Victims of the Chilean Miracle: Workers and Neoliberalism in the Pinochet Era, 1973–2002 - Softcover

Softcover

ISBN 10: 082233321X ISBN 13: 9780822333210

Publisher: Duke University Press, 2004

Synopsis

Chile was the first major Latin American nation to carry out a complete neoliberal transformation. Its policies—encouraging foreign investment, privatizing public sector companies and services, lowering trade barriers, reducing the size of the state, and embracing the market as a regulator of both the economy and society—produced an economic boom that some have hailed as a “miracle” to be emulated by other Latin American countries. But how have Chile’s millions of workers, whose hard labor and long hours have made the miracle possible, fared under this program? Through empirically grounded historical case studies, this volume examines the human underside of the Chilean economy over the past three decades, delineating the harsh inequities that persist in spite of growth, low inflation, and some decrease in poverty and unemployment.

Implemented in the 1970s at the point of the bayonet and in the shadow of the torture chamber, the neoliberal policies of Augusto Pinochet’s dictatorship reversed many of the gains in wages, benefits, and working conditions that Chile’s workers had won during decades of struggle and triggered a severe economic crisis. Later refined and softened, Pinochet’s neoliberal model began, finally, to promote economic growth in the mid-1980s, and it was maintained by the center-left governments that followed the restoration of democracy in 1990. Yet, despite significant increases in worker productivity, real wages stagnated, the expected restoration of labor rights faltered, and gaps in income distribution continued to widen. To shed light on this history and these ongoing problems, the contributors look at industries long part of the Chilean economy—including textiles and copper—and industries that have expanded more recently—including fishing, forestry, and agriculture. They not only show how neoliberalism has affected Chile’s labor force in general but also how it has damaged the environment and imposed special burdens on women. Painting a sobering picture of the two Chiles—one increasingly rich, the other still mired in poverty—these essays suggest that the Chilean miracle may not be as miraculous as it seems.

Contributors.
Paul Drake
Volker Frank
Thomas Klubock
Rachel Schurman
Joel Stillerman
Heidi Tinsman
Peter Winn

About this title

About the Author

Peter Winn is Professor of History at Tufts University. His books include Americas: The Changing Face of Latin America and the Caribbean and Weavers of Revolution: The Yarur Workers and Chile’s Road to Socialism.

From the Back Cover

"The great strength of this volume is that it provides readers with an original, historically based, human-focused analysis of the so-called Chilean miracle."--Brian Loveman, author of "Chile: The Legacy of Hispanic Capitalism"

Excerpt. © Reprinted by permission. All rights reserved.

Victims of the Chilean Miracle

Workers and Neoliberalism in the Pinochet Era, 1973–2002

By PETER WINN

Duke University Press

Copyright © 2004 Duke University Press
All rights reserved.

ISBN: 978-0-8223-3321-0

Contents

PAUL W. DRAKE Foreword....................................................
ix
Acknowledgments............................................................
xv
PETER WINN Introduction...................................................
1
PETER WINN The Pinochet Era...............................................
14
VOLKER FRANK Politics without Policy: The Failure of Social Concertation 
in Democratic Chile, 1990–2000.............................................
71
PETER WINN "No Miracle for Us": The Textile Industry in the Pinochet Era, 
1973–1998..................................................................
125
JOEL STILLERMAN Disciplined Workers and Avid Consumers: Neoliberal Policy 
and the Transformation of Work and Identity among Chilean Metalworkers.....
164
THOMAS MILLER KLUBOCK Class, Community, and Neoliberalism in Chile: 
Copper Workers and the Labor Movement During the Military Dictatorship and 
the Restoration of Democracy...............................................
209
HEIDI TINSMAN More Than Victims: Women Agricultural Workers and Social 
Change in Rural Chile......................................................
261
RACHEL SCHURMAN Shuckers, Sorters, Headers, and Gutters: Labor in the 
Fisheries Sector...........................................................
298
THOMAS MILLER KLUBOCK Labor, Land, and Environmental Change in the 
Forestry Sector in Chile, 1973–1998........................................
337
Bibliography...............................................................
389
Contributors...............................................................
409
Index......................................................................
411

CHAPTER 1

PETER WINN

Introduction

"The Chilean miracle?" Luis Rodríguez gave me an ironic look. "What miracle?"he scoffed, pointing to the piles of garbage on the muddy path betweenthe untidy rows of tin-roofed shacks that made up Las Turbinas, his shantytowncommunity in Santiago, Chile's capital city. "There are two Santiagos," heexclaimed, with a wave toward the elegant neighborhoods in the foothills of thedistant mountains, "and two Chiles: one rich, the other poor." Luis Rodríguezworked in the former but lived in the latter.

He was lucky, Luis affirmed. He had a regular job, unlike most of the youngmen in Las Turbinas, who survived as pickpockets or by selling crack. Luis wasa construction worker in Las Condes, the richest county in Chile, a land ofMercedes and cellular phones, where one felt in the First World and peopletalked of "the Chilean miracle," the decade-long economic boom that haddoubled Chile's national income by 1998 and made its neoliberal, marketdriveneconomy the envy of Latin America and a model for others to emulate.

Luis Rodríguez was one of the millions of Chilean workers whose long hoursand hard labor had made that "miracle" possible. To get to his job, he had tospend five hours a day six days a week on crowded buses, then work 10 hours aday, reaping as his share of the miracle a shack that he had built himself in theshadow of electricity pylons on land that flooded when it rained, amid thegarbage, the rats, and the crime. "The miracle never reached here," he said witha bitter laugh. "We are victims of the miracle."

Rodríguez was not alone in viewing himself as a victim of Chile's neoliberalsuccess story. Many of the workers interviewed by the authors of this bookvoiced similar views.

Together, their accounts of their experiences question whether Chile's workershave benefited from the boom—with its high growth rates and increasedproductivity—that their labor made possible. They also call into question theclaims of the Pinochet regime to have created an economic miracle as well asthe pledges of the democratic governments that succeeded it in the 1990s topromote growth with equity. At bottom, they pose the central questions of thisbook: Have Chile's workers paid the costs for their country's economic success?Were their interests sacrificed on the altar of neoliberalism? Are they victims ofChile's neoliberal "miracle"?

As the word neoliberalism suggests, this economic dogma looks back to the"liberalism" of an earlier era, in Chile's case, to the pre-1930s, with theirmonetarism, free trade, and laissez-faire state. Neoliberalism, however, is notmerely a return to the past but rather an ideology that has applied "liberal"principles in the very different circumstances of recent decades.

The triumph of neoliberalism in Chile is part of a worldwide trend. Since thecollapse of communism and the discrediting of statist economic alternatives,the economic gospel of the market has swept the globe. It has been embracedwith particular fervor in places where it had been an ideological anathemaonly a short time before.

In Latin America, a region with a long history of consuming imported ideologiesand also of pendulum swings in economic strategies, the extreme "neoliberal"version of market capitalism has triumphed even in the bastions ofimport substitution industrialization—Argentina, Brazil, Chile, Mexico—wherethe interests of the entrenched, inefficient industries that this economic strategyof protected industrialization created reinforced the ideology of nationalismand the politics of welfare that sustained it.

Viewed from the distance of the United States at the start of the 21st century,the hegemony of neoliberalism in Latin America may seem little more than aregional response to an economic globalization that has affected all regions ofthe world during recent decades. This globalization has increasingly integratedfar-flung nations with very different histories, resources, and levels of developmentinto a new international "economic order" dominated by the markets,bankers, and corporations of Europe, East Asia, and North America.

Within Latin America, however, the roots of neoliberalism seem more localand more specific, a reaction against the "failed" statist and protectionist policiesof the past. Liberalism was held responsible for the region's deep crisisduring the 1930s depression, which gave rise to import substitution policies.Their goal was self-sustained industrial growth and escape from a "dependence"on raw material exports and foreign markets.

For nearly half a century, import substitution—a strategy of accelerated industrializationwith active government intervention through which Latin Americannations sought to catch up with the developed world—seemed to be thesolution. But what for the United States was a brief recession during the early1980s, Latin America experienced as a profound crisis that cut far deeper andlasted far longer. The 1980s are known in Latin America as "the lost decade,"in which economic growth stagnated, debts could not be paid, little foreigncapital flowed to Latin America, and hyperinflation and high unemploymentplagued the region.

The crisis of the 1980s sounded the death knell for import substitution industrialization,which was held responsible for the debacle. Although it meantsurrendering nationalistic dreams of joining the ranks of the "developed" industrializednations, country after country in Latin America has lowered itstariff barriers, opened itself to foreign investment, reduced the size of the state,privatized public sector companies and services, and embraced the market asthe regulator of the economy and even the society.

Chile was the first major Latin American country to carry out this neoliberaltransformation, and it has been both the most successful showcase for neoliberalismand the model for others—in Latin America and elsewhere—to emulate.Chilean neoliberalism was inspired by the theories of Chicago economistMilton Friedman, who argued that the market, not the state, should be the regulatorof the economy, and later by the policies of Britain's Margaret Thatcher,with her privatizations of state enterprises and public services. In Chile, neoliberalismwas introduced by the military regime as a reaction and solution tothe grave economic crisis generated during Salvador Allende's "Chilean road tosocialism" (1970–73), with its hyperinflation, consumer shortages, and publicsector financial losses. It also represented a rejection and reversal of the interventioniststate, protected industries, and deficit spending of the previous decadesof stagflation and import substitution industrialization.

Neoliberalism was imposed by the Pinochet dictatorship during the late 1970sin a highly ideological version that made it a vehicle for an aggressive attack onChile's workers and the labor rights they had acquired during decades of struggle.Neoliberal policies were an economic assault on the gains in wages, benefits,and working conditions that workers had won since the 1930s. They complementedPinochet's violent repression of labor unions and worker activists,political attacks designed to disarticulate worker resistance to the dictatorshipand to cow workers into a passivity that would enable the regime to imposeneoliberal labor and economic policies that were prejudicial to worker interests.When in 1982 these policies led to Chile's worst economic crisis since the GreatDepression, they were sustained by military bayonets, despite widespread socialprotests and political opposition.

A more pragmatic version of neoliberalism was introduced by the junta in themid-1980s and promoted a remarkable decade of economic success for Chile,in which the country experienced its most sustained period of high economicgrowth (averaging 8 percent from 1988 to 1997) with low inflation in the 20thcentury.

Most striking is that since the restoration of democracy in 1990, Pinochet'sneoliberal model has been maintained by the center-left governments of theConcertación coalition, which had criticized the model's high social costs,including deepening poverty and inequality, when they were in opposition tothe Pinochet regime. It is precisely this neoliberal democracy of the Concertacióngovernment that has been promoted by the United States and internationalorganizations as the model for other countries to emulate. Under the Concertación,not only did growth continue and foreign investment soar but both unemploymentand poverty decreased, in part because of programs targeted at thepoorest sectors of the population by center-left governments with greater socialconcern than the Pinochet dictatorship. It is little wonder that analysts as wellas publicists have called this 11-year boom the "Chilean miracle."

Yet there was no comparable rise in real wages during this boom, despitesignificant increases in productivity and a work week that was among thelongest in the world; nor was there the full recovery of labor rights that workersexpected from the center-left democratic governments they supported. Moststriking of all, there was no improvement in a maldistribution of income andwealth that had made Chile one of the most unequal countries in the world—alegacy of the Pinochet dictatorship that the Concertación criticized in oppositionyet was unable or unwilling to change in government. At the end of the"miracle," one in five Chileans—some three million people—still lived in povertyand the country was still divided into "two Chiles."

During the heyday of the boom of the 1990s, Chileans were reluctant toexamine the inequality and social costs of their economic miracle, particularlyas it was intertwined with a transition to a still unconsolidated and incompletedemocracy. But another cost of neoliberal policies, which had made Chile "oneof the most open economies in the world," was heightened vulnerability toexternal economic shocks. The Asian financial crisis of 1997–98 put an end tothe Chilean boom, and the Brazilian and Argentine crises that followed helpedkeep Chile in a long "crisis" of stagnation that continued into the new century,with growth falling to -1.1 percent in 1999 and unemployment rising to 10percent by 2000 and 15 percent jobless in the Santiago metropolitan area, withsimilar statistics in late 2002.

The result has been an end to the triumphalism of the 1990s. Now that theshine is off the miracle, Chileans are more willing to listen to critical voicessuch as Tomás Moulían, whose book Chile actual, an attack on the selling ofthe transition and the 1990s as a successful model, has become a surprisebestseller.

Our book aims to contribute to the growing debate on neoliberalism, thePinochet dictatorship, and the restored democracy governed by the center-leftConcertación coalition during the 1990s. It is unusual in that several authorsfrom the differing perspectives of different academic disciplines and economicsectors focus on the same set of questions: What was the impact of the changesof the Pinochet era (1973–98) on Chile's workers? Did they pay the social costsof the military dictatorship, the transition back to democracy, and the neoliberalpolicies that reshaped Chile during this era? Have they been the "victims" ofChile's "miracle?"

To answer these questions, the contributors to this volume not only analyzegovernment policies and statistics; they also explore changes in work processesand working conditions, labor relations, and labor politics, including repressionand resistance in both places of work and communities. Moreover, most ofthe authors take a "bottom-up" approach to these issues, where previous scholarshiphas tended to remain at a national level in its analysis of policies andtheir consequences. The analyses in this book are grounded in original subnationalcase studies that include extensive interviews with workers and theirleaders. This enables the authors to go beyond structures and statistics, policiesand decrees to explore the experience of workers. The result is a more nuancedanalysis of the impact of the changes of the Pinochet era. It also reveals thehuman face of these changes and the complex consequences and costs forChile's workers, the great majority of its people.

Although they do not claim to be comprehensive, together these chaptersspan the productive sectors of the Chilean economy, including the principalexport industries, the motor of the neoliberal economy. They include a traditionalimport substitution industry (textiles), based on imported inputs (bothraw materials and energy); a manufacturing industry (metallurgical), based onChile's natural resources; and the country's most important traditional exportindustry (copper). There are also chapters on three nontraditional export industriesthat have been showcases for the Chilean miracle: fruit, fish, and forestry.

While each of these chapters addresses the same general question—what hasbeen the Chilean workers' experience of the Pinochet era and neoliberalism?—theydo so in somewhat different ways. The authors give their own spin to thatquestion, focusing on aspects that seem most germane to their case studies,and in the process consider an array of related issues such as consumer culture,gender relations, and environmental impact.

The chapter "'No Miracle for Us'" surveys the history of the textile industry, aclassic import substitution industry based on imported inputs, dependent onhigh levels of state protection, a bastion of the Left under Allende—and thus avulnerable target of Pinochet's repression and neoliberal policies. In this chapterI explore the experience of both workers and entrepreneurs between 1973and 2002—including issues of subcontracting, job quality, and the feminizationof the workforce—and conclude that the whole industry was a victim ofPinochet-era policies but that textile workers bore the brunt of the costs. I stressas well the resistance of textile workers to these attacks on their jobs, wages,and working conditions, using both traditional and innovative strategies. At theend of the Pinochet dictatorship, their strategies seemed promising, as did aleaner and more modern textile industry. During the 1990s, however, a globalstructural and technological revolution in textile production brought the Chileantextile industry to its knees, pleading for a state aid that the Concertacióngovernments refused to grant, citing neoliberal principles. By 2002 the Chileantextile industry seemed on its last legs, and its workers were lamenting that theywere victims of the economic policies of the center-left democratic governmentsthey had supported.

In "Disciplined Workers and Avid Consumers," Joel Stillerman analyzes theexperience of the workers of Madeco, a metallurgical industry based on copper,Chile's chief natural resource. Madeco successfully adapted to neoliberal restructuringand emerged as South America's largest producer of metallurgicalor other industries, a firm that exemplified the "Chilean miracle." Stillermanargues that it was Madeco's workers who paid for this corporate success in theirloss of job security, wages, and benefits, in longer hours and speedups, withtheir intensified demands for higher productivity, and in the weakening of theirunion. He concludes that even relatively privileged workers in a successfulindustry were hurt by neoliberal restructuring but that the violent strikes of 1983and 1993 demonstrated that Madeco workers resisted these losses with courageand consciousness. Stillerman reports as well on the increasing consumerismand indebtedness of Madeco workers—a pattern common to workers in othereconomic sectors as well—that, by the end of the Pinochet era, had underminedclass solidarity and challenged the model of masculinity based on workplaceand social solidarity.

(Continues...)

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Edition details

• Publisher: Duke University Press
• Publication date: 2004
• Language: English
• ISBN 10: 082233321X
• ISBN 13: 9780822333210
• Binding: Paperback
• Number of pages: 448
• Editor: Winn Peter