FacebookTwitterGoogle+RedditEmail

Chile’s Neoliberal Flip-Flop

by

Milton Freidman (1912-2006) labeled it the “Miracle of Chile,” as his “Chicago Boys,” a considerable group of Chilean economists who studied at the University of Chicago, established his neoliberal principles under the tutelage of General Augusto Pinochet from 1974-90.

The infamous general overthrew Salvador Allende’s socialist Chilean government in a coup d’état in 1973 with help from classified CIA support as well as cloak-and-dagger cheerleading from distant corners of the world, Milton Friedman in Chicago and Henry Kissinger in Washington, D.C.

Thereafter, Chilean economic policy “deregulated and privatized,” including the breakdown of state-controlled pension systems, state industries, and state banks (sound familiar, Southern Europe?) And, of course, taxes were reduced. Forthwith, Chile unfettered itself from state control and turned the economy lose into the lair of “the freedom of the markets.”

Thereafter, Milton Friedman never stopped grinning, and Henry Kissinger smiled for the first time ever, he once remarked: “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its people. The issues are much too important for the Chilean voters to be left to decide for themselves.” (Source: Timothy David Clark, Dept. of Political Science, Putting the Horse Before the Cart: Neoliberalism and Post-Neoliberalism in Chile, York University, June 15, 2012.)

As for the gory details of CIA involvement in the Chilean coup d’état of 1973, Costa-Gavras’ film “Missing” (Universal Pictures, 1982) staring Jack Lemmon and Sissy Spacek exposes the surreptitious U.S. involvement via CIA operatives, supportive of Pinochet’s cold-bloodied massacre of students and other innocent bystanders. Not surprisingly, the film was removed from the U.S. market following a lawsuit against the director and Universal Pictures by former ambassador Nathaniel Davis for defamation of character. When Davis lost his lawsuit, the film was re-released by Universal in 2006.

The face of neoliberalism in Chile today is disheartened, reflecting deep losses for the wealthy class as the people of the country reject Milton Friedman’s neoliberal policies, including clever tax evasion techniques by the business class. Could this be the start of a worldwide movement against neoliberalism?

After all, Chile is the country that neoliberal advocates crowned their “newborn” in the battle against big government, “get government off our backs,” according to Milton Friedman (and, Reagan picked up on the adage.) But, au contraire, according to the film “Missing,” fascism took control over Chile. Is it possible that Friedman and Kissinger secretly cherished a fascist empire, where control would be complete, disguised as “the land of individual economic freedom?” Whatever their motives, that’s what they got, and they never hesitated to revere Chile’s remarkable economic achievements, fascism and all, which is powerfully expressed in the film “Missing,” from end to end the heavy hand of fascism is ever-present.

Today is a new day as the people of Chile abandon decades of rotting neoliberal policies. They’ve had enough of Milton Freidman. The people have decided that the “state” is a beneficial partner for achievement of life’s dreams. The “state” is not the menacing force of evil preached by Margaret Thatcher and Ronald Reagan.

The people of Chile are embracing an anti-neoliberalistic nation/state for the first time in over four decades. Will the world follow in their footsteps similar to the world adopting the principles of the “Miracle of Chile” these past four decades?

As for the new way forward, it’s all about student debt. Yes, student debt was the catalyst behind Chile’s repudiation of neoliberalism. In 2011 students in Chile made headlines by launching nationwide strikes over high tuition costs that drove their families into debt (sound familiar?) The strike lasted for eight months.

Over time, the student marches gained recognition by other like-minded organizations like trade unions and protests of environmental degradation. According to Tasha Fairfield, an assistant professor for the London School of Economics’ Department of International Development, the strikes were pivotal: “The student movement played a critical role in creating political space,” according to Fairfield, it “dramatically changed the political context in Chile and helped to place the issues of Chile’s extreme inequalities centrally on the national agenda,” Sebastian Rosemont, Chilean Activists Change the Rules of the Game, Foreign Policy In Focus, Dec. 2, 2014.

Subsequently, the national election of 2013 swept the left wing into power with a huge wave of public support, gaining strong majorities in both houses of the National Congress as well as electing Michelle Bachelet president. The big leftward sweep came as over two thirds of the population grew to support student demands for free university tuition.

Ever since the 2013 election, neoliberal policies have crumbled like a decrepit equestrian statue of Pinochet, who carried the stigma of brutal criminality to, and beyond, the grave.

In stark contrast to 40 years ago, today, when students, armed with only stones clashed with police equipped with full regalia of riot gear, tear gas, and armored vehicles, the harsh police activity drew heavy international criticism. That, combined with more than two-thirds of the population in support of the student movement, led to a new politics, Nueva Mayoria (New Majority), a center-left coalition made up of Bachelet’s Socialist Party, the Christian Democratic Party, and the Party for Democracy.

Whereupon, Nueva Mayoria, turning up its nose to neoliberalism, raised corporate taxes from 20 percent to 25 percent and closed tax loopholes for companies and wealthy business owners. Those changes added $8.3 billion annually to government coffers, thus, serving as a source of funds to provide free education to all Chileans by 2020, as well as improved health care, and including a roll back of the for-profit schools that emerged under Pinochet’s dictatorship, which is another neoliberal fascination, witness the U.S. for-profit schools listed on the New York Stock Exchange…honestly, what’s with that?

In order to achieve success, the new Chilean politics astutely employed a key tactical move by applying the corporate tax hikes to only the largest corporations. As a result, nearly 95% of businesses are not be affected by higher taxation. This, in fact, served to secure a broad base of support for the new politics by having those who can afford to pay… Pay.

Along those same lines, the new government removed a tax dodge employed by large business owners that allowed them to mostly escape taxes on $270 billion of profits (similar to the U.S. 15% “carried interest” for private equity entities, e.g., Mitt Romney’s 15% tax rate).

Thus, it’s little wonder that public backlash is challenging neoliberalism, especially considering the conditions throughout the Pinochet regime, as described in the meticulously structured documentary film, “The Pinochet Case,” (Icarus Films, 2002), which opens with scenes of ordinary Chileans scouring the desert for the remains of family members who were tortured and killed decades previous.

Chile, “The Babe of Neoliberalism,” came to life as an experiment for the “Chicago School” of economic thought. It worked. Today neoliberal theory rules the world, laissez-faire capitalism as practiced from China to the United States, privatization, open markets, slash government, and deregulation, in short, “whatever works best for profits works best for society.” But, does it?

Forty years of neoliberal thought and practice has changed the world’s socio-economic landscape, but it only really, truly works for the same class of people today as it did 800 years ago for the nobility of the Middle Ages.

Robert Hunziker lives in Los Angeles and can be reached at roberthunziker@icloud.com.

Robert Hunziker lives in Los Angeles and can be reached at roberthunziker@icloud.com

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

April 27, 2017
Darlene Dubuisson – Mark Schuller
“You Live Under Fear”: 50,000 Haitian People at Risk of Deportation
Karl Grossman
The Crash of Cassini and the Nuclearization of Space
Robert Hunziker
Venezuela Ablaze
John W. Whitehead
Trump’s America is a Constitution-Free Zone
Ron Jacobs
One Hundred Years That Shook the World
Judith Deutsch
Convenient Untruths About “Human Nature:” Can People Deal with Climate Change and Nuclear Weapons?
Don Fitz
Is Pope Francis the World’s Most Powerful Advocate for Climate Stability?
Thomas Mountain
Africa’s War Lord Queen: The Bloodstained Career of Liberia’s Eleanor Sirleaf Johnson
Binoy Kampmark
Short Choices: the French Presidential Elections
Paul C. Bermanzohn
Monetizing My Mouth
Michael Barker
Of Union Dreams and Nightmares: Cesar Chavez and Why Funding Matters
Elier Ramirez Cañedo
“Let Venezuela give me a way of serving her, she has in me a son.”
Paul Mobbs
Cellphones, WIFI and Cancer: Will Trump’s Budget Cuts Kill ‘Electrosmog’ Research?
Incarcerated Workers Organizing Committee
The Closing of Rikers: a Survival Strategy of the Carceral State
April 26, 2017
Richard Moser
Empire Abroad, Empire At Home
Stan Cox
For Climate Justice, It’s the 33 Percent Who’ll Have to Pick Up the Tab
Paul Craig Roberts
The Looting Machine Called Capitalism
Lawrence Davidson
The Dilemma for Intelligence Agencies
Christy Rodgers
Remaining Animal
Joseph Natoli
Facts, Opinions, Tweets, Words
Mel Gurtov
No Exit? The NY Times and North Korea
Alexandra Isfahani-Hammond
Women on the Move: Can Three Women and a Truck Quell the Tide of Sexual Violence and Domestic Abuse?
Michael J. Sainato
Trump’s Wikileaks Flip-Flop
Manuel E. Yepe
North Korea’s Antidote to the US
Kim C. Domenico
‘Courting Failure:’ the Key to Resistance is Ending Animacide
Barbara Nimri Aziz
The Legacy of Lynne Stewart, the People’s Lawyer
Andrew Stewart
The People vs. Bernie Sanders
Daniel Warner
“Vive La France, Vive La République” vs. “God Bless America”
April 25, 2017
Russell Mokhiber
It’s Impossible to Support Single-Payer and Defend Obamacare
Nozomi Hayase
Prosecution of Assange is Persecution of Free Speech
Robert Fisk
The Madder Trump Gets, the More Seriously the World Takes Him
Giles Longley-Cook
Trump the Gardener
Bill Quigley
Major Challenges of New Orleans Charter Schools Exposed at NAACP Hearing
Jack Random
Little Fingers and Big Egos
Stanley L. Cohen
Dissent on the Lower East Side: the Post-Political Condition
Stephen Cooper
Conscientious Justice-Loving Alabamians, Speak Up!
Michael J. Sainato
Did the NRA Play a Role in the Forcing the Resignation of Surgeon General?
David Swanson
The F-35 and the Incinerating Ski Slope
Binoy Kampmark
Mike Pence in Oz
Peter Paul Catterall
Green Nationalism? How the Far Right Could Learn to Love the Environment
George Wuerthner
Range Riders: Making Tom Sawyer Proud
Clancy Sigal
It’s the Pits: the Miner’s Blues
Robert K. Tan
Abe is Taking Japan Back to the Bad Old Fascism
April 24, 2017
Mike Whitney
Is Mad Dog Planning to Invade East Syria?    
John Steppling
Puritan Jackals
FacebookTwitterGoogle+RedditEmail