Is Chile’s Election the Beginning of the End of Neoliberalism?

A game-changing election in Chile could be the beginning of the end of Neoliberalism.

Neoliberalism is the dogma that capitalism is the only successful economic system. Additionally, neoliberalism pushes a hypocritical system of unlimited freedom for the rich and extreme self-reliance and poverty for everybody else.

Chile was the country where neoliberalism began. After the bloody September 11 Coup, dictator General Augusto José Ramón Pinochet Ugarte found himself ruling a country in economic collapse.

In a desperate attempt to revive Chile’s economy, Pinochet turned to the Chicago Boys. The Chicago Boys were economists who studied at the University of Chicago, hence the name. The Chicago Boys had big-time intellectual backing from Nobel-Prize-winning economist Milton Friedman.

The Rise and Fall of Neoliberalism

To save Chile’s economy, Friedman and Chicago Boys prescribed privatization, austerity, deregulation, small government, and shock treatments. In other words, neoliberalism. The neoliberal revolution that swept around the world began in Chile.

Dozens of countries, including China, India, the United States, the United Kingdom, and even Russia, former homeland of Communism, underwent neoliberal revolutions of various degrees. In some countries, such as China, the neoliberal experiment was successful. In others, such as the United States, Russia, and the United Kingdom, neoliberalism destroyed industry and worsened income inequality.

However, we cannot ignore neoliberalism’s successes. For example, Chile became a stable and peaceful democracy after Pinochet’s exit.

Yet for over 50 years, neoliberalism was the world’s dominant economic ideology. Neoliberalism won because the horrors of Communism discredited socialism.

Today, however, neoliberalism is in collapse. In particular, historians and journalists have exposed many of neoliberalism’s practitioners, including Pinochet, have as thugs, grifters, and frauds. Thus, neoliberalism has repeated Communism’s charade on a smaller scale.

Moreover, leaders throughout the world, including Xi Jinping, Donald J. Trump (R-Florida), Boris Johnson, and Vladimir Putin, have rejected elements of neoliberalism. For example, Johnson supports Brexit, while Trump rejects free trade. Meanwhile, Xi is cracking down on corporations and even imprisoning billionaires.

The End of Neoliberalism in Chile

On 19 December 2021, leftist Gabriel Boric won 56% of the vote in Chile’s presidential run off.

Boric is a 35-year-old student activist turned politician who looks like a high-history teacher. Chile’s next president has a beard and rarely wears a tie. Boric’s entire career is a rejection of neoliberalism. For example, Boric is not part of either of the political coalitions that have governed Chile for the past 30 years.

“If Chile was the cradle of neoliberalism, it will also be its grave,” Boric said at a 2021 campaign rally.

Boric’s presidential platform includes student debt cancellation, replacing private pensions with Social Security, and increased investment in education and health care, The New York Times reports. For instance, Boric supports LGBQ rights and unrestricted abortion.

Refreshingly, Boric rejects the authoritarian tactics of traditional Latin American leftists such as Fidel Castro and Hugo Chavez. Yet the Chilean Communist Party backs Boric, The Washington Post reports.

Boric’s true popularity is difficult to gauge because of his opponent, Jose Antonio Kast. Kast scared many voters by praising Pinochet and hinting at a return to the dark times of death squads and dictatorships.

Yet Boric’s victory and Chile’s effort to scrap and replace Pinochet’s constitution show neoliberalism is dead in that country. However, it is not clear what will replace neoliberalism. Even Boric himself seems confused on that point. His economic policies are long on promises of benefits and short on theory.

Can Neoliberalism Die in America?

As an American I am jealous of Chile. Chileans just elected a 35-year-old leftist who rejects neoliberal dogma.

Conversely, America’s president Joe Biden (D-Delaware) is a doctrinaire neoliberal who opposes single-payer healthcare and thinks continuing student debt is a good idea. Worse, there is a strong possibility that Donald J. Trump (R-Florida); an extreme neoliberal and open racist who plays a nationalist on TV, could win the 2024 presidential election.

Disgustingly, both Trump and Biden are in their late 70s and Biden will turn 80 next year. Moreover, the average age of a US Senator is 64.3 years, creating what The Washington Post calls the oldest Senate in American history.

Hence, America has an elderly government and little possibility of change. Yet, Chile gives us hope because they have elected the leader of a protest movement president. It’s the equivalent of a Black Lives Matter leader being elected US president.

However, one obstacle Boric does not face is America’s archaic electoral system, which restricts choices and rewards extremism. Disgustingly, the old Chilean constitution written by Augusto Pinochet, a military dictator, is more democratic than the vaunted US Constitution. To elaborate, there’s no Electoral College in Chile.

In particular, Chile’s system features run-off elections which give voters more choice. Hence, Americans need to examine Andrew Yang’s Forward Party, which promotes instant run-off elections and proportional representation.

In conclusion, one reality is clear neoliberalism is dead. Now we just have to determine what will replace it. Hopefully, Americans will read neoliberalism’s obituary and take action on it.