Tue Sep 27, 2022
September 27, 2022

Property rights in Chile’s new Constitution: the capitalist core remains in place

One of the most important points of any constitution is the right to property.

By MIT-Chile

This right refers to the ownership of a house, a small business or a car, but also to the ownership of buildings, mines, factories, harbours, banks, companies, supermarket chains, large estates, etc. This second aspect is the most important in a capitalist society, the ownership over the means of production and distribution of wealth.

The right wing, in order to defend the rejection of the new Constitution, says that the right to property is at risk. To deceive people, they say that workers will no longer own their houses or their savings in the AFPs (private pension funds). This is a big lie, since the new Constitution, like the current one, protects the right to property in all its forms, as we will see below. The right wing does this with one aim: to cheat workers into voting for Rejection, since the new Constitution grants some social rights that could supposedly reduce the participation of private ownership in some sectors of the economy.

But the big problem about property rights in the new Constitution is not what the right wing says, it is just the opposite. It is that the new Constitution makes no distinction between small private property and ownership of means of production… and when it protects large property, it condemns the majority of workers to have no property, no social rights.

Private ownership of the means of production, aka concentration of wealth

Through the ownership of large companies, their owners pocket almost all the wealth produced by the workers. Let’s look at an example.

The Luksic family, Chile’s richest family, owns more than 24 billion dollars. They have amassed this enormous fortune because the family owns large companies such as Banco de Chile, Antofagasta Minerals, CCU (beverages) and many others. One of their main companies is Hapag Lloyd (maritime transport). This company made more than $6.6 billion in profits between January and September 2021. So, each of its 14,000 workers was responsible for generating approximately $471,000 in profits in that period (profits only, not total production) [1]. If we do the maths, we will see that the Luksic group alone accumulated approximately 220 million dollars a month in profits because that family has the right to property of 30% of Hapag Lloyd. Thus, we can understand how this family became so rich: by pocketing the fruits of the labour of thousands of workers.

This is why the right to property is the crux of the capitalist system and of social inequality. This right is complemented by another right, the right to inheritance. Thus, the richest families usurp the collectively produced wealth and inherit it for generations and generations.

There are no major changes between the new Constitution and the previous one

In the current Constitution, article 24 deals with property. In the new Constitution, it is article 78. Both articles are very similar, with changes in secondary aspects (which we will not develop here for reasons of space). What are the main aspects that remain almost the same?

1 – The ownership of natural or legal persons (companies, foundations, etc.) is guaranteed over all kinds of goods and in all their species, which also includes services such as education, health, etc.

2 – In the event that the state decides to expropriate property, it will have to pay compensation before taking possession of the property. This aspect makes it practically impossible to expropriate large properties, such as large copper mining companies or large forestry estates in order to return the land to the Mapuche people, for example.

Thus, the new Constitution, like the previous one, protects private property in all its aspects, which will maintain the concentration of property in large economic groups, and consequently, the enormous social inequality.

The property law was approved in the Convention by the vast majority of its members, in a unity that ranged from the right wing to the PS (Socialist Party), FA (Frente Amplia), PC (Communist Party) and most of the independents. The right wing was divided only in the discussion about expropriation. This vote shows that even those who call themselves “communists” or “defenders of the people” are in favour of defending the property of the big business.

The big private property in Chile is the result of usurpation

Any worker could say that it is fair to defend private property and pay the right price if the state wants to expropriate it. We would agree if it referred to the property of a worker who has saved all their life to buy a house, a flat, a small plot of land or owns a small business.

But we are not talking about it. In the case of large properties owned by companies, banks and land property, we believe that it is fair, legitimate and necessary to expropriate their owners without compensation.

Large private property in Chile is the result of theft, usurpation, corruption and violence. The Pinochet dictatorship, supported by violent repression that totally suppressed democracy in the country, gave away the national patrimony to large economic groups, their friends and relatives. A 2004 report by the Chamber of Deputies calculates that in the case of the privatisation of 30 companies during the period 1978-90, the Chilean state lost more than 2 billion dollars, which at the time corresponded to 6% of GDP. In the same period, more than 725 companies were privatised and the losses of the state reached unimaginable figures. This is how today’s large economic groups emerged or expanded. The vast majority of these privatisations were totally fraudulent, where state ministers or executives of state-owned companies became owners of the privatised companies, as was the case of Pinochet’s former son-in-law Ponce Lerou, José Piñera, Roberto de Andraca and others.

The creation of the AFPs, which went on to manage billions of dollars of workers’ savings, was another scandal. The big businessmen quickly became the owners of these agencies and began to use our money to do their own business. The Penta Group, known for the impressive cases of corruption of its executives, for example, was one of many created and expanded during the dictatorship. Today, among their properties, they own more than 600,000 m² of underutilised land in the city of Santiago, which could very well be used to build affordable housing for low-income workers. But if we want to expropriate that land, we will have to pay millions of dollars in compensation to corrupt executives like Carlos Delano and Carlos Lavín. Another example is the forestry companies, which today own 3 million hectares of land and benefited from Pinochet’s Counter Agrarian Reform and huge subsidies granted by the state over the last 30 years. So, if we want to return the land to the Mapuche people, should we pay millions of dollars to these usurper families and accomplices of the dictatorship? Our answer is no. This situation is reproduced in all branches of the economy.

Expropriate the big economic groups and plan the economy

That is why in the Constitutional Convention we put forward a proposal to expropriate, without compensation, all the big economic groups in the country and put these companies under the control of the workers and the people. This would make it possible to put an end to the concentration of wealth and to plan the economy, generating a real plan of investment in health, housing, education and industrialisation that would make it possible to achieve full employment and guarantee a decent life for the majority of the population. Our proposal (Read here in Spanish) was rejected by the Convention’s Commission on the Environment and Economic Model, but it will remain more topical than ever as long as capitalism exists in Chile and in the world.

Notes:

[1] – We consider that the profit made by Hapag Lloyd is the result of the work of its employees as well as the workers of the companies supplying equipment and raw materials.

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