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date: 28 November 2020

Taxation, Money, Credit, and the Consolidation of Oligarchic Rule in El Salvador, 1848–1931locked

  • Antonio AcostaAntonio AcostaDepartamento de Historia de América, Universidad de Sevilla


The formation of El Salvador’s oligarchy was a long and complex process. Its beginning can be traced to 1848, when the first export of Salvadoran coffee took place. The first stage in its formation may be seen as ending in 1931, just before the army’s great “slaughter” of the rural population after the crisis of 1929. This long period is divided into two parts, with the year 1890 marking a change. Before that date, although El Salvador was beginning to feel the effects of the Industrial Revolution and the reorganization of the world markets, the country’s international politics were focused primarily on Central America. However, from 1890 on, the business sector expanded and penetrated deeply into the country based on the capital accumulated from the coffee industry. To that was added certain foreign participation, especially from the United States. This is why the period of 1848–1890 is considered the origin of the oligarchy, and 1890–1931 is seen as the formation of this social sector that has marked the history of the country up to the 21st century.

A plausible definition of the term oligarchy is provided by Waldo Ansaldi: the combination of a social class defined by its function in the economic structure and the particular form of government it developed and practiced. The Salvadoran oligarchy was initially made up of the large landowners and traders whose economic power was based on their access to land and labor, acquired to a large degree at a very low price and often through non-commercial relationships. This minority experienced a transition toward a profile with increasingly capitalistic characteristics—that is, a more complex managing class with more and more wage labor, although in poor working conditions. In spite of this, it retained purely oligarchic features in the way it controlled political power and in its use of abundant, though not always wage-earning, labor, so that it can hardly be considered bourgeoisie. Coffee, including its cultivation, processing and export, was the principal (although not the only) basis of the enrichment of the oligarchy and of their political power. The development and consolidation of the oligarchical class was based on their control of the state and, as a result, also of their monetary, credit, and above all, fiscal policies. Representatives of the oligarchy came to control the government through electoral as well as military means, enabling them to reproduce and expand their power.

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