tulio notes, remarking on the “Chilean economic miracle” under Pinochet.
I have a Venezuelan…he fled Venezuela and now lives in Chile, a more free market country, and btw the most prosperous in Latin America. And Pinochet had a lot to do with Chile’s prosperity, even though he was a bastard. If it weren’t for him, it would be another 3rd world Latin American country. He turned that country’s economy around.
First of all, Chile is not the most prosperous in Latin America. Mexico is quite a bit wealthier than Chile. Mexico seem like a First World country to you? 27% of the population doesn’t even have sewage treatment.
Second, it’s debatable whether Chile is more free market than Venezuela. Chile has long had a deep social democracy in place, and Venezuela has never had crap. Much of Chavez so-called evil socialism is just him trying to put the basics of a social democratic system and a civilizational infrastructure in place where there never was one – he’s spending money on education, medical care, roads, literacy, land reform, food subsidies, housing, electrification, plumbing, sewage, water, etc.
At least in Venezuela, you have a President who is committed to the entire low income and working class portion of the population. There’s no need for him to care about, work for or help the well-off, since they’re already sitting pretty as it is.
In Chile, the low-income and working class population pretty much get a gigantic Fuck You. The state only works for the 1/3 or so upper middle class, and everyone else can buzz off. I imagine this is still the case under Bachelet, but I’m not sure.
Pinochet had nothing whatsoever to do with Chile’s “prosperity.” Truth is he ruined that country. His radical libertarianism from the Chicago School quickly caused one of the worst depressions in history. In order to climb out of it, he had to repudiate neoliberal orthodoxy and involve the state, government spending and labor in his economic project (Keynesianism).
Even that more statist project did not do well. All of that economic growth under that Pinochet clown was just the climback from the damned Depression that he caused at the start! Big deal! By the end of his term, in 1989, Chile’s GDP finally matched of Allende, the socialist whom he replaced. IOW, 16 years of total economic flatlining and failure.
To illustrate, let me give some hypothetical figures, since I don’t know the real figures. Say per capita income was $8,000/year when Allende left office. Pinochet so nuked the economy that in a few years, PCI was something like $2,000/year. From 1978-1989, there was huge economic growth, true, but they were just climbing out the rut. By 1989, his last year in office, PCI finally made it up back to $8,000 year again. Talk about spinning your wheels.
The upper classes did much better though under Pinochet, maybe the top 1/3. Everyone else got royally screwed. Average wages declined by 35% under Pinochet (!). He declared total war on unions and the working class, and workers got screwed, rude and tatooed.
Chile is doing ok now with a much more state-interventionist economic scheme under a Socialist President, Bachelet. Much of Chile’s relatively good human development figures are due to its deep socialist and social democratic, especially health care and education: Chile has been a pretty socialist state for a long time now. Chile has a decent national health care system, and that’s the reason for its commendable health figures. Malnutrition figures are also very low; Chile does a good job of feeding its people.
Education is another matter. About 1/2 of the public schools are literally falling apart. I mean literally, as in collapsing. There’s no agenda to fix them, because the pricks who run the country all send their kids to private schools (this is how it works all over Latin America).
It’s no surprise tulio has been brainwashed about Pinochet. The US media has told nothing but lies about the guy.
The gap between the rich and the poor in Chile is absolutely insane, and the racism and class hatred is rife and toxic. The light-skinned well to do live in gated compounds or with high walls around their sumptuous homes, often with barbed wire and guard dogs. They live that way because of the out of control crime rate, especially theft, by the darker-skinned lower classes. The crime rate is a symptom of the insane inequality and class hatred in that place. Chile is just another typical Latin American shithole, a little fancier than the rest of them.
I’ve known some Chileans; their contempt for poor and working class people was palpable, and they were openly and outrageously racist against Chilean Indians. And these people were supposedly “leftwingers.”
Update: In the comments section, the brilliant James Schipper adds some good hard figures to the argument. The rich-poor gap he talks about can be represented as a Gini coefficient.
The main thing about the Chile was that the upper classes, maybe the top 1/3 or so, totally cleaned up under Pinochet. Pinochet merely dramatically shifted income from the bottom 2/3 of the population to the to top 1/3, so obviously he’s wildly popular among the well to do in Latin America. As a socialist, I’m not supposed to support Reverse Robin Hood policies. Any socialist doing that may as well hang it up and just become a Republican. Or join the Democratic Leadership Committee (DLC), same thing.
It’s fascinating that neoliberals and libertarians continue to rave about this fake “miracle”. Either they’re lying, or they’re idiots.
Some people never learn.
Excellent post! In the early 1980s, the unemployment rate in Chile reached 25%. Pinochet was forced to nationalize the entire banking sector and reverse many of his policies.The Chilean economic experiment consisted of total liberalization of imports and capital inflows while maintaining a fixed exchange rate. This led to a massive trade deficit financed by money borrowed from abroad. Much of the imports consisted of consumption goods for the richest 1/3. In other words, Chile was going into debt in order to finance upper-class consumption.
Pinochet also privatized pensions, but guess what, the military kept their government pension plan.
According to the CIA World Factbook, the richest 10% of Chilean households have 41.7% of national income while the poorest 10% have 1.6%, which is a ratio of 26:1. Bear in mind that in poor households there are on average more people.
It seems that any government that pursues neoliberal economic policies will be praised by MSM in the West while any government that does the opposite will be excoriated.