Subject: RE: words wanted :allende
From:
skw@
Date: 21 Dec 98 - 09:42 AM
Thanks, Brian. I did bring the words on Thursday, only to find I was cut off-line ... Some matter of a couple of digits they didn't tell me about.
I brought some notes, though, just in case someone's interested: [1998:] Pinochet is credited with the Miracle of Chile, the successful experiment in free markets, privatisation, deregulation and union-free economic expansion whose laissez-faire seeds spread from Santiago to Surrey, from Valparaiso to Virginia. [...] Chile can claim economic success. But that is entirely the work of Marxist leader Salvador Allende, who saved his nation, miraculously, a decade after his death. In 1973, the year the general seized power, Chile's unemployment rate was cut by 4.3 per cent. In 1983, after ten years of free-market modernisation, unemployment reached 22 per cent. Real wages declined by 40 per cent under military rule. In 1970, 20 per cent of Chile's population lived in poverty. By 1990, the year 'President' Pinochet left office, the number of destitute people had doubled to 40 per cent. Quite a miracle. [...]
Under the spell [of disciples of Milton Friedman] the General abolished the minimum wage, outlawed union bargaining, privatised the pension system, abolished all taxes on wealth and business profits, slashed public employment, privatised 212 industries and 66 banks and ran a fiscal surplus. [...] After nine years of Chicago-style economics, Chile's industry keeled over and died. [...] Pinochet sold off the state banks at a 40 per cent discount against book value. They fell into the hands of two conglomerate empires, controlled by speculators [who used them to buy] up manufacturers, then leveraged these assets with loans from foreign investors [...]. By 1982, the pyramid financial game was up. [...] Industry shut down, private pensions became worthless, and the currency swooned. Riots and strikes by a population too desperate to fear bullets forced Pinochet to boot out his beloved Chicago experimentalists.
Reluctantly, the General restored the minimum wage and collective bargaining. Having previously decimated the ranks of state employees, he authorised a programme to create 500,000 jobs. Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Margaret Thatcher. (The junta even instituted what is today South America's only law restricting the flow of foreign capital.) [...] To save the nation's pension system, Pinochet nationalised banks and industry on a scale unimagined by Salvador Allende [,] offering little or no compensation. While most were eventually reprivatised, the state retained ownership of one industry: copper. [...] Copper has provided between 30 and 70 per cent of the nation's export earnings. This is the hard currency that has built today's Chile. The proceeds of the mines seized from Anaconda and Kennecott in 1973 was Allende's posthumous gift to his nation.
Agribusiness was the second locomotive of the Allende years. According to Professor Arturo Vasquez of Georgetown University, Washington DC, Allende's land reform, the break-up of feudal estates (which Pinochet could not fully reverse), created a new class of productive tiller-owners who, along with corporate and co-operative operators, now bring in a stream of export earnings to rival copper. [...]
Keynes and Marx saved Chile, not Friedman. But the myth of the free-market miracle persists because it serves a quasi-religious function. (Gregory Palast, The Observer, 22 Nov)
More notes can be found at http://members.aol.com/folkiste/index.html
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sj
