The following article originally appeared in Issue 4, Volume 9 of Canadian Dimension in 1973.

The election of a communist government in Chile happened more than two years ago. As elections do not have the romance of violent revolutions, Chile has not been given the same attention by the political left that Cuba got a decade ago. This is unfortunate since the Chile experience is much more relevant to countries like Canada than that of Cuba, China and the USSR. Socialism will not likely come to Canada in the Vietnamese way or the Cuban way. But what has happened in Chile and what is happening there today may well bear some resemblance to the politics of a socialist Canada.

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The Popular Unity Party (Unidad Popular, UP) is a coalition of six political parties. It is domin­ated by the two major working class parties, both of which claim to be revolutionary Marxist. One of these, the Communist Party of Chile, is the more conservative of the two. The other is Allende’s own party, the Socialist Party. Another force to the left of the government, Movement of the Revolutionary Left (the MIR), has remained outside the Unidad Popular and turned into a left-wing pres­sure group, attempting to radicalize the policies of the UP by grassroots mass action. It has maintained its separate organization and its military apparatus as it foresees the likelihood of a future armed con­frontation with the forces of the right (the UP came into office with a bare plurality).

In fact, it polled three percent fewer votes than it had in the election of 1964, which it lost. The Congress was and is controlled by the opposition. New laws could be passed only with the agreement of the opposition parties. The armed forces, a product of the earlier regimes, could also have been unleashed against Allende.

The government itself was a coalition govern­ment comprised of parties that were suspicious of each other and com­peting jealously for cabinet and senior government posts. The daily press and the broadcasting systems were almost entirely opposed to the new government and hysterical in their denunciation and warnings. Until the emergency measures of October 1972, the media was still equally divided between supporters and opponents of the UP.

These were just some of the handicaps Allende faced the day he took over as head of Chile’s first socialist government. He insisted that Chile would remain a democratic and pluralistic society on the Western parliamentary model. In fact, before offering transfer of government, in the countryside the land­ owners dismissed peasants and began to slaughter cattle. In the cities, industrialists went on strike by refusing to commit themselves on long-term invest­ments.

The CIA was prepared to intervene during the election to see to Allende’s defeat. But the US Ambassador to Chile, Edward Korry, insisted that Allende could not win and vetoed CIA plans to pump money and other items of persuasion to block Allende. “We told him and we told him that Allende was going to win if we didn’t do something,” a CIA agent recalled,” but he wouldn’t listen.” Needless to say, Korry has since been replaced.

Then there was the ITT’s bungling of a school boy’s plot to overthrow the government. Some con­sideration was given by opposition parties to pre­venting Allende from taking power. What prevented these projects from taking hold was the threat of violence by the left, as James Petras has written (“Transition to Socialism in Chile,” Monthly Review).

The Christian Demo­cratic Party (PDC), which had ruled previously, insisted that the old civil service bureaucracy be maintained intact. Allende accepted this arrangement. Allende proved he could handle this during the initial stages of his rule. He is a brilliant orthodox politician, entirely at home with all the manoeuvrings that are part of the parliamentary system and fully able to manipulate the levers of parliamentary and caucus power to meet his purpose. Among Chile’s 17,000 laws he found several which he could put to very good use, allowing him to move strategically within the old legal structure without having to get new legislative approval for several key measures. For example, the UP relied extensively on a decree, never repealed, of the short-lived “Socialist Republic” regime of 1932, which permits the government to take over any enterprise or industry that “fails to supply the people with its goods and services.” Large sections of industry were nationalized by this decree after the workers had occupied the factories to ensure that they could “supply the people.” The banks, on the other hand, were nationalized by the simple device of buying up a majority of shares at market prices.

The UP could not have moved as fast and as easily as it did without the reform measures intro­duced by the Christian Democrats in 1964-70. Under their rule 70 percent of all investment was publicly financed and a large percentage of the labour force were government employees. Any kind of economic development in Latin America requires economic reforms of some degree. The Christian Democrats had already nationalized a portion of the copper industry. Allende had only to finish the job. The Christian Democrats had embarked on an agrarian reform pro­gram, however hesitatingly, and Allende had only to accelerate its implementation.

Many writers have commented on the democratic tradition of Chile and the neutral political role of the military—as if these were the explanations for the peaceful transfer of government in Chile. Few have noted why these traditions were maintained after the election of a Marxist government. In reality, right from the beginning, violent attempts were made by the right-wing to block the transition of power. Leading spokesmen of the Socialist and Communist parties openly declared­ and workers, peasants and students, stood behind them—that if Allende was not allowed to take office, a civil war would result. And the ultimate victor was entirely in doubt. One of the former ministers of the government told Petras that the PDC took the threat of civil war seriously and that it did not want to be “responsible for a civil war which could lead to unforeseen consequences.” According to Petras, it was only this threat of open warfare along with timely intelligence work of the MIR, which had infiltrated right-wing terrorist groups, that prevented the plans of sabotage and assassination from being realized and kept the democratic tradition from being violated.

In the 1950s and 1960s Chile could not have elected a Marxist government without some form of intervention by the United States. But in 1971 the US was in no position to interfere. Vietnam was holding down the military machine and the American public would not have taken well to another military occupation which would mean heavy losses of American soldiers. The American dollar was in trouble. Copper reserves were at an all time low because of heavy war-time consumption. Nixon was advised to leave Allende alone for the moment and to count on internal failures to bring down the regime, at which time the US could come in at little cost to itself.

The tone of Allende’s Chile is not strident or threatening. The arguments for nationalization are usually couched in pragmatic language, not in ideo­ogical terms. Nationalized industries are taken over, not as part of a worldwide campaign against Amer­ican imperialism, but as essential to the economy of Chile. Sweeping changes are introduced in Chile with moderate, low-key statements linking these changes to plans of orderly development.

Richard Feinberg in his little book, The Triumph of Allende: Chile’s Legal Revolution, makes some interesting comparisons between Chile and Cuba:

The Chilean Left, especially, had intellectual power. Its leaders, of ten of considerable scholarly accomplishments, had complemented their theoretical exercises with years of practical experience in the political arena. And its rank and file, its cadres and cells, were highly politicized, con­scious, and disciplined. They too had been years in preparation for the long, carefully sought rise to power.

How distinctive from the Cuba of 1960, where a small group of bearded guerrillas, having demoralized Batista’s military, found themselves with a disorganized, politically immature population, a population that years of dictatorship had left in a state of political unconsciousness.

And how different was Allende, with his clearly stated platform, his carefully measured statements, from the radi­cally shifting impetuous Castro, who one month was a reforming democrat, the next a self-declared Marxist-Leninist.

Cuba had been exciting, romantic, adventurous. The Chile of Allende appeared dull, tranquil, orderly. And for these very reasons, Chilean socialism was more dangerous.

More dangerous in part because, if Chile could find a path to socialism without widespread violence ending in dictatorship, its example would effect a tremendous appeal throughout Latin America and without exaggeration, throughout the world.

But the “if” is a big one. From the time Allende took over the presidency, some observers, even a group from within his own party, expressed doubt that he would be able to pull if off quite so peacefully and smoothly. Recent events indicate that they were probably right. But more on this, much more, later.

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By the late 1950s, the three major copper mines in Chile were Chuquicamata, El Salvador, and El Teniente. Chuquicamata and El Salvador were owned by the Anaconda Copper Company and El Teniente was owned by the Kennecott Copper Corporation. Anaconda and Kennecott alone accounted for $4.6 billion. Just how lucrative the copper profits were may be judged by Anaconda’s 1969 balance sheet which shows that the company earned 79 percent of its profits in Chile although the mines there accounted for only 16 percent of the company’s total invest­ments.

Allende figured that the excess profits earned by these two companies should be taken into account in determining the amount of compensation to be paid for the expropriated property. And the opposition Congress agreed. In fighting the expropriation Kenne­cott has sought an embargo on Chile’s copper from France and Holland. This is now being contested, but it is hurting Chile’s economy seriously. On this issue however, Chile has received support from other Latin American governments and domestic support is uni­versal.

The government has adopted a more selective approach to manufacturing industries. Petras gives this summary of policy and practice as of the winter:

Allende’s first step in office was to dramatically raise the living standard of the majority of Chileans. Wage earners and lower-level salaried employees were given a 70 percent raise in pay while prices were frozen. The rate of unemployment was quickly forced down from 20 to three percent. A ceiling of $1,200 a month was placed on public salaries. Every child was given a half-litre of milk per day. Rents were fixed at 10 per cent of family income. In December Allende sent a bill to Congress nationalizing the giant US copper mine. The government bought up stocks enabling it to take over the major banking interests. Expropriation in rural areas began to accelerate.

These measures were designed to consolidate Allende’s support among the masses. Yet they did not antagonize Chile’s middle class. For the moment con­frontation was limited to the rich and the big business interests. In every instance except rural expropriation, where peasants often seized the land on their own initiative, change was orderly and all the legal niceties were maintained. The municipal elections of April 1971, held six months after Allende took office, re­flected the growing strength of the UP. Allende’s own party registered a 65 percent increase over its 1967 vote. The establishment of four pro-UP daily newspapers, the expansion of trade unions, the estab­lishment of peasant councils and workers’ committees in factories gave Allende’s government a more solid organizational strength and closer ties to its popular base.

In its first six months, the UP government expropriated the coal, iron and nitrate mines along with the remaining copper mines. Allende concen­trated his economic policy in the mining industry because it is Chile’s chief staple industry and the mainstay of the entire economy. The copper mines alone have sent over $750 millions of profits to the US between 1964 and 1971. As a publicly-owned industry, these profits could now be used to finance new development projects and to create new indus­tries. Nationalization of the copper mines was a gen­uinely popular measure, supported by the right as well as the left. Between 1911 and 1971 foreign companies remitted $7.2 billion in profits.

The major steel company, Compañía de Acero del Pacífico, has been nationalized, and the state has bought and formed, mixed enterprises with a half-dozen machine and metalworking firms. In the electrical, chemical, and rubber industries the state has formed mixed enterprises with foreign capital. The reasons for mixed enterprises vary: technological necessity, the need to import technology, political considerations (not wishing to alienate a particular nation), and technical and administrative reasons, such as lack of trained personnel to manage the enterprises). In other industrial branches such as cement, textiles, and the food industry, the state has taken complete ownership of the expropriated firms. A number of smaller firms on the verge of closing have been taken over to prevent greater unemployment.

The government has not yet specified what industries it plans to expropriate, nor has it established a time sequence.

According to Petras:

Perhaps as important as the extent of government-planned nationalization is its policy toward workers’ participation within the nationalized enterprises. The government and the trade unions include Central Unica de Trabajodores (CUT), have jointly prepared a project law which will make the workers major participants in the planning and decision-making structures of the top body of each firm. This administration council will be made up of five representa­tives selected by the government, five elected by the workers and an executive director appointed by the government.

Coca-Cola has agreed to sell 51 percent of the shares of its bottling plant for $1.5 million, 40 per­cent of which is to be paid in cash which can be invested in other industries. Similar arrangements have been made with General Tire and RCA. The MIR and the left-wing of Allende’s own party, who are altogether dissatisfied with the limited extent of nationalization, claim that by this particular policy, the government is contributing to a vicious circle by encouraging US capital to move into other sectors of the economy.

A wave of land seizures in the southern province of Cautin, during the first three months of the Allende government, determined the UP strategy towards agrarian reform. A local armed peasants’ movement led by the MIR began to spread to other areas. To forestall an armed conflict the Ministry of Agriculture proceeded to expropriate legally a large number of farms throughout the country. MIR supporters were absorbed within the peasants’ councils, which were set up to supervise agrarian reform in each area. In four months, the government had expropriated about 40 percent of the land area the former government had taken six years to expropriate. In eighteen months, 8.7 million acres were expropriated, about the same amount that Eduardo Frei had expropriated during his entire six-year administration.

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All along, friendly critics of the Allende regime have been noting a number of fundamental obstacles to a thoroughgoing socialist transformation of the economy.

First, the bureaucracy is still largely intact from the PDC days, a result of the agreement reached by the UP and the PDC. Petras writes:

While the top leadership of the government and the groups at the bottom (workers, peasants, neighbourhood groups, etc.) may favour a policy, the middle levels may choose to sabotage it through endless delays, maladministrations, etc. In some cases the functionaries conduct anti­-government propaganda while ostensibly administering pro­grams, attributing difficulties to their chiefs while taking credit for achievements. The problem of how to implement a social transformation through a bureaucracy which is hostile or indifferent is one which the Allende government will have to tackle soon or face serious socio-economic problems in the not-too-distant future.

Second, there is the army. Allende has paid close attention to the army, increased military salaries and observed all military ceremonies and protocol. He authorized an $8.6 million housing plan for members of the armed forces. The army has been used in a number of development projects in an effort to commit the military to UP reforms. Officers of the army, air force and navy occupy prominent posi­tions in the national planning office. They sit on the boards of the copper mines, the steel industry, the telephone company and various other state enterprises. While the military appears to support Allende’s programs there is always the question as to how reliable that support is­ particularly as more fundamental economic changes are contemplated.

The left has pointed out that an army commander earns nearly 30 times the monthly salary of the aver­age worker. The recent appointment of the military chief of staff to the cabinet in the strategic post of minister of the interior, has caused grave concern. This appointment upsets the traditional control over the military by political authorities. What will happen in the event of an outbreak of a civil war is anything but clear.

Allende’s ability to mobilize mass support in the crunch is now open to question. This was Fidel Castro’s evaluation of the situation when he toured Chile extensively some months ago. Without the masses’ support, Allende must continue to depend on the good will of the armed forces, and as Penny Lernoux writes in The Nation (December 11, 1972), “…despite all his eulogies of the military’s loyalty and idealism, despite all the money spent for officers housing and new equipment, the general may eventually turn against him. Most of the top brass has been trained in US or European schools, and the US military still wields considerable influence within the high command. Significantly, US military aid to Chile has increased during the Allende administration and presumably because Washington feels that this is the one area in which it can still influence decisions.”

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While some temporary difficulties were experienced during the first year of UP administration, there was sufficient excess capacity in industry to allow for a substantial rise in living standards of the lower income groups. But by now this process has about reached its limit. Bottlenecks and shortages in food and other items are beginning to appear. And they will get far worse before they get better. Foreign exchange reserves which stood at $500 million when Allende took office are all but exhausted, now­ removing the possibility of importing strategic goods as a means of alleviating some of these problems. Financial resources available to the government are limited because most industry remains in private ownership so that much profit is still being expropri­ated by private capitalists. And capitalists are re­luctant to invest their profits because of the economic uncertainties in the country.

When Allende’s ministers began searching for other sources of funds, they found that the US government had blocked such traditional sources as the World Bank and the International Monetary Fund in re­prisal for Chile’s copper expropriations. To make matters worse, the world price of copper, source of 80 percent of Chile’s foreign exchange, continued in a cyclic slump. Meanwhile inflation, which had been held in check the first year, has soared to 100 percent in the first nine months of 1972 and is expected to total 146 percent by the end of the year-nearly five times the rate in 1969.

Allende blames this situation on the machinations of the copper companies in particular and of the United States in general—a charge which is true to a certain extent. However, part of the blame must be laid to Allende and his ministers. Charges of corrup­tion and mismanagement are rampant. From Penny Lernoux:

There have been some embarrassing scandals in the Office for Industry and Commerce (DIRINCO), the state body charged with setting prices and intervening in pri­vately owned industries. Hector Espinoza, a communist em­ployed by DIRINCO, is being investigated on charges of seeking a hefty bribe to obtain a price increase for the paint industry. Patricio Hernan Casanueva, a UP lawyer working for DIRINCO, was caught red-handed in a Santiago hotel room with a suit case full of money which was part of a bribe from an Argentine company for setting prices on imported automobile spare parts. Three DIRINCO em­ployees belonging to opposition parties were also implicated in the Casanucva affair, but spreading the blame has not impressed idealistic leftists, who insist that Allende appoin­tees should be above that sort of thing.

While scandals in DIRINCO can be dismissed as iso­lated incidents that could accrue in any government, the long-range effects of inefficient administration cannot. One reason why copper production has not fulfilled government expectations is that many of the people appointed to run the mines know nothing about copper. Other state-run industries face similar administrative problems. According to one socialist engineer, all three of the companies in his charge are losing money because “the workers’ committee doesn’t know what the hell it’s doing.” He has twice tried to resign.

Workers’ committees, for their part, are demanding more say in management because “that’s what the revolution is all about, isn’t it?” Well, not exactly. Both the copper miners and the peasants, for example, have been labouring under the misapprehension that the mines and the land belong to them. Government spokesmen, on the contrary, say the mines, the farms and other expropriated industries must be run by the state for the benefit of all Chileans. Numerous clashes between the workers and the state have occurred over these conflicting interpretations of the revolution. “What really hurts me as a comrade of the copper workers,” Allende recently told the miners, “is to see that we still don’t have a level of responsibility and political consciousness to understand the changes we are undergoing. The copper mines don’t belong to you but to the people and to you as part of the people. You, my comrades in UP, have the obligation to understand this.” · There also has been considerable conflict over the degree of statism in rural areas. Indeed, one of the most urgent problems facing Allende is to find the foreign exchange to buy food imports, since almost all agricultural production is depressed. The government will have to spend $400 million abroad this year for food, compared with $150 million to $170 million during the Frei administration, although more than 80 percent of these imports could be produced locally.

As in the case of other industries, much of the blame for the country’s poor agricultural performance must be laid at the door of the administration. Only one-seventh of the land expropriated since 1970 has been organized in any way, which means that millions of acres in the reformed sector lie idle. Moreover, many of the political appointees who head the agrarian program know nothing about agri­culture. The crux of the problem, however, lies in the gov­ernment’s interpretation of the revolution as a process whereby all means of production will be nationalized. Not all the peasants agree. “We were given hope for our rights,” said the leader of the Single Peasants Union, which contains most of Chile’s organized peasants and small farmers. “Now we’re being offered a new boss, the only boss: the state. We will never accept it.”

Under Frei, most of the expropriated farms were organ­ized into co-operative societies or asentamientos, land settle­ments jointly run by peasants and the Agrarian Reform Corporation. The Allende government has discarded asentamientos in favor of centres for agrarian reform or state farms. Some 20,000 families have been denied deeds, al­though, they are entitled to them under agrarian reform law. “I’m afraid they’re going to repeat all the errors made elsewhere,” said an Israeli agricultural technician. “When will governments learn that you cannot impose productivity on a peasant?”

One of Allende’s major problems is reorganizing Chile’s manufacturing industries which proliferated over the past 40 years despite the country’s small con­sumer market of only one million people. In the rush to satisfy sophisticated consumer appetites of Chile’s middle class, foreign and local investors built every conceivable industry, from automobile assembly plants to advanced electronics factories, only to see the de­mand and profits disappear once initial needs were satisfied. When Allende took office, most industries were operating far below capacity-textile mills at 61 percent; bakeries, 50 percent; canneries, 65 percent; furniture factories, 61 percent; shoe factories, 60 percent. Approximately 80 percent of all industrial investment was supplied by government agencies. Allende has tried to change this situation by encour­aging high employment, better wages and massive investments in public works, on the theory that these measures would create greater consumer demand. His formula has worked only partially, partly because of the external financial difficulties beyond his control. Criticism from the left is also growing as Allende appears to be having some trouble in keeping his coalition together.

The opposition’s criticism of high­ spending comrades or Allende’s luxurious style of living can largely be discounted as propaganda. On the other hand, MIR critics and others have a point when they question the depth of Allende’s commit­ment to a classless society. They want to know why UP politicians appointed to posts in state-run enterprises are earning monthly salaries equivalent to the wages of twenty workers, or how it is possible that six percent of the labour force is still receiving 46 percent of the national income—this, in what is supposed to be a Marxist state.

In an important sense, the revolution in Chile does not place the Chilean economy in quite the same degree of difficulty that faced revolutionary Cuba. From 1930 on Chile experienced a high degree of industrialization most of which was, and remained, locally owned or controlled. Less than 20 percent of Chile’s manufacturing industries were foreign con­trolled at the time of Allende’s rise to power. And by the 1960s Chile was importing only 10 percent of her Gross National Product. On the other hand, Chile is totally dependent on imports for heavy ma­chinery and equipment. Almost all of this was sup­plied by the US, financed out of foreign exchange earned from the sale of copper and from various US aid programs. Cut off from capitalist world markets, Chile would have to totally reorient her basic indus­tries. Adjustments of this order of magnitude always creates short-term problems.

Massive changes of the kind introduced by Allende are bound to create dislocations and to pro­duce mistakes. The problem of efficient administra­tion has bedeviled all socialist governments. The question is: how much time does Allende have to get things in order and to consolidate his forces? He has managed to weather the 26-day strike. But stormy days lie ahead. In March 1973 come the congressional elections. The chief opposition parties are expected to unite against the UP and to make major gains.

They are not expected to win the landslide necessary for the two-thirds majority in Congress that is re­quired to overrule a president’s Congressional veto or to impeach him. The opposition is arguing that the March elections are really a popular plebiscite on communism, the idea being that Allende should resign if a majority of the electorate votes for the opposition.

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Many observers are saying that there is a serious prospect of a bloody civil war. Within Chile, the Miristas are not the only people who believe that it is inevit­able. While they have kept their arms intact, home owners in the plush Santiago suburbs of Providencia and Las Condes are stockpiling arms, Molotov cock­tails and food and medical supplies in the belief that violence will escalate during and after the elections. Most middle class neighbourhoods have 24 hour patrols, ostensibly to prevent robberies or local disturbances, but in reality to keep out Mirista-led land invaders from the poblaciones.

A year after Allende took over in Chile the noted British Marxist historian, Eric Hobsbawm, wrote a penetrating critique of the Chilean revolution (“Chile: Year One,” New York Review of Books, September 23, 1971). His conclusions, with which we end this background report, are still applic­able, even more so as his predictions have been born out by events of the past six months. We have numbered them for convenience:

1. Revolutionary transformations depend on establishing and maintaining initiative. Constitutional revolutions are no different from any others in this respect. They must, merely, like chess offensives, maintain initiative within a given set of rules. It seems to me that the UP has not yet established this tempo. The election campaign generated its own impetus, which was reinforced by the enormous and unexpected satisfaction of victory and the failure of the attempts to stop Allende from taking office.

The UP had a program, and the need to push it ahead in its first year carried it along for a while, at least until the difficulties of application began to emerge. Every reforming government tends to start at least potentially, with such a burst of speed. Non-revolu­tionary administrations cannot easily replace it once it is exhausted, and some, like the British Labour gov­ernment of 1964, throw it away. Failing to generate this impetus, such governments find themselves put on the defensive by domestic and foreign adversaries and the hazards of the world, such as balance-of-pay­ments crises. Then they are lost. They will fade away, like so many of the old popular fronts, amid growing internal bickering; or will provide “the conditions for their overthrow. In 1970 and 1971 the UP did not need to generate its moving force, but from now on it must.

2. This is made difficult by the fact that the UP is a coalition; its second serious weakness. To put it bluntly, the UP is a vehicle better designed for brak­ing than for movement. In order to prevent any party (read: the CP) from establishing exclusive control over any part of government, all jobs were distributed on a rigid quota system. What this means is that each department and agency of state consists of inter­twined rival party machines.

3. Third, the UP has so far failed to mobilize the masses adequately in its support. It has, once again, reflected the weaknesses of its historical par­ents, bourgeois parliamentary democracy and the clas­sical socialist labour movement. Parliamentary poli­ticians think of mass mobilization essentially as get­ting votes. Traditional working class leaders think of the union or party pulling the fellows out of mines and plants on to the streets.

None of these is adequate for revolutionary pur­poses, least of all in countries where national elections may not be part of popular political culture or where the organized industrial proletariat is not the typical form of the labouring poor. The fact is that the un­ organized poor between elections are not as yet constantly involved with the government, that govern­ment is not constantly present for them. There is no equivalent of Fidel Castro’s perpetual if one-sided dialogue with his people or of FDR’s regular fireside talks over the radio. The unorganized labouring poor will listen to Allende, because he has the prestige, power, and paternal function of any president, and because he represents a government that is demon­strably on their side. They can be mobilized most readily as a national force by him, and they can be · turned into a permanent and decisive national force, which is what Peron achieved in Argentina. He may have to choose a rather different personal style from his friend Fidel, but he should not forget one of the few lessons of the Cuban Revolution that are applic­able in Chile, namely, that a leader capable of speak­ing directly to the most remote and least political of his poor fellow citizens is a major asset for any revolution, and probably indispensable for one that cannot coerce people but must persuade them.