Talking Turkey

Following a visit of Islamic Party Leader David Pidcock to Turkey, Ken Palmerton of the Institute of Rational Economics wrote him the following analytical letter:

Dear David,

It is quite clear from our recent discussions that you thoroughly enjoyed your latest trip to Turkey, and that the visit must be rated by any standards as a success. The English language papers that you gave to me I have now read carefully, and I think that as you suggest I must comment upon the situation as I see it. Of course the usual care must be taken with information that is received second hand as it were, but it is of great interest to compare the political and economic scene in Ankara with the problems and opportunities that we feel are possible here at home in England. Is it not amazing David how the behaviour of the press seems to be common throughout the world? I suppose it is a bit small minded of us to think that it is only our own merchants of Grubb Street in England that drag around in the gutter attempting to second guess the establishment and Government and read the minds of our politicians, then put their own, or rather their masters', spin on the news.

The best example of this from the week's news you gave me are the knots the reporters, and particularly Ilnur Cevik of the "Turkish Daily News" are getting themselves into trying to divine whether Professor Erbakan is really a "fundamentalist" or whether he is biding his time till he has the power to do what he likes. I suppose such brainless speculation helps to sell newspapers. How can you judge sincerity except by results? but this reporting hardly pushes along the debate about the future of their country. From our own experience of Refah I think we can be certain of what their intentions were and are, and the principles that they campaigned upon, and persuaded the Turkish people to vote for were quite specific, they certainly commanded our respect. It must be known, and certainly the media must know, that any political party reneging upon such clear commitments would be drummed out of office at the very next opportunity, and totally dis‑honoured.

The issue that interests me most is the report that the Professor has instructed the Treasury not to borrow by means of selling T bills. This seems to have thoroughly confused Tansu Ciller, as well it might, for as an American trained economist she must be un‑aware, or unwilling to countenance, the possibility of a sovereign state like Turkey being capable of creating its own money as an alternative or addition to the two sanctioned methods of funding available to Government, namely taxation, or borrowing. Naturally we must not attempt to guess what is in the Professor's head either, but from our (reading Of the JES (just economic system) we know that he is perfectly aware of the possibilities, and that the idea of a "balanced budget" in a system that is. at the moment based upon interest is a nonsense.

Orthodox economists like Tansu will not acknowledge that a "balanced budget" where the money power, those who hold the monopoly of the issue of money, withdraw more money from circulation than they issue, which is what happens when interest (fise) is charged, is in fact a system and policy of deflation and escalating debt. Although all the "structural adjustments" of the IMF are by definition deflationary, this is the very last thing that Turkey, or indeed any other nation needs. It is my strongly held belief that contact with the IMF at any level, is the kiss of death.

It would be most interesting to know what Refah thinks of the attendance of their two top officials of the Turkish Central Bank at the June 1998 meeting of the Bilderberg Organisation in Toronto. What would Emre Gonesay, the Governor, or Gazi Ercel, one of his staff, have to discuss in secret with the other high powered bankers and industrialists, not to mention the world bank and IMF personnel that was to the benefit of the people of Turkey? As we know this is a highly secretive group, that I am satisfied is totally anti democratic in its actions, which it has in the past denied even existed. This super rich and publicity shy elite are up to no good, and need to be watched carefully by anyone concerned about accountability.

The IMF have nothing of value to offer the people of Turkey. What is Offered Turkey either already has, or can create for itself, though it takes courage to recognise this and give the lie to almost all of what most of us have been taught in economics. What right does what amounts to a foreign power have to impose policy upon a sovereign people? If an economy is "for" anything, it is to deliver to the people what they vote for through their elected Government. If what they vote for is physically possible, then it must be financially possible. If what the people want is not available, no amount of money will secure it for them, IMF or no IMF. I cannot but help remembering the situation that we suffered in this country in the late nineteen seventies when Denis Healy, the Chancellor of the exchequer at that time, turned back from the airport whilst en route to an important conference, to deal with a demand for exactly the same deflationary policies of the IMF that they are now proposing for Turkey. For the first time since the end of the second world war our post war settlement was put into reverse. Public expenditure was drastically reduced, and austerity was imposed for no better reason than the money markets were in trouble. There was no suggestion that the harvest had failed, or that raw materials could not be obtained, or that the people were refusing to work and produce wealth. There had been no natural disaster that had destroyed our ability to organise production. No the money men had got themselves in a fix. Running to Nanny for comfort produced the usual bankers response, medicine has to be administered to the whole nation, and medicine is no good unless it is horrible and has a nasty taste. If it was not hurting then it was not working. What rubbish.

Certainly to defy the IMF takes courage, something that no one should think the Turk lacks. The British have had two major contacts with the Turkish military in this century, one as an enemy at Galipoli, the other as an ally in Korea. Both left a lasting impression of a courageous people. Now they will need that Courage as never before. The price for opposing the IMF will be a war of words with lies and falsehood as the major weapons. The only defence and means of victory is truth. We know that Refah, through their JES, has this in abundance.

It is quite amazing how the massive reporting of the "invasion" by the IMF has nearly crowded out the really pressing news of a real problem for the people of Turkey. By this I mean the report of the Turkish foundation for reforestation and protection of natural habitats (TEMA) concerning the problems of soil erosion. This is a real problem, which if there is a solution, and l can only refer to my own little knowledge of such problems, is in the hands of the people themselves. The report carefully lists the ills that flow directly from the initial problem of soil degradation, and there are many of them, all of which a wise Government will address. These are all too important to have the bleating of the orthodox economists stand in the way of the solution.

Money, a medium of exchange, needed to set solutions in motion, to secure the services of men and materials can be issued by the authority of the Government itself. Those who ask where the money is to come from, should be told, from the same place that all money comes, out of the end of a pen. You may remember David, that I told you of the experience of my own home the Channel Islands, which a couple of hundred years ago was little more than a group of bare rocks, with hardly a covering of soil. By dint of relentless backbreaking work the people hauled sea weed from the foreshore end spread it on the land to decompose. In time a rich loam was created which eventually allowed a ploughing depth of some eighteen inches to be achieved. In this medium potatoes were grown which in turn led to the ability to secure the one thing that the islands lack, a source of energy, they traded potatoes for coal. If you asked a modern day banker to give an explanation of all this he would be stumped, for the present received wisdom is that investment has to be from savings, and has to come into an economy from "Abroad". All these false ideas can be seen at work in the week's newspapers that you gave me about Turkey. So what I told you of Jersey the modern banker would tell you was not possible, but it did in fact happen because the people were stubborn, certainly as stubborn as the Turks. They applied their labour to available materials, and had the State produce what the State can produce, and I would argue only the State should produce, that is a money supply.

You will have to forgive me David, but another story in the "Turkish Daily News" that has caused me much merriment is the story of the State Minister Abdullah Gul offering a "higher yield" to the people of the Turkic Republics of central Asia if they will ship their gold to Turkey. Why on earth would he suggest such a crazy thing? Are the people of Turkey so lacking in gold teeth that they need more?. Are the Turkish museums short of beautiful objects for the people to look at? Or are all the Mosque roofs leaking and in need of repair? In which case gold may be rather useful. There is not much else that it can usefully do. Or is it possible that some medieval idea of gold as money, or the backing for money has re-surfaced to haunt us. This rather reminds me of the question that I used to ask, and which I never received an answer to, though it did get me some funny looks. The question is, when a banker buys gold, with what does he pay? Think about it. "

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