Chile: a model to follow
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Version 0 of 1. Forty years ago the furies descended upon Latin America. In Chile, as elsewhere, their aim was to erase any trace of the utopian dreams and aspirations entertained by the young, the leftist parties, and the indigenous, feminist and progressive Christian social movements that formed the backbone of Salvador Allende's Popular Unity coalition and brought him to power in 1970. Those behind the September coup in Chile opted for the most extreme forms of violence – torture, disappearance, bombings, targeted assassinations, widespread espionage, confinement in prison camps – and created a transcontinental network of surveillance and crime. The new economic and political model that would reign over Latin American countries, and be exported globally in years to come, was built on the basis of such violence. Although Milton Friedman has long been credited as the lone father of Chile's neoliberal model, the story that is beginning to emerge may be different and darker. The post-coup plan originated in the work of a small and secretive group of young conservatives connected to the nationalist right and the navy, inspired by ultra-Catholic fundamentalism and Franco's Spain rather than just Chicago. The nationalists represented traditional land-owning interests, bankers and local beneficiaries of foreign businesses. Chief among them was Agustín Edwards Eastman, head of the Edwards banking family. When it became apparent that the Chilean people might "irresponsibly" elect socialist Allende, as Henry Kissinger put it, Edwards travelled to Washington. Through his US business friends he contacted Kissinger and alerted the White House that Chile might "go communist". Edwards was also part of an exclusive group that included businessmen, media owners, navy officers, nationalist politicians and young conservatives such as Sergio de Castro, one of the so-called "Chicago Boys". Castro and others, including young ideologue Jaime Guzmán, would become the architects of Chile's model. They didn't need to wait for Friedman. Their sources can be found among the Spanish far-right ideologues that the historian Paul Preston called "theorists of extermination". Guzmán had been mentored by the theologian Osvaldo Lira, who championed the extremist ideas of the Carlist ideologue Juan Vázquez de Mella in Latin America. Chief among such ideas was the notion of a Jewish-Muslim-masonic-Bolshevik plot against Christendom. But there was also the idea that having such heretics in charge of the state would undermine the liberties of professional guilds and private corporations guaranteed in law. The attack against God-given law, ordered by the state, triggered a sacred duty to overthrow the government. In its place, they would install a model in which the unbridled liberties of private corporations and guilds would determine law and people's consent, not the other way around. The result would be a minimal state, limited by the market. Chile's supposedly miraculous economic model and its "protected democracy" – the name given by Pinochet's advisers to the political model incarnated in the 1980 constitution, a precursor of the current model of democracy plus draconian limits to civil liberties that have emerged in the UK and the US after 9/11 – is still in force <em>pace </em>some minor amendments, yet neither were inspired by liberal economics. They originated in fundamentalist theology. That model, admired by Thatcherites and Reaganites the world over, was recently suggested to the Egyptian military by the Wall Street Journal. In Chile, however, its results are being questioned by the youth and an important sector of the working and middle classes. Chile's GDP did grow to a yearly 6%, unemployment is relatively low and investment high. First among South American countries, Chile entered the exclusive OECD club in 2010. But household incomes fell, as is happening in Britain, and are now among the lowest in the OECD countries. Consequently, householders' combined debt skyrocketed. By 2012 it stood at a dangerous 60% of their income. Only about a third of Chileans believe they'll be able to afford a house or pay a mortgage at reasonable rates. Unsurprisingly, the finance sector has grown 50 times the size of the "real" economy. It controls the flimsy Chilean welfare sector. Edwards' successors came out on top. Who else won? A cable sent by the chemical company Hoechst Chile to its Frankfurt headquarters described the 1973 coup as "an action prepared to the last detail. Brilliantly executed … Allende's government has encountered the end it deserved … In the future Chile will be an ever more interesting market for our products." Enough said. The reason for the pharmaceuticals' involvement seems obscure until we remember that Allende was, first of all, a physician who firmly believed in public universal healthcare. Together with other scientists-turned-activists, he stood up to a private health sector backed by powerful multinationals. He fought to guarantee the employment of healthcare staff in the public sector so that it could provide universal access, irrespective of income, and end the shady practices of professional medical guilds controlled by the private sector and transnational pharmaceuticals. It has been said that economic irresponsibility and disregard for the rule of law on the part of Allende's government provoked the coup or made it predictable. This argument echoes the religious fundamentalism of the 1970s young conservatives. It's also wrong. Before Allende had the chance to mismanage the economy or show disregard for the law, as his enemies argue to this day, the destiny of Chilean democracy had been decided by a small cadre of people in Chile, Brazil's dictatorship – which fought this "war by proxy" for the Nixon administration – and the US. The decision was made in secrecy, but it was eagerly awaited by many Chileans among the upper and middle classes, and even a sector of the mining workers, who bought into the fearmongering doublespeak of Guzmán and the nationalists. The latter thinly but successfully disguised their fundamentalist violent creed in the language of protection of tradition, family and property. While the tanks rolled, many looked the other way. And yet, as health and education were privatised, millions of Chileans, their sons and daughters, lost out. It's them, a new generation, which has rehabilitated Allende's legacy. His concerns over indigenous agrarian demands, health and education echo not only the current politics of Chile's youth and Bolivia or Ecuador – consider also the peasant protests that recently rocked Colombian conservative politics to the core. The 2011 Chilean student protesters against education's privatisation have, in 2013, become congressional candidates. They stand as the true model for today's English students, Spanish indignados and the desperate Greek. Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |