Artisan Working Capital in the Ottoman Economic Order (18th and 19th Centuries)

Abstract

This study analyzes the financing practices necessary for the Ottoman guild system to maintain its production cycle through the lens of “working capital” at a mechanism-analysis level. While guild financing is typically discussed within the framework of cash waqfs in existing literature, this research redefines it through public funds, sectoral chests, and the financialization of property. Using records from the Presidential State Archives and qualitative research methods, a dataset focused on 18th- and 19th-century Istanbul is examined.
The scope of the research includes “procurement capital” allocated for raw material acquisition, the “gedik” institution—which aligns with the concept of collateral in modern finance—and “bey’ bi’l-vefa” practices based on the logic of sale with the right of redemption. Additionally, the “joint and several liability” system, which converts individual insolvency risk into a collective responsibility, and the “promissory note” discipline for documenting debt relations are analyzed. This integrated analysis reveals that artisans were not merely production units but active stakeholders in a rational financial network. The study repositions guild financing by shifting it from a traditional social welfare and solidarity paradigm toward a rational business finance framework centered on procurement and production cycles. Ultimately, the Ottoman working capital regime is identified as a hybrid administrative-economic bond that secures financial stability by sustaining production by converting property into capital and risk into institutional trust.