You can still found this kind of pics because in the country village the peoples still living like the persons pic. i think this is from extremadura or andalucia.
you are absolutely right. having lived in madrid for some time i could notice how fast the development was in many senses. on the other hand you still find this kind of images, witnesses of a former time....
the pic is cool you know... but i tell you that Spain is not like that, it was, but now Spain is the eight world contry in economy and part of the European union