Business in Chile in the nineteenth and twentieth centuries

This chapter provides a summary of Chile’s business environment during the last two centuries. We have divided our analysis into four sub-periods: the early republic, between independence in 1810 and the start of the Pacific War in 1879, dominated by silver and copper exports; the nitrate era, c. 1880-1930; the period of state-led Import Substitution Industrialization from c. 1930 until the 1973 coup, characterized by the state’s strong intervention in all areas of the economy as never before and never again; and the neoliberal era since the mid-1970s, when Chile became one of the first Latin American countries to abandon the ISI model, featuring a deep process of privatization, economic liberalization and integration into the international economy. Apart from highlighting some specific characteristics of each of these periods, the chapter also underlines some special features of the Chilean business environment, regardless of the sub-periods: a few family business groups dominate the key sectors of the economy, although very few of them have survived for more than two or three generations; Chile has always depended heavily on mineral exports of one or two products, and in turn on foreign intermediation to reach international markets; the country has experienced lengthy periods of inflation, except for the last few decades; if compared to other Latin American countries, Chile enjoys relatively high levels of tax revenues and therefore of literacy and technical education; Chile also developed strong workers’ movements in the early twentieth century, which lasted until the military coup of 1973; and the Chilean business environment has been heavily marked by the strength of interest-group associations or gremios.