Chile under Pinochet

[Nolan]

Over and over again I hear about how Pinochet's laissez-faire policies led Chile to prosperity in the so called "Miracle of Chile."

Any thoughts on this would be appreciated.

[Demogorgon]

I used to have a whole host of figures on the subject that I will try and look out for you, but the most important point is that the average Chilean was worse off by virtually every economic measure in 1990 than they were in 1973. Economically speaking, Pinochet's rule was actually disastrous for Chile. The "miracle" referred to by the right was the explosion of the financial services industry and a new wealthy elite that spawned. I need hardly tell you what a house of cards that was.

And of course beyond the economic disaster, you need only look at the dictatorship, the murder, the torture, the fact that Chile has been left with a severely damaged political system and so on.

[Drace]

Let me get Parenti on this....

Salvador Allende, the democratically elected socialist president before Pinochet, made a number of progressive reforms.

He ousted the death penalty, gave freedom to all political parties and even equal time in the media. He nationalized the mines, redistributing unused land and giving it to the landless peasants. He dropped the inflation by half, unemployment down to less then 5%. Beef and bread consumption increased by 15% during 1971-1972 alone.
The GNP under Allende's first year grew 8.5%.

Pinochet in contrast, gained power by murdering Allende with the help of the CIA, and stopped all the reforms and began torturing dissidents. As many as 200,000 were exiled, 80,000 imprisoned, 30,000 tortured, and 3,200 killed.
His policies brought "runaway inflation, a drastic drop in real wages, an upward redistribution of income, a sharp growth in unemployment, a huge increase in the foreign debt, and a fall ini savings and investments to below the late 1960s level."
I haven't heard of any prosperity under his dictatorship. To even say laissez-faire existed is ridiculous.

More from Wikipedia.

Chile's main industry, copper mining (http://en.wikipedia.org/wiki/Chilean_nationalization_of_copper), remained in government hands, with the 1980 Constitution (http://en.wikipedia.org/wiki/Chilean_constitution_of_1980) declaring them "inalienable," [13] (http://en.wikipedia.org/wiki/Chile_under_Pinochet#cite_note-NLR-12) but new mineral deposits were open to private investment.[13] (http://en.wikipedia.org/wiki/Chile_under_Pinochet#cite_note-NLR-12) It was this abstention from complete privatization that kept the economy afloat during the Chicago Boy years. Capitalist involvement was increased, the Chilean pension system (http://en.wikipedia.org/wiki/Chile_pension_system) and healthcare were privatized, and Superior Education (http://en.wikipedia.org/wiki/Education_in_Chile) was also placed in private hands. One of the junta's economic moves was fixing the exchange rate in the early 1980s, leading to a boom in imports and a collapse of domestic industrial production; this together with a world recession caused a serious economic crisis in 1982, where GDP plummeted by 14%, and unemployment reached 33%. At the same time, a series of massive protests were organized, trying to cause the fall of the regime, which were efficiently repressed.
Between September 1973 and October 1975, the consumer price index rose over 3,000%. In order to combat this persistent problem and pave the way for economic growth, the Chicago Boys (http://en.wikipedia.org/wiki/Chicago_Boys) recommended dramatic cuts in social services.[9] (http://en.wikipedia.org/wiki/Chile_under_Pinochet#cite_note-K._Remmer_1998_3-29-8) The junta put the group's recommendations into effect, and cumulative cuts in health funding totaled 60% between 1973 and 1988. The cuts caused a significant rise in many preventable diseases and mental health problems. These included rises in typhoid (121%,) viral hepatitis, and an increase in the frequency and seriousness of mental ailments among the unemployed.[41] (http://en.wikipedia.org/wiki/Chile_under_Pinochet#cite_note-40)
Exchange rate depreciations and cutbacks in government spending produced a depression. Industrial and agricultural production declined. Massive unemployment, estimated at 25% in 1977 (it was only 3% in 1972), and inflation eroded the living standard of workers and many members of the middle class to subsistence levels. The under-employed informal sector also mushroomed in size.All this despite United State's military and economic aid to Pinochet.


The previous drop in foreign aid during the Allende years was immediately reversed following Pinochet's ascension; Chile received USD (http://en.wikipedia.org/wiki/United_States_Dollar) $322.8 million in loans and credits in the year following the coup.

No aid was given to Allende's progressive socialist government but yet Pinochet received $320 in aid and yet turned Chile into a hell hole.

[Robocommie]

The thing that most capitalists and almost all right-wing capitalists ignore is that just because an economy "grows" and even if the GDP of a nation skyrockets, it doesn't mean shit if that money isn't distributed more evenly, even in a non-socialist sense.

[Jimmie Higgins]

Over and over again I hear about how Pinochet's laissez-faire policies led Chile to prosperity in the so called "Miracle of Chile."

Any thoughts on this would be appreciated.

Check out "the Shock Doctrine". Klein isn't a socialist, but the book does an excellent job destroying the myth of US influenced free-market (peaceful) prosperity in Chile as well as other countries.

[Nolan]

Check out "the Shock Doctrine". Klein isn't a socialist, but the book does an excellent job destroying the myth of US influenced free-market (peaceful) prosperity in Chile as well as other countries.

Thanks, will do. Doesn't Chile have the largest economy in Latin America after Brazil and Mexico today? When did that happen? (if)

[Drace]

Thanks, will do. Doesn't Chile have the largest economy in Latin America after Brazil and Mexico today? When did that happen? (if)

Apparently, Brazil is.
However...


Currently, Chile is one of South America's most stable and prosperous nations.[5] (http://en.wikipedia.org/wiki/Chile#cite_note-BBC-Chile-4) It leads Latin American nations in human development (http://en.wikipedia.org/wiki/Human_development_%28humanity%29), competitiveness, quality of life, political stability, globalization, economic freedom, low perception of corruption and comparatively low poverty rates.[7] (http://en.wikipedia.org/wiki/Chile#cite_note-6) It also ranks high regionally in freedom of the press (http://en.wikipedia.org/wiki/Freedom_of_the_press) and democratic development. However, it has a high income inequality (http://en.wikipedia.org/wiki/Income_inequality), as measured by the Gini index (http://en.wikipedia.org/wiki/Gini_index).

[FSL]

Chile's economy is in a better shape than its people. A good chunk of the nation's GDP travels overseas to the shareholders who own the businesses. Also, as said, inside Chile there is a quite uneven distribution of income.
But it's not all that bad now. Center-left governments have been rulling for 2 decades now so the gap between rich and poor is at least growing more slowly. Chile has also, like Cuba, pretty much overcome child malnutrition but it still ranks worse in child mortality. You might remember the large student protests a few years ago for the high cost of tuition fees, something that again you won't be seeing in Cuba.

Generally, people in Chile are better off than people in Guatemala (without that saying much). But workers in Chile are arguably worse than workers in Cuba, and that's despite attracting Foreign Direct Investment or american support. Cuba had to lift itself through the crisis of the early 90s to find itself pretty much isolated and with the earth's biggest economy still having an embargo.
Chile is capitalism's succes story in Latin America and still doesn't look that succesful.

[Demogorgon]

Chile does have quite a stable economy, though it still has some pretty serious problems. You have to remember however that much of that has come since the nineties.

[RadioRaheem84]

Different Chileans have different outlooks about the Allende-Pinochet times. My mother was young and all she remembers is standing in line for bread for hours during the Allende days. She attributes this to "socialism" and fails to take into account that Allende's policies were under serious economic attack from within and without (CIA). Allende had to deal with I believe 500% inflation. Of course all of this was blamed on Allende's policies and none of it on the capitalist themselves using their influence to war with Allende economically. But that's what my family remembers of "socialism".
My grandfather participated in some strikes against the government in the ports of Valparaiso (probably instigated by the CIA). Point is all of the turmoil that Allende went through at war with the capitalists and trying to get his policies through will be spun as "socialism" gone wrong and the reason for the coup. After the coup, the capitalists allowed for things to calm down enough to claim that Allende was the problem and thus more capitalism was needed.

Chile is a stable "democracy" with a good economy but that's due to the center-left government that followed Pinochet. They used the money made by the capitalists in the 80s to do some semblance of redistribution. The way Chile looks now though is all attributed to Pinochet though.
But Pinochet's shadow still looms over Chile as no one, not even the Socialists in power dare to undue his economic policies fully. It's akin to Reagan and Clinton or Thatcher and Tony Blair.

[Nolan]

Different Chileans have different outlooks about the Allende-Pinochet times. My mother was young and all she remembers is standing in line for bread for hours during the Allende days. She attributes this to "socialism" and fails to take into account that Allende's policies were under serious economic attack from within and without (CIA). Allende had to deal with I believe 500% inflation. Of course all of this was blamed on Allende's policies and none of it on the capitalist themselves using their influence to war with Allende economically. But that's what my family remembers of "socialism".
My grandfather participated in some strikes against the government in the ports of Valparaiso (probably instigated by the CIA). Point is all of the turmoil that Allende went through at war with the capitalists and trying to get his policies through will be spun as "socialism" gone wrong and the reason for the coup. After the coup, the capitalists allowed for things to calm down enough to claim that Allende was the problem and thus more capitalism was needed.

Chile is a stable "democracy" with a good economy but that's due to the center-left government that followed Pinochet. They used the money made by the capitalists in the 80s to do some semblance of redistribution. The way Chile looks now though is all attributed to Pinochet though.
But Pinochet's shadow still looms over Chile as no one, not even the Socialists in power dare to undue his economic policies fully. It's akin to Reagan and Clinton or Thatcher and Tony Blair.

In the same spirit, my family in Venezuela blames Chavez for the increased violence and whatnot there. Its like they forget the rest of the world exists when something goes wrong. Colombia is much worse, but they still blame Chavez.

[#FF0000]

Someone correct me if I'm wrong, but didn't the "miracle in Chile" start AFTER Pinochet?

[Pogue]

Miracle of Chile! :laugh::laugh:

Funniest thing I've ever heard. People spent 80% of their wages on a loaf of bread under Pinochet, its well documented that socially, things went to shit. Big time.

[Nolan]

Looks like we're going to have another "miracle" of Chile.

[RadioRaheem84]

Chile's miracle was real, but for the very rich. Whenever I tell people that my parents are from Chile, other Latin Americans see this as a great thing because they assume that Chile is a rich Latin American country that rose to prominence. Little do they know that while yes the poor rose too during the miracle it left them utterly stagnant, dependent on the wealthy, and living paycheck to paycheck. The upper middle class and the upper crust tout the Pinochet regime and the later centrist Democrat administrations for the prosperity. They fail to take into account the number of bailouts Pinochet had to enact using funds from the STATE owned enterprises the Chicago Boys didn't privatize.

[gorillafuck]

Miracle of Chile! :laugh::laugh:

Funniest thing I've ever heard. People spent 80% of their wages on a loaf of bread under Pinochet, its well documented that socially, things went to shit. Big time.
You have a weird idea of funny.