Figures’ first presidency marked the beginning of a thirty year period in which Liberación ‘pro-capitalist developmentalism and welfare-state reformism’ 26 prevailed, defining the economic and political agenda.
The party had a distinct advantage in that the opposition – comprised of another unlikely alliance of the traditional cafetalero elite and their former enemy, the Calderonístas – were largely fragile and incoherent until1983 when they finally coalesced to form the Partido Unidad Social Cristiana, PUSC, and an alternating two party system developed.
1950 to 1970 was a period of unprecedented political stability, economic growth and social progress for Costa Rica. Government control of credit, financing and investment, through the newly nationalized banking system enabled the PLN to achieve a radical overhaul of the country’s economy, industrial productivity models and social structures, that would permanently eradicate oligarchic control and create new opportunities for social mobility and wealth accumulation.
Liberación policies greatly strengthened the agro-industrial sector; between 1944 and 1952 banana exports grew from 3.5 million to 18 million crates annually and between 1940 and 1956 coffee prices rose from $9 to $68 per quintal and by 1970 the annual coffee yield had tripled. This huge expansion in productivity and exports generated extraordinary profits which were then used to finance technological development, agricultural and industrial diversification and social improvements.
The results of this income re-distribution meant that despite a demographic explosion in which the population increased from 800,000 in 1953 to over 2 million in 1973, per capita spending power matched this, more than doubling over the same period.
Social improvements involved a huge expansion of the welfare state and public sector, benefiting lower and middle classes. Meanwhile agro/industrial progress and diversification transformed the traditional export sectors and created new industries – sugar, cotton, pineapple and meat production initially, then textile assembling maquilladora industries, chemical-processing and metal-refining; and allowed for the development of a newly powerful entrepreneurial class within these sectors.
Economist, Juan Manuel Villasuso, depicts the development of the Liberación State in three distinct stages. The first twelve years are described as the ‘developmental stage’, in which increased revenues from the export industry boom were invested into the construction of a new ‘physical and social infrastructure’ to facilitate industrialization.27 Roads, airports and seaports were built, electrical power, water and telecommunication systems were established, and schools, hospitals and clinics were opened all over the country.
The second stage, beginning in the mid-1960s, is described as the ‘paternalist state’. During this time the benefits of development were extended to reach those still living in poverty and neglect. The welfare state was expanded until it covered 90% of the population and consumed 40% of the national budget. By 1978 Costa Rica could boast social indices higher than almost any other ‘developing’ nation with an average life expectancy of 70, infant mortality rate of 20 per 1000, literacy at over 90% and an unemployment rate of only 5% or less. Alongside this the public sector grew and diversified at an incredible rate. By 1970, 25% of the country’s workforce was employed by the State and fifty new agencies had been created to promote development in areas as diverse as tourism, foreign investment, fisheries and fertilizer production, and to deal with social and even environmental concerns.
This expansion led to the third stage, the ‘entrepreneurial state’, beginning in the 1970s. Liberación government saw state financing as key to their aim of opening opportunities for ‘capital accumulation outside of the control of the coffee oligarchy.’28 In accordance with this the State began investing public funds in projects and enterprises deemed socially or economically beneficial to the country. Investment in productive activities under the presidency of Daniel Oduber (1974-78) grew at an extraordinary rate of 183%, in which an ambitious program of business creation in industry and agriculture was initiated, along with development of ‘human capital’, in the form of training for technicians, professionals and public sector employees. This led to an increasingly efficient and diversified export sector and a highly educated workforce but also, inevitably, to an ever expanding, more expensive, bureaucratized and unwieldy state; the real price of which was yet to become evident.
The three decades of PLN rule created new social and economic forces that could not be contained within the old oligarchic structures; the newly prosperous middle classes, progressive industrial entrepreneurs and forces of capitalism themselves came to dominate and challenge the old order, paving the way for change.
However, although this ‘Liberaciónista Utopia’ described by historians Iván Molina & Steven Palmer, as a ‘world of cheap credit, endless salary increases, stable public employment and opportunities for social mobility through education’ 29 was partially achieved, significantly improving the lives of many, it was not without its losers; the entire premise upon which it was founded – attempting to reconcile progressive social reform with a fortification of free-market, capitalist economic structures – containing an inherent central contradiction. In line with capitalist expansion worldwide, the encouragement of large-scale agri-business concentrated land and wealth in ever fewer hands, displacing smaller farmers from their land and condemning them to a future of wage labor and poverty. The former coffee aristocracy themselves lost out to the development of mega-producing operations, while this growth of agricultural production also subjected the environment to an unprecedented assault, with extensive deforestation accompanying the banana and cattle-ranching industries and the use of agro-chemicals leaving significant contamination.
1950 to 1970 was a period of unprecedented political stability, economic growth and social progress for Costa Rica. Government control of credit, financing and investment, through the newly nationalized banking system enabled the PLN to achieve a radical overhaul of the country’s economy, industrial productivity models and social structures, that would permanently eradicate oligarchic control and create new opportunities for social mobility and wealth accumulation.
Liberación policies greatly strengthened the agro-industrial sector; between 1944 and 1952 banana exports grew from 3.5 million to 18 million crates annually and between 1940 and 1956 coffee prices rose from $9 to $68 per quintal and by 1970 the annual coffee yield had tripled. This huge expansion in productivity and exports generated extraordinary profits which were then used to finance technological development, agricultural and industrial diversification and social improvements.
The results of this income re-distribution meant that despite a demographic explosion in which the population increased from 800,000 in 1953 to over 2 million in 1973, per capita spending power matched this, more than doubling over the same period.
Social improvements involved a huge expansion of the welfare state and public sector, benefiting lower and middle classes. Meanwhile agro/industrial progress and diversification transformed the traditional export sectors and created new industries – sugar, cotton, pineapple and meat production initially, then textile assembling maquilladora industries, chemical-processing and metal-refining; and allowed for the development of a newly powerful entrepreneurial class within these sectors.
Economist, Juan Manuel Villasuso, depicts the development of the Liberación State in three distinct stages. The first twelve years are described as the ‘developmental stage’, in which increased revenues from the export industry boom were invested into the construction of a new ‘physical and social infrastructure’ to facilitate industrialization.27 Roads, airports and seaports were built, electrical power, water and telecommunication systems were established, and schools, hospitals and clinics were opened all over the country.
The second stage, beginning in the mid-1960s, is described as the ‘paternalist state’. During this time the benefits of development were extended to reach those still living in poverty and neglect. The welfare state was expanded until it covered 90% of the population and consumed 40% of the national budget. By 1978 Costa Rica could boast social indices higher than almost any other ‘developing’ nation with an average life expectancy of 70, infant mortality rate of 20 per 1000, literacy at over 90% and an unemployment rate of only 5% or less. Alongside this the public sector grew and diversified at an incredible rate. By 1970, 25% of the country’s workforce was employed by the State and fifty new agencies had been created to promote development in areas as diverse as tourism, foreign investment, fisheries and fertilizer production, and to deal with social and even environmental concerns.
This expansion led to the third stage, the ‘entrepreneurial state’, beginning in the 1970s. Liberación government saw state financing as key to their aim of opening opportunities for ‘capital accumulation outside of the control of the coffee oligarchy.’28 In accordance with this the State began investing public funds in projects and enterprises deemed socially or economically beneficial to the country. Investment in productive activities under the presidency of Daniel Oduber (1974-78) grew at an extraordinary rate of 183%, in which an ambitious program of business creation in industry and agriculture was initiated, along with development of ‘human capital’, in the form of training for technicians, professionals and public sector employees. This led to an increasingly efficient and diversified export sector and a highly educated workforce but also, inevitably, to an ever expanding, more expensive, bureaucratized and unwieldy state; the real price of which was yet to become evident.
The three decades of PLN rule created new social and economic forces that could not be contained within the old oligarchic structures; the newly prosperous middle classes, progressive industrial entrepreneurs and forces of capitalism themselves came to dominate and challenge the old order, paving the way for change.
However, although this ‘Liberaciónista Utopia’ described by historians Iván Molina & Steven Palmer, as a ‘world of cheap credit, endless salary increases, stable public employment and opportunities for social mobility through education’ 29 was partially achieved, significantly improving the lives of many, it was not without its losers; the entire premise upon which it was founded – attempting to reconcile progressive social reform with a fortification of free-market, capitalist economic structures – containing an inherent central contradiction. In line with capitalist expansion worldwide, the encouragement of large-scale agri-business concentrated land and wealth in ever fewer hands, displacing smaller farmers from their land and condemning them to a future of wage labor and poverty. The former coffee aristocracy themselves lost out to the development of mega-producing operations, while this growth of agricultural production also subjected the environment to an unprecedented assault, with extensive deforestation accompanying the banana and cattle-ranching industries and the use of agro-chemicals leaving significant contamination.
