Chile: the balanced view : a recopilation of articles about the Allende years and after

first year in office. A unanimous constitutional amendment passed the Chilean Congress in July. 1971, and the principal copper companies -El Teniente, Chuquicamata, El Salvador, La Exótica and Sociedad Minera Andina- became integral parts of the state-owned seg– ment. Through the appl ication of the so-called Allende doctri ne of retroactive taxation of excess profits, the take-over amounted to confiscation. The national ization -wh ich survived Allende's demise- will demonst~ate whether Chile has acquired, since the José Manuel Balmaceda years of the 1880s, the internal modernization capacity that will permit it to extract from the mining sector the fabulous quasi rents that European and American capitalists were able to create. Allende's term was, however, too shbrt to show whether Chile could internally augment production and appropriate the mining surplus without a new, more onerous, and possibly irrevocable dependence on the Soviet, Chinese or other socialist republics which, lacking such assistance from foreign or immigrant entrepre– neurs, have levels of income lower than Chile's. For many of Chile's intellectuals and politicians, nationalízation was but the final step of the long march that, through the War of the Pacific, led to annexation of the Bolivian and Peruvian North. During 1879-82, when the government conquered foreign land to protect its nitrate capitalists, Chilean ímperialism was supported by the strength of its arms. In 1970, Allende, aiming to correct the alleged injustices of the traditional oligarchy, completed the nationalization of nitrate by acquiring SOQUIM, the enterprise formed by merging Anglo Lautaro and Salitrera Victoria, and placing Alemania under state management. Fínally, the government-owned Pacific Steel Company acquired the iron mines ofthe Bethlehem Steel Company. Along with the purchase of the Santa Bárbara and Santa Fe companies, this move brought 95 percent of iron under government ownership, the remainder belonging to private Chilean interests. Once copper, nitrate and iron had been trasferred to state or Chilean prívate owners– híp, the desti ny of Chi le became inti mately Iinked with the productive capac ity of a coal ition between the central government and the mining sector. Now that the long-term, cyclically rebounding conflict is disappearing, it remains to be shown whether the new rules of the game will yield higher returns than did the previous pOlicies of laissez-faire, excessive discrimination, mixed foreign Chilean ownership and so forth. More than anywhere el se in the economy, Allende's Popular Unity successfully destro– yed foreign extractive capitalism. The question since 1971 -both to Allende until his death and to the military junta since then- has been whether this immense source of real capital can be placed at the service of all of Chi le's people, rather than exclusively benefiting the mining workers, the communist sector, a small segment of Santiago's urban bureaucratic elite and or the military. By May, 1972 -according to El Mercurio- some of the Chuquicamata miners who had so vociferously asked in the pastthe Gran Minería be saved from the "hands ofthe yanquis" were now demanding that it be saved from th'e "hands of the communists". BANKERS, LATIFUNDISTAS, INDUSTRIALISTS AND MERCHANTS WERE TARGETS FOR DESTRUCTION Allende's economic policies caused a sharp reduction of the income share of capi– tal-from 45.1 percent in 1970 to only 34.2 percent in 1971. The profit share includes rents (paid or imputed), interest rates; income of unincorporated enterprises and corporate profits. The class of capitalists before 1970 was remarkably heterogeneous. It included barrel organists, street photographers, newspaper sellers and kite makers as part of the unincorporated enterprises; giant foreign corporations and state enterprises; I)wners of dwellings; and those holding savings accounts at the multitude of banking institutions. Although Allende frequently attacked all forms of prívate capitalism, his actions during 41