The Truth About the Fake “Chilean Miracle”

Tulio writes: Wait, I thought you’re always complaining about how right-wing Chile is??

It isn’t really rightwing. But it isn’t really leftwing either. It’s just another massively screwed up Latin American craphole where nothing much works.

These are all very screwed up countries. Chile has one of the worst inequality ratios on Earth. It is often held up as some rightwing economics success story. However, it has been ruled by formally socialist parties for a good decade now. But they may be limited in what they can do. Chile had a good social democracy set up even before Allende came in, and that is how you get the good health figures.

Still it is a stupid, lousy country where rightwing demonstrations are attacked by leftwingers, and leftwing demonstrations are attacked by rightwingers. Fascist and Communist/socialist mobs regularly engage in wild street battles.

The rich live in the hills in huge houses with barbed wire, high walls, dogs and guard dogs. But every night the poor creep up from the poor neighborhoods below to steal from the rich.

The state for whatever reason has not funded public schools well in a long time, and most of them are falling apart. Students stage protest-riots a couple of times a month, and they are often violent. The South is inhabited by Indians who despise the government, live in serious poverty and are in continuous revolt.

The Pinochet regime that the Right cheers so much simply engaged in a mass transfer of money from the bottom 2/3 of the population to the top 1/3 of the population. The vast majority of workers lost out bad. The army is very rightwing and still wields tremendous power, and the Right is still a huge movement, as radical, violent and fascist as they were under Pinochet. The Left was armed in the recent past, even after Pinochet resigned. They tried to kill Pinochet several times and once almost succeeded via an ambush in a mountain pass that killed and injured many of his entourage but left Pinochet unscathed.

If Chile is the Right’s idea of a dream state, the Right is out of their mind.

This is your Rightwing Paradise, your Rightwing Dream State.

Guess what? It’s a craphole.

In recent years, a large section of the population has gone over to a sort of free market worship – Libertarian – radical laissez faire philosophy which they openly espouse. They are basically like American Republicans. This philosophy is despised in most parts of the globe with the exception of the US and a few other places, but it has taken hold in Chile.

However, the Left is also huge and has not been effected by the Greed Rush. They are very militant and radical. Society is completely polarized, and the poor and the rich want to kill each other.

I just want to pour cold water all over this “Chile Miracle” nonsense.

It is true that the Left has formally been in charge for most of the last decade, but I assume that they are limited in what they can do by the military, fear of the radical and violent Right and especially the dictates of the IMF and World Bank. Bottom line is the Left has not been able to get a lot done in Chile in recent years. Those schools are not falling apart because the Left refuses to fund them.

The Radical Right Chile Project that the Right lies about and insists has resulted in mass prosperity in Chile did anything but. Pinochet initially had some good economic growth for the first half dozen years of his rule. A ways into Pinochet’s first term, around 1980, some idiots called “The Chicago Boys,” radical libertarian acolytes of Milton Friedman out of the University of Chicago, decided to use Chile as a laboratory for their crazy radical libertarian economic projects. In 1983, this resulted in a major crisis, as radical neoliberalism always results in a crisis sooner or later (see Bank Crash 2008). All of the gains of the early Pinochet years were completely wiped out, and the economy in 1983 was at the same level as when Pinochet took power in 1973.

The economy lay in ruins, but there had been a major transfer of wealth from the lower classes to the upper, so the Chicago Boys were at least successful in that part of their project, and this is always a side effect of any Chicago Boys project. The reverse Robin Effect of radical neoliberalism is not a bug of the system, it’s actually a feature. This is how the system is supposed to work. Pinochet did not know a lot about economics, but he was not an idiot, and he got some sense and threw out the Chicago Boyz. Some sane economists came in and made major changes in the economy, reversing much of the radical libertarianism and instituting a much larger role for the state in the economy. This much more leftwing economy is what Pinochet was operating under for most of his regime.

By 1990, when Pinochet left power, the economy had grown significantly, but all it did was grow out of the crash that the Chicago Boys had put it in back up the level where it was  just before the Boys come in.

This is the “Chilean economic boom” that they talk about, a major climb out of a massive economic hole that the libertarians created with their own policies. The “Chile Miracle” was simply this more leftwing program which caused very high economic growth and managed to reverse all of the losses of the neoliberal crash early in his term.


Filed under Americas, Amerindians, Chile, Economics, Education, Fascism, Latin America, Latin American Right, Left, Libertarianism, Marxism, Neoliberalism, Political Science, Race/Ethnicity, Regional, Social Problems, Socialism, Sociology, South America

7 responses to “The Truth About the Fake “Chilean Miracle”

  1. So you think this data is wrong? Because it sure looks like by 1990 GDP pc was at leat 50% than under Allende, and that under Allende GDP pc was going down

  2. Jason Y

    How arrogant of the far right to dismiss workers clamoring for thier rights as retarded apes. But what else would you expect from Nazis?

    • Jason Y

      The state for whatever reason has not funded public schools well in a long time, and most of them are falling apart. Students stage protest-riots a couple of times a month, and they are often violent. The South is inhabited by Indians who despise the government, live in serious poverty and are in continuous revolt.

      A question. “How can the IQ rise if far right bastards don’t improve the schools?” Inquiring minds want to know.

    • EPGAH

      You mean like dismissing displaced workers as “their own fault” because they “avoided education”?

  3. James Schipper

    Dear Robert

    What you wrote about the Pinochet years wasn’t 100% correct. After 10 years of (mis)rule by Pinochet, the Chilean economy was indeed where it was when Allende was deposed. However, during the last 7 years of his rule, Pinochet pursued more moderate economic policies. The generals had learned that the Chicago Boys weren’t the magicians that they had claimed to be because the Chilean economy entered a deep crisis in 1983, which wiped out all the gains made from 1976 to 1982. It is true of course that the economic growth before 1983 benefited almost exclusively the upper 1/3.

    To give credit where credit is due, the Pinochet government had some programs that geared to the poorest of the poor, such as a nutrition program for gestating and lactating mothers. The Cuban communists had something similar during the Special Period. They had special eating rooms for pregnant women and mothers of young children.

    Regards. James

  4. Jason Y

    Right wing governments always have to adopt some leftist things. For instance, that’s why we have Social Security, Food Stamps etc.. in the USA. The elites have to pacify elements of the population that might turn against them.

  5. EPGAH

    Couldn’t it just be a misuse of the word “miracle” or “gain”? More precisely, “gain” from WHAT?

    The German “Economic Miracle” was a miraculous recovery from the post-WWI depression, WITHOUT hyperinflation.

    People talk about the “Amazing Economic Growth” of India, and even some countries in AFRICA. They’re starting from essentially zero, so ANY growth will be “amazing” compared to that. There are 55 countries in Africa, right? And yet, all of them PUT TOGETHER, have less GDP than Texas ALONE!
    And of course, there are no refugees TO Africa, only FROM Africa, and they cause great damage in the places they invade!
    Strangely, there’s no similar story about Frenchmen doing that in an African school–but there are stories about the Civilized World BUILDING schools in Africa, and the savages trashing them, aren’t there? Hmm…

    Closer to home, some people talk about the “Economic Growth Miracle” of America–from a “recession” that Clinton caused!
    Except that’s not really growth, that’s just getting back to almost where we used to be…and even then, we have lower “Labor Participation” and lower “Median Income” than before, so we haven’t really recovered, have we?

    As to “Chicago Boys”, Chicago is the Left’s dream. “Multicultural” as Hell, great wealth redistribution, harshest gun-control laws in the State, if not the nation…and it’s a violent Hell! 80 murders a day is considered a slow day.
    Pointing to Chicago is a great way to somehow “prove” that America is Third World–IF all of America is Chicago. But it’s an even BETTER way to prove the race realists correct!

    I await Jason somehow blaming it on “The Environment”.

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