This article on our blog analyzes the political and economic climate of Chile. This is a fantastic piece of work so be sure to check it out. From the article: The dynamics of the economic marketplace in many South American countries has been due mainly to political instability based on the effort of South American leaders to centralize government’s economic and political power at the expense of individual liberty. Economic mechanisms are sometimes used to subsume the individual into the state, and grow executive power. However, neo-liberal market reforms instituted in Chile after the coup that ousted Allende, slowly eroded executive power during a tacit shift towards individual freedom. This in turn increased economic production that eventually lead to the peaceful ousting of Pinochet’s authoritarian dictatorship, and a thriving economy. The failure of other Latin American democracies in South America has been due to the political insecurity of the executive to relinquish total economic control. Freedom isn’t only the right to be politically free, via the rule of law and democratic elections, but also economically free, via voluntary transactions in a market driven economy. The free market principles of market reform in South America are based on the idea of Adam Smith’s “invisible hand”, the notion that the allocation of scarce resources with multiple uses is best organized by free people in voluntary, mutually beneficial transactions, as opposed to government coordination of economic arrangements. This spontaneous order, according to Dr. Milton Friedman, can also remove some of the political constraints by government over the individual. According to Friedman, “By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to be a check to political power, rather than reinforcement.” (Friedman 15) The more economic control the government has over the individual, the more one will look to the government rather than themselves or others, to solve their problems, directly correlating to increased political power for the state. Immediately following the global economic instability of the Great Depression beginning in 1930, dictators and presidents have been using economic control to gain and maintain political power. For instance, in the 1930s, Brazil’s Getulio Vargas backed by the military, instituted the “Estavo Novo” or “new state” and declared himself dictator. His government interventions into the economic realm were modeled after Italian fascism of the same time period. He instituted import substitution and corporatist policies that “…combined strong government involvement in economic activities with the organization of workers into government controlled unions.” (Vanden and Provost 229). Peron, in Argentina followed a similar model to that of Vargas in Brazil, “In power, Peron’s strategy was similar to that of Vargas… his rule took on nationalistic tones and policies of economic protectionism were implemented. The government took a strong hold of the economy…” (Vanden and Provost 229). These two populist leaders in Latin America derived their power by controlling individual’s economic situation by limiting competition for both input and output, while dissipating the costs among the population as a whole. https://theanalyticalconservative.wordpress/2014/09/16/an-analytical-view-of-the-chilean-miracle/
Posted on: Wed, 17 Sep 2014 17:50:32 +0000
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