Chapter 3: The evolution of the capital market and financial reporting in Greece: a historical
3.2 Dependency theories and the position of Greece in the imperialist chain
Classical Marxist theories on imperialism, written in the middle of First World War including the works of Lenin (1917), Bukharin (1972) and Luxemburg (1963) drew different conclusions (for an overview of the theories and a critical discussion see Harman, 2009).
However, their theoretical analyses directly linked militarist and colonialist policies with a new phase marked by the concentration and centralisation of capital leading to the emergence of large capitalist enterprises, monopolies (trusts, cartels, and joint-stock companies) targeting global competition. The nation state has a dynamic role in the international economic competitive arena.
In the two decades following the WWII, the great colonial empires declined, independent nation states emerged in former colonial countries and the capitalist market developed swiftly. The global economic system entered a period of thirty golden years of capitalist expansion. For the many countries that were either independent or former colonies, it soon became obvious that this new phase meant poverty for the majority, as political regimes were tied to the imperialist powers, primarily the US. A number of Marxist and radical non- Marxist intellectuals drew on Lenin's analysis to interpret this new situation, suggesting the different theories of dependency which offered the theoretical arsenal in a series of anti- imperialist and left movements worldwide (see Papadatos-Anagnostopoulos, 2009).
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In general, dependency theories report that the world’s system is divided into the centre and a periphery, even though terminology may vary.31 Dependency theories support the view that companies and regulatory systems from developed countries are entering less developed states to integrate them into the capitalist system, perpetuating dependence through politics, economics, culture and so on (Frank, 1969, 1978; Amin, 1974, 1976, 1977; Wallerstein, 1979). Dependent countries provide natural resources and labour, leading to dependency, whilst attempts to resist result in economic sanctions and military force that is exercised by developed capitalism. Imperialism, in the sense of political and military dominance has a lesser role in dependency theories.
However, distinct from the colonialist period of capitalism, imperialist competition is impelled by the pursuit of dividing spheres of influence, to enable the expansion of capital.
According to this view, the global economic system functions on the basis of the law of uneven and combined development constituting a pyramid of power hierarchy, with capitalist countries at different stages of development ranked differently (Brewer, 1990). Capitalist countries at different development stages are not divided by fixed and strict boundaries, but operate interdependently through unequal relations, meaning that they can also make moves towards becoming imperialist, through structural changes32. However, dependency theories failed, at a general level, to address the increased industrialisation of the periphery after WWII, or the unevenness of capitalist development in the Third World. Hence, theories of sub-imperialism, which could not be satisfactorily explained by the dependency theories, attempted to explain the changes taking place in the post-war system (Rowthorn, 1971).
These theories attempted to outline how specific capitalisms took their place in the pyramid of the imperialist-capitalist system by taking advantage of the onset of the internationalisation of capital in the context of the post-WWII boom period.
The concept of sub-imperialism describes the position of medium-level developed states that do not belong to the group of the most powerful countries and so have less influence on the global agenda. Nonetheless, sub-imperialist countries also develop expansionist strategies and policies in their region, along with the more powerful imperialist powers, enabling them to be at the centre of regional power. This situation, consequently, provides the objective
31 For example, other terms include the metropolis and the satellites (e.g. Frank, 1978).
32 Historical records since the midst of 20th century confirm that countries (like India or Brazil), that were not formerly assumed to be capitalist, have adopted economic and political reforms that have accomplished considerable economic development, and some of them have even become regional powers.
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basis for rivalry between countries of similar status in the same region (Brewer, 1990). The dependence of a sub-imperialist country on imperialist countries is not secure, and those countries that reach the level of regional powers can develop relations with imperialist powers or choose to defy them and focus on their own interests.
3.2.2 The role of Greece in the imperialist chain
Greece, officially the Hellenic Republic, is a country in Southeast Europe with a population of around 11 million and GDP per capita of US dollars 25,836 in 2011 (OECD, 2011).
Greece is among those societies that were late adopters of capitalism relative to the remainder of Western Europe; Greek capitalism is characterised by time-lags and peculiarities in relation to the stages of capitalism (Ioannides & Mavroudeas, 2000). In Marxist terms, the debate on the classification of Greek capitalism in the imperialist chain revolves around questions as to the meaning of imperialism, and whether imperialism simply describes the relationship between nation states or something more.
Pouliopoulos (1963) observed that ‘Greek capitalism was born already old’ and even though he was writing in the early 1930s his work is still relevant nowadays. Contrary to proponents of ‘dependency’ theories in Greece, Pouliopoulos argued that the Greek economy and society had entered a phase of great change, demonstrating that the assumed pre-capitalist forms of capital were not feudal remnants, but forms sustained by modern capital. The Greek capital did not collide with the foreign, nor did the latter oppress local capital; rather, Greek capital developed together with that of other imperialist powers, based on their common vested interests33 (Katsoridas, 1995).
The economic bonds of Greece with the developed capitalism were traditionally oriented towards Europe, mainly France and the UK. The US, later, attempted to shift the focus of these bonds and dependencies in their favour (Couloumbis, 1966). In the post-war period, and during the decades of the capitalist boom that followed, Greek capitalism attempted to take advantage of the internationalisation of capital, in diverse, but not always successful, ways.
Greek capitalism is closely linked to the international dynamics of the capitalist system, based on accumulation; while the political and economic history of contemporary Greece, is
33 The Balkans (with the exception of Yugoslavia) were where the Cold War partition walls were created.
Advanced capitalism could only influence the structure of state capitalism (Soviet Union) through pressures on military expenditure, while rivalry becomes an indirect economic antagonism, dynamically independent of the economic antagonism among the countries of the free world.
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significantly influenced by foreign loans and interventions in the form of international finance. However, this should not be interpreted as Greece being a weak international imperialist centre, as argued by dependency theorists (see Liosis, 2012).
Indeed, during the 1960s, the inflow of foreign capital was directed to sectors where there was no Greek capital or where there was minimal involvement from these sources. During this period, construction capital played an imperialist role with the creation of large companies operating in the Middle East and Northern Africa (Mavroudeas, 2010). In sectors where the presence of Greek capital was significant, foreign capital co-operated with the local. Thus, no annihilation of Greek firms by foreign was observed; instead partnerships and mergers took place. The trend toward investment between the imperialist countries applied to Greek capital, as an important proportion of the funds invested by the Greek capitalists went abroad to EU countries and the US. Although Greek capitalism does not have the most dominant and powerful monopolies it makes political plans at a global level.34 Greek capital co-operates with foreign capital and through structural changes under bourgeois regimes opened up the country to international markets, merging together with other capitalisms (later forming the EEC) and demanding a better position in the imperialist chain.
The accession of Greece to the European economic integration process, and the EMU (Economic and Monetary Union) in 1999, meant that Greek capitalism was upgraded from a
‘second-generation, middle-range capitalism with limited imperialist abilities to a ‘partner’
in a first-class imperialist bloc’ with greater opportunities (especially in the area of the Balkans and Mediterranean) (ibid., pg. 2). After the Asian financial crisis in 1997, Greece attracted surplus financial capital due its enhanced creditworthiness as a member if the Eurozone, while the Greek bourgeoisie attempted to establish itself as a regional hegemonic power. Although Greece is economically and politically dependent on other developed economies, the Greek bourgeoisie invested significant funds in the Balkans, controlling their banking systems, and extending its economic influence into this important geopolitical region (Michael-Matsas, 2010; Magoulios et al., 2014). The Greek economy in 2010 was in 39th place worldwide in terms of size (OECD, 2010). It should be noted that, while European economic integration enhanced the influence of Greek capital in relation to other non-EU
34 The Greek bourgeoisie state powers maintain a motorised infantry and a substantial fleet of ships, at significant cost to the state budget. When its military power is not sufficient to protect its interests and to maintain its position as a regional power, the country can draw on American imperialist strength (NATO) and that of the EU.
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capitals, Greece was considered a middle-range developed imperialist economy relative to the more developed Western European economies, the hard core of the EU (Mavroudeas, 2010).
3.3. Historical Review and Economic and Political Developments in Modern Greece: