The Neoliberal Ghost of Pinochet Is Finally Being Exorcised from Chile — Paul Antonopoulos

More than 46 years of initially military imposed neoliberalism has finally exploded into widespread frustration, protest and violence. This neoliberalism culminated in 2017 with twelve businessmen, among them Chilean President Sebastián Piñera, monopolizing at least 17% of the national GDP, demonstrating the huge gap in wealth equity. There is little doubt why the latest protests have exploded violently, with 18 dead so far – Piñera had declared war on his own people to protect his lucrative monopoly racket.

It is without surprise he had declared war. The aggressive neoliberalism that has dominated Chile since the 1973 Chilean coup d’état when socialist President Salvador Allende was killed and eventually replaced by neoliberal Augusto Pinochet, with the backing and blessing of U.S. President Richard Nixon, Henry Kissinger, the CIA and the so-called “Chicago Boys” neoliberal economic team. 

Although the so-called communist threat was defeated in Chile, it was not until 1990 for the kinder face of neoliberalism to return to the country, with the first democratic election taking place since the coup. The return to democracy had not meant any differences to the economic system....

The pernicious globalist model was applied and deemed a miracle because of significant GDP growth. However, this is only to the benefit of shareholders and private companies and does not reflect on the average Chilean experience. According to the Organization for Economic Cooperation and Development (OECD), the Gini coefficient value, a method to measure wealth distribution, stood at a record 0.50 in 2017, one of the highest inequality coefficients in the world....

Neoliberal propagandist Enrique Krauze Kleinbort – accused of the coup attempt to overthrow Mexican President López Obrador – proclaimed that Chile was ‘the role model’ for Latin American economic growth. If the inequality is considered a ‘role model,’ it shows that the oligarchs of Latin America have not realized a growing trend of violent opposition to neoliberalism, as the recent case in Ecuador demonstrates....

This is not "turbo-capitalism," but neo-feudalism.

Global Research
The Neoliberal Ghost of Pinochet Is Finally Being Exorcised from Chile
Paul Antonopoulos

Matias Vernengo — Venezuela is about to explode

The Empire at work. Is history about to repeat?

Al Jazzera — Opinion
Venezuela is about to explode
Matias Vernengo | Associate Professor of Economics, Bucknell University

See also

Naked Keynesianism
Lula da Silva is a political prisoner. Free Lula!
Matias Vernengo | Associate Professor of Economics, Bucknell University

Yves Smith — New IMF Paper Challenges Neoliberal Orthodoxy

While the IMF’s research team has for many years chipped away at mainstream economic thinking, a short, accessible paper makes an even more frontal challenge. It’s caused such a stir that the Financial Times featured it on its front page. We’ve embedded it at the end of this post and encourage you to read it and circulate it.

The article cheekily flags the infamous case of the Chicago Boys, Milton Friedman’s followers in Pinochet’s Chile, as having been falsely touted as a success. If anything, the authors are too polite in describing what a train wreck resulted. A plutocratic land grab and speculation-fueled bubble led quickly to a depression, forcing Pinochet to implement Keynesian policies, as well as rolling back labor “reforms,” to get the economy back on its feet.

The papers describes three ways in which neoliberal reforms do more harm than good.…

Now that the wheels are coming off, the knives are coming out.

Naked Capitalism
New IMF Paper Challenges Neoliberal Orthodoxy
Yves Smith

David F. Ruccio — History will not absolve him*

The headlines (e.g., here and here) are all pretty much the same: Patricio Aylwin, who died yesterday, successfully guided Chile to the restoration of democracy.

But in the interests of real history, we need to keep in mind what actually happened (as with others, such as Jeffrey Sachs): Aylwin played a central role in the military coup that overthrew the democratically elected government of Salvador Allende in 1973.…

Occasional Links & Commentary
History will not absolve him*
David F. Ruccio | Professor of Economics, University of Notre Dame

See also

Rise up at night

Lee Brown — Hugo Chavez Helped Overturn Neoliberalism in Latin America

Puncturing the myths about neoliberalism (Pinochet) and Bolivarianism (Chavez).

telesur
Hugo Chavez Helped Overturn Neoliberalism in Latin America

Lee Brown

René Rojas — Insurgency and Orthodoxy

There is no question that Chile’s workers and poor are better positioned today than they were just ten, to say nothing of twenty, years ago. Indeed, popular forces enjoy the most auspicious balance of power since the 1973 coup that stamped out Chile’s democratic road to socialism. And Bachelet did shepherd through a series of reforms in her first year, including higher education legislation that attracted international attention.

But obtaining a firmer grasp on the prospects for emancipatory politics in Chile calls for examining both the electoral results and first-year reforms in relation to elite interests and movement strategies. Such scrutiny reveals an unequivocal preservation of bipartisan oligarchic neoliberalism, along with continued extra-institutional opposition from merging movements.....

Why is it so difficult to shake neoliberalism even after elections? Neoliberalism — the political theory based on the market state and market fundamentalism — has been institutionalized globally over the last several decades and it will take broad and deep reform to change it. This, too, will take decades unless there is global revolution, which seems unlikely. A lot of time and money went into a building a powerful neoliberal consensus. It's won't be easy to reverse it when the interest of the powerful and wealth is to preserve and extend it.

Jacobin » Blogs
Insurgency and Orthodoxy
René Rojas, doctoral candidate in sociology at New York University

Corey Robin — The Calculus of Their Consent

Remembering Gary Becker (et al)

Kathy also mentions this article that Becker wrote in 1997 about the Chicago Boys who worked in or with the Pinochet regime. Becker’s conclusion about that episode?

In retrospect, their willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile.

No real surprise there. Many free-marketeers, including Hayek, either defended the Pinochet regime or defended those who worked with it.

Oh, what the heck, the Allies forgave all the capitalists and scientists that worked with Hitler on the Nazi war machine.

Crooked Timber
The Calculus of Their Consent
Corey Robin

Ignacio Portes — How the Left Underestimates Chile’s Right-Wing Keynesians

Chile’s caste of technocrats is smarter than what the left generally gives it credit for. The country’s post-dictatorship neoliberals, most of them inside the Socialist-Christian Democrat coalition, not only inherited the disciplined workforce of the Pinochet years, they also have read Keynes, and use his recipes all the time to escape the typical problems that the more fanatic and less pragmatic market fundamentalists create on their own economies, although they do it in quite a conservative way....

The social divide is similar to what it was in the Pinochet years (crumbs notwithstanding), but demands for reform have been successfully contained for more than 2 decades since the end of the dictatorship, and have only recently started surfacing.

And when they surface, what both the Pinochet/libertarian right and the more neoliberal within the Christian Democrat/Socialist Party coalition tell the wannabe reformers is: if we do what you want and start redistributing wealth, helping the unions and so on, all the growth that Chile has benefited from by being so friendly to international capital—all it’s given us, like boosting construction, mining and other dynamic sectors—will go away. And they are right in a sense, because the world is rigged for international capital, which can boycott any government they don’t like by simply moving elsewhere.

In this context, where national workforces are being played against each other to see which of them can serve the market more effectively, it’s hard to see how a movement of students, a couple of trade unionists and well-meaning citizens and some half-assed center-left politicians inside one country could defeat such an octopus of a system. A homeostatic octopus at that, which has the power to regulate its movements in such a way as to control and eliminate any localized effort to reduce its power. Raise your taxes, raise your salaries? How bad, we are going elsewhere then, good luck paying for all that new infrastructure and investment you needed. Behave like a good boy, do what capital says? Good boy, here, have some of my dollars, have a bit of jobs and welfare, at least for as long as the resource-extracting economy lasts or someone starts behaving better than you....

Still, all these extractive, export-based models in Latin America tend to run in the long term into the same problem: whenever the international prices for the commodities they export fall, their highly dependent economies weaken or collapse. When that happens, the masses who more or less kept quiet despite their subordinate position, placated by continued growth, find out they suddenly don’t even have an expanding pie anymore, and even worse, that their rulers are coming for a bigger share of it even if it’s now shrinking, in order to “make the economy more competitive” and re-boot it into profitability and growth, a process which makes class struggle inevitably resurface, exposing the farcical nature of the neoliberals’ harmonious depiction of society, at no small social cost.

So there might be no choice but this: to start thinking of ways of transcending national barriers to stop the race to the bottom, and instead join efforts to confront it. Neoliberalism, neo-imperialism, and neocolonialism still rule through the power of "free markets, free trade, and free flow of capital," along with the power that capital bestows on its owners.

Naked Capitalism

Ignacio Portes: How the Left Underestimates Chile’s Right-Wing Keynesians

Yves Smith 

Frank Pasquale — Schmayek's Shutdown

Mentions MMT and the platinum coin.

Balkiniztion

Schmayek's Shutdown
Frank Pasquale

Leigh Phillips — Chile’s Early Cybernetics: How Allende Attempted a Socialist Internet to Organize the Economy

The story of Salvador Allende, president of the first ever democratically elected Marxist administration, who died when General Augusto Pinochet overthrew the young administration in a US-backed coup on 11 September, 1973, is well known amongst progressives.

But the human rights horrors and tales of desaparecidos have eclipsed – quite understandably – the pioneering cybernetic planning work of the Chilean leader, his ministers and a British left-wing operations research scientist and management consultant named Stafford Beer. It was an ambitious, economy-wide experiment that has since been described as the ‘socialist internet’, an effort decades ahead of its time.,,,

The 29-year-old head of the Chilean Production Development Corporation and later finance minister Fernando Flores - responsible for the management and coordination between nationalised companies and the state, and his advisor, Raul Espejo, had been impressed with Beer's prolific writings on management cybernetics, and, like Allende, wanted to construct a socialist economy that was not centralised as the variations on the Soviet theme had been....

Paul Cockshott, a University of Glasgow computer scientist who has written about the possibility of post-capitalist planning aided by computing, is a big admirer of Cybersyn as a practical example of the general type of regulation mechanism he advocates: ‘The big advance with Stafford Beer's experiments with Cybersyn was that it was designed to be a real-time system rather than a system which, as the Soviets had tried, was essentially a batch system in which you made decisions every five years.’...

When the government faced a CIA-backed strike from conservative small businessmen and a boycott by private lorry companies in 1972, food and fuel supplies ran dangerously low. The government faced its gravest existential threat ahead of the coup. It was then that Cybersyn came into its own, when Allende's government realised that the experimental system could be used to circumvent the opposition’s efforts. The network allowed its operators to secure immediate information on where scarcities were at their most extreme and where drivers not participating in the boycott were located and to mobilise or redirect its own transport assets in order to keep goods moving and take the edge of the worst of the shortages. As a result, the truck-owners' boycott was defeated.

Fascinating post. Ahead of its time. I have long thought that something this is eventually going to be the way distribution takes place. The market system is too inefficient since it is so subject to asymmetry.

SolidarityEconomy.Net
Chile’s Early Cybernetics: How Allende Attempted a Socialist Internet to Organize the Economy
Leigh Phillips via Red Pepper UK

John Pilger — Kissinger and Chile: In an Age of Vigilantes, There Is Cause for Optimism

The most important anniversary of the year was the 40th anniversary of September 11, 1973 - the crushing of the democratic government of Chile by Gen. Augusto Pinochet and Henry Kissinger, then US secretary of state. The National Security Archive in Washington has posted new documents that reveal much about Kissinger's role in an atrocity that cost thousands of lives.

In declassified tapes, Kissinger is heard planning with President Richard Nixon the overthrow of President Salvador Allende. They sound like Mafiosi thugs. Kissinger warns that the "model effect" of Allende's reformist democracy "can be insidious." He tells CIA director Richard Helms, "We will not let Chile go down the drain," to which Helms replies, "I am with you." With the slaughter under way, Kissinger dismisses a warning by his senior officials of the scale of the repression. Secretly, he tells Pinochet, "You did a great service to the West."...

Understanding Kissinger's criminality is vital when trying to fathom what the US calls its "foreign policy." Kissinger remains an influential voice in Washington, admired and consulted by Barack Obama. When Israel, Saudi Arabia, Egypt and Bahrain commit crimes with US collusion and weapons, their impunity and Obama's hypocrisy are pure Kissinger. Syria must not have chemical weapons, but Israel can have them and use them. Iran must not have a nuclear program, but Israel can have more nuclear weapons than Britain. This is known as "realism" or realpolitik by Anglo-American academics and think-tanks that claim expertise in "counterterrorism" and "national security," which are Orwellian terms meaning the opposite.

In 2006, I interviewed Duane "Dewey" Clarridge, who ran the CIA in Latin America in the 1980s. Here was a true "realist." Like Kissinger and Nixon on the tapes, he spoke his mind. He referred to Salvador Allende as "whatshisname in Chile" and said "he had to go because it was in our national interests." When I asked what gave him the right to overthrow governments, he said, "Like it or lump it, we'll do what we like. So just get used to it, world." 

While Chile is recovering from the overthrow of Allende and the right wing is still in power, the rest of Latin America is veering left.

The world is no longer getting used to it. In a continent ravaged by those whom Nixon called "our bastards," Latin American governments have defied the likes of Clarridge and implemented much of Allende's dream of social democracy - which was Kissinger's fear. Today, most of Latin America is independent of US foreign policy and free of its vigilantism. Poverty has been cut almost by half; children live beyond the age of 5; the elderly learn to read and write. These remarkable advances are invariably reported in bad faith in the West and ignored by the "realists." That must never lessen their value as a source of optimism and inspiration for all of us. 

Truthout | Op-Ed

Kissinger and Chile: In an Age of Vigilantes, There Is Cause for Optimism
John Pilger

Remind me what the difference between neoliberalism at its worst, as displayed by Kissinger, and fascism is. One of Nixon's worst appointments and the most powerful and nefarious. When the history is written he will go down as the man that lost Latin America for the US.

Agony of Chile’s dark days continues as murdered poet’s wife fights for justice

When Joan Jara went to identify the body of her husband, Victor, she found it riddled with 44 bullets and dumped among a pile of corpses in the Santiago morgue. The poet’s wrists and neck were broken and twisted. Where his belly ought to have been was a gory, gaping void.

The memory of that grim scene soon after the Chilean coup – on 11 September 1973 – is still painful for Jara, but it is not the only cause of her grief. The prime suspect in the killing, a former lieutenant in the Chilean army, is still alive and at liberty in the US, where he has citizenship through marriage.

Now the campaign to extradite him to his homeland has taken a step forward after Pedro Barrientos Nuñez, who lives in Florida, was served notice of a lawsuit in the US accusing him of torture, extrajudicial killing and crimes against humanity 

But many of the general’s former supporters argue the events of 1973 are now misrepresented. “Political parties have demonised anything vaguely related to the military government. People talk of abuses of human rights, but that is wrong,” said Roberto Mardones, the administrator of the Pinochet Foundation, which has an exhibition of the general’s medals and books (many on Napoleon) and a mock-up of his office.

“In 1973 citizens were desperate for change. There was a lot of hate. There were strikes, shortages of gas, sugar, matches and nappies. When the junta proclaimed on the radio that they would bring peace and stability, there was euphoria. I went out with my family to celebrate. It was like a carnival.”

The gulf between such views and those of the victims shows the difficulty of reconciliation in Chile after 40 years.

Joan Jara said the US could now help by recognising its role and supporting efforts to bring the accused to justice 

“I appeal to people in the United States to put pressure on their government to respond to our appeals,” she says. “The coup was supported and financed in part by the CIA so the American government at that time had some responsibility for what happened. I know many in the US condemned the coup and were in solidarity with the people of Chile and the victims of executions, disappearances and torture. This case is for all of us.”

The Raw Story
Agony of Chile’s dark days continues as murdered poet’s wife fights for justice
Jonathan Watts, The Guardian

Two take-aways for the contemporary US.

First, extreme political polarization and economic inequality are social dynamite that only fools play with.

Second, neoliberal intellectuals and economists have gone of record that dictatorship and fascism are preferable to  socialism as long only temporary, as Ludwig Mises said of Hitler, and prominent neoliberal economists Milton Friedman and Friedrich Hayek took the side of Pinochet's "reform" against Allende's "socialist depredation," while the US not only sanctioned the coup but treated it as a black operation in US imperial and colonial interests. This is a baseless equation of neoliberalism as a political stance with liberal democracy.