Fall of the Ottoman Empire

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Republic of Turkey (superimposed upon modern borders).

Some scholars argue the power of the Caliphate began waning by 1683, and without the acquisition of significant new wealth the Empire went into a slow decline.Fact|date=July 2008 [http://www.bbc.co.uk/religion/religions/islam/history/ottomanempire_7.shtml Decline of the Ottomans] ] Ottomanist scholars however have based research on Ottoman archives that show the decline narrative to be tenuous at best — an economically vibrant and growing empire with a sophisticated political leadership brought to a premature end after the first world war is a more accurate historiography. [Faroqhi, S, Towns and Townsmen of Ottoman Anatolia: Trade, Crafts and Food Production in an Urban Setting, 1520-1650] [Reilly, J A, “An Economic and Social History of the Ottoman Empire, 1300-1914”, Canadian Journal of History, Dec 1996] [Özmucur, S and Pamuk, S, “Real Wages and the Standards of Living in the Ottoman Empire 1489-1914”, International Journal of Middle East Studies, Vol. 37, Iss. 04, Nov 2005, p. 290]

The Ottoman State

The Ottomans saw military expansion and fiscalism as the source of wealth, with agriculture seen as more important than manufacture and commerce. [Berkes described the Ottoman economy as a “war economy” where its primary revenue comprised booty from expansion. This idea has been supported by Ottomanists Halil Inalcik, 1994, op cit, and Suraiya Faroqhi — Faroqhi, S, "The Ottoman Empire and the World Around it", "The Library of Ottoman Studies" 7, I. B. Tauris, London, 2004] Western mercantilists gave more emphasis to manufacture and industry in the wealth-power-wealth equation, moving towards capitalist economics comprising expanding industries and markets whereas the Ottomans continued along the trajectory of territorial expansion, traditional monopolies, conservative land holding and agriculture. [In economic terms, neither the Marxian Asiatic mode of production, nor the feudal mode found in mediaeval Europe reflect the Ottoman economy accurately, as it falls somewhere in between the two — excess peasant production was taxed by the state as opposed to it being paid in rent to feudal lords — Faroqhi, S, 1999, pp. 189-91]

Demographics

Ottoman censuses began in the early nineteenth century, with population approximations having to be created with demographic patterns for earlier periods. [The Ottomans developed an efficient system for counting the empire’s population in 1826, a quarter of a century after such procedures were introduced in Britain, France and America – Shaw, S J, “The Ottoman Census System and Population, 1831-1914”, International Journal of Middle East Studies, Cambridge University Press, 1978, p. 325] It is unclear why the population in the eighteenth century was lower than that in the sixteenth century. However, it began to rise to reach 25-32 million in 1800, with around 10 million in the European provinces (primarily the Balkans), 11 million in the Asiatic provinces and around 3 million in the African provinces. Population densities were higher in the European provinces, double those in Anatolia, which were triple Iraq or Syria and five times Arabia. [Quataert, D, 2000, op cit, pp. 110-11] In 1914, the Ottoman population was 26 million, similar to that of 1800, in between being reduced from over 3 million square kilometres to around a third. This means there was a doubling of population, increasing population densities in the empire. The average lifespan comprised 49 years towards the end of the empire, compared to mid-twenties in Serbia at the beginning of the nineteenth century. [Ibid, p. 112] Epidemic diseases and famine caused major disruption and demographic changes. In 1785 around one sixth of the Egyptian population died from plague and Aleppo saw its population reduced by twenty percent in the 1700s. Six famines hit Egypt alone between 1687 and 1731 and the last famine to hit Anatolia was four decades later. [Ibid, p. 113] They were brought under control in the nineteenth century with improvements in sanitation, healthcare and transportation of foodstuffs.

The rise of port cities saw the clustering of populations caused by the growth of steamships and railroads. Urbanization increased from 1700-1922, with towns and cities growing, especially with the improvements in health and sanitation, which made them more attractive to live and work. Port cities like Salonica, in Greece, saw a population rise from 55,000 in 1800 to 160,000 in 1912 and Izmir saw 150,000 in 1800 grow to 300,000 in 1914. [Ibid, p. 114; Pamuk, S, “The Ottoman Empire and the World Economy: The Nineteenth Century”, International Journal of Middle East Studies, Cambridge University Press, Vol. 23, No. 3, Aug. 1991] Some regions conversely had population falls — Belgrade saw its population drop from 25,000 to 8,000 due to political causes. [Ibid, p. 114] Population statistics thus mask varying experiences in different regions.

Economic and political migrations had impact across the empire, for instance the Russian and Austria-Habsburg annexation of the Crimean and Balkan regions saw large influxes of Muslim refugees – 200,000 Crimean Tartars fleeing to Dobruja. [Ibid, p. 115] Between 1783 and 1913, approximately 5-7 million refugees flooded into the Ottoman Empire, at least 3.8 million of whom were Russians. Some migrations left indelible marks such as tensions (Turkey and Bulgaria) whereas centrifugal effects were noticed in other territories, simpler demographics emerging from diverse populations. Economies were also impacted with the loss of artisans, merchants, manufacturers and agriculturists. [Ibid, p. 116]

Transport

During the nineteenth century, new technologies radically transformed the challenge of distance to both travel and communications. Through the invention of the steam engine in Britain, water and land transport revolutionised the conduct of trade and commerce. The steam ship meant journeys became predictable, times shrank and unimaginable weights could be carried more cheaply. Quataert cites the Istanbul-Venice route, a main trade artery, taking anything from fifteen to eighty-one days in the past, was now reduced to ten days. Sail ships would carry 50 to 100 tonnes — steamships could now carry 1,000 tonnes. [Comparatively ships like the Titanic could carry 66,000 tonnes — Quataert, D, 2000 op cit, pp. 117-8]

New routes once not possible were now traversible – rivers that carried cargoes only in one direction could now be traversed both ways bringing innumerable benefits to regions. New routes like the Suez Canal were created, prompted by steamships, changing trade demographics across the Near East as trade was rerouted. Quataert’s research shows volume of trade began to rise in the nineteenth century. By 1900 sailboats accounted for 5 percent of ships visiting the Istanbul, however this 5 percent was greater in number than any year of the nineteenth century. In 1873, Istanbul handled 4.5 million tons of shipping – this was 10 million tons by 1900. These ships accelerated growth of port cities with deep harbours to accommodate ever-growing ships. Europeans however owned 90 percent of commercial shipping operating in Ottoman waters. Not all regions benefitted from steam ships as rerouting meant trade from Iran, Iraq and Arabia now did not need to go through Istanbul, Aleppo, and even Beirut, leading to losses in these territories. [Quataert, D, “European capital and Ottoman port workers, 1880-1909”, ed. Islamoglu-Inan, H, 2004, op cit, pp. 302; Ibid, pp. 116-8]

The Ottoman world split into the European provinces of wheeled transport and non-wheeled transport in Anatolia and the Arab world. Railroads revolutionized land transport profoundly, cutting journey times drastically promoting population movements and changing rural-urban relations. Railroads offered cheap and regular transport for bulk goods, allowing for the first time the potential of fertile interior regions to be exploited. When built near these regions agriculture developed rapidly with hundreds of thousands of tons of cereals being shipped by this way. Railroads had additional benefits for non-commercial passengers who began using them with 8 million passengers using the 1,054-mile Balkan lines and 7 million using the Anatolian 1,488 miles. Railroads also created a new source of employment, over 13,000 workers by 1911. [149] With low population densities and lack of capital, the Ottomans did not develop extensive railroad or shipping industries.Most of the capital for railroads came from European financiers, which gave them considerable financial control. [Ibid, pp. 116-21]

Existing economic activity did not fall, on the contrary rising. The business and animals used previously to transport goods between regions found new work in moving goods to and from trunk lines. The Aegean areas alone had over 10,000 camels working to supply local railroads — Ankara station had a thousand camels at a time waiting to unload goods. [Pamuk, S, 1987, op cit, p. 124] Furthermore, additional territories running by railroads came under development and agriculture. Like sailing vessels, land transport contributed to and invigorated trade and commerce across the empire.

Agriculture

The Ottoman Empire was an agrarian economy, labour scarce, land rich and capital poor. Majority of the population earned their living from small family holdings and this contributed to around 40 percent of taxes for the empire directly as well as indirectly through customs revenues on exports.

Cultivator families drew their livelihoods from a complex set of different economic activities and not merely from growing crops. This included growing a variety of crops for their own consumption as well as rearing animals for their milk and wool. Some rural families manufactured goods for sale to others, for instance Balkan villagers travelled to Anatolia and Syria for months to sell their wool cloth. [Islamoglu’s study of Anatolia from the seventeenth century onwards finds state policy by way of taxation and inheritance laws encouraged peasants to commercially develop fruits, vegetables and sheep — Islamoglu, 2004, ed. Islamoglu-Inan, H, op cit, p. 123] This pattern established for the eighteenth century had not significantly changed at the beginning of the twentieth century. [Quataert, D, 2000 op cit, pp. 128-9] That is not to say that there were no changes in the agrarian sector. Nomads played an important role in the economy, providing animal products, textiles and transportation. They were troublesome for the state and hard to control – sedentarization programs took place in the nineteenth century, coinciding with huge influxes of refugees. This dynamic had the effect of a decline in animal rearing by tribes and an increase in cultivation. The rising commercialization of agriculture commencing in the eighteenth century meant more people began to grow more. With increased urbanisation, new markets created greater demand, easily met with the advent of railroads. State policy requiring a greater portion of taxes to be paid in cash influenced the increased production. Finally, increased demand for consumer goods themselves drove an increase in production to pay for the same. [Ibid, pp. 129-30]

Quataert argues production rose due to a number of factors. An increase in productivity resulted from irrigation projects, intensive agriculture and utilisation of modern agricultural tools increasing in use throughout the nineteenth century. By 1900, tens of thousands of plows, reapers and other agricultural technologies such as combines were found across the Balkan, Anatolian and Arab lands. However, most of the increases in production came from vast areas of land coming under further cultivation. Families began increasing the amount of time at work, bringing fallow land into use. Sharecropping increased utilising land that had been for animal pasturage. Along with state policy, millions of refugees brought vast tracts of untilled land into production. The empty central Anatolian basin and steppe zone in the Syrian provinces were instances where government agencies parcelled out smallholdings of land to refugees. This was a recurring pattern across the empire, small landholdings the norm. Foreign holdings remained unusual despite Ottoman political weakness – probably due to strong local and notable resistance and labour shortages. Issawi et al have argued that division of labour was not possible, being based on religious grounds. [Issawi, C, The Economic History of the Middle East, 1800-1914, A book of Readings, University of Chicago Press, London, 1966, p. 114] Inalcik however demonstrates that division of labour was historically determined and open to change. Agricultural reform programs in the late nineteenth century saw the state founding agricultural schools, model farms, and education of a self-perpetuating bureaucracy of agrarian specialists focused on increasing agricultural exports. Between 1876 and 1908, the value of agricultural exports just from Anatolia rose by 45 per cent whilst tithe proceeds rose by 79 percent. [Quataert, D, “Dilemma of Development: The Agricultural Bank and Agricultural Reform in Ottoman Turkey, 1888-1908”, International Journal of Middle East Studies, 1975, pp. 210-11]

However, cheap American grain imports undermined agricultural economies across Europe in some cases causing outright economic and political crises. [Critz, J M; Olmstead, A L; Rhode, P W, “"Horn of Plenty": The Globalization of Mediterranean Horticulture and the Economic Development of Southern Europe, 1880-1930”, The Journal of Economic History, Economic History Association, Vol. 59, No. 2, Jun 1999, pp. 316-352]

Manufacture

Whilst looking at Ottoman manufacture, a significant area of technology transfer, Quataert argues one must not only look at large factories but also the small workshops: “One will find then find that Ottoman industry was not a “dying, unadaptive, unevolving sector... [but] vital, creative, evolving and diverse”. [Frangakis-Syrett, E, “Manufacturing and Technology Transfer in the Ottoman Empire, 1800-1914”, International Journal of Middle East Studies, 1994, p. 115]

Over the nineteenth century, a shift occurred to rural female labour with guild organized urban-based male labour less important. The global markets for Ottoman goods fell somewhat with certain sectors expanding. However, any changes were compensated by an increase in domestic consumption and demand. [Quataert, D, 2000 op cit, p. 132] Mechanized production even at its peak remained an insignificant portion of total output. The lack of capital, as in other areas of the economy, deterred the mechanization of production. Nonetheless, a number of factories did emerge in Istanbul, Ottoman Europe and Anatolia. In the 1830s steam powered silk reeling factories emerged in Salonica, Edirne, West Anatolia and the Lebanon. [Ibid, pp. 132-7; Frangakis-Syrett, E, 1994, op cit, p. 116]

Under the late eighteenth century fine textiles, hand-made yarns and leathers were in high demand outside the empire. However, these declined by the early nineteenth century and half a century later production for export re-emerged in the form of raw silk and oriental carpets. The two industries alone employed 100,000 persons in 1914 two-thirds in carpet-making for European and American buyers. Most workers were women and girls, receiving wages that were amongst the lowest in the manufacturing sector. Much of the manufacturing shifted to the urban areas during the eighteenth century, in order to benefit from the lower rural costs and wages. [Quataert, D, 2000, op cit, p. 133]

Guilds operating prior to the eighteenth century did see a decline through the eighteenth and nineteenth centuries. Guilds provided some form of security in prices, restricting production and controlling quality and provided support to members who hit hard times. However, with market forces driving down prices their importance declined, and with the Janissaries as their backers, being disbanded by Mahmut II in 1826, their fate was sealed. [Reeves-Ellington, B, op cit; Quataert, D, 2000, op cit, pp. 132-137]

By far the majority of producers targeted the 26 million domestic consumers who often lived in adjacent provinces to the producer. Analysing these producers is difficult, as they did not belong to organizations that left records.

Manufacturing through the period 1600-1914 witnessed remarkable continuities in the loci of manufacturing; industrial centers flourishing in the 1600s were often still active in 1914. [Inalcik, H and Quataert, D, 1994, op cit, p. 5] Manufacturing initially struggled against Asian and then European competition in the eighteenth and nineteenth centuries whereby handicraft industries were displaced by cheaper industrially produced imports. [Quataert’s study of the Istanbul port workers and their struggle over two decades against the European companies with indirect support from the state highlights the difference between colonial administrators elsewhere and the Ottoman government – Pamuk, S, “Social Disintegration and Popular Resistance in the Ottoman Empire, 1881-1908: Reactions to European Economic Penetration”., The Journal of Economic History, Economic History Association, Vol. 44, No. 3, Sep. 1984, pp. 872-73] However, manufacturing achieved surprising output levels, with the decline of some industries being more than compensated by the rise of new industries. [Quataert, D, 2000, op cit, p. 110] Decline of handicrafts production saw a shift of output move to agricultural commodity production and other manufacturing output. [For instance, silk reel production from the Levant emerged in the nineteenth century, as did the production of raw silks and carpets. Pamuk, S, 1987, op cit, p. 8]

Domestic

Domestic trade vastly exceeded international trade in both value and volume though researchers have little in direct measurements. [Quataert, D, 2000 op cit, pp. 126-7] Much of Ottoman history has been based on European archives that did not document the empire’s internal trade resulting in it being underestimated. [Faroqhi, S, 1999, op cit, p. 142]

Quataert illustrates the size of internal trade by considering some examples. The French Ambassador in 1759 commented that total textile imports into the empire would clothe a maximum of 800,000 of a population of at least 20 million. In 1914 less than a quarter of agricultural produce was being exported the rest being consumed internally. [Quataert, D, 2000 op cit, p. 126; Pamuk, S, 1984, op cit, p. 109] The early 1600s saw trade in Ottoman-made goods in the Damascus province exceeded five times the value of all foreign-made goods sold there. Finally, amongst the sparse internal trade data are some 1890s statistics for three non-leading cities. Their sum value of their interregional trade in the 1890s equalled around 5 percent of total Ottoman international export trade at the time. Given their minor status, cities like Istanbul, Edirne, Salonica, Damascus, Beirut or Aleppo being far greater than all three, this is impressively high. These major trade centres, dozens of medium sized towns, hundreds of small towns and thousands of villages remains uncounted – it puts into perspective the size of domestic trade. [Quataert, D, 2000 op cit, pp. 126-7]

Two factors that had major impact on both internal and international trade were wars and government policies. Wars had major impact on commerce especially where there were territorial losses that would rip apart Ottoman economic unity, often destroying relationships and patterns that had endured centuries. The role of government policy is more hotly debated – however most policy-promoted barriers to Ottoman international and internal commerce disappeared or were reduced sharply. [Ibid, pp. 124-5] However, there appears little to indicate a significant decline in internal trade other than disruption caused by war and ad-hoc territorial losses.

International

Global trade increased around sixty-fourfold in the nineteenth century whereas for the Ottomans it increased around ten to sixteenfold. Exports of cotton alone doubled between 1750 and 1789. The largest increases were recorded from the ports of Smyrna and Salonica in the Balkans, however they were partially offset by some reductions from Syria and Constantinople. While cotton exports to France and England doubled between the late seventeenth and late eighteenth centuries, exports of semi-processed goods to northwest Europe also increased. Whilst the Ottoman market was important to Europe in the sixteenth century, it was no longer so by 1900. The Ottoman Empire was not shrinking — quite the opposite in fact – however it was becoming relatively less significant. [Reeves-Ellington, B, op cit]

As regards trade imbalance, only Constantinople ran an import surplus. Both Lampe and McGowan argue that the empire as a whole, and the Balkans in particular, continued to record an export surplus throughout the period. [As early as 1850, French authorities became concerned that imports of 27.3 million francs from the Ottoman Empire exceeded what France was exporting to them 19.9 million francs and were anxious to balance the two figures — Raccagni, M, “The French Economic Interests in the Ottoman Empire”, International Journal of Middle East Studies, Cambridge University Press, 1980, p. 342] The balance of trade however moved against the Ottomans from the eighteenth century onwards. They would re-export high value luxury goods, mainly silks from the Far East and exported many of its own goods. Luxury goods began being imported. Through the eighteenth century, exports moved to unprocessed goods whilst at the same time commodities were imported from European colonies. Most of these commodities were produced by slave labour undercutting domestic production. However, according to most scholars, a favourable balance of trade still existed at the end of the eighteenth century. [Quataert, D, 2000, op cit, pp. 126] Nineteenth century trade increased multi-fold, however exports remained similar to eighteenth century levels. Foodstuffs and raw materials were the focus with carpets and raw silk appearing in the 1850s. [Pamuk, S, 1984, op cit, p. 109-111] Although the basket of exports remained generally constant, relative importance of the goods would vary considerably.

From the eighteenth century onwards, foreign merchants and Ottoman non-Muslims became dominant in the growing international trade. With increasing affluence, their political significance grew especially in Syria. Muslim merchants however dominated internal trade and trade between the interior and coastal cities. [In 1793, Aleppo alone issued 1,500 certificates to Ottoman non-Muslims for such privileges which through the course of the eighteenth century allowed them to replace their European counterparts. Istanbul boasted over 1,000 registered merchants in the early twentieth century, of which only 3 per cent comprised British, French or German merchants – Quataert, D, 2000, op cit, pp. 127-8]

Foreign trade, a minor part of the Ottoman economy, became slightly more important towards the end of the nineteenth century with the rise of protectionism in Europe and producers looking to new markets. Its growth was seen throughout the period under study, particularly the nineteenth century. Throughout, the balance of payments was roughly on par with no significant long-term deficits or surpluses.

Finance

Ottoman bureaucratic and military expenditure was raised by taxation, generally from the agrarian population. [Ibid, p. 71] Pamuk notes considerable variation in monetary policy and practice in different parts of the empire. Although there was monetary regulation, enforcement was often lax and little effort was made to control the activities of merchants, moneychangers, and financiers. [Under Islamic law usury was prohibited, Pamuk quotes a number of stratagems that were used, notably double-sale agreements. — Wilson, R, “A Monetary History of the Ottoman Empire”, Business History Review, Boston, Summer 2003, Vol. 77, Iss. 2, p. 384; Pamuk, S, 2000, op cit] During the "price revolution" of the sixteenth century, when inflation took off, there were price increases of around 500 percent [These figures are based on price indices Pamuk constructed for Istanbul in the sixteenth and seventeenth centuries; other scholars have recorded similar trends for the period — Ibid] from the end of the fifteenth century to the close of the seventeenth. [Pamuk argues the Turkish economic historian Omer Barkan is incorrect in attributing price rises to imported inflation rather the cause being the velocity of circulation of money drove prices up, as well as increasing commercialization with the growing use of money as a medium of exchange – Pamuk, S, 2001, op cit, pp. 73-85; Wilson, R, 2003, op cit, p. 384] However, the problem of inflation did not remain and the eighteenth century did not witness the problem again.

The eighteenth century witnessed increasing expenditure for military related expenditure and the nineteenth century for both bureaucracy and military. McNeil describes an Ottoman stagnation through centre-periphery relations – a moderately taxed centre with periphery provinces suffering the burden of costs. [McNeil’s contribution was informed by his research on relations between centres and peripheries of world empires — McNeil, W, Europe’s Steppe Frontier 1500-1800, The University of Chicago Press, London, 1964] Though this analysis may apply to some provinces, like Hungary, recent scholarship has found that most of the financing was through provinces closer to the centre. [Finkel, C, The Administration of Warfare: The Ottoman Military Campaigns in Hungary 1593-1606, Vol I, Vienna, VWGO, 1988, p. 308, cited by Faroqhi, S, 1999, op cit, p. 180] As the empire modernized itself in line with European powers, the role of the central state grew and diversified. In the past, it had contented itself with raising tax revenues and war making. It increasingly began to address education, health and public works, activities that used to be organised by religious leaders in the communities – this can be argued as being necessary in a rapidly changing world and was a necessary Ottoman response. At the end of the eighteenth century, there were around 2,000 civil officials ballooning to 35,000 in 1908. [Quataert, D, 2000, op cit, p. 62] The Ottoman military increasingly adopted western military technologies and methods, increasing army personnel of 120,000 in 1837 to over 120,000 in the 1880s. [Ibid, p. 63] Other innovations were increasingly being adopted including the telegraph, railroads and photography, utilised against old mediators who were increasingly marginalised. [These comprised diverse groups such as the Janissaries, guilds, tribes, religious authorities and provincial notables – Ibid, p. 63]

Up to 1850, the Ottoman Empire was the only empire to have never contracted foreign debt and its financial situation was generally sound. [Ibid, p. 341;] [Pamuk, S, 1984, op cit, p. 110] As the nineteenth century increased the state’s financial needs, it knew it could not raise the revenues from taxation or domestic borrowings, so resorted to massive debasement and then issued paper money. [Clay, C, “A Monetary History of the Ottoman Empire”, The Economic History Review, Economic History Society, Vol. 54, No. 1, Feb 2001, p. 204;] [Pamuk, S, 2001, op cit] It had considered European debt, which had surplus funds available for overseas investment, but avoided it aware of the associated dangers of European control. [Ibid, p. 71; Raccagni, M, “The French Economic Interests in the Ottoman Empire”, International Journal of Middle East Studies, Cambridge University Press, 1980, p. 343;] [Anderson, O, “Great Britain and the Beginnings of the Ottoman Public Debt, 1854-55”, The Historical Journal, Cambridge University Press, 1964, Vol. 7, No. 1, pp. 47-63;] [Clay, C, “The Origins of Modern Banking in the Levant: The Branch Network of the Imperial Ottoman Bank, 1890-1914”, International Journal of Middle East Studies, Cambridge University Press, Vol. 26, No. 4, Nov 1994, pp. 589-96] However, the Crimean war of 1853-1856 resulted in the necessity of such debt. [Between 1854 and 1881, the Ottoman Empire went through a critical phase of the history. Beginning with the first foreign loan in 1854, this process involved sporadic attempts by western powers to impose some control. From 1863 a second and more intense phase began leading to a snowballing effect of accumulated debts. In 1875, with external debt at 242 million Turkish pounds, over half the budgetary expenditures going toward its service, the Ottoman government facing a number of economic crises declared its inability to make repayments. The fall in tax revenues due to bad harvests and increased expenditure made worse by the costs of suppressing the uprisings in the Balkans hastened the slide into bankruptcy. After negotiations with the European powers, the Public Debt Administration was set up, to which certain revenues were assigned. This arrangement subjected the Ottomans to foreign financial control from which they failed to free themselves, in part because of continued borrowing. In 1914, the Ottoman debt stood at 139.1 million Turkish pounds, and the government was still dependent on European financiers — Clay, C, Gold for the Sultan: Western Bankers and Ottoman Finance, 1856-1881, IB Taurus, 2001;] [Anderson, O, “Great Britain and the Beginnings of the Ottoman Public Debt, 1854-55”, The Historical Journal, Cambridge University Press, 1964, Vol. 7, No. 1, pp. 47-63; Clay, C, 1994, op cit, p. 589;] [The Encyclopaedia of World History, http://www.bartleby.com/67/1341.html, reviewed 24/10/2007;] [Eldem, E, “Ottoman financial integration with Europe: foreign loans, the Ottoman Bank and the Ottoman public debt”, European Review, Cambridge University Press, Vol. 13, Iss. 03, July 2005, pp. 431-45; Pamuk, S, 1987, op cit, p. 57]

Why had the Ottomans not developed their own financial system in line with London and Paris? It was not for the want of trying. Since the beginning of the eighteenth century, the government was aware of the need for a reliable bank. The Galata bankers, mostly Greeks or Armenians, as well as the Bank of Constantinople did not have the capital or competence for such large undertakings. [Raccagni, M, “The French Economic Interests in the Ottoman Empire”, International Journal of Middle East Studies, Cambridge University Press, 1980, p. 343; Clay, C, 1994, op cit, pp. 589-90] As such, Ottoman borrowings followed the Heckscher-Ohlin theorem.

Borrowing spanned two distinct periods, 1854-1876 (see Table 4). The first is the most important resulted in defaults in 1875. Borrowings were normally at 4 to 5 percent of the nominal value of the bond, new issues however being sold at prices well below these values netted of commissions involved in the issue, resulting in a much higher effective borrowing rate – coupled with a deteriorating financial situation, the borrowing rate rarely went below 10 percent after 1960. [Pamuk, S, 1987, op cit, p. 59]

European involvement began with the creation of the Public Debt Administration, after which a relatively peaceful period meant no wartime expenditures and the budget could be balanced with lower levels of external borrowing. The semi-autonomous Egyptian province also ran up huge debts in the late nineteenth century resulting in foreign military intervention. With security from the Debt Administration further European capital entered the empire in railroad, port and public utility projects, increasing foreign capital control of the Ottoman economy. [Pamuk, S, 1987, op cit, pp. 130-1] The debt burden increased consuming a sizeable chunk of the Ottoman tax revenues – by the early 1910s deficits had began to grow again with military expenditure growing and another default may have occurred had it not been for the outbreak of the First World War.

The Decline Theory

Berkes was one of the first writers in the 1960s to summarise the works on Ottoman socio-economic history. [Berkes, N, 100 Soruda Turkiye Iktisat Tarihi, vol. 1: Osmanli Ekonomik Tarihinin Temelleri, vol. 2 Istanbul: Gercek Yayinevi, cited by Faroqhi, S, 1999, op cit, p. 189] He suggested one of the reasons for Ottoman economic decline was the inability of the ruling class to make a clear choice between war and the more conventional types of capital formation. [Berkes, N, The Development of Secularism in Turkey, McGill University Press, Montreal, 1964, pp. 23-9; Faroqhi, S, 1999, op cit, pp. 188-9] Berkes' work however focused on the confrontation of the Ottomans and the Europeans, though important however had little detail on the commercial activities of the state.

Itzkowitz and Inalcik state Ottoman writers attributed the Empire’s troubles to the dissolution of the circle of equity, erosion of the sultan’s authority, disruption of the timur system and the demise of the devshirme, “describing symptoms rather than causes”. [Itzkowitz, N, 1980, op cit, pp. 94; Inalcik, H, “The Ottoman State: Economy and Society, 1300-1600”, 1994,op cit, pp. 22-4] They argue causes comprised geographical and logistical limitations, population growth after the sixteenth century, inflation due to influx of Peruvian silver and the end of profitable conquests. [Ibid pp. 93-9] Itzkowitz states, “the state could find no remedy” to these problems, and Inalcik, “As a result of these upheavals, the Ottoman Empire of the seventeenth century was no longer the vital empire it had been in the sixteenth” [Inalcik, H, “The Ottoman State: Economy and Society, 1300-1600”, 1994,op cit, p. 25] – however neither show the issues remained a long-term problem.

Some argue several factors contributed to the Empire's decline:
* The European powers wanted to expandFact|date=July 2008
* Religious opposition to critical thinking; the "ulema" wanted to "protect" the populace from information that might be disseminated through books other than the Koran. Although Muslims had been aware of the printing press by the 13th century, but it was not until 1727—272 years after Gutenberg, and later still than the Chinese—that the Şeyhülislam released a fetva decreeing its compatibility with Islam. [cite book|first=S.M|last=Deen|title=Science Under Islam: Rise, Decline and Revival|pages=185-6|url=http://books.google.com/books?id=G-M3IRh22moC&pg=PA186&dq=ottoman+1727+1455&lr=&ei=zUzISL_BLITkygSA0sSVCg&client=firefox-a&sig=ACfU3U3UYNDt4x7qNqXGDhIddgsjMEIfGg#PPA186,M1|publisher=Lulu|isbn=9781847999429]
* Economic problems
** Competition from trade from the AmericasFact|date=July 2008
** Competition from cheap products from India and the Far EastFact|date=July 2008
** Development of other trade routesFact|date=July 2008
** Rising unemployment within the EmpireFact|date=July 2008
* Administrative problems
** Ottoman Empire became less centralised, and central control weakenedFact|date=July 2008
** Sultans being less severe in maintaining rigorous standards of integrity in the administration of the EmpireFact|date=July 2008
* Political problems
** Sultans becoming less sensitive to public opinionFact|date=July 2008
** The low quality Sultans of the 17th and 18th centuriesFact|date=July 2008
** The ending of the execution of Sultan's sons and brothers, imprisoning them insteadFact|date=July 2008
** This apparently humane process led to men becoming Sultan after spending years in prison — not the best training for absolute powerFact|date=July 2008

Economic problems

The fall of the Ottoman state is often attributed to the failure of its economic structure.Fact|date=July 2008 The Ottoman state organization was planned when the economics of the period were agricultural. Its public functions depended on public investments through an institution called vakifs. As the economy of the times changed, the Ottoman state was isolated from the public as its economic participation in development of the inns, hospitals, libraries, or indeed as explained before every function was dependent on public cooperation.Fact|date=July 2008 As the west moved to industrialization, Ottomans failed to adapt their system to the changes. Fact|date=July 2008 At the turn of the 19th century modern taxation was not used and utility investments were not adapted to modern needs.Fact|date=July 2008 With the change of trade routes, the Ottoman Empire lost its main income source. Inability to industrialize the state and too great a dependence on farmers as a source of revenue through taxation were other factors.Fact|date=July 2008 The economy of the Ottoman state was no match to its counterparts and signalled the end of the empire.Fact|date=July 2008 The trade dynamics were based on non-state elements.Fact|date=July 2008 As early as the 1470s Greeks and Jews were the premier traders, not the Ottomans.Fact|date=July 2008 The Ottoman state concept was based on establishing public order.Fact|date=July 2008 Consequently, the Ottomans were forced to protect the Greek elite in order to maintain a functioning economy. They were, moreover, constantly obliged to deal with social unrest among the empire's Greek community. When the Greek elite turned against the Ottomans, the empire lost control.Fact|date=July 2008 The Greek elite blamed the economic problems on the Ottomans and offered an escape route to Greeks by pursuing a nation of their own. In reality, even after the Greek revolution, the same elite was controlling the economy with the trade routes having already been altered.Fact|date=July 2008

Technology

The Industrial Revolution saw even greater changes. The Ottoman Empire did not have a social structure well adjusted to the free-market capitalism needed to build factories.Fact|date=July 2008 The Empire also lacked crucial supplies of coal and other needed commodities.Fact|date=July 2008

Communication technology of its time did not migrate into state structure.Fact|date=July 2008 With improvements in communication the population that was distributed along the trade routes became concentrated on the centres. This population was highly affected by the economic competition of that time.Fact|date=July 2008 The populations that moved into cities faced hardships which tested their patience, persistence, and adaptability. The Ottomans had to keep the system running under these social pressures.Fact|date=July 2008

Trade

During the rise and growth era, almost all trade between Asia and Europe had to pass through Ottoman lands or seas. Revolution in shipping in Europe beginning in the 16th century allowed European traders to by-pass the Empire. This also caused a major shift in trade patterns from the Mediterranean Sea to the oceans. With most of the Empire's population and major centres located on the Mediterranean, this greatly affected the Empire as well as other southern European states such as Italy.Fact|date=July 2008

An inevitable side effect of this large scale trade with Europe was increasing links between Ottoman provinces and Europeans. As Britain became dependent on Egyptian cotton for its textile mills, Britain became even more involved in the internal politics of that country, eventually declaring it a protectorate in 1882.Fact|date=July 2008 Lebanese silk was mostly shipped to Marseilles, and increasingly France came to dominate that area. Many of the provinces were more closely linked to Europe than to Istanbul. When railways were built, largely by Europeans, they linked to the coast, not to the capital.Fact|date=July 2008

As a result the Ottoman Empire shifted from being a producer of manufactured goods to being a producer of raw materials for European industry.Fact|date=July 2008 Different parts of the empire moved towards producing different commodities. Mount Lebanon became a centre of silk production. Syria, once one of the world's great steel producers, grew foodstuffs. Egypt became one of the world's largest producers of cotton.Fact|date=July 2008

Administrative problems

In any effort to modernize or reform the empire the Sultan was always opposed by the powerful military and religious elite who did not want to lose their traditional powers.Fact|date=July 2008 One of the most powerful of these elites was the powerful religious body known as the "ulema". If the "ulema" was displeased with a Sultan a decree known as a "fetva" would be issued and the Sultan would be removed from power.Fact|date=July 2008 The threat of a fetva was a powerful weapon used many times by the ulema to force the Sultan to back down from reforms.Fact|date=July 2008

Unstable leadership was also a problem. The second most powerful man in the Empire was the Grand Vizier, the advisor in chief to the Sultan. This position was considerably weakened by the fact that to prevent a "fetva" or coup the Sultan would often sacrifice his Grand Vizier.Fact|date=July 2008 In turbulent times Sultans would thus frequently go through dozens of Grand Viziers in only a few years. This prevented a stable government, the thing most required in turbulent times.Fact|date=July 2008

Other practices weakened the Empire's leadership. One of the most problematic was the method of ensuring that an uncle or brother of the Sultan did not try to seize power. For the duration of the Sultan's reign they would be locked away in a small apartment, known as a kafe, never to see the outside world. Whenever a Sultan died or was deposed of with no male heir, his brother or uncle would be taken out of the kafe and made ruler of the Empire.Fact|date=July 2008

Sultans could take several wives and many concubines. It was thus possible for a sultan to have many children, and in particular, many sons. A practice of fratricide grew up, in which on the death of a sultan, one of the sons would become the new sultan, who would then be isolated from all his brothers. Although this did not always happen, many were executed. The thought behind this practice was that it was considered important to remove any possibility of having different focal points for power, and a rationalisation was that the death of a few would be a small price to pay for political stability. The fear of civil war, in which many could die, was a strong driving force for this practice.Fact|date=July 2008

Political problems

The autocratic, imperial system of Ottoman rule changed little over the centuries, while its Western European neighbors slowly evolved into fairly stable nation-states.Fact|date=July 2008 The loss of nearly a quarter of the Empire's territory added to the already existing economic problems to make the situation ripe for revolution.Fact|date=July 2008 The situation was especially dangerous in Constantinople, which had thousands of refugees fleeing the Balkans. A number of small coups broke out, trying to overthrow the Sultan. None of them were well organized or even remotely successful, but they filled Abd-ul-Hamid II with a paranoia that led to a self-imposed isolation in the palace of Yildiz.Fact|date=July 2008

The entire Ottoman Empire was built around the Sultan, but he never left his palace and would only see a few trusted advisors.Fact|date=July 2008 Unlike other states of Europe, such as Germany, where a weak ruler could be made up for by a powerful Chancellor, there was no one who could make up for a weak Sultan.Fact|date=July 2008 While in his self-imposed exile the Sultan's Empire continued to fall apart.Fact|date=July 2008 Egypt had long been only loosely connected to the Ottoman Empire and in 1882 the British invaded it for the Suez Canal. In 1896 Crete revolted and received aid from the Greeks. This soon led to a war between the Ottoman Empire and its former province. For the first time in centuries the Ottoman Empire won a war unaided. Greece was invaded from the North and the Ottoman armies marched south as far as Lamia before King George I of Greece agreed to an armistice. Greece lost some of Thessaly, and had to pay an indemnity to Turkey. Crete was, however, given almost complete autonomy to appease Britain and Russia which did not want to see its Christian inhabitants returned to the Turks.Fact|date=July 2008

The military victory did nothing to stop the rise of revolutionary sentiments. In 1902 a meeting in Paris brought together the leadership of the "Young Turks" — a group, mainly made of students, who were fervent Turkish nationalists wishing to do away with the archaic Empire.Fact|date=July 2008 In Bulgaria and Macedonia terrorists started bombing Ottoman banks and government buildings demanding total independence. The two rebellions eventually joined in 1908 when an army regiment stationed in Macedonia rebelled and fled into the hills. It was joined by Macedonian rebels as well as large numbers of Young Turks. This group called itself the Committee of Union and Progress (CUP). Soon other regiments in Bulgaria and Rumelia mutinied as did many of the Anatolian soldiers sent in to end the rebellion. Abd-ul-Hamid had no choice but to give in to the revolutionaries' demands. A constitution was adopted and a parliament created. Abd-ul-Hamid was now the leader of an Ottoman constitutional monarchy. Soon after the first election, which CUP won easily, there was a counter coup by the more conservative military officers. The coup failed to destroy the new government, mainly due to the skill of an unknown Adjutant-Major named Mustafa Kemal. When the liberals discovered that the Sultan had aided the coup they decided that he must go. Thus a "fetva" was issued and Abd-ul-Hamid II's long reign was at an end.Fact|date=July 2008

Military

Inefficiencies originating from the size of the empire were significant.Fact|date=July 2008 Trying to keep the empire intact through internal and external wars was a costly process which compromised the Ottoman Empire's capacity to introduce reform.Fact|date=July 2008

To create a modern state out of the Ottoman Empire the area that most needed redevelopment was the military. Most Sultans realised this, but their efforts were repeatedly repelled. The most powerful group in the empire, and the one most averse to change, were members of the Sultan's personal army. These were known as the Janissaries. They were first created from a tax, known as the "devsirme". The "devsirme" was imposed on all Christians living in Ottoman controlled territory. Every five years one in five Christian sons were given to the Sultan. Some entered the civil service, some went into politics, and a few managed to rise to the position of Grand Vizier. The majority of the boys, however, entered the army. They were trained to be master warriors supremely loyal to the Sultan, and became known as the Janissaries. They were strictly led by an ancient code of honour and were ready to sacrifice themselves for their Sultan at any time. Over time, however, the Janissaries, with their great strength and close attachment to the Sultan, gained a great deal of power in the empire. With power came corruption, and during the 18th century the Janissary code of honour gradually disappeared. The Janissaries became rich through bribes and theft. They used their power to control the government, and do all that was possible to prevent changes to their traditional powers.Fact|date=July 2008 By the 1820s they were no more than a group of heavily armed thugs rebelling at even minor military changes. The situation was desperate; the Ottoman army had fallen so far behind the rest of Europe that any aggressive power could take the capital. In 1826 the Janissaries revolted against the Sultan's decree that forced them to wear western military uniforms. Rather than back down to the Janissary threat as all previous Sultans had, Mahmud II used his new artillery regiments against the Janissary barracks in Constantinople. The barracks was destroyed and all Janissaries trying to flee were killed. Outside the capital most of the Janissaries peacefully disbanded, but many of them were executed on charges of treason. With the removal of the Janissaries the path to military reform was now open, but after centuries of Janissary interference the Ottoman army could never fully recover. Fact|date=July 2008

To modernise the army and bring it up to European standards, outsiders were brought in. These outsiders were regarded with suspicion by the empire's elite.Fact|date=July 2008 The senior members of the army and government still thought that they were back in the 17th century when the Ottoman army was more powerful than any other on Earth; however, signs of decline were already evident. Catherine the Great annexed the Crimea and Georgia at the end of the 18th century, and the Sultan had no way to intervene. Bessarabia was lost in 1812 after the Ottomans attempted to take advantage of Russia's war with Napoleon. The first losses to Russia, an enemy of the empire for centuries, were a great embarrassment, but they were not enough to motivate reform. In the early part of the 19th century, the Ottoman Empire allied with France, and thus it was to the French that the Sultan turned for aid in rebuilding his military might. When they requested help from the Directory, a young artillery officer named Napoleon Bonaparte was to be sent to Constantinople. He did not go, for just days before he was to embark for the near east he proved himself useful to the directory by putting down a Parisian mob and was kept in France. It is interesting to think what a man of Napoleon's skill might have done with the Ottoman army. In his place a parade of French officers were brought in, but none of them could do a great deal. One example of an advisor who achieved limited success was the Baron de Tott. He succeeded in having a new foundry built to make artillery and he directed the construction of a new naval base. It was almost impossible for him to divert soldiers from the regular army into the new units. The new ships and guns that made it into service were too few to have much of an influence on the Ottoman military and de Tott returned home.Fact|date=July 2008

Criticism of the Decline Theories

The decline thesis has come under considerable criticism by Ottomanists in recent years. Attempts at identifying abstract theories rely on essentializing Muslim history in ahistorical ways, going against the considerable range of variation, contours and trends, in favour of implicit ideal types. The Ottomanist scholar Toledano states:

The main flaw of explanations based on the Ottoman decline is their all encompassing nature. With the growth in scope and sophistication of studies treating the history of the empire in the seventeenth to the nineteenth centuries, it has become increasingly difficult to maintain the uniform view of processes over such a large geographical expanse, during such a long period of time, and covering all aspects of human history – the political, the economic, the social, the cultural and others. [Toledano, E R, 1997, p. 157]

With explanations of a general decline thesis heavily contested amongst scholars this renders them doubtful. With such vastly varied accounts of the same phenomena, it questions the credibility of a decline thesis.

Demise of the Ottoman Caliphate

Historic Revisionism

The Ottoman expansion came to an abrupt halt in the late seventeenth century, when Ottoman armies were routed at Vienna leading to discussions amongst Ottoman intellectual circles of a decline. In 1603, the English historian Richard Knolles described the Ottomans as “the present terror of the world” and by the mid-nineteenth century, Tsar Nicholas II of Russia described it as “the sick man of Europe”, a term by which it was to become stigmatised despite the same term being used for a number of European states (including Italy and Scotland). [Itzkowitz, N, Ottoman Empire and Islamic Tradition, University of Chicago Press, London, 1980, p. 63] The financial problems of the Ottoman Empire were perceived to be at the heart of the growing disparity with the European powers, visible in territory, technology and warfare. [Braudel believed the destruction of the Muslim Mediterranean trade led to the Islamic decline, Pirenne’s theory mentioned above in effect reversed – Braudel, F, Grammaire des Civilisations, Flamarion, 1987, p. 117 — cited by Faroqhi, S, op cit, 2000, p. 19] Expanding into the Muslim world through occupations and intervention, they carved up the Ottoman Empire at the start of the twentieth century, leaving the Muslim world dumbfounded.

Subsequent nationalist movements, writers and politicians wrote about the Ottoman presence in very hostile and negative terms, with many works being vacuous, based on suspect sources and heavily biased. [In most textbooks on Bulgarian and Greek history for instance, six centuries of Ottoman history barely warrants a chapter and even then, a very dark and hostile one is presented.] Quataert states:

Given the nationalist logic of the nineteenth- and twentieth-century history writing, the Ottoman legacy has been difficult to assess and appreciate. The biases come from many sides. West and central European... old fears have persisted to the present day and arguably have been transformed into cultural prejudices... now being directed against the full membership of an Ottoman successor state, Turkey, into the European Union. Moreover, nationalist histories have dismissed the place of the multi-ethnic, multi-religious formation in historical evolution... In the more than thirty countries that now exist in territories once occupied by the Ottoman Empire, the Ottoman past until recently has been largely ignored and/or considered in extremely negative terms. [Quataert, D, “The Ottoman Empire, 1700-1922”, Cambridge University Press, Cambridge, 2000, p. 192]

Arabs and Turks in seeking a new identity and foundation for their states exhibited similar hostility, preferring to go back to the Pharaohs, Kings of Babylon and the Hittites of pre-Ottoman Anatolia. This hostility and often vilification, [Poppe, I and Ma’oz, M, 1997, Toledano, E R, “Ottoman-Local Elites”, op cit, p. 145] appears less to actual Ottoman policies and more to their state building processes. [In countries such as Serbia to Rumania, Turkey to Syria and Iraq — Quataert, D, 2000, op cit, pp. 193-5] Doumani’s study of the Arab region of Ottoman Palestine notes,

...most Arab nationalists view the entire Ottoman era as a period of oppressive Turkish rule which stifled Arab culture and socioeconomic development and paved the way for European colonial control and the Zionist takeover of Palestine... The intellectual foundation for this shared image can be traced to the extensive literature published during the nineteenth and early twentieth centuries by Westerners bent on “discovering,” hence reclaiming, the Holy Land from what they believed was a stagnant and declining Ottoman Empire.

European economic history concentrated on trade around the Mediterranean, the Americas, India and South East Asia, ignoring the empire in between that was the centre of the known world throughout this period. [Lewis, B, “Some Reflections on the Decline of the Ottoman Empire”, Studia Islamica, No. 9, 1958, pp. 111-27;“The Ottoman Empire stood at the crossroads of intercontinental trade... from the early sixteenth century up to World War I. At its peak in the seventeenth and eighteenth centuries, its population exceeded 30 million. One might have expected that the economic institutions that sustained this large, multiethnic entity for so long would be of interest to economic historians. Unfortunately, mainstream economic historians have long neglected the land regime, manufactures, economic policies, and the daily existence of ordinary men and women. As a result, the longevity of the Ottoman Empire remains an anomaly and even a mystery for many.” — Özmucur, S and Pamuk, S, “Real Wages and the Standards of Living in the Ottoman Empire 1489-1914”, International Journal of Middle East Studies, Vol. 37, Iss. 04, Nov 2005, p. 295]

Ottoman history has been rewritten for political and cultural advantage and speculative theories rife with inconsistent research, ahistorical assumptions and embedded biases. Regarding the Ottoman Industrial Revolution, Edward Clark said,

Ottoman responses to this European economic challenge are relatively unknown, and even the extensive and costly Ottoman industrial efforts of the 1840s seemingly have been dismissed as the casual, if not comical games of disinterested bureaucrats... What were the nature and magnitude of these Ottoman responses? What were Ottoman objectives? What main factors contributed to their failures? What if any achievements resulted? [ Clark, E C, “The Ottoman Industrial Revolution”, International Journal of Middle East Studies, Cambridge University Press, Vol. 5, No. 1, Jan 1974, pp. 65-6]

The complexity and multi-faceted nature of the Ottoman economy does not lend itself to the analyses that have been provided to date. Faroqhi cites earlier scholars (Gibbs and Bowen) who realised with the commencement of archival studies, details as well as major generalisations would need to be modified or even totally discarded. [Faroqhi, S, Approaching Ottoman History, Cambridge University Press, 1999, p. 177] She cites errors present in secondary literature passed over by generations, [ For the same reason the Ottomanist Boogert warns against the use of perceptions of the eighteenth century Ottoman capitulatory system by European and Western diplomats — Boogert, M H V D, “The capitulations and the Ottoman legal system; Qadis, Consuls and Beraths in the 18th century”, Studies in Islamic law and society, Vol. 21, Brill Academic Publishers, 2005]

Some errors may be just amusing, such as the story that the heads of the Ottoman religious-cum-legal hierarchy, the seyhulislams, if executed, were ground to death in a gigantic mortar and pestle... Others are more serious and have much hampered research, such as the inclination to explain anything and everything by Ottoman decline. [Faroqhi, S, 1999, op cit, p. 29]

Alternative Theories

Jonathan Grant questioned an inexorable decline thesis by considering military technology, showing the Ottomans could reproduce the latest military technology (however it is disputed whether the help of foreign expertise was necessary or not from the fifteenth century onwards Kenneth Chase (2003)) maintaining this relative position through two technology diffusions until the nineteenth century. They failed to keep pace with technology from the industrial revolution becoming dependant on imported weapons. [Grant, J, 1990, pp.179-202; cited also by Alam, 2002, op cit, p. 11; Alam, M S, op cit, pp. 64-8]

Islamoglu in her work on the peasants of Corum and Sivas takes an alternative view arguing an increase in population increased economic growth, cultivating more market-oriented crops as their numbers increased, rather than stunting it. [Faroqhi, S, 1999, pp. 104-6]

McCloskey argued that an increase in population should increase the volume of transactions and economic activity and lead to a decline in prices. [Pamuk, 2001, pp. 71-2] (Comparatively, historians argue one of the factors of Britain’s industrial revolution was a population increase growing from 7.5 million to 18 million in the late eighteenth century.) [Brown, R, Revolution, Radicalism and Reform, England 1780-1846, Cambridge University Press, Cambridge, 2000, pp. 116-17] Pamuk however highlights Morineau’s recent research with specie flows into Europe continuing to increase during the seventeenth century even after prices declined, casting doubts on the causality of inflation by bullion inflows. [Pamuk, S, 1987, p. 1; Pamuk, S, 2001]

Palairet and Pamuk argue domestic trade was more important to the empire, surpassing exports throughout the nineteenth century. Both Quataert and Palairet’s work suggest that in the second quarter of the nineteenth century there were impressive economic advances in the Ottoman Empire contradicting Wallerstein and Kasaba’s claim that “in the long run, the effects of incorporation of the Ottoman Empire into the world-economy proved to be catastrophic for manufacturing in the Ottoman realms as a whole.”

Cause of Demise

One of the distinguishing factors of the Ottoman Empire from other peripheries was that it was never colonised but was subject to inter-imperialist rivalry. The empire did have difficulty trying to protect and develop its nascent industries (which arguably contributed to its financial difficulties in the late nineteenth century), however this problem was no different to that faced by other nations at the time. Unable to develop financing models and techniques like the British and the Dutch, along with its inability to mobilise and equip reserves en masse like its European counterparts, this shortcoming contributed towards its military weakness and shrinking borders. With the defeat against the Russians in the mid-nineteenth century and fighting on many fronts, it had to capitulate against Britain and allow an influx of zero-tariff goods along with an increased European military presence on its lands resulting in a weakened position in international relations. These capitulations prevented it from reorganising itself through its own finances having to rely on European finance on unfavourable terms. A number of subsequent financial crises did emerge towards the end of the nineteenth century that increased European involvement in the empire’s internal affairs, primarily in collecting taxes from securities pledged against debt. However, with foreign debt dropping from 242 million Turkish pounds in 1875 to 139 million in 1914 these events appear overstated in the literature and cannot be construed as causes or be considered part of a larger decline.

Disruption to the centrifugal forces in the socio-political environment had little impact on the economy over the long run. The balance of power between the central and provincial authorities saw the power of the provincial ruler fall rapidly from 1808 with the successful recentralization reforms in the 1820s by Mahmud II.

The Ottomans did not seem to be considerably outpaced by the British Empire that developed in parallel nor any of its rivals. None developed uniform economies that outpaced the Ottomans in all areas – for instance, the British commercial strength developed around the textile industry with technological innovations being applied to other economic areas, such as coal, iron and steel. Through diplomacy and a strong navy, they were able to leverage their cheaply manufactured textiles to penetrate overseas markets achieving a host of economic objectives and benefits. A similar pattern of intensive use of technology with the limited resources of land and labour available to European countries allowed them to go through industrialisation and achieve rising levels of living.In conclusion, it appears that although there was no industrial revolution in the empire, it did achieve and sustain improving levels of living to its end. Without making full use of its labour and land resources, the Ottomans were in a strong position for long-term growth. Once labour and land became fully utilised, they had room for further growth by applying the intensive technologies and techniques being made use of by the Europeans (whose land and labour were scarcer). Overall, the Ottoman Empire was growing and expanding at the beginning of the twentieth century addressing a changing world, similar experiences and challenges faced by its contemporaries. Faroqhi and Quataert’s descriptions of the empire appear more appropriate; a series of calamities and changing world circumstances with the Ottoman Empire adopting to change rapidly but in relative terms not fast enough.

Those considering the late Ottoman period, seventeenth century onwards, seem better placed to argue a decline. However, there appears to be a tendency to assume a decline due to a relative shift in centre-provincial relations and problems the state faced. [Owen (1975) and (1981) – cited by Pamuk, S, The Ottoman Empire and European Capitalism, 1820-1913, Cambridge University Press, Cambridge, 1987, p. 7] As Williams comments,

The UK floods of the summer of 2007 offer an interesting analogy. The river Thames consumed towns and villages around Oxford, not because they were in decline, sinking beneath the waves, but because the river was rising. [Williams, M J, “The Empire Writes Back (to Michael Cox)”, International Affairs, Vol. 83, Iss. 4, Sept 2007, p. 948]

General overviews of Ottoman history can be made to cohere to a decline theory. However, when put to the test against detailed Ottoman archives, the decline thesis begins to unravel. The most important of industries in the empire was that of agriculture. Like the commercial and manufacturing sectors, it had its own internal dynamics whereby it was able to adapt to changes in trading conditions. Sometimes this would result in new centers, more often than not existing methods changing or new products developing to capture new markets and opportunities.

The historian Ira Lapidus argues the main challenge the Ottomans appeared to struggle with unsuccessfully, remaining a legacy across the modern Muslim world, was that of a socio-cultural political identity. It explains why the Ottoman society was unable to meet the challenges of leading a heterogeneous society in the twentieth century. The European territories for the first time created a balance in the Muslim empire where non-Muslims were a majority – the socio-political identity of Turkic-Persian-Islam seemed unable to provide a cohesive and unitary identity that the entire population could accept and remain loyal. [Deringil, S, “The Invention of Tradition as Public Image in the Late Ottoman Empire”, 1808 to 1908, Comparative Studies in Society and History, 1993; Lieven, D, “Dilemmas of Empire 1850-1918. Power, Territory, Identity”, Journal of Contemporary History, 1999]

The Ottomans with Britain, France and Russia dominated global politics in the nineteenth century. Like contemporary European states, had to form ever-changing alliances playing one power off against another preventing any one to be in a position to take on the empire. However, they suffered from the disadvantage of maintaining territorial integrity from nationalistic forces in the European territories. It was only after the First World War, with its strongest ally Germany defeated, Russia marginalised, the Austria-Hungary Empire in tatters, the stage became clear for Britain and France to divide its territories between themselves without the involvement of the other powers (as planned in secret agreements made during the war.) [Quataert, D, 2000, pp. 56-72] Prior to this, a delicate balance between the powers was maintained, whereby no one of them was allowed to disrupt this balance in their favour. [Russia’s policy in this balance evolved to perpetuate Turkish weakness so that she was open to Russian influence. The means used by Russia were military pressure, diplomatic activity and after 1878, the indemnity to block Turkish loans destined for military and economic modernization. Germany however tried to work with Turkey to modernize and strengthen her to develop the economic potential, a policy contrary to the Russians — Milgrim, M R, “An Overlooked Problem in Turkish-Russian Relations: The 1878 War Indemnity”, International Journal of Middle East Studies, Cambridge University Press, Vol. 9, No. 4. Nov 1978, p. 521-24]

ee also

*History of Turkey
*French colonial empires
*German Empire
*Italian Empire
*Russian Empire
*Byzantine Empire
*Armenian Genocide

References

External links

* [http://www.muslimdecline.blogspot.com/ What went wrong in the Muslim World?]