Asked by Latinobarómetro, another pollster, if they had any confidence in private enterprise, just 32% said yes, the second-lowest rate among 18 countries
LAST year ended triumphantly for Andrónico Luksic, head of Chile’s richest family. On December 23rd he won a slander suit against a politician who had called him a “criminal” and “a son of a whore”. But his sense of vindication was clouded by pain. Four days earlier, as he left the courthouse, a mob, angry about a hydroelectric project in which he had invested, threw stones at him. One struck him on the head; police whisked him away.
Plutocrats are unpopular in lots of places, but Chileans seem to regard theirs with particular suspicion. MORI, a polling firm, asked Chileans in 2015 to choose which among five power centres had the most clout: 59% chose businessmen over the government, the presidency, congress and the media. Asked by Latinobarómetro, another pollster, if they had any confidence in private enterprise, just 32% said yes, the second-lowest rate among 18 countries. Chileans often say that seven families “own” the country. Together, their wealth is the equivalent of 17% of GDP. The Luksics alone are worth $14bn, equivalent to about 6% of GDP, according to Forbes.
Chile is in many ways the most modern country in South America. Its institutions function reasonably well, its educational standards are among the highest and its levels of crime and corruption are among the lowest. Yet that has not brought equality. Although poverty has fallen sharply, income distribution is more skewed in Chile than in any other member of the OECD, a club of mainly rich countries (though not unusually so for Latin America). Just 5% of Chileans regard the distribution of income as “fair” or “very fair”, the lowest share in Latin America, says Latinobarómetro. “It’s precisely because Chileans can see how wealthy their country is—from the Porsches and Maseratis in the streets of some areas—that they’re so angry about how that wealth is shared out,” says Marta Lagos of Latinobarómetro.
Mr Luksic, the grandson of a Croatian immigrant and a Bolivian heiress who settled in Antofagasta a century ago, is typical of his class. He attended The Grange, a posh private school in Santiago. The Luksics made their first fortune from mining, then expanded into banking, shipping, the media, drinks, energy and manufacturing. Antofagasta plc is listed on London’s stock exchange. Other businesses are grouped into Quiñenco, a family holding company, of which Mr Luksic is chairman.
Breadth and heft attract hostility. Environmentalists say his mining and energy projects scar the landscape. Many Chileans think Mr Luksic’s companies, along with all Chilean business, should pay higher taxes. Journalists say he wields undue influence. His bank made a large loan to a company owned by the Chilean president’s daughter-in-law after he met with her; he later apologised. Such connections feed Chileans’ suspicions that the big decisions are made by a clique over a bottle of Carmenère or a game of golf.
A series of collusion cases, often involving companies in sectors with little competition, give such suspicions weight. Firms were caught fixing prices and setting market quotas in such products as pharmaceuticals, poultry, and toilet paper. The three price-fixing pharmacy chains control 90% of the country’s drugstore business; the chicken cheats sell 93% of the poultry.
A low point for the reputation of business came a week before Mr Luksic’s victory in court. At the Christmas dinner of Asexma, a business association, its chairman gave the economy minister an inflatable sex doll, which he suggested might “stimulate the economy”. Photographs of middle-aged men in suits chortling with a naked doll confirmed Chileans’ view of the business elite as a boys’ club out of touch with modern norms.
Though Mr Luksic thinks he has been unfairly maligned, he admits that he and his sort have a problem. After the politician defamed him last April he answered with a YouTube video, an unusual tactic for someone who usually shuns the limelight. While denouncing his accuser he also confessed that “we’ve made mistakes…. We have to be much more rigorous in how we behave.” He was speaking about his business, but it sounded like a mea culpa from Chilean business at large.