› Production depends on agriculture and government revenues mainly came from agriculture

› The end of land acquisition in the 17th century

› Heavy foreign borrowing 1858: The Ottoman-Crimea War 1881: Düyun-u Umumiye (First established in 1877) 1929: First debt payment 1954: All debts were covered

› No independent monetary or fiscal policy Ottoman Bank (Osmanlı Bankası) (1856)

Right to issue banknotes Completely owned by British and French

entrepreneurs

› Galata Bankers (Minorities)

› Turkish Agricultural Bank (Türkiye Ziraat Bankası) (1888)

› Discovery of the New World and the rise of Mercantalist policies

› Industrial Revolution 1838 Trade Agreement with UK

› Lack of ability of transformation to the new mode of production

Utilisation of surplus Division of labor:

Agriculture: Turks Industry and Trade: Foreign capital and minorities

Privileges to foreigners and minorities Heavy foreign borrowing

› No independent monetary or fiscal policy

16th – 18th centuries The material resources of society (the

means) were to be used to promote the enrichment and well-being of the nation-state (the end)

The period was characterized by the presence of great trading nations. Power building took the form of exploration, discovery and colonization.

Philipp Wilhelm von Hornick’s nine principal rules:

1. Every inch of a country’s soil be utilized for agriculture, mining or manufacturing

2. All raw materials found in a country be used in domestic manufacture, since finished goods have a higher value than raw materials

3. A large, working population is encouraged

4. All export of gold and silver be prohibited and all domestic money be kept in circulation

5. All imports of foreign goods be discouraged as much as possible

6. Where certain imports are indispensable they be obtained at first hand, in exchange for other domestic goods instead of gold and silver

7. As much as possible, imports be confined to raw materials that can be finished at home

8. Opportunities be constantly sought for selling a country’s surplus manufactures to foreigners, so far as necessary, for gold and silver

9. No importation be allowed if such goods are sufficiently and suitably supplied at home

Land belonged to the state Fief System: Has, Zeamet, Tımar 1858: Land Law (private ownership) 1863: Credit cooperatives for

agriculture 1888: Establishment of Ziraat Bank Uneven distribution of land

Production was done by foreigners French capital dominated the industry Production is mainly exported Mining Laws: 1861, 1869, 1906 Shares in production (%):

› Year Turks Minorities Foreigners 1902 43 7 50

1911 20 5 75

Small scale production units Production for domestic market Only consumption goods are produced Guild cooperation Customs:

› Domestic: 8%› UK: 5%

1913: The law for encouraging industry Industry was located in the west

› İstanbul: 55%› İzmir: 22%› Others : 23%

Sectoral Distribution:› Food: 70.3%› Textile: 11.9%› Leather: 8.3%

Importance given to Railways

Maritime lines: Controlled by foreigners

Policy: To restrict exports and to encourage imports

Trade deficits Main trading partner: UK Exports: Agricultural products (cotton,

tobacco, hazelnut), mining products Imports: Textile, clothing, food (sugar,

flour)

Capitulations:› 1453: First capitulation to Genoese› 1914: Abolished by Ottoman Empire› 1920: Sevr Agreement (new capitulations)› 1923: Lousanne Agreement (abolished)

Growth Rate: 2%

1913:› Agriculture: 47%› Industry: 12%› Services: 28%› Others: 13%

Literacy Rate: 10 %

Non-homogenous education system› Minority schools› Modern schools› Religious schools