Management of the economy

What was Franco saddled with after WW2 + civil war?

Major debts which contributed to bleak social conditions

What was Franco’s commitment to economic growth hindered by?

High millitary spending

1939-45: 50% of gov expenditure on it

How much gov expenditure spent on military 1939-45?

50%

Who benefited from the 50% gov expenditure on military?

Industrialists w/ business interests directly linked to military

What was under developed due to 50% gov expenditure on military?

-industrial reconstruction

-public works

-agriculture

-social policies incl. education

How high was inflation 1939-45?

Highest in history

Wages didnt keep up

When did inflation reached highest in history in spain?

1939-45

When did standard of living match that of pre-civil war ESP?

1952

What happened in 1952?

Standard of living reached pre-civil war standard

Unemployment 1940-44

1940: 500,000 unemployed

1944: Just over 150,000 unemployed

What is

1940: 500,000 unemployed

1944: Just over 150,000 unemployed

Unemployment 1940-44

What was unemployment 1940?

500,000

What was unemployment 1944?

Just over 150,000

2 reasons why unemployment figures are misleading

-Disguise underemployment in rural areas

-Artificially lowered by civil war casualties

What is

-Disguise underemployment in rural areas

-Artificially lowered by civil war casualties

2 reasons why unemployment figures are misleading

When did exports reached highest in pre-civil war levels?

1950

What happened in 1950?

Export levels reached pre-civil war levels

What was ESP currency and issue with this

Peseta

Weak currency so affected currency exchange + export costs

What affected currency exchange + export costs?

Spain’s weak currency (peseta)

Economic policy Franco introduced to re-energise industry

Corporatism

What is corporatism?

Introduced by Franco to re-energise industry

Brought workers + employers into decision making, particularly economic policy

What is

Introduced by Franco to re-energise industry

Brought workers + employers into decision making, particularly economic policy

Corporatism

What was set up as part of corporatism?

Gov ran syndicates intent on improving relationship b/t workers + employers

What did gov ran syndicates allow the gov to do? (3)

Impose wage rates, production targets + price of goods

Criticisms of corporatism

Gov just used it to impose wage rates, production targets + price of goods + stop strikes

Excluded small businesses coz not part of syndicate

What did workers lose under corporatism?

Right to strike

How did corporatism inhibit growth?

Low wages for workers = less consumption

Corporatism’s failures

Negotiations not always successful

What other economic policy was adopted, in conjunction w/ corporatism?

Autarky

2 reasons why autarky was adopted

-ESP’s economic + political isolation from EUR

-Economic nationalism

What is

-ESP’s economic + political isolation from EUR

-Economic nationalism

2 reasons why autarky was adopted

Autarky was a

protectionism policy which inhibited trade

Why did autarky inhibit trade?

Was essentially a protectionism policy

What did autarky discourage?

Foreign investment

Consequence of autarky discouraging foreign investment

Low economic growth

What is a barracas?

Ramshackle shelters

What are chabolas?

Shanty towns made up of barracas

Where were barracas + chabolas and what do they show?

Northern Spain

Shows failure of autarky + unemployment issues

4 reasons why corporatism was an economic failure

-Falling living standards (chabolas, 1940s wages up 30%, prices up 600%)

-An illusion, external stakeholders limited input + gov in control

-Significant regional variations in effectiveness

-Failed to generate innovative or creative economic policies

What is

-Falling living standards (chabolas, 1940s wages up 30%, prices up 600%)

-An illusion, external stakeholders limited input + gov in control

-Significant regional variations in effectiveness

-Failed to generate innovative or creative economic policies

4 reasons corporatism was an economic failure

Despite corporatism banning strikes,

they still continued

Did strikes still continue under corporatism?

Yes

2 economic issues from autarky

-Lack of foriegn investment = slow economic growth

-Lack of foreign trade = low quality synthetic materials made eg: oil made from coal. Expensive to make + cheaper to import

Example of low quality synthetic material produced in spain due to lack of foreign trade

Oil made from coal

Expensive to make, cheaper to import

What did a lack of foreign trade due to autarky cause?

Production of low quality synthetic material eg: oil made from coal

Expensive to make, cheaper to import

1940s wages vs prices

Wages up 30%

Prices up 600%

1940s wages up 30% prices up

600%

1940s prices up 600%, wages up

30%

Autarky led to shortage of fertiliser. What social problem did this cause?

Decreased agricultural production leading to shortages = hunger + malnutrition

agricultural production ¼ of 1933 level

200,000 died in years of hunger 1939-44

How many died in years of hunger 1939-44, caused by shortage of fertiliser due to autarky?

200,000

Why did 200,000 die in years of hunger 1939-44?

Shortages of fertiliser due to autarky caused agricultural production decrease

¼ of 1933 level in 1940s

When was agricultural production ¼ of 1933 level?

1940s

What was agricultural production levels 1940s?

¼ of 1933 level

2 reasons Franco began to gradually abandon autarky + corporatism

-Neither capable of sustaining economic growth

-Growing opposition from m/c

What is

-Neither capable of sustaining economic growth

-Growing opposition from m/c

2 reasons why Franco began to gradually abandon corporatism + autarky

What was Franco’s mia motivation for his economic policies?

Keeping popular support (autarky = Falange, corporatism = big business)

Abandonment shows Franco is pragmatic

As the 50s progressed, what was Franco more willing to accept?

Views of new gen officials who advocated modernism + more outward looking focus

Was Franco’s economic policies 1938-56 effective at maintaining control?

No coz of their ineffectiveness