The explicit mission of the Concertacion governments after 1990 was to restore law and order to Chile through authentic democratic institutions, and to bring some degree of equity and social justice to a society that experienced a growing disparity between the very rich and desperately poor as a result of free-market policies. Although the center-left Concertacion represented a coalition of those sectors opposed to dictatorship, the movement never repudiated the neoliberal economic regime of the Pinochet government.
As President, Patricio Aylwin was mainly concerned with re-building democracy by strengthening institutions, reforming the constitution and electoral system, and limiting the influence of Pinochet and the military in political matters. Freedom of markets, trade, and investment remained primary for facilitating economic growth, despite the fact that market-centered growth might be proliferating the inequality the Concertacion government had committed to reduce. Aylwin "tried to soften the worst consequences of the market model by creating a series of programs to protect the poorest sectors of the society, with the goal of diminishing the numbers of those living in poverty."1 Under Aylwin, Chile's economy grew at an average of 7.7 percent annually, making it one of the most advanced economies in Latin America.
Economic growth continued under the second Concertacion president, Eduardo Frei, until the contagion caused by the Asian financial crisis stalled growth in 1998. The failure of Long Term Capital Mortgage (LTCM) in the United States in late 1998 put even more pressure on the export-oriented economy. As a result, the third Concertacion president Ricardo Lagos (the first Socialist to hold office since Salvador Allende) inherited a lagging economy. Despite his political pedigree, Lagos (like his counterparts Lula in Brazil and Kirchener in Argentina) continued to let the private sector operate, assuming that freer trade and liberal markets would revitalize the economy. Under Lagos, several new free trade agreements were signed giving Chile bilateral and multilateral rights with trading partners in Europe, Asia, and Latin America.2
1 Silvia Borzutzky and Lois Hecht Oppenheim, After Pinochet: The Chilean Road to Democracy and the Market, (University Press of Florida: Gainesville, 2006) p. xiv.
2 Ibid., p. 99.
Tuesday, December 16, 2008
Political Opposition: La Concertacion (1985-1990)
The economic crisis in 1982 dealt a huge blow to the legitimacy of Pinochet's political and economic regime. Sergio de Castro, one of the original "Chicago Boys," was fired from his post as economic minister the same year, and economic policy in Chile became immediately more practical, less doctrinaire. The banking and financial sectors were essentially "bailed out" by the most conservative political-economic regime Chileans had seen in over a half-century. In the domestic unrest that resulted from the crisis, Pinochet sacrificed the most dogmatic supporters of the market, and in the process bought time for his own regime and saved market capitalism in Chile.
The political opposition to the regime formed out of the 1982 upheavals and by 1988 had coalesced under the auspices of the Concertacion de Partidos por la Democracia (also known as Concertacion por el 'No'),or simply la Concertacion. The Concertacion was made up of the former Christian Democratic and Socialist political parties, together with numerous other minority parties and ex-Communisits. It was a center-left coalition whose initial stated goals were to bring institutional democracy back to Chile. The recuperation of democracy in Chile was faced by several challenges as the result of a sixteen-year dictatorship; first, the regime had been personalized by General Pinochet, then institutionalized by the 1980 plebiscite. Second, the economic aspects of the regime had attempted to restructure society according to the neoliberal model, and had largely succeeded despite the 1982 economic crisis.
In October of 1988, a plebiscite was held to determine the future of Chilean democracy. A 'yes' vote was a vote for General Augusto Pinochet to be president of the country for eight more years. A 'no' vote (this is the origin of "la Concertacion por el 'No') was a vote for free and fair elections of the president and parliament, and a transition back to democracy. 54.71 percent of the voting public cast their votes for 'No.' The transition back to democracy had begun, and the Concertacion was in a position to benefit. In the presidential elections of December 1989, former Christian Democrat Patricio Aylwin, candidate of la Concertacion, beat out the government candidates and was inaugurated as President in March 1990.
Pinochet preserved a certain amount of power in the new government by maintaining his post as commander-in-chief of the armed forces, and by having the power to appoint a certain percentage of the senators in parliament. Aylwin's presidency was thus defined by his battles to democratize the constitution and legitimize the rule of la Concertacion. Through a series of constitutional reforms, human rights commissions, and electoral reforms, Aylwin and the following president Christian Democrat Eduardo Frei attempted to diminish the totalitarian legacy of the Pinochet regime and create a more stable, and authentic, democratic system.
The political opposition to the regime formed out of the 1982 upheavals and by 1988 had coalesced under the auspices of the Concertacion de Partidos por la Democracia (also known as Concertacion por el 'No'),or simply la Concertacion. The Concertacion was made up of the former Christian Democratic and Socialist political parties, together with numerous other minority parties and ex-Communisits. It was a center-left coalition whose initial stated goals were to bring institutional democracy back to Chile. The recuperation of democracy in Chile was faced by several challenges as the result of a sixteen-year dictatorship; first, the regime had been personalized by General Pinochet, then institutionalized by the 1980 plebiscite. Second, the economic aspects of the regime had attempted to restructure society according to the neoliberal model, and had largely succeeded despite the 1982 economic crisis.
In October of 1988, a plebiscite was held to determine the future of Chilean democracy. A 'yes' vote was a vote for General Augusto Pinochet to be president of the country for eight more years. A 'no' vote (this is the origin of "la Concertacion por el 'No') was a vote for free and fair elections of the president and parliament, and a transition back to democracy. 54.71 percent of the voting public cast their votes for 'No.' The transition back to democracy had begun, and the Concertacion was in a position to benefit. In the presidential elections of December 1989, former Christian Democrat Patricio Aylwin, candidate of la Concertacion, beat out the government candidates and was inaugurated as President in March 1990.
Pinochet preserved a certain amount of power in the new government by maintaining his post as commander-in-chief of the armed forces, and by having the power to appoint a certain percentage of the senators in parliament. Aylwin's presidency was thus defined by his battles to democratize the constitution and legitimize the rule of la Concertacion. Through a series of constitutional reforms, human rights commissions, and electoral reforms, Aylwin and the following president Christian Democrat Eduardo Frei attempted to diminish the totalitarian legacy of the Pinochet regime and create a more stable, and authentic, democratic system.
Monday, December 15, 2008
Economy in Crisis (1981-1984)
The onset of global economic recession in 1981 became the first external challenge to Chile's engine of economic growth and development, and would profoundly impact the character of its political economy. The recession fundamentally challenged Sergio de Castro's theories on monetarism and the role of states and markets in national development. de Castro's economic theories were linked to highly idealistic and theoretical perceptions of the behavior of markets, which more often than not neglected to coincide with market realities. The Chicago Boys have been accused of "applying [a] simplistic... version of neoliberalism to a complex Chilean reality," a reality that included an economic program protected by a repressive dictatorship that was nonetheless not immune to public pressure or the temporalities of global economic relations.1
In 1982, the gross national product of Chile fell a dramatic 14 percent over the course of the year. GDP fell over 19 percent and the number of bankruptcies tripled. Workers, the one element of Chilean society that benefitted least from or, at worse case, were victimized by the "Chilean miracle," bore the brunt of the recession as unemployment rose to 30 percent. These rates of unemployment and recession were the worst since the time of the Great Depression.
The economic crisis touched off months of protests and demonstrations. The Pinochet regime, which had become institutionalized by a 1980 plebiscite, faced a serious threat to its monopoly of violence. Neoliberal elements in the regime were threatened by the crisis as well, but de Castro held firm, attempting to borrow Chile out of recession and refusing to inflate the currency, which might have possibly helped ease the pain of the economic crisis on the Chilean people. Whereas state-centered development was decried as the cause of the Latin Debt Crisis of 1982, neoliberalism was demonized in Chile as a progenitor of the recession. In the end, de Castro and his neoliberal, free-market policies were sacrificed to save the regime. Pinochet selected a new economic minister and aides who would enact a more pragmatic, market-oriented development model that would not exclude strategic use of state monetary and fiscal policies.
During the economic crisis, over 70% of the banks and financial institutions in Chile were nationalized to prevent bankruptcy and panic. Subsidies also grew in scope and amount to help protect the domestic economy from suffering the contagion of global markets. Whereas economic gains had been privatized during the primary years of the Pinochet regime, the losses were now being socialised at the expense of the taxpayers and Chilean workers. After the crisis, more industries, institutions, and infrastructure was in the hands of the Chilean state than ever during the Allende government; the irony should be abundantly clear, and serve as an example that is ever-more prescient in the context of the recent bail-outs in the US earlier this year.
1Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) p. 41.
In 1982, the gross national product of Chile fell a dramatic 14 percent over the course of the year. GDP fell over 19 percent and the number of bankruptcies tripled. Workers, the one element of Chilean society that benefitted least from or, at worse case, were victimized by the "Chilean miracle," bore the brunt of the recession as unemployment rose to 30 percent. These rates of unemployment and recession were the worst since the time of the Great Depression.
The economic crisis touched off months of protests and demonstrations. The Pinochet regime, which had become institutionalized by a 1980 plebiscite, faced a serious threat to its monopoly of violence. Neoliberal elements in the regime were threatened by the crisis as well, but de Castro held firm, attempting to borrow Chile out of recession and refusing to inflate the currency, which might have possibly helped ease the pain of the economic crisis on the Chilean people. Whereas state-centered development was decried as the cause of the Latin Debt Crisis of 1982, neoliberalism was demonized in Chile as a progenitor of the recession. In the end, de Castro and his neoliberal, free-market policies were sacrificed to save the regime. Pinochet selected a new economic minister and aides who would enact a more pragmatic, market-oriented development model that would not exclude strategic use of state monetary and fiscal policies.
During the economic crisis, over 70% of the banks and financial institutions in Chile were nationalized to prevent bankruptcy and panic. Subsidies also grew in scope and amount to help protect the domestic economy from suffering the contagion of global markets. Whereas economic gains had been privatized during the primary years of the Pinochet regime, the losses were now being socialised at the expense of the taxpayers and Chilean workers. After the crisis, more industries, institutions, and infrastructure was in the hands of the Chilean state than ever during the Allende government; the irony should be abundantly clear, and serve as an example that is ever-more prescient in the context of the recent bail-outs in the US earlier this year.
1Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) p. 41.
A New Consumer Society (1978-1982)
In the era of the "Chilean Miracle" of economic growth, neoliberal policies implemented under the Pinochet regime aimed at creating "economic" freedom for a new consumer society. Inflation was the first target of Sergio de Castro's monetarist policies - with the money supply stabilized and value of the Chilean peso on the rise, the growing middle class would have more purchasing power. The privatization of state assets overwhelmingly benefitted the middle- and upper-classes, particularly those with close ties to the military government or economic regime. An agriculture-based export economy developed, resulting in a period of deindustrialization that hurt much of the urban workforce. The mining industry was also scaled back, to prevent the fluctuations of the copper market from devastating the Chilean economy.
Cheap and easy credit flowed in to Chile, from the Bretton-Woods institutions, the United States, and other pro-market governments around the world. The availabilty of credit and influx of cheap luxury goods from the international markets facilitated the rise of a materially well-off middle class. Between 1973 and 1982, savings dried up while credit and borrowing increased. Foreign debt doubled between 1978-1981. The rising debt and trade imbalances were not a problem in a time of industrial expansion and economic takeoff, but should a recession hit, the consequences for Chile's economy, nailed as it was to the volatility of the market and uncomprising quality of de Castro's theories, could be disastrous.
Cheap and easy credit flowed in to Chile, from the Bretton-Woods institutions, the United States, and other pro-market governments around the world. The availabilty of credit and influx of cheap luxury goods from the international markets facilitated the rise of a materially well-off middle class. Between 1973 and 1982, savings dried up while credit and borrowing increased. Foreign debt doubled between 1978-1981. The rising debt and trade imbalances were not a problem in a time of industrial expansion and economic takeoff, but should a recession hit, the consequences for Chile's economy, nailed as it was to the volatility of the market and uncomprising quality of de Castro's theories, could be disastrous.
Thursday, December 11, 2008
The "Chilean Miracle": "Chicago Boys" and Neoliberalism Under Pinochet (1973-1980)
The ascendance of neoliberalism as a guiding political and economic force under the dictatorship of General Pinochet, compared with the democratic socialism of the previous Allende era, lends credence to the thesis that Latin America in the 20th century was a land of revolution and reaction. The military junta which took power on 11 September 1973 made the eradication of Marxism one of its express goals; neoliberalism and free-market ideology offered both an attractive alternative to state development and a chance to improve ties with the United States, a guiding economic force in Latin America at the time. The group of technocrats and economists that guided neoliberal policies during the early years of the Pinochet regime were known as the "Chicago Boys," so-called because they had studied economics at the University of Chicago, with renowned economists and theorists such as Milton Friedman and Arnold Harberger.1
The Chicago Boys, led by Sergio de Castro, shared common backgrounds with a political movement that was gaining prominence under Pinochet - the "Gremialistas."2 The Gremialist movement consisted of right-wing cadres of intellectuals who depsised Allende's socialist program and the partisanship of Chilean democracy. For the most part, both the Gremialists and Chicago Boys came from upper-class, right-wing families. Although one might conclude that the free-market ideology of the Chicago Boys meant they were without political interests, the links between the two groups were crucial to bringing the Chicago Boys to the attention of Pinochet and other leaders of the junta. Indeed, many scholars believe that the political and institutional systems set up by the Gremialists, along with the intense climate of fear and repression enacted by the miltary regime, made it possible for the marketeers to implement their neoliberal policies in Chile.3
The Chicago Boys began guiding Chile's economy in 1975 when de Castro was appointed economics minister. The first two years of the coup had been characterized by close competition between several groups for primacy. Fernando Leniz, the previous economics minister, had for most of 1974 guided Chile's economy gradually and pragmatically towards a more market-centered orientation. Other elements, some supported by Pinochet's own military aides, supported the creation of a stronger interventionist state. Pinochet, it seems, was more "intrigued bu the Chicago Boys' "revolutionary aims" to transform the economy... the general yearned to be identified with a historical act of national renewal."4
Sergio de Castro's economic program involved implementing a vision of neoliberalism taken to its logical and theoretical extremes. Fiscal and monetary policy became a weapon with which to combat food shortages, inflation of the money supply, and budget deficits which de Castro's adherents saw as evidence of Allende's bloated "welfare state." Budget deficits were eliminated by slashing social programs which overwhelmingly benefitted the poorest members of Chilean society. De Castro's solution to the most extreme cases of poverty was to target direct aid at families, instead of supporting tuition and mortgage subsidies or price controls on food and necessities.5 Trade, finance, and domestic markets were all freed from government regulation. Interestingly enough, the vital Chilean copper industry, which had been nationalized under Allende, remained public throughout the Pinochet regime, perhaps because it represented such a vital aspect of the country's export economy.
In the well-documented climate of political and social violence, economic freedom was not intended for labor. Union leaders and workers, most of whom had benefitted a great deal under Allende, were some of the first victims of the internal war that raged from the coup until 1978. Business-owners, capitalists, and the wealthy, on the other hand, profitted enormously from the policies implemented shortly after the coup. Elections, collective bargaining capacity, strikes, and other tools of the labor unions were banned outright, which meant that business would have less to deal with in the way of labor disputes. Prices, which were fixed under Allende, were freed, and in 1973 the price of bread rose by 1,000 percent for three months.6 Wages, on the other hand, were fixed at arbitrary rates much lower than those during Allende or any of the past democratically-elected regimes.
Early supporters of the political and economic regimes of Pinochet's Chile were quick to champion the "Chilean Miracle" of growth. By 1979, budget deficits had been eliminated and annual growth rates averaged 6.5% (an impressive number by any standard).7 Sergio de Castro's monetarist policies had tightened the money supply, lowering inflation and rasing levels of production. Unemployment had fallen since the coup, and the state became more streamlined: five years of land and industry sell-offs to private hands had left only 23 strategic industries (in mining, energy, and communications) in state hands.8 The appearance of the success of monetarist policies meant that de Castro and the other free-marketeers were free to "liberalize" (privatize) the economy and government in a more total sense. After 1979, policies were designed to privatize medical care, social security, and even labor relations.
1 Pamela Constable and Arturo Valensuela, A Nation of Enemies: Chile Under Pinochet (W. W. Norton and Co.: New York, 1991) p. 168.
2 Carlos Huneeus, "Technocrats and Politicians in an Authoritarian Regime. The ODEPLAN Boys and Gremialists in Pinochet's Chile," in Journal of Latin American Studies Vol. 32 No. 2 (May 2000) p. 462.
3 See ibid.
4 Constable and Valensuela, p. 171.
5 Huneeus, 466.
6Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) p. 22.
7 Constable and Valensuela, p. 189.
8 Ibid., 189.
The Chicago Boys, led by Sergio de Castro, shared common backgrounds with a political movement that was gaining prominence under Pinochet - the "Gremialistas."2 The Gremialist movement consisted of right-wing cadres of intellectuals who depsised Allende's socialist program and the partisanship of Chilean democracy. For the most part, both the Gremialists and Chicago Boys came from upper-class, right-wing families. Although one might conclude that the free-market ideology of the Chicago Boys meant they were without political interests, the links between the two groups were crucial to bringing the Chicago Boys to the attention of Pinochet and other leaders of the junta. Indeed, many scholars believe that the political and institutional systems set up by the Gremialists, along with the intense climate of fear and repression enacted by the miltary regime, made it possible for the marketeers to implement their neoliberal policies in Chile.3
The Chicago Boys began guiding Chile's economy in 1975 when de Castro was appointed economics minister. The first two years of the coup had been characterized by close competition between several groups for primacy. Fernando Leniz, the previous economics minister, had for most of 1974 guided Chile's economy gradually and pragmatically towards a more market-centered orientation. Other elements, some supported by Pinochet's own military aides, supported the creation of a stronger interventionist state. Pinochet, it seems, was more "intrigued bu the Chicago Boys' "revolutionary aims" to transform the economy... the general yearned to be identified with a historical act of national renewal."4
Sergio de Castro's economic program involved implementing a vision of neoliberalism taken to its logical and theoretical extremes. Fiscal and monetary policy became a weapon with which to combat food shortages, inflation of the money supply, and budget deficits which de Castro's adherents saw as evidence of Allende's bloated "welfare state." Budget deficits were eliminated by slashing social programs which overwhelmingly benefitted the poorest members of Chilean society. De Castro's solution to the most extreme cases of poverty was to target direct aid at families, instead of supporting tuition and mortgage subsidies or price controls on food and necessities.5 Trade, finance, and domestic markets were all freed from government regulation. Interestingly enough, the vital Chilean copper industry, which had been nationalized under Allende, remained public throughout the Pinochet regime, perhaps because it represented such a vital aspect of the country's export economy.
In the well-documented climate of political and social violence, economic freedom was not intended for labor. Union leaders and workers, most of whom had benefitted a great deal under Allende, were some of the first victims of the internal war that raged from the coup until 1978. Business-owners, capitalists, and the wealthy, on the other hand, profitted enormously from the policies implemented shortly after the coup. Elections, collective bargaining capacity, strikes, and other tools of the labor unions were banned outright, which meant that business would have less to deal with in the way of labor disputes. Prices, which were fixed under Allende, were freed, and in 1973 the price of bread rose by 1,000 percent for three months.6 Wages, on the other hand, were fixed at arbitrary rates much lower than those during Allende or any of the past democratically-elected regimes.
Early supporters of the political and economic regimes of Pinochet's Chile were quick to champion the "Chilean Miracle" of growth. By 1979, budget deficits had been eliminated and annual growth rates averaged 6.5% (an impressive number by any standard).7 Sergio de Castro's monetarist policies had tightened the money supply, lowering inflation and rasing levels of production. Unemployment had fallen since the coup, and the state became more streamlined: five years of land and industry sell-offs to private hands had left only 23 strategic industries (in mining, energy, and communications) in state hands.8 The appearance of the success of monetarist policies meant that de Castro and the other free-marketeers were free to "liberalize" (privatize) the economy and government in a more total sense. After 1979, policies were designed to privatize medical care, social security, and even labor relations.
1 Pamela Constable and Arturo Valensuela, A Nation of Enemies: Chile Under Pinochet (W. W. Norton and Co.: New York, 1991) p. 168.
2 Carlos Huneeus, "Technocrats and Politicians in an Authoritarian Regime. The ODEPLAN Boys and Gremialists in Pinochet's Chile," in Journal of Latin American Studies Vol. 32 No. 2 (May 2000) p. 462.
3 See ibid.
4 Constable and Valensuela, p. 171.
5 Huneeus, 466.
6Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) p. 22.
7 Constable and Valensuela, p. 189.
8 Ibid., 189.
Saturday, December 6, 2008
The Coup
from Patricio Guzman, LA BATALLA DE CHILE Part II: El Golpe del Estado (The Coup d'Etat)
On 11 September 1973, factions of the Chilean armed forces enacted a coup to topple the democratic regime of President Salvador Allende. Two jets belonging to the Chilean Air Force attacked La Moneda, the presidential palace in Santiago, along with army troops. Allende was killed in the ensuing battle. By the end of the day, a four-man military junta that included future dictator General Augusto Pinochet Ugarte was declared the new government of Chile. Its express purpose was to eradicate Marxism from Chilean society. The events of 11 September spelled the end for Allende's "Via Chilena," the peaceful and democratic road to socialism.
Allende's U.P. government based its legitimacy on the Chilean Constitution, which was highly respected by broad sections of Chilean society, including the military, which was sworn to protect it. For the Right, Allende lost this legitimacy upon enacting his socialist programs. A majority of the middle- and upper-class were horrified by what they saw as outright property theft by the government. Capital flight was rampant as investors domestic and foreign pulled money out of the country. Strikes by truckers and "El Teniente" mine workers caused shortages of goods, which facilitated the rise of a domestic black market. Goods that were still available had prices fixed too low by the government, resulting in budget deficits and high inflation. The United States government, which under President Nixon attempted to destabilize the Chilean economy, freezed lines of credit and exports to Chile. US aid likewise fell from $260.4 million in 1967 to only $3.8 million in 1973.1 The Chilean economy lacked sufficient capital to continue financing Allende's popular programs, and domestic production levels were to low to provide enough food and products. By September 1973 the economy was in turmoil, and socio-economic tensions widened political polarizations.
The failed coup attempt of June 1973 illustrated the acceptance military intervention was gaining among certain factions of the Right in opposing the Allende government. Right-wing demonstrations became increasingly more violent, as groups like Patria y Libertad (Homeland and Liberty) militarized and ultimately engaged in acts of urban terrorism to instill fear in the Left. It was in this climate of violence and tension that many Chileans, not just the extreme Right, began to see temporary military rule as a solution to the societal destabilization that had been taking place under democratic rule.
1 Pamela Constable and Arturo Valensuela, A Nation of Enemies: Chile Under Pinochet (W. W. Norton and Co.: New York, 1991) p. 26.
Wednesday, December 3, 2008
The Political Economy of LA VIA CHILENA
What about Allende's "Chilean road to socialism" so incensed the Right? The economic policies of U.P. were certainly more favorable to the lower- and working-classes and threatened the consolidation of wealth that occurred under the previous economic regimes. The failed coup of June 1973 illustrates the anxiety members of the middle-and upper-classes (as well as factions of the armed forces) felt at the furtherance of socialism in Chile.
Salvador Allende, a physician and adherent to Marxism, came to power legally and democratically and was determined to see to it that the building of socialism in Chile remained legal and democratic. In Allende's perception of political economy, capitalism and democracy were largely incompatible, since capitalism is essentially anti-egalitarian, facilitating the unequal distribution of wealth and capital. Socialism, state-fostered development, and progressive social spending instead would serve to deepen political democracy in Chile.
From 1970 to 1973, Allende and the U.P. coalition government nationalized Chile's huge and vital copper industry. The banking and financial systems, utilities, and the largest monopolies were also nationalized. Allende used executive decree powers to seize land and industries from capitalists who were unwilling to sell. A land reform program passed that converted over 4,000 estates into smaller agricultural collectives. Government-mandated price controls, wage increases, and improved social programs were developed to raise the standard of living for broad sections of the majority lower classes:
Under Allende, Chilean workers reached historic heights of income, status, and organization, and their representatives won unprecedented power and influence. The first year of Popular Unity government witnessed a 30 percent average rise in real wages, and a nearly 10 percent shift of national income from capital to labor.1
The U.P. government did little to change the codes of labor structurally, but its interpretation of the existing 1931 Labor Code greatly expanded the power and influence of labor unions. Union membership swelled, cordones industrials (industrial belts) formed to link workers to their craft or geographic location, and economic democracy was facilitated in neighborhoods and large factories.
The experience of workers at the Yarur textile mill illustrates the transition from an institutionalized, legal building of socialism to a more popular, perhaps extra-legal form that included popular seizures of industry. The homeless and unemployed began seizing undeveloped and unoccupied land. Allende's institutional socialism was bolstered by the desire of workers to take part in the "worker's government" from below.
It was the popular support of Allende's government that scared the Right. Assured every step of the way that the revolution would remain peaceful and democratic, factions of the upper- and middle-classes nevertheless feared that the popular participation in grassroots democracy might eventually lead to an "oligarchy of the people."
1 Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) 17.
Tuesday, December 2, 2008
The Insurrection of the Bourgeoisie
The political economy of the period spanning 1970-1973 was determined by the election of Salvador Allende Gossens as president of Chile and the popular victory of his coalition government, Unidad Popular (U.P.) Allende and other U. P. candidates were elected on a platform of building democratic socialism, which Allende termed "the Chilean road to socialism."1 The U.P.'s victory has largely been attributed to its populist appeal to broad sections of the working- and lower-middle classes.
Allende himself earned a plurality, not a majority, of the popular vote (36.3%). This signified from the beginning that Allende and his party did not have the political mandate of majority consensus to begin sprinting down the road to socialism. Indeed, Chile at the time was already bitterly divided politically. The politics of individual Chileans generally corresponded to their socio-economic status. The working class, students, and parts of the middle class generally supported U. P. candidates or other left/center-left parties, while most of the middle and upper classes supported the centrist Christian Democratic or right-wing Radical and National parties.
Patricio Guzman perfectly illustrates the degree and intensity of the left-right divide in the first part of his ground-breaking documentary film, THE BATTLE OF CHILE, which opens on the eve of the 1973 congressional elections. In a series of impromptu street interviews, Guzman asks relatively simple questions to gauge the degree of public support for Allende's coalition government. Responses vary drastically, from heartfelt support to indignation and anger. U. P. supporters espouse their pride in Allende and their elected government, and feel hopeful that they will gain a larger percentage of the popular vote than the 1970 and 1971 elections. Supporters of opposition candidates seem confident that U.P. will be defeated, but disturbingly appear to see in the other side their own perceptions of the political incarnations of evil.
Patricio Guzman, THE BATTLE OF CHILE Part I: The Insurrection of the Bourgeoisie
The final part of the film documents the outcome of the elections, where the U.P. captures 43% of the popular vote. The victory does not sit well with the opposition, which Guzman follows as it becomes increasingly more militant. The first part of the film closes with the failed coup attempt by a faction of the armed forces in June.
Patricio Guzman, THE BATTLE OF CHILE Part I: The Insurrection of the Bourgeoisie
The intensity of the political battles grew and street demonstrations and riots manifested, culminating in the failed coup attempt. The growing violence demonstrated the deep socio-economic and political divide between factions of the population, and lent credence to the thesis of the existence of "two Chiles."
1 Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) 16.
Allende himself earned a plurality, not a majority, of the popular vote (36.3%). This signified from the beginning that Allende and his party did not have the political mandate of majority consensus to begin sprinting down the road to socialism. Indeed, Chile at the time was already bitterly divided politically. The politics of individual Chileans generally corresponded to their socio-economic status. The working class, students, and parts of the middle class generally supported U. P. candidates or other left/center-left parties, while most of the middle and upper classes supported the centrist Christian Democratic or right-wing Radical and National parties.
Patricio Guzman perfectly illustrates the degree and intensity of the left-right divide in the first part of his ground-breaking documentary film, THE BATTLE OF CHILE, which opens on the eve of the 1973 congressional elections. In a series of impromptu street interviews, Guzman asks relatively simple questions to gauge the degree of public support for Allende's coalition government. Responses vary drastically, from heartfelt support to indignation and anger. U. P. supporters espouse their pride in Allende and their elected government, and feel hopeful that they will gain a larger percentage of the popular vote than the 1970 and 1971 elections. Supporters of opposition candidates seem confident that U.P. will be defeated, but disturbingly appear to see in the other side their own perceptions of the political incarnations of evil.
Patricio Guzman, THE BATTLE OF CHILE Part I: The Insurrection of the Bourgeoisie
The final part of the film documents the outcome of the elections, where the U.P. captures 43% of the popular vote. The victory does not sit well with the opposition, which Guzman follows as it becomes increasingly more militant. The first part of the film closes with the failed coup attempt by a faction of the armed forces in June.
Patricio Guzman, THE BATTLE OF CHILE Part I: The Insurrection of the Bourgeoisie
The intensity of the political battles grew and street demonstrations and riots manifested, culminating in the failed coup attempt. The growing violence demonstrated the deep socio-economic and political divide between factions of the population, and lent credence to the thesis of the existence of "two Chiles."
1 Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) 16.
Monday, December 1, 2008
Project Abstract
Introduction: One Policy for "Two Chiles"
Economists, political scientists, sociologists, historians, and academics of every stripe have made cogent observations about the Manichaean characteristics of contemporary political economy in Latin America. Political economist Javier Santiso, in his 2005 book LATIN AMERICA'S POLITICAL ECONOMY OF THE POSSIBLE: BEYOND 'GOOD REVOLUTIONARIES' AND FREE-MARKETEERS, makes a very convincing argument that the past half-decade in Latin America has indeed been marked by the figurative and literal battles between "good revolutionaries," i.e. socialists, communists, and Marxists of the Che Guevara/Fidel Castro or Salvador Allende persuasion, and free-market fundamentalists typified by the "Chicago boys" in Chile after the 1973 coup. Santiso's general thesis is that the polities of Latin America, exhausted by decades of partisan struggle and disillusioned by the evident failures of utopian ideologies, have now opted instead for democracy and a cautious embrace of market capitalism tempered by progressive social spending and pragmatic reform in a system Santiso terms economic "possibilism."1 If one is to believe Santiso's thesis, in no country in Latin America is this new style of political economy more evident (and arguably successful) than Chile.
Chile is the perfect nation with which to test Santiso's thesis because it has historically been the most highly-polarized and therefore electorally predictable nation in Latin America. Chilean society remains divided on socio-economic and political lines so much so that many have been prompted to note the presence of "two Chiles, one rich, the other poor."2
The purpose of this project is thus twofold; first, to identify the prevalent characteristics of Chile's political economy, from the election of Salvador Allende Gossens (a committed Marxist and scrupulous democrat) in 1970, through the dictatorial reign of General Augusto Pinochet Ugarte from 1973-1989, and finally to the earnest re-emergence of democracy during the Concertación (1989-Present). The second purpose is to attempt to respond to this question I will posit myself: if Chileans have indeed embraced market "possibilism" as Javier Santiso claims, what does this mean for the Left in Chile, which has historically defined itself in opposition to market capitalism? I feel that this question has particular relevance and resonance since the election of Socialist candidates Ricardo Lagos and Michele Bachelet to the presidency in 2000 and 2006, respectively. How have their policies confirmed or rejected Santiso's thesis?
1. Javier Santiso, Latin America's Political Economy of the Possible (MIT Press: Cambridge, 2005).
2. Peter Winn, Victims of the Chilean Miracle (Duke University Press: Durham, 2004) 1.
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