Economic Modernisation And Energy Consumption In Chile, 1844-1930

Abstract

This article aims to review the path of the Chilean economy in the
hundred years before 1930, using modern energy consumption as
an indicator. The hypothesis put forward here proposes that the
economic modernization ushered in by capitalism can be well understood by following the evolution of the curve of modern energy
consumption (coal, oil and hydroelectricity). In this sense, the
Chilean economy became modernized relatively early with regards
the Latin American context. The commodity lottery endowed Chile
with enough coal to cover a substantial part of consumption from
the 1840s, and the import capacity of this outward looking country
meant the remaining coal it required but did not produce, could be
imported (later it was oil and turbines for hydroelectricity that were
imported). Chile was an outstanding latecomer to energy modernization
in the coal era and this allowed it to take advantage of the
favourable cycles in the international economy of the 19th century.
This path of positive economic growth for Chile was interrupted
in 1913 with the outbreak of the First World War. The replacement
of coal with oil implied high opportunity costs, which the Chilean
economy was unable to reduce as successfully in the previous
energy transition from biomass to fossil energy.