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25X1C10b Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 CPYF,G Iproved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 h D_ - ?Ili? Rg CPYRGHT ~i1~iali~~Il~&~ MAY-JUNE 1974 VOL. XXiII Problems of Communism is a bimonthly publication. Its purpose is to provide analyses and significant background information on various aspects of world communism today. Opinions expressed by contrib- utors (as well as geographical boundaries and names used in articles and illustrations) do not necessarily reflect the views or policies of the United States Government. Communications on all matters except subscriptions should be addressed to the Editors, Problems of Communism,. US Information Agency, 1776 Pennsylvania Avenue, NW, Washington, DC, 20547. SUBSCRIPTIONS: Within the United States, annual subscriptions or single copies of Problems of Communism may be purchased from the Superintendent of Documents, US Government Printing Office, Washington, DC, 20402. Price per copy: $1.20. Subscription price: $6.90. Outside the United States, Problems of Communism may in most cases be obtained free of charge by writing to the nearest office of the United States Information Service. The journal can also be ordered directly from the US Government Printing Office for foreign mailing, at a price of $1.50 per copy and $8.65 per subscription. COPYRIGHT: Reproduction or republication of texts from Problems of Communism Is permissible, and no claim of copyright is asserted. However, the Editors request that they be advised of reprint usage and that source credit be given both to the authors of individual articles and to Problems of Communism. Should textual Items in the journal ever be subject to a claim of copyright, such claim will be clearly stated. Graphics and pictures which carry a credit line are not necessarily owned by Problems of Communism, and users bear responsibility for obtaining appropriate permissions. INDEXING: Articles in Problems of Communism are indexed, inter alia, in the Social Sciences and Humanities Index, the Bibliographie Internationale des Sciences Soclales (alt sections), and ABC POL SCI. he Dialectics of Nationalism the USSR y Teresa Rakowska-Harmstone he KAdbr Mystique y Charles Gati he Unique Role of the Swedish CP y Daniel Tarschys Ilende in Retrospect y Paul E. Sigmund wo Views of Stalin y Harrison E. Salisbury ulag: A Chronicle f Soviet Extralegal History y Robert Sharlet our Ambassadors, Three Decades, wo Questions y Jean L. Laloy uperpower Relations in the Postwar Era y Clifford P. Hackett oscow's Alignments In the Third World y Roger E. Kanet land: The Pangs of Progress y George Kolanklewicz ver: Mamad Illchiev, chief sheepherder of the Frunze Ilective Farm In the Khodzhent Region of Tadzhikistan. speeds to work. A May 1974 photo by A. Kuzyarin for TASS via Sovfoto. EDITOR: Paul A. Smith, Jr. MANAGING EDITOR: Marie T. House ASSOCIATE EDITORS: Clarke H. Kawakami, Wayne Hall, David E. Albright DESIGNER: Joseph D. Hockersmith Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Allende in etrospect CPYRGHT By Paul E. Sigmund World attention has moved away from Santiago since the bloody overthrow of Salvador Allende last September, but the questions that were raised at that time still need answering. Where should the primary responsibility be placed for the tragic events on and after September 11, 1973? Was it, as the Left contends, the result of a4 fascist counterrevolution aided and abetted by the forces of imperialism? Was it, as the Right asserts,. the only available response to Allende's attempt to establish the dictatorship of the proletariat by a mixture of guile and force? Did it mark the "death of a dream" of the establishment of socialism by democratic means, and was it thereby one more demonstration that Marxism must use force to ac- complish its goals? Were there internal and external political and economic factors which made it im- possible for Allende's experiment to succeed, or was the downfall of the Unidad Popular (Popular Unity) coalition government the consequence of a series of ideologically-influenced analyses and mis- taken policy choices which, if they had been differ- ent, might have produced another result? A review of the course of the Allende government with the aid of the considerable new material that has be- come available in recent months may help to answer these questions. Allende's opponents never tire of pointing out that he was elected with only 36 percent of the vote in a three-way race.' What they do not mention is that in the congressional run-off between the two front-running candidates he was elected president by a lopsided majority vote of 135-35. He received the support of the centrist Christian Democratic Party (PDC) in the run-off in return for his agree- ment to the adoption of a Constitutional Statute of Democratic Guarantees protecting freedoms of ex- pression, education and religion, and guaranteeing the independence of the military from political con- trol. The text of the statute, which was added to the Chilean Constitution shortly after Allende's elec- tion, reflected the fears of non-Marxist groups that the new Marxist President would use the consider- able wer of the 'ilea a ecu i e Mpproved or ~e'feasl~ 1-91'~`~~9- eventually destroy all opposition to a Marxist take- over. Political and Economic Strategy When he took office, Allende promised that he would follow a "second model" of Marxism-the via Chilena to socialism, "with meat pies and red wine." To prove that this model was "anticipated by the classics of Marxism," he quote from Friedrich Engels on the possibility of ... a peaceful evolution from the old society to the new in countries where the representatives of the people have all power and in accord with the consti- tution can do what they desire when they h ve the majority of the nation behind them.' Yet it was precisely the question of majority sup- port that was Allende's central problem in is de- sign to carry out a peaceful transition to "socialism with democracy, pluralism and liberty." The parties in his coalition were in a distinct minority in the Congress, and although there was no doubt about the legitimacy of his election by that body, his victory had only been possible because of the conditional support of the Christian Democrats. The PDC, it should be noted, included both Radomiro omic, the party's 1970 presidential candidate, who had gone to Allende's house to congratulate hi the day after the popular election, clearly inferri g his future support, and conservatives like Senato Juan de Dios Carmona, who had fought within the party to prevent it from voting for Allende in the r in-off. In the immediate aftermath of the election th PDC was controlled by the Tomic forces, who claimed to be in favor of "communitarian" socialism, ration- alization of copper, acceleration of agrarian reform, and reduction of Chile's dependencia on the nited States. One way, then, for Allende to achieve his acknowledged goal of majority support fo the transition to socialism would have been to ry to emo- ? Approved For Release 1999/09/02 : CIA-RDP79-01194A00010055t9 BHT crats on the. points in his program with which they were in agreement. This. might have provoked the secession of some of the rightist members of the PDC, but if an accord had been reached with the party's leaders, it would likely have given Allende a, majority in the Congress for at least part of his program. Flushed with victory and unwilling to come to terms with the party which he had termed "the new face of reaction" during the campaign, Allende chose an alternative strategy. The next congressional elec- tions were not scheduled to take place until March 1973, but the Chilean Constitution provided that in the event of a conflict with the Congress over the text of a constitutional amendment, the President could call a national plebiscite. The strategic course adopted by Allende was to attempt to expand popu- lar support for his coalition and then propose a constitutional amendment which, in accordance with the Popular Unity electoral program, would replace the existing bicameral legislature with a unicameral house, to be elected immediately following the ap- proval of the amendment.. The Congress would be certain to reject the amendment, but if Allende had the support of a majority in the country, he could win the plebiscite and secure control of the unicameral legislature that would then be estab- lished. Allende's strategy for the expansion of electoral support was an economic one which drew as much from John Maynard Keynes as it did from Karl Marx. The Chilean economy, already operating below capacity, had gone into a profound recession as a result of Allende's election. The response of Pedro Vuskovic, Allende's Minister of Economics, was to "prime the pump." by adopting a deficit budget, in- creasing public expenditures, and redistributing in- come by skewing the annual wage readjustment for the preceding year's inflation (35 percent in 1970) in favor of the low-income sector of the population (the lowest income groups received a 40-percent in- crease). The utilization of unused industrial ca- pacity, combined with strict enforcement of price controls, more stringent collection of taxes, and re- fusal to devalue the Chilean escudo in relation to the dollar, were expected to contain possible infla- tionary pressures which might result. (The Allende government also had a cushion of nearly $400 million in foreign reserves left to it by the Frei government as a result of high international prices for copper, Chile's principal export.) The strategy also contained a Marxist element accentuation of the class struggle. At the same time that appeals were made to the pocketbooks of the lower-class. Chileans, there was also to be an effort to increase their class consciousness (concienti- zacion) through government publications and the use of the media to remove the elements of "false consciousness" instilled by "bourgeois" propaganda. Expressing the diametric opposite of a claim often voiced by his predecessor, Eduardo Frei, Allende said in a press conference just after his installation, "I am not president of all Chileans." And in his first "State of the Nation" message to the Congress he asserted: . .. the People's Government (Gobierno Popular) is inspired in its policy by a premise that is artificially denied by some-the existence of classes and social sectors with antagonistic and opposing interests.' Allende's economic advisers anticipated an addi- tional source of revenue for the government from the "exploitative" profits of the industries that were to be nationalized by the new government. The par- tially American-owned copper mines were to be taken over by a constitutional amendment-both to lay to rest any legal doubts about the reversal of the Frei Chileanization agreements of 1967 and 1969, and because a general consensus in Chile favored nationalization.' Other companies were to be rationalized after a controlling interest was gained through the purchase of shares on the open market by the government development agency. The latter course seemed facilitated by the fact that the price of shares had been depressed since the elections, and further economic pressures could be created by allowing wage increases but forbidding any rise in prices. The legal adviser to the government, Eduardo Novoa, also outlined other "legal loopholes" in existing Chilean law which could be used for "temporary" takeovers of companies, including "intervention" because of labor disputes and "requi- sition" because of a "breakdown in supply of an article of prime necessity." The takeover of large sectors of Chile's basic industry and trade, as promised in the Popular Unity program, was thus seen as an essential part of an economic and political strategy aimed at achieving and maintaining power. Combined with a rapid acceleration of agrarian reform (again using existing legislation-the 1967 agrarian reform law-but ex- ploiting provisions such as one authorizing the expropriation of "abandoned or badly-farmed land," with one percent payment in cash and the rest in bonds), the planned takeover, meant that even if the effort to create a unicameral left-dominated legislature failed, the Allende government could destroy the economic base of the "capitalist" oppo- sition through a series of "irreversible" faits accom- plis (hechos cansumados) which would give the Approved For Release 1999/09/02 CIA-RDP79-01 194A000100550001-5C government control of the economy and of the excess profits that the private sector had used for luxury consumption or had sent out of the country as profit remittances to foreign companies. At the same time, the fact that the policy remained within the letter, it not the spirit, of the law meant that intervention by the military was unlikely. Allende's constitutionalist and legalist strategy was not universally accepted within his coalition. Most of his own Socialist Party-beginning with its newly 'elected General Secretary, Senator Carlos Altamirano-and several other groups further to the left, such as the MIR (Movimiento de la lzquierda Revolucionaria-Movement of the Revolutionary Left) and the VOP (Vanguardia Organizada del Pueblo-Organized Vanguard of the People), were openly doubtful about the wisdom of relying on elec- tions and "bourgeois legality" to achieve power and advised preparation for an armed confrontation with the forces of reaction, which they foresaw as inevi- table. Allende's effort to portray the transition to socialism as peaceful in character was not assisted by the publication of his conversations with French revolutionary theorist Regis Debray in early 1971. In these, Debray declared that "in the last analysis and until 'further notice, political power comes out of the end of a gun," and Allende repeatedly stated that his differences with apostles of violence like Che Guevara were only "tactical," because the Chilean situation required that he observe legality "for the time being." Allende himself organized an armed personal bodyguard, the so-called GAP (Grupo de Amigos Personates), and--we now know-as early as December 1971 received reports on the illegal importation and distribution of arms to the MIR and to his bodyguards.' While there were thus intermittent hints of revo- lutionary alternatives, Allende's basic.. economic strategy was "socialist consumerism," ` combined with a rapid expansion of state control in industry, trade and agriculture, and his basic political strategy was an expansion of the electoral base of the Allende coalition by an appeal to the material interests and the class consciousness of the lower classes. It was the interaction of the various elements of this politi- cal and economic strategy that finally produced the breakdown of Chilean constitutionalism and the intervention of the armed forces that the extreme left of the Allende coalition had been predicting all along. Initial Success At the outset, the new economic policy was astoundingly successful, although it had within it the seeds of future disaster. Income redistribution stimulated demand, while price controls and an arti- YRGHT icia y low exchange rate kept prices down. As a consequence, a. mini-boom ensued. By March 971 the Sociedad de Fomente Fabril (Association for the Development of Manufacturing), representing Chilean business and industry, admitted that pr duc- tion had increased by 6.3 percent over the figure of '12 months before, and by May that figure had reached 13.5 percent. The Institute of Economics of the University of Chile later reported that unem- ployment in the Santiago area dropped fro 8.3 percent in December 1970 to 5.2 percent in June 1971 and declined further to an unusually to 3.8 percent by the end of the year. The Consumer rice Index stopped climbing entirely in December 970 and had only increased by 6 percent by the time of the municipal elections of April 1971-its lowest rise in many years. At the same time, salaries and wages increased by 27 percent in real terms. This wave of economic prosperity-combined with the absence of the political repression that some rightists had predicted would result from a victory by the Marxists-led many, particularly in low income groups, to vote for the candidates of the Popular Unity coalition in the April municipal elec tions. Allende's own Socialist Party bettered its elec- toral showing in the 1969 congressional elections by nearly 100 percent (a jump from 12 percent to 22 percent of the total), and the candidates of al the parties supporting Allende received about 50 per- cent of the vote, as compared with the 36 pe cent which the President himself had received only even months before. Yet, gratifying as the results were, the coalition was still a few votes short of the bso- lute majority that Allende required to win a plebi- scite on a constitutional amendment. He was later criticized for not calling the plebiscite at the time when the regime's popularity was at its highest point,' but in retrospect it does not appear at all certain that he would have won-particularly since by the time that the constitutional prerequisites for such a vote had been fulfilled, the economic and political situation would have been much less favor- able. The period after the municipal elections no ap- pears to have been crucial for the long-term su ival of the regime. The Right was still in disarray, the Christian Democrats had elected a compromise leadership which was not committed to either the party's wings, and the short-run economic and oliti cal indicators were favorable. Yet, instead oft king action on the economic front to stem the loss of foreign reserves and to dampen inflationary res- sures-and on the political front to prevent the movement of "the Christian Democrats into an alli- ance with the right-wing opposition partie the regime continued its previous policies, confidently assuming that in the long run "the people" would Approved For Release 1999/09/02 : CIA-RDP79-01 194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-JPYRGHT support it and ignoring the warnings of "bourgeois" economists that the loss of foreign reserves, the ex- pansion of demand, and the sharp decline in invest- ment would produce disastrous consequences in the following year. Political Polarization The hardening of the Christian Democratic posi- tion began in mid-1971. It was accelerated in June by the assassination of the former Christian Demo- cratic Interior Minister, Edmundo Perez Zujovic, by extremists, at least one of whom had been released from prison by Allende upon his accession to power. A month later in a by-election in Valparaiso, the victorious Christian Democratic candidate received the support of the Right. The tacit alliance with the Right led to the secession from the PDC of eight deputies and a number of other party leaders to form the pro-Allende lzquierda Cristiana (Christian Left). This was counterbalanced however, by a split in the other direction within the Allende coalition. Five of the seven Radical senators (including two former presidential candidates) and 7 of the 19 deputies left the Radical Party (PR), and formed the Partido de la lzquierda Radical (Party of the Radical Left- PIR) in protest against the Marxist orientation of a PR c ;!icy resolution which the dissidents described as ' c; mplete!y removed from the characteristic and distinctive ideology of our party" and opposed to "the interest of the middle social strata" whom the party had always represented! For a time, the PIR continued to support the Allende government, but within a year it had entered the ranks of the opposi- tion. In July 1971, the Christian Democrats had voted in favor of the constitutional amendment national- izing the copper mines, but from that point forward, the pattern was one of polarization of Chilean politics and society into two opposing blocks. The Allende forces controlled the executive and pursued an in- creasingly vigorous ideological purge of those who were not entirely sympathetic to the government. The opposition controlled the legislature, and in October 1971 the Christian Democrats and the rightist parties attempted to assert legislative con- trol over the expansion of the public sector by voting in favor of a constitutional amendment limiting the use of the intervention and requisition procedures and requiring that all transfers of private enterprises to the "social" or mixed sectors be carried out in accordance with specific legislation adopted by the Congress. This legislative act, referred to as an amendment on the "Three Areas of Property,". be- came the focus of a continuing deadlock between the President and Congress that lasted until Allende's overthrow in September 1973. Allende's refusal to accept the amendment or to call a plebiscite to resolve his differences with the Congress appeared to the congressional opposition to be a decisive indication of his determination to bypass the legislature in carrying out the Popular Unity program, and from the time of the adoption of the amendment onward, the Christian Democrats began to cooperate with the rightist parties in op- posing the executive. One method was to impeach ministers for violation or (more often) nonenforce- ment of the law. The first of many such impeach- ments took place in January 1972. Another method was to present a united electoral front against the government. Informal cooperation between the rightist parties and the Christian Democrats led to striking victories in two by-elections in January 1972, and a month later these groups formed the Demo- cratic Confederation (Confederaci6n Democratica- CODE) to prepare joint lists for the 1973 congres- sional elections. A third area of cooperation was in marches and demonstrations against the government, the most famous of which was the March of Empty Pots in December 1971,, in which thousands of housewives, mostly of middle-class background, marched, banging pots to protest food shortages. Those shortages had developed because the pre- dicted economic difficulties resulting from the Vuskovic policy began to emerge in late 1971. The balance-of-payments surplus had been depleted at such an alarming rate (in 1971 there was a deficit of $315 million, while in 1970 there had been a surplus of $91 million) that in November 1971 the Allende government called a moratorium on payment of its foreign debts. Chile had already experienced difficulties in securing loans from the Inter-American Development Bank, the World Bank and the Export- Import Bank as a result of its failure to compensate the Anaconda and Kennecott copper companies for the nationalization of their major mines. The debt moratorium was bound to make it considerably more difficult for Chile to secure foreign credits, particularly for the short term.' In December 1971, the Chilean government finally permitted a partial devaluation of the Chilean escudo so as to decrease the distortions created by its overvaluation, but this created pressure on prices of goods manufactured with imported components. Shortages of certain food items-especially cooking oil, detergents, sugar, toothpaste, and cigarettes-were ascribed by the government to upper-class hoarding and to increased consumption by low-income groups; however, the dislocations in the countryside associated with the very rapid expansion of the agrarian reform (Allende took over almost as much land in his first year in office as Frei had in six years) clearly had something to do with the problem as well, and the situation Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 C could be expected to get worse with the harvest In early 1972. A 100-percent increase in the money supply as a result of the government's deficit spend- ing was also beginning to produce inflationary pres- sures now that the unused capacity of Chilean indus- try had been taken up by the 1971 expansion. Most important, a sharp drop in investment (Allende said it had declined by 7.7 percent, but opposition economists claimed it had fallen by 24.2 percent) meant that the spectacular growth rate achieved in 1971 would be sharply reduced in 1972. Yet the degree of the incipient crisis was not Immediately evident from the figures for 1971. In- dustrial growth had reached 8.3 percent, agrarian production (based on plantings before Allende's accession to power) had increased by 5.3 percent, and unemployment had dropped to record lows. The Communist Party in a report to a Popular Unity "conclave" in early 1972 warned that "very strong inflationary pressures could make our situation acute," but the government took no action to deal with the problem. The continuing optimism of gov- ernment policymakers at this time was expressed at a Round Table in Santiago sponsored by the Uni- versity of Sussex and the Chilean Planning Office in March 1972. In the course of discussion Radomiro Tomic, the defeated Christian Democratic presiden- tial candidate, asserted that the Allende government had committed a "fatal political error" in failing to establish an "institutional majority" in the Congress through a "far-reaching agreement between socialists inspired by Christianity and those inspired by Marxism-that is, between the Christian Democrats and Popular Unity-in the period following the 1970 presidential election." Allende's representatives con- fidently replied that "with a gradual heightening of the political consciousness of the proletariat, there seemed to be no obstacles in the internal logic of the Chilean bourgeois state to prevent the workers' winning sufficient strength to gain control of the legislature as well as the executive." '? On the political front, there were individuals and groups on both sides who attempted to stem the movement toward polarization, which they correctly foresaw would lead to the breakdown of Chilean institutions. Two important efforts to arrive at a com- promise on the issue of the constitutional amend- ment on the "Three Areas of Property" were made in the first part of 1972. In April the Left Radicals, who had entered the Allende government in January, carried on lengthy negotiations with the Christian Democrats to hammer out a satisfactory agreement on this issue, only to have it rejected by the top command of the Popular Unity coalition parties. The Left Radicals responded by leaving the government and joining the opposition, a move Allende described PYRGHT tions in June between the head of the Christi n Democratic Party and Allende's Minister of Justi e broke down when the time limit set by the Christi n Democrats expired and the PDC leadership refus d to extend it. The two sets of negotiations seem to have col- lapsed for related reasons. In April the left wing of the Popular Unity coalition was unwilling to accept a compromise which would slow down or stop t e forward movement of the government nationalizati n program, while In June the right wing of t e Christian Democrats could point to an impends g by-election in mid-July as a reason for discontinuing discussions. Both cases illustrated a general prob- lem posed by the Chilean multiparty system. Once political conflict became polarized, the extremes held the rest of the opposing coalitions hostage and prevented what could have been a convergence of views in the center. The negotiations were interspersed with a ser es of demonstrations and counterdemonstrations by the government and the opposition which always stopped just short of open violence. Several ob- servers, including the American Ambassador to Cri!e, Nathaniel Davis, remarked on the pattern of "brinkmanship" that the Chileans exhibited.12 So ial and political tensions increased-but as long as economic deterioration was not reflected in runa ay inflation, the Chilean political system seemed able to contain them. The Turning Point The strains in the system only became unman- ageable in mid-1972, when the lid blew off he fragile Chilean economy and let loose the pressures that had been building up for at least a year. As he deficit in government spending rose, particul rly because of its subsidies to the "social area," its foreign reserves dropped nearly to zero, and he growth of industrial output slowed down. Allende replaced Economics Minister Vuskovic with Ca los Matus and appointed Orlando Millas as Fina ce Minister. The Matus-Millas team sought to "find stability at another level," ordering a drastic ur- rency devaluation, raising prices in the nationalized sector, and permitting limited agricultural price in- creases. The result was a sharp jump in the cost-of- living Index, which climbed from 27.5 percent at the end of June to 99.8 percent at the end of September. A wage readjustment to compensate for the Increase in the cost of living only accelerated the inflation, so that by the end of the year the official consumer price index had reached 163 percent (see Table 1). In September, industrial output began to drop in as "a staykklor ieei9b9Fo9 02 : ~~A 1 -C 1 ~4~4[0@l@~'d0 30~00~1 tge ate Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001 E PYRGHT of increase)-a drop that continued every month thereafter until the September 1973 coup." Agri- cultural production (excluding livestock) also com- menced to decline, and mineral production regis- tered precipitous drops, although copper production rose by 1.3 percent for 1972 owing to the fact that had been forbidden to inspect. 1`) The judiciary joined in the conflict, protesting the failure of the Ministry of Justice to carry out court orders, while progovernment demonstrators denounced the viejos de mierda-"filthy old men"-in the Supreme Court. As it became apparent that there was no real a number of new mines came into operation. (On possibility of resolving their differences, the two other elements of the worsening economic situation, sides turned to the armed forces as impartial arbi- see Table 2.) ters, and the national holidays in mid-September Chile's economic problems were paralleled in the 1972 were marked by rival efforts of the Congress political arena. Several additional ministers were and the President to ingratiate themselves with the impeached, including the Minister of Interior, who military. was charged with abetting the illegal importation The political involvement of the military was of arms from Cuba in March. (The Allende govern- accelerated by the next step in the Chilean tragedy- ment claimed that suspect shipments from Cuba- the October 1972 strike. Respectively termed the "bultos Cubanos"-were "works of art," but after "employers' lockout" and "the national strike" by. the September 1973 coup, the government White pro- and anti-Allende forces, it began far from Book published an inventory of over 2,000 pounds Santiago, in the remote southern province of Aysen, of arms sent from Cuba in 13 crates which customs with a strike by small truckers. (Referred to by the Table 1: Monthly Fluctuations in Consumer Prices government press as the "truck-owners," the mem- and Industrial Output under Allende bership of the truckers' gremio-guild-was almost 1970 Oct. 35,6 -8.0 Nov. 35.3 4.3 Dec. 34.9 -0.3 1971 Jan. 28.1 -4.5 Feb. 22.8 -7.3 March 20.1 6.3 April 20.2 1.6 May 21.0 13.5 June 21.1 10.7 July 19.1 6.7 Aug. 17.4 10.7 Sept. 15.6 25.5 Oct. 16.5 22.6 Nov. 18.8 22.1 Dec. 22.1 19.5 1972 Jan. 24.8 18.5 Feb. 32.0 11.9 March 34.0 10.2 April 38.1 12.6 May 40.0 11.4 June 40.1 2.5 July 45.9 5.0 Aug. 77.2 3.6 Sept. 114.3 -7.8 Oct. 142.9 -7.7 Nov. 149.9 -8.1 Dec. 163.4 -11.1 1973 Jan. 180.3 -6.8 Feb. 174.1 -4.7 March 183.3 -2.8 April 195.5 -11.3 May 233.5 -11.0 June 283.4 -14.8 July 323.2 -10.7 Aug. 303.6 -11.9 Sept. 286.0 -22.9 Oct. 528.4 18.0 Nov. 528.9 5.1 e Percentage of change from the same month of the previous year. SOURCE: Instituto Nacional de Estadisticas (National Institute of Statistics),, Santiago; Sociedad de Fomento Fabril. (A i ti ot e oeveiopmeAplpi' iforaRe4ease 1 N[ entirely composed of owners of one or two trucks who feared an announced plan to establish a state trucking agency which would have had priority access to new trucks and spare parts). The strike quickly spread across the nation, as the truckers were joined by bus and taxi drivers, shopkeepers, doctors, nurses, dentists, airline pilots, engineers and part of the peasantry. The Christian Democrats and the rightist parties supported the strikers, and the work stoppage dragged on for over a month resulting in an estimated loss of $150-200 million in production. Agriculture was particularly hard hit because the strike took place in the midst of the planting season; indeed, there is no doubt that part, though not all, of the 25-percent drop in the 1973 harvest was the consequence of the strike. Industry was. not as adversely affected, since workers at- tempted to keep factories going despite manage- ment's efforts to cease production-and the October strike saw the emergency of "Industrial Belts" (Cordons) and "Communal Commands," which seemed to embody the type of spontaneous "popular power" that leftist theorists had spoken of as the basis of a genuine revolutionary class consciousness to replace the materialistic "economism" that had characterized Chilean workers until this time." When the workers seized closed factories, the plants were usually "intervened" by the government, so that an important result of the October strike was a considerable expansion of the government-controlled sector of industry and trade. The most important outcome of the strike, how- ever, was the direct involvement of the military in the Allende cabinet. A condition of the settlement of the strike was that the military take over key cabi- net posts. This resulted most notably in the assign- ment of the Ministry of the Interior to the Com- CIA der-in-Chief 1194A000i ~~rle ~I0 ar1(;s Prats, Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001C'RGHT Table 2: Some Indices of the Chilean Economy, 1970-72 ross domestic product (% change) vestment (% change) eal wages and salaries (% change) ports ($ million) mports ($ million) 3.7 8.3 1.4 8.6 -24.2 8.5 13.0 30.0 9.0 1129 1045 853 1020 1124 287 OURCE: Department of Economics, University of Chile. so as to assure that the congressional elections scheduled for March 1973 would be carried on freely and impartially. The involvement of the military and the prepara- tions for the March elections brought about a lull in the escalation of political conflict in Chile. Inevi- tably, however, it also produced political divisions within the military itself, which had hitherto been relatively aloof from the process of polarization. It was soon apparent, for instance, that General Prats was willing to give the government the benefit of the doubt in nearly every instance that its decisions or actions were challenged. Conversely, the Navy was noticeably less enthusiastic, and in January Admiral Ismael Huerta resigned from the cabinet over plans for the initiation of what he took to be a food-rationing system. It is now also known that the first plans for a possible coup were made by intermediate-level officers at the end of 1972." Food distribution became a critical issue as the black market continued to expand, with much of Chile's agricultural production going into illegal channels because of the government's refusal to increase the official prices paid for agricultural pro- duce. The result was, in effect, two separate price systems-a subsidized, state-owned distribution system oriented primarily toward the low-income groups and a flourishing black market aimed at middle- and upper-income groups. The expansion of the powers of government-appointed Supply and Distribution Committees (JAPs) to deal with the black-market problem led the opposition to charge political manipulation of food distribution; nonethe- less, the government seemed powerless to combat black-market operations. The March 1973 Elections The congressional elections in March did not re- solve anything. Chile's right-wing parties had hoped that food shortages and economic difficulties would produce a two-thirds majority against the govern- ment, which might in turn permit the impeachment most observers had preaicted. The oppo ition pointed out that the vote of the pro-government forces had declined from the 50 percent the had registered in the 1971 municipal elections, while the government compared its 44 percent with the 36 percent that Allende had received in 1970. In fact, the only proper basis for comparison was the 1969 congressional elections. On that basis, the leftist parties had suffered a slight loss in votes but had achieved a slight gain in seats. Certain o posi- tionists later argued that the Left would have suf- fered much greater losses had it not been for a government-assisted electoral fraud involving some 200,000-300,000 votes, but the statistics presented in support of the argument are unconvincing. ' While the government's interpretation of the elec- tions as proof that it was expanding its popular sup- port was not accurate, the election results indicated that at least it had not lost popularity as rapidly as previous governments faced with similar economic reverses. Despite a wage readjustment in 0 real wages had declined 7 percent in 1972, a ing inflation continued to consume the wage in in early 1973. However, the combination criminatory distribution of government-pr goods and appeals to class consciousness see nave stemmed the erosion of support, at least the masses of the poor. Unfortunately for the government's iongei interests, the deliberate accentuation of consciousness had an opposite effect on the class, driving middle-class areas to organize selves into "Neighborhood Committees" to d rag- rease f dis- ed to -range class middle them- defend any to which themselves. It also, for the first time, led rrh arm themselves for a possible confrontation seemed more likely now that the safety valv impending election was no longer present. A goy tment nimu ernment proposal to limit full wage readjul to those making less than three times the m wage did nothing to reassure the hostile income groups. Before the elections, it had been rumor ed tha at a opposi there might be another attempt in Marc! accommodation between the regime and the tiori forces, possibly under the auspices of th quicki an anti-government majority of 56 percent, gave revented by the publication, two days a ter th the AAI( ilF0 Itfifftsea1199'91'09It0 CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-8PYRGHT elections, of a government decree calling for the initiation in June of a single national unified school system, which would follow a common curriculum including compulsory courses in socialism and work periods in factories. The ensuing uproar involved ,,;F Catholic Church for the first time in formal oppo sition to the government and mobilized thousands of secondary-school students in violent demonstra- tions in downtown Santiago. Stories of fierce argu- ments over the school proposals among the top military officers (the military had left the cabinet after the elections) filtered into the national press, and a military delegation held a formal meeting w.w1ith the Education Ministry to express their opposi- tion. The controversy subsided only when the gov- ernment announced that the proposal had been postponed, pending further discussion. Within the government, the debate continued on whether to "consolidate in order to advance" (the Communist position) or to "advance without com- promise" (the Socialist stance). One indication of how the debate was resolved was the decision by the government to use a constitutionally-authorized "decree of insistence" allowing the cabinet to over- ride the rulings of the Controller General of Chile, Hector Humeres, who had disallowed the requisi- tioning of some of the factories taken over during the October 1972 strike. Conflicts also continued with the judiciary over the executive's refusal to obey court orders to return seized properties. On May 26, the Supreme Court sent a public letter to the President denouncing . . . the illegal attitude of the administration . . . [its] open and continual rebellion against judicial orders ... which signifies a crisis of the rule of law [and] the imminent breakdown of the juridical struc- ture of the country." The stalemate between the executive and the Congress over the constitutional amendment on the "Three Areas of Property" was compounded when the Constitutional Tribunal refused to take jurisdic- tion over the disputed question of whether, in the absence of a plebiscite, the Congress could override the President's item vetoes by a majority or by a In May the official price index jumped 20 percent, indicating that the inflation. was moving into a new hyperinflationary stage. The one effort that the gov- ernment had made to hold the line-its refusal to grant a full cost-of-living wage increase to the El Teniente copper miners on the grounds that under their contract they had already received partial cost- of-living increases-led to a bruising two-and-a-half month strike, which included a miners' march on Santiago, mass rallies, and simultaneous one-day general strikes for and against the government in mid-June. By that time, Allende was once more ready to resort to military involvement in the cabinet to restore social peace. Last Stage-Decline and Fall On June 29, the last act of the Chilean tragedy began with an abortive revolt by the Second Armored Regiment. in Santiago. Apparently, several army units had been in contact with Patria y Libertad, a right-wing political organization, and had planned to seize President Allende at his residence and to occupy the presidential palace. The revolt was canceled one day before it was to occur, but when one of the officers of the Second Armored Regiment was arrested and held in the Defense Ministry, the Regiment decided to free him and in the process to seize the presidential palace as originally planned. General Prats, the Army Commander, used the other military units in Santiago to put down the revolt in a few hours-most of which were spent in negotia- tion rather than shooting-but not before President Allende had gone on the air to urge "the people" to take over all industries and enterprises as a response to the uprising of "a small group of rebellious mili- tary men." The Central Labor Federation also urged the workers to occupy the factories, and in one day the number of companies taken over by the govern- ment rose from 282 to 526. The "Industrial Belts" that had sprung up at the time of the October strike now achieved new importance. The spread of "peo- ple's power (poder popular) had been seen by Allende as a deterrent to a possible future coup, but it created many additional problems for the two-thirds vote." A second constitutional conflict , government. Production declined sharply after the along the same lines developed when the opposition takeovers, the opposition got fresh fuel for its claim majority in Congress voted in favor of an amendment that the expansion of state control of industry was to give farms under 40 hectares (about 100 acres) in size an absolute guarantee against expropriation and to compel the distribution of land in the "re- formed" sector to the peasantry after a transitional period of two years. (The government had once again used a loophole in the 1967 law to postpone in- definitely the distribution of expropriated land by individual title.) being carried out through extralegal channels, and "poder popular"-as expressed in the worker occu- pations-appeared to some extent to pose a possible threat of an alternative to the power of the central government After the June 29 revolt, Allende made new efforts to secure military involvement in the government, but his negotiations with the armed forces were Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001- FIYRGHT unsuccessful.'? Instead, they embarked on a policy of vigorous enforcement of the Arms Control Law, a measure which had been adopted in October 1972 but only sporadically enforced thereafter. This law authorized any military or police commanders to carry out arms searches if there was "a presumption of the clandestine existence of illegal firearms." _' The right-wing Patria y Libertad organization had now announced publicly that it was going under- ground in an attempt to overthrow the government by force, and military intelligence was also aware of the initiation of arms training by all the govern- ment parties, even the centrist Radicals." In the course of their crackdown, the military found arms caches in factories in Santiago and Concepcion, and the killing of a worker in one such arms raid pro- voked protests from the leftist parties. At this point, the Chilean Communist Party and the Catholic Church both concluded independently that the only solution to the impasse in Chile was one more attempt at an agreement between the Allende government parties and the Christian Demo- crats. The Communists initiated a campaign against civil war almost simultaneously with a statement by the Chilean hierarchy calling for a renewal of dia- logue. Probably in response to these pressures on both sides, two lengthy discussions took place on July 31 between UP and PDC representatives. Both Allende and the Christian Democrats agreed on the necessity of enforcement of the Arms Control Law, but disagreement continued on the constitutional reforms. Allende offered to sign the amendment on the "Three Areas of Property" in return for a con- stitutional amendment specifying that the Congress could only override presidential vetoes of constitu- tional amendments by a two-thirds vote. He also proposed the establishment of joint committees to work out further agreements. However, the Christian Democrats denounced these proposals as "dilatory" and broke off the negotiations. A few days before the dialogue was initiated, the truckers began another strike, which was to last from July 26 until the coup on September 11. As in October, the truckers were joined by the other grernios. Coming at. a time when the 12=month inflation rate, fueled by massive government budget deficits and subsidies to the nationalized industries and agriculture, had reached 323 percent-and in a situation where inventories had not yet been built up from the October strike-the truckers' action created much more serious problems for the govern- ment than the earlier strike. This new crisis once again raised the question of military participation in the cabinet, and General Prats persuaded. his fellow commanders that it was their patriotic duty to re-enter the cabinet in order to settle the strike. On August 9 Allende swore in what he called a "national security cabinet," with General Pr is as Defense Minister, Air Force Commander Cesar Ruiz as Minister of Transport (the ministry which would deal with the striking truckers), and the heads of the Navy and of the National Police in other cabinet posts. Almost coincident with the entrance of the mil- itary into the cabinet, the naval establishment be- came involved in a serious conflict with the let wing of the Allende coalition. On August 7, the naval intelligence arm announced the discovery of plot to carry out an enlisted men's revolt on August 11 in Valparafso and Concepcion. The announcement accused PS Secretary General Carlos Altam rano, MAPU leader Oscar Garreton, and Miguel Enriques, head of the MIR, of being the "intellectual authors" of the revolt and demanded the lifting of the con- gressional immunity of the first two, who sat respec- tively in the Senate and the Chamber of Deputies. Two days before the September coup, Alta irano admitted that he had encouraged navymen to resist their coup-minded (golpista) officers." This attempt to subvert the hierarchy of a service command from below was combined with maneuvers by Allende to replace officers unsympathetic t him. When General Ruiz resigned his cabinet pot on August 17 in protest against his lack of sufficient power to settle the strike, Allende compelled him to add that his departure from the cabinet "im- plicitly" carried with it his retirement as Air Force Commander. This was correctly seen as an Allende tactic to remove an officer opposed to him, and it met serious resistance from within the Air orce, provoking a series of actions which ultimately led directly to the September 11 coup. On August 20, top Air Force officers met to decide whether to resist Allende's action. By evening, Ruiz had persuaded them to accept it on the condition I that Allende appoint the second-ranking officer, General Gustavo Leigh, as Air Force Commander and name another Air Force general to the cabinet (so that Allende could not repeat the same man uver with Leigh). The next night the wives of high-ra king military officers, including those of six generals, gathered in front of General Prats' house to present a letter asking for his resignation. When the demon- stration was broken up by police tear gas, i pro- voked such dissension in the armed forces th t on the following day General Prats decided to resign both as Defense Minister and Army Commander. He was joined by two other generals who, with rats, had led the military forces that had quelled the tank-regiment revolt in June. The resignation of what appeared to be the last defenders of Allende in the army now mean that Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001 tPYRGHT all three services were opposed to the President. It coincided with the adoption on the same day of a "sense of the house" (acuerdo) resolution by the Chamber of Deputies directed at the President and the military ministers, drawing their attention to "the serious breakdown of the constitutional and legal order." " The resolution criticized the Allende government for repeatedly bypassing the legislature through the use of legal loopholes and for refusing to promulgate the constitutional reforms voted by the Congress. It accused Allende of ignoring judicial orders, encouraging illegal seizure of property, perse- cuting opposition labor groups, and supporting illegal paramilitary organizations. In conclusion, it stated that the listed actions constituted a "serious breakdown of the constitutional and legal order of the Republic" and urged the military ministers to "put an end to the de facto situations listed above which violate the Constitution and the law" or be gufity of "compromising the national and profes- sional character of the armed forces." In its original form, the resolution had declared the Allende government to be illegitimate, but the acuerdo had later been softened in order to secure the support of the Christian Democrats. Yet its effect was still to give a congressional green light to the military, and Allende immediately so interpreted it. He replied to the motion by accusing the Congress of "promoting a coup d'etat by asking the military forces to make governmental judgments inde- pendently of the authority and direction of the President"; he also pointed out that according to the Constitution the only way that the Congress could decide on the legality of the President's con- duct of his office was through impeachment by a two-thirds vote.'' The congressional vote was echoed by several professional associations. The Medical Association called on their "colleague" Allende to resign-a request that was echoed by the Federation of Pro- fessionals (CUPROCH)-and resignation petitions were circulated in Santiago. The Lawyers' Association issued a declaration which-"without attributing a malevolent intention" to the President-asserted an "incompatibility between the institutional framework within which he is supposed to exercise his office and the actions which he feels obliged to carry out in his program." Arguing that Allende "would appear to be incapacitated (impedido) in the exercise of his functions as he understands them," the statement suggested that he could be removed from office under Article 43 of the Constitution,- which author- izes the Congress to declare presidential incapacity." The Coup ExaAt006VIOdf6tcKletetaso i!899t/o' io P was made is not yet certain, but it evidently was reached in the days following Prats' resignation. The armed forces had contingency plans for the control of vital points throughout the country in case of any emergency, and it only required a signal to put them into operation. Hence the actual seizure of control required little preparation. After the resignations of the third week of August, Allende restructured his cabinet without the top military commanders but still retained representa- tives of the armed forces in ministerial posts. Over the opposition of other PS leaders, he appointed as Minister of the Interior his Socialist colleague Carlos Briones, who was known to be interested in another attempt at accommodation with the Christian Demo- crats. The president also canceled a projected trip to the Conference of Non-Aligned Nations in Algiers. The government and the opposition again staged rival demonstrations in connection with the third anniversary of the 1970 presidential elections. On the weekend before the coup, the Christian Democrats called all provincial party leaders to a meeting at which a proposal was adopted for the simultaneous resignation of the Congress and the President and for new elections to resolve the con- flict between the executive and legislative branches. During the same weekend, Allende met with the leaders of his Popular Unity coalition and called for the holding of a plebiscite on his conduct of office. Although this step was reportedly opposed by the Socialists, Briones subsequently asserted that Allende planned to announce the plebiscite in a radio address at noon on the day of the coup." Meantime, after a stormy session with Allende on September 7, the military commanders proceeded on Sunday, September 9, to draft the text of the pronunciamiento issued on September 11. They did not secure the agreement of the National Police until early on the morning of the coup itself, and only after the fourth-ranking officer in seniority had taken over the position of police commander." oon September 10, Navy units set sail from Valparaiso for previously scheduled maneuvers, but that evening they returned to port and by early morning of the 11th had seized control of that city. Concepcion, the third-ranking city in Chile and a known center of leftist activism, was taken over with- out a hitch. Santiago required a few hours longer. To justify their action, the military commanders broadcast a communique to the nation. While ad- mitting that the Allende government had initially come to power by legal means, they announced that it had "fallen into flagrant illegitimacy" by violating fundamental rights, by "artificially fomenting the class struggle," by refusing to implement the de- cisions of the Congress, the judiciary and the Controller-General, by causing a critical decline in :IAtR 9-6dnl$4i000l O0 OQI -r tivity in Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 1 _ QPYRGHT the country, and by bringing about a state of in- flation and anarchy which "threaten the internal and external security of the country." The coup leaders concluded: These reasons are sufficient in the light of classical doctrine .. , to justify our intervention to depose a government which is illegitimate, immoral, and un- representative of the overwhelming sentiment of the nation." At 9:30 a.m., when it was apparent that no one but the GAP, his personal bodyguard, was ready to defend= him, Allende broadcast his last message to the Chilean people over the single pro-Allende radio station that had not yet been shut down by the ,military. He began: representing widely divergent political postures ave cited the Chilean case as proof that the hope of achieving Marxist socialism through democ atic means its a vain one. Yet most people have fail d to note two fundamental errors of the Allende policy, neither of which was essentially related to the attempt to establish democratic socialism: (1) As noted at the outset, the very quotation rom Engels that Allende cited at the beginning o his_ administration to justify his course states as a pre- requisite "the support of the majority of the people." Allende acted as if he had that support, but even at the highest point of his popularity in the April 1971 elections, he never achieved it. Moreover, his policy of deliberate class polarization, aimed at ex- panding his electoral base, was more successful in pitting professional and middle-class groups against him than in widening his support among workers, This is surely the last time that 1 will be able to speak to you. . . . My words are not spoken in bitterness but disappointment. In the face of these events / can only say to the workers, "i am not going to resign." At this historic juncture I will pay with my life for the loyalty of the people. Blaming "foreign capital, imperialism, and reaction" for persuading the armed forces to break with their tradition, he said: History will judge them.... My voice will no longer come to you, but it does not matter. You will con- tinue to hear it; it will always be among you. At the least, you will remember me as an honorable man who was loyal to the revolution." At 11:00 a.m., the coup leaders permitted those who wished to do so to leave the building, and-- except for his personal secretary-all the women, including Allende's pregnant daughter, left. The military also offered the President and his family safe conduct out of the country if he would sur- render. Allende rejected the offer. The Air Force then sent in Hawker Hunter bombers, which re- peatedly hit the palace with rockets and set fire to large portions of it. Finally, shortly after 1:30 p.m., Allende decided to discontinue the resistance, and the members who had been with him left the build- ing in single the, led by the secretary carrying a white flag. Allende stayed behind and, sitting on a sofa in a reception room on the second floor, put two bullets into his head. The automatic rifle that he used was a gift from Fidel Castro." Conclusions Since Abp? cf9 aefii I i 1 Js' cY R 2 peasants and low-income groups. 2) Marxist economists and policymakers have always placed primary emphasis on investment and the expansion of the productive capacity of the economy. By contrast, the Allende policyma ers emphasized increases in consumption and combined this with a headlong rush to take over industry and agriculture-a course far removed from the "two steps forward, one step back" of Lenin. The conse- quences of these policies after their deceptive in tial success were massive government deficits, runaway inflation, and a near-breakdown of the econo y. (The argument that Allende's economic problems were the result of a shortage of foreign credit does not really hold water, since they were caused by policies initiated before the foreign squeeze nd since, in any event, Allende's regime manage to secure enough foreign credits from Latin American, European, Soviet and Chinese sources to increase the Chilean foreign debt from $2.6 billion to 3.4 billion in less than three years. Much of the new indebtedness was to Western Europe and other L tin American countries. Surprisingly, Chile's debt to he USSR, China and Eastern Europe increased only from 11.9 million to $40 million between 1970 and 1973.") Specific aspects of the Chilean system also made the Ailende experiment a particularly difficult one. He was able to come to power in the first place because of Chile's deeply-rooted commitment to he democratic system and because the Marxist parties were able to mobilize a part of the proletariat and the peasantry, and he had at his disposal many instruments for state control of the economy wh ch had been developed by previous administrati ins since the 1930's. However, he was required to operate within an institutional system which inclu ed frequent and staggered elections, proportional r r fnAt ffP 9d0) ' j t~abbf6bnd 9h-5n Approved For Release 1999/09/02 : CIA-RDP79-01194A0001005500T RIGHT majority rule very difficult and often gave veto pow- ers to the extremes of Right and Left. The economy had been characterized for nearly a century by a chronic tendency to inflation, and successive govern- ments had consistently ignored agriculture in the interest of securing urban electoral support. The most important systemic constraint of all, of course, was the existence of a professionalized and insti- tutionally-loyal military which was unresponsive to the ideological blandishments of the Left." The immediate causes of the military intervention are apparent from the preceding account. In the last part of 1972, the military were drawn into Chilean politics by both sides and became as polarized as the rest of Chilean society-with the overwhelming majority joining the opposition to Allende. The con- flict over education in March-April 1973 height- ened that polarization just at the time the military were attempting to extricate themselves from politi- cal involvement. Then the expansion of arms searches in mid-1973 revealed the extent to which Chile was becoming an armed camp on the verge of civil war. Finally, the efforts to subvert the existing military hierarchy by a combination of leftist activ- ity among enlisted men and presidential maneuver- ing with promotions and retirements provided the classis scenario for a coup d'etat. One can also relate Allende's difficulties to the inherent contradictions in the Marxist theory to which he appealed. At the same time that he proclaimed his faith in a democratic, pluralist and libertarian transition to socialism, many of his Marxist sup- porters spoke and acted on the basis of a belief In the inevitability of armed confrontation. With his knowledge, they armed themselves and-what was worse-talked incessantly about revolution. The re- peated statements of Regis Debray and others that the observance of the rules of "bourgeois" legality was only a tactic until the balance of forces had improved was hardly likely to persuade doubters of the sincerity of Allende's commitment to democracy. When the importation and distribution of arms was combined with efforts to reorganize education along ideological lines, to subvert military discipline, and to rearrange the hierarchy of command, It is not altogether surprising that the military finally took action. A positive evaluation of the Allende years would certainly credit him with a sincere effort to raise the living standards of low-income groups and to involve them actively in the determination of their own future. It would likewise stress the continued existence of freedom. of expression for all points of view in Chile right up to the coup. A more negative assessment would ask whether the low-income groups in Chile genuinely benefited from an eco- nomic policy which after the first half of 1972 pro- duced hyperinflation, a continuous drop In agri- cultural and industrial production, and a reduction in the real value of wages and salaries. Even more critically, one could inquire who has suffered the most In economic and in human terms as a result of the breakdown of the Chilean system-the Marxist politicians, many of whom were able to escape or go into exile, or the workers, peasants and slum- dwellers they claimed to represent, who are now paying the price of the Allende regime's mistakes in the form of the hardships Imposed by sharply reduced consumption and the strictures of dracon- ian military rule. 1 Allende's supporters in the Popular unity coalition consisted of his own socialist Party (Partido Socialists-PS), the communist Party (Partido Comunista-PC), the main body of the Radical Party (Partido Radical-PR), the leftist Catholic "Movement of Popular United Action" (Movimiento de AcCidn Popular Unldo-MAPU), and two other smaller groups. The largest opposition groups were the centrist Christian Democratic Party (Part/do Democrats Cristiano- PDC) and the rightist National Party (Partido National-PN). In retrospect, It is ironic that the Chilean Senate never acted on a constitutional amendment proposed early in 1970 to establish a second-round popular election, which would have provided the President thus elected (probably the right-wing candidate, Jorge Alessandrl) with a clear popular mandate. 2 El Mercurio (Santiago), Nov. 6, 1970, p. 23. D Salvador Allende, "The Chilean Way to Socialism," in Paul E. Sigmund, Ed., The Ideologies of the Developing Nations, 2nd rev. ed., New York, Praeger, 1972, p. 450. 4 Frei's Chileanlzation program had involved the purchase by the Chilean state of a controlling interest in the large copper mines :caned by the Kennecott and Anaconda companies. The agreements rad also provided that Chile's payments to the American companies were to be invested in the expansion of copper production and refining in Chile, earning the country additional revenue in the 1970's to pay back the loans contracted to finance the purchases. % See R6gls Debray, The Chilean Revolution: Conversations With Allende, New York, Random, 1971, pp. 52, 77, 91, and 97. El Mercurio (International Edition) Feb. 18-24, 1974, p. 3, reproduces the report, found In the presidential palace. ? On "socialist consumerism" see Paul E. Sigmund, "Two Years of Popular Unity," Problems of Communism (Washington, DC), November-December 1972, pp. 38-51. ?See, e.g., Paul M. Sweezy, "Chile: The Question of Power," Monthly Review (New York, London) December 1973, pp. 1-11. ' El Mercurio, Aug. 8, 1971, p. 37. ? On the inaccuracy of the term "invisible blockade" to describe the Allende government's credit problems, see Paul E. Sigmund, "The 'Invisible Blockade' and the Overthrow of Allende," Foreign Affairs (New York), January 1974, pp. 322.40. ,a J. Ann Zammit and Gabriel Palma, Eds., The Chilean Road to Socialism, Austin, University of Texas Press, 1973, pp. 38, 247, The Communist Party report appears In El Mercurio (International Edition) Jan. 31-Feb. 6, 1972, p. 4. " Partido Izquierda Radical, Trayectoria Politica'del PIP (Political Path of the PIR), Santiago, 1972, p. 79. 12 A secret cable from US Ambassador Nathaniel Davis to the State Department, Published In Jack Anderson's column In The Washington Post (Washington, DC) on March 28, 1972, commented that the Chileans have a great ability to rush to the brink, embrace each other, and back off." On the same point see Mauricio Solana and Fernando Cepeda, Allende's Chile: On the Politics of Brinkmanship, Bogota, Universidad de Los Andes, 1972. u The. Allende government blamed the drop In production on the October 1972 strike, but this ignored began before October, the fact that production declines . '+Secretarla General del Gobrerno, Liibro Blanco (White Book), Santiago, 1973, pp. 103-O8. Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5i Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5 CP1(rRGHT 15 The Cordones were more or less spontaneously organized committees of workers from seized factories which coordinated production and distribution in a given Industrial area. The Communal Commands (Comandos Comunales) were organized by the Cordons to mobilize the local population in the surrounding area. They included representatives of neighborhood committees (juntas de vecinos), mothers` groups (centros de madres), price control and distribution committees (juntas de abastecimiento y, precios), and other groups. On the persistence of worker "economism," see James, Petras, "Chile: Nationalization, Socioeconomic Change and Popular Participation," Studies in Comparative International Development (Beverly Hills, Calif.), Spring 1973, pp. 24-51; also available in James Petras, Ed., Latin America: From Dependence to Revolution, New York, Wiley, 1973, Chap. 2. 1s The New York Times (New York), Sept. 27, 1973. 17 See report of the Investigating Committee of the Catholic University Law School, reproduced in the Libro Bianco, pp. 220-30. The statistics on rcw voters in 1973 omit the 21 to-24-year-old group who ?.,,ould have teen too young to vote in 1970. They comprised almost exactly the number of "fraudulent" voters estimated in the report. is Libro Blanco, p. 215. 19 The term "item veto" reflects the fact that the Chilean president, unlike his US counterpart, can veto or even rewrite individual sections of proposed laws. 20 Two conflicting accounts of those negotiations appear in Ercilla t=antiago), July 11-17, 1973, pp. 7-10. 71 Law No. 17,798, Diario Oficial (Santiago), Oct. 21, 1972. By a q- ;irk of fate the law had come to Allende's desk In the midst of the October strike, and since it had the strong support of the armed fries, he was compelled to sign it despite the opposition of the Scoialist Party and the MIR, 22 Allende's personal bodyguard had organized courses In arms- training at his vacation house outside of Santiago. The MAPU began arms-training In December 1972, and the Radicals did so in July 1973. The armed forces were aware of this at least by the end of July. See documents in Libro Blanco, pp. 43.45, 192-93, 196-200. 23 It was an indication of the continuing press freedom in Chile that r.e+vsstands in downtown Chile at this time contained a left-wing publicat,on headlined, "Soldiers, Disobey Your Officers," and a magazine of the extreme Right. with the headlines, "The Right of F.ebe!f.or," "Rebellion and its Goals," and "Resistance to the Tyrant." 24 Libro Blanco, pp. 239-42. 25 El Mercurio (International Edition) Aug. 20-26, 1973, p. 5. The chairman of the Christian Democratic Party told the New YorJ. Times. that "neither we nor the armed forces favor anything but a democratic solution to Chile's political crisis" but emphasize that the only way to avoid a breakdown of the Constitution was the appointment of military men in at least six cabinet posts, as well as in key undersecretary positions and as heads of the chief govern- mental agencies. The New York Times, Aug..27, 1973, p. 12. 26 El Mercurio (International Edition), Aug. 26-Sept. 1, 1973, p. 7. 37 Information from the author's personal Interviews with Pa ricio Aylwin, Jan. 11, 1974, and Carlos Briones, Jan. 14, 1974. 28 Accounts of pre-coup military activities appear in The C ristian Science Monitor (Boston), Sept. 17, 1973; The Wall Street Jou nal (New York), Sept. 25, 1973; Le Monde (Paris), Dec. 19, 1973; and Robert Moss, "Chile's Coup and After," Encounter (London), arch 1974, pp. 72-80, >Libro Blanco, pp. 248.49. 30 Translated from the transcript of the tape recording of the speech published In Ricardo Boizard, El Ultimo Dta de Allende (The Last Day of Allende), Santiago, Editorial de Pacif)co, 1973, pp. 53-55. 31 On Allende's suicide, see the medical report in El Mercurio (international Edition), Oct. 29-Nov. 4, 1973, pp. 1 and 7. The eyewitness testimony of one of the President's personal ph icians, who entered the room immediately thereafter, is published in Emilia, Jan. 2-8, 1974 pp. 10-13. Allende's widow has asserted that witnesses told her they had seen bullet wounds in his chest and stomach, A supposed account by a personal bodyguard circ,L fated In Mexico and elsewhere describing his murder contains numerous factual errors and describes events which could not have to an place because of the physical design of the building. On this end many other myths of Left and Right concerning the overthrow of Allende, see Paul E. Sigmund, "Allende through the Myths," Worldview (New York) April 1974 pp. 16-21. 32 Secretaria, ComitB Interamericano de la Alianza pare el rogreso (CIAP), El Esfuerzo Interno y )as Necesidades de Financiamie to Externo pare el Desarrollo de Chile (Domestic Efforts and th Needs for External Financing for the Development of Chile), Washington, DC, 1974, p. V-9. 33 The Socialists always believed that they could convert th military to their outlook. This Is strikingly revealed in Socialist Party documents published In the Libro Blanco, pp. 124-30. Approved For Release 1999/09/02 : CIA-RDP79-01194A000100550001-5