. Tawney, G. D. H. Cole, Michael Young, and E. F. Schumacher – does socialism still need the state, or does it exclusively become a ‘non-governmental project’?
TS: Yes, certainly. I came to study these thinkers and policymakers as a way to understand the broader intellectual and political context from which the British nonprofit sector emerged. Much of the existing literature on NGOs has focused either on institutional histories or on their role in international politics, often treating them as technocratic actors. But I was interested in something different: the set of economic and moral ideas that underpinned their work, and how those ideas were shaped by domestic debates within Britain. I found that you could not fully understand the international activism of organisations like Oxfam or War on Want without first understanding the political culture of the British Left out of which they arose.
In the archives, I discovered that these nonprofits were deeply engaged with thinkers like E. F. Schumacher, Michael Young, and others on the ethical socialist Left. Many of them drew inspiration from, and sometimes directly collaborated with, economists, Christian socialists, and New Left intellectuals who were grappling with the limits of both centralised socialism and laissez-faire capitalism, as well as anticolonial thinkers like Gandhi and Julius Nyerere. Their critiques of the state were not rooted in anti-statism in a libertarian sense but in a broader scepticism about the moral adequacy of state-led planning. They worried that Keynesianism’s emphasis on growth and GNP sidelined deeper concerns about inequality, community, and self-determination. Influenced by anticolonial thought, especially Gandhian ideas, they began to imagine new models of ownership rooted in mutual aid, decentralisation, and grassroots participation.
This scepticism shaped how British nonprofits emerged. From the 1960s onward, organisations like Oxfam and Intermediate Technology Group operationalised these values through what could be seen as a type of ‘stakeholder capitalism’ that emphasised shared governance among workers, consumers, and the global community. These nonprofits, as I show, did rely on state funding, yet they positioned themselves as mediators between different actors in the global economy and sought to democratise economic participation through fair-trade enterprises, advocacy campaigns, and new forms of postimperial solidarity. The nonprofit sector thus became a key arena for testing out a more participatory and ethical form of capitalism, one that retained socialist commitments but no longer relied solely on the state to realise them.
JGF: The history of democratic enterprise in Britain goes back hundreds of years. It's codified in the 1840s, but much more out of a working-class tradition. When it resurfaces in the 1950s and 1960s, it has a strong strain of Christian socialism, which has a different approach to the economic mutualism to the working-class communities of the late nineteenth and early twentieth century.
TS: Yes, absolutely. The history of democratic enterprise in Britain stretches back centuries. While it was formally codified in the 1840s, it emerged from a working-class tradition of mutualism. By the 1950s and 1960s, this tradition resurfaced in a new form, shaped not only by the legacy of nineteenth-century socialism but also by contemporary moral debates influenced by Christian socialism and anticolonial thought.
My project examines how the emerging nonprofit sector of the 1960s engaged with and reinterpreted these traditions. Although these organisations sometimes referred to late-nineteenth-century socialism in their institutional narratives, the development of their fair trade programmes was more immediately shaped by debates from the 1940s and 1950s.
This is why the first chapter of my book focuses on that earlier moment; not to suggest a direct lineage between figures like Schumacher or Young and the nonprofit sector, but to reconstruct the intellectual and political environment in which these ideas were circulating. In the 1950s, particularly within the British Left, there were already active debates about ownership, centralisation, and the future of the Labour Party. There was growing interest in the role of business, consumers, and civil society as alternative vehicles for realising socialist aims, often framed as part of a ‘mixed economy’. The Left began thinking about economics beyond growth, redefining its purpose not simply as expanding production, but as building a more humane and participatory economic order.
In the book I focus, for example, on Michael Young’s ideas about consumerism and mutualism, which became key reference points for many nonprofits. These organisations developed a vision of the "ethical consumer" that drew on Young’s secular emphasis on solidarity and was influenced by trans-Atlantic debates about the role of the consumer rather than the worker in the economy. Schumacher’s trajectory is different. He began with a secular approach, became increasingly influenced by Gandhian thought, and eventually converted to Christianity in the 1970s after engaging with various forms of Christian socialism in Britain. In both figures, we see the convergence of several traditions: postcolonial ideas of trusteeship, Gandhian mutualism, and Christian socialism. These strands gained renewed significance and were reinterpreted through the lens of the emerging nonprofit sector.
JGF: You also map the transformation of largely patrician charities into complex and professional “business ventures” from the 1960s onwards. These nonprofits set up shops, use limited company forms, and benefit from the expansion of tax exemptions.
Can you explain the origins of the “humanitarian” business model, the rise of voluntary regulation (i.e., ethical certification), and how it fits within your political history of neoliberalism?
TS: The transformation of British charities into so-called professional humanitarian ‘business ventures’ began in the 1960s. Traditionally voluntary in nature, nonprofits started employing permanent staff and expanding their operations, which helped establish them as a ‘third sector’ in the British economy, distinct from both the state and private enterprise. By the early twenty-first century, the sector employed around 600,000 people and drew on a large volunteer base. This professionalisation also shifted their role: nonprofits became not just moral actors, but major employers and economic players.
One key aspect of this shift was the development of fair-trade programmes built around limited liability companies. From the 1970s, large aid organisations began to establish subsidiary trading arms to import, market, and sell goods produced in the former empire. These ventures allowed nonprofits to generate commercial value while maintaining a charitable mission. Crucially, they pushed for – and won – a series of tax exemptions in the 1960s (including on sales and property taxes), linking these benefits to their post-imperial mission of supporting development in newly independent countries. These legal and fiscal frameworks made it possible for charities to operate like businesses while maintaining nonprofit status.
At the same time, nonprofits moved visibly onto the British high street through the creation of charity shops. Originally intended for fundraising, these shops became sophisticated retail operations, employing both paid staff and volunteers. Selling second-hand and fair-trade goods, they helped professionalise the sector while creating a recognisable public presence. These developments marked the emergence of a hybrid humanitarian-capitalist model: part moral mission, part entrepreneurial strategy.
JGF: What did charities look like before the Second World War?
TS: Charities have been central to British society since the Elizabethan era, particularly in administering poor relief at the parish level under the Poor Laws. During the nineteenth century, they gained formal legal status and began receiving tax exemptions that distinguished them from private enterprise. These charities were often Christian, elite-run, and operated at both local and imperial scales, supporting the poor in Britain while also funding relief efforts in famine-stricken colonies like India.
By the early twentieth century, this philanthropic landscape started to shift. Organisations like Save the Children, founded during the First World War, marked the arrival of modern NGOs. They retained moral aims but began hiring professional staff and launching coordinated humanitarian campaigns. Still, up through the Second World War, most charities remained small in character. Oxfam, established in 1943 by Oxford academics and businessmen, typified this elite-led approach.
The real transformation began after the war. Oxfam pioneered a new model of charity retailing that moved beyond redistributing donated goods. Its first permanent shop, opened in 1947 in Oxford, sold second-hand items to raise funds for relief work. By the 1960s and 70s, this model expanded rapidly. Driven by youth culture, volunteerism, and a consumer boom, Oxfam and others opened shops nationwide, often in vacant premises. These retail outlets were supported by professional management and increasingly relied on strategies borrowed from the private sector, including PR campaigns and market research.
Nonprofits, in fact, only really became significant economic actors in the last third of the twentieth century. By the early 2000s, the voluntary sector employed hundreds of thousands of people and had developed its own institutional infrastructure, including subsidiary limited liability companies. These were used to run fair-trade programmes and micro-enterprise ventures that imported goods from the former empire, combining ethical development goals with commercial operations. Tax exemptions, secured through lobbying efforts in the 1960s, underpinned this growth and allowed charities to compete directly with for-profit retailers.
The legacy of this transformation is visible on Britain’s high streets. Charity shops became a fixture, sometimes outcompeting small businesses thanks to favourable tax treatment and unpaid labour. These shops also served the domestic poor during periods of economic crisis, offering cheap goods amid rising unemployment and austerity. What began as elite philanthropy evolved into a complex, hybrid sector, commercial yet moral, national and post-imperial, and deeply embedded in the economic and political fabric of modern Britain.
JGF: To return to the question of decolonisation, you argue that newly independent economies offered a testing ground for these ethical critiques of capitalism, which we see in the promotion and adoption of small-scale entrepreneurialism, microfinance, and other aspects of ‘village economics’.
Can you explain how these changes in the decolonised world created the space for – and even influenced – these approaches to national and economic revival?
The fair trade model that Oxfam developed in the late 1960s brought goods from the decolonised world to sell in British charity shops. The goal was to connect British consumers through ethical consumption while supporting employment and development projects in the Global South.
This approach took shape during the 1970s recession as international organisations sought alternatives to traditional development models dominated by institutions like the World Bank. The model aimed to create decentralised, non-state markets linking ethical consumers in Britain directly with producers abroad. Rooted in ideas such as Gandhi’s village economics and the importance of trust, organisations like Oxfam saw themselves as stakeholders in a new global economy.
In theory, this model sought to promote community-based development and solidarity. In practice, however, it became more focused on profitability and control. Rather than simply facilitating connections, charities like Oxfam made many decisions on behalf of producers, steering fair trade toward market-driven outcomes.
As the model evolved, design and marketing experts were sent to help producers, often women, adapt their products to British tastes, shifting the focus from local to international markets. By the mid-1980s, the fair-trade approach became further financialised with the introduction of microcredit programmes that trained producers in entrepreneurship, bookkeeping, marketing, and production techniques. Workshops aimed to preserve traditional crafts while aligning them with global consumer expectations.
Ultimately, this process helped construct an image of the ‘Third World’ as static and traditional, reinforcing imbalances between producers and the global market. The fair-trade movement shaped not only economic practices but also perceptions of development and the concept of the ‘Third World’.
JGF: In the final section of your book, you argue that while nonprofits may not have been the primary architects of neoliberalism, they nonetheless played a role in legitimising its logic. Given the nonprofit sector’s significant expansion – employing large numbers of people, benefiting from increased philanthropic funding, and operating in a time when traditional collective institutions of all kinds are in decline – where do you see meaningful opportunities for transformation within our political economy/the sector today?
TS: Historians are generally cautious about predicting the future, but I do think there are reasons for hope, and growing conversations about the role of the state today reflect that. The nonprofit sector has expanded significantly, often stepping in where traditional collective institutions like trade unions and political parties have declined. While this growth has addressed some urgent needs, it has also, in some cases, unintentionally legitimised neoliberal logics: shrinking the state, individualising responsibility, and relying on market-based solutions for social problems.
That said, I don’t see the nonprofit sector as inherently problematic. Nonprofits can play vital roles, especially when rooted in local communities, by offering support, advocacy, and experimentation. But their expansion should complement, not substitute, a strong and accountable public sector.
Ultimately, the challenge is not the existence of nonprofits, but when they are asked to do the work of the state without the same democratic mandate or resources. I remain hopeful that we’re seeing a shift in that conversation, and that we may yet rebuild a political economy where the nonprofit sector supports, rather than supplants, collective and state-led solutions. ∞
Tehila Sasson is an Associate Professor of Modern History in the Faculty of History at the University of Oxford and a Tutorial Fellow in History at Wadham College, Oxford. Her first book, The Solidarity Economy: Nonprofits and the Making of Neoliberalism after Empire, came out in May 2024 from Princeton University Press.
