Taha Akyol, currently a columnist in center-right KARAR daily is one of the leading intellectuals in the conservative establishment. His analysis about Turkey’s slow socio-economic development is brilliant. PA Turkey translated a condensed version of the article for the English speaking world.
This is our translation
I use the concept of “rationalization” a lot in this column. Mehmet Şimşek’s observation, “We have no choice but to return to rational ground”, showed how important the issue is. Imagine a society that supported the move away from rationality until the economy almost hit the wall… Emotions such as arrogance and excitement, admiration and hostility can intensely suppress rationality in our thoughts.
I say it again and again; There must be serious reasons why we cannot reach the level of Japan even in hundred years and South Korea in fifty, and why we are struggling in the “middle income trap”? Our late master, world renown sociologist Şerif Mardin pointed to, “philosophical obstacles in our minds.” As one of the reasons.
CELAL BAYAR 1935
The late historian Zafer Toprak is one of our first class scholars researching our contemporary history. He views history with an eye that defends Ataturk’s reforms. However, with the research he devoted his life to, he revealed forgotten but extremely important information and documents about our brief Constitutional Monarchy and Republic history in his books. The 4 volumes “Modern Türkiye History”, which he could not publish before his death, were published by Folkart Publishing House in December 2023.
The second volume of the work is called “Republic and Economy” has a very telling anecdote about the Ataturk regime struggles to “rationalize” the society. The-then Minister of Economy Celal Bayar spoke as follows at the congress of the Chambers of Commerce and Industry on May 22, 1935: “Rationalization is the most important issue on which we will work in the coming years. What we mean by this word is this: We need a technical, economical, measurable business model and the necessary organization that will spare us from all kinds of archaic customs and waste of time, money, labor and material”.
OTTOMANS’ INTEREST RATE DILEMMA
The “Muslim entrepreneur class”, which started to be formed during the reign of Sultan Abdulhamid and the progressive Union and Progress Movement, had reached the stage of internalizing these concepts and doing business with such a mentality even during the early Republic period; i.e. the Ataturk Years (1923-1938). The biggest problem was loan availability and high interest rates. While banking and finance began to develop in Europe in the 13th century, Ottoman charitable foundations gave loans charging interest, but this didn’t lead to capital accumulation they did not collect deposits with interest. In other words, usury was very common in the Ottoman Era.
Bayar, whom Atatürk called “our greatest economist”, explained that the ban on usury stifled the economy.
Both our and world history reveal that economic progress and urbanization are more effective in the rationalization of societies than rhetoric and publications praising reason and science. Peasants and traditional tradesmen live by repeating the customary modes of production that have prevailed for thousands of years. The concepts listed by Bayar as “rational business” are not needed at all.
As urbanization, trade and industry begin to develop, the needs for calculations, books, expert knowledge and professional staff come into play, and rationalization in the modern sense begins. Old fatwas (Islamic bulls) are no longer enough to regulate business activity.
THE MOST EXPENSIVE LESSON WE LEARNED
The fact that urbanization started in our country after 1950 is the main reason for the delay in social rationalization. Our acquaintance with the world economy began with Turgut Özal in the 1980s. Today, we have an entrepreneur class with the sophistication to compete with the world, but due to this arrested development, it is not strong enough. Look at the giant companies in the world and look at us. Our companies could not resist Erdogan going beyond the “rational basis”, as Şimşek put it. They remained silent fearing political reprisal, as economic policy morphed into irrationality.
Due to the inadequacies of our democracy and the weakness of public institutions, the Central Bank also lost its independence and instead of fighting inflation, it “followed orders” and fueled inflation.
The conservative business world, which gained power from Erdogan regime, was content at first, but rising and chronic inflation that eventually began to hurt them too. Having to persistently follow the policy of “high interest is the cause of inflation” for ten years and then having to steer the economy to rationality by increasing the interest rate to 50 percent is the most painful, most expensive, but I hope the most effective “rationalization” lesson.
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