Back in January, I speculated that the advent of cheap solar power would redraw the economic map of Europe – to the benefit of one country in particular:
“…Spain, with its vast, sunbaked and largely uninhabited interior (and geographical proximity to Western European markets) would be well-placed to benefit from a solar-driven manufacturing revolution.”
I’m not the only one who sees a bright future for the nation. Bryan Caplan, who is Professor of Economics at George Mason University, has just returned from a five week stay in the country:
“The quickest way to explain Spain to an American: Spain is the California of Europe. I grew up in Los Angeles, and often found myself looking around and thinking, “This could easily be California.” The parallel is most obvious for geography – the deserts, the mountains, the coasts…”
It’s an intriguing comparison. In both land area and population, Spain is about a fifth bigger than California. The Golden State is much richer though. If it were an independent country, California would easily be one of the top ten global economies. Indeed, the latest estimates would put it in the top five. Spain, meanwhile, comes in 13th or 14th – with a GDP per head of $31,000 as opposed to California’s whopping $76,000. I dare say the likes of Mark Zuckerberg skew the Californian average somewhat, but that’s still quite a gap.
What could Spain do to start catching up? Caplan has nothing to say about energy resources, but he does think that Spain holds another trump card:
“Spain has more to gain from immigration than virtually any other country on Earth. There are almost 500 million native Spanish speakers on Earth – and only 47 million people in Spain… due to the low linguistic and cultural barriers, the migrants are ready to hit the ground running. You can already see migration-fueled growth all over Spain, but that’s only a small fraction of Spain’s potential.”
There’s certainly plenty of room for an expanded population – “you can see vast unused lands even ten miles from Madrid.” In fact, if you divide up the country into square kilometers, 87% of Spain is unpopulated.
Caplan argues that Spain could unlock massive potential for growth by liberalising its immigration controls (though, of course, its borders are already open to migrants from other EU countries) – as well as by loosening up its labour market and its planning system:
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