Bellisario - Chilean PreAgrarian Peirod

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The Chilean Agrarian Transformation 167

2006 The Author. Journal compilation 2006 Blackwell Publishing Ltd, Henry Bernstein and Terence J. Byres. Journal of Agrarian Change, Vol. 6 No. 2, April 2006, pp. 167204.

Journal of Agrarian Change, Vol. 4 No. 1 and 2, January and April 2004, pp. 0000. Journal of Agrarian Change, Vol. 6 No. 2, April 2006, pp. 167204.

2006 The Author. Journal compilation 2006 Blackwell Publishing Ltd, Henry Bernstein and Terence J. Byres.

The Chilean Agrarian Transformation: ThePre-Agrarian Reform Period (19551965)

ANTONIO BELLISARIO

Today Chilean agriculture has recovered from years of diminishing returns.The same arduous work carried out by a declining workforce has suddenlyattained higher productivity and, therefore, achieved economic growth. Thisarticle suggests that Chile has undergone a series of fundamental changes inthe last quarter of the twentieth century, which have intensied its capitalist

development. It analyses the agrarian structure of the hacienda system duringthe period immediately before the agrarian reform, looking particularly at the transition to modern capitalism, agricultural growth and the land question. It argues that before the implementation of the agrarian reform, the country had not nished its transition to modern capitalism due to the persistence of the antiquated hacienda system. It further suggests that the land reform process implemented and consolidated from 1964 to 1980 permitted the culminationof the long-postponed transition to modern capitalism and gave rise to the ascendancy of an agro-industrial bourgeoisie and an export-oriented agriculture integrated into the world economy.

Keywords: Chile, hacienda system, agrarian change, agriculturaldevelopment, transition from old agrarian society to modern capitalism

INTRODUCTIONChiles decline in both its agricultural workforce and rural population is similarto the rest of Latin America.1 But its share of agricultural exports has continuedto grow since the mid-1980s instead of falling as in the rest of the region.2

Antonio Bellisario, Department of Geography, University of Concepcin, Casilla 160 C,Concepcin, Chile. e-mail: [email protected] paper draws upon a substantially revised chapter of a PhD dissertation (Bellisario 2002). A

revised Spanish translation of this dissertation will be published in 2006 by Lom Ediciones (Santiago,Chile). I would like to thank the journals two referees. I am grateful to Terry Byres and Cris Kayfor their detailed critical comments on this essay. I am especially grateful to Bill Hayes for hisinvaluable help. The remaining errors, of fact and interpretation, are solely mine.1 In 1960, 47 per cent of Latin Americas labour force worked in agriculture; at the end of the 1990s,31 per cent remained employed in the agricultural sector. The percentage of Latin Americas ruralpopulation in 1960 was more than 50 per cent; today it has declined to less than 25 per cent.2 Latin Americas agricultural products accounted for more than 40 per cent of the total value of exports in the late 1960s; they declined to 24 per cent in 1990. Meanwhile in Chile the oppositehappened as the total value of agricultural exports increased from 3 per cent in the late 1960s to over20 per cent in 1990.


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168 Antonio Bellisario


Between 1960 and 2002, the percentage of those employed in agriculture fellfrom 30 per cent to 13 per cent, while during the same period, its rural popula-tion declined from 40 per cent to less than 13 per cent. During the 1950s and1960s, the value of Chiles total agricultural imports surpassed its agricultural

exports by at least two fold. Today, agricultural exports and semi-industrializedforestry products (such as cellulose, paper, wood and wood-chips) contributemore than 20 per cent of the total value of Chiles exports, far exceeding agricul-tural imports. This agricultural dynamism has helped fuel the recent growth of the Chilean economy.3 Chilean agriculture in recent years, somehow, has passedthe point of diminishing returns. The same arduous work carried out by adeclining workforce has suddenly attained higher productivity and, therefore,economic growth (Gmez and Echeique 1988; Murray 1999).

It has been argued that societies can change by different processes such asrebellions, political revolutions, socioeconomic transformations and social revo-

lutions. Social revolutions are rare but momentous occurrences in modern worldhistory; they are rapid, basic transformations of a societys state and classstructures; and they are accompanied and in part carried through by class-basedrevolts from below (Skocpol 1979, 34). Thus, social revolutions are primarilydened by structural changes led by class struggle. We might say that right up tothe early 1960s, Chilean society had been gradually passing from the old tradi-tional agrarian regime to capitalist modernity. And during the period of intensi-ed social class struggle and political turbulence of the late 1960s to early 1980s,Chile experienced an epochal change, which has resulted in the intensication of capitalist development ( Jocelyn-Holt Letelier 1998; Kay 2002; Lavn 1987; Moulian

1997; Riesco 1989, 1999). Indeed, since the 1960s, Chiles salaried workforce hasmore than doubled, while its GDP has more than tripled. The economicallyactive population almost tripled in the last four decades. In 1960, the economicallyactive population amounted to 2.3 million. In 2004, it had increased to 6.3million. During the same period, the total population just doubled from 7.5million to 15.5 million. This means that a larger share of the Chilean population hasbeen participating in the economic process and has become dependent upon wages.

At least three broad and highly contradictory stages mark this period of epochal change: rst, the bourgeois populist and reformist government of theChristian Democrat Frei (196470) sets the prelude to the revolution; second,

the socialist government of the Popular Unity (Allende 197073) highlightsthe socialist revolution proper; and third, the military dictatorship govern-ment of Pinochet (197389) inaugurated the neoliberal capitalist phase in thistransformation.

3 Since 1985 the annual growth rate of the Chilean economy has averaged 6 per cent. But after theAsian economic crisis of 1998, annual growth rates have decreased to about 3 per cent. Alas, thisgrowth of exports is mainly raw agricultural products with little industrialized added value. Meanwhile,agrarian policies have not solved the problems of poverty and inequality; instead, as some haveargued, since the 1990s, these have increased (Murray 2002). Thus the Chilean economy continues tobe immersed in the Latin American political economy pattern of over-exploiting its natural resourcesfor external markets.


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It is important to note that right up to the 1960s, Chilean society had notyet nished its transition to capitalist modernity, and during the Chilean ageof revolution (late 1960s to the early 1980s), and particularly during the socialistgovernment of Allende (197073), the country experienced a social revolution

that totally transformed its political and social-economic structure. Like manyother Latin American revolutionary movements of the twentieth century, theChilean revolutionaries (urban workers, peasants, intellectuals, students andmembers of leftist political parties, socialist and communist) sought to overcomecapitalism in order to construct socialism. But from todays perspective, it seemsthat they achieved the very critical revolutionary changes needed to overcomethe ancient agrarian regime. Then, the social class struggle waged by the Chileanrevolutionaries during the age of revolution, perhaps inadvertently, and certainlycontrary to their anti-capitalist intentions, nally opened the oodgates to capitalistmodernity, instead of to socialism. Thus, the unintended consequence of this

contradictory process was the nal transition to modern capitalism (Riesco 1995).But this phenomenon is not in and of itself something new. The classical transi-tions to capitalist modernity of France and England were also precipitated byepochal and momentous revolutions carried out by progressive movements.

Having said all this, it is important to mention that the transition to capitalistmodernity is not yet fully complete; 800,000 Chileans (5 per cent of the totalpopulation and 12.7 per cent of the working population) still live off the land.But the expulsion of the peasants from the land and their transformation intomodern wageworkers is proceeding rapidly; the agricultural workforce has beendecreasing steadily since 1990 (see Table 1).

Table 1.Evolution of agricultural workforce

Category 1990 1995 2000 2004

Total national workforce 4,728,500 5,273,900 5,870,900 6,357,600Agricultural workforce 882,500 809,700 773,500 809,800Per cent 18.7 15.4 13.2 12.7

Source : ODEPA (2005).

The development of competitive market-oriented agriculture is a gradualprocess. It needs a resolution in three interrelated areas. First, a proletarian work-force must be developed along with producers seeking to maximize their surplusextraction via increments in labour productivity. In short, the agrarian transitionto capitalism must be completed. Second, the transition to capitalism must bereinforced by the resolution of the land question. A spatial organization must bedeveloped that is attuned with capitalist social property relations and augmentedforces of production. This spatial ordering permits the rational allocation of land to capital. And last, the development of industrial agriculture needs theresolution of the agrarian question. There must be a growth of surplus for capital


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accumulation and investment and to full the needs for primary products of agrowing urban society.

The transition to agrarian capitalism in Chile nally ended sometime duringthe 1960s and 1970s. Today capitalism is rmly rooted in the country as a whole.

The resolutions of the land and the agrarian questions have also been secured. Tofully understand Chiles agrarian transition to capitalism, it is important to studythe transformation of thehacienda system during the early 1960s, to determinewhat the crucial changes were and when they took place. This is all the moredecisive, because, in the early 1960s, most of the productive land, labour forceand capital in the Chilean countryside still operated under thehacienda system(Kay 1982).

Much research has been done to show how thehacienda system evolved withthe increasing commercialization of agriculture. The most important analysesof the evolution of the Chileanhacienda system have argued that by the early

1960s, thehacienda system had basically completed its transformation to moderncapitalism, while the agrarian question remained (Kay 1971, 1974, 1977, 1982;Schejtman 1971, n.d.). These authors note that this transformation occurredmainly through the proletarianization of the labour-rent tenants, theinquilinos.To sustain his thesis Kay points to: (1) the increase of payments in cash andthe decrease in perquisites to the internalhacienda peasants, (2) the decline of the absolute and relative number ofinquilinoswithin the total workforce and(3) the decline of land leased toinquilinos (1977, 11415). Schejtman notes thatfrom the 1850s to 1965 capitalism slowly transformed the social relations of thehacienda system (n.d., 39). And he also notes that by 1965 (the beginning of the

agrarian reform) the transformation of thehacienda into a capitalist enterprise wasthe dominant tendency within this system. He goes on to say that the internaleconomy of inquilinos (their tenancy rights in the landlords estate) had mostlydisintegrated, and their proletarianization was rapidly advancing through cashpayments for their labour. But he concedes that this process had not reached yetthe largest majority of thehaciendas (n.d., 7).

I disagree with this line of analysis. It is my contention that to understand theChilean transformation we need to widen the theoretical scope by adding a newontological window of analysis, which has been neglected by these prevailingviews: namely, the spatial relations of agrarian structure. And we must, then,

introduce the hypothesis that up to the early 1960s, thehacienda system had notnished its transition to modern capitalism. I advance this thesis based on twopremises. First, in my perspective, the permanence of servile and pre-capitalistsocial property relations continued to be an important component in thehaciendasystem. Thus, the full commoditization of internalhacienda peasants had notbeen accomplished. And second, and perhaps equally important, the spatial struc-ture of most of the Chilean countryside was still pre-capitalist, rooted in the oldregime of thelatifundiasystem; that is, the landowners monopoly of the major-ity of the best agricultural land continued to provide them with the sourceof their economic and political power. In my perspective, and contrary to theview advanced by Kay and Schejtman, the resolution of the land question by the


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agrarian reform, between 1964 and the late 1970s, was the crucial process thatprecipitated the culmination of thehaciendas transition to agrarian capitalism andpermitted the resolution of the agrarian question; while for Kay and Schejtmanthis process did not play a signicant role in transforming thehacienda system

because, in their line of analysis, the transition had been basically accomplishedbefore the implementation of the agrarian reform.It is my thesis that the agrarian reform crucially affected all three interrelated

areas needed for competitive market-oriented agriculture: (1) the transition tocapitalism, (2) the land question and (3) the agrarian question.

On the transition to capitalism, I argue, the agrarian reform process whollyreshaped Chiles rural class structure. It not only promoted the full commoditiza-tion of rural labour by transforming thehaciendas internal peasants either intowage labour (by compulsory expulsion from the land) or into agricultural pro-ducers (by granting them a parcel of productive land); but perhaps most important,

it encouraged the development of a modern capitalist agricultural class by trig-gering the development of medium-sized farms. These interwoven changes per-mitted the culmination of thehaciendas transition to agrarian capitalism. In Bauerswords the agrarian reform process meant the imposition of the long delayedagrarian capitalist revolution and the proletarianization without ceremony of therural labour force (1994, 276). Furthermore, the concomitance of the agrarianreform with one of the most revolutionary periods in contemporary Chileanhistory helped to rmly establish capitalism in the country as a whole.

On the land question, the agrarian reform completely restructured the spatialorganization of thehacienda system. It ended the landowners virtual monopoly

on the land that prevented an open land market and discouraged competition.This statist and spatial intervention resolved the land question by expropriatingthe totality of inefcientlatifundia, which irredeemably destroyed the power baseof the pre-capitalist landed class. In turn, the new spatial organization of theChilean countryside developed, indirectly and directly, by the agrarian reform,stimulated the development of capitalism. Indeed, this process created 65,000new land units out of the 5800 expropriated estates. These new farms were thebase for the development of the land market that sustained the emergence of newagricultural capitalist groups (Echeique 1996).

On the agrarian question, these interrelated changes, namely a new class and

spatial organization in the countryside, in conjunction with neoliberal economicpolicies, helped to foster the augmentation of the forces of production and toimprove agricultural productivity, although rural poverty and the continuedproletarianization of small peasant farmers have remained as the major problemsin the countryside (Kay 2002).

In summary, this article analyses the agrarian structure of the Chileanhaciendasystem in the early 1960s, the period immediately before the implementationof the agrarian reform. It looks at the transition to agrarian capitalism (socialproperty relations), the land question (the agrarian spatial relations of productionand property) and agricultural development, or the agrarian question (that is,agricultures ability to successfully achieve its food-supplying function and to


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produce surpluses). It argues that the country before the implementation of theagrarian reform had not nished its transition to modern capitalism due to thepersistence of thehacienda system. This agrarian structure hindered the develop-ment of capitalism by its landowners monopoly on the best lands suitable for

agriculture and by the reliance of this class on non-capitalist forms of labourcontrol and surplus extraction. It further argues that an open land market had notdeveloped because landowners controlled the largest share of the best agricul-tural lands. In turn, the pre-capitalist social relations and landowners monopolyof the land postponed the agrarian transition. I further suggest that the agrarianreform directly resolved the land question through an open land market and thatit was only with that agrarian reform that this resolution was secured. In turn,this state-directed spatial intervention wholly changed the social and spatial rela-tions in the Chilean countryside and permitted the culmination of the long-postponed transition to agrarian capitalism, triggering the development of an

export-oriented agriculture integrated into the world economy. In sum, the agrar-ian reform triggered the nal transition to modern capitalism and hastened theresolution of the agrarian question.

SOCIAL STRUCTURE OF THEHACIENDA SYSTEMBy the end of the 1950s and early 1960s, thehaciendasystem was characterized bya small number of great estates (the fundos or latifundios), holding 80 per cent of the agricultural land. This system also included a large number of smallholdings,the minifundios usually nearby the fundos that accounted for less than 10 per

cent of the agricultural land.4

The hacienda system was a social system of agricul-tural production and a source of political power supported by the mutuallydependent economies of landlords and peasants. Its structure was hierarchicaland coercive, somewhat similar to the European manorial system, as arguedpowerfully by Kay (1974, 1980).5 The main difference between thehaciendasystem and European feudalism was that peasants in the former had no legalor customary attachment or property claims to the land.

The hacienda system was a socio-economic system formed by the landlord andpeasant economies. The direct producers of the landlord economy, orlatifundia,were the service tenants and salaried workers. The service tenants (known as

inquilinos in Chile) were thehaciendas permanent labour-service that received a4 I will use the terms haciendasystem and latifundia interchangeably to dene the bimodal systemof mutually dependent relations between landlords and peasants characteristic of the Central Valley.I shall use the Spanish termhacienda to depict a large agricultural estate or single property. TheAgrarian Reform Law 16.040 of 1967 denedlatifundioas any agricultural property larger than 80Basic Irrigated Hectares (BIH). A Basic Irrigated Hectare (BIH) is an abstract land unit that standardizedfarmland quality in order to determine its susceptibility to expropriation based on the productivecapacity of the land and not just on its sheer size.5 Huggett (1975, 18) denes the manorial system as follows: Under the manorial system, peasantsin many parts of western Europe had been granted the right to cultivate a share of the arable land inthe large open elds of the village and a customary right to use the surrounding commons andwastelands in return for work on the lords demesne or the provision of other services.


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parcel of land for which they had to pay with their own labour.6 This servicetenantry, the labour system ofinquilinaje , was the most resilient element of thelandlord enterprise. Thehacienda also had temporary workers, who received acash wage payment and food for their work. They were of two types: (1) tem-

porary internal labour, known asvoluntarios (literally volunteers), usually youngmales frominquilino households; and (2) temporary external labour consisting of peones (farm labourers) orafuerinos (outsiders) from outside thehacienda (Ramrez1968).

The peasant economy was structured along two types. First,minifundia (peas-ant smallholders) were those peasants living outside thehaciendaboundaries whosesub-subsistence land parcels might have pushed them to sharecrop on some of the haciendas land, and/or they might have worked as seasonal wageworkers forthe landlord economy (Kay 1977, 104). Second, besides composing the permanentlabour force of thehacienda, inquilinos subsisted by consuming the production of

their land tenancy (as well as from the reduced wage they received). The surplusthey sold on the market was minimal.Inquilinos were agrarian workers who formed the permanent labour-service

tenantry. They received, in exchange for their own and their familys labour,land, the use of pastures, consumption perquisites and a small amount of cash.The land perquisites (regalas de tierra) comprised a garden plot around the houseand a small productive parcel of land (averaging one hectare). For pasture rightsperquisites (regalas de talaje ), typically landowners assigned toinquilinos the pas-tures of non-farmable dry lands in the landlords demesne for livestock breeding(usually a few head of cattle). The consumption perquisites (las raciones) included

a house provided by thehacienda that served to shelter and settle theinquilinohousehold on thehacienda grounds. Inquilinos were also allowed to extract rewoodwithin the haciendas boundaries. Moreover, for those days that theinquilino hadto work for the hacienda, landowners provided food for theinquilino and hisfamily (Baraona et al. 1961, 230; Herrera 1968).

As for the income composition ofinquilino households in the late 1950s andearly 1960s, national gures ofinquilinos income are unavailable (Gregory 1961).But in 1957 the Agriculture Ministry conducted a survey using a direct question-naire given to 92inquilino households (529 persons) in the OHiggins provincefrom which the following was obtained. The total annual income for theinquilinos

in the sample was E 313 (escudos of the time), 74 per cent as agriculturalworkers and 26 per cent as agricultural producers. As a result, theinquilinos inthe sample earned 56 per cent of their income in cash (30 per cent as wages and26 per cent as income earned as producers) and 44 per cent in perquisites (seeTable 2). If we compare the annual income ofinquilinos with those of otherworkers, we nd that E 313 was an extremely low income. The average annualincome for the overall active population in the same year totalled E 1719, whereas

6 For the historical origins and evolution of theinquilinos, see Gngora (1960). For a presentation of Chilean agriculture and the institution ofinquilinaje in the rst decades of the nineteenth century, seethe work of Claudio Gay (1973).


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the annual income of all agricultural workers amounted to E 648. This surveyalso states that due to their low income, the nutrition ofinquilinos and theirfamilies was decient (Chile 1960, iiviii).

The inquilinos had a dual economic function within thehacienda system.On the one hand, they were small agricultural producers on land parcels, uponwhich they had no legal or traditional property claims. They paid rent in labourfor their tenancy rights on the landlords estate. On the other hand,inquilinoswere workers on the landlords enterprise, but their labour was not exchanged

for full cash wages. Instead, their labour was surrendered for a small amount of cash and a variety of perquisites; in other words they exchange services forprecarious rights to land and perquisites (Bauer 1992, 24). Thus, theinquilinoswere small producers, and also they were workers. Consequently, the system of service tenantry was a distinctive form of servile labour control of the Chileanlatifundia.

The hacienda was a hierarchical social system with coercive relations betweenthe landlord and the peasants, which provided landlords with an important sourceof socio-political power at the national level. For example, thoseinquilinos whocould read and write had been induced to register in the landlords political party

and persuaded and in some cases forced to vote for the landlords candidatessince 1874, when Congress passed the law granting male suffrage to thosewho could read.7 Referring to this process, Bauer has stated that from 1870son, landowners were able to enfranchise their workers, fraudulently or not,and encourage, or if necessary purchase, their vote (1992, 28). These bondage

Table 2. Income composition ofinquilinos, 1957

Categories Income (Escudos E)

E %

As a worker Cash 94 30Perquisites 139 44Sub-total 233 74

As a producer 80 26Total income 313 100

Source : Chile (1960).

7 In 1958 the single ballot was introduced in Chiles electoral system, which changed this practice.The single ballot and the law that gave women the right to vote in elections in 1949 provided theinstitutional change that made it possible for the Christian Democrat party to win the elections in1964. For an account of the constitutional history and the concomitant electoral development of Chile, see Gil (1966) and Urza Valenzuela (1992).


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relations betweeninquilinosand landlords provided the latter with the absolutecontrol of the economic and social relations on their estates and in the surroundingcountryside. Landowners exercised their powerful inuence on local policy, the judiciary and rural schools. Thus they controlled the external rural population

in villages as well (Loveman 1976). For landlords, political calculations were of equal importance to their economic motivations. Their main objective was toretain their power in national politics to maintain their veto power on agrarianpolicy. They constituted an old aristocratic seigneurial class (Bauer 1975b; Gngora1970; Stabili 1996). They held their estates as both a badge of class distinctionand as a source of production for market-oriented agriculture.

Two of the most enduring characteristics of this landed class were rstthe impermeability that it posed to members of other classes, which wasaccomplished primarily by the intermarriage of its members, and, second,the monopoly that it enjoyed on most of the prime agricultural land.8 This

monopoly was secured through inheritance from one generation to the next if possible in one piece usually to the rst-born male heir of the patriarchallineal family. The legal use of primogeniture helped prevent thehaciendafrom being subdivided into smaller units and to keep it in the linear patriarchalfamily (Gngora and Borde 1956). By pursuing these two strategies inter-marriage and the primogeniture inheritance of property Chilean landowningfamilies retained their large estates. These estates helped them sustain theirclass privileges through the servitude and electoral support of their agriculturalworkers. A case in point, the banker and landowner, Julio Subercaseaux Brawne,after gaining a seat in the Congress Chamber of Deputies for the Conservative

Party in the 1900s, commented on the reason for his victory: we had within ourreach near three thousand votes corresponding to the inquilinos of our estates orthose that we had in leasing and administration. Such was the electoral inuencethat our bank had for its customers (cited in Villalobos 1987, 158). Con-sequently, rural proprietorship for landowners was the pivotal source of theireconomic base, as well as a political source of power through their dominionover rural labour.

The hacienda El Huique exemplies the relentless bequeathing of large estateswithin the members of the landowning class (see Figure 1). Thishacienda hadseveral thousand hectares and was located in theColchagua province; this region

became the epitome of the Chileanlatifundia (Stabili 1996, 188). The formation anddevelopment of thishacienda sprang from seventeenth-centurymercedes, which werelarge grants of land, of 2000 hectares or more, given by the crown to favouredSpanish settlers in its American possessions. Thehacienda remained intact until1790 when it was subdivided into twohaciendas, Almague and El Huique , among

8 In a book dedicated to the genealogy of the Errzuriz family, one of the most politically inuentialChilean families during the nineteenth century, there is a listing of each male scion of this family. Itincludes a list of his children and to whom they were married and if they were relatives. By quicklybrowsing through those listings, one can see that the majority of those who married wed their rstor second cousins (Medina and Larran 1964).


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Figure 1Tenancy evolution of thehacienda El Huique

the children of Pedro Echeique (Bauer 1975b; Larran 1944). In turn, in 1828ElHuique was subdivided into twohaciendas (El Huique proper and San Jos delCarmen) among the children of Miguel Echeique Lecaros. Juan Jos EcheiqueBascun (17951883) inherited the southern half of theEl Huique , which he


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namedSan Jos del Carmen.9 In 1852, he married Jess Mujica Echaurren (the nieceof his rst wife), from this union his only child was born, Gertrudis EcheiqueMujica. At the death of her father in 1883, Gertrudis Echeique Mujica inherited thehacienda. In 1875, she had married her rst cousin Federico Errzuriz Echaurren,

president of Chile (18961901) and himself a large landowner. The only survivingchild of the couple, Elena Errzuriz Echeique (18771966), inherited thehaciendain 1928, together with other properties. Elena Errzuriz Echeique was an absenteelandowner. Like many members of her class, she spent at most a couple of monthsduring the summer at the estate, and the rest of the year she lived either in Santiagoor Paris (Medina and Larran 1964, 278). In May 1966,San Jos del Carmen, withan area of 6000 hectares, was expropriated by the CORA (the national agency foragrarian reform). In 1974, during the military government, thehacienda wassubdivided into 143 parcels and distributed among thehaciendas old inquilinos.CORA gave the owner a small reserve that contained the old estates house, the

church and the gardens. In 1975, the heirs of Elena Errzuriz Echeique gave thisreserve to the Chilean Army. In 1986, the army transformed the property into amuseum, which stands today as a material remnant of the old relation between thelandowner class and the Chilean state. Thus, the Echeique landowner familykept thishacienda from 1756 until its expropriation by the Chilean state in 1966.

The smallholders who constituted the external peasant enterprises (the so-calledminifundia) were and still are the typical manifestation of an agrarianeconomy of subsistence. This economy was based on safety-rst production andcommercialization of surpluses. Family growth was the main contradictionthat hindered and also supported the success or failure of the smallholders. The

minifundia sector subscribed to the partible inheritance custom, which caused theproliferation of subdivided plots incapable of providing a basic subsistence forthe smallholders household.10 Some of the population surplus generated in thissector sold their labour for cash wages as temporary workers in the surroundinghacienda or out-migrated to urban centres. The latter process contributed, especiallyafter the world crisis of the 1930s, to the development of a highly urbanizednational society. It should be mentioned that theminifundianever developedinto the traditional smallholder peasant village, which characterized the WesternEuropean Grundherrschaft peasant experience and that of other Latin Americancountries such as Mexico. In these places, the peasant experience produced a

distinct culture and a base for community action (Bauer 1975a, 170). Instead, asmany have argued, thehacienda system not only controlled the lives of thosewho worked on the haciendas, but landowners controlled theminifundistas and

9 According to the 1854 government tax roll of rural properties, thehaciendas San Jos del Carmenand El Huiquehad annual rents of 8000 and 11,000 pesos, respectively (Chile 1861, 23). In order togive an idea of the contemporary meaning of an annual income of 11,000 pesos, Bauer (1975a, 35)mentions that [t]he highest ranking general then was paid $4500 and the President, $18,000.During the 1860s, the value of one Chilean Peso ranged between 43 and 46 pence, and equalled US$1(Pinto 1962, 104).10 The causes and characteristics of the subdivision ofminifundia in the early 1960s are expoundedin Alaluf (1961) and a publication of the Universidad de Chile (1960). The study by Garrido andErrzuriz (1973) summarizes the socio-economic conditions ofminifundia during the early 1970s.


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proprietors of small holdings in rural hamlets who depended on the landownersfavours (Bengoa 1988, 12). The so-calledlatifundiaminifundiacomplex was aclosed social system dominated by the landowners (thehacendados or latifundistas)through their exclusive control of the rural labour force and through the veto

power that they enjoyed over the governments agricultural policy.The agrarian structure of thehaciendasystem began changing even before theagrarian reform. The crucial question is how much it changed. It is my argu-ment that the change encountered a powerful barrier. Schejtman points out thatdue to the impact of the world economic crisis beginning in 1929, thehaciendasystem started slowly to change, and that this institution experienced a growingloss of legitimacy (n.d., 5). Based on his own previous work,11 he states that inthe early 1960s, the contradiction between the landlord enterprise and the internaleconomies of peasants had evolved into three patterns of agrarian structure. Therst pattern, which possibly might have accounted for the majority ofhaciendas

and fundos, is the TraditionalHacienda, standing in a sort of dynamic balancebetween the two economies the internal peasant economy and the landlordenterprise. The second pattern is the Modern EmergentHacienda. Thesehaciendashad concluded the transformation of their economies into a fully capitalistmodern enterprise by totally or partially ending the internal economy of peasants. Landowners had advanced the proletarianization of their workers in aprocess that is reminiscent of the Prussian road to agrarian capitalism. Thethird pattern is the TraditionalHacienda in Disintegration. In thesehaciendas, thelandlord economy has diminished in favour of an intensication of the internaleconomies of the peasants and the strengthening of sharecropping, the so-called

medierias.12

Passive or absentee landlords with insufcient capital and those whoheld the land for pure class-status reasons sought to increase their rents by grant-ing more land to the peasant economies. Unfortunately, there is not a studyavailable that quanties the incidence of each pattern in the pre-reform period.Accepting Schejtmans categorization, I would argue that the relevant literaturesuggests that the Traditional and Disintegration phases of thehacienda systemmade up the majority of estates in the late 1950s and early 1960s.

11 In 196566, the Instituto de Capacitacin e Investigacin en Reforma Agraria (ICIRA) completeda longitudinal list of the greatest estates ( fundos de gran potencial) larger than 150 equal hectares(hectareas de equivalente primera de riego) in Chiles Central Valley, from Aconcagua ton uble (Chiles

nine most important provinces for agriculture). This work showed that 1067haciendas, 1.7 per centof all land holdings registered in the Agricultural Census of 1955, constituted the most importantsegment of thelatifundia. The ICIRA drew a random sample of 105 of these in order to lay down asample of expropriable estates before expropriation began. Schejtman completed this list, includingthe drawing of the random sample, and carried out the baseline study in 1966. His workEl Inquilinode Chile Central (1971) is the original analysis of the 1966 questionnaire administered to 259inquilinohouseholds, who were living on the 105haciendas. It documents the socio-economic conditions of thelabour force of thehaciendasystem and the patterns of agrarian development between the landlordand the peasant economies. Kay used these data for his comparative analysis of the European manorialsystem and the Latin Americanhaciendasystem (1971). He coined the terms ICIRA Fundo Projectfor the general survey, Landlords Survey for the data of the Landlord Enterprise and TenantsSurvey for the data concerning the internal Peasant Enterprise.12 Bengoa (1988, 267), although writing about the last decades of the nineteenth century, refers tothis process asinquilinizacin or campesinizacinof the labour force.


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In 1960, Chile had a total population of 7.6 million, of which 2.6 million wereclassied as rural. The total labour force was 2.7 million, of which 732,700 wereengaged in agriculture, or 26 per cent of the total labour force (Garrido andErrzuriz 1973, 5). The most comprehensive attempt to characterize empirically

the social structure of the agrarian sector in the pre-agrarian reform period wasdone by the Inter-American Committee for Agricultural Development (CIDA1966). CIDA was the most inuential study that argued that Chiles agrarianstructure was delaying the overall modernization of the country.

Table 3 depicts the CIDA classication of agrarian social classes from the 1955census data. The members of the Traditional Agrarian Landed class of Chileslatifundia (the landowners of thehaciendas and large fundos) were only 2.1 percent of the labour force. They comprised 3 per cent of the rural households andmonopolized 78 per cent of the agricultural lands. The Agrarian Capitalists (theworld of the modern and emergent medium capitalist farms) constituted 6.8 per

cent of the labour force and held about 13 per cent of the land. The AgrarianMiddle Class (the landowners of the family farms) comprised 16.5 per cent of thelabour force and held 7 per cent of the land, which illustrates the weakness of thisclass among Chilean peasants.13 The Subsistence Peasants (the owner-operatorsor legal tenants of the sub-family farms ofminifundia) consisted of 26 per centof the labour force and had 2.1 per cent of the irrigated land. The InternalHacienda Workers (operators of sub-tenures from thehacienda land) comprised 40per cent of the labour force. Therefore, in the mid-1950s more than one third of the labour force was dependent upon the socio-economic system oflatifundia. Of these workers,inquilinos were the largest group, representing 26 per cent of the

labour force. Finally, the Landless Peasants were 8.5 per cent of the labour force.They sought permanent or temporary employment as agrarian workers in thelarge haciendas or in the medium capitalist farms.

13 De Janvry states: the nonexistence of a signicant rural petty bourgeoisie among [Latin Americaspeasants] . . . reects the weakness of the farmer road under conditions of disarticulated accumulationand institutional control by the traditional agrarian elites (1981, 116).

Table 3.Distribution of agrarian social classes

Class structure Labour force Households Irrigated land

No. % No. % No. %

Traditional landed class 13,700 2 10,300 3 856,200 78

Agrarian capitalists 44,900 7 22,300 6 138,200 13Agrarian middle class 109,500 16 61,100 18 80,100 7Subsistence peasants 172,300 26 79,800 23 23,400 2Internalhacienda workers 267,500 40 146,000 42 n/d n/dLandless workers 56,300 8 25,400 7Total 664,200 100 344,900 100 1,097,900 100

Source : CIDA (1966, 294).


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SPATIAL STRUCTURE OF THE HACIENDA SYSTEMI have concentrated so far on the social structure of Chileshacienda system. Iturn now to its spatial structure in the early 1960s, deriving from the socialstructure. This new focus reveals a marked sub-utilization of Chiles agriculturalland. It also reveals that it was not land scarcity that was Chiles problem. Chilewas characterized by an extreme concentration of land and resources, one of themost skewed distributions in the world.

The arable land in Chile is concentrated in the Central Valley, the mostimportant agricultural region. The Central Valley is a longitudinal depression,from the Aconcagua province in the north to then uble province in the south,which runs northsouth between the Andes and the Coastal Range. The CentralValley has an area of 7 million hectares (70,000 square kilometres) comprisingabout 9 per cent of Chiles total landmass. It holds 76 per cent of Chiles primeirrigated lands. In the early 1960s, this region accounted for about 45 per cent of Chiles agricultural output.

The area of Chile is 75.6 million hectares. Its available arable land is 4.6million hectares (1.2 million hectares of irrigated land and 3.4 million hectares of arable dry lands).14 Arable land is not abundant in Chile. The 4.6 million hectaresrepresents only 6.1 per cent of the total area of the country (GIA 1979) (Table 4).According to the Food and Agriculture Organization (FAO), other Latin Americancounties have larger percentages of arable land (e.g. Argentina, 10.7 per cent;Mexico, 12 per cent; and Uruguay, 8 per cent). In terms of absolute numbers,all these countries, with the exception of Uruguay which is smaller than Chile

14 The irrigated land has not experienced fundamental advances in recent decades: in 1930 Chile had1130 million hectares of irrigated land, in 1965 it was 1229, in 1986 it was 1257.

Table 4.Distribution of land use capacity

Land type Area (million ha)

No. %

Arable land Irrigated 1.2 1.6Dryland 3.4 4.5Sub-total 4.6 6.1Non-arable Prairies 8.5 11.2Forest 11.7 15.5Sub-total 20.2 26.7Non-productive 50.8 67.2Total 75.6 100.0

Source : GIA (1979, 67).


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have a larger arable area. In 1965, the per capita availability of arable land was0.5 hectares per inhabitant, which is lower than that of other Latin Americancountries, but higher than countries in Asia and almost equal to those in Europe,such as Spain and Italy.15

If we compare the potential capacity of the land with the actual use of the landin the 1960s, we nd that only 1.4 million hectares, of the 5.5 million that wereclassied as agricultural land by the 1965 agricultural census, were harvested andconsequently used for agricultural purposes (Table 5). Indeed, since at least the1940s, between 1.5 and 1.7 million hectares were harvested every agriculturalyear. This sub-utilization of the agricultural land is exemplied by the fact that2.9 million hectares, representing 52 per cent of the total arable land, were leftidle as unimproved natural pastures and fallow land. Even though arable land isnot plentiful in Chile, the data on actual use of the land in 1965 show that landscarcity was not the limiting factor for agriculture, since more than 50 per cent of

the arable land was underutilized as pastures.16

In the Central Valley, 3040 per

15 The total population of Chile in 1965 was 8.5 million.16 The water supply and geo-ecological conditions of soil quality and climate are not a limitingfactor for agriculture in Chile. The Central Valley has a good supply of water from rivers that oweastwest from the Andes Mountains. In the 1960s, as well as today, irrigation water was only aproblem in years of serious drought in the Central Valley. Recently, the agricultural frontier hasmoved further north to the non-irrigated lands of the semi-arid region ofNorte Chico, where drop-irrigation techniques have been implemented. Moreover, the Central Valleys mediterranean climateand the quality of its soils are among the most appropriate for agriculture in the world, which, as thelater economic boom in agriculture has shown, are Chiles best agricultural comparative advantages.

Table 5.Distribution of actual land use in 1965

Land uses Area (million ha)

No. %

Arable land

Crops 1.4 4.6Improved pastures 1.2 3.9Natural pastures and fallow land 2.9 9.5Sub-total 5.5 18.0Non-arable Prairies 9.0 29.4Forests 5.8 19.0Unused land 2.3 7.5Sub-total 17.1 55.9Non-productive 8.0 26.1Total 30.6 100.0

Source : Alaluf et al. (1969, 50).


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cent of the arable land was under natural pastures. This idle land could have beenused for crops or improved pastures for livestock breeding (Alaluf et al. 1969,77). Thus, the majority of Chiles agricultural land (52 per cent of the arableland) t for the production of staple food crops was idle, unutilized or used as

unimproved grazing land while the population of the country was growingrapidly and food had to be imported.17Historically, agrarian land tenure in Chile has had two basic characteristics:

the excessive concentration of the best lands and the extreme division of theremaining land.18 According to the agricultural census of 1955 (see Table 6),estates greater than 1000 hectares (haciendas de gran potencial) comprised 2.2 percent of the land holdings and held 73 per cent of Chiles total agricultural land(Chile 1962, 18).19 Thus, Chile had one of the most skewed distributions in theworld with land and capital resources strongly concentrated in few hands (Chile1965, 168). This concentration of land and resources was referred to aslatifundia.

Along with this extreme concentration of the land was an excessive division of small agricultural properties. A great percentage of land holdings accounted for asmall portion of the agricultural land. This extreme division of the land in manyholdings is known asminifundia.

Table 6.Distribution of farms and agricultural land by farm size, 1955

Size categories Land holdings Area (ha)

No. % No. %

Below 10 75,627 50.1 217,604 0.81099 53,766 35.6 1,833,720 6.61001000 18,316 12.1 5,365,040 19.4Over 1000 3,373 2.2 20,295,944 73.2Total 151,082 100.0 27,712,308 100.0


The census data of 1965, summarized in Table 7, basically conrm the structural

feature of the Chilean land tenure system:minifundia account for the majority of the holdings but only a small fraction of the land;latifundia, on the other hand,hold the majority of the land.

17 Indeed, in the pre-reform years numerous estates with prime irrigated land were only used asunimproved grazing lands or completely unutilized for years. The owners of these estates used tostate in the Census questionnaires that their land was left fallow.18 For the purpose of this work we dene land tenure as the legal and traditional relations amongindividuals, producers and institutions that regulate the rights of usage of the land and the usufruct of its products, concomitant with the obligations attached to such rights (IREN-CORFO 1979, 18).19 Agricultural land according to the agricultural census of 1955 is formed by arable land (irrigatedand dry land) and non-arable land with forestry and livestock-breeding capacity.


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Table 7.Distribution of farms and agricultural land by farm size, 1965

Size categories Land holdings Area (ha)

No. % No. %

Below 10 156,708 61.8 437,300 1.41099 74,120 29.2 2,348,200 7.71001000 19,333 7.6 5,572,400 18.2Over 1000 3,331 1.3 22,290,800 72.7Total 253,492 100.0 30,648,700 100.0


WAS THERE STRUCTURAL CHANGE BETWEEN 1955 AND 1965?Two elements seemto have changed between the censuses of 1955 and 1965.First, the total number of land holdings seems to have increased by more than100,000 units. Second, those land holdings smaller than 10 hectares (theminifundia)seem to have also increased. It is important to reect on this, since our assess-ment of the nature of agrarian change in Chile at this juncture and of how farany possible agrarian transformation had proceeded hinges upon whether thesenumbers are accurate. Some inuential scholars may have been misled by theapparent change.

In fact, this growth did not occur. On the contrary, the number of landholdings decreased by 36,000 units. This error was the product of two differentconceptual denitions that produced a change in the census questionnaires. Theagricultural census of 1955 did not consider the land holdings ofinquilinosand medieros whose holdings are sub-tenures of less than 10 hectares withinthe hacienda in its survey, because it did not consider them to be agriculturalproducers. Therefore their land holdings were not considered in the totals,while they wereincluded in the 1965 census. The land holdings ofinquilinosand medieros in the 1955 census were 111,790 units. Therefore, if one wants tocompare the land holdings of 1955 with those of the agricultural census of 1965

(the year in whichinquilinos and medieros were considered agricultural pro-ducers), one would have to add the 111,790 land holdings ofinquilinos andmedieros to the 151,082 land holdings of the other agricultural producers of thatyear, which adds up to 289,733 units. Thus, thetotal land holdings decreased by12 per cent which means that theconcentration of the land increased between 1955and 1965 (see Table 8).

With regard to the compatibility of the 1955 and 1965 censuses for comparisonpurposes, the following should be noted. Many problems of comparing differentcensus data stemmed from the changes introduced, from one census to another,in the denitions of key classications used to gather the information. Thesechanges render some of the totals incompatible if some adjustments are not


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Table 8.Corrected distribution of land holdings by type of tenure, 1955 and 1965

Type of tenure Number of land holdings Change (19551965)

1955 1965 No. %

Producersa 151,082 175,170 24,088 15.9Inquilinos 111,790 60,315 51,475 46.0Sharecroppers 26,861 18,007 8,854 33.0Total 289,733 253,492 36,241 12.5

a Includes unpaid family members.Sources: Alaluf et al. (1969, 52).

made. Failure to do so has misled some authors and led them to advance aninaccurate assessment of the nature of agrarian change at that time.

Thus, for example, some authors, including the very inuential Schejtman(1971, 200; n.d., 58) and Kay (1971, 127; 1977, 11316), have used census dataof the labour force structure, and especially ofinquilinos (their total numbers andthe amount of land assigned to them within thehaciendas) to show the rapiddisintegration of thehacienda system and the proletarianization of its labour forcein the 1950s and 1960s. Specically, both authors used the absolute and therelative number ofinquilinos in the agricultural labour force to sustain their

thesis. Kay observes: Inquilinos became less important within the total economi-cally active agricultural population. Their proportion of the rural populationdiminished from a maximum of 21 per cent in 1935 to 12 per cent in 1955 and 6per cent in 1965 (1977, 115). According to the two censuses, the total number of inquilinos in 1955 was 82,367, and in 1965 it was 73,938. The total active agrarianlabour force in 1955 totalled 664,240, and in 1965 it amounted to 878,780. There-fore, according to these numbers, the relative number ofinquilinos in the labourforce was 12 and 9 per cent, respectively. Thus, besides the relative fall of theparticipation ofinquilinos in the active agrarian population, the total number of the active labour force seemed to have increased by more than 200,000 persons,

a 32 per cent increase (see Table 9).This growth seems to contradict the widely accepted notion that agriculturesince the 1930s did not attain sustainable rates of growth, and therefore the rurallabour force continued to out-migrate, in vast numbers, to the rapidly growingcities. Alaluf et al. (1969, 6270), however, have demonstrated that this growthof the agrarian labour force indeed did not occur. The totals thus obtained inthese two censuses are not an accurate account of the total persons engaged inagriculture in those years since some important omissions in the populationcount were made in the 1955 census, and other duplications (some of which canbe accounted for and others not) were made in attempting to surmount thisshortcoming in the 1965 census. In the 1955 census, the family members of


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Table 9.Labour force structure (uncorrected census data), 1955 and 1965

Category 1955 1965 Change 19551965

No. % No. % No. %

Producers/unpaid family members 329,262 49.6 514,787 58.6 185,525 56.3Administrators/employees 12,664 1.9 12,138 1.4 526 4.2Overseers 19,499 2.9 16,021 1.8 3,478 17.8Inquilinos/inquilinosmedieros 82,367 12.4 73,938 8.4 8,429 10.2Sharecroppers (medieros) 26,861 4.0Temporary workers (afuerinos) 193,587 29.1 261,896 29.8 68,309 35.3Total 664,240 100.0 878,780 100.0 214,540 32.3


inquilinos and sharecroppers that worked in agriculture without remunerationwere not included in the count sinceinquilinos and sharecroppers were not con-sidered producers. If we assume, after Alaluf et al. (1969, 67), that there was atleast one unpaid family member perinquilino and sharecropper family, we wouldhave to add 111,790 persons to the category of producers and unpaid familymembers in the 1955 census. In the 1965 census,inquilinos, sharecroppers, ad-ministrators, employees and overseers together with their family members who

worked in agriculture were accounted for twice, once as producers and again asworkers. Hence, more than 60,000 persons should be subtracted from the cat-egory of producers and unpaid family members in the 1965 census. In summary,in 1955 the total active population engaged in agriculture was larger than 664,240,possibly about 776,030. The corresponding population of 1965 was smaller than878,780, probably between the range of 780,000 and 818,465. Even this latterestimate still has duplications that are impossible to assess. Then, if we take intoconsideration the duplications incurred in the 1965 census, and the fact that theunremunerated family members ofinquilinos and sharecroppers were not countedin the 1955 census, we can conclude that the agricultural workforce did not

increase during the 1955 and 1965 period. In the best scenario, we can say that itremained constant (Alaluf et al. 1969, 69). Thus, the relative number ofinquilinosparticipating in the agricultural active labour force from the mid-1950s to theearly 1960s ranged between about 9 and 10 per cent (see Table 10). This is atvariance with Kays assessment of the situation. These gures do not support histhesis of the rapid disintegration of thehacienda system and the proletarianizationof its labour force in the 1950s and 1960s. On the contrary, the demise of thetraditionalhacienda system would require purposive state intervention.

Another problem with these two censuses involves the total amount of landthat inquilinos held in the form ofregalas. Kay, referring to the fall in the totalnumber of hectares leased toinquilinos, states: the land leased on a sharecropping


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basis remained more or less the same between 1955 and 1965, whereas the landleased inregala to labour-service tenants diminished by about one sixth (1977,114). For his observations Kay used the raw data of both censuses, which showed136,900 hectares held byinquilinos in 1955 and 115,400 hectares for the 1965census. These data show a decrease of 15.6 per cent in the land assigned toinquilinos. The problem with this information is that the total amount of landheld by inquilinos in 1955 was composed of both their land held inregalas and

on a sharecropping basis. In consequence, the sharecropping class in 1955 is apure category. The 1965 census, on the other hand, distinguishes between theland held byinquilinos in regalas from their land held on a sharecropping basis.The rst amount, the land held inregalas, is depicted as the land held byinquilinos;and the second amount, the land held on a sharecropping basis, is added tothe land held by pure sharecroppers. Thus, the sharecropping class is a mixedclass of pure sharecroppers and the land held under this guise byinquilinos (Alaluf et al. 1969, 558). After the adjustments have been made to the agriculturalcensuses of 1955 and 1965, the corrected data show that the land held byinquilinos(tierras en racin) instead ofdiminishing, as depicted by the unadjusted data, grew

by 3000 hectares (a 2.3 per cent increment). And the land held on a sharecrop-ping basis declined by 140,000 hectares (a 36 per cent cut) (Alaluf et al. 1969, 58).Thus, the data ofinquilinos (their total numbers and the amount of land assignedto them) from these two censuses depict two different classications that shouldbe taken into account when used to identify a general trend (see Table 11). Thatgeneral trend was not one of disintegration of the traditionalhacienda system. Onthe contrary, the data show the endurance of the internal peasant enterprisewithin the hacienda system.

Agricultural censuses attempt to survey all the land that potentially can beused for agriculture. Yet, as stated before, in Chile the actual land used for cropseach year was smaller than the total area surveyed by the agricultural census. In

Table 10.Corrected labour force structure, 1955 and 1965 census

Category 1955 1965 Change 19551965

No. % No. % No. %

Producers/unpaid family members 441,052 56.8 436,465 53.3 4,587 1.0Administrators/employees 12,664 1.6 12,138 1.5 526 4.2Overseers 19,499 2.5 16,021 2.0 3,478 17.8Inquilinos/inquilinosmedieros 82,367 10.6 73,938 9.0 8,429 10.2Sharecroppers (medieros) 26,861 3.5 18,007 2.2 8,854 33.0Temporary workers (afuerinos) 193,587 24.9 261,896 32.0 68,309 35.3Total 776,030 100.0 818,465 100.0 42,435 5.5



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Table 11.Corrected distribution of land by type of tenure, 1955 and 1965

Type of tenure Area (1000 ha) Change (19551965)

1955 1965 No. %

Producersa 27,185.6 30,259.5 3,073.9 11.3Inquilinos 136.9 140.0 3.1 2.3Sharecroppers 389.8 249.2 140.6 36.1Total 27,712.3 30,648.7 2,936.4 10.6

a Includes unpaid family members.Source : Alaluf et al. (1969, 58).

1955 and 1965, the cultivated area was 1.4 million hectares each year (annual andpermanent crops). Therefore, when we look at the participation of tenure typesin the actual harvested land, we can better measure the impact of sub-tenures ingrowing the domestic food that was produced in those years. In 1955,inquilinosrepresented 10 per cent of the agricultural workforce and held 9.2 per cent of the cultivated area. Sharecroppers represented 3.4 per cent of the agriculturalworkforce and held 26 per cent of the total cultivated area. Together they repre-sented 14 per cent of the labour force and held 35 per cent of the total cultivatedland. In 1965,inquilinos comprised 9 per cent of the agricultural workforce andheld almost 10 per cent of the cultivated land. Sharecroppers represented 2.2 per

cent of the agricultural workforce and held 17.5 per cent of the cultivated land.Together they represented 11.2 per cent of the agricultural labour force and held18.5 per cent of the cultivated land (Alaluf et al. 1969, 50, 58, 61, 69).

These data show the unexpected structural continuity of thehacienda system.The growing urbanrural struggle in national politics, the continuing erosion of landowners veto power on agricultural policy and the lethargic performance of agriculture did not yet produce deep structural changes in thehacienda system.Rather, the landowners continued to hold the majority of the agriculturalland captive and unproductive and to rely on a combination of cash paymentsand non-capitalist forms of surplus extraction from labour-service tenants and

sharecroppers.Some changes were taking place that were indeed part of the secular declineof agriculture in general and thehacienda system in particular. For example, onesmall sector of thehaciendas was reinforcing the old labour system ofinquilinaje by providing more land resources to service tenants in return for rents, whileothers, also few in numbers, had evolved into modern capitalist structures byintensifying the use of productive resources and extending the cash wage to theirlabour force. The majority of the estates, however, were under the Traditionalstage of thehacienda system.

Up to this point, we have presented our disagreement with the way in whichKay and Schejtman have used the census data to advance their thesis of the


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continued disintegration of the internal economies of peasants since the 1930s.They identied this change to argue that, by the early 1960s, the Chileanhaciendasystem had largely completed its transition to agrarian capitalism. My systematicanalysis has shown that up to the beginning of the agrarian reform, in 1965, the

data do not support their thesis of the disintegration of thehacienda system. Onecannot yet speak of the obliteration of thehacienda system nor of the completeproletarianization of its labour force. It is my argument that the agrarian restruc-turing process carried out by the state would ultimately, in the late 1960s andearly 1970s, completely reshape it into more capitalistic forms. Therefore, boththe countrys and thehaciendas transition to capitalism were far from beingaccomplished in the early 1960s.

ECONOMIC DEVELOPMENT OF THE HACIENDA SYSTEM

The hacienda system was consolidated in the second half of the nineteenth cen-tury with the growth of foreign markets. Certainly, from 1850 onward, Chileanagriculture received a great economic boost from the growing demand for itswheat, rst in the Pacic basin and later in England (Bengoa 1990; Seplveda1959). At the end of the nineteenth century, the export of wheat started declin-ing. Nonetheless, from 1900 to 1930 Chilean agriculture saw a period of higherproduction due to the growth of the internal market for agricultural productsand the implementation of some mechanization (Mamalakis 1965; Meller1996). The world economic crisis beginning in 1929 arrested this development.An agricultural downturn set in, and Chilean agriculture failed to produce

enough foodstuffs to feed the growing urban population (Mamalakis 1976, 347).The natural consequence of this situation was the sustained growth of foodimports, which in turn upset the balance of trade and hurt the Chilean economy.Thus, the limited supply of foreign exchange had to be spent on food imports.Furthermore, agriculture stopped generating employment and, as a consequence,a growing number of landless agricultural workers out-migrated to the citiesto seek employment in the urban economy.20 The sluggish growth of urbanlabour markets led to the growth of unemployment and increases in povertyrates.21

The imbalance between a rising population and diminishing food production

was clear. Between 1936 and 1965, the population grew at a rate of 2.1 per centwhile agricultural output grew at only 1.8 per cent, a rate that is inferior topopulation growth, to the internal demand for agricultural products and to thegrowth of the other sectors of the economy (Chile 1968, 3). As a consequence,

20 For an account of the socio-economic determinants of Chiles rapid urbanization in the twentiethcentury, see Friedmann and Lackington (1971), and Johnson (1978). For an interesting exposition of the case of Santiago and the countryside at the beginning of the twentieth century, see chapter 8 of Bauer (1975a).21 In 1960, Chile had 67 per cent of its population classied as urban and Santiago concentratedabout one third of Chiles total population of 7.6 million of habitants.


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the annual per capita rate of agricultural production growth for this period wasnegative, at 0.4 per cent. Food imports lled this gap between the growingdemand for food and diminishing agricultural productivity. Indeed, from thesecond half of the nineteenth century, Chile was a net exporter of agricultural

products, and after the world economic crisis it became a net importer.22

From1963 to 1965, agricultures contribution to total income generated by exportswas only 3 per cent, whereas importing foodstuff and inputs for the agriculturalsector used 30 per cent of total export income (Chile 1968, 3). From 1936, theincome spent on agricultural imports roughly doubled with each passing decadeto reach about US$155 million by 1965; causing each year a sustained haemor-rhage in the national accounts. Even though a large share of the countrysincome had been spent on agricultural products, a large share of the populationis malnourished (Chile 1968, 4).

As to what went wrong with agriculture and thehacienda system after the

1930s, there were two opposing answers that offered two different sets of policyrecommendations. The rst was the so-called monetarist approach, and thesecond the structuralist or reformist approach of agrarian stagnation.

According to the former view, the incentives for modernization and higherproduction in agriculture and the rural sector were simply not present. It wasfurther contended that national economic policymaking had been more favour-able to the interests of industry and the urban sector by placing price controls onagricultural products (Swift 1971, 2), and against the interests of agriculture bykeeping prots low. This perspective asked for sectoral incentives more in tunewith agricultural needs, such as higher prices for the domestic production

of agricultural products, high tariffs on imports of competitive agriculturalproducts, and lower tariffs on imports of agricultural inputs. This approach wasinformed by the market rationality view of neo-classical economics and soughtto promote agricultural growth via technological change and, most importantly,within the existing socio-political structure (Bray 1966). Mamalakis summarizedthis view by stating that negative incentives, such as price controls, deterioratingterms of trade, subsidized imports, inadequate extension work, and land reformled to agricultures decline as a food producer (1976, 348).

Proponents of the second view argued that the main obstacles to modernizingthe agricultural system were both the concentration of the best land and water

resources in the hands of an agricultural oligarchy that hold land more for astatus symbol than for prot making and the antiquated system of its labourforce (Swift 1971, 2). In this approach it was further argued that thehaciendasystem was characterized by low productivity and underutilization of labour andland. Table 12 shows the extent to which labour and the productive land weremanaged by each social group of agriculture in 1965, and their output, expressedin the monetary value of their production. First, it should be borne in mind that

22 1939 was the last year that agriculture showed a positive balance of trade. In 19421944the balance of trade of the agricultural sector was 6.7 million dollars, by 19481950 it had grown to 29.6 million dollars.


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2 0 0 6 Th e A

u t h o r .

J o u r n a l c o m pi l a t i o n 2 0 0 6 Bl a c k w

e l l P u b l i s h i n gL t d ,H e n r yB

e r n s t e i n a n d T

e r e n c e J .B

y r e s .

J o u r n a l of A

g r a r i a n Ch a n g e ,

V ol . 6 N o .2 ,A

p r i l 2 0 0 6 , p p . 1 6 7 2 0 4 .

Table 12. Labour structure, land use and value of production, by category of land tenure, 1965

Category Latifundiaa

Medium farms Family farms No. % No. % No. % N

Labour structure b

Administrators/employees 8,674 75.7 1,638 14.3 650 5.7 501Overseers 13,061 83.9 1,401 9.0 544 3.5 5Inquilinos / inquilinosmedieros 60,015 83.9 8,207 11.5 2,342 3.3Afuerinos 142,521 59.5 41,142 17.2 27,221 11.4 28,5Total 224,271 66.4 52,388 15.5 30,757 9.1 30,5

Land use (1000 ha)Crops 287.8 18.8 573.8 37.5 303.4 19.8 3Articial pastures 490.5 47.6 447.0 43.4 70.2 6.8 2Natural pastures 7,762.4 76.5 1,670.3 16.5 556.5 5.5 16Productive non-used land 2,161.7 52.2 1,214.3 29.3 567.4 13.7 200Total usable land 10,702.4 63.5 3,905.4 23.2 1,497.5 8.9 75

Value of production (1000 E )c

Crops 189,780.0 16.5 444,030.0 38.6 211,640.0 18.4 304,8Livestock and products 245,060.0 27.8 354,720.0 40.3 127,880.0 14.5 152,470Total production 434,840.0 21.4 798,750.0 39.3 339,520.0 16.7 457,270

a

Size of holdings: Latifundia, over 80 BIH; Medium farms, 2080 BIH; Family farms, 520 BIH; Mb The category of producers/unpaid family members is not included. They amounted to 376,400 persons.c Escudos of 1965, 1 E = 0.27 US$.Sources : For labour structure, Thomas (1996, 38); for land use, Baytelman (1979, 125); for value of produc


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the hacienda system concentrated the majority of the nations rural labour force:66 per cent to be exact. Second, it should be noted that this system encompassedthe majority of the usable land (63 per cent), but cultivated only 18 per cent of the countrys total land dedicated to crops and concentrated 47 per cent of the

total land used for improved pastures for livestock grazing. The majority of latifundias usable land was, however, left unproductive as natural pastures andnon-used land. Therefore, thehacienda system contributed, proportionately to itssize, a small part of the total countrys agricultural production, only 19 per centof its crop production and 28 per cent of its livestock products (measured by thevalue of production). This is of fundamental importance inasmuch as it showsthe latifundias severe underutilization of land and labour (Baytelman 1979).

The structuralists policy proposals aimed not just to radically change thedistribution of economic resources such as land and water, but also soughtthe inclusion of the peasantry into the modern economy as a condition for the

modernization of the whole society (Thiesenhusen 1967). The proponents of thereformist perspective, which emphasized modernization through social-politicalchange, argued that to increase agricultural production, it was imperative tobroaden direct political participation in the policymaking process. This was analtogether more realistic assessment than the monetarist one.

A series of reports developed by research institutes linked to internationalagencies became the intellectual basis for the reformists argument for agrarianreform. For Chile, the Inter-American Committee for Agricultural Develop-ment (CIDA) elaborated the most inuential of these reports. CIDA argued thatin Chile there was an inverse relation between farm size and the value of produc-

tion or farm productivity (CIDA 1966, 149). Specically, this argument notedthat the high concentration of agricultural land in the hands of a landed elite notwilling or interested in investing was the cause of low agricultural productivity.In turn, insufcient productivity triggered scarcity thus causing price increasesand, ultimately, ination. The structuralists saw this mechanism as the root causefor the failure of government programmes to control ination and argued thatonly by restructuring rural relations of property could agriculture become moreproductive (Thomas 1996).

At the time, this argument was widely accepted as one of the characteristics of agriculture in developing countries. Thus, the CIDA study showed empirically

that small-sized farms had better productivity than the large estates. This argu-ment was crucial to those who thought thatlatifundia were the cause of agricul-tural backwardness and that a re-distributive land reform was the correct policyto carry forward. For example, the CIDA report showed that the sub-family andfamily farms (the Agrarian Middle Class and Subsistence Peasants respectively)had, on average, an estimated per arable hectare value of output twice as large asthe Multi-Family Farms (the Traditional Landed Class) (CIDA 1966, 150).

Later developments have shown that as an observable phenomenon theinverse relationship is essentially correct, but the explanation of the differencein productivity between farms of different sizes encompassed other causes than just qualitative and quantitative factor differences. Originally, it was argued that


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higher efciency and better land quality accounted for the greater productivity of small farms. More recently, others have argued that the sizeproductivity rela-tionship is historically specic to those formations where emerging capitalistforms of surplus extraction coexist with non-capitalist elements. In other words,

it is the desperate struggle of poor families of smallholders that overexploitthemselves for survival on below-subsistence plots of land in a relativelybackward agriculture (Dyer 1997, 146). The same author, drawing his conclusionsfrom Egypt and a detailed treatment of the extensive debate on the inverserelationship in India, states that as agriculture becomes more capitalistic, theinverse relation tends to disappear and capitalized farmers of medium-size farmswith access to new technology start to exhibit the best productivity. In Chile, asimilar process occurred after the agrarian reform was consolidated. Capitalizedfarmers and agro-industries started to buy the land parcels created by theagrarian reform from the peasant beneciaries on the best-irrigated lands to form

medium-size farms. This re-constituted capitalist class had the capital to accessand implement new technologies into the most dynamic sectors of agriculture,such as fruit, forestry and wine production. The transformed social relationsof production in conjunction with developments in the forces of production(technology) and the new land market permitted the capitalist accumulation thatstarted in the second half of the 1980s.

During the pre-reform period, the stagnation of the agricultural sectorinitiated after 1936 continued. Throughout the period, this sector was unable tofeed a growing but small population of less than 8 million inhabitants. This stateof affairs leads one to conclude that the sector was characterized by a structural

inexibility that pre-empted substantive change. These facts, high food importsand underutilization of land resources, provided a powerful argument to thesector of Chilean society that believed agricultural productivity would beincreased if land ownership were restructured.

THE LAND QUESTION AND THE CHILEAN TRANSITION TOAGRARIAN CAPITALISMFrom 1930 to 1964, Chilean landowners failed to become an agrarian bourgeoi-sie, which would have transformed the countryside to the sway of capitalist

modernization (Bauer 1975a, 170; Bengoa 1988, 274). At two conjunctures during the last decades of the nineteenth century and in the 1930s the historicalconditions were favourable for the development and growth of agrariancapitalism. At the end of the nineteenth century, instead of making the transition,landowners chose to reinforce the old system ofinquilinaje and became moreconservative, retrograde and defensive (see Bauer 1992; Bengoa 1988, 26778).The impact of the economic crisis of the 1930s triggered the slow erosion of latifundia and the continuing of an incomplete agrarian capitalist development(Bengoa 1990, 20916). Until the early 1960s, when the organized politicalaction of the urban middle class, thecampesinos, the proletariat and the stateapparatus struck the nal blow to the landed class in the form of the agrarian


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reform, the latifundia system remained as the backbone of agrarian productionand underpinned social property relations.

Rural workers provided landowners with the source of their privilegedsocial position and a captive electoral constituency that voted for their political

representatives in local and national elections, allowing them to be one of themost important political forces nationally. From the 1930s to the early 1960s,landowners consistently and successfully opposed fundamental transformationsin the countryside (Loveman 1976, xxviii). Their political actions, along withthe historical weight of their being the most visible and important social class inChile, allowed them to secure the non-intervention of the state in the country-side (Loveman 1976, xxviii).

The struggle for land and control in the countryside was fought in thepolitical arena. From the 1930s, an unstable coalition made a series of attemptsto undermine landowners socio-political power, utilizing diverse strategies,

including modest efforts for land redistribution and challenges to their control of rural labour. The coalitions instability was due to the highly contradictory interestsof its members formed by urban and industrial unions, the urban working class,class-oriented political parties of the left such as the Socialist and CommunistParties, and the middle class, and its political representatives such as theChristian Democrat Party. None of these challenges succeeded completely in itstask until the passage in 1967 of the laws authorizing the expropriation of agri-cultural estates and permitting rural unionization, but nonetheless, each signieda slow dilution and eroding of the landowners political base. A crucial changewas the electoral reforms of 1958 and 1962. The rst introduced the secret ballot,

which ended fraudulent electoral practices, and the second made the registrationto vote compulsory (Winn 2004, 94). These reforms permitted the political par-ties of the left to access the electoral constituencies in the countryside, which upto that point had remained captive to the political parties representing landown-ers interests (Bengoa 1988, 14). This shift in policy allowed in the countrysidethe intrusion of class-based political parties that sought to gain the vote of the rural population. As a consequence, in 1963 for the rst time in history, acandidate of the left was elected as a deputy to the lower house of Congress bya rural locality (Gmez 1986a, 43). Despite these attempts, as of the mid-1960slandowners monopoly of Chiles most productive land still provided them

with their source of socio-economic and political power.Numerous studies of contemporary Chile concede that from 1930 onward,the strategy of national industrialization reconciled the interests of wageworkersand the industrial bourgeoisie with landowners against rural labourers aroundthe necessity to keep food prices low. This was referred to as the dualist ap-proach. According to this approach, wageworkers and the industrial bourgeoisie(the modern classes) did not seek alliances with the poor rural classes to pressurelandowners for a structural transformation of the obsolete agricultural system.23Instead, they opted to keep the rural classes outside of the political system and to

23 Some authors describe it as pre-bourgeois, or neo-feudal, others refer to it as traditional.


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develop a fragile political agreement with landowners. Under this arrangement,landowners agreed to food-price controls by the state and, in return, they wereallowed to keep the system ofinquilinaje under their exclusive control, withthe resulting low labour costs and political power that the system thus granted

them (Cademrtori 1968; Ramrez Necochea 1956).24

Writing from the dualistapproach, Salazar and Pinto (1999, 105), for instance, note that after theeconomic crisis of the 1930s, landowners made it a priority to block effortsto modernize labour relations in the countryside, such as the introduction of unionization laws. They go on to point out that landowners entered tacit agree-ments with the urban sectors and agreed to agricultural price controls, especiallyon food. In turn, rural workers were explicitly left out of such legislation, andurban political forces agreed neither to politicize the countryside nor to pressurefor unionization.

Despite controls on agricultural prices, during downturns in economic cycles,

the political system had to rely on raising the nominal wages of the urban work-ing class to counterbalance the higher production costs of industrialists and tostrengthen the internal demand for domestic industrial products (Moulian 1997,817). This mechanism prevented more severe confrontations between the urbanworking class and the industrialists, but caused an inationary spiral that plaguedthe economic performance of the so-called populist state (Pinto 1962, 12570).On the other hand, the non-capitalist character of payments to the agriculturallabour force with its modality of perquisites, in-kind and land, and cash, leftthem, if not totally outside, at least on the margins of the market economy.These rural workers were conned to an economy of marginal subsistence. The

agrarian question had not been resolved.This line of analysis implicitly asserts that the progressive industrial bour-geoisie and the landed traditional oligarchy were two separate and opposinggroups of the Chilean propertied classes. Zeitlin and Ratcliff (1988), in a cogentand more convincing treatment, have attempted to question

Documents

Bellisario - Chilean PreAgrarian Peirod