"Stagnation in Liberty" -- The Frei Program in Chile, Part II
Bodenheimer, Susanne
Foreign "Aid" and Foreign Penetration: Keeping Chile in Line In the first part of this article (NACLA Newsletter, February, 1969), we have seen the contradictions inherent within Frei's attempt to...
...Senate, Foreign Relations Committee, Subcommittee on American Republics Affairs, Survey of the Alliance for Progress: The Latin American Military (Washington: Gov- ernment Printing Office, October, 1967...
...80 Punto Final, July 30, 1968 and August 27, 1968...
...As in all Latin countries, AID continues to work with the AFL-CIO in the battle against Communist and Social Christian trade unions...
...In fact, the electoral defeat of the Left in 1964 was due not only to the greatly superior financial resources of the PDC, the latter's support from the Chilean Right, and its blatant anti-communist campaign, 100 but also, by the admission of some leftist leaders, to their own failure to expand their base among marginal groups in the countryside and the urban slums, thus leaving a vacuum which was partially occu- pied by the PDC...
...71 More generally, it can be shown that foreign aid tends to stimulate (often unnecessary) consumption rather than internal savings and investment...
...see also Zeitlin...
...If not, why has it failed to live up to its promises...
...Once in power, Frei took certain steps to upgrade the masses: in addition to initiating the agrarian reform and extending social welfare, he expanded "promoci6n popular" or community organization for the urban slum-dwellers...
...Despite its calm exterior, Chile received more U.S...
...The Political Scene The preceding critique of the Frei government (see NACLA Newsletter, February, 1969) gives rise to certain basic questions of interpretation: Given the prp-ious development of Chile and certain uncontrollable circumstances since 1964, is it -; r to hold Frei responsible for the current difficulties in the Chilean economy...
...His attempt, for instance, to carry out a thorough agrarian reform without tax, banking, and other structural reforms, without a truly beneficial copper settlement, etc., reveal an insufficient understanding of the meaning and requirements of a structural transformation of the economy...
...83 Ibid...
...82 Revista ANEF (Agrupaci6n Nacional de Empleados Fis- cales), May-June, 1968, pp...
...To this end, the Communists have adopted the strategy of seeking alliances with the "progressive" elements of the bourgeoisie, and thus with any and all-8parties - - he left of Center -- including the formerly center-right Partido Radical and poss'i...
...Indeed, if there is no military operation there, why the secrecy...
...75 UNCTAD, Crecimiento, Financiaci6n del Desarrollo, Z Ayuda: Inform sobre Crditos Condicionados: Chile, December 8, 1967, cited in Keith Griffin's "An Analysis of the Copper Expansion Programme in Chile" (unpublished, 1968...
...As one Chilean economist has concluded: The problem is in taking advantage of the aid to get rid of the debt, and this means, among other things, the creation of resources to service and reduce the debt...
...On the surface it might have appeared at the outset that the Frei approach was not doomed to failure...
...There have, of course, been serious instances of political repression, such as the jailing of Socialist Senator Altamirano and the harsh military actions against demonstrating students and striking workers and peasants on several occasions...
...FOR COMPARISON: RESULTS OF 1965 PARLIAMENTARY ELECTION Partido Democrata Cristiano (PDC) 82 13 42.3% Partido Radical (PR) 20 10 13.3% Partido Nacional (PN) 9 7 12.5% Partido Comunista (PC) 18 6 12.4% Partido Socialista (PS) 15 7 - 10.3% Others 3 2 9.2%-10If the Left cannot pull itself together, and particularly if it does not find a new unifying le-der, popular disenchantment with t PDC may well swing not to the Left, but to the Ri?' If t; results of his month's parliamentary elections (see box) are any index of trend in Chilean electoral politics, the main beneficiary of popular disillusion with .,e Frei government and of the PDC's electoral decline is not the Left but the rightist Partido Nacional (which, from 1964-68 had been at an all-time low...
...1 , March 1969 Published monthly, except May-June and July-August, when it is published bi-monthly by the North American Congress on Latin America, Inc...
...Another contract between AID, IDF, and a Chilean popular education institute (which was eventually rejected by the Chileans) would have enable AID, through the IDF, to obtain detailed information (including political affiliations and ideology) abput participants in community organizations such as the "juntas de vecinos" (neighbors' organizations) ad the "centros de madres" (mothers' centers) as well as to train community leaders...
...Subscription price: $5 per year...
...The difficulty, which is much more apparent from the vantage point of hindsight than it was in November, 1964, was that rei either did not take seriously his own promises or did not understand their implications...
...His continuing dependence on the United States raises serious doubts about his comprehension of its effects on Chile...
...Nevertheless, the trade union movement, like the traditional leftist parties, will eventually have to deal with the question of whether basic structural changes can be effected merely through traditional legislation...
...To a considerable extent he limited his own perspectives by coming to rely upon a particular socio-economic group...
...Campaigns against the Left are waged on a more subtle level in Chile, through the mass media, almost all of which are controlled by the Establishment, and other propaganda channels, as in the 1964 election...
...88 Pike, p. 215...
...The tendency to surround himself with men whose orthodox onomic and social views inspire confidence in international financial circles and among Chilean businessmen was accentuated by Frei's February, 1968 cabinet reshuffle, which made his, as one publication called it, "a government fit for business...
...It is in the light of the possibilities open to him -- or which seemed open in 1964 -- and in the light of the great hopes aroused by his promises that the failures of the "Revolution in Liberty" become more serious...
...Unlike some European nations' programs, AID has refused to extend general "lines of credit" -- flexible loans, not tied to purchases in the creditor nation...
...According to one knowledgeable economist, there was initial pressure from the American Em- bassy upon Chile's Agricultural Development Institute (INDAP), the government agency for peasant organization, to turn over the entire peasant organizing and training program to IDF...
...This type of "aid" in the organization of peasants and the training of peasant leaders has been strongly opposed by Chilean officials who claim that it hinders their own organizational efforts by setting up parallel and competing structures, and that it could become the basis for a form of "yellow unionism" in the countryside...
...aid per capita than any other nation in the world except Vietnam...
...For a time the operation on the island was kept secret...
...The primary goals of the PC appear to be avoiding repression, remaining legal, and somehow attaining power...
...The Chilean Left is almost unique in Latin America, in that its major problem is to define a revolutionary path, while remaining legal and enjoying relative freedom of action...
...84 The American counterpart of the PN has also chimed in: on several occasions Rep...
...26-28...
...indeed the Frei experiment may turn out to have performed some useful historical functions...
...From an examination of official Chilean documents, it appears that loans contracted during Frei's first two years were not specifically oriented toward improving exports or reducing essential imports...
...95 Cited in Punto Final, November, 1966...
...72 Keith Griffin, "Foreign Aid: Motives and Consequences," to be published in Economic Development and Cultural Change...
...penetration in Chile, 78 the most salient may be mentioned...
...14 Project Themis Grants for 1969...
...Nevertheless, the basic situation of the lowest income groups has not been altered by the Frei policies, taken as a whole...
...83 perhaps Chile is becoming a testing ground for urban riot control innovations soon to be used in our own cities...
...Even if it was clearly beneficial, foreign aid would be an unstable source of financing basic development projects, since it is subject to the vicissitudes of political opinion in the Frei Vs...
...95 The irony is that, within the PDC itself, there exists a group of competent, dynamic men who take quite seriously the commitments made by their party to the Chilean people in 1964 and who could have become the backbone of the Frei government...
...78 For full details on foreign penetration, see Chile Invadido (Santiago, Editora Austral, 1968...
...The mass base which swept the PDC into power in 1964 was a heterogeneous coalition, including peasants (who were influenced by the Church and attracted by PDC promises of agrarian reform), the marginal city slum-dwellers, women, certain sectors of the middle-6class, and traditional elites independent enough to recognize that the only way to defeat Allende was by deserting their own rightist candidate for Frei...
...In ne.a final analysis, despite the failure of the Chilean Left either to take maximum advantage of its role as a legal opposition or to develop an alternative strategy for coming to power, its shortcomings are much less important or serious than those of the PDC, if only because the Left has had neither the power nor the responsibility to shape Chile's future...
...The notorious and ill-fated Project Camelot, far from being an isolated case, was only the grossest example of the uses of "scholarly" research as intelligence...
...Agarwala and S.P...
...If the right-wing gain comes to fruition in the 1970 Presidential election, it would reflect not so much a reaction against progress as the continuing personal popularity of the rightist leader, ex-President Jorge Alessandri (and middle-class dissatisfaction with inflation...
...5 on International Trade Union Policy...
...on the other end, foreign debt repayments tend to come out of investment rather than consumption funds...
...79 Details of the CIA operations in Chile were revealed by the former Bolivian Minister of the Interior, Antonio Arguedas, who had worked closely with the CIA but last summer spirited Che Guevara's diary to Fidel Castro...
...84 See, for example, speeches by Senator Pedro Ibaez, in the Chilean Senate, January 19, 1966, and January 17, 1967...
...In view of the AFL-CIO's aggressive campaign against Social Christian unions, the Frei government's cooperation with American labor and the retention of the pro-AIFLD Labor Minister, William Thayer, for more than three years, is surprising, to say the least...
...Ambassador Ralph Dungan...
...Te fact that the Frei government has relatively little blood on its hands and the existence of the forms of democracy, at least, have obviously made life easier for the Left...
...The negative verdict was delivered most succintly by a group of dissidents within Frei's own party: "We do not believe that the revolution has begun...
...Box 57, Cathedral Station, N.Y., N.Y...
...As the military explained it, even though the Chilean constitution prohibits foreign troops on Chilean soil unless a special law has been passed, no treaty was'necessary for the establishment of the military center on Pascua since it was being used solely for "meterological" studies...
...a fact which has been vigorously protested...
...Meterological Bases in Chile...
...92 See Frank, p. 116...
...One "rebelde" stated flatly that the Frei regime, like the Alliance for Progress, has made some reforms only in order to preserve intact the existing capitalist system, with all its vested interests and privileges for the few...
...for example, by the Chilean Engineers' Association...
...it was only after an Argentine magazine exposed it that the Chilean military commanders there permitted journalists to visit the base -- without cameras...
...91 Caught between pressures from the lower classes, especially organized labor, and their own interests, which have become identified with those of the traditional elites and foreign capital, the national industrial bourgeoisie has thrown away its historical opportunity to mobilize the nation for progressive development...
...The latter has been done primarily through a sub-contract to the International Development Foundation (IDF), formerly one of the renowned CIA-front foundations, whose financing has been taken on by AID since the public exposure of IDF as a CIA front in February, 1967...
...yet compliance with them has become the price not only for IMF stand-by loans, but also for most other foreign credits advanced by international aid organizations controlled by the United States and the wealthy industrialized nations...
...100 Federico Gil and Charles Parrish, "The Chilean Presidential Election of September 4, 1964" (Washington, D.C.: Institute for the Comparative Study of Political Systems, 1965...
...If foreign aid were to be a liberating factor in the Chilean economy, it would have to be oriented principally toward increasing productivity in exports, so that future foreign exchange earnings are not consumed by debt service payments and the aid cycle does not repeat itself indefinitely...
...In addition to the usual American university and foundation studies, there are reports of another exhaustive study of "attitudes toward change" in the potentially explosive "poblaciones" or urban slums, carried out by a Cuban-American -- a study which, to some Chileans at least, appears to have more value for the American Embassy than for Chileans...
...we may safely conclude that he has flubbed it...
...at 160 Claremont Avenue, New York, N.Y...
...clearly, as one Chilean economist pointed out, it is risky to entrust the fortunes of basic programs to foreign assistance which, if suddenly cut off, could aggravate a serious depression...
...82 Indeed their newest acquisitions from the United States -- laxative, nauseant, and laughing gases -- have not even been used here yet...
...In fact, those policies have responded much less to the needs of the disadvantaged than to the interests of the privileged entrepreneurial or industrial bourgeoisie...
...And why the frequent visits of U.S.A.F...
...4creditor nations...
...98 UN-FAO, Comit& Interamericano de Desarrollo Agricola, Chile: Tenencia de la Tierra y Desarrollo Socio-Econ6mico del Sector Agrfcola (UN-FAO, 1966), p. 34...
...On the basis of an American feasibility study, which greatly overestimated the potential for fishing industries in the north, and against UN advice, the Chilean government went ahead with the project -- with disastrous results both politically and financially to Chile (an estimated $60 million loss), but with substantial gains for the American shipbuilding company...
...Source: Chilean newspapers...
...Far from resolving Chile's problems, however, the election of Alessandri, or of someone like InterAmer;-an Bank director Felipe Herrera, would only deepen the current crisis and aggravate the pressures for a genuine transformation of Chilean society, whether peaceful or violent...
...It is conceivable that the new Administration in Washington, less inclined than its predecessor to "coddle" the underdeveloped nations, will seek less expensive means of keeping Chile in line...
...The Chilean Air Force commander insisted that the base is used exclusively for nonmilitary purposes...
...It is by no means clear that they will be able to resurrect their alliance for the 1970 Presidential election...
...It is not correct to tell them, on the one hand, that universal suffrage will get them nowhere...
...Frei himself wrote in a Foreign Affairs article a few years age, "The problem is that what was fundamental to the Alliance for Progress -- a revolutionary approach to the need for reform -- has not been achieved...
...but they have also given rise to certain illusions in the Left and complicated its task...
...Although space is lacking here to discuss in detail the infinitely varied forms of U.S...
...86 the same may be said of his own efforts in Chile...
...Source: PDC Resolution of August, 1966...
...particularly after the 1969-70 elections, however, it is quite possible that the de facto existence of at least two parties within the PDC will be formalized...
...90 Andre Gunder Frank, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil (New York: Monthly Review Press, 1967) 91 This and other examples are cited by Robinson Rojas, "La Penetracion Norteamericana en Chile," Causa MarxistaLeninista, May-June, 1968...
...All Deputies were up for reelection...
...Why the Pentagon personnel...
...While shunning overtly insurrectionary activity, the Chilean Left has failed to develop an alternative appropriate to Chile...
...1 Nixon's Latin American Team...
...75 Moreover, AID loans are sometimes "tied" also to the granting of lucrative contracts to American companies for construction, etc...
...By arousing expectations which could not be fulfilled by its own policies, the Frei government has helped create at least the subjective conditions for a more thoroughgoing change...
...Even if the AID purse-strings are tightened in the near future, it will not be difficult for Washington to keep the Chilean situation under control...
...92 Yet it is upon this very class that Frei has relied most heavily and whose interests are reflected in his over-all policies...
...73 Lucio O. Geller, "La Ayuda Extranjera: El Caso Chi- leno," Desarrollo Economico, January-March, 1967, p. 634...
...Another significant condition of aid has been the insistence on the part of the donor that Chile comply with International Monetary Fund (IMF) recommendations for stabilization (e.g., substantial budget cuts, hence reduction in public investment, restrictions on credit in the public and private sectors, stricter wage controls, etc...
...96 Thus far the PDC has managed to paper over its differences and enough concessions have been made to keep the "rebeldes" in the party...
...Even if they do not choose to leave, the choice may be made for them by "oficialista" party leaders, one of whom referred to dangerous "collectivist, authoritarian" (Marxist) tendencies among the rebels...
...the PDC on American Labor in Chile In August, 1966, the PDC National Congress passed the following resolution: "Incompatibility [exists] between being a militant and leader of the Party and of ORIT [the AFL-CIO-financed and dominated regional labor network] and the following organisms: AIFLD, International Trades Secretariats, and all of the front organizations which offer scholarships....Militants [of the PDC] found to be exercising positions in the leader- ship of the...ORIT must turn in their public resignations from these positions...
...72 T h e N A C L A , N E W S L E T T E R i s p u b li tI m e aIer b h N r h A e i a The NACLA NEWSLETTER s published ten times a year by the North American Congress on Latin America...
...As one PDC Congressman said in criticizing the government,-7"We have a historical responsibility and we have done very little for that 85 percent of the Chilean population which voted for a Revolution, while we are making continual concessions to an oligarchy and a bureaucratic minority of 15 percent...
...Frustrated in their attempts to steer the government toward "non-capitalist" development policies and toward an alliance with other "popular" (leftist) parties, some of the "rebeldes" have come to regard the government as little more than a vehicle used by the industrialists to maintain their power...
...11 Che's Assassins Revealed...
...99 Indeed, the Chilean Left has become so absorbed in its daily duties as a parliamentary opposition, securing legislation beneficial to its supporters, as to have neglected its long-range tasks...
...among other things, he recounted how he had been interned, questioned and held incommunicado by the CIA and the Chilean secret police during his initial stay in Chile last summer after fleeing from Bolivia...
...Ffsme sectc -s of the -DC...
...Theirs has become a "flexible" communism, tailored, in the words of a top PC leader, to "what is possible" -- as indicated by the rather surprising statement that they would not oppose American aid or even investment if made on terms favorable to Chile, by their unqualified condemnation of leftists following an insurrectionary line as "dangerous" (because they might "provoke a new repression" against the Left), and by their moderate criticisms of PDC policies...
...Moreover, AID program loans have been granted on the condition that AID personnel be given access to (hence considerable influence over) all government economic documents, including future projects and policies...
...74 Oscar Munoz Goma, Los Efectos Econ6micos de los Pris- tamos Externos: El Caso Chileno (Santiago: Instituto de conomia, Universidad de Chile, 1963), p. 55...
...Singh (eds...
...First, it is a well-known fact that 95 percent of all American aid comes "tied" to purchases of American goods and services, even when they would be far cheaper elsewhere...
...Since about 15 percent of Frei's development program was financed by foreign aid in 1965, 1966 and 1967, 70 it is important to see whether the benefits of this aid have been sufficient to counteract the price which Chile must pay at present and in the future...
...and these militants must commit themselves officially and publicly to fight for the disaffiliation of their organizations from these Secretariats and to struggle for the establishment of Latin American organisms with revo- lutionary and integrationist purposes...
...The Socialists, in particular, are so badly divided over questions of personal power, tactics, and longer range goals that one branch broke off to form the Partido Socialista Popular...
...To cite only one example: under the influence of an American shipbuilding firm, the Marine Design and Construction Company of Seattle, AID convinced the Chilean government to make a sizeable investment in the fishing industry in northern Chile...
...While acknowledging that the Marxist Left can never come to power through electoral politics, the Socialists continue the pursuit of power through the ballot box...
...In fact, it was not until February, 1968 -- a full one and one-half years after that resolution was passed -- that William Thayer, who had previously been on the Board of Directors of the AIFLD, was ousted from his post as Minister of Labor of the Frei government...
...Air Force Base...
...Lacking full control over national resources and being subject to private interest pressures which prevent such control, the Frei regime has been forced to rely heavily upon foreign financing...
...In addition to being conditioned upon certain anti-inflationary economic policies, aid has also been used for blatantly political purposes...
...The predominant influence of the entrepreneurial bourgeoisie, both directly and indirectly [through control over state agencies such as the Corporacion de Fomento de la Produccion (CORFO) and the Banco Central] in shaping policy has incapacitated the Frei government for confronting established interests and hence for making the comprehensive structural reforms initially promised...
...The Socialists have been much less willing than the Communists to support government proposals in Congress and to seek alliances with centrist, middle-class based parties such as the PDC and the opportunistic Partido Radical...
...Certainly, however, this government has not fulfilled its stated objective of laying the material foundations for a real, though peaceful, revolution in Chile...
...in- terview with Arguedas, La Presencia (La Paz, Bolivia), August 18, 1968...
...10027...
...81 Through a series of military assistance pacts, 15,000 Chilean military officers have received extensive training...
...89 Generally they have not been the dynamic motor force of development envisioned by the publicists of the "national bourgeoisie...
...One leading PDC "rebelde" dismissed the Communists as "bland and inoffensive...
...97 Punto Final, December 3, 1968...
...their existence ard infiuencz depend' on the maintenance of this system...
...73 and projections for the future show a continuation of this trend...
...all other transactions for buying dollars to send abroad are illegal and therefore must be carried out in the black market...
...Obstacles to Change in Latin America (N.Y.: Oxford University Press, 1965), pp...
...The "grupo mvil" of Chile's Carabineros, the crack police force which has been used to suppress a number of strikes and demonstrations during the Frei regime, is being trained in the newest techniques of urgan intelligence and riot control...
...94 Even in the one area originally thought to be the preserve of more leftist PDC technocrats, agrarian reform, pressure from the "oficialista" branch of the party and big landowners forced the resignation of Jacques Chonchol, the radical vice-president of INDAP...
...In the case of Chile, it can be said that...the country has not created greater sources of foreign exchange in proportion to the foreign [aid] capital which has entered the country, and the servicing of which has come to constitute an important part of annual expenses in foreign exchange...
...For one thing, Socialist leaders who dedicate their time and energy to their everyday parliamentary duties -- passing legislation, doing favors for constituents, being reelected periodically -- have little time left for exploring alternative strategies nor the motivation for doing so...
...136-7...
...Perhaps this should come as no surprise, given their concrete commercial and financial links with foreign capital -- e.g., the very powerful Edwards family's joint ventures with such powerful American clans as the Rockefellers...
...that power can only be gained through armed confrontation...
...77 Munoz, p. 49...
...1 P.O...
...76 "Cartas de Intenci6n con el Fondo Monetario Interna- cional," 1966 and 1968, reprinted in Banco Central, goletin, Matrch, 1966, and January-February, 1968...
...Since this group has proved so important to the Frei regime, a few words should be said about it...
...Minimum contribution for 1-yr...
...Even where aid is not explicitly conditioned upon contracts to American companies, it has been used for the benefits of of the latter...
...Moreover, relations between the Socialists and the Communists have deteriorated to the point that each party is publicly criticizing the basic philosophy and strategy of the other...
...Maurice Zeitlin, "The Social Determinants of Political Democracy in Chile," Revista Latinoamericana de Sociologfa, July, 1966, reprinted in James Petras and Maurice Zeitlin (eds...
...Moreover, as the independent leftist magazine Punto Final pointed out in a recent critique: One cannot speak to the people in two different languages...
...The fusion of the new industrialists with the older elites has led, on the one hand, to relative political stability...
...They voted, for example, with the PDC to secure final passage of the controversial wage bill of May, 1968...
...79 Punto Final, October 8, 1968...
...99 Sunkel, p. 132...
...Within the existing political framework, their stated objective is to accentuate class differences and classbased confrontations, as evidenced by their support of recent peasant uprisings, etc...
...also Paul Baran, "On the Political Economy of Backwardness," The Manchester School, January, 1952, reprinted in A.N...
...16 NACLA NEWSLETTER NORTH AMERICAN CONGRESS ON LATIN AMERICA (NACLA) Vol...
...As a result of this resolution, a number of Chilean union directors resigned from the PDC...
...One American official in Chile remarked with a straight face that there was nothing wrong with Camelot other than the fact that it was discovered and made public...
...assistance...
...15 New From NACLA: "The University-Military Complex...
...Was his reformist approach of attempting changes within the existing system doomed at the outset...
...A recent United Nations Conference on Trade and Development (UNCTAD) study suggests that tied aid in Chile has raised costs by at least 12.5 percent above what they need have been...
...This rather expensive operation ($1.5 million up to 1968) has paid off poorly in Chile, largely because its philosophy of non-ideological, strictly bread-and-butter unionism and of cooperation with business has little appeal to organized labor in Chile...
...Clearly, Frei cannot be blamed fr the fact that previous governments had followed policies which made his own task more difficult and reinforced the barriers to development...
...89 Official figures on the flight of capital are not available, as the sale of dollars is permitted only to certain importers...
...In the summer of 1968, for example, the newly elected president of the PDC youth was disciplined and nearly expelled from the party for his "extremist" views and criticisms of the government...
...military aid cumulatively during the period from 1953 to 1966 than any other Latin American nation except Brazil (including countries with overt guerrilla movements, such as Peru and Colombia...
...nor can he be held responsible for uncontrollable circumstances, such as a severe two-year drought which is wreaking havoc with the Chilean economy, especially in agriculture...
...Latin America: Reform or Revolution...
...earlier last year, the president of the party accused the youth of teaching guerrilla tactics at their summer camp...
...76 While providing the most obvious mechanisms for inflation control, these and other IMF policies are often incompatible with growth and redistribution objectives...
...Of equal importance are the complex ties between the Chilean industrialists and foreign capital, and the dependence of the former upon the latter...
...Internationally, the Frei regime appears willing to tow the line for Washington in all matters short of outright military intervention (e.g., the Dominican Republic invasion of 1965, which Chile strongly condemned, and the projected Inter-American Peacekeeping Force...
...For one thing, Frei will be judged to have done more for the Chilean people than his predecessors...
...87 See: Osvaldo Sunkel, "Change and Frustration in Chile," in Claudio Veliz' (ed...
...III, No...
...Foreign "Aid" and Foreign Penetration: Keeping Chile in Line In the first part of this article (NACLA Newsletter, February, 1969), we have seen the contradictions inherent within Frei's attempt to finance his development program through domestic resources within the existing neo-capitalist framework, and without making the most basic structural changes...
...86 Eduardo Frei, "The Alliance that Lost its Way," Foreign Affairs Quarterly, April, 1967...
...Falling back upon their role as gadflies within the party, the PDC "rebeldes" have criticized the government as harshly as any leftist politician...
...Although rationalized as merely a strategy for steeri!-, e Chilean government , a more progressive direction, this collaborationist, coalitua-orienr.ed mentality has Ild he effect of modifying the Communists' substantive pos'-.ions...
...80 Other CIA operations had been previously exposed, such as its financing of a Chilean Christian Democratic student group, and of IDF and various AFL-CIO-affiliated labor unions in Chile...
...Aid has also been used for political purposes at the grass roots level: interestingly, AID has not been involved in the redistribution process of the agrarian reform, channeled through the Corporaci6n de la Reforma Agraria (CORA), but has taken considerable interest in the NACLA NEWSLETTER Vol III, No...
...More serious, they have managed to convince themselves that, since they represent the aspirations of the PDC popular base (which is true), they will be able to take over the party and force out the centrist-rightist forces (which is highly dubious...
...Note: Percent of abstention and blank votes: 29.5 percent...
...Moreover, as one Chilean politician put it, "Every reform -- no matter how insignificant in itself -- "multiplies the need for many others...
...85 Rep...
...88 Certainly the industrialists have not made the contribution to internal savings and investment which might have been expected: subjectively "threatened" by inflation and certain social reforms, seeing little prospect for immediate profit returns, they have not taken the lead in long-range productive investment, and many invest their capital abroad...
...74 No less significant as a cost of aid, at least from the United States, are the many explicit and tacit conditions which accompany Agency for International Development (AID) loans...
...In general, this workers' "aristocracy" has lacked any serious sense of responsibility to unorganized labor and peasants...
...93 Punto Final, November 7, 1967...
...James Petras...
...Whatever may have been the historical "defects" of the Chilean socio-economic structure, Frei had a lot going for him initially: in addition to the rising price of copper, he came to power with an impressive popular mandate and with full moral and material support from the United States which left considerable room for maneuver -- particularly since the only alternative to Frei in 1964 was the Socialist-Communist candidate...
...With independent allies like Frei in Chile, Washington needs no "puppets...
...on the other hand, this fusion, in conjunction with the use of state enterprises for their private interests, has contributed to "economic and social stagnation" in Chile...
...History may be kinder to the "Revolution in Liberty" than contemporary observers...
...and, at the same time, to induce them to vote, to trust in electoral!results, in the efforts of the parliamentarians, in their speeches to Congress, in the legal initiatives or amendments which they propose...
...94 Latin American Newsletter, February 22, 1968...
...Their indictments of Frei and the PDC "oficialistas" are indeed eloquent...
...Perhaps the first to leave will not be the Congressional "rebelde" leaders, but the PDC youth leaders, who have been at the forefront of the rebellion within the party...
...Greenwich, Conn.: Fawcett, 1968...
...Otto Passman (Democrat, Louisiana) has charged that AID funds are being used to further the political campaigns of the Christian Democrats for the 1969-70 elections...
...and in May23, 1968 hearings of the House Subcommittee on Foreign Aid, quoted in Ultima Hora, August 16, 1968...
...Faced with such serious divisions, the PDC can take solace only in the equally serious crisis over unity and future direction within the traditional Chilean Left -- the Partido Comunista (PC) and the Partido Socialista (PS...
...Although some have indicated that their patience has limits, they are as yet unwilling to make the break...
...13 "You Can't Feed People With Reports" -- Agribusiness Moves into the FAO...
...special counterinsurgency training has been given to the "Black Berets," the Chilean version of the Special Forces...
...93 Almost without exception, Frei's cabinet ministers and close advisers have come from the right wing of the PDC and from conservative groups outside the PDC...
...MARCH 2, 1969 PARLIAMENTARY ELECTION RESULTS # of Deputies # of Senators # of Senators % of vote (total) elected Mar 2* Partido Democrata Cristiano (PDC) 55 23 13 31.1% Partido Radical (PR) 24 9 5 13.4% Partido Nacional (PN) 34 5 5 20.9% Partido Comunista (PC) 22 6 4 16.6% Partido Socialista (PS) 15 5 3 12.8% Others 0 2 2 5.2% *Not all Senators were up for reelection...
...thus internal savings may actually be decreased through foreign aid...
...planes based in Panama...
...thus far, however, their eloquence has not been matched by action...
...Despite their vigorous written and oral denunciations of the government within party circles, they have maintained party discipline in Congress -- even when this meant supporting the copper deal or the anti-labor wage bill...
...Historically, as its economic and social status improved, the entrepreneurial middle class has adopted the values of the traditional upper class...
...The Economics of Underdevelopment (New York: Galaxy, 1963, p. 80...
...The governor of the island, on the other hand, deplored the"penetration by] foreign elements...against the national [Chilean] interests...
...87 indeed, it is a tribute to the genius of the traditional elites that they have been able to assimilate these middle sectors, so that the rise of the latter posed no practical threat to their position...
...96 Diario Ilustrado, July 25, 1968...
...but that is not saying much...
...Instead, as one analyst suggests, the leftist parties and unions have been "increasingly incorporated into the political establishment and-9...
...If the PC has become, in the words of one Chilean journalist, "as respectable as the Catholic Church," the Partido Socialista is the Hamlet of Chilean politics, torn between its actual role as a parliamentary opposition and its theoretical insurrectionism...
...On the other hand, he cannot be given credit for the rise in demand aa prices for Chile's main export...
...As one Chilean financier put it, "The Left wins the Presidential elections, but the Right wins the governments...
...The Frei government whose party had passed this strong resolution, however, took no steps to curtail the activities of ORIT or AIFLD, in Chile...
...Of course, these non-revolutionary bread-and-butter issues can serve, as in the past, as a vehicle for organizing and mobilizing lower class groups: the fact that recent violent strikes were designed to pressure the government into readjusting wages at a par with the increasing cost of living, rather than to establish a dictatorship of the proletariat, for example, does not diminish the importance of those strikes...
...Despite campaign promises to seek improved relations with Cuba, diplomatic relations have not been renewed...
...90 In addition to their objective dependence, Chilean industrialists expressed in interviews their firm subjective identification with foreign investors, whom they saw not as threatening their own investments (despite preferential treatment for foreigners), but as somehow strengthening their own interests...
...but serious as they may be, these are incidents, rather than part of a regular pattern of continual, daily repression against the Left, as in other Latin nations...
...As has been shown by Andre Gunder Frank, the so-called national bourgeoisie in Chile has become increasingly dependent on the international capitalist "metropolis" for financing, marketing, and all other aspects of industrial production...
...85 Frei's toleration of American intervention must be indeed serious when Washington's conservatives are self-acknowledged friends in Chile feel compelled to denounce it (although their own preferences would be simply for differently-oriented U.S...
...mili- tants found to be exercising positions of direction or participating in any way in the activities of the AIFLD must resign under the same conditions...[similarly for those affiliated to any of the ORIT Professional Secretariats] so that the Party will not appear even officiously compromised with ORIT...
...The Island of Pascua, off the Chilean coast, has become the site of a U.S...
...77 To be specific, Chile has been receiving more U.S...
...81 U.S...
...subscription: $5 In This Issue: "Stagnation in Liberty" -- The Frei Program in Chile, Part II...
...That very small segment of the Chilean working class which is organized (less than 15 percent of urban and .6 percent of agricultural workers) 98 has oriented its activities around "revindicalista" demands -- that is, demands for specific breadand-butter benefits for themselves...
...Frei has been given his opportunity to demonstrate the viability of the peaceful, reformist model of development for Chile and for all Latin America...
...AID officials in Chile admitted freely that, being a branch of the State Department, AID must stay in line with and reinforce official American policy...
...APPLICATION TO MAIL AT SECOND CLASS POSTAGE IS PENDING AT NEW YORK, N.Y.-3organization of peasant unions...
...9 7 A similar dilemma has arisen, although on a much less conscious level, with respect to the Chilean labor unions...
...Sources: Chile Invadido (for full reference, see footnote section at end of this article) and Punto Final, November 19, 1968.-5American manipulation of Chilean domestic politics has been denounced not only by the Left but also by the "momios" (mummies) of the extreme rightist Partido Nacional (PN), whose favorite target was former U.S...
...Moreover, like the PDC, the Left is increasingly unable to satisfy the demands of its youth, with the result that some have formed separate rev- olutionary groups...
...Otto Passman in House debate, July 22, 1968, quoted in Diario Ilustrado, July 23, 1968...
...particularly if one assumed that he took seriously his own campaign rhetoric, there was no inherent reason why the necessary structural transformations could not have been made by a government of the Christian Democratic Left...
...Frederick Pike, "Aspects of Class Relations in Chile, 1850-1960," Hispanic-American Historical Review, February, 1963...
...Thus, for example, special pains were taken and loans granted in the "right places" to create the most favorable climate for the Partido Dem6crata Cristiano (PDC) victory in the 1964 Presidential election...
...FOOTNOTES 70 James Petras, Politics and Social Forces in Chilean Development (University of California Press, 1969), p. 107 71 CORFO, Estudio Sobre La Deuda Externa e Intern de Chile en Moneda Extranjera (through December, 1966) (Santiago: CORFO, 1967...
...Like the PDC, the Chilean Left is undergoing a serious crisis of internal unity...
...10025 March, 1969 NEEI IENEWI 2 While the benefits from foreign aid are dubious, at best, the costs are clearly high: interest and other payments related to servicing the foreign debt have already increased as a percent of the total value of Chilean exports, from 10 percent in 1955 to 40 percent in 1963...
...The politi- cal influence of some of there elderss and their respective bureaucracies would probably vanish if these parties ar" aa unions were to be turned into real popular mass movements...
...Imagine a Chilean copper miner "open-minded" enough to work with American labor's AIFLD, whose board of directors has included Charles Brinckerhoff, President of Anaconda Copper...
...Theoretically their position is perfectly tenable, but in practice there are serious contradictions between parliamentary behavior and a revolutionary line: the very process of seeking votes has forced the Socialists to reject, for all practical purposes, their own doctrine and interpretation of the Chilean situation...
...Several "rebelde" leaders admit that they are ideologically far closer to the Marxists than to the "oficialistas" running their own party...
...after all, the 100 or so Americans on the base are all dressed in civilian clothing...
...Why was Fel unable to make the most of the possibilities open to him...
Vol. 3 • March 1969 • No. 1
