10 MIDDLE EAST REPORT 288 ■ FALL 2018 Yahya M. Madra teaches economics at Drew University, Madison NJ and is a co-editor of Rethinking Marxism: A Journal of Economics, Culture and Society. Crisis of Capitalism, Crisis of the Republic Yahya M. Madra T oday, the crisis of Turkey is both a crisis of capitalism and a crisis of the Republic. To the extent that it is a crisis of capitalism, of a fnancial- ized regime of accumulation, its own internal business cycles are synchronous with the cycles of global capitalism. Even though the current economic crisis takes the form of stagfation (a high infation rate combined with recession), its driving factor is the increased default risk of the highly-leveraged corporate sector. Te Justice and Development Party (AKP), governing an economy fully-integrated to the international fnancial system since 2002, enjoyed the benefts of global liquidity as it consolidated its hege- mony. Today, as the crisis hits corporations and households alike, Turkish President Recep Tayyip Erdoğan and the AKP resort to anti-imperialist jargon to pass the proverbial buck, and cover up their helplessness in the face of the vast scope of the crisis. At frst glance, Turkey’s crisis has manifested itself as a currency crisis resulting from capital fight. A deeper look identifes Erdoğan and his quixotic fght with the so-called “interest-rate lobby” as the culprit behind Turkey’s currency meltdown. A still deeper examination identifes the ofender as Erdoğan’s increasingly dirigiste (state directed) deforma- tion of the country’s fnancial system, originally established in response to the Turkish economic crisis of 2001 by Kemal Derviş, then a senior economist at the World Bank. Te economist Daron Acemoğlu, for example, explains this crisis as a product of “the decline of economic and political The business and financial district of Levent, Istanbul. MURAD SEZER/REUTERS