The Chilean Neoliberal Experiment. Capitalist Structural Changes
Examined in Part I and Part 2 Final, the Short-Term Monetary Stabilization Policies, formulated by the Dictatorship of Augusto Pinochet, we will now evaluate the structural transformations promoted in the Chilean economy, after the brutal coup d'etat and murder of the Companion President Salvador Allende.
The three long-term policies implemented by the General Pinochet Dictatorship were: Privatization of the Economy, Opening to International Trade and Changes in the Structure of Production and Income Distribution.
Privatization: neoliberal policy changes the role assigned to economic agents. It decreases the importance of the State by reducing public spending. Its presence is reduced in the regulation and promotion of private activities, and in the field of production.
Public companies are privatized and the State reduces its development promotion activity, especially affecting small agricultural, industrial and mining producers. The Agrarian Reform process is reversed and the development of Private Financial Institutions acquires special importance.
The State decreases its role as a regulator of external flows. Foreign investment is liberalized and restrictions affecting remittances of profits abroad are eliminated, and the debt margin that the private sector can contract with external sources can be increased.
The withdrawal of the State runs parallel to the sharp decline in public employment. There are no instances for the participation of workers in economic decision-making. Salaries are under government control, deteriorate, and the Law regulates the functioning of trade unions subordinates to entrepreneurs. Collective bargaining is not allowed and strikes are banned.
The change in the role of economic agents (lower state participation, privatization of productive activities, changes in labor legislation), were raised as a requirement to achieve the efficiency of the Neoliberal Economic Model. It was, according to the ideologists of neoliberal capitalism, of "neutral" policies in terms of their distributive effects, which is totally false, they are policies to generate a massive transfer of resources to the private sector, particularly financial institutions and large industrial business.
The transfer of resources from the State to the Financial Oligarchy was made through the design of specific policies implemented in the processes of privatization, market liberalization and reduction of the inflationary phenomenon.
In the process of privatization of state-owned companies, the Pinochet Military Board established advantageous conditions for the new owners. Tendered companies could only be acquired by those who had abundant amounts of capital or access to external credit. In the Agricultural Sector, the Pinochet dictatorship, restored to its former owners the estates expropriated by the Agrarian Reform, and the parceled lands distributed to the peasants, they were forced to lease them to third parties, due to the high cost of credit and the little support of technical assistance from the State.
The process of market liberalization did not follow uniform patterns in relation to the prices of goods and services, and to wages. The abrupt liberalization of the prices of goods and services, produced a contraction and fall in the remuneration of the workforce, which joins the reduction of employer contributions to social security
Another process of transferring resources to the oligarchy was to try to stabilize prices through the use of policies focused on reducing wages, fiscal deficits and cost pressures.
Inflation lasted. The Chilean economy entered a prolonged recessive phase with high inflation, which was characterized by a generalized imbalance in the markets. These mismatches were expressed in the form of abrupt and intermittent changes in relative prices.
The Pension Reform was another important area in the process of privatization of the economy. The organization of the new pension scheme reflected the concentration in the capital market: four of the twelve pension fund management companies are linked to the two largest economic groups. Banks in groups with pension fund managers control more than half of the credit of the Financial System.
The role assigned to the productive actors, and the dynamic processes of adjustment to the New Neoliberal Capitalist Economic Model facilitate the real transfer of resources to the Financial Industrial groups that dominate the productive apparatus of Chile.
These neoliberal capitalist policies imposed during the Dictatorship of Augusto Pinochet, in order to favor the US-Chilean imperial Industrial-Financial Oligarchy, were structuring a deeply unequal Chilean Society, with millions excluded from education, health, social security , and without popular protagonist participation in deliberation and decision making.
The Chilean Popular Movement, its social movements, is today in the streets, in the squares, in the avenues, raised, in rebellion, rejecting the Pinochet Neoliberal Capitalist Model, shouting to the world its failure, calling for the resignation of Piñera and the convocation to a National Constituent Assembly that is an expression in its composition of the new popular social forces that are as stated by Companion President Allende, "opening the large malls where the free man passes to build a better society", and not a dominated Constituent Assembly and controlled by the organizations that agreed to the "democratic transition" that preserved and continued to administer the Pinochet Neoliberal Constitution.
The social and popular movements of Chile, and of Our America, in their anti-neoliberal and anti-capitalist counteroffensive, are obliged to return to the path indicated by our Commander Chavez: Bolivarian Socialism of the 21st Century.
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