Social Structure of Accumulation in Turkey (1963 – 2015)
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University of Massachusetts Amherst ScholarWorks@UMass Amherst Doctoral Dissertations Dissertations and Theses November 2018 SOCIAL STRUCTURE OF ACCUMULATION IN TURKEY (1963 – 2015) Osman C. Icoz University of Massachusetts Amherst Follow this and additional works at: https://scholarworks.umass.edu/dissertations_2 Part of the Econometrics Commons, Macroeconomics Commons, and the Political Economy Commons Recommended Citation Icoz, Osman C., "SOCIAL STRUCTURE OF ACCUMULATION IN TURKEY (1963 – 2015)" (2018). Doctoral Dissertations. 1443. https://doi.org/10.7275/12312151 https://scholarworks.umass.edu/dissertations_2/1443 This Open Access Dissertation is brought to you for free and open access by the Dissertations and Theses at ScholarWorks@UMass Amherst. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of ScholarWorks@UMass Amherst. For more information, please contact [email protected]. SOCIAL STRUCTURE OF ACCUMULATION IN TURKEY (1963 – 2015) A Dissertation Presented by OSMAN CAN ICOZ Submitted to the Graduate School of the University of Massachusetts Amherst in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY September 2018 Economics © Copyright by Osman Can Icoz 2018 All Rights Reserved SOCIAL STRUCTURE OF ACCUMULATION IN TURKEY (1963 – 2015) A Dissertation Presented by OSMAN CAN ICOZ Approved as to style and content by: _________________________________________________ David Kotz, Chair _________________________________________________ James Heintz, Member _________________________________________________ Dan Clawson, Member _________________________________________ Léonce Ndikumana, Department Head Economics DEDICATION To the memory of İsmail Arı (aşk olsun sana çocuk…) ACKNOWLEDGEMENTS I am deeply grateful to my advisor David Kotz. This dissertation would not have been possible without his guidance and support. He is an excellent scholar of Marxian political economy, and I have learned a lot from him. I would also like to thank my committee members, James Heintz and Dan Clawson, for their insightful comments and valuable feedback. I want to thank Doruk Cengiz for his friendship during most of my years at UMass. He has been not only a supportive friend, but a great colleague as well. I also thank my friends in Northampton, specifically, Ezgi Cengiz, Eren Odabaşı, Barış Güven, and Gamze Önüt, for making my life full of joy and adventure. Finally, I wish to thank my parents and my sister. I am indebted to them for their love, support, and encouragement throughout my academic journey. v ABSTRACT SOCIAL STRUCTURE OF ACCUMULATION IN TURKEY (1963 – 2015) SEPTEMBER 2018 OSMAN CAN ICOZ B.S., BOGAZICI UNIVERSITY M.A., UNIVERSITY OF CALIFORNIA RIVERSIDE M.S., UNIVERSITY OF MASSACHUSETTS AMHERST Ph.D., UNIVERSITY OF MASSACHUSETTS AMHERST Directed by: Professor David Kotz This dissertation analyzes capitalism in Turkey during post-1963 period from social structure of accumulation (SSA) theory perspective. The SSA theory is a theory of interaction of institutions and capital accumulation over long run. This dissertation will be the first book length study on Turkey using SSA Theory approach. It will enrich the SSA literature by adding a case of Turkey, which is a developing country; and hence it will be another example that SSA framework can be extended outside of US. I observe two different SSAs during the period of interest. The first one is Import Substitution Industrialization (ISI) SSA from 1963 to 1980, which I named after vi dominant economic policy of the era. Turkey had experienced a military coup d’état in 1960, and a new constitution had been established in 1961, which had shaped most of the political and economic institutions, as well as the ideology, of the time. Related with these, the first five-year development plan, which was effective by the very first day of 1963, changed Turkish economy significantly. Chapter 3 presents features of ISI SSA, along with factors that played role in construction, working, and demise of ISI SSA. The second SSA is Neoliberal (NL) SSA from 1980 to 2015. There was a military coup d’état that took place in September 1980, which had dramatic effects on the institutional environment in Turkey. More importantly, in January of the same year, a new set of neoliberal economic policies was put in effect that brought some important changes to Turkish economy. Chapter 4 analyzes features of NL SSA. There are two important phenomena during NL SSA period that deserves in depth analysis: Islamization and highly volatile growth during 1990s. Islamization has been an important part of the ideology of NL SSA in Turkey. Chapter 5 discusses effects of Islamization on both labor- capital and within capital class struggles. Then Chapter 6 presents an econometric model that provides evidence for positive relationship between private investment growth volatility and political instability. This chapter argues that political instability, due to rapidly changing governments, can be one of the reasons of high volatility in gross domestic product growth rate during NL SSA period. vii TABLE OF CONTENTS Page ACKNOWLEDGEMENTS ................................................................................................ v ABSTRACT ....................................................................................................................... vi TABLE OF CONTENTS ................................................................................................. viii LIST OF TABLES ........................................................................................................... xiii LIST OF FIGURES ......................................................................................................... xiv LIST OF ABBREVIATIONS .......................................................................................... xvi CHAPTER 1. INTRODUCTION .......................................................................................................... 1 2. LITERATURE REVIEW ............................................................................................... 7 2.1 Literature on SSA Theory. ........................................................................................ 7 2.2 Literature on SSA of a country ............................................................................... 11 2.3 Literature on Turkey ............................................................................................... 16 2.3.1 Turkish Economic History (TEH) ................................................................... 16 2.3.2 Islamization & Class Conflicts ........................................................................ 19 2.4 Contributions to existing literature ......................................................................... 21 3. IMPORT SUBSTITUTION INDUSTRIALIZATION SSA (1963-1980) ................... 24 3.1 Background ............................................................................................................. 24 3.2 Construction ............................................................................................................ 25 3.2.1 Class Struggle and the Role of State ................................................................ 26 3.2.1.1 Army ......................................................................................................... 26 3.2.1.2 Capitalists .................................................................................................. 27 viii 3.2.1.3 Labor Class ............................................................................................... 28 3.2.2 International/External Factors .......................................................................... 29 3.3 Economic Performance ........................................................................................... 32 3.3.1 GDP growth rate .............................................................................................. 32 3.3.2 Other economic indicators ............................................................................... 35 3.4 Features ................................................................................................................... 42 3.4.1 Political and Economic Institutions, and Role of The State ............................ 43 3.4.1.1 1961 Constitution ...................................................................................... 43 3.4.1.2 SPO and The Development Plans ............................................................. 46 3.4.1.3 1971 Military Memorandum and The Interim Government ..................... 48 3.4.2 Stabilizing Class Conflicts ............................................................................... 50 3.4.3 Role of Ideology .............................................................................................. 54 3.4.4 International/External Factors .......................................................................... 56 3.5 Demise .................................................................................................................... 58 3.5.1 Economic Indicators of the Demise ................................................................. 58 3.5.2 Role of class struggle in demise ....................................................................... 60 4. NEOLIBERAL SSA (1980 – 2015) ............................................................................. 65 4.1 Background ............................................................................................................