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, political circumstances delayed its 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 great ancient 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 the mercury from Almadén, which can be used to dissolve the smallest gold and silver fragments from the host rock, was also in demand in the Moorish era - and likewise in the subsequent heyday of the Spanish empire, which developed through the exploitation of the precious metal wealth in the South American colonies.
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 17th 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.
After the countries of South America freed themselves from Spanish rule in 1824, only the Caribbean islands of Puerto Rico and Cuba remained of the former colonial empire - the latter developed into an important economic factor thanks to the rapidly expanding sugar cane plantations: in 1860, Cuba's ultra-modern sugar industry, equipped with steam engines and narrow-gauge railways, covered around a third of global demand. The prerequisite, however, was the regular supply of slaves, which Spain shipped to Cuba from West Africa - against the resistance of the British, who tried to enforce the worldwide ban on the slave trade from 1807 onwards. But for the impoverished "mother country", besides sugar, coffee, tobacco and rum, it was above all the massive capital transfers from Cuba that were indispensable.
An example of the direct influence of the slave trade on industrialisation, which has been little researched in detail, is provided by the famous story of the cargo ship "Amistad": Captain Ramón Ferrer invested the profits from smuggling and human trafficking in the latest technology: Steamships, railways and port extensions - until 1839, when slaves on the "Amistad" revolted off Cuba and killed him. It was not until 1886 that the Spanish government banned slavery, and in 1898 Cuba also became independent.
In Spain itself, the first surge of industrialisation came when the first cotton factory to run on steam power opened in Barcelona in 1832. 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 dominated. 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 expand 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, collapsed. Although not yet entirely adapted to the global economy, Spain had, by the early 1970s, developed into a leading industrial nation.