By Cristóbal Badilla, Historian and Professor of History
In this article, I want to make a brief historical review of the theft of our natural resources, especially in the mining sector (saltpeter, copper, lithium), because they have been the main source of plunder by international imperialism and the national bourgeoisie. My aim is to trace a thread of continuity between the popular struggles of the past and those of the present, recognizing that the phenomena that are occurring today (including the events of October 18, 2019) are the product of the organizational experience of thousands of people who have given their energies so that the wealth of this territory might remain within the country and at the service of the great majorities.
In the first place, the exploitation of mineral resources, which are essential for national, local, and social development, is not simply an issue of the present. Rather, its first antecedents date back to the colonial period in Latin America. In 1541, Pedro de Valdivia and his conquistadors managed to pass through these territories and settled in the Mapocho Valley, quickly displacing the local Indians and settling near the gold mines which were located a few kilometers from the future city of Santiago in “Marga-Marga.” There, they worked on stealing the available wealth, while the Cacique Michimalonco was “forced” to negotiate and provide 1200 Indians to “collaborate” in said extraction. These events marked the first steps towards the formation of the “encomienda” system in Chile, which thus established a colonial way of organizing labor based on the enslavement of millions of Indians.
Second, in the following decades, the enterprise of conquest continued to advance southward, reaching the territories under Mapuche administration where the plunder of natural resources continued. In response to the Crown’s violence, the Mapuche organized themselves in what is now known as “Arauco” or “Gulumapu” (west of the Andes) in defense of the territory. The fundamental milestone of that period was the “Curalaba Uprising” in 1598, where they established a kind of border, forcing the conquerors to negotiate through the figure of the “parlamentos,” thus giving way to the recognition of the Mapuche groups as autonomous sectors. Thus, we can see that colonial domination was not “linear,” as some people claim. Rather, the indigenous people of the region rose up in arms against the invaders, which led to a series of actions to prevent the continuous plundering by the Spanish Crown.
On the other hand, when Chile became an “independent” country, it underwent major structural transformations. These changes took place not only in its legal and institutional order (from a general captaincy to a civil republic), but also in the economic and social fields, where the control of natural resources was expressed in three situations. During the first half of the 19th century (1818-1840), Chile’s entry into the new world order was configured, where our role was that of an exporter of raw materials. At the same time, England consolidated itself as an emerging imperialist power, thus displacing the colonial empires and applying financial mechanisms around the country’s access to international credit and lower tariffs. With these measures, it was possible to finance the urban development of the emerging republics, although in a contradictory way, since it gradually generated a process of dependency on the export of natural resources, which guaranteed the subordination of the national bourgeoisie to foreign capital.
The period of British imperialism
Between 1850 and 1890, English imperialist consolidation in the territory was expressed not only via economic modernization, but also in the fact that this was part of the process of global domination within this framework of new capitalist relations. In this context, mining would be key to the production of explosives and fertilizers, thus generating its own export development at the cost of tying Chile (and the South American continent as a whole) to a dependence on the production of raw materials.
With the territorial expansion to the north, which was gained in the Saltpeter War (or War of the Pacific) with Peru and Bolivia from 1879-1884, the country acquired new land and important mining deposits located in cities such as Antofagasta, Iquique, Tarapacá. These were under the control of English companies (about 70% of the saltpeter offices), which invested about 15 million pounds sterling until 1889. In addition, the military invasion in the south continued, with the reduction of ancestral territories and the subordination of thousands of Mapuches to the state. Another important factor during this time was the civil war of 1891, in which a part of the navy, supported by the conservative opposition and financed by the landowning bourgeoisie, clashed with José Manuel Balmaceda, who advocated a “nationalist” policy in relation to the possible curtailment of English investment in saltpeter and proposed the creation of saltpeter companies with national capital.
This policy, which was “lukewarm” because it did not propose the state take full control of mineral resources, nevertheless alarmed British imperialism and its investments in the country. Through the influence of the Chilean opposition (mining, commercial and banking bourgeoisie), this situation provoked the civil war that began with the Navy’s uprising on January 7, 1891, and ended with a death toll that reached 10,000, and the suicide of Balmaceda on September 19 of that year. However, this does not mean that Balmaceda represented the interests of the people, as documents from the time show that he had the support of the United States and, at one point, even Germany. Therefore, we can say that this civil war was an expression of the country’s defense against imperialism, albeit with a bourgeois nationalism that was incapable of carrying out democratic reforms in the service of the majorities.
On the other hand, while British imperialism controlled and invested in the nitrate industry at the beginning of the 20th century, (not only in terms of capital, but also in terms of transport through control of the railways), a new working class began to take shape, which made for an incipient industrial sector in the mining “cities” of the North. In this sense, between 1890 and 1912, the saltpeter proletariat increased from 13,060 to 45,000 people. However, not everything was “progress,” since contemporary literature of the period called attention to their degraded living conditions, which were characterized by a lack of sewage systems and drinking water, rampant disease, alcoholism, gender violence, and finally, instead of receiving a salary, workers were “paid” in tokens that were exchanged for staple foods in the “pulperías” which belonged to the same owners of the mines.
Moreover, for the national bourgeoisie who was tied to imperialist capital, the economic bonanza of saltpeter would not last forever. With the First World War (1914-1918), there was a halt in the profits, since Germany (which, along with England, was a buyer of nitrates) began to produce synthetic nitrates, which were cheaper to acquire on the international market. Adding to the terminal crisis of this product was the definitive fall in prices after the Great Depression in 1929. This left thousands of Chileans unemployed, caused mass migrations from the north to the center of the country, and created serious political problems that would bring a new actor into the conflict for the usurpation of Chilean natural resources, namely the United States.
These new circumstances also brought with them an important change in the mining production matrix, since copper became the new export mineral. In this sense, the pattern of its production would follow that of the raw extraction of nitrates, and its industrial processing went hand-in-hand with important changes in the international arena. After the destruction of Europe in WWII, the United States assumed its position as the new imperialist power, where it began appropriating the copper companies, and generating a process of dependence of 51% of Chile’s export market during the first half of the 20th century.
Copper and the United States
In this way, copper continued to be supplied to the international market, although the surpluses from state taxes had increased which allowed for the financing of public works, healthcare, and education. Yet, we must also remember that history is not “linear” either and that this process did not necessarily guarantee the “economic independence” of the working people simply by increasing the participation of the State in the economy. Since, at the same time, there were more and more transnational companies in the country, mostly financed by American capital, including Grace Dupont Co, Guggenheim Co, ITT, Anaconda Copper, etc.. Moreover, towards the middle of the century, the United States consolidated its hegemony with the receipt of more than 50% of the exports of our strategic raw materials. In addition, another element of financial capital that worked to mortgage the country was the foreign debt, which, except for the period between 1929-1935 when payments were suspended, accumulated a total of over 1.1 billion dollars by 1964, of which only 624 million dollars were paid for international loans.
In this sense, it can be argued that the period between 1935-1973 can be understood as a “state of compromise,” because Chile moved from an open economy based only on the export of natural resources to a “mixed economy” based on the model of industrialization by import substitution (ISI). This was also marked by a gradual advance in the industrialization, not only of the country’s strategic sectors, but also of the production of everyday goods for the population (leather, footwear, food, etc.), which was accompanied by a greater regulation of the market and the development of the economy. At the same time, there were also advances in terms of “social protection” or welfare (the latter, as was true of an earlier time, was due to the historical struggles of the workers’ movement).
In this context, one of the country’s milestones, within the framework of the proposals promoted by the working class in Chile along with the parties of the reformist left, was the bill entitled “A BILL IN THE HISTORY OF CHILE, FOR THE NATIONALIZATION OF COPPER,” which was presented by the senators of the Communist Party of Chile, Salvador Ocampo and Elías Lafertte, on June 21, 1951. Among other elements, it is worth citing article 1:
“As required by the national interests, all the properties owned in the country by the Chilean Exploration Company, the Andes Copper Mining Company, and the Braden Copper Company shall be declared of public utility.” Although it was ultimately rejected, it makes clear that the Chilean people understood the need to control our natural resources in the face of North American imperialism. At the same time, this action was framed within a new world order marked by the Cold War’s bipolar division of the globe into capitalism via the USA and “socialism” (Stalinism) via the USSR, with their respective zones of influence.
Within the framework of this social polarization, the Christian Democracy (DC) party came to power in 1964 through the candidacy of Eduardo Frei Montalva. The party sought to occupy the “center” in order to contest the workers’ movement on the left, as it promoted the so-called “Revolution of Freedom” with direct financing from the Vatican. In this way, it fulfilled the US plan called “Alliance for Progress” whose aim was to prevent the advance of “communism” in the country. By reforming the previous legislation with respect to the energy sector, it moved towards a 51% state participation in the acquisition of the ownership of copper in negotiations with North American imperialism, and thus applied the “Chileanization of copper” and operated in mixed copper companies.
This situation would undergo an important change with the victorious election of Salvador Allende on September 4, 1970. With 36.6% of the vote, he was supported in Congress through the votes of the DC, who formed a class alliance with the petty bourgeoisie (Radical Party) and the reformist left coming from the Popular Front (PC-PS), who proposed to the country the thesis of the “peaceful road to socialism.” This was despite the fact that historical experience has shown that to change the roots of society it is necessary to overthrow the bourgeoisie. Their program, which they defined as “anti-oligarchic,’ and “anti-imperialist,” intended to advance towards socialism through class reconciliation, which meant they had to dispute the means of production with an exclusive and despotic bourgeoisie whose a strategic alliance with imperialism sought to maintain the historical role of subordination, backwardness, and dependence for Chile.
From the nationalization of copper to neoliberalism
On July 11, 1971, Allende carried out this action in the mining sector, which was unanimously approved by the National Congress (with a right-wing majority). Law No. 17,450 acted as a reform of the Constitution of 1925, declaring that the State had absolute, exclusive, inalienable, and imprescriptible dominion over all the country’s mining deposits, which left all contracts with companies of North American origin without effect. However, imperialism went on the offensive, depressing the price of Chilean copper on the international market: it banned the export of spare parts and mining supplies, in addition to international loans to Chile. Despite these measures, production in the mines of Chuquicamata, El Salvador, and El Teniente did not decrease and exceeded the pre-1968 rates. However, as international prices fell, so did exports. If in 1970 the value of exports fell by $85.7 million compared to 1969, in 1972 it fell by approximately $267.9 million compared to 1969.
Likewise, the thousands of workers’ organizations (Cordones Industriales, Comandos Comunales, seizures of estates, and self-managed cities) that rose autonomously outside the UP initiatives (although there were hundreds of grassroots militants in them) were the real enemy of imperialism and the national bourgeoisie, which financed and organized the coup d’état on September 11, 1973. This process means not only the overthrow of Allende and his government of class reconciliation, but also the repression of thousands of social fighters who gave their lives for a socialist project for Chile. As a result, the military dictatorship reversed the working classes’ hard-fought conquests (in addition to perpetrating the murder, torture, and disappearance of working people), with a wave of privatizations of public companies, flexibilization of labor, liberalization of the market, privileging exports over imports, and the bankruptcy of state companies (there was 18% unemployment), including mining. They also initiated the payment of compensation to US companies, beginning with the denationalization of large and small mining companies, where CODELCO (the state-owned mining corporation) with the post-dictatorship governments began to exert control over about 30% of copper production, compared to 70% control by foreign companies.
Finally, after 30 years of limited democracy, four neoliberal “social democratic” governments and two right-wing governments, the Apruebo-Dignity (AD) coalition came to power. Its program was defined by a reformist “anti-neoliberal” discourse, which sought to capitalize on the social demands that the Chilean people brought to the streets on October 18, 2019, under the strategy of class conciliation against the foreign capital that dominates the country’s national wealth. This can be seen in the calls for “foreign investment” within the framework of the alleged creation of the National Lithium Company, where once again US imperialism wants to take over the national wealth, although there are other actors such as Chinese, Canadian, and German capital.
In conclusion, as we have seen throughout this article, the plundering of our natural resources is not just a contemporary issue but has a long history. The Spanish Empire, the British Crown, and the United States, have represented the efforts of imperialism, in its historical eagerness to dynamize the world market, to make Chilean territory a place for the extraction of natural resources. It has seen this territory as a place of conquest, both from a military and geopolitical point of view, which is basically expressed in the control of mining as a source of accumulation for the international high bourgeoisie, and with it the subordination of oppressed peoples. In view of the above, in order to change the country’s historical dependence and the oppression of the working class, it is necessary to carry out a fundamental transformation of the relations of production. The matrix of development must be under the direction of the working class in conjunction with local communities, in order to develop a national industrial project that takes advantage of new technologies and respects the reproduction of working class and popular life.
Latin America and the Caribbean as strategic mineral reserves, Gian Carlo Delgado Ramos.
Marxist Interpretation of Chilean History – Luis Vítale.
Economic history of Chile since independence – Manuel Llorca-Jaña, Rory Miller.
Published in http://vozdelostrabajadores.cl September 26, 2023.