The rise and demise of gedik markets in Istanbul, 1750–1860

Using new evidence uncovered from Istanbul court records, this paper shows that Ottoman markets were capable of spontaneous financial innovation before the introduction of modern financial instruments. At the same time, however, it demonstrates that the impact and sustainability of these innovations depended on the underlying political equilibrium. Gediks—entitlements to usufruct rights over the factors of production used in urban commercial and industrial activity—gradually transformed into liquid assets during the late eighteenth century. This transformation was enabled by the coercive power of Janissary†infiltrated guilds in response to the financial needs of small†and medium†scale actors operating within the confines of the domestic economy. The entry barriers, which enabled gedik markets to exist in the first place, also limited their use for growth†promoting purposes and thus set them apart from similar financial instruments that emerged in the West. Gedik markets disappeared as the Janissary–guild coalition declined and better financial instruments emerged during the mid†nineteenth century.