CHILE'S REVOLUTION IN LIBERTY
Lens, Sidney
CHILE'S Revolution in Liberty' by SIDNEY LENS Santiago WHEN EDUARDO FREI was elected president of Chile in 196 4 he was looked upon as the definitive answer to Fidel Castro. Even though...
...At that time he was sympathetic to Castro's experiment...
...Has the promise been redeemed...
...After two years in power it is obvious that structural changes are not so easy to carry out as was expected...
...The presses are put to work printing money, prices go up, workers demand big raises to keep up with the cost of living, inflation becomes rampant—and the economy is in permanent crisis...
...Frei's compromise called for "Chileanization" rather than nationalization...
...Instead of selling more of its exports through New York, where it is heavily in debt, Chile might have arranged a barter deal with Czechoslovakia or China in return for needed machinery...
...Agents for Chonchol's INDA have unionized 20,000 agricultural workers—much to the annoyance of some Christian Democratic union leaders who feel the government ought to stay out of the union business...
...They prefer, instead, to speculate in real estate and commerce, or to send money to Geneva or New York for safekeeping and investment...
...but a plugged inlet pipe allows fresh water to enter only at a dribble...
...This is Frei's opinion too...
...Was a Latin American revolution impossible without foregoing the democratic process...
...More than likely, Frei will find in the next few years that he must move considerably beyond what Jaime Castillo calls the Chilean "NEP," or risk stagnation...
...It is worth mentioning that Russia is on the verge of making a $40 million loan to Chile and that Moscow's soft line undoubtedly influences the position of Chile's native Communists...
...Braden, however, continues to administer and control the company...
...Three—Chile would be forced to buy elsewhere, therefore, $120-$ 150 million of food imports annually, and would hence be required to introduce a stern austerity program...
...They were too closely identified with European ideologies, whereas Christian Democracy seemed homegrown...
...Either way it is doubtful that Chile will ever go back to the traditional Latin American pattern, in which the landed and industrial oligarchy hold exclusive power...
...The Socialists also learned from the election that their image was too "foreign...
...But despite the mixed reactions there is a feeling that something new and important is happening in Chile...
...Originally, Frei's plan was to distribute 100,000 parcels of land during his term of office, build cooperatives, and make credits and agronomists available...
...the plug in the inlet to the economy is the result of an antiquated, oligarchial system, both in agriculture and industry, which makes it difficult to form native capital...
...As for specific action programs, they support the nationalization of basic industry and the banks, full-scale land reform, "workers' control of production," an "urban reform" similar to the one Castro initiated in Cuba where apartments were taken over and sold to the occupants in lieu of rents, and similar programs...
...They concluded, wrongly or not, that even if the United States did not send Marines to Chile, they could expect the following difficulties after nationalization: One—The United States would organize a marketing boycott so that Chile would have difficulty getting ships to carry its exports, or selling in its normal West European or U.S...
...Chile must refrain from nationalizing American property without "adequate compensation...
...Faced with such possibilities, Frei decided that the best course was a political strategy which called for "coexistence" with the United States, while concentrating his major fire against the native oligarchy...
...If there is a significant difference between this and the goal of the Communist Manifesto it is not readily evident...
...The Socialists, prior to the 1964 elections, had assigned a team of economic and political scientists to study what would happen if Salvador Allende, the candidate of FRAP (Popular Action Front)—a bloc of Socialists and Communists—had won...
...The Communists—Moscow variety, since there is virtually no Peking faction in Chile—argue that it is self-defeating to call Frei a "bourgeois...
...CHILE'S Revolution in Liberty' by SIDNEY LENS Santiago WHEN EDUARDO FREI was elected president of Chile in 196 4 he was looked upon as the definitive answer to Fidel Castro...
...Nationalizing copper would not only have left more in the government treasury but it would have given Chile much more economic flexibility...
...The Christian Democrats, in addition, are strongly antiimperialist and favor a "third world" strategy, independent both of Moscow and Washington...
...But these loans are not made quite so generously as most Americans believe...
...The number keeps growing by geometric progression...
...Furthermore, though the United States published optimistic statistics about the gains of the Alliance for Progress, everyone south of the Rio Grande knew that Latin America's economic progress was slow and that most of it benefited the upper classes...
...They have failed to win a mass base in the old unions (where the Communists and Socialists are still predominant), but they have widened their support in the rural areas and the slums...
...From 1952 to 1964 only twenty-two such unions were able to secure legal charters...
...One farm owner, Manuel Burgos Herrera, had his 300-acre farm near Llay Llay seized when he fired nine of sixteen workers who demanded union recognition—an unprecedented action for government to take in such cases...
...Thus the reservoir is always nearly empty...
...The government used the pretext that this step was necessary to "defend the security of the state...
...This change is being made in Chile as never before...
...After months of negotiations he worked out a compromise with the copper firms that many of his left-wing followers consider a "sellout...
...It would also have to contend with Argentina, which has 2,500 miles of common and, in part, disputed borders with Chile...
...This was the problem that Frei faced when he came to office two years ago...
...Yet even here Frei has had to slow down the expected pace of change, and a large part of his program has been indefinitely postponed...
...In those areas where land reform has not yet begun, INDAP has grouped the peasants into "committees of small farmers" for selfhelp and protection...
...Thus Frei's election in 1964—by a resounding fifty-six per cent majority— seemed to promise his young left-wing followers not merely an assortment of reforms, such as one might expect from a Belaunde in Peru or a Betancourt in Venezuela, but a restructuring of society itself...
...will have lasting impact...
...Frei had never stormed a Moncada Barrack but, ideologically, he was probably as far left as Castro when the latter was forming his original brigade of guerrillas...
...During the last year alone these committees have built 1,200 miles of roads, 200 schools, many bridges, community centers, medical clinics, and similar improvements...
...Left to his own devices—for he is a dedicated, progressive-minded, and honest leader—he would certainly have nationalized the copper companies and paid them off in long-term bonds rather than "buying into" these enterprises over a shorter period, as was done...
...Furthermore, there is unquestionably a new mood in the countryside...
...aid" in recent years has been in the form of loans to prop up the Chilean budget and currency...
...Chonchol is a dedicated man, with a large share of responsibility for the "revolution in liberty...
...The new will to progress which has been unleashed among the people is certain to act as a powerful countervailing force...
...Whether the government is doing enough to solve the problems of a small country of eight million inhabitants, a nation heavily in debt, beset by inflation, and dominated by the colossus of the North, is another matter...
...We compared Castro," says one Socialist, "with Mao Tse-tung and Lenin, rather than with Simon Bolivar...
...The government itself is organizing the poor into a variety of pressure groups...
...copper companies...
...Sewing machines have been made available to women willing to operate them and more schools have been built...
...The oligarchs who do build factories prefer to operate them on a semimonopolistic basis, with low production quotas and high prices...
...When Castillo uses the term for Chile, he means that the Christian Democrats have had to make a sizable retreat from their original goals almost before they got started...
...I first met him in Cuba a few months after the Bay of Pigs when he was an economist for the United Nations...
...For Castro had achieved a real revolution and he had liberated his country from North American domination...
...According to Jacques Chonchol, who is in charge of a land reform agency called INDAP, the reform program requires $400 million in new capital during the next eight years, and he is not sure that with all the other national priorities the money will be forthcoming...
...Structurally, then, it is clear that Chile will not be basically modified under the Frei government...
...The NEP (New Economic Policy) was a strategic retreat ordered by Lenin after the civil war in Russia—a retreat which permitted private capitalism to function in trade and small industry...
...They feel that it is necessary to work with elements in the Christian Democratic Party, particularly the left wing, if only to lend Frei support against the reactionaries who prevent him from implementing more reforms...
...One of the Socialist theoreticians says that "if we don't understand this new Christian Democracy we can be washed away and be replaced by a neo-Peronist movement...
...The general expectation now is that only 40,000 peasant families (of a total of 350,000) will be fortunate enough to get their own farms...
...There is a run-off of capital at one end, and a man-made refusal to form sufficent capital at the other...
...Furthermore, because so much of the rural population—thirty per cent of the total —either owns tiny subsistence farms or works for seventy cents a day for the patron, there is insufficient purchasing power to stimulate manufacturing...
...Frei's credentials for this assignment were easily as convincing as those of Castro a decade before...
...What ever the criticism—valid or invalid—it is the new organization at the grass roots that is making the Frei experi ment unique...
...But Christian Democrats insist that revolution is a meaningless catch-phrase unless the timid and harassed masses are organized to fight for themselves...
...Even though the gloss had worn off Castro's image and few people still believed that the "Cuban way" was applicable anywhere else, Castroism remained an inescapable challenge...
...Merely by rigorous insistence that the law be obeyed, Frei has raised the income of hundreds of thousands of rural people by at least one-fifth...
...In practice, that means no nationalization...
...But in the spring and early summer of this year alone 300 unions have been organized and collective bargaining agreements signed with 150 farm landlords...
...Frei recently told a group of Christian Democratic union leaders that while the rich are a permanent pressure force, working before, after, and during elections to achieve their ends, the poor participate only in the voting and then forget about politics...
...Good or bad, each event is measured against this ultimate and persistent hope...
...The assault against the native oligarchy is being pursued with greater vigor than against the U.S...
...But if the revolutionary aspect of Frei's "revolution in liberty" is in limbo, nonetheless there are interesting new reforms in progress, some of which...
...Terms like "nationalization" sounded hackneyed and foreign by comparison with Frei's "Chileanization...
...For Chile the process of regaining independence involves, to begin with, control of the big foreign companies because that is where a major part of the problem originates...
...They are bitter at the Communists for not wanting to wage a stronger campaign against Frei, and many of them feel they must break with the Communists if they want to avoid becoming a tail to Frei's kite...
...As explained by their leading theoretician, Jaime Castillo Velasco, present minister of lands and colonization, the ultimate goal of Christian Democracy is the "communitarian society"—one in which property is owned in common and profits shared, rather than appropriated individually...
...Frei and his Christian Democratic Party answered loudly in the negative...
...these companies drain off too much of the country's foreign exchange...
...Frei introduced a constitutional amendment which would make it possible to issue twenty-five year bonds to the large owners, and a law that provides for taking the land first and arguing about it in the courts later...
...Frei has not achieved a revolution, but his actions have created critical problems for every other party...
...As their quid pro quo these American firms have agreed to invest $300$400 million over the next few years to double copper production and greatly expand the refining of the metal in Chile itself...
...But Frei is not entirely a free agent, for if he had nationalize^ copper he would certainly have faced severe reprisals from the United States and some South Ameri can nations...
...Frei's major achievements, in fact, have been in the area of reform rather than revolution...
...For the Socialists, who expected their man Allende to win in 1964, the loss was traumatic...
...To understand why this has hap pened, and to appreciate the dimensions of Frei's problem, one must visualize the Chilean economy as a great reser voir from which the outlet pipe siphons off water rapidly...
...The right wing of the Christian Democratic Party is more and more insisting on traditional measures and on greater respect for private property...
...Sixty per cent of Chile's foreign ex change comes from the export of cop per, another twenty per cent from ship ments of iron ore, nitrates, and other minerals...
...The copper is produced main ly by three big American firms: Braden (owned by Kennecott), Anaconda, and the Cerro Corporation...
...When I asked Chonchol about the achievements of his regime, he said the most important one was that "for the first time in Chile's history we have developed a mentality among the lower classes that the government is on their side...
...The United States does not use a sledgehammer, but wields a deft scalpel in an effort to guide nations such as Chile to follow the "American way...
...Or it might now take advantage of temporarily higher prices in London (because Zambia is having trouble shipping its copper) to sell a larger portion of its minerals there...
...The local leaders are also aware that hundreds of thousands of members of the poorer class are Frei's ardent supporters...
...In the cities the government has introduced "neighborhood councils" and "mothers' centers" to encourage the slum-dwellers to initiate new industries and improve sanitation, water and oth er facilities...
...They consider his a genuine reform movement that will still "do much in its remaining four years in power...
...Chile must buy the machinery and equipment for the projects financed by the loans from American firms, even though some of these items are available more cheaply from Japan, France, or Germany...
...Chile has a legally-prescribed minimum wage for agricultural laborers of about seventy cents a day...
...The Christian Democratic govern ment has been doing many things that both impress and alienate the people...
...The great landlords refuse to invest their savings in capital improvements...
...Because of police repression and a stringent law it used to be virtually impossible to form peasant unions...
...It is estimated that the profits the foreign firms take out, plus royalties paid to such companies as Coco-Cola, plus the interest and principal that must be paid on a $2 billion debt to foreign nations are together equivalent to about thirtyfive per cent of the $500 to $600 million a year which Chile receives from its exports...
...Two—Washington would curtail economic aid of about $150 million a year, largely food...
...The campesino in the village and the slum-dweller in the city are increasingly being given the opportunity to be heard...
...But by 1970, Chile—if all goes well—will have an extra $115 million a year in foreign exchange because of its new stake in the copper industry...
...The state must take the initiative in this process, they argue, because the unions and the left wing parties lack the resources...
...To change this state of affairs, he said, is the first order of business...
...On fifty of these tracts, with the legal process completed, Chonchol has set up "workers' committees" to operate the farms cooperatively on a profit-sharing basis...
...Endemically, then, there is a "balance of payments" deficit...
...At least $10 0 million a year of the earnings of these corporations returns to the United States, instead of remaining in Chile for re-investment...
...Such matters as nationalization of banks, urban reform, and "workers' control" in the factories have been dropped...
...He is undoubtedly disturbed— as are other left-wing Christian Democrats—by the slow pace of the Chilean "revolution," but he has come around to the idea that the main task now is to organize the people at the base...
...Finally, before the loans are doled out at all, the Chilean government must submit in detail its plans for such activities as credit control, school curricula, and development programs for approval by the United States...
...There is a widespread notion that all Frei's acts are tied into a pattern from which will emerge a better life...
...Was it possible, then, that the "Cuban way" was the only way...
...By contrast, Castro's revolution had worked the other way around, virtually destroying the more affluent sectors of society while bringing substantial benefits to the lower classes...
...They were going to make a revolution in Chile—a deep, thoroughgoing revolution—and do it while preserving democracy...
...Most of the $125-$150 million annual U.S...
...As Castillo summarizes it: "We are in the middle of our NEP...
...markets...
...At the run-down Braden company, which badly needs capital improvements, Chile gets fifty-one per cent of the stock for $80 million...
...According to Castillo the Christian Democrats are also attracted by Yugoslavia's experiment in "self-management," which the New Left in the United States would call "participatory democracy...
...Was there no alternative to a guerrilla war and a head-on collision afterwards with the United States...
...Theirs was to be a "revolution in liberty...
...The fact is that Chilean Communism is about as revolutionary as the program of Americans for Democratic Action...
...They were going to transform Chile, socially and economically, but keep it the most democratic of all Latin American nations...
...The new law has taken nearly a year to proceed through tedious congressional hearings and vigorous debate...
...Even more, they have organized that support as never before and doubtless will continue to do so...
...Some of Frei's critics argue that these are steps toward a corporate state and that Frei is only building up his personal power...
...Four—Chile would probably be faced with increased diplomatic, and perhaps outright military, action by Peru and Bolivia, both of which have territorial claims against Chile and would be encouraged by the United States to press them...
...Whatever one might think of his methods or his ideology, he was, for the intelligentsia of Latin America, a "great liberator," on the order of Simon Bolivar...
...Yet they too concede that Christian Democracy is a "populist movement" that is "unleashing new forces...
...At the opposite end—the plugged entry pipe—the trouble stems from the mentality of the oligarchy...
...For every dollar in commodities it ships abroad, therefore, Chile has only sixty-five cents left with which to buy textiles, machinery, food, and other necessities for its people at home...
...Funds desperately needed to set up plants to produce goods which are now imported, and money required to build roads, schools, railroads, and communications are therefore seldom available in adequate amounts...
...This crisis is solved in two ways: first by borrowing from the United States, and second by the development of "import-substitute" industries...
...The committees have also arranged for $12 million in credits to 81,000 peasants, representing an increase of 500 per cent in this field in the past two years...
...They have conditions attached to them, the effect of which is to make Chile a dependent nation...
...Using the pending land reform law as a threat, the government has been able to force 150 landlords to sell their property to the state for long-term bonds...
...The rapid drain is caused by a large escape of foreign exchange in several ways...
...Though Frei and his Christian Democrats have failed—so far at least— to approximate their "revolution in liberty," they have done enough by way of reform to attract a larger segment of the lower classes...
...Chile lacks the money to buy what it needs abroad and to take care of basic public investments such as schools, roads, and irrigation...
...In Anaconda and Cerro, Chile has arranged for twenty-five per cent ownership in specified properties...
...When the Christian Democrats came to office they inherited a "land reform" program which provided that land could not be seized except after arduous legal steps— sometimes subject to delay for three or four years—and then only if it were paid for quickly Less than a thousand parcels of land were distributed under this plan...
...It is believed that as a result of this deal, the copper companies may be able to repatriate three times as much profits in the next twenty years as in the last twenty...
...Previously this law had been universally flouted...
...It will not control these properties, nor curb the large drainage of foreign exchange, but because the total production and sale will be much higher, more will be left within Chile than previously— unless the added yearly output of 400,000 to 600,000 tons of copper drives down the world market price...
...In return for lowering taxes on American companies by a quarter to a half in the next twenty years, they have permitted Chile to buy into some of their properties...
...Although the Christian Democrats of Chile (and of seven or eight other Latin republics) find their inspiration in Christian rather than Marxist doctrine, their political platform tends toward the extreme left...
Vol. 30 • October 1966 • No. 10
