Refuting a Lie: The Pinochet Friedmanite Neoliberal Economic Miracle

As you can see, there was no economic miracle under Pinochet. For all of that time, Chile was quite a bit below even the rest of the continent.
As you can see, there was no economic miracle under Pinochet. For all of that time, Chile was quite a bit below even the rest of the continent. The Pinochet years are in grey.
As you can see, there was no economic miracle under Pinochet. What there was was a typical radical neoliberal massive transfer of wealth from the working classes (the bottom 2/3 of society) to the upper classes (the upper 1/3 of society. The end result was one of the most disgustingly racist and classist societies on the face of the Earth. Also note that the Chilean economy takes off after Pinochet left and many of his neoliberal reforms were dismantled. Chile surpasses the Latin American average in 1995, around the time that Chile starting electing Socialists again. Great economic growth occurred under the Socialists. Note also that the Chilean economy had started to decline already under Allende. This was due to a capital strikes and radical measures that the United Snakes undertook to destroy Allende’s economy. As Henry (Satan) Kissinger (The Consummate American) said at the time: We are going to make the Chilean economy scream. Similar capital strikes have been occurring in Venezuela for a long time now. There were endless fake strikes (capital strikes) and stupid demos by “housewives” really just women from the upper classes. They marched out into their tony neighborhoods and beat pots and pans together for months on end. The lamestream corporate media in the US gave this endless drooling coverage. The same nonsense has recently occurred in Venezuela when more “housewives” (read rich bitches) poured out onto the streets to beat their pots and pans together once again to protest the radical democracy of Hugo Chavez and his replacement. The CIA (Evil Central) planted endless fake stories in the Chilean media about Soviet submarines off the coast and Soviet militias in training camps all over Chile being poised for a radical Bolshevik takeover. It was all lies of course (just about anything the CIA says about anything is probably a lie) but it worked pretty well on a lot of gullible Chileans.

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10 thoughts on “Refuting a Lie: The Pinochet Friedmanite Neoliberal Economic Miracle”

  1. Dear Robert
    You are quite right in saying that Pinochet doesn’t deserve his reputation of an economic magician. (We also know now that he was quite corrupt. Of the 5 military presidents of Brazil, none accumulated wealth illegally, but Pinochet did.) Still, Chile’s experiment in radical neoliberal economics ended in 1983, when the economy entered a severe recession.
    Economically, Pinochet’s years can be divided in 3 periods: 1973 – 1976, 1977 – 1983 and 1984 – 1990. In 1973 – 1976, there was a sharp downturn, but one could argue that this was inevitable to quell inflation, which had reached disastrous heights under Allende. From 1977 to 1983 there was steady economic growth, but that benefited only the top 1/3. Economic policy consisted of the classic formula of trade liberalization, privatization, liberalization of capital flows and at the same time a fixed exchange rate. The rapid trade liberalization coupled with a high exchange rate destroyed a good deal of Chilean industry. Imports boomed while exports faltered. Most of the imports consisted of luxury goods. The trade deficit was financed by borrowed money. In other words, Chile was going into debt to finance upper class consumption, not to build up capital.
    This policy was bound to end in failure, as it did in 1983, when Chile entered a severe recession, a depression really. Unemployment reached 25% and there were massive bankruptcies and bank failures. So what did the neoliberals do? They did what neoliberals always do when disaster strikes. They turned to the state to prevent total financial collapse. Banks were nationalized. When workers lose their jobs, that’s just the market doing its beneficent work, but when banks fail, the government has to save them. After 1983, Chilean economic policy became less neoliberal. They had learned their lesson.
    For the majority of Chile’s population, the Pinochet dictatorship were years of hardship, with low wages and little economic security. The fact that so many people outside the country lauded Pinochet’s economic policies shows the ideological blinkers of the neoliberals and their class bias. How can you say that a country is doing well when the majority of its population is becoming poorer?
    Regards. James

  2. The first requirement for socialism is wealth. No moolah, no socialism
    Many a socialism has gone to the gutters because there was no money.
    All successful socialism from Scandinavian countries to middle east is either you have natural wealth like Oil or you have to work for it.
    The issue comes when poor people wish they could succeed with socialism.

      1. Cuba
        Last time I checked nobody wanted to migrate to Cuba from the US.
        And here’s the truth about Cuba’s healthcare.
        Again, Russians are migrating to the US, NO American wants to move to the Russia, DID not want to move to Russia during the cold war.
        I guess you could credit the Socialists for boosting the GDP per capita by starving tens of millions of their own citizens.
        Which was the reason they stopped collectivizing agriculture.
        Have you LOOKED at their rivers, what about their air?
        Seems like they are pretty free market when it comes to the environment.
        Same goes for the labour laws.
        Nope, not better than the US, same for Albania.
        BTW, as far as Chile and GDP per capita is concerned, Pinochet cut spending GDP is an indicator of the goods and services produced, this also includes the public sector as well as the private sector.
        For example, in the 1940s, the American GDP looked pretty impressive on paper, but the devil was in the details, food was rationed, and you couldn’t buys cars because the entire workforce was producing tanks.

        1. No capitalist propaganda. No anti-socialist propaganda. No promoting the dog Pinochet. No spreading lies about the USSR. This is a socialist blog. We can on that stuff. So I am banning you.
          Cuba has the longest life expectancy in Latin America, and they have a lower infant mortality rate than the US does. A few Americans have gone to live in Cuba, and more are considering retiring there. Cuba is considering opening up a market for Americans wishing to retire there.
          Some Americans go to live in Russia these days. I know a few who did. The USSR did not “starve to death 10’s of millions of people!”
          China has included quite a bit of capitalism in recent years. The horrors of the environmental destruction and labor abuse that you document are the horrors of capitalism, not socialism.
          No one is arguing that Mongolia or Albania is better than the US. I argued that they built themselves up from poverty with socialism.
          I am banning you. We do not allow capitalist propagandists on this site.

    1. Well, yes, but in countries where Marxists come to power, typically the money exists somewhere
      In Cuba, Castro simply raided the Sugarcane industry and ‘centrally planned’ other initiatives.
      I am not a Marxist because it would appear there are methods to manipulate the economy to be ‘more fair’ without central planning (tax policy, etc.), but it is required in some industries.

      1. Robert- I have a question about this;
        What’s the benefit of Centrally planning industries that are largely not predatory like Clothing, computers, etc.?
        It seems they are produced less efficiently under Marxism.
        But in industries like Healthcare, water, it is a necessity because of the potential for abuse.

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