gedik’ as transferrable partnership in asset … ağır, 2012 preliminary draft, do not quote 1...

Seven Ağır, 2012 Preliminary draft, do not quote

1

‘Gedik’ as transferrable partnership in asset ownership: legal and

organizational change in Ottoman urban businesses, 1789-18381

Seven Ağır, Yale University, March 2012

“[T]he problem of defining ownership is precisely that of creating properly scaled

legal barriers to entry.”2

Nikola, a Christian resident of Istanbul in the grocery business, owns 60

shares of total 120 shares of ‘certain capital goods,’ known as gedik among

urban businessmen, placed within a grocery store in Balat. Hereby, the court

registers that Nikola sells 30 shares out of his 60 shares to Lazari for 1,500

guruş.3

Vasil, a Christian member of the silk-spinners’ guild, owns a silk-spinning

loom, known as gedik, in Fazlı Pasha Palace. He sells his loom to Abdi Ağa, a

qualified Muslim journeyman in the guild, for 400 guruş.4

In Istanbul’s court registers from early nineteenth century, one can find hundreds

of similar transactions. People buy, sell, inherit, and pawn something called gedik, a

term vaguely defined in the contemporary documents as ‘certain capital goods’

(alat-i lazıma-i maluma). The meaning of the term, however, is much more

complicated than it first appears. It refers to a multitude of transferable usufruct

rights in relation to both the real estate and the sector for which a particular gedik is

assigned. The ownership of ‘gedik’ (sometimes without any real, tangible equipment

being present in the shop) seems to imply the right to practice a craft or a trade at a

specific location and, in this sense, it relates to the tenancy-rights of the gedik

1 I would like to thank Economic History Program at Yale for funding the research on which this article is based. I

am also grateful to Timothy Guinnane, Naomi Lameroux, and Onur Yıldırım for extremely useful discussions about

the complex nature of gedik.

2 Demsetz (1981: 7).

3 İM 120, 1-120/13b-1, 27 04 1232 [16 03 1817].

4 İM 122, 1-122/21b-1, 22 03 1233 [30 01 1818].


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owner. Sometimes, however, gedik refers directly to the capital goods essential for a

particular branch of production (i.e., standard textile looms). In this case, the term

relates to the privileges associated with mastership in a particular sector. In both

cases, for various reasons I will explain below, gedik ownership implies potential

barriers to entry and opportunity for speculative investment.

In this paper, I explain how this curious legal concept emerged and became one of

the most important tools of investment and credit among urban dwellers in

nineteenth-century Istanbul. To do that, I first discuss the ambiguities in the

secondary literature and reassess the arguments concerning the reasons underlying

the rise of gedik, through a time- and sector-sensitive analysis of judicial documents

concerning gedik registrations and transactions. I, then, examine how institutional

regulations concerning access to the rights associated with gedik ownership were

defined. In order to explain how secondary markets in gediks functioned; I also

present a simple theoretical framework. I argue that the increasing value of gediks

(due to long or even perpetual leases locked in rents lower than current market

rates and/or due to increasing monopoly rents associated with guilds) led to the

frequent practice of share partitioning (especially in some sectors), enabling

investment without being a member of the guild.

Ambiguities in the Secondary Literature: What is gedik and where does it

come from?

In the secondary literature on eighteenth-century urban economy, emergence and

expansion of gedik registration has been regarded as a process consolidating (or at

least aiming to consolidate) the monopolistic practices associated with the

Ottoman guilds.5 At the same time, however, the notion was linked to the

struggles revolving around shopkeepers’ claims to real estate (against property

owners; mostly religious endowments) and masters’ claims to capital inputs (against

journeymen in the guild).6 In the literature, these various ‘functions’ of gediks have

been conflated, with little discussion as to whether there is a coherent content to

the term at any point in time. Neither there has been any systematic effort to test

the validity of alternative explanations for the emergence and proliferation of gedik

certificates. Although some scholars underlined the interpretative problems about

5 Baer 1970c. Enver Ziya Karal, Osmanlı Tarihi, c. VI, TTK Yayınları, Ankara, 1976, s. 276, Yi (2004: 151).

6 Akarlı (1986, 2004), Faroqhi (1998).


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the nebulous concept of gedik,7 we still lack a conceptual framework that would

help us solve these problems. Drawing upon a large collection of hitherto unused

primary sources, I will suggest a taxonomy that, I believe, would help clarify

ambiguities inherent in the notion. Based on this taxonomy, I will explore when

and why gediks imply ‘barriers to entry’ and what ‘barriers to entry’ mean for

eighteenth-century urban economic growth.

One of the most prominent Ottoman legal historians, Ahmet Akgündüz claims

that the notion of ‘gedik’ in Ottoman law should be examined by looking at two

separate meanings the term acquired in two different time periods: During the

early period (up until the eighteenth century), the practice of granting monopolistic

privileges to Ottoman crafts and trades (inhisar) was not yet established and the

term merely referred to the usufruct rights granted to the craftsmen and tradesmen

by virtue of their residence in shops, in particular those shops that were rent out by

religious endowments (waqfs). He traces the origins of this early meaning of the

term to several concepts referring to usufruct rights granted by virtue of residence

and/or improvements to the premises (hakk-ı karar), accepted by various schools

of Islamic law as early as the twelfth century.8 In the latter period, as the urban

craftsmen and tradesmen granted various monopolistic privileges, Akgündüz

claims, the term also acquired the meaning of a ‘license’ required to practice

particular craft or trade.

However, neither Akgündüz, nor other scholars who worked on the rise of gedik in

the eighteenth century, discussed whether these two meanings of the term

(usufruct rights related to permanent tenancy and licensure related to monopolistic

privileges) were equally important in all sectors. Neither, they explained in what

ways gedik implied a rupture from earlier forms of tenancy and licensure. I argue

that gedik, in the late eighteenth-century and early nineteenth-century urban

context, meant still different things in different sectors, which have been conflated

in the literature. The subtle differences in the content of the notion, not at first

apparent in official documents, arise from the accompanying regulations (or the

lack thereof) in a particular sector. In order to clarify the ambiguities inherent in

the notion, I suggest differentiating two kinds of gedik and focusing on how each

one of these relate to the notion of ‘barriers to entry’:

7 Yıldırım (2008).

8 In Akgündüz (1988), he discusses in detail the meanings of the terms sükna, girdar, and hulüv. For a brief definition

of gedik and its origins, see Akgündüz (1996).


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i) Gediks as real-estate deeds implying long-term (or permanent) tenancy of a

specific shop for fixed rent, creating opportunities for speculative investment in

real estate markets.

ii) Gediks as occupational licenses limited in number, implying potential (but not

necessarily actually imposed) barriers to entry on a sectoral basis.

I should emphasize that even though these two meanings could overlap in certain

cases, they should be treated separately to understand which functions the

registration and transaction of gediks served in a particular sector. This taxonomy

will enable me evaluate strengths and weaknesses of the existing hypotheses about

the causes and implications of widespread use of gediks and also suggest an

alternative explanation for the proliferation of gedik registrations in the early

nineteenth-century.

GEDIKs as TENANCY RIGHTS

Engin Akarlı, who studied on the development of property relations around the

concept of gedik between 1750 to 1840, explained the emergence of gediks as a by-

product of urban craftsmen and tradesmen’s attempts to preserve their real

incomes against the background of economic difficulties of the eighteenth century.

Financial stringencies of the eighteenth century, Akarlı maintained, had led the

Ottoman administration search for ways to share the revenues of pious

endowments, which owned most urban commercial buildings during this period.

As a response to these pressures, administrators of these foundations attempted to

increase their revenues by increasing the rents. By registering their shops as gediks,

the shopkeepers would be able to preserve their permanent rights to tenancy and

resist these rent increases.

How does gedik and permanent tenancy rights relate? In line with the Islamic

jurisprudence, waqfs could be endowed in the form of rent-yielding property,

including urban commercial buildings. Although waqf property had to be

unalienable, long-term or permanent tenancy (which would imply a threat to this

principle) was legitimized by contemporary jurists on several grounds: In the short-

term tenancy, the tenant would not have an incentive to preserve the conditions of

the premises and therefore the value of the estate would go down due to natural

wear and tear. More importantly, frequent fires and sometimes earthquakes would

destroy the buildings and deprive the waqf of its revenues. In case waqf had to ‘take

care’ of the property, it would have to incur large expenses in an irregular basis.


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Hence, some Muslim jurists maintained that, in order to ensure stable revenues for

waqf, Islamic law permits the long-term tenancy (icare-i tawila) of the waqf property.9

In order to acquire this right to long-term tenancy, tenants had to make an advance

lump-sum payment (muaccele) to the proprietor (waqf), which would theoretically be

sufficient to restore the building, in addition to the monthly or annual rents

(müeccele) they agreed to pay. This arrangement also known as icareteyn (double rent)

was not far from controversial among legal scholars as it created a loophole for the

alienation of waqf property. Yet, although some important figures of the Ottoman

jurisprudence, such as Ebu Suud (d. 1574), the chief juriconsult, disputed that

icareteyn or icare-i tawila as a valid form of rental contract; it was adopted by the

majority of the jurists and seem to have become a common practice in the

seventeenth century.10 Furthermore, through various legal modifications made over

time, the right of long-term lease embedded in the notion of icareteyn paved the way

for use and control of the rented property with greater flexibility.11 As a result, the

‘tenant’, who was referred as the proprietor (mutasarrıf) of the gedik, was allowed to

sell, pawn, rent, and bequeath their usufruct rights granted by the icareteyn

contract.12

Akarlı, like Akgündüz, believes that the term ‘gedik’ emerged as a particular form of

this long-term tenancy contract. While icareteyn contracts granted stable and

favorable tenancy rights in return for tenant’s commitment to make necessary

repairs to preserve the value of the estate; gedik referred to permanent usufruct

rights granted in return for the tenant’s placement of capital inputs required for a

particular craft or trade into the work premise. So although in the late eighteenth-

and early nineteenth-century court registers the term gedik literally referred to the

tangible equipments required for a particular craft and trade (alat-ı lazıme-i malume);

the way it linked the gedik holder to the property holder (the rule of no eviction as

long as the tenant paid the initially-set rent) makes it clear that it indeed referred to

a specific real estate in which the equipment would be placed. In this sense, the

term was a version of ‘icareteyn’ where permanent tenancy rights are granted in

9 Akgündüz (1988: 356) and Çizakça (2011: 81).

10 Akgündüz (1988: 356-8, 362-3) One of the prominent Ottoman jurists, Kınalızade Ali Efendi (d. 1572),

maintained that as long as the arrangement benefited the waqf, it should be allowed.

11 Yediyıldız (2003), Barnes (1986).

12 For instance, the chief juriconsult, Zekeriyazade Yahya Efendi (d. 1643) specified that as priprietor’s heirs,

daughters also had right to inherit the usufruct righst associated with icareteyn. See Akgündüz (1988: 363)


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return for improvement of the premises through its designation as a commercial

space.

Through gedik, shopkeepers acquired permanent tenancy rights. It is on these

grounds that scholars such as Akarlı viewed widespread appeals for gedik as an

attempt to resist rent increases. Yet, icareteyn contracts were already available as a

contract form since the seventeenth century. The question, then, is to what extent

contracts involving ‘gedik’ assignments were different from ‘icareteyn’ contracts and

what these differences imply.

In order to answer this question I examined icareteyn contracts from seventeenth-

century and early eighteenth-century and compared their characteristics to the late

eighteenth and early nineteenth-century gedik transactions. Contracts involving

gediks were different from icareteyn in several important ways. The first difference is

a matter of degree. The evidence indicates that gedik owners had more flexibility in

the control and use of the usufruct rights due to the presumed permanency of the

usufruct rights associated with gedik ownership. Second and following from the

first, there was an active secondary market in gediks, in which price of gedik

fluctuated. The third difference is related to the way in which the rights of the

gedik-holder are defined as part of an occupational group (or a privileged section of

an occupational group, i.e., guild masters) in relation to the rights of the outsiders

(both potential entrants and creditors).

i) Permanency of the contract

The usufruct rights granted through icareteyn could be transferred to the heirs

according to the rules specified in the main waqf document, wakfiyya. If there were

no specific instructions, the usufruct rights were transferred to the daughters and

sons in equal shares.13 It was only if the deceased had no heirs that the waqf was

able to reclaim the usufruct rights and make a new contract.14 Yet, several court

cases from seventeenth century indicate that the waqf was still able to interrupt the

permanency of the contract in certain conditions. For instance, when several

partners jointly acquired premises and one of the partners died, the contract had to

be renewed in which remaining partners, if they wanted to keep the usufruct of the

13 Akgündüz (1988: 373).

14 1605 (1014) Galata 27: 75b/1 in Kuran (2010: 181-83); 1612 (1021) Istanbul 1: 51b/3 in Kuran (2010: 223-25)


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premises, were charged an advance payment once again.15 It is not clear from the

document if the amount charged corresponded only to the shares owned by the

old partner (in other words, remaining partners were allowed to purchase deceased

partners’ shares) or it indeed meant a re-payment by the remaining partners also

for their shares. The clear statement that ‘the rent had to be renewed’, however,

means that partnerships of tenants in icareteyn contracts, at least in the beginning of

the seventeenth century, could be subject to untimely dissolution.

Second, during this earlier period, we find at least one case in which the property-

owner waqf was able to evict the premises just by having to return the advance

payment tenants had made.16 If this case is not exceptional, it means that the

advance payment functioned more like a security deposit in early icareteyn contracts.

Yet, it is also clear from the seventeenth-century court registers that the usufruct

rights acquired through an icareteyn contract was transferrable to third parties. For

instance, in 1605, a certain Mustafa who held usufruct rights of half an oil shop,

rented from Karaçelebi endowment through an icareteyn contract, sold his share to

Receb.17 This means the contract continued in case of a partner change.

In all such transactions in seventeenth century, the seller registers that the

transaction takes place with the full consent of the trustee of the waqf (marifet-i

mütevelli-i vakf ile).18 Furthermore, in these seventeenth-century registers, the

usufruct rights of the work premises and the equipment (i.e., horses in a mill or the

painting equipment in a painting shop) are sold separately. While the sale of the

usufruct rights requires the trustee’s approval, there is no condition (neither waqf,

nor guild approval sought) with regard to the sale of equipment.19

I have examined more than 300 hundred cases from court registers of the late

eighteenth and early nineteenth century and haven’t yet found any case in which

the trustee or the property holder attempts to evict premises in which gedik was

placed. There is, furthermore, no reference to the permission of the waqf’s trustee 15 1605 (1014) Galata 27: 70b/1 in Kuran (2010: 173-4): “dükkan-ı mezburu müceddeden icar etmek lazım gelüp mezburan

dahi talip olduklarında...”

16 1605 (1014) Galata 27: 75b/1 in Kuran (2010: 181-83).

17 1605 (1014) Galata 27: 44a/4 in Kuran (2010: 143-44)

18 Galata 27: 44a/4 (1014[1605]), Istanbul 1: 4a/4 (1021 [1612]); Istanbul 1: 17a/1 (1021 [1612]); Istanbul 1: 51b/3

(1021 [1612]); Istanbul 2: 7a/1 (1024 [1615]); Istanbul 9: 7a/2 (1971 [1661]; Istanbul 9: 151a/4 (1072 [1661]).

19 Istanbul 9: 87b/2 (1071 [1661]); Istanbul 1: 4a/4 (1021 [1612]); Istanbul 9: 151a/4 (1072 [1661]).


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in gedik transactions. Maybe more importantly in terms of permanency of contract,

in case of the death of a gedik-share holder, his shares seem to have been

automatically transferred to his heirs, indicating that dissolution of partnership was

not a problem. Overall, the evidence from court registers indicates that the transfer

of usufruct rights acquired through an icareteyn contract was more difficult than the

transfer of rights associated with gedik ownership. This relative easiness might

explain formation of an active secondary market in gediks, which I will now discuss.

ii) Price formation in the secondary market

Under the law, in icareteyn contracts, the tenant was able to sell their usufruct rights

to someone else; but according to Akgündüz, this payment could not be higher

than the lump-sum amount (muaccele) they paid to the waqf in advance.20 Judicial

opinions and court registers indicate that initially this payment was to be

determined by experts in the field, evaluating the cost of constructing a torn-down

building.21 In the seventeenth-century, for instance, there are various cases of

icareteyn contracts, in which tenants and waqf agree that the tenants would

reconstruct a torn-down waqf property with their own funds and then the cost of

reconstruction estimated by experts would constitute the advance payment (icare-i

muaccele) required for the initiation of the double-rent contract. Also in some cases,

tenants made repairs and the amount they spent was deducted from the advance

payment they had already made.22 This deduction was probably made with a view

to the advance payment that would be recharged at the renewal of the contract

(which also confirms non-permanent nature of icareteyn contracts). In cases in

which waqf used its own resources for the construction of the property, the waqf

seems to have had the right to increase the annual/monthly rent (müeccele) above

the amount specified in the icareteyn contract.23 There are, however, very few

examples such as these in primary documents.

Although a narrow attention to legal sources might indicate that advance payment

was determined according to the cost of repair or reconstruction; almost from the

start, the ability to transfer usufruct rights on behalf of icareteyn tenants and the

20 Akgündüz (1988), 401-405.

21 Akgündüz (1988: 366).

22 1616 (1025) Galata 41: 1a/2. This court register is transcribed in Kuran (2010: 253-6).

23 İV I, 4/57/151 (Ca 1169 [1756])


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limited supply of real estate implied a tendency for the emergence of a

secondary market in which prices of transferred usufruct rights were determined

according to supply and demand. Before explaining the logic of this argument, let

me present the historical evidence. As early as 1742, we see that the tenancy rights

of the waqf property was sold in auctions, which means muaccele itself was

considered as a source of revenue for the waqf.24 It is quite possible that one can

find similar practices earlier (I haven’t examined waqf registers of the earlier

period). Although initial justification for long-term or permanent tenancy was

waqf’s need for stable revenues against the background of financial difficulties

imposed by urban disasters or careless tenants; it is not hard to imagine higher

advance payments were being legitimized in a similar vein, with reference to

sustaining the income sources of the waqf. The tenants (who held the usufruct

rights granted through icareteyn) were already able to sell their tenancy rights at the

market in the seventeenth century. For instance, in 1612, one of the two owners of

the usufruct rights of a mill dies and his daughter, as the single heir, sells the rights

at an auction to pay the debts of her father. In this case, the other owner purchases

the rights, but it is emphasized that an auction was held and supervised by the

trustee.25 In other words, the partner did not have any priority in acquisition of the

assets.

The reason for the emergence of a secondary market is obvious: First, there was

demand for these tenancy-rights because icareteyn contracts ensured that rent

increases were highly improbable. Second, and maybe more importantly in this

earlier period, the transfer of tenancy-rights at free market prices enabled the

tenants to pay their debts to various actors, including the waqf, to whom rent

arrears could have been due. Although this was not the initial justification for

icareteyn contracts, waqfs which were having troubles collecting rents considered

reallocation of usufruct rights at an auction as a remedy for their financial

troubles.26 Whether the waqf could easily reclaim and resell usufruct rights if the

tenant does not pay his rents is not clear from the documents. In other words, we

do not know if the secondary market, from the perspective of the waqf, served as a

safety net against tenant defaults. Even in cases when the waqf was not able to

evict the defaulting tenant easily, as long as it could reclaim the usufruct rights, he

24 İV I, 1/37/166 (Ş 1155[1742]).

25 İstanbul 1: 51b/3 (1612 [1021]).

26 İV I, 3/138/527 (S 1165 [1752]).


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could get the help of the new tenant for eviction. Unfortunately, we do not have

many examples as to how waqfs dealt with defaulting tenants. The rents being

lower-than-market rates in icareteyn contracts might explain why there were no such

disputes documented in court registers. The waqfs could also expect, in unusual

cases of tenant’s death-without-heirs, to profit from higher market prices.

The secondary literature maintains that, as in all icareteyn contracts, when a tenant

acquired ‘gedik’ rights for a particular shop, he would make an advance lump-sum

payment (muaccele) and agree to pay a regular monthly or yearly rent.27 I suspect that

this would be correct only if the gedik rights were acquired from the waqf directly,

implying that the gedik owner was also the tenant of the icareteyn contract. An issue

overlooked in the secondary literature is that this was not always the case: Tenants

of an icareteyn contract could profit from an increase in market rents not only by

selling their usufruct rights but also by subletting the premises for higher rents. In

other words, some of the actual shopkeepers were sub-tenants who could be

charged higher rates than the rates specified by the icareteyn contract. This means

theoretically, and as various cases from the late eighteenth century indicate,

empirically, the tenant of an icareteyn contract could be different from the owner of

gedik, the equipment placed in a shop. In cases where gedik holder is the sub-tenant,

it is not clear if he has to make an advance payment to the waqf or the tenant (i.e.,

an icareteyn contract within an icareteyn). Keeping in mind that the guilds were indeed

able to issue deeds of gedik (known as warden’s deed, kethüda temessükü), we can

assume that potential gedik owners were not expected to pay the waqf or the tenant

a lump-sum amount.

We do not yet know what percentage of gedik owners at the beginning of the

nineteenth century (for which we have the most extensive data) were primary

tenants of icareteyn contracts and what percentage were sub-tenants; neither do we

have accurate information on what percentage of gedik deeds were issued by the

waqf or by the guild. We do, however, know gedik, by definition, implied a

protection against eviction and rent increases, very much like icareteyn contract

originally did. So a gedik owner could resist the attempts of the tenant’s rent

increase.28 In this case, it would be the price of gedik, rather than the payment for

usufruct rights of the premises, that would go up.

27 Akgündüz (1988: 214).

28 İM 43, 1 (23 10 1192 [14 11 1778])


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If most gedik holders were subtenants (and had to deal with tenants rather than the

waqf), this might explain why, in the gedik transactions registered at the court, there

is almost no reference to the role of waqf in determination of the price of gedik. As

long as gedik holder (whether the tenant or sub-tenant) continues to make the

regular rent payments to the property owner, he or she was free to sell, pawn, or

rent the gedik to any potential creditor or subtenant. Although in most court

registers, there is no explicit discussion of how gedik prices were determined, many

cases indicate that the owner of the ‘gedik’ was able to sell it in auction. In other

words, a gedik holder would be able to sell his gedik for a price higher than the

muaccele (if he is the primary tenant) or higher than the cost of gedik (if he incurred

any costs, obtaining the gedik from the guild). In both cases, value of the gedik

would reflect the excepted capitalized value of paying below-market rents.

There is evidence suggesting that the secondary markets in gediks are more fluid

than the secondary markets in usufruct rights granted by icareteyn contracts: The

cases concerning the transaction of the transfer of usufruct rights in the early

(seventeenth-century) court registers do not seem to be more than four or five per

register. Court registers from the second half of the eighteenth century or early

nineteenth century, on the other hand, contain a high number of transactions. For

instance, a register from 1790-93 contain 65 cases of gedik or gedik-share

transactions.29 The registers from 1816-1818 contain hundreds of such transactions

in various sectors.30

One might argue these quantitative differences might reflect procedural differences

as to the registration of transactions concerning usufruct rights. Such transactions

in seventeenth and early eighteenth centuries might have been registered only in

specific waqf registers and, without a comprehensive study of such documents, it

will be difficult to reach solid comparative conclusions. Yet, without such

evidence, I tend to think the waqf would be inclined to prevent alienation of the

property and, to that end, be more interested in setting limits for the transfer of

usufruct rights; and accordingly, the available evidence reflects a gradual erosion of

waqf’s hold over usufruct rights.

29 İM 60.

30 İM 120, İM 121.


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The fact that the gedik transactions do not refer to any approval by the trustee of

the waqf or the primary tenant of the premises corroborate this point. In the late

eighteenth-century and early nineteenth century, gedik owners seem to be

completely free in how they partitioned their gediks or to whom they sold/pawned

them (Although in some sectors restrictions apply, they are not related to the

claims of the property owners, i.e., waqf, but the guild; which will be discussed in

the next section). There is, furthermore, no connection made between muaccele, or

cost of repair/reconstruction or cost of actual/tangible equipment on the one

hand, and the gedik price on the other. In other words, there is no discussion about

how gedik prices should be formed (Again, there is an exception related to the

guilds’ interference, which will be discussed below). Lastly, there is no case in

which death of one of the share-holders seems to have implied end of a contract,

as was the case in certain icareteyn contracts. Formation of a ‘partnership’ through

ownership of a gedik share might be less risky for the gedik owner than formation of

a business partnership, which could more easily end and deprive him from his

tenancy rights.

One question that remains to be answered, however, is why the primary tenants of

an icareteyn contract would consent to granting permanent tenancy right to gedik

holders. For the waqf, the possible reason, we suggested above, was their concern

for stable revenues (incentivizing the tenant for taking care of the premises and,

probably, for paying his rents regularly). But in a situation where tenant-rights were

inherited, permanently transferred to others, or rented out for profit; the problem

is replicated at a lower level: The subtenant would have no incentive to preserve

the building or pay his rents regularly. In other words, what was once the problem

of waqf becomes now the problem of the tenant. There might be another

explanation as to why this second layer of alienation (of the waqf property) was

accepted by the tenants. In order to ensure stable supply in urban centers,

especially in certain sectors which were considered essential for public good,

political administration could have aimed at protecting sub-tenants, those who

were actually engaged in production or retail, against property owners or primary

tenants, enabling them to claim permanent tenancy on real estate. This was indeed

how central administration both justified and attempted to constrain assignment of

gediks to shops in the late eighteenth century.

The aim of gedik, according to official documents, was to ensure economic stability

for shop-keepers dealing with essential commodities (i.e. bakeries, butchers,


13

groceries).31 In other words, sectors involved in necessities were provided some

sort of rent subsidy and protection against eviction. But for various reasons that

are not yet fully clear, members of non-essential sectors also managed to register

their shops as gediks and claim permanent rights of tenancy. Central administration

was not approving of this situation. A court register from 1805 summarizes Sultan

Selim III’s disapproval of the prevalent registration, usurpation, and transaction of

gediks.32 Expansion of the gedik registration from shops dealing with necessities

(such as bread and meat) to the shops that were not allowed to be registered as

gedik (such as tobacco-dealers, snuff-dealers, barbers, textile producers and dealers,

coffee shops), this document indicates, was accompanied by judicial uncertainty.

While some judges regarded gediks as an illegal practice, others allowed all sorts of

gedik transfers; either the Treasury or those who acquired gediks in legitimate ways

suffered losses.

The implications of proliferation of gediks for the Treasury is not at first apparent,

so let me explain. With the initial issuance of gedik, the property owner could raise

a substantial amount at first. However, the real returns from monthly or annual

rents would decrease over time. If the property owner was allowed to usurp the

gedik after the gedik owner dies and sell it once more, in other words if the gedik

ownership was limited to life-term, this would to a certain extent help property

owner recapture some of the rents in secondary market. Yet, all gedik transactions

indicate that they were inheritable with only a relatively small additional cost (a fee

of transaction to be paid when gedik was transferred)33. Since most waqfs were

either endowed by members of the Sultan’s family or controlled by central

administration (through tax-farming practices) in this period, a decrease in waqfs’

revenues also implied a decrease in the revenues of the central administration. In

other words, while the issuance of new gediks could be a source of revenue in the

31 “Fakat erzak makulesi olan ekmek, et ve bakkal eşyası ve bunlara kıyaslanan eşyaların satıldığı dükkanlarda kiracılar eğreti gibi

durduğundan, söz konusu eşyaların bulunmaması Allah’ın kullarına zarar vereceğinden sadece kullara yararlı olmak amacıyla bu

makule dükkanlarda gediğe itibar edilmesi...” Akgündüz (1988), 411 refers to İKS, 1/97, p. 43.

32 Ergin 1995, pp. 637-8 refers to İstanbul Kadılığı Sicilli, numara 98, 12 Rebiülahir 1220 (1805). “bâ-evâmir-i aliyye kat’a

ihdası memnuattan olan kahvehane gedikleri dahi kaydolunarak ve mukayyed gediklere kıyas ederek her tarafta hevâyi gedikler ihdası

ve gâh huccet ve gâh esnaf kethüdaları tezkireleri ile bey’ u şira ve gedik ashabından biri fevtolsa terekeden addolunarak tevarüs ve vârisi

olmayanların gediği cânib-i Beytülmâl’den zabt u furuht olunarak ve hukkâm dahi gâh; “Gedik âlât-ı lâzımeden ibâret olup emval-i

menkûle makulesinden olmakla bey u şirası ve zımnında vâkıa olan “deâvisi sahihtir” ve gâh “Gedik hilâf-ı şerdir” diye adem-i itibar

ile bazan gedik ashabının istira içün verdikleri akçaları dahi meskûtün-anh kalmakla telef filhakika gerek ashab-ı emlâk ve erbâb-ı

gedik gûnâ-gûn mutazarırr olmakda idikleri zahir...”

33 There is scant information about these fees. Currently, I am looking for more data.


14

short-term, proliferation of gediks as permanent rent subsidies would mean a fiscal

loss in the long-term. As in the case of life-term tax-farms (malikane), the trade-off

between short-term and long-term revenues would be evaluated differently

depending on the broader context (i.e. immediate fiscal pressure due to war). As

long as the demand for real estate (or more specifically gediks) was increasing, the

administration would also be able to create new source of revenue by establishing

more waqfs and selling new gediks. The existing gedik holders, on the other hand,

would be able to profit from the sale or rent of their gediks in the secondary market

as long as the market is not saturated. The presence of increasing rents for private

investors ( a source that administration would ideally like to capture) as well as the

tradeoff between short-term and long-term revenues for the Treasury might

explain the ambivalent position of the central administration; the fact that it was

explicitly criticizing formation of new gediks, while at the same time condoning it.

There might be also some political economy aspect to the administration’s position

with regard to the assignment of new gediks to urban shopkeepers, related to how

much political power various groups were able exert. This will also be discussed in

the next part of the paper.

To sum up, in early icareteyn contracts, waqf’s control over transfer of the usufruct

rights held by the tenants were still strong enough not to allow a substantial surplus

generated in secondary market. In the latter period, as rights implied by gedik

ownership became more permanent, a secondary market emerged in which price of

gedik was formed according to the capitalized value of paying below-market rents.

Emergence of this secondary market would imply a potential for speculative

activity (shaped by expectations about gedik prices). In an expanding urban

economy, this would also imply a significant increase in gedik prices over time,

making it more difficult for newcomers to acquire their gediks through their own

financial means and would induce gedik partitioning.


15

GEDIKS AS SECTORAL LICENSES (POTENTIAL BARRIERS TO

ENTRY)

There are two reasons why gediks should be analyzed as occupational licenses:

First, there is a type of gedik which is assigned to people, allowing them to operate

a legitimate business without any reference to the usufruct rights of real estate.

These gediks, also known as moveable gediks (havai gediks), are generally assigned to

itinerant retailers or service providers, such as urban water carriers (sakas) and

roaming bagel sellers (simitçis). Ownership of gedik, in this sense, implies access to a

market with barriers to entry, and therefore, a potential for above-market profits or

at least protection against competition. Gediks such as these are not rented or

bought from the waqf and the acquisition does not entail an obvious cost (such as

advance payment in icareteyn). Second, most gedik holders—even the ones that hold

usufruct rights associated with a particular piece of real estate—are related to

guilds. As such gedik ownership is sometimes (but not always) is synonymous to

guild membership.

Imagine a guild is fully able to control creation of new gediks, it means one can

acquire gedik by being member of an occupational group, for which they have to

Theory Box 1: Gediks as permanent and transferable tenancy rights Suppose the waqf rents a stall for a rent W. ‘Forever,’ anyone occupying this stall pays them W. Now suppose the market rent on the stall is V. Then the waqf is forgoing W-V each year. The capitalized value of the gedik is (V-W)/r, where r is the discount rate. In other words, G = (V-W)/r If we assume that the occupier can freely sell the gedik to someone else and everyone knows that the W will never change, then any increase in the market rent of stall (V) will have a large effect on gedik price (G). This means owner of the gedik can make a lot of money as V goes up, but it also means he bears a lot of risk. As long as the amount of premises available for ‘permanent-tenancy’ are fixed (or increasing at a rate lower than the demand for these premises), the initial purchasers of the ‘permanent-tenancy’ rights would be able to sell these rights for profit. i.e., Suppose r = .05. Then the capitalization multiplies V-W by 20. This implies that any change in V has a large effect on G..

Suppose W=1 and V = 5*W; that is, since the waqf first fixed the rent, the market rent has increased 5-fold. Then G = 4/r; if r=.05, then G=80. This implies that G is worth 80 times the original rent. This shows how this mechanism can quickly make the value of the gedik huge in comparison to what a tradesman might be able to pay on his own. Thus splitting the G would be a solution for access to work premises.


16

pay certain fees. This meaning of gedik, in a sense, is similar to the gedik we

described in the previous part: There is a cost to acquire gediks, which depends on

the rules and regulations of the guild. Let’s call this F, meaning membership fees.

There is also a market rent (V) accrued through the barriers to entry. As long as

membership costs do not change (or for some reason, membership to the guild is

acquired through non-economic means), the capitalized value of gedik [G= (V-

F)/r] would go up, in an expanding market (see Theory Box 2).

Even in cases, when gediks actually refer to tenancy rights, they might at the same

time, be thought as some sort of occupational license. Because, issuance of gedik in

any sector, could be accompanied by restriction of entry into that sector. As such,

the market rent (V) obtained through gedik would include both the rents accrued

through access to real estate with rents lower-than-market rates and the rents

arising from limited output capacity in a particular sector. The cost of gedik, on the

other hand, would include both regular fixed rents (W) and fees (F).

During the second half of the eighteenth century, in various sectors, existing gedik

owners applied to the court, on the basis of imperial decrees they had already

obtained, to officially register their gediks as the only valid ones for that particular

craft or trade. This means most gediks, in late eighteenth and early nineteenth

century, probably contained both types of rent, yet in differing degrees; depending

on how successful the guilds were in both preventing outsiders infiltrating guilds or

emergence of an informal sector. Now, for convenience, let us leave aside tenancy-

rights and focus on gediks only as occupational licenses. This will help us clarify

the role of guild and specific institutional regulations in determining what gedik

ownership implies.

A license means an official permission to practice a craft or trade. It might be

issued by the authorities or professional organizations. It may require paying a fee

and/or proving a capability. As scholars have already argued, gediks as a

requirement to practice an urban business can be understood as a license. One

question that has not been dealt in depth, however, is how gedik ownership (apart

from tenancy-rights aspect) is different from guild membership. This is an

important question because the notion of ‘license’ had already existed within the

guild system. In order to practice certain crafts and trades, one needed to be a

member of a guild and acquire the status of master, which implied at least certain

fees and tax obligations. In other words, guild membership or mastership itself

(like admission to the bar) implied barriers to entry. Whether these barriers to entry


17

were personal (depended on status/identity) or impersonal (required a certain

obligation or fee), in other words whether membership was open or not, would

also have some implications for both the degree and the distribution of rents.

The restriction of dealing, known as inhisar-ı bey ü şira (or shortly as inhisar), was

already granted in most urban sectors by the law codes specifying the number and

kind of people allowed to perform a trade or profession.34 Only qualified

journeymen, upon approval of the guild administration, were allowed to acquire

the status of mastership (ustalık) and practice the craft himself. In productive

sectors in which skills were important, the status of master was acquired through

in-guild training. In this case, access to privileges associated with mastership would

require first acceptance as an apprentice by a master, which indicate importance of

relations established through social networks, such as family, neighborhood, and

religious community. The importance of social relations also arise from a common

arrangement made to reduce risks in urban shopkeepers’ dealings with traders:

Shopkeepers needed to stand surety for each other for the purchases they made on

credit (müteselsil kefalet) and personal information was clearly an advantage for

acceptance into such mutual liability schemes.

Another common justification for restricting the number of people in a certain

sector related to the general policy of price stability. Competition among retailers,

was believed to induce an increase in the price of intermediate goods. Hence, the

ideal policy was to encourage distribution of imported intermediate goods through

guild officials and to set the price of final commodities at ‘fair’ levels. While in

sectors dealing with imported intermediary goods and produces with specific

quality regulations set by the administration, the restrictions were justified easily

with reference to public good; in other sectors, entitlement to one’s daily bread was

considered a valid argument against opening of new shops.

Although what I have just outlined is based on the political-legal discourse about

the ‘ideal’ functioning of an urban economy organized around redistributive,

welfare-maximizing principles and does not necessarily reflect actual practices; it

sheds light on how various groups legitimized their expectations and demands. It

was not unusual for the urban craftsmen and tradesmen to make claims for

exclusive dealing in their sector prior to eighteenth century. For instance, a group

of tinsmiths petitioned the court to stop gypsies working in unauthorized

34 For a brief definition of inhisar, see Encyclopaedia of Islam,2nd ed.


18

locations, arguing that they were hard to track down for tax collection purposes.35

In another case, chickpea sellers tried to stop a potential entrant, claiming that they

held an imperial decree establishing that there should be no more than 16 chick-

pea rosters in Istanbul. Although in this case the Grand Vizier sided with the

entrant on the grounds that opening of a new shop would do no harm (to the

public),36 in numerous other cases, existing shopkeepers were able to obtain

charters (nizamname) granting them monopolistic privileges by officially setting the

number of legitimate practitioners of a certain craft or trade.

Some scholars have associated the rise of gedik in the late eighteenth century with

the expansion of guilds’ prerogatives and the exclusive rights associated with guild

membership. As Yi summarizes, “especially after the customs of a guild were

written down by the government in the form of a nizam (charter), and gediks were

formally endorsed in it, guild masters considered gedik to be a guarantee of their

monopoly.”37 But does this imply “[w]ith the advent of gedik, which would often

involve the control of instruments of trade, fixed locations or something tangible

that was a necessary part of engaging in business, a limitation on the number of

practitioners would have had a stronger effect”38? I will give some examples of

how gediks became part of guilds’ monopolistic claims before trying to answer this

question.

One of the earliest case of a collective request for such a charter is dated 1764. A

large group of retailers selling alaca (a type of cloth) imported from Aleppo and

Damascus to Istanbul, asked the court not to allow opening of new shops explicitly

on the grounds of public good. According to the 71 shop-owners (including both

Muslims and non-Muslims), these new shops (which also held gediks themselves)

were not able to pay their debts to the merchants, they raised the prices of the

commodity and furthermore they sold their gediks to outsiders for prices above the

actual value of their shops.39 Their request was accepted and they acquired a decree

which set the legal number of gediks at 71, registering the location for each shop

holding gediks.

35 Yi (2004), 146.

36 Yi (2004), 147.

37 Yi (2004), 151.

38 Yi (2004), 153.

39 C.BLD. 1698.


19

In 1797, producers and sellers of sherbets applied to the court with a charter they

acquired before in order to acquire another decree reconfirming their rights40.

According to the charter, the decree set the number of shops dealing with sherbet

at 43 and maintained that no new shops should be allowed. The shopkeepers in

these shops could not be evicted as long as they paid their rents to the property

owners or to the tenants holding their shops through double-rent. When a shop-

keeper died, his gedik would be sold to his qualified son; and if he died without

heirs, his gedik would be sold to one of the qualified journeymen at the auction.

The money acquired at the sale would be used to pay the debts of the shop. There

is no rule specified about the transfer of gedik during gedik holder’s lifetime.

The reasoning, as explained in this decree, for the protection of tenants is that

these shops required large equipment (firewood and big pans etc.) for the practice

of their trade and like groceries, butchers, and tobacco shops, moving them was

too difficult and costly. Accordingly, in this decree, the location of each shop with

authorized gediks was recorded.

Although it seems such charters were granted to a wide variety of sectors during

the late eighteenth century, they were not at all irreversible. In a decree from 1792,

sellers of aba (coarse woolen cloth) came to the court with a previous charter

granted from the Sultan to prevent sellers of old and used garments from dealing

with new aba. According to this charter dated 1787, those who were not trained in

the guild41 were not allowed to open a shop and even those that already acquired

training in the authorized guild shops were not allowed to open their own shops

without the permission of the guild officials and senior guild masters. There were

in total 25 authorized gediks and when one of the gedik owners died, his gedik

would be sold to the son and if he had no sons to a qualified member of the guild

for its market price (semen-i misil) through the arrangements made by the warden

and senior guild members. Referring to the regulations specified in this charter, the

guild members (including warden, his assistant-yiğitbaşı-, 13 Muslim masters and 10

Christian masters) came to the court, to complain about the dealers of old and

used fabrics (specifically referring to 13 Christians) who bought and sold new

woolen cloths (aba and şayak). Upon their request, a new decree was issued to

declare the regulations concerning the marketing of garments and to prohibit other

cloth-dealers to buy and sell new woolens. A few years later, however, in 1798, a 40 İK 76, no. 17. (11 Ra 1212 [3 9 1797])

41 “Asitane’de hizmet ile perverde ve mazun olmayup ham-dest olanlar hırfetimize dahil olmayup”


20

certain Mehmet Arif, who is referred as a woolen-cloth dealer, came to the court

complaining about other dealers, preventing him to convert his shop into a woolen

cloth shop. In his request, Mehmet Arif appealed to a decree issued in 1788/89

abolishing barriers to entry (inhisar-ı bey ü şira) in non-essential commodities. The

Sultan decided in favor of Mehmet Arif and asked the court to expunge the

regulation setting barriers to entry in the above-mentioned charter in line with the

abolishment of inhisar.42

Although the above-mentioned 1788/89 decree is not available to me, a decree

dated 1791 seems to have re-confirmed the prohibition of barriers to entry in non-

essentials. In this decree, Sultan Selim III abolished inhisar in all sectors but those

dealing with primary consumer goods on the grounds that they cause inflation and

harm the consumers.43 While ‘public good’ had always been part of the legal and

political discourse concerning regulation in urban markets, the fact that Selim III’s

administration was the first to openly criticize and prohibit inhisar as a general

principle, might explain why shopkeepers would be more concerned with proving

that their monopolistic privileges were in line with common interests by the end of

the eighteenth century.

In another case, a decree abolishing ‘barriers to entry’ among plasterers, specified

in detail various rules concerning in-guild training (i.e. setting 25 as age limit for

promotion to mastership) and limitations about work site (i.e., separate buildings

for Muslim and Christian plasterers). Although the decree prohibited inhisar in

theory, with the regulations introduced authorities made sure that the occupational

(and seemingly quality-oriented) limitations with regard to who can or cannot

practice continued to prevail.44

In many cases, the exclusive rights presumably granted to specific groups of

tradesmen or craftsmen were infringed by the members of other officially-

recognized groups. For instance, in 1798, the producers and sellers of sherbet (who

were previously granted gedik rights) came to the court, complaining about akide (a

sugar candy) sellers producing sherbet and thus violating the rights granted to them

by the earlier charter. Akide sellers defended themselves on the grounds of the

42 İK 76, no.23 (21 S 1207 [8 10 1792] and (19 B 1212 [7 1 1798]).

43 HAT 192/ 9342 (1205/1791). See Appendix 1 for the transcription of this important decree.

44 İK 76, (1211-1217/1796-1803), no.24: “esnaf-ı mezkurenin yedlerinde olup sened ittihaz eyledikleri evamir-i

aliyyenin mahall-i kaydları ref ü terkin ve bu şurut-ı meriyye Başmuhasebe kalemine kayd...”


21

decree prohibiting barriers to entry. While this argument seems to have resonated

with the court which underlined that sugar was not an essential commodity (erzak-ı

zaruri), sherbet sellers responded by referring to the earlier decree that fixed the

number of gediks and also to the fact that they and the akide sellers had different

wardens and different organizations enabling specific quality requirements, as was

the case in a great number of other sectors such as flour produces (i.e., different

guild organizations for bagels and breads). In the end, the Sultan decided in favor

of the sherbet producers on the grounds of both the limitation set upon gedik

numbers by the earlier decree and the quality concerns raised by the sherbet

sellers.45

All these examples indicate that gediks do not automatically imply ‘barriers to

entry’. Opening of new (legal) shops or the permission to increase production/

marketing capacity in the existing shops did not depend on whether these shops

already had gediks or not. As in the case of alaca sellers mentioned above,

sometimes an erosion of the barriers to entry originated from those shops that

already held gediks themselves. For instance, in 1798, the chief of security in Galata

district was asked to prevent several (specified) bakeries that produce high-quality

bread types (has etmek and francala). The decree in concern explained that the

production of these bakeries led to the decrease in the consumption of regular

bread, causing financial troubles for the bakers and the state, to which they owed

money.46 Nevertheless, the same decree in concern reconfirmed a recent permit

about 25 new shops for selling high-quality bread, previously shut down, but

recently given permission once more to operate. The decision is made at the

presence of the guild officials representing the bakers producing regular bread, the

millers, and the bakers recently authorized high-quality bread. It is clear that the

decision as to how many new bakeries to allow, in other words, how much to limit

additional capacity was made regardless of whether shops in concern held gediks or

not. After all, if a potential entrant in a sector or sub-sector could acquire an

official permission; he could find the building and the equipment required to

acquire a gedik. In other words, the fact that gedik numbers were in general fixed,

does not mean, ipso facto, that supply of gediks was fixed.

45 İK 76, no. 30, (14 Ca 1213 [24 10 1798]): “her bir sınıf kadîmü’l-eyyâmdan berü meluf ve sanat olmak üzre şakird ve kalfa

olup üstur almak ve usta olmak Devlet-i Aliyyemim nizam-ı kadimelerinden olduğundan...”

46 İK 76, no.27, (14 2 1213 [28 07 1798]).


22

The above-mentioned petitions and charters indicate that the guilds attempted to

control creation of new gediks and thereby enforce barriers to entry. One thing

neither specified in these charters nor discussed in secondary literature, however, is

the rules governing transferability of gediks. Some of the above-mentioned charters

maintain that if someone dies, his gedik would be sold to his sons or qualified

journeymen by the mediation of the guild and the amount received would be used

to pay the debts of the deceased. This was, for instance, a common arrangement

for bakers’ guild, which agreed use of gediks as collateral against bakers’ debts to

merchants and state.47 What was not discussed in these charters, however, was

whether the gedik owner could sell or rent his gedik to someone else during his life

time. According to the registers of 1815-1818, this was a common practice among

gedik owners. People bought and sold gediks in a secondary market, with clear

speculative expectations.48 Many gediks, furthermore, were divided into shares and

sold to those who were not members of the guild.49

The speculative value of gedik emerged from either the access to real estate with

rents lower-than-market rates, which I discussed above, or from the monopolistic

privileges of the guild. Let me focus on this second component now: Assuming

that the total number of gedik numbers were fixed enabling guild members accrue

monopolistic rents, an increase in demand for the output would imply an increase

in the value of the gedik. As gedik prices increase, it would be more difficult for

potential entrants to enter into the business. This might explain the demand-side of

why most gediks in the beginning of the nineteenth century were divided in shares.

On the supply side, the gedik holders could raise funds or have access to credit,

without necessarily selling/pawning the whole gedik and without needing to find

guarantors in order to borrow. Furthermore, as a result of emergence of a

secondary gedik market (as long as there was no control over potential share-

holders), outsiders could acquire a share of monopoly rents created by guilds.

47 C.BLD. 124/ 6199, 14 Ş 1214 [11 1 1800], C.BLD. 24/ 1167, 1221 [1806-1807].

48 The best example of such speculative activity comes from Istanbul’s court registers of 1790/92. A certain Hafize,

female Muslim resident of Istanbul, purchases half share of a wheat-cracking shop on credit, to sell it in less than a

month for 38 per cent profit. İM 60, nos. 31, 34, 35.

49 Especially among bakers, grocery owners, pastry-shop owners İM 60, nos. 13, 101, 102, 156, 159 and the related

entries in İM 121 and İM 122.


23

GEDİK and INTRA-GUILD MOBILITY

When a particular group of craftsmen and tradesmen specified their gediks as gediks

specifically belonging to their vocation and fixed their number, this could serve

two purposes. First, it could prevent new entrants to that sector, limiting the

additional capacity, which we discussed above. Second, as Suraiya Faroqhi noted,

masters of the guild could use their gediks to prevent expansion of their privileges

to the qualified journeymen. According to Faroqhi, an increasing number of

journeymen with claims to mastership (and their own shops) was the reason why

masters felt threatened and used gedik to preserve their economic and social

status.50 It is clear that Faroqhi acts upon impressionistic evidence and fails to

50 Faroqhi (1998).

Theory Box 2: Gediks as occupational licenses and monopolistic rents

Above we maintained, G = (V-W)/r In essence, V is a function of the profits to be made occupying a certain stall. Those profits are in part a function of the guild and its power. A powerful guild might imply monopsonistic and monopolistic privilige, which would affect the value of the gedik. V = V(P), where P is the price the guild charges for its goods (there is a demand curve D=D(P), P is an optimal price that follows the demand curve). From now on, I assume that P is set by the guild as a profit-maximizing monopolist. Then for a guild member, V(P) is by construction higher than for someone who operates in a competitive market. Thus the guild makes G worth more than G, if there were no sectoral monopolistic priviliges. The price of gedik (G) goes up only when P goes up (i.e., when the demand curve shift rights). In other words, gedik owner can make a “profit” on gedik arises if he buys it when P=P0 and sells when P=P1, where P1> P0. An implication: If someone buys a share of a gedik, then he/she is in essence sharing the monopoly profits created by the guild, even without being a member. Because V(P) is a function of the guild’s ability to collect rents from the market.


24

address such crucial questions as why the institution of journeymen might have

diffused during the eighteenth century and not earlier.

An increase in the number of journeymen (per master) could have been driven by a

growing market in which guilds masters attempted to raise their profits by not

allowing a proportional increase in the number of journeymen. Yet, we have no

quantitative evidence to test this hypothesis. Faroqhi supports her argument also

by pointing out that “gediks were developed first in collective workshops, such as

dyers and tanners, where interaction between masters was much closer than in

other places and fixed rules more necessary”.51 But, there is contradicting evidence.

Above-mentioned case of collective petitioning for restriction of legitimate gedik

numbers by a group of tradesmen (not a group of craftsmen working in collective

workshops with relatively expensive capital), for instance, offers a case that does

not fit well with Faroqhi’s theory. As retailers of imported cloth, working in shops

dispersed throughout the city, alaca sellers’ demand for restriction of gedik numbers

seem to originate from their concern for increasing competition from outsiders.

The use of gediks by masters to preserve or even increase their market share is

corroborated by archival evidence presented below. But it is not necessarily the

initial or the most important, underlying cause of an expanding gedik market.

Theoretically, the gediks could even serve the existent journeymen as long as they

were used to prevent outsiders’ entry into the sector. The gedik assignment for a

particular guild would prevent entry of outsiders to the auctions designed to sell

the gedik of a deceased shop-keeper. In this way, the auctions (with limited entry)

would not drive up the price much, enabling existent guild masters or journeymen

acquire these gediks for affordable prices.

Before further elaborating on the theoretical implication of guild organization for

gedik markets, let us look at several cases in which gediks seem to have served as an

impediment to intra-guild mobility.

One of these cases concerns a group of master craftsmen in the weaving business.

In 1797/98, a group among the silk weavers (kemhacı), request abolishment of gedik

on the grounds that it was used by the wealthy guild members to prevent the poor

ones from the use of the looms (destgah) and practice of the craft (each destgah

assigned to a gedik costs 400 guruş (26.6 pound sterlings)). In other ways, the

petitioners maintained that the unequal access to capital goods originated from

51 Faroqhi (1998), p. 143.


25

economic differences among guild members and assignment of a fixed number of

gediks to highly-valued production means. For the gedik-owners, on the other

hand, these claims were unjustified. In their response, the gedik owners (who were

apparently the guild masters) maintained that there were 432 looms with officially-

assigned gediks and the number was sufficient for the consumption of the city.

They also argued that the petitioners requesting the abolishment of gedik were the

journeymen who were not yet qualified and who had already dared to establish

their own (unauthorized) looms in various locations and produce low-quality

produces.52 The court sided with the masters and decides to punish journeymen

who act against the guild rules. In a court register from 1816/17, the average price

of looms recorded in market transactions was around 1000 guruş, two and a half

times what it was fifteen years ago.

In this case, we see that the petitioners complain about the high price of gedik. This

price probably does not reflect only the price of the looms (that would be bought

and sold in a free market). The decree makes it clear that the journeymen, in spite

of regulations, could start their business in unauthorized shops, which means they

were able to acquire looms(although they might be lower quality). The reason why

the price assigned to the loom gediks was because the gedik numbers were fixed

and in this way the gediks served as an official license to practice the craft. In both

cases, by delimiting the number of looms through gedik, the masters aimed

probably not only to prevent competition (driven by an increased number of

authorized master craftsmen) but also to preserve the value of their existent gediks

(licenses) assuming that there was an active gedik market in this period.

The masters of the weavers of bürüncük (a white cloth made of crepe raw silk) also

seemed to have controlled access to bürüncük looms. In 1200 (1785/86), the guild

of the weavers was able to obtain an imperial decree specifying their exclusive

rights to practice the craft:53 Only 91 shops (each with two looms) were authorized

to practice the craft. Neither the shop, nor the loom number could be increased.

Gedik of a deceased shop-owner could only be transferred to his son (as long as he

is qualified in the craft) or to his journeymen.

52 HAT 1413/57568 (1212/1797-98): “mesfurun eğerçi kalfalarımızdan olub lakin kendü ahallerinde olmayub henüz

sanatımızda mahareti (13) ve ustalıkları ve desturları yok iken hilaf-ı emr-i ali ve mugayir-i nizam kenar mahallerde ziyade destgah

(14) ihdas ve kalb (sahte) işleriyle ibadullahın ızrar ve niza-ı memzu izmihlal içün...”

53 Sıtkı, Gedikler, p. 16. Similar restrictions apply to also weavers of other types of cloth.


26

While in these cases, masters of the guild seem to have controlled access to capital

inputs and thereby benefit from increasing value of their gediks; in other textile

sectors, there were some regulations favouring journeymen. For instance, the price

of the looms used by muslin weavers (dülbent and çine) and the looms used by a type

of silk weavers (sandal) were fixed by the government.54 Such price controls

probably aimed at preventing an increase in the price of looms that would harm

journeymen. These price controls might have induced emergence of a black

market, yet until now I haven’t found any complaints on behalf of the journeymen.

Also, in a guild that seem to be more strictly controlled by the central

administration such as kılapdancı (producers of silver or gold wire thread), masters

were probably less able to use gediks to prevent journeymen’s access to capital

goods. The emergence of standard ‘half-shares looms’ among kılabdancıs in the late

eighteenth century55 might be interpreted as way to enable increased number of

journeymen acquiring status of masters.

These various cases offer some insights and help us raise further questions to be

explored as to the causes and consequences of gedik markets. We see that gediks

could be used by masters to curb intra-guild competition. As suggested by Faroqhi,

in a sector such as this one which obviously required certain specific skills and

relatively expensive capital goods, the guild was probably more formally-organized

(implying a more hierarchical master-journeyman relationship and a more strictly

definite promotion procedure) compared to others. It is probably not only their

pecuniary interests but also the social structure that guild masters aimed to

preserve by restricting access to the capital goods through requesting a fixed

number of gediks. Accordingly in these sectors, we do not see partitioning of gediks

and sale of gedik shares to outsiders. But, we also see that whether the guild would

be successful in preventing journeymen sharing their rents depended on the sector.

Further research might help us better understand how the pre-existing guild

structure was related to the guild’s willingness and ability to set a fixed number of

gediks.

To summarize, the effect of gediks actually depended on two things:

i) whether the gedik holders were actually able to fix the number of gediks

54 Database based on İM 121 and İM 121.

55 C.BLD 15 (1808).


27

ii) whether the access to secondary market was restricted through non-economic

criteria.

If the first condition was met, the value of gediks would be higher than the value of

gediks that merely imply tenancy rights (a flexible form of icareteyn contract).

Because the market rent on the stall/license (V) would include both rents that

could be charged on the real estate and the monopolistic rents that could be raised

through commercial activity practiced in that stall/with that license. As long as the

market rents on real estate and the demand for output is rising, the value of gedik

(G) would increase. This would induce emergence of a secondary market in which

gedik owners could make profit.

This first item, however, does not itself imply ‘a stronger effect’ in terms of

barriers to entry. As long as access to secondary is not restricted, gediks (and the

presence of secondary markets) would enable outsiders to access guilds’ rents from

monopolistic privileges, which was the case in most retailing sectors. When access

to secondary markets is restricted (as was the case in textiles), this could also work

in two ways. As long as the prices of gediks were controlled and journeymen’s

access to available ones is regulated according to some objective criteria, the

journeymen would benefit from the restriction. If the price of gediks were not

controlled, and the number of journeymen were allowed to increase, masters could

profit at the expense of journeymen.

gedik’ as transferrable partnership in asset … ağır, 2012 preliminary draft, do not quote 1...

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