Capitalist Dreams: Chile's Response to Nineteenth-Century World Copper Competition

Abstract

Hernando de Soto's recent book,The Other Path, argues that capitalism has not failed in Peru and Latin America, rather, it has not been tried. Basing his case on the observation that Latin American economies are strangled by arcane policies and regulations, de Soto goes on to bolster his point by providing a fresh and powerful look at the undeniable reality of the large “informal,” and thus unregulated, economic sector in Peru. As with any such generalization, how strongly does its explanatory value remain when measured against specific events, over long periods of time? This article seeks just such a perspective. It examines the impact of such regulations as mining codes and mineral taxation on the efforts of Chilean copper entrepreneurs to compete worldwide in the nineteenth century. De Soto may be correct in his contention that today's highly regulated economies keep Latin Americans from being as productive as their resources justify, but to extend this view into the past ignores earlier productive accomplishments, as well as significant efforts at different times and places to cast off Latin America's mercantile legacy.