Thursday, December 14, 2006

Was Allende a sheep in sheep's clothing?

In the comments section to an earlier post Dave has described Allende as essentially similar to Clement Attlee. By way of rebuttal I offer this Time magazine reportage from a year before the coup that a friend pointed me to; things then got a lot worse (there is more after the link):

After almost two years in power —the anniversary will be on Nov. 3 —Allende presides over an increasingly angry country that is sinking ever deeper into economic quicksand. Everything from beef to butter and matches to auto parts is in short supply. Inflation has spiraled 63.5% during the past eight months; in August alone, the inflation rate was 22.7%, and the price of food soared an estimated 60%. The reason: in an effort to buy political support, the government increased the money supply by 115% last year, and is doing the same in 1972. The black-market rate for escudos has now reached 300 to the dollar, more than six times the official rate. Chile's foreign exchange reserves have been used up, and its nationalized copper mines have been cut off from traditional lines of international bank credit. The economy limps along through deficit financing and aid from Communist countries.

Allende blames the U.S. for many of Chile's problems, particularly the drying up of Santiago's credit lines. But most international banks consider Chile a poor risk. To help keep its economy afloat, Chile has deferred payment on its foreign debt of some $2.5 billion, including more than $1 billion to the U.S.

At the same time Chileans have been hit by an inflation of violence. A carabinero (national policeman) was killed in a clash between pro-and anti-Allende forces in Conception in August, and a 17-year-old student died when a tear-gas grenade exploded in his face during a Santiago street brawl last month. As the violence increases, political parties have begun to organize for street warfare. The Communist Party has set up "self-defense committees" throughout Santiago. The Socialists talk of establishing "antifascist brigades." On the other side, a youthful group of extreme rightists called Patria y Libertad talks vaguely of an organization of "shock troops" to combat leftists.

Pinochet did truly awful things but, if we are to choose between bad and worse, between him and Allende Pinochet was clearly the better option. We do, in the developed West, have the luxury of refusing to choose either tyrant but this is not an option that was open to Chile.

Another very interesting point, somewhat related, is made by Alykhan about the developed world functioning as a testing ground for capitalist policies first in Chile (where Reagan and Thatcher followed) and now, perhaps, in Eastern Europe with the flat tax. It makes some sense given these countries have less to lose, more to gain and fewer long entrenched institutions. It also fits with the pattern of the debate over the flat tax here with people citing the Eastern European example so frequently in support of the flat tax.

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