Chile: Production and Distribution Models along the 20 Century

Manuel Riesco

See presentation and tables in Appendix

Wednesday July 2 2008

Presented at the seminar

Production and Distribution in Latin America: Trajectories and Prospects

San José, Costa Rica, 3 and 4 July 2008

Summary

The paper tries to look at the history of Chile during the XXth century through the lens of its main statistics[1], following the thread of the evolution of its social relations, that is, the way people work and live, and the institutions they have created. The figures speak mostly by themselves. Sometimes, they surprise common sense. Others seem to spectacularly confirm some conclusions of political economy.

The country transformed itself completely during the past century. This took place in a single process, presided over by the State. However, the successive strategies that guided its action divide it sharply in two periods usually known as developmentalism and the Washington consensus. The change from one to the other signals violent contrasts, nevertheless, both seem to share as well significant aspects of continuity.

Traditional peasants, who in the 1930 census were over half of the population, had extinguished mostly by 2006. Their painful mutation into urban salaried workers constitutes the main saga of the period. Since 1929 overall population multiplied by four (3.9), reaching 16.4 million in 2006. In the meantime, rural population remained static in 2.2 million. However, they are today quite different from their kin of yesterday.

Meanwhile, the population of the five main cities multiplied six times over (6.2) and Santiago by seven (7.1). The labour force – that measures the population in disposition to work in the market – multiplied by five (4.7). The labour market grew faster than the population, mainly because women workers increased more than eight times over (8.3).

The country modernized and diversified, extraordinarily. Manufacturing signalled general economic growth, multiplying thirteen times over (13.6 times), especially because its fast growth during the developmentalist period. Copper production increased over sixteen times (16.7), meanwhile coal decreased in half (0.5), the same as nitrate (0.4). Exports grew (19.9 times) faster that the general economy, and so did imports (17.8 times), mainly during the Washington consensus. Manufacturing exports have grown faster, from a tiny fraction of the total (4.6%) to almost half (42.3%) today. However, most of them are still scarcely elaborated raw materials.

Value added to commodities produced each year – goods and increasingly services -, measured by gross domestic product (GDP) has increased almost fourteen times over (13.8). This may be explained in part because worker productivity increased threefold (2.9). However, the main reason is that the labour force increased almost five times (4.7).

The behaviour of these two factors differs dramatically in the two strategic periods, being developmentalism much more intensive. That is, economic growth stems in a larger extent from labour productivity increases, which in turn may be explained by the fast rural migration and the extraordinary emphasis of developmentalism to improve the education and health of the labour force. Meanwhile, labour productivity stagnates during the Washington consensus, at the same time that growth of the labour force shoot up, mainly due to the massive influx of women workers.

Real wages have increased over four times over (4.3). However, this only happened during developmentalism. Instead, they were slashed after the 1973 coup, and their recovery since 1990 has not been enough.

However, the share of salaries in overall income grew over 20 times over since 1929. During developmentalism, this happened because both salaries and the workforce increased very fast. During the Washington consensus, instead, it continued to happen only because of the latter, since wages stagnated.

The retrenchment of salaries during the latter period was so severe that the share of salaries grew slower than GDP, even though the workforce expanded extraordinarily. This happens even before taking into account the increase in unemployment rate, which doubled after the coup, aggravating this effect. However, the increase in the share of salaries was so considerable during developmentalism that it is significantly better today than before the Great Depression.

The State, and especially social policies grew even faster, as overall public expenditure increased almost thirty fold (28.7) and social expenditures over one hundred times (108.9). Growth was fastest in education (36.7) and especially in health (110.0). Since he privatization of pension contributions in 1981, instead of generating a surplus as until then, this item that accounts for over 40% of public social expenditure.

School enrolment grew over six times over (6.2), especially in secondary (25 times) and shot up in tertiary (151 times), and fairly the same as population (3.8 times), in primary level. Public expenditure by pupil increased four times in basic level (4.3 times), and twice over in secondary (1.9), meanwhile its amount in tertiary level after growing extraordinarily until 1973, has been slashed today to levels that are similar to 1929 (1.2 times).

Almost all the improvement in education is explained by the fast increase that took place during developmentalism, both in enrolment and public expenditure. After the coup, instead, enrolment decreased during almost a decade and expenditure was slashed by half, and worse still on a by pupil basis.

The educational system has not yet recovered from this quite brutal slashing, in spite of the efforts to this respect since 1990, because the privatizing bias has continued in place. All of the large increase in out of pocket expenses and large part of the recovery in public expenditure has gone to private institutions, however, only the well off have access to education of good quality. This factor may explain in part the above noted stagnation of worker productivity during the Washington consensus.

Reviewing the main results of the previous strategies seems necessary to trace more precisely the contours of the one that is being drafting into the future. Likewise, to build the new block that must take power to make it a reality. Hopefully, the numbers that are resented in this paper and the vision they show may be useful for this purpose.

Resumen

El trabajo intenta mirar la historia de Chile a lo largo del siglo XX a través del lente de sus principales cifras[2], siguiendo el hilo conductor de la evolución de sus relaciones sociales, es decir, la forma en que la gente vive y trabaja, y las instituciones que ha creado. Las cifras hablan en lo fundamental por si solas. A veces, sorprenden el sentido común establecido. Otras, parecen confirmar algunas conclusiones de la economía política de modo espectacular.

El país se transformó por completo durante el último siglo. Ello ocurrió en un proceso único presidido por la acción del Estado. Sin embargo, las sucesivas estrategias que guiaron su accionar lo dividen tajantemente en dos períodos, generalmente denominados desarrollismo y consenso de Washington. El cambio de uno a otro marca violentos contrastes, sin embargo, ambos presentan asimismo significativos aspectos de continuidad.

Los campesinos tradicionales, que en el censo de 1930 representaban todavía la mitad de la población, se habían extinguido en buena medida el 2006. Su dolorosa transformación en asalariados urbanos constituye la principal epopeya del período. Desde 1929 la población se multiplicó cuatro veces (3,9), alcanzando cerca 16,4 millones el 2006. Mientras tanto, la población rural permaneció estancada todo el tiempo en los mismos 2,2 millones de entonces. Sin embargo, los de ahora son bien diferentes a los de entonces.

Al mismo tiempo, la población de las cinco principales ciudades se multiplicaba por seis (6,2) y los habitantes de Santiago por siete (7,1). La fuerza de trabajo – que mide la población en disposición a trabajar en el mercado - se multiplicó casi cinco veces (4,7). El mercado laboral creció así bastante más que la población debido principalmente a que las mujeres trabajadoras aumentaron más de ocho veces (8,3).

El país se modernizó y su producción se diversificó, extraordinariamente. La producción manufacturera aumentó casi catorce veces (13,6 veces), marcando el crecimiento general de la economía especialmente debido a su rápido crecimiento durante el desarrollismo. La producción física de cobre creció más de quince veces (16,7) mientras la de carbón es hoy la mitad de 1929 (0,5), y lo mismo ocurre con el salitre (0,4). Las exportaciones se multiplicaron por veinte (19,9 veces) y las importaciones algo menos (17,8 veces), especialmente durante el consenso de Washington. La exportación de manufacturas ha crecido constantemente, desde una fracción muy pequeña del total (4,6% ) antes de la Gran Depresión, a poco menos de la mitad (42,3% ) en la actualidad. Sin embargo, las exportaciones industriales principales continúan siendo de hecho materias primas escasamente elaboradas.

El valor agregado de las mercancías producidas anualmente – bienes y crecientemente servicios –, medido por el producto interno bruto (PIB), ha crecido casi catorce veces (13,8). Ello se debe en parte a que el producto por trabajador ha aumentado casi tres veces (2,9). Sin embargo, la razón principal es que la fuerza de trabajo se ha casi quintuplicado (4,7).

El comportamiento de ambos factores difiere sustancialmente en ambos períodos estratégicos, siendo el desarrollismo mucho más intensivo. Es decir, el crecimiento económico se explica en mayor medida por el incremento de la productividad. Ello puede deberse en parte importante a la acelerada migración campesina sumada al extraordinario esfuerzo realizado por el Estado desarrollista para mejorar la salubridad y educación de la fuerza de trabajo. En cambio, durante el consenso de Washington, se estanca la productividad mientras se dispara el crecimiento extensivo de la fuerza de trabajo, principalmente debido a la masiva incorporación de las mujeres.

Las remuneraciones reales han subido más de cuatro veces (4,3). Sin embargo, ello tuvo lugar exclusivamente durante el período desarrollista, mientras se recortaron brutalmente tras el golpe de Estado, lo que no ha logrado ser compensado suficientemente con su recuperación posterior a 1990.

Sin embargo, el pago al factor trabajo considerado en su conjunto creció más de 20 veces desde 1929. Durante el desarrollismo, ello se debió principalmente al rápido incremento tanto en las remuneraciones promedio como en la fuerza de trabajo. Durante el consenso de Washington, en cambio, ello se originó en el crecimiento muy rápido de esta última el que compensó en parte el deterioro de las primeras.

El estancamiento de las remuneraciones durante el segundo período fue tan severo, que el pago al factor trabajo fue inferior al crecimiento del PIB, a pesar del rapidísimo incremento de la fuerza de trabajo. Ello se verifica aún antes de considerar el aumento en la tasa de desempleo la que se duplicó durante este período, lo que agrava dicho deterioro. Sin embargo, la mejora en la distribución del ingreso en favor del factor trabajo fue tan significativa durante el período desarrollista, que a pesar de su retroceso durante el segundo período, ésta es hoy significativamente mejor que antes de la Gran Crisis

El Estado y especialmente las políticas sociales se incrementaron mucho más todavía, puesto que el gasto público aumentó casi treinta veces (28,7) y el gasto social más de cien (108,9). El crecimiento mayor fue en educación (36,7) y especialmente en salud (110.0) (Tablas 10 y 11). El pago de pensiones, dejaba un excedente hasta 1981, sin embargo, tras la privatización de las contribuciones a la seguridad social absorbe más del 40% del gasto público social.

Los alumnos matriculados aumentaron más de seis veces (6,2), especialmente en educación media (25 veces) y se dispararon en el nivel superior (151 veces), mientras los matriculados en educación básica aumentaron lo mismo que la población (3,8 veces). El gasto en educación por alumno, en cambio, aumentó más de cuatro veces en educación básica (4,3), pero no alcanzó a duplicarse (1,9 veces) en educación media. En cambio, su nivel actual en educación superior luego de crecer extraordinariamente hasta 1973, fue recortado luego de modo que hoy es casi igual al de 1929 (1,2 veces).

Casi todas las mejoras en educación se explican por el extraordinario incremento tanto de las matrículas como del gasto total y por alumno durante el desarrollismo. Luego del golpe militar, en cambio, las matrículas disminuyeron durante una década y el gasto total bajó a menos de la mitad y se redujo aún más medido por alumno. Todo el fuerte aumento paralelo del gasto privado y buena parte de la recuperación del gasto público se ha concentrado en establecimientos privados, sin embargo, solo los sectores de mayores ingresos logran acceso a educación de buena calidad.

Este deterioro brutal no ha logrado revertirse todavía, a pesar de los esfuerzos realizados a partir de 1990, porque el sesgo privatizador se ha mantenido. Posiblemente, el mismo incide decisivamente en el estancamiento de la productividad durante el período del consenso de Washington.

Conocer con objetividad los principales resultados de las estrategias anteriores parece indispensable para delinear con mayor precisión la que se esboza hacia el futuro. Asimismo, para construir el nuevo bloque que se requiere instalar en el poder para hacerla realidad. Ojalá las cifras que se presentan a continuación y la visión que ellas muestran, puedan ser de alguna utilidad en esta perspectiva.

Introduction

The present work tries to look at the history of Chile along the 20 century through the lens of its relevant statistics, following the thread of the evolution of its social relations. That is, of the way most of the inhabitants have been changing their ways of living and working, and the main institutions that the country has created in the process. In this sense, it is a work of political economy in its strict classic meaning.

Two landmark events delimit the flow of the century: two military coups that occur almost exactly half century apart, in 1924 and 1973. For some strange design both take place exactly on the same fateful date: September 11. In those decisive moments, the so to say natural course of events is intervened by the most organised fraction of which constitutes by far the highest institutional creation of the Chilean society: the State. Hey define the two main strategies that were to orientate its action along most of the century. Both were violently confronted against one another, however, in a certain sense they seem to conform a unity as well. Successively, through both of them, the State presided over the long and painful socio-economic transformation that took place in the background, which gave birth to modern Chile.

These two strategies were not exclusive to Chile, not in the least. However, they presented here certain paradigmatic features and manifested themselves quite early, especially the second one. Both seem to have been present as well more or less contemporaneously in all the countries that conformed the underdeveloped world of the 20 century. However, the forms adopted by one and the other seemed astoundingly different in each country and moment. Especially, if these categories are also be made to include the countries that conformed the socialist camp - which according to this point of view would have experimented a limit case of state one of these strategies.

In LA, the two strategies manifested themselves in almost every country and generally received the names of “Developmentalism” and “Washington consensus.” Furthermore, in the Chilean case the second one was imposed on sword and fire by a counter-revolutionary dictatorship, long time before it became consensual in LA and the rest of the world. It adopted an extreme form. Because of this, it is generally referred as the “Neoliberal period.”

However, it must be underlined that it is divided as well in two very different phases, and only during the first the Pinochet dictatorship and its counsellors, the fanatical “Chicago Boys,” professed a quasi-religious allegiance to such an extremist school of thought. The second phase of this period was conducted in turn by democratic governments. Their economists would reject the Neoliberal label, which most of them would probably consider rather an insult.

On the other hand, they have been quite influential in the fact that their governments have maintained the basic strategic lineage of the period as a whole. Basically, the idea that to attain development, the main thing is to provide the best possible environment for markets and private business, in a context of indiscriminate opening to foreign trade and investment. With a distorted additional bias: that it is possible and even convenient to continue constraining social demands and dismantling the role of the State. Certainly, however, the aforementioned bias has been moderated considerably when compared with the “Chicago Boys.”

In this way, during this phase, the second development strategy has acquired in Chile more reasonable and moderate contours. Similar, in a way, to those experienced in other LA countries, even to those, such as Costa Rica, where these positive features seem to have been present all along in a rather exemplary way.

Even though they have continued to promote business quite unilaterally, especially foreign capital, they have tried to re-establish the role of the State up to a certain extent. Especially in relation to social public expenditure and certain regulations that were established during the initial years. However, in the big picture, some of the basic State functions such as providing social services and capturing ground rent, have suffered continued dismantling.

For these reasons altogether, the name “Washington Consensus” will be preferred here as a denomination of the second strategy as a whole.

The State and bureaucracies were decisive actors all along the century. However, they do not exist apart from the society that breeds them. In the latter, it is the social actors proper that play their roles as such. Those whose hands and minds produce the wealth of nations and build their institutions. In their birth, growth, decadence, and death, and the may times violent conflicts of each of those moments, they conform the historical happening. During the past century, its course witnessed the death and burial of secular peasant life, at the modern social actors were being born in a labour of a century.

Once completed in a major part, it seems probable that the Chilean society may be facing yet another paramount shift in its development strategy. Under the imperative of building together with its equals, a wider space in LA that may aspire to certain essential degree of sovereignty in the world of the 21 century. Its may be that the time has finally come for the dream of Bolivar to become a reality.

When called upon by history, the workers and simple people of Chile answered firmly and energetically. Also, with singular prudence, illustration and democratic behaviour. During the revolutionary climax of the developmentalist experience, they enforced the paramount and irreversible transformations that the State made in an astonishingly brief moment, which cleared the way for the definitive modernisation of the country. They removed the blockades that impeded the good of Chile.

The renewed social and political activity that seems to agitate them once again, may quite possibly be what is lacking to open the way to the new strategy that seems to be in the making. The continued development of the country seems to demand it with increasing force.

This actor is now massively extended all along this narrow land in the fringe of the world. However, it is very little what they have managed to get for themselves. Mostly, they have fought for modernity and created wealth to be enjoyed by their adversaries, as Luis Emilio Recabarren^[1] wrote a century ago. It seems desirably that in the new period that may be initiating, all members of Chilean society may agree a new social contract that may distribute the wealth and power in a more equitable manner among them.

Looking with objectivity the main results of the preceding strategies seems imperative to outline more precisely the one that seems to be in the making. Likewise, to build the new block that must attain power to make it become a reality. Hopefully, the numbers that are presented in what follows and the vision that they present may be useful in this perspectives.

The Cyclical Rise of the Economy

The numbers of the 20 century speak mostly for themselves. Sometimes, they surprise common sense. Others, they seem to confirm some scientific previsions of political economy rather spectacularly.

Their synthetic presentation in what follows has required a very long a careful selection, compiling and preparation. Most of it has been done by the Catholic University tea headed by professor Rolf Lüders. CENDA has completed their series from 1995 up to 2006. Additionally, it has organised them according to the main strategic periods and, very especially, measured their evolution in accordance to the main economic cycles.

As is well know, capitalist production follows a cyclical ascending course. Since its presence in the world acquired significance, more than 30 important economic cycles have been recorded, starting with the 1825 crisis. The two latest reached their peaks in the developed world in 2000 and 2007. However, in in Chile and most of the developing world, the first of these two cycles reached its peak in 1997. At the moment of this writing - June 2008 -, their current cycle has yet to peak, as developing economies are still experiencing overheated growth. Not for long though, because the developed world is already plunging into what may become its most serious recession since the 1930.

At least six major economic cycles may be identified in the Chilean economy in the periods under study. These peaked in 1929, 1946, 1958, 1972, 1981 and 1997. In addition, the current cycle is measured until 2006, the last year for which full data was available. Additionally, the long cycle that reaches from the peak years of 1884 and 1918 has also been measured, to give an idea of the dynamics of Chilean society before its great transformation. Certainly, many smaller economic cycles may be identified within each of these main ones.

Measuring data series between comparable moments of economic cycles - in this case the peak years have been selected - is a necessary condition to appreciate their evolution with objectivity. Many analysis may be found in economic literature based on data comparisons from a peak year in one economic cycle to the trough of another, or vice versa. The results usually identify quite wrong tendencies and no few times conclude in utter nonsense.

Others simply do not consider cyclical behaviour at all. “This time it is different,” they say, and assume that economic growth or contraction or will continue forever at the rates of the latest years. Some have acquired sad fame, proclaiming “we are doing fine, tomorrow better^[2]” just on the verge of catastrophic economic collapse. On the contrary, every period of depression breeds its prophets of apocalypse, who proclaim the definitive crisis of capitalist economy, the “end of labour,” and this kind of nonsense. This should come to no surprise, because economics is probably the scientific field most prone to biases according to the allegiance of the authors to determined social groups, ideological and even narrow economic interests.

The measurements in this paper show a development process whose extraordinary dynamism reveals itself precisely through constant and many times violent fluctuations, throughout which long term tendencies assert themselves in a rather reasonable and limited manner.

In the delimitation of the main strategic periods, some options have been made that may be polemic from different points of view. These options which should be clear and explicit for this same reason. As has been mentioned, the 11 of September of 1924 and 1973 have been chosen as the starting dates for the two main strategic periods. This seems quite justified from the historic point of view, and renders a certain elegance to the discourse. However, these years do not coincide with peaks or troughs in the respective major economic cycles.

The first date is more or less halfway in the long cycle that spans from 1918 to the moment before the Great Crisis of 1929. For this reason, even though 1924 is consigned as the starting year of the developmentalist experience in Chile, the peak year of 1929 is used as the base for the numbers of that period. Additionally, the census that certified the grand milestone when peasants were for the first time outnumbered by the dwellers of cities and towns, took place in 1930.

The second, and this time fateful, September 11 took place shortly after the long cycle that started in 1958 had reached its peak in 1972. At the same time, long before the already ongoing depression reached its trough in 1975. Additionally, many numbers of 1972 and 1973 are still prone to objections according to the source.The violent political struggle of those years was reflected as well in the way statistics were compiled by one or the other camp. The worse distortion was the gross falsification of the Consumer Price Index (CPI) performed by the dictatorship as soon as it assumed power (Cenda 2001).

This has not yet been fully overcome. It might seem incredible for foreign observers that after almost two decades of the end of the Pinochet dictatorship, none other than official CPI series are still distorted, even though every Chilean researcher - certainly including the compilers of the PUC series - knows that it is grossly distorted and use alternative CPI calculations in their work. However, a more objective view has advanced during recent years. The PUC series are a huge contribution in this direction and seem mostly quite objective. Almost every series in this compact, for example, show a continued growth path in that cycle up to 1972, and even into 1973 for the physical production series. However, even this work assumes a fall of GDP already in 1972, contrary to the official series of the time, which measure significant GDP growth during that year and seem more credible.

For this reason, and mainly to avoid unnecessary polemics, this paper generally uses 1971 as the ending peak year for the cycle started in the peak of 1958. However, in several comparisons where data is not subject to controversy, the years 1972 and 1973 are used as the ending years of the developmentalist period. These are quite more representative, for example, for data public expenditure (1972) or school enrolment (1973).

Finally, the 1884-1929 cycle has been used to give an idea of the so called oligarchic period, which historically lasted only until 1924. However, this introduces a certain distortion in the measurements, because it does not account within the corresponding period all the quite significant pioneering developmentalist initiatives of the Ibañez dictatorship. Especially, the quite extraordinary increases in public expenditure and significant increase in real wages, among other aspects. Due to this factor, the overall results of the developmentalist period are slightly underestimated.

On the other hand, the aggregated results for the two strategic period are complemented with the results of the individual economic cycles, which are also presented as such in all the tables. In this way, the reader may easily infer the necessary corrections of the long periods as a whole, and look at the individual behaviour in each individual cycle as well.

Results of State Strategies along a Century of Economic and Social Development

Chile transformed itself quite completely during the last century. It occurred along a unique process presided over by the State. However, the successive strategies that guided its actions divide the century quite bluntly in two periods. The change from one to the other shows sharp contrasts, however, both show continuity as well in significant aspects.

Continuity...

Traditional peasantry, which in the 1930 census represented exactly half of the population, had mostly disappeared in 2006. In fact, inquilinos and other hacienda-dependent peasants who were so abundant then, exist no more. Neither the latifundistas nor the haciendas. All of them vanished in the vortex of a process that was the real epic of this time.

To be more precise, since 1929 the overall population mutilplied four times over (3.9), reaching 16.4 million in 2006. Meanwhile, rural population remained in stagnation all the time, in the same 2.2 million of thence. In other words, all the increase in population migrated to the cities and towns, or originated there. Seen from another angle, at least half of today Chileans were born peasants themselves, or their fathers or grandfathers.

Even today, around one in every ten inhabitants remain there, which is still a huge number when compared with advanced societies, where peasants represent no more than 2% or 3% of the overall population at the most. However, the vast majority of today rural population lives and works quite differently from their forefathers. And they continue migrating to the cities at a very vast rate, especially the young /Tables 2 and 3).

At the same time, the population of the main cities multiplied by six (6.2), and the inhabitants of Santiago by seven (7,1). The capital grew even faster than implied in this number. Puente Alto is today the second largest city, and San Bernardo has already equalled the port city of Valparaiso in the fifth place. And everybody knows that the first two are really neighbourhoods of Santiago, even though the official statistics consider them apart. However, the centralisation of the population in the largest five cities which include all the aforementioned, peaked in in the 1980 (41.1% of the total. Since then, their share in the overall population has decreased slightly (39.8%), because some medium and small cities are growing even faster (Tables 4 and 5).

The labour force - which measures the working age population in disposition to be hired - multiplied five times over (4.7). In this way, the labour market expanded significantly more than the population, mainly because women workers multiplied over eight times (8,3) (tables 6 and 7). Really, their expansion is even larger, because they constantly cross the quite ethereal frontier between working in market and at home. This has been proven by he private pensions administrators’ (AFP) statistics, where women with an active account exceed the female workforce estimated by the national statistics bureau (INE) by over one third (tables 17 and 18).

Most of those flowing into the labour market went to construction (labour force (FT) grows 9 times), commerce (8.6) and other services (8.9). Meanwhile, the labour force in agriculture and fisheries (1.6) and mining (1.1) are not very different in number today to what they were in 1930. Labour force in manufacturing grew four times over, more or less the same that overall population. However, as will be seen, the growth of each of these sectors varies widely in the different strategic periods under study.

Value added to the commodities - goods, and increasingly services - which is estimated by gross domestic product GDP, has grown fourteen times (13.8). That is due, in part, to the fact that labour productivity has almost tripled (2.9). However, the main factor behind GDP growth is simply the expansion in the number of workers producing for the market, which has multiplied almost five times (4.7), as shown.

Again, the behaviour of these factors differs astoundingly in both strategic periods. Growth during developmentalism was intensive in productivity, meanwhile it rested upon the extensive growth of the labour force during the Washington Consensus. In part, this may be explained because of the huge investment in education during the first period (tables 3,4,5: figures 1,2). Also, as will be seen, because the different impact on labour productivity of peasant migration and women participation.

Real average wages multiplied more than four times over (4.3). However, as will be shown, they grew mainly during the developmentalist period, meanwhile their brutal slashing during the dictatorship has not yet been recovered by their recovery after 1990 (tables 8 and 9; figure 4).

In spite of this, the remuneration of the working force as a whole multiplied over 20 times since 1929. This was explained mainly because the rapid increase in wages during developmentalism, and the growth in the number of workers that compensated their stagnation during the Washington consensus.

The decline of wages during the second period was so severe, that the remuneration of the working force as a whole grew less than GDP, in spite of the very fast increase in the number of workers. This is verified even without consideration to the fact that unemployment increased greatly as well during the second period, which makes the result even worse.

However, the improvement of income distribution in favour of labour during developmentalism was so large, that even though it deteriorated considerably during the second period, it is still much better than before the Great Crisis (tables 8 and 9, figure 4).

The dimensions of the State and its social policies increased even more, because overall public expenditures multiplied almost thirty times over (28.7) and social public expenditure over one hundred times (108.9). The largest increases were in education (36.7) and especially in health (110). Public expenditure in pensions practically did not exist in 1929, and although it increased vastly during the following decades, it was financed amply by wage contributions, with rendered a significant surplus until 1981 (Cenda 2006b). However, since that year contributions were diverted entirely to the AFP, and pensions have absorbed around 40% of public expenditures. (INP-Cenda 2005).

Student enrolment increased over six times (6.2), especially in medium level (25 times), and shot up in tertiary level (151 times), meanwhile enrolment in basic education increased the same as overall population (3.8 times). Public expenditure per pupil, in turn, increased over four times in basic education (4.3 times), but less than two times (1.9 times)in medium and remained constant in tertiary level (1.2 times).

However, almost all improvements in education are explained by the extraordinary increase in both enrolment and public expenditure during the developmentalist period. This was followed by a contraction after the coup, which in the case of e¡Public expenditure in education meant slashing it in half. This brutal deterioration has not yet been reversed, in spite of the efforts since 1990 (tables 10 and 11). Possibly, as will be argued, this factor is relevant in the stagnation of labour productivity experienced during the Washington consensus period.

The country modernised and production diversified, quite extraordinarily. Electric power generation increased almost 60 times (59.4), at a fairly constant rhythm. Manufacturing output increased more or less the same as GDP (13.6 times), especially thanks to its fast growth during developmentalism, because it stagnated during the following period. Physical production of copper grew sixteen times over (16.7), and silver more than thirty two (32.4), meanwhile coal fell by half since 1929 (0.5), and nitrate even more (0.4), meanwhile iodine increased more than eleven times (11.7). Wheat production (1.7 times) and barley (1.0) are similar today as in 1929, meanwhile maize has increased over twenty times (20.4) (tables 12 and 13).

Exports grew twenty times (19.9 times), and imports somewhat less (17.8 times). In both cases, this is explained mostly by their fast growth during the Washington consensus. They have diversified constantly, as the proportion of mining exports has lowered from almost 90% in before the Great Depression (86.9%) to less than half today (48.4%). Agriculture represents today (9.3%) almost the same ten percent as they did then (10.3%) of total exports (tables 14 and 15).

Manufactured exports have increased constantly, from less than 4.6% before the great depression to 42.3% today. However, manufactures are still in fact raw materials with a minimum degree of elaboration, as may be seen in the products that top the list of manufactured exports in 2006: salmons and trouts (13% of manufactured exports), white cellulose ( 7%), wine (6%) and methanol (5%) (table 19).

The relative increase of foreign trade in the second period would been expected, because tariffs (6.7% on average) were lowered to less than one third of their previous level (21.7% on average). It comes as a surprise, however, that tariffs averaged almost the same (17.2%) during the so-called “outward development” period that preceded the “import substitution” policy adopted in the wake of the Great Depression.

However, the total volume of exports plus imports as a proportion of GDP is similar today as it was during the so called oligarchic period, before developmentalist. The sum of exports plus imports averaged slightly less than half (44.7%) of GDP during the long period from 1884 to the Great Crisis. After, this proportion is reduced to about one quarter (26.2%) during the developmentalist period, to increase again during the Washington Consensus on the average (38.8%), and recover the levels of a century ago during the most recent economic cycle (43%).

This measurement seems important, because its somewhat reflects the interlacing of the economy with the rest of the world. However, it must be noted that the comparison is between numbers that represent quite different value magnitudes. In effect, meanwhile one of them measures the total value of exports and imports, GDP on the other hand represents only the added value of domestic production, not their total value.

Well measured, the net impact of foreign trade does not depend on the sum, but rather on the difference of exports minus imports, also known as the trade balance [3]. If accounted in this manner, the results are rather surprising to common sense. Measured in this way, the contribution of foreign trade is reduced to a very low proportion of GDP - in fact it becomes negative every time the trade balance is in deficit. Additionally - which seems more interesting for this study - there is a constant decrease in the proportion of foreign trade in GDP as the economy develops along the century.

In this way, net trade represented a significant part of GDP during the oligarchic period (6.1% on the average), which is reduced to a third during developmentalism (2.1 on the average), and much further still during the Washington Consensus (0.3% on the average). Even during the last economic cycle, which has witnessed the largest trade surplus in history, the share of exports minus imports with respect to GDP (3.0% on the average) is half of what it was before the Great Depression (tables 14 and 15).

This decrease reflects the evolution of the relative prices of exports and imports. This rate had been decreasing during the developmentalist period (-0.9% per year on the average), and continued to do so during the Washington Consensus period (-0.6% per year). In this way, the prices of exports fell more that those of imports along the century, but this tendency has imposed itself through constant cyclical fluctuations, as all economic data in general. They improve during the decades before the Great Depression, to fall precipitously during the crisis, and then recover until the beginning of the 1970s. They suffer a new fall during that decade - mostly due to the increased price of oil imports - which continues at a lower pace during the following decades, to finally improve during the last three years, due to the extraordinary recovery of copper and other commodity prices.

Certainly, in the case of Chile, this ratio depends largely on the price of nitrate, at first, and then of copper - that is it depends on the evolution of the ground rent of its main natural resources (tablas 14 and 15).

^[1] Luis Emilio Recabarren (1876-1924), worker organizer and political leader, member of parliament and founder of the Socialist Workers Party (1912), which would later become the Communist Party (1922).

^[2] The Pinochet finance minister and leader of the “Chicago boys,” Sergio de Castro, famously declared “Vamos bien, mañana mejor,” in 1981, just a few days before the catastrophic collapse of the “Chilean miracle” into the worst crisis since 1930. The dictatorship’s spin machinery had to scrap millions of posters and all kinds of propaganda elements with which it had wall-papered the whole country with the unlucky phrase.

[3] Los bienes y servicios importados se incorporan al flujo de mercancías de la economía interna en general, donde son registrados en las cuentas nacionales. Sin embargo, puesto que evidentemente no representan valor producido internamente, se debe descontar todo su valor CIF al momento de calcular el PIB. Con las exportaciones ocurre lo contrario, puesto que las mismas si contienen valor agregado en el país, sin embargo su precio final no aparece registrado internamente, puesto que se realizan en el exterior. Por este motivo, su valor FOB se suma al momento de calcular el PIB. De este modo, el PIB no registra la suma de exportaciones e importaciones, sino su diferencia neta, es decir, la balanza comercial. Por lo demás, como se sabe, el grueso de las últimas consiste en combustibles y otros bienes intermedios, así como maquinarias y equipos, los cuales representan a su vez buena parte del valor de las primeras.

See tables in online annexe

Bibliography

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Cenda, 2006a. Algunos Principios Básicos a Considerar en el Diseño del Nuevo Sistema Previsional Chileno. Presentación de CENDA al Consejo Asesor de Reforma Previsional de la Presidenta Michelle Bachelet, el 4 de Abril de 2006. http://cendachile.cl/Propuesta_CENDA_Reforma_Previsional

Cenda, 2006b. Factibilidad y Necesidad de Restablecer Gradualmente un Pilar Previsional de Reparto para Otorgar Pensiones Definidas a la Clase Media. Anexo a la presentación de CENDA al Consejo Asesor de Reforma Previsional de la Presidenta Michelle Bachelet, el 4 de Abril de 2006. http://cendachile.cl/node/37

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Todos los antecedentes anteriores están disponibles en: www.cendachile.cl/educacion y www.cendachile.cl/reforma_previsional

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Índice General

Índice de Tablas........... 14

Índice de Figuras........... 15

Cuadros Anexos ........... 16

Ver Cuadros Anexos

Index of tables

Tabla 1 : Períodos... 57

Table 2: Población por períodos... 58

Table 3: Población por ciclos económicos y períodos... 60

Tabla 4 : Ciudades por períodos... 61

Table 5: Ciudades por ciclos económicos y períodos... 62

Tabla 6 : Fuerza de Trabajo por períodos... 62

Table 7: Fuerza de Trabajo por ciclos económicos y períodos... 64

Tabla 8 : Producto Interno Bruto (PIB) y Remuneraciones, por períodos... 65

Table 9: Producto Interno Bruto (PIB) y Remuneraciones, por ciclos económicos y períodos... 66

Tabla 10 : Gasto público – Educación, por períodos... 67

Table 11: Gasto público – Educación, por ciclos económicos y períodos... 68

Tabla 12 : Producción, por períodos... 69

Table 13: Producción, por ciclos económicos y períodos... 70

Tabla 14 : Sector Externo, por períodos... 71

Table 15: Sector Externo, por ciclos económicos y períodos... 72

Tabla 16 : Notas a las tablas 1 a 15... 73

Tabla 17 : Población y fuerza de trabajo 2004, Estadísticas INE y AFP - 1... 74

Table 18: Población y fuerza de trabajo 2004, Estadísticas INE y AFP - 2... 75

Tabla 19 : Productos industriales exportados, 2006... 76

Ver Cuadros Anexos

http://cep.cl/Cenda/Cen_Documentos/Pub_MR/Ensayos/Estrategias_Siglo/Estrategias_Siglo_Anexos.pdf

Index of Figures

Figura 1 : La gran migración... 21

Figura 2 : Factores del crecimiento del PIB durante los períodos estratégicos (1929-2006)... 29

Figura 3 : Factores del crecimiento del PIB durante los principales ciclos económicos (1929-2006)... 31

Figure 4 : Pago al factor trabajo, por períodos estratégicos, 1929-2006... 36

Figura 5 : Distribución del crecimiento durante los períodos estratégicos, 1929-2006... 37

Figura 6 : Pago al factor trabajo, por ciclos, 1929-2006... 39

Figura 7 : Distribución del crecimiento por ciclos económicos, 1929-2006... 40

Figura 8 : Huelgas y remuneraciones... 42

Figure 9 : Gasto público, 1929-2006... 44

Figure 10 : Gasto público, por ciclos, 1929-2006... 45

Figure 11 : Educación, 1929-2006... 46

Figure 12 : Educación, por ciclos, 1929-2006... 47

Figure 13 : Gasto educación por alumno, por nivel, 1929-2006... 48

Ver Cuadros Anexos

http://cep.cl/Cenda/Cen_Documentos/Pub_MR/Ensayos/Estrategias_Siglo/Estrategias_Siglo_Anexos.pdf

CHILE: RESULTADOS DE LAS ESTRATEGIAS DEL ESTADO A LO LARGO DE UN SIGLO

Manuel Riesco

Versión: 13-06-08 13:40

Cuadros Anexos [4]

Tabla 1 : Períodos

Fuente: CENDA, en base a UC 2000, "Economía Chilena 1810-1995. Estadísticas Históricas (Lüders y otros)", INE, BC y Riesco (ed), LA A New Developmentalist Welfare State Model in the Making?, 2007, UNRISD-PalgraveMacmillan, London. Memoria de cálculos: Libro_2007.xls, Chile_Paper.xls, bajados de www.cep.cl el 16 Julio 2007. Ver notas en tabla 16.

Table 2: Población por períodos

Fuente: CENDA, en base a UC 2000, "Economía Chilena 1810-1995. Estadísticas Históricas (Lüders y otros)", INE, BC y Riesco (ed), LA A New Developmentalist Welfare State Model in the Making?, 2007, UNRISD-PalgraveMacmillan, London. Memoria de cálculos: Libro_2007.xls, Chile_Paper.xls, bajados de www.cep.cl el 16 Julio 2007. Ver notas en tabla 16.

Table 3: Población por ciclos económicos y períodos

Fuente: CENDA, en base a UC 2000, "Economía Chilena 1810-1995. Estadísticas Históricas (Lüders y otros)", INE, BC y Riesco (ed), LA A New Developmentalist Welfare State Model in the Making?, 2007, UNRISD-PalgraveMacmillan, London. Memoria de cálculos: Libro_2007.xls, Chile_Paper.xls, bajados de www.cep.cl el 16 Julio 2007.

Tabla 4 : Ciudades por períodos

Table 5: Ciudades por ciclos económicos y períodos

Tabla 6 : Fuerza de Trabajo por períodos

Table 7: Fuerza de Trabajo por ciclos económicos y períodos

Tabla 8 : Producto Interno Bruto (PIB) y Remuneraciones, por períodos

Table 9: Producto Interno Bruto (PIB) y Remuneraciones, por ciclos económicos y períodos

Tabla 10 : Gasto público – Educación, por períodos

Table 11: Gasto público – Educación, por ciclos económicos y períodos

Tabla 12 : Producción, por períodos

Table 13: Producción, por ciclos económicos y períodos

Tabla 14 : Sector Externo, por períodos

Table 15: Sector Externo, por ciclos económicos y períodos

Tabla 16 : Notas a las tablas 1 a 15

Tabla 17 : Población y fuerza de trabajo 2004, Estadísticas INE y AFP - 1

Table 18: Población y fuerza de trabajo 2004, Estadísticas INE y AFP - 2

Tabla 19 : Productos industriales exportados, 2006