Chile: Big copper getting worse rap

Just out, a poll by the Centro de Estudios de la Realidad Contemporania that asked Chileans an interesting question: should big copper be nationalized? Or to be more precise: “A raíz del conflicto de Anglo American con Codelco han habido gente que plantea la necesidad de nacionalizar las grandes empresas privadas que explotan yacimientos de cobre. Está usted en acuerdo o desacuerdo de nacionalizar las grandes empresas privadas que exploten yacimientos de cobre?”

(“Because of the conflict between Anglo American and Codelco, people have discussed the need to nationalize the big private companies that exploit copper deposits. Do you support or oppose the nationalization of the big private companies that exploit copper deposits?”)

67% in favor, including majorities from every political party. Who would ever have thought that Anglo American could turn Chileans into a bunch of Southern Cone Hugo Chavezes? But don’t worry, remember what Henry Kissinger (supposedly) said the last time such sentiments arose: “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.”

More seriously: I think the Anglo item isn’t the main thing here. The groundwork comes from the student movement. As I said months ago:

… the uprising in Chile is leading to a major renaissance of resource nationalism in the country that has long been the continent’s most accommodating to foreign mining companies. I’ll write more about this in the future, but suffice to say that “renationalize the copper” as a panacea for the country’s ills has gone from fringe notion to conventional wisdom in a matter of months.

BONUS: The by far weirdest item in this poll is that they asked whether the killings by the military government (1973-1989) were a necessary evil to avert communism. Most people disagree, but a few agree. Including 5% of people who say they are in the Communist Party.

17 thoughts on “Chile: Big copper getting worse rap

  1. Ken Price

    Great idea, nationalizing the copper industry. Chile can follow the econom9ic success of Cuba, Venezuela and even North Korea! Bur why stop with copper? Chile can nationalize the fruit industry (and import food from Cuba) the tourism industry (and get help from Zimbabwe) and with a little effort, get back the economic success of the Allende government.

      1. Ken Price

        I know, I know! Students seem to know everything but economics (and history). I lived in Chile at the end of the Allende era, and well remember the shortages of everything but propaganda. The current crop of students are long on ideas and shot on knowledge.

  2. Dr. Faustus

    Oh my God. Nationalize,….nationalize Chile’s copper industry? What a horrible idea. Heretofore I had thought that Chile was a beacon of hope for forward thinking economics in South America. I am aghast. Unlike the rest of South America, there was a possibility of finding a copy of Hayek’s ‘Road to Serfdom’ in Chile’s public libraries. I guess those copies have been relegated to the basement back-shelves. The Chilean University students are probably learning other, more progressive economic theories nowadays. Gasp. sigh….sigh.

    I am reminded of the famous Harvard economist, Jeffrey Sachs, who single-handidly destroyed the then emerging post-Soviet economy (1992 +). He came to Moscow at the request of Boris Yeltsin with the hope of teaching the Russians how a free market economy works. Like most silly academics, Sachs got it all wrong. What should have been done was quite simple, give everything that the Soviet state owned,…to the people. Everything. Give everything away. If you worked in a Soviet factory, you and your fellow workers now ‘owned’ that factory (through issuance of stock). If you rented an apartment in a state building, you now ‘owned’ that apartment. Simple. If you worked on a ‘collective Soviet farm, you know owned that collective farm, along with all those that worked with you. The new Russian government should not have owned anything. Capitalism is a simple concept to understand. You are given the opportunity to succeed. Here are your stock certificates, your deed or your license to do business. Have at it! Go succeed! Instead, Sachs helped introduce the economic term of ‘oligarch’ to the Russian vocabulary. What an imbecile. What a disaster it turned out to be. Lenin must be spinning in his grave. You now have a handful of people in Russian controlling huge portions of the economy. One guy owns Chelsea in the English Premier League. Another one owns the New Jersey Nets of the NBA,…and who is now running against Putin. Another one throws big parties on a Caribbean island for all of his wealthy friends. Oligarchs. Gazprom. Insanity. Complete insanity.

    And now, sigh,….sigh, the Chilean people think that ‘nationalization’ may be the way to go? Chile? sigh.

  3. Kepler

    5% of commies said they approved of the killing of communists to prevent communism from taking power?
    How many communists were interviewed? I know most people say things that are more or less contradictory, but that is a little bit over the top, isn’t?

  4. .5mt

    I’m thinking the 5% of commies were not in favor of the killings but allowed as how the strategy was effective.

      1. Kepler

        Or there were 20 commies in the poll and one of them was a masochist with suicidal tendencies…or there were 10 commies only and a Venezuelan pollster did the maths.

  5. westslope

    Ken: The Allende government was tragic to say the least. The coalition was elected to power with roughly 35% of the popular vote. It incompetently drove the inflation rate to over 1000%.

    Despite only enjoying a minority of votes, Allende rammed through a radical program that ultimately paralyzed the nation.

    If a leader were to act in a similar fashion in North America or Europe, he would have been widely condemned as anti-democratic and authoritarian.

    setty is a good guy, he just harbours populist ‘common sense’ views about things. Playing the little good guys against the evil big guys is pretty standard stuff with the trendy neo-marxist crowd. It means they don’t have to open a book and study the sociology of conflict or understand modern capitalism. To hell with science. :-)

    1. Ken Price

      My business partner had dinner with Allende a week before the “golpe”. According to him (my partner) Allende KNEW a revolution was brewing, and intended to commit suicide if it succeeded. Moreover, Allende felt that he had lost control of his government to the ultra-leftists in his government, and blamed them for the economic disaster his government had descended to. A sad chapter in Chilean history.

      1. westslope

        A very sad chapter. I travelled in and out Chile several times from late 1977 to 1979. The Pinochet regime had radically cut tariff protection and other support for domestic industries. Unemployment and poverty were rampant, particularly in the south. People were going hungry. Malnourishment was a major issue. I can’t say for sure, but I believe the incidence of tuberculosis and other poor-people diseases increased.

        At one point I hiked a remote, still roadless part of the Chilean Patagonia. I spent a night with a large family where the male head of the household was swinging a chain saw to cut open El Carretera del Sur extending south of Puerto Montt. A family of roughly 10 to 12 slept on the ground under the protection of corrugated zinc-alloyed metal sheeting. It was cold and raining hard. A couple of children coughed like they had TB. I felt a little guilty sleeping in my custom-made down sleeping bag but what is a fellow to do.

        On the bright side, the evolution from military dictatorship to civilian democracy was relatively quick and non-violent.

        1. Ken Price

          “The Pinochet regime had radically cut tariff protection and other support for domestic industries.”

          The cutting of tariff protection was done to oblige domestic producers to compete on a world-wide basis- and it worked. Chile today is a world class producer of goods and services, thanks to Pinochet. It was painful in the short term, but it completely remade the economy. Today, Chilean goods and services can compete with any other country, and people in Chile gain with jobs and cheaper goods.

        2. sapitosetty Post author

          Ken – plenty of people agree with you that Chile is the great neoliberal success story. There is something to that, no doubt, but the truth is more complicated. As I understand it, Pinochet followed some orthodox recommendations through the 70s — although he didn’t, of course, privatize the copper mines that Allende had nationalized. At the end of that period, and people hadn’t seen the benefits of years of austerity, there was impossibly much grumbling. He implemented some populist policies including import tariffs to protect garmentmakers and such, and there was always a state industrial policy.

          People still debate whether the economic growth woulda been better without these populist policies or whether they were a crucial part of the recipe. Here’s an argument for the latter:

          In spite of a brutal military dictatorship that sought the total restructuring of the economy and the elimination of the state’s guiding role in it, the state sector was a crucial ingredient in Chile’s efforts to build an export-led economy in the Pinochet years and beyond. Thus, although neoliberals occasionally imposed their free-market ideas in the financial sector, the restructuring of the economy was led by a stealth government development policy. (Even in the financial sphere, the Chicago Boys were forced by real circumstances to retreat, imposing protective tariffs in the 1980s and accepting capital controls on imported short-term “hot” money.) While Chile is nearly always portrayed as a neoliberal success story, the reality is that Chile’s transformation was not neoliberal at its core—that is, within the system of production.

          Basically, the argument in that article is that Chile was more about state-subsidized capitalism than real free markets.

          In short, there are people who question whether Chile’s current prosperity was really born of austerity.

          You are both being silly if you think that my reporting on this poll indicates my taking a position on the issue.

  6. Gringo

    But don’t worry, remember what Henry Kissinger (supposedly) said the last time such sentiments arose: “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.”

    I suggest that you familiarize yourself with a Resolution the Chamber of Deputies passed by a 81-47 vote three weeks before the coup. Some have called the Resolution the “Declaration of the Breakdown of Chile’s Democracy.” An excerpt follows.

    “5. That it is a fact that the current government of the Republic, from the beginning, has sought to conquer absolute power with the obvious purpose of subjecting all citizens to the strictest political and economic control by the state and, in this manner, fulfilling the goal of establishing a totalitarian system: the absolute opposite of the representative democracy established by the Constitution;
    6. That to achieve this end, the administration has committed not isolated violations of the Constitution and the laws of the land, rather it has made such violations a permanent system of conduct, to such an extreme that it systematically ignores and breaches the proper role of the other branches of government…”

    In general and in specific, the resolution could be interpreted as an invitation to a coup. Allende himself called it such. The primary author of the Resolution was not Henry the K, but Patricio Alywin, who later led the NO vote against Pinchet in 1988 and who was the first democratcially elected President after Allende.

  7. Miguel

    I am Chilean born there and and am now a naturalized American. Considering that our country has prior history of nationalizing the copper fields by Allende who was later overthrown by United States supported C.I.A. operations in Chile. Many of the economic hardships were created by the United States including the truck workers strike which was funded by the C.I.A. to de-stabilize the Allende regime. This was due to the retaliation of the large mining companies which had lost their stake in the control and exploitation of Chilean’s copper mines. I think nationalizing them would be the best thing that my country of birth could do for itself. Being educated in American universities and having access to alternative non-profit news I have realized that much of the profits from Chile’s coppers go to a few privileged Chileans while the miners themselves have very poor working conditions relatively low pay in comparisons to the large profits of the large mining companies profits. Please do not make this into a communist/socialist versus capitalism. This is strictly an issue of a country controlling their own and most vital resource. No other country is coming into America to exploit our resources so it is easy to say that nationalizing the copper industry is nuts but if the foot was in the other shoe I do not think that America would take kindly to Chilean companies exploiting American resources.

  8. Gringo

    Miguel @ March 16
    ..Allende who was later overthrown by United States supported C.I.A. operations in Chile…Being educated in American universities and having access to alternative non-profit news ….

    Your education in American universities was not very good if you were not made aware of the “Declaration of the Breakdown of Chile’s Democracy,”
    which I linked to in my previous post (Jan 7), which the Chamber of Deputies passed by a 81-41 vote, a strong 63% majority. As I previously pointed out, Allende correctly considered this resolution to be an invitation to a coup.

    Did your education in American universities also inform you that the copper nationalization was begun by President Frei, and that that the ultimate copper nationalization was one of the few Allende nationalizations that the legislature supported?

    Did your education in American universities also inform you that the vast majority of Allende’s nationalizations were done unilaterally, without the support of the legislative branch? Did your education in American universities also inform you that Allende justified his unilateral nationalizations by citing a Decree Law passed by a short-lived military government in the 1930s? Reference Marmaduke Grove.

    Yup, democracy lovers will invariably cite a Decree Law issued by a golpista to justify their acts.

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