The Long-Term Vulnerabilities of Spanish Capitalism in Light of the COVID-19 Pandemic: A Political Economy Approach

Abstract

This article explores the evolution of Spain’s capitalism during the last decades in order to unveil the factors underlying the harshness with which the COVID-19 pandemic has impacted Spain. We present a twofold thesis. On the one hand, we argue that Spanish capitalism has harbored certain internal vulnerabilities, relative to its productive specialization, its labor market, its welfare institutions, and indebtedness levels, which successive boom and busts have reproduced and ultimately exacerbated. On the other hand, we contend that these various vulnerabilities have abruptly come to the fore with the irruption of the COVID-19 pandemic, thus accounting for its singularly dramatic consequences. In order to substantiate our hypotheses, we provide a political economy analysis of the recent trajectory of Spanish capitalism. The economic boom initiated in the 1990s developed various vulnerabilities, which the years following the onset of the Great Recession did not attenuate and to which various others were added during the last expansion phase, all coming to the fore with the sudden outbreak of the COVID-19 pandemic.

Keywords:

• COVID-19
• great recession
• growth model
• lost decade
• Spain

JEL Classifications:

• P16
• O4
• O52

Acknowledgements

We would like to thank the editor and two anonymous reviewers for their helpful comments. We want also to credit the language revision assistance from Joseph Candora. The usual disclaimer applies.

Additional information

Notes on contributors

Pedro M. Rey-Araújo

Pedro M. Rey-Araújo is a post-doctoral researcher at the University of Santiago de Compostela, Spain. His main research interests include the various strands of critical political economy, discourse theory, and the critical sociology of time. His ongoing research has appeared in journals such as Science & Society, Rethinking Marxism and the Review of Radical Political Economics, and he is also the author of Capitalism, Institutions and Social Orders: The Case of Contemporary Spain (Routledge, 2021).

Luis Buendia

Luis Buendía is Associate Professor of Applied Economics at the University of León, Spain. Previously he taught and performed research at the Isabel I University, University of A Coruña, Syracuse University in Madrid, University of Santiago de Compostela and the Complutense University of Madrid. He has been also a visiting researcher at the Institutet för framtidsstudier and Stockholm University (both in Sweden). He has co-edited the book, The Political Economy of Contemporary Spain: From Miracle to Mirage (Routledge, 2018) and has published articles in the Socio-Economic Review, the Cambridge Journal of Economics, Social Indicators Research or the Journal of Australian Political Economy, among others. He has a PhD in Economics.