Chile's Road to Socialism


CHAPTER 20

The Chilean Road to Socialism

First annual message to Congress
Santiago, 21 May 1971

I come before you in compliance with my constitutional mandate. My address to you is doubly significant: it is the first address of a government that has recently come to power, and it is delivered in the face of what are unique conditions for our country. Because of that, it contains a very special message, as befits the importance of the present moment and our future aspirations.

For twenty-seven years I have attended this Assembly, nearly always as a member of the Opposition. Today; I am here as Head of State by the will of the people as ratified by Congress.

Here, I am much aware, bills were debated and made law which allowed the establishment of the latifundia system. But here too obsolete institutions were abolished in order to lay the legal foundations for the agrarian reform which we shall put into practice. The institutional means which allow foreign exploitation of Chile's natural resources were established here. But this same Parliament is now revising them, to restore to Chileans that which is theirs by right.

Congress works out the legality of institutions, and it regulates the social order in which it has its place. Because of this, for more than a century it has been more aware of the interests of the powerful than of the suffering people.

At the start I must pose this problem: Chile is now governed by a new political force whose social intention is no longer to support the traditional ruling class but the great majority of the people. To this change in the power structure there must be a corresponding and necessarily radical transformation of the socio-economic order: it is the task of this Parliament to institute such a transformation.

The advances already made in releasing Chilean energies to rebuild the nation will have to be followed up by more decisive steps. Further reforms must be added to land reform and to the nationalization of copper, which now awaits the approval of Congress. These will take place, be it on Parliamentary initiative or by the proposal of the Executive, by joint action of these two bodies or by legal recourse to the basis of all power, which is the sovereign will of the people, as expressed in a plebiscite.

It is a challenge to us to accomplish everything in legal terms. There is an urgent need to ask of every law, of each existing institution, and even of each individual, whether they are or are not serving the cause of our own independent and autonomous development.

Seldom in history has the Parliament of any nation been faced with a challenge of this magnitude.

THE OVERTHROW OF CAPITALISM IN CHILE

The situation of Russia in 1917 and that of Chile today are very different. Nonetheless, the historical challenge is similar.

Russia in 1917 made a decision which has had the greatest effect upon contemporary history. There they believed it was possible for the backward areas of Europe to draw ahead of the Europe which was developed and that the first socialist revolution did not necessarily have to take place in the heart of the industrialized areas. There they took up the challenge and set up one of the forms for the construction of the socialist society, that is, a dictatorship of the proletariat.

Nowadays, no one doubts that nations with huge populations can in this way in relatively brief periods overcome their backwardness and reach the heights of contemporary civilization. The examples of the USSR and the People's Republic of China speak for themselves.

As Russia was then, so Chile today is faced with the necessity of fmding a new way to build a socialist society - our revolutionary path is the pluralist path, anticipated by the classic theorists of Marxism but which has never before become a concrete fact. Social philosophers have always supposed that the first to put it into practice would be the more developed nations, probably Italy or France, with their powerful Marxist working-class parties.

However, once more history has broken with past patterns. The opportunity has arisen to build a new model of society, not just where, in theory, it was to be expected, but where concrete conditions have arisen which favoured its emergence. Chile is today the first nation in the world called upon to set up the second model for transition to a socialist society.

This challenge has aroused lively interest beyond our own immediate frontiers. Everyone knows and feels that here and now history is beginning another cycle, whose span will depend on the extent to which we Chileans understand what we are doing. Some of us, just a few perhaps, see only the difficulties of the task. Others, the majority, are seeking ways to tackle it successfully. For my part, I am confident that we shall have the energy and the capacity to carry our effort forward, to the first socialist society built according to the principles of democracy, plurality and liberty.

Sceptics and catastrophe-mongers will say it is impossible. They will say that a Parliament which served the ruling class so well is incapable of transforming itself to the point where it can be the Parliament of the Chilean people.

Furthermore, it has been emphatically claimed that the armed forces and the Carabineros, the supporters till now of the institutional system which we shall overthrow, would not agree to support the will of the people in their decision to build socialism in our country. But they do not take into account the patriotism of our armed forces and of the Carabineros, their traditional professionalism and their submission to the civil authority. To put it in General Schneider's own words, the armed forces being 'a unifying and representative part of the nation and a structure of the state, there are within both permanent and temporary elements which organize and counterbalance the periodic changes which occur in political life under a legal regime'.

For my part I declare, gentlemen members of the National Congress, that, as this institution is based on the votes of the people, there is nothing in its essential nature to prevent it becoming transformed into the Parliament of the people. I assure you that the Chilean armed forces and the Corps of the Carabineros, loyal to their duty and to their tradition of non-interference in political affairs, will support a social system which answers to the will of the people as expressed in terms which the Constitution shall establish. A system which shall be more just, more humane and worth while for all, but above all for the workers, who until today have given so much and received almost nothing in return.

The problems we have to face do not he in that camp. They lie in fact in the extraordinary complexity of the tasks that await us - the task of directing our political institutions towards socialism, and to succeed in so doing, in face of the realities of the situation in which we find ourselves today, the reality of a society oppressed by the backwardness and poverty which accompany dependence and underdevelopment; the task of breaking away from the factors causing our backwardness and, at the same time, of setting up a new socio-economic structure capable of providing general prosperity.

The causes of backwardness lay, and still lie, in the alliance of the traditional ruling class with external forces of subjugation and with internal class exploitation. This combination led to the enrichment of foreign interests and the appropriation of profits made by our workers, leaving the latter with the absolute minimum necessary to restore their capacity for further work.

Our first task is to release the stranglehold of this structure, which results only in deformed growth. At the same time we must build up the new economy in such a way that it will follow the other without a break in continuity. We must build it while preserving the productive and technical capacities which we attained in spite of the stresses of underdevelopment. We must build it without artificial crises provoked by those who see their archaic privileges threatened.

Above all these basic questions there is one yet more fundamental: How is a man, especially a young man, to develop a sense of commitment that will give him a new joy in living and lend dignity to his existence? The only way is to dedicate oneself to great suprapersonal tasks, as though transcending the human condition itself, degraded as it has been by division into the privileged and the dispossessed.

No one can envisage solutions today to problems that he in the distant future, when everyone is prosperous, when all material needs are satisfied and the cultural heritage of humanity is shared by all. But here and now, in Chile and in Latin America, we have the opportunity and the duty to release our creative energy, especially that of our young people, for a mission that concerns us far more than any other undertaking in the past.

This is our hope: to construct a world where there shall be no division between rich and poor. In our case, to create a society where it is forbidden for one man to make war upon another in the name of economic competition; where there will be no point in struggling for professional privileges, and none of the indifference to the fate of others which enables the strong to extort gain from the weak.

Rarely have men needed as much faith in themselves as they do now, as much faith too in their capacity to re-create the world, to make life anew.

This is an age without equal - an age that provides us with the practical means to realize the Utopias of the past. We are hampered only by an inherited burden of greed, fear, and obsolete institutions. Only the act of throwing off this ancient burden separates us from the time when all men will be free throughout the world. Only in this way can men be urged to assert themselves, not as the products of a history of slavery and exploitation, but in the full acceptance of their finest potential. That is the ideal of socialism.

A naïve observer, situated in some country that already possesses those material means, might suppose that this attitude represents a new style of asking for help on the part of backward countries, yet another appeal by the poor for the charity of the rich. Nothing could be further from the truth. The internal re-ordering of all societies under the hegemony of the dispossessed, and the modification of international relations demanded by exploited peoples, will result not just in abolishing the poverty and backwardness of the poor, but in releasing the rich nations from being condemned to play a despotic role. As the emancipation of the slave liberates the master, so the socialist structure contemplated by the peoples of our own time means as much to the privileged as to the disinherited nations - the chains degrading both societies will be broken.

Gentlemen members of the National Congress, I stand here to urge you to rebuild the Chilean nation as we have dreamed it should be. To build a Chile whose children begin their lives in conditions of equality - equal opportunities to receive medical attention; equal opportunities in education; equal chances of having enough to eat. A Chile where the creative capacity of every man and woman may develop, not in defiance of everyone else, but with the aim of a better life for all.

OUR WAY TO SOCIALISM

There is a long way to go. Enormous efforts must be made on the part of every Chilean before these hopes can be realized. A fundamental requirement is that we should establish institutional channels for the attainment of the new socialist order in a pluralistic and free manner. The task is of particular complexity. There are no precedents from which to take example. We are treading a new path, marching without a guide in unknown territories; as our compass we have our loyalty to the humanism of all times - particularly the Marxist humanism - and we keep as our Pole Star the image of the society we aspire to, inspired as it is by the deepest needs and desires of the people of Chile.

As far as science and technology are concerned, it has proved possible for some time to create productive systems capable of ensuring basic requirements for everyone. In practice they are still enjoyed only by a minority. The difficulties do not he with technology. In our case at least, they do not he either in any lack of natural or human resources. What prevents us from realizing our ideals is the manner in which society is organized - the nature of the interests governing it, and the particular obstacles which dependent nations have to face. We must direct our attention to the structure of that situation, and to the nature of institutional demands.

In simpler language, our task is to define and put into practice, as Chile's road to socialism, a new model for the state, a different economic system and a new pattern of society which concentrates on man, on his needs and his hopes. For that we need the courage of those who dare to rethink the world as a project for the service of man. There are no prior experiments that can serve us as examples; we have to develop the theory and practice of new forms of social, political and economic organization, as much to overcome underdevelopment as to create a socialist state.

We shall accomplish it only if we do not falter, or abandon our cause. If we forget for a single moment that our aim is to establish a socialist project for man, then all the struggles of our people for socialism will be turned into just another attempt at reformism. If we forget the concrete circumstances that are our starting point, imagining that we can rebuild something that lies beyond our abilities here and now, then too we shall fail.

We are heading for socialism not out of an academic leaning towards a body of doctrine. We are propelled by the energy of our people, who recognize the unquestionable need to conquer backwardness and believe that a socialist regime is the only way in which modem nations can reconstruct themselves in a free, autonomous and dignified manner.

We head towards socialism after the conscious rejection, through the votes of the people, of the dependent capitalist system, whose returns have been a crudely unequal society, stratified into classes, deformed by social injustice and degraded by the corruption oi the very bases of human solidarity.

We have won the presidential elections in the name of the reconstruction of Chilean society.

This victory has been confirmed by the results of the municipal elections. This is our standard, in the name of which we will mobilize the people politically to be the actors on our stage, and the judge of our actions. Our plan as a government is the programme of Unidad Popular, with which we fought the election. We will not disregard the needs of the Chileans of today for the sake of Cyclopean tasks to benefit the future. Our objective is the progressive setting-up of a new structure of power based on the will of the majority and aimed at the satisfaction in the shortest possible time of the needs of the present generation.

Regard for the claims of the people is the only way in which to contribute materially to the solution of great human problems. There is no universal value worthy of the name if it cannot be applied, through the national and the regional scale, right down to the local living conditions of each family.

Our policy could seem too simple for those who prefer grand promises. But the people need to shelter their families in decent houses with adequate sanitary facilities, they need to educate their children in schools designed not just for the poor, to eat enough each day of the year; the people need work, help when they are ill or grow old, respect for their person. That is what we hope to give to every Chilean within the foreseeable future, that is what has been denied for centuries to Latin America, and is what a few nations are now beginning to provide for all their people.

Above and beyond this undertaking - the fundamental requirement for its completion - there stands something equally vital, and that is to mobilize the will of all Chileans to devote our hands, our minds and our hearts towards the recovery of the country itself, aiming to match the standards of present-day civilized societies, as masters of our destiny and as the rightful heirs of our own technical, intellectual, artistic and cultural wealth. Only by concentrating the country's attention on these fundamental ambitions will the needs of the people be met and the differences amongst us be levelled. Above all, young people must be given a role which will bring them a richer sense of present purpose in the construction of that future society which they will have to maintain.

Citizens of the Congress, the mandate which has been entrusted to us will affect all the physical and material resources of the country. We have arrived at the point where to turn back or stand still would cause irreparable damage to the nation. It is my duty at this time, as the man principally responsible for Chile's fate, to set out clearly the path on which we are advancing, and to describe the dangers and hopes which await us.

The Unidad Popular government realizes that the overthrow of a historical period is determined by those social and economic factors which were created by that period. Within these factors lie the agents and the modalities of historical change. To ignore this would be to go against the nature of the facts.

In the revolutionary process in which we are involved, there are five essential points upon which our political and social struggle turns - legality, institutionality, political freedom, violence and the nationalization of the means of production. These are questions which affect the present and future of each citizen.

THE PRINCIPLE OF LEGALITY

The principle of legality now reigns in Chile. It was imposed after the struggle of many generations against absolutism and the arbitrary use of the power of the state. It is an irreversible triumph as long as no distinction remains between the governing and the governed. It is not the principle of legality which is denounced by popular movements. Our protest is against a legal order whose principles reflect an oppressive social system. Our juridical norms, the techniques which regulate social relations between Chileans, correspond today to the requirements of a capitalist system. In the transition to a socialist regime, the juridical norms will correspond to the necessities of a people struggling to build a new society. But legality there will be.

Our legal system must be modified. This is the main responsibility of the courts at the present time - to see that nothing impedes the transformation of our juridical system.

It depends to a great extent on the realistic attitude of Congress whether or not the legal system of capitalism can be succeeded by a socialist legal system, conforming to the socioeconomic changes which we are planning, without there being a violent rupture in the juridical system, which could give rise to those arbitrary acts and excesses that we wish to avoid.

INSTITUTIONAL DEVELOPMENT

The regard for law and order which marks the constitutional state extends through all our institutions. The struggle of the popular movements which now are represented in the government has contributed substantially to one of the most heartening facts on which the country can rely: we possess an open institutional system which has withstood attempts to violate the will of the people.

The flexibility of our institutional system allows us to hope that it will not present rigid opposition to our proposals, and that it will adapt itself, as will our legal system, to the new requirements in order to create the new concept of institution-ality needed for the overthrow of capitalism in a constitutional manner.

The new institutional order will serve the principle which legitimizes and directs our action: that is, to transfer political and economic power to the workers. To make this possible, it is essential first of all for society to own the basic means of production.

At the same time it is necessary to accommodate the political institutions to the new reality. For that reason, at the proper time, we shall submit to the sovereign will of the people the question of the need to replace the present Constitution, which has a liberal framework, with a socialist-orientated Constitution, and to replace the two-Chamber system by a single Chamber.

We have promised that our governmental programme will put its revolutionary aims into practice with full respect for the rule of law. This is not merely a formal assurance, but the explicit recognition that the principles of legality and institutional order are compatible with a socialist regime, in spite of the difficulties inherent in a period of transition.

To maintain these principles while transforming their class bias during this difficult period is an ambitious task, and of decisive importance for the new social order. Nonetheless, its fulfilment depends solely on our strength of will; it will depend fundamentally on the relationships in our social and economic structure, on their evolution in the short term and on realistic political behaviour on the part of the people. At the present time, we believe that it is possible, and we are acting accordingly.

POLITICAL FREEDOMS

It is also important for us, as the representatives of popular forces, to remember that political freedom has been won by the people along their arduous road towards emancipation. It is part of what was positive in the historical period which we leave behind us, and it must remain, as our respect also remains for freedom of conscience and of all beliefs. For this reason we are pleased to note the words of the Cardinal Archbishop of Santiago, Raul Silva Henriques, in his speech to the workers: "The Church I represent is the Church of Christ, son of a carpenter. Thus she was born and thus we want her to remain. Our greatest sorrow is when men forget her birthplace, which was and is among the humble.'

But we would not be revolutionaries if we were to limit ourselves to maintaining political freedom. The government of Unidad Popular will extend political freedom. It is not enough to proclaim it by word alone, for that leads to frustration and mockery. We shall make it real, tangible and concrete, and exercise it in the measure that we master economic freedom.

The policies of the Unidad Popular government are inspired by a paradoxical situation. Classes and sectors exist in our society with hostile and exclusive interests, and disparate political levels exist within one and the same class or sector.

In the face of this diversity the government will attend primarily to the interests of all those who earn their living by their own work: labourers and professionals, technicians and artists, intellectuals and clerical workers. These people represent a group which is growing day by day as the result of capitalist development. They are becoming more and more united by their common situation as wage-earners. The government will also support small- and medium-scale businesses. Indeed we shall support all those sectors of society which, with varying degrees of severity, have been exploited by the minorities who own the means of production.

The multi-party coalition of the Unidad Popular government is very conscious of the problems in this situation. In the daily confrontation of its interests with those of the ruling class the government will make use of all the decision-making processes available within the institutional juridical system. We recognize the political freedom of the Opposition and we will conduct all our activities within the terms of the Constitution. Political freedom is the prized possession of all Chilean people.

It is fundamental to our policy to develop the political potential of our country to the maximum, so that in the stage of transition towards socialism we shall be able to dismantle the present system systematically. We shall abolish or reject its negative aspects and strengthen and reinforce its positive factors.

VIOLENCE

The people of Chile is acquiring political power without finding itself forced to use arms. It is advancing on the road of its social liberation without having had to fight a despotic or dictatorial regime. It has had to resist only the limitations of a liberal democracy. Our people hope with deep sincerity to spend the period of transition to socialism without having to fall back on authoritarian forms of government.

Our attitude on this point is very clear. But the responsibility of guaranteeing political evolution towards socialism does not rest solely with the government and the movements and parties that compose it. Our people have risen against the institutionalized violence which the present capitalist system imposed upon them; that is why we are transforming this system at the base.

My government owes its existence to the freely expressed will of the people. It answers only to them. The movements and parties which compose it are the guides of the revolutionary consciousness of the masses and the expression of their hopes and interests. They are also directly responsible to the people.

Nonetheless I must warn you that there are dangers which could obscure the clear path of our emancipation and radically alter for the worse the way which a realistic assessment of our circumstances would recommend. Such a danger would consist of violence done to the derisions of the people.

If violence, internal or external, violence in any of its forms, whether physical, economic, social or political, were to succeed in threatening our natural development and the achievements of the workers, then the continuity of our institutions, our constitutional state, political liberties and the chance for pluralism would be in acute danger. The battle for social emancipation, for the free determination of our people, would be forced to take on very different features from those which, we can proudly and truthfully say now, constitute the Chilean road to socialism. The resolute attitude of the government, the revolutionary energy of the people, the democratic strength of the armed forces and the Carabineros will be our defence in ensuring that Chile advances safely along the highway to socialism.

The unity of the popular forces and the good will of the middle classes represent that infinitely superior strength which ensures that the privileged minority will not easily take to violence. As long as violence is not used against the people, we shall be able to transform the basic structures where capitalism is entrenched in a democratic, pluralistic and free manner. The transformation will come about without the use of unnecessary physical coercion, without institutional disorder and without disorganizing production, at a pace set by the government in accordance with the needs of the people and the development of our resources.

The Place of Social Freedoms

Our plan is to extend social freedom by exercising political freedom, the basis of which must be economic equality. This is the course which the people have marked out because they realize that the revolutionary change of a social system requires intermediary steps. A purely political revolution can consume itself in a few weeks. A social and economic revolution takes years. It takes years for the mass of the people fully to understand and organize new structures, to make them work and adjust them to other structures. To imagine that one can dispense with the intermediary phases is Utopian thinking. It is not possible to dismantle a social and economic system, a set of pre-existing institutions, without having first worked out in detail what is to replace them. If we do not face up to this primary requirement of historic change, reality will only too quickly remind us.

We have learned the lessons which successful revolutions have to offer. There are countries which, as the result of external pressure or of civil war, have had to accelerate their social and economic revolution in order not to fall into the despotic bloodbaths of counter-revolution. But these countries have ultimately taken decades to organize the necessary structures which would finally and conclusively dispose of the preceding regime.

The course which my government has mapped out takes account of these facts. We know that to change the capitalist system, while respecting legality, institutionality and political freedom, means that we must keep our activities in the economic, political and social spheres within certain limits.

These intentions are perfectly well known by all Chileans. They are set down in the government programme and are being put gradually and inexorably into practice, making no compromises, and in the manner and at the pace which we promised.

The Chilean people are now becoming politically mature and organized. They have entrusted the defence of their interests to the Unidad Popular government. This fact obliges the government to identify and integrate itself with the mass of the people, speaking on their behalf while at the same time guiding them. This fact also helps the government not to alienate itself from them through regressive or precipitate measures. Today, more than at any other time, the life of the people, of the popular parties and of the government must be synchronized in a movement which is both precise and dynamic.

Every historical phase reacts to the conditions created by the preceding phase, and creates the elements and agencies of the one to follow. To tread the path of transition without restriction of political freedom, without a legal or institutional vacuum, is for our people both a right and a legitimate expectation. Now is the time for them to set down the foundations for the full, concrete realization of a socialist society. The Unidad Popular government will meet its responsibilities in this decisive moment.

The principal constructive agent of the new social order is to be found in the organization and the understanding of the people as expressed in the movements and parties of the masses, and in the unions. It lies in constant and varied forms of mobilization, according to the objective needs of each moment.

This is a responsibility not just for the government, but, we hope, shared also by the Christian Democrats, who should demonstrate their active approval of the principles and programme they so often proposed to the people.

NATIONALIZATION OF THE MEANS OF PRODUCTION

Citizens, during our six months of office, we have taken decisive action on all fronts. Our economic activities aim to remove the barriers which hinder the complete development of our human and material potential. In our six months of office, we have made vigorous advances along a path of irrevocable change. The report which we have just published contains details of our activities.

Chile has begun the definitive recovery of its basic wealth: copper. The nationalization of our copper is not an act of vengeance or of hate towards any group, government or particular nation. On the contrary, we have taken the positive step of exercising the inalienable right of a sovereign people: the full use of our resources exploited by national labour and effort.

The recovery of our copper is Chile's decision and we have a right to the respect of all countries and governments for the unanimous decision of a free people. We shall pay for the copper if it is fair to pay, or we shall not pay if it is not fair to do so. We shall protect our interests. We shall be totally intransigent if we find that negligence or malevolent acts are being perpetrated by persons or companies in order to damage the interests of the country.

We have nationalized another of our basic sources of wealth: iron. A short time ago we concluded negotiations with the Bethlehem Corporation as a result of which the mining of iron has passed completely into the sector of public ownership. At this time we are studying the constitution of the national steel complex which groups together six steel companies in the Pacific Steel Company. [1] The agreement with American industry has shown once more that the government is giving a fair deal to foreign capital without renouncing the basic interests of our nation. But we will not tolerate the disregard for our laws and the lack of respect for the authorities which we encounter in some foreign companies.

Coal will be placed in public ownership. Saltpetre also belongs to us. Through an agreement made by the preceding government we had to pay $24 million in debentures over fifteen years, which with interest meant $38 million. The shares of the North American sector in theory were worth $25 million. All this has now been reduced to $8 million payable over two years. We have added various firms to the area of public ownership, amongst which are Purina, Lanera Austral, the Bellavista textile plants, Tome, Fiap and Fabrilana; we shall take over the cement industry and the Yarur industry if their supplies are threatened. To avoid its collapse we have acquired an important part of the assets of the Zig-Zag Publishing House, which will form the basis of a graphic and publishing industry to satisfy the cultural needs of the new Chile.

In all the enterprises drawn into the public sector, the country has met the unhesitating support of the workers, an immediate increase of production, and the active participation of workers, clerical workers and technicians both in management and in administration.

We have accelerated agrarian reform, meeting a substantial part of the target for this year: the expropriation of a thousand landowners. This process is conducted with due respect to the legislation at present in force, and protects the interests of the small farmers. We want to establish a new, more vigorous form of agriculture, more firmly organized and much more productive. We want Chile to meet its own food requirements. We want the men who live from the land to benefit equally from the fruits of their labour.

The nationalization of the banks has been a decisive step. Respecting completely the rights of the small shareholder, we have nationalized nine banks and are on the point of obtaining majority control of the others. Our experience leads us to hope that we shall come to reasonable agreements with the foreign banks. This is how we seek to control the financial apparatus and to extend public control of the production of goods. We want to put the new banking system at the service of the public sector and of the small- and medium-scale industrialists, merchants and farmers who until now have been discriminated against.

CONJUNCTURAL POLITICAL ECONOMY

These have been our first steps towards the start of a basic and definitive transformation of our economy. But that is not all we have done. We have practised a short-term policy whose central aim has been to increase the availability of consumer goods and services, directing this increase for the benefit of the most underprivileged sectors.

We are doing our utmost to reduce inflation, this attempt being the axis of our policy of redistribution. Anti-inflationary action has acquired a new political significance and it will be a mobilizing element in the popular struggle. Preventing a rise in prices means that the people retain the greatest purchasing power while at the same time the task of socialist construction is being consolidated and extended. At the same time, private businessmen have the opportunity to make up for reduced margins by profiting from the increased volume of production.

In practice this policy has yielded considerable results in terms of redistribution. Nevertheless we know that our programme is meeting obstacles. On the one hand certain groups of businessmen are trying to halt the success of our ventures by means of an overt or disguised slowing-down of production. On the other, lack of initiative in some sectors too steeped in traditional ways of low, old-fashioned production prevents them from understanding the present development and from making a greater effort in production. To do so, however, is a duty. We shall take all legal measures open to us to encourage those who, deliberately or not, do not fulfil their duty and, if necessary, force them to increase production.

Likewise we have implemented a social policy to improve the nutrition of our children, and to allocate medical care more efficiently, to increase educational opportunities substantially, to start an urgent programme of house building, and to organize a considerable reduction in unemployment as a matter of national emergency.

We are doing it all without disorder, in fairness, trying to see that at all times the cost to society is as low as possible. Today the man in the street has greater purchasing power, consumes more and knows that the fruits of joint labour are being more equally distributed. At the same time he has the right to know that he is in control of his mines, of his banks, of his industries, of his land and of his future.

We neither measure ourselves against, nor compare ourselves with, preceding governments. We are fundamentally different. But if that comparison were to be made, even using the most traditional yardsticks, we would emerge at an advantage. We have reached the lowest level of inflation of recent years. We have begun the most effective redistribution of income that Chile has ever known. We shall build more houses this year than ever before in a similar period of time. Despite the pessimists, we are maintaining a normal flow of supplies of essential materials.

THE LIMITATIONS OF THE GOVERNMENT'S ACTIVITIES

We are fundamentally different from preceding governments. This government will always tell the people the truth. I believe that it is my duty honestly to admit that we have made mistakes, that unforeseen difficulties have slowed up the execution of plans and programmes. But even if our production of copper does not reach the target, even if the production of saltpetre does not reach a million tons, even though we may not build all the houses we planned, in each of these projects we shall supersede by far the highest record of production for copper, saltpetre or houses ever established in this country.

We have not been able to co-ordinate the many institutions of the state sector as well as they need to be co-ordinated, and there have been some errors of judgement. But we are devising more competent means of nationalization and planning.

When we came to power we pledged ourselves to carry out at once the promises we made to the country. Together with the Central Union of Workers (CUT), we studied the Salaries' Adjustment Law and we have signed the CUT-Government agreement. We are presenting a bill to Congress in which we are asking for a salary increase for employees in the public sector equivalent to 100 per cent of the rise of the cost of living, and we are raising to a higher scale the corresponding minimum salary of private employees. I believe, however, that it was a mistake not to reach broad agreement with the workers for establishing more precise criteria for salary scales which would have included both public and private employees within one system.

Other limitations which we have encountered derive from administrative and legal faults, and certain procedures which have impeded the execution of some of the government's basic plans. That is the reason why the introduction of our housing scheme was delayed. That in turn prevented us from reactivating certain industries or restoring a greater number of the unemployed. The months of April and May have seen the start of greater economic activity in construction schemes.

There is a vast area in the field of public services where abuse is still practised. Millions of Chileans are the daily victims of bureaucracy and red tape, halts and unnecessary delays. Every move requires a dozen different procedures, forms, signatures and rubber stamps. How many hours are wasted by each Chilean in his struggle with bureaucracy! How much creative energy drains away, and what futile irritation is experienced! Government authority has not applied enough energy even to begin to face this deep-seated sickness. The very sector most responsible for employees has allowed this to continue.

We have also been slow to work out social mechanisms to facilitate popular participation. Bills are ready which will give legal juridical status to the CUT and which will institutionalize the inclusion of the workers into the political, social and economic affairs of both state and industry. But we have barely sketched out the form of their participation in the provinces, in community affairs and in private firms. We not only have to guarantee vertical participation for the workers, as, for example, that of the industrial workers according to the respective branches of their industries, but also horizontal participation for the peasants, manufacturing workers, miners

and clerical and professional workers, so that all may combine and discuss the problems of a given economic area, or of the country as a whole. The system of participation not only leads to a more just distribution of income, but it also ensures greater returns.

To integrate the people on the horizontal plane is not easy and without doubt it requires great political maturity and general understanding. We do well to realize, however, that the improvement of production on a peasant settlement depends largely on the work done in the factory which produces machinery, tools and fertilizers, and on the work of labourers building roads and on the efforts of small- and medium-scale traders who distribute the materials. Responsibility for production lies with the working class as a whole.

Another criticism we have to make of ourselves is that in these first six months we have not succeeded in mobilizing the intellectual, artistic and professional capacities of all Chileans. There is much work to be done before all scientists, all professionals, all builders, artists and technicians, all housewives - in fact, all those who could and would co-operate in the transformation of society - find satisfying ways in which to express their particular talents.

IMMEDIATE TASKS

In the remaining months of 1971 copper will be definitively restored to the Chilean people. It is on the perseverance of the workers, of the clerical workers, and of the technicians of Chuquicamata, El Teniente, Exótica, El Salvador and Andina that the volume of production that we shall achieve this year, and consequently our capacity to acquire foreign currency, depends to a large extent. Only in this way shall we be able to maintain normal supplies and realize our investment programme. Copper is Chile's salary. Those who administer this wealth and those who extract it from the earth hold in then-hands, not only their own future and their own well-being, but also the future and the well-being of all Chileans.

We must extend the agrarian revolution, for if copper is Chile's wages, then the land is our daily bread.

This land must produce more. This is the responsibility of the peasants and of the small- and medium-scale farmers. But if the government recognizes its mistakes, then it is only fan-that others should recognize theirs. The occupation of settlements and the indiscriminate occupation of country estates are unnecessary and prejudice our cause. What we have done, and what our attitude has been, give us the authority to expect trust in our promises. For that reason there must be confidence in the plans that the government has made and in the rhythm of their execution.

We call upon the parties and the political groups which are not in Unidad Popular to reflect soberly on this matter.

Citizens! One of our major objectives is to establish an area of public control. This will include the greater part of our basic natural wealth, the banking system, the country estates, the greater part of our foreign trade and the industrial and distributive monopolies. It is a task which has already begun and which will be continued.

On the economic plane, establishing socialism means to replace the capitalist mode of production by means of a qualitative change in property relations and a re-definition of production relations. In this context, establishing an area of public ownership has human, political and economic significance. The incorporation of large sectors of the production apparatus within a system of public ownership puts an end to exploitation of the workers. A profound sense of solidarity will be created which will enable each individual to see his own efforts as part of the collective effort.

On the political plane the working class knows that their struggle is aimed at the nationalization of the principal means of production. Socialism cannot exist without a sector of public ownership. If we are to draw more firms into it, day by day, it means that the working class must be constantly on its guard and show a high degree of responsibility. It is neither an easy nor a short-term task to build socialism. It is a long and difficult task in which the working class must participate with discipline, organization and political responsibility, avoiding, above all, anarchistic decisions and irresponsible, impulsive acts.

The importance of the public sector is traditional in our country. It takes up approximately 40 per cent of our expenditure. More than 70 per cent of investments originate from the state. The public sector was created by the national bourgeoisie in order to favour private gain, and to consolidate forms of production which concentrate both technological know-how and private wealth.

Our government plans to increase this area quantitatively, but it also plans to change its qualitative significance.

The state apparatus has been used by monopoly enterprises to relieve their financial stress, to obtain economic aid and to reinforce the status quo. Our public sector has been characterized by the subsidiary role it has played to private enterprise. Because of this some public concerns show serious losses on all fronts, while others are incapable of keeping up with the levels of profit shown by private firms.

Furthermore the state apparatus of Chile has lacked adequate co-ordination between its various activities. As long as this is lacking it will be impossible for it to give solid support to a socialist economy. Control of a few branches of production does not mean that the public sector has at its disposal the machinery required to bring about socialist objectives in the fields of employment, increased productivity and the redistribution of income.

We need therefore to extend the public sector and reconstruct it from a different point of view. The nationalization of the most important means of production will enable us to acquire a degree of cohesion in the public apparatus which is indispensable if our great national objectives are to be reached. It should be recognized that one of the basic criteria for defining the public sector is that it should be conceived as a single integrated whole which will be capable of developing its potential within a reasonably short period of time.

This means that there is an urgent need to establish a system of planning which will apply economic profits to the various tasks of production. This year we have begun to set up such a system, creating assessment bodies such as the National and Regional Development Councils; we have formulated the Annual Plan for 1971 and, during the rest of the year, planning bodies will work out the National Economic Plan for 1971-6. We propose that no investment project shall be carried out that is not part of a government-approved scheme. In this way, we hope to put an end to experiment, and shall continue to organize a socialist system of planning in accordance with the programme of Unidad Popular. The existence of nationalized property requires, by definition, competent and effective methods of planning which are supported by adequate institutional strength.

The advantages of socialism do not come spectacularly to the fore in the early stages of construction. But the obstacles will be overcome by the creation of a genuine morality of labour and by the political mobilization of the proletariat, not only in support of its government but also in support of its means of production.

Establishing an area of public ownership does not mean that we are creating a system of state capitalism: it means the genuine start of a socialist structure. The public sector will be controlled jointly by workers and by representatives of the state, which will be the essential link between each firm and the entire national economy. These firms will not be bureaucratic and incompetently run concerns, but highly productive enterprises leading the country's development and conferring a new dimension to the field of labour relations.

Our transitional regime does not consider the existence of a market as the sole guide to the economic process. Only planning will guide the aims of production. To create firms whose output is regulated by a free market would mean concealing a capitalist approach from the workers and persisting in a means which historically has proved a failure. A dominant public sector means that the profits produced by the workers must be controlled and utilized in an efficient manner. It is therefore necessary to ensure that the financial sector and a large part of the distributive sector is included in the area of public ownership. Briefly, it is imperative to control the means of production and of finance, and to a certain extent the marketing of goods.

We must strengthen the public sector and invest all the power of the state in its economic policy. Our credit policy, our fiscal, monetary and wages policies, our scientific and technological policies and our policy for foreign trade must remain subordinate to the requirements of a socialist advance, that is, to the interests of the workers.

We must assist the efforts of small- and medium-scale industry, commerce and farming, which for years have been a sphere much exploited by the large monopolies. Our economic policy guarantees them a fair deal. There will be no more financial exploitation, no more extortion of the small trader by the large purchaser. Small- and medium-scale businesses will have an active role in the construction of the new economy. Once they become a part of a more rationally organized system whose aim will be to produce for the sake of the great majority of Chileans, they will appreciate the support of the public sector. The limits of the private, mixed and pub-he sectors will be clearly defined.

We are facing an opportunity for change that is unique in economic history. No country has achieved an acceptable level of economic development without huge sacrifices. We do not claim to have discovered the formula by which economic progress and a more just social system can be established at no cost at all. We are not proposing to build overnight a nationalized economy with a fair distribution of income, with monetary stability, full employment and high levels of production. What we do propose, however, is to build such a society at the lowest social cost that it is possible to imagine under the circumstances.

Socialism is not a gift that some countries find, casually cast along the wayside. Even less so is the freedom that goes with it.

THE FIGHTING SPIRIT OF THE WORKERS

All that we have planned in the political, economic, cultural and international fields is the task of a people: not of one man, nor of one government.

Between November and February the number of workers forced to go on strike went down from 170,000 in the preceding period to 76,000. The Unidad Popular government's identification with the workers, sharing both failure and success, has made conflicts which were previously inevitable unnecessary.

This year there have been no strikes in the coal-fields, none in the saltpetre-mines, none in the copper-mines, none in the health service, none in education and none on the railways. In brief, there have been no strikes in the zones vital for the country's progress.

I want to underline that for the first time voluntary workers have become a permanent feature of some of the nationalized firms. This is happening on a massive scale, from Arica to Magallanes, in every aspect of the national effort. Soldiers and priests, students and labourers, professional and business people, old people and young girls are freely and spontaneously contributing hours which are their own to the great common task. Here is a creative phenomenon which far surpasses the commercial definition of labour and offers an eloquent response to those voices, both in and outside Chile, who warn of things which have not happened and which never will happen. In this country there is, and there will continue to be, a government which knows what measures to apply and when to apply them. As President I take responsibility for that.

The great deeds that lie ahead of us will be met by the responsibility and determination of the workers who appreciate that their long-term interests extend far beyond the greater or lesser problems of today, of this month or of this year. In the combined strength of the workers and of their political representatives, the Unidad Popular government, we have an invincible weapon.

Those who live by their labour today have the control of the state in their hands: a supreme responsibility. In the construction of a new social order it is the people who both design and lay the foundations. It is for the state to guide, organize and direct, but it can never be a substitute for the will of the people. As much in the economic as in the political field, the workers themselves must retain the power of decision. To achieve this will mean the triumph of the Revolution.

This is the goal for which the people fight, with the legitimacy that respects democratic values, with the confidence to set out a programme, with the strength of being a majority, and with the passion of a revolutionary.

Venceremos !


Notes:

1. The Pacific Steel Company was bought out by the Government Development Corporation (CORFO) and a regrouping of a nationalized steel industry established on this basis on 12 December 1970.


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