Thus we encounter the paradox that the thesis put forward by Jensen and Meckling from the Midwest of America in the 1970s is broadly consistent with the Marxist view of the capitalist firm proposed in Western Europe by Karl Marx and Friedrich Engels in their Communist Manifesto of 1848. It is also consistent with the account of Ayn Rand, whose libertarian rants inspired yacht-owning Eddie Lampert, whom we shall meet again at the destruction of Sears, Roebuck and Co. Left and right often agree when both are wrong.

Intermission

Meanwhile, in Chile

The great misconception about the Chilean experiment is that it was an attempt to apply computer technology to the task of organizing a command economy. This is a handy myth for those who want to use it as an example for whatever argument they’re trying to make. Neoliberals and apologists for Pinochet and Friedman can pretend that it was a quixotic project with no more hope of working than the Soviet system; socialists and other apologists can pretend that it nearly worked. Neither is the case, and by now it ought to be obvious why — management cybernetics demonstrates quite clearly why a centrally planned economy doesn’t respect the law of requisite variety and can’t get the information it needs to function.

In the 1950s and ’60s, as developmental economics took root in Chile and Uruguay, favoring strong government regulation and an inward focus on industrialization as the path to maturing a developing economy, American multinationals who had made billions from their holdings in Chilean mines began to chafe against the growing state taxes and restrictions. The US government subsequently embarked on a quest to refashion Chile’s economic policies to be more favorable to American business interests, launching a program in 1956 called “the Chile Project” to educate a hundred Chilean students at the University of Chicago under the intellectual tutelage of American economist Milton Friedman.

Under Pinochet’s rule, Chile privatized nearly everything—education, health care, the pension system, even water. The strategy produced economic growth; it also fueled stunning inequality. Chile is among the most unequal countries in the world today, with nearly a quarter of the country’s income concentrated among a few powerful families in the 1 percent. Having never meaningfully industrialized, it also remains tethered to the extraction economy that makes it relevant to higher geopolitical powers.

And so, as the AI boom arrived, Chile would become ground zero for a new scale of extractivism, as the supplier of the industry’s insatiable appetite for raw resources, not just its copper and lithium in the north but also its land, water, and energy resources for a growing crop of data centers in the Santiago metropolitan region. In May 2024, the government proudly announced that the country would welcome twenty-eight new data centers, on top of its existing twenty-two, over the coming years, bringing in $2.6 billion of foreign investment.

In Brazil, a 2023 art exhibition coproduced by a Chilean university showed the vast chasm between the reality of Latin America’s rich Indigenous cultures and the woefully bereft depictions of them spit out by Midjourney and Stable Diffusion as primitive, technologically inept peoples.

In recent years, the Atacameños have mounted more and more resistance. They fly black flags on their houses to denounce the exploitation of their lands and their community. They’ve organized protests to physically block the roads that company buses and trucks must take to get to the mines. They’ve contracted lawyers to assert their legal rights as Indigenous peoples under international law, which protects their cultural and territorial sovereignty. As companies and the Chilean government have been forced to invite them to negotiations, central to Indigenous demands are the need for the government to conduct research into the health of the Atacama Desert’s ecosystems and to quantify the water loss and any irreparable damage.