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Chile and the destructive ideology of American neoliberalism

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Violent Protest in Santiago de Chile
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For the past month the streets of every major Chilean city have seen angry demonstrations, with as many as a million per day marching in the capital, Santiago. Soldiers and tanks have been deployed against protesters, thousands have been arrested and at least 23 have been killed. The demonstrations were sparked by an increase in already expensive subway fares, but quickly evolved into protests against neoliberal economic policies. The chaos and violence led the government to cancel the Asia-Pacific trade conference scheduled for November 11-17, as well as the December 2-13 U.N. climate-change conference.

Neo liberalism is not a new form of liberalism. In fact, it originated as a principled rejection of New Deal liberalism, harking back to 19th-century 'classical' liberalism, which emphasized individual freedom and rights over against the coercive power of government. Neoliberals, such as Friedrich Hayek and Milton Friedman, saw the totalitarian regimes of Stalin and Hitler as fulfilling the same authoritarian impulse that was driving the formation of welfare states in the U.S. and postwar western Europe. For them society itself is a market, and the prime instance of human freedom is the act of buying or selling independent of any coercion (including by government).

From this viewpoint, regulation of markets is a restriction of freedom. Labor unions interfere with the freedom of employers and workers to buy and sell labor. Goods, services and institutions such as education, health care and transportation should as far as possible be privately owned (to avoid government coercion). Neoliberals believe that competition for profit in a free market liberates the creative abilities of the best and brightest and benefits society far more than government programs.

Similar effects occur in Ecuador and Argentina. But there is something special about the story in Chile, where these policies were imposed through a U.S.-supported military coup in 1973 that installed the brutal dictatorship of Augusto Pinochet. They are the same policies that our ruling class wants to inflict on us, with enthusiastic help from the GOP and token resistance from centrist Democrats.

In 1970 Salvador Allende, head of a Popular Unity coalition of socialists and communists, was elected president. He tried to implement what he called a "Chilean Road to Socialism" that included nationalized health care, badly needed land redistribution, support for worker cooperatives, and nationalization of copper mines (Chile's most valuable export). As prominent Latin American scholar Roger Burbach explained, Allende's socialism was based on democratic principles, "all within the framework of the Chilean constitution." It presented an alternative to the authoritarian state socialism of the Soviet Union.

This immediately drew the hostile attention of the U.S. government. President Nixon told his operatives to "make the [Chilean] economy scream." He authorized an intense campaign of economic and political sabotage. The CIA funneled money to right-wing parties and fomented the hostility of the middle and upper classes to Allende's redistributive policies. The U.S. military cultivated a close relationship with their counterparts in Chile. (This is the same playbook now being followed all over Central and South America; e.g., Nicaragua, Venezuela and Brazil.)

In the congressional elections of March 1973, Allende's Unidad Popular received an even greater share of the popular vote than in 1970. E. Bradford Burns, a well-known Latin American historian, was in Santiago on September 4, 1973, watching as "more than 800,000 Chileans parade[d] past the Presidential palace, enthusiastically cheering President Salvador Allende. One week later President Allende was dead, the palace lay a burned-out shambles, the streets of Santiago echoed to the boots of soldiers and the rattling of machine guns."

Pinochet's dictatorship lasted until 1990, after which Pinochet remained as commander-in-chief of the army until 1998. As of 2011, Chile has officially recognized a total number of 40,018 killed, tortured or imprisoned for political reasons during the dictatorship, including 3065 who were killed or made to disappear.

Before his assassination in Washington DC in 1976, Orlando Letelier, Allende's Minister of Foreign Affairs, wrote a brilliant analysis of the disaster that overtook the Chilean economy. He explained that a team of Chilean economists trained at the University of Chicago by Milton Friedman immediately joined with Pinochet to make Chile a laboratory for neoliberalism. The "Chicago boys" had received CIA funds to prepare a 300-page economic blueprint that was given to military leaders before the coup.

They implemented "a total free market policy in a framework of extreme inequality among the economic agents involved: inequality between monopolistic and small and medium entrepreneurs; inequality between the owners of capital and those who own only their capacity to work, etc. Similar situations would exist if the model were applied to any other underdeveloped, dependent economy." All that buying and selling in a neoliberal jungle without government redistribution or labor unions amounts to the strong getting stronger by imposing on the weak. It is a recipe for increasing economic inequality that Chileans are now fighting.

Bipartisan American foreign policy in Latin America continues to be opposition to any regime that wants to implement its version of the New Deal or a European welfare state. As John Bolton said in a speech to a group of Cuban Americans a year ago: the U.S. is once again battling "the destructive forces of oppression, socialism, and totalitarianism." (Notice the implicit equation of "socialism" with communism.) There seems to be a tacit consent among Americans that only neoliberal economies are safe to have in our hemisphere. What would the ruling class supporting these policies do here if it could?

 

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I'm a retired philosophy professor at Centre College. I also am a regular columnist for The Danville Advocate-Messenger, the local paper in what was my home town (I now live in Connecticut). My last book was Posthumanity-Thinking Philosophically (more...)
 

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Friedman once said: "The combination of economic and political power in the same hands is a sure recipe for tyranny." What he didn't see is that any concentration of economic power (wealth) ipso facto becomes a concentration of political power.

Submitted on Saturday, Nov 16, 2019 at 4:10:46 AM

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Brian, when I was young and Irish (red hair/beard), people told my father that

he'd be lucky if I learned to tie my own shoes. You must have been lucky, even

learned to read Milton (Friedman).

Only took 90 years to switch from Democrat Capitalist to Socialism.

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This is number one issue that Americans need to start caring about real soon. If they don't they will deserve reaping what empire has sown.

Submitted on Saturday, Nov 16, 2019 at 5:29:07 AM

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You will have to look very hard to find the demonstrations in Chile, Honduras, Haiti, France and other protests against austerity in the msm. If it is not on Fox News, then it isn't happening.

P.S. The US sponsored riots in Hong Kong are real because they are on Fox News every day.

P.P.S. "What would ruling class do here if they could?" They already are and the problem goes way beyond Trump.

Submitted on Saturday, Nov 16, 2019 at 2:24:53 PM

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Don't orget CNN, PBS (Frontline in particular), NPR, MSNBS, WaPo and the NYT. These are th organs of the democratic party which is itself the public relations arm of the neoliberal/neocon duopoly.

Submitted on Saturday, Nov 16, 2019 at 8:35:08 PM

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Hey, whatsa matter for you? Brigate Rosse?

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Check out the film, La Prima Linea starring the contemporary beauty, Giovanna Mezzogiorno.

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The main problem is the elite teaches people how to fight them and no wonder people cannot succeed. Democracy, revolution, unions, demonstrations have not help and would not. Only equal human rights can.

In this particular case shortening work hours will do everything people need. It will increase the demand for workers and employers will have to pay them more.

The explanation is here.

Submitted on Saturday, Nov 16, 2019 at 2:28:20 PM

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Frankly, the Dems don't even offer up token resistance anymore. They fully embrace neoliberal ideology. That's why Trump beat Hillary. The only way this changes is if the people stop co-operating with the system. It has to fail from lack of support. It's called a general strike. I expect one more big Wall St. crash and people will be far more willing to take the next step.

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Was just telling someone else it will take the next economic collapse to enough up.

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Might be. But what would you ask? A minimum wage raise? How about all low wages raise? Any idea how that might be done? Probably health insurance but what kind? Take into account it may work only if a vast majority of people support it.

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Ever since my social conscience woke up in 94, right around time first heard of the worker ownership of the $20 Billion a year Mondragon Cooperative have been planting seeds of how Unions could work out the details of setting it up. Sadly things have gone backwards. But have heard of worker owned cooperatives of Evergreen in Ohio, Richmond CA and others are popping up around the country as have heard of WINCO (Think that is name.), a worker owned Grocery Market change out west. A headline of WINCO says they could put Wallmart out of business while paying a living wage.


It's not something would want much from the Federal Govt to have their hands in to screw up. But they could loosen financial some crews. A few in cyberspace have agreed that Public City and State Banks such as North Dakota has had since 1919 would be how to fund getting "Coops" off the ground. The USW did have a collaboration with Mondragon to start Union styled Coops, but guess funding was tough. Would love to see pensions into them Public Banks. And would love to see the whole SS cap removed investing the extra wisely by backing US Notes from the Treasury to them Public Banks. Belgium has a 50-50 Public-Private "Belgium styled" Bank at the Post that could also be a model of doing things locally.


Empire is my enemy!


On health care would like to see "mind their own business religions" open lots of not for profit health clinics. As complicated as health care is in America that would be a start.

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I agree with you, but I intended to point out that it is tough to make an agreement among the people about all of the problems society faces. And the elite likes to manipulate people where ever it can.

My point is that one step can solve all the problems with the satisfaction of all the people. Shorter work hours will increase the demand for workers on the market, and they will earn more. Once workers have money, all social problems are solved.

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I think most of the blame for what is going on is from the MSM mainly only spurting dirty laundry about whoever. It reminds me much of Revelation 12 where the Dragon, or Satan (Lost my Bible here in apartment so from memory.) accusing everyone constantly before the throne. The MSM could start offering the many solutions that are out there. Then at same time selling the people another war. I'm very sure that the TV is where them with insight in Daniel 12:3 (Many have been speaking truth throughout the ages.) and will shine brightly leading the world towards peace and everyone having enough. Until the world is at peace, American society will continue to reap what corporate empire has sown all over the world.


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Submitted on Monday, Nov 18, 2019 at 2:57:28 AM

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Another war cannot stop the idea of shorter work hours once people accept it, and that means the war cannot help the elite in this case. People will earn more and buy more, which will grow the economy. Only the elite who want to conquer the whole world will be unhappy, but they deserve it.

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That was a typo, it meant be rather than selling people another war.


Am looking towards the time that the TV is truly used to benefit people. Not sure how many billions or trillions it earns people but see them profits could help much when combined with a positive message.


Would love a fresh start with year of jubilee while we figure out a system where all can have enough,,,money and time to spend it as they wish. A shorter work would surely help as would cutting rents in half. Am not sure how practically we can go all at once. But the screws have to be loosened at the top, and think the rest will work out.

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Shorter work hours are enough to regulate everything and it is all that is needed to fight for. And the elite cannot manipulate such a simple demand.

In the 14th century, when the Black Death killed one-third of the European population, the shortage of workers increased the workers' wages 2-3 times in one year.

According to this historical example, if a political party wins an election offering a reduction of work to 5 hours per day, the lack of workers would increase workers' salaries 2-3 times per hour in one year. The daily wages of workers would rise 30-90% for just a 5-hour shift.

Then the workers would be able to pay rent and health insurance.

Submitted on Monday, Nov 18, 2019 at 11:47:13 PM

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Been calling for shorter work weeks for as far back as can remember. Once punched a brick wall after trying to them through to a friend in a bar, breaking bone in my hand, causing X to leave what wasn't working anyways. Just not something would really want the Govt to do.


But hey, this is really out there. Have felt since first seeing what call a lost jewel in Daniel 12:3: that those with insight are going to shine brightly when giving control of the TV leading the world towards a righteous, peaceful, brotherhood of mankind learning to share the world. (Hope that isn't over my dead body, but that day is closer than it has ever been.)


The veil will be lifted from all nations' and peoples' eyes when we have enough to call for that world wide year of jubilee party, held while that world court of Daniel 7 sits to give the kingdoms to them shattered holy people (Who ever they turn out to be.) of Daniel 12:7. Being led by righteous people would be much better than what we have today.

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This is exactly what I have engineered.

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Imagine means more than can be said. Marie's (Wife that liked rather than first one.) first album bough at 15 was it. Her Grand Father was first "Socialist" in her Belgium village. Called her my Yoko, which she hated, for was a Muslim for 26 years until taking hijab off in public on her own after meeting me. She had found peace from a wild young life in the 70's of the 70's when opened a Koran. My goal had been to help unite America with Islam, as Lennon had hoped to unite east with west. Found her dead with head up against kitchen wall in chair with no table, wearing Lennon's T-shirt saying, "You may say I'm a dreamer but am not the only one." (She must have been sitting with head up for hours,,,) John was more than people think but also only a regular guy in his heart. How I ended up Number 9 (Or 11th in family: 911.) must have just been a roll of the dice or drawing of straws, for a whole bunch of people in life sure seem a lot like me.


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I hope you're right about a willingness to go on general strike. People are doing it in many countries, but it seems alien to our culture thus far.

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Are you speaking as though from Danville, Kentucky or Connecticut?

I see you professed in one and live in the other.

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My views were the same in Kentucky but I have more company here😊

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Ain't rhat the g.d. truth!

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Organized labor is still a bit weak in the US but it is growing in strength and becoming more militant. Witness the Auto Workers strike and the various teachers strikes.

Seldom taught in schools there was a time when there was more solidarity among workers.

The 1934 West Coast General Strike is an example of what can happen when people become outraged enough.

There had been a 3 month Longshoremen's strike. The capitalists brought in scabs and the police shot some workers. Bloody Thursday. On Monday there was a general strike. On Wednesday the strike was settled. That is how powerful solidarity can be.

If the slogan "An injury to one is an injury to all" had been followed the air traffic controllers Reagan fired would have led to an across the board airline strike. That would have ended it and if it didn't adding longshoremen, teamsters and railroad workers would have and we would not be where we are now.

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Professor Cooney, I enjoyed the article. Especially thanks for taking the time to define neoliberalism. I think you would find the article "The Inescapable Casino" in the Nov. 2019 Scientific American has some very interesting insights into the reality of Adam Smith's invisible hand. I wrote a summary of it posted here called "The Slap of An Invisible Hand."

Also, for what it's worth my daughter is a Centre grad ('93 or '94, I can't be sure). Unfortunately, given her focus was on drama she probably never darkened the door to your classes.

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"An Invisible hand of the market" is the best and most potent tool of social justice mother nature has ever given to us. We people need to set it properly to work in the best interest of all, but of course, authorities have worked hard to prevent us, and we are stupid enough to let them. Proper set up would eliminate any need for any other social-economic regulation, and everyone would be satisfied. And it is straightforward.

In the 14th century, the Black Death killed one-third of the European population, which increased demand for workers and their salaries 2-3 times in one year. According to this historical example, if a political party wins an election offering a reduction of work to 5 hours per day, the lack of workers would increase minimal workers' salaries 2-3 times per hour in one year. The daily minimum wages of workers would rise 30-90% for just a 5-hour shift.

By using the invisible hand of the market, all lower salaries would rise on the expences of the top ones bringing the highest possible economic justice to society.

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If a shorter work week is legislated, this is an example of a VISIBLE hand of government creating a lower supply of labor for market forces to work on.


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Firstly science should say what is just, but it is prevented from understanding it, not to mention saying it even in theory. Then yes, the hand of government is visible and should be called democracy, but it does not exist.

When governments shorten work hours, then the invisible hand of the market will alone create considerable benefits to the whole society.

Submitted on Sunday, Nov 17, 2019 at 5:41:27 PM

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Phillip Michaels

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Reply to Aleksandar Sarovic:   New Content

Aleksandar, I think if you read the article (or, since it's behind a pay wall, my summary of it) you'll find that it begins to document that the belief in a deus ex machina invisible hand is quite misplaced.

Submitted on Sunday, Nov 17, 2019 at 11:39:21 PM

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Aleksandar Sarovic

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Reply to Phillip Michaels:   New Content

I have found the article by using Google, read it and may say that nothing is wrong with it, but it is not essential because it does not affect the core of the problem. The core of the problem is unemployment.

The free market will work perfectly when we eliminate unemployment by shorter work hours. Then the employers will have to pay workers more. The more workers are needed, the more they will be paid, regardlessly of any other economic condition. This is so essential, and people do not get. The elimination of unemployment will make the invisible hand works in the interest of all.

Submitted on Monday, Nov 18, 2019 at 12:52:47 AM

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Brian Cooney

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Reply to Phillip Michaels:   New Content

I strongly recommend this article. The gist is clear enough even for a non-mathematician such as yours truly. I wish more economists would read it.https://www.scientificamerican.com/article/is-inequality-inevitable/

Submitted on Sunday, Nov 17, 2019 at 3:43:32 PM

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Aleksandar Sarovic

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I gave a 5 minutes chance to understand what the article talks about and did not get it. That means it is a cheat. The rich people have controlled social science from ever, and as a result, they are entirely useless. Even worse, the rich have put false knowledge in people's heads for such a long time that people cannot change the essential things. It would be better if social sciences do not exist.

Here is my response to "Is inequality inevitable?" It gives precise information from the first sentence.

Full employment is a turning point for capitalism

Submitted on Sunday, Nov 17, 2019 at 4:38:49 PM

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Aleksandar Sarovic

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  New Content

Rob Kall is not an honourable person

Three days ago, I discovered that Lance Ciepiela is a machine that propagates views of the elites here at OEN in the comments of articles. This machine is not capable of performing communication with people; it responds to specific words such as "9/11" with a prepared text. According to Lance, he is a retired Marine veteran. I am positive that he is not capable of setting a robot. The elite must stand behind him. They only have money to propagate anything.

Rob Kall reacted to my discovery furiously. He deleted the post with my proof about the robot reaction of Lance and wrote to me: "The reason for your re-flagging is: Inappropriate Content - Warning, we have a Zero tolerance policy for attacking volunteer editors. Consider this your only warning."

At first, I was shocked, but then my eyes have opened. Lance Ciepela is not a volunteer editor. The elite paid him to contribute to OEN, and he is financially well capable of supporting OEN. This must be the reason why Rob is so mad at me.

Then Rob showed me how serious his threat is by messing up the titles of my two articles here at OEN. Now the articles look undesirable to read. Please check it up: Equal human rights will build a good society unconditionally, and Full employment is a turning point of capitalism. This is really low. I asked Rob to fix them, but he ignored my request.

Rob will ban me from OEN after this post, but I am no more willing to contribute with my articles here anyway.

The elite support politicians, scientists, and media that follow their agenda and prevent others from telling the truth. As a result, you people think the way the elite made you think, and when you decide to rebel against the elite, you cannot succeed in it because the elite made you incapable of winning them. This is the main reason why nothing can change.

If you want to read the truth, you may find it at my web sites www.sarovic.com and www.sarovic.org.

Submitted on Saturday, Nov 23, 2019 at 4:16:28 AM

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