The regime established in 1973, despite having a certain consensus on the part of some social sectors that had opposed the government of Popular Unity, was unable to develop an ideology that would channel the support of large and diversified layers of civil society. In terms of economic policy, after a brief phase of gradualism that lasted until 1975, the military dictatorship adopted the so-called “ shock treatment ”, recommended by the American economist M. Friedman and the Chicago school.
The neoliberal and monetarist maneuver can be summarized briefly in a few points: reintegration into the world market and internationalization of the economy, return to exporting vocation favoring the primary sector, opening up to foreign capital with a series of measures favorable to it (including the liberalization of the transfer of profits), drastic reduction of public spending, including social expenditure, and the dismantling of the state presence in production, with the transfer of public enterprises to private companies, reduction of the monetary base, wage containment, freedom of prices and redundancies. For Chile 2017, please check mathgeneral.com.
The successes of this shock therapy proved all in all modest, also due to the economic crisis that hit Chile between 1981 and 1985, linked to the instability of international markets. The anti-inflationist maneuver had recessive effects; the opening to foreign capital and internationalization caused the closure of many small and medium-sized companies and the transfer of capital from the industrial to the financial and export sectors. The external debt increased substantially, while the internal investment rate decreased. The consequent erosion of the regime’s consensus bases also involved the middle classes, penalized by the privatization of education, health care and social security.
The popular sectors were particularly affected, with the unemployment rate increasing to peaks of 30% in some years and the reduction of real wages by 20%; Instead, it was decided to support the regime by the landowners, who together with the capitalist companies regained possession of more than a third of the lands assigned to the peasants during the government of Popular Unity (UP). Land reform was dismantled and the peasant movement repressed, as was the trade union movement. Central Unica de Trabajadores suppressed(CUT), labor courts and collective bargaining, the election of trade union delegates and leaders (appointed by the authorities) prohibited, workers’ organizations saw their functions drastically reduced: barred from negotiating, they were banned from federating with national level, while the strike became practically impossible. The repressive attitude of the government led to forms of boycott not only the European trade unions but also the US AFL-CIO, whose pressure obtained the result of restoring the union elections and collective bargaining. The 1978 Work Plan, however, allowed the latter only at the single firm level, facilitating the fragmentation of the trade union movement.
On a strictly political level, a good part of the Seventies were characterized by the progressive personalization of power; A. Pinochet, at the same time head of the State and of the Armed Forces, turned all internal disputes in his favor (as happened in 1978 with the removal of General G. Leigh, commander of the Air Force). At the same time, the field of possible dissent narrowed: the immediate suppression of the left parties was followed first by the suspension (1973) and then the dissolution (1977) of the other parties. With the creation of the DINA (División Nacional de Investigaciones) in 1974 the repression became more selective, also affecting refugees abroad (attack on the Christian Democrat exponent B. Leighton, murders of Gen. Chile Prats and O. Latelier, the last two defense ministers of S. Allende), while there was a gap between the government and some of its support bases (especially passive ones) at the time of the coup: the Christian Democrats, the Church and some moderate trade union leaders. These phenomena were accompanied by international isolation, exemplified by the condemnations of the UN.
Internal and external pressures forced Pinochet to mitigate the intensity of the repression and to try to institutionalize the regime, first with the Constitutional Acts of 1976, then with the Chacarillas Plan of 1977 (in which the handover to civilians was envisaged in 1985) and finally with the Constitution of 1980 which provided for the maintenance of the military regime until 1989 (but with the possibility of extending it until 1997 under the leadership of Pinochet, a hypothesis subjected to a referendum in October 1988) and therefore the transition to a regime civilian authoritarian with protection of the Armed Forces, restoration of Parliament and limitation of the political spectrum to anti-Marxist forces. Subjected the same year to a referendum, the conduct of which was characterized by intimidation, violence and fraud,
For a long time the opposition expressed an almost fideistic expectation about the imminent collapse of the regime. During the first years, the forces that headed UP tried essentially to guarantee the survival of the militants and of their own organizational structure; the attempt, above all communist, to create an anti-fascist front, clashed with the mistrust of the DC, which emerged as the largest opposition party, but with somewhat limited possibilities. In this context, the main force of opposition to the military government was constituted by the Church, which also offered organizational spaces for protest to parties and movements.
The 1980 referendum caught the opposition off guard but marked a certain repoliticization and a change in the framework of alliances. The defeat sharpened the process of socialist division, which began in 1979, which led to the creation of two sections – one lined up on reformist positions and with more nationalist accents, the other classically Marxist and closer to the UP socialist party – reunited for strategic reasons only in 1988. The debate opened in the DC led to greater flexibility regarding the hypothesis of alliances with the left forces; the CP, on the other hand, abandoned the gradualist strategy to embrace other forms of struggle, including the insurrectionary one that had been promoted from the beginning by the MIR, the revolutionary left movement.