Economic & Social Change in Spain (1959-1975): From Stabilization to Transformation

Posted on Aug 19, 2024 in Geography

Economic Development and Social Change (1959-1975)

Stabilization Plan and Economic Growth Factors

Since 1953, the international situation began to shift. Financial aid received between 1953 and 1956, however, failed to salvage the desperate economic situation, and the first signs of discontent began to emerge. The government then started appointing members of Opus Dei, such as Lopez Rodo, Lopez Bravo, and Lopez de Letona, as “technocrats.” These individuals initiated corrective economic policies known as the Stabilization Plan (1959). This plan symbolized the end of autarky and the beginning of industrial development. Its origins stemmed from:

1. The failure of gold and currency reserves to address the imbalance between imports and exports.
2. The need to accept foreign capital.

The Spanish government had to commit to:

1. Reduce interventionism and liberalize the economy.
2. Reform the public sector, limiting public spending to aid public and private companies.
3. Devalue the peseta.
4. Raise interest rates.

In return, they achieved:

1. Credits from the International Monetary Fund and the OECD.
2. Capital inflows from foreign countries and multinational corporations to balance the internal and external markets.
3. Curbing inflation, stabilizing prices, and wages.

Initial Effects: The plan’s initial effects were negative. The liberalization of commodity prices led to a rise in the cost of living, a drop in real wages (meaning a loss of purchasing power for the population), and increased unemployment.

Positive Effects: Positive effects began to be felt from 1961 onward, marking the start of a period of sustained economic expansion, particularly dramatic from 1963. The liberalization program was complemented by the implementation of the Plans of Economic and Social Development, which were purely indicative. Three four-year plans were enacted: (1964-67), (1968-71), and (1971-75). These plans focused on the industrial sector through two main lines of action:

1. Support for small and medium-sized enterprises, encouraging investment in certain sectors through subsidies and tax exemptions.
2. Creation of “industrial development zones” to reduce regional economic imbalances by promoting new industries in areas with low industrialization (Valladolid, Huelva, Burgos, Seville, etc.).

However, this plan was not the sole cause of the Spanish industrial boom, as its effects were limited. Private companies relied more on the favorable international economic climate than on state planning. From 1960 to 1966, the annual GDP growth rate was significantly above the average of other European countries. The product or income per capita increased by 160%.

Main Factors Contributing to Industrial Growth:

• Improved productivity through technology from abroad.
• Lower production costs, leading to a significant increase in exports.
• Increased wages and, consequently, increased demand for consumer goods.

The Spanish economic boom was based on the emergence of new economic resources, such as:

• Tourism: The favorable economic situation in Europe led to an influx of foreign tourists to Spain, attracted by its affordability, pleasant climate, and extensive coastal areas. Foreign exchange earnings from tourism became a major source of financing for Spanish development.
• Foreign Capital: Significant investment by foreign companies in Spain, attracted by low taxes, cheap labor without the right to strike, and a lack of environmental controls.
• Remittances from Spanish Migrants: The strong performance of the European economy attracted many Spaniards to work abroad. This provided the Franco dictatorship with a double benefit: remittances sent to relatives in Spain and a reduction in the unemployment rate.

Negative Aspects of Economic Development:

• Low job creation, leading to heavy emigration.
• A strong trend towards higher prices (due to rising agricultural prices).
• Rigidity in the service sector (due to a lack of regulation).
• Lack of modernization in the financial system.

Demographic Evolution

Between the censuses of 1960 and 1970, the Spanish population grew from thirty million to over thirty-three million. The birth rate began to decline from 21 per thousand in 1960 to 18 per thousand in 1970. This decline was partly due to later marriage ages and official restrictions on births. However, the natural increase (the difference between births and deaths) remained strong in the final phase of the dictatorship. The death rate, which had already begun to fall in the fifties, remained at levels similar to European countries like France and Italy. Consequently, the Spanish population began to age, although still lagging behind other European countries. Life expectancy increased, reaching 70 years for men and 76 for women in 1975.

Migration:

Internal Migrations: In the sixties, nearly four million Spaniards changed their place of residence within Spain. There was a strong migration trend towards cities, with the main receiving areas being Catalonia, the Basque Country, Madrid, Valencia, the Balearic Islands, and the Canary Islands. Emigration areas included Galicia, Extremadura, Andalusia, Castilla La Mancha, and Castilla Leon. The rural population moved to urban centers seeking better job opportunities and a different, more liberated lifestyle with personal advancement options. However, the influx of migrants into cities created infrastructure and housing problems. Many migrant families lived in precarious conditions in shantytowns. Cities grew disproportionately and uncontrollably, leading to urban planning blunders that still persist today.

External Migrations: Between 1959 and 1973, there was a significant flow of migrants to European countries. This was driven by the effects of the Stabilization Plan, which generated high unemployment, and the booming European economy of the 1960s, which needed labor. External migration reduced unemployment and allowed migrants to connect with free trade unions and political parties abroad.

Evolution of the Active Population: In the last stage of the Franco regime, the workforce in the primary sector was reduced by more than half, while it increased substantially in the secondary and tertiary sectors, placing Spain among the developed countries.

Education, Middle Classes, and the Working World

The significant economic expansion of the sixties and early seventies was accompanied by a major transformation of the socio-professional landscape. Cultural patterns and social behaviors also changed. Contributing to this change was the education system, culminating in the Education Act of 1970, which established compulsory education up to 14 years (General Basic Education). During these years, the school population and state investment in education increased. Illiteracy rates dropped dramatically to levels comparable to the most advanced countries.

Family Changes: Families began to experience changes that would deepen in the future. There was a growing trend towards strengthening the nuclear family (parents and children). Children were leaving the parental home earlier due to improved economic conditions. However, the incorporation of women into the workforce remained weak.

Household Improvements: Spanish households began to acquire new appliances like refrigerators, televisions, washing machines, and, in many cases, cars. The popular “Six Hundred” manufactured in the country was a symbol of a new mentality, even in the religious sphere. There was a demand for freedom of thought, and religious practice declined. A segment of the clergy, following the theses of Vatican II, began to demand more fundamental rights, distancing themselves from the regime. This was also the time of mass departures of many priests.

University Expansion: Universities saw an increase in student numbers. Movements arose within universities, and previously banned publications began to circulate in Spain. In summary, the period of significant Spanish economic development undoubtedly favored societal progress and changed rural patterns. However, instead of strengthening the regime, it weakened it politically and ideologically. As the standard of living rose, so did the demand for freedom and democracy.

The Oligarchies

Economic growth did not lead to a more equitable distribution of wealth. At the end of the Franco regime, about 1.2% of the Spanish population held 20% of the national wealth. These oligarchies were formed by large landowners and the major industrial and financial magnates who controlled the regime through their businesses and wealth.

The Middle Classes

The economic development of the sixties led to the emergence of a new urban middle class (civil servants, professionals, merchants, etc.) who were the main beneficiaries of the rising standard of living and increased consumption. However, as this middle class enjoyed a higher economic level, they also aspired to greater political freedoms, which the regime was unwilling to concede. This imbalance between economic development and political freedom paradoxically prepared Spanish society for the changes that would come in the near future.

The Working World

In the Countryside: Social change in the countryside was characterized by a decrease in the number of laborers, wage improvements, access to tenant ownership, and a loss of prestige and overall economic weight for landowners. This improvement in the situation of the countryside greatly facilitated the Spanish political transition, as the new arrangements did not have to face widespread tension in the country or implement urgent land reform.

In the Industrial Sector: A specialized industrial proletariat emerged, gaining increasing importance in an industrialized and urban society. The modern worker had greater purchasing power, with access to housing and the ability to provide education for their children. However, the massive influx of workers into industrial areas led to marginalized proletarian neighborhoods with poor urban infrastructure. Despite some improvements, many shortcomings persisted among the lower classes. In the sixties, 80% of households in Orense lacked running water, and 23% of household heads in Huelva were illiterate.

The Labor Movement: The labor movement also underwent a transformation. Before the war, it had an insurgent and revolutionary spirit. During the dictatorship, it organized around the clandestine Workers’ Commissions trade union, focusing on demands for higher wages and labor and democratic rights. Social housing initiatives and the extension of social security (health, pensions, etc.) to all workers contributed to a sense of improving social welfare among the working class. This more reformist approach of the labor movement made the middle class less fearful of the proletariat. This, combined with the more open-minded and dynamic attitude of the new bourgeoisie, prepared the middle class for the new political changes in society.

The Status of Women Under Franco: The general situation of women under Franco was one of subordination to men, with their primary role defined as motherhood and home care. Divorce was repealed, and the use of contraceptives was prohibited. Married women were subject to their husbands, needing written permission to work outside the home. Adultery was punishable only if committed by women, an extreme manifestation of machismo.

Education and Women: The Franco dictatorship banned co-education and imposed home economics and labor classes on girls to reinforce their role as housewives. Women could be fired from their jobs upon marriage, and their salaries were always lower than those of men. In the seventies, thanks to the Education Act, some aspects of Francoist legislation on unmarried women were changed, and co-education was reintroduced in public schools. Women gradually gained access to baccalaureate and university studies.