Chile – military dictatorship and monetarism

In 1973, the democratically elected left-wing government of Salvador Allende was overthrown in a military coup. This heralded the dictatorship of General Augusto Pinochet and the arrest and execution of thousands of socialists and Communists. Forty-six years of democracy in Chile was snuffed out overnight.

For the Marxist Left in the 1970s and 1980s, Chile was a sobering lesson. In fact, when I was at university, the Labour Club regularly held meetings with the title: Lessons of Chile. Because Allende was deemed to have tested the limits of how far a Marxist influenced party could go within the bounds of a capitalist democracy before the state (army, police, judiciary) intervened.

Events leading to dictatorship in Chile

Allende comes across as a tragic Shakespearian figure who pursued radical reform without seeking to overthrow the establishment. He was a Marxist by intellect but a reformist by temperament. There is a phrase that may have come from Allende or one of his political comrades that his party wanted to achieve “peaceful change without traumas” – but on the scale Allende envisaged, that wasn’t going to be possible.

With touching optimism, he hoped that vested interests in Chilean society would respect democracy while their privileges were rolled back. That was not to be. Opposition to Allende would come from parliament, where the opposition Christian Democrats dominated, the courts and the top of the armed forces. As well as landowners and industrialists.

And the United States was not a disinterested party. Latin America was still very much regarded as its backyard and the Cold War with the Soviet Union was in full swing. The Nixon administration was not going to entertain what it viewed as a developing communist state on its doorstep. Guaranteed to get right up the nose of Washington DC was Allende’s drive to nationalise the assets of two copper mining companies: Anaconda and Kennicott. Both firms were headquartered in the US.

DISCOVER: The Portuguese revolution of 1974

The Christian Democrats and dictatorship in Chile

However, it’s worth noting that even the centre-right Christian Democrat administration of Eduardo Frei in the 1960s had moved to nationalise Anaconda’s interests and to introduce agrarian and educational reforms. Such was the impetus for radical change from below. However, Frei failed to satisfy the hunger for social justice and Allende took power in 1970. He embarked on a much more thorough programme of nationalisation, pay increases and reform.

A key difference between Frei and Allende of course was the class base of their respective parties. Frei’s Christian Democrats were essentially an establishment political vehicle forced leftwards by social movements within Chile. Whereas Allende’s coalition of socialists and communists was firmly rooted in the labour movement – trade unions and community organisations.

Frei would support the overthrow of Allende in 1973 but by 1980 moved to publicly oppose the Pinochet dictatorship. Two years later he was poisoned to death while being treated in a private clinic, which led to prosecutions in 2019. In the decade after the 1973 coup, Pinochet assassinated trade union leaders, socialists and communists in a series of extra-judicial killings.

Chile on the path to socialism

After assuming power in the 1970s election, Allende pursued la via Chilena al socialismo – the Chilean road to socialism. Very soon, it became clear that the military top brass was divided between officers who preferred to remain above politics and those actively plotting a coup d’etat. The latter rising to the ascendant including General Pinochet who, incredibly in retrospect, was promoted by Allende.

Within three years, Allende’s reforms had touched most sections of the population with the government boasting that meat was no longer a luxury for the poor. And real wages rose substantially though inflation started to pick up from 1972 after initially falling. But Chile was isolated and the US, as subsequent released papers confirmed, was engaged in destabilising the country.

Allende and Cyber-Marxism

One interesting aside is that Allende attempted to harness digital technology to improve state planning. Operation Cybersyn created a network of telex machines feeding stats into a central mainframe computer.

This was intended to ensure that planning delivered the right outcomes for workers at the most local level. The mastermind behind this was a British cybernetics expert, Stafford Beer. For those advocating a command economy today, they might want to look at what Beer did in Chile in the early 1970s.

I’ll confess to a personal interest here. I was at college with Stafford Beer’s son and we were later in a band together in the late 1980s gigging all over London. I also knew his cousin, Felicity Dowling, who was one of the Militant councillors in Liverpool surcharged and barred from office in 1985.

Dictatorship arrives in Chile

Since the 1960s, the Americans had channelled funds to the centre right Christian Democratic Party (PDC) to try and counter the rising popularity of socialist ideas. With Allende, the worst nightmares of US strategists were becoming a reality. On 11 September 1973, Pinochet launched a full-blown coup overthrowing the Allende government and resulting in the President committing suicide while under air attack in his own presidential palace.

Six years later, I was a 16-year-old steward on a Chile Solidarity demonstration in Trafalgar Square, London. Pinochet was still in power. He had drowned his opponents in their own blood. And then embarked on an economic programme of privatisation and monetarism. This was supervised by economists who had trained at Chicago University with the high priest of monetarist economics, Milton Friedman. He lauded the triumph of “liberty” (free markets) even that could only be done by destroying democracy.

This brand of economics would be adopted by Margaret Thatcher in her first 1979 to 1983 term in office with disastrous consequences for UK manufacturing industry. Much to Friedman’s disgust, even Thatcher dumped monetarism or “voodoo economics” as Labour minister Dennis Healey once described it. But Chile persisted, rolling back the state while increasing the rate of poverty.

Thatcher and the Chile dictatorship – a postscript

Pinochet eventually stepped down and Chile returned to democracy. In 1999, Pinochet was placed under house arrest while in London at the request of the Spanish authorities. A judge in Spain was seeking his extradition to face charges on human rights abuses.

The ex-dictator was holed up in a Surrey mansion and while there, received a distinguished guest. None other than Margaret Thatcher popped round for tea in front of the TV cameras. Aside from thanking him for support during the 1982 Falklands War against Chile’s neighbour Argentina, she made the following breathtaking statement:

“I’m also very much aware that it is you who brought democracy to Chile, you set up a constitution suitable for democracy, you put it into effect, elections were held, and then, in accordance with the result, you stepped down.”

The MIR and Oscar Rojas

The image attached to this post is from a bulletin I bought in 1981 from an exiled activist in the MIR (Movement of the Revolutionary Left). He was a regular speaker at the university Labour Club. The MIR was a high profile Marxist-influenced group that stood outside the mainstream socialist and communist parties flirting with Guevara-style guerrilla warfare. Its founder described it as a “bag of revolutionary cats“.

On the back of the publication was an appeal for yet another left-wing activist who had “disappeared” in Chile – Oscar Rojas. In a bizarre twist I discovered researching this blog post, Rojas turned up on the electoral roll in Chile in 2012 along with a thousand other disappeared victims of Pinochet. The reason being that the post-Pinochet government refused to recognise that these people were most likely dead.

In 1973, 46 years of democracy ended in Chile with a coup d'etat and a military dictatorship installed under General Pinochet


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