The Economy of Terror: State Power and Austerity in Chile, 1973–84

This paper examines the transition to neoliberalism in Pinochet’s Chile and its direct relationship to the expansion of the state’s repressive power in pursuit of selective economic austerity and the depoliticization of society. It analyzes the shift from state-engineered austerity in the 1970s to austerity driven by the economic collapse of the early 1980s and related changes in state repressive power from the declaration of the first state of siege (imposed in 1973) to the second state of siege (imposed in 1984).