Monday, December 18, 2006

CONTOS LIBERAIS : GUARDANAPO

The passing of a tyrant

Economist, December 16th-22nd

HIS was not the bloodiest of the military dictatorships that afflicted South America in the 1970's. That accolade belonged to the Argentine junta. Nor was it the longest-lasting:Alfredo Stroessner misgoverned Paraguay for 35 years and Brazil's collegial military regime lasted for 21. But General August Pinochet, who rulled Chile from 1973 to 1990 and who died last weekend, was the most brutally successful of the dictators. He presided over a viciously effective police state and came to personify a whole era of bloody despotism during the later stages of the cold war.
The left abhorred him not only because of his brutality but because he overthrew the elected Marxism government of Salvador Allende. The coup in 1973, which had the backing of thr United States, ended a democratic tradition in Chile that stretched back to the 1930s. For his defenders both at home and abroad -who not long ago were numerous- he was the saviour of his countr. They argue that he rescued Chile from communism and went on to turn it into the fastest growing economy in Latin America by applying free- market policies that would imitated in eastern Europe and Asia. General Pinochet hoped that a record of economic success, not just intimidation, would enable him to win a referendum in 1998 and remain in power. Chilean voted instead to restore democracy, by 56% to 43%. The general stayed on as army commander, casting an overbearing shadow. He was finally brought to book, if not quiet to trial, thanks to a Spanish judge, Britain's House of Lords and the courts in Chile.

The Pinochet story raises two unconfortable questions for liberals.
If the coup did indeed rescue Chile from an elected government that was Marxist-dominate-and thus anti-democratic-was it justified? The answer is no. The Allend government generated economic chaos and extreme political tension and would probably have imploded. But the intention of the junta was to crush democracy, not just communism.

The second unconfortable question is wether Chile's subsequent economic success was possible only because of dictatorship. Like most Latin America dictators, General Pinochet was instinctively an economic nationalist. But he saw the "Chicago Boys", a group of free-market economists, as a means to consolidate his personnal dictatorship. The radical shrinking of Allend's bloated state was a way to avoid sharing patronage, and thus power, with the armed forces.

With Chileans cowed, the Chicago Boys could work as if in laboratory, with no regard for social costs.
They made mistakes: a fixed exchange rate and unreagulated bank privatizations triggered a massive recession and financial colapse in 1982-1983. More pragmatic policies and a renewal of growth followed. But it took the return of democracy in 1990, with its hability to bestow legitimacy, to create an investment-led boom and a large fall in poverty. Elswere in Latin America, free-market reforms were enected by democracies.

Most dictators are economic bunglers. A few get the economy right, as Spain's Franco did after 1958. But in the long run (as China is likely to discover) economic liberty seldom thrives in the absence of political liberty. And General Pinochet's claim to have stood selflessly for the former was tarnished when it emerged that he amassed a fortune incommensurable with his salary. Even if history bothers to remember that he privatised the pension system, that shoul not wipe away the memory of the torture, the "disappeared" and the bodies dumped at sea. His defenders - who include Britain's Lady Thatcher - really should know better.

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