Human Rights in Pinochet’s Chile: The Dethronement of Politics 18 страница
Capitalism and Freedom
Chile’s transformation into an exemplary laboratory of neoliberalism owed much to Harberger’s Chicago Boys. On 12 September 1973, the morning after the coup, their 189-page economic programme, El Ladrillo (‘The Brick’) was on the desk of every major figure in the new regime. It called for trade liberalisation and tariff reductions; widespread privatisation, including of social security; and a regressive value-added tax. In 1993, Harberger noted with satisfaction that this vision was now overwhelmingly accepted by all of Chile’s major parties, while, at the time, the Chicago programme was ‘too market-oriented, too open-economy, and too technocratic’ even for the traditional Chilean right.32 In 1975, Friedman met with Pinochet to convince him that Chile’s economy required ‘shock treatment’, primarily in the form of a drastic reduction in public spending. The general, Friedman noted, ‘was sympathetically attracted to the idea of a shock treatment but was clearly distressed at the possible temporary unemployment that might be caused’.33 In the wake of his visit, Friedman wrote to Pinochet to stiffen his resolve: ‘There is no way to end the inflation that will not involve a temporary transitional period of severe difficulties, including unemployment’.34
Following the argument of the Chilean diplomat Orlando Letelier, Naomi Klein has argued that this economic ‘shock’, which led to a massive transfer of wealth to the wealthiest individuals and monopolies, required the political shock of the junta’s torture chambers. This relation was obscured, she contends, by the reports of human rights organisations, which treated the torture and disappearances in isolation from the economic agenda. Letelier had argued that the assumption that ‘economic freedom’ and political terror were independent of each other allowed the neoliberal economists to ‘support their concept of “freedom” while exercising their verbal muscles in defence of human rights’.35 According to the Chilean diplomat, the ‘laissez-faire dreams and political greed of the old landowning oligarchy and upper bourgeoisie’ required both the technical respectability provided by the Chicago economists and the violence of the junta. There was an ‘inner harmony’ between the political and the economic, he argued, and those who advocated economic shock therefore shared responsibility for the brutal methods used to implement it.36
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It is true that, faced with protests in the wake of his visit to Chile, Friedman presented his advice to the regime in apolitical, technical terms; despite his ‘profound disagreement with the authoritarian political system of Chile’, he wrote, he did not consider it ‘as an evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague’.37 He depicted his own recommendations (the abolition of price controls and subsidies, and the loosening of employment regulations, to make it possible to ‘eliminate waste’) as aimed simply at removing obstacles to the efficient operation of the market.38 It is also true that Friedman continued to profess his support for human rights. Two years later, he summarised his own political message as follows: ‘Property rights are not in conflict with human rights. On the contrary, they are themselves the most basic of human rights and an essential foundation for other human rights.’39 On closer examination, however, it is clear that Friedman’s argument in Chile was not that political freedom and economic freedom were ‘entirely unrelated’, as Letelier and Klein both argue.40 Rather, he argued that they were intimately related: property rights are the essential foundation of all other human rights, he contended, and a free market is necessary for realising the ‘equal right to freedom’.41
Friedman never departed from his argument that economic freedom is both a central component of human freedom and the necessary condition for all other freedoms. He stressed the necessary relation between economics and politics even during his visit to Chile, and by his own account this was as big a shock to his audiences as his argument for dramatic austerity. In what he later called his ‘anti-totalitarian talk’ to students at the Catholic University of Chile in Santiago, his key theme was ‘the fragility of freedom’.42 He told his audience that Chile’s present difficulties were almost entirely due to ‘the forty-year trend towards collectivism, socialism and the welfare state’, and depicted the welfare state as the key threat to free societies. Today, after decades of neoliberal hegemony, the characterisation of state intervention into the economy as a threat to freedom is ubiquitous. Friedman’s students, in contrast, received his message with ‘an attitude of shock’.43 Such talk, however, was classic Friedman. His major work, Capitalism and Freedom, explicitly contested the ‘delusion’ that political freedom could be combined with a socialist economy.44 Historically, political freedom came into being along with the free market and the emergence of capitalism, he argued, while social planning and welfarism had required ‘trampling rough-shod on treasured private rights’.45
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Although Letelier recognised this aspect of Friedman’s argument, he argued that, in Chile, ‘when the economic theories he advocates coincide with an absolute restriction of every type of democratic freedom’, Friedman had instead disentangled economics and politics.46 In rendering Friedman’s argument, Letelier, perhaps unconsciously, distorted it. The central argument of Capitalism and Freedom is not that economic liberalism is necessary for political democracy, but that it is necessary for political freedom – defined as the absence of coercion by one’s ‘fellow men’.47 Although it seems obvious that Pinochet’s torturous regime fundamentally violated this condition, the coercion that most concerned Friedman took the form of political interference with the market. By ‘removing the organization of economic activity from the control of political authority’, he argued, ‘the market eliminates the source of coercive power’.48 Following Mises’s account of market sovereignty, Friedman depicted the market as a superior political model, a ‘system of proportional representation’ in which (in his typically trivial example) ‘each man can take a vote, as it were, for the color of tie he wants and get it’ without having to submit to the preference of the majority.49 It was an ‘utter fallacy’ to assume that the equal weight of each individual implies majority rule, he argued at the California symposium; ‘All that each person has equal weight implies is that nobody has a right to violate anybody else’s rights.’50
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Despite their apolitical presentation, the Chicago Boys followed Friedman in attributing a series of what I have called ‘(anti)-political virtues’ to a competitive market order, among them the absence of coercion, impersonal rule, non-discrimination, and, pre-eminently, individual freedom. Their advocacy of free-market reform was predicated on a stark dichotomy between politics (defined by coercion and conflict) and the market (which enabled non-coercive, mutually beneficial, voluntary social interchange). Pablo Baraona, a Chicago graduate who later became minister of the economy, outlined this dichotomy in the starkest terms. Chile’s problems, he argued, were all attributable to politics – ‘the quest for power for its own sake and increasing unrestrained demagoguery’.51 In contrast, the market was ‘the economic manifestation of freedom and the impersonality of authority’.52 The leading ‘Chicago Boy’, Sergio de Castro, who served as both minister of economy and minister of finance under Pinochet, believed that (economic) freedom was best secured by ‘authoritarian’ government with its ‘impersonal’ mode of exercising power.53 Just as Mises had argued that economic autarky was a just cause for war, the argument that a functioning market was the necessary condition for domestic peace licensed state violence ‘to crush the onslaught of peace-breakers’.54
Long before Friedman, Mises described the market order as the real basis of all the declarations of rights and charters of liberties, which remained a ‘dead letter’ without economic freedom.55 The freedom of a market society, as we have seen, operated within strict margins; there is no freedom to challenge the market as the key allocator of goods and social positions, to ameliorate the inequalities it produces, or to establish ends collectively. Rather, individual freedom is subject to the ‘harsh social pressure’ of the sovereign market, and the pursuit of individual values through consumption is limited by personal finances.56 Mises spelled out the necessary relation between market freedom and political repression most clearly: there is ‘in the operation of the market no compulsion or coercion’, he argued. Therefore, the state ‘employs its power to beat people into submission solely for the prevention of actions destructive to the preservation and the smooth operation of the market economy’.57 The neoliberals knew all too well that their vision of freedom was indistinguishable from the violence that secured submission to the market.
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In the Chilean case, what is most striking about the relation between the economists and the junta’s repression is not that they ignored it, but how willingly they embraced it. Friedman wrote to Pinochet to assure him that Allende’s regime represented the ‘terrible climax’ of a trend towards socialism, and that the general had been ‘extremely wise in adopting the many measures you have already taken to reverse this trend’.58 In 1977, the Chicago human capital theorist, Gary Becker, wrote of his pride in his Chilean students, whose ‘willingness to work for a cruel dictator and start a different economic approach was one of the best things that happened to Chile’.59 Harberger later dismissed those who protested the junta’s repression, saying: ‘if you look at human rights violations or political violations, you will find them in any Asian country almost at that time, in multiples of whatever was happening in Chile’.60 Hayek told the right-wing Chilean newspaper El Mercurio that, while he did not support permanent dictatorship, he saw Pinochet’s ‘transitional dictatorship’ as a ‘means of establishing a stable democracy and liberty, clean of impurities’.61 Within Chile, de Castro reflected that, as public opinion was very much against the Chicago Boys, it was ‘our luck that President Pinochet understood and had the character to withstand criticism’.62
Contra Klein and Letelier, the neoliberals did not treat their technical economic agenda and the junta’s political repression as ‘entirely unrelated’.63 On the contrary, neoliberalism in Chile, as elsewhere, was always a political (or anti-political) project that found its normative justification in its claim to enhance the form of freedom that only a competitive market could provide.64 Faced with a brutal dictatorship prepared to implement his economic agenda, Friedman was not a technician focused on his area of expertise to the exclusion of the political fallout. Rather, Pinochet’s dictatorship offered a solution to a seemingly intractable neoliberal problem: how to replace popular sovereignty with the sovereignty of the market. It demonstrated what was necessary, in a context defined by strong collective politics and norms of solidarity, to induce subjects to abandon romanticism and the political contestation of ends, and adopt the morals of the market.
Pinochet’s Political Miracle
In 1982, Friedman claimed that Pinochet’s Chile was a ‘miracle’. The previous year, Hayek had called Chile’s economic recovery ‘one of the greatest miracles of our time’.65 For Friedman, Chile was not simply an economic miracle – it was ‘an even more amazing political miracle’. Despite having facilitated a massive transfer of wealth to the rich, Friedman contended that, by substituting market mechanisms for state control, the dictatorship had replaced ‘control from the top with control from the bottom’.66 There was, nonetheless, something surprising about this neoliberal recourse to the theological vocabulary of the miracle. As the conservative German jurist Carl Schmitt noted in 1922, the theistic paradigm of the miracle, in which God suspends the laws of nature and intervenes directly into the world, had long ago been displaced by the Enlightenment belief in the immanence of natural law, with deep consequences for both metaphysics and politics. In the context of outlining his infamous argument that sovereignty consists in the capacity to declare a state of exception, Schmitt argued that ‘the exception in jurisprudence is analogous to the miracle in theology’.67 While reactionary thinkers still believed in the necessity of divine and sovereign intervention, he argued, the dominant belief of his own time was that the ‘machine now runs by itself’.68 For US neoliberal economists, who supposedly believe in the immanent laws of the market, no miracles should have been needed.
In Chile, Friedman and the Chicago Boys’ economic advice was underpinned by their faith in a naturally occurring equilibrium that would be achieved by an ‘invisible hand’ if the market was protected from collective political action and state intervention. Friedman credited Adam Smith with the insight that, while the market looks chaotic to the ‘untrained eye’, it is a ‘finely ordered and delicately tuned system’ of ‘natural liberty’.69 This conception of the market also had its theological lineage, as earlier neoliberals were well aware.70 Yet, rather than being structurally modelled on the miraculous interventions of a transcendent God, the idea of the market as a natural order had the same systematic structure as a world ordered by an absent God who governed exclusively through natural laws. Neoliberalism was founded on the rejection of this model of the market, which the German ordoliberal Alexander Rüstow disparaged as a reflection of theological faith in the ‘eternal wisdom of the natural law’.71 Wilhelm Röpke mocked the idea that the competitive market was a natural order ‘miraculously directed by the “invisible hand” mentioned by Adam Smith, which in reality is nothing but the “divine reason” of deistic philosophy’. The problem with such a belief, according to the neoliberals, was that it led to misplaced optimism about the self-regulating properties of the market, and neglect of the ‘non-economic prerequisites’ of a market economy, including its moral prerequisites.72
On the surface, Friedman’s model seems to replicate this immanent market order that needs only to be freed from interference. He assigned the price mechanism the role of distributing the rewards and punishments that dictate where individuals and firms should direct their efforts, and he argued that this impersonal direction was disastrously impaired by the ‘invisible hand in politics’, as politicians seeking to promote the good instead produced ends that were ‘no part of their intention’.73 On closer examination, however, even at their most technical, the Chicago economists were deeply aware of the non-economic prerequisites for their preferred market order. If romanticism and dema-goguery were the greatest barriers to ‘good economics’, a working market order required market subjects responsible for their own fates. The Chicago economists were also aware that the market did not create its own virtues. Röpke had argued that invocations of an invisible hand obscured the fact that the ‘market economy needs a firm moral, political and institutional framework’, including ‘well weighed laws appropriate to the economic system’.74 For Friedman, achieving such a market-compatible framework was the junta’s political miracle.
In extolling Chile’s political miracle, Friedman argued that a free market, unlike a military structure, is typified by dispersed authority – ‘bargaining, not submission to orders, is the watchword’.75 But submission remained central to his account of the market. Economic pain (like physical torture) was designed to break the political subjectivities that led people to resist the ‘fate’ doled out by the market. Everyone in this country was ‘educated in weakness’, minister of the economy Baraona warned; ‘to educate them in strength it is necessary to pay the price of temporary unemployment, of bankruptcies’.76 When asked about the high bankruptcy rate, junta member Admiral Merino concurred: ‘Let fall those who must fall’, he said. ‘Such is the jungle of economic life. A jungle of savage beasts, where he who can kill the one next to him, kills him. That is reality.’77 Such statements were a long way from the myth of the sweetness of commerce, but they were not far divorced from the tenets of the neoliberal market, for which, as Michel Foucault has stressed, the central principle was not exchange but competition, with its systematic production of winners and losers.78 Weakening solidarity and creating competitive subjects was central to what Pinochet identified as the junta’s ultimate goal: ‘not to make Chile a nation of proletarians, but a nation of entrepreneurs’.79
Pinochet’s Chile was not the only place where Friedman had identified a dual miracle. Two years prior to heralding Chile’s miraculous transformation, he and his wife, Rose Director Friedman, declared that the ‘story of the United States is the story of an economic miracle and a political miracle’.80 The Friedmans attributed these earlier miracles to two complementary sets of ideas, both published in 1776. Alongside Smith’s account of the market as a realm of voluntary social relations that requires ‘no external force, no coercion, no violation of freedom’, they placed the US Declaration of Independence’s contention that all individuals are ‘endowed by their Creator with certain unalienable Rights’, among them ‘Life, Liberty, and the pursuit of Happiness’. According to the Friedmans, these two ideas were mutually constitutive. ‘Economic freedom’, they argued, ‘is an essential requisite for political freedom.’ The market enables individuals to pursue their own values and ends, while the guarantee that they will be unmolested in doing so fosters economic development. Both Smith and Jefferson, the Friedmans argued, saw concentrated government power as the great danger, and ‘protection of the citizen against the tyranny of government as the perpetual need’.81 The inalienable rights of the American Declaration of Independence, from this perspective, existed not to found a sovereign state, but to ensure that state power was used to foster economic initiative. It would ultimately be towards this same end that the neoliberals would mobilise individual rights in Chile.
Inflated Expectations
The reliance of the immanent laws of the market on extra-economic violence and the imposition of a moral code is clear even in relation to the most technical of areas: the Chicago Boys’ remedies for inflation. From the Chicago perspective, inflation is not merely one problem among others; it is a spanner in the well-oiled market machine. For price signals and market sovereignty to replace human direction in shaping human behaviour, price stability is essential. During their Chicago studies, Pinochet’s economists had been converted to the tenets of monetarism, for which inflation, in Friedman’s often-repeated dogma, was ‘always and everywhere a monetary phenomenon’ – a product of a more rapid increase in the money supply than in output.82 Friedman depicted Chicago’s ‘counter-revolution in monetary theory’ – which displaced Keynesian attempts to foster economic stability through taxation and public spending – as ‘a scientific development that has little ideological or political content’.83 In his 1976 Nobel Prize lecture, he struck a technocratic tone, arguing that the ‘socially destructive inflation’ and ‘suppression of human freedom’ afflicting many countries were not results of ‘evil men’, nor of ‘differences of values among citizens’, but of erroneous judgments about the consequences of government actions.84
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