3. The Impact of European Industrialization: The Double Failure of Agrarian and Industrial Strategies (1840–1890)

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.