An abuse of such proportions of a religious belief for purely material interests ought to be hard to find in history. The declaration by Tayyip Erdoğan, the principal architect of the free-fall of the Turkish Lira, of interest as nass (textually verified principle of Islam) to defend himself is nothing but a desperate final attempt to hide the material reality from the eyes of the people. To understand this, we need to go back in time and grasp the roots of the crisis currently underway.
The AKP government had a lucky streak in the economic field up until the year 2013. That year, when the tide of the 2008 financial meltdown began to ebb somewhat and the Federal Reserve raised interest rates, the AKP government found itself increasingly deprived of foreign credit support.
2013 witnessed another development. Nearly 4 million people took it to the streets as they joined the Gezi popular revolt in 80 out of 81 cities of Turkey, while yet others engaged in what the Latin Americans have dubbed “cacerolazos”. Erdoğan lost a lot of the power he had previously enjoyed. Now everything was on more shaky grounds. As accusations of corruption and the loss of previous allies combined with economic hardships, the AKP found it increasingly difficult even to win elections, let alone stay in power.
In the face of all this, and as the foreign capital support decreased, boosting up the economy through various artificial means, such as credit guarantees or foreign debt, became the principle economic policy of the AKP. Interest rates rose as debt accumulated through credit guarantees. The Turkish Lira was squeezed as foreign debt picked up. As both these factors rendered impossible for the main institutions of economic policy (that is, the Vice-Premier Responsible for Economic Policy and the Central Bank) to employ artificial means, the “strong will-power”, a characteristic Erdoğan has attributed to himself in the past, came to the forefront. Erdoğan intervened in the economy with a hustle-and-bustle attitude of “I know how this thing works” in 2018. The Central Bank’s benchmark rate of interest had to be kept low for the construction and manufacturing sectors to find clients, investments to keep up, the Anatolian bank-less capital to remain unharmed, to help the small traders who generally support Erdoğan to survive, and Erdoğan to keep winning elections. All this has now been dubbed nass (a principle of Islam that bans the practice of interest on capital).
Squeezed between slavery to international finance and the election-winning motor
The symbolic turning point came right before the 2018 elections. As Erdoğan declared that he should “be able to intervene in the functioning of the Central Bank” in his visit to London, i.e. one of the two temples of interest around the world (the other, of course, is Wall Street in New York), the Lira began its headlong plunge. The Minister of the Economy Mehmet Şimşek had to fly to London with lightning speed to convince London of Erdoğan’s soundness. The AKP government temporarily stepped back, but a new era had already begun.
The appointment of Berat Albayrak, Erdoğan’s son-in-law, to the Ministry of the Treasury and Finance (with its brand-new Americanized title) signaled clearly that the economist-in-chief was going to be none other than Erdoğan himself. Just at the same time, the lira experienced a second free-fall in August 2018. The same thing has been recurring time and again since that moment. From a structural point of view, the background to these recurring crises consists of forcing every single opportunity to the utmost limit for the sake of preserving an up-beat economy, including the reduction of the country’s foreign exchange reserves to the negative zone. Berat Albayrak resigned and disappeared from the scene under the combined impact of this context and the inner contradictions of the semi-military regime. However, the economy experienced yet another – and this time the greatest ever – crisis of TL devaluation exactly a year after Albayrak’s inglorious resignation, since the problem was not Albayrak but Erdoğan himself.
If an economy is structurally standing on such shaky grounds, if it is progressing in a way similar to a tightrope walker treading on a thin and tense string with a long stick in his hand, a myriad of concrete factors can lead to waves of monetary speculation. This is exactly what is currently underway. Erdoğan’s November 22nd declaration along the lines of “I do what I want to the economy” has upset all balances. The extremely smart explanation by the Central Bank, i.e. the talk about “unhealthy, unrealistic price formations completely out of touch with economic foundations”, is a response that would deserve an F in a first-year macroeconomics class in any economics department of any university. Speculative movements are speculative precisely because they are unrealistic! Tell the people about the reasons that allowed for these speculative movements in the first place, let us understand whether those are real or not, and then maybe you will pass the exam!
So let us draw the conclusions. Behind all these waves of speculation lies the material contradiction between the slave-like dependence of the economy to international finance that Erdoğan has been practicing for two decades and his devil-may-care economic policies necessary for him to keep winning elections. The recent nass claim (the claim of incontrovertible religious principle of the ban on interest) functions as aspiritual veil thrown over this material reality.
Would “early elections” cure the economy?
It is now obvious that Erdoğan has brought the economy to the brink of the abyss. The economy has come within the orbit of hyperinflation. The artificial growth of past years, or rather, the artificial prevention of recession, may even lead to a roaring contraction in the very nearby future. We are walking on the edge of the knife.
What is the response of the National Alliance, the bourgeois opposition bloc, to this economic disaster? “Early elections!” Alright then. Let us assume that they successfully organize early elections. Let us further assume they win. Let us go so far as to assume that the current semi-military regime and the fascist calamity that is its ally hands them power peacefully. We have already assumed a lot, but let us do so for the sake of argument. Now they are in charge. What are they going to do to rescue the economy?
The so-called social democrats don’t utter a single word on this point, for they know perfectly well that the people won’t like it. Let us share with the reader our prediction drawn from the whole picture with confidence. The bourgeois opposition bloc would hand economic policy to Ali Babacan, who earlier served under Erdoğan for 13 years. They would bring in another economist who suits them and who is an obedient servant of international financial capital to the head of the Central Bank. This duo would then, in their turn, unleash an IMF program with or without IMF involvement, i.e. raise the Central Bank’s benchmark interest rates, obediently pay the trillions of Turkish lira worth of foreign debt accumulated thanks to Erdoğan, impose austerity on the people, and meet TUSIAD’s [the main organization of the Turkish bourgeoisie, the equivalent of Business Roundtable in the US] demands for “structural reforms”. So, the cure the bourgeois opposition will seek is Ali Babacan!
Those who will impose such a program on the people and condemn them to unemployment, poverty, and starvation, albeit with methods different from the current ones, know perfectly well that they wouldn’t get a single vote from the people by declaring their program out loud. Hence their silence on the matter.
The Left’s dead-end
Important centers of the socialist Left have responded to the speculative wave currently underway with a call for a “general strike”. The DIP shares this call. However, the demand the socialist Left outside of the DIP raises immediately following the “general strike” is extremely strange: “early elections”!
A call for a general strike is a call for a showdown between the working class and the government in power. It is a moment for the working class to impose its own will upon the government through its own methods by displaying its own force that resides in the sphere of production, drawing the bourgeois government outside of the sphere of parliament and elections and forcing it to retreat. Once such a settling of account starts, there can be no telling where it would evolve. Let us give a few partial examples, since there has never been a general strike in Turkey in the true sense of the term.
When the miners of Zonguldak went on strike in the Fall of 1990, did anyone, including the workers and union leaders themselves, know that this would lead into a historically significant militancy and the Great March on Ankara? When the Tekel workers from all over Turkey gathered in Ankara towards the end of 2009, had anyone predicted that this would result in a 72-day occupation in Sakarya, a central district of the city, almost resembling a conquest of the capital by the working class?
No further example is needed. The answers to these questions are clear. Mass working-class actions carry the potential of unleashing a dynamic beyond the will of all actors involved. The unity of the masses has the capacity of creating a snowball effect. The result may well surpass the sum of individual parts in these situations.
Now, the Left is raising the banner of a general strike in the name of the socialist movement, and then immediately pulling the brakes! Early elections mean nothing more than participation of masses of workers as individual, isolated citizens into a formal democratic arrangement played totally according to the rules dictated by the bourgeoisie, (the 10% election barrier) with all its money and might (the media, the police etc.). Isn’t it clear that this would create a dynamic totally different from a general strike?
The succession of these two contradictory demands is a declaration by these socialist currents of their readiness to vote for the National Alliance’s candidate together with the HDP in the second round of the elections. These socialist currents have elevated supporting one wing of the bourgeoisie into their main political principle without even trying out the opportunities made available by the working class’s own methods of struggle.
What would be the result? Making the people suffer thanks to Ali Babacan’s policies! And even the capitulation of the Turkish economy to the IMF, when the steadfast rejection of the IMF has become the catechism of the socialist Left over the decades!
Repudiation of foreign debt, fixed rate of exchange, a single state-owned bank!
It might be said: but there is no other way to fix the economy that Erdoğan has brought to the brink of the abyss! Is there any chance that the economy can be fixed without playing by the rules of the market, given the huge foreign debt?
This is the scarecrow that bourgeois liberalism puts forward against every fight for an economic policy shaped according to the interests of the working class and the toiling masses. A section of the Left has grown addicted to the neoliberal passion for the “independence of the Central Bank” as a result of Erdoğan’s overstepping of this fetish! One is of course bound to slip and trip constantly if, like Erdoğan, one attempts to turn over the independence of the Central Bank without breaking the yoke of Wall Street, the City of London, and the Frankfurt Stock Exchange over the economy.
Yet the solution lies in cutting the Gordian knot with Alexander’s sword. Just refuse to pay the foreign debt, and many doors will be unlocked. Determine a fixed exchange rate to preserve the lira’s value. Nationalize without compensation all private banks, and first and foremost the joint enterprises with imperialist partners, and fuse them into one single bank. This way one would both get the opportunity to plan centrally all the resources of the economy from a single locus, and hand over the function of the central bank to the government in power to be shaped in the interests of the working class, the toilers, the oppressed, and the poor. Abolish the convertibility of the currency. Shut down the stock market. The casino fades away, a new era of planning according to a democratic will begins.
With what political power, you ask? The power that would base itself on the developments unleashed by a potentially explosive general strike, and that would also address the problems of the Kurds, the Alevis, women, and all other oppressed, as well as the class issues that also haunt Kurdish workers and toilers.
For this to happen, of course, first the Kurdish movement has to drop seeing its future in the support by imperialism and the never-delivered “democratic openings” by the bourgeoisie, and take its place alongside all workers, toilers, and the oppressed of the society. We have been trying to explain to them that this is the correct path for a quarter century now. However, they are taking the road that they think to be “realistic” and are led from one disaster to another.
This also requires a socialist Left that trusts fully the working class and its struggle. The Left has leaned towards several wings of the bourgeoisie and the European Union throughout the 1980s and the 1990s, as Turkey was emerging from the shadow of the September 12th military coup at snail’s pace, and has paid a high price for this. Persisting in this same mistake at every juncture by saying it is “just this time” is not realism but defeatism.
We say that the working class will never be able to gain its independence as long as those who call for a “general strike” also rally for “early elections” immediately following the former demand. A socialist movement that does not make class independence its main political principle cannot provide solutions to the problems of the working class or other oppressed sections of the society.
We may not prove victorious over the IMF, the “market-economy”, Babacan and the likes, imperialism, and the political and social power of the bourgeoisie immediately. But if we don’t wage a war on these today, the path to liberation will remain closed tomorrow and forever.
Worse still: with this type of politics, even Erdoğan’s despotism will not come to an end!
This article was first published in Turkish on the web site of Gerçek, the central organ of the DIP. The English translation is by a comrade of ours.