National development, production economy, and planning

Turkey cannot seem to solve its economic problems. The path followed in the economy since January 24, 1980—the policies implemented under coup conditions that went down in history as the "January 24 Decisions"—has failed to overcome the structural problems they created. Turkey, which did not have a very healthy economy even before 1980, has seen the economic-political choices it made after 1980, and the fact that different parties coming to power have essentially implemented a single economic program, exacerbate income inequality. It deepens the chasm between wealth and misery. It makes the rich richer and the poor poorer. This economic picture inevitably reflects on every field, from politics to culture, from family structure to morality, from urbanization to art, and from security to law.

Turkey is experiencing the severe consequences of choosing a growth model based on consumption rather than production, and on imports rather than exports. It will continue to experience them for many more years. It will bear the consequences of this wrong choice. Forgetting that one must produce to grow and export what is produced, and that one must plan in order to produce, Turkey is also unable to solve the structural problem of the current account deficit. As long as high external debt, high inflation, high exchange rates, high unemployment, high foreign trade deficits, and high budget deficits persist, Turkey cannot escape the middle-income trap, even though it is among the world's top 20 economies. It cannot save.

National economy, national independence, national sovereignty

When there is no strong production and export, when there is no current account surplus, and when the current account deficit is structural, the consequences do not remain only in the economic sphere. They also reflect on politics. The Republic of Turkey, founded by Mustafa Kemal Atatürk based on the principles of "istiklal-i tam" (full independence) and "hakimiyet-i milliye" (national sovereignty), is experiencing the repercussions of not having a strong economy in its foreign policy, as well as in its defense and security policies, as a result of the wrong choices made after Atatürk.

In Atatürk's words, we are experiencing the consequences of not grasping that there can be no national sovereignty without financial sovereignty, and that independence is impossible without an economy. We are experiencing the consequences of forgetting that the toughest struggle in the Lausanne negotiations was given for the abolition of the capitulations. We are experiencing the consequences of not remembering the importance of convening the Turkey Economic Congress (February 17 – March 4, 1923, widely known as the İzmir Economic Congress) in İzmir when the negotiations that began in Lausanne on November 20, 1922, were paused on February 4, 1923. Unfortunately, we will continue to experience them.

Yet, at the opening of the 1st Turkey Economic Congress, Mustafa Kemal Pasha emphasized that political and military victories must be complemented by economic victories and drew attention to the following points: "What is directly related to the life of a nation is that nation's economic situation"... "All the victories and failures that fill our history are closely related to our economic situation"... "Our age is nothing but an era of economy"... "Those who make conquests with the sword are doomed to be defeated by those who make conquests with the plow and eventually leave their places"... "The arm that uses the sword gets tired; but the arm that uses the plow grows stronger every day and possesses more land every day"... "For full independence, there is this principle: National sovereignty must be reinforced with economic sovereignty"...

Atatürk continued to draw attention to economic problems and solutions in his speeches opening the Parliament in the following years. Thanks to this awareness and sensitivity of the great leader, the young Republic entered a rapid development process through etatism and planning. By abolishing the tithe (aşar) tax, he relieved the peasants and farmers, and despite being deprived of a very important tax revenue with the abolition of this tax, he continued his breakthrough. At the same time, he paid off the debts of the Ottoman Empire.

The etatism followed is not a very harsh, very rigid etatism. In the words of İsmet İnönü, it is moderate etatism. On August 30, 1930, at the opening of the Sivas railway line, İsmet Pasha explained the etatism followed as follows: "The theory of liberalism is something this country finds difficult to understand. We are truly moderate etatists in economics. What drives us in this direction is the need of this country and the innate tendency of this nation."

Atatürk also explained etatism with these words: "The etatism system applied by Turkey is not a system taken and translated from the ideas put forward by socialist theorists since the 19th century. This is a system born from Turkey's needs, unique to Turkey. The meaning of etatism for us is this: To take individual initiatives and activities as a basis; but considering the needs of a great nation and the fact that many things have not been done, to take the country's economy into the hands of the state. The State of the Republic of Turkey wanted to do things that had not been done for centuries in the Turkish homeland through individual and private initiatives as soon as possible, and it succeeded in doing so in a short time. As can be seen, the path we follow is a path other than liberalism."

Holistic development and planning

For a strong, healthy, and productive economy, it is necessary to have a national economic program. For this reason, a production economy is mandatory. Because without production, investment, employment, and exports, it is impossible to develop, progress, grow stronger, and achieve prosperity. The path to qualified and sustainable production also passes through planning, planned industrialization, and planned development.

For such an economic breakthrough, for a large-scale development move, the fundamental problem is finding capital. There is a broad segment that is cautious, wary, and distant toward capital coming from outside—in other words, foreign capital, external debt, and loans obtained from abroad—for economic and political reasons, and for reasons of independence, sovereignty, and security, and they are very right in this regard. Those who have such reservations and concerns state that a national banking system is needed to solve this problem. For the development of domestic industry and for a production mobilization, a national and strong banking system is mandatory.

Those who founded the Republic, especially Gazi Mustafa Kemal Atatürk, thought this way. They made the Ziraat Bank, which had been established much earlier in 1863, more effective, and also established the Türkiye İş Bankası in 1924, Sümerbank in 1933, and Etibank in 1935. With factories established in a very wide range from cotton-cloth production to paper-cellulose production, and from iron-steel production to cement production, first of all, a production consciousness, production mobilization, production enthusiasm, and production self-confidence were instilled in society. With "Domestic Goods and Thrift Weeks," the aim was to reach the happiness, consciousness, and comfort of consuming what one produces, alongside its economic dimensions. It is a matter of curiosity how the liberals who mock these react to the "use American," "buy American" campaigns in the USA, and the legal regulations and tender specifications that encourage or even mandate the use of American goods.

Thrift consciousness and capital accumulation

The most ideal, most solid, and healthiest source for ensuring capital accumulation in a country is national savings. In Turkey, too, this national savings consciousness and the principle of etatism are at the foundation of industrialization. Moreover, Turkey, as a war-weary country, paid off Ottoman debts on the one hand (the Republic of Turkey paid the last installment of the debt of the Ottomans, who took their first loan in 1854, in 1954) and made an industrial move on the other. It achieved this without causing inflation and debt. Economic problems cannot be solved just by relying on foreign resources and just by pinning one's hopes on foreign resources. It is impossible for a country to industrialize, develop, progress, and achieve prosperity in this way.

In trade, it is important to produce high-quality goods containing advanced technology and sell them at a reasonable price in a competitive environment. Because this is how one becomes wealthy, creates added value, increases tax revenues, exports, and opens new job fields. A country with such an industrial and technological infrastructure thinks not only of the domestic market but more of foreign markets—that is, primarily of exports rather than domestic consumption. The quality of exports, the value they create, the foreign currency they earn, and the profit margin are also important. It is necessary for the return on exports to be high and to contribute to national welfare. The quality of the industry, its openness to competition, and its ability to produce on a global scale reflect positively on exports. In this context, exports are an important element in both achieving a high growth rate and sustainable development. Germany, Japan, China, and South Korea are important examples in this regard.

During the years of World War II, Turkey followed a successful foreign trade policy in addition to pursuing a successful and balanced foreign policy. It used its limited resources rationally, taking into account the conditions of the war. In the war years, when it could only make very limited imports, it gave a foreign trade surplus through mineral exports and chrome exports. In that period when exports exceeded imports, Turkey increased its gold stocks. In the environment of the war years that necessitated being thrifty and saving, when the CHP lost power in the 1950 elections, the Democrat Party took over the Treasury with a high gold stock. However, the Democrat Party prioritized imports instead of directing this rich gold stock to productive investments and productive economic policies. Thanks to these imports, an atmosphere of abundance prevailed in the market. This atmosphere of abundance also ensured the formation of a general perception that the Democrat Party was pursuing a successful economy, a successful industry, and a successful trade policy. With the effect of this, the Democrat Party increased its votes in the 1954 elections compared to the 1950 elections. However, the error of the economic policy followed by the Democrat Party was seen after a while, and this was reflected in the vote rates in the 1957 elections.

A state finding external resources from another state happens in several ways. The first is to attract direct foreign capital investments. The second is the purchase of material assets by foreigners. The third is the purchase of financial assets by foreigners. The fourth is borrowing from abroad. The fifth is non-repayable aid and grants from abroad. Direct foreign capital investment covers cash capital brought from abroad and capital in kind in the form of machinery and equipment for the purpose of establishing new facilities or businesses that will produce goods or services, or expanding the production capacity or modernizing an existing facility. Since foreign capital investment transfers profits and capital abroad, it takes back more than it brings. If it brings some of its inputs from abroad, it also makes hidden profit transfers through high prices and transfer pricing. By abusing its dominant position in the market, it excludes domestic, especially small, firms from the market. It limits competition by practicing price leadership. As seen in the Ottoman period, it protects the interests of its own country politically and creates pressure. There is no country that has solved its problems and developed with external resources and external debt. (Öztin Akgüç, "Dış kaynak yük, yükümlülüktür" [External resource is a burden, an obligation], Cumhuriyet, 24. 07. 2024)

Another claim of the liberals is that technological development necessarily, categorically, and inevitably ensures or reinforces justice and equality in society. This approach is wrong. Technological development does not necessarily prepare the ground for social development, equality, justice, and the spread of prosperity to the base. For these, political, ideological, social, and class struggle—and organized struggle at that—is required.