Socioeconomics of the Ottoman reformation era
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While the industrial revolution had swept through western Europe, the Ottoman Empire was still relying mainly on medieval technologies. The vast empire had no railroads, and few telegraph lines. It took three days before the major naval defeat at Sinope on 30 November 1853 was learned of in the capital. The poor communications made it very difficult for Constantinople to control its provinces. Thus the provinces in the Balkans, North Africa, and the Middle East became almost autonomous. Serbia was now an independent nation in all but name, paying only token tribute to the Sultan. Most of the other provinces also paid only fractions of the tribute required by law. Even the areas under the Sultan's direct control had an outdated and corrupt tax system, drastically depleting revenues. The disorganization and corruption permeating the nation also discouraged trade, hurting both itself and its relations with other nations. Compared to any other European power, the Ottoman Empire also had virtually no industry, and its raw materials were not being harvested.
The western powers had invested a great deal of resources in the Crimean War (1853–1856), and they did not wish to come to the aid of the faltering Empire again. Thus the nation was invaded by British, French, and Austrian businessmen and administrators, who came to reform and rebuild the economy. This period, known as the Tanzimat, saw great changes. During the period after the Crimean War, a national bank was created, the tax system was revised and strengthened, the law was altered to emulate the Napoleonic Code, a public education system based on that of the French was created, the Orient Express railroad was constructed, as well other railroads were built that travelled along the coast of Anatolia and into the Balkans.
Then on Friday, May 9, 1873 disaster struck. The Vienna stock market crashed, triggering the Long Depression. The money and loans from abroad stopped pouring into Istanbul and the government entered a financial crisis. Unable to deal with this, Sultan Abd-ul-Aziz began to rapidly switch Grand Viziers. Unable to repay foreign loans, the empire was forced to default on them, and ask for assistance from Europe. Finally, the Sultan was deposed. Eventually, Abd-ul-Hamid II was girded with the Sword of Osman.
The Ottoman Empire's geopolitical power had always lain in its European territories, but with the rise of European nationalism in the Balkans, this power began to fade somewhat. Europe saw this fading as a sign of decline, and in the 19th and 20th centuries, it became common to describe the Empire as the "sick man of Europe". This term does not, however, necessarily reflect historical reality. The Europeans viewed the empire as a terminally sick person needing to perish, and yet this parallel was largely a misconception. The empire's actual weakness was the cultural gap, which separated it from the European powers.
In reality, the empire's economy was not in a bad condition: it was, in fact, growing along with the empire's population. The Ottoman administration was in the process of modernization, while its education and health systems were both improving. The bulk of the Empire was being urbanized by modern standards, as railroad lines, roads, telegraphs, and shipping were increasing rapidly. On top of everything, the Ottoman state was among the first in the world to take a step toward representative government. Most of the empire's problems were, in fact, the result of European imperialism. Because it was seen as an Islamic state, it was regarded as an enemy by both other European states, as well as by the different national communities within its own borders. It was the Europeans, however, who ultimately caused the most damage to the "sick man of Europe"; as Justin McCarthy states the issue: "The Ottoman Empire was not sick; it was wounded by its enemies, and finally murdered".
- McCarthy, 3