The turmoil in Chile satisfies old Marxists who, always looking for the next revolution, have set their hopes on Santiago. The leftist media, in turn, fuel the revolutionary mood by framing the story as a revolt of the poor against neoliberalism—including rule of law and free-market economics—and inequality. But images of the demonstrations and eyewitness reports suggest a different reality. Chile undoubtedly confronts poverty and a historical legacy tainted by racism, but less so than other South American countries. In fact, over the past 30 years, Chile’s poverty has decreased, thanks to economic development—and neoliberalism.
Chile’s poverty endures because of the country’s mediocre public education system. Neither the socialist administrations since Augusto Pinochet’s departure nor two free-market governments improved public schools, principally because of powerful, leftist public unions. A neoliberal approach, one that privatized primary schools, could have improved results, but the unions prevailed in their resistance. Their success guaranteed that the poor remained uneducated and impoverished. Today, the poor preoccupy themselves with survival—not demonstrations on Santiago’s streets.
The demonstrators are instead revolutionary groups whose urban-guerilla methods are quite familiar; they gain recruits, for example, by drawing in desperate refugees from Ecuador and Venezuela. It’s predictable that these immigrants, often illegal entrants without any resources, have seized the opportunity to loot. Chile’s president, Sebastián Piñera, has called out the army to contain this guerilla offensive. In response, Chilean revolutionaries are comparing Piñera with Pinochet, forgetting that the president—a true free-market liberal—opposed the late dictator’s rule. While the Chilean Right has forgotten Pinochet, certain leftists maintain their nostalgia for Salvador Allende and his failed socialist revolution of the 1970s. In Chile, as elsewhere, Marxism never dies.
Chile’s middle class, rather than resisting the leftists, has joined the popular uprising. Why would this class, which didn’t exist a generation ago—it emerged out of the relative prosperity associated with neoliberalism and has entered the phase of rising expectations—endorse the revolt? Middle-class Chileans, who only recently escaped poverty, want to enjoy a quality of life comparable with that of wealthy countries; Chile has yet to reach this standard. For now, middle-class Chileans live with economic uncertainty, lack savings and capital, and remain sensitive to any deviation in their standard of living. It’s no surprise, then, that a slight increase in transit fare would provoke anger and panic.
At this tipping point, the globalized Left tells us that all would improve if the state, rather than the private sector, took charge. This is strange reasoning. The state knows only how to spread poverty around, except among corrupt political elites, who enrich themselves. Though neoliberalism intends to create shared development, it is true that the sharing is never fully egalitarian—because a fully egalitarian society isn’t possible.
A viable path exists for Piñera to embrace innovation and make Chile a model for South America. It’s undeniable that the oligarchic tradition, inherited from a colonial past, persists in Chile, accentuated by the profits gained by large entrepreneurs through access to global markets. This issue could be corrected by fiscal measures and even by philanthropic encouragement. In the United States, the superrich are forgiven because of their substantial gifts to social, humanitarian, and educational causes. But Chile has no equivalent to Bill Gates. It’s also possible, as Piñera has suggested, to create a minimum income—or a negative income tax, as Milton Friedman once proposed—which would guarantee that Chileans wouldn’t fall below a certain poverty level. Finally, it’s imperative to provide education to all Chileans from age three on, whether in a public or private system, for generational poverty is determined in early childhood. The leftist platform—particularly the nationalization of enterprises, insurance, retirement, and universities—would only interrupt Chile’s development.
Chile needs more private entrepreneurs, not demonstrators. Over three decades, these entrepreneurs have gradually, though not completely, ended the country’s dependence on mining copper. In Pinochet’s day, copper represented the entirety of Chile’s exports; today, it’s one-half. This still-heavy dependency on one primary export explains the state’s financial difficulties, for copper prices are currently low. The fate of South American governments is too often decided by the price of raw materials—copper in Chile, soy in Argentina and Brazil, oil in Ecuador and Venezuela. Marxists should know this, but such materialist determinism would oblige them to acknowledge that only neoliberalism makes it possible to escape a fate determined by commodity exports. Marx himself, in his day, understood this and celebrated the creative function of the capitalist bourgeoisie. Of course, Chilean Marxists never read Marx. Perhaps they should.
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