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 Financialization, Debtfarism and the State in the Middle East: Reflections from Turkey

Pınar Bedirhanoğlu and Funda Hülagü 
Making sense of the Middle Eastern states through analytical tools that are arguably not relevant to the analysis of modern Western states has been commonplace in mainstream studies in political science and/or comparative politics. The “strong state tradition” in Turkey that underlines the supposedly dominant role of the state vis-à-vis capital/society since the Ottoman times onwards, rentierism defined within the oil rich economies of the region, and/or cronyism associated with the Middle Eastern political culture in overall have been such analyses that also construct in return the Western liberal democratic states as the ideal types for comparison. The rise of authoritarianism/cronyism all over the world in the 2010s has not questioned such interpretations or helped the convergence of concepts in state analysis. Rather, authoritarianism has been defined as a trend endemic to the Middle East but exceptional to the West, precipitated in the latter by the populist political leaders and/or by some “anomalies” such as Trumpism. 
This paper will challenge the main assumptions of such mainstream liberal approaches through the conceptual tools provided by Marxist state theorizing (specifically that of Simon Clarke) and argue that the capitalist world market has always been the common constitutive dynamic identifying the class character of the states in the Middle East and in the West alike, while the political forms of these states have been defined by internal class and political struggles prevalent in different countries historically. This will be done by problematizing the rise of authoritarianism worldwide within the context of the enhanced subordination of capital over social relations via the financialization processes that have been redefining the disciplinary content of the capitalist world market since the late 1990s onwards. Besides the systematic expansion and deepening of financial markets thereafter by the pressures exerted by financial interests, the US state’s conditions of reproduction within these financialization processes by either increasing or trying to control the global money supply needs to also be taken into account in the making of this global market discipline.
The political implications of the enhanced financialized discipline of the world market on the Middle Eastern states will be problematized through Soederberg’s conception of “debtfarism”, which the paper will rethink in two ways. Firstly, the necessity to analyze the role of state in the making of debtfarism will be underlined, revisiting Soederberg’s analysis that focuses on the disciplinary role of indebtedness over the laborers within the context of capital-labor relations mainly. Secondly, not only the challenges but also the opportunities debtfarism has provided the Middle Eastern states with will be examined as the political and class implications of debtfarism have differed in time and scale, depending on the conjunctural abundance or contraction of money and credit in world markets as well as the historically specific, and hence varying, levels of financial inclusion in different Middle Eastern countries.      
The analyses in the paper will be informed by the authors’ observations on the Turkish state under the AKP rule since 2002 onwards. Turkey, with her specific experience in financialization and debtfarism, can be considered as a comprehensive case of comparison with other Middle Eastern countries as the AKP governments have helped construct and manage one of the region’s most financialized economies, defined also with a significant degree of financial inclusion in the last two decades. The paper will critically examine the AKP-led debtfarism in the country within the context of the changing dynamics in global monetary conditions and argue that the AKP, while constructing its expansive hegemony in the 2000s by the opportunities provided by the processes of financial inclusion within a global monetary glut, also planted the seeds of its own crisis. For, the enhanced subordination of the Turkish state by capital via financialization throughout the 2000s has started setting political limits to the debtfarism of the AKP and the party’s political Islamist rule within a changing global monetary environment after the mid-2010s, affected by US FED’s financial policies besides the challenges posed by the COVID-19 pandemic at the end of the decade. 

Pınar Bedirhanoğlu is an Associate Professor in the Department of International Relations at the Middle East Technical University in Turkey. She has published in English and Turkish, and also had articles translated to German and French on neoliberal state transformation, state-capital relations, privatizations and financialization in Turkey; political economy of corruption and neoliberal anti-corruption policies; and politics of capitalist transformation in Russia. Her most recent research addresses the neoliberal transformation of states’ security structures, and state transformation within and through financialization processes. She is one of the editors of Turkey’s New State in the Making: Transformations in Legality, Economy and Coercion (2020) published by ZED Books.

Funda Hülagü is Visiting Professor at the Department of Political Science, Philipps University of Marburg. Her research interests include feminist/critical political economy, state and gender in the Middle East and the restructuring of the state in Turkey. She is the author of Police Reform in Turkey: Human Security, Gender and State Violence under Erdogan (2021, IB Tauris) and has co-authored Turkey’s New State in the Making: Transformations in Legality, Economy and Coercion (2020, ZED).