Of critical importance to the ultimate success of the national movement was the transformation that Greek society was to undergo during the course of the 18th century. Significant among these developments was the rise to power and influence of the Phanariotes, a small caste of Greek (and Hellenized Romanian and Albanian) families who took their collective name from the Phanar, or Lighthouse, quarter of Constantinople, the home of the ecumenical patriarchate. The roots of their ascendancy can be traced to the Ottomans’ need for skilled negotiators as the power of their empire declined. No longer in a position to dictate peace terms to their vanquished enemies, they now had to rely on diplomats skilled in negotiation who might mitigate the consequences of military defeat, and these were drawn from the Phanariotes. From 1699, when the Treaty of Carlowitz with the Habsburg monarchy was signed, to 1821, the year of the outbreak of the War of Greek Independence, Phanariote grandees monopolized the post of chief interpreter to the Porte. This was a more important post than it appeared, for its holder bore considerable responsibility for the conduct of foreign policy. Similarly, Phanariotes were invariably interpreters to the kapudan pasha, the admiral of the Ottoman fleet. Again their powers were wider than the title suggests: these Phanariotes, in effect, acted as governors of the islands of the Aegean archipelago, whose Greek inhabitants were a potential source from which to draw men for service in the Ottoman fleet.

The most important posts held by Phanariotes were those of hospodar, or prince, of the Danubian principalities of Moldavia and Wallachia. Phanariotes ruled those potentially rich provinces as the viceroys of the sultans, and their luxurious courts in Jassy (now Iași, Romania) and Bucharest copied on a lesser scale the splendour of the imperial court in Constantinople. Just as there was furious and corrupt jockeying for high office in the Orthodox church, the appointment of the hospodars was also accompanied by intrigue and corruption. The average tenure in office of a Phanariote hospodar was less than three years. Because they needed to make up for their expenditures on bribes, hospodars acquired a somewhat justified reputation for greed and oppression. Some hospodars displayed an enlightened interest in legal and land reform; most acted as patrons of Greek culture, education, and printing. The princely academies attracted teachers and pupils from throughout the Orthodox commonwealth, and there was some contact with intellectual trends in Habsburg central Europe. For the most part, the Phanariotes were too closely joined to the Ottoman system of government, of which they were major beneficiaries, to play a significant part in the emergence of the Greek national movement. Their interests, however, coincided with the maintenance of the Ottoman status quo, and they provided a pool of individuals with experience in diplomacy and politics when armed struggle erupted in 1821.

The mercantile middle class

The single most important development in the Greek world during the 18th century was the emergence of an entrepreneurial, prosperous, and far-flung mercantile middle class, which played a major role in the economic life of the Ottoman Empire and elsewhere. Discouraged from investing their capital within the empire by the arbitrariness and rapacity of the state, these Greek merchants played an active role in developing commerce in Hungary and Transylvania, newly acquired by the Habsburg monarchy, and in southern Russia, where Empress Catherine II (the Great) encouraged them to settle after Russia’s borders had extended to the Black Sea. Greek became the common language of Balkan commerce as these merchants challenged the existing hold of British, French, and Dutch merchants on the import-export trade of the empire, importing Western manufactured goods and colonial produce and exporting raw materials. Greek merchant communities—or paroikies, each with its own church—were established through much of central Europe, on the Mediterranean coast, in southern Russia, and even as far away as India.

Paralleling this development, a substantial merchant marine, based on the three “nautical” islands of Hydra (Ídhra), Spétsai (Spétses), and Psará, came into existence. This merchant marine prospered from running the continental blockade imposed by Great Britain during the period of the French Revolution and Napoleonic Wars. The existence of a reservoir of trained sailors proved to be an inestimable advantage once the war of independence broke out, and Greek fire ships (combustibles-laden ships set afire and guided toward the enemy) became a formidable weapon against the cumbersome ships of the Ottoman fleet.

The emergence of a mercantile middle class had a number of important consequences. Greeks were brought into contact with the ordered societies of western Europe, in which the state encouraged commerce. They compared that state of affairs with the prevailing one in the Ottoman Empire, where the absence of the rule of law and general arbitrariness militated against the generation and retention of capital. Most of the merchants were, like the Phanariotes, too much a part of the status quo to give active encouragement to the national movement and thus potentially threaten their newfound prosperity. Indirectly, they made a major contribution to the emerging national movement, for it was their wealth that provided the material basis for the intellectual revival that was such a significant feature of the late 18th and early 19th centuries. Impelled by a sense of local patriotism which had always been strong in the Greek world, they endowed schools and libraries. It was no accident that the three most important schools-cum-colleges in the Greek world on the eve of the war of independence were situated in Smyrna (now İzmir, Turkey), Chíos, and Ayvalık (on the coast of Asia Minor opposite the island of Lésbos), all three major centres of Greek commerce.