The Third-World syndrome

On Nov. 19, Chileans will go to the polls. If no candidate gets more than 50 percent of the vote, the two most favored (out of a total of eight) will face off again on Dec. 17.

On Nov. 19, Chileans will go to the polls. If no candidate gets more than 50 percent of the vote, the two most favored (out of a total of eight) will face off again on Dec. 17. According to all the polls, Sebastián Piñera, leader of the center-right, will again become Chile’s chief of state in the first or second round. He already was, successfully, from 2010 to 2014. He was replaced, ingloriously, by Michelle Bachelet, who leaves the presidency with a rejection factor of approximately 70 percent of Chileans surveyed and the approval of the remaining 30 percent.

Up to that point, there’s nothing surprising, except for the history of Chile’s economic and social evolution and the fear of success felt by a substantial part of the population. It’s what I call “the Third-World syndrome,” a group of symptoms, based on ideological superstitions, that keeps that country (as happens throughout Latin America) from finally becoming a First World nation.

Until 1970, Chile was a nation where democracy coexisted with the State’s constant interference. It was a free but gray country, subjected to a series of controls that choked the creativity of its entrepreneurs. That year, Salvador Allende was elected with one third of the vote and he tried to start a social revolution inspired by the Cuban example, a course that contradicted both his campaign promises and the document he had to sign with Parliament to gain access to the presidency.

The experiment ended in 1973 with a severe economic crisis, inflation, shortages, judicial abuse, and finally Augusto Pinochet’s military coup.

Pinochet’s 17 years were tough. About 3,000 people were killed and thousands of Chileans went into exile to escape imprisonment and torture. The Christian Democrats, who at first had supported the coup, soon opposed the military. However, because Pinochet had a very fuzzy idea of the economy, against the counsel of some statist officers (almost all were), he turned over those mysterious activities to some young academicians who had studied in Chicago under Milton Friedman, or at Harvard, where they were affected by the intellectual influence of the market defenders and the modern version of laissez faire. At that point, the legend of “the Chicago boys” was born.

The reform of the economy was successful. Naturally, there were stumbles at first, but in 1990, when the Chileans reprised democracy as a method of governance, the country set course in the right direction. Chile grew spectacularly and the opposition, already ensconsced in the presidential palace, had the good sense not to change what worked flawlessly: the economic model. The administration did not return to the pre-Allende Chile but inaugurated the post-Pinochet era on the solid bases left by “the Chicago boys” until Mrs. Bachelet, in her second term, began to evolve toward the past.

The great contradiction is that many of those who reject Piñera do so for the wrong reasons. They continue to believe in the Theory of Dependence — that silly habit of blaming the developed countries for the Third World’s poverty — without asking who tried to prevent the four Asian dragons from leaping into prosperity. Or without studying how Israel began by exporting oranges and today exports airplanes, medicines and software. Or the case of Ireland, which today is wealthier than the United Kingdom from which it split.

Chile is about to join the First World. Its GNP, measured in purchasing power parity, exceeds $24,000 per capita; its unemployment rate is only 6.5 percent and, as a country substantially inhabited by middle classes, it enjoys great social mobility. If it maintains low public spending, stays away from crony capitalism, eradicates what little corruption exists, sustains a competitive system that increases productivity, and encourages entrepreneurs and innovators, it will become the first nation in Latin America to defeat underdevelopment, something that could happen in the next four years.

For the rest of Latin America, it’s very important that this exception exist. It will signal to us that there is nothing in our DNA that prevents Latin Americans from prospering, leaving the poor and mediocre wagons of civilization, and becoming a world locomotive. To do this, however, it is necessary for Chile to triumph clearly. When that happens, nobody will be entitled to call for absurd and bloody revolutions, as happens in Chavist Venezuela or in Raúl Castro’s irreducibly Stalinist Cuba.

The road is different; the road of the market, of competition and freedom. The road that Chile chose several decades ago.

Published in Spanish by El Blog de Montaner on Saturday November 11th, 2017

*The opinions published herein are the sole responsibility of its author.*