Balkan Economic History, 1550-1950: From Imperial Borderlands to Developing Nations

by John R. Lampe

Overview

Western economic historians have traditionally concentrated on the success stories of major developed economies, while development economists have given most of their attnetion to the problems of the Third World. The authors of this pioneering work study a part of Europe neglected by both approaches. Modernizing patterns in Balkan economic history are traced from the sixteenth century (when the territory was shared by Ottoman and Habsburg empires), through the nineteenth century (when they emerged as independent states), to the end of World War II and its aftermath. Despite present differences in economic systems—Greece's private market economy, Yugoslavia's planned market economy, and the centrally planned economies of Romania, Bulgaria, and Albania—the authors find that shared origins and common subsequent experiences are ample justifications for treating the area as an economic unit. Balkan Economic History, 1550-1950 will be a major case study for development economists and will provide historians with the first analytical and statistical study to survey the entire region from the start of the early modern period.

Product Details

ISBN-13:	9780253303684
Publisher:	Indiana University Press
Publication date:	06/22/1982
Series:	The Joint Committee on Eastern Europe Publication Series , #10
Pages:	752
Product dimensions:	6.00(w) x 9.00(h) x 1.75(d)
Lexile:	1470L (what's this?)
Age Range:	18 Years

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Balkan Economic History, 1550â"1950

From Imperial Borderlands to Developing Nations

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By John R. Lampe, Marvin R. Jackson

Indiana University Press

Copyright © 1982 John R. Lampe and Marvin R. Jackson
All rights reserved.
ISBN: 978-0-253-30368-4

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CHAPTER 1

The Economic Legacy of Ottoman Domination

Most of Southeastern Europe began the second half of the sixteenth century as part of a single Ottoman economy. For little more than a century after this high point of Ottoman domination, we find enough uniformity to generalize about the empire's Balkan borderlands. Had this uniform regime lasted longer, we would need a separate chapter on the background to the modern period only for the Romanian lands, not for Serbian and Bulgarian territory as well. Had the regime reached further west, a chapter on the Habsburg legacy to Southeastern Europe might not be necessary.

The centralized Ottoman system that reached the peak of its powers around 1550 had not, let it be emphasized, been responsible for the bulk of imperial expansion. Its mainsprings came from pressures at the periphery rather than direction from the center.

The Osmanli Turks had risen from obscure tribal origins on the Anatolian border of the Byzantine Empire several hundred years earlier to seize the imperial capital of Constantinople by 1453. That fateful year marked the mid-point of a 150-year campaign to conquer most of Southeastern Europe. By the end of the fourteenth century the initial Byzantine use of Ottoman mercenaries against native Balkan princes had already allowed these Turkish agents to become the independent masters of a wide band of territory from Istanbul as far west as Bosnia. By 1521, the European realm of the Ottoman Sultan reached beyond Belgrade in the north and down across the Greek Peninsula in the south.

The exact mixture of motives that drove the Osmanli so rapidly forward remains unsettled among Ottoman scholars. The main religious, economic, and military motives had one thing in common: a frontier mentality, hostile to central control and ready to migrate in search of new opportunities. The religious impulse to advance the borders of Islam derived from no overarching plan by its clergy's established hierarchy. What occurred instead was a fundamentalist merging of Moslem and ethnic values among the Turkic tribes crowding into Anatolia. The faith that emerged was mystic and individualistic. War epics and other heroic tales supported this faith more than orthodox theology. The main economic motive in this Ottoman advance was pressure from a Turkic population that the Mongol invasion had pushed out of Central Asia to the southwest from the twelfth century forward. The rocky uplands that cover most of Anatolia encouraged further movement toward relatively better Balkan land. Military motivation came from gazi bands of frontier horsemen. They drew on their Central Asian cavalry skills to pursue the booty and extra land that lay across the Byzantine border.

During the course of the fifteenth century, the Ottoman Sultan found that the frontier leaders of the gazi cavalry bands, whose feudal allegiance had been crucial to the first Balkan campaigns, were no longer so reliable. From 1453 he and his advisors were able to use the huge capital city of Istanbul as a base from which to impose a new imperial order on their increasingly large territory. A centralized system emerged by 1500 to administer already occupied land and to mobilize a predictable number of troops for new campaigns. In Istanbul a civilian center to order this military empire had also begun to assert itself. The Sultan's Imperial Council, widely known as the Porte after the place where it met with the Sultan, drew heavily on Islamic and also Byzantine precedents for arranging the new hierarchy. This bureaucratically structured but still military empire provided the economic framework with which its Balkan provinces would enter the early modern era during the sixteenth century.

The most obvious obstacle to economic growth in this early modern empire was the diversion of resources to the army. The agricultural surplus over subsistence needs that is the first prerequisite of modern growth was mortgaged to maintaining the large military establishment needed to expand the empire.

The greatest source of potential growth was the large imperial market. By the sixteenth century the Ottoman regime afforded unprecedented security for travel across the Balkan lands. Unlike the equally large Habsburg market considered in the next chapter, however, the Ottoman Balkans experienced enough political and military turmoil from the seventeenth century forward to dissipate this earlier advantage. The borderlands began to turn elsewhere for trade.

In the midst of such turmoil some change in socioeconomic structure must be anticipated. This change would not follow Marx's scenario for early modern England and concentrate rural power and property (and hence control of any agricultural surplus) in the hands of a rising commercial class. A growing number of Balkan merchants nonetheless expanded long-distance trade and took economic advantage of the migrations prompted by war and increasing disorder. Their activities were centrifugal forces, in Oskar Jaszi's famous phrase, that pulled at the economic unity of the Ottoman Empire from the periphery.

In order to weigh their significance for subsequent Balkan development, we must first examine the forces that held the Ottoman economy together when the political authority of the empire was at its fullest. The internal market aside, these centripetal forces ironically held less promise for future growth than the centrifugal ones that followed.

The Economics of the Ottoman System, 1500–1700

The military strength that was the cutting edge of Ottoman authority reached its apex in 1529. Its conquests now included a majority of Hungarian territory. That year the advance reached the gates of Vienna, where Habsburg armies were barely able to save the city. Until the threat to their imperial capital, the disjointed Habsburg forces found it difficult to resist the Sultan's more integrated army. The Ottoman state was now centrally organized around the support of its most impressive Sultan, Suleiman the Magnificent, and his army. Here was a feudal system only in the loose sense that the government had yet to make the transition outside the major cities from military to civilian rule. Otherwise, the Ottoman central government controlled a system of recruitment from outside and promotion from within that was sufficiently comprehensive to make the empire at its apex basically bureaucratic rather than feudal. The decay of central authority, one generally agreed starting point for European feudalism in the early medieval period, cannot be conjured up for the regime at Suleiman's command. In the economy as elsewhere in the system, the force and extent of command from above was too powerful during the sixteenth century to permit local notables to carve out feudal and other customary rights for themselves.

Pushing forward the cutting edge of the army were two economic institutions designed to maintain military supremacy. The timar system of land granted for military occupation and tax collection controlled rural agriculture. A network of guilds regulated urban manufacture. Their two regimes applied to virtually all of Southeastern Europe, save the western Yugoslav lands and the Romanian Principalities. The former were still under Habsburg control; the latter retained autonomy in return for annual tribute to the Sultan (see, respectively, Chapters 2 and 3).

The Land Tenure and Artisan Systems

The Ottoman system of rural administration rested on the state's ownership of almost all land and on the Sultan's grants of responsibility for timar-sized sections thereof to selected sipahi, or cavalry officers, who had been instrumental in the expansion of the empire. They made up about two thirds of the 30,000 Ottoman troops stationed in Rumelia, that is the Balkan provinces, as late as 1550. Most of the grantees were initially freeborn Turkish descendants of an Anatolian gazi, rather than the children taken as devshirme slaves from Balkan Christian families and trained for service in the Sultan's standing army, the kapikulu or "slaves of the Porte." According to Halil Inalcik, though, the slave-recruits grew in importance during the fifteenth century. By the sixteenth their best officers provided a large fraction of timar holders.

Even the freeborn grantees could be removed from their holdings at any time and faced a growing provincial bureaucracy. In Istanbul, the Sultan's Imperial Council came to be headed by a Grand Vizier and supported by a civilian staff. It recruited candidates from the ablest slaves. The Sultan and his Council increased the number of Balkan provincial administrations to sixteen by the end of Suleiman's reign in 1566. The district governors and their military and fiscal staffs had typically worked their way up through slave ranks. An additional branch of provincial government developed around courts run by judges, or kadi, who were trained in the increasingly influential Islamic system of religious education. All this put in place a considerable apparatus to hold the timar grantees to the terms of their tenure.

From the start, the terms were strict and specific. The sipahi had no claim to the land itself; it remained part of the 87 percent of Ottoman territory in the 1528 census that was state land. His sons could inherit no more than a fraction of his income, not necessarily from the same timar and only if they too served the Sultan. The father received a small fraction of the land, or better, income grant in return for his personal support and three days of peasant labor a year (native Balkan lords had demanded two or three days of labor a week during the late medieval period). Otherwise, the peasants owed the sipahi no personal services. He collected prescribed amounts of their annual harvest, roughly 10 to 20 percent. He typically used this tithe to maintain the several horses and horsemen that his grant obliged him to bring to the summer campaigns. Rather than risk the use of forced labor outside the Sultan's direct control, the grant also directed the sipahi to collect certain money taxes from the peasants. By far the largest of these levies was a head tax for the exemption of all adult, non-Moslem males from military service. Finally, peasants might pass on the right to use their part of the timar holding to their sons. They could obtain an Ottoman document attesting to that right.

What we find, in other words, is a system of land tenure far removed from the conditions of peasant serfdom, enforced according to the custom of the local lord, that fit the classic Marxist definition of the feudal mode of production. This was instead a system of military occupation, staffed and controlled by the central government. Its closest parallel, and perhaps its inspiration along with Islamic precedent, was the pronoia regime with which tenth-century Byzantium sought to secure much of the same territory.

In the towns, all residents except clergy and state officials were obliged to belong to one of a long list of esnafi, i.e., guilds or "corporations." A Bulgarian scholar has rightly called these guilds the most widespread social and economic organization in the Empire. Their origins lay in some combination of Byzantine precedent and the Islamic ethics of futuuwa that made guild apprenticeship a period of obedience and disdain for wealth. The sixteenth-century Porte organized them into a comprehensive system to control nonagricultural production and to keep the urban population in place. Two means served this end: (1) state leases for all guild shops that prevented private ownership and unauthorized changes in the goods produced, and (2) the nart list of maximum prices for artisan guild wares, based on the Islamic code of commercial conduct and generally fixing the rate of profit at 10 percent. Provincial judges and inspectors enforced these regulations. As timar agriculture supplied food, the urban economy was thus intended to supply the army with weapons, uniforms, and other equipment for pressing forward on the frontier. Both the rural and urban regimes were also designed to maintain civil order in the interior with a minimum of military forces.

Later Pressures on the Timar and Guilds

As the sixteenth century drew to a close, the Empire's rural and urban economies faced pressures that stretched the timar and guild systems beyond the limits that either could accommodate. It would be going too far to suggest that a Commercial Revolution ensued; that phrase now seems exaggerated even for Western Europe. Yet some of the same phenomena associated with the century's several-fold increase in European trade also manifested themselves in the Ottoman economy. The absence of a comparable commercial or banking tradition, barred by an Islamic legal code increasingly isolated from secular influences, lessened their impact. Missing as well was the increased central power that the English and French monarchies could claim by 1600. A progressive decline in the Sultan's authority is generally dated from Suleiman's death in 1566.

Before then the necessity of fighting European opponents had already obliged the Ottoman government to adopt the same reliance on firearms and especially salaried infantry that helped boost the annual budgets of the Western European monarchies tenfold during the sixteenth century. Improved artillery made existing defensive fortifications vulnerable. Smaller firearms then transferred the offensive advantage from cavalry to infantry.

This last change could not fail to undermine the position of the sipahi. Their ranks were already thinning as wars on the European and Persian fronts took a heavy toll. From a total of 63,000 officers holding timar throughout Southeastern Europe and perhaps 200,000 all together in 1475, the number of sipahi began to decline in the second half of the sixteenth century. By 1630 the total had fallen to 40,000 and those on Balkan timar to 8,000. The decline of the timar system and the several sorts of land holding that replaced it will concern us below.

For now, we focus on the corresponding rise in infantry to nearly 100,0. Moslems entered the Sultan's expanded kapikulu standing army as salaried adults and replaced the diminishing slave-levies of non-Moslem youth. By the end of the sixteenth century, the kapikulu infantry were recognized as the best fighting units in Ottoman service. Their salaries and uniforms added more than the cost of new firearms to the Ottoman budget.

The Janissary corps of slave-recruits that had originally constituted the infantry were busy elsewhere by this time. First assigned to provincial towns as bodyguards for local governors, they were sent in sizable numbers to ensure public order after the Anatolian revolts began toward 1600. Once in Balkan towns, Janissaries sought to supplement their meager income by the skills which their military training had also provided. They entered and often took over existing artisan guilds, swelling the ranks illegally with their sons. They also took over the collection of increasingly regular money surtaxes, which were now levied on every district household to cover extra military expenses. Fed by these surtaxes, the military share of the central government's expenses rose from 10 to 50 percent in a total budget that was larger than its French counterpart by 1600.

The revised structure of the Ottoman army was not the only source of new strain on a system of manufacturing principally intended to supply cavalry in the field. As in Europe, rural and especially urban population grew rapidly in the Ottoman Empire during the sixteenth century. A minimum increment of 40 percent seems agreed, although some Turkish scholars argue for a near-doubling. The increase from an uncertain base brought the total population of the Empire to 22,000,000 and pushed that of its Balkan territories beyond 8.000,000. Urban population throughout the Empire is reckoned from the same estimates to have doubled to more than 10 percent of the total. The resulting increase in urban demand surely put pressure on an agricultural system that offered the peasantry no incentive or means to raise its production for the market place. Such demand affected the artisan guilds only by attracting more Janissaries to share in the monopolistic rights and rigid practices that discouraged new techniques of manufacturing.

The introduction of European goods to compete with the limited and expensive production of the artisan monopolies was facilitated by a fateful opening in the Islamic code of ethics. The code did not apply to non-guild merchants engaged in interregional or international trade. Islamic inhibitions did not prevent Turks and other Moslems from playing a more active part in Ottoman trade, especially overland traffic in grain, than once was thought. Moneylending between individual traders added to growing commercial opportunities but, whether for religious or other reasons, did not include the spread of the bills of exchange in which European banking had its medieval Italian origins. The principal source of profit continued to be trade between the commercial centers of the newly enlarged Empire. At opposite ends of its Balkan territory, Sarajevo and Edirne grew rapidly to approach 50,000 inhabitants by 1600. Their merchants were largely Moslem.

(Continues...)

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Excerpted from Balkan Economic History, 1550â"1950 by John R. Lampe, Marvin R. Jackson. Copyright © 1982 John R. Lampe and Marvin R. Jackson. Excerpted by permission of Indiana University Press.
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Table of Contents

Contents

Acknowledgments, xvii,
Introduction: Issues in Balkan Economic History, 1,
Part I. New Markets in the Old Empires, from the Sixteenth to the Nineteenth Centuries — John R. Lampe,
1. The Economic Legacy of Ottoman Domination, 21,
2. The Economic Legacy of Habsburg Domination, 50,
3. The Romanian Principalities between Three Empires, 1711–1859, 80,
4. The Serbian National Economy and Habsburg Hegemony, 1815–1878, 109,
5. The Bulgarian Lands in a Declining Ottoman Economy, 133,
Part II. Modernization in the New Nation-States, 1860–1914 — John R. Lampe,
6. The Export Boom and Peasant Agriculture, 159,
7. Financial Consequences of Political Independence, 202,
8. Industrial Stirrings and the Sources of Growth, 237,
9. Economic Development in the Imperial Borderlands to 1914, 278,
Part III. War and Economic Development, 1912–1950 — Marvin R. Jackson and John R. Lampe,
10. The Disruption of Prewar Patterns: Agriculture and Aggregate Growth, 329,
11. The Disruption of Prewar Patterns: Finance and Industry, 376,
12. Structural Change and the State Sector during the Depression, 434,
13. The Economic Consequences of the Second World War, 520,
Conclusion: Postwar Industrialization in Historical Perspective, 576,
Notes, 601,
Bibliography, 688,
Index, 715,