19th Century Spanish Economic Transformation: Agriculture, Secularization, and Industry
Economic Developments in 19th Century Spain
The Spanish population increased throughout the period, although less than in most developed countries. Declining mortality and a high birth rate explain this trend. Most of the population (est. 80% in 1865) remained rural.
Agricultural Reforms
Agriculture underwent a profound reform based on the abolition of the seigneurial regime, the abolition of primogeniture, and the great confiscations of Mendizabal and Madoz. This liberalized agriculture, allowing land to be freely traded and removing obstacles to market-oriented capitalist agriculture. Most land transferred to private owners.
Secularization of Church Property
The major economic transformation was the secularization of church property, initiated in 1835 by the progressive Mendizabal and completed by Pascual Madoz. This involved the expropriation, nationalization, and disentailment of church property, followed by public auction to the highest bidder.
Objectives of Secularization
- Financial: To generate income to pay the public debt and fund the Carlist War.
- Political: To expand the social base of liberalism by creating new landowners.
- Social (limited): To create an agrarian middle class.
Results of Secularization
The results were mixed. The public debt was not resolved. Liberalism gained ground, but a rift emerged between liberals and Catholic public opinion. Most disentailed assets were bought by nobles and wealthy urban bourgeoisie, not poor farmers. Secularization did not mitigate social inequality; in fact, rents often rose. This explains why the nobility generally supported liberalism, and many farmers opposed it (Carlism).
Impact on the Church and Further Confiscations
The church’s economic power was dismantled. The state pledged to subsidize the clergy, starting with the 1841 budgetary allocation. The last major confiscation, under Pascual Madoz in 1855, targeted municipal lands. It ruined municipalities and deprived the poor of free land use, but did not solve the public debt.
Despite shortcomings, the confiscations of Mendizabal and Madoz radically changed the Spanish countryside, affecting a fifth of the land. However, technical backwardness and unequal land distribution persisted.
Industrial Development
Spain lagged in the Industrial Revolution, which only affected Catalonia and the Basque Country. Factors for this delay included: shortages of coal and raw materials, technological backwardness, dependence on foreign capital, poor market articulation, low purchasing power, and political instability.
Railway Expansion and Trade Policy
Railway expansion was key to modernization. Spain’s first line (Barcelona-Mataró) was built in 1848. The 1855 Railways Act spurred a boom, with the network reaching 5,145 kilometers by 1866. Trade policy was largely protectionist, favoring Catalan textiles and Castilian wheat (tariffs of 1841 and 1849). A brief period of liberal policy (Figuerola Tariff, 1869) was followed by a return to protectionism in 1875.
Financial Developments
The State Treasury faced difficulties due to public debt. Key decisions included: the creation of the Bank of Spain in 1856, replacing the Bank of San Fernando; its establishment as a national bank with a monopoly on issuing paper money in 1874; and the adoption of the peseta as the monetary unit in 1868.