A Rip in the Sea - Bülent Eczacıbaşı

Conversation with
ALİ ÇARKOĞLU and IŞIK ÖZEL

ALİ ÇARKOĞLU

With a BA and an MA in Economics from Boğaziçi University, a further MA in Economics from Rutgers University, and a PhD in International Relations from Koç University’s College of Administrative Studies and Economics, Ali Çarkoğlu taught at Boğaziçi University (1994-2002) and Sabancı University (2002-2010). During the 2008-2009 academic year, he conducted research at the Netherlands Institute for Advanced Study in the Humanities and Social Sciences. His research focuses on behavioral political science and seeks answers to a variety of questions regarding voting behavior, public choice, and party politics. His field studies on university student choices, religiosity, the relationship between political Islam and political behavior, charity in Muslim societies, corruption, the informal economy, views on EU membership and voting behavior were supported by research grants from the Turkish Science and Technology Research Council (TÜBİTAK), the United States Institute of Peace, the Ford Foundation, the Nuffield Foundation, the Open Society Institute, and Boğaziçi, Sabancı, Işık and Koç Universities. He has served on the editorial board of Turkish Studies since its founding and was research director at the Turkish Economic and Social Studies Foundation (TESEV) between 2000 and 2001. His publications have appeared in edited volumes and journals such as the European Journal of Political Research, Electoral Studies, Middle Eastern Studies, and Political Studies. Çarkoğlu has also co-authored two titles with Ersin Kalaycıoğlu: Turkish Democracy Today: Elections, Protest and Stability in an Islamic Society (2007) and The Rising Tide of Conservatism in Turkey (2009).
IŞIK ÖZEL

With a BA in Economics from the Middle East Technical University, an MA in Economic History from Boğaziçi University, and a PhD in Political Science from the University of Washington, Işık Özel currently teaches at the Carlos III University of Madrid, where she is a member of the Juan March Institute. She previously taught at Sabancı University (2007-2017) and held a postdoctoral fellowship at the Barcelona Institute of International Studies (IBEI). She worked as a visiting professor and research fellow at several institutions, including the Hertie School of Governance (Berlin), Instituto de Empresa (Madrid), Colegio de Mexico, and the Freie Universität Berlin. Broadly situated in comparative political economy, Özel’s research interests include the politics and consequences of institutional change in middle-income countries, particularly focusing on social policy, education, regulation, and governance. Her work has appeared in international journals such as Socio-Economic Review; The Review of International Political Economy; the Journal of European Public Policy, Regulation & Governance; and Democratization among others. She is the author of State-Business Alliances and Economic Development, Turkey, Mexico and North Africa (2014) as well as numerous articles and book chapters.

BÜLENT ECZACIBAŞI

I’d like to start with society’s view of businesspeople, because this is an area where we’ve faced contradictions throughout our careers and still do today. There are inconsistencies in the public’s perception and expectations of businesspeople. On the one hand, we’re assumed to have the means and authority to do many things. At least, that’s how it seems to us. Is there any justification for this? I suspect there might be. Because big companies grew even bigger and then merged to create gigantic new organizations. They command huge resources, networks that cover the world, and enormous financial means. Since the collapse of the Soviet Union, the private sector is largely accepted as the driving force of the economy. However disaffected we might be with the current situation, there doesn’t appear to be a viable alternative. All these factors have increased society’s expectations of us; we’re constantly confronted with indications of this. On the other hand, there’s a different view: Businesspeople only care about their own profits and their own interests, and they don’t do anything else. How does this perception affect society’s expectations of us? For instance, we’re often asked why we don’t enter politics; I face that question time and again. But why should we? We’re in a completely different field. Yet, it shows there’s an expectation, as in: “You’ve achieved so much, you know how to make money; so you must know how to run the country, too.” Does that feeling or belief really exist? What do you think about these contradictions?

IŞIK ÖZEL

Society’s view of the business world is very confused and inconsistent, in my view. On the one hand, there’s the business world that it admires, approves and expect much of. On the other, in sharp contrast, is a business world that exploits the less powerful, whether it be individuals, the public at large, or smaller companies.

I attribute much of this perception of big business to a style of political rhetoric since the 1960s, perhaps especially to Necmettin Erbakan, in which beleaguered politicians try to deflect criticism by accusing the business world instead. Erbakan, for instance, said, “Istanbul’s bourgeoisie is the Duchy of Istanbul.” Turgut Özal adopted the same approach in the late 1980s. They alleged that the business world, at least big capital in Istanbul, had no interest in the public good. I think it’s not easy to overcome this confused perception.

What can the business world do about this? I believe that the business world can and must do much more than carry out social responsibility projects.

ALİ ÇARKOĞLU

I agree that there’s confusion, but maybe it’s natural. Consider this: Unlike Britain, the USA or Germany, the business world is new in Turkey. It’s not a segment of society that’s existed for ten or so generations, where families have a long and established record in big business. Where they’ve even formed coalitions with each other. For Turkey, this is still –

IÖ

Out of the question.

AÇ

There were powerful families like this prior to the founding of the Republic of Turkey. There were many in Izmir, for example, and it all came to an end after the great fire of 1922. They were non-Muslim families. Business was regarded as something that Muslims didn’t engage in. In my view, the confusion we’re discussing emerged during the Özal era of the 1980s. Until then, through the end of the 1970s, no one would admit wanting to become a businessman. Recruitment was an issue; the business world had a tough time convincing people to work for them rather than enter academia or the public sector. It was only in the 1980s, after Özal introduced Turkey to his elite team of technocrats, his “princes,” that going into business was more widely accepted and became the thing to do. In the 1970s, a career in civil service was regarded as better and much more secure than the risky business world. So that particular transformation is quite new. People want to join this social class that has “struck it rich,” in a manner of speaking, and yet they also view it as being distant from them.

In the meantime, alternatives to the Turkish Industry and Business Association (TÜSİAD) have begun to emerge, like MÜSİAD, the Independent Industrialists’ and Businessmen’s Association. There are other new business associations as well, which suggests that there are many business groups in Anatolia with diverse approaches to business. There’s also a segment of the business world with a culture that’s basically identical to that of the general public. It all depends on the market you’re in and the sophistication of your operation. But what’s standard in Turkey is the idea that business is a family affair; there’s no place for professional management or related management approaches. Which means the business world is composed of ordinary people and embraces the values of the public. We also need to admit that leftist thought has never really been accepted by the working class. The Marxist arguments about being a laborer and selling your labor-power, and someone buying it and exploiting you, have mostly fallen on deaf ears in Turkey. But this might also have something to do with your degree of disconnect. Imagine you’re a female worker in a textile workshop with no social security at all. You arrive in the morning, and they say, “No work today, come back five days later,” or, “Work for 45 lira, not 50.” If you belong to this group of workers, then your view of the business world will be shaped by value judgments that derive from this disconnect. But I don’t think it has spread to other groups.

IÖ

I think right-wing populism has been a truly serious phenomenon in Turkey, especially since the 1960s, and that it takes a stand against business the moment that populist interests face any criticism at all or seek to sway the electorate. Essentially, it’s the politicians who created this rhetoric and strategically twisted it to reach their own ends. There aren’t many examples in the world of the political right taking such an adversarial position against business. Yet, it has almost always been the case in Turkey.

You could say that the 1980s was a period of support for the private sector, but it was also a time of government intervention and active participation in the market. Not only did arbitrary market intervention increase, the rhetoric also grew shriller. Consider Özal’s most popular time; even then, perhaps especially then, there was this attitude of “I’ll find others to support me against these skeptics in the business world.”

AÇ

A review of studies on social values reveals that many decisions were accepted with no public debate, such as privatization. In Turkey, the public never supported privatization.

So, now there’s quite a strange structure in Turkey. The free market economy was legislated, but the public never embraced it. And we didn’t really notice this situation until the 2001 crisis. New reforms in 2001 attempted to restrict government intervention. That was the main objective of the reforms carried out by Kemal Derviş.

Fifteen years have passed, and government intervention in the economy has changed focus but is as strong as before, I believe.

Government effectively shapes the market, and who benefits? The idea of shaping the market for public benefit lies at the heart of social democratic policies. Of course, the government is going to intervene, and it should do so for the public good. In Turkey, however, the government selects which entities will benefit. And it’s not just business groups the government is choosing; it could favor sectors, regions or groups that support the government politically. So, a completely different style of intervention in the economy has developed recently.

IÖ

I completely agree that the public never embraced these policies. Özal and his close circle embarked on these reforms with a tenuous coalition. Look at other countries: The political elite, or at least the right and center-right parties, embraced market reforms and met with students, academicians, NGOs and politicians to promote them. The government actually started implementing the reforms a decade or so later. That’s not what happened in Turkey. They were just handed down from above. One of my graduate students at Sabancı University, Yeliz Düşkün, did an excellent study of the political programs of every right-wing party from the Motherland Party (ANAP) in 1983 through to the Justice and Development Party (AK Party) in 2002, including those that didn’t get into power. None of these right-wing parties ever spoke of privatization – perhaps they didn’t dare. The True Path Party’s (DYP) criticism of privatization brought it votes after Özal. Then, when DYP came to power and wanted to privatize, it was ANAP’s turn to attack DYP. Even after privatization found wider acceptance in the 1990s, DYP’s economic program was reluctant to embrace market reform.

In other words, neither the left nor the right in Turkey fits a generally accepted description. I don’t think there has ever been a right-wing party in Turkey that wholeheartedly supported the market in terms of facilitating or setting market rules so players could operate freely. And the left as we know it isn’t “left,” or perhaps it’s only now trying to become that. My observation is that these two camps have become more entrenched through their responses to each other.

You mentioned certain phenomena unique to Turkey in the relationship between business and the public. Do you think that we have particular social traits that affect these relationships? The lack of mutual trust in our society, for instance, appears in a number of studies. How much does it matter to business? In my view, it’s a genuine problem. Lack of trust creates problems in internal business operations, in the transition from family companies to professional management, and in establishing partnerships. Academic research shows this lack of trust is a reality, and I strongly suspect it leads to the kinds of problems I just mentioned. Similarly, advances in civil society must also have an effect on relations between the business world and the public. Do you believe this is true, and if so, how does that manifest?

AÇ

My view on trust is as follows: People have to be able to trust one another on basic matters for the business world to operate. But it’s not going to happen by itself.

We say that there’s no trust in Turkey. True, the level of trust is very low, but there are institutional reasons why that’s the case. It’s much easier to have trust under a legal system where you can demand justice, but since this system doesn’t exist in Turkey, no one trusts anyone else. Why is that? Because there’s no structure capable of solving problems that emerge. That’s why it’s become so important to avoid problems in the first place. For example, you can’t sign a rental contract on the basis of trust alone, but in Turkey that contract might mean nothing anyway. It’s very hard for a landlord to seek justice in the courts if the tenant isn’t paying. So, we need to be mindful of the relationship between trust and the smooth functioning of institutions.