Spain’s 1893 Economic Crossroads: Protectionism vs. Free Trade
Librecambism and Protectionism: 1893
Commentary by Haizea Salaberria
This text is an economic and political document, primarily economic in content, despite being addressed to the government. The author, Federico Etxebarria, a Biscayan industrialist, expresses his concerns about a potential trade treaty with Germany. This treaty would allow German products into Spain without paying custom duties. The speech was delivered in 1893 and published a year later. It is a primary source.
The text originated during the Restoration period. To contextualize, we must go back to the end of the Third Carlist War in 1876, which marked the beginning of industrialization in the Basque Country. Before this, Spain was largely agrarian, with limited industry concentrated in the Basque Country (iron) and Catalonia (textiles). The Basque iron industry, rooted in the tradition of “Burdinolak” (Basque iron workshops), was striving to modernize in line with other European nations. Consequently, it benefited from protectionist policies to avoid foreign competition. Spain’s late industrialization meant it couldn’t compete with countries where modern industry had been established for nearly a century. Protectionism ensured that foreign products faced custom duties, reserving the internal market for Spanish goods. This lack of competition allowed Spanish industries to improve at their own pace, given their initial backwardness.
Federico Etxebarria protests a proposed government agreement with Germany that would eliminate tariffs on German goods. He argues this would be catastrophic for Basque industries. Germany, with its advanced and modern iron sector, posed significant competition. All industries mentioned in the document are iron-related. Etxebarria highlights Biscay, due to its large concentration of iron industries. His demand was clear: maintain protectionist laws to secure the future of new or revitalized companies.
Ultimately, the agreement was not made. Had it been, local industries might have been destroyed. Protectionism had both advantages and disadvantages. On the one hand, it secured the market for Basque products. On the other, it risked hindering development and modernization due to the lack of competition. However, Basque industries continued to invest and modernize, successfully developing a modern iron industry comparable to those in other European countries.