Spain's Economy Under Franco: Autarky to Development

Spain's Economy Under Franco: Autarky and Economic Stagnation

In 1939, after the Spanish Civil War, the nation struggled with the collapse of its agriculture and livestock sectors, alongside the destruction of communications, factories, and infrastructure. The ongoing hunger and ration cards were the hallmarks of the postguerra (post-war period). The reality of economic policy in the early days of the Franco regime was marked by autarky and international isolation. Autarky, as an economic policy, aims to utilize a nation's own resources to avoid relying on foreign trade. Ideally, it strives for self-reliance and implies state intervention in economic matters. The misery of the population caused outbreaks of epidemics such as tuberculosis. Food ration cards were established, and a black market emerged, although it allowed wealthy families to avoid the desperate situation that many Spaniards faced. During World War II, the UN condemned the Spanish regime, imposing an economic blockade. Diplomatic and state intervention was implemented through the creation of the National Institute of Industry (INI) in 1941. The INI established factories in different industrial and mining sectors and nationalized communications. Inflation, low wages, and the lack of means to defend their interests significantly lowered the living standards of the working class and peasantry, who were also affected by the reversal of the Republic's agrarian reform. This economic situation persisted for 20 years. In the 1950s, growth began, accelerating over time. This involved a loss of prominence for the state in favor of private entrepreneurs.

Stabilization and Economic Growth

From 1953, Spain normalized diplomatic and trade relations with other states, leaving behind its international isolation. The 1950s were a time of economic transition. This reality had immediate effects, as the country experienced a recovery, slow at first but faster in the 1960s and 1970s. The result was the replacement of the autarkic economic policy with a more liberal one, namely the 1959 Stabilization Plan. This plan was promoted by ministers belonging to Opus Dei, who played a significant role in the economy. Key features of this period include:

• End of rationing in 1951: Ration cards were removed.
• Mass migration: Significant migration to cities and abroad occurred. In Spain, this led to phenomena such as real estate speculation and shantytowns (chabolismo).
• Abandonment of autarkic policy: This was replaced by economic liberalization.
• Start of an industrialization process.
• Arrival of European tourists: From the 1950s, European tourists began to arrive. Their currencies were key to the modernization of the country and the balance of payments. However, tourism also led to the destruction of the Mediterranean coastline due to the absence of laws preventing land speculation and the construction of hotels and apartments.
• Technocratic-led growth: Growth was driven by technocrats, such as the ministers who led the 1964 Development Plans aimed at industrializing underdeveloped regions.
• Increased social inequalities: The distribution of wealth became more unequal, and the goal of industrializing less developed regions was not fully achieved.

Economic development resulted in increased prosperity, as seen in the growth of cities, housing, the adoption of electrical appliances, television, and cars. In 1963, Social Security and health systems were created to pay pensions. These economic changes from the 1960s onward affected the structure of Spanish society. Spain was transformed from a backward agrarian country to a modern, urban one. Urban growth was one of the key factors in the country's modernization. Millions of people were forced to move from agricultural districts and regions to seek employment in cities and industries. These immigrants often settled in slums with abysmal sanitation and hygiene conditions. To address this, neighborhoods were built in cities, but often of low quality.

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