The Chilean October: neoliberalism was born and will die in Chile?

The chilean protests in October 2019 highlighted the tensions between neoliberalism and democracy. How will Chile and Latin America move forward from these protests? Español

Alexis Cortés
23 January 2020, 12.01am
Demonstrators face the police and military in the city of Santiago, Chile, on 19 October 2019
Pablo Rojas Madariaga/NurPhoto/PA Images. All rights reserved.
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What happened on the 18th of October, 2019? It is probably still too early to draw a definitive characterization of what really began that day, but one thing seems clear: the social and political life of Chile was forever changed that day. On October 18th, the largest, most intense, and most extensive mobilizations exploded in that country.

Perhaps a metaphor that best accounts for the Chilean October would be a volcanic eruption: magmatic forces that are not observable to the naked eye until their pressure becomes unsustainable, emerging to the surface in an overwhelming and highly destructive manner. However, volcanic eruptions possess at the same time an enormous modeling and creative capacity, reconfiguring the political landscapes around them, and their sediment, once stabilized, fertilizes areas that grow new scenarios.

On October 18th, an explosion was born, an uncontainable force that was shocking in its intensity and size, but the forces that prompted this eruption always existed, lurking underground. In fact, several explanations have been given for its origin: inequality, abuse, a lack of democracy and of rights. A spray-painted slogan near the now-renamed Dignity Plaza suggested: “Neoliberalism was born and will die in Chile.”

How could a mobilization that began with an increase of the metro fare by 30 pesos be the origin of a questioning of the economic model that transformed Chile into its principal laboratory? “It’s not 30 pesos, it’s 30 years,” the protesters have responded, that is to say, the rise in the cost of public transportation allowed for the emergence of a discontent that had been stewing for decades. “30 years” is a reference to the post-dictatorship period (1989-2019) and the inter-elite arrangement that gave stability to the country.

But, this stability was an exchange for the substantive maintenance of the economic model and the political institutions that protected it, the main expression of this system being the political constitution of 1980, promulgated during the dictatorship. By no means was the rise in the metro fare inconsiderable. When examined in cumulative terms, successive increases in the fare had transformed the Santiago metro and public transport in general into one of the most expensive in the region, accounting for a significant part of the monthly expenditures of Chilean workers.

The Chilean Model

The economic model inherited from the dictatorship, although moderated in some respects during the center-left governments of the Concertación, for example, via public policies that focused on reducing poverty, was presented over the last few years as the only possible way of development.

In recent years, economic inequality has begun to decline, but society experiences inequality in other ways: in treatment, in the existence of privileges (economic, political, and legal), and in abuse

The consolidation of neoliberalism in the world has been a key piece in the loss of decision-making capacity of national states, but above all, governments, to define their economic systems autonomously and maintain their sovereignty. In contrast, international organizations (the IMF, the IADB, the Central Bank of Europe) and transnational businesses have gained in decision-making capacity.

The previously mentioned phenomenon has introduced a fundamental contradiction all over the world, between neoliberalism and democracy. Democracy has been limited, to the extent that there is a crucial area of collective life, the economy, which would be excluded from the decision-making capacity of citizens. But not only that, especially in the Chilean case, neoliberalism was presented not only as inevitable, but also as desirable.

The free market economy would not only be the natural result of social forces, or, according to this logic, the market, but it was the best possible option to maximize the social well-being of the population, according to its proponents. Chile, as a laboratory for neoliberalism and denominated as a successful example of the combination of a market economy and democracy, was promoted as a role model for the region and other emerging countries.

Without a doubt, if life under the dictatorship is taken as the parameter, material wellbeing since the return to democracy has increased. However, what has sustained economic growth has been Chile’s dependence on the exploitation and export of raw materials, notably copper. The productive matrix has undergone a process of economic repression since the implementation of neoliberal policies, initiated by the deindustrialization promoted by the dictatorship and which remained unaltered with successive democratic governments.

Moreover, the de-Chilenization of the exploitation of raw materials with extremely favorable conditions for transnational companies, involving minimal royalties and permissive laws, has transformed vast expanses of the country’s territory into sacrificial areas, producing an enormous drain of resources to the outside, without expanding jobs and, paradoxically, impoverishing areas rich in natural resources (the Atacama and the Araucanía regions are important examples in this regard).

Another part of the model’s foundation is the financialization of the economy. Speculation moves world markets. In the Chilean case, the social security savings of the Pension Fund Administrators (Administradoras de Fondos de Pensión, or AFPs, its Spanish acronym) have been one of the main sources for sustaining Chilean business insertion into speculative logic, privatizing profits (for companies) and socializing losses (for workers). Not by chance, one of the main demands of the mobilizations has been the demand for a new social security system.

Many young people, while explaining their presence at the marches, claim that they are there for their grandparents. As time has passed, the mobilizations have become increasingly younger, but they maintain a high degree of intergenerational solidarity in their motivation.

In Chile, 1 in 3 Chileans is a slow to pay off debt, and most (40%) have retail debts l (food, clothing and medicines).

This model has brought good macroeconomic results, on the one hand, in the areas of trade balances, per capita income, and in the country’s image; however, it has led to a vast deepening of economic inequality on the other. Rather than producing wealth, the model has produced rich people. Chilean GDP is concentrated in a few families, while half of the population lives on a little more than the minimum monthly salary. It is true that, in recent years, economic inequality has begun to decline, but society experiences inequality in other ways: in treatment, in the existence of privileges (economic, political, and legal), and in abuse (PNUD, 2017).

Chile’s Awakening

What changed and made inequality an intolerable reality that must be changed urgently, today? Chilean inequality was disguised in two ways. First, it tried to portray itself as earned or deserved inequality. Meritocratic discourse has been the main ideological mechanism for this, that is, that improvements in our social positions or in our wellbeing are proportional to the effort invested in them.

The simple formula is: “You’re poor, because you haven’t tried hard enough.” Chileans have historically relied on education as the primary mechanism for social mobility, or, in other words, as the main generator of inequality that is perceived to be fair and just. However, the cycles of mobilization initiated by the secondary (2006) and university student movements (2011) dealt a devastating blow to the discourse of merit, not because they denied that it exists, but because they showed that the process of commodification of education had transformed it into a powerful player and amplifier of social inequality.

Those who could afford it, obtained a better education and, with that better education, a better social position. Those who could not afford a better education were unable to obtain a better social position. In other words, it was not enough to (borrow money to) study, because at the end of the process what ended up taking precedence was not the effort put into it, but rather, issues linked to origin: whether one was born into a family with economic resources or not. Similarly, the promise of massification of higher education to permit social mobility was a scam. “Investing” in education by becoming indebted did not necessarily improve the student’s situation.

The university student not only mortgaged his financial future, but also what awaited him once his studies were completed were precarious and underpaid jobs. Not to mention the expectations about retirement, which, over time, have become threatening to all Chileans; in Chile, retirement is an almost-certain passport to poverty[i]. In this entire process, the bank and an important number of private educational “businesses” (high schools, university preparation institutes, universities, technical formation centers), capitalized on huge profits, all backed by the State.

Borrowing and indebtedness has also functioned to delay the conflict that economic inequality causes. Antonio Gramsci pointed out, concerning Fordism, that in the United States companies like Ford were producing hegemony directly from the factory. Workers could gain access to their own car and to good wages, promoting an identification with capitalism without to the need for intermediaries, that is, ideologues, to convince the workers that their situation is the best situation possible.

In the Chilean case, borrowing, and more specifically, the credit card, was a direct producer of hegemony, because Chileans could access material wellbeing in comfortable monthly installments, despite their precarious economic situations. Nevertheless, the generalization of indebtedness among Chilean families collapsed.

The cards helped to disguise low wages, but the financial juggling families had to do just to reach the end of the month began to take its toll. Families used credit cards to cover even basic needs, such as food and medicines, and renegotiating with financial institutions became an increasingly abusive process. In Chile, 1 in 3 Chileans is a slow to pay off debt, and most (40%) have retail debts l (food, clothing and medicines).

The Unequal Democracy

Moreover, economic inequality has an enormous capacity to transform into political inequality, eroding democratic institutions that see themselves as egalitarian. As has been the case in democracies such as the United States, the economic gaps produced by neoliberalism soon express themselves in the political arena (Bartels, 2008). The “super rich” are the principal economic supporters of electoral campaigns, and in turn, elected politicians tend to be more receptive to the interests of their financiers.

Under this dynamic, the political system, rather than being a space to reverse economic inequality, is transformed into an extension of the same to promote laws that favor the richest. In the Chilean case, the relatively recent illegal policy financing scandals configured what, in many cases, can be called “direct democracy of capital.” Deputies and senators, guided by the companies’ advisers, legislate in favor of those particular interests and not for the common good.

The derisory penalties received by the businesspeople and politicians involved consecrated a sense of impunity that has contributed to make citizens’ criticism of both groups more severe. The fact that Sebastian Piñera is the President of the Republic has made it possible to concentrate that rejection on a single person, meanwhile, his own personal career sums up the direct power that capital can exercise on a weakened democracy: convicted of tax evasion, insider trading and bank embezzlement, Piñera was, nevertheless, elected to the presidency twice.

The eruption of Chile in October will continue to shape new landscapes

Chilean democracy has protected and nurtured the widespread abuse caused by an economic model that has commercialized all of the aspects of social life. There is no need that has not been transformed into a big business. This is why the first cry of the mobilizations has been “no more abuse,” what the protesters demand is “dignity.” Chileans feel abused, offended, and outraged.

These feelings did not suddenly appear on October 18th, they existed long before this year. What happened that day was that those feelings were enhanced by their willingness to mobilize. The mobilizations were definitely a surprise to everyone, but what was more of a surprise was that they hadn’t happened earlier.

Accelerated Politicization

The organization of metro fare evasions by high school students stoked the transformation from outrage to mobilization. Initially, the massive fare evasions inspired sympathy among subway users, because the fare hike was seen as abusive. The students were able to do what we all should have done: protest. As has been the pattern throughout these mobilizations, the government chose to respond to this scenario with repression, affecting both fare evaders and normal, paying users, which generated even higher degrees of identification with the students.

Finally, when on October 18th, the metro was closed and surface transport suspended operations during peak rush hour on a Friday, this created the perfect cocktail for the explosion. Workers who had to start long walks to return to their homes spontaneously began to swell the barricades on every corner of the city.

It was the last straw: the demonstrations of discontent had been radicalized, and the next day’s protest had already been nationalized, spreading from the capital to the country at large.

Everything was put into question, nothing seemed impossible to change. The mobilization operated as a powerful denaturant of the entire political and economic model. What was tolerated up until yesterday, albeit reluctantly, was openly questioned from that moment on. The mobilization became transversal, there was no part of the country that was not feeling part of this “explosion.” Rapidly, the economic demand to freeze the fare hike became a highly politicized struggle, with criticism of the existing constitution being the greatest part of this step.

What up until yesterday had been identified as an individual or personal problem, indebtedness or abuse, began to be understood by Chileans as collective problems, as public questions: pensions, salaries, health, and basic services.

Moments of historical density, such as the one that began on October 18th, incubate radical transformations in the paths of those who participate in them (Bringel and Pleyers, 2015). One of the most visible transformations is the process of accelerated politicization. It should be noted that these new forms of politicization are not always expressed within the normal parameters of traditional politics, particularly via participation in political parties or electoral behavior.

What is seen are the politicization of everyday conversations, counter-cultural demonstrations that re-weave lost ties, organizations’ empty spaces that are re-empowered (unions, professional associations, sports clubs, or neighborhood associations), or new platforms of articulation that emerge (local chapters, territorial assemblies, etc.). The neighborhoods, the workplaces, the public spaces? They will never be the same again. Not only do we now know each other, but we have also seen that our rage, frustration, and hopes are shared collectively.

These profound political transformations may have been delayed in expressing themselves, in a forceful manner, in political-electoral terms, but at some point they will be synchronized. In the meantime, an enormous challenge of establishing bridges that connect institutional policy with these new politics remains a huge challenge.

The lag of the previous phase has helped fuel alarmist discourse by public actors about the danger this movement poses to democracy: the President of the Republic said about the mobilization that "we are at war with a powerful enemy." However, although generally, the movement expresses a critique of how democracy has developed in Chile and has further exposed the deep crisis of the political system, the mobilizations seem to have enormous democratizing potential. First of all, because they portray conflict as a fundamental element in collective life and second, because they have allowed the sovereign, in this case, the people mobilized, to recognize their transformative power.

Chilean democracy, limited by inherited authoritarian enclaves, has privileged stability over conflict, also giving a decisive veto power to business elites. A few days before the social outbreak, a main business organization published a document questioning bills that would put economic growth at risk (environmental, reduced working hours, pension reform, etc.). Thus, any aspirations for transformation or reform of the pillars of the model that has plagued Chileans are characterized as threats to economic growth and, therefore, to democracy.

As a result, the political system has become increasingly insensitive to the demands for change expressed by the public, despite the fact that the modification of the binomial electoral system during Michelle Bachelet’s second administration has allowed Congress to become more representative of the country’s political diversity.

Many analysts wondered why Chileans expressed themselves so radically, through mobilizations that incorporated a high degree of violence into their repertoires of collective action. What could be expected if attempts to reform the system in large part have been torpedoed, time and time again? The Nueva Mayoría (New Majority) government, a center-left coalition that brought Bachelet to power a second time, represented an attempt to channel criticism that emerged from the 2011 mobilizations, but most of its transformative agenda failed, in part due to the internal boycott of parties such as the Christian Democratic party, but above all due to the business veto and the padlock of the Constitutional Court, which has rendered parliamentary majorities useless.

Even if Congress succeeds in passing transformative laws, the Constitutional Court will work against them for the most part by declaring the laws unconstitutional. This is why the demand for a new constitution gained so much force, not because it would be the solution to all of the existing problems, but because the current constitution is virtually impossible to change, no matter how much support there is for change. Radical criticism of the political system will hamper the construction of projects that aspire to express the yearning for change.

The principal renovating force in Chilean politics, the Frente Amplio (a coalition of leftist parties in Congress), has behaved erratically at this juncture, and the coalition has experienced a deep crisis due to some of its most radical members accusing it of reproducing the elitist logics of traditional politics. Although there are left-wing parties that will surely capitalize on the “explosion,” all of them have been overtaken by the force of the street. Building bridges between “the mobilized” and the parties will not be easy, but the reluctance of the mobilizers is not a reluctance towards politics in general.

In this vein, unlike other recent incidents of mobilization, such as those that occurred in Brazil in June 2013, where the demonstrations were capitalized on by an extremely reactionary right wing, which was preceded by the violent expulsion of the left (as well as their symbols) from the streets; in Chile, for now, the movement has tended towards progressive patterns. The symbols in the streets are historically identified with the left: the Mapuche flag, the LGBTQIA+ flags, representations of leftist icons such as: the gay writer Pedro Lemebel, the fallen Communist leader Gladys Marín, the singer Víctor Jara (assassinated during the dictatorship), and the artist Violetta Parra.

The Mesa de Unidad Social (Social Unity Table), which has grouped the organized world, from the trade union movement, to the student movement, to the urban poor, to the feminist group Coordinadora feminista 8 marzo has been a highly meritorious experience, given the fragmentation and differences that had prevailed so far among the organized sectors. However, although Social Unity has not sought to assume leadership of this movement, the invisibilization of this organically formed organization by the government and the press has been a way of weakening the mobilizations, because a movement that cannot be an interlocutor is a movement without demands that can be satisfied.

Moreover, at this stage it seems clear that the social movement that started on the 18th of October has two expressions that they use in dialogue: the inorganic side, with a high capacity for gathering people and reinvention, without visible faces or organizational structures; and the organic side, represented by Social Unity, with a high degree of discursive articulation and with clear demands.

This is another difference from Brazil in 2013, in the Chilean mobilizations there is congruence and complementarity between the street and the world of organizations, however, in certain circumstances there may also be tensions. In Brazil in 2013, trade unions and student organizations were displaced, arguably even expelled, by conservative sectors. The two work production stoppages organized by the Bloque Sindical de la Unidad Social (Trade Union Bloc of Social Unity) during the mobilizations are the best expression of this strength: the protesters massively supported the strikes and marched side by side of the trade unionists.

On the other hand, the potential of those who today are inorganically mobilized to found new forms of activism and to enhance existing organizations must not be disparaged. It may take more or less effort, but the politicization of the paths that caused the outbreak, the new solidarity created, will at some point translate politically by renewing or recreating the current landscape.


In conclusion, we can say that the mobilizations that began in October have brought to light the deep tension in the country between the neoliberal economic model and democracy. It is not entirely clear what the way out of the current crisis will be, but it seems clear that the contradictions that have provoked the present moment will not be resolved within neoliberalism or within the narrow bounds of our current democracy.

The mobilizations have questioned neoliberalism, not in an abstract manner, but in its concrete expressions, in the everyday consequences lived by Chileans. However, neoliberalism is not dead. Although we can definitively say that the narrative that identified the Chilean model as a paradigm to be imitated by countries in the region is over.

Today, when Latin America is torn between conservative resurgences and attempts at progressive reinforcement, the end of Chile’s path to neoliberalism, as an export model, is good news.

The eruption of Chile in October will continue to shape new landscapes, although we cannot know what form they will take, because the strength of the social unrest has been so overwhelming that it is difficult to channel it. But the magma released will also create fertile ground for a new future. What seeds will be scattered? The answer lies in our hands.

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