Kalkışma

The Maturing and the Defeat of the Chilean Revolution (1964-1973) -a Political Economy Perspective

I. Introductory Remarks

The troublesome process through which the dispossessed masses attain political self-empowerment reveals the cracks and cleaveges within a given social formation and causes widespread dislocations in the specific framework in which normal politics had been practised, material resources allocated and social groups positioned in relation to one another. The volatile continuum of the relatively dispossessed’s self-empowerment, no matter how successful it becomes in attaining the goals envisaged, severely disrupts the social status quo in such a way that most often, if not always, it requires a certain violent counter-reformist rupture to supress the novel forms in which making politics has been formally or informally institutionalized[1]. The Chilean experience of the past century, tragically, provides no exception. The shy overtures performed by the hegemonic sectors of the Chilean bourgeoisie  from the early 1960s onwards towards the incorporation and simultaneous accomodation of politically and materially dispossessed masses into the confines of a redistributive reformism, constituted the political program of the overarching attempt to break free from the seemingly cyclical trends that had long been plaguing the Chilean economy -which, at the end was proven to produce nothing but perpetual stagnation; and to counter the growing influence of socialist tendencies among the urban working class. However, the process whose culmination is marked by the presidential term of Eduardo Frei (1964-70); when coupled with the unanticipated radicalization of their potential clients in the wake of widespread political disillusionment and further leftwards drift in terms of the general political atmosphere of the country, conditioned the upsurge of some degree of a militant class-consciousness especially both among the urban and the rural proletariat during the reign of the socialist alliance of Unidad Popular and its leader Salvador Allende between 1970 and 1973. The aborted term of President Allende proved to be a period of intensified class struggle and was marked by attempts to introduce certain novel forms of political participation and self-empowerment. At the same time, the period saw the gradually eroding internal cohesiveness of the socialist political alliance and bulk of the political representatives’ growing inability to cope with the unmanageably radicalized, revolutionized and intractable demands of their constituencies. The defeat of the Chilean Revolution, in fact, came much before the September Coup of 1973. Yet; it took one brutal military junta, a worldwide tide of neo-conservative economic policies and the ‘implosion’ of the socialist regimes throughout the globe to facilitate a break with the living memory of the revolutionary inroads into the heart of normal politics. Moreoever, the political economy of the Allende period, together with the unfolding of the liberal counter-revolutionary surge following it, shook and thoroughly transformed the foundations of the capitalist coalition that had constituted the essential pillars of the Chilean economic development path for about half a decade.

Signals sent out of the frequency range in which the UP’s three-year experiment is positioned, are apparently lost underneath its own ruins and have gone astray within the cloud of dust emaneting from the majestic downfall of the socialist/state capitalist world bloc -and the preceding ideological transformation of the bulk of the world communist movement. The tragedy of this historical experiment with a more egalitarian society lies, not only in the spiny contradictions that constituted the tension between the specific way in which some sectors composing the uneasy alliance of the UP believed in the gradual and peaceful manner the socialist transformation would be put in motion and the structural characteristics of the Chilean economy and social class formation; but also in the costs of and traumatic damage caused by the following sixteen years, under a ruthless military dictatorship.  If those lost signals are to be left aside -hopefully to be utilized as historical evidences within the framework of the seemingly dead terrain of further theoretical discussions on the nature of bourgeois democracies and the characteristics of the transitory economic formations; what is perhaps left to be done for an analyst gazing at the vast temporal terrain in between the maturing years of the Chilean revolution and its immediate aftermath are situated (spanning two decades; roughly from the mid-1960s to the last years of the Pinochet regime) would merely be giving a descriptive account of a chain of events. I shall however, in this short paper, attempt mainly at delineating the contours of the economic policies of the UP-regime and the consequent counter-revolution in a descriptive manner while simultaneously putting forward certain hypotheses on specific issues at hand, as a preliminary effort to form the base of a causal socio-economic framework concerning the period of maturation for the revolution. In order to explain policy directions, social responses and impulses, special emphasis would be put both on the relevant historical determinants that condition certain characteristics of the Chilean class structure and an array of macro-economic indicators.

II. The Historico-Structural Characteristics of the Chilean Bourgeoisie and the Historical Trajectory of Capitalist Development in Chile

Any endeavor aiming at unraveling the causal framework at work behind the specific physical-temporal setting we are dealing with, I believe, ought to address the compositional structure of the Chilean bourgeoisie in a historical-structural manner; mainly because it was this particular class and certain hegemonic segments of it that held eclipsing political and ideological dominance over other social strata and the state apparatus throughout the Chilean national history. It was through direct economic dominance and indirect politial-ideological hegemony that the Chilean bourgeois class steered the national economic development path and gave form to the general outline of the country’s institutionalized politics -even the consequent political mobilization and systematic inclusion of the peasant masses being at the disposal of this class as well[2]. Tracing the origins of compositional characteristics of the Chilean bourgeois corpus helps us to find clues regarding the question of Chilean democratic stability; why the Chilean path of inward-oriented industrialization failed to promote perpetual economic growth; how the reformist wave of the Frei era came about; reasons why UP failed to mobilize or neutralize segments of the bourgeoise in line with their theoretical understanding of the Chilean class structure; and whether the 1973 could really be considered as a political anomaly within the workings of a system that shows great flexibility and adaptability in times of “institutional transformation[3]”.

Although there is a wide consensus regarding the peculiarity of the Chilean case within the Latin American framework in terms of its relative sustained democratic stability up until the 1973 coup, few attempts had been made to explain this distinctive characteristic of Chilean politics in relation to the specific ways in which the development of capitalism took root in this particular setting. While much of the attempts at this direction focus on the strength and highly institutionalized  form of political participation and execution mechanisms, they often fall short in defining why and how this special form of institutionalization -which is revealed as the manifest center of the political equilibrium, came about. It is, at this point, useful to adopt a historical sociological approach and shortly define the characteristics of the Chilean bourgeois class -which bear the historical marks and scars of its initial stage of primitive accumulation, in order to pave the way for a better understanding of the events unfolded in the latter half of the 20th century.

Initial decades following the national independence of Chile in 1820s saw the intensification of financial and extractive capital formation, development of market-oriented interests in productive sectors, widespread adoption of wage labour and the further monetization of internal markets. Main ‘commanding’ pillars of the 19th century Chilean economy consisted of a traditional, latifundial agrarian oligarchy; mineral extractive industrialists; an ascending, export-oriented agrarian bourgeoisie and a financial bourgeois sector of wealthy merchants in tight control of the financing of all sorts of productive enterprises and mediating internal and international trade[4]. The latter half of the century was marked by the erosion of the traditionally autarkic latifundia towards the direction of export-oriented commercial agriculture and growing investments by large estate owners in the promising mining sector -thus the gradual bourgeoisification of these latifundistas. Accompanying this, “a depression from 1858 to 1860, caused a disastrous decline in agrarian land values, impoverished many members of the old order, and permitted the new rich to acquire land and, thereby, social prestige and acceptance[5]”. Due to considerable variatons in land values during the century, the wealthy merchants and mine owners were able to acquire extensive agricultural holdings[6]. By the end of the century, “Chile was governed by a dominant class configuration based on an alliance between the oligarchy of latifundistas and merchants and the mining and agricultural bourgeoisies of the north and the south[7]”. The tight intertwining of rural agricultural interests with urban commercial and mineral-extractive motivations came about, not only through the formation of corporate-type organizational structures with trans-sectoral economic interests but also with the establishment of marital/kinship bonds between landed/pseudo-aristocratic families and the urban rich to form ‘a cohesive core of upper class families[8]’. As in almost all parts of the globe in the latter half of the century in question; Chilean market, country’s mineral resources and non-value added products entered an unsettling and dislocating process of integration into the pervasive web of a globalizing flow of capital and commodities. Though showing an indisputably unsettling character regarding the masses of physically and economically dislocated producers, it could very well be argued that this particular path of transformation of traditional landed interests from along the lines of a pre-capitalist economic formation into an eventual merger with flourishing commercial motivations is a rather exceptional one. The political confrontations that ‘normally’ characterize the tension between traditional patterns of land ownership and bourgeoning urban interests, although not completely absent from the Chilean history, have rarely been intense enough to condition ruptures in the late-19th, early-20th century political formation of the country. The foundational stability of the Chilean bourgeois democracy, thus, could be traced as back as to the particular form the coalescence of urban and rural interests in the latter half of the 19th century took place.

The Great Depression shattered the conditions that held together the capitalist coalition that supported the liberal economic model and the international financial crash interrupted the flow of private capital to Chile, which had provided much of the foreign exchange needed for business, agriculture and the trading sector[9]. Thus; a crucial historical juncture that marked a new stage in the development of the country’s productive forces and one that drew the general outline of the subsequent re-alignment of national political actors came about with the growth of the inward-oriented Chilean industrial capitalism from 1930s-onwards[10] -whose formation was, perhaps, motivated more by a desire to maintain traditional consumption patterns of the better-off sectors of the Chilean class structure than strong ideological committments to a nationalist path of economic growth. Although the kernel of a native industrial capitalist class had existed in embryonic form in the late-19th century Chilean manufacture[11], the core of the newly emerging industrialist sector in the era following the 1929 Depression were, again, to be found in the traditional capitalist bloc of financial intermediaries and important segments of the agro-mining oligarchy. It was predominantly this hitherto dominant faction of Chilean capitalism that transformed itself into a native industrial oligarchy with the help of state subsidies from 1930s onwards[12].The agrarian-bourgeois, raw-material-exporting and import-mediating immediate descent of the new industrial capitalist class shows that, it was not a self-subsisting developmental process which brought about the birth of this new capitalist sector, but rather “a cyclical crack in the relations of dependence[13]” -i.e. ‘the Depression’, that revealed a national industrial path as a possible and feasible route of economic development and paved the way for the metamorphosis of traditional capitalists into an industrial bourgeois segment. The ‘traditional’ links of this new segment especially to the strictly agrarian interests and the continuity regarding the clannish formational character of it reveal much about the striking feature of Chilean mainstream politics as ‘a game of accomodationism[14]’, the reasons why and how “Chile’s social structure has maintained many dysfunctional traditional rigidities[15]” and the high degree of concentration in terms of the ownership of capital assets. Thus, “there was no great ‘industrial revolution’, no violent displacing of elites; the political system maintained a remarkably unchanged appearance, and social immobility remained the rule[16]”. The monopolistic tendencies of the Chilean industrial capital -that stemmed from the specific path the stage of primitive capital accumulation took and the high degree of ownership concentration in specific sectors of manufacturing, conditioned the relative functional tranquility, the structural rigidity of the compositional configuration of the Chilean bourgeoisie and the way in which the prospects for intersectoral conflict were discarded in most cases through the heavy concentration of the Chilean industry in sectors complementary in nature to the agrarian interests -the formation of heavy industries in the 1950s, such as iron and steel constituting certain exceptions to this pattern. The relatively smooth way in which a part of the Chilean social formation was transformed into an industrial one had its reflections in the mainstream political realm. Although the Communist and Socialist Parties of Chile, both being serious components of the political configuration, the scope of making nationwide politics was pretty much confined to a narrow spectrum of policy alternatives and intertwined heavily with the aims of getting bigger portions of ‘dwindling resources’ in a stagnating economy and maintaining the status quo regarding the periodical adjustments in resource re-allocation every once in a while, after gaining sufficient political-executive power. All in all, despite mass urbanization, considerable state-promoted industrialization and an established legacy of a nationwide political party system with a relatively strong institutionalized backbone; the closesly-knit webs of patronage and clientelistic relations continued to play decisive roles in defining the narrow and rigid contours of the ‘legitimate’ way of doing politics in Chile for decades.

Last but not least, the strong asymmetries that constituted the core of the relations between Chilean capitalism and central capitalist economies, more or less, predefined the scope of the Chilean economic development path and possibilities of inward-oriented industrialization, itself a direct product of historical fluctations in relations of dependence, to break the cycle of economic self-insufficiency and stagnation. In line with the traditional dilemma of ‘late-late’ consumer good-industrializers acting within the framework of the global market economy, the complete dependence of the Chilean manufacturing industry on capital and intermediary goods originating from center economies and the seemingly unbreakable ties of international patent agreements, contributed to the perpetuation of the links of dependence. As Feinberg rightly suggests, “the new composition of import needs (i.e. –capital and intermediary goods instead of manufactured consumer goods) left the Chilean economy yet more vulnerable to fluctuations in the balance of payments. Before, a decline in import capability meant less consumption; now, it translated into a broad and dangerous industrial slowdown, with all of its Keynesian multiplier, and politically disruptive effects[17]”.

1950s saw the reaching of limits of the import-substituting path of industrialized economic growth. The optimism of the preceding decade was, again, followed by symptoms of an acute crisis -stagnation, inflation and rising unemployment. The chronic cycle of recession following short waves of growth was intact, so it seemed -the external and internal variables conditioning the downturns in the national economy were as dominant as before. Heavy dependence on copper production for export earnings, mainly because of the unsophisticated way in which the distributional shares in exports were diversified since the Chilean manufactured goods were relatively incompetitive in international markets; coupled with the stagnating agricultural output in an unreformed sector (a thorough industrial revolution certainly required an accompanying agrarian reform in land ownership and production patterns) and the demographic limits of the Chilean national market predetermined the prospects of this particular experiment with inward-oriented development. The gradual shattering of the informal coalition between the land, capital and labor which was symbolized by centrist/populist administrations of the post-Depression era matured in this tumultuous decade. The rise of the socialist/Marxian left as an independent political force under the banner of Frente de Accion Popular in the ‘50s and the haunting ghost of socialism roving over the worn terrain of Chilean capitalism marked the leftwards shift in the national political atmosphere and the consequent growth of the Partido Democratica Christiana which had loose yet persuading left-inclined ideological undertones, from the mid-decade onwards were symptomatic of what was yet to come. The burden of reforming certain pillars on which Chilean capitalism rose, fell on the shoulders of PDC and president Frei, between 1964 and 1970. The bourgeois reformist interlude to put the disturbed route of capital accumulation on track, this time, came along with a package containing prospects of some structural transformations regarding a sector comprising a part of the traditional capitalist coalition. Yet, the uneasy alliance which was a diverse coalition of “urban dwellers, women, small farmers, middle class and big landowners[18]” that brought about the growth of PDC, would soon prove to bear disastrous consequences for the implementation of its program and conditioned an ultimate failure.

III. PDC, Eduardo Frei and the Bourgeois Reformist Interlude

Aside from the aforementioned growth of the constituencies of socialist left throughout the decade preceding the elections of 1964-65 appearing as a crucial warning sign for the propertied classes[19]; expansion of the electorate through the liberalization of registration processes and a specific amendment in the electoral law that prohibited joint-list participation -particularly aimed at curbing the rising power of FRAP[20], contributed significantly to the election of Eduardo Frei in the 1964 Presidential Elections[21] and the success of PDC concretized in its emergence as constituting a single-party majority after the 1965 Congressional Elections. Moreover, it would be helpful to contextualize the bourgeois reformist wave of the 1960s within the framework of the changing stance and policy transformation of the United States as symbolized by Kennedy administration’s ambitious Latin American foreign policy offensive under the name of ‘The Alliance for Progress’ from 1961-onwards. The proposed set of moves by the Alliance included the promotion of a “more equitable distribution of income, trade diversification, improved agricultural production, needed agrarian reform, elimination of adult illiteracy, low-cost housing, price stability in and the influx of $20 billion in external capital[22]” to South America. Indeed, a total of $1, 536 million direct US aid -loans and grants both included- between 1961 and 1970 made Chile, after Vietnam, the second-ranking country in per capita economic aid[23] and between 1964 and 1970, $200 to $300 million in short-term lines of credit was continuously available to Chile from private American banks[24]. In perfect harmony with the aims of the Alliance, calls for a much awaited agrarian reform, income-redistribution with a limited scope and promises for a growing share for public investments in the government budget constituted the main pillars of Frei/PDC-led wave of bourgeois reformism in Chile. All in all, the Frei/PDC program, in the wake of the Cuban Revolution, growing class consciousness on part of the urban and rural poor and in line with the long and short-term insterests[25] of national big business and trans-national foreign capital, appeared as the most radical and extensive reformist move the propertied classes of Chile could formulate. Through PDC’s policy route of further stimulating the entry of foreign capital and technology into the country, it could be argued, Chilean big and middle bourgeoisie, aware of the opportunities such intrusion of trans-national capital would provide themselves in an expanding economy, aimed at utilizing a prospective merger/integration with trans-national big business as a lever within the context of stagnating capital formation within a stagnating national economy and find out the possibilities to establish an optimum point of equilibrium with foreign capital regarding their cooperative operation on the terrain of this peripheral economy. Indeed, the possibilities of such coalscence and a relative shift in the concentration of big capital from traditional to mostly ‘virgin’ and dynamic sectors emerged as the most feasible path in order to induce economic growth in a country where periodic cycles of sectoral growths and booms fail to benefit the economy as a whole ever since the import-export-oriented era. To secure sustained growth, it was hoped, a limited resource-reallocative policy and the incorporation/accomodation of hitherto dispossessed peasant masses into national politics would accompany the process of invigoration of industrial growth through the levering force the entry of foreign capital into ‘promising’ sectors was expected to provide. Below, is a brief account of the developments regarding the relations of foreign and national capital during the Frei period, certain transformations in the sectoral distribution of foreign capital, aims and results of the initiation of the agrarian reform, a brief and rather descriptive account of the Chileanization of the Gran Mineria and some conclusionary remarks about the reformist interlude, supported by selected macro-economic data regarding the period between 1964 and 1970.

IIIa. A New Stage in Chilean Industrial Capitalism[26]

During the Frei era, Chile entered ‘a new stage of import substitution through the creation of new industries producing consumer durables[27]’ and a rapid expansion of the existing ones. Active state promotion in the manufacturing of durable goods, especially in the initial two years of Frei administration, resulted in the massive growth of this sector as shown by specific data: Between 1964 and 1969, the production of televisions showed an almost 15-fold increase while a tripling of output could be observed in the production of cars on the Chilean soil. Needless to say; accompanying this extension of the national capacity of manufacturing durables, the technological dependence of these newly expanding industries deepened considerably. Within the same period and very much in line with the new strategic orientations of the North American capital as made public by the Alliance at the dawn of the decade in question; the intrusion of foreign investments, -as opposed to the previous trend of their concentration in the raw-material extraction and import-trade sectors, this time mostly into the dynamic manufacturing sectors of metal and electrical products, machinery and transport equipments accelerated considerably. Of a total inflow of foreign capital of $1, 672 millon between 1954 and 1970, 87 per cent of this occured during the period of Frei administration. While in 1969, foreign capital owned about a fifth of the total capital stock in all industrial joint-stock companies, the foreign share in the aforementioned dynamic industries of metal, electricity, chemical production and rubber products reached the interval of 35 to 60 per cent. Moreover, ‘although foreign participation existed in only about one-quarter of all Chile’s industrial joint-stock companies, this quarter accounted for 59.5 per cent of all industrial share capital’. Here we not only observe the dominance and heavy hand of foreign capital in the Chilean economy, the disproportionate concentration patterns and the monopolistic nature of the Chilean industrial capital becomes evident as well. The pattern observed in the concentration of industrial capital, can clearly be seen in the case of financial capital as well. Banco de Chile alone, provided about 35 per cent of all private bank credits. Added to this, one might notice a similar tendency of concentration in the ways in which shareholding in individual corporations is distributed. In 59 per cent of the 271 dominant industrial corporations, the ten largest shareholders owned over 90 per cent of all share, and in 85 per cent of the cases their share surpassed 50 per cent. Finally, it ought to be noted that the clannic corporate structure of the business realm is, in fact, very much telling of and crucial regarding our understanding of the monopolistic nature of Chilean capitalism. De Vylder argues that at the turn of the decade in question, “the ‘commanding heights’ of the Chilean economy could be said to have been in the hands of about fifteen large economic groups which were present in every private industrial, financial and commercial activity of importance[28]”. The tight intertwining of trans-sectoral interests and their embodiment in a handful of corporations whose informal association and formal cooperation with one another could be regarded as constituting an oligarchic structure within national economy, would constitute the principal underlying cause of the organized and robust resistance against the far-reaching yet quite ambivalent expropriation process under the UP regime and perhaps of the fact that Chilean industrialization in historical trajectory did not cause significant ruptures in the sectoral composition of the economy up until the Frei era -since selective and state-promoted sectoral growth would in one way or another produce detrimental results for one productive component of the economy[29].

IIIb. The Land Reform and the ‘Chileanization’ of the Gran Mineria under PDC/Frei[30]

IIIb, i. The Land Reform

The agrarian issue, with all of the problems attached directly to matters of land ownership, political power in rural Chile and the stage of development of agrarian productive forces, constituted at the time when Eduardo Frei took office in 1964, perhaps the greatest burden on the Chilean economy and had long been occupying a rather anachronistic space within the country’s socio-economic formation which had, in fact, gone through a process of mass urbanization and accompanying industrialization. Although the hitherto unrestricted political power of the traditional landed oligarchy -despite its aforementioned bourgeoisfication and obscuring of its ‘essentially landed’ interests- had been in constant erosion and the notion of a “social function of property” which involved ‘obligations as well as rights[31]’ assumed legal rationalization by constitutional approval from the 1920s onwards; an agrarian reform that would take on the issues of huge discrepancies in land ownership patterns, low productivity despite assumably rich potentials and concomitant social ills regarding education and health, was not materialized despite ‘common’ acknowledgement of the problems’ graveness.

Some quantitative data regarding the characteristics of the land tenure and production patterns up until the mid 1960s, though seemingly frozen in time and rather inhumane, would certainly help us grasp the essence of the agrarian problem. By 1966, “out of a total of 345,000 rural families involved in agricultural work, 185,000 owned no land whatsoever. The remaining 160,000 families owned -many without a secure title- 150,959 farm units of which 77,5 per cent represented only 4,9 per cent of the total agricultural land in Chile. At the other extreme, a sheer 3,250 units, or 2,2 per cent of the total, each over a thousand hectars, represented 66,8 per cent of the total agricultural land[32]”. The concentration of about 80 per cent of the land in 7,5 per cent of the properties, left an estimated number of 500,000 peasants without any viable land holdings[33]. Over the terrain these data provide, we could situate the cornerstones of the land regime: At one extreme, one could find the large and commercially-oriented landed estates (latifundios) owned by landed/bougeoisfied oligarchs and worked either by resident farmers (inquilinos[34]) alone -who had rights to a plot of land for their own use and a house on it- or with the help of temporary/migratory day laborers (afuerinos) -whose real wages fell by 23 per cent between 1953 and 1964[35]– that supplemented the labor of the permanent workforce. At the other end of the land tenure stood the ocean of small holdings/subsistence farms (minifundios) whose cultivators, despite the superexploitation of these small parcels -“although covering less then one per cent of Chile’s arable land, produced four per cent of total output[36]”, most often joined the ranks of rural wage laborers to reach subsistence levels -while the ‘middle peasant’ who is able to market his surplus, as in the traditional European sense, amounted to no more than 15 per cent of the whole peasantry. In contrast to the overexploitation of minifundios, large estates were generally, rather under-utilized -a problem that contributed significantly to the decreasing agricultural self-sufficiency of the country from the 1930s onwards. While the total agricultural output rose by two per cent annually between 1939 and 1965, population grew 2.26 per cent per annum -equivalent to a decline in ‘agricultural production per capita’ at an annual rate of 0.4[37]. While the state-promoted industrialization move led and fed further and rapid urbanization, the stagnanting course of the growth of overall agricultural production gave way to a steady rise in agricultural imports -in a country which was, up until the end of the 1940s a net exporter of foodstuffs. “While in 1939 there was a favorable balance in the value of agricultural exports and imports -$24 million vs. $11 million-, by 1964 Chile was exporting only $39 million of agricultural products and agricultural imports had ballooned to $159 million[38]”. Last but not least; although some 60 per cent of the arable land in the Chilean central valley changed hands between the 1925 and 1960, ‘the new landowners, primarily from the middle class, emulated the inefficient, absentee ownership patterns of the old landowning aristocracy and often productivity of the lands they acquired declined[39]’.

In 1962, just one year after US President Kennedy declared the goals of the Alliance for Progress -calling for a series of agrarian reforms throughout South America, an Agrarian Reform Law was enacted by the Chilean Congress which would lay the foundations of two state agencies, Corporacion de Reforma Agraria (CORA) and the Instituto de Desarrollo Agropecurio (INDAP) that were to be responsible for land expropriatons and supervision of agricultural credits under the umbrella of the Ministry of Agriculture. However, since the law stipulated the payment of compensation which would be equal to the exact value of the land in question to landowners in cash and at once; it, and the overall scheme of reform which was envisaged did not have any meaning in reality -the Alessandri government in charge, neither had the will nor the political power to materialize a full-fledged reform in the agrarian sector. Frei and PDC’s electoral campaigns in 1964-65 were thus, harshly critical of the way in which land reform was implemented during the Alessandri era and promoted the ‘radicalization’ of it that would bring about a genuine  transformation in land ownership patterns. Important segments of the Chilean peasantry would be, according to the plan, incorporated into the diverse coalition that held up the Christan Democrats through means of land distribution and activation/promotion on agrarian unionization.  Yet, it ought to be noted that the specific focus of Frei’s reform scheme, in contrast to the priorities of the UP era agrarian reform, embraced a ‘developmentalist’ discourse regarding the rural problem -rather than stressing the issue of ‘power relations’ in the Chilean countryside. For Frei/PDC, at the core of the agrarian problem lay the stagnating agrarian output which itself, stemmed from the way in which overall discrepancies in land ownership patterns hinder the possibilities of a rationally-organized agricultural production. The issue of ‘who owned and cultivated the land’ was important, insofar the reforms in the ‘would-be-preserved’ property regime on land and an accompanying political mobilization of hitherto dispropertied masses would not clash with the productionist priorities of the regime. The material and ideological immunity of private property would thus be preserved to the extent to which the land in question meet the requirements brought about by the concept of the ‘social function of ownership’.

Up until 1967, when an amendment in the Agrarian Reform Law of 1962 removed the material limitations on prospective expropriations through permitting compensations to be paid over a period of thirty years and a new Law on Agrarian Unionization was promulagated, the PDC/Frei administration maneuvered within the confines of the old legislation. The period between 1967 and 1970 would see massive political mobilization on part of the rural workforce -tenant farmers, temporary workers and small landholders-, initiation of expropriations and the establishment of a distinct regime of land-labor administration on the rural level. However, although the period of 1967-1970 could rightly be considered both as politically and in terms of the actual material dislocation regarding the patterns of land ownership as the most active temporal interval the Chilean countryside had gone through up to that date; when compared to the inital ambitions of the Christian Democrat administration and to the wave of expropriations/seizures of land and peasant mobilization experienced during the consequent UP era -which will be discussed later, both the process of reforming the sector itself and the results fell considerably short of the expectations. The aim of redistributing land to a hundred thousand peasant families could not be realized and the share of the actually reformed sector in terms of hectares did not meet the initially envisaged figures.

The 1967 Law stipulated the expropriaton of all rural properties larger than 80 hectares -regardless of the operational efficiency. And ‘excess size’ along with the voluntary transfers of rights on the land from landowners to the state agency of CORA (when faced with the threat of expropriation, landowners tended in some cases to transfer their land into state ownership voluntarily to get better terms) constituted, according to available data[40], the main cause of expropriation -around 70 per cent of all expropriations. Yet; two additional clauses regulating the details of land takeovers and post-expropriaton administration of the reformed sector, established certain restraints on this seemingly ‘radical’ plan of transforming the basics of the land tenure and these two, again, remind us that a substantial agrarian reform that goes beyond the basic stipulations put forward regarding the distribution of land, requires an accompanying and radical political vision that could be sustained through perpetual popular support from below. One of those clauses concerned the big landowners whose landed property would be effected by expropriations due to their excess size. It granted, a basic ‘reserve right’ of land that ranged from 80 to 320 hectares to the landowner -thus, could be considered as an attempt by the PDC/Frei not to alienate the big landowning sector further. The second clause was related to the new land-labor administrative apparatus which would be put into effect after the concerned expropriation on the land in question. According to the law, an immediate redistribution of land among peasants would not take place and instead, an intermediary asentamiento stage, installed as a ‘transitional’ system of land administration would be established -designed to run for three to five years until the final/actual stage of distribution. During the interval, the ownership of the expropriated estate would belong to the CORA but the estate be run and managed by a committee of asentados. The crucial problem here was that, these asentados “consisted almost exclusively of inquilinos who ‘belonged’ to the expropriated estate by virtue of their living on the fundo in question[41]”, in contrast to the temporary workers who also tilled the land but had now, as it was in the past, absolutely no right on the administration of the plot they cultivated. “The permanent laborers on expropriated estates, and a few others who recieved land, obtained welfare, employment and income. But the more than two-thirds of the campesinos who are minifundistas or unattached landless laborers had no prospects of benefiting from the reform, and many became even worse off as a result.[42]” The result was, perhaps, similiar to a form of kulakization of a part of the peasantry while, aside from an adjustment that equaled the minimum wage of an agricultural laborer to its industrial counterpart, almost nothing was done toward a substantial integration of the bulk of the Chilean peasantry into the management of the land they worked on. It could be argued that, this sort of a reform implementation with strong selective and discriminatory aspects, contributed to the polarization of the Chilean countryside and the eventual disillusionment of the landless masses from the Christian Democrat reforms. Also the paternalistic attitude of CORA regarding the planning of agricultural production and estate administration, even, aggravated the traditional dependent position of the peasantry vis-a-vis the state in certain respects.

Also, a few words remain to be said about the elimination of the legal floodgates which had been facing the prospects of peasant political mobilization ever since, their formation, under the influence of the landowning oligarchy[43] and bound by the necessities of an industialization move, was prohibited in the late-1930s. Indeed, between the period encompassing the promulgation of the Law on Agrarian Unionization in 1967 and the election of Salvador Allende in 1970, the Chilean countryside saw a wave of immense political activity of peasant masses under the umbrella of newly-established trade unions. Whereas in 1964, “there were 18 legal peasant unions with about 1,800 members, by the end of the Frei administration 488 peasant unions with 140,293 members (around a third of all Chilean agrarian workers) had achieved legal status[44]”. By 1970, the Christian Democrat-led peasant unions contained about 67,5 per cent of all unionized peasants whereas the left-wing oriented confederation Ranquil controlled 31,3 per cent[45] -though it might be claimed that a leftwards shift in terms of peasant mobilization was already underway as frustration with the PDC reforms grew worse. Added to legal agrarian trade unions, small cooperatives of landless peasants which served mainly as educational centers and virtually non-existent prior to the Frei era, ‘absorbed another 100,000 members, mainly minifundistas and small tenant farmers[46]’.

To summarize; the structural deficiences and flaws in the legislative framework, when combined with the rather slow progress of the implementation of expropriatons partly due to the landowners’ legal resistance and partly to certain institutional insufficiencies[47], resulted with a ‘crippled’ land reform; not even able to achieve its humble goals. By July 1970, only 20-30,000 families -out of the 100,000 planned were resettled in 910 asentamientos[48]. At the end, there was modest growth regarding the agricultural production -when the 1965 output is taken as 100 at base value, the production figures reached 114,7 by 1970[49]. One reason, it could be argued, why the production levels did not fall -as in most cases of land reforms, was that there was no accompanying social revolution which would cause widespread dislocations and ruptures in the way in which productive forces are organized. Yet, it might also be said that the reason why the Christian Democrat reform did not result with a much more impressive output growth was that the reform did not touch upon the issue of the seizure/de-capitalization of the movable capital belonging to the landowner -“leaving the latifundista free to “sell all existing capital, including the stock of animals or to transfer it to their own reservas[50]”. All in all, the reformist interlude of the PDC/Frei era left the countryside, this time with its means of political mobilization available and in terms of class struggle, even more polarized than before; yet leaving the subsequent UP administration a legal framework in which further radicalization of the land reform could take place.

IIIb, ii. The ‘Chileanization’ of the Gran Mineria

The only component of the PDC/Frei economic program that, at least for some observers of the era, might have had the possibility of upseting the interests of US-capital in the country, was the proposed ‘Chileanization’ of the copper mines of Gran Mineria -owned by Kennecott and Anaconda corporations and whose output amounted to 85-90 per cent of total copper production of Chile. The proposal of Chileanization could very well be explained by the populist rhetoric embedded in PDC’s reformist strategy and the growing consensus from the 1950s onwards on the conflicting way in which the mines had been operating to the Chilean national economic interests. Indeed, simple factual data show that, in spite of the steadily growing share of copper in the country’s export earnings, the mines’ share in the state’s tax revenues had been in gradual decline since the beginning of the 1950s and the price policies of Kennecott and Anaconda had seriously been disturbing the national interests of the Chilean economy. The prices paid for Gran Mineria-originated copper were consistently much less to its counterparts in the world copper market as a result of the “peculiar arrangement according to which prices were set by the government of the United States -until the mid-fifties the main buyer of Chile’s copper- through negotiations with the large copper producers in the United states and abroad[51]”. Finally, another factor that contributed to the popular negative sentiment against the US-ownership in Gran Mineria could also be found in Chile’s decreasing share in the expanding world copper market despite her possessing some 30 per cent of total world copper reserves; mainly because of the reluctancy of Kennecott and Anaconda to invest further in their mines in proportion to their rising profit shares. Yet; it might be argued that the national and international political forces and certain important segments of the Chilean bourgeoisie/trans-national capital that formed, brought about and contributed to the rise of the Christian Democrats did, indeed, constitute the main structural obstacle in front of a plan that would provide a radical nationalization regarding the most important export revenue of the Chilean state. As hinted by the term of ‘Chileanization’ as opposed to ‘nationalization’ -with all of its strong ideological load, the Frei government put particular emphasis on the goal of rising productivity through increased governmental participation in the administration of Gran Mineria, gave priority to the matter of ‘raising investment and output’ and did not, in any way, plan to fully nationalize the mines.

As for the aggrements; in 1967, 51 per cent of the shares of the Kennecott-owned el Teniente mine were purchased by the Chilean state in return for a $160 million compensation. The price to be paid by the state, apparently, came quite as a ‘shock’ for some -since “the book value of the Braden corporation -that owned the mine, in 1967 was no more than $72,5 million[52]”. Moreover, in order to stimulate output, taxation from Kennecott was heavily reduced. As a result; despite the fact that Chile now owned a majority interest, her total revenue from pre-tax profits, quite ‘ridiculuosly’, declined. Regarding the agreements made with Anaconda; more or less the same things could be said, despite changes in figures. Faced with fierce resistance on part of the Anaconda, the Frei administration only managed to work out a deal with the corporation in June 1969 which stipulated the state’s acquirement of the 51 per cent of the shares belonging to the three mines in the Gran Mineria region operated by Anaconda. In return, comprensation was set at $175 million. However, the deal could not be realized until the end of the Frei era and the task of fully nationalizing the copper mines fell on the UP government in 1970. Overall, the PDC government’s copper nationalization program, in sharp contrast to the culmination of a decades-long of expectations, ended financially in utmost failure for the Chilean state. Only 70 per cent of the total output projections for the year 1970 were met while the total output from Gran Mineria increased only seven thousand metric tons during the six years of Frei administration -from 528 thousand in 1964 to 535 thousand in 1970.


[1] While obvious instances of counter-reformist responses to the political mobilization of the formerly dispossessed include, among many, the anti-communist repression carried out by sectors of the state apparatii throughout the world, an interesting and symbolic example of supression of ultra-leftism in socialist regimes would perhaps be the case of the 1921 Kronstadt Rebellion and the shift away from the slogan of “All power to the Soviets”. The attitude of the moderate elements in the Unidad Popular towards the illegal and spontaneous worker takeovers of some industrial plants also presents us a curious case of pursuing realpolitik in the wake of ‘uncontrolled’ mass mobilization.

[2] Patricio Silva, “The State and Peasant Unions in Chile,” Journal of Lation American Studies 20, no.2 (1988)

[3] Peter A. Goldberg, “The Politics of the Allende Overthrow in Chile,” Political Science Quarterly 90, no.1 (1975): 96

[4] This dominant class composition is actually what Claudio Veliz calls ‘the three-legged table’. Quoting from Veliz and Thomas Wright: “…the political hegemony of groups based in mining, agriculture and commerce -the three legs of the national economic table- ensured a pattern of outward-directed growth within a framework of free trade. Given the dependence of fledgling industry on tariff protection, the dominance of the ‘export-import coalition’ precluded successful industrialization and thus retarted development before 1930.” -Thomas C. Wright, “Agriculture and Protectionism in Chile, 1880-1930,” Journal of Latin American Studies 7, no.1 (1975): 45-  Although there is much criticism regarding the alleged oversimplification and misjudgments caused by ‘firm-intersectoral-alliance’-type of an account of the 19th century Chilean class formation; what is more important for our purposes is to dig through the junctures connecting the commanding pillars of 19th century Chilean capitalism (over whose components, there is wide agreement) and national politics. As long as the nature and specific development paths of these components do not give way to certain drastic transformations in political-economic orientations in question (for example, an instance of inter-sectoral conflict in  interests that would cause large scale political and economic re-orientation; such as a protectionist attitude regarding the national manufacture leading to the erosion of traditional financial intermediaries in import-oligarchies), it would be fair to argue that the so-called oligarchic ‘solidarity’ was strong enough to prevent a manipulation of the national economic development path.

[5] Fredrick B. Pike, “Aspects of Class Relations in Chile, 1850-1960,” The Hispanic American Historical Review 43, no.1 (1963): 15

[6] Charles G. Pregger-Roman, “The Origin and Development of the Bourgeoisie in Nineteenth-Century Chile,” Latin American Perspectives 10, no.2/3 (1983): 47

[7] Pregger-Roman, Ibid., p. 46

[8] Richard E. Ratcliff, “Capitalists in Crisis: The Chilean Upper Class and the September 11 Coup,” Latin American Perspectives 1, no.2 (1974): 84

[9] Eduardo Silva, The State & Capital in Chile -Business Elites, Technocrats and Market Economics (Boulder, CO: Oxford: Westview Press, 1996), 32

[10] “The first industrial census in Chile was taken in 1927 and it reported the existence of 97,832 workers. Almost 40 percent of these, however, were one-man shops and about 75 percent employed fewer than five workers.” – Stanley M. Davis, “The Politics of Organizational Underdevelopment: Chile,” Indutstrial and Labor Relations Review 24, no.1 (1970): 73. -The census, thus shows that only a tiny fraction of the country’s labour force was working in the industrial sector prior to the industrialization move from 1930s onwards.

[11] The presidency of Jose Manuel Balmaceda between 1886 and 1891 was marked by economically nationalist-protectionist policies; -arguably, aimed at planting the seeds of a national industrial capitalist class and the expansion of the country’s manufacturing capability. Yet, the nine-month long civil war in 1891 culminated in Balmaceda’s defeat -and the victory of the united, export-oriented capitalist bloc.

[12] Hugo Calderon, “Şili Burjuvazisinin Sınıfsal Yapısındaki Değişiklikler (1970-1980),” in Friedman Modeli Kıskacında Şili (1973-1981), ed. Hugo Calderon, Jaime Ensignia and Eugenio Rivera (İstanbul: Belge Yayınları, 1982), 18

[13] Calderon, Ibid., p. 19

[14] Robert L. Ayres, “Economic Stagnation and the Emergence of the Political Ideology of Chilean Underdevelopment,” World Politics 25, no.1 (1972): 55

[15] Stanley M. Davis, Ibid., p. 75

[16] Richard E. Feinberg, “Dependency and the Defeat of Allende,” Latin American Perspectves 1, no.2 (1974): 31

[17] Feinberg, Ibid., p. 32

[18] James Petras, “After the Chilean Presidential Election: Reform or Stagnation?,” Journal of Inter-American Studies 7, no.3 (1965): 380  -“…a multiclass coalition of urban middle class political independents, better paid and highly urbanized workers living in close proximity to the middle sectors, tenant farmers who are isolated from outside contact and still subject to the social pressure of the landowners, and farmers of middle-sized holdings.”

[19] The foresightedness of Petras, writing in 1965 is striking. He argues that Frei’s ‘prospective’ failure to achieve some concrete measures toward improvement of living standards among the impoverished lower class and toward the control of the inflationary spiral would, indeed, cause those whose expectations have been aroused to turn elsewhere. He goes on to argue, correctly, that under such circumstances, the prospect for a socialist victory might conceivably increase and even considers Frei as ‘the last hope of liberal-capitalism’. – Petras, Ibid., p. 382

[20] Orville G. Cope, “The 1965 Congressional Election in Chile: An Analysis,” Journal of Inter-American Studies 10, no.2 (1968): 275

[21] To concretize the sense of absolute threat among propertied classes, it would be worthwile to note that Frei was the sole competing candidate against Frapistas, backed even by the large-landowning class despite his explicit references to a reform in the agrarian sector.

[22] Albert L. Michaels, “The Alliance for Progress and Chile’s ‘Revolution in Liberty’ 1964-1970,” Journal of Interamerican Studies and World Affairs 18, no. 1 (1976): 75

[23] Miles D. Wolpin, Cuban Foreign Policy and Chilean Politics (Lexington, MA: Heath Lexington Books, 1972), 71

[24] Joseph L. Nogee and John W. Sloan, “Allende’s Chile and the Soviet Union: A Policy Lesson for Latin American Nations Seeking Autonomy,” Journal of Interamerican Studies and World Affairs 21, no.3 (1979): 346

[25] While long-term interests of the national/international capital would include the undermining, weakening and eventual neutralization of socialist sentiments among the masses, the basic short-term interest would be the materialization of agrarian reform in order to stimulate agricultural production for urban needs and to expand the consumer market; and reducing rural poverty and possibilities of rural proletarians to align with the left through land distribution and eventual kulakization.

[26] In this subsection, all of the quantitative data regarding output, entry of foreign capital, sectoral and ownership concentration will be taken from: Stefan de Vylder, Allende’s Chile -The Political Economy of the rise and fall of the Unidad Popular (Cambridge: Cambridge University Press, 2009), 14-21

[27] de Vylder, Ibid., p. 20-21

[28] de Vylder, Ibid., p. 18

[29] Quite related to the issue of trans-sectoral corporate structures; in an intersting study on the relationship between the internal differentiation of the dominant class into various segments and the ways in which political hegemony exercised; Zeitlin, Neuman and Ratcliff investigates the specific state of how the struggle and following accomodation between landed interests and the bourgeoisie reached a state of co-existant symbiosis in Chile through the survey of how frequent is it for a political officeholder to come from a background that includes both being a corporate executive and at the same time a big landowner. The high frequency observed in the findings is striking. See; Maurice Zeitlin, W. Lawrence Neuman and Richard Earl Ratcliff, “Class Segments: Agrarian Property and Political Leadership in the Capitalist Class of Chile,” American Sociological Review 41, no.6 (1976)

[30] In this subsection, all of the quantitative data regarding the agreements between the Chilean state and US corporations, copper outputs and related state revenues will be taken from de Vylder, Allende’s Chile -The Political Economy of the rise and fall of the Unidad Popular, p.121-125

[31] Joseph R. Thome, “Expropriation in Chile under the Frei Agrarian Reform,” The American Journal of Comparitive Law 19, no.3 (1971): 493

[32] Thome, Ibid., p. 489

[33] Peter Winn and Cristobal Kay, “Agrarian Reform and Rural Revolution in Allende’s Chile, Journal of Latin American Studies 6, no.1 (1974): 135

[34] Defining Chilean inquilinos with reference to the ‘familiar’ terminology utilized to describe certain dominant patterns observed in the ‘classical’ European peasantry is a tough task. These peasants, unlike the traditional ‘middle peasantry’ of, say, eighteenth century Britain, did not own the land they lived and worked on -yet quite like the typical middle peasant, in certain cases, had the ability to produce for the market. However, even their rights of possession and on working the land were somehow precarious and mostly dependent on the personal relationship they had with the actual landowner. Lastly, and something that made inquilinos also somewhat similar to the agricultural proletarians; they, aside from their right on tilling the land, receieved wages in return for their work on the estate owner’s private land. Whether their ‘in-betweenness’ makes inquilinos or rather the ‘traditional’ European middle peasantry on a grand scale unique, is one of those questions that causes a sense of disorientation very much useful in the long run -thus, a positive confusion.

[35] de Vylder, Ibid., p. 167

[36] de Vylder, Ibid., p. 169

[37] Oficina de Planificacion Agricola (ODEPA), Plan de Desarollo Agropecuario 1965-80, vol. 1, 1-2

[38] Thome, Ibid., p. 490

[39] Pike, Ibid., p. 26

[40] Thome, Ibid., p. 506

[41] de Vylder, Ibid., p. 172

[42] Solon Barraclough, “Agrarian Reform and Structural Change in Latin America: The Chilean Case,” Journal of Development Studies 8, no.2 (1972): 168

[43] Simon Collier and William F. Sater, A History of Chile 1808-2002 (New York: Cambridge University Press, 2004), 267

[44] Cristobal Kay, “Agrarian Reform and the Class Struggle in Chile” Latin American Perspectives 5, no.3 (1978): 125

[45] P. Silva, Ibid., p. 436

[46] de Vylder, Ibid., p. 175

[47]A wide array of legal means were available for affected landowners to slow down or put off expropriatons. The agricultural tribunals, established initially to get around of the slow and ineffective regular courts, rarely functioned in a hoped-for manner. Quick trials were not possible and some trials even took several months or years. Moreover, there were institutional inabilities that caused serious delays in the establishment of the asentamiento regime. According to data gathered, out of the 220 cases of land takeovers between July 1967 and October 1968, in only 19 of them were asentamientos properly organized whereas for the rest, the regime was no established at all. -Peter Winn and Cristobal Kay, Ibid., p. 508-511

[48] Thome, Ibid., p. 513

[49] de Vylder, Ibid., p. 242

[50] de Vylder, Ibid., p. 173

[51] de Vylder, Ibid., p. 118

[52] de Vylder, Ibid., p. 122

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