TOWARDS A CRITICAL SOCIOLOGY AND POLITICAL ECONOMY OF PUBLIC FINANCE A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF SOCIAL SCIENCES OF MIDDLE EAST TECHNICAL UNIVERSITY BY CEYHUN GÜRKAN IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN THE DEPARTMENT OF SOCIOLOGY SEPTEMBER 2010 Approval of the Graduate School of Social Sciences Prof. Dr. Meliha Altunışık Director I certify that this thesis satisfies all the requirements as a thesis for the degree of Doctor of Philosophy. Prof. Dr. Ayşe Saktanber Head of Department This is to certify that we have read this thesis and that in our opinion it is fully adequate, in scope and quality, as a thesis for the degree of Doctor of Philosophy. Prof. Dr. Ahmet H. Köse Prof. Dr. H. Ünal Nalbantoğlu Co-Supervisor Supervisor Examining Committee Members Prof. Dr. H. Ünal Nalbantoğlu Prof. Dr. Ahmet H. Köse Assoc. Prof. Dr. Sibel Kalaycıoğlu Assist. Prof. Dr. Galip Yalman Assist. Prof. Dr. Nilgün Erdem I hereby declare that all information in this document has been obtained and presented in accordance with academic rules and ethical conduct. I also declare that, as required by these rules and conduct, I have fully cited and referenced all material and results that are not original to this work. Name, Last name : Signature : iii ABSTRACT TOWARDS A CRITICAL SOCIOLOGY AND POLITICAL ECONOMY OF PUBLIC FINANCE Gürkan, Ceyhun Ph.D., Department of Sociology Supervisor : Prof. Dr. Hasan Ünal Nalbantoğlu Co-Supervisor: Prof. Dr. Ahmet Haşim Köse September 2010, 305 pages The exploration of this thesis on public finance proceeds on two axes. First, it aims at developing an ontological perspective to public finance. Accordingly, public finance is defined to be the concrete political relation between the state and society. The thesis that presents a political and historical evaluation of public finance from a critical sociological and political economy approach associates the components of this definition such as public, the political etc. with the relevant debates in social and political theory. In line with this, the traditional harmony-perspective of neoclassical public finance theories, which is ignorant of the political, is criticized, calling it as ‘police finance’ instead of ‘public finance’. Secondly, the thesis explores the history of fiscal thought between the 15th-19th centuries with special reference to the Ottoman Empire. All in all, with these topics this thesis aims at making a contribution to the field of “fiscal sociology” from a critical sociological and political economy approach. Keywords: Public Finance, Fiscal Sociology, Cameralism, Marx, Ottoman Empire iv ÖZ KAMU MALİYESİNİN ELEŞTİREL SOSYOLOJİSİNE VE EKONOMİ POLİTİĞİNE DOĞRU Gürkan, Ceyhun Doktora, Sosyoloji Bölümü Tez Yöneticisi : Prof. Dr. Hasan Ünal Nalbantoğlu Ortak Tez Yöneticisi: Prof. Dr. Ahmet Haşim Köse Eylül 2010, 305 sayfa Bu tezin kamu maliyesi üzerine incelemesi iki eksen üzerinden ilerler. Birincisi, tez kamu maliyesine ontolojik bir bakış geliştirmeyi amaçlar. Buna göre kamu maliyesi devlet ve toplum arasında somut bir siyasal ilişki olarak tanımlanmaktadır. Eleştirel sosyolojik ve ekonomi politik perspektiften kamu maliyesine dair siyasal ve tarihsel bir değerlendirme sunan tez bu tanımın bileşenlerini (kamu, siyasal olan vd) sosyal ve siyasal teorideki ilgili tartışmalarla ilişkilendirir. Bu doğrultuda, neoklasik maliye teorilerinin siyaseti ortadan kaldıran geleneksel uyum-perspektifi ‘kamu maliyesi’ yerine ‘polis maliyesi’ olarak adlandırılarak eleştirilmektedir. İkinci olarak, tez Osmanlı İmparatorluğu da dâhil 15.-19. yüzyıllar arası maliye düşünce tarihini inceler. Bir bütün olarak bakıldığında, tez ele aldığı konularla “mali sosyoloji” çalışma alanına eleştirel sosyolojik ve ekonomi politik perspektiften katkı sunmayı amaçlamaktadır. Anahtar Kelimeler: Kamu Maliyesi, Mali Sosyoloji, Kameralizm, Marx, Osmanlı İmparatorluğu v ACKNOWLEDGEMENTS My deepest gratitude is to my supervisor Prof. Dr. Hasan Ünal Nalbantoğlu for his guidance, advice, criticism, encouragements and insight throughout the research. In this thesis I embarked upon a work on public finance with an eye to developing a comprehensive social scientific approach to fiscal phenomena and without his instructorship I might have not done what I aimed for. Starting from his course “Cultures of Modernity” in 2005 up to the finishing point of this thesis, in our permanent meetings, whether personally or via texts, from time to time public finance remained in the backyard of my mind because of moving around other themes of social sciences. Yet, after a while, when I came upon public finance yet again, it could be achieved in a wider conception of public domain. In other words, I could reproduce public finance as a category in my mind as a many-sided social relation and could conceive it in a rich totality of the social. Mostly, these moments, which I went through more often than not, proved to be challenge for me. However, they allowed me to become sensible of what a true work, creativity and encouragement are in a scientific research. If this thesis on public finance reaches its aim by achieving even a modicum of these traits, I owe much to Prof. Nalbantoğlu’s instructorship. I am also grateful to my co-supervisor Prof. Dr. Ahmet Haşim Köse for his helpful suggestions and comments throughout research. In my graduate years at the Faculty of Political Sciences his courses “Readings on Political Economy” and “Development Economics” were my starting point to study vi political economy. Therefore, beside Prof. Köse’s contributions as the co- supervisor to my present research, the political economy approach of this thesis goes back to those years and these courses had grave influence on this thesis as well. I also thank the members of the examining committee. Assoc. Prof. Dr. Sibel Kalaycıoğlu, Assist. Prof. Dr. Nilgün Erdem and Assist. Prof. Dr. Galip Yalman for their valuable comments, supportive suggestions and constructive criticisms at the final stage of the research. I benefited much from them while completing the thesis. I would also like thank Prof. Dr. Eyüp Özveren. He was my supervisor of Master’s Thesis and I believe that scientific knowledge proceeds cumulatively. He made valuable comments on my thesis proposal, which was the basis of the second chapter, at the beginning of my research and then on the third chapter on Cameralism. They were very helpful for me. Throughout my research I taught two courses at the Department of Public Finance at the Faculty of Political Sciences. One of them was the undergraduate course “Theory of Public Finance” (2005-2010), the other being graduate course “History of Public Finance” (2008). I want to thank all participants of these courses. These courses were the unique intellectual venues where thought-inspiring debates on public finance came out throughout my research thanks to their participants. vii The intellectual atmosphere and distinguished academic venue of the Faculty of Political Sciences always provided me with high motivation throughout research. I would like to thank whole teaching and administrative staff of the faculty. Particularly, I want to thank Prof. Dr. Cem Eroğul and Prof. Dr. Abuzer Pınar. My particular great gratitude is for my friends. They made colossal contributions to my research with their scholarly knowledge and true friendship. This thesis owes much to Özkan Ağtaş, Ferda Dönmez Atbaşı, Hakan Helvacı, Yiğit Karahanoğulları, Aydın Ördek, Mustafa Öziş and Duygu Türk. I thank each of them with my whole heart. My last and deep gratitude is for my parents Hatice Gürkan and İbrahim Gürkan, for my brother Cengiz Gürkan and my nephew Ege Çınar Gürkan. Their presence was always important for me to overcome hard times throughout research. viii TABLE OF CONTENTS PLAGIARISM...................................................................................................iii ABSTRACT…………………………………………………………………...iv ÖZ………………………………………………………………………………v ACKNOWLEDGMENTS……………………………………………………..vi TABLE OF CONTENTS...................................................................................ix CHAPTER 1. INTRODUCTION………………………………………………………1 2. PUBLIC FINANCE AS SOCIAL PRACTICE………………………..14 2.1 The Political Ontology of Public Finance……………………….17 2.2 Reclaiming the Public: Antagonistic Fiscal Ontology of the Social…………………………………………...24 2.3 The History of Public Finance…………………………………...31 2.4 Public Finance as Technique…………………………………….70 3. CAMERALISM: PUBLIC FINANCE AS THE ART OF GOVERNMENT………………………………………………….82 3.1 Complicated Nature of Cameralism: Some Suggestions………………………………………….…….85 3.2 Cameralism as the Policy of ‘Good Order’ in the German Empire…………………………………………...90 3.3 Cameralism as the Secular Pastoral Power and Its Conception of Politics and Economy…………..…………...104 3.4 Period of Academic Cameralism……………………………….110 3.5 The End of Cameralism………………………………………...115 ix 3.6 Concluding Remarks…………………………………………...125 4. FISCAL TOUGHT BETWEEN THE 15TH-18TH CENTURIES: A COMPARATIVE ANALYSIS……………………131 4.1 Public Finance in Classical Social and Political Thought………………………………………….134 4.2 Rousseau and the ‘Political Economy’ of ‘Social Contract’…………………………………………….162 5. MARX AND PUBLIC FINANCE: THE STATE DEBT AND TAXES IN MARX’S POLITICAL ECONOMY……………...178 5.1 The State Debt as a Method of Primitive Accumulation and as Interest-Bearing Capital, and the “Alienation of the State”……………………………………180 5.1.1 The State Debt as a Method of Primitive Accumulation………………………………...180 5.1.2 The State