Revamping the Weak, Protecting the Strong, and Managing Privatization

Abstract

Conventional wisdom holds that liberal economic policy and a hasty integration into the European Union is the central feature of Spain’s successful adaptation to the globalizationwave. This study argues that a set of illiberal and protectionist policies are crucial to understanding the Spanish transformation. Spain’s reorganization of its economy displayed three broad components: the revamping of industrial sectors from above; the targeted protection granted to the energy, banking, and telecommunications sectors; and a defined strategy of privatization that prevented any major international player from taking part in a given business. The author argues that this statist model of market transition in Spain was decisively shaped by two concrete features of the Spanish political economy as it unfolded under the import substitution industrialization model: the organizational and economic weakness of the domestic industrial bourgeoisie and the comparatively entrenched position of financial capital and its energy-controlled companies.