Modern Chile 19704989

...Falcoff reminds us that the Communists were the moderates in the Allende coalition, forever trying to restrain the left and keep it within the confines of bourgeois legalism...

...The propaganda about "excess profits" later came back to haunt Allende because the copper companies soon began to lose money under his management, and he could hardly account for this by admitting that the profit margin had been extremely thin all along...

...In the 1960s Chile had been the showcase of the Alliance for Progress...

...In other cases the Socialists (and even more extreme groups on the left with links to Allende's family) would stir up labor disputes, allowing the state to take over a factory "temporarily" without having to pay compensation...

...Allende brought about his own Ambrose Evans-Pritchard writes on Latin America for the London Daily Telegraph...

...Allende's Popular Unity coalition won only 37 percent of the vote in a three-way race, and therefore needed the support of the (then) center-left Christian Democrats...

...Allende did not change course, as the Communists were urging...

...The coup turned everything upside down...

...But in 1970 it was thrust onto the world stage when Salvador Allende, a charming and literary physician, was unexpectedly elected president, the first time a people had freely opted for Marxism anywhere in the world...

...He took the country to the brink of civil war and provoked the coup...

...Nixon may have threatened to "make the economy scream" but he never followed through...

...The CIA funneled about $6 million to the Chilean opposition, notably the Christian Democrats and the Santiago newspaper El Mercurio...

...The Church Committee in 1975 made all kinds of insinuations but was forced to clear the Nixon Administration of involvement in the coup, admitting that there "was no evidence...

...So ITT then came up with a plan to unleash economic chaos in order to frighten the Christian Democrats into voting against Allende...

...But this was intended to keep pluralism alive at a time when Allende was already using totalitarian tricks to asphyxiate the opposition, and when Popular Unity was co-mingling the state treasury with its own...

...llende's Popular Unity was a minority government, based on a third of the vote...

...It was hard to leave the place alone after investing so much money and enthusiasm...

...The International Telephone and Telegraph Company, which had investments of up to $200 million in Chile, drew the CIA into a plan to bribe wavering Christian Democrats into joining a conservative coalition in the Congress...

...A fellow at the American Enterprise Institute, he has a passion for Chile and has spent a good part of the last sixteen years mulling over the coup, both its causes and consequences...

...Contrasted against the brutal regime that followed, he has blended back into the old democratic order...

...The CIA was not involved in any further effort to overthrow Allende once he had taken office...

...If it had gone on for another three years and Allende had finished his term, the left would have had to face up to its failure...

...But the undisciplined "triunfalistas" in Allende's own Socialist party could not be stopped...

...But Allende could not make up his mind whether to throw in his lot with the army or indulge the extremists on the fringe of his coalition, who were setting up armed militias in the factories and boasting of a forthcoming "sergeants revolution" (i.e., a mutiny) in subverted units of the armed forces...

...The plotters accidently killed the army chief in a kidnap attempt, and the officer corps as a whole stayed loyal to its constitutional tradition...

...The Socialists set about the seizure of the Chilean economy at breakneck speed...

...Chile continued buying American spare parts and machinery, and continued borrowing from American banks...

...Here was an alternative to Bolshevism...

...There was no "invisible boycott," even though this has become an article of faith on the left...

...It went nowhere, and the CIA money set aside was never spent...

...According to the Chilean constitution, the Congress was to elect the president if no candidate won an outright majority at the polls, and although it was customary to confirm the candidate with the most votes it was not mandatory...

...Two of those who worked in the Chilean land reform program, Jaime Wheelock (now Sandinista agriculture minister) and his aide Peter Marchetti (an American Jesuit), have resurfaced in Nicaragua where they have made the same fatal mistakes...

...Allende must have thought he could co-opt the Chilean armed forces, for he lavished them with compliments and nearly doubled the defense budget between 1970 and 1973...

...Instead, after meticulous research Falcoff shows that the Nixon Administration did indeed try to get rid of Allende but did so half-heartedly, without getting anywhere, and soon gave up...

...Once part of the"Area of Social Property," the factories were almost never returned to the owners, despite court injunctions...

...This was understood by the Communist party, a well-established and respected force in Chilean politics, actually to the right of the Socialist party...

...downfall (and arguably deserved it...

...Instead he charged on, covering the huge losses of the state sector with printed money until Chile had the highest rate of inflation in the world...

...It never controlled Congress...

...He claimed to offer a vision that combined Christian values and socialist institutions, a form of Eurocommunism that was likely to have huge appeal in Italy, France, Spain, and all of South America...

...The CIA was instructed to recruit Chilean officers thought to favor such action, and special weapons were smuggled in through the U.S...

...Perhaps now that the unhappy saga of the generals is at last coming to an end, the Allende legend will begin to fade and fashionable opinion in the United States will come to see those heady 1,000 days for what they were: a reckless attempt to impose a half-baked form of collectivism on a recalcitrant people...

...He brought the high command into his cabinet and enjoyed such an intimate relationship with General Carlos Prats, his interior minister, and army chief, that some members of the opposition began to fear a sort of socialist putsch, in which Allende would extinguish Chilean democracy with military support...

...Clearly, there was no consensus for revolutionary change in Chile...

...Thus for all the cable time, telephone calls, meetings, and lunches," writes Falcoff, ". . in an operational sense no joint ITT-CIA plan to bribe the Congress or unleash a financial crisis ever existed...

...The Kennedy and Johnson Administrations spent $2 billion, more per capita than on any other country in the Western Hemisphere, trying to make Chile a shining alternative to Castro's Cuba...

...Credit lines were gradually cut as Chile became less and less creditworthy and ultimately defaulted on its foreign debt...

...The purpose of his book is not to exculpate Nixon, but to inculpate Allende...

...Congress would not pass legislation permitting many of these excesses so Allende either had to go beyond the law, or twist it cruelly...

...Most comic was the treatment of the American copper mining companies, Kennecott and Anaconda, which generated much of Chile's export earnings...

...The regime enjoyed the benefits of default (a saving of $243 million in debt service for 1972 alone), without paying the penalty, since it was able to continue borrowing at a reckless level from the Soviet bloc and Western Europe...

...The regime then tried to stamp out the black market with further controls, including rationing, which raised suspicions that all distribution was going to be nationalized and turned shopkeepers and truckers into enemies—formidable enemies as it turned out...

...Mark Falcoff argues that something much more interesting actually happened...

...But none of the other American multinationals or banks would go along with it, and again the plan went nowhere...

...Allende's election was a blow to the United States...

...Allende became a martyr...

...Needless to say, there was a collapse of investment and the Chilean economy went into a tailspin...

...32.50 Ambrose Evans-Pritchard THE AMERICAN SPECTATOR JANUARY 1990 37 that it was not self-evident at the time...

...If a private company resisted "voluntary" expropriation, for instance, it would suffer the nutcracker: the government would mandate a wage increase and a price freeze at the same time, driving the company into bankruptcy...

...When the coup came three years later it was an entirely Chilean affair...

...This was to be done by quasi-constitutional means...

...As is now well known, the Nixon Administration got entangled and left enough fingerprints in Chile as to render plausible the accusation that Allende was toppled by American intervention...

...A tiny fraction of this American money seeped into the truckers' strike (July-September 1973), which paralyzed the country and set the stage for the coup, but that was in spite of CIA policy...

...His brilliant book, somewhat misleadingly entitled Modern Chile 1970-1989, is perhaps the most authoritative analysis yet published on the Allende era...

...It was a fiasco...

...And finally, the Nixon Administration ordered the CIA to keep its distance from the Chilean military in 1973, even to the point of sacrificing intelligence, so that the United States would not be blamed for any coup...

...Chile became the great hope of the left...

...With hindsight it seems inevitable that the armed forces would step in once Allende went beyond his mandate, but Falcoff makes the fascinating point MODERN CHILE 1970-1989: A CRITICAL HISTORY Mark Falcoff/Transaction Books/327 pp...

...Instead, those who believed that the economic crisis was simply a problem of transition were able to persist in their folly elsewhere...

...Falcoff makes it clear that whatever the intentions of the Nixon Administration, the effects were almost nil...

...Allende bankrupted the economy, ran roughshod over Chilean society, and seemed unable to resist pressures from his own party to subvert Chilean democracy and install a totalitarian system...

...It is not an apologia for American foreign policy (and certainly not for Pinochet's police...

...Across the Andes in Argentina the army had spawned Peron...

...General Pinochet and his associates have rescued for Allende and his government a place in Chilean history which they did not earn and to which they could not otherwise have looked forward," concludes Falcoff...

...Large farms were eliminated...

...Indeed, it is almost universally believed that the CIA was behind the military coup in 1973, and the world holds America responsible for the tragic dictatorship that succeeded...

...They were seized without compensation on the grounds that they had long been earning "excess profits...

...Allende upset the balance of the Cold War...

...Nevertheless, the committee did expose the American effort to prevent Allende from taking power in the first place...

...It was a spectacular example of economic illiteracy...

...He is the father of the messianic and demented General Pinochet...

...to clear away the fog and confusion that protect the legend, and show that the militant left bears much of the responsibility for the rape of Chile...

...diplomatic pouch...

...The mines, banks, railways, steel, petroleum, electricity, and heavy industry fell to the state...

...In 1965 left-wing- officers had taken power in Lima and pushed through a series of radical reforms, sometimes referred to as the Peruvian Revolution...

...T hat was Track I. There was also 1. Track II, Nixon's ultra-secret plan for a military coup (intended to install a civilian alternative to Popular Unity, possibly after fresh elections...

...The anarchic land reform was accompanied by price controls (a practice that was already ruining Africa), causing a sharp fall in food production and a vibrant black market...

...One cannot but be struck by the drastic nature of these measures, and the actual number of Chileans [one-third] willing to vote for them," writes Falcoff...

...A nice irony...