Pinochet’s Legacy

September 11th came and went, and right on cue, the New Repulic has an article out purporting to bust the “myth” that Pinochet was ever good for anything at all. They’re worked up because a lot of pundits on the right like to defend “the Pinochet model” as a way of dragging backward countries – like, say, Egypt – into modernity. And the reason that a lot of people on the right like to do that is because a lot of people on the left like to pretend like there was never anything wrong with Salvador Allende’s government and that Allende was a martyr to moderate socialists, a victim of US imperialism. And the reason this debate has continued for 40 years with no signs of slowing down is because there’s just enough truth on each side that no one has to give in, but not enough truth on any side to close the deal.

My axe to grind here is informational. If I’m mildly pro-Pinochet it’s because he’s such a wonderful example of the left’s double standards. Put bluntly, if we’re allowed to defend the regimes of the likes Fidel Castro and Daniel Ortega, then we’re sure as hell allowed to defend Pinochet. The perennial unwillingness of anyone to put the Chilean coup and the ensuing Pinochet regime in context is in bad need of correcting – and not just from the left, actually.

The article indeed opens with a number of cases of people on the moderate Pinochet-defending right who might need to check their history books. Charles Krauthammer and Jonah Goldberg are both quoted, for example. But then, so is Roger Cohen, and you know what? Roger Cohen is actually one of the rare voices who knows what was right about Pinochet without losing sight of what was wrong. It’s lumping people like Cohen in with Krauthammer and Goldberg that I want to address.

The most appropriate gut reaction to [Cohen’s tepid defense of Pinochet] may be moral revulsion—3,000 people killed or disappeared so that you can enjoy your global sushi at the mall? But it’s also worth asking whether story is even true. Was Pinochet’s dictatorship really a time of prosperity, growth and openness against an unfortunate backdrop of torture, terror and repression? Is the healthy OECD democracy we see today a result to his wise if brutal stewardship?

Why let him get away with the cheap shot? No, Paarlberg, no one serious, least of all Cohen, thinks that it’s OK to kill 3000 people in order to pave the road for mall sushi. Nor can anyone who reads the Cohen article in question come away with anything remotely approaching the impression that Cohen was arguing for any such thing. So stop lying, asshole.

On to the questions:

(1) Was Pinochet’s dictatorship really a time of prosperity, growth and openness against an unfortunate backdrop of torture, terror and repression? Not exactly, no. In fact, there were two recessions during the Pinochet regime that were easily as bad as anything that had happened under Allende. In 1975 the economy shrank by 13%, in 1982 by a whopping 19%. Unemployment in 1975 was something like 20% and it went possibly as high as 30% briefly in 1983. So, there were some rough times for sure. But then again, the argument about Pinochet has never been that Pinochet delivered Chile’s subsequent prosperity during his rule, but rather that policies implemented in his rule that would never have survived a straight-up vote at the time laid the foundation for it – to wit, that the later prosperity would not have been possible without him. And here I wonder whether Paarlberg has any counterarguments to offer. Did or did not foreign direct investment increase significantly under Pinochet? It did. Did or did not harsh monetarist policies break the back of inflation, which under Allende had been running at 140-150% in the later years? They did. Did or did not Pinochet seriously liberalize trade, taking down many Chilean tarrifs? He did. It would take a serious fool to believe that any of this was in the works under Allende, or under any of the democratic parties competing with Allende for power. Another question that I doubt whether Paarlberg wants to answer is how Chile’s growth under Pinochet compared to that of its neighbors. He’s happy to tell his readers – with an actual link, ladies and gentlemen! Let no man say that Paarlberg doesn’t cite his sources! – that Chilean growth averaged only 2% of GDP per capita over the Pinochet years. But of course he’ll leave out the nagging fact that no country in the region did any better. Chile’s growth chart is much more volatile than the regional average. It more or less grows and shrinks at the same times as the rest of South America – save that it avoids the late-70s and late-80s recessions, the late-80s one in spectacular fashion – but the growth periods are much stronger, and those two nasty recessions are much, much worse. Point being, if you want to note, as a point against Pinochet, that growth “only” averaged 2%, you’re sort of obligated to also note that Chile is not special here, and maybe to point out, while you’re at it, that Chile avoided a lot of regional recessions in the mix.

One point I think the pro-Pinochet crowd has to concede, though – and it’s curious Paarlberg doesn’t mention it much – is that unemployment was really high. It’s worth mentioning, as an aside, because that’s a typical side-effect of monetarist policies. Chile and the UK in the early 80s are the most promient cases in point, but they’re not the only ones. The consequence for libertarians being that we have to admit that neo-Keynesians are apparently right that there’s some kind of tradeoff between inflation and employment, even if it’s not as direct a correlation as the Phillips Curve implies, and even if it’s only true in the sense that breaking inflation costs jobs. In any case, I think it could be cogently argued that Chile’s growth over the Pinochet period wasn’t worth it given the cost in employment – so it’s interesting that Paarlberg doesn’t really go there.

(2) Is the healthy OECD democracy we see today a result to his wise if brutal stewardship? I wouldn’t put it in exactly those terms, but I think the answer here is a qualified “yes.” Paarlberg wants to say that none of it is:

The numbers are clear: the true Chilean economic miracle occurred after Pinochet, under democratic, leftist governments.

Which is true but beside the point – because the kinds of “democratic, leftist governments” he’s talking about are NOT the kind of “democratic, leftist governments” that were on offer in 1970 when Allende won his historic election. Those only came after Pinochet broke the back of the hardcore socialist movement and then agreed to step aside in an internationally-supervised democratic transition. Was there another way? Leftists will talk endlessly about how if the CIA had only left Allende alone, some kind of miracle would have occured, but it’s a position that’s extremely difficult to credit. Allende’s regime took the predictable path: first he handed out a bunch of cash that seemed to help the economy. Then the bills started coming due and things got really bad. Part of this was because the US stopped trading with Chile, but that was because of his policy of stealing all their copper mines. Now, reasonable people can disagree about whether the US should have allowed its copper interests in Chile to simply be appropriated – personally, I think it should have – but empirically the question of whether Chile was getting a good deal for “its” copper would seem to answer itself. If your argument – and it is the argument of every leftist defender of Allende I know of – is that it is all the fault of US sanctions that the economy tanked under Allende, then you’re basically admitting that Chile got a great deal of value out of trade with the US that it (a) was evidently unable to get elsewhere and (b) was unable to replace domestically. Given those realities, it’s hard to see how nationalizing your most important trading partner’s assets is not a bad economic policy that Allende is responsible for. Entering into military and economic agreements with the Soviet Union on top of that, given the circumstances of the Cold War, makes it essentially impossible to argue that Allende was not deliberately alienating the US. And of course all of this discussion is extremely generous, because the truth is that Allende’s economic policies were never going to pay off anyway involving, as they did, a lot of technocratic central planning of the sort that the Soviet Union itself had already (privately, admittedly) admitted didn’t work. But the point for Paarlberg, really, is that he needs to explain to anyone at all really what “democratic, leftist government” was available in 1973 that would have implented exactly the policies that he seems to think are responsible for Chile’s recent growth. Surely it wasn’t Allende’s. So then whose? And what basis does he have for believing that Allende was going to allow normal elections to take place? The national assembly didn’t think so, and neither did the Supreme Court – Allende was more or less ordered to stand down for violations of the constitution, and this was the basis of the coup.

But maybe Paarlberg isn’t actually dealing in counterfactuals. Maybe he just wants us to acknowledge that Chile’s economic growth might have happened in spite of, rather than because of, Pinochet. If that’s the case, I would say that the jury’s out and the facts are decidedly mixed. Paarlberg’s right that more growth happened after the Pinochet period than during it, but the implication that it’s the “leftist” in “democratic, leftist” that’s responsible for that growth is unlikely to be true. Independent studies (like this one by the World Bank) reckon that over 60% of Chile’s post-Pinochet economic growth owes to simple trade liberalization, a process that Pinochet got off the ground, and hardly a policy one can call “leftist.” So if the lesson that Paarlberg wants us to learn is that liberal democracy with respect for free trade is better than dictatorship for fostering growth, then SOLD! And how.

But then, that wasn’t what we were arguing over. We were arguing over whether we could have gotten here from there in a country like Chile without something like Pinochet, and Paarlberg’s article does nothing that I can see to establish that it would have. He can say, if he likes, that Pinochet’s Chile wasn’t a miracle of prosperity, and he’d be right. But then he’s going to have to explain (a) how Chile nevertheless managed to be more prosperous than its neighbors during this time and (b) why Chile continues to be even more prosperous vis-a-vis its neighbors than it is now. There is something special about Chile, and if Pinochet’s not at least a factor in that, then what is?

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