Investing in Debt and Violence: Tax Farming Economies in Late Ottoman Basra

Tax farming was a key element of the revenue-generation strategies of many early-modern states. But what happened to tax-farming in the nineteenth and twentieth centuries? The Ottoman Empire continued to rely on tax-farmers into the early twentieth century, tinkering with the legal infrastructure surrounding tax farms as part of a broader project of order and re-ordering. This paper traces the investment strategies of Basra grain and weapons merchant ‘Abd al-Qadir al-Khudayri, who used tax-farm guarantees to transform the paddy-rice economy of the lower Tigris river. In doing so, al-Khudayri and other guarantor-investors partnered with the tax-farmers, most of whom were tribal shaykhs. As tax-farm prices spiraled upwards, especially after 1900, guarantee loans pushed many shaykhs deep into debt. To defend their access to resources, and especially to land, tax-farmers looked again to merchants, and especially to al-Khudayri, a notorious weapons smuggler. Al-Khudayri kept shaykh/tax-farmers in debt and dependent upon his financing through weapons sales and financing for private militias. The first part of this paper traces how al-Khudayri took advantage of changing tax-farm regulations through new kinds of futures contracts, referred to locally as “paddy-rice contracts.” This allowed him to export enormous quantities of grain, both legally and illegally. The second part of the paper focuses on how al-Khudayri supplemented his grain-trading with the weapons business. I show how the capitalization of tax-farms through guarantees was bound up with an intensification of violence in the region. Ottoman and foreign observers coded that violence as “tribal,” but it was deeply linked to new forms and landscapes of accumulation. Ultimately, I argue, imperial re-ordering underlay a new political economy of disorder in southern Iraq.