Spanish Economy 1898-1936: Growth, Crisis, and Agrarian Reform
Economy and Society (1898-1936)
1. The Evolution of the Economy and Economic Policy
The Spanish economy in the first third of the 20th century experienced moderate growth interrupted by the Civil War. State intervention to protect domestic production was a dominant trend in Europe during this period, influenced by the economic emergence of the United States.
1.1 From Colonial Loss to World War I
Following the loss of Cuba and the Philippines in 1898, Spain’s economy recovered. The first decade of the 20th century saw growth in agricultural production and industrial diversification and concentration. The loss of the colonies had a less significant impact on the economy than anticipated.
1.2 Reign of Alfonso XIII
During Alfonso XIII’s reign, customs protectionism continued, and the government sought a balanced budget by increasing treasury revenues. Attempts at fiscal reform were hampered by powerful economic groups.
1.3 The Dictatorship of Primo de Rivera
Primo de Rivera’s dictatorship reinforced protectionism, encouraged business concentration, and invested in public works. The economic balance of this period is generally considered positive. However, the final years saw a recession due to poor harvests, the peseta’s devaluation, and a growing deficit.
1.4 The Second Republic and the Global Economic Crisis
Protectionism shielded the Spanish economy from some of the worst effects of the global crisis. Economic policy focused on maintaining high wages, establishing a minimum wage, and keeping the peseta’s exchange rate high. This reduced exports but increased domestic demand, benefiting the textile industry. However, public investment was hampered by the reformist government’s deficit spending, exacerbating difficulties and social tensions.
2. The Agrarian Problem
2.1 The Situation of Agriculture
Modernizing reforms aimed at addressing agricultural backwardness, which hindered industrial development, culminated in the Second Republic’s agrarian reform.
2.1.1 Structure of the Land: Problems and Solutions
Unequal land distribution contributed to low agricultural yields and hampered technological advancements seen in other Western countries. Peasant poverty led to significant social unrest, such as the revolts of 1905 and the “Bolshevik Triennium” (1918-1921). A 1907 law allowed for land colonization, and by 1917, the state purchased land for distribution among villagers. Legislative measures promoted irrigation, considered crucial for modernizing agriculture. Regenerationists prioritized irrigation in public works plans. Hydrographic Confederations were created in 1902 under Primo de Rivera, and the Second Republic adopted the Posada Irrigation Works Law (1932) and the Hydraulic Works Plan (1933). These measures proved insufficient, and limited agrarian reform during the Second Republic led to further peasant revolts in Andalusia and Extremadura.
In Galicia, the foro system persisted, with landowners leasing land to tenant farmers in exchange for annual payments. Tenant farmers sought land ownership. In Catalonia, the rabassaires (sharecroppers) struggled for better conditions, addressed partly by the Cultivation Contracts Law of 1934.
2.2 The Evolution of Agriculture
The late 19th-century agrarian crisis, caused by the influx of cheap foodstuffs from the U.S. and Russia, was overcome by new tariffs. Agricultural growth was driven by increased cultivated land and moderate technological advancements, including fertilizers.
2.2.1 Agriculture in Catalonia
Strong urban and external demand stimulated growth. Expanding irrigation and railways further contributed to agricultural development. Factors involved in this growth included cultivating new land, improved tools, seed selection, and increased fertilizer use.
Cereal production expanded, but wheat prices remained low due to market saturation and competition from Italy and Argentina. The loss of Cuba and Puerto Rico, key markets for Catalan wine, caused a significant drop in wine prices. Some vineyards were replanted with other crops.
Tarragona and Lleida became major olive-producing areas, with Catalan oil sales accounting for almost half of Spain’s total. Improved industrial processes facilitated this growth.