Chile before Allende

Chile was, and still is, a neo-colonial vassal state of the United States. Industry was monopolised and controlled by US multinationals, which gained, between 1953 and 1968, a 15-fold return on their investment. In 1970, one day's US profit would have paid the average Chilean daily wage to one million workers. A total of one billion US dollars was invested in the country. The copper mines (accounting for 21% of the world's proven copper reserves) were owned by US firms and most of the copper exports went to the US. Chile had very little else it could export.

Agriculture and land ownership was still on a pre-capitalist basis. Almost all the land was owned by a mere 2% of the population. Chile had to import food, and this made up 25% of the entire imports bill.

The country also had a severe balance of payments deficit, with the United States providing most of the loan and "aid" assistance. The possibility of cutting imports was not considered practical because a loss of machinery and spare parts would have throttled local industrial development. When the price of copper fell after the Korean war, inflation surged up to around 80% and stayed there.