BARNES: The Chilean Model Lives
By Fred Barnes
The word “Chilezuela”—that’s Chile+Venezuela—was more an accusation than a slogan, the gist being that the left-wing candidate for president of Chile would model the country along the policy lines of Venezuela, the socialist hellhole.
It worked. The leftist Alejandro Guillier lost badly to Sebastián Piñera, a billionaire and former president whose first term (2010-2014) had not gone well. Elected just before Christmas, Piñera has not caused conservative hearts to flutter in anticipation of a bold new term that begins in March. But Piñera kept the left out of the presidency. And that was enough for the time being.
There’s a bigger picture. The rags-to-riches Chile story lives on as a model of what a poor country can achieve if it spurns socialism and adopts free markets and democracy. Peru is now copying Chile. More may follow.
But obstacles remain. Capitalism is not taught in Latin American schools and not much in colleges either. Even with Fidel Castro gone, Cuba exports communism as aggressively as it once did sugar. It’s left to private organizations and American groups like the Fund for American Studies (TFAS) to teach the joys of free enterprise. And there’s always corruption to deal with. Plus, socialists often make good candidates—Guillier was an exception—and are clever at getting elected.
In Chile, socialist Michelle Bachelet is leaving the presidency because of a one-term limit. When she spoke to American business executives at the U.S. Chamber of Commerce in 2014, she said Chile has an efficient tax system but complained that it was deficient in income redistribution. The audience applauded.
She and other socialists have an ally in Pope Francis, who spent three days in Chile in mid-January. He is said to have moved up his schedule to visit while Bachelet was still in office. The pope has yet to return to Argentina, thus avoiding Mauricio Macri, his homeland’s center-right president.
Bachelet pushed hard to elect Guillier, a more radical version of herself. But he wasn’t helped by the endorsement of Venezuelan president Nicolás Maduro and the shadow of his Stalinist regime.
Piñera, 68, was a colorless candidate in the first round of voting, emphasizing his unexciting personality. He got a meager 36 percent of the vote. With “Chilezuela” as the theme of the runoff, turnout surged and he defeated Guillier, 54-45 percent.
Chile was once a Third World country headed downhill economically after Salvador Allende was elected president in 1970. He won only a third of the vote but was bent on creating a Marxist state. In 1973, the military led by General Augusto Pinochet staged a coup. Allende and several thousand of his followers were killed.
Pinochet was an unusual dictator. When he took over, Chile had one of the highest rates of poverty in South America. It was a basket case. Now it has the continent’s strongest economy. Without Pinochet’s having heeded the advice of economist Milton Friedman, imposed capitalism, and hired a team of free market economists, many trained at the University of Chicago, the rise to First World status wouldn’t have happened.
One of the economists was José Piñera, brother of the new president and Harvard-educated. He created a stable, fully-funded pension program that has become a monument to the success of private markets. But leftist politicians have increased their pressure to change the system, says Darío Paya, a former Chilean ambassador to the Organization of American States.
Change is the last thing the retirement plan needs. Piñera released a study in January that found “72 percent of the capital accumulated in the personal retirement account of the average Chilean worker, after 36 years in the private pension system, comes from the return on the investments done with their contributions.” That’s a long way of saying the plan is a dazzling success.
The left, still in love with socialism despite its latest bloody failure in Venezuela, screams about inequality but it’s declining as the middle class grows. I was struck especially during a week in Chile by a new poll that shows people here happy, satisfied, and optimistic about the future.
“When you think about it, Chileans are the happiest people in the world,” University of the Andes pollster Ricardo González said. On top of that, the poll discovered a “correlation between life satisfaction and GDP growth.”
Yet there’s a disconnect between how people here feel about capitalism—as a concept anyway—and the economic success they are experiencing. Pinochet is partly to blame, I suspect. He’s a hard man to credit, given his bloody takeover. He made himself president, leaving office in 1990 after losing an election. He died in 2006.
Lecturing students at a TFAS program at the University of the Andes, a professor noted repeatedly that he heartedly disliked Pinochet. After each of these declarations, he touched on an economic success for which the general was at least partly responsible. Dictators make poor heroes.