Class struggle in Chile?

[BIG BROTHER]

Ok. So Chile is hailed by many bourgeoisie economics as proof that the free-market capitalism can still develop a country and bring wealth to its people.

I often argue with my GF's mom about capitalism and socialism, and she always brings out Chile. I myself don't know much about Chile and I would like to be able to argue to her about the shortcomings and the failure of capitalism even in a country like chile.

My knowledge is limited to a few strikes done by goverment workers, and the represesion of the indigenous Mapuche people.

[Bankotsu]

See:
Chile's Failed Economic Laboratory an Interview with Michael Hudson

Kissinger felt that the United States needed to show that socialism was bound to fail economically. Rather than leaving this to the "free market," America used the famous "invisible hand" * not Adam Smith's invisible hand of free enterprise, but the covert hand of CIA destabilization.

The World Bank and IMF were eager to show that obedience to U.S. economic dictates and Chicago School monetarism brought prosperity rather than dependency, so they tried to make Pinochet's dictatorship an economic showcase, as they earlier had done with Colombia.

http://www.counterpunch.org/schaefer10202003.html

http://www.counterpunch.org/hudson02232009.html

NEW KISSINGER ‘TELCONS’ REVEAL CHILE PLOTTING AT HIGHEST LEVELS OF U.S. GOVERNMENT

http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB255/index.htm (http://www.gwu.edu/%7Ensarchiv/NSAEBB/NSAEBB255/index.htm)

[JimmyJazz]

Bad Samaritans by Ha-Joon Chang has a part debunking the supposed "miracle" growth of Chile under the free market Pinochet regime (the growth was in fact pretty modest).

Shock Doctrine by Naomi Klein deals a bit with the human costs of the growth that did occur, and the undemocratic way in which it was imposed. Though as far as I'm concerned this point is secondary, since no exceptional growth even occurred.

And there's a book called Chile: The Great Transformation by two Chilean economists that I've wanted to read for a long time. The description from Amazon:


Chile is frequently cited as a remarkable success story of neoliberal economic restructuring. In fact, countries around the world are encouraged to follow the Chilean model so that they can reap the extraordinary benefits of rapid growth and expanding export markets associated with the drastic economic reform in Chile. But the Chilean experience is extremely complicated and contradictory.Bad Samaritans is the most important book, though. It's written by a Cambridge-trained economist (which should impress authoritarian right-wing types), and it shows conclusively that underdeveloped countries don't develop fastest by a pure free market model. Strategic state intervention (tariffs, key state-run enterprises, and a few other things) is the fastest method. Using such methods, South Korea industrialized at a sustained and rapid pace that makes Chile's "miracle" growth seem like a failure by comparison. It also shows reviews some economic history to show that all of today's wealthiest industrial economies, like the U.S. and England, were very protectionist while they were on their way to the top. Only once they got there did they become in favor of global free trade, because at that point they stood to gain from it.


Edit: if you want something on political repression in Chile under Pinochet, The Condor Years by John Dinges is a really, really good book.

[Bankotsu]

How Rich Countries Got Rich ... and Why Poor Countries Stay Poor by Erik Reinert is also a good book with similar arguments as Bad Samaritans.



In this refreshingly revisionist history, Erik Reinert shows how rich countries developed through a combination of government intervention, protectionism, and strategic investment, rather than through free trade. Reinert suggests that this set of policies in various combinations has driven successful development from Renaissance Italy to the modern Far East.

Yet despite its demonstrable sucess, orthodox developemt economists have largely ignored this approach and insisted instead on the importance of free trade. Reinart shows how the history of economics has long been torn between the continental Renaissance tradition on one hand and the free market theories of English and later American economies on the other.

Our economies were founded on protectionism and state activism—look at China today—and could only later afford the luxury of free trade. When our leaders come to lecture poor countries on the right road to riches they do so in almost perfect ignorance of the real history of national affluence.

http://www.amazon.com/How-Rich-Countries-Poor-Stay/dp/0786718420

[BIG BROTHER]

Good books. Thakn you guys. Now I gotta read them. Anything about current economical and social problems in Chile?

[rednordman]

To be honest with you, Im baffled that she uses Chile as an example. Its a known fact that there is poverty in Chile that is as bad as anywhere else in South America. What makes it more special than, lets say, Argentina or Brazil?

Sure, the Commercial and buisness districts may be nice in Chile, but they are probably the same in other countries too. It just highlights the huge level of inequality in South America as a whole imo.

[Kamerat]

One in my family is a chilean who fleed Augusto. She vists her home country often and says the economy has increased a little after Augusto steped down. And some slum areas have been demolished to make room for rich people homes, without offering any compesation to the poor. Now Chile have what she calls a social democratic government. But the fire department is still volunterly, and no universal healthcare.
There is also peruvians who come to Chile to work, and chileans treat them like second class citizens.

[mykittyhasaboner]

Arguing that Chile experienced economic growth, after the CIA overthrow an elected government supported by the working masses, is completely pointless imo. The CIA overthrew Allende and installed Pinochet's military dictatorship ffs, I couldn't give a shit if the GDP went up.

[JimmyJazz]

Arguing that Chile experienced economic growth, after the CIA overthrow an elected government supported by the working masses, is completely pointless imo. The CIA overthrew Allende and installed Pinochet's military dictatorship ffs, I couldn't give a shit if the GDP went up.

Partially agreed, but I see no point in conceding anything unnecessarily.

Also, it would be sticking our heads in the sand to deny that growth is an important priority for many people in underdeveloped countries.

[mykittyhasaboner]

Partially agreed, but I see no point in conceding anything unnecessarily.

Also, it would be sticking our heads in the sand to deny that growth is an important priority for many people in underdeveloped countries.
Well of course I agree, but someone referencing Chile as a country that has seen "successful" growth and development for the poor working people of their developing society is picking the wrong country.

[JimmyJazz]

Yeah, I guess in my mind I pictured the woman as a hardcore libertarian, since to my knowledge very few people besides Milton Friedman had the gall to defend or deal with the Pinochet regime. Normal people don't tend to cite Chile, if anything they'll cite Japan or something.

[mykittyhasaboner]

Yeah, I guess in my mind I pictured the woman as a hardcore libertarian, since to my knowledge very few people besides Milton Friedman had the gall to defend or deal with the Pinochet regime.

what a douche.

Normal people don't tend to cite Chile, if anything they'll cite Japan or something.Yeah or maybe ROK, like as a comparison to the north :rolleyes:. those pesky liberals.

[BIG BROTHER]

Well she is not Defending the Pinochet Regime per se. She is just arguing that Chile is an example of how Capitalism is the best system at creating wealth. Then she goes on to say that you can use capitalism wealth like they do in Chile to fund social programs and raise the standard of living.

Then she goes on to say how after the regime of Pinochet fell the democratic government used all the wealth created by capitalism to make social reforms.

Is current Chile which I seek to criticize right now. Does anyone have any data as to poverty in chile, unemployment, life expentancy or something like that?

[mykittyhasaboner]

Well she is not Defending the Pinochet Regime per se. She is just arguing that Chile is an example of how Capitalism is the best system at creating wealth. Then she goes on to say that you can use capitalism wealth like they do in Chile to fund social programs and raise the standard of living.
Yes but creating wealth for whom? This must be stressed when your talking to her. Also, any social programs that were introduced after the military government ceased is likely to be as half baked as they are in any capitalist country. Second most of Chile's money actually comes from exports and foreign investment, and has little to do with the "democratic government making social reforms".

https://www.cia.gov/library/publications/the-world-factbook/geos/ci.html


Then she goes on to say how after the regime of Pinochet fell the democratic government used all the wealth created by capitalism to make social reforms.

Is current Chile which I seek to criticize right now. Does anyone have any data as to poverty in chile, unemployment, life expentancy or something like that?It's not all roses and butterflies in Chile. Sure their economic growth is well noted, but inequality is still ripe. You could compare the "social programs" of Chile to Cuba, in that Cuba's are way more encompassing and actually consist of socialized organization, but it would be unfair to compare the two in my opinion, since the context is completely different (you could end up making her arguments for her also, because Chile actually has 'officially'
less poverty than Cuba, for example, by all the sources I've seen; but the statistics don't really cover the whole situation. Some of this info may be a bit outdated, but it's relevant to the time period and I couldn't find much else.

Possibly the most serious problem facing Chilean policymakers is an extremely uneven pattern in the distribution of income (Table 1). Of the 7 largest Latin American countries (excluding Argentina, which does not publish these indicators), Chile is in the second lowest place (after Brazil) in terms of the share of national income received by the poorest 40% of the population (10.5% in 1989,10.2% in 1992). Chile also presents the second largest ratio between the income share of the top 20% and the income share of the bottom 20% of households (17.0% in 1989,18.3% in 1992) - again after Brazil.

Moreover, from 1989 to 1992, these two indicators worsened. The middle-income quintiles (second, third and fourth) improved their share of income, but at the expense of those at the bottom of the income pyramid (the first quintile) and the rich (fifth quintile). However, since the economy expanded by 20% over this 3-year period, the absolute income of the lowest or bottom quintile (the "poor") actually rose; in other words, the decline in the share of income going to this quintile was more than compensated by the fact that the entire pie was greatly expanding.2 Indicadores Economicos y Sociales, 1960-1988. Santiago de Chile: Banco Central de Chile.


Issues of poverty and inequality have always posed difficult dilemmas for Chile. From the end of the 1980s into the 1990s, inequality was worse in Chile than in most other Latin American countries despite the fact that its indicators registering the incidence of poverty and quality of life looked good according to the region's (admittedly low) standards.
The incidence of poverty fell between 1987 and 1990 and, again, between 1990 and 1992. Nevertheless, the distribution of income became more unequal between 1989 and 1992 (perhaps confirming that "the road to hell is paved with good intentions") as those in the lowest income quintile saw their share decrease, while those in the middle sectors (second, third and fourth quintiles) saw their shares increase.



The extent to which the incidence of poverty did decline during this period can be attributed to two major factors: (1) a tightening of the labour market (which peaked in 1992), and (2) appreciation of the Chilean peso (a development that is unlikely to reverse and may, in fact, be accelerating in the 1990s decade). The improvement (both absolute and relative) in the fortunes of the middle sectors can be attributed to rapid growth of the economy (in the context of the freemarket, open-economy model) on the one hand, and to the nature and certain features of Chilean social spending in the 1990s, on the other.
Ever since 1990, Chile's total government expenditures, including social expenditures, have been expanding at approximately the same rate as national output. Because "social spending" has been defined in an all-encompassing way, it represents substantially more than 2/3rds of the total expenditure.



However, the redistribution of income from the top quintile to the bottom one, in terms of money transfers, education, health, housing benefits and subsidies, amounts to only about 10% of the total sum considered as social expenditures. For the most part, those in the middle sectors (second, third, and fourth income quintiles) have been relatively unaffected by this redistribution, although there are other forms of redistribution (such as those involving pension arrangements) which have worked to their positive advantage. If social expenditures could be effectively redirected towards the alleviation of poverty, it might be possible for poverty to be largely eliminated in just a few years.
http://findarticles.com/p/articles/mi_qa3688/is_199607/ai_n8754144/pg_9/?tag=content;col1

[SocialismOrBarbarism]

Well she is not Defending the Pinochet Regime per se. She is just arguing that Chile is an example of how Capitalism is the best system at creating wealth. Then she goes on to say that you can use capitalism wealth like they do in Chile to fund social programs and raise the standard of living.

Then she goes on to say how after the regime of Pinochet fell the democratic government used all the wealth created by capitalism to make social reforms.


It seems like she's saying that free market capitalism is the best way to develop a country, not that it's necessarily the best end product. If so you could just point out that the industrialization of the USSR far outpaced any in history.