Chapter II. Brief Historical Overview of the Development of Greek Capitalism

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It is beyond the scope of this essay to give a comprehensive analysis of the history of Greece since its independence from the Ottoman Empire in the early 19th century. [1] Instead we will focus on the development of Greek capitalism so that we can elaborate its specific features.


II.1 The Emergence of the Greek Bourgeoisie under the Ottoman Empire and the Struggle for National Independence


Given the centuries-long occupation by the Ottoman Empire, the peoples of the Balkans began their national and modern development much later than most Western European countries. Among the Balkan peoples, Greece and Serbia were the first who took up the struggle for liberation against Ottoman rule in the early 19th century.

In this effort the Greeks had certain advantages which helped them to achieve independence earlier than most Balkan peoples. Trade in the Ottoman Empire, whose economy was characterized by what Marx called the “Asiatic Mode of Production,” became dominated by non-Muslim people. [2] This process already started in the fifteenth and sixteenth centuries. Gradually the Greeks (and to a lesser extent, the Jews and the Armenians) managed to control most of the internal and external trade of the empire and provided many members of the Ottoman state administration and diplomatic corps. (These influential and wealthy Greek families became known as “Phanariotes.”) [3]

This development is reflected by the fact that, as late as 1912, out of 112 bankers and bank managers in the Ottoman Empire only one was a Muslim Turk. In industry, it has been estimated that only 15% of capital belonged to Turks. According to the Soviet scholar O. G. Indzhikyan, the ethnic composition in business was as follows (see Table 1).


Table 1: Ethnic Composition of Business in the Ottoman Empire by Percent (1912) [4]

                                                        Turks                     Greeks                   Armenians                           Others

Internal trade                                      15                           43                           23                                           19

Industry and crafts                              12                           49                           30                                           10

Professions                                         14                           44                           22                                           20


Hence we saw “the emergence in the course of the eighteenth century of an entrepreneurial, widely dispersed and preposterous mercantile class whose activities were as much based outside as within the Ottoman domains.” [5] As a result Greek became the lingua franca of Balkan commerce. This mercantile bourgeoisie built communities in the Greek Diaspora in Cairo, Alexandria, and Istanbul as well as in major commercial centers of the Russian Empire, in Trieste, Naples, Marseilles, Amsterdam, Antwerp, London, Liverpool and Paris. Over 80,000 Greek families, for example, resided in the Austro-Hungarian Empire. [6]

The rise of the Greek merchants was assisted by the fact that, during the French revolutionary and Napoleonic Wars 1792-1815, the British and the French virtually destroyed each other’s merchant marine in the Mediterranean. The Greek shipping traders stepped into the vacuum thus created and achieved a monopolistic position.

As a result, this Greek mercantile bourgeoisie played a leading role, together with intellectuals and professionals trained abroad, in awakening and spreading a national consciousness – combined with Western culture – among the Greek people. In 1814, Greek merchants in Odessa founded the secret revolutionary organization Philike Hetairia (Society of Friends). They also provided material support for the popular uprising against Ottoman domination which led to the Greek War of Independence from 1821 to 1829. It was this new merchant class which – together with the impoverished peasantry who were suffering from small land holdings [7] – was the decisive force in the national liberation struggle. The traditional Greek elite, i.e., the high clergy and the big landowners, had a greater stake in the status quo and hence were much more lukewarm vis-a-vis the revolution. The majority of them joined the struggle only after they realized that the nationalist movement was irreversible. [8]

The Greek War of Independence evoked great enthusiasm and won the wholehearted support of revolutionists and liberals throughout Europe, for whom the English poet Lord Byron became a famous symbol. However, the European Great Powers had an ambivalent attitude to this popular uprising. On one hand they had an interest in weakening the Ottoman Empire as a rival. On the other hand, they were also interested in maintaining stability and not igniting the entire Balkan Peninsula. As a result England, France and Russia (as well as Mehmet Ali of Egypt) intervened on different sides of the conflict. Finally, they pressed to bring the liberation war to a close and came to an agreement with the Sultan in 1829. [9] This agreement recognized a small independent Greece, only a fraction of present-day Greece, with a population of no more than 800,000, representing less than one-third of the 2.5 million Greek inhabitants of the Ottoman Empire.


II.2 Greece after the War of Independence (1821-29) until 1922


However, the Great Powers made certain from the start that Greece became only formally independent while in fact it remained a dependent country, i.e., a semi-colony. The Great Powers forced the new state to become a monarchy with the 17 years old Bavarian prince (!), Otto von Wittelsbach, at its head. After several uprisings he was eventually dethroned in 1862 and a year later was replaced by Prince Wilhelm of Denmark, also 17 years of age upon assuming the throne.

Greece’s utter subservience to the Great Powers was also reflected in the Treaty of 1864 which expressly laid down that any one of the three signatory powers (England, France and Russia) might send troops into Greek territory with the consent of the other two signatories, while the consent of Greece itself was not necessary.

Furthermore, the Ionian Islands on the western coast of Greece, home to a number of large shipping magnates, constituted “a sovereign state under the protection of the British crown” until London formally handed them over to Greece in 1864. [10]

Greece’s financial situation was desperate from the beginning. The long war with the Turks left the Greeks with huge debts to British banks. Greece had to ask for another loan which it received in 1833. However, this debt only increased the pressure on the state to impose oppressive taxes on the peasantry, many of whom chose to flee to the hill country. Brigandage, which has a long history throughout the Balkans, once more took on serious proportions. Given the weakness of the domestic bourgeoisie and the lack of foreign investment, the Greek state relied heavily on foreign capital – mostly in the form of loans – for the financing of basic infrastructure projects (harbors, roads and rail networks). From 1879 to 1893 alone, Greece imported foreign loans and investment worth about 750 million Gold-Francs. [11]

Naturally this exacerbated Greece’s debt and the country’s inability to pay back its loans resulted in increasing annual budget deficits and finally an official declaration of national bankruptcy in 1893.

According to the Greek historian Giannes Koliopoulos, the country’s debt exploded: “Between 1876 and 1884 the national debt doubled. Three years later it had quadrupled and, by 1893, it was seven times the amount it had been 17 years earlier.[12]

After Greece lost its war with Turkey, sparked by a national uprising of the Greek population on Crete in 1896, it had to pay extraordinarily high indemnities. Consequently, in 1898 the country was brought under the control of the so-called “International Control Commission“ (the name was later changed to the International Finance Commission). Greece was stripped of its sovereign powers by the “protecting powers.” The International Finance Commission virtually took charge of Greek finances and guaranteed re-payment of the country’s debt. Crete, whose national revolution led to the Greek-Turkish war, was put under international control, with the island divided into British, French, Russian and Italian spheres.

Greeks dependency on the British Empire was also increased by the specific character of the Greek bourgeoisie. As already mentioned, the Greek capitalists were mainly traders among whom the shipping magnates were the most important. Thus, they were not interested in investing their capital in building a domestic industry with the result that the process of capital accumulation in Greece progressed very slowly and was primarily dominated by foreign capital. Many of the Greek capitalists did not reside in Greece but rather abroad in Europe, Russia or the Middle East. As a result, the Greek population was extremely dependent on the support of the Great Powers.

The Trotskyist Fourth International correctly commented on Greece’s history after achieving independence: “In truth, its independence was largely fictitious. It was in reality a semi- colony of Britain, France and Russia, forced to tolerate the rule of a foreign prince imposed upon it by its bond-holding "liberators" or as they dubbed themselves in those days, the 'Protecting Powers.’ The history of Greece epitomizes the fate of all the Balkan peoples as indeed of all small nations — the impossibility for small nations to achieve under capitalism real independence, as distinguished from formal political independence.[13]

This dependency on foreign powers went hand in hand with the persistent backwardness of the Greek economy for which there were a number of important facets. First, as just indicated, Greek merchants hardly invested at home, with the result that only relatively few industrial enterprises existed in the country by the 1920s. In fact, by 1917 there were still only 35,500 industrial workers in the country. [14]

Related to this lack of wide scale industrialization, the Greek economy remained largely dominated by agriculture for the most part of the period until World War II. In 1907, for example, the share of the rural population was 77%.

In large parts of Greece, petty ownership in the agricultural sector predominated. The only exceptions were in the provinces of Thessaly, Macedonia and Thrace. Compared with other countries, Greece’s large landowning class was not very large. Nevertheless at the beginning of World War I, about 35% of all arable land was still owned by big landowners. [15]

At the same time, agricultural production was strongly orientated towards external markets. As such, it had a high degree of specialization virtually bordering on being a monoculture, with raisins and tobacco being the two main export products.

In short, production, even in small farms, was primarily for the overseas market. This also resulted in a relatively rapid monetarization of the economy, especially once the payment of taxes in cash was introduced.

Greece’s important commercial sector was strongly linked to agriculture. In fact, these two branches of the economy depended on each other since agricultural products were the only commodities which the merchants could trade while, at the same time, the peasants needed the merchants to sell their products.

As a result Greece remained a dependent capitalist country was and became one of the most backward in Europe. As we can see in Table 2, its level of industrialization was – other than Bulgaria – the lowest in Europe.


Table 2: Relative GDP per capita (column A) and relative levels of industrialization (column B) in 1913 [16]

Country                A             B                                             Country                A             B

Britain                   100         100                                         Ireland                  60          

Belgium                83           77                                           Italy                       52           23

France                   81           51                                           Spain                     48           19

Switzerland            81           75                                           Finland                 46           18

Denmark               80           29                                           Hungary              41          

Germany              77           74                                           Greece                  38           9

Netherlands           75           23                                           Portugal               35           12

Sweden                 71           58                                           Bulgaria               32           9

Norway                68           26                                           Russia                   29           17

Austria                 62           29


Nicos Mouzelis, a progressive Greek sociologist and historian, points out that both agriculture and industry had hardly any large enterprises: “In the nineteenth century, despite the country's full integration into the world market system, Greece was still a pre-capitalist social formation. Both in agriculture and in industry, capitalist enterprises— i.e. economic units using a relatively large number of wage labourers —were virtually non-existent.[17]

While a small group of oligarchic families (the so-called tzakia) and capitalists were able to enrich themselves despite the country’s backward economy, the mass of the population lived in dire poverty. According to official statistics, 72% of the total population was classified as “have-nots,” i.e., they possessed neither a piece of land nor a small enterprise. Given the fact that wage laborers constituted only a small minority of the working populace, it is evident that rural poverty was widespread.

It is therefore hardly surprising that many Greeks immigrated abroad – particularly to the United States. It is estimated that during the period 1890-1914 almost a sixth of Greece’s population emigrated. [18]

Another facet of Greece’s backwardness was the fact that the majority of its population lived in villages – a fact which changed only slowly. According to the first census (conducted in 1861) 74% of adult men were agriculturalists who earned their livelihood by working the land. By 1920 this figure had barely changed (70%). Similarly, in 1920 almost 52% of the entire population lived in villages of less than 1,000 individuals. [19]

During this same year, 17.6% of the Greek population lived in cities of 20,000 and 12.6% inhabited cities of 100,000 or more. (By way of comparison, the figures for urban dwellers in Chile for the same period were 32.7% and 27.1%, respectively, while in Argentina 27.1% of the population lived in cities of 100,000 in 1920.) [20]

Regardless of this overall slow urban growth, Athens grew into a huge city of 453,000 people (1920) and became even larger when 1.5 million refugees from Asia Minor arrived in Greece after 1922.

Another important characteristic of independent capitalist Greece is the enormous role played by the state apparatus. During the 1870s, the number of civil servants per 10,000 of the population was approximately seven times higher than in the United Kingdom! [21] Such a monstrous administrative glut was necessary to keep this backward society together, to maintain an army which would be needed for Greece’s expansionist plans, as well as to facilitate mobilizing resources for modernization. Furthermore, the state apparatus could provide employment for many of those who were leaving the countryside and could not otherwise be absorbed considering Greece’s hardly existing industry. Naturally, such an overblown state apparatus ensured relative autonomy for the political superstructure in relation to the economic base.

Nevertheless, Greece was not a stagnant society and its integration in the world market ensured that capitalism also progressed in the country. Slowly, the capitalist class and the newly emerging middle class strengthened their influence. In the aftermath of the revolutionary events in Turkey by the Turkish Committee of Union and Progress (Young Turk Movement), a constitutional government was created in Greece in 1909 under threat of a military coup. This brought Eleftherios Venizelos, a Greek liberal nationalist from Crete, to power. He founded the Liberal Party, an authentic party of Greek capitalism, and dominated Greek politics for the next two decades.

Venizelos initiated a number of reforms which led to a certain modernization of the country. This included the rationalization of the state administration, the development of financial institutions, and the abolition of the last remaining feudal estates in Thessaly. Education was made free, compulsory and universal. A new public works program of road and railway construction was begun. In addition, Venizelos also initiated the modernization of the army and navy with the help of the British and French imperialists.

The decades of Venizelos rule represented a change in the class basis of the political system, since both the old oligarchy and the Crown were weakened while a strengthened capitalist class as well as a new middle class became central players in Greece’s political system. In that sense one can agree with Nicos Mouzelis’ characterization of “the long transition period from pre-capitalism to capitalism (1880-1920)” and the “bourgeois transformation of Greek society” during this period. [22]

Venizelos also tried to realize the so-called Megáli Idéa (“Great Idea”) – the project of territorial expansion in order to unite all Greeks in a single state (which however also included the occupation and oppression of non-Greek peoples) and to establish the country as a regional imperialist power. He was quite successful in this for some time as he enlarged the Greek state in two victorious Balkan Wars in 1912/13 so that it thereafter had 5 million people, more than six times larger than its original population. Greece now included Crete, most of the Aegean islands, Epirus, Thessaly and even parts of Macedonia (see Map 1).


Map 1: The consecutive territorial enlargements of Greece [23]




However, Greece’s expansionist plans ended in a disaster in 1922/23 after Venizelos had agreed to send his army – as mercenaries for British imperialism – both against the Soviet Union as well as into Asia Minor against the new Turkish state under Kemal Atatürk. Greece lost this war and had to agree to a reactionary treaty which included the exchange of populations (around 1.5 million Anatolian Greeks and 500,000 Muslims in Greece). At the end of Venizelos’ adventure Greece was exhausted and humiliated and more in debt than ever. The Megáli Idéa (“Great Idea”) had achieved a pathetic end.

The Fourth International summarized the state of Greece at that time quiet rightly: “Greecewas utterly ruined. The country had been at war almost uninterruptedly for ten years. It was hopelessly in bankruptcy. The national debt had grown to fantastic proportions. The drachma was worthless. The poverty-stricken country of 6 million people was suddenly inundated by the arrival of one and a half million homeless, starving refugees. So ended the great "adventure" of the Greek capitalists.[24]

We can summarize the first century of Greece’s existence as an independent state as follows: The Greek struggle for national independence was thoroughly progressive. However it ended with semi-independence for a small fraction of the Greek people. From the first the newly born Greek state was severely dependent on the Great Powers – Britain, France and Russia – both politically and economically. The Great Powers installed a monarchy headed by foreign kings upon the Greek people. The country’s great debt bankrupted the state and an International Finance Commission took charge of Greek finances.

In addition, the Greek bourgeoisie was dominated by merchants and didn’t focus on developing domestic industry. Hence the country remained backward: its economy was characterized by smallholder agriculture production and commerce and dominated by a few oligarchical families closely linked with the Great Powers; its political system was characterized by a monstrous state apparatus with a rotten monarchy at the top.

The Venizelos-period ensured a certain degree of modernization, both politically and economically, as well as Greece’s gradual territorial expansion. But Greece remained trapped in its dependency on the Great Powers and foreign capital. And Venizelos’ adventure in offering his army as foot soldiers for British imperialism against Soviet Russia and Turkey resulted in a national catastrophe. The defeat at the hands of Turkey caused the inflow of about a million and a half Greek refugees and the state was more in debt than ever.

Nicos Mouzelis accurately describes the structural weakness of the Greek bourgeoisie:

Historically, Greek capitalism pre-dated independence. It was not created under the colonial tutelage of the western powers. Although relatively small by international standards, the Greek diaspora bourgeoisie, by exploiting inter-imperialist rivalries and playing the role of intermediary between metropolitan and colonial centres, managed to master formidable financial resources, some of which were channelled into mainland Greece. However, given its cosmopolitan and mercantile character, as well as the weakness of the indigenous bourgeoisie, these resources contributed to the development of a top-heavy state and a parasitic tertiary sector, geared to support a mercantile and finance capital, rather than to the development of industry and agriculture. Both the autochthonous and diaspora bourgeoisies, given their position in the international division of labour, failed to overcome their merchant character. This disabled them from making an effective contribution to the industrialization of Greece.[25]


II.3 Excurse: Greek Chauvinism and the Macedonian Question


The conquest of Aegean Macedonia is particularly important since it was not a territory with a Greek majority population. (See Map 2)


Map 2: Geographical Macedonia and Present Day State Boundaries [26]



While the exact figures for the ethnic composition of Aegean Macedonia before its annexation by Greece are highly disputed, it is clear that the region had rather a mixed, multi-national and multi-religious population. It is likewise easy to demonstrate that large parts of Southern Macedonia, i.e., the region which Greece annexed in 1913, were not predominately populated by Greeks. (See Maps 3 and 4 and compare them with the geographical area of Aegean Macedonia as viewed in Map 2.)


Map 3: Ethical Composition of the Southern Balkans [27]




Map 4: Ethnical Composition of the Southern Balkans [28]




According to an Ottoman census for all Macedonia from 1906, within the province lived 1,150,000 Muslims, 627,000 Bulgarian Orthodox, and 623,000 Greek Orthodox. Even if all Greek Orthodox were Greek, which is unlikely, clearly they were a minority. On the other hand, Muslims were not just Turks since a large percentage were Muslim Slavs. [29]

Another detailed source gives the following numbers for the ethnic composition of the population in Aegean Macedonia just before the Balkan Wars: 326,426 Macedonians, 40,921 Muslim Macedonians (Pomaks), 289,973 Turks, 4240 Christian Turks, 240,019 Greeks, 13,753 Muslim Greeks, 5,584 Muslim Albanians, 3,291 Christian Albanians, 45,457 Vlahs, 3500 Muslim Vlahs, 59,560 Jews, 29,803 Gypsies, 2112 Cherkez (Mongols), and 8,100 others. [30]

Human Rights Watch gives the following account: “Before World War I, Macedonians were the largest ethnic group in Aegean Macedonia, but between 1913 and 1926 major population shifts significantly changed the demographic make-up of the region. After the region's incorporation into the Greek state in 1913, many Greek civil servants, teachers and military personnel moved north and settled there. Moreover, during the post-Balkan Wars period, thousands of Macedonians and Serbs voluntarily left Greek Macedonia for Bulgaria; the Minority Rights Group puts the number at about 15,000. After the Greek-Bulgarian convention of November 1919, between 52,000 and 72,000 additional Slavs left for Bulgaria. Simultaneously, hundreds of thousands of Greeks from Turkey, Bulgaria and Vardar Macedonia were resettled in northern Greece; estimates of the numbers involved range from 500,000 to 618,000. Thus the ethnic character of Aegean Macedonia changed greatly; Macedonians became a numerical minority, and the number of people in Aegean Macedonia who had "a sense of Greek national identity," rather than Macedonian identity, increased substantially.[31]

Even the Greek historians Koliopoulos and Veremis are forced to report that, out of the 160,000 persons living in Thessaloniki, the capital of Aegean Macedonia, “50,000 were Balkan Christians (predominantly Greek), 61,500 Jews, and 45,000 Muslims while the rest were West Europeans as well as persons belonging to various other nationalities.[32] In other words, while the Greek authors (suspiciously) claim most “Balkan Christians” to have been Greek, they nevertheless have to admit that they constituted only 31% of Thessaloniki’s population.

Immediately after the occupation, the Greek government started to systematically expel the Macedonians. At the same time, they settled ethnic Greeks in this region in order to change the ethnic composition in their favor.

Koliopoulos and Veremis report: Between the end of the Balkan wars and the beginning of the First World War, some 130,000 Greeks settled in Macedonia, 20,000 in the Aegean Islands, and 30,000 on the Greek mainland. During the same period Turkey received approximately 122,665 Muslim refugees.[33]

The Greeks “burned Kukuš, the centre of Bulgar politics and culture, as well as much of Serres and Drama. Bulgarian (including the Macedonian dialects) was prohibited, and its surreptitious use, whenever detected, was ridiculed or punished.” [34]

Part of this “Hellenization” propaganda is the policy to deny a specific (Slavic) Macedonian identity. (The same is true, by the way, for Serbian and Bulgarian chauvinists). Hence the Macedonians are usually named “Bulgarians.” Hence, until today the Greek government has consistently denied the existence of a Macedonian minority in northern Greece and has adopted a policy of forced assimilation toward the Slavic-speaking inhabitants of Greek Macedonia. After 1913, all Slavic personal and place names were Hellenized and all evidence of the existence of Slavic literacy was destroyed.

As a matter of fact, a Macedonian nation emerged in the later 19th century and fought for its independence for many decades – most famously in the Ilinden Uprising in 1903. The vanguard organization of the Macedonian national liberation struggle was the petty-bourgeois nationalist Vatreshna Makedonska Revolyutsionna Organizatsiya (VMRO, Internal Macedonian Revolutionary Organization) which fought for an autonomous Macedonia as part of a Balkan federation. The VRMO split in the 1920s and one wing became close with the Communist International.

In short, the Greek government undertook a massive and brutal campaign to ethnically clean as much as possible Aegean Macedonia of all non-Greek peoples and to “Hellenize” it by resettling Greek refugees in this region. Tens of thousands fled to Bulgaria after the annexation of Aegean Macedonia to Greece in 1913. After World War I, another 220,000 fled from Aegean Macedonia and Thrace to Bulgaria. In the 1920s, another 66,000 Macedonians fled to Bulgaria. However despite this campaign of ethnic cleansing, according to official Greek figures, 162,500 Macedonians still lived in Aegean Macedonia in 1925. [35]

In the 1920s, the government continued its policy of systematic “Hellenization” of Aegean Macedonia and expelled more Macedonians. “In the mid-1920s, Greece expelled about 53,000 Bulgarians from Greek Thrace and Macedonia in order to make room for 638,000 Greek refugees from the littoral of Asia Minor. Henceforth 89% of the population of Greek Macedonia consisted of Greeks while Greek Thrace was virtually cleared of Bulgarians. [36]

Hence we see that gradually the Greek ruling class succeeded in its chauvinistic program of expelling the original Slavic population. Similarly, in the 1920s it expelled the Muslim Greek Vallahades from the western part of Aegean Macedonia. Consequently, today most of the native Muslim minority in Greece (i.e., with the exception of the recently arrived Muslim migrants) resides in the Greek region of Thrace. Since the 1920s some 250,000 Muslims were forced to leave western Thrace. [37] About half of the remaining 110,000 native Muslim minority are of Turkish ethnic origin, with 35% Pomaks and the remaining 15% Roma.

Finally, the Greek ruling class expelled another wave of Macedonians in the wake of the counter-revolutionary defeat of the Greek communists in the civil war of 1946–49. Koliopoulos and Veremis report that between 200,000 and 300,000 people fled the country in 1947, and eventually over 700,000 had left Greece by 1949. This was nearly 10 percent of Greece’s population. Among them were many Macedonians, given their disproportionally large support for the communist insurgency. [38]

The brutal oppression and policy of forced assimilation of the Macedonians continue until today. The Greek state still does not officially recognize them as a minority. Macedonian as well as far left activists raising the Macedonian issue have been repeatedly persecuted and imprisoned.

Due to their oppression, the number of the Macedonians has drastically declined. There are widely differing accounts about the current number of Macedonians in northern Greece. The Greek authorities give no numbers. According to the US Department of State, there are between 20,000 and 50,000 Macedonian-speaking people in northern Greece. And the Republic of Macedonia has set the figure at between 230,000 and 270,000 for 1993. [39]

The reactionary character of Greek chauvinism went so far that Athens refuses to recognize the very name of the Republic of Macedonia which emerged after the collapse of Yugoslavia in 1991. Under the arch-nationalistic slogan "Macedonia is Greek" nearly all political parties, the media, the Orthodox Church etc. mobilized two rallies in 1992 and 1994 with hundreds of thousands of participants. [40] Furthermore Athens denied the Macedonian Republic the use of the Star of Vergina in its official flag (and in fact the Macedonian government had to give in and changed its official flag in 1995.) Greece even imposed an embargo against the Republic of Macedonia in the mid-1990s.

As a result, Macedonian organizations continue to fight against the oppression. “Macedonian human rights groups seek recognition by the Greek government of the existence of a Macedonian minority in Greece. They are working to end discrimination against Macedonians in Greece in the fields of education and employment, as well as in other areas of social, cultural, and political life. They want Macedonians in Greece to have the right to attend church services in Macedonian, to receive their primary and secondary education in Macedonian, and to publish newspapers and broadcast radio and television programs in Macedonian. They also want the right to establish Macedonian cultural organizations, such as the Center for Macedonian Culture, which was formed in Florina in 1984. Four Greek court decisions, however, have refused to grant the Center for Macedonian Culture legal recognition on the grounds that its purpose is to promote the idea of the existence of a Macedonian minority in Greece, an activity which was contrary to the national interests of Greece and therefore illegal.” [41]


II.4 Greece as a Backward Capitalist Country between the Two World Wars


The period between the two world wars brought some important changes to Greek capitalism. The inflow of 1.5 million Greek refugees – in a country which previously had a total population of 5.5 million – had a huge impact. It provided the Greek capitalists with a new source of cheap labor. At the same time many of these refugees were quite skilled often having been professionals, merchants, industrial workers, etc. in Asia Minor and eastern Thrace, their former homes.

In addition, many people moved from the countryside to the cities. Greater Athens (including the nearby port city of Piraeus) grew from 453,000 people (1920) to 1,124,109 people (1940). During the same period, the population of Thessaloniki increased from 174,390 to 278,145.

The supply of cheap, skilled labor and the decline of traditional trade stimulated the first significant accumulation of capital in the manufacturing sector. Investments were directed into labor-intensive industries: textiles, leather, food processing, ship repairs, and printing. At the same time, the state made the first systematic attempts to promote manufacturing through the implementation of protectionist measures (e.g., imposition of tariffs and control of commercial transactions). As a result, a small industrial proletariat emerged. In 1928, 15% of the labor force was employed in the industrial sector. All in all, the industrial working class grew from 35,500 (1917) to 140,000 (1938).