San José State University
Department of Economics
Thayer Watkins
Silicon Valley
& Tornado Alley

Political and Economic
History of Guatemala

Guatemala is a political entity unfortunately composed of two disparate cultural entities. One is the ancient heritage of the Mayan culture still tribal in many aspects. The other is the politically and technologically dominant Hispanic culture. The competition between the two cultures has often been manifested in terms of political ideololgies. The Mayan culture being tribal in many ways finds the explicit collectivism of communism more attractive than the disguised collectivism of Hispanic corporatism.


The territory of the Mayan culture extended in space from Guatemala to the Yucatan Peninsula. In time it extended from its beginnings in farming communities about 2500 BCE to a peak and decline about 900 A.D. and suppression from about 1500 A.D. The core area was in the highlands of what is now northern Guatemala.

In its prime the Mayan civilization was able to construct and maintain an elaborate system of drainage canals that enabled the Mayans to produce enough produce not only to sustain themselves but to allow some members of their society to specialize in arts and science. But that same productivity also allowed some to specialize in politics and warfare. The Mayan civilization was destroyed by continuing warfare among its city-states.

When the Spanish conquest came in 1523 the Mayans had only a remnant of the civilization that flourished before the tenth century. That remnant did include manuscripts written in pictographs. Tragically most of these manuscripts were destroyed by Spanish clerics as being the works of the Devil. Some did survive and eventually were deciphered.

The Spanish created a bipartite society in Guatemala of European and Mestizos in the cities and Mayans in the rural backcountry. These two parts largely went their separate ways. They interacted when the Spanish developed some plantations for growing cacao and indigo and needed labor. Some Mayans did assimulate into Hispanic culture and were known as ladinos.

The capital built by the Spanish, Antigua Guatemala, was destroyed by an earthquake in 1773 and a new capital was built at Guatemala City.

European Guatemala participated in the struggle for independence from Spain in 1821. There was an attempt by the leaders of the rebellion in Mexico City to retain Guatemala and the rest of Central America in a Mexican Empire. The Spanish colonies of Central America separated from Mexico in 1823 as the United Provinces of Central America. Mariano Gálvez became the local leader in Guatemala as a province of the United Provinces. He curbed the power of the Catholic Church and promoted trade and commerce. Under his direction Guatemala shifted its trade from Spain to Britain.

The United Provinces proved to be an unsustainable political entity and it dissolved in 1839. Rafael Carrera, a ladino (Hispanized Mayan) gained control of Guatemala at that time and held it until his death in 1865. Under Carrera much of the reforms of Gálvez were reversed.

At this time the market for indigo, a major export crop of Guatemala, was disappearing as synthetic dyes were developed in Europe. The alternative crop was coffee but the change to coffee production required institutional changes that the Old Guard of Guatemala were unwilling to accept. Justino Rufino Barrios led a revolution in 1871 against this Old Guard. Barrios instituted significant political change, notably the secular limitation on the power of the Catholic Church and the government siezing control of communal lands. Barrios also instituted a vagrancy law that required that anyone without a job would have work on a plantation. These vagrancy laws in their various forms continued to be an element of Guatemalan life until after World War II.

The governments of Guatemala in the late nineteenth and early twentieth century settled into an authoritarian pattern. The Mayan underclass had little influence on the politics of Guatemala.

From the days of Barrios German business interests in coffee growing in Guatemala became important. The United Fruit Company became an important economic factor in Guatemala in the 1920s.

General Jorge Ubico was elected president in 1930 and he ruled through the 1930's and early 1940's. In 1944 there was a general strike that brought a revolutionary junta to power that relied upon organized labor unions. In the presidential election that followed the overthrow of Ubico, a university professor, Juan José Arévalo, won. Arévalo abolished the vagrancy laws and instituted a social welfare program that included minimum wages, restrictions on work hours, restrictions on child labor and the organization of peasant unions.

In 1950 Colonel Jacabo Arbenz Guzmán was elected president. He continued and increased the social policies of Arévalo. In addition he started confiscating unused land and redistributing it to the Mayans. This redistribution policy for unused land came into conflict with the United Fruit Company's program of allowing land to lie fallow for a number of years to recover its fertility after cultivation. The United Fruit Company used its political influence to get the U.S. government to support a coup d'etat against the Arbenz government. A relative small force of two hundred troops and six planes in 1954 carried out the coup and made Colonel Carlos Castillo Armas president.

Castillo Armas reversed the social welfare programs and returned the confiscated land to its owners. He was assassinated in 1957.

In the 1960's guerilla organizations became an element of life in Guatemala. In 1982 General Effraín Ríos Montt became president and instituted a policy of conscription of young men of the Mayan villages to fight the guerilla organizations.

In 1986 Marcos Vinicio Cerezo Arévalo was elected president. He tried, unsuccessfully, to negotiate a settlement with the guerilla organizations. He was replaced as president in the 1991 election by Jorge Serrano of the Movement for Solidarity Action Party.

(To be continued.)

HOME PAGE OF applet-magic
HOME PAGE OF Thayer Watkins