"General Augusto Pinochet remained the de facto dictator in Chile until 1988, when he acquiesced to pressure from the citizenry, the UN, and the Catholic church to reform the constitution and hold a new presidential election. The Chilean people declined to re-elect him. He stepped down in 1990 and left the country"
The Chilean constitution of 1980 included a "transitional" amendment stating that, if passed, Pinochet would be president for the next 8 years after which another referendum would be called with the following options:
- Yes: Pinochet would rule for yet another 8 years with the "junta" remaining as the legislature.
- No: Pinochet would stay for 1 year after which a democratically elected president and congress will take over the executive and legislative branches of government.
"NO" won that referendum (I was just old enough to vote NO). So Pinochet, respecting the terms of the Constitution he wrote, called for democratic elections for President and Congress.
Also, Pinochet could not run for the 1989 presidential election because his own constitution prohibited consecutive presidential terms.
One interesting note: Pinochet was so confident he would win the referendum they didn't think they would need a building for Congress. They had to rush design and construction of the Congress building to the point only the main chamber was completed on time for the new president's oath ceremony.
The biggest problem every communist country had was indeed coordination. The USSR was famous for this, in fact the Nazi invasion was a success at first partly because of Soviet disarray: you had spies warning about the impending attack for months while factories churned tanks but not supply trucks, and the army trained soldiers but didn't make enough rifles for all of them.
And this happened on a day-to-day basis: you had factories making 10,000 units when only 1,000 were needed, or worse when the demand was of 100,000. Food supply was always a problem and still is in countries like Cuba and NK. I have friends a bit older than me that lived under such conditions and still remember having to wake up at 4AM to grab a nice spot at the store line. "Show up late and there was no food left" they said.
This Chilean system was without a doubt the right solution for the problem, too bad that it was destroyed before it could do what it was meant to do.
The dream of a "mechanical centralized control" was shared by a lot of people in the XX century. It's strongly featured in positivistic SciFi literature of the time, for example I, Robot from Asimov.
While Allende's formal affiliation was with the Socialist party, he was also endorsed by the Communist party at the time of his election. (WP says it was as an alternate, their primary choice being Pablo Neruda, but he then turned around and supported Allende.) And Allende's government was apparently perceived by some as being to the left of the Socialist party after the election.
Exactly where the government was on the spectrum is open to debate, but I don't think you can say that they "weren't Communist" as though that's a boolean flag that's either true or false.
But I think arguing over where exactly they were politically misses the point; you can have varying political philosophies alongside different economic ones. I'd argue that the two are basically orthogonal. Regardless of where the Allende government falls on the political-philosophy spectrum, they certainly had a fascination with national industries, economies of scale, and central planning.
> Exactly where the government was on the spectrum is open to debate, but I don't think you can say that they "weren't Communist" as though that's a boolean flag that's either true or false.
Of course I can't.
My comment was a reply. My point was that Chile was not a "communist country" as in "USSR's brand of Communism".
Some people have looked into this and concluded that even modern computers and algorithms are not sufficient for central planning at a national scale. http://crookedtimber.org/2012/05/30/in-soviet-union-optimiza... (Edit: I see this has already been linked below.)
>This Chilean system was without a doubt the right solution for the problem
This presumes one can input all the relevant data, the preferences of millions of individuals as expressed by billions of choices every day. It also presumes the people sitting in those funny chairs won't be inclined to "adjust" things.
One of the S's in USSR the 'classic' communist country stood for socialist. Granted the Communist party in the Union of Soviet Socialist Republics is probably what really confused most people.
They can put whatever they want in their name, and even mix and match the terms in their propaganda... reality remains that they are different political doctrines.
Here is a short presentation with another perspective on the Cybersyn project which should be of interest to designers and quantitative visualization types: http://compscifi.com/
It argues that the design of the Presidential control room and its simplified visualizations of economic information created an illusion of omniscience and control over the economy by using visual cues from modernist design and science fiction. But behind the scenes, the project was mostly run by humans exchanging data over teletype machines and hand-pasting information to slides.
There's a wonderful example of the project's simplified model of the economy around 7:58. Do you think this captures the complexity of the Chilean economy with enough fidelity that policymakers could have made reliable predictions about the effects of their interventions? (I don't. This is why: http://www.econlib.org/library/Essays/hykKnw1.html)
I have great hope that agent-based modeling and simulation will become useful tools in economics, but they are only useful when we accept that they are wrong. We should approach synoptic tools like Cybersyn that promise power and control over complex social systems with extreme skepticism.
ALBAstryde takes its name in part from the Bolivarian Alternative for the Americas (ALBA). The second part of the name is linked to its historic root, Cyberstryde, which was the software behind Cybersyn, the cybernetic network which was set up under Salvador Allende in Chile 1971-73 to make information about industrial production instantly available to workers and government. ALBAstryde is being developed to be first used as a base for the software of the Ministry of Agriculture and Forestry of Nicaragua.
I just checked and they have no data for this year sadly :-( but they did used it for 2 years, I don't work for the ministry but I did worked for the NGO that made it so I don't know how well did they use it.
i'm Chilean and this is a huge problem here in Chile. Allende's government is constantly remembered as "what is what could have happened if US had not intervened?"
Even so I usually get shunned by that opinion, I honestly believe that Chile is one of the examples where American interventionism has worked. Sure, there are a lot of question marks about the methods, but the long time effects are astonishing.
This is even more amazing taking into consideration its geographical location and the situation of its neighboring countries. Friedman should get another Noble Prize just for being one of the few economists, who were given this fascinating opportunity of putting his economic views at work - and providing evidence that it does.
Something like Startup Chile gives me hope that this spirit of unconventionalism stays relevant even today.
I'm sorry... are you actually saying that the intervention in Chile "worked"? What do you actually mean by "worked"? If you mean "they fixed the economy only after screwing it up themselves" then that's called "cleaning your own mess" and not fixing something. Sure, it wasn't the best thing and Allende's government had many faults, but it wasn't the big mess they try paint it.
Being a chilean, I would say that the chilean economy and the whole system is in a very bad shape: huge inequalities, screwed up health system, educational system about to collapse, etc... Most of them we can thank Friedman and his free market policies... so don't tell me that the intervention in Chile was a good thing or turn out to be a good example, there are many, many counter-examples you can find of how bad things are now because of the intervention and forced policies in the economy.
It leads Latin American nations in human development, competitiveness, income per capita, globalization, economic freedom, and low perception of corruption. It also ranks high regionally in sustainability of the state, democratic development and state of peace. However, it has a high economic inequality, as measured by the Gini index.
That doesn't mean at all that it worked. All that information means is that Chile, now is in a good position relative to the rest of Latin America. Taking conclusions and saying that the reason Chile is the way it is now is due to the US intervention is naive and simplistic. There are so many factors involved in that fact, that it makes little sense to make that argument.
Using the same co-relation you're trying to use, I could say that the intervention was a bad thing, because while Chile is not bad, we could be doing a lot better if it weren't because of the problems we had to face. That is also not the case, and again, too many variables involved that you're freely taking away.
I absolutely agree that certain key numbers are always simplifying the complexity inherent in an economy. But it appears to the outside, that fundamentally there are no particular reasons that would make Chile any different to other Latin American countries (e.g. historic trade positions, natural resources, etc).
Pinochet was brought to power by a brutal coup displacing a democratically elected government. They rounded up thousands of dissidents and killed them.
The reason you get shunned is that you're cheerleading for a mass murderer. What are these "long time effects" that justify the death of thousands, the oppression, the torture?
I am just taking under consideration the events at that time, i.e. an eminent fear of another Cuba situation in Latin America and the resulting fears. Castro repeated visits to Allende did symbolize this development maybe even more than the increasing nationalization of the Chilean economy.
Even considering BBC's numbers and the unaccounted death these are still substantially lower than those of the death count of the Cuban Revolution. Considering the instability of Latin America at that time (e.g. the ongoing battle against armed communist guerrilla infiltrating the country [1])
I am not cheering for a mass murder, but acknowledging that creating stability in a highly instable environment is a painful process. A process that used highly questionable methods, but was never the less the foundation for Chile's success today.
Total nonsense. The Chilean people are the foundation for Chile's success today and they would have succeeded just as well (or better!) without meddling from the US. And with a lot less death.
Most of the destabilization that happened in Chile was a direct result of US meddling. It's talked about right in the article this thread is about.
No problem, I've only really become versed in these events recently myself after a trip to Chile. During the reign of Augusto Pinochet thousands of people were 'disappeared' - most were executed and buried in the desert, there's a decent bit of information here: http://en.wikipedia.org/wiki/Augusto_Pinochet#Suppression_of...
Nowadays relatives (mostly female) of those missing still systematically search the deserts of northern Chile for the remains of their loved ones. For anyone interested there's a film - Nostalgia for the Light (http://www.imdb.com/title/tt1556190/) which examines the search of the families alongside the rather different 'searching' of the astronomers working in the same deserts. Personally I wasn't crazy on some aspects of the film, but it's a good insight into the ongoing work that victim's families are doing in the Atacama desert around the city of Calama.
In 1973, when the US intervened, Chile's GDP per capita was slightly above average for Latin America. It crashed after the US intervention, and only caught up with the rest of Latin America in about 1990 - http://en.wikipedia.org/wiki/File:GDP_per_capita_LA-Chile.pn...
OK, it did better under Hernán Büchi (one of the "Chicago Boys", who floated the Peso). But it's a big stretch to say that the 17 years of moribund GDP were worth it, just to catch up with where they were before the intervention.
All we've really learnt is "don't peg your currency to the US dollar if your economy is a shambles". I don't think Friedman should win another Nobel Prize for that, it's not exactly a radical idea.
What on earth are you talking about? The "Chilean miracle" was a miracle of how the Chicago boys stabilized the economy that they nearly destroyed. It took years to even get back to the place Chile was before the US interfered. Chile is the best example of Friedman's methods not working since his hardcore stance had to be toned back as it was destroying the country.
You have to put this into perspective to Alende's approach:
Allende's program included advancement of workers' interests, replacing the judicial system with "socialist legality", nationalization of banks and forcing others to bankruptcy, and strengthening "popular militias" known as MIR.
1) Almost every other country in Latin America suffered from a military coup based on the same ideological grounds, that applied almost the same policies. They all suffered an "intervention", and not all ended up like Chile. There is not even a correlation between "interventions" and their current economic state.
2) Chile is not the economic leader of Latin America, Brazil is, with it's modern success atributed mostly to a former union leader, who was also part of of Brazil's "Workers Party", Lula da Silva.
You need to look at the per capita GDP and per capita GDP adjusted for purchasing power parity (PPP) to measure the relative economic strength of countries regardless of population disparities. Chile should have a smaller GDP; it has 16 million people compared with Brazil's 180. However, its GDP is proportionally higher:
I actually think Chile's current success has more to do with Pinochet's purging of so called "corrupted politicians" by having them killed or exiled from the country. He had so much control he had a new Constitution written which tied things so much, it made politics almost irrelevant.
What measurable results? Do you have the results of a parallel universe where the US minded its own business so we can compare? Read up on the subject, Chile was doing better before the US got involved and took decades to recover from the intervention.
And you are ok with that? You are ok with the fact that to implement Friedman's views it was necessary to exile, torture or murder thousands of people? Do you even know something about the horrors of Pinochetist dictatorship? You seem to believe that "American interventionism" is a perfectly normal foreign policy.
I am not ok with that, but I am not really that surprised by it either. Considering the Arabic spring bloodshed I am not sure that even today radical systemic change can occur in a completely peaceful fashion.
The blood pay was consequence to the resistance to the methods BECAUSE it was not working. If it had worked, then there would have no need for blood spillage.
It never had a chance to work. The US intervened the instant the socialist president was elected and never let up. Even with all that meddling, their plan was working incredibly well.
I hate to call you a liar, but I've never heard Chileans blame the US for Pinochet and the resulting junta and dictatorship. If anything, the Chileans, in a rare show of Latin American maturity, have usually assumed full responsibility for the failure of their own political system. Has this changed recently?
As for the US "intervening," what post-1970 interventions can you specifically cite that you think brought about the coup? Remember that Allende nationalized the assets of foreign companies, and foreign investors subsequently pulled out of Chile. Remember also that Allende was denounced by the Chilean Supreme Court and Congress, and that he was ultimately overthrown by his own military, and that despite the constant assertions of him having been "democratically elected," he only won 36% of the vote, less than Bush in 2000 (47%), but acted as if his plurality victory gave him some sort of political mandate to transform Chile into a communist country in six years.
that's great, thanks (i think i found out about red plenty from crookedtimber, but i had never seen that post). do you know of any other books that are vaguely connected? i once read "machine dreams" http://www.amazon.com/Machine-Dreams-Economics-Becomes-Scien... and enjoyed it hugely, but have never found anything even remotely similar.
In the last couple of years I've been reading the books of Stafford Beer, and he had some interesting ideas which were way ahead of his time. It's debatable how well Cybersyn and Cyberfolk would have worked in the early 1970s, using a single IBM computer plus telex systems. Today we would call this type of system SCADA, but Beer's ideas extended beyond factory control into the overall economy and political process.
At the time Cybersyn was portrayed in the British and some of the Chilean newspapers as a totalitarian "big brother" system, but that wasn't how it was designed to work. Beer saw the economy as a closed loop rather than a top down hierarchy, and he knew about and was hostile towards the Soviet GOSPLAN type economy.
If you're interested in Cybersyn then there is a recent book by Eden Medina called "Cybernetic revolutionaries" which describes the system and its development.
I am Chilean and there is a minor correction to the article:
"He attempted to phone the general of the Air Force and the new commander-in-chief General Pinochet, but they declined to answer" Pinochet was not the commander in chief of the Air Force, but of the military. The Air force was part of the Junta, and as such supported their leader Pinochet.
it's poorly written, but because it says "they declined to answer" it's likely that the author means "the general of the Air Force and the new commander-in-chief General Pinochet" to be a list of two people.
(but still, your english is better than my shameful spanish, and i have lived in chile for many years...)
I have been obsessed with this ever since I read an article in the guardian (uk) circa 2003 of all places. If you want a better picture of the political situation check out "a promise to the dead" (by ariel dorfman http://www.imdb.com/title/tt1097260/).
This is inaccurate. Pinochet had a new constitution written and it was passed on the 1980 national referendum (see http://es.wikipedia.org/wiki/Plebiscito_nacional_de_Chile_de...).
The Chilean constitution of 1980 included a "transitional" amendment stating that, if passed, Pinochet would be president for the next 8 years after which another referendum would be called with the following options: - Yes: Pinochet would rule for yet another 8 years with the "junta" remaining as the legislature. - No: Pinochet would stay for 1 year after which a democratically elected president and congress will take over the executive and legislative branches of government.
"NO" won that referendum (I was just old enough to vote NO). So Pinochet, respecting the terms of the Constitution he wrote, called for democratic elections for President and Congress.
Also, Pinochet could not run for the 1989 presidential election because his own constitution prohibited consecutive presidential terms.
One interesting note: Pinochet was so confident he would win the referendum they didn't think they would need a building for Congress. They had to rush design and construction of the Congress building to the point only the main chamber was completed on time for the new president's oath ceremony.