A History of Wealth and Poverty: Why a Few Nations are Rich and Many Poor, by John P. Powelson.

Appendixes for Chapter 19

Appendix 19.1: References to Concentration of Power in the Middle East

  1. "The Byzantine state regulated the economy in a way that Diocletian would have envied; this aspect of the law remained in full force and seems in fact to have become more rigorous. The prefect kept lists of members of the guilds and supervised the admission of new ones." [471]
  2. "Justinian, authoritarian by character and convinced of his mission to recreate the Christian Roman Empire . . ." [472]
  3. "For Justinian the wealth of his subordinates and the splendour of their way of life merely increased their dependence upon him. So long as his power remained undisputed, a nod could divest them of their palaces, their lands, their private armies and their throngs of servitors and dispatch them in chains to a wretched exile in some dismal corner of his empire." [473]
  4. "[T]he self-governing rights of the Byzantine village [about the seventh century] were of a very limited nature, for nothing took place in a Byzantine village without government supervision and even the most trivial matters of daily life were controlled by the government officials." [474]
  5. "Byzantium had no interest in a free commerce which flowed into and out of its empire from neighboring regions or in a powerful merchant class. . . . Nor was it willing to allow its large or small landowners to become so involved in the world of trade and finance that they ignored what it felt were their primary functions; namely, to serve as soldiers, sailors, or diplomats at the disposal of the empire." [475]
  6. [In contrast with Europe] "the eastern [Byzantine] idea [was] that a ruler was not the first among equals, but sovereign and even divine." [476]
  7. "Government in Muslim society . . . was never, or almost never, anything other than superimposed; never, or almost never, the emanation or expression of that society." [477]
  8. "Machiavelli cited the Ottoman empire as the prime example of a government 'by a prince and his servants,' in modern terms a bureaucratic empire, as opposed to a government 'by a prince and his barons,' a feudal state exemplified by the France of his day." [478]
  9. "The thought of extreme centralization of the administration seems to have been intoxicating [in the Ottoman empire, at the end of the nineteenth century]." [479]
  10. "Osmanli (pertaining to the House of Osman, Ottoman) or askeri (military) . . . served the sultan, from whom their power derived, and only secondarily served his subjects. . . . [W]hile in other societies wealth or status might become the basis for claims to political power, the kind of patrimonial domination seen in the Ottoman Empire made any such claims practically impossible." [480]
  11. "The powers of the sultan were immense [at the turn of the nineteenth century]; the governance of the empire was largely dependent on his personal discretion. And yet his powers were far from being without limit. Some of the restrictions were of a practical kind, related to factors such as the capabilities of the administrative and military apparatus. . . . Other limits were ones of principle, derived from the conception of the society as the fulfillment of a divinely appointed and thus invariable plan, and the consequent necessity of the sultan to maintain the legitimacy of his rule through performance of religiously valued functions." [481]
  12. In Iraq in the nineteenth century, the Turks "saw that in the alienation of lands to the tribes and particularly to tribal sheiks, the government would forfeit a weapon which if retained would still be of great value for the control of the tribes and their chiefs. Hence in subsequent years they lost no opportunity to exploit the principle of state landownership." [482]
  13. In an example of command development, Richmond cites the manner in which Ibrahim Pasha of Egypt in the 1830s broke the power of nomad tribes in order to extend agriculture in Syria. Ibrahim personally led army troops "on one occasion into battle against an army of locusts." [483]
  14. The mid-nineteenth century was a period "of extreme political imbalance [in the Ottoman Empire] — of practically unfettered dominance by the civil-bureaucrat politicians." [484]
  15. "One of the results of the reign of Riza shah [in Iran] and his policy of centralization was for the countryside to be invaded by a horde of government officials. At best they live on the country and at worst they look upon office as an opportunity to grow wealthy. . . . Moreover, the tendency to extortion is one of the factors, though perhaps not the most important one, making for absenteeism. Tradition demands that hospitality should be offered to all comers on as lavish a scale as possible: anything else would not be consistent with the dignity and status of the landowner. Consequently many feel that the only way of avoiding such impositions is to remain away." [485]
  16. "The king ran [Kuwait] in the old-fashioned tribal way, with a benevolent paternalism. . . . Members of the Sabah family, like other royal families in the Gulf region, fill many of the major posts in the Government, the army, the police and in the private sector." [486]
  17. "To a large extent, the material progress in the kingdom [Saudi Arabia] . . . has been forced by the Government, to which petroleum revenues flow. . . . Government policies . . . have spawned hundreds of new companies in the past five years. . . . The two huge new industrial cities — Jubail on the east coast and Yanabu on the west coast — are Government initiatives. Government has also been the impetus behind the eightfold rise in the kingdom's electrical generating capacity in the last five years, as well as the tripling in the number of roads. . . . The result has been an explosion in the number of private factories. . . . The Government is creating new private companies through divesting itself of large chunks of its interest in public projects. . . . The Government is also trying to create a work ethic." [487] NOTE: Although Saudi Arabia is largely a "private" economy, this economy was created and is overseen by a benevolent government. The status is reminiscent of medieval city-states in Europe. But the Europeans had to overcome these institutions before proceeding on a power-diffusion path.
  18. "Real power [in Syria] lies with an inner circle consisting of [President] Assad, his brother Rifaat, the commander of his Special Forces, and the heads of the political and military intelligence. All are Alawites. . . . The most serious danger to the Assad regime has come from the Moslem Brotherhood . . . [whose] tracts reveal three basic grievances — lack of political freedom, government intrusion into economic areas traditionally dominated by Sunnis, and the influence of "atheist" Alawites at Sunni expense." [488]
  19. "[In Iran] Ayatollah Khomeini never disguised his intention to establish a regime based on clerical supremacy and Islamic law. . . . The human rights record has been abysmal. As many as 10,000 men and women have passed before the firing squads. The prisons remain full. Islamic dress and codes of moral behavior are imposed by force. The obsession with ideological conformity has left little room for dissent. One by one, the opposition parties have been eliminated." [489]
  20. "Iraq is virtually a sealed society [in the 1990s], secured by an organized party structure, an interlocking system of police, internal security and neighborhood organizations unrivaled in the Middle East."
  21. "Every Iraqi military unit, every bazaar, every office, every factory, is infiltrated by members of the ruling Baath party or its supporters. At Baghdad University, . . . it is not permitted to talk politics in a history class. . . . The classroom does not belong to [the professor]." [490]

Appendix 19.2: Historical References to State Control over Guilds and Corporations in the Middle East

  1. Under the Emperor Justinian (r.527-65) guilds — one for every trade — reported to the city prefect. Guild price controls were superficially similar to those found later in Europe and Japan. But "established in the first place perhaps for the protection of the producers, these had over the centuries been adapted by the state to the protection of the consumers and through them the security of the government." [491]
  2. In the seventh century, guild rules in Constantinople rested "on the assumption that the prosperity of the capital depended upon wise and careful state intervention. The state intended to regulate the guilds down to the smallest detail. 'Any spinner [of silk] . . . showing himself to be gossiping, a boaster, troublesome, or noisy, shall be expelled from the corporation with blows and insults, to prevent his selling the silk.' . . . No ruler in the West had a city the size of Constantinople, a ready bureaucracy, or a level of economic activity comparable to the east, so the system of state-supervised artisan and professional associations survived, with some fundamental changes, only in the east." [492]
  3. "Byzantium grouped its merchants and artisan classes into guilds . . . under strict government control. This included an extensive system of price fixing, especially as regards foodstuffs necessary to provision the capital." [493]
  4. "In Islamic cities no true merchant guilds seem to have appeared by the tenth century. . . . [There was] a tendency for governmental authorities to group merchants and workers alike under heads or leaders who could be held responsible for their activities." [494]
  5. "[S]ervile elitism [in the Ottoman Empire] . . . meant that the ruling class was in principle deprived of corporate autonomy, and thus was in a position radically different from that of the estates or privileged corporate bodies of medieval or early modern Europe." [495]
  6. The Ottomans [of the eighteenth century] opposed the development of autonomous organizations intermediary between the individual and the state. In this they resembled other Middle Eastern states and found support in the Islamic religious-legal tradition. Where the emergence of such bodies could not be prevented, the state attempted to dominate them and use them to maintain or extend its own power. [496]
  7. In the Ottoman Empire in the fifteenth century, the state used guilds as conduits for "collecting taxes, controlling prices, policing the market place, outfitting and supplying the army, and eventually limiting the number of shops in a given craft through a kind of licensing system." [497]
  8. In the Ottoman Empire in the nineteenth century: "[S]tate dominance over the differentiation and validation of distinctions of social status, and so to the restriction of possibilities of the emergence of classes, estates, or even smaller types of corporate organizations independent of government control." [498]
  9. In the nineteenth century in Iran, town elites and guild elders jointly possessed many of the powers held by the state in the Byzantine and Ottoman Empires. "The structure of the craft guilds shows profound inequality in the property rights enjoyed by their members." Town elders intervened in many guild functions; for example they "saw to it that the master craftsmen gave proper instruction to the apprentices" and took an active role in selecting masters. In "order to limit competition, each master worked and sold his goods in a strictly defined place." [499]


Copyright © 1994 by the University of Michigan. First published in the USA by the University of Michigan Press, 1994.

Published on the World Wide Web by The Quaker Economist with permission from the University of Michigan Press, 2005.

Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License.