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

increases.(51) Copper and other nationalized enterprises also increasingly became a burden to the government since the nationalized banks were forced to run huge deficits as they simply printed more and more money to cover the losses in the stale-owned indus– tries.(52) By September, 1973, the Quarterly Economic Review 01 London observed: most economists probably agree that Chile's economy is nowtoo ill to respond to anything but the bitter medicine 01 a classic stabilization plan, with a wage and price freeze, and a drop in employment and consumption. Or. Allende relused to prescribe this on the grounds that it would undermine his advances towards socialism and economic egalitarianism.(53) As the above statement illustrates, Allende refused to change his eoonomic policies -based as they were more upon ideological commitments than economic theory- in the face of the economic realities that were threatening the country's stability. Indeed, Allende continued to insist that Chile's economic problems were being caused by capitalist plots and imperialíst exploitation and opposition. Perhaps the most famous example ofthis was Allende's charge of the "invisible blockade."(54) THE "INVISffiLE BLOCKADE:" MYTH OR REALlTY Basically, the invisible blockade was supposed to be a conspiracy of "international capitalism," led primarily by the United States, to overthrow the Unidad Popular govern– ment. A certain amount of credence was given to the charges because of sensational revelations like the "ITI Papers" (which showed an attempt on the part ollnternational Telephone and Telegraph to influence the outcome of the 1970 Chilean election) and the much publicized effort of Kennecott to embargo shipments of Chilean copperto France in retaliation for the Chilean government's nationalization without compensation of its mines in Chile.(55) More recently, evidence of CIA involvement in Chile has given even greater weighttothose who argue that external plots as opposed to internal pOlicy was the cause of Allende's downlall. It was no!, however, eitherthe CIA or ITT to which Allende was primari Iy referring when he spoke 01 the "invisible blockade," but rather to the drop in international financial credit to Chile from the West. Allende argued that through various pressures placed upon international lending institutions such as the Inter-American Oevelopment Bank and Intetnational Monetary Fund, the capitalist nations, led principally by the United States. attempted to stop all financial credits to Chile in an effort at sabotaging the "peaceful road to socialism." In his speech belore the United Nations on Oecember 4, 1973 Allende declared: ... My country is the victim of serious aggression ... another manifestation of imperiali¡¡ 11, one that is more subtle, more cunning and more terrifyingly effective in preventing u..; frQm exercising our rights as a sovereign State. From the very day of our electoral triumph on the 4th 01 September 1970, we have felt the effects of a large scale... action that has tried to out us off from the world, to strangle our economy and paralyze trade in our principal export, copper, and to deprive us 01 access to sources of international linancing.(56) (51)For how the Mínis!er 01 Hacienda saw !he economic situation al !he end 01 1972. see Orlando Millas, El Pueblo y la Hacienda Pública, 1972 (Santiago de Chile: Talleres Gráficos la NaCión, 1972).• (52)The money supply íncreased by over 200 percen! in 1972 alone. See Table 10. (53)"Chile", Quartely EconomicRevíew, N.o 3 (September 25, 1973), p. 22. (54)See Chile Economic Notes ler November and December, 1972. and January, 1973 lor examples 01 the Unidad Popular's leelíng that much 01 its economíc problems were due to foreign and internal subversion. (55)"Secret Memos from lIT", North American Congress on Latin America, Latin American and Empire Report, VI (April, 1972). For some ínformation on the copper embargos see Farnsworth and others, New Chile, 1973. (56)Dr. Salvador Allende, Chile, a speech delívered belore the General Assembly 01 the United Natíons, December 4, 1972. Text distríbuted by the Ernbassy 01 Chile, Washington, D.C. No publísher nor date given. 191