The first argument is about the relative growth in capital goods sector, especially after 2001 crisis and the positive effects of this phenomenon on the “technological development” and “labour productivity”. In this presentation I will try to analyse how much of this growth in “capital goods sector” is actually related to the growth in the production of “means of production” sector in Turkish Industry and try to understand the technological development in this perspective.

The second common argument in economics literature in Turkey is that growth in economy after 2000 has little positive effect on employment. This phenomenon is in fact a surface phenomenon (which is certainly true at first sight) concealing a deep transformation rather than explaining a fact. The deep transformation is the expansion of precarious labour forms and the changing labour relations in Turkish Industry after 2000 especially by the new Labour Act which is in fact nothing but a process of formalization of this precarious labour. Difficulties in capturing the data and analysing this precarious labour relations and unemployment in this condition is in fact another consequence of this transformation.

This presentation will try to explain and emphasize the double character of this transformation.

It is striking that, the material basis of this change in the state form (and content, however defined) is conspicuously absent in the discussions. Moreover, it seems that there are no classes and no class relations behind the apparent changes. Both parties think that somehow defined ‘social forces’ with peculiar ideologies are trying to transform the state according to ‘their’ conceptions, but they derive these conceptions with no explicit reference to classes.

In this presentation I will try to develop an alternative, materialist explanation for the trans-formation of the Turkish state. Pointing to the rapid internationalization of Turkish finance capital in the last decade, I will claim that this ‘political economy’ dimension has to be taken into account in order to understand what is happening.

In current discussions on the financialisation, it is mostly accepted that these capital inflows have only impacts on the financial structure. Whereas, these international money capitals have impacts on the productive capital. This can be understandable in the context of needs of money capital in the form of exchange.

In Turkey, 2000-01 crisis has been a turning point. And a transformation has been witnessed towards intermediate and investment goods production. In this productions structure, the needs of the money capital in the form of the exchange have been provided from the international capital inflows.

From this point, the inner connections between productive and money capital in Turkey will be main discussion of this paper.

When we look at the reflections of global crisis on Turkey through such a dual analysis, we can see that industrial production was negatively affected by the crisis and poverty and unemployment have increased as a result of this. At the same time, it will be seen that Turkish capital groups has become active figures worldwide in the crisis period and they are trying to take advantage of the new conditions.