By Alejandro A. Tagliavini *
The “conservative right”, to typify it in some way, is slowing the potential growth of their countries and leading to chaos of which take advantage of leftist groups, generally violent. The problem is that they don’t understand that social problems are solved with more freedom, never with repression and less of all incoherently arguing that repressession -of freedom- is meant to “defend freedom.”
As expected, defeated by reality, conservatives mimics those they believe are his victors, the left, taking measures contrary to individual freedom as if it was not a personal good, a human right.
In 1975, GDP per capita in Chile was lower than that of Mexico, Argentina and Peru but today exceeds them reaching US $ 15,130. In 2010, it had a GDP of US $ 218,313 million, in 2018 it was already US $ 299,887 but in 2019 the growth slowed down and would only reach US $ 305,556 million.
Poverty fell to 8.6%, and real wages increased. All thanks to the fact that the market was liberalized, that is, they were returning to the citizens their freedom to create and produce. But not enough.
Due to regulations that prevent the free and natural distribution of income, Chile has high inequality: 10% of the population earns 7.8 times more than the remaining 90%. These regulations include monopolies and oligopolies that benefit entrepreneurs by enriching them at the expense of the rest.
For instance, the private pension system has been enormously successful in the formation of productive capital, but it is mandatory. That is, entrepreneurs have an oligopoly – captive contributors – and so earn exaggerated profits, while most retire with salaries of less than US $ 400. Workers should be free not to contribute and direct their savings to more profitable investments.
And came Piñera. He had bad luck and, not understanding freedom, did not find the right way out. Among the Chilean mistakes is the failure to privatize and deregulate the company that exploits the largest resource in Chile, copper, because it is the golden hen of the military.
Thus, the government budget depends on its copper exports. But now, to the typical corruption and inefficiency of any state-owned company that does not respond to market efficiency but to political interests, there is a slow on copper prices making it difficult for the government to balance its books.
And Piñera wouldn’t know how to avoid the increase in fiscal pressure on the market, the citizens. According to “Libertad y Desarrollo”, since 2007 taxes averaged 18.31% of GDP, but in 2018 they rose to 19.6%. And Chile’s growth slowed to 2.5% or less expected in 2019 against the average 3.3% since 2010. The unemployment rate rose to 8.3% in September, above the average of the last 10 years of 7, 7%
In Chile some spend 30% of their salary to travel to work. When the previous socialist government increased the price of the metro ticket by 10%, there were no incidents, but now Piñera wanted to raise it 3.75% and some students went out to protest.
The repression was brutal and the people felt outrage including some offical voters already angry because of the economic downturn of the country. And they went out in droves, overflowing the police, leading to looting and very violent actions. In Argentina, for example, being the situation a lot worse, this violent reaction has not occurred because the repression has not been so strong.
* Member of the Advisory Board of the Center on Global Prosperity, of Oakland, California