Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-05T04:19:01.217Z Has data issue: false hasContentIssue false
  • English
  • Français

The Wealth Tax of 1942 and the Disappearance of Non-Muslim Enterprises in Turkey

Published online by Cambridge University Press:  14 March 2019

Seven Ağır  and
Cihan Artunç
Seven Ağır
Affiliation:
Seven Ağır is Assistant Professor, Department of Economics, Middle East Technical University, Ankara 06800, Turkey. E-mail: [email protected]
Cihan Artunç
Affiliation:
Cihan Artunç is Professor, Department of Economics, University of Arizona, Tucson, AZ 85721. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Turkey imposed a controversial tax on wealth to finance the army in 1942. This tax was arbitrarily assessed and fell disproportionately on non-Muslim minorities. We study the heterogeneous impact of this tax on firms by assembling a new dataset of all enterprises in Istanbul between 1926 and 1950. We find that the tax led to the liquidation of non-Muslim-owned firms, which were older and more productive, reduced the formation of new businesses with non-Muslim owners, and replaced them with frailer Muslim-owned startups. The tax helped “nationalize” the Turkish economy, but had negative implications for productivity and growth.

Type
Article
Information
The Journal of Economic History , Volume 79 , Issue 1 , March 2019 , pp. 201 - 243
Copyright
Copyright © The Economic History Association 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This article is supported by the European Commission under the Marie Curie Grant 2013ABH67840006 and the National Science Foundation under the grant NSF SES 1559273. We thank Ayhan Aktar, Dan Bogart, Amanda Gregg, Timothy Guinnane, Philip Hoffman, Kıvanç Karaman, Timur Kuran, Şevket Pamuk, Jean-Laurent Rosenthal, and Ali Cevat Taşıran for helpful comments and suggestions. We also thank Atacan Atakan, Burcu Belli, Semih Göktalay, and Ece Özçeri for excellent research assistance. This article was also circulated under the title “Political Economy, Firm Survival and Entrepreneurship: The Case of the Wealth Tax (1942).”

References

REFERENCES

Acemoglu, Daron, Hassan, Tarek A., and Robinson, James A.. “Social Structure and Development: A Legacy of the Holocaust in Russia.” Quarterly Journal of Economics 126, no. 2 (2011): 895–946.10.1093/qje/qjr018CrossRefGoogle Scholar
Acemoglu, Daron, and Robinson, James A.. Why Nations Fail. New York: Crown Business, 2012.Google Scholar
Ağır, Seven. “Osmanlı İktisat Düşüncesinde Bir Kalkınma Stratejisi Olarak Örnek Alma.” In Türkiye’de İktisadi Düşünce, edited by Özgür, Erdem, Duman, Alper, and Kaya, Yücel, 49–92. Istanbul: İletişim, 2017.Google Scholar
Ağır, Seven and Artunç, Cihan. “Database of Firms in Istanbul, 1926–50.” Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2018-11-05. http://doi.org/10.3886/E107183V1.CrossRefGoogle Scholar
Akar, Rıdvan. Aşkale yolcuları: Varlık vergisi ve çalışma kampları. Istanbul: Mep Kitap, 2006.Google Scholar
Akgönül, Samim. “The Ankara Agreement of 1930 and the Minorities: Reconciliation, Normalization or Instrumentalization?” In State-Nationalisms in the Ottoman Empire, Greece and Turkey: Orthodox and Muslims, 1830–1945, edited by Fortna, Benjamin C., Katsikas, Stefanos, Kamouzis, Dimitris, et al., 176–86. London: Routledge, 2013.Google Scholar
Aksan, Virginia. Ottoman Wars, 1700–1870: An Empire Besieged. New York: Longman/Pearson, 2007.Google Scholar
Aktar, Ayhan. “Varlık vergisi sırasında gayrimenkul satışları.” Toplumsal Tarih 69 (1999): 10–21.Google Scholar
Aktar, Ayhan. “Varlık vergisi nasıl uygulandı?” In Varlık vergisi ve Türkleştirme politikaları, 135–214. İstanbul: İletişim Yayınları, 2000 (first published in 1996 in Toplum ve Bilim 72 (2000): 97-147).Google Scholar
Aktar, Ayhan. “Tax Me to the End of My Life: Anatomy of an Anti-minority Tax Legislation (1942–43).” In State-Nationalisms in the Ottoman Empire, Greece and Turkey: Orthodox and Muslims, 1830–1945, edited by Fortna, Benjamin C., Katsikas, Stefanos, Kamouzis, Dimitris, et al., 188–220. London: Routledge, 2013.Google Scholar
Aktar, Ayhan, and Özel, Soli. “Turkish Attitudes vis-â-vis the Zionist Project.” CEMOTI, Cahiers d’Études sur la Méditerranée Orientale et le monde Turco-Iranien 28 (1999): 129–48.Google Scholar
Altug, Sumru, Filiztekin, Alpay, and Pamuk, Şevket. “Sources of Long-Term Economic Growth for Turkey, 1880–2005.” European Review of Economic History 12, no. 3 (2008): 393–430.10.1017/S1361491608002293CrossRefGoogle Scholar
Artunç, Cihan. “The Price of Legal Institutions: The Beratlı in the Eighteenth-Century Ottoman Empire.” Journal of Economic History 75, no. 3 (2015): 720–49.10.1017/S0022050715001059CrossRefGoogle Scholar
Artunç, Cihan. “The Impact of Business Cycle Conditions on Firm Dynamics and Composition: Enterprise Entry and Exit in Egypt, 1911–48.” Mimeo, 2017.10.2139/ssrn.3063818CrossRefGoogle Scholar
Artunç, Cihan, and Guinnane, Timothy W.. “Partnership as Experimentation: Business Organization and Survival in Egypt, 1910–1949.” Yale University Economic Growth Center Discussion Paper No. 1057, New Haven, CT 2017.Google Scholar
Arbatlı, Cemal E., and Gokmen, Güneş. “Minorities, Human Capital and Long-Run Development: Persistence of Armenian and Greek Influence in Turkey.” CESifo Working Paper Series No. 6268, Munich, Germany 2016. Available at https://ssrn.com/abstract=2910313.Google Scholar
Aytekin, Attila. “Peasant Protest in the Late Ottoman Empire: Moral Economy, Revolt, and the Tanzimat Reforms.” International Review of Social History 57, no. 2 (2012): 191–227.CrossRefGoogle Scholar
Baer, Marc. The Dönme: Jewish Converts, Muslim Revolutionaries, and Secular Turks. Palo Alto, CA: Stanford University Press, 2010.Google Scholar
Baker, George P., and Kennedy, Robert E.. “Survivorship and the Economic Grim Reaper.” Journal of Law, Economics, and Organization 18, no. 2 (2002): 324–61.10.1093/jleo/18.2.324CrossRefGoogle Scholar
Bali, Rıfat N. “Cumhuriyet Döneminde Azınlık Milletvekilleri.” Toplumsal Tarih 186 (2009): 63.Google Scholar
Bali, Rıfat N. Bir Türkleştirme Serüveni (1923–1945). Istanbul: İletişim Yayınları, 2005.Google Scholar
Bali, Rıfat N. Varlık Vergisi: Hatıralar-Tanıklıklar. Istanbul: Libra Yayınları, 2012.Google Scholar
Barlas, Dilek. Etatism and Diplomacy in Turkey: Economic and Foreign Policy Strategies in an Uncertain World, 1929–1939. New York: Brill, 1998.Google Scholar
Bartelsman, Eric, Scarpetta, Stefano, and Schivardi, Fabiano. “Comparative Analysis of Firm Demographics and Survival: Evidence from Micro-Level Sources in OECD Countries.” Industrial and Corporate Change 14, no. 3 (2005): 365–91.10.1093/icc/dth057CrossRefGoogle Scholar
Bellone, Flora, Musso, Patrick, Nesta, Lionel, et al. “Market Selection along the Firm Life Cycle.” Industrial and Corporate Change 17, no. 4 (2008): 753–77.10.1093/icc/dtn025CrossRefGoogle Scholar
Boratav, Korkut. “Kemalist Economic Policies and Etatism.” In Atatürk: Founder of a Modern State, edited by Kazancıgil, A. and Özbudun, E., 165–90. Hamden: Archon Books, 1981.Google Scholar
Brüderl, Josef, Preisendörfer, Peter, and Ziegler, Rolf. “Survival Chances of Newly Founded Business Organizations.” American Sociological Review 57, no. 2 (1992): 227–42.10.2307/2096207CrossRefGoogle Scholar
Buğra, Ayşe. State and Business in Modern Turkey: A Comparative Study. Albany: SUNY, 1994.Google Scholar
Caballero, Ricardo J., and Hammour, Mohamad L.. “The Cleansing Effect of Recessions.” American Economic Review 84, no. 5 (1994): 1350–68.Google Scholar
Cağaptay, Soner. “Race, Assimilation and Kemalism: Turkish Nationalism and the Minorities in the 1930s.” Middle Eastern Studies 40, no. 3 (2004): 86–101.10.1080/0026320042000213474CrossRefGoogle Scholar
Cağaptay, Soner. Islam, Secularism and Nationalism in Modern Turkey: Who is a Turk? London: Routledge, 2006.Google Scholar
Cantillon, Richard. Essai sur la nature du commerce en général. Traduit de l’anglois. A Londres: Chez Fletcher Gyles, 1756.Google Scholar
Çetiner, Yusuf T. Turkey and the West: From Neutrality to Commitment. Lanham, MD: University Press of America, 2014.Google Scholar
Çetinkaya, Doğan. 1908 Osmanlı Boykotu: Bir Toplumsal Hareketin Analizi. Istanbul: İletişim, 2014.Google Scholar
Chandler, Alfred D. The Visible Hand: The Managerial Revolution in American Business. Cambridge, MA: Belknap Press of Harvard University Press, 1977.Google Scholar
Clark, Edward C. “The Turkish Varlık Vergisi Reconsidered.” Middle Eastern Studies 8, no. 2 (1972): 205–16.10.1080/00263207208700205CrossRefGoogle Scholar
Cochran, Thomas. “The Business Revolution.” American Historical Review 79, no. 1 (1977): 449–66.Google Scholar
Deringil, Selim. Turkish Foreign Policy during the Second World War: An “Active ” Neutrality. Cambridge: Cambridge University Press, 1989.Google Scholar
Eldem, Edhem. French Trade in Istanbul in the Eighteenth Century. Leiden: Brill, 1999.Google Scholar
Eurostat News Release 201, 17 November 2015.Google Scholar
Fourie, Johan, and von Fintel, Dieter. “Settler Skills and Colonial Development: The Huguenot Wine-Makers in Eighteenth-Century Dutch South Africa.” Economic History Review 67, no. 4 (2014): 932–63.CrossRefGoogle Scholar
Guinnane, Timothy, Harris, Ron, Lamoreaux, Naomi R., et al. “Putting the Corporation in its Place.” Enterprise and Society 8, no. 3 (2007): 687–729.CrossRefGoogle Scholar
Gül, Murat. Emergence of Modern Istanbul: Transformation and Modernisation of a City. London: IB Tauris, 2009.Google Scholar
Gürpinar, Doğan. Ottoman Imperial Diplomacy: A Political, Social and Cultural History. London: IB Tauris, 2013.Google Scholar
Gürsel, Seyfettin, and Pamuk, Şevket. “Macroeconomic Policies During the Great Depression: Another Look at the Turkish Case, 1929–1939.” In Monetary Policy during Economic Crises: A Comparative and Historical Perspective, edited by Görmez, Yüksel, Pamuk, Şevket, and Turan, İbrahim, 113–22. Istanbul: TCMB, 2010.Google Scholar
Hale, William. Turkish Foreign Policy since 1774. London: Routledge, 2012.10.4324/9780203102022CrossRefGoogle Scholar
Hornung, Erik. “Immigration and the Diffusion of Technology: The Huguenot Diaspora in Prussia.” American Economic Review 104, no. 1 (2014): 84–122.CrossRefGoogle Scholar
Hsieh, Chang-Tai, and Klenow, Peter J.. “Misallocation and Manufacturing TFP in China and India.” Quarterly Journal of Economics 124, no. 4 (2009): 1403–48.CrossRefGoogle Scholar
İnalcık, Halil. “Bursa: XV. asır sanayi ve ticaret tarihine dair vesikalar.” Belleten 24 (1960): 45–102.Google Scholar
İnalcık, Halil. “Cizye, Osmanlılarda Cizye.” İslâm Ansiklopedisi 8 (1993): 45–48.Google Scholar
Issawi, Charles. An Economic History of the Middle East and North Africa. New York: Columbia University Press, 1982.Google Scholar
Johnson, Noel D., and Koyama, Mark. “Jewish Communities and City Growth in Preindustrial Europe.” Journal of Development Economics 127 (2017): 339–54.CrossRefGoogle Scholar
Karadayı, Figen, Timur, Serin, Macura, Miroslav, et al. The Population of Turkey. Ankara: The Institute of Population Studies, Hacettepe University, 1974.Google Scholar
Keyder, Çağlar. State and Class in Turkey: A Study in Capitalist Development. London and New York: Verso, 1987.Google Scholar
Keyder, Çağlar. “Manufacturing in the Ottoman Empire and in Republican Turkey, ca. 1900–1950.” In Ottoman Industry in the Eighteenth Century: General Framework, Characteristics, and Main Trends, edited by Quataert, Donald, 123–64. Albany: SUNY, 1994.Google Scholar
Keyder, Çağlar. “The Consequences of the Exchange of Populations for Turkey.” In Crossing the Aegean: An Appraisal of the 1923 Compulsory Population Exchange between Greece and Turkey, edited by Hirschon, Renee, 39–52. Oxford: Berghahn, 2003.CrossRefGoogle Scholar
Keyder, Çağlar, and Öncü, Ayşe. “Globalization of a Third-World Metropolis: Istanbul in the 1980’s.” Review (Fernand Braudel Center) (1994): 383–421.Google Scholar
Kuran, Timur. “The Economic Ascent of the Middle East’s Religious Minorities: The Role of Islamic Legal Pluralism.” Journal of Legal Studies 33, no. 2 (2004): 475–515.CrossRefGoogle Scholar
Kuran, Timur. The Long Divergence: How Islamic Law Held Back the Middle East. Princeton, NJ: Princeton University Press, 2011.Google Scholar
Landau, Jacob M. “Main Trends of Turkish Nationalism in the Late Nineteenth and Early Twentieth Centuries.” History of European Ideas 15, no. 4–6 (1992): 567–69.CrossRefGoogle Scholar
Levinthal, Daniel A. “Random Walks and Organizational Mortality.” Administrative Science Quarterly 36, no. 3 (1991): 397–420.CrossRefGoogle Scholar
Mann, Michael. “Authoritarian and Liberal Militarism: A Contribution from Comparative and Historical Sociology.” International Theory: Positivism and Beyond, edited by Smith, Steve, et al., 221–39. Cambridge: Cambridge University Press, 1996.CrossRefGoogle Scholar
McCarthy, Justin. The Arab World, Turkey and the Balkans: A Handbook of Historical Statistics. Boston: G. K. Hall, 1982.Google Scholar
Morack, Ellinor. The Dowry of the State? The Politics of Abandoned Property and the Population Exchange in Turkey, 1921–1945. Bamberg: University of Bamberg Press, 2017.Google Scholar
Moreira, Sara. “Firm Dynamics, Persistent Effects of Entry Conditions, and Business Cycles.” Mimeo, 2016. Available at https://ssrn.com/abstract=3037178.10.2139/ssrn.3037178CrossRefGoogle Scholar
New York Times, 9 September 1943.Google Scholar
New York Times, 11 September 1943.Google Scholar
North, Douglass C., Wallis, John J., and Weingast, Barry R.. Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. Cambridge: Cambridge University Press, 2009.CrossRefGoogle Scholar
Okutan, M. Çağatay. Tek parti döneminde azınlık politikaları. Istanbul: İstanbul Bilgi Üniversitesi, 2004.Google Scholar
Owen, Roger. The Middle East in the World Economy, 1800–1914. London: IB Tauris, 1993.Google Scholar
Owen, Roger, and Pamuk, Şevket. A History of Middle East Economies in the Twentieth Century. London: IB Tauris, 1998.Google Scholar
Ökçün, A. Gündüz. Osmanlı Sanayii, 1913, 1915. Ankara: SBF Yayınları, 1970.Google Scholar
Ökte, Faik. Varlık vergisi faciası. Istanbul: Nebioglu, 1951.Google Scholar
Özmucur, Süleyman, and Pamuk, Şevket. “Real Wages and Standards of Living in the Ottoman empire, 1489–1914.” Journal of Economic History 62, no. 2 (2002): 293–321.CrossRefGoogle Scholar
Pamuk, Şevket. “Intervention During the Great Depression; Another Look at the Turkish Experience.” In Mediterranean Responses to Globalization before 1950, edited by Pamuk, Şevket and Williamson, Jeffrey, 321–39. London and New York: Routledge, 2001.Google Scholar
Pamuk, Şevket. Türkiye’nin 200 yıllık iktisadi tarihi. Istanbul: İş Bankası Yayınları, 2014.Google Scholar
Panzac, Daniel. “International and Domestic Maritime Trade in the Ottoman Empire During the 18th Century.” International Journal of Middle East Studies 24, no. 2 (1992): 189–206.CrossRefGoogle Scholar
Pascali, Luigi. “Banks and Development: Jewish Communities in the Italian Renaissance and Current Economic Performance.” Review of Economics and Statistics 98, no. 1 (2016): 140–58.CrossRefGoogle Scholar
Pollack, Sheldon D. Failure of U.S. Tax Policy: Revenue and Politics. University Park, PA: Penn State Press, 2010.Google Scholar
Radikal İki, 5 December 1999.Google Scholar
Scheve, Kenneth, and Stasavage, David. Taxing the Rich: A History of Fiscal Fairness in the United States and Europe. Princeton, NJ: Princeton University Press, 2016.Google Scholar
Sönmez, Mustafa. Türkiye Ekonomisinin 80 Yılı. Istanbul: İTO, 2004.Google Scholar
Tezel, Yahya S. Cumhuriyet dönemi iktisadi tarihi: 1923-1950. Istanbul: İş Bankası Yayınları, 2015 (1982).Google Scholar
Toprak, Zafer. Milli İktisat-Milli Burjuvazi: Türkiye’de Ekonomi ve Toplum; 1908–1950. Tarih Vakfi Yurt Yayinlari, 1995.Google Scholar
Uyar, Hakkı. “Tek parti iktidarının toplumsal kökenleri.” Toplumsal Tarih 106 (2002): 54–58.Google Scholar
Üngör, Uğur, and Polatel, Mehmet. Confiscation and Destruction: The Young Turk Seizure of Armenian Property. London: Bloomsbury Publishing, 2011.Google Scholar
Williamson, Samuel H. “Seven Ways to Compute the Relative Value of a U.S. Dollar Amount, 1774 to Present.” Measuring Worth, 2018. Available at www.measuringworth.com/uscompare.Google Scholar

OFFICIAL PUBLICATIONS

Çetinkol, Hayrettin, Yetiş, Kâmuran, Özden, Tahir, Tosbi, Sadrettin eds. Türk Ticaret Rehberi ve Adres Kitabı 1944–1945. Istanbul: Osmanbey Matbaası, 1945.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odası Mecmuası, vol. 42 (1–12). 1926.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odası Mecmuası, vol. 43 (1–6). 1927.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odasına mukayyet ticari, sınaî ve malî müesseseler ve efrat. İstanbul: Marifet Matbaası, 1929.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odası adres kitabı: İstanbul Ticaret ve Sanayi Odasında kayıtlı fevkalade birinci, ikinci ve üçüncü sınıf ticari, sınaî, mali müesseseler. İstanbul: Marifet Basımevi, 1935.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odası adres kitabı: İstanbul Ticaret ve Sanayi Odasında kayıtlı fevkalade birinci, ikinci ve üçüncü sınıf ticari, sınaî, mali müesseseler. İstanbul: Marifet Basımevi, 1938.Google Scholar
İstanbul Ticaret ve Sanayi Odası. İstanbul Ticaret ve Sanayi Odası adres kitabı: İstanbul Ticaret ve Sanayi Odasında kayıtlı fevkalade birinci, ikinci ve üçüncü sınıf ticari, sınaî, mali müesseseler. İstanbul: Marifet Basımevi, 1941.Google Scholar
İstanbul Ticaret ve Sanayi Odası. Adres Kitabı. İstanbul: İstanbul Ticaret Odası, 1950.Google Scholar
Turkey. TBMM Zabıt Ceridesi, 2. Dönem, 3. Cilt, 55. Birleşim, (10.11.1339 [10.01.1923]), 440. 1923.Google Scholar
Turkey. Genel nüfus sayımı, 20 ilkteşrin 1935: Türkiye nüfusu kati tasnif neticeleri (Recensement général de la population au 20 octobre 1935 : population de la Turquie résultats défenitis). Istanbul: Devlet Basımevi, 1936.Google Scholar
Turkey. Statistical Resumés No: 10. Ankara: Central Statistical Office, 1953.Google Scholar
Supplementary material: File

Ağır and Artunç supplementary material

Online Appendix

Download Ağır and Artunç supplementary material(File)
File 62.9 KB