Some Political and Economic Problems in the Chilean Revolution,

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1 88 MARXISM TODAY, MARCH, 1978 Some Political and Economic Problems in the Chilean Revolution, Jose Cademartori (The author is a member of the Central Committee of the Communist Party of Chile. The paper, which has been slightly shortened, was delivered at a recent symposium held in Prague on "The Dialectics of the Economy and Politics during the Struggle for the Revolutionary Transformation of Society". An abridged version will appear in a future issue of World Marxist Review. The title and sub-headings are ours: the translation was by A. M. Elliott). Salvador Allende's victory in 1970 gave the Chilean working class, for the first time, the possibility of becoming a ruling class, without passing through an armed insurrection. The three years that followed constituted a revolutionary process, with intense class struggles. Even though it ended in a dramatic but temporary defeat, the Chilean people acquired an extremely rich fund of experience the study of which is far from having been completed. A new feature contributed by the case of Chile is that the revolutionary transformations carried out in the social and economic structure were brought about despite the fact that the proletariat did not succeed in winning full political power. In addition to the internal conditions, this became possible because, already in the decade of the seventies, the correlation of forces and the historical trend on the world scene have shown themselves to be favourable to socialism, to national liberation, to democracy and peace. The basic programme of Popular Unity posed as a priority task that of putting an end to the domination of the imperialist and the local monopolies over the economy and that of the landowners over the country's agriculture. Over and above this, a high level of consciousness had been achieved among the masses and even in very large sections of the middle strata, thanks to the propaganda work tarried on for many years. On the other hand, we had not carried out propaganda of a similar kind on problems of the superstructure, such as, for example, the reactionary character of the judiciary, the fascist tendencies in the armed forces, etc. This unevenness in the development of the consciousness of the masses played a part in the weaknesses from which the revolutionary process suffered. The agreement reached by the parties of Popular Unity on economic aims did not have a corresponding political strategy. We communists were not able to win the whole of Popular Unity for the correct line. The fundamental content of the programme was nationalisation of the basic wealth, thorough-going development of agrarian reform and the placing of strategic enterprises and sectors under state control. Equally essential was the improvement of the people's living conditions, respect for the gains of the middle strata and guarantees for private property not of a monopoly character. These three latter preconditions were essential, although not sufficient in themselves, in order to ensure that imperialism and reaction did not prevent the revolutionary goals from being achieved. The Middle Strata We certainly did succeed in carrying out the antiimperialist and anti-oligarchic tasks. But we did not succeed in rallying all the forces needed in order to consolidate and uphold those gains. Popular Unity was not sufficient for this. It was imperative to win over other social and political sectors. It has been said that the middle strata did not react favourably to the Popular Unity government, in spite of the economic benefits which they obtained. On this basis, some people deduce that their bourgeois economic background, and not economic considerations, was the factor which determined their conduct. According to this, they would have been obliged to march in step with the revolution only if the proletariat had imposed itself, by wielding its power. While it is true that the Popular Unity government did pay heed to not a few of the material demands of those sectors, it is no less true that, owing to the contradictions of the process, this seemed to be only temporary, unstable, uncertain. As the strategic differences became increasingly apparent in Popular Unity, and as disorganisation and indiscipline developed in its ranks and inflation and anarchy were let loose, the mass of the petty-bourgeoisie moved away from the proletariat in search of protection for their threatened stability and in-

2 MARXISM TODAY, MARCH, dependence. It was demonstrated that the economic interests of the social classes continued to be the final determining factor governing their political behaviour. For us communists, the political significance of the programme's economic line was very clear: an alliance of classes of the proletariat with the pettybourgeoisie and the middle strata and the neutralisation of that part of the bourgeoisie that was not monopolist. In some sectors of Popular Unity it was believed that this alliance was only possible on the basis of talcing from the Christian Democrats their political influence over those strata. But this presupposed two essential conditions: (a) that our Popular Unity policy was correct and in keeping with the guarantees given in the programme to the classes that were not proletarian, and (b) that the Christian Democrats would have abandoned the intermediate sectors and taken their stand, for all to see, by the side of the monopolies. Neither of these two preconditions was fulfilled. Our experience has shown that the alliance of classes, proletariat/middle strata/petty-bourgeoisie, an alliance that is strategic and not merely tactical, is an indispensible precondition for the consolidation of the anti-imperialist and anti-oligarchic gains, and that it calls for some form of understanding among the political forces represented in it. Confusion of Objectives In the light of this, it turned out to be a serious mistake that matters were placed in the forefront regarding which there had not only been no political understanding beforehand but no mass consensus either. That was the case with slogans such as 'People's Courts' and 'A Single Chamber of Parliament'. One of the greatest mistakes of Popular Unity was strategic duality in applying the fundamental programme. Arising from the intermingling of anti-imperialist tasks with socialist tasks and the fact that no precise borderline existed between one stage of the revolution and another, it happened that some sectors, urged on by the extreme left, maintained that the process was socialist in character from the very beginning. It is true that the programme spoke of "beginning the building of socialism", but it was not proposed to start with this. In the same paragraph it was laid down that it was a precondition for this that "the power of national and foreign monopoly capital" should be eliminated. The conclusion of one task and the beginning of another was made very clear. The Private Sector Furthermore the programme was very explicit in respecting the existence of a sector of private capitalist property, both in industry and urban activities and also in agriculture. It was also foreseen that there would be a sector of property that would be mixed in character, with state capital being associated with private capital. "The government of Popular Unity," said one of the documents of the electoral campaign, "will be a guarantee for... the great majority of owners, producers and business people who are not united with the restricted circle of capitalist power but suffer from it in many ways." It was, then, a grave mistake to disregard Popular Unity's undertakings in relation to these sections and, both in word and deed, to issue constant threats of expropriation. The requisitioning and 'taking over' of small and medium-sized undertakings and agricultural property created an atmosphere of mistrust, fear and hostility towards Popular Unity and threw the mass of the owners concerned into the arms of the counter-revolution. Instead of the main enemies being isolated, they were provided with allies, free, gratis and for nothing, and this contributed towards weakening the government of Popular Unity and towards making it easier for the situation to be resolved by a reactionary coup. Once again a demonstration was given of the grave consequences involved in trying to 'miss out stages' and to 'speed up' the revolution in accordance with people's desires but without regard for the objective conditions. The Public Sector The creation of the public property sector, which was carried through rapidly by the Popular Unity government, without having full political power, was made easier because of the fact that a state economic basis was already in existence. To this must be added the revolutionary determination of the Popular Unity government, the struggle and support of the working people and the application of certain juridical instruments not employed by bourgeois governments. The state and administrative apparatus for the control and management of the public sector demanded profound modifications. Advantage was taken of the autonomy of the Corporation for the Promotion of Production, under the direction of which came the industrial state enterprises. At the same time this autonomy militated against unified, centralised and planned management. There was a urgent need for work which required time and an ideological struggle in order to overcome the old evils of bourgeois administration. Ownership not a sufficient condition One-sided emphasis on the correct thesis that socialism is the collective ownership of the means of production led to the conclusion that it was sufficient

3 90 MARXISM TODAY, MARCH to expropriate or requisition undertakings in order already to possess bastions or, at least, focal points of socialism. The change in the ownership of enterprises required an entire period in order to change their internal organisation and the way in which they functioned, to increase the role of the workers, to establish a proper relationship among technicians, professional people and workers, and to establish a new and conscious discipline. The public sector was not an island sufficient unto itself. Ft had to learn to coexist with the private sector, to learn to dominate and not be dominated. It had to learn to function in the market, to take account of the objective laws of the market and to see that they fitted in with the strategic goals. The public sector did not succeed in becoming dominant in the economy because of a failure to incorporate in it some of the most important monopolies, such as the Bank of Chile, the Paper and Cardboard Company, the South American Steamship Company and others; because scientific methods of socialist management did not predominate in its leadership; because of insufficient mastery of the commercial apparatus and pressure from the bourgeoisie who, through bribery and other methods, distorted and manipulated the managements of enterprises. Economic Questions Reactionary ideologists maintain that a short-term economic policy based on revolutionary objectives is incompatible with the normal functioning of the economy. At the other extreme there are also those who consider that a revolutionary process inevitably brings about a sharp fall in production and paralysis or, at the very least, very serious disturbances in the whole of the economic and financial system. The incompatibility is still greater if it is intended to develop the process within the framework of democratic legality. Naturally, account must be taken of sabotage by the enemy. We remember that in September 1970 Nixon ordered the CIA to unleash chaos, to such an extent that the Chilean economy would finish up by 'screaming'. The cutting-off of foreign credits, a hostile attitude towards Chile's copper exports, and support for work stoppages engineered by the employers, etc., did in fact do serious harm to the economy. The internal enemy undertook many manoeuvres, such as paralysing investments, the slaughter and clandestine export of livestock, reduction of the sown areas, speculation, hoarding of essential consumer goods, and so on. Economic Successes In spite of the economic sabotage the years of the Popular Unity government were remarkable for the successes achieved. Neither in the ten years prior to 1970 nor, still less so, in the four years of fascist dictatorship following the coup, were the levels achieved during the Allende government reached; among the achievements were the highest output per head of the population, the highest level of employment, the highest consumption of essential goods, the greatest expansion of the health and education services, the highest proportion of contributions by the working people to the national income, and other indices. All these point to decisive successes which only a government of Popular Unity could have achieved. This was possible, above all, because the productive forces were freed from imperialist restrictions, and among those forces there was, in the first place, the human factor, the working class, the peasants, the youth, who undertook the building of the new Chile with energy and revolutionary fervour. Economic Mistakes It is certainly true that successes were not the whole story. There were also failures, and very serious ones. Productive investments dropped; in the final year there was a fall in agricultural production; there was a decline in the availability of currency. These failures can be attributed both to counter-revolutionary sabotage and to mistakes in the conduct of economic policy. But for the effect of those mistakes, the enemy's activities could have been countered successfully. Look at inflation, for instance. It took a sharp turn for the worse around the middle of 1972, although the determining factors resulted from mistakes made as early as It is clear from this that when one does not have full power, inflation that gets out of hand may have decisive consequences as regards the stability of the government. On the other hand, once inflation of that kind is taking place, it cannot be checked without extensive powers. The monetary crisis leads to a political crisis. A right-wing opportunist policy, propagated from the ministerial ranks and even from sections of the proletariat, was responsible, to a considerable extent, for the sharpening of the situation. It showed itself in the bad administration of public expenditure, in the squandering of currency reserves and in a subjective approach to the fixing of wages. The budget deficit grew to an unmanageable extent. The reserves of foreign currency were exhausted. Nationalised undertakings which should have made contributions to the budget, almost all made losses. We communists warned against the dangers of this policy, which was being defended on the grounds that it would help to 'extend the basis of support'. When the Popular Unity government started to put things right, it was already late. Mistaken tendencies were rife in the whole of the administration and in the public sector and time was needed to eliminate

4 MARXISM TODAY, MARCH, them. Furthermore, by no means all the parties of Popular Unity were convinced of the need to correct those tendencies. In the face of inflation and the monetary and financial difficulties, ideas typical of petty-bourgeois 'revolutionary' leftism prevailed. 'Money is an instrument of capitalism'; 'The market must be replaced by direct distribution'; 'Only real factors count'; 'The disorganisation of the system will hasten the conquest of full power' these were arguments which were circulating in some sections of Popular Unity and the extreme left. The experience acquired in building socialism in the USSR and in the people's democracies, the lessons of Cuba and Vietnam were simply ignored. Wishful thinking and an underestimation of the enemy's strength were rampant. A Leading Role The experience of the Popular Unity government showed the necessity for unswerving respect for the objective laws of the economy; the general laws, applicable to different historical formations, and the specific ones applying to the period in which we were living. From the very beginning of the revolutionary process it was essential to utilise the law of value, the laws governing the capitalist market. The supremacy of economic accounting, the struggle for increased output, the raising of productivity, a thrifty approach to costs, obligatory planning and unified management of the economy all these were ideas which, while we communists kept them in mind, inculcating them among the masses with a good response on their part, were not accepted as their own by all the parties of Popular Unity. They were opposed by such slogans as 'Increased output is the responsibility of the big capitalists' and 'The conquest of political power decides everything'. In practice, what they were doing was to call upon the proletariat to wash its hands of its leading role in society and to forget its class obligations towards its own government. They showed utter contempt for the leninist thesis that it was in the economy, too, that the great question of 'Who will defeat whom?' the bourgeoisie or the proletariat was being decided. The proletarian masses were very well aware of the significance and the class character of the Allende government. As is said in the report to the August plenary meeting of our central committee; "For the first time in the history of Chile the workers could freely express their views in the factories without fear of dismissal. The working people began to take part in the functioning of numerous undertakings and many of them took posts as managers and administrators of industries; they began to direct state services, to play a part on the boards of banks, and to represent the President of the Republic, the executive power, in subdelegations, departments and administrations and to occupy posts as ministers and ambassadors." The participation of the working class was decisive in the enterprises of the public sector. At certain moments the campaigns for increased output, technical improvement, higher productivity and thrift in the use of currency acquired a mass character. In the private sector vigilance committees were set up which watched over the increase of production and the observance of social and fiscal legislation and fought against the tendencies towards speculation, hoarding and cornering the market. Economism Popular Unity paid the price for an old tendency towards economism which prevailed in some sections of the proletariat. In many enterprises increases in salaries and wages were decided on the basis of a misguided inter-party rivalry, without any regard for objective standards. There were also tendencies towards egalitarianism and towards ignoring the differences between skilled and unskilled work and the contribution made by technicians and professional people. The total increase in wages and salaries in 1971 reached 50 per cent, whereas the limit laid down, which was nevertheless too high, was 35 per cent. In the first half of 1972 the increase was close on 50 per cent, while the limit laid down by the government was 22 per cent. This contributed to a serious extent towards the loss of control over the inflationary process. It was not realised that 'politically' it was impossible to carry out a redistribution of the national income in favour of the wage-workers on the scale proposed. It was not perceived that from the 'economic' standpoint, in the light of the above, a swing towards inflation must necessarily take place. It was not inevitable that a revolutionary process such as the Chilean one should let loose a spate of unrealistic demands. On every occasion when the parties of Popular Unity, acting in a united way, placed the success of the work of the revolutionary government before everything else and gave permanent interests priority over immediate ones, this received the support of the overwhelming majority of the working people. This correct political approach to the question should have been permanent and not sporadic. Use should have been made of instruments such as thrift and the creation of funds voluntarily contributed by the masses of the people in order to finance productive investments, as a way of putting the brake on excessive consumption. Out of the 32 months of Popular Unity government, only the last six saw the emergence within the mass of the working people of a minority actively

5 92 MARXISM TODAY, MARCH opposed to Popular Unity. Rather less than a third of them were attracted by the Christian Democrats to their line of frontal attack on the Allende government. The sectarianism on both sides, the mistaken tendency to see all Christian Democrats, even among the working people, as the main enemy, and the line of the reactionary Christian Democrat leadership subordinated to the strategy of the coup helped to bring about phenomena which were extremely adverse for the progress of the revolution, such as the strike supported by a section of the El Teniente miners. The Trade Unions Throughout the period during which the Popular Unity government was in power, the CUT (the Chilean TUC Ed) followed the traditional class policy of the Chilean working-class movement. In spite of inter-party conflicts and the pressure from the extreme left and from certain sections of the Christian Democrats who wanted to set the proletariat at loggerheads with the Popular Unity government, the CUT was able at one and the same time to preserve the trade union unity of the working people and to rally their resolute support for the Allende government, especially in the most difficult moments. The trade union movement came to be the backbone of the revolutionary process in Chile, a school of socialism, a source of leading personnel for the Popular Unity government. For that very reason a serious mistake was made when workers' participation in the enterprises was set up through an organisation parallel with the trade union apparatus. This, too, contributed towards rivalry between the parties, towards the spate of unrealistic demands and towards belittling the role of the trade unions. Popular Forms of Organisation The participation of the masses of the people had other forms of expression in the Chilean revo- A Statue for Charlie? Ivor Montagu "Charles Spencer Chaplin, born 1889 in South London, died 1978, early on Christmas Day." These words on a pedestal. A charming idea. Something to look up to, like Nelson in Trafalgar Square, or to whizz round with the traffic, like Eros in Piccadilly, or maybe, in some quiet park glade, for lovers to tryst by, and, as in his earliest films, for policemen to lurk about in order to disturb them. Or is he, perhaps, too controversial a subject? lutionary process. In solving housing problems through the communal housing committees, for instance. The Neighbours' Councils and the Local Committees played a big part in coping with the problems of the local communities. Voluntary youth work developed throughout the entire country and took on the most varied forms. The struggle against speculation, for the control of prices and for the distribution of supplies drew in tens of thousands of workers, housewives, young people, small businessmen and peasants, through the Councils for Supplies and Prices basic organisations of the people and the Directorate of Industry and Commerce. Through the signing of production agreements, the working people and their trade unions took into their hands the concrete problems of the enterprises. In 1973 great advances were made in drawing up, from the base, the production plan for the following year. Conclusions The Chilean Revolution of confirmed the possibility of initiating the revolutionary transformation of the country's economy for the benefit of the people and national progress through equally revolutionary political action: the coming to power of the working class and of its political parties. We communists made our contribution to this process and shared in its victories and its defeats. There are four definite factors required for the success of such a vast historical undertaking: holding on resolutely to the positions of power that have been attained; the development, on the greatest possible scale, of the participation of the masses in every one of the tasks of government; a policy of alliances which scrupulously respects the undertakings entered into, and strict observance of the objective laws of revolutionary science deduced by marxism-leninism on the basis of the hard struggle waged by the peoples. How represent him? Odd to memorialise stationary a being whose graceful, balletic movements were so much an essence of his early fame. As Gilbert Seldes, first of the highbrows to notice him, wrote: "He danced on the earth, an eternal figure of lightness and of the wisdom which knows that the earth was made to dance on." 1 1 G. Seldes: The Seven Lively Arts (Harper & Brothers)