Chile: The 1973 Coup and Its Aftermath

 (2002)

G. Stolyarov II

See Mr. Stolyarov's Index of Selected Writings, Originally Published on Associated Content / Yahoo! Voices.
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Note from the Author: This essay was originally written in 2002 and published in 2007 in five parts on Associated Content (subsequently, Yahoo! Voices), where it received over 18,300 page views during 2007-2014. While, in retrospect, the essay is insufficiently critical of the Pinochet regime and the support provided to it by the United States government, in spite of the crimes committed by Pinochet and his supporters, the essay does have the merit of recognizing the atrocious rights violations committed by both Allende and Pinochet, without blindly praising Allende, as many critics of Pinochet have done. To preserve a record of my writings following the shutdown of Yahoo! Voices in 2014, I have given this essay a permanent presence on this page. 

~ G. Stolyarov II, July 23, 2014

Two Dictators of Chile: Salvador Allende and Augusto Pinochet

Two dictators, Salvador Allende and Augusto Pinochet, both brought tremendous suffering upon the Chilean people -- one through his socialist policies and nationalization of industry, and the other through systematic campaigns of terror.

Salvador Allende (1908-1973) won the 1970 presidential elections in Chile, though only marginally. Allende's coalition, Popular Unity (UP), consisting of Socialists and Communists, did not carry a majority, but was the party which had obtained the largest percentage of votes (36.2%).

Allende was one of the founders and leaders of the Socialist Party from 1933 onward and later became its Secretary General. He also served as Member of Chamber of Deputies (1937) and Minister of Health (1938-1942). Allende was strongly in favor of socialized medicine, government-distributed pensions, and gender-based affirmative action. He did not wish to undermine Chile's constitutional democracy, and sought a "legal" transition to statist rule, which he termed "the Chilean road to Socialism".

As part of his program, Allende advocated nationalization of major private companies and banks. He further instigated agrarian reforms and worker management of government-controlled firms, a variation of the Marxist "dictatorship of the proletariat". Allende intensified the paternalistic state reforms begun under the previous Eduardo Frei administration and sought to create a nationalistic Socialist party instead of an international one, oriented toward domestic affairs.

Allende committed suicide or was shot during the September 11, 1973, military coup which overthrew his regime. The suicide scenario is more likely, as validated by numerous CIA sources and encyclopedia entries. The socialist dictator was replaced by a military dictator: Augusto Pinochet (1915-2006).

Pinochet became Commander-in-Chief of the armed forces following the resignation of Allende supporter General Prats in 1972. After the 1973 coup, he was named President of Chile. Pinochet temporarily suspended civil rights, arrested Allende supporters, banned Marxist parties, and imposed strict political censorship. He declared himself dictator in March 1974 and began the denationalization process of the economy.

Pinochet promised "democratic normalcy" through a gradual transition. However, many claim that 3000 Chileans had "disappeared" during his rule, and thousands were imprisoned and tortured for alleged "anti-government" activities. Pinochet called this a period of "repressive pacification" aimed at stabilizing the turmoil, after which the military would relinquish its absolute hold on government.

In 1976 Orlando Letelier, a former Chilean diplomat, Allende supporter, and exiled opposition leader, was assassinated in Washington along with an American colleague. It is likely that Pinochet had commissioned the murder. It was his fascist, police-state advocating Intelligence Chief, Manuel Contreras, who fell out of favor during the exposure of the incident, clearing the political stage for the ascent of free-market reformers opposed to Contreras's terror policies.

Pinochet drafted a new Constitution in 1981, which called for a plebiscite in 1988 to decide whether he would remain in office. He failed to gain a sufficient quantity of votes and therefore stepped down in 1990 after granting himself lifetime immunity as a Senator and Chief of Staff in the armed forces.

The ex-dictator was arrested in 1998 in London to the order of a Spanish judge who had charged him with "genocide" and "crimes against humanity." But Pinochet was declared medically unfit to stand trial in January 2000. Five months later, the Chilean Supreme Court stripped him of his immunity. Pinochet died on December 10, 2006.

Reasons for the Overthrow of Salvador Allende in Chile in 1973

On September 11, 1973, the Chilean military overthrew the country's socialist dictator and president, Salvador Allende. What led the military to such a dramatic step? The Allende regime, in its colossal scope of rights violations, was rapidly becoming intolerable.

The military in Chile, in accordance with the country's general attitudinal trend, was willing to be swayed by a diverse range of ideologies so long as they were implemented gradually and within constitutional bounds. Although Allende had claimed to uphold such an approach, the reality of the matter far too frequently painted another picture. Speaking to the U.N. general assembly, Vice Admiral Huerta gave five primary reasons for the leftist regime's overthrow:

1. A "gross economic catastrophe": Inflation rates had soared to 323% by mid-1973, and the amount of money in circulation was increased twenty-threefold. The economy incurred a major trade deficit of $438 million in 1973, as opposed to a surplus of $78 million in 1970. National debt reached $1 billion. Moreover, nationalized copper firms were functioning at far below capacity (only 13 of 112 facilities generated a profit) and were unable to meet international market demands due to mismanagement and pressure groups seeking a "share of the industrial pie".

2. Law and order deteriorated. Allende opponents were assassinated, and rightist reporters were frequently harassed by pro-government forces.

3. Property rights were not protected through wanton sprees of nationalization and arbitrary seizure of private industries, frequently without the approval of Congress, which constituted a breach of executive authority.

4. Allende had virtually ignored the Supreme Court and its judgment of expropriation and statist nationalization as unconstitutional.

5. Allende tolerated and tacitly supported radial leftist militias, such as the MIR, a Communist organization advocating mass upheaval and overthrow of the industrialist/middle class, aided by agents from Cuba and the Soviet Union.

The United States government, standing behind the interests of its citizens in two major copper companies, Kennecott and Anaconda, was outraged at the nationalization of the copper industry by Allende's government. Moreover, Chile had become yet another ideological battleground of the Cold War as Communist influences from the Soviet Union, North Korea, China, Cuba, North Vietnam, and Albania seeped in via foreign aid to encourage centralization and expropriation.

The Chilean middle class, one of the largest in Latin America, was thoroughly disgusted and alarmed with the inflation policies of Allende's government. To boost morale, Allende first artificially sliced prices and inflated consumer spending while actual productivity languished. As a result, money lost its value at a devastatingly swift pace and savings, the primary tool for living of the middle class, were especially decimated. As early as 1970, 66.4 % of middle classmen stated that they would not vote for Allende. 92% believed that there existed a climate of violence in Chile improper for a decent life.

Moreover, the coup was supported by the Chilean Congress, dominated by Allende's opposition, which was wary of the militant activities of MIR guerillas, to whom Allende had given a moral sanction and who were feared to instigate uprisings in the lower ranks of the military. The CIA, which had lent financial and political support to Eduardo Frei and other moderates since 1962 and triggered Allende's loss in the 1964 elections, also supported the coup. Opponents of socialism, in conjunction with the CIA, sought to undermine military support for the left wing through the kidnapping of General Rene Schneider, an avowed supporter of Allende, which was planned for October 22, 1970. Due to poor communication between the various forces involved, Schneider was mortally wounded in the thereby foiled and publicized attempt. The CIA participated in the 1970 Schneider association (although not physically and not expecting the actual outcome), but remained at the sidelines during the overthrow of Allende.


The Chilean Miracle: Free-Market Economic Reforms in Chile

"The only true sovereignty is consumer sovereignty."
~ Dr. Milton Friedman

The socialist regime of Salvador Allende absolutely devastated the Chilean economy from 1970 to 1973. After the military coup which overthrew Allende on September 11, 1973, the country had a chance to rebuild. The new dictatorship of Augusto Pinochet -- although it engaged in systematic terror against perceived left-wing elements in the population -- saw the wisdom of moving Chile toward a freer economy.

Dr. Milton Friedman (1912-2006) was a Nobel Prize winning Chicago school economist, a free-market economic rationalist (i.e. an advocate of a system where individuals' logical desires determine the exchanges conducted on a market and the only function of government is to act as the "referee") whose theories were implemented in Chile by his students, the "Chicago Boys", during the Augusto Pinochet administration.

Friedman believed that government has only three legitimate functions: the military, protection against crime, and enforcement of contracts. This served as the intellectual basis for the denationalization, privatization, and forging of international free trade connections by the Chicago Boys.

The Chicago Boys aimed at depoliticizing economy and separating it from the state, so as to eliminate pressure group and class warfare on which much of Allende's Marxist appeal had been based. They slashed tariffs, reduced public expenditure, and devalued the currency to counter the massive inflation under Allende's government.

Economic growth was phenomenal from 1976 onward, in what was dubbed "the Chilean Miracle", as GDP increased at an average of 8% per year and banks once again began to view Chile as an attractive investment.

The central government's role was cut as education, social security, and health care were privatized. The 1979 Labor Plan limited collective bargaining, strikes, and politicizing of economic woes, thereby granting greater autonomy to the individual worker.

The economic rationalists have also succeeded in reducing annual Chilean inflation rates from 323% to 3.5%, which is only slightly above the inflation rate in the United States.

Several periods of turbulence affected the economy mildly, such as 1982 debt crisis, but Chile's recovery has also been astonishing. Especially following the transition to civilian government in 1990, the next seven years had seen a recurrence of the 8% growth trend. Chile also has the highest sovereign bond rating in South America. A 1999 drought triggered an economic recession, but Chile's GDP quickly reached previous levels, as the country demonstrates a resilience typical of free market economies.

Poverty in Chile plummeted as military role in government atrophied, and a far greater number of jobs created by the free market are available. Unemployment, although declining, remains high, however.

The History of the Murder of Charles Horman in Chile in 1973

Two American journalists in Chile, Charles Horman and Frank Teruggi, disappeared from their homes on September 16, 1973, under clandestine conditions unknown to the American public and American agencies in Chile. The CIA was, for example, unaware of the circumstances leading to their deaths until the discovery of their corpses and denies any involvement. So does Captain Ray E. Davis of the United States Military Group at the American Embassy.

Horman was a leftist reporter who advocated Allende's socialist policies and reprinted articles from newspapers critical of U.S. foreign policy in a Santiago publication. Mr. Horman journeyed to a coastal resort at Viña del Mar where he had reportedly observed a fleet of American warships and an extensive presence of U.S. officers, interpreting this as a sign of U.S. involvement in the military coup. It is unknown whether this was a motivation for the Chilean government to undertake his arrest or whether the arrest was a part of a routine dissent-quelling operation.

Edmund Horman and Charles's wife, Joyce, undertook a search for their missing relative in collaboration with U.S. embassy officials, whom they as a result began to suspect of inaction and false promises of a diligent search due to the lack of significant assistance from them in the investigation.

Only in 1976 did the State Department conduct hearings with Rafael Gonzalez, a former Chilean intelligence officer who had observed Horman's execution. He had reported the Chilean intelligence chief as claiming that "Mr. Horman had to disappear because he knew too much."

Moreover, the Gonzalez testimony raised suspicions that American intelligence agencies had given to the Chileans lists of especially active leftists who might be perceived as subversive. Such a list was even allegedly requested of Joyce Horman, who refused to produce it.

The Horman family filed a suit against the United States government and officials such as Henry Kissinger for "wrongful death" of Charles. The case was dismissed "without prejudice."

The Charles Horman case is an unfortunate blot on the history of Chile's Augusto Pinochet regime. Although Horman held mistaken socialist views, this is not grounds for being legally penalized - much less murdered. By forcibly quelling political dissent, the Pinochet government committed a grave injustice and prevented itself from becoming an example of liberty to the world. While it was economically wise and freedom-oriented, this regime was also politically repressive and in violation of the basic rights of man.

An Analysis of the Historical Truths and Falsehoods in the Film Missing

Missing is a 1982 film exclusively focusing on the disappearance and death in Chile of the American journalist Charles Horman and, to a lesser extent, Frank Teruggi. It does so without placing an immense emphasis on the crucial political/economic conflicts occurring in Chile at the time. The names of Salvador Allende and Augusto Pinochet are not mentioned once, and where ideology is involved, it is merely glamorized in catch phrases instead of analyzed for its effects.

The horrors portrayed by this film, such as soldiers wantonly firing at men who had merely written graffiti on the walls, or at mothers and children who happened to be outside due to an earthquake during curfew hours, possess an immense dramatic effect sufficient to shock a viewer uninformed about the milder reality of the matter. It was only in industrial suburbs, against violently resisting leftist labor movements, that heavy gunfire occurred in the days following the coup.

Although disappearances, torture, and murder did take place in the aftermath of the coup, they were not overt and did not target apolitical civilians in the streets. During the first days of the coup, the CIA reported only harsh treatment at the National Stadium, the shooting of some 21 political prisoners near the Mapocho river. These were issues that it planned to address at the 1974 U.N. Human Rights Commission.

The film contains striking quote by a Chilean reporter: "You Americans assume that you must do something in order to be arrested." It is striking because of its falsehood. The Pinochet government did persecute Marxists, Socialists, and political opponents, but it did not arbitrarily dispense bullets. The universities were occupied and censored, and dissenters targeted and killed, but that was the extent of the human rights violations.

Moreover, the film portrays an institutional discrimination against foreigners that was non-existent in actuality. If anything, it was Allende's party that was isolationist and sought to form "national socialism" while the Pinochet government welcomed foreign, especially American investment into the economy from both the producer and consumer ends. Following the coup, Chile became one of the most open nations to globalization in Latin America. Doors opened, not closed, to Americans visiting Chilean stores.

The film alludes only once at the economic motives behind the coup, when the U. S. Ambassador to Chile says, "3000 American firms are doing business in Chile. They are preserving a way of life, and a good way of life. We are acting in the interests of the United States, meaning your interests..." Moreover, the film portrays, through the response of Mr. Horman to the ambassador's explanation, the American way of life as undesirable or unworthy of advocacy. It is not a proper means of explaining Allende's ouster and the failure of Marxism in Chile.

Missing does, however, serve as a decently accurate account of the Horman case and the response of American agencies to it. The Chilean government's request for a list of Horman's friends, for example, was real, and so were Charles's encounters with a large U.S. military presence near the Chilean coast, as well as his suspicions of indirect (i.e. financial, political, and intelligence) assistance by American officials in confronting Allende every step of the way.

Gennady Stolyarov II (G. Stolyarov II) is an actuary, science-fiction novelist, independent philosophical essayist, poet, amateur mathematician, composer, and Editor-in-Chief of The Rational Argumentator, a magazine championing the principles of reason, rights, and progress. 

In December 2013, Mr. Stolyarov published Death is Wrong, an ambitious children’s book on life extension illustrated by his wife Wendy. Death is Wrong can be found on Amazon in paperback and Kindle formats.

Mr. Stolyarov has contributed articles to the Institute for Ethics and Emerging Technologies (IEET), The Wave Chronicle, Le Quebecois Libre, Brighter Brains Institute, Immortal Life, Enter Stage RightRebirth of Reason, The Liberal Institute, and the Ludwig von Mises Institute.

In an effort to assist the spread of rational ideas, Mr. Stolyarov published his articles on Associated Content (subsequently the Yahoo! Contributor Network and Yahoo! Voices) from 2007 until Yahoo! closed this venue in 2014. Mr. Stolyarov held the highest Clout Level (10) possible on the Yahoo! Contributor Network and was one of its Page View Millionaires, with over 3,175,000 views. Mr. Stolyarov’s selected writings from that era have been preserved on this page.

Mr. Stolyarov holds the professional insurance designations of Associate of the Society of Actuaries (ASA), Associate of the Casualty Actuarial Society (ACAS), Member of the American Academy of Actuaries (MAAA), Chartered Property Casualty Underwriter (CPCU), Associate in Reinsurance (ARe), Associate in Regulation and Compliance (ARC), Associate in Personal Insurance (API), Associate in Insurance Services (AIS), Accredited Insurance Examiner (AIE), and Associate in Insurance Accounting and Finance (AIAF).

Mr. Stolyarov has written a science fiction novel, Eden against the Colossus, a philosophical treatise, A Rational Cosmology,  a play, Implied Consent, and a free self-help treatise, The Best Self-Help is Free. You can watch his YouTube Videos.Mr. Stolyarov can be contacted at gennadystolyarovii@gmail.com.

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