Chile: 50 years after the coup that mixed the dictatorship with extreme economic liberalism

The presence of the ultraliberal Javier Milei in the final of the Argentine presidential elections reactivates a question that has been in force for half a century: whether extreme degrees of economic liberalism (crude capitalism or capitalism without soda, as Antonio Muñoz Molina has just called it) are possible within a democratic framework, or only in countries with iron dictatorships that suffocate social rights, or apply the crusher of dissidents, as happened after the coup d’état against Salvador Allende, of which tomorrow marks 50 years.

The monetarist theses of the Chicago School have had one of their most orthodox versions in history in Pinochet’s Chile (1973-1990), much more than in the centers in which they were theorized. What they did not dare to do in the US they experienced in the periphery. In that Chile there was a strange marriage between the economic ultraliberals and the fascist military who applied Operation Condor to physically exterminate their opponents. The Chilean economic model of the Chicago Boys was long considered the purest in the world within ultraliberalism. To such an extent that his greatest guru, Milton Friedman, came to feel alarmed by this overlap between economic liberalism and dictatorship. In an interview with Mario Vargas Llosa, when the latter asked him if he had any moral doubts when observing that his theories were generally applied in countries with authoritarian governments (also in the Argentina of Videla and Martínez de Hoz): “No”, responded Friedman, “I don’t like military governments, but I look for the lesser evil.” According to Friedman, his neoliberalism was dangerous to impose under military conditions, “since it is perfectly possible to apply it under a democratic civilian regime.”

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Fifties of the last century: the Catholic University of Chile establishes an agreement with the Chicago School. A group of young Chilean social scientists went to study economics with Milton Friedman. He is the first generation of Chicago Boys. Then they returned and taught Friedmanism at the Faculty of Economics of that university, in Santiago. When the Popular Unity took over the government in 1970 through votes, some left and others stayed in the interior of Chile. There they developed an economic model for the country, which they showed in military media. When the espadones carry out the coup d’état and forcibly overthrow Allende, Pinochet calls them to take charge of the country’s economy. This is how “the Sergios” appear (Sergio de Castro, Sergio de la Cuadra), Rolf Lüders, Álvaro Bardón, Hernán Büchi, André Sanfuentes,… In the language of the body, this combination of exhausted soldiers and economic yuppies, who share each other, is very peculiar. the address of the country.

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Friedman declared in 1976, and it is true: “I have not been directing Chile’s economic policy! For a year now I have been feeling flattered or simply amused by the powers attributed to me. I was in Chile six days a year ago (all the newspapers are illustrated with the photograph of the not yet Nobel Prize winner in Economics with Pinochet) and yet they consider me the guide of the economic policy of that government.” Friedman returned to Chile in 1981, presiding over a meeting of the Mont Pelerin society, a kind of international of economic liberalism founded in 1947 by Hayek. He is welcomed back by the traitorous general who from the beginning tried to legitimize his regime through the economy. On the contrary, Mont Pelerin had the dignity not to meet in Spain while Franco was alive.

The economic and political models of the countries of the southern Latin American cone (Chile, Argentina, Uruguay, Paraguay) are very similar: an extreme liberal practice in the first, privatizations and everything free except the exchange rate of the currency with respect to foreign currencies, that was regulated and planned. And it was forbidden to speak out loud, demonstrate, elect representatives to Parliament or give voice to union delegations that defended employees. The law of the strongest.

For a generation of citizens it is impossible to forget the experience of Salvador Allende, and his tremendous end.

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