Post by RS Davis on Jan 18, 2005 12:56:36 GMT -5
Chile: Socialism, Dictatorship, and Liberalism
By Ryan McMaken
[Posted January 13, 2005]
With Augusto Pinochet awaiting trial for ordering the killing, torture, and imprisonment of political dissidents during the 1970's, Chilean politics is back in the news. This is still a sore spot for most every Chilean, and even here in America, any sympathetic mention of either Pinochet or his Marxist predecessor Salvador Allende can provoke some harsh words.
American leftists hate Pinochet for all the wrong reasons, despising his role in liberating the Chilean economy and ending Allende's drive toward making Chile into another Cuba. Still convinced that Fidel Castro is Latin America's most enlightened leader, many Che Guevera devotees still chafe under Allende's ignominious defeat.
Just as disturbing is the fact that many conservatives did—and still do—look the other way on Pinochet's record on torture and suspension of basic liberties. Indeed, conservatives in the US have recently argued for the merit of torture and detention as effective means of controlling dissident populations. T he fact remains, however, that few subjects inspire more debate among students of Latin American history than the Pinochet question, although its days as anything more than an academic issue may soon be numbered.
For most Chileans, and especially the young, the dark days of the junta have become quite irrelevant in the daily lives of modern Chileans. While Chile is rarely found in the sensationalist American news, the economic realities of modern Chile are often in the international financial news. Chile, it turns out, is a great place to invest and to do business. Unlike many Latin American countries, Chile is not notable for its strongman politics (like Venezuela) or its ongoing guerilla wars (like Colombia), but is rather a place where people prefer to get on with the business of doing business.
One might even say that Chile has become a nation of shopkeepers—a phrase once derisively used by foreign observers to describe the British. Throughout the 1990's, and today, under the current administration of "socialist" Ricardo Lagos, Chile has furiously been attempting to secure free trade agreements with every country it can from New Zealand to South Korea to the United States. Free trade, low debt, low taxes, and relatively laissez-faire economics are at the heart of the ongoing economic expansion in Chile. Long a practical and trade-minded people, the Chileans are now enjoying the fastest growing economy in Latin America, and are considered an increasingly good investment choice by the world financial community. And, as some have said, it is well on its way to becoming a first-world nation.
One would think that a nation on the verge of becoming one of the richest in the world would be a good thing, but one should never underestimate the poor judgment of those clinging to the tenets of defunct economists. The Latin American left, of course, has never been one to admit that capitalism has brought prosperity to anyone anywhere in the history of mankind, so Chile remains a significant thorn in their side.
Much of this is due to the fact that the opening of the Chilean economy came during the Pinochet regime, a regime that embodies the antithesis of all that is good and decent among Latin American leftists. Yet, most insidious for the left is the fact that Chile has so thoroughly repudiated the basic foundations of Dependency Theory. Instructed by bad economics and worse ideology, many intellectuals of Latin America concluded that the reason Latin America had not become a global economic powerhouse was because there had not been enough regulation put on the economy, and that they had been long exploited by the United States and its European allies.
While decades of American meddling in Latin America is hardly deniable, there had never been anything resembling a relatively free market in Latin America with its state-controlled economies and oligarchic rule. And while the region's economies had long groaned under the weight of heavy handed governments, things became worse during the 20th century as such regimes were further encouraged by the theories of European and American socialists of the New Deal variety (i.e., John Maynard Keynes & company) who preached that new trade barriers, price and wage controls, and vast redistribution of wealth would solve the economic problems of the world. Such barriers, it was believed, would free Latin America from international competition and corporate "meddling" and bring prosperity to the whole region.
As has now become obvious, such policies bring anything but prosperity, and the more the Latin Americans attempted to pursue autarky by government fiat, the more their populations sank into poverty and economic ruin. For decades, Chile had remained relatively resistant to Dependency Theory as trade-minded governments under Eduardo Frei and Jorge Alessandri attempted to keep their economies relatively open. Yet the zeitgeist of the time overwhelmed them, and with the ascent of Salvador Allende in 1970, international trade collapsed, private firms were confiscated and nationalized, and hyperinflation took its hold on the country.
The economic disaster all ended badly, as such things tend to do, with a military coup and the Pinochet dictatorship. The downward spiral did not end merely with the end of the Allende regime, however. As even its sympathizers will tell you, the military junta was not a big fan of free-market economics. They preferred an economy that would "obey orders." Yet, protectionism and the controlled economy had proven to be such an abject failure that something had to be done, so with few other options Pinochet turned to disciples of what was then considered the radically free-market Chicago School of Economics. A total economic meltdown was avoided. The budget was balanced, regulations were lifted, the health care system was freed, and international trade resumed. Markets, as they will always do when given the chance, moved toward providing more goods at cheaper prices, and economic growth quickly began to outpace other Latin American economies.
[glow=red,2,300]Continued...[/glow]
By Ryan McMaken
[Posted January 13, 2005]
With Augusto Pinochet awaiting trial for ordering the killing, torture, and imprisonment of political dissidents during the 1970's, Chilean politics is back in the news. This is still a sore spot for most every Chilean, and even here in America, any sympathetic mention of either Pinochet or his Marxist predecessor Salvador Allende can provoke some harsh words.
American leftists hate Pinochet for all the wrong reasons, despising his role in liberating the Chilean economy and ending Allende's drive toward making Chile into another Cuba. Still convinced that Fidel Castro is Latin America's most enlightened leader, many Che Guevera devotees still chafe under Allende's ignominious defeat.
Just as disturbing is the fact that many conservatives did—and still do—look the other way on Pinochet's record on torture and suspension of basic liberties. Indeed, conservatives in the US have recently argued for the merit of torture and detention as effective means of controlling dissident populations. T he fact remains, however, that few subjects inspire more debate among students of Latin American history than the Pinochet question, although its days as anything more than an academic issue may soon be numbered.
For most Chileans, and especially the young, the dark days of the junta have become quite irrelevant in the daily lives of modern Chileans. While Chile is rarely found in the sensationalist American news, the economic realities of modern Chile are often in the international financial news. Chile, it turns out, is a great place to invest and to do business. Unlike many Latin American countries, Chile is not notable for its strongman politics (like Venezuela) or its ongoing guerilla wars (like Colombia), but is rather a place where people prefer to get on with the business of doing business.
One might even say that Chile has become a nation of shopkeepers—a phrase once derisively used by foreign observers to describe the British. Throughout the 1990's, and today, under the current administration of "socialist" Ricardo Lagos, Chile has furiously been attempting to secure free trade agreements with every country it can from New Zealand to South Korea to the United States. Free trade, low debt, low taxes, and relatively laissez-faire economics are at the heart of the ongoing economic expansion in Chile. Long a practical and trade-minded people, the Chileans are now enjoying the fastest growing economy in Latin America, and are considered an increasingly good investment choice by the world financial community. And, as some have said, it is well on its way to becoming a first-world nation.
One would think that a nation on the verge of becoming one of the richest in the world would be a good thing, but one should never underestimate the poor judgment of those clinging to the tenets of defunct economists. The Latin American left, of course, has never been one to admit that capitalism has brought prosperity to anyone anywhere in the history of mankind, so Chile remains a significant thorn in their side.
Much of this is due to the fact that the opening of the Chilean economy came during the Pinochet regime, a regime that embodies the antithesis of all that is good and decent among Latin American leftists. Yet, most insidious for the left is the fact that Chile has so thoroughly repudiated the basic foundations of Dependency Theory. Instructed by bad economics and worse ideology, many intellectuals of Latin America concluded that the reason Latin America had not become a global economic powerhouse was because there had not been enough regulation put on the economy, and that they had been long exploited by the United States and its European allies.
While decades of American meddling in Latin America is hardly deniable, there had never been anything resembling a relatively free market in Latin America with its state-controlled economies and oligarchic rule. And while the region's economies had long groaned under the weight of heavy handed governments, things became worse during the 20th century as such regimes were further encouraged by the theories of European and American socialists of the New Deal variety (i.e., John Maynard Keynes & company) who preached that new trade barriers, price and wage controls, and vast redistribution of wealth would solve the economic problems of the world. Such barriers, it was believed, would free Latin America from international competition and corporate "meddling" and bring prosperity to the whole region.
As has now become obvious, such policies bring anything but prosperity, and the more the Latin Americans attempted to pursue autarky by government fiat, the more their populations sank into poverty and economic ruin. For decades, Chile had remained relatively resistant to Dependency Theory as trade-minded governments under Eduardo Frei and Jorge Alessandri attempted to keep their economies relatively open. Yet the zeitgeist of the time overwhelmed them, and with the ascent of Salvador Allende in 1970, international trade collapsed, private firms were confiscated and nationalized, and hyperinflation took its hold on the country.
The economic disaster all ended badly, as such things tend to do, with a military coup and the Pinochet dictatorship. The downward spiral did not end merely with the end of the Allende regime, however. As even its sympathizers will tell you, the military junta was not a big fan of free-market economics. They preferred an economy that would "obey orders." Yet, protectionism and the controlled economy had proven to be such an abject failure that something had to be done, so with few other options Pinochet turned to disciples of what was then considered the radically free-market Chicago School of Economics. A total economic meltdown was avoided. The budget was balanced, regulations were lifted, the health care system was freed, and international trade resumed. Markets, as they will always do when given the chance, moved toward providing more goods at cheaper prices, and economic growth quickly began to outpace other Latin American economies.
[glow=red,2,300]Continued...[/glow]
