Academic journal article African Studies Quarterly

"Earning among Friends": Business Practices and Creed among Petty Traders in Tanzania

Academic journal article African Studies Quarterly

"Earning among Friends": Business Practices and Creed among Petty Traders in Tanzania

Article excerpt

Abstract: This paper analyzes how petty street traders called Machinga have created unique credit transactions in response to the political and socio-economical transformation after the economic liberalization of Tanzania. The credit transaction described in this paper is called Mali Kauli and is conducted by middlemen and micro-scale retailers. In this paper, I will discuss how newly created urban social relationships and knowledge of urban life, both function to sustain this unstable credit transaction, which balances social norms with economic profit. In conclusion, I will insist that the norms of reciprocity are not incongruous with economic rationality. The flexible "moral economy" does not require a rigid community or set of conventional norms. It can take effect in fellowships in which people trick each other, yet at the same time build mutual trust. The Mali Kauli transaction is a creative practice of the Machinga.

INTRODUCTION

The economic liberalization of Tanzania since the mid-1980s has brought a rapid influx of imports to Tanzania. These imports, including second-hand clothes, have opened new economic opportunities for the urban poor and vitalized the small-scale commercial sector. Machinga are the street traders and hawkers selling these imported goods. The term Machinga is derived from the two English words: 'marching' and 'guys'. [1] The numbers of Machinga are increasing at a rapid rate. For example, Ngware estimated their number in Dar es Salaam at 85,000 in 1995. [2] Although no official figures are available for the present, one can assume that this number has increased several fold in the past ten years.

The purpose of this study is to examine the social networks and the historical change of the business practices of Machinga by analyzing a unique transaction called Mali Kauli in the trade of second hand clothes in Mwanza city. The Mali Kauli transaction is a unique credit transaction conducted by middlemen and micro-scale retailers. Although Mali Kauli is profitable to both kinds of merchants, its sustainability does not rest on economic benefit alone. While middlemen do enjoy economic dominance, playing the role of patrons, they build horizontal personal relationships with retailers that do not necessarily correspond to the principles of neo-classical economics.

Economic anthropologists and political scientists have investigated these personal economic relationships embedded in society, using concepts such as the "economy of affection" or "moral economy". [3] The majority of pioneering work referring to this type of economy has focused on peasant societies. They have emphasized the existence of "the norm of reciprocity" and "the right to subsistence" in such societies.

Previous urban studies in Africa have pointed to the existence of "economy of affection" or "moral economy" in the informal sector. [4] Several authors argue that entrepreneurs in the urban informal sector are caught between supporting their rural relatives while at the same time trying to make ends meet in the city. Many promising informal sector entrepreneurs cannot achieve effective capital investment and expansion of their business as they find it very hard to reject requests for assistance. [5] So not surprisingly, some studies have argued that to be successful, entrepreneurs in the informal sector should abandon their "affection" to their rural brethren or others making claims on their resources and instead create modern business relationships. [6]

Studies of moral economy call into question the validity of development as a linear process from tradition to modernity. Ueda insists on the need to study how reciprocal norms are maintained by the social logic of a moral economy, and how individual entrepreneurs manipulate both the social logic and personal needs as the situation demands. [7] In this paper, I will explore Ueda's points through an examination of Mali Kauli transactions. …

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