ON THE INDUSTRIAL HISTORY OF SPAIN

Spain could have become one of the earliest major European industrial nations, given that its mountains are enormously rich in natural resources. However, the political development delayed modernisation by over a century.

In prehistoric times, the land’s natural resources were exploited by native Iberians and Tartessians as well as Phoenician seafarers. The ancient great powers of Carthage and Rome warred over these riches. The victorious Romans subsequently mined gold at Las Medulas, cinnabar (mercury sulphide) in Almadén and silver and copper on the Rio Tinto on a quasi-industrial scale. Following this phase, mining went into decline for centuries. Only mercury from Almadén remained in demand, both in the Moorish era and the subsequent heyday of the Spanish empire, as it can separate the minutest traces of gold and silver from the host rock.

The decline of Spanish power starting from the 17th century ushered in a long period of economic stagnation. Agriculture remained primitive, with the land fragmented into miniscule plots where it wasn't held in the estates of disinterested aristocrats; the population sank into poverty; and the monarchs led their nation from one bankruptcy to the next. Still, the crown subsidised operations such as the arms manufactories in Toledo and Trubia and the glass works at La Granja. Starting in the 17^th century, iron ore was refined in the Basque region. Aside from that, paper, alcoholic beverages and colourful print fabrics, produced mainly in Barcelona, were Spain’s only manufactured products.

The first industrialisation phase commenced in 1832 when the first steam-powered cotton factory went into operation in Barcelona. Mechanical looms soon followed, and the Catalonian metropolis rapidly became the heart of a major textile region that also attracted chemical and metalworking businesses.

Further impetus came in 1868: in an attempt to address its dramatic deficit, the government nationalised mining rights and leased them to investors. This triggered a mineral extraction boom: copper mining returned to Rio Tinto, mercury mining was resumed in Almadén, lead was mined near Cartagena, coal in Asturias and iron ore in the Basque country. However, as the necessary capital was lacking domestically, the investors were mostly foreign companies. The Spanish economy itself saw little benefit, as the lion’s share of the profits were siphoned off to France and England, where most of the raw materials were worked as well.

In the Basque province of Vizcaya, however, mines and steel works proliferated, stimulated by Britain’s insatiable demand for iron. On their return trip, the freighters carried British coal, which was both cheaper and higher-quality than the deposits in neighbouring Asturias; as a consequence, mining there declined. By contrast, an extremely successful shipbuilding industry developed in the region of Bilbao, and by the turn of the century the Basque country possessed one of Europe’s largest merchant fleets.

Still, all this amounted to little more than a “half-way”, peripheral industrialisation, as the coastal strips with their belching smokestacks were offset by the central highlands, where backward agriculture predominated. Spain remained an agrarian country with a high emigration rate, riven by social divisions which ultimately exploded in 1936 in a bitterly fought civil war that stifled the country’s economy even further.

In the aftermath, the internationally shunned dictator Franco proclaimed a painful policy of autocracy . The Instituto Nacional de Industria (INI) was founded in 1941 to diversify the industrial base. Key operations such as the tradition-steeped automotive manufacturer Hispano-Suiza and the Ford factory were nationalised. The INI also held the majority of shares in Seat, founded in 1950, which built automobiles under licence from Fiat.

But the weak domestic demand and shortage of capital meant that it was impossible to animate the economy by means of protectionist, restrictive actions. It was not until the proclamation of the “Stabilisation Plan” in 1959, which made Spain eligible for massive foreign aid, that the economy began to grow. At the same time, the government opened up the country for investors, enabling a thorough modernisation of the industrial sector. The “Spanish Economic Miracle” which followed in the 1960s was due in large part to foreign auto makers like Fiat and Renault, which significantly expanded their licence manufacturing in Spain. The chemical industry, which manufactured plastics, pharmaceuticals and fertilizers – often with foreign capital as well – formed a second pillar of the economy. The electrical industry also grew, not least to meet the growing domestic demand for household appliances.

The government subsidised exports and supported the expansion of the labour-intensive Asturian coal mines and Basque steel works. The INI attempted to keep the shipbuilding industry competitive by merging the major shipyards, while the Catalan textile industry, consisting of smaller workshops, slid into a crisis. Although not yet entirely adapted to the global economy, Spain had, by the early 1970s, developed into a leading industrial nation.