Economic Reforms in Chile: From Dictatorship to Democracy

Chile is thriving – so why is socialism rising?
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But it was not until that the junta gave a clear indication of having adopted the new orthodoxy. Politically, it remained the task of the junta to provide the country with a new constitution. The new constitution ensured military control over the civilian authorities, stipulating that the first presidential election would be a yes-no plebiscite for a single candidate chosen by the four leading military commanders. Both the right to private property and the restriction of labor rights were written into the constitution, and future laws would give the same character to the statutes for education, health, and others.

To enshrine the new constitution, the junta also established very high quorums to initiate any future changes. The vote was carried on in conditions of the utmost abnormality that favored widespread fraud. No electoral registry was open, and the government controlled each phase of the balloting process without any independent electoral oversight.

Many studies later proved that the results were obtained fraudulently. One report calculated that the number of people who voted in relation to the total number who registered in the census was A new body of political laws operated as a source of legitimization for the military government, while the framework of the transitional period allowed Pinochet the continued use of political terror with impunity. Inflation, which was 9. But in June the government went public with a strong devaluation of the dollar, which soon spun out of control, ruining business that had rapidly expanded on the expectation of high exports.

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In January of , the government had to intervene to salvage a number of financial institutions from bankruptcy. The Chilean elite and its government found its confidence sinking from the precariousness of their much-touted economic model. This was the signal for a popular democratic movement to move into the political space now opening up. There had been some protests even in the darkest period of the dictatorship. Copper miners paid dearly after staging a protest at the end of the s, and sectors of students had demonstrated in their schools.

The bourgeoisie's subservience

This book provides an in-depth analysis of neo-liberal and progressive economic reforms and policies implemented in Chile since the Pinochet dictatorship. Economic Reforms in Chile: From Dictatorship to Democracy (Development And Inequality In The Market Economy) [Ricardo Ffrench-Davis] on

For most of the day things ran normally. At midday, the most active, the hardcore, marched, and many students protested in their schools. But it was not until later that, under the protection of darkness and in the familiarity of the neighborhoods, the mass of Chilean city dwellers erupted in a deafening surge of pot banging and honking.

In the poor districts many ventured into the streets; the middle and upper classes caravanned in their cars.

Chile's Return to Democracy

The protests snowballed. In June of a second national protest was called, this time not as a labor stoppage, and it followed more or less the same script.

Toward the end of the evening, some groups had engaged in incendiary bombings of symbolic targets and electrical towers. In August, the unity reached at the third protest began to break apart at the fourth, with two different calls being made.

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The AD wanted to force a negotiated exit of the military government, while the MDP called for a popular rebellion to oust the dictator—though there was agreement on the need to keep the pressure on with further protest. So a call was made for a demonstration on August 11, , by both the AD and the MDP, but the latter called for continuing the protest on the following day. Meanwhile, repression worsened.

1973 Chilean Coup - 3 Minute History

The first protest took the dictatorship by surprise. A number of arrests were made during the day and political persecution through the judicial system followed. Mass arrests started with the second protest, and by the third there were widespread raids in the barrios.

Economic Reforms in Chile: From Dictatorship to Democracy

For the fourth national protest the dictatorship tried a curfew that had no effect. The state developed a new technique of repression—indiscriminate shooting. It began sporadically at first, but by the third demonstration it had become standard procedure. Its effectiveness resided in its randomness; the anonymous character of the deaths created a sense of terror.

Twenty-nine people were shot down during the third protest, another twenty-nine during the fourth. The official media denounced the protests as vandalism, and the government named Sergio O. Jarpa as Minister of Interior to start negotiations with the opposition. Over the next two months, while the AD dialogued with Jarpa, the MDP organized four days of protest, from September 8—11, and another three days in October, both resulting in a number of deaths and hundreds of wounded. By October, the negotiations with Jarpa had broken down.

Five hundred thousand attended the demonstration. The next protest, in March , was heavily repressed in the neighborhoods.

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According to the constitution, he would remain in power for another seventeen months before multi-party elections installed a new government. User lists with this item 1 Things to Check Out 11 items by rachelburns. Brian Mier , February 24, Economic outlook Economically, Chile is neither thriving nor spiraling into decline. Red and Black, the First World: Goi In the last century, the only figure I can think of who comes close to meeting those standards is John Cowperthwaite, the former finance secretary of Hong Kong; and his ability to do good without doing much evil was contingent on unusual historical circumstances that I do not expect to recur. Indeed, Hayek took H.

Ten people were killed. In August, the Catholic Church called for a Journey for Life, which initiated another round of monthly protests, followed by the first effective national strike on October This measure put an end to the first cycle of protests. The AD had started a second round of negotiations, this time not with the government but with the moderate right-wing parties.

The outcome of these negotiations was the National Agreement for Transition to Full Democracy, a broad accord laying the basis for a transitional government. The accord demanded a lifting of the state of siege, the legalization of political parties, and free elections. But Jarpa was out of the government, and Pinochet insisted that there would be only a slow, incremental transition to limited democracy under his control.

In this context, demonstrations were called separately by the MDP and the AD, even if they happened on the same days. The expectations generated by the National Agreement demobilized many, for whom the protests had become merely a routine. A massive demonstration of support for Pinochet was carried out on September 11, the state of siege was extended, Pinochet delivered a heavy blow to the FPMR, and the opposition became unable to call any more demonstrations. Pinochet now seemed likely to stay in power for the entire period of his constitutional dictatorship. Between the end of and the beginning of a series of electoral laws were issued establishing new rules for the upcoming election.

Seeing that some even in the right-wing camp favored competitive elections over a plebiscite, some in the opposition decided to attempt a last campaign for free elections in The opposition vowed either to oust the dictator through mass protest, or at least to obtain a negotiated exit and an agreement for a new constitution. Despite the divisions that developed in the movement from on over how to proceed, the national consensus, which included the moderate right wing, was that the constitution was an obstacle toward the recuperation of democracy.

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But the protest movement was not able to prevent Pinochet from running out his eight-year term. In the four military commanders chose Pinochet as the single candidate in the upcoming plebiscite. The regime also legalized all non-Marxist parties who could come up with the signatures of 35, registered voters.

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Meanwhile, Pinochet was not done with terror. After the attempt on his life, Pinochet intensified the selective assassination of his opponents.


This tactic had been used sporadically to terrorize those organizing within the labor movement during the protest years. In , under the name Operation Albania, the national intelligence directorate CNI executed and disappeared dozens of members of the FPMR, twelve of them in just two days. Aimed at the most militant youth among the opposition, this campaign also had the goal of isolating those who still advocated mass protest to bring down the dictatorship.

While he was repressing these militants, Pinochet also began preparing for an electoral transition. When Pinochet opened the electoral registry, the moderate opposition in the Democratic Alliance publicly lent its support, pulling the rest of the opposition behind it. The Law of Political Parties approved in March , and also the constitution, outlawed parties based on class struggle, so for some parties in the AD and for all parties in the MDP, registration as a legal party was not an option.

In August, the Christian Democratic Party decided to register, leaving the Left to deal with the problem alone. The socialist faction still in the MDP did the same twenty days later, effectively killing the left-wing coalition.

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Chile's economic miracle was indisputably the product of a vile dictatorship that overrode normal political considerations to make sweeping reforms before inexplicably dissolving itself in But the policies that led to the economic miracle did not cause the dictatorship, which would have been just as horrible without the Chicago Boys; indeed, as far as I know the worst abuses occurred right after the coup, as the regime was consolidating power.

Perhaps even more bizarrely, a few people in the comments are citing China as an example of how capitalism undermined democracy. Apparently I missed the section in history class where we covered the vibrant democracy that existed in China prior to pro-market reforms. Because in the history I learned, the openness and transparency required to support the market reforms have enabled what little movement towards liberalization China has had. We want to hear what you think about this article.