Published by EH.NET (November 2002)


Sevket Pamuk, A Monetary History of the Ottoman Empire. New York: Cambridge University Press, 2000. xxvi + 276 pp. $70 (hardback), ISBN: 0-521-44197-8.

Reviewed for EH.NET by John Munro, Department of Economics, University of Toronto.

It is my firm conviction that one cannot fully comprehend European economic history without an adequate knowledge of Islamic history (and indeed of Asian-African history) — and, from the early fourteenth century, such a knowledge, in particular, of Ottoman-Turkish history. Furthermore, I also believe that a proper knowledge of economic history must be informed by a command of monetary history (and monetary economics, of course), one of the most difficult forms of history to produce well. For these reasons, and also for the quality of the research, analyses, and historical narrative, this book is a singular triumph, a masterpiece (albeit one to be expected from such an eminent economic historian), and indispensable for European economic historians. And I read it through with ease and great pleasure, in one sitting. Very few scholars could possibly have undertaken a study with such a vast scope, geographically and temporally, covering seven centuries and this very extensive, far-flung empire, embracing not only the Anatolian heartland, but also most of the Balkans, and then, from 1517, the former Mamluk domains in the Levant (Syria-Palestine), Egypt, and adjacent lands in North Africa, Iraq and Arabia. But monetary and more general economic history of these Turkish-ruled lands are not discussed in isolation, they are admirably integrated into the mainstream themes of European and Asian economic history, particularly in analyses of commercial relationships, specie flows, and monetary changes within and among these various areas in the Mediterranean basin especially.

The introductory chapter provides an overview of these developments, over these many centuries, in the particular context of Ottoman monetary and more general economic policies; the second chapter analyses the relationships among commercial, financial and specie flows; the changing supplies of gold, silver, and copper; and the organization and operation of the mints in the earlier centuries. Chapter 3 focuses on the book’s central theme: the role of late-medieval coinage debasements as essentially a fiscal policy (though analyzed as well in the context of their possible relationship to periodic bullion scarcities, and other possible motives for debasement); and it is worth noting that medieval Ottoman debasements were far more modest than those in most of medieval western Europe (excepting England). Chapter 4 explores the development of the Ottoman imperial monetary system, based on a common gold coinage, one conveniently modeled on the Venetian ducat or zecchino (with 3.56 g fine gold), or rather on the Mamluk gold ashafri first minted, on this basis, in 1425 (the model for the Ottoman sultani, minted from 1447-8); but, from the sixteenth century, the silver coinages largely retained their regional identities (i.e., beyond the original Ottoman silver ak?e). Even in the medieval world, however, there was more to money than just coinage; and Chapter 5 thus discusses the important roles of credit and related financial institutions. Chapter 6 provides a much more detailed analysis of monetary changes in the various imperial regions: the Balkans; Egypt; the “shahi” zone of eastern Anatolia, Iraq, and lands bordering Iran; Crimea (a dependency); and North Africa (the Maghrib, Tunis, Algeria, Tripoli). Chapter 7, on the early modern Price Revolution, provides an even-more globally integrated view, emphasizing not just changes in monetary stocks but more especially in monetary flows (and in the context of the “monetary approach to the balance of payments”). This chapter is of particular interest in utilizing the author’s own extensive and invaluable research on Ottoman prices, allowing him to critique and modify, though substantially support, the earlier and renowned work of O. L. Barkan, segregating the impact of debasements from the other monetary forces examined.

The following Chapters 8 (ominously called “Debasement and Disintegration”), 9 (“In the Absence of Domestic Currency”), 10 (“The New Kurus”), and 11 (“Linkages with the Periphery”) examine the following developments from the late sixteenth to early twentieth centuries: a greatly increased fiscal reliance, aggravated by declining mining outputs, on truly drastic debasements (from 1586), which reduced the silver ak?e to a virtually unusable small coin and forced much of the populace to rely instead on imported European coins; a return (from the later seventeenth century) to purely copper coins (first issued in the fifteenth century); the eighteenth-century attempt to establish, on a more centralized minting basis, a new and much heavier silver currency (the kurus), aided by a revival in Ottoman and indeed European silver mining, accompanied by a revival in gold minting as well; and the establishment of stronger, more stable monetary links with the outlying provinces. Before a brief conclusion, the final two chapters, 11 (“The Great Debasement”) and 12 (“From Bimetallism to the ‘Limping Gold Standard'”), establish that the later eighteenth-century attempts to eschew debasements and rely instead on European borrowing could not continue,; and thus, from 1808-34 the worst debasement in Ottoman history ensued (forcing down the exchange rate on the British pound from 8 to 104 kuruses by 1839) — a most remarkable experience. Nevertheless from 1839-44, the Turkish government successfully achieved its goals of monetary reform, finally abandoning coinage debasements, introducing a limited circulation of non-convertible paper currency, marketing long term “bonds” (or annuities?), and, from 1881, adopting a “limping” gold standard, and modern (French-dominated) commercial banking institutions. The book ends, of course, as did the Empire, with World War I.

The heart of the book lies in the truly superb economic analyses of coinage debasements and their consequences — perhaps the best that I have read. While I fully endorse Pamuk’s thesis that the primary objective of aggressive debasements was purely fiscal, in increasing seigniorage revenues (and perhaps in reducing the real burden of debt repayments), debasements could also be defensive reactions to neighboring mint policies. Thus a comparison of Ottoman debasements with those of the Habsburg Empire and Safavid Persia (Iran) — with whom the Ottomans were so frequently at war — might have provided a better perspective, if such evidence were available. My only other minor criticism about this theme concerns the attempt to distinguish among the causes of the Ottoman Price Revolution: i.e., between the effects of debasement and those of other monetary forces, by providing both nominal and silver-gram prices. While useful, it unwisely and unrealistically suggests — without these added caveats — that debasement produces an exactly proportional inflation; or implicitly that a debasement (1) produces an inversely proportional expansion in the coined money supply (if based on the formula: [1/(1-x)] – 1, in which “x” represents the percentage reduction of fine silver or gold in the monetary unit of account); and that (2) such a monetary expansion would lead to an exactly proportional rise in the price level — implying acceptance of a very crude version of the Quantity Theory. Elsewhere, of course, the author very properly establishes that the extent of inflation depends as well upon changes in monetary flows and real output changes in the economy: i.e., upon the variables V (=1/k) and y, in MV = Py; or, better, in M = kPy. Clearly, however, different degrees of coinage debasements do help explain differences in price levels among regions and countries in early-modern Europe; and yet the most remarkable feature of Graph A-1 (p. 236) is how much the Istanbul price level, from 1450 to 1900, resembles the patterns of the Phelps-Brown Hopkins index for southern England! My other minor quarrel is Pamuk’s almost complete neglect of the Central European silver mining boom, from the 1460s to 1530s (expanding Europe’s silver supply about five-fold), whose causes and consequences would have put in much better perspective his discussions of the mid-fifteenth century “bullion famine” and the monetary origins of the sixteenth-century Price Revolution. And for the latter, at least in a pan-European perspective, more attention should have been given to the sixteenth-century financial revolution in negotiable credit instruments. But Pamuk is in good company, since most economic historians continue to neglect these important monetary phenomena. Finally, these criticisms do concern only minor defects. In sum: this book is a splendid, monumentally important achievement, warmly and strongly recommended to all European economic historians.

(Pamuk is Professor of Economics and Economic History at Bogazici University, Istanbul, Turkey. He is also the author of The Ottoman Empire and European Capitalism, 1820-1913 (1987).)

John Munro is Professor of Economics at the University of Toronto; and is currently the medieval area editor of the forthcoming Oxford Encyclopedia of Economic History (Joel Mokyr, general editor). He is the author of, inter alia, Bullion Flows and Monetary Policies in England and the Low Countries, 1350-1500 (Aldershot, 1992); and “Wage Stickiness, Monetary Changes, and Real Incomes in Late-Medieval England and the Low Countries, 1300-1500: Did Money Matter?” Research in Economic History, 21 (2002), 185-297.