University of Southern California Dissertations and Theses

The political economy of the state and development strategies: A case study of Turkey, 1930-1980

(USC Thesis Other)

The political economy of the state and development strategies: A case study of Turkey, 1930-1980

PDF

Download a page range

Download transcript

Copy asset link

Request this asset

Transcript (if available)

Content THE POLITICAL ECONOMY OF THE STATE AND DEVELOPMENT
STRATEGIES: A CASE STUDY OF TURKEY, 1930 - 1980
by
Halil Toros
A Dissertation Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
DOCTOR OF PHILOSOPHY
(Political Economy and Public Policy)
May 1992
Copyright 1992 Halil Toros
UMI Number: DP23394
All rights reserved
INFORMATION TO ALL USERS
The quality of this reproduction is dependent upon the quality of the copy submitted.
In the unlikely event that the author did not send a complete manuscript
and there are missing pages, these will be noted. Also, if material had to be removed,
a note will indicate the deletion.
Dissertation Publishing
UMI DP23394
Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author.
Microform Edition © ProQuest LLC.
All rights reserved. This work is protected against
unauthorized copying under Title 17, United States Code
ProQuest LLC.
789 East Eisenhower Parkway
P.O. Box 1346
Ann Arbor, Ml 48106-1346
UNIVERSITY OF SOUTHERN CALIFORNIA
T H E G RAD UATE SCHOOL
U N IV E R S IT Y PARK
LOS ANGELES, C A L IF O R N IA 90007
This dissertation, written by
HAkJJU. . . . . T . Q R . Q . S ...................
under the direction of h...i.e Dissertation
Committee, and approved by all its members,
has been presented to and accepted by The
Graduate School, in partial fulfillm ent of re
quirements for the degree of
PVi.D.
tl CL
» 92 ^
T~ 63 £ >
37 00 B
D O C TO R O F P H ILO S O P H Y
Dean of Graduate Studies
Date
DISSERTATION COMMITTEE
..
..
Chairperson
ii
to my wife and parents
ACKNOWLEDGEMENTS
1
I would like to thank all those who have helped and
encouraged me to complete my dissertation. Although it isi
.'impossible to mention all of the individuals for theirj
intellectual and emotional support, I would like to thank my
dissertation committee, Professors John E. Elliott, Nora
Hamilton, Robert Brenner, Timur Kuran and Selahattin
Imrohoroglu. In addition, I would also like to thank
'Professor Carol Thompson for her comments. !
Finally, I am particularly grateful for the continued
support given by my wife, Gulhis and my parents.
TABLE OF CONTENTS
tChapter I:
t
jChapter II:
i
i
Chapter III:
(
Chapter IV:
Chapter V:
Chapter VI:
Chapter VII:
Chapter VIII:
Chapter IX:
Bibliography
Introduction
Development of Capitalism in the
Third World: Alternative Theories
The State and Development Strategies
in the Periphery
The 1930s: Etatist Accumulation
Project
The World War II Period and
Transition to the 1950s
The 1950s: Agriculture Led
Development Strategy
State - Labor Relations Between
1950 and 1980
State - Capital Relations Between
1960 and 1980
Conclusion
Page
1
6
44;
116'
139;
158
204
274
i
373j
394
1
CHAPTER I
i
! INTRODUCTION
I •
!
i
Starting from the 1970s, a growing number of scholars
|
I in the political-economy field have become interested in thej
irole of the state in the periphery. The focus of attention
i
|has been on the newly industrializing countries (NICs) of
|Latin America, Far East Asia and Southern Europe where
I
jdevelopment of capitalism and the role of the state in this
i
process has been the most dramatic. The study of the!
political economy of these states augments our understanding'
of capitalist development in the periphery and the impact of!
i
l
this process on the internal forces of peripheral social
formations as well as the underlying relations between
political and economic forces.
The aim of this dissertation is to analyze the dynamics
of development strategies assembled and implemented in Turkey
spanning a long period between the early 1930s and 1980. This
analysis is conducted by studying the dialectic relationship
among strategies, structures and struggles at the level of
specific conjunctures adopting a "strategic-theoretical"
approach.
2
The main questions addressed in this dissertation are
first, how specific development strategies representing
distinctive logics of capital are formulated and implemented
Iin a capitalist society; and second, how these projects
t
jtransform over time and how a transition from one project to
janother is realized. These questions are attempted to be
answered by studying the totality of reciprocal relations
among the state, fractions of capital, other classes in the
society and external forces, while focusing on the dynamics
of accumulation projects. The analysis is expected to provide
some general guidelines for the conceptualization of the role
of the state in the development process of capitalist
peripheral social formations.
This dissertation is a case study of Turkey that covers
five decades between 1930 and 1980. The history of Turkey is
fertile ground to address the main questions noted above. As
the following outline suggests it provides substance for
studying the political economy of the state and development
strategies. First, it is one of the rare Third Worldj
countries without a colonial past. Second, it has seenj
i
different political regimes:a mono-party era between 1923-
1946; a two-party democracy between 1946 and 1960; a multi
party democracy between 1961 and 1980. It has also seen three
military coups , one in May, 1960, the second in March, 1971
and the last in September, 1980, which replaced elected!
3
governments with military rule or interim governments. Third,
Turkey is a newly industrialized country which has shown a
significant rate of economic growth and level of
industrialization which has also transformed dramatically the
class structure of the society. Fourth, during this
development process the national state has always played a
pivotal role. Fifth, Turkey is one of the rare examples of
'NICs with a relatively small degree of exposure to,
I ;
| international capital. Finally, and most critically, we(
I ;
observe the implementation and evolution of three distinctj
development strategies and three periods of transition fromj
one project to another between the 1930s and 1980s. These;
separate accumulation strategies, an etatist project between1
I
the early 1930s and Second World War, an agriculture-based
project during the 1950s and a project based on thej
leadership of industrial capital during the 1960s and 1970s
are studied in the following chapters.
The dissertation is divided into nine chapters. Chapter
I serves as an introduction and Chapter II surveys the
general literature in the political economy of development of
capitalism, it reviews critically different theories to
reveal the need for an alternative approach to study the role
of the state in the capitalist development process.
Chapter III develops a theoretical base for the thesis.
It, first, critically surveys the recent theoretical
4
approaches to the political economy of the state. Then, it
elaborates the theoretical structure adopted herein in order
to study the state and accumulation projects in peripheral
i
social formations. Finally, it states the main hypotheses
examined and tested in this dissertation.
Chapter IV analyzes the 1930s when an etatisti
I
development strategy was implemented by a mono-party
I
government. It shows the mechanics of this project and its;
i
impact on the society. Chapter V is the continuation of the!
Chapter IV, which studies the transitionary period during the
World War II and aftermath. It reveals the dynamics of the
transition from the etatist project to the agriculture-led
i
project of the 1950s. This period also witnessed the!
transition from a one-party regime to democracy.
Chapter VI elaborates the development strategy pursued
during the 1950s that gave priority to the agricultural
interests. It shows how this project worked and how later it
entered to a deep crisis.
Chapter VII analyzes the state-labor relation within
the context of the accumulation project implemented during
the 1960s and 1970s. It examines the role of labor in this
strategy as well as the project's impact on the working
class. This chapter also studies the history of the political
class struggle conducted by organized labor during these two
decades.
5
! Chapter VIII elaborates the mechanics of the import-
substitution strategy of the 1960s and 1970s. It shows the
basic mechanics of this project focusing on how the state
!
1
jpromoted the interests of the inward-oriented industrial
capital during this period. It also reveals the dynamics of
the deep economic crisis faced by the project during the late
1970s and how this crisis of import substitution opened the
I
jway for the next export promotion project of the 1980s.
I
1 Chapter IX is the conclusion where the hypothesis
(formulated in this dissertation is tested based on the
j
I historical analysis conducted in the former chapters.
6
CHAPTER II
DEVELOPMENT OF CAPITALISM IN THE THIRD WORLD
Alternative Theories
Introduction
The study of the development and dynamics of capitalism
has always been the central theme in the political-economy
tradition. The main effort of the scholars of political-
economy has been directed to understand this development by
studying capitalism at different levels of abstraction— world
capitalism, development of capitalist societies, transition
from feudalism to capitalism, general laws of motion of
capitalism, and so on. One general observation, however, is
that capitalist development has shown significant differences
in time and space. The most striking characteristic of the
current international economy where capitalism is considered
to be the dominant form of organization is the uneven
development of national economies. This general observation
of uneven development has given way to various theories which
attempt to explain the political-economy of development and
social change in the less developed countries.
7
Since the level of abstraction of this study is a
!concrete social formation, we have to clarify the question:
•What is meant by "development"? at this level. The concept of
1
I
'development is a multi-dimensional concept which stands for.
i
;a set of properties that refer to economic, political or
{social aspects of life (See, Lane and Ersson, 1990). In this
i
jstudy, I focus on economic development. However, the concept
of economic development can not be studied in the economic!
! . |
sphere alone and it should rather be studied in the unity ofj
l
economic, political and ideological realms. Similarly, it is|
i
not desirable to study political development merely in the
sphere of politics. (Randall and Theobald, 1985). However,
these forms of development are distinct from each other in
jterms of the elements they prioritize.
I . i
j In this context, I define "economic development" m the
i i
j classical sense as the development of basic economic(
i ,
variables such as the rates of growth of output, productivity
t
of labor,value added and exports, accompanied by basic shiftsj
in the composition of output, the pattern of employment, and
finally the distribution of this growing output.
Production and distribution are acknowledged as the two
main components of economic development. While the former is
given primacy in the orthodox classical political economy,
the latter is emphasized in the writings of the populist
school (Kitching, 1982). Use of economic development as
8
incorporating both dimensions enable us to study such
dynamics as growth, technological change, industrialization
structure and equity.
Whichever criteria one uses to evaluate Third Worldj
development, there is undeniable evidence that, some kind ofj
development did occur in recent decades. Whether one follows;
the findings of the post-imperialist approach (See pp.29 ff.)
or observes official statistics, a significant growth of
output levels, GDP/capita, manufacturing output and
improvements in social welfare can be witnessed in the Third
World. However, a more interesting observation which is
neglected by the post-imperialists is the highly differential
nature of this whole process. Annual per capita incomes,
average growth rates, sectoral compositions of GNP, shares^
of manufacturing in industry and so on all show major
differences among the nations of the periphery (Hoogvelt,
1983; Kirkpatrick et al., 1984; Petras 1984a).
Development patterns and characteristics,
industrialization and trade structures, economic and social
organizations of the so-called NICs— large Latin American
countries such as Brazil, Mexico and Argentina, South-East
Asian economies as Taiwan, Sopth Korea, Singapore, Hong-Kong,
Thailand and Southern European contries such as Portugal,
Greece and Turkey— are substantially different from a large
number of low and middle income countries which are trapped
9
in stagnation and increasing poverty. Moreover, even among
the NICs we can observe significant disparities in their
economic development processes.
The theories of social and economic development
described in this chapter intend to explain why such uneven
development occurs, why and how it prepetuates itself. My
main objective is to reveal critically how these different
theories pursue this task. Since the main goal of this thesis
is to study the development of a particular society, Turkey,
between 1930 and 1980, it recognizes that this country has
its own specific history. However, the task of a theory is
to move beyond these particularities to a higher level of
abstraction at which generalities can be established (Weeks
1985, p.5) and various theories apply different methods of
abstraction from concrete to the generalities. My focus in
this chapter is to study these theories critically in order
to be able to select an alternative approach that provides
us a better understanding of Third World reality.
An acceptable approach to the study of the development
of capitalism should be able to cope with three basic
problems that have been faced by the theories of development
(and underdevelopment). First, the main question is whether
the historical path of the capitalist development is
universal and unilinear so that it is replicated by different
societies. In other words, do the underdeveloped economies of
10
the Third World repeat the mode of capitalist development
which has been experienced by Western capitalism? In the
development literature, while some postulate a unilinear
historical evolution perceiving the problem to be solved,
others defend the impossibility of capitalist development in
order to reject this universal development in a uniform path.
In order to resolve this dilemma we have to move beyond this
"impossibilist-inevitabilist" dichotomy (Hamilton, 1983).
As corollary of this question, is there exists a
possibility of capitalist development and industrialization
in today's peripheral societies? Some theories reject the
universal, unilinear development together with the
possibility of capitalist development, seeing imperialism as
the ultimate obstacle to be eradicated for the viability ofl
development. Others, accepting uniform and repetitive
development, give room for capitalist industrialization in
the periphery with the penetration of Western capitalism.
The second problem is the identification of the
determinant factor in the historical development of the
peripheral societies. Do internal— local classes, productive
forces,etc.— or external— imperialism, multi-national
firms,etc.— forces determine their development? Or should we
avoid this dichotomy rather than embarking on such a task?
A final problem which is the main focus of this study
is the difficult task of conceptualizing the relation between
11
economics and politics where the "state" is the central
element. Most of the theories fail to formulate a coherent
and successful relation between economics and politics in
specifying the political and theorizing the state. Some
approaches isolate these two realms from each other while
others reduce one to another. Since this issue is analyzed in
the next chapter, I emphasize the first two problems in the
following sections.
In the succeeding passages, I attempt to show briefly
how the various development theories fail to confront the
aforementioned problems satisfactorily. My intention is
neither to convey a detailed critique nor to give a full
survey of these theories. I merely review these theories,
focusing on these problems, and in turn display the necessity
of an alternative approach that will confront these issues
more effectively and attempt to study the political-economy
of development and social change in the Third World focusing
on the state and development strategies.
Modernization Theory
Most contributions— whether economic, politic or
sociological— to development theory in the orthodox bourgeois
tradition has been rooted in "modernization" theory. In the
literature, modernization is usually referred to as a theory
12
(Chilcote, 1981; Hoogvelt, 1982; Randall and Theobald, 1985)
or as a model (Bodenheimer, 1971; Chilcote and Edelstein,
1986; O'Brien, 1979). Although the modernization perspective
is sometimes said to provide a "paradigm" in development
theory (Blomstrom and Hettne, 1984; Foster-Carter, 1978), R.
A. Higgott forcibly argues that the study of development or
underdevelopment is not an established science in the Kuhnian
sense since none of the schools of thought has proven its
ascendancy which would allow for a process of normal and
revolutionary science (Higgott, 1983, Chapter 1).
Modernization theory conceptualizes development as a
movement along a continuum of historical change upon which
all national societies can be situated according to various
indices, such as per capita GNP, political integration, etc.
This continuum is meant to describe a universal path of human
evolution to be travelled by all societies. The linear path
has two ideal end points which are the destination and
departure point. They are represented by the models of
modernity and non-modernity (Bernstein, 1979). On the one
end, the content of modernity is given by societies that have
already achieved it, i.e. the Western World which combines
economic development with democracies. In Almond's words "The
model of modern can only be derived from the most careful
empirical and formal analysis., of modern Western politics"
(cited by O'Brien, 1979, p.51). On the other end, there is
13
the ideal type of traditional society which is a residual
category. Traditionality is supposedly a state that has been
shared by all societies. As Hoselitz formulated it, "If there
are developed and advanced countries in the present, they
must have been at some time underdeveloped" (cited by
Fitzgerald, 1983, p.13). Third World countries are perceived
to be traditional due to several factors, values,
institutions and patterns of action where these structural
features are the causes of underdevelopment and constitute
the main obstacles in the way of modernization (Valenzuela
and Valenzuela, 1981). Consequently, for development to occur
a bridge is necessary to fill the gap between tradition and
modernity through the acquisition of the appropriate modern
pattern variables.
This progress would be achieved by the underdeveloped
world through the diffusion process which is the motor and
mechanism for bridging the gap between the two polar ends of
the model. Diffusion corresponds to two different processes:
the diffusion of Western values to the underdeveloped world
and the diffusion of modern values from the traditional
sector to the modern sector in an underdeveloped society
(Bodenheimer, 1971, p.22).
The first process refers to the hypothesis that
development would occur through external stimuli, that is a)
the diffusion of capital, technology, know-how— on
14
technological and financial levels, b) the diffusion of
markets, division of labor, modern state structures,
political parties— on institutional and organizational
levels, c) the diffusion of modern values and skills— on
individual and cultural levels (Fitzgerald, 1983, p.14).
Hence, through the transmission of modernity, by means of
these channels provided by different forms of Western
penetration to the Third World, convergence toward a uniform
and standardized Western development and culture is assumed.
The second aspect of the diffusion process refers to the
"dual-society" thesis where underdeveloped societies are
conceived in terms of a dichotomy between the modern and
traditional sectors. These sectors are separate, each having
its own history and dynamics. The traditional sector is often
associated with feudalism and the modern sector withl
capitalism. The former, being an obstacle to development,
should be replaced by progressive capitalism. Hence, within
this context the problem of underdevelopment becomes internal
to the society in question.
In economics, the most influential contribution to the
modernization perspective came from W. W. Rostow who links
the two ideal ends through a series of stages— of
development— which are expected to be followed by all
underdeveloped societies (Rostow, 1960). All Third Word
countries are perceived as waiting for a take-off and are
15
assumed to reach the final stage of high mass consumption.
In political science, W. W. Rostow's stage theory has been
adopted widely. A. F. K. Organski, for instance, suggests
political development path in four stages which corresponds
to the same notion of development where as in the case of
West, the Third World will grow from a stage of
underdevelopment to one of capitalist democracy, abundance
and mass consumption (Organski, 1965).
The earlier contributions in modernization theory
consider political development and political modernity
synonymous with political democracy based on the model of
parliamentary democracy of the Western World. Growth,
industrialization and democracy correlate with each other,
hence the former serve as the socio-economic requisites of
the latter (Lipset, 1959). The mode of unilinear development
of the continuum theory is adopted for politics. Democracy
is regarded as the highest form of political development, an
ideal end, and provides the model for the Third World which
will reach this stage as they become more advanced
economically and socially (Bill and Hardgrave, Chapter 2).
It is beyond my purpose to give a full critique of the
modernization theory which is done elsewhere (Bernstein,
1979; Bodenheimer, 1971; Chilcote and Edelstein, 1986; Frank,
1969; Higgott, 1983; Taylor, 1979). However, I think it is
essential to criticize this theory in the light of the
16
aforementioned problems in order to evaluate its
effectiveness as a "grand theory" (Corbridge, 1986) in
explaining the development of capitalism and social change
in the periphery. Regarding the first problem, the
modernization theory appears in the form of a continuum
theory, according to which development and modernization
proceed in a continuous, unilinear progress from tradition
to modernity universally, as an irreversible process. Most
of the weaknesses of this theory can be associated with such
a perception of the history.
First, the theory is teleological in the sense that the
development process has a predetermined past given by the
historical development of the West. Both economic and
political development are identified with functional
variables derived from the ideal type of the modernized
world. This leaves no room for another line of process. There
can be no alternative paths of development including
stagnation or an increasing rate of underdevelopment. This
mode of conceptualization can only lead to answers that are
already determined by the way in which questions are posed.
Consequently, it is incapable of producing any knowledge of
the object it poses other than that is given by its
definition (Bernstein, 1979, p.83). The result is
reductionism in which all attempts that embark on explaining
17
the structure and reproduction of the Third World societies
are strictly limited (Taylor, 1979, pp.91-92).
Perceiving development as an abstract,universal process
where an ideal end point is sought, the theory adopts an
ahistorical method. It is a grave mistake to overlook the
fundamental differences between the structure and
opportunities of the development processes in 19th and 20th
centuries. The latter was conditioned by an international
environment dominated by the industrialized West and
opportunities such as colonies that no longer exist
(Bodenheimer, 1971, p.13). Perception of the periphery as a
totality abstracted from the specific historical
characteristics of each society brings us to the acceptance
of a universal pattern of development. However, other
perspectives which takes into consideration different,
patterns of class formation and historical development not
only distinguish the path of evolution of the periphery from
the core but also produce disparities among the regions and
societies of the Third World.
Second, this lack of a historical model results in the
absence of a theory of social change. On the one hand, the
theory fails to identify the mechanism of social change, on
the other hand, it does not conceive of significant progress
beyond the present order of the modern society. According to
Talcott Parsons, all contemporary societies are more or less
18
modern and the future that lies ahead is now one system of
modern societies (Hoogvelt, 1982, p.119). Being unable to
account for discontinuities and retrograde phases of
development, continuum theory can not conceptualize the need
for or reality of radical departures from existing socio
economic systems (Bodenheimer, 1971, P.13). At best, the
deviations from the ideal modern society are considered as
disorders which can be studied in terms of shortfalls from a
norm. Although deviations from the determined path of
development are accepted, circularity is further exemplified
by modifying the conceptualization of polar ideals . For
instance, authoritarian regimes may be welcomed in order to
accommodate a requirement of modernity; "order-maintenance"
(Bernstein, 1979, p.82). Moreover, the extreme preoccupation
with stable and orderly change and the perception of
instability as one of the main barriers to development
results in designating any radical change such as revolution
as unnecessary.
Missing dynamics as a result of this ahistorical method
are assumed to be filled with the diffusion mechanism
discussed earlier. This diffusion mechanism, however,
obscures the relation between the two polar ends— both
core/periphery and modern/ traditional sectors in the
periphery. First, as mentioned before, diffusion serves as
an universal motor through which the underdeveloped world as
19
a single unit is expected to be developed harmoniously in a
predetermined and irreversible way by Western penetration.
This approach to the relation between external and internal
factors clearly neglects the possibility of different forms
of impact of international diffusion on the periphery, for
example underdevelopment. Second, the dualistic approach to
the modern and traditional sectors in the periphery, once
more a direct result of the continuum theory, expects a
predetermined path of articulation between these sectors. The
main conflict is between the feudal and modern sectors in the
struggle for development, assumed to be solved through
diffusion. This simple and one-sided conceptualization of
internal relations— which overlooks the essential links
between different sectors— generates a crucial hindrance to
understanding Third World development.
This brief analysis suggests that modernization theory
can not solve the three aforementioned problems
satisfactorily. The continuum theory is far from providing a
framework to understand peripheral development and social
change by assuming a unilinear path of development. The
diffusion mechanism obfuscates the impact of external factors
on the periphery with the expectation of development and
democracy everywhere. Finally, internal factors— the
traditional sector— are perceived to be the obstacle to
development and external factors are conceived to be the
20
motor of this process, while their concrete articulation is
left vague beyond the operation of the diffusion mechanism.
The above presentation of the modernization theory is
a generalized version, and I do not claim that this
perspective has no anomalies. At the end of the 1960s, the
shortcomings of the theory produced two major modifications.
One of the critiques came through reaction to political
development led by Samuel Huntington who challenged the
unilinearity of modernization theory (Huntington, 1968).
According to S. Huntington and his later extension (the
"strong government school"), at the early stages of economic
development social mobilization is highly probable, creating
increasing pressure for political participation. However,
since the existing political institutions are too rigid or
weak to accommodate such a pressure, the result is a
breakdown or decay. S. Huntington concludes that to achieve
political development, political stability must be secured
(Randall and Theobald, 1985, p.88).
The most significant factor in S. Huntington and the
strong government school is the necessity of political
institutionalization— the capacity of government to cope with
instability and crises— which is assumed to provide stability
and order. The strong government school further implies that
institutional stability is conducive to the economic growth.
They equate political development with economic growth where
21
the latter functionally requires an appropriate set of
political arrangements. Although this approach is an advance
over the modernization school— especially in handling the
first problem— in understanding the realities of the
periphery, it is far. from serving as a grand theory in the
area of development and social change in the Third World.
First, despite its rejection of unilinearity, it does not
provide a historical method to analyze the different forms
of development and social change in the periphery rigorously.
Underdevelopment is the result of political disorder and
social change relying on the relation between participation
and institutionalization (Leys, 1982, p.339). This fixation
with stability and order obscures the historical dynamics of
development and underdevelopment. Second, economics is
underemphasized or reduced to politics since economic growth
is assumed to be a residual category produced by political
stability. Third, the strong government approach fails to
take international economic dimensions into account which is
very crucial in understanding peripheral development (Randall
and Theobald, 1985, p.98). This leads to a lack of clarity
in designating the relation between internal and external
factors.
A second line of critique of the modernization school
came from the "public policy" approach (Higgott, 1983). The
modernization theory's failure to deal with policy questions
A second line of critique of the modernization school'
i
came from the "public policy" approach (Higgott, 1983). The
i
i
modernization theory's failure to deal with policy questions
which are conceived to be essential in solving the
i
development problem of the Third World gave way to this
approach in the 1970s. The result is the integration of the
|
political order concept with empirically based public policy
I
approaches to development. The tasks of modernization are
i
redefined. These tasks are no longer the reproduction of;
Western economic and political forms but rather policy
I
management by the centralized government (Higgott et al.,i
1985, p.22). Hence, the basic problems to which policy-makers
i
now address themselves are not of the grand "how does
i
development come about?" kind but rather questions like "how
i
can underdeveloped countries' decision-makers achieve optimal
solutions for their states?" (Grindle, 1980). Similarly, the1
degree of government, not the form of government, is the key
issue in the analysis of implementation of policies
(Huntington, 1968, pp.1-2). This approach has little use for
a historical study. Moreover, it is micro-oriented in the!
i
sense of focusing on the choices made by the political
j
decision-makers. j
Since the public policy perspective's concentration is
i
upon the process of policy formulation and implementation,!
development and social change is examined from a very narrow
23
economic and political environment and structuring of social
forces within societies. The lack of historical appreciation
of social and economic changes in the periphery which is
vital to a proper comprehension of the policy-making context
makes the public-policy approach merely instrumental and
technocratic (Randall and Theobald, 1985, pp.185-87).
Dependency Theory
Over the last two decades an alternative perspective has
taken shape in the writings of a number of scholars, namely
the theory of dependency or underdevelopment. The genesis of
dependency theory can be considered as a reaction to the
theories of development discussed earlier, especially to the
modernization school. A full survey and critique of the
dependency theory is beyond my purpose and is provided
elsewhere (Barone, 1985; Bernstein, 1979; Blomstrom and
Hettne, 1984; Brenner, 1977; Brewer, 1980; Corbridge, 1986;
Goodman and Redclift, 1981; Higgott, 1983; Hoogvelt, 1982;
Latin American Perspectives, 1981; Limqueco and McFarlane,
1983; O'Brien, 1975; Palma, 1978; Randall and Theobald, 1985;
Weeks, 1985; Weeks and Dore, 1979). I will focus on
dependency theory as an alternative in explaining peripheral
capitalist development and social change. Moreover, since
there are several scholars associated with the dependency
24
perspective, I will be selective, with an emphasis on the
works of A. G. Frank. However, the distinguishing features of
dependency scholars are not drastically different if the
analysis stays at the present level of generality of the
selected three problems.
As noted above, the dependency school arose as an
extended critique of the modernization perspective. First,
dependency theorists reject the unilinear evolutionary
approach in which underdevelopment is an original state from
which all societies start to progress until they reach the
other ideal state; modernity or development. A.G. Frank, in
criticizing Hoselitz, rejects the conception of
underdevelopment as an original state since the advanced
countries of today never experienced this situation, though
they may have been undeveloped (Frank, 1969). This clearly
negates the continuum approach to the development of
capitalism since the historical path of development is
perceived to be different for the West and the Third World.
Consequently, underdevelopment is not a passive ideal state
as a starting point but is a result of a historical process.
In criticizing W. W. Rostow, A. G. Frank rejects his scheme
entirely for it does not correspond to real history (Frank,
1969). The traditional stage can not be observed in today’s
world bacause traditional societies and sectors have
disintegrated with their incorporation into World capitalist
25
economy. This notion of incorporation emphasizes the
interdependence of developed and underdeveloped regions, a
relationship ignored by W. W. Rostow (Randall and Theobald,
1985, p.106). Under the present articulation of
underdeveloped countries in the World economy, these
countries can not be expected to replicate the historical
experience of the metropolis.
Within this context, dependency theory undermines the
underlying conception of dualism on two fronts. First,
dualism in the sense of the feudalism/capitalism dichotomy,
is rejected, for all Third World countries have been
capitalist since their incorporation into the World
capitalist system in the 16th century. Second, the so-called
dual societies— traditional/ modern sectors— are shown within
the metropolis-satellite structure where we observe a chain
of dependence extending from the very center of the World
economic system down to its furthest periphery, down to the
local haciendas and merchants. Hence contrary to the dualist
thesis, there is no area of the world, that is not in one way
or another incorporated into World capitalism (Randall and
Theobald, 1985, p.108).
Dependency theory also attacks the notion of
"diffusion" which is no longer seen as a motor of development
but rather as a mechanism of dependency. This mechanism
contributes to underdevelopment through several ways, the
26
main one is the extraction and transfer of surplus from
satellite to metropolis. The metropolitan appropriation of
this surplus takes place in different forms as super
exploitation of Third World labor, unequal exchange (Dore and
Weeks, 1978; Weeks, 1985), transfer pricing, debt financing,
so on. Besides the surplus extraction, Western penetration
leads to underdevelopment in the periphery by occupying Third
World markets, destroying Third World industries or creating
a social structure and class formation which do not project
a path of socio-economic evolution similar to the
metropolitan countries (Fitzgerald, 1983, p.16).
The point of departure of the theory, as introduced
above, is the observation that, contrary to the expectation
of modernization theories, the foreign penetration into
periphery created poverty and underdevelopment rather than
stable, high mass-consumption societies of the West.
Underdevelopment, hence, is a created state within the
dependent relationship of core and periphery. Frank's main
thesis is that the evolution and expansion of capitalism
produce both development and underdevelopment, which are
opposite but integral elements of this unitary process. Hence
the same historical process of capitalist world development
has been simultaneously generating both economic development
and underdevelopment (Frank, 1969, p.9).
27
The 1 1 development of underdevelopment" occurs because the
world capitalist system is characterized by a metropolis-
satellite structure. In this structure the metropolis
exploits the satellite so that the surplus is concentrated in
the metropolis and the satellite is cut off from potential
investment funds so that it ends up in stagnation (Brewer,
1980, p.161). In the process of capital accumulation, the
close ties between the metropolis and satellite and the
monopolistic structure of the whole system leads to total
subordination. This expresses itself in: the external
subordination of the satellites; dependent industrialization;
blockage of autonomous development path; a small domestic
market and unequal income distribution; etc (Leys, 1983,
p.30). This structure of dependence has been reproduced since
the 16th century, revealing the principle of "continuity in
change" where changes are not changes of substance but in the
forms of dominance and exploitation of the satellite (Brewer,
1980, p.162).
Moreover, the subjection of the satellites to the
metropolis transforms the domestic class structures. The new
commercial and productive bourgeoisie in the periphery, while
exploiting labor, remit a major part of surplus to the
metropolis. This class acts as the agent of imperialism in
the satellites and actively maintains the metropolis-
satellite structure and promotes a policy of underdevelopment
28
in the economic, social and political life of the satellites
(Barone, 1985, p.95).
The history and the structure of the underdevelopment
process is explained by the strength of the metropolis-
satellite ties and by the changing needs of the center. Since
it is the satellite status which generates underdevelopment,
then a weaker or lesser degree of metropolis-satellite
relation may reduce the rate of underdevelopment or may
create possibilities for local development. However, the
strength of these ties are entirely beyond the control of the
satellites and the weakening is transitory in nature leaving
no room for a real possibility of sustained development
within the system (Palma, 1978, p.899). When the ties are
renewed, the generation of underdevelopment is also restored.
In addition to the strength of these ties, the changing
needs of the metropolis dictate the changes in the
satellites. For instance, as the development proceeds in the
metropolis, the satellites are allowed to produce in some
areas as the metropolis production switches among sectors or
to new technologies (Barone, 1985, p.96). However, while some
development may take place in the satellites, the metropolis-
satellite hierarchy is maintained where the surplus drain
continues and consequently, the possibility of capitalist
development does not exist in the satellites.
29
This summary of the general characteristics of
dependency theory shows how it confronts the three problems
discussed earlier. First, it denies the continuum theory anJ
perceives Third World dependency as a distinct phenomenal
generated by incorporation to the world capitalist system,
which blocks the path of development experienced by the
metropolis earlier. Second, hierarchial metropolis-satellite
relations, produced by this incorporation, makes any chance
of self-sustained development impossible. Finally, the
external factors determine the history and structure of
development and social change in the satellites.
These characteristics of the theory can not be
generalized for the studies of all dependency scholars. The
work of F. H. Cardoso and E. Faletto stands as a major
exception which breaks with the mainstream line of the theory
as will be discussed briefly in the following chapter
(Cardoso and Faletto, 1979). However, at a high level of
generality, at least in their answers to our three problems,
such scholars as A. G. Frank, S. Amin, A. Emmanuel or I.
Wallerstein do not show fundamental differences. The rest are
little removed from that of A. G. Frank on the grounds of the
path of underdevelopment in the periphery, the impossibility
of capitalist development and the contention that external
factors must take precedence over internal factors in
accounts of underdevelopment. The basic differences are in
30
concepts, like core/periphery dichotomy instead of
metropolis/satellite (Wallerstein, 1974), in the mechanisms
of surplus extraction, like unequal exchange (Emmanuel, 1972)
or in the conceptualization of the structure of the
underdevelopment process, like extraverted accumulation and
disarticulation (Amin, 1976). Hence, I do not attempt to show
these works as different theories of capitalist development
and social change in the periphery.
The major flaw in dependency theory is acknowledged to
be its conceptualization of capitalism, which has significant
implications. The main element in this conceptualization is
the notion of surplus transfer between different geographical
areas. Although capitalism is perceived to be a system of
exploitation, the latter takes place as an exchange relation
rather than as a production relation where this exploitation
occurs among spatial entities which are all designated as
capitalist.
My purpose is not to criticize the theory on the basis
of establishing criteria to evaluate its appropriateness as
a Marxist analysis, as E. Laclau suggests (Laclau, 1977,
p.23). Rather, it must be shown that an alternative approach
which conceptualizes capitalism as a mode of production
(Laclau, 1977; Brenner, 1977) and exploitation as a
production relation— production of surplus labor and
appropriation of this by social classes (Bettelheim, 1972,
31
p.301)— has superior explanatory power than dependency
theory.
The main problem of the theory is its neglect of the
relations of production under which the surplus is extracted,
thus making the relation of exploitation devoid of class
content. Classes are replaced with geographical areas and the.
dynamics of development and social change are explained in
terms of exchange relations (surplus transfer) among thesJ
areas in a metropolis-satellite framework. However,
geographical areas, nations or countries are composed of
classes with contradictory interests, and class conflicts and
structures in these regions and countries play a crucial role,
in explaining the socio-economic and political dynamics of
these nations as well as their historical relation with the
core countries. Exchange relations are not a sufficient
explanation of underdevelopment in the periphery because a j
powerful and more fundamental factor is the production and
use of surplus as well as its transfer (Brewer, 1980, p.172),
in terms of the class structures of individual countries.
R. Brenner forcefully shows that the development of
capitalism can not be explained by the exchange/market
relations alone. The socio-productive relations and
development of capitalism can only occur if it is based on
specific property relations and a class structure where labor
has been separated from possession of the means of production
32
and subsistence, i.e. under conditions of free wage labor
(Brenner, 1977, 1986). Hence different property relations and
class structures have led to different paths of development
in individual countries, as in England, France and Eastern
Europe (Brenner, 1976, 1977, 1982). Although R. Brenner has
been criticized because his analysis is restricted to the
colonial period of penetration in the backward countries
(Barone, 1985, p. 153), his methodology can be and has been
extended to recent periods of periphery.
The circulationist or exchange-oriented approaches
definitely constitute an alternative to mainstream theories.
However, they fail to explain the class dynamics of the
periphery. On the other hand, production-oriented approaches
not only fulfill this task but also reveal how the exchange
relations take place (Fine and Harris, 1978), a point which
will be extended in the next chapter. This negligence ofj
classes is by far the most compelling critique of this theory
Brenner 1977; Brewer, 1980; Giilalp, 1983; Laclau, 1977;
Munck, 1984; Palma, 1978; Petras, 1981; Weeks, 1981).
Another implication of this problem is the consequent
economism in dependency theory. As a result of external
determination of the history in the periphery dependency
theory tends to marginalize the political. It treats
governments, political parties, bureaucracies, militaries and
the forms of state as mere appendages of the world capitalist
33
system. Consequently, politics is peripheral to the analysis
of development and social change in the Third World and
specific historical events are couched largely in economic
reductionist terms (Randall and Theobald, 1985, pp.115-18).
However, as will be studied in the next chapter, state and
politics can not be analyzed in such a framework and can not
be reduced to purely economic relations. As T. Smith shows,
neglect of the organization of the state has led the
dependency theory into a simplistic view of underdevelopment
(Smith, 1979). This is specifically valid for the theses of
Wallerstein where the state is perceived to be an instrument
that must be conceived in terms of its operation in an
international context of transferring surplus from periphery
to the core (Giilalp, 1983, p. 129).
Besides these major flaws, the theory has also been
criticized on several methodological grounds. First, the.
theory, by displacing class relations, shows an impoverished
linear conception of history based on simplified models of
exploitation (Munck, 1984, p.13). The process of development
is seen in a static system of redistribution of surplus
within the metropolis-satellite structure where the chains
of this structure remain unchanged. Hence, A. G. Frank's work
is formed of a mechanical and formal model which resembles
the static and ahistorical general equilibrium equations
(Palma 1978, p.900). Because of this weakness, change within
34
the periphery tends to be viewed as an outcome of its
undifferentiated dependent status. However, in reality there
is no one general form of capitalist development particular
to the peripheral economies, and this process shows
significantly different forms together with the diverse forms
of economic and political changes which are glossed over by
the dependency perspective. Dependency theory's basic
conceptual position prevents it from considering alternative
processes of capitalist transformation and class
differentiation in the periphery, for the transition is
uniform and determined by the capitalist World economy.
History is reduced to one path of stagnation and
underdevelopment. Conseguently the theory is insensitive to
different forms of transition to capitalism. There is no room
for a transition as a result of the articulation of non
capitalist social formations with capitalism. This for
example is the crux of E. Laclau1s critique of Frank (Laclau,
1977).
In this respect, dependency theory fails to break from
the modernization theory. The positive teleology is inverted
to a negative one, since the "diffusion brings growth" then
is replaced by "dependency brings stagnation". The theory
assumes that there is a latent, suppressed alternative that
would lead to autonomous development, but this ideal state is
35
only potentially achievable since the external imposition
blocks this mode of development (Warren, 1980, pp.166-67).
Summing up, since underdevelopment is a process with
uniform causes and effects, there is no way to generate a
differentiated history of capitalism in the periphery where
the suggested essential continuity yields a linear history
of the development of underdevelopment (Bernstein, 1979,
pp.93-4).
The recent and current theories of dependency abandoned
the earlier stagnationist associations. Facing the challengJ
created by the recent experience of diversified structures of
industrialization, levels of growth and development that took
place in newly industrializing countries, dependency
theorists responded by giving concessions. However, despite
these concessions, in terms of accepting the possibility of
development, the main tenets of the theory have been retained
by adopting the view of a undifferentiated periphery and
perceiving this development as a dependent kind. The kinds of
industrialization that have occurred through the directj
penetration of international capital are incapable of
achieving a genuine autonomous development, bringing a self-
sustained growth, autocentric accumulation, equal income
distribution, productive employment, high levels of welfare,
etc (Bernstein, 1982, p.223).
A. G. Frank, for instance, claims that those export-
i
based miracles are permissible within the world system
because they suit the needs of the center but this new
dependent export-led growth is in no way significantly:
i
different from the old raw-materials export led growth that'
I I
I underdeveloped the Third World (Frank, 1982). Furthermore,
the theory's approach to the question of the "new
international division of labor" (NIDL) has taken two
i
different forms. First one is a Neo-Smithian approach
(Brenner, 1977) which argues that changes in the world
market— for labor power and production sites— determines
NIDL. This is best exemplified by the work of Frobel et al.
(Frobel et al., 1980). Second is a Neo-Ricardian approach
which traces the origins of the NIDL to a profit squeeze
i
specific to the core (Jenkins, 1984). Aside from these
different explanations of the origins of NIDL, both claim
that NIDL has been established as a result of the needs of
!
i
capital at the center rather than as an outcome of local
I
class struggle or policies of the national states and NIDli
i
does not transform the hierarchy of the traditional links
between the core and periphery (Corbridge, 1986, pp.147-48)J
! The dependency theory's one-sided view of the role of
f
international capital and Western capitalism in the Third
World gave birth to a new approach labeled "post
imperialists" led by Warren. \
37
The Post-Imperialist Approach
It was against the above mentioned orthodoxy (of
dependency theory) that the late Bill Warren directed his
attack. Warren claimed that capitalism is a progressive force
in the Third World (Warren, 1973, 1980) and was joined by
others later (Becker, 1984; Schiffer, 1981). Warren attempted
to demonstrate the successful capitalist development and
industrialization taking place in the Third World, the
positive role of the imperialist countries' policies and the
loosening of dependency ties. Insofar as there are obstacles
to this development, they originate not in external relations
but almost entirely from the internal contradictions of the
Third World (Warren, 1973, pp.3-4). Later, using empirical
evidence, he showed that in the Third World, GNP per capita
has been rising; worsening aggregate inequity does not exist;
marginalization is not a characteristic of recent Third World
development and major advances in the material welfare of
Third World population occurred (Warren, 1980, Chapter 8).
One crucial argument of Warren is that the national
states have an important impact on the development process
of the Third World. Development based on foreign capital is
complementary to national development, given a state
apparatus which exerts pressure on foreign business and
promotes national capitalist development. And achievement of,
!
political independence, together with intensified inter-
i
1 imperialist rivalry in the West, have enabled national states'
jto promote policies for industrialization with considerable'
, 1
(room for manoeuvre (Warren, 1980, pp.170-85). ;
( !
I Summing up, B. Warren’s confrontation with the
| . 1
aforementioned three problems reveal that first,!
I
Istagnationism is a chimera and there is no uniform path of
underdevelopment. However, he replaces this with the uniform
path of development under the progressive impact of
capitalism and imperialism similar to the modernization
school although he attempts to avoid this with the statement
that he does not claim a universality of sustained
industrialization (Warren, 1973, p.6). This qualification is
I
important but is neglected in his later work. Second, he
i
accepts the possibility of capitalist development in thej
Third World, and finally, internal factors— with a special
emphasis on national states— are the determining forces in
I
the development process. |
I
Instead of surveying the reactions to B. Warren
(Emmanuel, 1974; Giilalp, 1986; Jenkins, 1984; Lipietz, 1982;1
Petras et al., 1978) the following comments evaluate this
I
post-imperialist approach as an alternative to understand the
development process in the periphery. The intervention of B.
Warren is in the right direction in two particular ways.
i
J
39
First, he demonstrates that the dependency claim of non
industrialization is not valid and that industrialization is
proceeding apace in a growing number of Third World
countries. Actually, recently, there has been an accumulating
literature which analyzes critically the experience of NICs
(Amsden, 1979, 1989, 1990; Barone, 1983; Barrett and Whyte,
1982; Corbridge, 1986, pp.177-87; Hamilton, 1983). Second,
Warren emphasizes internal factors considering the role of
classes and state in the development process in the Third
World.
Although he should be given credit on these accounts,
his methodology and approach do not transcend his
predecessors on several grounds. Most prominently, while
often categorized as a production-oriented theoristj
(Hoogvelt, 1982; Jenkins, 1984), B. Warren is only concerned
with the development of forces of production, giving only
lip-service to the social relations of production and social
classes. In his preoccupation with the historical mission of
capitalism to develop the productive forces, he conveys an
approach that excludes the actual mechanism of class
conflicts where capitalism functions as a mode of production
(Giilalp, 1986, p.149). Hence, because of the narrow way in
which production is conceived, the analysis of capitalist
development in the Third World is confined to the level of
appearances.
40
This method, first, leads to an undifferentiated
characterization of the Third World, a mistake equally
committed by the theories discussed earlier. As clearly
explained by A. Lipietz, only through the analysis of socio
economic relations can we differentiate the center from the
periphery and several peripheral nations from each other.
Production of surplus value, systems of accumulation,
technology are all the materialization of relations of
production which takes different forms in separate societies
leading to a fragmentation of the periphery and the
appearances of NICs (Lipietz, 1982, p.51). Lumping the
nations of the Third World into a single developing
capitalist entity, B. Warren not only neglects the existence
of various non-capitalist societies (Emmanuel, 1974), but
also leaves no possible analysis of the internal
differentiation of the Third World, with the exception of
making general comments on the unevenness of capitalist
development (Jenkins, 1984, p.38).
The assumption of a uniform pattern of capitalist
development, moreover, results in an ahistorical framework,
where imperialism— equated with capitalism— is expected to
generate an industrialization and development process in the
Third World with similar characteristics observed previously
in the center. This is a premise shared by modernization
theory— and by dependency theory with the exception that B.
Warren reverses the uniformity of underdevelopment with!
development. However, as noted before, there is nothing in
the concept of capitalism itself which should lead us to
expect that it must cause certain development or,
i
underdevelopment effects (Corbridge, 1986, p.67). Whether or
not these effects are generated depends on the particular!
!class structures and dynamics of the peripheral social
I
formations we are studying. We can not expect a unilinearj
i
t
development path for the whole periphery under the1
|
penetration of imperialism since in some cases the latter may
i
intensify the pre-capitalist relations existing in these
countries (Brenner, 1977), (Kay, 1975), hence producing
underdevelopment rather than development.
1
Similarly, it is not acceptable to argue that, as
I • * • ^
IB.Warren does, capitalism is expected to bring more
i
democratic political regimes to the Third World, based on the
I
experience of West (Warren, 1980, p.16, 28). Capitalism and
i
democracy apparently are not codetermined in the periphery.
The changes in the political regimes can not be reduced to
the development of capitalism but should be studied again
I
within the totality of internal/external forces in these
!
societies. Hence, his methodology fails to produce and
i !
! differentiate when and how capitalism does or does not
]transform particular societies staying in the limits of the
same problematic of the former theories he attempts to^
I
attack. ,
J
Finally, his method also prevents him from transcending
the static internal\external dichotomy. It is true that B.
'Warren emphasizes the internal factors. However, he merely
reverses the primacy argument of the dependency theory making
the internal instead of external factors as the determinant-
force. This is an indication of understatement of the role'
I
played by international capital in the Third World
! :
(Bernstein, 1982, pp.229-30).
Conclusion j
I
I
j A critical analysis of these theories of capitalist
development and social change in the periphery suggests the
necessity of an alternative approach which will provide a
better understanding of political and economic change. As
briefly discussed, such an approach should adopt a historical1
i I
I methodology that will analyze any social formation in its
i
I
historical specificity where specificity refers to the
complex ensemble of class relations and struggles, economic,;
I
political and ideological conditions, and the state and its
relations with internal and external forces. j
As will be further elaborated in the next chapter— with
|
jspecial emphasis on the state— such an approach that studies
the "system of precise determinations" (Bernstein, 1982,
p.232) in specific social formations analyzes the concrete
relations of capitalism in these countries rather than the;
I
| I
! abstract and ahistorical processes of development and
underdevelopment formulated by other theories. This approach,
on the one hand, explains the general dynamics of capitalism
lby abstracting from concrete societies. On the other hand, at
i
1 a lower level of abstraction, it enables us to analyze the
concrete contradictions and complexity of development in
peripheral societies. j
CHAPTER III
THE STATE AND DEVELOPMENT STRATEGIES IN THE PERIPHERY
Introduction
I
i
I
r
i
This chapter develops a theoretical framework which
helps to study the differential character of Third World
development, the possibility and nature of the
industrialization process in the periphery, and finally, thej
i
impact of internal and external factors on development in
these societies while avoiding a rigid dichotomy between
economic and political spheres. The strategic-theoretical
approach adopted herein links the state to internal forces— '
!
particularly the class structure and class struggles— and
external forces. This linkage between the state and internalj
and external forces is developed through the assembly and
l
implementation of "accumulation strategies" or "development
i
strategies". In this framework, economic development is
studied historically by analyzing the concrete specificities
I
of the dialectic among (accumulation) strategies, structures
i
and struggles. !
45
Method !
i
j The theories discussed earlier fail to study this uneven'
\ !
I development process. They gloss over the differences among
peripheral countries and end up in general abstractions
i
wherein Third World nations are lumped together. As a result
of these abstract and ahistorical generalizations, the Third
t I
jWorld is projected to develop or stay underdeveloped as a ;
i
whole. The focus is on general factors that cause development
or underdevelopment, where these factors are assumed to be
applicable for all societies. Such factors are perceived to
i
lead to uniform and even outcomes, whether it is
i
modernization or stagnation. This abstract conceptualization
of periphery as a single uniform entity prevents explanation
of several facts about the Third World, such as persistence
of a vast number of scarcely industrialized countries, the
Jdifferent patterns of industrialization, enormous
inequalities of industrial development in the periphery, and
so on (Petras, 1984a, p.72). j
The proper task of a method of abstraction is to avoid
!
the problems posed above and to provide a coherent;
explanation of the uneven nature of Third World development,
j One thing common to all peripheral countries is that the^
i exist in an international economic system and the
international relations within this system are a function of
I |
the development of capitalism. The controversial part,
i
however is the significance of international economic
relations for the uneven development of individual societies
i
(Weeks, 1985, p.5). As shown before, the dependency theory
t
concentrates on this issue but not only conceptualizes
i
international dimension as a point of departure but also
argues that processes in individual societies are the
derivatives of the contradictions in the system as a whole
i
(Munck, 1984, p.346). Consequently, the distinct histories
of peripheral nations are wiped out and continuing
differences among the economic, social and political dynamics
of Third World countries are overlooked.
An analysis of uneven development can not be made at
this level of abstraction. The periphery has to be studied
I
not as a single, uniform entity, but rather as a fragmented
differential structure. In the words of E. Mandel a prominent
|
scholar in the theorization of uneven development, 1 1 The
historical specificity of imperialism in this respect lies
in the fact that although it unites the world economy into a
single world market, it does not unify world society into a
homogeneous capitalist milieu.... although it submits aid
J I
j classes and all nations to various forms of commoii
1 exploitation, it maintains and strengthens to the utmost the
'differences between these societies" (Mandel, 1970, p.22)J
47;
Hence, we have to descend from a higher level of abstraction-
-the world system— to a lower level one— the social
j formation— to explain the concrete dynamics of this process
j and to study how the general law of uneven development
generates differences in the pace and structure of
development in each specific case.
It is possible to study uneven development as a general
i 1
ilaw on the theoretical level. A recent attempt by Neil Smith
forcefully analyzes how uneven development is a result of a
basic contradiction inherent in capital, namely; the opposed
|
tendencies toward the differentiation and equalization of the
levels and conditions of production (Smith, 1984). Although
i
Smith's see-saw theory of uneven development— mobility of
I !
!capital responding to profit differentials— is very useful at
j
the micro level, it has limited use for understanding how
uneven development works in different peripheral countries.,
i
We have to move beyond economic factors and consider
political and ideological elements and their impact on
I
economic dynamics, such as the mobility of capital in order
i
to reach a more complete picture of uneven development m the
i !
Third World.
There have been several attempts to study the uneven
nature of development in the non-European countries as well
as among the European countries themselves. Karl Marx is
i
often labelled as an European centrist due to his famous
statement "the country that is more developed industrially
i only shows to the less developed, the image of its own future1
i !
11. However, Marx shows, in the next paragraph, a projection^
of a very different path for Germany and continental Europe
in relation to England due to the differences in such social
and political structures as the absence of factory laws
(Marx, 1977, p.91). His letter to Vera Zasulich also shows
I
how the Russian road of development is different due to'
i
different property relations (Shanin, 1983, pp.95-127).
Karl Marx was a theorist of capitalist society whose
highly developed theory of capitalism was based on the
European experience. It is a well accepted view that his
theory of non-European development is more properly regarded
i
as notes towards a theory (Carver, 1985, p.46). However, his
t ;
method and notes have proved to be rich enough to promote a
i
highly valuable research program which can be applied to
I
I
study the peripheral societies. There have been several'
I
studies on the development of capitalism in a historical-
comparative perspective that are influenced by Marx
(Barrington Moore 1967; Brenner, 1976, 1977, 1982; Cardoso
i
and Faletto, 1979; Gerschenkron, 1966; Mouzelis, 1986; i
i J
Skocpol, 1979; Weaver 1981). All these studies share an
i
important feature. They provide coherent explanations of
distinct paths of development in different nations.
49;
If we study the methodology adopted by these works, w e j
see that instead of starting from general, ahistorical,
abstract and ideal models, they start with the concrete'
social formations in their historical specificity. Since eaclJ
i
social formation has its own particular diirections of;
i
development, it may be very difficult to find generalj
explanations of development. We may not accept a general
model of development that is equally applicable to all
societies. However, we should not give in to the several
!
examples of variations in the patterns of development1
I
presented by the history. The task of theory is to generalize
from empirical observation to trends or regularities in
seemingly different processes. We must accept the uniqueness
of each historical process, but try to move from this level
to a higher level of abstraction to reach a generalization
that will improve our understanding of the development
process (Gunnarsonn, 1985, p.190). Although, we can not
expect generalizations to predict and explain what have’
happened, they help in simplifying and understanding reality.
. I
Social theory is a net thrown over a concrete and changing
I
reality, hence it is by definition incomplete (Manicas, 1985,
I
p. 315). The task of the theory is to improve this
i
t
incompleteness by working on the concrete. !
The starting point is the concrete as a 1 chaotic
conception of a whole'. Then we move analytically to simpler
i
1
I
levels and reach the condensation of multiple determinations.
This is the well-known journey from concrete to concrete-in-!
thought (Marx, 1973, pp.100-101). Taking the concrete as the|
starting point, however, poses a crucial problem which is the
conceptualization of elements and their hierarchy which
constitute this concrete. Organizing key variables for the'
explanation of development of social formations vary among
! !
I different scholars. However, it is beyond my purpose to
critically evaluate alternative approaches to this difficult
methodological problem. I will, rather, consider the
specificity of a social formation as an ensemble of three
levels; first internal relations, namely class relations,j
contradictions of the economic, political and ideological1
i
conditions, forms of class struggle and the dynamics of non-;
I
class forces; second, external relations; and third, the
national state and its relation to internal and external
l
factors. The specificity of a social formation is analyzed
as a complex condensation of many determinations that are
generated as a result of the concrete articulation of these
three levels in a historical context. Next, we move to an
1
upper level of abstraction to generate simpler determinations
|
and produce general regularities that may be helpful to
understand the development process in the Third World.
This method enables us to cope with the problems
!
i
discussed earlier. First, it allows us to see how development:
i
!
i
I
5l|
I
patterns are different among peripheral societies and find
out the specific reasons underlying the differential
1 !
character within Third World. Second, it enables us to'
i
explore both the possibility and near absence of;
industrialization in different peripheral countries. Third,'
i
it enables us to analyze the concrete articulation of
internal and external factors. Finally, it generates a
j synthesis of economic and political dynamics in the Third
World with its emphasis on the state, which will be1
!
elaborated in the next section. 1
Starting from the 1970s, there has been a growing
interest and literature on the Third World which gives weight
i to internal factors and the state. F. H. Cardoso and E.;
!
Faletto's seminal work on Latin America uses a historical-
structural method to show the historical evaluation of
development through conflict and class struggle by trying to
determine the ways in which state, class and production arej
related in each concrete structure of dependence (Cardoso and
Faletto, 1979). Similar studies have been conducted to
theorize the social structures of concrete social formations
emphasizing class and state (See, Evans, 1979; Hamilton,
1982; Higgott et al., 1986; Randall and Theobald, 1985,
I
Chapter 5; Weeks, 1985; Zeitlin, 1984). I
j
j Although the model adopted herein copes with the
I
j difficulties faced by the earlier theories in a more
1
52'
I
i
satisfactory way, one issue should be clarified at this
point. Class analysis is often criticized for assuming that
interrelationships among classes constitute the most
I
i
appropriate means to understand the economic and political1
I
dynamics of societies. This criticism, in turn, assumes class
theory to presuppose that other forms of social relations
i
such as clientelistic, ethnic, cultural, regional and
i
religious conflicts, are strictly subsumed under the class
relationships. The existence of social conflicts based on
I
religious, racial or cultural differences clearly suggests
!
that cultural identity gives rise to non-class collective
i
actors on a vast scale and creates a serious problem for the
theory of class (Elster, 1985; Giddens, 1982; Parkin 1979).;
This problem is due partly to the conceptualization of class
as an economic category. Then the concept of class struggle
becomes a blanket term which prevents distinguishing between
class and non-class practices and blocks the study of the
i
complex interrelationships among economic, political and
iideological struggles (Mouzelis, 1986, pp.210-11). j
I i
! It is not possible to elaborate a defence of class
I . . . I
' analysis here. However, I believe that, defining classes as
j
positions within the social relations of production derived
from the property relations which determine the patterns of
exploitation, it is possible to analyze the dynamics of a
social formation quite effectively. Although this analysis
is problematic and incomplete— in the sense of not covering
j
all types of relations in a society— , it provides an
effective tool to study development and social change.
i
Defining classes in terms of property relations (Roemer,.;
i
l
11982, 1988; Wright, 1985) enables us to analyze how different
classes behave within the asset-exploitation nexus to deprive
others of egual access to the productive assets in the
I
society. This conceptualization of classes in relational
i
terms and by differential property rights recognizes that a)
ownership of resources creates fundamental shared interests
i
among subsets of individuals b)such interests are typically
i
opposed to the interests of other subsets of individuals and
c)such shared interests may give rise to collective action
I
and potentially social change when they are threatened by
other interests (Richards, 1986, pp.18-19). Class analysis
shows the dynamics of inequalities in the property relations
and how these relations are helpful to examine social
phenomena from an action point of view. By studying class
structure and relations, many questions, such as production
l
and distribution of surplus, relations of international
j
capital to domestic classes, relations of the state to
internal classes, class formation and struggle to reacli
t |
objective class interests, and so on can be answered mucli
i
more effectively relative to alternative methods. It is
particularly powerful in studying social dynamics generated
by interest-based conflicts and struggles. Since we focus on:
the assembly and implementation of accumulation strategies
under capitalist property relations , as elaborated later,
interest-based contradictions are the determining forces
I
(relative to other cleavages based on ethnic, religious or
i
(Other motives.
! Furthermore, moving away from a reductionist static!
I
concept of class, we can argue that class structure is notj
the sole determinant of social events in a society. ConflictsJ
between non-class groups operate within the limits|
j
established by the class structure and it could well be the1
j
case that they may be more significant determinants of social
change in a given society at a given time. Although class
t
structure establishes certain limits, within these limits
i
there may be social conflicts which may be class or non-class
struggles and as a result of these social movements a society
may end up in a distinct pattern of social development
Hence, one can not claim that class relations define a unique1
j
path of social development or that all other social relations
are determined by class relations (Wright, 1985, Chapter 2).
Moreover, it is possible to analyze, under certain historical
circumstances, how non-class forces become class-relevant!
j
forces with pertinent effects on class relations. For
example, although non-class forces are organized in non-class
i
____________________________________________________________________________ i
55
terms, under the exercise of a hegemonic project, they turn|
Jout to be class-relevant forces (Jessop, 1982, pp.242-43). j
The mode of inquiry in my study is to analyze the;
I
multiple determinations generated by the concrete:
articulation of the aforementioned three levels of the’
society; internal factors, the state and external factors^
However, the state level and its relation to the other two1
levels is emphasized and these complex determinations are,
presented in a way to reveal the state1s place in economic^
development. It should be stressed, however, that, such aj
mode of presentation does not necessarily give the state a
I
pivotal role in this process. The centrality of the state canj
only be shown historically. Hence the reason behind my!
emphasis on the state is not an a priori conception of statej
centrality but rather the intention to explore the state1 s '
<
role in development and social change in a peripheral!
!
I society. '
i j
i
i
The State: Some Theoretical Issues:
I
This section examines fundamental issues which arej
necessary for an adequate study of the state in peripheral!
social formations. The recent growth of interest on the state
as an object of inquiry is quite striking. In many societies
in the Third World, the state's involvement in almost all
56]
I
facets of these countries1 economic and social structures]
necessitated a much more elaborate, coherent and systemic]
I |
|approach to the study of state to reach a betteri
understanding of development and social change in the Third
World.
i
This phenomenon also reflects a growing generalj
i
recognition of the importance of political as opposed to1
!
jeconomic determinants of development, though the degree of
I
j ,
ithis relative importance varies among different approaches.
Although an apparent centrality of the state in the periphery
is a common view, as indicated formerly, rather than taking]
i
it as given, one has to investigate how this centrality has]
|
been formed historically in particular social formations, how,
l
I •
jthe degree of centrality varies, what are the factors forcing
peripheral states towards greater centrality and what are the
consequences of this central role of state on these societies
(Goulbourne, 197 9, p.28). j
i
To answer these questions we have to adopt an approach
that will give us an adequate synthesis of political and
l
economic elements, a task unrealized by the theories
l
discussed earlier. The modernization theory's ahistorical
approach to the analysis of political factors where the state
i
is viewed as an entity that stands outside and above society,j
i
leads to an inadequate articulation of the economic and
political. The problematic of the state is narrowed down to
the programs of modernization, focusing on the respective
roles of ruling elites, the bureaucracy and the military!
|(Alavi, 1982) and politics and the state appear to exist
without a socio-economic base giving the false impression
that the political is independent from these forces.
On the other hand, dependency theory fails to give
serious treatment to the political while trying to overcome
[
ithe modernization school's neglect of the economic. The state;
is viewed as a dependent entity that functions primarily to|
develop the dependency relations in favor of the metropol
i
capital and its allies in the national economy. Consequently,
i
I
there is no adequate theoretical structure which analyses the^
political in the Third World since too little weight is putj
on social and political forces and the state by this theory!
i
(Smith, 1979). Bill Warren and the post-imperialist approach'
notice this weakness but also fails to develop an adequate
theoretical structure where the state and the state1s
relation to internal and external factors can be analyzed. I
j
Our approach attempts to overcome this major problem by
studying the relation of political and economic forces in a
concrete case. Locating the state on the terrain of a social1
formation, it is possible to analyze the state-internal
/external forces relations as an ensemble of multiplej
determinations. However, in adopting such a holistic approachj
where political and economic spheres are articulated, one has
! 58
to avoid two problems. First, we should avoid a reductionist
Approach whereby political phenomena is explained simply in
I
! terms of the requirements of capital accumulation or the
jinterests of ruling class(es). Second, we should avoid crude
empiricism where political outcomes are explained strictly
by political conjunctures.
Finally, the possibility of developing a fully
i
determinate theory of the peripheral state is rejected since
:a single theory can not comprehend the totality of the
|
jdeterminations of the World without resorting to one or
'another kind of reductionism. Although we can find the;
i
interactions of different causal chains that generate a1
i
ideterminate outcome, there is no single theory that can
i i
determine or predict the manner in which such causal chains;
i I
'interact (Jessop, 1982, pp.211-13). Hence, in my study,
i
I
'instead of attempting to generate a theory of the peripheral
state, I try to produce and adopt some theoretical tools
I
which are expected to help us in our analysis of the Turkishl
state. i
First, the state may be defined as a structure composed
I
iof a state apparatus and a government that has the formal
1 j
'control of this apparatus (Hamilton, 1982, pp.6-7); the
' I
|degree of this control may vary among different apparatuses.j
: i
It is useful to conceive the state apparatus in three
distinct formations, namely; repressive apparatus, sub-
apparatuses and ideological state apparatuses (ISAs)j
i
j )
.(Althusser, 1971; Poulantzas, 1974). Evidently, it isi
difficult to provide a clear definition of the limits of the
I
iState apparatus, since the state and other institutions
I
pverlap at varying degrees. But we may talk about a spectrumi
i i
! I
jof government intervention, along which there exists a set;
of state apparatuses that are subject to different doses of
control (Clark and Dear, 1984, p.49). At one end of the
spectrum we see the repressive state apparatus. Thisj
japparatus fulfills its role principally through organized!
jphysical repression legally monopolized by the state
i '
|(Poulantzas, 1974, p.301). This apparatus is composed of such
branches as the army, police, administration, courts, etc.,;
which constitute the central structure of the state system'
I . !
|and power.
I
j At the other end of the spectrum, we observe ISAs.
i
^However, ISAs should not be included in the definition of the!
' i
i i
istate per se. Otherwise all institutions are reduced to ai
part of the state obliterating distinctions between the state!
and other institutions (Frankel, 1979). Consequently, we have
I i
^o conceive ISAs as a distinct analytical concept which helpsj
lus to study the impact of the state on the ideological
superstructure. It is a structure between the state and the!
•society. ISAs can be considered as para-apparatuses which are
!in a way separate from the state apparatus with a certain
degree of autonomy but this degree of autonomy variesi
l
l
depending on state-society relations historically as well as
1 ' I
ion other factors. There are multiple series of institutions!
jsuch as religions, unions, communication, etc. in which the
,dominant ideology is embodied (Althusser, 1971). Although
ithey provide a medium for the state to perform its|
I
I ideological functions, the relative autonomy of these:
I
i 1
jinstitutions generate major dislocations of state power. This,
relative autonomy allows for classes and fractions outside!
the central power bloc— the alliance of the dominant classes
I I
land fractions— (Poulantzas, 1973) to control one or more of!
I
;these ISAs. Unlike the repressive apparatus which is under
: !
the exclusive control of the hegemonic bloc, non-hegemonicj
|classes or fractions may control some ISAs which in turn have!
I
|significant implications for the class struggle (Poulantzas,,
1974, pp.306-8). This kind of conceptualization also enables)
,us to see the state not as a monolithic entity but as an'
i
Jarena of struggle among different classes, fractions and non-,
i j
{class forces where there exists more than one locus of power
J(Alavi, 1982).
t
t I
Finally, in the middle of the spectrum, we observej
; several sub-apparatuses which are a collection of agencies,!
| !
jorganizations and institutions that together constitute the'
i j
! I
jmeans by which several state functions are attained (Clark,
| i
land Dear, 1984). This category seems to be necessary because
!all these organizations are neither a part of the repressive
lapparatus nor can they be considered as ISAs. However, since
ithey are controlled by the government they may be regarded
junder the executive category. These sub-apparatuses may be
categorized according to the functions served through them
’ and include several government agencies like planning
' ' I
| # i
.organizations; central banks, etc. that perform many;
* i
Idifferent tasks. The taxonomy of these sub-apparatuses per
ise is beyond the dissertation's purpose, but they will be:
i I
studied where relevant to the concrete case. j
j Thus defining the state in an institutional context, we
assume next that, the state is a rational agent in society
[with its own institutional self-interest (Offe, 1984, p.120).
[The state's rationality, however, should be perceived withinj
j !
jthe context of capitalist property relations. Property;
I !
irelations refer to the two-way relations between direct
i
producers and owners which determine the systematic access of;
i
individual economic agents to the means of production and to
the economic product. These property relations which maintain
the class positions of the producers and owners determine the
[rational economic course of action for these classes wherei
l i
i
irationality refers to the most sensible way to maintain or
I i
jimprove their material conditions. Economic development is!
!the aggregate result of the realization of the reproduction
rules of the producers and owners (Brenner, 1986, p.26). !
Under capitalist property relations what are these
I
|rational rules of reproduction? In a capitalist social,
I I
^formation both the organizers of production and the direct!
j i
Iproducers lack direct access to their means of production.
'consequently, each is compelled to participate in a market
jprocess where they socially reproduce themselves in the
process of physically producing a product for exchange. |
Meanwhile, the forces of competition in the market place
|drive these individuals to produce at the "socially
i
jnecessary rate" in order to survive. This in turn requires a;
I |
ivast degree of specialization, innovation and accumulation
of their surpluses which leads to systematic growth and
leconomic development (Brenner, 1986, pp.33-4; Brenner, 1988,
j
jpp.24-5). In this structure, the money form of the surplus,
i |
|generated in the whole process or surplus revenue— mainly the
i
iprofit— appears to be the necessary condition for economic;
Jdevelopment. In other words, the development process depends,
on the profitability of capital accumulation. This
i
'correspondence between the rules for individual reproduction
!
[of capitalists and the conditions of economic development is
| i
I the key to the nature of the capitalist state (Brenner, 1988, |
i 1
p.34). !
! . !
j In a capitalist society, m effect, as a result of the
iproperty relations, all economic actors follow certain rules
1 <
1 I
of rationality to reproduce their well-being and improve
63
their material interests. Therefore, interests, including the
j
istate's, seek to secure economic development, which in turn
coincides with the reproduction of the capitalist class
i
[(Brenner, 1988; Przeworski, 1986). In order to elaborate this
i 4 ,
jproposition on the nature of the state m a capitalist social •
jformation we have to present the relations between the state!
! t
and internal and external forces. We start below with thef
I
most crucial one which is the state-capital relation. j
The state-capital relation can be studied at two levels
!of abstraction. At a higher level of abstraction, we can
i
I conceptualize the relation between the state and capital in:
i 1
general. At a lower level, the relation between the state and1
t i
individual capitals can be studied. If we consider the former:
j i
! relation, we find out that in the political-economyj
i . .
'literature the state-capital relation is the departure point
of several approaches to the "capitalist state". It is beyond
my purpose to survey these theories here but I present below
the alternative conceptualizations of this crucial relation
briefly (See for surveys, Carnoy, 1984; Jessop, 1982).
j
! All of these theories either accept that the state
operates in the interests of capital— those who control the
jproductive wealth— or give some room for state autonomy to
[explain the cases where the state is observed to act against
i !
■the interests and preferences of this class. The,
! "Instrumentalist" view emphasizes the organic links between'
: I
64
state managers and the capitalist class where the latter
controls the former by some mechanism such as funding
i 1
ileverage or direct participation in the state bureaucracy;
j :
'(Miliband, 1969).
Another view was developed by the late N. Poulantzas.
i
jln his earlier critique of R. Miliband he had explained the
icoincidence of the state's functions with the interests of
I
capital as an objective relation through the structural'
i
characteristics of the system (See, Poulantzas, 1969). In his|
I ’
ilater works, he moved away this structuralist view and|
• i
I
.adopted a "class-theoretical" approach. The correspondence byj
then was established in terms of the organization of a power-;
bloc by the state by means of ideological and repressive
i i
.state apparatuses (Poulantzas, 1975, 1978). The state is seen;
! I
.as an arena of class struggle where a hegemonic class or bloc;
i
reproduces the capitalist relations of production throughj
istate apparatuses. Hence it is this class nature of the state
i
I
|that determines its capitalist function (Carnoy, 1984,
i
!p. 125) .
A third view is represented by the "capital-logic"
I
approach (See, Carnoy, 1984, Chapter 5; Holloway and
Picciotto, 1978b; Jessop, 1982, Chapter 3). In general it
conceptualizes state functions as necessary elements for the
, i
reproduction of the capital accumulation process. This is
particularly evident in J. Hirsch's earlier work where the
state acts because of the need to develop countertendencies(
Jagainst the tendency of the rate of profit to fall (Hirsch,
;1978). C. Offe, on the other hand, claims that the state
guarantees and safeguards the capital accumulation process
'in order to reproduce its political power (Offe, 1984,
^Chapter 4). Both J. Hirsch and C. Offe talks about structural
'and functional constraints of the general requirements of the'
capital accumulation process that lead to state policies in
<
favor of capital. The dependence of state expenditures on
revenues withdrawn from the total surplus generated in the
capital accumulation process is emphasized particularly. I
! I
! The "instrumentalist" approach has been discredited by;
I ■
I
'showing cases where state policies are not controlled or
i i
I ■
dictated by the ruling class. The "class-theoretical"j
approach, on the other hand, takes overall reproduction of;
jthe social formation for granted which is provided by class
'hegemony at a highly abstract level. Moreover, it lacks any
i
boncern for the dialectical relation among particular!
I
interests (Jessop, 1985, p.343). Finally, the "capital-logic"
japproach suffers from functionalism. It does not show either}
■the mechanism that guarantees capital accumulation or the
i
]
(reasons why the state supports this process. It assumes that
I
jthere exists a unique logic of capital which is followed by
the state having perfect knowledge of the requirements of
this logic. Summing up, these three major approaches to the
66
i
capitalist state suffer from some degree of reductionism,
structuralism or functionalism in their methods of exploring
I
the correspondence between the interests of state andj
i I
1
capital. They also fail to consider the presence of severalj
, i
;capital logics which reflect the interests of particular
i
capitals as stressed further, later. The class struggle is
subordinated either to the laws of capital accumulation or to
social cohesion in society. Finally, they fail to analyze the:
I
Irelation between economic and political realms without
reducing one to another.
| A fourth approach was developed in the late 1970s as a
i !
' ,
Iresponse to earlier theories. Its point of departure is the.
"autonomy of state" (See, Block, 1977;Skocpol, 1979;:
I i
jTrimberger, 1978) in an attempt to explain the cases wherej
I i
[the state or state policies are not controlled by the rulmgi
class or where the state functions apparently necessary fori
capital accumulation are not performed or dysfunctional statej
i
policies are observed. N. Poulantzas developed this concept|
'initially as the requirement of attaining the state's;
i j
function of social cohesion by serving the long-term;
]
|interests of capital— which may hurt capital's short-term!
[interests (Poulantzas, 1973). He had claimed just before his
i
death that relative autonomy is the only solution to avoid:
economic determinism and to study the relation between
I
politics and economics (cited in Block, 1980, p.227). |
According to a strong version of this approach the state
j !
,is seen as a structure with a logic and interest of its own
I i
ithat is separate from the interests of the dominant classes i
I !
l(Skocpol, 1979, p.27). A weaker version perceives that thej
j
Istate and the dominant class establish a partnership and are!
i i
; linked to each other but with separate sphere of concerns5
j ;
: (Miliband, 1983, p.65) which reject a fundamental oppositionj
i
between the interests of state and capital. It is also aj
i
jcommon part of this approach that state managers are seen asj
Iself-interested maximizers under certain constraints ofj
!
[capital— for example the revenue constraint and the veto
Ipower of capital— (Block, 1977). Consequently, state power,
I 1
jean not be reduced to class power (Block, 1980). ;
j
i In general, the "autonomy of the state" approach
jconceptualizes the state not only as a distinct institution
which can define and pursue its own interests and project but
also with a potential conflict with the interests of the
i
ruling class that may end up in policies which are against]
these interests (Brenner, 1988, p.6). Although this approach,
* t j
(endeavors to overcome the problems of others in
jconceptualizing the relation between the state and dominant
i
classes by avoiding reductionist and functionalist
jexplanations, its solution ("state autonomy") is not
[operational: it does not show why the state acts for or1
i
[against the interests of the dominant classes. In their]
68 :
i
jarguments the state is a collective corporate actor which}
jtranscends individual interests in its pursuit of achievingj
i
collective goods for the good of the general interest. And in|
Jorder to be able to do this the state should have some degree!
I
'of autonomy (Rueschemeyer and Evans,1985). Although this
i
'approach justifiably conceives state managers with their own
interests , it fails to link these interests with the'
I
; interests of the owners of the productive wealthl
i !
jsuccessfully. I return to this concept of "state autonomy"}
later. !
! I
Then how can we conceptualize this crucial relation'
between the state and capital? How can we make sense of the !
"structural dependence of the state on capital" (Przeworski!
I
I
|and Wallerstein, 1988) without attaching reductionist,1
jstructuralist and functionalist explanations, but which give
i !
us determinate answers? The state promotes the interests ofj
capital neither because it is controlled by the latter nor
to fulfill its own necessary functions for abstract
j
requirements like social cohesion or capital accumulation.
i
.
| The starting point for an alternative conceptualization
I
jof the structural dependence of the state on capital should
!be the peculiarity of the capitalist property relations which
iwere discussed earlier. First, in the capitalist order, the;
i J
imeans of coercion are under the monopoly of state while the
i i
! means of production are under the monopoly of the capitalists'
j
j(See, Brenner, 1988; Holloway and Picciotto, 1978a). This
disjunction between the locus of coercion and locus of
productive power enables us to perceive the state as a'
i i
jseparate institution with a potential capacity to intervene
Jfor or against the interests of the class(es) that control
;the means of production. I
! !
! Second, as mentioned formerly, under capitalist property
I
'relations, as a result of the competitive forces, economic
i I
idevelopment is a regular feature of social life. Economic!
‘ development depends on the profitability of the private,
capital accumulation process, i.e. the reproduction of the|
I
jprofits and interests of the capital. In other words.
I
(economic development is secured through the reproduction of
I
jthe capitalist class (Brenner, 1988). Moreover, under
i
1
capitalist property relations, furthering of the material
interests of all classes depends on the strength of the
development process. Growth allows all social classes and
groups to enjoy the benefits of a larger volume of surplus
I
I
through higher levels of production, employment, incomes andj
taxes. In this sense, the structure of capitalist propertyj
I
(relations makes everyone1s material conditions dependent upon
I
jthe private decisions— particularly the movement and
!
1
.allocation of productive resources— of owners of the
productive wealth (Przeworski and Wallerstein, 1988, p.12).
I For example, A. Przeworski studies workers' dependance,
on capitalist profits in this context and shows that their
I
future income depends upon the realization of capitalists1 !
present interests (Przeworski, 1985, Chapter 5). And since|
; !
jthe entire society depends on the owners of capital so must j
the state. In this sense, the state's— as well as other
I
j
classes'— dependence on capital is explained first, by their
dependence upon economic development to further their j
material conditions and second, by the reliance of the [
reproduction of economic development on the reproduction of j
jthe private capital accumulation process. <
! ;
! At this moment one may remark that both points indicated
i
above are widely accepted. It is straightforward that the _
!
state is structurally dependent on capital because noj
government can increase productive investment or attain|
I
economic development while reducing the surplus revenue in aj
i ,
dynamic sense (Przeworski and Wallerstein, 1988). This is the;
i 1
well-known tradeoff between distribution and economic growth.I
Particularly, the threat of investment strike is crucial in
jthis relationship. Such a defense coming from capital
disrupts capital accumulation, decreases surplus revenue,
threatens state income and leads to economic and political
'instability (Brenner, 1988, pp.33-4). This institutionalized;
right of capital withdrawal (Jessop, 1983b, p.140) is a[
| j
[definite "veto power" in the hands of the capitalist class*
I
i
71
(Block, 1977, p.15) against state policies that may disrupt
their interests such as radical reforms (Miliband, 1969,
p. 152). Even in the absence of an investment strike the state
has the mandate to promote the reproduction of the private
capital accumulation process. This is because accumulation
takes place in private firms and these units are the main
sources of surplus revenue generated in the society. The
state is dependent upon the health of this process for
financing the growing state apparatus, to acquire the
resources not available to it internally, to maintain incomes
and provide social services and overall for their electoral
survival (See, Offe, 1984, Chapter 4; Przeworski, 1986,
p.180). The state's consumption level depends not only on the
current but also the future investment decisions of the
capitalists. Then for example, any excessive tax reform with!
the expectation of maximizing tax revenues in the short-ruJ
contradicts with its long-term taxable income and the state
will be the victim of myopia— as well as everybody (Elster,
1986, p.216).
Summing up, under the capitalist property relations the
state has no rational reason to use either its coercive power
or its capacity to intervene in economic affairs against the
will and interests of capital. This is because the private
capital accumulation process is the only way to realize
economic development upon which the state depends. The state
must work to create and improve the conditions for capitalist
profitability and this is the fundamental requirement for the
I
1
i
reproduction of the capitalist class (Brenner, 1988). In
i
i
jother words, there is no rational reason for the state to I
i i
(interfere with the capitalist accumulation process m such a;
way as to restrain and hamper it which would deteriorate!
j I
state's material well-being. j
. The ongoing argument suggests that, at a high level of
'abstraction, the state as a rational actor acts in favor of
j
jthe general interest of the capitalist class. However, when
(we move to a lower level of abstraction to study the relation:
i
between the state and individual— or particular— capitals at
I '
l
a more concrete level and integrate the specificity of the|
1 I
political, we may find cases where the state acts against the;
I 1
I
igeneral interest of the capital— temporarily— as an
I
'irrational agent or where state policies are dysfunctional or
irrelevant. I will return to this argument later. :
I '
I At this moment, we may move to this lower level of,
(abstraction where the relation between the state andj
I f
(individual capitals or fractions of capital can be studied.!
I
At this level there is no predetermined pattern of1
i
accumulation or capital logic that capital must follow nor,
(any apriori strategy that the state seeks to implement on thej
| i
(behalf of total capital. We rather observe the multiplicity!
I i
jof capital logics and patterns of accumulation as a result
73
of the presence of competing particular capitals.
j i
'In this environment the state mediates these contradictory I
! . i
interests of different fractions of the capital (See, Bryan, i
1987; Jessop, 1983a, 1983b, 1985, pp.343-45). The "general
interest" of the capital is an abstraction. At the concrete
!
i
level, what matters is the conflicting interests between
particular capitals. The conceptualization of the state whichj
i
rests only at the level of the relation between the state and
the "general interest" suffers from functionalism and class
I
struggle is neglected (Clark, 1983a, p.116) as is evident in
j
the "capital-logic" approach. The contradictory interests of
1 i
individual capitals are not necessarily resolved according!
jto the general interest of capital but according to the
j i
Conjunctural balance of fractions of capital (Bryan, 1987,
p.258). This requires us to integrate the relation between
Ithe state and individual capitals to our study. This allows
j
us to specify particular class interests, their relations to
I
certain patterns of capital accumulation and how the state
mediates these opposed interests through political struggle
!(Gulalp, 1988, pp. 147-48).
j The next step is the problem of conceptualizing
fractions of capital. How can we define these "fractions"?
In the literature, there is not much of a consensus on the
I 9
'criteria to be used in defining class fractions. We find
I
capital fractions differentiated according to the branch of
jproduction in which they are engaged— agricultural,
I
Jindustrial, manufacturing, etc.— ; according to their
^nationality— foreign, national, Japanese, etc.— ; according
to the phase in the circuit of capital— industrial,
financial, commercial, etc.— ; or according to other
characteristics like ownership— private, public— or market
I
(Structure— monopoly, competitive, etc. (Clark, 1978, pp.34-
! 3 S > - i
i _ t
I The theoretical basis of the "fractionalist" account is|
criticized because fractions are claimed to exist as such
only through their representation in the political process as
I
political organizations of individual capitals with common'
t
interests. Consequently, S. Clark argues that the class;
I
struggle is sought in the relation between politicalj
[organizations and one can no longer distinguish a class;
!
jfraction from any other interest group in society (Clark,
i
' 1978) .
i ' !
: However, fractions of capital are not necessarily
1 i
defined as political organizations promoting their common.
i
[interests as pressure groups. First, there is no one to onei
I
correspondence between fractions of capital and theirj
I (
•political representations. We may observe some cases where
I
I fractions are not organized politically or where they are all
!
(organized under a single organization. More critical,
i
l
jhowever, behind the surface of political representation,
there lies the reproduction of circuits of individual|
capitals. This process involves both the basic contradiction
between capital and labor in the production of surplus, and
Conflicts with other capitals during the appropriation of
surplus revenue via transfers of value (See, Gouverneur,
1983). Each fraction has its own objective interests, i
(distinct requirements of accumulation and separate I
I ;
profitability conditions all materialized during the1
| !
reproduction of its circuit. Consequently, each fraction
represents an alternative logic of accumulation.
In this framework, it is possible to study fractions of
capital in terms of their distinct logics of accumulation.!
| ;
These alternative projects are derived from their common,
I i
requirements of individual reproductions and profitabilityi
conditions. However, we should note that these alternative
logics of capital are not abstract and general categories j
| I
jwhich are derived from the circuit of capital m general.j
iThey are rather derived from the concrete structures of the
i
historically specific social formations. In this sense, in
«
my study I consider state capital, agricultural capital,
[export-oriented industrial capital, import-substituting—
Jdomestic market oriented— industrial capital and finally1
jinternational capital as historically relevant fractions of
capital. Their historical relevance are specific to
i :
I
particular periods.
76
! The individual reproductions of these fractions depend
l
on general external conditions which provide the framework
| J
Within which the law of value operates (Jessop, 1983b,!
I ’
;p.l46)* These external conditions, particularly statei
i . !
jpolicies, influence the individual reproductions of capital,
fractions in distinct and often conflicting ways. They affect!
|
fractions’ surplus production and appropriation processes fori
i
i
example, by changing their relative costs of production,j
efficiencies and protection rates (See, Gouverneur, 1983,;
i
jChapter 7). Political allocation of scarce resources like]
|credits and foreign currencies, selective state subsidies,;
I
jprice and tariff policies, and so on, all have different;
! i
^effects on the profitability conditions and objective-
i
interests of these fractions of capital as discussed later in
jour case study historically.
j Besides these fractions of capital, I also considerj
i '
commercial or merchant and financial capitals are also
considered as relevant fractions in this study. However,
since they are not engaged in the production process and only
; appropriate a portion of the total surplus revenue generated
'by productive fractions, they do not present alternative
capital logics or accumulation projects. !
The conceptualization of capital fractions poses two
i
jproblems. First, the process of concentration and
\ 1
; centralization of capital has revealed that there is strong!
i
77
historical evidence in the direction of dissolving
maintenance of specialization in the forms of the capital
'fractions mentioned earlier (Bryan, 1987). Together with the
development of capitalism we more and more observe the
emergence of big conglomerates and holding companies which
are engaged in all kinds of activities making the division
of fractions difficult to conceptualize. This is particularly]
i
|evident in the present trend of internationalization of*
i
jcapital where most domestic production takes place through
i
jthe joint ventures with foreign capital.
This study retains the fractional divisions in the'
jabove-mentioned forms given the historical specificity of the
I
lease. However, as this problem is becoming more serious an
i j
ialternative theoretical ground may be advisable. One
'encouraging attempt is presented by R. Bryan who defines
i i
national, global, investment-constrained and market-:
constrained fractions of capital based on their spatial
I
'considerations. These fractions of capital are defined inj
terms of the locations— national or international— of the!
j
'production, realization and reproduction phases of their'
( i
i
jindividual circuits of capital where the whole circuit is:
i i
j C..P..C'..M,..C and C, P and M stand for commodity,!
I
productive and money forms of value (See, Bryan, 1987). !
■ A second problem, partly related to the first, refersj
I
jto the status of international capital as a relevant capital
: 78
I
^fraction. As far as its requirements of reproduction and
profitability conditions inside a country are concerned, it j
i |
l
is quite difficult to distinguish this fraction from an I
1 ... .
industrial capital fraction producing jointly. However, m a
Idynamic sense, foreign capital is subject to different
| t
external conditions imposed by the national state which shape
or determine the decisions of entry and exit of international
capital. More critically, international capital presents an|
i
alternative logic of capital accumulation which can be j
' i
pursued by the state in implementing its development j
i
jstrategy.
1 Summing up, despite some methodological and substantive'
problems, in order to transcend the shortcomings of other;
I I
^approaches as illustrated earlier, we have to integrate thej
■relations between the state and fractions of capital. As will;
be discussed later in this chapter, such a framework allows
us to study how different accumulation strategies are:
!
■assembled and implemented by the state and how these
jstrategies are transformed over time.
I While the state-capital relation is the fundamental!
! i
block of this study, there are other relations between the:
istate and domestic classes which are important in studying
economic development. Initially, the state-labor relation is
e '
! i
analyzed on two basic grounds. First, we study how and why;
I i
;the state intervenes in industrial relations. Second, we;
79
analyze how the political struggle of the working class puts
constraints on state strategies. The theoretical issues
behind this relation are elaborated in the introduction of
I
I
i chapter VI.
I
I The second relation is between the state and rural
I
jclasses. In my study I consider peasantry, agricultural
I
Jlabor, small commodity producers, big farmers and landlords.
! as relevant rural classes. Although the economic power of
these classes have been diminishing in Turkey historically
i . . . . . . !
(See, Chapter VI), this relation is quite important in ouri
I study. All these classes' different capacities for surplus!
| I
production and their political influence on the state have!
been significant not only in the making of state policiesj
related to the agricultural sector but also in the
determination of development strategies (See, Grindle,!
I
1986). The surplus transfer process between this sector and
i
the industrial sector is particularly important in our study!
of accumulation strategies. !
I
Finally, the relation of intermedite classes to the
;state is studied as the last block of the ensemble of state/
*
internal forces relations. Although it is quite difficult to’
conceptualize these classes in a social formation for they
have contradictory class positions (Wright, 1985),
intermediate classes have a prominent place in an adequate
i
jtheory of state in the periphery (Ahmad, 1986). The nature,
j 80
interests, power and capacity of state managers, who occupy
key positions of economic and political authority in the
state, are particularly important.
i
j We may consider three major approaches to the
|
conceptualization of state managers. First, they are
i
'conceived as a part of the capitalist class due to their
close affiliation and organic links with capitalists through
mechanisms like direct recruitment (Miliband, 1969). Second,
the state autonomy approach, as discussed formerly, perceivesj
i ;
state managers as actors with their own interests and j
autonomous positions relative to the capitalist class j
I
(Bennett and Sharpe, 1985; Block, 1980; Skocpol, 1985).j
I
Third, state managers are identified as a distinct class,I
'namely; the "state bourgeoisie11. This class is specific to;
the state-capitalist societies where the state is engaged in'
the accumulation process extensively (See, Canak, 1984, pp. |
i
10-12; Evans, 1979; Poulantzas, 1975, pp.188-89). j
i
This study considers only the state managers who have
some degree of authority over the production, appropriation
and distribution of the surplus revenue. As is evident in the
state capitalism literature, the power of state managers is
stronger when the state's involvement in direct production is|
higher. In this context, I conceive state managers as,
functionaries of state capital. In functional terms their!
j
status is very similar to that of corporate managers. j
81
Although state managers do not own the means of
production or productive assets, they have effective control
i
over organizational assets. Through this control they also
control part of the socially produced surplus revenue.
I !
Effective control of organizational assets is the basis of i
■ I
exploitation (Wright, 1985, pp.78-82). State managers'!
I
I
'control over this surplus revenue either takes place in the
'form of a direct control in the production activities of the
: I
I
public sector or in the forms of direct or indirect measures I
like taxes or price policies. The capacity, interests and]
power of state managers are historically determined as a!
i :
result of complex relations between the state and internal
and external forces.
I After discussing the state-internal forces relations we
1
can shift to the second structure, which is the relation
between the state and external factors. Evidently, this
i i
relation can not be abstracted from the first one. Limits!
i
imposed by internal factors influence the state1s relation to
external factors and vice versa. Regarding this relation, we
have to show how such changes in the world economic system as]
internationalization of capital, international economic
i
I
crises, new international division of labor and similar
dynamics impose limits on the behavior of the national state.!
;By integrating the impact of international constraints to the!
i i
study, it is possible to reach a better understanding of the
| 82
]
(states' adaptation and execution of specific accumulation
t
strategies like import-substitution or export-promotionf
I i
!(Jenkins, 1984a; Leaver, 1985). My primary interest is the
role of the international capital in the assembly and
^implementation of accumulation strategies.
I
j The relation between the state and international;
i
i . . 1
capital, for example multinational corporations (MNCs) (See,)
Jenkins, 1984b, Chapter 7), particularly the potential*
(alliances between MNCs, state officials and local bourgeoisie'
> i
[(Evans, 1983), and the impact of this alliance on state
(policies, deserve special attention. Whether the state acts
[as an instrument of foreign capital or has an external
autonomy and if it has, what are the degree, limits and
i
conditions of this autonomy, is an essential issue to be)
analyzed (Roxborough, 1985). Since the capital accumulation
[process now has both internal and international dimensions,;
jthe latter also has certain limits on state autonomy like
i
; foreign markets boycotts, international capital flight or
boycott or reluctance to provide loans.
• After discussing the relations between the state and
I !
I internal and external forces we move to the conceptualization
i I
|of the state's intervention in economic affairs. Next section!
attempts to accomplish this with the help of the key concept,
"accumulation strategies". i
j state and Accumulation Strategies: I
( I
i
As already discussed, under capitalist property
t
relations the state as a rational agent tries to promote and
reproduce the private capital accumulation process in its own
l
interest. This view does not necessarily follow a capital-]
; t
logic formulation, which assumes that the state serves thei
i ;
j"general interest" of capital as mentioned before. Rather,
jit accepts a formulation similar to the concept of
I i
"structural imperative" (See, Alavi, 1982). This kind ofi
conceptualization claims that there is a continuous process]
of re-evaluating and correcting policies and that throughj
^this process the structural imperative imposes itself in thei
;long run upon state policy (Alavi, 1982, p.295). On the other
Ihand, it allows certain deviations or actions which g o j
against the interests of ruling class(es) or to the logic ofj
!
] capital accumulation process. This is not only because of thei
' i
] impossibility of perfect foresight achieved by the state but]
ialso due to the contradictions between individual capitals
j
land the specificity of the political which will be elaborated
later. 1
The state1s intervention in the economy can be studied]
jat two levels of abstraction. This can be done by using the
[~ 84
jconcept of accumulation strategies at a higher— macro— level
and by analyzing the specific policies which construct these
strategies at a lower— micro— level. The argument of
iaccumulation strategies was first developed by the French
I
j"Regulation School" (See for a recent survey of this school,
I
iDe Vroey, 1984) based on the history of the development of
I
icapitalism in the West. Basing on M. Aglietta's pioneering
jwork (Aglietta, 1979), a "regime of accumulation" is defined
i
las a "systematic mode of distribution and reallocation of thej
i I
I social product which brought about a long run correspondencej
(between the changing conditions of production and the!
1 i
changing conditions of final consumption" (Lipietz, 1985,
I
p.xvi).
! I
Another key concept offered by this school is "mode of'
I J
regulation" which refers to "the ensemblement of|
I
I institutional forms, networks and ...norms which assure
i
icompatibility of market within a regime of accumulation, in
keeping with the actual pattern of social relations, and
jbeyond the contradictory...relation among economic agents and
i
t
[social groups" (Lipietz, 1985, pp.xvi-xvii). The regulation
school asks how capitalism could survive despite the basic
i
contradictions in the capital relation? Using the above;
i _ ;
Imentioned concepts they explain this in terms of specific!
j I
institutional forms and strategic conduct. Regimes ofj
i 1
iaccumulation provide specific means of mobilizing counter-
•tendencies to crisis tendencies while modes of regulation j
I . !
provide means of institutionalizing class struggle and making,
I . I
it compatible with the continuing accumulation process j
J ( Jessop, 1988, pp.149-50).
One of the great merits of this approach is its attempt
to show the existence of more than one logic of capital by
conceptualizing different regimes of accumulation (Jessop,
1988, p.151). Moreover, there is no objective developmental!
'logic of capital that inevitably and smoothly generates a
I
jtransition from one regime in crisis to another (Lipietz,
i
1986). Its other significant merit is showing that
accumulation regimes and modes of regulation comprise a
j
'specific strategic terrain on and through which particular
■forms of struggle take place (Jessop, 1988, p.151).
j
| One major weakness of this school is the lack ofj
elaboration of the role of the state and political struggles]
(Gtilalp, 1988, pp.136, 149-50). However, the regulation;
I
approach constructed a basis for an account of thei
determining historical transformation of state forms and
jfunctions by linking them to the regimes of accumulation andj
!to the social forms of integration/repression (Bonefeld,!
1987, pp.99-100). Basing on this theoretical background,
i
ilater a second round of German works studied the role of
i
state and its relation to the accumulation process while-
[still retaining the view of law-determinate development of j
[capitalism (See, Bonefeld, 1987; Jessop, 1988).
! i
j B. Jessop later developed the line of the regulation;
[school by providing a valuable conceptual tool, namely;
"accumulation strategy", adopted in this study. The concept
[of accumulation strategy refers to a "specific economic
i
growth model, complete with its various preconditions and an
[outline of the general strategy appropriate to its pursuit".
i(Jessop, 1983b, p.149). For an accumulation strategy to be!
I |
jhegemonic there are two conditions. First, it should unify;
different fractions of capital under the hegemony of one'
fraction— depending on the stage of capitalist development
(Jessop, 1983a, p.91). Economic hegemony is derived from
I !
[economic leadership won through general acceptance of an:
I i
[accumulation strategy by both hegemonic and non-hegemonic
j
Ifractions. An accumulation strategy is hegemonic when thei
i I
I . . . 1
[immediate interests of the non-hegemonic fractions are also;
secured to some degree while securing the interests of the
i
l
[hegemonic fraction in controlling the allocation of money
i
jcapital to those areas where its specific forms of surplus
revenue are maximized. It is different from economic
I
domination which is enjoyed by any fraction of capital that
is able to impose its own particular "economic-corporate"
I
interests on other fractions because of its relatively strong1
economic position and/or by using some form of extra-economic
87
coercion(Jessop, 1983a, pp.91-92, 1983b, p.149, 1985, pp.348-
149). While economic hegemony results in valorization of
i
capital, economic dominance often leads to a crisis of
jhegemony and devalorization of total social capital (Jessop,
t
j1983a, p.92).
The second condition for an accumulation strategy to be
! !
hegemonxc is its acceptance by subordinate economic classes!
i
( like the working class and the peasantry (Jessop, 1983a,i
I j
p. 94, 1983b, p.150). The rejection or questioning of thej
I
! dominant accumulation strategy by these classes also leads to|
! I
, <
i a crisis of hegemony where the legitimacy of the accumulation1
strategy is no longer valid. Under these circumstances1
i
economic hegemony is replaced by economic dominance and use!
iof extra-economic coercion.
! Summing up, an accumulation strategy is pursued under
! !
;the leadership of a capital fraction— hegemonic or non-i
hegemonic. It is constrained by the interests of other
fractions of capital and economically subordinate classes.
.'Accumulation strategies are also restrained by the specific
international conjuncture and external forces. Under these'
i
I
constraints, there is more than one economic strategy that1
i . !
jean be followed with different effects on fractions ofj
capital and dominated classes (Jessop, 1983a, p.93, 1983b,I
I
; p.150, 1985, p.349). Hence, even when we observe a dominant’
i i
jaccumulation strategy, there are countervailing strategies^
88
which promote the interests of capital fractions other than
the dominant or hegemonic one. Finally, there are several
[tactics that can be pursued under a dominant accumulation
jstrategy. This plurality of tactics provides some room of
jmaneuver for non-hegemonic or non-dominant fractions and
idominated classes to promote their separate "economic-
i
i #
corporate" interests (Jessop, 1983a, p.97).
I
In the literature several accumulation strategies, such
as Fordism, post Fordism, import-substitution, export-
promotion, export-substitution (Lipietz 1982a, 1984) or
1
reformist, socialist accumulation (Fortin, 1979) are studied.
I All these different strategies relate to changes in the
| structure of capital which we may refer to as the
"restructuring of capital". The restructuring of capital
i
involves in the changes of the organization and ownership of,
jcapital, capital-labor relation, shift of capital betweenj
I i
jdifferent production sectors and locations and thej
I I
|establishment of an appropriate system of mobilizing
I
|financial resources (Fitzgerald, 1979, p.50). The state has
I ,
| a significant role in this restructuring process and the
i
! i
purpose of this study is to show how different accumulation
:strategies are formed and executed and to operationalize the
| i
dialectics between structures and strategies. Next section
attempts to study some theoretical issues behind thej
I
f
,operationalization of accumulation strategies and
89
the conceptualization of the dialectic between strategies,
structures and struggles.
The Dialectics between Structures and Strategies:
Adopting this "strategic-theoretical" approach (See
Bertramsen et al.,1991; Jessop 1990), an accumulation project
is considered as the totality of a systematic set of programs
and tactics which are implemented by the state in the
allocation of resources— under its direct or indirect
control— with the objective of maximizing the surplus revenue
production that is essential for economic development. These
projects basically affect the conditions of surplus
production and distribution in the system. Each accumulation
strategy is identified by the dominant capital fraction which
assumes the leadership of the project at a given conjuncture.
The state as the rational and calculating agent selects and
pursues a development strategy which primarily promotes the
profitability of this dominant fraction and secondarily
advances the interests of other fractions. This is because
given the inherent contradictions between competing
particular capitals and scarcity of resources, it is not
technically possible for the state to assemble and implement
strategies that foster the interests of all fractions
equally. As elaborated earlier distinct objective interests
j 90
[and profitability conditions of these fractions are reflected
jin alternative logics of capital rather than forming a
i
general logic which can be pursued by the state. Consequently
i
i
the state sees it to be in its own interest to support the
interests of the dominant fraction with the rationalJ
| j
expectation of fostering economic development. It is also in!
'the interest of the state to advance the interests of otheri
i 1
!fractions whenever they are not in contradiction with the
interests of the dominant fraction or whenever thesei
interests are complementary.
! This type of approach is often criticized on the grounds
i I
of "voluntarism" in the sense that accumulation strategies)
are consciously assembled and implemented (See, Clark,:
i !
1983b). Accumulation strategies are said to operate within
the structurally given environment and voluntarism is the end|
j
jproduct of the disarticulation of structure and struggle
!
(Bonefeld, 1987, p.103). In other words, among the
structurally given hegemonic options one strategy is selected'
voluntaristically rather than seeing the whole process as an;
i :
outcome of social struggles. !
I B. Jessop's response to this criticism is his repeated
jemphasis on the treatment of the capital accumulation process
jas the contingent outcome of a dialectic of structures and;
| i
strategies (See, Jessop, 1983a, p.98, 1985, pp.357-59, 1988,!
pp.156-59). First, there is no single global strategy which!
I
jean unify a given set of social relations in an essentialist
Iform (Jessop, 1985, p.358). Second, structures are thej
Iproducts of past strategies and emergent properties of social
.interaction. While strategies transform and reproduce these
jstructures they are also conditioned by certain structural
[constraints. Structural constraints, however, can become!
I ;
jconjunctural opportunities over time as a result of past,
'strategies (Jessop, 1982, pp.252-54). In this context,
struggle is not disarticulated from the structure since the
[latter is the product of past struggles (Jessop, 1988,
j
Ip.159). There are complex forms of interaction between
i :
[strategies, structures and struggles which should be studied;
: i
at a more concrete level where the specificity of political
i
and interests of particular fractions can be analyzed.
In summary, at a higher level of abstraction, at a given
[point of time, structures— which are the products of past]
i
struggles and strategies— constrain the selection of
strategies as well as the potential impact of struggles on
this process. However, over time the ongoing social
interactions in the society and the results of the effective
strategy transform structural constraints into conjunctural
opportunities. This in turn opens the way for new strategies
through the mediation of struggles. Such an approach)
evidently denies that there can ever be one-to-one
i
i 1
92
correspondence between structures and strategies (Jessop,
1988, p.157). The dialectic between structure and strategy!
is rather a complex process of mutual historical conditioning1
of both moments which are transferable over time.
| At this level of abstraction, however, there is one
jmajor problem: it is not yet operationalized how accumulation
strategies are assembled and implemented. In the abstract,
Jgiven the complex and overdetermined structure of anj
! .
(accumulation strategy, it is not possible to assess a priori]
the success of an effective project. It depends on
! unacknowledged structural conditions of action and the'
I i
jdynamic balance of internal and external forces relevant toi
iits realization (Jessop, 1988, p.157). This forces us to|
study these interactions at the concrete specificity of aj
[social formation. In this context, we have to study a)how and
j i
iwhy a particular accumulation strategy is selected b)how thisj
i
accumulation strategy is implemented and c)how a transition'
I
jfrom this project to another takes place. j
To study the first issue, my case study assumes the,
following accumulation strategies represent the relevant
I
.alternative logics of capital each identified by a fraction
l
I
of capital which assumes the leadership of the project:
a) The accumulation strategy under the leadership of
industrial capital which is producing primarily for import-
substituting domestic markets.
93
b) The accumulation strategy under the leadership of
iindustrial capital which is producing primarily for export;
i i
markets. j
I !
i t
j c) The accumulation strategy under the leadership of
state capital.
d) The accumulation strategy under the leadership of
I
[international capital.
e) The accumulation strategy under the leadership of
agricultural capital.
i
I
f) The accumulation strategy under the leadership of;
i
social capital. Here I use the concept social capital*
'referring to labor-managed production units where capital is
(owned by the direct producers.
i
I These alternative accumulation strategies do not exhaust;
Jail possible options. The state may follow a no-strategy path
I
j
jwhere there is no systematic set of tactics and policies
'which promote the interests of any fraction of the capital.
jWe may also observe the hybrid-strategy case where given the
i
absence of a dominant capital fraction, the state may end upj
i
supporting the interests of all fractions through ad hoc]
policies which are determined according to the continuously
i . . .
(changing relative bargaining powers of these fractions.
Finally, as mentioned earlier, these accumulation strategies
are historically specific to the social formations under,
i [
(study. For example we may consider an accumulation strategy.
L
94
under the leadership of commercial capital which controls the
export or domestic trade of the commodities produced by a
non-capitalist sector.
As discussed before, I assume that under capitalist
property relations the state acts as a rational and
I
'calculating agent under the given structural constraints and!
jconjunctural opportunities which are shaped by past and
t
jpresent strategies and struggles. The selection of a project
jis not a chance discovery but rather a result of a conscious
act by the state. At a given stage of capitalist development
jin a social formation, the state perceives a capital fraction
jas the dominant agent of the capital accumulation process in
terms of its potential to generate and reproduce the maximum
Ivolume of surplus revenue necessary for economic development.1
I :
jThe dominance of this fraction of capital is the outcome ofj
^the stage of capitalist development in this social formation)
as well as this society's position in the international}
division of labor. Consequently it is historically specific.)
Although the success of this project is dependent on many)
i
i
unknown or unexpected structural relations, the state
perceives that to promote the interests of this fraction inj
i :
jits own interest. On the other hand, behind this choice there;
i . j
jlies a long history of political struggles of social classes;
and fractions operating in this society. This requires the
95
integration of the political projects related to these
!
f
jaccumulation strategies to our study.
j The second issue indicated above refers to the
(implementation of accumulation strategies. As mentioned!
t *
pearlier, strategies are formed of sets of government policies'
land programs that shape the production and distribution of
!the total surplus revenue in the economy. This requires us
i
ito descend from the level of abstraction of accumulation
i
(strategies to a more concrete level where particularities ofj
l
the state intervention can be studied. I
i
In general, we may talk about two main types of
'intervention; parametric and pervasive (White, 1984).
: i
Parametric measures refer to a limited role of state where!
I !
there exists an extreme autonomy of economic actors. They may;
be regulative processes of macroeconomic management like
jdetermination of interest rates, exchange rates, protection
I
of trade, subsidies and taxation. They may also be the'
establishment of an institutional context like a systematic
legal frame-work or provision of infrastructure. All these
imeasures can take the form of facilitation where general
I conditions of capital accumulation is maintained and'
i
reproduced or may take the form of substantive support where
i the state supports the market mechanism and allocates
I I
(particular conditions of production to economic agents in
i
J
terms of credits, and so on (Jessop, 1982, pp.233-34;
jstrinati, 1982, pp.18-22).
' Pervasive measures refer to the direct involvement of
' t
the state in processes of industrial investment, production
I
|or circulation. The state no longer relies on facilitating or
(supporting market forces but intervenes against them through
certain measures which restrict the calculations of economic
agents severely. These measures correspond to different typesj
and degrees of direct state involvement in the economic;
isphere like state ownership in the industrial and financialj
sectors, various degrees of planning systems, development and
manipulation of industrial associations, and so on. j
• i
| To avoid a functionalist approach, rather than focusing;
on general functions of the state in the periphery we have
i
to study if and how the state reproduces the conditions
I
|necessary for capital accumulation in each conjuncture
I
(Jessop, 1982, p. 235). Hence, it is important to analyze howj
the modes of state interventions, such as industrialization)
; I
policies, agricultural reforms, regulation of labor|
i
relations, mobilization of financial resources, regulation of
foreign trade, taxation regimes, state economic enterprises,
and so on, perform in restructuring the capital accumulation
jprocess in the economy and influence the particular interests
(of classes and fractions in the society. j
In this framework, the state assembles and implements
J
a rational project to stimulate economic development. During
I
jits implementation, however, because of unacknowledged]
I
[structural constraints or unexpected conjunctural
developments the rationality of the project may disappear
lover time. At this moment we can switch to the third issue
I
[which is the conceptualization of the transition from one
j
[accumulation strategy to another. ,
I i
1 i
Up to this point, I have discussed the concept of |
, "rationality” as an organizing principle for the state's
I
Jdecisions. However, there is no rule dictating that the state
'always decides and acts rationally. We may observe several!
I
cases where the state acts irrationally due to various1
I
ifactors noted below. Then rationality may be a temporary
! stage in the state's behavior and may later disappear as a|
* t
I
result of the dialectic between strategies, structures and
struggles over time. As discussed below, the irrationality
I
i
of development strategies serves as a catalyst in the
; transition from one project to another.
| First, when we refer to the state's assembling and
.implementation of a rational accumulation strategy this
rationality is valid under the present or expected conditions!
and constraints of the time. However, over time the state
i
faces several unacknowledged structural constraints,
i
[unexpected conjunctural shocks or unintended consequences of'
jsocial struggles. All these developments evidently put
l 1
^arying degrees of restraints on the rationality of the I
i
effective project.
Second, an accumulation strategy may turn out to be
jirrational when underestimated or miscalculated internal
I
contradictions of the project become effective later. For
example the limits of depressing wages or prices of the
i
'agricultural goods or the availability of external loans mayj
jail appear to be different than the level that the state hadj
{forecasted. !
|
I Third, the state may simply fail to perform well because
i i
I j
jof the selection and execution of wrong, dysfunctional orj
[inconsistent policies or faulty implementation of the right'
i i
programs. 1
j Fourth, as mentioned earlier the state apparatuses are;
{inherently contradictory institutions since they are subject
i
ito competition and struggle among different class and1
, fractions. There is always a room of maneuver for non-
hegemonic fractions and subordinate classes to influence
state policies through their influences over state
I
apparatuses. Since their demands often conflict with the!
project's main structure the accumulation strategy's
rationality is distorted.
!
Finally, while implementing its project the state mayj
I
;fail to adjust its policies and programs to the changingj
balances and transformations taking place in the society as!
| I
ja result of political constraints. Particularly, the state'S|
; commitment to its political allies— classes and fractions—
to retain its political power is often translated to a rigid
|extension of the old project that systematically promotes the
interests of these groups. These class and fractions,
however, may no longer be capable of generating economic
i
jdevelopment. If the resources continue to be allocated
[primarily to these no longer efficient groups due to
I
ipolitical restraints the project's rationality vanishes over
i I
Itime. i
i
i
When a development strategy moves from its original
rational path the state reacts in a historically specific way
depending upon the concrete political struggles and the'
severity of the hegemonic crisis. As mentioned earlier, a;
I
project may be hegemonic in the sense of its capacity to
promote the interests of all fractions and dominated classes
in the society while priority is given to the hegemonic:
fraction. A project may also be non-hegemonic or dominant!
when it only supports the interests of one fraction or class
while suppressing other interests in the society often with:
coercion. In this framework we expect that a project becomes
jeconomically dominant when it loses its rationality.
! While an accumulation strategy is rational and:
hegemonic, besides promoting the interests of the dominant1
100
fraction of capital, the state also advances the material
conditions of other fractions deliberately, indirectly or I
»
unintendedly. When the project loses its rationality andj
^transforms into an economically dominant strategy, these non-
hegemonic fractions resume to organize perceiving that their
interests are threatened. They work hard to organize their
own alternative projects, to form their political parties and
i
other forms of representation, to influence public opinion,j
ito convince international institutions, so on. At this momentj
Jtheir economic power, which has been derived during the
implementation of the present project, is crucial, as noted;
i ;
I
jbelow.
j While the crisis is deepening, if there is noj
|alternative logic of capital and its representative fraction!
I *
] ;
'that assumes the leadership of this alternative project, we
do not expect a transition to a new accumulation strategy.
]
However, if such an alternative exists a transition may take
place. This alternative project is assembled by a fraction
which has strengthened economically either because of the
past policies of the strategy in crisis— directly, indirectly1
or unintendedly— or by the unexpected conjunctural
(developments. 1
i I
i
! We have mentioned two necessary conditions for a
'transition from one accumulation strategy to another. First,
I 1
a project should be in a deepening crisis and lose its
1 101 ~]
I
rationality in terras of generating economic development and
i
i
fostering the material conditions of all classes and the
state. Second, there should be an alternative capital logic
, t
jthat may replace the project in crisis under the leadershipJ
? j
'of a capital fraction which organizes itself politically and]
i
has the capacity to generate economic development thanks to
its economic power which has been augmented recently.
; However, these conditions are not sufficient to
! i
'guarantee a transition to a new project. In such a period of,
crisis there may be three potential developments. First, the
government may be convinced of the rationality of the
i i
Alternative project and if it is relatively autonomous from!
the dominant fraction in power or expects to retain itSj
political power even it switches to this new strategy, it may
jreplace the project in crisis with the alternative one.
(second, the alternative project is supported not by the!
i *
government but by the opposition parties. Upon an electoralj
. I
victory of these parties the new accumulation strategy is|
implemented. j
j
j Finally, the government is bounded so heavily with its
i
present political alliances that switching to a new strategy
lis easily translated to the loss of political power. It:
jcontinues to pursue its own project persistently without
jgiving significant concessions. If the electoral balance ofi
the society in crisis is unlikely to change because of the)
102
state coercion and the state becomes increasingly
i 1
.authoritarian, we may observe a political regime change. Most;
i i
likely, the military takes over and an interim government|
t
implements the alternative project.
j The analysis of the dynamics of political struggles and
.political regimes are beyond the scope of this study. But
political struggles are integrated in terms of their!
I . I
[relevance to our understanding of the role of the state in;
assembling, implementing and changing accumulation
{strategies. This study does not explain how and why regimes
i
of political representation change or the details of[
I i
political struggles to capture state power.
The state's political intervention through the forces
land relations of political domination (Mouzelis, 1986) can be
I -
[conceptualized by using the concept "hegemonic project";
! I
{developed by B. Jessop (See, Jessop, 1982, 1983a, 1983b)j
I
which is linked to a specific accumulation strategy. j
However, theoretically it is very difficult to|
conceptualize the correspondence between accumulation
i
I
^strategies and hegemonic projects (See, Bonefeld, 1987;
Clark, 1983b; Gulalp, 1988). The state may organize an
accompanying hegemonic project with an accumulation strategy!
to legitimize its rule. However, they are not functional
i
counterparts. We should rather study the concrete political
103
and ideological structures and struggles to determine how and
in what concrete form this accumulation strategy and
!
hegemonic project correspondence is realized (Giilalp, 1988,
I r
p.153).
1 Similarly, it is very difficult to specify the forms of
political representation which are necessary to the interests
[of capital (Jessop, 1983b, p.156). We observe a political
I
I
regime/ hegemonic project/accumulation strategy totality ati
a given time and in a specific social formation. This,
[involves explicit class alliances, a specific form of
political representation, implementation of a particular
! |
development strategy, and a set of ideological forms of:
i !
^domination and restructuring of the state apparatuses!
i
(Johnson, 1986a, 1986b). But this totality is not necessarily
I
formed of functional counterparts. We should also look for1
j i
structural explanations within the politico-military sphere
i
and study the reproduction requirements relevant to a
i % t \
structural explanation of long-term political developments.;
1 !
[in other words, both economic and political reproduction
I
I
Irequirements are directly relevant to the establishment of
new political regimes (Mouzelis, 1986, p.194) although there
| I
|is no necessity in a concrete case for these requirements to
be realized in the form of a new state regime.
In conclusion, the possibility of an adequate generalj
I
solution to the conceptualization of the correspondence
i
! 104
i
between accumulation strategies, hegemonic projects and
| |
political regimes is denied. The answer must be found at the.
Level of specific conjunctures by the operationalization of
the dialectic among strategies, structures and struggles.
i
I
.The State in the Periphery;
i i
This chapter has not developed a theoretical approach
: i
to the state in the periphery based on the peripheral i
J
jcharacteristics of societies in the Third World. The state
'has rather been analyzed focusing on the dominance of
i
capitalist property relations. At this moment the question isj
can we develop a theoretical approach to the peripheral,
! i
istate? Or is the state in the periphery also subject to the
same constraints and conditions which we observe in the
advanced capitalist countries?
In the literature several approaches conceptualize thej
mtate in the periphery. Brief comments shall suffice. First,
,as mentioned in the previous chapter, the world system and
(dependency theories study the peripheral state by emphasizing!
its "dependent" structure. The dependent nature of the state~i
-in terms of financial, technological, military or political
dependency— on the international bourgeoisies and their
metropolitan states is its fundamental characteristic!
(Carnoy, 1984, p.189). The peripheral state is conceived as|
i
1 105
an instrument of foreign capital and is organized to meet the (
needs of the international bourgeoisie given the weak nature
.of local capitalists. The peripheral reproduction is derivedj
from the metropolitan reproduction (Ziemann and Lanzendorfer,
1977, pp.157-60), and the peripheral state is derived from
|the organization of the relations between the peripheral
Isocial formation it administers and imperialism (Vielle,
;i988). I
While the other theories agree on the significant rolei
I
of the peripheral social formations' subordinate position in
i
jthe international economic and political system, they extend
!the concept of dependent state by putting much more emphasis
1
| ( . I
|on internal structures and struggles m their analyses (See1
for example, Cardoso and Faletto, 1979). The "state;
i
i |
.capitalism1 1 school emphasizes the emergence of the peripheral |
» I
}
state as an autonomous class actor which participates
;actively in the capital accumulation process (See, Canak,
j ,
1984). Particularly, the role of the state bourgeoisie and
!the correspondence and antagonism between the interests of
this class and the interests of national and international
capital are crucial for their analysis (Carnoy, 1984, p.200).
!
; Similarly, the "bureaucratic-authoritarian school" based
pn H. Cardoso and E. Faletto1s class struggle view, extends;
t 1
:the dependent state argument to explore the correspondence!
I i
[between political regimes and stages of accumulation (See,:
Collier, 1979; O' Donnell, 1973). While the bureaucratic;
i i
[authoritarian school accepts the internationalization of the,
\
! I
productive structure as a crucial characteristic of the ;
peripheral state, the state is basically a social
relationship of domination which is rooted in the class
jstructure that in turn has its foundation in capitalist
relations of production (O'Donnell, 1979).
j All these approaches have their own merits and
shortcomings. As discussed formerly, the "dependent state"
, I
'approach puts too much weight on external forces and;
I :
[consequently derives the state from the requirements of i
I i
'capital accumulation in the metropolitan centers in ai
i . i
functionalist mode. The "State Capitalism" approach theorizes:
a specific form of the state. While it is quite useful in the
conceptualization of the state managers and state capital it
|Can not be generalized for all forms of peripheral states.j
^Finally, the "bureaucratic-authoritarian school" focuses oni
i
the rise of the authoritarian state in Latin America.
i
Although it explores powerfully the emergence of bureaucratic
authoritarian states as a result of the crisis of
industrialization and the defeat of populism, its main1
interest is in studying how the form of the state changes— j
into a non-democratic form.
j A final approach to the peripheral state takes the
: i
"relative autonomy of the state" as its point of departure.;
i
\
The use of the concept of relative autonomy in the Third
j
World was introduced by H. Alavi whose work on Pakistan
! i
'started the "post-colonial state" debate (See, Alavi, 1972;i
'Leys, 1976; Saul, 1974). In this approach, the state is
i
argued to be autonomous because a) it assumes the role of a
mediator rather than being the instrument of a single class
b) the inherited over-developed state apparatus of the
^colonial structure was not brought under the control of any1
i ;
indigenous dominant class (Alavi, 1972) c) the economic,
i :
political and ideological roles of the peripheral state arei
central in the society (Saul, 1974). j
Although the post-colonial state argument brings ani
!
important insight regarding state autonomy it has its own I
! . !
problems (See for its critique, Giilalp, 1987; Ziemann and;
I !
Lanzendorfer, 1977). Particularly, as indicated by C. Leys,
|it starts from the centrality of the state as given and thenj
!
Iputs the class character of the bureaucracy in the center
(Leys, 1976, p.43).
In the context of the peripheral social formations, thej
relative autonomy of the state has been linked to several
factors which serve as its limits and conditions in the
recent literature. Among the conditions of state autonomy we
may consider the state's increased control over the economy,
! i
weakening of international capital, the weak status of thej
i
local dominant classes, hegemonic crisis among the dominant I
108
classes and fractions of the society, alliances of the state
i
with subordinate classes, or a military and/or political
threat to the country coming from outside (See, Hamilton,
jl982; Richards, 1986, Chapter 4; Rueschemeyer and Evans,
jl986; Skocpol, 1979, 1986; Thomas, 1984, Chapter 6). The!
i
'autonomy of the state, however, is limited particularly by
(
I
the structural dependence of the state capital in a similar
i
manner as mentioned before.
I
j If we conceptualize state autonomy as state managers'
j ,
potential to define and pursue their own interests andj
i . i
projects autonomously, i.e. independently of and against the'
i |
jinterests of dominant classes and fractions, we have already!
jargued that under capitalist property relations it is not
possible to observe this outcome given the structural
!
dependence of the state on capital. If, however, we argue|
that this autonomy is relative depending on the limits^
limposed by capital, then we face an important theoretical
problem. It is not clear what is meant by the concept
| I
-"relative". In other words it is an ambiguous terra since wej
! !
do not know how "relative" relative is its degree of.
comparability among different cases. In order to avoid this
t
problem, we have to operationalize the concept of relative
!
autonomy of the state. This in turn requires a historical and!
I
concrete study of structures and struggles in the social!
i
formation which would illustrate whether there exist certain
j
109
conditions that lead state managers to have the capacity and
I
incentive to act against the interests of the ruling classes.
! Within the theoretical framework developed here, the j
, i
i
relative autonomy of the state is not crucial as long as the
state follows rational rules of behavior to foster its!
I
material conditions. It has been argued that it is to the
state's own interest to advance economic development which
is dependent on the reproduction of the dominant capitalj
!fraction(s). However, because of the reasons noted earlier,:
jthe rationality of accumulation strategies pursued by the
!
state deteriorates over time while another dominant fraction
!
may emerge to assume the leadership of its own alternative
project. Under these circumstances, while the economic and
i . . . . i
political crisis are deepening the state autonomy gams
significance. During these transitionary periods we may make
j |
-sense of the relative autonomy of the state. However, this!
t
Still requires the operationalization of the concept through
I
studying historically specific concrete economic and
political structures and struggles. j
! Where does all this leave us in our efforts towards the!
j i
|conceptualization of the state in the periphery? Initially it
Jis necessary to reemphasize a point indicated in the
methodology section of this chapter,namely my denial of the;
possibility of developing a determinate theory of the
iperipheral state. The highly fragmented and differentiated.
! 110 j
nature of the Third World prevents us from building a general;
theory of the peripheral state that can be applied to i
I
perxpheral societies. This appearance of the periphery— one
{
of the main themes of the previous chapter— requires us to
derive the state in the periphery from the specific
totalities of the internal/external structures of peripheral
i
social formations. !
I !
l ' 1
I Furthermore, this chapter's theoretical structure!
j :
focuses on the peripheral social formations where capitalist
property relations are dominant. Otherwise, the rules of
i
|
'reproduction, class structure and the relations between the
I
capitalist and non-capitalist sectors evidently would be J
different. As I mentioned before, the dominance of capitalist
!
property relations enable us to construct our conceptual
framework based on material interests and contradictions
resulting from these interests. .
I The most frequently cited common characteristics of the
i
peripheral states are the dependence on international capital
land centrality of the state in the economy (See for example,
! ;
jPetras, 1984b; Saul, 1974; Ziemann and Lanzendorfer, 1977).
‘ However even these common properties show significant!
Idifferences among different social formations. The specific
i
internal structures of these societies, for example, lead to
distinct forms of articulations to the international economic
Isystem and to different positions in the international
j 111
division of labor. Similarly the degree of the state's
l
centrality varies significantly among different countries
Lepending on these social formations1 specific structures.
In the theoretical framework developed in this study, j
!
we have considered two common characteristics of the
peripheral social formations which are useful in our
1
conceptualizing of the peripheral state. First, as mentioned
briefly while discussing capital fractions, the history of
the development of capitalism has showed a strong trend!
toward centralization and concentration of capital. In the i
i
I 1
advanced capitalist countries we observe a nearly monolithic'
structure of capital where individual capitals are formed of
the aggregation of various fractions of capital mentioned.
This makes it theoretically very difficult to differentiate
I , '
among these fractxons xn terms of thexr dxstxnct xnterests
and requirements of profitability. However, in the periphery,
given a less advanced level of capitalist development and a
lower degree of incorporation into the international economic
I
'system, we observe distinct capital fractions with their
conflicting interests and logics of capital accumulation.
[This provides a wide spectrum of alternative projects which
may historically emerge as a result of the specific political
j I
Jand economic developments in one social formation. As thej
jtendency of centralization and concentration of capital
becomes stronger, the state's room for assembling and
I
implementing different strategies increasingly narrows down.
Consequently, the state usually ends up in restructuring the
capital accumulation process while the dominant fraction of
i
capital retains its leadership of the accumulation strategy
in effect— since there is no rational alternative on the
i
S
I
agenda.
! Second, partly related to the less advanced level of
1 i
i
capitalist development and partly to the lack of democratic,
i
channels of incorporation, the state usually resorts to:
coercion in order to retain its power and pursue its project
!
against the wills and protests of non-dominant fractions and
dominated classes. Consequently, in general, economically
!
^dominant rather than hegemonic projects are the rule in the:
periphery. This, on the one hand, deepens the accumulation
crisis through the increasingly irrational nature of the
! |
project because of devalorization of the capital and alreadyj
| !
less developed nature of the economy. On the other hand, the
Legitimization or the crisis of the hegemony becomes more
severe as a result of the increasing use of forces and
relations of domination. The outcome is volatile transitions■
among different accumulation strategies and a consequent
state of economic and political instability which often
repeats itself over time. i
I *
1 These characteristics of the peripheral state are!
1 '
applicable in general to many peripheral social formations.1
j 113
However, the specific appearances of these properties depend
on the concrete structures and struggles of these societies.
!
I
Based on these theoretical discussions, the following
(
i
hypotheses will be examined and tested in this study.
I
Hypotheses:
i
I This dissertation proposes three main hypotheses to
explain the state1s assembly and implementation of
development strategies and transitions from one accumulation
i
project to another. These hypotheses are constructed to j
i
provide some general guidelines for the conceptualization of|
: i
i I
jthe state1s role in the development process of peripheral!
i I
I
social formations.
Hypothesis I: The state acts as a rational actor with its j
I
I « • ■ *
own institutional self-interest to promote economic
development in the society. Under capitalist property
t
relations this is translated to the reproduction of the.
capitalist class. At a given period, depending on the!
' . I
historical specificity of the social formation under study,
we observe alternative capital logics under the leadership
!
j
of different fractions of capital which may be pursued by thet
state. In order to foster development the state assembles and
implements a rational accumulation strategy which is one of
i
114
the alternative projects. This project promotes primarily the
I
interests of the dominant capital fraction which has the
capacity of generating the maximum volume of surplus revenue
i
I
needed for economic development and in turn to advance the
j
material conditions of all classes and fractions as well as j
i
of the state.
Hypothesis II: The assembled and implemented accumulation
strategy may remain rational in terms of fulfilling the !
| i
expectations of the state in stimulating economic j
f _ (
development. However, because of several unacknowledged, j
I i
unanticipated or unintended consequences of structural and;
J i
conjunctural factors and also due to the consequences of the
policies of the strategy itself, over time the rationality!
of the project may deteriorate. An economic and political
crisis follows. On the one hand, the project fails to j
j I
reproduce the capital accumulation process and leads to
i
t
devalorization of capital and economic decline. On the other
j
hand, it loses its legitimacy for the non-dominant fractions,
of capital and dominated classes leading to a crisis of |
hegemony. The political struggles of these classes and
l
fractions intensify fights to defend threatened interests
against the state. j
115
Hypothesis III: The deepening of economic and political
!
crisis produces an environment conducive to a transition to
a new accumulation strategy. However, for such a transition
1 . .
to take place two other necessary conditions have to be met.
First, there has to be an economically and politically
powerful non-dominant fraction of capital with its own
alternative hegemonic project. Second, there should be i
i
political means— decision of the executive or a change of the
t
government either through elections, resignation or a non-
kemocratic coup— that will replace this alternative project
with the strategy in effect. If these conditions are
satisfied a new alternative accumulation strategy is
i
implemented. If not, either a restructuring of the capital '
is organized under the leadership of the currently dominant j
capital but by giving certain concessions or the society'
moves further into a deeper crisis and chaos while the state
i
persistently pursues its own project often with extra-
i t
economic coercion. j
! In the following chapters, I intend to analyze and test j
l i
these hyphotheses while studying Turkey between 1930 and
1980.
I
i
!
116
CHAPTER IV
THE 1930S: ETATIST ACCUMULATION PROJECT
The decade of the 1930s is generally accepted as the era
j
when the roots of industrial capitalist development were,
| formed in Turkey and primitive capital accumulation was'
achieved. The political economy literature about this period
reflects a consensus on the reasons behind the etatist
'policies of 1930s (See Boratav ,1982; Giilalp, 1983; Hershlag,
1968; Karpat, 1959; Keyder, 1987; Rozaliyev, 1978; Tekeli and
Ilkin, 1977; Tezel, 1982; Yerasimos, 1976).
The main reason behind the formulation of this strategy
is the impact of the Great Depression which squeezed the
Turkish economy on two fronts. On the one hand, generall
i ■
i
decline in world trade volume decreased the prices of
Turkey's traditional agricultural exports. This in turn
significantly reduced Turkey's export revenues. While the
volume of exports increased from 670,000 tons to over 1
million tons between 1929 and 1932, the value of these
i
|
exports dropped from 155 m. TL to 101 m. TL (DIE, 1962,
p.246). During these years, wheat , cotton and tobacco prices
declined by 50%, 60% and 50% respectively (Rozaliyev, 1978,
117
p.72). On the other hand, curtailment of foreign trade cut
down traditional Turkish imports. Since Turkey imported most
of its primary consumption goods like flour, sugar and
textiles by the end of 1929 (Giilalp, 1983, p.28) the impact
of this curtailment was a crucial shock to system's
reproduction. Between 1929 and 1932 imports dropped from 996
m. tons to 417 m. tons in quantity and from 256 m. TL to 86
m. TL in value (DIE, 1962, p.246). These drastic decreases in
export revenues and imported goods convinced the state to
oecome involved promptly in surplus production.
Before the depression, the state basically relied on the
surplus coming from merchant capital. Revenues of merchant
capital historically flowed from the export revenues of
agricultural crops produced by the peasantry and the
circulation of imported goods. At this stage, the Turkish
economy, in its close articulation to the world economy, was
dependent on surplus revenue generated mainly in the
commodity circulation sphere. Following the depression, state
revenues coming from tariffs and consumption taxes dropped by
10% (Tezel, 1982, p.391). Total government revenues declined
.rom 222 m. TL in 1929 to 169 m. TL in 1932 (Okyar, 1965,
pp.50-1). These developments threatened the interests of both
state and social classes dependent upon the existing property
relations.
118
Under these compelling conditions, the new candidate to
become the hegemonic capital fraction who would act as the
engine of the development process could not be industrial
capital, which was virtually non-existent. Even the most
developed industry — textiles— was able to supply merely
l/4th of the internal demand (Baskaya, 1986, p.30). Industry,
which was primarily concentrated in food processing and
textiles, was dominated by handicraft production rather than
large-scale manufacturing units that could produce surplus on
an expanded scale (Baskaya, 1986, p.31, Rozaliyev 1978, p. 38-
55, Tezel 1982, sec. 8). Among 65,000 sites in operation in
.921, plants employing more than 100 and 5 workers were only
23% and 8.9% respectively (Hershlag, 1968, p.54). Capital
invested by private companies in 1932 was less than £4000
[Fisek, 1969, p.68).
A second potential candidate was the agricultural
capital but the situation was quite complex. On the one hand,
agriculture had a great potential to produce the necessary
surplus for the state and for reproduction of the social
system because of unused or poorly utilized resources and
vast amounts of raw materials that could be inputs to the
industry. On the other hand, property relations in the
agriculture were fetters to economic development. In the
1920s, the concentration of the land ownership was very high
'(Silier, 1981, pp.9-16).
119
There were mainly two classes living in the rural areas,
i l ’ irst was a huge population of subsistence peasants who
: farmed tiny parcels. 85% of the Turkish peasantry owned 3 to
6 hectares of land (Berberoglu, 1982, pp. 58-60; Silier,
1981, p.12). This over populated land utilization was one of
the major blocks to development in agriculture. Moreover,
devoid of the necessary means of production, these farmers
were under heavy exploitation by usurer-merchants and/or
usurer-landlords which contributed to the concentration of
I
land ownership during 1920s and 1930s (Silier, 1981, pp.40-
46). The second class was composed of landlords and absentee
landlords— living in cities— who owned vast amounts of land.
However, they either farmed a small portion of their estates
with inefficient techniques (Silier, 1981, p.16; Tezel, 1982,
pp.337-41) or rented them to peasants who produced
inefficiently as well. Surplus (rent, interest and profits)
was used for unproductive consumption activities by the
landlords rather than for investment in agriculture.
These existing relations of production and the
resistance of the landlord-clergy alliance to change in
property relations in the rural areas imposed significant
constraints upon the state. It was nearly impossible at that
;ime for the state to promote a development strategy based on
-he surplus generated by agricultural production. That would
120
inevitably require a land-reform and intense modernization
efforts.
Given this picture, the state confronted a class
structure which was.potentially unable to stimulate economic
development unless the state itself acted as the engine of
development. Facing a negligible industrial bourgeoisie,
stagnant and inefficient agricultural producers, and a
disinterested international capital in the middle of a severe
depression, the state's rational choice was to pursue an
etatist accumulation project. The main idea was to finance
rapid industrial development through state capital with the
surplus transferred from the sections of the economy which
were not in a position to threaten the state1s political
power. These groups naturally were workers and peasants. This
surplus transfer would fill the gap in commodity circulation
created by the depression.
According to the official explanation, the government
had to take an active interest in the economic field to
safeguard vital and general interests, to ensure the welfare
of the nation and the prosperity of the state (Hershlag,
1968, p.69). This functionalist approach under the compelling
conditions is widely accepted in the literature referred
formerly.
When we return to the effects of this period on internal
class structure, we find one controversial area: the relation
121
between the state and the bourgeoisie. The general consensus
is that, the state's policies were not in the direction of
substituting for the private sector but rather complementing
it (Boratav, 1982; Giilalp, 1982; Hale, 1981; Kepenek, 1986;
Tezel, 1982). In this perspective the state is considered to
perform policies to strengthen the bourgeoisie so that this
class can manage the capital accumulation process effectively
claiming the leadership. It is further argued that etatist
policies served to extend bureaucratic rule in a coalition
with a newly developing bourgeoisie (Keyder, 1987).
This line of argument defines the main objective of the
etatist development strategy as the creation of the
bourgeoisie. However, as emphasized in the previous chapter,
any development strategy' s main target is not to create a new
class with an expectation that it will serve the interests of
the state and nation better in the future. Instead, the
state's main concern is to promote an accumulation project in
:he short-run that will effectively generate the surplus
revenue necessary for the reproduction of the whole society
including the state itself. While configuring this new
project, current surplus creation capacity of the existing
classes is far more important than their latent potentials
which may be realized in the long-run if supported. The
Ltate's primary concern in 1930s was to achieve economic
development not to secure the interests of the bourgeoisie.
122
In order to support this view, first it may be shown
clearly that this development strategy was not the choice of
:he bourgeoisie. Actually, the bourgeoisie's plan was
presented in the "Sakir Kelebir plan" which was submitted to
:he prime minister in January 1930. The plan was prepared by
:he efforts of the Minister of Economy, Mr. Sakir Kelebir,
who was very close to the Is Bank group - the group formed by
representatives of the bourgeoisie around the Is Bank which
was founded in 1924 to support private industry. Briefly, the
main goal of the plan was to have an import-substitution
program without restricting foreign trade volume. It proposed
encouragement of the private sector and foreign investment
for economic development. Moreover, it suggested that the
state give export incentives to the private sector. State
intervention was heavily downgraded. Finally, it proposed
free-enterprise zones. Clearly the plan was recommending and
pushing to restructure the economic policies of the state in
the direction of directly supporting the private sector for
Turkey's industrialization (for the Sakir Kelebir plan, see
Tekeli and Ilkin, 1977). This plan, however, was suspended
and Mr. Kelebir resigned in Fall 1930.
Furthermore, in the parliament, the deputies close to
business circles severely criticized the etatist policies of
the government developed by 1932 (Boratav, 1982, p.121-25).
123
These reactions later led to the appointment of a new
Ministry of Economy, Mr. Celal Bayar, who was close to the Is
iBank group. He worked to compress the extreme tendencies of
i
jetatism (Boratav, 1982, pp.125-28).
j Against Mr. Bayar*s efforts, however, there was a strong
opposing tendency in the government backed by the prime
i
(minister, Mr. Ismet Inonii. This group extended statej
iintervention further into the arena of the private sector.1
I
jBayar's appointment intensified the conflict between,
^bourgeoisie and bureaucracy in the conceptualization ofi
I i
jetatism (Yerasimos, 1976, p.1302). This opposing tendency can!
jbe observed in Mr. Recep Peker's (former Minister of Economy)
speeches during the 1931 Party Congress and the 1932 budget
I
(talks in the parliament (Boratav, 1982, pp. 114-121) and in!
i |
the famous article written by Mr. Inonii in 1933 which hinted
of the need for the state to enter even the fields mainly inj
the domain of private capital (Hershlag, 1968, pp.70-1). The*
i !
jmost remarkable example of this etatist group's efforts is
the annulment of customs duty exemptions granted to the
i
private sector for machinery imports in 1932 (Tezel, 1982,
p.265). This act played a prominent role in the replacement
jof Mr. Peker by Mr. Bayar. Despite Mr. Bayar1s offsetting
|influence, we see the strengthening of the etatist programJ
jin the 1935 party program (Boratav, 1982, pp.136-38). Even
, 124
I
i
Mr. Bayar's speeches sometimes supported this trend (Boratav,
1982, pp.139-48).
j Not only were Mr. Bayar's opinions not properly
'indicative of the general trend, but also the official
I
declaration of loyalty to private capital contradicted!
economic reality when the actual development policy relyiedi
- . . . - . . . . . . - . - .................... j
,1968, p.72). As Hershlag puts it, the private economy'
I
j
'Continued to exist alongside the expanding state economyj
i I
{mainly through inertia and the state's reluctance to move!
!
forward to "socialism" given the political and ideological.
structure of the society (Hershlag, 1968, p.72). f
; i
In the 1930s, we witness the establishment of a network!
of state monopolies and banks, industrial enterprises and
marketing companies owned by the state, nationalization of;
I
services and mines and a growing disinterest in private!
[enterprise (See Boratav, 1982; Hershlag, 1968; Oyal, 1981).
These state enterprises acted as profit seeking companies and
their profits were reinvested in industrial development
(Hershlag, 1968, p.90; Rozaliyev, 1978, p.165). The state'
' I
established the DSO (State Industrial Office) in 1932 in'
order to bring joint-ventures with the private sector under
the public sector's control as well as to provide some degreej
of supervision of private investments (Oyal, 1981, pp.91-93).I
f
i
. . 1
As an example of extensive state exposure in the economy,we'
125
observe that, between 1933 and 1938 the total capital
expended by Sumerbank— which was established in 1933 to
manage public investments in private industry— for the
I
i
jestablishment of new companies increased by 632% from 2.56 m.
TL to 18.78 m. TL (Oyal, 1981, p.101).
Moreover, prices of State Economic Enterprises (SEE)
were set high enough to realize a transfer of surplus fronJ
j |
jother sectors of the economy to the state. Finally the state
I i
iwas also in the position of capturing the protection rentsj
' i
derived as monopoly profits similar to a import substitution
1
regime (Boratav, 1977, p.9, 12 ). This is unlike the behavior
of SEEs in the recent history. This is not unexpected, since!
the state acted as the dominant capital fraction in the:
l
generation of surplus revenue during this period. ;
i j
The state1s magnified role through the above mentioned^
economic enterprises and 5 year development plans (See Guncej
!
,1967; Hershlag ,1968, ch 8; Tezel , 1982, sec. 9.1-4) had a l
i |
isignificant effect in the industrial sector. The first plan!
concentrated on consumer goods production in an import-
!
substitution framework. The reflection of this import-
substitution tendency can be observed in the Law that was,
passed to establish the Sumerbank (Oyal, 1981, p.96). The
I
isecond plan aimed at the development of producer goods
i
!production. Through this strategy industrial output and
i
'employment increased substantially in several key sectors
| 126
like sugar, coal, mining products, textiles, steel, cement
and paper where products were previously imported (See Tezel,
i
■1982, pp.253-4). The growth rate of industry during 1930s was
11.6% in constant prices (Boratav, 1987, p.91; Boratav, 1988,
lp.54). The share of industry in GNP -in current prices-
I
increased from 9.9% in 1929 to 18.3% in 1939 (Boratav, 1988,
j
l p . 5 5 ) . Between 1 9 3 2 and 1 9 3 9 real value added increased by
^ 2 3 2 % (Tezel, 1 9 8 2 , p . 2 4 9 ) . Public investments rose from 1 4 m
TL in 1 9 2 9 to 2 0 1 m. TL in 1 9 3 9 — in 1 9 4 8 prices (Tezel,
1 9 8 2 , p.2 5 1 ) .
In practice state policies during the 1930s were quite
restrictive against private enterprise (Karpat, 1959, p.87).j
jFor example, laws passed in 1936 and 1937 granted to
government the right to examine the expenses of private
1
|enterprises, fix their prices and control their wage payments
I
to prevent open competition with government companies as in
i
the textile industry (Hershlag, 1968, p78,102). June 1933!
amendments to the law founded a "State Office for Industry"
I
and implemented a preferential treatment of state development
i
projects over the ones initiated by the private sector
(Hershlag, 1 9 6 8 , p.7 9 ) . For example, Sumerbank released most
of its credits to the public sector establishments (Oyal,
j l 9 8 1 , p. 1 0 4 ) . These and similar acts of the state constituted
a 'crowding-out' of the private sector (Singer, 1 9 7 7 , p.1 6 3 ) .
127
However, it is too strong to claim that, the state in
I
the 1930s attempted to eliminate or weaken the private
i
sector. For instance, we do not observe any significant state
takeover of private companies. However, the state's main
!
[concern was to promote its own project; maximizing surplus
revenue through the direct control of state capital. Private
[capital did not appear as an equally strong participant in
i
this project but was not under direct attack from the state.
Moreover, one can not deny the positive indirect effects of
state-led industrialization on the bourgeoisie. This point isj
i |
|usually referred by many scholars as evidence to support the.
thesis that etatism's main intention was to nurture the!
|
bourgeoisie. However, this positive impact on the bourgeoisie
!
[was the indirect result of etatist policies rather than the
i |
; primary target of the project. i
The effect of etatist policies on several fractions of'
the bourgeoisie was uneven. Coupled with the international!
crisis, foreign trade policies of the state such as import
[restrictions and bilateral agreements that led to direct
state imports (Tezel, 1982, sec.5) sabotaged the dominance of:
merchant capital linked to foreign trade . On the other hand,!
i
merchant capital involved in domestic trade did not suffer
that much since the state did not intervene in this field.
The state intended to avoid a direct conflict with this,
powerful class (Tezel, 1982, p.228) which had the potential|
128
J
rto pressure the political power unlike the comprador
|
'bourgeoisie involved in international trade which was
i
composed of minority businessmen. During the 1930s most of
i
the state credits were released to this domestic commercial
sector. The main reason behind this was the greater potential
of this fraction of the bourgeoisie— relative to the weak
industrial capital— to generate surplus revenue, especially'
jthrough integrating small commodity producers in the rural;
'areas to the market economy (Tezel, 1982. p.114-15). Thej
Estate also created new opportunities for merchant capital by
I
i
jproviding new commodities for circulation. Consequently, this
jclass increased its wealth considerably during this period.
i
i The figures show that during the 1930s the industrial
bourgeoisie developed as well. The share of industrial |
jprivate capital's profits in GNP increased from 3.4% in 1932i
to 6.2% in 1939 (Boratav, 1988, p.58). The value of
industrial output increased by a factor of 2.4 between 1932
land 1939 (Hale, 1981, p.59; Kepenek, 1986 pp. 78-9) although)
i '
! the number of firms decreased by 100% (Fisek, 1969, p.68).'
Investment also doubled in the 1930s (Fisek, 1969, p.68).!
Given the decrease in the number of firms and the doubling of
capital, we observe the beginning of a concentration of
j !
icapital in the 1930s. However, most of the investment ini
i |
! industry was undertaken by the state where almost all newj
jinvestment in large enterprises were made by state or through
129
joint-ventures with state corporations. Private investments
went to smaller establishments, trade and service sectors
|
(Hershlag, 1968, p.106). The rate of increase of fixed
jinvestment in big SEEs like Sumerbank and Etibank was much
I
jhigher than the private sector. Between 1932 and 1949, while
Jfixed investments of the private sector tripled— increased
Jfrom 117.5 m. TL to 359 m. TL— fixed investments of Sumerbank;
i
land Etibank rose from 12 m. and 3.4 m. TL to 365 m. and 150
m. TL respectively (Rozaliyev, 1978, p.167). )
• A similar tendency of concentration was also evident for
finance capital. By 1935 2/3rd of the total bank deposits
were in the state-owned Ziraat Bank (Agricultural Bank) and
Is Bank. 73% of the capital revenues were also appropriated;
!
jby these two banks (Rozaliyev, 1978, pp. 106-7). During the
i ;
Il930s the Is Bank grew significantly becoming the founder or|
i
share-holder of numerous industrial (textiles, sugar, coal),
financial and commercial companies . Several mergers,
especially in the textiles industry made the Is Bank the
'biggest private industrial group (Rozaliyev, 1978, pp.109-1
t 1
122). Some government policies, like the one implemented in;
i
;1936 which forced import/export merchants to form unions and
j
ito trade only the commodities permitted by the state,
furthered the centralization of capital. Is Bank and Ziraat
Bank formed several import/export unions and controlled the|
trading of many commodities (Rozaliyev 1978, pp.118-19).
130
Despite these tendencies of concentration and
'centralization of capital, industry still maintained its
i
appearance of small and unmechanized workshops (60% of the
jindustry and 80% of employment) in the 1930s (Hale, 1981,
!p.59). Within this structure the bourgeoisie did not have the
ipower to become the leader of the society (Giilalp, 1983,
|
'pp.31-2). It did enjoy the indirect positive effects of
etatism like industrial linkages created by state-ownedj
factories and protection of internal markets from imports
j(Karpat, 1959, pp.88-9; Singer, 1978, pp.64-5). However, the
jetatist project remained short of providing a full-scale,
jdirect support and encouragement to private capital.
, On the other hand, the state did not avoid the
i
opportunities that could be jointly exploited with private
capital in the areas that do not contradict with the!
jinterests of state. Such joint ventures, like the ones
^between state banks and big private banks as Is Bank and
I
jTicaret Bank— established in 1934— in industry (Rozaliyev,
1978, pp. 104-22, 145-47) contributed to the development of
an industrial and financial bourgeoisie. A second example was
the contribution of private banks to the financing of state
industrialization by means of loans and government bonds
(Rozaliyev, 1978, pp.164-73). This cooperation between the
bureaucracy and the industrial/financial bourgeoisie is
further crystallized in the establishment of new firms in the
131
1930s where many bureaucrats appeared to become entrepreneurs
(Keyder, 1987, p. 106; Tezel, 1982, p.229). For instance,
there were 13 deputies on the board of directors of the Is
i
Bank (Fisek, 1969, p.71).
The approach of the state towards international capital
also reversed the suggestions of the "Sakir Kesebir plan".
■During the 1930s the state nationalized 24 foreign companies
! i
j(Berberoglu, 1982, pp. 35-36; Tezel, 1982, pp.184-86). Most]
I 1
lof these nationalizations took place in transportation,I
utilities and mining sectors. However, the shrinking share of
!
jforeign capital in Turkey was most likely due to the!
deepening international crisis rather than because of the
I
nationalization drive of the state. Between 1929 and 1931
foreign investment dropped from 12 m. TL to 1 m. TL and
during the 1930s the share of foreign banks in total credits
I
dropped from 42% to 20% (Tezel, 1982, pp.182-3). Overall,]
relations with foreign capital was not an important factor
for the accumulation project in the 1930s.
When we study the relation of the state with the other
itwo classes— workers and peasantry— which played a major role
! . i
iin financing the development process, we find a clearer
picture. Given the non-democratic monoparty political regime,
the state was not under direct pressure coming from these
i !
;classes. The absence of such political constraints was easily
132
^translated into huge transfers of surplus from workers and
i
peasantry in the forms of taxes and price controls.
Being conscious about the potential threat of an
emerging industrial proletariat as a result of rapid
industrialization, the state eradicated the seeds of class
I
'struggle by the 1936 labor law. This labor legislation,
j i
modelled on the Italian labor code, prohibited unionization I
i *
and declared strikes illegal (Keyder, 1987, p.14). The
working class was far from being an organized and coherent|
pressure group. The state sought to maintain a docile and
'cheap labor force in order to increase production at low
i
jcost. The data available for the 1930s shows that in all
sectors industrial wages either stagnated or declined
(Berberoglu, 1982, pp.60-1; Fisek, 1969, p.75). Particularly,!
in the private sector real wages declined by 12% between!
1932 and 1939 (Boratav, 1988, p.58). Moreover, taxes oni
i
i
workers and government employees also increased drastically
iin the 1930s. In budget revenues the share of direct taxes
deducted from wage and salaries increased from 7% to 26%
between 1930 and 1939 (Tezel, 1982, pp.392-3). In 1934-35,i
i j
income taxes paid by merchant and industrialists were 2% of
their net incomes while this ratio was 18% for wage-earners
(Tezel, 1982, p.393). One crucial impact of this period was
jthe substantial increase in the size of proletariat which
grew from 60,000 in 1927 to 427,000 in 1940 (Berberoglu, j
|1982, p.60). ;
I _ 1
j A similar picture is observed for the peasantry. It isj
j i
a well-known fact that, during the development of capitalism
.the agricultural sector has always contributed to capital
accumulation in industry. Turkey was no exception to this in
the 1930s. The state had three main ways to transfer the
I
surplus from agriculture to industry: first through taxes on
1 i
’ agricultural revenue; second, via direct government controlsj
i j
that might change the institutional structure such as landj
I . I
reform and credit policies; third, by means of price controls|
j(Birtek and Keyder, 1983, p.194). !
( i
! We do not witness a direct surplus revenue transfer from|
agriculture in the 1930s. Between 1930-1950, the share of I
direct taxes from agriculture in state revenues dropped from
j
!l2% to 4%. Their proportion to agricultural value added
declined from 3% to 1% (Tezel, 1982, p.400). Technical and
| 1
Institutional obstacles limited collection of tax revenues in
I
l
this sector.
Price policies appeared to be the main surplus transfer
{vehicle in the 1930s (Birtek and Keyder, 1983; Pamuk, 1987;
isilier, 1981, pp.77-88; Tezel, 1982, pp.381-87). The massive
deterioration of agricultural prices relative to industrial
i
prices appeared to be the prime engine of state-ledj
industrialization during this period. Taking 1927-28 as the
I 134
I
base year, the terms of trade index of agriculture dropped to
'45 in 1933 and then gradually increased to 73 by 1939 thanks
to the state's support prices (Tezel, 1982, p.382). This
(deterioration of the domestic terms of trade against
jagriculture was particulary significant between 1929 and
11932. A peasant who sold 3.3 kg of wheat to buy 1 kg sugar in
i
1929, had to sell 7.65 kg of wheat to purchase the same
i
amount of sugar in 1932 (Birtek and Keyder, 1983, p.205).
! i
Holding industrial prices artiflcxally high; the statei
^generated an enormous transfer of surplus from agriculture to 1
I
industry. In 1932, the government started a price supporti
I
program. The main reason behind this was to maintain the
jlevel of wheat production, i.e the quantity of surplus
revenue generated by the wheat producing peasantry. This
program helped substantially to continue wheat exports to
|
jNazi Germany. Moreover, it also enabled agricultural
producers to increase their demands for industrial products,j
i
which was quite important for capital accumulation process at
i
Ithat time(Silier, 1981, p.78). Finally, the low level of
Jwheat prices enabled the state to hold wages at a low level
to provide cheaper labor to industry.
Another remarkable dimension in agriculture was the
uneven nature of rural producers. While small and middle
farmers produced wheat, big farmers cultivated industrial
jcrops, such as cotton, tobacco and sugar beets. Prices of
j 135
wheat dropped much more than these industrial crops. Wheat
i/cotton and wheat/tobacco price ratios dropped from 176 to
100 and from 183 to 100 respectively between 1929 and 1939
i
(Boratav, 1977, p.24). The government not only supported
these crops by price policies, but also by means of credit
i
'channels.(Silier, 1981, pp.84-85). In general, the state's
Lnterest in the industrial sector is also reflected in state
j
credits. While the total Ziraat Bank credits to agriculture!
! I
increased from 34.2 m. TL to 40.6 m. TL between 1933 and i
1938, its share in total credits decreased from 23.5% toi
i
14.7% (Kepenek, 1986, p.74). The share of agriculture in the
capital formation of the state increased from 3% in 1930 to
; . i
,6% in 1939. In the same period the share of industry,;
i :
however, soared from 1.6% to 33.7% (Tezel, 1982, p.410).j
! *
'Public investment in agriculture remained at a low level,
{reaching only one-third of the public investment in industry
and transportation (Hershlag, 1968, pp.113-4). Only 13% of
jgross domestic investment was in agriculture and the
('proportion of these investments to agricultural value added
!
[was a mere 4% (Tezel, 1982, p.325).
j i
Summing up, the 1930s appear as an interesting period:
i I
|for our study. It is a period when a distinct development
strategy was pursued by the state. Under the economic and
jpolitical conditions of the 1930s, the state chose an etatist;
'development path as a rational strategy where state capital|
136
I
acted as the engine of development. Instead of a dominant
I
market allocation system a system of political allocation of
resources through various tools controlled by the state was
j i n effect. With the help of these mechanisms such as price
jcontrols, foreign trade controls, extensive state ownership
and credit policies, the state had the capacity to
i
appropriate a significant portion of the surplus generated in
the society. This surplus in turn financed the state led
!
^industrialization.
Over time, however, this strategy created its own
limitations, some of which had been there from the beginning.
In the economic sphere, the rationality of the project was
i
dependent on a continuous surplus transfer from agriculture
jto industry and on the profits accumulated by state economic
I
[enterprises which required an increasing state industrial
■base. In agriculture, it became more and more difficult to
reproduce the system under existing property relations.
I
jActually, by the end of the 1930s, the state perceiving this
problem, initiated a reform that would lead to extensive land
I
jredistribution in the rural areas (See Keyder, 1987; Pamuk,
l
jl987; Tezel, 1982, pp.348-351). However, such a program which
I
would increase the economic and political power of peasantry
,was against the interests of powerful landlords and merchant
capital whose survival was dependent on existing property
relations. Moreover, the Kemalist regime had been founded on
137
an alliance with these classes in 1920s and having failed to
i
build a new base, the state never achieved a radical land
reform that was opposed by this bloc (Berberoglu, 1981,
pp.54-7; Silier, 1981, pp74-7; Tezel, 1981, pp.378-79).
i
Consequently, the productivity of labor in agriculture could
I
jimprove merely by 15% between 1926 and 1950 (Tezel, 1982,
i
p. 324). i
On the other hand, in industry, augmentation of the!
surplus revenue could only be achieved by extending the f
!
jalready growing industrial base, i.e. by increasing the share
jof the state in industry. This was obviously against the
interests of the bourgeoisie which was not strong enough to
challenge this trend during 1930s. When the internal and
external balances changed radically during and after the!
Second World War, the bourgeoisie's opposition (along with,
! . . . .
pther factors) played a prominent role m the transition to
Ja new development strategy of the 1950s.
As mentioned earlier, the state always lacked a social
base and an ideological project to avoid a potentialj
! I
legitimization crisis. It intended to create a social balance I
I
jamong different classes through industrialization and
\
consequently to control any potential class struggle within
this national unity (Yerasimos, 1976, p.1289). The state,
fearing a mass mobilization, neither attempted to build a
i
Isocial base on the workers and peasants nor showed any
?
j
interest in social development that would improve the
economic and political powers of these classes (Hershlag,.
j I
1968, pp. 74-5). Only the bureucracy backed this rigid and j
authoritarian political structure in which the party and;
state were entirely merged. The unity of this class was the
i
i , ,
iessential factor for the reproduction of the existing
i
project. However, when this unity tended to disintegrate by
!
Ithe 1940s the project lost its rationality and was replacedi
i j
' i
by another as elaborated in the next chapter.
139
CHAPTER V
I
THE WORLD WAR II PERIOD AND TRANSITION TO THE 1950S !
i t
i
Although the period between 1939 and 1950 does not
reflect a break from the development strategy pursued by the
i
state in the 1930s, it witnesses the key developments that
I
l
resulted in the agriculture led accumulation project of thej
1950s. This phase is quite valuable in showing us a;
i
jtransitional period when the contradictions of a development!
•strategy opens the way for an alternative hegemonic project.
When the Second World War started, Turkey was under the
guidance of the 1938 industrial plan that formulated an'
etatist industrialization program focused on the heavyj
industrial sector. The war's immediate impact on the society-
was the appearance of a need for a new resource allocationj
mechanism under the hard economic conditions and pressuring
military requirements.
At the end of the 1930s, as discussed in the previous
chapter, etatist development strategy began to face its own
contradictions. Two major contradictions were: first, the
growing discontent of the bourgeoisie against ambitious state
intervention into the economy; and second, the increasing.
140
difficulty of financing the project through internal
I 1
resources, particularly by the surplus produced by the
peasantry under existing property relations. Although the
state did not change its approach to the private sector until
jthe end of World War II, after 1935 we observe some efforts
to cope with the second contradiction.
; In the second half of the 1930s the state seriously
I i
considered a land reform (Birtek and Keyder, 1984, p.53;'
| ■
[Tezel, 1982, pp.348-51). Agricultural support prices improved'
I :
jthe economic conditions of the peasantry following 1935. This’
‘ generated a potential political alliance between this class
i
‘ and the state (Birtek and Keyder, 1983, p.207). Agricultural
output had increased by 63% during 1938-1939 over the level
I
reached between 1932 and 1933 (Pamuk, 1987, pp.124-25).
Hence, before the World War this potential increase ofj
! i
[surplus produced by the peasantry and the state's increasing;
i ;
dependence on this class to finance its industrialization!
I
plans conveyed significant political power to peasantry. This
Jin turn generated crucial results after World War II (Birtek
and Keyder, 1983, p.208).
The war years, however, completely changed this
i
relationship between the state and the peasantry. During the
rough war years the state took several harsh measures to
solve the main problem of providing food to the army and
I ;
Jcivilian population. Although these measures varied, they all!
t
1411
moved the real burden of the war on the shoulders of |
i i
peasantry while bringing substantial profits to merchant;
capital as well as to big farmers linked to markets |
((Boratav, 1982, p. 218).
War affected the peasantry on two major grounds. First,
military mobilization depleted their numbers and resources.
i i
Not only were one million peasants drafted (Keyder, 1987,|
i |
p.110) but also their animals were confiscated. According to|
I
the official statistics, the number of oxen in the country
Ideclined by 10% and this figure is higher in other estimates
|
j(Pamuk, 1988, pp.23-24). For example, an article of the |
I
National Defence Law which became effective on January 1940 j
; ( Boratav, 1982, pp.245-55) allowed the government to
i i
confiscate a pair of oxen for each 4 hectares plot. This,
| (
(virtually left no animals for farming in the possession of i
l
small farmers and peasants (Boratav, 1982, p.251). When the
sharp decrease in the agricultural labor force decreased the1
output in this sector and witnessing its wheat stocks were
(depleted, the state became more coercive and passed the
National Defence Law (Pamuk, 1987, pp.128-29, 132-33).
j Second, during the War, the state appropriated peasants' !
1
'output and surplus by means of direct confiscation, heavy;
I
jtaxation and price policies. While the domestic price index
i
^increased from 101 to 482 between 1939 and 1944 (Warren,
1977, p.159), the state set wheat prices 2.5 times lower than
! 142 I
I
I i
the market prices and with a decree issued in 1941 farmers j
were forced to sell all their surpluses at these low prices
|(Pamuk, 1987, p.l34;Pamuk, 1988, p.27). Similar gaps between
i
the market and official purchasing prices m cotton and sugar
beet also brought vast sums of profits to the state (Boratav,
j l 9 8 2 , p.2 2 1 ) . These measures led to passive resistance by
|the peasantry in the form of decreasing output and hiding
i
i
crops to divert them to the black market. Although the
official government target for purchases of wheat from the
1942 harvest was 25% of the crop, government purchases
remained below 15% of the total production, despite all
i
efforts (Pamuk, 1988, pp.28-29).
)
As a reaction to this development, the state revised its
policies in 1942. A new regulation required that 25% of the
i
output up to 50 tons, 35% of the output between 50 to 100
l
tons and 50% of the output above 100 tons would be sold to
the state at the prices determined by the government
l(Boratav, 1982, p.223). However, this policy produced
extremely uneven results in the agricultural sector. While
i
'appearing to shift the burden towards large landowners, the
new policy actually increased the burden of the smaller
peasantry (Pamuk, 1988, p.30). While the majority of Turkish
I
farmers — owning less than 10 hectares— had to give all their
I
[surpluses to the state at very low prices, big farmers
l
f
;enjoyed market prices, that were 5 times higher than the:
! 143
official prices, for 50% of their output (Pamuk, 1987,
pp.137-38). In May 1943, the government decided to modify the
!
25% rule. Shares were changed as 20% of first 6 tons, 30% of ;
i :
the next 9 tons and 50% of all crops above 15 tons, which
reduced the privilige of large farmers (Pamuk, 1988, pp.31-
i
p2). Finally, m 1943 the state imposed a 'soil products tax'
which varied between 8% and 12% (Pamuk, 1987, p.139). This
tax not only hit the peasantry but also was a significant
financial blow to bigger farmers who were not affected by:
! |
state policies that much during the War years (Boratav, 1982, ;
! !
p. 265 ) .
!
Overall, the War years1 policies alienated peasantry
from the state completely. THe draft, confiscation of animals
and particularly, the state's collection of peasant's crops'
i
(through low prices and taxes in kind broke the ties between
the state and peasants which had been improving during the
iate 1930s. Since the main concern was the extraction of thei
| i
maximum amount of crop for the army and civilian population,
j
!the state either forced small producers who did not have
marketable surpluses or gave higher market incentives to big
i
producers that generated surpluses (Pamuk. 1988, pp.33-34).
On the other hand, big farmers were less influenced by
the War measures. Especially the possibility of selling some
portion of their output at profitable market prices
[transferred significant revenues to this class. Together with:
i 144
jthe merchant capital operating in the agricultural sector,
big farmers accumulated huge amount of profits during the War
period (Boratav, 1982, pp. 223-30) which had significant
i
I
implications for the 1950s.
While the majority of agricultural producers sufferedj
jbadly during the War, several fractions of the bourgeoisie;
were affected differently. As mentioned above, commercialj
; i
capital in agriculture was the biggest beneficiary of the
I
period enjoying the high price differentials created by the
food shortage. During the War, terms of trade changed ini
j
ifavor of agricultural goods. Wheat prices increased by 55%j
while tobacco prices rose by 37%. In 1943 the wheat price
■ i
jindex(1939=100) was 408 (Boratav, 1987, pp.92-94). However
(these high prices did not translate into high revenues for
jsmall and middle peasantry because of the 25% regulation
mentioned above. Only the big farmers, with their accesses toj
markets, enjoyed that inflationary environment together with
merchant capital (Boratav, 1982, pp. 225-29; Boratav, 1984,
pp.92-93; Tezel, 1982, pp.234-35).
Unlike commercial capital, the industrial bourgeoisie1
i
‘ I
,'faced strict state regulations. The national defence law was
i
; highly restrictive on private capital having the potential to
|dictate on industrial— and mining— companies what and how
much to produce. It also enabled the state to control
Idomestic and international trade (Boratav, 1982, pp.245-55).
145
■Fears of expropriation, uncertainty, increased competition
(with public companies, favoritism shown to state firms in the
i
I
provision of credits and foreign currencies all contributed
to further retrenchment in the activities of private industry|
(Singer, 1977, pp.48-50). |
Planning works during the War years also reflect a
similar treatment of the private sector. Works of the first
i
industrial plan for the post-War period started in 1944 with
ja clear intention of increasing the state's role in economy.j
This plan was prepared under the full influence of thej
'Kadro' group which generated the official ideology of the|
l
letatist project of the 1930s (See for "Kadro" ideology,
Gulalp, 1983, section 4). An initial original report of the
‘ plan proposed to leave large scale production to the state
j i
|While allowing private capital to engage in small scale|
Iproduction (Tekeli and Ilkin, 1981, pp. pp.1-4; Tezel, 1982,j
pp.283-86). THe 1945 broad plan draft was a basic industrial
iplan which followed an import-substitution path while
concentrating on heavy industries (Tezel, 1982, pp.288-92).
f
The most controversial development during the Second'
World War was the imposition of the "Wealth Levy". In order
!to finance its expenditures the state proposed this tax
I
jwhereby the rate of taxation was determined by local;
commissions unevenly. A total of 425 m. TL was collected. 70%
of this sum came from Istanbul and 84% of Istanbul's share
I 146
I
I
jwas collected from non-Muslim minorities (Boratav, 1982,
ip.263; Clark, 1984-85, p.35). Despite the short-term gains of
!
,the state— revenues increased by 125% between 1941 and 1942
!
; (Tezel, 1982, p. 389)— this radical tax not only wiped out thei
; I
|non-Muslim merchants of Istanbul by redistributing their!
Jwealth but also damaged the investment climate of the private
(sector very badly (Clark, 1984-85; Keyder, 1987, p.113).
i
! Finally, the war years were not pleasant for the working
Iclass either. Increased taxes and huge declines of real]
| I
wages— 50 percent of the 1939 level by the end of the War)
|(Boratav, 1984-85, p.45)— led to a drastic deterioration of
[the standard of living of workers.
i
j By the end of the War, the state was in a very critical
[position given the above discussed difficulties faced by:
i ;
various classes of the society. On the one hand, the RPPj
'government was in pains to finance the current project. On
the other hand, it was desperate to find an ally for the
[reproduction of its power. The war years had destroyed thei
emerging pre-War alliance with the peasantry and also
jalienated other classes of the society.
Under these circumstances the RPP split into two and the
Democrat Party (DP) emerged from this crisis. The years of
i
11945 to 1947 proved to be very critical in determining the
[next decade's developments. Contrary to popular belief, this
j i
radical change did not occur by the 1950 elections. The very'
147
same forces which brought DP to power had already convinced
i i
RPP echelons that the etatist project was no longer rational]
i
in the conjuncture of the post-War period. RPP policies
i
between 1946 and 1950 serve as good evidence to support this
point. What were the internal and external forces that led to
jthis transition?
I
j First, as emphasized formerly, the state had
!
'already faced a severe financial problem in attempting to!
! . . .
:fmd funds necessary for its extensive industrialization
plans. The potential for surplus transfer from agricultural
' i
producers had reached its limits. After the harsh War years
it was not politically feasible to rely on this source any!
I
'further. However, this factor alone did not change the;
Estate's determination in following the etatist path as
[apparent in the early post-War planning works.
The state1s alternative was to use external sources to
finance its project. Optimism about the compatibility of the
I
'proposed industrialization mode with the interests of the
j
capitalist World in the new international order decayed
quickly. The RPP promptly realized that it would not be
possible to establish a democratic regime as an ally of the
capitalist World under the present internal and external
pressures while retaining the etatist project,
j !
j Right after the War,increased tensions in Turkey-Soviet,
i t
[Union relations and the RPP's determination to be a part of
148
the "West1 1 pushed Turkey to the orbit of United States (Kara,
i
1984-85, pp.66-67; Tezel, 1982, pp.198-99; Yerasimos, 1976,'
pp.1328-37). Meanwhile, the RPP, with the perception that a
jdemocratic regime was an inevitable characteristic of the
!
| "West1 1 decided to move the country toward a multi-party
l
democracy. Although there was no direct demand from the West
i t
jin this direction, the RPP conceived that this transition had
I
to be done in order to gain the support of the West against|
the Soviet Union (Kara, 1984-85). Together with the internal
i
constraints aggravated by the War years' discontent, this]
i
perception of the West and expectations for external aid gave;
I |
|rise to a political and economic movement in adjusting;
I
iTurkey's economic system (Hershlag, 1968, p.135). The RPP,
i
however, had hoped to retain the state power through these
i
ladjustments underestimating the determination of classes that’
i
|had been hurt by etatist policies for two decades (Keyder,
i
1987, p.115).
It is beyond my purpose to analyze the details of this!
transition to a multi-party regime (See, Avcioglu, 1969;
jErogul, 1970; Karpat, 1959). I rather study here the internal
!
and external forces that gave birth to the accumulation
project of the 1950s.
During the 1945-1947 period, the state realized that the
1945 'urgent' plan that was prepared to materialize an
! ambitious industrialization plan in an import-substitutionj
: 149
mode had to be changed, as exemplified with US's rejection of
an initial $300 m. loan request in 1946 (Tekeli and Ilkin,
f
1981, p.6). It was quite evident that, such a development
i
strategy would not be supported by US and West.
J In 1947, government decided to prepare a new plan by the ;
I
members of "Turkish Economy Institution" which represented
j |
the liberal front of the state. This plan, named after thej
! !
chief consultant of the Ministry of Economics, Mr. Vaner, was *
designed to take into consideration the post-war developments
jin the international economic order. Priority was given to,
the development of the agricultural sector, transportation!
I
networks and infrastructure while radically shifting to a!
i
i
'pro-private sector stance (Tekeli and Ilkin, 1981, section 3;
i
| I
Tezel, 1982, pp.294-300). But, this plan still implied the.
jcontinuation of direct economic activity and intervention by!
I
!the state. In general, while stimulating the private sector,
I |
the state would intervene in all those fields in which!
i
private initiative had proved inadequate (Hershlag, 1968,j
1 ;
p.134).
I
However, even the "Vaner plan" did not impress the West.!
Turkey's demand for $615 m. was rejected by the European
i i
Economic Cooperation Committee (EECC) in late 1947. The EECC;
! i
found this plan too ambitious and not relevant for Europeanj
reconstruction (Tekeli and Ilkin, 1981, pp.10-13; Tezel,1
1982, pp.300-1). The report of an American consultant, Mr.;
I Thornburg, played a prominent role in this decision. Hisj
i I
|report clearly revealed the United State's lack of interestj
in Turkey's state-led development strategy and asked for anj
i
emphasis on agriculture instead of industry (Kepenek, 1986,;
| i
|p.95;Tezel, 1982, p.242; Yerasimos, 1976, pp.1351-53). One'
!
I
jmore round of revising occurred, narrowing down the targets:
and cutting down public expenditures from 4 to 1 billions TL.
! a second application was accepted in 1948 and the Marshall;
'plan was extended to Turkey (Tekeli and Ilkin, 1981, p. 14;
Tezel, 1982, p.301). American funds advanced to Turkey were
: I
($177 m. in aid and $117 m. in loans but expending these;
1 '
i i
;credits were under strict US control (Tezel, 1982, p.204). I
The "Vaner plan" (See for details, Gunce, 19 67; Tekeli
I
and Ilkin, 1981) is quite significant in showing two cruciall
| . !
points during this transition period. First, the plan's basic
structure reflects the main tenets of the next decade's
| ;
accumulation project. In other words, the development
I
lstrategy adopted by the DP during 1950s overlaps with the
i
principal guidelines of this plan which prefers external to
i
internal financing, agriculture to industry and private to'
public enterprise (Gunce, 1967, p.21; Tekeli and Ilkin, 1981,
i
p.24).
I
Second, since this plan was prepared by the RPP, it is
! !
j a prime example of the close correspondence between RPP and
j DP strategies. As has been already discussed, during the
151|
I I
}post-War period, this convergence was inevitable. Concrete
Sconditions — internal/external— of the society were evidently
i
perceived in a similar fashion by both parties. Consequently, |
1
'it was quite rational to support a comparable project. This
I
jsimilarity is widely recognized (See, Ahmad, 1977, pp.13-
I
!4;Karpat, 1959, p.160; Kepenek, 1986, pp.96-7). The first
* 1
signal of a change in RPP's traditional policies was
^witnessed with 1946 liberalization measures. This continued
'with a new positive look towards foreign capital (Singer,j
1977, p.61; Tekeli and Ilkin, 1981, p.9; Tezel, 1982, pp.168-1
. 1
; 69). The 1946 measures, which included a significant;
I
jdevaluation and liberalization of imports, generated
priviliges for merchant capital (Gulalp, 1983, p.45). Thisi
i
i convergence took its final form during the crucial RPP party|
'Congress in 1947 (Boratav, 1982, pp.273-80) when an
inclination towards private capital was evident. The 1947.
Iparty program assured the transfer of all activities besides!
i
public works, mining, heavy and military industry, to private'
.initiative, provided that its enterprises would be run
! !
efficiently. A growing concept of 'New Etatism1, which was
^reformulated in the 1948 Economic Congress (Hershlag, 1968,!
i •
|pp.137-38; Kepenek, 1986, p.93), reflected the RPP's efforts
I |
I in adjusting its ideological line according to the post-Wan
developments. I
I 1521
! |
! The RPP ,historically, had always been distinguished by.
|its ultimate autonomy from economic class forces (Keyder,
; 1979, p.18). Its distance from social classes prevented the;
!
;RPP from convincing these classes by the recent adjustments
in government policies. The DP exploited this opportunity
i
[very well. Preparing a program that merged several popular
I
issues like liberalization, democracy, encouragement of
I
private enterprise, an agriculture based development
i
strategy, promises to the working class for free unions and
1
(opposition to land reform, the DP successfully built a
j |
1 platform in which all opposition forces found expression
|(Erogul, 1970, pp.9-15). On the other hand, the RPP, despite
I ;
{having majority of the issues mentioned above in its election
i !
package, failed to promote it, lacking strong political
I i
|support. I
l
I
[ The DP was endorsed forcefully at first by the
l '
|commercial bourgeoisie which was the candidate for the
alternative accumulation project's leadership thanks to the
accumulated enormous sums of money capital during the War
i
.years. This class was eager to become the dominant fraction
I
[of capital and this was basically dependent on the demise of
state capital, one of the primary slogans of the DP. The
commercial bourgeoisie1s desire for greater freedom from
I
,state control was well exhibited during the 1948 economic
iconferences conducted under the auspices of the ITO (Istanbul
\ 153 j
I
Trader's Association) (Singer, 1977, p.54; Tezel, 1982,
Jp.244). Second, the DP was supported strongly by big
I !
| landlords and farmers who were irritated by the 1947 land
reform that threatened the property relations in the
Icountryside. Finally, the peasantry backed the DP because of
i . .
jthe RPP's War policies. The peasantry's interest m politics!
I
(dramatically increased after becoming dependent on the<
I
i
volatility of market conditions (Birtek and Keyder, 1983,j
p.211). !
(
| The RPP was conscious of its lack of political support.
i (
jby the end of the Second World War. In 1945 it took a radical;
| i
step by proposing a land reform. As mentioned earlier, at thej
i
lend of the 1930s the state had attempted to bring a similar:
i
I
I reform in order to exploit the surplus potential m the rural
!
; areas as well as to strengthen its emerging alliance with
peasantry. However, when the agriculture output increasedj
I
jafter 1935, the importance of this reform lost its priority
for the state and then the War prevented its materialization
i
.(Pamuk, 1987, pp.56-57). j
However, after World War II, transition to a multi-party
t
’ democracy and low agricultural output rejuvenated this*
j :
project. The state's motivation was basically political. It;
has been already discussed that the War destroyed the state's |
alliance with the middle peasantry, a huge class that had
started to produce a surplus for the market, an essential!
I
[resource to finance industrial capital accumulation.j
i
[Dependence of the middle peasantry on the market made it much
more sensitive to government policies, market prices,
i
taxation, and so on. In other words, transformation of the'
[middle peasantry to market-dependent petty commodity
producers politicized them heavily against RPP policies which'
I i
iplayed a prominent role in the 1950 elections (Birtek and
I
Keyder, 1983, p.214). J
i An alternative political ally for the RPP was the
i
jlandless peasantry, approximately 20% of rural population.
1 The land reform as supposed to construct this alliance by
. I
means of a land redistribution plan. Land reform discussion
I
(
which finalized the split in the Party put together two major
I i
arguments. First, the state could purchase those portions of
i
jprivate estates exceeding 500 hectares when the owner himself
I worked the land— 200 hectares if he was an absentee landlord.
i 1
1
Second, by the famous 17th article, the state would
I distribute the land above 50 hectares to the share-croppers
! i
and renters who are working on these estates. Its literal
enforcement would eliminate medium sized landlord class in
i
[villages. (Karpat, 1959, pp.118-24; Tezel, 1982, pp.351-57).j
j However, the reform did not work in practice (See for
details, Tarakli, 1976). First of all, the RPP did not have
| the power and social base to confront a strong landowning
! i
I
I
.class and big farmers. These classes, represented by DP'
i b I
! opposition later, forced the RPP government to amend this'
| !
jreform in the late 1940s. This amendment virtually abolished
article 17, by increasing 50 hectares requirement to 50o|
hectares and eventually by limiting in essence the land to be
'redistributed to state estates (Berberoglu, 1982, pp.56-7;
I
*Karpat, 1959, p.124; Tezel, 1982, p.357). Second, the reform
I
in itself was not consistent. It assumed on technical grounds
'that it would increase the surplus in the agriculture sector.1
i ;
However, as put clearly by opposition, rather than the land
!
ownership, lack of access to oxen was the principal !
I
problem (Keyder, 1987, p.126; Keyder and Pamuk, 1984/85,j
|
p.60). Moreover, given the absence of a dominating and ruling
i i
I landowning oligarchy— which would serve as an easily
I »
j identifiable enemy— and the composition of the rural society
' by numerous independent small land owners, an alliance with
! poor peasantry would not secure the RPP1s political power
|(Keyder, 1979; Keyder, 1987, p.127). Finally, there was no
I I
j way for the state to rely on the poor peasantry1 s surplus
output capacity for its own project. The reform was purely
political (Keyder and Pamuk, 1984/85, p.61) and failed to
i
serve its purpose.
! Under internal and external pressures in the late 1940s,j
1 ]
; the bureaucracy promptly retreated and failed to forge a new
i alliance. Another potential ally, the working class was also
156;
alienated with the help of the state's ideology that refused
! ,
jthe existence of classes. Between 1946 and 1950 the state
I !
continued to repress the working class. First, the state'
: i
banned all unions established in connection with two
i socialist parties at the end of 1946 and then attempted to
| . i
| form unions under its own control and orientation m order to
i ;
prevent the emergence of any ideological movement of the left
i
I(Guzel, 1984/85, pp.72-4). In 1947 a new labor code-#5018-|
I was passed, which recognized the right to establish unions,
jbut under severe constraints. The right to strike and
political activities were prohibited. The number of unions
I . . i
jincreased to 88 by 1950 (Singer, 1977, pp.143-44). Between
il947 and 1950, the RPP established its own unions. This
period witnessed the emergence of close relations between the
state and unions, which has continued until now
(Guzel,1984/85).
Summing up, the 1939-1950 period signifies an
interesting transition from one development strategy to
another coinciding with the progression to a multi-part^
democracy. The war years, a new international order and new
I
class structure all put strong pressure on the state to give
up its etatist project. On the one hand, alienated domestic
|classes represented by the DP opposition created a
I i
I
i
significant threat for political power and made the etatist
l
i
|project politically irrational.On the other hand, problems of
financing the industrialization process either internally or;
i
'externally made the project economically irrational.
t
Perceiving this situation the RPP attempted to move to a new,
! alternative accumulation project. Despite its intentions toj
i give priority to the agricultural sector and to promote
jexternal financing, the RPP never had the chance to embark on
i j
'this new project. It was fully executed by the DP after the;
I
1950 elections as studied in the next chapter.
158
CHAPTER VI
THE 19SOS: AGRICULTURE LED DEVELOPMENT STRATEGY
The last chapter drew a strong parallel between RPP
following the World War II. Both 1947 party assemblies and;
ithe 1950 election declarations reveal this similarityj
»
clearly. Given the class structure and international!
i
conjuncture of the time, both parties faced a need for a'
common alternative accumulation project. In other words, thej
next government would be m a position to promote primarily
the interests of rural classes who had the biggest potential
i
to increase the surplus revenue production in the country
(See for the DP and RPP programs, Ahmad, 1977, p.25;!
Avcioglu, 1969, pp.356-58; Boratav, 1982; Boratav, 1987,
pp.74-8).
The DP government embarked on this new project following
the 1950 elections. The new strategy, initially, was based oJ
a free market orientation, trade liberalization, dismantling
of government enterprises and emphasis on foreign capital
investments.
Adoption of this model by the DP can be explained on twoj
jgrounds. First, strong pressure coming from the West was
^important in the determination of post-war developments. U.S.!
land other international institutions under U.S. leadership1
j
(forced Turkey to implement this new model. Turkey would
l
;accept its new role in the international division of labor
iwhich would focus on agricultural production and exports ini
i
ireturn for a package of program aids and credits (See;
Avcioglu, 1969; Hershlag, 1968; Singer, 1977). The promotionl
I
of this model may be observed in several reports such as the;
: i
f
jfamous "Barker report" of the IBRD in 1951— which was
jprepared before 1950. This report had strongly urged the,
encouragement of the private sector and foreign investments!
i I
jin agriculture (Hershlag, 19687, pp.135-36; Tiizun, 1977,
ipp.5-6). Another remarkable example of Western pressure is
I
Mr. Thornburg's report as discussed earlier.
Second, the internal class structure which radically
changed during the War played a prominent role in the
! I
adaption of this new project. As asserted earlier, during thej
;War, Turkish merchant capital and big landlords ini
i !
I
(agriculture accumulated enormous sums of wealth. Severe!
I i
I imperfections in resource allocation which were caused by;
l
government policies and War environment led to this outcome.!
i
i
jPrice controls, extensive speculation and black market!
j
'activities, privileges obtained from government, high rates,
^ 160j
|of inflation and high prices paid by Nazi Germany allj
(contributed to this capital accumulation in the hands of
I
'these two classes (Boratav, 1982; Keyder, 1987, p.118). i
I
! By 1946, government bureaucracy had already lost thej
i
opportunity to remain as the dominant agent of capital in the
'reproduction of capitalist relations. The sanctity of private
l <
[property appeared to be the main contradiction of thej
: i
jproject; if the state were to retain— and intensify— its,
'position in the capital accumulation process this would-
[severely contradict the interests of private capital!
fractions (Keyder, 1987, p.125) and eventually would isolate;
state capital against other fractions of capital. The risk ofj
I
destabilization and disruption of the accumulation process in!
[such a contradictory mode where state and private capital!
|
jwould compete with each other was too high. The possibility
of the eventual replacement of all private capital by statej
I capital was quite high considering the increasingly
I !
'systematic allocation of resources towards the use of the;
i ;
latter. I
l
j On the other hand, the hegemonic alternative projectj
promoted by foreign institutions was very compatible with thej
[class structure and interests of merchant capital and big,
! i
.landlords and farmers who were the candidates to form the neWj
hegemonic bloc in Turkish society. The political climate was;
i
i
I i
r " “ i6 " i j
I !
jalso very convenient. This can be supported by studying the
I
I impact of DP policies in the early 1950s. i
i
i
This new project, by promising trade liberalization I
I j
I
land an agriculture-led market economy was welcomed not onlyi
i
jby commercial and big agricultural interests but also by the
* . . . •
petty producers m rural areas whxch constitute the majority^
lof the productive population (Kazgan, 1985, pp.299-305;!
! j
!Keyder, 1987, pp.118-20). Moreover, it also promised a '
' , j
considerable potential of surplus revenue generation because;
of the combined expectations of market expansion through
I
I investments in agriculture, agriculture based industry and
!
; foreign investments.
The DP embarked on this project in 1950, based on
i I
jthese class forces, and continued policies already initiated
i . . . I
by the former government. It is worth reviewing these
: I
policies, their impact on domestic classes and their success'
l !
in terms of their capacity to promote the interests of those
I classes. Such a review enables us to understand the initiall
! I
'rationality of the project as well as its transformation and
i
(thereby loses of its rationality in the end of the 1950s.
Against this emerging alternative project, etatistj
strategy had already lost its hegemonic status before 1950,
.under the new developments of internal and external forces.!
S !
I I
jWhile commercial and agricultural sectors were becoming morej
I '
[powerful, the industrial bourgeoisie was still too weak by
■1950 to promote its own project. This premature position of
industrial capital was the main reason for DP1 s lack of
I
'interest in private industry during the 1950s as elaboratedt
l
'later.
i
The most significant aspect of the new development
strategy was the overall dominant character of the
Jagricultural sector. Especially during the early 1950sj
: i
agriculture served as the engine of the capital accumulationJ
process. The state systematically allocated resources to thisj
I
sector perceiving agriculture to have the biggest potentiali
i i
jin surplus production. This preferential treatment took!
i :
various forms (See Erogul, 1970, pp.97-8). i
i 1
; |
I First, the DP extended loans to agriculture!
I • !
significantly. Agricultural bank credits increased from 412.2
i ;
m. TL to 2392 m. TL between 1950 and 1960 (Ahmad, 1977,
p.136; Hershlag, 1968, p.164, 333). The rate of increase wasj
| i
much higher during the early 1950s. While the annual average!
I l
'rate of increase was 40% until 1954, after this year it I
dropped to 8% and following 1958 this rate was only 5%i
I
(Singer, 1977, p.201). Moreover, the proportion of medium and
jlong term credits increased from 6.5% in 1950 to 23% in 1954
i
(Singer, 1977, p.201). !
I
Coupled with the American aid, Agricultural Bank credits,
supplied to the agricultural sector financed the purchasingl
! I
of enormous numbers of tractors which appeared to be 75% of
: 163
fixed capital formation during this period. Between 1950 and
i
l
| 1960 the number of tractors increased from 16,585 to 42,136!
;(Singer, 1978, p.200). Most of these tractors were provided
jwith subsidized prices to the farmers (Krueger, 1974, p.42).j
The major jump occurred in the early 1950s: the rate ofj
jincrease was 29% until 1953 and 2.3% during the rest of the
i
'decade (Singer, 1977, pp.199-200). j
1 I
i
Besides these cheap and extensive credits, public!
investment in the agricultural sector also increased
i
massively. The share of public investment in agriculture
increased from 15.4% in 1950 to 27.9% in 1959 (Singer, 1977,
; i
Ip.198). Public agricultural investment increased from 96 m.j
|TL to 860 m. TL between 1950 and 1960 (Rivkin, 1965, p.101).'
1
Most of the public investments were made in highway,
i
construction programs which served to improve agriculture,
> i
production and distribution. Investments in this area werej
raised from 65 m. TL to 943 m. TL during the 1950s and were'
J around 35% of government investments for economic,'
development. The share of expenditures on highways in thJ
jtotal budget also increased, from 2.9% to 7.8% (Rivkin, 1965,
j p . 1 0 8 ) . Another significant area of investments was
jirrigation systems. The irrigated area soared from 420,000
declares in 1950 to 2.5 m. declares in 1950 (Rivkin, 1965,
p.101) .
i
I
I
I Another government support to the agricultural sector
i ;
came through the operations of the TMO (Soil Products
i ;
bffice). During the 1950s, DP governments continuously'
! j
attempted to encourage rapid growth in agriculture through
announcing high support prices for grains and other cereals.
The TMO, unlike the practice in the 1940s, protected the
i i
jinterests of all producers by offering them a guaranteed
market at prices higher than market price levels. However,
to serve this end the TMO had to incur heavy losses and its.
deficits had to be financed through the bills discounted by!
i J
the Central Bank. In 1950 the TMO's discount bills with thej
Central Bank stood at 196 m. TL. This figure increased to
,1317 m. TL by 1959, constituting 45% of the total currency in,
I
^circulation increase at that time (Hershlag, 1968, p.164;
Krueger, 1974, p.43). In 1958 31% of all Central Bank credits!
i \
were extended to the TMO (Krueger, 1974, p.43). Domestic
purchases of the TMO increased from 129.3 m. TL in 1950 to
558.9 m. TL in 1953 and then dropped to 486.4 m. TL in 1958
(Singer, 1977, p.223). Government policies to bolster
i
agricultural prices, however, contributed to inflation. Sharp!
increases in the money supply to support TMO operations were
instrumental in this outcome as will be discussed laterj
(Krueger, 1974, chapter 2). j
i
Finally, agriculture received favorable tax treatment.
t
This involved exemptions from the payment of income taxes and'
i
1 lower customs duties for some agricultural supplies
i i
(Hershlag, 1968, p.164; Singer, 1977, pp.35-6, 219-20). The,
i ;
exemption from income taxes continued for the whole decade!
I I
land provided a transfer of surplus from other sectors to
jagriculture (Kepenek, 1986, pp.110-11). Based on 1955 data,
I
while wage and salary earners paid 40% of the total direct
taxes and received 29% of the taxable income, agricultural
(
producers paid only 2% of the direct taxes and earned 24% of
!the taxable income (Hale, 1981, p.103).
i
j During the 1950s, DP governments adhered to this policy!
; j
of preferential treatment for agriculture. Despite somej
[deviations after 1953, agriculture retained its status as thej
lengine of development strategy (Hershlag, 1968, p.167).'
I i
During the 1950-53 period, the project remained as a rational
strategy by delivering expected outcomes. As a result of the:
jabove mentioned policies, agriculture output increased!
i !
! notably: the index of production in this sector raised fromj
1119 in 1950 to 207 in 1953 (1934-38=100) (Hershlag, 1968,'
I
p.166). In constant (1968) prices, agriculture's value in GNP,
increased from 15.6 m. TL in 1950 to 22.27 m. TL in 1953,!
.reflecting an average 12.2 % rate of increase (Singer, 1977,j
I I
Ip.193, 195). I
j ;
j As promised by the project, export earnings also;
.increased thanks to the growth in agricultural output by 50% |
]
I
over the same period (Keyder, 1987, p.132). Total exports
166
increased from 263.4 m. US $ in 1950 to 334.9 m. US $ in 1954\
I
(Hershlag, 1968, p.370). In sum, during the early 1950s the:
I
jexpectations of the state were fulfilled to a large extent by
jthis agriculture led development strategy.
| There is no consensus on the development of domestic
'terms of trade during this period (Boratav, 1988, p. 91;
I
jSinger, 1977, pp.224-26). Different studies yield
I
jcontradicting results. Boratav, 1987, p.95; Kepenek, 1986,
p. 110). The impact of the Korean War conjuncture on the
relative prices of different crops, was also uneven. While
I
I
jwheat and tobacco prices declined relative to prices of
r
jindustrial goods, relative price of cotton cotton increasedi
i
I
significantly (Boratav, 1988, p.83). However, even if we|
!
jaccept an adverse development of the terms of trade for
Jagriculture, this does not translate into a general
, I
jdeterioration in the standard of living of agriculturalj
producers. The above mentioned 12% real rate of increase inj
I
agricultural production more than compensated for an‘
i
i
approximate 2-3% deterioration in the terms of trade. Thus,|
I
; i
'transfer of surplus was realized from other sectors to
agriculture by means of the formerly explained government
policies (Boratav, 1988, pp.83-4). Moreover, agricultural!
prices would drop much more relative to industry in thej
absence of price support programs. Overall, the sum paid t o j
1671
ifarmers by TMO increased from 22.8 m. TL in 1949-50 to 519.2'
m. TL in 1954 (Ahmad, 1977, p.136).
I i
j The impact of this project, particularly the
I
jconseguences of extensive cheap credits, tractors strategy
and land distribution proved to be highly uneven. Benefits
went disproportionately to big landlords and wealthy farmers
|(Ahmad, 1977, p.134; Avcioglu, 1969, pp.402-7; Erogul, 1970,!
ip.104; Singer, 1977, pp.205-6, 219). Credits were given inj
proportion to land size (Erogul, 1970, p.104). Moreover, the!
mechanization program supplied tractors to only 25,000-27,000\
\ i
families, leaving 2.5 m. small farmers devoid of any tractor'
(Avcioglu, 1969, p.402; Singer, 1977, p.205). The land!
j I
distribution picture also reveals this inequality clearly. By!
I
1952 the lowest 10% of the families operated 1.8% of land and;
jearned 2% of farm income. The highest 10% however operated
i
jnearly 50% of farm land and earned 5 7.3% of the net farm
income (Singer, 1977, p.207). This picture did not change
) i
during the 1950s (Avcioglu, 1969, p.406). J
I
Despite such an uneven development, one can not lgnorej
the fact that small farmers also benefited from DP policies.
First, between 1950 and 1960, 312000 families received land
junder the 1945 land reform law which was opposed by DPj
ileaders in 1946 (Keyder, 1987, p.126). Overall, from 1945 toj
| i
1959 a total of 1,719,000 hectares of state-owned land and:
1,492,000 hectares of communal pasture land transferred toj
,their new owners (Hershlag, 1968, p.158). The land1
I
|redistribution program increased the total area sown, which,
i '
;grew from 9.9 m. hectares in 1950 to 15 m. hectares m 1959
I
I
(Singer, 1977, p.214). As a result of DP policies peasant
.property grew and petty commodity producers were integrated'
more and more to markets. Over the decade of the 1950s, petty!
| i
'producer units grew roughly by 30% (Keyder, 1987, p.131).
This was not only translated into a stronger middle peasantryj
in terms of economic power but also transformed this class!
i l
jfrom a silent majority to a class that had a strong say in'
politics. j
I
{ The land distribution program in no way, however, showsj
i [
jus implementation of the 1946 land reform law. As indicated;
Jin the previous chapter, this law was killed in 1950 by an
l
amendment which left no access to private holdings.
i
iConsequently, all plots were distributed from state holdings
and only 8600 hectares were taken from private land (Ahmad,1
1977, p.134). The DP always retained its commitment to land!
owners by not touching the issue of land reform at all. |
i
The rapid expansion in agriculture which led to'
I
substantial output and a surplus increase in the early 1950s,;
i
I
i i
I ended by 1954. The agriculture output index declined from 207
|in 1953 to 153 in 1954 and would reach the 1953 level only in
j1958 (Hershlag, 1968, p.166). The value of the agricultural!
1
I sector in GNP dropped from 22,743 m. TL in 1953 to 19,166 m.J
TL in 1954 and rose to 25675 m. TL in 1958 -1968 prices-. Bad
J
weather conditions in 1954 were largely responsible for thisi
i
result. The real average rate of growth between 1954 and 1960|
was 2.7% (Singer, 1977, pp.193-95). Similarly, total exports
declined from $362.9 m. in 1953 to $247.2 m. in 1958
(Hershlag, 1968, p.370). The average real rate of growth ofI
i I
GNP declined to 3.4 % in this period (Singer, 1977, p.195). j
1 I
1 One reason behind this sharp change in 1954 was the end;
lof Korean War. The favorable price conjuncture created by*
1 ’
this War ended in 1954 and the terms of trade which had
i |
improved for agriculture until 1953 began to deteriorate
(Keyder, 1987, p.132). The terms of trade dropped from 130 in!
,1950 to 117 in 1954 (Hershlag, 1968, p. 179). On the other!
I
I , |
ihand, the structure of agriculture was the determining factor;
t
|of this outcome. The strategy was short-run oriented and
i
iinadequate to lead to long term growth.
i
! First, DP policies contributed to greater inequality in
; i
the countryside due to the failure of effective extension of-
resources to small farmers and poor peasantry. Second, the;
land structure in rural areas was fragmented, with:
unworkable, scattered and atomistic tiny holdings which lead
to high costs because of waste of resources (Singer, 1977,
!
pp. 217-18). These factors, together with the insufficient
; I
| • • 1
jemphasis on long term investments m agriculture,
particularly irrigation and fertilizers, interrupted the
170!
I . !
early boom. Finally, the DP failed to take into consideration!
jthe true character of agricultural expansion in the earlyi
t
I
1950s. Output increased not because of a productivity rise
1
but due to the extension of marginal lands and conversion of;
ipasture land. Hence, more and more resources were needed
because of diminishing returns (Hershlag. 1968, p.167) and!
i I
slowed down agriculture growth particularly when the limits!
I
of using new fertile lands were reached. !
This failure, however, did not change the DP's
i
coirunititient to the current accumulation project. The DPj
[continued to transfer resources systematically to agriculture;
'until 1960 (Hershlag, 1968, p.167). Facing this deepening'
[crisis, what were the alternatives of the DP by the mid!
! i
!1950s? The industrial bourgeoisie was still far from!
forwarding an alternative project that would sound rational;
jto the government. This would not take place until the second
'half of 1950s as explained later. There was the option of!
reverting back to the dominance of state capital, but this
l
|was not feasible politically. Later, however, state capital
' I
jturned out to be the main source of surplus revenue
i
generation but in a different form than in the 1930s.
1 i
On the other hand, although the agricultural-led
development strategy failed to retain its rationality, the DP
I
I
was not in a position to risk its political power byi
I
, I
jswitching to a new project. The prime minister, Mr. Menderes,|
171
I
was determined to extend the economic boom at any cost, to
keep his political base, and this explains the basic
I '
■irrationality of the project between 1954 and 1960. Between
il954 and 1958, we observe ad hoc policies of the government
l
|(See Krueger, 19 74) while the state was turning out to be
more and more interventionist. The general line of^
i I
development in this period was to finance the project byj
I I
inflationary tools and loans while keeping the pro-
agricultural stance and trying to balance the system withj
'compulsory restrictions in imports, investments and;
consumption (Hershlag, 1968, pp.154-55).
As emphasized earlier, trade liberalization policies had;
i
been initiated before 1950 by the RPP government under:
i
internal and external pressures. Particularly after accepting
I
the position promoted by the OEEC and US, such an opening-up;
and liberalization was unavoidable right after the War;
i i
1
|(Kazgan, 1985, pp.300-1). 1950 appears to be the turningi
1 i
point of this liberalization trend. 60% of imports was'
^liberalized in January to become effective by October and aj
i i
jfurther increase up to 75% was secured for next February|
(Alpar, 1974, p.62; Hershlag, 1968, p.181). This'
i 1
[liberalization program, however, did not last that longl
i |
because of balance of payments difficulties. Total imports!
increased from $285.7 m. in 1950 to $532.5 m. in 1953, while'
i _
ithe trade deficit soared from $23 m. to $137 m. during this:
; 172
period (Singer, 1977, p.392). Declining exports and ever
growing needs of the project for imports forced the
I
'government to resort to short-term commercial and supplier
i
I
credits (Krueger, 1974, pp.30-1). These increased from 0 to
$123 m. between 1950 and 1954 (Singer, 1977, p.392).
!
This spelled the end of the liberalization attempt.:
After 1953 these balance of payments problems put much of the:
i
burden of supporting the nation's capacity to import on,
1 1
ipublic transfers from overseas which reached a total of j
■ i
$1,416 m. by the end of 1950s (Singer, 1977, p.402). Programj
, <
credits and other transfers through US PL480 sales and otherj
■grants were the main instruments. Program credits increased!
i
<
jfrom $61 m. in 1953 to $147 m. in 1959 (Singer, 1977, p.392).'
Transfers provided from USPL 480 came from US agricultural
surpluses and exceeded a total of $350 m. until 1962’
(Kepenek, 19896, p.103).
However, these transfers were not sufficient to offset
ithe growing balance of payments deficit. Consequently, the!
i
i
■government returned to the ad valorem method in the end of
j
11953 and imposed restrictive duties on imports, designated1
quotas and limited the use of foreign exchange to certain
goods (Krueger, 1974, chapter 2; Singer, 1977, pp.386-87).
Ilmports declined from $583 m. in 1953 to $478 m. in 1954 and!
! i
|to $478 m. in 1956 (Singer, 1977, p. 392). The share of;
i j
iconsumer goods in total imports declined from 19.8% in 1953|
i
to 11.1% in 1956 (Singer, 1977, p.397) thanks to exchange
surcharges of 25%, 50%, and 75% decreed for 'luxury' imports
|
(Krueger, 1974, p.33).
; Imports of investment goods also decreased massively
from $276.9 m. in 1953 to $135.5 m. in 1958 seriously
i 1
hampering the pace of development (Singer, 1977, p.397). Whenj
i ‘
the trade deficit grew further between 1954 and 1955, fromi
$143 m. to $185 m., financed mainly by suppliers' credits]
I
(Singer, 1977, p.392), new and more severe restrictions werej
l
imposed on imports. All foreign exchange allocations and
I '
I
import needs of the economy were now decided by the Ministry;
i
of Economics and Commerce (Krueger, 1974, p.36). The state!
^gradually became the sole importer of several raw materials!
and goods. Moreover, because of the foreign exchange
bottleneck, the share of bilateral clearing agreements;
[(barter trade) in total imports increased from 7% in 1952 toj
I . i
[29% m 1955 (Krueger, 1974, p.39). 1
i :
- In sum, the liberalization attempt of the DP in thej
I
early 1950s did not last more than 3 years. There were twoi
! I
main implications of this reversal which will be discussed ini
^greater detail later. First, the allocation of foreign
i 1
exchange resources was concentrated increasingly in the hands
of state and its preferential treatment to agriculture in
■using these resources made the emerging industrial
i
bourgeoisie discontent. Second, import restrictions
unintentionally opened the door for the strengthening of
industrial capital which started to manufacture formerly
iimported commodities. These implications played a crucial
irole in the transition to the 1960s.
i
I
] As mentioned in the previous chapter, the DP had planned!
i . I
to finance its development project partly by foreign funds,,
which would be paid back with agricultural export revenues.I
i
Moreover, the DP had repeatedly asserted its encouragement of|
i
Iforeign capital, to increase the surplus production capacityj
I |
in the economy. The role of foreign aid, transfers and loans!
!
iin financing the project have already been mentioned. Between
1948 and 1959 Turkey was granted a total of $1,210 m. from
the Marshall Plan to be used for economic development. $698;
! i
jm. of it was grants-m-aid (Hershlag, 1968, p.150). Amencanj
I i
Jaid and loans paid for 50% of imports and 40% of thej
increases in investment in the early 1950s but these figures
decreased in the late 1950s when local investments and the
share of short-term foreign credits increased (Hershlag,j
1968, p.151). These funds were used not only to finance thej
f
(importation of agriculture machinery and infrastructure!
i
investments but also of consumer goods (Hershlag, 1968,]
p.150). Besides the Marshall Plan transfers, IBRD project:
icredits -a total of $62.2 m. over the decade- (Hershlag,!
J1968, p.152) and $95 m. withdrawn from IMF and European Moneyj
jAuthority (Singer, 1977, p.392) provided foreign funds to the'
' i
project. I
' !
i
While these transfers and loans certainly contributed;
1 »
'to the financing of the project, they fell short of
> satisfying the ever growing demands in spite of DP's
I j
[continuous efforts to increase these external funding
(resources until 1958. External debt increased from $775 m. TL
in 1950 to $1,177 m. in 1955 to $3,836 in 1958 and over
i i
;$5,000 m. in 1960. More interestingly, the ratio of external
|debt to national debt increased from 30.2% to 51.5% between!
I
1950 and 1958 (Hershlag, 1968, p.338). The ratio of external|
l j
I
Jdebt to GNP also increased, from 8% to 10 %, during this
'period (Hershlag, 1968, p.338; Singer, 1977, p.326). The debt
!
payments in the meantime rose from $15 m. to $106 m. betweenj
; 1950 and 1955 and dropped to $69 m. in 1958 due to payment!
difficulties (Singer, 1977, p.392). As these figures clearlyi
!
reveal, following 1953, as the potential of the project to
i
[increase exports and surplus production capacity of the;
; i
economy faltered, the poor balance of payments position!
i
[forced the DP to curtail imports and to finance its project
with heavy external debts.
The DP also expected to increase the surplus production]
, capacity of the economy by attracting foreign investments toi
Turkey through several laws and regulations. DP government
'first amended the current Law for the encouragement of|
Foreign Investment in 1951. It allowed repatriation of!
I !
■profits and capital in the original currency and granted all;
i !
i . . *
rxghts and exemptions formerly enjoyed by local investors to|
I |
the foreign investors as well (Erogul, 1970, p.73; Hershlag,;
1 1968, p.152; Singer, 1977, p.399). However, a 10% restriction
t
Ion repatriation of profits and 3 to 5 years waiting period toj
| t
transfer capital proved these measures to be ineffective.!
According to different sources with conflicting figures, thej
value of foreign investments between 1950 and 1954 is:
■estimated as $4 m. (Uras, 1979, p.162) and $9 m. (Hershlag,,
11968, p.345). Finding this amount inadequate, and given the
i
expected role of foreign capital in the project, the DP
I
}
passed a new law in January 1954. All previous restrictions
! t
jwere abolished, permitting foreign firms to repatriate their
profits, interest and dividends without any limits and
i
transfer their entire capital and reinvested profits upon;
jliquidation (Erogul, 1970, pp.92-3; Hershlag, 1968, p.153;
!
ISinger, 1977, pp.399-400). Two months later, in March 1954,
: a new petroleum law was published ending the state's monopoly!
1 f
|Of the development of Turkey's oil resources (Ahmad, 1977,j
jp.132; Singer, 1977, p.400). [
! |
As a result of these legal changes, foreign investments
i
‘ increased but not to a great degree. Especially, economic
jcrisis, fiscal irresponsibility and the uncertainty of the
i ;
Hate 1950s did not provide an optimistic investment climate
if or foreign firms. Foreign investments initially jumped
' 1
significantly m 1954 but then began to decline until I960.;
I !
jOnce again various sources show conflicting figures. Between
I I
11954 and 1960, foreign investments are estimated as $29 m.
I
'(Hershlag, 1968, p.345), $55 m. (Uras, 1979, p.162) and $74
m. (Singer, 1977, p.392). In addition to these numbers,
between 1954 and 1963, $182 m. worth of foreign investment'
was made in the oil industry (Kepenek, 1986, p.105) which was
much higher than the foreign investments in other industries.|
I
In this field 27 companies had taken out a total of 236j
Concessions during the 1950s. Only 4% of total oil production!
; i
I
jwas made by Turkish Petroleum Corporation in 1960 (Hale,:
H981, p.89). These conflicting figures makes us unable to
interpret soundly the trend of foreign investments during thej
i '
1950s. However, one may conclude that foreign investments}
I j
Idropped during the late 1950s due to economic conditions andj
[in general fell short of fulfilling the expectations of the
DP. On the other hand, as discussed later, starting from thej
mid 1950s, when the industrial investments became more
!
(profitable behind high tariffs, foreign and local joint!
| i
[ventures mushroomed which in turn accelerated the pace of
i ;
(industrialization in the private sector. i
A third pillar of the DP project (pro-liberalization and
priority of agriculture are considered to be the other twoj
i
pillars) was its anti-etatist stand. When the DP came to;
power, there were compelling reasons to keep this anti-
1
state platform which was developed during the late 1940s. The
l i
DP’s economic as well as political base was agricultural*
producers and commercial capital, which were deeply excited;
i i
by the free-market ideology. Moreover, the West had a !
determined approach against state intervention. This anti-!
i i
state stand was emphasized strongly during the 1950 election,
i
campaign (Ahmad, 1977, pp.125-26) and contributed to the DP's.
1 t
victory (Krueger, 1974, p.6). J
j The DP’s election campaign included even the sales of|
: i
■ i
State Economic Enterprises (SEE) to private firms. The mainj
I j
objective was to prevent the waste of resources by
withdrawing the state from unproductive production areas
(Hershlag, 1968, p.138) while realizing the campaign;
i
promises. However, Mr. Menderes was under the illusion that;
! !
; the creation of liberal capitalism was merely a matter of
>
'implementing the appropriate laws and regulations (Ahmad,
1977, p.128). Through legislation it would be possible to;
abolish the monopolistic tendencies of state, limit state!
I
ownership to strategic industries and public works, and as a
result increase the share of the private sector in those!
1 ' I
^sectors where the state no longer existed. j
i i
i i
, The DP immediately started to research the candidate;
l 1
SEEs that would be sold to the private sector. It established|
a privitization council which planned first to de-etatize the!
; 179
i
Siimerbank construction industry -brick and cement factories
i
^Ozmen, 1987, pp.52-3). This would be followed by the textile
i
industry (Ahmad, 1977, p.128; Avcioglu, 1969, pp.451-52).
Nevertheless, during the 1950s, with the exception of
jshipping and oil industries, no transfers of public,
[enterprises to private hands were implemented (Ahmad, 1977,1
'p.129; Hershlag, 1968, p.140; Krueger, 1974, p.7). Even thesej
;two exceptional cases were not full transfers. The Treasury!
retained 51% of the shares in the Maritime Bank, and in the,
[oil industry/ a public company, the Turkish Oil Company wasj
[established alongside foreign and local firms (Hershlag,;
1968, p.140). The most important reason behind this failure
|Of privitization attempts was the current weakness of privatej
lindustrial capital in 1950.
In 1950, private manufacturing industry was basically!
I !
[formed of atomistic, small-scale companies. Only 3.2% of the1
i I
l
firms had more than 10 employees and/or 10 HP machinery. 44%’
|Of wage labor, 33.4% of the output and 40% of the value added!
^belonged to these small-scale companies (Tiizlin, 1977, pp.8-j
15). In the private sector, figures for the number of
1 I
*
! employees, value of output and value added per firm were 2,|
I i
20,000 TL and 6,000 TL respectively. Corresponding figures in'
[the public sector were 738, 9 m. TL and 4.16 m. TL (Ttiziin,
i
jl977, p.10). Private industry was basically dependent on
! agriculture and concentrated in consumption goods. The share
18 Oj
to the agricultural sector, with a share in GNP of 45.5%, thej
■ share of industrial sector in the national economy was very1
;small. Similarly, the share of the industrial sector in totali
i .
exports was negligible (Hershlag, 1968, p.370).
j Consequently, Democrats soon realized that the social
I |
j class that would reinforce their anti-state platform was v e r y j
■small and underdeveloped. This explains to a great degree why!
: |
private capital could not come up to Menders's expectations
I in purchasing the SEEs offered to them or in increasing their
I
jinvestments in new industrial ventures (Ahmad, 1977, p.129).
j
I The DP embarked on its project with the intention of:
transferring the public sector industrial base to the private
I «
|sector in the long run while developing the industrial
f ,
!
! potential of the latter with appropriate policies. The DP
I !
took an immediate step and established the TSKB (Industrial
I Development Bank) in August 1950 to achieve its above
! mentioned objectives (See for TSKB, Ahmad, 1977, pp.128-29;!
I |
I
iRozaliyev, 1978, pp.294-97; Singer, 1977, pp.256-62).The
initial capital of the TSKB was provided by commercial banks,
1 ;
j the Chamber of Commerce and Industry and private enterprises
|(Kepenek, 1986, p.113), and additional loans came from the
Central Bank, the World Bank and Marshall Aid (Singer, 1977,;
pp.256-57).The TSKB was designed to supply long term credits-(
i I
| -at relatively low interest rates— and foreign exchange
I
resources to the private sector in the absence of a developed
capital market. The interest rate on 3 to 5 year TSKB loans,
: i
[was 7% compared to 12-20% commercial bank rates (Rivkin,
1965, p.114). The TSKB was also assigned to control the;
I
distribution of Marshall Aid funds to the private sector
demands. The TSKB acted initially as a strong catalyst for;
'private industry (Hanson, 1959, p.127) making several
production opportunities feasible. Between March 1951 andi
i
February 1952, the TSKB approved 85 loans and total loans
reached 83 m. TL by 1953 (Singer, 1977, p.258). In 1955, 53!
i
i . 1
jfirms were granted 131.6 m. TL. These figures increased to 79]
jand 317 m. TL in 1960 (DIE, 1960-62, p.443). '
! ^
I Most of these investments were made in consumption goods!
: I
industries. Between 1953 and 1957 the share of consumption,
j
^goods industries was 54.4% while intermediate goods andj
[investment goods industries received 29.7% and 9.3% of the;
! j
jTSKB loans (Tiiztin, 1977, p.22). During the 1950s, nearly
i I
i , , i
’ 3/4th of the credits were given to the textile, cement,:
i !
jglass, petroleum, chemicals and food processing industries!
(Rozaliyev, 1978, p.297). Between 1950 and 1962, the TSKBj
!
;released a total of 500 m. TL credits to the private sector
i(Kepenek, 1986, p.114). The TSKB usually favored bigger;
| ;
|companies. Between 1950 and 1955, 56% of its credits were'
i
l
jgiven to 12% of the recipient firms (Rozaliyev, 1978, pp.296-|
! !
j 97). Although the TSKB contributed significantly to the;
1 '
1 I
: development of private industry, it did not satisfy the;
182!
i
credit demands of industrial capital (Warren, 1977, p.162,
189). Most of the credits were obtained from commercial banks
at a higher cost (Tuziin, 1977, p. 23). !
I Besides the TSKB, however, there was no otheri
j j
[institution which offered long term loans at low interest
1 I
:rates (Singer, 1977, p.258) or any systematic policy toj
promote the interests of industrial capital. Until 1963 therJ
is no evidence of a legal structure that provided an
I
;incentive system targeting private industrial capital1
i
1(Kepenek, 1986, p.113). Industry did not receive a
I j
!preferential treatment similar to agriculture. This is, forj
example, quite evident in the comparison of Central Bankj
credits extended to agriculture and industry. Between 1950'
I
I
j and 1960, Central Bank credits extended for agriculture
:increased from 78 m. TL to 366 m. TL while credits received.
' i
by the industry rose from 40 m. to 153 m. between 1955 and
1960 (DIE, 1959, p.431; DIE, 1960-62, p.439). Outstanding
j |
:commercial bank credits to agriculture were also greater than
! . !
I the amount lent to industry. Between 1954 and 1960, credits
i
jextended to agriculture increased from 475 m. TL to 2,392 mJ
I
TL while the corresponding values for industry were 112 m.
TL and 223 m. TL (Hershlag, 1968, p.333). The figures given
! . i
J earlier for the Agriculture Bank and TSKB reinforce this
I
picture.
183
i
The development of private industry during the late!
11950s was a result of two effects discussed earlier. First,I
I
i
the boom in agriculture, which stimulated agriculture-related
iindustries; second, the curtailment of imports which started
jthe early stage of import-substitution, together with the
jparticipation of foreign capital, which was attracted by the
i
! new laws passed to encourage foreign investments. However, as
emphasized throughout, all of these factors were indirect
impacts of developments in other areas rather than the direct1
i
jresult of deliberate state policies.
i
| Quantitative developments in the private industrial
! i
i i
jsector during the 1950s may be indicated as follows: j
; i
Between 1950 and 1954, the number of firms increased'
from 2,515 to 3,704, the value of production rose from
, j
11,074.2 m. TL to 2,315.2 m. TL, the sectoral value added
i !
isoared from 305.7 m. TL to 747 m. TL and the number of;
; j
employees increased from 86,826 to 130,960 (DIE, 1959,
,p.293). Given an inflation rate of 19%— for 4 years— (Giilalp,
1983, p. 150) the real growth rates of the value added and
t
joutput were quite impressive thanks to the boom in1
' agriculture. Between 1955 and 1960, the number of firms rose
| t
i from 4,106 to 5,284, the value of production soared from
! 2,981 m. TL to 7,937 m. TL, the sectoral value added rose
I
I 1
from 931 m. TL to 2,425 m. TL and the number of employees.
I increased from 139,729 to 169,000 (DIE, 1960-62, p.281). If
j
I
184
we consider a 100% inflation rate during this period (Giilalp,
[1983, p.150), we observe a remarkable but lower real rate of
growth. Fixed capital formation also increased from 151 m. TL
in 1955 to 277.3 m. TL in 1960. The significant jump took
place between 1958 and 1959 when fixed capital formation;
increased from 183 m. TL to 285 m. TL due to the optimistic!
| i
investment environment created by 1958 stabilization measures)
j i
(DIE, 1960-62, p.281). ■
I
Gross private fixed investment m current prices;
jincreased from 643.3 m. TL in 1950 to 3,524 m. TL in 1960
I
j(Singer, 1977, p.326, table 1). If we transform these figures;
to real values— in 1961 prices— we observe a 35% growth I
I
during the 1950s. Gross real investments increased sharplyj
until 1954 (by 48%) but then fell by 31% until 1956 and then;
s
jrose by 32% until 1960 (Singer, 1977, p.332, table 2). The
share of private gross fixed investments in GNP increased
from 6.6% in 1950 to 9.2% in 1954 and, after falling to 5.9%
Jin 1957, reached 7.6% in 1960 (Singer, 1977, p.332, table 3).
All figures on private industry first show an upward trend!
I 1
I
until 1954 due to the impact of agricultural expansion. Then:
a crisis period in the mid 1950s is observed. Finally, with1
i
|the influence of import substitution and 1958 measures, a
I i
i j
Islow recovery is seen by the end of the decade. i
' If we study the figures of private— and public— capital
formation, we witness a similar but an erratic trend. Between!
185 ;
[1950 and 1953, private capital formation increased by 175% inj
; i
i I
■real terms, from 135 m. TL to 371 m. TL. Then it decreased to1
j i
|236 m. TL by 1958, and rose to 283 m. TL in 1960 with the
i
positive impact of the 1958 program. The share of the private
sector in total capital formation also increased from 46% to
55% by 1953, declined to 43% in 1958 and reached 60% in 1960
! . i
(Singer, 1977, pp.241, 288-89). Public capital formation1
i
also increased substantially from 158 m. TL in 1950 to 301 m.
TL in 1953 and continued to rise until 1956 while covering'
the gap created by diminishing private capital formation.j
After reaching 584 m. TL in 1956, however, under thej
! j
influence of both the deepening crisis and then the demands!
I
'of the 1958 measures, it dropped to 177 m. TL in 1959
!(Singer, 1977, pp.241, 288-89). ;
I •
When agricultural expansion ended by the end of 1953 and
private investments began to decline in the mid 1950s, the DPj
government had no alternative other than reverting back to|
the state industries to avoid an economic bankruptcy. An|
jincreasing share of the state in the economy can be observed1
in several trends during the second half of 1950s.
I
1 First, when we study the figures of the manufacturing!
industry employing more than 10 workers, we find that thej
share of the state in this sector showed no decline but a!
i
|
steady development after 1953. In current prices value of
production increased from 930 m. TL in 1950 to 1,500 m. TL in
7 186
i
1953 and then soared to 6,069 m. TL until 1959. In 1961
prices value of production increased by 50% until 1954 and by
I
'100% between 1954 and 1959— using a government services
deflator (Singer, 1977, p.241; DIE, 1959, p.293).
A more remarkable development, however, was the
channeling of most of DP investments to industries linked to
agriculture. While the real value of production— in 1961!
'prices— in the food processing, liquors and tobacco;
(industries increased from 1,156 m. TL to 1,456 m. TL between
i i
|1950 and 1953— 26% overall and 6.5% annual— it jumped to
j
3,452 by 1959 -137% overall and 19.6% annual- . Real value
i i
(added— in 1961 prices— increased by 39% until 1953 and byj
jll4% between 1954 and 1959 (DIE, 1959, p.287). Another!
! 1
jsignificant expansion was observed in the cement industry'
i
,which was a crucial import for the DP's development projects.;
I
Cement production increased from 395,630 tons to 530,872 tons,
. i
|Until 1953— by 34%— and then exceeded 2 m. tons by 1960— by
|284% (Singer, 1977, p.271).
i SEE figures also reveal the significant contribution ofj
I
I '
istate capital to industrial output during the 1950s (Singer,:
' i
1977, p.303, 311). The real value added of the non-financial:
public enterprises in the industry increased from 820 m. TL
I
!to 2,129 m. TL between 1950 and 1960— 160%. Total public
| i
^employees increased by 127.5% during this period (DIE, 1959).'
'Again within the industrial sector, food processing showed;
187
the highest rate of increase— by 310% (Singer, 1977, p.308,
'table 15). We observe a similar trend for capital formation
in the public sector. Between 1950 and 1955 agricultural
jrelated industries increased from 22.5 to 66% and then
1
dropped to 30% by 1959 (Singer, 1977, p.289).
i
The growing share of the state was also evident in the*
share of public investments in GNP, which increased from 4.1%
to 9.3% during the decade. The share of private investments
in GNP declined slightly, from 8.8% to 8.2%. The share of
| I
Ipublic investments in total investments rose from 32% to 53%|
between 1950 and 1957 (Singer, 1977, p.332, table 2). J
| Overall, despite its initial anti-etatist approach, the!
I
DP government started to put emphasis on the state sector
during the mid 1950s. Besides the economic factors explained!
Jearlier, political incentives behind state investments
I ,
j(Krueger, 1974, p.7; Singer, 1977, p.286) forced the state toj
! increase its production and investment capacity, particularly!
jin consumer goods industries linked to agriculture. Such a|
deviation from its initial path did not contradict the DP's1
\
' . t
imajor commxtment to agrxculture. Rather than pursuxng a
I
jgeneral industrialization plan (Hershlag, 1968, p.142;
Singer, 1977, p.264), the DP focused on certain industries,
jlike food processing, tobacco and cement which were vital to!
iagricultural interests. Hence, although the state augmented
I
I
jits efforts in industrialization, the main motivation was
188
I
still to promote the interests of agricultural producers
jrather than to support industrial capital.
| DP governments took great pains to prove that their
■policies were distinct from those of the RPP until the 1950s
(Hershlag, 1968, p.139). Although one can not deny a<
!
remarkable convergence between RPP and DP projects in the mid
land late 1950s, there was one major difference. The DP
project did not give a priority to self-sustained
industrialization under the leadership of state capital. As
l
'explained before, priority was always given to the;
I
; agriculture. Even their public investments in the industry
were largely related to the agricultural sector. Thus state
capital was instrumental either to support the agriculture
jdirectly or complement it whenever the latter failed to,
, create the urgently needed surplus revenue for the
i
development project.
The DP's preferential treatment of agriculture was also
i I
'reflected in its fiscal and monetary policies. The ad hoc.
f
jpolicies pursued after 1953 in order to patch up the
l
i
shortcomings of the project not only moved this strategy morel
and more in an extremely irrational direction, but alsol
created substantial discontent among the other classes in the’
i
society. One major source of the newly burgeoning industrial
(
capital1s complaints was the growing share of public sector!
land state intervention as mentioned formerly. Another reason
I i
1891
was the continuing efforts of the state to sustain itsj
i j
strategy through inflationary policies which worked tOi
transfer resources to the agricultural sector despite its
proven incapability of producing an adequate amount of
i
surplus to reproduce the project.
; First, real government expenditures rose rapidly during
j I
[the decade relative to government revenues. While the|
jambitious development projects expanded expenditures fromj
; i
5,020 m. TL in 1950 to 10,390 m. TL in 1960, revenues;
increased from 5,167 m. TL to 8,642 m. TL , in 1961 prices!
i
(Singer, 1977, p.332, table 2). While real expenditures!
'increased by 107% (9.7%/year) real revenues rose by 67%
(6%/year) during the 1950s. The share of total expenditures
in GNP soared from 18.9% to 21.8% and the share of revenues
in GNP declined from 19.5% to 18.1%. Consequently, the;
I
government budget deficit grew as a percentage of GNP. While
I
jit was a mere .5% of GNP in 1951 it jumped to 3.7% by the end
jof the decade (Singer, 1977, p.332, table 1). These
j
developments were particularly significant between 1953 and;
j
j1955 when government expenditures rose by 37% and the budgetj
{deficit increased from 97.1 m. TL to 452.3 m. TL in current
[values (Hershlag, 1968, p.336). j
One reason behind this growing imbalance between the
[expenditures and revenues of the state was the inability of
!
I the government to increase its revenues. First, one potential;
J 190
;revenue source— the revenues derived from the sales of non-
I
agriculture SEEs— fell behind the inflation rate due toi
■official pricing policies. The government either gavei
I I
jinstructions to hold prices constant or because of the,
.imposed price ceilings, SEE prices stayed relatively lower!
than the general price level (Kepenek, 1986, p.101, 115;
Krueger, 1974, p.44). Between 1950 and 1958, while the
I
Igovernment revenues price deflator rose by 56%, the
corresponding price deflators of GNP and industry increased
'by 114% and 188% (Singer, 1977, p.241).
There are two significant implications of the low prices
i
of state services. First, it reveals a transfer of revenues]
1 i
from the state to the other sectors using state goods and'
I services. Since, unlike the 1930s, state capital did not
appear to be the dominant capital fraction, such a policy of
holding SEE prices at lower levels was consistent with the DP
iproject which aimed to promote the interests of other
fractions of capital.
Second, because of this pricing policy, SEEs became
j
junable to cover their expenditures which boomed after the midj
j1950s due to rising costs. Between 1951 and 1960, thej
cumulative deficit of SEEs in transportation, communications,!
electronic and industrial sectors was 2,256 m. TL. This
l
! corresponded to 40% of their investments (Singer, 1977,
I !
|p.354). These deficits were mainly financed by Central Bank1
'credits. Those credits increased from 745 m. TL in 1950 to
i
3,247 m. TL in 1958, the biggest jump appearing during 1956-
1958— 76% in 2 years (Krueger, 1974, p.46).
Another potential source of state revenues, namely tax
[revenues, also failed to cover soaring expenditures. In
»
[current values, total tax revenues increased from 1,241.9 m.
! '!
ITL to 3,868.8 m. TL between 1950 and 1958 and then reached
i !
15,541.2 m. TL by 1960 (Singer, 1977, p.360). When we
translate these figures to percentages of GNP, we find that
'the share of taxes in GNP declined from 12.3% to 10.6%
I
[between 1950 and 1958 and then rose to 11.7% by 1960. Direct;
|
[taxes merely contributed to l/3rd of tax revenues while
[indirect taxes, like customs duties, excises of the state:
.
i
monopolies, sugar consumption tax and production tax
jconstituted the remaining 2/3rd (Singer, 1977, pp.358-63). I
i i
The most interesting aspect of the tax structure was the:
I
i exceptional status of the agricultural sector. It paid
i
virtually no taxes during this period and this was one of the
major complaints of the DPT (State Planning Organization);
established after the 1960 coup. The agricultural sector paid
[only 1.78% of all direct taxes in 1959 and 1960 (Singer, 197,
p.366). Had agriculture paid its fair share of taxes there
would have been a 33% addition to income tax revenues
[
(Singer, 1977, p.368).
i As a result of these developments, modest budget
I
('surpluses of 1950 and 1951 were transformed into mounting!
I
}
[deficits. By 1954 the deficit was 402 m. TL and reached 874
|m. TL in 1956 and 1,721 m. TL in 1960 (Singer, 1977, p.326).
!
[Between 1952 and 1960 the public debt more than tripled
[(Hershlag, 1968, p.338). This soaring budget deficit, a
I
[direct offspring of the project itself, in turn contributed!
, j
[heavily to creeping inflation, starting from 1953. ’
Given the earlier-mentioned limitations and shortcomings
I :
jof the project to generate the surplus revenue necessary toj
!
finance its expenditures, the DP government had no option
other than printing more money. We have already discussed'
I I
Ithat the TMO and other SEE borrowing from the Central Bankl
! I
! largely explain this rapid increase in the money supply;
during the 1950s. The share of the TMO's credits from the|
Central Bank rose from 18.3% in 1950 — 196m TL out of 1,071|
I
[m. TL— to 31.8% in 1954— 708 m. TL out of 2,228 m. TL— and it1
I |
jwas 31% in 1958— 1371 m. TL out of 4,435 m. TL (Krueger,|
il974, p. 43, 46). By 1958 the contribution of all SEEs' I
j |
[borrowing to the increase of high powered money was over 43%[
1 I
(Krueger, 1974, p.46). j
i Meanwhile, this rapid monetary expansion fueled by the
I credits supplied from Central Bank to finance the development!
i
jproject led to a severe inflation problem. If we compare the
[rate of increases in high powered money and price levels, we;
193
jfind out a strong link between the monetary expansion and
i
jinflation (See, Fry, 1972; Krueger, 1974, p.50: Singer, 1977,|
pp.334-40). High powered money rose from 1971 m. TL to 7,487!
j j
!m. TL between 1950 and 1958. The most significant jump|
(
[occurred during the last 3 years of this period with a 76%
i
increase (Krueger, 1974, p.46). Similarly, the price index
(1950=100) rose to 208 by 1958 and increased by 59% between
I
,1955 and 1958 (Singer, 1977, p.334).
! j
j In our study, however, rather than this relation between;
the money supply and prices, the consequences of thisi
I
inflationary environment on internal classes and its link toj
, I
jthe structure of the DP project is more important. Starting!
from the late 1950s, the chaotic state of the economy led toj
i . . . i
'a growing discontent of the industrial bourgeoisie as well asj
to a loss of faith by international institutions. These*
|
[forces which were already dissatisfied with the government's!
1 I
[preferential treatment of agriculture started to promote anj
1 ,
jalternative hegemonic project which was executed by the post!
? i
1960 governments. j
1 j
j Two important developments played a major role during
jthe transition from the DP project to the strategy of the
| 4
! 1960s and 1970s. First, we have already stated that ad hoc|
, I
policies of the DP government, with the aim of patching up!
|the shortcomings of the accumulation project, pushed the!
I 1
;whole project into a more and more irrational character.
Isecond, starting from the mid 1950s, industrial capital
emerged as a candidate for the leadership of a new
! i
alternative hegemonic strategy that was also supported byj
external forces.
| The industrial bourgeoisie was not in a position strong
l
'enough to claim such leadership role after World War II. It
i
was weak relative to the agricultural sector and merchant
j
jcapital in terms of both political and economic power.
jHowever, the course of events in the economic arena during'
|the 1950s directly or indirectly contributed to the
; strengthening of this class. Particularly, the import-
jsubstitution policies of the government which were imposed as
i i
|a result of the foreign exchange bottleneck after 1953 played!
i j
la significant role. The foreign exchange crisis as explainedj
i
jearlier brought a protectionist foreign trade regime to the
country. On the other hand, this regime provided a suitable
environment for the establishment of a new hegemonic bloc
among local and international capitals in the industrial
'sector.
I
First, the curtailment of imports made the production
of previously imported commodities in Turkey profitable. This
1
jin turn provided a natural alliance between international
capital— which had to overcome the new tariff barriers— and
j <
.merchant capital that was now in a position to invest its!
' i
capital in industry to exploit these new profitable
195
opportunities (See, Alexander, 1960). Moreover, during the
i
jl950s, since the exchange rate stayed at a constant level,
'creeping inflation made this rate more and more overvalued.
|
iThis naturally made the domestically produced goods more!
!
profitable than imported commodities. Finally, the
'international price conjuncture favored industrial goods!
I j
'against agricultural goods. A combination of these factorsj
! i
made it possible to transform a section of merchant capitalj
I
to industrial capital within an alliance with the metropoli
capital (Giilalp, 1983, pp.47-48; Kazgan, 1985, p.308; Keyder,;
I I
j 1987, p.134; Oncii, 1980, p.406). The stimulating role of|
i !
'protectionism on industrialization was well perceived by the'
I
Chambers of Commerce and Industrialists as exhibited in their
.economic report of 1958 (Tuziin, 1977, p.23). j
This import-substitution regime not only created many!
small-scale production units (Kepenek, 1986, p.117;
lYerasimos, 1976, pp. 1413-14), but also led to several large-
scale private industrial establishments. Value of production'
i
and value added generated in the private sector increased*
from 307 m. TL and 91.8 m. TL to 2,412 m. TL and 922.4 m. TL
respectively between 1950 and 1959 for establishments
employing more than 10 workers (DIE, 1959, p.288). The number!
jof large-scale firms doubled, from 2,500 to 5,200, during!
jthis period (DIE, 1959, p.283), but major investments were
!made following the 1954-1955 period when import quotas became
i '
effective for formerly liberalized commodities (Oncii, 1980,
p.466) .
Textiles, which accounted for 35% of the total income
created by the private sector in manufacturing (Singer, 1977,1
,p.303), witnessed a substantial growth in 1950s. The share ofj
|
; the private sector in the cotton textile industry rose from;
U4.8% to 70.5% during the 1950s (Boriiban, 1977, pp.15-16).f
! ;
Private capital formation in textiles increased from 15.2 m.;
1 !
I
I tL to 105.7 m. TL between 1950 and 1956 and then dropped to
I
!83 m. TL in 1960. The share of the private sector in total
capital formation of textiles rose from 44% to 84% during
ithis decade (Singer, 1977, pp. 288-89). The private sector
i '
jaugmented its share in other sectors such as rubber,
jchemicals, pharmaceuticals and machinery (See, DIE, 1959, pp.
I
I
i289-292; Singer, 1977, pp.288-89). The share of the private
sector in the total value added created in the manufacturing!
sector— minimum 10 employees— rose from 42% in 1950 to 44% in'
1953 and to 55% in 1958 (DIE, 1959, p.293). This upsurge was
extended through the joint ventures established between
I
Imetropol capital and local capital, especially in the areas
I
of rubber, chemicals, pharmaceuticals, food processing and
Imachinery (Kazgan, 1985, pp.313-14; Kepenek, 1986, pp.105-6;
Rozaliyev, 1978, p.293, Yerasimos, 1976, pp. 1389-90).
i
Although protectionism responded to the demands of thei
iindustrial bourgeoisie, this result can not be interpreted as1
1
1
*
an outcome of a deliberate plan devised by the DP government,
(Giilalp, 1983, p.48). It was rather a consequence of the dp!
project's failure to generate an adequate sum of foreign!
[currency. During the 1950s, as stressed earlier, the state
i
did not construct and execute a strategy that promoted the
| interests of the industrial bourgeoisie directly and
i
! systematically. When the shortcomings of the project started
| I
|to hurt this class significantly by mid 1950s, theirj
! discontent became more visible. Behind this discontent there
i
jwere several factors. |
First, the preferential treatment of the agricultural!
sector and SEEs were diverting more resources and credits to!
; i
[these sectors while industrial capital was facing a shortage!
jof funds. The absence of a planned legal framework to support;
! industrial capital by means of subsidies exacerbated this;
I t
i
allocation problem (Kepenek, 1986, p.113; Savran, 1987, pp.!
! 1 3 7 - 3 8 ) . Moreover, the Law on National Protection passed inj
1 9 5 6 enabled the government to impose strict price and profitj
controls as well as credit restrictions (Ahmad, 1 9 7 7 , p . 5 5 ; j
Hershlag, 1968, pp. 145-46). Finally, the impact of ongoing
I
inflation and a foreign currency shortage increased the;
;intensity of the complaints and demands of this class and
»
foreign economic institutions as documented in the assemblies
and reports of TOB (Turkish Union of Chambers of Commerce and1
jIndustrialists) and in the articles written in the issues of
I
j 198
i
jForum magazine in the late 1950s (Kazgan, 1985, pp.309-12;
jKeyder, 1987, pp. 134-35; Keyder, 1988, p. 421; Tiizun, 1977,
!p. 17, 23). In sum, although one can not claim that, the DP
i
|had followed policies deliberately against the interests of
;the industrial bourgeoisie and despite some efforts like
iIndustrial Development Bank, the DP government's focal point
^was not this class during their reign (Hershlag, 1968, p.!
I I
176; Savran, 1987, p.137). !
i
The discontent of the industrial bourgeoisie wasj
{reflected partially under the flag of the Freedom Party, an!
j i
offspring of the split inside the DP in 1955 (See, Erogul,!
! I
j1970). Despite its short life— the party disbanded after 1957;
elections and merged with the RPP— the Freedom Party was;
: I
iquite influential in revealing the increasingly evidentj
[dissatisfaction of the urban coalition against the dp!
government (Keyder, 1979, p.23; Keyder, 1987, p. 142; Savran,|
1987, p.138). !
I
j In the 1957 elections, the DP lost some ground by
falling below 50% of total votes for the first time (Erogul,
'1970, p.144). Against growing internal and external!
; I
[pressures, the DP government announced a stabilizatioh
i
program on August, 1958 (See, Ekzen, 1984; Krueger, 1974).
This plan was designed by the IMF and OEEC and would serve as
i
a rescue operation for the inflation and balance of payments
I I
problems. The program had several components; a major1
i 199
I
i
jdevaluation which depreciated TL against US $ from 2.8 to 9
1
TL, unification of multiple exchange rates, consolidation and
rescheduling of external debt, new massive credits from
international lenders, imposition of credit ceilings upon
Central Bank and Commercial banks, liberalization of the
import regime, removal of price controls and increasing SEE!
i ;
prices (Krueger, 1974, pp.71-88; Singer, 1977, pp. 406-13).|
I |
Both the chaotic state of the economy and the pressures
'coming from internal forces were behind the DP's decision for
the 1958 measures. For example, a report of the TOB had shown
some of these components as demands by the early 1958 (Tiizun,
1977, p.17). However, a more compelling factor leading to the
I ;
’1958 measures was the role of foreign lenders. By 1958, the'
i |
DP was well aware that, unless a radical rescue operation was;
I
made public, no more foreign aid and credits would be|
I
[available (Krueger, 1974, pp. 70-1). Starting from the midi
!
1950s, US agencies and the OECD had been contmuouslyj
i
complaining about inflationary finance and annual demands for
! t
i [
aid (Keyder, 1987, p.134). Actually these expectations ofj
I
additional aid proved to be correct. A $422 m. debt was
I
! consolidated and rescheduled. In addition, a total of $359 m.
credit was received from OEEC countries and the IMF (Erogul,
1970, p.158; Hershlag, 1968, p.184; Krueger, 1974, pp.76-7). ;
j The 1958 stabilization program generated some positivej
results for the economy in general. The number one target,
; 200 j
inflation was under control by early 1959 and prices rose byj
I
jonly 5%— mainly because of increased SEE prices— between 1959 i
Jand 1960 (Krueger, 1974, p.95; Singer, 1977, p.334). Moreover:
Jthe inflow of foreign aid and credits led to higher imports,|
which increased from $315 m. to $468 m. between 1958 and 1960
j(Singer, 1977, p.392). Since the import quotas were heavily
i
weighted towards producer1s intermediate goods and raw
materials (Krueger, 1974, p.80), machinery and equipment
investment increased substantially between 1958 and 1960—
(
(from 27% to 35% of total investments (Krueger, 1974, p.111).
jPrivate capital formation also rose from 184 m. TL to 285 m.;
i
|TL in 1959 (Singer, 1977, p.288).
On the other hand, when we observe DP's domestic!
i
[policies, we do not see an encouraging picture. Public
i
I
^expenditures continued to increase and the budget wasj
'expansionary. Expenditures rose from 6,433 m. TL to 10,190 m.
TL between 1958 and 1960 and its share in GNP increased from
t
j 18.4% to 21.8% (Singer, p.326, table 1). Monetary policy was
extremely tight initially and the money supply contracted!
between August 1958 and mid 1959 (Krueger, 1974, pp. 91-2).
‘ We also witness a slowdown of Central Bank and commercial
j |
Jbank credits due to the imposed ceilings on bank credits.;
While Central Bank credits rose by 6.4% commercial bank
credits increased by 8.9% between 1958 and 1959. These
I 201
I
I
figures were 16% and 11.3% during the previous year (DIE,
1959, p.431).
However, monetary expansion resumed by mid 195 9 and an
inflationary budget was prepared for 1960. The recession
Jcaused by the tight monetary policy between 1958-1959, which
had reduced the real rate of growth of GNP from 6.4% to 3.9%
i (Singer, 1977, p.242, table 20), proved the contractionary
I i
t
[policies to be politically and economically destabilizing!
J(Erogul, 1970, p.182; Krueger, 1974, p.93). During thisj
1
[recession, credits to the agriculture sector slowed down
substantially. For example, commercial bank credits increased
I
by only 10% from 1957 to 1959 (DIE, 1959, p.431), and in 1959
i
i
credits for agriculture intervention dropped by 88 m. TL[
|(Singer, 1977, p.350). The growth rate in this sector also
dropped, from 9.2% in 1958 to 0.3% in 1959 (Singer, 1977,
I
jp.195).
The DP government which had agreed on the IMF measures
out of desperation was on the verge of resuming its formerj
! policies to retain its popularity in the countryside once thej
1 j
|flow of foreign aid was restored (Schick and Tonak, 1988,|
p.421). An inflationary mechanism caused by deficit financing!
i
was on the move once again. In 1960, because of many projects;
Iwhich are not backed by secured financing, the budget deficit
: would have reached 3 billions TL. The Central Bank borrowing
! 202
t
had reached 348 m. TL level by May 1960 (Sonmez, 1967, pp.35-
6) . j
1 I
j Hence, just before a military coup brought down the DP
I
jgovernment on May 27, 1960, the DP project was back to its
irrational path. Despite strong pressures coming from outside
jand inside the country, the DP never attempted to switch to
j
ja new strategy where industrial capital would be the leading
i
jcapital fraction. The DP also did not take the idea of
planned development seriously. It had always identified the:
principle of planning with Communism (Erogul, 1970, p.102;'
|Hale, 1980, p.88) and opposed it vehemently. This phobiaj
jagainst planning led to a set of uncoordinated programs and:
i j
[policies and economic chaos. Starting from 1957, OEEC and
|
World Bank experts urged Mr. Menderes to form a planning
board. 1958 stabilization program actually included the,
[establishment of a Minister of Co-Ordination Board (Giilalp,!
1 I
i
jl983, p.50; Sonmez, 1967, p.32). This uncoordinated nature of
jthe DP project was so evident that international
^organizations, in one of the first instances, forced aj
: I
igovernment in Third World to adopt more planning (Keyder,;
1987, p.135).
| The transition to a new development strategy took place
i
after the 1960 coup. Several factors contributed to this
jmilitary takeover which are not elaborated here. On the one
lhand, the economic bankruptcy of the DP project and
!
j 203
insistence of the Menderes government on pursuing it made the
urban coalition of industrial bourgeoisie-intelligencia-
jworking class more and more resentful. On the other hand,
lincreasing discontent of this bloc against the government
made the DP more militant and repressive in the political
i
jarena. This authoritarian tendency and repression of all
ibasic political rights of the opposition opened the way for
i . i
ja military coup (Erogul, 1970; Keyder, 1987, pp.142-43).I
I i
'After 1960, given the failure of the accumulation project of'
i i
;1950s and the existence of an alternative hegemonic project
!
under the leadership of industrial capital, we observe a
!
[transition to this new development strategy (See, Beige,
1976; Savran 1988) which is discussed in the next two
chapters.
i
204
CHAPTER VII
STATE - LABOR RELATIONS BETWEEN 1950 AND 1980
Turkey underwent a significant transformation in social
and economic relations during the 1960s and 1970s. One
dimension of this evolution— industrial relations is studied
in this chapter within the context of the accumulation
Iproject pursued by the state between 1960 and 1980. The
!
(position of labor is situated in the development project and
jthe questions why and how the state intervened in industrial!
relations are examined. I
j
If we return briefly to the theoretical framework of!
chapter III regarding state-labor relations, it is possiblej
to link them to capitalist property relations. As formulated
i i
f
jin chapter III, in a social formation where the capitalist
(mode of production is dominant, direct producers are
separated from their means of production and sell their labor
power in the market. Survival of individual capitalists
[depends on the valorization process in production where
[surplus revenue is created. Within the competitive^
' j
|environment, each capitalist strives to maximize his profit
!by increasing labor productivity. The capital accumulation
J I
I
* — “ I
205 j
i
process, where surplus is created and reinvested, is the
Jengine of economic development; the state has an enormous
stake in this process, as elaborated before.
j In this context, it is possible to study the state-labor
relation at two related levels, which constitute the core of
i 9
jthis chapter. First, since labor is the crucial agent in
production and reproduction of the social system, the state
I
'may intervene— directly or indirectly— into the capital-labor:
I
relation. Second, depending on labor's response to the;
j
[current accumulation project, the state may use its coercive
i
i
Ipower to prevent any interruption of this project.
The scale of the state1 s intervention at the first level
depends mainly on the success of the development strategyj
|
(followed. With reasonable growth rates and a class compromise1
between capital and the state, the state is usually "soft";
i :
viz-a-viz labor. Wages and surplus revenue are at relatively
satisfactory levels for both labor and capital. Aside from
its routine support the state is reluctant to intervene in
Jthe capital-labor relation. |
1 i
' However, if there is a severe economic crisis— which may!
I
;occur due either to the shortcomings of the development
project or to external factors— , class compromise is likely
to deteriorate rapidly. Workers' demands for higher wages arei
I
no longer acceptable for capital which faces declining!
I i
profits. When there is such a profit squeeze, the state is|
206
very likely in the position to intervene directly into the
i
I
capxtal-labor relation to sustain the surplus revenue volume
generated by the project.
j At this point, it is possible to move to the second
i
i
ilevel of analysis. Although, the state uses its coercive
i
power against labor to perpetuate the reproduction of surplus
[ |
(luring a deep economic crisis, even under non-crisis|
! i
conditions the absence of a class compromise may necessitate:
1 !
state intervention. If the working class mobilizes and poses j
i I
a substantial threat to capital-in-general by questioning!
! i
either the existing accumulation project or property!
! j
'relations state intervention may increase. The form or modej
of this intervention depends on the degree of the threat. I
i !
I
! , ;
Since the organizers of private production are no longer m|
jexclusive charge of the means of coercion under capitalism,
i
the state uses its capacity and power to intervene in all
1
■levels of social life, including industrial relations, when
(the stability of the system is threatened (See, Halloway and
Picciatto, 1978).
Summing up, there are three major elements behind the
state's intervention in industrial relations. First,I
i ’
j I
capitalist property relations should be dominant so that
capital-labor relations are central to the accumulation
project. Second, there should exist concrete conditions that
!
jinduce state intervention, such as economic crisis or!
I |
i
L - . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ _ _ _ i
I ---------------------------------- — 1
207
working class mobilization. Finally, the state should have
the capacity and power to intervene in order to maintain the
capital accumulation process.
! It is beyond the scope of this study to discuss in
I
detail the capitalist transformation in Turkey from the 1960s
onward. During the 1960s and 1970s, we observe a growing
industrial sector where wage labor is employed and ai
shrinking agriculture sector where petty producers and family
farmers are still dominant. The industrial sector in general,I
and the manufacturing sector in particular, have become
increasingly the most dynamic sector in the economy.
i I
Moreover, being the dominant fraction of capital in the
]
accumulation project implemented, its surplus creation and,
reproduction capacity has become crucial for the state. ,
| In the agricultural sector, economic activity is j
dominated by self-employed and family business farms. Wage
I
labor constitutes a minor percentage of the total work force.!
!
Although these production units produce a surplus product,j
the capital-labor relation is not central. If we define the
extent of capitalist relations of production by the
percentage of wage labor in the total work force, in the
agricultural sector, this number dropped from 6.7% to 5.3%
!
between 1960 and 1980. In the industrial sector, this ratio
[increased from 64% to 77% during this period (DIE, 1960; DIE,
! !
[1986, p.71).
208
If we compare the shares of agricultural and industrial
sectors in the GNP, we observe that while agriculture's share i
!
diminished from 37.6% to 21.7%, industry's share soared from
17% to 26% between 1960 and 1980 (Giilalp, 1983, pp.144-45).
Similarly, while the ratio of value added to GDP dropped from
27.5% to 19% in agriculture, it increased from 20.1% to 31.9%
i,
in industry between 1973 and 1984 (Celasun, 1986, p.198; DPT,
1987, p.3). |
l
j The surplus creation capacity of agriculture already had
been proven to be limited during the mid 1950s. Historically,
I
family farmers have not been able to produce adequate sums of
surplus necessary for the development process. Even in 1980,
f.he proportion of self-employed and family farmers in total
agricultural labor force was 95% (DIE, 1986, p.71). During
!
the 1970s this limitation became more evident. In 1978, each
1 I
household in agriculture was producing merely 80,000 TL worth1
of value added (Celasun, 1986, pp.209, 215). In industry each;
I
worker's value added production was equal to 294,000 TL in
'1978 (DIE, 1983, pp.262-63).
This evident trend of industry's increasing share in GNP
jand surplus creation capacity relative to agriculture
i
[justifies our emphasis on state-labor relations in industry.
I
Next, state-labor relations before and after 1963 are,
! i
analysed separately since 1963 is the year when extensive
llabor rights were granted by the government.
209
j
State — Labor relations before 1963:
i
i
i
*
State-labor relations during the 1950s was in a way a
continuation of the developments that took place after World I
i . j
War II as discussed m the previous chapter. The mam J
j \
difference was that the RPP, the governing party of the 1946- |
j i
■1950 period, changed its attitude towards labor as the j
i i
opposition party while the DP turned out to become oppressive j
after becoming the government.
■ Between 1947 and 1950, both RPP and DP attempted to
control labor unions through their own confederations (See,
Guzel, 1985; Isikli, 1972, pp. 298-301; Kog, 1986a, pp.26-
32). When the DP was in opposition, it had repeatedly)
I
promised to grant the right to strike. However, after
l
becoming the ruling party, with the exception of the first\
party program, the DP never mentioned again the right to!
strike (Isikli, 1972, pp.301-2).
I Similar to the 1947 trade unions law, which was passed
|
by RPP under the new international democratic climate, the DP I
l '
approved 98th ILO agreement in 1951 as a good intention fort
| I
-Turkey's future relations with the West. This act would give:
j I
workers the right to collective bargaining (Kog, 1987, pp.67-1
I
'8). However, like the right to strike, the right to!
I /
collective bargaining could not be used by workers during the j
210 !
I
I
1950s. Although collective agreements were permissible, they;
were not obligatory, but up to the good will of employers. |
I 1
Moreover, since there was no right to strike, collective j
i ,
I . . . . ^
agreements' provisions did not prove to be effective (Dereli,|
1 i
1968, p.84). Settlement of individual disputes in almost all!
I
cases were appealed to the Central Arbitration Board.
Furthermore, lacking a government authority to extend an
I
arbitration award to other work places operating under
similar conditions made collective bargaining additionally
i
unworkable (Dereli, 1968, pp.82-5).
j Under such a legal framework, local unions and
federations were unable to perform their traditional!
j
activities. Consequently they shifted their activities to!
| . I
other areas, such as exerting influence through politicalj
parties. However, the 1947 Trade Unions Act clearly banned}
any involvement of unions in politics (Dereli, 1968, p.77).
i
I ,
The article banning political involvement was repeatedly used
i
by the government to suppress union activities (Isikli, 1972,
! i
pp. 302-3). While eager to depoliticize unions, the DP also
j
tried hard to bring them to its own political line.
One way of reaching this target was to make unions
financially dependent on the state. Membership dues were
I
I „ I
restricted by the government. For example TURK-IS's (Turkish:
! I
jConfederation of Labor Unions) membership dues1 total was j
'less than its penalty payments. Consequently, TURK-IS became
j 211
jiependent on the state's willingness to give grants which
were adjusted according to the union's attitude towards the I
i . !
government (Isiklx, 1972, pp.304-5). The DP government:
further passed an Act in 1956 which placed the funds and
i
accounts of unions under strict government control (Dereli,
1968, p.100).
I
' Following the DP's electoral victory in 1950, unions
enjoyed a brief period of freedom until 1953. During these 3.
years, the number of unions increased from 88 to 275 and!
union members doubled. Moreover, local unions formed!
!
|"birliks" which were organized regionally across different
labor activities and were more involved in politics. Their
numbers also increased from 3 to 17 (Dereli, 19 68, p.94).
This period also witnessed the establishment of TURK-IS, thej
| I
first trade union confederation, in 1952 (See Kog, 1986a,
pp.39-43).
I
During the 1950s TURK-IS was far below the power it
j
later gained in the 1960s and 1970s. Initial quarrels with!
the DP government and early outspoken and partisan leadership
isolated TURK-IS. The government also followed a strategy of
^denying any credit to TURK-IS for improvements in workers'
j
material conditions. Given the effective labor code and;
I
jgovernment repression, TURK-IS lost substantial ground and
I
!its membership declined from 155,000 to 104,000 between 1953
!
'and 1957 (Bianchi, 1984, p.215). The repression of DPj
I i
2 1 2
government accelerated as economic conditions deteriorated.
i
i
An Act passed in 1956 restricted the freedom to establish
trade unions without prior permission of public authorities
I
|(Dereli, 1968, p.100). In 1957 government suspended
activities of several "birliks1 1 which were in opposition
I
j(Kog, 1986a, p.47), while tolerating the operations of those
which supported DP (Dereli, 1968, p. 101). Only those unions
i
which did not seek to be activist politically or militant ^
economically survived (Singer, 1977, p.431).
!
j During the late 1950s, under the pressure of government,
TtiRK-IS changed its leadership and chose a new general
i I
secretary who was very close to the DP (Kog, 1986, pp.51-5;:
: I
Slilker, 1976, p.68). However this increasing dependence onj
' . i
government and its appearance as a shadow union organization ;
of the state isolated TURK-IS further from the working people j
i '
as well as from newly mobilized students and intellectuals I
(Isikli, 1972, p.306).
These relations between the state and labor dramatically
changed after the military coup which toppled the DP
jgovernment on May 27th, 1960. As will be developed later, the
role of labor in the new hegemonic accumulation project under
jthe leadership of industrial capital was completely
(different. Between 1960 and 1963 a new legal framework which'
!
reorganized the state-labor relations was established.
213
' In order to understand this transitionary period of 3
'years and the evolution of industrial relations within the
context of the new accumulation strategy, a brief discussion
on the nature of the 1960 coup is necessary.
! As elaborated in the previous chapter, during the late
I :
! 1950s the DP's project became extremely irrational. However,
DP insisted on following the same strategy based on its
political support coming from the countryside. An alternative
accumulation project promoted by the industrial bourgeoisie
jand international organizations was supported by the doctrinej
■of the RPP and the Freedom Party— which merged with the RPP
in 1958— which was becoming increasingly liberal and pro
industrial bourgeoisie (Ahmad, 1977, pp.116-18). However,
unlike the 1950 transformation, the opposition party did not
i ;
have enough votes to become the next government through
elections. In the 1957 elections, the DP received 47.7% of
the general vote and easily controlled the parliament
(Erogul, 1970, p.144). The first elections held after the,
icoup showed the strong electoral support for the DP. While;
the RPP received 36.7% of the votes, other new parties,
notably the Justice Party (JP) which inherited the DP's
I
electoral base, got a total of 52.5% of the general vote;
I
j(Ahmad, 1977, p.172).
J Although it is not possible to discuss the reasons and
i
jfactors behind the 1960 coup, it may be safely claimed that
I
’
J
; 214
J
this military takeover provided the industrial bourgeoisie'
with the opportunity to become the leader of the new
development strategy and the dominant fraction of capital.
The coup also led to the political subordination of the rural
i
majority by the urban coalition (Beige, 1976; Savran, 1987,'
[
pp.138-40). In other words, through this military coup, the
new accumulation project, which focused on a planned and
protectionist program and gave preferential treatment to
industrial capital could be established. While this model was
more than welcomed by the industrial bourgeoisie, for
traditional sectors and the rural population it was rather
like a revival of the etatist project (Keyder, 1979, p.25).
Nevertheless, the 1960 coup did not yield political
power for the RPP. After an interim military government, four
coalition governments ruled Turkey between 1961 and 1965 with
the RPP a coalition partner (See, Ahmad, 1977, chapter 8;
Dodd, 1969, part.II). In 1965 the JP won the election with a
52.9% of the vote (Ahmad, 1977, p. 191). The JP won this,
margin by integrating a rational accumulation project which
had already been in effect with the political support of the
i
rural population— a must for an electoral victory in the
early 1960s.
i
In the early 1960s, when no political party controlled
the parliament, the delicate balance of power in politics
created a relatively autonomous environment and led to a new
legal framework for industrial relations which remained
effective until the 1980 military coup. The 1961
constitution, prepared by university professors (See, Dodd,
1969, ch8) recognized the constitutional right to work, the;
freedom to associate, collective bargaining and the right to
strike, and put a new emphasis on social security in its
articles 46 and 47 (Shabon and Zeytinoglu, 1985, pp.136-37).
Then in 1963, the Trade Unions Act (#247) and the Collective
Agreements, Strikes and Lockouts Act (#275) were passed. They
replaced the trade unions Act of 1947 and regulated all
aspects of industrial relations (See Dereli, 1968, pp.118-
37) .
By these codes, unions are organized on an industry,
basis and the union that represents the majority of workers
in a given industry are authorized to make collective
agreements. Regional Directorates of Labor or the Ministry of
Labor are authorized to settle labor disputes. Strikes or
lockouts are permitted if compulsory conciliation fails in
industries where strikes are permitted. However, the
government holds the power to postpone a strike or a lockout
up to three months. Both private and public sector workers
are eligible to become union members. Unions can be
established or can affiliate with an international
organization without prior approval of government (See,'
Dereli, 1968, pp.118-37). While direct engagement in
: 216 |
political activities and organic relations with political
parties are prohibited, trade unions are permitted to support
political parties in general elections (Dereli, 1968, pp.132-
33).
This new legal framework of the industrial relations
system restructured the capital-labor and state-labor
relations for the next two decades which are discussed below.
Before moving to these issues, I study below the questions
why and how these new labor rights were recognized in the
early 1960s, briefly.
Two main factors contributed to this major restructuring
of industrial relations. First, beginning in the mid 1950s,
the RPP had started to attract the working class as its
political ally. Both 1954 and 1957 election communiques
promised to grant the right to strike to workers and civil
servants (Kog, 1986b, p.119; Savran, 1986, p.93). In 1959,
the RPP submitted a proposal for an employee and employer
associations Act (Giizel, 1985, pp.80-81). Similarly, the 1957
election communique and the "proclamation of primary aims" ' •
prepared in 1959 promised a new constitution that would bring
I
social justice and the rule of law as well as including
former promises regarding industrial relations (Ahmad, 1977,
l
pll7; Kog, 1986b, p.120). After the military coup, when the
urban coalition took the upper hand, even in the absence of
a electoral majority, the RPP through its position in the
government led to the formation of a progressive constitution
and industrial relations Acts.
A second major factor behind these developments was the
accumulation project itself. As explained in detail in the!
next chapter, this development strategy required a new I
: I
structure in the capital-labor relations. Since the capital!
accumulation process in the industrial sector has become the
engine of the economy, harmonious relations between capital
and labor were essential to boost productivity and growth.
This in turn necessitates a well- established legal framework
that regulates capital-labor relations and promises a fair!
return to labor's contribution through extensive rights. The
existing system was inherited from the totalitarian one-
party era when the existence of classes was oficially denied,
and compulsory arbitration was the rule welcomed by employers
(Dereli, 1968, p.88).
! This point was well documented in the First Development
Plan prepared by DPT (State Planning Organization). In the!
plan, it is stated that workers should enjoy the same'
economic and social rights as other social classes (my
emphasis) in order to attain development and democracy.
\
1 I
Workers' organizations should be strengthened. The necessaryj
i
condition for harmonious cooperation between capital and'
labor requires the rights of collective bargaining, strike:
218,
i >
| j
and lockout as well as the abolition of outdated regulation
and agreements (DPT, 1964, pp.97-98).
The role of the working class during recognitions of
|
fthese rights is subject to a debate(See Guzel, 1988; Isikli,.
1987; Isikli, 1988). Nonetheless, TURK-IS, the biggest trade■
!
union in 1950s, did not play any significant role in this:
transformation. Given the above mentioned ties of its
leadership to DP government and its main concern with wage
levels rather than the global picture, TURK-IS could not be
expected to support or organize for such a radical change.
1
i(Isikli, 1981, pp.351-52). The historical underdevelopment of
the working class in Turkey strengthens the thesis that
rights to collective bargaining and strike emerged as
entitlements handed out to workers in accordance with thej
requirements of the new accumulation project and under the
* . . .
political environment discussed above (Isikli, 198 7, pp.66-|
170; Keyder, 1987, pp.148-49). The absence of a strong working
class movement before 1960 is the main reason for this end
result. Although between 1961 and 1963 workers organizedj
iseveral meetings to speed up and influence the preparation of,
the new Acts (See, Qegen, 1973, pp.53-57; Fisek, 1969, p.97;
Rozaliyev, 1978), these constitutional rights and new labor|
■ codes were formed and shaped under the leadership of the:
^intelligentsia and RPP cadres. Mr. Ecevit, the Minister of
Labor at the time, clearly explained this point during his1
219 ;
speech upon presenting these laws to the parliament. He
i •
stated that these rights were granted to Turkish workers
unlike other nations where they were acquired after long
struggles (Isikli, 1981, pp.353-54). Moreover, international
institutions, specifically pressures put by the ILO
contributed to the acquisition of new labor rights (Dereli,!
1968, p.117; Isikli, 1987, pp.67-69).
State — Labor Relations after 1963:
j
A brief characterization of the working class prior to
;1963, as revealed in the previous section, concludes that
1
>
several factors, such as the historical underdevelopment of
labor, a legal framework which prevented a strong union
movement and leadership, and the development strategy pursued
by the DP government that did not give a central role to the
i
’ capital-labor relation (i.e. to labor in the surplus
I
production process) all blocked the generation of conditions I
necessary for an effective working class role during the i
i
transition to post-1960 era. Similarly, acquisition of the
extensive rights in 1963 were given to the working class
!
mainly due to the factors not fueled by this class. Thesei
rights became effective at a time when only 10% of the total
|
labor force was in the industrial sector (Isikli, 1987,
p. 14). Hence, these rights were legalized in Turkey at a
relatively backward stage of industrialization and long J
j I
before the working class attained the qualitative and1
i
quantitative characteristics which would be expected to lead
to the acquisition of these rights, such as happened in,
Europe.
J With the new accumulation project and a legal framework,
'for industrial relations following 1963, the role of working
i
class in the development strategy and its relations to state
radically changed. The rationality of this new model
basically depended on a class compromise between industrial
capital and organized labor. As long as this class compromise,
did not collapse and the surplus reproduction process
continued without a severe crisis, the state did not have a
reason to intervene extensively in industrial relations.
This model was built on a classical import-substitution
strategy supported with a planning organization as discussed
I 1
, i
in the next chapter. Here I discuss this model focusing on
I
the position of labor. As mentioned on chapter III based on
Przeworski’s work, class compromise is possible only on thej
pondition that workers have a reasonable certainty that
; _ I
future wages will increase as a function of current profits.
i
i
‘ In other wordsr workers agree to a private property systemi
i |
where profits are appropriated by the capitalist class in;
exchange for the prospect of improving their material well-
i
being in the future (Przeworski, 1986, p.171). I intend to
221'
I
show below how this class compromise between industrial
capital and organized labor worked during the 1960s and 1970s
and the role of state in this context.
The promise of the new accumulation project was toj
provide a protected and state-supported environment to
industrial capital for enjoying high profit rates. As
elaborated in the next chapter, several characteristics of
this model such as, protection rent, unregulated market
prices, overvalued exchange rates, low SEE output prices, low
interest rates, extensive state credits and subsidies
contributed to these high profits. In turn, industrial
capital would perform its expected duty: to reinvest profits
and distribute a reasonable portion of the surplus toj
organized labor. Industrial labor, earning high levels of
(
wages, was anticipated to yield higher productivity rates and
!
workers1 demands were expected to be confined to the level of
wages. Moreover, under an import-substitution strategy,
higher wages usually work as a demand-stimulating element byj
extending the internal market. Hence, high profit rates would
give industrial capital enough space to maneuver in improving
the material conditions of organized labor while workers
would not question the labor process or increase their
militancy level to challenge the political power and existing
property relations (See Boratav, 1983; Keyder, 1987, p.166).
2 2 2
Within this structure, there are two conditions that can
produce problems to the rationality of the project and.
necessitate state action. First, if the profitability of
industrial capital is hampered by internal or external
factors long enough to prevent capital from maintaining high
wages to labor and if labor then insists on keeping its usual
share, then state intervention is very likely. Second,
independent of crisis, labor may organize , become militant,!
and question property relations. Once again, the state may
step in to discipline the labor force. I focus below on the
relevance of these two phenomena for Turkey between 1963 and
1980.
After 1960, the established development strategy and the
political regime conformed well with the interests of working
class (Keyder, 1987, p.144). Overall, as explained below,
real wages increased between 1963 and 1976, with the
exception of 3 years following the 1971 coup. During these
years, class compromise worked and workers' militancy against^
capital remained at low levels. After 1976, however, a
different picture arose with the deepening of economic
crisis. First, in the following passages, I intend to studyj
the developments of relevant variables which are helpful in
understanding the role of labor in the accumulation project.
All real wage series show a significant rate of increase
between 1963 and 1977 with the exception of the 1971-1974
223
period that followed the 1971 military takeover (See,
Boratav, 1983, pp.9, 17). In our study, to be consistent with
other variables like value added, output and employment, I
use the series of annual manufacturing industry surveys.
Although wage indices given by Social Security Institution
also reveals a similar trend until 1977, after this year high
inflation rates made these series biased since wages above a
ceiling are considered to be equal to this ceiling level(Kog,
1982, p.246). In general, DIE (State Statistics Institution)!
series are accepted as more reliable (Boratav, 1983, p.10).
Nominal wages are converted to real wages using a wholesale
price index which covers Turkey as a whole, (unlike the
consumer price index) and also reflects real wages as cost
items.
In private and public manufacturing industries real wage
indices (1963=100) increased to 179 and 157 respectively in
1971. After the 1971 military coup, real wage indices dropped
to 153 and 149 by 1974 in these sectors. Then, we again)
observe the trend rising. While the real wage index soared to
233 in the private sector by 1977, it rose to 226 in the
state sector. In the private sector,real wages then declined
to 230, 219 and 181 between 1978 and 1980. In state
enterprises, real wages continued to increase to 236 by 1978
but then dropped to 219 and 204 during 1979 and 1980 (See for
wages, DIE, 1973, pp.240-41; DIE 1977, pp.207-13; DIE,1983,
224
pp.262-63 and for price deflators, DIE, 1964/1965, p.498;
DIE, 1973, p.461; DIE, 1977, p.387; DIE, 1983, p.388).
Summing up the wage movements, we observe a similar
trend in both sectors. In the private sector, wages increased
by 80% until 1971, declined by 15% between 1971 and 1974,
increased by 52 % until 1977 and finally dropped by 21%
between 1977 and 1980. In the state sector, real wages soared
by 57% until 1971, diminished by 7.5% between 1971 and 1973,
increased by 63% until 1978 and deteriorated by 13.5% during)
1979 and 1980.
During the 1960s and 1970s, real value added, value of
output and productivity of labor all show a steady increase
in both sectors. Real value added— which is deflated using
an industrial price index— in the private sector increased
from 100 to 632 between 1963 and 1978. Then it dropped to 519j
and 485 in 1979 and 1980. In the state sector, real valuej
added rose from 100 to 379 between 1963 and 1975. It declined'
to 362 by 1977 and to 241 and 218 during 1979 and 1980. Real
GNP created by the manufacturing industry increased from 100
to 390 until 1976, then gradually rose to 406 by 1978 and
dropped to 387 and 369 during 1979 and 1980. Productivity of
labor in the private sector rose to 231 until 1977 and then
declined to 190 and 168 in 1979 and 1980. In the public!
sector, productivity of labor increased to 235 until 1971,
declined to 197 by 1973, rose to 215 by 1975 and then
225
deteriorated to 177 by 1977 and 106 by 1980 (See the same
references given on pages 19 and 20 for value added and pricef
figures; See for GNP figures, DIE, 1964/1965, p.424; DIE,
1973, p.435; DIE, 1977, p.363; DIE, 1983, p.431).
Finally, as a direct result of these developments of
real wages and value added, we can study the share of labor-
-wages— in value added. This share in the private sector
fluctuated within a narrow band between its lowest level
(30.2) in 1965 and 1974 and the highest level (34.8) in 1976.
Starting from 1976 it dropped to 33.1% in 1978 and 31.8 and
28.5 in 1979 and 1980. In the state sector, it dropped from
!
30.3% in 1963 to 18.8% in 1971, then it rose to 20.5% by!
i
1975, 27.6% by 1975, 40.5% in 1977 and 46.9% by 1980 (See thej
same references given on pages 19 and 20).
All these figures suggest that we can study the time
between 1963 and 1980 under two sub-periods with different
characteristics. The first one is until 1977 and the second
one is between 1977 and 1980. One should also note the!
. I
peculiarity of the 1971-1974 period, as mentioned earlier.j
During the growth years until 1977, real wages increased!
steadily at a rate greater than the growth in GNP/capita. Up
to 1977, real GNP/capita rose by 88% while real wages
increased by 233 and 226% in private and public sectors (See
for GNP figures, DIE, 1973, p.433; DIE, 1983, p.431). Ini
i
parallel, the share of wage and salary earners m GNP
226
increased from 21.5% in 1963 to 36.8% in 1977 (Ozmucur, 1986,
p.20). The only exception to this trend was the period of the
1971 coup, when real wages declined in all sectors while
GNP/capita continued to increase by 7.8%. If we compare the
1963-1977 period with the 1950s we also discover a >
significant difference. Between 1950-1962, real wages rose
annually at rates of 2.4% and 3.8% in the state and private
sectors which were substantially lower than the rates which
occurred during the next two decades, as noted earlier (See,
Ebiri et al., 1977, p.166).
One major reason behind soaring real wages during this
period is the impact of trade unions. With the new legal
structure that gave workers the right to strike, after 19 63,
workers had much greater power against capital for wage
increases. First, a study comparing larger companies, where'
the unionization rate is higher, with non-unionized small
firms shows that union wages are at least 30% higher than
comparable non-union wages in the private sector (Aksoy,
1980, pp.434-35). Second, a comparison of union and non-union
periods also reveals that unions have had a significant
effect on wage levels (Aksoy, 1980, pp.427-29). When we
contrast the 1955-1959 years with the 1963-1971 period, we
see that while in the non-union period real wages declined byj
3% (Boratav, 1987, p.95), during the union period real wages
increased by 80% (DIE, 1973, pp.240-41).
227
During the union period, however, we observe some
differences among different years. First, real wages rose at
a much higher rate during 1967-1971 relative to 1963-1967.
These rates were 25 and 43% the for private and 23 and 28%
for the public sector. This can be attributed to the lag
between the legislation of workers' rights and unions having
an influence on real wages. Another reason behind this
contrast is the formation of DISK (Revolutionary Workers'
Union Confederation) in 1967. On the one hand, growing
competition occurred between TURK-IS and DISK where the
ability to increase wages played a big role in recruiting new
members. On the other hand, the militancy of DISK contributed
to this outcome. This is particularly evident since wage
i
increases were higher m the private sector where DISK wasj
organized. j
Another exceptional period is the years following the
1971 military coup when workers1 rights were restricted by
martial law. After the coup on March 12, 1971, martial law
became effective in 11 cities that covered the major
industrial centers. Strikes were banned in these areas. Under
this anti-labor climate labor lost its leverage against
capital. In the private sector, between 1970 and 1972, the
number of strikes dropped from 111 to 14, and the total
number of collective bargainings declined from 725 to 174 at
Istanbul, Ankara and Izmir (Aker, 1975, pp.90-92; Kepenek,
228
1986, p.394). Consequently, the real wage index (1963=100)
decreased from 179 to 153 between 1971-1974 in the private
sector and from 157 to 145 between 1971 and 1973 in the state
I
sector (DIE, 1977, pp.207-13). Hence martial law is very
indicative of what could have happened to labor had it not
organized in unions (See, Aksoy, 1980). After the martial law
years workers regrouped and gained significant pay rises
until 1977.
Besides union power we may consider three other factors
that explain real wage increases until 1977. First, as is
well documented in development literature, for an import-
substitution strategy, the size of the internal market is
very crucial and the purchasing power of the working class
plays a prominent role in the development process.
Consequently, wages act not only as a cost element but also
as a component of final demand. Apparently, this causes a
problem for cost minimizing individual capitals. However,
higher real wages are compatible with the accumulation
i
strategy and requirements of capital-in-general. j
Second, under import-substitution, as elaborated in the|
next chapter, profit margins are in general guaranteed and
boosted by protection rent. Since industrial capital relies
basically on the monopoly profits earned in a protected
market, a soft wage policy is consistent with the system.
Industrial capital is after other privileges like overvalued
229
TL that guarantees low imported input prices, low SEE output
prices, low interest rates on credits, and so on. All these
add up to a profit margin high enough to release pressure
from wages (Boratav, 1983, p.11). In other words, that
section of the manufacturing capital which captures the rent
of import-substituting industrialization has been willing to
allow for high wages as long as their profit margins are
sustained through other privileges noted above (Keyder, 1987,
p.160).
I
Third, the exceptional status of the state sector^
contributed to higher wages. Public sector enterprises, as a
well-known fact, are quite different from private sector
firms in terms of their objectives, pricing and employment
policies, financing sources, and so on. Most notably, public
sector firms are not usually constrained by profitability
conditions. As a result of this fact, public companies do not
seem to consider profitability as a criterion in granting,
wage increases (Aksoy, 1980, p.426).
State firms do not have an incentive system where
managers act as profit maximizers. Moreover, controlled input
and output prices do not even allow us to measure
profitability in an unambiguous way (Kirkpatrick et al.,
i
1984, p.168). Finally, the losses of these enterprises are
covered by governments' budget transfers and these firms
never face the threat of bankruptcy. Consequently we do not
230
observe a strong link between wages and profitability.
Between 1963 and 1975, in the public sector wages are not
significaantly correlated with changes in value added per
worker, a proxy for ability to pay on the part of the firms
unlike the private sector where this relation is significant
(See, Aksoy, 1980).In the public sector, workers tend to
fully shift consumer prices plus an autonomous increase into
their wages (Aksoy, 1980, p.426). They are paid a minimal
wage irrespective of productivity and wages are magnified at
plants with higher productivity (Aksoy, 1980, p.432).
This absence of a relation between productivity and
wages became more evident in the late 1970s. Between 1975 and
1978 value added/worker (1963=100) declined from 215 to 147
in the public sector while it rose to 231 by 1977 and then
declined to 218 next year in the private sector. The real
wage index rose from 184 to 236 in the public sector and from
182 to 230 in the private sector (See references noted on
pages 19 and 20).
In the public sector, rather than pursuing an objective
of profitability and efficiency, firms, under strong
political pressure from government parties, follow unsound
employment and pricing policies. First, as in other less
developed countries, the public sector is a major source of
employment which leads to overmanning and higher wage
payments relative to the private sector with adverse effects
i
l
I
-------- I
231
on profitability and productivity (Kirkpatrick et al., 1984,j
i
p.185). Turkey is no exception to this general picture.
Moreover, between 1975 and 1980 in an over-politicized
environment under several coalition governments where
political stability was very shaky, employment policies of
SEEs became totally political.Coalition governments
continuously used public enterprises as means of
strengthening their political positions by distributing
salaries to their militants employed in state firms. Thej
public sector was not only a buffer against social unrest
triggered by severe unemployment problem, but also a
reservoir used to employ party members and militants. More
and more workers in the state sector were divided under
different political camps— basically left and right—
i
supporting different unions. Top management appointments were]
!
also completely political, and they were replaced every time
the government changed (Kog, 1981, pp.322-31; Uca, 1983,
pp.74-76). As a result of these political interferences,
higher wages, which are perceived by the political groups in
power as a vehicle to increase their popular support, were
granted, even as the economic crisis became increasingly
severe.
Finally, unions operating in the private sector
reflected the higher wages effective in the state sector
following a lag (Boratav, 1983, p.12; Ebiri et al., 1977,
232
p. 168). Summing up, we may conclude that higher wages
observed between 1963 and 1977 were the results of the new
accumulation project where import-substitution played a
prominent role, a new labor code which granted the right to
strike, growing union power and a big public sector.
However, in the last analysis, real wages were
constrained by the growth rate in the dynamic manufacturing
i
sector. The real growth rate index of manufacturing industry
(discounted by the industrial goods price index) shows that
manufacturing output increased by an average of 11% between
1963 and 1976. The index rose from 100 in 1963 to 198 by
1971, 217 by 1973 and 390 by 1976. Manufacturing output
continued to increase two more years but the growth rate
decreased to 2%. Finally, after reaching 406 in 1978, the
index declined to 387 and 369 during 1979 and 1980 (See
references given on pages 19 and 20).
Hence, during the boom years of the 1960s and early
1970s manufacturing industry enjoyed very high growth rates
not witnessed before. These high growth rates made possible
high wage levels in industry, as long as the capital
accumulation process worked well in generating surplus
revenues needed by private capital and the state, the wage-
profit conflict was not significant. Distribution of the
shares of the increasing pie to labor via higher wages was
also compatible with the accumulation project. This situation
233
created a class consensus between capital and labor and
curtailed labor strife considerably.
Moreover, by comparing real wage and value added/worker
series we may conclude that wage hikes did not threaten
profits. As discussed earlier, real wages never increased at
a rate greater than the labor productivity growth rate in the
private sector. Consequently, the wage/value added ratio
stayed quite stable during this period. It was 32.3% in 1963
and 34.8% in 1976 while fluctuating between a lowest level of
29.6% in 1966 and a highest level of 34.8% in 1976 (See
references given on pages 19 and 20).
Value added series that we use was estimated using aj
common price deflator for both input and output values.
However, during our study period, input prices usually rose
at a higher rate relative to output prices (Ebiri et al.,
1977, pp.8-14). Hence, when value added is calculated using
an output price deflator, it is underestimated. In order to
avoid this underestimation, separate price deflators should
be used. It is shown that, the application of this technique
produces much higher value added figures. When we deflate
value added with industrial output prices (1965=100) value
added increases from 4918 m. TL to 15086 m. TL in the private
sector and from 6610 m. TL to 12 7 66 m. TL in the public
sector, between 1965 and 1975 (See, DIE, 1973, p.461; DIE,
1977, p.387; Ebiri et al., 1977, pp.251-52). When separate
234
price deflators are used corresponding value added figures in
1975 are 23,848 m. TL -58% higher- for the private sector and
16538 m. TL -30% higher- for the public sector (Ebiri et al.,
1977, pp.36-37). When these value added series are used for
value added/worker figures, we find out that, between 1965
and 1975, while real wages increased by 76% and 74% in public
and private sectors, value added/worker rose by 173 and 239%,
respectively. As a result, only 43% of value added increase
in the private and 32% in the public sector was appropriated
by workers (Ebiri et al., 1977, pp.165-66). In other words,
real wages lagged productivity increases considerably in both;
sectors.
Since, reliable data sources are not available to extend
the use of separate price deflators to the period between
1976 and 1980, I continue to use the data series explained!
earlier. However, the above mentioned study prepared by thJ
DPT shows clearly that, between 1965 and 1975, real wages did
not threaten profits. In fact, high productivity growth rates
made it possible for unions ,and the working class to enjoy
higher real wages.
These findings are also valid for the period before the
1971 military coup. We do not observe any decrease neither in
industrial output nor in value added/worker levels between
1969 and 1971. Manufacturing output rose by 13.7% (DIE, 1973,
p. 433) and value added/worker soared by 35% and 26% in'
235
private and public sectors (Ebiri et al., 1977, pp.98-99)
while real wages rose by 11.6% and 18.5% in these sectors
i
(Ebiri et al., 1977, pp.162-63). Hence, it is not possible to
justify the anti-labor reaction of the state during the
ruling of interim governments until late 1973 on the grounds
of an economic crisis which threatened profits. It was rather
because of the political struggle elevated by DISK that the
state reacted to labor in that manner, as elaborated in the
next section.
Despite these figures that show a significant gap
between the productivity of labor and real wages, in 1976,1
i
TISK (Turkish Confederation of Employer Association), the
main organization of employers, published that, in that year
wages increased by 22.7% while productivity rose by 5.1%.
Then basing on these unfounded figures TISK concluded that
the employer-employee balance has shifted in favor of the
latter (TISK, 1976, pp.29-33). The unscientific approach of
TISK has been always evident in its efforts to show unions
with unlimited demands (TISK, 1976, p.26) and asking for the
state's help against these union demands with the support of
these false figures. TISK compares a productivity proxy of
real GNP/capita with a wage index that is assumed to be taken
from SSK (Social Security Organization) but actually is not
related to SSK figures (See for SSK series, Boratav, 1983,
236
p.9; Kepenek, 1986, p.384). The real differential is 4% in
favor of productivity (See, DIE, 1983, pp.262-63). I
After 1976, however, a different picture is observed iJ
terms of growth rates in the manufacturing sector. In the
state sector, value added and value added/worker had been
declining since 1975 due to inefficiencies created by
political interferences as discussed earlier. In the private
sector, the crisis started in the late 1970s. The real value
added rose by a mere 3.5% in 1977-1978 and declined by 23%
during the next two years. Value added/worker also diminished;
by 37.5% between 1977 and 1980 (DIE, 1983, pp.262-63, 388).
Manufacturing output also declined by 10% during this period
following a minor increase of 4% between 1976 and 1978 (DIE,
1983, pp.388, 431).
As the economic crisis deepened, the working class also
i
suffered. In the private sector, real wages declined by 22%
between 1978 and 1980 and the share of wages in value added
also decreased, from 33.1% in 1978 to 28.5% in 1980 (DIE,
1983, pp.262-63. 388). Hence, even under crisis conditions
wages did not squeeze profits given this deteriorating share
of the wage bill. However, we lack data to show how non-wagJ
income's share in value added was distributed. If after 1977,
share of non-industrial profits (commercial and black-market
profits) increased significantly as claimed (See, Boratav,
1983, p.17), then a moderate decrease in the share of wages
237
was not enough to offset the deterioration of industrial
capital's profits. The severe economic crisis of the late
1970s made the wage\profit conflict much more evident. The
class consensus, on which the smooth working of accumulation
project is based, disappeared. While private capital was
demanding significant wage cuts, unions intensified their
struggles in opposing these demands. During the late 1970s,
given the economic crisis and vanished class consensus, the
accumulation project lost its rationality. In the public
sector, the populist tradition continued longer. Although;
real wages also decreased by 13.5% between 1977 and 1980, the
share of wages in value added rose from 27.6% in 1976 to
46.3% in 1978 and stayed at that level during the next two
years (DIE, 1983, pp.262-63). As mentioned earlier, the
exceptional status of the public sector allowed for higher
wages and wage levels were not much influenced by the
economic crisis.
Summing up, during the 1960s and 1970s, we do notj
observe labor as a stimulant of a profitability crisis.
Although real wages increased steadily until the late 1970s,
this rate of increase stayed below the rate of labor
productivity growth. The share of wages never threatened the
share of profits in value added. Even during the crisis years
of the late 1970s, wages were far from squeezing profits.
Labor did not threaten the rationality of the accumulation
238
project on economic grounds -in terms of a profit squeeze.
Hence, the state's anti-labor reactions after the 1971 and
1980 military takeovers can not be explained within this
context and reasoning. It was rather the political struggle
or political character of the working class struggle— even
when unions were demanding higher wages— that played a
prominent role in instigating the state's anti-labor
j
response. A well-organized working class under the leadership;
I
of powerful unions was perceived by the state as a seriousj
threat to existing property relations. Although, the working
class movement never reached an intensity or level where the
private property system was endangered, neither state nor
capital was comfortable with the increasingly political
character of labor. When this coincided with the crisis of
the late 1970s, a state offensive against labor was staged as
discussed below.
The Political Struggle of the Working Class:
This section examines political struggles of the working
class focusing on unions. Although, the organization of the
working class also took place outside of unions, as under the
roof of political parties, these other forms of organizations
never powerfully influenced state-labor relations (Kog, 1981,
p.290).
239
After the enactment of the Trade Union Act of 1963, the
quantitative growth of unionized workers as well as the power
of unions were remarkable. In 1963, according to the records
of the Ministry of Labor, there were 565 unions and 296,000
union members. The number of unionized workers increased to
1 million by 1968 and to over 2 million by 1970. It exceeded
3.3 million in 1970 and in 1980 there were 735 unions and 5.7
million union members in Turkey (Kog, 1981, pp.291-92; Shabonj
and Zeytinoglu, 1985, p.182). Nevertheless, these figures are'
|
highly biased due to the possibility of membership in more
than one union and the unions1 announcement of theirj
i
I
membership totals well above the real figures. If we use thej
data from SSK and the numbers of workers who benefited from
collective bargaining, it is estimated that unionized workers
had to be around 1.5-2 million by 1979-1980 (Kara, 1981,
p.251). DPT sources also show a lower level of union members
a total of 600,000 in 1967, 1.2 million in 1971 and 2.2
million in 1977 (Mumcuoglu, 1980, p.379). Finally, if we look
I
at the total number of workers in manufacturing industry, a
sector which is highly unionized, we observe that average1
annual number of employees working in both private and publicj
sectors increased from 430,000 in 1963 to 505,000 in 1970 and
1 million in 1980 (DIE, 1973, p.239; DIE, 1986, pp.128,132).
Whatever the degree of this overstatement is, between
1963 and 1980 we observe a significant growth in the1
240
membership of unions. Although there were over 700 unions in
1980, two of them; TURK-IS and DISK were the main contenders
of Turkish labor movement during these two decades. Their
relations to state and political parties and the fierce
rivalry between them shaped the path of working class
movement. Here, their position against state and the
accumulation project in effect is our focal point.
TURK-IS, as mentioned earlier, lost most of its
credibility during 1950s under DP governments' hostile
pressures and turned out to be an isolated and largely
symbolic structure (Bianchi, 1984, pp.215-16). Following the
i
1963 legislation, equipped with right to strike, TuRK-IS
regained its position in a dynamic reorganization. However,
despite these newly granted freedoms that augmented thej
Union's economic and political power, the new leadership was(
determined to avoid repeating the mistakes of their|
predecessors who pressed workers' demands to such an extent
that state reacted with repression. Especially after 1965
when the JP (Justice Party)— which inherited the DP legacy
and merged populism of DP with pro-industrial capital
economic policies— became the government by a major election
victory, TURK-IS leadership followed a line compatible with
the JP's philosophy (Isikli, 1981, p.355). While all
socialists and leftists were expelled from the Confederation^
leadership during the 1960s, TIJRK-IS reaffirmed its "abovJ
241
party” political position and concentrated on organizational
issues (Bianchi, 1984, p.217).
Between 1965 and 1971, TURK-IS was under the majority
of JP unionists and Mr. Demirsoy, one of the Confederation's
leaders during the 1960s, choose a non-aggressive path
adopting a non-partisan stance. He basically limited TURK-
IS ' s political activities to lobbying practices in the
parliament relying on the JP's brokering (Bianchi, 1984,
p.218). During these years, TURK-IS adhered to its "above
party" philosophy strongly (See, Isikli, 1972, pp.331-42).
TURK-IS assumed that cooperation with a political party at
elections would jeopardize relations with the government and
put the hitherto acquired labor rights at risk (Mumcuoglu,
1980, p.388). By staying distant from any radical tendency
I
and sticking to its banner of "anti-socialism" (Isikli, 1972,!
!
p.336), TURK-IS was committed to an American style "bread-j
t
and-butter" union movement. Its only major political act was
to campaign against the deputy candidates who were known to
be hostile to labor during the 1965 elections (Kutal, 1977,
pp.174-79).
During this period, a political environment heavily
dominated by the right-wing JP and the close relations of the
leadership with US unions and official agencies like AIdJ
I
(Agency for International Development) and AAFLI (Asian and'
i
American Free Labor Institute) played a significant role in1
242
shaping TURK-IS's politics (Isikli, 1981, p.355).
Particularly, TURK-IS's financial dependence on AID grants
for its expenses made the Confederation very susceptible to
external pressures (Sulker, 1976, pp.76-81). AID grants were
equal in value to total membership dues collected during the
1960s (Isikli, 1972, p.308). TURK-IS's training activities
and union leaders1 frequent visits to US were also means of
exerting American influence (Isikli, 1988, p.391; Kog, 1986a,
pp.125-34).
The 1 1 above-party1 1 policy and its organic links to US
agencies and unions created at least two major movements that
opposed TURK-IS's official line. First, an open confrontation
erupted with the TLP (Turkish Labor Party),— established aJ
a socialist working class party in 1963. Subsequently, inj
1967, DISK emerged following the "Pasabahge strike", opposedj
by TURK-IS which had signed a protocol with the employers'
confederation to terminate this strike (See, Qegen, 1973,
pp.112-26; Sulker, 1968, pp.54-60,110-14; Sulker, 1976,
pp.86-90).
The main difference between DISK and TURK-IS pertains
to the role of labor in politics. Unlike TURK-IS, DISK
stressed participation of labor in politics. TURK-IS was
criticized severely for defending the status-quo and thJ
interests of the government parties through its "above-party"|
line. Instead, in order to achieve social justice and to
243
defend the rights and interests of the working class, labor
should be represented in the parliament and needs to
participate in decision-making process of the government.
Hence, unions should move beyond the economic struggle under
the leadership of a political party (Kutal, 1977, pp.211-15;
Mumcuoglu, 1980, p.375; Sulker, 1968, pp.55-56,60-61; Sulker,
1976, pp.123-39). Unlike TURK-IS which promoted national
consciousness (Sulker, 1976, p.136), DISK aimed to bring
class consciousness to the working class through the
political struggle.
Based on these principles, DISK supported the TLP in the
1969 elections and between 1967 and 1971 resorted to all
sorts of instruments of political struggle ranging from
strikes to factory occupations (See, Arinir and Oztiirk, 1976,t
pp.24-27; gegen, 1973, section 7). During this period, the
average number of annual strikes increased by 100% from 42 in
1963-1967 to 84 in 1967-1971. Similarly, the average annual
number of strikers rose from 6,000 to 16,400 (Kepenek, 1986,
p.394). With this aggressive, dynamic and political approach,
DISK had a considerable impact on union activities and the
political affairs of the country (Mumcuoglu, 1980, p.394). Itj
started to challenge and defeat several TURK-IS affiliates in
certification contests in the private sector (Bianchi, 1984,
p.219). Especially when TURK-IS's accommodationist policies
failed to answer the new needs of the rapidly growing labor
244
movement in hostile areas of private industry, construction
and services, DISK'S political activism increased its;
popularity (Bianchi, 1984, pp.219-20).
While DISK was increasing its support among the working
class, a second current opposing to "above-party" politics
arose in TURK-IS, namely, the so-called "social democratic"
union movement. The social democratic movement can be
actually traced back to the late 1960s. Following the split
of DISK, internal criticisms of TURK-IS grew as a result of
the Confederation's deteriorating popularity and ability to
represent and promote labor rights. When the RPP's ideology
shifted to "left of the middle" during the late 1960s, the
differences between TURK-IS and RPP intensified (Isikli,
1972, p.343). After the TURK-IS's 8th General Congress in
1970 relations with the RPP did not produce any concrete
outcomes. Under the leadership of four unions close to the
RPP,— including Genel-Is led by Mr.Bastiirk who later became
DISK'S leader— a social-democratic opposition arose (£egen,
1973, pp.186-87; Isikli, 1972, pp.343-45). |
This group submitted the famous "report of the four"—
referring to four unions— to the TURK-IS Executive Committee
on January 1971 (See, Sulker, 1975, pp.275-314, for the
details of the report). This report, carrying the title
"Critiques and Research on the Reforms for Labor Movement",
basically criticized TURK-IS for its alliance with the
245
liberal-capitalist system. Instead, it was argued, TURK-
IS should reorganize, follow its 24 principles and adopt a
social democratic line, either in a close alliance with a
political party , most likely the RPP, or by establishing its
own political party (Isikli, 1972, p.345).
The "four" unions were forced to withdraw their
proposition of forming an alliance with or establishing a
political party during the general assembly and TURK-IS did
not make any concessions for its above the party line (Qegen,
1973, pp.191, 193-94). After this defeat, the same union
leaders, with the addition of 8 other unions, prepared
another report titled of "Social Democratic Order for Turkish
Labor Movement", and presented it to the next TURK-IS
Executive Committee assembling in July 1971 (Qegen, 1973,
p.194; Isikli, 1972, pp.347-48).
Unlike the previous report, this one contained concrete
proposals for a social-democratic regime, ranging from issues'
i
like education to development, from land reform to foreign
trade (See for details of the report, Isikli, 1972, pp.371-
76; Siilker, 1975, pp.314-36). The social democratic movement
developing inside TURK-IS defended the principles of balance,
peace and consensus rather than seeing class conflict as the
central issue (Isikli, 1972, p.348). Its economic model
proposed a triple sector structure which includes state,
private and cooperative— so called the people1s sector—
246
sectors (Isikli, 1972, p.349). Its emphasis was on this
latter sector in a mixed economy formation. The people's
sector would be managed by workers and peasants and play a
significant role in the society while concentrating on
handicrafts and agriculture (See, Siilker, 1978). Moreover,
SEEs would be governed jointly by TURK-IS and the government-
-including the State Development Bank and the DPT (Siilker,
1978, p.333). By establishing a people's sector and
increasing the state1s share in the economy the social
democratic movement intended to propose a model where)
resources would be primarily allocated by the state ratherj
I
than by the market. In this structure TURK-IS was expected to
play a prominent role.
Meanwhile, DISK and the RPP's continuously improving
popularity among the urban working class strengthened the
determinations of TURK-IS and the JP to weaken the emerging
left-wing unionist movement by means of incorporating
corporatist provisions into the new trade unions and labor
code (Bianchi, 1984, p.220). JP endeavored to corporatize the
labor movement in Turkey with the belief that political!
unionism was taking root which would promote class warfare
and new challenges to the authority of state and existing
property relations. On the other hand, TURK-IS would be
granted the exclusive right of representation and a warranted
I
access to policy making in return for continued moderation in
247
exercising labor’s new constitutional rights to strike and to
engage in collective bargaining (Bianchi, 1984, pp.212-13).
The JP, in cooperation with TURK-IS, proposed a bill to
amend the trade unions Law (#274) and the Law on collective
bargaining, strikes and lockouts (#275). Efforts to amend the
latter law were abandoned later when it became clear that the
Constitutional Court was opposed to it (Isikli, 1988, p.392).
This amendment would restrict the right to strike by forcing
workers to appeal to the Supreme Arbitration Board— which was
voluntary before— in order to exercise their right to strike
following a labor dispute (Arinir and Oztiirk, 1 9 7 6 , p p . 6 1 - J
i
62). General strikes or support strikes would also bej
i
prohibited (Isikli, 1972, p.323).
On the other hand, a bill to amend the trade union Act
was passed as Law #1317 in the Parliament (See, Arinir and
Oztiirk, 1976; Isikli, 1972, pp.323-29). The most
controversial point was the amendment to the 9th Article of
the Act, which mandated the closing down of the unions or
confederations unless they represented at least one-third of
those working in a particular industrial activity or branch
(for the unions) and in Turkey, as a whole (for the)
confederations) (Arinir and Oztiirk, 1976, p.504). The|
proposed amendment meant that TuRK-IS would be the only
confederation acquiring privileges of exclusive national and
international representation. Moreover, it suggested that a!
i
248
federation recognized as an industry-wide bargaining agent
would negotiate for all workers in a given industry even
though a particular plant might have no affiliates of the
bargaining union and a union not affiliated with the
bargaining union might have the majority in the plant
(Bianchi, 1984, p.127). The amendment clearly targeted DISK,
and the government spokesman openly expressed that they were
going to wipe DISK out of existence (Isikli, 1988, p.392).
Adoption of these corporatist labor measures triggered
immediately workers’ riots in the industrial centers of
Istanbul and Izmit. On June 15th and 16th, 1970, workers1
protests erupted; more than 150,000 workers participated in
i
this event (See, Arinir and Oztiirk, 1976, part II). Followingj
these riots, Martial Law was imposed and DISK executives and!
labor leaders were held on trial in the Martial Law Courts
(See, Arinir and oztiirk, 1976, part V).
The June 15-16 protests had a significant impact.
Finally, DISK demonstrated its power and showed that any
attempt to exclude left-wing unionism from the bargaining
process would have to rely on coercion (Bianchi, 1984,
p.213). Second, when these corporatist measures failed and
backfired, the JP lost its already deteriorating labor
support to the RPP completely. Although, the RPP initially
supported these amendments with the expectation of
influencing TURK-IS, when the TURK-IS - JP alliance became
249
apparent during the Confederation's 8th General Congress
(Isikli, 1972, p.344), the RPP moved its support towards
DISK. Then, following a report presented by Mr. Seref Baksik
(See, gegen, 1973, pp.172-74), the RPP opposed these
amendments together with the TLP. Finally as a result of
this joint effort by the RPP and the TLP, the amendments were
eliminated by the Constitutional Court in 1972 (See, Arinir
and Oztiirk, 1976, Appendix I). As a result of these
developments, the RPP 's moderate left-wing orientation was
translated into a unified political base in the 1970s in
which labor became the most important constituency.
The March 12 1971 coup took place following the June 15-
1
16 riots and at a time when the social democratic opposition1
in TURK-IS was gaining momentum. In the years following 1971,
the state was hostile against labor particularly against
DISK, in an attempt to repress the politicization of trade
unions (Isikli, 1981, pp.357-58). However the most important
effect of this period was on the level of wages thanks to the
restrictions brought in by the Martial Law on strikes and
collective bargaining as discussed earlier (See, Aker, 1975;!
Aksoy, 1980; Isikli, 1988, p.397). One major change in the|
labor code during this period was the amendment to the 46tn
Article of the Constitution which abolished civil servants1
right to organize in trade unions (Isikli, 1981, p.357).
Another major legal intervention of the period was the 1972
250
Law of associations. Actually this Law was prepared by the JP
during the late 1960s in order to restrain the political
opposition of the left coming from voluntary associations.
However, since the proposed restrictions on associational
freedom were likely to be nullified by the Courts, the JP
could not pass this Law beforethe 1971 coup. The interim
military government passed it in 1972 after revising and
extending the original list of illegal associations and
]
prohibited activities (Bianchi, 1984, pp.115-17). The majori
innovation of this new law was to grant significant authority
to the government in controlling associations' operations and
organizations. The RPP's determined struggle convinced the
Constitutional Court to revise the law but it did not alter
it seriously (Bianchi, 1984, pp.117-18).
This offensive against labor did not reach the dramatic
levels that occurred after 1980. Although labor lost some
ground against capital because of the Martial Law, unions
were not under severe pressure. The state did not intervene
to the opposition of the RPP and the TLP in their efforts to
abolish Law #1317. Consequently DISK survived this period and
intensified its power after 1973. On the other hand, TURK-IS,
after welcoming the military coup (Kog, 1986a, pp.205-7),
under the new leadership led by Mr. Halil Tung became more
critical against the state (Bianchi, 1984, p.222). The social
democratic opposition was defeated in the 1973 Congress and
251
the Confederation was controlled by conservative unionists.
This setback led to further splits from TURK-IS as social
democratic unions joined with DISK in the coming years (Kog,
1986a, p.194).
The March 12, 1971 period reshaped the general policies
of both Confederations. In DISK, the radical elements became
more moderate in terms of priorities. First, this was a
direct result of state's harassment of DISK during the
Martial Law years. Second, DISK emerged from this period as
a more serious competitor to TURK-IS not only as a collective
bargaining agent but also as a political representative of
the working class (Bianchi, 1984, p.225). During the midj
1970s, membership of DISK increased significantly. This
expanded membership, together with its new prominent status
in private sector bargaining, put some pressure on thej
leadership to move from a radical line to a more moderate!
path in order to retain these gains (Bianchi, 1984, p.225;
Mumcuoglu, 1980, p.397).
As a result of this moderation DISK revised its former
underrating of the economic struggle. Although it stayed
faithful to the primacy of political struggle (Mumcuoglu,
1980, p.397), it focused on carrying out this struggle more
in legal ways with the intent of eliminating all hindrances
to union participation in the economic struggle (Bianchi,
1984, p.225). The most significant symptom of DISK'S
252
moderation was the establishment of closer ties with the RPP.
On the one hand, the experience of the March 12 period, on
the other hand RPP's new philosophy leaning to the left moved
DISK and RPP to an alliance which had a substantial impact
on state-labor relations during 1970s as will be discussed.
While DISK emerged as a more moderate Confederation from
the Martial Law years, TURK-IS politicized under Mr. Tung's
leadership. DISK'S growing rivalry, the RPP's aggressiveness
in pursuing an alliance with organized labor, social
democratic opposition within the confederation and the defeat
of the corporatist project to monopolize TURK-IS all
convinced Mr. Tung that they had to be more active
politically and aggressive in defending labor rights and
pluralist democracy. This tendency not only led to closer
ties between the RPP and TURK-IS, but also encouraged a
gradual convergence of both Confederations' positions —
economic and political— during the 1970s (Bianchi, 1984,
pp.222-24).
State-labor relations during the 1970s developed around
these strategic alliances between labor, the RPP and the JP.
As social democrats lost the TURK-IS elections in the 1973
Congress, the position of the Confederation was retained.
This opened the way for an open DISK-RPP front. As a result
of this alliance, DISK was compelled to conduct its struggle
within the institutions of Law becoming recognized by|
253
business in the formal way, it further increased its base and
power (Mumcuoglu, 1980, pp.397-98). This alliance also
improved the RPP's vote significantly in urban areas where
the working class concentration is higher (Danielson and
Keles, 1980, p.299). Meanwhile, the TURK-IS - RPP
reapproachment gained some momentum after the Confederation's
1976 Convention. Mr. Tung openly endorsed RPP-TURK-IS
alliance and during 1977 he called for a formal endorsement
of the RPP in the elections. However, since conservative wing!
of the confederation was determined to drive a hard bargainj
with Mr. Ecevit by resisting a formal alliance as long as
DISK-RPP association prevailed, TURK-IS continuously
frustrated the RPP's pluralist strategy for coordinating the
greater political mobilization of labor in the 1970s
(Bianchi, 1984, pp.223-24).
The 1970s witnessed several coalition governments. Two
of them were headed by Mr. Ecevit's RPP; first between 1973
and 1974, with the pro-religious NSP (National Salvation
Party); second, between 1978 and 197 9, with some
independents. There were also three "National Front"
coalitions formed by right-wing parties— the JP, the NSP and
the NAP (National Action Party). Mr. Demirel's governments
ruled between 1975-1977, 1977-1978 and during 1980. The
economic and political struggles of the working class during
254
these coalition governments were influenced by several
factors, most notably by the economic crisis.
Until 1977, as mentioned earlier, economic growth in the
industrial sector contributed to increasing real wages, which
in turn led to relatively harmonious industrial relations.
Between 1973 and 1976, the average annual number of strikes,
striking workers and the number of days lost to strikes were
66, 23,000 and 955,000, respectively (DIE, 1983, p.208).
During 1976 and 1977, the working class struggle intensified'
under the right-wing national front government. Politically
motivated 1976 protests of the State Security Courts were the
climax of this struggle and stimulated capital1s offensive
against DISK (Kog, 1981, p.334). 167 strikes took place in
197 7 and 5.8 million days were lost during these strikes
(DIE, 1983, p.208). During Mr. Ecevit's social democratic
i
rule, since DISK had been officially supporting the RPPj
government, the intensity of strikes declined. Although there
were 175 (190) strikes in 1978 (1979), the number of strikers
dropped to 27,000 (40,000). More important, the days lost
during these strikes declined to 1.6 (2.2) million (DIE,
1983, p.208). DISK'S increasing frustration at Ecevit's rule
may be observed by the escalating figures of 1979.
After 1978, however, the deepening of the economic
crisis changed industrial relations dramatically. The detailsj
of this economic crisis are given in the next chapter. Real
255
industrial production— deflated by industrial prices—
decreased by 9% in two years (DIE, 1983, p.431). Similarly,!
real value added declined by 23% and 28% in private and
public manufacturing sectors (DIE, 1983, p.)* Private
investment in manufacturing— in 1976 prices— dropped by 47%
between 1978 and 1980. The share of the private sector in
total investments in this sector also declined from 59.8% to
35.2% (World Bank, 1981, p.218).
I
The economic crisis had two major effects on labor.
First, capital concerted a new offensive against labor to
restrict its rights with the expectation of lowering wage
rates, i.e. increasing profit rates. Second, the economic
I
crisis revealed the irrationality of the existing1
accumulation project. A restructuring of capital was
inevitable. Consequently, a new development program,
elaborated in the next chapter, was designed where import-
substitution lost its primacy against export-oriented1
industrialization. This new development package in turn
demanded competitiveness in the world market. Hence, lower
wage levels became essential for a competitive edge. In other
words, labor was no longer perceived primarily as a demand
i
element but rather as a cost element as in all export-[
promoting accumulation projects.
Given the new economic conditions and the alternative
development program on the agenda, labor became the main
256
target of capital. Moreover, the 1979-1980 period was crucial
for the private sector as being collective bargaining years.
Contracts of more than 300,000 DISK and 500,000 TURK-IS
workers' would be renewed (Sonmez, 1984, p.28).
Private capital's main concern was the effective labor
legislation that had been protecting the organized working
class by making collective bargaining every two years a
built-in mechanism to ensure automatic wage increases. Given
the strong union power, all unions in every sector had been
following the wage increases acquired by a few pilot
agreements regardless of sectoral profitability differentials
(Keyder, 1987, pp.191-92). A second principal concern
/
relating to labor costs was the issue of severance pays which
I
was a big and increasing burden (Sonmez, 1984, p.28).
Private capital resumed a new offensive against labor
in order to influence public opinion to transform existing
industrial relations to their favor. This offensive gained
momentum when the JP became the head of new national front
government in late 1979 following the RPP's defeat in the by-
elections on October. After the "24 January measures"—
discussed in the next chapter— which restructured the economy
in the direction of an IMF guided stabilization program and
initiated the first step for an export- oriented economy,
private capital and the new government embarked on a new
project to produce an institutional structure of labor
257
relations compatible with the new needs of transforming
economy.
Private capital attacked labor on two grounds. The first
was the rate of increase of wages. Capitalist organizations
argued that wages were increasing regardless of the inflation
rate and productivity trends in the manufacturing sector.
Moreover, wages as the major component of costs were claimed
to be responsible for a cost-push inflation (Sonmez, 1984,
pp.32,46; TUSIAD, 1980, pp.42-43). As we showed earlier, the
first aspect of this argument was based on false premises.
Not only did real wages decline during the late 1970s, but
their rate of decrease was greater than the rate of decline
of productivity. Hence, the share of wages in value added
diminished as well. Returning to the second aspect of
capital's argument regarding wages, the ratio of wages to
total costs in the manufacturing sector never reached a
significant level. This ratio decreased from 17% to 14% in
private and from 24.4% to 18% in state manufacturing sectors
between 1978 and 1980 (DIE, 1983, pp.262-63).
The second argument of capitalist organizations was the
ideological nature of labor strikes as particularly
emphasized by TISK, the most hostile organization against
labor (Bianchi, 1984, p.269; Sonmez, 1984, pp.57-59; Tayang,
1980, p.78). Mr. Ozal, the leader of MESS (Turkish Metal
Products Employers Union), who later became the
258
Undersecretary of the Prime Minister and architect of the
"January 24 measures", attacked trade unions vehemently and|
continuously on this ground (Sonmez, 1984, pp.32-38). After
becoming the top bureaucrat of the JP responsible for
economic affairs, Mr. Ozal continued his assault. He
complained about collective bargaining, severance pay and
strikes in an effort to influence public opinion. In front of
the top military officers who later executed a coup d'etat on
September 12, 1980, he argued along similar lines, linking
all the ills of the economy ranging from SEEs to low
investment levels to labor and unions (£olasan, 1983, pp.144-
45).
While the annual average number of strikers and days
lost in strikes were 33,500 and 1.9 m days during the RPP
government's rule between 1978 and 1979, these figures
escalated to 46,000 and 5.4 m days in 1980 (DIE, 1983,
p.208). On the one hand this was a reaction to depressed wage
levels. On the other hand workers intensified their struggle
against the hostile state-private capital alliance.
The most effective weapon of the government against the
increasing number of strikes was its legal right of
postponing them. During 1980, the National Front government
postponed 46 strikes — the highest number since 1963— with an
average 67.8 days/strike (Tayang, 1980, p.74). The number of
259
workers who could not use their right to strike because of
these postponements was close to 120,000 (Sonmez, 1984,
p. 50).
Another attempt of the government to break the power of
unions and control the rate of increase in wages was the new
"Collective Bargaining Coordination Committee", which
determined the general principles of collective bargaining
(Sonmez, 1984, p.44). These principles, among other
restrictions, prohibited inclusion of any demand by labor
which may intervene in management of enterprises like
participation in management, production planning, etc. It
i
also put restrictions on severance pay, contract periods, j
I
vacations and working hours (Sonmez, 1984, pp.46-47).
Under these circumstances, the class consensus between
capital and labor which worked relatively well until the late
1970s was completely broken. The existing institutional
structure of industrial relations was no longer compatible
with the accumulation project which had been in process of
transformation under the influence of economic crisis.
State—Labor relations during the early 1980s:
After the September 12, 1980 military take-over, a new;
period started for industrial relations. It is beyond thJ
I
scope of this study to examine post-1980 developments.|
2601
i
However, in order to understand the state's response to the
developments between 1978 and 1980 and also to comprehend the
transition to a new development program after 1980, it is
necessary to give a brief picture of industrial relations'
highlights during the early 1980s.
As mentioned formerly, prior to the coup d'etat, all
organizations of private capital, such as TISK, MESS, TUSIAD
(Turkish Industrialists and Businessmen Association) and TOB
(Turkish Union of Chambers of Commerce, Industry and
Commodities Exchanges), had started an open fight against
organized labor, particularly DISK. They had provided
numerous proposals to the government to amend the existing
labor code and related laws and regulations (See, Sonmez,
1984). These demands were fulfilled after September 1980 by
I
the efforts of Mr. Ozal and his team (Guzel, 1987, pp.90-91;|
f
Sonmez, 1984). |
i
Following the coup d'etat, activities of DISK were
suspended— together with the neo-fascist MISK and the pro-
islamic HAK-IS affiliated with the NAP and the NSP (Shabon
and Zeytinoglu, 1985; p.210). However, MISK and HAK-IS were
allowed to resume their activities later (Guzel, 1987, p.78).
TURK-IS was left as the sole representative of Turkish
workers, a target the Confederation sought but could not
achieve in the early 1970s. This was not a surprising outcome
given the ideology of TURK-IS as revealed earlier. The
2 6 1
confederation welcomed the military coup as a remedy to the
ongoing terror in the country. It did not oppose seriously
the anti-labor offensive of the state and private capital
during the preparation of the 1982 Constitution. TURK-IS
General Secretary became the Minister of Social Security in
the interim government (Kog, 1986, pp.207-10). Later, in
1981, the activities of some branches of YOL-IS (State
Highway Workers' Union), the most progressive union in TURK-
IS, were also suspended (Guzel, 1987, p.78). DISK officials
were arrested and put on trial for violating Articles 141 and
142 of the Penal Code which stipulate that attempting to
[create a regime where one class dominates over another class
is punishable with 8 to 15 years of prison term or the death
penalty (Shabon and Zeytinoglu, 1985, p.211).
Strikes and collective bargaining were also banned by
the National Security Council and all workers on strike
started to work by September 15th, 1980. More than 50,000
workers on strike, almost all DISK workers, resumed their,
I
work (Sonmez, 1984, p.65).
In December 1980, the SAB (Supreme Arbitration Board)
Act was passed and SAB was established which is an1
institution composed of state, employee and employer
organizations' representatives. It governs renewal of expired
collective agreements and regulates employee-employer
relations in sectors where strikes and lockouts are illegal
2 6 2j
or suspended (£elik, 1986, pp.449-65, 498-505). SAB resolved
all collective bargaining agreements that could not be
concluded between workers and employers. SAB acted in general
to the benefit of capital and held real wages at low levels
as shown later. Especially in the state sector, with thej
intention of balancing wage levels, real wages were depressed
significantly (Guzel, 1987, p.80; Ketenci, 1985, pp.169-71;
Sonmez, 1984, pp.71-78). In 1982, new amendments to the laborj
code changed the provisions on severance payment whicti
I
entitles a worker to a payment when the individual contract
terminates because of resignation, layoffs, retirement or|
compulsory military service (Qelik, 1986, pp.202-27). Withj
i
the new amendment a ceiling was imposed on severance pay and
any future increases were bound to the wages of civil
servants enabling employers to pay much lower amounts -since
salaries of civil servants have always been lower than
workers' wages thanks to the absence of unionization-. This
amendment had been repeatedly demanded by employers and has
been a great relief to them (Ketenci, 1985, pp.168-69; Shabon
and Zeytinoglu, 1985, pp.151-52).
Similarly, the 1982 constitution restricts individual
rights, namely, collective bargaining and unionism rights of
workers. (See, Ketenci, 1985, pp.175-78; Pekin, 1985, pp.257-
64, 298-301). The minimum wage is no longer linked to
t
workers' social and economic conditions but instead is bound
263
to employers1 ability to pay (Shabon and Zeytinoglu, 1985,
|
p.135). Unions are forbidden from engaging in political
activities and form supporting or being supported by
political parties. Unions are also required to be financially
controlled by the government (Shabon and Zeytinoglu, 1985,
pp.137-38). The lockout became a constitutional right and
only economic strikes are allowed while sympathy, political
or general strikes are prohibited (Shabon and Zeytinoglu,
1985, p.139). |
!
In 1983, the military government enacted new labor
legislation. New laws; Trade Union Act (#2821) and Collective
Agreement, Strike and Lockout Act(#2822) are basically an
extension and formalization of the 1982 Constitution's
provisions (See, Qelik, 1986; Ketenci, 1985, ppl79-92; Shabon
and Zeytinoglu, 1985, pp.153-71). The new labor legislation
curbs many trade union rights formerly enjoyed by Turkish
Unions and fully backed by employers' organizations who had
already been in full agreement with the government in the
basic principles of necessary amendments (Shabon and
Zeytinoglu, 1985, p.154).
Among the most notable changes, the new Act first
dictates unions to organize on an industry basis. This forced
local unions organized on plant basis either to join with
TURK-IS or to stop their activities. Moreover, since TURK-IS
was mainly organized in big private sector companies, workers
2641 )
I
I
in small-scale enterprises are left outside the collective
bargaining as desired by employers (Guzel, 1987, p.83).
Second, activities of trade unions are limited to collective
bargaining. They are barred from engaging in political,
cultural and commercial activities (Guzel, 1987, p. 87;
Ketenci, 1985, pp.181-82). Third, the revenues of unions are
restricted with the union dues. Any domestic organization can1 ;
I
not give financial aid or donation to unions. Foreign aid or
donations are subject to the permission of the Council of
Ministers (Shabon and Zeytinoglu, 1985, pp.160-61).
Last but not least, as mentioned formerly, the right to
strike is curtailed and partially replaced with compulsory
arbitration. Although, theoretically, a union can declare a
strike, the government can postpone it for 60 days— 90 days
in national emergencies. If there is no settlement during
this period then the impasse will be resolved by the SAB.
Given the majority held by government and employer
representatives on the Board, this mechanism virtually
eliminates the only weapon of unions; the strike. Since
employers expect a favorable decision from the SAB, strikes
are no longer a deterrent factor (Ketenci, 1985, pp.
190-91; Shabon and Zeytinoglu, 1985, pp.169-70). SAB
decisions in the early 1980s support this line of thought.
The SAB approved 90%, 80% and 40% increases of gross wages
for the years between 1979 and 1982 and 25% for the 1982-1984
265
period. However, given the income tax rates between 50-
i
58%, net increase in wages were very low relative toj
inflation rates (Shabon and Zeytinoglu,1985, pp.227,232). The I
differentials between the inflation rate and maximum wage
increases set by the SAB was more than 20% between 1980 and
1982 (Shabon and Zeytinoglu, 1985, p.228). Finally, non-
unionized workers who pay dues egual to 2/3rd of the regular
dues are allowed to enjoy the benefits of collective
bargaining. This is a provision that opens the way to free
riders and eventually lowers the incentives for unionization
(Sonmez, 1984, p.110).
As a result of this new legal environment and the
state's anti-labor alliance with private capital, income
distribution deteriorated for labor during the early 1980s.
According to the DIE series of manufacturing industry
surveys, in the private sector real wages stayed
approximately at a constant level between 1980 and 1984 while
in the public sector real wages declined by 23% (DIE, 1986,
pp.138-39,223).
According to the series of SSK, the decline of real
wages are more dramatic. However, one should be careful about
these series since, as mentioned before, they do not cover
the workers who are paid below or above the limits of floor
and ceiling social security premiums (Toriiner, 1985, pp.202-
203). Especially because the ceiling does not catch up with
266
the inflation rate it overestimates the decline of real wages
(Boratav, 1983, p.17). Between 1980 and 1984 while the
ceiling premium increased by 161% the inflation rate was 240%
(DIE, 1986, p.223; Toriiner, 1985, p.202). On the other hand,
given the dominance of small-scale plants where workers are
paid below the minimum premium, this underestimation may
balance the bias mentioned above (Toriiner, 1985, p.203).
Unadjusted SSK series shows a 14.4% decrease in real wages;
between 1980 and 1984 (Pamuk, 1986, p.95). TISK, however, J
I
challenges these figures since they do not include social!
benefits. When we include social benefits in the wages but
also deduct the taxes, real net wages deflated by WPI reveals
a 16.9% decrease, which is higher than the unadjusted series
(DIE, 1986, p.95-for 1984 figures; Toriiner, 1985, p.209).
While real wages were depressed during the early 1980s,
the share of wages in value added also dropped significantly.
In the private manufacturing sector, this ratio decreased
from 28.5% to 23.8% between 1980 and 1984. In the public!
i
sector it dropped from 46.9% to 23.7% (DIE, 1983, pp.262-63;!
I
DIE, 1986, pp.138-39). This was basically because of the:
surging productivity in both sectors. Labor productivity
increased by 25.6% and 65.8% in private and state sectors
during this period (DIE, 1983, pp.262-63; DIE, 1986, pp.138-
39). Consequently, the share of wages in total costs also
I
declined from 14% to 10% in private and from 18% to 9.3% inj
267
public manufacturing sectors (DIE, 1983, pp.262-63; DIE,|
I
1986, pp.138-39). ISO (Istanbul Chamber of Industry) series
also support these results which shows that the share of
wages in total costs was 9.9% in 1982 (Konukman, 1986,
p.249).
All these developments in industrial relations not only
generated a highly favorable picture for private capital1s
profits but also produced an institutional structure
compatible with the formation of a new accumulation project
with its emphasis on the export sector which in turn
strategically relies on low wages for a competitive edge inj
the international markets. !
Labor as an alternative?
When the accumulation project fell into a severe crisis
during the late 1970s, one potential alternative was a
development strategy where labor would be the leading agent
in a workers' management model. In other words, industrial
capital would be replaced by social capital as the dominant
fraction of the accumulation project. In Turkey, with the
exception of an attempt initiated by the RPP government
during 1978-1979, labor never took the position of organizing
an alternative hegemonic project.
268
In general, we do not observe any serious effort of
unions in the direction of challenging capitalist property
relations. They always played the capitalist game within its
rules. Rather than becoming socialist unions they remained in
a reformist line something similar to Western social
democratic unions (Kog, 1986b, pp.112-13). This was
particularly true for DISK which was labeled as a Marxist
union by the right-wing governments and organizations of
capital. DISK'S main lines of struggle included issues like
international union solidarity, emphasis on peace and
demilitarization, anti-fascist struggle and support of
parliamentary democracy. This position was not different from
Western social democratic unions (Kog, 1986b, pp.133-34).
For example, there is no mention of any intent of
radical change of property relations in DISK'S declaration of
establishment. Major arguments are to improve income
distribution, to acquire higher wages, to attain social
justice, and so on, which are all reformist demands (Isikli,
1972, pp.377-85). Although one may argue that DISK believed
that socialism is the answer to the problems of Turkey and
rejected the idea of a "social-welfare state" and other
reforms to improve income distribution as "capitalist
solutions" (Mumcuoglu, 1980, pp.402-403), DISK, with few
exceptions, mainly executed an economic struggle to increase,
i
wage levels by means of collective bargaining rather than1
269
choosing political strikes and mass demonstrations to
overthrow the regime (Kog, 1986, pp.133-35). DISK defended
the democratic regime (Bianchi, 1984, pp.213-14) and
supported RPP to achieve "social progress" (Mumcuoglu, 1980,
p.398). It is beyond my purpose to elaborate on the real
intent of DISK'S policies. However, in practice there is no
hard evidence which shows that DISK had ever embarked on a
counter-hegemonic project to change existing property
relations during the 1970s.
Rather than building an alternative development
strategy, both DISK and TURK-IS merely stated their views and
criticisms about economic policies. Their common emphasis was
a model in which the role of the state is significant and the
problem of income distribution is central. Their proposals
included a reform of the taxation system, land reform,
development of cooperatives, nationalization of foreign trade
and national resources (Kutal, 1977, pp.236-42,248-51;
Mumcuoglu, 1980, p.401). Although these propositions suggest
changes in property relations— specifically in agricultural
and commercial sectors— , they are short of asking for any
radical reform in the manufacturing sector where most of the
unionized laborers work. Moreover, the main emphasis is not
on property relations but rather the improvement of income
distribution to the advantage of the working class.
270
The model proposed by both Confederations was not much
different from the 1930s etatist project. State capital would
be dominant particularly in heavy industry, mining, foreign
trade, banking and insurance (Kog, 1986b, p.131) and planning
would be the central resource allocation mechanism (Kutal,
1977, pp.243-248). Hence unions supported a model of
capitalist accumulation where hegemonic capital is the state
capital rather than designing a project where labor and
social capital is central.
While labor organizations never concerted a full effort
to promote a development strategy which can be perceived by
the state as a rational alternative, Mr. Ecevit's RPP
announced a "new opposition strategy" in 1976. This project,
similar to Scandinavian social democratic movements, would
allow the people to participate not only in state power but
also in the management of the economy (Bianchi, 1984, pp.246-
47).
The basic premise of the program was that economic
development can be achieved by respecting the principles of
freedom, equality and supremacy of labor and this can only be
materialized in a self-management model (Uca, 1983, pp.20-
21). In agriculture, following land reform, self-sufficient
rural cooperatives operating in the newly established
village-towns would be the production units (Uca, 1983,
chapter 4). Together with village development cooperatives,
271
workers1 companies and SEEs would be the wheels for progress
in the "people's sector" (Uca, 1983, chapter 3,5). The
people1s sector would be owned by the people and managed
democratically.
Workers' participation, the focal issue of the RPP
program, attempted to be realized through laws and collective
agreements. Most notable was Law #440, which regulates
workers' participation in SEEs (Uca, 1983, chapter 3).
Although workers' participation has improved during the
1970s, direct involvement of workers was out of the question
(Uca, 1983, p.47). TURK-IS had always strongly supported the
issue of workers 1 participation as the necessary principle of
political democracy and economic development (Uca, 1983,
pp.48-51). DISK, however, opposed it labeling the principle
as a capitalist plot to attain class collaboration (Uca,
1983, pp.51-52). Private capital, on the other hand, strongly
opposed to workers' participation together with the right-
wing political parties, as expected (Uca, 1983, pp.56-60).
TURK-IS and the RPP government signed a "social
contract" in 19 78 to lay down the general principles of
workers' participation and self-management. Based on these
agreements, workers' participation starting in SEEs wouldj
increase productivity and contribute to economic growth.;
Since workers would be given the benefits of the productivityj
surge, they would put more effort into increasing
272]
productivity (Uca, 1983, pp.82-84). In 1979, the RPP
government prepared a model proposal to facilitate workers'
participation and to bring real self- management to SEEs]
t
(Bulutoglu, 1980, pp.102-105; Uca, 1983, pp.96-99). According
to this proposal, employees' committees were to advise,
consult and cooperate with management on social, economic and
work place conditions. However, their decisions were subject
to the approval of management (Uca, 1983, pp.96-102, 104-
108). Workers' participation was expected to solve some
problems of SEEs, specifically political interference and
favoritism, unproductive employment and economic policies,
low labor productivity, management problems, and so on (Uca,
1983, pp.107-108). Moreover, on the level of the national
economy, by furthering economic democracy and development and
improving income distribution a class consensus between
capital and labor would be attained (Uca, 1983, p.108).
This attempt towards workers' participation failed,
however, due to several reasons, including weak political
support and adverse economic conditions inherited from the
previous government (Uca, 1983, p.199). The RPP government
did not collaborate with unions effectively. Workers'
participation was perceived to be attainable by revising laws
in a legalistic approach rather than by changing the social
relations of production and incentive structure.
Consequently, during its 22 months in power, the Ecevit
273
government spent most of its time to revising Law #440 and
information was conveyed to unions after the "model" was
perfected (Uca, 1983, p.234). It was too late when a draft of
the new Law #440 was sent to TURK-IS and DISK. DISK did not
reply retaining its orthodox line. TURK-IS, on the other
hand, was no longer enthusiastic to support the RPP because
of the RPP's declining popularity and the influence of
conservative members in the leadership of the Confederation.
Actually, when the JP became the new government, TURK-IS
never mentioned workers' participation again (Uca, 1983,
i
pp.236-37).
Although, the Ecevit government had this opportunity of
establishing a new hegemonic accumulation project based on
the principles of workers' participation and self-management,
the lack of a working strategy, its legalistic approach, the
lack of political support and its failure to collaborate with
unions effectively prevented this project's realization.
Moreover, unpopular economic policies of the RPP government
led to the deterioration of working class support to Ecevit
by the end of 1979 and this model never had a chance of
execution (Bianchi, 1984, pp.147-48)
1
| CHAPTER VIII ;
I i
I STATE - CAPITAL RELATION BETWEEN 1960 AND 1980 |
I
! !
!
Introduction
I
i
I
i <
In Chapter VI, I presented the history of the DP;
jproject. The 1960 transformation opened the way for the next
I
I hegemonic project that remained intact for two decades. In
[Chapter VII, I discussed one aspect of this strategy focusing
'on the state - labor relation. In this chapter, I intend to
analyze the state - capital relation during the 1960s and1
1970s. !
As discussed in the previous two chapters, by the end!
i i
of the 1950s the necessary conditions had been established
i ' . . !
'for a transition to a new hegemonic project. First, a >
l {
I deepening crisis, particularly creeping inflation, pushed the'
I 1
(project increasingly toward economic bankruptcy. The project)
| was no longer rational in terms of reproducing the capitalj
[accumulation process and profitability of the capital.j
Second, the industrial bourgeoisie, although still relatively
I |
small in size had gained some strength and power in the late;
1950s thanks to the de facto protectionism in foreign trade.1
275
Particularly through licencing agreements with foreign
i !
capital in the production of previously imported consumer|
I
I r ’
goods, industrial capital was ready to leade an alternative!
project. Finally, in the political arena, the determination
of the DP to continue and even enhance its repressive andj
authoritarian regime generated a resentful urban coalition in
i I
|the opposition. This coalition comprised an industrial]
jbourgeoisie-intellectuals-working class alliance which1
!intensified its opposition against the DP government and
[eventually a severe political crisis occurred. j
i
i
While the first two developments were necessary;
conditions for a transition to a new project, the final one
: l
,proved to be the determining factor for the actual
transformation that took place in 1960. As noted in chapterj
VI, there was no tendency in the DP's policies to move
towards a new project under the leadership of industrial]
capital before 1960. Under those circumstances such a ]
I
transition was quite unlikely and only the military coup
could and did deliver this outcome.
The main reason behind this argument is the clear
: i
:minority status of the urban coalition in a country where
! i
;most of the population lived in the rural areas and threw a
,strong political support to the DP. In other words, neither
!
the political demands of the urban coalition nor the economic
276]
i
aspirations of industrial capital for the leadership of a new*
project could be realized through elections.
i
i
The military coup, responding to discontent among urban
classes as well as foreign pressure, transformed the non-
i
:hegemonic nature of industrial capital. However, it is too
I I
jsimplistic to claim that this transformation took place in a1
'smooth and harmonious way. Although the urban coalition had;
^established an alliance against the DP in the late 1950s
iunder the political leadership of the RPP, there were certain
! divisions in the implementation of the next project. These
i
divisions were visible not only between the bureaucracy and
i i
the industrial bourgeoisie but also within the military. |
Consequently, it took some time to sort out these differencesj
i
and to complete the transition. Only a major electoral!
i
victory of the Justice Party (JP) in the 1965 elections;
i
terminated this period of transition. In the next section I
; summarize the significant developments of this period.
;
l
i
! The military government and developments in the early
1960s
The heterogeneous and contradictory nature of the urban
coalition is reflected in various developments during the!
t j
jearly 1960s. In this section, I focus on three areas; the!
I I
military government and its policies, the 1960 constitution^
I 277
i
[and the establishment of the DPT (State Planning |
{ I
Organization) and early planning programs.
The military coup took place on May 27, 1960. The major I
goals of the Armed Forces in seizing power were to save
t
jdemocracy and to prevent the internal strife. Free elections
jwere promised in the near future. A body known as the!
I
'National Unity Committee (NUC) was established. General Cemal
[Gtirsel, the former commander of the Armed Forces, became the
'chairman of the NUC as well as the President, Prime Ministeri
i
and Chief of the General Staff. The NUC appointed a civilian
!
cabinet and stayed in power until October, 1961 (Weiker,
1 I
1963, p.21). During these 21 months, NUC concentrated on the!
preparation of the new Constitution and establishment of the
!
DPT, as discussed later.
I
! From the beginning, the NUC was divided between
i !
[Moderates and Radicals. The Moderates proposed that the power)
should be handed to the civilians, preferably to the RPP, as!
soon as possible; the Radicals supported the view to hold the,
power in the hands of Military for at least four more yearsj
(Ahmad, 1977, p.165). This deep division led to the|
I I
deterioration of relations in the Committee. Consensus was
finally established only after the purge of 14 radicals in
.November (Weiker, 1963, pp.131-36). This action also relaxed
;the bourgeoisie which felt threatened by collectivist
i
jradicalism (Ahmad, 1977, p.168).
- _ _
The internal structure of the NUC during 1960 and 1961
reflected the fact that the Army lacked a straightforward and
clear-cut economic program from the start. In other words,
the Army did not intervene with a pre-determined strategy
that would be implemented after the take-over. The new
project evolved after the take-over through the influences of
various factors.
The 1960 coup actually created a political vacuum in
politics. This provided an early opportunity for all
political parties in the urban coalition to influence the
project according to the interests they represent in thej
absence of a hegemonic class during the early 1960s. The
contradictory economic policies of the NUC, the political and
ideological battles behind the establishment of the DPT, and
several Coalition governments can be all linked to this
political vacuum and the absence of a hegemonic power in the
early 1960s.
The NUC inherited a bankrupt economy in 1960. A bic
foreign debt, close to $ 1 billion, depleted foreign exchange
reserves. A very low level of exports around $ 300 million
(annually) and a creeping inflation had left little room for
economic manoeuvre (Ahmad, 1977, pp.268-69). Under these
circumstances, the NUC's concern was not a long-term rational
development strategy. It aimed rather at implementing short-
279,
term policies and measures to alleviate the current economic
|crisis. !
i !
The initial concern of the NUC was the unjust tax system!
of the DP regime. The negligible amount of reported profitsj
{by many businesses led to radical economic measures,
jimmediately after the coup. Bank operations were suspended
and taken under the supervision of the NUC (Karpat, 1973,
,p.235; Rozaliyev, 1979, p.3; Yerasimos, 1976, p.1421). As a
result of a determined, contractionary monetary policy, the!
i
interest rate of the Central Bank was raised from 6% to 9%.|
f J
i
Central Bank credits declined from 13.1 billion TL to 8.71
-billion TL and their share in total credits dropped from 48 % j
to 13% (Yerasimos, 1976, p. 1421). !
!
On June 24, 1960, the NUC reorganized the TOB (Chambers!
1 I
of Commerce and Industry) with the intention of increasing,
I small capital's participation in their administrationj
[(Rozaliyev, 1979, pp.3-4). The new government also pursued a!
• '
I contractionary fiscal policy by cutting down many public;
I i
iprojects, such as two sugar and three cement factories
(Rozaliyev, 1979, p.5). In June, the government announced a
. i
list of 15 most urgent issues that included nine economic;
! ;
.matters, notably, a fiscal reform and the establishment of a-
planning board for investments (Weiker, 1963, p.21). While
*
[decreasing credits and expenditures to halt the inflation,
i
!
ithe NUC was also concerned to restore the private sector's;
i
confidence. In this direction, the government eliminated
credit ceilings for exports and investments and in September
i
abolished the National Defence Law of 195 6 which authorized
i
the government to control the prices and supplies of goods
f i
| (Ahmad, 1977, p.269; Rozaliyev, 1979, p.6). On the otherj
lhand, with its emphasis on social justice, the government!
changed the tax law in December which required wealth
[declarations. This led to a panic in the business world thatj
iperceived this move as a prelude to nationalism and socialism!
! i
' I
(Karpat, 1973, p.235-36). Moreover, in January 1961, the
government passed a draft for a new tax law which would be
jeffective by January 1962 and would increase the corporationj
i >
|and income taxes for higher income brackets significantly. Atj
I
!the same time, another law was passed that increased land
I
'taxes by 10 and property taxes by two to six times (Karpat,
1973, p.253; Rozaliyev, 1979, pp. 28-29). These tax laws led
jto large protests from the bourgeoisie and its organizations
i
(Rozaliyev, 1979, p.30).
i
The NUC's other characteristic was its initial!
; I
determination to pass a new land reform, a priority on the-
jdemand list of the Istanbul bourgeoisie (Rozaliyev, 1979,
pp.30-31). In general, government policies were against the
interests of rural producers, as is evident in the lower!
i |
agricultural credits and subsidies to support crop prices:
(Yerasimos, 1976, pp. 1424). As a result of these!
'discouraging policies, the index of agricultural production
'declined from 157.8 in 1960 to 152.8 in 1961— 1948=1001
I
1 I
i
(Hershlag, 1968, p.342). However, despite its strong ambition:
to implement a land reform, the NUC could not accomplish this!
I I
task. The political strength of rural producers prevented a;
!land reform (Rozaliyev, 1979, pp.8-18).
Finally, the NUC1s approach to foreign capital was quite
I 1
positive. This attitude, in turn was rewarded by increased
foreign aid from the US, the West and internationalj
I I
[organizations (Rozaliyev, 1979, pp.19-21). Most notably,;
j 1
'the OEEC and the IMF approved the construction of the Ereglii
I
'steel factory, which is one of the biggest industrial j
Icomplexes in Turkey. Later, a credit for $160 m. was released
I
I
iby the AID (Yerasimos, 1976, p.1422). ,
! , i
Reviewing these policies, as noted formerly, we do not;
jobserve any manifestation of a new development strategy.;
[These rather appear to be ad hoc short-term measures toi
i i
recover from the economic crisis and improve social justice.j
t j
jOn the other hand, while the military did not provide a new,
(strategy, it certainly opened the way to it: first, by
toppling down the DP government; and second, by staying
;neutral basically under the control of the moderates so that
|
[the radicals1 nationalist aspirations were eradicated.
One of the most important contributions of this periodj
j to the development project of the 1960s and 1970s was the;
' i
1 282
j
establishment of the DPT. The DPT was actually one of the two
^major institutional innovations of the 1960 coup (Keyder,
;1979, pp.147-48). The second one, the new constitution1sj
rights on collective bargaining and unionization, have'
I '
■already been discussed in the last chapter.
j Re-emergence of the importance of planning in Turkey
jgoes back to the late 1950s. There are both internal and
j
i external factors behind this development. Internally, ast
l |
mentioned in earlier chapters, the irrational nature of the!
jDP's project during the late 1950s created grave discontent!
!
among the ranks of the industrial bourgeoisie and
!intelligentsia. Industrial capital had been complaining about
i
scant investment opportunities, absence of a tax reform,;
i
scarce bank credits and foreign exchange, and overall the,
i
chaotic nature of economic conditions. Before the 1960 coup,
|Dutch planning expert Dr. Koopman in his visit to Turkey hadj
i
i
!found out that private industrial capital was eager for!
1
iplanning (Milor, 1988, pp.11-12). Consequently, later the DPT!
|
iwas welcomed by the Istanbul bourgeoisie (Keyder, 19 79,
p.27). The industrial bourgeoisie's and intelligentsia's
I I
'approach to an alternative accumulation project was developed
iaround the Forum, a publication serving a similar purpose as'
! :
|Kadro served during the 1930s. Starting from 1957, the Forum
'discussed planning as necessary medicine to cure Turkey's1
[
economic ills (Kiigiik, 1980; Savran, 1987, p. 139). In the|
: i
i J
283
meantime, opposition parties were also moving in the
i
direction of planning. RPP ranks began to discuss planning
issues openly (Sonmez, 1967, pp. 31-33). The Freedom Party
moved further by preparing a draft plan. The link betweenj
this party and Forum was very close (Kligiik, 1980, pp. 104-5).
i On the other hand, worrying about increasing foreigni
! I
: debt and deepening crisis, foreign creditors and some]
international organizations started to put pressure on the1
I
|DP for a planned economy. The OEEC, beginning from 1957,;
pushed for a more planned channeling of investments. After
the Paris negotiations with the IMF and US authorities, the
I0EEC recommended the coordination of investments within thej
! i
framework of a development program (Sonmez, 1967, p.32).
Under these pressures, the DP set up a Ministerial
Coordination Board to assist the government in deciding on
jthe investment projects to be carried out in the public
(sector (Sonmez, 1967, p.32). Then, in April 1960, Dutch
(planning expert Dr. Tinbergen was invited to Turkey for the
^preparation of a plan. However, he did not receive any
! t
{serious help from the government, and public opinion was kept
totally ignorant of these preparations (Milor, 1988, pp.10-
11; Torun, 1967, pp.46-7).
After the military take-over in May, the priority of
planning drastically changed. The NUC, under the influence,
! !
jof the intelligentsia, moved swiftly towards the
; establishment of the DPT. Three alternative formulations!
i f
jcompeted for the DPT's establishment Law. First was one,
• !
'prepared by Dr. Tinbergen and Dr. Koopman. They recommendedj
I
;an 'indicative' planning based on selective incentives forj
I I
jthe private sector while the DPT retained a veto authority
lover investment projects of the SEEs. They also emphasized!
I '
jthe role of technocrats and experts in the formulation of thej
I state's industrial policy that would be managed by the
Central Planning Bureau (Milor, 1988, pp.13-4; Torun, 1967,(
i
ipp.48-50). !
i
! A second bill proposed by Mr. Inan, a cabinet member of;
: i
the government, downgraded the role of planning experts in!
;the planning agency. Its emphasis was to convey the,
i
1 i
coordination work to ad hoc, temporary and specialized;
committees dominated by the representatives of the private;
i
I sector. The plan's role for the private sector had to be!
■ |
ilimited in ensuring the functioning of the market economy
j(Milor, 1988, pp.14-5; Torun, 1967, pp. 50-54). The third!
i
jbill was prepared by Colonel Orel under the influence of Dr.
1 .
; Tinbergen. It added two new elements, a High Planning Council
j(HPC) and an Economic Council that would embody all interest;
I I
|and pressure groups. On Orel's bill was approved after the
!Economic Council was deleted and the number of technocrats in
jthe HPC was decreased (Milor, 1988, pp.15-6; Torun, 1967, j
I
pp.58-9). •
j 285
| The DPT was established on September 30, 1960 by Law
!
jno. 91 and the principle of a planned economy was then
included in the 1961 Constitution, in Articles 41 and 129
i(Ahmad, 1977, pp.269-70; Hale, 1981, pp.141-42). The most1
'important legacy of the 1960 transformation was this new
■Constitution that laid the foundations for institutions to
iprotect democratic freedoms and to regulate the capitalist
! I
1 . '
! competitive economy (Keyder, 1979, p.26). j
i
| At this early stage, the aspirations of planners were;
(to design and manage a strategy of rapid industrialization,
j
!and economic growth insulated from the influences of class
interests working against this strategy. The target was the
! establishment of a developmental state that would act for the!
I 1
interests of 1 capital-in-general1 rather than for the:
L ' I
| interests of particular or individual capitals while'
implementing its own industrial strategy (Milor, 1988, p.7). :
However, the DPT could not fulfill these earlier
expectations. It could not carry out its technocratic!
! function of indicative planning as was envisioned in the!
11960-61 period. Its later evolution was highly influenced by
! industrial capital and political parties. Instead of
coordinating investments centrally, the DPT's main function
turned out to be the allocation of subsidized credits and
scarce foreign exchange. In other words, it became a
: political allocation institution wherein scarce resourcesj
were conveyed to industrial capital (Keyder, 1987, p.148).,
I
: It is useful to discuss some of the developments which
! I
jchanged the evolution of the DPT drastically following the
(November 1961 elections.
I
Starting from the 1961 election campaign, the new
I
I
political parties of the Right that were fighting to inherit1
the popular support of the DP began to sabotage the principlej
of planning. The issue of planning became a focal point ini
!
Turkish politics. The preparation of the First Five Year Plan!
: (FFYP) for the 1963-68 period resumed in the Summer of 1961.1
,THe initial meetings between the planners and military
jbureaucrats took into consideration both parties1
(preferences. Planners emphasized measures like taxation,
i . I
! reforms and reorganization of the SEEs to improve;
| i
productivity and efficiency. Military bureaucrats put morel
I
weight on distributional issues, such as social justice and
full employment (Milor, 1988, pp.17-18). I
i
; On June 29, 1961, the Council of Ministers of the NUc!
! i
! i
government approved the document called 'The Objectives and,
i
Strategy of the Plan1 (Sonmez, 1967, p.39). Industrial,
!
capital became immediately uneasy over some of these:
!
developments. Business organizations were expecting two
things from planning: first, the prevention of SEEs1
penetration to the areas where the private sector was
investing; second, an array of state subsidies (Milor, 1988,
287
pp.16-17). Businessmen argued that the first Plan, put more
weight on the public sector, which would be responsible for
60% of the total investments. Moreover, they complained that!
they had not been consulted in the preparation of the Plan.
j
In general, industrial capital was still under the paranoia
j
j of the bureaucratic domination of the economy during the
i |
I 1930s and 1940s (Ahmad, 1977, pp.271-73). However, the
J political regimes of the 1930s and the 1960s were completely
I different and the Plan was now under the control of an
! elected government and parliament. i
The 1961 elections did not yield a majority government]
: I
, The RPP, which was fully committed to planning, tax reform
and social justice, failed to win the elections and ended up
making compromises to its coalition partners hostile to
planning (Ahmad, 1977, p.273). The legislature was divided on
i
| planning and centralization of the economy, tax and land
I 1
j reforms, and social justice. The coalition government formed
k |
in November could not solve these deep differences. Despite
many concessions in favor of private capital like the
i
I
! revision of the tax reform, the JP was never satisfied with
i
i
the dominant statist tendency of Mr. Inonii's Coalition
i
government (Karpat, 1973, p.253). The DPT was at the center
iof these disagreements.
I |
The fundamental differences between planners and
, i
| politicians representing private sector interests became
i !
i
[
^transparent with the final format of the 'Objectives of the>
jStrategy' document of the FFYP which had been approved before
jthe 1961 elections. First, under the Coalition government,J
jthe 'Agricultural Reform' proposed in the draft Plan was not
I
(even discussed. Planners' efforts to improve productivity in
1
jagriculture through imposing a maximum limit on land holdings
I i
land encouraging agricultural cooperatives were rejected by
i
ithe governmental members of the HPC (Avcioglu, 1969, p.500;'
! Milor, 1988, pp.20-21; Sonmez, 1967, p.41). Second, the HPC;
i
I
;also deleted the proposal of a SEE reorganization reform that
Iwould restructure SEEs under a central body like a holding
corporation. Particularly, planners were interested in thei
jelimination of indiscriminate allocation of state subsidies
! i
jon the basis of favoritism and a new pricing policy that,
I ;
'would be based on market prices (Avcioglu, 1969, p.500;
jMilor, 1988, pp.22; Sonmez, 1967, p.41). Finally, planners!
and the government disagreed on the method of financing the
proposed annual growth rate of 7% for the 1963-67 period. The
'government rejected the planners' proposal for land taxationj
based on British economist Dr. Kaldor (Avcioglu, 1969, p.500;i
■Milor, 1988, pp.23; Sonmez, 1967, p.41-43). The lobby of big1
1 I
ilandowners was too powerful by that time for such a reform toj
! i
I !
jbe enacted. Instead the government preferred to incorporate1
jthe agricultural sector into the income tax system while!
2 8 sH
granting large exemptions for small and medium plots of landj
I I
’ (Ahmad, 1977, p.274). !
i . . !
In the meantime, the first Coalition government
collapsed as a result of these disagreements around economicj
i
: policy. The new Coalition government was formed in Summer
1962. The economic program of the new government abandoned
i
many statist measures in favor of the private sector (Karpat,
i ;
11973, pp. 258-60). The role of the state was restricted to1
i 1
'encouraging private investments and investing in projectsj
Ithat the private capital can not undertake (Ahmad, 1977,j
i
!
pp.263-74). j
;
j When the government accepted the 7% rate of growth while j
jrejecting the means necessary to achieve this target because
of political pressures, planners resigned collectively, in
October, 1962 (Milor, 1988, p.24; Sonmez, 1967, p.43). The!
| i
iresignation of planners following the collapse of the firstj
Coalition government was not a coincidence. This resignation'
i
imay be considered as the turning point for the Turkish
planning experience (Tiizlin, 1981, pp.9-10).
I
Starting from late 1962, the DPT had been reduced to a!
I
bureau which planned public investments and supported pnvatej
|capital through credit and subsidy schemes under the closei
1 i
control of the government. The bourgeoisie consistently]
worked hard to transform the DPT according to its own needsj
I
with an increasing degree of success. This is evident in the'
! 29oj
I
comparison of the First and Second Plans. The FFYP recognized
i
,the state as the leader of the industrialization and allowed
i
state production in new branches of the industry. THe SFYP,
which was prepared by the JP government, was purely
! |
j indicative for the private sector and designed to provide
i !
I this sector's leadership in the manufacturing industry over
! 1
I the long-run through the support of the state (Hale, 1981,;
I
pp.142-43). Similarly, while the FFYP called for the
I
redistribution of estates related to the sizes of land
holdings, the SFYP did not mention the distribution of land!
i
* from large land owners to landless farmers (Hale, 1981,
i !
ip.144). j
I |
| This brief period in the beginning of the 1960s is an
I . !
;exceptional time when the DPT enjoyed relative autonomy. This
!
! relative autonomy was attained as a result of certain
i I
developments during the 1960 transformation. First, as
mentioned earlier, the collapse of the DP government, based!
,on rural interests at a time when the industrial capital has
1 not yet achieved a dominant role in society, created a vacuum
in the hegemonic bloc. Second, the idea of planning and a
i
developmental state was quite powerful in the late 1950s and
jearly 1960s (Saylan, 1981, p.196). Third, the bureaucracy and
I |
1 the RPP, both supporters of planning, had the upper hand in
influencing the military government after the 1960 coup. One
i
I ~ ~ 291 :
|may even argue that, for the bureaucracy, planning was a
great opportunity to regain its power and status in society
(Kepenek, 1986, p.152). Finally, planning was also supported
1
I '
by the US and Western organizations, as noted before)
i !
;(Avcioglu, 1969, p.499). ’
i The early planners attempted to execute an autonomousJ
industrial strategy independent of special interests underJ
!
;this favorable climate. They sought a corporatist model where;
private capital would follow the plans 1 investment priorities
in return for fiscal and monetary incentives while SEE:
[investments would serve to fill the investment gap (Milor,;
i
: t
11988, p.25). The project failed to be realized rapidly)
I i
[because of industrial capital's different expectations and1
I
perceptions and the political power of rural interests. This
J
^strategy lacked an effective leadership while relying on a
disapproving industrial capital. Industrial capital preferredj
|to transform the nature of planning to make it consistent
with the current balance of political forces in Turkeyj
(Milor, 1988, p.26). In the next section, I study how thisj
development took place after the mid 1960s.
I
1
i
I
i
(IS)
The Political Economy of Import Substitution
i
I
In the development literature, 'Import Substitution'1
is often conceptualized as a distinctive development
I strategy, as discussed in chapter III. In this study, I
prefer to conceptualize it as one of the components of ari
i
effective accumulation project. This makes more sense within
the context of this study since we observe IS as a
i
icharacteristic of different strategies as during the 1930s,j
! !
jand 1950s as well as 1960s and 1970s. However, the
1 characteristics and forms of IS are historically specific and
I
show significant variances among different projects and.
i
periods. Then the real task is to analyze what forms of IS
' |
|take place and how these forms evolve over time as a result;
i of economic and social dynamics. In this perspective, the
! i
I accumulation project of the 1960s and 1970s has a strong IS
; !
I component in it. However, it is conceptualized here as a !
i I
I strategy under the leadership of domestic market-oriented
i
'industrial capital. !
As elaborated in chapter VI, during the transition from
the 1950s to the 1960s, commercial capital, particularly
!import capital, transformed into industrial capital via joint
i
j ventures with foreign capital in the production of formerly
imported consumer goods (Alexander, 1960; Gulalp, 1980,
I
pp.50-51; dncii, 1980). Industrial capital had already gained
enough power to influence the JP by the mid 1960s. In this
section, I analyze the political and economic rationale
j I
I behind the mode of industrialization of this period. I
i
As discussed earlier in this chapter, after the 1960
coup, the urban coalition — industrial capital, bureaucracy!
1
and intelligentsia— and a military friendly to their
interests were the apparent victors over the rural majority.
The adaptation of an IS approach to the new strategy took
!
place as a result of its peculiarity in matching the!
interests of all these groups as well as its optimality for!
a rational project given the 1960s' economic conditions. i
First, burgeoning manufacturing capital strongly
‘ j
supported an IS industrialization perceived as a golden
opportunity to acquire an unrestricted and protected accessj
to the expanding domestic market. TOB (The Union of Chambers!
I
of Commerce, Industry and Commodity Exchanges) threw its
continuous support to IS until 1980 (Barkey, 1988, pp.80-1).
Second, the intelligentsia, influenced by a strong
developmentalist ideology (Keyder, 1987, p.146) and organized
around the journal Forum, promoted IS as an ideal mode of
industrialization for the nation. Finally, deeply frustrated
and ignored during the DP era, the bureaucracy perceived IS
industrialization as a means to strengthen its power while
reducing dependence on the international system, a highly
regarded aspiration of the bureaucracy and the intelligentsia
(Barkey, 1988, pp.81-2).
I
j The development strategy of this period with its heavy^
! emphasis on IS was supported by all governments during two1
2 94|
!
Jdecades. Behind this support, we find a strong economic
irationale for this project. The immediate rationale behind IS;
I !
|was the desire to reach a balance of payments equilibrium*
jthrough decreasing foreign exchange requirements by:
substituting imports with domestic production (Kepenek, 1986,!
p.158). This was also compatible with the rationality of thej
new project which relied on industrial capital to generate'
j
the surplus revenue necessary for the reproduction ofj
; j
(society. I
This rationale was fully spelled out in development
plans. The FFYP openly stated that newly set-up manufacturing
I
industries would be protected for an initial period1
I
i
(according to an infant industry argument). Imports of goodsj
I
that could be produced domestically would be barred. To raise!
i
jthe share of locally produced components in the assembly
I i
! industries, certain legal regulations would be implemented
j
j(DPT, 1963, pp.183-84, pp.470-71). The DPT had projected a
i
$40 m. import savings as a result of IS in 1963 and this was!
expected to increase to $166 m. — over 23% of all imports— :
I ;
jby 1967 (DPT, 1963, p.468). In later plans, IS was expected'
i I
Ito evolve m stages. These plans promoted the encouragement
I :
Iof IS in chemical, metallurgical, machinery, iron and steel,,
I
I
Itransportation vehicles and electronic industries
[(Barkey, 1988, pp.69-71; Seyidoglu, 1984, pp.25-7). Hence, |
IS industrialization was perceived as effective at an early
295'
I
I
stage in fostering consumer goods production. It was later
I :
jcomprehended that to reduce its foreign dependence, a second
I
stage of IS was needed to encourage investment goods (Barkey,
(1988, pp.78-9).
Behind this immediate and publicized rationale, however,
we observe a much more substantial rationale that links IS to
I
a rational accumulation project in the early 1960s. IS
i !
|industrialization had the potential of generating a
|
continuous flow of surplus revenue under the leadership of
,iindustrial capital by expanding the production of previously!
t |
jimported goods. By protecting infant industries, thb
1 I
industrial base would amplify, and its spillover effects and
linkages would provide for the development of new industries.!
Moreover, IS had been already working effectively since the
mid 1950s in promoting an industrialization process in the
jprivate sector. The consumer goods1 share in total imports
I )
[had declined from 25% to 5.4% between 1953 and 1963 (Barkey,j
1 !
1988, p.75). I
The immediate economic rationale of saving foreigrj
|exchange is widely accepted as the main reason behind the
jadoption of IS. However, its peculiarity of becoming an
I integral part of a feasible accumulation project led by
j i
!industrial capital provided its implementation on an extended
1 scale. Moreover, during its implementation, the privileges
|
! and rents created by IS made it even more desirable for
I 296]
i
industrial capital. Consequently, industrial capital did not]
have any incentive to act against IS even after the clear
symptoms of a deepening crisis were visible in the 1970s.
I
From the beginning, the new development strategy under]
i 1
Ithe leadership of industrial capital was built on a populist
i I
{structure that created common interests of different classes]
; i
in society. These interests depended on the project’s success]
I
! in creating a growing pie by the process of domestic-oriented]
(industrial production.
! Industrial capital was the main beneficiary. As further
! . 1
elaborated later m this chapter, industrial capital not only
' i
'enjoyed great state support in terms of subsidies, tax breaks
i i
i
and cheap credits, but also derived significant IS rents
. . i
thank to the protection of the local economy. Industrialists
I mainly derived these protection rents by their ability to,
!acquire import permits from the state which allowed them to;
i
import their inputs at prices below their market values
(Eralp, 1981, pp.621-22). These subsidies and protection
rents also created an oligopolistic industrial structure in
|Turkey that operated on high profit margins derived from higli
final prices (See, Boratav, 1983; Keyder, 1984; Pamuk, 1984).
j These high profit rates, in turn, made it possible for
;other classes organized around industrial production to share
i i
]the benefits generated by the project. As discussed in the
previous chapter, unionized skilled labor enjoyed higher wage
I rates during this period. Both high profit rates and the need!
for higher wages for workers to consume more goods in the
'market place led to this outcome (See Boratav, 1983; 1987,
!
[chapter 7).
I
I
The accumulation project did not alienate international1
capital either. IS industrialization, unlike an autarkic!
i !
alternative, does not exclude international capital from the!
I
.
jproject. First, licencing agreements and joint ventures openj
[the door to foreign capital for investing in the protected;
I
market. This is a privilege for the individual capitals that;
i
1 i
|avoid the direct competition of other foreign capital units.
i . '
I Second, IS necessitated importing of technology and
I ;
jinvestment goods as well as primary inputs and intermediary
! goods for the industry to such a degree that the absolute;
I I
l
Jvolume of imports had increased as a result of the growth in
!
1 the manufacturing output.
I Hence, IS was not a rebellion against international
!capital. It was rather a program that enabled a closer
integration of local capital with its foreign counterpart
‘ particularly in a post-war world economic order where the
j relocation of standard technology industries to the periphery
jwas desirable to international capital (Keyder, 1987, pp.151-
I
152). We also observe the approval of the international
! j
|organizations, such as OECD, of this project since the early
I !
1960s ( Giilalp, 1983,p.52).
Finally, under the new project, the importance of the
« !
istate's role in the development process was enhanced since;
i
the bureaucrats were called to organize and administer thej
: i
economy, particularly the allocation of scarce foreign
exchange resources. The formerly mentioned import permits and
various investment subsidies and credits obtained from
bureaucrats augmented their power significantly (Keyder,
l
1988, pp.366-67).
This project, however, heavily relied on the1
availability of foreign exchange to retain its optimality.
, Since industrial production, in this model, is basically the
transformation of imported inputs into domestic outputs;
protected from foreign competition, there is a direct'
correlation between the growth of the manufacturing output
and the demand for imports. Consequently, the rate of capital;
I
accumulation and the pace of the industrialization process asj
iwell as the harmony of the class alliances depending on the
i
surplus revenue generated by the project was limited by the
iceiling of the importing capacity (Keyder, 1984, p.15; 1987,
p.165). Moreover, the availability of foreign exchange was
also crucial for the state since the allocation of this
\
scarce resource was possibly the most important state
] function in the project, which also gave some degree of|
i
I . |
■instrumental autonomy to bureaucrats (Keyder, 1984, p.29;|
i
: 1987, p.171).
The Turkish experience clearly reveals the fact that iri
I I
jthe IS industrialization process, foreign exchange
jrequirements of the economy had increased significantly.
|While the imports-GNP ratio was 6.7% on average between 1959j
'and 1962, it increased to an average 10.9% between 1971 and
1977 (Giilalp, 1983, p.152; Pamuk, 1984, p.53). This ratio wasj
I
as high as 12.9% in 1975 and then dropped to 8% during the;
j foreign exchange bottleneck of 1978 and 1979 (Giilalp, 1983, j
Ip.149). Between 1970 and 1977, imports increased by an1
!
average 12.6% and the elasticity of imports to GNP was 1.72
I
i
- meaning that 1% increase in GNP yields 1.72% increase in
imports (Akat, 1984, p.57).
Hence, IS ended up in negating its purpose of
I
implementation, namely the balance of payments equilibrium
through foreign exchange savings. Many industrial plants
assembling imported inputs demanded an increasing amount of
foreign exchange. For example, by 1979, the Automotive
Industrialists Association estimated that, the automotive
industry required at least an annual flow of $300 m. The
I
official data shows this figure to be around $700 m., which
corresponds to over 20% of the non-oil imports of Turkey
(Barkey, 1988, p.155). Overall, IS industrialization
i I
j increased import dependency for consumer, intermediate and.
:investment goods sectors (Barkey, 1988, p.110).
The foreign exchange policies of the government during
i
this period contributed to this outcome extensively. Turkey
■was no exception to the common practice of determining!
[overvalued local currency against foreign currencies. Whilej
i
jthe TL/$ parity rose from 9 to 47 between 1963 and 1980, the1
jwPI increased from 100 to 2550.6 during this period (Giilalp,!
i !
1983, p.151). The rate of overvaluation was particularly!
i
significant during the 1970s when the imports/GNP ratio rose.
|at a higher rate. With the exception of 1970-1971, when TL;
k
|was devalued by 66%, between 1967 and mid 19 79 TL stayed asi
f I
1 I
[high as 30% overvalued against US $ (Barkey, 1988, p.112). !
i It needs no elaboration that an overvalued TL provided.
! j
la highly privileged environment for industrial capital (Seei
I
[Barkey, 1988, pp.87-9; Keyder, 1984, pp.27-8; 1987, pp.171-
j i
1 72; Seyidoglu, 1984, pp.55-6). Since the rate of devaluation'
iof the TL was held significantly below the differential ratej
of inflation between Turkey and its trading partners, prices
of imported inputs stayed cheaper continuously. This
evidently created a great incentive to import these cheap1
! inputs and produce the protected goods locally. This!
i
scenario not only yielded high profit rates, as mentioned
earlier due to a protected oligopolistic market structure,
■but also generated high import premia on the imported item as
! i
idiscussed later. This structure was further enriched by,
i
[additional privileges as subsidies and credits which
I 301|
[altogether served for the project to sustain the
profitability of the industrial capital.
Such a favorable mode of accumulation evidently found
'strong support from the industrial capital (Barkey, 1988, i
jpp.150-52). This support continued as long as foreign!
jexchange needed by the project was available. Given the high
!
[import dependency rates of the manufacturing sector for
!
jintermediary and investment goods, a secure and adequate flow!
iof foreign exchange was the key factor for the success of the;
i • !
iproject.
i While the project relied heavily on foreign exchange,,
|
jit failed to have the potential of creating its own hard
>
[currency through exports. During the 1960s and 1970s,
i
jalthough exports of the industrial sector increased
Jcontinuously, their volume stayed significantly lower than
!
industrial imports. Between 1962 and 1977 -beginning of thei
i
jcrisis, while industrial imports rose from $472.4 m. to!
!$4,037 m., industrial exports increased from $70 m. to only!
i i
i $585.8 m (OECD, 1966, pp.63-4; 1981, pp.61-2). With thej
[exception of textiles, which was nearly 60% of industrial
i
exports (OECD, 1981, p.62), industrial capital failed to
generate the necessary foreign exchange by its exports. The
export/production ratios of intermediate and investment goods
also remained at negligible levels. They were merely 2.4% and
I
■2.6%, respectively, in 1980 (Barkey, 1988, pp.108-9). ■
; I
1 !
| The inability of industrial capital to create its ownj
iforeign exchange was the main reason behind the crisis of the
*
project. This meant that foreign exchange had to be providedj
| either by agricultural exports or from external sources via'
!
I foreign aid and loans. The logic of the project also;
I j
conflicted with the requirements of the agricultural sector,
I
'to generate more exports and with international capital to,
I
! extend more credits.
! I
> t
j The overvalued TL was the basic element of the project!
I
that hurt the export sector, primarily agricultural producers1
jwho ended up losing vast sums. Agriculture remained as the;
[primary exporting sector until the 1980s. Although its sharej
l
in total exports dropped from 75% in 1970, even by 1980 it
was nearly 60% (OECD, 1981, p.62). According to a study
! prepared by the ITO (Istanbul Chamber of Commerce), between
i :
'1973 and 1980, private export capital lost 1,472 b. TL, which;
corresponds to $8.7 b.- estimated using a purchasing power'
parity rate. In 1980, the revenue loss of export capital was
! i
|6.4% of that year's GNP (Barkey, 1988, pp.113-15). On the one
i i
;hand, the overvalued TL pegged export prices well above world
prices; on the other hand high profit margins of local'
i
iproduced goods, thanks to protection, gave no incentive to
1 . '
■ industrial capital to re-orient its production from domestic
to foreign markets (Keyder, 1984, p.28; Pamuk, 1984, p.49).
I
I
|Moreover, the whole set of state subsidy schemes primarily
[favored import-substituting industrial capital. In sum, at
i ;
i i
jovervalued TL and lack of state support prevented the
« I
development of a healthy export sector that would generate a
! steady flow of foreign exchange for the project. \
On the other hand, the possibility of getting more
Jforeign aid and credits was depended on the project's ability
to pay back these loans. However, international capital's
! ;
[perception was not in this direction. Particularly, by the;
lend of 1970s, when the foreign exchange crisis was becoming!
much deeper, international organizations started to insist on|
radical reforms which were translated into abolition of the1
|development strategy. In other words, international capital
j i
[refused to extend further credits when the need for these1
jloans became higher during the crisis. Consequently, by the
■ late 1970s, industrial capital also realized that
i
;restructuring of capital was inevitable. I
i ;
j The interesting question is why and how industrial1
i
[capital and the state did not intervene earlier to
! !
!restructure the development strategy? I open this question
in the final section of this chapter when the dynamics of the
i
crisis is discussed. At this point, a brief answer may be*
i
I
given based on the theoretical framework used in this work.i
I Unless there was a severe crisis which would cut down the
profitability of the capital and disrupt the accumulation
'process, neither industrial capital nor the state was
| 304
interested in switching to a new strategy which would also
i
[have to be promoted by an alternative hegemonic capitalj
! i
fraction. None of these conditions were present before the!
i
jlate 19 70s. The economy grew significantly while industrial>
capital enjoyed an easy accumulation path with strong
'support. Moreover, there was no visible alternative*
I
!accumulation project on the agenda for the state to consider.
However, when the foreign exchange crisis, augmented by oil
i 1
'shocks, stopped the economy by 1977, the debate resumed for
( i
the restructuring of capital (which, however, did not
necessarily require a new project). i
I
I
Before the late 1970s, although Turkey usually did not:
i
jenjoy a balance of payments surplus, it managed to secure'
j i
(enough foreign exchange to finance its deficits. A temporary*
; I
iabundance of foreign exchange following the 1970 devaluation
i . . 1
jwas the main reason behind the postponement of the crisis and
j
(the need for a restructuring of capital to the late 1970s.
I i
( ;
jThe average ratio of the trade deficit to the GNP was 2.1% in'
i . >
jthe 1960s. Between 1971 and 1974, this increased to 4.7%; but1
[thanks to growing workers' remittances, soaring trade
deficits still could be financed (Pamuk, 1984, p.63). For
example, in 1973, the trade deficit was $782 m. or 3.5% of:
J
the GNP. However, workers' remittances were $1,183 m., |
I
yielding a $471 m. current balance surplus. Moreover,|
i
together with foreign credits, the overall balance surplus;
jwas $904 m. (OECD, 1974, p.32). Behind this relative1
‘abundance of foreign exchange during the early 1970s, thaJ
j |
|led to the postponement of the crisis, we observe the 1970.
stabilization measures. j
i
1 The 1970 measures were in fact a response to an earlier
|but less dramatic occurrence of the crisis of the IS project.
!By the late 1960s, although the foreign exchange bottleneck
' i
jwas not as severe as in 1958 or 1980, there were widespread
!shortages of imported intermediate goods. The average delay
,in transferring foreign exchanges for imports was 43 weeks1
I
!(Krueger, 1974, pp. 311-12). During the 1968—1970 period,j
! I
j aggregate demand outraced supply capacities under thej
| I
!pressure of government deficit spending that increased from
[ j
1661 m. TL in 1968 to 2,483 m. TL in 1969 (OECD, 1970, p.20).
I Together with expansionary monetary policy and extension of
jagricultural credits, the economy overheated, leading to anj
overvalued exchange rate which increasingly hampered exports1
while encouraging more imports. Under these pressures and a
I
permanent trade deficit, the JP government announced a new.
economic program in August, 1970 that focused on foreign
trade. The TL was devalued by 66.6%. The devaluation was also^
accompanied with other measures that sought to liberalize
imports, restrict monetary expansion, reduce the budget
deficit and promote exports (See, Krueger, 1974, pp. 307-24;j
OECD, 1970, pp. 22-8). j
3 0 6 l
I i
As a result of the 1970 devaluation and new economic
i ,
!program, a positive trend on exports resumed. Exports, which
I
had increased from $353 m. to $5 36 m., or by an average rate
of 4.3% between 1959 and 1969, rose from $588 m. in 1970 toj
$1,532 m. in 1974, by an average rate of 12.7% (DIE, 1983,
ip.355). More critically, workers' remittances from abroad
increased from $273 m. to $1,426 m. between 1970 and 1974
j i
(OECD, 1974, p.32; 1978, p.60). Finally, massive foreign aid,j
j
I a total of $950 m. according to one estimate, was received
i |
{following the international organizations' approval of the
I . i
>1970 devaluation (Schick and Tonak, 1988, p.425). Project
! i
|assistance credits doubled between 1970 and 1973 (OECD, 1974,'
I !
:p.32).
! i
; Hence, the 1970 measures created a favorable balance of
payments performance which postponed the crisis until the end
of the 1970s. After these injections, however, the economy
!relaxed and expansionary policies resumed and the current
project retained its basic structure during the preparation
of the Third Five Year Plan for the period of 1973-1977j
; (Ebiri, 1980, pp.219, 224; Ekzen, 1984, pp.185-86; Giilalp,!
!1980, p.53; 1983, pp.62-3). In the next section, I study the
1 , |
|basic characteristics of the accumulation project which
j remained effective for two decades by focusing on the state —j
I capital relation.
i i
! 307
I I
The Organization of Industrial Capital
i i
j
Until the late 1970s state-capital relations were quite|
harmonious thanks to the nature of the development strategy
iwhich primarily promoted the interests of industrial capital.
« I
■A study of these relations requires a brief history of the1
organizational structure of capital in Turkey. SOB (Chambers
I
of Industry) which were established with the explicit aim ofj
; i
■mediating between the state and industrial capital deserve |
\ \
particular attention.
i
Trade and Industrialists' organizations in Turkey arej
i
i
^established on a local basis rather than on branches of;
f )
.industry. All local chambers of commerce, industry and
'commodity exchanges are incorporated under the TOB (Oncii, :
; j
1980, pp.458-59). The TOB and the local chambers were heavilyi
controlled by the DP during the 1950s in a corporatist;
'structure. During the 1960s and 1970s this corporatist!
structure did not change much and the TOB was closely;
associated with the government (Saybasili, 1976a, pp.126-27).!
.However, during this period, conflicting interests between
I !
industrial and commercial capitals and among the big1
I
metropolitan and small peripheral capitals transformed the
\ \
i
organizational structure of capital as well as its relation*
■ ! i
with the state (Oncii, 1980, pp.458-61). i
308
i
I After 1960, when foreign exchange became the key
i i
.resource under the new accumulation project, distribution of;
i
jthe import licenses that had been granted to the TOB by the
iDP turned out to be the central issue. During the 1960s, the
; SOB allocated the private sector investment good import
; quotas among approved projects. The SOB were also
instrumental in both the preparation and implementation of
I i
[industrialists* quotas in the import regime (Oncii, 1980,|
pp.468-69; Saybasili, 1976b. pp.86-7). The competition among
individual industrialists and between industrialists and;
[importers to be able to obtain a share from import quotas
gave substantial power to the IOC vis a vis its members.!
I I
jMoreover, the state holding a veto power in this allocation'
■mechanism, also had significant leverage against industrial,
^capital. Hence, these power relations around the allocation
of foreign exchange played a crucial role in the
I
■implementation of the project. |
| Since the early 1960s, while the TOB1s role in the!
i • !
'project became more effective because of its clientilistici
links with the governing JP, competition grew among;
industrial and commercial capitals within the Union. The|
< I
jdemands and requirements of industrial capital, now the
jleader of the current development strategy, has been often
i
in conflict with commercial interests whose power wasi
reinforced by its strong links with finance capital andj
large landlords (Bianchi, 1984, pp.251-52). These conflicts
revolved basically around the control over foreign exchange,
and credits. ' ■
i The major concern of industrial capital was the lack of
|representation of their interests inside the TOB. In order’
jto promote their interests by improving the degree of their
representation, industrialists tried both to establish theirj
own organization and to change Law 5570 -which had originally:
iestablished the private sector organizations- during thej
i ,
11960s. However, due to the strong opposition from the TOB and!
commercial capital, which wanted to avoid substantial revenue1
! ;
losses in case of a separation, these efforts failed (Barkey,j
!
11988, pp.134-36). j
I !
The main target of industrial capital was to alter the!
current scheme of distribution of the government-approved'
■ j 1
[import quotas and licenses in the TOB. TOB officials were
i . . .
ilimiting the industrialization process by failing to give
’ • « • • « ■ * *
[sufficient priority to industrial capital (Barkey, 1988,!
' i
p.138; Bianchi, 1984, p.253). A second major cleavage was
i
between industrial capital and the commercial-financialj
capital bloc around the distribution of credits. Industrial
|capital was extremely unhappy with the preference of banksj
for short-term speculative ventures and their unwillingness'
jto create a true capital market. This forced industrial'
!
capital to negotiate a series of direct bank take-overs in
310
order to challenge the strong control of commercial capital
over private credits (Bianchi, 1984, p.254; Oncii, 1980,
pp.471-72).
While the commercial - industrial capital conflict was
growing, another important contradiction blossomed during the
1960s between the small scale and big industrial capitals.
This was actually a reflection of another cleavage between
I
the capital located in Anatolia (peripheral) and Istanbul!
(metropolitan). Between 1963 and 1970, the share of small
scale industrial firms (employing less than 10 workers) in
j
total industrial output dropped from 24.7% to 19.1% (DIE,j
i
1973, p.239; 1983, p.261). Similarly, to show the regional!
disparity, in 1980, out of the 421 largest private industrial
corporations 60% were at Istanbul and over 80% were in the
Marmara and Aegean regions which include the major industrial
centers of Istanbul, Izmir and Izmit (Barkey, 1988, p.143).
This economic conflict between industrial and commercial
capitals was also reflected in the political arena and in thJ
relations between the state and organizations of capital.
During the 1970s, the frustrated small-scale capital of
Anatolia, in an alliance with landlords, abandoned the JI
which was identified with the interests of big industrial
capital. The result was to find refuge in the Democratic and
National Salvation (NSP) parties that emerged in the right of
311
the political spectrum out of these developments (Ahmad,
1981, pp.12-3).
The first challenge to the JP - TOB alliance came from
Mr. Erbakan who became the head of the TOB in 1969. Mr.
Erbakan, who later organized the Islamic fundamentalist NSP,
emerged as a populist and opportunist leader protecting the
interests of Anatolian businesses against metropolitan
industrial capital (Barkey, 1988, pp.139-40; Bianchi, 1984,
pp.255-56).
On the one hand, the leadership of Mr. Erbakan made
industrial capital further discontented with the TOB. Thisj
led to the creation of the TUSIAD (Turkish Industrialists'
and Businessmen's Association) in August 1971 with the
intention of promoting the rapid accumulation of finance
capital under industrial capital's control (Barkey, 1988,
pp.140-41; Bianchi, 1988, pp.268-69). As mentioned later,
during the late 1970s, TUSIAD played a crucial role in the
transition to the new project of the 1980s.
On the other hand, the JP, threatened by Mr. Erbakan's
move, took a hostile stand against the TOB. First, it
succeeded later in removing him from the TOB presidency
(Barkey, 1988, p.145). Then, the TOB's legal authority over
foreign trade transferred to the Ministry of Commerce, a
move which weakened the TOB significantly (Bianchi, 1984,
p.256). These developments exacerbated the commercial-
312
industrial capitals' antagonisms even further. Meanwhile, the
TOB lost much of its prestige. Its role as the predominant
spokesman for business ended in the early 1970s (Bianchi,
1984, p.259). The TOB stayed on as a strong organization, but
lost its grip over the big industrial capital, which
established its own organization. Consequently, the TOB's
role in the project vis a vis the state diminished greatly.
The TOB became a more and more politicized organization which
helped the promotion of commercial interests via the
coalition partners of the JP in the government. Accordingly,
the reflections of these conflicts continued to be effective
during the National Front governments of the 1970s where NSPj
remained as a coalition partner. Moreover, Mr. Erbakan
i
persistently challenged industrial capital, using the
t
Ministry of Industry - which stayed under NSP1s control-;
against the interests of Istanbul industrialists (Barkey,
1988, pp.194-95).
Until the late 1970s, when the economic crisis deepened,
industrial capital continued to dominate the accumulation
project through its close ties with the JP. Its main!
representative was the TUSIAD during this period. In the next
section, I study the mechanisms of this project to show how
the particular state policies and programs served the
interests of industrial capital.
313
The Mechanisms of the Accumulation Project
In my earlier analysis of the political economy of the
accumulation project of the 1960s and 1970s, I pointed out
some of the mechanisms which contributed to the transfer of
the social surplus to industrial capital from other
segments of the society as well as the tools that enabled
industrial capital to augment its profitability directly. In!
this section, I elaborate those mechanisms which are
controlled directly or indirectly by the state. I focus on
four major areas: first, the entire set of subsidy schemes
including investment and export subsidies and foreign
investment incentives; second, credit policies; third,
foreign trade and foreign exchange policies; finally, thej
I
role of the SEEs, particularly in providing subsidized inputs
and participating joint ventures with the private industrial
capital.
Subsidy Schemes
Measures to Encourage Investments
Starting from 1963, with the implementation of five yearj
plans, the state has adopted a series of measures to1
314
encourage private industrial investments. The main motivation
behind the encouragement of investments was to enhance the
profitability and reduce the risks of investments in desired
areas. These investments were determined in the General
Incentives Lists (GIL) of the annual programs. The GIL lists
14 activities in agriculture and 168 activities in industry
while investments in the less developed regions receive
additional benefits (World Bank, 1982, p.199). The state is
required to introduce certain measures for the realization of
these investments. If left to the market mechanism, these
investments would not be undertaken given profitability
conditions (Saybasili, 1986, p.95).
In 1963, a tax rebate scheme on investments was
introduced by Law 202 which encouraged investments -financed
by the equity capital- by giving investors a rebate on theirj
I
income and corporate taxes. The rates of these rebatesj
changed several times. In general, 30% of total investments
benefitted from the exemption and this rate was 50% for
investments made in less developed regions (Tuncer, 1978,
pp.67-8; DPT, 1982, pp. 17-8). In 1963, a system of
accelerated depreciation was also introduced which allowed
firms to subtract the previous year1s depreciation in order
to reach the amount upon which the current year's
depreciation was to be estimated (Tuncer, 1978, p.65; Uludag,
1986, p.271).
315
In 1964, another important piece of legislation -Law
474 that became Law 933 later- empowered the Council of
Ministers to grant complete or partial exemption from customs
duties, to allow installments up to five years for the
payments of these duties, and to make changes in the tariff
rates. Exemptions were only given to those investment goods
that are not produced domestically. Until 1973, exemptions
were made for raw materials as well but this practice wasj
terminated (Seyidoglu, 1984, pp.45-6; Tuncer, 1978, pp.69-
71). Between 1968 and 1971, these exemptions for import
duties decreased investment costs by 15.5% , 33.5% and 19% in
consumer, intermediary and investment goods industries
respectively. The ratios of import duties refunded to the CIF
values of imports were incredibly high: 69.7%, 51.9% and
46.3% for these three sectors (Alpar, 1974, pp.90-1).
In 1967, the government, realizing the urgent need for
a more coordinated implementation unified all encouragement
measures under one law and organization. Law 933 foresaw the
establishment of an 'Office of Development and Encouragement
of Investments and Exports1 which reduced the time to obtain
encouragement certificates significantly (Tuncer, 1978, p.66;
Uludag, 1986, p.272).
In 1969, the selective allocation of foreign exchange
to desired sectors and investment projects was introduced
(Uludag, 1986, p.273). In 1970, by government decree, a
316
selective credit fund was founded that reduced the interest
paid on new investment credits (Hale, 1981, p.201; Tuncer,
1978, pp.73-4). The interest rates for investment credits
were significantly lower than the market rates, as mentioned
later. For example, in 1978, while the interest on medium
term credits was 16%, the rate on investment credits was 5%.
In 1979 these rates were increased to 20 and 8%, respectively
(TUSIAD, 1979, pp.180-84).
Overall, the impact of these subsidies on the
realization of investments was significant. Taking all these
exemptions together, it has been estimated that, for
instance, a wood processing factory would cost 25% less to
an investor (Hale, 1981, p.201). A recent study also showed
that, in the investment stage, the contribution of these
subsidies to total investment cost was 76.5% and 108.6% for
developed and less-developed regions (Uludag, 1986, pp.281,
284). In other words, for example, an investment project
would cost 76.5% more in the investment stage at Istanbul if
no subsidy was granted.
Between 1968 and 1980, in 1963 prices, a total of 132.6
b. TL worth of investment encouragement certificates were
granted to industrial capital, which is 81% of the total.
While 1,087 m. TL (in 1963 prices) worth of investments
received certificates in 1968, this figure jumped to 12,405
m. TL in 1972 and, after reaching a record level of 35,077 m.
317
TL in 1977, it dropped to 6,000 m. TL during the crisis prone
years of 1979 and 1980 (Saybasili, 1986, p.98). Most of the
certificates were granted for the projects in the most
developed Istanbul, Ankara and Izmir regions. For example,
between 1978 and 1980, out of a total 1735 certificates, only
120 certificates were given to investments undertaken in the
most underdeveloped Eastern and South-Eastern regions while
70% of the certificates were given to the areas mentioned
above (DPT, 1982, p.43).
Measures to Encourage Exports
i
i
1
While primary emphasis was given to the encouragement1
of industrial investments during the 1960s and 1970s, a
persistent effort was also made to promote industrial!
exports. However, in general, the export promotion policies
remained peripheral. The impact of these measures were also
limited because of foreign exchange policies that generated
a highly overvalued TL as discussed later.
A series of measures were taken by the state to providej
incentives for industrial exports, such as tax rebates,
access to preferential export credits, foreign exchange1
. i
allocation and retention schemes and temporary import permits
I
(World Bank, 1982, pp.56-7). The most important measure in'
this area is the system of tax rebates on exports which was1
318
initiated by Law 261 in 1963 (Tuncer, 1978, p.75). The main
I
target of this scheme was to reimburse exporters for indirect
taxes paid at the various stages of production. The tax
rebate rates varied between 10 and 40% in the 1970s and
dropped to the 5 to 15% range in 1979 (World Bank, 1982,
pp.58-9).
In 1963 prices, in 1964, 2.8% of total exports of
3,620.9 m. TL received tax rebates for a total of 11.9 m.
These figures were 27%, 4,398.4 m. TL, 199.1 m. TL in 1970
and 47%, 7,167 m. TL, 726 m. TL in 1976. 1979 measures,
however, dropped tax rebates and in 1980 only 27% of the
exports received tax rebates for a total of 177.9 m. TL
(Saybasili, 1986, p.101).
Besides this tax rebate scheme, another important
measure to promote exports was the export credits that were
introduced in 1968 (DPT, 1982, pp.131-33). However, despite
provision of credits up to 80 to 90% of the transaction valuej
and terms of repayment of up to 8 to 12 months, the average
share of export credits in total CB credits was only 5.4%
between 1970 and 1980 (World Bank, 1982, p.70). In 1979, the1
effective rate of interest on exports was estimated at 7.1%
against a 24.4% rate applied to general short-term credits
(World Bank, 1982, p.69).
A third measure was a foreign exchange allocation scheme
which guaranteed a priority access to foreign exchange for'
319
eligible exporters. This enabled exporters to import
machinery and equipment whose importation was not otherwise
permitted. In this way $10 m. was allocated in 1970; this
figure rose to $144 m. by 1979 (World Bank, 1982, pp.74-6).
A similar measure, a temporary import regime, also allowed
eligible exporters to import inputs duty free which were
otherwise prohibited. The value of temporary imports was
$16.1 m. in 1980 (World Bank, 77-9).
As emphasized later, these measures designed to promote
exports remained peripheral and secondary to the incentives
given for domestic market oriented, import-substituting
industrial capital. This picture, however, dramatically
j
changed after 198 0. !
t
Measures to Encourage Foreign Investments
A third important area related to state-capital
relations in terms of the mechanism of the accumulation
project was a set of measures designed to encourage foreign
investments. As mentioned earlier, during the late 1950s,
foreign capital played a pivotal role in the growth of
Turkish industrial capital through joint ventures. However,
during the 1960s and 1970s, the role of foreign capital in
the Turkish economy was not significant. There are several
reasons behind the reluctance of foreign capital to come to
320
Turkey during this period which can not be elaborated here.
However, in terms of the structure of the project, it may be
safely claimed that foreign investments did not receive
organized and strong support from the state so as to
contribute to this desired outcome.
One major factor was the general mode of accumulation
that favored import-substituting industrial capital. The
basic role played by foreign capital was similar to that in
the 1950s. Foreign investors participated in local production
through licencing agreements with the incentive of
circumventing import quotas (Goymen and Tiiziin, 1976, p. 69).
The bulk of foreign investments occurred inn the importj
substituting consumer goods sectors as automotive, electrical;
machinery, chemicals and rubber products (Karluk, 198x,
p.135; Uras, 1979, pp.144,147; Yerasimos, 1976, p.1441).
Another crucial factor behind the low level of foreign
investment was the reluctance of local industrial capital to
I
cooperate with international capital. Particularly, the fearj
of losing out to the financially more powerful foreign!
companies convinced local capital to prefer licencing
agreements over a strong presence of MNCs in Turkey (Barkey,
1988, p.179; Keyder, 1987, p.183).
Moreover, indirect consequences of the project also
prevented a strong flow of foreign capital to Turkey. First,
as explained in the previous chapter, wage levels in Turkey
321
were considerably high relative to other NICs. For example,
daily wages in the manufacturing sector, in 1977, were the
same as those in Greece— which enjoyed per capita income]
nearly three times greater— and were double those of South
Korea (Keyder, 1988, p.368). Second, the overvalued exchange
rate had a negative effect on foreign investments by
diminishing export possibilities (Eralp, 1980, pp.625-26).
Evidently, these two factors prevented export-oriented
foreign capital to show serious interest in Turkey.
i
Despite the historical antipathy of the bureaucracy
towards foreign capital, the state was eager to attract more
foreign investment. However, given the lack of enthusiasm ofj
I
local capitalists towards foreign capital, the state did not1
have much incentive to spend much energy in this area as longj
as the availability of foreign exchange was secured during
the early 1970s by workers' remittances (Barkey, 1988,
p.177). Accordingly, a lack of interest in foreign capital is
observed in the Third Five Year Plan (Karluk, 1983, p.57).
Under these circumstances, the flow of foreign capital
to Turkey was extremely low between 1960 and 1980. With the
exception of 1973, when $67 m. of foreign capital was
invested in Turkey, the inflow fluctuated between $1.9 m. anJ
$15.1 m. The cumulative inflow for 20 years was only $210 m
(Karluk, 198x, p.116). In 1976, the shares of the firms witJ
i
foreign capital participation in the manufacturing sector's
322
total sales and value added were 13% and 9.8% respectively
(Uras, 1979, pp.194, 241). The share of foreign investments
in the private manufacturing sector1s capital formation was
merely 3.8% (Keyder, 1987, p.182).
In sum, the role of foreign capital during the 1960s
and 1970s was not critical for the accumulation project. The
structure of the strategy that promoted the interests of
industrial capital producing for the domestic market led to
high wage levels and an overvalued exchange rate. This, in
turn restricted the flow of international capital only to the
import substituting industries via licencing agreements.
Hence, the international capital remained as a supporting
partner of the local industrial capital. Finally, the
political climate and the lack of political stability in the
country alienated the foreign capital even further. During
1979, at a time when Turkey was facing its most serious
political crisis, there was a $6.4 million outflow of foreigr
capital (Karluk, 1983, p.116).
Credit Schemes
The availability of adeguate sums of financial capital
to industrialists was a major issue for the state during this
period. As mentioned earlier, bank credits were one of the
main conflicts in the 1970s between commercial and industrial
323
capitals. This forced the state to intervene in number of
ways to increase credit availability for private industrial
capital.
The regulation of the banking system by the state,
particularly the control of interest rates, deserves
particular attention. During these two decades, the state
fixed interest rates at levels lower than market rates. While
individual depositors received low interest payments on their
deposits, banks were regulated to lend at rates below the
current inflation rate. The real interest rates— nominal
interest rate minus the inflation rate— on time deposits were
always negative throughout the 1970s. The real interest rate!
was -67% in 1980 (Sonmez, 1986, p.65). If we add transaction*
costs as commissions to the lending rates, the real rates on
medium term bank credits were -5.2% in 1973, -25.6% in 1978
and over -60% in 1980 (Hale, 1981, p. 157; Sonmez, 1986,
p. 65) .
One impact of this policy was the transfer of funds fromj
agricultural sector depositors to urban areas, mostly in thd
form of cheap commercial and industrial credits. A second
outcome was the provision of low cost credits to commercial
and industrial capitals. Although industrial capital was
quite happy with the low credit costs (Barkey, 1988, p.172),
this policy hurt it rather than helping in the long-run.
324
First, as expected, negative real interest rates held
down the growth of savings. The marginal propensity to save
declined from 25.6% in the 1968-1972 period to 13.8% by 1978
(Hale, 1981, p.152). The real deposits/real GNP ratio -in
1968 prices- declined from 29.9% to 18.1% between 1972 and
1980. The real credits/real GNP ratio also dropped from 24%
to 18% in the same period but at a less dramatic rate since
savings are not the sole determinant of the credits (Yuzgiin,
1982, p.95). Although fixed investments of the private sector
increased from 10.5% of the GDP in 1973 to 11.2% in 1979
(World Bank, 1982, p.410), the diminishing savings coupled
with a non-existent capital market had a negative effect for
private sector investments.
Second, and more critically, since interest rates were
fixed by the state, commercial banks had little incentive to
lend for risky and/or long-term investments. Evidently, they
preferred short-term credits to the commercial sector which
can turn over their capital more quickly (Hale, 1981, pp.55-
6). In order to alleviate this problem, in March 1973, a
government decree required commercial banks to set aside 20%
of their resources for medium-term loans strictly for
industrial development. Following this law, total medium-term
credits -excluding agriculture- extended from commercial
banks increased from a negligible level to 48.7% of total
325
commercial credits in 1974 but later dropped to 36% by 1978
(TUSIAD, 1979, pp.280-82).
During these two decades, the main sources of the
credits extended to private industrial capital were; first,
two investment and development banks; second, the CB; and
third, commercial banks.
The loans of the TSKB (Industrial Development Bank of
Turkey— established in 1950 as discussed in Chapter VI— andj
the TSYKB (Industrial Investment and Credit Bank),
established in 1963, were at a very low level in 1963. Their
share in total credits was a mere 2.7%. This ratio rose to
24% in 1974 and to 28.7% in 1977 before dropping to 18.1% by!
1980 (golpan, 1975, pp.37,40,45; DIE, 1981, pp.374-75). The!
total TSKB and TSYKB credits — deflated by WPI, 1963=100—
increased from 343.9 m. TL in 1963 to 10,043.2 m. TL in 1970.
It was 19,684.6 m. TL in 1977 before decreasing to 6,936.2 m.
TL by 1980 (golpan, 1975, p. 40; DIE, 1981, p.375). Hence,
between 1963 and 1977, the real value of investment and
!
development bank credits increased by 5,600%, corresponding
to a 33% annual growth rate. However, if we ignore thJ
extraordinary jump between 1963 and 1964 (when total credits
rose to 5,907.9 m. TL.), the annual rate of growth drops to
9.7%.
CB credits to the industrial sector were not
significant for the private sector since the CB remained
326
mainly as a creditor of the public and agricultural sectors.
Partly due to the inability of the state to raise its tax
revenues and partly because of political factors which
channeled huge sums of credits to support agricultural prices
and producers and to finance large SEE deficits, CB credits
to the public sector expanded substantially, as explained
later. Between 1962 and 1980, the share of the public sectorj
was always more than 50%. Particularly, during the military
government's reign between 1971 and 1972, it rose over 70%
and after dropping to over 50% in the early 1970s, it resumed
to soar again up to 71% by 1979 (DIE, 1973, p.283; Kepenek,
1986, p.182; World Bank, 1982, p.430).
Consequently, CB credits to the private sector remained1
marginal relative to the credits given to the public sector,
a contradictory aspect of the accumulation project. On thej
other hand, the CB opened credits to the private sectorj
basically through the rediscount facilities or giving advance1
payments against bank securities (Akgiig, 1987, pp. 128-29;
Oncii, 1980, p.471). The share of the industrial sector in CB
credits extended to the private sector stayed around 13 % ,
until the mid 1970s. After the early 1970s, it began to rise^
and reached 19% by 1975 and 27% by 1977 before dropping to
16% by 1980 (DIE, 1973, p.283; World Bank, 1982, p.430). In
general, CB credits to private industrial capital was not
significant. However, through the rediscount facility of the1
327
CB, certain branches of industry received much cheaperi
i
credits. For example, during the FFYP period, the maximum'
interest rate extended to these branches was 9%, to bej
rediscounted by the CB at 5.25% (Uras, 1967, pp.18-9). By the
1974-78 period, these rates were 16% and 8-11.5% and they
were slightly increased in 1979 (TUSIAD, 1979, pp.180-85).
Commercial bank credits to private industrial capital
was the main financial source of the capital accumulationj
process. The share of industrial and mining sector credits
in private banks' total credits increased from 29% in 1968
to 43% by 1977 and then decreased to 39% in 1980. In 1963
prices, these credits rose from 6747 m. TL in 1968 to 20,952
m. TL by 1977— a 13.4% average annual rate of growth— and^
then dropped to 13,105 m. TL by 1980 (Yiizgiin, 1982, pp. 254-
55) .
One major reason behind the expansion of credits to the
i
industrial sector during the 1970s was the acquisition of
several commercial banks by the big industrial holding
companies. Because of a law stating that a bank can not givej
more than 10% of its capital to a particular company unless
it owns more than 25% of the equity capital of that firm,
holding corporations started to buy commercial banks' stocks
(Oncii, 1980, p. 472). By 1983, 19 of 24 private banks were
*
controlled by individual holding companies (Barkey, 1988,1
i
p.174). This restructuring of financial capital, evidently,
328
gave a big advantage to these industrial holdings while
alarming commercial and small-scale capitals (Barkey, 1988,
pp.173-75).
In sum, during the 1960s and 1970s, we observe a
significant rate of increase in investment and development
and private banks1 credits for industrial capital while the;
contribution of the CB remained limited to some indirect
monetary tools such as the rediscounting facility.
Foreign Trade Policies
While discussing the political economy of import
substitution in the previous section,' two main aspects of the
accumulation project related to foreign trade policies were
identified as the fundamental blocks of the strategy during
the 1960s and 1970s. These were, first, the overvalued
exchange rate policy, second, strng import protection.
I have already discussed the main impact of the
overvalued exchange rate policy on industrial capital, namely
the provision of cheap imported inputs. The total gain to the
industrial sector may be revealed in a crude way by
calculating the real costs of imports using equilibrium
exchange rates. Although there is not a single equilibrium^
exchange rate which is commonly accepted (See, Barkey, 1988,
pp.112-15; Seyidoglu, 1984, p.82), applying moderatej
329
overvaluation rates, we find out that by 1975 - a 27.5%
overvaluation - imports would cost $1 billion more. In 1977,
when the overvaluation was 52%, this figure would be over
$2.3 billions (Dervis et al., 1982, p.336; World Bank, 1982,
p.415). Given that the industrial sector's output in GDP was
$5 b. in 1975 and $5.7 b. in 1977 -in equilibrium exchange
rates- (Dervis et al., 1982, p. 336; World Bank, 1982,
p.407), the contribution of the overvalued TL to thej
importing industrial capital can not be underestimated. t
The other side of the coin was the damage done to
export capital. Even if we neglect the possibility of
additional exports as a result of an equilibrium exchange
rate, using the above-indicated overvaluation levels, it is
estimated that the export sector lost $400 m. in 1975 and
$900 m. in 1977 (World Bank, 1982, p.414). However, the more
crucial impact on exports was in lowering the foreign demand'
for Turkish exports due to the overvalued TL, as became
apparent in the post-1980 period when exports boomed thanks
to a much more flexible exchange rate policies and other
export-promotion policies as discussed briefly later.
As mentioned earlier, industrial exports were a small
percentage of total exports during these two decades whilej
i
industrial imports were constituted a large percentage ofj
i
total imports. Hence, industrial capital primarily benefited!
from this overvalued exchange rate policy. This observation
330
can be also supported by comparing the import and export
effective exchange rates (EER) that include all taxes and
subsidies. During the 1960s, import EERs were always higher
than the export EERs (Krueger, 1974, pp. 172, 187), clearly
revealing that importing industrial capital was privileged
against the export sector. Moreover, the EERs for imports
competing with local production stayed at much higher levels,
giving a further edge to import- substituting industrial
capital (Krueger, 1974, p.172). The real EERs -EERs deflated
by the domestic price index- also declined steadily duringj
this period (Krueger, 1974, pp. 172, 187). Since lower real]
EERs imply higher overvaluation rates, decreasing import and
export EERs hurt exports while making imports cheaper. This
trend continued during the 1970s and the real exchange rates
dropped by 60% (Aktan and Baysan, 1985, p.74) while the
import EERs continued to stay higher than the export EERsj
(Seyidoglu, 1984, pp.123-29). Finally, the bias against
exports, which can be estimated as the ratio of the average
nominal tariff protection coefficient to the average export
subsidy coefficient minus 1, indicates positive results for
16 industrial sectors in 1979 (World Bank, 1982, p.107).
These positive results also show a discrimination against
exports.
The second pillar of the foreign trade policy was|
I
protectionism. As discussed earlier, a protectionist importj
331
regime is a natural extension of a development strategy with
import substitution emphasis. Turkey was no exception to this
phenomenon during the 1960s and 1970s. The major impact of
this policy on industrial capital was the generation of
protection rents by tariffs and quotas. These rents are
derived as extra profits as a result of the industrial
sector’s high final goods prices thanks to the protection
from the competition of foreign companies. However, to
estimate these rents is beyond the scope of this study since
such an effort requires a complex model. A simpler
alternative is to use effective protection rents that
!
incorporate the extra value added produced as a result of!
j
protection as discussed later. However, there exists other
data to show the incentives given to industrial capital for
an import-substituting, domestic market-oriented production.
In order to describe some of these arguments, it is necessary
to summarize the Turkish import regime.
The import regime which was originally formulated with
the 1958 stabilization program is made of semi-annual import
programs intending to control the allocation of foreign'
exchange between different users and sectors of the economy
as well as to determine what and how much to import. The
import regime is organized around five lists. The first list
is the liberalized list I which contains raw materials and
spare parts not competing with domestic goods and for which
332
importation is free. They are subject to import permits given
by the CB (Krueger, 1974, pp.146-49; World Bank, 1982, pp.98-
9). The second list is the liberalized list II which consists
of intermediary and final goods produced in Turkey and which
are subject to import licenses given by several government
ministries -as Commerce, Industrial and Technology, Energy
Ministries - according to the estimates of productive
capacity made by the SOB (World Bank, 1982, p.99).
The third list is the Quota List which includes!
commodities for which the domestic demand is partially
satisfied by local manufacturers. There are commodity-
specific and user-specific quotas. The latter are designed
for the import needs of manufacturers as well as investment
goods. Investment good quotas are heavily controlled by the
DPT and prepared according to the requirements of the
development plans (Krueger, 1974, p.143). In addition to
these three major lists, there are two additional lists. The
first is for bilateral trade imports for barter agreement
trade with certain countries. The second one is for self-
financed imports covering mainly capital goods imported ih
connection with investments made under project aids for
public projects (Krueger, 1974, p.138).
Non-program, self-financed imports were quite
significant during the 1960s. The ratio of non-program to
!
program imports was .29 in 1964 and .3 in 1970 (Krueger,
333
1974, p.156). However, the importance of self-financed
imports declined during the 1970s and the above-indicated
ratio dropped to .11 by 1980 (DIE, 1981, p.338), mainly due
to the decreases in special investment credits from foreign
sources. Hence, the liberalized and quota lists were the core
of the program imports.
The process of formulating import programs evolved in
four stages: first, the projection of import requirements by
the DPT according to the priorities of development plans as
well as the expected investment volume and industrial
production; second, the allocation of these requirements
among lists and financing sources; third, the determination
of which commodities were to be included in which list; and
fourth, the quota list negotiations between the DPT, Ministry
of Commerce, CB and TOB (Krueger, 1974, pp.139-44). The
realization of imports, as mentioned earlier, is first
subject to obtaining an importer's certificate -from Chambers
until 1971 and from the Ministry of Commerce later on- which
is quite straightforward. Then, however, an import licence
should be acquired from the CB after placing a guarantee
deposit (a percent of the cost of goods) subject to the
availability of foreign exchange on a first-come first-served
basis (Krueger, 1974, pp.146-47). For industrial quota
allocations, there is an extra step of obtaining a quota
334
allotment from local Chambers after quota lists are published
following the quota negotiations (Krueger, 1974, p.150).
From this brief summary of the import regime, it is
I
evident that the whole system depends on the availability of
foreign exchange. Then, given a stock of foreign exchange,
the central issue is its distribution among multiple users
where demand is greater than the supply. Moreover, since the
price -exchange rate- of this resource is fixed, the result
was the creation of rents to the recipients of scarce foreign}
exchange.
At this point, it is necessary to show how the project
worked to the privilege of industrial capital, the main!
recipient of the available foreign exchange at prices lower
than market value. Initially, if we look at the distribution
I
of imports by commodity groups, we immediately see the huge
share of the industrial sector. In 1968, the share of
industrial imports in total imports was 90% (DIE, 1973,
pp.360-63). During the 1970s, due to higher oil prices, this
share declined and stayed around 78% (World Bank, 1982,
p.415). Another indication of the priority given to industry
is the composition of imports by commodity groups. In 1964,
the distribution of imports among investment goods, raw
materials and consumer goods was 37%, 55% and 8%,
respectively (Krueger, 1974, p.156). By 1972 these
percentages were 50, 46 and 4 (DIE, 1973, p.372). After the
__________________________________________________________________
335
mid 1970s, however, soaring oil prices and the foreigni
exchange bottleneck caused the share of the raw materials to
increase significantly relative to the cost of investment
goods. By 1979 the distribution was 33%, 65% and 2% ,
respectively when nearly half of the raw-material imports
were oil imports (DIE, 1983, pp.366,369).
!
Another indication of a pro-industry trade regime is the
allocation of quotas. As mentioned earlier, quotas are
determined through negotiations between government agencies
and the TOB. The TOB, incorporating both the Chambers of
Commerce and SOB, was subject to the conflict of these two
interests which are eager to maximize their quota
i
allocations. Starting from the 1960s, the importers as a«
group lost ground in this process. Between 1962 and 1970, the
importers' share in the commodity-specific quotas declined
i
from 48% to 23% (Krueger, 1974, p.151). In 1979, this figure
was still 24% (TUSIAD, 1979, p.196). Hence, during these two
decades quotas were primarily allocated to industrialists.
Moreover, rates of guarantee deposits on imports
determined by the CB were also higher for commercial capital.
While the rates were usually equal for the liberalized lists,
for the quota lists, the rates for industrialists fluctuated1
between 5 to 25% against commercial importers' rates of 10 to
40% (World Bank, 1982, p.101).
336
Finally, the very structure of the protectionist import
regime was designed to promote the interests of the import
substituting, domestic market oriented industrial capital.
Tariffs, prohibitions and quotas provided high levels of
effective protection to these industries and transferred
resources in that direction. If we briefly study the nominal
and effective tariff protection rates, we easily perceive a
clear intention to protect the IS industries.
For selected industries, the nominal and effective
protection coefficients are estimated by the World Bank for
1979. THe nominal protection coefficient is equal to 1 plus
the advalorem tariff rate. The effective protection rate is
estimated on the basis of input-output relationships so that
it incorporates the differential tariff rates on the imported
raw materials and intermediary inputs of the finished goods
versus the goods themselves.
In general, the effective protection rates are greater
than the nominal protection coefficients and the differential
is significantly high in food processing, leather, plastic
and fabricated metal industries. The nominal and effective
weighted averages are 1.53 and 1.75, respectively (World
Bank, 1982, pp.93,97). One other study that calculates the
effective protection rates as the ratio of an increase in the,
value added as a result of protection to the value added in'
i
the absence of protection also finds out that the effective!
337
rates are greater than the nominal rates for 1967 (See,
Alpar, 1974, pp.116-19). This method also shows that value
added created in the absence of protection is much lower than
the value added created in a protected environment (Alpar,
1974, p.117). Hence, whereas in a competitive environment
these firms would be expected to be forced to leave the
market given their high costs of production, under protection
they stay in production.
This result is strongly supported by studying the
domestic resource costs(DRC) that estimate the value of
domestic resources in terms of shadow prices (opportunity
cost prices) employed in earning or saving one US$ through
IS. Krueger's study for 1968 reveals high DRCs for all IS
sectors (Krueger, 1974, pp. 218-25). A more recent study for-
i
1978 also shows that none of the IS activities were
profitable. This is because the user price of imports are
significantly above the value given by the official exchange
rate which creates an average bias of 26 TL -official
exchange rate= 25 TL/$ and an equilibrium exchange rate= 34
TL/$ - in favor of IS activities (Dervis et al., 1982,
pp.356-57).
In sum, the Turkish import regime heavily worked to
protect IS activities during the 1960s and 1970s. By
providing an effective protection against competing foreign
goods through tariffs, quotas and prohibitions and through
338
an overvalued exchange rate policy, IS industries were
favored extensively. This system also allocated scarce
foreign exchange primarily to the service of industrial
capital at cheap rates enabling this sector to appropriate
substantial rents. On the other hand, export and commercial
capitals lost significantly as a result of these foreign
trade policies.
The Role of SEEs in the Project
The role of the public sector in the accumulation
project of the 1960s and 1970s showed a remarkable difference
from the earlier strategies. State capital was the engine of
the etatist strategy in the 1930s. In the 1950s, the public
sector also played a prominent role but it was not closely
linked to the revenue generation of the agriculture sector,
the leader of the project. In the 1960s and 1970s, the state
sector not only continued to contribute to the capital
accumulation process directly, it also augmented the
profitability of private industrial capital, the leader of
the project.
The place of the state production through the SEEs
remained at significant levels during these two decades. The
real value added(in 1963 prices) of state companies increased
from 3.5 m TL in 1963 to 13.3 m TL in 1975 and then decreased
to 7.6 ra TL in 1980. The real value added of the state
manufacturing sector was higher than of the private sector
until 1975. The ratio of the public sector's value added to
the private sector's value added decreased from 1.7 in 196 7
to 1.08 in 1974 and to .5 in 1980 (DIE, 1963-65, p.498; 1977,
pp.207-13,387; 1983, pp.262-63, 388).
The strategy for the state sector has shifted from time
to time during the 1960s and 1970s in response to the
changing political climate as evident in different
i
development plans. The First Plan, prepared in the early
1960s under the RPP influence emphasized a mixed economy
model giving equal importance to both public and private
sectors and was highly criticized by the private sector
(Oyal, 1981, pp.138-140). The Second Plan, prepared by the JP
government, promoted the interests of private industry while
restricting public sector investments to areas not desired or
entered by the private sector (Kepenek, 1990, pp.3 6-7; Oyal,
1981, pp.150-52; Saybasili, 1976b, pp.92-3). The Third and1
Fourth Plans, prepared by the RPP governments put more weight
on the SEEs in the project (Ekzen, 1981, pp.244-48; Kepenek,
1990, pp.37-8; Oyal, 1981, pp.158-64).
In general, however, the basic characteristics of the
state sector did not change in the project. First, the state
continued to increase its investments in industry. In 19 63
prices, public investments in industry increased from 458.1
340
in TL in 1963 to 1,945 m TL in 1970 and after reaching 4,726
m TL in 1977 dropped to 4462 m TL in 1980 (Saybasili, 1986,
p.90). The share of manufacturing investments in public
investments rose from 10% in 1963 to 27.5% in 1980
(Saybasili, 1986, p.88).
Second, the SEEs mainly concentrated in the production
of intermediary goods. The share of intermediary goods in the
public sector increased from 36.5% in 1963 to 64.5% in 1980
while the share of consumer goods dropped from 53% to 29%
I
during this period (Boratav, 1988, p.108). With the exception!
of sugar and textile industries, state enterprises remained
in the production of intermediary goods such as, iron and
steel, paper, superphosphates and artificial fibers, metals,
and so on, demanded as inputs by private industry. Those
industries which required high initial capital outlays were
not attractive for the private sector. Hence the relation
between the private and public sectors remained
complementary.
Even in the textile industry where a significant state
production existed, the state focused on cheap, low quality
clothing, which in turn contributed to the accumulation
potential of industrialists by increasing the real incomes of
peasants and workers purchasing these clothing (Keyder, 1987,
p.171). Moreover the share of the SEEs in the value added of
!
several industries diminished significantly during the 1970s
341
and early 1980s. For example, the share of the SEEs decreased
from 51% to 30% in food processing, from 23% to 10% in
textiles, from 79% to 39% in shoe industry, from 82% to 55% i
in paper, from 83% to 43% in metals and from 58% to 12% iJ
transportation vehicles (Kepenek, 1990, p.62).
The contribution of the SEEs to private industrial
capital took place primarily through two ways; first, byj
means of subsidized prices of intermediary goods; second,
through joint ventures. By selling the SEE produced goods
!
with prices lower than market prices, the state transferred
enormous sums of revenue to private capital (Kepenek, 1990,
pp.122-23). While the producer goods price index (1970=100)
I
increased to 950 in 1979, the price indices of electricity,j
lignite, phosphates, cement, diesel oil, paper and pig-iron
rose to 760, 784, 125, 726, 625, 567 and 540 respectively
(DPT, 1982, p.16). Similarly, prices of SEE goods rose at a
much lower pace than general prices during the 1960s
(Walstedt, 1980, pp.270-76). If we compare costs and prices
of SEE goods in 1976, we observe that costs were higher in
many goods, particularly in aluminum, fertilizers, coal,
second quality paper, PVC and sudcostics (Saybasili, 1986,
p.75).
A second mode of state support to private capital took
place through joint ventures between the SEEs and private
companies. The participation of the SEEs in these joint
342
ventures, particularly in the industrial and financial
sectors, transferred significant sums of financial capital to
private firms. Especially during the 1960s and early 1970s,
SEE1s capital outlays consistently exceeded private capitalj
outlays. Consequently, the SEEs financed their privatej
partners through their excessive financial contributions
(Kepenek, 1990, pp.117-18). Furthermore, the SEEs1 credit
outlays beyond the level of their shares transferred further
capital to these joint companies (See Oyal, 1981, pp.143-45).
The proportion of the SEEs1 participation to their totalj
assets often exceeded financially sound levels. Finally, the|
SEEs were paid much lower profits relative to their shares.
For example, between 1975 and 1980, while the average rate of
joint companies was over 35%, the SEEs were paid only 9%^
(Kepenek, 1990, pp.119-120). These privileges increased the
i
number of joint companies from 72 in 1962 to 227 in 1982
(Kepenek, 1990, p.121).
While the public sector contributed to the private
capital accumulation process in the above mentioned ways, the
intensification of the economic crisis forced the private
sector to think over the role of the SEEs in the project as
elaborated later. The inefficiencies and their growing
financial requirements to compensate their losses generated
a great concern among the ranks of private capital (See
TUSIAD, 1982; World Bank, 1980, chapter 6). On the one hand,
343
inefficiency of state production led to high costs (See,
I
|World Bank, 1980, pp.252-54). On the other hand, low selling
i
'prices coupled with high costs led to significant losses
Which increased the financial requirements of the SEEs after
I
'the mid 1970s (TUSIAD, 1981, pp.16-7; World Bank, 1980,
I
pp.255, 426-27). Moreover, poor export performance of the
SEES and their high import requirements (See World Bank,
1980, p.257) also led to a perception that saw the SEEs as
one of the major factors behind the deep economic crisis in
the late 1970s. As discussed later, the growing burden of the
public sector on the economy rapidly changed the proposed
role of the SEEs in the next project and privatization
arguments developed quickly in the 1980s (See, Ozmen, 1987;
TUSIAD, 1986).
Dynamics of the Crisis and Transition to the 1980s
In the previous sections, on several occasions I
described how a sharp economic downturn occurred during the
I
late 1970s following a remarkable pace of growth for two
!
decades. The GNP (in 1968 prices) that increased from 84,188
m. TL in 1963 to 209,183 m. TL in 1978, by an average annual
growth rate of 6%, dropped to 206,121 m. TL by 1980.
Similarly, the industrial sector's output which rose from
i
i l 4 ,597 m. TL to 53,546 m. TL (in 1968 prices) between 1963
344
and 1978, by an average annual growth rate of 9.1%, decreased
to 53,546 m. TL in 1980 (DIE, 1973, p.434; 1983, p.431).
Total investments also declined from 2,657 b. TL in 1977 to
2,197 b. TL in 1980 (in 1983 prices) after growing by 13.8%
annually between 1972 and 1977 (DPT, 1985, p.25).
Consequently, after increasing from 14.5% to 22.2% between
1963 and 1977, the share of gross fixed capital formation in
the GNP decreased to 15.6% by 1980 (DIE, 1973, p.429; 1983,
p.430) .
More drastic developments took place in the private
manufacturing sector. The value added of the private
manufacturing firms employing more than 10 workers increased
from 3,139 m. TL to 19,858 m. TL (in 1963 prices) between1
I
1963 and 1978. After this remarkable 13% average annual!
growth rate, the value added dropped by 23% in two years to
15,207 m. TL in 1980 (DIE, 1963-65, p.498; 1973, pp.240-
41,461; 1977, pp.207-13,387; 1983, pp.262-63,388 ) . Overall
capacity utilization in the manufacturing sector declined
significantly during this period as well. By 1979, according
to a survey of the DIE (State Statistical Institute), in
textile 54%, in chemicals 71% and in metal products 68% of
the firms surveyed operated at less than 60% of their
capacity (Barkey, 1988, p.156). TUSIAD's figures also show
that, by 1979, capacity utilization in the private
manufacturing industry was 45% (Margulies and Yildizoglu,
345
1988, p.156). A similar trend was observed for private sector
investments. Fixed capital investments of the private
manufacturing sector, that had increased from 280,817 m. TL
in 1972 to 451,808 m. TL in 1977 (in 1983 prices), declined
to 239,055 m. TL by 1980. Similarly, total private sector
[investments, which rose from 780,628 m. TL to 1,248,372 m. TL
between 1972 and 19 77, dropped to 857,22 7 m. TL by the end of
the decade (DPT, 1985, p.44). It was a dramatic drop of more
than 30% in 3 years after growing by 10% during the early and
mid 1970s.
Hence, while the economy in general and the private
l
manufacturing capital in particular had sustained high growth
rates until 1977, their performance slowed down significantly
during the years of the deep economic crisis. In addition to
developments revealed above, as discussed earlier, the
investment and development bank credits, as well as
commercial bank credits, to private industrial capital
i
diminished substantially furthering the level of the crisis.
f
While all these figures show the severity of the crisis they
are basically symptoms. Behind their poor performance, two
'major crisis indicators hurt industrial capital very badly.
! First, the foreign exchange bottle-neck which is elaborated
; below. Second, the creeping inflation problem. The wholesale
price index (1963=100) that had risen to 492.1 by 1977 (12%
average inflation rate) soared to 2550.6 by 1980. Between
1979 and 1980, the inflation rate was 107% (DIE, 1973, p.461;
i
|1983, p.388). Both TUSIAD and Mr. Ozal, the architect of the
I
24 January Measures, ranked inflation first among the main
economic problems (See, Qolasan, 1983, p.304; TUSIAD, 1980,
p.87).
! As elaborated earlier, the main contradiction of the
project and the main reason behind the deep crisis was the
failure of industrial capital to generate adequate foreign
exchange to meet its growing import requirements. The hard
currency needs of industrial capital were successfully met
in the early 1970s thanks to workers' remittances and foreign
credits as described before. However, by 1977, Turkey started
to feel the impact of the World oil crisis very badly. The
oil shock not only led to a global recession which had its
repercussions in the Turkish economy indirectly, but also
accelerated the depletion of foreign exchange reserves
because of higher oil prices.
The share of oil in total imports, that had already
increased from 8% to 20% between 1972 and 1974 during the
first oil shock, moved to over 37% by 1980. In the meantime,
exports merely rose from $1,532 m. to $2,910 m. between 1974
and 1980 (World Bank, 1982, p.414-15). As a reflection of the
higher oil prices, the rapid deterioration of Turkey's terms
of trade after 1973 also contributed heavily to the balance
347
of payments problem. Terms of trade (1973=100) declined to 74
by 1979 (TUSIAD, 1980, p.64).
Consequently, the trade deficit increased from $2,245
m. in 1974 to $4999 m. in 1980. The export-import ratio,
which was as high as 81% in 1965, diminished to 37% by 1980
(DIE, 1983, p.355). The current account deficit rose to
$3,426 m. in 1977. It had to be financed by reducing
convertible foreign exchange reserves and increasing foreign
liabilities as medium and long-term public borrowing and
short-term credits (OECD, 1978, pp.16-17). The 1978
stabilization measures cut back the current account deficit,
but still another $1.5 b. deficit had to be financed in 1978
by project credits, official debt relief and other loans
(OECD, 1980, p.15). In 1980, the current account balance
deficit was up to $3,196 m. , depleting reserves and
increasing the foreign debt even further (World Bank, 1982,
,p.413). The role of workers' remittances in financing imports
also decreased during this period because of some wrong
policies and skepticism about the Turkish economy's future.
These remittances financed 25% of total imports by 19 75, but
only financed 15% in 1977. However, following the 1978
measures remittances once again increased and exceeded $1.6
b. in 1979 (World Bank, 1982, p.413).
; During the years of crisis, first, foreign exchange and
gold reserves diminished significantly. Net reserves, which
348
; had been over $2,039 m. in 1973, dropped to below $630 m. by
jl977 and were $706 m. in 1979 (DPT, 1985, p.85). Second, and
i
; iuore critically, Turkey’s foreign debt increased
substantially. Total long-term debt, that had risen from
j$l,297 m. to $4,805 m. between 1967 and 1977, soared to
I
$11,631 m. by 19 79 (World Bank, 1982, p.419). Total debt,
including the short-term credits, was over $14 b. by the end
of the 19 70s and exceeded $15 b. in 1980 (Akat, 1984, p.79;
Margulies and Yildizoglu, 1988, p.144; TUSIAD, 1979, p.261).
Most of this debt rose because of heavy public medium and
long-term borrowing during the late 1970s (TUSIAD, 1979,
pp.251-59; World Bank, 1982, p.413). Under these
circumstances, the ratio of external debt to the GNP
increased from 9.8% in 1977 to 20% in 1979. The debt-service
ratio (proportion of foreign debt servicing relative to
exports) also rose from 100% in 1976 to 232% in 1979
(Kepenek, 1986, p.217).
Summing up, triggered by the oil shock of the 1970s that
led to adverse movements in Turkey's terms of trade, the
^foreign exchange bottleneck of the country became a very
jserious problem by the end of the 1970s. The industry
capital's minimum import requirements to reproduce the
capital accumulation process at a desired level of
profitability were far from being met (See, TUSIAD, 1979,
pp.17-21). As mentioned earlier, due to the increasing value
349
I
.of the oil imports, industrial imports (less petroleum
products) declined, from $4,137 m. in 1977 to $3,215 m. in
1979 (World Bank, 1982, p.415). Moreover, even this minimum
import bill became more and more difficult to attain. Between
'February 1977 and January 1980, the CB did not approve any
transfer of foreign currency for imports, compelling
industrial capital to search for its own foreign exchange
through unusual and costly ways (Barkey, 1988, p.157). The
short-term credits, mainly borrowed to import much needed
inputs, skyrocketed after 1975 and reached nearly $4 b.
between 1977 and 1980 (World Bank, 1982, p.413). Especially,
borrowing under convertible Lira accounts increased
significantly, reaching $3 b. by the end of 1978 (Olgun,
1978, p.94). The procedure was for industrial capital to find
creditors in Europe at high interest rates while the
government was backing these loans for repayments in US
idollars. The loan was paid by the local businessman in TL
(See, Kafaoglu, 1986). Despite a limit of 1.75% on the margin
over LIBOR, most foreign banks were able to obtain 5 to 10%
commissions from local capital and most of these fees were
appropriated by several middlemen (Ebiri, 1980, p.241;
iKafaoglu, 1986).
| Under these conditions, the rationality of the project ,
Ithat basically relied on the availability of low-cost foreign
exchange was eroded rapidly. Particularly, the scarcity of
350
foreign exchange, accompanied by the state's political
I
allocation schemes of some imported and state-produced goods
I
as steel products, fertilizers and other intermediate inputs,
led to a floundering rent-economy. The greater the scarcity
of imported goods, the more money flow into the hands of
^intermediate rentiers and black-marketeers who even smuggled
the most demanded inputs and cut down the industrial profits
(Dervis, et al., 1982, pp.351-52; Keyder, 1987, pp.190-91).
Competition for available imports was so intense that the
resources of industrial capital had to be continuously
diverted from direct productive use into rent-seeking
activities to obtain these imports. The premia payments grew
significantly and led to major output losses that exceeded
10% in some sectors such as chemicals and machinery. The
total value of import premia in 1978 was three times the
value of tariff collections (Dervis, et al., 1982, pp.354-
55) .
While the accumulation aspect of the project was in a
.deep crisis, the legitimization function was also paralyzed
when the project failed to fulfil the basic demands of
,different classes of the society. Legitimacy of the project
was provided for nearly two decades by distributing some
portion of the total surplus derived by industrial capital
to the organized labor and agricultural producers. This
'populist' aspect of the project (See, Boratav, 1983; 1987)
|
351
I
( was very important for public approval. In chapter VII, I
have already discussed how the crisis of the project had an
impact on the working class. Between 1978 and 1980,
industrial capital concerted an offensive against labor to
maintain its profitability. This attack was later supported
by the JP government which reigned after Mr. Ecevit. Two
targets were to control wage increases and to break the power
of the Unions. During this period, real wages and the share
of wages in the value added of the private sector declined
significantly (See, chapter VII, p.49). The class consensus
between capital and labor disappeared and the capital-labor
relation completely changed after 1980 (See, chapter VII,
pp.50-57).
On the other hand, the economic crisis also destroyed
the legitimacy of the project in the agricultural sector.
First, as discussed before, the project's IS emphasis
basically relied on a continuously expanding domestic market.
Similar to the role of wages, rural incomes played a
significant role in the success of the project in increasing
the demand for the finished goods of the industry. Second,
the rapid industrialization changed the traditional social
structure of rural Anatolia. On the one hand, as pointed out
earlier, small-scale Anatolian capital, unable to compete
against the big urban capital, decayed over time. On the
other hand, the economic boom in metropolitan centers
352
I
jresulted in massive migration from rural to urban areas
jduring these two decades. Migrants, however, retained their
links with their villages. While the peasant worker supported
i
!his family in the village by his wage income, he also
I
Isupplemented his income by the goods (basically food) sent by
I
,his family (Keyder, 1987, p.159). This double support system
improved the standard of level in the rural areas to some
extent. As a result of migration, while the distribution of
the population between urban and rural areas was 32-68% in
1960, it became 44-56% by 1980 (DIE, 1983, p.34). Moreover,
the economic expansion provided new market opportunities to
petty commodity producers in the agricultural sector. On the
one hand, the increasing industrial output led to higher
demand for agricultural inputs, particularly industrial crops
as cotton. On the other hand, the growing urban population
increased the demand for food-stuff. Accordingly, the rapid
commercialization of the agriculture that resumed in the
,1950s (See chapter VI) led to significant increases in
marketing ratios, particularly for industrial crops as
cotton, tobacco, sugar beets, and so on (Margulies and
Yildizoglu, 1988b, pp.39-41). These ratios were very close
I
to 100% for industrial crops while the marketing ratio for
'wheat was over 50% (Kip, 1988, p.153).
I During the 1960s and 1970s, the main mechanism that the
state used to improve rural incomes was the agricultural
353
l
!
isupport policies. As elaborated earlier, after the 1960
i
jtransformation, the agricultural sector lost its power
itogether with the bankruptcy of the DP project. However,
i
jalthough industrial capital became the leader of the new
project, the JP kept the tradition of clientilist alliance
with agrarian interests and small peasantry for its electoral
success (Sunar and Sayari, 1986, pp.177-78). Evidently, the
compatibility of the new project with increasing rural
incomes also helped to implement expansionary agricultural
policies.
In Turkey, an overwhelming part of agricultural policies
has been support price policies (See, Somel, 1979; Kip,
1988). Although there is no strict consensus between
different series of internal terms of trade of agriculture,
they all agree on the general trend. The terms of trade of
agricultural commodities rose slightly during the 1960s and
until the mid 1970s by 29-45% (according to different
series), and then started to decline; after 1977 they dropped
significantly. Between 1977 and 1979, the terms of trade
:index decreased 23-44% (Boratav, 1988b, p.253; Kip, 1988,
i
,p.l59). This decline is also supported by the decrease in CB
i
i
credits for agricultural support. These credits (in 1963
prices), which rose from 5.9 b. TL in 1975 to 12.4 b. TL in
i
1 1977, dropped to 5.8 b. TL by 1980. Moreover, their share in
354
total CB credits also declined from 32% to 22.5% between 1977
i
and 1980 (DIE, 1983, p.401; DPT, 1985, pp.128-29).
I Besides these agriculture support policies, tax policies
:of the state also contributed to improve rural incomes.
’ Between 1963 and 1979, the share of taxes collected from this
I
sector in total income taxes varied among 2.5% and 5% (Onder,
1988, p.125). In 1977, while agriculture's share in national
income was 22.2%, its share in income taxes was merely 5%
(DIE, 1983, p.431; Onder, 1988, p.125).
Finally, the credits extended to the agricultural sector
by the state agricultural bank increased significantly during
this period. In 1963 prices, between 1965 and 1977 these
credits nearly doubled from 1.8 b. TL to 3.4 b. TL and then
diminished to 2.85 b. TL by 1980 (DIE, 1973, pp.201-2; 1983,
pp.234-35).
These figures clearly reveal how the project developed
agriculture as a viable market for finished consumer and
industrial goods (Somel, 1979, pp. 311-16). However, with the
deepening economic crisis the strategy failed to sustain its
support to agriculture. Neither the agricultural support
prices nor credits could catch up with the creeping
inflation, leading to deteriorating terms of trade and a
i
jdiminishing pool of credits. Moreover, the sluggish economy
in the cities decreased the labor market opportunities for
migrant workers (Keyder, 1984, p.33). Consequently, similar
I
355
to the working class, rural interests began to suffer very
badly after 1977 and the project faced a legitimization
crisis as well.
While the working class and rural producers were hurting
badly, the economic crisis finally forced industrial capital
to revise its evaluation of the project. At this point, it
is necessary to mention briefly how industrial capital1s
perception about the project's rationality and the state's
role in the strategy changed rapidly, leading to new
suggestions for an alternative.
While the economic crisis was deepening by 19 77, the
political climate was also facing serious frictions. The
elections of 1977 did not produce a clear winner, leaving the
RPP 13 votes short of a majority in the Parliament. A
minority government backed half-heartedly by industrial
capital was established. Despite the RPP's hostile relations
with capital, industrialists now were eager to avoid another
coalition government, especially one including the NSP with
its negative attitude towards big urban capital. Moreover,
the RPP's social-democratic line was expected to alleviate
the growing tensions between labor and capital and help in
sustaining political stability (Barkey, 1988, pp.202-4;
Keyder, 1979, pp.39-40).
However, the RPP's government was not approved in the
parliament and a second National Front coalition was founded
356
i
by the JP which included the ultra-right parties of the
l
political spectrum including the NSP. But, lacking any
legitimacy due to the economic and political crisis caused
by the first National Front coalition, the government had to
resign by the end of 1977. In January 1978, the RPP
t
established a new government. However, the RPP government’s
relation with industrial capital did not develop
harmoniously. Particularly TUSIAD often challenged and
criticized major government policies during the following two
years (Barkey, 1988, pp.205-9). The RPP's pro-labor position
-as described in chapter VIII- and its historical tendency
towards a more planned and regulated economy alienated
industrialists rapidly. During 1978 and 1979, industrial
capital embarked on an intensive effort to produce an
alternative hegemonic project but still under its own
leadership. These efforts finally led to a new accumulation
project which was built on radical 24 January, 1980 measures
taken by the new JP government following the RPP's
resignation after a major set-back in the by-elections of
late 1979.
As I discussed earlier, industrial capital was quite
content with the project until the economic crisis of 1977.
Before then there was not any serious debate for an
alternative strategy on the agenda. Industrialists enjoyed
the postponement of a restructuring in the early 1970s
357
jfollowing the initial success of the 1970 devaluation and a
Jtemporary increase of workers' remittances. Mr. Vehbi Kog,
one of the leading industrialists, explained this positive
view of industrial capital about the IS industrialization
;during a well-publicized interview in 1976. He openly
defended IS activities on the basis of saving foreign
exchange. He then argued that in the case of a coming foreign
1
exchange crisis, the state ought to allocate scarce foreign
exchange preferably to industry in order to avoid massive
layoffs in this sector. He also claimed that export business
is a different activity that is outside his involvement
(Ebiri, 1980, p.229). One should note here that Kog Empire,
I
while doubling its sales between 1972 and 1977 to $1.1 b.,
was only able to generate 10% of its foreign exchange needs
by exports in 1977 (Schick and Tonak, 1988, p.427). However,
starting from 19 77, industrial capital began to think about
policies for promoting exports under the pressure of the
severe foreign exchange bottleneck.
i I do not intend to survey the whole spectrum of ideas
'which were discussed by different organizations of capital
(
jduring the late 1970s. Their views on different issues varied
significantly. However, I believe that the agenda of the
i
TUSIAD represents the main line of these arguments and also
played a primary role in the transition to the new project.
I focus on its proposals. On the other hand, while industrial
358
capital was reviewing an alternative project, the governments
!of this period also engaged in radical stabilization measures
under the pressure of international organizations,
particularly the IMF, to alleviate the economic crisis. In
the rest of this chapter, I study these developments.
The agenda of the TUSIAD for restructuring concentrated
on two major areas. First, the most crucial issue was to
transform the core of the project by changing its orientation
from IS to exports. The second issue was to minimize the
state's role in the economy to make a successful transition
to a free market economy. Besides these two major areas,
industrial capital was also interested in reforms in the
agricultural sector and industrial relations.
When Turkish capital found itself in its worst economic
crisis in recent history linked to the foreign exchange
bottleneck, it blamed IS industrialization, its protective
trade structure and overvalued exchange rate as the source of
all ills. The proposed remedy was to establish a new project
under the leadership of industrial capital with an export
orientation. This clearly meant a radical switch from an
inward-looking, closed economy to an outward-looking, open
economy that would be able to generate its own foreign
I
[exchange requirements. This transition, on the other hand,
required the replacement of the protectionist trade regime
|
iWith a more liberalized one, establishment of a flexible
359
exchange rate system that would eliminate the overvaluation
of the TL and other policies that would offer a structured
and systematic support to the export oriented capital
(Barkey, 1988, p.158; Gulalp, 1980, pp.54-55; TOB, 1980,
pp.207-10; TUSIAD, 1978, pp.2-3; 1979, pp.16-27; 1979b, p.l;
1980, p.125; Tiiziin, 1979, pp. 345 , 347-48 ). Since these issues
have already been discussed in detail further analysis is not
necessary here.
One should note here that, during such a radical
transformation, evidently the leadership of the project would
pass from the domestic market (inward) oriented capital to
the export (outward) oriented capital. However, the
historical development of capitalism in Turkey never
generated distinct capital fractions involved in these two
areas separately and produced different sets of commodities.
Agriculture remained as the primary export sector, while
following the 1970 devaluation, industrial exports began to
rise. Although this increase was not significant, during the
1970s for the first time industrial capital began to open to
external markets (Kazgan, 1985, pp.388-89). However, as a
,study by the Ministry of Commerce in 1975 shows, exporting
and importing companies were not different. Out of 68 9 big
export firms, 534 of them (69%) were also importers (Sonmez,
1986, p.79). Turkish holding corporations contained both IS
and export oriented production units under their umbrellas.
360
Consequently, there were no significant cleavages between
(import substituting and exporting capitals (Oncii, 1980,
ip.473). Because of this structure of industrial capital, an
:interest conflict between these two capital fractions that
might be a factor during the transition to the new project
'never happened. After the 1980 transformation, big industrial
corporations developed their own export companies. By the mid
1980s, 26 export firms which were mainly owned by big
industrial holdings were exporting 42% of total exports
(Sonmez, 1987a, p.28-30). Some industrial companies also
engaged in the construction sector and got big projects in
the Middle-East, generating significant sums of foreign
exchange (Kazgan, 1985, p.388; Sonmez, 1987, pp.30-32).
Hence, industrial capital was generally in agreement
for a transition to the new development strategy. However,
such a transition would not only require policies to support
an export economy, such as trade liberalization, flexible
foreign exchange system and export subsidies, but also some
I
other radical reforms. A second main proposal of industrial
capital was to diminish the active role of the state and
particularly of the SEEs in the economy. This was the
prerequisite of a successful transition to a free-market
'system that would allocate resources more efficiently than
ithe former political allocation mechanisms. Industrial
capital basically perceived the SEEs as one of the main
[responsible agents in the economy the inefficient allocation
I
jof resources as well as the inflation problem (TUSIAD, 1978,
p.5; 1980, p.123; 1982).
j There were basically two aspects of industrial capital * s
Jattack against the SEEs. First, as discussed earlier, during
i
Ithe 1960s and 1970s, the SEEs had supported the inward-
oriented industrial capital by providing it inputs at below
the market (and cost) prices. However, their role was
primarily in the IS sectors rather than the ones with high
export potential, such as textiles, food-processing and light
manufacturing industries. Consequently, in the new project
the importance of SEE inputs would be diminished greatly
(Tiiziin, 1979, pp.352-53). Second, a more critical problem was
the financing methods of the SEEs as elaborated formerly.
Since huge SEE losses required increasing budget transfers,
SEE deficits contributed substantially to the growing budget
tdeficits which in turn fueled the inflation problem.
Moreover, the financing of SEE deficits withdrew significant
sxims of credits from the market hurting industrial capital by
(
depleting its scarce fund sources. Consequently, industrial
’ capital promoted the new strategy with limited state
(intervention and a smaller role given to the SEEs that would
i
i
jhelp in solving the financing problems of these enterprises
■ (TUSIAD, 1979b, p.l; 1980, p.125; 1982; Tiiziin, 1979, p.353).
362
Besides these two areas, industrial capital also
included other arguments in its agenda. First, as discussed
in chapter VII, since wages were no longer presumably a
demand element but had become rather mainly a cost element,
!they had to be controlled in order to stay competitive in
export markets and to fight against inflation. This in turn
necessitated state intervention of industrial relations to
control the power of the unions and restrict the workers1
right to strike. Similar to industrial wages, incomes of
agricultural producers also lost their significance in the
new project as elements of the internal market. Instead,
agricultural commodities became sources of cheap inputs to
the export industry. Accordingly, the role of the
agricultural support policies changed as well. Rather than
policies that increase rural incomes now they are perceived
as tools that contribute to inflation. Thus, industrial
capital started to demand that the government reduce
■agricultural subsidies and engage in agriculture tax reform
|to make agriculture compatible with the needs of the new
'project (Barkey, 1988, pp. 182-83; Giilalp, 1980, Sonmez,
I
jl987b; Tiiziin, 1979).
I
Finally, industrial capital promoted the further
encouragement of foreign investments by amending current
regulations (Barkey, 1988, p.180). Although the liberal
i
approach of the state towards foreign capital was recognized,
it: was perceived that bureaucratic obstructions, together
with a historical hostility against foreign capital and
outdated regulations, were inhibiting the inflow of a
significant level of foreign investments to Turkey (Karluk,
1983, pp.61-62; TUSIAD, 1979, pp.233-34).
These demands of industrial capital were also backed by
international organizations. The OECD proposed greater
reliance on market forces, higher priority to exports and
further encouragement of foreign investments (OECD, 1978,
pp.38-39). Similarly, the World Bank emphasized the priority
that should be given to export development and realistic
exchange rates (World Bank, 1980, p.xxxi). Professor Balassa
of the World Bank, for example, suggested a model in 1979
with a flexible exchange rate system, export promotion,
encouragement of foreign investments, restriction of wage and
agricultural support price increases, taxation of the
agriculture sector, reorganization of SEEs and transition to
a competitive free market economy (Giilalp, 1980, pp.56-57).
I
Finally, the IMF was very influential in the transition to
the new project especially through its authority on the
availability of foreign loans to Turkey from different
sources. The IMF played a crucial role in convincing the
governments of the late 1970s to agree to the radical
stabilization packages of 1978 and 1980 (See, Berksoy, 1982;
Qola§an, 1983; Dogan, 1987).
364
Between 1977 and 1980, both the RPP and the JP
governments took radical measures to attempt to alleviate the
deepening crisis. The RPP government announced a
stabilization package in early 1978. This program was
basically designed to fight against the inflation and balance
of payments problems through adjustments in the prices of SEE
goods, interest rates and exchange rates. An extension of
this package was also announced by the government in Spring
1979 which included a major devaluation (See, TUSIAD, 1979,
pp.172-89). Although these measures were regarded as an
indication of an unprecedented discipline, the performance
was not bright (OECD, 1978, pp.25-26; World Bank, 1980,
pp.20-21). However, the IMF urged these policy measures and
provided a Standby agreement in July 1979 which opened the
way for more than $1 b. foreign credits from the OECD
■governments and Western Banks that were waiting the IMF1 s
green light (OECD, 1980, pp.15-16; World Bank, 1980, p.21).
Moreover a significant amount of foreign debt was officially
rescheduled giving some breathing space to the government
(TUSIAD, 1980, p.122). In return the RPP government promised
■to introduce exchange rate adjustments, limit public sector
I
borrowing and expenditures, raise the prices of SEE products,
Irestrain monetary expansion, control wage and agricultural
floor price increases and waive wheat subsidies (TUSIAD,
1979, pp. 190-92). The Fourth Five Year Plan also reflected
365
the increased priority given to export development by
assigning an unparalleled planned growth rate of 18.6% (DPT,
1979, pp.243-45,266).
RPP government's efforts to please industrial capital
and the IMF with its stabilization packages did not yield the
]
desired consequences. As mentioned earlier, industrial
capital and TUSIAD remained very critical of the government.
The IMF support was also reluctant and insufficient. The main
reasons behind these frictions may be linked to the RPP's
main political line and economic philosophy. On the one hand,
as elaborated in chapter VII, the RPP attempted to some
extent to promote an alternative project resembling a
workers' management model. Its historical pro-labor position,
coupled with this new model, alienated the private sector
which perceived these efforts as a socialist program.
On the other hand, while this attempt failed, the RPP
government did not move decisively in the direction of an
export-oriented development strategy that was on the agenda
i
of industrial capital and international organizations. The
:RPP's stabilization measures were basically fine-tuning
policies that were designed to ease the economic crisis by
making the necessary adjustments in prices, exchange rate and
interest rates rather than taking radical steps towards trade
i
liberalization, flexible exchange rate system, abolition of
interest rate regulations and a complete switch from IS
i
366
industrialization to export orientation (See, Ekzen, 1984).
Possibly, the RPP government was reluctant in making this
transformation because of its populist, pro-labor and social
democrat line that was totally conflicting with an export-
promotion project. Moreover, its historical belief in the
efficiency of a planned economy with a high level of state
intervention and a big role given to SEEs also contradicted
with industrial capital's demands.
For example, even the mentioned implicit priority given
to export development in the Fourth Plan was not forceful
since the allocation of investment resources in manufacturing
followed the import substitution objectives of the prior
plan. While the investment allocation to consumer goods
industries, which evidently had a much higher export
potential, was 9% lower, the investment in intermediate goods
was 92% higher. These investments, concluded the World Bank,
were expected to undermine the export targets and
furthermore reduce Turkey's international competitiveness by
relying on high cost local inputs (World Bank, 1980, p.41).
Consequently, both the Fourth Plan and RPP's policies were
seen by capital as insufficient attempts to solve Turkey's
urgent problems (Barkey, 1988, pp.207-9; Dogan, 1987, pp.163-
|67; TUSIAD, 1979b, p.l). Finally, the performance of the
economy during the reign of the RPP was very poor as
illustrated earlier.
367
All these developments contributed to a major defeat at
the by-elections. In October 1979, Mr. Ecevit's government
resigned and was replaced by Mr. Demirel1s minority
government. The new JP government immediately proceeded to
prepare a new package of stabilization measures that became
to be known later as the "24 January Measures". This program
received immediate recognition and support from industrial
capital and such international organizations as the IMF, OECD
and World Bank. The package was prepared under the leadership
of Mr. dzal, the Chief economic advisor of Mr. Demirel and
the prime minister of Turkey during the 1980s. Despite the
lack of full support from all members of the government, who
particularly opposed the major price increases of the state
produced goods and a dramatic devaluation, Mr. Ozal
convinced, first, Mr. Demirel and his close circle, and then
the other members of the government, to approve this radical
program (See, £olasan, 1983). The program received hardly any
mention in the 1979 by-election campaign (Senses, 1983,
p.2 73) since it was guite hard to sell to the public at that
time. However, later it became the turning point in the
establishment of the new development strategy.
The 24 January measures, argued TUSIAD, was a courageous
and pioneering attempt in Turkish economic history in moving
to a free market economy (TUSIAD, 1980, p.123). The OECD
praised these measures as a basic reorientation of economic
; 368
I
policy from a state regulated economy towards greater
i
jreliance of market forces, foreign competition and investment
,to allocate resources more efficiently (OECD, 1980, pp.25-
31). Similarly, the World Bank described the January 24
measures as a move to a new development strategy for several
decades that includes an outward orientation and increased
role of market forces (World Bank, 1982, pp.47-8).
In summary, the 24 January 1980 measures and its
following supplements contained the following key elements:
(See, DPT, 1980; OECD, 1980, pp.32-5; Sonmez, 1980, part
III; TUSIAD, 1980, pp.69-86; World Bank, 1982, pp.47-8)
a) TL was devalued by 33% and with the following
adjustments a major step was taken in the direction of a
flexible exchange rate system that eliminated the
overvaluation of Turkish currency.
b) A set of decisions were made to structure an export
promotion system. Exporters were given the right to import
materials and intermediate goods duty-free. Procedures to
grant export incentives were simplified. Exporters were
allowed to get credits equal to 80% of the foreign exchange
they bring into Turkey. A reorientation of investment
'incentive priorities occurred with greater emphasis placed
,on export industries.
c) A plan to liberalize imports was initiated.
Liberalized List I was enlarged. Requirements for advance
; 369
!
ideposits on imports were reduced. The customs stamp duty was
lalso decreased from 25% to 1%.
(
i d) Prices of many SEE products were raised up to 300-
I
!400% as a result of the elimination of price controls on
i
iSEEs. Most of the government subsidies were abolished or
^greatly reduced.
i
e) Interest rates and discount rates were increased and,
later, interest rates on savings and credits were freed
abolishing the ceilings.
f) Decision making on foreign investment was simplified
and some formerly prohibited sectors such as oil exploration
were opened to foreign investment. Foreign capital was
granted the same incentives that were given to the local
capital.
As summarized above, the 24 January 1980 measures were
the major step in the transition to the new accumulation
project. On September 12, 1980, a military take-over toppled
the JP government, but the interim government did not deviate
from the 1980 project. Under this project, industrial capital
was restructured and became more outward oriented. Following
the implementation of the '24 January Measures' the wheels of
the economy started to turn again. The most immediate
problem, a foreign exchange bottleneck, was solved with the
help of foreign loans and a sharp increase in exports. Total
exports rose from 2.9 b $ to over 7 b $ in 1984 and exceeded
370
1 10 b $ in 1987 (DIE, 1986, p.210; Margulies and Yildizoglu,
E
|1988, p.154). The export/GDP ratio increased from 3.5% in
i
:1979 to 15.1% in 1985 (Boratav and Tiirel, 1988, p.39). The
I
.second critical problem was partially solved by bringing down
;the inflation rate from 107% in 1980 to 25.2% in 1982 which
then rose to 48.4% in 1984 (TOB, 1985, p. 144). A third
problem of high wages was also successfully handled as
discussed in chapter VI.
The availability of foreign exchange, lower real wages
and controlled strikes, lower inflation rates, continuing
state subsidies and incentives and finally the stable
political climate rebuilt the confidence and profitability
:of private capital. The capacity utilization rate in the
private manufacturing industry rose from 45% in 1979 to 73%
in 1985 (Margulies and Yildizoglu, 1988, p.156). The real
value added (in 1963 prices and deflated by wholesale price
index) of private manufacturing companies employing more than
10 workers increased from 13,051 m TL in 1980 to 24,507 m TL
in 1984 showing an average annual growth rate of 17% (DIE,
1986, pp 139, 223).
Similarly, if we observe the performance of the top 500
companies between 1980 and 1984, we find significant growth
rates. The real total sales revenue, profits before taxes and
total net worth of the top 500 companies (deflated by the
wholesale price index) grew by 67%, 55% and 79% respectively
>
371
i (YASED, 1986, p.18). On the other hand, it took until the mid
1980s for real private investments to reach the pre-1980
level. Its index (1977=100) which had dropped to 69 in 1980
'increased to 80 in 1984 and 103 in 1986 (Boratav and Tiirel,
|1988, p.38).
i
| Exports of the industrial sector also increased
significantly during the 1980s. It rose from 1047 m $ in 1980
to 5145 m $ in 1984 while the share of industrial exports in
total exports increased from 36% to 72% (TOB, 1985, p.183).
The substantial increases in export tax rebates contributed
to this dramatic change in the export trade. The ratio of
export rebates to total exports increased from 6% in 1980 to
19% in 1984 (Ersel and Temel, 1984, p.114).
The overall performance of the Turkish economy improved
significantly during the early 1980s. The real GDP in 1963
prices increased from 206,121 m TL in 1980 to 258,086 m TL in
1985 corresponding to an average annual growth rate of 4.6%.
Similarly the industrial sector grew by 7.5% during this
period (DIE, 1983, p.431; 1986, p.259). Finally, net foreign
investments also increased considerably during the early
11980s. They rose from 62 m $ in 1980 to 364 m $ in 1986
'(Margulies and Yildizoglu, 1988, p.156).
In sum, the new development strategy was similar to
previous transitions in that it achieved refueling of the
economy and reproduction of the capital accumulation process.
1
^The governments of the 1980s have been continuing to take
i
additional measures to solidify this export-promotion
j
jstrategy and the project has stayed effective under the full
I
; support of industrial capital and international
[Organizations.
i
I
}
373
!
i
I
CHAPTER IX
CONCLUSION
I
i
This Chapter reassesses and reevaluates the theoretical
structure developed in Chapter III based on the empirical
evidence and findings studied in the previous sections. Three
hypotheses disclosed in Chapter III are tested against the
Turkish experience between the 1930s and 1980s. First, I
briefly review the main theoretical points formulated in this
dissertation and then attempt to reorganize the empirical
evidence drawn earlier around my three hypotheses.
As elaborated in Chapter III, the aim of this
dissertation is to study the dynamics of accumulation
projects that were implemented in Turkey during the study
period in order to provide some general guidelines which
augment our understanding of the role of the state in the
process of capitalist development in peripheral social
formations. This analysis is conducted by adopting a
"strategic-theoretical" approach which focuses on the
dialectic among strategies, structures and struggles at the
level of specific conjunctures.
I
i
1
374
The main questions addressed in this dissertation are,
first, how specific development strategies representing
distinctive logics of capital are assembled; second, how
these projects are implemented; and third, how these projects
transform over time and how a transition from one project to
another is realized.
The starting point of my approach is the definition of
the state in an institutional context that allows us to
conceptualize it as a rational actor with its own
institutional self-interest, that is, to promote economic
development. This rationality, however, is formulated within
the frame-work of capitalist property relations where rules
of reproduction coincide with the reproduction of the
capitalist class, since economic development is linked to the
profitability of capital and the reproduction of the capital
accumulation process. The state's— as well as other classes'-
-structural dependence on capital is explained by their
dependence on economic development to foster their material
interests. Consequently, at a high level of abstraction, this
approach concludes that the state has no rational reason to
act against the general interest of capital.
Then, we move to a lower level of abstraction where the
relations between the state and particular fractions of
capital and interests are studied. This move not only allows
for the multiplicity of logics of capital and interests
375
linked to these different accumulation patterns, but it also
lenables us to integrate the historically specific relations
between strategies, structures and struggles to our analysis.
• After conceptualizing different fractions of capital,
i
;these distinct interests are linked to alternative
i
accumulation projects, the key concept of this dissertation.
It is argued that at a given conjuncture, the state
implements the hegemonic accumulation strategy which promotes
primarily the interests of the dominant capital fraction that
has the highest capacity to foster economic development and
hence, all material interests. These arguments are disclosed
in the first hypothesis.
Since the dynamics of development strategies are studied
focusing on the reciprocal relations among strategies,
structures and struggles, the rationality or optimality of
the effective project is not a static phenomena. We may
observe a given project to retain its optimality over time in
terms of fulfilling the expectations of the state in
fostering economic development. However, it is equally
possible that a project may lose its optimality as a result
of various structural and conjunctural factors. While the
crises of accumulation and legitimization deepen, the project
loses its hegemony and becomes an economically dominant
strategy. This, in turn, leads to the intensification of the
376
struggles of non-hegemonic classes to defend their interests.
|These arguments are organized around my second hypothesis.
While the crisis of a project generates the necessary
conditions for a transition to a new project, it is argued
'that, such a transition also depends on two other conditions:
; first, the existence of an alternative accumulation project
under the leadership of a powerful yet non-hegemonic fraction
of capital. Second, if the government persists in pursuing
the effective project using coercion to be able to retain its
political power, there should be a feasible way to replace
this project with the alternative one. A change in the
government through a democratic or non-democratic form is
necessary for the transition to be realized. However, the
analysis of the changes in political regimes per se is beyond
the scope of this dissertation. These arguments are
summarized in my third hypothesis.
As studied in the previous chapters, three distinct
projects were assembled and implemented by the state in
Turkey between the 1930s and 1980 and a fourth one became
effective by 1980. Consequently, the Turkish experience
provides a rich case study to analyze the dynamics of
accumulation strategies.
; During the 1930s, it was argued that the state assembled
an etatist project wherein state capital was the dominant
capital fraction and became the engine of this strategy in
377
fostering development. The formulation of this project took
'place during the Great Depression. While formulating the
! etatist project, the state perceived that, given the relative
'Weaknesses of other fractions of capital, relying on state
production was the sole optimal strategy to be able to
f
ipromote economic development. The state, however, was able to
adopt this project, not only because of other fractions’
weaknesses but also thanks to its strong internal political
structure unchallenged by any other interest. During the
;i930s, the project delivered a significant rate of growth and
led to a rapid industrialization process. The state
consistently and systematically allocated resources and
'implemented policies to the benefit of state capital.
The etatist strategy, as argued, was not a hegemonic
project. Since the state-led industrialization process,
basically, relied on the transfer of surplus from agriculture
to industry, the project was not backed by the rural
majority. Moreover, the bourgeoisie was not happy either
because of the excessive state intervention in the economy.
However, the mono-party political regime did not allow for
any change in political representation and the bureaucracy
retained its power during this period. The war years,
however, led to drastic developments.
On the one hand, the inherent hegemonic crisis became
visible as a result of policies of the RPP government during
378
the War. On the other hand, during the 1940s, a significant
accumulation of capital in the agricultural sector generated
an alternative accumulation project under the leadership of
this sector. It became increasingly difficult for the state
to finance its project either from internal or external
sources. Perceiving the deterioration of the project’s
optimality, the state assembled a new strategy that conveyed
leadership to agriculture.
During the 1950s, the DP pursued an agriculture-led
development strategy. The project promoted, primarily, the
interests of rural producers and until the late 1950s it
remained optimal in terms of generating a desired level of
economic growth. However, starting from the mid-1950s, the
project resumed to face an accumulation crisis. By the end
,of the 1950s, it was also coupled with a crisis of
legitimization when the DP was challenged by the urban-
coalition of the non-hegemonic classes. The second half of
the 1950s also witnessed the emergence of industrial capital
as a candidate for leadership of an alternative project.
Despite the deepening crisis and the existence of its own
alternative project, the DP did not change its strategy. Its
project was retained by using force and the transition was
completed by a military coup in 1960.
The new strategy was assembled by the military
government and implemented by several governments during the
379
i1960s and 1970s. The project, with its import substituting
jemphasis, gave the leadership to inward-oriented industrial
capital and promoted the interests of this fraction
i
! systematically through various policies. The project retained
its hegemonic character and generated a remarkable rate of
[growth until the late 1970s. However a deep economic crisis
ignited by higher oil prices terminated this strategy's
rationality. While the project was facing the crises of
accumulation and legitimization, however, there was no
alternative fraction of capital promoting a different pattern
of accumulation. Although an export-oriented project was on
the agenda, it was promoted by the same industrial capital
and its organizations. During the reign of the RPP government
between 1978 and 1979, an attempt to assemble an alternative
project that would establish a workers' management model in
the SEEs died very quickly as argued in chapter VII. The JP
government assembled the new project in January 1980 and it
was fully implemented and further solidified during the
1980s.
As summarized above, the Turkish experience supports,
'in general, the main tenets of three hypothesis formulated
in this dissertation. First, the state, as argued during
i
different periods, assembles and implements an optimal
project which systematically and primarily promotes the
interests of the fraction of capital that is the engine of
380
I
this project in fostering economic development. Several
policies and measures consistently favor this particular
i
(fraction. The state capital in the 1930s, the agricultural
i
sector in the 1950s, and the import substituting industrial
'capital in the 1970s benefited substantially from state
j
[policies.
Second, these projects remained optimal in the sense of
generating economic development for different spans of time
depending on internal and external factors that influenced
their rationality. The etatist project's optimality was
mainly undermined by World War II which intensified the
contradictions of this strategy sharply. Growing discontent
of the bourgeoisie and rural population led to a hegemonic
crisis. However, we should also indicate that the etatist
project did not face a serious accumulation crisis before the
War. The crisis occurred during the War, when the collapse of
agricultural production made state-led industrialization very
idifficult that was mainly dependent on the surplus
transferred from agriculture.
I The DP project's optimality deteriorated quickly with
the limits of the growth in the agricultural sector.
Particularly, after the inability of agriculture in providing
sufficient flow of foreign exchange into the economy through
jexport earnings, the accumulation crisis led to the
ibankruptcy of the project during the late 1950s. We should
381
[also point out that the hegemonic crisis of the DP project
|was peculiar. The DP always retained wide support from the
countryside to retain its political power through elections.
However, by the end of the 1950s, it completely alienated all
other classes and faced a serious legitimization crisis in
I
the urban areas.
The IS strategy of the 19 60s and 1970s, on the other
hand, retained its optimality until the late 1970s by
generating significant economic development. However, the
main contradiction of the project— its inability to meet its
import requirements via foreign exchange earnings— augmented
by increasing oil prices led to a deep accumulation crisis by
the late 1970s. This crisis also undermined the legitimacy of
the project against the working class and intensified its
struggle.
Finally, the crises of all three projects also led to
transitions to new strategies. After the War, the
agricultural sector and by the end of the 1950s, industrial
capital was strong enough economically to become the leader
of the project while promoting an alternative pattern of
accumulation. The transition in 1980 lacked an alternative
non-hegemonic fraction but industrial capital promoted the
next project. The transitions, however, took place in
different ways. The DP project became effective following the
'electoral victory in the 1950 elections. But, as elaborated
382
in chapter V, the transition had already started under the
rule of the RPP during the late 1940s. The switch from the
IS-oriented project to the export-oriented project in 1980
also took place following an electoral victory of the JP. The
1960 transformation, however, was made possible by the
military take-over.
In this study, I attempted to analyze the dynamics of
development strategies as organized around three main
hypothesis summarized above. Besides the guidelines
formulated by these hypotheses, there are some other issues
that need to be addressed here. First, the study emphasizes
internal over external forces. This emphasis is historically
specific and is a result of the relatively minor role of
foreign capital and foreign trade in Turkey until the 1980s.
However, the role of external forces was significant during
all transitions as mentioned in previous chapters. It is
particularly important to note that the state always
assembled alternative projects based on the approval of
international organizations, such as the IMF, the OECD and
the World Bank. These organizations' increasing influence on
the availability of external funds needed for the economy
augmented their influence over time. This is quite evident if
we compare the 1930s and 1980s. It is not possible to develop
here the scenarios that might happen in the case of a
conflict between the state and international organizations on
383
the assembly or implementation of an alternative project.
However, it is recognized that it became increasingly
difficult to promote projects against the will of
international capital as proven in Turkey, as well, during
the late 1950s and late 1970s.
I
Second, this study does not analyze the relationship
between changes in development strategies and changes in
political regimes (See, O' Donnel et al., 1986; Rueschemeyer
et al.,1991). Turkey, however, is an interesting case study
for this relationship. It is usualy observed that while the
changes in accumulation strategies are the results of
accumulation crises, the changes in political regimes are thJ
outcomes of political crises. Consequently, it is not
possible to generalize precisely the correspondence between
accumulation projects and political regimes. As suggested
earlier, the answer must be found at the level of specific
conjunctures by the operationalization of the dialectic among
strategies, structures and struggles.
Since the focus of this dissertation is restricted to
I
study of the dynamics of accumulation projects, the analysis
I
is subject two major criticisms. First, the state is
I
presented as a monolithic entity where the conflicts and
differences of interests within the state are underplayed and
intra-class and inter-class conflicts are studied outside the
i
state. This criticism is well accepted. It is discussed in
384
chapter III, on a high level of abstraction, that the state's
structural dependence leaves little room for the existence of
multiple interests in the state that compete for alternative
logics of capital. It is argued that, since economic
development is mainly dependent upon the profitability of the
hegemonic fraction, it is to the state's interest to promote
the interests of this hegemonic fraction. Consequently, the
state acts as a monolithic entity in the assembly and
implementation of accumulation projects.
At a lower level of abstraction, this proposition is
valid as long as a project retains its optimality under the
leadership of a hegemonic capital fraction that achieves
economic development. However, when the project faces a
serious accumulation and/or hegemonic crisis, the monolithic
entity or internal coherence of the state, disappears while
the project loses its optimality and rationality.
Particularly, if the state continues to support the
economically dominant— but no longer hegemonic— fraction of
capital, it is very likely to observe competing interests in
the state that struggle to replace the effective project.
The Turkish experience strongly suggests that in the
formulation and implementation of accumulation projects, the
state always acts as a homogeneous institution that
consistently and systematically promotes the interests of the
hegemonic capital fraction . Moreover, since the assembly and
385
execution of all development strategies were under the strict
control of governments, other institutions, such as the DPT,
i
the CB, the Treasury, and so on, which have prominent
functions in the projects, did not have much autonomy that
enabled them to act against the interests of the hegemonic
capital fraction.
It should also be noted that there are some exceptions,
where conflicts of interest among government agencies are
observed in recent history. These exceptions, however, were
not effective in the determination and execution of the
development strategy. As mentioned earlier, for example,
during National Front governments of the 1970s, the NSP,
defending the small-scale Anatolian capital, often used the
Ministry of Industry— controlled by the NSP— against the
interests of Istanbul industrialists. However, its policies
did not alter the main structure of the project during this
period. Slimming up, it is argued that the state acts as a
monolithic entity in the formulation and implementation of
accumulation strategies in the Turkish experience while
projects retained their optimality.
However, during periods of crisis and transition, we
observe the breaking down of the state's unity as a result
of the historically specific dialectics among strategies,
structures and struggles. The repercussions of this
proposition deserves discussion here regarding the relative
386
autonomy of the state. It was argued in chapter III that the
relative autonomy of the state is observed when the state
f
acts against the interest of capital. As noted before, in a
macro sense and at a high level of abstraction, such an
Autonomy is rejected given the structural dependence of the
Istate on capital-in-general.
However, in the micro sense and at a lower level of
abstraction, it was argued that the relative autonomy of the
state may be observed and hence the state may act against the
interest of the dominant capital fraction. The relative
autonomy of the state may become effective during transitory
periods when the project fails to reproduce the capital
accumulation process, level of struggles intensify and a
!
hegemonic crisis appears. Then, if an alternative hegemonic
fraction of capital with its own logic is present, the state
may, but not always, act against the interest of the dominant
fraction of capital in an attempt to promote the interests of
jthis alternative hegemonic fraction. The concrete appearance
of this transition is historically specific. Hence, the
'relative autonomy of the state becomes effective during
periods of crisis when the leader of the project loses its
hegemonic character and an alternative strategy is on the
agenda.
; In the Turkish experience, we witness this phenomenon
on different occasions, but the degree, impact and duration
387
of the state1s autonomy varied during these periods. As
discussed in chapter V, in the transition of the mid 1940s,
the ruling RPP split broke down the state’s unity. Following
a brief period of the coexistence of pro-state and anti-state
I
capital interests, the DP was formed and the governing
1 faction of the party that strongly promoted the etatist
project in the past also came to support the alternative
hegemonic project under internal and external pressures.
In the 1960 transformation, as discussed in chapters VI
and VII, the Army stepped in and toppled down the DP
government and opened the way to the new strategy. At this
time the interest conflict between the military and the
government was one of the determining factors of the
transition to a new project. Hence, the unity of the state
once more broke down when the repressive apparatus of the
state acted against the interests of the economically
dominant fraction of capital. Moreover, following the 1960
jcoup, as discussed in the last chapter, the political vacuum
icreated by this take-over also provided a temporary autonomy
■to the DPT to promote the ’ ’ general interest” of capital
rather than particular interests. However, this autonomy was ’
short-lived, and after the JP's electoral victory, industrial
i
jcapital acquired its full hegemony.
Furthermore, during the 1960s and 1970s, the Army was
:also integrated to the project through the establishment of
388
the OYAK (Military Assistance Organization), which soon
became one of the largest industrial and commercial holdings
in Turkey while accumulating a capital over 22 b. TL by 1986.
;OYAK, financed by salaries of the Armed Forces, invested in
several industrial sectors including a partnership with
Renault of France that is one of the largest passenger car
factories (Ahmad, 1976, pp.280-81; Sonmez, 1987, pp.248-253).
Consequently, the military’s autonomy also deteriorated
significantly since its interest became dependent on capital
to a great extent. This is quite evident if we observe the
nature of the Army's intervention in 1980. The military,
unlike in 1960, backed the effective project and its leader,
industrial capital with full support.
Finally, during the late 1970s, we observe two different
developments relevant to this discussion. First, the RPP
government that ruled in 1978 and 1979, facing a deep
accumulation crisis, attempted to embark on an alternative
project that would move in the direction of a workers'
management model starting from the SEEs. However, as
discussed in chapter VII, on the one hand, labor was not
ready to accept the leadership of this project. On the other
hand, the RPP did not have the full determination to move
rapidly in this path, given the risks of a capital strike
both internally and externally. Hence, although the
government attempted to act temporarily and partially against
389
; the interest of the hegemonic capital fraction during this
.crisis, with the support of the working class, the structural
dependence on capital was the determining factor. This
attempt failed and the RPP lost in the next elections.
The transition to the next project took place in 1980,
as discussed in chapters VII and VIII. During this period,
however, the state acted as a monolithic entity and a
conflict of interests in the state was not observed. This
peculiarity of this transition can be linked to two factors.
First, there was no alternative hegemonic capital fraction
-promoting its own project at that time. Instead, an
alternative accumulation pattern; an open economy, export-
I
oriented strategy was promoted by the hegemonic industrial
capital and this logic was adopted and implemented by the
state. Second, as a consequence of the first point, the
government was not in a position to promote an alternative
project to overcome the crisis. It rapidly assembled and
.implemented the next strategy without any need to resort to
force or a change in the government.
Hence, in this dissertation, restricting the scope of
‘ my focus to the assembly, implementation and transformations
of accumulation projects, it is argued that the state acts as
!a single interest in the absence of an accumulation and
k
hegemonic crisis while promoting the effective strategy.
However, during periods of crisis and transition, varying
390
degrees of state autonomy are observed. This, in turn, makes
possible the existence of conflicting interests in the state
I
which compete to replace the current strategy with an
alternative project.
! One final note should be made here regarding the
relation between state autonomy and the internal cohesion of
the state. It is often discussed in the literature that the
former is a consequence of the latter. In other words, the
state is recognized to enjoy higher autonomy when its unity
is stronger. However, in this study, state autonomy is linked
to periods of transition and crisis when the unity of the
state is weaker. This is a logical extension of the
conceptualization of the state autonomy elaborated earlier
as well as the direct result of the scope of this study that
focuses on development strategies.
During periods of economic growth, it was argued that
the state has no rational reason to act against the interest
of the hegemonic fraction of capital which succesfully
reproduces the capital accumulation process. Consequently,
the autonomy of the state is ruled out under these
circumstances and the state acts in unity and harmony
regarding the implementation of the project. Naturally,
certain divisions may exist inside the state even when the
economy is not in a crisis. However, it was argued that these
divisions are either not relevant for the execution of the
project or they are not strong enough to change the
i
objectives of the strategy against the interests of the
i
i
hegemonic capital.
|
On the other hand, during periods of crisis when an
» i
alternative hegemonic fraction of capital exists we may
I
[observe the breakdown of state unity. Although transition to
|
ithe new project may take place harmoniously, it may also
[occur while the state1s internal coherence disappears and the
i
state may act against the interests of the economically
dominant fraction of capital. As elaborated earlier, if the
government insists of promoting the interests of this
fraction under severe crisis, there should be a force inside
the state or outside the state that would attain state power
and accomplish the transition to the new project.
A second line of criticism is on the state's selection
mechanism of rational projects. As discussed in chapter III,
’ the state is conceptualized with an institutional interest of
promoting economic development. In this context, the ,
1
rationality of a project is restricted to its ability to
foster development and generate a maximum potential economic ;
surplus. Then the critical question is how the state is able
i
i
to select a rational project. First, as it was argued on j
I
chapter III, there may be several factors that leads to >
irrational choices. In other words, there is no guarantee for
the state to make rational optimal choices at all times.
3 92
t
Second, it was also argued that, the decision toi
jassemble a project is a result of internal and external
jforces. Although the state makes the decision because of its
power, it is not the only force that determines the choice.
i
Hence the choice is a collective decision made as a result of
j
multiple forces such as the fractions of capital, other
Jclasses and international organizations. Hence, the selection
I
of the optimal project is not accomplished through a
mechanism that is enjoyed by the state, but rather as a
I*
iresult of the dialectical relations between the strategies,
i
structures and struggles. The state's decision to switch to
a new strategy during a severe crisis is the collective
i
outcome of these developments that generates a common
perception which convinces the state that the new project
would foster economic development better than the current
'one. However, the time and nature of this transition is
jspecific to conjunctures.
| The use of fractions of capital, rather than merely .
jcapital-in-general helps us at this point. By moving from a :
higher level of abstraction to a lower one where the j
fractions of capital can be analyzed, it is possible to j
operationalize the decisions to assemble and implement ^
certain projects specific to conjunctures. As discussed in:
chapter III, since each accumulation logic is linked to a
different fraction of capital and each project primarily
393
promotes the interests of one fraction, it is possible to
focus on the nature of the transitions among projects by
studying the relation between the state and the fractions of
icapital.
j In conclusion, in this dissertation, we attempted to
analyze the role of the state in the formulation and
execution of development strategies. This study suggests
valuable insight to our understanding of capitalist
development in peripheral social formations by concentrating
on the dynamics of accumulation projects. Since economic
development is the result of the success of these strategies,
it is critical to study how accumulation projects perform,
develop and falter. It was argued that the state finds it in
its own interest to assemble and implement accumulation
projects that promote the interests of the hegemonic fraction
of capital in order to foster economic development. The
optimality of these projects may disappear over time because
of historically specific internal and external factors. The
resulting accumulation and hegemonic crises creates an
environment conducive to the transition to an alternative
accumulation project. This transition takes place if an
alternative hegemonic fraction of capital exists with its own
project and when it is politically feasible. The Turkish
■experience supports the main tenets of these hypotheses as
'discussed in this chapter.
I
t
BIBLIOGRAPHY
I
I
Aglietta, M. (1979). A Theory of Capitalist Regulation: The
US Experience. London: New Left Books.
Ahmad, A. (1986). "Class, Nation, and State: Intermediate
Classes in Peripheral Societies." Class and Social
' Development: Theoretical Reflections on Intermediate
! Classes. pp. 43-65. Edited by D. L. Johnson, Beverly
I Hills, California: Sage. ;
‘ i
I .
Ahmad, F. (1977). The Turkish Experiment in Democracy 1950-,
1975. Boulder, Colorado:Westview Press.
Ahmad, F. (1981). "Military Intervention and the Crisis in
Turkey" Merip Repots. 93, pp.5-26.
Akat, A. S. (1984). Alternatif Buyiime Strateiisi.
(Alternative Growth Strategy). Istanbul:Iletisim
Yayinlari. j
Aker. A. (1975). 12 Mart Doneminde Pisa Baaimli Tekellesme. 1
(Foreign Dependent Monopolization during the 12 March
Period). Istanbul:Sander Yayinevi. !
Akgug, O. (1987). 100 Soruda Turkiye'de BankacilikJ
(Banking in Turkey in 100 Questions). Istanbul: Gergek
Yayinevi.
!
Aksoy, A. (1980). "Wages, Relative Shares and Unionization
in Turkish Manufacturing." The Political Economy of |
Income Distribution, pp. 409-458. Edited by E. Ozbuduri
and A. Ulusan. New York: Holmes and Meier.
Aktan, O. and T. Baysan (1985). "Tiirkiye Ekonomisinin Dunya
Ekonomisine Entegrasyonu" (The Integration of the
Turkish Economy to the World Economy). METU Studies
in Development, 12, (1&2), pp.49-107.
Alavi, H. (1972). "The State in Postcolonial Societies:
Pakistanand Bangladesh." New Left Review. 74, (July-
August), pp. 59-82.
Alavi, H. (1982). "State and Class Under Peripheral
Capitalism" Introduction to the Sociology of
395
"Developing Societies11. pp. 289-307. Edited by H. Alavi,
and T. Shanin. New York: Monthly Review.
Alexander, A. P. (1960). "Industrial Enterpreneurship in
Turkey." Economic Development and Change. (July),
pp.349-65.
Alpar, C. (1974). Turkiye1nin Planli Donemde Imalat
Sanayiini Koruyucu Pis Ticaret Politikasi. (Turkey1s
Protective Foreign Trade Policy in the Planned Period).
Ankara: AITIA Yayinlari.
Althusser, L. (1971). Lenin and Philosophy and Other
Essays. London: New Left Books.
Amsden, A. H. (1979). "Taiwan’s Economic History." Modern
China, 5, 3, (July), pp. 341-80.
Amsden, A. H. (1989). Asia1s Next Giant. New York, Oxford.
Amsden, A. H. (1990). "Third World Industrialization:Global
Fordism or a New Model", New Left Review. 182, pp.5-33.
Arinir, T. ve S. Oztiirk, (1976). Isgi Sinifi. Sendikalar ve
15/16 Haziran. (Working Class, Trade Unions and 15/16
June). Istanbul: Sorun Yayinlari.
Avcioglu, D. (1969). Turkiye'nin Diizeni. Cilt II. (Turkey's
Order, Vol II). Ankara:Bilgi Yayinevi.
Barkey, H. J. (1988). The Political Economy ofi
Industrialization: A Case Study of Turkey. Ann Arbor:
UMI
Barone, C. A. (1983). "Dependency, Marxist Theory, and
Salvaging the Idea of Capitalism in South Korea.1 1
Review of Radical Political Economics. 15, 1,(Spring),
pp. 41-70.
Barone, C. A. (1985). Marxist Thoughts on Imperialism.
London: MacMillan.
Barrett, R. and M. Whyte. (1982). "Dependency Theory and
Taiwan: Analysis of a Deviant Case." American Journal
of Sociology. 87, pp.1064-89.
Barrington-Moore, Jr. (1967). Social Origins of
Dictatorship and Democracy. Boston: Beacon.
Baskaya, F. (1986). Devletgilikten 24 Peak Kararlarina.
(From Etatism to 24 January Measures). Ankara: Birlik.
396
Becker, D. (1984). "Development, Democracy and Dependency
in Latin America: A Post-Imperialist View." Third World
j Quarterly, pp.411-31.
|Belge, M. (1976). "Ahmet Hamdi Basar'in Kitabi dolaysiyla
j 27 Mayis iistune Dusiinceler," (Thoughts on 27 May owing
j to the Book of Ahmet H. Basar). Birikim. 11, pp.14-23.
.Bennett D. C. and K. E. Sharpe. (1985). Transnational
| Corporations versus the State. New Jersey: Princeton
| University Press.
I
Berberpglu, B. (1982). Turkey in Crisis. London: Zed.
Berksoy, T. (1982). "Tiirkiye'de Istikrar Arayislari vei
! IMF" (Stability Searches in Turkey and the IMF). IMF j
Istikrar Politikalari ve Ttirkive. pp.147-74. Edited by
C. Erdost, Ankara: Savas Yayinlari.
Bernstein, H. (1979). "Sociology of Underdevelopment versus
Sociology of Development?" Development Theory, pp.77
-106. Edited by D. Lehman. London: Frank Cass.
Bernstein, H. (1982). "Industrialization, Development and
Dependence." Introduction to the Sociology of
"Developing Societies", pp. 218-35. Edited by H. Alavij
and T.Shanin. New York: Monthly Review. I
i
\
Bertramsen, J. P. et al. (1991). State Economy and State, ;
London: Unwin Hyman.
Bettelheim, C. (1972). "Theoretical Comments." in A.
Emmanuel, Unequal Exchange. London: Monthly Review.
Bianchi, R. (1984). Interest Groups and Political
Development in Turkey. Princeton: Princeton University)
Press. j
!
Block, F. (1977). "The Ruling Class Does Not Rule."i
Socialist Revolution. 7, pp. 6-28. j
Block, F. (1980). "Beyond Relative Autonomy: State Managers!
as Historical Subjects." Socialist Register, pp.227-42.j
Edited by R. Miliband and J.Saville. London: Merlin. j
i
Blomstrom, M. and B. Hettne. (1984). Development Theory m i
Transition. London: Zed. i
J
i 1
Bodenheimer, S. J. (1971). The Ideology of Developmentalism:I
The American Paradigm-Surrogate for Latin American!
Studies. Beverly Hills, California: Sage.
397
Bonefeld, W. (1987). 1 1 Reformulation of State Theory.”
Capital and State. 33, pp.96-128.
Boratav, K. (1977). "Biiyiik Dunya Bunalimi iginde
Turkiye'nin Sanayilesme ve Gelisme Sorunlari.”
(Industrialization and Development Problems of Turkey
during the Great Depression). Tarihsel Gelisimi Iginde
Turkiye Sanayii. Ankara: TMMOB Yayinlari.
Boratav, K. (1982). Turkiye'de Devletqilik.(Etatism in
Turkey). Ankara: Savas Yayinlari.
Boratav, K. (1983). "Tiirkiye'de Popiilizm 1962-76,"
(Populism in Turkey, 1962-1976). Yapit. 46-1, pp.7-18.
Boratav, K. (1984/85). "Savas Yillarinin Boltisiim
Gostergeleri ve 'Rantlar' Sorunu," (Distribution
Indicators of War Years and the 'Rents' Problem). Yapit,
8, pp.44-51.
Boratav, K. (1987). "Birikim Bigimleri ve Tarim," (Modes of
Accumulation and Agriculture". 11. Tez. 7, pp.84-105.
Boratav, K. (1988). Turkive Iktisat Tarihi 1908-1985.
(Turkish Economic History). Istanbul:Gergek Yayinevi
Boratav, K. and O. Turel. (1988). "Notes on the Current
Development Problems and Growth Proposals of the Turkish
Economy". New Perspectives on Turkey. 2, 1, pp.37-50.
Boriiban, A. (1977). "Tarihsel Gelisiminde Turkiye
Sanayiinin Yeri," (The Place of the Turkish
Industrialization in its Historical Development).
Tarihsel Gelisimi Iginde Turkiye Sanayii. Ankara:TMMOB
Yayinlari.
Brenner, R. (1976). "Agrarian Class Structure and Economic
Development in Pre-Industrial Europe." Past and
Present, 70, pp. 30-75.
Brenner, R. (1977). "The Origins of Capitalist Development:
a Critique of Neo-Smithian Marxism." New Left Review.
104, (July-August), pp. 25-93.
Brenner, R. (1982). "The Agrarian Roots of European
Capitalism." Past and Present. 97, pp. 19-113.
Brenner, R. (1986). "The Social Basis of Economic
Development." Analytical Marxism, pp. 23-53. Edited by
J. Roemer. Cambridge: Cambridge University Press.
398
Brenner, R. (1988). "The Autonomy of the State?"
Unpublished Paper. Los Angeles: Center for Social Theory
and Comparative History, UCLA.
Brewer, A. (1980). Marxist Theories of Imperialism.
London: Routledge and Kegan.
Bryan, R. (1987). "The State and the Internationalisation
of Capital: An Approach to Analysis." Journal of
Contemporary Asia. 17, 3, pp. 253-75.
Bulutoglu, K. (1980). Bunalim ve ^ikis. (Crisis and
Resolution). Istanbul:Tekin Yayinevi.
Canak, W. L. (1984). "The Peripheral State Debate." Latin
American Research Review, 1, pp. 3-36.
Cardoso, F. H. and E. Faletto. (1979). Dependency and
Development in Latin America. Berkeley, California:
University of California Press.
Carnoy, M. (1984). The State and Political Theory. New
Jersey: Princeton University Press.
Carver, T. (1985). "Marx and Non-European Development."
Marxian Theory and the Third World, pp. 41-47, Edited
by D. Banerjee. New Delhi: Sage.
Celasun, M. (1986). "Income Distribution and Domestic Terms
of Trade in Turkey 1978-1983," METU Studies of
Development 13. (1&2), pp.193-216.
Chilcote, R. H. (1981). Theories of Comparative Politics.
Boulder, Colorado: Westview.
Chilcote, R. H. and J. C. Edelstein. (1986). Latin America.
Capitalist and Socialist Perspectives of Development and
Underdevelopment. Boulder, Colorado: Westview.
Clark, E. C. (1984/85). "Varlik Vergisi Uzerine," (On
Wealth Levy". Yapit, 8, pp.29-43.
Clark, S. (1978). "Capital, Fractions of Capital and the
State: 'neo-Marxist' Analyses of the South African
State." Capital and State, 5, pp.32-77.
Clark, S. (1983a). "State, Class Struggle and Capital
Reproduction." Kapitalistate, 10/11, pp.113-131.
Clark, S. (1983b). "Commentary and Critique."
Kapitalistate. 10/11, pp.131-33.
399
Clark, G. L. and M. Dear. (1984). State Apparatus. Boston,
Massachussets: Allen & Unwin.
Collier, D. ed. (1979). The New Authoritarianism in Latin
America. New Jersey: Princeton University Press.
Corbridge, S. (1986). Capitalist World Development. London:
MacMillan. ]
I
Qegen, A. (1973). Turkiye1de Sendikacilik. (Trade Unionism
in Turkey). Ankara: Ozgiir Insan Yayinlari.
Qelik, N. (1986). Is Hukuku Dersleri. (Labor Law Lectures).
Istanbul: Marmara Universitesi Yayinlari
Qolpan, T. R. (1975). Mevduat ve Kredilerin Daailimi. ( The
Distribution of the Demand Deposits and Credits).
Ankara: Turkiye Odalar Birligi Yayinlari.
Qolasan, E. (1983). 24 Peak: Bir Donemin Perde Arkasi. (24
January: The Anotomy of a Period). Istanbul:
Milliyet Yayinlari.
i
Danielson, M. N. and R. Keles. (1980). "Urbanization and
Income Distribution in Turkey." The Political Economy
of Income Distribution, pp. 269-310. Edited by E.
Ozbudun and A. Ulusan. New York: Holmes and Meier.
de Vroey, M. (1984). "A Regulation Approach Interpretation
of the Contemporary Crisis." Capital and Class. 23, pp.
45-66.
Dereli, T. (1968). The Development of Turkish Trade
Unionism. Istanbul: lij-Iktisat Fakiiltesi Yayinlari.
Dervis, K., J. de Melo and S. Robinson (1982). General
Equilibrium Models for Development Policy. New York:
Cambridge University Press.
i
DIE, (1959). Istatistik Yilliai 1959. (Stastical Yearbook
of Turkey 1959. Ankara: DIE Matbaasi.
DIE, (1962). Istatistik Yilliai 1960-1962. (Statistical
Yearbook of Turkey, 1960-1962). Ankara: DIE Matbaasi.
DIE, (1965). Istatistik Yilliai 1964-1964. (Statistical
Yearbook of Turkey, 1964-1965). Ankara: DIE Matbaasi.
DIE, (1969). Istatistik Yilliai 1969. (Statistical Yearbook
of Turkey, 1969). Ankara: DIE Matbaasi.
400
'DIE, (1973). Istatistik Yilliai 1973. (Statistical Yearbook
of Turkey, 1973). Ankara: DIE Matbaasi.
DIE, (1977). Istatistik Yilliai 1977. (Statistical Yearbook
of Turkey, 1977). Ankara: DIE Matbaasi.
DIE, (1983). Istatistik Yilliai 1983. (Statistical Yearbook
of Turkey, 1983). Ankara: DIE Matbaasi.
DIE, (1986). Turkiye Istatistik Cep Yilliai 1986.
(Statistical Pocket Yearbook of Turkey, 1986). Ankara:
DIE Matbaasi.
Dodd, C.H. (1969). Politics and Government in Turkey.
Manchester:University Press.
Dogan, Y. (1987). IMF Kiskacinda Turkiye. (Turkey under the
yoke of the IMF). Istanbul: Tekin Yyainevi.
DPT. (1964). First 5 Year Development Plan. 1963-1967.
Ankara: Central Bank Publications.
DPT. (1968). Second Five Year Development Plan. Ankara:DPT
Yayinlari.
DPT. (1973). Yeni Strate~ji ve Kalkinma Plani: Uglincu Bes
Yil 1973-1977. (New Strategy and Development Plan: Third
Five Year 1973-1977). Ankara: DPT Yayinlari.
DPT. (1979). Dorduncii Bes Yil Kalkinma Plani. (Fourth Five
Year Development Plan). Ankara: DPT Yayinlari.
DPT. (1980). Ekonomik Istikrar Tedbirleri.(Economic
Stabilization Measures). Ankara: DPT Yayinlari.
DPT (1982) . Yatirimlari ve Ihracati Tesvik Ozel Ihtisas
Komisyonu Raporu. (The Report of the Special Commission
of Investment and Export Subsidies). Ankara: DPT
Yayinlari.
DPT (1982b). KIT Genel Decrerlendirmesi. (The General
Evaluation of the SEEs). Ankara: DPT Yayinlari.
DPT. (1985). Besinci Yillik Kalkinma Plani Oncesinde
Gelismeler 1972-1983. (Developments at the outset of the
Fifth Five Year Development Plan 1972-1983). Ankara: DPT
Yayinlari.
DPT. (1987). Fifth Five Year Development Plan. Ankara:DPT
Yayinlari.
401
Ebiri, K. (1980). "Turkish Apertura" METU Studies in
Development 7, (3&4), pp.209-255.
Ebiri, K., Z. Bozkurt and A. £ulfaz, (1977). Turkiye Imalat
i Sanayiinde Sermaye ve Isaucii. (Capital and Labor in the
j Turkish Manufacturing Industry). Ankara:DPT Yayinlari.
Ekzen, A. (1981). "Kamu Iktisadi Kuruluslarinin Yeniden
J Duzenlenmesi Yaklasimlari ve Dorduncii Bes Yillik Plan'in
Politikalari". (Approaches to the Reorganization of the
SEEs and the Policies of the Fourth Plan). METU Studies
in Development. 1981 Special Issue, pp.227-60.
:Ekzen, N. (1984). "1980 Stabilizasyon Paketinin 1958, 1970,
I 1978-1979 Paketleri ile Karsilastirmali Analizi," |
(A Comparative Analysis of the 1980 Stabilization
Package with the 1958, 1970 and 1978-1979 Packages).
Tiirkive'de ve Dunyada Yasanan Ekonomik Bunalim. (The
Economic Crisis witnessed in Turkey and the World).
Ankara: Yurt Yayinlari.
Elster, J. (1985). Making Sense of Marx. Cambridge:!
Cambridge University Press. j
Elster, J. (1986). "Marx, Revolution and Rational Choice."
Rationality and Revolution, pp. 206-28. Edited by
M. Taylor. Cambridge: Cambridge University Press.
Emmanuel, A. (1972). Unequal Exchange. London: Monthly
Review.
Emmanuel, A. (1974). "Myths of Development versus Myths of
Underdevelopment." New Left Review, 85, pp. 61-82.
Eralp, A. (1981). " Turkiye'de Izlenen Ithal Ikameci
Kalkinma Stratejisi ve Yabanci Sermaye" (Import
Substitution Strategy and Foreign Capital in Turkey).
METU Studies in Development, pp.613-35.
Erogul, C. (1970). Demokrat Parti. (Democrat Party).
Ankara: AUSBF Yayinlari.
Ersel, H. and A. Temel. (1984). "Tiirkiye'nin 1980 Sonrasi'
Dis Satim Basariminin Degerlendirilmesi tizerine bir
Deneme" (A Study of the Evaluation of Turkey's Export'
Success after 1980). Toplum ve Bilim. 27, pp.75-134. j
I
Evans, P. B. (1979). Dependent Development. New Jersey:1
Princeton University Press.
402
Evans, P. B. et al. (1985). Bringing State Back In.
Cambridge: Cambridge University Press.
Evans, P. B. (1983). "State, Local and Multinational
Capital in Brazil: Prospects for the Stability of the*
j 'Triple Alliance' in the Eighties." pp.139-6 7, Latin!
j America in the World Economy: New Perspectives. Edited
by D. Tussie. New York: St. Martin's Press, 1983.
1
'.Fine, B. and L. Harris. (1978). Rereading Capital. New York:
Columbia University Press.
Fisek, K. (1969). Turkiye'de Kapitalizmin Gelismesi ve Isgii
j Sinifi.(The Development of Capitalism and the Emergence!
! of the Working Class in Turkey) . Ankara: Dogan Yayinevi.'
Fitzgerald, E. V. K. (1979). "A Note on State Capital and
Industrialization in Mexico." Industrialization and
State in Latin America, pp. 49-72. Edited by J.Carriere.j
Amsterdam: CEDLA. I
IFitzgerald, F. T. (1983). "Sociologies ofi
Underdevelopment.” Neo-Marxist Theories of Development,
pp. 12-28. Edited by P. Limqueco and B. McFarlane. Kent:
Croom Helm.
Fortin, C. (1979a). "The Relative Autonomy of the State and
Capital Accumulation in Latin America: Some Conceptual,
Issues.” Latin America in the World Economy: New!
Perspectives, Edited By D. Tussie. New York: St.
Martin's Press.
Fortin, C. (1979b). "The State and Capital Accumulation in
Chile." Industrialization and State in Latin America. !
pp. 15-48. Edited By. J. Carriere. Amsterdam: CEDLA. |
Foster-Carter, A. (1978). "The Modes of Production
Controversy." New Left Review, 107, (January-February), .
pp. 47-78. j
Frank, A. G. (1969). Latin America: Underdevelopment or!
Revolution. New York: Monthly Review. I
Frank, A. G. (1982). "Asia's Exclusive Models." Far Eastern
Economic Review. (25 June), pp. 22-3.
Frankel, B., (1979). "On the State of State." Theory and
Society. 7, pp. 199-242.
403
Frobel, F., J. Heinrichs, and 0. Kreye. (1980). The New
International Division of Labor. Cambridge: Cambridge
University Press.
Fry, M. J. (1972). Finance and Development Planning in
Turkey. Leiden: Brill.
Gerschenkron, A. (1966). Economic Backwardness in
Historical Perspective. Cambridge: Cambridge University
Press.
Gevgilili, A. (1981). Yukselis ve Diisiis. (The Rise and the
Fall). Istanbul: ALtin Kitaplar Yayinevi.
Giddens, A. (1982). Contemporary Critique of Historical
Materialism, London: MacMillan.
Goodman, D. and M. Redclift. (1981). From Peasant to
Proletarian. Oxford: Basil Blackwell.
Goulbourne, H. (1979). "Some Problems of Analysis of the
Political in Backward Capitalist Social Formations."
Politics and State in the Third World, pp. 11-32, Edited
by H. Goulbourne. London: MacMillan.
Gouverneur, J. (1983). Contemporary Capitalism and Marxist
Economics. Totowa, New Jersey: Barnes & Noble Books.
Goymen, K. and Tiiziin, G. (1976). "Foreign Private Capital
in Turkey" METU Studies in Development. 11, (Spring).
Grindle, M. S. (1980). Politics and Policy Implementation
in the Third World. Princeton, New Jersey: Princeton*
University Press.
Grindle, M. S. (1986). State and Countryside. Baltimore:
Johns Hopkins University Press.
Gulalp, H. (1980). "Turkiye'de Ithal Ikamesi Bunalimi ve
Disa Acilma" (The Crisis of Import Substitution in
Turkey and Opening to the Outside) METU Studies in
Development. 7, 1&2, pp.37-66.
Giilalp, H. (1983a). "Frank and Wallerstein Revisited: A
Contribution to Brenner's Critique." Neo-Marxist!
Theories of Economic Development, pp. 114-36. Edited by
P. Limqueco and B. McFarlane. Kent: Croom Helm.
Giilalp, H. (1983b). Gelisme Strateiileri ve Gelisme
Ideoloiileri. (Development Strategies and Development!
Ideologies). Ankara: Yurt Yayinlari.
404'
Giilalp, H. (1986). "Debate on Capitalism and Development:
The Theories of Samir Amin and Bill Warren." Capital and<
Class, 28, (Spring), pp. 139-160.
Giilalp, H. (1988). "Capital Accumulation and State." Value,
Social Form and the State, pp. 134-53. Edited by M.
Williams. Hong-Kong: McMillan & Co Ltd.
Giince, E. (1967). "Early Planning Experiences in Turkey.",
Planning in Turkey, edited by S. Ilkin and E. Inang,
Ankara: ODTU-IIF Yayinlari. ,
Gunnarsson, C. (1985). "Development Theory and Third World
Industrialization." Journal of Contemporary Asia. 15,;
! pp. 183-206.
Giizel, S. (1985). "Ismet Inonii, Sosyal Politika, Sendika ve
Grev," (Ismet Inonii, Social Policy, Unions and Strike).
Yapit, 10
j
Giizel, S. (1987). "1980 Sonrasinde Isgi Haklarinda
Gerilemeler," (Regression of Labor Rights after 1980).;
11. Tez, 5, pp.76-91.
Giizel S. (1988). "Tiirkiye'de Isgi Hareketi ve Tarihi,"
(Labor Movement and History in Turkey). 11. Tez. 8,
pp.195-213.
Hale, W. (1981). The Political and Economic Development of
Modern Turkey. New York: St. Martin's Press. ,
I
Hamilton, C. (1983). "Capitalist Industrialization in the;
Four Little Tigers of East Asia." Neo-Marxist Theories1
of Development, pp. 137-80. Edited by P. Limqueco and
B. McFarlane. Kent: Croom Helm.
Hamilton, N. (1982). The Limits of State Autonomy, New.
Jersey: Princeton University Press. j
Hanson, A. H. (1959). Public Enterprise and Economic
Development. London:Routledge, Kegan & Paul.
Hershlag, Z.Y. (1968). Turkey, the Challenge of Growth.
Leiden: E.J.Brill.
Higgott, R. A. (1983). Political Development Theory.
London: Croom-Helm. j
Higgott, R., R. Robison. K. J. Hewison. and G. Rodan. (1985).
"Theories of Development and Underdevelopment:
405
Implication for the Study of Southeast Asia." Southeast
Asia, pp. 16-61. Edited by R. Higgott and R. Robison.
London: Routledge and Kegan Paul.
Holloway, J. and S. Picciotto (1978a). "Capital, Crisis and
the State." Capital and State, 2, pp.76-101.
Holloway, J. and S. Picciotto (1978b). State and Capital:
A German Debate. London: Edward Arnold.
Hoogvelt, A. M. M. (1982). The Third World in Global
Development. London: MacMillan.
Huntington, S. (1968). Political Order in Changing
Societies. New Haven, Connecticut: Yale University
Press.
Ilkin, S. and E. Inang (eds.) (1967). Planning in Turkey.
Ankara: ODTii Yayinlari.
Isikli, A. (1981). "Planli Donemde Sendikal Orgiitlenme,"
(Organization of Union Labor in the Planned Period).
METU Studies in Development. 1981 Special Issue, pp.
349-368..
Isikli, A. (1972). Sendikacilik ve Siyaset. (Unionism and
Politics). Ankara:AUSBF Yayinlari.
Isikli, A. (1987). "Turkiye'de Isgi Harketinin Bati Isgi
Hareketi Karsisinda Ozgiinlugii," (The originality of
the Turkish Labor movement relative to the Labor
Movement in the West). 11. Tez, 5, pp.10-31.
Isikli, A. (1988). "Wage Labor and Unionization" Turkey in
Transition:New Perspectives. Edited by I. C. Schick and
E. A. Tonak. New York: Oxford University Press.
Jenkins, R. (1984a). "Divisions over the International
Division of Labor." Capital and Class. 22, (Spring),pp.
28-58.
Jenkins, R. (1984b). Transnational Corporations and
Industrial Transformation in Latin America. London:
MacMillan.
Jessop, B. (1982). The Capitalist State. Newyork: New York
University Press.
Jessop, B. (1983a). "Accumulation, State and Hegemonic
Projects." Kapitalistate. 10/11, 1983, pp.89-113.
406
Jessop, B. (1983b). "Business Organizations and the Rule of
Capital." West European Politics. 10, pp.139-62.
Jessop, B. (1985). Nicos Poulantzas. Hong-Kong: McMillan.
Jessop, B. (1988). "Regulation Theory, Post Fordism and the
State: more than a Reply to Werner Bonefeld.1 1 Capital
and Class. 34, pp.147-168.
Jessop, B. (1990). State Theory. Pennsylvania: The
Pennsylvania State University Press.
Johnson, D. L. (1982). Class and Social Development: A Newi
Theory of the Middle Classes. Beverly Hills, California:
Sage.
Johnson, D. L. (1986a). "The State as an Expression of
Class Relations." pp. 167-95, Edited By D. L. Johnson,!
Class and Social Development: Theoretical Reflections
on Intermediate Classes. Beverly Hills, California:
Sage.
Johnson, D. L. (1986b). "Local Bourgeoisies, Intermediate
Strata, and Hegemony in South America." pp. 223-39,
Edited By D. L. Johnson.Class and Social Development:
Theoretical Reflections on Intermediate Classes.
Beverly Hills, Sage.
Kafaoglu, A. B. (1986). D£M Dosyasi. (Convertible TL
Deposits File). Istanbul: Alan Yayincilik.
Kara, N. (1984/85). "Tiirkiye'de £ok Partili Sisteme Gegis
Kararinin Nedenleri," (The Reasons behind the Decision
of Transition to Multi_Party System in Turkey). Yapit.
8, pp.64-75.
Karluk, N. (1983). Tiirkiye'de Yabanci Sermaye Yatirimlari.
(The Foreign Investments in Turkey). Istanbul:ITO
Yayinlari.
Karpat, K. (1959). Turkey1s Politics. Princeton: Princeton
University Press.
Karpat, K. (1973). Social Change and Politics in Turkey.
Leiden: E. J. Brill.
Kay, G. (1975). Development and Underdevelopment: A
Marxist Analysis. London: MacMillan.
Kazgan, G. (1985). Ekonomide Pisa Agik Biiyume. (Growth in
the Open Economy). Istanbul: Altin Kitaplar.
407
Kepenek, Y. (1986). Turkiye Ekonomisi. (Turkish Economy).
Ankara: Teori Yayinlari. J
i
Kepenek, Y. (1990). 100 Soruda Tiirkiye'de Kami Iktisadi ;
Tesebbiisleri. (The SEEs in Turkey in 100 Questions). j
Istanbul: Gergek Yayinevi.
jKetenci, S. (1985). "Isgiler ve galisma Yasami: 1980'lerde;
! Sinirlar ve Sorunlar," (Workers and Work Life: Limits j
and Problems in the 1980s). Birakiniz Yapsinlar
Birakiniz Gegsinler. (Laissez Faires Laissez Passes)
pp.159-201, Ankara: Bilgi Yayinevi.
Keyder, g. (1979). "The Political Economy of Turkish;
! Democracy." New Left Review, 115, (May-June), pp. 3-45.'
i
iKeyder, g. (1984) Ithal Ikameci Sanayilesme ve geliskilen.
(Import Substitution Industrialization and its
Contradictions). Krizin Gelisimi ve Tiirkiye’de Altrnatif'
Sorunu. Istanbul: Kaynak Yayinlari. I
i
Keyder, g. (1987). State and Class in Turkey. London::
Verso. ;
i
Keyder, g. (1988). "Economic Development and Crisis: 1950j
1980" Turkey in Transition:New Perspectives. Edited by(
I. C. Schick and E. A. Tonak. New York: Oxford
University Press. J
Keyder, g. and F. Birtek, (1983). "Tiirkiye'de Devlet-Tarim
i Iliskileri, 1923-1950." (State-Agriculture Relations in'
! Turkey, 1923-1950). Toplumsal Tarih Qalismalari. edited
I by Keyder, g. Ankara: Dost Kitabevi Yayinlari. j
Keyder, g. and S. Pamuk, (1985/86). "1945 giftgiyi Toprak-j
landirma Kanunu tizerine Tezler," (Thesis on the 1945
Land Reform). Yapit, 8, pp.52-63. I
Kip, E. (1988). "Tiirkiye'de Taban Fiyatlari, Destekleme
Alimlari ve Ig Ticaret Hadler" (Floor Prices,!
Agricultural Support Purchases and Domestic Terms of
Trade in Turkey) . Tiirkiye'de Tarimsal Yapilar 1923-2000. !
(Agricultural Structures in Turkey 1923-2000). pp. 135-|
162. Edited by S. Pamuk and Z. Toprak. Ankara: Yurt
Yayinlari.
Kirkpatrick, C. H. et.al. (1984). Industrial Structure and
Policy in Less Developed Countries. London: Allen
Unwin.
408
Kitching, G. (1982). Development and Underdevelopment in
Historical Perspective, London: Methuen.
i
Kog, Y. (1981). "Planli Donemde Isgi Hareketini Belirleyen!
Etkenler," (Factors that Determined the Labor Movement;
i During the Planned Period). METU Studies in Development. ;
1981 Special Issue, pp.287-348. |
Kog, Y. (1982). "Tiirkiye'de galisma Yasamina Iliskin!
Veriler, Veri Kaynaklari ve Ozellikleri," (Data, Data1
j Sources and their Characteristics of Labor in Turkey).
j METU Studies in Development. 9, (2), pp.213-78.
:Kog, Y. (1986a). Tiirk-Is Neden Bovle? Nasil Deqisecek? (Why1
1 is TURK—IS as it is? How will it change?). Istanbul: 1
i
1 . I
|Kog, Y. (1986b). "Tiirkiye'de Sosyal Demokrasi vei
I Sendikacilik," (Social Democracy and Unionism in'
j Turkey). 11. Tez. 4, pp.107-139. Alan Yayincilik. j
Kog, Y. (1987). "Isgi haklari ve Sendikacilik," (Laborj
Rights and Unionism). 11. Tez, 5, pp.32-75. !
Kog, Y. (1988). "Isgi Haklari Tartismasi," (Labor Rights
Debate). 11. Tez. 8, pp.214-36.
jKonukman, A. (1986). "Ig Talebi Daraltma Politikasi-
Karsisinda Emek ve Tarim Gelirleri," (Labor andl
Agricultural Income against the Internal Demand!
Contraction Policies). Isbitiren Ekonomi. pp.243-55,!
Istanbul: Bilim ve Sanat Kitaplari. i
Krueger, A. (1974). Foreign Trade Regimes and Economic!
Development: Turkey. New York: NBER.
Kutal, G. (1977). Tiirkiye'de Isgi Sendikaciligi 1960-1968.
(Labor Unionism in Turkey between 1960 and i968).
Istanbul: IU-Iktisat Fakiiltesi Yayinlari.
Kiigiik, Y. (1981). "Tiirkiye'de Planlama Kavraminin Gelisimi
Uzerine" (On the Development of the Planning Concept
in Turkey). METU Studies in Development, pp.79-117
Laclau, E. (1977). Politics and Ideology in Marxist Theory.
London: New Left Books.
Lane, J. E. and S. Ersson. (1990). Comparative Political
Economy. London: Pinter Publisher.
j LAP (Latin American Perspectives) (1981). Dependency and
Marxism. 30-31, (Summer-Fall). j
Leaver, R. (1985). "Reformist Capitalist Development andj
the New International Division of Labour." South East!
Asia. pp. 149-171. Edited By R. Higgott and R.
Robison. London: Routledge Kegan and Paul.
'Leys, C. (1976). "The 'Overdeveloped' Post Colonial State:|
; A re-evaluation." Review of African Political Economy, !
5, (January-April), pp.pp.39-48. j
Leys, C. (1982). "Samuel Huntington and the End of;
; Classical Modernization Theory." Introduction to the
! Sociology of "Developing Societies", pp. 332-49. Edited
| by H. Alavi and T. Shanin. New York: Monthly Review. i
i
Leys, C. (1983). "Underdevelopment and Dependency." Neo-i
Marxist Theories of Development, pp. 29-49. Edited by
P. Limqueco and B. McFarlane. Kent: Croom Helm.
i
Limqueco, P. and McFarlane, B. (1983). Neo-Marxist Theories
of Development. London: Croom Helm.
Lipietz, A. (1982a). "Towards Global Fordism?" New Left
Review. 132, (March-April), pp. 33-48. j
Lipietz, A. (1982b). "Marx or Rostow?" New Left Review, !
132, (March-April), pp. 48-58. |
Lipietz, A. (1984). "How Monetarism Choked Third World
I Industrialization." New Left Review. 145, (May-June),
pp. 71-88. j
Lipietz, A. (1985). The Enchanted World. London: Verso.
Lipietz, A. (1986). Mirages and Miracles. London: Verso.
Lipset, S. M. (1959). "Some Requisites of Democracy."
American Political Science Review. 53, (March), pp. 69-
105. I
Mandel, E. (1970). "The Laws of Uneven Development." New
Left Review, 59, (January-February), pp. 19-39.
Manicas, P. T. (1985). "Explanation, Generalization and
Marxist Theory vis-a-vis Third World Development." |
Marxian Theory and the Third World,pp. 309-23, Edited
by D. Banerjee. New Delhi: Sage. i
410
Margulies, R. and E. Yildizoglu, (1988a). "Agrarian Change:
1923-1970" Turkey in Transition:Hew Perspectives. Edited
by I. C. Schick and E. A. Tonak. New York: Oxford
University Press.
Margulies, R. and E. Yildizoglu, (1988b). 1 1 Austerity
Packages and beyond: Turkey since 1980" Capital and
Class. 36, pp.141-162.
Marx, K. (1973). Grundrisse. Middlesex: Penguin.
Marx, K. (1977). Capital, Volume I. New York: Vintage.
Miliband, R. (1969). The State in Capitalist Society.
London: Winfield and Nicholson.
Miliband, R. (1983). "State Power and Class Interests." New
Left Review. 138, pp. 57-68.
Milor, V. (1988). The Genesis of Economic Planning in
Turkey. Unpublished dissertation chapter, Palo Alto: UG
Berkeley.
Mouzelis, N. P. (1986). Politics in the Semi-Periphery.
London: MacMillan.
Munck, R. (1984). Politics and Dependency in the World.
London: Zed.
Mumcuoglu, M. (1980). "Political Activities of Trade Unions
and Income Distribution." The Political Economy of
Income Distribution, pp. 379-408. Edited by E. Ozbudur.
and A. Ulusan. New York: Holmes and Meier.
01 Brien, D. C. (1979). "Modernization, Order and the
Erosion of a Democratic Ideal." Development Theory, pp.
49-76. Edited by D. Lehman. London: Frank Cass.
O' Brien, P. J. (1975). "A Critique of Latin American
Theories of Dependency." Beyond the Sociology oi
Development, pp. 7-27. Edited by I. Oxaal, T. Barnett,
D. Booth. London: Routledge and Kegan Paul.
01 Donnell, G. (1973). Modernization and Bureucratic
Authoritarianism: Studies in South American Politics.
Berkeley: Institute of International Studies, UC
Berkeley.
O' Donnell, G. (1979). "Tensions in -the Bureucratic
Authoritarian State and the Question of Democracy." The
New Authoritarianism in Latin America, pp. 285-318.
411.
Edited by D. Collier. Princeton: Princeton University
Press.
jo' Donnell, G. et al. (1986). Transitions from;
Authoritarian Rule. Baltimore: John Hopkins Press.
OECD ( 1 9 6 6 ) . Turkey. Paris: OECD Economic Surveys.
OECD ( 1 9 7 0 ) . Turkey. Paris: OECD Economic Surveys.
|OECD ( 1 9 7 4 ) . Turkey. Paris: OECD Economic Surveys.
iOECD ( 1 9 7 8 ) . Turkey. Paris: OECD Economic Surveys.
OECD ( 1 9 8 0 ) . Turkey. Paris: OECD Economic Surveys.
OECD ( 1 9 8 1 ) . Turkey. Paris: OECD Economic Surveys.
'Of f e, C. ( 1 9 8 4 ) . Contradictions of the Welfare State
Tiptree, Essex: Hutchinson & Co Ltd.
Okyar, O. (1965). "The Concept of Etatism," Economic
Journal. (March), pp.98-111.
Olgun, H. (1978). "1978 Yilinda Turk Ekonomisinde Ana
i Gelismeler" (Main Developments in the Turkish Economy;
in 1978). METU
! Studies in Development. 20, (Slimmer), pp. 91-106.
Organski, A. F. K. (1965). The Stages of Political
Development. New York: Alfred A. Knopf.
Oyal, E. (1981). Karma Girisimlerinde Kamu Katilimlari ve
: Turkiye1deki Uvaulama. (Public Participation in Mixed
I Enterprises and its Application in Turkey). Ankara: j
Turkiye ve Orta Dogu Amme Idaresi Enstitiisii Yayinlari.t
I
Oncii, A. (1980). "Chambers of Industryin Turkey: An Inquiry
into State-Industry Relations as a Distributive Domain
Domain," The Political Economy of Income Distribution
in Turkey, pp.455-81. Edited by E. Ozbudun and A.
• Ulusan, New York: Holmes & Meier Publishers.
L !
jOnder, I. (1988). "Cumhuriyet Doneminde Tarim Kesimine’
Uygulanan Vergi Politikasi" (The Agricultural Tax
Policies during the Republic Era). Tiirkiye'de Tarimsal
Yapilar 1923-2000. (Agricultural Structures in Turkey
1923-2000). pp. 113-134. Edited by S. Pamuk and Z.
Toprak. Ankara: Yurt Yayinlari.
412
Ozbudun, E. and A. Ulusan, (eds.) (1980). The Political
Economy of Income Distribution. New York: Holmes and
Meier.
dzmen, S. (1987). Tiirkiye'de ve Diinyada Kitlerin1
Ozellestirilmesi. Privatization of SEEs in Turkey and
in the World). Istanbul:Meter Matbaasi. t
!
(Palma, G. (1978) "Dependency: A Formal Theory of!
Underdevelopment or a Methodology for the Analysis of.
Concrete Situations of Underdevelopment?" World!
Development. 6, pp. 881-924.
JPamuk, S. (1984). "Ithal Ikamesi, Doviz Dar Bogazlari ve
Turkiye" (Import Substitution and Foreign Exchange,
! Bottlenecks in Turkey) . Krizin Gelisimi ve Tiirkiye'de!
I Altrnatif Sorunu. Istanbul: Kaynak Yayinlari.
Pamuk, S. (1986). "24 Ocak ve Dagilim," (24 January and
Distribution). 11. Tez. 2, pp.87-101.
1
Pamuk, S. (1987). "2. Diinya Savasi Yillarinda Devlet,!
Tarimsal Yapilar ve Boliisiim," (State, Agricultural!
Formations and Distribution during the Second World War
Years). 1. Tez. 7, pp.121-41.
Pamuk, S. (1988). "War, State Economic Policies and'
: Resistance by Agricultural Producers in Turkey 1939-
1945," New Perspectives on Turkey, 2, 1, pp.19-36.
Parkin, F. (1979). Marxism and Class Theory, London:
Tavistock. i
i
Pekin, F. (1985). Demokrasi, Sendika Ozaiirliiaii ve Sosyai
Haklar. (Democracy, Union Freedom and Social Rights).j
Istanbul: Alan Yayincilik.
!
Petras, J. (1981). "Toward a New Understanding of
Development and Underdevelopment." Latin American
Perspectives. 31-32, (Summer-Fall), pp. 148-55. !
Petras, J. (1984a). "Toward a Theory of Industrial)
Development in the Third World." Capitalist and
Socialist Crises in the Late Twentieth Century, pp. 71—j
95. Edited by J. Petras. Totawa, New Jersey: Rowman and
Allanheld.
Petras, J. (1984b). "The 'Peripheral State': Continuity and
Change in the International Division of Labour.")
Capitalist and Socialist Crises in the Late Twentieth
413
Century. pp.117-39. Edited by J. Petras, Totawa, New
Jersey: Rowman and Allanheld.
Petras, J. P. McMichael. and R. Rhodes. (1978).
"Industrialization in the Third World." Critical
Perspectives on Imperialism and Social Class in the
Third World, pp. 103-36. Edited by J. Petras. New York:
Monthly Review.
Poulantzas, N. (1969). "The Problem of the Capitalist
State." New Left Review. 58, pp. 67-78.
Poulantzas, N. (1973). Political Power and Social Classes,
London: New Left Books.
Poulantzas, N. (1974). Fascism and Dictatorship. London:
New Left Books.
Poulantzas, N. (1975). Classes in Contemporary Capitalism.
London: New Left Books.
Poulantzas, N. (1976). The Crisis of the Dictatorships.
London: New Left Books.
Poulantzas, N. (1978). State. Power, Socialism. London: New
Left Books.
Przeworski, A. (1985). Capitalism and Social Democracy.
Cambridge: Cambridge University Press.
Przeworski, A. (1986). "Material Interests, Class
Compromise, and the Transition to Socialism."
Analytical Marxism, pp.162-89, Edited By J. Roemer.
Cambridge: Cambridge University Press.
Przeworski, A. and M. Wallerstein, (1988). "Structural
Dependence of the State on Capital." American Political
Science Review. 82, pp. 11-29.
Randall, V., and Theobald, R. Political Change anc
Underdevelopment. Durham, North Carolina: Duke
University Press.
Richards, A. (1986). Development and Modes of Production in
Marxian Economics: A Critical Evaluation. London:
Harwood Academic Publishers.
Rivkin, A. (1965). Area Development for National Growth.
New York: Frederich A. Praeger.
Roemer, J. (1988). Free to Lose. Cambridge, MA: Harvard
University Press.
Rostow, W. W. (1960). The Stages of Economic Growth.
Cambridge: Cambridge University Press.
Rozaliyev, Y. N. (1978). Tiirkiye'de Kapitalizmin Gelisme
Ozellikleri. (Characteristics of the Development of
j Capitalism in Turkey). Ankara: Onur Yayinlari.
Rozaliyev, Y.N. (1979). Tiirkiye'de Siniflar ve Sinifi
Miicadeleleri. (The Classes and Class Struggles in'
Turkey). Istanbul: Beige Yayinlari. i
! ;
Rueschemeyer, D. and P. B. Evans. (1985). "The State and'
Economic Transformation: Toward an Analysis of the
j Conditions Underlying Effective Intervention." Bringing
i the State Back In. pp.44-78, Edited by P. B. Evans et'
al. Cambridge: Cambridge University Press. |
Rueschemeyer, D. et al. (1991). Capitalist Development and
Democracy. Chicago: University of Chicago Press. !
Saul, J. S. (1974). "The State in Post-Colonial Societies:
Tanzania." Socialist Register, pp. 349-372. Edited By
i R. Miliband and J. Saville. London: Merlin Press. j
Schiffer, J. (1981). "The Changing Post-War Pattern of
Development." World Development. 9. [
. . I
Savran, S. (1986). "CHP ve Sosyal Demokrasi: Bir Iliskinin;
Anatomisi", (RPP and Social Democracy: The Anatomy of;
a Relation). 11. Tez. 4, pp.78-106.
Savran, S. (1987). "1960, 1971, 1980: Toplumsal
Miicadeleler, Askeri Miidaheleler, " (1960, 1971, 1980:
Social Struggles, Military Interventions). 11. Tez. 6,
pp.132-69.
Saylan, G. (1981). "Planlama ve Burokrasi" (Planning and
the Bureucracy). METU Studies in Development, pp. 183-
207.
Saybasili, K. (1976a). "Chambers of Commerce and Industry,
Political Parties and Governments" METU Studies in
Development. 11, (Spring).
Saybasili, K. (1976b). "Tiirkiye'de Ozel Tesebbiis ve Ekonomi
Politikasi" (Private Enterprise and Economic Policies
in Turkey) MEU Studies in Development. 13, (Fall).
415
Saybasili, K. (1986). Devletin Ekonomive Mudahelesi. (The
Intervention of the State to the Economy). Ankara:
Birey Toplum.
Schick, I. C. and E. A. Tonak, (1988). "The International
Dimension:Trade, Aid and Debt, " Turkey in Transition:New
Perspectives. Edited by I. C. Schick and E. A. Tonak.
New York: Oxford University Press.
Senses, F. (1983). "An Assesment of Turkey's
Liberalization Attempts since 1980 against the
background of her Stabilization Program" METU Studies
in Development. 10, 3, pp.271-322.
Seyidoglu, H. (1982). Tiirkiye'de Sanayilesme ve Pis Ticaret
Politikasi. (Industrialization and Foreign Trade Policy
in Turkey). Ankara: Turhan Kitapevi.
Shabon, A. M. and I. U. Zeytinoglu, (1985). The Political.
Economic and Labor Climate in Turkey. Philadelphia:
University of Pennsylvania.
Shanin, T. (1983). Late Marx and the Russian Road. New
York: Monthly Review.
Silier, 0. (1981). TUrkiye'de Tarimsal Yaoinin Gelisimi
(1923-1938). (Development of the Agricultural Structure
in Turkey, 1923-1938). Istanbul: Bogazigi iiniversitesi
Yayinlari.
Singer, M. (1977). The Economic Advance of Turkey. 1938-
1960. Ankara: Turkish Economic Society Publications, j
Skocpol, T. (1979). States and Social Revolutions.
Cambridge: Cambridge University Press.
Skocpol, T. (1985). "Bringing State Back In: Strategies of
Analysis in Current Research." Bringing the State Back
In. pp. 3-44. Edited By P. B. Evans et al. Cambridge:'
Cambridge University Press.
Smith, T. (1979). "The Underdevelopment of Development
Literature: the Case of Dependency Theory." Worlc.
Politics. 31, (2), pp.247-88.
Smith, N. (1984). Uneven Development. Oxford: Basil
Blackwell.
Somel, K. (1979). "Agricultural Support Policies in
Turkey: A Survey of Literature" METU Studies in
Development, 6, 24/25, pp.275-323.
416
Sonmez, A. (1967). "The Re-emergence of the Idea of
Planning and the Scope and Targets of the 1963-1967
Plan," Planning in Turkey, pp.28-44. Edited by S. Ilkir.
and E. Inang. Ankara: ODTU-IIF Yayinlari.
Sonmez, M. (1980). Turkiye Ekonomisinde Bunalim - Birinci
Kitap. (The Crisis in the Turkish Economy - First!
Book). Istanbul:Beige Yayinlari.
Sonmez, M. (1984). Ozal Ekonomisi ve Isgi Haklari. (Ozal's
Economics and Labor Rights). Istanbul: Beige YayinlariJ
Sonmez, M. (1986). Turkiye Ekonomisinde Bunalim - Ikinci
Kitap.(The Crisis in the Turkish Economy - Second Book).
Istanbul:Beige Yayinlari.
Sonmez, M. (1987). Kirk Haramiler: Tiirkiye’de Holdinaler.
(40 Haramis: Turkish Holdings). Istanbul: Gozlem
Yayincilik.
Stepan, A. (1986). "Paths Toward Redemocratization:
Theoretical and Comparative Consideration." Transitions
From Authoritarian Rule-Comparative Perspectives, pp.64-
85. Edited by O’Donnell, et al. Baltimore: Johns;
Hopkins University Press.
Strinati, D. (1982). Capitalism, the State and Industrial
Relations. London: Croom Helm.
Sunar, I. and S. Sayari. (1986). "Democracy in Turkey:
Problems and Prospects" Transitions from Authoritarian
Rule: Southern Europe, pp. 165-186. Edited by G. O'j
Donnel et. al. Baltimore: John Hopkins University PressJ
Siilker, K. (1968). 100 Soruda Tiirkiye'de Isgi Hareketleri.
(Labor Movements in Turkey in 100 Questions). Istanbul:
Gergek Yayincilik.
Siilker, K. (1975). Sendikacilar ve Politika. (Unionists ancl
Politics). Istanbul: May Yayinlari.
Siilker, K. (1976). 2 Konfederasyon:TURK-IS ve DISK.(2
Confederations: TURK-IS and DISK). Istanbul: Koza
Yayinlari.
Tarakli, D. (1976). Qiftgiyi Topraklandirma Kanunu. (Lane.
Reform). Ankara: ODTU Yayinlari.
Tayang, T. (1980). "Geciktirilen Grevler Uzerine bir
Degerlendirme," (An Evaluation of the Postponed
417
Strikes). METU Studies in Development, 7, (1&2),
pp.67-98.
i
Taylor, J. G. (1979). From Modernization to Modes ofi
Production. London: MacMillan. i
Tekeli, I. and S. Ilkin, (1977) "Devletgilik Oncesindej
Sanayi Politikasi Arayislari.1 1 (Searching for the.
Policies of Industrialization before Etatism). Tarihsel!
Gelisimi Iginde Turkiye Sanayii. (Turkish Industry in
its Historical Development). Ankara: TMMOB Yayinlari.
Tekeli, I. and S. Ilkin, (1981). Savas Sonrasi Ortaminda
1947 Turkiye Iktisadi Kalkinma Plani. (1947 Turkish'
Economic Development Plan in the aftermath of the War).i
Ankara: ODTU Yayinlari. J
Tezel, Y. S. (1982). Cumhurivet Doneminin Iktisadi Tarihi'
(1923-1950). (Economic History of Republic Period)J
Ankara: Yurt Yayinlari. i
Therborn, G. (1979). "The Travail of Latin American
Democracy." New Left Review. 113/114, (January-
April),pp. 71-111. .
Thomas, C. Y. (1984). The Rise of the Authoritarian State1
in Peripheral Societies. New York: Monthly Review. |
TMMOB, (1977). Tarihsel Gelisimi Iginde Turkiye Sanayii. !
(Turkish Industry in its Historical Development).
Ankara:TMMOB Yayinlari.
TOB. (1980). Economic Report. Istanbul: TOB Yayinlari.
TOB. (1985). Economic Report. Istanbul: TOB Yayinlari.
Torun, O. N. (1967). "The Establishment and the Structure of
the State Planning Organization" Planning in Turkey. t
edited by S. Ilkin and E. Inang, Ankara: ODTU-IIF
Yayinlari.
Toriiner, M. (1985). "Ucretler ve Maaslar, 1980-1984" (Wages
and Salaries). Birakiniz Yapsinlar Birakiniz Gegsinler. l
(Laissez Faires Laissez Passes) pp.202-212, Ankara:!
Bilgi Yayinevi. j
t
Trimberger, E. K. (1978). Revolution From Above: Military
Bureaucrats and Development in Japan. Turkey. Egypt and
Peru, New Jersey: New Brunswick, Transaction Books.
! 418
I
iTuncer, B. (1978). 1 1 The Regulatory Role of the Government
{ in the Turkish Economy " Readings in Turkish Economic
I Policy. edited by Fry, M. J. Istanbul: Bogazigi
Universitesi.
TUSIAD (1977). 1977 Yilina Girerken Turk Ekonomisi
(Turkish Economy entering into 1977). Istanbul:TUSIAD
Yayinlari.
TUSIAD (1978). 1978 Yilina Girerken Turk Ekonomisi
(Turkish Economy entering into 1978). Istanbul:TUSIADj
Yayinlari. j
j TUSIAD (1979a). 1979 Yilina Girerken Turk Ekonomisi^
i (Turkish Economy entering into 1979). Istanbul:TUSIAD’
! Yayinlari. j
TUSIAD (1979b). The Turkish Economy. Istanbul:TUSIAd!
Yayinlari. J
TUSIAD, (1980). 1980 Yilinin Ortalarinda Turk Ekonomisi. j
(Turkish Economy in mid-1980). Istanbul:TUSIAD
Yayinlari.
I
TUSIAD, (1982). KIT Raporu. (The SEE Report). Istanbul:
TUSIAD Yayinlari.
TUSIAD, (1986). Ozellestirme: KITlerin Halka Satislarinda
Basari Kosullari. (Privatization: The Success conditions'
in the Sales of the SEEs to the Public). Istanbul:TUSIAD
Yayinlari.
Tiiziin, G. (1977). "1950-1960 Doneminde Sanayilesme"
(Industrialization between 1950 and 1960). Tarihsel
Gelisimi Iginde Tiirkive Sanayii. (Turkish Industry in
its Historical Development). Ankara: TMMOB Yayinlari. j
Tiiziin, G. (1979). "Bur juvazinin Niyetleri Uzerine
Diisiinceler" (Thoughts on the Intentions of the'
Bourgeoisie). Yurt ve Dlinya. November, 18, pp.334-58. j
I
Tiiziin, G. (1981). " Bunalim, Ekonomi Politikalari Planlama;
ve Devlet" (Crisis, Economic Policies, Planning and the1
State). METU Studies in Development, pp. 3-19. j
Uca, M. N. (1983). Workers1 Participation and Self-!
Management. The Hague: Institute of Social Studies. I
!
Uludag, I. (1986). Sanayilesme Strateiileri Yoniinderi
Yatirim Tesvikleri. (Investment Subsidies in Development1
Strategies). Istanbul: Marmara Universitesi.
419
Uras, T. G. (1967). What will the Second Five Year.
Development Plan Bring to the Private Sector? Ankara:
DPT.
Uras, T. G. (1979). Turkiye1de Yabanci Sermaye Yatirimlari.
(Foreign Investments in Turkey). Istanbul:Iktisadi
Yayinlar.
Valenzuela, J. S. and A. Valenzuela. (1981). "Modernization
and Dependency: Alternative Perspectives in the Study!
of Latin American Underdevelopment." From Dependency
to Development, pp. 15-42. Edited by H. Munoz. Boulder,'
Colorado: Westview.
I
Vielle, P. (1988). "The State of the Periphery and its
Heritage." Economy and Society. 17, 1, pp. 52-89.
Wallerstein, I. (1974). The Modern World System. New York:
Academic Press.
Wallerstein, I. (1979). The Capitalist World Economy.
Cambridge: Cambridge University Press.
Walstedt, B. (1980). State Manufacturing Enterprise in a
Mixed Economy: The Turkish Case. Baltimore: The Johns
Hopkins University Press. j
Warren, B. (1973). "Imperialism and Capitalist'
Industrialization.1 1 New Left Review. 81, (September-
October), pp. 3-45.
Warren, B. (1977). Inflation and Wages in Underdeveloped
Countries. London: Frank Cass and Co. Ltd.
Warren, B. (1980). Imperialism: Pioneer of Capitalism.
London: New Left Books.
Weaver, F. S. (1981). Class. State and Industrial
Structure- The Historical Process of South American
Industrial Growth. Connecticut: Greenwood Press.
Weeks, J. (1981). "The Differences Between Materialist
Theory and Dependency Theory and Why They Matter." Latin
American Perspectives. 31-32,(Summer-Fall), pp. 118-23.|
Weeks, J. (1985). Limits to Capitalist Development: The
Industrialization of Peru. 1950-1980. Boulder, Colorado:
Westview.
I
Weeks, J. and E. Dore. (1979). 1 1 International Exchange and.
the Causes of Backwardness." Latin American!
Perspectives. 21, (Spring), pp. 62-87.
Weiker, W. F. (1963). The Turkish Revolution. 1960-1961.
Washington, D.C. : The Brookings Institution.
White, G. (1984). "Developmental States and Socialist
Industrialization in the Third World." Journal of
Development Studies, pp. 97-120.
Whitehead, L. (1986). "International Aspects of
Democratization." Transitions From Authoritarian Rule-!
Comparative Perspectives. pp.3-47. Edited by
O'Donnell, et al. Baltimore: John Hopkins UP.
World Bank. (1980). Turkey: Policies and Prospects for
Growth. Washington, D. C.: World Bank
World Bank. (1982). Turkey: Industrialization and Trade
Strategy. Washington, D. C.: World Bank
YASED. (1986). Contribution of Foreign Investment to
Turkish Economy. Istanbul: YASED Yayinlari.
Yerasimos, S. (1976). Azgelismislik Siirecinde Turkiye.
(Turkey, during her Underdevelopment Process). Istanbul:
Gozlem Yayinlari.
Yiiziin, A. (1982). Cumhuriyet Donemi Turk Banka Sistemi.
(Turkish Banking System during the Republic Era).
Istanbul : Der Yayinlari.
Zeitlin, M. (1984). The Civil Wars in Chile. New Jersey:
Princeton University Press.
Ziemann, W. and M. Lanzendorfer. (1977). "The State in
Peripheral Societies." Socialist Register, pp. 143-77.
Edited by R. Miliband and J. Saville, London: Merlin.

Linked assets

University of Southern California Dissertations and Theses

Conceptually similar

PDF

The Interventionist State Revisited: The Political Economy Of State-Business Relations In India

PDF

A multidimensional analysis of regional integration and cooperation: The case of the Economic Community of West African States

PDF

The politico-economic determinants of ASEAN regional economic cooperation

PDF

Policy formulation for the politico-economy of Greece: A system dynamics simulation

PDF

She Works Hard For The Money: Consumerism And The Movement Of Housewives Into Wage Work

PDF

Two essays in political economy of education and economics of immigration

PDF

The Role Of The State In The Development Of The Indonesian Textile And Garment Industries

PDF

Patronage, dependence and debt in peasant agriculture

PDF

Key factors in appraising development project in Egypt

PDF

A comparative examination of the impact of business -government relations on labor market reform in Egypt and Mexico, 1975--1995

PDF

The drivers of economic change: Technology, globalization, and demography

PDF

Globalization and the decline of the welfare state in less developed countries

PDF

An analysis of the developmental state: The case of the Vietnamese textile and garment industries

PDF

Analysis of the role of government in Taiwan's industrialization and economic development

PDF

By sea: The port nexus in the global commodity network (the case of the West Coast ports)

PDF

Dialectical feminism and contradictory economic systems: Campesina daily life from Somoza to Aleman

PDF

Special interest groups and the Lebanese conflict: A survey of attitudes

PDF

Countertrade: A theoretical and empirical investigation

PDF

Economic transition, micro- and small -scale enterprise in Zimbabwe, and the significance of participatory development to institutional economics

PDF

The articulation of state and foreign capital in an export processing zone: The case of Bayan Lepas, Malaysia

Asset Metadata

Creator Toros, Halil (author)

Core Title The political economy of the state and development strategies: A case study of Turkey, 1930-1980

Degree Doctor of Philosophy

Degree Program Political Economy and Public Policy

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag economics, general,OAI-PMH Harvest

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Elliott, John E. (committee chair), Brenner, Robert (committee member), Hamilton, Nora (committee member), Imrohoroglu, Selahattin (committee member), Kuran, Timur (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-278950

Unique identifier UC11258959

Identifier DP23394.pdf (filename),usctheses-c20-278950 (legacy record id)

Legacy Identifier DP23394.pdf

Dmrecord 278950

Document Type Dissertation

Rights Toros, Halil

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA