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Economy and Constitutional Law: Indicating Main Source of Socioeconomic Inequities
Mahmut Batuhan KABUL
Faculty of Law, Bilkent University
ENG 102: English and Composition II
Matthew Llyod Gorman
13.05.2022
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Abstract
This paper will show socioeconomic status-based inequality and inequity in economics and
constitutional law. Also, in this text, why classic economy models can not satisfy the request for
honourable human life or why there is a huge part of the world living under 5.5$, but a tiny minority
controls all economy. Also, in this paper, readers can understand how capitalism consumes human life
with the trap of scarcity. This paper includes economic statistics with crime and suicide statistics to
show the relationship between socioeconomic status and the degeneration of social norms.
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Introduction
This text will indicate why most people face socioeconomic inequity when a tiny minority
controls the Gaia's economy. Some people are wealthy, and others cannot become rich, which is the
main argument of politics and economics. According to the World Bank, 9.2 percent of the world
population earns under 2$ daily (Measuring Poverty Overview, 2021). Also, that number equals
approximately 700 million. This number shows only absolute poverty, and when you include the
numbers of a person earning under 5.5$ daily, the results indicate that one of the two people is poor.
The problem of politics and economics starts here. Should the state intervene in economies to
create more job slots to decrease unemployment and stabilize the prices of goods in the market, or
should policymakers not intervene in the economy? If the state does not intervene in the economy,
policymakers have a liberal ideology and are supporters of laissez-faire. Laissez-faire is a famous name
for the liberal vision of the economy. It defines the state should provide judiciary, law enforcement
and military services, but the state cannot intervene economy. Also, in this situation, the state's
inaction can be understood as an indirect intervention of the economy to choose elites' and
corporates' rights instead of people's rights. In contrast, there are welfare or social states, which means
a government intervenes economy to protect a big partition of people such as the poor, workers,
farmers and public officers. In that situation, somebody needs to answer the questions such as which
model is more ideal than the other, why people are poor, and only a few people control the total
economy or why income distribution is unfair.
Those economic ideas also affect the law especially constitutional law. Generally, constitutions
include social and economic rights. In the constitutional law, these rights appeared after 2'nd World
War due to repair damage of war. Those actions of any state are called a social or welfare state. This
social state term and intervention created big arguments such as Keynesian economics against classical
liberal thoughts. On the other hand, the intervention in economic conflicts is the central debate
subject.
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The problem with the economy is that should we need social and fair economies, some tiny
minority will continue consuming all the Gaia's resources, and other humans will become economic
enslaved people. The answer to this question is really needed to resolve any conflicts based on
socioeconomic inequities and inequalities.
Economic Models
After the long times of human history today, the main thought of the economy is classic liberal
thought. The essential foundation of the classic economy is scarcity. Scarcity means that people have
limited sources and unlimited wants, so limited sources cannot fulfil those wants (O’Brien & Hubbard,
2017). All of the economies build upon this basement; especially it is a problematic base. The problem
of scarcity is confusing concepts of human behaviour and biological facts. When liberals created this
idea, they said that people want many things, but in reality, a person does not want those vast things.
These wantings are originated from desires, and people need to try to destroy those negative
attitudes(Baş, 2018). Seeing that this conflict is not only concerned with economics. Also, it is a part of
conflicting two main ideologies; materialism and idealism.
The second central concept is money, especially the definition of money. Money definition is
a very crucial part of creating an economic model. It is not related only to monetary policies also; it is
related to the ideological foundation of the model. If an economist wants to create an economic model,
(s)he should define money. Clarifying what money is and which functions have, answers to these
questions are really needed for creating and detecting the ideal economy model.
Keynes versus Smith
In the history of the economy, there are two main ideas. These are Adam Smith's liberal
economy and John Maynard Keynes' interventionist economy. The main conflict which is between
them is interventionism. Keynes supported that intervention of the state is needed, especially after
the big crisis like Great Depression (Gregg, 2010). He suggested that any economy cannot heal itself
after the crisis, so state intervention is needed for the recovery period after the crisis. If the state
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increases government expenditures to reach full employment degrees, the economy will recover
healthily. Also, his economic model has a mixed economy, which means that the market contains
private firms and the state. This interventionism is very well in the short-mid term, but in the long
term, it creates more problems. The problem is that in the Keynesian economy state increases its
expenditures, but these increases are funded by costly money (loans)(Baş, 2018). These loans cause
the balance of payments to deteriorate, creating another crisis.
On the other side, Adam Smith’s model only creates a problem. The first issue, Smith's idea, is
that the state does not protect people. Non-interventions create dominance of corporates and elites,
and non-interventions are indirect intervention to support elites. In that state, it becomes an evil state,
and its citizens do not love their country. Also, there is no protection means that people become slaves
to elites. Of course, in that type of state, ethics are forgotten. Smith's imagination of humans is not
having any ethics. He called this human "Homo Economicus". This human only thinks about his
interests, not thinking about nature and society. Because of this idea, today, prominent oil patrons do
not want the development of renewable green energy investments. If humanity shifts its energy
sources, oil patrons will lose profits.
These classic systems have a few problems because of monetary policies. Before defining
monetary policy, a definition of money is needed to understand monetary policy terms. Money is
defined as an item which acts as a medium of exchange, serves as a unit of account with a store of the
value function and offers a standard of deferred payment(O’Brien & Hubbard, 2017). Monetary policy
is a general name for policies aimed at protecting the value of money, fighting inflation and controlling
the supply of money. The problem with classical monetary policies is the interest rate. The interest
rate is a kind of virus that is the main reason for all kinds of economic diseases such as inflation,
deflation, and others(Baş, 2018). The problem with interest in gaining money with using money, and
this action prevents sustainable economic growth because money should be circulated among the
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society, but interest prevents this circulation. Also, interests cause recessions, unemployment and
inflation(Baş, 2018).
Turkish Economy Models
Kemalist Economy Model
The first Turkish economy model is KEM (Kemalist Economy Model), and this model is the only
long time tested Turkish economy model. KEM's basis is statism. Government should establish
factories, corporations and banks (Baş, 2018; Meydan, 2014). Also, Atatürk tried a liberal economy
from 1923-to 1929, but among the Turks, there was not any money for founding factories. When KEM
is examined, an inspector should see that great Atatürk do not take any loans to increase government
expenditures instead of the Keynesian model. Also, he founded sample farms, same as factories, to
show global imperialists that any country could produce agricultural goods with industrial goods(Baş,
2018; Meydan, 2014). The other difference between capitalist economies is that there is no
competition in the KEM, but instead of competition, there is complementarity between state
corporations and the private sector.
9 Light Doctrine’s Economy Vision
9 Light Doctrine was created by colonel Alparslan Türkeş who was the founder of the
Nationalist Movement Party (MHP)(Türkeş, 2018). His main ideas about the economy are generally the
same as other Turkish economic models: Anatolian Industrialization and social state. However, we see
a different idea in the 9 Light Doctrine. This idea is "Nation Sector", which means that workers should
own some partitions of means of production(Türkeş, 2018). An example of this idea is OYAK which is
an organization that provides better retirement conditions to army officers. All of the professional
army members are the owner of this military enterprise. In the Nation Sector, workers can be partners
of factories, companies and other production tools. So they work harder to produce more goods
because if the factory makes a profit, workers will earn higher wages.
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Fair Economic Order
Fair Economic Order is founded by Prof.Dr Necmettin Erbakan (Erbakan, 2016) is the creator
of National Vision. National Vision is a Turk-Islamic world view which aims to convene the 2nd Yalta
Conference to build ideal, fair and fix the problems opened by the first Yalta Conference. He talked
about economic problems created by capitalists. Especially his ideas support that heavy
industrialization is essential for Turkish development. He said that if any state cannot build heavy
industry or in his calling factory making factories are needed for industrialization. Also, he aimed that
create a pool system to prevent taking loans. Before the pool system, one of the profitable state
enterprises deposits its money to a private bank with a 40% interest rate. The other governmental
body needs money, so it takes a loan to the same private bank with a 150% interest rate. The problem
is state takes its own money and pays much interest. But in the pool system, this profitable state
enterprise deposits money to the state bank so another governmental body can take this money
without paying interest(Erbakan, 2016).
National Economy Model
Prof.Dr Haydar Baş creates National Economy Model. This model's main key feature is the right
of seigniorage. Seigniorage is made a profit from producing money. Currently, the only central bank
using this right is Fed, but every central bank has this right in theory. This right has a very powerful
relationship with the definition of money. According to Haydar Baş, money is an item which acts as a
medium of exchange, serves as a store of value, is an incentive to boost production with consumerism
and is the reward for labour. In the National Economy Model, the state produces money to supply
society and creates a stable economy which has not got any inflation.
An example of seigniorage right usage is a farmer who pays 1000 ₺ for one sack of wheat and seeding
that wheat. After some time, wheat is grown, so the farmer collects wheat, and now he has ten sacks.
But there is a problem in the market. There is only 1000₺, but this value equals only one sack. How
does this farmer sell nine sacks? The market needs 9000₺, and buyers should find this money. In
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traditional economics, banks give credits to the fund market, but banks give that money with interest,
and these credits create inflation. However, National Economy Model says that ,the state supplies this
9000₺ so there is no inflation. This is how seigniorage right prevents inflation. Also, using seigniorage
right gives the state more money than taxes so that those extra revenues can be used for social state
policies to finish poverty.
Also, this model shows us how imperialist capitalism exploits the resources of weak countries
by hiding behind the lie of "scarcity". Professor Haydar Baş argued that scarcity could not be true
because of the Holy Quran. In the holy Quran 18th verse of Nahl surah, great Allah said that "If you tried
to count Allah’s blessings, you would never be able to number them. Surely Allah is All-Forgiving, Most
Merciful." According to this verse, humans cannot be told any resources are limited(Baş, 2018).
Constitutional Law About Being Social State
A social state is a state which provides honourable life standards for its citizens. The function
of the social state is to find jobs for its citizens. If there are no open jobs, the social state needs to
create new work areas. Also, social states guarantee that their citizens will have a basic salary to live
without taking any credit. This basic salary is called citizenship wage. Another social policy may be
social insurance.
After WW II, most countries put socioeconomic rights in their constitutions to secure those
rights. Today people can see these rights in the constitutions. For example, France and Turkey have
very clear constitutions for those rights. According to the first article of the French Constitution and
the second article of the Turkish Constitution said that those republics are social states. So that citizens
can request the state to apply policies for fulfilling the socioeconomic rights of citizens.
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Relationship between economics and social indicators
Crime Types
2009
2019
Theft
5758
42752
Looting
1145
13300
Fraud
10822
7947
Drug production and trade
1576
19748
Drug using and buying
1029
11944
Embezzlement
65
210
Bribery
32
158
Smuggling
935
8111
Crude suicide rate
Year
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Number of
suicides
3 406
3 342
3 168
3 193
3 246
3 169
3 252
3 287
2 677
2 933
2 898
(Per hundred thousand)
4,12
4,11
3,94
4,03
4,15
4,11
4,27
4,37
3,61
4,01
4,02
Economic
2009
2019
USD
1.5293₺
5.3316₺
Gold (gram)
43 ₺
219₺
CPI
%9.5
%20.35
indicator
These statistics (TÜİK - Veri Portalı)
indicate that the country's economic status
quo directly affects crimes and degeneration.
When the economic instability increases,
some partitions of society will lose hope of
reaching a better future, and they will kill
themselves.
If any state wants to prevent any crimes and suicide economy should be stable. With an
application of social state policies, citizens of that country start to think my state father is helping me
to start again so that they will not attempt suicide or commit a crime.
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Conclusion
This research shows that there is a strong connection between economics and constitutional
law to affect socioeconomic status. Also, socioeconomic status is directly related to inequalities and
inequity among different social classes in society. To resolve economy based inequity and inequality,
states which are all around the world need to shift their view of the economy. Current applied economy
models can not solve humanity's problems because, in the capitalistic view, a capitalist only thinks
about profits. However, Turkish economy models are human-centred so that those models can provide
honourable human life and create a sustainable ecosystem.
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Resources
Baş, H. (2018). Milli Ekonomi Modeli:sosyal devlet milli devlet. İcmal yayıncılık.
Erbakan, N. (2016). DAVAM (Vol. 7). Milli Gazete.
Gregg, S. (2010). Smith versus Keynes: Economics and Political Economy in the Post-Crisis Era.
Harvard Journal of Law & Public Policy, 33(2), 443–464.
Measuring Poverty Overview. (2021, May 16).
https://www.worldbank.org/en/topic/measuringpoverty#1
Meydan, S. (2014). Akl-ı Kemal : Atatürk’ün akıllı projeleri (Vols. 1–5). İnkılap Kitabevi.
O’Brien, A. P., & Hubbard, R. G. (2017). Economics (Vol. 6). Pearson.
https://eds.s.ebscohost.com/eds/detail/detail?vid=9&sid=6023f72a-b272-4831-aa546d18a664cc17%40redis&bdata=JnNpdGU9ZWRzLWxpdmU%3d#AN=bilk.1388468&db=cat0004
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TÜİK - Veri Portalı. (n.d.). Retrieved May 13, 2022, from https://data.tuik.gov.tr/
Türkeş, A. (2018). Dava. Kamer Yayınları.