Review Uneven Centruies: Economic Development of Turkey Since 1820 by Sevket Pamuk

Content Summary

In this article, we will deal with the first two chapters of Sevket Pamuk‘s Uneven Centruies: Economic Development of Turkey Since 1820 book with a summative approach and try to interpret them by explaining the basic economic statistics.

Uneven Centruies: Economic Development of Turkey Since 1820 Price Comparison

In my teenage years, I voraciously consumed many documentaries that I understood and did not understand. In one of those documentaries – I think it was a documentary by Michael Moore – it was said that economics is not really that complicated, that a simple and striking truth is covered up by many mathematical operations to make it look complicated.

So is it really so?

First of all, nothing is simple in the 21st century, dear reader. Despite being talked about so much, even the basic concepts of economy are not known enough. For this reason, it becomes a concept that helps those in power and those in opposition to successfully manipulate their voters all over the world. However, we know that scientific thinking is possible by knowing the basic concepts correctly.

There are many statistics that are told by heart, but the details are ignored. For example, central bank reserves. Of course, it is very important in terms of showing the economy of a country and the level of prosperity of its people, but it is insufficient without details. For example, a country can increase its Central Bank reserves by bringing foreign currency and receiving investments from abroad, but while doing this, it creates a more important data than the reserves under which liabilities. Let’s think about it this way: We bought a nice house, but we also got into big debt. In this case, there is no problem in our reserve being negative. Debts are paid over time. However, there is no point in selling the house so that our reserves do not run short. For this reason, liabilities and detailed data that are not disclosed in the main news are also of great importance. For example, our gross national product has been compared with other countries for years. But what exactly do these terms mean?

Let’s take a closer look at the basic concepts based on the book “Uneven Centuries: Economic Development of Turkey Since 1820 ” by Sevket Pamuk, our respected professor of economics.

What is Gross National Income?

Statistics are meaningless if they do not reflect human well-being.

Humanity did not experience massive increases in its annual average income until the Industrial Revolution. In the heydays of the Roman Empire or the Ottoman Empire, it was quadrupled in places, but we know that there was no huge increase in the average annual income of humanity until the 1800s and remained more or less the same. Until the Industrial Revolution happened…

There is a difference between the annual dollar amount per person and the purchasing power.

With the Industrial Revolution, the average annual income of people has increased 8 times in the last 200 years. However, 200 years ago, there was a difference of 3-4 times between the most developed country and the poorest country, but today this difference has increased to 60 times[1]. As wealth has increased around the world, inequality has also increased. In the chart below, you can see the change in the gross national product of many countries, including Turkey, over the years:

Per Capita Income in the World (Source)

After the second world war, a rapid growth and an increase in annual average incomes were observed in all countries. It is not included in the chart, but Turkey’s average annual income per capita in 2020 is $8538, according to the data announced by the World Bank. [2]In other words, even when we exclude the striking increase in the dollar exchange rate in 2021, our average annual income per capita from 2010 to 2020 has decreased by almost 2 thousand dollars.

The dollar is one of the basic calculation tools of the world economy.

However, it was realized that the gross national product was insufficient to explain many things. For example, although the average annual income per capita reflecting the gross national product in a country was 10 thousand dollars, a large part of the society could not even reach 6 thousand dollars a year. It turned out that the important thing to measure the level of welfare is not the average obtained by dividing the total wealth by individuals, but how evenly this wealth is distributed to the base. When you did not spread the wealth to the base, there was economic development, but it was not sustainable.

On the other hand, although the gross national product calculated in dollars was closely related to the level of welfare, it was insufficient to explain the purchasing power of a country. For example, while one bread can be bought for one dollar in the USA, three loaves of bread can be bought in Turkey. For this, economists began to focus on the concept of purchasing parity, which reflects purchasing power.

What is Puchasing Power Parity?

Purchasing power parity is a term used to calculate the annual income of citizens in a country and their domestic purchasing power. Although the difference in value between the dollar and the Turkish lira is large in Turkey, its purchasing power is relatively good compared to the dollar rate. In the chart below, you can see the ranking of Turkey’s purchasing power among some world states in 2021, based on the table of the European Union Statistics Office (Eurostats).

2021 Purchasing Parity of the European Union Statistics Office (Source)

However, purchasing power parity did not provide sufficient data to calculate the welfare level. Philosophical problems began to arise in the calculation of these parities. Computers and similar products were greatly affected by the exchange rate difference. Moreover, taxes increased this difference even more. Things got complicated when the calculations couldn’t be done with tomatoes and bread as before. of the economy; It has become more evident that concepts such as education, transportation and health are closely related and affect each other. Finally, the United Nations published what is called the human development index.

Human Development Index

The ultimate goal of growing the economy is to increase human well-being. In order to ensure economic growth or to see whether these data represent the real welfare of people, the human development index, which also considers people’s access to education, transportation and health opportunities, was put forward.

“Human development is defined as the widening of options for people and society so that they can live more freely by increasing the time they do not have to work, and the freedom to use their abilities as they wish.”[3]

Calculation is also very interesting. As the income level rises, the effect of income increase on the human development index decreases. Because what is important now is to use these resources correctly and to increase welfare. Below is a chart showing Turkey’s Human Development Index ranking by years in 2011 according to the United Nations.

Turkey Development Index Ranking of Turkey By Years

Source: United Nations Development Programme, Human Development Reports, 2011

There is a finding that for the last 30 years, Turkey has not been as good as it should be in the field of education relative to per capita income.[4]

Poverty is not destiny.

It’s worth pointing out. According to the report published by the United Nations in 2020, Turkey achieved a significant increase in the human development index and ranked 54th among 189 countries.[5]

General Evaluation of Two Sections

Dealing with a 200-year time period in the book is related to the fact that the economic course of the world is closely related to the Industrial Revolution. Although income inequalities have increased since the Industrial Revolution, wealth is spreading more widely than in previous millennia, and our average incomes tend to rise, albeit falling. While 100 years ago, the average human lifespan was 35-40 years, today we are moving towards 75-80 years. We are the generation with the highest purchasing power and wealth level in the history of the world. If there is no great destruction, the next generation will have a higher income level than us.

Turkey Cover of Uneven Centuries Book

Of course, no statistics are permanent for any country, and most importantly, poverty is no longer the destiny of any country. Far eastern countries such as India and China experienced a revolutionary economic development. Turkey has the potential to create such a miracle, especially to rise to the top in purchasing power. It just needs to be noted. To create an economic miracle, to close the gap between us and modern civilizations as Atatürk intended, and to be able to rise above it, requires that the growth not remain below 5% in a period of at least 20-30 years[6]. Turkey, on the other hand, has not been able to reach an average of 5% for twenty and thirty years in any sub-period of the 200 years we have left behind.

What Turks need to do is to make free thought prevail, to ensure justice in every field and to reach a qualified level with a brand new epoch, not only in industry and production, but also in art and science. The children of this nation, who have accomplished a lot in a short time before, can again achieve a lot in a short time. Moreover, we have the necessary resources for this today. Let’s achieve a lot of things and make it permanent this time.

A photograph taken while Sevket Pamuk was teaching at the University of Georgia.

Editor’s Note

The reason why I only publish the review of the first two chapters is this: I am a person who is doing a doctorate on Turkish education in my own way. I am afraid of making a wrong interpretation as the book gets deeper, and I calculated that it would take a period to examine the whole book, which is quite tiring because I constantly compare it with current data. This text is just a blog post to motivate you to read the book. Therefore, I present only the review of the first two chapters. Maybe if I can’t stand it, I’ll publish other parts in the future.

References

[1] Maddison, Angus (2007), Historical Statistic for the World Economy, 1-2005, OECD Development Studies Centre, Paris.

[2] https://data.worldbank.org/indicator/NY.GDP.PCAP.CD

[3] Pamuk, Sevket (2014), Türkiye’nin 200 Yıllık İktisadi Tarihi, Türkiye İş Bankası Kültür Yayınları: İstanbul.

[4] Pamuk, Sevket (2014), Türkiye’nin 200 Yıllık İktisadi Tarihi, Türkiye İş Bankası Kültür Yayınları: İstanbul.

[5] https://www.tr.undp.org/content/turkey/tr/home/presscenter/articles/2020/12/hdr-2020.html

[6] Pamuk, Sevket (2014), Türkiye’nin 200 Yıllık İktisadi Tarihi, Türkiye İş Bankası Kültür Yayınları: İstanbul.

References Used As A Lınk Or Used When Wrıttıng The Text Wıthout Footnote

Wikipedia

Maddison, Angus (2007), Historical Statistic for the World Economy, 1-2005, OECD Development Studies Centre, Paris.

Prichett, Lant (1997), “Divergence, Big Time”, Journal of Economic Perspectives, c.11, s.3-17.

Data.worldbank.org

Data.tuik.gov.tr

Tr.undp.org

Sevket Pamuk (2014), Türkiye’nin 200 Yıllık İktisadi Tarihi, Türkiye İş Bankası Kültür Yayınları: İstanbul.