Issue 38 – Indebt(ed)ness and Indebtness in Turkey

Editors: Ali Rıza Güngen – Ümit Akçay

Foreign Borrowing in the Ottoman Empire and Egypt, and the Control Patterns of European Finance Capital in the 19th Century
Muammer Kaymak

The export of money capital which emerged during the first half of the 19th century as a solution for accumulation question of newly developing industrial capitalism, gained momentum from the 1850s onwards. During this period, finance capital which represents monopoly stage of capitalism, granted government loans to many countries in exchange for large variety of economic and political concessions. Following the economic crises of 1870s which led ultimately to insolvency of many countries, the lenders seized direct control of the fiscal revenues of these countries. This direct control which aimed to meet debt service payments, played a major role in encouraging productive capital exports for valorization of excess capital within lender countries. Thus, finance capital, on the one hand, built a hierarchial international division of labor which led to a dependent development path and on the other hand accelerated the development of capitalism in those countries to which it is exported. This paper investigates the functioning of foreign borrowing mechanism in the 19th century and its outcomes by focusing Ottoman Empire and Egypt experiences as debtors and it touches upon main properties of capitalism during this era.
Keywords: Foreign Debt, 19th century, finance capital, Ottoman Empire, Egypt.

Transfer of Worker Savings to Capital: The Case of Turkey and The State Investment Bank

Ferhat Akyüz

In particular the period from the early 1960s to the mid-1980s, worker savings in Turkey has taken an important role in productive capital investment. In this period, the role attributed to the worker savings is congruent with the public finance policy. It is argued in this study that savings of workers in Turkey were transferred to productive capital by appropriating them. Appropriation and transfer process was managed by the State Investment Bank. In this respect; through examining reports and balance sheets of the relevant institutions quantitative data are collected. The legal texts concerning this process are also analyzed. Consequently, through double negation, savings of the workers were subjected to financial capital. Labor savings through negation has become money capital in the hands of social security institutions. That money capital was then embodied in the state-owned enterprises. The embodiment was performed in two ways: in the first and indirect way, through public banks participating in the financing of state-owned enterprises and in the second and direct way through the financing of the state-owned enterprises by the State Investment Bank
Keywords: State Investment Bank, Amortization and Credit Fund, Savings of Workers.

Political Economy of Consumer Credit: The Case of Turkey
Elif Karaçimen

Over the last years household borrowing from financial institutions has historically reached unprecedented levels. Although in Marxist political economy credit and debt are examined in relation to their social and economic dimensions in general, it would not be wrong to say that to date there has not been enough emphasis on analysing the borrowing by wage earners from a Marxist approach. The main point that needs to be highlighted in analysing the borrowing of wage earners from a Marxist approach is that it is different from borrowing by capitalist as it is done mainly for the reproduction of labour power. Putting forth this peculiarity is also important for understanding how the rising indebtedness of workers has a disciplinary effect on labour. The aim of this study is first to discuss the opportunities that Marxist political economy offers to analyse borrowing by wage earners and then to discuss the causes and consequences of borrowing by wage earners in the case of Turkey. The analysis on Turkey starts by an evaluation of how and why the banking sector in Turkey has increasingly turned towards households as a source of profit. The paper then examines the characteristics of household borrowing and discusses the reasons behind the increased borrowing by labourers. An analysis of demand and supply side dynamics regarding the rising debt levels in Turkey signals the deepening of the already unequal power relation between banks and wage earners. It also reveals the growing dependence of workers on capital as a result of increased indebtedness.
Keywords: Marxist political economy, consumer credit; labour; Turkey; banking; debt.

Household Debt of Turkey in the 2000s: Housing Credit and Social Welfare
Başak Ergüder

Throughout 2000s, it is possible to talk about a debt economy, drawned into the debt cycle with the rise of the current account deficit because of the increased vulnerability of economy against interest rates, since economic growth target in Turkish economy has been becoming into a structure dependented on short-term borrowing. The housing sector which has important role in the dynamics of Turkey’s economic growth, has been experiencing an increase in the share of borrowing. The changes in the borrowing mechanism of the housing sector have significant effects on the income distribution and increased rates of household debts to having important tips to analyze the structure of economic growth target based on borrowing relationship in Turkey capitalism. In this study, it is aimed to underline the results of housing credits in terms of income distribution effects during the 2000s in Turkey. Borrowing case is the essential dynamic of economic growth for the public and it also become into a re-regulating mechanism of income distribution with increasing trend to be charged for the purposes of household in the housing market. Especially, with the debt economies generated by financialisation, it is to create much more direct and significant results in terms of social welfare.
Keywords: Debt economy, fiscal discipline, income distribution, housing sector, social welfare.

Public Debt Management in Turkey: Stylized Facts in the Post-2001 Crisis Period and Strategies in the Aftermath of the 2009 Crunch
Ali Rıza Güngen

This study provides an analysis of the stylized facts of the post-2001 crisis period regarding public debt and a documentation of the state guarantees and strategic orientation of the Treasury. Postcrisis transformations and restructuring was the product of the dominant economic paradigm. The arguments suggesting the resolution of public debt problems are not valid as implied by the
recent legal regulations and the sensitivity to capital flows of the accumulation process as well as the debt rollover. The ongoing restructuring of the state, assumption of private sector risks and the transmission of the international reform agendas as seen in the case of financial inclusion bring about new contradictions.
Keywords: Public Debt, Treasury, Financialization, Treasury Guarantees, Financial Inclusion.

Making of the Indebtedness and the ‘Indebted ’ in the Spaces of
Poverty
Elife Kart

The use of borrowing as a way of strategy to overcome poverty makes different patterns of indebtedness in all parts of the society visible. As indebtedness causes the poverty to gradually deepen, the patterns of “poverty” and “indebtedness” reproduce each other reciprocally in some cases. In this paper, the structural transformations that global economy and neo-liberal practices have led to regarding the notion of indebtedness, patterns of indebtedness and increasing number of indebted people are analyzed and the function of the debt-led domination in the making
of the indebted subject is explored. This study analyzes the strategies the poor have concerning their debts and the networks of indebtedness as well as their indebtedness patterns. At the same time the production of the “indebtedness” and “the indebted” is considered not only as a way of deepening poverty but also as the formation of debt society. The impact of “social exclusion” on individuals created by the aspects of indebtedness is discussed.
Keywords: Neo-liberalism, Indebtedness, New Poverty, Society of Debt, Social Exclusion.

From ‘Debt of Existence’ to Capital: An Essay for the Geneaolo gy of Debt
Sercan Çalcı

Today, capital has been gaining an opportunity for its development in the inner dynamics of social being via reproduction of indebted subjectivity. The case in question describes the dissemination of debt relations that are beyond the traditional debtor types to the whole social body and demonstrates that now it is impossible for human beings to be a subject of social relations without being included in debt relations. On the one hand this fact of debt requires a genealogy, on the other it gives the responsibility of creating conceptual onsets to the agenda of this text. For this purpose, this geneaological essay aims to focus on the concept of “debt of existence” which is a signifier of despotic order in Gilles Deleuze and Felix Guattari’s innovative book titled AntiOedipus with reference to observations of debtor-creditor relationship in Friedrich Nietzsche’s On the Geneaology of Morals. This text revives the claim that debt of existence has been proceeding under the mask of “infinite debt” to the capital by making a close reading of Maurizio Lazzarato’s The Making of The Indebted Man. This study focuses on the possibility of an ontological-political approach by presenting that the creation of indebtedness is a component of a power and control logic parallel to the flows of capital and aims to produce an axis for philosophical geneaology of indebtness.
Keywords: Debt, geneaology, debt of existence, infinite debt, Great Creditor, Homo Debitor, ontology.

The Relation between Conceptual Framework , Physical
Environment, Mode of Activity and Relations of Production
Siyaveş Azeri

Modern science is different from pre-modern science also in its conceptual structure and its claim to universality based on such conceptuality. Science’s universality is due to its being a knowing practice within capitalist social relations of production: modern scientific questions are determined by the social needs of capitalist society. Similar to all capitalist production, scientific production is also mediated by the category of abstract labour.
Keywords: Modern science, abstract labour, relations of production, concept, Marx, Vygotsky.