Economic Modernization and Industrial Change in Spain
Liberalism and Capitalist Economy Emergence
After Fernando VII’s death, a historical period began where Spain underwent significant economic changes, entailing the country’s progressive modernization. During these decades, the economic aspects of the Antiguo Régimen (Old Regime) – an archaic economy based on agriculture – disappeared, giving way to liberalism. A new capitalist economy emerged where industry, trade, and capital took center stage. This progress occurred during the Regencies of María Cristina de Borbón (1833-1843) and General Espartero (1840-1843), the reign of Elizabeth II (1843-1868), the Democratic Sexenio (1868-1874), and the early Bourbon Restoration.
Secularization and Agricultural Change
With the abolition of the manorial regime, disentailment (desamortización) was implemented. Two major disentailment laws were enacted:
- The Mendizábal Disentailment (1836-1837): An ecclesiastical confiscation affecting the clergy’s land and property.
- The General Disentailment by Pascual Madoz (1855): Included land and property belonging to the nobility, the Church, and local councils (municipios).
These confiscations served to reorganize (sanear) the Treasury and help finance wars. In agriculture, there was an increase in the cultivated land surface and greater crop specialization, including cereals, potatoes, corn, and wine. The prevailing Mediterranean trilogy (cereals, vines, and olives) dominated, and new agricultural regions emerged, such as La Rioja, La Mancha, and Andalusia.
Industrial Development: Textiles and Steel
Spain’s incorporation into the Industrial Revolution was slow. Two main industries stood out:
- Cotton Textiles in Catalonia: Developed by the Catalan bourgeoisie, who provided the necessary capital for new machinery. The cotton industry gradually overtook the traditional wool sector centered in Castile.
- Steel Industry in the Basque Country and Asturias: This industry had an early stage in Andalusia, processing iron. Later, an Asturian stage developed around the mining areas of Langreo and Mieres. The formative phase in Biscay led to the creation of the Altos Hornos de Vizcaya company. This industry was closely linked to shipbuilding and railway construction.
Mining Expansion
Mining developed significantly in the last quarter of the 19th century. Spain was rich in reserves of iron, copper, lead, zinc, and mercury. It also benefited from the proximity of deposits to port areas, which facilitated the transport and export of minerals.
Challenges to Industrialization
Spain faced limitations in its industrial development due to several factors:
- Low competitiveness of manufactured goods.
- A protectionist economic policy.
- Scarcity of domestic capital.
- Lack of a well-integrated national market with good communications infrastructure.
Infrastructure: Roads and Railways
Modernization efforts included infrastructure development. A road construction program began, improving ground transportation. However, the real revolution in land transport was the railway. During Bravo Murillo’s government, construction began on the first lines: Barcelona-Mataró, Madrid-Aranjuez, and Gijón-Langreo. During the Progressive Biennium (1854-1856), the General Railway Law of 1855 was published, prompting the construction of a major rail network.
The railway offered considerable advantages (ventajas): increased load capacity, superior speed and safety, and decreased travel time and cost. Many railway companies were financed by foreign capital, although Spanish capital predominated in others. The construction boom was interrupted by the financial crisis of 1866.
Financial and Monetary Reforms
Other key aspects of modernization included:
- The introduction of the peseta as the national currency in 1868.
- The creation of the Banco de España (Bank of Spain) to control and regulate the economy.
- A significant finance reform implemented under Narváez, known as the Mon-Santillán Reform (1845).