Bilbao's Modern Business Elite

Bilbao's Modern Business Elite. By Eduardo Jorge Glas Reno: University of Nevada Press, 1997. Tables, maps, appendices, notes, bibliography, and index. $44.95. ISBN 0874172691. Reviewed by David Ringrose

The Industrial Revolution of nineteenth-century Europe emerged in a surprising variety of places in addition to England and the Rhine basin, and the Basque Provinces of northern Spain are one of the more interesting areas that developed a modern and sophisticated iron and steel industry. This development emerged only in the 1880s as technological developments in steel-making gave Basque iron ore a significant edge in European markets. As Basque iron mines were opened up to supply the British steel industry, Basque entrepreneurs seized on the possibility of importing English coal cheaply in the ore carriers that took Basque iron ore to England. Once the opportunity existed, Bilbao's business elite responded with alacrity, investing profits from the iron mines in steel making and other manufactures. In the process, this development drew to it capital from other parts of the Spanish and Basque business communities.

Eduardo Glas has provided us with an excellent study of this facet of European industrialization. While the outlines of the story as economic history are available in excellent Spanish works, very little of it is available to historians who do not read Spanish. Current perceptions of the development of the Basque Provinces (along with most of Spain) are rather different from the stereotypes we have inherited from Earl Hamilton, Julius Klein, Gerald Brennan, and Ernest Hemingway. This book opens the door to a better understanding of Spain as a participant in the modernization of Europe. Moreover, it is as much social history as economic history; and focuses on the development of a business elite in Bilbao.

Glas begins with a summary of the economic and social history of the Basque Provinces, highlighting their involvement in Castilian import/ export trade and in the export of high quality Basque iron. He also outlines the complicated history of the unique fiscal and political autonomy of the region. Finally, Glas reviews the economic problems of the region in the earlier nineteenth century, as Civil War and Revolution disrupted the regional economy and eroded regional economic privileges. This is followed by chapters on the development of iron mining and general regional economic development. These chapters document how the mining industry became concentrated in the hands of a few families. The dramatic nature of this development is illustrated by the fact that the region produced 24,000 tons of iron ore yearly in the 1840s, 2,684,000 tons in 1880, and 6,496,000 tons in 1899. Glas also shows how investments spread from mining to railroads, shipping, ship building, metal working, and banking. He demonstrates convincingly that, while substantial amounts of profit from mining went into other developments, they were supplemented by equally important capital inputs from elsewhere in society.

From the perspective of social history, chapter four is the centerpiece, since it outlines the formation of Bilbao's business elite. Glas uses voter records, notarial archives, marriage data, wills and testaments, and a variety of other sources to identify the prominent families at mid-century. The older business families got a significant piece of the action in the mining boom, although newer entrepreneurs got control of the best mines. The mining elite then appears as prominent in steel-making and manufacturing, but was joined by a significant number of investors from elsewhere in Spain, as well as by Basques who had made fortunes outside the Basque Provinces and then returned. This contradicts other findings that maintain that the Basque mining elite was virtually the sole source of other investment in the region.

In an interesting but somewhat problematic chapter, Glass looks at the relationship between business, culture, and society. He traces a variety of factors, including religion, land holding, inheritance, family networks, and marriage to give us an understanding of the texture of the elite in question. It was prone to various kinds of endogamy, but was not closed to the admission of successful new members. Perhaps the most debatable part of the discussion has to do with religion. After discussing the Weberian Protestant ethic, he suggests that a conservative Catholic work ethic inspired by the Jesuits played the same role in Bilbao as did the Protestant ethic elsewhere. As ever in such situations, it is not clear whether religion shaped the culture, or if a culture with certain predilections adopted a religious approach that fit their way of life. Glas is on stronger ground when he explores the nature of inheritance and family networking. His important point is that this was not only a community with a strong entrepreneurial ethic, but that the families involved remained strongly entrepreneurial over several generations. Glas specifically rejects the Buddenbrooks model of family evolution in favor of one in which families successfully acculturated their offspring to the business ethic for very long periods of time.

Glas also examines the role of the business elite in politics. This is a complex topic given the vagaries of national, provincial, and municipal politics. It appears that, while both mining and landowning elements were well represented in office-holding, neither was overtly dominant and both accepted the presence of other social and economic elements in representative institutions. Moreover, the Basque regional government preserved a great deal of judicial and fiscal autonomy despite recurrent reforms in the nineteenth century. This left local authorities with access to local tax revenues, which they invested in infrastructure facilities such as roads, schools, railroads and ports. Thus, it would appear that the goals of the mining and steel elite were not dramatically different from those of the middling business and landowning world of the Basque Provinces.

As a result of his analysis, Glas is able to challenge several older hypotheses about Spain and the Basques. The various levels of economic and social life were fairly well integrated in terms of political agendas. The Bilbao business elite, contrary to some views, had long possessed and continued to maintain a dvnamic entrepreneurial attitude. The assumption that the business bourgeoisie passively accepted the social hegemony of a landed elite is simply wrong. Moreover, the claim that regional government became the exclusive preserve of the established business elite in Bilbao cannot be sustained.

This book is a useful window onto an important but relatively neglected corner of Spanish history and European economic history. At the end of his discussion, Glas comments on the interaction between regional economic interests and the successful pursuit of protective tariffs. By the 1920s this tactic was successful, and coal and steel were heavily protected. In the long run this left Spain saddled with an inefficient and uncompetitive steel industry. In the short and medium term, however, the business community was acting like proper profit-seeking individuals of the sort required for a successful market economy. The reader would also be advised to look at Pedro Fraile's Industrializacion y grupo.s depresion: La economia politica de la proteccion en Espana (1991). Although published well before Glas' book was written, Fraile's work provides a valuable continuation and sequel to that of Glas.

Glas has given us a book that fills an important gap in business and economic history. It is a study that challenges existing interpretations of Basque and Spanish economic development, including the idea that Basques lost their entrepreneurial urge and for that reason settled for protection within a backward economy. While protection had negative longterm consequences for Spain's status as an economic power, it responded accurately to a cost/benefit analysis of a post World War I world glutted with industrial capacity and raw materials.

[Author Affiliation]

David R. Ringrose is professor at University of California, San Diego. He is a specialist on early modern Europe, with an emphasis on the economic history of Europe and the history of Spain. He is the author of several books, most recently, Spain, Europe, and the "Spanish Miracle," 17001900 (1996).