A. Prologue: an unstable, handout-dependent polity (1883-1970)

Chile's aggressive "War of the Pacific" (1879-83) won her the nitrate and mineral-rich northern deserts (25 to 18 degrees South) from Bolivia and Peru.

For the next four decades (up until the Great Depression), Chile would get more than 50% of all government revenue from export taxes on nitrate (Loveman, p. 177).

The tax was a flat-rate assessment per ton exported, rather than a share of profit; when world prices fell, Chile's government objected to cartel agreements to strengthen world prices by reducing production (and Chile's volume-based tax receipts). (It is unclear to me personally, however, that Chile would have been any better off with a share of profits, soaring upward during global booms, but collapsing during global depressions.)

Starting in the 1930s, copper replaced nitrate as Chile's principal foreign exchange source.

Chile tried to inject her new wealth into the economy through massive public works schemes, state industries, and protectionism. A generally increasing dependence on the state would make Chile's economy less and less competitive in the world market. Inflation, originally begun to finance the Pacific War, was never to be brought under control.

After 1933, a "superficial reconciliation ...of urban labor, reformist political movements, the traditional landed elite" (Loveman, p. 239) [and employers] was made possible by (1) mineral royalties and (2) artificially low food prices (Loveman, p. 239), maintained by (a) various subsidies to landowners and (b) exclusion of rural labor from both unionization and political participation.

President Carlos Ibáñez (1952-58) overturned this equilibrium in 1958 with an electoral reform that overthrew the rural dominance of conservatives: rural peasants got a secret ballot, and voting became compulsory (Loveman, pp. 261-62).

B. Allende's popularity and mandate

(1) Events leading up to Allende's election.
In the later years of President Jorge Alessandri's rule (1958-64) and even more under "Christian Democratic" President Eduardo Frei (1964-1970), Chile was an intended showcase of US President John F. Kennedy's "Alliance for Progress." Supposedly, if the US supported democratic left-wing reformers with generous foreign aid, potential supporters of Communist movements could be bought off.

Frei's program included land reform (dividing large estates among peasants), nationalization of chronically-unpopular foreign copper companies (with negotiated compensation), and various social programs.

The economy remained anemic; in 1965-1970, real per-capita GDP grew by only 5% (Loveman, p. 282). (Note-- this 5% must be a cumulative figure. 5% per year would have been quite respectable.) Chronic inflation continued in an annual range of 20-30%. Nowadays, it is clear the principal culprit was the heavy drag of an overgrown state sector (47% of the economy in 1970, according to Roxborough et. al, p. 76) and other politically-motivated "mercantilist" policies; in the 1970s, however, more people blamed capitalism.

Frei more-or-less kept his promises, but that did not diminish the appeal of the Marxist Left; on the contrary, rising expectations remained unfulfilled. After its failure in Chile, the "Alliance for Progress" foreign-aid-and-left-wing-reformism model lost its credibility with US policymakers.

Frei was Constitutionally barred from succeeding himself in 1970, and the Right-moderate-Left coalition that had supported him fell apart. The Right nominated former President Jorge Alessandri, while the Christian Democrat Left stuck with Radomiro Tomic, who sounded almost as Left-wing as Allende. Alessandri had been favored to win the 3-man race; Allende's plurality (Sep 1970) was a surprise.

Presidential Election Results (Loveman, p. 295)

Party/Candidate	1964	1970
Unidad Popular (Marxist coalition) Salvador Allende	39.5%	36.3%
Christian Democrats center-left Eduardo Frei (1964) left Radomiro Tomic (1970)	55.5%	27.8%
(Right) (withdrawn in 1964) (Julio Duran) Jorge Alessandri (1970)	5.0%	34.9%

The Left's actual popularity was higher than Allende's 36.2%. The 27.8% vote for Christian Democrat Radomiro Tomic cannot be considered anti-socialist, since Tomic ran a Left-sounding campaign.

Under Chilean law, Congress (who had the final say) were not required to elect Allende President with only a plurality. Nevertheless, Congress had not previously challenged a plurality, and moderate Christian Democratic deputies were not ready to start now. Congress elected Allende on conditions (Oct 1970), the most important of which turned out to be the Army's autonomy (de Vylder, p. 233--note 8 on chapter 3).

(2) Allende's Presidential powers
Salvador Allende began his Presidency hemmed in by (1) an opposition-controlled Congress, (2) an autonomous Army [but at the beginning it simply wanted to avoid political controversy], and (3) an independent judiciary. Allende had substantial executive and economic powers (de Vylder, pp. 44-46), eg setting wages and prices (de Vylder, p. 44), expropriating businesses (but only with full compensation), and temporarily seizing businesses (de Vylder, pp 138-39). Only Congress, however, could vote taxes or ratify new laws (de Vylder, p. 45).

Allende had the authority to call a plebiscite to overrule or even abolish Congress (de Vylder, p. 46), but the political reality was that his opponents would have united against such a plebiscite, and could win enough electoral support (over 50%) to defeat it.

C. Allende's program and policy

Allende hoped to buy popularity for his Unidad Popular (UP) coalition with a general 40%- 70% pay increase for UP's working-class and poor constituencies. Supposedly, this would not cause an explosion of inflation, because
(1) there were plenty of unsold goods and productive capacity waiting to be sucked in by a Keynesian boom (de Vylder, p. 59, 54; Roxborough et al., p. 79).

(2) money to pay for it could be had by

(a) expropriating unpopular large companies (Roxborough et al, p. 76; de Vylder, p. 91) and foreigners, notably Americans (de Vylder, p. 76, 140),

(b) raising taxes on the classes who supported UP's opposition (de Vylder, p. 83).

(3) price freezes could be enforced by local activists (de Vylder, pp. 58-59).

For the first year, real incomes did go up, as Allende was able to spend down foreign-exchange reserves inherited from the Frei government (de Vylder, p. 59). UP was rewarded with victories in municipal elections in April 1971 (de Vylder, pp. 78-79), but (mistakenly as it turned out) failed to exploit the opportunity to call elections for a new Congress (de Vylder, p. 79). Allende apparently believed that the borrowed prosperity could continue indefinitely, encouraging Left-wing Christian Democrats and other moderate elements to join his coalition out of self interest (Roxborough, p. 75).

D. Setbacks and Decline, 1972-73

(1) The next year, however, the economy began to unravel as inflation exploded.

(2) Leftists blamed an "invisible blockade" (investment cut-off) by expropriated Americans, speculation, and "sabotage" by domestic opponents, eg ever-escalating wage demands, strikes, and lockouts.

(a) "Speculation"?
Speculation is an inevitable result of price freezes and price controls. For the first year 1970-71, price freezes papered over the inflationary effects of huge unfunded pay increases, but, inevitably, in succeeding years the economy was marked by increasing shortages, lines, and dependence on black markets. This is more universally understood now than it was in the 1970s.

(b) "Invisible blockade"?
True, the US government and expropriated copper companies blocked foreign aid programs and further investment, but what did Allende have the right to expect? Especially egregious was his nationalization of the Gran Mineria copper mining companies: from a book value of $663.7 million, Allende's accountants deducted enough "excess profits" and other items to offer a laughable compensation of $28.3 million (De Vylder, p. 127). In any case, however, US economic pressure was only one of many unfavorable factors (de Vylder, p. 106); Allende's Chile continued to get credit from other sources, and engaged in substantial foreign trade to the end.

(c) "Sabotage" occured on various levels

1. Activities by the opposition Congress
A. Promoting and supporting inflationary wage claims-- Allende's people lacked any moral standing to complain. They wanted wage increases targeted at their followers, while the opposition demanded equal increases for everybody (de Vylder, p. 92).

B. Blocking supposedly anti-inflationary tax increases (de Vylder, p. 83)-- So? If Allende's government was serious about inflation-fighting, they could have stopped increasing spending so much.

2. Strikes and lockouts, not necessarily for bona-fide economic purposes.
The largest single strike/lockout campaign was in Oct 1972. Originally it was called by a truck-owners' association in Punta Arenas, whose contract had been cancelled by a newly nationalized factory; the new management intended to build their own socialist truck fleet (Roxborough et al., p. 116). The campaign quickly expanded into a general strike/lockout throughout the country by other truckers, factory owners, wholesalers, retailers, professionals, and others. They demanded a reversal of much of the Unidad Popular program, but their leverage was not complete. Some economic activity continued, especially where Leftists seized locked-out facilities. A compromise settlement ended the plan for a socialized trucking industry, and brought 3 military officers into the cabinet, pledged to ensure orderly Congressional elections a few months later in March 1973.

E. Descent into chaos.

F. Pinochet's coup

(1) Pinochet staged a successful coup on 11 Sep 1973.

(2) It was bloody, though no proper tabulation of casualties was made until recently. Leftist attempts to hold factories proved ineffective, as did guerrilla tactics, ferociously repressed (Roxborough et al., pp. 233-37).

(a) In their 8 Oct 1973 issue, "Newsweek" reported 2,796 bodies in the Santiago morgue. [This figure was later found exaggerated, a count of deaths from all sources since the beginning of 1973 -- Davis, p. 368]. In December 1975, the Swedish ambassador, sympathetic to the Left, estimated 15,000 killed (Roxborough et al., p. 238). Exiled Unidad Popular sources would later give estimates up to twice that (Roxborough et al., p. 238). I am told Amnesty International made an estimate of 20,000 in 1976.

(b) After Pinochet's retirement (1990), a democratically-elected Center-Left government set up the National Commission on Truth and Reconciliation (also known as the Rettig Commission) to investigate deaths during the Pinochet years. In 1992, the "National Corporation for Reconciliation and Reparation" was established to complete the work. Their final report (1996) blamed Pinochet for 2,095 confirmed deaths and 1,102 suspicious "disappearances," for a total of 3,197.

In 2003, President Ricardo Lagos commissioned an investigative body, the "National Commission on Political Imprisonment and Torture." In late 2004, they issued a report authenticating claims by 27,255 people to have been tortured during the 17 years of Gen. Pinochet's rule.

(c) Many of the centrist Christian Democrats who had opposed Allende were shocked at the degree of Pinochet's bloodshed; Chile, after all, had been nonviolent and coup-free for several decades. Pinochet's supporters replied that a bloody collision was inevitable after Allende's coalition had so thoroughly wrecked the economy, polarized society, and destroyed respect for law. The radical Left had begun to mobilize for civil war, and Pinochet simply hit them before they were ready.

(d) Comparisons: Argentina

1. Argentina's "Dirty War" military is blamed for anywhere from 9,000 (current Argentine government estimate) to 30,000 (foreign human-rights groups) deaths and suspicious "disappearances" over their entire rule (1976-83). They also were frequently guilty of gruesome torture. Pinochet's regime did not, as I recall, have such a degree of odium for torture, though they were not innocent. Most of Pinochet's bloodiness was concentrated in the first weeks of taking power, while Argentina remained fearful throughout the military period.

2. Argentina's military had more provocation: years of murder and kidnaping by Left-wing guerrillas. Some military torturing may have started in order to find and rescue kidnap victims, though the military soon found themselves on a "slippery slope."

3. Argentina's military badly mismanaged Argentina's economy, continuing the same statist Peronist economics that led inexorably to hyperinflation. If Pinochet had done equally badly with the Chilean economy, he would have far fewer defenders today.