4 - Social Smuggling

Summary

Monopolies constituted one of the main ways to control the economy from the Ottoman Empire to republican Turkey. Monopolies, which predominantly functioned as a mechanism to provide revenue for the state before the modern era, have gained new functions such as structuring property relations by commercializing the economy and generating revenues for modernization and state-building. Ottoman historians examined smuggling in the Ottoman Empire. What is less known is the smuggling during the early republic. The new Turkish state embarked on radical modernization and state-making projects and financed them with monopoly revenues as well as taxes. This chapter examines the responses of low-income consumers, producers and traders to monopolies and monopoly-like state control of tobacco, cigarette, salt, alcoholic beverages, textiles, sugar and forests through smuggling during the first two decades of the Republic. It argues that most actions labeled as “smuggling” were economic survival methods and were the continuation of practices with a very long pedigree because this is how people coped with the high prices of monopoly products, taxes and profit margins. The chapter shows that this informal economy restricted the republican state’s extractive capacity.