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MAKING CONTACT

Transcript: #36-98 Chile: Human Rights and Global Privatization
September 9, 1998

Program description at http://www.radioproject.org/archive/1998/9836.html

Norman Solomon: Welcome to Making Contact and international radio program seeking to create connections between people, vital ideas and important information. I'm Norman Solomon.

Twenty five years ago, the president of Chile, Salvador Allende, spoke for the last time to the people of his country. Allende had been elected three years earlier but on September 11, 1973 Chile's military closed in. Rockets and jet planes were attacking the presidential palace. Inside, knowing that he would not survive the day, Allende delivered his final message as many thousands of Chilean people listened to his words on the radio.

(Sounds of Allende's taped radio address)

Norman Solomon: A quarter of a century has passed since that day when a coup brought down the democratically elected socialist government of Salvador Allende. For about sixteen years a dictatorship ran the country. The leader of the coup, General Agusto Pinochet oversaw repression that included political imprisonment, torture and murder. In 1989 Chile returned to a democratic system and since then has had a civilian government. Today we're going to talk about the past and present of Chile and the implications for people who live elsewhere in the world. On this round table edition of "Making Contact" we're joined by Reese Erlich, a journalist who covered Chile's transition out of dictatorship in the late 1980s. Reese, welcome to "Making Contact."

Reese Erlich: Hi, Norman.

Norman Solomon: Also with us is Kathleen Vickery who was active in the Chile solidarity movement in the United States and lived in Chile from Autumn 1989 until early 1995. She returned to Chile for a few weeks this summer. Welcome to "Making Contact."

Kathleen Vickery: Hi, Norman.

Norman Solomon: Well, Kathleen Vickery, let's begin with you. How did it happen, would you say, that Salvador Allende, whose voice we heard a couple of minutes ago, actually became president of Chile in the first place. When he won that election, of course, it was a momentous event, but what would you attribute his election to?

Kathleen Vickery: Persistence, because he had attempted to be elected twice before in 1958 and in 1964 I think. And it's greatly suspected that he didn't win in 1964 largely because the US government put huge amounts of money, and with the help of the C.I.A., into preventing Allende's election that time. But because of the inability of the government at that time to sort of satisfy all the needs of many people in Chile they managed to bring him to office in 1970.

Norman Solomon: We think of Chile perhaps at least in large part as a middle class or by Latin American standards somewhat affluent country. But of course there's always been a lot of poverty in Chile, right? And I wonder what the constituencies were that really helped bring about Allende's election in 1970.

Kathleen Vickery: Oh, definitely it was, you know, workers. There was actually a large working class. Chile was fairly industrialized. So it was workers and also peasants in the countryside. And part of the middle class had voted for him too. There was discontent even in the middle class.

Norman Solomon: So, the three years of the Allende government, the popular unity was characterized, among other things, by very vehement opposition from the White House, from the C.I.A.? How did all that converge in terms of the forces within Chile?

Kathleen Vickery: Well, again, once again this opposition to Allende and what he represented as the candidate of the socialist party and someone who openly advocated socialism and something more than reforms in terms of Chile, didn't sit well with US policy at the time. And there was an open policy within the US government to support the interests of trans-national companies and US investments in Chile. They also gave more support to the Chilean military than to any other military force in Latin America during those years, knowing that they had secure allies.

Norman Solomon: So you had, as had been the case for many decades in Chile, a civilian elected government but parallel to that you had a very strong military that was getting resources from the US.

Kathleen Vickery: Yes.

Norman Solomon: And then, in September of 1973 came the coup. What effects did that have on Chilean society?

Kathleen Vickery: Oh, it was drastic. I mean it was, I think as most people know, extremely bloody coup. So overnight all the democratic processes were closed, shut down. There were massive arrests. Many people arrested, tortured, killed. And eventually many people sent into exile. There were concentration camps maintained for several years, in fact, until the military, the Junta, felt that they had effectively neutralized the opposition.

Norman Solomon: And what kind of, especially in retrospect would you say, what kind of economic priorities were being laid out and what was the long term aggregate economic effect, in terms of who had power, who had resources, what the role of the government was, or was not?

Kathleen Vickery: You mean, under the military?

Norman Solomon: Right.

Kathleen Vickery: Well, the military, the Junta began by simply reversing the more progressive economic policies that Allende had managed to bring about. Because the thing he's best know for of course is nationalizing Chilean copper and many of the other industries that were owned or largely owned by foreign companies, okay, when he came to power. So under the military government they began a process of privatization and basically market reforms. Neo-liberal market reforms.

Norman Solomon: And so for that sixteen or seventeen year period beginning in September 1973 into the late 1980s was it simply return to the status quo before the Allende election? Or how regressive and backward looking were those changes so to speak?

Kathleen Vickery: No, depending on who you ask, I mean in a way it was forward looking because it was definitely consistent with the whole neo-liberal market system that was being touted under Reagan in the US, known as Thatcherism in England. And so on and so forth. It's a global, they were definitely part of a global effort.

Norman Solomon: So they were kind of cutting edge to make these...

Kathleen Vickery: Oh, yeah, in that sense, yes.

Reese Erlich: You have to understand that it was engineered in the United States. Milton Freedman from the University of Chicago and his acolytes went to Chile and said privatize everything. Free market's the answer to everything. And it was actually a fairly rather radical step even for right wing military dictatorships which were used to actually not implementing so called free market reforms and so it was held up as a model by the extreme right wing in the Unites States.

Norman Solomon: Well, Reese Erlich, you were in Chile during the election period at the end of 1989, working as a journalist you were reporting for Monitor Radio and Christian Science...or the San Francisco Chronicle. What kind of evidence or indications did you see that there was an economic power structure at that point. I mean did that jump out at you in any way?

Reese Erlich: Well sure, the military had basically run the country. And a lot of generals were getting very rich. And as the things, we can come back to this later, but look at what's happening in Russia where the oligarchs in power get the spun off industries and so on. And so you had a new economic class arising that was beholden to Pinochet. Now in '89, much to Pinochet dismay, the anti-Pinochet forces won the elections and I still remember as people in that speech that we heard in Spanish by Allende, he talked about one day people will be marching on the Alameda which is one of the big streets in central Santiago. And indeed people took to the streets that night when Pinochet's candidate was defeated and Aylwin won the election, people took to the streets and consciously echoing the words of Allende.

Norman Solomon: What would we call Aylwin as a candidate? Was he a centrist? He was a Christian democrat. Where was he positioned in the ideological spectrum?

Reese Erlich: Yea, he was a centrist, a very main stream politician. He was...the left, however united around him for the United Front in order to defeat the Pinochet candidate. The communist party and the other parties ran their own candidates for other office but everyone backed him for presidency.

Norman Solomon: Now you were both there at the end of 1989 when this transition was taking place and I'd like to ask each of you to kind of describe the atmosphere as you sensed it at that point.

Kathleen Vickery: Oh, there was really a sense of euphoria. And a great lifting, you know, of a weight. You know people couldn't have been happier. The dictatorship was over and there was kind of a long, emotional transition, I would say. I mean it began another kind of transition but there was a real emotional transition. There were a lot of public catharses. You know some of them are still going on. This is a long term process, coming out of something like that.

Reese Erlich: Yea, I was staying with a working class family, a blue collar family in Santiago and the night of, well, the days leading up to the election there were huge rallies and people were out in the streets and the night of the election I remember it was just overwhelming joy. It would be like the defeat of fascism in Germany, or something. I mean people were just ecstatic and for the first time there was going to be some room to be able to, you know, have freedom of expression and participate in union activity and politics et cetera that had been basically crushed for the last sixteen years.

Norman Solomon: And now here were are, what, nine years or so later and Kathleen, you were back in Chile this summer. I wonder if you would imagine the way people were looking at the future back at the end 1989 and what's happening here in 1998. How much does the present represent the hopes that people had at the end of the 1980s.

Kathleen Vickery: I don't even have to imagine it. Because having also lived there also during the five years after the elections even though people were ecstatic and euphoric there was a certain amount of skepticism. Knowing that Aylwin is basically, that he and also the party that he represents are basically centrist forces that played a large role also in the coup. So everybody knew that this was a pacted democracy.

Norman Solomon: It was what?

Kathleen Vickery: It was a pact. It was a pact between these forces and the military to continue to govern under democracy. There was the military government...what can I say? They wrote a new constitution that was instituted by decree in 1980. And under that constitution what we, what is normally referred to as democracy is severely restricted even under the electoral system within the Senate for example. The Senate is completely dominated by the Right because there are nine appointed Senators. And not until this year, those nine appointed Senators were appointed by Pinochet and they've been there sitting in the Senate, voting. Until just now, just a few months ago there was another election, you know, and this is the year that that terminated. And Frei was now able to appoint some of those. And now there are ten designated senators and so on. There are many restrictions like this. This is just a primary example.

Norman Solomon: And Frei is the successor of Aylwin?

Kathleen Vickery: He is the successor.

Norman Solomon: Also Christian Democrat.

Kathleen Vickery: Yes, also. Same party continuation. Yea.

Reese Erlich: And remember Pinochet was kept on as the head of the army despite his political defeat of his forces and he's now senator for life, as of this year. So the guy is going to die with his medal pinned to his chest and, you know, keel over at some point from old age.

Norman Solomon: So to say that there was a transition back to democracy would be maybe an overstatement? Or it depends on how one defines democracy.

Kathleen Vickery: You have to put it, you know, in quotation marks.

Norman Solomon: Hmm. There seems to be some unity there, though, between the economic forces and the center and the military.

Reese Erlich: Keep in mind that every time you hear, whether it's in Chile or somewhere else, about how there's now democracy. Like, supposedly Latin America is all democracy now. What the US means by that is that there is now elections. And it's true there's a very big difference between Chile under Pinochet and Chile today. But not in its essence. The military still has a lot of influence. The economic measure conglomerates, foreign corporations that you can't call that democracy. I mean, they have elections, but there's quite a big difference.

Norman Solomon: Yea, as we continue this discussion I want to ask both of you to talk more about the economic power structure in Chile and elsewhere in the third world for that matter, and what it might have to do with the economic power structure we see, say in North America.

We're speaking with Reese Erlich, a journalist who's reported from Chile and many other countries and Kathleen Vickery, a researcher and long term activist for human rights in Chile. I'm Norman Solomon and you're listening to the "Making Contact" radio program. We'll return to this discussion in a minute.

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Let's resume our discussion. Chile has embraced the so called free market. I understand there's a lot of consumer buying and a lot of consumer debt. What does that mean in a country like Chile when people can buy some things but they owe a whole lot?

Kathleen Vickery: I guess it means what it means, you know, everywhere. You know, people get on a treadmill, an economic treadmill. So that consumerism convinces you that you need more and that you have to have more, whether or not you can pay for it. And credit has been made available to Chileans way beyond, above and beyond most of their incomes. Minimum wage, I think is 178 dollars a month in Chile right now. And so it is. It's incredible. There are malls everywhere. In fact, I was thinking as I prepared for this show, why in July, I talked less about politics with people than I used to. And, in fact, people talk more about, you know, money, their jobs, or lack of a job or how they're going to pay for something. How they're going to get this, or how they're going to pay for their kid's school. I know a woman who has to have an operations. She has to save for it because she doesn't have it covered. A lot of the conversation was around those kinds of issues.

Norman Solomon: Reese, you've reported from Asia, from Eastern Europe. Does any of this sound familiar?

Reese Erlich: Very much so. All you have to do is take a look at what is going on in Russia now and you'll see the future of free market reforms. The process, I mean Chile came from a right wing situation but nevertheless the old Soviet Union, basically the new Russia was supposed to become...it's now declared by the United States to be democratic because it has a free market. And those two things are supposed to be linked. Again, if you look at the actual, well, if you look at the economy it's a complete disaster even though they've been following all the I.M.F. rules and all the free market advice that they've been getting from the US and elsewhere. And secondly, how can you call a country a democracy when, you know, yes, you have elections but the president has, you know unilateral power to dissolve parliament, to declare taxes, you know, rule by edict et cetera. There's just a whole slew of things that don't conform to anybody's notion of what real democracy is. But as long as you've got one strong man in power that's acceptable to the US, well then it's democratic.

Norman Solomon: Somehow I just thought of Peru but of course there are many other countries where you have this leader who's supported by the economic elite and presumably the military as well. Twenty years ago we would talk about the military in Latin America. Now we're talking about the economic forces. Presumably the military in Chile and elsewhere have not disappeared, right?

Kathleen Vickery: Oh, no. No, no.

Norman Solomon: What's their relationship to these economic powers?

Kathleen Vickery: Without going into too much detail, the military has a very powerful role in Chile. They're seen there as a counter-balance to make sure that everyone understands that both the economic system and the political system are there with their approval. And yes there is economic ties also between the upper echelons of the military and many of the banking and the financing corporations that, where most of the concentration of wealth is in Chile.

Norman Solomon: Would it be an over-simplification, I imagine it would be, but what do you think of the notions that in many countries ten, twenty years ago the military was overtly in power to insure great inequities in terms of economic resources and now those inequities are being insured through a different configuration of governance? Does that make sense to you, or is there an ideological continuity I guess I'm asking, between the dictatorships of the 50s, 60s, and 70s, and neo-liberalism, as it's called in third world countries in the late 90s

Kathleen Vickery: Kind of. I mean I think it does, there is definitely a continuity there, yes. It's not quite the same thing but...

Norman Solomon: And what's the ideology behind it? What's the continuity about?

Reese Erlich: Yea, let me...I think... I don't think the US or in deed even the military says, "Ah ha, we want to stay in power in order to have economic inequality. Probably if you ask them they'd say, "Well we'd much rather have a vibrant economy where everybody is making a living wage, and we're all happy and we have democracy. The problem is, they can't do it. So therefore what's the next best alternative? Well, the inequitable systems that they've got. So, in the 50s and 60s and all the way through the 70s and part of the 80s when the cold war was still going on, you had in many parts of Latin America leftist lead insurgencies whether it be in urban areas or guerrilla movements and those were seen as such a threat both by the local elites and by the US, that therefore anybody that could stop the guerrillas was OK to stay in power. So you had Samosa in Nicaragua and military junta's in Guatemala and et cetera, et cetera.

OK, so with the end of the Cold War and, to some degree, the lessening of the threat of guerrilla war and socialist take-over in parts of Latin America, the situation changed and it was always in the US interest to have an elected government rather than a military dictatorship because they tend to be more stable. Military, all you have to do is look at military governments in Argentina and various other places and they tend to, like, go to war with other countries. And they claim territory that had been forgotten about for fifty or a hundred years or whatever. And it's not, it doesn't make for a real stable ruling by the United States. So they prefer to have pliant governments that are elected, if they can get away with it. If that's more effective. And I think that's what we're seeing now and they are in fact in force. I mean, you don't see any of these elected governments taking on US multi-nationals and taxing them or penalizing them for ruining the environment or stealing indigenous land. They don't do that. They go along with whatever the program of the US companies is, and that's fine.

Norman Solomon: So, would Chile be a case in point?

Kathleen Vickery: Yea, I was just going to say the curious thing about Chile is that it is a vibrant economy with great, a huge gap in income distribution. But the economy is, in fact, by most indicators, quite vibrant.

Norman Solomon: At the same time that a quarter of the country is said to live in absolute poverty.

Kathleen Vickery: Uh huh, I don't know about absolute poverty, but they don't make enough, supposedly to meet, you know, the minimum standard of living. But under the government’s, you know the Aylwin government and the Frei government they succeeded in reducing poverty quite a bit; compared to what had been under the dictatorship. There's a feeling also; if you ask most Chileans they will say that they're better off than they were ten years ago or definitely under the dictatorship, even are people who are still living at the poverty level. They feel that they are doing better.

Norman Solomon: Writing in the Nation magazine March 23, 1998 Mark Cooper says that the top ten percent of the Chilean population earns almost half the wealth and he quotes an economist, an opposition economist, Orlando Caputo, as saying, "The Chilean system is easy to understand. Over the past twenty years sixty billion dollars has been transferred from salaries to profits."

Kathleen Vickery: Yeah

Norman Solomon: I'd like to in the few minutes we have remaining here ask a little about the bridges between what's happened in Chile and what's perhaps going to be happening in the United States. Maybe a symbol of that is the person who was Chile's minister of labor and welfare under the dictatorship during the early 1980s, a guy named Jose Piniera. Now he has moved to the Unites States. He now works very closely with an influential think tank in Washington D.C. called The Cato Institute. And he co-chairs Cato's project on Social Security privatization. He's one of the leading voices for turning Social Security into a private system here in the United States. I want to pose this question: What are the links between the forces that shaped the economic priorities in Chile and the pressures that are now being brought to bear in the Unites States in terms of privatization of Social Services and so forth?

Reese Erlich: Well, one clear link is the ideological one which is that Milton Freedman and his supporters have always been against Social Security. I mean, it's Big Brother, it's government meddling and they argue that you're going to have a much better Social Security if you privatize and everybody can invest their own money. They convinced the Pinochet government of that back when and they instituted that system. Now, luckily for the rest of us, I mean that benefits the big mutual funds and the stock brokers and the investment banks who make a lot of money off that kind of privatization and leaves everybody else in the lurch. With the huge stock market crash right now going on in the Unites States I'm not sure how much validity that privatization plan is going to continue to have. It's going to raise a lot of questions in people's minds like, I can retire and have less money?

Norman Solomon: How inviting it will be for people in the Unites States? Meanwhile Chile, with the Milton Freedman and Chicago Boys and so forth was, in retrospect, was in its own right a very perhaps tragic situation, but it was also seen a laboratory. Is that fair to say?

Kathleen Vickery: Yea. It was definitely a laboratory for all of these policies. For all of the Milton Freedman, I mean they're known as "the Chicago Boy policies," and "The Milton Freedman policies." It took a dictatorship, you know, to be able to sort of put a freeze on absolutely everything in terms of any kind of opposition or activism in order to be able to do what they did. And they effectively then instituted things like this pension plan system which is fully privatized,

Norman Solomon: In Chile?

Kathleen Vickery: In Chile. Employers put nothing into it. It's all based on a percentage of wages. And I was commenting that, sort of in personal experience, in perhaps my very small cohort of friends and acquaintances, very few people I know actually have one of these pension plans. They are simply not fully and stably employed and in this situation, where they feel that they can put that percentage of their income into the pension plans.

Norman Solomon: So the public sector and the employers have, essentially, no responsibility for Social Security.

Kathleen Vickery: No. What they're supposed to do is they're supposed to deduct from wages. And then deposit it. And there have been many scandals about companies who said that they'd made the deductions and they haven't paid the money to the pension plan. And there are ways the government, I mean there are constant demands on the government. The government does have, even though it's restricted in many ways, in terms of the kinds of controls and regulations, it has leeway. It could and can and has made a few minimum attempts to regulate the system and there are further demands on it to do so.

Reese Erlich: Yeah, the Chilean example shows, often used as an example of why the privatization would work here, but, in point of fact, it is a very good example of why it doesn't work. Because if right now the government has to at least guarantee people on Social Security don't get that much money, but at least there's something for all those years that you've worked. On a privatization plan there's no such guarantee and the government certainly isn't setting aside money for that. And secondly, people may or may not remember the 80s in this country when 401K plans were first introduced, they were done as a substitute for big company pension plans. And companies we're supposed to contribute. That was the scam. That was the basis on which the law was passed. But there was no requirement that that be the case. So as a net result, most of the time now you go to work for somebody and you make all the contribution to the 401K plan. And so to privatize Social Security would be the same thing which is that, OK, now, instead of the employer paying half and you paying half, you can pay it all. In hopes that the stock market will have sufficiently recovered whenever you retire and you'll get something.

Norman Solomon: That's the voice of Reese Erlich, a journalist who's reported from many parts of the world for print and broadcast news outlets. Also our guest today on Making Contact included Kathleen Vickery, a researcher and long time activist for human rights in Chile. Thanks to both of you for joining us.

That's about it for this edition of Making Contact. If you'd like a tape or transcript of today's program or more information about Making Contact, please get something to write with and in a few moments you'll be hearing a toll free number which can be used from anywhere in the United States and Canada. Making Contact is a independent production funded by individual contributors. Our producers are Phillip Babich and David Barsamian. Our executive producer is Peggy Law. To get in touch with our guests or to receive some free background information call the National Radio Project at 800-529-5736. You can also order tapes and transcripts by calling that same number, 800-529-5736. This edition of Making Contact was co-produced by the institute for public accuracy. If you'd like to get in touch with us at the Institute go to our Web page at www.accuracy.org or if you'd like to get on an automatic e-mail list with updates, send an e-mail note to accuracy@accuracy.org. Again, that's the word accuracy@accuracy.org. A special thanks to Danny Bringer for engineering the program today. This is Norman Solomon. For everyone involved with Making Contact, bye for now.