It is often said that economic theories are born from the crises they attempt to solve. The Keynesian model is no exception; it emerged from the ashes of the 1929 Great Depression, fundamentally challenging the notion that the free market is self-correcting. Before John Maynard Keynes, the prevailing belief was that markets would spontaneously generate full employment. Keynes, however, argued that this "self-equilibrium" was a fallacy. Instead, he proposed that state intervention—through public policy and monetary regulation—is essential to stabilize employment and demand (Jahan et al., 2014).
Keynesianism is built on three central pillars: the complexity of aggregate demand, the interdependence of prices and labor, and the idea that changes in aggregate demand impact production and employment far more than they do price levels (BBVA, 2020).
But what happens when these ideas are applied within a system that diametrically opposes them? This essay examines three measures implemented by the Chilean government during the COVID-19 pandemic. By analyzing these interventions, we explore a central sociological tension: can Keynesian measures truly exist within a neoliberal framework, or are they merely temporary fixes to keep "savage capitalism" afloat?
Chile is a textbook example of a neoliberal economy. Yet, faced with the economic paralysis of the pandemic, the state was forced to intervene. As President Sebastián Piñera announced an emergency economic plan of US$11.750 million, we witnessed a series of measures that, while framed within a capitalist logic, borrowed heavily from the Keynesian playbook (Ministerio de EconomĂa, Fomento y Turismo, 2020).
The government injected US$500 million into Banco Estado to facilitate financing for individuals and small and medium-sized enterprises (SMEs). This is a classic Keynesian maneuver: lowering interest rates to encourage debt-driven investment. The logic is clear—if money is cheaper to access, production increases, effectively stimulating demand and theoretically "solving" the immediate unemployment crisis caused by the contraction of sales.
The "Bono Clase Media" (Middle-Class Bonus) aimed to provide up to $500,000 CLP (500 USD aprox) to workers who saw their incomes drop by 30% or more. While marketed as humanitarian relief, sociologically, this is a clear attempt to regulate the market during a crisis. By injecting liquidity directly into families, the state sought to maintain a baseline level of consumption, thereby preserving the "effective demand" necessary for the market to function (TesorerĂa General de la RepĂşblica, n.d.).
Perhaps the most striking case is the approval of the withdrawal of 10% of pension funds. In the Keynesian view, giving people extra money to spend "boosts demand." However, in the Chilean context, this was a desperate patch for a deeper structural problem. The state essentially allowed citizens to use their own future savings—money already tied up in massive private investments—to survive the present. This did not change the power structure; it merely used private capital to prevent a complete collapse of social stability (Hidalgo, 2020).
-BBVA. (2020, May 20). ¿Qué es el modelo de Keynes o keynesiano? [What is the Keynesian model?]. BBVA. https://www.bbva.com/es/keynes-para-dummies-de-que-se-habla-cuando-se-habla-del-modelo-keynesiano/
-Hidalgo, D. C. (2020, March 23). Keynes contra el coronavirus [Keynes against the coronavirus]. The Conversation. https://theconversation.com/keynes-contra-el-coronavirus-134303
-Jahan, S., Saber, A., & Papageorgiou, C. (2014). ÂżQuĂ© es la economĂa keynesiana? [What is Keynesian economics?]. VUELTA A LO ESENCIAL [Back to Basics], 53-54. https://www.imf.org/external/pubs/ft/fandd/spa/2014/09/pdf/basics.pdf
-Ministerio de EconomĂa, Fomento y Turismo. (2020, March 19). Presidente presenta plan econĂłmico de emergencia por US$11.750 millones para proteger el empleo y a las pymes: “Necesitamos unidad” [President presents US$11.750 billion emergency economic plan to protect employment and SMEs: "We need unity"]. https://www.economia.gob.cl/2020/03/19/presidente-presenta-plan-economico-de-emergencia-por-us11-750-millones-para-proteger-el-empleo-y-a-las-pymes-necesitamos-unidad/
-TesorerĂa General de la RepĂşblica. (n.d.). Beneficio Bono Clase Media [Middle Class Bonus Benefit]. https://www.tgr.cl/beneficio-bono-clase-media/
This text revisits an early stage of my academic formation. It was originally written for an undergraduate Economics course, but I have chosen to publish this brief synthesis because it captures a turning point in my intellectual development: the moment when economic phenomena began to appear not merely as technical variables, but as social processes shaped by institutions, power relations, and historical context. Rather than presenting it as a definitive argument, I see it as the starting point of a line of inquiry that continues to inform my sociological work.
For me, this analysis is a vital reminder that understanding social order is fundamentally an interpretive craft, not an exact science. We are not dealing with fixed, predictable equations or hard empirical constants; human and non-human networks are far too precarious, ambivalent, and shifting for that kind of mechanical reductionism. The categories explored here are not absolute truths to be proven, but fluid analytical lenses designed to make the invisible work of maintenance visible. This piece reflects my personal perception of what our inquiry should be: a deeply situated exercise in mapping dependencies, exposing structural asymmetries, and recognizing that we are never detached observers, but thoroughly entangled participants in a world that requires constant repair to exist.