Franco’s Spain: Post-War Economic Policies and Political Foundations
Spain’s Post-War Economic Policy Under Franco’s Regime: Stagnation and Autarky
The physical destruction after the civil war, coupled with an autarkic economic policy and substantial government intervention, caused the Spanish economy to stagnate during the 1940s. Autarkic measures aimed to achieve self-sufficiency, neglecting items that could have been produced domestically. Following the precedent of dictator Primo de Rivera, the state heavily intervened in the economy.
The government tightly controlled all production activities, with decrees and laws dictating distribution, consumption, wages, prices, trade, and investment. Key measures included:
- a) Limiting Imports: Quantitatively restricting foreign product purchases to protect domestic firms. Only essential imports (cotton, oil, rubber) were allowed. Protection was supplemented with grants and tax benefits.
- b) Organizing Grain Production and Distribution: Forcing growers to sell their harvest to the National Grain Service (NTS), which set prices and sold to flour manufacturers.
- c) Implementing Rationing: A system of rationing consumer goods was implemented to prevent hunger and ensure a minimum food supply. Rationing through individual primers lasted from the end of the war until 1952.
- d) Establishing the National Institute of Industry (INI) in 1941: Under the leadership of Suanzes, a military friend of Franco, the INI aimed to boost industrialization by creating state-controlled public companies in sectors like steel (ENSIDESA), energy (Endesa), shipbuilding (Bazan), communications (Iberia, U.S. Air), vehicle manufacturing (Pegasus, SEAT, House), mining, and armaments. These heavily protected state enterprises, often lacking quality and competitiveness, struggled to export.
- e) Establishing RENFE in 1941: Nationalizing the entire peninsula’s railway network.
Franco’s state intervention favored landowners, business leaders, and gentry who had supported his victory. The impacts of autarkic policies were:
- Decrease in per capita income, with Spain’s growth rate significantly lower than Italy or France.
- Rollback of industrial production due to lack of raw materials, capital, machinery, and modern technology.
- High inflation due to excessive money printing to finance state debt.
- Trade deficit caused by the lack of competitiveness of Spanish industrial items.
- Decreased standard of living, low wages, and widespread hunger.
- The emergence of the black market.
Political-Institutional Foundations of the Franco Regime
The core of the political system was Franco’s dictatorial power as head of state, Prime Minister, and Generalissimo. Key features of the state after Franco’s victory included:
- Total concentration of powers (executive, military, legislative, and judicial) in Franco’s hands.
- Rejection of democratic principles, universal suffrage, political pluralism, and separation of powers.
- Restriction of freedom of expression.
- Lack of a written constitution and slow institutionalization of the regime. The fundamental law was elaborated between 1942 and 1967 by Admiral Luis Carrero Blanco, who became Franco’s most important collaborator from 1941 until his assassination in 1973.
To understand the Franco regime’s ideological principles and institutions, it is necessary to examine various pieces of legislation, such as:
- a) The Law Courts (1942): This re-established the traditional parliamentary body but stripped it of legislative powers. Franco retained exclusive power to enact laws. The courts’ role was limited to discussing government-prepared bills, approving them, and applauding Franco’s speeches.