Economic and Social Changes in Spain During Franco’s Dictatorship
Autarqia (1939-1950)
The first stage of Franco’s dictatorship was marked by an economic policy of autarky, aiming for self-sufficiency and reducing imports. This was driven by the economic difficulties of the post-Civil War period and Spain’s international isolation following World War II.
Key features of this period:
- Economic isolation and state intervention in production, distribution, and pricing.
- Creation of the Instituto Nacional de Industria (INI) to produce goods that the private sector couldn’t.
- Food shortages and rationing, leading to a black market.
- Deindustrialization in regions like Andalusia and Galicia.
- Relocation of Catalan companies to other parts of Spain.
- Corruption and profiteering by some businessmen and officials.
- Deterioration of living conditions for workers, with falling real wages and rising prices.
Consequences:
- Increased social inequalities and widespread poverty.
- A corrupt and inefficient administration.
- Lack of incentives for industrial development.
The 1950s: A Slow Recovery
Starting in 1951, Spain began to recover economically. While the regime didn’t abandon autarky entirely, it abolished some interventionist measures. The beginning of the end of international isolation and aid from the United States, through loans and the Pact of Madrid (1953), led to moderate economic growth. Imports and exports recovered, wages improved slightly, and domestic demand increased.
However, this growth was not balanced and led to significant inflation and a growing trade deficit. By 1957, Spain faced a near insolvency situation, highlighting the need for stabilization measures.
Economic Expansion (1959-1973)
In 1959, Spain faced a financial crisis and was unable to pay for oil imports. The government, with the help of French economic experts (technocrats), implemented the Stabilization Plan of 1959. This plan, devised by economist Joan Sardà Dexeus, aimed to:
- Control inflation by stabilizing prices and wages.
- Liberalize the foreign sector, allowing for more imports and exports, and attracting foreign capital.
This plan marked a shift away from autarky and towards a capitalist system, although it initially faced resistance from Franco himself. The first months were difficult, with falling productivity, lower real wages, rising living costs, and increased unemployment. However, the industrial sector began to focus on exports, and the positive effects of the plan became noticeable from 1961 onwards, initiating a period of sustained economic expansion.
Causes of the Economic Expansion:
- Tourism: The devaluation of the peseta following the Stabilization Plan, combined with Spain’s political stability and low labor costs, attracted a growing number of foreign tourists. Tourism became a major source of financing for development.
- Foreign Investment: Spain’s low wages, lack of labor rights (including the right to strike), and low taxes attracted foreign companies seeking high profits.
- Emigration: Many Spaniards emigrated to other European countries in search of work. This reduced unemployment in Spain and remittances from these workers provided another source of income.
- Development Plans: The Franco regime invested in infrastructure projects, such as industrial estates, to promote industrial development.
The Crisis of 1973-1975
The economic expansion ended in 1973 due to a global crisis, exacerbated by Spain’s specific political situation with Franco’s declining health. The main factors contributing to the crisis were:
- Inflation: Reaching 10.6% in 1973 and 18.7% in 1975.
- Trade Deficit: A collapse in the balance of trade due to rising import costs.
- Budget Deficit: Increased government spending outpacing revenue.
Changes in Social Structure and Mentality
The second half of Franco’s dictatorship saw significant changes in the social structure, particularly in the countryside, the working class, and the middle class.
The Countryside:
- Decline in the number of landless laborers.
- Increased access to land ownership for tenant farmers.
- Loss of prestige and economic influence of landowners.
Urban Centers:
- Growth in the number of industrial and service sector workers.
- Increased specialization and qualification of workers.
- Rise of a new working class with higher wages and expectations.
- Shift in the labor movement from the anarchist CNT to the clandestine Workers’ Commissions, focusing on wages and union rights.
The Middle Class:
- Expansion of the middle class due to growth in large companies, markets, and services.
- A more open and dynamic mindset compared to the old petty bourgeoisie.
- Greater acceptance of capitalist market competition.
Women:
- Emphasis on traditionalist values and the role of women as homemakers and mothers.
- Restrictions on women’s access to the workplace and discriminatory labor laws.
- The economic necessity for women to work led to the “double burden” of work and domestic responsibilities.
- Slow progress in women’s access to education and universities in the 1960s.
Conclusion:
The economic and social changes during Franco’s dictatorship transformed Spain from a largely agrarian society to a more industrialized and urbanized one. The period of autarky was followed by a period of rapid economic expansion, fueled by tourism, foreign investment, and emigration. However, this expansion was unsustainable and ended with the crisis of 1973. The changes in social structure, particularly the rise of a new working class and middle class, and the increasing labor unrest, contributed to the eventual transition to democracy after Franco’s death.