First Annual Message to the National Congress
May 21, 1971
In this traditionally required presidential address to the new legislative session of the Congress, President Allende lays out a philosophical framework for the reforms his administration is introducing. Refusing to engage in a typical annual message's litany of statistics and self-praise, he instead explains the unique Chilean road to socialism with its five principles of legality, development of institutions, political freedom, nonviolence, and the creation of an "area of social ownership." He points out that a revolutionary government does not discard the bourgeois gains of the past but instead builds on them to construct — within democracy and pluralism — a broader people's regime with social and political liberties for all. A ringing call to "Marxist humanism" and "the socialist ideal," this speech includes special appeals to Chile's young people, farmers, professionals, small and medium-sized business enterprises, and, in the end, all of society — even the one-time capitalist monopolists! It rationally lays out the steps "our transitional regime" will take in moving Chile not into "state capitalism" but toward a socialism that uses both the market and state planning us "regulators of the economic process." Allende states his confidence in the professionalism and constitutionalism of the armed forces, along with his faith in "those who live by their work" and their ability to direct the state and build "the new social regime" to bring about the "triumph of the revolution." He concludes: "We shall overcome."
Fellow citizens of Congress:
Appearing before you in fulfillment of the constitutional mandate,  I attribute a two-fold importance to this Message. It is the first message of a government which has just taken office, and it corresponds to unique demands in our political history.
For this reason I wish to give it special content in accord with the present significant moment and because of its implications for the future.
For 27 years, I have attended this House, nearly always as a member of the parliamentary opposition.  Today I attend as chief of state, elected by the will of the people as ratified by the Congress.
I am well aware that here were debated and established the laws which set up an agrarian structure based on big estates; but here too, obsolete institutions were abolished in order to lay the legal foundations of the land reform which we are now carrying out. Here were established the institutional procedures for the foreign exploitation of Chilean national resources; but this same Congress is now revising these in order to return to the Chilean people what belongs to them by right.
Congress makes the legal institutions which regulate the social order in which they are rooted; for this reason, for more than a century, it has been more responsive to the interests of the powerful than to the suffering of the people.
At the very commencement of this legislative period, I must raise this problem. Chile now has in its government a new political force whose social function is to uphold, not the traditional ruling class, but the vast majority of the people. This change in the power structure must necessarily be accompanied by profound changes in the socio-economic order, changes which parliament is summoned to institutionalize.
This step forward in the liberation of Chilean energies for the rebuilding of the nation must be followed by more decisive steps. The land reform which is now in progress,  the nationalization of copper which is only awaiting the approval of the Plenary Congress,  must be followed by new reforms — whether these are initiated by parliament or by government proposal, or by the combined efforts of both powers, or by plebiscite,  which is a legal appeal to the foundation of all power, the sovereignty of the people.
We have accepted the challenge to reexamine everything. We urgently wish to ask of every law, every existing institution and even of every person whether or not they are furthering our integral and autonomous development.
I am sure that on few occasions in history has the parliament of any nation been presented with so great a challenge.
Overcoming capitalism in Chile
The circumstances of Russia in 1917 and of Chile at the present time are very different. Nevertheless, the historic challenge is similar.
In 1917, Russia took decisions which have had the most far-reaching effects on contemporary history. There it was believed that backward Europe could face up to advanced Europe, that the first socialist revolution need not necessarily take place in the heart of industrial power. There the challenge was accepted and the dictatorship of the proletariat, which is one of the methods of building a socialist society, was established.
Today nobody doubts that by this method nations with a large population can, in a relatively short period, break out of their backwardness and attain the most advanced level of contemporary civilization. The examples of the Soviet Union and of the Chinese People's Republic speak for themselves.
Like Russia then, Chile now faces the need to initiate new methods of constructing a socialist society. Our revolutionary method, the pluralist method, was anticipated by the classic Marxist theorists but never before put into practice. Social thinkers believed that the first to do so would be the more developed nations, probably Italy or France with their powerful Marxist-oriented working-class parties.
Nevertheless, once again, history has permitted a break with the past and the construction of a new model of society, not only where it was theoretically most predictable but where the most favorable concrete conditions had been created for its achievement. Today Chile is the first nation on earth to put into practice the second model of transition to a socialist society.
This challenge is awakening great interest beyond our national frontiers. Everybody knows or guesses that here and now history is beginning to take a new direction, even as we Chileans are conscious of the undertaking. Some among us, perhaps the minority, see the enormous difficulties of the task. Others, the majority, are trying to envisage the possibility of facing it successfully. For my part, I am sure that we shall have the necessary energy and ability to carry on our effort and create the first socialist society built according to a democratic, pluralistic and libertarian model.
The skeptics and the prophets of doom will say that it is not possible. They will say that a parliament that has served the ruling classes so well cannot be transformed into the parliament of the Chilean people.
Further, they have emphatically stated that the armed forces and the corps of Carabineros, who have up to the present supported the institutional order that we wish to overcome, would not consent to guarantee the will of the people if these should decide on the establishment of socialism in our country. They forget the patriotic conscience of the armed forces and the Carabineros, their tradition of professionalism and their obedience to civil authority. In the words of General Schneider, the armed forces are "an integral and representative part of the nation as well as of the state structure, that is, they belong both to the permanent and the temporary spheres, and are therefore able to organize and counterbalance the periodic changes which affect political life within a legal regime."
Since the National Congress is based on the people's vote, there is nothing in its nature which prevents it from changing itself in order to become, in fact, the parliament of the people. The Chilean armed forces and the Carabineros, faithful to their duty and to their tradition of nonintervention in the political process, will support a social organization which corresponds to the will of the people as expressed in the terms of the established constitution. It will be a more just, a more humane and generous organization for everybody, but above all for the workers, who have contributed so much up to the present and have received almost nothing in return.
The difficulties we face are not in this field. They reside in the extraordinary complexity of the tasks before us: to create the political institutions which will lead to socialism, and to achieve this starting from our present condition of a society oppressed by backwardness and poverty which are the result of dependence and underdevelopment; to break with the factors which cause backwardness and, at the same time, to build a new socio-economic structure capable of providing for collective prosperity.
The causes of backwardness resided and still reside in the traditional ruling classes with their combination of dependence on external forces and internal class exploitation. They have profited from their association with foreign interests, and from their appropriation of the surplus produced by the workers, to whom they have only awarded the minimum indispensable for the renewal of their laboring capacities.
Our first task is to dismantle this restrictive structure, which only produces a deformed growth. At the same time, we must build up a new economy so that it succeeds the previous one without continuing it, at the same time conserving to the maximum the productive and technical capacity that we have achieved despite the vicissitudes of our underdevelopment; and we must build it up without crises artificially provoked by those whose ancient privileges we shall abolish.
In addition to these questions, there is another which is an essential challenge of our time: How can people in general and young people in particular develop a sense of mission which will inspire them with a new joy in living and give dignity to their existence?
There is no other way than that of devoting ourselves to the realization of great impersonal tasks, such as that of attaining a new stage in the human condition, until now degraded by its division into the privileged and the dispossessed. Today nobody can imagine solutions for the distant future when all nations will have attained abundance and realized the satisfaction of material needs and at the same time have assumed the cultural heritage of humanity. But here and now in Chile and in Latin America, we have the possibility and the duty of releasing creative energies, particularly those of youth, in missions which inspire us more than any in the past. Such is the aspiration to build a world which does away with divisions into rich and poor; and for our part, to build a society in which the war of economic competition is outlawed; in which the struggle for professional privileges has no meaning; in which there is no longer that indifference to the fate of others which permits the powerful to exploit the weak.
There have been few occasions in which men have needed so much faith in themselves and in their capacity to rebuild the world and regenerate their lives.
This is an unprecedented time, which offers us the material means of realizing the most generous Utopian dreams of the past. The only thing that prevents our achieving this is the heritage of greed, of fear and of obsolete institutional traditions. Between our time and that of the liberation of man on a planetary scale, this inheritance has to be overcome. Only in this way will it be possible to call upon men to reconstruct their lives, not as products of a past of slavery and exploitation, but in the most conscious realization of their noblest potentialities. This is the socialist ideal.
An ingenuous observer from some developed country which has these material resources might suppose that this observation is a new manner that backward people have found of asking for aid — yet another plea of the poor for the charity of the rich. Such is not the case, but its opposite. With the internal authority of all societies brought under the hegemony of the dispossessed, with the change in international trade relations simulated by the exploited nations, there will come about not only the abolition of poverty and backwardness but also the liberation of the great powers from their despot's fate. Thus, in the same way as the emancipation of the slave liberates the slave owner, so the achievement of socialism envisaged by the peoples of our time is as meaningful for the disinherited peoples as for the more privileged, since both will then cast away the chains which degrade their society.
I stand here, members of the National Congress, to urge you to take up the task of reconstructing the Chilean nation according to our dreams, a Chile in which all children begin life equally, with equal medical care, education and nutrition. A Chile in which the creative ability of each man and woman is allowed to develop, not in competition with others, but in order to contribute to a better life for all.
Our road to socialism
To achieve these aspirations means a long road and a great effort on the part of all Chileans. It also implies, as a basic prerequisite, that we are able to establish the institutional apparatus of a new form of pluralistic, free socialist order. The task is one of extraordinary complexity because there are no precedents for us to follow. We are treading a new path. We are advancing without guides across unknown territory, but our compass is our faith in the humanism of all ages and particularly in Marxist humanism. Our aim is the establishment of the society that we want, the society which answers the deep-rooted desires of the Chilean people.
For a long time, science and technology have made it possible to create the productive system which will assure that everybody enjoys those basic necessities which today are enjoyed only by a minority. The difficulties are not technical, and — in our case at least — they are not due to a lack of national resources. What prevents the realization of our ideals is the organization of society, the nature of the interests which have so far dominated, the obstacles which dependent nations face. We must concentrate our attention on these structures and on these institutional requirements.
Speaking frankly, our task is to define and to put into practice, as the Chilean road to socialism, a new model of the state, of the economy and of society which revolves around man's needs and aspirations. For this we need the determination of those who have dared to reconsider the world in terms of a project designed for the service of man. There are no previous experiments that we can use as models; we shall have to develop the theory and practice of new forms of social, political and economic organization, both in order to break with underdevelopment and to create socialism.
We can achieve this only on condition that we do not overshoot or depart from our objective. If we should forget that our mission is to establish a social plan for man, the whole struggle of our people for socialism will become simply one more reformist experiment. If we should forget the concrete conditions from which we start in order to try and create immediately something which surpasses our possibilities, then we shall also fail.
We are moving towards socialism, not from an academic love for a doctrinaire system, but encouraged by the strength of our people, who know that it is an inescapable demand if we are to overcome backwardness and who feel that a socialist regime is the only way available to modern nations who want to build rationally in freedom, independence and dignity. We are moving towards socialism because the people, through their vote, have freely rejected capitalism as a system which has resulted in a crudely unequal society, a society deformed by social injustice and degraded by the deterioration of the very foundations of human solidarity.
In the name of the socialist reconstruction of Chilean society, we have won the presidential elections, a victory that was confirmed by the election of municipal councilors. This is the flag behind which we are mobilizing the people politically both as the object of our plans and as the justification for our actions. Our government plans are those of the Popular Unity  platform on which we fought the election. In putting them into effect, we shall not sacrifice attention to the present needs of the Chilean people in favor of gigantic schemes. Our objective is none other than the progressive establishment of a new structure of power, founded on the will of the majority and designed to satisfy in the shortest possible time the most urgent needs of the present generation.
Sensitivity to the claims of the people is in fact the only way we have of contributing to the solution of the great human problems; for no universal value is worth the name if it cannot be applied on the national or regional scale and even to the local living conditions of each family.
Our policy might seem too simple for those who prefer big promises. But the people need decent housing for their families, with proper sanitation; they need schools for their children which are not expressly intended for the poor; they need enough to eat every day of the year; they need work; they need care during sickness and in old age; they need to be respected as people. That is what we hope to offer all Chileans in the foreseeable future. This is what has been denied the people in Latin America throughout the centuries. This is what some nations are now beginning to guarantee their entire population.
But beyond this task, and as a fundamental prerequisite for its achievement, there is another equally important one. It is to engage the will of the Chilean people to dedicate our hands, our minds and our feelings to the reassertion of our identity as a people, in order to become an integral part of contemporary civilization as masters of our fate and heirs to the patrimony of technical skills, knowledge, art and culture. Turning the nation's attention to these fundamental aspirations is the only way to satisfy the people's needs and to wipe out the differences between them and the privileged classes. Above all, it is the only way to provide the young with a mission by opening up broad perspectives of a fruitful existence as builders of the society in which they will live.
The mandate entrusted to us embraces all the nation's material and spiritual resources. We have reached a point at which retreat or a standstill would mean an irreparable national catastrophe. It is my obligation at this time, as the one primarily responsible for the fate of Chile, to indicate clearly the road which we are taking and the dangers and hopes which it offers.
The Popular Government knows that the transcendence of a historical period is determined by social and economic factors which have already been shaped by this same period. These factors embrace the agents and modes of historical change. To ignore this would be to go against the nature of things.
In the revolutionary process which we are living through, there are five essential points upon which we shall concentrate our social and political campaign: the principle of legality, the development of institutions, political freedom, the prevention of violence, and the socialization of the means of production. These are questions which affect the present and the future of every citizen.
The principle of legality
Legality is a governing principle today in Chile. It has been achieved as a result of the struggle of many generations against absolutism and arbitrary exercise of state power. It is an irreversible achievement for as long as differences exist between rulers and ruled.
It is not the principle of legality which the mass movements are protesting against. We are protesting against a legal system whose basic assumptions reflect an oppressive social order. Our legal norms and the regulating machinery of Chilean social relationships correspond at the present time to the needs of the capitalist system. In the transition to socialism, legal norms will correspond to the needs of a people engaged in building a new society. But there will be legality.
Our legal system must be modified. Hence the great responsibility of the two Houses at the present time: to help and not to hinder the changes in this system. On whether the Congress takes a realistic attitude depends to a great extent whether capitalist legality will be succeeded by socialist legality in conformity with the social and economic changes we are making and without a violent break in jurisdiction which would open the door to arbitrary acts and excesses which we, as responsible people, wish to avoid.
The development of institutions
The obligation to organize and govern society according to the rule of law is inherit in our system of institutions. The struggle of the popular movements and parties which are now in the government has contributed greatly to one of the most promising situations to obtain in this country. We have an open system which has defied even those who would seek to infringe upon the will of the people.
The flexibility of our institutions allows us to hope that they will not be a bitter bone of contention. And that, like our legal system, they will adapt to new needs in order to give rise, by constitutional means, to the new institutions required by the overthrow of capitalism.
The new institutions will conform to the principle which justifies and guides our actions, that is, the transference of political and economic power to the workers and to the people as a whole. In order to make this possible, the first priority is the socialization of the basic means of production.
At the same time, political institutions must be adjusted to this new situation. For this reason we shall, at an opportune moment, submit to the sovereign will of the people the necessity of replacing the present constitution, with its liberal foundations, by a constitution of a socialist nature and of replacing the bicameral system by a single house.
It is in accordance with this that we have committed ourselves in our government program to the realization of our revolutionary task while respecting the rule of law. It is not simply a formal commitment but an explicit recognition that the principles of legality and institutional order are inseparable from a socialist regime despite the difficulties involved in the transitional period.
To maintain these institutions while changing their class basis during this difficult period is an ambitious undertaking of decisive importance for the new social order. Nevertheless, its achievement does not depend solely on our will. It will depend fundamentally on the planning of our social and economic structure, on its short-term evolution and on the degree of realism shown by our people in their political action. At the moment we believe that it is possible, and we are acting upon that assumption.
It is also important to remember that for us, as representatives of the popular forces, political freedom represents the achievement of the people on the difficult road to emancipation. It is an element of real achievement in the historical period that we are now leaving behind. And for this reason, freedom must remain. That is why we respect freedom of conscience for all creeds. That is why we are happy to underline the words of the Cardinal Archbishop of Santiago, Raul Silva Henríquez, in his message to the workers: The Church which I represent is the Church of Jesus, the son of a carpenter. It began as such, and as such we go on loving it. Its greatest sorrow is that people believe it has forgotten its cradle, which is among the humble.
But we would not be revolutionaries if we limited ourselves simply to preserving political freedom. The Popular Unity Government will strengthen political liberties. It is not sufficient to proclaim them verbally, because this makes them a source of frustration or mockery. We shall make them real, tangible and concrete, and practicable in the process of achieving economic freedom.
In consequence, the Popular Government bases its policy on a premise which some people artificially reject, that is, on the existence of social classes and sectors with opposing and mutually exclusive interests, and on the existence of unequal political levels within the same class or group.
In the face of this diversity, our government is concerned with the interests of all those who earn their living by their own labor: workers, members of the professions, technicians, artists, intellectuals and white collar workers. These are a group which is growing as a result of capitalist development and becoming more united because of its members' common condition as wage-earners. For the same reason, the government gives protection to both the small and the medium-sized business sectors, that is, to all sectors which, to a greater or lesser extent, are exploited by the minority who hold the centers of power.
The multi-party coalition of the Popular Government corresponds to this reality. And in the daily confrontation of its interests with those of the ruling classes, it uses the techniques of bargaining and agreement established by the legal system, recognizing at the same time the political freedom of the opposition and keeping its own actions within institutional limitations. Political freedom represents the achievement of the entire Chilean people as a nation.
As president of the republic, I have fully ratified all these principles of action, which are supported by our revolutionary political theory, conform to the present national situation, and are included in the program of the Popular Unity Government.
They form part of our plan for developing to the maximum the political potentialities of our country so that the stage of transition towards socialism will be characterized by the selective overcoming of the present system. This will be achieved by destroying or abandoning its negative and oppressive features and by strengthening and broadening its positive features.
The Chilean people are achieving political power without having to use arms. They are taking the road of social emancipation having had to fight only the limitations of a liberal democracy and not a despotic or dictatorial regime. Our people legitimately hope to go through the stage of transition to socialism without having recourse to authoritarian forms of government.
Our wishes are very clear on this point. But the responsibility for guaranteeing the political evolution towards socialism does not reside only in the government and in those movements and parties which it comprises. Our people have stood up to the institutionalized violence which the present capitalist system has held over them. And for this reason we are changing the basis of that system.
My government owes its existence to the popular will freely expressed. It answers to this alone. The movements and parties which are included in it reflect the revolutionary conscience of the masses and express the people's ambitions and interests. They are directly responsible to the people.
Nevertheless, it is my duty to warn you that a danger may threaten the straight road to emancipation and could radically alter the direction which our situation and our collective conscience have marked out for us. This danger is violence directed against the people's determination.
Should violence from within or without, should violence in any form, whether physical, economic, social or political, happen to threaten our normal development and the achievement of our workers, then the integrity of our institutions, the rule of law, political freedom and pluralism will be put in the greatest danger. The fight for social emancipation and for the free determination of our people would necessarily take a different form from that which we, with legitimate pride and historical realism, call the Chilean road to socialism. The determined attitude of the government and the revolutionary energy of the people, the democratic resolution of the armed forces and the Carabineros, will see that Chile advances surely along the road to emancipation.
The unity of the popular forces and the good sense of the middle sectors give us the necessary superiority to prevent the privileged minority from having recourse to violence. If violence is not released against the people, we shall be able to change the basic structures on which the capitalist system rests into a democratic, pluralistic and free society, and to do this without unnecessary physical force, without institutional disorder, without disorganizing production, and at a speed which the government will determine according to the needs of the people and the level of development of our resources.
The attainment of social freedom
Our aim is the attainment of social freedom through the exercise of political freedom, and this requires the establishment of economic equality as a basis. This is the road which the people have decided upon because they know that the revolutionary transformation of a social system must go through intermediate stages. A revolution that is simply political may consume itself in a few weeks. A social and economic revolution takes years. Time is necessary for the conscience of the masses to be penetrated, for new structures to be organized and made operable as well as to be adapted to the existing ones. It is sheer utopianism to imagine that the intermediary stages can be skipped. It is not possible to destroy a social and economic structure and existing social institutions without at least having first developed a replacement. If the natural exigencies of historical change are not recognized, then reality will remind us of them.
We are very well aware of the lesson of victorious revolutions, the revolutions of those countries which, faced with foreign pressure and civil war, had to speed up their social and economic revolution in order not to fall back into bloody despotism and counterrevolution. Only recently, decades afterwards, have they organized the necessary structures for the definitive overthrow of the previous regime.
The direction which my government has planned takes into account these facts. We know that to change the capitalist system while respecting law, institutions and political freedoms demands that we confine within certain limits our actions in the economic, political and social fields. This is perfectly well known to every Chilean. These limits are indicated in the government program which is being carried out resolutely and without concessions, and in the manner and at the speed which we have previously made known.
The Chilean people, showing their increasing maturity and organization, have entrusted the Popular Government with the defense of their interests. This obligates the government to act on the basis of its total identification and integration with the masses whose will it interprets and orients and prevents it from distancing itself from the masses and acting in a dilatory or precipitate manner. Today more than ever, the synchronization between the people, the popular parties and the government must be precise and dynamic.
Every historical change corresponds to conditions established at previous stages and creates the elements and agents which are to follow. To pass the transitional stage without restriction of their political liberties, without having a legal or institutional vacuum, is a right and a legitimate demand of our people, its full material realization in concrete terms being presumed in a socialist society. The Popular Government will fulfill its responsibility at this decisive time.
The principal constructive agent of the new regime consists in the organization and the conscience of our people, in permanent mobilization in many forms— political parties of the masses, labor unions — according to the objective needs of each moment.
We hope that this responsibility, which is not necessarily that of the government alone, is shared by the Christian Democratic Party,  which must demonstrate consistency in adhering to the principles and programs which it has so often laid before the country.
Socialization of the means of production
Fellow citizens: In six months of government, we have acted with decision on all fronts. Our economic work has been aimed at breaking down the barriers which impede the complete fulfillment of our material and human potentialities. In six months of government, we have advanced energetically along the path of irrevocable change. The printed statement which we have just distributed gives a full and detailed account of our activities.
Chile has begun the definitive recovery of our most fundamental source of wealth: copper. The nationalization of our copper is not an act of vengeance or hatred directed towards any group, government or nation. We are, on the contrary, positively exercising an inalienable right on behalf of a sovereign people: that of the full enjoyment of our national resources exploited by our national labor and effort. The recovery of copper is a decision by the whole of Chile, and we demand that all countries and governments respect the unanimous decision of a free people. We shall pay for the copper if it is right to pay, and we shall not pay if it is unjust. We shall watch over our interests. But we shall be implacable if we find out that negligence or fraudulent activity on the part of any persons or entities has harmed the country.
We have nationalized another of our basic resources: iron. A short time ago, negotiations with the Bethlehem corporation were concluded,  and as a result, iron mining passed over completely to public ownership. We are now studying the constitution of the national steel complex which will group six companies together around the CAP.  The agreement with North American industry has once again shown that the government is offering a fair settlement to foreign capital without sacrificing the fundamental interests of our nation. But we are not prepared to tolerate the contempt for our laws and the lack of respect for established authority that we find in some foreign firms. We have also taken over coal as collective property. 
The nitrate resources are also ours.  According to a settlement by the previous government, we owed $24 million in debentures payable in 15 years, which with interest amounts to $38 million. The shares belonging to the North American sector were theoretically worth $25 million. All this has now been redeemed for $8 million payable in two years.
We have incorporated various firms — among them Purina,  Lanera Austral, and the Bellavista Tome, Fiap and Fabrilana textile plants  — into the area of public ownership; we have requisitioned the cement industry and the Yarur [textile] industry when supplies were threatened. In order to prevent bankruptcy, we have acquired an important share of the assets of the Zig Zag Publishing House, which forms a big part of our graphics and publishing industry, so that it can satisfy the cultural needs of the new Chile.
In all the firms that have been taken into public ownership, the nation can bear witness to the determined support of the workers, the immediate increase in productivity, and the active participation of workers, white-collar personnel and technicians in management and administration.
We have speeded up land reform and have already achieved a major part of this year's plan: the expropriation of 1,000 big estates. The reform is going forward in accordance with existing legislation, and is protecting the interests of the small and medium-sized farmers. We want to build up a new and more vigorous agriculture, more solid in organization and more productive. We want the men who work the land to benefit fairly from the fruits of their labor. The state ownership of banks has been a decisive step.  With absolute respect for the rights of the small shareholder, we have established state control over nine banks and are on the point of obtaining majority control in the others. On the basis of previous experience, we are hoping for a reasonable settlement with foreign banks. We are thus trying to gain control of the financial apparatus and to widen the social area in the sectors which produce material goods. We want to place the new banking system at the service of the socialized area and of the small and medium-sized industrialists, merchants and farmers, who until now have been discriminated against.
Our present economic policy
These have been our first acts towards the initiation of the essential and definitive change in our economy. But we have done not only this. We have also planned a short-term policy whose central objective has been to increase the availability of material goods and services for consumption, and we have directed that increase towards the less-favored sectors.
We are carrying on a fierce struggle against inflation,  and this is the key to our policy of redistribution. The fight against inflation has acquired a new political connotation; it will be a dynamic element in the popular struggle. To halt the rise in prices means that the people will maintain the increased spending power that has been given them, and this will be definitively consolidated with the deeper entrenchment of socialist organization. At the same time, independent businessmen can earn fair profits, the higher volume of production compensating for the smaller profits on each item.
In practice this policy has borne appreciable fruits in terms of redistribution. Nevertheless, we know that this planned reactivation faces obstacles. On the one hand, some groups of business are attempting to hinder the success of our measures by means of an open or a covert slowdown in production. On the other hand, some sectors which are imprisoned in a traditional model of low production and high profit lack audacity and are unable to understand the present juncture or to play a greater part in the productive process. To do so is, nevertheless, their social duty. To those who do not fulfill this duty, whether deliberately or not, we shall apply all the legal resources within our power to go on urging them and, if necessary, to make them produce
We are also carrying out a social policy to improve the diet of our children; to provide speedier medical care; to increase substantially the capacity of our educational system; to initiate the necessary housing construction program; and to plan greater absorption of the unemployed as an urgent national need. We are doing this without disorder and with justice, endeavoring always to keep the social cost as low as possible. Today the citizen of our nation has greater buying power, consumes more and feels that the fruit of the common effort is better distributed. At the same time, he has the right to feel that he owns the mines, the banks, industry and the land, that he owns the future.
We are neither measuring ourselves against nor comparing ourselves with previous governments. We are fundamentally different. But if that comparison were to be made, using even the most traditional indicators, we would come out favorably. We have achieved the lowest rate of inflation in recent years; we have begun the most effective redistribution of revenues that Chile has ever seen. We shall build more houses this year than have ever been built before in a similar period. Despite the gloomy predictions, we have maintained the normal flow in supplies of essential goods.
Limits on government action
We are fundamentally different from previous governments. This government will always speak the truth to the people. I believe it is my duty to state honestly that we have committed mistakes; that unforeseen difficulties are slowing down the execution of plans and programs. But although the copper produced was not up to the target and although nitrate production did not reach a million tons, although we did not build all the houses that we planned, in each one of these sectors we have surpassed the highest rate of copper and nitrate production and of housing construction that our country has ever recorded. We have not managed to coordinate adequately the various institutions of the state sector, owing to inefficiency in some decisions. But we are designing more expeditious methods of rationalizing and planning.
Immediately on assuming power, we set ourselves to fulfill our promises to the country. Together with the Unitary Workers Center  we studied the Readjustments Law  and signed the CUT-government agreement. We have sent a bill to Congress in which we propose for the public sector a pay increase 100 percent equal to the rise in the cost of living, and an increase on a greater scale in the corresponding minimum wages in the private sector. But I believe it was a mistake not to come to a broad agreement with the workers in order to arrive at more precise readjustments applicable in both the public and the private sectors.
Another limitation that we have suffered lies in the administrative, legal and procedural deficiencies of some of the basic government plans. For this reason the housing project, for example, got off to a slow start; and this has prevented the reactivation of certain industries and the absorption of a greater number of unemployed. In the months of April and May, economic activity connected with building began to get under way.
There is a vast area of public activity, comprising the public service sector, where there are deep-rooted evils. Millions of Chileans are the daily victims of bureaucratic paperwork, of delays and red tape. Each step requires dozens of transactions, forms, signatures and official stamps. How many hours are lost by every Chilean in his fight against red tape, how much creative energy is lost, how much useless irritation suffered. The government authorities have still not directed sufficient effort towards eradicating this endemic evil. The most responsible sectors of white-collar workers have called attention to it.
We have also moved slowly in outlining the social machinery for the participation of the people. The bill which will give legal status to CUT is now ready; it will institutionalize the participation of the workers in the political, social and economic management both of the state and of economic enterprises. But we have barely outlined the form their participation will take in the regions, in the communities and in private organizations. We ought to guarantee not only a vertical participation of workers in their separate branches — that of industrial workers, for example, in their plants — but also a horizontal participation which allows peasants, manufacturing workers, miners, white-collar workers and members of the professions to come together and discuss the problems of a particular economic region or of the country as a whole.
These types of participation not only tend to bring about a fairer distribution of income but also help to ensure a greater yield.
This horizontal integration of the people is not easy and will doubtless require political maturity and collective consciousness, but it is well for us to start realizing now that the improvement of production on a collective farm depends also on workers in machinery and in tool and fertilizer plants, on the workers who build new roads, and on the small and medium-sized merchants who distribute the goods. Production is the responsibility of the working class as a whole.
Another criticism which we have to make of ourselves is that in these first six months we have still not managed to mobilize the intellectual, artistic and professional capacity of many Chileans. There is some way to go before all scientists, members of the professional classes, builders, artists, technicians, householders, all those who can and wish to cooperate in the transformation of society, find a place in which they can use their talents.
The immediate tasks
In the remaining months of 1971, copper will definitely come under Chilean ownership. On the efforts of the workers, white-collar personnel and technicians of the Chuquicamata, El Teniente, Exotica, El Salvador and Andina mines  depends to a great extent the volume of production which we shall achieve this year, and therefore our ability to obtain foreign exchange and so maintain normal supplies and realize our investment programs. Copper represents the livelihood of Chile. Those who administer this wealth and those who extract it from the earth hold in their hands not only their own destiny and their own well-being but also the destiny and well-being of all Chileans.
We must extend land reform and if necessary modify the law, for if copper is Chile's livelihood, the land is its bread.
The land must be made to produce more. This is the responsibility of the peasants and of the small and medium-sized landowners, but the government recognizes its mistakes and it is fair that others should also recognize theirs. The occupation of land by squatters, the indiscriminate occupation of agricultural terrains, is unnecessary and harmful. Belief in the government is warranted by what we have done and by our attitudes. For this reason, the plans made by the government and the time fixed for their execution must be respected. We invite political groups and individuals who are not in the Popular Unity to meditate seriously upon this.
Fellow citizens: The creation of the area of social ownership is one of our great objectives. The incorporation into this area of the major part of our basic wealth, the banks, the big estates and a large proportion of our foreign trade as well as of industrial and distributive monopolies is a task that we have already begun and that must now be amplified.
On the economic plane, the establishment of socialism means replacing the capitalist mode of production by a qualitative change in the relations of ownership; it also implies a redefinition of the relations of production. In this context, the creation of the area of social ownership has a human, political, and economic significance. The incorporation of large sectors of the productive apparatus into a system of collective ownership puts an end to the exploitation of the worker, creates a deep feeling of solidarity, and permits the individual worker and his efforts to form part of the common work and the common endeavor.
In the political field, the working class knows that it is fighting for the socialization of our principal means of production. There is no socialism without an area of social ownership. To incorporate new firms day by day requires a permanent state of vigilance on the part of the working class. It also requires a high degree of responsibility. To construct socialism is not an easy task; it is not a short task. It is a long and difficult task in which the working class ought to participate in a disciplined, organized and politically responsible manner, avoiding anarchistic decisions and inconsistent voluntarism.
The importance of the public sector is traditional in our country. Approximately 40 percent of spending is public. More than 70 percent of investment is of state origin. The public sector was created by the national bourgeoisie in order to promote private accumulation and to consolidate the means of production, concentrating their technological resources and ownership.
Our government wants to make this sector quantitatively more important, but also to make it qualitatively different.
The state apparatus has been used by monopolies for the purpose of relieving their financial difficulties, for obtaining economic help and for strengthening the system. Up to now the public sector has been characterized by its subsidiary role in relation to the private sector. For this reason some public enterprises show large total deficits, while others are unable to produce profits comparable in size to those of some private enterprises.
Besides, the state machinery of Chile has lacked the necessary coordination between its different activities. As long as this is the case, it will be impossible for it to make a decisive contribution to a socialist economy. The control of some branches of production does not mean that the public sector has the machinery to direct and fulfill the objectives of socialism with respect to employment, saving, increase in productivity and the redistribution of income.
It is therefore necessary to widen the scope of public ownership and give it a new outlook. The expropriation of the most important means of production will permit the attainment of the degree of cohesion in this public machinery indispensable for the realization of the great national objectives. Hence one of the general criteria for the definition of the area of public ownership is the need to conceive this as a single, integrated whole, able to realize all its potentialities in a short or medium term.
This implies an urgent need to set up a planning system which devotes the economic surplus to the different productive assignments. This year we have begun to set up such a system, creating advisory bodies such as the National and Regional Development Councils.  The Annual Plan for 1971 has been laid down and for the rest of the year the planning organizations will work out the national economic plan for 1971-1976. It is our intention that no investment project shall be carried forward unless it is included in these centrally approved government plans. In this manner, we shall put an end to improvisation and begin to organize socialist planning in agreement with the Popular Unity program. The existence of socialized ownership requires, by definition, a planning method which is both capable and effective and which is endowed with sufficient institutional power.
The advantages of socialism are not spectacularly displayed in the first stages of construction. But the creation of a real morality of work and the political mobilization of the proletariat not only around the government but also around the means of production will overcome the obstacles.
The establishment of the area of public ownership does not mean the creation of a state capitalism, but the true beginning of a socialist structure. The sector of public ownership will be directed jointly by the workers and by representatives of the state, as the uniting link between each enterprise and the whole of the national economy. It will not be inefficient bureaucratic enterprises but highly productive units which will lead the country's development and confer a new dimension on labor relations.
Our transitional regime does not consider the existence of the market as the only regulator of the economic process. Planning will be the main guide for the productive processes. Some will believe that there are other ways. But the formation of workers' enterprises integrated into the liberal market would mean dressing up wage-earners as so-called capitalists and pursuing a method which is a historical failure.
The supremacy of social ownership implies holding back and utilizing the surplus that has been produced. It is therefore necessary to guarantee that the financial sector and a large part of the distributive sector be included in the area of public ownership. In short, we have to control the productive, and financial processes and also, to some extent, the trade sector.
We have to strengthen the area of social ownership, pouring the power of the state, expressed in its economic policy, into this task; our credit policy, our fiscal, monetary and wage policies, our scientific and technological policies, our trade policy, must all be subordinated to the needs of socialist accumulation, that is to say, to the interests of the workers.
Simultaneously, we must help the small and medium-sized industrialists, shopkeepers and farmers, who have for many years belonged to a sector exploited by the big monopolies, to make their contribution. Our economic policy guarantees them a fair deal. There will be no more financial exploitation, and the large-scale buyer's extortion from those who sell on a small scale will end. The small and medium-sized industries will play an active part in the new economy. Within a more rationally organized machinery which is directed towards production for the great majority of the nation, they will appreciate the support of the public sector. The limits of the private, mixed and public sectors will be precisely drawn.
We are facing an option for change unique in economic history. No country has achieved an acceptable economic development without huge sacrifices. We do not pretend to have discovered the recipe for making economic progress and achieving a fairer social system without cost. We are not offering to build overnight a socialized economy with fair distribution of income, with monetary stability and full employment, with high levels of productivity. On the other hand, we are offering to build that society at the least possible social cost imaginable in our circumstances.
Socialism is not a free gift which people happen to find in their path. Neither is the liberation that accompanies it.
Attaining it means postponing some present possibilities in exchange for founding a more humane, richer and more just society for the future.
Our foreign policy
The same principles which inform our internal policy inform the foreign policy of the country. In agreement with the United Nations Charter, our country resolutely supports nonintervention in the internal affairs of nations, juridical equality between them, and respect for their sovereignty and for the exercise of their right to self-determination.
My government's foreign policy is directed both bilaterally and multilaterally towards the consolidation of peace and towards international cooperation. As a result, Chile has extended its diplomatic relations to new countries. Our first decision, in obedience to the wish of the majority of the Chilean people, was to reestablish relations with Cuba, upon which unjust sanctions had been imposed. We have also established diplomatic and economic relations with China, Nigeria and the German Democratic Republic. We have established commercial relations with the Democratic Republics of Korea and North Vietnam, and within the Latin American sphere we have supported the reduction of arms before the Organization of American States. 
Chile collaborated in the "Declaration of the Principles of International Law for Friendship and Cooperation Between Nations," adopted by the General Assembly of the United Nations at the end of last year. We have also supported a program of action to apply the "Declaration on the Granting of Independence to Colonial Nations and Peoples," and we have taken part in the formulation of the international strategy for the "Second Decade of the United Nations Development Program."
Our fight against underdevelopment and against dependence on foreign hegemonies gives Chile a community of interests with the peoples of Africa and Asia. For this reason the Popular Government has decided to participate actively in the group of so-called unaligned nations and to take a determined part in their deliberations and agreements. Our concept of the universal scope of the United Nations leads us to vote in favor of the legitimate rights of the Chinese People's Republic. Our respect for the independence of all countries requires us to condemn the Vietnam war and its extension into Laos and Cambodia.
Within the general lines of this policy, we are collaborating in the United Nations Commission for Trade and Development (UNCTAD), the third world conference of which will take place in Santiago in April 1972. Furthermore, I have the honor to inform you that I have received repeated invitations to visit countries of this and other continents. I have thanked these nations for their courtesy in the name of Chile.
It is the purpose of this government to maintain friendly and cooperative relations with the United States. We have persevered in creating the conditions for making our position understood in order to avoid the outbreak of conflict and to prevent inessential questions from hindering this purpose and making it difficult to negotiate the friendly settlement of any problems that might arise. We believe that this realistic and objective course of action will be respected by the people and the government of the United States.
We have raised our voice as a sovereign people respected by all nations, and with the dignity of those who speak in the name of a worthy country. This we have done in ECLA  and CIAP,  and in all the special meetings where our representatives have expressed our thinking.
We have spoken repeatedly of the deep crisis which the inter-American system and its representative body, the Organization of American States, are passing through. The said system is based upon a supposed equality among its members when, in fact, there is absolute inequality, when the marked imbalance in favor of the United States protects the interests of the most powerful and prejudices those of the weaker nations. This takes place in a global context of dependence whose negative effects are evident at all levels. Thus the present dollar crisis, which had its origin in the internal and foreign policy of the United States, threatens to injure all the industrial capitalist countries. But it will have even more harmful repercussions upon the Latin American economies to the extent that it reduces our monetary reserves, diminishes our credit and restricts trade relations.
We also insist that the multilateral character of international financial organizations must be maintained free of all political pressures.
The member countries of these institutions cannot have their rights questioned because of the form of government they have chosen. And the international financial organizations cannot act on behalf of powerful countries against the weak. To use direct or hidden pressure in order to hinder the financing of technically suitable projects is to alter the declared aims of these organizations and represents a perverse way of interfering in the internal affairs of those countries in defiance of their needs.
Our efforts to broaden and strengthen all kinds of relations with the countries of Western Europe have been greeted with definite interest on their part, an interest which has already had real results.
In the increase in exchange and collaboration with the socialist countries my government sees a suitable method of protecting our interests and simulating the economy, technology, science and culture as a means of serving the working class of the entire world.
Latin America is in an abject state which none of its countries have been able to change by the traditional and ineffective means.
For some time Colombia, Peru, Bolivia, Ecuador and Chile proposed replacing the old formulas by new ones which, through regional integration, will permit the harmonious development of our resources in favor of our common objectives. The Andean Pact  is an exemplary undertaking into which the Popular Unity Government is putting all its efforts. We have demonstrated as much both in Lima and Bogota.
My government attaches special importance to maintaining the best possible relations with the sister nations of the continent. It is our fundamental aim to strengthen all the links which will increase our continued friendship with the Argentine Republic, eliminating the obstacles which stand in the way of realizing this objective. The anomalous state of our relations with the Republic of Bolivia conflicts with the aims of both peoples, and for this reason we shall do everything in our power to restore them to normal. 
The workers' leading role
Everything we have discussed in the political, economic, cultural and international fields represents the task of a whole nation, not that of one man or one government.
Between the months of November and February, the number of workers who have been obliged to go on strike has decreased from 170,000 to 76,000. The Popular Government's identification with the workers who share its successes and setbacks has made disputes unnecessary which were formerly inevitable. This year there have been no strikes in the coal, nitrate, copper, iron and textiles industries, the health services, education or railroads. In other words, there have been no strikes in those sectors which are vital to the nation's progress.
I should like to emphasize that for the first time in Chile, voluntary work has been introduced on a permanent basis in some state enterprises. And also, that for the first time it is being carried on in all areas of national life and on a massive scale from Arica to the Straits of Magellan. Soldiers, priests, students, workers, members of the professions and shopkeepers, old and young, are participating freely, spontaneously and in their own time in the common tasks. It is a much more creative development than working for profit. And it is an eloquent reply to those who, inside and outside Chile, would like to believe things that have never happened never will. In this country there is and there will be a government which knows what methods to apply and when to apply them. As president, I assume responsibility for this.
The great achievements that lie before us will depend on the responsible and determined identification of the worker with his own real interests, which are more far reaching than the small or big problems of this day, this month or this year. In the solidarity of the workers and their political representative, the Popular Government, we have an invincible instrument.
Those who live by their work have in their hands today the political direction of the state. It is a supreme responsibility. The building of the new social regime is based on the people, who are its protagonist and its judge. It is up to the state to guide, organize and direct but never to replace the will of the workers. In the economic as well as in the political field, the workers must retain the right to decide. To attain this means the triumph of the revolution.
The people are fighting for this goal. They are fighting with the legitimacy that comes from respecting democratic values; with the assurance given by our program; with the strength of being the majority; with the passion of the revolutionary.
We shall overcome.
1. According to Article 56 of the Constitution: "Congress shall convene its ordinary session on May 21 of each year, and adjourn on September 18. The President of the Republic shall report to Congress on the administrative and political state of the country at the inauguration of each ordinary legislative session."
2. President Salvador Allende first won election as a Deputy in 1937, a position he resigned in 1939 to become Minister of Health in the Popular Front Government of Pedro Aguirre Cerda. He was a Senator from 1945 until his election to the presidency in 1970, and President of the Senate from 1966 to 1969.
3. Law 16,640 of July 28,1967, empowered the Executive to expropriate abandoned or poorly cultivated plots and all first-class irrigated land exceeding 192 acres, or its equivalent, in Santiago province. The previous government had expropriated 1,410 plots; in the first six months of the present administration, 504 plots have been expropriated.
4. The Plenary Session of Congress, on July 11, 1971, approved a constitutional amendment which provides the legal means for the nationalization of the five largest cooper mines currently operating in the country. The Plenary Session is the meeting of both houses of Parliament, the Chamber of Deputies (lower house) and the Senate, as one body.
5. The constitution provides for a plebiscite on certain matters when the Executive and Legislative branches cannot reach agreement.
6. Unidad Popular is the name of the coalition formed by the Socialist, Communist and Radical Parties, the Movement of United Popular Action (MAPU), the Social Democratic Party and the Independent Popular Action (API). These parties form the base of the present government. The election for municipal councillors, held on April 4, 1971, saw the governing Popular Unity winning 49.7 percent of the vote in a four-way field.
7. The Christian Democratic Party, headed by President Eduardo Frei, governed the country from November 4,1964, to November 3,1970.
8. The government of Chile bought the stock of Bethlehem Steel following negotiations toward a contract signed in March of 1971.
9. The National Steel Complex will comprise the state-owned Compañía de Aceros del Pacífico (CAP, Pacific Steel Industry), and a number of related industries dealing with iron ore, industrial or metallurgical processing and certain areas of household appliances (white line). The 60 percent of CAP'S stock that was privately owned in the past was purchased by the state in March 1971.
10. The state bought, through the Corporation de Fomento de la Producción (Development Corporation), 51 percent of the stock of the Lota Schwager Company; the remaining 49 percent is in the hands of small private stockholders.
11. Since 1967, the exploitation of nitrates had been carried on by a mixed enterprise, in which the state owned 37.5 percent of the stock, the rest belonging to Anglo Lautaro Company. In 1970 the state's share rose to 51 percent, and on May 28, 1971, the state legally purchased the remainder of the stock.
12. Animal-feed industry. The state entered negotiations for the purchase of its stock at the beginning of 1971.
13. The government's actions have been directed towards the establishment of a national textile complex that would increase output and prevent unemployment in this area.
14. As of June 30, 1971, the state had obtained a majority control of the stock of 11 of the 20 national private banks existing in the country. The government was carrying on negotiations with each of the six foreign banks operating in the country. The objective of this nationalization is to democratize credit, that is, to facilitate a more even distribution by location and economic activity and to make credit available to a larger number of people.
15. The consumer price index for the first six months of 1970 rose by 23.9 percent. The figure for the same period in 1971 was 11.1 percent.
16. Central Unica de Trabajadores (CUT), national workers confederation of Chile.
17. Ley de Reajustes. Every year Congress passes legislation specifying the scale of remuneration of government employees; remunerations in the private sector are affected by the setting of minimum levels for this sector.
18. These are the five largest copper-mining enterprises and constitute what is called the Gran Mineria (Great Mining). They have operated in the last few years as mixed enterprises in which the state controlled between 25 and 51 percent of the shares. The companies, who owned the rest of the shares, were Anaconda Company (El Salvador, Exotica and Chuquicamata), Kennecott Copper Corporation (El Teniente) and Cerro Corporation (Andina).
19. The National Development Council is chaired by the president of the republic and consists of several Cabinet ministers, the leadership of various economic institutions, and management and worker representatives. Its objective is to assist the president in formulating plans for development. The Regional Development Councils are formed by local authorities and include worker and management representatives; their function is to assist the President in setting guidelines for development policies for each region.
20. A regional organization comprising the nations of the Western Hemisphere, except for Cuba, which was excluded in January 1962, and Canada, which never joined.
21. The Economic Commission for Latin America, a subsidiary body of the United Nations Economic and Social Council with headquarters in Santiago. The Commission was created in 1948 to provide studies, analyses and recommendations for the development of the region.
22. The Inter-American Committee for the Alliance for Progress, created in 1963 to make an annual examination of the progress of development of the member nations and make recommendations for the assignment of funds.
23. A regional agreement between Colombia, Ecuador, Bolivia, Peru and Chile, signed at Cartagena, Colombia, in May 1969, for the purpose of economic cooperation.
24. Chile and Bolivia broke off diplomatic relations in October of 1962 because of a disagreement over the use of waters of the border river Lauca.