Tutorial 3 "European Capitalism and the Ottoman State"

"Suleiman the Magnificent", Makers of World History Vol 2 (J.Kelley Sowards, ed.)

"The Ottoman State as a World Power 1526-96" and "The Decline of the Ottoman Empire", H. Inalcik The Ottoman Empire: the classical age pp.35-52

"Imperialism and the Ottomans", Y. Armajani and T M Ricks Middle East: past and present 2nd ed., pp.153-161

After Empire, selected chapters by C Tilley, E J Hobsbawm, A J Motyl, C Keyder pp.1-44

"The Ottomans as a Great World Power", Glenn E Perry The Middle East: fourteen Islamic centuries 3rd ed., pp.101-124.

"Middle East: a peripheral area", L S Stavrianos Global Rift, pp.122-140.

[the first set of excerpts are directed towards thinking about empire and decline in general terms]

(Tilley, p.3)

Only during the last two centuries have consolidated states -- coercion-wielding organizations governing directly and rather uniformly in a series of heterogeneous and clearly bounded territories -- become the dominant state form, first in the European world, and then, by conquest and emulation, in the world as a whole.

Nor should we imagine consolidated states to have such great advantages over all other political organizations that they have rendered the others obsolete... A century from now, analysts may well treat consolidated states as ephemera, and empires as the historically dominant forms of political organization beyond a regional scale.

[He goes on to give this definition -- think about its relevance for the Ottoman Empire]

An empire is a large composite polity linked to a central power by indirect rule. The central power exercises some military and fiscal control in each major segment of its imperial domain, but tolerates the two major elements of indirect rule: (1) retention or establishment of particular, distinct compacts for the government of each segment; and (2) exercise of power through intermediaries who enjoy considerable autonomy within their own domains in return for the delivery of compliance, tribute, and military collaboration with the centre.

[Where do we fit Islam into a definition like this?]

(p.5)

To ask how empires end is like asking how rivers change their courses, how coral reefs go dead, how human lineages disappear.... If empires have over four millennia been so prevalent and yet so various, we are unlikely to derive from their histories any constants less trivial than those I have already named: that some combination of external conquest and internal defection usually brings them down.

(Motyl, p.20)

Let us being the conceptual analysis of empire by unpacking what may be its two least unacceptable defining characteristics. Most scholars would probably agree that every empire consists of something called a core and something called a periphery. And most might agree that both core and periphery, whatever they are, are situated in geographically bounded spaces inhabited by culturally differentiated elites and populations. By "culturally differentiated" I mean that core elites and populations share certain cultural characteristics and are different, with respect to these characteristics, from their counterparts in the periphery. It matters not whether these characteristics are physically real or merely imagined.

(p.22,3)

For the sake of simplicity, let us pare the concept of empire of most of its complicating baggage and, ... focus on three defining characteristics: (1) a distinct core elite and a distinct peripheral elite; (2) a distinct core population and a distinct peripheral population; and (3) a dictatorial relationship between the core elite and the peripheral elite.

This suggests a simple procedure for identifying how -- but not why -- empires rise and fall. As these three defining characteristics "make" an empire, anytime they come together in some political entity, regardless of its past or future, we can, ... assert that an empire has emerged. And anytime any entity with these three characteristics loses all or any of them, then we can just as confidently claim that an empire has disappeared. There is no reason why, logically, all three characteristics cannot come together or fall away simultaneously -- in which case utterly new entities may be said to have emerged or disappeared. There is also no reason why only one or two of these characteristics cannot appear or disappear for the entities possessing them to gain or lose the status of empire.

[To the extent that you believe this approach best/better describes the Ottomans, how would you characterize 'core' and how 'peripheral'? And what significance do you think these concepts might have for approaching the question of 'decline' or 'destabilization' of empire in this case?]

We turn now to the Ottoman State specifically:

(Keyder, pp.30,1)

Accounts of the decline and fall of the Ottoman Empire vie on an ideological battlefield, with political commitments largely determining the reasons one offers for the collapse. As the dominant versions of history were written since the end of the Great War have consciously or unwittingly adopted the perspective of the nation state, the collapse of the empire has often been viewed as the inevitable fulfillment of the destiny of a nation. Now that the nation-state has itself lost favour, however, the search has turned to accounts outside the nationalist paradigm. ...

I will show that there were two separate dynamics in the dissolution of the Ottoman Empire, the first a function of the patrimonial nature of the state [we won't go into that here], the second of national separatism, due to the Empire's confrontation with European Capitalism....

(McCarthy, p.141)

The Ottoman government did not have anything that might be called an overall economic strategy. Survival of the state, civil order and morally, the creation of a just Islamic society were the Ottoman goals Any economic activities of the government were toward those ends.

(pp.151-7)

One of the primary causes of Ottoman economic inferiority cannot be blamed on any Ottoman deficiency -- a change in trade routes from Europe to the East... While the Middle Eastern transit trade did not quickly decline after the Portuguese discoveries, it did not increase as it always had. Once the Dutch and British, stronger opponents that the Portuguese, took over the trade, the Ottoman role in it was doomed.

Nor were the Ottomans at fault for another major blow to their economy, the European discovery of the Americas.... Most damaging to them was a by-product of the discoveries... inflation. Spanish conquest of South American silver mines and theft of their contents brought tremendous inflation to Europe.... The Ottomans had a fixed economic system. With government support guilds and other suppliers set fixed prices for raw materials, goods and wages. As European inflation increased, the price of raw materials outside the Empire became higher than within it. Raw materials were sucked out of the Empire, usually by illegal smuggling. Attempts to halt the smuggling led to corruption through bribery of officials...The result was both unemployment and a lack of finished goods in the market place. Eventually prices in the Empire rose to the world level, but not before great disruption to the Ottoman economy. The government reacting to the need to buy things that were more expensive than before reacted as governments often do.. they made things worse by adulterating the coinage. Reducing the amount of precious metal in coins was the equivalent of today's governments printing too many banknotes and had the same result, more inflation. This caused further disruption in business and distrust of the government. ... it can be said that the Ottomans were responsible for the inflexibility of their economic system.... Their system was based on Middle Eastern and Balkan realities, not on anticipation that America would be discovered.

(p.155)

While the Ottomans were suffering losses in even their traditional sources of national income, Western Europe was developing the economic system known as mercantilism.... it was extremely effective in encouraging the growth of European economies at the expense of economically traditional states such as the Ottomans.

European capitalism, the economic support of industrial production, had roots in the Renaissance, when banking families lent money to rulers and supported trading ventures, including the new trade with the East. By lending money at interest, the bankers increased their own fortunes and allowed entrepreneurial growth in the European economy . In the eighteenth century, banks and capitalists grown rich on the Asian and American trade were lending money to ventures all over Europe. Money was 'recycled' investing in one business, taking the proceeds from that to invest in another, all the while increasing production and riches. The Ottomans simply had no modern banks. Merchants and master craftsmen had money, but it was invested in their own endeavour or spent on personal pleasures. Commercial loans were minimal and usually short-term. Very few thought to invest in the western way. A clever Ottoman businessman might make much money, but he did not recycle it into the businesses of others especially not into new methods of manufacturing. The limited capitalism of the Ottoman Empire was extremely conservative.

As European capitalism and the economy grew, education kept pace. Education began to increase rapidly in the seventeenth and eighteenth centuries in Western Europe. Schools appeared for even some poor children in Britain. Prussia began to make elementary education compulsory in 1717. By 1800 almost 90% of the Scottish and 50% of the English males were literate. Perhaps two-thirds of French males were literate. In the Ottoman Empire, although no one knows with any certainly, it is doubtful if 10% of the population could read and write. In Europe Universities, which had been a part of European life since the middle ages, grew and expanded, educating the scientists who made the basic discoveries that allowed the creation of modern chemistry and physics, the building of modern industry. Europe had the educated men who could imagine and create new methods and the skilled engineers and workmen who could bring them to industrial fruition. The Ottomans had no universities and what elementary schools existed specialized in religious learning.... The Ottoman economy would prove to be unable to stand against European incursion (in the nineteenth century).

[Think about the above commentary, especially in relation to your understanding of Ottoman society and religion. Inalcik's comments below, although not made directly in relation to the question of 'capitalism', are equally apropos. What is the more or less unstated assumption here about what underlay the Ottoman's 'difficulties', 'conservatism' and 'backwardness'?]

(Inalcik, p.52)

While a rapidly developing and humanistic Europe was ridding itself of all forms of medievalism, the Ottoman Empire clung ever more zealously to the traditional forms of Near-eastern civilization, becoming by the time of Suleyman I [the Magnificent] when these reached their full perfection, self-satisfied, inward-looking and closed to outside influences. Even if the Ottomans had throughout their history borrowed a number of discoveries in technology, medicine and finance, they adopted them only for military or other purely practical purposes. They never fully broke away from the values and outlook of near-eastern culture, sanctified by the sharia, and never wished to understand the mentality that had created European implements and methods. As early as the fifteenth century there had been some European observers who sought to describe objectively the Ottoman state, religion and culture, while the Ottomans, convinced of their own religious and political superiority, closed their eyes to the outside world.

{To return to the issues of the economy... Inalcik, below, links some of these larger changes to internal difficulties (see also Tutorial A on some of these questions)}

(Inalcik, pp.49-51)

In the mid-sixteenth century Mexican silver flooded the European market, causing huge price increases, and in the 1580s, this situation was repeated in the Ottoman Empire, where gold was cheaper in relation to silver. These relatively low gold prices encouraged the export of European silver to the empire, to such an extent that in 1584 it was reported that 'one of the main items of trade going to Turkey are Spanish reals sent by the chestful'. European silver coins inundated the Ottoman market, and within a short time, prices doubled. Fixed income groups such as timar-holding sipahis [cavalrymen], kapi kulus [the 'state slaves'] or those who derived their incomes from vakifs [property given over to support the religious establishments and in turn those supported by them] were suddenly impoverished. Sipahis abandoned their timars rather than go on long campaigns which they found too costly, and the Janissary corps in the capital mutinied more and more often. Bribery and misappropriates increased among state officials, soldiers and quadis. The state sought to offset rocketing Treasury expenses by debasing and diminishing the akce, but these panic measures only worsened the situation.

The situation was exacerbated by the opening of hostilities with Austria in 1593, a war motivated partly by the desire to rid the capital of the mutinous Janissaries by sending them on campaign. But the war lasted far longer than was anticipated, and military and naval expenditure caused a huge and permanent deficit in the state budget. The government increased long-standing taxes but revenue was still insufficient. Taxes which had previously been raised only as extraordinary levies called avaries were increased and converted into regular, annual taxes, payable in cash. The sum which was to be met by the extraordinary levy was divided among the peoples of the empire, who for taxation purposes were separated into units. In 1576 each unit was assessed at 50, in 1600 at 280 akces. Money taxes became a principal source of state revenue, a development which revolutionized the tax system. The commutation of taxes paid in kind for taxes paid in cash was a progressive step, but taxation was a heavy burden on the peoples of the empire especially on its Christian subjects, and discontent was widespread.

[Although supposedly a 'progressive step', in what ways would the commutation of taxes paid in kind -- eg. produce, animals -- to those paid in money, affect different groups of people?]

(Armajani and Ricks, pp.157,8)

In addition to being out of date, the Ottoman institutions had become corrupt. The provincial and local governorships, which in previous times were given in lieu of service, were now for sale to the highest bidder. As long as the governor, or pasha, sent the annual revenue agreed upon to Istanbul, the sultan did not care how the money was obtained. The pashalik (governorship) therefore, was the objective of ambitious men in the empire. The facts that it could only be obtained by cash and that cash was scarce limited the number of buyers. Those who could borrowed money from Greek, Armenian or Jewish money lenders and literally mortgaged their pashalik at high interest. In order to insure payment, often the moneylender appointed his agent as secretary of the pasha. the secretaries were more merciless than the pashas. They extorted enough from the helpless peasants and merchants to insure income for the sultan, the pasha, the moneylender and themselves.

Moreover, the economy of the empire declined. The financing of the wars resulted in general inflations. The villages were depopulated in favour of cities and towns, where there were not enough jobs for everyone. The guilds, which formed the backbone of the Ottoman craft industry, had become so entrenched and rigid that they could no longer compete in the international market.

More destructive to the economy than internal disorders were the events in Europe. Trade routes had shifted. With the discovery of new ocean routes and progress in Shipbuilding, European trade, which had been most active in the Mediterranean, moved to the Persian Gulf for a few decades and from there to East Asia. With the increased number of manufacturing centres in Europe, the demand for the handmade products of the Ottomans slackened. Furthermore, the flow of silver and gold from the New World shifted the centre of finance from the Mediterranean coastal cities to northern and central Europe. In all this, the Ottoman trade suffered and the merchants of the empire, even if they had been free from corruption, would not have been able to compete with the corporations and cartels that had been established in the West. Notwithstanding all this the Ottoman Empire lived on.

(McCarthy, p.158)

Until the beginning of the nineteenth century, the Ottoman balance of trade was till slightly in their favour. Silks, spices and the other goods of the exotic East were still so desired in Europe that exporting them could balance the importation of tin, garments, watches and the other goods that the Ottomans bought from the Europeans. Without the machinery that the Industrial Revolution was about to provide, the Europeans could not turn out goods much faster than could the Ottomans. However all was prepared for the final act. The Europeans, particularly the British and French, had built up the economies and transport systems that would support the tremendous increase of inexpensive goods that the Industrial Revolution would produce. The Ottoman economy would prove to be unable to stand against European incursion.

[It will take some time to sort out the stands of 'cause and consequence' suggested in the above readings. Ultimately, we are trying to understand where the dynamics are being generated from and what historians think the responses should have been. What is interesting about McCarthy is the suggested -- in this text and the rest of his chapter -- that the Empire has not YET decline but is rather being 'destabilized' and made vulnerable for the economic 'attack' of the nineteenth century Industrial Revolution. What do you make of that interpretation in light of the other material here and in the readings? Compare it with Stavrianos, below.]

(Stavrianos,pp.129-40)

What happened to the Ottoman empire from the seventeenth century onward was the global norm, and represented the inevitable repercussion of that fateful global exception -- the rise and expansion of modern capitalist Western civilization. The only peculiar or distinctive feature of the Ottoman experience was its timing. It was the first of the Asian civilizations to face the problem of 'decline' relative to the West because it was adjacent to the West and therefore most vulnerable to its expansionism, whether intellectual, political, economic or military.

(Armajanis and Ricks, p.158)

It must be noted that Europe alone was not the cause of the downfall of the Ottoman Empire. The disintegration had already begun, and the empire would have fallen apart because of its own weakness. European countries happened to be there to pick up the pieces. Had it not been for the rivalry of European nations, the Ottoman Empire would not have lasted the next 200 years. Some of the learned men in the Ottoman Empire saw the handwriting on the wall and gave warning, but no one paid any attention to them.

(p.158)

The Ottoman system would have fallen of its own weight... had it not been for the fact that the European nations gave the tottering empire enough blood transfusions to keep it alive. The essence of what in European history is called the "Eastern Question" was the Western inability to divide the property once the sick man dies. No single European power was strong enough to subdue the others and annex the empire. Meanwhile, each was fearful lest another power take the advantage.... As soon as one country or any combination of countries got the upper hand, the rest came to aid the Ottomans until the 'balance' was restored.

(Stavrianos, p,138,9)

[citing other historians...] During the second half of the sixteenth century ... European commerce, sustained by strong commercial organization and encouraged by powerful nation-states, began to be a threat to local industry... The new European national commerce intended to sell the greatest possible quantity of goods abroad, while restricting imports of any finished products. Thus it provided no market for local Ottoman export industry. The commerce of the Levant changed to a "colonial commerce" turning Turkey into a client for the European industry which was itself to furnish only primary materials, no longer to export finished goods.

[A contemporary observation by C.F Volney}... probably the best-informed and most comprehending European traveler to visit the Middle East before the nineteenth century. In 1785 he conclude:

"Considered relatively to the Turkish empire, it may be averred, that the commerce of the Turks with Europe and India, is more detrimental than advantageous. For the articles exported being ll raw unwrought materials, the empire deprives itself of all the advantages to be derived from the labour of its own subjects. On the other hand, the commodities being imported from Europe an India, being articles of pure luxury, only serve to increase the dissipation of the rich and the servants of government, whilst, perhaps the aggravate the wretched condition of the people , and the class of cultivators.

The French ambassador in Constantinople expressed the same conclusion when in 1788 he referred to the Ottoman Empire as "one of the richest colonies of France".

[In addition to comparing Stavrianos with some of the earlier assessments, think as well about how these different scenarios of the impact of European Capitalism and Imperialism link to the internal changes occurring -- internal changes also linked to the question of 'decline'.]