Greece: ‘Baksheesh Capitalism’ (Jon Kofas, Greece)

The economic miracle of Greece in the past 25 years will most likely continue, in spite of pending world economic slowdown and the current austerity measures. Large-scale foreign investment and the natural gas deal with Russia and the Black Sea Consortium represent considerable impetus, as do multi-billion dollar investments from China and the Arab world. Greek-owned firms have been taking advantage of low-cost labor and government subsidies to expand into the Balkans and the Near East, and Greece has benefited from cheap immigrant labor that continues to fuel its economy. Despite the Greek economy’s impressive growth rate, the socioeconomic gap will be widening once again after it had been closing in the past three decades, as it did in Spain, Portugal, and Ireland. IMF-EU privatization recommendations that have been implemented, or they are on the way, tightening social security benefits, along with rapid price inflation and the lowest average wages in the EU entail that Greece is hardly the economic miracle of the early 21st century that some EU observers were praising before the global recession of 2008-2010. Unrelenting rampant official corruption, chronic and widespread tax evasion not much different than in a Third World country, a thriving subterranean economy that include but not limited to pervasive narcotics, sex traffic, and money laundering activities amounting to as much as 2% of GDP, and a corrupt health care and educational system, especially higher education, are some of the problems facing the country. During the wildfires of last summer, EU officials were eager to help, but some pointed out that Greece along with southern Europe has serious problems with unbridled corruption, something that World Bank studies confirm. While southern Europe does not have monopoly on capitalism’s inherent contradictions, such traits manifest themselves more poignantly in the periphery in the form of ‘baksheesh capitalism’ in contrast with Scandinavian-style ‘enlightened capitalism.’ Amid a cesspool of rampant corruption and deteriorating social conditions for more than two-thirds of the population, economic growth in Greece benefits the ‘chosen’ minority. At 22.6% for those under 25 years old, Greece has the highest unemployment in the EU. While the EU integration model yields benefits for its periphery members, it has not fostered ‘enlightened capitalism,’ thus raising questions about the extent to which ‘baksheesh capitalism’ will impact the broader social classes of the rest of the Balkans and Turkey once they become full EU members. While Greece is not a microcosm of EU’s northwest members, it is a reflection of the periphery and future members. In the era of globalization and privatization, the inherent
characteristics of baksheesh capitalism are evident in other countries and contribute to the radicalization of the masses just as in the case of Greece where the leftist parties currently enjoy the highest percentage among voters since the late 1950s.