Commemorating Chile’s Unidad Popular

Alejandro Reuss

Today, many Chileans—and many sympathizers from around the world—will commemorate and mourn the anniversary of the 1973 military coup. The coup ended the three years of the Unidad Popular (the socialist-led “People’s Unity” government, or UP) and forty years of civilian rule and electoral government in Chile. The day of the coup ended with La Moneda, the presidential palace, a burned and bullet-riddled ruin, and with the country’s freely elected socialist president, Salvador Allende, dead from a self-inflicted gunshot wound. The military dictatorship that came to power on Sept. 11, 1973, would become notorious worldwide for the kidnapping, rape, torture, and murder of political opponents. Its apologists would, meanwhile, turn a blind eye to its atrocities, and laud the results of its neoliberal economic policies as an “economic miracle.”

It has certainly been important and necessary to dredge up this painful history. The military dictatorship, as Patricia Constable and Arturo Valenzuela put it in their 1991 book A Nation of Enemies: Chile Under Pinochet, had “made spies of the unscrupulous, sycophants of the ambitious, and conformists of the majority.” The experience of dictatorship left many traumatized by violence, many more cowed into submission—not only by the fear that they themselves might be tortured or “disappeared” if they spoke up, but by the idea that dreaming of a new society was a form of hubris, which would only lead to disaster. Despite eruptions of protest during the period of the dictatorship, especially in the early and mid 1980s, Chileans have really only gradually overcome this trauma and regained the ability to protest without triggering fears of another coup. Confronting this history, breaking the silence about the past, naming the guilty parties, demanding justice—all played a role in making protest possible again.

There are other things, however, to commemorate about Chile in the early 1970s, most especially the promise of a democratic socialism that was truly democratic and truly socialist—something fundamentally different from both the reformed capitalism of western European social democracy and the bureaucratic dictatorships of the Soviet bloc. The UP in Chile, the May 1968 protests in Paris, and the Prague Spring of 1968 all, in their way, rekindled hope for a new brand of humanistic and liberatory socialism. In remembering the demise of the UP (not just the government, but that era of Chilean history), we ought not to forget its positive legacies.

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G20 Finance Ministers focus on private financing of infrastructure

Jesse Griffiths, Guest Blogger

Jesse Griffiths is Director of the European Network on Debt and Development (Eurodad).

Last weekend, G20 Finance Ministers had their penultimate meeting before the G20 Leaders summit, scheduled for December in Turkey. Despite the current instability in stock markets and currencies in many countries, the focus of the communiqué is on the continued push, led by multilateral development banks and the OECD, to radically change the way infrastructure is financed by trying to draw in private finance, though this method has a weak recent track record. Discussion of ongoing efforts to combat tax evasion and reform the financial sector were slated for the next meeting in October, while the G20 continued to complain about the failure of IMF governance reform, but offered no hope that an IMF governance crisis can actually be avoided.

This was the Finance Ministers’ third meeting of the year, with one more slated to coincide with the World Bank/ IMF annual meetings in Lima in October. Detailed analysis of the outcomes of the meeting has been hampered by the fact that almost all of the large number of background papers were not put in the public domain until some days after the summit ended.

The stock market problems in China, and related currency problems of many other emerging markets were at the centre of the discussions, but monetary policy coordination has been a major area where the G20 has failed to have any impact in the past. The communiqué underscores this fact by noting that “monetary tightening is more likely in some advanced economies” – effectively endorsing anticipated raises in interest rates in the United States, which many expect will lead to a significant outflow of capital from developing countries.

Private infrastructure top of the agenda

Instead, as Eurodad predicted earlier in the year, the big focus this year is on “boosting investment,” which the ministers proclaim as “a top priority.” This is nothing new – infrastructure was a major theme of the Australian G20 presidency in 2014, though outcomes were limited – but the sheer scale of the preparatory work suggests the international institutions that act as the secretariat for the G20 have moved into overdrive, with multiple background papers from the OECD, the World Bank and others.

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Understanding Contemporary Capitalism, Part 1

David Kotz, Guest Blogger

David Kotz is a professor of economics at the University of Massachusetts-Amherst and the author of The Rise and Fall of Neoliberal Capitalism (Harvard University Press, 2015). This is the first installment of a two-part series based on his book.

Part 1: What is Neoliberal Capitalism?

“Neoliberalism,” or more accurately neoliberal capitalism, is a form of capitalism in which market relations and market forces operate relatively freely and play the predominant role in the economy. That is, neoliberalism is not just a set of ideas, or an ideology, as it is typically interpreted by those analysts who doubt the relevance or importance of this concept for explaining contemporary capitalism. Under neoliberalism, non-market institutions – such as the state, trade unions, and corporate bureaucracies – play a limited role. By contrast, in “regulated capitalism” such as prevailed in the post-World War II decades – in the United States and other industrial capitalist economies – states, trade unions, and corporate bureaucracies played a major role in regulating economic activity, confining market forces to a lesser role.

A few clarifications are in order. First, capitalism cannot function without a state. After all, private property is a creation of the state, and market exchange requires contract law and associated enforcement that can only be provided by a state. However, in neoliberal capitalism the state economic role tends to be largely confined to protection of private property and enforcement of contracts. In regulated capitalism the state’s economic role expands significantly beyond those core functions of the capitalist state.

Second, the dominant role of market relations and market forces in neoliberal capitalism is embodied in a set of institutions and reinforced by particular dominant ideas. The transition from regulated capitalism to neoliberal capitalism starting in the 1970s was marked by major changes in economic and political institutions. This will be explored below.

Third, the institutions of neoliberal capitalism, while promoting an expanded role in the economy for market relations and market forces, simultaneously transform the form of the main class relations of capitalism. Most importantly, the capital-labor relation assumes the form of relatively full capitalist domination of labor. This contrasts with the capital-labor compromise that characterized the regulated capitalism of the post-World War II decades. Neoliberalism also brought change in the relation between financial and non-financial capital, as will be considered below.

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What We’re Writing, What We’re Reading

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What We’re Writing

Yuan Tian and Kevin P. Gallagher, Housing Price Volatility and the Capital Account in China (This is the full paper whose key findings are summarized in the earlier Triple Crisis blog post, Regulation and Volatility in China’s Financial Markets.)

Jayati Ghosh, Emerging Markets in Retreat

Martin Khor, Economy Facing Its Greatest Test

Sunita Narain, Back to Toilet School

What We’re Reading

Deepankar Basu and Debarshi Das, Profitability and Investment: Evidence from India’s Organized Manufacturing Sector

Andrew Cornford, The Financial Reform Agenda: Impact and Inclusiveness for Developing Countries

Anita Dancs and Helen Scharber, Do Locavores Have a Dilemma? (This is the full article from which the earlier Triple Crisis blog post Local Food and the CASTE Paradigm was excerpted.)

Robert Pollin, Heidi Garrett-Peltier, James Heintz, and Shouvik Chakraborty, Global Green Growth: Clean Energy Industrial Investments and Expanding Job Opportunities

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Clinton Proposals Don’t Go Far Enough to Combat “Short-Termism”

Gerald Epstein

In a recent interview on The Real News Network, regular Triple Crisis contributor Gerald Epstein, co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts, addresses recent discussion of corporate “short-termism” in the U.S. presidential campaign. Why do corporate executives act to boost short-term stock prices at the expense of long-term productive investment, and what policies would be effective in combating these practices?

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