The Key Indicators of Profitability in the Turkish Economy

This study analyzes the long-term accumulation and growth dynamics of the Turkish economy from 1960 to 2023 by examining the movement of the profit rate and the real mass of profit. The transition of an economy from the expansion phase to the stagnation phase is characterized by stagnation in the real mass of profit due to a long-term decline in the rate of profit. Stagnation in the mass of profit leads to prolonged stagnation in the level of investment. The paper argues that the Turkish economy experienced two long periods of expansion and stagnation, as evidenced by the long-run movement of the profit rate and the real mass of profit. The first expansionary phase began in the 1960s and lasted until the mid-1970s. From the mid-1970s onwards, the economy entered a period of crisis characterized by stagnation in the profit mass and a collapse in investment. The crisis was overcome by transforming the institutional framework of the economy. The second recession began to show symptoms in the second half of the 2010s and manifests itself in levels of the real mass of profit, investment, and employment of unproductive labor. Our study addresses whether adjusting distributional relations to the detriment of labor is enough to overcome this stagnation.