The Chilean Road to Socialism


The Search for National Independence

Chile's search for national independence involves much more than taking control of the nation's natural resources from foreign capital; it is a process of transferring many large private business enterprises, foreign and domestic, into the sphere of social property in order to direct all available resources toward national development. Selections for this chapter therefore include a statement of the economic policies of the Popular Unity government together with a case history, the intervention of Ford Motor Co., to illustrate one means by which socialization of industry is carried out. Also included are a summary of the PU's foreign policy, a poetic statement by Pablo Neruda on the renegotiation of Chile's foreign debt, and a news story on economic aid from the Communist countries.

From the electoral program of the Popular Unity.

The united popular forces seek as the central objective of their policy to replace the present economic structure, putting an end to the power of national and foreign monopolistic capital and of latifundism in order to begin the construction of socialism.

In the new economy, planning will play an extremely important role. The central planning organizations will be at the highest administrative level and their democratically generated decisions will have an executive character.

Area of Social Property

The process of transforming our economy will begin with a policy destined to make up a dominant state area formed by the enterprises that the state presently possesses along with the enterprises that will be expropriated. The first step will be to nationalize those basic sources of wealth such as the large mining companies of copper, iron, nitrate and others which are controlled by foreign capital and internal monopolies. Into this area of nationalized activities will be integrated the following sectors:

1.the large mining companies of copper, nitrate, iodine, iron and coal;

2.the country's financial system, especially private banks and insurance companies;

3.foreign trade;

4.the great distribution enterprises and monopolies;

5.the strategic industrial monopolies; general all those activities which determine the country's economic and social development such as the production and distribution of electrical energy; rail, air and maritime transportation; communications; the production, refining and distribution of petroleum and its derivatives—including bottled gas; iron and steel production; cement, petrochemicals and heavy chemicals; cellulose and paper.

All these expropriations will be carried out with complete respect for the interest of the small shareholder.

Area of Private Property

This area includes all those sectors of industry, mining, agriculture and services in which the private ownership of the means of production remains in effect.

In numbers these enterprises will be the majority. For example, in 1967, of the 30,500 industries (including craft industries), only some 150 controlled the markets monopolistically, monopolizing state aid and bank credit and exploiting the other industrial enterprises of the country by selling raw materials to them at a high price and buying their products at a low price.

The enterprises that make up this sector will be aided by the general planning of the national economy. The state will provide the necessary financial and technical assistance to the enterprises of this area so that they can fulfill the important role they play in the national economy, paying heed to the number of persons who work for them as well as the volume of production they generate.

In addition the systems of patents, customs duties, taxes and tributes will be simplified for these enterprises and they will be assured of an adequate and just commercialization of their products.

In these enterprises the rights of workers and employees to just salaries and working conditions should be guaranteed. The respect of these rights will be guarded by the state and the workers of the respective enterprise.

Mixed Area

This sector is called mixed because it will be made up of enterprises that combine state and private capital.

The loans or credits granted by the development agencies to the enterprises of this area will be made as contributions so that the state will be a partner and not a creditor. The same will be valid for those cases in which these enterprises obtain credits with the endorsement or guarantee of the state or its institutions.

Policy of Economic Development

The state's economic policy will be carried forward through the national system of economic planning and the mechanisms of control, orientations, production credit, technical assistance, tax policy and foreign trade policy as well as through the state's administration of the economy. Its objectives will be:

1. To resolve the immediate problems of the great majority. For this the country's productive capacity will be turned from superfluous and expensive articles that satisfy the high income groups toward the production of articles of popular use that are cheap and of good quality.

2. To guarantee employment with adequate remuneration to all Chileans of working age. This means designing a policy that will generate employment by planning the adequate use of the country's resources and by adapting the correct technology to demands of national development.

3. To liberate Chile from her subordination to foreign capital. This means the expropriation of imperialistic capital, the realization of a policy of ever-increasing self-financing of our activities, the fixing of conditions on which foreign capital will operate in this country if it is not to be expropriated, the achievement of greater independence in technology, in foreign transport and others.

4. To assure rapid and decentralized economic growth which tends to develop our productive forces to the maximum and to produce the optimal utilization of human, natural, financial and technical resources available for the purpose of increasing work productivity and satisfying both the demands of the independent development of the economy as well as the necessities and aspirations of the working population that are compatible with a dignified human life.

5. To execute a foreign trade policy that tends to develop and diversify our exports to open new markets, to achieve a growing technical and financial independence and to avoid the scandalous devaluations of our currency.

6. To take all measures that will lead to monetary stability. The fight against inflation will be decided essentially on the stated structural changes. Monetary policy should also include measures that adapt the flow of circulating money to the real necessities of the market, that control and redistribute credit and avoid usury in the money business. There should be measures to rationalize distribution and commerce, stabilize prices, and to prevent the structure of demand that comes from high incomes to drive up prices.

The guarantee of the fulfillment of these objectives lies in the control by the organized people of political and economic power that is expressed in the state area of the economy and in the economy's general planning. It is this popular power that assures the fulfillment of the outlined tasks.

From the government newspaper La Nación, May 28, 1971.

Having exhausted all possibilities of conversations with executives of Ford Motor, the government proceeded to requisition the installations that this company has in the country. These are the plant at Casablanca and the administrative offices and warehouses in Santiago. Jorge Fabra, Secretary of the Automotive Commission of the Development Corporation, acted as representative and was named legal intervenor. . . .

"Today we have won a decisive battle of great importance. Here we have a demonstration that the popular government is a government of the workers and for the workers," said the president of the union of Ford employees when the requisition was known. The workers, in publicizing their feelings about the requisition, sang the national anthem in the presence of the Under-Secretary of Economy, Oscar Garretón, and other parliamentary representatives. The battle of the Ford workers ended after several days of struggle. The industry, disregarding Chilean legislation, had decided to terminate its activities in Chile and proceeded to dismiss the 604 workers at the plant.

In view of this completely illegal attitude, the workers proceeded to take over the Casablanca plant and demanded payment of their legal benefits. The Ministry of Economy immediately started talks with the executives of Ford regarding this matter.

"Ford is well aware of the efforts made by the government to solve the problems that the paralyzation of the industry has caused," said Garretón. The Under-Secretary indicated that various meetings had been held with Ford executives, including Vice-President Robert Stevens and Vice-President for Latin America and the Orient Edward Molina.

All these meetings had no result. The government logically asked as a first measure that the 604 dismissed workers be reinstated in their jobs. Ford did not accept. Until 8:00 p.m. on Wednesday, May 26, the Under-Secretary of Economy held telephone conversations with Ford's executives in Buenos Aires. Not receiving favorable replies, the Minister of Industries proceeded to sign the resolution requisitioning the Casablanca plant and other Ford installations in Chile. Garretón immediately contacted the U.S. ambassador, Edward Korry, and notified him of the government's decision. "The measure we have taken is not against the United States, but affects a private firm that has violated Chilean law," Garretón said. After his meeting with Korry, Garretón traveled to Casablanca to communicate the decision to the workers, who were in assembly with congressmen. "This measure in no way puts an end to conversations with Ford executives. We are prepared to continue our talks about the situation," he said.

The requisition signifies that the government now has legal use of the installations and offices that belonged to Ford in Chile. Garretón stated that while negotiations were in progress, the government would be responsible for paying the workers. The funds for this commitment would come from the sale of spare parts presently held by the industry.

The thirty-two Ford distributors throughout the country have indicated their wish to participate in the process of production at the plant and have guaranteed the availability of Ford spare parts.

From the electoral program of the Popular Unity.

The international policy of the popular government will be directed toward affirming the complete political and economic autonomy of Chile.

There will be diplomatic relations with all the countries of the world irrespective of their ideological and political position on the basis of respect for self-determination and the interests of the people of Chile.

Ties of friendship and solidarity with independent or colonized people will be established, especially with those who are developing their struggles of liberation and independence.

A strong Latin American and anti-imperialist sense will be promoted through an international policy of peoples rather than chancellories.

The decided defense of self-determination of peoples will be stimulated by the new government as a basic condition of international life. As a consequence its policy will be vigilant and active in defending the principle of non-intervention in rejecting every attempt at discrimination, pressure, invasion, or blockade on the part of imperialist countries.

Diplomatic relations, interchange, and friendship with the socialist countries will be reinforced. [1]

More National Independence

The position of active defense of Chilean independence implies denouncing the present OAS as an instrument and agency of North American imperialism and struggling against all forms of Pan-Americanism implicit in this organization. The popular government will opt for the creation of an organism that is truly representative of Latin American countries.

It is considered indispensable to revise, denounce, or forget about, according to individual cases, the treaties or agreements that limit our sovereignty, specifically the treaties of reciprocal assistance, the mutual-assistance pacts, and other pacts that Chile has signed with the United States.

Foreign aid and loans conditioned on political agreements or which imply the imposition of realizing investments which derive from these loans on conditions that made our national sovereignty vulnerable and which are against the interests of the people will be rejected and denounced by the government. At the same time, all types of foreign impositions with respect to Latin American raw materials such as copper and with respect to the obstacles placed on free trade that have long been translated into the impossibility of establishing commercial relations with all the countries of the world, will be rejected.

International Solidarity

The struggles that people are unleashing for their liberation and for the construction of socialism will receive the effective and militant solidarity of the popular government.

Every type of colonialism or neocolonialism will be condemned and the right to rebellion of the people subjected to these systems will be recognized. The same treatment will be reserved for every type of economic, political, and/or military aggression provoked by the imperialist powers. Chilean international policy should maintain a position of condemnation of the North American aggression in Vietnam and recognition and active solidarity with the heroic struggle of the Vietnamese people.

In the same way, the policy will solidify itself effectively with the Cuban revolution and with the advances of revolution and the construction of socialism on the Latin American continent.

The anti-imperialistic struggle of the peoples of the Middle East will also receive the solidarity of the popular government, which will support the search for a specific solution that is based on the interests of the Arab and Jewish peoples.

All reactionary regimes that promote or practice racial segregation and anti-Semitism will be condemned.

Latin American Policy

The popular government will defend an international policy of affirmation of the Latin American personality on the world scene.

Latin American economic integration should be constructed on the basis of economies that have liberated themselves from all imperialistic forms of dependence and exploitation. Nevertheless, an active policy of bilateral agreements on those materials that are of interest to Chilean development will be maintained.

The popular government will act to resolve pending frontier problems through negotiations that prevent the intrigues of imperialism and the reactionaries and will keep present the interest of Chile and of the peoples in the neighboring countries.

Chilean international policy and its diplomatic expression should break all forms of bureaucracy and immobility. It should get along with peoples with the double purpose of learning from their struggles the lessons to aid in the construction of our socialism and to offer them our own experiences in such a way that in practice the international solidarity we defend is constructed.

Address by Pablo Neruda, Chile's ambassador to France and winner of a 1971 Nobel prize for his poetry,
before the fiftieth-anniversary celebration of the American Center of P.E.N., April 10, 1972.

In the course of my roving life, I have attended quite a number of strange meetings. Only a few days ago, however, I was present at what seems to me to be the most mysterious of all the meetings in which I have ever taken part. I was seated there with a handful of my fellow countrymen. In front of us, in what looked like a vast circle to my eyes, sat the representatives of banks and treasuries and high finance, the delegates of numerous countries to which—so it would seem—my country owes a very great deal of money. We, the Chileans, were few in numbers, and our eminent creditors—almost entirely from the major countries—were very many: perhaps fifty or sixty of them. The business in hand was the renegotiation of our Public Debt, of our External Debt, built up in the course of half a century by former governments.

In this same half century, men have reached the moon complete with penicillin and with television. In the field of warfare, napalm has been invented to render democratic by means of its purifying fire the ashes of a number of the inhabitants of our planet. During these same fifty years, this American Center of the P.E.N. Club has worked nobly for the cause of reason and understanding. But, as I could see at that relentless meeting, Chile was nonetheless under the menace of an updated version of the garrote, namely the Stand-By. In spite of half a century of intellectual understanding, the relations between rich and poor—between nations which lend some crumbs of comfort and others which go hungry—continue to be a complex mixture of anguish and pride, injustice, and the right to live. . . .

For my part, I, who am now nearing seventy, discovered Walt Whitman when I was just fifteen, and I hold him to be my greatest creditor. I stand before you, feeling that I bear with me always this great and wonderful debt which has helped me to exist.

To "renegotiate" this debt, I must start by recognizing its existence, and acknowledging myself to be the humble servant of a poet who strode the earth with long, slow paces, pausing everywhere to love, to examine, to learn, to teach, and to admire. The fact of the matter is that this great man, this lyric moralist, chose a hard path for himself: he was both a torrential and a didactic singer —qualities which appear opposed, seemingly also more appropriate to a leader than to a writer. But what really counts is that Walt Whitman was not afraid to teach— which means to learn at the hands of life and undertake the responsibility of passing on the lesson! To speak frankly: he had no fear of either moralizing or immoraliz-ing, nor did he seek to separate the fields of pure and impure poetry. He was the first totalitarian poet: his intention was not just to sing, but to impose on others his own total and wide-ranging vision of the relationships of men and nations. In this sense, his patent nationalism forms part of a total and organic universal vision: he held himself to be the debtor of happiness and sorrow alike, and also of both the advanced cultures and more primitive societies.

There are many kinds of greatness, but let me say (though I be a poet of the Spanish tongue) that Walt Whitman has taught me more than Spain's Cervantes: in Walt Whitman's work one never finds the ignorant being humbled, nor is the human condition ever found offended.

We continue to live in a Whitmanesque age, seeing how new men and new societies rise and grow despite their birth pangs. The Bard complained of the all-powerful influence of Europe, from which the literature of his age continued to draw sustenance. In truth he, Walt Whitman, was the protagonist of a truly geographical personality: the first man in history to speak with a truly continental American voice, to bear a truly American name. The colonies of the most brilliant countries have left a legacy of centuries of silence: colonialism seems to slay fertility and stultify the power of creation. One has only to look at the Spanish empire, where I can assure you that three centuries of Spanish dominion produced not more than two or three writers worthy of praise in all America.

The proliferation of our republics gave birth to more than merely flags and nationalities, universities, small heroic armies, or melancholy love songs. Books started to proliferate as well, yet they too often formed an impenetrable thicket, bearing many a flower but little fruit. With time, however, and especially in our own days, the Spanish language has at last started to shine out in the works of American writers who—from Rio Grande to Patagonia—have filled a whole dark continent (struggling toward a new independence) with magical stories, and with poems now tender, now desperate.

In this age, we see how other new nations, other new literatures and new flags, are coming into being with what one hopes is the total extinction of colonialism in Africa and Asia. Almost overnight, the capitals of the world are seen studded with the banners of peoples we had never heard of, seeking self-expression with the unpolished and pain-laden voice of birth. Black writers of both Africa and America begin to give us the true pulse of the luckless races which had hitherto been silent. Political battles have always been inseparable from poetry. Man's liberation may often require bloodshed, but it always requires song—and the song of marikind grows richer day by day, in this age of sufferings and liberation.

I ask your pardon, humbly, in advance, for going back to the subject of my country's troubles. As all the world knows, Chile is in the course of carrying out a revolutionary transformation of its social structure with true dignity, and within the strict framework of our legal constitution. This is something which annoys and offends many people! Why on earth, they ask, don't these pesky Chileans imprison anyone, close down newspapers, or shoot any citizen who contradicts them?

As a nation, we chose our path for ourselves, and for that very reason we are resolved to pursue it to the end. But secret opponents use every kind of weapon to turn our destiny aside. As cannon seem to have gone out of fashion in this kind of war, they use a whole arsenal of arms both old and new. Dollars and darts, telephone and telegraph services: each seems to serve! It looks as though anything at all will do, when it comes to defending ancient and unreasonable privileges. That is why, when I was sitting in that meeting in which Chile's External Debt was being renegotiated in Paris, I could not help thinking of The Ancient Mariner.

Samuel Taylor Coleridge drew upon an episode which took place in the extreme South of my country for the basis of his desolate poem.

In Chile's cold seas we have every kind and species of albatross: wandering, gigantic, gray, and stormy, and supremely splendid in its flight!

That is, perhaps, the reason why my country has the shape of a great albatross with wings outspread!

And in that unforgettable meeting, in which we were striving to renegotiate our External Debt in a just fashion, many of those who appeared so implacable seemed to be taking aim in order to bring Chile tumbling down, so that the albatross should fly no more!

To mention this may be the indiscretion of a poet who has only been an ambassador for a year, but it looked to me as though it was perhaps the representative of United States finance who concealed an arrow underneath his business papers—ready to aim it at the albatross's heart! Nevertheless, this financier has a pleasant name (one which would sound well at a banquet's end): he is called Mr. Hennessy.

And if he would take the trouble to reread the poets of former times, he might learn from The Ancient Mariner that the sailor who perpetrated such a crime was doomed to carry the heavy corpse of the slain albatross hanging from his neck—to all eternity.

From the Communist newspaper El Siglo, August 7, 1971.

The Chilean technical mission returned from its two-and-a-half-month tour of eight European socialist countries with what may well be the most important key to our technological and economic independence: free advanced technology.

Hugo Cubillos, who presided over the technical mission that established contracts with the European socialist governments, announced the good news yesterday. The mission succeeded in finding support for 90 per cent of the projects that had been elaborated by the popular government's National Development Plan.

Not only did the Chilean mission obtain almost free technological aid from the socialist countries, but it also received $135 million in loans to contribute to the $300 million necessary for the financing of the projects that were agreed upon during the tours.

Hugo Cubillos pointed out the extraordinary interest in the popular government that he found in these countries. He remarked that the technical mission had been everywhere received with the greatest of cordiality. Cubillos remarked, "The socialist countries were especially interested in hearing about our first months in office. They showed their support for the popular government and they approved of every measure that has been taken in our road to socialism."

The director of the mission reviewed the diverse agreements that had been reached in each of the countries visited.

The Soviet Union agreed to establish a lubricating-oil plant and a plant for the making of sulfuric acid, and to prepare a project for an industry of prefabricated housing components. A vaccine production plant will also be created to serve the agricultural sector.

The Czechoslovakian Government has agreed to collaborate in planning a heavy-machinery plant, as well as a plant for machinery and tools. A plant for the fabrication of nitrate fertilizer will also be erected.

The Polish Government will participate in the extension of ASMAR (naval dockyards and shipbuilding), which will permit the construction of 30,000-ton vessels. Projects for the treatment of gold minerals as well as for a partnership in the construction of copper and copper-alloy products were agreed to.

The Yugoslavs have agreed to join the government in an engineering design that will produce industrial projects. Also planned are plants for copper reactors, prefabricated panels manufactured in Punta Arenas and in Magallanes, a meat-packing and -processing industry, and a commercial plant for the drying of meat and agricultural products.

The Hungarians have agreed to contribute to the installation of a factory for railroad-engine frames and railway cars. They will also help in the creation of a pharmaceutical industry. The Hungarians have agreed to build an aluminum production plant coupled with a hydroelectric plant that will cost fifty million dollars. Furthermore, a plant for the processing of fruits and production of fruit jams and preserves will be created.

The Romanians have agreed to provide their technology almost free for the building of a national chemical plant and have opened their markets for the commercial sales of the products.

Bulgaria will help in the construction of a plant for mining machinery and spare parts. They will also help in the construction of a plant to treat copper residues to obtain electrolytic copper. The Bulgarians will also contribute to the planning and construction of an onion-dehydration plant so as to help us meet the demand for this product.

The East German Government will contribute to copper raining, agriculture, and the food industry. They will also contribute their geological and scientific expertise for the treatment and commercialization of production in the salt plains of Atacama. To top this, plans are in the making for a mixed industry which will manufacture finished copper products to supply the East European COMECON.

The Chilean technicians pointed to the fact that previous government missions did not seek technology abroad but merely equipment. "Chile wants its economic and technological independence. To achieve this, the experts will transmit to us their experience and it will remain in Chile. We did not go out to acquire complete plants but rather these will be built here so as to incorporate socialist technology that stays here." The technicians added that this will avoid the payment of royalties and other problems that are created with Western countries.


1. Chile re-established diplomatic relations with Cuba on November 12, 1970, and with Communist China on January 5. On February 26, the government announced it would sell copper directly to Communist China.

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