Chile, A Quarter Century On
The last quarter of the century has passed since the Chilean President Salvador Allende was overthrown and died a violent death, remaining loyal to his people and his country. A US-supported military coup thus put an end to the revolutionary period that crowned a decade of profound social reforms, during the sixties and early seventies, under the democratic governments of Eduardo Frei Montalva and Salvador Allende. The world is quite familiar with the ensuing long seventeen years of murderous military dictatorship, headed by Pinochet. A generalised popular uprising, followed by his defeat in a 1988 plebiscite, put an end to Pinochets rule. Two democratic presidents, Patricio Aylwin and Eduardo Frei Ruiz-Tagle, have presided through the nineties over a slow and still unfinished transition to democracy.
The recent detention of Pinochet in London and the ensuing extradition process for his trial in Spain for crimes against humanity committed during his régime have shaken this country in a quite unexpected way. The poisoned fountain whence all evils of this country flow as De Gaulle once said, referring to Pétain, has dried up. And, ironically, this is due to the actions of the countries the Chilean upper classes traditionally considered to be their spiritual homelands, and whose institutions and modes of behaviour they mimicked: Spain and the United Kingdom, as embodied in Las Reales Cortes de España, the British Home Office and, most poignantly, the venerable House of Lords. This incident, coinciding with the devastating effects of the Asian crisis on the Chilean economy and El Niño drought on hydroelectric reservoirs, has brought the consumerist addiction and despair in which Chileans had wallowed during the transition governments to a final and abrupt end.
Pinochets ordeal at the hands of the nascent universal human rights jurisdiction has highlighted worldwide the feebleness and collusion of the post-Pinochet governments, forced by army pressure, and opportunistic, prudence-coated-pusillanimity, to defend the ageing dictator. Signs of widespread discontent were already patent well in advance of Pinochets detention. The scale of the vote boycott and spoilt ballot papers in the 1997 national elections already pointed in the same direction, as did the violent riots that celebrated Pinochets appointment as Senador Vitalicio in March 1998. But it is since the detention of the dictator that the situation has seemed to have started changing significantly, perhaps signalling that Chiles long transición a la democracia is finally entering its terminal crisis stage.
In a turbulent stream, mud rises to the surfaceæ persistent efforts by human rights organisations at last seem to be bearing some fruit, as new accusations, trials and even some detention orders against active and retired military and secret police agents occur almost every week. These have been issued by an emboldened judiciary, somewhat depustulated of old Pinochetist hard-liners and fed by new and pestilent revelations, trickling through ever-widening cracks in the mafia-style conspiracy of silence of human-rights violators, combined with the US State Department document declassification process. However, this phenomenon has been mainly fuelled by the loss of fear on the part of witnesses and society as a whole, faced with the evidence that nothing terrible, save pathetic right-wing hysteria, has occurred during the old dictators detention, which continues in increasing solitude and decrepitude, month after month. Recent polls show 41 per cent of Chileans want Pinochet never to come back, a similar percentage want him to come back to stand trial and a mere 17 per cent feel he should not stand trial at all. Thus, Chilean society seems to be finally confronting the imperative of expressing at least a degree of the truth and justice it has been lacking over human rights issues, so as rebuild its fabric in an ethically solid way.
Needed political and institutional refreshment seems to be in the making as well, as candidates campaign for the November 1999 presidential elections, with the Socialist Ricardo Lagos as a front-runner for the Concertación de Partidos por la Democracia, the Socialist-Christian Democratic ruling coalition. Outspoken Communist and Green candidates are making their weight felt on his left. Meanwhile, the arrogant and reactionary Chilean Right seems to be, for the first time since the 1988 plebiscite, entirely on the defensive, subjected to a degree of ridiculeæ on a global scaleæ not experienced by them since their historic 1970 defeat. They have managed to unite in support of a young presidential candidate who gained a national profile as a highly effective major of an upper-class Santiago district. But it seems unlikely that he can shed his intimate associations with Pinochet: a recent visit to the latter in Virginia Waters marked decline of eight points in the polls for the candidate.
A certain social awakeningæ much delayed and plainly justified, as we shall see later on, by the deep, violent and still festering social disintegration experienced by Chileans throughout the periodæ seems to be taking place as well. Spearheaded by increasing activism and land occupations by Native American Mapuches in the south of the country, followed by continuing student protests over meagre scholarships and rising fees, somewhat wider working-class and social unrest could be in the making. Indignant consumers have taken to the streets on certain nights, protesting against blackouts by privatised energy companies, banging their pots and pans in a way they had not done since the anti-Pinochet protestas of the 1980s. Worried at an unemployment rate that has once again reached double-digit figures, workers have staged demonstrations under a recently renewed militant Communist leadership of the Central Unica de Trabajadores, CUT. A recent editorial by right wing newspaper El Mercurio reckoned that generalised discontent is spreading in Chile, fuelled by unemployment and economic crisis, electrical blackouts, Mapuche land seizures and Pinochets detention. In this climate, recent CUT calls for a national strike may have a strong appeal. The decade seems to be ending in quite unexpected turmoil. Coming months will test El Mercurios appraisal but, right or wrong, some modest excitement seems to be returning to Chiles appallingly tedious political landscape of Transición. God save the Queen!
This article will try to outline a comprehensive background for this events, attempting the hazardous project of analysing certain economic and social aspects of this turbulent period as a whole, as a unity constituted by violent contradictions.
During this whole period, this small country of 14.7 million people, which lies on a very long and even narrower geological collision zone on the edge of the world, has, in fact, totally transformed itself. We might say that it has finally ended the long delayed transition from its old oligarchic and agrarian self and crossed the threshold of the modern capitalist era. In the process, all its classes have been radically transformed, some of them having disappeared never to come back again. Springing from these changes, the Chilean economy has been hailed worldwide into the economic tiger class. Some peopleæ very fewæ have benefited enormously in the process. Most others would be better described by the words with which the working-class pioneering organiser Luis Emilio Recabarren saluted the twentieth century: There is evident progress in the century gone by, that cannot be denied ... [but] all the progress that the country has benefited from, the proletariat has contributed to it, so that its adversaries could enjoy the fruits.
It is not the purpose of this paper to go into a detailed analysis of the IMF showcase economic policies applied both by Pinochets Chicago Boys and the social- and Christian-democratic economic authorities of Presidents Aylwin and Frei Ruiz-Tagle. Rather, it will try to probe the underlying political economy of the process. It will take a brief look over some of the deep changes occurred in the countrys social relationsæ the way people work and liveæ and how these have affected its economic performance.
From such a perspective, the dark legends that cloud the economic performance of the turbulent Allende period seem to dissolve, confronted by the brilliance of the revolutionary social transformations performed during those years. It is in the popular radicalism of this phase that the clues to the remarkable dynamism of the period as a whole are most probably to be found.
The Irreversible Legacy of the Age of Revolution
It is perhaps not well-known that Pinochet, who violated most Chilean laws, abided, almost to the letter, to two key ones: those pertaining to copper nationalisation and agrarian reform. Both lawsæ together with the distribution of half a litre of milk to every child to stop malnutrition, putting an end to illiteracy and extending obligatory basic schooling from six to eight years and the reform of the university systemæ comprise the main legacy of the Frei Montalva and, especially, the Allende, periods.
In the case of copper nationalisation, it is true that Pinochet, in 1974, paid some illegal compensation to the US companies that formerly owned the mines nationalised by Allende. Also, Pinochet and his minister Piñera twisted the nose of the Chilean constitution, even their own, to give away 61 per cent of the countrys mining production to foreign companies that avoid even the token taxes they are liable for.
But, on the other hand, Pinochet not only maintained state ownership over CODELCO, the national copper company formed by Allende, but it also doubled its production. All together, Chilean copper productionæ still by far the countrys main productæ grew from 743,400 pure copper tons in 1973 to 1.6 million tons in 1989 and to 3.1 million tons in 1996. Of that amount, CODELCO still produces 39 per cent, that is, over 1.2 million pure copper tons a year.
The state company CODELCO is astoundingly profitable, one of the six most lucrative companies in the world between 1989 and 1992, according to Fortune magazine. The ground rent associated with Chilean copperæ due mainly to the top-notch quality of the ore and the proximity of minerals to portsæ is considerable. It is estimated that CODELCOs profits over sales was three times the industrys worldwide average between 1990 and 1995. Between 1994 and 1996, CODELCOs returns to the state, including profits and taxes, were 3.6 billion dollars and its returns over the last ten years, forward accrued at a 10 per cent annual rate, add up to 20 billion dollars. In as small an economy as Chiles, these figures are quite substantial. CODELCOs income pays for a sizeable portion, around 11 per cent, of government income, that is, roughly the equivalent to the revenue of corporate income tax or to 34 per cent of the cost of all the governments housing, education and health programs put together.
By contrast, the overall taxes paid by the foreign companies who, as has been mentioned, already produce 61 per cent of all copper mined in the country, are on the scale of 200 million dollars a year. These figures hint at the magnitude of the losses of the Chilean government due to the permissive mining taxing system instituted by Pinochets Minister Piñera. Private mining companies easily wriggle through loopholes in the tax law by carrying a disproportionate debt to equity ratio, thus concealing their earning transfers as interest payments. Also, and most irritating, they file their local companies under a special legal provision originally designed to offer tax breaks to small miners. They do this by holding back their refined copper production to the limit established by this provision, some 70,000 tons a year, and exporting the rest as concentrate. In this way, for example, Escondida, the largest mine in the world, owned by Canadian Broken Hill, that produces over 800,000 tons a year of pure copper, is considered a medium mine for legal purposes, because it produces 69,999 tons of refined copper a year. The overall mining tax damage has been estimated at over a billion dollars a year and several proposals are presently being discussed that could put an end to it.
Important as Allendes copper nationalisation law has been, it is probably in Frei Montalva and Allendes agrarian reform that the single most important origin of the subsequent Chilean economic developments should be sought.
The agrarian reform put end, finally, to the type of labour relationship called inquilinaje or latifundia. As it is well known, the nucleus of this traditional relationship consisted in the cession by the latifundista of some of his land to his inquilinos, in return for which they had to pay with labour, their own and their family members. Latifundia were consolidated in Chile early in the nineteenth century when, coinciding with independence from Spain, the remnants of the old Spanish Crown-protected Indian land tenancies were eliminated. It peaked during last century and showed remarkable endurance well into the twentieth. By 1960, although in a quite decomposed form, inquilinos and other latifundia-dependent peasants made up about half of theæ by then quite importantæ agricultural workforce, the rest being independent peasants and Indian communal-type settlements. There was some argument at that time in the social sciences as to the importance of traditional vis-à-vis capitalist elements in agriculture and the social structure as a whole. However, was a consensus amongst political as well as social actors about the importance of a deep change in land-owning structures. The main 1964 presidential contenders, Frei Montalva and Allende, both had agrarian reform as the key point in their programmes. The law was finally passed under President Frei Montalva in 1967. The Alliance for Progress, impelled by the USA in Latin America after the Cuban Revolution, backed this process.
During the governments of Presidents Frei and Allende, the land expropriations carried out in execution of the agrarian reform law by the Chilean state affected 52 per cent of the agricultural surface of the country and practically all of the cultivated lands.
After the 1973 coup, Pinochet did not return the land to its property status prior to the agrarian reform, except in a limited number of cases where the legal process of expropriation had not been completed. In general, the destiny of the expropriated land was more or less the one specified in the agrarian reform law. This law established that a part of the lands, denominated reserva, would be left to the old proprietorsæ thirty per cent of the expropriated land, approximately, was treated thus. Most of the expropriated land, though, around 40 per cent, was delivered the peasants, 20 per cent in individual property and 20 per cent to co-operatives. The remainder was auctioned off, mainly to large forestry companies or delivered to non-profit institutions. Only some of the peasants received land, many of them inquilinos who worked as supervisors in the old latifundios. Twenty-five years later, about two-thirds of them still have their farms and about half of these are relatively prosperous.
Prosperity has also come quite frequently to the sons of the old proprietors who, starting from their reservas, have developed, in many cases, medium-sized modern agricultural companies, many of them dedicated to the export of fruit and vegetables. Next to that, large companies have acquired big extensions of land they exploit, mainly in forests and winery, with quite modern agricultural technologies. The extraordinary surge of growth experienced by Chilean agriculture during the last few yearsæ just one example of it: between 1975 and 1994, fruit exports multiplied from 100 to 1,200 thousand tons per yearæ is explained mainly by these processes.
Most of the peasants did not receive land from Pinochet; except for the houses they lived on and in most cases, not even that. The Pinochet régime was especially harsh on those peasants who deserved the land the most, namely, those who had actively backed agrarian reform. Most of them swelled the ranks of the one in six peasant families who were simply expelled from their lands during that period. In fact, so many of them were singled out and imprisoned or killed in the days immediately after the coup, that their names make up a majority of the 3,000 engraved in stone on the monument to those killed or who disappeared under Pinochet.
The Harsh Tale of Primitive Accumulation
As a result of these described processes, a good part of the peasants had to abandon the lands they had lived on for generations, to stumble into the uncertainties of the transitional social relations that mould lives to fit modern social structures. This development had been taking place in Chile for many years, was accelerated substantially by agrarian reform and has continued up to the present day. This dramatic voyage, in Chile as in the rest of the world, has intertwined the basic social fibre of the ongoing historical transition with the modern capitalist epoch. A few small countries took the first steps, the rest followed suit, one by one, region by region, continent by continent, over the last two centuries. Thus has written the harsh tale of primitive accumulation which, up to now, has implicated half of humanity.
Since 1970, Chilean GDP has tripled, rollercoasting down throughout the two deep crises in 1975 and 1982 and up again into a steep and, up until now, uninterrupted 7.8 per cent mean annual growth rate since 1985 and up to 1997 (See GNP 1 chart in appendix). In fact, during this twelve-year long growth spree, the Chilean economy has been one of the worlds most dynamic, gaining a full 10 places in a 143 country ranking of Gross National Product. By 1992, it had attained the thirty-fourth place in a 117 country ranking of per capita Gross Domestic Product (GDP) purchasing parity adjusted. Ravenous as the animal may be, the Chilean economy has acquired a certain feline status, especially in the eyes of the international community of official economists.
It is not unusual for economists to avoid certain important economic questions or address them with rather abstract and formal recipes. The fact, for example, that, in certain stages of their development, economies tend to accelerate and go through long periods of high growth, while mature countries consider anything above a 2 per cent annual rate as overheating. At most, an answer to such phenomena would appeal to something as sophisticated as the law of diminishing returns. In the case of Chilean economy, instead, the mentioned dynamism seems to stem, rather, from complex and contradictory historical developments through which millions of people quite radically changed the way they work and live. Somehow, the same activities the vast majority of them had carried out for generationsæ working from sunrise to sunset, for the benefit of others most of the time and always exhaustingly past the inflection point of diminishing returnsæ suddenly acquired economic importance. Even though they continued to live quite frugally, perhaps worse than before, their work quite surprisingly started to show up in the national accounts. They have seen, for themselves, even less gold than before in their lives. Nevertheless, they seem to have been endowed with the Midas touch.
People actively participating in the economic process have multiplied in Chile during this period. Those whom statistics classify as employed doubled in the last three decades, while the population grew by half during the same period. The number of employed persons grew from 2.7 million in 1970 up to 5.4 million in 1997, a 95 per cent increase. Over this period, the Chilean population grew from 9.3 million to 14.7 million, by 57 per cent in a more precise estimate (SeeOccupied & Unemployed chart, in appendix). In fact, overall population growth has been decreasing rapidly, after peaking in mid sixties. Chiles Population Annual Growth Rate rose, from a midrange position of 68th out of 156 countries in 1950, until 1965, and then fell to reach 107th place in 1995. It should be noted that it gained 33 places in this scale during the turbulent years (See table below and See Population, Annual % Growth Rates chart in appendix ).
Chile: Population Growth Rate, 1950-1995
Population Annual Growth Rate (%)
Place in world ranking of 156 countries (higher to lower PAGR)
Source: AE 3D Atlas
Of course, modern employment has showed itself to be quite hazardous, and Chile has proven to be no exception. Employment growth has not had a smooth run. Quite the contrary, for unemployment has grown as in as lively a manner as employment and has jerked up and down in a scissors movement. Gone for good were the 1960s, with unemployment rates of less than 5 per cent. After 1973, unemployment has never fallen below that figure and it peaked as high as 31 per cent of the workforce (employed and unemployed) during the crisis of the 1980s. Recently, after reaching a minimum of 5.3 per cent in 1997, unemployment has soared up again, atop 10%, as the Asian monsoon hits Chiles coast in full force.
Added together, the numbers of employed and unemployed have increased more rapidly in Chile than other countries, in the same period. Thus, between 1970 and 1995, Chile moved up seven places, from 63 to 57, in a ranking of the economically active population in 142 countries. During the same period, Chile moved down 8 places in the total population ranking.
The peasantry, the traditional source of primitive accumulation, has rendered its generous quota to attain this feat. The turbulence of the 1960s and 1970s accentuated the process of peasant migration to the cities, a process that continues up to this day at an impressive rate. Chile had been urbanising throughout the century and had already attained a rather high level, with 60 per cent of the population categorised as urban as far back as the 1950s, a figure that reached 74 per cent by 1970. This process has continued and even accelerated since then. Cities as a whole grew by 71.3 per cent between 1970 and 1995. The total population of the country grew from 9.34 to 14.7 million inhabitants, an increase of 52.1 per cent, while the rural population in fact decreased slightly by 0.1 million people, in the same period. The percentage of urban population increased from 75 per cent in 1970 to more than 84 per cent in 1995. (See Population, Urban & Rural chart, in appendix).
Chiles already acromegalic capital city, Santiago, grew from 2.89 million inhabitants in 1970 to 5.2 million inhabitants in 1995, that is, an increase of 80.2 per cent. As can be seen, Santiago is not only still growing faster than the total population, but also at a more intense rate than the rest of cities taken as a whole. Even so, some tendency towards decentralisation may be observed already, with the emergence of some regional capitals such as Copiapó and Iquique in the north, Rancagua near Santiago to the south, or Temuco and Puerto Montt, farther south. All these cities more than doubled their inhabitants in the same period and, together with others, are growing even faster than Santiago itself. In this way, Chile seems to be following the pattern established in older capitalist countries where, in the initial stages of development, people tended to concentrate in one or a few enormous cities, to be followed by a more reticular trend. (See % of Population in Large Cities charts in appendix)
As a resultæ it should be mentioned at least brieflyæ air, water and traffic pollution in Santiago is reaching intolerable and dangerous levels. These are perhaps the worst of the considerable ecological problems that are becoming commonplace in Chile. They are a good example of how the voracious early capitalist stage of development of the country is tearing into Chiles remarkably beautiful but quite fragile natural settings at a rather fearful pace.
Between 1987 and 1997, the percentage of those employed in agriculture, hunting and fishing relative to overall employment fell from 20.9 per cent to 14.4 per cent, according to new census estimates. During the same period, a whole new fishing industry has sprung to lifeæ trout farming in the oxygen-rich waters of southern Chiloé archipelagoæ that already employs over 15,000 people, making Chiles salmon export industry one of the largest in the world, up from nothing 15 years ago. This means that the agricultural workforce has been declining even faster. According to the old estimates, people employed in agriculture, hunting and fishing had been declining down from 30 per cent in 1960, to reach 15 per cent in the mid 1980s, with a big lurch in the early seventies, coinciding with agrarian reform. If the new data series, starting in 1985, is projected back to 1960, the resulting agricultural proportion of occupied workforce well surpasses 40 per cent at that time (see % Workforce Occupied in Agriculture chart, in appendix). The same result may be appreciated by noting how the absolute numbers of those occupied in agriculture, hunting and fishing steadily decrease. As measured by the old or new data series, during the same period the overall employed workforce doubled and tripled over the years (see Workforce occupied in Agriculture vs. Others chart, in appendix).
Recently, the proportion of the workforce engaged in agriculture has been decreasing by almost one percentage point per year. In other words, in the last five years, some 250,000 peasants left the countryside to join the ranks of urban employed or unemployed. Taking into account their families, no less than one million people, one fifteenth of the population, have been subject to such a decisive historical change in such a short a period of time. Whatever the yardstick, the fact is that the peasantry in Chile, though still at the level of England around one hundred years ago, has been declining at a very rapid pace during the last three decades.
Statistics, of course, are incapable of rendering even a pale picture of the human drama involved. It is not bulldozers, maybe, as in John Steinbecks Grapes of Wrath, that throw peasants out of the homes they lived in for generationsæ though sometimes they do get bulldozed out. In the coastal hills of central and southern Chile, it is really pine treesæ and the capitalist companies who buy out the peasants to plant themæ that pour down over the hills, expelling peasant families. Where to? Perhaps also to become fruit-pickers, as in the California of the 1930s. Or anywhere beyond a way of life they can no longer tolerate. It is true that older peasants usually do not leave their lands easilyæ not until, as this author has witnessed, they have cut down their last tree and sold their last cow. But it is also true that, if some people may have romantic ideas about traditional country life, the peasants themselves and especially their younger kin do not share them. They suffer the harshness and brutality of traditional peasant lifeæ its sheer idiocy, according to Marx, that is to say, its terrible disconnectionæ from dawn to dusk. That is why they are quite willing to leave places, many of which are amongst the most beautiful in the world, only to plunge into the uncertainties and helplessness of life for the poor in the towns and cities of modern Chile.
This is not to say that the process runs without resistance. Quite the contrary, many of these peasants being members of the Mapuche Indian communities, for example, their plight is no stranger to the recent national agitation in those regions. On the other hand, the nature of peasant agitation in Chile is quite different from other peasant movements presently surfacing strongly in Latin America. As has been remarked, in Chile there are no landowner death squads, for example, perhaps because agrarian reform did away with traditional landowners altogether.
The Modern Quarries of Golden Eggs
During the last three decades, Chile has drawn freely from the large quarries of value-producing labour. Housewives, that second wellspring of the modern productive workforce, after peasants, have also contributed their part.
Women as a percentage of workforces have increased rather considerably in Chile in the last few decades. From 22 per cent of the workforce back in 1970, the employment of women has increased to 29 per cent in 1992. Relative to other 140 other countries, Chile climbed 9 places, from 99th to 90th position, measured by this indicator. Relative to other Latin American countries, Chile has grown faster in this indicator than Brazil and Peru, has surpassed Mexico and even Argentina and is catching up with Uruguay (See Labour Force, % of females chart in appendix). By 1995, the female component of the Chilean workforce had climbed to 32.1 per cent and was growing at a 4.1 per cent annual rate, while the workforce as a whole was growing at a 3.0 per cent annual rate.
Chiles still quite backward social structure has ample resources left in these founts of labour to ensure continued siphonage for years to come. It has a long way to go before agricultural workforce reach the 2 per cent level, or women in the workforce the 40 per cent level, which characterised for many years countries such as the UK. But the Chilean economy has also been second to no one in tapping that rather contemporary source of value-producing labour: the commodity production of services. Perhaps it was the Chicago Boys influence or perhaps the effect of the Pinochet régimes suppression of the resistance of the Chilean salaried workforce but, whatever the reasons, the fact is that relatively socially backward Chile has pioneered a great deal of Reaganite-Thatcherite restructuring.
Ideas and words tend to be more universal than the social conditions to which they refer. So, the same words or concepts are often used to represent quite different things in different places. Those who use such concepts can be completely unaware that they are talking about quite different matters, of course, because it seems difficult to really comprehend what one has not directly experienced. In Chile, after all the changes witnessed in these years, it does seem fairly clear that some things were quite different from the way that they were thought about, talked about and meant to be. Capitalism, for one, seems to be a quite different animal from what was identified and discussedæ at considerable length, in some circles, if enough coffee or beer were availableæ in the Chile of the 1960s. The same might be said for the working class, or the capitalist class, and so on, and one might add socialism to this list.
With due caution given, then, to different social realities, some words may be said about the kind of restructuring carried on by De Castro, Piñera, Buchi and their rather insensitive kin, in the Chile of the late 1970s and 1980s. Quite a lot of restructuring has carried on through the 1990s and the social- and christian-democratic technocrats seem to be enthusiastic in this respect, though they pay at least lip service, and some real tribute, to a certain social responsibility.
The key sectors targeted for the so called modernizations of Piñera et al. were all state companies and the public pension, health and educational systems. The magic ointment for everything was, of course, privatisation. Where outright privatisation did not seem possible, outsourcing would do instead. Together with government-sponsored modernizations, private companies did a lot of outsourcing of their own. It is not within the scope of this article to go into a detailed analysis of each of these measures. Later we will mention the impact privatisation had on the nurturing of nascent Chilean modern bourgeoisie and on the young Chilean working class. At this point, though, it should be emphasised that, on the whole, modernizations have resulted in a massive transferral of non-commodity-producing workers into the mainstream of value-producing economic activity.
The world-renowned Chilean Administradoras de Fondos de Pensiones (AFP), the privately administered capitalisation-based pension system, is a good example. As is well-known, the AFP system replaced a state-administered pay-as-you-go pension system with one in which the pensions were financed by making employees owners. The new system is based on privately administered individual retirement accounts, where all employees are obliged to deposit 10 per cent of their wages on a monthly basis. In addition to that, they are deducted another 2-3 per cent of their wages for AFP administrative charges and accident insurance. Starting in 1981, the AFP system has enrolled, by now, the entire 5.4 million strong workforce and has accumulated some 30 billion dollars in the pension fundsæ around half of Chiles yearly GDP. About 40 per cent of the funds are invested in state bonds and the rest is split evenly between housing bank bonds, other corporate bonds and shares. Some 2 per cent of the funds are currently invested abroad. The system has been important for the development of Chilean capital markets, as has been acknowledged in practice by the five large firms who have secured control of the industry, most of them alliances between Chilean and foreign finance sector groups.
The main criticisms of the system stem, first, from the fact that fully half of the workforce is not entitled to any pension at all, under the present system. This because, although they are inscribed in the system, they are not paying their monthly fees into it. As it is now, the pension law requires a minimum of 240 monthly instalments, that is, 20 years of regular payments into the system, to be entitled at least to the state-secured, $100 US a month minimum pension. On the other hand, some 25% of the workforce, even if they do pay their regular monthly instalments into the system, these are so small that they will not reach the minimum pension level by themselves, and will need a government subsidy to secure even that low pension. Only some 25 per cent of all affiliates, those with better incomes, will ever get more than the minimum pension. Another criticism can be made of the huge cost of the system, with administrative fees by AFPs amounting to fully one fifth of each monthly deposit, ten times as much as the cost of the Singapore state-run capitalisation system and by far the highest in all of Latin America for similar systems, with the sole exception of Argentina. Finally, many scandals have surfaced regarding the way AFP owners manipulate board elections in the companies in which they invest the pension funds.
The AFP system has transformed the non-commodity-oriented work of the 2,000 or so state employees who ran the old system, in a completely commercial industry. An industry, moreover, which sells some 600 million dollars a year, the cost of AFP administrative fees, employs some 20,000 personsæ roughly the same as copper giant CODELCOæ and earns some 100 million dollars a year.
Similar effects have been obtained by the privately run Institutos de Salud Previsional (ISAPRE) health insurance system. This system operates based on a 7 per cent obligatory wage deduction that goes to ISAPREs for health insurance purposes. In this case, there remains a state-run health insurance agency, where employees may choose to deposit their 7 per cent, as some 50 per cent of the workforce, the lower-paid strata, in fact do. Even so, already two-thirds of overall health expenditure goes to the private system. Again, the old non-market-oriented public health systemæ much of which still survives, a chronic patient itself in a critical conditionæ has given way to the creation of a whole new billion dollar service industry. A similar story may be told of the private educational sector. Nowadays, the new private university system, less than ten years old, already enrols half of all university students. As is the case with the remaining public health system, the state university system stumbles on, a prisoner of its non-commodified structure and vocation and the demands made on it to compete with the private industry that thrives alongside.
Corporate restructuring affected mainly the state enterprises, certainly the privatised ones but also the ones that have remained under state ownership. CODELCO, for example, has reduced its workforce by half since 1990, while significantly increasing its output in the same period. Corporate restructuring has mainly taken the form of outsourcing different services that were previously done in-house to private contractors. CODELCO, again, employs as many sub-contracted workers as employees of its own.
The results of Chilean restructuring have been quite considerable. According to the national accounts, service sector GDP has been growing faster than the fast-growing goods producing sector and faster than GDP as a whole. Public services, for their part, have not grown at all. Starting at 100 in 1985, the goods producing sector GDP index doubled in ten years, reaching 210 by 1995. GDP as a whole index reached 240 and the service sector index topped 245 in the same period, both starting also at 100 in 1985. The public services index, meanwhile, practically stagnayed at 110 (seeGNP, Goods, Services, Government charts, in appendix). Once again, it is not without reason that workers resist restructuring or modernizations everywhere. The meaning of these words for all of them in Chile has been uncertainty and, for many of them, early retirement, when they are lucky, or outright unemployment in many cases.
The political economy of all the above-emphasised human displacements is, of course, well-known. Peasants in their traditional surroundings, housewives at home and service salaried workers embedded within state or company structures, all of them interchange theiræ significant and usefulæ work in a direct, mostly non-mercantile manner. That is, they do not sell their product, whether goods or services, but render it directly to their own and their familys well-being or their companys or communitys requirements. As soon as they leave the farm, home, public office or company service department, they join the ranks of salaried or self-employed commodity producers, or simply the ranks of the unemployed.
Salaried or Informal Commodity Production?
It is not the intention of this analysis to imply that the proportion of the population involved in commodity production is the sole source of the large disparities observed between countries economic performance. Quite the contrary, the purpose is to emphasise the importance of social relations in economic performance, in general.
In the case of Chileæ and most of the world, perhaps, except for the OECD countriesæ the most relevant change in the last decades regarding social relations, seems to have been the massive defection of its inhabitants from activities where direct, non-market-oriented work interchange, made up most of their day; some of these activities are traditional, others are transitional of one type or the other. Certainly, their defection is forced by historical circumstances, as is their equally massive entrance into commodity-producing activities of a different nature.
But where do they go? There seems to be ample evidence that in Chile, at least, the masses of new commodity producers pouring out of their niches and into the marketplace do not seem intent on following anybodys magic flute into a petty-producing never-neverland. Rather, they seem impelled to follow the trail already blazed by their homologues in Europe in the last century and the rest of the developed or NIC world in this oneæ that is, towards modern social formations where capital-dependent salaried workers conform to the incontestably dominant production relations.
This is not to say that self-employed or informal types of employment are non-existent in Chile. Self-employment remains, in fact, quite important, by far the second main form of employment, after salaried work, in the active workforce. It has grown as fast and, at times, even slightly faster than salaried employment. By 1995, the active workforce statistics comprised some 1.4 million persons classified as self-employed or their family members, 27 per cent of the employed workforce at that time. Salaried workers comprised 3.6 million persons, 70 per cent of the active workforce, including 274,000 persons who earn their salary by supplying personal services, mainly domestic. The remaining 3 per cent of active workforce is classified as employers, even though many of those probably employ fewer than 10 persons (seeOccupied Workforce, Class Composition, 1995 chart, in appendix). In the decade 19851995, the self-employed workforce plus their family members grew at an annual rate of 3.63 per cent, almost exactly parallel but a bit more than the 3.61 per cent annual rate of growth of salaried employees, excluding those providing personal services, over a similar period (see Occupied Workforce, Class Composition, 1985-1997 chart, in appendix).
It is not strange at all that self-employment remained stable as a proportion of employed workers during the Chilean jaguar growth decade. In fact, it is rather remarkable that salaried employment has been able to absorb enough of the new workers flowing into the marketplace in this period to maintain the rate of growth it has achieved. It is normal, as well, that in a cyclical crisis, some of the salaried workers thrown into unemployment seek refuge in self-employment or family economic activities. The long-term trend, though, tells a different story. As has been mentioned above, both rural inhabitants and persons occupied in agriculture have diminished from over 40 per cent of the active workforce in the 1960s, to under 15 per cent today. Self- and family employment, on the other hand, are much more frequent in rural activities, where they comprise over 37 per cent of the active workforce than in the urban environment, where they are just over 20 per cent of the active workforce.
The argument as to whether capitalist development increases or decreases the proportion of salaried workers is everlasting. For, on the one hand, it quite obviously both increases and decreases the number of salaried workers and, on the other hand, significant interests, mainly cultural and political, are deeply implicated in supporting one or the other thesis. Although the author of this paper is quite convinced, theoretically and factually, as well as politically predisposed towards the proletarian growth argument, making this case is not the present purpose. It is rather to point out the relative infancy of capitalism as a whole, both in Chile and in the world at large. In this sense, it is not enough to affirm that salaried workers have doubled in Chile since 1970, which they indeed have, to prove that the Chilean working class is today twice as strong as before. The point here is, rather, that the Chilean working class seems to be just starting to conform to the dominant tendency. And, of course, we are speaking in purely objective economic terms and no more. For these purposes, though, qualitative analysis seems to be more appropriate than statistical figures.
Quite a large proportion of the salaried workers in Chile is employed in very small companies. At least one fifth of those employed in manufacturing, for example, worked in factories with 20 or fewer employees. It seems quite unlikely that Marx, for example, would have considered these factories as examples of full-blown capitalist production. Similar reasoning suggests that the census bureau should keep the number of persons, mainly women, employed in personal services as a separate set of statistics from other salaried employees. In this sense, although salaried workers in Chile today appear to constitute a quite high proportion of its active workforce, the meaning of such a figure is probably very different to a similar one, or even a lower one, in a more mature capitalist country. The most studied case in point has been, of course, that of persons employed in latifundia. Up until the 1960s, peasants employed in latifundia, which comprised a quite large portion of the overall workforce by then, swelled the official salaried portion of the occupied workforce. This type of salaried worker no longer exists in Chile today.
A similar critical analysis may be applied to the labour relations that for decades developed in the centres that constituted, by far, the largest concentration of workers of the Chilean economy, the very heart of the twentieth-century Chilean working class: coal, nitrate, copper and other large mines. They were, evidently, involved in highly competitive commodity production, and, in these industries, the owners conventionally capitalist, in most cases, share companies from Great Britain or the United States. Quite a different story, though, may be told about the actual labour relations within the mines compound. Capitalist on the outside, those enclaves looked quite like latifundia on the inside. The enganche recruiting system, for example, through which peasants were picked out of the haciendas to be packed aboard ships and trains to the mining camps, a thousand kilometres away in the desert, surely had little to do with the functioning of a regular labour market. It was not until the 1930 crisis that a more traditional wage-labour supply became available to nascent capitalism, in the thousands that flooded the roads and streets of Chile, back from the closed nitrate mines.
Campamento or Oficina-type labour régimes stayed that way for a long time. In 1997, finally, the government decided to put an end to the long agony of the coal-mines at Lota, in southern Chile, the oldest large concentration of workers in the country. Chiles leading newspaper El Mercurio published an interesting press report then, pointing out that, after three or more generations working in the mine, which lasted more than a century, the peasant traces in the miners culture remained quite vividæ poignantly so, as they were forced to end their way of life and confront the highly unprotected environment of the present-day Chilean world of labour. Strangely, the report somehow seemed to be describing the death of Chiles last latifundia, rather than its pioneer capitalist company. Camp life, where everythingæ all services, from the health care down to minor repairs in domestic artefacts, including pulpería commerce, operated on a moneyless or token basisæ was owned and done by the company, was a salient characteristic of labour relations in these companies. Employment for life, including for the workers descendants, was another. In CODELCO, for example, the company that maintained the century-old practices of its American-owned predecessors, it was not until the democratic governments decided upon the restructuring of the company, in the 1990s, that such a culture was deeply affected. And CODELCO still is, by far, the largest Chilean company, the only one of world-class size. The few large private companies that developed in sectors such as electricity, telephones and paper followed quite similar patterns.
Large concentrations of workers in twentieth-century Chile were to be found, secondly, in the state companies and public services. The formeræ mainly railways, ports, water utilities and some others, from early in the century, hydroelectricity and steel from the 1940sæ could be said to be involved in commodity production, although only up to a certain point, if the chronic deficits of some of these companies are taken into account. The public servicesæ health care, education, public road maintenance, state administration, the military, and so onæ were not involved in commodity production at all. The labour relations within these services and, to some extent, in the state companies too, followed the classic pattern of bureaucratic discipline prevalent in the state public service and also enshrined employment for life and for descendants. Relatively large concentrations of workers developed in the 1950s and 1960s in the import substitution manufacturing industry, mainly textiles. In these highly protected monopolies, labour relations, again, followed the latifundia-type model quite closely, including the typical factory-owned urban village where workers lived.
Of course, large commodity-producing concentrations of workers owned by capitalists, but with pre-capitalist internal labour relations, have by no means been infrequent. Rather, they seem to be the natural manner in which capital organised production where proper wage-workers were still centuries away. The extreme case is, of course, slavery in America, with 600,000 strong concentrations of workersæ probably the worlds largest during the seventeenth, eighteenth and well into the nineteenth centuries. All the sweetness of the worlds sugar thus produced, of course, went to Europes nascent capitalism.
The only place in Chile where large capitalist companies developed during this century, following the better known US or Australian model, was Patagonian Tierra del Fuego, in the extreme south. This region, whose native inhabitants were colonised by the turn of the century in the same murderous North American style, developed huge sheep ranches with large wool and meat export industries, amongst the largest in the world. Characteristically, then, only where latifundia were absent did early capitalist development follow, in Chile, more familiar patterns.
All the above mentioned forms of salaried employment have come to an end during the last three decades. Wage labourers today, instead, work mostly in private companies, most of them small or medium sized, but in some large companies or conglomerates as well. True, teachers and health-care workers, the countrys largest trade unions, still work, most of them, in the public sector. But, as has been mentioned, both are going through turbulent times, mainly due to the competition of nascent capitalist industries that grow alongside them. The preceding analysis should not, however, suggest that Chilean twentieth-century concentrations of salaried workers should not be assigned all the relevance devoted to them by social science throughout the century. On the contrary, the evidence of their importance to the emergence of a popular actor in Chile in this century, from its very beginnings, is overwhelming. Thereforeæ and this is the main thesis of the present analysisæ they should be considered as the main articulators of the vast popular movement that precipitated the social transformations that, in turn, are relevant to explain the overall changes the country has experienced in recent decades, specially its economic performance. On the other hand, more transitional features of the Chilean twentieth-century proletariat may well now seem rather more in accordance with the character of the historical changes that actually took place in Chile.
The increased importance of modern salaried workers in the Chilean social structure has not yet shown up in an increased importance of labour organisation. In fact, labour movement experts consider that worker organisation is still declining. Ten years after the end of dictatorships active labour activity repression, overall affiliation to trade unions, at 20 per cent today, is still far away from the 34 per cent levels reached in the peak of the revolutionary years, during Allendes 1970s. From 1992 to 1995, even though the number of trade unions in the private sector increased from 10,756 to 13,000, the total number of workers affiliated to them actually decreased, from 724,065 in 1992 to 637,570 in 1995. Workers involved in collective bargaining rose from 11.6 per cent of the overall workforce in 1989 to 15.1 per cent in 1992, only to decline again to 11 per cent in 1996. In 1996, 73 labour federations representing 416,000 affiliates participated in the elections of the Central Unitaria de Trabajadores (CUT). One year later, 65 organisations representing 354,000 affiliates participated in the 1997 CUT elections. A similar pattern manifested itself in one of the CUTs largest organisations, the teachers Colegio de Profesores de Chile: its affiliates went down from 120,000 to 70,000 in the last few years.
A different trend seems to be in the making, though, at the moment, regarding worker militancy. Recent elections held in the countrys main trade unions, including CUT, have been systematically won by the Communist Party, who have displaced labour leaders belonging to government coalition, Concertación de Partidos por la Democracia. Whatever the ups and downs of their organisation and militancy, it seems quite clear that more salaried workers than ever in Chile today are getting to know crude labour market facts and what subordination to capital really means. It would not be totally misguided, perhaps, to consider that modern wage labour seems to be reaching its adolescence in Chile nowæ as is Chilean capitalism and so too are Chilean capitalists themselves.
The Chilean Bourgeoisie, Forced into Being by Revolution
British magazine The Economist, analysing Chilean economys evolution during recent decades, pointed out a significant fact. The most relevant transformations realised by Pinochets dictatorship were possible, according to The Economist, because they did not encounter the same conservative resistance that delayed the same measures for decades in other countries. The Economists conservative pressure groups included trade unions, certainly, but, more significantly, the magazine mentioned two other social groups primarily: traditional landowners and import substitution monopoly industrialists. Both groups, of course, had been hardly hit by Allendes expropriations.
The Chilean upper classes have undergone substantial change during the last three decades. From a deeply conservative sector, mummies as they used to be called, there sprung an aggressive bourgeoisie, brutal in its politics and quite entrepreneurial in their economics. Only in cultural and religious aspects do they still maintain a conservative stance. El Mercurios Sunday cultural supplementæ which recently carried an interesting assessment of the Communist Manifesto, stating the inevitability of the undermining of traditional values by neoliberal economics and even co-sponsored Eric Hobsbawms recent visit to Chileæ and recent multiparty legal proposals in favour of divorce can, however, be taken as evidence that the cultural conservatism of the Chilean bourgeoisie will not endure for ever, either.
Chile seems to have been undergoing its own Age of Capital during recent decades. Nurtured by huge transferral of public property into private equity during the Pinochet yearsæ mainly through the privatisation component of Piñerass modernizations and financial recovery from the debt crisisæ as well as under the ensuing democratic governments, the leading barons of the Chilean bourgeoisie have become ever richer. So much so, in fact, that they have been recently developing their own Age of Empire as they invest throughout Latin America.
Their international alliances have been changing rapidly, as their own assertiveness growsæ they have moved out of the US camp and towards Latin American and, not surprisingly, Spanish capital. It is possible that Spanish and Latin American capital may be entangling at the moment much in the way British and US capital did at the turn of the last century, but with the whole of Latin America as their game park this time. In just three years, Spanish capital, in alliance with Chilean capital, but also involving capital from diverse other Latin American countries, has gained control of the continents electric, banking and telephone systems. It is quite indicative that the main Chilean groups involved in Latin American electricity ventures sprang from Pinochets privatisation of Chilean state electricity companies and are funded, mainly, by the AFP system.
The Many Stages up the Curve to Modernity
It has been implied throughout this analysis thatæ at much deeper level than that of economic policies or political régimes of one type or anotheræ the main mechanisms governing the tempo of the transitions towards modern societies should be located in the movement of their social relations. Social relations are an entangled complex in any country, or at any moment of time in the life of a given country, and it does not seem easy to establish some measurable evidence to support or reject of the above-mentioned hypothesis. This article has intended, nonetheless, to test a certain correlation between social and economic development. The same line of approach will be presented in what follows, with all due caution, as an illustration rather than as empirical evidence.
The degree of overall social development was estimated through the movement of one variable, namely the percentage of agricultural workers in the occupied workforce. On the other hand, overall economic performance was estimated through per capita GDP, as a proxy for productivity. It must be emphasised that both variables have been selected not by their own significance, which is important in itself, but mainly as estimators of the overall movement of, one the one hand, social relations, and, on the other, overall economic performance. Both variables were plotted one against the other, with data from Chilean statistics for the last thirty-seven years, from 1960 to 1997. The result is quite a smooth curve, that starts down on the right in 1960, when agriculture occupied over 30 per cent of workers and per-capita Gross National Product (GNP) was under 4,000 US$. Only employed workers were considered for both ratios. The curve climbs up to the left, as the percentage of agricultural workers declines to 14.4 per cent in 1997 and per-capita GNP increases to a little over 7,500 US$ dollars. In both calculations, 1986 US$ dollars are used (seeGNP per capita vs. % Workforce Occupied in Agriculture chart, in appendix ).
Another graph was made of the same variables, only, this time, for a cross-section of countries, with data for 1991. In this case, Gross Domestic Product, purchasing power adjusted, was used. The result is, again, a curve that starts down on the right, with countries whose agricultural workers comprise sixty per cent of the workforce and whose per-capita GDP are under 2,000 US$. The curve climbs up to the left, as the agricultural proportion of the workforce falls to under 5 per cent and lower for the more advanced countries (seeGross Domestic Product - per Capita (purchasing parity) chart, in appendix).
In both graphs, if we leave to one side certain exceptions, the variables plotted make for rather smooth curves. The non-coincident points are, mostly, due to data errorsæ El Salvador, for example, a notoriously peasant country, appears with a rural population of less than 1 per centæ or discontinuities in the data series.
The Ever Resurgent and Always Frustrated Agents of Non-Dominated History
As has been argued throughout this article, Chilean economic performance during the last few decades seems to stem from deeper regions than a few IMF-preferred monetary, fiscal or tariff economic policies. The dynamic movements of all the countrys social actors in a rapidly changing scenario seem to constitute the indispensable context for all the upwardly moving macroeconomic indicators. The political economy of the whole process, though, has not been a lone actoræ the political turbulence of the period, Chiles own Age of Revolutions, has been the dramas author and director.
The main political actor, throughout most of the period, has not been the bourgeoisie, even though the creature resulting from the whole process has an undeniably bourgeois appearance. It is only recently that the Chilean bourgeoisie has taken political matters directly into its own hands. This occurred only after it had secured the leadership of the anti-dictatorship movement and had formed the post-Pinochet governments. Since then, it has occupied the whole political scene almost at the exclusion of all others. Before the bourgeoisie took over directly, the Chilean military played the role of post-revolutionary order and, in spite of its leaderships conservative leanings, it had no choice but to consolidate the main social transformationsæ in its own, brutal, way. Pinochets régime was probably the worst way to go through this transition, considering the suffering he imposed upon the mass of the Chilean people.
Many matters are clearly beyond the scope of this article and many others have simply been left outæ the generous imperialist tax paid by Chileans to the international banking community during these years, to name but one. A detailed account of the politics of the whole processæ the very way in which struggling forces actually shaped the whole processæ has also had to be excluded. Nevertheless, a brief sketch of Chilean political forces may prove helpful.
The country is governed today by the Concertación de Partidos por la Democracia, a centre-left coalition whose main components are President Eduardo Frei Ruiz-Tagles Partido Demócrata Cristiano (PDC), the Partido Socialista (PS) and the Partido por la Democracia (PPD)æ the party of the front-runner campaigning for the presidency, Ricardo Lagos. The PDC, Chiles christian democrats, was formed originally when the old Partido Conservadors youth organisation left the party in the late 1940s, and was first elected to government under President Eduardo Frei Montalva (1964-1970), the incumbents father. Patricio Aylwin, the first elected president (1990-1994) after Pinochet, also belongs to PDC. The last two parties gather forces that stem mainly from Salvador Allendes Partido Socialista, together with others that used to be part of the Partido Comunista (PC) and other smaller leftist groups such as MAPU and MIR.
Also part of the Concertación are the small remnants of once all-powerful Partido Radical (PR) and the even more venerable Partido Liberal (PL), two parties that dominated Chilean politics from the late nineteenth century. Of revolutionary, mid-nineteenth-century origins, and linked to the mining bourgeoisie, the centrist Partido Radical governed with Popular Front presidents Pedro Aguirre Cerda (1938-1941) and Juan Antonio Ríos (1941-1946), both remembered as progressive and important heads of state of the import substitution period. President Gabriel González Videla (1946-1952), also a member of the PR, was elected on a Popular Front ticket, vowing that there is no such force in the world that may ever turn me apart from glorious Partido Comunista, whose votes took him to victory in 1946. A few months later, announcing the imminent breakout of World War III, González Videla outlawed the Communist Party, and forced the poet and then Communist Senator Pablo Neruda into exile via a clandestine horse ride through the Andes. Immortalised as the traitor of Chile in Nerudas famed epic Canto General, González Videla became the archvillain of Chilean politics until Pinochet displaced him forever from that dubious pedestal in Chilean history. The PR maintained a lukewarm relation with the government of General Carlos Ibáñez (1952-1958), an ex-dictator (1926-1931) elected for a second term in a populist ticket in 1952. The PR again governed as a member of the rightist coalition that supported president Jorge Alessandri (1958-1964) to finally become a component of Salvador Allendes Unidad Popular (1970-1973) and a participant in the anti-Pinochet movements during the 1980s.
The Chilean political Right stems from the latifundia and church-related Partido Conservador. Partido Conservador governments consolidated the oligarchic Chilean state in the mid-nineteenth century. Following the Independence struggle (1810-1817), the dictatorship of London-educated General Bernardo OHiggins (1817-1924)æ El Padre de la Patria with whom Pinochet is fond of comparing himself (although OHiggins died in exile, in Peru)æ and the so-called Anarchy period (1924-1933), Conservadores were displaced by the Partido Liberal presidents Santa María (1881-1887) and José Manuel Balmaceda (1987-1991) who were linked with merchant and banking capitalists and nascent industrialists. Liberals separated the state from the church and made advances regarding education and public works, especially railroads. Balmaceda, a figure whom Allende likened himself to, took his own life after being overthrown by a revolutionæ funded and agitated by nitrate magnate Thomas North and the British Foreign Officeæ soon after he proposed nationalisation of nitrate mines. Conservadores and Liberales, by themselves or together, successively headed most government coalitions until mid-1960s, apart from the aforementioned interruptions of the Partido Radical and Ibáñez governments and a few short turbulent periods.
After the débâcle of the latifundia in the 1960s, with Chilean politics being centred around the question of agrarian reform, Conservadores and Liberales practically collapsed in the 1965 parliamentary elections, buried under a Christian Democrat landslide, followed by a strong showing by Socialists and Communists. Soon after that, the old rightist parties merged in the new Partido Nacional, led by nationalist Sergio Onofre Jarpa. The Partido Nacional signalled the refoundation of the Chilean Right, now clearly identified with the bourgeoisie, strongly committed to Friedmanite neoliberal economics pioneered by new Chicago Boys, already busy drafting their future government programme, and with strongly authoritarian, philo-fascist, politics. The Partido Nacional made a strong showing in 1970 presidential elections, where their candidate, former president Jorge Alessandri, came in a close second to Allende. The party headed the anti-Allende opposition and dissolved itself immediately after the coup, declaring its mission completed to its complete satisfaction. While the Partido Nacional reorganised the Right in the political arena in the late 1960s, the Movimiento Gremial, a rightist student movement, formed a solid ideological, programmatic and organisational core. Forged in the opposition to successful Reforma Universitaria leftist activism of the sixties, the Movimiento Gremial quickly consolidated itself in the social movement, mainly students, professionals and others such as independent bus or truck workers , maintained strong ties to Opus Dei and was led by Jaime Guzmán, a sort of local emulator of Spains Primo de Rivera. During the military dictatorship, rightist cadres, mainly from the Movimiento Gremial filled key posts in the government, particularly in the economic front, becoming world-renowned as the Chicago Boys.
After the military governments increasing isolationæ through economic crisis, popular protestas, increasingly serious Communist paramilitary activity and continuing international anti-Pinochet activismæ during the 1980s, rightist politicians gained more and more control over the governments key posts. The Partido Nacionals leader Sergio Onofre Jarpa was named Pinochets Minister of Interior in the midst of the worst protesta, in August 1984, when Santiago was in fact invaded by 15,000 troops, who killed over sixty people the very night Jarpa took over. Jarpa immediately opened negotiations with the democratic bourgeois opposition, then organised as the Alianza Democrática, ancestor of present Concertación, with strong backing from the powerful Chilean Catholic Church, European social democrats and christian democrats, as well as from the US State Department. In 1987, Jarpa, US Ambassador Harry Barnes, a visiting Pope John Paul II and, most effectively, a visiting US Army Chief of Staff, finally argued Pinochet into negotiating seriously with the opposition. They managed to do so, though, only after a violent protesta, supported solely by the Communist opposition, had paralysed the whole country for three days in June 1996. In September 1996, Pinochet miraculously escaped from an ambush. In August, the authorities discovered the largest arms smuggling operation ever attempted in Latin America. The Communist Frente Patriótico Manuel Rodríguez had staged both actions. The negotiations between Jarpa and the opposition eventually led to the 1988 plebiscite, the end of Pinochets government and the start of Transición in 1989.
Part of Allendes Socialist Party, the fraction headed by ex-ultra-leftist Carlos Altamirano, the partys secretary-general during the Allende Government, along with the Partido Radical, concurred with the Christian Democrats and moderate rightist groups in forming the Acuerdo Nacional. Another Socialist fraction, headed by Allendes foreign minister Clodomiro Almeyda, maintained its allegiance to Communist led Movimiento Democrático Popular during some time, but finally integrated into the rest of the party during the 1989 elections. Thus, the Concertación de Partidos por la Democracia was formed. The Right, for its part, organised itself into two political parties, the Renovación Nacional (RN), headed initially by Jarpa, and the Unión Demócrata Independiente (UDI), headed by Jaime Guzmán until a maverick Frente Manuel Rodríguez group assassinated him in 1990.
The Concertación and the rightist parties have dominated Chilean politics during the 1990s, winning over 50 per cent and around 30 per cent of the vote, respectively, in national elections held since (seeElection results 1989-1997 chart, in appendix). The leftist opposition to the Concertación governments, mainly communists and greens, get around 10 per cent of the vote, but have not been able to get any parliamentary representation under the present constitutions binominal electoral system, where only two candidates are elected in each district, thus favouring the right, who, with one third of the vote, gets half of the representatives in many districts. It is to be noted, though, that meanwhile the right has been consistently lowering its election results, from 2.9 million votes in 1989 down to 1.9 million votes in 1997, Concertación raised its votes from 3.1 million in 1989 up to a peak of 3.6 million votes in 1993 and then fell to 2.8 ,million votes in 1997. The leftist opposition, on its part, has consistently raised its votes from 309 thousand in 1989 up to 554 thousand votes in 1997. Overall voters, including null and blank votes, have fell consistently, from 7.1 million votes in 1989, down to 5.6 million in 1997, probably signalling people's growing disaffection with 'transición'.
The key points in the 1987 agreement between Jarpa and the bourgeois opposition were: Pinochets removal from office after the 1988 plebiscite; acceptance of the 1980 Constitution, inspired by Jaime Guzmán, which reserved veto power for the Right and the military; immunity for human rights violators; and, isolation of the Communist Party.
The Chilean Communist Party was formed in 1912 by pioneer labour organiser Luis Emilio Recabarren, a typesetter. Originally the Partido Obrero Socialista, it took the name Partido Comunista in 1924. Formed in the large concentrations of workers, mainly the nitrate mines in the north and coal mines in the centre and south, the Communist Party extended across the whole country as jobless miners returned to the countryside and flocked massively to Santiago when the 1930 crisis closed most of the mines. Even though Communist Party founders Luis Emilio Recabarren and Elias Lafferte were elected to parliament from the 1920s, and they were active in trade union organising, it was not until the popular front governments of the late 1930s and early 1940s that the Communist Party became a relevant national political force. Backing Allende from his first bid for the presidency in 1952, and then again in successive unsuccessful attempts in 1958 and 1964, the Communist Party grew steadily, becoming one of the countrys large political parties, winning 17 per cent of the vote and a proportionally large parliamentary representation in the late sixties. The Communist Party had a strong and growing presence in the social movement: it was the strongest force in the trade unions, where it headed CUT since the early sixties; it was the organising force in the wide homeless and housewives movements of the sixties; in the student movement, it headed Federación de Estudiantes de Chile, FECH, since 1968 and spearheaded the university reform agitation of the sixties; many of the countrys artists and intellectuals belonged to the partyæ no lesser figures than Pablo Neruda, Violeta Parra, Victor Jara and Inti Illimani; in the rapidly growing peasant movement, communists rivalled christian democrats as the main organising power. The longstanding communist demands of copper nationalisation and agrarian reform had gained wide national acceptance by the late sixties. The partys capacity for political alliances, and long-time association with Allendes Socialists, gave many communists initiatives a wide impact throughout the political spectrum. By 1969, the 300.000 strong Chilean Communist Party was rightfully considered one of the most important Western Communist Parties.
The formation of Unidad Popular in 1969 was mainly the work of Allende and the Communist Party. The leadership of Allendes Socialists, then headed by Altamirano, initially rejected the idea, favouring a Cuban-style revolution at the time. Allende, as is well known, won the 1970 election with 36 per cent of the vote, and Unidad Popular rose to 50 per cent per cent of the vote in 1971, with the Communists getting 18 per cent, hot on the heels of the Christian Democrats and Allendes Socialists, who got over 20 per cent. In the March 1973 national elections, Unidad Popular maintained 43 per cent of the electorate, and the Communists became the largest party in the alliance. It is widely recognised today that Allendes government could have perhaps enjoyed a better chance if the Communists relatively moderate politics and sober economics, together with their demand for a firm hand in keeping public order, had prevailed.
After the coup, although badly damaged by General Contreras murderous Dirección de Inteligencia Nacional, DINAæ by the end of 1975, two full Politburos, both of the party and its youth organisation, had been murdered by DINAæ the Communists were the only party able to maintain a national organisation and actively headed resistance to the Pinochets dictatorship. The Communists were the only political force that had a small degree of control over the mainly spontaneous series of protestas that erupted in May 1983, stimulated by the disastrous 1982 economic crisis. During this period, a paralysed Santiago, with all its main accesses and streets blocked by barricades, looked like a city under siege. Literally millions of people banged their pots and pans in the darkness, incited by the bombing by the communist Frente Patriótico Manuel Rodriguez of the national electricity power lines and sabotage by Rodriguista popular militia of local power lines, manning barricades and burning tyres all over the city. Meanwhile, the military patrolled the streets firing at random at the protesting crowds. With over 200 professionally trained military officers, many of them with battle experience in Nicaragua and El Salvador, the Frente Patriótico Manuel Rodríguez posed a potentially serious military threat to the dictatorship. The ambush of Pinochet and the arms smuggling episodeæ 5,000 M16s combat automatic rifles, mortars and LAW handheld rockets, all of them abandoned by US forces in Vietnam, were smuggled into Chile in a complex sea operation spotted by US satellitesæ demonstrated their operational capability. The Communists ability to single-handedly co-ordinate wide national protest actions has been referred to above.
However, the Communists strength conspired, in a sense, against the chance, feeble though it may have been, that the party could avoid being isolated in the late 1980s. Politically naïve and with a better knowledge of Nicaraguan politics than their own countrys, which they came to know too late and too superficially, many of the best cadres of Frente Patriótico Manuel Rodríguez broke away from the party and for a time pursued a radical political strategy that had tragic consequences for themselves. Confidence in its own strength and the influence of sectarian and rather unsophisticated policymaking in the partys upper echelons made the organisation slow to recognise a radical change in the situation after the 1997 agreement between Jarpa and the centrist opposition had been reached. The party continued trying to overthrow the dictatorship by revolutionary means a long time beyond the moment it had the chance of doing so. Meanwhile, the rest of the opposition increasingly adopted the path of the plebiscite, which the party itself had to finally accept a few weeks before it took place. In spite of later efforts to participate in the 1989 election, it could not avoid being isolated then and ever since.
Another important party in the Chilean left in this period has been Movimiento de Izquierda Revolucionaria, MIR. This party was born from student leaders of Universidad de Concepción in 1967, and adopted a Guevarist radical line back in the late sixties, even staging illegal direct actions against President Frei Montalvas government. During Allendes government, MIR maintained a radical opposition stance, and was active in the agrarian and pobladores movements. On the other hand, MIR cadres participated in Allendes personal guard, and MIR leaders maintained close political links with the Altamiranos Socialists. After the coup, DINA was specially harsh on MIR, and most of its leadership, including leaders Miguel Henríquez, who died fighting in an heroic gestureBautista von Schowen and Edgardo Henríquez, among many others, were killed during 1974 and 1975. During the 1980s , MIR worked closely with the communists in the resistance movement, and maintained this alliance until 1991, when it dissolved itself, and many of its cadres joined Partido Socialista.
So, finally, it is Allendes Socialist Party, reunited in 1990, and its alter ego, the Partido por la Democracia (PPD)æ created by present front-runner for the presidency Ricardo Lagosæ that has been the leftist party that has played the most important political role during the Transición. Formed by the students and military that overthrew the Ibáñez dictatorship back in 1931, the Socialist Party has rivalled the Communists both in terms of working-class influence and Marxist identity. Entangled with the figure of Salvador Allendeæ with whom, as has been noted, it always maintained a love-hate relationshipæ the Socialist Party was a part of the popular front governments of the late 1930s and 1940s. Divided in the early fifties, part of it formed a section of Ibáñezs populist second term, while Allende and the rest of the party started on the road to the presidency, in alliance with the Communists. This alliance was maintained until Allendes death. After the coup, part of the partys Politburo, headed by Carlos Lorca, was murdered by the DINA in 1974. In exile, the party divided into Altamirano and Almeyda factions, and reunited finally in 1990, now with a clearly social-democrat profile. As these lines are written, Socialist Ricardo Lagos has won overwhelmingly over Christian Democrat Andrés Zaldivar in the primaries for the Concertacións presidential candidate.
Thus, almost for sure, thirty years after Allendes election in 1970, another Socialist will become President of Chile, with ample popular support. He will govern a different country in a different world. No radical measures, such as agrarian reform or copper nationalisation seem necessary this time for the countrys continuing advance on the road to modernity and, instead of nationalising monopolies, Lagos will probably privatise those that are still left in state ownershipæ although certainly much could and should be done to stop renewed sacking of Chileans copper ground rent by transnationals. Lagos is at the same time a product of the Transicións past success and its present deep crisis. Ten years of the Transición a la Democracia are enough, and now the country needs simply democracia, with the chances people hope it will bring to establish rules based on justice, not impunity, and to improve their lot.
To achieve simple democracia it will be necessary to reunite the forces that managed to put an end to the dictatorship a decade ago, each putting up its own part, some more, some less, to get in return results that are not exactly proportionate to their efforts and sacrifices. But, for that reunification to be possible, those to the left of the Concertación will have to be able to put together a sizeable force amongst themselves, strong enough to make sure that the Concertación, with or without Lagos, will not be tempted, mired in its comfortable conformism, to once again postpone what is urgently needed to be done. A force on the Left is required which is strong enough to offer those at the Centre, who govern, the chance to secure majorities on crucial issues, such as taxation to alleviate income maldistribution, for example. Achieving full democracia is Lagoss main mandate. The next few years will test whether the man and the coalition he leads are up to that task, as Unidad Popular and Allende were up to theirs a quarter century ago.
A concluding words must be said with regard to the ordinary peopleæ those who precipitated the whole process this article deals with in a bold revolutionary way, back in the sixties and early seventies. The same people who constituted the main democratic resistance during the Pinochet years and, when the time came, rose up throughout the country and voted the General out of government. The ordinary people that, at this very moment, are beginning to take to the streets again, to complete a transition to democracy that has dragged on much longer than necessary.
As Recabarren put it in the citation at the beginning of this analysis, they have contributed everything to the process ... only for the fruits to be enjoyed by their adversaries.
As it is well-known, Chile remains in the top ten in terms of regressive income distributionæ sixth to be precise, according to World Bank, among all nations. Even though many people have jumped over the poverty line in recent years, about one in each five still falls beneath it. The overall income is split almost in half, the first of which goes to he upper 10 per cent of the population The remaining 90 per cent of the population has to content itself with the other half. Wages, adjusted for inflation, are still under the level obtained in 1972, under President Allende, although labour productivity has increased by 60 per cent in the same period (see Wages and Occupation chart, in appendix). The plight of all the peasants, women and workers affected by social transformations has been mentioned above.
All this is true and quite dramatic in many cases. The majority of Chileans feel it and have been expressing it lately in UN-sponsored surveys, where Chileans appear as the most critical towards their present condition amongst all Latin Americans, despite the countrys economic performance. But ordinary people have also received something from this process in which they have been such important actors. Chile is a remarkable narrow country, so narrow indeed that the majestic mount Aconcagua (Argentina, 7.000 metres high) can be admired in plain view from Valparaisos Pacific beaches on a clear day. Nevertheless, just a few decades ago, many of the Chileans who started this process had never had the chance to get to know the sea. All Chileans nowadays know what their sea looks like. At least.