Research on import-substitution industrialisation (ISI) in Latin America continues to portray it as an aberration of state-led development inevitably condemned to failure and held up as an example of the mistakes scholars and policymakers must avoid. In this thesis, however, I show that this misunderstanding of a “model” that lasted several decades and brought gains to a wide array of socioeconomic actors is due to an inability of leading approaches – those that focus on institutions, ideas, and class – to understand the role of labour. Drawing on detailed primary and secondary empirical evidence on leading sectors in Chile and Argentina, my central claim is that workers determined the trajectories of ISI by contesting the effect of strategies pursued by firms and the state within the workplace. I show that ISI was no aberration, but that it comprised an intrinsically purposive set of strategies aimed at ameliorating or suppressing the real and potential resistance mobilised by workers. Through a novel theoretical synthesis, bringing into IPE innovations from critical labour relations theory, Marxist development studies, institutional theories of ideas, and Latin American labour history, I overcome the predominant perspective on labour that conceptualises workers' as inherently disruptive, but institutionally far weaker than other societal actors. The problem with such a view, I argue, is not that labour is absent, but rather that the way in which it has been understood leaves workers with little or no influence over a process that simply unfolded beyond their control. In this thesis, the result is a counter-narrative on the history of ISI in Chile and Argentina, with the relationship between measures aimed at establishing control over labour and the resistance this engendered firmly at the fore.