The Political Economy of King's Otto Reign

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The Political Economy of King's Otto Reign Tafter Journal scritto da George Tridimas il 15 Luglio 2017 When the Greeks Loved the Germans: The Political Economy of King’s Otto Reign This article has been first published on German-Greek Yearbook of Political Economy, vol. 1 (2017) [1] Abstract In 1832 Prince Otto Wittelsbach of Bavaria was appointed King of the newly founded independent Greek state. Otto’s reign was a momentous period for Greece, initially under Regency then under Otto as an absolute ruler and from 1843 as a constitutional monarch until his expulsion in 1862. Using the historical record the paper focuses on three political economy questions, namely, the rationale for the foundation of a state, which relates to the provision of public goods and rent distribution, the constitutional order of the state regarding the choice between monarchy or republic, and the emergence of democracy by revolution or evolution. Introduction An aspect of the ongoing multifaceted Greek debt crisis has been a strain in the relations between Greece and Germany, where members of the German cabinet have been caricatured as heartless fiscal disciplinarians and of the Greek cabinet as delinquent fiscal rule breakers. A moment’s calmer reflection reminds us that in modern times the relations between Greece and Germany have been long standing and steeped in mutual respect. A case in point is the reign of King Otto of Greece from the Bavarian royal house of Wittelsbach. Modern Greece rose formally as an independent nation state in 1832 with the seventeen year old Otto as its ruler. Otto was welcomed in Greece with jubilation. An overwhelming majority of Greeks loved their German sovereign, who dreamy–eyed from ancient Greek glories and heroic acts during the 1821 Revolution against the Ottoman Empire arrived to build a new state. None of the parties involved could have imagined what followed culminating in Otto’s expulsion in 1862 after a turbulent thirty year reign. Founding state institutions after its people broke free from their previous master to be governed by alien rulers raises fundamental political economy questions including an explanation of the origins of the state, the role of the government in providing public goods, creating and distributing rents, the choice between monarchy and republic, revolution, political compromises and democracy. The present essay explains how Greece dealt these, partly overlapping, questions during the reign of King Otto. The next two Sections describe the historical developments during Otto’s reign, the government of the Regency (Section 2) and Otto’s rule first as an absolute and then as constitutional monarch (Section 3). Using the experience of Greece Section 4 inquires the origins of the state, that is, whether a state emerges by individuals joining to produce public goods or it is imposed by a ruler looking to maximise the surplus that can be extract from the subjects. Section 5 discusses the emergence of constitutional monarchy and its relevance to Greece, while Section 6 investigates how far revolution and constitutional evolution may explain the foundation of democratic government. Section 7 concludes. Greek Independence and the Bavarian Regency In 1821 the Greek subjects of the Ottoman Empire revolted against their rulers [2]. Initial military successes of the rebels were followed by heavy defeats but after the united fleets of Britain, France and Tafter Journal - All Rights Reserved | Pagina 1 di 17 Tafter Journal scritto da George Tridimas il 15 Luglio 2017 Russia destroyed the combined Turkish–Egyptian fleet in the sea battle of Navarino of 20 October 1827 independence beckoned. The nascent state confronted grave challenges including uncertainty about its territory, a ruined post–war economy, an illiterate population, and a divided society where different groups engaged in civil war and vied for control. In 1832, following intense diplomatic manoeuvring between the three “Protecting Powers” of Britain, France and Russia, with each one pursuing its own interests and the former two being suspicious of Russian intentions after it won the Russo – Turkish war of 1828–29, two international treaties were signed. Interestingly, the Greeks did not participate in either of the two treaties. The first treaty, signed with the Ottoman Turks, recognised Greece as an independent state. The second treaty signed with the King of Bavaria, Ludwig I of the House of Wittelsbach (an admirer of ancient Greece and a philhellene), installed his second son Otto (born in 1815) as King of Greece; Otto’s selection was ratified by the Fifth National assembly of Greece in 1832. According to the treaty, Otto was appointed absolute hereditary monarch and was granted a force of 3500 Bavarian troops to oversee his safety while the Bavarian officers would also train the Greek army. The new state was given loans of 60 mils franks, to be paid in three instalments and guaranteed by the three powers, to help manage the government finances and build the economy. The news of Otto’s selection was received by his new subjects with great joy; he received a rapturous welcome when he arrived in the then capital city Nafplion in January 1833. Exhausted by the war effort and in the midst of another civil war (that broke out after the 1831 assassination of the Greek Governor, I. Capodistrias), the Greeks saw Otto as a messiah. Not only did he embody the hope for domestic peace and progress, but as a king he was also conferring Greece equal international status with the rest of the European states. As Otto was not yet 18 years old, a Regency of three men ruled in his name. Count Joseph von Armansperg, exercised executive control, Law Professor Ludwig von Maurer, was responsible for designing the system of central and local government and civil and criminal justice, and General Karl Wilhelm von Heideck, administered the army. The romantic view inspired by the marvels of ancient Greece and the admiration for the heroism during the Revolution along with the optimism and goodwill of the Bavarians must have been in sharp contrast to the picture of devastation and impoverishment that met them when they arrived in 1832. Setting up a new state and establishing an effective government was a daunting task. To adopt Weber’s conception of the state, the ability of the new state to monopolise violence and impose law and order was at first limited. A national army had to be built from the revolutionary fighters. A pressing problem was to integrate the armed irregulars who having fought in the war of liberation against the Ottomans expected to be rewarded and turned to criminality like extortion and brigandage when aggrieved. Inducements were offered by way of pensions to older fighters and enlistment of younger ones to the regular army and the gendarmerie, but few fighters considered those rewards as sufficient. To establish its authority, the government had to wrestle control from the local political magnates (mainly big landowners) who acted as chiefs of clans and had administered public life during the Ottoman rule. Public administration was then organised by dividing the country to newly drawn prefectures, provinces and demes. Mayors in particular were given responsibility over a number of functions including education, law and order, and infrastructure works. The heads of each local authority were appointed by the crown from a list of candidates compiled by a local selection council whose members were elected in a restricted franchise Tafter Journal - All Rights Reserved | Pagina 2 di 17 Tafter Journal scritto da George Tridimas il 15 Luglio 2017 and non secret vote. The new administrative structure broke traditional forms of exercising power and was met by local resistance which sometimes took the form of refusal (often violent) to pay taxes and refusal of conscripts to serve in the national army. Nevertheless, recognising the power and influence that could be exercised in the new administrative structure, local elites strived for control of the local authorities. As a result and until the end of the 19th century, local population was interested more in local authority than national elections. Since the majority of the peasant population were landless solving questions of land ownership and redistribution were most demanding. Legislation was passed in 1835 giving all those who had fought in the war credits that were then used to buy smallholdings from the national lands (formerly land held by the Ottomans) to be held in perpetuity after paying off a 36 year mortgage. The land bought with such credits however could provide no more than subsistence, while tax and mortgage payments had also to be paid, implying prolonged poverty for those families that had no additional means. The system failed to achieve its goals of creating a large class of independent smallholders and securing tax revenues. [3] The dire state of an economy was compounded by the presence of thousands of destitute Greek refugees from lands where the revolution had been suppressed. Further political ramifications followed from the support of the latter group for an irredentist policy of renewed war to liberate the Greeks still living under Turkish rule. An additional economic handicap was that fertile lands where the majority of the population was Greek, and prosperous commercial centres remained under Ottoman control and sovereignty. Nor were affluent Greek merchants based in the European centres of commercial activity willing to resettle in the liberated Greece and apply their talents and assets to its economic regeneration. The relationship of the Orthodox Church of the independent Kingdom to the “Mother Church” of the Ecumenical Patriarchate of Constantinople was a serious concern. Liberals advocated the independence of the Greek Church but conservatives opposed it. This dispute was important not only because Otto, the titular head of the Church, was king “by the grace of god” but also because of his catholic denomination.
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