‘No mutiny will be allowed’: business, the tax system and the Greek version of Mediterranean capitalism during dictatorship, 1967-1974

Abstract

This article analyses the interaction between the system of taxation and business in Greece during the crucial period of the military dictatorship (1967-1974) in order to throw light on the Greek version of Mediterranean capitalism that developed in the post-Second World War framework and how it affected business doing in the country. It will be shown that through this type of capitalism clientelism and ‘shadow’ or informal economic transactions ended up being prevalent features of the current Greek economic reality.

Keywords:

• Mediterranean capitalism
• Greece
• dictatorship
• tax system
• corruption

Acknowledgment

I would like to thank Niall Mackenzie for his useful comments and feedback during the preparation of this article.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 During and prior to the period analysed here Greece’s political system was a constitutional monarchy.

2 For the present analysis, corruption occurs when there is an abuse of public office for private gain or, as Rose-Ackerman notes, when ‘officials use their positions of public trust for private gain’ (1996, p. 365).

3 Corruption affected the political system and spread to the whole body of the public administration. See, indicatively, Mouzelis about corruption in the pre-dictatorship years (1996, pp. 71-2) or Meynaud about the clientelistic relations and spoils that have been burdening the political system since the 19th century (2002, pp. 47-8).

4 The depiction of clientelism here follows the perspective of Rose-Ackerman and Palifka, who note that ‘…clientelistic systems develop where favours and payoffs are exchanged that undermine the transparency and effectiveness of public and private institutions’ (2016, p. 251).

5 For an analysis of the varieties of capitalism and informal economies in the south-eastern European economic context see, among others, Williams, Kedir, Fethi and Nadin, 2012.

6 The reference here is to the level of imported investment capital per year (Kazakos, 2001, p. 271).

7 This is according to the press of the time.

8 With the exception of 1974.

9 See Long-term Statistical Series of the Greek Economy,1992, p. 27.

10 Known today as the Athens University of Economics and Business.

11 This rate applied in the zones A and B, that is in Athens, Piraeus and the wider region of Attica.

12 In the reports for 1968 and 1969 the increase in tax revenues was attributed to the increase of the national income and the measures against tax evasion that contributed to the better capture of the tax base. Also, in the report for 1971 it was noted that the better capture of the tax base due to the ‘further improvement of the function of the tax services’ might had contributed to such an increase in tax revenues for that year (Bank of Greece, 1972, pp. 83-4).

13 This school, called The National Centre for Public Administration and Local Government, was finally established in 1983 (see Argyriades, 2010, p. 3 and National Centre for Public Administration and Local Government (http://www.ekdd.gr/ekdda/index.php/en/2012-06-29-09-59-33).

14 Certificates of social ideals were ‘public certificates which were issued by a competent authority (the army or the police) and attested that the citizens [who had them] were not, themselves or other members of their family, communists, or even friendly to communist ideals’ (Karafillis, 2008).

15 This was done through compulsory law 5/1967 - see ‘Iospress’, Τα ξεχασμένα σκάνδαλα της ‘Εθνοσωτηρίου [The forgotten scandals of the ‘Nation-saving’ revolution] (http://www.iospress.gr/ios2010/ios20100725.htm).

16 ‘The Dictatorship’s fascism and spoils’, 40:20-40:40.