2015 Edexcel New Spec - Route 2G: Spain Watch
Thanks a lot
P.S. this essay has not been proof-read, and also I understand that I probably will not be able to write this much in the exam, but I just wanted to make sure than I'm using the right techniques.
To what extent did Spain recover from the economic effects of the civil war by 1945?
The Civil War, between July 1936 to April 1939, had severe impact on Spain’s economy. Franco, leader of the Nationalists and now the Caudillo (and essentially dictator) of Spain had to deal with issues such as debts, damaged infrastructure, trade and industry which led a fall in industrial and agriculture output and food shortages due to the civil war; it had disrupted the economy and destabilised the country, leading to economic hardship and bleak conditions across Spain. WWII further exacerbated Spain’s economic conditions. To tackle these issues, Franco developed and implemented two economic policies: corporatism and autarky.
Corporatism involved syndicates of trade unionists/workers’ representatives and employers’ representatives who would work together to establish employment conditions such a price of goods and wages and in return, workers would promise not to strike. While this limited the likelihood of strikes and provided Franco’s government with some degree of control over the working classes and therefore, provided relative economic and social stability for a time, it was largely unsuccessful due to the government’s tight control of the external stakeholders. The high levels of government intervention also prevented free market economy to flourish effectively, for example the setting of low prices at times led to shortages of staple food such as bread. Furthermore, average wages failed to keep pace with inflation, for example, wage increases averaged 30% compared to 600% average increase in prices during the 1940s, which resulted in falling living standards for most of the workforce. The average income levels of mid-1930s were only reached in 1951 and standard of living in 1952. Although unemployment did fall from its pre-war level of 750,000 to just over 150,000 by the end of 1944, the high levels of underemployment, especially in key industries like agriculture, were not accounted for, and it was artificially lowered by the civil war casualty figures. The ineffectiveness of corporatism meant that Spain may have recovered temporarily, however this recovery was not sustained as income levels remained below inflation and standards of living fell for most of the workforce, not reaching the pre-war levels.
Autarky is defined as a nation being economically self-sufficient and not reliant on the resources of other countries. By adopting this, Spain was essentially using a process of protectionism (which was established in October 1939 under the Law for the Protection and Development of National Industry). Autarky did result in steadily falling levels of unemployment and a stabilisation and steady improvement of Spain’s GNP per capita, while also generating support from Franco’s key conservative allies, like the Falange for a while. However, more significantly, it had an adverse effect on foreign investment and trade and protectionism made imports more expensive. This led to low quality synthetic materials being produced in Spain as alternatives to imports, such as oil from coal, but some vital products, such as fertilisers, could not be synthesised. This had a negative impact on Spain’s agricultural production, which led to shortages of key cereals such as wheat. The production of cereals during 1940s was only one quarter of 1935 levels. This is significant in illustrating that productivity did not recover from the economic effects of the war. This led to hunger and malnutrition in many rural communities, and an estimated 200,000 people died between 1939-44 due to shortages of crops and vital food resources. Shortages of goods also led to many turning to the black market which further undermined the economy. Autarky also led to unemployment-related problems becoming more evident in the south where entire villages were known to have abandoned their properties to move up north, seeking for improved living conditions. This however, led to chambolas (shanty towns) appearing from early 1940s on the outskirts of large towns and cities, which lacked basic amenities such as electricity, sewers and running water. This depicts the falling standards of living for rural workers. In general, autarky failed to address and solve the economic problems caused by the civil war and in fact, conditions worsened due to the lack of foreign investment and trade which led to shortages of vital products, resulting in increased poverty, malnutrition and a general fall in standards of living. This also meant that the recovery of Spain’s economy was not sustained.
In conclusion, a majority of Spain did not recover from the economic effects of the civil war; in fact, a lot of the issues experienced during the civil war, such as food shortages in the Republican zones, were sustained during the 1940s. Standards of living and income levels between 1939-45 did not reach the pre-war levels and remained significantly lower. However, due to Franco’s excessive military expenditure – which was the single biggest area of public spending between 1939-45 –Spanish industrialists and business interests directly linked to the military sector benefitted economically. Therefore, for this group, they may have experienced ‘recovery’ due to the investment being greater than that of the pre-war levels. However, this was at the detriment of others as government expenditure remained low in other areas such as industrial reconstruction. Furthermore, this only affected a small percentage of the population. Other groups, such as the church, may have also experienced ‘recovery’ to pre-war levels as they were ostracized before the war, but Franco’s close relation to the church meant that they could enjoy economic benefits once again, such as the state paying for the salaries of religious figures. However, these groups also faced problems such as inflation, which affected the entire country, but their economic benefits from the state meant that they did not experience the consequences as severely. Thus, while a small minority of the population did experience recovery to pre-civil war levels, Franco’s policies had limited progress and extreme regional variations, which failed to deliver sustainable level of economic growth and solve the economic difficulties caused by the war for the majority, therefore, Spain experienced very limited recovery by 1945.