Txile: CIA, Milton Friedman, NMF

1 Ingelesez: “On January 23, 2018, the British historian, Mark Curtis, who specialises in the analysis of declassified government documents to analyse British foreign policy, produced a new archive for our benefit – Chile: Declassified.

He collates public articles and also documents that were previously classified under Government rules.

His file (drawn from the National Archives) – Chile, 1971-3 – provides some stunning revelations that bear on this sordid period in World history.

See also the excellent report from Sputniknews (January 23, 2018) – UK’s Secret Support of Murderous Dictator Pinochet – which goes into more detail than I do here.”

2 Ingelesez: “The democratically-elected government in Chile was overthrown by a military coup (planes, bombs, murders etc), which was instigated by the US CIA and global financial interests.

You can read the declassified CIA documents on their involvement – HERE.

I was always interested in Chile not only because I was deeply angered by the actions of the Right and the brutality that accompanied and followed the Coup.

It was also became a laboratory for Milton Friedman and his goons from the Chicago Economics Department to impose their ridiculous policies onto a nation wtih the help of the IMF, who around then was trying to reinvent itself (after the collapse of the Bretton Woods system).

The behaviour of the IMF in Chile in the early 1970s clearly demonstrated its growing neo-liberal credentials. Their role in the Chilean overthrow of democracy was an early manifestation of their willingness to add their name, authority and resources to the development of the neo-liberal attack on the Keynesian orthodoxy.

Chile was the first notable action by capital to attempt to arrest the falling profit rates in the 1960s, which had arisen as income distribution became less skewed towards to the top end and workers enjoyed increasing employment security and prosperity under the full employment framework.”

3 Ingelesez: “David Harvey in his 2007 article – Neoliberalism as Creative Destruction – wrote that “the economic threat to the position of the ruling elites and classes was now becoming palpable”.

He recounts how:

The US had funded training of Chilean economists at the University of Chicago since the 1950s as part of a Cold War programme to counteract left-wing tendencies in Latin American. Chicago-trained economists came to dominate at the private Catholic University of Santiago. During the early 1970s, business elites organized their opposition to Allende through a group called ‘the Monday Club’ and developed a working relationship with these economists, funding their work through research institutes. After General Gustavo Leigh, Pinochet’s rival for power and a Keynesian, was sidelined in 1975, Pinochet brought these economists into the government, where their first job was to negotiate loans with the International Monetary Fund. Working alongside the IMF, they restructured the economy according to their theories.

Harvey notes that the Chilean coup demonstrated how profit rates could be restored if trade unions were smashed and public assets sold off to the private sector.”

4 Ingelesez: “The Chicago Boys and their mentors accepted theories, which were, of course, at the extreme end of Monetarism and free market deregulation. They were Milton Friedman’s intellectual soldiers and together with the military soldiers of the Chilean army, co-opted by Pinochet, they destroyed the democratic movement in Chile and wrecked the economy.

There is no doubt that the IMF was keen to do the bidding of the US government, which was prosecuting the neo-liberal agenda with vehemence on behalf of the large Wall Street firms, which provided massive funding to the Congressional members.

Milton Friedman and his gang at Chicago, including the ‘boys’ that went back and put their ‘free market’ wrecking ball through Chile under the butcher Pinochet, have really left a mess of confusion and lies behind in the hallowed halls of the academy, which in the 1970s seeped out, like slime, into the central banks and the treasury departments of the world.”

5 Ingelesez: ““They forced governments to abandon so-called fiscal activism (the discretionary use of government spending and taxation policy to fine-tune total spending so as to achieve full employment), and, instead, empower central banks to disregard mass unemployment and fight inflation first.

Later, absurd notions such as rational expectations and real business cycles were added to the litany of Monetarist myths, which indoctrinated graduate students (who became policy makers) even further in the cause.

The term “shock policy” originated with Milton Friedman who used the term “shock policy”. It was first applied in Chile by the so-called – Chicago Boys (Friedman’s doctoral graduates).

Of course, they first required the help of the CIA and the Chilean military to overthrow the democratically-elected Allende government and then brutalise the population (torturing and murdering dissenters who wanted respect for the democratic voice of the people) into submission.

This approach was then taken up by others, including Jeffrey Sachs who coined the term “Shock Therapy” in the mid-1980s, when he was hired to turn these mad ideas loose on Bolivia (1985), who were unable to meet the harsh debt repayment schedules demanded by the IMF.

Sachs is now parading as a progressive. A rat is a rat.”

6 Ingelesez: “But now we have more understanding of the role that Britain played in the Chilean coup courtesy of some declassified material that Mark Curtis has collated.

I won’t go through it in detail but among other things we learn that:

1. Britain was upset that its “major interest in Chile … copper” was under threat because Allende wanted to nationalise the sector.

2. The British Ambassador to Chile at the time wrote to the UK Foreign Office on September 3, 1973 about his “first impressions” on Chile.

He wrote just before the Coup was that “One option for Chile future is a coup”:

If this were followed by a military-guided regime, or subsequently by elections bringing in a moderate, democratic government, I suppose one could look to an eventual revival with the help of American credits and some kind of Marshall Aid. It is on this that the business community are pinning their hopes.

He acknowledges that the “business community” were pushing for a military dictatorship to get rid of Allende.

In the same Memo, he wrote:

… many people in the poorer and depressed sections of the community have, as a result of President Allende’s administration, attained a new status and at least tasted, during its early days, a better standard of living,

On September 14, 1973, three days after the Coup, the British Ambassador wrote:

The coup was carried out efficiently and with a cold-blooded, surgical approach untypical of the Chilean character … It is likely that casualties run into the thousands, certainly it has been far from a bloodless coup”.

But the British government already knew that.

On September 13, 1973, the British Foreign Secretary Alec Douglas-Hume wrote:

Circumstances of Allende’s overthrow and death render this case delicate… Accordingly we consider that it would not be in anyone’s interest to identify too closely with those responsible for the coup … But we still have enough at stake in economic relations with Chile to require good relations with the government in power.

So, never mind the murders and the slaughter. We adopt the ‘blind eye’ approach and get on with business as usual with the dictatorship.

Seven days after the Coup (September 18, 1973), the British Ambassador wrote:

I think I should make clear that, whatever the excesses of the military during the coup, the Allende administration was leading the country into economic ruin, social disorder and political chaos.

Yes, because the poverty was being reduced and the vast majority of people were starting to enjoy a “better standard of living”.

Can’t have that, can we?

And, next day (September 19, 1973), he showed his true colours:

Most British businessmen, whether they have investments here or are interested simply in exporting to Chile, will be overjoyed at the prospect of consolidation which the new military regime offers … Those British subsidiaries and investments which have emerged from the last three years relatively unscathed – [various including Shell] … – are all breathing deep sighs of relief … One thing does seem certain to me. Now is the time to get in. If we delay too long, while we may not miss the bus, we are likely to have difficulty in finding a comfortable seat”.

The correspondence continued and it was clear that the British government was seeing the new military dictatorship as a major source of export revenue via arms deals.

The UK Ambassador wrote on October 1, 1973:

Circumstances also will push them into directions which British public opinion will deplore. But this regime suits British interests much better than its predecessor …

Various other exchanges between British officials confirms that the British export of arms (Hawker Hunter planes etc) would accelerate to the Dictatorship.

Never mind that:

1. During the Coup, “Chilean Air Force Hawker Hunters were putting on an impressive show of force… the Hawker Hunters dived down at the Moneda Palace and with remarkable accuracy released their aerial rockets. These did much damage and set the Palace on fire. The President’s residence on the outskirts of the city, where resistance was encountered, was similarly attacked”.

2. “There are lots of stories of deliberate killings and brutalities … There were reports of summary executions of some of those who resisted the Armed Forces, and the large-scale round-up of government supporters and sympathisers, particularly foreigners. Several thousand were held in the football stadium where some received very rough treatment.”

3. “As to the ruthlessness of the coup, the military would argue that half-measures or a ‘soft’ coup would not only have been ineffective but would have led to prolonged civil war.”

But “the current regime has infinitely more to offer British interests than the one which preceded it. The new leaders are unequivocally on our side and want to do business, in its widest sense, with us. I hope that Her Majesty’s Government will respond”.

And so it goes.”