Francoist Spain: Economic and Social Transformation (1957-1975)

Posted on May 25, 2025 in Social sciences

The signing of the Concordat with the Vatican, the Madrid Pact with the U.S., and Spain’s entry into the UN and other international organizations were crucial for the Franco government. The influx of credits and loans alleviated some economic problems, and the government, without altering the regime’s core principles, sought to overcome the economic isolation of previous years.

In 1957, Franco, advised by Carrero Blanco, formed a new government that included members of Opus Dei. This move intensified divisions among reformists, conservatives, and hardliners. These new ministers from Opus Dei, whom Franco termed technocrats, were convinced that politics should not be intertwined with economics. They committed to extricating Spain from its economic crisis and modernizing its structures. The positive outcomes of the new government allowed the Franco regime to celebrate ‘XXV Years of Peace,’ presenting Franco as a successful politician and architect of peace.

Key Legislative Reforms Under Franco

New laws were proclaimed, including:

  • Law on the Legal Regime of State Administration: Modernized the administration and separated state government functions.
  • Collective Bargaining Act.
  • Law of Associations.
  • Press Law.
  • Religious Freedom Act.
  • General Education Law: Extended compulsory schooling to age 14.
  • Organic Law of the National Movement and the National Council.
  • Organic Law of the State.

Succession and Economic Stabilization

Carrero Blanco and Alonso Vega pressured Franco to appoint Don Juan Carlos de Borbón as heir to the throne. On July 22, 1969, Don Juan Carlos was named Prince of Spain and swore loyalty to Franco and the Fundamental Laws of the Movement.

Significant economic and social growth was fueled by substantial investments from developed countries, which also provided foreign exchange and attracted tourists. With the Stabilization Plan, the Spanish economy integrated with European countries, adopting key measures:

  • Credit was restricted to the private sector by eliminating subsidies to public enterprises.
  • The value of the peseta was fixed (1 US dollar = 60 pesetas).

These measures had negative effects, including increased taxes, rising unemployment, business closures, and external migration. Conversely, a significant positive effect was the surge in industrial exports.

Development Plans and Industrialization

Three Development Plans were established:

  1. The First (1964-1967)
  2. The Second (1968-1971)
  3. The Third (1972-1975)

Many economists argued these plans were ineffective because they overly focused on industries already experiencing rapid growth, such as automotive, steel, and chemicals. Furthermore, improvements in rail and road infrastructure were inadequate, and job creation remained weak. Thanks also to the influx of European tourists with a good standard of living, Spain transformed into an industrialized country.

Societal Shifts and Cultural Evolution

Women joined the workforce, student numbers increased, and the working class evolved. This economic transformation led to a population increase, a result of higher fertility rates and declining mortality. Regarding emigration, approximately 75% of Spanish emigrants eventually returned to Spain, while the remainder settled in their host countries.

The shift from an agrarian to an industrial economy profoundly changed the structure of Spanish society:

  • The number of agricultural laborers decreased.
  • Workers in industry and services grew.
  • The middle classes expanded, surpassing the working classes in size.
  • The upper classes constituted only 6% of the population.

The increase in the student population marked a success in social development, and growing religious freedom allowed many Spanish citizens to distance themselves from the Church. A higher economic level enabled many Spanish homes to acquire appliances, and the appearance of the SEAT 600 car had a major social impact, transforming the lives of many Spaniards. Consequently, a culture emerged that was increasingly aloof from and opposed to the regime.

Although Spain became an industrialized country by the 1970s, significant inequalities persisted: alongside thriving tourism and industrial areas, others remained dedicated to agriculture and were mired in underdevelopment. The generally low cultural level of the majority contrasted sharply with the high cultural level of a minority. This cultural lag hindered economic growth.