The focal point in this thesis is the evolution and contributing factors to the development of income inequality. The paper analyses the effects of the structural changes during Allendes presidency and during Pinochets military rule influenced by The Chicago boys. By concentrating the study on how and why the development in Chile has had its far-reaching effect I found that the result was deeply cemented in the core of the Chilean structural organisation and people. The intervention of the state was condemned by the rightwing advocates during Allendes political reform program. Pinochet sought to transform the state into an autonomous force by depoliticising its elements and adapting to a free market which was ruled by an oligarchic hand. The implication of these two factors plays an important role in the historical process which defined the inequality trend during Pinochets dictatorship.