Francisco Franco with his focus on retribution and maintaining political control stagnated the economy and culture of Spain. He provided for control to pass to the heir to the Spanish throne upon his death. There was every reason to expect that the moribund system would continue, but instead the economy and politics of Spain blossomed. Often the economic growth rate for Spain was the highest of the countries of Europe.

Traditionally the economic policies of Spain have been protectionist and its leaders sought economic self-sufficiency. This self-sufficiency required of course a large agricultural sector.

During World War I there was such a great demand for agricultural products that Spain's agricultural sector thrived despite its inefficiency. When that war ended Spain found it could not compete in the competitive world markets and it returned to protecting its domestic production from international competition.

There were some regional exceptions to economic backwardness in Spain. The Basque country underwent an industrial revolution. Manufacturing industry and banking developed on a scale and quality comparable to the world outside of Spain. Barcelona and the rest Catalonia developed successful production and trade in textiles.

Although the leaders in Spain strove for autarchy they could not entirely insulate Spain from economic developments in the outside world. When the Great Depression of the 1930's spread around the world Spain was affected. Unemployment and social unrest emerged in the early 1930's. This resulted in electoral victories for a coalition of the socialist and communist parties called the Popular Front. The Popular Front leaders embarked upon a program of economic, social and political revolution. One aspect of this revolution was to reduce the power and influence of the Catholic Church. The Popular Front was anticlerical; much of the population of Spain was still devoutly Catholic. The actions of the Popular Front government against the Church and against the property owners frightened many. The Popular Front government also began to allow regional autonomy. This frightened the Spanish nationalists who feared that Spain would break apart.

General Francisco Franco emerged as the leader of these frighten segments of the Spanish population. Franco was a young general in command of the Spanish troops in Morocco. In 1936 he led his troops in rebellion against the Republican government. These troops quickly established control over rural areas of Spain. The Basque country which might have been sympathetic to the social conservatism of Franco's movement was supportive of the Republican government because of its position on regional autonomy. The Basques were brutually conquered by Franco's forces with the help of regimes of Adolph Hitler in Germany and Benito Mussolini in Italy.

Joseph Stalin sent military aid to the Repulican forces but most of the other nations of the world adopted a position of neutrality in the civil war. Gradually over a three-year period the Repubican forces were defeated. Internecine feuding among the Republican forces contributed to their defeat. In particular, the Stalinist communists treated their socialist and Trotskyite communists among the Republican forces as as much the enemy as Franco's forces. By 1939 the Republican forces were defeated.

Franco was vindicative and treated Spaniards who fought for their legal government as traitors. His focus was on consolidating his power and the rigid central control he established stagnated the Spanish economy. It took twenty years for the living standards in Spain to achieve their pre-Civil War levels.

By the 1960's the Spanish economy and Francisco Franco were both decrepit. At that time some reforms were allowed by the bureaucrats Franco permitted to rule Spain. These limited reforms produced a surge in economic development. Spanish workers were allowed to work in Germany and other western European countries and the pay they sent home was an important benefit for the Spanish economy.

The surge in petroleum prices that the Organization of Petroleum Exporting Countries (OPEC) instigated in the early 1970's and the one that followed the revolution in Iran in 1979 brought an end to Spain's economic development and led to high unemployment.

Generalissimo Francisco Franco died in 1975 and Prince Juan Carlos de Borbón became king and nominal ruler of Spain. Franco had tried to groom Juan Carlos to continue his authoritarian nationalist rule. Instead Juan Carlos promoted the transition of Spain to a pluralistic democracy. He and the prime minister, Adolfo Suárez González, accomplished this peacefully within a few years. There was an attempted coup d'etat by the military in 1981 but Juan Carlos, because of his good relationship with the military, was able to defuse this and return control to the elected government.

In 1982 the Spanish Socialist Workers' Party (Partido Socialista Obrero Español PSOE) under the leadership of Filipe González Márquez, won a majority in the Spanish Cortez, the lower house of the Spanish legislature. The PSOE government opted for liberal reform instead of doctinaire socialism. This meant orthodox monetary and fiscal policies. Instead of promoting state control of industry the PSOE decreased the size of the inefficient state enterprises that already existed under the corporatist Franco regime. Spanish business prospered and foreign investors began to trust the Spanish government enough to start making investments in Spain.

The PSOE government set a goal of admission of Spain into the European Community (EC) and this was achieved in 1986.

(To be continued.)