More on Pinochet and Darfur

By Heraclitus

For more on the supposed economic miracle worked by Pinochet (again I say, may he rot in hell), see this excellent post by Greg Palast (via Kai Chang -- and for some reason the permalink won't load on my computer, so I'm just linking to his main page). Some high points:

The claim that General Pinochet begat an economic powerhouse was one of those utterances whose truth rested entirely on its repetition.

Chile could boast some economic success. But that was the work of Salvador Allende -- who saved his nation, miraculously, a decade after his death.

In 1973, the year General Pinochet brutally seized the government, Chile’s unemployment rate was 4.3%. In 1983, after ten years of free-market modernization, unemployment reached 22%. Real wages declined by 40% under military rule.

In 1970, 20% of Chile’s population lived in poverty. By 1990, the year “President” Pinochet left office, the number of destitute had doubled to 40%. Quite a miracle.

Pinochet did not destroy Chile’s economy all alone. It took nine years of hard work by the most brilliant minds in world academia, a gaggle of Milton Friedman’s trainees, the Chicago Boys. Under the spell of their theories, the General abolished the minimum wage, outlawed trade union bargaining rights, privatized the pension system, abolished all taxes on wealth and on business profits, slashed public employment, privatized 212 state industries and 66 banks and ran a fiscal surplus.

Freed of the dead hand of bureaucracy, taxes and union rules, the country took a giant leap forward… into bankruptcy and depression. After nine years of economics Chicago style, Chile’s industry keeled over and died. In 1982 and 1983, GDP dropped 19%. The free-market experiment was kaput, the test tubes shattered. Blood and glass littered the laboratory floor. Yet, with remarkable chutzpah, the mad scientists of Chicago declared success. In the US, President Ronald Reagan’s State Department issued a report concluding, “Chile is a casebook study in sound economic management.” Milton Friedman himself coined the phrase, “The Miracle of Chile.”

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By 1982, the pyramid finance game was up. The Vial and Cruzat “Grupos” defaulted. Industry shut down, private pensions were worthless, the currency swooned. Riots and strikes by a population too hungry and desperate to fear bullets forced Pinochet to reverse course. He booted his beloved Chicago experimentalists. Reluctantly, the General restored the minimum wage and unions’ collective bargaining rights. Pinochet, who had previously decimated government ranks, authorized a program to create 500,000 jobs.

In other words, Chile was pulled from depression by dull old Keynesian remedies, all Franklin Roosevelt, zero Reagan/Thatcher. New Deal tactics rescued Chile from the Panic of 1983, but the nation’s long-term recovery and growth since then is the result of -- cover the children’s ears -- a large dose of socialism.

The whole post is well worth reading.

(Our previous posts on Pinochet are here, here, here, here, and here. -- MJWS)

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Meanwhile, Quaker Dave has a new blog, Daily Darfur. It's not only keeping track of the daily news from Darfur but also focusing on who's benefitting and benefitting from the vile government in Khartoum. Everyone should have a look.