The Spaniards who settled in the pleasant Central Valley of what is now Chile beginning in the late sixteenth century found no valuable lodes of gold or silver to exploit, and therefore saw no need for employing masses of indigenous forced laborers such as those who were put to work in the Andean highlands and in the mines of Mexico. Although copper mining became an valuable part of the late colonial economy, even the most successful of operations employed no more than a few salaried workers. Settlers took to developing the agricultural potential of the land, which, given Chile's climate, was well suited for growing the crops they knew from the Old World. This seasonal form of farming was different from that practiced in semitropical plantations in that it required few workers except during the harvest.

The Chileans are racially a mixture of Europeans and American Indians. The first crossbreeding occurred during the 16th and 17th centuries between the indigenous tribes, including the Atacameños, Diaguitas, Picunches, Araucanians, Huilliches, Pehuenches, and Cuncos, and the conquistadores from Spain. Basque families who migrated to Chile in the 18th century vitalized the economy and joined the old Castilian aristocracy to become the political elite that still dominates the nation. Few blacks were brought to Chile as slaves during colonial times because a tropical plantation economy, common in much of the New World, did not develop. After freedom and during the republican era, English, Italian, and French merchants accomplished themselves in the growing cities of Chile and incidentally joined the political or economic elites of the nation. The official promotement of German and Swiss settlement in the Lake District during the second half of the 19th century was exceptional. The censuses of the late 19th century showed that foreigners—principally Spaniards, Argentines, French, Germans, and Italians—formed scarcely more than 1.2 % of the total population. Small numbers of displaced eastern European Jews and Christian Syrians and Palestinians moving the Ottoman Empire arrived in Chile. Today they spearhead financial and small manufacturing operations.