The Chilean Road to Socialism


CHAPTER 19

The Right

The Chilean political Right bases its politics on a spirited defense of private property. The Popular Unity is not the first Chilean government to modify in theory and fact the classical concept of private property as the institutional basis for society, and the laissez-faire conception of the state. The Popular Front government of 1938 redefined the function of property and enlarged the role of the state, as did each succeeding government. Many Chileans began to view private property as the root cause of underdevelopment and untenable inequalities in the distribution of wealth, privilege, and power. The Popular Unity now proposes that private property in those spheres central to the economic life of the country be eliminated and that the state assume over-all responsibility from private capital for economic and social development, while utilizing state control of wealth-producing centers to eliminate the extreme inequalities of the previous society. In spite of the gradual erosion in the legitimacy of the private property and laissez-faire concepts over time, Chilean conservatives still strenuously argue that there can be no freedom without private property. In their view, Chile is now headed for dictatorial, bureaucratic collectivism.


The Erosion of Private Property
An unsigned editorial from the conservative magazine Portada, February 18, 1971.

"Because of fear, demagogy, sentimentalism, or ideological confusion, we Chileans have accepted the erosion of the concept of private property in deed and in right. We now see that this process inevitably brings forth unfreedom and bureaucratic tyranny."

There Can Be No Freedom Without Private Property

The Western World has known many forms of political and juridical freedom, many forms of property. The practical exercise of freedom has always been indissolubly tied to the existence of private property.

By property we mean of course more than the meagerly protected right under our present Constitution to live in one's own town house or countryside ranch.

The private-property system is one that secures for private individuals real as well as potential control over the means of production. . . .

The private-property system protects the private sphere so that the state may not be the ultimate and only employer, the only creditor, the sole entrepreneur, the only educator and sole shaper of public opinion.

No one can deny that the private-property system has its failings. Nor can anyone deny that the reduction of private property to small units, far from correcting the defects of such a system, further deprives the individual of choosing between jobs, occupation, creditors, educational establishments, and means of information, transforming him into a mere functionary, reducing his life to the frightful brutishness of routine.

A Gray Dawn

If private property were an unjustified privilege, its gradual erosion and final collapse should be saluted as the dawn of a new history for Chile. However, no free man can watch without fear the emergence of a totalitarian state, a state whose power is no longer limited by the rights of private citizens, that is, in the last analysis, by private property itself.

Claiming that the right to private property is not universal in the capitalist system, since many of its members are dispossessed, the collectivist proceeds to deprive everyone and so multiplies the dispossessed as he transforms both the rich and the poor into pariahs and bureaucrats. . . .

Confronted by an inert brand of conservatism that does not propose to resolve our social dramas with anything but monetarist rationality and public order, polymorphous progressivism has gradually turned over to the state increasing sectors of economic initiative, thus constantly reducing the sphere of activity open to the private entrepreneur. This process started in 1938 under the administration of Don Pedro Aguirre Cerda and was maintained under the successive Radical Party governments without relapse, except under Ibafiez and Allessandri. It gained new strength under Christian Democratic rule and finally found its true revolutionary form with the present regime.

Mindless Legalism

Little by little, the Chileans, so proud of their freedom, resigned themselves to losing it, choosing rather to be proud of the legal way in which it had been done, even if such a legality entailed a progressive dulling of the conscience.

Certain citizens sigh with relief when the present government proclaims that it intends to proceed with its revolution within the "legal process," even when such changes actually violate the spirit of our laws.

This distortion of the spirit of the law will soon transform itself in the new legality of statism as new constitutional texts are promulgated which aim at the suppression of private property (that is, of capital), thus greatly threatening freedom itself.

The administration of Don Jorge Allessandri felt constrained to initiate an agrarian reform aimed at the expropriation of abandoned or badly cultivated rural properties.

Let us not forget that the proclamation of the open season on private property was initiated by the Kennedy government and his idealized vision of the "Alliance for Progress." As an adversary of the United States once put it, the northern country tired of being an imperialist for the rich and chose to become an imperialist for the poor.

The majority of Chileans did not adequately take note of the fact that Jorge Allessandri's constitutional reform cast into law what was already taking place in fact: the erosion of private property. Wise doctors of the law took all the necessary precautions to allow the state to expropriate land and pay for it on credit. This did away with the most effective defense of private property. Before, the state could not expropriate private property without paying cash beforehand. By allowing certain expropriations to be made without immediate cash compensation, the way was opened for the greatest abuses.

The Christian Democratic Adventure

This, however, was a short step indeed when compared to the joyful and unpremeditated adventure of the Christian Democrats' trespassing back and forth over the constitutional text of 1925. Convinced that the time had come to besiege private property, the Christian Democratic experts put forth their long-winded and confused version of the tenth article of the tenth section of the reformed Political Constitution proposed by the Frei government in 1964, finally promulgated as law with some amendments on January 20, 1967.

We Chileans continued to live in tranquillity and legality as the Congress approved a constitutional text that turned over to the judiciary all of private property's guarantees. The state was relieved of its obligation to pay the property owner in cash before taking over his property. The legislation allowed not only the private citizen to be deprived of his property but also the determination of the procedures of expropriation, the establishment of the forms and modalities of compensation, indemnization, and appeal, finally turning over the property owner to the harsh and omnipotent grip of functionaries.

In order to facilitate the agrarian reform, the Constitution decreed that rural property could be expropriated at its declared fiscal value and compensation for it paid within thirty years. Thus, the precedent was established that later was used in other sectors of economic activity such as mining.

As the Christian Democrats' light-footed reforms kept on apace, they sustained their attacks against the defenders of private property by accusing them all of defending their wealth and class privileges.

Chilean freedom retrogressed considerably during the Christian Democratic administration. As more and more state organizations gained more and more power, more and more expropriations were used against those who defended the elementary right of the citizen not to depend on the state for each and every need.

It is only natural for a country where property owners are threatened and besieged by the judiciary process to find itself debilitated and weakened when confronted with state collectivism. Youth, intellectuals, functionaries, in a word, all those who eat their bread without incurring the risks of earning it, became militant and merrily joined the ranks of Socialists and Communitarists, who endorsed participation and whatever other ideal, well or badly understood. Thus was the prosaic conviction eroded that there must be some rich people in Chile, people with sufficient economic knowledge to rule over industries, farms, mines, commercial establishments, information media, people to control every type of instrument influencing and creating jobs. It would have been logical to demand that the rich not monopolize, not fear competition with other rich individuals from inside the country or abroad. It was illogical to proclaim their disappearance as an ideal and to celebrate the emergence of a Pharaonic state.

"Within the law" we have gotten the present political regime; "within the law" the present government has proposed a constitutional reform that puts a final end to private property in Chile. The nationalization of the great copper mines is just a pretext to eliminate all private ownership of mining property, large, medium, or small. It has transformed the owner of valid property claims into a mere concessionaire, and denied him the right to any form of indemnization. Legally acquired rights are invalidated, as are fiscal exemptions and other privileges and prerogatives which the state had earlier condoned. This casts great doubts on the state's good faith.

The Dangerous Trend Toward Dictatorial Bureaucratic Collectivism

Citizens have already conformed to the legality, even when this legality resulted in the progressive erosion of their freedom.

As freedom diminishes, the legal criteria with which to evaluate the acts of government slacken. Soon legality itself may well give way. The defenses of freedom have already fallen.

Bankers do not usually rank high in public esteem. No one defended them centuries ago when they were persecuted and condemned to their ghettos. Having first pointed its cannons against the copper-mine owners, the state now turns its weaponry against private bankers in a foolproof political shot. If by chance the administrators of private banks have been found guilty of unbecoming conduct, in a petty or a serious way, if they have transgressed one of the multitude of banking laws and regulations, then so much the better; it supplies oil for the bonfire.

Curiously, in the case of the banks the government did not even bother to request from Congress the right to expropriate. It simply presented the stockholders with its offer, while pointing out that the settlement under expropriation would be much smaller, and invited the administrators to resign in favor of persons of governmental confidence.

It was thus nothing but an act of pure bravado, counting on the fear of the stockholders, directors, and managers.

Such a tactic can of course repeat itself in other fields of activity, especially in the cases of illegal occupations by workers or aspiring property owners followed by governmental intervention, which simply puts the seal of legality on the occupations, thus completely eliminating any guarantees from the right of eminent domain.

Envious preachings against private property have gone a long way in Chile and misled us into the most dangerous of deviations, that which ultimately leads to dictatorial bureaucratic collectivism, which destroys freedom without augmenting prosperity.


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