The Industrial Revolution and Underdevelopment in Spain
THEME 2: The Industrial Revolution
Economics and Finance
The nobility retained some privileges, aspiring to join the affluent bourgeois nobility and gain independent wealth. Diplomatic and military careers remained exclusive to them. The Church continued to collect tithes but lost influence. All were equal before the law, but economic disparities and the nature of property ownership persisted.
Artisans were still needed for many tasks, particularly finishing parts in factories. The state paid teachers, and more lawyers and tax inspectors were required. The government aimed to control education to avoid critical thinking and dissent. University systems were regulated to train technical personnel.
It was common for peasants to take on home-based work in the 16th and 17th centuries to supplement their income. Peasant migration to cities was driven by population growth, land enclosures, and rising rents. The workday, determined by daylight hours, extended to urban settings. Factories employed more women and children than men, leading to increased promiscuity.
Spain experienced severe financial crises during the 18th and 19th centuries. The economic system was inefficient and unfair. The monarchy relied on resources from American colonies and trade tariffs to address its financial problems. The crown received a percentage of all precious metals mined in the colonies. Most resources were spent on unsuccessful imperialist foreign policies, neglecting industrialization.
The emancipation of American colonies in 1820 (leaving only Cuba, Puerto Rico, and the Antilles) and the inadequate liberal tax reform exacerbated the financial crisis. This reform reduced the number of taxes to four: two direct (property tax on livestock and land, and a proportional tax on industrial income) and one indirect (consumption tax). None of these taxes were levied on estimated income, encouraging tax evasion among landowners. The industrial tax burden was very low and based on estimated local surface area and machinery. Most shops paid taxes based on entrance gates and meter counters. Corporations and shareholders were exempt from taxes. Most taxes fell on consumption, disproportionately affecting the poor.
Spain’s late and flawed tax reform was unfair, disproportionate, and failed to resolve the financial crisis. This lack of resources hindered the development of infrastructure. The clergy and military received more funding than education, consuming over half the budget. This was deliberate, as the bourgeoisie controlled the legislature. The illiteracy rate exceeded 60% (80% in Granada), and the workforce was poorly qualified.
The state borrowed from friends, offering high-interest rates that artificially increased borrowing costs and hindered investment. When the state defaulted on its debt, it declared it extinguished, defrauding those who had purchased it. Foreign bank loans were also defaulted on, then converted into national strategic interests, allowing the state to seize and charge debtors. All this contributed to underdevelopment and external dependence. The fiscal deficit only began to improve in the late 19th and early 20th centuries, recurring in the 1960s.
Liberal Land Reform: Facilitating the Development of Capitalism in Agriculture
The goal was to remove feudal restrictions and promote capitalist development in agriculture. This liberalization was intended to drive liberalization across the entire production system. It also aimed to generate revenue to offset the national debt. While the Spanish economy transitioned away from the feudal model, it failed to achieve its other objectives. Following land reform, traditional agriculture remained inefficient and did not contribute to modernization. The substantial financial resources generated by the reform were mismanaged and failed to finance development.
The three key elements were:
“The confiscation. “The abolition of the feudal. “The abolition of primogeniture and linkages. This is done in all European countries. Are measures of economic and legislative suppress the feudal system. Any private property can not be deleted. Communal properties are not profitable does not leave an individual benefit. The land transactions (the Church) and entails disappear. This confiscation is done gradually. Also disappear corporate land councils, community … Godoy in the eighteenth century and appropriated all the land of the orders of charity. But those high profits are consumed in the wars against England. 1835 – 1837 The confiscation of Mendizabal. Back to the liberal state, the Carlist uprising. Church was dispossessed of all his property not necessary for worship to be rationalized and privatized public auction. The 2nd objective is to obtain the proceeds to build an army to fight and they won the Carlist wars and win support for the liberal cause. All purchasers of land would be of the liberal cause because if they won them back the absolutists is the Church. These lands were sold in small batches and are auctioned. There was a group within liberal thought there would be a country of smallholders. Where had these small owners of the land bought. Where there were only tenants, they could not buy anything, and passed into the hands of those who already had property and money. There were facilities for payment, but the structure remained broadly as bad. The latest confiscation was in the days of 1850 and was called the confiscation of Madoz. This is also called civil or general, because eventually privatize everything that previously had not been privatized, especially in the municipalities. Political weakening of the Spanish Church. Eventually the church had to give up and submitted to the liberal state, but still extremely reactionary. The confiscation and other measures the Liberal State, did not favor the modernization of agriculture. The new owners continued the previous model, the financier, failing to exploit the land for themselves and avoiding the improvement of the peasants who rented land. The investments were not rewarded, because they will make improvements that went against them by increasing their value. Capitalism, railways and mining: The pasture land and cultivated forest, ecological disaster. Productivity fell and there was a food deficit that caused were to import grain in 1860. The foreign capital invested in Spain, technology and expertise. The benefits of these were repatriated to countries of origin. Certain industrial centers, especially mining, were foci migration that changed the economy of the area. The explosives industry, the largest chemical industry in the nineteenth century.The development of the mining sector in the short term, he promoted the creation of technical schools (railways). Demand for goods and services of all kinds. In the province of Vizcaya, industries were mixed, with much of the property remained in Spain. The steel sector was the largest in the country. There were coal and iron (English coal that came as ballast in ships). Establishing the Bank and the Bilbao Vizcaya. Rapidly industrializing region. The overall economy was dependent and underdeveloped in general. The nineteenth century economic policy was based on the decisions of benefits to the agrarian oligarchy. The bourgeoisie, especially the Basque and Catalan press to reach an agreement that goes from building to foreign capital, a nationalistic policy, both extreme protectionist agrarian industrial. Few barriers to imports of products needed for industry and foreign competition will prevail. Lock the food import and export free. The Restoration, reflects the existence of a backward agriculture with small farms and small melted. The olive tree went into crisis with the loss of the colonies, was used to lubricate machine and making soaps. Is improved refining and begins to conquer markets in Europe and America. The wines were generally of poor quality, except Malaga and Jerez, was used in Europe to raise the level of European wines. The phylloxera crisis in Europe, who came late to Spain, Spanish wines caused replaced France in the domain of the market. American vines that were injected were immune to the disease. Sugar beets began to be used industrially in Granada. Citrus was an export sector. The grapes in Malaga and Levante. There is no industry sector that is competitive in Spain and abroad. Catalonia is Spain’s factory, which frustrates the creation of local industries, like iron in the Basque Country. In the late nineteenth century, Spain was full of small hydro, German technology, which make use of rivers and waterfalls that make you change the dependency of steam. The service sector, financial system appears a native, high power in Spain. Is replaced by the national foreign banks as a result of capital repatriation from Cuba and the Philippines, due to industrialization of the Basque Country and Catalonia. This bank has great size and participation in industrial enterprises. The railway was in crisis. It was built wrong, not thinking about their profitability, because it was thought more in construction. The weakness of the economy makes it uneconomic railway lines. Occurs Internal reorganization and there are only three lines. In the middle of a World War II, the iron mines of Alquife, remain closed due to lack of wagons to transport iron. Underdevelopment Spanish: Underdevelopment in Spanish was influenced by a series of political elements , lack of indigenous capital could not come from a backward agriculture, trade or colonial ends. All this leads to dependency on foreign capital, limited population growth, traditional farming methods, which suspended the transfer of labor to the industry. The low per capita income of Spanish society that prevented the growth of domestic consumption. High costs and inefficiency of land transport, railway, which was more expensive products and less competitive. Also the shortage of energy resources. The poor quality of the Asturian coal with high sulfur and presenting more fragmented veins cause costs to rise from it. Low cultural level, illiteracy, low human capital so.Except Catalonia, where if you made a worker’s qualification policy. “Ramon Tamames, said that in Spain lack entrepreneurship. Low technology, lack of internal capital inflows from abroad. Low demand due to low income. Tortella-Ramon, said that the backwardness of the Spanish economy is in the same nature as the rest of the Mediterranean in general and has much to do with the backwardness of agriculture, due to physical and economic constraints. Here utiilzar could not remove the machinery for the earth, this lost moisture. The continuing political turmoil, instability of the liberal system had much to do.