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Opinion(A. H. Yalaz)

Chapter 1
Theoretical framework and methodology

1.1. Theoretical framework
In this thesis I investigate the role played by the state in neo-liberal restructuring of the economy of Turkey. The neo-liberal restructuring of the economy involves, above all, the change of the dominant mode (regime) of capital accumulation. Determination of the mode of capital accumulation depends, essentially, on the power relations between different social forces, particularly between the capitalist class and the working class in each country. It does, however, not mean that the ‘choice’ of the mode of capital accumulation in a country can be made in isolation from the developments in the world economy, especially from the developments in the dominant capitalist economies of the imperialist system. This means that determination of the dominant mode of capital accumulation is also a result of global class struggles. The individual national economies and the individual states do not function in isolation from the international capitalist division of labour. Therefore, the economic functions of the state and the ‘choice’ of the mode of capital accumulation must be considered and studied in the given national and international historical context. As Cothran emphasises analysis of domestic situation is not enough to analyse and understand the role played by the state in transition from one economic strategy to another. The impact of a changing world economy on the individual national economies is very substantial and the world economy imposes harsh conditions especially on those countries with less-developed economy that are dependent on world capital and markets (1994: 122-6). The degree of integration of the world economy requires that, for example, the transition from the import-substitution industrialisation to export-oriented economic strategy in Turkey must be studied and understood in the context of restructuring the capitalist world economy.

Capital as a social relation
The accumulation of capital is the essence of the capitalist economic system, and, as Marx put it, the capitalist process of production is simultaneously a process of accumulation (1984: 218). Capital accumulation is the driving force of the capitalist system and capital forms both the point of departure and the conclusion, but what is capital in Marxist sense of the concept? Capital can be defined as the money and goods that are used to create surplus-value. It is ‘a kind of stored-up labour’ or ‘dead labour’ (Engels 1979: 15-16). To the question ‘What is capital?’ Engels replies: ‘(...) Money which is changed into a commodity in order to be changed back from a commodity into more money than the original sum (...)’ (1979: 24). ‘Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks’ (Marx 1983: 224). Capital as self-expanding value embraces, inter alia, ‘class relations, a society of a definite character resting on the existence of labour in the form of wage-labour’(Marx 1986: 108). As Marx pointed out, ‘the growing accumulation of capital implies its growing concentration’ and ‘capital comes more and more to the fore as a social power, whose agent is the capitalist.’ (1986: 264). Marx emphasised this social character of capital when he discussed revenues and their sources:
‘Capital, land, labour! However, capital is not a thing, but rather a definite social production relation, belonging to a definite historical formation of society, which is manifested in a thing and lends this thing a specific social character. Capital is not the sum of the material and produced means of production. Capital is rather the means of production transformed into capital, which in themselves are no more capital than gold and silver in itself is money. It is the means of production monopolised by a certain section of society, confronting living labour-power as products and working conditions rendered independent of this very labour-power, which are personified through this anti-thesis in capital (...)’ (1984: 814-815).
Capital arises from social labour and must be understood as a fundamental social relation that denotes a mode of division of labour. The accumulation of capital forms an integral part of the production of surplus-value. A part of surplus-value is not used to satisfy the consumption needs of the individual capitalists, but to enlarge capital. Capital accumulation must be seen as a social relation of exploitation. Marx defined the accumulation of capital as the reconversion of a portion of the surplus-value (unpaid labour) into capital. ‘If a certain rate of profit is given, the mass of profit will always depend on the magnitude of the advanced capital. The accumulation, however, is then determined by that portion of this mass which is reconverted into capital (...)’ (Marx 1984: 245). The production of surplus value (unpaid labour), according to Marx, is the immediate purpose and compelling motive of capitalist production (Marx 1984: 243-244).

The mode of capital accumulation
The mode of capital accumulation denotes a mode of production of surplus-value and a mode of redistribution of this surplus-value that conform to the transformations in relations of production and in consumption and in the reproduction of labour-power. According to Aglietta, ‘a regime of accumulation is a form of social transformation that increases relative surplus-value under the stable constraints of the most general norms that define absolute surplus-value.’ (1979: 68). These general norms that define absolute surplus-value are social practices that relate to the utilisation of labour-power in production, the determination of wages and the socialised management of the reproduction costs of the wage-earning class (Aglietta 1979: 69). There are two regimes of accumulation: the predominantly extensive and the predominantly intensive. Under the predominantly extensive regime of accumulation the labour process is organised in such a way that increasing the absolute surplus-value is the main form of the production of surplus-value. Under the intensive regime, however, the production of relative surplus-value is increased by increasing the productivity of labour.

Capitalist regulation
Capitalist regulation involves the totality of the conditions, such as the capitalist relations of production, the social institutions, norms, etc. that secure the stability and reproduction of the existing mode of capital accumulation. It is often asserted by the advocates of the capitalist order that the market must be free of every sort of state regulation. The capitalist market, however, has always been regulated to a great extent, sometimes to a very great extent, by the capitalist state throughout the historical development of capitalism. It would be no exaggeration to say that without state regulation capitalism as a social system could not have survived.

As Aglietta puts it, ‘the regulation of capitalism must be interpreted as a social creation.’ According to him, this theoretical position makes it possible ‘to conceive crises as ruptures in the continuous reproduction of social relations, to see why periods of crisis are periods of intense social creation, and to understand why the resolution of a crisis always involves an irreversible transformation of the mode of production.’ (1979: 19).

‘The competition between autonomous capitals issues from the fundamental antagonism of the wage relation that is the motive force of capital accumulation.’ (Aglietta 1979: 18). The forms of competition between individual or autonomous capitals ‘are historically modified to the extent that the expanded reproduction of capital in general imposes its demands on social relations as a whole. This contradictory process does not take place without transforming the structure of the state itself. The more the capitalist class is divided by the changing forms of competition, the more it is impelled to seek its unity in the framework of the state and to consolidate its domination by enmeshing the entire society in state-governed relationships. This leads to both economic and ideological practices of state intervention which constitute a development of basic social relations (...).’ (Aglietta 1979: 19). The interaction between the transformation in the conditions of existence of the wage-earning class and the change in the forms of competition between individual capitals is at the heart of the problems of capitalist regulation (1979: 21). The study of the totality of social relations at any given time forms the content of the theory of capitalist regulation (Aglietta 1979: 67).

The combinations of and the dominant and subordinate linkages among modes of social relations of production, according to Cox, delineate the social structure of accumulation, i.e., the manner in which production in one mode subsidises production in another or transfers surplus to that other (1987: 399). He defines the formation of a social structure of accumulation as ‘the putting into place of new social relations of production and new mechanisms of capital accumulation through which economic growth is able to continue and increase’ (1987: 209).

The stages of capitalist development are distinguished from each other with different modes of capital accumulation and regulation. Since the end of WW II until the mid-1970s, the Fordist mode of capital accumulation, accumulation that rested on the mass-production industry of standardised products, was the dominant mode of capital accumulation in advanced capitalist countries, i.e., in the centres of the capitalist world economy. Fordism exerted influence on the accumulation processes of the dependent capitalist economies through economic mechanisms as well as the state’s intervention in the individual economies.

The capitalist state
One of the many organisations in the capitalist society that has a certain class character is the state. The state in the capitalist society is mainly the coercive instrument of the social class that has the economic power, i.e., the capitalist class. The state is, in essence, organised violence or, as Marx and Engels argued in the Manifesto of Communist Party, the political power is the organised power of one class for oppressing another (Marx and Engels 1980: 53). However, the state is a complex instrument of class rule that has to take into account complex class structure and class interests in society. Maintaining and protecting the capitalist proprietary rights is the central task of the bourgeois state. In the capitalist society, the capitalist class is the ruling or dominant class that is in charge of the state. The state has a capitalist character and the capitalist state is the collective power of the capitalist class that consists of different fractions. The capitalist state represents the collective interests of the individual capitals; in this sense, it is a collective capitalist. Therefore, the state ownership of the means of production and distribution has a capitalist character. To understand the neo-liberal transformation in general it is particularly important to understand the class nature of the state and its role in the capitalist economy.

The state of capitalist society has a capitalist nature, but this does not mean that there is a ‘command and execution relationship’ between the capitalist class and the state. The state enjoys a relative autonomy with regard to the social classes and the strata in general and with regard to the dominant or ruling capitalist class. The capitalist state acts on behalf of the capitalist class. Thanks to the socialisation and self-interest the state bureaucracy or the bureaucratic bourgeoisie needs not to be ordered to protect and maintain the capitalist society and defend the class interests of the capitalist bourgeoisie, especially the dominant fraction of it. According to Miliband, the relative autonomy of the state ‘consists in the degree of freedom which the state (normally meaning in this context the executive power) has in determining how best to serve what those who hold power conceive to be the ‘national interest’, and which in fact involves the service of the interests of the ruling class.’ (1977: 83).

My conception of the relative autonomy of the state differs from the conception of Miliband. In my view the state does not only consist of the organised salaried professional state functionaries (the state elite), but it is an class organisation run by a bureaucratic class which is the embodiment of the unity of economic and political power. The degree of the autonomy of the state depends, inter alia, on the role of the state in the economy. The bureaucratic bourgeoisie, that consists of the civilian and military senior state functionaries (the upper echelon of the state bureaucracy, the bureaucratic elite) who manage the state affairs, controls a substantial part of the means of production, financial and other economic resources and it has regulatory powers. The bureaucratic bourgeoisie has its own socio-economic and political interests and the ‘independent’ economic power base of the bureaucratic bourgeoisie makes it more possible that the state enjoys a relative autonomy with regard to economically powerful social classes or fractions of those classes. What makes this bureaucratic class a very important force in society is that it controls and sometimes owns a substantial part of the means of production on the one hand, and it directly controls the means of coercion on the other. In other words, it combines the economic and political power. In the case of Turkey in this regard, the embourgeoisiement of the military bureaucracy is of importance in understanding the role of the bureaucratic bourgeoisie in the process of neo-liberal economic transformation. In the last three decades the military bureaucracy in Turkey has become an integral part of the capitalist class proper. The bureaucratic bourgeoisie is, however, not a monolithic social force, but, on the contrary, depending on the division of labour within the state and on the relations with domestic and international social forces, there exist different fractions of the bureaucratic bourgeoisie that represent different class interests.

It is true that the state protects the capitalist proprietary relationships and is the most important means in the hands of the capitalist class in the class struggle against the exploited working class and the economically oppressed social classes and groups. The state is also an arena, an object of class struggle between different social forces, especially between capital and labour. It operates within a certain historical-social context and cannot confine itself wholly to protecting the class interests of the capitalist class or particular fractions of this class. It must legitimise itself and pretend that it is above the class struggle. When the class struggle threatens the integrity of the capitalist order, the state acts as if it is a mediator between the capitalist class and the working class. Under such circumstances the state may be forced to make concessions to the working class. As Cox points out, the capitalist state supports capital in its drive to accumulate as well as it legitimates this accumulation in the minds of public by moderating the negative effects of accumulation on welfare and employment (1987: 281-282). In order to do this the capitalist state must enjoy a relative autonomy with regard to the capitalist class, especially with regard to the dominant fraction of this class.

The state is an economic actor as well as a political one and plays an indispensable role in the economic life of society. It fulfils several economic functions and functions as promoter and protector of the capitalist economic system. It functions as investor, producer and consumer at the same time. It owns and manages diverse industrial enterprises and service industries. The state invests in infrastructure, especially in big projects in which the individual or corporate capitals cannot or will not invest. Many ‘Research and Development’(R&D) projects are subsidised by the state or the state has influence upon the projects. Although maintaining and protecting the capitalist ownership of the means of production or the bourgeois relations of ownership in general is the most fundamental task of the capitalist state, it must be said that without state expenditures capitalist economic system cannot function.

The state power is used, inter alia, to create the necessary economic, social and political conditions for the accumulation process of capital. The capitalist state upholds the rules and necessities of capitalist reproduction. Besides its coordinative and supportive functions in the processes of production and distribution, the capitalist state actively intervenes in the economic system and in determining the economic strategy. That is why the state intervention in the process of capital accumulation is one of the most discussed subjects in political economy.

Besides the class struggles involving the working class, the capitalist class and other social classes and strata, the struggle or competition between different fractions of the capitalist class plays a substantial role regarding the mode of capital accumulation within each social formation. Despite the neo-liberal underrating of the role of it in economy, the state occupies a central place in the economy in general and in the process of capital accumulation in particular. Besides such political decisions as economic liberalisation and deregulation, denationalisation or privatisation of the state-owned economic enterprises strengthens this line of argument. The state facilitates ‘the formation of dominant-subordinate configurations of modes of social relations of production and thereby influence[s] the process of accumulation that takes place through transfers of surplus value from subordinate to dominant ones.’ (Cox 1987: 106).

The structure of the capitalist state is not static and the functions of the state in the economic life of society change in accordance with the change in the mode of capital accumulation and vice versa. There is a dialectical relationship between the economic structure of a society and its superstructure in general and political superstructure in particular. In different stages of capitalist development the state has economic functions corresponding to those stages. The transition from one stage of capitalism to another is characterised, inter alia, by economic crisis, changes in the division of labour and the mode of capital accumulation. The economic role of the state changes in accordance with these changes and as Kolko points out, besides maintaining public order, the state’s primary function is to renew the conditions for capital accumulation in a process of restructuring capitalist economy (1988: 188). ‘States create the conditions in which particular modes of social relations achieve dominance over coexisting modes, and they structure either purposively or by inadvertence the dominant-subordinate linkages of the accumulation process. States thus determine the whole complex structure of production from which the state then extracts sufficient resources to continue to exercise power (...)’ (Cox 1987: 399).

Two inseparable aspects of human relations: economy and culture
Economy and culture are two inseparable aspects of social life as a totality in which cultural patterns influence the economic phenomena and are influenced by them. The relationship between the mode of production and cultural practices is rather a complex one. Although the material production and reproduction of the human existence are the determining factor in human society, cultural practices cannot be seen as a simple and passive reflection of the mode of production. They are relatively autonomous from the mode of production and have their own dynamic. Culture has an active influence on the processes of production, distribution and consumption and forms an integral part of the social environment in which the material production and reproduction of human existence take place. Cultural patterns are not static, but, on the contrary, very dynamic. Every stage of economic development takes place in a cultural environment and creates its own specific cultural structures. Besides socio-economic and political factors, every economic strategy, mode of capital accumulation, etc., depends also on prevailing cultural patterns, which to a very large extent influence the social relationships. As Albert Einstein noted, ‘modern anthropology has taught us, through comparative investigation of so-called primitive cultures, that the social behavior of human beings differ greatly, depending upon prevailing cultural patterns and the types of organization which predominate in society.’ (1998: 4).

Marxist political economy as a social science recognises, in my view, no ways that are timeless or stand above the given culture of society in studying the economic phenomena. The whole system of culture and economic phenomena must be seen and understood as inseparable aspects of the social corpus. There is certain parallelism between economic changes and cultural changes and they condition each other.

What do we mean by economy and culture? How do we define them? When we talk about economy we talk about the relationships between people who produce, distribute, exchange and consume the material and immaterial means of human existence. Economy can be defined as the system of relationships between people that determines the allocation of ‘scarce’ economic resources and it concerns itself with production, distribution and exchange of the products of labour. Culture can be and is defined in several ways, but for the present purposes of clarifying the relationship between economy and culture the following definition will suffice: ‘(...) culture is a specific combination of knowledge and behavioural patterns shared by the members of a social group and creating in them a feeling of identification with that group. A group’s culture is not necessarily homogeneous but is often structured in different, and often contradictory, subfields. One of these is the norms and values (including consumption patterns) characterizing a group.’ (Carchedi 1996: 182, n18).

In a class divided society there is no general, all-embracing or common culture but specific or class-related cultures and sub-cultures. As in the domain of economic activity, there is also hierarchy of cultures and sub-cultures, the dominant culture and the subordinate cultures. They interact with each other and because the dominant capitalist class, particularly the dominant fraction of it, owns and controls the cultural means of production, its culture dominates the domain of cultural practices and greatly influences other cultures and sub-cultures. It must be pointed out that class interests and needs are also produced and reproduced by cultural practices. Every culture and sub-culture reflects the interests of a particular social class and stratum. There exists, however, no automatic cultural reflection and representation. They are produced and reproduced in the reproduction of the social life and in interaction with other cultures, global as well as domestic.

The dominant bourgeois culture, with all its varieties, functions, inter alia, as an instrument of social control and legitimacy of the existing economic order. It functions as the social cement that holds the people together under the cloak of ‘national’ interest represented by the values and traditions of a supposedly common culture. It is a socialising class weapon in the hands of the capitalist class to perpetuate its rule, not a culture that aims at maximum development of human capacities and the emancipation of humanity.

As Parenti points out, much of what is thought to be common culture is the selective transmission of class-dominated values and is largely reflective of existing hegemonic arrangements within the social order, strongly favouring some interests over others (1999: 11). He is right when he writes that taught to think of culture as an age-old accretion of practice and tradition, it is mistakenly concluded that it is not easily modified. In fact, as social conditions and interests change, much (but certainly not all) of culture proves mutable.

Another aspect of the relationship between economy and culture concerns the commodification of culture. The more the capitalist mode of production of the material goods and services grows extensively as well as intensively, the more the processes of cultural production and consumption increasingly resembles the processes of commodity production. ‘As the capitalist economy has grown in influence and power, much of our culture has been expropriated and commodified. Its use value increasingly takes second place to its exchange value. Nowadays we create less of our culture and buy more of it, until it really is no longer our culture.’ (Parenti 1999: 14). The manipulation of the so-called mass or popular culture has become in the hands of the capitalist class a powerful instrument to create new ‘needs’ that force people to consume more and more and helps to cause artificial scarcity.

Last but not least, we live in a world characterised, inter alia, by a multiplicity of cultures in contact with each other than ever before. Economic and political inequalities between countries, that also characterises the world, make it possible for some cultures, that is, the dominant culture of advanced capitalist countries, to overpower others.

Historical materialism
As a comprehensive general theory of economic, social and political human action and a self-critical theory, historical materialism makes it possible to research, analyse and understand the
concrete historical processes of economical, social and political development. It provides the necessary theoretical tools to investigate, analyse and understand the dialectical relationship between the mechanisms of surplus appropriation and political rule on the one hand and between the social forces that are involved in these processes on the other hand.

According to historical materialism, the material production and reproduction of the human existence is the determining factor in human history. Historical materialism regards the mode of production and thus the mode of appropriation, circulation and utilisation of social surplus as the determining basis of the history of society as a whole. In other words, the mode of production provides the context for the analysis of economic, social, political, ideological and cultural historical structures. (2) The interaction between the elements of the superstructure and the material structure (basis) and the counter-influence of the first upon the second are of utmost importance in order to investigate, analyse and understand the developments at all levels of society. Historical materialism is not engaged only in studying the mode of production and historical course of the development of the production and the reproduction of the human existence. The mode of production and the relations of production form the basis of the human society, but it is not the only determining factor. There exists a continuous interaction between the economic structure and the different elements of the superstructure, i.e., the state, ideology, culture, etc. The changes in economic structure create a situation in which certain social forces can predominate over other social forces.

Political economy
There is no generally accepted approach to and definition of political economy, on the contrary, there are different approaches to and definitions of the subject matter and the method of political economy. Bourgeois political economy and Marxist political economy are two main approaches with regard to studying and understanding the economic relationships between social classes and strata in the capitalist society. Political economy is ‘the science of the laws governing the production and exchange of the material means of subsistence in human society’(Engels 1976: 186). I share the Marxist view that political economy is not a neutral, but, on the contrary, a class science in which political and economic activities cannot be investigated and understood separately from each other. Marxist political economy studies the social relations of production, and not the relations between things as bourgeois political economy does. In widest sense, political economy is supposed to study the interaction of relationship between capital, labour and the state. As Brown puts it, models in political economy can never be pure economic models of the market. There are other factors or structures involved in the process, such as the state and the power of those ruling groups, which control the state (1984: 20). According to Cox, political economy is a form of critical theory which deals with the historically constituted structures that are the ways reality is defined (1995: 35).

Capitalism as a global system
I conceive capitalism as a worldwide system of which individual or distinct national economies form an integral part. The capitalist mode of production is the dominant one in this global system in which an ever-increasing movement of capital and an ever-growing internationalisation of production take place. I conceive this process, what is now called, globalisation, inter alia, as the expansion and deepening of the already existing international capitalist division of labour. Up until the mid-1970s the Fordist or mass production mode of capital accumulation was the dominant mode of capital accumulation in this global system, especially in the highly developed capitalist centres. Since the mid-1970s, however, there exists, what can be called, ‘transition crisis’ from this dominant mode of capital accumulation to another one, which is based on flexible production of goods and services. Therefore, the mid-1970s marked a major change in the world capitalist system; it marked the end of long-term stability and economic expansion. By the mid-1970s, a period of lengthy crisis of world capitalism began and neo-liberal restructuring of the world economy was conceived as the remedy against this crisis. In the period following the crisis of the mid-1970s and especially in the 1980s and 1990s the financial capital has grown in importance and become more mobile and the dominant form of capital over the industrial capital.

As far as the stages of capitalist economic development are concerned, the periods of crisis are the moments of qualitative changes, that is, quantitative changes in one stage of capitalist development bring about a qualitative change: a new stage of capitalist development. Regarding the definition of the word crisis Kolko refers to Webster that defines it as a critical turning point to separate periods, the future from the past. As Kolko points out, for capitalism, crisis is a crisis of accumulation. It is a condition when and where the problem of accumulation and the form (mode) it takes is no longer one of productive expansion (1988: 3). As Aglietta has rightly pointed out, ‘the crises of capitalism form part of the laws of its regulation, as moments of a general transformation of the conditions of production and exchange that are necessary for the law of accumulation to perpetuate itself (...)’ (1979: 384). For example, without the crisis of the ISI as a mode of capital accumulation, it could not be possible to talk about the transition to a new mode of capital accumulation based on export, namely neo-liberal export model. The crisis is sine qua non of restructuring!

The capitalist world system is characterised by, inter alia, the division of the world population into individual nation-states, the systemic or permanent power inequalities, and the inequalities regarding the access to the economic means. Because of the international division of labour, which is determined by the capitalist mode of development and the unequal and combined development of capitalism, the fundamental inequalities between the peoples of the advanced capitalist countries and the peoples of the less developed or dependent countries are continuously reproduced.

The relationship between the advanced capitalist economies and dependent or neo-colonial economies is one of the dominant and subordinate one, i.e. imperialist. After WW II indirect or neo-colonialism replaced direct colonialism as the dominant form of control regarding the less developed countries. While direct colonialism is the combination of economic annexation with political annexation, indirect colonialism (neo-colonialism) is economic annexation with formal political independence. Thanks to neo-colonialism as the new face of imperialism (Kolko 1988: 18), the imperialist capital of the core countries of the imperialist world system appropriate, what can properly be called, ‘super-profits.’ In other words, imperialism can be seen as a particular form of capital accumulation. The present world system is dominated by the big imperialist economic, political and military powers. I conceive imperialism as a stage of capitalist development in which the concentration and centralisation of capital led to a world dominated by a few highly advanced big capitalist powers. Lenin’s conception of imperialism as the highest stage of capitalism is still valid and his analysis of the imperialist world system still provides a powerful theoretical tool that must be used accordingly: ‘If it were necessary to give the briefest possible definition of imperialism we should have to say that imperialism is the monopoly stage of capitalism.’ (Lenin 1970: 736). In this politically and economically hierarchical imperialist system envisaged by Lenin and other theorists, such as R. Hilferding, N. Bukharin, R. Luxemburg, the law of the strongest reigns. The most powerful imperialist states almost always have the last word as far as the international relations are concerned.

The capitalist world system is also characterised by oppression, threat and/or use of violence, military interventions, local and regional wars. Conflict, violence and war are inherent in a class society and the international state system. The struggle among the big imperialist capitals and the states in order to re-divide and dominate the world leads to tensions, conflicts and all sorts of wars. Through their economic and military powers the imperialist states are trying to maintain the present world system and to increase the already existing inequalities in the international configuration of power relations.

The restructuring of the world economy since the second half of the 1970s is in essence a restructuring of the process of capital accumulation that involves the transition from the Fordist mode of capital accumulation to the post-Fordist one. This is a period in which the importance of financial capital has grown in relation to the industrial capital. In other words, financial speculation has got the upper hand in the competition with productive investment. It is, however, not among the aims of this thesis to analyse the processes of global restructuring in detail. Nevertheless, I shall deal with the world economic crisis and economic restructuring in general lines. That will suffice for the purpose of this thesis to point out that the Turkish state was forced to accept and implement economic models that the international agents of the imperialist capital, such as the IMF, the WB found appropriate.

In my conception of it the concept dependency does not automatically mean that the dependent economies cannot develop a substantial industrial base or they always remain basically agriculture- or primary products-based economies. In other words, they are not doomed to remain as exporters of primary products and agricultural commodities and importers of industrial goods within the international capitalist division of labour. There are many dependent countries with considerable level of capitalist development that possess a substantial industrial capacity. The question is: Can these economies realise the expanded reproduction or capital accumulation mainly by themselves without substantial injection of money-capital and technology from without? Those economies with insufficient domestic capital accumulation and a weak scientific-technological base cannot survive as a capitalist economy in the world economy without the ‘help’ of foreign capital in the forms of loan, direct investment, technology, etc. As long as the close dependence of domestic investment on foreign financing and the dominant-subordinate relationships exists within the world economy, as far as the great majority of countries is concerned, there can be no talk of interdependency but dependency. The concept interdependency conceals the unequal economic power relationships between the highly developed capitalist-imperialist countries and less-developed or dependent capitalist countries in the present world order. Interdependency can only exist between relatively equal economic powers within the capitalist world system, but not between the dominant and dominated units of it between which there exists asymmetrical power relations.

Neo-colonial capitalist position of Turkey in the world economy
The economy of Turkey occupies a dependent position in the international capitalist division of labour, it is a dependent unit of the hierarchically international capitalist order. As we shall see, the history of dependent incorporation of Turkey goes back to the 19th century, to the period of the Ottoman Empire. The Ottoman Empire became a dependent unit in the capitalist world market, dominated predominately by the large capitalist European powers, as exporter of primary products and agricultural commodities. This mechanism of integration of the Empire, of which present Turkey as geographical area formed a part, with the world economy had a determining effect on the future economic development of Turkey.

Turkey as a social formation was incorporated into the capitalist world economy as a subordinate or dependent unit and still forms a dependent component of the capitalist world system as a whole and not only regarding the international economic division of labour. The neo-colonial nature of the economy of Turkey has been strengthened in the process. As a dependent unit of capitalist world economy, the changes in the economy and in the functions of the state in Turkey cannot be analysed and understood by studying the internal dynamics alone. The dialectical relationship between the economy of Turkey as an individual unit and the world economy as a whole must be studied and understood. The position of the dependent unit in the world economy is not static, but, on the contrary, dynamic. It changes according to the developments in the world economy and conjuncture. What is then needed is a historical analysis.

Thanks to historical materialism we can investigate, analyse and understand the developments at different levels of analysis, i.e., the domestic economic and social structures, the domestic superstructures (especially the state) and the international economic, political, military and cultural structures. The developments in the most advanced capitalist states and their impacts on the individual states together with internal dynamics determine the position of the dependent unit in the capitalist world economy. The dependence of the Turkey’s economy on the highly developed capitalist economies has scientific, technological and financial dimensions. (4) The external financial dependence of the economy of Turkey deserves special attention as far as the dependent capitalist development is concerned.

Turkey is a country in which the capitalist mode of production and property are dominant. In other words, the society of Turkey is characterised by the capitalist relations, i.e., production and the capitalist appropriation of surplus-value. It is a class-stratified society that includes those classes, which own the means of production and those, which are deprived of private and/or corporate ownership of the means of production. One of the characteristics of the class structure of the capitalist society is the existence of class antagonisms and class struggles; it has a class-antagonistic social structure. There are those social forces which live on the labour of others (exploiting and economically oppressing the other social classes and the strata) and there are those which sell their physical and mental ability to work, i.e., their labour power (the exploited working class and the economically oppressed or disadvantaged social classes and strata) in order to reproduce themselves socially. (5) Those social forces that have and/or control the private and/or collective capitalist ownership of the means of production have the economic power in their hands. The proprietary rights are a condition in order to create scarcity, which in its turn, is a condition for political power, that is, they interact with each other and exercise influence on each other. Those social forces that control the economic power, as a rule, control the political power as well. Through creating and maintaining scarcity, the capitalist class maintains its economic as well as its political power, i.e., the state.

The role of the state in the neo-liberal restructuring of Turkey’s economy will be investigated within a framework of a dependent or neo-colonial capitalist development (6) from the viewpoint of Marxist political economy in an imperialist-dominated capitalist world economy. The neo-liberal restructuring of the economy of Turkey in general and the transition from ISI to EOI in particular has been, to a great extent, a product of the fundamental changes in the world economy, especially of the changes in the highly industrialised capitalist countries. These transformations in the economic structure of Turkey are also the product of a very particular historical period. The crisis of dominant economies had a very deep effect on the economies of the dependent economies in the world economy. This reflected not only the reciprocal relationship between the internal and external factors, but also the extent of dependency of the subordinate economies in the economical hierarchy. In order to answer the research question of this thesis properly, it is indispensable not to suffice with investigating the domestic socio-economic, cultural and the political structures, but also situate the domestic developments within their appropriate international historical context and study the interaction between the national and international developments. Here, too, historical materialism provides the necessary theoretical tools to work with. As Cox points out, ‘historical materialism examines the connections between power in production, power in state, and power in international relations.’ (1996: 94)

Not only the economic structures of Turkey, but also the socio-political, ideological and cultural structures underwent qualitative changes in close connection with the international developments. The changes in the role of the state and in its institutional structure reflect how substantial was the neo-liberal transformation. All this points to the fact that to understand Turkey’s neo-liberal transformation a political economy approach is indispensable. The experience of Turkey shows that political domain and economical domain cannot be separated from each other; economic structures can be and are changed by political intervention and the international and national developments are closely interconnected.

The dominant mode of accumulation and political development
There is a close relationship between the dominant mode of capital accumulation and the political developments in a society. The import-substitution industrialisation, for instance, is an inward-looking economic strategy that requires a large and ever expanding internal market. Creation of a relatively large domestic market, in its turn, requires consumers with relatively high purchasing-power. If there is mass production of consumer goods there must exist mass consumption that requires, in its turn, economic concessions to the consumers or potential consumers, particularly to the organised industrial working class, for the products of domestic market-oriented fractions of capital regarding the distribution of income and the social security system. In the presence of a multi-party parliamentary political regime, political concessions accompany the economic concessions as the political parties compete for the votes. The transition to export-oriented economic model requires contraction of the domestic market and expansion of the share in the world market. Generally, this means the end of the economic and as well as political concessions made to the consumers of the products of the domestic market-oriented sections of the industrial bourgeoisie. This means the intensification of the class struggle regarding the production and distribution of the surplus value. This also means the intensification of the political class struggle, an end to the political liberalisation and half-hearted democratisation and increasing political repression that can take extreme forms. Transformation from ISI to export-oriented neo-liberal economic strategy, contrary to the claims of the advocates of neo-liberalism, does not promote liberal democracy. On the contrary, because the domestic market becomes less important, the dominant fraction of the capital and the state controlled by this fraction have interests in curbing the political freedoms and exerting ever greater pressure on the organisations that form the civil society.

The global neo-liberal offensive
The neo-liberal offensive of imperialist capital in the 1980s and the 1990s has been many-sided. The neo-liberal transformation that Turkey underwent in the last two decades has ideological and cultural dimensions as well as economic and political dimensions. The neo-liberal offensive of capital has been an internal affair as well as an external one. The neo-liberal collaborationist class alliance (7) of the international and internal neo-liberal social class forces has coordinated its attacks against the existing economic, social, political, ideological and cultural structures. It has attacked the economic strategy, the dominant mode of capital accumulation, the form of capitalist regulation and the state’s role in the economy. In the process, this neo-liberal collaborationist class alliance has become economically and politically dominant.

The international ideological and cultural factors played their role in the neo-liberal transformation process in Turkey. The ideological and cultural transformations have accompanied the neo-liberal economic transformation, they have interacted with and facilitated and strengthened each other. Neo-liberalism as an integral part of the capitalist globalisation has functioned as an agency of further westernisation of the society of Turkey through the ideological and cultural dissemination of capitalist ideas and values of the imperialist forces. The ideas of the supremacy of the ‘free market economy’ over the state sector, the negative relationship between the state’s intervention in the economy and the individual freedoms, the need for privatisation of the state-owned economic enterprises, etc. have been a vital ingredient in the process of neo-liberal restructuring.

The forces of neo-liberalism have exported not only capital, technology and industrial products, but also their consumption patterns, their ways of life. Exporting ideological and cultural ‘commodities’ and consumption patterns, social institutions and political systems is one of the means in the hands of neo-liberal international forces to penetrate the countries and make them dependent on technologies that make the production of these consumer goods possible. The giant corporations of the advanced capitalist countries own and control the means of cultural production, they are producers and exporters of cultural commodities. Cultural commodities that transmit the dominant ideas and values of the imperialist bourgeoisie are also massively consumed by the people in the dependent neo-colonial countries. These countries are also culturally incorporated into the international cultural division of labour in which there exists an asymmetrical reliance of the dependent capitalist countries on the advanced capitalist countries: cultural colonialism. Therefore, these dimensions of the worldwide offensive of neo-liberalism and their relations to the economic and political developments deserve more attention in the international political economy regarding the power relationships between the core capitalist countries and the dependent countries of the world system.

1.2. Methodology
The neo-liberal restructuring in general and the transition from ISI to EOI in particular will be studied within the theoretical framework of Marxist political economy. I do, however, not claim that I deal with every aspect of the Marxist political economy as regards the neo-liberal economic restructuring. So far as the treatment of my research subject is concerned, I shall apply the basic categories of the Marxist political economy.

I employ the dialectical materialist method, which examines and explains the world in general and the material reproduction of social life and social relations of production in particular in constant motion and development. This method makes it possible to investigate and understand the economic and political processes as the development of the internal contradictions inherent in them as well as in reciprocal relationship with each other.

Since it is necessary to understand the whole in order to understand the separate parts, I tried to involve as many aspects of the social formation in Turkey as possible without losing sight of the aim of this study. In order to understand the role of the state in transition from one dominant mode of capital accumulation and regulation to another, the material production and reproduction of the social life and social relations as a whole are taken into consideration. However, as Marx pointed out, ‘capital is the economic power that dominates everything in bourgeois society. It must form both the point of departure and the conclusion (...)’ (1981: 213). Capital accumulation is the essence of capitalism (the organisation of capitalist production is, in essence, the organisation of production of surplus-value) and the reproduction of capitalist relations of production depends on the production of surplus value. For this reason, the investigation of the specific modes of capital accumulation or surplus appropriation and transition from one mode to another occupy a central position in this study.

The concept class is employed as the basic tool of analysis, for only class analysis can reveal the role played by the state in the neo-liberal restructuring process of the economy of Turkey. Since the subject matter of this thesis is the role of the state in the neo-liberal restructuring process in Turkey and each mode of capital accumulation is characterised by a particular set of class relations, I focus on the strategic relationships, namely the relationships between capital, labour and the state. The analysis of the dialectical relationship between the economic, social, political and cultural structures characterises this study. However, the emphasis shall be on the relationship between politics and economy: how politics determines aspects of the economy, and how economic structures determine political processes.

I investigate the neo-colonial capitalist development, the state-society relations and the reaction of the state to different stages of capitalist development, internal as well as external, as a dynamic historical process.

The production, appropriation and distribution of surplus-value are a question of class struggle, which is the main agent of social change. Class struggle is, in essence, a manifestation of the contradiction between the forces of production and the relations of production. When the relations of production cease to be forms of development of the productive forces and turn into their fetters, the antagonistic contradiction between them manifests itself as class struggle at different levels, i.e. economic, political, ideological and cultural levels. (8) Determination of the mode of capital accumulation is essentially the result of the class struggles, particularly between the capitalist class and the working class in the capitalist society. Besides the class struggles involving other social classes and strata, the struggle among different fractions of the capitalist class plays a substantial role regarding the choice of the mode of capital accumulation.

Although the choice of the mode of capital accumulation depends, above all, on the power relations between different national social forces, it does, however, not mean that the choice of the mode of capital accumulation in a single country can be made in isolation from the developments in international division of labour. Since Turkey is a neo-colonial capitalist country, the internal dynamics, particularly the internal social relations of production, are not taken as the sole starting point in examining and analysing the role of the state in the neo-liberal restructuring process in Turkey.

Turkey is an integral part of a hierarchically structured capitalist world economy, and the dominant mode of capital accumulation, particularly in the centres of the system, exerts strong influence on the process of capital accumulation. The neo-liberal transformation of the Turkish economy has also been a product of the fundamental changes in the world economy in general, and in the economies of the big advanced capitalist countries in particular. Therefore, the restructuring process in Turkey and the role of the state in this process are investigated in interaction between the international and domestic economic and political developments in a given national and international historical context.

The research is mainly a qualitative one, which combines the descriptive, exploratory and explanatory research. I shall use the already existing literature on the subject matter in order to investigate the socio-economic, political and cultural developments in Turkey in their interaction with the relevant developments in the global environment.

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(2) I employ the meaning of historical structures as defined by Cox as ‘persistent social practices, made by collective human activity and transformed through collective human activity.’ (1987: 4).
(3) I employ the concept world system to denote an international or global capitalist system in which non-state actors as well as the state play a role. It must not be confused with the realist usage of the concept as a system of states or the conception of the term by ‘world-systems’ theory.
(4) There is a close relationship between economical and political and military dependency, but this is not the place to deal with this question.
(5) I make distinction between productive labour that produces surplus value and unproductive labour that does not produce surplus value. This is why I also make distinction between the exploited and economically oppressed social classes and strata.
(6) Turkey has never been a colony of the Western capitalist powers, but it could not escape some characteristics of a colony. Moreover, in the process of national developmental path, the Turkish state itself introduced some characteristics of colonial dependency, such as importing Western norms and institutions in the name of reaching the level of ‘civilised’ nations.
(7) This term refers to the collaboration between the neo-liberal domestic class alliance and the neo-liberal global class alliance.
(8) The contradictions between the working class and the capitalist class are antagonistic because their interests are irreconcilably hostile.