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Expropriation Without Compensation: Copper in Chile, 1970–1973

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  • Sebastian Edwards

Abstract

In this essay, I analyse the nationalisation of large copper mines during Salvador Allende's socialist government in Chile in the 1970s. This is one of the earliest cases ‘nationalization without compensation’. Chile's legal argument was based on the novel idea that ‘adequate’ payment should be calculated as book value minus ‘excessive profits’. In turn, excessive profits were defined, for every year, as profits above 12% of book value. I analyse the economic arguments that led to nationalisation, and I deconstruct and critically evaluate the methodology used to calculate ‘excessive profits’ and ‘adequate compensation’. I analyse the US and multinationals' response to Chile's nationalisation policies. JEL Classification: B22, E52, E58, F31, F33.

Suggested Citation

  • Sebastian Edwards, 2025. "Expropriation Without Compensation: Copper in Chile, 1970–1973," The World Economy, Wiley Blackwell, vol. 48(6), pages 1237-1250, June.
    • Handle: RePEc:bla:worlde:v:48:y:2025:i:6:p:1237-1250
    DOI: 10.1111/twec.13697
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    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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