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International Socialism, Winter 1963/4


André Giacometti



From International Socialism, No.15, Winter 1963/4, pp.32-36.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Proofread by Anoma Cartwright (July 2008).


1. Decline of ‘pure’ fascism

Spanish society is changing. The Financial Times calls it a ‘secret revolution’; other spokesmen for international business proclaim that ‘Spain is on the move’ and that it is preparing to play a ‘completely new role in the Western world’. What is this change? What does it mean for the labour movement? Fascist Spain, as it emerged from the Civil War, rested on three pillars: the Army, the Church and the Falange. The corporate state was the institutional framework through which these forces expressed themselves politically. Doctrinaire fascism, as expressed through the Falange, fitted the requirements of a depression-ridden capitalism, threatened in its existence by a radical labour movement. Today, there are more effective and less expensive methods of maintaining the present ruling class in power. The new answer is: participation in European prosperity, expanding production and even – if profits permit – rising living standards. Spanish capitalism looks enviously at the ‘economic miracles’ of its neighbours; it is weary of the endless fight against the illegal labour movement, which has proved to possess practically unlimited staying power. It aspires to a peaceful settlement, and it is prepared to pay the price, as long as the price only involves money. Therefore the economy is being liberalised, the corporate state dismantled and the pieces sold to the highest bidder, and the Falange reduced to a club of disgruntled veterans of the fascist counter-revolution. Most important, foreign capital – and especially US capital – is invited to take over. Spanish capitalism today, modernised, liberalised and respectable, rests on two pillars: foreign money and the Army.

The Stabilisation Plan, implemented in 1959, represented the first step towards the new policy. With its devaluation of the peseta, its limitations on credit, its import restrictions and its other deflationary policies, it seemed to promote, at first, only bankruptcies and unemployment. By the end of 1960, however, the tide had turned. Exports revived and tourists with fistfuls of ‘cheap’ pesetas flocked to Spain. In 1962, revenue from tourism amounted to nearly 450 million US dollars (£160 million), more than enough to cover the deficit in the balance of trade. Spain’s reserves now amount to 1.1 billion US dollars, as against six million in 1959.

Unquestionably, the economy could not have revived in this way without US aid. Between 1953, when the US signed a defence treaty with the Franco regime, and 1962, when US economic aid was discontinued, the US invested more than two billion dollars in the country’s economic and military establishment. Today, however, the Spanish economy is on its own.

The framework of its development is to be the National Development Plan, now in preparation. It is based on the recommendations of a World Bank mission, composed of sixteen experts and headed by Sir Hugh Ellis Rees and Mr. Benjamin B. King. The mission spent from March to June 1961 in Spain and its report, which was completed some 12 months ago, was published by the Spanish government early in October 1962. It recommends, among other things, a comprehensive and flexible system of state planning on French lines, based on incentives offered to private capital to replace the present direct intervention of the state in industry, commerce and agriculture. It calls for a more developed and less controlled capital market, the freeing of imports, the modernisation of transport, the reorganisation of agriculture by the regrouping of smallholdings into larger units (there is no suggestion of agrarian reform by the division of large estates in the feudal South), improved methods of marketing, more public funds and incentives for industry, particularly in export industries, increased credits for the tourist industry and expansion of education, especially of technical and vocational training.

The report has not yet been accepted, but there is every likelihood that its main provisions will become government policy. Over the last three years, the government has reformed the taxation system, adapting it gradually to those prevailing in the Common Market, has liberalised over 70 per cent of imports, and has liberalised foreign investments. All these measures are moves in the direction shown by the World Bank’s recommendations.

The ‘anti-trust’ legislation now in preparation goes in the same direction: it is intended to break up Spanish trusts and to facilitate the penetration of foreign capital in hitherto monopoly-dominated sectors.

The entire policy depends for its success on whether the expected support by foreign capital materialises. For this reason, one of its principal features is that it throws open the economy to foreign companies. That this move has become successful is shown by the fact that some 200 million US dollars worth of foreign capital has been attracted to date. Since July 1959, foreign participation in new Spanish companies is authorised up to 50 per cent of equity, or more by special permission. This law, according to international business spokesmen, ‘changed the climate completely’. On 15th March, 1962, a ministerial order authorised foreigners to invest in Spanish stocks and shares. In May 1962 full repatriation without limit of capital and earnings in pesetas or foreign exchange was authorised. This decree abolished a previous classification of foreign investments into preferential and non-preferential, the first having rights to faster repatriation of capital and unlimited withdrawal of funds.

Almost all the applications for preferential status (42 per cent) were granted between October 1959 and April 1962. Of these investments, which amounted to 93.76 million US dollars, over 40 per cent were of US origin. During the same period, 97 per cent of applications for plus-50 per cent of equity were approved, representing 57.7 million US dollars. Apparently 75 per cent foreign ownership is relatively easy to obtain in all sectors except for the petroleum industry; authorisation for wholly-owned subsidiaries are more difficult to negotiate, but Pepsi-Cola, among a few others, secured a promise in 1961 to be allowed to establish a wholly-owned subsidiary. Figures available for 1962 show that foreign investments exceeding 50 per cent reached 66 million US dollars, or 64 per cent more than in 1961. Of this sum 8.2 million US dollars (12.5 per cent) were invested in wholly-owned subsidiaries. The largest share of any single country was that of the US with 30 per cent, followed by Switzerland with 10 per cent, France and Western Germany coming fourth and fifth respectively with 4.6 per cent and 3.6 per cent, followed by the United Kingdom with 1.5 per cent. Of the various economic sectors involved, ‘services’ claimed the largest share with 48 per cent, followed by chemicals (26.7 per cent) and building (8.5 per cent). A considerable amount of the foreign money coming into Spain is being invested in real estate along the Mediterranean. As a result, land values have soared to ten times or more of their value within a few years. The recent investment of La Centrale, one of Italy’s largest financial holding companies, in the Eurosol Company, in partnership with Spanish and French interests, is a typical case in point. Eurosol is to develop tourist installations on the Costa del Sol, the Spanish Mediterranean coast in the Malaga area. La Centrale held vast interests in the Italian electrical industry and the money which is to be invested in Spain comes from compensation paid by the government for nationalisation.

The tourist industry is, of course, one of the sectors where the government is prepared to make every effort to attract foreign investments. The increase in tourism (an estimated nine million in 1962, ten million expected in 1963) is, as we have seen, largely responsible for the favourable balance of payments. As a corollary to the required foreign investments in tourist areas, the government promises roads, communications and public utility development and, as an added incentive, it hopes to reduce taxes on new hotel developments and to eliminate price ceilings on luxury installations.

Food processing, especially of fruit and vegetables, is another field where foreign investments are likely to receive massive encouragement from the government, whose main concern is to promote exports industries which will help improve the balance of payments and make Spain more competitive with the European Economic Community. Processing of agricultural products is definitely one of the greatest potentials, and one can therefore expect increasing numbers of food firms from the US and Western Europe, especially those engaged in canning, freezing and distribution, to establish Spanish subsidiaries.

2. Labour conditions

What does the proposed ‘economic miracle’ hold in store for the Spanish workers? Very little, according to the official plans. One of the big talking points of government spokesmen seeking to attract foreign capital remains the low Spanish wages. In spite of recent increases in various sectors, the wage level remains one of the lowest in Europe. The official minimum daily wage has remained at the very low level of 36 pesetas (0.60 US dollars or 4s. 6d.) since 1956, in spite of the drastic increases in the cost of living. Only from 1st January 1963 has the minimum wage been increased to 60 pesetas per day (1 US dollar or 7s.), not even half of the estimated vital minimum necessary to support a four person family in Madrid, which is 154 pesetas. Even so, only about 15 per cent of the Spanish labour force is expected to benefit from this increase. These 15 per cent mainly include farm workers: in Cordoba province, 65,000 women, or 70 per cent of the female farm labour force, were earning from 30 to 35 pesetas daily, and 25 per cent of male farm workers earned less than 60 pesetas. As to the minimum figure of 154 pesetas, it is estimated that only one of six wage earners’ families enjoy such an income.

At a meeting earlier this year between Mr. Lopez-Rodo, Development Plan Commissioner, and leaders of the Falangist sindicatos, the corporate organisations which exist in lieu of trade unions, Soliz Ruiz, chief of the Falange and head of the sindicatos, stated that one third of Spanish wage earners were still paid only 32 pesetas a day in basic wages. At the same meeting, it was pointed out that the cost of living had increased far more than Mr. Lopez had claimed, and that no worker could survive on his salary if the Plan was followed to 1968. According to recent official statistics, the cost of living in Spain has increased by 5 per cent in 1962, and for food alone by 7.7 per cent. However, the true figures are much higher and generally estimated at about 20 per cent.

It is often pointed out that Spanish workers earn more than the basic wage in the form of various fringe benefits, such as night work differentials (40 per cent over the basic wage), hardship allowances, cost of living and transport allowances, incentive bonuses (from 30 per cent to 125 per cent of the basic wage), overtime (limited to 50 hours per month and paid 25 per cent extra for the first two hours, 40 per cent in excess of two hours and on Sundays), two yearly bonuses (varying from ten to thirty days’ pay), paid holidays (3.4 per cent of the basic wage) and profit-sharing bonus (8.1 per cent of annual earnings). However, when all this is taken into account, unskilled industrial workers still average no more than 60 pesetas per day, skilled trades 70 to 100 pesetas per day. Slightly higher wages prevail in the metal industry, where massive emigration after the unemployment created by the Stabilisation Plan of 1959 makes for a shortage of skilled workers. A chief accountant may only get 5,000 pesetas monthly, an office clerk 3,500 pesetas. As a result, ‘moonlighting’ and part-time jobs on the side are very widespread.

Contrary to the impression that is sometimes fostered by the government, the Development Plan does not provide in any way for a high wages policy. Such increases as have recently been granted only reflect alarm on the part of the government and the sindicatos after the strike waves of 1962 and, whilst there may be other such increases, the planners’ intention is rather to subordinate further wage increases to previous, and vastly more important, increases in production and profits. The assumption is, apparently, that the money will eventually trickle down to the deserving poor. Whilst the Spanish bourgeoisie may be prepared to buy a measure of industrial peace with money, it is not prepared to volunteer any concessions.

Another significant step by the government was the introduction, in 1961, of the unemployment compensation law. This apparently progressive measure removes in fact one of the few safeguards remaining to the workers under the fascist regime: that of not losing their jobs. Under the labour contract law of 1944, dismissal of an employee on any grounds was made very difficult. Today the government seeks to abolish these restrictions within the framework of its adaption to ‘free enterprise’. Dismissals have been made easier, and unrestricted employers’ rights in this field may not be far off. In the absence of genuine trade unions, job security, wages and conditions will be largely determined by the law of supply and demand on the labour market or, alternatively, by illegal strikes. The unemployment compensation law is intended to cushion the shock when restrictions on dismissal are lifted. This is the significance for the workers of the ‘high labour mobility’ recommended by the World Bank and described to foreign capitalist circles as another advantage of investing in Spain.

Another aspect of ‘liberalisation’ has been the passing of the so-called ‘codetermination’ law by the Cortes (Parliament) in 1962. Under this law, workers’ representatives must be admitted to the boards of private companies. Labour management committees, who are composed of representatives of production and office workers but who have only advisory functions, and who are chaired by the manager of the firm, already exist in undertakings employing more than 250. Such legislation is not taken seriously by anyone. Business commentators have said that ‘it would be ridiculous to suppose that codetermination in any form likely to be approved by the Spanish cabinet will effectively limit management’s power of decision or give labour an effective voice in the running of a private enterprise.’ The limits of liberalisation become particularly clear-cut when Spanish workers initiate any independent action to improve their position. The fact that last year’s strikes could take place at all was interpreted in some quarters as a further sign of liberalisation. It was generally forgotten that a regime which has staked its existence on its ability to attract foreign capital from democratic countries and to become acceptable to European public opinion could hardly afford to present the world with the spectacle of unmitigated police terror and repression. As it happens, the repression did take place, only it was delayed and quiet. In the weeks following the strikes, hundreds of Asturian miners were dismissed, imprisoned, deported and banished to remote provinces, that is, cut off from their jobs and their livelihood.

As for the treatment of the political opposition, nothing has changed. Particularly since the beginning of this year, the military courts have been working overtime all over Spain, handing down heavy prison sentences against left wing and labour opponents of the regime. The execution of the Communist leader, Julian Grimau, was only a particularly brutal incident in the pattern of repression.

3. A changing ruling class?

Recent political developments indicate that to the extent that the liberalisation is genuine, it is not so much a deliberate policy as an inevitable by-product of the decomposition of the regime. They also show that the pressures generated by economic ‘liberalisation’ cannot be absorbed by the old fascist framework of the Spanish state. The political impact of the new economic policies on the ruling establishment are interesting to observe, as they have a direct bearing on the ability of Spanish labour to regain the initiative.

Responsible for the economic liberalisation is the ‘liberal’ team of ministers which has been brought to the fore by Franco since 1959 with the specific assignment of preparing Spain’s read-mission into Europe. The Minister of Foreign Affairs, Castiella; the Minister of Finance, Navarro Rubio; the Minister of Commerce, Ullastres; the Minister of Labour, Romeo Garria; the Minister of Industry, Lopez Bravo; the Minister of Information and Tourism, Fraga Irribarne; and the Development Plan Commissioner, Lopez Rodo, are representative leaders of this tendency. Many of them belong to the ‘Opus Dei’, a Catholic order with a conservative authoritarian programme, strongly opposed to left-wing Catholicism and, indeed, to all liberal tendencies in the Catholic Church.

The new team has been described as ‘liberal’ as a result of the prevailing semantic confusion, and by wrongly extending the economic meaning of the word to the social sphere. In fact, they are as conservative as Metternich was in his time, and the real nature of the Cabinet is perhaps best revealed by the fact that it is headed by General Munoz Grandes, Franco’s second-in-command, and the former commander of the ‘Blue Division’ who fought alongside the Nazis on the Russian front. What distinguishes them from the Falangist old guard is a technical competence in their field, a capacity of formally adapting to foreign democratic opinion (of the relaxation of press censorship and of the restrictions on Spanish protestants) and a certain pragmatic flexibility. None of this affects their basic aim, which is to preserve a conservative and authoritarian regime by whatever means seem most effective in the given situation. They are modern, conservative technocrats, rather more reactionary than their counterparts in the Gaullist establishment or in the right wing of the German Christian-Democratic Union. The main opposition to this group and to their policies comes from the Falange, headed by Jose Solis Ruiz, ‘Minister Secretary-General of the National Movement’. The Falange which, like all fascist organisations, is committed to State control over the economy, bitterly resents the spread of economic liberalism, the growing influence of foreign capital and the proposed dismantling of the National Institute of Industry (INI), which includes the State-owned undertakings.

The World Bank report lists 61 ‘major enterprises’ in which the INI has a total holding of P36 billion (£225m.) out of the companies’ nominal capital of P42.9 billion. There are about 80 enterprises under INI control: 15 wholly owned, 28 with majority control, 14 indirectly INI-controlled, three with indirect INI participation and over ten with minority participation. These include the SEAT car manufacturing company (producing the Italian FIAT under license), ENASA (trucks and buses), ENSIDESA (steel) and, in the food industry, live-oil residue processing plants. INI directly employs some 100,000 persons. Plans to break up an empire of this size and persuade it to divest itself of its holdings are, predictably enough, meeting strong opposition. However, this is precisely what the government proposes to do. Pieces of INI are offered to foreign investors and the Minister of Industry assures the press that the remainder will not ‘compete unfairly’ with private industry but will operate on ‘normal market lines’, with investment plans being made public in advance.

Another blow to the Falange is a by-product of the strikes of 1962, which resulted not only in wage increases – soon to be wiped out by increases in consumers’ prices – but in a new legislation concerning industrial disputes. Last September, a three-step system to solve such disputes came into effect. It provides for conciliation attempts through the sindicatos, arbitration by administrative authorities and, finally, rulings by special labour courts. The jurisdiction of the labour courts, which were previously permitted to handle claims by individuals only, was extended to cover collective disputes between labour and management. The decree, which takes care to reaffirm that strikes are prohibited, nevertheless concedes that ‘in a fast developing economy’ disputes between workers and employers are liable to occur. Until the decree, such disputes were considered to be the internal affair of the sindicato and, if they could not be contained within the framework of the sindicato, the police took over. Now labour inspectors are authorised to mediate in collective conflicts at any time, consulting impartially with ‘both sides’. The wording of the decree implies that the official sindicato organisation may be by-passed whenever the workers and employers wish. If local mediation fails, the dispute will be referred to a formal arbitration tribunal; only if the tribunal’s ruling is disregarded, will the government intervene ‘administratively’.

This new development deepened the cleavage within the sindicatos, already apparent at their last national congress: more and more the advocates of the old corporate state ideology stand opposed to the lower echelons of the organisation, who are often obliged to take the workers’ side at the grass roots level in order to avoid losing all credit, and who are therefore increasingly adopting a militant point of view. Recent articles in Arriba, the Falange’s official organ, indicate that a reform of the syndical organisation, leading to a split along class lines, and to the establishment of an organisation bearing some resemblance to trade unions, is strongly advocated by an influential wing of the sindicato bureaucracy.

The Economist of 6th October 1962 accurately summarized the effect of the new labour legislation on the syndical organisation:

‘Some sindicato officials, close to the rank and file, would like to see their movement exploit this procedure and emerge as a genuine spokesman for the workers. Their seniors – who are appointed by the government – declare firmly that in doing so the syndical organisation would betray its mission, which is to reconcile capital and labour, and incidentally put them out of a job. The chief beneficiary of the decree is likely to be the HOAC, the leftward leaning Catholic workers’ brotherhood which Cardinal Pla y Deniel, disillusioned by the regime he once so ardently championed, would like to see evolve into a Catholic trade union movement.’

Other beneficiaries include, of course, the illegal trade unions (socialist, syndicalist and catholic), who are now in a position to do collective bargaining with the employers whenever their representatives are elected as workers’ spokesmen, without having to bother about having to pass through the official channels of the syndical organisation.

The increasing elimination of the Falange from all spheres of real power has driven parts of the organisation to adopt a militant ‘left wing’ position. Last January, Arriba urged the young generation to watch that all economic measures taken in Spain ‘bear a clear and decisive socially revolutionary character’. Spain’s youth, the article said, is approaching politics in a ‘revolutionary mood’, to achieve the sort of Spain ‘for which our best ones on both sides have died’. The New York Times report which carried the story comments as follows:

‘The latest evolution within the Falange is interpreted by some Spanish observers as a bold move to outflank the technocrats by currying favour with socialist and other left whig sentiment in the country. Privately Falangists will readily confirm that active forces within their movement are at present seeking a “Spanish form of socialism”. They emphatically reject a right-whig label for the Falange.’

In a recent issue of Es Asi, the periodical of the ‘Circle Jose Antonio’, a dissident group within the Falange and the sindicatos, Miguel Primo de Rivera, a member of the National Council of the Falange, called for a new constitution and for election, and blamed capitalism for the absence of free thought and free speech in Spain. Es Asi has also called for the re-establishment of diplomatic relations with Russia; Miguel Primo de Rivera is a former ambassador to London and the brother of Jose Antonio Primo de Rivera, founder of the Falange. The main characteristic of ‘liberalisation’, then, is the breaking up of the regime in its various components under the pressure of economic necessities: whilst the technocrats of the ‘Opus Dei‘ seek to integrate a conventionally capitalist Spain into the Common Market, the plebeian element in the Falange reacts by seeking to revive the socially revolutionary demagogy of fascism; and the Catholic Church, long a mainstay of the regime, gives increasing support to the tolerated Catholic Workers’ Brotherhoods and, more cautiously, to the illegal Catholic trade unions, such as the Basque Workers’ Solidarity, the Catalan Workers’ Solidarity and similar organisations in other parts of Spain. This development holds many new opportunities for Spanish labour. For the first time for a long tune, the regime is again vulnerable to pressure from the workers at a time of growing dissension in the ranks of its supporters. The Development Plan, and all the policies associated with it, are entirely dependent on the cooperation of the working class. Tourism, exports and foreign investments are all vulnerable to properly tuned strike action. It is unlikely that the Spanish workers are unaware of these possibilities, just as it is unlikely that the repression against the Asturian miners has sufficiently overshadowed the government’s concessions to the strikers: increases in minimum wages, revision in the labour legislation and weakening of the sindicatos as an instrument of government control. From the international point of view, however, there are serious dangers in the new situation. Paradoxically, these stem from the relaxation of totalitarian control and from the very disintegration of the fascist regime.

The old fascism, reflecting capitalist politics in a time of crisis, based on a militant mass-party – the Falange – and on a monolithic police state, is dead. It is being rapidly replaced by a conservative, authoritarian regime, cheaper and more efficient for capitalism in a time of stability, and tending towards the transformation of Spain into a ‘normal’ State with a view to its integration into a European federal structure.

It is not impossible that further reforms will occur in Spain, and that they will even include the toleration of some sort of trade union activity. Along with other measures, such as the restoration of some civil liberties in the context of a re-establishment of the monarchy, they will further change the social scene and move the battle lines further away from the accustomed pattern prevailing under fascism.

‘Normalcy’ is thus coming to Spain, and with this ‘normalcy’, international acceptance. Few of the millions of tourists flocking to Spain every year see obvious evidence of police terror and they return to their countries thinking that Spain is a country ‘like any other’. It is rare that Spanish credentials are challenged today at international conferences. We have seen that economically Spain is well advanced on the road to integration in the international capitalist circuit.

As long as the Spanish regime was fascist in the old style, it remained isolated and ineffective on the international level; but ‘respectable fascism’ has become an essential element in the new alliance of reactionary forces in Europe. Whilst France and, to a lesser extent, Germany, are moving towards authoritarian and conservative forms of government, Spain is moving in the same direction from an altogether different point of departure. As usual, this reactionary alliance has first become effective on the military level, with growing cooperation between the French and Spanish armies and the establishment of German armament industries in Spain, where they are not covered by the prohibitions attendant on the German peace treaty. Politically, this kind of cooperation became particularly disturbing when the French government agreed, some two years ago, to suppress the Spanish republican press in exile in return for the temporary detention of OAS leaders who had fled to Spain from Algeria and France. Another portent of things to come was the close cooperation of the German and Spanish police in the arrest of a journalist working for the Spiegel at the time when this journal was involved in a fight with the German Defence Minister, Franz Joseph Strauss.

Fascism is a dead slogan, as far as Spain is concerned; but authoritarian conservatism is a dangerous new threat throughout Western Europe. The fascist history of the Spanish regime is less relevant than its present alignment with the authoritarian trends in France and Germany. At this time, it is particularly important that the campaign for the overthrow of the Franco regime remain high on the list of priorities for international labour activities, and that the campaign be on no account relaxed under the pressure of increased acceptance of Spain by international capitalism. At the same time, it is essential that it be conducted as part of a campaign against the new authoritarian trends in Western European capitalism, rather than as a historic rearguard action to settle old accounts.

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