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.
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