The Liberal Project: Positivism and the Decay of the Oligarchy

From the 1870s onwards, the liberal project became increasingly articulated. Even though it took place within the context of the restrictions of the Portalian state, it was able to put forward much of its agenda, based on the example liberal modernity and with a strong emphasis on the economic dimension of modernity. Once again, this was not just an ideological triumph, but followed Portales’ logic of paternalism: the Portalian model had proved to provide authority and social order, and now, the possibility existed for more modernisation without jeopardising social order.

Economically, the country gained a strong stimulus after the War of the Pacific (1879-1883), in which Chile gained control over Bolivia’s nitrate industry. The other political elements of the liberal project of modernisation, the separation of the Church and the state and a stronger position of parliament vis-à-vis the executive, would be resolved in the following decade, albeit at a high political and social cost. Ideologically, positivism rapidly gained influence among the intellectual elites, calling for a scientific form of government. The sudden end of the Portalian state in 1891, however, and the subsequent ‘parliamentary period’, thwarted the scientific-authoritarian aspirations of the Positivists. Their influence remained influential, though, in the expansion and modernisation of the system of education and other state institutions. As a result, the embryonic middle class that existed in the late nineteenth century was able to develop as a serious social actor, pressuring the oligarchy for a share in power. At the same time, the oligarchy’s blindness to the social dimension of modernity put the so-called ‘social question’ prominently on the middle-class agenda. However, it was not until 1920 that the oligarchy finally lost its dominance and the middle classes were able to come to power with their own project of modernisation.

Economic Expansion: the Nitrate Era

In this period, Chilean society was strongly oriented towards ‘liberal modernity’, with a strong focus on the economic aspects of modernity. It was a period of laissez-faire policies, in which the state took few or no steps to intervene in the economic arena, even if social unrest was the result.

In the War of the Pacific, Chile had expanded its territory northwards and had gained the regions of Antofagasta, Tarapacá and Arica from Bolivia and Peru. The extensive nitrate fields in these regions, combined with the presence of large amounts of copper, provided Chile with a formidable mining capacity. From the 1880s on, nitrate mining would provide Chile with its main source of income. Its growth was impressive: between 1886 and 1890 the output more than doubled, amounting to 1,000,000 metric tons (Loveman 2001: 154). However, this nitrate bonanza did little to improve Chile’s economy structurally, for several reasons. First of all, the nitrate industry was almost exclusively in the hands of foreign businessmen. These were usually interested in short- term profits only, and did little to develop the region. Although there was some discussion about the possibility of nationalisation of the nitrate industry, economic liberal ideology was usually dominant. For instance, when Minister of the Interior and

leading liberal Lastarria was approached by a Chilean businessman who suggested that the state should take over the nitrate industry, he answered:

This government believes that the state is the worst industrialist, and that fiscal business does nothing but corrupt public administration. In contrast, it believes that handing these riches over to private initiative, to free industry, will realise a public benefit much more effectively (quoted in Pinto 1962: 57).

Secondly, the nitrate producers responded to short-term changes in the demand for nitrate. This led to a highly fluctuating level of production, to cyclical unemployment, and to rapidly changing levels of income for the Chilean state. Third, nitrate exports increasingly became the state’s main source of income. The lack of diversification of revenues made the state extremely vulnerable for fluctuations in the volatile nitrate market. This was made worse by inflation, which became a regular feature of Chile’s economy in this period, and would remain so until the late 20th

century. Finally, the miserable conditions of the workers in the nitrate sector led to the beginning of social conflict, which would only increase in the decades to come (Loveman 2001: 150-155).

The results of the nitrate industry were, however, not all negative. From the mid- 1880s on, an increased state investment in physical modernisation was financed with the revenues of the nitrate exports. In particular President Balmaceda (1886-1890) invested heavily in railways, education, infrastructure and such like. In 1887 he created the Ministry of Public Works, which already consumed a third of the national budget three years later. It invested in railways, bridges and other physical manifestations of modernity. Simultaneously, urban architecture was conspicuous and carefully designed in European styles, usually French. Cities like Santiago had electric lighting as early as 1886, and an electrified tram system in 1900. Outwardly, Santiago never looked better than at the turn of the century. This was, however, contrasted with a notable lack of primary services. Up to the 1920s, for instance, Santiago did not have sufficient drinking water. A sewerage system was not built until 1903, and housing conditions were deplorable (Collier and Sater 1996: 174-175).

The nitrate bonanza also produced institutions which foreshadowed the state- oriented project of industrialisation of the late 1930s. Growing demand for industrial goods such as railways, stimulated by a growing foreign trade, boosted the infant industrial sector. This sector consisted of little more than the ‘screwing together or weaving and dyeing of a semi-finished item’, with or without the use of imported machinery (Kirsch 1977: 17; Muñoz Gomá 1986: 49). In order to encourage development, the National Manufacturer’s Society (Sociedad de Fomento Fabril, SOFOFA) was founded in 1883 to attend to the interests of the sector. It supported technical and industrial education, and the immigration of specialised technicians. It also advocated better housing for workers and legal protection for women and children (SOFOFA 1983: 81-94). Above all, though, it contested the liberal laissez-faire economic views which were popular in political circles. These views had been dominant in academic circles since the French professor Courcelle Seneuil had been invited by the Chilean government to fill a Chair in political economics in 1855. Courcelle Seneuil,

who had advocated Smithsonian and Ricardian theories of free trade and comparative advantage, soon gathered a group of devoted followers, who elaborated on his views after his departure in 1862. According to Encina these followers possessed ‘an invincible tendency to simplify, an absolute absence of observational spirit and a fragile scientific judgement’, and had changed Coucelle’s theories into simple ‘doctrinaire free trade’. According to this doctrine, Encina grumbles, modernisation would simply take place by imitation:

The ambition of the backward countries to pass towards the manufacturing age, which the modern sociologists and economists acknowledge to be a biological necessity, (…) is nothing but the result of a childish form of imitation (Encina 1912: 217-219).

This doctrine did not allow for protection of Chile’s fragile industry as the SOFOFA advocated. Only in 1897 was the SOFOFA successful in its efforts when some measures were taken to protect the industrial sector by imposing taxes on the imports of industrial goods (Collier and Sater 1996: 159). Industry in Chile, although relatively modest in its extent and importance, continued to grow until the outbreak of the First World War, and, subsequently, the end of the nitrate era in the 1920s. However, it never reached a level where it could be seen as an alternative for nitrate. Lack of attention from investors and politicians, who, especially in the first decades of the twentieth century, had a propensity to ‘live off the interest’ rather than to seriously develop the country’s industry, left the sector weak and vulnerable (Pinto 1962: 55; Collier and Sater 1996). The SOFOFA’s call to create a ‘general policy of economic development’ (foreshadowing the policies that were to be implemented in the 1930s), had little effect. According to Francisco Encina, who supported the cause of the SOFOFA, one of the main problems of Chile’s industry was:

the indifference of the public authorities and the enlightened opinions towards the national industries and their marked preference for foreign manufactures, which goes so far that in order to invest in their products, the national industry is forced to disguise them with labels that suggest a foreign origin (Encina 1912: 23).

The attention of Chile’s elites remained focused almost exclusively on the export of agrarian products, until, with the outbreak of the First World War, this sector collapsed. Civil War and the Parliamentary Model

On the political level, the settlement between the pipiolos and pelucones in the 1860s had left two points on the liberal agenda of modernisation unanswered: the influence of the Church and the tension between authoritarianism and liberalism. The first was resolved under the presidency of Santa María (1881-86), who ended a decade of religious conflict between the Church and the liberals in favour of the latter. Under his presidency, Church and state were irreversibly separated, and secular cemeteries, civil marriage and civil registry of births were established. Liberalism’s victory was decisive, and the

conservatives were left as a political minority. The influence of the Church remained significant, but no longer on a formal level (Loveman 2001: 155).

The position of the executive was resolved by means of a civil war in 1891, in which the congressional sections fought the supporters of the President. The liberal victory of the 1880s had not led to a less authoritarian presidency - on the contrary; the executive had only gained in importance. For instance, liberal champion Santa María had duly extended suffrage to all literate men, only to openly intervene in congressional elections if he saw fit. His successor, Balmaceda, equally used his presidential prerogatives to bypass congress (and even his own ministers) in order to defend his programme of national development and modernisation. According to some historians, he equalled Portales (his ideological archenemy) in his attempts to restore the authority of the executive (Góngora 1986: 70-71). By now, however, Chile’s elites were no longer undivided. The Portalian system, in which the oligarchy supported the state’s power in return for social order, started to collapse. It had drawn its legitimacy from the restoration of authority, but only on the condition of its impersonal nature. Balmaceda broke the rule by enforcing a personal project (national development) and by his personalistic style of government. In the words of the presidents of the chambers of congress, Balmaceda had renounced: ‘the legitimate authority in which he had been installed, in order to assume a personal and arbitrary power, which does not have any other origin than his own will’ (quoted in Edwards 1966: 172). The tacit agreement between the executive and the aristocracy was broken, and in 1891 they entered into open, and violent, conflict (ibid., pp. 157, 166-173).

It is through this conflict that politically ‘society started to become really modern, not just discursively modern’ (Jocelyn-Holt 1997: 49). For the first time in Chile’s history,

the forces behind modernity start to reach the level of momentum, independent from the elites instruments that permit them to canalise and restrict it (ibid., italics in the original).

Furthermore, the state got its first opportunity to present itself as a viable alternative to the traditional elites. It could do so because of its new, independent source of income (nitrate), strong investments in the military, and a new, self-conscious style of governance by the executive. This new, independent state, capable of executing a national project of development and expanding its bureaucracy, opened up new opportunities for the middle classes, which were already on the rise (Góngora 1986: 64, 68). However, it seems incorrect to interpret the civil war of 1891 as a class conflict, as some have done. The traditional order was still firmly in place and not in question: ‘it was a civil war, not a social revolution’ (Correa et al. 2001: 19).

The conflict, which ended in a bloody civil war, was followed by a period which is known as the parliamentary period. The forces of the landed elites, represented by the congress, prevailed over the executive and took over control of the political system. The oligarchy now controlled the country without the counter-weight of a strong President, as in the Portalian system. This was ‘parliamentarism’ (Salazar and Pinto), an

‘aristocratic republic’ (Góngora), or a ‘parliamentary oligarchy’ (Edwards). From 1891 until 1920, congress dominated the executive. This did not, however, constitute a process of democratisation, nor did it bring an end to the power of the oligarchy - on the contrary, ‘the aristocratic and oligarchic element of the old Chile reached the golden age of its predominance: for thirty years it dominated without control’ (Edwards 1966: 174). This ‘parliamentary oligarchy’, as Edwards has labelled it, did eventually bring about its own downfall. With the executive out of the way, the policy process became increasingly characterised by party intrigues and bickering, and finally by political inertia:

each time less of the grand rhetorical style; in exchange a more insistent parliamentary choreography: party machinations and an infinity of small agreements and manoeuvres in smoke-filled salons. (…) Each time less the sensation of dealing with a public forum of debate and controversy; in contrast, the feeling now spreads that politics is an exclusive art, mannerist, for the exclusive few invited to the club (Jocelyn-Holt 1997: 51).

Chile’s ‘oligarchic modernity’ slowly eroded from within, leaving a strong sentiment of ‘decadence, and of governmental impotence’ (Góngora 1986: 81). Independent of the prevailing political culture, though, the expansion of the state bureaucracy and its modernisation continued. The state apparatus was reorganised in order to increase efficiency, to centralise services and to enhance its institutionalisation. Areas of political decision-making, like international relations, were moved to bureaucratic institutions, in order to improve efficiency, specialisation and a technical approach (Subercaseaux 1997b: 98).

The nitrate boom deepened social conflict, which stimulated the emancipation of both the middle and lower classes. As a result, the working classes started to organise themselves, while the middle classes pressed for an opening up of the oligarchic political system. In the end, these pressures would provoke the end of ‘oligarchic modernity’ and eventually give way to a new project of modernisation, this time set in motion by the middle classes (de Ramón 2001: 115-181).

As in the rest of Latin America, nineteenth century modernisation brought progress, but not for everyone in Chile. In The Poverty of Progress, E. Bradford Burns shows that the import of European ideas and the integration of the region into international capitalism, combined with the persistence of traditional social relations, generally led to a deterioration of the living conditions of the lower classes (Bradford Burns 1980). In late nineteenth century Chile, this was not different. Living conditions for most Chileans were terrible, and were deteriorating fast. In the countryside, extreme concentration of land in the hands of the landed elites (in 1917, only 0.46 per cent of the farms covered half the available land) had created enormous haciendas, which were usually only partly cultivated. The monopolisation of the land and the stable local market created little incentive to increase production. This created a labour surplus which was forced to seek its fortune elsewhere: the number of minifudios, micro-farms that sought to produce family subsidence, boomed: about 60 per cent of all farms occupied less than 1.5 per cent of the land. Simultaneously, urbanisation rose

dramatically: Santiago’s population tripled between 1865 and 1907, and Valparaiso’s population doubled in this period (Collier and Sater 1996: 171-172). The situation of the urban poor was worse that that of their rural counterparts as disease, poor living conditions, lack of basic services like sewerage and plumbing, and harsh working conditions weakened the cities’ population. Child labour was common, especially in manufacturing. Child mortality accounted for more than half of the recorded deaths in 1913 (Loveman 2001: 174).

The situation of the nitrate workers in the north of the country was even worse. The work was dangerous, and the wages usually consisted of tokens (fiches), which were only valid in company stores (pulperías) that set higher prices than ordinary stores. Furthermore, the volatile character of the nitrate market prompted producers to lay off workers regularly, and this led to periodic waves of unemployment, in which thousands of unemployed workers were forced to seek work in the cities. These horrible conditions inevitably led to protest, and in 1890 government troops were sent out to quell Latin America’s first general strike. This was first manifestation of the social question, which would grow to become Chile’s most pressing national problem. Especially in the first decades of the twentieth century, strikes affected most cities and production centres, and quite a few were suppressed violently, with death tolls rising to several hundred. Meanwhile, socialism spread rapidly among the working class, and labour unions and socialist parties boomed. One of the central figures was Luis Emilio Recabarren, who was involved in the Chilean Workers’ Federation (Federación Obrera de Chile, FOCH) and who founded the Communist Party in 1912. Despite initial resistance from the political elites, Recabarren and other ‘revolutionaries’ were accepted in Congress in the 1910s. Once again, Chile’s oligarchy was able to trade off modernisation (this time at the political level) in return for maintaining power.

The demands for better conditions for the country’s working class were endorsed by the rising middle classes. These had gained in status and influence thanks to the booming nitrate industry, the growing economy and the expanding bureaucracy. They were employed in trade, education, public office and in higher military positions. However, their ascendance was slow and erratic, and they had, according to a contemporary, not yet ‘reached the point of forming an appreciable category’ by 1908 (quoted in Collier and Sater 1996: 173). Nevertheless, their ranks grew, and in the decade of the 1910s a small but self-confident middle sector was clearly discernible. They were appalled by the living conditions of the poor, and equally afraid of their revolutionary potential. Repeatedly, the middle classes pressed the parliamentary oligarchy to address the ‘social question’ seriously. However, Chile’s elites remained aloof and refused to alleviate the position of the working classes, using liberal arguments for free trade and self-realisation. (Silva 1993a: 466)

Progress and Positivism: Lastarria and Letelier

With the triumph of liberalism over conservative thought, the notion of ‘progress’ became a central feature of Chile’s intellectual and cultural life. In the course of time, it was replaced with the word modernisation, which conveyed more or less the same meaning:

[b]oth words (…) implied an admiration for the latest ideas, modes, values, inventions and styles of Europe and the United States and a desire to adopt – rarely to adapt – them (Bradford Burns 1980: 8-9).

This did not mean, however, that there were no theoretical notions to underpin the discourse (and project) of modernisation. Bernardo Subercaseaux (1997b) discerns three