The economic history of the Ottoman Empire covers the period 1299–1923. Trade, agriculture, transportation, and religion made up the Ottoman Empire's economy.
The Ottomans saw military expansion of currency, more emphasis on manufacturing and industry in the wealth-power-wealth equation, and moving towards capitalist economics comprising expanding industries and markets. They continued along the trajectory of territorial expansion, traditional monopolies, buildings, and agriculture.
Transportation
16th, 17th, and 18th centuries
Trade has always been an important aspect of an economy. It was no different in the 17th century. As the Ottoman Empire expanded, it started gaining control of important trade routes. The capture of Constantinople (1453) to the Ottoman Turks was a key event. Along with their victory, they now had significant control of the Silk Road, which European countries used to trade with Asia. While many sources state that the Ottoman Empire “blocked” the Silk Road by increasing taxes, this is not supported by any larger body of historical research. In fact, there was no general decline in spice imports to Europe after 1453 because Constantinople was not a major trade route in the spice trade, and most trade instead came from Alexandria or Beirut. The only large change in the price of spice occurred much later in 1499 with the start of the Second Ottoman–Venetian War. Due to this lack of change, it is likely that there was no discernible blocking of the spice trade by the Ottoman Empire during this period. Instead, European explorers simply searched for alternate trade routes to supplement their existing trade and make it more profitable. +Ottoman tariff ratesMehmed IIBeyazid IISelim IReligionTariff rateMuslim4%Non-Muslim4%Foreigners5%ReligionTariff rateMuslim1% or 2%Non-Muslim2% or 4%Foreigners4% or 5%ReligionTariff rateMuslim2%Non-Muslim4%Foreigners5% The quality of both land and sea transport was driven primarily by the efforts of the Ottoman administration over this time. As a result, the quality of transport infrastructure varied significantly over time depending on the current administration's efficacy. The story of transport in the empire should not be seen as one of continual improvement. Indeed, the road infrastructure was significantly better in the 16th century than it was in the 18th century.
Land The Ottomans inherited a network of caravanserai from the Selçuk Turks who preceded them. The administration and tax-gathering of the empire mandated an interest in ensuring the safety of couriers and convoys and (by extension) of merchant caravans. The caravanserai network extended into the Balkans and provided safe lodgings for merchants and their animals.
The Jelali revolts of the 16th and 17th centuries did much to disrupt the land-transport network in Anatolia. The empire could no longer ensure the safety of merchants who then had to negotiate safe passage with the local leader of the area they were traveling through. Only in the 18th century with concerted efforts to improve the safety of the caravanserai network and the reorganization of a corps of pass-guards did land transport in Anatolia improve.
Sea The empire did not take an active interest in sea trade, preferring a free-market system from which they could draw a tax revenue. However, such laissez-faire policies were not always followed. For example, under Hadim Suleyman Pasha's tenure as Grand Vizier until 1544, the Ottoman administration was directly involved in the spice trade to increase revenue. However, such policies were often repealed by their successors.
The main areas of maritime activity were: the Aegean and Eastern Mediterranean (main trade: wheat); the Red Sea and Persian Gulf (main trade: spices); the Black Sea (main trade: wheat and lumber); and the Western Mediterranean.
In 2020, archaeologists discovered the shipwreck of a massive Ottoman merchant ship in the Mediterranean thought to have sunk in 1630 CE en route from Egypt to Constantinople. The ship was 43 meters in length and had burden of 1,000 tons, and was transporting wares including Ming-dynasty Chinese porcelain, painted ceramics from Italy, Indian peppercorns, coffee pots, clay tobacco pipes and Arabian incense. The nature of this cargo and the vast size of the vessel are indicative of the activity of Red Sea-Indian Ocean-Mediterranean trade routes during the Ottoman period. 19th century During the 19th century, new technologies radically transformed both travel and communications. Through the invention of the steam engine in Britain, water and land transport revolutionized the conduct of trade and commerce. The steamship meant journeys became predictable, times shrank and large volumes of goods could be carried more cheaply. Quataert cites the Istanbul-Venice route, the main trade artery, taking anything from fifteen to eighty-one days by sail ship, was reduced to ten days by the steamship. Sail ships would carry 50 to 100 tonnes. In contrast, steamships could now carry 1,000 tonnes.
With the advent of the steamship formerly untraversable routes opened up. Rivers that carried cargoes only in one direction could now be traversed both ways bringing innumerable benefits to certain regions. New routes like the Suez Canal were created, prompted by steamships, changing trade demographics across the Near East as trade was rerouted. Quataert's research shows that the volume of trade began to rise over the 19th century. By 1900 sailboats accounted for just 5 percent of ships visiting Istanbul. However, this 5 percent was greater in number than any year of the 19th century. In 1873 Istanbul handled 4.5 million tons of shipping, growing to 10 million tons by 1900. The development of larger ships accelerated the growth of port cities with deep harbors to accommodate them. Europeans however owned 0 percent of commercial shipping operating in Ottoman waters. Not all regions benefited from steamships as rerouting meant trade from Iran, Iraq and Arabia now did not need to go through Istanbul, Aleppo, and even Beirut, leading to losses in these territories.
In terms of transport, the Ottoman world could be split into two main regions. The European provinces connected by wheeled transport and the non-wheeled transport of Anatolia and the Arab world. Railroads revolutionized land transport profoundly, cutting journey times drastically promoting population movements and changing rural-urban relations. Railroads offered cheap and regular transport for bulk goods, allowing for the first time the potential of fertile interior regions to be exploited. When railroads were built near these regions agriculture developed rapidly with hundreds of thousands of tons of cereals being shipped in this way. Railroads had additional benefits for non-commercial passengers who began using them. 8 million passengers using the 1,054-mile Balkan lines and 7 million using the Anatolian 1,488 miles. Railroads also created a new source of employment for over 13,000 workers by 1911. With low population densities and lack of capital, the Ottomans did not develop extensive railroad or shipping industries. Most of the capital for railroads came from European financiers, which gave them considerable financial control.
Older forms of transport did not disappear with the arrival of steam. The businesses and animals used previously to transport goods between regions found new work in moving goods to and from trunk lines. The Aegean areas alone had over 10,000 camels working to supply local railroads. Ankara station had a thousand camels at a time waiting to unload goods. Furthermore, additional territories traversed by railroads encouraged development and improved agriculture. Like sailing vessels, land transport contributed to and invigorated trade and commerce across the empire.
Agriculture
The Ottoman Empire was an agrarian economy that was land rich but labor scarce and capital-poor. The majority of the population earned their living from small family holdings. This contributed to around 40 percent of taxes for the empire directly as well as indirectly through customs revenues on exports.
Economic historians have long tried to determine how agricultural productivity has varied over time and between societies. The magnitude of variations in productivity is often at the core of such important historical debates as to whether there was an agricultural revolution, when and where it happened, and how the standard of living has varied among societies. Identifying the variations in productivity is also required to be able to determine the divergence of incomes and reversals of fortune in history and to examine the effects of climate, resources, technology, and institutions on productivity.
Cultivator families drew their livelihoods from a complex set of different economic activities and not merely from growing crops. This included growing a variety of crops for their consumption as well as rearing animals for their milk and wool. Some rural families manufactured goods for sale to others, for instance, Balkan villagers traveled to Anatolia and Syria for months to sell their wool cloth. This pattern established for the 18th century had not significantly changed at the beginning of the 20th century. That is not to say that there were no changes in the agrarian sector. Nomads played an important role in the economy, providing animal products, textiles, and transportation. They were troublesome for the state and hard to control – sedentarization programs took place in the 19th century, coinciding with huge influxes of refugees. This dynamic had the effect of a decline in animal rearing by tribes and an increase in cultivation. The rising commercialization of agriculture commencing in the 18th century meant more people began to grow more. With increased urbanization, new markets created greater demand, easily met with the advent of railroads. State policy requiring a greater portion of taxes to be paid in cash influenced the increased production. Finally, increased demand for consumer goods themselves drove an increase in production to pay for the same.
Quataert argues production rose due to some factors. An increase in productivity resulted from irrigation projects, intensive agriculture and integration of modern agricultural tools increasing in use throughout the 19th century. By 1900, tens of thousands of plows, reapers and other agricultural technologies such as combines were found across the Balkan, Anatolian and Arab lands. However, most of the increases in production came from vast areas of land coming under further cultivation. Families began increasing the amount of time at work, bringing fallow land into use. Sharecropping increased utilizing land that had been for animal pasturage. Along with state policy, millions of refugees brought vast tracts of untilled land into production. The empty central Anatolian basin and steppe zone in the Syrian provinces were instances where government agencies gave out smallholdings of land to refugees. This was a recurring pattern across the empire, small landholdings the norm. Foreign holdings remained unusual despite Ottoman political weakness – probably due to strong local and notable resistance and labor shortages. Issawi et al. have argued that division of labor was not possible, is based on religious grounds. İnalcık, however, demonstrates that the division of labor was historically determined and open to change. Agricultural reform programs in the late 19th century saw the state founding agricultural schools, model farms, and education of a self-perpetuating bureaucracy of agrarian specialists focused on increasing agricultural exports. Between 1876 and 1908, the value of agricultural exports just from Anatolia rose by 45 percent whilst tithe proceeds rose by 79 percent.