World History

Unit 7: The World Since 1945

Chapter 31: Latin America Since 1945

Mon, May 5, 2014

64. Tue, May 6, 2014

This week it would be easy to again focus on economics, the role a government should play in such affairs, or talk about the influence of the United States. But we've done that a lot, so I (Mr. C) thought we might try something a little different this time: a historical technique called "post-holing," focusing in greater depth on one particular area. So for today we're going to talk about just one country discussed in this chapter. I debated going with Argentina, as its recent history is an excellent study on how authoritarian regimes achieve power through fear, build unity through war, and lose power in part due to a group of mothers and grandmothers. I also considered Colombia, due to the serious effect US domestic policies have had on that nation. But in the end, I'll confess I went with the country I know the most about: Chile.

As the book tells us, Salvador Allende was a Marxist who was elected president of Chile peacefully, without intimidation or violence. Allende's election was due to several factors the book mentions, if not specifically: due to Chile's considerable natural resources, many foreign countries had invested in the country, but by and large the profits went overseas rather than remaining in Chilean hands (or pockets). Allende, after winning a close race, nationalized many mines and banks, and instituted sweeping land reform, breaking up large farms. He also re-established some ties with Cuba. As a result, the US (under President Richard Nixon and Secretary of State Henry Kissinger) began a campaign to "make [Chile's] economy scream." Before long, Chile's economy was in trouble — though whether this was due to Allende's policies or due to US pressure is open to debate. Also Allende had the bad luck to nationalize the copper mines (copper remains a hugely important Chilean export) at a time when copper prices fell hard. Allende's support dwindled considerably.

On September 11, 1973, Allende was overthrown and killed by a military coup. The CIA has acknowledged that it played a role in the coup, though how large its role was is still debated.

The leader of the coup, General Augusto Pinochet, established a miltiary dictatorship and, as the book states, instituted an almost radical free market. In this he was directly aided by American economist Milton Friedman. Essentially everything was privatized and all restrictions on businesses were removed. As the book notes, this led to rampant unemployment and considerable prosperity — an apparent discrepancy that is resolved when we realize that national prosperity means a country's total wealth, regardless of who holds it. In Chile the wealth generated (or transfered) almost all went to the business owners. When workers launched strikes or protested Pinochet's repression, they were rounded up and "disappeared."

Pinochet eventually relinquished power after considerable popular resistance, but many of Pinochet's economic policies remain to this day. Chile today is economically stable and highly prosperous, and while the poverty rate has fallen from its Pinochet-era peak of 48%, considerable income inequity remains. There have been many strikes and marches in Chile in the past year calling for reforms of the education system, which was like everything else largely privatized under Pinochet's rule.

• Does a nation have an inherent right to any profit from its natural resources? Or should the profit go to those who own the land, to do with as they please?
• US involvement in the coup is still hotly debated and many of the CIA's actions in Chile in 1973 are still classified. With no definitive answers available, there has been much speculation about US involvement; it has even been suggested that Kissenger urged the coup leaders to attack violently before Allende could be removed peacefully. While this assertion is far from proven, it is abundantly clear that the US sought to destroy Chile's economy in order to remove Allende. Why would the United States take such actions?
• Under Pinochet and Milton Friedman's economic policies, Chile's prosperity was largely concentrated in a few hands, with the majority of Chileans ending up quite poor while the country overall became wealthy. How, then, do we define prosperity? Is the United States prosperous?

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