Capitalism, Change and Fraud in Uganda

By Yusuf Serunkuma Kajura

Jörg Wiegratz, Neoliberal Moral Economy: Capitalism, Socio-Cultural Change and Fraud in Uganda (New York and London: Rowman and Littlefield, 2016)

At the core of this book is the question: What explains the prevalence of fraud in contemporary capitalist societies? This question seeks to respond not to a single event but to a “socio-cultural” shift. The author’s question is based on the observation that fraud (theft, corruption, trickery etc.) has become wide spread in contemporary capitalist societies in most businesses and other forms of interactions. In Uganda it is has spread to that point that artistes and dramatists use the subject of fraud in their creative work highlighting its rather normalized status. The claim in the book is that there has been a major shift as the condition seems rather new.

Wiegratz juxtaposes two moments in Ugandan business history. The period before the World Bank and IMF enforced structural adjustment programmes (SAPs), and the period after the SAPs were introduced, which also occurred at the same time as the government of President Museveni and his National Resistance Movement (NRM) came to power. Interested in providing empirical data in the study on neoliberal moral economies, Wiegratz conducted fieldwork in Uganda’s Bugisu region in the east and Kampala, and focuses on coffee and cotton farming and trading. In these areas, the author held several interviews and reviewed newspaper reports and carried out ethnography.

The business environment, he argues, before the SAPs was characterised by cooperative unions, which provided among other things, price regulation, credit facilities, produce transportation, and warehousing, to farmers. Wiegratz focuses on Eastern Uganda’s Bugisu Cooperative Union (BCU), which, out of 41 others, is the only one still standing in the post-SAPs period.  SAPs had been pitched to African economies (and other formerly colonised countries) as liberalising and freeing the market from undue regulations by government/cooperatives, which had been deemed as constraining the free flow of the market forces of demand and supply. Without seeking to idealise the period before SAPs, Wiegratz – based on interview findings – notes that business dealings then were defined and shaped by ‘notions of friendliness (sometimes feelings of affection for one another) mutual respect and trust, diligence, patience, honesty and discipline (e.g. not to give in to the temptations of harm and disappoint another close person by lying, stealing or breaking promises) and other related notions of good manners’ (p. 187). The people often saw themselves as connected to one another and doing business meant enhancing their collective livelihoods. Wiegratz continues that ‘trade was supported and enforced by a local community in which social interaction were taking place between people who generally knew each other and their families…who needed each other to sustain their livelihood.’ Although the author struggles to explain the genealogy of this moral locus – an issue to which I will return below – the sections narrating the radical shift in norms that happens after structural adjustment are brutally lucid (and many cases incriminating of the NRM government).

To explain these changes in norms and values, the author points at two centres of power, which seamlessly reinforced each other: The World Bank and the NRM leadership. If the World Bank was simply criminal in its actions, the NRM leadership took SAPs to an entire new level as they sought to materially benefit from the processes of restructuring themselves. Page after page, the author narrates how the NRM elite, took their cue from the World Bank and presided over corruption and theft that continues today. Firstly, to make the argument that cooperatives were unsustainable, the World Bank had to forge the evidence. Wiegratz cites a state official, ‘Cooperatives were forced to sell their business to the private sector’ through manufactured bank statements that declared them indebted and unsustainable. To do this, ‘accountants were sent into cooperatives to check their books. In the end the accountants made sure the cooperatives were on a loss on paper: cooperatives were told, you have to sell to cancel your debt [that was created on paper in the first place]. Also cooperatives were not regarded credit worthy by respective banks’ (p 99).

Starting with this incidence of criminality by the World Bank, the NRM leadership, fresh from the struggle in the bush, saw an opportunity to enrich themselves by sharing the resources of these cooperatives as well as state assets generally – directly free of charge, through proxies, fake Indian/foreign investors, and through privatisation and the Private Public Partnerships (PPPs). As Wiegratz writes:

Uganda’s privatisation was riddled with corruption, crime, trickery and self-enrichment schemes of political elites and their business allies. It involved a range of irregularities and trickeries: selling public entities at an undervalued price to cronies of the government, misdeeds regarding payment (for instance, no, incomplete or late payment) or bank asset manipulations. Many factories were acquired by connected people and they quickly resold them to make a substantial cut in the process…privatisation aided the process of a number of key NRM leaders becoming (large-scale) capitalists rather than sustained revolutionaries (pp.101-102).

Wiegratz notes that in addition to often well-publicised scandals of theft and egregious corruption at the top, people at the bottom learned that all that mattered was their self-interest, which they had to meet by any means necessary –  including violence. In an imagery of a rotting fish—which often starts to rot from the head, Wiegratz notes that a key shift in norms and values occurred. The corruption-ridden privatisation, the author notes, ‘helped to reframe and normalise deceiving and thieving’ (p. 103). But privatisation did not only benefit the rich, something else happened. The coffee industry for example, opened-up to more opportunistic deals than could ever have been imagined. More and more opportunistic ‘entrepreneurs’ joined the business to cash in. They had no concern for quality or already established business practices. Instead, they harvested unripe beans, added stones into the beans and even participated in outright theft. Economic liberalisation condemned farmers to the mercy of merchants and middlemen who were mostly ruthless and remorseless. 

The author also tells the story of a European company that he calls K, which, benefiting from support of powerful members of the government (who would deploy the security services in case of any protests), turned coffee-farming and trading in Eastern Uganda (Bugisu region) into a sort of Machiavellian colonialist business arrangement. Through several dubious means (including cheating, deceiving, inventing ‘quality’ issues etc., as they bragged about liberalisation and free markets), the company creamed off profits from Ugandan coffee farmers with reckless abandon! Wiegratz terms this phase as one where neo-liberal reforms became the ‘weapons of the powerful’ to exploit and impoverish the weak. As society’s leaders publicly bragged about their wealth despite having acquired it fraudulently, socio-cultural reprogramming took place as people came to believe that ‘the best way to live your life and be successful: be egoistic, with low other-regard and dishonest’ (p. 107). A quote from a social scientist the author spoke to summarises the conditions on the ground:

Uganda is about shamelessness and cheating nowadays. But remember a child learns from the father: if you steal while carrying your child on the back, your child thinks stealing is no problem. In the population theft is now seen to be normal. The leadership is not accountable; it is not punished for wrongdoing. Corrupt politicians are censored but then reappointed. Those who engage in corruption are protected [by the leadership]. The leadership promotes corruption and stealing; so people will say ‘why [should we] not also start stealing (p. 102).

However, Wiegratz is able to reveal that the shift in norms and values was not simply a product of SAPs, but a function of the people in power. At several points in the text, one is struck by the possibility that if another group of people had been in office, the story would be different. For example, in the case of the BCU’s struggle to recover its former glory and fight the excesses of neoliberalism, the government conducted a witch-hunt of the BCU leadership under Nathan Nandala Mafabi, who had implemented fruitful reforms to revive the cooperative, demonstrating the responsibility of the people in power for the continuation of the economic and political crisis hampering small producers and thus the reproduction of the neoliberal moral economy of the coffee trade dominated by local middlemen and foreign companies. Instead of focusing on pro-poor reforms, i.e. help revive the vitality of the cooperative (which would endanger the position of foreign buyers like K), the government viewed Mafabi (who has been a leading national opposition figure for years) as a threat to their power and thus suspended his leadership plunging the cooperative into further chaos.

However, it is the theoretical foundations of this book where the author flounders. We are confronted with two key conceptual questions. The first relates to the genealogical roots of morality (selfless, honest and pro-social values in business) and the second relates to whether neoliberalism/capitalism has any moral underpinnings. In some sort of enlightenment discourse, Wiegratz notes that neoliberal reforms were about ‘freeing or disentangling the actors and arenas of social interaction from established (traditional) moral norms and connotations, imposing a single rationality – self-interest, profit maximisation, efficiency -and making the self-interest principle the overriding or hegemonic moral code in the economy’ (p. 37). He then continues that ‘a core pillar of the moral code of the neoliberal doctrine is: maximise your own self-interest (utility) in every situation and you will maximise social welfare…do not in principal consider pro-social moral obligations, or other-than-gain imperative. Your moral obligation is gain maximisation’ (p. 38). Firstly, Wiegratz does little to explain the genealogy of morals. Why do people act fairly to each other? Where does the yearning for fairness come from? The author does not engage in a Nietzschean theorisation of “good” and “bad,” which might have told us that morality is a function of power and thus a form of violence itself, after all these terms often seek to protect specific interests. [Friedrich Nietzsche in On the Genealogy of Morals argues that the common sense we attach to notions such as “evil” “good” and “bad” have a specific history of power behind them, and what constitutes “good” or “bad” tended to shift depending on the time, and actors and interests behind the naming]. If the author had done this, then we would have reached a point where neoliberalism is believed to produce its own morality and thereby judge it on its own terms. Instead, we are left to read and judge neoliberal reforms through terms such as “pro-social,” “emotion-less,” or “emotion-full” “friendly,” and “honest” which seem to belong to an entirely different moral history or tradition. Even when the author seems to read from Adam Smith’s Theory of Moral Sentiments, which would be more appropriate to his moral-economy project, as Smith claims an innate natural inclination towards fairness common in human beings, the treatment is rather superficial and secondary. One would then think that Wiegratz has an alternative genealogy, which however remains unsaid.  Secondly, I am not convinced that capitalism produces its own morality in the definitions that Wiegratz offers above. Interestingly, Wiegratz concludes that morality and neoliberalism cannot co-exist. He writes:

for an economic actor to operate, in part at least on the basis of other-regard, empathy, fairness and honesty, or to build trust and long-term relationships requires stepping out of the neo-liberal conceptual and ontological realm and engage with or commit to other NVOPs [norms, values, orientations, and practices]. This entails a different agency, reflexivity and action logic that is beyond the neoliberal model. It is difficult to imagine how such NVOPs could be incorporated into the neoliberal actor model without analytical and practical tensions, and neo-liberal reform losing its distinct imperative and character (p. 48).

This section introduces us to the author’s view of a difficult marriage between morals and neoliberalism, which he characterises as ‘difficult to imagine’ –  a mild way of saying impossible. Besides these theoretical gripes, this book is extensive on the violence that structural adjustment and selfish politicians have meted out on African peasant communities as they forced them into fully-fledged market economies that they were unsuited to.

SAPs helped undermine cooperatives across Africa (while cooperatives remained active in Western Europe and North America!), advancing a brutal wave of re-colonialization of the continent. On the downside, the book is rather repetitive. In several cases, the author makes a single point in many paragraphs, using too many examples. This could read like an attempt to give the point more backing, but sometimes feels like some sort of uncertainty on the part of the author. It also can make reading the book tiresome. The book would also have benefited from a decent editor, who could also have checked local facts and spelling as certain names of places and persons were mixed up.

Yusuf Serunkuma Kajura is a graduate candidate at Makerere University Institute of Social Research (MISR) and a 2015 African Studies Association Presidential Fellow. Yusuf has a Bachelor’s degree in Literature and English Language and an MPhil in Social Studies [Cultural Studies] both from Makerere University. In his free time, Yusuf moonlights as a columnist in Uganda’s newspapers, and as a playwright. In 2014, Fountain Publishers published his first play, The Snake Farmers and it was received with critical acclaim in Uganda, Kenya and Rwanda.

Featured Photograph: Billboard of a campaign to prevent corruption in Nouakchott (Mauritania) in 2007.



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