Spain’s Post-War Economic Transformation: From Autarky to Boom
Spain’s Post-War Economic Transformation: From Autarky to Boom
The Consolidation of the Franco Regime
After the war and throughout the 1950s, widespread dissatisfaction with Spain’s economic situation grew, despite international recognition. Between 1956 and 1958, the first workers’ protests and student dissent emerged. Faced with these conflicts, Franco was compelled to abandon the autarky system and form a new government of technocrats, leading to the economic boom of the 1960s.
Autarky and its Consequences
Autarky, the post-war economic system aimed at national recovery, was based on self-sufficiency, strong state intervention, and the ambition of transforming Spain into a world power. Measures included import restrictions, promotion of national industries (often resulting in overpriced, low-quality products), forced sales of agricultural surpluses to the state, rationing of basic goods (until 1952), and the creation of the Instituto Nacional de Industria (INI) to establish government-controlled enterprises. However, these policies proved disastrous, leading to:
- Stagnant industrial production
- Increased inflation
- Poor agricultural productivity and land abandonment
- Reduced international trade
- Widespread hunger and malnutrition (estimated 100,000 deaths between the war’s end and 1945)
- Lower wages and rising unemployment
- A thriving black market and corruption
The failure of autarky to achieve its goals, coupled with partial price liberalization after 1951, increased trade and movement, the end of rationing, and assistance from the U.S. and new international relations, ultimately led to its demise.
The Economic Miracle (1959-1970)
The subsequent economic development, spanning 1959-1970, was based on integration with Western economies, but without significant political evolution. In 1957, a new government of “technocrats,” many affiliated with Opus Dei (such as Mariano Navarro Rubio and Alberto Ullastres), was formed. Their objectives were Spain’s reintegration into the international financial and commercial system, and the modernization, liberalization, and consolidation of the Spanish economy.
Key measures included currency devaluation (to boost international trade), reduced public spending, and the partial liberalization of trade barriers to attract foreign investment. Initially (1959-1960), there was a period of adjustment with falling wages, prices, and consumption, but a lower deficit and capital accumulation paved the way for the boom that began in 1961.
Drivers of the Boom
- Expansion of the industrial and service sectors
- Industrial growth fueled by low wages, foreign investment, and technology, creating dependence on foreign markets and new industrial centers like Madrid
- Rural exodus due to agricultural mechanization and urbanization
- Emigration of workers to Europe
- Stabilization of the balance of payments deficit through tourism, foreign investment, and remittances from migrant workers
Four-year economic plans, starting in 1964, further channeled and stimulated development through tax incentives and state intervention. However, the 1973 oil crisis, exposing Spain’s external dependence, ultimately stalled this progress.
Social and Political Changes
By the early 1970s, Spain was the tenth most industrialized nation globally, boasting high production in sectors like steel, cement, automobiles, electricity, and shipbuilding, but lacking in technology, capital, and energy resources, resulting in significant external dependence. Significant regional imbalances and agricultural backwardness persisted. This economic growth spurred significant social transformation:
- The 1960s baby boom increased the population from 30 to 33 million.
- The urban middle class grew to 50% of the population by 1970.
- Values and ideas shifted, transforming consumer habits and leisure activities.
- Greater opportunities for women, including university access and employment.
- Increased Europeanization of culture, leading to a rejection of fascism and the Church.
- Educational reforms reduced illiteracy to 1.5%, with a tenfold increase in universities during the 1960s.
- Rural exodus and influx of tourists.
Despite significant economic progress, ideological change remained limited, with the regime firmly upholding its principles.
Consolidation of Power and Legislative Measures
Key features of this period include the consolidation of power under Carrero Blanco and López Rodó, the technocratic government, and various legislative measures. These included the Basic Law of Social Security (1963), the Press Act (1966) which eased censorship, the Organic Law of the State (1967), establishing religious freedom and separating the head of state from the president of government, and the establishment of family attorneys elected by the people.
In 1969, Juan Carlos I was named heir, with Franco expecting the continuation of his policies under dictatorial values. The Mates scandal of 1969, involving fraud by an Opus Dei member’s company, led to the technocrats’ downfall and increased press censorship under Carrero Blanco.
Foreign Policy
Spain’s attempts to join the EEC were thwarted due to its non-democratic status. A process of decolonization affected Morocco, Equatorial Guinea, and Spanish Sahara.