442 Politics of Latin America
policy and other barriers limit opportunity for social mobility for the majority who are not members of the relatively small middle class or the tightly knit circles of the rich, the well born, and the powerful.
Geography, natural resource endowments, and fierce armed resistance by the Araucanian people left their stamp on the social, political, and economic development of Chile. In colonial times, Chile was a far-flung outpost of the Spanish empire that began at the valley of the Acongagua river, considerably south of its contemporary northern border. Diego de Almagro was the first conquistador to arrive in 1536. Finding little mineral wealth he returned to Peru at the end of the year. A few years later Pedro de Valdivia set out to conquer Chile and founded numerous settlements, beginning with Santiago in 1541. Initially part of the viceroyalty of Peru, it later became an independent captaincy general.
In contrast to Peru, Bolivia, and Mexico the relative absence of gold and silver gave the social and economic structures of colonial Chile a decidedly agrarian foundation. Most Creole wealth, power, and privilege flowed from control over large estates: the encomienda and the hacienda. This system engendered a highly rigid class structure with harsh labor exploitation. These characteristics are key to understanding the nation's contemporary history.
During colonial times, seignorial land owners of Spanish descent lorded over an Indian and mestizo workforce. Under highly arbitrary working conditions, workers owed unlimited days of labor and service to the hacendado or encomendero in return for a plot of land from which to eke out a living. These were the origins of the institution of the inauilinaje, which, in its essential features, persists today. Inqiiilinos were sharecroppers who owed unrestricted fealty to the landlord, had to be at his beck and call, and worked his land for a small wage. Ranching, and later wheat farming, were the principal land uses. Shipments of tallow, hides, and small amounts of gold and copper to Peru constituted Chile's major exports. This was true even into the eighteenth century, when European ports opened to Spanish American trade.
In addition to the encomenderos (conquistadors and their descendants who received land grants and rights to the labor of the natives on it), public officials, the high clergy, and merchants rounded out the colonial elite. Constant warfare against the Mapuches and a frontier mentality heavily influenced the politics of these elites and their relationship to subordinate social groups. The Indian wars contributed to authoritarian politics, harsh repression, and rigid social stratification. Successful Araucanian resistance eliminated the prospect of stable landholdings south of the Bio-Bio River. In colonial times, land scarcity concentrated holdings in a relatively small, closely knit agrarian elite who continually faced a scarcity of Indian labor due to the Mapuche's fierce love of freedom. This led to the enslavement of Arau-canians defeated in battle or captured in slaving raids. These conditions