Review Article: Financial Strategies and Industrialization in Modern Greece

Reviews Review Article: Financial Strategies and Industrialization in Modern Greece Georges Dertilis (editor). Banquiers, usuriers et paysans: Réseaux de crédit et stratégies du capital en Grèce (1780—1930). Paris: Editions La Découverte et Fondation des Treilles. 1988. Pp. 321. FF 150. This volume is a clear indication of the considerable progress that research in Greece's economic history has made in the last two decades. It deals in an imaginative and illuminating manner with the constitution, reproduction, and long-term transformation of the Greek financial networks and markets from the 18th century until the inter-war years. Furthermore, it shows the relevance of such networks for the type of development or underdevelopment that has been experienced in Greece. The editor is also the main contributor to the volume, since his three chapters are responsible for more than half the text, and set out the general themes that are discussed and further elaborated by the other contributors. In the introductory chapter, Dertilis gives an overall picture of Greek development during the period under consideration , focusing particularly on those specificities of the Greek case that are relevant to the book's major problematic. From this perspective he discusses a variety of topics. These include: the prominent role that Greek merchants and financiers have played within and outside the Ottoman empire; the relations between the Greek diaspora bourgeoisie and the indigenous dominant classes in postindependence Greece; the relative weakness of big landed property in the 19th century; and the predominance (particularly in the Péloponnèse) of small agricultural producers whose output was controlled by local merchants and usurers; the connections between big merchant and finance capital with a chronically indebted state that was using vast resources for its own extended reproduction and for achieving irredentist goals; the great openness of the 19th century Journal of Modern Greek Studies, Volume 8, 1990. 141 142 Reviews Greek economy and its dependence on international financial networks partly controlled by diaspora Greeks. A subsequent chapter by Dertilis focuses more directly on the major topic of the book as a whole: credit networks and their development from the 18th century onwards. Paying particular attention to the 19th century, he shows that, notwithstanding the development of the banking system and the influx of diaspora capital during the last three decades of the century, credit fragmentation still persisted — the late 19th century Greek economy did not manage to develop an integrated financial market. Throughout the century, credit demand at village level was met by the local merchants-cum-usurers who, in turn, were linked with usurers and merchants higher up in the financial hierarchy, at the top of which stood the country's two major banks (the National Bank and the Ionian Bank). These banks preferred to land to big merchants and financiers who could provide serious collateral, rather than directly to small producers. In this way the various intermediaries were able to profit from the difference between the banks' rates of interest (6% to 10%) and the exorbitant rates demanded from the peasants (from 18% up to 50%). According to Dertilis, this highly complex, strongly hierarchized system of intermediaries did not permit the development of the kind of competition that could eventually lower the cost of credit and eliminate the oligopostic or monopolistic controls exercised by the usurer and merchant at village level. The local money lender did not at all compete with others of his kind, but was simply a client of the money lender higher up. From this point of view the local markets had a segmental character, in the sense that they did not lead to an integrated, national market. This credit system lasted until the late 1920s, when the state, via the newly established Agricultural Bank of Greece, began to lend directly to the small producers. This eventually broke the stranglehold over the peasant household by the local usurers and financial middlemen . The above general considerations become more detailed and specific in Eugenie Bournova's case study of a merchant-financier family in the village of Rapsani in Thessaly. Bournava examines this family's relationship not only with its peasant-clinets, but also with other merchant-financiers in the...