Wen|Mumu
Editor|Stargazing
Europe and other countries took a large number of raw materials from the Ottoman Empire, resulting in the lack of necessary raw materials for the development of imperial handicrafts. Europe, in turn, made these imported raw materials into finished products at a very low cost, which were sold in large quantities to the Ottoman Empire.
The Ottoman Empire had essentially become a source of handicraft raw materials and dumping ground for Western countries.
Therefore, the advanced handicraft industry in Europe caused the "backwardness" of the Ottoman handicraft industry. But in reality, the Ottoman Empire maintained limited trade with Europe until the nineteenth century.
The goods imported by the empire were mainly luxury goods and ceramics that did not compete with domestic goods. Finally, the price revolution also changed the urban demographics of the Ottoman Empire.
In cities, closely related to handicrafts is the system of city guilds, which in the Ottoman Empire had both handicraft management and administrative functions, and city guilds managed all handicraft production and organization in the city, imposing maximum prices on products.
The guilds also had some ties to the central government, through which the government administered the city. The effect of the price revolution on cities is that a large number of people from the countryside have migrated to the cities, increasing the number of people in the cities.
In the middle of the seventeenth century, the vast majority of the city's population consisted of artisans in various occupations, such as carpenters, tailors, weavers, spinners, shoe workers, etc. However, this does not mean that the urban population at this time was engaged in commerce and handicrafts.
In the cities, a group that is neither craftsmen nor merchants makes a living by engaging in plantation, gardening and vineyards.
Thus, it can be inferred that in the seventeenth century, various agricultural structures existed in and around the cities of the empire in order to incorporate immigrants into the cities. On the other hand, the price revolution has made guilds more closed and more strictly managed.
This closure is manifested in the strict control of the entry and exit of the guild, and those who have previously left the city need the consent of the craftsmen in the guild if they want to re-enter the guild.
The number of shops opened in the city was subject to strict control by guilds, such as blacksmiths in Istanbul who tried to open more shops, but this proposal was ultimately rejected.
In 1721, Istanbul also established an institution for the protection of guilds, whose closed nature, although mitigating the effects of the guilds from the price revolution, also increased the impact of the price revolution on handicraft industries.
After that, the guilds continued to exist for a long time, and the existence of the guilds helped to maintain feudal rule, which partly caused the capitalist development of the empire to lag behind that of Europe. The price revolution affected the wages of urban artisans.
First, Suleiman's research
Using a register of Istanbul building records, Suleiman examined trends in the wages of urban workers and learned about changes in workers' wages. Wages are usually expressed in two ways—nominal wages and real wages.
Nominal wages are wages received by workers in monetary terms. Real wages refer to the amount of goods purchased at monetary wages.
In general, the higher the nominal wage, the higher the real wage, provided that other factors remain equal. However, real wages are affected not only by nominal wages, but also by the level of prices.
Thus, sometimes nominal wages remain unchanged and real wages may fall. Pamuk has also studied this issue in detail.
After 1500, especially between 1500-1600, workers' nominal wages increased, but this increase in wages was based on not taking into account the cost of living, but there is no doubt that prices rose during the price revolution, raising the cost of living.
In addition to the overall comparison of wage levels, a separate comparison of the wages of skilled and unskilled construction workers shows that the wage level gap between the two is still very large.
According to Suleiman's research, throughout the sixteenth century, the real wages of unskilled construction workers fell by 30 to 40 percent, and the wages of skilled workers were 1.5 to 2 times higher than those of unskilled workers.
This wage gap also exacerbates the differences in living standards and living conditions between the two groups.
In addition, according to the collection of wage data on skilled and unskilled construction workers in the eastern Mediterranean and other Ottoman cities in the Balkans from 1490 to 1914, these data show that the nominal wages of workers in other cities also increased more than three hundred times.
According to Pamuk, the most important determinants of real wages are changes in prices and the speed at which nominal wages adjust. Because nominal wages are adjusted slowly, price fluctuations directly lead to fluctuations in real wages.
Due to the harvesting conditions of agricultural products and the difficulty of road transportation, consumer prices fluctuate greatly in the short term. But the most important factor influencing the price changes in the empire in the sixteenth century was the devaluation of the currency.
In response to this currency depreciation, the empire adjusted prices and nominal wages, but this adjustment was backward, and the price adjustment changes after the depreciation were more affected by the economy, and the more open the economy, the faster the currency depreciated.
Nominal wages adjust even more slowly than prices, so currency depreciation leads to lower real wages.
II. The Impact on the Ottoman Empire's Monetary System
Beginning in the second half of the sixteenth century, the continuous financial crisis and currency fluctuations eventually caused the worst inflation in the history of the empire, and the silver content of Akçe plummeted, becoming extremely light.
Small daily transactions also required a large amount of Akche, so the people abandoned Akche in favor of European currencies.
Unlike European countries such as Spain, the Ottoman Empire did not participate in overseas silver mining, and silver poured into the Ottomans, mainly for commercial trade, and did not flow into the pockets of the Sultan government.
In addition, some of the silver flowing into the Ottoman entered East Asia, especially China, and Europe bought raw materials from the Ottoman Empire in large quantities, shipped them back to their own countries for processing, and then transported the finished products into the Mediterranean Sea for sale.
As a result, some silver returned to Europe from the Ottoman Empire, in addition, silver sources became less and less, and the depletion of silver mines made it impossible to guarantee a stable supply of silver for the mint.
During the eight years of Murad III's reign, about 40 mints produced Akche, and twenty-five years later, the number of mints dropped to 30.
In the thirties and forties of the seventeenth century, the number of mints in operation fell sharply, and during Ibrahim I there were no more than 7 mints. This indicates that production in Akche has stopped.
The currency instability and currency fluctuations brought about by the devaluation of the currency in 1585-1586 led to a shortage of currency for the Ottomans, and the economy needed money, especially small amounts suitable for daily transactions.
When the Ottoman government could not meet this requirement, European entrepreneurs became "Ottoman money providers".
The general public of the empire had lost confidence in the Ottoman currency and switched to European currency, and the European currency was promoted and accepted in the Ottoman market.
In the mid-seventeenth century, French, Italian, and Dutch merchants minted money in southern France and northern Italy, and elsewhere in Europe, the metal content of much of the currency had been reduced to silver-plated copper.
These European currencies were then shipped to the Mediterranean region as payment currency for Ottoman goods, sometimes sold in bulk to Ottoman merchants or money changers.
The Ottoman Empire did not restrict the circulation of these coins, and actually preferred to accept them, sometimes even volunteering to pay in European money.
The most widely used European currency in circulation was the Dutch Taylor, and after 1550, silver coins minted by the Americas called Groschen began to circulate in the Ottoman Empire.
When the latter could not obtain Spanish silver coins from the former for political reasons between Spain and France, in 1641 French merchants turned to Marseille to the Mediterranean to introduce the five sumes originally issued by Louis XIII.
In France, twelve five-subee coins can be exchanged for one gold coin eju or one Spanish currency figure-of-eight coin. Soon after the French five-soy coin entered the Ottoman market, eight five-soy coins could be exchanged for one Spanish eight-figure currency.
If at this rate, then the purchasing power of French five suks in the Ottoman currency market is very high, and with this currency as the salary of an unskilled construction worker in Istanbul, then his daily wage is two such coins.
Due to the large difference in exchange rates between the east coast and the west coast of the Mediterranean, French merchants soon imported five Su coins in batches, and a few years later, French merchants began to mint coins similar in appearance to five Su coins, but with less silver content and a relatively large amount of alloy.
Italians and the Dutch soon joined this trade. They generally traded by first negotiating and signing contracts with the monarchs of southern France or northern Italy, who had the power to mint money.
Minted a large number of base metal coins bearing his name. In this way, the currency bearing the monarch's name depreciated, and other currencies continued to circulate on the Ottoman market.
As the currency content fell and the trading volume increased, the exchange rate of the French five sousts against the Spanish currency fell to 20:1, and the lower exchange rate made them easier to trade on a daily basis. French depreciated coins peaked in circulation between 1656 and 1669.
It is estimated that about 180 million euros flowed in through the Ottoman customs, equivalent to 1 million in Spanish currency. In gold terms, these currencies were equivalent to more than 6 million ducats, not counting the amount smuggled into the empire through bribery of customs.
Another data estimates that an average of twenty ships arrived at the port of Izmir each year during this period, all loaded with depreciated currency.
These quantities indicate that the surplus good money on the Ottoman market was gradually being brought to Europe, reminted and exported to the Ottomans, which were flooded with devalued European currencies.
In the currency of the Ottoman Empire, copper coins disappeared from the market for a while from the thirties to the eighties of the seventeenth century, due to the low profit of copper coins and the fact that their use was not very widespread.
However, to address fiscal austerity, the government issued copper coins worth the equivalent of 600 million akçe's nominal value. The minting technology used by the empire to produce money continued to use the same technology as before.
Most mints use small and medium-sized handicrafts to produce by hired workers. But Europe adopted a more advanced technique of money production, and these new currencies circulated near the empire, gradually putting the empire at a disadvantage in terms of money quality and output.
In order to reverse the disadvantage, after 1686, the government imported new production technology and equipment from France, and began to use mechanical technology to mint coins.
After the abdication of Mehmed IV in 1687, Suleiman II faced the urgent task of finding enough money to pay the salaries of his soldiers, which had been suspended for a year.
As the financial crisis continued, the government decided to use new equipment to produce copper coins. In 1688, the Istanbul Mint began minting new mangols, which weighed about half the weight of one dirham.
Its value was equivalent to half that of Akche, and due to the popularity of these currencies, they soon became equal in value to Akche. To increase the number of new mangols, Istanbul increased the number of copper coinage mints.
In just a few months, production increased from 300,000-400,000 coins per day to 600,000 per day. To solve the problem of copper supply, mints first mined copper from government-controlled mines and bought scrap copper on the market when these mines ran out of production.
New copper coins were first circulated in the Balkans and Anatolia, from Thrace, Macedonia, and the Aegean Islands to western Anatolia and the Black Sea coast, and were widely accepted in the Ottoman provinces.
The ledger records of the Istanbul Mint show that the price of copper and the cost of production combined account for about 30% of the notional value of the 600 million coins, based on changes in the price of copper and minting production.
The remaining 70% went to the state as net seigniorage revenue, which totaled 38 million akche, which was equivalent to 14 million gold coins at the exchange rate at the time, and the empire's annual income during these years was about 12 million akche.
In the short term, the government's approach was successful, as it provided the government with a much-needed seigniorage and alleviated the fiscal crisis. But seigniorage with such high profits attracted the attention of many currency counterfeiters, including counterfeiters in Europe.
They began to produce all kinds of inferior mangols, and the emergence of counterfeit currency made it difficult for the Ottoman copper coins to circulate in the market, so after Ahmed II came to the throne, the government stopped producing copper coins and did not recognize the existing currency in the market.
At this point, the new Mangol copper coin was withdrawn from the Ottoman currency market. After the price revolution, it turned out that the empire's most important silver coin, Akche, existed only as a monetary unit.
In fact, it has completely disappeared from currency circulation, and the devalued European currency and the new copper currency have occupied a dominant position in currency circulation.
The stable gold and silver monetary system of the fifteenth century had collapsed, and there was no stable and lasting currency circulating in the market, and new copper coins were popular for a short period of less than a decade.
It was not until the eighteenth century, after the recovery of the imperial economy, that the government issued a new silver coin called Kurus.
Impact on fiscal and tax systems
During the first three decades of the sixteenth century, due to the expansion of foreign conquests, the imperial finances sometimes ran into surpluses. But this surplus was replaced by a deficit by the end of the sixteenth century.
Of the imperial expenditures, the most important were army expenditures. In the early sixteenth century, the needs of the army were met by territorial conquests.
Territorial expansion reached its limit in the middle of the sixteenth century, and by the end of the sixteenth century, fiscal spending grew significantly faster than income, and the depreciation of silver brought about by the price revolution aggravated the financial burden on the empire.
Thus, from the second half of the sixteenth century, the fiscal surplus gradually turned into a deficit. Tax revenues and expenditures grew fastest in the Ottoman Empire throughout the sixteenth century, and by the end of the sixteenth century, imperial spending began to exceed revenue.
For most of the sixteenth century, the empire averaged 132 tons of silver per year in taxes and about 118 tons of silver, equivalent to 3,000,000 duquetes and 2,680,000 duquetes, respectively.
Other additional taxes such as Wackf are not included in the above taxes. The treasury spends an average of about 118 tons of silver per year, which is less than the financial expenditure of Spain and France.
At the end of the sixteenth century, Spain spent 500 tons of silver, and France spent 440 tons of silver. The gradual backwardness of fiscal levels contrasts sharply with the increasing need for money in the treasury.
The decline of the Tima system brought the traditional taxation system to an end, and in order to cope with the economic fluctuations brought about by the price revolution and to make up for the gap in the fiscal system of the backward Tima empire, the government began to adjust the tax system.
In the early days of the Ottoman Empire, there was a stable tax system, and there was a central institution dedicated to managing fiscal revenue and expenditure.
The Ministry of Finance was established by the Grand Vizir Kandari Khalipasha under Murad I, and the way the finances of the early empire were managed was also influenced by Seljuk and Byzantium.
The Empire assessed its taxes by means of a tax survey, through which the information obtained was recorded in a register.
The information recorded in these registers includes the number of taxpayers, mode of residence, ethnic and religious origin, age, family structure, agricultural and artisanal production and cross-regional migration.
The register also provides information on land ownership and use, the composition and distribution of the ruling class, and incentives and remuneration for government employees.
The person in charge of this investigation is called an agent or registrar, usually a provincial governor or financial official, ulima, an intellectual, and the person in charge of assessing taxes registers the relevant information after a detailed investigation.
The registrar records two identical registers, one of which is kept in the Ministry of Finance and the other is confirmed by the Sudan as a law governing taxation.
Corrections to these register information were also usually the responsibility of the recorder, and in the fifteenth and sixteenth centuries, it became customary for tax assessments in the Ottoman Empire to be carried out every thirty years.