Review of Jörg Wiegratz, Neoliberal Moral Economy: Capitalism, Socio-Cultural Change and Fraud in Uganda

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.

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 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 came to power in 1986, the guerrilla leader, Yoweri Museveni, issued his famous declaration, Ours is a Fundamental Change. The new president proclaimed a fresh approach on the continent, promising to redefine political ethics and politics and forge social transformation for the poor.

From this momentary highpoint, when the new government promised a radical reorientation of the country’s trajectory, Uganda 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.

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 theft 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 theft 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 animated 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.

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 increasingly on graft, corruption and fraud.

Through this period, little has been written about the ‘moral-economic’ consequences of the neo-liberal tsunami. It is into this void that Wiegratz has stepped. 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. So, the adjustment that Africa experienced 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.