On the Origins of the ‘(Neo)liberal Project’ in Chile: Entrepreneurs in the 1950s

Abstract

From the late 1940s, Chile entered a deepening crisis, with increasing inflation and social unrest, which manifested itself in illegal strikes and greater distrust of ‘traditional’ parties. The outcome was the election of a retired general turned populist, Carlos Ibáñez, as president in 1952. He promised populist measures that threatened the private sector, for example, the enhancement of the state’s economic role and reform of labour legislation. From this point the industrialists’ organisation, SOFOFA, began to reform its structures and ideas, laying the ground for the Pinochet regime’s adoption of neoliberal/monetarist policies after 1975. Key to this were two business leaders, Domingo Arteaga and Eugenio Heiremans, who presided over SOFOFA for 12 of the 14 years between 1955 and 1969. Arteaga forged close links with the Universidad Católica, whose Economics department had signed a cooperation agreement with the University of Chicago. Heiremans reorganised SOFOFA and pushed for a more strident policy of defending industrialists’ interests vis-à-vis government. The immediate outcome was the election of Jorge Alessandri, former president of the CPC, the peak business association, to the presidency of the country in 1958. The longer-term outcome was the growth of gremialismo and a more coherent ideology of economic liberalisation.