# National economy (Turkey)

National economy (Turkish: Millî İktisat) is an economic plan which sought to industrialize the Ottoman Empire through corporatism, protectionism, and statist measures. This would be done by curating an enigmatic indigenous (Turkish–Muslim) bourgeoisie. Kleptocraticy was an important detail in this endeavor, as confiscation was used against foreign assets and native Christian upper-classes (which primarily occurred as a result of the Armenian genocide and expulsion of Greeks) and their replacement by Muslim Turks in addition to large-scale confiscation and redistribution of Christian-owned property. Envisioned by Ziya Gökalp and Alexander Parvus it was carried out by successive Ottoman and Turkish governments. Türk Yurdu announced 1915 as the starting year of the national economy. To Emil Ludwig, Talaat Pasha mentioned that the loss of the Armenian workforce would damage the economy for a short while, but that Turks would step in their positions and replace the Armenians soon.

## Economic policy of the CUP

Before the 1908 revolution, the Committee of Union and Progress held extremist views of the economy, for example advocating for boycotts against Armenian goods and shutting down the Public Debt Administration. Post revolutionary success gave way to a pragmatic economic policy. Other than encouragement of domestic production projects, the CUP largely followed a liberal economic policy to Mehmed Cavid's designs, resulting in a large increase in foreign investment between 1908 and 1913 despite the volatility of the Ottoman Empire's international standing. When it came to the strike actions, the committee sided with the capitalists to suppress labour and the guilds (guilds were abolished in 1913). For the countryside, the CUP did not attempt land redistribution or end the practice of sharecropping, though they did encourage the modernization of agriculture.
However following the radicalization of the CUP post-Balkan Wars, the committee switched back to extremist rhetoric in the economy, advocating for Muslim Turkish domination of the economy at the expense of non-Muslim and non-domestic business. After signing a secret alliance with Germany, the Ottoman government announced the suspension of its debt payments. With the Great Powers distracted as World War I began, on 1 October, the Ottoman Empire unilaterally abolished the capitulations. Import tariffs were reformed to apply to specific goods in place of the previous ad valorem regime. The July 1914 Law on the Encouragement of Industry was a protectionist measure to prefer Ottoman products even if they were 10% more expensive than an equivalent import. These protectionist measures took inspiration of Alexander Parvus, a Marxist economist close to the Unionists who advocated for the construction of a strong embryonic bourgeoisie. 19th century German industrialization was to be the example of Ottoman industrialists. Another architect of National Economy was Kara Kemal Bey, the CUP Istanbul party-boss and head of the Special Trade Commission [Heyet-i Mahsusa-i Ticariye].
National Economy, "Millî İktisat", was a combination of corporatism, protectionism, and statist economic policies. This became a formal platform of CUP policy in their 1916 congress, whose goal was to create an indigenous Turkish-Muslim bourgeoisie and middle class. For the CUP, the way to kick start capitalism for the Turks was to seize capital from the well endowed Christians for themselves. To this end, pseudo-Marxist rhetoric was used against Armenian enterprise such as there being a "class struggle" and disproportionate ownership by Armenians of wealth that had to be shared with Muslims at all costs. Import substitution industrialization and property confiscation centralized of economic capital in the hands of "loyal" ethnic groups, which deepened political support for the CUP. When it came to foreign trade, previously well established liberal policy gave way to protectionism: tariffs were increased in 1914 from 8 to 11%, by 1915 they reached 30%.
The CUP supported many stock companies later in the war, and once again welcomed guilds with the Society of Guilds [Esnaf Cemiyeti]. The Society of Guilds and the National Defence League essentially put the sale and distribution of wheat inside the Empire and to its allies under Unionist secretaries. These trustees became the face of corruption and war profiteering in the Unionist regime, and were known as the 'rich of 1916.' Attempts by the government to crackdown on price gouging were "half-hearted and unsuccessful." Wage-earning farmers were the ultimate victims of the supply regime. Their additional conscription into the army to alleviate manpower shortages in costly fronts meant that by the end of the war, the empire's economy was ruined.

## Legacy

The policies associated with National Economy were essential for the CUP's Türk Yurdu project that carried over to the later Republican People's Party regime, and created a fertile ground for the Republic of Turkey's industrialization post independence war.
Confiscation of Christian-owned property continued until the late twentieth century.