Common Responses to Ruler Control of Land: Uses and Vakifs

The similar land regime in England and the Ottoman Empire also led to remarkably similar devices to avoid ruler control of land rights: uses in England, vakιfs in the Ottoman Empire.^{[1254] [1255]} In both cases, land was turned into an endowment founded in perpetuity that vested beneficiaries with its use.

Initially, both these legal instruments appear as instances of what North, Wallis, and Weingast in their latest major account called “per­petually lived organizations.” These are organizations “whose existence is independent of the lives of their members,” for instance corpor­ations. Their impersonality provides the foundation of “open political orders” and thereby also economic growth.^[1259] The “perpetuity” of vakιfs, however, has been tied to economic underperformance in the Ottoman context.

An explanation is required, however, as to why similar institutions, uses and vakιfs, had such divergent effects in the two cases. Such an explan­ation might also shed light on the necessary conditions for representative emergence: maybe the factors that enabled the spread of vakιfs whilst inhibiting the rise of corporations and of an open political order in the Ottoman case also account for why representation never developed. In what follows, I argue that variation in state strength accounts for these outcomes: uses failed to “immobilize” the English economy because of the higher capacity of the English crown to regulate property rights. I conclude with empirical data that confirm the weaker capacity of the Ottoman state.

Vakifs and uses responded to the restrictions on inheritance that were described in the previous section. Both legal systems constrained the freedom of a landowner to “employ the revenues of his land after his death”¹¹⁴ and imposed further burdens. The rules were substantively opposite (partible inheritance vs. primogeniture) but elicited the same response. Endowments served as “legal loopholes” exempting land from taxation, especially death duties, and circumvented the prohibition of wills.^[1261] It was not therefore the “weakness of private property rights [that] made the sacred institution of the waqf a convenient vehicle for defending wealth,” but the all-too-potent effect of Islamic protections of inheritance rights; nor was “official predation” the problem but tax duties and state regulations,^[1262] as in England.

These incentives were so strong that by “1502 it could be asserted that the greater part of the land of England was held in use.”^[1263] Much of this was through the monasteries, which held between a fifth and a quarter of the land of England.^[1264] Similarly, about three quarters of Ottoman land and buildings may have been under vakιfs - but unlike England, this lasted until the collapse of the Ottoman Empire.^[1265] Why did vakιfs prevail while uses did not “immobilize” the English economy?

One explanation of the continued prevalence of the vakιf in the Middle East sees it as a symptom of the “wealth transmission norms of Islamic society,” in contrast to “the Anglo-American norm... of distributional self-determination.” The latter is assumed to be “entirely consistent with general cultural preferences and economic theory that accentuate indi­viduality and relatively unregulated private property ownership.”¹²⁰ Similarly, Kuran has argued that vakιfs reflect a greater collectivism and “communal vision” in Islam, which was sustained due to a fear of fac­tionalism and tribalism. In the West, by contrast, the division of political power in the West among kings, emperors, and cities prevented such communalism.¹²¹

There is little that is “self-determining,” however, in the forms of landownership that dominated English society into the twentieth century, family settlements.¹²² Entails in particular bound all descendants to accept that only one heir could retain control of an estate, whilst depriving him of the right to alienate or devise by will; it aimed to preserve family wealth intact by excluding other descendants. Even when a temporal limit was attempted with the “Rule against Perpetuities” in 1682, property­holders still sought ways to circumvent that until the crippling tax duties of the twentieth century.¹²³ English property rights as a whole involved overlapping rights, creating multiple ties of dependence and entangle­ment, not the absolute private ownership postulated by some modern liberal theory: tenure consisted of “pyramidal relationships of reciprocal

obligation,” whilst estates could vest a property to different individuals for different “slices of time.”^[1266]

Kuran instead contrasts vakιfs, which were founded by individuals who determined the nature of the organization into the future, to Western corporations, which were determined by the collective will of their mem­bers. This is because the vakιf had fixed rules, whereas corporations could remake them.^[1267] If so, however, far from reflecting a “communal vision” in Islam,^[1268] they reflect greater powers of the individual in that system to define their property rights, even across time, in absolute ways.

In endowments, should the founder or later members have final say? The intuitive individualist approach is that those who generated the wealth should have it, as vakιfs stipulated. The corporation’s rules take the founder’s powers away and vest them on ever changing individuals. They therefore force the founder(s) to accept restrictions on their will in the future. It is not greater individualism that distinguishes the corporation, but greater subjection to collectively defined goals. Accepting a legal, impersonal frame requires precisely the subordin­ation of multiple individual wills - which is what allows corporations to grow in size, a feature which is crucial for economic growth and economies of scale and which was lacking in the region, as Kuran importantly emphasized (and as it still is). The empirical record sug­gests that such restrictions were possible when the general political framework could compel power-holders effectively: it is not an accident from the perspective of this account that, as Kuran notes, it was not Italy, but England and Holland that developed the business corpor­ation to its full form.¹²⁹

This conclusion is strengthened when we consider why uses did not “immobilize” the English economy, like vakιfs did in the Middle East. The answer is complex, but state intervention was key: it pushed land­holders in different directions, by generating strong social resistance. The crown passed the Statute of Uses in 1536, which curtailed their tax advan­tages.

The crown was also crucial in regulating an outgrowth of uses, trusts, which spread after 1536. Trusts managed land when its legal ownership was separated from its beneficial ownership, especially to secure inherit­ance over generations, particularly for charity and the vulnerable. But they could not so easily avoid tax duties: the Chancellor worked to identify and neutralize those trusts that posed “a financial threat.”^[1271] State capacity was therefore key in the containment of these practices, though as I have suggested and will argue further in the Conclusion, the capacity was gradually weakened from the later medieval and into the early modern periods - hence the need for radical action, such as the drastic expropriation of monastic lands examined next. Nonetheless, the “immobilization” of the Ottoman vakιf regime, by contrast, may be better seen in the light of less intrusive state action; there was no Ottoman “dissolution of the monasteries” and a class of “grandees” formed that undermined the sultan.^[1272] The reality is therefore the opposite of common assumptions, which have suggested that Ottoman rulers had the power to block self-governing units, unlike in Western Europe.^[1273]

The underlying theme in the above analysis has been the disparity in infrastructural capacity and a relative Ottoman weakness compared to England. Ottomanists, such as Rifa’at Ali Abou-El-Haj, have long warned that contemporary descriptions of despotism were “idealized fantasies” that should not be confused with reality.¹³⁴ This is supported by comparative data on tax extraction, compiled by Karaman and Pamuk.

11.3