Constructing Change: A Political Economy of Housing and Electricity Provision in Turkey

293 Pages·2021·20.44 MB·English

by  Ezgi B. Unsal

Constructing Change
Studies in Critical Social Sciences
Series Editor
David Fasenfest
(Wayne State University)
volume 188
New Scholarship in
Political Economy
Series Editors
David Fasenfest
(Wayne State University)
Alfredo Saad- Filho
(King’s College London)
Editorial Board
Kevin B. Anderson (University of California, Santa Barbara)
Tom Brass (formerly of sps, University of Cambridge)
Raju Das (York University)
Ben Fine ((emeritus) soas University of London)
Jayati Ghosh (Jawaharlal Nehru University)
Elizabeth Hill (University of Sydney)
Dan Krier (Iowa State University)
Lauren Langman (Loyola University Chicago)
Valentine Moghadam (Northeastern University)
David N. Smith (University of Kansas)
Susanne Soederberg (Queen’s University)
Aylin Topal (Middle East Technical University)
Fiona Tregenna (University of Johannesburg)
Matt Vidal (Loughborough University London)
Michelle Williams (University of the Witwatersrand)
volume 6
The titles published in this series are listed at brill.com/ nspe
Constructing Change
A Political Economy of Housing and
Electricity Provision in Turkey
By
Ezgi B. Unsal
LEIDEN | BOSTON
Cover illustration: Courtesy of David Fasenfest, 2021.
Library of Congress Cataloging-in-Publication Data
Names: Unsal, Ezgi B., author.
Title: Constructing change : a political economy of housing and
electricity provision in Turkey / by Ezgi B. Unsal.
Description: Leiden ; Boston : Brill, 2021. | Series: Studies in critical
social sciences, 2666-2205 ; vol.6 | Includes bibliographical references
and index.
Identifiers: LCCN 2021011866 (print) | LCCN 2021011867 (ebook) |
ISBN 9789004462052 (hardback) | ISBN 9789004462113 (ebook)
Subjects: LCSH: Housing–Turkey. | Electric power transmission–Government
policy–Turkey. | Turkey–Social policy–21st century. | Turkey–Economic
policy–21st century.
Classification: LCC HD7358.25.A3 U67 2021 (print) | LCC HD7358.25.A3 (ebook) |
DDC 333.33809561–dc23
LC record available at https://lccn.loc.gov/2021011866
LC ebook record available at https://lccn.loc.gov/2021011867
Typeface for the Latin, Greek, and Cyrillic scripts: “Brill”. See and download: brill.com/b rill- typeface.
issn 2666-2 205
isbn 978-9 0-0 4-4 6205-2 (hardback)
isbn 978-9 0-0 4-4 6211-3 (e- book)
Copyright 2021 by Koninklijke Brill nv, Leiden, The Netherlands.
Koninklijke Brill nv incorporates the imprints Brill, Brill Nijhoff, Brill Hotei, Brill Sense, Brill Schöningh,
Brill Fink, Brill mentis, Vandenhoeck & Ruprecht, Böhlau Verlag and V&R Unipress.
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This book is printed on acid- free paper and produced in a sustainable manner.
Contents
Preface ix
Acknowledgements xii
List of Figures and Tables xiv
1 What Is This Book About? General Introduction and Methodology 1
1 Objectives and Contribution 1
2 Methodology and the Structure of Analysis 13
2.1 Systematic Dialectics and Hegelian Heritage 16
2.2 Marx’s Materialism and the Incorporation of Empirical
Material into Theory 17
2.3 Essence and the Process of Change 20
2.4 Levels of Abstraction: Tendencies and Countertendencies 23
2.5 The Value of Labour Power 29
2.6 The Systems of Provision (sop) Approach to Social
Reproduction 33
3 Conclusion 37
2 A Literature Survey on Financialisation 39
1 Introduction 39
2 Financialisation as an Object of Study: The Rise of Finance and Its
Impacts on the Economy 41
2.1 Cambridge Theories of Distribution 42
2.2 How Do the Cambridge Theories of Distribution Relate to
Financialisation? 45
2.3 Empirical Analyses on Firm- level: Decreasing Real Investment,
Slowing Down of Accumulation 48
2.4 Empirical Analysis on Aggregate Level: The Impacts of
Worsening Income Distribution, Determination of Different
Accumulation Regimes 50
2.5 Emphasis upon Increasing Levels of Debt and
Securitisation 53
2.6 Asset Price Inflation Approach and ‘Forced’ Indebtedness 55
2.7 Conclusion 57
3 Financialisation as a Reference Point for Periodisation 58
3.1 Annales School and Recurrent Financialisation 60
3.2 Financialisation as Coupon Pool: Social Accountancy and
Cultural Economy Approach 60
vi Contents
3.3 Finance- led Accumulation Regime as an Alternative to Fordist
Regime: French Regulation School 63
3.4 Varieties of Capitalism (VoC) Approach 66
3.5 Tri- partite Class Regime and the Crisis of Neoliberalism:
Duménil and Lévy 68
3.6 Financial Expropriation Approach: Lapavitsas and Dos
Santos 70
3.7 The Increasing Presence of Interest- bearing Capital 71
4 Conclusion 76
3 Financialisation in Developing and Emerging Economies 78
1 Introduction 78
2 Historical Development of Financialisation in Developing
Countries 81
2.1 Reserve Accumulation Strategy and the Narrowing Down of the
Policy Scope 86
2.2 Crowding- out of Investment and Changes in Firm and
Institutional Behaviour 91
3 Conclusion 93
4 The Political Economy of Turkey since 1980
Towards Differentiated Global Integration 95
1 Introduction 95
2 1980s and 1990s: Capital Account Liberalisation, Export Boom and
Public Indebtedness 100
3 Political Economy of Transition: The Differentiated Impacts of the
2001 Crisis 104
4 After 2001: Restructuring of the Banking Sector 110
5 After 2001: Household Indebtedness 120
6 After 2001: Capital Restructuring? 125
7 Conclusion 131
5 The Political Economy of Electricity Provision in Turkey 134
1 Introduction 134
2 Privatisation of Electricity Provision: Rhetoric and Experiences
around the World 138
2.1 Scholarship on Privatisation of Electricity Provision: How and
What to Regulate? 143
3 Energy Sector Outlook in Turkey 146
4 Historical Background and Institutional Framework for Electricity
Provision in Turkey 149
Contents vii
4.1 Privatisation Process i: Policy Design and Price Regulation 152
4.2 Privatisation Process ii: Addressing Losses and Theft and Other
Problems in Implementation 160
5 The Case of Hydroelectric Power Plants (hepp s) in Turkey: How They
Are Built and Financed 166
5.1 Ilisu Dam: A hepp Project 172
5.2 Coruh Development Plan 173
6 What Role to the Finance? 176
6.1 Firm Financing: An Investigation of Corporate Balance Sheets in
the Electricity Industry 180
7 Conclusion 188
6 The Political Economy of Housing Provision in Turkey 191
1 Introduction 191
2 Production Matters in a Comparative Context: Housing Provision in
Britain 195
3 Production upon Landed Property: Marx’s Agricultural Rent
Theory 200
3.1 Rent in Urban Settings 205
4 The Dynamics of Housing Production in Turkey: A Construction
Boom Facilitated through State Institutions 210
4.1 A History of Housing Provision in Turkey within the Context of
Urbanisation 214
4.2 The Rise of a State Institution in the Transition towards
Market- based Provision: toki (Housing Development
Administration) 218
5 An Empirical Investigation of the Construction Sector Firms’
Financial Statements 225
6 The Dynamics of Housing Consumption in Turkey 232
6.1 Housing Consumption: Who Consumes How Much? 237
7 Conclusion 239
7 Conclusion 244
1 Introduction 244
2 Main Findings and Contribution 244
3 Further Issues and Concluding Remarks 251
Bibliography 255
Index 276

Preface
This book provides a political economy of electricity and housing provision
in Turkey. While doing so, it also sheds light on the evolution of the Turkish
economy from the early 1980s to its current state.
It is argued that the world economy has been financialising rapidly since
the 1980s. Although there is not a single definition of financialisation upon
which everyone agrees, it can be broadly and loosely defined as the increasing
dominance of financial motives, activities, actors and interests over the real
economy with possible destabilising repercussions, as one of the defining fea-
tures of the contemporary world economy. This book argues that although the
Turkish economy was also characterised by the undeniable increase in the vol-
ume and importance of financial transactions across different sectors which
increased macroeconomic volatility, it also experienced significant increase in
its productive capacities. The electricity and housing industries are chosen to
show how that strategy played out in reality.
The financialisation literature has given specific importance to the growth
of the real estate markets as one of the telling signs of increasing speculative
activities across the economies. This book reveals the contribution of the
growth of the construction sector to unproductive accumulation through real
estate speculation in Turkey, however extremely limited, given the size and
depth of the financial markets in the country. However, by explaining how the
state- ownership in the land market could facilitate a housing supply boom,
the book discusses that the upward pressure on asset prices due to increas-
ing demand was not immediately disruptive for the Turkish housing market.
On the aggregate level, it is argued that the growth of the housing industry
contributes to unproductive accumulation due to the industry’s structural ina-
bility to move towards high productivity given its cyclical, short- term nature
and labour-i ntensive production techniques theoretically. In Turkey, on the
other hand, the firms operating within the housing industry had strong inter-
linkages with the energy sector, as most of them had investments in the elec-
tricity generation segment with a long- term, capital- intensive character, which
contributed to the stability of the housing market and the economy. By empha-
sising the importance of these contextual elements, the book explores how
the outcomes of financial expansion in Turkey especially since the early 2000s
have been considerably different than the outcomes in developed economies,
which inform the majority of discussions on financialisation often around its
destabilising impacts on production, growth and distribution.
x Preface
However, it is undeniable that the financial expansion process revealed
some similar underlying tendencies across the board, such as the commod-
ification of social provision. In order to focus on such common tendencies
instead of diverse outcomes, the book shifts its focus away from the contra-
dictory macroeconomic trends, towards investigating the increasing scope
and depth of the commodity relations across the economy. Once the focus is
placed on the changing nature of commodity relations themselves instead of
their impacts on the aggregate economy, the significance of the energy and
construction sectors for the Turkish economy is also more clearly understood.
These sectors are crucial for the Turkish economy not only because their
share in the aggregate economy is growing, but also because their products
reproduce the workforce as they are indispensable for the survival of the soci-
ety. In that sense, the empirical investigation of these sectors does not only
reveal how the financial expansion process simultaneously leads to increased
production and systemic volatility, but also how the changing organisational
relations within them determine the way in which the workforce is reproduced.
In the case of Turkey, such reproduction increasingly depends on the market,
which is accepted as a common feature of financialisation across the board.
The book has two distinct but inter-r elated purposes. The primary, and the
more obvious, purpose is to provide a nuanced narrative of the evolution of
the contemporary Turkish economy in light of the housing and electricity
industries since the 1980s, without portraying it either as a success story in
its own right or a doomed economy without any hope for redemption. The
second, overarching purpose is to show how two seemingly opposite trends
of increasing productive capacities and financialisation can coexist alongside
one another, by telling the narrative of the Turkish economy. It is true that
many of the studies of contemporary economics do not place much value on
the contingent narrative details of real- life economic phenomenon, as long as
those details do not lead to neat cause and effect links as informed by the the-
ory. This book also suggests that a different way of theorising is possible, in
which the contextual details are not the noise, but rather indispensable parts
of the whole. In fact, this methodological consideration is the underlying nar-
rative thread of this book, which binds its different parts together.
As the book is based on my PhD thesis completed at soas, University of
London, Economics Department in 2018, it is possible for the reader to detect
an ongoing conversation with the scholars and practitioners within the eco-
nomics profession. In that sense, the book aims at reaching out to readers
who are interested in the evolution of the contemporary Turkish economy
and also those who are interested in the discussion and application of differ-
ent methodologies within economics. As economics has established itself as