Did Chile under Pinochet work better? Economy-wise.

[Jacob Cliff]

The so called "Chilean miracle" described by Friedman was of course accompanied by brutal military dictatorship and mass murder, but from what it looks like, the economy under Marxist Allende was trash. Unemployment and inflation was a problem, and it seems Pinoches free market solved them. Is this the case? What's the Marxist idea behind this?

[Anglo-Saxon Philistine]

The question itself is probably best answered by someone familiar with the ins and outs of the Chilean economy - as far as I know copper extraction was nationalised under Pinochet, so the "free market miracle" is a bit of a crock, but in any case, why should anyone who considers themselves a socialist care if one type of capitalism was more effective than the other? We don't want a "better-working" economy, that is just the most bizarre sort of fetishism. A "good" economy usually doesn't mean shit for the working class, and why should we care if the bourgeoisie makes more? We don't want a high GDP, we want to abolish the GDP.

[Creative Destruction]

The economy under Pinochet was great for rich Chileans, but it was complete hell for poor Chileans. "Unemployment" and "inflation" as metrics themselves do not tell us much about the overall economic health of an economy, despite what bourgeois economists bellow. The main reason why the economy faltered under Allende was because of global copper prices, which are beyond the country's control. They were also at the mercy of the United States, since they were funding destabilization campaigns around Chile, as well as cutting off monetary support; meanwhile, the Soviets had their thumbs up their asses about Chile and Allende. When it was apparent that Allende wouldn't support the rich people in Chile, they started lockouts, which helped Pinochet into power.

In short, though, the "free market" didn't solve shit in Chile. There's still massive poverty, low wages and crisis comes to the country every few years, much to the point where they're continually re-appraising their economics. Even Pinochet abandoned the "free market" crap toward the end of his tenure. Friedman is a self-promoting sack of shit who benefits from the misery of most people, so the "Chilean miracle" is mostly a working of his fevered reactionary mind.

[#FF0000]

The economic growth in Chile was largely based on speculative bubbles, which burst every couple years and brought back the old problems of inflation and high unemployment. Poverty and wages also declined sharply during Military rule. I remember reading a pretty decent article on the "Chilean Miracle" a while ago. I'll post it if I can find it.

EDIT: Think I found it. Don't think this is the original place it was posted, but here you go. (http://www.multinationalmonitor.org/hyper/issues/1994/08/mm0894_12.html)

Also found a good piece from The Guardian (http://www.theguardian.com/business/1998/nov/22/observerbusiness.theobserver) from 1998 about Chile under Pinochet.

[Tim Cornelis]

It's basically been said. Economic growth sustained and enabled by speculative bubbles, foreign credit, and high copper prices. Rising income inequality, unemployment rising to 20 (or 30?) percent (when they couldn't repay their debt due to falling copper prices), growing poverty, etc. Hardly a "miracle" by any standard.

[RedWorker]

Not relevant whether Allende was a Marxist, any socialdemocrat obviously could've done the same thing as him. And there were some very good improvements he made, at least within his first year.

And yeah, capitalism is incompatible with more radical reforms, which is another reason why we need a change in the mode of production.

[cyu]

Pinochet had an economy where lots of people got highly rewarded for murdering those who dared to stand up for themselves. Just the way capitalist economies have always worked, and was highly successful at creating just the type of jobs capitalism loves.

[tuwix]

The so called "Chilean miracle" described by Friedman was of course accompanied by brutal military dictatorship and mass murder, but from what it looks like, the economy under Marxist Allende was trash. Unemployment and inflation was a problem, and it seems Pinoches free market solved them. Is this the case? What's the Marxist idea behind this?

It's just neoliberal myth.

There is a graph illustrating a GDP per capita in Chile:

https://upload.wikimedia.org/wikipedia/commons/3/34/Chile_GDP.jpg

A coup d'etat of CIA and Pinochet was in 1973, and as you see an economy felt much deeper in first years of Pinochet than the last years of Allende.
And actual reason of further Pinochet's growth was abandoning of neoliberal ideas. Chile just started to intervene in own economy...