Ottoman De-Industrialization 1800-1913: Assessing the Shock, Its Impact and the Response

India and Britain were much bigger players in the 18th century world market for textiles than was Egypt,the Levant and the core of the Ottoman Empire, but these eastern Mediterranean regions did exportcarpets, silks and other textiles to Europe and the East. By the middle of the 19th century, they had lostmost of their export market and much of their domestic market to globalization forces and rapidproductivity growth in European manufacturing. Other local industries also suffered decline, and theseregions underwent de-industrialization as a consequence. How different was Ottoman experience from therest of the poor periphery? Was de-industrialization more or less pronounced? Was the terms of tradeshock bigger or smaller? How much of Ottoman de-industrialization was due to falling world tradebarriers—ocean transport revolutions and European liberal trade policy, how much due to factory-basedproductivity advance in Europe, how much to declining Ottoman competitiveness in manufacturing, howmuch to Ottoman railroads penetrating the interior, and how much to Ottoman policy? The paper uses aprice-dual approach to seek the answers. It documents trends in export and import prices, relative to eachother and to non-tradables, as well as to the unskilled wage. The impact of globalization, Europeanproductivity advance, Ottoman wage costs and policy are assessed by using a simple neo-Ricardian threesector model, and by comparison with what was taking place in the rest of the poor periphery.