A BRIEF HISTORY OF CHILE
CREDIT: The History of Chile, John L. Rector
CREDIT: Structure and Structural Change in the Chilean Economy. Aroca and Hewings, Editors
Ever since graduate school, I have been tracking Chile’s rise. It has emerged today as one of the most economically and socially stable countries in the world today.
Its history is the stuff of a great novel: adventure and adventurers, exploring this far-away place; tragedy and triumph, as the adventurers encountered indigenous people who rankled at their attempts to put down roots; blood and guts; expeditions in search of gold; high seas and mountain passes, with pirates and traders and trading posts.
There is high drama, as the country is rocked by a Spanish Crown with dreams of conquest and a proud indigenous population outraged by their attempts to lay claim to their land.
Later, there is more high drama, as the country is rocked by far left wing socialism and then rocked again by far-right-wing dictatorship.
Its a great story. Brutal defeats. Starts and stops. Blood and guts. Rebels and loyalists. Exploiters and exploited. Expeditions in search of gold. Later, expeditions in search of copper and nitrates and coal.
A great novel deserves a great landscape, and Chile meets the test. Chile is beautiful. It is a magnificent aggregation of landscapes, climates and cultures. The country’s landscapes range from mountains to deserts, and from forests to coastlines, straits, harbors, and rivers. Glaciers. And islands everywhere.
This history starts from the beginning. However, this section anchors the story in today.
Sebastian Pinera won the presidential election in December 2017, having served as president for four years until 2014.
He is a billionaire conservative. The conservative movement in the country holds power for now, but the country has experienced wild swings in power from right to left over the years.
Pinera presides today over a proud country – and rightly so.
Chile is a beautiful country. It is crazy-making because it is so long (2,670 miles long). And yet, for all that length, it is narrow (217 miles wide at its widest, with an average width of 110 miles). It sits at the southwest corner of South America. It is among the longest countries in the world.
The country has 18 million people, a GDP of $451 billion, with a 2.2% compounded 5-year growth. This 2% growth is actually a slow-down from recent history, when growth was around 5% annually – high by any standard.
Importantly, it enjoys a per capita income of $24,537 – which classifies it globally as “upper middle-income”.
Chile has well defined borders, which make it secure. The long Eastern border is with Argentina along the Andes mountains. The northern border was defined years ago, though a war with Peru and Bolivia, which Chile won. The southern border is equally well-defined, as disputes with Argentina were resolved in 1984.
Most of the Earth’s climates can be found in Chile. Over 10 have been identified in Chile. This wide range of climates can be divided into three general zones: the desert provinces of the north, central Chile (with a Mediterranean climate), and the humid regions of the south. Each of the three zones have different ecosystems, topography, and vegetation.
Chile today is the beneficiary of sound policy. School policy has brought a 96%+ literacy (ages 15 and over). Transportation policy has brought it good roads, 21 airports, and excellent bus transportation. Social policy has sharply curtailed the income inequality that had plagued the country. Chile proudly reached all of the UN’s “Millenium Development Goals” by their target date, 2015. Reduction of poverty was a key goal.
Chile has sound health policies. Historical investments in sanitation, nutrition, potable water, and basic education dating back to the 1920s have resulted in significant reductions in communicable diseases. Its health profile mirror that of a developed country, with chronic disease as its remaining challenge.
Chile has sound economic policies. Chile today is the beneficiary economic reforms that were instituted in the 1970’s – over 45 years ago. Termed “neoliberalism”, economic policy set the country on a growth path of high exports, high investment, improving wages and working conditions.
It was not easy. The early years after reform created many doubters.
Economists trace the fits and starts that followed economic reform: a sharp recession followed the reforms; investment averaged only 16% in the ten year period 1974 – 1984; a turnaround followed, and investment grew strongly – averaging 25% of GDP in a decade-long boom from 1987 – 1998.
From 2003 through 2013, real growth averaged almost 5% per year, despite a slight contraction in 2009 that resulted from the global financial crisis. Growth slowed to 2% in the last five years.
It’s prosperity is hailed by conservative commentators. The Heritage Foundation says: “Chile’s economic freedom score is 75.4, making its economy the 18th freest in the 2019 Index. Its overall score has increased by 0.2 point, with increases in labor freedom, business freedom, and monetary freedom offsetting a steep decline in judicial effectiveness. Chile is ranked 3rd among 32 countries in the Americas region, and its overall score is above the regional and world averages.”
There is a strong tradition of music, poetry, art, artisan products, and literature. Chileans support museums, art galleries, outdoor fairs, and libraries that maintain these traditions. Folk music traditions are pervasive. Chile is proud of its two Nobel Prize winners in literature, Pablo Neruda and Gabriela Mistral.
A History of Political Swings from Left to Right and Back
For 20 years, the country was governed by a center-left coalition, which came to an end in 2010. Conservatives took power from 2010-2014, and the left coalition resumed power in 2014. Pinera came back to power for the right in 2017.
From 1973 – 1990 Pinochet ruled as a right wing dictator of the country. Much has been written about this traumatic period in the Country’s history.
American government worried for years about the ascendancy of communism in Chile. This worry reached a zenith when Salvatore Allende was elected as a socialist in 1970.
Chile was a seesaw politically for years. During World War II, the government veered left, attempting to emulate the social policies of FDR in America.
Chile has struggled to maintain a kinder and gentler face to the world. With Pinochet, the country endured 17 long years of brutal dictatorship. This was followed by 20 years of center-left leadership. Then, the country elected a far right candidate, followed by a return of the center-left. All the while, Chile was growing economically, thanks to the implementation of economic theories attributed to Milton Friedman and economics form the University of Chicago. He actually visited Chile in 1975.
For all of his brutality, Pinochet is credited with instituting the economic reforms that set Chile on the course it enjoys to this day.
The Spanish arrived in the early 16th century, and was ruled as a crown colony until the 19th century. Chile declared its independence from Spain in 1810, but never achieved that independence until 1818.
The history of Spanish rule roughly tracks the history of Spanish rule in all of Latin America. The history includes outrageous abuses by the “encamienda” system. This system was a methodology employed by Spain wherever they assumed lands by conquest. It did not include land grants (which is interesting) but the results were like land grants. The system involved granting to encamindors the right to subjugate local indigenous labor. It began as its name implies, to “entrust”. But greed and natural evolution took hold, and it became a form of enslavement, where indigenous people traded protection for commitments to pay – usually in the form of the fruits of labor (farmed good, for example).
Before Spanish Arrival
Prior to the arrival of the Spanish in the 16th century, the Incas inhabited northern Chile for nearly a century while an indigenous people, the Mapuche, inhabited central and southern Chile. Only traces of the Inca civilization remain, but the Mapuche continue to have a significant presence in Southern Chile. Their history is one of continuous rebellion against Spanish rule. Their rebellious nature was so strong that Spanish conquerors actually gave them autonomy for over 250 years,
1500’s – Spanish adventurers arrive in Chile and fight with indigenous peoples, especially the Incas and Mapuche (Araucanians). Magellan came from the South (he was looking for Asia), and Diego de Almagro came from the north. Charles V granted Almagro a charter authorizing him to explore and conquer a new territory called “New Toledo”. This effort failed, as he lost battles with Pizzaro of Peru. It was Pedro Valdivia, chartered by Pizzaro, who led men south to plant down roots in Santiago. Later, he discovered Mapuche gold mines north of Valpariso. He died at the hands of a Mapuche rebellion. Were it not for Francisco Villagra, who put down the rebellion, the entire effort of the Spanish in Santiago would have been lost. His efforts were not rewarded by the Crown, who appointed Hurtado de Mendoza (the son of the Peruvian viceroy) as Governor of Chile.
1600’s – 1800’s – Spanish struggles to maintain control. In 1608, facing massive Mapuche rebellion, the King ordered the enslavement of the Mapuche. This act was poorly received, to say the least, and brought on two centuries of fierce rebellion. Their struggles were compounded when the Dutch and English sent their own adventurers to attempt to seize control. In the 1640’s, the Governor granted the Mapuche sovereignty of their territories to the south, but this peace plan did not last long. The only resolution that was lasting was found in trade. Spanish and Mapuche became skilled at bartering goods.
Early 1800’s – Locals try to capitalize on Napoleon’s takeover of Spain by declaring independence, and are crushed by Napoleonic forces. But they are ultimately victorious, thanks to the “Army of the Andes”. Military leaders Jose de San Martin and Bernardo O’Higgins are heroes of the independence movement. Bernardo O’HIggins becomes first leader of the country in 1818.
1823 – 1830 – Civil war, a fight between “federalists” and “centralists”. The conservative centralists win.
1851-61 – New constitution. President Manuel Montt liberalises constitution and reduces privileges of landowners and church.
1879-84 – “War of the Pacific”, which Chile wins. Chile increases its territory by one third after it defeats Peru and Bolivia in War of the Pacific. It annexes two mineral rich provinces to the north and cuts Bolivia’s access to the Pacific.
Late 19th century – Pacification of Araucanians paves way for European immigration; large-scale mining of nitrate and copper begins in the North. Nitrates slowly decline, and copper rises.
1891 – Civil war over constitutional dispute between president and congress ends in congressional victory, with president reduced to figurehead.
1925 – New constitution increases presidential powers and separates church and state.
1927 – General Carlos Ibanez del Campo seizes power and establishes dictatorship.
1938-46 – Communists, Socialists and Radicals form Popular Front coalition and introduce economic policies based on US New Deal.
1948-58 – Communist Party banned. Fear of communism rises.
1952 – Gen Carlos Ibanez elected president with promise to strengthen law and order.
1964 – Eduardo Frei Montalva, Christian Democrat, elected president and introduces cautious social reforms, but fails to curb inflation.
1970 – Salvador Allende becomes world’s first democratically elected Marxist president and embarks on an extensive programme of nationalisation and radical social reform.
1973 – 1990 – Chief of Staff General Augusto Pinochet ousts Allende in coup and proceeds to establish a brutal dictatorship.
1990 – Christian Democrat Patricio Aylwin wins presidential election; Gen Pinochet steps down in 1990 as head of state but remains commander-in-chief of the army.
1994-95 – Eduardo Frei succeeds Aylwin as president and begins to reduce the military’s influence in government.
1998 – Gen Pinochet retires from the army and is made senator for life. He is arrested in Europe, but returns.
2000 – 2004 – Socialist Ricardo Lagos is elected president.
2002 Gen Pinochet resigns from his post as a lifelong senator.
2005 Revised constitution, (revisingPinochet-era constitution), including one which restores the president’s right to dismiss military commanders.
2006 Michelle Bachelet returns to power, wins the second round of presidential elections to become the fourth consecutive head of state from the centre-left Concertacion coalition.
2006 August – Chile and China sign a free-trade deal, Beijing’s first in South America. More exports.
2006 December – Pinochet dies, after years of failing health.
2008 Peru files a lawsuit at the International Court of Justice in a bid to settle a long-standing dispute over maritime territory with neighbouring Chile.
2008 May – Unexpected eruption of Chaiten volcano which has been dormant for 9,000 years. Authorities order complete evacuation of two towns in the Patagonia.
2009 February – President Bachelet makes the first visit to Cuba by a Chilean leader in almost four decades.
2009 October – Relations with Peru are strained further after Chile stages a military exercise in the north, close to the disputed border.
2010 Right-wing billionaire Sebastian Pinera defeats former President Eduardo Frei in presidential election, ending 20 years of rule by the left-wing Concentracion coalition.
2010 February – Earthquake: Hundreds die and widespread damage in central Chile.
2011 Protests throughout the country
2013 April – Bolivia files a lawsuit against Chile at the International Court of Justice in The Hague to reclaim access to the Pacific Ocean. Bolivia lost access to the coastline in a 19th century war with Chile, leaving it landlocked ever since.
2013 May – Chile, Colombia, Mexico and Peru agree to scrap most of the tariffs on trade between their countries, hailing the move as an historic step towards regional integration. Chile continues its path toward exports.
2014 Left-wing candidate Michelle Bachelet returns to power.
2015 Using 1990 as baseline, Chile has accomplished the World Health Organization (WHO)’s Millennium Development Goals for developing nations. Among them: poverty reduction.
2017 Sebastian Pinera returns to power, and country again shifts to the right. Country reverts to modest growth 0f 1-2%.
It occurs to me…
My Model of How Civilization works needs Revision
It occurs to me, after reading so much Chilean History, that perhaps my model of how “civilization” works is somewhat wrong.
My model addresses the “how” of civilization. How does order come out of chaos? How do we rise out of the muck, and become more human and less savage beast? How do we develop rules that guide our behavior, particularly toward each other?
My model is about government, and governing – and the rule of law which protects the average citizen from arbitrariness, and instead substitutes “justice”.
A better model is conquest. This better model recognizes the role of adventurers, explorers …. men in search of something. When the adventurers are sponsored by a Crown (in this case, the Spanish Crown), they are aggressively spotting opportunities to lay down a claim. And, of course, laying down such claims almost always means a fight. These men were fighters. They fought for everything they claimed. In this case, they faced major opposition: the fierce Mapuche peoples to the South, and the Incas to the north.
To continue this revision to history, it is now clearer to me that any major King (the Crown) grasped the advantages to their empire of letting the adventurer explore, and then fight for, territory. If they succeeded, the Crown would ensure that the adventurer was paid handsomely for their work. At the same time, the Crown made sure that loyalty was assured, and that taxes would be paid, as wealth developed.
This basic theme plays itself out over and over again throughout history.
The warrior fighter is “granted” the territory. This is the basis of the “land grant” system. A land grant was an enormous territory, set forth in documents which described the grant, which became “property rights”, and the requirements of continuing to hold the grant, namely the taxes that must be remitted to the Crown.
The Spanish case study is slightly different from a pure land grant. In the 1500’s, the practice was called “encomienda”, whose root word is to “entrust”.
This practice did not actually grant land, but rather people. The people granted were people who could be employed by the grantee. The abuses of this system are now well documented: the people became virtually enslaved, much to the consternation of the Crown. The abuses were so egregious that the Crown actually decreed that the practice was banned. All this happened in the 1500’s. The ban was largely ignored in faraway places, and Chile certainly was one of those.
Effectively then, the land grant system operated in much the same way as a franchise system does in Corporate America. The franchisor grants to the franchisee certain right (in the case of Coca-Cola, these original grants were in perpetuity). In return for the right to a territory, the franchise promises to behave: to pay royalties to the franchisor, to respect the boundaries granted, and to aggressively build the business – in a manner that mutually benefits the franchisor and the franchisee.
Following this a bit further, the Coca-Cola franchise system in the US was originally for massive areas – six to be exact. They were called “parent bottlers”. It was their job to secure bottlers for the territory, which they aggressively did, and thereby ensure the growing distribution of Coca-Cola – a product in high demand.
So, it occurs to me that the expansion of empire was effectively like a franchise system. The warrior/adventurer was rewarded by the Crown for his conquest. They were awarded with massive territories. They then set about to develop those territories, by investing in towns, which became cities, and roads, which became highways, and harvests, of agriculture or of mines to harvest natural resources, and ports, which became the source of greater wealth through imports and exports.
And then there is another consideration: the church. In this case, the Catholic Church, and its role in “civilizing” a long and narrow country.
Perhaps the church played, and plays, a greater role than I had originally thought.
Perhaps the church was co-equal, or even superior, to bringing order out of chaos.
Perhaps the church was the core source of hope: that tomorrow would be better than today, that protections and justice come to those with faith, and that the world is much bigger than me, and even includes the heavens and a place called hell.
So …. Aren’t there really two rules of law – the law of the church and the law of the government?
And, if we read history with openness, perhaps a truthful statement is:
For any given person, at any given time in history, the experience of “civilization” is either more true or less true.
If that person’s experience is more true:
- The person is probably also experiencing a “culture” – sometimes without even being aware of this notion. That culture is gifted with cultural norms that form the basis of civilization – rules or laws that guide all members’ behavior.
- the person likely has two institutions to thank for this “culture: their government and their church.
- Which is primary, and by how much, is an important marker for a given time, in a given geography.
History gets very interesting as we ponder which communities were more aligned with the church as their primary institutional reference, and which communities were more aligned with their government.
Is Chile a Microcosm of the World?
The intrigue, the conquest, the rebellion, the retribution: is Chile, a microcosm of the world? Does it provide universal insights?
Possibly. Here are two:
Incentives to control land and expand reach are powerful.
The story of Chile is a story of powerful men exploiting opportunities. As early as 1541, Spanish invaders ….
Napoleon was one of many Spanish kings who encouraged loyalists to to form alliances which bound them to fight for land. Once victorious, the loyalist would bring that victory back to the King (Emperor), and – more often than not – the King would grant that land back to the loyalist (Lord) who had conquered the land. This, of course, was only done with a pledge of continuing loyalty from the loyalist, and a pledge to give back to the king payments in the form of taxes, armies, or whatever the king required.
Conquest breeds resentment, and even hatred.
The story of Chile is a story of conquest, followed by new rules and retribution for the conquered. We know change is hard, and culture change is the hardest of all. In all cases, imposed changes fostered resentment, and retribution, often harsh, bred hatred. When it.surfaced, it became rebellion.