Is Spain Socialist or Capitalist? (With Examples)

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Spain is more capitalist than socialist. Only certain areas of the economy are publicly owned.

This suggests that while socialism has some effect in Spain, it is not as significant as capitalism. Spain is a country where the political system is defined by capitalist social democracy

Spain is a country heavily influenced by capitalist ideology and is ranked as the 24th most free economy in the world by the Economic Freedom World Index. It’s less capitalist than other European nations like Switzerland but more so than France and Russia.

Capitalism vs. Socialism

Both the labels “capitalism” and “socialism” are used to describe types of political ideologies.

Free markets are necessary for the capitalist economic system to function successfully. How goods and services are produced is determined by supply and demand on the general market. A market economy is a name given to this type of economic structure.

In a socialist economic system, the government either entirely or partially regulates the production of commodities and services. Planned economies or command economies are terms used to describe the type of economic system that comes from this centralized planning. There are pros and cons to socialism, explored here.

Is Spain Socialist? (Socialism in Spain)

Although areas of the Spanish economic and political system are largely governed by capitalism, socialism still holds some influence in Spain. Some of the examples of socialist policies are as follows:

1. Universal Healthcare

No matter their financial condition or membership in the social security system, all Spanish citizens have access to the Spanish National Healthcare System (“Instituto Nacional de la Salud”), which was established under Spain’s General Healthcare Act of 1986.

Spain has an excellent healthcare system that ensures everyone gets access to it. In Spain, there are two types of healthcare: private and public. Some hospitals and health centers provide both private (privado) and public (asistencia sanitaria pblica) healthcare services.

Spain’s public healthcare system is utilized by about 90% of the population. Service delivery is, however, arranged at the regional level, which is relatively decentralized. The Spanish Ministry of Health, which creates policy and manages the national health budget, is in charge of the system.

2. Universal Education

The Organic Law for the Improvement of Educational Quality is the law that governs education in Spain and amends Article 27 of the 1978 Spanish Constitution.

All Spanish children between the ages of 6 and 16 are required to attend school, which is free of charge and is financed by both the national government and the governments of each of the country’s 17 autonomous communities.

Spanish education is often of excellent quality. In fact, the nation outperforms the OECD average in all three subject areas, scoring 491 in reading, math, and sciences.

Additionally, between the ages of 5 and 39, Spanish citizens can anticipate completing about 18 years of education, which is longer than the OECD average of 17.2 years.

The Spanish government’s funding of compulsory education makes it one of the most socialist policies in Spain.

3. Police

The objective of the Spanish National Police, an armed civil agency with a hierarchical structure, is to preserve the unrestricted enjoyment of citizens’ rights and liberties while ensuring their safety.

The entirety of the national territory is within its sphere of influence.

Police services are compensated for using tax money. This implies that everyone will always be able to report crimes, ask for protection, and have recourse to police protection in Spain.

This is a prime example of Spanish socialism because there is no market competition among police forces. The sector is under the control of a single police department. In light of this, the Police are not required to turn a profit or to compete with other services by providing services that are more affordable or efficient.

3. Nationalized Railways

The Spanish national railways are known as Renfe. It was established in 2005 after the original Renfe national business was divided into Renfe-Operadora and ADIF, which received the infrastructure (which inherited the rolling stock).

All important lines in Spain are serviced by Renfe, including the fast trains that connect Barcelona, Zaragoza, Madrid, Cordoba, and Seville.

The whole rail network of Renfe is 16,026 kilometers in length. There are 10,182 kilometers which are electrified.

One of Spain’s most socialist programs may be seen in how much of the railway system is run by the national government.

This differs from most European nations that have privatized their railways.

Is Spain Capitalist? (Capitalism in Spain)

Switzerland has a lot of capitalist policies. Here are a few examples of capitalism in Spain.

1. Anyone Can Start A Business

Everyone is welcome to launch a business in Spain, regardless of whether they are a foreigner or a citizen.

Inditex ($22.483 million in yearly revenue) and Iberdrola ($43.104 million in annual revenue) are some of the biggest companies in Spain. Iberdrola is one of the largest electricity businesses in the world today based on stock market capitalization, the top generator of wind energy, and a global leader in the energy sector.

Spain was placed 31st by the World Bank for business ease, in large part due to its pro-business laws and regulations. In Switzerland, for instance, there are no limits on citizenship requirements for business creation.

2. Anyone Can Buy and Sell Homes

There are no citizenship or residency requirements for buying or selling homes. Legally speaking, only NIE (Number de Identificación del Extranjero) is required to purchase a home in Spain as a foreigner.

It is necessary to use this number, which is specific to each person, to complete any transaction in Spain. Obtaining an NIE number is simple and can even be made by a real estate agent.

The Spanish real estate market serves as an example of capitalism because private individuals, not the government, are the owners of real estate assets. Additionally, market forces dictate how much houses cost across the country.

3.  Banking

Spain’s central bank, the Banco de Espana, is in charge of regulating the country’s banking industry.

Since 2007, it has aided in the development of a number of policies aimed at boosting the sector’s resilience to the global financial crisis.

Eleven banking groups representing more than 90% of the Spanish banking industry were directly overseen by the Single Supervisory Mechanism in Spain. Banco de Espana oversaw 51 commercial banks, two saving banks, and 60 cooperative banks. Spanish banks are more accommodating to non-residents than banks in the majority of EU nations, where they cannot create a bank account.

One of the most obvious examples of Spain’s capitalism policies may be seen in the fact that the country’s state-owned banking services must compete with private companies in the market.

4. Privatization of Iberia

The privatization strategy used by Iberia is two-phased. In the initial phase of the company’s 1999 restructuring, 40% of the business was sold to reputable business and financial investors.

Financial investors included major Spanish banks (such Banco Bilbao Vizcaya Argentaria and Caja Madrid) as well as well-established business firms. Industrial partners included airlines like American Airlines and British Airways.

The remaining portion of Iberia was floated in 2001 as part of the second phase of privatization. The goal was to increase treasury revenue and give “ordinary citizens” ownership.

Following its privatization, Iberia is now subject to market pressures and must maintain a low operating cost in order to compete with other airlines that fly into and out of Spain.

Major European and foreign airlines, including Vueling, Air France, TAP Air Portugal, Ryanair, EasyJet are among Iberia’s main rivals.

Socialist Political Parties in Spain

Capitalist Political Parties in Spain

  • The Partido Popular is a liberal-conservative Spanish party supporting free markets and enterprise and tax reform.


Both market- and non-market-related elements are having an impact on several aspects of the Spanish economy. Despite the fact that a large component of the economy is privately owned, many essential services like education and healthcare are owned by the government (and so exhibit the characteristics of socialist systems).

The few laws that govern both native and foreign business owners show that the Spanish government supports the private sector. Additionally, by generating jobs for local areas, it promotes economic progress. It is still believed that capitalism would make inequality worse in contemporary Spanish society.

Spain is a capitalist society overall, although the nation has democratically chosen to maintain public control of numerous economic sectors.

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Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]

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