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State and non-state are distinguishable, generally based on the construction, organization, and military. Nonetheless, the methods of payment and taxation in state societies vary. When trying to make a historical understanding the structure and institutions are critical to consider. This paper focuses on the socio-economic typology in regards to Ottoman empire, particularly examining the socio-economic history of the empire, and most importantly the multiplicity of socio-economic systems commonly classified into two significant systems: cash-based and fief-based systems, which lead to the empire’s growth into a vast Middle Eastern Power. Through the example of this empire, this paper explains how the two systems work.
Fief system broadly was based on the giving of a conditional land grant to collect the agrarian taxes on that piece of land, as a substitute for a cash salary. The fief-holder is conditioned to answer upon being called for service as an exchange for being given the ground to collect taxes from the fief. In principle in all possible sources of revenue belong to the king or the ruling, where they are responsible for parceling out the land to each group in exchange for military and political support and service. On the contrary, cash-system collects cash-based taxes and pays salaries in cash. From the army, bureaucracy, judiciary, education, purchases, investment to all kind of state-sector salaries. This system demanded a highly-monetized economy, and communication technology as a transfer mechanism, which was not available until the early modern era.
Ottoman Empire was one of the longest-lasting dynasties and one of the most remarkable states in global history, emerging in the Anatolian highlands built by Turkish tribes around c.1300 enduring until the World War I. Starting as a semi-tribal principality, then evolved into a state, and later on, evolved into an empire. The multi-ethnical, multi-linguistic and multicultural empire built their rich and powerful state through building a synthesis that welcomed newcomers. The Ottoman empire was said to be having the wealthiest and the most powerful state system due to the aspects that constructed their empire. The enormous agrarian sector based on small production, and also international trade the ancient trade routes such as Silk Route and Spice Route, that provided a cash flow, consequently an urban economy.
Essentially, the whole revenue from every source is in the possession of the sultan. The sultan exercised royal domain or royal eminent right (rakabe). However it was not possible to manage the lands owned by the ottoman empire, therefore the land was distributed to people. Ottoman lands were classified into three. Öşri lands that belonged to Muslims they had freedom and property rights, but they were giving tax of tithe (öşür). In the same way, non-Muslims had the same rights and they were giving tax of ‘haraç’ for their lands. The larger parts of lands belonged to the state. These lands were called as ‘Miri’ demesne lands.
As it is seen, Ottoman Empire began the timar tax system at the foundation of the it. The Timar system depended on conquests. Ottomans constantly gained lands and timar system was broader and the number of soldiers increased gradually. Consequently, a huge military power and the key to Ottomans’ success. In the second half of the sixteenth century, when there was a growing shortage of money, created by the trade of precious stones, and a growing scarcity of land distributable under the timar, as the Ottoman expansion came to an end that’s when the traditional timar system started falling apart. Another reason was the weakened power of the sultans. Because of all these factors, the central authority was weakened, the wars could not be won and the economy of the state was destroyed. As a result, taxes were increased. In addition to this, Sultans started to distribute the Miri lands falsely. To supply the need of money, the state started to rent lands as a trade product which is called iltizam. In time this system changed into the manor system. In 1831, after Tanzimat, the timer system was finally abolished. In the course of the dissolution of the timar system, the private possession of estates (ciftlik) became official. Only in the second half of the nineteenth century did a capitalist change take place in the Ottoman economic system. First, in agricultural sectors, labor were hired, the primary means of the capitalist system of production, and then to a larger extent until it collapses with the coming of the Turkish Republic.
All in all, the adoption of the timar system mainly due to fiscal-military considerations, aimed at the economic guarantee of military reforms. The government was able to bring together most of the land under its power in the form of state domains. The institutional change that took place described key factors of events in the history of the Ottoman Empire. However, it can be seen that institutional change isn’t always effective, as exemplified the institutional changes that took place were merely to reform distribution and not production growth, or economic growth. An important dimension is that regardless of the amount of money circulation in the empire, it still didn’t have enough to be a cash-based modern state, but rather party cash-based until the 19th century and when there was a change of system into cash-based. Although there was a significant success and military strength in the empire, it still Vanished in 1992.
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