Capitalism in the Ottoman Balkans

In a month that has seen President Trump threaten to ‘totally destroy and obliterate the Economy of Turkey’, before performing a volte-face on the warning a matter of days later, it is perhaps timely to consider how the modern emerging market economy of Turkey has evolved from its industrial capitalist roots in the Ottoman Empire.

Capitalism in the Ottoman Balkans

Capitalism in the Ottoman Balkans: Industrialisation and Modernity in Macedonia is a new publication by Costas Lapavitsas and Pinar Cakiroglu, published by I. B. Tauris.

The Ottoman Empire underwent profound economic and social changes as it approached its end, most prominently in its Macedonian territories, where industrial capitalism began to emerge in the four decades before the First World War.  The transformation was led by the port city of Salonica, pivoting on the local Jewish community.  But the most remarkable site of change lay in the region of Mount Vermion in provincial Macedonia, where industrialisation was spearheaded by the Greek community, competing successfully with Jewish capitalists in Salonica.

Lapavitsas and Cakiroglu piece together the story of Macedonian industrialisation by using Ottoman archival materials, Greek sources, and field research.  They offer a rare and specific complement to the broader history of Ottoman economic development in the nineteenth century.  Further, their account contains general insights into the process of industrialisation under conditions of market liberalisation.

Ottoman Economic Development in Historical Perspective

To tie in with the publication of Capitalism in the Ottoman Balkans, the Department of Economics and the Turkish section of the School of Languages, Cultures and Linguistics at SOAS is hosting a special event to review the state of the art in the field of Ottoman economic development.

Ottoman Economic Development in Historical Perspective will include contributions from Professor Sevket Pamuk, Boğaziçi University, Professor Socrates Petmezas, University of Crete and Professor Costas Lapavitsas, SOAS, and will be chaired by Dr Yorgos Dedes, SOAS.

The event will take place in the Alumni Lecture Theatre, in the Paul Webley Wing of Senate House, SOAS on Wednesday 15 January, 5:00-7:00PM, and will be followed by a wine reception.

Professor Costas Lapavitsas

Costas Lapavitsas, Professor of Economics at SOAS discusses the background to his book Capitalism in the Ottoman Balkans.

Capitalism in the Ottoman Balkans

How did you come to be interested in the economics of the Ottoman period?

“I have long been interested in the economic and social history of the Ottoman Empire because of its inherent complexity and the relative lack of research into the topic.

It is a fascinating field, an integral and revealing part of European development, which unfortunately began to attract scholarly interest relatively late.

“I come from the region and I was aware from personal experience of the gaps in the historical writing on some of its most interesting aspects, particularly in the European parts of the Empire in the few decades before its final demise.  Teaching and researching at SOAS has naturally sustained my interest as well as encouraging me to consider the topic’s broader implications for development theory.  The result was this book written jointly with Pinar Cakiroglu.”

What factors led to the development of industrial capitalism in the Ottoman Empire?

“The first factor was in a sense negative: the overwhelming presence of British industry and the dominant role of British manufactured goods in the global markets of the time.  Manchester cottons destroyed the Ottoman textile industry once British gunboats had forced the Empire to open up its domestic market in the 1840s.  But some indigenous productive capacity remained and gradually became more adept at competing in wool weaving and eventually cotton spinning.

The Ottoman state played a crucial role by protecting domestic industry after the 1870s.

“By that time a class of merchant manufacturers was already in place, with international trading links and able to deploy industrial methods of production.  A class of wage workers also began to emerge both in the urban and rural areas. Industrial capitalism took root, even if relatively late and on a small scale.  The leading classes were partly drawn from the dominant Muslim component, but mostly from the indigenous minorities, the Jews, the Orthodox Christians (typically Greeks), and the Armenians.  This was a crucial element in the subsequent social and political evolution of the Empire, including its final demise.”

Where did your research take you, in order to find your source material?

“Our particular focus was on Greek Macedonia, which inevitably meant the port city of Thessaloniki but even more the provincial towns of Naoussa, Veroia, and Edhessa, where Ottoman textile industrialisation was at its strongest.  We worked on the Ottoman Archives to locate original factory applications as well as local and central authority decisions, letters by industrialists, merchants and others.  We also used Greek sources and, needless to say, covered the secondary literature fully.  But we also spent considerable time on field research, visiting sites and talking to local people who have a strong pride in the industrial heritage of their area.  This is an invaluable resource when dealing with an area of fairly recent economic history that is opaque.”

Do the economic changes which took place during the Ottoman Empire still shape the economics of Greece and Turkey today?

“The social, political, and economic legacy of the Ottoman Empire is apparent not only in Greece and Turkey but across the Balkans and the Middle East.  To some extent it is direct, most notably in the relationship of the state to both economy and society.  But it is also indirect and can be less visible, including for instance in the sense of inferiority toward Western Europe that still marks economic agents.  Naturally, a great many things have changed over the vast territories of the Ottoman Empire in the century since its demise.

At least forty nation states have emerged over that terrain and each of them has a complex relationship with its economy and society.

“But there is no escaping the historical impact of late industrial capitalist development, relatively stagnant agriculture, and energetic participation in international trade that marked the Ottoman Empire toward its end, leading to profound social and national unrest.”

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