[Peace-discuss] Fw: Chile's Socialist Rebar

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Sent: Wednesday, March 03, 2010 9:45 PM
Subject: Chile's Socialist Rebar


> Chile's Socialist Rebar
> Naomi Klein
> The Nation
> March 3, 2010
> http://www.thenation.com/doc/20100315/klein
>
> Ever since deregulation caused a worldwide economic
> meltdown in September 2008 and everyone became a
> Keynesian again, it hasn't been easy to be a fanatical
> fan of the late economist Milton Friedman. So widely
> discredited is his brand of free-market fundamentalism
> that his followers have become increasingly desperate
> to claim ideological victories, however far-fetched.
>
> A particularly distasteful case in point. Just two days
> after Chile was struck by a devastating earthquake,
> Wall Street Journal columnist Bret Stephens informed
> his readers that Milton Friedman's "spirit was surely
> hovering protectively over Chile" because, "thanks
> largely to him, the country has endured a tragedy that
> elsewhere would have been an apocalypse.... It's not by
> chance that Chileans were living in houses of brick--
> and Haitians in houses of straw--when the wolf arrived
> to try to blow them down."
>
> According to Stephens, the radical free-market policies
> prescribed to Chilean dictator Augusto Pinochet by
> Milton Friedman and his infamous "Chicago Boys" are the
> reason Chile is a prosperous nation with "some of the
> world's strictest building codes."
>
> There is one rather large problem with this theory:
> Chile's modern seismic building code, drafted to resist
> earthquakes, was adopted in 1972. That year is
> enormously significant because it was one year before
> Pinochet seized power in a bloody U.S-backed coup. That
> means that if one person deserves credit for the law,
> it is not Friedman, or Pinochet, but Salvador Allende,
> Chile's democratically elected socialist President. (In
> truth many Chileans deserve credit, since the laws were
> a response to a history of quakes, and the first law
> was adopted in the 1930s).
>
> It does seem significant, however, that the law was
> enacted even in the midst of a crippling economic
> embargo ("make the economy scream" Richard Nixon
> famously growled after Allende won the 1970 elections).
> The code was later updated in the nineties, well after
> Pinochet and the Chicago Boys were finally out of power
> and democracy was restored. Little wonder: As Paul
> Krugman points out, Friedman was ambivalent about
> building codes, seeing them as yet another infringement
> on capitalist freedom.
>
> As for the argument that Friedmanite policies are the
> reason Chileans live in "houses of brick" instead of
> "straw," it's clear that Stephens knows nothing of pre-
> coup Chile. The Chile of the 1960s had the best health
> and education systems on the continent, as well as a
> vibrant industrial sector and rapidly expanding middle
> class. Chileans believed in their state, which is why
> they elected Allende to take the project even further.
>
> After the coup and the death of Allende, Pinochet and
> his Chicago Boys did their best to dismantle Chile's
> public sphere, auctioning off state enterprises and
> slashing financial and trade regulations. Enormous
> wealth was created in this period but at a terrible
> cost: by the early eighties, Pinochet's Friedman-
> prescribed policies had caused rapid de-
> industrialization, a ten-fold increase in unemployment
> and an explosion of distinctly unstable shantytowns.
> They also led to a crisis of corruption and debt so
> severe that, in 1982, Pinochet was forced to fire his
> key Chicago Boy advisors and nationalize several of the
> large deregulated financial institutions. (Sound
> familiar?)
>
> Fortunately, the Chicago Boys did not manage to undo
> everything Allende accomplished. The national copper
> company, Codelco, remained in state hands, pumping
> wealth into public coffers and preventing the Chicago
> Boys from tanking Chile's economy completely. They also
> never got around to trashing Allende's tough building
> code, an ideological oversight for which we should all
> be grateful.
>
> Thanks to CEPR for tracking down the origins of Chile's
> building code.
>
> About Naomi Klein Naomi Klein is an award-winning
> journalist and syndicated columnist and the author of
> the international and New York Times bestseller The
> Shock Doctrine: The Rise of Disaster Capitalism
> (September 2007); an earlier international best-seller,
> No Logo: Taking Aim at the Brand Bullies; and the
> collection Fences and Windows: Dispatches from the
> Front Lines of the Globalization Debate (2002). more...
>
> * Copyright © 2009 The Nation
>
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