Chapter 8 and the Political Economy of the Real

The moral conscience of Chile requires that truth be clarified, and that justice be done, as far as possible. at the National Congress on 21 May 1990

Market plus State equals less democracy. This is the equation that rules the current Chile. Alberto Mayol, 2012

1 Introduction

When the socialist was elected in 2000 there was some expectation of a progressive turnaround in the country. It did not, however, materialize. Heir to a solid left-wing tradition dating back to the nine- teenth century, contemporary Chilean history is marked by the coup led by General , who aborted the ‘Chilean way to socialism’ under the leadership of from 1970 to 1973. The dictatorship that fol- lowed, a pioneering experience of neoliberal fundamentalism, radically changed the country in all spheres. The constraints that marked the democra- tization of the late 1980s imply deep continuities, summarized in the Constitu- tion still in force today. In this context, the alliance between socialists and Christian Democrats that has dominated national politics since then has es- tablished itself as a guarantor of the system left by the dictatorship, which re- mains unshaken. In recent years, however, the so-called ‘duopoly’ began to be contested by the left in the streets and at the polls, making explicit the contra- dictions and resistance to this incarnation of neoliberal social utopia: Chilean ‘real neoliberalism’.

2 Between the and the Chilean Way to Socialism

Chile’s trajectory between the interwar depression and the 1973 coup is marked by national developmentalism and institutional stability. In economics, the

© koninklijke brill nv, leiden, ���� | doi:10.1163/9789004419056_010

172 Chapter 8 prevailing notion borrowed from the Economic Commission for (ecla), whose offices were set up in , was that na- tional industrialization was a necessary premise for sovereignty. In politics, the Chilean presidents succeeded each other between 1932 and 1973 in accordance with the constitutional order, a unique phenomenon in South America. In a significant part of the period, the Communist Party was not considered illegal and, like the socialists, disputed the presidency and directed ministries, which led part of the left to uphold the myth of Chilean democratic exceptionalism (conversation with Álvarez 2017). After participating in Popular Front governments between 1938 and 1952, the left, with the socialist Salvador Allende as its candidate, was defeated by a small margin in the presidential elections of 1958.1 It was amid the rise of the left that the Chilean Christian Democracy (DC) was founded in 1957, pre- senting itself as an alternative to conservatism but with sensitivity to social issues. In the following elections, this party received support and financing from the US, as part of its Alliance for Progress. Faced with the right’s demise at the time, the Christian Democrat Eduardo Frei gained massive conserva- tive support in the 1964 presidential election. But to defeat the left he ended up absorbing its flags and rhetoric, including revolution. He incorporated the of copper and agrarian reform into his program, whose spirit was condensed into the campaign slogan ‘Revolution in Freedom’. In practice, the Christian Democrat government has faced the inherent con- tradictions of conservative . The ‘Chileanization’ of copper consist- ed of creating joint ventures between the state and US companies through the purchase of 51 per cent of the shares of its Chilean subsidiaries. Often, the in- demnities paid exceeded the corresponding value declared by the companies which, in several cases, maintained control of management, so that this poli- cy’s potential for conflict was substantially mitigated (Elgueta and Chelén 1984: 247). The case of agrarian reform was different, as 3.5 million hectares, corresponding to 1,400 properties, were expropriated in a process that would accelerate under Allende. The agrarian reform law also stimulated peasant unionization, which sharpened the hostility of the conservatives at the same time as it multiplied strikes and land occupations in the following years, un- leashing dynamics that even the future Allende government was unable to control (conversation with Chonchol 2017).

1 Soviet politics urged the Communist Parties to ally themselves with anti-fascist forces in the 1930s, albeit in the bourgeois camp. Popular Fronts reached the presidency in , France and Chile. In the last-named country, the presidency was exercised by a member of the Radi- cal Party for three consecutive terms.