Franco’s Regime: Autarky, Development, and Transition
Autarky and Initial Repression in Francoist Spain
Initially, agriculture, industry, trade, and services were intended to be self-sufficient to supply Spanish demand. The aim was self-sufficiency, driven by both vocation and the foreign boycott of the Franco regime. However, this was not possible due to several factors: land reform was reversed by returning lands to their original owners, agricultural technology was underdeveloped, there was a lack of capital for investment, raw material shortages were prevalent, economic cooperation with other countries was impossible, and there was a lack of basic industry and infrastructure. The creation of the National Institute of Colonization in 1939 was insufficient, technical backwardness persisted, fertilizers were scarce, and a severe drought occurred. National wheat farmers were forced to surrender most of their crops at a regulated price.
The consequences were a long process of rationing commodities (and a thriving black market), a lower per capita income (which only equaled that of 1935 in 1953), protest movements (strikes and guerrilla warfare), and estrangement from the West.
The policy was interventionist and protectionist, with high tariffs to protect domestic products from foreign competition. This also led to influence peddling, cronyism, and corruption. In a culture of war economy, the state sought complete control of the economy, including wages, prices, agricultural production, trade (through import quotas and exchange control), and foreign investment. The state was directly involved in the economy through state-owned enterprises (SOEs) such as Endesa (electricity), Seat, and Enasa (transport). Most of these companies were incorporated into the state holding company called the Instituto Nacional de Industria (INI) in 1941. Due to business pressures, INI would later assist private industry.
The market was very poor and small, with shortages of energy and raw materials, and very poor communications. Autarkic development was thwarted. The policies were costly with limited results. Consumer goods were scarce and inflation was high. Foreign trade was in persistent deficit, systematically destroying the currency. At the end of the 1950s, there was a total crisis, with a lack of currency and a threat of bankruptcy.
Repression was very harsh. In addition to the exile of around 500,000 Spaniards, the Law of Political Responsibilities (1939) acted retroactively, reaching back to 1934 and condemning those who had held sympathies and political responsibilities in the Republic. In 1940, the Suppression of Freemasonry and Communism law was passed, followed by the State Security Law the next year. There were more than 100,000 inmates in prisons and concentration camps, with widespread torture, beatings, and deaths. Many were subjected to redemption penalties for work, known as “slaves of Franco.” Suspects who remained at large were purged, especially officials and teachers. Anyone who had had a relationship with the Republic was removed from all responsibility. The so-called General Cause investigated all the crimes of the Republicans. Fear took hold of Spanish society. Armed guerrilla resistance (the Maquis), composed of communists and anarchists, was only possible in some areas of Spain. Secrecy became a way of life.
Development and International Relations
This second phase of the Franco regime is characterized by the end of autarky, the first contacts with foreign economies, and social unrest born of rising inflation. It also marks the beginning of a new era in the Cold War, with the signing of treaties with the U.S. and the Vatican. International isolation was broken by the approach to the U.S. on its anti-communist side. Spain first entered the FAO, followed by the WHO and UNESCO. Hispanic pacts were signed in 1953. The agreement with the U.S. meant economic assistance (625 million dollars) and military aid, in exchange for four military bases at Torrejón, Zaragoza, Morón, and Rota. This was also the step to join the UN (1955), the World Bank, and the IMF. Spain also joined the Organization of European Economic Cooperation (OECD) in 1960, in an attempt to enter the EEC.
The Concordat with the Holy See included the right to appoint bishops by Franco, religious education, tax exemptions, other legal privileges, and economic provision of the diocese. Opus Dei gained prominence.
The normalization of international relations made the failure of autarky more evident. The first U.S. aid ended bread rationing, although the situation later returned.
As for politics, the Franco family remained in power, with Admiral Carrero Blanco (and his henchman, Muñoz Grandes) gaining special relevance as the main supporter of the first technocrats of Opus Dei, a group of liberal economists close to government policy. Reformist ministers belonging to the ACNP, such as Ruiz-Giménez in the Education portfolio, represented a shy remodeling. In 1958, the Principles of the Movement were enacted, emphasizing the unity of political and social groups. They could not be altered even by referendum. An oath was required when taking possession of any political office. The opposition was in exile and in the Maquis. The press was controlled by censorship, although some tentative opening began. In 1963, the Public Order Court (TOP) was created to replace the Court for the Repression of Freemasonry and Communism. There was less repression, but also less military jurisdiction.
Economic Stabilization and Development Plans
Given the economic situation, which was on the verge of bankruptcy, there was a change in government. Franco appointed as ministers Navarro Rubio (Finance), Alberto Ullastres (Trade), and López Rodó (General Technical Secretariat), technocrats belonging to Opus Dei. This administration took the initiative to reorganize the economy. The Stabilization Plan (1959) radically liberated the economic model by:
- Submission to external economic discipline
- Trade liberalization, devaluation of the peseta (promoting exports and curbing imports) to 60 pesetas per dollar
- Acceptance of foreign capital
- Foreign exchange inflows from migration and tourism development
- Elimination of state intervention and no public debt issuance
Prices were contained by a tax law that curbed demand and public spending, affecting wages.
This economic revival gave rise to a new stage of continuous development, a Spanish economic miracle that led the Spanish economy into the ranks of industrialized countries. The Economic Stabilization Plan of 1959 was crucial, ending autarky. It was followed by three successive Development Plans, primarily aimed at stopping inflation and bringing legislation in line with international economic norms. The immediate effects of the plan were an improved balance of payments and a severe recession, embodied in a reduction in demand and rising unemployment, which led to emigration. Migrants sent remittances, improving the balance of payments. The key to success was that the world economy was booming. Industrial countries, especially in Europe, began a period of sustained growth and were a market for Spanish goods and employment opportunities for migrants. Tourism also benefited, creating jobs, wealth, and currency. It also boosted the rest of the economy, including construction and industry.
Development Plans
The first Development Plan (1963-67) created centers of Industrial Promotion and Development to mitigate the serious regional imbalances of economic growth. The second (1968-1971) placed greater emphasis on agriculture, and the third (1972-1975) trimmed its projects due to the economic crisis. Some believe that the economy grew despite the development plans. Tourism and construction rose notably. Although no formal plan was fully met, the Spanish economy grew in the 1960s. The rise in prices due to the disorder maintained, and the cost of living, led workers to demand further increases, preventing structural improvements. Uncontrolled speculation also played a role. The third plan was thwarted by the oil crisis.
During this period, economic growth was accompanied by profound structural changes. The rural exodus increased the workforce in the secondary and tertiary sectors. Energy consumption shifted from coal to oil. Modern industrial systems became widespread. From a spatial point of view, the coastal periphery and Madrid attracted industry and tourism, while the countryside was deserted.
The population was affected by these changes, with a higher birth rate and new migration patterns: rural exodus, migration to Europe (Germany, France, Switzerland) either temporarily (for harvests) or permanently. The growth of cities was chaotic in many cases. The middle class and the industrial proletariat increased. A consumer society began to emerge, along with a more modern era (the era of the “Seat 600”). All this had an impact on political demands. Labor movements and political groups increased, including the PCE, clandestine unions, and the Workers’ Commissions. This organization was persecuted, and its leaders were prosecuted and imprisoned (Process 1001).
Political Changes and the End of the Regime
Manuel Fraga, Minister of Information and Tourism, presented the Press Law, eliminating prior censorship (but not all censorship). Villar Palasí introduced the General Education Law in 1970, extending compulsory schooling to 14 years. The Organic Law of the State was approved by referendum in 1966 with unprecedented propaganda, endowing the regime with a kind of constitution to try to meet the demands of democratic countries of the EEC. To prevent the EEC from approving the regime, a congress was organized in Munich where Spanish personalities (Madariaga, Gil Robles, Ridruejo) and political groups drew up a timid manifesto against it. The regime reacted violently against the “conspiracy of Munich” and expelled the participants.
The Matesa affair (1969), a corruption case involving a textile machinery company with a wide system of protection, exposed the conflict between technocrats and Falangists. The crisis was shut down by a single-color government in which Carrero Blanco emerged as a strongman. The Burgos Trial, which condemned 16 members of ETA to death, provoked a major international reaction. Franco responded with repression and expressions of acclaim in the Plaza de Oriente. Finally, he was forced to pardon the condemned.
The Final Crisis
A critical moment for the crisis of the regime was the assassination of Admiral Carrero Blanco by ETA. Franco had decided to stop being president of the government and had left that role to Carrero. With his death, the natural succession of Franco was cut short. The regime’s reaction was a clash between hardliners (the “bunker”) and the openings or reformers. A government was formed with Carlos Arias Navarro, who seemed to offer an opening (the “spirit of February”), but proved unable to democratize. Some ministers resigned, protests became more intense (strikes, riots, bombings), and the government’s only recourse was repression (arrests, anti-terrorism laws, censorship).
In addition to ETA, other terrorist groups emerged, such as FRAP and GRAPO. The opposition organized into the Democratic Junta of Spain and the Democratic Convergence Platform. Within the military, the Democratic Military Union (UMD) was formed.
During 1974-75, Franco’s illness prevented him from governing, and Prince Juan Carlos had to assume the interim head of state but without real power. The opposition organized by creating platforms for action. In 1975, a new law punishing terrorism with the death penalty was passed, leading to the condemnation of five ETA and FRAP activists. The sentences were carried out despite international outcry.
Then came the conflict of the Sahara desert, rich in phosphates and coveted by Morocco and Mauritania. In 1973, the Polisario Front, a nationalist and socialist group, had been created. Spain agreed to decolonization and allowed a referendum. Hassan II, King of Morocco, with U.S. support, organized the Green March in October, during Franco’s final agony, a peaceful invasion of the territory that mobilized thousands of civilians. Faced with the danger of war, Spain ceded, and on November 14, the Madrid Agreement was signed, delivering the Sahara to Morocco and Mauritania.
Franco died on November 20, 1975, claiming that everything was “tied up and well tied” because “after Franco, the institutions.”