UMass Economics Wolff

Wolff on the “Economic Crisis, Greek Theater, Our Drama”

Rick Wolff

A column by Rick Wolff, emeritus professor of economics, examines the financial crisis in Greece. He concludes that government officials there and in international financial circles have misdiagnosed the economic problems and are blaming ordinary working people for something caused by the underlying capitalist system. (, 6/4/10)

Economic Crisis, Greek Theater, Our Drama
April 6, 2010
by Rick Wolff

This Greek economic theater is nothing new. It replicates an old, recurring pattern of capitalism everywhere. Greek capitalist enterprises and their top shareholders and managers (the rich) evade or avoid most taxes. Meanwhile the problems and contradictions of Greek capitalism drive employers and employees to demand ever more from the government to support their activities. Eventually, the government can no longer finance its expanding services by raising more taxes from the masses. The masses resist and social movement to tax enterprises and the rich accelerates. Then, Greek capitalists and the rich quickly offer to lend the government more of the money they have saved from taxes. The government then borrows from them (and often also from capitalists and rich citizens of other countries) to finance some more years of expanding services. It runs increasing budget deficits and so pays increasing interest to the capitalist enterprises and rich individuals that are the government’s creditors. Eventually, those creditors respond to the accumulated government debt that they helped to create and that they have profited from by saying that further lending has become too risky.

Leave a Reply