Trust but Keep Oversight: Ege Cansen on Capitalism, Bubbles and the Banker Kastelli Lessons

Recorded while markets were unsettled for weeks, this conversation brings economist Ege Cansen together with host Baris Esen for a discussion that moves past daily gossip toward the structure of capitalism. Cansen opens with a sharp distinction: the current fund distress is predominantly a criminal fraud case and should not be confused with system-born crises such as 1929 and 2008. The Wikipedia records on the Great Depression likewise show the 1929 collapse swelling through equity exuberance and missing regulation.

The theoretical spine is the split between national income and national wealth. Income is a flow, like running water that renews itself every day, month and year. Part of that flow is consumed and part is held back like water behind a dam, invested, and investments accumulated over years become national wealth. Ratios differ: Türkiye invests around 22 to 23 percent while China reaches 40 to 45 percent, with 25 to 30 percent the commonly cited band. A simple piece of arithmetic follows: from one year to the next, national wealth should grow roughly by the share set aside for investment.

Real life breaks that arithmetic, and Cansen says capitalism then manufactures imaginary wealth on its own. When country wealth statistics appear to double on the financial side while the invested share stands still, the difference has no material counterpart. That is the fictitious part: a balloon-like swelling that looks real but is hollow inside. As long as nobody sells, it sits on screens and everyone feels richer. Yet this only postpones the reckoning; once realization starts, prices fall fast.

The mechanism becomes concrete through an Elon Musk example. A brilliant entrepreneur is imagined selling 500 billion dollars of shares in a space-travel venture, with the stock jumping from 10 to 20 dollars within days. The cash actually committed is fixed, but the price climbs because buyers resell to each other: whoever bought at 10 sells at 12, whoever bought at 12 passes it on at 14, and everyone believes a profit was made. No new output stands behind this chain, only the same paper changing hands. When bad news lands, the price drops to 15, then 10, and the last buyer is left holding the paper; the Ponzi history compiled by YeniSafak shows this last-in-loses game has stayed identical for a century.

The decisive threshold is whether cheating occurred. Buying a security because your own analysis says it will rise is speculation and treated as normal; nobody deceived anyone and each side carries its own risk. Arranging two brokers that secretly act together, selling with one hand and buying with the other to push the price up artificially, is manipulation and it is a crime. The local slang for it is fleecing the naive: wash trades paint a rising chart, outsiders mistake it for genuine demand and jump in. Social media amplifies the fire; even those who planned to exit before the peak cannot press sell, because each rising day supplies a fresh excuse.

At this point Cansen argues that the weakest spot of capitalism is also its strongest engine. In English the pair is almost identical, capital markets and capitalism, and that is no accident. Old commodity exchanges traded wheat, sheep and grapes, tangible goods changing hands, while capital markets trade capital itself. The word bourse is recalled as descending from a Belgian family name, with the first meeting places being town squares for goods. The resulting game resembles a poker table: all four players cannot walk out as winners, the total is zero, and the house always takes its cut.

The public offering question is treated separately for that reason. The American term public corporation describes an artificial entity whose owners are anonymous and whose holders own shares rather than the firm itself. If the company fails, shareholders cannot claim money from anyone, because they shared both profit and loss. Hence any firm raising money from the public must file dossiers, disclose three years of profitability with multi-year projections, and present manager quality plus sector analysis. As AktifPortfoy guides explain, the prospectus is the constitution of the offering and no sale can proceed without regulatory approval.

The balance of freedom and oversight is tied in the sentence that gives this episode its title: trust people but never abandon supervision. Attributed to German disciplinary culture, the maxim says trust and control do not contradict but complete each other. Cansen illustrates it with a scene from a Netherlands trip in the late 1950s: flowers stood on the pavement with no vendor in sight and nobody stole them, and students credited honesty; the guide then pointed at the police station across the street and corrected the address of honesty. Oversight keeps people careful, while its absence tempts them.

On the greed side works the greater-fool assumption: everyone buys because someone else is expected to pay even more. The Sulun Osman tales of selling trams and bridges are theatrical examples of that naivety, but modern versions are far more crowded. The BBC file on Ciftlik Bank puts numbers on the table: between 2016 and 2018 more than 77,000 people contributed over 511 million lira against promises of 100 percent profit within a year. Players were told virtual animals lived on real farms, facilities and shops were opened, and in the end the chain collapsed.

The Banker Kastelli chapter is one Cansen lived through personally. Cevher Ozden held a remarkable principle: I do not market stocks, I market bonds. In other words he sold debt paper rather than equity, so even in bankruptcy a bondholder could claim a share of the liquidation. While the era capped rates at 12 percent, Kastelli handed over 100-lira paper at 80 and sold it around 85, lifting the effective yield above the ceiling. The Wikipedia records on the Bankerler Krizi speak of nearly 300,000 victims and hundreds of failed bankers; in Cansen account, Kastelli failed three times, clients principal survived the first two, and the last failure stranded Bosphorus villas in his hands.

Capitalism itself, in Cansen view, was never founded like a project but flows like a natural current. He asks what the economic system was called in ancient Egypt or Greece; people lived and exchanged, and later arrivals attached labels. The word capitalism itself was circulated by its critic: Marx, the thinker whose book is Capital, named the order organized around maximizing returns on capital in order to confront it. Capital gains meaning through its physical form in this reading; when 50 million dollars of savings become a ship, the financial magnitude materializes into a physical asset.

The idea that the economy splits in two is also rejected: the real economy and the financial economy are not separate universes but two windows onto the same one. In balance-sheet language assets show the real side and liabilities the financing side, yet the total is identical. Gross domestic product therefore means yield, crop, output; the English word product was not chosen by chance. Money in this picture is only a unit of measure, trillion-scale figures describe the gauge rather than production itself. The NurolPortfoy account of 2008 confirms the link: mortgages granted at low rates, packaged and resold, inflated the financing window, while production and jobs on the real side paid the price.

The closing measure is investment efficiency: the tool works, the hand takes pride. Roads, ports, factories and power plants enrich society when they generate more added value than the cost of the money placed in them. Competition marks capitalism while planning marks socialism; through the English pair competition and computation comes the reminder that neither has a perfect form. The China example stands for that pragmatism: the cat metaphor cares about catching mice, not about color. The current lesson follows: as much freedom as there is, that much oversight is needed, and capital markets are where the balance is first built.