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The Fruits of Fascism:
CIA-Socialism
in Chile

by David Mericle
art/Eachean Edmundson

Throughout the 1960s, massive CIA operations successfully determined the outcome of Chilean elections in favor of Salvador Allende's opponents. These elections were never remotely democratic.

With the victory of Ricardo Lagos in Chile's presidential elections, many are ready to forget the fascist period and pretend that, as Isabelle Allende recently said, Chile has "come full circle." Chile is far from returning to the days of Salvador Allende and remains an intensely exploited, underdeveloped country without hope of improving its position under the current situation.

Throughout the 1960s, massive operations by the U.S. Central Intelligence Agency (CIA) successfully determined the outcome of Chilean elections in favor of Allende's opponents. These elections were never remotely democratic, as the CIA spent millions, more per capita than was spent in US elections at the time, to make sure its candidates won. That Allende did eventually win despite continued overwhelming CIA opposition is remarkable evidence of the tremendous popular support for socialism that existed in Chile.

The CIA operation that followed was even more despicable than the agency's pre-election activities. Under orders from President Nixon to "make the economy scream," the CIA and Ambassador Edward Korry did everything "within [their] power to condemn Chile and the Chileans to utmost deprivation and poverty." The sabotage campaign was highly successful in destroying the Chilean economy, but it was not enough to remove Dr. Allende, who persisted with such dreadful projects as giving milk to starving children.

As alternatives to subversion, the CIA was also heavily supporting the army and a group of University of Chicago-trained economists, disciples of Milton Friedman. The fascist army needed the economists to tell them how to run the country, and the economists needed the fascists in power to be able to implement their program. The two U.S.-backed groups joined forces, and after the fascist army led by General Pinochet overthrew Allende in a bloody coup and murdered tens of thousands of potential opposition figures, the "Chicago Boys" began transforming the Chilean economy in accordance with the free-market theories they learned from Friedman.

The results were catastrophic. Antonio Garza Morales wrote in Excelsior that the number of Chileans considered poor rose from 1 million to 7 million over the course of Pinochet's rule, with the population remaining at about 12 million throughout the period. The Chicago Boys and the IMF/World Bank kept unemployment high to depress the wage level, while the fascists made their contribution by crippling the labor movement. During the period, real wages did not rise and per capita consumption actually fell, a disastrous waste of a decade and a half for a country struggling against underdevelopment. The fascist-imperialist alliance also destroyed the social service system, left Chile with one of the world's worst foreign debts, and made Santiago one of the world's most polluted cities.

For the ruling class, fascist rule proved quite advantageous. As Pinochet's government proudly insisted, 10 percent of the population did benefit significantly, and to Pinochet, this was the only portion of the population that mattered. Milton Friedman judged the change "an economic miracle." Needless to say, 90 percent of Chileans disagreed.

What Andre Gunder Frank called "economic genocide" was not Chile's only problem during Pinochet's rule. Pinochet and his cohorts murdered around 30,000 people with the knowledge and support of the United States. Friedman's attempt to distance himself from the fascist regime was humorously countered by his students themselves, who frankly admitted that they could never have carried out their teacher's policies without a military dictatorship to crush popular opposition.

Chile is surely slightly better off with Lagos than presidential contender Joaquin Lavin, a University of Chicago-trained ex-Pinochet employee who heads the nearly fascist opposition party. But there should be no illusions that the two candidates were significantly different. Lagos has announced plans to stock his government with IMF-trained economists and has made it clear that he intends for the Chilean Socialist Party to become just another business party. He even opposed General Pinochet's extradition to Spain, though under popular pressure, he said he would not prevent a trial -- which would seem to be overkill in Pinochet's case -- in Chile.

Lagos and the modern Chilean Socialist Party have not only failed to learn the lessons of the party's past, but have entirely forgotten Chile's real history. Lagos blamed Allende and his Socialist government for the economic problems created by the CIA, and Ricardo Nuñez Muñoz, the president of the Socialist Party, told the New York Times, "It's wrong to say that the CIA, the armed forces and the bourgeoisie alone brought down the Allende government. It's obvious we need to admit we made critical economic and political errors that were as decisive if not more decisive." These lies are especially appalling in light of the CIA itself having admitted in the form of now-declassified documents that it was responsible for producing the chaos in Chile.

Lagos recently promised New Deal-type legislation to create 300,000 jobs. Such a program would fail to rescue Chile from underdevelopment to a far greater extent than it failed to save the US from the Great Depression, though a critique along these lines is not even relevant. Even such a moderately progressive project is not possible in Chile today, because no amount of support at the polls can overcome the opposition of the IMF/World Bank and other imperialist agencies, Chilean and foreign businesses, and other comprador and reactionary elements in Chile.

The Chilean experience reveals a great deal about the nature of U.S. imperialism that should not be forgotten by the people of any part of the American Empire. The United States' brutal opposition to a Latin American president merely giving milk to starving children can only be interpreted as meaning that a reaction many times worse could be expected if such a country actually made serious efforts at development (the recent history of Cuba and Nicaragua of course confirm that this is exactly the case). The U.S. response to Allende exposes the futility of attempting to free a nation from the chains of underdevelopment without first breaking the iron bonds of imperialism. Until Lagos and the Chilean Socialist Party realize this, real progress in Chile will be impossible.•

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