Introduction: The State of Chilean Business History
Despite Chile’s long tradition of research in economic history, the country’s business history has received little attention until very recently, at least in comparison with some other Latin American countries.1 This is not to say that there are no business historians in Chile, especially now in Santiago .2 Indeed, some colleagues have begun to publish in the most important journals of the discipline, such as Business History Review, Business History, and Enterprise & Society.3 However, for a long time scholars based overseas produced rather more on Chilean business history, especially on the role of foreign entrepreneurs and companies, than Chileans did themselves.4 Institutionally, the field remains quite weak. There are still no business history centres in Chile, not even small units within departments of history, economics, or business and management. It is rare to find courses on business history being taught at Chilean universities, except for occasional modules at Universidad de Santiago and Universidad Adolfo Ibáñez. This situation contrasts with the developments that have taken place in larger Latin American countries such as Argentina or Mexico, or even other ‘intermediate’ economies such as Colombia.5 However, the fact that academic interest in Chilean business history has grown only recently should not be taken to mean that the subject is not important, whether to historians of Chile, or to historians of business in Latin America or emerging markets more broadly.6
Historians of Chile conventionally divide the country’s post-independence economic history into four phases: the period leading up to the War of the Pacific with Peru and Bolivia in 1879–1883, which was dominated by the growth of mineral exports (silver and copper ), as well as a relatively short boom in wheat and flour shipments stimulated by the Californian Gold Rush and demand from Britain; the nitrate era of 1880–1930 when the country exploited the rich deposits in the Atacama Desert that it captured during the war, giving it a dominant position in the global market for nitrogenous fertilisers until the growth of competition from synthetics after World War I; the period from 1930 until 1973 when exports depended on copper , produced largely by US companies until nationalisation in 1971, while the domestic economy followed strategies of import-substitution industrialisation (ISI); and the period since the military coup of 1973 which saw the introduction of policies designed for export-led growth, a renewed openness to foreign investment and the rollback of state intervention and public-sector firms.
A left-wing (dependentista) characterisation of the domestic business elite during these periods would see it as dynamic in the first period, when Chileans and immigrant settlers from Europe dominated the mining economy and agriculture ; passive and parasitic during the second and third, when it captured much of the income the state received from export duties; and dynamic and selfish in the final period, when government ceded control of many key sectors of the company to new business groups .7 For the Right, the role that the state played in the economy in the mid-twentieth century, after the elite lost control of government in the 1930s, appeared to be one that thoroughly distorted the workings of the market, suppressed business initiative, created unsustainable inflation as a result of deficit spending and led to the domination of the economy by inefficient state-owned enterprises (SOEs).8
This contrast of views highlights the centrality of the business elite, the state and foreign investors to Chilean economic (and political) history over the last two centuries, an interaction that the essays in this volume collectively address. Some particular features of Chilean history, however, also give it greater importance within Latin American business history more broadly. First, Chile was heavily dependent on exporting minerals to an extent that is true of no other Latin American economy, except for twentieth-century Venezuela with its dependence on oil . However, Chile could hardly be regarded as suffering, over the long term, from the so-called ‘Resource Curse’, where an abundance of natural resources leads to an overvalued currency, skewed development and economic stagnation, high levels of corruption and extremely poor welfare outcomes. Second, apart from the initial period of Chilean post-independence history, technology and finance came from overseas, at least in the early stages of each mining cycle. This raises important questions about the role that foreign companies played in the economy, and the potential for a nationalist reaction against them, leading to conflicts with the state. Third, as a result of its ability to tax exports due to its leading role in global markets for copper and nitrate , especially—and also to benefit from duties on the imports financed by the foreign exchange that the mineral exports generated—the state possessed much greater resources than governments which did not have the ability to levy export duties in the same way.9 Fourth, as Patricio Silva (1994) has shown, a strong technocratic element developed within the public sector in the interwar period, leading to the establishment of one of the first national development corporations in Latin America, the Corporación de Fomento de la Producción (CORFO), in 1939 (Ortega 1989; Nazer 2016). Fifth, Chile paved the way in the introduction of neoliberal policies in Latin America in the 1970s, undertaking an extensive process of privatisation and giving rise to new business groups alongside some older ones which had successfully made the transition from the nitrate era through state-led ISI and into a new phase that privileged the private sector (Lefort 2010; Martínez Echezárraga 2015; Salvaj and Couyoumdjian 2016). Finally, some of these groups have successfully invested across frontiers, making the transition to become multilatinas (Latin American multinational firms), as shown in Barbero’s chapter in this collection. In the 2016 ranking of Latin American multinationals , Chile was home to 12 of the top 50 firms listed.10
The Late Development of Chilean Business History
If Chile presents such interesting characteristics, both within Latin American business history and more broadly in a global context, why was the subject so late to develop? The first scholar who probably tried to answer this question was Luis Ortega (1999) in a contribution to an early collection of essays surveying the field. According to Ortega, business history was, by then, quite new within Chilean academia, and it was, therefore, institutionally weak.11 This weakness has persisted into the twenty-first century, but some improvements are worth noting. In 2014 the Universidad de Santiago created a specialist research centre (Centro Internacional de Historia Económica, Empresarial y de la Administración Pública [CIHEAP]) to promote both economic and business history, as well as the history of public administration. Several of its members have published work in business history.12 A major grant that the centre won shortly after its foundation allowed it to organise a conference in July 2015 entitled ‘Business History in Chile and Latin America’ in order to promote the subject, with the support of Professor Geoffrey Jones and the Harvard Business School (HBS).13 Some papers from the conference were subsequently published in a special issue of a Chilean journal, Contribuciones, while the more empirical studies appear in this volume.14
A second explanation Ortega offers for the lack of development of business history in Chile was that between the late 1920s and the mid-1970s, the state was the main economic actor within the Chilean economy. Only after 1974 did the private sector begin to regain a more dominant role. The importance of the state meant that before 1974 historians had little interest in the structure, organisation and management of firms in the private sector, although this does not explain why they paid so little attention to state-owned enterprise...