On Catalonia

The general view on Twitter and in the media seems to be that ‘Spain is grossly overreacting to the illegal Catalan referendum.’

Fair point. It is not a pretty picture. However, if we ask why Spain is overreacting, a different picture emerges:


Although a parliamentary monarchy, Spain is a decentralized nation composed of autonomous regions and cities. While these date to the founding of their modern democratic system in 1979, the autonomous regions are divided broadly along linguistic and cultural lines that are over five hundred years old. Cantabria, for instance, is a name that dates to pre-Roman occupation.

Catalonia is one such autonomous region. Another is the Basque country. Both Catalonia and Pais Vasco staunchly identify with their own cultures rather than the Spanish nation and have been hotbeds of nationalist terrorism in the past. Given that the whole country is composed of these autonomous regions, the Catalan election is not just about Catalonia, but also about whether there will be a ripple effect on the other autonomous states, some of which are not really enjoying being part of Spain.


There is additionally an economic element. Catalonia is one of the richest regions in Spain thanks primarily to Barcelona and its proximity with the French border and the Mediterranean (incl. Balearic islands). Spain’s economy is not doing very well. Catalonia (and the Basque region) is thus in one way or another subsidising the rest of the country, which is quite poor and has poor prospects.

Spain without Catalonia may even have to withdraw from the EU and establish its own currency to stay competitive and attract investment, but that’s well outside my ability to determine and lies several years in the future.

Nation-state vs Market-state

Years ago I read a book called The Shield of Achilles which in my mind is a seminal book of the 21st century. It describes a shift in the source of national power, integrity, and coherence, from military force (as the nation-state) in the 20th century, to economic force (as the market-state) in the 21st century.

Look at Spain. Ask yourself, can this country use free market remedies to guarantee its integrity and maintain its prestige? No. Spain is not having much success at lifting employment, increasing standards of living, etc. The economy is so poor that there are likely no free market remedies at all (deregulation, maybe), other than giving Catalonia increased independence and a larger share of the economic pie. Obviously this would be largely detrimental to the rest of Spain, and Catalonia already has a significant degree of self-government via its autonomous region status.

Next ask yourself, how else can Spain maintain its territorial and economic integrity? It has no other solutions besides nationalist remedies, i.e., force. Civic and legislative remedies have been taken probably as far as they can (e.g. autonomous region status), and there are no market remedies as mentioned above. Shared idealism will not work because of divergent ideals + cultural identities, and because the fires of Catalan nationalism are burning particularly bright at the moment.

The only other obvious recourse to keep Catalonia as part of Spain is to ban the elections, and enforce it. Fines will not do the trick because if the election is found to have a positive result, the EU and the UN will act to apply political pressure to ensure Spain respects the vote anyway. (Remember, the vote is illegal). Equally, you cannot imprison the two million Catalan who voted. The only solution I think Spain had was to enforce a ban on the elections – and it is hardly an ideal solution, obviously.

I don’t endorse what has happened this week, nor am I well informed enough to have a definitive grasp of the situation or suggest remedies.

However, I think if you take this point of view, it is not hard to understand why Spain has reacted aggressively to the Catalan referendum.

What if this turns into this? Click to enlarge. (source: Google).

Could there be a world with no Spain? Hard to imagine.

I have made a mental note to have a look at some Spanish stocks. Drop me a line if you’ve been there already.

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