Founded in Chile by a group of exiles (chief among which was Oscar Unzaga de la Vega), the FSB initially drew its inspiration from Spanish falangism. Indeed, in those early years it came close to espousing a Fascist agenda, in the style of Spain's Francisco Franco and Italy's Benito Mussolini. It was reformist, however, in that it advocated major transformations to the existing (largely oligarchic) social and political order. This brought it more into the sphere of other "revolutionary" movements such as the Revolutionary Nationalist Movement of Víctor Paz Estenssoro, which would come to power after unleashing the 1952 Revolution. In fact, FSB was at first brought into the MNR coalition at the outbreak of that massive revolt, but backed out at the last moment. A rather minor movement during the 1940s, the "Falange" began to attract major support from former landowners and other members of the Bolivian elite after the triumph of the 1952 Revolution, becoming the ruling MNR's main opposition party. FSB's growing popularity coincided, in particular, with a period of high inflation in the country under the Siles Zuazo presidency (1952-56), and included many well-to-do university students. The movement was based on a cell system and so became stronger in some specific areas, notably in La Paz and Santa Cruz, although attempts to win over the peasantry in Cochabamba proved fruitless and damaged the party's growth.
Ideologically, the party's stance evolved from an adherence to Spanish falangism to a more moderate form of statism. Perhaps inspired by the efforts of the ruling MNR at perpetuating itself in power in the manner of Mexico's PRI party, FSB, too, sought the creation of a strong single-party state, with the Army and the Church held up as the two great pillars of Bolivian society. In the 1950s, the Falange adopted a strong anti-communist stance, with its leaders being particularly critical of Cuba's Fidel Castro following his emergence. Alongside this, however, FSB portrayed itself as being nationalist and anti-imperialist.
The party supported the candidacy of the war hero General Bernardino Bilbao Rioja in the 1951 Presidential elections. Bilbao secured a respectable 11% of the vote, and he would later return as a candidate. Oscar Unzaga, however, remained the party's undisputed leader, and it was he who led FSB's 1956 presidential ticket. He garnished 15% of the vote in an election that many considered suspect due to massive state support for the officialist candidate, Hernán Siles Zuazo. FSB lost momentum after the 1959 assassination of its maximum leader and founder, Oscar Unzaga, at the hands of the state's security apparatus. FSB was at this point strongly suppressed politically, and new parties began to appeal to similar sections of society. The party's vote share fell to 8% in the 1960 elections partly as a result, although no one can be sure that this is indeed the percentage that they obtained.