26 December 2021 ~ 1 Comentario

What Happened in Chile?

By Carlos Alberto Montaner

There was even talk of a “model.” Chile was a very positive thing that happened to Latin America for many years. From the 1980s until October 18, 2019, 35 or 40 years passed in which, apparently, an exhausting discussion had ended: whether a nation depended on the State to achieve development, or whether it was enough to keep the focus on civil society, the market and globalization to achieve the long-awaited takeoff.

Fortunately, the presidents of the Concertation (Aylwin, Frei, Lagos and Bachelet 1 and 2), plus Piñera 1 and 2 remained within acceptable parameters for the recommendations of the Chicago boys. In that period, poverty fell from 45% to just 8%, including “extreme or abject poverty,” which almost disappeared. Life expectancy rose 10 years, from 69 to 79, reaching a “First World” level. The middle social levels, the great supporters of the status quo, defined by the World Bank, went from 23.7% to 64.3%. We were on the right track.

While this radical transformation of Chile was taking place, the Gini Coefficient dropped dramatically from 55 to 47, one point less than the United States. It is known that as a society better distributes its income, the Gini Coefficient tends to drop to zero. Most of the data is very reliable. They are from young professor Alex Kaiser.

With that information there was no doubt that the “fight” had been won by private property, the market and globalization, that is, “the Chicago boys.” However, on October 18, 2019, the ‘social outbreak’ occurred. That day there was a hecatomb. To the extent that the excellent writer and ex-foreign minister Roberto Ampuero asked Cayetano Brulet, his detective, what had really happened in Chile. Ampuero didn’t believe that it had been a spontaneous reaction to a tiny price rise in the buses. The splendid novel is titled Demon. It must be read.

Whether it is an international conspiracy, as Cayetano Brulet suggests, or disconnected events without a black hand behind, the result is there, and his name is Gabriel Boric. He embodies the revenge of the State. He is going to fry Chileans with taxes and will return triumphant with the usual mercantilist “model” – more bureaucracy, more prohibitions and, in short, more State.

This model carries a moral judgment on entrepreneurs – getting rich is ugly and it’s bad, because wealth does not expand. The Chinese example is not even considered. Invariably, we have “stolen” from someone the “extra” dollar that we take into the bank account or that becomes a luxury object. Didn’t Proudhon say that all property is theft?

Boric’s election brought about a stock market crash. From December 19, 2021, the day on which he was elected, until March 11, 2022, when he will take office, will be the time to put the accumulated capital in good custody. There will be no significant investments in the country. Jobs will not be created, except those that are created in the public sector.

How can you predict this bad news? Because of tradition and, in the case of Chile, because of the similarity that exists with the Peru of Pedro Castillo, another elected gentleman who highlights the virtues of mercantilism, and Gabriel Boric. According to an Ipsos survey, 76% of Peruvians would not invest in their country of origin. (If the vast majority of Peruvians are not willing to invest in their own country, what can be expected of foreigners?)

Obviously, Peru is preparing for the “presidential vacancy,” a parliamentary maneuver to impeach the president, something that has happened several times in the past. Chile lacks these parliamentary prerogatives, but it is very difficult to govern with the polls against you and without clear majorities in the Senate and the Chamber of Deputies.

Perhaps it is time to dust off the proposal of Dr. Juan Linz, a professor at Yale who died in 2013, to create in Hispanic America a classic parliamentary system in which “Prime Ministers” are elected or re-elected without so much fuss. Something must be done to get rid of so many “loudmouths.”

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