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Kyle Steenland

Two Years of Popular Unity in Chile:


A Balance Sheet

The Allende government, representing the Unidad Popular coalition in Chile, has
now been in office for over two years. It is time enough to make an assessment
of it. The stated goals of the UP were to end the monopoly structure of the
Chilean economy, break Chilean dependence on imperialism, and begin the
construction of socialism. Given the past history of reformism in Third World
countries, it can be taken as read that the accomplishment of the first two goals
presupposes the achievement of the third. That is to say that without building
socialism it is impossible to escape from imperialist domination or from the
concentration of wealth in the hands of big capital. The UP has expressly
acknowledged this fact in its Programme: In Chile the reformist and developmental solutions that the Alliance for Progress encouraged and that the
government of Frei made its own, have not succeeded in changing anything
important. The Frei government attempted to curb the power of the most
wealthy and take away the land of the biggest landowners, but it tried to do so
in order to modernize capitalism and make it more efficient. Therefore it failed.
3

The Frei government sought to regain the countrys independence by


nationalizing copper, but it ended up simply making US control of the
copper more effective and cheaper. During the second half of Freis
regime the economy was stagnant, with the GNP increasing at an average of 3 per cent a year, barely keeping up with the population; Freis
reforms had failed to make the capitalist system healthy.
The UP formally acknowledges that another attempt at reform, even if
more conscientious and efficient, will only lead to more stagnation, if
carried out within the context of capitalism. It therefore calls for the
struggle against monopolies and against imperialism to be synchronized
with the building of socialism. Unfortunately, the various parties in
the UP coalition disagree on the time schedule for this programme. The
Communist Party believes that socialism can be built at some indefinite
future date after the anti-monopoly and anti-imperialist tasks have been
carried out. This theory of stages, with the last and most important
stage left to an indefinite future, forgets that revolutions which do not
advance rapidly are crushed. In the words of Rosa Luxemburg: In
this, the Russian Revolution has but confirmed the basic lesson of every
great revolution, the law of its being, which decrees: either the revolution must advance at a rapid, stormy, and resolute tempo, break down
all barriers with an iron hand, and place its goals ever farther ahead, or
it is quite soon thrown backward behind its feeble point of departure
and suppressed by the counter-revolution. To stand still, to mark time
on one spot, to be contented with the first goal it happens to reach, is
never possible in revolution. And he who tries to apply the home-made
wisdom derived from parliamentary battles between frogs and mice to
the field of revolutionary tactics only shows thereby that the very
psychology and laws of existence of revolution are alien to him and
that all historical experience is to him a book sealed with seven seals.
The attitude of the CP has crippled the UP; after initial advances, and
despite tremendous economic gains, the UP today is retreating. The
other major party of the UP, the Socialist Party, is too disorganized and
heterogeneous to counter-balance the strong and disciplined CP; in every
crucial encounter the CP line has triumphed over the more radical SP
line. It is too early to tell, but at present it looks as if the UP will fail and
that the parliamentary tactics of frogs and mice have predominated.
The UP and the Bourgeois State

In September 1970 the UP, while professing to build socialism, found


itself in the unusual historical position of having been legally elected to
the government of a bourgeois state. The UP, a coalition of parties the
majority of which are solidly based on the working class, had taken
advantage of a split in the ranks of the bourgeoisie to gain this electoral
victory.1 The election gave the UP formal control of the executive branch
1

The UP got 362 per cent of the votes. The liberal bourgeoisie represented by the
Christian Democrats got 278 per cent of the votes. The Conservative bourgeoisie
represented by the National Party but backing the independent Alessandri, received 349 per cent of the votes. The two right-wing parties united forces shortly
after the September elections in order to avoid another such defeat.
4

of the state, but the right remained in control of the congressional and
judicial branches, as well as tax-collecting, state auditing, and the
bureaucracy in general. Factions within the Armed Forces feel so
threatened by the UP that they have backed several attempted coups
dtat.2 The majority of officers, however, have hitherto maintained
official loyalty to the Constitution and the President. Any major attempt
by the UP to sidestep the Constitution would undoubtedly provoke a
military intervention.
The continued existence of the traditional Armed Forces means that
the UP has been forced to try to gain control of the capitalist state using
all the rules of the bourgeois legal system, and with the eventual goal
of using electoral office to eliminate the present bourgeois state and
create a workers state. Historically, this puts the UP in an unusual
position, and, to say the least, a very difficult one.
The UPs strategy was to use the considerable power of the executive
branch to carry out some immediate economic reforms which would
snap the economy out of the stagnation of the Frei years (nationalization of large industries, redistribution of income, state hiring of the
unemployed, nationalization of the copper). The subsequent economic
pickup was to be accompanied by mass political mobilizations, leading
to an electoral majority for the UP (which would mean an increase from
the 362 per cent of September 1970 to over 50 per cent). With an
electoral majority the UP would be able to pass a new Constitution by
plebiscite. The new Constitution would be the basis of a workers state,
replacing the old Congress, the old Judiciary, and the old state bureaucracy. The legality of this process would prevent the military from
overthrowing the government, although serious internal stresses in the
army were reckoned to be inevitable. At the same time that the process
of political mobilization was carried out, the state would be expropriating the major industries and creating the basis for a new socialist
economy.
This initial scenario seemed a plausible one. The first steps were carried
out successfully. In the April 1971 municipal elections, the UP won an
electoral majority. But at this point the plan stalled. The vital question
2
The UP has discovered various military plans for a coup dtat. The assassination of
General Schneider in October 1970 involved many officers of the Armed Forces in an
attempt to prevent the UP from occupying the government. As a result of the assassination, the retired General Roberto Viaux was jailed, and other high military
officials forced into retirement, such as the head of the Navy, the generals in charge
of the garrisons in Santiago and Concepcion, a general in the Air Force, and the
national Chief of Police. In December 1971 the head of the Military School in
Santiago, Colonel Labbe, was obliged to retire for plotting a putsch. He is now one
of the leaders of the National Party. Army General Canales was forced into an early
retirement in September 1972 for urging a coup. A French political scientist, Alain
Joxe, has documented the dependence of the supposedly neutral Chilean Armed
Forces on US imperialism; Las Fuerzas Armadas en el Sistema Politico de Chile,
Santiago, 1970. This dependence, for training and technology, continues under
Allende. For example, in October 1972, the Chilean Air Force and Navy participated
in naval manoeuvres for 15 days with the US Task Force. In March 1972, the Chief of
the US Air Force, General John Ryan, arrived in Chile as the special guest of the
Chilean Air Force for the celebration of Air Forces Day. Allende participated in the
ceremony and greeted Ryan cordially.

of state power was postponed: the planned Constitutional plebiscite was


put off till an indefinite future date. At present the UP is belatedly preparing a new Constitution, but no date has been set for its presentation
in a plebiscite. Meanwhile almost all observers agree that the UP has
lost its momentum.
The UPs strategic perspectives are a reflection of the history of the
Latin American left in the past decade. After the Cuban revolution, the
left split into two general tendencies: the traditional left (usually the
Communist Party) and the insurrectionary left (usually guerrillas). The
Communist Parties, with temporary exceptions, maintained their
customary tactics of participation in electoral politics and an indefinite
postponement of insurrection, whereas the newer forces insisted upon
the immediate necessity of armed revolt. The pro-Chinese Communist
Parties that resulted from the Sino-Soviet dispute generally backed
insurrection verbally but in practice neither organized nor participated
in actual armed struggles (with the exception of Colombia).
After a decade of insurrectionary attempts, no group has been able to
repeat the Cuban success. The guerrillas have either been crushed or
stalemated. With this background, the UP rejuvenated an electoral
strategy which most Latin American socialists (including many present
members of the UP) had discarded. Chile was in many senses the best
country for such an attempt. 75 per cent of its population is urban,
making a rural guerrilla impracticable. The urban working class is the
best organized in Latin America. Not only is there a strong CP, but also
a strong SP which is not tied to Russian revisionism. These working
class organizations were able to form a coalition with petty bourgeois
parties which gave them an electoral victory, a victory which came as a
surprise to much if not most of the Chilean left.3 This electoral success
opened a pre-revolutionary era with maximum opportunities for mass
mobilization and an intensification of the class struggle.
The UP victory looked so promising that other countries decided to try
it. The Frente Amplio in Uruguay and the Nueva Fuerza in Venezuela
copied the UP. But today the UP looks less attractive, the Frente Amplio
has lost fraudulent elections, and the Nueva Fuerza has fallen apart
before even getting to the polls. The original critiques of the insurrectionary left have gained a renewed vigour. These criticisms can be
summarized in two charges: (1) the UP basically relies on bourgeois
legality and (2) the UP lacks a vanguard party. These criticisms are not
confined to Latin American leftists; Marxist and Leninist theory in
general confirms them.
3
The principal parties involved in the UP are the large working class organization of
the SP and CP, founded in 1933 and 1922 respectively. Also represented in the coalition are the smaller MAPU, a working class party founded as a split from the Christian
Democrats in 1969, and the Radical Party, which is about the same size as MAPU and
is based on the middle class. The trades union elections of June 1972 gave the SP and
the CP about 30 per cent each, and the MAPU and the Radical Party about 5 per cent
each. Other parties in the UP are small and less important. A left party that has remained outside of the UP is the MIRMovimiento de Izquierda Revolucionaria or Movement of (the) Revolutionary Left. The MIR was founded in 1965 and received 23 per
cent of the votes in the elections to the CUTthe Central Unica de Trabajadores, the
trades union federation.

The UP hopes to gain control of political power without violence,


respecting the bourgeois legal system. The building of socialism is to
go on concurrently with the struggle for state power. Previous socialist
revolutions have gained power militarily and then used state power to
build socialism, exercising the dictatorship of the proletariat. Generally
such revolutions have come about in times of war and economic collapse, when the army of the bourgeois state was in a weakened position
(eg, Russia in 1917, Germany in 1918, or, the Paris Commune). A
second alternative has been the conquest of power in wars of national
liberation, with the official armed forces often supporting or supported
by a foreign invader (eg, China, Algeria, Vietnam, and partially Cuba).
Unless power is taken militarily any incipiently socialist government is
burdened down with the weight of the whole bourgeois state apparatus,
which, as Lenin pointed out so emphatically in State and Revolution,
must be smashed or it will smash socialism. The UP has not taken power
militarily. It has not only inherited the whole bourgeois state apparatus
(whose bureaucracy is extremely oppressive in Chile), but it does not
even nominally have full control of the state, only of its executive
branch.
For the UP to have overcome the difficulties posed by its legal route, it
would have had to focus resolutely on the question of power. Instead
of promising a rapid solution of Chiles problems after the elections, it
should have presented the electoral victory for what it was, an important step which had to be followed by further more difficult advances.
The electoral victory should have been followed by a much more profound mass mobilization to lead to the real conquest of state power.
Instead, the UP did the opposite. It glorified the anti-imperialist and
anti-monopoly measures which it was able to carry out using control of
the executive branch. But it refused to emphasize the urgent need to
destroy the capitalist state apparatus as such, as the first step in building
socialism. In this sense it followed the traditional theories of the Communist Party, which is willing to postpone the struggle for socialism
indefinitely.4
A second criticism of the UP is that it lacks a disciplined vanguard party.
Previous working class movements which have lacked a strong vanguard party have failed (the Paris Commune, the 1905 Russian Revolution, the Bolivian and Mexican revolutions). The UP coalition links
strong working class parties with weak petty bourgeois parties. This
coalition was necessary to gain an electoral victory, and sections of the
4
On the other hand, an a priori condemnation of any electoral perspective imposed
an obligation to propose an alternative strategy, capable of defeating a well-trained
and well-equipped army, in a country where the military are not generally hated, as
they were in Cuba or are in Argentina. One possible approach to this would have
been a movement along the lines of the Tupamaros in Uruguay (a country which also
had an army which remained in the background), prepared to struggle for years in the
hope of eventually winning the backing of the major working class parties or at
least their rank-and-file. Such a strategy was conceivable in Chile given the example
of the Tupamaros, and was in fact the strategy chosen by MIR before 1970, but like
the UP itself it involved tremendous difficulties. A second possible strategy might
have been to drive towards the intermediate building of something like Soviets, and
the internal collapse of the army. This alternative seemed impractical before 1970 in
as much as it required a weakness on the part of the bourgeois state which Chile did
not exhibit.

petty bourgeoisie correctly identified their interests with a proletarian


leadership which was attacking big capital. However, in order to build
socialism, this coalition would have had to tighten itself considerably,
based on a revolutionary programme. Instead stupid sectarianism has
reigned supreme, despite everyones criticism of it. It has proved impossible to integrate the MIR into the UP; instead a tremendous open
conflict has developed between the CP and the MIR. The situation in
this respect is reminiscent of the confusion reigning in Cuba during the
early days when it was thought possible to group all political parties
which supported the revolution together in a loose coalition. That
coalition proved ineffective and was replaced by the PURSC which became the present Cuban CP. A comparable step is necessary in Chile.
Although a unification of parties is impossible at this time or in the near
future, the problem is that no one has even ever proposed it. The
objective need was to create a tight and disciplined UP which was consciously moving towards unity through internal struggle. Instead there
are party quotas in all state agencies; far too many militants conceive of
the UP as just another government and retain their old party loyalty,
realizing that the party was responsible for getting them their bureaucratic post. Keeping in mind the UPs failure to confront the two major
socialist criticisms of its strategy, we can now review the concrete record
of the UP government.
The Initial Period: State Control of the Economy

The critical perspectives of the UP were two-fold, economic and


political. Economically, its aim was to take some immediate measures to
pull the economy out of the stagnation of the last years of the Frei
government. It also sought to constitute a strong state-controlled
sector of the economy, which would serve as the basis of a future
socialist economy, and would meanwhile gradually undercut the
economic foundations of the Chilean Right. This public sector would
also embrace a vast work-force and provide a demonstration of what
the UP conceived to be workers control.
Politically, the UPs goal was to extend its electoral victory. Using the
short-term gains of economic recovery to attract new solid support, and
mobilizing sectors of the population which were unorganized, the UP
hoped to gain control of the entire governmental apparatus and at the
same time eliminate old legal and bureaucratic forms. This goal was to
be attained by passing a new Constitution. To this end, and also in
order to insure the correct functioning of the economy against rightwing sabotage, it was considered necessary to create new popular
organizations. These were the CERAs (Centros de Reforma Agraria) and
the Peasant Councils in the countryside, and the Production Committees and Administration Councils in the state-controlled factories in the
city. The CERAs are the new state farms resulting from the rapid
extension of the agrarian reform, and the Peasant Councils are locally
elected peasant congresses representing the reformed sectors of agriculture and the smallholders. The Peasant Councils should have been
given more real responsibility to oversee the Agrarian Reform and the
distribution of technical assistance. Unfortunately the bureaucratic
institutions set up to oversee the Agrarian Reform have too often
8

remained in control, and they have many members left over from the
Frei administration. (The UP is using an Agrarian Reform Bill passed in
1967 by Frei.)
In the towns, the Production Committees and Administration Councils
exist only in state-controlled industries. The Production Committees in
the factories are wide-spread and generally successful in overseeing
efficient production. The Administrative Councils are made up of five
workers and five government administrators; these councils are the new
management of state-controlled industries. They have suffered from
the patronizing and bureaucratic style of the government representatives, who have at times appeared to believe that theirs were the
privileges of the old owners. The workers need to be able to replace
them easily; instead proletarian opposition to a government administrator has to wage long struggles to win a replacement. The workers
themselves on the Administrative Council are elected once a year.
Other important organizations set up in the city are the JAP ( Juntas de
Abastecimiento y Control de Precios). The JAP are neighbourhood committees set up to avoid speculation and oversee distribution of popular
items to consumers. They have been widely established and are extremely necessary; so far they have had some success but need to be
greatly strengthened. Vigilance Committees have been proposed for
private industries; they were an important conception but have unfortunately not been widely constituted.
How did the strategy of the UP work out in the first months? The
initial economic measures were very successful. The monopolistic
character of the economy had left a large amount of unemployment and
unused industrial capacity. The 6 per cent unemployment rate (71 per
cent in Santiago) went down to 38 per cent (55 per cent in Santiago) in
1971, halving the average for the previous decade. Industrial production went from some 75 per cent capacity in the years 1969 and 1970 to
between 90100 per cent in 1971. This increased use of capacity and
man-power enabled industrial production to jump from an average
yearly increase of 2 per cent during 196770 to an increase of 109 per
cent in 1971.5 The increased production permitted an important redistribution of income and a 135 per cent rise in consumption of
popular items in 1971. Workers generally received a 2030 per cent
increase in real wages. Blue collar workers (daily wage workers) controlled 607 per cent of the national income in 1971, as opposed to 51
per cent in 1970. Capitalist owners of businesses absorbed this transfer;
their share in the national income went down from 186 per cent in 1970
to 83 per cent in 1971. The copper industry, representing 70 per cent of
Chiles exports, was nationalized in the middle of 1971. The agrarian
reform was speeded up tremendously: today half of Chiles arable land
is included in the reformed area and the majority of the land expropriable under the 1967 law has been expropriated. Major factories were
taken over. Inflation was kept down to 22 per cent in 1971 as compared
to an average 265 per cent in the years 196570.
5
The statistics on industrial production here derive from SOFOFA, the organization
of business owners. SOFOFA is violently against the government but is nevertheless
forced to admit UP economic successes. The other statistics in this paragraph are from
ODEPLAN, the state planning agency.

The situation in the first year of the UP in Chile was thus similar to that
of the early phase of the Cuban revolution. Obviously rational measures
yielded tremendous early social benefits for the masses. Only later did
the reaction of the Right, through sabotage and boycott, and of
imperialism, through its invisible blockade, begin to take effect. The
big economic advances of the first six months led to a UP victory in the
April 1971 municipal elections. The UP, facing a now united right-wing,
got 509 per cent of the vote, up from its 362 per cent in the September
1970 elections. The SP registered the biggest gains on the left. With this
tremendous electoral improvement, the UP was in a position to take the
offensive and fundamentally attack the political nature of the existing
state. The UP Programme states that a new political constitution will
institutionalize the massive incorporation of the people into state
power. . . . The Peoples Assembly will be the single house that will
express popular sovereignty at the national level. April 1971 was the
correct moment to press on with a vote on a new constitution, but the
UP failed to do so. This was a fundamental mistake, an inability or an
unwillingness to see the problem of political power as the central issue
of the struggle for socialism in Chile. The inability arose from an
under-estimation of the enormous problems ahead; the unwillingness
arose from a fear that perhaps it was too soon for a plebiscite and that
to organize one would be moving too fast.
The Right-wing Counter-offensive and the UP Response

The opportune moment passed rapidly. Counter-revolutionary sabotage and imperialist blockade took far more serious tolls than the UP
had expected, despite its public emphasis on these dangers. With excess
industrial capacity exhausted and unemployment low, production was
unable to increase rapidly except through an expansion of the state
sector and a more rationalized and centralized plan of production. But
the Chilean bourgeoisie used its Congressional majority and its control
of the majority of the media (65 per cent of the newspapers printed, for
example, support the Right) to block the expansion of the state sector.
Meanwhile imperialismabove all the United Statesdenied new
credits through the World Bank, the Export-Import Bank, the InterAmerican Development Bank, and the International Monetary Fund.
The US, fighting to defend its $1 billion investment in Chile (in a country where the GNP is about $10 billion, the state budget about $700
million, and exports about $1 billion) pressured through the IMF to
hinder the re-negotiation of Chiles foreign debt in the Paris talks in
early 1972. These pressures, added to the drop in the world price of
copper (from 64 to 49 cents a pound, costing Chile $400 million in two
years), have led to an extreme scarcity of dollars for imports, a lack of
parts to keep the machines going (most parts in Chile, as they did in
Cuba, come from the US), and general economic privation. Precious
dollars have also had to be spent for food imports, which have more
than doubled under Allende. Chile now buys about $400 million worth
of food a year, at prices which have gone up an estimated 40 per cent
since 1970. (Increased imports are necessary to cover increased consumption; since 1970 internal production has gone up only 6 per cent,
while consumption has gone up by 25 per cent.) In 1972 high demand,
short supply and large emissions of new money led to the highest
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inflation in Chiles history. By December inflation was running at an


incredible 164 per cent. It was difficult to buy many products, even
hitherto common ones. The working class showed astonishing tolerance of these conditions but the UP still suffered. Small businessmen
and white-collar workers who once supported the Allende government
went over to the opposition, and thereby weakened the governments
prospective strength for the coming elections.
Having failed to take advantage of its temporary electoral majority, the
UP began to implement its long term economic strategy. This meant a
drive to bring large industries under state control in order to provide a
base for the construction of socialism. The result of this thrust was
stalemate. Public control of the economy was great, but it was not
decisive, and it was apparent that further advances in the economic
field were impossible without more political power, specifically without
destroying the present Congress. Having missed its opportunity in 1971,
the UP was then forced to confront the problem of state power in 1972.
The economic crisis and right-wing offensive of SeptemberOctober
1972 have clearly shown that the bourgeoisie has more than enough
capacity to wreak havoc with the Chilean economy.
The UP has used two different methods to gain control of the larger
industries. One was to buy up the stocks, bringing enterprises under
the control of the State Development Corporation (CORFO). The other
was to requisition firms using almost forgotten legislation from the
1930s which permits the state temporarily to take over the management of industries. Justifications for requisition are owner sabotage of
production or owner refusal to co-operate in solving a paralysing
labour dispute. Requisitions are theoretically temporary, but no
factory taken over has yet been returned to its old owners; requisitions
give the state control of both management and profits. Through purchases or requisitions, the UP has gradually extended the grip of the
government over the key industries in the economy (the copper industry is an exception; it was recovered through a Constitutional Reform).
The bourgeoisie reacted to this campaign by initiating legislation in
October 1971 to restrict the governments right to take over industries
and to force a strict definition of the states powers of economic intervention. The government responded by announcing that all industries
which had a tax value of over 14 million escudos in December 1970
were to be eligible for expropriation. The Rightist move was framed as
a Constitutional Reform, to make special legislation necessary in Congress for each industry that the state wished to requisition or purchase.
(Constitutional Reforms can be passed by Congress without a popular
vote.)
In the midst of this parliamentary skirmishing, an important political
event took place. In December 1971, during the visit of Fidel Castro to
Chile, the bourgeoisie staged a mass demonstration against the government. The march was called the march of the empty pots in protest
against supposed food shortages, which at that time were scarcely
noticeable. The protest, which was largely middle-class in character and
involved organized violence by right-wing para-military groups, showed for the first time the power of Chilean capital to mobilize a mass base
11

in the streets. Fidel called attention to the danger of fascism in Chile,


provoking heated controversies amongst the left. Fidels speeches and
the popular response to them indicated the scope for a countermobilization against the right.
Meanwhile the debate over the Constitutional Reform Bill of the Right
continued. In January 1972 President Allende published a list of 91 key
industries which the government planned to bring under state control.
In February, Congress passed the Constitutional Reform, this time with
the added stipulation that all industries taken over by the state since
October 1971 were to be returned to their old owners. Allende vetoed
the bill in June. At that point the UP began serious negotiations with
the Christian Democrats to work out an agreement before a final vote
on the vetos took place in Congress. This decision to negotiate
represented the triumph of the CP line; the SP opposed negotiations and
proposed mass mobilizations and a plebiscite.
In July the Christian Democrats felt strong enough to break off
negotiations and over-ride the presidential veto. The government then
maintained that the opposition did not have enough votes in Congress
to do this and that the Constitutional Reform Bill would have to be
sent to a special Constitutional Tribunal (where the UP has a 3 to 2
majority) to resolve the complicated legal questions involved. The
Right claims it does have enough votes legally to over-ride presidential
vetoes and rejects the jurisdiction of the Constitutional Tribunal. So
far the Right has over-ridden the vetoes in the Senate and sent the bill
on to the House of Deputies, where no action has yet been taken. Were
the House of Deputies to over-ride the vetoes, the executive would
appeal to the Constitutional Tribunal. Meanwhile the Right has
effectively slowed down the process of purchases and requisitions. By
mid-November 1972, 12 industries had been bought by the Development Corporation and 36 had been requisitioned. This leaves 42 industries on the government list in private hands (the list had been cut
from 91 to 90).
The pro-UP economist Alberto Martinez estimates that at present the
government controls about 20 per cent of industrial production, outside the mining sector.6 He calculates that if the 90 industries were all
under government management, the state would control 30 per cent of
industry, with 150,000 workers in the public sector and 300,000 in the
private sector. Martinez argues that with such a 30 per cent control, the
Allende government would be able to maintain a precarious steerage of
the economy as a whole, given that public industries would be the
largest and most important ones. It is interesting to note that the US
controlled slightly less than 30 per cent of major industrial production
before Allende. With that 30 per cent it was much easier for American
imperialism to exercise a control over the economy in its entirety; the
UP, on the other hand, has to fight the pressures of both imperialism and
the Chilean private sector, making effective control much more
difficult. The UP has been able to win command of banking and most
6

See the 17 September 1972 issue of Chile Hoy, an able pro-governmental weekly
magazine.

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foreign commerce, since all but one of the major banks has been
requisitioned, and the state can determine dollar acquisitions and
therefore imports and exports (except for contraband, which is widespread).
The Economic Importance of the Chilean State

It is important to analyse the power of the public sector in the Chilean


economy, a power upon which the UP has over-relied, to the detriment
of mass mobilization. The Chilean economy is monopoly-capitalist in
character, with the state playing an extremely important role in recent
years. An excellent recent study by the economist Sergio A. Ramos
Cordova shows that in the largest 271 Chilean corporations, the 10
biggest stockholders on average control between 90100 per cent of
the stock.7 This amounts to a formidable concentration of capital. The
families of Edwards, Yarur, Sumar, Said, and Briones are famous for
their huge holdings (the Yarur family, for example, owned two large
banks and five or six of the large textile mills). These monopolists used
the state to do much of their investing for them. Thus the state accounted for 466 per cent of net investment in fixed capital in 1961, and
748 per cent of this investment in 1969. This investment was both
direct and indirect. The rate of indirect investment rose most rapidly;
such investment meant that private interests received both production
and profits. Even though the state was responsible for 748 per cent of
net investment in fixed capital in 1969, it owned only 194 per cent of
production (10 per cent in the public industries and 94 per cent in the
central government). Large monopolies were thus able to use the
capitalist state extensively as a source of private profit. The Development Corporation, set up in the late 1930s under the Chilean Popular
Front, is famous for building up industries until they were profitable
and then turning them over to private business. A good example is the
Pacific Steel Plant, the only steel mill in Chile. It was established by
CORFO in 1946: by 1966 private interests controlled 647 per cent of the
total capital. The UP regained control in 1971. These figures indicate the
degree to which the bourgeois state was used as a vehicle of financial
development by Chilean monopolists. The wide powers of the executive
to intervene in the economy as a whole through its control of the public
sector, led the UP to hope that it could turn the tables on the bourgeoisie
and use the same state to build a socialist sector of the economy which
would eventually dominate the capitalist sector. In practice, the Constitutional Reform Bill passed by Congress has blocked further extension of the public sector, while economic pressure from imperialism
has helped to cripple the existing sector which the Allende government
does control.
US Imperialism: the Invisible Blockade

Despite the

UPs

reiteration of the dangers of imperialism, it was not

7
See Chile: Una Economia de Transicion? by Sergio A. Ramos Cordova. This book was
published in July 1972 in Cuba and in November 1972 by CESO in Chile. Many of the
statistics used by Ramos in his discussion of investment come from a study by
ODEPLAN, the state planning agency, called La Inversion Publica en el periodo 1961
1970, published in Santiago in 1971.

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prepared for the damage that the USA has done to the economy.
Furthermore, the UP has not been able to create a strong mass consciousness of the US responsibility for many of the current problems of
the Chilean economy (the Anderson revelations about ITT in Chile
helped somewhat). The US holdings in Chile were extensive. Although
it is difficult to disentangle the legal jungle which hid North American
control, it is known that the US had more than a billion dollars invested
in Chile, with profits estimated at some $500 million a year.8 A study
made in August 1972 by the Development Corporation estimates that
total foreign investment in 1970 was $1672 billion, of which the US
share was some $11 billion. If we take the round figure of $1 billion,
it is calculated that some $600 million was invested in mining (principally copper), and some $400 million in manufacturing and commerce. Foreign investment in toto controlled 19 per cent of Chilean
industry and participated without control in another 65 per cent. In the
dominant industries, foreign interests controlled 304 per cent and
participated in 132 per cent.9 With such extensive expatriate control of
mining and industry, it is understandable that Gunder Frank should
call the Chilean capitalist class a lumpen-bourgeoisie. Aside from
outright control through ownership, Chilean industry used largely US
machinery and was dependent on the US for technology. This dependence was greatest where the industries were most modern, and in
industries which were growing rapidlyrubber, electric machines,
refinement of metals, and lumber. In addition to North American
control through technology and ownership, the United States government also exercised great indirect economic power through international
finance institutions.
Internationally, the US has traditionally dominated the Chilean economy
through its manipulation of credits. When Allende became president,
Chile had a foreign debt of over $3 billion (not counting some $700
million in debts which Chile inherited when it nationalized the copper
industry), which made it the second most indebted country per capita in
the world, after Israel. Although the UP has unfortunately not published
extensive details of this foreign debt and its re-negotiation in Paris, we
can assume that the servicing of the debt required payments of some
$400 million a year in 1971 and 1972. The payments of the debt would
have ordinarily been financed with more loans, in typical loan shark
8
These round figures come from a study by Pedro Vuskovic, made in 1970 and cited
in the 22 July 1972 issue of the newspaper Ultima Hora. Vuskovic was the Minister
of the Economy from November 1970 until June 1972. He was the symbol of the
aggressive requisitioning of large industries by the UP. He was sacrificed in June 1972
as part of the decision to open negotiations with the Christian Democrats about the
Constitutional Reform Bill; his removal came largely as a result of the insistence of
the CP. He is now vice-president of CORFO, the state Development Agency. The
architect of the policy of negotiations with the Christian Democrats, Orlando
Millas, became Minister of the Treasury when Vuskovic was removed from the
Cabinet.
9
These figures are for the years 19681969. Of the industries defined as dominant
industries, foreign capital participated in 436 per cent. In 207 per cent of them
foreign capital (largely US) owned more than 50 per cent of the stock. In 97 per cent it
owned between 2050 per cent of the stock. In 13.2 per cent it owned less than 20 per
cent of the stock. Ramos defines effective control as those cases where foreign
capital owned 20 per cent or more of the stock. Using CORFOs estimate, we can
assume that about 70 per cent of foreign capital means US capital.

14

fashion. The World Bank, the IMF, the Export-Import Bank, and IDB are
all expert in such transactions. Since Washington instructed these institutions to refuse loans to the Allende government in Chile, however,
almost no new credit has been forthcoming which could help service the
foreign debt. This has led Chile to ask for a re-negotiation of it. In
February 1972 Chilean representatives met with the major creditors in
Paris, and after extensive talks finally arrived at an agreement in April.
Although the details of this re-negotiation are not known, it is clear
that 70 per cent of the debt was re-financed over a newly extended period
of eight years, with a period of grace for that 70 per cent (no payment)
between November 1971 and December 1972. The IMF was to be given
access to Chiles books and to report back to the creditors (governments and international banks) to assure them that Chile was managing
its economy correctly. Chile had asked for better terms, including a
period of grace from November 1971 to December 1974. On the other
hand, the US (by far the major creditor) had asked Chile to sign a
stand-by agreement with the IMF which would have meant that the
IMF could have rather strictly controlled Chiles internal economy, by
regulating state expenditures.10 The US pressured the other creditors to
force Chile to accept the IMF stand-by plan. At the same time, the
Nixon regime continually tried to link a successful re-negotiation with
payments for the expropriated US copper companies. Chile withstood
this barrage and took advantage of recent conflicts in the capitalist
bloc to win the support of many European countries, which in turn
forced the US to drop some of its demands. The details of the renegotiation are to be worked out between Chile and each creditor
following the guidelines set up in Paris. The USChile terms have not
yet been determined; negotiations were begun in October 1972. In
August, State Department spokesman Charles Bray had already announced that the bi-lateral negotiations would have to consider the
Chilean nationalization of the American copper companies.
The net result of the re-negotiation is that Chile delayed payments on
some of its debts. In 1972 Chile paid only $150 million of some $400
million it owed. Chile will henceforward have to pay new interest on the
difference of some $250 million, and will have to return to Paris in 1973
to ask for a new period of grace. It has to submit to inspections by the
IMF. It has to find some way to negotiate bilaterally with the US (one
option, so far rejected by the UP, would be to renounce the debt with
10

According to Alfonso Inostroza, president of the Chilean Central Bank, Chile


owes $12 billion to the United States. Interest payments on this amount total $130
million a year. See El Mercurio of 16 December 1972. This figure does not include the
debts of the copper companies assumed by Chile upon nationalization. It should be
remembered that the debt negotiated with the Club of Paris covered only public
debts with the US, that is, Chilean debts to AID, Eximbank, and private debts guaranteed by Eximbank. According to the Chilean ambassador to the US, Orlando Letelier,
the public debt comes to payments of slightly more than $100 million a year. By the
terms worked out in Paris, Chile should have paid some $30 million of this. In 1972
no payments were made. (See interview with Letelier in Chile Hoy December 29
4 January 1973.) It is interesting to note that Chilean debts to private American
banks were re-negotiated without problem in January 1972, indicating that the US
position on the public debt involves political principles which are more pressing
than the desire for actual payment. The US would probably remove obstacles in the
re-negotiation in exchange for a Chilean acceptance of its responsibility to pay
indemnification to the expropriated copper companies.
15

the US). Chiles foreign reserves are extremely low and its shortage of
dollars is notorious. All this results from an attempt to pay back debts
contracted under the worst of terms under the previous Frei government.
Chiles present situation should be compared with Chile under Frei.
Between 1966 and 1970 Frei contracted a foreign debt of $2395 billion,
requiring a repayment of $380 million a year. This was the heritage left
to Allende. Credits flowed freely to the Frei government. The debt
contracted by Frei was short-term. In 1965 60 per cent of Chiles foreign
debt fell due in a period greater than 15 years, whereas with the $2395
billion contracted by Frei only 34 per cent fell due in a period of greater
than 15 years. Frei left Chile a debtor and cut off credits to Allende.11
This extended discussion of US control of the Chilean economy shows
that the UP made no adequate contingency plans for the invisible
blockade and its effects on the economy (invisible because the US has
not called openly for an economic blockade of Chilebut the denial of
credits, spare parts, and technology has a similar effect). This lack of
preparation on the part of the UP intensified the inevitable effects of the
invisible blockade unnecessarily. Allendes trip to the UN was a first
step to try to remedy this problem.
In addition to the invisible blockade, open aggression has been waged
by Kennecott Copper, supported if not planned by the Nixon administration. Kennecotts attempt to boycott Chiles copper in Europe
(where Chile markets over 60 per cent of its output) came at a crucial
time when the UP government was negotiating new copper deals for
1973. If the boycott is successful, the Chilean economy would be
severely damaged. Sales of copper from the ex-Kennecott holdings come
to some $180 million from a sale of 180 thousand metric tons, out of
a total foreign sale of 750 thousand metric tons. If Kennecotts boycott
were effective, it is probable that Anaconda would also initiate actions
to recover copper from its ex-holdings, which are far larger than
Kennecotts. So far the French courts have fortunately ruled in favour
of Chile, but the psychological effect of the threat has damaged Chiles
prospects for future foreign sales.12
October 1972: the Rightists Renewed Offensive

The economic problems caused by bourgeois counter-attack and imperialist blockade finally exploded into open political crisis within Chile
in August 1972. High demand and inadequate supply (it seems industrial production probably rose only about 3 per cent in 1972)
11

These figures come from an article by Fernando Fajnzylber in Chile Hoy of 410
August 1972. Fajnzylber is an economist who works with the government office of
foreign economic affairs.
12 For details on the history of the Chilean copper industry and an understanding of
the present boycott, see La Batalla Por El Cobre by Eduardo Novoa Monreal,
Santiago 1972; also New Chile, published by NACLA in 1972 in Berkeley, which
contains an article on copper by Marc Herold. The figures on foreign sales of copper
are provided by an interview with Jorge Arrate, the Vice-President of CODELCO, in
Chile Hoy of 1319 October 1972. CODELCO is the state copper company.
16

unleashed massive inflation and a hectic black market. Low official


prices led to rampant speculation; the market economy was visibly
undermining the state sector, instead of the other way around. The
government decided on huge price increases to end speculation. Many
popular items went up 100 per cent. These price hikes were not adequately explained to the masses. They affected the poor more than the
rich, since the rich had more liquid capital. The 100 per cent across-theboard pay rises ordered to compensate for inflation did not go into
effect until two months after the price increases, and their non-discriminatory nature did nothing to further a re-distribution of income.
The Right took advantage of the momentary discontent of large
sectors of the population to launch a series of provocations in early
September which resulted in six dead and thousands arrested in only a
few weeks. Certain factions of the bourgeoisie (led by the factory owners, represented by the National Party) were clearly attempting to
provoke a military coup dtat to rescue the country from chaos.
The events of September recalled the march of the empty pots of
December 1971 and Fidels warning about fascism. It should be noted
that Chile unites many of the conditions necessary for fascism: economic
crisis, far-right parties with some mass backing, demagogic leaders
capable of mobilizing an extremely unhappy middle and lower-middle
class, organized para-military groups like Patria y Libertad and
Comando Rolando Matus, and so on. To confront the crisis, the UP
organized a massive support march: the large and militant turnout of
two million workers throughout Chile discouraged the fascist sectors of
the Right. So did the opportune revelation by Allende of some of the
details of the conspiratorial September Plan to bring down the
government.
But the Right was only temporarily thwarted. The plans for September
were put off till October. The general bourgeois offensive began with a
transport strike by truck owners. (These owners had signed an agreement in September covering their economic demands, which they had
publicly proclaimed as more than satisfactory. They struck in October
for political, not economic reasons.) The truck owners strike was
followed two days later by a strike by shopkeepers. Sympathy strikes
were quickly called by the professional organizations of doctors,
nurses, engineers, lawyers, bank employees, and airline pilots. This
bourgeois general strike partially paralysed the country. Counterrevolutionary attempts to close down the factories, however, met with
stubborn working-class resistance, and plants remained open. The
government declared Emergency Zones in 22 of the 25 provinces; the
Army was put in charge of the maintenance of law and order and
political demonstrations were banned. The military were also used to
deal with over 200 rightist attempts at sabotage (including some dozen
dynamitings of railway tracks and the burning down of part of a large
textile plant in Concepcion). The government and the working class
were able to keep production limping along, with the help of the
Armed Forces. But the UP could not defeat the strike. The economy
suffered huge damage; the Minister of the Economy estimated the cost
of the 26-day strike at $200 million. The crisis was only resolved after
the UP made the decisive political concession of bringing three major
17

military figures, including the Commander-in-Chief of the Army, into


the Cabinet.
The National Party had hoped to overthrow the Allende government
during the strike, but the Army proved reluctant to carry out a coup.
The more moderate Christian Democratic Party, on the other hand,
was fully satisfied with the military Cabinet. The image of the UP had
been damaged, and the presence of the Armed Forces in the government provided solid guarantees for the upcoming March Congressional elections. The UP had been forced to rely on the classical repressive enemy of the working class to break a strike led by the bourgeoisie, instead of relying on the working class itself. The Christian
Democrats had maintained their dominance within the bourgeois
camp and now confidently awaited the elections.
The October offensive of the bourgeoisie further polarized the Chilean
political scene. Every organization, and almost every individual, was
forced to take a position for or against the government. The strike
clarified the strengths and the weaknesses of all class forces. The
bourgeoisie showed that it had a large amount of mass support, having
brought most of the petty bourgeoisie (small owners, white-collar
workers) over to its side. Many of these strata originally sided with the
UP, but have since swung to the side which was apparently stronger.
The government was critically weakened. The working class, on the
other hand, showed renewed strength and imagination. Important new
organizations, the Co-ordinating Committees, were set up during the
strike with the official backing of the SP and the MIR. The function of
these committees was to unify all organizations in a local area to run
the economy of that area without the participation of property owners.
Although so far limited in number, they potentially represent an
important step towards workers control. In general, during the strike
the working class was forced to rely on its own resources and did an
admirable job of it. Finally, the Armed Forces showed that they reject a
coup for the time being, agreeing with the Christian Democrats that the
UP could be destroyed legally. Their immediate job in the government
was to impose a temporary truce in the class struggle, discouraging the
working class from pressing its demands.
The Aftermath of the Attempted Truce

Following the attempt by the military to impose a truce, the economy


continued to deteriorate. On 10 January 1973 the Minister of the
Treasury Fernando Flores made a major speech announcing that the UP
would install some kind of rationing of basic products. The Allende
government was forced to take this step, despite fears that it would
cost votes in March, because of the spiralling growth of the black
market. Oil, detergents, sugar, toothpaste, toilet paper, coffee, cigarettes, and other essential products are almost unavailable, or rarely
available, in much of established commerce. Instead they are sold at
two or three times the official price illegally. The UP was forced to take
drastic steps to insure delivery of basic goods at official prices. The
government, however, has not yet produced any effective measures to
implement the promised controls. Mass organizations of the exploited
18

classes, especially the JAP, the Co-ordinating Committees, and the


Peasant Councils, have organized entire local distribution systems on
their own, while the government has stalled. The governmentcontrolled distribution system, DINAC, controls only about a third of
the circulation of basic consumer goods: the rest is in the private
sector. The bourgeoisie has virtually ceased to invest in industry or
agriculture, and used its capital to speculate on the black market, buying
huge quantities of goods, hoarding them, and later selling them at a
large profit. The government is unable to cope with the situation; only
real mass mobilization can crush the black market. The revolutionary
solution of the distribution problem is the same as the solution of the
production problemworkers control, not governmental bureaucracy. Many JAP have organized rationing cards and picked up goods
directly from DINAC, thereby assuring a necessary minimum supply of
commodities at official prices, without the exasperating queues that
confront all Chilean shoppers (except black market buyers). The Right
claims that the incompetent tyranny of the government is responsible
for the hoarding and black market, and is hoping for electoral gains by
attacking alleged UP plans to install a Cuban dictatorship to control
food consumption. The Chilean bourgeoisie is thus profiting both
economically and politically from the black market crisis. On 22 January
1973, the government announced the formation of a National Secretariat of Distribution to train inspectors to discover black market
operations and to supervise the action both of established commerce
and the JAP. Five military officers are to occupy key posts in this
organization, following the line started with military entry into the
Cabinet. Still no definite rationing system has been imposed.
Meanwhile the Right has developed a new tactic to block governmental
control of industries, this time using the judicial branch of the State.
Some 30 requisitioned industries have been placed under judicial
embargo (called precautoria). The courts have ruled that the state manager (interventor) of newly requisitioned factories cannot make any
decisions without the agreement of a representative of the old owners,
who is appointed as a temporary co-manager. This ruling in effect
hinders if not stops production in the affected industries, five of which
are on the list of the 90 industries scheduled for permanent control by
the government. This new twist of the Right is extremely dangerous
and the judges decisions are now being appealed by the UP in the
courts. But the latter have consistently inclined to the right and have
become an increasingly important weapon of the bourgeois parties in
their general political offensive.
The government has for its part presented to Congress a new bill to
regulate the requisition of industries. Orlando Millas, the Communist
Minister of Economy, presented this measure on 24 January. The next
day, in a surprising move, the Socialist Party publicly pronounced
itself against the bill, claiming it proposed the return of several requisitioned industries to their former proprietors and stating that the
Socialist Party had not been previously informed of the measure. Four
days later Allende, himself a member of the Socialist Party, publicly
backed the new bill and repudiated his own party, counter-claiming
they had been fully informed. Allende, as so often before, sided with
19

the Communist Millas against his own Socialist Party. The resolution
of this dispute cannot be foreseen, but in any case the bill presented to
Congress will not be considered till after the March elections; in addition, it overlaps the pending right wing Constitutional Reform Bill on
requisitioning still in the House of Deputies.
Abroad, Allendes recent tour helped Chiles diplomatic position
considerably, and was probably influential in the refusal of German and
Italian courts (so far) to permit Kennecott to embargo other copper
shipments in those countries. But another test will soon come with the
new re-negotiations of the foreign debt in Paris. Chilean success
therefore depends on two factorsEuropean support and the degree of
US opposition. European support may now be diminished because
France will not back Chile as strongly as it did in 1972, since the
Pompidou regime no longer looks so tolerantly on the Allende
experience, given that the latter has served as a model for the French
Union of the Left. The extent of American opposition depends on the
outcome of the surprise bilateral talks begun in December 1972
between Chile and the US on all aspects of relations between the two
countries. The Nixon administration will continue to attempt to force
Chile to acknowledge responsibility to pay indemnification to the
expropriated copper companies. This concession is vital for Washington in order to quash the judicial precedent set by Allende for establishing the concept of excess profits: for it was on the basis of this notion
that the Chilean government decreed that no compensation would be
paid to the American copper companies. Acknowledgement by Chile of
its responsibility to pay and indemnify could even be more symbolic
than real; it is the principle which counts for US imperialism as a
whole. It is in fact rumoured that the US State Department has told
Chile it will lend Chile the money on easy terms to pay off the proposed
indemnification. Such an agreement would then lead to a smoother renegotiation in Paris. The UP government, however, cannot easily back
down on its most proudly proclaimed achievement within Chile. There
are some sections of the coalition which are seeking a kind of accommodation on the question which will ease Chiles balance of payments
crisis, perhaps short of an open capitulation to the US. The new
negotiations represent a dangerous diplomatic move. There is no doubt
that the correct line would be a refusal to discuss compensation for the
copper companies and a denunciation of the bilateral public debt with
the US until such time as the Nixon regime ceases its aggressive economic blockade and offers realistic terms for the financial re-negotiation, within the standards set up by the Club of Paris.
The Need for Mass Mobilization

Since the October crisis the political environment in Chile might best
be described as an uneasy truce. The presence of the military in the
Cabinet naturally prevents the UP from organizing a vigorous proletarian offensive. Yet it is above all this that is needed. It is doubtful
whether the March Congressional elections will change anything
(assuming the major political forces continue with their present
strategies). In order fundamentally to change the present balance, the
UP would have to either receive more than 50 per cent of the vote or
20

less than 333 per cent of the vote, either win a majority or lose the
present third which now permits it to block major right-wing legislation.13 Neither alternative looks likely; instead it looks as if the UP will
receive some 4045 per cent and the opposition the rest.
With the Right remaining in control of Congress, the UP would face the
same obstacles that it has been unable to overcome during the past two
years. The prospect would be for three more years of the same stalemate, until the presidential elections of 1976. This would mean the
Allende government resting on the laurels of its anti-imperialist and
anti-monopolist reforms, while indefinitely postponing the building of
socialismin other words, the strategy of the CP. Eventually this
would probably mean a return to full-blown capitalism with a very
strong public sector.
In order to avoid this fate, the UP would have to organize a profound
mass mobilization. What should be the transitional objectives for such a
mobilization? One could still be the traditional aim of a new constitution to provide a superior legal framework for revolutionary advance
towards a future workers state. A second essential goal should be the
construction of solid popular organizations of dual power. The
Peasant Councils and the Co-ordinating Committees are organizations
which grew up spontaneously because of obvious class needs. Such
bodies need to be enormously strengthened. The Chilean proletariat
learned from the bourgeois general strike that it needs its own direct
organizations of economic and political power. The present government has shown that it does not provide such organizations. The
Peasant Councils, the Co-ordinating Committees, the Production Committees, and the JAP, provide an anticipation of them. Such organizations could become the germs of a future workers state. The UP
government should take advantage of its tenuous control of sections of
the bourgeois state at least to neutralize repression against potential
organs of dual power and to create the space for bureaucracy-free
popular councils to develop from below. Such concrete organizations
of mass struggle are needed in the short run in any case, to confront a
possible repetition of the October strike or the permanent possibility of
a military putsch.
As of now, the UP has shown little inclination to adopt such a strategy.
Even if it wanted to, the difficulties are today much greater than a year
13

At present, the Right can pass new regular legislation with its majority control of
Congress. Allende, however, can veto such legislation and the Right needs a twothirds majority to insist. This means that at present neither the government nor the
opposition can pass new legislation without the agreement of the other. There are
different procedures for a Constitutional Reform. The Right is at present claiming
that it needs only a simple majority to over-ride the Presidents vetos in such cases.
The government denies this, and is appealing to the Constitutional Tribunal for a
decision. The Right can resort to another tactic, Constitutional impeachment of a
Cabinet member or a governor or mayor. With a simple majority, Congress can
accuse such a public figure of violating the Constitution and force his resignation.
The Congress has done this with two Ministers of the Interior, and several governors
and mayors. In order to impeach the President, however, the Congress needs a twothirds majority. Were the Right to receive a two-thirds majority in March, it could
force Allendes resignation.
21

ago. Economic crisis without political gain has driven many sectors of
the population into the camp of counter-revolution. The Allende
government bears in this respect a close resemblance to the Russian
Provisional Government between February and October 1917. Although it still has the support of the overwhelming majority of the
working class, it is losing strength in as much as it does not lead that
majority to the seizure of proletarian state power.
Despite the obstacles, such an offensive strategy is the only alternative
to simply treading water. It should be remembered that there remain
huge sectors of the Chilean masses which the UP has failed to mobilize.
Only one third of the proletariat is organized in unions. Despite an
improved distribution of income, the poorest 60 per cent of Chilean
families receive only 28 per cent of the national income, while the
richest 6 per cent receives 46 per cent.14 Over one-quarter of the
population of Santiago lives in flimsy shacks without running water.
There are more than enough popular forces to mobilize, once these
disinherited and exploited groups are convinced that they are struggling for real social and political power and not just the replacement of
a few Congressmen by a few others. An aggressive strategy on the part
of the UP, strengthening existing mass organizations and creating
potential new institutions of dual power, is the only way to capture
those sectors of the petty bourgeoisie that can be rescued from the
Right. Such an offensive would create severe internal stresses in the
Armed Forces, and undoubtedly unleash more attempts at a coup dtat.
But a vigilant and alerted working class could then exert such a political
force of attraction on the rank-and-file of the Armed Forces that they
would refuse to back officers who tried to foment a putsch.
The Position of the MIR

The second essential aspect of an offensive strategy would be an end to


present inter-party sectarianism within the UP. Unfortunately such a
prospect also seems remote. Concretely, it would be necessary to
incorporate the MIR into the UP and defeat the present leadership of the
CP. The question of the MIR is a key one for the future. The MIR has
correctly criticized the UP over the course of the last two years, for
bureaucracy, sectarianism, under-estimation of imperialism, overreliance on the present government, and above all the failure to mobilize
the whole working class in order to win real state power. It should be
remembered, however, that the MIR is not as yet a vanguard party
which represents an alternative to the UP for the masses. The MIR was a
clandestine organization largely made up of students before the election
of Allende. It had carried out numerous military actions, proposed
armed struggle as the only form of revolutionary politics for Chile, and
in general followed a strategy similar to that of the Tupamaros in
Uruguay. The MIR did not expect the UP to win the 1970 elections, and
when it did, remained outside the UP coalition while offering it critical
support.
14

These figures are furnished in an interview with the then Sub-Secretary of


Economy, Oscar Garreton, in Chile Hoy of 2026 October 1972.

22

The MIR thereby became one of the few organizations of the Latin
American insurrectionary left to try to organize a mass base in conditions of normal bourgeois democracy (other attempts have been made
in Peru). In two years, the MIR has succeeded in winning popular
support through hard organizing work, but this following is still very
small, as indicated in the figures for the CUT elections given above (see
footnote 3). Its greatest successes have been among the marginal social
strata, previously unorganized, such as the unemployed shack dwellers
and the Mapuche Indian peasantry. It has been difficult for the MIR to
gain a strong base among the organized working class, because within
the proletariat itself it has had to compete with the traditional and
powerful organizations of the CP and the SP. Nevertheless, it should be
remembered that the MIR has never claimed leadership of the Chilean
revolution. Instead it has consistently presented itself as a group which
could merge with the left of the UP in order to defeat the reformist
politics of the CP. Such a merger and such a defeat are necessary, but at
present they seem more remote than ever.
It is necessary to measure the MIRs strengths and prospects objectively.
The MIR was not a working-class party prior to 1970, and even after
hard organizational work its leadership remains composed of the same
ex-students as before. These leaders and the movement as a whole
retain a certain para-military attitude which has in some cases hindered
day-to-day work among the masses. There is a genuine dilemma here,
because para-military preparations are unquestionably necessary to
meet the ever-present possibility that the MIR may be forced underground by a putsch or by an escalation of the CPs attacks on it. The
MIR justifies its internal structure by appeals to Leninism and Bolshevism, but the Bolsheviks were a party which had far more solid roots
in the working class than does the MIR. In any case, the fact remains that
as of yet the MIR has been unable to attract large segments of the
proletariat. The CUT elections, although not a very reliable guide,
indicate that the Christian Democrats have so far picked up more
votes from anti-UP sentiment than has the MIR.
A comparison between Chile in 1972 and Russia in 1917 is often made
by Chilean Marxists. To what extent is such a comparison justified? It
is clear that there is real sense in which the UP corresponds to the
Provisional Government of the February Revolution after the socialists
had entered the Cabinet but before the Government had lost the
support of the majority of the working class. The CP has many analogies
with the Mensheviks, with their correct Plekhanovite theory of stages.
The heterogeneous SP can be likened to the Social Revolutionaries
while the MIR might be compared to the Bolsheviks. European imperialism finds its parallel in American imperialism in Chile. The
rightist October offensive in Chile would correspond to the retreat of
the left during the July days in Russia. Bourgeois industrial sabotage by
property owners was, of course, also practised in Russia.
The historical differences are more important than the parallels, however. The major difference lies in the position of the army, which in
Russia was in a state of complete collapse because of its defeats in the
First World War. A second major distinction is the mass support that
23

the Right enjoys in Chile, which was absent in Russia. A third major
divergence is that the UP has made important economic advances and
offered major benefits to the working class, whereas the Provisional
Government was totally ineffective. Finally, a fourth fundamental
difference is that in Chile the working class is not organized in anything
like Soviets. The Co-ordinating Committees and the Peasant Councils
could conceivably develop into institutions of dual power, but unfortunately have by no means done so yet. Another seemingly major
difference is actually minor. Russia was an overwhelmingly peasant
country, and Chile is not. But in Russia the struggle for power took
place in the cities, principally Leningrad, which corresponds to the
importance of Santiago in Chile. A more important divergence probably lies in the respective natures of the MIR and the Bolsheviks. The
Bolsheviks were extremely weak just after the February Revolution but
they were potentially very strong, and had two decades of organizing
behind them. The working class in Russia quickly abandoned the
Mensheviks and Social Revolutionaries when those parties could not
fulfill the basic demands of the proletariat and peasantry. In Chile, the
MIRs weakness is much deeper. It is a new party, which was formed in
1965 but which only assumed its present shape in 1967. The workers in
the CP and SP have decades of party loyalty behind them, and will not
easily break with a government which was initially successful in fulfilling a good part of its programme.
After the March Elections

Since the MIR is unable to offer a mass alternative to the UP, and the UP
is unwilling to adopt any offensive strategy, what is in fact the likely
scenario after the March elections? If this authors predictions are
correct, the Congressional elections will not fundamentally change the
present balance of forces. In other words, we can expect something
like a continuation of the status-quo in the short run. On the other hand,
there are groups on both the right and left which will certainly refuse to
accept the current impasse. The most obviously restive force today is
the National Party, the representative of oligarchic capital and the latifundist landowners. Unlike the Christian Democrats who are a more
modern and mass-based bourgeois party, the National Party is not
prepared to tolerate the present situation. Its fundamental interests have
been too severely damaged by the UP and it does not want to wait until
1976 to recuperate them. Hitherto, the National Party has been the
junior partner in the united front of the Right, but it has also recently
registered large gains in the tense atmosphere of sharp class struggle. It
is now waiting for the March elections to measure its strength against
the Christian Democrats. In the likely event that the combined Right
does not win a two-thirds majority in Congress, the National Party will
once again urgently pressure the Armed Forces to carry out a swift
coup. To forestall such a coup and maintain its leadership of the Right,
the Christian Democrat Party would demand further concessions from
the UP. Such concessions would probably include specific guarantees to
halt expropriations, or even the entrance of some Christian Democrats
into the Cabinet. A political deal of this sort might well involve outlawing the MIR. (The Right has already managed to pass an arms control
law which provides a juridical basis for such a repression.) A major
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retreat by the UP along these lines might then lead to the desertion of
the left sector of the governmental coalition. The SP is famous for its
division between Left and Right wings: concession by the Allende
government to the Right after March could easily cause a split in the
SP. In such an eventuality even the CP could be in danger of losing the
support of its rank-and-file. With a weakened UP governing with the
tacit assistance of the Christian Democrats, large sections of the Chilean
proletariat would soon become demoralized, while other workers
would doubtless go over to extra-legal struggle.
These are sombre predictions for such a promising experiment as the
and it is to be hoped that they will not be fulfilled. There are many
other alternatives. The historical process at present under way in Chile
remains an extremely rich one, and will undoubtedly furnish many
surprises. Despite all the mistakes and vacillations of the government
itself the working class has on balance been greatly strengthened in the
last two years. The UP experience may yet lead to a revolutionary
assault on the state apparatus of capital and to the inauguration of a
successful transition towards socialism.
UP,

February 1973

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