Chile privatized even profitable state firms beyond crisis-nationalized ones, deepening foreign capital ties

Evidence

When economic indicators finally showed signs of recovery in 1985, a new round of privatizations were imposed. The privatization process included firms that were nationalized during the crisis and some of the strategic sectors that had been still excluded in the 1970s. State enterprises in the steel, sugar, and chemical industries, in aviation, energy, and telecommunications, as well as some copper mines, were turned over to the private sector. Everything was sold except for the remaining state copper firm and the state petroleum company. Most of the enterprises had been highly efficient and had so far generated surpluses for the state. Although small investors and employees were invited to purchase shares of the newly privatized enterprises—the regime promoted a propaganda discourse of “popular capitalism”—the process of concentration and centralization of capital resumed. The participation of foreign capital was mostly organized through joint ventures. Debt-for-equity swaps were so popular that, by 1988, nearly $2 billion of hard currency had entered the economy, leading to an intricate intertwining of foreign investors and domestic capitalists through the joint purchase of privatized firms. — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1604

Categorization

• XREF: ‘Popular capitalism’ propaganda echoes Thatcher’s privatization discourse in Britain — a comparative angle worth noting. — connects to: Chile abolished import substitution and embraced export-led liberalization in the mid-1970s — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1578; Chilean privatization concentrated wealth in conglomerates while state kept strategic sectors — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1633; Chilean governments preserved Pinochet’s austerity model after the dictatorship fell — Clara E. Mattei, The Capital Order: How Economists…, 1739

Broader Connections

• Chilean privatization concentrated wealth in conglomerates while state kept strategic sectors #qualifies (0.78) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1633
• Chilean governments preserved Pinochet’s austerity model after the dictatorship fell #expands (0.72) — Clara E. Mattei, The Capital Order, 1739