The roots of the alliance of military and business class are to be found in the 1960s-1970s:
As in the first case, the second crisis these scholars analyze took place among the campesino population. The recovery of population under Carías led to increase in population density, setting the stage for this second demographic/economic crisis.
Starting at the end of the 1950s, difficulties in access to land formed obstacles for campesinos. Ownership of land was concentrated in the hands of large-scale cattle ranchers, "the remnants of the mining-ranching model" of the 19th century, the banana companies, and other large-scale agricultural enterprises.
The authors note that two solutions presented themselves to this situation.
Migration from the rural landscape to the cities, which grew tremendously during this period, was one. Thus farmers converted themselves to workers in industries, and to service workers, simultaneously the reserve of workers for industry. This, they noted, benefited industry, both by providing a labor pool and a new body of consumers of products. Industry surpassed agriculture in generating new jobs in the early 1960s. The state encouraged these developments with industrial subsidies for the business owners. Products made by rural farmers were no longer able to compete in the urban market with the subsidized products of industry. (Think of the replacement of traditional pottery by plastic for a somewhat more recent analogy: this only works because the real costs of the plastic containers are underwritten by such things as provision of cheap electricity.) As Cáceres and Zelaya note, "The policy of industrial development is of a classist nature", encouraging the replacement of an agricultural working class by an urban, industrial labor pool.
There was a second route out of the crisis that started in the 1950s. This was migration to different rural areas, initially pushing agriculture into previously unfarmed land, later organizing to occupy "land held by large-scale cattle ranchers and large agrobusinesses", especially in the major valleys of the banana growing region on the north coast. This route was directed to maintain an identity as rural farmers, and represented "anti-institutional questioning of private property in land...and, on the other hand, the illegitimate possession of national lands" by the large landowners. Again, they see this in class terms, as a challenge to the cattle-ranching class.
While they see this crisis playing out throughout the country, they note it was especially intense in the area that previously had been home to the mining-ranching enterprise, especially along the border with El Salvador.
This rural to rural migration they credit with leading to reform of the Law of Agrarian Reform (Ley de Reforma Agraria):
The reform of [land] tenure is the vertebral column of the reformist project of the first half of the 1970s and consequently the migrant campesinos without land came to be the central social class of this project.
The newly landed campesino groups had increased purchase capacity for the products of urban industries. This especially affected former banana lands, prime targets of seizure and land reform; this is when the Aguán first became a site of struggle. Meanwhile, the increased demand helped the consolidation of the business class, with new government programs providing financing and training of workers under the same reform movement.
These reforms were led by the military juntas that ruled Honduras throughout the 1960s and 1970s, who forged links with the newly growing industrial class.
Meanwhile, the traditional parties remained distant, in part, Cáceres and Zelaya suggest, because of links to the large cattle ranchers who opposed land reform and because of lack of affinities for the industrial managers and owners.
The demotion of the "five or six families" forming the cattle-ranching wealth elite who had dominated the two major parties, and the political elevation of the industrial/business elite was a consequence.
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