by Norman Lowe
In spite of these problems, there is no doubt that in the mid-1980s the Japanese economy was still a staggering success; the total Gross National Product (GNP) amounted to about one-tenth of world output. With its huge export trade and relatively modest domestic consumption, Japan enjoyed an enormous trade surplus, was the world’s leading net creditor nation and gave away more in development aid than any other country. Inflation was well under control at below 3 per cent and unemployment was relatively low at less than 3 per cent of the working population (1.6 million in 1984). The Japanese success story was symbolized by a remarkable engineering feat – a tunnel 54 kilometres long linking Honshu (the largest island) with Hokkaido to the north. Completed in 1985, it had taken 21 years to build and was the world’s longest tunnel. Another new development which continued into the 1990s was that Japanese manufacturers were beginning to set up car, electronics and textile factories in the USA, Britain and western Europe; Japanese economic success and power seemed without limit.
(c) Economic and political change: 1990–2004
During the early 1990s the strange paradox of the Japanese economy became more obvious: domestic consumption began to stagnate; statistics showed that the Japanese were now consuming less than the Americans, British and Germans, because of higher Japanese prices, wage increases which lagged behind inflation, and the exorbitant cost of property in Japan. It was the export trade which continued to earn the Japanese their massive surpluses. The 1980s had been a time of feverish speculation and government overspending in order, it was claimed, to improve the country’s infrastructure. However, this led to a severe recession in 1992–3 and left the public finances in an unhealthy state.
As economic growth slowed down and then stagnated, worker productivity declined and industry became less competitive. Although unemployment was low by Western standards, layoffs became more common and the traditional Japanese policies of jobs for life and company paternalism began to be abandoned. Industrialists began to produce more goods in other countries outside Japan in order to remain competitive. By the end of the century there were worrying signs: Japan had moved into a recession and there seemed little prospect of an end to it. The statistics were discouraging; the trade surplus was shrinking rapidly and exports were falling – the first six months of 2001 showed the largest export fall on record. By the end of the year industrial production had fallen to a 13-year low. Worse still, unemployment had risen to 5.4 per cent, an unheard of level since the 1930s.
As American historian and Japanese expert R. T. Murphy put it (in 2002):
The Japanese government has been presiding for a decade now over a stagnant economy, a ruined financial system and a demoralized citizenry. ... Japan finds itself unable to rethink the economic policies pursued since the immediate postwar years. Those policies – export like mad and hoard foreign exchange earnings – were so obvious they required no political discussion. But now that the policies must be reordered [given that there is reduced demand for Japanese exports] Japan is waking up to the melancholy reality that it is unable to change course.
He lays the blame for this on the bureaucracy and the debt-laden banking community, which, he says, are insulated from any kind of government interference and control, and have been guilty of ‘disastrous irresponsibility’.
There were important changes on the political scene. In the early 1990s, the LDP, which had held power since 1952, suffered a series of unpleasant shocks when some of its members were involved in corruption scandals. There were many resignations and in the election of July 1993, the LDP lost its majority to a coalition of opposition parties. There was a period of political instability, with no fewer than four different prime ministers in the year following the election. One of them was a socialist, the first left-wing prime minister since 1948. However, the LDP kept a foothold in government by forming a surprise coalition with the Social Democratic Party of Japan (formerly the Japan Socialist Party). At the end of 1994 the other opposition parties also formed a coalition, calling themselves the New Frontier Party. The LDP remained in government through to the elections of 2001, in which it scored yet another victory, this time in coalition with the New Conservative Party and a Buddhist party.
15.3 SPAIN
(a) Spain in the 1920s and 1930s
The constitutional monarchy under Alfonso XIII (king since 1885) was never very efficient and reached rock bottom in 1921 when a Spanish army, sent to put down a revolt led by Abd-el-Krim in Spanish Morocco, was massacred by the Moors. In 1923 General Primo de Rivera seized power in a bloodless coup, with Alfonso’s approval, and ruled for the next seven years. The king called him ‘my Mussolini’, but though Primo was a military dictator, he was not a fascist. He was responsible for a number of public works – railways, roads and irrigation schemes; industrial production developed at three times the rate before 1923; most impressive of all, he succeeded in ending the war in Morocco (1925).
When the world economic crisis reached Spain in 1930, unemployment rose, and Primo and his advisers bungled the finances, causing depreciation of the currency. The army withdrew its support, whereupon Primo resigned. In April 1931 municipal elections were held in which the Republicans won control of all the large cities. As huge crowds gathered on the streets of Madrid, Alfonso decided to abdicate to avoid bloodshed, and a republic was proclaimed. The monarchy had been overthrown without bloodshed, but unfortunately the slaughter had merely been postponed until 1936.
(b) Why did civil war break out in Spain in 1936?
1 The new republic faced some serious problems
Catalonia and the Basque provinces (see Map 15.1) wanted independence.
The Roman Catholic Church was bitterly hostile to the republic, which in return disliked the Church and was determined to reduce its power.
It was felt that the army had too much influence in politics and might attempt another coup.
There were additional problems caused by the depression: agricultural prices were falling, wine and olive exports declined, land went out of cultivation and peasant unemployment rose. In industry, iron production fell by a third and steel production by almost half. It was a time of falling wages, unemployment and declining standards of living. Unless it could make some headway with this final problem, the republic was likely to lose the support of the workers.
2 Right-wing opposition
The left’s solutions to these problems were not acceptable to the right, which became increasingly alarmed at the prospect of social revolution. The dominant grouping in the Cortes (parliament), the socialists and middle-class radicals, began energetically:
Catalonia was allowed some self-government.
An attack was made on the Church – Church and State were separated, priests would no longer be paid by the government, Jesuits were expelled, other orders could be dissolved and religious education in schools ceased.
Map 15.1 Regions and provinces of Spain
A large number of army officers were compulsorily retired.
A start was made on the nationalization of large estates.
Attempts were made to raise the wages of industrial workers.
Each of these measures infuriated one or other of the right-wing groups – Church, army, landowners and industrialists. In 1932 some army officers tried to overthrow the prime minister, Manuel Azaña, but the rising was easily suppressed, as the majority of the army remained loyal at this stage. A new right-wing party, the Ceda, was formed to defend the Church and the landlords.
3 Left-wing opposition
The republic was further weakened by opposition from two powerful left-wing groups, the anarchists and the syndicalists (a group of powerful trade unions), who favoured a general strike and the overthrow of the capitalist system. They despised the socialists for co-operating with the middle-class groups. They organized strikes, riots and assassinations. Matters came to a head in January 1933 when some government guards set fire to houses in the village of Casas Viejas near Cadiz, to smoke out some ana
rchists. In total 25 people were killed, which lost the government much working-class support, and caused even the socialists to withdraw support from Azaña, who resigned. In the following elections (November 1933) the right-wing parties won a majority, the largest group being the new Catholic Ceda under its leader Gil Robles.
4 The actions of the new right-wing government
The actions of the new right-wing government were designed to reverse the progressive elements of Azaña’s policies, and understandably aroused the left to fury. They
cancelled most of Azaña’s reforms;
interfered with the working of the new Catalan government; and
refused to allow the Basques self-government. This was a serious error, since the Basques had supported the right in the elections, but now switched to the left.
As the government moved further right, the left-wing groups (socialists, anarchists, syndicalists and now communists) drew closer together to form a Popular Front. Revolutionary violence grew: anarchists derailed the Barcelona–Seville express, killing 19 people; there was a general strike in 1934 and there were rebellions in Catalonia and Asturias. The miners of Asturias fought bravely but were crushed ruthlessly by troops under the command of General Franco. In the words of historian Hugh Thomas, ‘after the manner in which the revolution had been quelled, it would have required a superhuman effort to avoid the culminating disaster of civil war. But no such effort was forthcoming.’ Instead, as the financial, as well as the political situation deteriorated, the right fell apart, and in the elections of February 1936 the Popular Front emerged victorious.
5 The new government turned out to be ineffective
The left-wing socialists, led by Largo Caballero, decided not to support the government, since it was largely middle-class and ‘bourgeois’; the communists supported him, hoping that the government would fail so that they could seize power. In fact, Caballero had made no plans for a revolution of this sort, in spite of his revolutionary language. The government seemed incapable of keeping order, and crisis point came in July 1936 when Calvo Sotelo, the leading right-wing politician, was murdered by members of the Republican guard. This terrified the right and convinced them that revolution was imminent. They decided that the only way to restore order was by a military dictatorship. A group of army leaders, chiefly Generals Mola and Sanjurjos, conspiring with the right, especially with the new fascist Falange party of José Antonio de Rivera (Primo’s son), had already planned a military takeover. Using Calvo Sotelo’s murder as a pretext, they began a revolt in Morocco, where General Franco soon assumed the leadership. They claimed to be fighting to restore law and order and to defend the Church against the godless communists. The civil war had begun.
(c) The civil war, 1936–9
By the end of July 1936, the right, calling themselves Nationalists, controlled much of the north, where they set up their capital at Burgos, and the area around Cadiz and Seville in the south. However, the risings in Madrid and Barcelona, the two most important cities, had been suppressed. This meant that the plan to take over the whole country in one fell swoop had failed, leaving the Republicans in control of the centre and north-east, including Madrid and Barcelona. The military strengths of the two sides seemed to be fairly evenly balanced with about half the army, air force and navy remaining on the side of the Republic.
The struggle was a bitter one in which both sides committed terrible atrocities. The Church suffered horrifying losses at the hands of the Republicans, with over 6000 priests and nuns murdered. When the Nationalists captured Republican areas, they killed thousands of Republican leaders and supporters. According to Hugh Thomas, the Nationalists murdered 75 000 people, the Republicans 55 000. Together with those killed in battle, the total deaths in the war reached around half a million. The Nationalists were helped by Italy and Germany, who sent arms and men, together with food supplies and raw materials. Mussolini provided 70 000 troops and Hitler sent tanks and allowed his air force to practice bombing undefended civilian targets. The most notorious of these attacks took place in April 1937 when around a hundred bombers of the German Condor Legion destroyed the defenceless Basque market town of Guernica, killing 1600 people.
The Republicans received some help from Russia in the form of troops, tanks and planes, but France and Britain refused to intervene. In fact all the powers – Germany, Italy, Britain, France and the USSR – had given an undertaking to remain neutral, but only Britain and France kept the agreement. The Republicans were also helped by some 40 000 foreign volunteers from over fifty nations. These International Brigades were organized and deployed by the Russians, working from a base in Paris. The Nationalists slowly but surely wore down the Republicans, capturing Barcelona and the whole of Catalonia in January 1939. Only Madrid remained in Republican hands and the war ended in March 1939 when Madrid surrendered to Franco’s forces (Map 15.2).
Reasons for the Nationalist victory
Franco was extremely skilful in holding together the various right-wing groups (army, Church, monarchists and Falangists) so that they worked as a single military and political unit, with one central aim – to crush the godless republicans.
The Republicans were much less united, and anarchists and communists actually fought each other for a time in Barcelona. At first things seemed to go well. Largo Caballero was the head of the Popular Front government and the communists announced that they were postponing the revolution in order to work with socialists and republicans to defeat the hated fascists (they labelled all the Nationalist groups as fascists). Even the anarchists joined the government. But gradually the unity began to fall apart. The communists themselves were divided: some were Stalinists and some were Trotskyites (known by their initials as POUM). Disagreements developed in Barcelona, and the Stalinists came to blows with the other two groups. Caballero was replaced by the socialist Juan Negrín.
Map 15.2 The Spanish Civil War, 1936–9
The extent of foreign help for the Nationalists was probably decisive, especially in the early part of the war. For example, Mussolini provided the transport aircraft to bring Franco’s army across to Spain from Morocco, after Franco had decided it was too risky to bring them by sea.
(d) Franco in power
In the immediate aftermath of the war, thousands of republicans fled the country, many of them crossing the frontier into France. But thousands more were captured by Nationalist forces and imprisoned. It is estimated that between 1939 and 1943 about 150 000 of them were executed. Meanwhile General Franco, taking the title Caudillo (leader), set up a government which was similar in many ways to those of Mussolini and Hitler. It was marked by repression, military courts and mass executions. But in other ways it was not fascist: for example, the regime supported the Church, which was given back its control over education and other areas. That would never have happened in a true fascist state. Franco amalgamated all the right-wing parties under the Falange label, and all other parties and trade unions were banned. Franco himself ruled as a dictator. There was a strict censorship of all media and anyone who criticized the regime was likely to be arrested and sent to a concentration camp. Persistent critics faced the death penalty.
Franco was also shrewd enough to keep Spain out of the Second World War, though Hitler expected Spanish help and tried to persuade Franco to get involved. When Hitler and Mussolini were defeated, Franco survived and ruled Spain until his death in 1975. As Spain moved into the 1950s the regime became less violent, but it continued to be repressive. Franco tried to enforce a rigid nationalism based on traditional Spanish culture. For example, bullfighting and flamenco were encouraged, but the Sardana, the national dance of Catalonia, was banned because it was ‘not Spanish’. The use of the Galician, Catalan and Basque languages in official documents was forbidden. The Roman Catholic Church became the established state Church once again and regained many of the privileges that it had lost under the Republic. For example, all civil servants had to be Catholic, and non-church weddings, divorce, con
traceptives and abortion were forbidden. Homosexuality and prostitution were criminal offences. All the Republic’s legislation designed to improve the position of women in society was cancelled. Now women could not become judges or university professors and could not testify in trials. The civil war had left the economy in ruins and Franco did not help matters by insisting on isolating Spain economically, as far as possible, from the rest of the world. However, the USA and the IMF persuaded him to change to a more free-market economy. In the mid-1950s the economy slowly began to revive.
During the 1960s Franco gradually relaxed the repressiveness of his regime: military courts were abolished, workers were allowed a limited right to strike and elections were introduced for some members of parliament (though political parties were still banned). Much was done to modernize Spanish agriculture and industry and the economy was helped by Spain’s growing tourist industry. By the time Franco died at the age of 82 in 1975, most people had begun to enjoy a higher standard of living than ever before. Eventually Franco came to be regarded as standing above politics. He was preparing Alfonso XIII’s grandson, Juan Carlos, to succeed him, believing that a conservative monarchy was the best way of keeping Spain stable. When Franco died, Juan Carlos became king, and soon showed that he was in favour of a return to all-party democracy. The first free elections were held in 1977. Later, under the leadership of socialist Prime Minister Felipe González, Spain joined the European Community (January 1986). The economy seemed to be flourishing at first; tourism was a huge revenue earner, and during the early years of the twenty-first century there was a massive boom in house and property building. But following the great financial meltdown of 2008 (see Section 27.7) the euro-zone found itself in serious crisis; Spain’s housing and property market collapsed, and Spain, along with Portugal, the Irish Republic and worst of all Greece, was left heavily in debt and needing help from the European Central Bank.