It is not enough to explain today’s rent-seeking order—which has led industrialists astray and left entrepreneurs struggling for air—solely through population movements over the past seventy years, construction-driven politics over the past forty, or governments’ short-term choices. These policies are important parts of the story, but not the whole of it. The underlying problem is that Türkiye has never fully established an economic order centered on production, disciplined by competition, protected by the rule of law, and oriented toward long-term investment. Put differently, the basis of today’s rent-seeking economy is the persistent failure of production relations and the model of value creation to change fundamentally. Yet continuing along the same path is no longer sustainable. We may have reached the physical limits of expanding rent extraction on this scale.

The Transformation That Remained Incomplete

Following the first great transformation associated with the Industrial Revolution, roughly from the 1760s to the 1830s, today’s advanced Western countries moved during the nineteenth century from economies dominated by agriculture and crafts toward large-scale industry, factories, mechanization, and productivity growth. In the Ottoman lands, the attempt to adapt to this new logic became especially visible during the Tanzimat period of 1839–1876. But older economic relationships based on allocations, patronage, tax collection, proximity to the state, and privileged access were never substantially dismantled and replaced by new production relations. Instead, they largely persisted in altered forms.

A modern, production-centered economy did not emerge simply by building factories—just as a new economy today does not emerge simply by founding startups. What mattered was how people accumulated wealth, took risks, made investment decisions, and related to the state. Much of that underlying logic remained unchanged. We can speak of a genuine transformation only as the basis of success shifts from allocation and proximity toward productivity, technology, scale, and competition.

Modern Institutions That Remained Weak

This is where Türkiye’s incomplete historical transformation becomes especially apparent. Modern institutions were founded, industry developed, and the private sector expanded; yet the behavioral order needed to support them never became fully established. There was industry, but industrial discipline did not take deep root throughout society. The private sector grew, but productive competition never became the unquestioned center of economic life. Nor did the expanding private sector succeed in demanding from the political elites and the state—on which it depended in various formal and informal ways—an order better suited to new production relations.

I am certainly not claiming that nothing was achieved. State-led industrialization accelerated in the 1930s. Between 1960 and 1980, planning and import-substituting industrial policies gained prominence. The decisions of January 24, 1980, and the period that followed accelerated liberalization and market-oriented transformation. After the 2001 crisis came another wave of reform and restructuring. Yet each phase, through sociological and economic continuity, remained intertwined with older habits. Production increased, but the logic of privileged allocation did not disappear. Competition broadened, but personal connections remained central. Even new sectors often began to operate through old networks of protection, guarantees, and relationships. Modernization proceeded, but it never produced a decisive break with those older arrangements.

The Inertia of Old Production Relations

To understand this pattern, we also need to consider the inertia of earlier production relations. By inertia, I do not mean that the past remains unchanged. Rather, I mean that some historically established forms of relationship continue to survive in new forms within a changing economy. In the Ottoman context, milestones in the fiscal transformation after the Tanzimat—the first foreign borrowing in 1854, the debt crisis of 1875, and the establishment of the Ottoman Public Debt Administration in 1881—demonstrate not only financial dependency but also the enduring strength of the relationship between the state and resource allocation. Similar mechanisms persist today through zoning, public procurement, protection, incentives, amnesties, connections, and regulatory flexibility. The instruments change, but the paternalistic state’s resource-distributing logic survives.

For firms, the resulting constraint manifests itself in a tendency to advance through state protection, subsidies, weak institutional discipline, and privileged relationships rather than through productivity, technology, and scale. This is often less a matter of individual intentions than of the incentives that the system makes rational. The returns on productive breakthroughs are uncertain, distant, and potentially modest. Returns obtained through channels of state-mediated resource allocation, by contrast, may be quicker, more predictable, and often higher. In such an order, the industrialist’s behavior is shaped less by the logic of modern productive capitalism than by a hybrid, hierarchy-conscious rationality.

The New Economy Is Pulled Back into the Old Logic

Entrepreneurs face a similar problem. The startup world is supposed to function through product development, innovation, speed, experimentation, and global competition. But when the wider economy rewards relationships rather than competition, proximity rather than production, and early gains and control of capital rather than patient investment, entrepreneurs are drawn into the same environment. Even startups then fail to become carriers of a new economic logic. Founders developing products, producing technology, and exporting must simultaneously cope with investors seeking guarantees, relationship-based market structures, and institutional distrust. The inertia of old production relations shapes even actors expected to behave differently. The new is absorbed into the old.

Türkiye’s incomplete industrialization and the suffocation of entrepreneurship in today’s rent-seeking climate are therefore not two separate stories. They are two expressions of the same historical problem. One involves factories, the other startups. One involves machinery, the other software. But both face the same enormous obstacle: a production- and competition-centered economic logic has never become fully dominant. State-driven rent creation and resource distribution continually reassert themselves at every stage of modernization. As a result, the old order neither persists unchanged nor gives way to a fully established new one. What emerges instead is a hybrid, fragile socioeconomic structure that repeatedly tilts toward rent-seeking under the weight of older relationships.

Seen in this light, today’s rent-seeking order is not an exceptional deviation that emerged only recently. It is the present form of a historical continuity with far deeper foundations. Construction-driven politics, the use of public resources, amnesty regimes, population movements, and short-term growth strategies have certainly expanded it. But they did not create the foundations of rent-seeking from scratch. They allowed a deeper condition to persist—and even flourish—despite economic and technological changes. Explaining today’s situation solely through today’s politics is therefore insufficient. This many-headed dragon of a rent-seeking economy must be understood within Türkiye’s much longer history of modernization.

We Have Reached the Limits of the Rent-Seeking Order

Today, however, we are entering a new phase. Some of the material supports that sustained this order for so long are weakening. The large waves of rural-to-urban migration that fed urban land rents no longer have their former force. Rent-seeking opportunities based on housing sales to foreigners or migration also have limits. Meanwhile, a treasury struggling with crisis cannot continually signal new amnesties and restructuring schemes as it once did. Collection practices are becoming harsher. Businesses struggling to obtain cash in a high-interest-rate environment face pressure to pay tax on receivables they have not collected. When the state’s long-standing signal—’wait, and your obligations will eventually be restructured’—is suddenly replaced by aggressive collection and automated seizures of bank accounts and customer receivables, businesses face circumstances that defy the habits they have learned. The problem is no longer simply lax rules. It is the unpredictable alternation between laxity and severity according to the state’s own rhythms. That, too, is a new form of the old allocation logic.

Türkiye’s fundamental problem is that a modern, production-centered economic order has not taken root deeply enough to transform economic behavior and social structures. The system consequently makes even new activities function according to older practices of privileged allocation. The world is now moving toward another economic logic, first through the rise of the platform economy and then through the rapid spread of generative AI. Türkiye faces a choice: will it continue to interpret this transformation through the old rent-seeking mindset, or will it genuinely move toward an order built on production, competition, technology, and institutional trust?

Türkiye Must Now Change This Underlying Structure

From this point onward, the issue is not merely understanding the past; it is recognizing an arrangement approaching its limits. The rent-seeking order has run out of room to expand. For a long time, population movements, zoning opportunities, protective barriers, expectations of amnesty, and state-distributed advantages sustained it. That room is narrowing. As resources tighten, crises deepen, and the world crosses another technological threshold, the old allocation logic ceases to carry the country forward and instead becomes a burden that constrains its possibilities.

Türkiye now has to change its rent-seeking order. It is not only unjust; it is also economically exhausted. It suppresses production, weakens competition, erodes institutional trust, and absorbs emerging sectors into an outdated logic before they can take root. On such foundations, neither lasting industrial advances nor genuine technological breakthroughs nor long-term capacity in areas such as AI can be built.

What we need, therefore, is not a handful of temporary measures, new incentive packages, or polished reform rhetoric, but a genuine change of economic direction: one that puts production before privileged proximity, competition before connections, and predictable, rule-based institutions before short-term allocations.

If Türkiye continues to read the coming era through its old rent-seeking mindset, each new opportunity will be absorbed into the old order. This time, however, the speed of global change, technological revolution, and the disorder of polycrisis leave little room for such a path. We are at a moment of choice: either establish a productive order or continue to squander the country’s potential within inherited arrangements of resource allocation. Sooner or later, the end of an era in which gains could be made from land, housing, and cars without productive work—and the growing impossibility of most people gaining access to those rents—seems likely to force this change upon us.