An analysis of Spain during the early part of the twentieth century

A capitalist society can be defined as a society where the more powerful elements of the social order control and exploit the lesser powers for gain or profit. In this essay I will show that in some ways Spain could have been described as a capitalist because of the inequalities that existed in the agricultural sector and also the undemocratic procedures of Caciquismo. However, I will also show the key aspects of Spanish society at the time such as its dependancy on other countries and its lack of internal investment. `In 1898 Spain lost its last two colonies, Cuba and The Phillippines.

This had a profound effect on all spheres of society in Spain, in particular the agricultural sector which was the country’s most dominant industry. As a result of the war Spain had lost a lot of its wealth and therefore its ability to engage in international trade. The war had caused a depression to fall over Spain, this can be seen as one of the reasons why the country decided to close down its imports and create an internal market. “The loss of American colonies and the wealth derived from them forced Spain to cut back on its imports from Europe, basic foodstuffs among them.

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We can see that this cut back can be one explanation for an increase of production of cereal in Spain in the early twentieth century after years of crisis. At this time production was such that it was able to meet the demands of the growing population. However, because the agricultural economy was largely dependant on cereal, Spain was somewhat left behind in the European market when we see that “by the first world war the gross value per hectare [in Spain] was less that half the french and less than one third the British. ”

In 1910, 60 percent of the Spanish population worked and lived off of the land. Despite this only two percent of the population actually owned it creating immense inequalities in the agricultural sector. The gap between employer and employee only added to the problems that the Spanish economy was facing. At a time when there was an industrial revolution taking place all over the Western world, Spain was left behind. The land owners of the time had an endless source of cheap labour at their hands and were not willing to spend the profits they were making very easily.

We can see that they did not re-invest their money into their business or research new technology that would make conditions more acceptable as other European landowners were doing. This lack of modernization had a devastating effect on the quality of the product which would prove to be unable to compete in a European market. The only option open to cerealists of the time facing difficulties was to demand that the country used a Protectionist policy to keep as much trade as possible within the country itself.

It was believed that this would stop Spain being engulfed by other European powers that were to competitive for Spain and keep economy at a decent level, for example ” the apparent increase in official figures if cultivation and production of wheat from 1891, the year when a new protective cereal tariff became operational, can be explained as a recovery from the ‘Great Depression’. The Protectionist laws were imposed at different times throughout the late nineteenth century and early twentieth century forcing heavy taxes or totally banning their entry to the country.

This lead to a false economy because although it kept the trade market consistent in the short term the long term effect would mean that Spain became stagnant and without hope of progressing as far as its competitors. The most important sector of industrialisation in most countries was the textile industry. This was also true of the cotton textile industry that existed in Catalonia. Nevertheless, again it was never to reach its full potential in Spain. “After the loss of Cuba … Catalan industry was dependent on the purchasing power of the domestic market. so again protectionist measures were imposed that would limit the growth of the industry itself.

This was disastrous because the Catalan industry was already weak compared to other countries; “factories were equipped with half the average number of spindles for the rest of Europe; output per man less than half that of the USA” As we can see the industries in Spain were inferior to those in Europe but they were still making a profit “growth and backwardness are two sides of the same coin… ong term sustained growth was accompanied by backwardness in relative terms”. Despite the profit that was being made there was still considerable strain in the Spanish economy due to the imposition of protectionist measures. There was some sort of capitalist system at work in Spain, underlined by the fact that the first bank was created in Madrid in 1901, Banco Hispano Americano thanks to profits made by the wealthy land owners and money that had been suddenly withdrawn from Cuba.

However, because of a lack of input from wealthy parties for the necessary research and technology in Spanish industry, the country was unable to take its place alongside the other European countries of the time. Its general poverty as a country meant that it would never have the means to be a totally capitalist country and in fact would itself depend on the rest of Europe. One way of illustrating such dependancy is to examine the fact that technological developments in Spain were mostly funded and consequently owned by foreign companies.

With regards to the transport system we can see that the railway network was built by foreign companies and left Spain without many advantages at all. Spanish progress with construction was slow and the government therefore passed a Railway law in 1855 that allowed foreign investors to import materials into the country duty free for ten years. As a result by the end of the nineteenth century two french capitalists owned some 80 percent of the railways in the country. In addition to this there was subsequently no stimulation of Spanish industry as there might have been.

Companies were using their own materials as they were cheaper, due to tax-free import laws and Spanish companies were left behind, for example,”between 1861 and 1865 imports of iron for railway construction amounted to more than twice the output of the national iron industry”. Yet again we can conclude that Spain was definitely a ‘fully-fledged’ capitalist society as it was being exploited for the gains of the foreign companies rather than making the profits that were available from its own transport network.

Turning to the political issues of the epoch we can see that there was a peculiar form of collaboration between the governing parties that enabled the capitalist tendencies that did exist in Spain to continue. There were the Liberals and Conservatives who literally took turns to govern. This system was called Caciquismo, it can be described as ” a consequence of the imposition of democratic institutions upon an underdeveloped economy”.

It involved powerful Caciques manipulating election results using bribery or faking election results; “election results were therefore often published in the pres before polling day. Usually the opposition candidates… withdrew and there was no contest”. This system left power in the hands of the caciques that they were not willing to lose. They bribed landowners with favours , for example exemption from military service or provided services and facilities for towns such as better roads or building universities, whilst at the same time keeping the wealth, power and society in the order that they wanted it.

Despite the inadequacy that Spain had shown on a European scale there was still a sense of social class within the country, mainly due to the inequalities between the landowners and the workers, the small minority who controlled the majority. This is similar to the common differentiation in capitalism between those who own the means of production and those who produce. In Spain the landowners owned the means of agricultural production and gained profit from this, whilst the workers received little reward.

This definitely suggests a capitalist society existed in some way albeit within a strange political set-up and economic strain. In conclusion, there are many economic, political and social spheres where capitalism is evident in society in Spain particularly within the agriculture industry and political system; but the dependancy of foreign investment for new technology and the fact that society was so inadequate in comparison to its European competitors proved to be obstacles in the pathway of a total capitalist society.