From 1974 to today

After 1974, higher education in Greece was transformed from an elite system to a mass one. In 1982 a new university law specified requirements for university positions, and in the same decade four departments offering degrees in economics were established at the universities of Crete, Patras, the Aegean and Ioannina.

This enormous expansion changed the landscape of economic education in Greece com­pletely. Within a short time, the curricula were changed to reflect the new situation. The internationalisation of post-war economics meant, primarily, the coming of age of UK- or American-trained economists in Greece (Psalidopoulos, 2000).

Since the 1980s, all schools of economic thought are represented more or less in every eco­nomics department, and the subject itself is taught (as it used to be) as an optional course in all universities. This plurality in numbers has destroyed the sense of community, for there is no longer a society of academic economists in Greece. Greek economists are members of foreign economic associations and societies, and publish both in Greek and other languages.

In the field of theorising and economic policy-making, a new (old) name grew in importance: Andreas Papandreou. His views shifted from the mainstream of the 1960s to more radical positions in the 1970s. Papandreou now opposed neoclassical theory and its approach to development. For him, underdevelopment could be best explained as a consequence of the dependency of some states on others.

A very important concern for Papandreou was the popular support of any government wanting to implement ‘change’ in the Greek economy. In order to secure it, he wanted ‘social con­sumption' to grow through big rises in wage income, especially in the public sector. The public sector was a tool to control the economy, to boost growth and to absorb the unemployed. Next to social consumption, the banking system had to be nationalised and supply the public sector, including public enterprises and agricultural cooperatives, with loans. Finally, foreign trade had to be centrally controlled in order for the national economy to remain immune from changes in international economic relations. The results of these policies were deteriorating for economic indicators: growth rates fell from 6.6 per cent in the 1960s, to 5.6 per cent in the 1970s, to 1.8 per cent in the 1980s, with rates in industrial output falling from 9.8 per cent, to 6.4 per cent, to 0.5 per cent respectively. The inflation rate averaged 16.2 per cent per year between 1983 and 1995. Industrial decline led in the 1980s to the take-over of ‘ailing’ firms by the government in order for unemployment to be kept to a minimum. Government expenditure rose from 30 per cent of GNP in the 1970s to 50 per cent in the late 1980s, and the debt to GDP ratio went from 20 per cent in 1979 to 110 per cent in 1990, creating a bubble waiting to burst.

It is ironic that during the 1980s, the decade of right-wing hegemony across most of the West, with Margaret Thatcher’s and Ronald Reagan’s governments applauding monetarism and supply-side economics, in Greece politics took a totally different turn. Papandreou’s PASOK party was strongly influenced by dependency theory, which was put forward as a means of explaining particularly Latin American underdevelopment and was popularised by Paul Sweezy’s Monthly Review. All prominent PASOK policy officials were committed to lines of economic management drawn up by Papandreou himself in his numerous publications. Eventually the rhetoric of a transition to socialism was abandoned for the sake of an economic administration that tried to fine tune poor economic performance with European Union integration and money transfers. Despite the opposition of neoclassical and Marxist economists, Papandreou’s views found wide electoral support and popularised state-developmentalist thinking in Greece that dominated economic discourse for decades. Successive governments after 1995 did not challenge this prevailing economic paradigm; they tried to bring it in line with the country’s European Union membership and the introduction of the euro. Low interest rates after 2002 added a further boost to foreign borrowing and led to crisis in 2010, when the actual state of Greek statistics was made public.

Economic thought in Greece is presently at a crossroads due to the ongoing economic crisis and distress. The economic downturn of the country and forced austerity led to wage cuts, reduction of the public sector, unemployment and heavy taxation, and has provoked many publications that try to analyse the current situation of the Greek economy. Neoclassical, Keynesian and Marxist writers and all other variants of economic thought compete to win the hearts and minds of the public and possibly influence the Greek electorate. Three different camps can be identified. One espouses a return to a national currency that would enable the country to regain through devaluation its international competitiveness; a variant in this camp is extremely nationalistic and xenophobic and espouses conspiracy theories to explain current conditions in Greece.