Chilean Politics, “Neoliberalismo”, Once-And-Future President Michelle Bachelet, “Seeing Like a State”, the Really-Existing Socialist and Neoliberal Projects of the Twentieth Century, and the Electoral Victory of Her New Majority Coalition: The Honest Broker for the Week of November 24, 2013

[Attention Conservation Notice: Harley Shaiken at the Berkeley Center for Latin American Studies asked me if I could write a short comment on a piece he was running by Javier Couso about Chilean politics, “neoliberalismo”, once-and-future President Michelle Bachelet, and the electoral victory of her New Majority Coalition–Couso being one of the co-authors of the currently highly influential El Otro Modelo: Del Orden Neoliberal al Regimen de lo Publico. The piece got out of control, and is not a success…

But if you are interested in my not-very-well-connected thoughts on Chilean politics, “neoliberalismo”, once-and-future President Michelle Bachelet, Seeing Like a *State the really-existing socialist and neoliberal projects of the twentieth century, and the electoral victory of her New Majority Coalition, they are below the fold…

Let me, first of all, apologize. I am not happy with this piece. It is not fair to Javier Couso. It is not fair to the readers. But Harley Shaiken tells me that I am out of time, and that he is sure that this is not–as I more than half want to–best buried in the desk drawer. So I offer it up…

Let me, in a somewhat long-winded way and in an enormously unbalanced way, make three points:

1. By my reading, at least, the current political moment in Chile is not as open to societal transformation as Professor Couso believes. Rather, it seems to me, it is a moment for piecemeal step-by-step reforms coupled with public education and debate.

2. As I see it, at least, and as a card-carrying neoliberal the way that word is used in North America, “neoliberalism” as the word is used on Latin America consists of five interwoven strands. Four of them are indeed, as Professor Couso argues, noxious. But the fifth contains very valuable insights that all who hope for a better world than this one need to grab–especially those whose instinct is to use levers of governmental power first and last as tools of reform and transformation.

3. Some of what the New Majority Coalition should do is, I think, straightforward and obvious. But some is not. As JMK wrote 90 years ago, we are right now in somewhat of a pickle. We are not that much better positioned than he was to understand…

As of this writing, the Chilean New Majority Coalition of Michelle Bachelet appears to have 51% of the seats in the Senate and 48% of the seats in the Chamber of Deputies, while she herself looks poised to win an easy victory in the Presidential-ballot runoff. 44% of the Chilean electorate of 13.5 million went to the polls.

The Chilean electoral system has one unusual feature–a feature introduced by the Pinochet dictatorship in order to entrench its power even after its overthrow, and thus a feature that must be regarded with profound suspicion. Each electoral district sends two deputies to the Chamber of Deputies. If a coalition receives 1/3 of the vote, it gets to send a deputy. Thus only if a district’s voters vote more than 2/3 for one coalition will both of the district’s deputies represent that coalition–otherwise the two deputies will be split.

This feature has the effect of reducing the gearing toward the majority party produced by standard single-representative district systems. Roughly, in a single-representative district system, a coalition that gets 50% of the vote gets 50% of the representatives; one that gets 55% of the vote gets 68% of the representatives; one that gets 60% of the vote gets 77% of the representatives; and one that gets 65% of the vote gets 86% of the representatives. Under the Chilean system, percentages of deputies are much closer to percentages of nationwide votes for the major coalitions, while small parties get next to no deputies at all. A single-district system amplifies the electoral majority of a winning coalition while giving next to no deputies to small parties. A proportional-representation system does not amplify in the legislature the majority of a winning coalition, and it gives a strong voice to minor parties. The Chilean system (a) deprives small parties of a legislative voice while (b) keeping the majority of a winning coalition unamplified in the legislature.

If we lived in the Republic of Plato, in Platonis Πολιτεια, we could discourse about whether such a system might be an improvement over both of the alternatives of proportional representation and single member-district representation. Proportional representation has the flaw the representatives are too beholden to the party that put them on the list, and the flaw that it favors candidates who want to posture and grandstand and make their core supporters feel good as a result of their rhetoric rather than do the business of the public. Single-representative districts have the flaws that small minorities no legislative voice and large minorities find their electoral defeat amplified; thus neither feels it has an influence on policy proportional to its share of the voters. For this reason, single-district representative systems usually incorporate supermajority provisions of one form or another: firebreaks to guard minority rights and privileges against intrusion by electoral majorities that do not amount to a rough societal consensus.

But, as Marcus Tullius Cicero put it, we do not live in Platonis Πολιτεια but rather in Romuli faece: we do not live in the Republic of Plato; we live amidst the shit of Romulus.

The current Chilean constitution combines the single-representative district legislative silencing of small majorities with the proportional-representation non-amplification of the strength of winning coalitions, and adds on the supermajority requirements that in single-representative district reduce the power of amplified majorities. The Chilean system is thus designed to entrench the power of a large, powerful minority both against the power of an electoral majority that seeks to pass laws and against the criticism of a small minority that seeks a platform

That, in Chile today, this right-wing large, powerful minority are the heirs and beneficiaries of the brutal, murderous, illegitimate Pinochet regime is a fact that undermines the legitimacy of any attempt to play constitutional hardball to block reforms. I reflect upon the fact that had I lived under Pinochet I would either have had to curb my tongue greatly or wind up herded into a soccer stadium and shot had I lived in Chile under Pinochet. I reflect on that. I reflect that last weekend I shared a meal with a Jesuit I know, and we recalled how we had also been eating together when the news arrived of the martyrdom in El Salvador of Julia Elba Ramos, of her sixteen year-old daughter Celina Ramos, and of the six Jesuits Ignacio Ellacuría, Segundo Montes, Ignacio Martín-Baró, Juan Ramón Moreno, Armando López, and Joaquín López y López. And I read this morning of the destruction of the offices in San Salvador of the Asociación Pro-Búsqueda–another ongoing step in what looks to be a coordinated trans-national campaign to destroy the historical memory of what was done in Latin America’s many dirty internal wars. No witnesses, you understand.

I thus find myself with remarkably little sympathy for Sebastian Pinera’s and Evylyn Matthei’s hopes to use constitutional processes to slow down and block reforms sought by Michelle Bachelet’s New Majority Coalition.

That said: only 44% of the 13.5 million eligible voters went to the polls. Only 47% of them voted for Michelle Bachelet in the first round. That amounts to 21% of the electorate. The rest are either opposed to Bachelet and the New Majority Coalition, or do not greatly care, because they think it either does not matter or does not go far enough or are happy enough with things as they are that they simply do not see politics as something they need to make their business. It is, I believe, illegitimate for the right to use constitutional processes to block reforms–especially democratization reforms. But, I also believe, the New Majority Coalition’s majorities are majorities for needed, desirable, and piecemeal reforms, not majorities for major structural transformation: that would have needed something like 60% of the first-round vote in an election with 75% of eligible voters at the polls.

And now I have arrived at my first destination: to dissent from Jerome Couso’s framing of the Chilean situation as one of broad and deep societal near-consensus for “a vast array of social, economic, and political transformations” on a scale not seen “since the demonstrations leading to the electoral defeat of the military dictator, Augusto Pinochet, in 1988”. Pinochet’s tame constitution, tame organizations, and tame media made him very confident of victory in 1988: yet 98% of registered voters turned out to vote, and only 42% of them approved of Augusto Pinochet. That was a majority for transformation. This, it seems to me, is not. What Jerome Couso wants to see happen in Chile would, I think, be broadly to the good. But the argument necessary to get the population behind the program strongly enough for us to be talking about transformations of society rather than reforms of government has not, or not yet, been accomplished.

Now let me move on to my second point. As I see it, at least, and as a card-carrying neoliberal the way that word is used in North America I speak with some authority, “neoliberalism” as the word is used on Latin America consists of five interwoven strands. Four of them are indeed, as Professor Couso argues, noxious. But the fifth contains very valuable insights that all who hope for a better world than this one need to grab–especially those whose instinct is to use levers of governmental power first and last as tools of reform and transformation. The five strands are:

1. The belief that property – however acquired, and however held, and however dysfunctional is the politics the attempts to hold onto it generates— is morally prior to democracy.
2. The belief that violence in defense of property is always justified, up to and beyond the destruction of democracy, for democracies like social Democrats, and social Democrats are Marxists, and Marxists are Stalinists, so civilization is always under the imminent threat that the voters might make a single wrong and then irrevocable choice.
3. Over and above the fear that Stalin and the Road to Serfdom inevitably lurk just beyond the 10 hour day, that the aristocracy and the bourgeoisie are worthy of defense as bearers of a higher form of civilization then the lower middle-class, the working class, and the lumpenproletariat.
4. That regulation of the market beyond the defense of property and the enforcement of contract is always wrong because politics is never more then the theft of wealth from the deserving by undeserving successful rent-seekers and the “New Class” ideologues who find it so easy to dupe the voters.
5. A recognition if the distribution of wealth is not too awry, that if property and contract rights hold well, that if markets are potentially competitive and thick enough, and if externalities are minimal or are compensated for through taxes and bounties, then The market provides extraordinarily powerful and unequalled social calculating, coordinating, and distribution mechanism for managing our immensely complicated social division of labor.

And now, of course, I want to talk not about (1)-(4), where I believ that Prof. Couso is right, but about (5), which I think he does not sufficiently appreciate the force of. Professor Couso’s criticisms of the neoliberal prioritization of violence in defense of property over democracy, of the “Road to Serfdom thesis”, of the superior civilizational level of the rich, and of the claim that a parasitic “New Class” of ci-devant apparatchiks has a lock on democratic politics are all critiques that I broadly agree with. But there is more here–the fifth point, which I regard as the rational kernel inside the mystical shell that is Mont Pelerin.

Josiah Ober’s studies of the extraordinary dynamism of democracy in classical Greece Focus on its ability to provoke ideas, and then to select the best and most convincing of them no matter where in the citizen body they originated. This was, in Greece in the sixth-century B.C., an extraordinarily productive and fruitful innovation in politics. Rule by the People was thus opposed to a system in which the king commands–and only those ideas that emanate from the king or from those who whisper in his ear are given status, for obedience is prior to intelligence in government. Rule by the People was thus opposed to oligarchies in which having your ideas adopted is one of the signs of dominance of lineage that allows the aristocrats perpetuate their wealth. Democracy is rather, in its essentials, a way of making all of us as smart as the momentarily smartest of us. Rather than limiting our collective intelligence to the single intelligence of the head of government, or of the most persuasive or devious voice on the Small Council, we exercise our imaginations widely and wildly and then use our reason to select the course of action that seems best to us.

But when it comes to the economy, we do not simply want to make one collective decision. We cannot make one collective decision. We have to make millions of individual decisions. We have to, somehow, fit our collective division of labor together. Democracy assembles various perspectives and then–when it works–makes the best central decision. But in the economy we want to push decision-making away from the center, for the center can only enforce its decisions through some thumb-fingered bureaucracy, and we want those who make the decision to feel the situation in their fingertips. In the economy we want as much as possible to push the making of decisions out to the periphery–where the direct knowledge is, and where the direct impact of individual decisions are felt. And this is what markets are good for.

James Scott, in his book Seeing Like a State, writes of the plague of “high modernism”: the belief that society can be a work of art designed by a single statesman-artist, and then implemented by the actions of millions of ant-like drones obeying a central plan. He runs through the history of German foresters in the eighteenth-century Enlightenment, believing that nature could be commanded like a battalion. He runs through the decision to build Brasilia, through the government of Tanzania’s decision that everybody must be forced to live in villages. Josef Stalin. Fidel Castro’s belief that he is the best man in Cuba to direct–well, to direct virtually everything, from military tactics in Angola through urban renewal to recipes to beer distribution. From Jacobo Timmerman’s (1990) “A Summer in the Revolution: 1987”, in the New Yorker:

When I read one of Gabriel Carcia Marquez’s essays on the Commandante [Fidel Castro], I was remind of paeans to Stalin–of the whole state of mind described by Arthur Koestler in *Darkness at Noon*. Garcia Marquez praises Fidel Castro for needing only six hours of sleep after a day’s hard work–the same six hours that were often presented as proof of Josef Stalin’s vitality, extolled in writings that also described his Kremlin window lit until the small hours of the night–and praises the wisdom of the Commandante in stating that “learning to rest is as important as learning to work”.

If the cumulative tasks in Fidel Castro’s workday as it is describe by Garcia Marquez are counted up, the Castro who emerges is a prodigy–someone who triumphs by supernatural intelligence:

His rarest virtue is the ability to foresee the evolution of an event to its farthest-reaching consequence

and:

He has breakfast with no less than two hundred pages of news from the entire world

(a long breakfast, surely), and:

He has to read fifty-odd documents [daily].

And the list goes on:

No one can explain how he has the time or what method he employs to read so much and so fast…. A physician friend of his, out of courtesy, sent him his newly-published orthopedic treatise, without expecting him, of course, to read it, but one week later he received a letter from Castro with a long list of observations….

There is a vast bureaucratic incompetence affection almost every realm of daily life, especially domestic happiness, which has forced Fidel Castro himself, almost thirty years after victory, to involve himself personally in such extraordinary matters as how bread is made and the distribution of beer….

He has crated a foreign policy of world-power dimensions.

Fidel Castro, then, has a secret method, unknown to the rest of mankind, for reading quickly, and he knows a lot about orthopedics, and yet thirty years after the Revolution he has not managed to organize a system for baking bread and distributing beer…

This does not work. Or, if it does work, it not work well. Whatever experimentation or adaptation or variation or implementation becomes tricky, the central plan breaks down. There is only one big question remaining: Do those at the periphery who have to deal with the breaking-down of the plan have to hide what they are doing from the center, and pretend that in fact all of the targets of the ninth three-year plan are being overfulfilled and the chocolate ration can be raised again? Or do you have a social and economic system that recognizes individual variation under circumstances, and rewards those who most successfully pursue what needs to be done locally with their fingertip-feel for the situation? You can call this “James Scott”. You can call it “Friedrich von Hayek”. You can even call it “Adam Smith” or “Bernard de Mandeville”: it is at bottom the same. It is this strand of neoliberalism–that by relatively minor amounts of work at the center to appropriately craft individual incentives at the periphery, we can harness the intelligence and ingenuity of millions to perform and accomplish public purposes–if by so doing they can also pursue their own private benefit–and to accomplish public purposes much better then even the smartest small group of dedicated cadres at the center issuing commands could ever accomplish.

Market means to social democratic ends.

Properly regulated and properly structured, there are wide areas of economic life in which a market economy is the regime of the public sphere in its best form. It is, or rather it can be, a better implementation of the regime of the public sphere then any mass movement choosing a maximum leader or a set of wise ministers.

That is the fear I have when I read Javier Couso. I fear that he underweights the possibility that the best road to the regime of the public sphere often involves using market means for social democratic ends. I fear he overweights the likelihood that market means will, instead, be used for oligarchical ends, have been used up to justify violence not in defense of civil justice but of maximum inequality. And, indeed, because so often in Latin America market means have been used for oligarchical ends and market ideologies have been so often used to justify violence in defense of maximum inequality makes it understandably difficult for those in Latin America to the left of center to see when they would be better served by pulling this fifth strand out of the Gordian knot of Latin American-style neoliberalism, and trying to make use of.

Now, third, how does all this apply to the task of the New Majority in Chile today–if it does?

I think of Chile today as a country roughly halfway between Mexico and Portugal in terms of economic development, a country with four major problems:

• Maldistribution of wealth
• Maldistribution of education
• Tremendous vulnerability to the world economy’s commodity cycles
• Its political past…

The political past of Chile remains something that can only be mastered across the generations. The tremendous vulnerability of Chile to the world’s commodity cycles is now being handled about as well as it can be handled–only Norway, I think, has anything to teach Chile. The key is to make sure this wealth is held in trust for the long-run well-being of society, and that its existence is not allowed to warp the economy into a destructive path. It is the maldistribution of wealth and the maldistribution of education that are the proper tasks of the New Majority. And here there are two and only two historical-comparative lessons:

• Hitherto, no country has managed to overinvest in primary and secondary education–but higher education is a very complicated case.
• There is no reason to think that more progressive tax systems impose any sort of growth penalty on modern industrial economies–those who have looked for such an effect in cross-country and cross-era comparisons have uniformly failed to find it.

And recall that back in 1946 the economic future of Italy, of France, of Spain and Portugal, of Germany–even of Belgium and Holland–looked very depressing indeed. The years from 1913-1946 had seen catastrophic wars, class conflict, deep depressions, near-hyperinflation, devaluation, implicit government repudiation of debts, the emergence of larger and larger gaps between national standards of living and the world’s best practices, and a political system incapable of producing equitable growth but only of waves of redistribution backed by violence and threats of violence. And yet 1946-1973 saw thirty glorious years that made continental western Europe the relatively prosperous set of social democracies that it has been since–countries that still have problems, but different problems, and problems that are an order of magnitude less serious than the problems of poverty, growth, and inequality that still beset Chile.

There is no reason why Chile’s thirty glorious years cannot be fifty such, cannot have started twenty years ago, and cannot end as well.

And let me conclude with an apology: the three points are supposed to be presented at equal length: 600 words of each. But because this piece has become at least as much a wrestle with my own intellectual history and commitments as with the work of Javier Couso and his coauthors, I have lost my balance–1100 words in part 1, 1500 in part 2, and only 400 in part 3–and produced a piece that, I fear, is more valuable to me and me alone as a clarification-of-my-thought exercise than it is useful either to Professor Couso or to the readers of this periodical.

I wish I could have done better…

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