Fall of the Ottoman Empire

Many twentieth-century scholars argued that power of the Ottoman Empire began waning after the death of Suleiman the Magnificent, and without the acquisition of significant new wealth the empire went into decline, a concept known as the Ottoman Decline Thesis. Since the late 1970s, however, historians increasingly came to question the idea of Ottoman decline, and now there is a consensus among academic historians that the Ottoman Empire did not decline.

Itzkowitz and İnalcik state Ottoman writers attributed the Empire’s troubles to the dissolution of the circle of equity, erosion of the sultan’s authority, disruption of the timar system and the demise of the devşirme, "describing symptoms rather than causes". They argue causes consisted of geographical and logistical limitations, population growth after the 16th century, inflation due to influx of Peruvian silver and the end of profitable conquests. Itzkowitz states, "the state could find no remedy" to these problems, and İnalcik, "As a result of these upheavals, the Ottoman Empire of the seventeenth century was no longer the vital empire it had been in the sixteenth" – however neither show the issues remained a long-term problem.

Berkes was one of the first writers in the 1960s to summarise the works on Ottoman socio-economic history. He suggested one of the reasons for Ottoman economic decline was the inability of the ruling class to make a clear choice between war and the more conventional types of capital formation. Berkes' work however focused on the confrontation of the Ottomans and the Europeans, and though important, had little detail on the commercial activities of the state.

The Ottomans saw military expansion and fiscalism as the primary source of wealth, with agriculture seen as more important than manufacture and commerce. Berkes described the Ottoman economy as a "war economy" where its primary profits consisted of booty from expansion. This idea has been supported by Ottomanists Halil İnalcik and Suraiya Faroqhi Western mercantilists gave more emphasis to manufacture and industry in the wealth-power-wealth equation, moving towards capitalist economics comprising expanding industries and markets whereas the Ottomans continued along the trajectory of territorial expansionand agriculture. In contrast, neither the Marxian Asiatic mode of taxation, nor the feudal mode found in mediaeval Europe reflects the Ottoman mode accurately, as it falls somewhere in between the two — excess peasant production was taxed by the state as opposed to it being paid in rent to feudal lords;

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