Description

Steve Snow, "Voices of Hostile Capital: 'Order' and Investment during the Second Spanish Republic"

South European Society and Politics, Vol. 4 No. 1 Summer 1999.


The Spanish Second Republic (1931-1936) was a tumultuous period of democracy, reform and reaction. During the reformist biennium (1931-33), moderate leftist Governments instituted policies to ameliorate the often-desperate circumstances workers
and peasants faced. Greatly complicating these efforts, however, investors and landowners liquidated productive assets and all but ceased domestic investment. Bank accounts were emptied, billions of pesetas drained from the country, the stock market dropped
precipitously, and many landowners sold their holdings at bargain rates. The effects were calamitous: capital flight and the sharp decline in investment were major causes of the Spanish economic crisis of the 1930s (Comín and Martín 1984: 254; Palafox 1991: 205).
Why the panic? The most obvious, yet ultimately unconvincing, explanation is that owners of capital predictably reacted against radical policies. A close examination of the Spanish financial press and employers' publications reveals that labor militance––most
often referred to as 'disorder,' 'anarchy' and 'indiscipline'––was a major cause of investor unease and hostility. The modal complaint was that the Government was allowing the workers to run wild, not that social reforms wrecked profits. To win back business
confidence, investors and employers demanded a restoration of 'order', by which they meant the suppression of labour. Politicians obliged with a vengeance beginning in late 1934, contributing to the radicalization of the workers and their political allies, and in turn pushing Spain towards civil war. Explaining investors' attitudes, therefore, is crucial to
understanding the fate of the entire Second Republic.