by Jared Rubin
In the long run, the Spanish economy declined in both absolute and relative terms.37 By any metric of economic success, the Spanish economy struggled after the age of expansion in the sixteenth century. The average Spaniard was poorer in 1820 than in 1500, real wages did not reach their pre–Black Death levels even by the mid-nineteenth century, and consumption of agricultural goods plummeted. In relative terms, the Spanish economy also suffered. Spanish real per capita GDP was slightly higher than England’s in 1570; by 1700 it was 60 percent of England’s, and by 1750 it was less than 50 percent. Spanish per capita GDP was 78 percent of the Dutch in 1570 but fell to 46 percent of Dutch per capita GDP by 1650.38 Cities also declined after the sixteenth century. The Spanish urbanization rate fell from 14.5 percent in 1591 to 13.5 percent by 1750; between 1594 and 1694, the cities of Valladolid, Toledo, and Segovia lost more than half their population.39 The urban population only started to grow again in the late eighteenth century. This is the opposite of what occurred in England and the Netherlands, where urban populations exploded on the eve of industrialization. Even Spanish agricultural productivity declined in the seventeenth century, in sharp opposition to England, the Dutch Republic, and France, all of which achieved major productivity gains.40
The failure of Spain to develop an economy based on capital accumulation, secure property rights, and most of the other features generally associated with long-run economic success was among the great “lost opportunities” in European economic history. For a few generations, Spain seemed to be on the verge of breaking through and becoming an economic powerhouse of Europe. It should be clear by now that the fact that this did not happen was in part due to a deeply rooted institutional structure that did not favor economic growth. The strength of the Spanish Crown meant it rarely had to negotiate with the economic elite in order to gain revenue. This was the unfortunate irony of early modern Spain: the Crown’s strength was precisely what facilitated Spanish long-run weakness.
Religious Legitimacy and Economic Stagnation in the Ottoman Empire
It is just as useful to think of the Ottoman sultan as “solving” a constrained optimization problem as it was English, Dutch, or Spanish rulers. The sultan chose the best laws and policies he could to propagate his rule, conditional on the constraints he faced from his propagating agents. However, the sultan’s constraints were much different than those faced by Western European rulers, especially Protestant ones. The differences in these constraints were not random: they resulted from a long series of path-dependent processes, many of which this book highlights. This section spells out what those differences were, why they arose, and their economic consequences.
By the early sixteenth century, the Ottomans ruled over a vast and heterogeneous empire that included Arabs, Turks, Slavs, Muslims, Christians, and Jews. The differences in the ethnic and religious makeup of their many territories meant that what propagated rule effectively in some regions worked less well in others. Of course, religious legitimation by Islamic clerics was only effective where the population was largely Muslim. According to Barkan (1970), about 60 percent of Ottoman households outside of Istanbul were Muslim in the fifteenth century, although there was wide variation across the Empire. By the 1520s, the Ottomans controlled southeastern European cities with almost no Muslims, such as Athens, while other southeastern European cities were largely Muslim (see Table 8.3). Even in Anatolia (modern day Turkey), Christians made up a nontrivial portion of the population in many cities including Istanbul, which was only 58 percent Muslim. On the other hand, Muslims made up most of the population in the Arab provinces (see Table 8.4). It follows that religious authorities were good propagators of rule in some places – the Arab provinces and parts of Anatolia – but were much less effective in providing legitimacy in other areas.41
Table 8.3 Religious Composition of Principal Ottoman Urban Populations, 1520–1535
City Muslim Share Christian Share Jewish Share
Turkey
Konya 98.0% 2.0% 0.0%
Bursa 97.1% 1.1% 1.8%
Ankara 88.7% 10.2% 1.0%
Edirne 82.2% 12.9% 4.9%
Istanbul 58.3% 31.6% 10.1%
Tokat 53.9% 46.1% 0.0%
Sivas 25.8% 74.2% 0.0%
Greece
Larissa 90.2% 9.8% 0.0%
Serres 61.4% 32.7% 5.9%
Nicopolis 37.7% 62.3% 0.0%
Trikkala 36.5% 41.6% 21.9%
Thessaloniki 25.3% 20.3% 54.4%
Athens 0.5% 99.5% 0.0%
Southeastern Europe (besides Greece)
Monastir 75.7% 20.2% 4.0%
Skopje 74.8% 23.8% 1.4%
Sofia 66.4% 33.6% 0.0%
Sources: Barkan (1970), Westcott (2013).
Table 8.4 Religious Composition of Certain Arab Provinces circa 1570–1590
City Modern Country Muslim Share Christian Share Jewish Share
Basra Iraq 100.0% 0.0% 0.0%
Aleppo Syria 97.3% 2.6% 0.2%
Baghdad Iraq 93.2% 5.9% 0.9%
Damascus Syria 90.1% 7.8% 2.1%
Tripoli Libya 76.4% 23.0% 0.6%
Sources: Barkan (1970), Westcott (2013).
Over time, the Muslim population share grew in many of the previously Christian provinces, thereby increasing the efficacy of religious legitimacy. Even Athens, which had few Muslims in the beginning of the sixteenth century, was 29 percent Muslim by 1675. More generally, Southeastern Europe became increasingly Muslim over the course of the sixteenth and seventeenth centuries, especially in the larger cities (see Table 8.5). This increased the efficacy of religious legitimacy precisely in the places where it was least effective in the early Ottoman period.
Table 8.5 Muslim Population Share in the Sixteenth–Seventeenth Centuries, Select Southeastern European Cities
City Muslim Share, 16th century Muslim Share, 17th century Years of Observation
Athens 5% 29% 1540, 1675
Belgrade 29% 78% 1536, 1660
Ioannina 4% 49% 1564, 1670
Nicosia 15% 50% 1596, 1683
Prizren 40% 80% 1530, 1643
Sarajevo 27% 98% 1477, 1600
Seres 55% 70% 1500, 1659
Sources: Westcott (2013), Bearman et al. (2005).
In the fifteenth and sixteenth centuries, the Ottoman combination of military prowess and religious legitimacy allowed them to embark on expansionary conquests. The Ottomans gained military strength by bargaining with the Turcoman military elite, who supported the sultan’s expansionist efforts in return for land in the newly conquered territories. As a result, the size of the Ottoman Empire expanded immensely in its first few centuries. After the initial years of expansion in the northwestern Anatolian peninsula (Turkey), the Ottomans conquered the Balkan Peninsula and the rest of the Anatolian peninsula by the mid-fifteenth century. The Ottomans expanded their empire in the sixteenth century, conquering modern-day Hungary, Romania, Moldova, Azerbaijan, Armenia, Iraq, Syria, Lebanon, Jordan, Israel, parts of the Arabian peninsula (including Mecca and Medina), and almost the entire north African coast (see Figure 8.1).
Like their Western European rivals, the Ottomans were constantly engaged in war in the sixteenth century. Wars required money, and to address their fiscal needs the Ottomans tapped the resources of their expanding provinces. Their fiscal apparatus was on par with that of the major European powers in the sixteenth century. Only France was able to collect significantly more revenue than the Ottomans did, although the powerful European states were able to extract much more per citizen than did the Ottomans (see Table 8.6). Indeed, the Ottomans had nearly three times the amount of revenue at their disposal than the English did in the 1550s, and more than twice the revenue of the Venetians, their most important rival in the struggle for dominance over the Eastern Mediterranean. Two-thirds to three-quarters of tax revenues came through the timar, a military lease contract whereby the provincial cavalry collected agricultural taxes directly from the peasantry as remuneration for their military services to the state.42 The timar system was
similar to the tax collection system of feudal Europe, where local feudal lords controlled revenues in return for military service. The major benefit of the timar system to the Ottomans was that it allowed them to pay wages to their military despite facing currency shortages that made it impossible for peasants to pay taxes in currency. Religious jurists (kadis) delegated control over who could collect taxes, and all feudal incomes and privileges came only from the sultan.43 In order to prevent these jurists and timar holders from becoming too powerful in a region, sultans rotated both at least every three years.44
Table 8.6 State Revenues, 1550–1559, Annual Averages in Tons of Silver (Total) and Grams of Silver (Per Capita)
Total Tax Revenue Per Capita Tax Revenue
France 151.6 10.9
Spain 107.1 19.1
Ottoman Empire 106.1 5.6
Venice 48.9 29.6
England 35.9 8.9
Poland-Lithuania 6.5 0.9
Sources: Karaman and Pamuk (2010).
Chapter 5 noted how important religious legitimacy was for the Ottomans, especially after the conquests of Constantinople (1453) and Mecca and Medina (1517). These military achievements bestowed religious legitimacy on the sultans even though they lacked a bloodline to the Prophet or Arab heritage. They bolstered their religious legitimacy by “acting Muslim” in setting laws and policies, a necessary task for any ruler claiming legitimacy from an Islamic religious establishment (see Chapter 3). The Ottomans further secured the support of the religious establishment by bringing them into the government, which gave the clerics a greater role in governance in return for their public approval of laws and policies. In the late fifteenth century, the Ottomans established the office of the Grand Mufti, a powerful position that oversaw the hierarchy of religious jurists.
Bringing the religious establishment into the state did decrease its capacity to legitimize. Perceived as under the thumb of the sultan, the religious hierarchy was not an independent source of legitimacy like the Islamic clerical class was in previous centuries. This was a calculated decision by the Ottomans, where two factors made the benefits of religious centralization within the state greater than the costs of weakened legitimizing capacity. First, the growing and heterogeneous empire required judicial decisions that favored Ottoman policy under a range of environments. By creating a hierarchy with the top positions gaining power, wealth, and prestige, the Ottomans helped incentivize jurists of all ranks to support their policies; any jurist who challenged Ottoman policy was unlikely to rise within the hierarchy. Second, and more important, the Ottomans pursued controversial policies – particularly with respect to territorial expansion – many of which flew in the face of Islam. As early as 1485, the Ottomans had their sights set on invading the Muslim Mamluk Empire, which controlled Egypt, parts of the Middle East, and the holy cities Mecca and Medina. By 1517, the Ottomans conquered the Mamluks. This war against another Muslim empire clearly needed the support of the Ottoman religious establishment, as invading and killing Muslims was much more difficult to justify within an Islamic context than invasions against states outside the world of Islam. The Ottomans soon thereafter (1532–1555) fought against another Islamic Empire on their eastern flank, the Persian Safavids. In short, these were not wars consistent with “acting like a good Muslim.” It was more advantageous for the Ottomans to have a weakened religious establishment supporting its decisions than to have a strong but independent religious establishment who was unlikely to give the Ottomans support for their expansionist ambitions.
The symbiotic relationship between the sultan and religious establishment was most famously exemplified by the powerful Grand Mufti Ebu’s-su’ud, who was the primary religious official under the important sultan Suleiman I (r. 1520–1566). Ebu’s-su’ud was famous for harmonizing the desires of the sultan with Hanafi Islamic law, going as far as justifying the title of Caliph for Suleiman I even though the Ottomans lacked a blood connection to Muhammad and were not Arab. Ebu’s-su’ud, like most other Grand Muftis, was also willing to cede to the state’s needs with respect to administration: he systematized and legitimized laws of crime, property, trusts, taxation, and marriage in favor of the sultan’s desires and in a manner consistent with Islamic law.45
The sultan’s ability to manipulate the religious establishment, along with his support from the provincial military elite, had economic consequences. Unlike many Western European rulers, especially Protestant ones, the Ottomans did not have to negotiate with the economic elite in order to propagate their rule or attain tax revenues. This is not to say that the Ottomans never gave concessions to local landholders – they did, especially under the timar system. Nor is it to say that sultans never negotiated with non-Ottoman economic elite – they did, and as the Ottoman economy weakened in the eighteenth and nineteenth centuries, sultans broadened the commercial privileges of foreign merchants via capitulations. The point here is simply that the Ottoman economic elite – merchants, money changers, and manufacturers – had very little say in government policies.
This stands in stark contrast to Western European rulers, even Catholic rulers, who began to negotiate with the economic elite in parliaments as early as the twelfth century. European rulers at various times gave up some rights over property and people to the economic elite in parliaments in return for revenue and political propagation. This was especially true after the Reformation, when the Church lost its capacity to legitimize Protestant rulers. But there was no institution akin to a parliament in the Ottoman Empire. No organized groups of elites met regularly to constrain the sultan. This was in part because there were no independent cities with which to negotiate,46 but there was also little need for the sultan to negotiate with the economic elite prior to the seventeenth century. The reason is simple: the sultan had no reason to relinquish rights to the economic elite because it could acquire revenue and legitimacy without them.
The constraints on Ottoman sultans were hardly set in stone. It is possible to see how these constraints changed over time by briefly focusing on institutional changes that occurred in the seventeenth century. The Ottoman propagating regime changed dramatically over the course of this century, as Ottoman expansion through conquest began to recede due to push back from Western Europe and the Safavid Empire. Meanwhile, the costs of warfare were increasing as the Ottomans realized the need to have a permanent standing army in order to compete with the growing European powers. Reduced access to conquest revenues and increased costs of warfare altered the Ottoman fiscal situation. By the mid-seventeenth century the Ottomans collected substantially less revenue than the major European powers did. Even though the population of the Ottoman Empire was about four times that of England and more than ten times that of the Dutch Republic, the Ottomans were able to extract less tax revenue from their citizens by the 1650s than these two nations (see Table 8.7).
Table 8.7 State Revenues in the Seventeenth Century, Annual Averages in Tons of Silver (Total) and Grams of Silver (Per Capita)
Total Tax Revenue Per Capita Tax Revenue
1600–1609 1650–1659 1600–1609 1650–1659
Spain 430.8 412.7 62.6 57.3
France 294.2 1053.7 18.1 56.5
Ottoman Empire 122.6 150.1 5.8 7.4
Dutch Republic 116.8 213.9 76.2 114.0
Venice 67.6 68.0 37.5 42.5
England 65.7 196.1 15.2 38.7
Poland-Lithuania 15.2 39.9 1.6 5.0
Prussia 3.5 6.3 2.4 9.0
Sources: Karaman and Pamuk (2010).
For these reasons, the Ottomans decentralized both the tax collection system and local law and order in the seventeenth century. They turned to local power brokers, known as “notables” (ayan), to propagate their rule and collect taxes in regions that could not easily be controlled from Istanbul. The Ottomans employed notables for many purposes: collecting taxes, mobilizing troops, maintaining public order, and managing civil disputes (see Chapter 6). Notables possessed some form of local social, economic, or political power – they were
elites – owing their position to their capacity to maintain law and order. The Ottomans initially decentralized their fiscal and legal capacity by granting notables the right to farm taxes for a year in return for an upfront cash payment. As fiscal demands grew, they extended the length of these contracts. Because there were no financial markets in which the state could borrow on a large scale, extending these contracts was a method that allowed the Ottomans to borrow large sums of money with future tax revenue as collateral. Beginning in 1695, the state sought large short-term payouts in return for lifetime tax farms under an institution known as the malikane system.
On the surface, the shift away from propagation by the religious and military elite to the notables seems similar to the post-Reformation changes that occurred in Europe, where parliaments played a larger role in financing and propagating kings. In both Protestant Europe and the Ottoman Empire, rulers ceded power in order to increase their access to revenue. However, there were two fundamental differences between the notables and Western European parliaments. For one, the notables did not collectively organize as a group, so they could not bargain with or constrain the sultan. Prior to the seventeenth century, the sultan did not need to bargain with local elites, since he was able to attain revenue and the support of the provincial military by giving them tax farms and the promise of future conquest. Individual, not group, ties were the basis for the relationship between the sultan and the military elite. The military elite did not bargain collectively for their tax farms – the sultan provided each member his own fiefdom. Unlike European rulers, who occasionally faced serious threats to their legitimacy, which forced them to bargain with the elites as a group, the Ottomans never faced a serious threat to their legitimacy after they conquered Constantinople in 1453.47 Hence, the sultans never ceded privileges to the economic elite on the scale of their Western European counterparts. This meant that when the Ottoman fiscal situation deteriorated after their conquests ceased in the seventeenth century, there was no institutionalized collection of elites for the sultan to bargain with. So the sultans turned to the notables, who were the only people who could collect taxes without military force due to their social position.
