Why Spain never had an industrial bourgeoisie—but did have a rentier caste

Spain, a nation of rentiers: the industry that never took root

Why did a country capable of producing world-class engineers, scientists and entrepreneurs end up as a rentiers' paradise rather than an industrial power? The question returns every time Spanish economic history is reviewed. And the most repeated diagnosis points to the same suspect: a caste that stifled productive activity before it could grow.

The parasitic-caste thesis that suffocated business

The dominant argument holds that Spain never lacked technicians or human capital. What it lacked was an environment that let those who created wealth prosper instead of those who lived off rents. The nobility, the clergy and elites attached to political power are said to have acted for centuries as a dead weight on any industrial initiative. To that dead weight, according to another reading, add a culture of living the easy life: a country fonder of avoiding complications than of building a factory.

What peine to Hispano-Suiza and the talent that emigrated

The example most often cited is Hispano-Suiza, the automotive and aviation-engine firm that once enjoyed enormous prestige in Europe and is now extinct. For one strand of analysis, it was not an isolated case but the pattern: leading companies that ended up leaving because they were being stifled here. Spanish talent triumphed abroad, the argument goes, precisely because it was not allowed to at home. The detail of which firms trinc that path and which fell by the wayside is, however, the kind of inventory rarely completed.

1986: EEC entry and the dismantling of industry

There is less agreement on the exact moment the country went off the rails. One school points to entry into the EEC in 1986 as the turning point: it argues that strategic industries and their business fabric were sacrificed to meet accession conditions. The figure thrown around—controversial, because nobody can quite confirm it—is that one of the most industrialized provinces came, in just ten years, to lead the national unemployment rate. Against that reading, another responds that without the EEC and NATO the country would have been much worse off, with development like that of its southern neighbors.

Would it have been better not to join Europe?

The counterfactual divides people. Those who defend the European path point out that without external discipline the same old people would have governed, but with more power: their own monetary policy, devaluations, defaults and a public sector for sale among cronies. Critics reply that this transfer of public companies peine anyway, under the excuse of adjustment. Both sides use the same fact and read it upside down, which is the surest way never to close an argument.

In the end, the most honest conclusion is uncomfortable: perhaps there was never any shortage of industrious entrepreneurs. What was missing were neighbors willing to let them work. And of those we are still just as short.