Spain's Economic & Social Transformation

Spain's Economic Transformation

There was a new orientation of the economy as a result of the failure of autarky, advocated by the new technocratic governments. This economy was expressed in the Stabilization Plan, characterized by:

• Decrease of state intervention
• Momentum for foreign trade
• Promotion of foreign investment
• Convertibility of the peseta
• Elevation of interest rates and wage freezing

This was followed by Development Plans, which aimed to boost economic growth through structural measures and Development Poles.

Drivers of Economic Growth

Economic development occurred thanks to contributions from outside, which provided technology and capital investment, served as a market for production, absorbed surplus manpower, provided transfers from emigrants, and finally, the tourist boom.

Sectoral Shifts: Agriculture, Industry, Services

This economic growth was marked by:

• The end of traditional agriculture: Due to migrations, leading to agricultural mechanization, reduction in the workforce, increased productivity, and promotion of livestock and its derivatives.
• Rapid industrialization: Import of technology, modernization of production systems, and geographical expansion of the industrial fabric.
• An increase in services: Growth in tourism and the financial and administrative sectors.

Political Context & Challenges

At this time, there was a government policy of timid opening led by technocrats and more reformist sectors of the Franco regime. The drive for modernization led these sectors to promote social stability and create new openness legislation (Press Law and Education Act). Dissensions between openness and immobile sectors erupted with the Matesa scandal, which exposed corruption except among government technocrats and led to the discrediting of the regime, thus braking reformist measures and increasing repressive ones.

Social Modernization in Spain

Key Social Changes

Regarding social modernization, key highlights include:

• Entry into the consumer society
• Changing patterns of social behavior
• Changes in population structure
• Intense urbanization
• New cultural features

Political & Social Consequences

These patterns favored the growth of the opposition, citizen mobilization, and democratic demands, which culminated in the regime's crisis. During this crisis, the murder of Carrero Blanco occurred, followed by Franco's death and an increase in tensions between openness and immobility.

Economic Concepts Defined

Convertibility Explained

On economic policy, a decision which fixes the value of a currency with that of another more stable currency (generally the dollar) or another standard (like gold). A monetary system guarantees a convertible currency's value is predictable and prevents unexpected changes in its value.

Indicative Economic Planning

A planning model which began in France after World War II, according to which the State set out the economic objectives and indicated how employers could reach them, offering economic and tax advantages if they followed government guidelines.