Economic Autarky in Post-Civil War Spain: 1940s-1950s
Economic Autarky in Post-Civil War Spain
The Impact of the Civil War: The Years of Famine
After the war, Spain was a ruined country. The loss of life was compounded by the destruction of property. The impact on the population was a considerable loss of life. Regarding the settlement, displacement took place in the post-war years around the country because of disruption to the economy close to the ground. In terms of economic impact, the 1940s were the years of famine. The income level was not recovered until the 1950s. Moreover, Spain could not benefit from American aid under the Marshall Plan due to the type of dictatorship and international isolation. This situation was caused by Francoist economic policy, in addition to the effects of the Civil War, the Second World War, and the political isolation of Spain.
All the testimonies of the 1940s remember that time as a time of power restrictions, hunger, and misery. The new regime had to resort to rationing. An important part of essential consumer goods were placed under the black market. The black market was the only way to circumvent the controls and the official prices, and the only way of survival for many people. Among the black marketeers were farmers and senior officials of the regime, facilitating and giving coverage to such trafficking in exchange for fat commissions. Corruption was also widespread.
Interventionist Policy
To cope with this difficult situation, the Franco regime opted for a model of economic autarky. The belief was that a country could not enjoy political independence if it was not economically independent, almost self-sufficient.
A series of decrees implemented an interventionist system:
- In Agriculture: Prices were fixed, and through the National Wheat Service, wheat was requisitioned at set prices. However, the black market persisted.
- In 1941, the Instituto Nacional de Industria (INI) was founded.
The era of autarky saw an increase in social inequalities, a general impoverishment of the majority of the population, a progressive corruption of public administration, and a lack of encouragement for the progress of industrial production.
Economic Stagnation and the First Adjustments
The consequences of autarkic economic policies were disastrous. The scarcity of food guaranteed by rationing and the high prices of goods on the black market, combined with low salaries, provoked widespread hunger, especially in large cities. The lack of unions reduced the purchasing power of workers, who were unable to demand wage increases to offset rising prices. All this affected the consumer goods industries, which suffered a reduction in demand, leading to fewer jobs.
Spain in the 1950s
Spain in the 1950s was one of the European countries with lower energy consumption and per capita income. However, from 1951 onwards, there was an improvement in the industry. Two economic factors were behind this increase:
- American aid, which was lower than that paid to other countries but very important for the poor Spanish economy. This assistance led to an increase in imports of industrial products.
- The economic policies of a new government formed in 1951, with the participation of Falangists and Catholics who had more technical preparation and a more liberal agenda.
There was a growth in imports of commodities such as petrol and machinery. Due to a halt in exports, Spain had a large deficit in its trade balance. In domestic trade, the ration card was removed, but without full liberalization, so prices were monitored. The growth of agricultural production was lower than industrial. As an attempt to solve this, the government drafted the Land Consolidation Act to resolve the issue of small farms and the Farm Act, which introduced improvements.
The uncritical economic situation and the new international relations of the system forced Franco to make a new change of government in 1957, in which ministers came as men who came from OPUS DEI. The new government tried to stop the deficit of the state by conducting tax reform, but the biggest change came in 1959 with the Stabilization Plan that started a new economic era.