Spain’s Economic Journey: From Autarky to Development (1939-1959)
Autarky to Economic Mica (1939-1959)
– The Impact of the Civil War: The Hunger Years
The Spanish Civil War had significant demographic and economic consequences. The war led to a decline in the labor force, exacerbated by the subsequent repression. When the war ended, the economy was in ruins. Agricultural and industrial production plummeted, gold and currency reserves were depleted, and the transportation network was severely damaged.
In the short term, the civil war plunged many Spaniards into hunger and misery. In the long term, it led to the consolidation of a non-competitive economy characterized by influence-peddling and corruption.
The slow economic recovery was partly due to the economic policies of the Franco dictatorship. The authorities replaced market mechanisms with arbitrary price fixing. Producers were forced to sell their entire production to the administration at fixed prices, which then sold the products to consumers at regulated prices. Setting prices below market value led to food shortages, rationing, and the spread of black markets.
The energy shortage was another symbol of hardship. Coal and oil were rationed, and there were frequent power outages. The result of rationing was widespread hunger. Ration cards were insufficient, and shortages were rampant. Taxis operated with “gas generators” due to gasoline scarcity, and the black market thrived.
Agricultural policies favored extensive farming methods and reduced agricultural wages. The National Grain Service was created to regulate the grain trade. Although the government blamed agricultural woes on climatic conditions, it was clear that their policies were hindering recovery.
– The Interventionist Policy
Fascist ideology and international isolation led to an autarkic economic system. The state regulated all aspects of economic life: production, consumption, prices, wages, trade, and investment. This resulted in stunted economic growth, reduced competitiveness, and missed opportunities during Europe’s post-World War II economic boom.
Key areas of autarky included:
- Regulation of foreign economic relations, drastically reducing imports and exports.
- Manipulation of the peseta’s value above market rates.
- Limitations on foreign capital inflow and provision of aid and tax benefits to Spanish companies.
- Creation of the INI (National Institute of Industry) in 1941 to produce goods that the private sector could not.
However, Spain lacked essential raw materials, making self-sufficiency impossible. The autarky era led to increased social inequalities, widespread poverty, government corruption, and a lack of incentives for industrial progress.
Economic and Prime Parking Adjustments
By the 1950s, the situation created by autarky was unsustainable. Crop failures, price controls, and state intervention led to shortages. The lack of foreign currency weakened the peseta, making it difficult to import necessary goods.
This resulted in riots between 1945 and 1947, with a major protest movement erupting in Barcelona in 1951. The protests, sparked by rising tram fares, highlighted the frustration over low wages and lack of freedom.
The autarkic policy of interventionism failed to meet the population’s basic needs and only benefited a minority. By the late 1950s, Spain’s economic situation was critical. The lack of foreign currency made it impossible to afford essential imports.
In response to the economic difficulties, Franco appointed members of the Catholic institution “Opus Dei” to positions of power in 1957. This marked a shift in economic policy, moving away from autarky and towards a more open approach, although the regime remained dictatorial and undemocratic.