19th Century Spain: Economic Transformation, Industrialization, and Infrastructure Modernization
19th Century Spanish Economy: A Transformation
Economic and Agricultural Changes
The Spanish economy of the nineteenth century was characterized by slow growth, relatively backward compared to other European nations. Until 1840, the economy stagnated; however, a recovery led to slow growth in the century’s final third.
Agricultural transformations were slow. Spain was primarily agricultural. Until the mid-1830s, production stagnated, with a property-linked (operating lease) system and livestock dominance. Subsequent transformations modified land ownership, introduced technical innovations, and improved cultivation and management.
The land ownership system was amended through ecclesiastical and civil confiscations from the late 18th century (Godoy, Cortes de Cádiz, the Liberal Triennium), especially under Mendizábal (1836-1837) and Madoz (1855). Mendizábal’s confiscations aimed to increase owners, production, and wealth. Madoz’s confiscations targeted municipal, state, and church properties. The impact of these confiscations included increased landowners and cultivation of abandoned lands. However, the Church, municipalities, and farmers lost significantly, creating a large landless peasantry (rural proletariat). The ownership structure largely remained unchanged, with landlordism in the center and south and smallholdings in the north and northeast.
Other contributing changes included the final elimination of the Mesta (1836) and the abolition of feudalism and tithes (1837).
Increased regional specialization emerged: corn and potatoes in the north, vineyards and citrus in the Mediterranean, and cereals and olives on the plateaus and in Andalusia. Exports included wine, oil, and citrus.
In the last quarter of the nineteenth century, agriculture faced a crisis due to lower yields, low technology, and cheaper imports facilitated by rail expansion.
Industrialization in Spain
Spanish industrialization was late and incomplete. Until the mid-nineteenth century, it remained small-scale and local. The launch began in the 1850s (a period of crisis and increased desamortizaciones in cotton), recovering in the final quarter until 1898.
By 1839, Catalonia’s textile industry was the only sector where industrialization had begun, driven by protectionism and technological innovations (weaving looms, power looms, and later self-acting mules*).
The steel industry started in Málaga (1830-1850), expanding to Asturias (La Felguera) mid-century and Vizcaya (Bessemer system*) by 1880. Vizcaya’s two companies, Altos Hornos and Bilbao Vizcaya (merged in 1902), became steel leaders.
Other industries included food processing, chemicals, paper, and mining. The Mining Act (1868) liberalized the mining sector, dramatically increasing production from 1870 onward in lead (La Carolina), copper (Rio Tinto), mercury (Almadén), and zinc (Reocín).
New energy sources (oil and electricity) developed but had limited impact on the Spanish economy, largely exploited by foreign companies and exported.
Infrastructure and Transportation
Modernizing transport and communications was crucial for economic growth. Until the late 18th century, transport was expensive and slow. The progressive Biennium (1854-1856) promoted railways (Railway Act-1855), attracting foreign (French) capital, taxing material imports, and providing subsidies. An international financial crisis stalled progress, resuming in 1876 and concluding with railway construction during the Great War. Negative effects included differing gauges and a focus on Madrid.
Other advancements included expanding steam navigation and modernizing the postal and telegraph systems.
Financial Sector Development
The financial sector played a key role in industrialization and the overall economy. Under Fernando VII, the Banco de San Fernando (1829) and the Madrid Stock Exchange (1831) were established. The Law on Banks and Credit Societies (1856) modernized the Spanish banking system, creating the Bank of Spain (1856) with a note-issuing monopoly, and other entities such as the Banco de Santander (1857), Banco de Bilbao (1857), and Banco Hipotecario (1872).
*Self-acting mule: Semi-automatic machines used primarily in textile mills.
*Bessemer system: High-quality steel production system for high profitability, utilizing iron and coke.