Perspectives: Alternatives and Alliances
The Junta's ideologues have long maintained that the failure of all civilian forces prior to 1973 was so fundamental, that any resolution of the crisis would entail a profound reorganization of...
...Over the past three years, capital has become increasingly centralized into fewer and fewer hands, bringing on the destruction of many small and medium capitalists, as well as the impoverishment of many sectors of the petty bourgeoisie...
...In short, the Junta has radically reorganized the pattern of income distribution in the country...
...His chances of seeing this dream come true will be determined by many factors, among them the strength of the Chilean working class, the continued support of the United States, internal and external economic conditions and the effectiveness of other bourgeois alternatives...
...6. Peter Winn, "The Economic Consequences of the Chilean Counter Revolution: An Interim Assessment," Latin American Perspectives Vol...
...2076 (May 28-June 3, 1975), 8-12...
...B Whether Saenz is speaking of changing the Junta or changing the Junta's policies, what we can expect of the Saenz alternative is the same old, if slightly less bitter, wine in new bottles...
...16 (June 21, 1976)30 ment, both domestic and foreign...
...It is also difficult to imagine an economic upsurge fueled by internal factors, such as a significant reduction in the rate of inflation, particularly if the Junta's economists insist on their current anti-inflationary policies...
...247 (December 15-January 1, 1976), 17...
...PERSPECTIVES 1. An interesting reflection of this can be found in the editorial of Que Pasa?, No...
...On the other hand, it is dangerous to exaggerate the possibilities for a return to democratic rule in any country of the Southern Cone today...
...Frei flatters the Armed Forces and urges their participation in building democracy:* In the course of our history the Armed Forces have only rarely intervened [in politics], and when they have, they never stood in the way of a rapid return to democracy...
...According to one of the PC's leaders, "the [only] problem is that the dictatorship falls, not who replaces it...
...9 To many sectors of the Chilean population, Frei's promises and arguments are convincing...
...Ibid., 41...
...No one could believe that the government that represents the only alternative for Chile at this time will continue to jeopardize its prestige by maintaining policies proven insufficient...
...Finally, the Junta has been able to reverse the trend which sought to regulate foreign investment in Chile in the pre1973 period...
...He served as the top economic advisor to the Foreign Ministry...
...First praising the Junta and then growing progressively more silent as it became clear that he would not be asked to take over the reigns of government, Frei finally moved into open opposition to the Junta in May 1975.* In his writings of the 1960's, Frei promised to carve out a new road for Latin America, that was neither capitalist nor communist but one of sweeping social reform...
...On this basis, Chile almost doubled its non-traditional exports between 1974 and 1975, the latter a year of severe recession...
...To the extent that he sees the Junta as posing a threat to capitalist expansion in Chileeither by heightening class tensions or by isolating Chile from needed sources of foreign aid and investment-Saenz will oppose the Junta: "The present military regime is the only alternative for Chile at the present time," he affirms, but adds "it is the social and political cost of the present economic policy that worries us and we who sincerely hope for the success of the military government want to minimize that cost...
...Saenz demands government subsidies and spending to encourage internal demand and soften the effects of inflation, credits and tax breaks for small and medium capitalists, and a share in the export market...
...Our purpose here is not to detail Frei's lengthy history-although some aspects cannot be overlooked-or to discuss internal divisions within his Christian Democratic Party, although neither can we forget that such divisions exist...
...We will begin by suggesting some of the inconsistencies inherent in Frei's own proposals...
...However, any projections as to the stability of the Junta itself as it is presently composed -are far more tenuous...
...26 As we have argued from the first article, the Junta's ability to create favorable investment conditions in Chile hinged upon its ability to raise the rate of exploitation of labor...
...This internal market has been virtually abandoned, and these industries are now entirely dependent upon a fluctuating international market...
...The alternatives then become not those of supporting or not supporting Frei in his efforts to re-establish "democracy" in Chile...
...and 3) The periodic devaluations of the peso, and the Junta's discriminatory credit policies, have favoured exports to the detriment of production for the internal market...
...We cannot deny these men our respect and understanding if they are really willing to recognize by their actions the values of democracy and liberty by opposing any totalitarian attempts...
...Saenz sees the military being misled by its current eco- nomic advisors, calling them a "few civilians who continually preach the most narrow intolerance and the most extreme isolation to the military...
...As head of Chile's manufacturers association (SOFOFA) and clandestine member of the fascistic Patria y Libertad paramilitary organization, 37 year-old Saenz led and coordinated the campaign to oust Allende...
...1, No...
...One essential task faced the Junta following the 1973 coup: the reactivation of the process of capital accumulation in Chile...
...Economically, they envision a government more attentive to the needs of non-monopoly sectors of the bourgeoisie producing for the internal market...
...History has recognized as positive those military interventions which were intended to create in their countries a higher form of society founded on law and the sovereignty of the people...
...2. See Alvaro Alsogaray, "La democracia de masas y la crisis en paises del mundo libre," Portada (Santiago), No...
...8. Ercilla No...
...Furthermore, they were always a powerful support for the constitutional system...
...Frei, like Saenz was instrumental in the destruction of the Popular Unity government...
...EDUARDO FREI: CAN AN OLD DOG LEARN NEW TRICKS...
...In his latest book entitled The Mandate of History and the Demands of the Future, Frei once again views himself as a man caught between two extremes, communism and military dictator*Frei's vehicle for criticising the Junta was the newsweekly, Ercilla, one of the Christian Democrats major media outlets...
...For Saenz, the Junta is too repressive, too discriminatory, too restrictive and too tightly linked to the monopoly capitalists producing for the export market...
...There will be no possibility of liberty unless there is an agreement between the UP and the Chilean PDC...
...52 (June-July 1976), 31-39...
...Clearly, this would not imply an economic renaissance for small and medium capitalists as a whole...
...The possibility of a rise in the world price of copper cannot be discounted...
...The workers of Chile have already had enough experiences showing that when the Frei's and the Aylwin's adopt populist and demogogic positions, it is not to help the popular sectors, but to divide and use them...
...We must address the industrialist," he admonishes, "We must tell him he is not condemned to disappear, that he has a future, a destiny, that the progress of modern society is based on a harmonious, clear and respectful alliance among national industrialists, workers and the State...
...He was rewarded for his efforts shortly after the coup when he became one of the few civilians taken in by the Junta...
...s The tone is conciliatory, even magnanimous...
...As we will see below, Orlando Saenz, a prominent Chilean industrialist, exemplifies this brand of bourgeois opposition to the Junta.28 A second option has been promoted most actively by Eduardo Frei and sectors of the Christian Democratic Party...
...By this we do not mean to imply that any bourgeois regime which could replace the Junta would adopt its exact tactics and methods...
...Or the PDC harrassing the UP...
...Saenz, the crusader, carries his message to industrialists just as he carried the "mystique" of struggle to the bourgeoisie in his battle against the Popular Unity...
...With all bourgeois parties currently in crisis (and outlawed by the Junta), Frei must rely heavily on personal charisma and his fame as former president of Chile to build support from broad sectors of the population...
...2 (Summer 1974), 104-5...
...5. For more on this point see Hollis B. Chenery, "La division internacional de la fuerza de trabajo: el ejemplo de la industria," El Trimestre Economico No...
...The other position, exemplified by the Movement of the Revolutionary Left (MIR), favors an alliance with democratic and progressive sectors within the PDC, but not with Frei and the reactionary bourgeois sector...
...Frei nominates himself as the man capable of preserving capitalism in Chile by democratic means, as the man capable of keeping the calm without the repressive tools of authoritarian rule...
...He would have to maintain the conditions that today permit the super-exploitation of labor in Chile, in order to assure a favorable climate for invest*Patricio Aylwin, president of the Christian Democratic Party, recent- ly went one step further than Frei by stating that "in my country one cannot think of not recognizing the phenomenon of the armed forces...
...He also bids for the support of members of the old UP parties, arguing that "in Chile there is a large social force which was deceived...
...The Communist Party (PC) of Chile, for example, has been the most forceful in arguing the need for an alliance with the whole Christian Democratic Party, including Frei...
...These measures could, if successful, spur greater activity in the internal market and produce an economic upturn which would greatly benefit the isolated Junta...
...In fact, it is just the "violence" of the Left that Frei assails and there is little doubt that once in power, he would continue the Junta's policies of attacking organizations of the underground resistance and repressing all forces who propose a working class alternative to bourgeois rule...
...Thus, the reemergence of an active internal market would tend to benefit certain smaller capitals, but they would not constitute an anti-monopoly sector in the political sense...
...1 They discuss the incompatibility of a "free market system" and "mass democracy, " and see authoritarian rule not as a temporary measure but as a permanent means to maintain bourgeois order...
...He sees a return to parliamentary democracy as a feasible alternative, and sees himself as chosen for the task...
...One cannot overlook the potential importance of Orlando Saenz, but when people talk of short-run changes in the Chilean government, one name always appears: Eduardo Frei, the grand old man of political conspiracies who has been waiting in the wings, biding his time since September 1970...
...Rather we propose to paint with a broad brush, the general lines of the Frei alternative and note its significance within the context of the main theme of this Report: the crisis of capitalism in Chile...
...etc...
...They hold out the promise of a not-too-distant end to brutality and torture in Chile that has already cost the lives of thousands...
...We can, however, provide an outline of the major issues and major positions involved in this debate, and suggest supplementary materials for further study...
...267 (June 3, 1976), 5, entitled "Lo que por callado se olvida...
...But his middle ground in 1976 lies squarely within the orbit of capitalism...
...2 In other words, authoritarian rule becomes the norm, not a short-term corrective...
...Some sectors of the bourgeoisie envision a modified version of the Junta, or a mixed civilian-military government, that would be dominated by a more moderate tendency than that represented by the maniacal Pinochet...
...Rather, the task is to determine whether the present level of class contradictions in Chile today, and in the Southern Cone as a whole, has made bourgeois democracy a thing of the past, and whether the choice today is between one or another form of dictatorship or the establishment of a socialist society...
...o And the Communist Party looks ahead to a necessary period of collaboration between the PDC and the UP when either one returns to the government: "Could you imagine the PDC governing by itself while the UP was organizing stoppages and strikes...
...Here again, it is important to note that the Junta did not adopt Milton Friedman's orthodox monetary policies because it was satisfied intellectually that they would work...
...6 Eduardo Frei's own history of support for the 1973 coup in Chile, his silence until 1975, is clear enough to demon- strate that he does not object to "violence" on pacifist grounds...
...Ibid., 59...
...Cambio (Madrid), No...
...Saenz manages the Concepcion firm Maestranza Cerrillos, an important metallurgical factory, and before the coup served as head of the Association of Metallurgical Industries (ASIMET...
...It has driven down real wages, slashed consumption, regressively redistributed income, expanded'unemployment and intensified work...
...He favors a corporativist approach which, in his vision, could expand the social base of support of an authoritarian government...
...Public opinion is not divided between communists and anti-communists...
...The origin of Saenz's opposition to this policy is clear: he is one of the foremost industrialists producing for the internal market...
...It has been able to dramatically increase its quota of such non-traditional exports for three fundamental reasons: 1) The relatively low cost of labor in Chile, due to political and economic repression of the working class, has made Chilean products highly competitive on the world market...
...There is a third alternative which is sought after and desired by the majority of Chileans: the reconstruction of democracy, the longing of a broad consensus [of forces to reconstruct democracy and terminate the military dictatorship...
...The question arises, then, whether the Junta, in order to protect the entire process of capitalist reproduction, will change its anti-inflationary policies even if this may damage the interests of some monopoly sectors...
...I 2 The issue of alliance in general and this concrete example in particular are complex and serious, and we will not presume to provide answers to these questions here...
...Frei, El mandato, 57...
...THE BOURGEOIS ALTERNATIVES As uncertainty clouds the Junta's economic and political future, talk naturally turns to the possible alternatives to the current regime...
...Non-traditional exports may prove a bright spot in an otherwise bleak picture, but the exclusively export-oriented growth strategy designed by the Junta seems destined to fail in the long-run...
...7. Que Pasa?, No...
...There, too, however, he was blocked by the Junta and deprived of his position...
...Speculation currently centers on several options...
...He also extends an appeal to past and present enemies on both sides of the political spectrum...
...Saenz may offer a ray of sunshine to some sectors of capital, but he has nothing but dark clouds for the working class...
...And, given the relative weakness of working class forces at the present time, the immediate alternative under consideration is a bourgeois alternative...
...For according to this view, authoritarianism has become a necessary part of Chilean life, necessary to permanently prohibit the working class from regaining its combativity...
...His final act as president of the Chilean Senate, declaring the "unconstitutionality" of Allende's administration three days before the coup, provided the final rationale for military intervention...
...The Junta has also been successful in achieving its second objective-that of restructuring capital in favor of the monopoly bourgeoisie...
...In summary, given the relative weakness of working class and popular forces at the present time, it would seem that we can speak of a re-stabilization of bourgeois rule in Chile based on a particular model of capital accumulation...
...2) The forced reduction of internal demand, due to the drastically regressive income distribution policies of the Junta, has created a strong stimulus to increase exports...
...His rhetoric is one of reconciliation and the reconstruction of democracy in Chile...
...ORLANDO SAENZ: FAT CAT AUTOCRAT Much of the current interest in Saenz as a critic of the Junta stems from the fact that he formerly played a crucial role in overthrowing the Popular Unity government and installing the Junta in the Presidential Palace...
...Yet the content of the program that Frei is proposing and the nature of the alliance he is attempting to forge is perhaps better understood by examining the social forces he chooses to exclude with vehemence...
...The productive and technical basis of the current export sector was generated by a long process of import-substitution in Chile, designed to satisfy internal demand...
...They are not motivated by political or ideological sectarianism, but by a great desire for justice and their legitimate social aspirations...
...Clearly, a return to "normalcy," even bourgeois normalcy, would be a welcome change from the climate of fascism and terror that currently holds sway in Chile...
...For to the same degree that the Junta's economic and political policies have been successful in restoring a climate of economic growth, they have also created strong divisions within the bourgeoisie, alienated vast sectors of the petty bourgeoisie and provided yet another indelible political lesson for Chile's working class...
...And, while indications are that the level of internal investment in Chile is still extremely low, one thing is certain...
...Capital is being restructured in Chile and numerous small and medium capitalists have already been "structured out" of the bourgeoisie...
...3. Orlando Letelier, "Economic 'Freedom's' Awful Toll," The Nation, August 28, 1976, 142...
...THE ECONOMIC PERFORMANCE IN PERSPECTIVE Chile, formerly a marginal producer in the international market of manufactured and light industrial goods, has pursued an export-oriented growth strategy for the past three years...
...The Junta's ideologues have long maintained that the failure of all civilian forces prior to 1973 was so fundamental, that any resolution of the crisis would entail a profound reorganization of society...
...To think that the bourgeois sectors of the PDC can play a democratic and progressive role is to commit political suicide...
...4. Economist Intelligence Unit, "Chile, #2," Quarterly Economic Review, May 17, 1976, 6-7...
...We will discuss briefly the latter point, in order to proceed to a discussion of the viability of proposed bourgeois alternatives to the Junta's rule...
...Few regimes in the history of Latin America have been able to match the Junta in terms of sheer brutality and heavy-handedness...
...The significance of Frei's proposals is a crucial point of debate in the Chilean Left since it implies a series of fundamental questions concerning class alliance and revolutionary strategy in the post-coup period...
...Luis Guastavino, unpublished lecture, Institute for Policy Studies (Washington, D.C...
...It is important to keep in mind that the monopoly bourgeoisie's game plan does not have as its goal the permanent disarticulation of Chile's internal market, nor the absolute demise of small and medium capitalists...
...Increased foreign aid and investment, or a rapid international economic recovery, could substantially aid the Junta...
...If one admits to their existence as a political factor, it is necessary to reckon on their participation...
...In September 1976 Ercilla was purchased by the Pirana group.29 ship...
...After a few words dismissing the inclusion of out-and-out fascists in any scheme, Frei gets to the heart of the matter: "Urban and rural guerrilla movements, groups who employ violent methods -among which the MIR and sectors of the Socialist Party stand out-all groups who employ any form of violence to impose their ideas ought to be combatted and attacked without the slightest show of weakness...
...2,115 (February 11-17, 1976), 32...
...The sincerity and feasibility of his propositions will be judged in the sections that follow...
...3 And for every percentage point that wage income dropped, profits of the capitalist class soared...
...In the final analysis, however, Saenz objects to the excesses of the Junta, not to its essence...
...In order to preserve capitalism, as Frei fervently promises to do, Frei would also have to repress the demands of the Chilean working class-an extremely militant and conscious working class that has been severely weakened by the events of the past three years, but that has also demonstrated an extreme resilience to repression and a determination to continue fighting for social justice...
...FREI'S MANDATE For Eduardo Frei, the task of reconstructing democracy must be assumed by broad sectors of the population...
...The bone of contention was the Junta's' downgrading of the possibilities of recovery in the internal market...
...To the extent that an externally produced boom will allow the Junta more maneuverability in the economic sphere, one can expect new steps to be taken to recover a higher level of internal activity and to soften the conflicts between sectors of the bourgeoisie...
...On the other hand, most people look to "exogenous" factors for a quick improvement in the economy...
...The Junta's monetary and fiscal policies, especially its set of anti-inflationary measures, have been used with one purpose in mind: to benefit monopoly sectors of the bourgeoisie...
...April 1976...
...An economic recovery of this nature could encourage the Junta to broaden its social base of support, by bringing in to its fold capitalist sectors currently excluded from the benefits of the dictatorship's economic policies...
...The MIR's Response to the Leadership of the Communist Party," in Chile: The MIR and the Tasks of the Resistance (Oakland: Resistance Publications, 1976), 145-46...
...Moderation, however, would be applied more to the economic sphere than to the political...
...Saenz resigned his post in the Foreign Ministry in January 1974 and tried to build up strength by returning to SOFOFA...
...While foreign investors are still less than27 enthusiastic about making large-scale investments in Chile, the Junta has nailed open the country's door, dusted off the welcome mat and offered potential investors the best seat in the house...
...Here, there can be no doubt that the Junta has accomplished this task to an extreme degree...
...There is a further accusation to be made...
...He extends an invitation to "the great mass of men and women, independents, trade organizations, grass roots organizations, squatters, cooperative movements, researchers, student leaders...
...Frei does not stipulate the quota, but the dictates of capitalist accumulation do...
...Ibid., 56...
...Whereas 62.9 percent of total national income went to wage earners in 1972, two years later they received only 38.2 percent...
...9. Eduardo Frei, El mandato de la historia y las demandas del futuro, 4. 10...
...The alternative confronting the country is not between Marxism and and nationalism...
...The construction of large- scale production facilities, and hence the achievement of economies of scale, is a risky business given the frequent fluctuations in demand on the world market...
...Furthermore, it is highly questionable whether the Junta's present economic policies can provide the basis for sustained economic growth within a dependent capitalist framework...
...Pinochet echoes these dark thoughts when he speaks of "a generation of military rule," and undoubtedly dreams of sticking around for the whole show...
...The Chilean Junta has established the basis, the foundation for a period of economic growth...
...This seems to have been the sense of the recent revaluation of the peso, the Junta's current consideration of extending price controls to more food products, as well as its establishment of subsidies for determined economic activities...
...In Mandate of History, Frei makes no bones about what he would expect of the working class: "The trade unions cannot become politicized as the CUT [Central Trade Union Confederation outlawed after the coup] was, and workers will have to bear their quota of sacrifice in the reconstruction of democracy...
...6 He remains an influential opponent of the Junta nonetheless, and a self-proclaimed representative of the interests of capitalists producing for the internal market...
...They are responsible for the occasional restrictions on freedom of expression which have so damaged the country and the government...
...The MIR advocates issuing a call to the Christian Democrats to participate in a joint resistance struggle, but in doing so clearly distinguishes between those progressive leaders like Leighton, Fuentealba, etc., who represent the small and the medium democratic and anti-golpista bourgeoisie, and those others who, like Frei and Aylwin, represent the big bourgeoisie and imperialism...
...Saenz, however, almost immediately found himself in opposition to many of the policies being implemented by Economic Minister Fernando Leniz (a close associate of the powerful Edwards family) and his entourage of advisors...
...s This is one point which the Junta seems to have neglected totally, and it could be one of the reasons behind a rumored very low level of internal private investment in Chile at the present time...
...Here, we will focus on the latter two-economic conditions and bourgeois alternatives to military rule...
...155 (July-September 1972...
...It is pure illusion to think that any bourgeois regime that replaces the Junta will not oppose tooth and nail any indication of growing militancy on the part of the working class, not because they "want" to, but because they "have" to...
...Ibid., 57...
...And he has harsh words as well for the monopoly bourgeoisie, claiming that, "There has not been a single institution or representative figure of high finance or business operating in Chile who has not been a fervent partisan of that economic policy...
...Friedman's policies are applied to the extent that they benefit the dominant monopoly fraction of capital...
...Ibid...
...In sum, the short-run achievements reached in the area of non-traditional exports are momentary successes, viable only within the context of the dictatorship's policies of brutal repression and the near-starvation levels of consumption of the great majority of Chile's population...
...III...
...See Ercilla, No...
...Yet for many others, the promises of Frei in 1976 ring just as false as those he made in the sixties, and the possibility of a return to parliamentary democracy in Chile is extremely remote...
...Those who remain most likely are linked to the production lines of monopoly capitalists...
Vol. 10 • November 1976 • No. 9
