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Industry and the Missing Bourgeoisie: Consumption and Development in Chile, 1850-1950

Author(s): Arnold J. Bauer

Source: The Hispanic American Historical Review, Vol. 70, No. 2 (May, 1990), pp. 227-253
Published by: Duke University Press
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Industryand the MissingBourgeoisie:

Consumptionand Developmentin
Chile, 1850-1950


IN the lastdecadeofthe eighteenth

vantand reflectivemen, the firstan enlightenedcreole,
the seconda recentarrivalfromSpain, shooktheirheads
in collectiveconcernover the stateof Chile. How was it possible, they
asked,thata regionwithsuchpotentialrichnessshouldbe so poor?Wrote
Manuel de Salas,
here it neverthundersnorhails. The countryis laden withmines
of all the knownmetals,the climateis benign,the fieldsfertile
and irrigated.There are good portsand excellentfishing,all the
plantsand animalsofEurope flourish, nonehave degeneratedand
somehave improved.Thereare no beasts,no insects,no poisonous
snakes... normanyoftheplaguesofothercountries.... In this
privilegedland beneatha benignand limpidsky,thereshouldbe
a numerouspopulation,a vastcommerce,flourishing industry,and
importantarts. But instead,thismostfertilekingdomin America
is the mostmiserable. .. theproductsthatcouldbe sentto others
are broughtto it.
For his part,JoseCos Iriberriwrote,"Whata delicioussightit is to enter
throughany of the portsof thisland and see the multitudeof streams,
verdantfields,the flocksand herds.Whata notionofopulence and rich-
ness fillsour mind!Who would thinkthatin the midstofthisabundance
thereshouldbe sucha scantpopulationgroaningundertheheavyyokeof
poverty,misery,and vice."I
*A versionof this essay was presentedat a conferenceon Industrialization in Latin
America,organizedby David Landes at HarvardUniversity in November1988. I am grateful
to ProfessorLandes and Paul Drake forconstructive advice and to mycolleaguesBenjamin
Orlove, Lovell Jarvis,and V. R. Dufourforsuggestions and criticism.
i. "Representaci6nal Ministeriode Haciendahechapor el seniordon Manuel de Salas
. . .(1796)," in Miguel Cruchaga,Estudio sobre la organizaci6necon6onicay la hacienda
puiblicade Chile (Santiago,1878), 274-290; see also SergioVillalobos,"Claudio Gay y la
renovaci6nde la agriculturachilena,"in Agricuiltura chilena,ICIRA ed. (Santiago,1973),

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Like a greatmanypeople since then,these two men were aware of

backwardnessand interestedin development.Theyhad littlepatiencefor
theircontemporaries who blamed the climateor the "innateslothof the
Indians whichhas contaminatedeveryonebornin America."They were
less inclinedthanwe are to seek the cause of povertyand stagnationin
imperialistrule. In fact,our two eighteenth-century observers-one a
mercantilist, the othera physiocrat-werelittleinterestedin historyat
all, or how Chile gotto be thewayitwas. Theywereinterestedin creating
new productsand industries.Iftheirsolutionsseem overlyoptimisticand
even ingenuous,the subsequentlineal descentfromSalas and Cos Iri-
berrito RauvlPrebischand AndreGunderFrankshows,nevertheless, that
we are all childrenof the Enlightenment, and comparisonof Chile with
WesternEurope is alwaysimplicitin the discussion.Despite stylisticdif-
ferencesamongconservatives, liberals,Cepalinos,Marxists,neo-Marxists
and neoliberals,we have come to sharevocabularyand standardassump-
tions,and, withinthose,a broadconsensushas emerged.Everyoneagrees
on the termsof the debate and on the notionthatChile, to some extent
at least,has "laggedbehind"theperformance ofWesternEurope and the
United States. This has meantnot only thatthe largerworld in which
Chileans became integratedwarpedtheirsocietyin peculiarways at the
time,but thatideas and modelsdrawnsincefromthe "developed"world
have distortedthe interpretations oftheprocessitself
Untilfairlyrecentdecades, industrialdevelopment has naturallybeen
linked to social class. In the conventionalinterpretation, technological
change and industrialorganizationcreated an accompanyingbourgeoi-
sie, but othershave noticed thatin some cases an urban middle class
preceded industryand, indeed, broughtit into existence. It is easier
now to see the manyroads to industry, includingthe capitalist,socialist,
democratic,authoritarian, and, perhapsin China today,even a kind of
Smithism-Leninism. In the case at hand, it is importantto disentangle
industryfrombourgeoisie,not to insistthatthe two go together,or to
explainthe failureof the formerby the absence of the latter.This prob-
lem, I believe, has confusedour understanding of Chilean history,and
its examination,I hope, will sortout a few thingswhile at the same
timereintroducing the importanceofpatternsofeliteconsumptionas an
importantelementin economicunderdevelopment. This is linkedto the
multiplicity of historicaltimespresentat once; thatis, Chile's develop-
mentoccurredwithina worldthathad alreadyundergonetheprocessthat
Chileans were embarkingon. The consequencesofuneveneconomicde-
velopmentat a global level were compoundedby the sharplysegmented
natureofChilean society.

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The ChileanPathto Industrialization

Early opinionon Chilean industrialization restednoton empiricalin-
vestigationofindustryitself,but on inferences fromgovernmental policy.
As recentlyas 1965, a standardsurveyoutlinedthree main stages: the
first,runningto midnineteenth century,was characterizedby incipient
growthencouragedby the government; the second,from1850 to around
1900, representeda period of governmental neglectand regression;and
the third,after1900 and especiallyafter1930,was the real beginningof
industryin Chile as a resultoftheimport-substitution policiesofan inter-
ventioniststate.2Accordingto thisview,Chile certainlydid "lag behind"
WesternEurope, the United States,and manyothercountriesas well;
but since thentheworkofCarlos Hurtado,Oscar Mufioz,HenryKirsch,
and Gabriel Palma, based on assiduousarchivaland statisticalwork,has
In Kirsch'sview,the War ofthe Pacific(1879-84) gave an initialpush
to local industry,
and, togetherwithintenseurbanpopulationgrowthand
railroadconstruction (from2io kilometers in i86o to 8,ooo kilometersby
1913), industryin fact grew at a steadyrate fromthe i88os to World
War I.3 This industryproducedconsumergoods, shoes, clothing,flour,
and so on, notcapitalgoods. But,as earlyas 1887when6 locomotivesand
30 freight cars"thatwouldbe creditableto anymakerin the UnitedStates
or England"were underconstruction in Valparaiso,some heavyindustry
was presentas well.4The firstlocomotivewas builtin Chile in 1886by the
state-ownedfoundryin Santiago,and by 1914, 1go were builtby private
trolleysforthe new urbanrails,thefirstPortlandcementfactory in South
America(whichbecame, fora time,the largestin thatcontinentand the
fifthlargestin the world),steelbridges,textiles,and food-processing fac-
toriesall contributedto a robustgrowththat,by 1909, employedsome
75,000 in manufacturing. This figure,whichdoes not includethousands
of artisansin shops of less than5 workers,representedi8 percentof the
laborforceat thattime.5
Kirsch'sresearchestablishedan earlyoriginforChilean industry, and
it supplementsMufioz's1966 Yale dissertation (publishedin Chile in 1968)
which treatedthe years 1914-65. Mufiozexaminedindustrialgrowthin
Chile in relationto the modelsand findings of SimonKuznetsand H. B.
2. Max Nolff, in Geograftaecon6micade Chile (Santiago,
1965), 511.
3. HenryKirsch,IndustrialDevelopmentin a TraditionalSociety(Gainesville,1977).
industrialde Chile,1914-1965(Sanitiago,
4. Cited byOscar Mufioz,Crecimiento 1968),
5. Kirscl, Industrial,

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Cheneryand concluded,withseveralqualifications and caveats, that"a

process of industrializationwas occurring"at an annual rate of nearly
9 percentduringWorldWar I, at perhaps3 percentin the'20S, and then,
aftera briefdecline duringthe Great Depression,at a steadyand strong
rate of about 5 percenta yearbetweenthe mid-193osand the mid-'5os.6
At firstglance, thisseems impressive,and indeed Mufiozbelieves,with
due allowancemade forshakystatistics, thatthe rateofindustrialgrowth
was "superiorto theworldaverage."Thissomewhatdeceptiveremarkcan
be explainedin partby the factthatanycountrybeginningto industrial-
ize will showinitiallyhighergrowthratesthanmatureeconomiesbecause
goods previouslyproducedin homeindustries beginto showup in indus-
trial data as theycome to be produced in slightlylargerurban shops,
and also because industryyieldsmoreto investment in underdeveloped,
capital-scarce,labor-richeconomies.In addition,Chile prosperedrather
thanbeing destroyedbytwoworldwars;and so on. Butwithall thistaken
into account, and thoughthe rate of industrialization in Chile is some-
whatless thanone mighthave expectedgiventhestrongoverallgrowthof
the Chilean economyafter188o, the factstillremains-as Mufiozpoints
out-that the rate of industrializationfromaround1900 to the mid-'5os
was "slightlyhigherthanthe worldaverage."Palma'smorerecentwork
supportsthis, pointingout that Chile's per capita income in 1914 was
around $1,000 (1980 U.S. dollars)and thatthe 16 percentof the active
populationengaged in manufacturing (in establishmentsof fiveemploy-
ees or more)produced $168 per capita,"1.7 timessuperiorto a 'Chen-
ery norm'."7Althoughthe numbersvarywithdefinition, especiallythe
troublesomebusinessof determining whetheran industryis artisanalor
factory, Table I givessomeindicationofindustrialdevelopment.
As comparedto the earlierpictureof an essentiallyagricultural and
miningeconomyup to 1930 and state-ledindustrialdevelopmentthere-
after,as "developmenttowardthe outside"gavewayto "importsubstitu-
tion,"thenew researchthusprovidesa different perspective.The idea ofa
sharpbreakat thetimeoftheGreatDepressionis no longervalid,and the
long periodfromaround188o intothe 1970Scan be seen as a continuum.
The question,then,is not so much"whyno industry?"(at least before
1930), but whyindustrydid notlead to a moresatisfying, balanced, and
6. Mufioz, Crecimniento, 31-33. See also his later reflections,Chile y su industria-
lizaci6n (Santiago, 1986) and two recentdissertations, Jos6Gabriel Palma, "Growthand
StructureofChilean Manufacturing Industry,1830-1936" (D. Phil., Oxford,1979) and Luis
Ortega, "Change and Crisisin Chile's Economyand Society,1865-1879" (Ph.D., Univer-
sityofLondon, 1979),and, ofcourse,MarkosMamalakis,The Grotvthand Structureof the
Chilean Economy(New Haven, 1976).
7. Munloz,Crecimniento, 33; Palma, "Chile 1914-1935: De economia exportadoraa
sustitutivade importaciones,"Nueva Historia,2:7 (1983), 165-192.

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TABLE in Chile
I: IndustrialEmployment

1865 1914 1930 1952

Populationa 1,812,000 3,481,000 (est.) 4,287,445 5,932,995

Urbanpopulationa 398,062 1,407,000(est.) 2,068,192 3,437,415
Percentageurbana 22 40 48 58
Numberofindustries 2,100b 1,683b 2,374b 4,460C
Numberofpeople employed
in industry 71,000d 230,000e 414,900f
Percentageoftotalworkforce 17.6g 15.7 19.7e
Manufacturing as percentage
oftotaloutput 21.8

aAllpopulationfiguresare fromCarlosHurtado,Concentraci6n de poblaci6ny desarro-
llo econ6mico(Santiago,1966).
bHenryKirsch,IndustrialDevelopmentin a TraditionalSociety(Gainesville,1977),23,
173. The 2,100 figureis anlestimatefor1883.
c1944. From Direcciongeneralde estadistica,"Iidustriasaiio 1944" (Santiago,1947),
8-9, as citedin GeorgeWythe,Industryin LatinAmerica(New York,1949), 199.
dG. Feliu Cruz, "Medio siglode la industriachilena,"Anales de la Chile, 120
(Sept.-Dec. 1960), 111-125.
eMarkosMamalakis,The Growthand StructureoftheChileanEconomy(New Haven,
1976), 145. Figurefrom1927 census. Osvaldo Sunkel,"Change and Frustration in Chile,"
in Obstaclesto Changein LatinAmerica,Claudio V6liz,ed. (London,1975), 122.
fMaxNolff,"Industriamanufacturera," Geograftaecon6micade Chile (Saintiago,1965),
gMartoBallesterosand TomE. Davis, "The GrowthofOutputand Employmentin Basic
Sectorsof the Chilean Economy,"EconomicDevelopmentand Social Change, 11:2 (Jan-.
1963), 176.

sustainedeconomicgrowth?This inquiryleads intothe largerworld in

whichChileansendeavoredto developa nationalindustryand the nature
ofthe social matrixat home.

Industry-Or Its Absence-Before Industrialization

Recent work in European economichistoryemphasizesthe impor-
tance in the overallpath to industryand economicdevelopmentof "in-
dustrybefore industrialization" or the emergence,in the sixteenthto
eighteenthcenturies,ofhouseholdproductionorganizedand financedby
merchantsforsale in local or foreignmarkets.8
Was protoindustrypresent
in Chile's development,or did itsabsencehinderindustrial

8. PeterKriedte,Hans Medick,and JiirgenScllombohm,Industrialization BeforeIn-

trans.fromthe Germanby Beate Schempp(Cambridge,1981); MyronGut-
mann, Toward the Modern Economy:Early Industryin Europe, 150o-18oo (New York,
1988). See also the recentdebate in HAHR, 69:3 (Aug. 1989), 479-558, on eiglhteentlh-

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This question has not yet been raised in studiesof Chilean economic
history,and itis sketchedouthereto illustrate a good exampleofthemul-
tiplicityofhistoricaltimesand theconsequencesofunevendevelopment.
Let us begin withthe long view. For milleniabeforeColumbus,the
people ofthe centralAndes(todayPeru, Bolivia,and Ecuador)had many
advantagesover othernativeAmericansthroughthe possessionof wool-
bearingcameloids,mainlythellamaand alpaca, but also occasionallythe
undomesticated vicufiaand guanaco.These wools,added to nativecotton,
permitteda longtradition ofhomespuns,includingthedrop-spindletech-
nique and primitiveweaving.Sixteenth-century Spaniardsadded sheep
and European varietiesof cotton,and encouragedthe developmentof
rudimentary obrajes. Local traditionand techniqueswedded to colonial
compulsionmade the centralAndeswell knownfortextiles,and, as the
colonial economydeveloped,the distantkingdomof Chile began to ex-
change wheat, hides, and tallowforAndeanwoolens. This meantthat,
as Chile moved to independencefromSpain in the late eighteenthand
earlynineteenthcenturies,the countryimportedmostof its cloth-not,
however,onlyfromPeru and Ecuador but also legallyand illegallyfrom
France and Britain.At the same time, thousandsof local spinnersand
weavers produced a rusticand coarse clothforhouseholduse thatwas
sold at local markets.9
Much ofthisproductionis statistically invisible,but severalobservers
testifyto the presenceofcrudeloomsas a normalpartofruralhouseholds
throughout centralChile in theearlynineteenth century.One UrizarGar-
fias was struckby the extentof householdindustryin the provinceof
Maule, where,althoughtherewere no formally establishedtextileindus-
tries,therewas "considerableactivity in makingbayeta[a coarsewoolen],
wool socks,capes, and ponchos."The keen-eyedLieutenantGillissfound,
as late as 1852, thata "largeproportion ofthe ponchos,blankets,church
carpetsand rugs,and coarseclothsare ... ofdomesticmanufacture show-
ing thatthe poorerclasses of womenare not idle beside theirspinning
wheels and hand looms."At aboutthesame time,a Talca newspaperesti-
matedannualoutputofthatcentralprovinceat some36,ooo yardsofcloth
and 12,ooo ponchos.'0All of this is corroborated by the census data on
professionswhich show more than8o,ooo femalespinnersand weavers
(hilanderasand tejedoras)in 1855,includingsome35,000 in theheartland

9. Armandode Ram6nand Jos6ManuelLarrain,Origenesde la vida econ6onicachilena

1659-1808 (Santiago,1982), 167, 183 if
io. FernandoUrizarGarfias,Estadisticade la Reputblica de Chile, provinciade Matule
(Santiago,1845), 92-94; Lt. J. M. Gilliss,The U.S. Naval AstronomicalExpeditionto the
HemisphereduringtheYears 1849-50, 51, 52 (Washington, 1955), I, 57.

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TABLE II: Spinnersand Weaversin Chile

1854 1865 1875 1895

Core provinces
(Aconcaguato Talca) 35,068 25,312 13,360 4,431
South 39,871 19,893

Sources: Nationalcensusesof 1854, 1865, 1875, 1895,"Profesiones."

But, just at this time, when because of populationincrease and a

steadilygrowingeconomyone mightexpect a developmentof local in-
dustry,when merchantsmighthave begun to financeand organizethe
outputofthousandsoflocal spinnersand weavers,the relentlessmarchof
Lancashirecottonsand woolenscame to replacenot onlythe finercloth
trade-previouslydominatedby importedPeruvianand Quitefiocloth-
but the homespuns as well. By 1875, therewereonly13,300 spinners
and weaversin the centralzone, and, by 1895, theirnumbershad shrunk
to 4,431.11Deeper in the provinces,where hightransportcosts offered
tunitycosts at zero, continuedin the "hoursbeforemeals" to spin and
weave fortheirown household'sconsumption.However,wherethe new
railroadsand bettercart roads opened the countryto Britishimports,
spinnersand weaverspracticallydisappeared(see Table II). The better-
offChileans had alwayspreferredimportedto local manufactures, and
would continueto do so, but in the i86os, even the humblewomen in
the countrysidepreferredto sell theirwool and "coverthemselveswith
the cottoncloth the foreigners-aboveall the English-bring in at low
Scholars have long recognizedthe key role that textilesplayed in
industrialdevelopment,but contemporaries were also awareofthis.Both
Salas and Cos Iriberri,in the late eighteenthcentury,triedto promote
the cultivationof flaxand hemp and the elaborationof cloth and rope
fromthese fibers.In 1804, therewere independentefforts to establish
textilefactories.A Swiss, SantiagoHeitz, seems to have been the first
to try,but his efforts soon collapsed. By 1870, onlyone importantmill,
foundedin i850, was stillin businessin thecapitalcity,and it "up to now

ii. OficinaCentralde Estadistica,Censojeneralde la rep6blicade Chile levantadoen

1854 (Santiago,1858);Cuartocensojeneralde la poblaci6nde Chile(Santiago,i866); Quinto
censojeneral de la poblaci6nde Chile (Santiago,1876);Setimocenso ... , 4 vols. (Santiago,
12. Gay,Historiafisicay politicade Chile:Agricultura,2 vols. (Paris,1862-65),I, 163.

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[1870] has not produced satisfactory 3 The Buena Vista woolen

mill in Tome, near Concepcion,foundedin the midnineteenth century
by a NorthAmerican,Delano, had a discontinuoushistorybut was in
operationin the earlytwentiethcentury,as was the British-owned Chi-
guayantecottonworksalso near Concepcion;and severalimporthouses
had theirown smallknitting mills. But the textileindustrycame late to
Chile, and not untilthe 1930S and the arrivalof "Los Turcos"or Chris-
tianized Palestinianswas therea modern,integratedtextileindustryin
Chile. 14
Thus, we do not see here the progression thatunderlayindustrialde-
velopmentin northwestern Europe of householdproductionto the mer-
chant capital phase of "protoindustry," and, finally,to a self-sustaining
integratedmoderntextileindustry.Apartfromthe questionof tasteand
sociallydeterminedconsumption to whichwe shall return,the explana-
tionforthis lies essentiallyin the patternofunevendevelopmentin the
Atlanticeconomy.Whencottagersin theLow Countriesor Englandbegan
to movefromhouseholdproductionto protoindustry in the late sixteenth
century,theyfacedno moreefficient producersthanthemselves,no ships
laden withcheap clothwaitingjust offshore. But by the timeprotoindus-
trymighthave emergedin Chile, and possiblyhave led intoan efficient
nationalindustry-creatingalongthewaya moreprosperousruralecon-
omy,readyto buytheoutputofa nascentindustry-thematureoutputof
the world'smostefficient textileindustries was pouringthroughthe ports
of Valparaisoand Concepcion to obliteratethe rusticlocal product.To
hold back thisfloodwould have requiredan enforcedtariff and a politi-
cal will thatare difficult
to imaginegiventhe class interestsof the most
powerfulpoliticalgroupsin the countryin the earlynineteenthcentury:
the greatlandowners,merchants, and minerswho were interestedin the
freesttrade possible. The politicalclimatewould begin to change with
the emergenceof new social forceslaterin the century,and especially
after1930; but nearlya centurywas lost, and the opportunity gone for
local, organicdevelopmentofthekeytextileindustry. Goingintothe late
nineteenthcentury,Chile remainedas it had been in thelate eighteenth.
Rustic spinnersand weaversdeep in the provincesmade rude clothfor
the needs of theirown households,but the bulk of the marketfortex-
tileswas suppliedbyimports,nowfromGreatBritain.The nationaltextile
industryremainedundeveloped,in eitherprotoindustrial or fullfactory

13. Recaredo S. Tornero,Chile ilustrado:Guiiadescriptivadel territorio de Chile, de

las capitalesde provincias,y de los puertosprincipales(Saintiago,
1872), 101.
14. Kirsch,Industrial,4o; PeterWinin,Weaversof Revolution(New York,1986), i6-
21. Silvia Mezzano Loperequi, "La inanufactura textilchilena en el siglo XIX" (Tesis de
grado,Universidadde Chile, 1981),is theonlystudyofthiskeysubject.

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form.Even the coarsesacksforgrainwere importedby the millionsfrom

A second example of uneven developmentmay be found in flour
milling.In the Mediterranean, flourmillingdevelopedslowlyover some
five millennia.From the saddlestonesof the EgyptianThird Dynasty
thereevolvedleverand hourglassmills,querns,and revolvingmillstones.
These were adapted to animal power,which,in turn,opened the way
forwater-poweredmills,and, in the last centurybeforeChrist,thisnew
technologyspread fromthe easternMediterraneanthroughGreece into
the Romanworldand thenoutwardthroughthe riversofEurope. Accep-
tance ofthese millswas discontinuous and hesitant,as Marc Bloch'smar-
velous articleon the subject shows,but water-and wind-poweredmills
were steadilypeifected,and,bythesixteenth century,grainmillsbecame
Europe's "heavyindustry." Theirwidespreaduse markedthe beginning
of the breakdownof the traditional world;"it was the distantannounce-
mentofthe IndustrialRevolution." 15 Since postconquestChileans,unlike
the high-culturemaize societiesof Mesoamericaand the centralAndes,
were primarily wheateaters,a provincialvariantofthemillingtechnology
described above came withthe early Spaniards.By the midnineteenth
century,flourmillingwas a flourishing business,especiallyin the south-
centralzone betweenthe fluvialportofTalca and Tome on the coast near
Concepcion. Foreigncapitaland technicianshelped make Chilean mills
technologically equal to any in the worldat thattime,and elevated the
Talca millersand merchantsinto a powerfulprovincialinterestgroup.
There were severalattemptsto improvethe ocean portof Constitucion
thatservedthe industry, and local millerssupportedby a fewValparaiso
merchantsformeda companyto operatesteamtugs.16Butthetremendous
changesin millingintroducedin Minneapolisand Budapestoverwhelmed
smallerproducers,and, even on the distantPacificcoast, Chilean mills
could not compete. By the 189os, flourimportswere commonand the
domesticmarkethad to be protectedby tariff.
At this momentthen,when an independentChile mighthave taken
strongersteps towardthe developmentof protoindustry in textilesand
flourmilling,both of whichplayedkey roles in European industrializa-
tion, these activitieswere overwhelmedby foreigncompetition,which
delayed the emergenceof ruralindustryand providedno base forlater
development.The briefpoliticalchallengepresentedbytheenergeticarti-

15. Marc Bloch, "The Advenitand Triumphofthe WaterMill," in Land and Workin
MedievalEurope (Berkeley,1967),136-168;CarloCipolla,BeforetheIndustrialRevolution:
European Societyand Economy,1000-1700 (New York,1975), 161-164.
i6. ArnoldJ.Bauer, Chilean Rural Societyfromthe SpanishConquestto 1930 (Cam-

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san and millinginterestsof the southernprovinceswas put down in two

armed conflictsin 1851 and 1859 by the centralgovernment dominated
by the greatlandownersof Santiago.The broader"insurrectionary alli-
ance" of those years includedartisans,laborers,yeomanfarmers,small
holders,mineownersin the north,and, mostprominently, such south-
ern millownersas JuanAntonioPando and RobertoSouper,who pressed
forstateassistanceto the millingindustry, break-upof the large estates,
and the "rescue of our ruralclassesfromabject servitude."For Maurice
Zeitlin, the "civil wars" of the i850s were a "crucialturningpoint" in
Chile, since theirdefeatamountedto the "virtualsuppressionofan alter-
nativeand independentpathofcapitalistdevelopment." 17

Whetherthisis truemustremain,ofcourse,a matterofintelligent and

provocativespeculation,but we do knowthatout of the i850s emerged
the powerfulpoliticalforcesthatdeterminedstatepolicyforat least the
next two decades. These forceswere the greatlandownersof the cen-
tralvalley,togetherwiththe mainurbanmerchants.Theirclass interests
naturallyled themto promotefreetrade.The landownerswantedmarkets
in Peru and England(exportsto thatcountryreacheda peak in 1874) for
theirgrain,and theidea ofagreeingto importdutieson theirconsumption
"wouldbe worthyofa madhouse."As forthegreatmerchantsofSantiago
and Valparaiso,"who could imaginethem defendingthe notionof im-
port duties to promotenationalindustry?"'8 Not onlythis,but whatever
success the "insurrectionary alliance"mighthave had in formingpolicy,
any attemptat industrialdevelopmentwould certainlyhave encountered
formidableobstaclesin the archaiccountryside where,in i850, some 8o
percentofall Chileanslived.

Chilean populationgrew at an annualrate of 1.33 percentbetween
i865 and 1930, below the U.S. rate of 2.o8, but well above the Euro-
pean rate of .83. Moreover,therewas substantialrural-urban migration,
so that,by 1930, nearlyhalfof Chile's populationlived in cities. These
ratesof growthand urbanizationare well above thoseconsideredappro-
priateforeconomic"takeoff" by W. W. Rostow,but in absolutenumbers
the urbanpopulationwas smallby the standardsofotherindustrializing

17. MauriceZeitlin,The Civil Warsin Chile (or theBourgeoisRevolutionsthatNever

Were(Princeton,1984),36, 68-69.
i8. Claudio Veliz, "La mesade trespatas," HernanGodoy,Estructurasocial de
Chile (Santiago,1971),232-240. V6liz includesthe northernminlersas one leg ofhis table,
and extendsand exaggeratesthe influenceof all threegroupsdown to 1930. Recentwork
makestheseaspectsofan otherwisestimulating argument doubtful.

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countries: only 398,ooo in 1865 and just about 2,000,000 in 1930.19 In the
early stages of industrialdevelopment,the ruralmarketthushad to be
important, and itis here thatwe encounterone ofChile'smostintractable
obstaclesto growth.At the end of the colonialperiod, Salas could not
fail to notice,even by contemporary standards,the deep inequalitiesof
income distribution: "Nothingis morecommonthan to see in the very
fieldsthat have just produced abundantcrops,the armsof the workers
who have broughtin theharvestextendedto beg foralmsand bread."20
From these beginnings,fromthiscolonialinheritance,economicand
social relationsin the Chilean countryside changedat a snail'space. The
search forappropriatedescriptiveterminology forthishistoryrunsfrom
the older "feudal"to the dependencyschool's"capitalist"to the hedg-
ing "semifeudal"or "seignorial,"but all ofthesecan be accommodatedin
Pablo Macera's schemeforthe structureof the haciendaor greatestate,
the dominantinstitution in Chilean ruralsociety.2'In thisview, the ha-
cienda is Janus-faced. Towardthe externalfront,towardlocal or interna-
tionalmarkets,the Chilean landowner,oftenresidentin Santiago,nego-
tiatedthe sale of his produce forcash, obtainedcreditfrombanks,and
stroveto make a profit.In short,he acted like the capitalisthe was. But
towardhis workers,towardthe internalfrontof his enterprise,he was
a semifeudalseigneur.He paid his workersin kindor tokens,and en-
deavoredto gain a precapitalistobedience througha paternalism at best
benignand at timestyrannical.Everyoneobservedthe peculiarinstitu-
tionofthe Chilean countryside, but no one did anything aboutit. Service
tenants(inquilinos)and day laborersremainedunorganizedand impover-
ished. By the late 1930S and intothe '40s, organizedlaborthreatenedto
extendits influenceintothe countryside, and ruralworkersbegan halt-
inglyto develop an "exactingtemperament" and push forbettersalaries
and workingconditions.As thisoccurred,thelandownersrattledthesaber
of higheragricultureprices, and it became obviousto urbanpoliticians
thatifhigherfoodpriceswerepermitted theywouldcut intothe earnings
of the industrialsectorthenbeing promoted,and create politicalprob-
lems withthe urbanmass. Underthesecircumstances, the industrialists,
the proletariat,and the landownersstrucka mutuallybeneficialbargain

19. Carlos Hurtado Ruiz-Tagle,Concentraci6nde poblaci6ny desarrolloecon6onico:

El caso chileno(Santiago, 1966), 144-145, "La economia chilenaentre1830 y 1930: Sus
limitacionesy sus herencias,"INECON, Aug. 11, 1981,p. 4, and De Balmaceda a Pinochet
20. Manuel de Salas, "Representaci6n," in Estudio,275.
21. Pablo Macera, "Feudalismocolonialamnericano: El caso de las haciendasperuanas,"
Acta Historica,35 (Szeged, Hungary,1971), 3-42, is obviouslyaboutcolonialPeru, but his
schemefitsnineteenth-century Chile as well.

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at the expense of ruralworkers:the landownersagreed to accept con-

trolson agriculturalpricesin returnfora hands-off policyby the Marxist
partiesin the countryside.Ruralworkerswere notpermittedto organize
and protestswere squelched.Archaicsocialand economicrelationsin the
countrysidethus persistedinto the midtwentieth century.This is indi-
cated by the 1954 law thatrequiredlandownersto pay at least 20 percent
oftheirworkers'salaryin cash; a measure,bytheway,stoutlyresistedby
the workersthemselves.22 Obviously,a ruraleconomyin whichworkers
are paid 8o percentof theirwage in rationsoffood,rightsto pasturage,
or tokensforthe companystoresdoes notofferan enormousattraction to
market-seeking entrepreneurs.
Thus, the Chilean path to industrializationdoes not rise out of an
artisanpast,crossoverthelongbridgeofprotoindustry, and broadenonto
the highwayofself-sustained growth.Rather,likemining,it beginsquite
abruptlyand almostaccidentally, and it retaineda certainenclavecharac-
ter,threatened,ifwe maychangethemetaphorin midstream, bythehigh
tide offoreigncompetitionon one side and restricted by the shallowbog
of ruralpovertyon the other.Withinthisfairlynarrowspace, however,
industrydid develop,rapidlypromotedto a surprising degree by foreign
immigration. In the earlynineteenthcentury,the British,Germans,and
Frenchhad movedintothecommercial vacuumcreatedby thebreakwith
Spain, and, by 1850, about 6o percentofthe principalmerchantsin Val-
paraisoand Santiagowere ofthosenationalities. Later,althoughChile did
notattractworking-class fromEurope, some8o,ooo foreigners,
mainlyEuropeans and NorthAmericans,settledin the country,an ex-
traordinarilyhigh percentageof themwithmoneyand entrepreneurial
ambition.By the end ofthe century,theirtalentsand capitalwere turned
to industry.As of 1914, some 56 percentof all industrialestablishments
in the countrywere ownedbyforeigners, withouttakingintoaccountthe
manyothersowned by childrenand grandchildren offoreignimmigrants
whohad,by 1914, becomeeconomically
As othershave noticed,industrialists
in Chile emphasizedconsumer
ratherthancapitalgoods, and theybent theirefforts to obtainexclusive
rightsor monopolies.By the 189os, theyhad supportnot only through
tariffs afforded
but also fromtheprotection (especiallybeforetheopening
22. SergioArandaand AlbertoMartinez,"Estructuraecon6mica:Algunascaracteristi-
Chile Hoy (Santiago,1970), 55-172. See, esp., the excellentchapteron
cas fundamentales,"
"Chilean Democracy,"in BrianLoveman,Chile: The Legacy of Hispanic Capitalism(New
York, 1988).
23. "Matriculadel comerciode Santiagosegunel rejistrode las patentesen 1849" and
"Matriculadel comerciode Valparaiso. . . en 1849,"Repertorionacional (Santiago,1850),
II, n.p.; Hurtado,La econontia,para. no. 58. See also SergioVillalobosand RafaelSagredo,
El proteccionismo econ6onicoen Chile: SigloXIX (Santiago,1987).

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ofthe PanamaCanal) byhighfreight rates.In theworkofMunioz,Kirsch,

Hurtado, and Palma alreadymentioned,the yearsfromthe War of the
Pacificto the 1950Semergeas a periodof unbrokenindustrialgrowth.24
Unfortunately, however,the inherentobstaclesstillexistedin the 1950S
and '6os, and beyond the objective,quantitativefactthat industrialex
pansion had by then reached certainlimitsand growthhad leveled off,
the economic expectationsof all social classes were neverthelessmuch
higherthan a centuryearlier.As Hurtadoputs it, "We were backward
withrespectto Europe in i8io and we continuedto be backwardin 1950."
Althoughit is hard to tell whetherthe gap widenedor closed over that
period, fewpeople were concernedwiththequestionin i8io, but every-
one was 150 years later. And, of course, this oftenresentfulawareness
broughtwhollynew politicalforcesintoplayafter1964.25

In Search oftheChileanBourgeoisie
On the phone recentlywitha nonacademicfriend,I explainedthatI
had to hang up in orderto attenda talkcalled, "In Searchofthe German
Bourgeoisie.""Whydon'ttheylook in Marbella?"he asked. Academics,
in fact,have lookedeverywhere forthe Chileanbourgeoisie.Quite a few
were apparentlyfoundin Parisin September1891 celebratingPresident
Balmaceda's suicide, althoughsome investigators have concludedthata
bourgeoisieneverexistedat all. In the last analysis,it becomes a matter
of definition.Industrialists,
merchants, and financiers clearlydid existin
Chile. The significant questionis whetherthese groupstogetheror any
one of themformeda self-conscious class withits own coherentproject
of nationaldevelopment.To elucidatethe matter,mypurposehere is to
examinethe complexand reciprocalrelationships amongindustry,social
class, and the state,while keepingin mindthe variousforeignmodels,
implicitand explicit,thatnotonlydeeplyaffected thenatureand valuesof
the Chilean upper classesat the timebut have recentlyguided academic
discussionas well. It is importanthere, then,to set out the main fea-
turesofthe constantly changing,generallyexpanding,rarelyharmonious
groupsof(mainly)menwho dominatedChile overthepast centuryand a

The Formationof a Preindustrial

Anyexplanationofclassformation leads inevitably
backto thecountry-
side, because in Chile, beginningin the midsixteenthcentury,the con-

24. This is especiallyapparentin theworkby Palma.

25. Hurtado,"La economia,"para. no. 51.

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quering Spaniardsfounda rare niche in the Americanlandscape that

remindedthemoftheirown Mediterranean world,and, in thesubsequent
threecenturies,theyformedan agrariansocietythathas been a distinc-
tivefeatureand persistentburdenin nationallife.By thelast thirdofthe
nineteenthcentury,withthe consolidationof the republic,the Chilean
leaderswho had inheritedthecolonialworldmade up a sophisticated pre-
industrialurbanelitethatfacedin twodirections at once-simultaneously
attractedby two distinctsets of values, tornby dual politicalimpulses,
and temptedby irresistible modelsofforeignconsumption. To put thisin
a certainperspective,let us considerfora momentothercolonialregimes,
say eighteenth-century India or nineteenth-century Kenyaor Indochina,
wherea thinlayerofBritishand Frenchremainedculturally distinctfrom
theconqueredmasses,and wereunsuccessful in leadingor even surviving
nationalindependencemovementsafterWorld War II. A quite differ-
ent examplemaybe foundin colonialNorthAmerica,wherethe original
European settlersobliteratedor pushed aside the nativepopulationand
segregatedtheblacks,and wherethe"creole"leaderseventuallyformeda
moreor less homogeneouscultureout oftherest-whom, ofcourse,they
led to independence.
Comparedwiththis,in Chile as in muchof Latin America,the con-
querorsand theirdescendantsoccupieda decidedlyambivalentposition.
From the beginning,fromtheirurban outpostsin America,they had
looked to Spain, and then,in the nineteenthcentury,towardFrance and
England forideas, culture,and manufactures, all the while maintaining
a mixtureofgruff affection,bemusedpaternalism, and outrightcontempt
fortheirhumblecompatriotson whomtheirown livelihooddepended.
Race was alwaysan important elementin thesocialhierarchiesofMexico
and Peru, and althoughin Chile the nativepopulationand the handful
of blacks presentin the eighteenthcenturyhave been much more as-
similatedthanin thosecountriesoverthepast twohundredyears,in the
midnineteenthcenturyChileans, too, commonlythoughtin racial and
But ifthe dominantgroupsin Chile were separatedfromthe masses
by race and culture,theywere also bound by race and culture;for if
the formerwere whiterthan the latter,theywere of the same religion
and spoke the same language. Preciselybecause theycould be confused
with the commonpeople, the upper groupsstrainedto set themselves
offfromthemby embracingwithfervoreverything European, and espe-
ciallyFrenchand English. In the independencemovementitself,and in
the foundingof the new states,one can see the curiousways that for-

26. See, forexample,Tornero,Chile,446-464; Cruchaga,Estudio,31.

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eign modelsaffectsegmentedcolonialsocieties.In theformative yearsof

the early nineteenthcentury,the Chilean elite did not turnto its own
people with the introspectivenationalismof, say, the United States in
1790 or the newlyindependentcountriesofourown day,but, rather,was
"uncompromisingly outwardlooking,avid to learn and imitateanything
comingfromFrance or Britain."Indeed, thenormalprocessofemancipa-
tionwas reversed,as "independencecame firstand nationalism followed"
-another instanceof the curiousinversionsso characteristicof societies
peripheralto, but stronglyattractedby,therhetoricofforeignmodels. It
thatParisand London came to have
is hard to exaggeratethe attraction
forthe Chilean upper classes. BenjaminVicuniaMackennathoughtthat
those two citiesdominatedthe world,"Parisbecause of her intelligence
and social influence,Londonbecause ofherwealthand materialpower.I
thinkthatifby magicthesetwoempirescould be united,Romewould be
resurrected."SergioVillalobos'srecentessayshowsin elegantand telling
detailthe attractionofParisfashionforthe Chileanelitewho carried,fre-
quentlyto ludicrousextremes,theiradorationofFrenchfood,dress,and

The fullestpictureofthenineteenth-century Chilean eliteand itscol-

lapse into frivolityand self-caricature may be foundin Gonzalo Vial's
sprawling,brilliant,intuitive,and recentHistoriade Chile. In thiswork,
the industriousand modestlandownerswho formedthe core ofthe older
elite succumbedto the temptations of urbi et orbi; the firstrepresented
by a modernizedSantiagomade moreattractive bygas and electricity,and
the second by London and Parismade moreaccessibleby steamand rail.
Newlyrichbankersand miners"decoratedthemselves" withthepurchase
ofruralestates(fundos)tojoin theelite.Andmanytraditional landowners,
previouslytied to the land in a rusticand notwhollyunaffectionate com-
pact withtheirworkers,now became absenteeowners,"consumedtheir
fundos"throughmortgageloans,builtgarishmansionsin Santiago,made
certain that nothingin the house was of local manufacture,and took
elaboratevacationsto Europe. In Vial's work,the extranjerizacion-the
"foreignizing"-oftheChileaneliteis notexplained,butit is persuasively
described. Of course, not all those in the older,austerearistocracyfell
victimto easy wealthand gave themselvesoverto sloth,ostentation, and
frivolousimitationof thingsforeign,but, by the end of the nineteenth
century,the decadentelementsofthe elite "set the tone"forthe country
as a whole. Not unnaturally, the arrivistescreatedby nitrateand com-

27. This followsVeliz, The CentralistTraditionin Latin America(Princeton,1980),

163-188. See also Villalobos,Origen y ascenso de la burguesiachilena (Santiago,1987),

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mercialwealthclamoredforadmissionto the charmedcircle,and, to the

extentthattheywere successful,widenedthespace availablefortheentry
of foreignindustrialentrepreneurs. In Vial's view,the "middleclass" in
the early decades of the twentiethcenturywas hardlya class at all, but
ratheran amorphouscollectionofpublicemployees,pettyentrepreneurs,
and small farmers,excluded frompower and subject to the withering
While the thinoligarchicveneeroflandowners,entrepreneurs, writ-
ers, and paintersknewthe streetsof Parisas well as theirown, ordinary
Chileans were unawareeven ofthe existenceoftheirown country."The
inquilino,"wrotean eyewitnessin the i86os, "has no idea whereEngland
or Spain or France mightbe. . . . [H]e believeshimselfto be indigenous
to his hacienda, and ifhe were transported to Paris or London and in-
terrogatedthereas to the countryof his birth. . . he would answernot
'Chile' but Peldehue, Chacabuco, Huechuin,or Chocalkn."29Domingo
Sarmiento,the greatArgentine writerand laterpresident,put the distinc-
tion between Europe and Americaas "Civilizationor Barbarism,"and if
the Chilean landownerhad less repugnanceforhis peons thandid his Ar-
gentinecounterpart forthe violentgaucho,he hardlysaw themas fellow
While thethinoligarchicveneeroflandowners, entrepreneurs, writers
and, paintersknew the streetsof Paris as well as theirown, ordinary
family.To a certainextent,thiswas because the Chilean countryside is a
delightful place to live, withitspastel-shadedhillsand deliciousclimate.
In the lasthalfofthenineteenthcentury,grounds,gardens,and fountains
were added to make severalhaciendasveritableshowplacesforretreats,
honeymoons, and socialbases forpolitics.So hereis yetanothercontradic-
tion:if,by the late nineteenthcentury,Chileanagriculture was becoming
increasinglycommercialized, and itsownersedgingless gingerlyintothe
rapid currentsofChilean capitalism,theattraction ofa place in the coun-
tryand the ownershipofa properestatewherearchaicworkingrelations
and obedientworkersremainedanchoredin the seventeenth centurystill
exerteda powerfulpull on both traditional ownersand the newlyrich.
This can be seen by thenew namesin listsoflandowners.
In 1882, on the eve ofthe enormousexpansionofthe Chilean export
economy,the Mercurioof Valparaisopublisheda list of the wealthiest
people in Chile, 59 "millionaires," as proofof the possibilitiesavailable
"4through orderand effortin a free country."30 Some writershave used

28. Gonzalo Vial, Historiade Chile, 3 vols. in 4 (Santiago,1981-86),4th ed., I, 477-

493, 642-683.
29. Atropos,"El inquilinoen Chile,"Revistadel Pacifico,5 (1861).
30. El Mercurio(Valparaiso),Apr.26, 1882.

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this list to show the relativeinsignificanceof agricultureas a generator

of individualwealth,since less thanhalfwere landowners.But the more
interestingpoint is not thatonly 20 made theirfortunein agriculture,
but thatthe remaining39-designated as miners,bankers,and capital-
ists-subsequently investedtheirearningsin ruralestates. This would
be comparableto AndrewCarnegie sinkinghis steel income into Scar-
let O'Hara's plantation.The analogymayseem far-fetched in the United
States, because by the time Pittsburgh steel was one of the engines of
industrialization,the southernplantationeconomyhad been shatteredby
the Civil War. But in Chile, at the comparablemomentin itshistory,the
"South" had won. This is perhapsmore truein a culturalthan a politi-
cal sense, forifit is truethatthe 1891 Civil War in Chile keptthe great
landownersin the politicalsaddle, theywere dependenton coalitionand
alliance withotherfactions;but thereis no doubtingthe powerfulsocial
model exertedby the landowningclass alongitsurban-rural nexus.
The flowof capitalfrommining,banking,and even industryto the
countrysideis a long-acknowledged impression,indeed a commonplace
in historicalliteratureand even, as Isabel Allende shows in her recent
The House of the Spirits,an enduringnotionin fictionas well. There is
no close economicanalysisthatmightshowthe relativeratesofprofitin
agricultureand industry,or the degree to whichthis patternof invest-
mentinhibitedthe formation ofcapital.But two elementsofthisprocess
should be emphasized. First,the developmentofthe nitrateexportsec-
torwas suddenand accidental,inducedfromexternaldemand,nota slow
and organicoutgrowth ofChilean society;thusit occurredat a timewhen
the values of a conventionallanded societywere stilldominant.Second,
the rise ofmining,and latereven ofindustry, did notelevateto political
powera class derivingfromthoseactivities.Miningwas largelyunderthe
controlofBritishinvestors,and, laterforcopper,ofNorthAmericans.To
be sure, some individualChileansoperatedmines,but, morecommonly,
Chileans participatedas workersand throughthe mediationof the state
which taxed exportsand channeledrevenueintoprivateand public ac-
tivities.Chilean bankers,lawyers,and accountantsin support,but on the
fringe,ofnitrateand copperminingmade money,as did government offi-
cials in the new bureaucraciessurrounding mining,yetthe road to social
prominenceforthemstillled throughownershipofland.
Industry,as we have seen, grew steadilyin these years,but as we
have also seen, and just as in mining,Chileansthemselvesdid not form
the core of thisemergingsector.Thus, the stronggrowthin miningand
industryhad theparadoxicaleffectofconsolidating theagrarianoligarchy,
an indicationofwhichcan be seen in the economicinterestsofCongress.
About one-halfofall deputiesand senatorsin 1875includedamongtheir

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assets a large estate, and aftera quartercenturyof strongminingand

industrialgrowth,nearly6o percentdid so.31
In 18go-g9, thenewsocialforcesgeneratedbylatenineteenth-century
developmentcame intoconflictin a fiercecivilwar thatleftsome io,ooo
dead and the effortsof a progressiveand somewhatquixoticpresident
in ruins. Balmaceda's attemptto promotea "bourgeoisrevolution"from
above foundsupportamongsome entrepreneurs in industryand mining
as the Chilean dominantclasses split,as theyhad in 1851, along eco-
nomiclines. Balmaceda'sdefeatleftBritishinterestsintactin the nitrate
north,and denied Chilean copper minersthe state supportthatmight
have enabled themto developthe huge depositsoflower-gradeore that
came underthe controlof Kennicottand Anacondaa decade or so later.
Whetherindustry wouldhave takena differentdevelopmentpathhad the
Balmacedistaswon the civil war is anotherquestion.32For beneath the
political strugglesover economicpolicywere deeper, more intractable
culturalfeaturesthatbringintoquestionthe abilityof Chileans to form
a genuinebourgeoisieand carrythrougha programofmoderneconomic
development.For these moresubtle,imprecise,yetundoubtedlyfunda-
mentalissues, let us turnbrieflyto a numberof Chileanswho, over the
past century,have reflectedon them.

In 1878, a brilliantprofessor,economist,and memberof Congress,
Miguel Cruchaga,assembledthe data thenavailableon population,tax
revenue,and naturalresources,and, together witha close studyoflaw and
legislationon economicmatters,producedthe best nineteenth-century
analysisof the Chilean economy.Cruchaga'sunderstanding of industrial
growthsoundsforall the worldlike the schemesset out a hundredyears
later by developmenteconomists:"From primitivesocieties,"he wrote,
"the slow but free actionof men leads to agriculture,then to domestic
industriesauxiliaryto agriculture,and the slow growthof urbanpopula-
tionand industry." An improvedagriculture, then,permitsgreateroutput
withless labor,and workersare freedformoreindustryuntilfinallythe
process "procuresforconcentratedurban populationsthe joys of a flo-
rescentcivilization."Cruchagawas also painfully awareofhow the "path
of our own industrialorganizationis notablydifferent fromthatof other
countries."The explanationfor Cruchagaand otherliberals of his age

31. Bauer, Chilean Rural Society,216. See foragreementin principlebut withquali-

fications,Karen Remmer,PartyCompetition in Argentinaand Chile: PoliticalRecruitment
and PublicPolicy,189o-1z930(Lincoln,1984).
32. This follows Zeitlin, Civil Wars in Chile, 71-216.

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began withthe natureof Spanishcolonialism."We torefromour cities

the shieldof Castile but we did not get rid of . . . the economicsystem
thatwas imposedupon us." By this,he meantthe systemoflargeestates
and theirsubservientlabor force,the emphasison mining,the lack of
industry,too manydoctorsand lawyersand no businessmen,and waste-
ful,conspicuousconsumption;"the spiritof savingdid not arriveat our
shores."Unlikehis contemporaries in MexicoorColombia,Cruchagadoes
not listthe churchamonghis obstaclesto development,perhapsbecause
in peripheralChile the churchwas less economicallyimportantthan in
the core areas ofSpanishAmerica.
Writingon the eve ofthe War ofthe Pacific(1879-84), whichgained
forChile the rich miningdistrictof the north,Cruchagacould hardly
have imaginedthe impactthatnitrateand copperexportswould have on
the structureof development.Withintwo decades, nitrateexportswere
the powerfulmotorofthe Chilean economy,and, althoughBritishinves-
torscame to dominatethisindustry(Chileanscontrolledbetween20 and
40 percent as of Lgoo),a steadilyincreasingtax on exportsyielded to
the Chilean statea torrentof revenuethatwas directedintoeducation,
railroads,and urbanmodernization.By 1914,consularreportsfromsev-
eral countries,booksbyenthusiastic investors'
travelers, handbooks,and a
numberofstunning,slick-paperpromotional volumesall gave theimpres-
sion, superficialas it turnedout, thatChile, amongall nationsin Latin
America,was especiallyblessedand clearlyon the road to prosperity and
the "enjoymentofa flourishing civilization."34
In the midstof this "dance of the millions,"the high point of what
would later be called "developmenttowardthe outside,"anotherbril-
liantcritic,the acute, maddening,trenchant, stubbornFranciscoEncina,
whose cantankerous twenty-volume Historiade Chile is one ofthe monu-
mentsof Chilean historiography, wrotea littlebook called Nuestrainfe
rioridadeconomica:Sus causas, sus consecuencias(1911), whichaimed
to delve beneath the gloss of apparentwell-beingto whathe called the
"veritablepathologicalstate"ofChilean development.35 Encina had little
or the gold standardand the inadequacyof the bankingsystem.At the
time,Encina wrote,manyChileans-"distinguishedeconomistsand poli-
ticians"-were dividedovertheissueoftariffs. For many,the"excessively

33. Cruchaga, Estudio, vii, 213, and passim.

34. For example,the exceptionally handsomeTwentieth CenturyImpressionsof Chile
(London, 1915);Chile of Today;Its Cornmrce,Its Productionand Its Resources(New York,
1907); etc.
econ6onica:Sus causas, sus consecuencias
35. FranciscoEncina, Nuestrainferioridad
(Santiago, 1912, 1972), prologue by Eduardo Moore, 5-18 and passim.

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protectionist"ratesrestrictedeconomicgrowth.The currentorthodoxy,
ofcourse,derivedfromthepowerfulideas ofcomparative advantage:high
tariffsinhibitedthe acquisitionof equipmentnecessaryforminingand
agriculturalproduction,raised prices of importsand artificially created
a numberof local industriesthatproduceditemsof bad qualityat high
prices. Againstthe freetradearguments, a vocal and growingminority,
prominentamongthemMalaquias Concha and TancredoPinochet,cited
FrederickList and pointedout thatno countryhad managedto indus-
trializewithoutprotectionfromcompetition,and pushed fora political
economythatwould createlocal industry.
Encina, althougha qualifiedprotectionist, rejected all the conven-
tional argumentsas merelysuperficialand transitory. Economies had
flourishedor decayed underbothmetallicand paper moneyregimes,he
pointedout, and, moreover,economnic historyrevealedno exampleof a
countryruinedbyexcessivetariff Atthesametime,theexperi-
enced and keen-eyedEncina observedthatin Chile the mostprotected
industriesdid not fareso well as those exposed to foreigncompetition.
In fact,the Chilean tariff
ofpartialprotection was neitherchichani limo-
nada-neither fishnor fowl-and did whateverit was intendedto do
imperfectly. In anycase, "oureconomicinferiority derivesfromverydif-
ferentcauses." For Encina, the causes were less complicatedthan they
seemed to others,but at the same time deeper and less susceptibleof
solution.They lay in the social psychologyof the people themselves,in
parta resultofthe "detestableand inadequateeducationtheyreceive."If
Chileans were vigoroussoldiers,and moreor less capable ofagriculture,
theytotallylackedtherequirements life.Althoughitis diffi-
cult to quantifyor even to researchthequestionofvalues,morethanone
sharp-eyedChilean,includingbothCruchagaand Encina,are persuasive
in theirstrongly held opinionthattheircountrymen in thelate nineteenth
century"lacked absolutely"the values and aptitudesrequiredby indus-
trialsociety.Encina bitterlyremarkedon theironiccontradiction ofChile
at the turnof the century:thata countryinadequateforagricultureand
suitableforindustryshouldbe inhabitedby people avid forthe firstand
incompetentforthe latter.36

Capital formationis an importantelementin industrialgrowth,and
much has been writtenabout the perniciouseffectof unequal exchange
and adversetermsoftradeon societiesperipheralto thecapitalistcenters.

36. Encina,Nutestra

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The effectofpatternsofconsumption as distinctfrompatternsofproduc-

tion-the impactof "importeconomies"as well as exporteconomies-
has been less noted. But, once again,we mustrecall thatthe enormous
increase in nationalincomecreatedby the exporteconomy,distributed
unequallytowardthe upper reachesof Chilean society,tookplace while
the country'sown productivebase was primitive.The models forcon-
sumption,and the goods themselves,were foundoutside the country,
especially in Europe, and, thus, the Janus-faced Chilean elite, whose
social and politicalambivalencehas alreadybeen discussed,foundit en-
tirelynaturalto adopt the tastesand fashionsofParisand London,while
turninga disdainful eye towardtheinadequateproductsofitsownpeople.
Educated Chileansread and traveled,but,paradoxically, theiradora-
tion of Europe diminishedcapitalformation at home. As theirincomes
grew,theywanted"to dresstheirpeasantswithponchosofEnglishwool,
ride in saddles workedby the best leathermakersof London, drinkreal
champagne,and lighttheirmansionswithFlorentinelamps. At night,
theyslept in thebest Englishfurniture, betweensheetsofIrishlinenand
coveredwithEnglishblankets.Theirsilkshirtscame fromItaly,thejew-
els thatadornedtheirwomenfromLondon."37Horace Rumbold,British
consul in Santiago,was impressed"by the clatterof a smartbrougham
or well-appointedbarouchethatmightfigurewithcreditin the Bois de
Boulogne . . . and well-dressed,refinedlookingwomen glidingalong"
where"the modelsofeleganceare all French."But Rumboldalso noticed
thatthe luxuryofSantiagowas "outofdue proportion withthepowerand
resourcesofthe countryofwhichit is the capital."Alongwithan immod-
est tasteforforeigngoods was contemptforlocal products."When price
and qualityare the same,we invariably preferthearticleofforeignprove-
nance,"wroteEncina, and, in fact,"fora local manufacturerto attemptto
sell his producthe mustattachlabels thatsimulateforeignorigin."38
The greatestzeal forforeigngoods was foundamongthe newlyrich
bankersand miners,thrustto unprecedentedeconomicheightsby the
nitrateboom, but theywere quicklyimitatedby nearly"the entirehigh
society."39The twomaincategoriesofluxuryconsumption-bothin effect
"imports"-wereforeigngoods and foreigntravel.There is no systematic
quantitativeor comparativestudyofeither,butoutragedcriticsand joyful

37. Veliz, "Mesa de trespatas,"234.

38. Horace Rumbold,Reportby Mr. Rumboldon the Progressand General Condi-
tion of Chile (London, 1876), 365-366. Of the $37,000,000 in imports in 1873, $6,385,000
consistedof "pure luxury"-$i,ooo,ooo in silkgoods, $1,400,000in liquors,etc.; Encina,
Inferioridad, 10-11.
39. Vial, Historiade Chile, I, 642-652. Vial believes,or perhapsfeels,thata handfulof
older,austere"traditional"familiesresistedthe newestfads.

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consumersalikeagreedat thetimethatspendingofall kindshad reached

unimaginedlevels. Vial detailsthe multitudeof "palaces" and huge new
houses ofFrenchdesignand importedfurnishings, theimportsofsilkand
velvet,and the pianosand jewels. Chileans,in otherwords,had acquired
French tastes;both Chileans and Frenchpurchasedthe same products.
Unfortunately forChile, however,theproductswere made in France and
led to French,not Chilean, growth.A finalexamplerevealsboth the ex-
tranjerizacionof the Chilean elite and thejuxtapositionof social times.
In 1887, Don FranciscoUndurragaleftwithhis wifeand severalchildren
(one of thema fewmonthsold) forEurope. They were accompaniedon
the ocean linerby the children'stutor,a cook,the wet nurse,a recently
deliveredfemaleburro(in case the wet nursefailed),togetherwith 50
bales ofhay forthe burro'sfeedduringthelongjourney.Vial concludes,
with Encina, thatthe elite's self-abandonment to luxuryconsumptionat
the turnof the centurycreated a veritablefinancial"hemorrhage"that
undercutChilean economicexpansion.40
Given the class structure,it followsthatthe tastesand patternsof
consumptiondeveloped by the Chilean elite as a resultof its veneration
forEuropean culturewere slow to diffuseintothe societyas a whole. In
Great Britain,fashionand consumptionspread rapidlyfromLondon to
"penetrateeven the villagesand farmhouses." But thispattern,deriving
not onlyfromhigherand moreevenlydistributedincomesbut also from
low barriersto mobilityand looserdefinitionsofstatus,was unusualeven
in European economies.In this,as in so manyothersocialfeatures,Chile
resemblesthe patternsof Eastern Europe, especiallyin termsof social
referencegroups(likeChileans,thenineteenth-century elitesofHungary
and Rumanialooked to Frenchand Englishhautesbourgeoisiesfortheir
models) and in the deep culturaldivisionsbetweenurbai)and ruralsoci-
eties.4' As we moveintothe twentieth century,ofcourse,thesedivisions

40. Ibid., 643, 650. The relationishipof consuimptionto capitalformationl

occupies a
prominentplace in the earlyworkon economicdevelopment.See, forexample, Ragnar
Nurkse,Problemsof Capital Formationitl Underdeveloped Cou-ntries(New York,1953) or
JamesDuesenberry,Income, Saving and the Theoryof ConsumerBehavior(Cambridge,
1949), niotto mentionThorsteinVeblen, The Theoryof the Leisure Class (1899). Since
macroeconomicdata have not been availableuntilrecenitdecades, it is difficult to gauge
the relativeimportanceat the turnof the cenitury of savinigs,investment,and conlsump-
tion. Nor is itpresentlypossibleto determinewhetherChileaneliteconsumption was really
exceptionalor simplypartofa largerlate niineteenith-centurypattern.
41. See David Landes, The UnboundPrometheus (Cambridge,1969),46-49 and Neil
McKendrick,JohnBrewer,and J. H. Plumb,The Birthof a ConsumerSociety:The Com-
mercializationof Eighteenth-Century England (Bloomington,1982), 95-97. For Hungary,
see the fascinatingparallelsin AndrewC. Janos,The Politicsof Backwardnessin Hungary,
1825-1945 (Princeton,1982), 121-142 and DaniielChirot,Social Change in a Peripheral
Society(New York,1976), 119-150.

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begin to break down and more homogeneouspatternsof consumption

The enormouslyskewedpatternofincomedistribution apparentlydid
not encourage saving and capital formation among the Chilean upper
classes, althoughthis factor like manyothers is difficult to quantify.
Cruchagabelieved thatthe absence of a "spiritof saving"in Chile was
a deep-seated problemthatderivedfromIberian precedent.Whatever
the case, he believed thatChile, in the 1870s, was "one of the less pre-
pared" in the worldto undertakethe "laborofsaving,"because the more
educated partofthepopulationhad "deeplyrootedhabits"thatwere con-
traryto those needed forthe formation of capital. Moreover,the effect
ofluxuryconsumption was aggravatedby "themarkedpreferenceforfor-
eign over local products,one of the principalreasonsforthe persistent
tradedeficit."42"These generalhabits,"Cruchaganotedwryly,"have not
been improvedby legislation."By theend ofthecentury,as trade,indus-
try,and miningwere passingintoforeignhandsand the "socialproblem"
emergingin urbanslums,the Chileaneliteacquireditsenduringfameas
a clase derrochadoraor "squanderingclass,"an imagethatis caughtbest
perhapsin Luis OrregoLuco's brilliantCasa grande(1907)butappearsin
morethanone contemporary novel,and is givenhighreliefin the works
we have seen.43Towardthe end of the century,the futurerectorof the
NationalUniversity summedup thevoluntary dilemmaofhis countrymen:
theyare, he said, "civilizedconsumersbutprimitive producers."

Failed BourgeoisRevolution?
Does this complexof attitudeand practiceindicatethe absence of a
"self-conscious,national,industrialbourgeoisie"dedicatedto capitalfor-
mation,entrepreneurship, and growth? Thisfundamental conclusiongrew

42. Cruchaga,Estudio, 206; cf. Landes, The UnboundPrometheus, 49 forEuropean

43. MarcialGonzalez, "Nuestroenemigoel lujo,"in his Estudiosecon6rnicos (Saiitiago,
1889), 429-462. Encina is scathingon thispointanidcites severalwritersin his stupport.
As earlyas 1857, forexample,a Frencheconomistand influential visitingprofessorat the
University ofChile wrote,"a largepartofthenew inicome[fromexportofgrainto Californlia
and Australia]has been spentin increasingthepleasureoftheproprietors. A largenlumber
ofthesehavebuiltproudhouses,boughtsumptuousfurniture, anidtheluxuryoftheirwives'
dresseshas incrediblyprogressedin a fewshortyears."Whereasthe upper classes spend
everything on carriagesand jewels, the"workersblowitall in a singlegameor drinking." In
Encinia'sowntime(1911), thegildedyouthwas offto Paristo squandertheirpatrimony, anid,
at home,"everywhere appearsthethirstforluxury,to buildmansions,to spendon carriages
and jewels." Encina, Nuestrainferioridad,56-6o. Villalobos,Origeny ascenso,adds to this
interpretation,emphasizingthe developmentofirresponsible behaviorafteri88o; see L05-
LLo. See also Jos6Bengoa, El poder y la subordinaci6n(Santiago,1988), 211-212 formore
detailon extraordinary consumption.

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out ofthe agonizingreappraisalbroughtaboutby thefailureofpOst-1930

policies of industrialization,in which the state endeavoredto promote
somewhatmoreenergetically thanbefore,throughtaxconcessions,pub-
lic investment,and tariff protection,the industriesthatwould produce
at home the itemspreviouslyimported.By the mid-ig6os,the "import
substitution"economyhad leveled offto stagnation,and a numberof
people looked forexplanationsbeyondthe analysesassociatedwith the
EconomicCommissionforLatinAmerica(CEPAL in itsSpanishacronym)
or the emergingdependencyschool. Like Encina in 1911, theysought
explanationless in economicthanin the deeper,and unfortunately more
For Claudio Veliz, industrialization in Chile was "neitherthe prod-
uct of the activitiesofa risingindustrialbourgeoisienorhas it produced
one." Rather,in Chile, the state,or a kindofbourgeoisied'affairesderiv-
ing froma preindustrial urbanculture,supported(especiallyafter1930)
the process of industrialization: it "grantedlicenses,encourageddoubt-
ful ventures,and channeledforeignexchangeand public creditin the
directionof. . . friends,relatives,and politicalsupporters."44 Yet, Veliz
continues,"therewas no culturalor religiousinfrastructure behind [this
elite's] associationwithindustrialventures,therehad been no commit-
mentto austerity or generalreforms and improvements in theeducational
systemleadingto substantial technological innovation,butmostimportant
ofall therewas no culturalethosassociatedwiththe taskofindustrializa-
tion."Therewas consequentlyno "creativity in mechanicalcraftsmanship,
industrialdesign,technicalinnovation...." "It would not be possibleto
writea book on the artof Chilean industrialization," he wrote,"because
thereis none thatis notunashamedlyderivativeon a straightforward imi-
tationofforeignindustrialdesign."Duringthesesame years(pOst-1930),
Veliz pointsout, Latin Americaproduced"toweringfiguresin the arts,
literature,music,and architecture, butnonewhocouldwithouthesitation
be identifiedwitha 'cultureofa risingindustrialbourgeoisie'."Nowhere
in the voluminousworkofPablo Neruda,forexample,does theword"in-
dustry"appear. Unable or unwillingto createtheirown industrialculture
or a set of values, Chilean industrialists were obliged "to embrace the
cultureofthe traditional upper classes."45The politicalforceofa nascent
industry was therefore blunted,and the"bourgeoisrevolution" notcarried
But what in all thisis Veliz's model?Whatculturaland politicalcon-

44. V6liz, "Introduction"to Obstaclesto Change in Latin America(London, 1965), 6

and CentralistTradition,26s, 278-279.
45. V6liz, CentralistTradition,265, 274. V6liz generalizesto all ofLatinAmerica,but
he drawsprimarily on his knowledgeofChile.

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ditionswould have permittedChileansto carrythrougha satisfactory de-

velopment?The model is obviouslyGreat Britainand WesternEurope,
homelandsof the "conqueringbourgeoisies."There, in the course of the
nineteenthcentury,an ever morepowerfulindustrialsocietyis supposed
to have displaced the landowningaristocraciesin politics,and then im-
posed its culturalvalues on the nationas a whole.46Presumably,the ab-
sence ofthisprocessaccountsforthe obstaclesto industrialdevelopment
in Chile, where, instead,landownersclungto theirpoliticalpower or
at least exerciseda powerfulveto in mattersimportant to them intothe
midtwentieth centuryand where,as Veliz'seloquentargument persuades,
no clearindustrialethosemerged.Iftherewas a "failedbourgeoisie,"what
woulda successfulbourgeoisrevolution in Chile actuallyhave lookedlike?
For Zeitlin,a successfulbourgeoisrevolutionin Chile would have re-
flectedthe powerfulmininginterestsalreadypresentin the Balmaceda
government, and furtheredtheirdevelopmentby promoting at public ex-
pense the infrastructure necessaryto reduce the cost oftransporting and
processingores, and reducingthe costs of coal togetherwiththe estab-
lishmentofa statebankfortheiruse.47The loss by Chileansoftheirown
copper miningto NorthAmericansin the earlytwentiethcenturyis one
ofZeitlin'skeyexplanationsofChile's "retardedcapitalistdevelopment."
If the "bourgeoisrevolutionfromabove" failedas a consequence of
the 1891 civil war, and Chilean mine ownerssubsequentlygave way to
foreigndomination,the state did providesubstantialsupportforindus-
try.Six yearsafterthe defeatof Balmaceda,the tariff of 1897 increased
the importdutyon mostitemsto 6o percent,moreprotectionthan re-
quested ten yearsearlierby the Sociedad de FomentoFabril(SOFOFA),
and thiswas followedby generaltariff reformsin 1916, 1921, and 1928,
"each witha graduallyhigherlevelofprotection."48 It is truethatdutyon
specificitemsfluctuatedwiththe pressurebroughtto bear on Congress
by interestgroups-high dutyon refinedsugarto protecttwo powerful
local refineries,the freeentryofcottonthreadbecause powerfulimport
houses had local knitwearfactories,forexample but althoughthe state
did littleto help develop a capitalgoods sector,it was by no means in-
different to the promotionofotherindustry. In fact,it made some efforts
even in basic industry.Offering incentivesto Frenchinvestorsin ironand
steel worksin 1905 and in 1924, the statebegan to investdirectlyin in-
dustryand marketingorganization.49 Nor is it by any meanscertainthat
more decisiveintervention by the statein the 189oswould have acceler-

46. Ibid., 248.

47. Zeitlin,The CivilWars, 198,2o2.
48. Kirsch,Industrial,133; Hurtado,La econornia, para. i6.
49. ConclusionofKirsch,Industrial, 151; see also 145-146.

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ated a bourgeoisrevolution.Encina,a championofeconomicnationalism,

noticed in his 1911 essay that"protectedindustrieshave not developed
with greatervitalitythanthoseopen to foreigncompetition."50 In all of
the recentworksofKirsch,Mufioz,and Hurtado,it is difficult to imagine
thatthe courseofChilean industrialdevelopment wouldhave been much
differenthad the "bourgeoispoliticalrevolutionfromabove" triumphed
in 1891. This bringsus back fullcircle to the peculiarway thatChile's
sharplysegmentedsocietyrespondedto the temptations offeredby old
values and new possibilitiesofconsumption.

NewerPerspectiveson ChileanDevelopnient
Throughoutthe discussionof Chile's industrial"failure"runsthe as-
sumptionof a normalmodel, thatsocial classes in modernizingsocieties
inevitablycome into conflictresultingin the triumphof the bourgeois
revolutionin some cases and its failurein others.England and France
providethe classic examplesof success. But in recentyears,thismodel
itselfhas come underheavyattack,and is beingessentiallydemolishedby
a new generationofhistoriansand social scientists.Today,as GeoffEley
writes,"few historiansoutside the pages of the Annales Historiquesde
la RevolutionFranQaisewould call the FrenchRevolutionflatlya "bour-
geois revolution"or the ancien regine a "feudalsociety"with a com-
pletelyclear conscience.Similarly,"Christopher Hill standsincreasingly
alone in maintaining the same definitionoftheEnglishRevolution.' On
closer examinationit appears thatno industrialclass in WesternEurope
in the nineteenthcenturywas able to rule withoutalliance withthe ter-
ritorialnobilityor agrarianclasses; few newlyrichfailedto emulateor
aspire to join aristocraticsociety;and if"we takethe 'rise ofbourgeoisie'
to mean the ascendancyof a unifiedliberal-democratic worldview, ex-
pressed throughorganizedclass consciousness. . . and secured through
controlof the statethen . . . the conceptmightas well be abandoned."
The "failureof a bourgeoisrevolution"in nineteenth-century Germany
has long been seen in starkcontrastto England,France, and the United
States,but Eley and Blackburnmakea strongargumentthatneitherGer-
manynor Britainpossessed a politicallytriumphant bourgeoisie,and, if
this is the case, "whereon earthhas the bourgeoisieever 'risen'?"If re-
cent interpretations of European historyare correct,then it seems that
historians and economistsand sociologists-ofChile are workingwitha

50. Encina, Nuestrainferioridad,

51. David Blackbournand GeoffEley, The Peculiaritiesof Germant
History(New York
and Oxford,1984),52.

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model ofa "normalpattern"ofsocialdevelopmentin Englandand France

whichis notaccepted by historians ofthosecountries."52
Seen in the more nuanced lightof recentEuropean interpretations,
Chile's modernhistorythus does not seem to be a case of "failure"or
aberrantexperience.Chilean mineownerssanktheirearningsintorural
estates,but so did the Wedgewoods;the industrialarrivistesstrovefor
acceptance by the landed nobilitiesor oligarchiesin Europe as well as in
Chile; and ifAndrewCarnegiedid not buy a greatestatein the United
States it was because none was readilyavailable. Certainlythere are
enough examples of conspicuousconsumptionamong the Mellons and
Vanderbiltsin this country,and, in a longerand comparativeperspec-
tive,we can see nowthatthelongpassagefromagriculture to industryin
Europe and Americawas uneven,discontinuous, and evolutionary, even
thoughthereis no doubtthatthe processwas different in the periphery
thanin the homelandofcapitalism.
Of course, there is no reason why Chile should conformto, or be
measured against,any specificmodel, nor shouldits historicaldevelop-
mentnecessarilyoccur at the same rateor in the same centuryas other
countries.But in thisveryunevennessoftheglobaleconomy,whena seg-
mentofthe peripheralsocietyreflectsthe tastesand values notofitsown
countrymen but ofthe distantmetropolis,important distortions are intro-
duced intothe processofindustrialdevelopment.I have triedto indicate
the peculiar featuresin the formation of the Chilean elite thatcontrib-
ute to thatdistortion.Since elementsof the patterndiscussedhere can
be discerned in othercountries,distortionin Chile is a matterof de-
gree; explanation,moreover,is made moredifficult by the absence up to
now ofquantitative and comparativeinformation.
Why did a balanced and sustainedindustrialization not take place in
Chile? As in the case of all importanthistoricalquestions,the reader is
leftwithtentativeand partialexplanation.

52. Ibid.,138, 170.

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