Capitalism Greek Style

2015-01-20 15.20.23

The streets of Athens are filled with shoppers these days  because it is Winter Sales time, which is to say that shop owners are now permitted for a period of a few weeks to offer their merchandise at discounted prices to the general public. This happens twice a year—once in summer, once in winter—with the dates dictated by a national law governing retail practices.  (In addition, two other short periods in which sales are permitted are specified by the law.) Moreover, merchants are prohibited by law from announcing in advance the sales or any details relating to them, for a period of 30 days prior to the sale periods.

For an American, this concept is hard to fathom—I seem to remember dimly from Econ 101 that the basic concept of a capitalist economic system is that prices are set by supply and demand. The idea that a merchant cannot just decide one day to put up a sign saying “Big Sale! 30% off all items!”  or to carry out a special holiday-themed promotion, is hard to get my mind around. Imagine a country in which you don’t have Independence Day sales with minimum-wage  workers dressed in ridiculous freedom fighter costumes, carrying signs saying “We Won Freedom from the Turks, Now Let’s Win Freedom from High Prices!” How have the Greeks managed to survive all these years without this particular form of cultural expression?

These restrictions on discounts are not the only limitations on retail trade imposed by Greek national law. As in many other parts of Europe, most stores are prohibited from opening on Sundays (although this law has been loosened recently in the crisis.) And I get this–it may be an inconvenience for the consumer but the 24-7 shopping culture can be hell for a small business owner and his/her employees. I respect the idea that these folks deserve a break to be with their families, even if it means that I can’t buy my favorite beer from the grocery store on Sunday. (The wonderful periptero–the neighborhood kiosks that are everywhere–are literally always open, so no one ever goes without access to life-sustaining necessities like bread, milk, beer, and cigarettes.)  I haven’t quite figured out the rationale behind these regulations, but I found a hint in an article by the OECD (Organization for Economic Cooperation and Development), which stated the following:

“(according to the preamble to the relevant legislation)…these provisions have the objective of protecting consumers and small businesses. More specifically…the policymakers’ concerns that many retailers build their commercial strategy around sales and offers, and that consumers may be misled by announcements of discounts and be induced to buy.”

Okay, protecting consumers from misleading advertising seems like a good thing, but I still don’t get the idea behind severely restricting merchant’s legal right to offer discounts whenever they feel like it. Are consumers too stupid to figure out what’s a good deal and what’s not? Given the wealth of information on products and prices that is available to consumers via the Internet, isn’t this restrictive system actually contrary to the interests of the consumer?

Don’t get me wrong—I am by no means a believer in the Invisible Hand of the market as the guarantor of economic prosperity and fairness. On the contrary, I’m a strong advocate for active government regulation to ensure that markets work as fairly as possible. But in this case, I just don’t get how restrictions on retail sales benefit anyone. (Apparently, Greece is not alone in having such regulations—according to the OECD report, Belgium, France, Italy, and Portugal all have seasonal restrictions on sales.)

Other retail practices in Greece that limit the opportunity for the consumer to lighten his wallet are not matters of law, but cultural practices. I have lived in other countries in which stores close for siesta time, but store hours here are more complex than that. Some days they close mid-afternoon for a couple hours then reopen for a few hours in the evening, while some days they just call it a day at lunchtime, while some stores don’t close at all–this doesn’t seem to be governed by any general rule.

Store Hours:  Mon & Wed 8:30 am to 3:00 pm, Tues, Thurs, & Fri: 8:30–2:00, 5:30–8:30, Sat: 9:00-3:00.

Store Hours


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