On the day when the remembrance of the deaths of almost 3000 innocent people in America is one of the top news items, it is important to remember an older act of terrorism – committed by a state against its own government – that took place exactly 40 years ago.

While today’s workers and youth are very familiar with the human tragedy that unfolded in New York on September 11, 2001, and how it was justified to unleash new wars in Afghanistan and Iraq, it is important to note that these militarist policies of the United States date back over a century and have included coups, invasions and destabilisation in nearly all parts of the world, especially Latin America, eastern Europe, East Asia and Africa.

Chile: The forgotten September 11
Today marks the 40th anniversary of the military coup that overthrew the democratically elected government of Salvador Allende. The Pinochet regime set a new standard of brutality in post-war history: according to official figures 3,065 were killed or disappeared and 40,018 people were victims of human rights abuses. One of the first to die was President Allende himself – bombed in the presidential palace by his own air force!

Allende, head of the Popular Unity coalition government, had carried out modest land reforms and various nationalisations, including the all-important copper industry (hitting big US companies). Popular Unity’s land redistribution programme was in fact a continuation of President Eduardo Frei’s policy that allowed the big landowners to keep 80 hectares of the best land as well as buildings, machinery, animals and so on.

The main target of nationalisations was the country’s copper mines: largely controlled by two US companies, Anaconda and Kennecott, who sold Chilean copper to their US-based plants at half the world market price!

The workers and the popular front government
Just as the popular front government of Popular Unity – made up of the Socialist Party, the Communist Party and three small bourgeois parties – was most of the time holding back the peasantry in seizing land and transforming the countryside, it was also holding back the working class.

In June 1972, however, the workers took the most important step in self-organisation: the first cordones industriales (industrial belts) was set up – linking 30 different factories in an industrial belt. The spark was a dispute over wages at the Perlak canning plant in Cerrillos, in central Chile. The workers occupied the plant and demanded government intervention (according to the 1932 law aimed at preventing bankruptcies or social conflict).

The Minister of Labour, Mireya Baltra, a so-called Communist, denounced the occupation! The courts ordered the police to throw the workers out of the plant. The workers’ response was to set up an area committee and block all roads around the industrial area of Maipu. They eventually forced the government to back down and accept their demands.

By September 11, 1973 there were 31 cordones, including eight in the capital Santiago.

American imperialism and the CIA
Although the class-collaborationist popular front government was all the time holding back the workers and peasants, to the Chilean bourgeoisie and US imperialism it was still too radical.

The American plan involved destabilising the country as a pretext for a coup by the Chilean army. From mid-1971 many measures were taken by American banks and other corporations – particularly the major US copper companies – that were effectively boycotting Chile. There were many other measures taken to destabilise the country. For example, in October 1972 the CIA organised and financed the so-called “October bosses’ strike” that involved business associations, lorry companies and drivers, shop owners and doctors. The bosses’ strike, and the violent clashes that ensued, polarised society and actually made the cordones spread rapidly.

The class balancing act of the Popular Unity government prevented or hindered the workers and peasants from organising effective counter measures to the big bourgeoisie’s and US imperialism’s provocations that were preparing the ground for a coup. That is why neither the government nor the masses could counter the coup.

The Chicago Boys and “The Miracle of Chile”
While nowadays not many people can be found to condone the coup or the Pinochet regime as such, the one thing that the coup’s and the military junta’s apologists still hide behind is the so-called ‘economic miracle’ that the dictatorship brought about. Although not all of them call it “The Miracle of Chile”, as Milton Friedman did, they still maintain that it led to a big improvement in the Chilean economy. Sadly, there are even Pinochet opponents who refer to the new ‘entrepreneurial spirit’, the significant reduction of inflation, export-driven growth, the balance of payments surplus and the restoration of market mechanisms.

The hard and painful truth is that the programme of economic ‘reforms’ drawn up by the Chicago Boys, Milton Friedman’s Chilean disciples, produced an economic disaster. The dictatorship privatised 160 companies, 16 banks and over 3,600 agro-industrial plants and mines, privatised the pension system and slashed public employment. The junta attacked the working class by abolishing the minimum wage and outlawing collective bargaining. But the capitalists and the rich were given a hand up: all taxes on wealth and business profits were abolished!

This was the first experiment in what became known as ‘neoliberal reforms’: privatisation, de-regulation, free markets, low taxation, and so on – all in a society where trade unions (and all other labour organisations) have been smashed. This ‘pristine’ and ‘laboratory conditions’ type of capitalism is supposed to lead to massive growth and prosperity.

And unfortunately, until about five years ago, this approach became the ‘consensus’ that was being implemented by the IMF, the World Bank, the EU, the Inter-American Development Bank, the Bank for International Settlements and similar organisations all over the world, especially after the collapse of Stalinism in central and eastern Europe.

Although the recent economic crisis has dented this unquestioning view of these policies, the IMF and its like are still making the implementation of these policies the condition for new loans and bailouts in many countries!

But what really did happen to Chile’s economy? In a 2006 study, entitled The Economic Legacy of Pinochet, Andres Sanfuentes showed that between 1973 and 1989 the average annual GDP growth was just 3.5%. Other economists who have analysed the performance of the economy under the 17-year military dictatorship have also not found any ‘miracle’. In fact the ‘unhindered’ operation of capitalism led to a 19% drop in GDP in 1982 and 1983! The way out of the mess was to rely on the still nationalised copper industry and curtailing the free market!

The Pinochet regime never brought inflation under control and it was still at 32% in the last year of the dictatorship. Just 10 years of the dictatorship, and the free market reigning supreme, pushed unemployment up to 22% (from 4.3% in 1973)! Most important of all, poverty still affected 39% of the population in the last year of the dictatorship (rising from 20% in 1970)!

The capitalists learnt great lessons from their neoliberal slash and burn experiment in Chile and have been implementing these policies nearly everywhere. The revolutionary workers must also learn from the great advances of the Chilean workers before the coup. Although the 1973 coup d’état brought these to an end, the experiences and lessons of the struggles are available to workers all over the world. In particular, the cordones are an organisational form that workers in all countries can learn from and help build their struggles in the quest to overthrow capitalism.

Amin Kazemi
11 September 2013