The economy of Spain between 1939 and 1959, usually called the Autarchy (Spanish: Autarquía), the First Francoism (Spanish: Primer Franquismo) or simply the post-war (Spanish: Posguerra) was a period of the economic history of Spain marked by international isolation and the attempted implementation of national syndicalist economic policies by the Falangist faction of the Francoist regime.
The Spanish autarchy is commonly divided into three phases:
From 1939 to 1945, in which the regime was closely linked with fascist ideology and the Axis powers. From 1945 to 1950, in which the regime was subjected to almost complete international isolation. From 1951 to 1959, after joining the anti-communist bloc of the Cold War and in which National Catholic influence was prevalent.
Background
Civil War economic devastation (1936-1939)
The Spanish Civil War had had widespread and long-lasting effects on the Spanish economy, not only because of the normal consequences of an armed conflict, but also due to the conflicting and discordant economic policies carried out by the different armed factions. The country had simultaneously issued two different currencies and was struck by high inflation rates, aggravated by the Republican government having depleted the significant Spanish gold reserves to finance aid from the USSR. The Civil War was financed by both sides through currency issue, which would lead to high inflation in later years. The nationalists also made use of international money lending. The Republic had failed at its tax reform project, which was included in a larger economic transformation process that included strategic nationalizations. Most taxes passed were not collected effectively and most projects were not carried out, while the Francoist side developed a more pragmatic approach that proved more successful in the short term. The Republicans' ineffectiveness has been described as a consequence of their financial approach, aimed at created a "Revolutionary Treasury" which would keep functioning after the war and not at winning the conflict efficiently.
Republicans were soon faced with a devastating inflation rate, aggravated by their inability to collect taxes correctly. The process of collectivizations and nationalizations, aimed at developing a socialist economy for the post-war period, has been pointed out as the cause for this situation as most of the taxable economic agents were eradicated. Banks stopped paying interest and were expropriated, rents were not collected anymore, collectivized factories distributed their earnings among their workers and were therefore permanently decapitalized, and public limited companies stopped paying dividends. The only money in circulation at that time were the salaries of public servants, which the government refused to tax as it would imply "extracting surplus value" from workers. The state forced those in the Republican zone to hand over any jewellery or precious metals to the Bank of Spain and set the maximum number of coins people were allowed to hold. The government would also carry out search and seizure procedures in order to take any saved money from the population. By 1938, the Republican Treasury had lost all its collection power and the country was left in a year of absolute fiscal anarchy, with rampant inflation and deficit. Civil servants gradually started going away and the Treasury directive board stopped holding its meetings. Republican collectivizations had also a lasting effect on the tourism sector, as the socialization of hotels, cafés, restaurants and spectacle venues led to a complete paralysis of the activity. The country would make use of ration stamps, a common practice in post-war Europe started in Spain during the civil war by the republican faction. Stamps were not abolished until 1952, due to the context of deep scarcity.
Autarchy and isolationism
Shortly before the end of World War II and the later beginning of the Marshall Plan, President Roosevelt ordered the American ambassador in Madrid to inform Franco that any "political or economic aid" from the United States would be "impossible" as long as the dictator remained in power. On June 19, the UNCIO voted in San Francisco to ban Spain from joining the United Nations.The decision was ratified in August 1945 by a joint declaration of Stalin, Truman and Attlee. In February of the following year, France closed its border with Spain, leaving the country completely isolated. The UN asked all its members in December 1946 to retire their ambassadors from Spanish territory, and did not revoke its condemnatory declaration until 1950. Spain joined the UN in 1955.
The international isolation had long-lasting consequences on the Spanish economy. The impossibility of collecting income through customs, for example, forced the State to carry out a tax reform aimed at maximizing indirect collection at the domestic level. The government protested against the isolation, stating that Spain had "the right to buy on international markets", and criticized the international community for sabotaging the country's "right to live according to its spiritual values", Francoists embraced the autarchic economic ideas of the Axis powers and made them a core characteristic of their regime.
The Spanish international reputation would begin to improve gradually in the late 1940s and early 1950s, after the consolidation of the Cold War, due to the explicit interest of the United States in promoting anti-communist governments in Western Europe. The diplomatic displays of approval by the American government helped to strengthen the regime and stabilize its economy, which would eventually lead to the liberalization policies that marked the 1960s.
National syndicalist influence
Francoism claimed to follow the national syndicalist economic doctrine, espoused in Spain by FE de las JONS, one of the revolutionary paramilitary groups which had supported the nationalist uprising. Falangist official historiography understood workers' unions as developing in three phases with specific goals: a defensive phase initially, a political phase later, and finally, a phase of being part of the state. The last one, which Francoism was to implement, was akin to the recently implemented corporatist organization of Fascist Italy. According to national syndicalism, workers' unions are to become the foundation of society by dividing it into corporate groups, through which workers would participate in the direction of the state and the defense of their interests. Spanish national syndicalism was particularly influenced by the corporatist dictatorship of General Miguel Primo de Rivera, who had ruled the country from 1923 to the establishment of the Second Spanish Republic in 1931.
National syndicalism advocates for a society based on its "natural entities", namely the syndicate, the municipality and the family. The movement believes in a "syndicalist state" in which democratic political participation would be replaced by the organization of society in advocacy groups of compulsory adherence through which the state may conduct its economic policy, and in which class struggle would be abolished through the collaboration between workers and owners on each productive branch.
In 1938, Franco replaced the Ministry of Labor with the Syndical Action and Organization Ministry, designed to carry out the "national syndicalist revolution". However, the ministry was led by Pedro González Bueno, a corporatist who, having participated in the dictatorship of Primo de Rivera, rejected the totalitarian economic system of Falangism and was not interested in implementing a syndicalist state. The opposition of Spanish traditionalists, some Catholic groups and bankers pressed Franco to adopt a paternalistic conservative policy.The 1938 Fuero del Trabajo law, based on the Italian Labour Charter of 1927, established the bases of the future labor policies of the regime, claimed inspiration from José Antonio Primo de Rivera's political beliefs and Italian fascist corporatism, defining the state as "national, inasmuch as a totalitarian instrument at service of the unity of the fatherland, and syndicalist, inasmuch as a reaction against liberal capitalism and marxist materialism". The law was also influenced by Falangist thought in other definitions and concepts. Still, most of the national syndicalist core doctrine was never embraced by Francoism. The Fuero protected capitalist property instead of the collectivist "syndical property" in which Primo de Rivera believed, and greatly diminished the role of the syndicates, which instead of being the base of society were to become only an economic agent in collaboration with the state. Surplus value was not abolished and capitalist relations of production were preserved, while the relative influence of social Christianity was merely asserted. In 1939, the Ministry of Syndical Action and Organization reverted to being the Ministry of Labour in 1939.
The state officially abandoned national syndicalism in 1958, when employers and employees were formally recognized as separate interest groups.
State policies and organization The national-syndicalist state
Franco organized the economy under corporatist and authoritarian principles. Businessmen and workers were forcibly incorporated according to their particular trades into the Spanish Syndical Organization (Spanish: Organización Sindical Española), a state corporatist institution in which the State intervened following the established norms in the Fuero del Trabajo, a legal document similar to the Labor Charter of fascist Italy. The dictatorship banned all political, trade union and employers' organizations by decree on September 13, 1936. Striking was penalized as sedition, and would not be decriminalized until 1965. On January 26, 1940, the SSO was declared as the only trade union allowed. In October 1942, it was established by Law that labor relations were a matter of exclusive and general jurisdiction of the state. According to the 1938 Fuero del Trabajo, the SSO was an organ of state through which the government would develop and control its economic policy from a totalitarian point of view, and would therefore be the only union allowed. According to the December 1940 Bases of the Syndical Organization Law, the vertical syndicates were to be led by members of FET y de las JONS.The syndicates created by the Francoist regime following the falangist model were of compulsory membership, but actual affiliation remained voluntary due to pressures from the Christian corporatist and traditionalist factions. Affiliates of the SSO held a syndical ID and were actively involved in the institution. Most of the working class, however, grew gradually apathetic to syndical action: between 1940 and 1945 affiliation was doubled and peaked at 4,000,000 affiliates, but after that year the number became stagnant and kept a negligible growth rate, some years reaching even less than 1%.