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View Diary: Che Guevara Smacks Bush! (205 comments)

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  •  Chile again (none)
    It doesn't sound as though it has redistributed the wealth much better in spite of all the turmoil in the last years.  When I was there land reform and funding for the infrastructure was begun under Allende.  The top 10% took their money and fled, leaving the country without resources.  However, there was open debate and the people were so much more engaged and sophisticated than the Brazilians, whose conspicuous wealth, arrogance  and extreme disdain for poor were everywhere.

    Those who can make you believe absurdities, can make you commit atrocities-Voltaire

    by hairspray on Mon Dec 12, 2005 at 10:53:35 AM PST

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    •  Kind of amazing (none)
      what sixteen years of neo-liberal dictatorship will do...

      Before the upheavals of the 1960s -- the Christian Democratic "Revolution in Liberty" from 1964 to 1970 and the Allende attempt at the "via chilena al socialismo" from 1970 to 1973 -- the Chilean economy suffered from stagnation and high inflation, but there was also a highly developed welfare state that provided health care and education to almost the entire population. It would be wrong to call pre-coup Chile an egalitarian society, but there were definite redistributive mechanisms in place and functioning.

      The Chicago Boys eliminated all that, and in that process completly reoriented the Chilean economy. The welfare state is gone, the safety net is gone, public sector health and education suck, and the distribution of wealth has gotten exponentially worse.

      One thing the dictatorship did not do, however, was restore the old landed elite. The agrarian reform (which had begun under conservative president Jorge Alessandri in the early 60s) eliminated the landed estate by the time you visited Chile in the early 70s, and the country now has a fairly open free market in agrarian land.

      •  "Chicago boys"=Kissinger and (none)
        the CIA--a gangland style hit?  Just trying to follow along...
        •  Good question (none)
          but not quite the right answer...

          In the 1950s, the Catholic University of Chile (the second most prestigious school in the country) established a doctoral exchange program in economics with the University of Chicago, under which the top Chilean students went to UC to complete their degrees.

          This exchange program happened to coincide with the development of the so-called Chicago School of economic theory, mostly at the hands of Milton Friedman and Friedrich von Hayek. The Chicago School is characterized by a rigid belief in free markets, and at least initially it promoted strict monetarist solutions to economic problems.

          When the Chilean coup came down in 1973, the Chicago-trained economists were the most intellectually sophisticated group of economic thinkers in the country. They developed a blueprint for "shock therapy" that they presented to the coup plotters, if I remember correctly about three or four months before the coup itself. Many historians believe the existence of the Chicago plan contributed to the success of coup organizers in winning support within the armed forces.

          After the coup, the Chicago economists were originally iced out of decision-making, but as the economic crisis worsened through 1974 they were finally called on to put their shock therapy into practice. They did so in 1975, and succeeded in stopping triple or quadruple digit inflation almost in its tracks. The cost, of course, was skyrocketing unemployment rates, in excess of thirty percent, and a year and a half of negative growth, but Chile did recover economically in the late 1970s. Of course, the country experienced a second depression in the early 1980s as a result of the global debt crisis, but that's another story.

          Chileans started calling them the "Chicago Boys" because they were all relatively young and they formed a clearly defined group. Many of them remain prominent members of Chile's nouveau riche.

      •  Chile in 1973 (none)
        was very interesting.  Our OAS hosts believed the prevailing culture of paternalism had robbed the peasants of their independence and that the reforms of that period were important.  In a museum I visited I saw rooms full of objects intended to get the poor to think creatively.   For example, a bed was made with old wood frame and rubber tire cut into strips were weaved to make the spring on which to lay a mattress.  Old cotton rags were made into mattresses.  The rooms were full of these ideas at self help.  Of course the busses were all free.  The physician brother in-law of our host was happy that Allende took money from the military and gave it to the health system.  On the other hand there were those furious because the peasants who got land and animals, often ate their breeding stock making them helpless again.  A period of growth and development we had no right to thwart.

        Those who can make you believe absurdities, can make you commit atrocities-Voltaire

        by hairspray on Tue Dec 13, 2005 at 09:45:43 AM PST

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