Spain Autarky and Rationing: Economic Impact 1930s–1940s
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Autarky, Rationing, and Economic Policy
Autarky and rationing: One of the main objectives of the first stage was achieving economic self-sufficiency. This promoted an economic policy of insulation from the exterior and the replacement of the free marketplace by state intervention in the economy, justified with fascist and patriotic rhetoric. Autarkic policy had three stages of action.
Regulation of foreign trade: Imports and exports were completely controlled by the state. This measure restricted foreign exchange and reduced imports of goods considered essential. The result of these restrictions was higher prices and severe shortages of consumer goods.
Development of industry: A series of laws favored the creation of public enterprises and the nationalization of industries considered essential. The policy also encouraged the development of capital-goods industries, which received considerable and sustained public support. This support generated high public spending and had major inflationary effects. In 1941 the government founded the National Institute of Industry (INI) to promote the new industrial policy. The INI produced goods that the private sector did not produce due to lack of profitability or excessive investment costs.
Agricultural intervention: The third level of state intervention affected the agricultural sector. Low official prices caused a drop in production and reduced productivity per hectare, which by the 1940s had returned to levels of the early twentieth century.
The overall result of these autarkic policies was deep economic stagnation, characterized by the collapse of foreign trade, a significant decrease in production and consumption, and a marked decline in the population's standard of living.
Roughly, the cost of living during this decade increased by more than 500% over pre-war prices; for basic foodstuffs the increase exceeded 700%. It is estimated that in 1945 real per capita income of Spaniards was only one third of its 1935 level, and that the purchasing power of a worker in the textile industry in 1942 was only 28% of what it had been in 1936.