LIBERAL ECONOMY, LIMITED DEMOCRACY:

THE CASE OF CHILE

By

Kathryn A. Lasso

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of American University

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the Requirements for the Degree

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CL:.u l\~'1b fvk_.LO o ._. ~brugge Brantley, phi)~ ~~ Hector Schamis, Ph.D. D~~dSciences ;2_r ~ otC'elr Date V

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ProQuest LLC 789 E. Eisenhower Parkway PO Box 1346 Ann Arbor, MI 481 06-1346 LIBERAL ECONOMY, LIMITED DEMOCRACY: THE CASE OF CHILE

BY

Kathryn A. Lasso

ABSTRACT

This is a sociological study about the political constitution drafted in 1980 in the Republic of Chile by its military junta that was intended to "protect" democracy through authoritarianism. Each section of the study begins by summarizing the international ideological context in which Chilean social action took place before looking at Chilean political economy under its three constitutions of 1833, 1925 and

1980. While this study is focused on the particular case of Chile, it hopes to make a broader contribution to historical-comparative sociology by demonstrating how

Chile's constitutional contract changed in an effort to create a rules framework to mediate social relations by using a multi-polar political-economy approach. In this respect we hope to gain understanding about the fundamental nature of liberalism as an organizing concept and in contrast to competing paradigms.

While the attention of historical-comparative sociology is traditionally focused upon large-scale structures, this study focuses its attention on large-scale ideas about structures. In 1982 Milton Friedman wrote: "Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the

ii ideas that are lying around."1 This study identifies the myriad of ideas about politics and economics that were "lying around" Chile in the 1970's and 1980's, to tease out where those ideas came from, to follow what happened to them, and, most importantly, to learn of their influence upon the everyday life of everyday people even today.

1 Milton Friedman with the assistance of Rose D. Friedman. Capitalism and Freedom. Chicago, IL: University of Chicago Press, 1982. p. ix

111 ACKNOWLEDGMENTS

This paper would never have been written without the encouragement and

support that I have experienced over many years.

My interest in Chile began when I served as an intern at the Third World

Women's Project of the Institute for Policy Studies. I was encouraged by both Isabel

Letelier and Jill Gay to write my master's thesis on Chilean women, which sparked what has become a long term interest in that country. Back in school some twelve years later when I found myself wrangling with questions about the relationship between democracy and economics, I was fortunate to have taken an independent

studies course with Chilean economist Fernando Leiva, whose early mentoring pointed me to explore the influence of F .A. Hayek upon Chile. This encouragement

led me down the winding path that has culminated in the study before you today.

Later on human rights activist Jose Aylwin and Tomas Hirsch, leader of Chile's

Humanist Party graciously granted me interviews, which helped to confirm some of

the conclusions that I had drawn about the lasting impact that Pinochet's regime had

had upon Chile.

I also must thank American University's Department of Sociology; I entered

a doctoral program there with a decision to fully explore this theme, with the

encouragement of each professor there. My specific thanks go to Professors Russell

iv Stone, Jill Brantley and Hector Schamis who served on my dissertation committee.

American University's College of Arts and Science provided me with generous financial assistance upon three occasions, two times with travel grants for field work in Chile and in between with a year-long fellowship that allowed me to stop working full time to write.

A cadre of friends valiantly agreed to read my dissertation in various stages

of completion. I am grateful for all of their comments and corrections. Many thanks to Helen Albert, Gail Arnall, Dottie Bockstiegel, Lauren Conover, Wendy Dorsey,

Jose Gutierrez, David Hilfiker, and Alexandra Zekas. I must also recognize Dr.

Wilson, who helped me come to terms with my own bifurcated consciousness.

But my greatest thanks are reserved for my family. I would like to thank my

husband Ernesto for his encouragement, and, most of all, I must thank my boys,

Manuel, Paul and Benjamin, who put up with a mom who needed to do more than take them to soccer games, karate classes and art classes. Thanks guys, you're the best.

v TABLE OF CONTENTS

ABSTRACT ...... 11

ACKNOWLEDGMENTS ...... iv

LIST OF ILLUSTRATIONS ...... vii

Chapter

1. OVERVIEW OF THE GOALS AND OBJECTIVES, SCOPE, CONTRIBUTION, STRUCTURE ...... 1

2. THEORETICAL REVIEW AND FRAMEWORK ...... 9

3. METHODOLOGY -A MULTI-POLAR POLITICAL ECONOMY APPROACH ...... 48

4. THE SHAPING OF EARLY LIBERALISM ...... 63

5. LIBERALISM IN AN AGE OF RISING POPULISM ...... •...... 84

6. LIBERALISM VERSUS REVOLUTIONARY POPULISM ...... 116

7. A BREACH IN THE CONSTITUTIONAL ORDER ...... 147

8. GLOBALIZED DEMOCRACY, GLOBALIZED ECONOMY ...... 152

9. CHILE'S 1980 CONSTITUTION OF LIBERTY ...... 171

10. THE 1980 CONSTITUTION REVISITED ...... 189

11. CHILE TODAY ...... 196

12. CONCLUSION ...... 230

BIBLIOGRAPHY ...... 24 7

vi LIST OF ILLUSTRATIONS Page

Figure

1 The Bifurcation of Consciousness ...... 13

2. Traditional Paradigm ...... 17

3: Traditional and Liberal Paradigms ...... 23

4: Traditional, Liberal and Revolutionary Populist Paradigms ...... 29

5: Traditional, Liberal, Revolutionary Populist and Pluralist Paradigms ...... 36

6: The Four Paradigms and Levels of Cooperation and Coercion ...... 45

7: Economic Liberalism versus Political Liberalism ...... 71

8: Early Years in the Republic of Chile ...... 80

9: Traditional Conservatism, Classical Liberals United Against Populism ...... 88

10: Keynesianism becomes Dominant Economic Theory ...... 93

11: Map of Political Positions in the Republic of Chile-late 1800's ...... 106

12: Map of Political Positions in the Republic of Chile-early 1900's ...... 109

13: Political Positions in the Republic of Chile in the mid 20th Century ...... 113

14: Western Ideologies in the Post War Era ...... 124

15: Ideological Influences in Allende's Chile ...... 139

16: Ideological Influences in Pinochet's Chile ...... 164

17: Chile Under the 1980 Constitution ...... 173

vii 18: Revival of Political Parties and Coalitions in Chile After 1987 ...... 184

19: 2005 Reforms and the End of"Authoritarian Enclaves" ...... 193

20: The Bifurcation between Concertaci6n Discourse and Policy Options ...... 219

viii CHAPTER 1

OVERVIEW, GOALS AND OBJECTIVES, SCOPE, CONTRIBUTION,

STRUCTURE

Dear Professor Hayek: ... There were several things that I wanted to discuss with you but somehow forgot. One of them is ideology. What is ideology? How is it born? How does it die? To my knowledge there is very little rigorous work on the subject. Sociologists are once again no help .. . Can you recommend something on the subject? Letter from Hernan Cortes Douglas to F.A. Hdyek May 9, 198a2

The concept of 'ideology' reflects the one discovery which emerged from political conflict, namely, that ruling groups can in their thinking become so intensively interest-bound to a situation that they are simply no longer able to see certain facts which would undermine their sense of domination. There is implicit in the word 'ideology' the insight that in certain situations the collective unconscious of certain groups obscures the real condition of society both to itself and to others and thereby stabilizes it. Karl Mannheim Ideology and Utopia3

Democracy, a form of government that is highly esteemed in modem society, institutionalizes the idea that decisions regarding rules governing society should be made in broad consultation with those who will live under those rules. Many western scholars trace the advent of democratic government back to Greece, the country whose language

2Heman Cortes Douglas. Personal letter to Friedrich A. von Hayek dated May 9, 1980. Hayek Archives: Box 15, folder 15-16, "Centro de Estudios Publicos." Heman Cortes Douglas was the first Director of the neoliberal think tank Centro de Estudios Publicos that was founded in Santiago, Chile in 1980 by Jorge Cauas and others.

3Karl Mannheim. Ideology and Utopia. (New York: Harcourt Brace Jovanovich, 1970), 39- 40. 2

gave us the word itself. 3 The ideological stance that the governed should participate in rulemaking was revived in England in the late 1ih century as that country led the rest of Europe into modernity clothed in a new paradigm known as liberalism, casting aside medieval trappings such as authoritarian government and mercantilist economics. Under new-born liberalism Whig advocates argued for free trade, strong property rights and a limited government that included citizen participation in policymaking. At the same time, their idea was to restrict the rights of citizenship to property owners, who (they considered) held a greater stake in society, thereby embracing a system that stratified access to political power according to access to economic power denominated as real property. As a result, economic power in early modem England was most accessible to the reach of Anglo Saxon property-owning men who, preferably, were Protestant Christians (since Catholics held allegiance to the

Pope). While English Whigs were openly hostile to notions about broad democracy,

other less dominant voices were raised up in England to advance the idea of pluralist tolerance between diverse groups, calling for dialogue - and broader distribution of

political power, to include lower class men of various ethnicities found across Great

Britain. Slow to be incorporated into the English system, the idea of broad democracy

gained popularity in revolutionary France, the nascent United States and later

elsewhere, captivating larger and larger segments of society, until, by end of World

War II, democracy had become the most theoretically acceptable form of government

in the western world. Today, virtually all governments around the globe seek to

establish legitimacy through some claim of representing popular will, by wrapping

3 Democracy literally means "rule by the common people." 3

themselves up in an array of descriptive terms such as "representative democracy,"

"popular democracy," and, in the case of the Republic of Chile, "authoritarian democracy," each offering a unique perspective about how to share political power - hence decision-making power regarding the distribution and use of economic resources - among the populace.

Clearly the word "democracy" does not translate into one specific political system with a prescribed distribution of political power among members of society.

Rather, it is a concept that has evolved in western thinking over several centuries, with many ideological variations regarding the "best" distribution of power, and with options ranging from rule by a small self-appointed group to direct rule by all members of society. One goal of this paper is to make plain the history of ideas expressed through terms such as "democracy" and "liberalism" in order to be well prepared to engage in present day analysis and discourse regarding these organizing concepts that are so prominent in discourse today.

This analysis focuses on Chile, a country whose political, economic and social institutions underwent dramatic transformations between the 19th and 21st centuries, and which continues to transform itself even today, providing a rich example of how ideological perspectives are reflected in both structures (such as constitutional arrangements) and in every day life.

Regarded by many as a shining example of democracy in Latin America, the ideas, norms and values expressed in Chile's social structures had evolved, most notably since the early 20th century, to distribute access to political, economic and social power more equitably amongst citizens. This process culminated in the 1970 4

election of Salvador Allende, whose promise had been to transform the Chilean economy from one based upon capitalism to one based on socialism. On September

11, 1973, however, the Chilean military stopped the process by staging a coup d'etat, taking control of the presidency and declaring the legislative bodies in recess. Over the next seventeen years the military dictatorship worked to replace political, economic and social structures intended to promote inclusive political processes and more equitable distribution of resources with structures protecting private property and the accumulation of personal wealth. This transformation was carried out under the rule of an authoritarian dictatorship and a select group of civilian advisors who sought to create a political framework that could withstand the pressure of popular will once electoral processes were reinstated.

Indeed, authoritarian democracy was a national legacy the junta bequeathed

upon Chile before its return to electoral processes in 1990.4 This study argues that one

important action taken by the military regime to make permanent an authoritarian

structure in Chile was the drafting of a new constitution, named "The Constitution of

Liberty" by military dictator Augusto Pinochet. In this way, the constitution served as

an instrument to exert continuing control over Chileans in their everyday lives by

imposing a rules framework that mirrored the junta's vision of appropriate patterns of

social relations in "western, Christian" civilization long after the dictatorship was

dismantled. A close examination of the junta's social model is timely: in 2004,

fourteen years after Pinochet turned power over to civilian leaders, Chile's Senate

4 Most would add that the Pinochet regime also left in its wake a lasting legacy of human rights violations ranging from torture to disappearance to extrajudicial execution that has not yet been resolved and must never be forgotten. 5

unanimously voted in support of a new series of reforms that dismantled constitutional provisions institutionalizing "enclaves of authoritarianism." In mid-2005 those changes took effect, and in early 2006 Chile elected as president Michelle Bachelet, a divorced woman and single mother, a former torture victim and political prisoner who lived several years in exile, a practicing agnostic and a confessed socialist. One of

President Bachelet's first promises after taking office was to promote gender equality in Chile and one of her first acts was to order that free healthcare services be offered to all poor senior citizens. Another campaign commitment related to electoral reform regarding the country's controversial binomial electoral system5 that was put in place by Pinochet's government once it was evident that his tenure at Chile's Chief

Executive would be coming to an end. The binomial system gives political parties the incentive to work in coalitions in order to enhance their probability of receiving a greater number of votes, thus pushing individual parties to broker middle-ground consensus positions even before the electoral campaigns begin. In addition to the tendency of the binomial system to artificially increase conservative party representation in Congress, the stated intention of the system is to avoid the splintering of parties and political platforms into irreconcilable poles with incompatible national goals as had occurred prior to 1973. As we shall see, although the binomial system

5 Unique to Chile, the binomial electoral system favors coalition slates of candidates for Congress because it splits the seats in a given district between the two coalitions that receive the highest number of votes. The outcome is a fairly even distribution of congressional seats between the two coalition groups, which makes it difficult for any one coalition to achieve a substantial majority in representation. As a result, Chile's progressive political parties have tended to unite under one umbrella coalition and the conservative parties under another umbrella. Since the progressive coalition parties consistently receive a numerical majority of votes, the effect of the binomial system is to artificially increase congressional representation of the conservative coalition, at the expense of progressive coalition. A corollary effect is that parties who do not join the two predominant coalitions are effectively denied the possibility of winning elections and joining their colleagues in Congress. 6

may be successful in keeping passionate debate out of the halls of congress, it may have just moved those debates both into public arena via protests, demonstrations and social movements and into the international arena, as human rights defenders hold the

State accountable to international human rights standards.

The purpose of this study is to interpret actions taken by Chile's military junta towards its stated goal of creating a social order that would protect democracy through an authoritarian framework, and to assess the effectiveness of the junta's efforts to achieve its goal. This analysis will keep in mind fundamental questions regarding how the junta's model intended to distribute political and economic power, regardless of the descriptive names given to the model. Issues under examination in this study provoke several questions.

• Pinochet called his social model "authoritarian democracy." What is this?

• In the case of Chile, there is ample evidence that a revised constitution became

the long-term tool of choice to mediate social conflict and prevent far-reaching

change once the military turned the reigns of power over to civilian hands. How

is the model of (and underlying ideology informing) authoritarian democracy

expressed in Chile's "Constitution ofLiberty"?

• A fundamental premise of constitutionalism is that of limited authority. What

types oflimits on authority were built into Chile's Constitution of 1980?

• Chile had experienced increasing social strife during the fifty years leading up to

the coup. How did the junta government believe that authoritarian democracy

would resolve this conflict? 7

• An authoritarian society is usually characterized by a rigid, highly stratified

social structure. A democratic society is often perceived as a having a flexible

social structure that distributes political power broadly. How is authoritarian

democracy reflected in every day social, political and economic life?

• Further, how did the junta anticipate that its constitution would prolong

authoritarianism once the reigns ofgovernment were returned to civilian hands?

• Finally, and, most importantly, can we anticipate where the recent constitutional

changes are leading Chile?

This study will examine the argument that the 1980 Constitution put into place

under the Pinochet dictatorship was meant to correct "flaws" in Chile's social design that led to social disruption and the eventual election of President Salvador Allende, whose mandate had been to replace capitalism with socialism through consensus under

rule of law rather than by force. The primary flaw the military junta sought to correct

was a framework that made it possible for Chile to transform itself into a socialist

country. Pinochet's use of repression transformed dissent - the expression of

ideological difference - into a life threatening act. But it would appear that overt

dictatorial repression was only a short term tactic employed to assure adherence to the

new rules framework, until it could be replaced by a legal structure emanating from

the Constitution of 1980, as well as a culture that embraced this classical vision of

society.

To gain historical insight, key tenets of the 1980 constitution will be compared

to Chile's constitution of 1925 to provide a context of continuity and change in the

vision of Chilean society as articulated through its political framework. Through this 8

lens we can learn lessons about the implications of socio-political models as both reflections of and forces that shape daily life, creating hierarchies of access to power

and resources for both distinct social groups and individuals. This study hopes to make plain important assumptions about the distribution of political and economic power that is inherent in competing ideological paradigms, regardless of the names that adorn them. CHAPTER2

THEORETICAL REVIEW AND FRAMEWORK

Ideological circles built into hierarchies are more than circular practices of reasonings about the world. They are a property, perhaps essential, of large-scale organization and of the institutionalized relationships among professional discourse and the local sites of professional activity. They are also a property of the organization ofpublic textual discourse.... The social relations of textually mediated discourse intersect and penetrate organizational structures constituted as complex entities with differentiated functions, corporations, government agencies, universities and so on. Dorothy E. Smith The Conceptual Practices ofPowe/

We ought to regard political liberalism and economic liberalism as two separate intellectual positions, or even two separate streams ofthought. Immanuel Wallerstein After Liberalism8

This analysis honors the tradition of early European social theorists, including

Thomas Hobbes, John Locke, Adam Smith, David Ricardo and Karl Marx, who thought and wrote about political economy, recognizing that political processes take place to form government, and a key task of government is to create rules regarding the distribution of economic power, both in terms of property ownership and income.

Although it would be possible to name hundreds of movements, coalitions, interest groups and political parties that have taken form over the centuries, in the spirit of political economy, there are two fundamental sources of power whose intersections

7Dorothy E. Smith. The Conceptual Practices of Power: A Feminist Sociology of Knowledge. (Boston: Northeastern University Press, 1990), 103 and Dorothy E. Smith. Texts, Facts and Femininity: Exploring the Relations of Ruling. (London: Routledge, 1990), 8.

8Immanuel Wallerstein. After Liberalism. (New York: New Press: Dist. by W.W. Norton, 1995), 93. 9 10

help us to intellectually locate this social argumentation in an ideological space near close allies. The first issue relates to how restricted or broadly economic power is to be distributed among the populace. The second issue relates to how restricted or broadly political power is to be distributed among the populace. When joined together these two ideas yield four basic ideological types, Traditionalism, Classical

Liberalism, Revolutionary Populism and Pluralism, which this paper argues have provided the seedbed for countless ideological offshoots, each colored and shaped by particular cultural justifications and historical circumstances. By locating each ideological offshoot within a minimalist politico-economic framework helps to clarify its basic assumptions about the "natural" power distribution that a particular perspective will embed in laws and institutions established to guide everyday life, regardless of promises made.

Feminist sociologist Dorothy E. Smith provides a useful framework to examine the evolution of ideas about political economy in the western world. In her own writing about political economy Smith argues that we must search between the words describing the various ideological constructs outlined below to find the voices of those whose life experiences are absent from those theories. Indeed, Smith warns us that sociology itself constitutes "a consciousness of society" that interprets social experience and creates a "relations of ruling" from "the standpoint of men who do that ruling" rendering invisible women (and subaltern men) who live "in an intellectual, cultural, and political world, from whose making we [have] been almost entirely 11

excluded and in which we had been recognized as no more than marginal voices."8

The implication of this exclusion is that theory, social structure and rules governing social life (relations of creating) have been all produced and reproduced over the past centuries by a privileged, male, propertied minority that is free to engage in such intellectual pursuits precisely because the physical labor necessary for survival is carried out by others, namely women and working class men. In this respect, both traditional sociology and social theory describe a set of relations of ruling that emanates from the minds of dominant males, reflects social organization as abstract and "extralocal," as a "practice of the mind" and is not informed by the embodied knowledge representing the living and working experience of women and working class men, the "local actuality of lived experience. "9

Being excluded, as women [and subaltern men] have been, from the making of ideology, of knowledge, and of culture means that our experience, our interests, out ways of knowing the world have not been represented in the organization of our ruling nor in the systematically developed knowledge that has entered into it. . .. The universe of ideas, images, and themes --- the symbolic modes that are the general currency of thought - have been either produced by men or controlled by them. In so far as women's work and experience have been entered into it, it has been on terms decided by men and because it has been approved by men. 10

In the contemporary age characterized by mass communication, Smith emphasizes the importance of "textually mediated discourse" as crucial facet of the extra-local relations of ruling through which officially sanctioned interpretations of

8 Dorothy Smith. The Everyday World as Problematic. (Northeastern University Press, 1987), 1-2. Smith defines the relations of ruling as an interwoven network connecting diverse bases of power and reinforcing social control. It is through an ongoing process of socialization that the lived, subjective experience of women and subaltern men are devalued while their life narratives become the object of interpretation through the lens of the dominant male perspective.

9Smith (1987), 77

10Smith (1987), 17-18 and 18-19 12

subjective experience created in abstract by intellectual elites is disseminated to local

levels where physical labor is carried out. "Texts create their own internal ordering of

subjectivity independent of the local setting in which the embodied subject reads, hears or looks ... " 11 As society has evolved, textually mediated discourse generated extra-locally and out of context by the intelligentsia has saturated social relations

found not only in the public spheres of production and work, but also in the private

spheres of reproduction and family life, permeating the subjective experience of

ordinary people in their homes, schools and towns with an extra-local interpretations

of and vocabularies describing that experience -- from the perspective of the dominant

ideology. The purpose of officially sanctioned textually mediated discourse is to

provide an interpretative framework for subjective experience that supports the

dominant ideology and promotes social stability. Smith argues that, as resistance

subsides and dominant ideology becomes in internalized, people, denied their own

subjective truth and stripped of a sense of agency, are transformed into objects (rather

than subjects) of history and pressured into assuming social roles in accordance with a

hierarchical division of labor that has also been imposed upon them from above.

Smith sees this split between the ideological order created by a privileged

minority in support of the "relations of ruling" they impose and the embodied

experience of the voiceless majority, "the local actualities of lived experience," as a

"bifurcation of consciousness" that "establishes two modes of knowing, experiencing,

11 Dorothy Smith, Texts, Facts and Femininity: Exploring the Relations of Ruling. (London: Routledge, 1990), p.58 13

and acting - one located in the body and in the space that it occupies and moves into, the other passing beyond it."12 While Smith herself examines the bifurcation of

knowledge present in individual women, this study extends the idea of bifurcated

knowledge dwelling within individuals to assert that bifurcated knowledge also dwells

in the collective consciousness of groups, and society as a whole. What this means on the social level, then, is that social truth itself becomes fragmented, with splinters of

subjective knowledge embodied throughout an array of marginalized groups (women,

laborers, non-whites, religious minorities, etc.) whose voices are silenced as discourse

about political and cultural norms begin, and who are expected to live under a social

construction of reality that is foreign to their everyday experience. Figure 1 below

Figure 1 The Bifurcation of Consciousness

Local Actuali.!)'. of Lived Experience Extra-Local Relations of Ruling (produces material labor) (produces texts that govern Local Actuality)

Private Reproductive work such as cleaning, Symbolic work creates and reinforces the cooking and carmg for a spouse, cultural norms that prescribe social roles children and the aged; takes place in in accordance with hierarchical division the home or within local communities of labor. and IS primarily carried out by women, with minimal assistance from men.

Public Productive work occurs in the market Intellectual work is carried out by elite, setting and is carried out by men and dominant men (and some women) to women who produce goods and create "authorized knowledge," political services, but who do not have control and economic rules and institutions that over the means of production. govern social relations.

12 Smith (1987), 82 14

expresses how this bifurcation of consciousness is expressed in both private and public domains. 13

Smith urges us to overcome this fragmentation of knowledge by infusing macro sociological analysis with the truths of micro sociological, localized experience.

The result would be a sociology that that incorporates the reality found in the everyday, concrete, lived experience of all members of society, rather than one that perpetuates an abstract, conceptual order reflecting the preferences of a privileged minority.

There is a second way in which this study intentionally steps outside of a traditional analytical approach. Specifically, social analysis commonly limits itself to the use one ideological framework to interpret reality - and to cast judgment upon the

core values embedded in competing ideological frameworks. In addition to

acknowledging that social theories have generally been produced within a limited

circle of male elites, this study also assumes the co-existence of multiple ideological

paradigms representing divergent interests within that circle of elites. 14 The advantage

of acknowledging the co-existence of competing ideological frameworks is that it

allows each framework to speak for itself, to defend its own values and to explain its

adherents' behavior rather than relying upon one framework to interpret the logic of its

13 I am deeply indebted to Dr. Jill Niebrugge Brantley who introduced me to the writings of Dorothy Smith and who graciously permitted me the use of her table presentation of Smith's theory.

14This thinking is congruent with Thomas Kuhn's ideas about paradigms and paradigm shifts. While Kuhn argued that in natural sciences, one paradigm will generally replace another after a paradigmatic shift, he observed that in the social sciences, multiple paradigms co-exist. At the same time, this paper argues that a shift between paradigms in the social studies is most often achieved through revolution resulting in paradigmatic shifts - what is different is that, unlike in natural science, subaltern paradigms do not necessarily fade away as alternative interpretations for social relations. 15

challengers. Another important assumption found here is that it is the ongoing interactions between these competing ideologies, each seeking to suppress the

subjective truth of local, actualized living experience, that turns the pages of history, rather than the unfolding victory of one ideological perspective over the others.

For the sake of simplicity, the multi-polar political economy model used in this

study assumes four basic ideological types. Figures are presented throughout the study to create an evolving depiction of the model, to help us grasp the shifting interpretations and manifestations of the four ideological types, Traditionalism,

Classical Liberalism, Revolutionary Populism and Pluralism, allowing us to keep hold of complexity without being overcome by it.

Traditionalism, the oldest of the four, is the ideological framework that advocates for a relations of ruling characterized by highly restricted distribution of economic power and political power (Figure 2). The mainstay of traditional political thought - absolutism - is rooted in the medieval concept that monarchs rule by divine authority. Indeed, the logic of the divine right of kings easily translated into a defense for political absolutism - for if the monarch's perch on the throne is an expression of divine will, opposition to the monarch is heretical. Arguments favoring absolutism are

often grounded in the ideas of Thomas Hobbes found in Leviathan, published in 1651,

in which he asserts that in our "natural state" humans have the theoretical right to

anything and everything, scarcity in the local actuality of lived experience creates an

ongoing "war of all against all" and life, in its natural state, is simply "solitary, poor,

nasty, brutish and short." In this scenario, then, the local actuality of lived experience 16

is characterized first and foremost by a struggle for survival, which is best ensured by domination. For Hobbes the optimal chance for peaceful coexistence is under a social contract, through which a Leviathan exercises absolute authority and cedes to the population the amount of "natural right" required to create political stability and rule of law while providing a common defense against enemies. While Hobbes did not deny the possibility that such a sovereign could rule via democracy, his preference was for a monarchy that could wield absolute, unquestioned, centralized authority.

To avoid any opening for divergent thinking that would challenge dominant ideology,

Hobbes' monarch would not only control the political state, the military and the judiciary, but would also exercise authority over matters of faith and religious

doctrine, thus assuring cultural domination as well. Absolute political power was

accompanied by mercantilist economic theory which argued that the State must also

play a protectionist role in the economy by intervening to regulate trade in order to

enrich the national treasury (and the monarch) through trade surpluses. In this way traditional authoritarianism reserves all power for the State, and rule of law serves the

pleasure of its leader while any challenge to the established relations of ruling would

be answered with the swift use of punishment, including imprisonment, torture, death

or banishment.

Such traditional, coercive systems, under which the monarch's role was to rule

and that of everyone else was to obey, was the standard paradigm for European

nations until the Protestant Reformation in the 15th century launched a cultural 17

challenge to preordained hierarchy by inviting common folk into exploring their own subjective knowledge through a direct and personal relationship with God, rather than

Figure 2: Traditional Paradigm

Anarchy- natural state of conflict (Hobbes)

~------~· - . -. -. -. - . - . - . -. - . - . - . -. -. - . - . - . - . - . -. -. - . -. - Traditionalism is characterized by an absolutist government and mercantilist economic system, with economic gains accruing to the State (e.g. Monarch). The allocation of economic resources decided by State in accordance to State's interpretation of Divine/Natural Plan. The State Executive serves as the agent of change.

1------1·-. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. -. - I I I I I I I I I I I I I I I i I \-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-'·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·~

Anarchy-natural state of conflict (Hobbes)

The traditionalist paradigm is closely associated with European medieval thinking and creates a social hierarchy that is justified by doctrines such as the "divine right of kings." Since the monarch is believed to derive his/her right to rule through God's will, the monarch's will is absolute over his/her subjects. one negotiated by religious elites and work to create a social construction of reality that supported the traditional-authoritarian relations of ruling. Once the assault on 18

theological monopoly was launched, competing belief systems sprang up, breaking the hold of Catholicism upon European minds. Of the prominent Protestant traditions that

surfaced in the 15th century, the Anglicans 15 the Anabaptists, Puritans and

Presbyterians, among others, found believers in England, wielding significant political influence in the religious authorities and their rules. Once the assault on theological monopoly began, competing belief systems sprang up, 17th century and helping to knock the doctrine of divine right into disrepute and usher in the age of government by

consent.

Although driven from ideological dominance, it would be naive to believe that traditional thought disappeared from the intellectual landscape. On the contrary, traditional thinking, often dubbed conservatism or neo-conservatism in today's

discourse, has resurfaced regularly through waves of Romanticism, various strains of conservative (or neo-conservative) Catholic and Protestant political theory as well as

some strident forms of nationalism to question the fundamental logic of an

Enlightenment-driven modernity -- and the dire end to which unrestrained rational thought would purportedly lead western, Christian civilization. 16 Mannheim provides

a useful description of the logic that guides the conservative, traditional mind that set

itself against liberalizing rationalism and the possibility of change it implied:

15 Otherwise known as the Church of England, the Anglican Church was founded by King Henry VIII after the Pope refused to annul the King's married to Catherine of Aragon. Under the Act of Supremacy issued by King Henry the VIII in 1534, the English monarch was declared the head of the newly established Church of England.

16Karl Mannheim. Conservatism: A Contribution to the Sociology ofKnowledge , (New York: Routledge and Kegan Paul, 1986), 55. 19

In addressing the question concerning the legitimation of rule, conservative thinking tends to favour theological-mystical ... definitions of the issue. The argument from 'divine right' belongs to the basic store of conservative thinking ... when the latter has become pantheistic, .... History then takes the place of divine transcendence. The line of inquiry followed by the conservative justification accordingly operates predominantly upon a plane of mystical transcendence. 17

The primary distinction between traditional authority and the three paradigms discussed below is fairly straightforward: while under traditional authority the relations of ruling is justified by a higher authority that flows from the Divine to the monarch, under liberalism, revolutionary populism and pluralism, the source of power and authority is found to lie within society, among the people, although each paradigm promotes its own protagonists and path for historical evolution - and has its own prescriptions for how to manage individuals who did not (or could not) conform with social expectations. 18

Liberalism was well-entrenched as the dominant ideological paradigm in western Europe by the time that sociology emerged as a academic discipline. In this respect, all social analysis of western civilization in the modem era has, by definition, been forced to critique the life that liberalism provides. Weber, for example, embraced the advance of modernity under liberalism, which he equated with the continued process of rationalization, differentiation and democratization of society .19

17 Mannheim, Conservatism, 57.

18Historically, often times these individuals have been branded as "social deviants" and subjected to disciplinary measures or confinement (which is not always justified according to international human rights standards). See Foucault for a discussion on this point, including the development institutions for social deviants ranging from prisons to poor houses to workhouses to psychiatric hospitals. For further information see Michel Foucault. Power/Knowledge: Selected Interviews & Other Writings 1972-1977. New York: Pantheon Books, 1980.

19Karl Mannheim. (1986), 60. 20

Weber associated pre-modern societies with sub-rational ways of thinking and acting

while he saw modern social action as rooted in rationally chosen goals or values.

Weber celebrated the rise of the self-actualized individual under liberal society, who, theoretically at least, had secured the right to express his (but not necessarily her) true nature through differentiated, individual choice rooted in local, actualized experience

and subjective preferences.2° The word "liberalism" itself can be a confusing term,

because it carries different meanings in different circles which demarcate differently at

what point this lack of restraint is put in check. As an ideology, classical liberalism

(Figure 3) is the term assigned here to describe the paradigm that was formulated in the 17th - 19th centuries in England to define where proper, (officially-sanctioned)

liberal thought ends.21 As a paradigm, classical liberalism allows for broader

distribution of economic and political power, to incorporate a wider spectrum of

property-owning males into public discourse about the relations of ruling. At the same time, classical liberalism continues to exclude non-property owners, which made up the majority of the adult population, from that public domain, thereby denying access to women, working-class men and, most often, ethnic and religious minorities. While traditionalism demands mystical devotion to an absolute leader, classical liberal

20 At the same time, Weber recognized the inevitable necessity of a bureaucracy to manage the complexity created by diversity of choice by many people and feared the stifling effects of that bureaucracy (the "iron cage") on freedom of choice and self actualization.

21 Barry identifies five schools of classical liberal thought in existence today. The three schools that have most influenced neoliberal ideology are the Chicago School, sometimes known as the neoclassical school, associated with Milton Friedman, Arnold Harberger, Frank Knight (co-founder of the Chicago School), Gary Becker and George Stigler; the Austrian School, represented by Ludwig von Mises and Friedrich A. Hayek; and James Buchannan's constitutional economics (previously called the School of Public Choice), which employs economic analysis in political decision-making. See Norman Barry. On Classical Liberalism and Libertarianism. New York: St. Martin's Press. 1987. 21

ideology espouses a mystical confidence in the leadership of the capitalist entrepreneur who, through his risk-taking ventures creates wealth and thus better conditions for everyone. According to this argument, all that the entrepreneur requires to unleash his creativity is a rules-based order that protects his freedom, his property and his rights to profit, resulting in greater prosperity for property-owners and non-property owners alike.

One fragment of the subjective, actualized experience left unacknowledged in this classical liberal world is that human nature would encourage the rule-making property-owner to construct an order that favored himself and his peers. Schamis discounts the all-familiar theorizing about an invisible hand guiding economic activity as arguments made to convince non-elites that the unequal outcome of economic activity are fair, and in the best interest of society as a whole, thus negating the validity of their own subjective experience via textually mediated discourse. Instead he chalks biases in economic rules (protected by political processes outside the reach of common folk) to old fashioned, interest group politics that benefit one group over more margma. 1. 1ze d groups. 22

Durkheim's primary concern regarding classical liberal society was the absence of not-to-be-questioned social rules emanating from symbolic work by the intelligentsia to create cultural norms that would strengthen cohesion in industrial society and reduce the potential for disaffection and anomie among the marginalized.

His solution was to bring into the modem, liberal order some remnants of sub-rational,

22 Hector Schamis. Reforming the State: the Politics ofPrivatization in Latin America and Europe. (Ann Arbor, Michigan: University of Michigan Press, 2002), 10. 22

traditional thinking by "anchoring" members of industrial soci~ty to social groups through family, religion and old-fashioned tradition. By encouraging identity formation through symbolic work to inform sub-rational thinking (emotional or traditional rationality, in Weber's terms) Durkheim hoped to avoid the alienation of which Marx would warn by re-establishing a sub-rational justification - myths and ceremonies for the modem age - that explain social stratification and the location of one's particular role in the social hierarchy. In this respect, Durkheim's solution, meant to consolidate social cohesion in modem society, reflected that of the traditional elitist who justified - and preserved- privileged rank in the liberal, capitalist order, by promoting a system of extra-local relations of ruling that continued to draw upon pre­ modem ideas of stratification negotiated most often through circumstances of race/ethnicity, religion and sex.

It should be noted that the development of liberal theory occurred during a period of expansionism as England and its European rivals engaged in a feverish race to lay claim to territories around the world (ignoring the fact that the lands were already inhabited by non-European nations) in their search for new markets and economic resources. It should also be noted that the priority that classical liberalism assigned to economics, while ignoring the priorities that political processes emphasize

(negotiations over the use and distribution of resources), engendered its own clashes with the subjective knowledge of local experience, that would manifest itself as dissent by marginalized groups and, more recently, concerns over the destruction of the environment and the depletion of a finite stock of natural resources. But in their 23

pursuit of abstract justifications for the stratified social structure they promoted, classical economists assumed away the subjective, local actuality in which their theory

Figure 3: Traditional and Liberal Paradigms

Traditionalism -- characterized by an Classical Liberalism - Advocates for absolutist government and mercantilist economic liberalism, but seeks to economic system, with economic gains restrict the distribution of political accruing to the State, whose leading body power within well-defined limits that is legitimized by Divine Right advantage property owners over the justifications. The allocation of economic propertyless. Allocation of economic resources decided by the State in resources is determined by "market accordance with the State's interpretation forces," under which property owners of Divine/Natural Plan. The State are rewarded with profits and laborers Executive serves as the agent of change. with wages. Sees the capitalist­ entrepreneur as the agent of change.

·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-··

England's Glorious Revolution of 1688 is often cited as ending the dominance of absolutism and ushering in a liberal age of parliamentary democracy by converting some (but not all) of the Crown's subjects into citizens, with voting rights. The newly enfranchised class was comprised of Anglo-Saxon property-owning Protestant males, whose consent was sought by the Crown via Parliament in matters related to rule of law and government policy.

was rolled out, which was better characterized by multiple layers of stratification, hierarchy and competing interests on global and national levels, than by a free flow of goods, labor towards an infinite supply of natural resources. Hobsbawm observes that

The difficulty for nineteenth-century liberal economists . . . was that they could only recognize the economic significance of nations in practice, but not in theory ..... Free trade and the free market were directed precisely against this concept of national 24

economic development, which Smith thought he had demonstrated to be counter­ productive. Economic theory was thus elaborated uniquely on the basis of individual units of enterprise - persons or firms - rationally maximizing their gains or minimizing their losses in a market which had no specific spatial extension. . . . . And yet, even the purest of classical economists were obliged to operate with the concept of a national economy.23

This fundamental split between liberal theory and the local actuality of lived experience became an axis upon which economic liberalism has turned for centuries.

To explain, classical economic theory assumes that all inputs in the production process

(capital, labor, land) can shift from one economic activity to another in pursuit of

better opportunities. However, in reality, only financial capital can exert such short- term liquidity, investing first, perhaps, in a factory in America's South before withdrawing to invest in another opportunity elsewhere and then pulling up stakes to

chase an economic interest in a third country. The inherent inflexibility of labor to

follow new opportunities is multi-faceted and related to geographical constraints,

language, cultural and educational barriers, and even national borders and restrictions

on immigration, among other things. Inflexibility of land-related resources can be

obvious, and related to geography and climate, or less obvious and related to cultural

or political systems which shape the use of natural resources. Historically, as we shall

see, financial investors invariably seek terms that ensure of high profits, which, in tum, require that labor costs and land-use costs remain low. Such terms quite often

translate into pressures to keep wages and benefits at minimal levels and to otherwise

reduce the obligations of financial investors towards workers in their factories.

Lowering the costs of land-use in today's world is often reflected in tax rebates and

23 E. J. Hobsbawm, Nations and Nationalism Since 1780: Programmes, Myths, Reality. (Cambridge Cambridge University Press, 1990), 25-27. 25

exemptions, subsidies, and other government policies that encourage the investment in physical capital, along with weak regulations or easements regarding commitments to environmental preservation and protection. What ensues in local, actual experience, then, is a dynamic which is driven by the short-term interests of economic elites, and one in which financial capital can set the terms it requires for investment - to the extent permitted by law and customs, that is. Thus it becomes evident that the creation and dissemination of an ideological framework that promotes normative and legal rules congruent with the interests of elites (and explains away the contradictions rising from local experience) is essential for the maintenance of social stability.

While in its theoretical form at least, the classical liberalism recognizes basics liberties that are the inherent right of all individuals, in reality classical liberalism has historically placed an emphasis upon economic liberty, which is best preserved by ensuring that access to political power be stratified by access to economic power as evidenced by the ownership of property. The resulting relations of ruling, negotiated in the exclusive domain of propertied males, reinforce a hierarchical division of labor in both private and public spheres that equips people with skills and education required for "various levels in the ideological structuring of society."

As social organization became more complex in the industrial age, Smith argues that texts and documents that claim universality, but that, in fact, reflect ideas, values and preferences particular to the dominant male, became an increasingly important tool in the social construction of reality and in the practice of ruling.24 The

24Smith defines the ruling apparatuses as "those institutions of administration, management, and professional authority, and of intellectual and cultural discourses, which organize, regulate, lead 26

importance of texts as a "medium of power" should not be underestimated, especially after the onset of mass literacy and mass communication in the late 19th and early 20th centuries. Texts shape the way that people think about themselves and about society and culture, requiring that marginalized members of society "live inside a discourse that is not ours and that expresses and describes a landscape in which we are alienated

and that preserves that alienation as integral to its practice."25 In this way, dominate

elites have sought to perpetuate their advantage over marginalized groups by

saturating our minds with textually mediated discourse that supports the established

vision of social hierarchy.

Populism

This study distinguishes between two strands of populism that endeavor to

articulate the subjective experience of non-elites living under liberal capitalism The

ideas of revolutionary populism are most visibly expressed in the writings of conflict

theorists who maintain that meaningful change occurs through revolution that settles

conflict between competing interests, often by creating a new hierarchy that reverses

the structure of privilege previously experienced. The arguments of a second strain of

populist ideology, pluralism in this study, can be found in critiques about the

domination of one set of elites over others that, at the same time, express a yearning

for a broad sharing of power across social sectors that is agreed upon through

and direct, contemporary capitalist societies. The power relations of communication and action are distinctively mediated by texts. The textual mediation of its forms of organization are fundamental to its characteristic abstracted, extra-local forms, and its curious capacity to reproduce its order in the same way in an indefinite variety of actual local contexts." (Texts, Facts and Femininity, p. 2)

25 Everyday world as problematic, p. 36 27

discourse, deliberation and negotiation about the relations of ruling. What is common to both is a desire to include the lived experience of marginalized groups in social consciousness, allowing their subjective knowledge to inform the relations of ruling.

In contrast, both authoritarianism and classical liberalism explicitly exclude the popular classes from power-sharing arrangements.

Like democracy, the core idea of populism is rule by the people.26 In the modem age that has been unfolding for several centuries now, populism has played the natural role of social critic, decrying the political economy constructed around private property, propelled forward by classical liberal theories under the aegis of a social hierarchy most often stratified by class, race/ethnicity and gender. Like liberalism, populism can be thought of as an idea set in motion, needing ideological markings to define its boundaries. While classical liberalism enjoyed undisputed dominance in the 18th century in England, a rising awareness among elites about the horrific conditions of the propertyless living in the house that capitalism was building unleashed fierce and abundant criticism of the paradigm by the mid-19th century. This backlash was accompanied by calls from with the elites for a social structure that acknowledged workers as subjects rather than objects, as human beings rather than mere labor input in the production process.

Riker traces the intellectual roots of revolutionary populism (Figure 4) to

Rousseau of the late 18th century, who believed that the innate goodness of humanity

26 While democracy is derived from the Greek word for people, "demos", populism is derived from the Latin word for people, "populus." 28

had been corrupted through social institutions, including, notably, private property.27

Rousseau argued that the interests of society would be best served by severely limiting

private property in favor of the public ownership of goods, to allow for an equitable

distribution of the fruits of production. In order to approximate peaceful social

relations of an earlier golden age Rousseau argued that "the people" must submit them themselves to a social contract serving the general will, which he saw as an idealized

expression of both popular sovereignty and an expression of individual liberty.28 In

this sense, we can see that revolutionary populism is, intellectually, diametrically

opposite to classical liberalism. While the centerpiece of classical liberal ideological

order is private ownership of economic resources, and key freedoms being protected

are the rights to property and to individual choice,29 revolutionary populism embraces

a liberty found in individual submission to a social whole in the name of equality and

social justice. To be sure, Rousseau is careful to clarify that the general will does not

equate with the will of the majority, thus hinting at the fundamental challenge of

creating a practice of ruling that adequately applies Rousseau's abstract theory to the

local actualities of lived experience. How does one identify the "general will" if it is

not manifested through the will of a majority? This difficulty has proved to be the

27 Indeed, because of Rousseau's early criticism of the institution of private property in the modem age, he is often considered as an intellectual forebear of communist ideology.

28William H. Riker. Liberalism Against Populism. (San Francisco: W.H Freeman, 1982), 11.

29Classical liberal thought regarding equality is made starkly clear by James Buchannan who states: "We live in a society of individuals, not of equals." James Buchannan The Limits of Liberty: Between Anarchy and Leviathan (Chicago: University of Chicago Press, 1975), 11. 29

Figure 4: Traditional, Liberal and Revolutionary Populist Paradigms

Traditionalism -- characterized by an Liberalism - Advocates for economic absolutist government and mercantilist liberalism, but seeks to limit the economic system, with economic gains distribution of political power within accruing to the State, whose Executive is well-defined limitations that legitimized by Divine Right justifications. advantage property owners over the The State Executive serves as the agent of propertyless. Sees the capitalist­ change. entrepreneur as the agent of change.

Cooperative Anarchy Revolutionary Populism - Emerged as a critique of the conditions that the propertyless endured under economic liberalism. ~--· Argues that society's interests are best served through public ownership of productive economic resources. The State~ Executive rules in the name of the "peoplei will." Sees "the worker" as the agent of · change. '------·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·

The aspirations of the popular classes to be able to participate in policymaking should be considered as a strong undercurrent of European history that gained momentum in the 19th century as working class men mobilized to claim their rights. Revolutionary PoEulism emerged as an influential critique of classical liberal capitalism in the mid- 19 century, gaining increased momentum after Marx's book Capital was published.

stumbling block for historical experiments in revolutionary populism - typically (as in classical liberal experiments) a minority appoints itself as the enlightened leadership able to discern the "general will," and thus empowers itself to establish the norms and institutions that make up the relations of ruling. Typically, however, such systems, more often than not, are unable to capture subjective local actualities. As their failure on local levels becomes evident, what often ensues echoes the logic of other paradigms desperately trying to maintain social control -- action and thought on local 30

levels become increasingly subject to surveillance and control, both physically and via textually-mediated discourse.

Historically, revolutionary populism has become synonymous with a political economy claiming to represent the interests of the working class majority over the capitalist elite. This theoretical possibility crystallizes as overt intent in the ideas of one of Rousseau's 19th century intellectual heirs, Karl Marx, who attacked the liberal order at its core by questioning the disjuncture between liberal ideology (which promotes idealizes freedom) the local, actual experience of inequality perpetuated by an economic system founded upon private property and unequal distribution of profits in the production process. Standing liberalism on its head, Marx argued that political power rightfully belonged to the working class, whose unfolding destiny was to lead

society into a peaceful, classless Paradise (cooperative anarchy in this study). 30 Until that change occurs, the proletariat would create a relations of ruling under a transitional dictatorship that would stratify access to power in favor of the working

classes rather than property owners.

Perhaps even more dangerous to the liberal order, Marx saw as key to class

struggle the political and cultural struggle required to expel from social consciousness the extra-locally disseminated (sub-rational) sense of common purpose between the

working and capitalist classes that Durkheim considered to be essential for social

stability. Marx charged that this false social consciousness only served to perpetuate

the real-world exploitative relationship that existed between those two classes, whose

30 Perhaps the earliest depiction of this type of idealized society in modem Europe can be found in Sir Thomas More's Utopia written in 1516. 31

true interests were in conflict with each other. Gramsci's invaluable contribution in this area was the argument that dominant groups maintain power and protect their own class interests through the use of cultural hegemony by creating historical mythology to justify the inegalitarian social structure. In Smith's analysis, this would correspond with the symbolic work carried out by elites to create and reinforce the cultural norms prescribing social roles in accordance with the hierarchical division of labor required by capitalism.

For Marx, critical, rational thinking by workers would make plain to them the true, exploitative nature of their relationship with property-owning capitalists, leading to a struggle for workers to regain their status as subjects rather than objects of history.

In turn, this struggle would advance rationalism in the modem world as workers

demanded the rights and access to power that remains beyond their grasp under the

classical liberal paradigm. Later on, as communism took center stage in historical

evolution, there would be no need for externally-imposed relations of ruling, and state

structures would "wither away" as humankind evolved into the type of beings who

were able to live harmoniously together without the need for external constraints

provided by military coercion, political rules or cultural norms.

In the real world of local, actual experience, revolutionary populist aspirations

for classless society in some distant future, take shape as classical liberalism's

ideological alter ego whose ambition is to construct a present-day society in which the

relations of ruling is also structured by class and driven by economic interests. Like in

classical liberalism, this ideal society chases its destiny with a hero at the helm. But 32

the hero has changed both his clothes and his class, revealing himself as the mythical worker who leads a vanguard guiding society to its inevitable, communist fate. As an ideology, then, revolutionary populism rests upon an unchallenged trust in the intellectual leadership of "the workers," their values and their priorities, while condemning as socially deviant the selfish property owner who can best save himself by submitting himself to the will of the people - the working class people, that is. To this end, revolutionary populism also stratifies access to political and economic power,

but in favor of groups made subordinate under classical liberalism, especially in the

context of class, but often without necessarily resolving underlying cultural prejudices

based on gender or race/ethnicity. In other words, like classical liberalism, revolutionary populist ideology is sustained through the imposition of extra-local relations of ruling that create a State bureaucracy designed to manage its interests. As

a proletarian dictatorship, revolutionary populism relies upon the State to manage the

economic and political affairs of "the people," viewing with suspicion uncontrolled

creativity - subjective knowledge springing from local, lived experience - for its

potential to upset the relations of ruling. In this sense, the revolutionary popular state

shares an appreciation for State-mandated order that maintains itself through the

repression of subjective experience, a hallmark of traditional authoritarianism, thus

blurring the distinction between the two for many. The crucial difference between the two, pointed out by Jeanne Kirkpatrick (political advisor to Ronald Reagan) is that

traditional authoritarianism seeks its legitimacy through pre-modem justifications for

control by economic elites while revolutionary populism, inspired by the French 33

Revolution and Marxist analysis creates its dictatorship of the proletariat in the name of "the people."

In this regard, while the rhetoric disseminated through textually mediated discourse under each of these ideological frameworks identifies different heroes

("capitalists" for classical liberals and "workers" for revolutionary populists) and villains ("Communists for classical liberals and "capitalists" for revolutionary populists) the level of social control required to repress for each paradigm is dependent upon the degree of contradiction that exists between officially sanctioned ideology and embodied knowledge emanating from local, actualized experience

Pluralism (Figure 5) completes the square as an ideological preference that

seeks to distribute both economic and political power broadly among all members of

society, thus implying a desire to heal the split between intellectual objectified knowledge that informs the practice of ruling and the subjective, embodied knowledge found in local actuality. While early advocates of inclusive social structures include the Levellers and the Fabian Society in England, pluralism did not solidify in modem western culture as an organizing ideology until the early twentieth century. For pluralism, arguably the least developed of the four frameworks, the common good can be found in a mosaic of cultural and experiential diversity that represents an aggregate

of subjective knowledge springing from local, actual experience. In this way pluralism envisions a society that continues to value the individual (unlike traditional

authoritarianism or revolutionary populism), but (unlike traditional authoritarianism or

classical liberalism) holds those interests accountable to their impact on the whole of 34

society through a practice of ruling that distributes both political and economic power broadly, incorporating embodied, subjective knowledge found in local actuality. In addition, while the most influential component of identity under both classical liberalism and revolutionary populism appears to be economic (emphasizing class- based differences) pluralism sees each person as having multi-tiered sources of

subjective knowledge that informs identity, which are best developed and explored through diverse voluntary associations and ongoing discourse about the practice of ruling. In this way, pluralism expresses a vision of ruling that incorporates (rather than excludes) the knowledge found through lived experience, thus honoring the

subjectivity of all persons.

Eisenberg identifies three episodes during which pluralist political ideology has

been shaped beginning in the early 20th century. The first ripple occurred between

1900 and 1920 under the influence of Americans John Dewey and William James who

saw a need for "fragmented power" within hierarchical social structure as a means of making room for the local actuality of lived experience to enter into public

discourse. 31 The second overlapping period, most closely associated with Englishman

Harold J. Laski and American Mary Follett occurred in the 1910s and 1920s, during

which time dominant "monist" ideas about "a unitary and sovereign state" were

challenged, displacing "the conventional preoccupations of liberal individualism" by

stressing the value of civil society groups as intermediaries between the state and the

31Avigail I. Eisenberg. Reconstructing Political Pluralism. (New York: State University of New York Press, 1995), 27. 35

individual."32 In the 1920s Harold Laski 'politicized' pluralism in partial critique of the 'monistic state' while emphasizing the need for diverse expressions of civil organization, to include "religious associations (from the more conservative viewpoint) and (from the left) the worker associations and trade unions or in guild and syndical associations."33 Eisenberg summarizes the primary arguments of political pluralism as "comprised of two intertwined themes: the distribution of power amongst groups, and the group's power to direct individual development."34 In this way, we can clearly see the intent of allowing subjective knowledge inform the practice of power.

By working through voluntary associations that aggregate embodied, subjective knowledge, early pluralists such as Laski hoped to correct a flaw found in capitalist social structure:

Classical ("integral') liberalism in the tradition of John Locke and Adam Smith had 'atomized' societal relations. Considering the individual to have precedence, both chronologically and logically, over civil society, the liberal model emphasized the absolute autonomy of freely competing men. "Sinister' factional interests were abhorred, the organization of such interests into permanent associations, especially trade unions, was rejected.35

32Avigail Eisenberg. "Pluralism and the Politics of Diversity," in Pluralism: Developments in the Theory and Practice of Democracy. Eisfel, Rainer, editor. (Farmington Hills, NY: Barbara Budrich, 2006), 59.

33 Theodore J. Lowi. "The Plural Forms of Pluralism." Pluralism: Developments in the Theory and Practice of Democracy. Eisfel, Rainer, editor. pp. 21-38. (Farmington Hills, NY: Barbara Budrich, 2006), 24.

34 Eisenberg, 1995, p. l.

35Eisfel, p. l. 36

Figure 5: Traditional, Liberal, Revolutionary Populist and Pluralist Paradigms

··-·---·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-• I 1 Conflict Anarchy . I ··-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-· Traditionalism -- The dominant Liberalism - Born as a result of paradigm in medieval Europe; England's "Glorious Revolution" of characterized by an absolutist 1688 and developed by 18th century government and mercantilist economic thinkers; advocates for economic system, with economic gains accruing to liberalism, but seeks to limit the the State, whose Executive is legitimized distribution of political power within by Divine Right justifications. The State well-defined limitations that advantage Executive serves as the agent of change. property owners over the propertyless. Sees the capitalist- / ----~ntrepreneur as the agent of ------·"change. ( Cooperative ....------1 1------1\ An~chy Revolutionary Populism - /Pluralism - Emerged in the Emerged in the 19th century as a ... ~-----~/ early 201h century and critique of the conditions that considered as the least developed the propertyless classes were forced to paradigm; envisions a society that endure under economic liberalism. Argues values individual diversity while that society's interests are best served holding individual actions through public ownership of productive accountable to their impact on economic resources. The State Executive society as a whole. Sees ongoing rules in the name of the "peoples' will." dialogue towards consensus as the Sees the laborer as the agent of change. legitimate agent of change.

A political economy approach to historical analysis yields four basic ideological types for a rule-based society, accompanied by the specter of Hobbesian conflictive anarchy and the hope of Moore's Utopia (cooperative anarchy).

The two paradigms on the left seek to harness the power of the State to mandate terms regarding the distribution of economic power, while the two on the right see the individual and his/her creativity as the most dynamic economic force available.

While the two paradigms on the top believe in the authority of economic elites with the power of private property at their command, the two lower paradigms advocate for a society in which the propertyless are considered as important members of society, with the right to participate in political processes and to greater benefits from economic activity.

Through voluntary associations Laski believed that classical liberalism's theoretical flaw, that we act solely as individuals, would be corrected to acknowledge 37

that we are individuals who live and work within the context of overlapping social

groups which (Smith would add) have differing influence over the relations of ruling,

given their position in the social hierarchy. Laski also critiqued the dichotomy

between liberalism's idealization of individual freedom and the lived experience of

economic disempowerment by asserting that "no political democracy can be real that

is not as well the reflection of an economic democracy"36 Dahl later took up this

point, calling for both a "participatory democracy and an employee-controlled

economy"37 Eisfel observes that "starting from the [ideological] premise that unequal

social resources will translate into unequal political resources, both Laski's and Dahl's

pluralist programs focused on diminishing the discretionary exercise of organizational

power by economically privileged minorities. "38

The third period of expansive pluralist thinking occurred after World War II

and American political scientist Robert Dahl served as its intellectual leader. 39 The

focus of these discussions was about how intermediary groups such as coalitions and

trade unions could provide a means to overcome the unequal distribution of economic

power in society. This economic question had, to some degree, been resolved by

Keynesian economics which acquired theoretical dominance in the 1930s. Under

Keynesianism, the government was empowered to act as mediator to redistribute

economic resources through deficit spending, social investment, price controls and

36Eisfel, 18.

37 Eisfel, 14.

38 Eisfel, 14-15.

39 Eisenberg 2006, p. 6 38

other measures. Since access to political power has historically been skewed in favor of the upper classes in western (capitalist) society, one facet of discussions about political pluralism in the post World War II era focused on the tendency for the interests of successful coalitions to be incorporated into the agenda of competing factions of elites, while less powerful sectors continued to be marginalized from power-sharing, through what Connolly calls the competition of elites,40 which Smith might argue simply changes the parameters of repressed knowledge found in local actuality vis-a-vis officially sanctioned knowledge disseminated by the intelligentsia through textually-mediated discourse.

To this end, Galston invites us to discard the idea that pluralism occurs in the context of intermediary groups competing for political dominance in favor of the idea of "moral pluralism" based on the intention of cooperation. In political life, moral pluralism (expressed through symbolic intellectual work) translates into an "unending dialogue between the differentiating force of individuality and the organizing tendencies of commonality."41 One of the most articulate advocates of this type of thinking was Jlirgen Habermas. Habermas considered the project of modernity as unfinished and sought to do away with class conflict through communicative action, authentic discourse, based on the assumptions of equality and consensus, constructing a society in which all individuals are given space to engage in public discourse that informs the practice of ruling. In this way social structure would do away with

40William E. Connolly. The Bias ofPluralism. (New York: Atherton Press, 1969), 13.

41 William A. Galston. Liberal Pluralism: The Implications of Value Pluralism for Political Theory and Practice. (Cambridge, United Kingdom: Cambridge University Press, 2002), 78. 39

hierarchical power as well as the repression required to maintain a society whose ideological vision is not informed by subjective knowledge found in local actuality.

Similar to Weber's concern about the "iron cage" of bureaucracy, Habermas asserted that the crisis of modernity stems from the way the structure of modem society (the system) distorts and controls the life-world of authentic interaction and communication. He argued that it is through communicative action that people regain

control over the system, creating larger spheres of freedom through a social contract

based upon the consensus of informed, knowledgeable citizens. In Smith's terminology, the same idea would be expressed as a proposal to resolve the crisis of

bifurcated consciousness in which the relations of ruling is not informed by subjective knowledge found in the local actuality of lived experience. In this way, the transition

from capitalism to communism (if it were to occur), would occur by means of reason,

conscious choice and open discourse rather than revolution and force. In other

words, for pluralists, a new world, one that values the subjectivity of each person, is

possible through inclusive dialogue that seeks consensus while honoring local,

subjective knowledge, whether reflective of differences of class, gender, ethnicity/race

or some other characteristic.

If the three preceding ideological frameworks can be faulted for idealizing an

archetypal figure - the monarch, the entrepreneur, and the worker - pluralism can be

faulted for idealizing a process - dialogue - that is meant to avoid single-group

domination. As modem critics have pointed out, though, what is theoretically possible

(broad consensus achieved through participatory dialogue), often gives way to 40

coalitions of various interests competing for dominance rather than the envisioned associations working towards compromise based on the premise of cooperation and mutual respect.42 This tendency would suggest that pluralism's weakness as a guiding force in society is its dependency upon faithful efforts at open dialogue and a will to compromise, and its vulnerability to social unrest under the weight of irreconcilable difference between opposing groups. What is delicate under pluralism relates to when and how to conclude the process of discourse and move towards a framework for ruling via consensus, for as Eisenberg observes "all pluralists recognize that coercion is the only alternative to political pluralism."43 In other words, only by sustained dialogue across society can we hope to achieve rule by consensus rather than domination by elites advantaged by one ideological persuasion or another. Challenges to successful closure in this process arise, of course, if consensus cannot be readily achieved, as occurs when people with diverse values, needs and goals exist in community together.

Equally important, it is false to assume that all social theorists equate the advance of modernity with the advance of equality. Traditional authoritarian and classical liberal ideology, for example, assumes that a stratified society with elite and non-elite elements (complete with prescribed social roles) reflects a natural and healthy social order. According to this mindset, uncontrolled democracy (a political system that values equally the subjective experience of all its members) creates the potential of

42Lowi, 25.

43 Eisenberg, 1995, 3. 41

consummg that natural order with the chaos of totalitarianism, as a less capable majority impose an oppressive relations of ruling upon those argued to be the more

capable, but numerically fewer -- property owners, that is. Jean Kirkpatrick defended the Southern Cone authoritarian regimes in the 1970s by disseminating the

controversial "Kirkpatrick Doctrine" that maintained that modernization creates a tempest of rising expectations, by introducing "foreign," Western ideas such as

democracy, for which traditional societies are unprepared. By introducing a flurry of

ideas not grounded in traditional experience, Kirkpatrick argued through textually

mediated discourse that the process of modernization could delegitimize and

destabilize the traditional leader, creating an "alienation from existing authority

[which] is the principal determinant of a group's susceptibility to Communism."44 For

Kirkpatrick, a premature step into democracy is a false step because it is not rooted in

the symbolic knowledge that informs the traditional (sub-rational) mind, thus giving

rise to Kirkpatrick's somewhat famous distinction between traditional authoritarianism

(to be tolerated) and totalitarianism (to be rooted out).45 Chilean constitutional scholar

Jaime Guzman offered a similar point of view during a magazine interview to interpret

events in his country:

The experience of [Allende's] Popular Unity [government] demonstrated something very important, and that is that democracy as a form of government does not

44Jeane Kirkpatrick, Dictatorships and Double Standards: a Critique of US. Policy. (Washington DC: Georgetown University Press, 1979), p. 132

45Kirkpatrick's overt support of authoritarian regimes, while famously controversial, is pre­ dated by the Mann Doctrine, put forth in 1964 by Thomas Mann of the Johnson Administration, who informed a private audience that "the U.S. would no longer seek to punish military juntas for overthrowing democratic regimes" For further information see Robert A. Packenham. Liberal America and the Third World. (Princeton, NJ: Princeton University Press, 1973), p. 95. 42

intrinsically favor the liberty, security and progress that we all idealize. Never before did Chile experience such a threat of totalitarianism and the hypertophy of statism that suffocates liberty. 46

To be sure, the question of when traditional societies would become democratic societies (and allow subjective, embodied knowledge to inform the relations of ruling) has provoked passionate debate even among amongst development/modernization theorists. While embracing the vision of worldwide democracy, early on modernization theorists expressed general consensus that democracy most naturally occurs later rather than earlier in the development process, although without any seeming agreement about how that transition would occur.

As the above review of theory indicates, once the traditionalist, medieval notion that social order was pre-ordained by divine reason lost its luster, ideas about how society should be organized appeared one after another, each portraying its own unique picture of what best reflected a "natural" social order, only to be criticized by its ideological opponents. Traditionalist authoritarians (structuralists remobilized by

Durkheim) lauded deep social ties based upon unquestioned traditional culture to quell social unrest that might disrupt social order. For Weber (and modernization theorists who followed his reasoning), the proper evolution natural order could be discerned through a constant progression of rationality (and bureaucracy) to manage the complexity of a social order based on the premise of individual subjective knowledge and experience. For Marx and other conflict theorists, only class struggle and revolutionary conflict would lay bare the contradictions of capitalism's bifurcated consciousness and pave the way to egalitarian communism, via socialism and a

46Malu Sierra. "El Poder de Las Ideas." Hoy (23-28 August 1979), 25. 43

dictatorship of the proletariat. For pluralists, sustainable changes in the practice of ruling would come about through constructive, continuous dialogue informed by the embodied knowledge of local experience, that would yield a multi-dimensional social structure honoring the subjectivity of its members. History teaches us that broad social change, the kind of change that is demanded when egalitarian ideals confront an inegalitarian society, most often occurs through a combination of conflict, confrontation and negotiation, often through the use of textually mediated discourse, that alter the relations of ruling. History also teaches us that broad social change will have the greatest chance of permanence in the face of social challenges if the members of society embrace the norms and expectations articulated through the change.

While the intersection of politics and economics gives us four basic ideological types that have framed historical debates, midwived new ideological positions and

structured human creativity for centuries, the preceding theoretical review alludes to a third consideration that is essential -- an analysis of the relations of ruling can really only be understood within the specific context of culture (symbolic knowledge), which

informs both how the populace believes power should be distributed in everyday life and how likely is it that powerful sectors of society will renegotiate the distribution of power in the face of disagreement. Further, understanding cultural context helps us understand the probability - and probable direction of - social change via cooperative

processes rather than abrupt paradigmatic shifts achieved through revolution. The

strands that weave this cultural context together can be found through an examination

of textually mediated discourse, an important tool for both shoring up - and tearing 44

down - both the social construction of reality and the relations of ruling that reflect its underlying ideology.

If textually mediated discourse is successful in persuading those governed that the existing (or proposed) political and economic power arrangements as the best possible option, they will conform to them. But if influential sectors of the populace are not convinced by textually mediated discourse that the proposed political and economic power arrangements are justified, stability can only be maintained through overt coercion - at least until such time as the dominant ideology is internalized and external repression is no longer required. In this array of ideologies there exists a spectrum ranging from Hobbesian conflictive anarchy to Moore's cooperative anarchy that reflecting differing perspectives about the level of internalized agreement with the external rules framework. In a society where there exists complete agreement,

stability is maintained without any external framework guiding social behavior

(cooperative anarchy). Stability can also be achieved under the auspices of cultural rules, where one's own sense of identity and social role is reinforced through generally accepted social myths. When internalized cultural rules cannot guarantee conformity with social structure, political rules are created to guide social life, complete with punitive prescriptions for deviant behavior. Military or police coercion is required to maintain stability when large-scale deviance from social rules occurs, and in cases where armed forces cannot maintain stability, the social structure disintegrates into the

kind of conflictive anarchy that Hobbes' charged would make life "solitary, poor, 45

Figure 6: The Four Paradigms and Levels of Cooperation and Coercion

Conflictive Anarchy ·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·------I ' Traditionalism Classical

_/ -- - ·- - _ --~i·b.:'.a·...l .. ism ...... ·· .... ·· ...... "··· ...... ··· .... " ...... ······················ ...... ···· ...... ·" \ ( ( ,.· " ...... ··· ...... " ······ ...... ····· "· ...... !,...... Cultural Consensus ...... ~~~~~~~~-...... ,.,.... ·· ...... ·· ·· ...... ·· .... ·· ...... I Political Negotiation ...... · .... ··· ···················· .... Revolutionary ······················································" Populism Pluralism Military Coercion ·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·--J Conflictive Anarchy •. -. -. - -. - . -. -. -. -. -. -. -. -. -. -. - . -. -. -. - . - . -. -. - . -. -.- . -. - . -. -. - . -. - . -. -. -. -. -. - . __. __ . -.

The three concentric circles within the ideological "box" represent various means of maintaining stability under specific ideological frameworks. The inner circle is a space of cooperative anarchy where no external rules are required. Next to this is a space in which cultural rules internalized by members of society enforce adherence and social stability through a consensus that is often unspoken, sub-rational and unconscious. The adjacent space acknowledges the need for political rules (supported by cultural rules) to maintain stability - this space lives under the "threat" of stability maintained by overt coercion via the military/police, which is the space closest to the edges of the square that separates stable society from conflictive anarchy. In a utopian situation, social stability is maintained without any need for external rules, under a system of cooperative anarchy. When disputes arise, however, cultural rules can help reinforce conformity. Political rules are developed to govern social life where different norms and values co-exist with the help of dialogue between empowered citizens. Military/police coercive force is exerted to maintain stability in societies where a portion of the populace refuses to comply with the legal structure, in order to prevent a descent into conflictive anarchy. 46

nasty, brutish and short." This brings us to a conclusion (expressed in Figure 6 above) that will help frame the analysis to come.

The rules of relations of all social orders reflect specific ideological stances

regarding the distribution of political and economic power, with an attendant

bifurcation ofconsciousness manifest in intellectual knowledge managed by elites and

an embodied knowledge of subjective experience found on local levels. This

bifurcation of consciousness necessitates the use of repression, often carried out

through textually mediated discourse, in order to negate the truth found in subjective,

local experience. Further, this bifurcation of consciousness is the source of systemic

weakness -- if the subjective knowledge of local experience becomes a more valid framework for interpreting social reality than the framework provided by dominant

ideology, stability can only be maintained through increasingly coercive levels of

reinforcement, ranging from cultural to political to military force, to extract

compliance in the face ofdissent.

It is this swirl of contradictions and fragmented knowledge that drive the

liberal, capitalist order in its current permutations, as individuals are promised

opportunities for self-actualization, albeit with varying probabilities of success, given

their position in the hierarchical division of labor. It is these forces, the evolutionary

interaction of competing ideologies about the "proper" social construction of reality

that were in play during the 1970s in Chile, first bringing to office Salvador Allende

with a mandate to transition Chile peacefully to socialism, and then dictatorship and

repression as the military and their allies seized power in defense of their vision of 47

"western, Christian civilization." The task before us is to examine these events and to learn from them. CHAPTER3

METHODOLOGY -A MULTI-POLAR POLITICAL ECONOMY

APPROACH

We have not reached the 'end of ideology' in political inquiry, but we have, until recently, seen a justifYing ideology dominate the field. Responsible political inquiry requires the researcher to become more aware of how and where deeply rooted commitments shape his methodological moves. 48

The economic liberal 's project is not only to pursue a correct scientific understanding of the world but to change the intellectual climate of opinion toward an appreciation of the liberal project of constraining the government and encouraging the voluntary cooperation ofindividuals in society. Peter J. Boettke49 from his essay "Milton and Rose Friedman's "Free to Choose" and Its Impact in the Global Movement Toward Free Market Policy

The comparative-historical approach is one of the oldest traditions in sociology. Skocpol defines historical sociology as a "tradition of research devoted to understanding the nature and effects of large-scale structures and fundamental processes of change."50 While historical sociologists inherited a focus of class- centered and state-centered analysis from the 19th century, comparative study combines history with cross-national research, making comparisons across cultures, institutions and communities. In recent years comparative-historical sociologists have

48 Connolly, 21.

49 Peter J. Boettke. Milton and Rose Friedman's "Free to Choose" and Its Impact in the Global Movement Toward Free Market Policy: 1979-2003, in The Legacy of Milton and Rose Friedman's Free to Choose: Economic Liberalism at the Turn of the Twentieth Century. http://www.dallasfed.org/research/pubs/ftc/ftc.pdf, 145-146.

50Theda Skocpol, editor. Vision and Method in Historical Sociology. (United Kingdom: Cambridge University Press, 1984), 4. 48 49

argued that race, ethnicity and gender are also important lenses for social analysis and that the state no longer provides the only relevant boundaries for study. Other

influential bodies include "supra-national entities" such as the IMF, NAFTA, GATT,

and the WTO. 50 In the spirit of pluralism, Emirbayer and Sheller remind us about the

importance of civil society as a social actor maneuvering between the structural boundaries laid out by the "master concepts" of the state and "capitalist social

relations."51

Ragin argues that comparative-historical sociology took a "historical tum" in

the 1980s, finding value in the case study as a means to ground abstract theory within

the context of a particular time and place. This historical tum was followed by a

"cultural tum" where it was argued that, in order to fully understand the twists and

turns of a particular case, the researcher must understand its "cultural core," so as to

arrive at the "inner workings of human social life in each case" 52 to acquire deep

understanding of the social dynamics in play. Indeed, culture, by definition bound to

specific times and places, makes it true that the particular location and context in

which action takes place is just as important as the act itself. In other words, while we

can work to identify streams of logic governing broad concepts, such as the

50 David Stark "New Social Forms in World Society: Beyond State and Class" in the Newsletter, Fall 1998 http://www.cla.sc.edu/socy/faculty/de fl em/comphist/sectionpage.html#memb

51Mustafa Emirbayer and Mimi Sheller. "Studying Publics in History." Comparative & Historical Sociology Newsletter 11: 1 (Fall 1998). http://www2.asanet.org/sectionchs/newsletter/chs98fall.pdf. Emirbayer and Sheller, Studying Publics in History http://www.asanet.org/sections/chsfall98a.html#tyri

52 see Ragin's essay and related papers in the Newsletter, Fall 2000 http://www.cla.sc.edu/socy/facultv/deflem/comphist/sectionpage.html#memb [Accessed June 27, 2007). 50

distribution of economic and political power, it is important to remember that specific expressions of those power relations will manifest themselves in the context of cultural expectations - and the need for the State to bring those expectations into conformity with the rules framework it perpetuates.

As qualitative analysis, comparative sociology concentrates on the detailed study of a limited number of cases. The goal of comparative study is to understand causal dynamics through an intimate understanding of the case in all of its complexity.

This intimate understanding is best achieved by understanding the characteristics of the present moment through the historical trends that have led up to the present. In addition, comparison between the similarities and differences of individual cases, or between the aspects of one case and an ideal type case, can help reveal the influential dimensions of each unique situation, as the researcher becomes investigator to understand the why and how of each case by discovering the inner logic that propels the currents of social forces forward.

Although the beauty of comparative-historical analysis is its flexibility -

scholars are not bound to any specific theory, method or academic discipline - this flexibility means that a case study approach can disintegrate into unfocused analysis, limiting its contribution to general theory or applications of the knowledge gained through the study to other cases. However, by being mindful of existing theory and research, comparative-historical sociologists place empirical questions in a

comparative context and their work can indeed contribute to the further development

of theory and understanding of social causality. 51

In this descriptive study, Chile serves as the focus of analysis as it evolved in the context of liberalism since its exposure to that European concept. The argument

being explored is that the 1980 Constitution put into place under the Pinochet dictatorship was meant to correct "flaws" in Chile's social design that led to the election of Salvador Allende with the mandate to legally replace capitalism with

socialism. Further, the primary "flaw" being addressed was the onset of majority rule

- free flowing democracy - which was corrected through the institutionalization of non-democratic practices via Pinochet's "Constitution of Liberty," which was intended to end a centuries-long debate in that country regarding inclusivity.

This study was born out of a nagging doubt about the viability of economic

structural adjustment ("to get the prices right") as a companion to democracy-building

in developing countries. The question needing an answer asked how inclusionary political processes (democracy) can support the exclusionary economic policies that

structural adjustment programs invariably tum out to be. While many structural

adjustment programs were initiated in the 1980s as a condition for much-needed loans made by the IMF to developing countries, Chile has the distinction of having initiated

its own structural adjustment program almost a decade earlier under the auspices of a military dictatorship, making that country the ideal focus of a case study about

neoliberal reform. Curiosity drove the work over the next seven years, weaving

together a review of primary and secondary sources in search of an understanding

about how the oft-reviled dictator Augusto Pinochet came to develop a neoliberal

economic model that would soon be emulated across Latin America and beyond. 52

Early on it became clear that intellectual leadership of Chile's neoliberal revolution tied national civilian elites to international networks of self-identified classical liberals (and libertarians) - Milton Friedman of the Chicago School of

Economics and Friedrich Hayek of the Mont Pelerin Society, in particular. A peculiar phrase kept popping up as well - Pinochet (and other Southern Cone dictators of the

1970s) claimed repeatedly that their task was to save "western, Christian civilization."53 If these claims were to be believed, Pinochet and the others saw their mission as much larger than simply clearing out a distasteful government.

Initial research efforts focused on a review of secondary sources of information about Chile's dictatorship and economic revolution. To be sure, much had been written about Allende, the coup, Pinochet, the Chicago Boys, the 1980 Constitution and the much-celebrated return to democracy in 1990, suggesting that the examination

of textually mediated discourse would serve as a natural research methodology. Many

of these accounts are simply descriptive in nature; other accounts that do provide an

analytical review quite often focus on only one aspect of the military government,

often either its political repression and human rights abuses or its economic restructuring program that reestablished a market-driven economy. But what

remained largely unexamined is the relationship between the politics and the

economics -- was the political repression of the Pinochet regime related to the

economic restructuring program? Do democracy and structural adjustment go

53Rojas Sanford maintains that the phrase "western and Christian" surfaced during the 1964 presidential campaign "as an answer to the 'oriental, atheistic world' in defining the struggle of capitalism against Communism." Robinson Rojas Sanford. The Murder ofAllende and the End of the Chilean Way to Socialism. (New York, NY: Harper & Row, Publishers, 1976) p. 229 (footnote 9). 53

together or not? Three years after the coup, one prominent Chilean, economist

Orlando Letelier, shared his own doubts:

It is curious that [Milton Friedman] the man who wrote a book, Capitalism and Freedom, to drive home the argument only classical economic liberalism can support political democracy can now so easily disentangle economics from politics when the economic theories he advocates coincide with absolute restriction of every type of democratic freedom. 54

Beginning in 2001, the investigation into this nagging question was enriched by a review of first-hand accounts from U.S. Government officials through the public release of thousands of documents from the State Department, the CIA, NASA, the

FBI and other agencies under the "Chile Declassification Project". 55 The content of many those documents made it very clear that Pinochet's vision for Chile's future was revolutionary indeed, but did not support accusations that it was being planned in concert with the US government, although the US clearly did not oppose Pinochet's overthrow of Allende or his long-term objectives. If Pinochet's economic model did not come from Washington, either through the IMF or the US government, where did it come from?

A review of existing literature confirmed the value of early advice from renowned Chilean political scientist Arturo Valenzuela to "remember complexities."

Indeed it is clear that pinochetistas did not present a united front at all. Admiral

Merino and the Navy, for example, were instigators of the coup and provided a link to the Chicago Boy economists, who did not get along well with many of their less

540rlando Letelier. The 'Chicago Boys' in Chile: Economic 'Freedom's' Awful Toll. The Nation (August 28, 1976) 137. This article was published a mere twenty-four days before Mr. Letelier was assassinated in Washington DC by agents of the Pinochet regime.

55 This release of documents occurred after the U.S. Government lost a suit filed by the Institute of Policy Studies, the Washington-based think tank where Orlando Letelier worked when he was assassinated. 54

intellectual allies found in the military. Indeed, Merino had been put in charge of the

economy soon after the coup. The ruthless Air Force General Gustavo Leigh, on the

other hand, maintained ties with a secret Latin American network, the Confederacion

Anti-Comunista Latinoamericana (CAL) that brought together some of the most

virulent anti-Communists and brutal military officers and death squad leaders across

the continent. Army General Pinochet, whose own intellectual capacity was non­

descript and who joined the coup plotters late in the game, was seen by some as an

arbiter between these two factions who, at times were at odds with each other.

While Pinochet assembled a group of like-minded civilian advisors to review

and comment on an early draft of his Constitution (made law in 1980), two members

of that Council of State, Pedro Ibanez and Carlos Caceres, felt compelled to write their

own dissenting, "Minority Report" when the Council's work was completed. In many

ways, Pinochet, who achieved early dominance over the other junta leaders,

consolidated control and balanced the competing interests of his "united" front with

surpnsmg skill. The clear evidence of internal division among Pinochet allies

suggested that only a theoretical framework recognizing the co-existence of

ideological difference (such as the multi-polar model developed for this study) could

help uncover the logic that held these fractious groups in a tenuous, but not seamless,

union.

In 1992 a cache of thousands of Stroessner era government documents were

unearthed in an obscure warehouse near the capital of Paraguay, providing

unparalleled access to the internal workings of that dictator and his allies. 55

Subsequently bound in volumes and transported to Asuncion, these documents provided clear evidence to Spanish magistrates investigating human rights abuses committed under the Southern Cone dictators as well as to independent investigators and academics studying that era of Latin American history. Now preserved as an archival collection by the current government, these "Archives of Terror" also shined light on the thinking of Stroessner's Southern Cone allies - indeed among these documents was discovered one of Chilean Colonel Manuel Contreras' invitations to

Southern Cone military men to form what became known as "Operation Condor," the network whose crimes included facilitating the murder of Chilean exile leader Orlando

Letelier in Washington DC. A visit to Asuncion in 2002 yielded a cache of documents about the above-mentioned secretive network, the Latin American Anti-Communist

Confederation (CAL), 56 whose Chilean representative was Gustavo Alessandri and

56 The Confederacion Anticomunista Latinoamericana was founded in August 1972 as the Latin American branch of the World Anti-Communist League (WACL). WACL was founded in 1966 in Tapei, Taiwan as a secretive international membership organization opposed to communism. In the late 1970s WACL boasted 63 national members, ten international organizational members and eighteen associate members and a training institute, the Political Warfare Cadres Academy in Taiwan, which offered scholarships to its members for training on psychological warfare. CAL was headquartered in Guadelajara, Mexico and its members came from across Latin America with high level support from many Latin American dictatorships such as Stroessner in Paraguay and Videla in Argentina. Guatemala death squad leader Mario Sandoval was a member of CAL, as was Alpha 66, a Cuban paramilitary organization committed to the overthrow of Fidel Castro that has been linked to anti-communist terrorist activities. Gustavo Alessandri was Chile's representative to CAL. Although the strength of ties between Chile's military junta and CAL/WACL are not clear, General Leigh was a hardline member of the governing junta when he gave this speech at the CAL meeting in Asuncion, Paraguay. As head of the Chilean Air Force, Leigh's institutionalized ruthlessness was considered second to that of Manuel Contreras' intelligence agency, DINA (see Memorandum of Conversation between Vice President Mondale and Eduardo Frei, among others, dated May 25, 1977). We also know of one visit by the then-WACL president, Dr. Carlo Barbieri Filho of Brazil to Chile in September 1975, during which he met with Pinochet and Leigh, as well as other high ranking government officials (WACL Circular 009/75-PWA dated September 1975). There is also a letter dated April 9, 1979 (reference 00094 F 1114) from Pinochet to the organizing committee for the XII WA CL Congress stating that Pedro Ibanez (Council of State member) would represent the Chilean government at the WACL Congress, to take place in Asuncion later that same month. In addition to holding "ordinary" congresses, CAL also formed working groups, such as the "Section for Political Parties and Military 56

before which coup leader General Gustavo Leigh gave a speech during CAL's annual convention in 1979. 57 Other documents revealed a surprise: handwritten notes from a seminar held in Argentina about 19th century European thought, ranging from Hegel,

Kant and Marx to the First and Second Internationals. The existence of privately used documents discussing the evolution of western thought supports the idea that the

Southern Cone militaries indeed placed their battle in the 1970s squarely in the context of evolving western, Christian civilization. In other words, perhaps these generals' claim that their mission was to save civilization was not just a rhetorical device - perhaps they actually believed this claim themselves. Testing this thought indicates that a study about what happened in Chile under Pinochet must be situated within the broader context of western, capitalist civilization itself.

Conversations with Chilean economist Fernando Leiva led to a search for and subsequent visit to the archival collections of Austrian School economist Friedrich

Hayek and the secretive Mont Pelerin Society (MPS), which Hayek had founded in

1948 out of a now familiar sounding concern about dangers to the "central values of

Organizations" and "Commissions" which, at times held "secret" meetings. (ref: Paraguayan Archives documents 108F 1661 and 00198F 1661-1669) Much of this information is found in original W ACL and CAL documents preserved by the Centro de Documentaci6n y Archivo para la Defensa de los Derechos Humanos of the Corte Suprema de Justicia in Asuncion, Paraguay.

57 I first learned about this archive while working as a research assistant to John Dinges who was writing a book about Operation Condor. As his assistant I read hundreds of documents from the archive, which I summarized and catalogued. I was particularly interested in finding out more information about the secretive World Anti-Communist League and its Latin American branch, the Confederaci6n Anti-Comunista Latinoamericana, which fell out of the scope of the research on Operation Condor. I later traveled to Asuncion myself to read and copy other documents about W ACL and CAL, given that this archive contains the only known records available to the public on this secret, but important network that operated across Latin American and around the world in the 1970s and 1980s. Afterwards I turned copies of all the documents I read for Mr. Dinges plus the documents that I collected for my own research over to the National Security Archives located in Washington DC, along with a simple database that summarized each of the documents I had read. 57

civilization." Although Hayek has been recognized in many accounts as having influence in Pinochet's Chile (Pinochet had even nicknamed his 1980 Constitution

"The Constitution of Liberty" after Hayek's book by the same name), previous

scholarship did not provide a clear understanding of how Hayek had become involved in Chile, or what his influence was exactly. His admirers, on the other hand, took pains to distance Hayek from the dictatorship when human rights abuses became one

of its defining characteristics. The pieces to this part of the puzzle were found in the two archival collections maintained by the Hoover Institute on the campus of Stanford

University. Correspondence found in these collections confirmed an ongoing student-

master relationship between leading Chicago Boy economists and Professor Hayek

and also revealed the name of Chile's member of that international society of

"classical liberals" - Pedro Ibafiez and Carlos Caceres (the two dissenting members of

Pinochet's Council of State). 58 The collection also included copies of papers

presented at the 1981 meeting of the MPS in Chile whose theme was democracy. The

personal correspondence with Hayek and the participation of several of Pinochet's

civilian advisors in MPS conferences make it clear that Hayek's influence was

intellectual and was wielded through both informal and formal relationships that

facilitated an ongoing exchange between the junta's advisors and prominent European

and American classical liberals regarding both classical liberal theory and "best

58Pedro Ibanez joined MPS many years before the 1973 coup. A successful businessman, he served as President of Chile's Chamber of Commerce and also as a Senator from 1961-1973. Chile's second MPS member was Carlos Caceres, fellow Council of State member, co-author of the dissenting Minority Report mentioned above,(and subsequent Minister of the Interior under the Pinochet regime. Carlos Caceres was apparently nominated for MPS membership by Professor Hayek himself. 58

practices." The deep respect that many of Pinochet's civilian advisors demonstrated for Hayek suggests that his ideas, which encompass history, political science and economics (unlike Friedman, a fellow MPS member, but an economist through and through) would hold a clue to what ideas the Chilean advisors themselves held dear.

An Austrian by birth, Hayek's thinking was shaped by European culture, suggesting a need to become conversant in European thought about political economy.

Participation in a week-long summer seminar organized by the libertarian Institute for

Humane Studies confirmed this suspicion, which gave way to a fuller study of the

European intellectual history since the advent of capitalism that was subsequently incorporated into the study. At the risk of oversimplification, Hayek, who identified himself as "an unrepentant Old Whig"59 extolled the virtues of economic liberalism

(symbolized by the English Revolution), while vilifying political liberalism

(symbolized by the French Revolution).60 Hayek's solution to the potential destabilizing influence that broad political democracy could have upon civilization was to re-build social order upon the bedrock of classical liberal principles, which had been increasingly abandoned in the 20th century with the popularization of Keynesian economics and social democracy.

Visits in 2005 to two archival collections in Chile: those of the Fundaci6n

Jaime Guzman and the Vicaria de Solidaridad added to the mounting evidence that

9 ' Friedrich A. Hayek. The Constitution of Liberty. Chicago: (University of Chicago Press, 1960), 409.

60 Hayek believed that the market (and, by extension, society) should function as a "spontaneous order" which creates an institutional framework to allow the maximum level of freedom of action and individual choice. Theoretically, at least, no one individual controls the evolution of the spontaneous order, rather, its evolution is defined by an infinite number of choices by all participating individuals. See Thomlinson, pp. 18-25 on this point. 59

Pinochet and his allies were indeed intent upon fomenting a revolution intended to last

longer than any dictatorship, and to recreate a social structure that reflected their vision of western, Christian civilization. Further, this vision appeared to be one that

consciously drew upon English economic liberalism and traditional (pre-modem)

cultural values while denigrating the values of political liberalism let loose upon

western civilization via the French. After examining diverse documents from unrelated primary sources on two continents, it seemed reasonable to assume that this

stated concern for the future of western civilization might very well be the thread that held the fractious elements of the Pinochet regime together. If so, it would also

provide the logic that would explain what happened in Chile under Pinochet, and why.

Semi-structured interviews were carried out with two prominent Chilean

political activists to clarify and confirm several of the conclusions being reached in the

course of this study. Jose Aylwin, son of Chile's first president after the dictatorship

ended, is an internationally recognized expert on indigenous rights and legal issues.

Mr. Aylwin currently serves as Co-Director of the Observatorio de Derechos de los

Pueblos Indigenas (Indigenous Peoples' Rights Watch) and is also Coordinator of the

Indigenous Rights Program at the Universidad de la Frontera in Temuco, a city in

southern Chile and a center for Mapuche activism. In these roles Mr. Aylwin has

played a prominent role not only in defending indigenous rights before national

bodies, but also before international human rights organizations, such as the Inter­

American Comission on Human Rights. 60

A second interview was conducted with the head of Chile's Humanist Party,

Tomas Hirsch. Mr. Hisch, a long time political activist and dissident under the dictarship, helped to found Chile's Humanist Party, which was the first party to be legalized in 1987 (following their dissolution under the dictatorship). Mr. Hirsch also helped to found the Concertaci6n political coalition that has governed Chile since

1980, but his party withdrew from the coalition in 2003 to form the Juntas Podemos

Mas (Together We Can Do More) Coalition together with the Communist Party and other leftist political organizations. Recently named his coalition's presidential candidate in the 2009 elections, Mr. Hirsch also ran for president in the 2005 election

(which Michele Bachelet won) on a platform that was critical of many of Pinochet's legacies, including the 1980 constitution, the binomial electoral system and neoliberal economic policies. As the Latin American spokesperson for New Humanism, Mr.

Hirsch travels throughout the continent promoting humanist ideas about pluralism and inclusivity while denouncing neoliberalism and exclusionary political practices.

For the reasons outline above the study first offers an overview of political, economic and social trends since the onset of liberalism in the late 1?1h century. While geographically Chile is located in South America, Chile's elites consistently looked to

Europe for intellectual leadership in both politics and economics. Indeed, one might say that the first "structural adjustment" program in Chile occurred in the 19th century as early Chilean governments completed Spain's efforts to impose European ideas on creole and indigenous groups through privatization of property under European-style

governments organized under constitutional contracts. In this respect, this study 61

about what Pinochet and his allies hoped to accomplish during their seventeen-year rule is carried out within the broader, international context of the civilization that preoccupied the generals so much, embracing the basic tenets of historical­ comparative research.

Each section of the study begins by summarizing the international ideological context in which Chilean social action took place before looking at Chilean political economy under its three constitutions of 1833, 1925 and 1980. In this way we can see clearly that each constitution presented a master frame for social order within both the context of a defined ideological framework and a specific historical time period.

While this study is focused on one particular country, it hopes to make a broader contribution to historical-comparative sociology as well. By understanding how

Chile's constitutional contract changed in an effort to create a rules framework to mediate social relations, we hope to gain enlightenment about the fundamental nature of liberalism as an organizing concept and in contrast to competing paradigms - by understanding how those dynamics played out in Chile, leading first to the election of

Allende, followed by Pinochet's coup, and, arguably, by the subsequent return to democratic processes in 1990.

While the attention of historical-comparative sociology is traditionally focused upon large-scale structures, this study focuses its attention on large-scale ideas about structures. Indeed, in the preface of his 1982 edition of Capitalism and Freedom

Milton Friedman writes: "Only a crisis - actual or perceived - produces real change.

When that crisis occurs, the actions that are taken depend on the ideas that are lying 62

around."61 This study is an attempt to identify the myriad of ideas about political and economic ideas that were "lying around" Chile in the 1970's, to tease out where those ideas came from, to follow what happened to them, and, most importantly, to learn of their influence upon the everyday life of everyday people.

61 Milton Friedman with the assistance of Rose D. Friedman, ix. CHAPTER4

THE SHAPING OF EARLY LIBERALISM

In modern times, three major issues have emerged in western states. The first was the religious issue: the place of the church and/or various religions within the nation. The second has been the problem ofthe admission of the lower strata, particularly the workers, to 'citizenship, ' the establishment of the access to power through universal suffrage, and the legitimate right to bargain collectively in the economic sphere. The third has been the continual struggle over the distribution ofthe national income. " Seymour Martin Lipset Some Social Requisites ofDemocracy 63

What produced liberalism was the emergence of a new economic society at the end of the Middle Ages. As a doctrine it was shaped by the needs of that new society; and, like all social philosophies, it could not transcend the medium in which it was born. Harold J. Laski The Rise ofLiberalism 64

The International Ideological Context

While the monarchies in most continental European countries spent the 1ih century consolidating their power under autocratic systems, England's monarchy, unsuccessful in its own bid to maintain a position of unquestioned authority, closed the period by striking an agreement to share power through a relations of ruling that

included propertied classes via Parliament through what is now known as the

"Glorious" Revolution of 1688. As the dust of the Glorious Revolution settled, liberal

63 Seymour Martin Lipset. "Some Social Requisites of Democracy: Economic Development and Political Legitimacy." The American Political Science Review 53, 92.

64Harold Laski. The Rise of Liberalism: The Philosophy of a Business Civilization. (New York: Harper and Brothers Publishers, 1936), 8.

63 64

capitalism established itself as the dominant ideology that would come to guide much of western thinking about social organization for subsequent generations.

A parallel process underway between the 15th and 1gth centuries had helped set the stage for capitalist production by concentrating economic resources into the hands of the English landed gentry class. Two dynamics facilitated this process. On one hand, Rome's diminished influence in England (especially after Henry VIII's break with the Catholic Church) permitted the dissolution of monastery landholdings, the

reduction of church taxes and the redistribution of church properties, rearranging the

distribution of economic power and encouraging the growth of the secular state. The

Enclosure Movement initiated during the same time period privatized access to

between six and seven million acres of land, thereby increasing the number of flexible

laborers as agricultural workers were forced off the land by new political rules that

conveniently ignored the local actualities found in the countryside.64

Two-thirds of that total was not waste, as writers like Locke implied, but land which was already cultivated and used under the old open-field system. Legislation was needed for enclosure because landowners were usually unable to get villagers to agree 65 voluntarily to the loss of their traditional common lands.

The importance of enclosures in creating a proletarian class with no means of

survival other than by the sale of labor should not be underestimated, as access to land

became increasingly restricted and workers were forced to look for work in the non-

agrarian sector. Moore also notes that extra local, textually mediated justifications for

64G.E. Aylmer. The Struggle for the Constitution: England in the Seventeenth Century. (New York: Humanities Press, 1964), 39-40.

65 Anthony Arb laster. The Rise and Decline of Western Liberalism. (Oxford: B. Blackwell, 1984), 171. 65

enclosures, based on economic freedom and individualism, provided fertile ground for the development of capitalist economic theory a few centuries later. 66 Enclosures

continued up into the 18th century, forcing poor peasants to abandon small plots of

land and throwing squatters off of common lands where they lived. 67 The emerging

capitalists eagerly beckoned this nascent proletarian class to work into their factories

and workshops -- for subsistence wages, of course. As could be expected, this major

change in land ownership patterns spilled into other arenas as well. For example,

Foucault observes that the demise of feudalism freed landowners of their previous

culturally-prescribed social obligations towards the landless, while elevating the value

of property, for which access rights became "absolute." Any prior customary access to land by peasants was now interpreted as theft under capitalist relations of ruling, thus making necessary the development of strict rule of law and punishment for

"illegal" acts and crimes against property in local actuality. 68

Later, in the mid-18th century, Adam Smith's observations about capitalism

served to support the division of labor that was unfolding and further justify the

splitting of economic gain into subsistence wages for workers and the rest for

capitalist property owners, In 1776 Smith published his two-volumed set, An Inquiry

into the Nature and Causes of the Wealth of Nations, that is considered a primer for

66Barrington Moore. Social Origins ofDictatorship and Democracy. (Boston: Beacon Press, 1993), 8-9.

67Michel Beaud. A History of Capitalism, 1500-1980. (New York: Monthly Review Press, 1983), 64.

68Michel Foucault. Discipline & Punish: The Birth of the Prison. (New York: Vintage Press, 1995), 85. 66

understanding classical liberalist thinking even today. For Smith, the advantages of creating a division of labor was an overall increase in productivity, the benefits of

1 which (in the words of 20 h century theorists) would "trickle down" to the masses through a "universal opulence that extends itself to the lowest ranks of the people."69

While Smith argues that the worker must be paid sufficient wages to maintain himself and his family, "otherwise it would be impossible for him to bring up a family, and the race of such workingmen could not last beyond the first generation,"70 he also considered it natural, or at least inevitable, that wages be repressed to the absolute minimum that the worker would bear. 71

John Locke, often recognized as the greatest Whig intellectual, summarized the normative underpinnings of liberal ideology in this way: "men [are] naturally equal, in the sense that none had special rights of jurisdiction over others; and all had rights of life, liberty, and property, which the state existed solely to protect."72 While this vision articulates the principal of individual freedom, and, by extension, may be interpreted as advocating for democratic processes, it must be stressed that early

Whigs (and the more conservative Tories) and, in the practice of liberalism, were clear that only a select minority was considered fit to participate in political life in England.

Indeed, Locke clearly believed that citizenship and the right to engage in political

69 Adam Smith. "The Wealth of Nations." Social and Political Theory: Classical Readings. Michael S. Kimmel and Charles Stephen, editors. (Needham Heights, MA: Allyn & Bacon, 1998), 56.

70Adam Smith, 63-64.

71 Adam Smith, 63.

72George Herbert Guttridge. English Whiggism and the American Revolution~ (Berkeley, California: University of California Press, 1942), 5. 67

discourse should be reserved to those (men) who, by their stations in life had demonstrated competence, to include the nobility, clergy, and merchant classes.73

Thus we see the conscious establishment of bifurcated boundaries between the intellectual work of elites to create the rules of relations and the physical work of non- elites who lived and worked in the everyday world. Working class men were not the only adults barred from access to political and economic power in the post-1688 world. Women were also deliberately excluded from engaging in public discourse about the rules of relations. Gerda Lerner writes:

Locke did not ignore women in his theoretical model, but he separated them out of the social contract by asserting that woman's subordination to man within the family was natural and antedated organized society. Thus men had paternal power over women, but this 'natural right' had, according to Locke, nothing to do with civil society - the problem of woman's status as a citizen simply dropped out of sight. Still, contract and natural rights theory provided theoretical weapons for all subordinate groups.74

As colonial empires and territorial expansion became a priority for European countries competing for dominance in the capitalist world system, the Anglo-Saxon mystique that originally helped create a post-Reformation English identity acquired a new purpose. During England's period of colonial expansion in the 18th century,75

"arguments about the inferiority of other 'races' assumed an importance as great as or even greater than [16th and 17th century] arguments about the excellence of Anglo-

73 Beaud, 34.

74Gerda Lerner. The Creation of Feminist Consciousness from the Middle Ages to the Eighteenth Century. (New York: Oxford University Press, 1993), 211.

75Keith Hutchinson. The Decline and Fall of British Capitalism. (New York: Charles Scribner's Sons, 1950), 12. Hutchinson indicates that, between 1871 and 1899, approximately 2,854,000 square miles were added to the British Empire, primarily by partitioning parts of Africa. 68

Saxons."76 The influence of the ambitions of economic liberalism coupled with a sense of ethnic superiority provides insight into the logic of early colonial expansion who justified their usurpation of territories with arguments based on rightful domination of Europeans over indigenous peoples.

Looking more towards the end of the 19th century, Gerlach comments that

Anglo-Saxonism had become an "expanding force," as evidenced both by British dominance and the rising influence of its hegemonic heir apparent, the United States.77

In this way the mythology invented to entrench classical liberalism at home also served to justify advancing exclusive liberal structures abroad through territorial conquest and domination of other races. In this way liberalism was exported to "the

New World" as both an ideology that extolled the virtues of white culture (that created the "white man's burden") and promoted commerce based on private property (and property-protecting rule of law), alongside more tangible products. What developed, then, was a social stratification dictated by the terms of a liberalism created by and for the white, male property owner whose relations of ruling, by definition, relegated everyone else to a subordinate role, purportedly more suited to their innate nature - at least according to male, Anglo Saxon reasoning. In sum, the agreement hammered out between the monarchy and property owners in 1688, while clothed in language of liberty, was consciously constructed to benefit a specific population -- the Anglo

Saxon, property-owning man -- while marginalizing everyone else, ranging from

76Reginald Horsman. Origins of Racial Anglo-Saxonism in Great Britain before 1850. Journal ofthe Hstory ofIdeas. Volume 37, no. 3, 395.

77Murney Gerlach. British Liberalism and the United States: Political and Social Thought in the Late Victorian Age. (Great Britain: Antony Rowe, Ltd, 2001 ), 131. 69

working class men to women to racial minorities to anyone else who did not or could not own sufficient property or meet other minimal requirements necessary for enfranchisement.

This disconnect between theoretical and practiced liberalism has been the subject of endless debate and the source of ongoing conflict since the liberal paradigm was first set in motion centuries ago. Indeed, one might speculate that this contradiction became the inspiration for much of ongoing sociological analysis itself, as marginalized groups and their advocates questioned the validity of a relations of ruling that, in the real world, gave advantage to the Anglo Saxon property owner over all others. To be sure, once liberalism was let out of the pandoran box in England, the restlessness of rational thinking about the organization of society was not sated by the unleashing of economic liberalism - capitalism - on the western world. But it was the

French who took modernity under liberalism to its next logical step with the cries of

"liberty, equality, and fraternity" and the demand for an expansion of the relations of ruling to include working class men by granting them suffrage. Beaud offers us this comparison

In England where [the bourgeoisie class] was involved with affairs of the state, the freedom in question was above all economic freedom to pay for labor power at the lowest. In France, where the working class was excluded from affairs of the state, the freedom which was called for was above all political freedom; the suppression of privileges, a constitution, equality.78

In response, alarmed Whigs such as Edmund Burke responded with a counter- revolutionary critique, drawing an ideological line that clearly defined where "true"

78Michel Beaud. A History ofCapitalism, 1500-1980. (New York: St. Martin's Press, 1987), 73. 70

liberalism ended, at least in England, which did not include sharing political power with working class men (as well as other disenfranchised groups, for that matter).

Thomas Paine, author of The Rights of Man,79 was the most influential proponent of egalitarian ideas in England during this time period. His reward was exile, first to

France and then to the American colonies, where his writings had inspired the

American revolutionaries in their quest for independence from England. In tum,

Burke, a vociferous supporter of the American Revolution (along with Paine) became an equally vociferous critic of the French Revolution and the Jacobins, lest French ideas spread and destabilize classical liberalism as England's defining ideology.

As protector of economic liberalism from the encroachment of political liberalism, "Burke counterposed a scrubbed version of English constitutional prudence that became the intellectual foundation of the English counterrevolution and ultimately of modem British conservatism."80 In this way economic liberal ideology, hardened into its classical liberal shape by the English, took it upon itself to disparage notions that liberty is associated with political freedom, to argue that freedom, instead, is limited to economic freedom. In contrast, the French had upped the ante through its call for equality among men, creating an impulse towards political liberalism that

79The Rights of Man was written in response to Edmund Burke's Reflections on the Revolution in France. In Reflections Burke argued that the French Revolution would fail because it was based on "rationalist" thinking and did not draw upon the wisdom of tradition and culture. In the Rights of Man Paine argues that all men were born with natural rights that cannot be given or revoked by anyone, and that the responsibility of the State is to protect those rights.

80Iain McCalman. "Popular Constitutionalism and Revolution in England and Ireland." Revolution and the Meanings of Freedom in the Nineteenth Century. Isser Woloch, editor. (Stanford, CA: Stanford University Press, 1996), 138. 71

captured the minds of a growing number of restless and ambitious men seeking to throw of prescribed social roles and step into self-actualization, whose public discourse set in motion a progression of logic of greater inclusivity that eventually gave birth to modem day populism in its various manifestations. Figure 7 below illustrates this concept.

Figure 7: Economic Liberalism versus Political Liberalism

Traditionalism - advocated for Liberalism - advocated for economic hierarchical relationships with authority liberalism to allow property owners to resting in the hands of the State, justified benefit from the gains of by religious or mystical doctrine and economic activity while distrust in the inherent weakness of the justifying subsistence human condition. wages for the burgeoning working class.

Jacobin Socialism - Advocated for political liberalism in the form of universal male suffrage, popular education and the separation of Church and State.

I

While English-inspired liberalism advocated for economic liberalism and free capitalism, French-inspired liberalism advocated for political liberalism and provided inspiration for populist arguments for State intervention in the economy to redistribute resources toward the propertyless. French liberalism, the seedbed for populist aspirations, has been vilified across the centuries by traditional conservatives and classical liberals alike, up to the current century as a dangerous ideology that would destroy the basic tenets of western civilization. 72

Soon afterwards, the American colonies followed the French example by first declaring and then fighting for independence from England in a struggle for men to be recognized as "citizens" not "subjects." By the time the United States was fully birthed, constitutions (textually mediated discourse, using Smith's language) had become the accepted means of clarifying the rights given and to whom, while defining limitations on power in the modem world.81 Inspired by Rousseau's social contract, a constitution can be thought of as a providing a "master frame" for relations of ruling, guiding the formulation of rule of law, while defining the fundamental rights to be enjoyed by citizens thereby creating an infrastructure governing everyday life.

Because citizenship is a right limited to specific, defined groups, the constitution also structures access to political power, thus influencing the creation of social hierarchy and predicts patterns regarding distribution of economic power.82 Once ratified, it becomes crucial that the constitution is difficult to change, curbing the chance that fleeting whims will yield weighty influence over the relations of ruling that govern everyday life. In this way a constitution provides referential boundary structuring social order, exercising power over individuals by the social structure it both envisions and creates. In addition to providing a basis for governing by political rulemaking, the

Constitution also authorizes the use of coercive force (usually by the military or police, but in exceptional times by "the people") to intervene, especially when the

81Ejan MacKaay. "The Emergence of Constitutional Rights." Constitutional Political Economy 8 (1977), 15. MacKaay argues that rights provided in the constitution are a legal expression of "the idea of human rights" as it has evolved in the western world. In tum, the process of defining inalienable human rights puts limitations on government authority.

82 It is important to note that, until the mid-20th century the privilege of citizenship was fairly restricted in most countries: many groups, such as women, illiterates, the propertyless, and ethnic and religious minorities were deliberately denied citizenship and the privileges afforded by that status. 73

national or local community is in cns1s. Gargarella identifies three basic social models in constitutions that reflect the ideological split that dominated western culture up to the early 20th century (and reveals Gargella's own preference for liberalism).

Conservative models are those characterized by their defense of political elitism and moral perfectionism; majoritarian, or radical, models are those constitutions anchored in political majoritarianism and an implicit defense of moral populism; while individualist, or liberal, constitutions emphasize the limitation of powers and moral neutrality. 83

In theory, diverse representatives of society participate in designing the constitution so that it reflects community members' self interests. Once finalized, the constitution then undergoes a ratification process, through which all citizens, again in theory, vote to express their approval (or disapproval) of the social contract expressed in the constitution. But, as we might imagine, constitution-making in the real world often does not follow prescriptions of the theoretical world, and, similar to politico- economic processes in the post-constitution era, are invariably structured to benefit ideologically-favored groups.

Early Years in the Republic of Chile

With an arid desert on its northern frontier - successive ranges of mountains, whose summits are covered by everlasting snows, on the east; Cape Horn, with its appalling storms of ice and sleet, to the south; and the vast unexplored Pacific ocean washing its western shores - the holy fathers, who accompanied Pedro de Valdivia to the Chilean territory in 1540, many will have regarded themselves at "la fin de la Christiandad". No terrestrial obstacles, however, were of sufficient magnitude to overcome the thirst for gold and conquest which enticed so many sons of Spain from their homes during the sixteenth century; and the desert of Atacama, with scarcely a drop of water or a particle of sustenance for man or beast in many hundred miles, was traversed by a han4fu/ ofSpaniards, with afew Peruvian a/lies .... Lieutenant James Gil/is84

83Roberto Gargarella. "Towards a Typology of Latin American Constitutionalism Latin American Research Review 39:2 (2004), 142. What is missing here is a distinction made in this paper between revolutionary populism and pluralist populism.

84Lieutenant James M. Gillis. Astronomical Expedition: Chili 1849-52. (Washington: A.0.P Nicholson, printer, 1855), 1. "La fin de la Christiandad" translates as "the end of Christianity." 74

Every Constitution that is born of a real historical requirement, and whose content is able to correctly interpret the idiosyncrasies and the yearnings of the people called to live under it, contains an integral historical project. Overcoming much with a simple set of legal norms or political institutions, it represents the will to channel a determined mode of political, economic and social coexistence, expressing the deepest moral values that give meaning andform to a particular national community. Jaime Guzman85

Prior to the arrival of the Spaniards via Peru in the mid-1 SOOs, the territory we now called Chile was inhabited by diverse indigenous peoples. Northern tribes lived under the sphere of influence of the Incan Empire found even further north in present- day Peru. Central and Southern Chile was inhabited by the independent Mapuche indigenous groups, who, prior to the arrival of the Spaniards, had successfully resisted incorporation into the Incan Empire.86 Explorations began in 1536, and the first

Spanish colony, Santiago, was founded in 1540 by Pedro de Valdivia, who had been granted a license by Pizarro to conquer and colonize the territory for the glory of

Spain. Valdivia soon began apportioning land to fellow Spaniards, even before the

indigenous inhabitants had been either subdued or exterminated, 87 initiating a system of economic exclusion through large estates that was known as mayorazgo. 88 In this

way, Valdivia introduced very early into the colony a hierarchical system of rules of

85Jaime Guzman. "El Sentido de la Transici6n" Separata de la Revista Realidad. Available at La Fundaci6n Jaime Guzman, Santiago, Chile, 5-6

86L. C. Faron. Mapuche Social Structure: Institutional Reintegration in a Patrilineal Society of Central Chile. (Urbana: University of Illinois Press, 1961), 201. Faron suggests that the Mapuches may have been successful in resisting domination first by the lncans and later by the Spanish because they were organized in small, independent communities, without a strong central state.

87 Valdivia himself was captured and killed by the Mapuches in 1553.

88 Mayorazgo was a system that required that a landowner would hand down his entire estate, intact, to his eldest son, assuring that the ownership of land would remain concentrated in the hands of a small minority of male-dominated Chilean-born elites. 75

relations based on race, sex and property, whose apex was found m a Spanish monarchy that insisted it ruled by divine right. 89

Disappointing to the Spaniards, explorations in this southern outpost yielded none of the gold or silver that had been found in Peru and colonizers turned to agriculture, often farming the fertile land themselves, given both their inability to transform the native population into a subservient labor force and the relatively small number of black slaves that had been imported. 90 While of nominal value to Spain (it was a drain on the treasury, as it was one of the few territories that required a regular garrison to fend off indigenous attacks), Chile was retained as a possession under the viceroy of Peru, first as an isolated province and then as a captaincy-general.91 In this way, Chile entered the 19th century as a territory of lesser importance to the Spanish

Crown, whose population consisted of a small dominant class of European descent

(physically cut off from their peers by the Andean cordillera to the west and the

Atacama desert to the north) who claimed ownership of most of the productive land

and a larger indigenous population (residing primarily in the southern regions) that resisted rule by this creole class and their European ways. 92

89Richard J. Walter. "Revolution, Independence, and Liberty in Latin America." Isser Woloch, editor. Revolution and the Meanings of Freedom in the Nineteenth Century. (Stanford, CA: Stanford University Press, 1996), 106.

9° Copper was not considered to be an especially valuable mineral in the colonial period.

91 John Edwin Fagg. Latin America: A General History. (Toronto, Canada: The Macmillan Company, 1969), 126-129 and 263-266

92"Creoles" are Chilean-born, but of European heritage. 76

At the dawn of the 19th century Spanish power was on the wane, inspiring revolutionary hopefuls across Latin America who, full of Enlightenment ideas, thomistic notions of Vax populi, vox Dei93 and revolutionary inspiration from France and the United State of America, looked for an opportunity to take fate into their own hands. 94 For Chilean creoles, that opportunity presented itself in 1810, two years after the revolutionary French army invaded Spain and put Napoleon's brother Joseph on the throne in the face of open opposition from Spanish subjects.95

On September 18, 1810 Chilean creoles seized power from the local Spanish officials. The leader that emerged for this group was Bernardo O'Higgins, a Chilean- born son of an Irishman, regarded as the father of Chile's independence. As could be expected, Spain (now rid of the French) did not respond favorably to the independence movement and dispatched troops to the area to defend its interests. These troops defeated O'Higgins in battle in 1814 and the territory was restored to Spanish authority, only to be lost again in 1818 as Spanish forces were defeated in Santiago by

Jose de San Martin, who then proceeded to march north to secure Peru's independence

93 Richard Herr. "The Constitution of 1812 and the Spanish Road to Parliamentary Monarchy" Revolution and the Meanings of Freedom in the Nineteenth Century. Isser Woloch, editor. (Stanford, CA: Stanford University Press, 1996), 78. Herr credits the 16th century Spanish theologian Francisco Suarez for developing a Catholic-based political theory that argues that political power is only legitimate when it rests upon popular consent.

94Walter (pp. 103, 105 and 107) sees the French Revolution as particularly inspirational to Latin American revolutionaries, to the point that he argues that "it is doubtful that the Latin American revolutions would have occurred when and how they did without those events."

95Isser Woloch, editor. Revolution and the Meanings of Freedom in the Nineteenth Century. (Stanford, CA: Stanford University Press, 1996), 15. 77

as well.96 Meanwhile Bernardo O'Higgins declared Chile to be an independent country and established himself as its Supreme Dictator, ruling until Chile's creole class ousted him from power some five years later.

After finally securing undisputed independence from Spain in 1818, Chile's years as a fledgling republic were characterized by turbulent political struggles between powerful families under four constitutions in its first fifteen years.97 While

Walter argues that, influenced by the Enlightenment, Latin American creole elites generally favored creating constitutional republics, this did not translate into a call for a relations of ruling characterized by either democracy or majority rule. 98 Given the specter of revolutionary France (and the presence of a large indigenous and landless populations), this distrust of the majority led to the writing of "conservative- authoritarian" constitutions used to "secure political stability and the respect of certain predefined values" across the continent; Chile's first constitution, written in 1823, is cited as a good example of this type of social contract.99

Political stability was not achieved in Chile until Diego Portales introduced what resembled a hybrid authoritarian-liberal constitution in 1833 that created a state

96Thomas Alexander Cochrane was brought from England to Chile in 1818 by O'Higgins to reorganize and command Chile's navy. Cochrane's leadership led to the capture of Valdivia, Spain's most important base in Chile. O'Higgins later ordered Cochrane to lead the Chilean navy in support San Martin's efforts to secure Peru's independence as well, which O'Higgins considered as a strategic necessity to protect Chile's own independence.

97 September 10, 1810 is celebrated as Chile's independence day although Chileans did not formally declare their independence from Spain until 1818.

98 Walter, 126

99 Gargarella, 149-150 This is contrasted with the "populist" constitution, whose purpose was to 'foster self-government and strengthen the majority will' 78

"capable of turning back all challenges to its authority but which relied for the most part upon impersonal legal means rather than brute force and on the close support of

social and institutional vested interests."100 One important intellectual influence during Chile's early years was the famous Venezuelan born humanist Andres Bello who moved to Chile in early 1829, after having spent eighteen years living in London where he had been employed by James Mill and Jeremy Bentham and thus associated with many prominent members of England's Whig Party, which "allowed Bello to

observe up close the Whigs' attempt to preserve the role of aristocracy as a counterweight to democracy and mediocrity." 101

Soon after his arrival in Santiago Bello received several high level

appointments in the Chilean government. He became a Chilean citizen in 1832; in

1837 he was elected to the Senate, and in 1842 he founded the prestigious University

of Chile. While not the author of the 1833 constitution, Bello was involved in

reviewing and editing Portales' constitution, thereby inserting his influence in the final

version. His most lasting influence on his adopted country's relations of ruling came

through his work to draft Chile's Civil Code, which became law in 1857.

Predictably, Chilean society was highly stratified during this early period,

characterized by a dominant, creole, landed oligarchy, known as La Fronda

100David Busnell and Neill Macaulay. The Emergence of Latin America in the Nineteenth Century. (New York: Oxford University Press, 1994), 111. See also Gerald Fitzgerald. The Constitutions of Latin America. (Chicago: Henry Tegnery Company, 1968), 1 and Albert P. Blaustein and Gisbert H. Flanz. Constitutions of the Countries of the World: Chile. (Dobbs Ferry, NY: Ocean Publications, Inc., 1989), v.

101 Karen Racine. "Nature and Mother: Foreign Residence and the Evolution of Andres Bello's American Identity, London, 1810-1829." in Ingrid E. Fey and Karen Racine, Strange Pilgrimages: Exile, Travel, and National Identity in Latin America, 1800-1990, (Wilmington, DE: Scholarly Resources, Inc., 2000), 4. 79

Aristocratica, that owned up to 80% of the arable land and a rural creole and

indigenous working class composed of both inquilinos (land tenants), who enjoyed

certain protection from their patrones, and landless, transient day laborers known as

los rotos (the broken ones) who lived on the margins, as a source of flexible labor that

sought temporary or seasonal work wherever it could be found, often in the

agricultural or mining sectors. 102 Portales united the country under a regime

characterized by the free market economic policies of economic liberalism and

ushered in a period of export-led economic growth, a natural fit given the country's

lengthy Pacific coastline. 103 Primary export products included copper, silver and

wheat, and important trading partners including England (with colonies in India and

Asia), California and neighboring Latin American republics, which yielded a growing

economy in the 19th century. 104

The Conservative Party, the first party to emerge after independence,

represented the interests of landed elites in alliance with the Catholic Church. Its

rival, the Liberal Party, advocated for less involvement of the Church in politics, while

espousing an ideology of free trade similar to English Whigs. From the Portales'

consolidation onward, party politics in Chile evolved into an ongoing contest between

the Conservatives, identified with the Church and agriculture, and the Liberals, who

appealed more to anti-clerical and urban groups. Later on, the Radicals split from the

102 Bushnell and Macauley, 108.

103Frederick B. Pike. Chile and the United States, 1880-1962: The emergence of Chile's Social Crisis and the Challenge to United States Diplomacy. (Notre Dame, IN: University of Notre Dame Press, 1963), 2 and Bushnell and Macauley, 42.

104 Bushnell and Macauley, 108-109 and 115. 80

Figure 8: Early Years in the Republic of Chile

1833 Constitution

Conservative Liberal Party Party

··-·-·-·-·-·-·-·-·-·-·-· • O'Higgins : Authoritarianism ··-·-·-·-·-·-·-·-·-·-·-·

v

Political structures in early 19th century Chile resonated European ideas about political economy. An authoritarian-liberal constitution restricted suffrage to a small group of property-owning creole men while protecting basic tenets of economic liberalism, such as private property rights. Political contests were conducted between two rival groups, the Conservatives who espoused a traditional-authoritarian ideology and the Liberals, whose views were similar to those of English liberal Whigs, with pressure for political liberalism from the Radical Party, which was influenced by ideas of the French Enlightenment.

Liberals, espousmg decidedly anticlerical sentiments, promoting secular education and (like their French counterparts) advocating free thought, positivism, and humanism. The Radical Party voiced demands for change that resonated with Chile's 81

nascent middle class and their aspirations for greater cultural liberalism. The Radicals also sought to organize labor unions and strikes to pressure the State to provide expanded services for the working classes who lived their daily lives in relative deprivation. (Figure 8).

Given upper class distrust of lower class ambitions, suffrage under the 1833

Constitution was limited to creole, male property owners, over 25 years old (if single), or 21 (if married), who, by 1840, were literate and who possessed a specified minimum of wealth, whether by real estate or income from trade. 105 In this sense, like in England, citizenship was a privilege tightly held by the male members of prominent families, mirroring the economy where land ownership was also reserved for a minority. 106 This narrow definition of citizenship was not broadened until 1888, when in the midst of a second series of reforms to the Constitution, property and income requirements were eliminated, and the minimum voting age was established at 21 years. 107

While Samuel Valenzuela challenges the generally accepted argument that the political participation under the 1833 Constitution was strictly limited to male Chilean elites, he also acknowledges that the lower and middle class men (and women) who did participate in electoral processes on an irregular basis, did so under the watchful

105Gillis, 129. Busnell and Macauley note that an estimated 75% of the population was illiterate as late as 1875. (p. 116)

106 The controversial mayorazgo system was not prohibited until 1852 (Busnell and Macauley, 236)

107 Blaustein and Flanz, vii Notably, this change occurred around the same time as the advent of"mass democracy" in England, and that country's Third Reform of 1884 82

eyes of government officials through a very flawed process. Indeed the electoral process in the early republic was rife with fraud that favored government-backed candidates on "official lists" which "simply magnified the distortion already contained in the voter registration process."108 In short, electoral outcomes were tightly controlled by the government, regardless who was casting ballots, yielding outcomes most favorable to those already in power, thus reinforcing the exclusive nature of the early republic's relations of ruling, even when seemingly democratic processes broke through.

As we can see, early political economy in Chile imitated the models of constitutional republics set up in Europe and the United States. At the same time, early Chilean elites were challenged to construct a stable republic which protected economic liberalism in an era in which egalitarian ideas flowed freely in public discourse, while the inegalitaran truth lived in local actuality was one of a small group of elite men who wielded power over women, a impoverished, landless creole workers and a nation of Mapuches who had not yet passively submitted themselves to a

European-inspired relations of rule that the "foreigners" sought to impose upon them.

Their solution was to create rule of law under a relations of ruling that ceded all authority to a small, tight-knit circle of elites, whose interests were protected by a

State that was committed to turning back all challenges to its authority.

Cultural norms were also subject to vetting, needing to pass the litmus test of congruency with Catholicism, given its dominance in the country as the officially-

108 J. Samuel Valenzuela. "Building Aspects of Democracy Before Democracy: Electoral Practices in Nineteenth Century Chile." Working Paper #223, (April 1996) 27. 83

recognized state religion. In this way, in public discourse, Chile introduced itself to western, Christian society as a constitutional republic with democratic processes. At the same time, on the local actuality of lived experience, its distribution of economic power was narrow, which was perpetuated by a similarly narrow distribution of political power and an officially-sanctioned Church whose work to interpret lived experience in accordance with religious teachings helped to establish a cultural framework that justified the daily reality of Chile's political economy in terms of

Divine Will. CHAPTERS

LIBERALISM IN AN AGE OF RISING POPULISM

[Neoliberal] thinking is rooted in the economic liberalism of the nineteenth century, which was closely linked to the political liberalism of the times. Jn the political sphere the emphasis was on democracy, individual dignity and freedom (liberty), constitutionalism and republicanism, civil liberties, and limited government. Jn the economic area the stress was on individual initiative, free enterprise, free trade, and opposition to state intervention in the economy (laissez-faire). G. Pope Atkins Latin America in the International Political System 110

It is not until we have a general democratization that the rise of the lower strata allows their thinking to acquire public significance. This process of democratization first makes it possible for the ways ofthinking of the lower strata, which formerly had no public validity, to acquire validity and prestige. When the stage of democratization has been reached, the techniques of thinking and the ideas of the lower strata are for the first time in a position to confront the ideas of the dominant strata on the same level of validity. And now, too, for the first time, these ideas and modes of thought are capable of impelling the person who thinks within their framework to subject the objects ofhis world to a fundamental questioning. Karl Mannheim I deologyJJJ

The International Ideological Context

The 1830s provides a baseline marker for the subsequent broader distribution of political power in England, as well as pockets of inconsistent applications of ideological control that, like in Chile, allowed lower class men (and women) to vote on local levels under specific circumstances. Chartism appeared as a working class movement in the 1830s proposing a broader distribution of political power regarding national issues that would, inevitably, result in broader distribution of economic

uoG. Pope Atkins. Latin America in the International Political System. (Boulder, CO: Westview Press, 1995), 348

IllKarl Manheim. Ideology, 8. 84 85

power. In a power play that could be likened to hedging their bets (and reducing the prospects of majoritarian democracy), Whigs responded to growing pressures by pushing through the Reform Act of 1832 that invited middle class males into discourse about the relations of ruling by lowering the property requirement for voting rights, but leaving unpropertied working class men unfranchised. 111 While the wealth of the propertied classes increased in the 19th century, the misery of the lower class was poignantly captured in the writings of Charles Dickens, whose novels humanized the poor and shocked readers with their images of intractable poverty, endemic violence and desperate crime. By this time the growth of literacy and print media as well as the use of the telegraph and the expansion of the railway in the decades that followed created the potential for public debate about social issues (outside of private drawing rooms and closed-door meetings) as well as increased experimentation with textually mediated discourse, changing both the political experience and common ideas about how politics should operate. 112 In the meantime, workers organized themselves into trade unions (to negotiate better terms of employment), mutual insurance companies

(to guard against disaster), work exchanges (to provide continued employment) and political parties (to demand political change). 113

These stirrings of lower class ambitions to reclaim a status as subjects (not objects) of history were soon to receive a boost from a German who immigrated to

England and whose writings have wielded incalculable influence on western thinking.

111 Barry, 33.

112James Vernon. Politics and the People: A Study in English Political Culture, c. 1815-1867. (New York: Cambridge University Press, 1993), 133.

113 Beaud, p.p. 128-129 and Hutchinson, 40. 86

Up until the mid-19th century liberalism had unfolded as an ideology in constant debate with the traditionalism of pre-modem conservatives, most often landed

aristocrats and church authorities, while trying its best to ignore or repress movements toward inclusion of lower classes. But an ideological sea change occurred in 1848

once Karl Marx and Friedrich Engels published their Communist Manifesto calling for

class struggle and the tearing down of the capitalist system, rattling liberalism to its

private property bones. The following year Marx joined Engels in London, where he

conceived the labor theory of value and wrote Capital, which has influenced the

intellectual development of all subsequent generations who question both the theoretical premises and real world outcomes of economic liberalism. In the

meantime, common Frenchmen achieved something that same year that had eluded their English cousins. Crossing the liberal ideological line drawn by Burke, the

French staged a new revolution that overthrew Louise-Phillipe and his merchant class

supporters to establish the Second Republic -- and universal male suffrage. 114

Given the unsettling specter of either majoritarian democracy or atheistic communism

spreading across Europe, Wallerstein argues that pre-modem conservatives and

Whiggish liberals stopped bickering amongst themselves to join forces in battle

against the ideals of populism in order to preserve a liberal order grounded upon the

precepts of elitism, traditionalism and private property (see Figure 9), similar to what

was already established in Chile under the rubric of its Constitution of 1833. 115 In

114John M. Merriman. "Contested Freedoms in the French Revolutions, 1830 - 1871." Revolution and the Meanings ofFreedom in the Nineteenth Century." Isser Woloch, editor. (Stanford, CA: Stanford University Press, 1996), 174.

115 Wallerstein, 87. 87

their marriage of convenience, pre-modem conservatives and modernizing liberals

forged a hybrid paradigm that, while theoretically promoting the vision of natural rights and freedom, in practice continued to rest upon hierarchy based on private property and social stratification that assumed male Anglo Saxon superiority, whose

inevitable inegalitarian outcomes were justified by traditional cultural norms - and were cemented in place by restrictive political practices.

Broadened definitions of citizenship worked together with the advent of mass

communication and transportation to construct a political culture characterized by

public meetings and parties - and the need for political organizing. Vernon observes that each increase in the voting population was surrounded by organizing in order to

assure to "discipline" and "regulation" in the loyalties and behavior of new voters. 116

In the meantime, literacy became a national priority: school attendance became

compulsory in 1876, although primary education was not free until 1891, revealing

upper classes reservations regarding the effect that mass education would have on the

lower classes.

On the one hand, it was becoming increasingly evident that illiteracy was a handicap to a complex industrial society. On the other hand, it was widely feared that education would make the lower classes 'uppish' and discontented and put dangerous ideas in their heads.... One way of solving the dilemma was to confine State education as far as possible to the dissemination of the three R's. 117

Thus, along with the previously-discussed relative inflexibility of labor and

land vis-a-vis financial capital we see a second fundamental contradiction between

theoretical and real-world classical liberalism. On one hand, liberal culture urges

116 Beaud, 182.

117 Hutchinson, 58. 88

individuals to pursue self-actualization and seek their own destiny (thus implicitly blaming those who do not accept or meet this challenge). On the other hand, the upper

Figure 9: Traditional Conservatism and Classical Liberals United Against Populism

Traditional-Liberal Alliance based on theoretical egalitarianism, while resting upon a hierarchy created by private property and social stratification that assumes male, Anglo Saxon superiority.

Populism - advocated for universal (male) suffrage, education and redistribution of economic resources to working classes.

As populist ideology gained momentum, traditional conservatives and traditional liberals joined forces to preserve a social structure that favored the property­ owning classes, which they regarded as the classes of higher culture and natural privilege. classes were keenly aware that awakening this yearning for independence and empowering members of the lower classes to act out of self-actualized interest would 89

upset the delicate balance of power that gave greater weight to the minority elite, both politically and economically. In addition, while liberal culture often holds up education as the great equalizer, we see that, early on, liberals of the classical sort preferred to use education as a means of increasing the value and capacity of labor inputs in the production process, while, at the same time, desiring to restrict the impact of that education through curriculum design and teaching methodology so as to limit the ability of these laborers to think - and act - as independent men and women. In this way we should keep in mind that education can be a tool used to repress self- actualization just as much as it can be a tool used to encourage self-actualization.

In 1892 Charles Booth published a painstaking study demonstrating to the

literate public that approximately one-third of the English population lived in poverty. 118 Booth's detailed, sympathetic portrayal of the English poor helped to

humanize the working poor in the minds of elites and stimulate both a generalized

sense of social responsibility and an increased attraction to socialism as a means of

alleviation the harshness of poverty experienced by the English working classes. 119

Although socialist policy prescriptions in the 19th century were unfocussed, dialogue

about the appropriate role for the State had begun.

Toward the end of the century, two pressures combined to enlarge the economic and social role of the State. On the one side were the enfranchised masses, slow to understand and endorse the full program of the socialists, but demanding from their representatives in Parliament definite reforms - protection against the hazards of industry, better housing, free elementary education, land allotments, space for recreation, more security of employment and income. Reinforcing these demands was the growth of social conscience among the upper classes, leading to investigation

118 Hutchinson, 52.

119 Hutchinson, 12. 90

of, and publicity for, conditions in working-class areas which had for long been terra incognita. 120

As working class men were slowly granted citizenship they were also invited to join mass political movements that helped shape their thinking about political and national identity. 121 Beaud observes that politics were also "regendered" at the dawn of mass politics; female participation was encouraged, if limited to "family issues" or

in support of a significant male relative. Women would have to wait until the ravages

of World War I opened breaches in the rules of relations that would culminate in their right to participate in public discourse, and most importantly, to vote. 122

Just as World War I was ending, the Russian Revolution exploded in 1917,

sending reverberations across the political landscape by providing a graphic example

of where unresolved social conflict in the everyday world could lead western

civilization via revolutionary populism. In the world of ideas the Russian Revolution

also forged an undisputable split between Communists who, inspired by Lenin,

advocated for the revolutionary overthrow of capitalism, and social democrats who

sought a peaceful restructuring of the economy to redistribute wealth towards the

working classes. Prior to the Bolshevik revolution, Boswell and Chase-Dunn

maintain that the words "socialism" and "social democracy" were interchangeable,

120Hutchinson, 51; see page 12 as well. Although Hutchinson also notes (p. 68) that attempts to address issues related to poverty and extreme inequality remained modest, in the form of indirect compensation for the decline in real wages" until after 1906 when a Liberal government took office.

121Hobsbawm, 43-44 and 89 Hobsbawm notes (p. 101) that the term "nationalism" was actually created in the late nineteenth century in order to describe a sharp shift to the political right. In this study, a political shift to the right would be associated with a reduction in the distribution of political power as the State takes on a larger role in organizing social behavior.

122Beaud, 238. 91

generally articulating a goal of "steadily raising the living standards and ensuring the basic needs of the working class, expanding the public sphere and community life, and eliminating all forms of oppression and exploitation."123 To underscore the ideological distinction between Communists and Socialists, Lenin organized a Third International

(the Comintem) in March 1919 in order to promote communist revolutions around the world in imitation of the geopolitical success in Russia. 124 To counter this alarming source of inspiration and encouragement, Europe and the United States sought to maintain stability under liberal capitalism by once again resorting to political (and ideological) repression, both at home and in countries within their spheres of influence. 125

As the world plunged into economic crisis during the 1930s, the Englishman

John Maynard Keynes abandoned the theoretical tenets that had guided economic policy for so long by arguing that only State intervention could "save" capitalism from itself, much to the horror of his intellectual rivals, the most prominent of whom was

123 Terry Boswell and Christopher Chase-Dunn. The Spiral ofCapitalism and Socialism: toward Global Democracy. (London: Lynne Rienner Publishers, 2000), 6-7.

124 The First International was founded as the International Workingmen's Association in London in 1864 to unite several progressive trade unions and political parties struggling for rights for the working class. The Second International, formed in 1889, superseded the First International by socialist and labor parties to promote international socialism.

125Saul Landau. The Dangerous Doctrine: National Security and US. Foreign Policy. (Boulder, CO: Westview Press, 1980), 27. Boswell and Chase-Dunn argue that "Revolutions are key to understanding human agency in the construction and reconstruction of the [world] system, such as the global importance of the French Revolution for expanding individual liberty, of the Russian Revolution for expanding social welfare, or the Algerian Revolution for ending colonialism." Terry Boswell and Christopher Chase-Dunn. The Spiral of Capitalism and Socialism: Toward Global Democracy. (London: Lynne Rienner Publishers, 2000), 48. 92

Friedrich Hayek. 126 Prior to the Keynesian revolution, classical political and economic theorists agreed that the most appropriate role for the State was limited to providing minimal services such as defense and the enforcing of rule of law, thus preserving the social hierarchy created - and needed - by capitalism through officially sanctioned coercion. Keynes, however, argued that cyclical periods of economic boom, recession and depression experienced in the real world could be mitigated by government intervention and, as needed, deficit spending. Keynesianism also challenged important ideological premises with regard to the distribution of economic resources. Classical liberal ideology had steadfastly maintained that profits were the rightful property of the risk-taking capitalist, whose creativity increases the total volume of goods and services available, benefiting the lower classes as well.

Keynesianism insisted instead on the need for State mediation to redistribute wealth towards the poor through employment and social safety net programs to mitigate the harshest effects of capitalism in daily life, and also to stimulate both demand and

126 Professors at Cambridge and the London School of Economics, respectively, Keynes was already fairly prominent by the time that Hayek, 16 years his junior, took Keynes on by publishing a critical review of Keynes' two-volume book on credit cycles, A Treatise on Money in the August 1931 issue ofEconomica. Keynes was purportedly so unhappy with Hayek's article that he wrote an equally harsh review ofHayek's own work in a subsequent edition ofEconomica, which established not only a rivalry between two men, but also between the intellectual leaders of two rival schools of economic thought (see John Cassidy's article for a description of their apparently amicable yet competitive relationship). By 1936, Keynes and his theories had become dominant after publishing The General Theory on Employment, Interest and Money, regarded by many as one of the most influential contributions to the social science in the 20th century. Hayek, on the other hand, faded from public view, until his return to prominence after winning the Nobel Prize for Economics in 1974. In the meantime, Hayek founded (and served as the president of) the Mont Pelerin Society following a meeting he organized of 36 economists, historians and philosophers in April 1947. MPS was incorporated as a charitable organization in Chicago on November 6, 1947 whose purpose is "to interpret in modem terms the fundamental principles of economic society as expressed by those classical economists, political scientists and philosophers who have inspired many in Europe and throughout the western world." (reference: 'Mont Pelerin Society: Summary of History and Aims", Mont Pelerin Society Archives, Box 46, no folder). 93

Figure 10: Keynesianism Becomes Dominant Economic Theory

Traditional Classical Liberalism, Authoritarianism (now led intellectually by Hayek) - Fascism

American Liberalism

1------~----i------,_ 1--

j Stalinism j Social Democracy

Socialism Marxism-Leninism (The 2"d (The 3rd International) International)

I Revolutionary Populism I I Pluralism

Keynesian economics became the dominant economic theory guiding capitalist development between the 1930s and the 1970s, giving the State a more interventionist role with the responsibility of redistributing economic resources to the lower classes as an effort to "save" capitalism and the private property system.

In the meantime, American Liberalism promoted a capitalism that redistributed income and a democracy that redistributed political powers more broadly than before World War II. However, we must also recognize that continuing contradictions between American Liberal ideals and the reality it created eventually gave way to social movements demanding civil rights for African Americans, equal rights for women, the American Indian movement and later the human rights movement. economic production, thus shoring up the capitalist economic structure. While classical liberals maintained that social safety net programs were best managed through voluntary organizations, such as churches, Keynesians argued that private

efforts could never be enough to influence the national economy - and ward off 94

political instability (challenges to the relations of ruling) rooted in class-based frustrations surging from the localized, embodied truths about life for the working classes under capitalism.

Keynes' theory provided a foundation for the field of macroeconomics, and was embraced by policymakers in both England and the United States in the 1930s as the world first plummeted into the depths of the Great Depression and then once again rose up to mobilize for war in the 1940s, this time against fascist powers promoting a new version of authoritarianism justified by new narratives about race and national destiny. In Europe, Keynesianism was embraced by social democrats while in the

United States the Roosevelt administration's State-led economic policies and populist political rhetoric were packaged under the title "American Liberalism" to distinguish it from classical liberalism of 19th century in England (see Figure 10 above ). 127

Milton Friedman provides a brief distinction between American Liberalism and its European ancestor, called classical liberalism in this study, which equates

"freedom" with the tenets of economic liberalism.

As it developed in the late eighteenth and early nineteenth centuries, the intellectual movement that went under the name of liberalism emphasized freedom as the ultimate goal and the individual as the ultimate entity in the society. . . . Beginning in the late nineteenth century, and especially after 1930 in the United States, the term liberalism came to be associated with a very different emphasis, particularly in economic policy. It came to be associated with a readiness to rely primarily on the state rather than on private voluntary arrangements to achieve objectives regarded as desirable. . . . [T]he twentieth-century liberal regards welfare and equality as either prerequisite of or alternatives to freedom. 128

Under Keynesianism, government spending was normalized as a crucial

intervention tool used to regulate the economy and create a social safety net for the

127 Arblaster, 173.

128 Friedman. 5. 95

poor, reducing income inequality by redistributing wealth. As we shall see, after

World War II, preoccupation about income inequality captured the attention of not only economists, but also practitioners of the emerging discipline of international development which saw its mission as one of promoting economic growth and political stability under a relations of ruling inspired by liberal capitalism in Latin

America as well as the newly independent countries in Africa and Asia.

Chile in an Era of Rising Populism

If you analyze when Chilean democracy functioned solidly, you will see that it occurred when those minority groups ofgreater culture voted, or controlled suffrage, those that felt a real commitment to the system. But, once the great popular masses were incorporated into the electoral body, groups that didn't receive anything from the ruling regime became a factor. Democratic instability was the logical consequence. Jaime Guzman, interview Hoy magazine, August, 1979129

[Pedro] Ibanez traced the decline of the political strength of Chile's Conservatives to the Great Depression. Since the late 1930s, the 'economic right' has gone its separate w~ from the 'political right' - the politicians who really provide best long­ term safeguards for their interests. They allied themselves first with the Radicals and then with the Christian Democratic Party (PDC) obtaining in return market protection and access to the coffers of the state. 130 Memorandum of a Conversation U.S. Embassy; Santiago, Chile February 23, 1978

Mid-nineteenth century Chile, under the staunch control of a Conservative-

dominated government, attended to the interests of propertied Chileans comprised

129Suffrage was restricted to property owners in 19th Chile, but custom allowed specific segments of lower class men to vote, which they often did for payment.

130U.S. Embassy Santiago, Chile. "Memorandum of Conversation: 23 February 1978. According to the memo, this conversation took place at the home of the U.S. Political Counselor in Santiago, Chile on February 23, 1978. Pedro lbafiez was a prosperous business who was Chile's first member of the international membership organization founded by Friedrich Hayek, the Mont Pelerin Society. Mr. Ibanez also sat on the Council of State, which approved the final draft of Chile's Constitution that was presented to Pinochet. 96

primarily of a landowning elite of some 200 families. But soon a new source of wealth created an economic boom, and an economy dependent on the exports organized by a new class of merchant elites associated with the nitrate industry. 131 In

1840 a French scientist living in Peru, Alexander Cochet, discovered that both guano and nitrate salt deposits in the Atacama Desert separating Peru from Chile were rich in nitrogen and phosphorous, important ingredients in fertilizers and explosives. Cochet published his findings in 1841, creating an instant demand in Europe, where intense

farming and expanding agricultural production created a demand for fertilizers to

renew the land. British entrepreneurs quickly set up trading houses to transport nitrate

by railroad to Chilean ports (built by Chilean laborers, with British capital) and then

back to Europe from territory that started out as Peruvian and Bolivian, but that ended

up as Chilean after the conclusion of the War of the Pacific in 1882. 132 European

influence helped determine the outcome of this war by favoring Chile, both with the

provision of war materiel and financial credit. Their reward was the continuation of a

mutually beneficial trading relationship once the war was concluded. Once

nationalized, the nitrate fields were quickly privatized, generating much-needed

income for the Chilean government, which transferred a significant percentage of the

ownership to European investors. O'Brien notes that the British influence during the

mid-19th century up through the early 20th century permeated all sectors of the

economy: "by 1875, Great Britain and its empire absorbed 60 percent of Chile's total

131 Thomas F. O'Brien. The Nitrate Industry and Chile's Crucial Transition: 1870-1891. (New York: New York University Press, 1982), 3.

132Bruce W. Farcau The Ten Cents War. (Westport, CT: Praeger Publishers, 2000), 8-9. Also see Thomas O'Brien, 3. 97

exports and provided 40 percent of its imports." 133 In addition to private investment in Chile's economy, technology and skilled workers were also imported to help manage the export sector sending primary products back to Europe, while "loans negotiated in London helped finance the operations of the Chilean government," tying even more tightly together the interests of Chilean and British elites regarding the management of the country's economy, based on the fundamental principals of private property and economic liberalism. 134

Chile also benefited from technological advances in mass communication via the telegraph and the newspaper, and the means of national transportation, via the railroad. Disputes between elite groups erupted in the 1850s, igniting into two civil wars in which sides were drawn loosely across regional rivalries. These conflicts were finally resolved through the establishment of a Conservative-Liberal coalition in 1861

(similar to the post-1848 alliance of Tories and Whigs in England), in which the

Conservatives continued to exercise the upper hand in dictating terms for the relations of ruling. 135 Although suffrage was still legally limited to male property owners, it became commonplace for members of the National Guard, comprised of lower and middle class men, to vote in elections -- as long as their votes helped the government's slate of candidates win. Gillis' first-hand observations of the elections in 1851 illustrate how members of the dominant parties would use their influence over lower class men to guarantee election outcomes:

133 O'Brien, 61 and 64-65.

134 O'Brien, 3 and 15.

135Valenzuela, 1996, 14. 98

So far as the property and intellectual qualifications are concerned, the law is a dead letter, or at least is openly violated at every election; and thus, whilst there is nominal republicanism, and a ballot-box through which public sentiment may be expressed, the result of every election is so perfectly well known in advance at Santiago, that preparations are made for it in all confidence. In the country there are neither small property-holders, nor moderate-sized estates. . . . . These, the miners and the haciendados who own thousands of acres, alone possess property outside the limits of the cities. As for reading and writing, it may be safely asserted that not more than one in five of the inquilinos or peons on the estates are able to tell one letter from another. To them the will of the proprietor is paramount; and as he furnishes them fictitiously with the property qualification, they, of course, deposit the ticket he supplies. 136

As in Europe, Chilean Conservatives represented lingering tendencies towards traditional authoritarianism and wielded power through obedience from rather than negotiation with subordinate groups. Indeed, Conservatives (influenced by Catholic theology) often found themselves at odds with the ideas of modernity, whether expressed as classical liberal values of individualism, capitalism, and rationalism or the more populist values of democracy, social justice and workers' rights. 137 In addition to the Conservatives, progressive opposition groups such as the Radicals courted the members of the lower classes through "political and cultural circles," such the "Society of Equality" that was created in April 1850, soon after the free-thinking

Francisco Bilbao returned from exile in revolutionary France138 Inspired by the growing revolutionary fervor rampant in post-1848 Europe, workers often found more hope in the political leadership offered by unions and parties and the rationalist ideas of the Enlightenment and secularism than in the conservative, Catholic-inspired rhetoric, foreshadowing potential challenges to Chile's elite-dominated relations of

136 Gillis, 129.

137 Smith, I.

138 Fagg, 496. Fagg reports that, soon after founding the Society of Equality, Bilbao was forced back into exile. See also S Valenzuela, 23-24. 99

ruling. Investment in education was also on the rise in Chile as President Montt implemented progressive reforms to increase the opportunity for basic education and literacy by building over 500 primary schools across the country, substantially reducing illiteracy by the end of the 19th century. Montt also outlawed the mayorazgo system, allowing land ownership to become more decentralized. 139 This helped increase the roster of men who met the constitutional requirements for citizenship, thus qualifying them to participate in public discourse about social structure.

In the 1870s (much later than in England), the Conservatives finally lost their dominant position to the Liberal Party (associated with economic liberalism and the interests of large property owners and merchants). Meanwhile, emerging parties such as the Radicals (representing political liberalism and calls for extending suffrage to small property-owning, artisans and propertyless males) sought to limit the power of both the Conservatives and the Liberals by limiting executive authority through their growing influence in Parliament. One specific area in which political parties sought to curb Conservative influence was through the ongoing practice of manipulating the outcome of national level elections, a task that was not complete until after the Civil

War of 1891. To remedy their waning influence over the thinking that inspired the relations of ruling, the Conservative Party joined forces with the Radical Party to push for additional electoral reforms in a fleeting alliance against the now dominant

Liberals. 140 Although this might be considered a surprising move at first blush, it was,

139 Fagg, 497.

140 But by 1876 this alliance was over as the Radical Party established ties with the Liberal Party to defeat key candidates from the Conservative Party. Valenzuela, J. Samuel. "The Origins and 100

in fact, a calculated effort on the part of the minority elites to regain control by adding to the rosters new voters (now that opportunities for voter fraud were limited) over whom the Conservative Party could continue to dominate, as described so clearly

above by Gillis. As a result of Conservative and Radical advocacy, property ownership was abolished as a prerequisite for the right to vote in 1874, although that

privilege was still limited to men who were literate by 1840, which meant that the

legal voting population remained a minority of adults. 141

As mentioned above, between 1879 and 1884 Chile fought against Peru and

Bolivia in the War of the Pacific, which had grown out of a dispute over a 500 mile

long strip of nitrate-rich land in the Atacama Desert that was being exploited by

Chilean companies in concert with British interests. This economic arrangement was

threatened when Peru attempted to nationalize territories that Chile considered as its

own. Soon afterwards, Bolivia began protesting a previous agreement under which

Chile received a share of export taxes on nitrate sales. Unable to resolve their disputes

with Chile, Peru and Bolivia formed an alliance that went into force when Bolivia

declared war on Chile in 1879. Upon defeating its two neighbors in 1883, Chile

promptly confiscated nitrate-rich territories from each of its rivals, leaving Bolivia

landlocked, thereby creating a dispute that remains a source of tension even today.

Transformations of the Chilean Party System," Estudios Publicos, vol 58, autumn 1995. http://www.nd.edu/~kellogg/publications/workingpapers/WPS/215 .pdf, 14.

141Valenzuela (1996) notes, however, that a transitory article of the Constitution of 1833 entitled illiterates to vote if they had fought for independence (p. 11 ). Without adequate records to dispute any claim of any age-appropriate member of the National Guard, the outcome was to create additional voters for government candidates. Baldez notes that unclear language regarding voting requirements vis-a-vis women was challenged in 1875, when the widow ofa former provincial governor registered to vote. This situation was remedied in 1884 when the electoral reform of that year clarified that suffrage was restricted to men. 101

Chile was rewarded by a boost to its economy that lasted until the Depression hit in

1930. Already the leading exporter of copper, exploitation of the new territories allowed Chile to become the primary exporter of nitrate, primarily to British interests, during the late 19th and early 20th centuries. 142

Around the same time creole Chileans also resolved a domestic dispute. The final military defeat of the independent Mapuches resulted in their confinement to reservations (reducciones), primarily in the South, beginning in 1884. 143 As a nation to which European culture was completely foreign, indigenous Chileans, 144 like Native

Americans in the United States, were relegated to the status of exile within their own territory, with limited access to land in a society that protected private property and favored lighter skin and European ideas. Title to the land assigned to them was held in common, and was farmed as communal property or through reciprocal arrangements.

Mapuche land outside of the reducciones was annexed by the State. Reminiscent of the Enclosure Movement in England, much of this land was then sold to settlers (many of whom were new European immigrants) or private companies. This led to the privatization of land previously held in common, as well as the encroachment of

142Bushnell and Macauley, 246 and 234. Oppenheimer reports that "by 1884 about two-thirds of the nitrate mines were owned by Europeans. Britain and later the United States were major investors in both nitrate and copper. Thus, the Chilean economy was drawn more closely into the world-system, both as a primary product, export-oriented economy, and as one whose economy was dominated by foreign capital" Lois Hecht Oppenheim. Politics in Chile: Democracy, Authoritarianism, and the Search for Development. (Boulder, CO: Westview Press, 1993), 11.

143 Faron, p. vii and Haughney, Diane. Neoliberal Economics, Democratic Transition and Mapuche Demands for Rights in Chile~ (Gainesville: University of Florida Press, 2006), 4.

144The Mapuches, whose traditional lands are located in the south, are the largest remaining indigenous group in Chile. Other indigenous groups include the Aymara, the Likun Antay and the Rapa Nui, who were also subdued in the late 1800s (see Haughney, 19). 102

creole settlements in the southern parts of the country. 145 As a result, the Mapuches were relegated to a subordinate status in the land called Chile, which has not yet been overcome.

As anticipated by both English and Chilean aristocrats, an unequal distribution of property accompanied by an unequal distribution of political power resulted in an unequal distribution of profits. The outcome in the everyday world was the perpetuation of a vast economic gulf between the rich and the poor, buffered by a middle class of merchants that Pamela Constable and Arturo Valenzuela call "the backbone of Chilean democracy." 146 Chile's middle class at this time was a mosaic ranging from small property owners to wealthy artisans who saw access to political power as the way to secure ·greater economic power. Although some middle class members aligned themselves with the Liberal party, most considered the Radical Party to best represent their interests. Rising stakes and expanding suffrage for members of the working class heightened the influence of parliamentary representatives, as politics

in Chile continued its politically inclusive drift, with working classes articulating their

demands for greater access to economic wealth both through union pressure and party politics.

The Constitution of 1833 had resolved early political conflicts by creating a

strong executive, who was authorized to make appointments, close Congress and, if

needed, declare a "state of siege, thus enabling the President to manipulate the

145 Haughney, 5 and 19

146Pamela Constable and Arturo Valenzuela. A Nation ofEnemies: Chile under Pinochet. New York: W.W. Norton & Company, 1991, 21. 103

outcome of electoral processes." While the 1833 Constitution provided a framework for political stability in the Republic's early years, O'Brien traces the destabilization of the system at the end of the century to the attachment of the nitrate fields to Chile at the conclusion of the War of the Pacific, which weakened the established social structure by creating a new source of unassigned wealth, which, once allocated, would redistribute power within elite circles.

After the capture of the nitrate regions in 1879, the state served as the oligarchy's key link to the nitrate industry and was the most vital force in the domestic economy. This new role of the government rapidly increased political tensions. The elites splintered into innumerable factions vying for a share of state resources and seeking to protect existing relationships to the nitrate industry. The penetration of monopoly capitalism exacerbated these conflicts as Chilean politicians became the partisans of competing European nitrate producers. In the Civil War of 1891 these forces converged on and destroyed the Chilean presidential system, the one state institution that threatened to disrupt this process. 147

This divergence of interests among the dominant elites created the opportunity for a more honest competition in the political arena by the 1890s, when, as Valenzuela notes, there finally emerged "an electoral system free from government interference.

parties were able to maximize their power capabilities (or were forced to do so) by mobilizing voters rather than relying on contacts with the Ministry of the Interior to

place their candidates on officially favored lists."148

Suffrage expanded in this context of cultural change and social movement, as

did the relative size of the middle class. Meanwhile the Radical and (newer)

Democratic Parties, representing lower class interests, became increasingly successful

in winning seats in Parliament. To the left of these parties emerged the more militant

Communist Party of Chile and the Socialist Party, demanding political and economic

147T. O'Brien, Thomas, 124.

148 S Valenzuela (1995), 5. 104

rights for the working classes. Increasing pressure for changes in the distribution of wealth eventually gave way to minor concessions from elites, such as protective labor legislation and welfare measures. But this taste of victory, coupled with a growing critical analysis of the kind of life experienced by subordinate groups under the established relations of ruling, only stimulated increased demands for inclusion in public discourse over social structure, testing even more the bonds of cohesion in a society characterized by a highly inequitable distribution of economic power. 149

As in Europe, Chile experienced growing social unrest in the late 1800's (a period of international economic depression) as members of the working class organized themselves to demand inclusion in political processes and to protest the conditions in which they lived and worked. Similar to their British counterparts, mining communities in the north had set up mancomunales, or mutual aid societies that alleviated economic distress by offering health care services, unemployment benefits and disability pay, along with cultural activities, newspapers, and sports. In the 1890s the mancomunales became an organizing force, along with the growing

Democratic Party, for strikes that were carried out throughout the northern mining region. The military response was violent, resulting in death and injury, but workers were not dissuaded from demanding a greater share of economic and political power

(Figure 11 ).

In the end, social conflict proved to be insoluble through executive control or parliamentary debate: in 1891 a power struggle between President Balmaceda and

Parliament over the scope of presidential power (guised as a dispute over a cabinet

149 Fagg, 504. 105

confirmation), sparked a short but deadly civil war, as well as a constitutional crisis that resulted in the establishment of a new relations of ruling that rebalanced power away from the president towards parliament. 150 The civil war also resolved a crisis that had been brewing between Chile and Britain over ownership of the lucrative nitrate fields. After the War of the Pacific, British companies had purchased interests in the nitrate industry, until they controlled 70% of the nitrate fields, whose harvests continued to be exported to Europe via British-owned railways and ships. In 1888,

President Balmaceda had announced his desire to "Chileanize" the nitrate fields through nationalization as a part of his modernization program. When Chilean

Conservatives balked at Balmaceda' s attempts to rein in the power of Congress,

British capitalists took sides, offering both· money and arms, contributing to the success of the opposition in 1891. After the defeated Balmaceda committed suicide, the British Ambassador wrote in his report home "the British Community makes no secret of its satisfaction over the fall of Balmaceda, whose victory, it is thought, would have implied serious harm to British commercial interests." 151

Thus was born Chile's "Parliamentary Republic" where growing class conflict over the life experienced under liberal capitalism was mediated through coalition building among parliamentary representatives for nearly forty years. Even though the

Parliamentary Republic's public discourse confirmed a tradition of party politics and

150Brian Loveman. Chile: The Legacy of Hispanic Capitalism. (New York: Oxford University Press, 1979), 349.

151 Quoted in John Bellamy Foster and Clark Brett. Ecological Imperialism The Curse of Capitalism. First appeared in Socialist Register 2004, accessed on November 1, 2007 at http://www.nodo50.org/cubasigloxxii/taller/foster clerk 301104.pdf, 191-192. 106

Figure 11: Map of Political Positions in the Republic of Chile - Late 1800's

' 1833 Constitution

Conservative Party allied Liberal Party with the Catholic Church I I

Radical Party I I

Democratic Party (Society of Equality) Organized workers demanding increased access to economic and political power.

As in Europe, politics and economics in 19th century Chile were controlled by property-owning elite males. As was reflected in the 183 3 Constitution, the ideological perspectives of these elites fit most readily into the traditional and liberal paradigms, with some imported populist ideologies coming from France creating pressure for increased political liberalism.

These pressures led to the organizing of working class men into unions, political parties and mutual aid societies, creating further impetus toward political liberalism. electoral contests in Chile, in the everyday world, its relations of ruling depended upon continued classical liberal prescriptions such as limited lower class participation in political processes and minimal distribution of economic wealth away from the propertied classes. 152 But change was in the making as more and more advocates for

152Government revenues were generated by Chile's export economy rather than domestic industrial development or taxation. 107

working class men entered into public discourse and negotiations over rules governing

social structure. Under the rules of the Parliamentary Republic, "the Radicals grew in

strength and became adept at coalition politics .... Middle class contentment with the

Parliamentary Republic was strongly related, however, to ongoing economic prosperity and minimal social pressure from below."153

In addition, the liberalization of political processes through the strengthening of Parliament (which now represented popular interests emanating from their

subordinate position under capitalism) vis-a-vis the Executive continued to erode

social cohesion as rapid industrialization, an expanding middle class and an

increasingly politicized populace put more and more stress upon social structures not

designed to represent lower class interests. At the same time as the ascent of the

middle class gained momentilln, economic downturns in the first part of the twentieth

century made the need for access to political power even more crucial than before, in

order to foster the redistribution of economic power in the country towards the lower

classes.

In sum, as we can see, by the end of the 19th century, populist ideology

articulating a working class critique of capitalism was gaining legitimacy as an

organizing force in political discourse. At the same time, the principles of economic

liberalism continued to dictate terms regarding the distribution of economic resources.

To maintain their favored status, the elite endeavored to restrict access to power

through the use of cultural explanations and legal rules that positioned the property

153Paul Winter Drake. Socialism and Populism in Chile: The Origins ofthe Leftward Movement ofthe Chilean Electorate, 1932-1952. (Urbana, IL: University of Illinois Press, 1978), 11 and 17-18 108

owners closer to sources of economic and political power than subaltern groups.

When such arguments failed, national elites (in concert with like-minded international interests) evoked military force to reassert their dominance. Nevertheless, what we

see emerging over the subsequent decades are widening fissures in a political system less and less able to maintain a social infrastructure that reflected the expectations of its expanding population of enfranchised, politicized citizens. This was especially true

in the context of stark economic inequality, which was exacerbated by ongoing

fluctuations in earnings from the nitrate industry.

In 1907 nitrate workers went on strike once more to demand better working

conditions and higher salaries, and the military once again intervened with violence,

resulting in the massacre of up to 3,000 men, women, and children in a schoolyard.

The bloodbath of the Santa Maria de Iquique massacre shocked Chilean society, led to

a sharp reduction of strike activity and a retreat of the Democratic Party from

advocating for workers rights. Another result was that Senator Luis Emilio

Recabarren was inspired to found the Partido Obrero Socialista (POS - Workers'

Socialist Party) in 1912 to represent working class interests in public discourse. The

POS served as a radicalizing force, organizing tenants associations and helping to

create the Federacion Obrera de Chile (FOCH) the Marxist-oriented, Workers

Federation of Chile, 154 in 1917, the same year that marked the successful conclusion of

both the Mexican and Bolshevik Revolutions. World War I brought fresh blows of

economic recession to Chile as well as a new inflow of egalitarian ideas via European

154Cathy Lisa Schneider. Shantytown Protest in Pinochet's Chile. (Philadelphia, PA: Temple University Press, 1995), 22-23. 109

immigrants that only served to increase the demand for changes in the relations of ruling to better address the needs of the poor and marginalized (Figure 12).

Figure 12: Map of Political Positions in the Republic of Chile - Early 1900's

183 3 Constitution II

Conservative Party Liberal Party I I I Radical Party I

I I I I I Democratic I Party Communist Party I I I I I I I Socialist Party I I I Federaci6n Obrera I de Chile I I

As in England, working class men and women began to organize themselves via political parties, trade unions and mutual aid societies in the late 19th century, which translated into increased pressure for social reforms to protect workers and offer more social benefit programs.

Although the Democratic Party was initially a vociferous advocate for workers' rights, its position shifted in response to the Iquique Massacre. In 1922 the Socialist Workers' Party (formed in 1912) evolved into the Communist Parties; a new Socialist Party was created in 1933, resulting in a broad array of parties representing diverse ideological positions. Party politics, once a negotiated arrangement between two strands of elitist thinking, became increasingly contentious under the "Parliamentary Republic" in which parties representing lower class interests were gaining influence that soon resulted in a new negotiated arrangement between the two strands of elitist thinking found in the Conservative and Liberal parties. 110

In 1920 Arturo Alessandri ran for president of the country under a Liberal

Alliance, hoping to install "rapid evolution" of the social order in order to "avert revolution."155 Once elected, and foreshadowing Keynesianism of the following decades, President Alessandri proposed to address the serious issues of rapid urbanization and a restless working class through a series of progressive reforms.

Unable to gain sufficient parliamentary support for his program, Alessandri was ousted by a coup in September, 1924, only to be reinstated in January 1925 with the mandate to create a constitutional order that would reflect the new social realities of

Chile. 156 Although the Constitution of 1925 shifted the balance of power back to the executive office, a conservative measure if the executive power represents elitist interests, it also introduced popular election of the president and senators, heightening the potential influence of the swelling ranks of the working class voters. The ceding of political power to working class men created the potential for more inclusive economic and social policies - if the president represented the interests of the majority, the members of the working class, that is.

The Constitution of 1925 also provided an inclusive legal framework: it codified protective labor reforms and welfare measures, separated Church and State,

and imposed restrictions on Parliament, ending its brief period of dominance over the president who was now directly elected. The new constitution also deepened the

legitimacy of electoral politics in Chile by recognizing the role of parties 157 in the

155Drake, 26.

156 Pike, 174-176.

157 Loveman, 351. 111

political process, including the Partido Comunista de Chile (PCCH), which looked to the Soviet Union for ideological leadership. 158 Significantly, the 1925 Constitution also subjected property rights to limitations "necessary for the maintenance and progress of social order" and expanded economic leverage for State, setting up a legal framework to allow State intervention in economic activities and on behalf of redistribution of resources towards the poorer classes, much to the chagrin of elitist elements in society. 159

By the time the Great Depression was visited upon Chile, a strong President and powerful, interventionist State had been constructed as a way to address the growing social unrest and widespread poverty. 160 In a parallel effort, under the influence of progressive papal pronouncements in 1891 and 1931, Chilean bishops created Catholic Action programs starting in the mid- l 930s. Under these programs church laity was taught about new Church principles advocating for greater social justice and the Church established social service organizations and programs to help the poor; but these interventions weren't enough.

In June 1932 a group of military officers with socialist aspirations staged a coup and demanded the resignation of the then-President Juan Esteban Montero.

Montero complied, making way for what the officers proclaimed as the "Socialist

Republic of Chile." The regime lasted no more than six months, and its legacy is perhaps best understood as a clear statement of the urgent need for broad intervention

158 Schneider, 26.

159 Drake, 43.

160 Drake, 174-175. 112

to help the poor majority in Chile by providing relief from the deprivation they experienced under the capitalist system. Drake describes the propositions made by the

Republic's leaders as "an odd blend of technocratic, liberal and socialist thought" whose unfocussed policy prescriptions favored State planning and government stimulation of the private sector, but without any intentions of expropriating privately held land or wealth. 161 Lacking broad military support (the officers were generally

suspicious of Communist influence over the government) 162 and in the face of negative public opinion, the then-provisional president, Carlos Davila, resigned from office, quickly leading to the call for presidential and congressional elections and ending the socialist experiment. 163 One outcome of this brief interlude was a conscious effort by the government to put limits on the influence of the military in

Chile's political life.

This approach had created a profound split between civilian and military spheres. The military began to develop a social and cultural life that was completely separate from civilian society .... military cooperation with the Chilean political system was due not to the assimilation of democratic values but to obedience to a political imperative. Subordination to civilian political authority was accepted as part of an inherited tradition, not as the result of reasoned and firm adherence to principle. 164

Under this growing array of influences the ideas, norms and values expressed

m Chile's social structures became increasingly inclusive and egalitarian as the

country settled into the 20th century. The legal framework provided by the 1925

161 Drake, 90.

162 Anticommunism was infused into the Chilean armed forces by Captain Emil Komer who was brought to Chile in 1885 to modernize the army. "The Prussian influence was reflected in the Memorial de/ Ejercito de Chile, which condemned Bolsheviks and communist ideas at least fifteen years before the Chilean Communist Party was founded in 1922. See Arriagada, pp. 86-87

163 Drake, 92 and 132.

164Genaro Arriagada. Pinochet: The Politics ofPower. (Boston: Allen & Unwin, 1988), 82. 113

Figure 13: Political Positions in the Republic of Chile in the mid 20th Century

Liberal Party

Conservative Party (and conservative elements of the Catholic Church) Radical Party I I

Christian Democratic Party (and progressive elements of the Catholic Church) Communist Party (adhering to the Third International) Socialist Party

1925 Constitution

I

By the mid 20th century Chile had developed an institutional framework that favored political liberalism over economic liberalism. Inherent in the Constitution of 1925 was a recognition of equal worth of the working class and the duty of the State to provide for their needs.

The Constitution codified structural reforms to allow the State to redistribute economic power (e.g. labor reforms, welfare measures and subjecting property rights to limitations deemed necessary by the State) while protecting political liberalism by officially recognizing the role of political parties and legally separating the Church from the State. In the meantime, a broad array of political parties representing the interests of the working classes sprang up to promote inclusive policymaking by the State under the rubric of social justice and workers' rights.

Constitution was instrumental in helping to create a legal infrastructure that worked to distribute access to political, economic and social power more equitably

amongst citizens, while the State took on a central role in economic planning and in 114

providing access to basic social goods such as health and education in the hopes of avoiding future social unrest. But economic elites were not persuaded, as Drake writes:

During the Parliamentary Republic, [elites] had feared the State as a potential threat to their private enterprises; now they feared more the threat of new groups against their interests and State stability. By 1932, the elites saw the worst danger coming from emerging social-political elements whose radical reform proposals made the 1920s issue of private versus State capitalism appear mild by comparison.... The elites sought to dampen class antagonisms and voter unrest by stabilizing the economy under State auspices. They hoped to promote harmony by reducing their traditional opposition to the incorporation of regional and social groups that historically had remained on the fringes of national life. 165

The Partido Socialista de Chile (PS) was founded in 1933, in the midst of the

Great Depression, by members of the middle class who advocated for "a flexible and pluralistic policy" toward labor and a broader distribution of economic and political power across Chilean society.

In the meantime, young Catholics, inspired by progressive church doctrine,

formed the Falange Nacional Party in 1938 to disseminate the social teachings of the

Church across Chilean society. Later, in 1957, the Palange united with other "social

Christian movements" to create the Christian Democratic Party, whose presidential

candidate, Eduardo Frei, ran for office in 1958 on a reformist platform rooted in

progressive (and inclusive) Catholic ideas. 166 As President, Frei "encouraged

working-class activism, opened higher education to the poor, and launched ambitious

social programs at the same time that he promoted greater industrial efficiency." But

165 Drake, 115-116.

166 Smith (1982), 88-89. See also Constable and Valenzuela, 23. 115

the one reform for which the elites could not forgive Frei was the expropriation of land to redistribute to the poor in the form of peasant cooperatives. 167 (Figure 13)

167 Constable and Valenzuela, 23. CHAPTER6

LIBERALISM VERSUS REVOLUTIONARY POPULISM

There is no escaping our obligations: our moral obligations as a wise leader and good neighbor in the interdependent community of free nations--our economic obligations as the wealthiest people in a world of largely poor people ... To fail to meet those obligations now would be disastrous; and, in the long run, more expensive. For widespread poverty and chaos lead to a collapse of existing political and social structures which would inevitably invite the advance oftotalitarianism into every weak and unstable area. Thus our own security would be endangered and our prosperity imperiled. A program of assistance to the underdeveloped nations must continue because the Nation's interest and the cause ofpolitical freedom require it. John F. Kenned/69

All free and successful countries have some common characteristics - freedom of worship, freedom of the press, economic libertv, the rule of law and the limitation of power through checks and balances. George W. Bush170

The International Ideological Context

While many changes in global organization began emerging shortly after the

First World War, they did not become institutionalized until after the Second World

War. This process of creating "supra-national" structures to manage international political economy was carried out under the influence of the United States, which superseded England as the flag bearer for Anglo Saxon dominance in the western world. Wilsonian democracy had given impulse as an organizing concept after the

First World War as a means of (hopefully) avoiding future mass warfare in a global community now organized as nation-states intent upon protecting national

169 "USAID History" found at http://www.usaid.gov/about usaid/usaidhist.html

170Elisabeth Bumiller. "Bush Tells Putin Not to Interfere With Democracy in Former Soviet Republics. New York Times, May 8, 2005, 11. Emphasis added. 116 117

economies. 170 But in the face of resistance and faltering economies, the menacing grip of fascism reached from Italy across Europe to cross the oceans. As an ideology, fascism represented a throwback to authoritarianism, reflecting an instinctive distrust of the weaknesses found in human nature that, Fascists maintained, could only be controlled through political, economic and cultural illiberalism under the watchful eye of a State, in search of its own glory, that promised to destroy any force that might stand in its way. Indeed, although economic conditions generally improved under early Keynesianism in the 1930s, political stability had not, and Europe was engulfed in a second devastating war in the 1940s, whose outcome was the undisputed demise of European hegemony as colonies throughout Africa and Asia seized the moment to demand freedom from European domination. 171

Out of the ashes of the Second World War emerged two organizing hegemons frozen into perpetual ideological opposition: the United States under the banner of liberal democracy and the Soviet Union under the banner of revolutionary communism. Soon it became impossible to distinguish between the layers of tensions stemming from the competing ambitions of two geopolitical superpowers and the competing ideologies in which they clothed themselves. While both claimed the protagonist role of promoting democracy around the globe, the United States tied its

170 Hobsbawm, 132.

171 During this same time period Third World intellectuals began to publish their own critiques of liberalism and their own explanations about to how fulfill the promises of modernism. Liberation Theology and Dependency Theory were two prominent arguments that gained influence in 1960s; both were rooted in the Latin American experience and wielded substantial influence across the continent, including Chile. 118

political vision to an economic model that favored the capitalist entrepreneur while the

Soviet Union held up the vision of the worker as a vanguard.

As the United States rolled out its leadership of western civilization under the softer version of "American Liberalism" it drew upon ideas found in Keynesian economics and Wilsonian democracy that promised to build an inclusive society.

Socialism, on the other hand, gained prominence in many other parts of the world, especially in previously colonized states, whose independence movements themselves articulated a rejection of the local actuality of lived experience of subordinate nations under the western capitalist paradigm. More often than not, nascent nation-states justified their birth with nationalist and socialist arguments. Socialism and state-led growth were also gaining momentum as guiding theory in Western Europe in the wake of World War II's legacy of a destroyed economic infrastructure across the continent.

As the world squared off into two well defined ideological camps, socialists met in

Frankfurt in 1951 to clarify their position via the Socialist International (alternatively known as the Fourth International), under which they abandoned Marxism while confirming their commitment to the reformist political ideals (similar to those of the

Second International) and the economic theories of John Maynard Keyes. 172

Communists, on the other hand, declared their allegiance to Stalin and the Comintern, which was stamped with the label of "totalitarianism" in western discourse

The United Nations, founded in 1945, was one of the first building blocks creating the relations of ruling for globalized western civilization under US leadership.

One of the first policy instruments to emerge in this new era was the Universal

172Boswell and Chase-Dunn, 84. 119

Declaration of Human Rights of 1948 whose two covenants mirrored the global ideological war between the United States and the Soviet Union. The first, the

International Covenant on Political and Civil Rights, guarantees basic rights of the individual (e.g., the right to life, freedom of belief and religion, to liberty, to vote, etc.) and best supports western ideology associated with historical economic liberalism.

The second, the International Covenant on Economic, Social and Cultural Rights, expresses a "commitment to ensure collective welfare particularly in regard to socioeconomic matters (such as the right to work and social security)"173 thereby opening a door to State-mediated actions to protect subordinate groups, such as women, children indigenous groups, laborers, etc. under the tenets of political liberalism. 174 As could be expected, in international circles, the United States became champion of political and civil rights while the Soviet Union carried the flag of economic, social and cultural rights, splitting the Declaration into two opposing camps rather than one unified framework.

In this context of ideological opposites, words and deeds promoting the rights of subordinate groups naturally drew upon populist rhetoric and critiqued the lived reality of inequality that is inherent under liberal capitalism. But such talk made their

proponents vulnerable to charges that they harbored "Marxist" or "communist"

aspirations in an era when public discourse was increasingly polarized around the two

173Klass Dykmann. Philanthropic Endeavors or the Exploitation of an Ideal? The Human Rights Policy of the Organization of American States in Latin America (1970-1991). Frankfurt/Main, Germany: Vervuert Ver/and, 2004), JO. Dykmann identifies what he terms a "third generation" of human rights, which are "the right to solidarity and self-determination of peoples as well as the rights to development and environment" especially after the calls for a New International Economic Order.

174 See Dykmann, pages 10-12 for a thorough discussion on this issue. 120

poles of economic and political liberalism. Distinction between a vision of inclusion and the specter of Stalinist totalitarianism became increasingly elusive in a post World

War II West that was organized around a virulent stance against communism and the

Soviet Union -- at least until 1989 when the wall between East and West was tom down.

Engrossed in McCarthyism at home, the United States also began exporting national security arguments based on anti-communism to allies in places like Latin

America through training programs offered to police and military forces. 175 These training programs were one component of a broader array of foreign assistance programs that emerged in the post-war era as a key policy tool used by the United

States to woo allies first in Europe, then exert influence over Latin America, Africa and Asia, while attempting to confine Soviet domination to Eastern Europe. 176

Additional elements of the global structure being built to ensure the international dominance of liberal capitalism under U.S. leadership included the

Bretton Woods system. Through Bretton Woods, both the International Monetary

Fund (IMF) and the World Bank were established in 1944 to manage the international flow of monies and govern currency relations. While, in theory, the Bretton Woods system was intended to create legally binding obligations for countries under the pluralist umbrella of a multilateral organization, in actuality, its most influential

175Martha K. Higgins. Political Policing: the United States and Latin America. (Durham: Duke University Press, 1998), 3.

176Robert Latham. The Liberal Moment: Modernity, Security, and the Making of Postwar Internaitonal Order. (New York, NY: Columbia University Press, 1997), 143-144. Higgins (p. 2-3) notes that the promoting "rule of law" has replaced counterinsurgency as a foreign assistance objective in the post Cold War era, with programs in the areas of counterterrorism, narcotics control, and organized crime. 121

member was the United States, under the assumption that the US would provide a stabilizing force in the system. In this respect, the Bretton Woods system became inextricably linked to the economic policy interests of the United States. The Bretton

Woods conference also inspired the creation of the General Agreement on Tariffs and

Trade (GATT) that sought to reduce protectionist policies and thereby promote international trade. In 1995 GATT was superseded by the World Trade Organization

(WTO), whose mission is provide a to rules framework for international trade while monitoring world trade by providing oversight for the implementation of negotiated trade agreements. Together, these three multilateral institutions help to create an international economic order (relations of ruling) that reflects the fundamental precepts of economic liberalism, which it imposes upon national governments seeking access to their resources.

As we recall, the fundamental precepts of economic liberalism seek to create a

"friendly" environment in which low-cost labor and land-resources attract financial capital through the promises of short-term profits. To accomplish this feat,

international interests negotiate terms of engagement with national governments, which, upon signing bilateral or multilateral agreements, have committed their

governments to respond to the interests of international capital, even if those interests

are at odds with the interests of their constituencies. Thus we see how a set of extra­

local relations of ruling, this time negotiated between international and national elites,

create a rules framwork that structures the lives of people they haven't met who live in

places they haven't been, using textaully mediated discourse to define the implications 122

of lower wages, reduced job security and disappearing safety nets as incentives for property owners to invest - and incentives for laborers to work harder and longer.

The influence that these multilateral institutions exerted over what used to be called the "developing world" were complemented by bilateral initiatives undertaken by the United States to maintain influence, first in Europe under the Marshall Plan in

1947 and then in developing countries starting in 1960, shortly after Cuba "went communist." Modernization theory, especially as articulated by W.W. Rostow, guided early development assistance programs. In his book The Stages ofEconomic Growth: a Non-Communist Manifesto Rostow argued that assistance programs should support economic growth as a way of leading the third world into democracy with capitalism.

Rostow asserted that, as in Europe, the United States and other countries, political

liberalization (democracy) would follow economic liberalization (capitalism) as

developing countries naturally progressed through five stages from traditional society to modem "maturity" at some undefined future date.

Once again, we see the careful distinction between the ideals of the economic

liberalism and political liberalism, although both are articulated as cornerstones of the

liberal order under U.S. leadership, in contrast to the British example. But it should

also be noted that, when challenged by real-world contradictions, modernization

theorists countered with arguments that the free market economy always precedes the

free democratic polity, which would emerge when society is "ready." According to

this mindset the capitalist economic order always take precedence over populist

aspirations. This consistent prioritization of economic interests of producing wealth 123

over political interests of redistributing wealth has proved to itself to be an inherent contradiction that its detractors have consistently pointed out..

In the drive to maintain influence in developing countries Higgins argues that the discourse about communist containment and economic development were fused together to create a rationale to "legitimize preventive, proactive security planning during peacetime," especially in countries such as Chile, who were assessed as being in "danger" of falling under communist influence. (Figure 14)177

One method of dealing with "problematic" regimes was to create and reorganize security forces. 178 Another method that was specifically used in Chile was to offer academic training programs to steep young, ambitious economic students in free market economic theory. In Chile these young economists became known commonly as the Chicago Boys, an important cadre of civilian economic advisors to the Pinochet regime. 179

177 Higgins, 75 and 85.

178 Higgins, 24. Higgins notes that it was actually the Prussian government that reorganized the Chilean police in the early 1900s (p. 34)

179As will be discussed further below, "The Chile Project" began as a training project in early 1956 under a contract between the University of Chicago and the U.S. International Cooperation Administration (and a corollary agreement with the Catholic University in Chile) to provide graduate level training to aspiring Chilean economists at the University of Chicago. Together the University of Chicago project staff in Chile, headed by Arnold Harberger, and the Faculty of Economics at the Catholics University selected young men for the program. By the time the project ended in 1964, over 150 Chileans had benefited from its training program, which had probably cost about $1 million. See Valdes for a detailed description of The Chile Project. 124

Figure 14: Western Ideologies in the Post War Era

Bretton Woods system andGATT Pre-modem Traditional Authoritarianism (repopularized by Kirkpatrick, et al)

I National Security Doctrine I -

American Liberalism - Modernization/Trickle Down Theory of ·-·-·-·-·-·-·-·-·~ ~, (Fascism) ;I Development ,______,._ ------

(Stalinism) I I European Social Democracy

Marxism-Leninism - I Socialism Universal Declaration of I Economic, Social and Cultural Rights Human Rights

A myriad of ideologies competed for believers in the post-World War II era, with American Liberalism (in alliance with social democracy) working as a polar opposite to Stalinism (in alliance with Marxist-Leninism).

Chile in the Post-World War II Era

World War II exploded on the heels of the Depression, exacerbating the economic crisis engendered by reduced access to international markets for Chilean products and making compelling the argument that Chile needed to develop national industries producing for domestic consumption. During the mid-1950s theoretical 125

arguments that drew upon developing country experience, such Raul Prebisch's180 structuralism, maintained that structural resistance to change in industry and agriculture sectors was the primary culprit for endemic poverty and underdevelopment in the Third World. 181 The policy prescription promoted by Prebisch and the

Santiago-based Economic Commission for Latin America (ECLA) was State-led industrialization. Under structuralist influence, Chile was one of many countries that sought to renegotiate their place in the international marketplace through the implementation of policies such as import substitution industrialization (ISI). As economic policy, ISI deposited the role of entrepreneur upon the shoulders of the

State, which not only encouraged the development of production for domestic use, but also provided political relief, mediating questions about resource distribution between classes.

While dependency theory and ISI are not familiar concepts outside academic circles in the United States and Europe, Schamis notes that ECLA's theoretical reach extended across South America in the 1950s: "virtually no government of the region escaped, m one way or another, from [ECLA]'s principles and policy

180 The United Nations' Economic Commission for Latin America (ECLA) is headquartered in Santiago, Chile. Headed by Argentine Raul Prebisch from 1948 - 1963, ECLA became a leading proponent of structuralist theories of development generally called "dependency theory" which argued that underdevelopment is caused by structural inequalities between rich and poor nations that must be remedied. One remedy was for the government to intervene in the economy to promote the national level industrialization under ISi plans. After leaving ECLA Prebisch took his structuralist ideas to Geneva where he served as the first Secretary-General of United Nations Conference on Trade and Development (UNCTAD) (Atkins, 238-239). Under Prebisch's leadership, UCTAD issued a controversial call for a "New International Economic Order (NIEO) to improve the terms of trade for developing countries.

181 Atkins, 348. 126

recommendations." 182 Given its role as host city for ECLA, Santiago had become the intellectual epicenter for structuralist thought. In this context, as building the "Great

Society" became the goal of the Johnson Administration in the United States and social democratic welfare states became the norm in Europe, structuralism and state- led growth became the norm in Chilean public discourse.

As with the welfare state developed in Europe under the influence of Keynesian theory, the 'mediatory state' arose [in Chile] from the need to reformulate the dominant coalitions as a result of the process of incorporating the organized popular sectors, who acquired an important degree of influence in the political system through the political parties on the left. These groups, and those that represented the interests of the middle and upper segments of society, competed for shares in the power that 183 the state was able to administer and distribute.

But structuralist critiques about the dynamics of the globalized capitalist economy did not go unchallenged. On the contrary, ideological differences in approaches to economic policy became more pronounced. Similar to political arguments that were vetted through either "Western" or "Soviet" interpretations of democracy, discussions about economic issues were tied to ideological assumptions about the relations of ruling. Economists squaring off as either "monetarists" promoting classical, liberal economic theory and emphasizing the importance of increasing production through economic efficiency accompanied by minimal government intervention in the economy or "structuralists" promoting dependency theory and emphasizing the importance of issues related to the disadvantage of primary product producing countries vis-a-vis industrialized countries in the global market as well as the distribution of income and other economic resources (on

182Schamis. 1988, 16.

183 Juan Gabriel Valdes. Pinochet's Economists: The Chicago School in Chile. (Cambridge: University of Cambridge Press, 1995), 8. 127

national levels). 184 In many ways structuralist and dependency theory promoted arguments on a global level that mirrored arguments being made by populists on the national level: both asserted that structural elements of economic relations in the capitalist world system created a dynamic in which the rich got richer and the poor would never catch up - without mediation. Predictably, monetarists argued for a small state that did not intervene in market activities, free trade and broad economic liberalism. In contrast, like Keynesians, structuralists argued that State was the only actor capable of organizing resources in order to remedy inherent market flaws found on both national and international levels. Such intervention would, by definition, lead to reduced economic liberalism according to classical liberal definitions. 185

184 Dependency theory argues that developing countries' unequal economic relationship with developed countries as the primary cause for the continue poverty of Third World nations. By extension of the theory, if dependency is to be overcome, a political response must be made, to change the dynamics of the relationship by strengthening the domestic industrial sector. The natural policy outcome of the theory was Import Substitution Industrialization. Wallerstein's world-systems approach is considered as the theoretical heir to dependency theory.

185 This study employs the term "classical liberalism" to define the social paradigm that encompasses individualistic values, free market principles and minimalist government intervention in economic activities. We use the term classical liberalism here because a close reading of adherents to this paradigm reveals that most often call themselves classical liberals or, at times, libertarians or simply liberals. At the same time, in the 1970s the term "neoliberalism" gained popularity as a term to describe the economic policies associated with classical liberalism (other terms such as "monetarism," "neoclassicism," "neo-conservatism" and ''the Washington Consensus" have been used). In a paper written for the 2006 meeting of the American Political Science Association Boas and Gans-Morse trace the origins of the term "neoliberalism" (also called "ordoliberalism") to post-war Germany where is was used by Freiburg School "to denote a philosophy that was specifically moderate in comparison to classical liberalism and other contemporary liberal movements." (p. 3). For Freiburg neoliberals, the role of the State is to create a legal structure conducive that will encourage a healthy market economy rooted in competition. Although Boas and Gans-Morse note that early Freiburg neoliberals distinguished themselves from "supporters of a more traditional form of liberalism, such as the Austrian economists Friedrick Hayek and Ludwig von Mises" they also acknowledge that the "boundaries of the neoliberal school were not always entirely clear; Hayek, for instance, was a regular contributor to the neoliberals' journal Ordo even though he clung to more classical beliefs" (p. 22). In addition, Ludwig Erhard, first West German Minister of Economics, member of Hayek's Mont Pelerin Society and apparent inspiration for Chile's Chicago Boys identified himself as a Freiburg School neoliberal. Finally, it should be noted that, after leaving the University of Chicago where he was a professor on the Committee on Social Thought, Hayek became a professor at the University ofFreiburg in 1962 until his retirement in 1968. 128

This debate was especially intense in the late 1950s and early 1960s, until structuralism ... carried the day. Monetarist thinking was later identified with the orthodox economics championed by the IMF and with the [multi-national corporations] and the governments of most industrialized nations ..... The monetarist solution [for reducing inflation and promoting economic growth] was to return to a free market system by increasing the economic role of the private sector and reducing government intervention. . .. Neoliberalism ... is the progeny of modernism and monetarism." 186

At the same time as economic structures were ceding decision-making power to the State for redistributive purposes, Chile was developing a multiparty system in which socialist and communist parties, advocating for redistribution of economic wealth, squared off with equally strong conservative parties advocating for strong property rights, with centrist parties acting as a buffer, in the context of expanding political liberalism. Conservative interests, representing a clear minority of the population, maintained their influence by blocking efforts to redefine parliamentary districting to reflect new demographic trends. From the 1930s, Chile's broad spectrum of political parties coalesced around the three discemable poles of left, right and center. In this multi-party context the succession of Chile's presidents would patch together shifting coalitions representing various interests in order to create and move policy initiatives through Parliament. The continued trend of expanding rights for subordinate men served to increase the influence of progressive parties throughout the 1940s and 1950s as they sought to use their political influence to redistribute economic resources toward their constituents. The popularity of Marxist ideology, and especially the Communist party (with its Soviet ties), were particularly worrisome

186 Atkins, 347. 129

for traditional elites, both home and abroad, resulting m a clamping down on communist party activity .187

Chile's economy was especially vulnerable to US influence because of its extensive integration with the United States through banking, private business and military sectors: U.S. investors in the mining industry had replaced British investors in the nitrate industry in the early 20th century.

Direct U.S. investments grew by 80 per cent from 1940 to 1960, the vast majority of this foreign capital going to the mining sector. Overwhelmingly controlled by U.S. companies from the 1920s to the 1960s, copper came to account for some 50 per cent of Chilean exports, copper and nitrates nearly 80 per cent. Not only was the United States the leading foreign investor in Chile; it also regained its position as Chile's premier trading partner after a spurt of German competition in the 1930s. Chile consistently relied on the United States for manufactured consumer goods and, increasingly after the Second World War, for food and capital goods. 188

Chile was also highly dependent upon the United States for loans for industrial development, both directly, and because of US influence at the International Monetary

Fund and the Inter-American Development Bank. Further, the majority of Chile's hard currency earnings came through its export of copper. The largest producers of copper were two American-owned companies, Anaconda and Kennocott, whose production had extensive influence over Chile's economic well-being:

187Perhaps it was this concern about Marxist ideology that led the U.S. Government to solicit bids in 1964 through American University's Special Operations Research Office for "Project Camelot" described as "a study whose objective is to determine the feasibility of developing a general social systems model which would make it possible to predict and influence politically significant aspects of social change in the developing nations of the world." Its primary objectives were to design a way of assessing "the potential for internal war within national societies" and "to identify with increased degrees of confidence those actions which a government might take to relieve conditions which are assessed as giving rise to a potential for internal war." Early on Chile has been identified as a possible site for the project, with preliminary assessments being carried out by the project Director Rex Hooper and Hugo Nuttini, a naturalized US citizen originally from Chile. Plans to implement Project Camelot were allegedly cancelled after they became publicly known. For further information, see Irving Louis Horotwitz, editor. The Rise and Fall of Project Camelot: Studies in the Relationship Between Social Science and Practical Politics. Cambridge MA: The M.I.T. Press, 1967.

188Leslie Bethell, editor. The Cambridge History ofLatin America, Volume III: Latin America since 1930. (New York: Cambridge University Press, 1991), 269-270. 130

No domestic decision about the rate of economic development, the strength of the balance of payments the level of aggregate employment, the breadth of social welfare programs could be made without a careful calculation ... of how the foreign copper companies might exercise their discretionary power. 189

Clearly concerned about its waning ideological influence, the U.S.

International Cooperation Administration190 authorized "The Chile Project" in 1956, a participant training program implemented under a contract between the University of

Chicago and the ICA (and a corollary agreement with the Catholic University in

Chile) to provide graduate level training to young Chileans in classical economic theory at the University of Chicago. Over 150 Chileans, later known as the "Chicago

Boys" benefited from this project whose primary goal was "to train a corps of Chilean economists in research with the hope that this corps would become the foundation of continuing economic research by Chileans on the economic problems of Chile."191

But the fact that this was a non-competed contract issued to a university known for its neoclassical (free trade/monetarist) perspective reveals its underlying ideological goal of countering the influence of ECLA's structuralist arguments and increasing the influence of the United States in Chile. 192

While traditional leftist political parties counted upon trade unions for support, by the mid-l 960s Chile's center had shifted its allegiance from the Radical party to the

189Jacqueline F. Roddick. "Class Structure and Class Politics in Chile." Allende's Chile. (New York: Praeger, 1976), 6-7.

190 The ICA was founded in 1954 to provide foreign aid as a precursor to the US Agency for International Development, which was founded in 1961 by President Kennedy.

19"'The Chile Project: First Report to the Catholic University of Chile and the International Cooperation Administration" from the University of Chicago, Department of Economics, July 20, 1956. USAID archives, reference: CL 378.83, C532 181 July1956, 9-10.

192 In chapter 3 of his book Valdes clearly describes how the University of Chicago was consciously chosen, because of the classical liberal leanings of its economics department. 131

new, moderately reformist Christian Democratic Party that made promises of capitalist modernization based on progressive Catholic cultural norms rooted in the Church's social justice work of prior decades. "This movement combined a technocratic elite with the socially expanded meaning of Christian thought to offer an alternative to a

Right that appeared too attached to its privileges and a Left still unable to break out of its class-based identity and its self-concept as a reflection of the Socialists' experiences." 193

In 1964, Christian Democrat Eduardo Frei was elected president on a

"communitarian" platform offered as a moderate alternative to socialism and addressing leftist criticisms of global and national level economic structures through policies that combined property redistribution, state-led growth and domestic control of national resources. 194 In recognition of Chile's vulnerability to international economic forces (and the implicit dependency relationship), Eduardo Frei (like

Balmaceda before) initiated a policy of "Chileanization" whereby the government would purchase 51 per cent ownership of local copper mines, giving the government public control over production and sales. Chileanization was intended to bring copper production (and profits) under Chilean control; the policy "was widely criticized for offering too generous terms of purchase and for leaving the management of the mines

and of new government investments, entirely in American hands."195 The Frei

193Manuel Antonio Garret6n. The Chilean Political Process. (Boston: Unwin Hyman Press, 1989), 13.

194 Roddick, 7

195 Roddick, 5. 132

Administration also initiated public works and land reform programs that distributed land to small farmers and was estimated to have benefited 20,000 families by 1969. 196

However, despite all efforts to promote industrialization, stabilize the cost of living and meet the need for health, education and housing, the State was not simply able to keep up with the demands of expectant members of the working class for greater access to economic resources. At the same time the Frei government's public discourse reflected "a moral will of transformation of social structures which would threaten the most deeply rooted value of the right: the sanctity of private property,"197 alarming the propertied class, whose worst fear (that they would lose their property) loomed before them once again.

There were other signs beyond progressive Catholicism that suggested that public discourse about Chile's culture was becoming more inclusive. For example,

Paulo Freire, who had moved to Chile after he was forced into exile from his native

Brazil in 1964, began testing his innovative methodology for teaching literacy and critical thinking skills together. Awkwardly translated as "conscientization,"198

Freire's teaching methodology challenged the established relations of ruling by

bringing to the ballot box literate voters who were trained to engage in independent

analysis about personal experience, drawing upon truths emanating from local

actualities rather than officially-sanctioned discourse. In 1967 he published his first

196Keith Griffin. Underdevelopment in Spanish America. (London: Redwood Press Ltd., 1969), 83. James Petras and Fernando Leiva. Democracy and Poverty in Chile: The Limits to Electoral Politics. (Boulder, CO: Westview Press, 1994), 2.

197 Valdes, p. 208.

198 An alternative translation might be "awareness-building." 133

book, Education as the Practice of Freedom while living in Chile. His most famous book Pedagogy of the Oppressed, was published in 1970 soon after his involvement with the Chilean agricultural workers ended. 199

In the meantime, the Catholic Church continued to refine its articulation of a progressive social doctrine replete with themes of "social justice" and economic, social and cultural rights.2° 0 In April 1963 Pope John XXIII published his encyclical

Pacem in Terres which praised the UN Declaration of Human Rights, stating "it is our earnest wish that the day may come when every human begin may find therein an effective safeguard for the rights which derive directly from his dignity as a person, and which are, therefore, universal, inviolable, and inalienable."201 Two years later, at the conclusion of the Vatican II Council in 1965 the Catholic Church declared its desire "to make a significant contribution back to the world by providing everyday human activity with a deeper meaning and by promoting the dignity and rights of all people and the common interests of humanity"202 Vatican II led to the meeting of 150

Latin American bishops met m Medellin, Colombia, to condemn the

"'institutionalized violence' of the status quo, placing responsibility squarely on the shoulders of those with the "greater share of wealth and power' who 'jealously retain

199 http:/!portal. unesco .org/ education/en/ ev. php- URL TD= l l 8 l 9&URL DO=DO TOPJC&URL SECTION=20 l .html

200Dykmann informs us that economic, social and cultural rights were first articulated in the modem age in the early 20th century during the Mexican and Russian Revolutions. See p. 11.

201 Quoted in: Louis Colonnese. Human Rights and the Liberation of Man in the Americas. (Notre Dame: University of Notre Dame Press, 1970), xxv.

202Brian H. Smith. The Church and Politics in Chile: Challenges to Modern Catholicism. (Princeton, NJ: Princeton University Press, 1982), 17. 134

their privileges thus provoking 'explosive revolutions of despair'." Through this pronouncement the bishops declared their intentions

'to educate the Christian conscience' in matters of social responsibilities, 'to denounce everything which, opposing justice, destroys peace,' "to defend the rights of the poor and oppressed," and "to encourage and favor efforts of the people to create and develop their own grass-roots organizations for the consolidation of their n"gh ts. 203

To be sure, not all Catholics were drawn to these new teachings: many upper and middle class Chileans had become disillusioned with the inability of moderates to

stem the rising influence of what they saw as Marxist-inspired ideas. These

disaffected groups found solace in the more elitist or traditional Catholic doctrine first found in Integralism in the 1950s and then in other groups such as the university-based

Gremialist Movement led by Jaime Guzman, and, later, the secretive Opus Dei that

sought recruits among professional and business sectors and demanded high levels of

unquestioned obedience to its traditional-conservative interpretation of Church

doctrine. 204

On a parallel plane, one large sector of the adult population that had been

excluded from the body politic up until the mid-20th century - women - would soon be offered the vote, doubling the potential number of voters participating in any national election. 205 Similar to the experience of lower class workers in the late 19th

203 Progressive Catholic thinking was reconfirmed in 1979 by 187 Latin American bishops at Puebla, Mexico who "denounced authoritarian regimes on their continent which use illegitimate concepts of national security to justify 'assassinations, disappearances, arbitrary imprisonment, acts of terrorism, kidnappings and acts of torture." (Smith, p. 19) These precepts served as the basis of liberation theology and the rise of the Christian base community movement across Latin America in the 1970s.

204 Smith (1982), 139-140

205 Women's rights activists had been active in Chile since the beginning of the 20th century. Women had been granted the right to vote in municipal elections in 1934 and in national elections in 135

century, male consideration of women's suffrage became intimately intertwined with attempts to control shifts in the balance of power among elites. While the

Conservative Party, allied with the Catholic Church, favored extending voting rights to women, the anti-clerical Liberal and Radical Parties were opposed to it. As with working class men in the previous century, Conservatives had become adept at organizing women to protect "home, family and country" early on. Middle and upper- class women rallied around religious issues and in support of traditional values, reflecting their longstanding ties with conservative elements in the Church.206 Under the auspices of the church these well intentioned women had been founding "Mother's

Centers" since the 1930s, providing some material assistance and training to lower class women while promoting cultural norms reflecting traditional values. As a group,

Chilean women generally tended to have more conservative voting tendencies. This tendency could be confirmed since men and women had voted in separate polling places since women were give the right to vote in local elections.207 As elsewhere, women who did become politically active reflected their subordinate status by focusing on issues related to reproductive work such as education, health, "public morality" and other family related issues or by publicly supporting the political

1949, three years before the presidential elections that brought conservative Carlos Ibanez to power - with 43 per cent of the women's votes (compared with 32 and 20 per cent respectively for the runners up). See Baldez, 28.

206Elsa Chaney. Supermadre: Women in Politics in Latin America. (Austin: University of Texas Press, 1979), 26.

207Michael Francis. The Allende Victory: An Analogy of the 1970 Chilean Presidential Election. (Tucson, University of Arizona Press, 1973), 64. This well-known trend helps to explain why the Conservative Party advocated for voting rights for women (similar to their decision advocate for suffrage for lower class men in the 19th century, as described above). 136

ambitions of a male member of her family. 208 In the 1950s the social activism of the

Catholic Church and the political activism of the Christian Democrat Party combined to transform the Mothers Centers from a charitable organization to a source of economic independence by providing poor women with low-cost sewing machines as well as training that would help them create and sell clothes and handicrafts.

Nevertheless, Chaney argues that, even up to the early 1970s, the feminist movement in Chile remained on the fringes of party politics and feminist concerns were not incorporated into progressive political platforms. This vacuum created an opportunity for more conservative elements in society to influence the thinking of many women about causes of and solutions for problems they experienced in their daily lives and, as we shall see, made the Allende regime vulnerable to the disaffection of approximately half of Chile's adult population.

The Mapuches had also began to advocate for their interests during this period of political and intellectual liberalization by proposing a new law addressing issues related to land and their need for greater access to economic resources. Garnering support from political parties, the Mapuches mobilized between 1969 and 1972 to take over lands no longer under their control, but over which they claimed historical rights to ownership. Finally, in a bittersweet twist of fate, "the Chilean Congress passed a new indigenous law in 1972 that reflected many of the demands of Mapuche organizations," but the 1973 coup prevented its implementation.209

208Chaney, Elsa. Supermadre: Women in Politics in Latin America. (Austin: University of Texas Press, 1979), 21.

209Diane Haughney. Neoliberal Economics, Democratic Transition and Mapuche Demands for Rights in Chile. (Gainesville: University of Florida Press, 2006), 6. 137

In this context of liberalization during the 1960s public discourse in Chile was becoming increasingly polarized around divergent political poles. While the conservative minority promoting economic liberalism and conservative social doctrines, while progressive Catholics, socialists and other moderates advocating for state intervention in the economy and communists calling for a more far-reaching redistributive program, all under the intellectual rubric of political liberalism. This split is poignantly expressed in the results of the 1970 election, which Salvador

Allende won with a plurality of 36.6% of the votes.210 In Allende's initial message to

Congress, the new president revealed his plan to create a popular assembly that would strengthen the voice of working classes in national political life and "destroy the legal basis of capitalism" through constitutional amendment,211 proclaiming that

The Chilean people have achieved the political maturity to decide, by majority rule, to replace the capitalist economic system with the socialist system. Our political structure is made up of institutions which are sufficiently open to accommodate this revolutionary desire without violent tremors. 212

President Allende's critique of Chile's established relations of ruling governing productive work was both straightforward and a cause for alarm for property-owners, both national and international. First, echoing earlier political leaders, Allende argued

210Jorge Alessandri, the conservative candidate received 35.27% of votes while the moderate, Christian Democratic Party candidate Radomiro Tomic received 28.11 % of votes. Since no candidate received an absolute majority of votes, Chile's Congress was required to decide between Allende and Allesandri, under the terms of the 1925 Constitution. On October 24, 1970 Congress elected Allende as Chile's president. Rojas Sanford contends that "in the pluralistic system that existed in Chile until September 11, 1973, this relative minority was not a sign of illegitimacy but rather a measure of backing or rejection of a constitutional action" and cites similar results in the 1958 and 1964 presidential elections. (p. 223, footnote 4).

211"Chile: Allende's Rise and Fall" Available from http://historicaltextarchive.com/sections.php?op=viewarticle&artid=671, 5.

212Hugo Latorre Cabal. El Pensamiento de Salvador Allende. (Mexico: Fondo de Cultura Economico, 1974), 34. 138

that Chilean industrial development was stagnate because its production and profits only benefited a minority of the population instead of providing for the basic needs of the majority. Allende's solution was to redistribute income to stimulate industries that produced simpler consumer goods for the lower income groups. Second, protective economic policies, combined with liberal price adjustment regulations had led to an industrial system that was monopolistic rather than competitive. His solution was state intervention to break this control. Third, Allende argued that Chile was overly dependent upon foreign companies, which wielded broad control over the country's basic natural resources and the most technologically advanced segments of industry.

His solution was to take Frei's Chileanization policy even further by nationalizing important economic sectors, including the copper industry and banking sectors.213

Fourth, Allende argued that Frei's agrarian reform did not correct endemic problems in the agricultural sector (low capitalization and technological inputs, low production, large landholdings, and the exploitation marginality of the peasants.); Allende promised to further redistribute land to poor farmers. 214 In sum, Allende's policy prescriptions could be interpreted as extensions of the programs begun under Frei's reformist government.215 Using revolutionary rhetoric he promised to upset social structures by taking economic and political power away from foreign corporations and national elites and placing it in the hands of the Chilean working classes. (Figure 15)

213 Prior to November 1970, Chile had 26 private banks, of which eight were foreign-owned.

214Thomas G. Sanders. Allende's First Months. (Hanover, NH: American Universities Field Staff, 1971 ), 3.

215 Sanders, 4-5. 139

Figure 15: Ideological Influences in Allende's Chile

National Party (merger of Conservative and Liberal Parties)

Monetarism and the "Chicago Boys"

,·-·-·-·-·-·-·-·-·-·-·1 Radical Party (UP) · Traditional · II II ! Authoritarianism ! I. .I 1.-·-·-·-·-·-·-·-·-·-·~ Christian Democratic Party (UP) ''Communitarianism'' Movimiento de la Izquierida / Movimiento de Acci6n Popular Unitario (MAPU) Revolucionaria (MIR) Liberation Theology Independent . Popular Action Paulo Fre1re's Pedagogy of the Oppressed (UP) Communist Pafo// (UP) // Structuralism/Dependency Theory

/ / 1925 Constitution / Allende's Socialist Party (UP) / / / / / /

The National Party was formed in 1966 when the Conservative and Liberal Parties merged in opposition to the Christian Democrats. The Unidad Popular/ Popular Unity Party (UP) was formed as a coalition of numerous progressive parties under Salvador Allende's leadership. Although the Christian Democrats were initially a part of the UP coalition, their support of Allende vacillated until they finally sided with the anti­ Allende camp shortly before the coup occurred. In the meantime, political groups and cultural influences articulated a broad array of ideologies vying for dominance.

Allende's initial challenge was to unite his political support, which was built upon a coalition with a traditional political base of unionized workers.2 16 Allende's 140

hope had been to broaden his political base to include the middle class by improving their standards of living through State-led efforts to redistribute income and subsidy basic necessities217 reminiscent of Keynesian policy prescriptions. Indeed, although he was denounced as a communist threat for his populist plans, Allende's long term strategy was to divide the economy into three sectors: nationalized industry, a mixed sector, and the private sector,218 similar to a socialist or social democrat platform.

To be sure, many of his critics, including the Movimiento de la lzquierda

Revolucionaria (MIR)2 19 charged that Allende's policies did not go far enough and criticized the UP coalition for failing to incorporate broad sectors of society into their agenda, thus remaining dependent upon support from the traditional source of unionized labor.220

As in earlier times, women were not incorporated as active members by political progressives in socially conservative Chile. Instead, women's self-perception and sense of social identity was most influenced by traditional discourse that assigned women to reproductive work as mother and wife. Interestingly enough, Allende himself reinforced this view in his speeches: "When I say 'woman', I always think of

216The Popular Unity coalition was an alliance among several parties: the Socialist party (chaired by Allende), the Communist Party, the Radical Party, the Social Democrats, the Movement of Unitary Popular Action (MAPU) and the Independent Popular Action (API).

217Garreton, 27.

218Regis Debray. The Chilean Revolution: Conversations with Allende. (New York: Praeger, 1971), 85. 219MIR or "Movement of the Revolutionary Left," founded in 1965, advocated for active resistance against the government. Many of its leaders, including Salvador Allende's nephew, Andres Pascal Allende, had close ties to Cuba.

220Monica Threlfall. "Shantytown Dwellers and Peoples' Power." Allende's Chile. Philip O'Brien, editor. (New York: Praeger, 1976), 189. 141

the woman-mother. . . . I refer to her in her function in the nuclear family .... The child is the prolongation of the woman who in essence is born to be a mother."221

Living under the rubric of a unified public discourse that devalued female participation in negotiations about the relations of ruling, women were less likely to be politically active. In everyday life, this meant that women were less likely to understand of the UP' s policy goals - even if their husbands or fathers were Allende supporters. The outcome of this intentional exclusion of women was inevitable: as their social role (caring for the day to day lives of their families) became more difficult in the context of increasing economic instability, a majority of women naturally interpreted the increasing hardship they experienced through an analytical framework inspired by traditional norms and values. Thus women, isolated in their endeavors to carry out their domestic roles in a society where consumer goods were becoming scarcer and the structure of the economy increasingly fragile, became susceptible to influence by textually-mediated discourse disseminated by Allende's opponents.

Documents available today confirm that much of the opposition's psychological campaign to delegitimize Allende was both financed in large part by the U.S. Central

Intelligence Agency and was specifically aimed at women, including media campaigns via the radio and newspaper advertisements that blamed Allende's policy on the economic displacement that was occurring.222 Investigative journalist Marlise Simons also suggests that Brazilian sympathizers helped Allende's opponents create an

221Chaney, 269.

222Samuel Chavkin. The Murder ofChile. (New York: Everest House, 1982), 49. 142

oppositional women's movement. In describing her interview with a prominent

Brazilian anti-communist businessman Simons wrote:

Glycon de Paiva takes particular pride in the way 'we taught the Chileans how to use their women against the Marxists. We ourselves created a large and successful women's movement, the Campaign of Women for Democracy, Chile copied it. ' ... To De Paiva, therefore, it is no coincidence that 10 days before the 1964 Brazilian coup, thousands of women marched through the streets of Sao Paulo - and that 5 days before [the Chilean coup] Poder Femenino held its largest rally ever.223

Simons writes that "both in Chile and Brazil, De Paiva points out, women were the most directly affected by leftists economic polices which create shortages in the

shops."224 What ensued was predictable under these circumstances. The plight of women endeavoring to fulfill their prescribed social role of caring for their families within the context of a disintegrating economy, the lack of a real attempt on the part of the UP to include women in their movement to alter Chile's relations of ruling, the early ideological grooming of women through the Mothers' Centers, the failure of the

UP' s economic and political programs to redistribute income in a stable environment

and the increasing difficulty in carrying out day to day life all created the perfect

opportunity to transform women into an· anti-Allende force. This was accomplished

by the courting of women by Conservatives with issues and positions that easily resonated with their normative framework, the barrage of misinformation and

distortions in the media of what popular Unity's intentions were, as well as an

increasing difficulty for women to carry out daily responsibilities. In the end, Chilean

women responded to the focused message of alarmed Conservatives and entered into

223 Marlise Simons. 1974. "The Brazilian Connection" in The Washington Post, (January 6) B-3.

224 Simons, B-3. 143

public discourse they way that groups excluded from political processes most often do

- they took to the streets in public opposition to the Allende regime.

In December 1971, 5,000 women, mainly from the wealthy part of Santiago, marched through Santiago banging cooking pots, and saucepan lids in protest against so-called food shortages. This was the first mass demonstration by the opposition since Allende had taken power, and it bore a striking resemblance to the mass march of women in Sao Paulo shortly before the military coup in Brazil. This march marked the beginning of a unified right-wing campaign of openly mobilizing the opposition against UP. 225

The most debilitating of the opposition's attacks on the UP government's economic policies was the truckers' strike of October, 1972, begun purportedly because of the government's proposal to establish a state transport system in part of southern Chile. The truckers were later joined by professionals and shopkeepers, the whole effect of which was to exacerbate the shortages already experienced and making normal economic activity difficult, if not impossible.

As things were, business nervousness increased, paralyzing private investment and causing many conflicts with particular firms, who used the press and the commercial radio to lambaste the real or alleged efforts of the government to nationalize them. 226

Opposition forces organized themselves in gremios, small but powerful associations of large landowners, industrialists, construction contractors and large retailers, associations of small entrepreneurs and professional associations for doctors, lawyers, engineers, etc., which fostered a sense of common interests between small businessmen and professionals and members of the economic elite. Meanwhile, in

Parliament, the Christian Democrats and Radical Democrats worked in allegiance with the conservative National Party, forming a coalition that worked together to block

225 Philip J. O'Brien. "Was the U.S. Responsible for the Chilean Coup?" Allende's Chile. (New York: Praeger, 1976), 238.

226 Alec Nove. "The Political Economy of the Allende Regime." Allende's Chile. (Philip O'Brien, editor. New York: Praeger, 1976), 56. 144

legislation important to Allende and his UP coalition. Rojas Sanford concludes that by March 1973 there existed a "deadlock" between Allende and the Parliament, creating an impasse between pro and anti Allendist forces, making unlikely the probability that the country's political and economic woes would be solved by political negotiation. 227

As economic life became increasingly unstable, with food shortages and hyperinflation, women were again visibly protesting the UP government in the March,

1972 "March for Liberty," the difference being that these women were notably members of the working class.228 As Elena Larrain of the conservative Poder

Femenino (Feminine Power) explained: women became active "to recover the lost values, the life of home and tranquility; to extinguish the tensions that destroy families; so that the struggle for subsistence may not be so rough."229

In the end, Allende's dependence upon improved living standards for the lower classes proved to be his Achilles' heel: actions to disrupt economic well being had the potential of alienating his expectant supporters; which, as we know, was precisely the plan implemented by national and international actors whose interests were threatened by Allende's populist policies.230 Indeed, Schamis observes that the policies that

227 Rojas Sandford, 249, footnote 12. Tomas Hirsch, head of Chile's Humanist political party, confirmed this impasse between the Left and Right in the ideologically-loaded environment found in Allende's Chile in a conversation that took place on March 10, 2008 in Santiago, Chile. 228 Roddick, 14.

229 Quoted in Steve J Stem. Battling for Hearts and Minds: Memory Struggles in Pinochet's Chile, 1963-1988. Durham: Duke University Press, 2006, 63.

230 This plan is well documented in the Senate report Covert Action In Chile published in 1975 under which economic pressure was exerted by the U.S. government by cutting off bilateral and multilateral loans while encouraging private sector actors (in the United States and elsewhere) to restrict trade with Chile after Allende assumed office, all in a concerted effort to disrupt the national economy. 145

Allende implemented reduced the his government's ability to secure a multi-class base of support: "As a result of ambitious nationalization and expropriation programs, most propertied groups - landowners, industrialists, middle classes - came together against the UP government."231 On September 11, 1973 the Chilean military staged a coup d'etat, stopping the process of political liberalization and economic restructuring, by taking control of the presidency and declaring the legislative bodies in recess -- in defense of Western, Christian civilization.

Upon seizing power, Chilean military officers suspended the constitution, captured the presidency, usurped the government's judiciary powers (Decree Law 1) and dismissed the legislature (Decree Law No. 27). The military employed coercive force to both "extirpate" any remaining vestiges of Marxism (Decree Law 77) as well as to extinguish and to repress any resistance to the imposition of its social order. A report issued by the CIA dated September 21, 1973 reads, in part, as follows:

The prevailing mood among the Chilean military is to use the current opportunity to stamp out all vestiges of communism in Chile for good. Severe repression is planned. The military is rounding up large numbers of people, including students and leftists of all descriptions, and interning them. . .. There is no indication whatever [sic] that the military plans any early relinquishment of full political power in Chile.232

The military junta outlawed political activities and suspended leftist political parties (Decree Law 27), and then proceeded to consolidate all authority under the junta over the first few months of its reign. Twelve days after the coup Chile's largest

1 labor union, CUT, was declared illegal. On September 27 h, the government

231Hector Schamis. Reforming the State: The Politics ofPrivatization in Latin America and Europe. (Ann Arbor, Michigan: University of Michigan Press, 2002), 53.

232Central Intelligence Agency. Report. 21 September 1973. Available at www.foia.state.gov, 4-5. 146

suspended all remaining political parties. On September 29th, the universities were brought under military control as administrators and professors were replaced. On

November 10th Chile's Constitutional Court was dissolved.233 Leaders of important national civil society institutions, such as labor unions, political parties, schools, churches and the media, were persecuted, under charges that these institutions had been infiltrated by "domestic enemies." Strikes were prohibited, unions were dissolved, and neighborhood organizations dismantled. The counter-revolution had begun.

233 Blaustein and Flanz, xvi. CHAPTER 7

A BREACH IN THE CONSTITUTIONAL ORDER

[!Jn 1970 a majority of members of Congress appointed a Marxist - a self admitted one - as President ofChile in spite of- or might it not be because op - our 150 years of democratic traditions. I admit I am not personally clear on the subject. But once that culminating stage was reached, conditions became so overwhelming disastrous, that we were no longer free to choose: after forty years of socialist recklessness only one road remained open to us - "Friedmanism" - always provided that we had a government strong and courageous enough to establish it ... Chile has regained her liberal traditions and therefore come closer to the spirit of Mont Pelerin. And looking back, to our Spanish ancestors, to the years of the British Empire, and to those ofthe creative American spirit (recently much dimmed by their particular brand of 'liberalism'), and finally to the Soviet imperialism ofwhich we had a taste, and not forgetting our occasional earthquakes and tidal waves, we Chileans can perhaps take pride in being a nation ofsurvivors - hopefully, of experienced survivors. " Excerpts from opening remarks by Pedro Ibanez at the regional meeting of the Mont Pelerin Society at Vina de/ Mar, Chile, Nov 15 -19, 1981. 235

Surely this will be my last opportunity to address you ... My words are not spoken in bitterness ... I shall pay with my life for the loyalty of the people. ... The seed we have planted in the worthy consciousness of thousands upon thousands of Chileans cannot forever remain unharvested .. They have the might and can enslave us, but they cannot halt the world's social progresses, not with crimes, nor with guns. History is ours, and the people ofthe world will determine it. Excerpt from Salvador Allende's final radio address on September 11, 1973236

While a sizeable portion of the population mourned the abrupt end to Allende's project to transform Chile into a society guided by socialist ideology, others breathed a sigh of relief that order could now be restored, and still others rejoiced that the country had been "saved" from communism. Regardless of one's stance vis-a-vis Allende's vision, it is clear that very few foresaw the shocking prescription to which the military

235 The phrase "free to choose" is an obvious reference to Milton Friedman's book by the same name.

236 Quoted in Lois Oppenheim. Politics in Chile: Democracy, Authoritarianism, and the Search for Development. (Boulder, CO: Westview Press, 1993), 3. 147 148

would subject Chile, ostensibly in order to "save" Chile. Although Pinochet's goal of overthrowing the Allende government is obvious, destroying the old order was only half of the story. A U.S. State Department report dated October 14, 1975, reads in part:

After two years in power, the nature of the new society which Chile's military leaders are attempting to build is now clear. It arises from their concept of broadly defined 'national security' with ramifications in the domestic as well as the international sector. They believe that traditional Western democracy cannot cope with the challenge of 'Marxism' or with the economic and technological problems of the modem world. By their own definition, they therefore seek to build an authoritarian state that can withstand the Marxist offense and assure Chile's efficient government and development. This system bears little resemblance to Chile's traditional representative pluralistic democracy. During the past year the military have made substantial progress toward better defining and achieving their goal, and they are beginning to sink the roots of their new system deep into the society. While we do believe that most Chileans would not prefer a return to the pre-coup situation, neither is there reason to believe that they necessarily approve entirely of the present trend. 236

Three years later, in Paraguay, hard-liner General Gustavo Leigh Guzman describes the junta's understanding of its mission at the opening of the III Congress of the Latin American Anti-Communist Confederation (CAL) in March 1977:

The Government of Chile and the overwhelming sentiment of its people have definitively rejected national and international communism, as well as their obedient servants and the weak, who out of fear or interest, have in cowardice permitted its coming. . .. For no one is the sentiment of rejection, and everything that means, so clear as for those who have had the occasion of suffering this [experience]. As a consequence, our anti-communism, as well as being conceptual, has visceral characteristics, which is profoundly immersed in our own beings, our anti­ communism is the natural and profound rejection of an enemy whose perversity, amorality and violence we have felt in our own flesh. . .. 237

236U.S. Department of State. "Chile's Government after Two Years: Political Appraisal." 14 October 1975. Available at www.foia.state.gov, 1.

237 "Discurso de! General Gustavo Leigh Guzman, Comandante de la Fuerza Aerea y Miembro de la Junta de Gobiemo de Chile, en la Apertura del III Congreso de la C.A.L." 94 F 0021 149

While the Chilean military's strong anti-communist stance is rooted in early

Prussian influence,238 it was nurtured in the mid-20th century under the logic of a national security ideology taught at officer-training institutions set up by the United

States, and nurtured through ongoing links between Latin American and U.S. militaries. Coinciding with Higgins, Garreton observes that these linkages were established around the time of World War II, when the US initiated efforts to create a system of hemispheric defense against Soviet influence. 239 A 1969 State Department assessment of the Chilean military states that

relations between the Chilean Armed Forces and the U.S. military are excellent and reflect the close ties maintained through the activities of our three training missions in the country and the long-standing training programs in Panama and the United States.240

Within the southern hemisphere itself, evidence suggests that Gilberto Cuoto and other instructors at the Esco/a Superior da Guerra in Brazil (which had been a primary focus of US military training and where an anti-communist coup had occurred in 1964) also wielded ideological influence over their Spanish-speaking peers, under an interpretation of the national security doctrine that reflected the realities of

Brazilian social hierarchy. In this South American articulation of national security

238 Captain Emil Komer had been contracted in 1885 to modernize the Chilean military educational system. After the civil war of 1891 Komer was named as chief of staff of the Chilean army, a position he held until 1910.

239 Garreton, 73.

24°u.S. Department of State. "Role of the Military in Latin America." 1 September 1969. available at www.foia.state.gov, p. 15. The School of the Americas (SOA) was founded in the mid- 1940's in Panama in order to teach combat tactics and strategies to Latin American military, In 1984, SOA moved to Fort Benning, Georgia and in 2000 it was renamed the Western Hemisphere Institute for Security Cooperation (WHINSEC). Since its founding the SOA/WHINSEC has trained over 60,000 Latin American soldiers, many of whom have been implicated in human rights abuses and crimes against humanity. 150

doctrine "the military came to define its mission primarily in terms of dealing with threats to internal security ... " especially after Castro's guerrilla forces overthrew the

Cuban dictatorship in 1959.241 Separately, journalist Simons' investigations suggest that Brazil's 1964 coup served as a model for Chile in 1973. In an interview, prominent Brazilian anti-communist businessman Glycon de Paiva told her

'After Allende took over, Chilean businessmen came here and asked for advice. explained how they, the civilians, had to prepare the ground for the military to move.' ... 'The recipe exists and you can bake the cake anytime .... ' Dr. De Paiva's 'recipe' involves creating political and economic chaos, fomenting discontent and deep fear of communism among employers and employees, blocking legislative efforts of the left, organizing mass demonstrations and rallies, even acts of terrorism, ifnecessary.242

Dykmann asserts that "military regimes in Peru (1968), Ecuador (1972), Chile

(1973), Uruguay (1973), andArgentina (1976) all followed the Brazilian example."243

This worldview that saw the military's role of protecting the "homeland" from the invasion of ideas that threatened political stability is clearly evident in the words of

Chilean Coronel Manuel Contreras in the letter he wrote in November 1975 to the heads of the security forces of Brazil, Paraguay, Uruguay and Argentina to invite them to form "Operation Condor."

The Subversion from some years ago is found present in our Continent, assisted by political-economic conceptions that are fundamentally contrary to History, to Philosophy, to Religion and the very customs of the countries of our Hemisphere. This described situation does not recognize Borders or Countries and the infiltration penetrates all levels of National Life .... To face this Psycho-political War, we have thought that we should count in the international field not upon a centralized command in its international action, rather, upon an efficient Coordination that

241Alfred Stepan. Authoritarian Brazil: origins. policies. and future. (New Haven, Yale University Press, 1973), 50. emphasis added

242Simons, p. B.C. Indeed, Pedro lbafiez may have been one of those businessmen seeking Brazilian advice. In the same articles Simons identified lbafiez as a possible arms smuggler, shipping crates of weapons from Brazil to Chile under the label of "'agricultural products."

243Dykmann, 27-28. 151

permits a timely interchange of information and experiences as well as a certain degree of personal understanding between the Chiefs responsible for Security 244

This visceral rejection of populist ideology by Chile's military leaders translated in everyday life into a harsh policy prescription: severe repression and the torture and murder of perceived enemies of the State and dissidents, regardless whether their weapons were ideas or guns. Under the Pinochet regime anti- communism based on geo-political arguments joined forces with anti-communism based on economic arguments to implement a far-reaching restructuring of Chilean society to reestablish a relations of ruling based on an ideology that summarily rejected all strands of populist aspirations.

244Reference: Paraguayan Archives, 22F 0152-0164 Coronel Manuel Contreras Sepulveda headed the National Intelligence Directorate (DINA) under Pinochet, which was used to locate, detain, imprison, torture and kill ideological opponents to the Pinochet Regime. Orlando Letelier and Ronni Moffit were perhaps the most well-known victims of DINA's activities, when the car that Letelier was driving was blown up on Massachusetts Avenue in Washington DC in September 1976. Although DINA was closed in 1977 in the response to international pressure, it was replaced by a new national level intelligence apparatus, the CNI. Contreras was the force behind the creation of Operation Condor, an international network that coordinated anti-communist efforts by Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay militaries in the mid- l 970s. Although we still know little about Operation Condor, its activities included the use of secret detention centers to interrogate and torture detainees, whose names were shared across the network, and the secret international transport of kidnapped political prisoners, as well as the assassination of exiled leaders, such as Letelier. Contreras is currently in prison in Chile for the crimes of disappearance and murder of Chileans during the dictatorship. CHAPTERS

GLOBALIZED DEMOCRACY, GLOBALIZED ECONOMY

It is conceded within the [International Monetary] Fund now that the emergence in 1983 of the debt crisis as a live-wire issue and the prospect of debt renouncement or forgiveness that had always occurred in the past in a similar world situation led to a fundamental reassessment ofthe Fund's role in the Third World. In this reassessment certain major industrialized member countries determined that the multiple uncertainties arising regarding capacity of the Fund to continue to manage Third World affairs from the perception of the narrow self-interests of these few major shareholders demanded urgent strengthening of the institution as the front for achieving their economic and political objectives in the South. .. . "Monetarism", as currently defined, was the centerpiece of everything; not only did it tie in with the Fund's past operational practice but it expressed in a singularly clear way the doctrine of a continuing Fund absolutism in the Third World so fine-tuned, sharply and uncompromisingly, to a political philosophy of the free market economy and a social creed that would buttress, even more than in the past, the well to do, "westernized" strata ofSouthern society. Davison L. Budhoo in An Open Letter ofResignation ... January l 98

It would seem to be a common-sensical sort of observation that economic policies are conditioned by and at the same time modify the social and political situation where they are put into practice. Economic policies, therefore, are introduced in order to alter social structures. If I dwell on these considerations, therefore, it is because the necessary connection between economic policy and its sociopolitical setting appears to be absent from many analyses of the current situation in Chile. To put it briefly, the violation of human rights, the system of institutionalized brutality, the drastic control and suppression of every form of meaningful dissent is discussed (and often condemned) as a phenomenon only indirectly linked, or indeed entirely unrelated, to the classical unrestrained 'free market' policies that have been enforced by the military junta. ... The economic policies ofthe Chilean junta and its results have to be placed in the context of a wide counter-revolutionary process that aims to restore to a small minority the economic, social and political control it gradually lost over the last thirty years, and particularly in the years ofthe Popular Unity Government. Orlando Letelier The Nation, August 28 1976247

246Davison L. Budhoo. Enough is Enough ... Open Letter of Resignation to the Managing Director ofthe International Monetary Fund (New York: New Horizons Press, 1990), 97.

247Letelier, 137 and 142. 152 153

The International Ideological Context

In October 1973, about a month after Chile's coup, the Organization of

Petroleum Exporting Countries (OPEC) carried out its own coup against the world economy by substantially increasing the price of crude oil (denominated in U.S. dollars) and placing an embargo on oil shipments to countries supporting Israel in the

Yorn Kippur war. Justifications for the price increases were economic: it was an attempt to recuperate revenues lost after Nixon pulled the U.S. out of the Bretton

Woods system of pegged exchange rates in August 1971 and the dollar lost value.

Justifications for the embargo were political: it was to "punish" Western Europe, the

United States and Japan for their support of Israel after Syrian and Egyptian forces attacked that country. The quadrupling of oil prices over the next year gave way to inflation and recession in oil importing countries around the world, including across

Latin America. In response, OPEC countries, now awash in US dollars, invested their profits in the international banking sector - which recirculated those investments as short term loans, many of which were made to Latin American governments looking for relief from the backlash of higher prices and reduced liquidity. As inflation spiraled, the mounting burden of higher debt and spiking interest rates plunged the region into crisis. Finally, in 1982, Mexico shocked the financial world by announcing it could not service its debt. The international financial sector's response was to propose a solution to cash-strapped countries: an exchange of financial liquidity through IMF-loans for "fiscal discipline," that would free up money available for loan repayment through structural adjustment programs. Structural adjustment 154

policies invariably reduced government spending that redistributed resources towards the poor, privatized state assets, strengthened property rights (to encourage investment) and discouraging policies and practices that supported labor rights (and discouraged investment), among other things. Economic liberalism in its unfettered form was on the march in Latin America - and as the years went by, Chile was often held up an example of a country that had successfully swallowed the bitter pill of neoliberalism.

While the international financial institutions set about entrenching economic liberalism as an organizing force in the global economy, international political institutions used their status to infuse public discourse with populist ideas about political liberalism. In 1974 the self-identified "non-aligned" nations professing allegiance neither to the United States nor the Soviet Union used their "majoritarian" influence in the United Nations to pass a resolution calling for the creation of a "new international economic order" (NIEO) that would allocate economic resources more equitably and result in a redistribution of globalized economic resources to developing countries. The NIEO had first been proposed by UN Commission on Trade and

Development - which was now headed by Raul Prebisch, the Argentine whose

arguments about structural impediments had influenced a generation of Latin

American economists.

In the meantime, the Organization of American States (OAS) that had been set

up in 1948 to "strengthen peace and security" while promoting "the effective exercise 155

ofrepresentative democracy" in the Americas,247 assumed the crucial role as protector of human rights as one Latin American country after another succumbed to the repression of dictatorship.248 In 1974 the OAS' Inter-American Commission on

Human Rights (IAHCR) conducted its first fact-finding mission to investigate the human rights situation in Pinochet's Chile. Its subsequent report, was highly critical of the military regime, concluding that "serious human rights violations have occurred" since the regime seized power on September 11, 1973,249 adding another source of international pressure upon the government to adhere to basic human rights standards while raising the profile of the IAHCR as an institution and of human rights as an important issue. In 1976 the OAS focused diplomatic attention on the Chilean human rights situation by including a presentation of the IAHCR's second report on

247 http://www.state.gov/www/background notes/oas 0398 bgn.html

248"Brief History of the Inter-American Human Rights System" found at http://www.cidh.org/what.htm. Soon after it was formed, OAS member states ratified the world's first human rights document, the American Declaration on the Rights and Duties of Man, which preceded the University Declaration by several months. In 1959 the OAS established the Inter-American Commission on Human Rights (IAHCR), whose first responsibilities were to carry out on-site visits to investigate general and specific human rights situations. In 1965 the IACHR was given the added responsibility of holding hearings regarding allegations of human rights violations, which is an ongoing process, although the decisions rendered by the IACHR are not legally binding. The Inter-American Court of Human Rights was created in 1979 as a second body comprising the Inter-American System for the protection of human rights and does emit binding judgments regarding the relatively small number of cases brought before it.

249 Report on the Status of Human Rights in Chile: Findings of "on the spot" observations in the Republic of Chile July 22 August 2, 1974. http://www.cidh.oas.org/countryrep/Chile74eng/chap.16.htm Additional country reports were issued in 1976, 1977 and 1985. Cuba was the only other country with multiple country reports issued by the IACHR during the 1974 - 1985 period - two reports were issued on Cuba. In addition to the four country reports, Median Quiroga reports that the OAS Annual Reports for 1977, 1978, 1979-80 and 1985-86 contained special sections about Chile. Both the Fourth Chile Report (1985) and the special section of the 1985-86 Annual Report were written in response to the stepped up repression by the government that had begun in 1983. Cecilia Medina Quiroga. The Battle of Human Rights: Gross, Systemic Violations and the Inter-American System. (Boston: Martinus Nijhoff Publishers, 1988), pp. 291-307. 156

Chile in its agenda for the Sixth OAS General Assembly, which was held in Santiago itself.250 This pressure was increased in December 1977 when the United Nations voted overwhelmingly (96 to 5, with 14 abstentions) to condemn the military government for human rights violations.

The US government's unwavering stance in support of anti-communist regimes, consistently trumping its voiced concern for human rights abuses under the

Nixon Administration, was reversed m 1976 under the incoming Carter

Administration. Under Jimmy Carter's leadership the US government took on the role of championing human rights and political liberalism - much to the chagrin and even alarm of the authoritarian dictatorships that had stormed into power across Latin

America including Chile, in the 1970s. Indeed, entrenched in national security concerns about internal enemies, the junta felt besieged by international actors promoting political liberalism, and viewed the international human rights campaign as nothing more than a manifestation of an "international Marxist conspiracy" against them and their work to "save" Chile from Marxism-Leninism."251 Caught between the rock of international pressure to restore human rights and democratic practices and the hard reality of the populist economic policies that would surely follow, Pinochet and

250Dykmann, 429. See also Ceceila Medina Quiroga. The Battle of Human Rights: Gross, Systemic Violations and the Inter-American System. (Boston: Martinus Mijhoff Publishers, 1988), 284. Medina Quiroga adds that "the presentation included one novelty: a reference to a letter written by five distinguished Chilean lawyers. The letter had been presented directly by them to the Sixth Session of the Assembly and contained a long condemnatory analysis of the practices of the Chilean government in the field of human rights." (p. 284)

251"Chile's Government After Two Years: Political Appraisal," p. 17. Here is an excerpt from a speech by CAL General Secretary Rafael Rodriguez at the XII World Anti-Communist League Conference in 1979 that illustrates this line of thinking: "The principal lines of the Carter-communist plan are the following: to withdraw all military and economic assistance to anti-communist governments, launching on them, through press campaigns, the stigma of dictatorship and violators of human rights .... " Reference: 00108F 104. Paraguayan Archives. 157

his advisors set about creating a political infrastructure that could withstand the force of democratic processes and their predictable assault on the neoliberal economic model. He called his political paradigm "authoritarian democracy" and its master frame for rule of law "The Constitution of Liberty."

Authoritarian Liberalism in Chile

[According to Ibanez] the 'economic right' has now swung behind Pinochet and the current government's free enterprise model. But once again they fail to see the political danger. According to Ibanez, the success of the present economic policy will increase, not diminish, political unrest. Memorandum of a Conversation Santiago, Chile, February 23, 197s252

I would say that, as an institution, in the long run, I am totally opposed to dictatorship. But it could also be a necessary system in a period of transition. At times it is necessary that a country have, during a period of time, a form of dictatorial power. ... . When a government is broken [en quiebra] and there are no recognized rules, it is necessary to create the rules to say what can be done and what can't be done. And in other circumstances it is almost inevitable that someone must have absolute power. Absolute power should be used precisely to avoid and limit all absolute power in the fature. It would seem to be a contradiction that /, who yearn for the limitation ofpower embodied in government and in the lives ofpeople, should say this, I who maintain that many of our problems are born precisely out of the excess ofgovernment. Friedrich Hayek Interview in El Mercurio, April 1981253

While Pinochet rested heavily upon the military for support of his program of destroying the old political order, he relied upon civilians to advise him on the structure of his authoritarian democracy. Publicly Pinochet explained that his intention was to restore and maintain stability in Chile while overseeing the transition of Chile's

252 Excerpt from "Memorandum of Conversation" at the home of the U.S. Political Counselor in Santiago, Chile on February 23, 1978.

253 Sellas. En el Momento Actual Nuestra Principal Tarea es Limitar el Poder del Gobierno. El Mercurio. 4 April 1981, D-9. 158

economic structure from one characterized by State-led growth to a neoliberal economic model. 254

One famous set of advisors was comprised of the previously mentioned

"Chicago Boys" who undertook the monumental task of restructuring an economy that relied heavily upon state intervention to one that mirrored the tenets of free market ideology known as neoliberalism. Milton Friedman is often recognized as the "father" of the Chilean neoliberal economic model. Friedman's intellectual influence is evidenced by the results of his March 1975 visit to Chile. During that visit Friedman advised the government to adopt a 'shock treatment' described by a US State

Department official as "similar to the one implemented by Ludwig Erhard in Germany in 1948 which had paved the way for the German economic miracle."255 One month later Pinochet appointed Jorge Cauas as Minister of Finance to implement Pinochet's new plan, marking the beginning of the reign of the Chicago boys.256 But less attention

254Arturo Valenzuela. "The Military in Power: The Consolidation of One-Man Rule." The Struggle for Democracy in Chile, 1982-1990. Paul W. Drake and Ivan Jaksic, editors. 21-72. (University of Nebraska Press, 1991), 23 and 43. In addition to supporters from the parties of the right and business elites, and the "new right" who were ideologically wedded to neoliberalism, A. Valenzuela identifies an "authoritarian right, [who] were strong supporters of military and one-man rule and were highly critical of liberal democracy. This group was linked to elements of the armed forces and the secret police."

255U.S. Department of State. (January 11, 1893). "Chile: From Theory to Practice - More Flexibility in Economic Policies" Report 532-AR ,3. www.foia.state.gov. [Accessed May 22, 2002).

256Cauas held several influential posts within the Pinochet government, such as Vice-Governor of the Central Bank, Minister of Finance and Ambassador to the United States. Arnold Harberger relates that the "Chicago Boys" began to hold important positions (e.g. ministers, central bank president) in Pinochet's administration after Jorge Cauas was named Minister of Finance in 1975, with authority over other government ministries. Silva notes that, in addition to serving as advisors to the military regime, many of the Chicago Boys held influential positions at major corporations in Chile. "they gained control over the Chilean economy's most dynamic sectors: financial services, forestry, export agriculture, mining and export/import firms" Eduardo Silva. "The Political Economy of Chile's Regime Transition." The Struggle for Democracy in Chile, 1982-1990. Paul W. Drake and Ivan Jaksic, editors. (Lincoln: University ofNebraska Press, 1991), 99-100. 159

has been paid to the equally penetrating influence of Austrian economist Friedrich A. von Hayek, after whose book, The Constitution of Liberty, Pinochet's 1980 constitution was named.257 A letter written by Jorge Cauas to Friedrich Hayek dated March 26,

1980 reads, in part, as follows:

Since your last visit to Chile, the economy has continued improving its operation increasingly relying on free markets. We are nevertheless aware of the need to complement this economic picture with analysis on those aspects which form, in your words, the basis of the political order in a free society. With the financial support of private businessmen we are constituting a center of thought whose values are those of liberty .... We believe that this endeavor is of utmost importance, particularly for Chile at the present time, but is also relevant, given our recent experience, to the worldwide struggle against the enemies of freedom. Needless to say, the work you have done in the last decades leading to "The Constitution of Liberty" and "Law, Legislation and Liberty" is undoubtedly the single most relevant work for this purpose and it is only natural that we regard you, Professor Hayek, as our intellectual leader.258

An article written by Javier Fuenzalida in 1969 reveals that early on the

Chicago Boys understood the context in which they would be able to re- institutionalize economic liberalism in Chile - under the auspices of dictatorship and

257Although letters and other information found in Professor Hayek's archives (located at the Hoover Institution at Stanford University) indicate that Professor Hayek had ongoing communication with several of Pinochet's prominent civilian advisors (e.g. Carlos Caceres and Jorge Cauas), it is not clear what kind of relationship, other than possibly mutual admiration, existed between Hayek and Pinochet. We do know, however, of one meeting between Hayek and Pinochet that occurred during Hayek's visit to Chile in November 1977 (reference: Hayek Archives, Box 54, folder 54-23, "Universidad Tecnica Federico Santa Maria") Hayek visited Chile several other times as well, including April 1981, at the invitation of the Centro de Estudios Publicos, on whose Board he served.

258Jorge Cauas, personal letter to F.A. Hayek, written March 26, 1980. F.A. Hayek archives, Box 15, folder 15-16 "Centro de Estudios Publicos," p. 1 Peter Boettke suggests that these two works by Hayek are "the restatement of [the] Smithean project in political economy. . .. In both of these treatises, Hayek's theme is the importance of general rules as the backdrop against which erring and ignorant agents can learn to adapt their behavior so as to coordinate their activities with those of others." (p. xxvii) The center to which Cauas was referring in the letter was the Centro de Estudios Publicos, founded later on that same year. Hayek served on its initial Board of Directors. 160

constitutional change similar to what had occurred m post-war Germany under

Chancellor Erhard: 259

Transferring the German [post-war economic] scheme to a country like Chile might raise the need for variants, but the principles remain the same . . . it would imply re­ orienting our whole system of production that developed according to the theories of forced industrialization and extreme protectionism ... to carry out a neo-capitalist revolution which in the initial period of adjustment, implies some sacrifices. The Erhardt [sic] model requires formal changes, but the essence would remain unaltered, although it is necessary to acknowledge that some of the formal changes would be difficult to attain. One example is the need to amend our Constitution in order to re­ establish private property.260

Interestingly, an interview with Hayek, published in Chile's Ercilla magazine in May 1981 credits Hayek with influencing the flow of events in post-war Germany,

259 Ludwig Erhard, Mont Pelerin Society member, is credited with designing and implementing the reforms necessary to re-install a market economy in Germany after World War II. Without wanting to exaggerate the possibility of model transfer, it is interesting to further note that Dr. Wolfgang Frickhoffer prepared a paper for the November 1981 Regional Meeting of the Mont Pelerin Society held in Vina del Mar, Chile, in which he gave "an historic presentation on the economic social and political conditions that made it possible for Prof. Erhard to establish a market economy in Germany" (letter from Pedro Ibanez Ojeda to Chiaki Nishiyama). Two revealing paragraphs from that paper by Frichhoffer read "I am a democrat, but I do not close my eyes to the fact that in Chile before the coup d'etat of the military forces democracy was an abominable, antisocial farce. Neither do I close my eyes to the fact that very profound and radical reforms with far-reaching effects - reforms for the better or for the worse - can hardly be realized in a normal parliamentary system with all pressure groups concerned insisting on their vested interests. They certainly can not be realized at one stroke." Frickhoffer went on to write: "Let me mention right here ... that the former famous minister of economics of the Federal Republic of Germany, Ludwig Erhard, has often told me that he would never have been able to push a reform of such radical and profound and far-reaching character as was his in 1948 later through our parliament. He had grasped the hour of the century in 1948 in full knowledge that consent for his reform could be obtained from the US-military governor, General Lucius D. Clay, the man who organized the air bridge to Berlin in 1948 and 1949 and not from a parliament (existing at that time only in a provisional form and having only limited authority.)" see Wolfgang Frickhoffer. "Introduction of Market Economies: The German Model, Compared with the Chilean Model." Mont Pelerin Society, Box 63. Paper presented at the regional meeting of the Mont Pelerin Society at Vina del Mar, Chile, Nov 15 - 19, 1981, 1-2. What is noticeably missing from Frickhoffer's paper is any analysis of the influence that the Marshall Plan, which transferred $1.448 million from the United States to Germany to help that country rebuild its economic infrastructure after World War II.

260 This is an excerpt of an article written by "Coriolano'' for the May 9, 1969 edition of PEC (Politics, Economics and Culture) magazine. "Coriolono" is a pen name used by Chicago Boy Javier Fuenzalida. (See Valdes, pp. 235-236.) Note that this article was written four years before the coup, and eleven years before the 1980 Constitution was finalized. Boas and Gans-Morse note that some of the earliest uses of the word "neoliberalism" are found in PEC beginning in 1963, often in articles translated from German. Boas and Gans-Morse further note that the term "neoliberalism" became more widely used across Latin American after PEC published a particularly influential article by MPS member Wilhelm Ropke in 1964 (p. 25). 161

which is plausible, since Erhard (like Milton Friedman) was a member of the Mont

Pelerin Society that Hayek had founded:

When political concerns stirred [efervescia] in him, Hayek alerted the world about the situation of Germany and the need for this country to recuperate those values upon which western civilization was founded. Many years later, time has proven him right and has allowed him to justify the progress of that nation, thanks to an amply liberal constitution (that of 1949) and the abandonment of price controls by Ludwig Erhard in 1948.261

Historical experience had made clear to the economists that a program designed to broaden economic liberalism by restructuring the entire economy was best carried out under a relations of ruling characterized by restricted political liberalism that would first snuff out dissent through the swift use of repression and then structure social interaction under a rule of law guided by the principles of classical liberal ideology. The use of coercive force was crucial to the success of Pinochet's economic structural adjustment program, not only because it destroyed old institutions and rival intellectual leadership, but because it clearly imprinted upon the minds of the Chilean population (in the spirit of Foucault's observations about "monarchical punishment") the high cost of disregarding the rules governing Chile's new social order and the infinite length of the new order's reach. 262 Arnold Harberger, economics professor and mentor to many of the Chicago Boys offers his insight on this very issue:

Now it can be said, however, that the first ones to do something, the pioneers, always have a harder time that those that follow them. And in the context of the middle and late 1970s in Latin America it took a great deal of courage to take those steps [to promote free-market reforms]. Given that there was a military government, the idea that they were willing to cede economic authority to a group of technocrats made that

261Ximena Acevedo. "Friedrich A. Hayek: Un Largo Itinerario de Libertad." Ercilla, 29 Abril, 1981, 21.

262 Foucault, 89-90. 162

transition easier than it would have been in a democratic context of the same time and place.263 Pinochet's political advisors included members of the Constitutional Committee for the Study of Constitutional Reform, headed by Enrique Ortuzar with such well- respected members as Jaime Guzman, law professor and acknowledged by many as

"editor" of the new constitution.264 The Ortuzar Committee was established by decree on October 25, 1973 and worked in relative secrecy for several years, before turning its draft over for review. Fortin and Medina report that "unofficial attempts to participate in the general debate of the new institutionality were quickly stopped by the Government," the most prominent of which were made by the "Group of 24."265

Also in the government's advisory circle were members of Pinochet's Council of State266 whose responsibilities included "advising the president on proposed constitutional amendments or executive decrees; implementation of international treaties or agreements; and contracts or negotiations that might involve the national interest."267

263Federal Reserve Bank of Minneapolis. "Interview with Arnold Harberger, the dean of the "Chicago Boys." The Region. (March 1999) available at: http://www.mpls.frb.org/pubs/region/99- 03/harberger.cfm ..

264 Sierra, 20.

265W. Fortin and C. Medina. The Institutionalization of Repression. Chile: A Case Study. Amsterdam. (The Netherlands: Institute for the New Chile, 1979), 9. The Constitutional Studies Group of 24 was comprised of 24 former parliamentarians and university professors, primarily affiliated with the Christian Democratic or Socialist Parties, who formed their own constitutional commission to examine the newly proposed constitution.

266 The Council of State was established through Decree-Law 1319 on January 9, 1976. It was composed of former Presidents of the Republic and 16 others appointed by Pinochet.

267 Blaustein and Flanz, xx. 163

Indeed, the Council's most important role was that it revised the final draft of Pinochet's

1980 constitution. 268

In a press conference on April 7, 1978, Constitutional Commission Chairman

Enrique Ortuzar "claimed that it is Chile's destiny to be the first country in the world to establish a democratic system that preserves liberty and does not allow terrorism or violence."269 Ortuzar went on to explain that the work of his committee had been based on four premises:

The previous political order in Chile failed to preserve individual dignity and liberty and endangered Chile's sovereignty. Therefore, mere reforms are not enough and an entirely new 'Fundamental Charter' was required; the new Constitution must reflect changed political, social, economic and moral conditions; it is not possible to return to democracy of the liberal, classic, traditional type; that kind of democracy cannot survive in today's world.270

After five years the Constitutional Drafting Committee turned its proposed constitution over to Pinochet in July, 1978, who then turned it over to the Council of

State to be studied from November 1978 to July 1980271 before being submitted to a plebiscite vote on September 11, 1980, the seventh anniversary of the military coup, institutionalizing the fundamental precepts of Pinochet's revolution under a new master frame for rule of law.

268 A. Valenzuela, 43.

269U.S. Embassy Santiago Chile. "A Glimpse of Chile's New Democracy." April 11, 1978. Available at www.foia.state.gov. pp 1-2.

270"A Glimpse of Chile's New Democracy," 1-2.

271 Accompanying the Council of State's July 1980 report on the constitution was a minority report written by the two members, Pedro IbAflez and Carlos Caceres, who were also the only Chilean members of the Mont Pelerin Society. (see chapter 13 of this study for two excerpts from that report). Ibanez had been an MPS member from long before the 1973 coup; Caceres was invited to join in 1980, having been nominated by Hayek himself. Carlos Caceres. Personal letter to Professor Friedrich A. Hayek. 2 December 1980. Hayek Archives: Box 72, folder 72-45 "Caceres, Carlos Francisco." 164

Figure 16: Ideological Influences in Pinochet's Chile

I Neoliberalism I Traditional Authoritarianism - Monetarism and the "Chicago Boys" the Military Junta I I Oous Dei World Anti-Communist I League (WACL) & Latin Mont Pelerin Society American Anti-Communist (Hayek, Friedman, Ibanez, Caceres) Confederation (CAL) I Gremialismoo I

I National Security Doctrine I

Through military repression and legal restrictions, the Pinochet regime sought to restrict the ideological perspectives that were circulating to those that expressed either a classical liberal (now often called neoliberal) or traditional authoritarian perspective about political economy.

Thus we see that umque conditions found in Chile created the perfect opportunity to foment a classical liberal counter-revolution: the traditional authoritarianism of the military's perceived anti-communist mission blended well with the needs of the economic liberals for an authoritarian framework to ensure political stability and repress any expression of dissent while they created a social order based on their ideological preferences (Figure 16). As had occurred in earlier times and 165

other places, proponents of traditional authoritarianism joined forces with proponents of economic liberalism - who clearly understood that their ability to prevail in the long run rested upon their ability to use institutions and legal structures to neutralize the potential of political liberalism.

Foreign economic assistance during the first three years of the military junta equaled almost ten times what had been approved during Allende's three years in office, demonstrating international support of this restructuring project.272 But the world economy, already destabilized by the breakdown of the Bretton Woods system, reeled under the effects of quadrupled oil prices instigated by 0 PEC in 1973.

Compounding matters, the country struggled under the new, privatized, free market economic structure that was being rolled out, falling into recession, poverty and an unemployment rate that reached 20 percent by 1975. As history would have predicted, privatization of state assets (especially during a period of economic crisis) led inevitably to a greater concentration of wealth in the hands of a small circle of Chilean elites with the cash on hand to buy up the assets at bargain prices. Former president

Frei called these "entrepreneurs" by another name: "piranhas," which he described as a "small group of monopolistic capitalists who have been profiting from financial manipulation and who can pick up on the cheap the government-owned enterprises that the Junta is selling back to private owners."273 Schamis observes that the process of government divestiture of assets, coupled with the privatization of banks during a

272Arriagada, 14.

273U.S. Department of State. "Memorandum of Conversation: Vice President's Meeting with Former Chilean President Eduardo Frei." 25 May 1977. available at www.foia.state.gov, 2. 166

severe economic recession, "created the conditions for a marked concentration of ownership in a few financial-industrial conglomerates."274 The "Chicago Boys" also exerted intellectual influence over textually mediated discourse as a means of consolidating social control in Chile by permeating public discourse with their particular interpretations of local actuality. Valdes writes that

exercised increasing control over the intellectual reproduction process of its own theories, dispatching disciples to the various institutions of higher education for economics, thus imposing its particular view on 'economic science' and marginalizing all others. The group built a system of links and personnel transfers between the public sector and Chile's main centers of financial and industrial power. It participated in an active press and television campaign to spread its own message on economic science and in a television campaign to spread its own message on economic science and to reject views that had influenced the discussion on economic development in previous decades, including a radical critique of Chilean democratic traditions and the proposal for a "new, modem, authoritarian and technified' democracy. 275 In such an authoritarian free market system, capital-poor members of the working class were obviously excluded from participating not only in political discourse, but also from influencing the economic policies that affected them.

Concerns about the effects of the economic "shock policy" reverberated across society, even reaching upper ranks of the armed forces.

There is a genuine and growing concern among a number of senior officers that the present 'social cost' - a shorthand term embracing unemployment, inadequate income levels, malnutrition, and generally low standards of living - of government economic policies, especially as they affect lower income sectors, may outweigh the future and theoretical benefits to be obtained by following these policies. 276

274 Schamis (2002), 42.

275Valdes, 10.

276 "Chile's Government After Two Years: Political Appraisal", 8. 167

The Pinochet government's response was to justify its actions through national security needs and ongoing subversion.277 To many external audiences, this anti- subversive rhetoric was incomprehensible -- by 1975, government repression, intolerance of dissent and use of raids to instill terror in lower-class neighborhoods

(poblaciones) had rendered threats to domestic security virtually non-existent.278

Indeed, the Catholic Church was the only national level structure that, because of its own prestige, was able to survive the junta's exercise in "extirpation." Much to the government's consternation Monsignor Raoul Silva Enriquez, Cardinal Archbishop of

Santiago founded a haven known as the Vicaria de la Solidaridad (Vicariate of

Solidarity) in 1976, whose three-fold mission to defend the lives of those persecuted by the government, to exert pressure to seek freedom for political prisoners and to give aid to the poor presented a challenge to officially sanctioned discourse was both grounded in the reality of life under the dictatorship and was visible beyond Chile's borders, garnering international sympathy for the plight of the Chilean people.

Women, afforded some protection by the military's patriarchal attitudes, also mobilized to provide mutual support in the light of the harsh economic conditions emanating from the government's economic policies and in defense of human rights in the face of political persecution. Loma Scott argues that the dire circumstances created by the junta's economic policies gave impetus to a new feminism in Chile that,

277 Arriagaga, 21.

278U.S. Department of State. "Talks on Chile with Sergio Molina and Rafael Moreno" 4 May 1976. accessible at www.foia.state.gov, p. 2. and Chile's Government After Two Years: Political Appraisal," 12. 168

in the post-dictatorial era, has offered a critique of the failures of both the Allende and

Pinochet regimes.279

Nevertheless, for the government and its allies, the threat to stability remained unconquered - invisible but real - living as populist aspirations of countless "enemies of the state," both at home and abroad. Below is an excerpt of a report from the archives of the Vicaria ofSolidaridad that gives us insight into this mindset:

The National Security Doctrine conferred at the end of the Second World War by North American sources understands that war does not end with the cessation of hostilities, that the free world finds itself in a new type of war with Marxism that abandons its head-on confrontation to assume, repeating what Pinochet said in his speech, the tactic of infiltration and disorder (subversion). The only way to defend against this aggression is upon the based of a doctrine that understands Marxism as 'an ideology that is intrinsically perverse' and, furthermore, as 'permanent aggression.' The other assumption is to abandon 'liberal democracy' as a system of government for being weak and incapable of confronting the War, rooted in the power of the Armed Forces and order, since only they have the organization and the means to confront the situation. This is the profound truth of what is taking place in a great part of our continent, although some refuse to publicly recognize it. 280

Indeed, Pinochet and his allies felt increasingly persecuted on all sides as they carried out what they saw as a military mission to save their comer of western,

Christian civilization. In January 1974, a US Department of State report describing

US relations with Chile as having "generally been close and constructive," notes that

The Junta fails to understand why the United States has not wholeheartedly and unreservedly welcomed the September 11 coup, why major new economic and military assistance has not been forthcoming (a 'mini Marshall Plan' in Foreign Minister Huerta's words) and why Congress has written restrictions prohibiting aid to Chile into law and discussed even more drastic proposals.281

279Loma Scott. The Feminisation ofChile. London Review of Books. Retrieved from www.lrb.co.uk/v28/n24/print/scot01.html on January 3, 2007. Also see Baldez, 129 and 161.

280 "Observaciones sabre las Actas Constitucionales," author unknown. Reference: Document 00844.00 source: Archives at the Vicaria de Solidaridad, 3.

281 U.S. Embassy, Santiago Chile. "The Junta After Four Months." 23 January 1974 available at www.foia.state.gov, 13-14. 169

After 1976 diplomatic relations became even more strained between the United

States and Chile as the promotion of human rights became a cornerstone of US foreign policy. The Carter administration used its international influence to condemn the

Chilean junta and to pressure the dictatorship to improve the human rights situation while imposing economic sanctions on the country until improvements were made.282

The Kennedy Amendment became the primary vehicle for US pressure of this kind, while both the UN and the IAHCR exerted pressure through their own investigations of and reports about ongoing human rights abuses.283 A burgeoning Chilean exile community of up to 30,000 political refugees fleeing persecution under Pinochet established itself in Europe, the United States, across Latin America and elsewhere, denouncing the excesses of the dictatorship and criticizing its policies, some of whom became the target for assassination under Operation Condor's third, "secret" phase of assassmat10n.• • 284

In a speech on July 9th, 1977 Pinochet announced the Chacarillas Plan, considered by some as a signal for future political liberalization, but which planned for political processes to occur under the mantle of a new constitution that would structure a 'protected' and 'authoritarian' democracy. Civilian participation in political life

282 Arriagada, 32.

283 In the face of widespread human rights violations, the Kennedy Amendment to the International Security and Assistance Act and Arms Export Control Act of 1976 prohibited any type of U.S military assistance to Chile in July 1976, two months before Orlando Letelier and his associate Ronni Moffitt were killed by a car bomb in Washington DC. Letelier had been one of the more prominent members of the Chilean exile community and was \a vocal and well respected opponent of the Pinochet regime.

284 Walker asserts that the exposure of socialists to influence of European socialism helped to de-radicalize Chilean socialists. 170

would recommence in 1980 with a 'designated' parliament' which would refer to the new Constitution when enacting legislation and creating rule oflaw.285

285 Valenzuela, 50 and Mary Helen Spooner. Soldiers in a Narrow Land: The Pinochet Regime in Chile. (Berkeley: University of California Press, 1994), 132. CHAPTER9

CHILE'S 1980 CONSTITUTION OF LIBERTY

Constitutional political economy is a research program that directs inquiry to the working properties ofrules, and institutions within which individuals interact, and the processes through which these rules and institutions are chosen or come into being. James M Buchanan The Domain of Constitutional Economics287

The intent {of the 1980 Constitution} was to circumscribe democracy within clear constitutional boundaries, protected by multiple layers of checks and reinforced organs of legal and constitutional control, as well as demanding requirements for the modification of this framework. Except for one or two articles specifically designed to regulate problems that had arisen during the dictatorship, the concern with rules was fundamentally retrospective: to provide institutional solutions to specific constitutional problems that had emerged during the 1960s and the Allende years and to assure mechanisms for the resolution of any conflicts that might emerge among powers. Afear of democracy drove this concern with rules. Because the right could not reasonably anticipate winning elections, constitutional binds upon democracy were a priority. Robert Barros Constitutionalism and Dictatorshi~: Pinochet, the Junta and the 1980 Constitution 88

As written in 1980, the Constitution contained 120 "permanent" articles and 34

"transitional" articles applying to the transitory period of continued military rule from

March 11, 1980 to March 11, 1990. The transitional articles provided the military government with broad powers and outlined the procedures for the 1988-89 plebiscite on constitutional amendments and the election of a legislature. Transitional Article 24 eliminated due process of law by giving the president the authority to curtail rights of

287James M. Buchanan. 1990. The Domain of Constitutional Economics. Constitutional Political Economy, 1 no., 1, 1.

288 Barros, 210. 171 172

assembly and free speech and to arrest, exile, or banish into internal exile any citizen, with no rights of appeal except to the president himself.288

The "permanent" articles of the constitution outlined a framework for a

"modem and protected democracy," that guaranteed "national security" through restricted political liberalism. Authoritarian democracy itself was to be protected by creating institutional mechanisms that would limit popular sovereignty; by carefully restricting political activity and discourse; and by establishing a permanent role for the armed forces as "guarantors" of the nation's institutional framework, reminiscent of

Foucault's observations about disciplinary societies in 18th and 19th century Europe.

Indeed, Pinochet reiterated to opposition parties that the army would oversee Chilean politics beyond the December 1989 elections "watching carefully to assure those who aspire to govern Chile are true democrats and authentic defenders of a free society."

(Figure 17)289

Below is a summary of the most significant changes between the 1925 and 1980 constitutions, changes which have served to reorder relations of ruling in Chile by re- institutionalizing a social order based upon classical liberal values - individualism, the right to private property and limited State intervention in the economy - while putting restraints on discourse drawing upon ideas associated with populism and political liberalism. In general, the 1980 constitution narrowed distribution of political power

288 A CIA report dated May 17, 1988 notes that "from 1981-1985 Pinochet made liberal use of Provision 24 to harass regime opponents ranging form the far left to the moderate right. [Redacted] but we believe that in recent years persistent international criticism of Chile's human rights practices has influenced him to resort much less frequently to this set of extraordinary powers." "Chile: How Authoritarian is Pinochet's Constitution?" CIA. 17 May 1988, 7. Available from www.foia.gov.

289 Blaustein and Flanz, xxvii. 173

through its prescriptions vis-a-vis voting rights, and also revoked citizenship for those who failed to conform to this new vision of authoritarian democracy. Second, the

Figure 17: Chile Under the 1980 Constitution

Constitution of 1980

Monetarism and the "Chicago Boys"

Oous Dei Traditional Authoritarianism/ Gremialismo National Security Doctrine

Vicaria de Solidaridad

UN Human Rights Commission

I OAS/IAHCR

The 1980 Constitution sought to create rule of law based upon a fusion of classical liberal and traditional-authoritarian ideas. Ideological resistance came primarily through international human rights networks and Chilean exiles working in cooperation with progressive elements found especially in Chile's Catholic Church.

Constitution enshrined the precepts of limited government intervention in the economy and market operations. Third, in contrast to the previous a-political role of the Chilean military, under the "Constitution of Liberty" the armed forces were elevated to the status of a fourth branch of government, subject to limited civilian

authority and with broad authority to exert social control. Finally, the new 174

constitution created an onerous amendment process that would make constitutional change a lengthy and difficult process.

The 1925 Constitution had qualified that "the majority of rights are individual, but some are recognized as social by nature and are subjected to collective demands. "290 Instead, Article 1 of the 1980 Constitution simply states that "the State is at the service of the individual," congruent with the classical liberal norm of methodological individualism, not social action. Article 1 also defined the Chilean nation as "unitary," rather than as pluralistic thus denying the distinct history and identity of unassimilated indigenous populations.291 Article 19 inhibited the rights to free association and speech by prohibiting parties from engaging in activities "foreign to them," in order to weaken traditional ties between unions and political parties while limiting the ability of Chileans to engage in collective bargaining, strikes, and union activities. Articles 23 and 57 made this restriction explicit by prohibiting leaders from

"intermediate groups" such as unions and other civil society organizations from

"taking an active participation in a political party." With regard to property, the 1925 had established that

the inviolability of property is guaranteed but the right to hold property is subjected to the limitations or rules required to maintain and further the social order, in which case the law may impose upon it obligations in favor of the general interests of the state and of private and public health .... Protection to labor, industry and social welfare projects are also guaranteed, especially regarding housing and economic conditions, in order to give each inhabitant a minimum of well-being for himself and his family. The state decides on the division of property and the constitution of family property. 292

290 Blaustein and Flanz, p. ix.

291 It is not uncommon for Latin American countries with large indigenous populations to define their nations as pluralistic. Countries whose constitutions contain pluralistic language include Peru, Ecuador, Colombia, Guatemala, Venezuela and Bolivia.

292 Blaustein and Flanz, p. ix. 175

Instead, Article 19 the 1980 Constitution provides "freedom to acquire ownership over all types of property except that which nature has made common to all men, which should belong to the entire Nation ... When the national interest demands it, a law of qualified quorum may establish limitations or requisites for acquiring ownership over certain property." This last statement kept open the possibility of

State ownership of valuable resources - such as the copper mines that Allende had nationalized, as will be discussed below. Further, in the event that the State would make claim to specific property, Article 19 also provides for immediate compensation.

The new constitution also defined minimal public goods provided by the government which, in addition to public security, include basic education and health services

(Article 19). In sum, the 1980 Constitution articulated a relations of ruling based on the premise that the function of the State is to serve the individual and protect private property, both core values of classical liberal ideology.

The 1925 Constitution, as amended through 1973, had granted universal suffrage to all adults 18 and over. Article 13 of the 1980 Constitution limited suffrage, in general, to those 21 and older, 293 while provisions are made elsewhere for other means in which citizenship can be restricted or revoked. For example, Article 8, whose clear intention was to banish Marxist-influenced ideology from public discourse (but could be applied to other groups as well), declares "any action by an individual or group intended to propagate doctrines which are antagonistic to the

293 But even narrower definitions of citizenship had been discussed. According to Spooner, "One minority opinion within the council [of state] was to restrict voting to property owners, .... Carlos Caceres, a council member who later served as finance minister, central bank president and interior was among those opposing universal suffrage, arguing that such a provision 'could destroy the very system applying it.' Spooner, 147. 176

family, or which advocate violence or a concept of society, State or juridical order of a totalitarian character or based on class warfare. . . is illegal and contrary to the institutional law of the Republic" and prescribes specific sanctions against persons deemed by the Constitutional Tribunal to have committed such acts. Under the 1980

Constitution, these groups were excluded from political life.

Another provision that extended the web social control across all levels of public discourse was the elimination of elected local governments, a tradition that had existed since colonial times. Instead, Article 32 of the constitution provided for the direct presidential appointment of regional intendants (intendentes), governors

(governadores) of provinces, and mayors (alcaldes) of large cities. Article 32 also gave the president the power to dissolve the lower house, the Chamber of Deputies

(Camara de Diputados), at least once in the chief executive's term, thereby subordinating Parliament to presidential control.

The 1925 Constitution had established that the president and senators would be elected by popular vote and Parliament had been instituted as a bicameral legislative body with proportional representation.294 Parliament exercised authority over

budgetary as well as legislative issues. In the 1980 Constitution Article 42 re-

establishes a bicameral Parliament, but divides legislative powers between the

Parliament and the President, strengthening the power of the executive (who would

not be elected by direct, popular vote). Authority to create the budget was given to the

President in Article 64, presumably to limit any potential popular influence over the

294Gerald Fitzgerald. The Constitutions of Latin America. (Chicago: Henry Tegnery Company, 1968), 2. 177

distribution of government resources. Further, while the 120 representatives of the lower house, the Chamber of Deputies, continued to be elected by popular vote for four year terms (Article 43), Article 45 provided for nine "designated" senators for the upper house, who would be appointed by a newly-created National Security Council

(COSEN A, which names four), the president (who names two) and the Supreme Court

(which names three), constituting more than one-fourth of the thirty-five-member chamber. In this way, the president had influence over the composition of the Senate, hence wielding control over the legislative branch of government.

The 1980 Constitution also introduced important changes in the political role that the armed forces in order to defend of national security under Chile's authoritarian

democracy. First, Article 95 created COSENA (mentioned above), whose voting members consisted of the heads of the Army, Navy, Air Force and the director general

of the Carabineros (national police); the country's president and the presidents of the

Senate and the Supreme Court,295 giving military leaders an absolute majority on any

COSENA vote -- and only COSENA could vote remove to military commanders. In

addition, to naming four of the nine designated Senators COSEN A was authorized to

name two of the seven members of the Constitutional Tribunal;296 the president and

the Senate were only authorized to nominate one each.

295 Ministers of the Interior, Foreign Relations, National Defense, Economy and Finance are non-voting participants. The Chief of the General Staff of National Defense serves as Secretary.

296 The Constitutional Tribunal was created by the constitutional reforms of 1970 (Law 17 ,284) to provide the country with a body that would serve as final arbiter on constitutional matters and thus prevent the adoption of unconstitutional laws or decrees. As a court of last resort on constitutional matters, the Constitutional Tribunal judges the constitutionality of laws at all points in the legislative process. It can also declare unconstitutional any decrees issued by the president of the republic and rule on the constitutionality of a plebiscite. 178

Article 96 charged COSEN A, in part, with the responsibilities

to advise the President of the Republic on any matter linked to the National Security when he should so request; to express to any authority established by the Constitution, its opinion regarding any deed, act or matter which in its judgment gravely operates against the foundations of the institutionality or which might affect national security; to seek from authorities and officials of the Administration of all the records related to external and internal security of the State ... 297

Second, while under the 1925 Constitution, the armed forces and police were subject to civilian authority, Article 93 of the 1980 Constitution limited civilian control over the armed forces thereby allowing the military to act with a high degree of autonomy. While the president names the commanders in chief of each of the four branches of service, nominees are selected from a list of the highest-ranking officials, and once the appointments is made, it is permanent during his four year terms term in office. Such appointments could only be overturned with approval of COSEN A (on which the heads of the four branches sit). In this respect,

The armed forces have developed into the major political actor [in Chile], independent of and imposed on the national community. The armed forces confront political decisions from a position of total control. They are autonomous and self­ appointed governmental authorities .... The concept of national security ... allows the armed forces to exert a decisive influence over the life of the Chilean people.298

Finally, Articles 116-120 lay out a lengthy and difficult process required to amend the constitution, which can only be done with the concurrence of the president and two succeeding legislatures, each of which would have to approve an amendment by a three-fifths vote. "The effect, according to [redacted] numerous academic studies

297 Fortin and Medina, 26.

298 Fortin and Medina, 27. 179

is to make the Constitution virtually unamendable in less than 4-5 years and absolutely unchangeable should the National Security Council [COSENA] object."299

It is through these changes - reinforcing property rights, limiting popular sovereignty and the State's ability to intervene in economic activity and increasing the influence of the military to exert social control -- that the Constitution was intended to make permanent a relations of ruling in Chile that was inspired by classical liberal ideology. In 1980 the military government held a plebiscite with three issues at stake: the approval of the newly written constitution, broadening

Pinochet's presidential powers through a series of "transitional articles" and adding an eight year "transitional period" to Pinochet's term of office. 300 The plebiscite passed on all three counts, although many, such as Arturo Valenzuela, criticize the manner in which the agenda was set, the environment in which the plebiscite was carried out, and the procedures used to aggregate and count votes. A CIA report states simply that:

the government left no stone unturned to ensure a favorable outcome in the plebiscite, resorting to extensive intimidation of opposition groups, arbitrary measures to undercut the efforts of those advocating a "no" vote, and at least some fraud during the tallying and tabulation ofvotes.301

Despite intimidation and harassment, the dissident Group of 24 prepared its own study of the 1980 Constitution after holding over 76 meetings of the Group itself and of 250 meetings of subcommittees, which included the participation of a broad

299Chile: How Authoritarian is Pinochet's Constitution? 11.

300 According to Arturo Valenzuela, "The most important innovation of the Council of State draft, which was introduced at the insistence of Council President Jorge Alessandri, was the incorporation of 'transitional articles' that provided for a specific timetable for the transition to civilian rule." (see p. 51)

301 "Chile: How Authoritarian is Pinochet's Constitution?" p 4. 180

spectrum of civil society leaders. While most of the Group's work took place in

Santiago, it consulted with other groups in the outlying provinces and "frequently presented its outcomes to working class social organizations, with the goal of amplifying the base of discussion," demonstrating a commitment to bringing to public discourse the truths found in local actuality. 302 Its conclusions were, in part, as follows:

The analysis shows - among other things - that the new Constitution rejects the representative system of Government, does not recognize natural and exclusive rights of the people to govern themselves, denies ideological pluralism, establishes a regime that is political and militaristic, implants a true presidential "Caesarism" minimizes and subordinates Parliament, transforms the Constitutional Tribunal into a bureaucratic organism lacking in popular representiveness and more powerful than the Congress, gives unlimited power to the Armed Forces, subordinates the relevance of fundamental human rights to the will of the government and identifies the economy with the individualist capitalism of the free market. In addition, given the requirements it imposes for eventual constitutional reforms, it perpetuates a fixed political, economic and social regime that turns out to be practically impossible to modify. In this way, the Constitution of the Military Junta denies democracy and - what is more serious - closes the pathways to found democracy under the legality it establishes. 303

All was not well in neoliberal Chile, to say the least. In the early 1980s the world economy continued to wrestle with both recession and inflation, which hit the

Chilean economy hard, creating severe economic crisis by 1982. While inflation was finally brought under control, other indicators did not bode well. The onset of the crisis was marked by the default of a sugar monopoly in May, and final figures for

1981 included the highest number of bankruptcies in nineteen years, a decline in industrial production of 87. l percent, and a fall in copper revenues of 23 percent, unemployment exceeding 25 percent of the workforce and a gross national project that

302Diego Rodriguez. "Los 24 y la nueva Constituci6n." Mensaje, 24 (November 1979), 686.

303 Grupo de Estudio Constitucionales, "La Constitutcion de la Junta Militar" March 1981, reference 001933. Available at the Vicaria de Solidaridad., 1. Emphasis added. 181

fell by 15 percent.304 Imports were escalating, encouraged by a cheap U.S. dollar, causing greater trade imbalance and macro economic instability. 305 In the meantime, the privatized banking sector was becoming increasingly unstable. In November 1981 the government announced a takeover of four banks, which fifteen months later had increased to thirteen banks and five other financial institutions that were either taken over or liquidated in the face of imminent collapse. These actions, necessary in order to preserve economic stability, reversed earlier years of economic privatization, bringing to a sudden end Chile's radical attempt to create an economy based heavily upon the tenets of economic liberalism. "By early 1982 the experiment of the

Chicago Boys' appeared to the country as a striking example of a policy that had defeated itself."306

Despite its efforts, the junta was not able to stave off the growing economic crisis. By 1983 financial disaster was imminent in Chile. A total of 363 businesses failed in the first six months of 1983,307 and unemployment, which registered at 25% in December 1982, reached 30% by the end of 1983.308 Support for Pinochet's economic policies dissipated among small business owners who now insisted that the economic crisis "was not transitory but that it revealed the economic model's

304 Arriagada, 50-53.

305 Spooner, 172.

306 Arriagada, 50-53.

307 Spooner, 172.

308 Silva, 110. 182

structural deficiencies."309 The urgency of the economic situation for common

Chileans finally exploded on May 11, 1983, when, middle-class and upper-middle- class neighborhoods in Santiago "reverberated with the deafening noise of Chileans beating on pots and pans and honking car horns to express their profound dissatisfaction with the military regime."310 Thus erupted a three-year cycle of protests and growing opposition to the military regime - which was met with increased repression by the military. 311 Protesters openly questioned the legitimacy of the military regime, and called for a return to democracy in the country, a hope that had been sparked by Pinochet's own promises in 1977.

In addition to waves of protest emanating from working class neighborhoods, the government's policies provoked an independent mobilization of the Mapuches, birthing a revival of Mapuche culture, and calls for autonomous rule for the indigenous people. Like other subaltern groups in search of their right to self- actualization, the Mapuches had been fiercely repressed by the dictatorship in its early years. But the government's policies sparked a flame of renewed resistance when

Mapuche leaders became aware of a proposed law (Decree Law 2568 of March 1979) that would undermine community ownership of Mapuche land through

309Guillermo Campero. "Entrepreneurs under the Military Regime" in The Struggle for Democracy in Chile, 1982-1990. editors Paul W. Drake and Ivan Jaksic, pp. 129-158. (Lincoln: University of Nebraska Press, 1991), 134.

310 Arriaga, 55.

311 Schneider, 3-4. 183

privatization.312 What ensued was the mobilization of Mapuches to demand land, education opportunities and medical care, giving impulse to what Stein describes as

a rediscovery ofMapuche ethnic identity, values and community rituals; an organized networking of activists and communities so vast that Mapuches could assert rights as indigenous peoples; a commitment to indigenous rights and unity that transcended party line or loyalty, or religious world. 313

In addition, two political coalitions emerged in opposition to the military regime. The first, Alianza Democratica (Democratic Alliance) joined together center- left actors in August 1983, including the Christian Democrats, Social Democrats,

Radicals and Socialists, among others. In September the second major coalition that emerged during the same month was the Movimiento Democratico Popular (Popular

Democratic Movement), which included the Communist Party, the MIR and the more revolutionary socialists calling for armed struggle. As a counterbalance, conservatives also announced the formation of the Union Democratica Independiente in September, led by Jaime Guzman, among others, in defense of the Constitution and the free market system while the Renovaci6n Nacional incorporated moderate conservatives from the National Party in November 1983, completing a set of party alliances and allies that spanned a broad ideological gamut reminiscent of earlier years.314 (Figure

18)

312Florencia E. Mallon. Courage Tastes ofBlood: The Mapuche Community ofNicolas Ai/ion and the Chilean State, 1906 - 2001. (Durham: Duke University Press, 2005), 236. Mallon argues that Decree Law 2568 should be considered as more of a continuum of a policy of subdivision and privatization ofMapuche land that had been taking place since 1928.

313 Stem, 216

314 A third coalition, Junto Podemos Mas (Together We Can Do More) was formed in 2003 by Chile's Humanist and Communist Parties along with other leftist organizations. In 1983 Tomas Hirsch helped found the Humanist Party (which was the first political party legalized in 1987), and Hirsch also helped found the Concertaci6n Coalition, from which the Humanist Party withdrew in 2003. 184

Figure 18: Revival of Political Parties and Coalitions in Chile After 1987

I I ! Constitution 6f 1980 ! II ALIANZJJ. PARA CHILE I Indep. Dem. I National Renovation Union (UDI) I (RN) i I I I I ,-.., I ~ I 0... I (')" ,_____ tl _::;;"" I > (1) n- ! s0 Er§-· I (") -· N~ I -; fa. tl I S"a §-· (1) I (/) tl s I o.0 (1)s (')0 I a o Pl ! ra· Q g. r.n a ~ Movimento Democnitico Popular ,_, S" (/) (Radical Socialists, Communists, 0 (') MIR) §I i i i

After political parties were legalized they soon formed three distinct coalitions espousing conservative, moderately populist and radical populist ideas.

Despite the stirrings of economic recovery by 1985, many Chileans still were worse off economically in that year than prior to 1973, a predictable outcome of economic liberalism in the context of inequitable distribution of wealth untouched by government redistribution. Arriagada notes that

the policies of the "Chicago Boys" had stimulated one of the most accelerated processes of concentration of economic power in South America in decades. A study based on available data for late 1987 show that five large financial conglomerates controlled 36 percent of the 250 largest Chilean enterprises, along with 53 percent of 185

their capital. The 214 domestically owned private businesses were management by only 80 individuals.315

In the midst of this turmoil the Pinochet government seemingly attempted to regroup its economic policies through the promulgation of a tri-part program of "People's

Capitalism," under the leadership of Hernan Biichi as Minister of Finance and

Modesto Collados as Minister of the Economy. Schamis explains that Capitalismo

Popular (Popular Capitalism) "consisted of highly subsidized loans for the purchase of stock primarily in the two largest banks and the two largest private pension funds

(AFPs), which were under government control." This program was complemented by

Capitalismo Laboral (Labor Capitalism) which was "aimed to distribute public company shares among employees of the firms divested, often through the formation of investment trusts," while the third program Capitalismo Popular Indirecto (Indirect

Popular Capitalism) was designed to "relax previous restrictions on private pension fund portfolios and allowed the AFPs to purchase stock in state-owned companies in the process of privatization." While Schamis questions the "redistributional effect" of the program, he notes that Collados himself indicated the primary purpose of the program was cultural - it was intended to "create a national consensus around the idea of the unrestricted respect owed to the right to property."316

Popular protests continued in the country's unstable economic environment.

On April 28, 1986 approximately 600 representatives of major labor, professional and community groups issued a 50-point statement entitled "the Demand of Chile," calling

315 Arriagada, 30-31.

316 Schamis, (2002), 61-62. 186

for a democratically-approved constitution, economic policy reforms and compensation for human rights victims, among other things. 317 Also troublesome to

Pinochet was continual international criticism of the regime for its human rights abuses. Transnational advocacy networks, including human rights groups, churches and others formed the core of this accountability network that assiduously published descriptions of routinized torture, murder and repression that continued to shock the world. Later

after an initial warming of relations with Pinochet, the Reagan administration cast its policy in the context of the United States' crusade for democracy, the inflexibility of the Chilean regime, and the 1983 crisis provoked by popular protests. The shift in U.S. policy was a long process that began in 1983 with the abandonment of 'quiet diplomacy' and the issuance of public statements on human rights and democratic institutions. The U.S. policy transformation concluded with the active advocacy of a gradual and negotiated transition aimed at 'restoring democracy through dialogue between those elements within the government favoring negotiation.' 318

Acquiescing to national and international pressure, on October 5, 1988, the military government held a second plebiscite that set the stage for the country's eventual return to electoral processes in 1989. The question being put before the

Chilean people required a simple answer: "yes" to extend Pinochet's rule for another eight years and "no" to end Pinochet's rule and restore democratic institutions.

Bolstered by international pressure on the regime, Christian Democrats and allied

317 Blaustien and Flanz, p. xxvi The junta had issued a controversial "Amnesty Law" covering all acts of violence perpetrated by the military forces between 1973 and 1978. The IAHCR issued recommendations on at least three occasions between 1978 and 1999, declaring the Amnesty Law incompatible with the American Convention on Human Rights and recommending that the law be overturned. In September 2006 the Inter-American Court of Human Rights ruled against provisions of the Amnesty Law in a case presented to it against Chile. At present, the Amnesty Law still stands.

318Carlos Portales. "External Factors and the Authoritarian Regime." The Struggle for Democracy in Chile, 1982-1990. Drake, Paul W. Drake and Ivan Jaksic, editors. (University of Nebraska Press, 1991), 247. 187

sectors of the Socialist Party319 abandoned protests in favor of political advocacy, forming the backbone of the fourteen-party "Coalition for No." On October 11, 1988, the votes were in and the "no's" had carried the day -- Pinochet lost his bid for election with nearly 55 per cent of Chilean voters rejecting his plan to remain in power. His response was one last political move to ensure that his legacy of authoritarian democracy would remain intact.

Shortly after losing the plebiscite, Pinochet passed a series of binding laws (!eyes de amarre), designed to prevent any modification of the political or economic system by prohibiting the "incoming government from replacing most of the federal bureaucracy, the heads of the Supreme Court, the Constitutional Court, and the armed forces. The armed forces also tried to protect itself from civilian control by passing the Organic Law of the Armed Forces, by which Pinochet granted himself virtual control over the armed forces and, according to some, powers parallel to those of the president and minister of defense.320

Equally important, Pinochet introduced a unique "binomial" electoral system, elevated to the status of constitutional law, that favors Chile's minority, conservative parties In contrast to the proportional representation system characteristic of pre-1973

Chile, the binomial electoral system mandates two-member districts, with seats split between the party or coalition with the largest and second largest percentage of votes.

By requiring each party to obtain two-thirds of the vote in each district for the successful election of two candidates, the binomial system gives the opposition

(consistently the conservative economic elites who sometimes call themselves "the second majority") disproportionate representation in Congress. The best way to ensure successful electoral bids, then, requires that like-minded parties form umbrella coalitions. These elected representatives would then join the ranks of members of

319 A law restoring the right to organize political parties had been signed into law on March 11, 1987, the sixth anniversary of Pinochet's constitution.

3200ppenheim, 210. 188

Congress appointed by Pinochet to propose and consider legislation.321 In this way, through the creation of a new Constitution and constitutional-level laws, Pinochet worked to create an institutional legacy of authoritarian democracy to govern everyday life in Chile for generations to come.

321 Schneider, 196. CHAPTER 10

THE 1980 CONSTITUTION REVISITED

Universal suffrage has conditional and limited validity. It can be a useful instrument in the manner in which it is employed without transgressing its limitations. The essential condition of such a system is that voters are only required to emit judgment on materials that are within the field of their understanding, or over alternatives that are clearly understood by them. Only in this way can one establish a participation that is solid and rational, not emotional and ephemeral. . .. In no case should the election of the President be by popular vote, since it was expressed as imperative in the Report of the Editing Commission of the Draft [Constitution} as well as in the vote ofthe Majority and the Minority [of the Council ofState}. Council ofState members Pedro Ibanez and Carlos Caceres La Nacion July JO, 198a323

Elections will decide governmental tendencies, but they will not question the essential way oflife of the nation. Jaime Guzman interview Hoy Magazine, August 197~24

Public calls for constitutional reform began a mere ten days after Pinochet's defeated plebiscite in October 1988. According to Barros, "important sectors of the

Right, particularly the RN, badly wanted to reform the constitution before the elections to deny the Center and the Left the unifying banner of constitutional reform going into the elections."325 Montes and Vial indicated that the negotiations over constitutional change were held in private and were limited to three actors: the opposition parties headed by the PDC [Christian Democrats] and the PS [Socialists],

323Excerpts from paragraphs 30 and 47 of the Council of State's Minority Report. "Voto de Minorfa de/ Consejo de Estado Sohre Nueva Constituci6n: Observaciones y Proposiciones de los Miemvros def Consejo de Estado, Senores Carlos F. Caceres y Pedro Ibanez O." La Nacion, 10 July 1980, Part B.

324Sierra, 1979.

325Robert Barros. Constitutionalism and Dictatorship: Pinochet, the Junta, and the 1980 Constitution. (New York: Cambridge University Press, 2002), 309.

189 190

the junta, and the two pro-government parities, the RN and UDI. 325 Virtually no consultation with broader elements of civil society occurred before the package of fifty-four initial reforms was presented to the general public. The public approved the reforms by 85.7 percent in July 1989, four months before the first post-dictatorship national elections. Under these reforms Article 8 was eliminated, expanding the sphere of permissible political thought while the prohibition against party membership for labor or association leaders was eliminated. The changes required the courts to consider habeas corpus petitions in all circumstances, and prohibited exile as a sanction. The number of elected Senators was increased from 34 to 38, increasing their influence vis-a-vis the appointed Senators. The president's power to dissolve the lower house of Congress was eliminated. COSEN A's mandate was reduced to that of an advisory rather than enforcement body and a new civilian member, the comptroller general was added to COSENA, wiping out the military's four-to-three majority.

Finally, the amendment process itself was made less onerous: the qualified majorities required to approve organic constitutional laws326 and constitutional amendments was reduced and the requirement that two successive Congresses must vote in favor of amendments was eliminated. These changes did much to limit the breadth of social control over those living under Chile's authoritarian democracy, but were just the first of seven series of amendments. Up until 2005, 88 of the 120 permanent articles have

325J. Esteban Montes and Tomas Vial, The Constitution-Building Constitution in Chile: The Authoritarian Roots of a Stable Democracy. http://www.idea.int/conflict/cbp/upload/CBP-Chile.pdf, 13. [Accessed on November 24, 2007]

326 Organic law provides the foundation for rule of law. One body of organic law is found in a country's constitution, but additional organic laws expanding upon constitutional principles can be added later that have the same level of authority as the constitution, and help form the base for social organization. 191

been amended at least once, and several permanent articles have been amended multiple times, bringing the number of constitutional reforms to 109 additions, deletions and modifications.

In December 1989, the regime, bound by its own constitution, held democratic elections. The opposition Concertaci6n coalition327 soundly defeated Pinochet's hand- selected candidate in favor of Christian Democrat Patricio Aylwin, who took office on

March 11, 1990.328 But this was just a beginning step on an ongoing journey to leave behind the junta and its particular brand of democracy. Oppenheim observes that

"when Aylwin took office, there was not even a consensus over the meaning of the term democracy," with pro-Pinochet parties insisting that the authoritarian structure built by the junta was democratic and Concertaci6n leaders insisting that the only way to breathe democracy into Chile's body politic was to "restructure political institutions, extract the armed forces from the political arena, and create mechanisms to ensure full participation and physical security for all segments of the population."329

Other constitutional amendments of interest have helped re-institutionalize a more conventional interpretation of democracy in Chile's relations of ruling. For example, an amendment in 1991 reinstated the direct election of municipal councils,

327 The Concertaci6n de Partidos por la Democracia is a coalition of center-left political parties that was founded in 1988. Its candidate has been elected president in all three elections since 1990. The two more conservative parties work under a looser coalition called the "Alliance for Chile." The Humanist Party left the Concertaci6n coalition in 2003 to form a third coalition, Junto Podemos Mas, whose 2005 presidential candidate was Tomas Hirsch.

328 Schneider, 6. Aylwin himself had a prominent role in the Allende period. Aylwin had been president of the centrist Christian Democrat Party, which had joined the UP coalition. In 1971 he was elected to Congress where he served as the president of the Senate, and used his influence to lead the congressional opposition to Allende.

329 Oppenheim, 206. 192

restoring greater political liberalism on the local level while another in 1997 changed in the composition of and nomination procedures for the Supreme Court to make them more participatory. In 1999 an amendment confirming equal rights between men and women was approved, for the first time in Chile's history. Despite theses changes, public debates continued to criticize the existence of what came to be known as

'authoritarian enclaves' in Chile's political structure, including designated senators, the military's prominent role in politics via COSENA (as well as the fiscal autonomy of the armed forces) and the binomial electoral system.

Finally, on September 17, 2005, President Ricardo Lagos signed into law an additional set of 58 constitutional amendments, many of which had been under negotiation for years. Among the most significant reforms were the elimination of the designated senators and the senators for life. 330 A second measure put the military back under civilian authority by giving the President the authority to remove the commanders-in-chief of the armed forces. Military power was further reduced by a third change dictating that only the President of the Republic, the President of the

Senate, or the President of the Supreme Court could convene COSENA. A fourth reform reduced the presidential term from six to four years, another entitled children born to Chileans while in exile to citizenship, another removed the transitory articles

(that articulated the stark authoritarian framework for rule of law under the junta

330The Concertaci6n government had attempted on three previous occasions between 1992 and 1997 to pass a constitutional amendment eliminating the designated senator positions. Aylwin had also proposed measures to restore Presidential authority over the military leadership in 1992, along with proposals to increase the total number of senators and deputies and establishing a proportional representational system. (Oppenheim, p. 215) 193

Figure 19: 2005 Reforms and the End of "Authoritarian Enclaves"

Constitution of 1980 (as amended through 2005)

I ! -.... Alliance for Chile Coalition I I """ ~ UDI ! RN 0.. I I I rs· I po Traditional OF ! G (j Authoritarianism/ ! I =r (j g(") ..... 0 National Security I ..... "' ::s ~ ~- (') ~ § G I "en C1 s I g G s:l. i ..... s 0- 0 ::s I e:. ~· ("') I !il" ~ ! "-' ~"' I c;/l 0 i (") I [ I Junto Podemos Mas (Together We Can Do More) (Leftist Socialists, Communists, MIR, Christian Left, and others) i

Removing "authoritarian enclaves" from the 1980 Constitution permitted a liberalizing shift in the rules framework although the neoliberal economic model and binomial electoral system remain intact. This has created a space for more political dialogue about the kind of social structure Chileans envision for their country although the possibility to create substantive change in the distribution of either political or economic power remains elusive. In the meantime, the Mapuches have emerged as a new political force that is calling for autonomy and self-governance of Chile's largest indigenous group.

during the transition to democracy) from the constitution.331 Jubilant, politicians of all political stripes praised the reforms as finally eliminating the "authoritarian enclaves

331"Congreso Puso Fin a la Transici6n" Diaro Siete, 14 July 2005, p. 2. 194

that had remained as a remnant of the 1980 Constitution"332 (see Figure 19). After the

2005 round of amendments government spokesman Francisco Vidal stated "The law of laws, that is the Constitution of the Republic, has taken a quantitative and qualitative leap to make it more democratic," although he also acknowledged that

"there remains pending the modification to the [binomial] electoral system."333

Chile has not made any notable changes to its political or economic structure since 2005. In other words, while traditional-authoritarian enclaves may have been largely eliminated from the relations of ruling, enclaves that perpetuate neoliberal economic policies remain intact. Recalling Figure 6 above, if military force is no longer holding the structure of society in place, the forces of cohesion are found on levels related to political negotiation and cultural consensus. Since this study argues that classical liberal ideas continue to undergird the formulation of rule of law, thereby providing an interpretative framework for everyday life in Chile, we would expect to find evidence supporting this argument in the country's political and cultural structures.

Since the neoliberal economic model, imposed on a small country like Chile, depends on international trade for a continually growing free trade economy, we would expect to find an export-driven economy that is well integrated into the global economy. Historically, as we have seen, economic liberalism requires (and perpetuates) economic inequality. In this regard, we would expect to find evidence of economic inequality in today's Chile. Historically, the ability to negotiate the terms

332 Diaro Siete, 3.

333 Diaro Siete, 3. 195

for relations of ruling has been held most closely by Chile's version of the white male property-owner. It therefore behooves us to determine if traditional fault lines persist, marginalizing access to power for those with little or no property, for women and for those of indigenous descent.

In addition, historical analysis confirms that economic models that perpetuate economic inequality are best maintained by political systems and cultural myths that mirror that same unequal power distribution. In this respect, in post-dictatorial Chile, in which authoritarian structures have been dismantled, we would either expect to find cultural reinforcement the liberal paradigm and the inequality it perpetuates, or, in the case where inequality is not culturally accepted, political rules that stratify access to political power by economic power in order to ensure the perpetuation of the economic model. CHAPTER 11

CHILE TODAY

The oft-preached protected democracy thus came together based, first and foremost, on the economic reform program of the Pinochet government and on its consolidation in institutional instruments. . .. The inviolability ofprivate property, strict limits on state intervention in the economy, the independence of the central bank (with a balanced budget amendment), and private ownership of social security and public utility services . .. are the constitutional boundaries within which post-Pinochet economic policy has had to take place. Hector Schamis Reforming the State335

The "democracies" of globalization, in reality, are dictatorships in democratic clothing in which liberties are restricted by means of economic control, which is achieved by giving to money or capital a disproportionate value. Tomas Hirsch El Fin de la Prehistoria336

Despite having lost his bid as president, General Pinochet remained a prominent figure on Chile's national political scene during the 1990s, using his authority as Commander in Chief of the Army to remind Chileans of the more influential role his government had assigned to the military as protector of social order under civilian rule. 337 In 1978 Pinochet had assured impunity for the armed forces through Decree Law 2191, granting amnesty for human rights violations that took

335 Schamis, (2002), 83.

336 Hirsch, 86.

337 Although it should be noted that Pinochet's influence diminished tremendously in the years following his arrest in London in 1998 for charges of torture, conspiracy to commit torture and murder (under an international arrest warrant issued by the Spanish magistrate Baltasar Garz6n), and even more so following the scandal that erupted after a 2004 report from the Riggs National Bank in Washington DC to the U.S. Senate was made public, revealing that Pinochet had held multiple secret accounts worth millions of dollars with Riggs. These revelations later resulted in a case being opened in Chile against Pinochet for fraud and tax evasion, but Pinochet died on December 10, 2006, before the case was brought to trial.

196 197

place between 11 September 1973 and 10 March 1978, when the state of siege was officially lifted.337 Ensalaco notes that "the climate of fear that was the regime's legacy was so potent that few politicians seriously contemplated annulment of the law," which was complemented by constitutional provisions that granted immunity from prosecution for members of parliament, including life-time senators appointed by

Pinochet.338 Concerns that the armed forces might disrupt democratic processes were reinforced by actions taken under Pinochet's leadership as Commander in Chief of the

Army. For example, in November 1990 Pinochet ordered an "ejercicio de en/ace" in which troops were ordered to remain in their quarters in Santiago (ostensibly awaiting orders) while soldiers carried out "routine" maneuvers elsewhere. This action is largely considered as Pinochet's response to a criminal investigation that had been initiated against General Pinochet's oldest son, also named Augosto Pinochet.

Normalcy was restored through negotiations held between General Jorge Ballerino,

General Pinochet's representative and Enrique Correa, Secretary General, who represented the Aylwin administration. In May 1993, when investigations into

fraudulent activities by Pinochet's son were reopened, Pinochet ordered the Army to

its quarters once more while armed officers and troops dressed in combat fatigues

337The Amnesty Law remains in effect, despite broad criticism, including a determination by the United Nations General Assembly in 1989 that the law infringes upon the right to judicial redress and by the Inter-American Commission for Human Rights in 1997 that the law infringes upon judicial guarantees and violates the American Convention on Human Rights, to which Chile is a signatory.

338Although constitutional provisions provided immunity for members of Congress, they also permitted impeachment, given the presentation of a "compelling case." This provision was subsequently used by Judge Juan Guzman who argued that a 'disappearance' should be considered as an ongoing case of aggravated kidnapping, and, as a ongoing crime, is not covered by the amnesty law. This interpretation was accepted by the Chilean Supreme Court, opening the door for the subsequent impeachment of Pinochet for crimes related to both the Caravan of Death and Operation Condor cases. A subsequent change in the composition of the judiciary paved the way for the Supreme Court to lift Augusto Pinochet's immunity from prosecution in 2001 (Ensalaco, p. 121 and 123). 198

surrounded the armed forces building (located across the street from La Moneda, the presidential palace) as a show of force while the Corps of Army Generals held a meeting inside. Tensions were again reduced through negotiations between Ballerino and Correa, but the visual message of potential military intervention was clear to anyone who might think of challenging their ongoing influence or the impunity that protected them. Ensalaco describes the post-dictatorship transition to democracy, first under President Aylwin and then under Presidents Frei and Lagos in this way:

Fear that the armed forces might disrupt the democratic process was certainly a factor early in Chile's democratic transition. Concern that Pinochet's supporters in the congress, including especially un-elected senators appointed by Pinochet, would disrupt the legislative process was probably another. The Frei and Lagos administrations appeared to be overly concerned that the Pinochet affair complicated their ability to win the legislative approval of Pinochet's political supporters, especially that of Independent Democratic Union partisans. Thus, the Pinochet loyalists' ability to manipulate the political process contributed to impunity. 339

It was clear that, in this environment, steps to implement any change in the relations of ruling could only be tentative at best, given concerns about the potentially

"destabilizing consequences" of "citizen participation" in the post-dictatorial era.

Since assuming power in 1990 the Concertaci6n coalition has built its political programs around the theme of "growth with equity," which, in the policy realm, has translated into adherence to a capitalist economy, increased social spending to help the poor and a commitment to education. In a continuation of policies from the dictatorship, the Concertaci6n governments have concentrated their efforts on mediating poverty through redistributive programs targeting the estimated 38.6% of

Chileans who were classified as poor or indigent towards the end of the dictatorship in

339Mark Ensalaco. Pinochet: A Study in Impunity. Democracy in Chile: The Legacy of September 11, 1973. Silvia Nagy-Zekmi and Fernando Leiva, eds. (Portland, OR: Sussex Academic Press, 2005), 125. 199

1990. This emphasis in policy suggests that economic inequality does not enjoy widespread acceptance among Chileans as a "natural" characteristic of a healthy social order While ground has been gained in reducing absolute poverty, Ffrench-Davis notes that the effect of poverty reduction programs on income inequality are less clear and that income distribution will continue to be regressive without "a major national effort" to "correct this sharp inequity."340

Aylwin's initial foray into government under democratic processes was conducted through a "democracia de los acuerdos" ("democracy of agreements"), which Siavelis defines as "a pattern of informal negotiations with the congressional opposition and with powerful social groups outside of congress to reach agreements on controversial, potentially destabilizing issues."341 After achieving a basic consensus among national actors, the government would roll out its political program under the rubric of a "Concertaci6n Social," (Social Concertation). Sociologist Isabel

Licha identifies the use of a Social Concertation as rooted European processes

"oriented toward achieving social pacts to assure economic competitiveness." But she notes that, in the context of Latin American political economy, what has resulted is "a search for agreements to reduce risks of ingovemability, caused by the increase of social conflicts, such as a result of increased poverty levels and inequality that have

340 Ricardo Ffrench-Davis. Economic Reforms in Chile: From Dictatorship to Democracy.(Ann Arbor, MI: The University of Michigan Press, 2005), 193-194.

341Peter M. Siavelis "Electoral Reform Doesn't Matter - Or Does It? A Moderate Proportional Representation System for Chile," Revista de Ciencia Politica, volumen 26: 1 2006, footnote p. 223. Also see Leiva, 75-76. 200

occurred in the past two decades."342 Critics, such as Chilean economist Fernando

Leiva, maintain that, instead of creating a dialogue between property owners and workers based on equal footing, the Concertaci6n Social "successfully subordinated labor demands to the requirements of a natural resource-based export economy."343 In other words, despite its inclusive rhetoric, the Social Concertation has become a policy tool to extract cooperation from subordinated classes while keeping frank discussions about the increasing economic insecurity of workers in an economy offering low wages, minimal benefits, unsafe working conditions and no job security behind closed doors.

Political rules regarding socio-economic structure handed to the Concertacion governments by the Pinochet regime had been woven together under the guiding principles of "seven modernizations," which favored the use of market-based initiatives to address social needs in the areas of education, health and pensions, thus limiting government intervention in the economy while creating an economy based on competition and private enterprise.

The "Seven Modernizations" . . . included a new labor code, the privatization of the social security and the health systems, the introduction of market incentives in education (which implied a de facto privatization), a reversal of past land reform policies, regional decentralization, and the design of new legislative acts. All these pieces of legislation would come together in the 1980 Constitution. 344

342Isabel Licha. Concertaci6n y gerencia social: concepto, enfoques y experiencias. Paper presented at the VII Congreso Internacional del CLAD sobre la Reforma del Estado y de la Administraci6n Publica, Panama, 28-31 Octubre, 2003. http://unpanl.un.org/intradoc/groups/public/documents/CLAD/clad0047524.pdf [Accessed February 12, 2008].

343 Leiva, 76.

344 Schamis (2002), 35. 201

Former government Minister Jose Pinera boasted that the seven modernizations would "create the basis of a new political, economic and social reality," revealing his hope that the Seven Modernizations would provide an extensive interpretive framework for the social construction of reality in Chile.345 While eliminating its responsibility to provide social services for general populations, the

Pinochet regime focused its attention on meeting the basic needs of the most indigent, as stated above. The idea was to create an incentive for all others to participate in a market-based economy through employment (encouraged by creating a "flexible" labor market and through reduced access to government assistance for the unemployed) and through the purchase of social services provided by the private sector.346 The government, in tum, would support these private sector initiatives through policies intended to promote greater equality, thus "proving" the validity of market-based initiatives and creating what Leiva calls a "cultural revolution" in support of the neoliberal model. 347 Volk concurs with this analysis, noting that what

345Marcus Kurtz. "Chile's Neoliberal Revolution: Incremental Decisions and Structural Transformation," Journal of Latin American Studies, volume 31, number 2 (May 1999), p. 415. As Minister of Labor and Social Security under Pinochet, Jose Pifi.era was responsible for privatizing Chile's social security by creating a retirement system based on private personal accounts. Piilera also created Chile's private health insurance system and, in 1981, as Pinochet's Minister of Mining, Pifi.era was the intellectual author of Chile's Constitutional Mining Law that was intended to protect private property rights in mining, despite the fact that the 1980 Constitution left the mining sector in the hands of the government. Pifi.era is a "Distinguished Fellow" at the libertarian Cato Institute and also served as co-chair of the think tank's Social Security Choice project. For further information see Mr. Piilera's article "Wealth Through Ownership: Creating Property Rights in Chilean Mining" Cato Journal Volume 24, No. 3 Fall 2004, 295-301.

346As was outlined in Chapter 2, the definition of flexible labor is consistently one in which company responsibility to its workers is reduced, both in terms of salaries, benefits and its obligation for ongoing labor contracts. An alternative vision of flexible labor would be one that enhances the value of the individual laborer (through ongoing training or education), giving him the flexibility of moving easily between jobs and economic sectors.

347 Leiva, 77. 202

was apparently left out of the discussions leading to the Seven Modernizations was any reference to the effect that the high rate of income inequality in Chile would have upon the probability of creating the "ownership society" envisioned by Pinochet's followers. 348

Pension reforms designed by Labor Minister Jose Pinera privatized the social security system and converted it from a pay-as-you-go plan administered by the government to a privately managed system based upon individual savings. Social security payments became mandatory, and workers were required to choose the private institution they trusted with their retirement funds. The for-profit institutions, in tum, invested the pension funds in various financial markets for a fee. In addition to transforming the worker into investor, an implicit, hoped-for outcome of the privatized social security plan was that workers would begin to see themselves as members of this "ownership society" and thus become more committed to market­ based solutions. A corollary outcome was that large amounts of financial capital came under private, not public control in keeping with reduced government influence in the economy. But this privatization scheme did not tum out as planned. By 2006 the privatized pension system was deemed to be in need of a serious overall. The plan's designers had apparently overlooked the fact that participation in the pension system depended upon the ability of individual workers to pay into the plan. They also apparently did not understand that a significant number of Chilean adults have no means of making contributions into the plan, which means that a large number of

348 Volk, 29 and 3 8 203

aging Chileans will retire with inadequate pension benefits. A report issued by the

Marcel Commission, an advisory council formed under the Bachelet administration to study the problem stated:

Without changes to the system, it is estimated that within 20 years only half of Chile's senior citizens will receive more than the minimum pension, less than five percent will have access to the minimum income guaranteed by the state, and the rest will scrape by on less than the minimum, a poverty pension, or nothing, ... The most vulnerable sectors include the working poor, temporary and independent workers and a large proportion of women ... 349

Plans to modernize the health sector reflected the tenets of economic liberalism as well: health care services would be provided through private sector providers, with the government providing support for only the very poor, who had no means of paying for healthcare services. What resulted was the inevitable stratification of access to healthcare by access to economic resources (including health insurance), leaving many families without adequate access to healthcare services. As noted above, the purpose of Pinochet's land reform was to overturn expropriations carried out under previous administrations and tum land over to large landholders and investors with sufficient capital to buy government-owned lands.

The Concertaci6n administrations had also inherited a Labor Plan initiated in

1979 that created this "flexible" labor market by, among other things, abolishing the minimum wage and giving employers the right to fire workers at will, without any justification or prior notice. The Labor Plan also formulated a decentralized, plant- level (rather than national or regional level) union structure, weakening the strength of unions vis-a-vis property-owners during contract negotiations. In addition, the scope

349 Daniela Estrada. Pension Reform to Combat Systemic Poverty. September 15, 2006. Accessed at: http://www.globalaging.org/pension/world/2006/chilerefonn.htm on June 14, 2008. 204

of collective bargaining was restricted to wage negotiation, while strikes could only legally last 60 days. Constable and Valenzuela note that "out of 2,574 contracts negotiated the first year, the average raise was 8 percent- a pittance in view of the 40 percent drop in real wages since 1970." Further, subsequent amendments to the Plan weakened the negotiating power of labor. even more:

labor courts were dissolved, which sharply reduced workers' access to legal redress. Employers were allowed to offer new contracts at less than the minimum wages and benefits reached in previous negotiations. Severance benefits were lowered, maximum shifts were extended from eight to twelve hours, and piecework rates were legalized. 350

The Aylwin administration's response was to reform the Labor Plan under the previously mentioned Concertaci6n Social which, in addition to legalizing labor unions, also promised to make labor an "equal partner alongside with employers" and resolve conflict between property owners and workers by introducing policies agreed upon by all parties. This, in turn, "would enable the country to pursue a 'simultaneous commitment to economic growth and social justice."351 Aylwin's 1990 reforms reinstated the right for unlimited strikes, increased the period for severance pay and re- established a minimum wage, among other things. But it would seem that the

Concertaci6n Social has made more promises that it is able to keep, leading CUT to abandon the process after 1994.

From the beginning, i.e. 1990, it soon became evident that contrary to what was said and promised, the Concertacion was not going to give CUT the type of participation the latter had expected. To be sure, union leaders were at times consulted, and at times encouraged to negotiate directly with employers, but sooner rather than later the Concertacion took the reform out of CUT's hands and presented a much scaled down version to Congress. It should be recalled that while the Concertacion had a majority

35° Constable and Valenzuela, 229.

351 Concertaci6n de Partidos, quoted in Frank, 61. 205

in the lower House, due to Chile's electoral law, the opposition controlled the Senate and did so up until the 2000 election. 352

Constable and Valenzuela argue that the biggest losers under Pinochet's economic plan were members of the lower-middle class, who lost both purchasing power and economic stability - apparently under the theory that this would give them an incentive to offset these losses by working more.

Cut off from benefits that had enabled them to achieve respectability, they were thrust into a competitive economy that demanded new skills, paid lower wages, and seemed indifferent to their values of dignity, education, and compassion. . . . . Between 1978 and 1988, the incomes of both the richest and the poorest 10 percent of Chilean households increased by over 80 percent, but among the lower-middle 40 percent of 353 the populace, average incomes rose by less than 14 percent.

In this regard, Chilean society continues to be characterized by a bifurcation of consciousness that allows the negotiations undertaken by elites to create a relations of ruling to be informed more by theoretical abstracts (and their own interests) rather than the implications of their decisions on the everyday lives of ordinary people.

What obscures this contradiction is the Concertaci6n public discourse, which repeatedly expresses a commitment to values articulated in the words "growth" and

"equity". But a close examination of the outcome of Chile's political economy reveals a real-world commitment to economic growth accompanied by what might best be described as a rhetorical commitment to equity.

Under classical liberal theory, education provides the key to economic advancement for any aspmng entrepreneur. Privatized education was made law through the Organic Constitutional Law of Education (LOCE) and took effect on

352 Frank, 61.

353 Constable and Valenzuela, 236. 206

March 10, 1990, the day before Pinochet left office. In accordance with classical liberal principles, LOCE reduced the State's role in education to one of providing regulatory oversight, transferring the responsibility of education to private and public corporations while municipalidades, public schools, were managed by local governments. Tomic and Trumper note that privatized access to education has led to access to quality education on primary, secondary and post-secondary levels that is stratified by personal wealth, as has been confirmed by a 2008 report issued by Chile's

Ministry of Education. 354 This unequal access to quality education is a direct result of the difference of quality found in public, subsidized and fully private education in primary and secondary schools and the dramatic increase in fees experienced on the university level.355

A primary initiative of the second Concertaci6n government by the Eduardo

Frei Ruiz-Tagle administration, was educational reform carried out under an initiative calling for a Jornada Escolar Comp/eta, (Full-time School Day) - a plan to increase the hours that high school students actually spend in classrooms. Critics of the plan argue that the government should focus its attention on increasing the quality (not quantity) of education. In the end, these efforts did not assuage frustrations with

Chile's privatized educational system, which became visible in the form of a national-

354Juan Pablo Valenzuela B. (January 2008) Evoluci6n de la Segregaci6n Socioecon6mica de los Estudiantes Chilenos y su Relacion con el Financiamiento Compartido. FONIDE - Fondo de Investigaci6n y Desarrollo en Educaci6n. Proyecto FONIDE No. FIE_21 l del 2006. www.dii.uchile.cl/-webmgpp/fondo/infonnes fonide/Resumen%20definitivo%20JPValenzuela.doc. [Accessed April 8, 2008].

355Patricia Tomic and Ricardo Trumper. Higher Education in Chile Thirty Years After Salvador Allende: Privatization, Mass Education, Profits and Exclusion. Democracy in Chile: The Legacy of September 11, 1973. Silvia Nagy-Zekmi and Fernando Leiva, eds. (Portland, OR: Sussex Academic Press, 2005), 100 and 106. 207

level protest movement led by high school students themselves in the first few months of Michele Bachelet's administration, as will be discussed below.

Endemic disillusionment of young people with Chile's socio-political model has revealed itself in other ways as well, one of which might be called political alienation by social psychologists or a rejection of the political model by social activists. To explain, while voter registration is voluntary in Chile, once a voter is registered, voting becomes compulsory. The low level of voter registration among young people between the ages of 18 and 25, estimated in 1996 at 45% of those eligible to register, has become a subject of ongoing national debate. For critics of the regime, non-registration of a significant percentage of young people is interpreted as a silent expression of their resistance to "signing up" for obligatory participation in meaningless processes - indeed over half of unregistered youth respondents to a 1996 survey "were adamant" that they would not register. 356 The status of voter registration of youth remained low for the national elections in 1999, when it was estimated that more than a million of eligible voters under the age of thirty had not registered to vote.

In 2005, 71.2% of young people responding to a survey indicated dissatisfaction with the status of Chile's return to democracy. 357 Much of public discourse about how to resolve the low voter registration issue centers around the "solution" of creating

356"Youth Voter Registration Promoted: Government Launches Program To Encourage Apathetic Young Voters." (June 5, 1996) Chile Information Project -- "Santiago Times" -- Political, Environment, Human Rights, Economic News. http://ssdc.ucsd.edu/news/chip/h96/chip. l 9960605.html. [Accessed April 12, 2008].

357"Young People and Politics not Mixing: Politicians Said To Be Ignoring Youth Concerns." (February 10, 2000). Chile Information Project -- "Santiago Times" -- Political, Environment, Human Rights, Economic News. http://ssdc.ucsd.edu/news/chip/h00/chip.20000210.html#a2. [Accessed April 12, 2008]. 208

automatic registration (apparently without an analysis of why young people do not register voluntarily), but there is no consensus about whether the act of voting itself should remain compulsory or be made voluntary. The leader of Chile's Humanist

Political Party Tomas Hirsch adds another dimension to the problem by noting that a

CEP poll conducted shortly after the 2005 presidential elections revealed a clear preference among young people for the positions held by Hirsch's egalitarian Junto

Podemos Mas Coalition.358 Politicians with vested interests in preserving a social structure reflecting the current relations of ruling will surely take note of this poll as well as other precedents - the votes of young people against Pinochet's 1988 plebiscite for continued rule is considered to be a decisive factor leading to his defeat. 359 In this regard, we can anticipate that, before any drive to increase voter registration occurs, young people will be the focus of voter education programs to school them in officially-sanctioned ideology, as were workers and women in previous eras, with the goal of ensuring that, once registered, they mark their ballots in support of the established relations of ruling

In general, we can see that political rules growing out of Chile's constitutional

law reflect the belief that the state should have minimal influence over economic

activity, as is coveted by classical liberally theory. Schamis summarizes how

358Tomas Hirsch. 2008. Interview by author. Santiago, Chile. March 10.

359 Young People and Politics not Mixing: Politicians Said To Be Ignoring Youth Concerns." (February 10, 2000). Chile Information Project -- "Santiago Times" -- Political, Environment, Human Rights, Economic News. http://ssdc.ucsd.edu/news/chip/hOO/chip.200002 l O.html#a2. [Accessed April 12, 2008]. 209

fundamental tenets of the constitution, complemented by corollary constitutional-level legislation, help to institutionalize a society governed by classical liberal ideology.

The [constitutional] commission rejected the entrepreneurial state and the constitution explicitly required a law of qualified quorum to allow the state to engage in any entrepreneurial activity (article 19, precept 21). State roles in sectoral policy and regulation were curtailed by a norm that impedes any form of discrimination among economic sectors, activities, or regions (article 19, precept 22) and by additional legislation that liberalizad areas such as foreign investment and public utilities. (Decree law 600 in 1974) and article 91, Constitutional Organic law of the Central Bank). Nontariff barriers to trade - licenses, quotas, and permits - were prohibited (article 88, Constitutional Organic Law of the Central Bank). The constitution also specified the 'protection of economic freedom,' banning the government from interfering with the exercise of legitimate economic activities on the part of private agents (article 19, precept 26). In stark contrast to the 1925 constitution, social security was included in the areas now open to private firms (article 19, precept 18). The new status of private property signaled another significant departure from the 1925 constitution. The 1980 constitution secures the right to property (article 19, precept 24) as did the previous constitution, but establishes, in contrast, immediate compensation and cash payment in case of expropriation (which, in turn, could only be decided by law and not be decree) and determines that qualifications derived from the social function of property cannot impose conditions, levies, or restrictions that obstruct the free exercise of private property (article 19, precept 26).360

With regard to its own fiscal policy, the 1980 Constitution had provided the

Executive branch of government with the authority to prepare the national budget

(Article 64). Parliament, in turn, is obligated to review and approve the budget within

60 days of receiving it (or it is automatically authorized) and parliamentary authority over the budget is limited to reducing, approving or rejecting expenses. One "special power" given to the President in Article 32.22 is "to watch over the collection of pubic revenue and decree its expenditures in accordance with the law." The President may

decree payments outside of the budget in the case of calamity, disturbance or danger to national security - with the proviso that "the total investment made toward such

objectives shall not exceed a 2% per annum of the total expenditures authorized by the

360 Schamis, (2002), 73-74. 210

Budgetary Law" (Article 32.22), confirming the principle of fiscal responsibility and the virtue of balanced budgets. While the State divested itself of the ownership of many of its assets, Article 24 of the Constitution contains a seeming anomaly, dictating that the

State has absolute, exclusive, inalienable and imprescriptible domain over all mines, including guano deposits [nitrates], metalliferous sands, salt mines, coal and hydrocarbon deposits and the other fossil substances, with the exception of superficial clays, despite the ownership held by individuals or body corporates over the land in which the above should be contained.

In this way, in contrary to classical liberal logic, the State retained control over the all-important (and lucrative) copper mines that had been nationalized by the

Allende government. 361 This provision gains importance when added to the fact that, prior to leaving office, General Pinochet had changed the wording found in provisions of a 1952 copper reserve law that allocated 10% of profits from copper sales to 10% of revenues from copper sales (simultaneously reducing government revenues available for other types of expenditure), guaranteeing a minimum income stream for the military arms purchases that, in 2007, reached close to US $1 billion, yielding a

361 In an article written for the libertarian thinktank the Cato Institute, Jose Pinera (intellectual author of Chile's privatized pension plan) explains this abberation from classical liberal economic theory as a result of"an unexpected disagreement within the government (generals vs. economists)," in which the generals, who saw the value of ensuring an ongoing independent source of revenue for the military were at odds with the private enterprise and small government prescriptions proposed by their civilian advisors. (Pinera, p. 295) Mr. Pinera maintains that the first calls to amend the 1980 Constitution began "they day after the Constitution was approved by referendum" specifically because the Constitution left Chile's mines under government control and thereby had "failed to reinstate the traditional property rights in the mining sector." After the military's needs were met, Pinera designed the Constitutional Mining Law (CML), which was approved in December 1981. Under the CML framework the State grants private enterprises concessions to manage sectors of the economy that are usually the responsibility of the State. In this way the CML creates market incentives to continue to find and extract copper ore by offering "full concessions" to private mining companies who have the legal right to treat the concession as a "property right" (Pmera p. 298). In the same article Mr. Pifiera states that privatization of other state-owned companies, particularly in the power and telecommunications sectors were modeled on the CML (p. 300). 211

spending rate of US $90.88 per inhabitant.362 The implications of these two provisions are significant, for together they created a large, perpetual, autonomous source of funding for the Chilean military. This act by Pinochet to ensure an ongoing source of funding for the armed forces, independent of civilian control suggests that the general may agree with an observation later made by Schamis that economic liberalization does not necessarily lead to a reduction in State power, but may actually lead to simply a reorganization or possibly even a reassertion of State power, not to redistribute economic wealth, but to reinforce political rules and protect private property:

through comprehensive reform experiments the state has withdrawn from key markets, leaving a number of allocative functions to the private sector, domestic or foreign. But at the same time these programs involve a stricter specification and enforcement of property rights, the empowerment of new winning coalitions, the reorganization of revenue collection mechanisms, and the centralization of fiscal policy and budgetary procedures, among other institutional consequences.363

Haughney provides us with additional insight regarding the implications of

Article 24 (that protects State ownership over Chile's subsoil and mineral deposits), in the context of economic liberalism's commitment to support private enterprise:

Although the Chilean state continues to 'own' subsoil resources, it sells the right to explore for and exploit mineral resources and water. The military regime amended the mining and water codes to promote private exploitation, and reduced or eliminated the state's power to supervise or regulate private use of these 'national' resources. 364

362Larry Rohter. "Chile Copper Windfall Generates Hard Choices," in New York Times online edition published January 7, 2007. Found at http://www.nytimes.com/2007/0l/07/world/americas/07chile.html? r=2&ref=americas&oref=slogin&o ref=slogin on January 1, 2008.

363Schamis (2002), 6.

364 Haughney (2005), 91. 212

Thus it would seem that, after first assuring that Chile's all important mineral deposits would provide an open-ended funding stream for the military, the right to exploit those mineral deposits would be sold to private interests under the

Constitutional Mining Law (CML). Under the CML the Chilean State has developed the practice of selling the rights to mineral exploitation to private enterprises, which must dig under the topsoil to reach the government's subsoil. Further, as discussed previously, in their efforts to maximize profits, these private firms often employ their workers on temporary contracts or subcontracts, thus avoiding any obligations to pay social benefits (such as health insurance) or provide the workers with long term employment or severance pay. Such arrangements are reminiscent of the flexible labor provided by Chile's landless peasant class of the 19th century, before unions and political parties mobilized them to demand political, economic and social rights. Jorge

Nef describes the flexible laborers as "informales [informals], who are only loosely and in a fragmentary fashion integrated into the job market [with] very limited capacity to bargain, organize, and mobilize." Nef further notes that many corporations, including those working in the mining sector, are also informal, which means that "they do not confirm to the norms contained in safety, health, labor, or environmental regulations" and rely heavily upon the cheaper, non-unionized flexible laborers. 365 Consistent with classical liberal theory, this arrangement helps make

Chile competitive in the globalized economy by keeping wages low and profits higher.

Once again we see that Chile's legal system reflects "extra-local" values supporting

365 Jorge Nef. September 2003. "The Chilean Model: Fact and Fiction," Latin American Perspectives , vol. 30, no. 5, 20. 213

elitist interests while ignoring the everyday realities of hardship and poverty they create for the Chilean working class.

In March 2000 Ricardo Lagos assumed the presidency in Chile at the helm of the third Concertaci6n administration, promising the people of Chile a New Deal

(Nuevo Trato ), albeit under the continuing tenets of the neoliberal, export-oriented model. While in office Lagos signed free trade agreements with the European

Community, the United States, South Korea, The People's Republic of China, New

Zealand, Singapore and Brunei. A Canadian-Chile Free Trade Agreement has been in effect since 1997. Free trade agreements have existed with Mexico since 1998 and with Costa Rica since 1999. In 2006 Chile signed free trade agreements with Japan,

Panama, Peru and Colombia and in 2007 concluded free trade negotiations with

Guatemala. Classical economic trade theory argues that each country is best off exporting products in which it holds a comparative advantage. For Chile, this has translated into an economy that specializes in the export of primary products - minerals, such as copper and nitrates, along with agricultural products, such as fruits and vegetables, and forestry products, such as wood and wood pulp. As we know, successful competition in a free trade environment requires low prices -- which have been achieved in Chile through the use of low-waged labor and low-cost exploitation of its abundant natural resources.366 Do everyday Chileans agree with the outcomes of this economic model? Apparently not all of them do. Opposition to the model is rife in present-day Chile, manifesting itself in ongoing conflicts and strikes related to wage

366 Frank also notes that the construction, service, and finance sectors are important in Chile's economy (page 60). 214

and contract disputes, especially for contract laborers (who make up the "flexible"

labor force) as well as protests by environmentalists and Mapuche indigenous groups

over land use and the encroachment of unwanted economic interests upon their traditional lands.

In terms of Chile's legal framework, women have gained ground under the

Concertaci6n governments. One clear example of the government's desire to

institutionalize equality between men and women is found in the 1999 constitutional

amendment that recognizes equal rights between women and men. Divorce was

finally made legal in Chile in 2004, helping women (and men) to formalize the end of

unhappy unions. While divorce is often equated with leaving unfulfilling or abusive

relationships, such independence has economic ramifications as well, by helping to

establish a legal basis upon which to ensure paternal responsibility for child-related

expenses and for alimony. However, while Chile's constitution declares official

equality between men and women in the public sphere, other areas of Chile's legal

system still recognize the legal authority of the husband over the wife in the private

sphere, with far-reaching implications for her in everyday life. Subordinating the

married Chilean women to her husband, for example, means that she cannot make any

major financial commitment without the approval of her legal spouse, even if they

have lived separate lives for years, or if the husband has abandoned the family and his

whereabouts are unknown.367 Divorce dissolves that economic tie as well, restoring a

sense of equality for divorced Chilean women, at least.

367 The implications of this dilemma are poignantly illustrated in the case of Sonia Arce Esparza v. Chile that was accepted by the IAHCR for review in 2003 and is currently making its way 215

Despite legal advances, persistent inequality between men and women is manifest in other ways as well. With regard to the workplace, the country's Survey of

National Socioeconomic Composition (CASEN) released a study in September 2007, which, in addition to confirming the common practice of paying low wages (often below the legal minimum), revealed ongoing discrepancies between the salaries paid to men and women. According to the study, female workers are consistently paid at significantly lower rates than males and are less likely to have employment contracts than males, translating into vulnerable working arrangements with no benefits.

Further, as we find elsewhere, female-headed families are more likely to live in poverty, compared to male-headed families. 368 Domos, the Santiago-based Center for the Development of Women, highlights CASEN' s findings regarding the working poor in Chile as follows:

A total of 1,066,454 Chilean workers earn less or equal to the monthly minimum legal wages, which is 108,000 pesos (in November 2006). Of this group, 779,961 are salaried and 286,493 are not salaried workers, as revealed by the Survey of the National Socioeconomic Characterization (CASEN) 2006 regarding work and income, which, in addition, establishes that women with basic education earn 67 .8% of male income; women with higher education only earn 61.4% of male income. At a higher level of education the income gap between men and women grows while the gap between those who do not complete basic education is 20%. Among those who

through the Inter-American System for the protection of human rights. The case questions the constitutionality of Article 1749 (and several corollary articles) of the Chilean Civil code which authorizes a husband to act as the sole administrator of his wife's goods. Since Ms. Arce is unable to locate her husband, and since the code recognizes her husband as sole administrator of her goods, she is effectively unable to negotiate any transactions with regard to real property she inherited from her parents after their deaths.

368 Serie Analisis de Resultados de la Encuesta de Caraterizacion Socioeconomica Nacional (CASEN 2006). Junio 2006. No.I La Situaci6n de Pobreza en Chile. www.mideplan.cl [Accessed February 13, 2008], 15. 216

have completed their education [and have graduated from high school] the gap is 36%.369

In this respect, although Chilean women can claim some progress in terms of having secured constitutional recognition of equality, the idea of equality between men and women is unevenly present on all levels of Chile's legal system and common practices perpetuate an unequal access to economic power, especially with respect to, property rights and wage income, which both advantage men over women.

In the 2005 elections, two women stood as frontrunners to be the presidential candidate for the Concertaci6n coalition. In the end, that honor went to Michele

Bachelet, who was elected as Chile's first women president in 2006. A divorced woman and single mother, a former torture victim and political prisoner who lived several years in exile, a practicing agonistic and a confessed socialist, Bachelet came to office proclaiming hers was a "Citizens' Government" and promising to "listen" to the Chilean people, reflecting a desire to know the lived experience and understand the truths embodied in the local actuality of all her constituents. Bachelet is fortunate to have assumed office during a period of economic growth and prosperity, but this macro-economic success masks the chronic underlying micro-economic issues related to poverty, unemployment, housing, education and health that is the lived experience of a majority of Chilean citizens. In 2007 Wachter gave us a glimpse into this world:

not only does 18.8% of the population live under the poverty line and 5% are considered indigent, but it is one of the Latin American countries with the highest disparity levels, surpassed only by Brazil and Paraguay. Inequality (according to the Gini) reaches an index of 57.1, which means that while 20% of the population

369 Mas de un mil/on de chilenos gana menos o igual al ingreso minima http://www.domoschile.cl/sabias/sabiasque45.html [Accessed April 12, 2008) The value of 108,000 Chilean pesos was about US $205 in November 2006. 217

possesses 62% of the national income, another 20% possesses only 3.3% of the income. 370

While clearly stating that she would not attempt to dismantle the neoliberal economic model, Bachelet promised to address social issues related to poverty

(especially in the areas of education and health) while promoting gender equity.

Bachelet also came to office with a commitment to continuing the efforts to dismantle the authoritarian legacy of Pinochet, tasked with eliminating or altering the binomial system to create an electoral system based on proportional representation. 371 But this second goal remains illusive -- and unattainable -- without high levels of congressional support, which would have to include support from the conservative parties that benefit from the binomial arrangement.

While Bachelet's stance vis-a-vis the economic model may be interpreted by some as a reasoned approach designed to reach out to all sectors of Chilean society

(including economic elites), others surely understand that Chile's constitutional framework allows for a very limited range of policy responses to social issues affecting the economically poorer members of Bachelet's constituency. Still others, acutely aware of the limitations imposed by Chile's constitutional framework, also understand that these limitations create an unbrigeable chasm between a political discourse that embraces the ideas of social justice and equality and the real-world

370Paola Wacheter. "Chile, Bachelet Style" available at www.cipresearch.fuhem.es/pazyseguridad/docs/Chile, Bachelet style.pdf. Accessed 27 February 2007, 3.

371 This commitment was extracted as a condition for support from the left-wing "Junto Podemos Mas" (Together We Can Do More) coalition formed in December 2003, which threw its support to Bachelet during the second round runoff elections. Source: www.thedailyjournalonline.com/article.asp?Articleld=209412&Categoryld=l 4094 - 26k - 218

policy options available to them under a relations of ruling guided by classical liberal ideology.

To be plain, constitutional level protections of economic liberalism, together with constitutional level limitations placed upon political liberalism, render political promises to address equity issues largely symbolic, ensuring that profits will continue to accrue to property owners, that the dreams that young people have of self­ actualization and of finding meaningful employment will remain illusive, that workers' will continue to live in conditions of economic vulnerability, that women will still make up the ranks of low wage earners, that families will still not be able to meet the educational, economic and health needs of their children, that natural resources will continue to be valued in accordance with market interests, that government mediation in economic activity will remain restricted, and that the probability that voters will be able to elect policymakers who will change Chile's legal structure will remain unlikely. In this regard, while Concertaci6n discourse may reflect pluralistic values similar to those espoused by the progressive Junto Podemos

Mas coalition, the policies implemented by any administration will be forced to conform to the tenets of classical liberal values that are embedded in Chile's master political frame, the Constitution of 1980 (see Figure 20).

Bachelet's election in 2005 was initially greeted with widespread anticipation.

By October 2007, however, President Bachelet's approval rating has plummeted to

35.3%. In the meantime, public protests and open debate about unresolved social 219

problems rooted in economic inequality began popping up across the country soon after Bachelet assumed office in January 2006 as her country's "listening" president.

Figure 20: The Bifurcation between Concertaci6n Discourse and Policy Options

Constitution of 1980 tas amended through 2005)

Alliance for Chile Coalition

I UDI ! RN I ! (1 § (") (I) 1------,,i------·-·-·-·i-· (") o~ ti '"C ::s ~- ~ g g. ;;:i ~ (I)

Junto Podemos Mas (Together We Can Do More) (Leftist Socialists, Communists, MIR, Christian Left, and others)

While, in the post-Pinochet era, the discourse of the four Concertaci6n Administrations has consistently reflected pluralistic principles, Chile's legal structure reflects classical liberal ideology grounded in broad economic liberalism accompanied by reduced political liberalism.

This situation creates a bifurcated posture by Concertaci6n Administrations which reiterate their commitment to "growth with equity" under a legal framework whose design promotes "growth with inequity." In this regard, while Concertaci6n discourse may reflect pluralistic values closer to those espoused by the progressive Junto Podemos Mas coalition, its policies will more likely reflect the classical liberal values espoused by the conservative Alliance for Chile Coalition. 220

From April to June 2006 high school students across Chile staged ongoing protests, in which up to 790,000 students participated, to demand free bus fare and a waiver of university entrance fees - along with the abolition of the Organic

Constitutional Law on Education (LOCE) and an end to the subsidy system for education that resulted in a tiered-system.372 The government's response was to promise additional funding and educational reforms, to create an Advisory Council on

Educational Quality to study the issue. The proposed legislation that came out of this process is in the processing of being made law - and is, itself an inspiration for ongoing protests by students who see little difference between the new law and LOCE.

In mid-August 2007, Bishop Alejandro Goic sparked national controversy by issuing a call for an "ethical wage" that would be double the national minimum wage.

Bishop Goic saw this as a way to reduce the high levels of income inequality in Chile.

President Bachelet's response was to create a 48-person Equity Commission to study the problem, which issued its final report reaffirming the government's commitment to growth with equity in May 2008.

A society with unresolved inequities is a propitious space for the appearance of confrontational discourse, climates of distrust and confrontation. These situations upset our coexistence, harm to consolidation of a harmonic system of labor relations, and even, in the medium term, can affect the conditions of competitiveness or our economy and its potential for growth. 373

Chile's largest labor union, CUT, added its voice to the public debate over low wages in late August 2007 by staging the largest labor protest in twenty years to

372Proposed legislation to reform LOCE was drafted in November 2007 with the goal ofraising the quality of primary and secondary school education. The final language of the proposed legislation has met with opposition from student groups in May-June 2008, who charge that the educational system it will produce is virtually the same as that produced by LOCE.

373 Consejo Asesor Presidencial Trabajo y Equidad, 3. 221

underscore their frustrations with "social inequity."374 Two months later a budding alliance of Chilean NGOs created a stir by staging a small, peaceful demonstration in downtown Santiago, calling for greater equality in Chile, echoing the calls from

Bishop Goic and the CUT for equitable wages, while workers in the mining, agriculture and fishing industries stage periodic protests and strikes to demand better wages, benefits and working conditions. What could be interpreted as the Equity

Commission's position vis-a-vis these calls for State intervention to provide tangible

allevation of poverty can be found in a paragraphy in the Commission's final report

that opens by referring to John Rawls' A Theory ofJustice to reason that "in a society

in which in inequity exists it is required that the State implement the priniciple of

equal opportunity" and ends by asserting that "the commitment to the poor is to grant

them basic rights, but that the poor also have the individual responsibility to overcome

poverty. "375

Indeed, discussions of Chile's highly inequitable income distribution has

become commonplace in public discourse, serving as the focus of various reports and

studies. One other example can be found in an economic survey on Chile by the

OECD in November 2007 that similarly observing high levels of poverty and income

inequality and similarly expresses an interest in reducing income inequality.

Employing classical liberal logic to find solutions, the OECD report recommends

encouraging a higher participation of females and youth in the labor force:

374Although using the same acronym, CUT, the post-dictatorship labor union (Central Unitaria de Trabajdores) is not nearly as powerful as the pre-dictatorial CUT (Central Unica de Trabajadores)

375 Consejo Asesor Presidencial Trabajo y Equidad, 5 222

Efforts should be made to raise labour force participation further, especially among females and youths. This is important for lifting the economy's long-term growth potential, reducing poverty and improving income distribution. Participation is low for females and is trending down for youth, due essentially to rising school enrolment. 376

Other recommendations in the OECD report include making "employment protection legislation (at least for indefinite contracts) more flexible" and creating more access to child care facilities so that women can work outside the home, a fleeting acknowledgment of the fact that many Chilean women do not engage in productive, wage-based labor because their time is committed to carrying out unpaid reproductive labor.

It is beyond dispute that creating conditions that allow women to participate more fully in the labor market will surely give women more financial independence and, in this regard, may realign power relationships between men and women, especially at home. On the other hand, given the disparity of pay between men and women at all levels, it is difficult to understand how having more women working will decrease income inequality for individuals - a large influx of labor into the market may actually depress wages, especially at the lower levels (where the legal minimum wages is not always paid, as we have seen). The explanation for this seeming contradiction can be found by carefully parsing how income inequality is defined in textually mediated discourse. Income inequality is not measured by individual earnings, rather it is measured by household earnings. So while individual wages may not be high, household wages could, theoretically, increase substantially if wives join the labor market as wage earners. Such a feat would be a diplomatic coup, allowing

376 OECD Economic Surveys: Chile. November 2007. www.oecd.org/publishing/corrigenda. Volume 2007/20 Supplement No. 2, 9. [Accessed February 11, 2008]. 223

textually mediated discourse to announce that income inequality for households has been substantially reduced in Chile - without reaching into the employer's pocket to redistribute wealth via a higher wage rate. What would remain invisible in officially sanctioned reports would be an acknowledgement that accomplishment was achieved by doubling the amount of work expected of women who must now engage in both productive and reproductive labor. Further communication with one of the authors of the report confirms that this thinking shaped the report's recommendations. Diego

Moccero writes:

In fact the same argument that explains a reduction of poverty also explains a reduction in income inequality across households. This is because participation tends to be lower for women that belong to lower income quintiles. Indeed, an increase in participation levels, especially for poor women, would boost household income and reduce income inequality with respect to [the betterment] ofhouseholds.377

In sum, two-income households could result in a significant reduction in household income inequality -- especially if increased numbers of poor women participate in the labor market while wealthier women opt to not participate at increasing levels. But the report is silent on the day to day implications of its recommendations. Specifically, the analysis does not recognize that two-income families, especially those with children, also face higher costs in the form of childcare, transportation and clothing reducing the amount of disposal income made available through the second income. It does not discuss how the time consuming household tasks customarily carried out by women would be completed each day. Nor is there any discussion of the impact of a large increase in available workers upon the prevailing wage rate in the labor market. In sum, although providing support for

377 Diego Moccero, email message to author on April 10, 2008. Emphasis added. 224

women who desire to enter the labor market by providing affordable childcare and through other programs would foster financial independence for women and improve conditions in female headed households, proposing this policy option as a solution for income inequality in Chile puts the responsibility to resolve this issue on the backs of women, leaving the stratified hierarchy of economic production required by liberal capitalism untouched and intact.

The above analysis once again reveals the real-world vacuum in which the relations of ruling discuss how the improvement the economic situation of the Chilean working class. In December 2007 Chilean newspapers were reporting that, after three months of study, the Ethical Wage Commission established by President Bachelet had made preliminary recommendations of establishing a "minimum family wage of US

$400-$500 per month" to President Bachelet, echoing the logic of measuring income by household.378 While the Commission's final repo1i issued in May 2008 indicated

that its members were not able to agree on the merits of adjusting the minimum legal wage, the members did agree on "the need to promote policies that provide incentives for the full incorporation of women in the labor market. This is due to the impact that

the existence of a second income in the home has on overcoming pove1iy and the reduction of vulnerability."379

378"Chile Commission Calls for Minimum Family Wage" (December 3, 2007) www.santiagotimes.cl/santiagotimes/content/view/12414/l. [Accessed December 13, 2007]. We should also note that a household consists of more than a husband and wife, and would include working children, young people and possibly pension payments to retirees in the analysis.

379Consejo Asesor Presidencial Trabajo y Equidad. (May 6, 2008) Hacia Un Chile Mas Justo: Trabajo, Sa/aria, Competitividad y Equidad Social, 17 http:// http://www.trabajoyequidad.cl/view/index.asp [Accessed June 14, 2008] 225

In the meantime, Mapuche activists who had mobilized under Pinochet in the early 1980s have been challenging Chile's relations of ruling in the post-dictatorship era as well. Ongoing conflicts between the Mapuches and the Chilean State are deeply rooted in differences between indigenous and European-inspired culture, especially with respect to issues about the use of land and natural resources. These conflicts have become increasingly protracted as the State insists upon exercising its authority to give commercial interests access to natural resources (especially water and forest products) found in areas considered as traditional Mapuche land. In response,

President Aylwin had signed a law, passed on October 5, 1993, that was intended to resolve some of the longstanding land issues while recognizing the State's duty "'to respect, protect and promote' the development of the indigenous inhabitants both as human groups and as individuals." The law also established both an Indigenous

Development Corporation (CONADI), with a leadership comprised of indigenous and non-indigenous members, which was responsible for implementing State policies regarding Chile's indigenous people and an Indigenous Development Fund to transfer

economic resources to indigenous communities through small-scale targeted

assistance programs.380 Haughney notes, however that this law, "unlike the 1972 law,

did not seek to restore lands usurped from the reducciones in a comprehensive

manner, but only by a case-by-case review of title disputes, rendering the impact of

1993 law as largely symbolic. Nor did the Concertaci6n coalition pursue an

380 "Fourteenth periodic report of States parties due in 1998: Chile. 28/10/98. CERD/C/337/Add.2. (State Party Report), "General Aspects of Racial Discrimination in Chile" and "The New Indigenous Act of 1993" and Haughney (2005), 187 and 217. 226

amendment to Article 1 of the Constitution that would formally recognize the separate identity of indigenous peoples in Chile, which Haughney notes is a principle demand of indigenous rights activists.381 Instead, what indigenous people have experienced is the ongoing encroachment by logging companies and other commercial agricultural interests upon land claimed by the Mapuches

Chile's logging sector, however, has become one of the leading economic sectors because of state support, and, indeed, is a prime example of the extreme concentration of wealth and resources fostered by the military regime's neoliberal restructuring. Before the mid-1990s, the Chilean state had promoted the logging sector by special incentives beneficial to industry and property holders, large and small, as well as through state enterprises. After the coup in 1973, the military regime sold state­ owned enterprises and lands at 'fire sale' prices to private investment conglomerates of national and foreign capital, leading to concentrations of wealth and resources that surpassed pre-1973 levels. In addition, and contrary to neoliberal principles, the military regime gave logging companies enormous subsidies for establishing tree plantations and tax exemptions for maintaining them. By the 1980s, the logging sector had become the third most important earner of foreign exchange, after mining and export agriculture. The conglomerates dominate the logging sector, controlling numerous subsidiaries and subcontractors with a mostly seasonal, low- paid work force. Approximately 75 percent of the work force in the forestry sector is hired on a contract basis, with little or no benefits or union organization; the organized labor force is in the paper mills and wood pulp factors. This structure exemplifies the neoliberal production pattern, and reproduces the concentration of wealth and the 'socialization' of negative impacts on local and regional economies. 382

As an outcome, Mapuche leadership has indicated that it is no longer satisfied by social programs that offer palliative income transfers from the State. Instead, as with other indigenous groups across Latin America (most notably the Zapatistas in

Mexico), they now are demanding the right to once again question and challenge

European-inspired relations of ruling - they require greater autonomy over their own territories, and the right to create within their communities a relations of ruling that expresses their own values, including a sacred regard for the land, sea and sky

381 Haughney, 7.

382 Haughney (2005), 89-90. 227

Today Mapuche organizations call for control of territories and resources and the constitutional recognition of their status as 'a people'. . .. Neoliberal philosophy claims to defend the liberty of citizens against encroachments by the state. In practice . . . neoliberal institutions legally separate the economic sphere from the political sphere, restricting the scope of public oversight and decision making and enlarging the freedom of economic activities. This definition of the 'public' and 'private' is one of the fundamental sources of erosion of social and economic rights. . .. Within the principal political parties, no critique has yet emerged of the neoliberal model itself. Both ideologically and institutionally, none of the principal parties has incorporated the challenge of the current political demands of the Mapuche, which would require a check on the power of transnational corporations and on the principal of a unitary 383 state. It is a situation that promises more conflicts and political mobilization."

On October 15, 2007 approximately 4,000 indigenous Mapuches and their

supporters marched in the streets of Santiago to protest "500 Years of Denial" As one

of many public expressions of indigenous resistance to modern-day Chilean social

organization. Other acts of dissent include the staging ongoing protests, hunger strikes

and occupations of farmlands they charge have been usurped. Another important venue used by indigenous rights activists to challenge the relations of ruling has been to the use of international law as a means of forcing the Chilean State to respond to their demands. To this end, indigenous rights activities presented the complaint of

five indigenous Penhuenche women before the IACHR in December 2002. The brief

claimed that the rights of these women had been violated by the construction of the

Ralco Dam that inundated their traditional lands with water. The IACHR sided with

the women, and in a friendly settlement signed in October 2003 the State of Chile

agree to compensate the complainants, and also to ratify the International Labor

Organization's Convention 169 concerning Indigenous and Tribal Peoples in

Independent Countries that calls for "the full realisation of the social, economic and

cultural rights of [indigenous] peoples with respect for their social and cultural

383 Haughney, 187 and 217. 228

identity, their customs and traditions and their institutions," among other things.384

While financial compensation has been paid, long lasting structural changes, such as ratification of Convention 169, have not yet occurred, leaving the relations of ruling intact, and bereft of formal recognition of the separate identity claimed by Chile's indigenous people. What has occurred, according to Jose Aylwin, Director of the

Observatorio de Derechos de los Pueblos Indigenas (Observatory of Rights of

Indigenous Peoples) has been ongoing harassment and close monitoring of human rights defenders and activists committed to promoting indigenous rights in Chile.

Indeed, Mr. Aylwin gave testimony at a thematic hearing before the IAHCR in March

2008 on this very subject.385

In sum, would seem that demands for social change similar to those led to the polarization of Chile's society in the late 60s and early 70s are surfacing again in the current environment of political openness. Whether debates engendered by inclusive public discourse from will lead to a more inclusive relations of ruling or to social instability followed by social control is uncertain. But what is certain is that the relations of ruling created by the Pinochet regime were designed with the need to withstand pressures for change in mind. This reality suggests that calls for changes that would allow political liberalism to flow freely across Chile's social structure will most likely occur outside of officially prescribed political processes, and count instead upon creating pressure via social movements (such as the students' movement,

384Convention (No. 169) concerning Indigenous and Tribal Peoples in Independent Countries Adopted on 27 June 1989 by the General Conference of the International Labour. http://www.unhchr.ch/html/menu3/b/62.htm. [Accessed April 11, 2008).

385 Jose Aylwin, interviewed by author, Temuco, Chile, March 4, 2008. 229

increased workers strikes and protests by Mapuches) or via the use of international human rights bodies that are empowered to hold the State accountable to international human rights standards, such as has been done by both the Mapuches and women's rights organizations. CHAPTER 12

CONCLUSION

In the middle ofthe night I ask myself, what will happen to Chile? What will become ofmy poor, poor, dark country?

From loving this long, thin ship so much, these stones, these little farms, The durable rose ofa coast that lives among the foam, I became one with my country. I met every one of its sons and in me the seasons succeeded one another, weeping or flowering. Pablo Neruda, Chilean Nobel Laureate

Lessons from Western, Christian Civilization

Liberalism has provided the guiding intellectual influence for western,

Christian civilization for so long that we seem to have forgotten its humble origins as a struggle between English propertied classes and their king. The basic tenets of the two fundamental facets of liberalism are both simple and at odds with each other: while economic liberalism urges us to maximize self-interest as individuals, political liberalism requires that we consider restraint, acknowledging the point at which the rights of others begin. In western, Christian civilization we also find two predictable dynamics: economic elites and their advocates tend to promote economic liberalism, arguing that increased production is key to a healthy society while the lower classes and their advocates tend to promote political liberalism, arguing that a society must be inclusive to be stable. Indeed, political inclusiveness leads to economic inclusiveness, as history confirms. Around one point there is little controversy: free, unmediated

230 231

capitalism leads to economic inequality. Political liberals find this objectionable.

Economic liberals find this natural. This paper has argued that these co-existent and

opposing principles in western thought have settled into the shape of four basic

ideological frameworks that interpret everyday life through their own values and discourse, often creating a relations of ruling dependent more upon the abstract theories of intellectual elites than truths emanating from the physical experience of

people living under them.

While the word "liberal" implies free movement, liberal ideology was

hardened into its classical liberal form through the conscious decision by elites to not

distribute political power equally to all comers of the land, in order to set up a

structure under which property owners retain maximum control over the production

process and its outcomes. The overlaying of stratification by class Gustified by the

economic model) upon stratification by national origin, culture or gender Gustified by

traditional values or cultural norms), both supported by the political regime, added

sufficient complexity to obscure the purposefully elitist nature of the liberal order.

Indeed, while liberal ideology promises an equal opportunity to swim - it ignores the

context of local actuality -- a sea of unequal opportunities and probabilities of success.

What remains hidden by these rhetorical devices is the invisible hand of elitist interest

that shapes the relations of ruling by reproducing the fragmented conscious it requires

to avoid addressing policy issues from the perspective of subordinate groups, all in the

name of liberty. In other words, the likelihood of self actualization, dangled as the

goal of cultural liberalism, is conditioned by restrictions inherent in economic 232

liberalism and cemented in place by rules that stratify access to political power by economic power.

As the dominant socio-economic paradigm in Western civilization since the late 17th century, liberal capitalism has had to contend with alternative proposals that emerged for distributing power, either narrowly or broadly, expressed in three alternative paradigms, traditionalism, revolutionary populism and pluralism; which themselves have splintered into an infinite array of ideological constructs. Under each paradigm, the State is responsible for codifying social relations via a legal system congruent with both the underlying culture and the overarching vision - and of maintaining stability by enforcing rule of law under that system. Constitutions customarily serve as the basic referential text for the construction of the relations of ruling that guides everyday life.

Although a strong correlation has been found between stable democracy and lower levels of economic inequality, which comes first is a classic chicken-and-egg question. Economic liberals assert that more equitable distribution of economic resources is a long-term product of a growing economy, whose benefits will "trickle down" to the masses. In 1959 Lipset introduced his seminal theory that a country's chances of sustaining democracy depend fundamentally on its overall level of wealth, implying that developing countries will evolve into democracies as they become richer. This implies that the largest gains in democracy should occur in countries at intermediate levels of development and on their way to becoming wealthy. But while wealthy, first world countries have successfully transitioned from society characterized by highly inequitable income distributions to one allowing for some 233

redistribution of economic wealth to the lower classes, this kind of transition has proven elusive to many middle income countries, such as Chile.

Boswell and Chase-Dunn assert that, given the undemocratic nature of most middle income (semi-peripheral) countries, any successful attempt to install a socialist framework (or a broad redistribution of economic wealth) will require "the revolutionary taking of state power."386 Indeed, the experience of middle income countries such as Brazil, Chile and Argentina in 1960s and 1970s challenged Lipset's theory with the stark reality of democracies succumbing one by one to dictatorship.

Subsequent analysis suggests that high levels of income inequality make a democratic political system difficult to maintain, and some have now concluded that income inequality (the relative distribution of wealth) "is probably the principal structural reason why countries at intermediate levels of economic development often have difficulty sustaining stable democratic systems of government."387 This point should not remain unnoticed in today's world of generic, rising income inequality.

Political liberals insist that the very logic of economic liberalism makes the probability that economic activity will redistribute income and/or wealth away from the wealthy highly unlikely - without a State-led intervention. This same point was made by Chilean economist Orlando Letelier shortly before he was murdered by agents of the Pinochet regime:

This is not the place to evaluate the general validity of the postulates advanced by Friedman and the Chicago School. I want to concentrate only on what happens when their model is applied to a country like Chile. Here Friedman's theories are especially

386Boswell and Chase-Dunn, 7.

387Edward Muller. "Economic Determinants of Democracy." American Sociological Review 60 (December 1995), 980. 234

objectionable - from an economic as well as a moral point of view - because they propose a total free market policy in a framework of extreme inequality among the economic agents involved: inequality between monopolistic and small and medium entrepreneurs; inequality between the owners of capital and those who own only their capacity to work, etc. Similar situations would exist if the model were applied to any other underdeveloped, dependent economy.388

The outcome implied by the above analysis 1s a growmg concentration of wealth in any given society. History would tend to agree with Mr. Letelier on this matter.

While advocates of political liberalism look to "macro" (society level) structural impediments influencing economic outcomes, advocates of economic liberalism prefer to focus on "micro" (individual level) impediments influencing economic outcomes. For example, as industrialization took hold in the 19th century it was deemed important for the State to ensure literacy - although how much and what kind of education was a point of contention, as we have seen. In the theoretical world of liberalism, education is often seen as an equalizer of opportunity that will resolve

"macro" level impediments by sparking an impetus towards a more equal distribution of economic wealth, through market forces. These are the words of Arnold Harberger:

In the final analysis, the real answer to the distribution problem - of course, a very long-term answer - is education and social mobility. The abiding problem here is discrimination, both direct and indirect, against large segments of society. This problem has to be faced, and the affected groups have to be brought into the structure of society - not only by providing them with skills to make it possible for them to operate more productively, but also by breaking down the barriers that impede their rising to those places in society where they can make maximum use of their skills.389

Advocates of political liberalism find this analysis to be disingenuous, arguing that, while education is important, the broader distribution of economic resources is

388Letelier, 138.

389 Arnold C. Harberger. "Economic Policy Problems in Latin America: A Review." The Journal ofPolitical Economy. 78:4 (1970), 1010. 235

consistently associated with the forces of political liberalism, not economic liberalism,

a tendency which explains the historical reluctance of economic elites to give voting rights to the lower classes, thus shutting them out of negotiations about political or economic rules governing everyday life.

Political liberals argue that universal suffrage (male or otherwise) shifts the balance of power from the numerically smaller economic elite to the larger working

classes, who, through the legislation they enact, will reduce the economic gap between the rich and the poor, either through programs that redistribute income or property- or

both. Without the balancing power of political liberalism, economic liberalism

perpetuates a social structure based on inequality, Further, unless subordinate groups

internalize cultural norms that justify unequal access to power, the maintenance of

social stability will require increasing use of repressive coercive force, resulting in a

larger (not smaller) state. Further, without structures that allow the lower classes to

share political and economic power, the most obvious solution for dissenters is to

force a change in the relations of ruling through social protest or revolution and, in all

likelihood, the subsequent repression of opposing ideas. Lipset himself agrees with

this logic, born out by history:

A society divided between a large impoverished mass and a small favored elite would result either in oligarchy (dictatorial rule of the small upper stratum) or in tyranny (popularly based dictatorship). As these two political forms can be given modem labels: tyranny's modem face is Communism or Peronism; oligarchy appears today in the form of traditionalist dictatorships such as we find in parts of Latin America, Thailand, Spain or Portugal. ... The poorer a country, and the lower the absolute standard of living of the lower classes, the greater the pressure on the upper strata to treat the lower classes as beyond the pale of human society, as vulgar, as innately inferior, as a lower castes . . . Consequently, the upper strata also tend to regard political rights for the lower strata, particularly the right to share in power, as essentially absurd and immoral.390

390 Lipset, 69-105. 236

Chile's example affirms these observations, and brings home another fundamental truth: if tensions between economic liberalism and political liberalism are not resolved, the impetus is for society to become polarized between the tenets of ideological constructs and the truths emanating from experience living under those constructs. Further, if the impasse is not resolved through peaceful negotiations, it may eventually lead to repression, civil war, revolution or a coup d'etat. At such moments brute power, in all likelihood exercised by military forces (national or international), intervenes to restore order.

Salvador Allende had offered his country a peaceful path to socialism and a redistribution of economic power toward the lower classes. Indeed, US intelligence reports confirm that, while some high-ranking members of the UP government were prepared to maintain power by force, Allende himself was not. A redacted report

dated June 8, 1973 reads in part:

During [a meeting] which was attended by President Allende and his entire cabinet, the UP representatives without exception expressed the view that it was impossible to advance the UP revolutionary program if the government remained within the constitutional framework. President Allende disagreed with this opinion and strongly stated that it was fundamental for him to respect the constitution, despite the problems which are currently facing the country, as he agreed to do prior to his confirmation by the Congress in 1970. ... The UP leaders also discussed the possibility of Armed Forces intervention in the political process in Chile during the 5 June meeting, the UP leader's concluded that the did not have sufficient information to judge properly the possibilities of such a development. At the same time, they also concluded that the opposition is probably no better informed that the government on developments within the armed forces. 391

Instead, in the face of entrenched opposition to Allende's populist program by

international and national economic elites, the Chilean military intervened to preserve

391Central Intelligence Agency. Report with no title approved for release on 11 June 1999. 8 June 1973. available at www.foia.state.gov, 2,3 and 7. 237

and restore social order, leaving in its wake a "constitutional advantage to its preferred economic system" put into place under military rule. 392

Lessons from the Chilean Experience

Pinochet called his system "authoritarian democracy." Foucault would call authoritarian democracy a "disciplinary society" that banishes unacceptable ideas from public discourse and interprets everyday experience through the lens of dominant ideology. The fragmentation of consciousness is made complete by broadly infiltrating all levels of social structure with power relations reinforcing acceptable normative assumptions to assure "an infinitesimal distribution of the power relations."393

While prior to 1973 the Chilean military played a consciously politically- neutral role, the crisis that engulfed Chile between 1970 and 1973 was interpreted through a gut-level anti-communist ideology of national security that convinced the armed forces of their need to intervene on behalf of the values of western, Christian civilization. While we may not have a clear sense of the social paradigm the military embraced, we do have clarity about what the military rejected - any semblance of populism, which they bundled up together as Marxist-inspired and a threat to western civilization. Although Marxism is perhaps the most influential articulation of populist aspirations, it is only one of many strands of popular ideology, some of which advocate for revolutionary change and some of which cherish power-sharing broadly across society. No matter, in the Cold War era, any critique of the traditional

392Central Intelligence Agency. "Pinochet's Anniversary Speech and the Constitutional Controversy." 2 October 1978 available at www.foia.state.gov, 12.

393 Foucault, 216. 238

hierarchy required by capitalism was held with the same suspicion for its potential to

infiltrate the hearts and minds of those who were left out and behind (and their

sympathizers) and weaken their belief in the inherent good of that order.

Western political culture increasingly wrapped itself in the rhetoric of equality and democracy after World War II and the US assumed its dominant position in the western world. Chile's leaders followed suit, leading to increased political liberalism

that gave way to income and property transfers, thereby using political liberalism as a

battering ram to break down the private property walls protecting economic liberal

interests. This dynamic came to a head when Salvador Allende assumed the

presidency with the promise of increased property transfers under socialism.

Threatened to the core and unable to agree with Allende's proposed relations of ruling,

international and national economic elites united against Allende as they had done

nearly a century before against Balmaceda. While the 19th century elites resorted to

military coercion to oust Balmaceda, their 20th century peers first employed more

deceptive tactics, using their economic power as a destructive force. As social order

disintegrated, the military stepped in to prevent a slip into conflictive anarchy.

Steeped in ideas about national security, the Chilean military understood their

role to quarantine - to extirpate, in Pinochet's words - the perceived communist threat

that hovered over the nation, and Latin America as a whole. But, unlike their peers

across the continent, the Chilean military, clear on their mission of extirpation, found

at hand a set of like-minded anti-communists who could offer them a creative vision

for a new, sanitized Chile and a road map to get there. The connections that led the

Chicago Boys to the military leaders appeared to have been informal -- Heman 239

Cubillos, president of the advisory board of the conservative newspaper El Mercurio was connected to the navy by family ties. 394 Cubillos and formal navy officer Roberto

Kelly, who worked for Santiago's major newspaper, El Mercurio, knew of a secret plan developed by Catholic University economists, for an economic program that would reinstate liberal capitalism in Chile. Senior staff at El Mercurio recommended the economists and their plan to naval authorities. The plan, called "El Ladrillo" (the brick) becaµse of its size (284 pages), was completed before the coup began on

September 11, 1973 in Valparaiso, headquarters for the navy. The plan went further than installing an economic model - it also called for the creation of a political framework that would make permanent the economic structure. This called for a new constitution to replace the populist-inspired 1925 Constitution with a new charter that prescribed a classical liberal paradigm, as had been discussed in PEC magazine as early as 1969. Unashamed of their respect for authority, but unable to escape the international pressures in favor of political liberalism, the junta christened its new social order "authoritarian democracy."

Chile's 1980 Constitution was consciously crafted as a tool that would ensure the continuance of the dominance of economic liberalism over political liberalism despite the anticipated outcome of rising economic inequality by embedding the basic tenets of classical liberal ideology in Chile's relations of ruling. Its authors fully

394An untitled CIA document dated September 8, 1973 credits the navy with initiating the coup: "the navy is scheduled to initiate a move to overthrow the [redacted] of President Salvador Allende in Valparaiso at 8:30 am on 10 September [redacted] that the Air [redacted] (FACH) would support this navy initiative after the Navy takes position action." Further, "Admiral Jose Merino, Commander of the First Naval Zone in Valparaiso, is attempting unsuccessfully to delay this action until 12 September when he expects to be named as Navy Commander-in-Chief. . . . The F ACH CINC General Gustavo Leigh has contacted Army CINC General Augusto Pinochet on this matter, and Pinochet has said that the army will not oppose the Navy's action." (pp 1-2). The coup actually took place on 11 September. 240

understood that this feat would require a narrower distribution of political liberalism that had become customary in Chile in the 20th century. Under this new "Constitution of Liberty," electoral processes would continue providing the populace with a semblance of procedural participation, but this participation would be qualified by restrictions on both political activity and thought, neutralizing the substantive impact of that participation. In addition, constitutional provisions muted the power of political choice via the appointment by Pinochet of life-time senators whose votes reflected their support of a social order that reflected hierarchy based on access to economic power and a binomial system that artificially favors the minority coalition representing economic elites.

In this way, militaristic and political control accompanied by the imposition of pre-defined boundaries delimiting "acceptable" ideas were woven together to construct the veil of limited democracy which would not allow wayward eyes to question the validity of an economy based on liberal capitalism and characterized by inequitable distribution of income and property. To accomplish this, Pinochet's constitutional frame for authoritarian democracy also clearly demarcated the appropriate boundaries for political thought and discourse - while making plain the high price that would be paid for crossing this line. This authoritarian structure meant that free-flowing democracy - rule by the people -would only be permitted within a pre-defined ideological box constructed by economic elites who embraced the elites principles found in the 19th century classical liberal paradigm revived by Hayek and

fellow travelers such as Milton Friedman. To further tie democracy to authoritarian moorings, Chile's military cast off its traditional apolitical stance to take on a 241

permanent political role, as guardian of the new institutional order against any future populist threats.

Like their intellectual ancestors and peers, Pinochet's civilian advisors, economic and political alike, clearly understood the threat that democratic processes would wield upon a social structure that rooted in inequality. For this reason, the limits of authority built into the 1980 constitutional framework echoed 19th century prescriptions: the State's authority over economic activity and the distribution of income was limited while the authority of the private property owner was expanded.

The authority of the politicians to enact laws to reflect majoritarian desires was limited by structuring congressional representation to over-represent the minority interests of economic elites. This meant that the authority of everyday people to effect change in their lives was once again defined by the economic power they could muster as individuals. While theoretically possible, what experience reinforced was the disempowered status of working class men and women whose interests were subordinated by political and economic rules favored the interests of dominant elites.

Finally, the authority of the nation to renegotiate its social contract was also inhibited, given the high barriers put in place by both the constitution and the subsequent creation of the binomial electoral system via constitutional-level legislation. Despite criticism of the process under which the Constitution was developed and ratified and the exclusionary political and economic character of the framework it puts forth, once in place, it became the fundamental reference for the creation of Chilean law and 242

social structures. This legitimacy can be explained, in large part, by Chilean culture itself, and its notable "faith in the rule of law and legalistic frame of mind."395

It becomes clear that the Chilean junta worked on resolving the social conflicts that had consumed Chile on several different fronts. To review, the military intervention itself and its unforgiving repression of ideological dissent announced the advent of a disciplinary society with clear limits of toleration and a military force ready and willing to enforce those limits. Second, the junta turned to civilian advisors to create legal parameters for society to serve as a master frame for rule of law that reflected their vision for society. But, as we have seen, military and political interventions only permeate the workings of an outer shell of society, whose inner core is governed by the normative framework of culture. Indeed, cultural acceptance of the politico-economic framework is the only way to achieve the small government coveted by classical liberals and socialists alike - eliminating the need for a state mediation in political or economic disputes. Indeed, while the economic model can be imposed by military force and legal structures, the best guarantee of its long-term survival is cultural acceptance that secures cooperation in every day life by every day people.

For this reason, in addition to its work to construct a new political framework, the junta and its civilian advisors exerted significant effort to infuse Chilean culture with a normative perspective that would accept its classical liberal social structure and neoliberal economic model. In this regard, the military repeatedly denounced acts perceived as ongoing threats to national security (that were harshly repressed), which

395 "Chile's Government After Two Years: Political Appraisal", p. 13. 243

was accompanied by clear restrictions regarding acceptable parameters for thinking.

Alongside this stick approach, however, the economic technocrats dangled the carrot of a "free" society they were reinstating in Chile, which would usher in stability and prosperity once the bitter pill of neoliberalism had taken effect, as was discussed openly and portrayed as the only viable option for Chile.

The populace swallowed these arguments for a time, as we have seen, rising up in opposition only after 1980 when the constitution that raised the economic model to constitutional status had been already approved - and economic instability had rendered the experience of everyday life intolerable. But rise up they did, over and over again, casting doubt upon the success of the junta's cultural work -- we remember that the process of amending the Constitution that started even before Pinochet left office. It would seem that the military leaders may have overestimated their power: ideas are not easily boxed in and elude "extirpation" more easily than people might think, while embodied truths cannot be repressed forever, and, if not honored, can be expected to manifest themselves in unexpected ways. Orlando Letelier's words, written a mere three years after the coup remain prophetic: he argued that the bourgeoisie and their foreign supporters'

real failure is not their apparent inability to redistribute wealth or to generate a more even path of development (these are not their priorities) but their inability to convince the majority of Chileans that their policies are reasonable and necessary. In short, they have failed to destroy the consciousness of the Chilean people.396

To answer Heman Douglas's question to Professor Hayek, once set in motion, ideologies rarely die; we find instead that the same ideas and solutions have

396 Letelier, 142. 244

accompanied humanity across the centuries, both to our benefit and to our detriment.

Equally we find that, in the context of entrenched ideological differences found among diverse groups inhabiting the same geographical confines inevitably leads to conflict that will eventually be "solved" either via cooperative dialogue or coercive repression.

As we have seen, repression requires both determination and a will to dominate, while dialogue requires patience and a will to listen. This principle appears to have guided the dissident Group of 24 in its work: "we look for the basis of agreement between

Chileans of all sectors and tendencies over the fundamentals of a constitutional order that is truly democratic for Chile."397

In Chile's post-dictatorship age, political life seems to have regained its pre­ dictatorship shape around the three poles of right, center and left, suggesting that

Chile's longstanding social issues also remain intact. Although the return to electoral processes has meant that the avenues of political participation had been reopened, constitutional provisions have indeed limited popular sovereignty in Chile, not by limiting participation in the political process, rather, by limiting the influence of that participation. This reality - the inability of political participation to produce real change - may help explain why Chile is experiencing an increasing problem with low voter registration, especially among its young people. Other manifestations of civil society dissatisfaction with every day life in Chile can be found in more and more frequent strikes by frustrated workers, calls for equity and social justice by leaders of the Catholic Church, demonstrations and other acts of dissidence by Mapuche activists

397 Rodriguez, 686. 245

and the use of international human rights bodies by both women and indigenous groups to challenge Chile's biased legal structure.

These are some of the reasons why Chile's first Concertaci6n president, Patricio

Aylwin, announced that his government's initial task was to recreate democracy. This declaration only confirms the underground current of ideological dissent that had survived the dictatorship. It would appear that many remained unconvinced that the regime's particular social model was capable of addressing the entrenched social issues facing the country, thus the regime's failure to instill widespread acceptance of the model among the Chilean populace. After seventeen years, the Concertaci6n' s work to recreate democracy in Chile has resulted in a much-amended constitution, a revival of social spending, a reduction of poverty from 45 to 13 percent - and continuing calls for an elimination of the binomial system to allow for a more authentic democracy, renewed calls for economic justice through higher wages and greater autonomy for the Mapuches who wish to leave western, Christian civilization behind.

Like the project of modernity itself, the project of creating democracy in Chile remains unfinished. If we were to listen to Habermas, we would assert that both of these projects will only reach completion through processes of sustained dialogue in a spirit that recognizes the inherent right to difference, equal standing despite difference, and the inherent value of life in all of its manifestations. Dorothy Smith might remind us that our dialogue must incorporate the embodied truth of lived experiences in order to heal the fragmentation of consciousness. Unlike liberalism, which idealizes individual life, and unlike revolutionary populism which idealizes collective life, a 246

pluralist stance asks that we break out of the centuries-old thinking that has created centuries-long conflicts to discover a new paradigm that recognizes and accepts diversity as a fundamental condition of life. Further, such a conception of life can only be honored by a pluralistic system that urges us all to active creativity, not driven forward by unchecked self-interest, but by an awareness of life, human and otherwise, that surrounds us. Theorists tell us that pluralism is the least developed of the four basic paradigms derived from political economy. But we can take heart: as a civilization, we have not completed our creative experience.

The 21st century has dawned as an ominous one - terrorism, ongoing warfare and the infringement upon civil and political rights are concerns we live with each day, driving international and domestic policy forward in worrisome ways. Indeed, today's discourse and events ring uncannily familiar to students of Latin American authoritarianism of the 1970s. As a civilization, it behooves us to allow the clarity of hindsight to guide us into the future. History teaches that violence and coercion do not root out dissent; it merely sends dissent underground where it awaits a new opportunity to emerge, peacefully or otherwise. In the meantime, pluralism, the paradigm of discourse, urgently awaits the opportunity to rise up as our next project in the age of modernity - an ambitious project, indeed, for the sliver of land named

Chile, as well as for the rest of civilization, western, eastern, Christian, and non­

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