The True Dangers of Trump’s Economic Plans
His Radical Agenda Would Wreak Havoc on American Businesses, Workers, and Consumers
When the Turkish Armed Forces dissolved Parliament and took over the government on May 27, 1960, the Turkish Republic suffered its first violent crisis in its 38 years of existence. Both in Turkey and abroad there was widespread concern that this spelled the end of popular government for a long while to come. Now, after a year and a half of military rule, Turkey is reverting to normal democratic processes. In the interim some attempts were made to perpetuate military government, but overwhelming public resistance nipped them in the bud. In a referendum on July 9 the Turkish people voted themselves a new constitution and on October 29 the Second Republic will be officially baptized. But neither the Turks nor the world should be deluded into complacency. The crisis is not over. True, the first hurdle has been overcome, but the Republic is burdened with many problems and the road ahead is steep and bumpy.
Already there is a serious rift in public opinion. Its significance is deeper than was seen in the referendum of July 9, when out of the 82.9 percent of the electorate which participated 38.3 percent voted against the constitution. That was a sizeable minority. However, the referendum was identified with the interim government and its deflationary policies which had resulted in a grave economic crisis. Unemployment was widespread; 50 percent of the country's industrial capacity was idle. There was a crisis in confidence because of new tax laws, vindictive discrimination against former supporters of the ousted Democrats, the decimation of the élite in the army and bureaucracy, and irresponsible haranguing against conscientious dissidents. Under these circumstances the favorable majority was considerable.
If in 1923 Mustafa Kemal Ataturk had offered his constitution for popular approval, it is doubtful that he could have obtained a majority as great. But at that time the country was united behind a definite goal and it had a leader in whom it reposed complete trust. There were few, if any, effective voices among the intelligentsia aiming to divert the people from their set objectives or alter their instinctive response to Ataturk's leadership. Today there is no charted future course, the intelligentsia speaks with many voices, and the people are stirred with contradictory urges; nor is there any trusted leadership that, like Ataturk's, can lift the vision of the people beyond the circumference of daily politics and imbue them with a sense of national purpose.
The constitution itself, the result of protracted debate among various factions, reflects this confusion. On the one hand it attempts to guarantee political rights to the individual; on the other, it limits his economic opportunities in favor of the state. Is Turkey to be a democracy centered on the individual or a state in which the individual's rights and indeed his existence are submerged in the preponderant collective rights of the community? Will the fruits of enterprise, imagination, drive and capital be available to those who earn and possess them or will they be subject to confiscation by the state for redistribution to those who do not have them? Will social justice mean equality of opportunity or state-imposed social and economic equality-thus stretching political egalitarianism, the essence of Western democracy, into economic egalitarianism, the road to state socialism? Can a wide range of political liberties be preserved under an economic system that accepts an indefinite degree of intervention by the state?
The nature of the political, social and economic questions confronting the Second Republic has been aggravated by the fact that they are incorporated into the constitution. For the most part they are graver than the problems that faced the infant Republic in 1923. If they are to be solved it can be done only by purposeful political leadership in an unconfused intellectual atmosphere. Viewing the Turkish scene one questions whether such leadership exists today, and the deeper one looks the more one feels that, even if it did, it probably could not exert itself as effectively as it did in the past.
II
The political parties themselves reflect the confusion in national purpose. None of them speaks with a clear voice. Their appeals hardly rise above the exigencies of the day or respond to the conscience of the country as a whole. Of the four in the arena, the Republican People's Party is the oldest and most cohesive. The Democrat Party was dissolved following the Coup in May 1960, leaving the Republicans as the best organized and strongest group. The latter had been tested in power as rulers of the country from 1923 to 1950. They initiated the two-party system in Turkey and they have the credit for carrying on a valiant struggle against abuses of the democratic system. Under disadvantageous conditions they had pulled 39 percent of the votes in the elections of 1957 as against 42 percent for the incumbent Democrats.
But some of these assets are outweighed by the fact that the party evokes very divisive responses. The Turks are deeply committed to legitimism, more loosely defined as orderly processes of government. Even under the most arbitrary of the Sultans there was an established framework within which the government operated and the common people always knew where they stood. The Republic strengthened this sense of continuity in the establishment. The new generation under Ataturk grew up accepting rule by law as the natural order of things. Even the Menderes Democrats recognized the depth of this feeling, and tried to retain the semblance of constitutionalism while directing their most extreme efforts against democratic processes. For this reason, the Coup, although essentially an attempt to reinstate real legality in government, received only grudging acceptance. The long interim period between the forcible deposition of the Democrats and the new elections reduced even this partial acceptance. The attempts of the ousted Democrats to identify the Republicans with the Coup have therefore fallen on increasingly sympathetic ears, even though the Republicans have been known as legitimists.
In 1950 the Democrats came to power at a time when Turkey was breaking loose from her age-old agricultural stagnation. Road building, irrigation and other social developments were going ahead. Although the exaggerated hopes thus awakened were dashed by rampant inflation, the Democrats remained associated in the public mind with expanding business opportunity. The Republican People's Party, on the other hand, suffered a fate like that of the Republicans in the United States in being associated with economic hardship. Now, when the requirements of the national economy call for the restriction of credit and the stabilization of prices, with a resultant deflation of earnings, people in search of a scapegoat blame the Republicans.
Not only the rural population but also the urban middle class, which supported the Republicans prior to the Coup, is having second thoughts. New income and property taxes introduced by the interim government have had an adverse effect on business. The government also aroused discontent by a law requesting businessmen to report their total assets, including household goods and their wives' jewelry. The Republicans were the only political group capable of raising objections, but they kept silent while the crisis deepened. This raised doubts in the business community concerning their economic philosophy. People began to ask if there was to be a revival of the former anti-business policy of the Republican Party. Gradually the fear developed among the middle class that if the Republicans came to power the economic freedom they had enjoyed in the last ten years would be curtailed.
Even so the Republicans stand the best chance in the elections. During their decade in opposition they have not been idle. They have developed alternate policies for the country and are presenting the electorate with an elaborate program. But they continue to burden themselves with the welfarist notions of an étatist economy and will have difficulty in overcoming the psychological reservations which sections of the public entertain concerning them.
Of the three other large parties in the Turkish political arena today the Nation Party is the oldest but appears the least effective. Before the Revolution it was the third largest party and in the election of 1957 polled 8 percent of the votes. After the Democrat Party was dissolved the Nation Party expected to inherit its adherents. It failed to do so, however, and remained confined to a few localities. Since it is regarded as reactionary and anti-secularist, this failure reflects a healthy aspect of the Turkish political scene in that, even though the rural areas may be susceptible to religious demagoguery, no party can become dominant without the support of the secularist and modernist urban middle class. However, in case of a close vote between the major parties, the Nation Party can become nationally significant, for it could swing power one way or the other.
Two new parties have emerged as heirs to the Democrats: the New Turkey Party and the Justice Party. Of these the Justice Party admits its connection more outspokenly. Even its name was taken to imply that justice must be done to the defunct Democrat Party and it promptly won many of that party's adherents. It was the only party that was unwilling to come out in favor of the constitution at the referendum for fear it would imply an indirect condemnation of the Democrats. They have some support among provincial organizations but lack a nationally recognized leadership. They are devoid of serious ideas and principles, offering blind opposition to the Republicans and instinctive allegiance to the Democrats.
The right of the Justice Party to pose as inheritor to the Democrats is contested by the New Turkey Party, born at the same time. But unlike the Justice Party, it came into being in response to a need for an intellectual alternative to the Republican Party. Its support is mainly in the cities, among those that condemned the policies of the Menderes régime but remained faithful to the original liberal precepts of his party. It has a good chance of winning over middle-class voters who are having their doubts about the Republicans. In the rural areas it competes with the Justice Party for Democratic votes, but so far the two have avoided open conflict and there are strong pressures for a merger. In any event, coöperation in the election seems sure, for only in that way can they offer any real competition to the Republicans.
The principal weakness of these two parties is in their leadership. The leader of the Justice Party is General Ragip Gumuspala, commander of the Eastern Army under Menderes-in other words, one of the top five military figures in the country. He joined the revolutionaries but was retired from the army shortly after the Coup. He is recognized as well intentioned but has failed to demonstrate any qualities of popular leadership and his many contradictory public statements have not helped to gain him national approval. But even if he had cut a more commanding figure, his past connections with the army would still have counted against him. In their present mood the Turkish people do not look favorably on military figures in civilian affairs. In a merger between the two parties he could well be the first casualty.
As for the New Turkey Party, the impression of divided counsels made by its top executive is not good either. Some of the leaders openly espouse socialistic policies reminiscent of the étatist inclination of the Republicans. Their present chief, Ekrem Alican, was for several months the Finance Minister of the interim government and remains tainted with some of the unpopular acts of that period. Although he is a forceful character, he is not known to the masses and must still establish himself as a national personality. In Turkey, where the father image in politics is of importance, maturity and experience are recognized only after long and arduous years in public life. To become a nationally accepted figure overnight is impossible. In the same party, Fahrettin Kerim Gokay has a better chance of becoming a national leader. A professor of neurology, razor-sharp and cocky, he has proven himself a past-master in handling the public. In his long years as governor of Istanbul he won the admiration even of his enemies for keeping out of trouble. He was tried by the Revolutionary Tribunal and acquitted. He is ambitious, and has been shrewd enough never to deny his desire to achieve the presidency. Today the idea does not look impossible. In a contest for power Gokay could very well snatch the leadership, and under him the party would have a better chance for national success than under any other. Even so, his effectiveness in the country as a whole remains to be proven.
The Republican Party, on the other hand, is endowed with a number of leaders tested both in office and in opposition. The Secretary-General, Ismail Rüstlü Aksal, served in the 19405 as Finance Minister and won a reputation as a sound administrator. He is able and stolid. He has shown himself a good committee chairman but has failed so far to impress the country as a strong leader.
His predecessor in the office, Kasim Gülek, stands out next to former President Inönü as the most effective public figure in Turkey today. He salvaged the party from the throes of utter defeat in 1950 and by keeping the torch of opposition aflame through many arduous years of groundwork on the provincial and borough level he rebuilt it to its present stature. Able, aggressive, erudite, a graduate of several world-renowned universities, fluent in English, French and German, he is by far the most internationally oriented of the Turkish leaders. But in spite of all his qualities, he suffers from the fact that, like other leaders everywhere, the intelligentsia cannot forgive a member of their group who is on easy terms with the common people.
Ismet Inönü remains the main pillar of the Republican Party. He continues to give it purpose and direction and is, in fact, the only person in the country capable of rallying the nation behind him in a time of crisis. Prime Minister under Ataturk, and his successor as President, white-haired but still vigorous, he personifies the elder statesman and is the perfect father image. But despite these great advantages he will need to make almost superhuman efforts in order to succeed in overcoming the prevalent partisan spirit in the country, eliminate the strong divisive tendencies and infuse the nation as a whole with the common purpose it badly needs.
III
Such are the parties and their leaders as the Turkish people go to the polls to vote for a new government. With an outstanding leader, a more cohesive organization and an historic inheritance, the Republicans have the edge over the others. But the people do not see the issue as an outright choice between alternatives offered by the various parties but as a conflict between past grudges and present grievances. The Republicans are held responsible for all the sins of the military régime. If they had resisted its unpopular measures they would not have had this burden, but they refrained from doing so in order not to interfere with the transition back to normal. There is no doubt that their moderation was helpful in this respect. And, indeed, a return to normal political conditions, that is, the return of a legally constituted and popularly elected government, is the first prerequisite for Turkey today. The error is in thinking of this as the only necessity. There is a general tendency to consider the crisis as political only. People are led to believe that once a new constitution is enacted every problem will resolve itself smoothly. This, however, is far from the truth. Indeed, the political phase of the crisis is the least grave and already has been resolved by the adoption of a constitution which provides guarantees for political freedom. This was the purpose for which the Coup was undertaken. If there is an issue on which the Turkish people are united, it is the establishment of parliamentary democracy. Turkey's ailments are other and graver.
Like other underdeveloped countries, Turkey finds herself in economic difficulties. She has broken away from static agriculture into expansive industrialization. She has increased the exploitation of her natural resources. Her gross national product has grown from 1.4 billion Turkish Liras in 1950 to 19.6 billion in 1960. However, her population has been increasing at an average annual rate of 2.9 percent and this has lowered the per-capita growth in the gross product to 4.1 percent. Thus, development has scarcely been able to keep pace with the growing needs of the people. In addition to receiving $1.3 billion in foreign economic aid in the last 12 years, Turkey has burdened herself with $1.1 billion of foreign debt. Out of her own resources she can pay for only 80 percent of the imports she needs. On top of this she has contracted to repay the debt at the rate of $100,000,000 a year. To meet the growing needs of her growing population and to keep up the minimum 3 percent growth in national income, she must invest annually at the rate of 18 percent of the national income. According to the best estimates only 4 percent of this can come from outside sources. The rest must be saved from domestic consumption and directed into productive investment.
This is not impossible. Already 8 percent of the national income is directed to development. As sturdy a people as the Turks, accustomed to tightening their belts, should be able to squeeze out an additional 6 percent of the national income and direct it into the growth process. But in their present mood are they ready for such a sacrifice? Roused from their old inertia and accustomed for the last ten years to enjoying economic well-being, rich and poor, farmer and urbanite, all clamor for more and more of the amenities of modern life. Inflation and economic and political uncertainty have shaken their faith in the future. They are in a mood to let tomorrow take care of itself.
The task of the intelligentsia and of the political leadership is to tell the people that their economic position is grave. But they, too, have extravagant aspirations out of proportion to the country's economic potential. The new constitution obligates the state to undertake every conceivable social welfare measure. The proportion of national income devoted to social welfare has been boosted to such heights that even a highly developed industrialized country would find difficulty in providing for it.
Now it is not harmful to set high standards when it leads people to make extra efforts to realize them. But this is not the case in Turkey today. Increased production is Turkey's need. But instead of aiming to put the country's energies into a concerted production effort, the nation's leaders have emphasized the concept of social justice at the expense of the entrepreneurial spirit, with the result that accumulated capital is being drained away. As in many underdeveloped countries, this has severely affected economic progress. Turkey already has the base for a takeoff into a modern industrial society. The infrastructure is there-the roads, the ports, the power, even some of the heavy industry. Present, also, are the technical skill and the entrepreneurial experience. All that is needed is a scale of values that recognizes material achievement as a proper goal and will not prohibit the capital and energies of individuals from flowing into industry. Only a few months ago a well-known industrialist put into operation a new plant producing an altogether new product in the country. Instead of proudly publicizing the event he tried to keep it unnoticed, for it might arouse envy and invite government interference.
Another factor inhibiting progress is the tendency to accept the idea that the solution of the economic problem is to spread state-financed social benefits. As each section of the public- workers, farmers, civil servants- strives to get a larger share of a pie that remains constant, the struggle between them sharpens. Gradually the cohesion so essential to the success of a national industrial effort is disrupted. The bureaucrat looks upon the businessman as a thief. The farmer considers that the merchant cheats him. The employee thinks his employer profiteers on his toil. Thus an economic problem is subverted into a social ailment.
Economic problems that assume a social character deepen vertically and in the case of Turkey may, if not attended to, impair the basic stability of Turkish society and even affect the nation's political orientation. There are signs that without realizing it Turkey may drift into social strife. First of all, the intelligentsia do not seem to be conscious of the danger, and indeed are themselves guilty of increasing it. Secondly, the pre- election atmosphere lends itself perfectly to tactics of diversion. Under the new constitution, the elections are to be conducted under principles of proportional representation. Since the referendum indicates that none of the parties has a clear mandate, there is a danger that they will try to outstrip each other in promoting welfare measures and raising popular aspirations without regard to financial costs, with the result that well- balanced economic growth will be inhibited.
IV
However, the picture may be brighter than it looks. Beneath the surface healthy forces are operating to put the country onto a balanced course. Thus the discussions in the Constituent Assembly provide a hopeful sign. The constitution as submitted by the University of Istanbul was an extremely socialistic document which went so far as to omit mention of the right to hold property; it referred only to the right to acquire property. The Constituent Assembly altered this and similar shortcomings, thus proving that the central theme of Turkish life-namely, the worth and significance of individual effort in economic growth-was not to be discarded. The Assembly's action also proved that the bureaucracy and the universities no longer monopolize Turkish intellectual life, and that the entrepreneurial class in banking and industry was gaining in influence.
Deliberations in the Constituent Assembly also revealed that various political leaders are aware of the real issues. Many of the Republican leaders, who made their living in business during their years in opposition, know at first hand how in an interventionist society the government can use its economic power for partisan political ends. Leaders like Ismet Inönü, Kasim Gülek, Rüstü Aksal and others try to counteract the exaggerated aspirations and social claims encouraged by the lower leadership.
On balance, then, the Second Republic has a fair chance of avoiding destructive actions and achieving a balanced progress. The requirements are that the people shall regain a sense of cohesion and national purpose and that to this end they shall receive proper encouragement from the top.