Hostname: page-component-586b7cd67f-2plfb Total loading time: 0 Render date: 2024-11-27T21:23:05.103Z Has data issue: false hasContentIssue false
  • English
  • Français

Capitalist Coalitions, the State, and Neoliberal Economic Restructuring: Chile, 1973–88

Published online by Cambridge University Press:  13 June 2011

Eduardo Silva
Eduardo Silva
Affiliation:
University of Missouri-St. Louis
Get access

Abstract

This article argues that a high degree of relative state autonomy and ideology, while necessary, was not sufficient to explain fully the change from import-substitution industrialization to an open, free-market economy in Chile. A comparison across three distinct policy periods in authoritarian Chile reveals that shifting coalitions of businessmen and landowners, with varying power resources, also played an important part in the outcome. This approach does not seek to vitiate other interpretations of economic change in Chile and elsewhere. The question is not so much which factor is most important, but how and when the different factors matter.

Type
Research Article
Information
World Politics , Volume 45 , Issue 4 , July 1993 , pp. 526 - 559
Copyright
Copyright © Trustees of Princeton University 1993

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 For examples of the statist-ideological explanation in the Chilean case, see Foxley, Alejandro, Latin American Experiments in Neoconservative Economics (Berkeley: University of California Press, 1983)Google Scholar; Campero, Guillermo, Los gremios empresariales en el período 1970–1983 (Business associations between 1970 and 1983) (Santiago: ILET, 1984).Google Scholar Another studies that favor social forces fall back on statist arguments in the Chilean case. See Jeffry Frieden, “Winners and Losers in the Latin American Debt Crisis: The Political Implications,” in Stallings, Barbara and Kaufman, Robert, eds., Debt and Democracy in Latin America (Boulder, Colo.: Westview Press, 1989).Google Scholar

2 For the development of Pinochet's autocracy, see Arturo Valenzuela, “The Military in Power: The Consolidation of One-Man Rule in Chile,” in Drake, Paul W. and Jaksic, Iván, eds., The Struggle for Democracy in Chile, 1982–1990 (Lincoln: University of Nebraska Press, 1991).Google Scholar

3 For a similar view, see Risse-Kappen, Thomas, “Public Opinion, Domestic Structure, and Foreign Policy in Liberal Democracies,” World Politics 43 (July 1991).CrossRefGoogle Scholar

4 For a description of these policies, see Foxley (fn. 1); Ramos, Joseph, Neoconservative Economics in the Southern Cone of Latin America, 1973–1983 (Baltimore: Johns Hopkins University Press, 1986)Google Scholar; Edwards, Sebastian and Cox-Edwards, Alejandra, Monetarism and Liberalization: The Chilean Experiment (Cambridge: Ballinger, 1987).Google Scholar

5 For the foundational character of these regimes, see Garretón, Manuel Antonio, El proceso político chileno (The Chilean political process) (Santiago: Facultad Latinoamericana de Ciencias Sociales, 1983)Google Scholar; and Smith, William C., Authoritarianism and the Crisis of the Argentine Political Economy (Stanford, Calif.: Stanford University Press, 1989).Google Scholar

6 For policy learning, see Hall, Peter A., The Political Power of Economic Ideas: Keynesianism across Nations (Princeton: Princeton University Press, 1989)Google Scholar; Heclo, Hugh, Policy and Politics in Sweden: Principled Pragmatism (Philadelphia: Temple University Press, 1987).Google Scholar

7 Classic examples of the statist approach include Skocpol, Theda, States and Social Revolutions (Cambridge: Cambridge University Press, 1979)CrossRefGoogle Scholar; Krasner, Stephen, Defending the National Interest (Princeton: Princeton University Press, 1978)Google Scholar; Goldstein, Judith, “The Political Economy of Trade: Institutions of Protection,” American Political Science Review 80 (March 1986).CrossRefGoogle Scholar

8 The neoliberal cases of the 1970s were different from the bureaucratic-authoritarian (BA) experiences of Brazil and Argentina in the mid-1960s. Although economic and political crises also contributed to their rise and they too emphasized labor repression and economic stabilization, they did not seek to reduce the state's role in the economy; nor did the BA regimes encourage a rapid shift of resources from import-substitution industrialization to agricultural-commodity export, or pursue extreme market liberalization. To the contrary, they sought to “deepen” industrialization, which required state-directed industrial policy. For a recent discussion of these differences, see Schamis, Hector E., “Reconceptualizing Latin American Authoritarianism in the 1970s: From Bureaucratic-Authoritarianism to Neoconservatism,” Comparative Politics 23 (January 1991).CrossRefGoogle Scholar

9 For this view, see Lindblom, Charles E., Politics and Markets (New York: Basic Books, 1977).Google Scholar

10 Recent scholarship in the field of Latin American politics has called for the development of approaches that tackle these theoretical problems. See Smith, Peter H., “Crisis and Democracy in Latin America, World Politics 43 (July 1991)CrossRefGoogle Scholar; and Schamis (fn. 8).

11 Haggard, Stephan, Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca, N.Y.: Cornell University Press, 1990).Google Scholar

12 For a similar view, see Zysman, John, Governments, Markets and Growth: Financial Systems and the Politics of Industrial Change (Ithaca, N.Y.: Cornell University Press, 1983).Google Scholar

13 For inclusionary and exclusionary regimes, see Stepan, Alfred, The State and Society: Peru in Comparative Perspective (Princeton: Princeton University Press, 1978).Google Scholar

14 For an elaboration of this critique of Haggard, see Wade, Robert, “East Asia's Economic Success: Conflicting Perspectives, Partial Insights, Shaky Evidence,” World Politics 44 (January 1992).CrossRefGoogle Scholar

15 For a discussion of this view of power and its consequences, see Swensen, Peter, “Bringing Capital Back in, or Social Democracy Reconsidered: Employer Power, Cross-Class Alliances, and the Centralization of Industrial Relations in Denmark and Sweden,” World Politics 43 (July 1991)Google Scholar; and Esping-Andersen, Gøsta, The Three Worlds of Welfare Capitalism (Princeton: Princeton University Press, 1990).Google Scholar

16 Studies that focus on organized business include Campero (fn.l); and Schmitter, Philippe C., Interest Conflict and Political Change in Brazil (Stanford, Calif.: Stanford University Press, 1971).Google Scholar

17 Gourevitch, , Politics in Hard Times: Comparative Responses to International Economic Crisis (Ithaca, N.Y.: Cornell University Press, 1986)Google Scholar; Frieden, , “Classes, Sectors and Foreign Debt in Latin America,” Comparative Politics 21 (October 1988).CrossRefGoogle Scholar

18 Some Marxist and dependency school analysts have drawn distinctions between the national and the internationalized industrial bourgeoisie. They generally emphasize the degree to which domestic capitalists associated with transnational corporations, for example, in their licensing and credit arrangements and their willingness to form joint ventures. This distinction helped to explain the structural characteristics of dependent economies in the periphery and semiperiphery of the world economy and aided in assessments about the likelihood of progressive (or socialist) social and political change. Some studies also examined alliances between international finance and the internationalized bourgeoisie to explain the trend toward neoliberalism in Latin America. My analysis, while seeking to build on these insights, differs on several important counts. First, this article focuses on explanations for economic policy change, rather than on the structural characteristics of the economy and its implications for national liberation. Second, I examine a much broader range of dominant class fractions, including landowners. The Marxist and dependency approaches usually focus only on the industrial bourgeoisie and, in a few instances, the financial bourgeoisie. Third, I disaggregate class fractions more than the Marxist or dependency approaches. Because the Marxist and dependency approaches examine a narrower range of dominant class fractions and because they tend not to disaggregate them, they have difficulty explaining differences in the degree, style, and substance of economic adjustment across countries and within them. I argue that explaining those outcomes requires, among other things, taking into account a much broader range of the bourgeoisie's class fractions and disaggregating them more. It allows us to uncover more fluid and varied coalitional possibilities, which help to unearth the social basis of economic policy changes even in extremely repressive capitalist states.

19 The evidence presented in this article calls into question Frieden's argument that extreme class conflict produced a “Bonapartist” situation in which capitalists gave state elites a free hand in economic policy-making in return for order.

20 This is highlighted in Gourevitch's treatment of Bismarckian Germany and the shift from free trade to protectionism in the 1890s.

21 Some of the earlier literature on authoritarianism recognized that the military selected influential persons to direct government economic agencies because they presumably spoke for important business and landowning constituencies. But subsequent work rarely explored the class-based background of highly ideological ministers of economic affairs. And when it did, it failed to tie them to larger coalitions of capitalists and landowners both inside and outside business organizations. For the classic statement, see Linz, Juan J., “An Authoritarian Regime: Spain,” in Allardt, Erik and Rokkan, Stein, eds., Mass Politics: Studies in Political Sociology (New York: Free Press, 1970).Google Scholar Another work that connects ministers to class backgrounds, see O'Donnell, Guillermo, Bureaucratic Authoritarianism: Argentina, 1966–1973, in Comparative Perspective (Berkeley: University of California Press, 1988), 72.Google Scholar Another a study that does link capitalist coalitions to the state, see Maxfield, Sylvia, Governing Capital: International Finance and Mexican Politics (Ithaca, N.Y.: Cornell University Press, 1990).Google Scholar Another an instrumentalist view of the state, see Miliband, Ralph, The State in Capitalist Society: An Analysis of the Western System of Power (New York: Basic Books, 1969).Google Scholar

22 For a useful overview of these periods, see Hurtado, Carlos, De Balmaceda a Pinochet (From Balmaceda to Pinochet) (Santiago: Ediciones Logo, 1988).Google Scholar

23 For policy networks, see Katzenstein, Peter, ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press, 1978)Google Scholar; Domhoff, G. William, The Power Elite and the State: How Policy Is Made in America (NewYork: Aldine de Gruyter, 1990)Google Scholar; Mann, Michael, The Sources of Social Power, vol. 1 (Cambridge: Cambridge University Press, 1986).CrossRefGoogle Scholar

24 Foreign direct investment was an additional component of the ISI strategy.

25 For representative samples of the extensive literature on those periods of Chilean history, see Loveman, Brian, Chile; The Legacy of Hispanic Capitalism (New York: Oxford University Press, 1979)Google Scholar; Stallings, Barbara, Class Conflict and Economic Development in Chile (Stanford, Calif.: Stanford University Press, 1978)Google Scholar; and Vylder, Stefan de, Allende's Chile (Cambridge: Cambridge University Press, 1976).Google Scholar

26 For the minority policy position within the SFF I relied on personal interviews with Gustavo Ramdohr, former director of the metal-sector's association, and Orlando Sáenz, president of the SFF at the time. These and all other interviews took place in Santiago de Chile between July 1988 and June 1989. For the policy position of the SNA, see El Campesino, November 1973 and January-February 1974; for the CNC, see Memorias Anuales, 1973 and 1974; I derived SONAMI'S position from a personal interview with Manlio Fantini, a member of SONAMI'S elected board, and Carlos Rodríguez, SONAMI'S director of planning. For the SFF'S stance, see El Mercurio, December 15, 1973, and January 9, 1974, as well as SFF president Orlando Sáenz's speech in Informativo SFF, February-March 1974. For the CPC'S policy position I relied on personal interviews with Manuel Valdés, organizer of the Second CPC Convention in December 1973, and media accounts of the convention in El Mercurio, Ercilla, and El Campesino.

27 The fact that gradual adjustment stressed industrial development showed that the SFF still commanded great power. Informativo SFF, February-March 1974.

28 Domestic market producers in agriculture opposed high tariffs because they diverted investment to industry.

29 Author interview with Sergio Molina, minister of finance in the mid-1960s, Santiago de Chile, May 1988.

30 These and all other prosopographical data on SSF members and government officials were culled from SSF, Memorias (Annual report), selected years; Colegio de Periodistas, Diccionario Biográfico (Who's who), selected years; company annual reports; and Directorio de Ejecutivos y Empresas (Directory of firms and executives), selected years.

31 Author interview with Ramdohr, Gustavo, former official of the metallurgical-sector association, Asociación de Industrias Metalúrgicas, Santiago de Chile, 1988.Google Scholar

32 Accounts of the convention are from El Mercurio, Ercilla, El Campesino, and author interviews with Jorge Fontaine, president of the CPC at the time, and Manuel Valdés, vice president of the cpc and the principal organizer of the business summit. The interviews were conducted in Santiago, Chile, on August 6, 1989, and March 29, 1989, respectively.

33 Author interview with Valdés (fn. 32).

34 For the Monday Club and the Brick (El Ladrillo), see O'Brien, Philip, The Pinochet Decade (London: Latin America Bureau, 1983)CrossRefGoogle Scholar; Aldunate, Arturo Fontaine, Los economistas y el presidente Pinochet (The economists and President Pinochet) (Santiago: Editorial Zig-Zag, 1988)Google Scholar; Cavallo, Ascanio, Salazar, Manuel, and Sepúlveda, Oscar, La historia oculta del régimen militar (The hidden story of the military regime) (Santiago: Editorial La Epoca, 1988).Google Scholar

35 Of the Monday Club's seven regular members, five were top executives of the Edwards conglomerate and two were from the BHC conglomerate. Of the Brick's ten regular members, three each were at the Edwards and BHC conglomerates. The other four were Christian Democrat economists and former Central Bank officials during the Eduardo Frei administration (1964–70). The Christian Democrats participated in the Brick in a subordinate role because that was their position within the larger coup coalition. For their role in the breakdown of democracy, see Valenzuela, Arturo, The Breakdown of Democratic Regimes: Chile (Baltimore: Johns Hopkins University Press, 1978).Google Scholar

36 Conglomerates were categorized according to the concentration of companies in various economic sectors. Fixed-asset conglomerates producing for domestic markets had about half of their companies in such sectors. Whether they were competitive or not was determined by the industrial sector the company was in, not by the performance of the individual firm. The criteria for the international competitiveness of sectors were taken from Campero, Guillermo and Valenzuela, José, El movimiento sindical en el régimen military chileno (The union movement in Chile's military regime) (Santiago: ILET, 1984).Google Scholar Another contrast, internationalist conglomerates had about two-thirds or more of their companies distributed between sectors that produced for export and the liquid-asset sectors—finance, insurance, trade, and real estate.

The lack of systematic data precluded categorizing conglomerates on the basis of assets rather than firms. However, the system employed here allows one to appreciate more fully the influence of financial institutions in conglomerate strategy, which is out of proportion to a financial firm's assets. Moreover, some may feel that the cutoff for fixed-asset domestic-market-oriented and internationalist conglomerates is too loose, but the initial policy positions largely correspond to the expectations raised by the criteria adopted in this article. According to the available data, unequivocally internationalist conglomerates (particularly those most intimately linked to the policy process) favored a radical policy. The two conglomerates closer to a fifty-fifty split between the two major orientations could, in principle, go either way: support radical change or the status quo. However, they initially did what their composition suggests, they backed the middle path—a gradual adjustment to export-led growth—rather than either extreme. As one would expect, both later shifted their holdings to conform to an unequivocally internationalist profile. Conglomerates that were 100 percent fixed-asset and domestic-market-oriented in their production (with 50 percent or more of firms in internationally uncompetitive sectors, particularly metalworking and electronics) supported continued high protection. Among other factors, they simply had too much at stake in the uncompetitive sectors and lacked financial institutions to make production shifts easier.

37 El Mercurio, October 26 and December 15, 1973, and January 9, 1974. The Matte group was another prominent competitive domestic-market-oriented conglomerate, and its directors favored gradual adjustment as well. Jorge Alessandri, the chairman of the board, had sponsored a gradual trade liberalization project during his tenure as president of the republic between 1958 and 1964.

38 Not all internationalist conglomerates were so heavily weighted toward liquid assets, although that was true of those most connected to the government until 1982. Others had a higher proportion in primary product export and trade. This was particularly true of the Angelini, Hochschild, and Menéndez groups.

39 This was particularly the case of Manuel Cruzat, who, along with his lieutenants, later had privileged access to policymakers. Cruzat split off from the BHC group (which was left under the control of Javier Vial) and quickly built an economic empire to rival it.

40 A third type of conglomerate, whose leaders did not participate in the precoup stages of policy-making for a post-Allende era, were economic groups with half or more of their companies in internationally uncompetitive industrial sectors. In the more extreme types, such as the well-known Lepe and Briones groups, they had no investments in liquid-asset sectors. As predicted by both Gourevitch's and Frieden's system of disaggregation, these groups supported continued high protection because they found it very difficult to adjust to sudden change. Their position found little favor in policy-making circles. Their directors were not included in the Monday Club or the Brick; they were not favored with high office; and they found little support in the SFF.

41 This does not mean that the persons who then occupied government posts were neces sarily involved in the Monday Club and the Brick. Nevertheless, their appointment reflected the political power of the Edwards group.

42 For a study of the origins and networks of the Chicago Boys, see Valdés, Juan Gabriel, La escuela de los Chicago: Operación Chile (The Chicago school: Operation Chile) (Buenos Aires: Grupo Editorial Zeta, 1989).Google Scholar

43 Author interviews with Orlando Saenz and Manuel Valdés, Santiago, Chile, September 17, 1988, and March 21, 1989.

44 O'Donnell, Guillermo, “Tensions in the Bureaucratic-Authoritarian State and the Question of Democracy,” in Collier, David, ed., The New Authoritarianism in Latin America (Princeton: Princeton University Press, 1979).Google Scholar

45 For this view of upper-class behavior, see Anderson, Charles H., Politics and Economic Change in Latin America (New York: D. Van Nostrand, 1967)Google Scholar; Schmitter (fn. 16); and Zeitlin, Maurice and Ratcliff, Richard E., Landlords and Capitalists: The Dominant Class of Chile (Princeton: Princeton University Press, 1988).CrossRefGoogle Scholar

46 For those policies, see Edwards and Edwards (fn. 4). This cite and also Foxley (fn. 1) and Ramos (fn. 4) describe the overall economic consequences of each set of reforms.

47 Griffith-Jones, Stephany and Sunkel, Osvaldo, La crisis de la deuda y del desarrollo en América Latina: El fin de una ilusión (The Latin American debt crisis: End of an illusion) (Buenos Aires: Grupo Editor Latinoamericano, 1987).Google Scholar

48 Company annual reports of key financial institutions revealed that key officers had been employed by Citibank in Chile. The concentration of financial intermediation of foreign loans is a testimony to their privileged position. See Dahse, Fernando, El mapa de la extrema riqueza (The map of extreme wealth) (Santiago: Editorial Aconcagua, 1979).Google Scholar

49 It could be argued that, compared with Argentina and Uruguay, nationalization and land reform under Allende set in motion uncharacteristically severe conflict among businessmen and landowners in authoritarian Chile. The other cases lacked that experience, and their economic openings were more shallow and less sustained.

50 For an account of this process, see Dahse (fn. 48); and Sanfuentes, Andrés, “Los grupos económicos: Control y políticas,” Estudios Cieplan 15 (1984).Google Scholar Another, when financial sector reform was on the policy agenda, the radical Chicago Boys who controlled the Central Bank had close business ties to the internationalist conglomerates. They invited executives from those conglomerates to participate in the discussions. These data are from a personal interview with Juan Villarzú, budget director at the time, and Chile, Banco Central de, Estudios monetarios III: Seminario de mercados de capitales (Monetary studies III: Seminar on capital markets) (Santiago: n.p., 1974).Google Scholar Another a description of how the Chicago Boys took over key offices from more moderate persons, see Montecinos, Verónica, “Economics and Power: Chilean Economists in Government, 1958–1985” (Ph.d. diss., University of Pittsburgh, 1988)Google Scholar; and Fontaine Aldunate (fn. 34).

51 The Cruzat-Larrain conglomerate was born of a split in the BHC in 1974.

52 To give another perspective on the importance of these conglomerates, they controlled the lion's share of the financial system (and therefore of international financial intermediation), as well as a high proportion of the assets of the 250 largest Chilean companies. For example, by the end of 1977 the BHC group alone controlled 38% of private sector banking in Chile; Cruzat-Larrain, 2%; and Edwards, 7%. Moreover, of the total assets of Chile's largest 250 companies (about U.S. $3.8 billion) Cruzat-Larrain alone controlled 25%, BHC 13%, and Edwards 3%.

53 For Pinochet's rise to power, see Valenzuela (fn.2).

54 Many interviewees, such as Orlando Sáenz, Juan Villarzú, and Andres Sanfuentes, mentioned this fact.

55 Author interview with Juan Villarzú, budget director, 1974–75, Santiago, Chile, December 12, 1988.

56 Author interview with Andrés Sanfuentes, an early civilian economic adviser to the military government, Santiago, Chile, March 12, 1989.

57 The first big public outburst of this conflict occurred during Jorge Alessandri's 1970 presidential campaign. Sergio de Castro, a campaign adviser, wanted to develop a radical neoliberal economic platform. Cooler heads prevailed.

58 Author interview with O. Sáenz (SFF) and Guillermo Elton (CNC), Santiago, Chile, September 17, 1988, and March 13, 1989, respectively; Campero (fn. 1).

59 For a further elaboration of the pragmatic neoliberal model, see Eduardo Silva, “The Political Economy of Chile's Regime Transition: From Radical to ‘Pragmatic’ Neoliberal Policies,” in Drake and Jaksic (fn. 2). See also Whitehead, Laurence, “The Adjustment Process in Chile: A Comparative Perspective,” in Thorp, Rosemary and Whitehead, Laurence, eds., Latin American Debt and the Adjustment Crisis (Pittsburgh, Pa.: University of Pittsburgh Press, 1987).Google Scholar

60 For analyses that stress the importance of splits at the top in political change, see Skocpol (fn. 7); Chalmers, Douglas and Robinson, Craig, “Why Power Contenders Choose Liberalization,” International Studies Quarterly 26, no. 1 (1982)CrossRefGoogle Scholar; O'Donnell (fn. 44).

61 For an overview of these processes, see Foxley (fn. 1). Firm behavior was gleaned from personal interviews with executives and selected company annual reports.

62 For the Latin American debt crisis, see Stallings and Kaufman (fn. 1); Canak, William L., ed., Lost Promises: Debt, Austerity and Development in Latin America (Boulder, Colo.: Westview Press, 1989).Google Scholar

63 For the 1982–84 economic crisis, see Edwards and Edwards (fn. 4).

64 Sergio de la Cuadra and Salvador Valdés, “Myths and Facts about Instability in Financial Liberalization in Chile, 1974–1983,” in Brock, Philip L., ed., If Texas Were Chile: A Primer on Banking Reform (San Francisco: ICS Press, 1992).Google Scholar

65 The annual reports of the SFF, SNA, and CNC and SFF/SNA publications such as Informativo SFF and El Campesino were remarkably uncritical between 1979 and 1981.

66 Confederación de la Producción y Comercio, “Recuperación económica: Análisis y proposiones” (Economie recovery: Analysis and policy proposals) (Santiago de Chile, July 1983), and related documents presented by member associations. For its genesis, see Campero (fn.1).

67 With respect to the tariff issue, the SFF designated a study commission in January-February of 1982. It issued a recommendation in favor of differentiated tariffs in October; see SFF, “Informe final de la comisión SFF para estudiar una alternativa al sistema arancelario,” October 20, 1982.Google Scholar Another a March 22, 1982, memorandum that defined the business definition of the social market system, the CPC explicitly supported low, across-the-board tariffs. In November 1982 the SNA flatly declared itself against differentiated tariffs; see minutes of CPC Executive Committee meeting no. 577, November 25, 1982. SONAMI had gone on record against such tariffs in August; see Estrategia, August 16–22, 1982. The finance and construction associations were at best ambivalent.

68 This was the significance behind the Carlos Cáceres-Manuel Martín economic team.

69 For the composition and evolution of mass mobilization and its impact on the regime, see Garretón, Manuel Antonio, Reconstruir la política: Transición y consolidación democráticaen Chile (Reconstructing politics: The transition to democracy and its consolidation in Chile) (Santiago: Editorial Andante, 1987)Google Scholar; and idem, “The Political Opposition and the Party System under the Military Regime,” in Drake and Jaksic (fn. 2).

70 For AD'S essentially conciliatory economic policy stance, see Foxley, Alejandro, “Algunas condiciones para una democratización estable: El Caso de Chile,” Estudios Cieplan, no. 9 (1982)Google Scholar; Cieplan, , Reconstrucción económica para la democracia (Economie reconstruction for democracy) (Santiago: Editorial Aconcagua, 1983)Google Scholar; and the Christian Democratic Party, Proyecto Alternativo (Alternative project) (Santiago: Editorial Aconcagua, 1984), esp. vol. 2.Google Scholar

71 For example, when the CPC distributed its economic recovery plan to government ministers, the SFF cautioned that although the private sector did not wish to break with the government it might be forced into opposition (Qué Pasa, no. 639, July 7, 1983). In the same spirit, Jorge Fontaine, president of the CPC, declared that business only sought confrontation with governments when the survival of the free enterprise system was at stake. The authorities should recognize that adherence to orthodox deflation would lead to perdition (Hoy, no. 311, July 6, 1983).

72 He was president of the Construction Chamber when the CPC developed its economic recovery program. As minister of public works, he had labored to implement a government construction program that the Construction Chamber had elaborated in 1983. Author interview with Pablo Araya, director of research, Cámara Chilena de Construcción (CchC), Santiago, Chile, May 3, 1989.

73 Author interview with Manuel Valdés, president of the SNA, Santiago, Chile, May 3, 1989.

74 Author interview with Pablo Araya, Chilean Construction Chamber, Santiago, Chile, May 3, 1989.

75 Lecaros, Augusto Z., “Representación de los intereses de la sociedad en el estado y los consejos económicos y sociales” (Interest-group representation in the state and the social and economic councils) (M.A. thesis, Instituto de Ciencia Política, Pontificia Universidad Católica, 1989).Google Scholar Another interview with Beltrán Urenda, chairman of the CES, Santiago, Chile, May 31, 1989.

76 Author interview with Efraín Friedman, SFF, Santiago, Chile, November 16, 1988.

77 Author interviews, all conducted in Santiago, Chile, with Gustavo Ramdohr, president of the Nontraditional Exporters' Association (ASEXMA), August 25, 1988; Manuel Valdés, president of the SNA, March 21, 1989; Efraín Friedman, SFF, November 16, 1988; Lee Ward, ministry of economy, director of the National Commission for External Commerce, December 13, 1988; minutes of the meetings of the Commission's Subcommission for Drawback Legislation, a subcommission of the National Commission for External Commerce.

78 Author interview with Jaime Alé, SFF director of planning, Santiago, Chile, September 27, 1988.

79 Author interview with Lee Ward, director of the National Commission for External Commerce, and selected minutes of the meetings of the Subcommission for Drawback Legislation, Santiago, Chile, December 13, 1988.

80 This was actually the second wave of privatization in Chile. The first one occurred between 1973 and 1980, and it involved the devolution of firms nationalized by Allende, as well as some historically state-owned firms. The second wave began slowly because of the lack of funds in the private sector to buy and because of the difficulty of disentangling debt and ownership issues. Many more historically state-owned firms were also spun off during this second period.

81 Rozas, Patricio, El mapa de la extrema riqueza: 10 años después (The map of extreme wealth: Ten years later) (Santiago: Ediciones Chile-América, 1989).Google Scholar Another, Matte, and Menéndez were among the most prominent of these conglomerates.

82 It must also be recognized that the gradualist coalition had its origins in the broad coalition of upper- and middle-class interests that allied against Salvador Allende. Since their efforts had partially spurred the military to action, it seems logical that the junta relied on them for their policy proposals, at least initially. It was, after all, supposed to be a government of national reconciliation. In this context, the Brick represented a planning tool inspired by neoliberals but tempered by negotiation with other sectors. It set guidelines for a market economy, but the pace and extent of structural transformation was not spelled out. According to my interviews with businesspeople who lost out to the radical neoliberals, intraelite conflict turned precisely on those issues. See also Centro de Públicos, Estudios, “El Ladrillo”: Bases de la política económica del gobierno militar chileno (“The Brick”: The bases of the Chilean military government's political economy) (Santiago: Centro de Estudios Públicos, 1992).Google Scholar

83 Silva, Eduardo, “Capitalist Regime Loyalties and Redemocratization in Chile,” Journal of Interamerican Studies and World Affairs 34 (Winter 1992).CrossRefGoogle Scholar