San José State University
Department of Economics


applet-magic.com
Thayer Watkins
Silicon Valley
& Tornado Alley
USA

Spain in the Economic Boom
and Bust of World War I

Spain was not a military participant in the madness known as World War I but it was strongly affected by it. During the war it experienced, particularly in the textile industries of Catalonia and the metallurgical industries of the Basque provinces, a tremendous increase in demand at raised prices. Profits were greatly increased from these two aspects and employment was also greatly increased. However domestic prices increased more than wages so there was a loss in buying power for the households that had employment before the boom. Labor unions tried to extract higher wages and better working conditions from the employers.

During World War I the Russian Empire collapsed and the Bolsheviks rose to power through effectively a coup d'etat. Employers and small business owners looked at conditions in Spain compared them fearfully with those of Russia. Union leaders made the same comparison and looked forward to a raise to power. The government saw the same possibilities and did not hesitate to use naked force to try to control events.

(To be continued.)


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