Franco's Autarky: Economic Isolation, Rationing and Black Market in Spain

Summary

This document explains the autarkic economic policy of Franco's first stage, which aimed at self-sufficiency through isolation from the outside world and state intervention. It covers the three main areas of this policy: foreign trade regulation, industrial promotion and agriculture. It also describes the results, including rationing, the black market and harsh living conditions for the population.

Key points

Autarky aimed at economic self-sufficiency and replaced the free market with state intervention.
Foreign trade was fully controlled by the state, reducing imports and causing shortages of consumer goods and raw materials.
Industrial promotion created public enterprises such as RENFE, nationalized CTNE and founded the INI in 1941.
State regulation of agriculture set low official prices, which reduced production and productivity.
Rationing through ration cards and low official prices encouraged producers to sell on the black market.
Hunger, cold and poor housing led to the spread of diseases such as tuberculosis, and life expectancy in 1945 was 47 years for men and 53 for women.

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5. Autarky and Rations

Autarky and Its Effects

One of the main objectives of the first stage of the Franco regime was to achieve economic self-sufficiency (autarky). This promoted an economic policy that advocated isolation from the outside world and state intervention in the economy, replacing the free market. Autarkic economy had three main policy areas.

The First Area: Foreign Trade Regulation

Imports and exports were completely controlled by the state. This limited foreign exchange by reducing imports, resulting in higher prices for state-imported products and severe shortages of consumer goods. It also affected raw materials and power, leading to a decline in industrial production.

The Second Area: Industrial Promotion

This focused on promoting industry to ensure the military and political independence of the new state. Public enterprises were created, and the development of capital goods industries, which received public funds generated by high government spending, was promoted. RENFE was formed, and CTNE was nationalized. In 1941, the INI was founded, prompting the creation of numerous public companies.

The Third Area: Agriculture Sector

The state regulated the production, marketing, pricing, and consumption of most agricultural products. Low official prices caused a drop in production, and productivity also declined considerably.

The results of autarkic policies included deep economic stagnation, a collapse of foreign trade, declining production and consumption, a decreased quality of life for the population, and a halt to the modernizing trend of the Spanish economy.

Rationing and Black Market

The strict regulation of the economy entailed state market control. This resulted in widespread food shortages, and rationing of necessities was implemented through ration cards. Valuing food below its market worth encouraged many producers to sell on the black market for higher profits.

Harsh Living Conditions

Low wages, shortages, and high prices increased the cost of living. The standard of living for the population decreased considerably. This also led to an increase in the use of caves for housing and the development of occupied settlements. Due to hunger, cold, and poor housing conditions, diseases previously eradicated, such as tuberculosis, became widespread. Consequently, mortality and infant mortality increased, vegetative growth decreased, and life expectancy in 1945 stood at 47 years for men and 53 for women.

FAQ

What was autarky in Franco's Spain?

Autarky was the economic policy of self-sufficiency that advocated isolation from the outside world and state intervention in the economy, replacing the free market. It was one of the main objectives of the first stage of the Franco regime.

What was the black market in Franco's Spain?

The black market emerged because official prices were set below market value, so many producers sold their goods illegally for higher profits. It developed alongside the rationing of necessities through ration cards.

What was the INI?

The INI was founded in 1941 and prompted the creation of numerous public companies as part of the industrial promotion policy of autarky.

What was the life expectancy in Spain in 1945?

According to the text, life expectancy in 1945 was 47 years for men and 53 years for women.