Quote:
Originally Posted by Winterfall8324
They claim growth is good, and there is no alternative to growth. If revenue and capital doesn't appreciate, then poverty and depression are bound to follow. This does not follow logic and suggests there is more at play here, but this is a foundational belief economists follow.
The Ottoman Empire followed free trade dogma as a root between Europe and Asia along the silk road. As a result their industrial base was never formed, and any minimal investment that went to factory work was bankrupted by foreign competition.
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You just doomed your thread by making things up as you go along.
The fact that the Ottoman Empire was the conduit between Europe and Asia neither means nor proves the Ottomans practiced free trade.
Perhaps if you had an understanding of Economics, your comments wouldn't be so obtuse.
Not to talk over your head, but the Ottoman's practiced an economic policy called "provisionism."
Since you don't know what that is, I'll explain it.
The government's fiscal and tax policies were geared toward over-production of domestic goods. Since the Ottoman Empire was a Zero Level Agrarian society and never moved into the 1st or 2nd Level economies like Europe did in the late 18th Century, that meant domestic production was based on agriculture.
The purpose of over-producing is two-fold, 1) to ensure there are never shortages and 2) to keep prices stable, since there are never shortages, and keep prices low, since all domestic goods is over-produced.
Those policies, and specifically the
miri mubaya, actually prohibited the Empire from moving into the 1st and 2nd Level economies, which was a major cause in its decline.
Oh, sorry to talk over your head again. The
miri mubaya was a tax that ensured domestically produced goods were sold at below market rates.
So, what kind of economic system did the Ottoman's use? The Command System, not the Free Market System, right? When government dictates prices through policies, that is Command Economics.
Previously, in other threads, I addressed the use of
waqfs.
No such thing as inheritance in the Ottoman Empire. Other than your clothes and a few trinkets, the only way to leave your family anything was to create a
waqf, a sort of non-profit organization. It could be a school, hostel/hotel or soup kitchen or something that would give your spouse and children a place to live, a job opportunity and a steady income.
Note that the use of
waqfs prevented or limited private domestic investment.
The
miri mubaya created a situation where the focus is so heavily on domestic production, that you have to import those things you cannot produce because you have neither the labor nor other Capital, since that is all invested in domestic production.
The Empire had to import everything it didn't produce, and over time, its exports couldn't fund imports, so the government started borrowing heavily from European powers to pay for its imports.
Note that situation is not even remotely similar to the modern day US trade imbalance.
The Ottoman Empire also owned and operated the few major industries it did have. That is Socialism and Socialism in combination with Command Economics.
The Empire did not, of course, control the cottage industries, but note that the Empire's policies resulted in rural areas never being developed.
Ever wonder why those countries are backwards? Well, now you know, because that's one reason. All the tax money goes into State-owned enterprises, none of which were in rural or under-developed areas and that's because the focus was over-producing domestic products, namely agricultural products, to prevent shortages and keep prices stable and low.
Here's a new word for your limited vocabulary: Concession.
Because you make things up as you go along, and because your vocabulary and knowledge are so limited, you don't understand it was the Ottoman Empire that engaged in protectionist policies, not the Europeans.
The Ottoman's markets were closed.
Because of the many wars, and because the Empire borrowed heavily from Europeans to finance its many wars, the Empire was forced into concessions.
The first concession was with Britain. It allowed British investors to come into the Empire and set up shop.
Because Britain was leading the Industrial Revolution and the Empire was ignoring the Industrial Revolution, the Brits could out produce the Ottomans.
So, the Brits came in, and using modern production methods, out-produced the Ottomans who were still using 15th Century production methods.
That caused domestic markets to collapse.
While the Empire did issue the last of the
Tanzimat reforms in 1879, the Empire had lavished tax money on itself, couldn't export squat, couldn't produce anything, was heavily indebted to foreign countries to fiance the lavishness the tax money couldn't and all the wars and all the things they imported, so there was not a lot of money to get with the program and join the Industrial Revolution, which by now was more than a century old.
If you want to see the failure of the Ottoman Empire, look at Egypt.
Little Egypt exported 4x-6x more than the entire freaking Ottoman Empire.
Why? Because Egypt got with the program and modernized, which allowed it to produce more goods with far fewer people.
Wanna know how pathetic the Ottoman Empire was?
Who build their rail system?
Not the Empire. It was Britain and Germany who came in the 1890s with British and German and Belgian money and built the railroads, because the Ottomans didn't have any money.
Same with the ports.
The Empire had never done anything with its ports. Foreign countries had to come in with foreign money and expand all of the Empire's ports, because none of the ports could handle the newer larger ships that were being built by the rest of the world.
How sad is that?
Anyway, you'll probably want to read and study the Ottoman Empire at least once in your life before screaming, "
Free Trade!"
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