Salvador Allende’s 1970 election to Chile’s presidency and his subsequent efforts to quickly transform Chile into a hard left socialist country offers some interesting parallels to President Barack Obama 2008 win and policies.
First, the differences.
The Chilean election was a three man race. Allende won with slightly over a third of the vote. Obama won 52% of the vote in a two man race.
Allende ran on a far left agenda. Everyone in Chile knew exactly what they would be getting with a President Allende. President Obama ran a stealth campaign of vague “hope and change” with no scrutiny by the media. It’s fair to say, that while the two ends of the political spectrum had their hopes and/or fears of exactly what an Obama presidency might hold for the country, the vast middle did not.
Current polling suggests that had President Obama been clear about his plans and policies, he would’ve received between 30-40% of the popular vote. A parallel with Allende’s little over a third of the popular vote win or not? You decide.
Once in power, President Allende embarked on a crash course in socialism for his country with all the attendant nationalization of industry, control of banks, and radically increased government spending. He also reoriented Chile’s foreign policy by opening and expanding relations to communist countries such as Cuba, the Soviet Union, and China.
A coup d’etat led by General Augusto Pinochet in the fall of 1973 ended the Allende government and led to Allende’s suicide.
Since Salvador Allende is a sainted martyr for the left and Augusto Pinochet the most terrible of boogymen, there is a lot of nonsense written about both.
However, what is not in dispute is the result and aftermath of Allende’s policies. (Bolding is mine).
When the government of Salvador Allende fell in September 1973, Chile’s annual inflation rate was 286 percent. Three months later, after the new government corrected the most obvious distortions caused by price controls, inflation zoomed to 508 percent. For example, the price of basic goods dou bled every two months. A family that used to buy five gallons of milk could now afford to buy just one gallon. At one point, these same families could not find milk in the grocery fridges. Milk could be bought only on the black market at a very high price.
Prices for the majority of basic goods were fixed by the government in 1973. Even though Chile was and still is a small economy, the level of protectionism was high. By the end of 1973, the nominal average tariff for imports was 105 percent, with a maximum of 750 percent. Non-tariff barriers also impeded the import of more than 3,000 out of 5,125 registered goods. Just as economic theory predicts, large queues in front of stores were usual in Santiago and other cities in Chile as a result of the scarcity caused by price controls.
The decline in GDP during 1973 reflected a shrinking productive sector in which the main assets were gradually falling under government control or ownership through expropriations and other government interventions in the economy. As a result, the government’s share of total sector production reached 70 percent in 1973, except for the industrial sector where it was 40 percent.
The fiscal situation was chaotic. The deficit reached 55 percent of expenditures and 20 percent of GDP and was the main cause of inflation because the Central Bank was issuing money to finance the government deficit.
By the end of the Allende government, the gross savings rate was 6 percent and the investment rate was 7.9 percent—the worst figures since the 1960s. This meant that in many industries, no new machines were installed, no new firms were started, and fewer and fewer new jobs were created. There were no capital markets, and the government-controlled interest rates did not reflect scarcity of funding. The balance of payment (BOP) deficit increased over a period of three years, and the socialist government increased its foreign debt by 23 percent.
The standard leftist response is that Allende’s policies led to a fairer, more equitable Chile.
Someone could be tempted to think that the Chilean economy of the early 1970s was chaotic and inefficient but ethically correct because of its social commitment, but this could not be further from the truth. Social policies for housing, education, and health failed to help the 20 percent of Chileans living in extreme poverty. These social policies just further organized workers and middle-class interest groups.
Of course, there are differences between 1970-73 Chile and 2009 United States of America. Still, given the Obama administration’s increasingly frivolous spending, the single-minded pursuit of costly and unpopular socialized medicine, and the capricious decision of President Obama to forge cap and trade agreements at Copenhagen, it’s possible to imagine this quote coming from one of Obama’s czars, flaks, officials or perhaps the man himself:
This crisis was homemade….One anecdote is instructive: When some people complained about the excessive increase in the money supply that was causing high inflation in 1973, the Central Bank president at the time said that money supply was a “bourgeois variable,” irrelevant in the construction of Chilean socialism.
The language would be different, more hopey-changey, but haven’t we seen this dismissive attitude before?
Though it’s controversial to be sure, I consider General Augusto Pinochet a Chilean patriot. A very flawed patriot to be sure, but a Chilean patriot nonetheless.
There’s no doubt that Pinochet was a hard man, a terrible man. He eliminated a democratically elected government. He followed his coup with a purge of socialist supporters in government, media, and academia which in hundreds, if not thousands, of cases led to their deaths and executions. He used his position to embezzle from the state.
He also was a man clearly worried about the economic destruction of his country and citizens, a man concerned that his country was becoming another Soviet dependent basket case like Cuba. One of the first actions he took as leader of Chile was to consult Milton Friedman, a Noble Prize winning free-market economist, on how to undo and rebuild the damage wrought by the Allende years. One of the last actions he took was the restoration of popularly elected government. In other words, however reluctantly, Pinochet gave up his power.
Given these actions, it’s easy to see Pinochet as a Chilean patriot in the mode of 1970′s South America. A hard and ruthless man who ironically used hard tyranny to eliminate the soft tyranny of socialism to restore the economic health and freedom to his country and it’s people.
However, General Augusto Pinochet is not the model for, nor could he ever be an American patriot.
Pinochet could never be a hero nor even, a wish of conservatives, of the American right. In fact, he’s the exact opposite.
Remember, the thing that American conservatives wish to conserve, that we hope to preserve is the Constitution of the United States of America. The Constitution is our founding document. It is a document that specifically limits government power. It centers power in the free citizens of the United States.
This is why, despite our frustrations with President Obama, we focus on the ballot box. We want to defeat him and his allies in the upcoming elections. We want hard men and women on our side, but we want hard men and women of principle, men and women who believe in the Constitution. Not soft men like John McCain or Lindsay Graham who love the art of the deal or media attention more than they love freedom.
Our model is George Washington, the general who refused kingship to build a country based not only on economic but personal freedom.
So, who is it that dreams of their own personal Pinochet? Who wants a dreamy, all-powerful daddy who will force their wishes upon the people?
Not surprisingly, it’s people of the left.
Violet, at Reclusive Leftist, is “Dreaming of Diocletian“.
Yep, an emperor, that’s who she’s dreaming about. Nero and Caligula are better fits for leftist governmental tendancies. Joe Biden as Vice-President is pretty much the equivalent of Caligula’s horse as senator, but hey Diocletian’s close enough.
As Instapundit remarks about Diocletian:
I think he’s a poor model. He took power in a military coup, vastly enlarged the bureaucracy, and tried to solve inflation caused by lousy fiscal policy with price controls, a disastrous failure. He persecuted Christians, and though he purchased some temporary stability via authoritarianism, he didn’t address the core problems and left an empire that was, overall, weaker than before. It says bad things when core Democratic constituencies think that’s what we need now . . . . Hope and change, anyone?
Military coup, eh? Not only are her instincts anti-Constitutional, thus anti-American democracy, but if you want a real laugh take a look at her political wish list. Probably, all that would be required to implement it is a complete overhaul of reality and human nature.
Is it any wonder that dreams of the left always end in tyranny whether soft or hard?
Who else has dreams, or rather, nightmares, about the coming of Pinochet?
Perhaps, President Obama. How else to explain this bit of frankly unconstitutional weirdness so high on his agenda?
I’ve quoted this economic article fairly extensively, it was written by Hernan Buchi Buc, Chile’s Minister of Finance from 1985-89. Please go read it. It’s not long and lays out most of the actions and the philosophy for those actions that will be needed to repair our economy after the defeat of Obama and the Democrats in the upcoming elections.
I’m going to end with another quote from Mr Buc.
Transforming a country’s economy requires understanding that reforms are not the property of a targeted specific group, a political party, or even a government. Good economic policies are every one’s policies and form part of the country. When this concept is ingrained in people’s minds, the rational behavior is to defend reform efforts and not to attempt to destroy them through the political process. In this sense, the ideal is for good policies to become part of the country’s culture.
If Violet and President Obama could simply learn the wisdom contained in that quote, they’d have no reason to dream of imperial power. Nor fear it’s reactive rise from their destructive policies.
They’d have no reason to spend their time waiting for Pinochet.