Thoughts on chavismo, neoliberalism and Pinochet

One of the interesting points often made by chavista sympathizers concerns the legacy of Augusto Pinochet in Chile. Specifically, the argument first assumes that neoliberalism was an unequivocal failure in Latin America (which is highly debatable), and that, even apart from that, Pinochet implemented neoliberal reforms in Chile while he was also raging a brutal dirty war against “subversives” so neoliberalism is also evil because it was a Pinochet policy.

There are two things wrong with this framing. The most obvious is that policy ideas are good or bad regardless of who implements them. To give a sort of extreme example, a national system of high speed roadways is a good idea, even though it was Nazi Germany that built the first one. Similarly, Cuba’s national healthcare system is a national triumph; providing high-quality, cost effective healthcare to the entire population. That said, the United States, France and many other countries were able to build similarly effective road systems to the Autobahn without resorting to totalitarianism. Likewise, many democracies, and even some in poorer countries than Cuba (i.e. Costa Rica) have built national healthcare systems of similar or even better quality than Cuba’s, without banning free speech, opposition political parties or severely restricting their citizens from leaving the country for sixty years and counting.

The second problem is that it fails to address neoliberalism as a policy option and instead attacks it by association. Obviously, neoliberalism generates controversy for reasons apart from Pinochet but that is a separate issue. Free markets are good or bad on their own, and have won the day in many democracies around the world—and in many dictatorships. Few people making the Pinochet argument to discredit market-based policies while defending chavismo will actually take on the relative success of the actual policies in Chile, because it’s hard to argue that any other approach in Latin America has been more successful.

In 1980, despite fairly strong growth in the years since the Pinochet coup that removed Salvador Allende from power in 1973, Chile’s GDP per capita at purchasing power parity (PPP) was barely more than half of Argentina, Mexico or Venezuela’s and was 25 percent smaller than Brazil’s. By 2012, Chile’s GDP per capita at PPP had grown 280 percent and was 36 percent higher than Venezuela’s, 21 percent higher than Mexico’s and 54 percent higher than Brazil’s. This means that GDP per capita grew less than 1 percent in Venezuela during that time, 27 percent in Mexico and 36 percent in Brazil. Even looking more generously—comparing with Venezuela since the beginning of chavismo in 1998 and Brazil in 2002 when Lula took over and their neoliberal eras are supposed to have ended—the results are similar:

Since 1998 GDP per capita grew 46 percent in Chile compared to 14 percent in Venezuela

Since 2002 GDP per capita grew 40 percent in Chile compared to 28 percent in Brazil

Instead of confronting these realities, some critics demonize the whole concept by equating it with a brutal dictatorship that happened to also implement those reforms (a guilt by association few socialists seem willing to apply to their preferred policies and Stalin or Mao).

There is a lot to criticize about the reforms that were implemented in Latin America during the 1980s and 1990s—even though it’s difficult to find a country besides Chile that deeply implemented neoliberal reforms as conceived in the Washington Consensus. However, when defending the disaster that the Venezuelan economy has become, one cannot simply dismiss the success of the Chilean model because Pinochet was a monster (and make no doubt about it, he absolutely was).


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