Limits of economic modernization: smuggling versus monopolies in modern Turkey


METİNSOY M.

Middle Eastern Studies, vol.60, no.3, pp.464-482, 2024 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 60 Issue: 3
  • Publication Date: 2024
  • Doi Number: 10.1080/00263206.2023.2204429
  • Journal Name: Middle Eastern Studies
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, IBZ Online, International Bibliography of Social Sciences, Periodicals Index Online, Geobase, Historical Abstracts, Index Islamicus, Jewish Studies Source, Linguistic Bibliography, MLA - Modern Language Association Database, PAIS International, Political Science Complete, Public Affairs Index, Social services abstracts, Sociological abstracts, Worldwide Political Science Abstracts
  • Page Numbers: pp.464-482
  • Keywords: informal economy, monopolies, smuggling, social resistance, taxation, Turkish modernization
  • Istanbul University Affiliated: Yes

Abstract

Monopolies constituted one of the main institutions to control the economy from the Ottoman Empire to the Republic of Turkey. Over time, monopolies’ roles changed from revenue sources for the sultans’ treasuries to assigning foreign debts to debtors, creating a Muslim-Turkish bourgeoisie, structuring property relations by commercializing the economy and finally generating revenues for modernization projects. The new Turkish state also used monopolies to raise funds for its radical modernization and state-building projects. This article examines how low-income consumers, producers and traders coped with monopolies via smuggling during the first two decades of the Republic. It argues that most of what was called smuggling were economic survival methods and the continuation of the practices that had a very long pedigree among low-income people to cope with the high prices of monopoly products due to high taxes and high monopoly profit margins. This article lays out a different interpretation of smuggling as ‘social smuggling’, which lessened the burden of the monopolies over low-income cultivators, traders and consumers. It argues that this informal economy limited the state’s extractive capacity and economic interventionism required for modernization projects.