A CASE OF DEPENDENT CAPITALIST DEVELOPMENT. Chile 1970. Notes
When Allende became President ( 4 November 1970 ), Chile was for
the most part a developing capitalist country, but dependent on U.S.
transnational capital. To get an idea of the structure of Chilean
society at that time, let's look at some statistics taken from
"National Accounts of Chile 1967-68" (Cuentas Nacionales), ODEPLAN,
DISTRIBUTION OF EXPENDITURES IN THE NATIONAL ECONOMY
Agriculture, forestry and fishing 10.5 percent
Mines 9.7 percent
Manufacturing 25.7 percent
Construction 4.5 percent
Electricity, gas, and water 1.7 percent
Transportation, warehousing, and
communications 4.4 percent
Wholesale and retail commerce 21.6 percent
Other services 21.9 percent
PERCENTAGE DISTRIBUTION OF THE WORK FORCE
Agriculture, forestry and fishing 25.5 percent
Mining 3.0 percent
Manufacturing 21.6 percent
Construction 6.2 percent
Electricity, gas, and water 0.8 percent
Transportation, warehousing, and
communications 6.3 percent
Commerce and services 36.5 percent
The same accounts showed that 50 percent of the work force was
labourers and 1.4 percent employers. This gives an idea of why the
combative strength of the workers in Chile was so great and was
able to push such movements as the Unidad Popular ( Popular Unity)
forward. Its fighting capacity was tragically set in motion in 1907
when the slatpeper works went on strike, to be suppressed by the
government through the Army's slaughter of 3,000 workers in the
Santa Maria de Iquique schoolhouse.
The 1.4 percent of the work force comprising the employers and
bondholders was organized into guilds in the Sociedad de Fomento
Fabril, the Sociedad Nacional de Agricultura, and the Confederacion
de la Produccion y el Comercio, through which they had always
controlled the Chilean government.
The degree of concentration of economic power in this 1.4 percent
is revealed by the following facts, from the same source:
17 per cent of the stock companies possessed 78 percent of the
total assets of the stocks companies;
in those dominant companies, the ten biggest shareholders owned
more than 90 per cent of the stocks in almost 60 percent of those
companies. It was there that eleven 'oligarchic clans' were
concentrated, consisting of no more than 1,000 adults, for whom
1,500,000 labourers worked.
This oligarchy was closely related to major American capital. The
facts show this:
AMERICAN CONTROL OF CHILEAN INDUSTRY (PERCENTAGE OF TOTAL)
Machinery and equipment 50 percent
Iron, steel and metal products 60 percent
Rubber products 45 percent
Automotive assembly 100 percent
Radio and television 95 percent
Office equipment 95 percent
Copper fabricating 100 percent
Tobacco 100 percent
Advertising 90 percent
To this data should be added the power of Anaconda, Kennecot, and
ITT, in copper and telephones, which was translated into enormous
economic and political power within the chilean ruling elites and
their political parties ( Dale Johnson, ed., "The Chilean Road
to Socialism", New York, Doubleday Anchor, 1973, p. 13)
Combining this situation with the state's foreign debt and private
Chilean companies having North American organization, the outlay for
technology, and the dependency of the country's armed forces on the
U.S. Army should give an idea of what is meant by classifying Chile
as "a capitalist country dependent on imperialism".
After 1907, the organization of workers and peasants began actions
to obtain legal recognition, which was achieved in 1953, when the
Central Unica de Trabajadores was formed. In 1972 the Central Unica
had a million members, that is, 33 per cent of the work force. The
agricultural workers' union began to gather strength after the 1967
peasant unionizing law, forming various "confederations" which by
1972 represented more than 100,000 agricultural workers.
Such political parties as the Communist and Socialist depended
on the strength of the urban and rural workers' organizations to be
able to participate in the country's political life, finally
obtaining the presidency in 1970. It was against this rapidly rising
force that the Chilean generals mobilized their troops on
September 11, 1973.
The Chilean unions, in addition to serving the workers as a
weapon to obtain wage increases, better working conditions, and
fringe benefits, traditionally took an active part in politics, being
the vanguard in the struggle against the domination of the American
transnationals and paralyzing the country whenever political crises
threatened to bring in fascism and its derivatives. The owners'
guilds ( for example, the Sociedad de Fomento Fabril ) traditionally
took the opposite position.
Lying somewhere between these adversaries were some 1,400,000
employees and self-employed workers, whose inconsistent political
position tended to oppose that of the workers. These formed the
middle stratum in the city and country, and traditionally they served
as a kind of buffer zone to the 1.4 percent of employers and
bondholders. Some 400,000 of these people were government employees
during the Allende administration. It was this middle stratum that
the fascist military movement depended on for the success of the
September 11 coup.
THE POPULAR UNITY's PROGRAMME
An excellent description of the situation of dependecy was the
Introduction to the Popular Unity's Programme presented to the
Chilean people during the Presidencial Election campaign in 1970,
which led to victory and Salvador Allende being elected President:
"The parties and movements of which the Popular Unity's
Coordinating Committee is composed, without prejudice to our
individual philosophy and political delineations, fully agree on the
following description of the national situation and on the programme
proposals which are to constitute the basis of our common effort
and which we now present for consideration by the whole nation.
"Chile is going through a grave crisis, manifested by social
and economic stagnation, widespread poverty and deprivation of
all sorts suffered by workers, peasants (*), and other exploited
classes as well as in the growing difficulties which confront white
collar workers, professional people, small and medium businessmen,
and in the very limited opportunities open to women and young
"These problems can be resolved in Chile. Our country possesses
great wealth such as copper and other minerals, a large hydro-electric
potential, vast forests, a long coast rich in marine life, and more
than sufficcient land, etc. Chile also has a population with a will
to work and progress and people with technical and professional skills.
"WHY HAVE WE FAILED?
"What has failed in Chile is the system -a system which does not
correspond to present day requirements. Chile is a capitalist country,
dependent on the imperialist nations and dominated by bourgeois groups
who are structurally related to foreign capital and who cannot resolve
the country's fundamental problems -problems which are clearly the
result of class privilege which will never be given up voluntarily.
"Moreover, as a direct consequence of the development of world
capitalism, the submission of the national monopolistic bourgeoisie
to imperialism daily furthers its role as junior partner to foreign
capital, increasingly accentuating its dependent nature.
"For a few people it is good business to sell off a piece of Chile
each day. And every day this select few make decisions on behalf of
all the rest of us. On the other hand, for the great majority of
Chileans there is little to be gained from selling their labour and
brain power and, in general, they are still deprived of the right to
determine their own future.
"The 'reformist' and 'developmentalist' solutions, which the
Alliance for Progress promoted and which the Frei Government adopted,
have not changed anything of importance in Chile. Basically, the
Christian Democratic Government was nothing but a new government of
the bourgeoisie, in the service of national and foreign capitalism,
whose weak efforts to promote social change came to a sad end in
economic stagnation, a rising cost of living, and violent repression
of the people. This experience demonstrated once more that reformism
cannot resolve the people's problems.
"The development of monopoly capitalism prevents the extension of
democracy and exacerbate violence against the people. As 'reformism'
fails and the people's capacity to struggle increases, the most
reactionary sectors of the dominant classes who, in the last analysis,
have no recourse but to use force, become firmer in their position.
The brutal forms of violence perpetrated by the Frei Government, such
as the activities of the Riot Police Unit, the beating up of peasants
and students, and the killing of shanty towns dwellers and miners, are
inseparable from other and no less brutal forms of violence which
affect all Chileans. People living in luxurious houses while a large
part of the population lives in unhealthy dwellings or has no shelter
at all also constitutes violence; people who throw away food while
others lack the means to feed themselves also commit violence.
"Imperialist exploitation of backward economies takes place in a
variety of ways: through investments in mining (copper, iron, etc),
industrial, banking, and commercial activities; through the control
of technology which obliges us to pay exaggerated sums for
equipment, licences and patents; through American loans with crippling
conditions which require us to purchase from the U.S.A. and with the
additional obligation to transport these purchases in North American
ships. Just one example of imperialist exploitation is the fact that
from 1952 to date, the U.S.A invested US$ 7,473 million in Latin
America and received back US$ 16,000 million.
"Imperialism has taken resources from Chile equivalent to double
the value of the capital accumulated in our country throughout its
history. American monopolies, with the complicity of bourgeois
governments, hace succeeded in taking over nearly all of our copper,
iron and nitrate resources. They control foreign trade and dictate
economic policy through the International Monetary Fund and other
organisations. They dominate important branches of industry and
services, they enjoy statutory privileges while imposing monetary
devaluation, the reduction of salaries and wages and the distortion
of agricultural activities through their agricultural surpluses
"They also intervene in education, culture and in the
communications media and they try to penetrate the Armed Forces,
making use of military and political agreements.
"The dominant classes, acting as accomplices in the process and
unable to defend their own interests, have increased Chile's foreign
indebtness over the last ten years. It was argued that the loans and
arrangements with international bankers would increase economic
development. But the only result is that today Chile holds the record
of being one of the world's most indebted countries in proportion to
"In Chile government and legislation is for the benefit of the
few - that is they only serve the large capitalists and their hangers-
on, the companies which dominate our economy, and the large landholders
whose power still remains almost intact.
"The owners of capital are only interested in making more money
and not in satisfying the needs of the Chilean people. For example,
if it appears to be a good business proposition to produce and import
expensive cars they use our economy's scarce resources for this
purpose, ignoring the fact that only a minute percentage of Chileans
have the means to purchase them and that there are far more urgent
needs to be satisfied. The improvement of public transport and provision
of machinery for agriculture are obvious examples of such urgent needs.
"The groups of businessmen who control the economy, the press and
other communications media, the existing political system, and the
threats to the State, when it hints at intervention or refuses to favour
all these interests, are an expensive burden on the Chilean people. For
these groups to deign to continue 'working' -since only they can afford
the luxury of working or not- the following conditions are necessary.
They have to be provided with all kinds of assistance. Important
businessmen pressure the State under the threat that, unless the help
and guarantees they request are authorized, there will be no private
"They have to be allowed to produce the products they want with
money belonging to the whole Chilean people, instead of producing the
goods needed by the great majority; and to transfer the profits obtained
to their foreign bank accounts. They wish to be allowed to dismiss
workers if they ask for better wages; and to be permitted to manipulate
food distribution and stockpile food products in order to create
artificial shortages and thereby raise prices in order to continue
enriching themselves at the expense of the Chilean people.
"Meanwhile, a large proportion of those people who actually produce
face a difficult situation. Half a million families lack housing and as
many ormore live in appalling conditions lacking sewage, drinking water,
light, and healthy conditions. The population's education and health
requirements are insufficiently provided for. More than half of Chile's
workers receive wages which are insuficient to cover their minimum vital
needs. Every family suffers from unemployment and unstable employment.
The chances of employment are impossible or uncertain for countless
"Imperialist capital and a privileged group not exceeding 10% of the
population receive half of the National Income. This means that out of
every hundred escudos(**) produced by Chileans, 50 end up in the pockets
of 10 of the oligarchy and the other 50 have to be shared among 90
Chileans from the poor and middle classes.
"The rising cost of living creates havoc in people's homes,
especially for the housewife. According to official statistics, the
cost ofliving has risen almost 1000% in the last 10 years.
"This means that every day Chileans who live from the proceeds of
their work are robbed of part of their salaries or wages. The same
happens to retired people, craftsmen, independent workers and small
scale producers, whose meagre incomes are daily eroded by inflation.
"Alessandri and Frei gave assurances that they would put an end to
inflation. The results are there for all to see. The facts prove that
inflation in Chile is the outcome of deeper causes which are related
to the capitalist structure of our society and not to increases in
incomes, as succesive governments have tried to make us believe in order
to justify the system and restrain workers' incomes.
"On the other hand, the large capitalist can defend himself from
inflation and what is more he profits from it. His property and his
capital become more valuable, his construction contracts with the State
are revalued, and the prices of his products always rise ahead of wage
"A large number of Chileans are underfed. According to official
statistics, 50% of children under 15 years of age are undernourished.
This affects their growth and limits their learning capacity. This
shows that the economy in general and the agricultural system in
particular are incapableof feeding Chile's population in spite of the
fact that Chile could support a population of 30 million people right
now -that is, three times the present population.
"Yet, on the contrary, each year we must import hundreds of
thousands of dollars worth of food products.
"Most of the blame for the food supply and nutritional problems
of the Chilean people can be attributed to the existence of LATIFUNDIA
which are responsible for the backwardness and misery which characterize
the Chilean countryside. Indices of infant and adult mortality,
illiteracy, lack of housing and ill health in the rural areas are
markedly higher than for the cities. The Christian Democrat Government's
restricted Agrarian Reform Programme has not resolved these problems.
Only the peasants' struggle, backed by the whole nation, will resolve
them. The present struggle for land and the abolition of the latifundio
is opening up new perspectives for the advance of the Chilean people.
"The growth rate of our economy is minimal. In recent five year
periods the average rate of growth has been scarcely 2% p. a. per capita;
and since 1967 there has been no growth at all. On the contrary, we have
moved backwards according to the Government Planning Office's figures.
This means that in 1966 each Chilean had more goods than he has today,
which explains why the majority are discontent and are looking for an
alternative for our country.
"The only alternative, which is a truly popular one, and one which
therefore constitutes the Popular Government's main task, is to bring
to an end the rule of the imperialists(***), the monopolists, and the
landed oligarchy and to initiate the construction of socialism in
"THE ORGANIZED PEOPLE IN UNITY AND ACTION
"The growth in size and organization of the labour force and the
growing struggle and conciousness of its own power reinforce and
propagate criticism of the established order, the desire for profound
change and conflicts with the established power structure. There are
more than three million workers in our country whose productive efforts
and enormous constructive capacity cannot be put to good use within the
present system, which only exploits and subjects them.
"These organized forces, in a common effort with the people to
mobilize those who are not sold out to national and foreign reactionary
interests, could destroy the present system and, by means of this united
struggle on the part of the large majority of Chileans, progress could
be made in the task of liberating themselves. The Popular Unity alliance
has been formed precisely for this purpose.
"The imperialists and the country's dominant classes will struggle
against a united people and will try to deceive them once again. They
will say that freedom is in danger, that violence is taking hold of the
country, etc. But each day the popular masses are less and less taken in
by these lies. Social mobilization is growing daily, and is now
reinforced and encouraged by the unity of the left wing groups.
"In order to encourage and guide the mobilization of the Chilean
people toward the conquest of power, we will set up Popular Unity
Committees in every factory, farm, poor neighbourhood(****), office or
school, to be run by the militants of the left wing movements and parties
and to be composed of the thousands of Chileans who are in favour of
fundamental change. These Popular Unity Committees will not only
constitute electoral organizations. They will interpret and fight for
the immediate claims of the masses and above all they will learn to
"This new form of power structure which Chile needs must begin to
develop itself right now, wherever people need to be organized to fight
over specific problems and wherever the need to exercise this power
become apparent. This system involving a common effort will be a
permanent dynamic method for developing our Programme, constituting a
practical school for the masses and a concrete way of deepening the
political content of the Popular Unity at all levels.
"At a given point in the campaign the essential contents of this
Programme, enriched by discussion with and the support of the people,
and together with a series of immediate government measures will be set
out in a People's Act (ACTA DEL PUEBLO) which the new Popular Government
and the Front which sustains it will regard as an unrenounceable
"Support for the Popular Unity's candidate does not, therefore, only
involve voting for a man, but also involves declaring oneself in favour
of the urgent replacement of our present society, the basis of which is
the power and control exercised by large national and foreign
(Read the complete text in Popular Unity Program)
(*) The word peasants and peasantry should be taken to include small
proprietors, agriculture wage labourers, sharecroppers, migrant and
temporary rural labourers, smallholders who rent their land and other
types of agricultural workers.
(**) National currency at that time
(***) At that time, in Chile and Latin America the meaning of this
word was "U.S. imperialists".
(****) The word used in the original Spanish text is 'poblacion' and
refers to various types of low income housing areas in towns and
villages. These include slums, illegally occupied squatter settlements,
temporary shanty towns and permanent but poor housing developments
promoted by the government and housing associations or constructed
by means of self-help programmes in which technical and material
assisstance is provided by the government. In the rest of this document
references to low income housing districts or low income neighbourhoods
should be taken as referring to all these different low income housing