Section 3: Economic development

Question 1

what were the two main stages which Francos economic policy went through?

Answer 1

-from the late 1930s to the mid-1950s Franco embraced corporatism, from around 1956 until the end of his life he adopted free market economic policies

Question 2

what did the corporatism of the early part of Francos regime reflect?

Answer 2

reflected the influence of the Falange, indeed, the policy was very close to fascist corporatism, the economic policy adopted by Mussolini in Italy.

Question 3

did many Catholics support corporatism?

Answer 3

yes, many Catholics did support corporatism.
-they believed that it was a way of reconciling economic differences for the good of the whole community

Question 4

what did corporatism allow Franco to do?

Answer 4

it allowed Franco to exert control over the Spanish economy, as his style of corporatism, like that of Fascist Italy, emphasised state authority over the economy.

Question 5

in addition to corporatism, what else did Franco embrace?

Answer 5

he embraced the policy of autarky: economic self-sufficiency.
-this, too, had been promoted by the Falangists

Question 6

what were some of the problems which the Spanish economies had faced when Franco founded the ‘new state’?

Answer 6

-underdeveloped state of the Spanish economy that Franco inherited from previous govs
-the impact of the Civil War
-the impact of the Second World War

Question 7

what were some of the problems caused by the civil war?

Answer 7

-the Republican government had sent its gold reserves to the Soviet Union, in part to buy arms
-additionally, the Nationalists had amassed huge debts by buying arms from Italy and Germany on credit.
-by the end of the war, Franco owed around $700 million to other countries for war goods. In practice, Spain paid off these debts by sending food and raw materials to Germany and Italy. Nonetheless, this was a considerable drain on the Spanish economy in the years following the Civil War. Payments to Italy, albeit at agreed-upon reduced levels, continued until the 1960s

Question 8

what else did the Civil War lead to?

Answer 8

it also led to a reduction in the level of industrial and agricultural production, due to the fact that over half a million men and women had died during the war.
-with a diminished labour force and with commitments to repay Italy and Germany, the rapid regeneration of Spanish industry and agriculture was not possible in the years immediately after the war. It was no until the 1950s and 1960s that significant economic growth was achieved
-indeed, for the decade after the war farmland produced only a quarter of the cereal crops that it had produced before the fighting began

Question 9

during the ‘hunger years’ which workers suffered the most?

Answer 9

industrial and agricultural workers suffered the most.
-most workers had to cope with low incomes, poor living and working conditions, relatively high taxes and virtually no social security system

Question 10

what impact did the Second World War have on the Spanish economy?

Answer 10

-although Spain remained neutral, WW2 had a profound impact on the Spanish economy.
-WW2 restricted supplies from abroad. The war resulted in global shortages of food, raw materials and peacetime industrial products.
-although Spain was trying to move towards autarky, the economy was unable to provide everything that the Spanish population needed and therefore Spain was partially dependent on imports.
-furthermore, following the outbreak of war the Allies were unwilling to help Spain with loans or economic aid for reconstruction because of the close relationship between Franco and the leaders of the Axis powers. As a result, the Spanish economy remained in a state of depression until the end of the 1940s: during the 1940s Spains economy was less productive and less wealthy than it had been in 1930

Question 11

what did the Falange believe about corporatism? why did they criticise capitalism? what did they argue about communism? why did they argue that corporatism is superior to other systems?

Answer 11

-they believed that it was an economic system that combined the best aspects of capitalism and communism.
-they criticised capitalism for promoting the interests of the individual over the nation.
-they argued that communism put the interests of the industrial working classes ahead of those of the nation.
-they argued corporatism was superior to other systems because it combined aspects of capitalism and communism in order to prioritise the interests of the nation.

Question 12

what was Francos corporatist economy based around?

Answer 12

it was based around syndicates that represented different areas of industry
-while in theory the syndicates were designed to promote social harmony, in practice Franco used corporatism to extend governmental control over the economy and over workers.

Question 13

what did the Ministry of Syndicates oversee?

Answer 13

they oversaw negotiations within the syndicates to control wages and prices and set production targets.

Question 14

what is autarky?

Answer 14

it is an economic policy that is designed to make a country self-sufficient.

Question 15

what were the reasons why Franco embraced autarky?

Answer 15

-autarky was one of the aims of Hitlers Germany and Mussolini’s Italy. In this sense, Franco was influenced by the example of other right-wing dictatorships of the period
-Franco hoped that autarky would modernise and strengthen the Spanish economy, as well as providing for the needs of the Spanish population
-he believed that autarky would provide the resources for a strong military-dominated state, which would protect the interests of the Spanish nation
-Spains military leaders feared an Allied invasion of the peninsula and did not want to be overly reliant on foreign armaments
-Franco believed that self-sufficiency was necessary due to the fact that Allies were unwilling to trade with Spain as a result of its close connections to Germany and Italy

Question 16

what institution did Franco establish in 1941 to help with determining Spains economic priorities?

Answer 16

-he established the National Institute for Industry
-this helped determine Spains economic priorities and how the limited amount of imports could best serve the economy’s needs

Question 17

in general, were Francos economic policies a failure or a success? However, what type of benefits did they lead to?

Answer 17

in general, Francos economic policies failed to stimulate growth, higher living standards or economic modernisation.
-nonetheless, while the policies were an economic failure, they did lead to some political benefits.

Question 18

what are the different senses in which corporatism was successful?

Answer 18

-it allowed Franco to exert control over the economy and discipline Spains workers
-the introduction of corporatism helped Franco to retain the support of the Falangists, who believed that the creation of corporatism was the first step towards creating a fully fascist state

Question 19

what were some of the successes of autarky?

Answer 19

-although it was never fully achieved, throughout the period 1939-56 trade represented only 5 percent of Spains GDP. In this sense Francos policies succeeded in limiting Spains economic interaction with the rest of the world
-the policy of autarky can also be viewed as an ideological success for the Falange, which saw it as promoting Spanish independence and nationalism.
-It also allowed Franco to exert more control over the running of the economy and various interest groups within Spain

Question 20

what were the economic failures of the policies of autarky and corporatism?

Answer 20

by 1958:
-around 45 percent of Spanish industrial plants were using machinery and technology developed before 1920
-there had been little attempt to modernise key sectors of Spanish industry. The production of metals including steel, chemicals, textiles and paper was still dominated by small workshops. Only 2.4 percent of Spains iron and steel and only 0.3 percent of its chemicals were produced in large modern factories
-around 65 percent of Spains trading ships had been produced before 1939. Part of the fleet dated from the nineteenth century
-between 1939 and 1958 agricultural production remained below the production level of 1936
-the emphasis on autarky meant that the domestic industrial sector had to focus on a small consumer market, which placed restrictions on the level of investment and industrial production. In 1950 the manufacturing industry remained a small part of the economy, employing less than 20 percent of the working population

Question 21

what are other economic problems which autarky led to? (Hint: creating resources)

Answer 21

-as part of the drive for autarky more focus was placed on producing synthetic substitutes for raw materials which Spain did not have. A good example of this was the attempt to extract oil from coal. This was not economically efficient given the vast amount of coal that was needed and the oil tended to be of low quality than imported oil. Cotton was replaced by synthetic fibres produced from various chemicals. Again, this process was expensive and inefficient and the goods produced were often of a low quality. In such cases it would have made more sense to import the relevant materials

Question 22

what other economic problems did autarky lead to?

Answer 22

-autarky also resulted in a rapid decline i foreign investment and trade with foreign countries, especially after the end of WW2. Franco refused a $100 million loan from the USA on the basis that his gov wanted to pursue autarky rather than trade. During the late 1940s various European countries such as France were experiencing economic growth and growing trade which strengthened their economies while the Spanish economy continued to struggle

Question 23

what did corporatism and autarky also lead to a decline in?

Answer 23

in living standards for urban and rural workers. The vast majority of negotiations within the syndicates favoured employers. therefore wages remained low, but prices rose. As a result:
-by 1956 industrial workers’ wages were on average 15-35 percent lower than they had been in 1936
-the price of basic foods was higher - the price of meet rose by 1,000 percent between 1936 and 1956, the price of bread rose 1,200 percent and the price of potatoes 1,800 percent
-some historians argue that the overall standard of living for the Spanish people was reduced by 50 percent between 1936 and 1056
-between 1939 -1956 there were periodic rises of inflation. At some points inflation rose as high as 20 percent

Question 24

what was agricultural production like between 1947 and 1948?

Answer 24

-it was so poor than Spain faced famine.
-widespread starvation was stopped only by large imports of food, which undermined the policy of autarky.

Question 25

what were the social consequences of the poor performance of the economy?

Answer 25

-between 1950 and 1955, 300,000 Spaniards left Spain to set up home in Latin America
-between 1939 and 1950, 200,000 people died of malnutrition
-in 1956 a spike in inflation made the economic situation even worse. Consequently, workers organised unofficial strikes supported by university students. Striking workers demanded a minimum wage, equal pay for women, unemployment benefits and the right to form free trade unions. The strikes led to violence and were ultimately supressed

Question 26

What were Spains economic problems exacerbated by?

Answer 26

by military spending.
-in the period 1939-45 approximately 50 percent of gov spending went to the military. Inevitably, this resulted in less investment in agriculture and industry.
-during the period 1944-45 Spain was also impacted by a drought, which further reduced agricultural production. The combination of these factors mean living standards declined

Question 27

which system implemented in 1939 also contribute to the ‘years of hunger’? why did this system fail to operate effectively?

Answer 27

-the rationing system
-it failed to operate effectively because:
– there were insufficient rations to feed the population
– extreme scarcity allowed a situation where food supplies could be manipulated by the corrupt and inefficient Francoist administration

Question 28

what did rationing contribute to?

Answer 28

it contributed to the population suffering food shortages and long queues for poor-quality items.