How the Populist Left Brought Chile to Her Knees

Gabriel Boric's Win Heralds End of Pro-Market Era


The socialist Gabriel Boric has triumphed, thus confirming Chile’s abrupt turn to the populist left. (

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The socialist Gabriel Boric has triumphed over the conservative José Antonio Kast with a wide margin, thus confirming Chile’s abrupt turn to the populist left, with all the negative consequences that this will entail. The beacon of freedom in South America seems to be going out.

The standard bearer of the Latin American left has won the most polarized presidential race since Chile’s return to democracy in 1990. He has won with the paradoxical promise of burying the system that has allowed the country to lead all macroeconomic indicators in the region. “If Chile was the cradle of neoliberalism, it will also be its tomb,” he exclaimed.

The former student leader arrives with the usual demagogic crutch of promising to put an end to inequality by substantially increasing the size of the State, thus initiating the process of dismantling the Chilean economic model in order to resume the unfinished totalitarian path of Salvador Allende.

Allende Ended Democracy

In 1970, after running for the fourth time in the presidential elections, the Marxist Salvador Allende triumphed thanks to the support of Congress. He intended to turn Chile into a Soviet-inspired, centrally planned economy.

Its minister of economy, Pedro Vuskovic, assured: “The aim of our maneuver, which will be achieved through the abolition of private property, will be the destruction of the economic bases of imperialism and the ruling class.”

The implementation of these anti-economic policies caused the economy to collapse in record time, increasing the fiscal deficit from 1.4 percent of GDP in 1970 to 22.9 percent by 1973. Inflation soared by as much as 600 percent, generating a shortage of basic commodities.

Allende made intensive use of the executive decree, systematically violating the constitution and the law, which led to a scenario of acute political and institutional crisis. As a result, Congress declared the regime unconstitutional and entrusted the Armed Forces and the Carabineros Corps to intervene to restore constitutional order.

On September 11, 1973, after the repeated institutional inability to stop the regime entrenched in rebellion against the constitution, as well as the efforts of leftist extremists to stir up subversion within the Armed Forces, the Armed Forces decided to act preventively and carry out a coup d’état to avoid a Cuban-style tyranny or a civil war.

The Pro-Market Era

The facts are clear: Chile has been a paradigm of democratic stability, development, and economic growth—virtues that are not the norm but the exception in the region. But this did not happen by chance; it was the product of a series of profound reforms of a classical liberal nature between the 1970s and 1980s.

After taking power in a dictatorial manner, the military junta was unable to get the economy back on track. It handed the baton to the so-called Chicago Boys—economists from the University of Chile, trained at the University of Chicago—who played a key role in designing and implementing economic reforms.

By the end of the 1980s, the country was modernized. The transition to democracy was the next step to enhance the achievements made, so in compliance with the constitutional mandate, in line with international pressures, Augusto Pinochet’s regime was forced to organize a plebiscite on its continuity. The “no” vote won by a wide margin and general elections were called. Thus, Chile returned to democracy after 17 years of iron dictatorship, a unique milestone in history.

In the words of Milton Friedman: “The real miracle in Chile was not that these reforms worked well. The real miracle is that a military government allowed them to be carried out.”

From the Top to the Precipice

Chile demonstrated to the world an extraordinary political maturity by peacefully transitioning from a dictatorship to a democracy. Since then, it has enjoyed a thriving economy and democratic and institutional stability.

The Chilean economic miracle has allowed the country to make progress in all macroeconomic and welfare indicators from 1975 to the present day, being one of the fastest-growing economies in the world. It has quadrupled its per capita income and reduced poverty from more than 50 percent in the 1970s to less than 8 percent in the last decade; it has managed to rank 43rd in the Human Development Index, reduce inequality margins and generate one of the highest rates of social mobility.

However, despite the fact that the data continues to be encouraging when compared to the starting point, since 2014, with the second presidency of socialist Michelle Bachelet, everything has been going downhill: economic growth has plummeted, unemployment has skyrocketed, and wages have stagnated, which has had a negative impact on competitiveness and investment.

Economic deterioration and ideological tension worsened. In 2019, they reached their peak: the former President Sebastián Piñera, after decreeing an increase of four cents on the dollar to the subway fare, lit the fuse of social outburst. This is where the populist left began to fish in troubled waters. With violent demonstrations, activists demanded a new constitution and promoted Boric’s candidacy in alliance with the Communist Party.

Fertile Ground for Demagogy

For decades, the left had installed that false narrative that caricatured Chile as a hell of neoliberal inequality. Propagated in university chairs and the media, almost nobody stopped to question its veracity or contrast it with the facts. A large part of the political spectrum and the country’s elite joined this diatribe, including Piñera, either out of cowardice or conviction.

Having paved the way for a new constitution, placing Boric in the presidency was the logical way to build a new regime based on “social justice” and redistribution of wealth. The Communist Party, which is part of the new president’s governing coalition, will see to that.

Everything seems to indicate that the country will voluntarily abandon the path that has allowed it to be the most prosperous country in South America and take the path of its neighbors, with disastrous consequences. Thomas Jefferson rightly said that the price of freedom is eternal vigilance. In Chile, vigilance has ceased.

Andrés Sebastián Díaz Ponce

Andrés Sebastián holds a bachelor’s degree in political science and international relations from the University of the Americas, Ecuador. He founded Libertario, a Spanish-speaking community that promotes the ideas of liberty in Latin America, and collaborates with the Ecuadorian liberal think tank Libre Razón. Follow @asdp250.

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