Academic journal article International Journal of Turkish Studies

Capital Accumulation and Family Business Networks in Late Ottoman Izmir

Academic journal article International Journal of Turkish Studies

Capital Accumulation and Family Business Networks in Late Ottoman Izmir

Article excerpt

Introduction

One of the most understudied subjects in the economic history of the Middle East is the level, rate and degree of capital accumulation achieved in the late nineteenth and early twentieth centuries. This is true for even the most complex regional economies in the western maritime parts of the Ottoman Empire due to the difficulty of locating adequate data to measure and quantify. Still, it is certainly evident that capital accumulation did take place, for the rapid rate of growth and structural change in the economy ca. 1870-1920 would not have otherwise been possible. Even if we cannot quantify it, then, we should be able to document the process and manifestations of capital accumulation as well as its causes and impact.

One way to start such an analysis would be to examine the changes that took place in Ottoman society-in lifestyle and cultural attitudes, in the shaping of public opinion through the expansion of local print media, in the construction of urban mass transportation and an array of public utilities for commercial and residential use and in the appearance of trade unions particularly in transportation and among dock workers (hamals). Although such changes took place incrementally, they did so in an accumulative manner, permeating the very fabric of society and affecting in variable ways all socio-economic groups, not only the elites or labor. Furthermore, the cultural changes of secularization and modernization, spurred by increasing connectivity with markets from the Middle East to Europe and beyond, were crucial elements in the process of capital growth in the latter part of the nineteenth and early twentieth centuries. Indeed, as will be illustrated below, without a close and interactive relationship among the above-mentioned features, capital accumulation would not have taken place at all, let alone at the rate that it did.

In our analysis we privilege the urban setting and specifically the port-cities of the late nineteenth- and early twentieth-century Ottoman Mediterranean as having the most propitious economic conditions to drive the engine of capital accumulation in the Middle East. Further, we consider the emergence, growth and evolution of the corporate sector manifested in late Ottoman Izmir and its wider hinterland of western Anatolia and the Aegean islands to be a most fitting paradigm of capital growth. Although the corporate sector of Izmir was an economic sector par excellence, for which capital accumulation was sine qua non, the city's society, social networks, lifestyle and the interconnections between them reinforced capital growth. Simply stated, entrepreneurs in Izmir were, as they had to be, ready to receive or to seek out, accept and appropriate messages about new forms of business activity and organization in order to establish incorporated limited liability companies in a profitable and effective manner. Beyond having sufficient capital resources, they had to learn what to do and how to do it through the media,* 1 their associates' correspondence or the experiences of friends in the city, in the empire or abroad. They then needed to evaluate and internalize the information appropriately and proceed accordingly. Such knowledge acquisition was itself derived from the modernity of Izmir and from the urbanity that was globally so iconic of the period, encompassing changes in patterns of consumption that went from household furnishings to physical changes in the city's landscape itself. Such lifestyle changes affected not only Izmir's haute bourgeoisie but also its middle and lower- middle ranks, whose purchasing power may have been less but whose goals, tastes and aspirations often sought the same end.2

While lifestyle changes were integral to the adoption of new business norms, including the emergence of a corporate sector, the latter, in turn, affected the rate and nature of other transformative changes the city underwent. Incorporated limited liability companies, initially established in Western Europe, were often the driving force in the realization of such infrastructure projects as urban mass transportation and public utilities that changed a cityscape and its inhabitants' lives forever. …

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