What is socio-economic transformation? It is the evolution of society from lower forms of social organizations to higher forms.  The universes (the earth, the sun, the stars and the galaxies) have been in existence for about 14 billion years. It is believed that the galaxies came from an explosion of dense nucleus of elementary particles of gas, a process known as the big bang.  Atoms were later formed as the gas expanded and cooled.  Our galaxy, the Milky Way, is comprised of billions of suns/stars including our sun, as well as planets: such as Mercury, Venus, Earth, Mars, Jupiter, Saturn, Uranus, Neptune, etc, rotating around the galactic center. There are other galaxies such as Andromeda, Magellan, Black eye, Cigar, Comet and many more.  The word ‘galaxy’ is derived from the Greek word for ‘milk’ and is the reason that the band of light and stars across the sky is called ‘the Milky Way.’

It is thought that our own planet, earth, solidified about 4.5 billion years ago. Unicellular creatures started emerging about 3.8 to 4 billion years ago.  Multi-cellular creatures started emerging about 700 or 800 years ago.  About four million years ago, the human beings started evolving from apes.  This was following the last glacial period ─ the ice-age.  The first human-like creatures evolved in East Africa.  Why?  It was because it was open grass land.  In the grass land, walking on four legs (Quadra-pedal) obstructed vision and could not allow somebody to see far.  That is how gradually, some of the apes became bipedal (two-legged). Bipedalism is one factor that  distinguishes man from other mammals.  The other two are a hand that grips things and shapes tools and a large brain.  The average human brain for men is 1273.6cc and 1131.1cc for women.  It has been growing from 400cc, 4 million years ago to the present size of 1350cc.  Since 3100 BC, these human groups started living in civilized societies. The early civilizations were in Egypt, Mesopotamia, Babylon, etc, around the years 3000BC and 3500BC respectively.  In all those millennia, the primer for social change is the advancement of science and technology.  The earliest example of technological revolution was the invention of fire around 350,000 years BC.  

With the invention of fire, the human beings could now move from being tree-dwellers and become cave dwellers because they could light the inside of caves and warm the caves.  Karl Marx pointed out that the human society had gone through five social systems:  primitive communalism, the slave state, feudalism, capitalism and socialism.

Initially, society was classless ─ all people were equal ─ hunters or gatherers.  As time went on, differences in society emerged.  As you saw above, slave owners and slaves emerged.  Later on, the societies evolved into serfs and feudal land-lords.  After the middle-ages in Europe, the feudal society metamorphosed into a capitalist society, culminating in the French Revolution of 1789.  The French society of 1789 is always a very good example of social evolution up to that time, reflecting what was going on, at different paces, in other European societies.  By that time, France was a four-class society:

1. The feudalists (the Aristocrats);
2. The middle-class (the bourgeoisie);
3. The working class (the Proletariat); and
4. The peasants.

Each of these social classes was maintained in different ways.  The feudalists sustained themselves by taking rent on land (busuulu and nvujjo) from the peasants. The bourgeoisie sustained themselves by taking the difference between the cost price and the selling price of a good or a service which is called profit.  This concept of profit was revolutionary because the previous  societies were not very clear on this point. 

Even today, you can find some African societies that engage in activities that are not costed.  They cannot, therefore, know whether what they are doing is profitable or not.  How much did the concept of profit help in the process of wealth-creation and wealth expansion?  All modern thinkers should reflect on this.  Islamic Banking is, for instance, apparently, against the concept of profit (riba).  They call it haram (abominable ─ unholy or whatever).  Is this revulsion against profit correct?  Our think-tanks should reflect over these issues; we should not just go on without a historical compass.  The Banyankore had both a credit policy and an insurance policy.  Credit had two elements: Omukwaaato and Obunaku.  Banyankore regarded with revulsion the idea of selling female cattle.  They only sold or slaughtered either bulls or infertile cattle (enguumba or emberera).  If, therefore, one had an urgent need of cattle for slaughter or sale and lacked one himself, he could approach another person with one of the two offers.  Either he would offer omukwaato or obunaku.  With omukwaato, you would give the lender a female producing cow in exchange for an appropriate slaughter or sale one.  The omukwaato cow would stay with the lender until it produced and weaned a female calf (echukire). Then the omukwaato cow would redeem itself (okwechungura).  If it produced bull calves in the meantime, they would, on weaning, belong to the borrower.  The lender would, however, take the milk for all the time until the termination of the deal.  With the obunaku, the borrower would take a slaughter or sale cow (enguumba, etc) or bull (endaaho) from the lender.  After a stipulated time, say three years, the borrower would give a female cow (a weaner or a mature cow) to the lender.

The solution for social insurance was to run to the aid of somebody that had experienced calamity on account of the death of one’s cattle.  This was called okushumbuusha. Your friends would kushumbuusha you. After some years, you would pay back to each of them a female weaner and the debt would be over.  There was also empaano.  This was like entandikwa (initial capital) for the poor beneficiary vis-avis a richer person or it could simply be an exchange of gifts among rich equals.  As you can see, all these were the “Islamic Banking” of the Banyankore.  They were all the pre-capitalist forms of credit among the Banyankore.

I have spent  time on the issue of profit because I consider it crucial to understand the instruments the different societies used to generate and expand wealth (Obugaiga, Lonyo-Luo, Abar-Ateso, Lonyi-Lugbara).

The fourth social class during the time of the French Revolution were the peasants as already pointed out above.  These depended on their sweat minus what the land-lord took as rent (busuulu and nvujjo).

As capitalism developed, between 1400AD and 1800AD, another ideology also came up.  This was the ideology of socialism.  This was the ideology of the working class distilled by the intellectual Karl Marx, Engels, etc and, later, Lenin, Mao Tse Tung and others. On account of the concentration of wealth in Europe in fewer and fewer hands, the vast majority of the people came to the point of where they owned nothing ─ no land, no property of any type (house, hotel) and no business (shipping, banking, transport, etc). As Hunt R. Margaret put it in the Oxford Handbook of Modern European History, 1350-1750 Vol.1 on page 344 when she interpreted Karl Marx’s opinion on the Communist Manifesto of 1848, “they owned nothing except their labour.” The exact quotation goes as follows:

“In the early modern and modern periods, according to Karl Marx, the ‘bourgeois’ or ‘capitalist’ class owned the means of production (capital to invest, raw materials, the factories, the machines) while ‘working class’ people owned nothing except their own labour which they found themselves having to sell for a pittance to capitalists.”

The communists, therefore, believed that the State (the Government), acting on behalf of all the people should take the “commanding heights” of the economy (land, banking, etc), otherwise capitalism, since it ever concentrated wealth into fewer and fewer hands, would come into crisis and would stop being rational (as it was at the beginning of its onset) and become, not only irrational, but also, a fetter on the greater productivity of society.

In 1917, exactly 128 years after the French Capitalist Revolution, a Socialist Revolution took place in Tsarist Russia.  Rapidly, the Soviet Union emerged as a very powerful State until it got into crisis in 1990.  In 1949, the Soviet Union was joined by the People’s Republic of China as another communist country.

We the African revolutionaries, have been studying all these phenomena and we have avoided the bigotry of some circles and pointed out to all and sundry that both capitalism and socialism are modern systems.  They can help to advance society to higher levels of production of wealth and affluence.  Capitalism uses the selfishness of people, driven by the profit motive, to aggressively and efficiently create and expand wealth.  Since, however, capitalism concentrates on private profitability in a single enterprise (a factory, a hotel, a business), they can easily forget social profitability (collective gain).

A bar owner may get very good profits from selling alcohol.  Society as a whole, however, may lose on account of the increased alcoholism in society.  Private profitability vs social profitability. You could also describe this as the contradiction between micro-profitability vs macro profitability for the whole economy.  We have never accepted the shallow social science of the Western countries that fetishized capitalism and elevated that useful social system, but one with limitations and weaknesses nevertheless, to the high pedestal of a deity (God-like).  The position that capitalism was the only useful social system in the modern era, was wrong.  The dramatic rise of the Chinese economy, in terms of GDP size, to the second biggest economy in the world today is proof of the correctness of our position.  By mixing both the capitalist and socialist stimuli to the Chinese economy, the Chinese Communist Party has lifted hundreds of millions of Chinese out of poverty and registered gigantic steps for the growth and transformation of the economy.

In conclusion and simply put, socio-economic transformation means discarding negative old traditions, going from manual, non-skilled labour to skilled and intellectual labour. We must move from feudal relationships and practice middle-class relationships and practices. The peasant class will be phased out.  A peasant should not produce another peasant. A peasant should produce a skilled worker, a middle-class entrepreneur, a professional able to market his/her professionalism or an intellectual. In that way, our society will undergo socio-economic transformation. 

By H.E. Yoweri Kaguta Museveni

President of The Republic of Uganda.