Chile: the balanced view : a recopilation of articles about the Allende years and after

First, the policy of income redistribution through massíve wage increases to the poorer sectors coupled with increases in employment and lowered inflation were supposed both to aid the poorer classes and lo increase poi itical support among them for the govern– ment.(24) Secondly, once sufficient political support had been generated by the govern– ment's economic policies, Allende hoped to bring about a structural reform which funda– mentally implied the writing and approval of a new constitution. Economic expansion was also coupled to winning immediate support for Ihe govern– ment's policy of creating a powerful state-owned social sector. Expropriations of industries and busínesses, and the speeding up of agrarían reform were aímed at bríngíng a great segment of the economy under the polítical control of the government as quickly as possible. The nationalizatíon plans were of utmost ímportance since the Unídad Popular needed a more powerful economic base from whích to gain both greater polítical power and capital to accelerate the establishment of a socialist state.(25) Further, from the Unidad Popular's point of view, the economics of nationalization and agrarian reform had the favorable pOlitical consequences of destroying the economíc base ofthe middle and upper classes who were also both Chile's traditional power brokers and the Unídad Popular's major opposítíon.(26) The majority of the domestic as well as foreign industrial, commer– cial, and, lo perhaps a lesser degree, bureaucralic bourgeosíe were opposed to a great deal of Allende's plans for state ownership. But as long as there was "prosperíty" they could be rídiculed as the "enemy" and thereby neutralized by the growing Marxist controlled state apparatus.(27) The culmination ofthe government's strategy of economíc expansion was to have been a majority sentíment in favor of a new constitution that would have been put to the people in a plebiscite. In essence, the strategy of economíc expansion appears to have been one that gambled everything on the ability of the administratíon to build this majority during its first yea r in office. Certainly it must have been obvious to at least the top administration planners that the country did not have either the present or potential capacity to continue the initíal rate of government spending and economic expansion for much beyond ayear. The ácid test of Ihe governmenl's strategy was Ihe Municipal elections of March, 1971. The effect of the "honeymoon period" following Allende's electíon coupled with the euphoria of econo– míc "prosperity" gave to the Unidad Popular approximately 49 percent of the vote in Ihese elections. Although as the highest Marxist vote total in history it was encouraging, it still fell short of the majhrity support Ihat the government needed in order to establish a socialist stale democratically. Long before Ihe Unidad Popular was lo have a second chance at testing their support in the 1973 Congressional elections, however, both the economic and political situation in Chile would deteriorate beyond repair. ECONOMIC DECLINE The phase of economic decline began in approximately November, 1971. At the end of that year the government had compiled an impressive record. Industrial production rea- (24)Belween Oclober. 1970 and February, 1972 wages were increased by more Ihan 136 percen!. Employment was also up by 55 percent in industry and by December, 1971 it had gone up to 62 pereent in the conslruclion lield. Chile Economic Notes, February B. 1972. (25)Nationalizations were importan! because expansion in Ihe induslrial seetorwas supposed lO be línanced by Inveslmenls from Ihe profils of Ihe enlerprises incorporaléd inlo Ihe public seelor. Chile Economic Notes, July 19, 1971, p. 2 (26)See El Mercurio, December 30, 1972, p. 3, where in an'edilorial il is argued Ihat Ihe Unidad Popular's economie policíes are aímed al gaining polílical control over all Chileans. For olher articles on "economic lerror and conlrol" see alsoEI Mercurio, January 15,1973, p. 1; and January 17,1973, p. 19; and La Tercera de la Hora, January 7.1973, p. 56. (27)See Puro Chile, Oclober 14, 1972, p. 1; andErcilla. June 13-19,1973, for examples ollheattacks agamsllhe opposilíon. Bolh Ihe Christian Democrals and Nalionals were olten lumped inlo one calegory as "faseísls". When referring lo Ihe Nalional party leader Onolre Jarpa, lhe Marxisl radio s!ations always referred lo him as "!ha! Nazi. Jarpa" . 186