Citizenship, Labour Markets, and Democratization: Chile and the Modern Sequence (review)

Louise Haagh argues that Chile's restored democracy failed to grant social citizenship to labor in the 1990s because of the constraints of the neoliberal economic model inherited from Pinochet's dictatorship (1973-90). This failure manifested itself in the inability to resurrect strong union rights or to implement training programs for workers that would enable them to take advantage of atomized market opportunities. As a result of continuing inhibitions on labor's freedom and preparation for mobility, "occupational citizenship" (p. xxiii)—the capacity to work and live productively—was realized only partially at best. Thus, T. H. Marshall's classic prediction that political citizenship would lead to social citizenship (Citizenship and Social Class, 1949) did not hold true. The recapture of democratic freedoms proved insufficient to secure major social rights and conquests.

This book concentrates on the first new democratic government, led by Patricio Aylwin (1990-94). Committed to reinstating democratic citizenship, his administration devoted more attention than any other to labor reforms and thus set the mold for the rest of the decade. Although he made some improvements for unions and workers, they remained far weaker than they had been prior to authoritarianism. The desired sweeping renovation of the labor legal code never occurred, and employers successfully resisted any fundamental changes in the restrictive labor regime inherited from Pinochet. Policy makers feared that entrepreneurs would upset the economy and destabilize the democratic transition. In a market-oriented system, the power of the capitalists far exceeded that of the state, let alone organized labor, especially in the aftermath of a right-wing dictatorship hostile to unions and their political party representatives. The eviscerated unions proved too weak to turn the tide. By the same token, their intimidated political allies in government proved reluctant to deviate from the market-oriented model.

In the flexible, fluid labor market of contemporary Chile, the need for the state to support labor institutions and policies that would help workers develop their skills and realize their potential became even greater. The inadequacy of national labor programs, however, meant that interpersonal relations within firms remained crucial to most workers. To examine those conditions, Haagh conducted an extensive survey of local manufacturing union leaders in 1992. She discovered that employers did little to provide workers with training or opportunities for advancement within or beyond the firm. In the factories, high labor turnover precluded investments in labor development. Consequently, workers remained handicapped in their ability to reap the supposed benefits of labor-market deregulation. Neither the public nor the private sector did enough to further human development.

Buttressed by reams of data, Haagh makes a convincing case that labor was doomed to receive few socioeconomic concessions as part of democratization. At times her prose and arguments are a bit opaque. Nevertheless, her exhaustive research and core contentions amply confirm what other scholars have concluded: Chile's combination of classical "liberal" politics and economics left little room for the empowerment of workers in the 1990s, as is predictable in an economic system where unions and the state were discouraged from interfering with market mechanisms. As she suggests, other new democracies in the age of neoliberalism are likely to encounter similar rigidities and shortcomings.