Hayek in Chile

In August 1991, immediately after the attempted coup, I went to Moscow, to participate in a conference on democracy and authoritarianism in the Third World, in which I was about to present a paper on the transition to democracy in Chile. I was surprised by the interest shown by our Soviet colleagues in Pinochet and the case of Chile. They posed many questions and were specially interested in the way Pinochet’s government had successfully transformed Chile into a free market economy, according to the guidelines of Friedrich von Hayek, one of the staunchest intellectual enemies of the Soviet system. In the transition to democratic rule, led by Pinochet, they saw an additional benefit. But their main interest was focused on the Chilean model of development as one of sustained economic stability, growth and governability, possessing all the elements that were lacking in the disintegrating Soviet Union. Through the democratisation process controlled by Pinochet and his followers, Chile was-at least in ex-Soviet eyes-on its way to becoming Lord Dahrendorf’s fourth city, acquiring a balance between prosperity, civility and liberty.1 In Chile, civil associations had become the leading forces of both a free market and an open public sphere, and their interaction not only served for the elaboration of tensions and contradictory interests but also generated the energies needed for economic growth and social development. The governments of redemocratised Chile, while preserving the free market model and its advantages, in terms of economic efficiency, had clearly identified social and economic exclusion as a moral problem to be addressed, but the question here was whether limited democracy allowed the state the possibility to enforce the policies needed to curb the increasing socio-economic gap.2 The Chilean state had become smaller but stronger in its governance capabilities. Society, politically demobilised through repression during the years of military rule, made a democratic choice in 1988, rejecting Pinochet’s plebiscitarian bid to be elected for a further eight-year period. But after democracy was installed, the levels of political participation and interest descended rapidly. The neo-liberal model seems to have been internalised and the feelings of social cohesion that characterised Chile in early decades have become marginal.