Çizaka M. (1980) Europe and the desindustrialization of the Ottoman Empire

Çizakca, Murat (1980) “Price History and the Bursa Silk Industry: A Study in Ottoman Industrial Decline, 1550-1650”, The Journal of Economic History, 40/3, 533-550.

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Introduction

“The Ottoman Empire, which covered most of Eastern Europe and the Near East in the sixteenth century, did not escape the worldwide inflation that is generally known as the ‘price revolution’” (p.533). The price series of this article are based on the estimates made by the kadi of the Bursa court in numerous inheritance cases (p.535). Raw silk prices jumped from 73.8 akçes on average in 1550-70 to 290.4 on average in 1620-40, a 293% increase (±8.5% yearly inflation; p.536).

Input

Part of the inflation may be due to the war with the Shah – Iran being a major provider of raw silk. But the correlation between price increase and military operation is less than perfect and cannot be the sole nor even the main inflationary factor. The rise of another Ottoman silk manufacture centre seems unlikely (although the growing Istanbul cotton industry may have competed for dyestuff; p. 538).

In fact, the growing of European demand for raw silk may be the key explanation (p.539). The mechanization of the Italian industry (orsoglio “alla Bolognese”) boosted its output. The technique later spread over Europe; tellingly the English import of Levant silk increased by 275% during the 17th century. Over the period, consumption of raw silk by the European industry increased dramatically (p.540).

The Ottoman industry lagged behind both in technological (hydraulic mill) and organizational (expansive putting-out system) terms, its costs of production were significantly higher than those of its European counterpart and thus it could seldom compete with them for raw material (p.541). Moreover “Ottoman raw silk was not expensive for the English and the Dutch. They benefited from successive depreciations of the Ottoman currency and the resulting exchange rates which favoured the relatively stable English pound and Dutch florin.”

Market shares

On the other hand, lower European demand for Ottoman silk fabrics and increased import from Europe that saturated the domestic Ottoman market explain the relatively modest growth of cloth compared to raw silk over the period (p.542). The rapid inflation benefited a small Ottoman elite but significantly impoverished the masses. This fact favoured the more expensive European imports pursued by the Ottoman nouveaux riches. The bulk of domestic production focused on light and cheap cotton cloth for the peasantry (p.543).

In the mean time European woolen export competed with domestic silk production; “English broadcloths affected the heavy silk cloth and the […] Dutch sayettes affected the lighter silk cloth.” So much so that during this period of inflation the cost of English broadcloth actually decreased (p.544).

Another key reason for the low price of English cloth in the Ottoman Empire was the fact that the English Levant Company had to sell it at dumping prices in exchange for raw silk, which guarantied handsome benefits once brought back to England (p.546).

Conclusion

From 1550 to 1650, the price of raw materials (dyestuff, silk) increased quickly, on the other hand the price of the final product did not growth as fast. “Faced with such a price structure, decline in profitability seems inevitable” (as no notable improvement in productivity is observable, machinery remained quite primitive until the 19th century; p.547).

“A producer faced with rising input costs usually tries to transfer them to his consumers in the form of higher prices. Of course, the ability to do so without suffering drastic reductions in sales depends on the elasticity of demand. When demand is elastic, the cloth producer is forced either to leave the industry or to economize by using less costly raw materials, which usually has adverse effects on the quality of production. From the evidence adduced earlier in this paper, one can argue that the demand for Ottoman silk cloth was quite elastic, and that the Ottoman clothiers took the latter recourse. Indeed, the court registers are full of documents pertaining to attempts by desperate clothiers to circumvent guild regulations and reduce the quality of their cloth.

The Ottoman cloth producer was subject to the combined pressure of increasing input costs and elastic demand? Together these would seem to conduce to a decline in production” (p.548).

The auction prices of the silk tax farms are excellent indicators of raw silk imports into Bursa and silk fabrics exports. The former rose constantly but the latter decreased significantly after 1577. This latter trend cannot fully be explained by the effects of the Celali uprisings. Hence, Bursa shifted during the “price revolution” from a silk fabrics export centre to a raw silk re-export hub. Thus European competition, monetary instability and political turmoil have conspired to trigger Bursa’s deindustrialization cycle that would last until the mid 19th century (p.550).

References

Braude, Benjamin (1979) “International Competition and Domestic Cloth in the Ottoman Empire, 1500-1650: A Study in Underdevelopment”, Review: Journal of the Fernand Braudel Center, 437-61.

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