The collapse of the Soviet Union at the beginning of the 1990s, and the integration of China into the word trade system have transformed the social relations of production across the world. This transformation in global capitalism has also transformed global value chains, dividing the process of production into segments in historically specific social formations. In this new phase of capitalism, the so-called “emerging market economies” have been a major target for transnational companies which have penetrated the countries of the Global South with their industrial and financial capital.
Turkey has been one of the most popular destinations for these companies to operate because it has experienced a remarkable growth in its foreign trade and a series of structural changes in its process of capital accumulation in the 2000s. This was seen as confirming the neoclassical idea that free trade would lead economic and social convergence among the countries engaged in it. This is the updated version of David Ricardo’s theory of comparative advantage which suggests that different parties engaging in foreign trade would mutually benefit from the exchange of goods and services. Remarkably, this necessitated establishing an alliance between different social classes in Turkey and transnational capital operating in different social formations. The resultant outcome was to increase the level of integration of the countries in the Global South and to integrate them into the global value chain. However, as argued in my book Unravelling the Social Formation: Free Trade, the State and Business Associations in Turkey, the evidence from Southern countries, like Turkey, starkly differed from the predictions of the neoclassical theory of comparative advantage. In particular, Turkey did not catch up with advanced capitalist countries and thus the rapid growth in exports and profits in Turkey in the 2000s did not affect the underlying structure of unequal trade. It was a success for capital accumulation, but not a developmental success.
Through a set of conceptual reflections, this book defines Turkey as a late developing capitalist country in the Global South, which has submitted itself to the process of global capital accumulation in an uneven way. It then argues that capitalist classes and the state have played important roles in the process of Turkey’s integration into the world economy. In this regard, the book examines the role of business associations (BAs) and the state in Turkey in analysing the dialectical relationship between global free trade and the Turkish social formation during the Justice and Development Party (Adalet ve Kalkinma Partisi, the AKP) government since 2002. The book constructs a three-level analysis based on the social relations of production, forms of state and world order. It explores the class characteristics of the BAs in relation to the social relations of production in Turkey. It further unpacks the role of the Turkish state in the process of integration of Turkish BAs into global capitalism, and at the same time, the internalisation of global class relations inside the Turkish social formation. Studying the BAs in Turkey is a neglected area in the literature on the political economy of Turkey and Turkish politics. For this book, I have chosen three different BAs in Turkey which are TUSIAD (Türk İş İnsanlari ve Sanayicileri Derneği, Turkish Industry & Business Association), MUSIAD (Müstakil İşadamları ve Sanayicileri Derneği, Independent Association of Industrialists and Businessmen) and TUSKON (Türk İşadamları ve Sanayicileri Konfedarasyonu, Turkish Confederation of Businessmen and Industrialists). These BAs are selected because of their economic and political impacts on the Turkish social formation as well as their members’ active participation in global free trade relations. The book also examines how the BAs in Turkey integrate into global free trade relations and reveals differences between Turkey and advanced capitalist countries, which appear in the patterns of capital accumulation.
The first chapter of the book constructs the theoretical background in relation to free trade and the state, and critically engages with mainstream theories of political economy, namely classical-liberal, neo-classical, and institutional. It offers a fresh evaluation of theories of imperialism and the uneven and combined development approach from a neo-Gramscian perspective. Additionally, to unearth the role of the Turkish state in this process, this book employs a neo-Gramscian understanding of the state with a specific reference to Nicos Poulantzas.
Following the theoretical discussions, Chapter 2 of this book provides a historical materialist analysis of the development of capitalist relations of production in Turkey. Hence, it divides the process of capital accumulation in Turkey into four different but connected periods which are: (i) the defining role of uneven and combined development—commercial and agrarian capital-based accumulation until the late 1950s, (ii) industrial capital-based accumulation based on the Import Substitution Industrialisation model until the 1980s, (iii) export-led capital accumulation in the post-transition period and (iv) transnationalisation of Turkish productive capital in the 2000s.
In Chapters 3, 4, and 5, the book provides a class-based analysis of business associations in Turkey in order to understand the historical specificity of capitalist relations in Turkey and the expansion of Turkish capitalism towards the Middle East and North Africa in the 2010s. The book argues that BAs in Turkey are constitutively divided into class fractions. Accordingly, it argues that these BAs are not monolithic blocs without contradictions and cracks. Each association brings together several class fractions with slightly different but overlapping interests. Also, it is argued that the fragmentation of capitalist classes in the Turkish social formation is not primarily based on religious, ideological, and cultural dynamics, rendering it misleading to speak primarily of secular and Islamist capital or of Istanbul and Anatolian capital. To a considerable extent, what differentiates capitalist class fractions is the way in which they engage in the social relations of production, what role they play in the power bloc, and their specific forms of integration into global relations of free trade, bearing in mind that they are at different scales and stages of accumulation arising from uneven development, and thus have interests corresponding to a capitalist class at different stages of its development.
In the concluding chapter, the book examines the current stage of capitalism in Turkey amid the COVID-19 pandemic. The book concludes that Turkey is an intermediate producer in global production chains, as a site where companies assemble imported resources into finished goods. This increases the dependency of the different class fractions in Turkey on the global market to reproduce the social relations of production. Turkish domestic investment is heavily dependent on capital inflows, or in other words, Turkish production is dependent on the import of low-value-added intermediate goods, especially in the automotive sector, a type of dependency which has become a characteristic feature of the Turkish economy. Turkey has become an importer of intermediate goods from countries in Asia and an exporter of finished goods to European countries. Under these circumstances, the Turkish state directly engages with the relations of production. Therefore, its role is not limited to ideological or repressive applications, but also managing the contradictions among different fractions of capital and reorganising the power bloc.
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