Franco’s Spain: Autarky, Repression, and Transition (1939-1975)

Posted on Dec 30, 2024 in History

Widespread Corruption and Autarky in Francoist Spain

Social life during Franco’s regime was based on “recommendations,” requiring connections with bureaucrats to navigate the hardships of the era. The economic hardship was addressed through a model inspired by Mussolini’s Italy and Hitler’s Germany: autarky. This economic policy, based on economic self-sufficiency and state intervention, could work if a country were rich in resources. However, Spain lacked meat, grain, fuel, rubber, and industrial spare parts. Another cause of this economic model was international isolation, suffering an international blockade due to the persistence of a fascist regime after World War II. This policy resulted in a major economic failure, with Spain lacking essential products and resorting to substitutes (e.g., diesel instead of gasoline). The regime’s propaganda attributed hunger and food shortages to a phenomenon called drought.

Interventionist Policy

The autarkic program began in 1939 with the Law on Protection and Promotion of National Industry and the Management Act and National Defense Industry. This involved reducing imports and direct state intervention in the economy. Key features of this policy included:

  1. The state set agricultural prices and forced farmers to surrender surplus crops. The National Grain Service (created in 1937) coordinated agricultural policy, setting fixed prices for cereals and legumes. Farmers had to sell their products to the state at low prices, leading to declining yields, scarcity, famine, and a widespread black market.
  2. The state attempted to boost the economy by creating state enterprises like RENFE (1940) and government agencies like the INI (National Institute of Industry), responsible for promoting companies such as ENDESA (1944), ENASA (1946), ENSIDESA (1950), and SEAT (1950). However, import restrictions prevented the availability of certain commodities (like oil) that the country could not produce, requiring expensive substitutes (e.g., oil derived from shale or gas generators for cars). Despite prioritizing the industrial sector, development faced serious problems: lack of raw materials, capital equipment, and energy. Production was limited to a small market, as employers could only export with a state license.

Wages fell below pre-Civil War levels, while prices increased dramatically, resulting in a loss of purchasing power. Inflation in the 1940s was the highest in Spain’s history. The postwar years marked a tremendous decline in the economy. The collapse of agricultural and industrial production led to a historical setback, with the primary sector again exceeding 50% of the national income.

Economic Stagnation and First Adjustments

The apparent failure of the autarkic model led to a shift in economic policy in the early 1950s. Partial liberalization of prices and trade was implemented, and food rationing ended in 1952. These measures brought some economic expansion, and in 1954, per capita income exceeded that of 1935, ending twenty years of economic stagnation. The Cold War and the change in American foreign policy led to U.S. economic aid starting in 1951. Although less than that received by countries under the Marshall Plan, this assistance allowed for imports of essential equipment for industrial development. However, this development brought high inflation and social unrest. The need for structural reforms was evident.

In 1957, Franco allowed a group of technocrats from Opus Dei, led by Lopez Rodo, into the government, promoting greater integration with the international economy. Spain joined organizations like the International Monetary Fund (IMF) and the Organization for European Economic Cooperation (OEEC). These new ministers designed the 1959 Stabilization Plan, aimed at curbing inflation and liberalizing the economy.

The liberalization measures in the 1950s had positive effects but also limitations:

  • Agriculture recovered growth levels from the 1930s. Mechanization and fertilizer use began to spread.
  • Protectionism on grain production continued, but at a higher market price, thus subsidizing the industry and leading to surpluses.
  • A technical agrarian reform began, without changes in ownership but colonizing new irrigation areas. Land consolidation started, allowing for incipient mechanization, and a water policy (dams, reservoirs) was adopted to extend irrigation.
  • Industrial growth was significant, highlighting the negative aspects of international isolation. Despite the development of hydropower starting in 1955, dependence on oil became significant.
  • Difficulties in financing ambitious growth and investment, lack of economic resources, and a trade deficit caused production bottlenecks. Companies struggled to pay for imports in foreign currency (e.g., ENSIDESA resorted to costly foreign loans, with interest payments becoming a huge burden).

Political Developments in Franco’s Spain (1959-1975)

Institutional Development and Internal Struggles for Power

Despite profound economic and social changes in the 1960s, immobility and lack of significant change characterized the politics of the period. However, some new elements emerged that would later have great significance:

  • The resurgence of nationalist tensions and the emergence of ETA terrorism. In 1959, a group of youths left the PNV and created ETA, Euzkadi ta Askatasuna (Basque Homeland and Freedom). This radical nationalist organization later adopted terrorist tactics.
  • An increase in labor disputes since 1961. Strike demands shifted from labor issues (wages, working hours) to political complaints (trade unions and political freedoms). The regime’s response to dissent remained purely repressive.

Two examples illustrate this:

  • In 1963, an underground Communist Party member, Julian Grimau, was executed for crimes committed during the Civil War, sparking international protests.
  • In 1962, after Spain requested to join the EEC, representatives of the liberal right living in exile met in Munich and asked that Spain not be admitted until it established a democratic country based on political freedoms. The Francoist press organized a huge scandal against what was called the Munich conspiracy.

The regime implemented small and inadequate legislative changes that did not alter its dictatorial essence:

  • The 1966 Press Law, adopted by then-Information Minister Manuel Fraga, lifted some censorship but did not represent significant progress.
  • The 1967 Organic Law of the State, the last of the Fundamental Laws of the Kingdom, brought no significant changes. This law was meant to be a culmination of all previous Fundamental Laws, presented as the final “constitution” of Spain. However, it did not come from the deliberation of any democratic assembly.

Forced by his advanced age, Franco appointed Juan Carlos de Borbon, grandson of Alfonso XIII, as his successor “as King” in 1969. The dictator’s age and growing opposition led to two tendencies within the regime:

  • “Openness” supporters, who, without questioning Franco, defended the need for small reforms towards a democratic and parliamentary basis.
  • The “bunker,” comprising the most extreme and violent elements, opposed to any change.

The division between them became evident in 1969 with the Matesa scandal. To alleviate Franco’s daily tasks, in 1973, Carrero Blanco, a hard-line military supporter, was appointed Prime Minister, with Carlos Arias Navarro as Minister of the Interior.

The new government organized the Process 1001 trial against leaders of the clandestine union CCOO on December 20, 1973. That same day, ETA assassinated Carrero Blanco in Madrid. The death of his main partner and manager to maintain continuity without change was a blow to Franco, who was increasingly close to his death.

After Carrero Blanco’s death, Franco appointed Carlos Arias Navarro, representing the hard-line dictatorship, as Prime Minister. Technocrats were driven from power, and the new government, consisting of ministers with Falangist backgrounds, was unable to reconcile a theoretical opening with Franco’s repressive practices. This disappointed both conservatives and those willing to embrace reforms.

Finally, on November 20, 1975, Franco died, leaving behind a collapsed state, with only his figure and a major repressive apparatus still standing.

International Relations

The dictator’s life ended in a complex and conflictive environment from the point of view of international relations, particularly regarding Spanish possessions in Africa.