Review: Jörg Wiegratz Neoliberal Moral Economy: Capitalism, Socio-Cultural Change and Fraud in Uganda (Rowman & Littlefield: 2016).
In some of the most powerful and engaging passages in Capital in 1867 Karl Marx wrote about the systematic fraud at the heart of market relations. Fraud, adulteration of food (a topic close to Marx’s heart) and corruption, were elements of capitalist development from the earliest days. As Marx wrote, ‘the bread of the poor’ was unlike that of the rich. Loaves purchased by the poor were frequently subjected to ‘the adulteration of the flour with alum and bone earth.’
In Jörg Wiegratz important book on Uganda, Neoliberal Moral Economy he explains, ‘markets are … not just the sites of economic transaction but of deception, intimidation, domination, humiliation … and, of course, morality’ (p.342). Wiegratz looks at the deception and fraud, that has come to dominant the moral economy of capitalism in the neoliberal period.
In this respect the case-study at the centre of the book could have been taken from any continent, and any country. Yet Wiegratz focuses on Uganda. Why? In the late 1980s and 1990s, Uganda, like much of the continent went through a dramatic, indeed tumultuous transformation. International Financial Institutions (IFI) using loans granted to Uganda, and attached to these loans reforms, to embed the country deeply within what is known as neoliberalism.
This neoliberal counter-attack was by no means limited to Uganda. The scale of devastation across Africa was equally astonishing. From the late 1970s more and more African states found their options constrained and their macroeconomic policies increasingly shaped by the conditions imposed by the IMF, the World Bank, western governments and the private banks. Among these players it was the IMF and World Bank who became the central in imposing free market economics.
For most African economies, structural adjustment included far-reaching economic and institutional reform, and various degrees of economic liberalisation – privatized national industries, removal of tariff barriers and exposing economies to international competition and the free market. Even though these reforms were sold as equitable, the costs of liberalization fell dramatically on the vulnerable. The poor and working class, particularly in rural and urban areas, felt the pain of adjustment acutely. In Wiegratz’s study it was the network of cooperatives that had protected and defended poor communities for years that faced repeated onslaught.
Uganda, despite Wiegratz’s insistence, was not necessarily the hardest hit by these reforms on the continent. The economic destruction across Africa was fairly uniform, so by the late 1990s Africans were consuming 25 per cent less than they had at independence in the early 1960s. Across the board, less was spent on education and social services then at any time since the dawn of national liberation on the continent.
With this transformation came a profound shift in morality. Moral norms, Wiegratz tells us, endorse specific patterns that we have of relating and interacting with each other – in his words, ‘such norms constitute, govern and express what is legitimate and illegitimate behaviour in the light of moral principles in a given country’ (pp. 5-6).
On the heels of the reforms and structural adjustment in Uganda, there was a parallel change in the country’s moral economy – the ways we have of relating to each other. Uganda’s relatively recent neo-liberal ‘moral economy’ resulted in large part from the intervention in the country by the IFIs that was both political-economic and social-cultural. The consequences of this neoliberal moral economy have been devastating for Uganda, as they have been for countries at the core of capitalism. Neoliberal reform, debt bondage and global economic crisis have acted increasingly on countries in the historic periphery and the developed heartlands of capitalism – in Greece, Poland, the UK, and Egypt, Chile and Indonesia for example.
The author’s case-study is Uganda because of the ‘high-intensity’ of the moral and economic interference of foreign actors. The descent was great. When the National Resistance Army, with its leftist political language and ambitions came to power in 1986, its ideological outlook was a breath of fresh air to the brutal methods of the Milton Obote regime and to some extent those of Idi Amin. The military camps recruited school and university students to fight a guerrilla war for the NRA. The guerrilla leader, Yoweri Museveni, was sworn in as President. Issuing his famous declaration, Ours is a Fundamental Change, Museveni proclaimed a new approach on the continent promising to break new frontiers and redefined political ethics and politics for the entire continent. One student radical at the time, recalls the effect of seeing Museveni deliver a speech at the Organisation of African Unity, ‘I watched the speech on television several times, especially the response Museveni got from fellow heads of states attending the summit, and practically speaking, I was hooked. Museveni seemed to offer a radical departure from what had hitherto prevailed and a new programme for transformation on the continent.’
From this momentary highpoint, when the new government promised a radical reorientation of the country’s trajectory, the country plunged very quickly into the arms of the World Bank, the International Monetary Fund and foreign governments. ‘Economic reforms and policies and the restructuring of the state’ Wiegratz writes, ‘towards a corporate, market or competition state that advances the interests of capital, played a crucial role in this regard.’ Uganda went from the promise of socialist reforms to becoming one of the most advanced market societies on the continent, and a model to other recalcitrant candidates of IFI promoted adjustment.
Right at the centre of Wiegratz detailed account is how these reforms came in tandem with an intensification of elite fraud and corruption, intensified crisis and massive inequality. The material from years of fieldwork tells a heart-breaking story of economic and social self-reliance, and pride, being systematically undermined. From fieldwork in Uganda’s Bugisu region in the east and Kampala, Wiegratz focuses on coffee and cotton farming and trading. He charts the collapse of a former morality of life and economy – to a new world, and its corresponding new morality.
The economic environment before the onset of structural adjustment was marked by cooperative unions, who regulated prices for farmers across the country, provided credit facilities and arranged warehousing. Of the 41 cooperative unions, the Bugisu Cooperative Union (BCU), is the only union that survived the onslaught of neoliberal adjustment. New practices came about because of deregulation, that trickled down to traders, who in turn dealt with farmers. Increasingly the behaviour of traders became increasingly infused with fraud, Wiegratz’s respondents note that ‘traders … middlemen and brokers engaged in … deception, intimidation … and corruption’ (pp. 121-122). Much of this new approach to business, his research shows, became a growing problem by the early 1990s.
Misery flowed into poor communities. One farmer reported the meaning of increased trickery and fraud on relations in the community, ‘Sometimes traders go to your home without your knowledge and convince your wife and children to sell them coffee … at a very low price. This has promoted thief among our children and wives… They hold the money in their hands and show it around and use it as a bait to force people to sell … men have beaten their children and wives because they sold the produce’ (p. 125).
The shift from previous business relationships to a new morality was dramatic. Previously there had been, Wiegratz argues, friendliness, mutual respect, trust, diligence, patience, honesty and discipline; there was a connection and sense of community in doing business, a belief that it benefited everyone.
Yet, widening corruption, fraud and thief emerged largely from the ruling party’s relationship with the World Bank. This new morality spiralled violently across Ugandan society. The elite, with international backing, turned its back on the politics that had aminated its early and idealistic pronouncements in 1986.
A main target for World Bank reforms were the cooperatives, which had helped ensured ethical business practice for traders and farmers for a generation. Regarded as ‘socialist’ organisations, the World Bank insisted that cooperatives needed to be dismantled to ensure proper competition, and the entry of foreign capital (often in the form of multinational coffee firms) into the country. When the evidence was not available, it had to be falsified. One state official recorded, that ‘accountants made sure that cooperatives were on a loss on paper’ (p. 99). Equipped with faked evidence the World Bank could then pressure the government to turn cooperatives into private companies.
The government were not passive observers in this process. Business interests inside the new administration saw the eradication of cooperatives as an opportunity to break into the market themselves. Though, in the universe of Bank doublespeak by the late 2000s, donors emphasised the need to strengthen farmer groups, including savings and credit cooperatives!
An interesting and subsidiary aspect of Wiegratz’s book is the resistance, sometimes open, but frequently hidden, of communities and farmers to these reforms. The very survival of the Bugisu Cooperative Union, when other cooperatives were shut-down, was a refusal to cave-in to the market. Across the continent similar strategies of survival (and resistance) of various kinds were deployed to provide a lifeline to families and communities.
The book shows, more powerfully than anything I have recently read, how these reforms were oblivious to aspects of ‘criminality’. When there was no data it was fabricated and when opposition stood in the way it was eliminated. To secure these reforms, a new moral economy had to be born. Yet Uganda was praised by the international community for being a good example of economic stability and transparency on the continent (awarded debt relief through the HIPC initiative), at the same time as their economic success was being built on graft, corruption (transparent for all who cared to look) and the exploitation of Congolese minerals through proxy warlords and foreign intervention. Despite calls for openness, anti-corruption and transparency in economic ‘governance’, western donors never questioned the export of minerals that had clearly originated from war zones – even if at the same time they decried corruption and political repression.
Through this period, the accounts of structural adjustment– voluminous, and often rich in detail – very little has been written about the ‘moral-economic’ consequences of the neo-liberal tsunami. It is into this void that Wiegratz has stepped. As he writes, ‘The restructuring, or social engineering, thus target not just economy, but also polity, society and culture, including, as this book explains, the moral order’ (p. 11).
Dreadful, crushing all before it, breaking down the flimsy structures of social and economic support on the continent, neo-liberalism ripped apart societies, but, with foreign partners, also forged a new moral being. The adjustment that Africa, and much of the world has suffered for decades, was a cultural effort at refiguring normative structures in society. The author’s impressive study helps us unpick these processes, showing how neoliberalism has implanted itself deep into the psychological body-politic of the continent.
A version of this article was posted on Progress in Political Economy website.