Augusto Pinochet

General Augusto José Ramón Pinochet Ugarte{{an|Name}} (born November 25, 1915) was head of the military government that ruled Chile from 1973 to 1990. He came to power in a violent coup that deposed Salvador Allende, a Marxist physician who had become the first Socialist to be elected President of Chile. The coup ended a period of strained relations between the United States?which had actively sought Allende's removal?and the South American country, and allowed Pinochet to implement profound neoliberal economic reforms and, at the same time, to commit extensive human rights violations, both at home and abroad.

Pinochet's economic policy

Once in power, Pinochet immediately set about making market-oriented economic reforms. He declared that he wanted "to make Chile not a nation of proletarians, but a nation of entrepreneurs". To formulate his economic policy, Pinochet relied on the so-called Chicago Boys, who were economists trained at the University of Chicago and heavily influenced by the monetarist policies of Milton Friedman.

Related Topics:
Chicago Boys - University of Chicago - Milton Friedman

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Pinochet launched an era of economic deregulation and privatization. To accomplish his objectives, he abolished the minimum wage, rescinded trade union rights, privatized the pension system, state industries, and banks, and lowered taxes on wealth and profits. Supporters of these policies (most notably Milton Friedman himself) have dubbed them "The Miracle of Chile", due to the 35% increase in real per capita GDP from 1960 to 1980 (later, from 1980 to 2000, it increased by 94%, but Pinochet was no longer in power after 1990). Opponents such as Noam Chomsky dispute this label, http://www.chomsky.info/articles/199011--.htm pointing out that the unemployment rate increased from 4.3% in 1973 to 22% in 1983, while real wages declined by 40%. There is much disagreement amongst economists regarding the accuracy of such statistics, with both sides normally selectively choosing those that better reflect their argument. However, Pinochet did manage to address part of these problems during his final years as President, since unemployment was down to 7.8% in 1990. The shortage problems during the final years of Allende's administration were also remedied.

Related Topics:
Deregulation - Privatization - Minimum wage - Trade union - Pension - Industries - Bank - Tax - Wealth - Profit - The Miracle of Chile - Noam Chomsky - 1973 - 1983 - Real wage

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The privatizations, cuts in public spending, and deregulated labor policies generally had a negative impact on Chile's working class and a positive one on the country's more wealthy strata and middle class.

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President Allende's economic policy had involved nationalizations of many key companies, notably U.S.-owned copper mines. This had been a significant reason behind the external Western opposition to Allende's government, in addition to his friendliness with Cuba and the Soviet Union. Much of the internal opposition to Allende's policies was from business sectors, and recently-released U.S. government documents confirm that the U.S. funded the lorry drivers' strike, http://www.guardian.co.uk/international/story/0,3604,260382,00.html that had exacerbated the already chaotic economic situation prior to the coup.

Related Topics:
Cuba - Soviet Union

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