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10. Following an economic strategy of mixed economy

In doing the above we shall follow an economic strategy of mixed economy which means allowing the majority of economic activities to be carried out by private entrepreneurs—small, medium and even high—with the state, however, taking part in selected fulcrum-like sectors that the state can use to guide the economy as a whole towards the desired goals. In this way we are rejecting the laissez faire of pure capitalism—which is particularly injurious to backward economies juxtaposed with developed capitalist economies whereby the operative law is the law of osmosis. We are also rejecting the option of overnationalisation of the socialist economies that burdens the state at the micro-economic level. These nationalised projects have got a tendency towards inefficiency due to the managers having no personal interest in the projects and without adequate ideological conviction to rely on. In any case some of the economic units—e.g. retail shops—are too small to be managed by managers, cashiers, shop assistants with auditors coming along to check on the former. Some of the so called socialist countries in Africa have made a lot of errors in this respect. With the benefit of hind-sight we should be able to see that the state should have confined itself to the crucial sectors and let private enterprise deal with the rest. In our opinion the crucial sectors that should be handled by the state to enable it to guide the economy as a whole are: import—export licensing with very clearly defined priorities, intended to enhance the productive capacity of the economy rather than making the economy into a dumping ground for consumer trash, paid for with convertible currency from developed countries; commercial banking so as to control the loaning policy and, of course, the Central Bank to control the monetary policy; the ownership of certain basic industries like iron and steel as well as the construction of the physical infrastructure (education, health etc). These, with the

Added powers of the state to control taxation, wages and prices, in addition to specific state investments in selected fields on the basis of profitability (e.g. hotels under UDC) could enable the state to guide the economy without bogging itself down with the heavy responsibility of ensuring the profitability of thousands of micro-economic units. It should not be forgotten that the state would also be controlling the overall economic planning of the country. For those who argue that there should be a free flow of resources between backward countries and advanced economies without controlling, for instance, the use of foreign exchange, it should be recognised that such are simply enemies of Africa and do not merit serious attention. The present indebtedness of South America amounting to US dollars 350,000,000,000m is the living example of that line. In fact the crucial element to be tackled at this juncture is not so much the fair distribution of the little that there is through socialising economic units, but rather the restructuring that can, at last, allow wealth to be generated and retained in the national economy. This can be done through the rectification of the phenomenon of unequal exchange between our economy and the advanced economies, and the building of an independent, integrated,-sustaining national economy. We ought not to care whether this is done by capitalist or socialist means, as long as it is done because, either way, Uganda is bound to benefit.

In any case either of them is a modern system much superior to the somewhat pre-capitalist or quasi-capitalist modes of production we have currently. Hence, we think that a combination of capitalist and socialist means in the form of a mixed economy may be more appropriate for this purpose than opting for either socialist or capitalist methods. A mixed economy will combine the best of both worlds. Several European countries—including Britain and the Scandinavian countries—have benefitted from this strategy to some extent. Even some of the socialist countries like Hungary and Yugoslavia, have gravitated towards something similar and their economic performance has improved—although, of course, the emphasis of either is different; one group is using socialist methods to serve capitalism while the other group uses capitalist methods to serve socialism. In our case we would be using capitalist and socialist techniques to overcome terrible backwardness and start the development of our productive forces (science, technology and managerial skills). While the current debate between capitalism and socialism is a valid one, our problems are somewhat antecedental to this debate. We are aware of the revolutionary content of capitalism in its youth when it ushered in the concept of profit, the balance sheet and reward for enterprises rather than reward for merely belonging to the aristocratic classes. This ushered in efficiency and rationality at the micro-economic level which was, however, not reflected at the macro-economic level. This discrepancy matured in the 20th century with the depression of the 1930's. Thereafter, the capitalist economies of Western Europe had to borrow an element of social control, through the state and other interventions, from socialism. At that juncture socialism came in with micro-economic planning—thereby introducing rationality at the level of the whole economy. At the micro-economic level, however, there has been a tendency of the inefficiency, wastage etc.

Some socialist economies, as already pointed out, have already gravitated towards giving private enterprises a longer leash than previously. In view of these historical experiences, and in view of our extremely backward levels of development, a synthesis of the two modes—in the form of a mixed economy—may be most appropriate for Uganda.
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