Just as we are trying to get to grips with whether the Liberal Conspiracy is actually Liberal, so now we have Dave the Chameleon saying the the Conservatives and the Co-operative Movement have always been natural bed-buddies:

The co-op movement has generally been associated with the political left. I think that's a shame. First, because there have always been people on the centre-right concerned about the effects of capitalism on the social fabric. Men like Carlyle and Disraeli, following the tradition of Edmund Burke and Adam Smith himself, who recognised at the outset of the industrial revolution that profit was not the only organising principle of a healthy society. And second, because the co-operative principle reflects an important part of the vision of social progress that we on the centre-right believe in: the role of strong independent institutions, run by and for local people. That's why Conservatives have always argued that free enterprise and the co-operative principle are partners, not adversaries.

It is true that, faced with an alternative between co-operative localism and central state organization, the Conservatives have occasionally championed the mutual. Notably in 1908 when the Old Age Pensions Act was passed the Conservatives tried to promote the use of Friendly Societies and Mutuals instead of a state pension system. And it may be that there have been well-meaning Tories worried about the "effects of capitalism on the social fabric". And yes, co-operatives operate in the same markets as capitalists often and compete, often successfully with them.

However, the International Co-operative Alliance provides the ground rules for bona fide co-operative enterprises. And the Co-operative Values they promote are indeed motherhood and apple pie stuff: "Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity."

But the Co-operative Principles, developed from this vision and building on the rules of the Rochdale Pioneers, set bona fide co-operatives at odds with the traditional capitalism that the Tory party has long championed. "Democratic Member Control" for example means that every member, regardless of their financial stake, has an equal say in the running of the business. Capitalism is based on the exact opposite - that he with the most shares has the greatest say.

"Voluntary Open Membership" was a challenge to the "Church and State" party - with many mutuals founded precisely because their non-conformist members were barred from services and facilities because of their religious associations.

The Co-operative Movement, at least in Britain, was basically founded to empower the lower classes against the Tory ruling class and its economic hold over them. Its principles can be and are used to democratise and devolve services from an overbearing state as with Cameron's regurgitation of the liberal Milton Friedman's idea for co-operative schooling. But it is an extra-ordinary claim that the principles of the Co-op Movement are compatible with the protectionist capitalism embodied in the Conservative party.

Dave incidentally perpetuated the popular story that the co-operative movement started in Rochdale - they codified the idea of course, but it was proto-socialist Robert Owen who opened the first co-op store for his workers in New Lanark, and, to take it to its logical origins, Gerrard Winstanley's Diggers in 1649 who set the scene for the long battle between co-operation and collectivism on the one hand and enclosure and privatisation of our common birthright on the other. I doubt the Conservative Co-operative Movement will be agitating any day soon for wholesale equitable redistribution of the common wealth.

Incidentally Guido - I believe you are quite wrong in this respect - a hedge fund partnership cannot by definition be a bona fide co-operative since one of the other obligations of a bona fide co-operaive is to promote and educate about the co-operative principles. The hedge fund exploits to the max the capitalist principles of shareholder power - might is right. I don't have a principled objection to hedge funds and private equity - they have their place in this broken world, but they cannot be counted as members of the co-operative movement by any stretch of the imagination.