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2021 | Buch

Between Empire and Globalization

An Economic History of Modern Spain

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This book provides a rigorously chronological journey through the economic history of modern Spain, always with an eye opened to what happens in the international economy and a focus on economic policy making and institutional change. It shows the central theme of the Spanish economy from the late 18th century to the early 21st century is the painful transformation from being a major imperial power to a small nation and later a member of the European Community and a player in a globalized economy. It looks in detail at two major issues - economic growth and convergence or divergence to the Western European pattern- and the permanent tension between the two when assessing historical experience since the industrial revolution. This book proposes new visions of the economic past of Spain and provides comparisons over time and space, which will be of interest to academics and students of economic history, European economic history and more specifically Spanish economic history.

Inhaltsverzeichnis

Frontmatter
Chapter 1. The Economic Growth of Spain: A Very Long-Term Perspective
Abstract
This chapter provides two introductory pieces to the whole book: a geographical overview of the natural constraints of Spain, and a quantitative overview of Spanish economic growth over the last three centuries. The quantitative overview examines the growth patterns of the Spanish population. It then shows what has been, in broad terms, the economic evolution of the country in the very long term, resorting to GDP per capita, and its comparative performance—convergence or divergence—taking, first, Western Europe as a standard, and afterwards, the whole world. Later on it pays attention to alternative measures of well-being, as heights and human development. A final section of the chapter is devoted to the long-term movements of the major nominal variables—prices and exchange rates—as well as their fundamental determinant, the quantity of money.
Albert Carreras, Xavier Tafunell
Chapter 2. From Empire to Peripheral Economy (1789–1840)
Abstract
Just before the outbreak of the French Revolution, Spain had a huge Empire. The era of revolutionary and Napoleonic wars was a succession of military failures that made difficult for Spain to keep its Empire under control. By 1827 it had lost most of it. The chapter explains the collapse of colonial trade, the most productive outcome of all American riches for metropolitan Spain; the collapse of the absolutist Treasury, unable to cope with so many wars with much less income than before, and the crisis of the Old Regime followed by the painful birth of a liberal regime. To adapt to a much smaller economy and market, national integration between agriculture and manufacturing developed, at a lower productivity level, far from the British standard. The chapter concludes reviewing the place of Spain in the debate on the great divergence.
Albert Carreras, Xavier Tafunell
Chapter 3. The Impact of European Industrializationindustrialization European : The Double Failure of Agrarianagrarian strategies and Industrial Strategiesindustrial strategies (1840–1890)
Abstract
During most of the nineteenth century, the Spanish economy grew modestly, perhaps too much. Indeed, it diverged from Western Europe. Being already a small nation instead of the great Empire that it was, it adapted to the new circumstances of the international economy, especially the UK abolition of the corn laws, that opened its economy toagricultural and mineral products from all countries in the world. Spain enjoyed agricultural expansion and some growth thanks to economic liberalization and internationalization, new technologies like the railways, and financing facilities through a new banking system. The State completed a tax reform to have the means to support some of these investments. Manufacturing also enjoyed its own industrial revolution. But in the 1880s both the agrarian and the industrial strategies collapsed.
Albert Carreras, Xavier Tafunell
Chapter 4. Spain in the First Economic Globalizationglobalization first (1890–1914)
Abstract
The combination of lower tariffs and technological breakthroughs in land and maritime transport made international trade much cheaper. It was reinforced by the diffusion of the gold standard. For a quarter of a century, the world experienced an unprecedented economic globalization, with massive movements of goods, labour and capital. Spain missed some of the available opportunities. The transport revolution played against domestic agriculture triggering a great agrarian depression. Large free trade agrarian and manufacturing interests turned to tariff protection. The loss of the last overseas colonies made things worse. Luckily enough, the formation of the modern business enterprise and the start of the second industrial revolution made Spanish investment attractive as Spain had a weak exchange rate. Nevertheless, a slow divergence with Western Europe was the dominant trend until 1913.
Albert Carreras, Xavier Tafunell
Chapter 5. The Spanish Economy During Great War and Interwarinterwar period Years (1914–1936)
Abstract
Spain escaped the Great War. It was a neutral country. Internal opinion and elites were too much divided between the two blocks to take any decision. This real neutrality, in a very good geostrategic situation, provided many opportunities as well as losses. The immediate post-war years were a major distributive struggle between classes, sectors and regions. Once it was settled, interwar years—both the 1920s and the early 1930s—were quite different to most Western European countries precisely because of a better heritage from the Great War. The 1920s were booming and the Great Depression was less dramatic than in many other big economies. On the contrary, Spain could not enjoy the economic recovery of the late 1930s as it entered into a devastating Civil War.
Albert Carreras, Xavier Tafunell
Chapter 6. The Isolation from the International Economy: Civil War and Autarkyautarky (1936–1951)
Abstract
Spain was a closed economy during fifteen years. Initially it was so because of the Civil War—social revolution and war economy included. During Second World War closing was radical as foreign currency was very scarce and military alliances very risky. The new regime deployed a completely closed economy—an autarky—that was defined as a permanent and strategic choice for Spain. Consequently, Spain did not enjoy most benefits of post-war reconstruction, contrary to most Western European countries. This long autarky made a strong imprint in Spanish economy, difficult to overcome. It impoverished the country, it induced regressive distribution and increased inequality. Market intervention was widespread as well as black markets and rationing. The exchange rate was deeply altered, as never before nor after.
Albert Carreras, Xavier Tafunell
Chapter 7. Import Substitution Industrialization (1951–1959)
Abstract
In the 1940s Spain went through a failed autarkic industrialization. As it was politically and economically unsustainable, especially in front of Western Europe’s successful post-war reconstruction, it had to move to a less rigid scheme: import substitution industrialization (ISI). It happened at the same time than in many other countries, notably in Latin America and the Middle East. In Spain it was a flexibilization of autarky. Cold War allowed for a change in the attitude of the main Allied powers regarding Franco’s Spain. The US provided substantial support through military agreements, making ISI possible and sustaining quick growth during a few years. A new “national” capitalism was structured that lasted for long. Nevertheless, the growth model was also unsustainable and it collapsed in 1959. The Stabilization Plan of the same year put an end to it.
Albert Carreras, Xavier Tafunell
Chapter 8. Spain in the Golden AgeGolden Age : Reintegration into the International Economy (1960–1973)
Abstract
After the Second World War, Western Europe experienced a rapid and successful economic reconstruction. Once completed, the era of the greatest economic prosperity in history—the Golden Age—was inaugurated. However, the Spain of the 1950s did not fully participate in the wave of general welfare, as it was too much autarkic. In Spain, the Golden Age would not truly arrive until after the implementation of the Stabilization Plan, that also was a liberalization blueprint. With the opening to the world, the Spanish economy took advantage, at last, of the growth opportunities provided by the dynamism of the international economy to industrialize and to modernize agriculture through mass emigration to Western Europe and to big Spanish cities. It converged intensely to European standards. Once high growth was activated, Franco’s regime came back to interventionism to keep economic power intact.
Albert Carreras, Xavier Tafunell
Chapter 9. Economic Crisiseconomic crisis and Political Transitiontransition to democracy period (1973–1985)
Abstract
The 1973–1974 oil crisis exploded against a background of inflationary trends across developed economies and a growth deceleration after many years of exceptional growth rates. It put an abrupt end to the Golden Age. In Spain this happened simultaneously to the end of the Franco era and the difficult transition to a new democratic regime. Weak political foundations explained weak economic policy reactions—notably high inflation—for a number of years, until the new regime was well established. For this to be completed, major social pacts were necessary, including the commitment to build a real Welfare State. But the industrial and banking crisis, added to the second oil crisis, caused mass unemployment. Structural policies and institutional change to overcome both were slow to be implemented. Only entering the European Economic Community could be a real solution.
Albert Carreras, Xavier Tafunell
Chapter 10. Integration into the European Economy (1986–1998)
Abstract
Spain’s entry into the European Union (then the EEC) has undoubtedly been one of the most important events in the history of modern Spain. Negotiations to enter into the European Communities were closed in 1985 and Spain (and Portugal) became members of the EEC since 1st January, 1986. This changed the economic mood triggering a vibrant business cycle, made of foreign investments and imports. The real effects of integration were very positive as well as the institutional reform policies. As the Community approved in 1989 the so-called Economic and Monetary Union to create a common and single currency within ten years, nominal integration and the transition to a single currency became the next challenge. Spain fully entered into the second globalization through EEC and the European Union.
Albert Carreras, Xavier Tafunell
Chapter 11. Spain in the Euro Area (1999–2017)
Abstract
Spain joined with enthusiasm and internal consensus the EMU. The economic cycle of adopting the euro opened the way to unbridled indebtedness. A long credit, real estate and immigration boom, followed. Spanish big business went multinational for first time in modern history. Nevertheless, exceptional macroeconomic imbalances appeared that made Spain highly vulnerable. When the bursting of the bubble came, a major banking and building crisis and mass unemployment followed. As the euro was under pressure, the era of zero risk premiums came to an end and an enormous fiscal crisis went out of control. Many policy reforms had to be designed in a rush to rescue banks, devalue labour and protect pensions. The European Central Bank policy change was decisive to stop the road to monetary disaster and to restart growth.
Albert Carreras, Xavier Tafunell
Chapter 12. Balance of Two Centuries: Growth Engines and Economic Policies
Abstract
The final chapter looks, first, at the growth engines—the sources of productivity growth—of the Spanish economy in the long term. Special attention is paid to structural change and labour productivity distinguishing amount and quality of work. Second, it addresses the performance of economic policies, focusing on the two balances affecting growth stability: foreign accounts and public accounts. Both may build up major challenges to stability and growth when they become “twin deficits”. Monetary policy has had the responsibility to respond to these challenges mainly managing the exchange rate. Growth and stability are the main argument of the book, and they use to be intertwined. The chapter reviews the impact of both on income distribution, the major issue in collective action. This two centuries overview wraps up weighing the role of institutional change.
Albert Carreras, Xavier Tafunell
Backmatter
Metadaten
Titel
Between Empire and Globalization
verfasst von
Albert Carreras
Xavier Tafunell
Copyright-Jahr
2021
Electronic ISBN
978-3-030-60504-9
Print ISBN
978-3-030-60503-2
DOI
https://doi.org/10.1007/978-3-030-60504-9