Industrialization in Spain (1845-1890): Agriculture, Mining, and Energy
Industrialization in Spain (1845-1890)
1. Agriculture
During the nineteenth century, domestic product and agricultural production grew due to population growth.
Between 1800 and 1888, the area plowed grew, which decreased livestock. Most of the soil was used to grow grain, and Spanish weather conditions were hardly conducive to cereal production.
The evolution of the agricultural system was negative, as a lot of land had to be left fallow. Vineyards were followed by cereal crops.
As there was no major change in the nineteenth century, growth was based on an extensive model of disentailed cultivated land. Traditional agriculture dominated, but modern agriculture (Mediterranean and Levant) was effective and able to compete in the international market.
Prices were converging in a way that practically unified them. In Barcelona and Valladolid, prices remained stable and grew because of the railway that united the market (although it had been established before).
Why was there a lack of modernization in cereal production?
Natural conditions: the Castilian soil was not conducive to cereal production. The structure was twofold: small farms (consisting of small owners without the financial capacity to upgrade) and large estates (which did not initiate the process of modernization because they would not take risks and settled with the insurance benefit). These estates were based on extreme exploitation of labor and also imposed a protectionist policy to prevent foreign grain from entering. This policy was started by smallholders mobilized by large landowners.
Protectionism also influenced other agricultural sectors. Other countries responded to Spain by putting high tariffs on other products, preventing the rest of the economy from developing.
2. Mining and Energy
2.1. Non-Energy Mining
The Spanish subsoil had a good allocation of resources compared to Europe, but its development was late (1860-1913). Between 1860 and 1880, Spain was the leading producer of lead, and between 1889 and 1890, the second-largest producer of copper and mercury, and between the fourth and sixth largest producer of iron, zinc, and tin.
Minerals were key to the industry, especially for producing steel.
Why was the takeoff of mineral production delayed?
1 – Poor Law: Between 1825 and 1868, smallholdings were encouraged, which imposed very small boundaries. Fixed capital investments were very high, making it difficult for smallholders to invest.
The state was also heavily involved, as the subsoil belonged to the crown. Fiscal policy was very aggressive and did not encourage investment in mineral development.
2 – Scarce economic development: Foreign investors absorbed many mining investments, and the benefits went to those economies.
In Spain, there was a lack of capital and technology, and market demand was low. Foreign investment began with the change of situation in 1868 (ElDoradoMineroEspañol) due to the Basic Law of 1868, which sold off the land.
In Vizcaya, iron had a domino effect, boosting the regional economy and its industrialization because native capitalists were involved in the business.
The mining boom helped tip the balance of payments. These structures endowed investment to those locations. If not exploited in this way, mining would not have been exploited due to low lending, which helped tip the balance of payments. The result was positive.
2.2. Energy Mining
There was a shortage and low quality of coal. The development of coalfields was hindered by protectionist measures that made buying foreign coal more profitable and forced the Spanish industry to support a negative cost.