Transcript PSIR426 - FBE Moodle

The Foundation of the Turkish Republic
W1&2
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The Ottoman Empire started experiencing
serious
economic
and
politico-military
problems during the 18th and 19th century.
Politico-military problems: It started losing
massive territories in the prolonged wars with
the European powers ( England, France, Italy,
Greece, Russia etc) leading to massive
territorial losses that included Hungary,
Greece, the northern coasts of the Black Sea,
Crimea and other regions.
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This, in turn, encouraged indigenous
nationalist forces to rise up and put an end to
Ottoman rule over their territories. By the
19th century the Ottoman state faced serious
challenge from every corner of the Empire:
Serbia, Egypt, North Africa, Eastern Anatolia,
and elsewhere. This contraction of the Empire
exacerbated the crises in the Ottoman
economy and polity and further contributed
to its decline.
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Economic Problems:
Another reason that
contributed to the decline of the Ottoman Empire
was its economic relations with the Western
Europe that consequently began to have adverse
effects on local, small-scale Ottoman industry.
The Empire’s trade relations with Europe began
to intensify in the 1830s.
At the end of 1830s, the imports made from
England and France had doubled. This tendency
had been entrenched with the signing of the
Anglo-Turkish Commercial Convention of 1838
which abolished the state’s protective tariffs and
monopolies
and
extended
extra-territorial
privileges to all foreign traders.
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These
developments
marked
the
end
of
industrialization via the manufacturing sector in
Ottoman Turkey. First the cotton, then silk industry
faced a crisis. The Empire which lost its traditional
industry also failed to establish a modern industry
due to free trade policy. The Empire was instead
relegated to raw materials production such as cotton,
tobacco and raisins geared to the needs of the
European-dominated world economy.
Thus, instead of using its agriculture as a base for
internal industrial expansion, as to some extent been
the case up to 19th century, the Ottoman Empire, with
its native industry destroyed, was transformed into an
agrarian reserve of the expending European capitalist
economies.
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*Following the WWI which destroyed her, the
Ottoman Empire signed the Armistice of Mudros
on 31 October 1918.
The Entente Powers comprised a military alliance
of France, Great Britain and Russia. With Britain's
entry into the war, her colonies and dominions
abroad variously offered military and financial
assistance, and included Australia,
Canada,
India, New Zealand and the Union of South Africa,
Japan. Later joined Japan US and Italy.
Central Powers: another alliance of great powers:
Austria-Hungary and Germany. By the close of
the war the Central Powers had been extended to
incorporate Bulgaria and Turkey.
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Armistice of Mudros contained provisions such as
the military occupation of the straits, control by
the Entente of all railway and telegraph lines,
demobilization and disarmament of the Ottoman
troops, except for small contingents needed to
keep law and order.
Soon, Turkey would be occupied by French,
Italians, English and the Greeks according to
article seven of the Armistice which stipulated
that the Entente had the right to occupy the
Ottoman Empire if it considered being under
threat.
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The sultan’s government signed the Treaty of
Sevres on 10 August 1920. This treaty not only
carved up Anatolia but the restrictions it placed
on the new state made it into a virtual
condominium of Britain, France and Italy.
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In the meanwhile, a group of officers had
started fleeing to Anatolia, where they would
start to organise the War of Independence.
In April 1920, those members of the Ottoman
national assembly who had escaped arrest by
the allies in Istanbul had come together in
Ankara and declared that national sovereignty
was vested in them, the Grand National
Assembly (GNA) of Turkey. Under the
leadership of Mustafa Kemal, they determined
to resist the dismemberment of any part of
what now constitutes the Turkish Republic.
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1) Political power in the Empire rested in the
throne of the central authority, the Padisah or
Sultan, and his administrative deputy called
the Sadrazam or Grand Vezir. Below this, and
under the direct control of the Sultan, there
existed the large and organized Ottoman
Palace bureaucracy.
It was this political
structure that clashed- with nationalist forces
led by the Kemalist petty bourgeoisie in 20s.
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2)The dominant economic interests during this period
were made up of a group of big landowners (the
ayans, derebeys, and ağas) in the countryside and
comprador capitalists (a native steward or agent for a
foreign business-) of mainly minority ethnic origin in
major urban centres.
In 1913, the traditional landed gentry (the ayans and
derebeys), constituted 5% of the farmer families and
owned 65% of the arable land. As a result of their vast
economic power in the countryside, the big
landowners were able to monopolize local political
power and, through links with the rural Islamic clergy,
imposed their social and cultural domination over the
peasantry. Exploitation of peasantry became the
principal source for accumulating wealth.
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3) Largely involved in import-export trade
and domestic marketing tied to European
imports, the minority commercial interestscomprised of Greek and Armenian merchants
and primarily concentrated in large urban
centres such as Istanbul and Izmir- made up
the basis of the Empire’s comprador
bourgeoisie.
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4) The dependent structure of the Ottoman economy during the 19th century,
coupled with its tributary position in the Mediterranean economy
encompassing the period since the early 16th century, did not permit the
development of large-scale local industry. Consequently, there never
developed a full-blown class of industrialists that would resemble the
classical European national industrial bourgeoisie. While a limited expansion
did take place in small-scale manufacturing and processing industries, it was
largely the minority comprador bourgeoisie that, in addition to its traditional
place in commerce, extended into the ownership and control of these
industries and prospered under the terms of the Empire’s dependent
economy.
The small numbers of ethnic Turkish firms however, had interests that were
diametrically opposed to those of the imperialist and minority bourgeoisies.
Although weak in numbers and economic strength, the political aspirations
of Turkish industrialists coincided with and took expression in the leadership
of the Nationalist forces as their economic position began to deteriorate with
the further expansion into industry and trade of the metropolitan and
minority bourgeoisies. It was this deterioration in the position of the Turkish
national bourgeoisie that later drove its members on the side of the
Nationalist leadership in the struggle against the victorious powers of the
WWI.
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6) Given the limited size and restricted nature of both national and
foreign-owned local industry, the size of the working class was also
small. Moreover, the ethnic composition of the working class was highly
fragmented and did not allow for the development of working-class
unity.
This split within the working class reached its peak during the liberation
struggles when non-Turkish workers identified with and joined the ranks
of their own ethnic groups and fought against the forces of Turkish
national liberation. Isolated as they were in Istanbul and Izmir- the main
centres of industry which came under the control of foreign occupation
forces during the liberation struggle- Turkish workers were cut off from
Anatolia and could not contribute directly to or affect the outcome of the
national liberation struggle. Thus several factors- mainly the numerical
inferiority, ethnic heterogeneity, and geographical isolation of the
Ottoman working class- held back the workers from direct participation
in the National Front, which otherwise might well have influenced the
direction and outcome of the liberation struggle.
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7) In the Turkish countryside, the majority of the rural population
consisted of small-holding peasants. Dispersed throughout the
Anatolian interior and engaged in subsistence agriculture, the
Turkish peasantry was under the direct control of big landowners
who exercised economic, political, and cultural domination over
them through links with the rural Islamic clergy. This disparity in
wealth and economic position did not, however, lead to the
radicalization of the small-holding peasantry; neither did it
ensure its voluntary participation in the national liberation
struggle.
Although objectively occupying a revolutionary position in terms
of its class interests, the Turkish peasantry, given the enormous
economic and political power and socio-religious control
exercised over them by the dominant eşraf, was unable to
develop revolutionary class consciousness and transform the
agrarian structure through united class action.
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8) Finally, in addition to the small-holding peasantry, rural Turkey also
contained a class of small merchants and local artisans, who, together with
doctors, lawyers, teachers and locally based government officials, made up
the core of the Anatolian petty bourgeoisie.(‘Petty bourgeoisie’ is defined
here as those who own and/or control means of production, but employ no
wage labourers. The self-employed (or small shopkeepers, artisans, and
landed peasants) have traditionally been viewed as constituting the core of
this class).
The petty bourgeoisie is an intermediate class in that it is caught between
the dominant ruling class(es) and the working class, with both of which it has
certain shared characteristics. Like the big bourgeoisie and landlords, it owns
or controls means of production, but, like the working class, it is directly
engaged in the production process, hence it provides its own labour power.
Thus, it is neither an exploiting class nor an exploited one. It was in this
intermediate group that the Kemalist forces first found their crucial support
in laying the basis of their national campaign among the masses of the
Anatolian peasantry. Dominated and controlled by imperialism and the
minority bourgeoisie in the urban centres and oppressed under the rule of
the ayan, the derebey and the esraf in the countryside, the Ottoman petty
bourgeoisie was highly fragmented, weak and lacked an organizational base
to consolidate its power to serve its own class interests in national politics.
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Among the different strata of this class, it was
the sections associated with the various
bureaucratic organisations of the state, above all,
junior army officers and nationalist intellectuals
and journalists, who emerged as the top
leadership of the Kemalist movement.
*While the big landowners and the clergy had
collaborated with the Palace and imperialist
occupation forces in their areas, the compradors
in the cities were demanding the protection of
big states such as France, England or Germany.
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*The Kemalist leadership hoped to find its mass base in
the Anatolian peasantry. Yet, the peasants had a distrust
of and passive resistance to the Nationalist forces and they
refused to collaborate. Their deep-seated religious beliefs
led them to view their interests more closely with those of
landlords and Islamic clergy (din adamlari).
The two major classes of the day; Anatolian eşraf
(landlord- clergy coalition) and the merchant capital in the
cities had collaborated with the Palace and imperialist
occupation forces and demanded the protection of big
states such as France, England or Germany. Yet, the eşraf
would soon change their position in response to attacks by
the Greeks in the Aegean region and become actively
involved in the Liberation Struggle.
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*Consequently, it became clear that it was only through
the intermediary of the landlords and the Islamic clergy
that the peasantry would be involved in the national
struggle. The alliance between the National Leadership and
the eşraf was first affirmed at the Erzurum Congress on
July 23, 1919, and continued with the creation of the GNA
in 1920. It was only after the consolidation of this alliance
in the GNA that the National Front began to receive the
gradual support of the Turkish peasantry.
This alliance would have long-term consequences that
would mark the Republican Turkey. Due to this alliance,
the feudal structure that prevailed in the Eastern part of
Turkey would remain intact, and although there have been
various attempts, a land reform that would change the
property relations could not be implemented.
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The verdict of the battlefield was formalised by a peace treaty
signed at Lausanne (Switzerland) in 23 July 1923. The Treaty
of Lausanne (signed between the British Empire, France, Italy,
Japan, Greece, Romania and the Serb-Croat-Slovene state on
one part and Turkey, on the other part) replaced the Treaty of
Sevres that partitioned the Ottoman Empire (1920).
The treaty led to international recognition of the sovereignty
of the new Republic of Turkey as the successor state of the
defunct Ottoman Empire. Turkey recovered full sovereign
rights over all its territory. No reparations were exacted. In
return, Turkey renounced all claims on former Ottoman
territories outside its new boundaries and undertook to
guarantee the rights of its minorities. A separate agreement
between Greece and Turkey provided for the compulsory
exchange of minorities.
.
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Even before the signing of Treaty of
Lausanne, the victories on the battlefield
swept the Kemalists into a position of
unchallengeable national authority. In
November
1922
the
Sultanate
was
abolished and in October 1923, Turkey was
formally declared a Republic. The new order
was
confirmed
in
the
republican
constitution, adopted by the Grand National
Assembly on 20 April 1924.
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The Republic faced a depressing legacy from the past. The
Turkey of 1923 was an extremely underdeveloped country,
saddled with inherited debts and the destructive effects of
continuous wars between 1912 and 1922.
The economy was predominantly based on the agriculture
sector, yet this sector was underdeveloped due to a
number of reasons. The availability of a large and cheap
labour pool minimized the introduction of new production
techniques.
The expansion and improvement in
agricultural production was hindered by the rural tax
system (tithe) which had an overburdening effect on the
small- holding peasantry and the landlords’ role as usurer
that kept the peasants in perpetual debt-bondage.
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The industrial sector was also extremely weak. There was
an expansion of industrial activity during the war but
recession
followed
defeat.
The
economy
was
uncoordinated and there was no sense of a national
market.
The communications between the cereal producing
regions of Anatolia and the consuming cities were so
primitive that foreign grain was cheaper from grain from
Anatolia. This created an odd situation which the cost of
transporting wheat from central Anatolia to Istanbul was
more expensive than the cost of transporting wheat from
New York to Istanbul. Hence it seemed more rational to
feed the population of Istanbul from Iowa than Ankara and
Konya and let the Anatolian peasant engage in subsistence
farming.
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The founders of the Republic were also left to
cope with the damaging effects on the economy
of the almost continuous wars between 1912 and
1922. Although there had been relatively little
industry to destroy, damage in the cities was
severe, it was reckoned in 1921 that one-third of
İstanbul had been burnt down during the war and
the city of İzmir had been devastated by fire after
the entry of the nationalist army in 1922. The
railway system had also been damaged during
the fighting.
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Within these circumstances, the Kemalist policy makers tried
to implement a policy to encourage private industry.
In this period, the state’s role in the economy began to
expand as it entered various branches of local industry to
develop the infrastructure, establish banks, and regulate
commerce.
The state acquired full ownership in sugar, glass, leather,
cotton yarn, textile industry, petroleum, explosives, paper,
salt, cement industries, railways, major seaport facilities in
İstanbul, İzmir, Trabzon and Mersin and a number of
enterprises in mining and extractive industries.
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The state established several major industrial and
commercial banks such as the İş Bankası (Business
Bank), Sanayi ve Maadin Bankası (The Industrial and
Mineral Bank) and Ziraat Bankası (The Agricultural Bank)
and passed many special laws granting major
concessions to private capital.
İş Bankası
thus became one of the very first statepromoted ‘private’ enterprises set up as a model for
future capitalist development in Turkey. The Bank has
been instrumental in encouraging the expansion of
native industry and played a key role in the financing of
many businesses, like the Alpullu Sugar Plant and the
Paşabahce Glass and Bottle Factory.
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The İzmir Economic Congress, which convened from
February 17 to March 4, 1923, marks the beginning
of the active role of the new Kemalist state in the
formulation of economic policy- a policy which was
to
guide
the
post-independence
economic
development of Turkey along a capitalist path.
The Congress has become an economic forum where
the representatives of the industrialists, the
merchants, farmers and workers came together and
discussed about the potential economic policy
problems that the new regime might confront. The
Congress also aimed to give a message to the
Western European countries that a transition from
Liberalism to Communism is out of question.
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The Congress was carefully controlled and
directed by the Turkish compradors (a native
steward or agent for a foreign business) of
Istanbul and the big landowners of Anatolia.
The open collaboration of large landowners
with other dominant classes represented
there was instrumental in suppressing the
interests of workers and peasants and in
safeguarding their firm hold over land,
blocking any attempts to open the question
of land reform.
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Decisions were taken on a number of issues in
the Congress: monopolization would not be
permitted, foreign capital -as long as it is
respectful to national sovereignity- would not be
objected, customs protection would be brought,
farmers, industrialists and merchants would be
provided credits and the workers rights would be
recognised.
The Congress ended with the
determination
to
invigorate
private
entrepreurship
by
credits,
education,
transportation, infrastructure and technical
services being provided by the government .
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Hence state intervention in favour of local
capitalists accelerated throughout the late
1920s in line with the Kemalist leadership’s
hope of building up the economic base of the
nation through state encouragement of local
accumulation by the local bourgeoisie.
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In addition to the direct role played by various state
banks and credit institutions in encouraging the
expansion of national industry, many special laws
were passed by the Grand National Assembly
granting major concessions to private capital. Law for
the Encouragement of Industry (Teşvik i Sanayi
Kanunu) was passed in 1927.
The Law provided tax exemptions for new and
expanding industrial firms. Enterprises benefiting
from this law were to be granted up to ten hectares
of land free by the government, were to be exempted
from taxes on land and immovable property and
profits, as well as import duties on machinery and
construction materials which were not produced in
Turkey.
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Parallel to the process of development and
expansion of native industry, a number of
important steps were also taken by the state in
this period to accelerate the process of capital
accumulation in the countryside. Among these
were the abolition of the Aşar (tithe tax) in 1925.
and the distribution of land to landless peasants
through laws passed in 1927 and 1929.
As a result, by 1934 a total of 17, 785, 787 acres
of land had been distributed to those without
land. However, all this land was state-owned
public land, as the state was as yet reluctant to
confront the powerful landlords by expropriating
‘their’ land.
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Although this process has contributed in the
private proprietorship of the land becoming
widespread, it has not led to big
landownership. Small-scale and middle-scale
production units are predominant in this era.
Although it is possible to depict production
for market in the regions having access to
transportation and especially in industrial
plants, subsistence farming is predominant in
Turkey in 1920s.
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Although a thorough transformation of the
agrarian structure was not carried out during
these initial years the state did attempt to
increase production by establishing experimental
stations, agricultural schools, and modern
demonstration (state-owned) farms.
Improved seed was provided and instructors were
sent to villages to show new ways of cultivation.
Compulsory agricultural training was instituted
for soldiers during their military service.
This was a ‘productionist’, rather than ‘redistributionist’ strategy.
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The landlords’ control over the mechanism of state
aid to the agricultural sector did, nevertheless,
expand the growth of output in some sectors of the
rural economy. The production rate increased by 58
% in agriculture.
And while this growth was sufficient to divert the
state’s attention to the other areas of the national
economy, the increased revenues accruing to the
landlords further strengthened their material position
in relation to other propertied classes such that the
possibility of a genuine agrarian reform was to
become very remote after the 1920s. In the
meanwhile, the economic conditions of the peasants
would further deteriorate by the sharp decrease in
production prices as a result of the 1929 Depression.
Despite the extensive efforts of the state to aid the
development of Turkish industry and agriculture
during the 1920s, capitalist development failed to
achieve the results envisaged by the state. There
were a number of obstacles to the industrialization of
the country during this period. Four of them are
worth to mention:
 1) the resistance of landlords in areas where their
interests were threatened by industrial expansion;
 2) the failure of the expected transformation of
Turkish compradors into industrial capitalists;
 3) the unfavourable terms of the Treaty of Lausanne
 4) the 1929 World Depression.
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Internal reaction, led by the landlord-clergy
coalition, viewed the industrialization efforts of
the state as part of the process of modernization
which challenged their control over the
countryside.
Resistance against these efforts succeeded in
blocking the expansion of indigenous industry
into the rural interior, leaving the control over
vast sections of Anatolia exclusively in the hands
of big landowners and the eşraf.
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2-The second major obstacle to the growth and
expansion of local industry was the reluctance of
the comprador bourgeoisie to expand into the
industrial sector which the state consistently
encouraged through credit, grants and numerous
important concessions.
Rather than employ the loans, credits, supplies
etc. provided by the state to expand production,
most of them simply failed to take advantage of
these concessions. The profits made by the big
merchants were generally employed in usury and
commerce, not industrial production.
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3-The third major obstacle to the development of industry
was Turkey’s adherence to the provisions of the Treaty of
Lausanne for a period of five years (1924-1929) during
which the country continued to recognise the economic
concessions granted to foreign firms by the Ottoman
Empire prior to 1914. It was further agreed that Turkey
would keep her customs duties to the level specified by
the Ottoman customs tariff of September 1, 1916 which
meant that the state was unable to formulate a customs
policy until 1929.
*Another article of the Treaty of Lausanne necessitated the
Turkish government paying a portion of the Ottoman
State’s debts. Turkey was expected to pay the two third of
the debt. The first installment of this payment which was
15 million golden liras led Turkey to a crisis in money and
foreign exchange.
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1930s Turkey faced its most serious crisis
since the establishment of the Republic. It
was a crisis which had both economic and
political dimensions, and domestic as well as
international roots. The 1929 Depression
constituted the economic dimension of the
crisis, which the government tried to
overcome by resorting to statist-protectionist
measures.
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These were the years which the Republican
People’s Party tried to define its ideological
stance in terms of the ‘Six Arrows’ adopted at
its 1931 Congress. The six arrows of the RPP
are republicanism, nationalism, populism,
etatism,
secularism
and
revolutionism/reformism.
The six arrows
were later incorporated into the Turkish
Constitution in 1937.
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*Secularism and nationalism had been among the
distinctive characteristics of Young Turk ideology
at least since 1913. During the 1930s both were
carried to extremes, secularism being interpreted
not only as a separation of state and religion, but
as the removal of religion, from public life and
the establishment of complete state control over
remaining religious institutions.
An extreme form of nationalism, with the
attendant creation of historical myths, was used
as the prime instrument in building of a new
national identity, and as such was intended to
take the place of religion in many respects.
Republicanism had been a basic
principle since 1923. It basically made
an emphasis on Turkey being a
Republic rather than a sultanate.
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Populism meant the notion, first emphasized
during the First World War, of national
solidarity and putting the interests of the
whole nation before those of any group or
class.
In a negative sense it entailed a denial of
class interests (according to Kemalism,
Turkey did not have classes in the European
sense) and a prohibition of political activity
based on class (and thus of all socialist or
communist activity).
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The meaning of ‘Revolutionism/ Reformism’
was disputed in the party, the moderates
interpreting it as reformism, the radicals as
revolutionism. The radical interpretation
became official in the 1930s though the
liberals continued to oppose this definition,
maintaining that the state was committed to
only reform.
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Etatism (statism), on the other hand, was a new concept
and aroused immediate controversy. The debate between
the RPP and the opposition party created by the regime in
1930, the Liberal Republican Party, was almost exclusively
about economic policy, with the opposition advocating
liberalism and the RPP under İnönü demanding a greater
role for the state in the economy.
When ‘statism’ was officially adopted as the new economic
policy and one of the pillars of Kemalist ideology, it was
never clearly defined. It was certainly not a form of
socialism: private ownership remained the basis of
economic life. Rather, it meant that the state took over
responsibility for creating and running industries for which
the private sector could not accumulate the necessary
capital.
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The first attempt of forming an opposition party
had come in 1924 and the Progressive
Republican Party (Terakkiperver Cumhuriyet
Fırkası) was established. It was led by Kazım
Karabekir.
On domestic policy, the party supported a liberal
democracy, but was blamed by the government
for being the vehicle of Islamists in attempting
subvert the newly-established government.
After Mustafa Kemal blamed Karabekir of the
Sheikh Said Rebellion and the assassination
attempt made on himself, the party was closed
on 5 June 1925 by the government.
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In 1929, opposition became visible again.
This time, it received some encouragement
from Mustafa Kemal himself and a Liberal
party under the former Prime Minister Fethi
Okyar appeared in 1930 which was named as
the Liberal Republican Party (Serbest Terakki
Fırkası).
The party advocated a liberal economic
policy and encouragement of foreign
investment, as well as freedom of speech.
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Yet, the “opposition” Free Party- which was
intended as a device to promote constructive
criticism and to discourage laxness in the
Republican People’s Party- met the same fate as
Progressive Republican Party after only a few
months when it threatened to get out of hand in
1930.
In October 1930, local elections were held and
the Liberal Republican Party managed to win 30
of the 512 councils. Even though this was only a
small minority of the seats, the governing party
was surprised and alarmed.
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Then, in an assembly debate directly after the
elections, Fethi accused the governing party of
large-scale irregularities and electoral fraud. This
in turn led to fierce attacks on the FRP, in which
it and its leader were accused of high treason.
Mustafa Kemal now told Fethi privately that he
could no longer remain impartial in this
atmosphere. Consequently, Okyar wrote to the
Minister of the Interior on 17 November 1930,
announcing that he had decided to dissolve the
Liberal Republican Party.
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1930s witnessed a number of important
reforms
that
mainly
aimed
at
the
secularization of the social life and giving
Turkey “a more European image” .
Examples: Change in dress codes, adoption
of Latin alphabet, women’s being given the
right to elect and be elected
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Yet, this period was not only marked with important
reforms in the social sphere but repressive labour
policies as well. The government’s main instrument for
the control of working conditions was a Labour Law
passed in 1936.
The law provided for a maximum 48-hour week,
government inspection of working conditions, and
restrictions on the employment of women and children
under sixteen. A serious defect of the law, however, was
that its provisions were not applicable to establishments
with less than ten workers: this excluded around threequarters of the industrial workforce, who were still
employed in small workshops. Moreover, trades unions,
strikes and lockouts were banned, and labour disputes
were to be settled by compulsory arbitration.
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In terms of the economic policies pursued
these were the years which, the Turkish state
took an even more direct role in the national
economy to counteract the impact of the
1929 Depression.
The consolidation of the state’s role in the
national industrialization process in the early
1930s occurred after Turkey had gained
control over its customs and established a
protectionist customs policy designed to
encourage domestic production.

While immediate measures were taken to
protect the Turkish economy in the early
1930s, the long-term objective of the
Kemalist leadership was to establish and
manage state-owned enterprises that would
form the basis of the nation’s industrial
economy.

In line with the state’s plans for importsubstituting industrialization, a series of tariff
laws were passed and put into effect in the
early 1930s in order to reduce the volume of
imports and, with the increased export of
agricultural goods, to reduce or eliminate the
annual trade deficits.

As a result of these policies, the proportion of
industry within GNP raised from 10% in 1924
to 16.5% in 1938 . At the end of this era,
Turkey started producing the “three whites”;
flour, sugar and textile and the “three blacks”;
coal, iron and fuel oil which led to savings in
foreign currency.


In the latter part of the decade significant
changes began to take place in the structure of
Turkish imports. There was a decline in the level
of the consumption goods imported whereas the
level of capital goods started to increase.
Consequently, Turkey had a trade surplus each
year (with the exception of 1938) until the mid1940s.
This surplus helped increase the country’s
foreign exchange earnings and with it the
balance of payments improved considerably.


The state putting a major stress on the rapid development
of indigenous industry throughout the 1930s led to a
relative neglect of the agriculture. Consequently, the
industrialization drive of this period significantly limited
the development of Turkish agriculture, relative to
industrial expansion. The agricultural sector, given the
resistance throughout Anatolia of powerful landlords and
eşraf, never became successfully incorporated into the Five
Year Plans and remained on the periphery of the
industrialization process.
(yet the agricultural sector did make a substantial
contribution to the national economy through increased
production which was achieved through a limited degree
of modernization of the productive forces).


In this period, it is not possible to observe any
legal arrangements related to land ownership.
In
other
words,
the
state’s
moderate
accomplishments in agriculture during this
period were not achieved through the break-up
of predominantly feudal relations in the
countryside and the latter’s transformation into
capitalist agriculture. What agricultural progress
was made was in spite of the continuing
overwhelming power and dominance of the
landlord class.


The class structure of Turkey had remained
intact at the end of the decade. In this sense,
there still was no industrial bourgeoisie
worthy of the name, and the social relations
in the countryside were left untouched.
The growing working class was brought
under control through repressive legislation.
The traditionally dominant classes; i.e the
large landed interests and merchant capital,
after being initially hit by the depression, had
been reinstated through statism.

In the course of World War II, İnönü
succeeded in preserving his country’s
neutrality, but was faced with the constant
risk that either Germany or Russia might
invade. After 1943, moreover, he came under
strong pressures from the allies to join the
war by opening a second front against
Germany in South-east Europe.

In the event, Turkey severed economic
relations with Germany in August 1944 and
formally declared war on Germany and Japan
in 22 February 1945, but only to establish her
status as a founder member of the United
Nations. She thus emerged from the war
without having fired a shot.


The eruption of the WWII in 1939 represents the decline of
the statist policies in Turkey. Due to the war economy, the
Second Five Year Industrial Development Plan could not be
executed and the economic investments came to a halt.
One million men had to join the army which led to a labour
shortage in production units and about 50% decline in the
wheat production. This era is marked by the continuous
decline of the agricultural and industrial production (with
the exception of 1942).
The most crucial problem that marked the war years was
the existence of the profiteers that benefited from the
goods that went on to the black market. The producers
and big merchants have made enormous gains in this way.

Yet these years were not only marked by
profiteering but effective state intervention that
aimed to tackle these unjust gains as well. Soil
Produce Tax (Toprak Mahsülleri Vergisi), Capital
Tax (Varlık Vergisi) and Law for Peasants to
Acquire Land (Çiftçiyi Topraklandırma Kanunu)
can be given as examples to these initiatives on
the part of the CHP government. Although, it
should be added, they could not be implemented
due to the opposition of dominant forces within
the society.

Soil Produce Tax which was passed in 1944
mainly targeted the agricultural profits which
tended to rise in the war years. 10% of the
gross production would be collected. This tax
has been abolished in 1946.


The Capital Tax has been passed in November 1942.
In theory, it had the laudable aim of soaking up part
of the windfall profits gained by speculators in the
inflationary wartime conditions, and was to be
applied on a non-repetitive basis to wealthy farmers,
businessmen, property owners and corporations.
In practice, assessments were made according to
supposed wealth and ability to pay by local
committees who were likely to use the most arbitrary
criteria. It was to be collected only once and there
was no way to object it. Those who could not pay it
would be forced to go to labour camps in Aşkale, in
Eastern Anatolia.

The 70% of those obliged to pay the Capital
Tax was from Istanbul, mostly from the
minority groups. This led to the MuslimTurkish businessmen appropriating a part of
the wealth of the minorities. Around 1400
people who could not pay the required
amount were forced to go to the camps in
Aşkale .


The Capital Tax was withdrawn in March 1944,
under the influence of criticism from Britain and
the United States, but by then irreparable
damage to the confidence of the minorities in the
Turkish state had been done.
Hence the Muslim and Non- Muslim families who
was forced to pay this tax started to organise
against the Republican People’s Party which
eventually led to its being replaced by the newly
established Democrat Party.


Besides the Capital Tax and Soil Produce Tax which
targeted war profits, another development which
troubled the powerful landlords was the Land Reform
Bill which was introduced by the Republican People’s
Party in 1945. In the January of that year the
government submitted the Çiftçiyi Topraklandırma ve
Çiftçi Ocakları Kurma Kanunu (Law for Peasants to
Acquire Land and the Formation of Peasant Cooperatives) to Parliament.
Debate on the bill lasted five months and by the time
it was finally passed and became law, it had been
substantially weakened and had lost its revolutionary
character .

Nevertheless, even its final form, the bill
retained some progressive aspects, and
continued to pose a threat to the big
landlords. The basic aims of the law, as
stated in the opening paragraph of the final
draft:



was to provide land and means for peasants with
none or too little. The method was to grant land to
such peasants, together with twenty-year, interestfree loans for development , and other material help.
The land was to come from unused state lands,
municipal and other publicly owned land, reclaimed
land, land of unknown ownership, and land
expropriated from private individuals.
For the last-named category, all landed property in
excess of 500 dönüm (123.5 acres) would be
nationalized. Compensation would be paid on a
sliding scale, the greater area held, the lower the
rate. It would be paid in instalments, over twenty
years.

This
last
provision
(related
to
the
expropriation of all landed property in excess
of 500 donum) posed great threat to the
landlords. The passage of the law, even in its
severely distorted form, raised the struggle
between the landlords (with their allies, the
rural and urban commercial interests and
local Islamic clergy) and the Kemalist
Bureucracy to its highest level since the early
1920s.

The
confrontation
between
the
two
contending groups ended in favour of the
landlords who further weakened the Land
Reform Bill. Thus, at the close of the 1940s,
the nationalization limit was raised from 500
to 5000 dönüms. The distribution began in
1947 with state lands and pious foundations,
and by 1950 only a few thousand dönüms
had been distributed.


As a result, in this process, the CHP not only
antagonized wealthy groups due to the laws
issued during war time but it also antagonized
workers
through practices such as labour
obligation and the restriction of the wages.
In short, at the end of 1945, CHP had lost the
legitimacy it enjoyed due to the economic and
political progress of the first fifteen years of the
Republic. At the end of the war, there was an
expectation of change on the part of all the
classes in Turkey.