A democratic deficit plagues Europe and the US; Chile shows us that there is still hope
“A spectre is haunting Europe – the spectre of communism,” is the rousing way Marx and Engels begin their 1848 pamphlet, The Communist Manifesto. They spoke of the dissatisfaction of the working classes across Europe and the need for substantial political change. Though Communism has been largely discredited, elements of the ideology and its explosive critique of Capitalism still resonate with us today. As writer V.S. Naipaul once put it, there are ‘a million mutinies’ going off in people’s minds. People want, desire, and need a more hopeful future and the tool of choice for people in countries across the world is the ballot box. Chile is the latest nation to choose a different path.
A new beginning
On 19th December 2021, Gabriel Boric, the man representing the left-wing Apreubo Dignidad (Approve dignity) coalition, defeated his right-wing opponent, José Antonio Kast, to become the youngest person ever elected as Chilean President, at age 35. His margin of victory proved to be larger than anticipated, emerging victorious with 56% of the votes compared to his rivals 44%. The election of Boric, a former student activist at the University of Chile Law School, marks a shift in the tectonic plates of Chilean politics, which has elected presidents solely from the centre-left and the centre-right since democracy was restored in 1990.
Boric’s campaign was based on a platform of social justice, expansion of social services and climate action. He was a major advocate for women’s reproductive rights and the rights of Chile’s LGBTQ+ community, and he vowed to combat the proposed installation of a copper-mining project to help Chile do its bit to avoid ecological catastrophe. He was also heavily critical of the neo-liberal economic doctrines that were brought into Chile under the Pinochet dictatorship (1973 - 1990), quipping on the night of his primary victory, “Chile was the birthplace of neoliberalism, and it shall also be its grave!”. He also promised to raise taxes on the ‘super rich’ and to replace Chile’s private pension system with a minimum pension scheme guaranteed by the State.
José Antonio Kast’s campaign could not have been more different from that of his left-wing victor. Kast, whose German-born father was a member of Hitlers Nazi Party, was regularly likened to Jair Bolsonaro, the far-right leader of Brazil. He routinely played down the systemic torture and repression of dissidents that occurred during the Pinochet regime, espoused conservative family values, and was opposed to same-sex marriage and the advancement of Communism. Moreover, he sought to weaponize anti-immigrant sentiments in the country, and advocated the creation of an investigative police force to “actively seek out illegal immigrants”.
This right-wing sentiment, however, was struck a significant blow in early December, when Chile voted to grant equal marriage rights to same-sex couples, perhaps indicating the start of Chile’s left-wing shift and also curtailing any sense of victory that Kast may have felt after defeating Boric in November’s first-round vote.
A neoliberal testing ground
It is not difficult to paint a positive picture of Chile; the overlying statistics would suggest that the country is very prosperous. Take the country’s response to COVID-19. According to Pharmaceutical Technology, Chile ranks 3rd in the world for per capita COVID-19 vaccination doses, and over 88% of their population is fully vaccinated, the 5th highest figure in the world. By contrast, Ireland ranks 13th and 19th, respectively. Moreover, Chile is one of the wealthiest countries in Latin America, with the third-highest GDP per capita in the region, states a 2020 study by the World Bank. Chile is the highest-ranked Latin American country on the UN Human Development Index.
However, on closer inspection, we learn that this wealth is not divided equitably. Writing for Brave New Europe (BNE) in 2019, Serbian economist Branko Milanovic noted that, in 2014, the combined wealth of Chile’s 12 billionaires was equal to 25% of its GDP. This is the highest concentration of a country’s wealth amongst its billionaires in the world. As of 2015, its income inequality was the third-highest in Latin America. While the top 2% have roughly the same per capita income as the top 2% in Germany, the bottom 5% have a per capita income comparable to the bottom 5% in Mongolia.
The roots of this extreme wealth inequality can be found in the economic reforms that occurred during the brutal, US-backed, military dictatorship in the 1970s and 1980s. In September 1970, Chile became the first country in the world to democratically elect a socialist President, Salvador Allende. This infuriated, or perhaps terrified, officials in the US Government and President Richard Nixon vowed to “make the [Chilean] economy scream”, ordering the CIA to undertake a military coup in the country. The US ambassador in Santiago menacingly put it as follows: “Once Allende comes to power, we shall do all within our power to condemn Chile and the Chileans to utmost deprivation and poverty”. And that is exactly what happened.
On September 11, 1973, Allende was overthrown by a junta headed by General Augusto Pinochet, and he died by suicide shortly after. The atrocities committed by Pinochet and his cronies are well documented; up to 3000 dissidents were killed, 80.000 imprisoned, and up to 30.000 men, women and children were tortured, until Pinochet, surprisingly, agreed to step down in 1990, which the Chilean people welcomed and voted for in an election.
During Pinochet’s dictatorship, the Chilean people did not only suffer socially but also economically. Pinochet promoted a group of US-trained economists to positions in his ministry that came to be known as the ‘Chicago Boys’. It is whilst they were trained in economics at the University of Chicago that they were influenced by the free-market approach to the economy, established most notably by Milton Friedman.
This theory was based on the belief that a free-market economic model would lead to increased political and economic freedom. Friedman asserted that “inflation is always and everywhere a monetary phenomenon”, viewing the money supply in an economy as the sole cause of inflation. From this perspective, inflation needed to be kept low, even if essential social services needed to be cut and businesses did not have any social responsibility for wider society. The Chicago Boys took this theory and caused it to permeate into Chilean society, shaping Chile’s socioeconomic landscape to the present day.
They outlined their market-friendly commandments in a thick book that came to be known as “El Ladrillo”, (or “the brick”). Public sector services were sharply reduced. The number of state-controlled companies fell from 300 to 24. Labour unions were broken up, and strikes were viciously quelled. There were cuts in housing budgets, social spending, and the education sector. In 1979, the finance ministry unwisely chose to fix the value of the US dollar to the Chilean peso, meaning that the value of their currency would move in line with its American counterpart.
In 1982, a fall in the value of the dollar, and excessive liberalisation of the financial sector, resulted in a devastating financial crisis and the unwillingness of the Chilean finance ministry to intervene in the market only prolonged the crisis.
The appointment of Hernan Buchi as Finance Minister in February 1985 helped somewhat. He nationalised large portions of the banking sector and slashed both taxes on corporations and tariffs on imports. Foreign direct investment (FDI) in Chile increased by about 11% and the Chilean economy expanded rapidly during this period, growing by roughly 7% a year between 1985 and 1997.
Nevertheless, the Pinochet regime solidified systemic inequality, a phenomenon that haunts the country, even today. Economic historian, Emiliano Travieso, observed that, in 1990, the poverty rate stood at over 38%. In that same year, the ratio of the national incomes of the highest 20%, and the lowest 20%, was 20:1. The equivalent ratio in 1973 was 12:1, an already high ratio, which is also documented by Travieso. These statistics, shocking as they are, did not faze Friedman, who regularly praised the ‘Chilean Miracle’, and saw the country as a testing ground for his economic hypotheses, whilst simultaneously remaining detached from the social costs of his ideological utopia, until his death in 2006.
For-profit human necessities
Let’s consider the system of third-level education, to give just one socio economic sector that is worth looking at. It is estimated that the average university course in Santiago costs about 41% of the average annual income, the highest figure in the Organisation for Economic Cooperation and Development (OECD), an economic group that consists of 38 higher-income countries. The country has the most segregated and unequal system of education in the OECD. One report discovered that students from higher-income brackets average maths scores that were about 51% higher than their lower-income counterparts. The dropout rate for college students is about 50%, the highest in the world. Students are expected to foot their own education bill. In 2008, Chilean economist Patricio Meller remarked that the cost of third-level education is the highest in the world when GDP and per capita income are factored in.
Some moves have been made to make tertiary education more affordable, such as the gratuidad system introduced in 2016, which grants free college access to students to 50% of Chilean college students. These reforms came about as a result of mass student protests in 2011, in which Gabriel Boric was heavily involved, whereby students and teachers demanded more universal education and an end to crippling student debt. These reforms have had positive effects. It has been suggested that about 15% of college enrollments would not have taken place without gratuidad.
Unfortunately, students from poorer households are still struggling to make ends meet. As Dr. José Salazar explains, the cost of living is still very expensive. Only 30 universities, out of 62, participated in the new scheme when it was introduced. 12 private universities have taken part in the programme, and they have cut costs to make up for the revenue lost as a result of gratuidad. Aspiring Chilean students must sit an entrance exam in order to go to university, which naturally benefits higher-income students at the expense of their less well-off contemporaries. It may also be the case that if gratuidad were extended to accommodate more students, the Chilean government would cut spending in other important sectors.
Underlying tensions eventually came to a head in October 2019, when a $30 (£0.03) metro fare rise was greeted with protests in Santiago, in the cities of Valparaíso, Concepción, Antofagasta, and more besides. The 14th century Italian poet Dante Alighieri once quipped that “From a tiny spark may burst a mighty flame”. A seemingly innocuous price hike saw this pot of discontent boil over for all to see.
In response, the Chilean president called for a state of emergency and deployed the military on the city streets, the first time that had happened since the dictatorship. At least 20 people lost their lives during the protests. “It’s not 30 pesos, it’s 30 years” became a rallying cry for activists, a reference to the fare rise, which was ultimately reversed by the president, and the dark days of the military junta. As a university student, Javiera López Layana put it to the New York Times, “Education was supposed to be our ladder out of poverty. But the debt turns out to be a heavy backpack.” Over 1100 people were hospitalised, with at least 3535 people detained in prison.
All over the world, we have seen activists and armed forces come to blows as people become increasingly disillusioned with the prevailing neoliberal global order. Globalisation, the climate crisis, the COVID-19 pandemic, and the erosion of democratic ideals make for a volatile mix and have led to an increased hollowing out of the centre-ground. In his 1921 poem, The Second Coming, WB Yeats, the Sandymount-born scourge of many Leaving Cert English students, lamented that “Things fall apart; the centre cannot hold; mere anarchy is loosed upon the world, The blood-dimmed tide is loosed, and everywhere the ceremony of innocence is drowned”. Yeats was writing in response to the Irish War of Independence, yet his words are extremely prescient.
Consider the Indignados in Spain, the Occupy Movement on Wall Street, Black Lives Matter, the Gilets Jaunes (Yellow Vests) social movement in France, the Extinction Rebellion protests, and the work of the Sunrise Movement, to cite some of the most well-known activist groups worldwide. Our fears and anxieties can be mobilised as a force for good and as a means of imparting camaraderie and meaningful change. Unfortunately, they can also be abused to attain nefarious ends. One need only look at the harrowing rise of ultra-nationalist and fascist organisations across the globe and the hateful propaganda that they espouse to make us fear each other. These entities are granted legitimacy by political oligarchies, such as the Republican Party in the United States and the Tory Party in the United Kingdom, to give just two of the best-known examples.
Hope for a better future
It will be fascinating to observe what happens in Chile over the next couple of years. Many people are optimistic that the Boric administration will do well. Refreshingly, the losing candidate in the Chilean election, José Antonio Kast, was gracious in defeat, a trait that has become more and more uncommon in contemporary politics. He visited Boric’s campaign headquarters and tweeted a photo of himself congratulating his opponent, healing the new president and his ‘grand triumph’.
The election of Boric, who will officially assume office in March, could represent the revival of a ‘Pink Tide’ in Latin America, with the left becoming more and more powerful in the region. In October, Brazilians will go to the polls, with a former president, and leader of the Workers Party (PT), Luis Inácio Lula da Silva, better known as “Lula”, heavily backed to emerge victorious in South America's largest democracy. In December, Honduras voted to elect its first female president, Xiomara Castro. Left-wing politicians have also emerged victorious in recent elections held in Peru, Bolivia, and Argentina. A victory in Brazil in particular, would be a major feather in the cap for progressives in Latin America and would be a major ally in South America for the Boric administration.
Latin America has had a turbulent history, with enslavement, the slaughter of indigenous peoples, and political meddling by imperial powers causing untold suffering in the region over the last 500 years. It is no coincidence that famous Uruguayan writer, Eduardo Galeano, chose to name his seminal work Open Veins of Latin America. European colonialism split open these veins, with the mass outflow of gold, silver, tobacco, and sugar cane, enriching the US and Europe and impoverishing Latin America. Despite this, we should take heart from the resilience of the people of the region, both in Chile and elsewhere. We must remain optimistic, even though that can be so difficult. In a 2016 interview, veteran linguist and political activist Noam Chomsky summed up his views on humanity as follows, “We have two choices. We can be pessimistic, give up, and help ensure that the worst will happen. Or we can be optimistic, grasp the opportunities that surely exist, and maybe help make the world a better place. Not much of a choice.” Latin America can act as a model for democratic revival in both Europe and the United States; we must not let it pass us by.
Read more from the Americas section here.