… is from page 137 of Richard Pipes’s 2001 book Communism: A History:
After assuming the presidency, Allende entrusted the economic ministries in his “United Popular Government” to Communists, who proceeded to nationalize the remaining mining industries, banking, and much of manufacturing. Enacted by decree, these measures bypassed the legislature. The confiscation of the Anaconda and Kennecott copper mines caused foreign investments to dry up. The Soviet Union came to Allende’s assistance, extending to him over half a billion dollars in loans. Other countries also offered aid, but it was not enough to rescue Chile’s battered finances. To pay for the various social measures, including hikes in wages, the government resorted to the printing presses, which produced an inflation that far surpassed anything seen under [Eduardo] Frei: in three years of Allende’s presidency, the value of the currency in circulation increased by a factor of fifteen, and inflation exceeded 300 percent a year.
Concurrently with the nationalization of enterprises, the government proceeded to collectivize agriculture. To this end, it tolerated and even encouraged land seizures. The result was a dramatic drop in food production, with wheat crops declining by almost 50 percent. Acute shortages followed: when Allende’s government fell, the country had flour reserves for only a few days.
A few quick thoughts:
1. What is happening today in Chavez’s (and Maduro’s) Venezuela is, in many ways, a replay of what happened in Allende’s Chile.
2. Contrary to leftist legend, Allende was no great devotee of democracy.
3. Leftists and “Progressives” are quick to criticize Milton Friedman, F.A. Hayek, and other market-oriented scholars for, in one way or another, advising the Pinochet government – specifically, for advising that government to move to rely more heavily upon sound money and freer markets, which is advice that these scholars consistently and repeatedly offered to all governments. And many of these leftists and “Progressives” complain (because they disagree with the policy advice and because the Pinochet government was indeed, in its own way, brutal and nasty) that the policies advocated by Friedman and Hayek were harmful. But where are the complaints about the destructive policies actually implemented by Allende?
These policies – as any competent economist will predict – bring economic misery and, in the wake of such misery, ever more desperate efforts by the offending government to salvage matters with policies that only accelerate the destruction. Why, for example, is the champion of “big push” economic development, the late Paul Rosenstein-Rodan, not roundly and routinely criticized for excusing Pinochet’s coup as being a result of Allende’s “incompetence” rather than as being an unfortunate result of Allende’s economically calamitous introduction of socialist policies? (In a 1974 essay on Allende, Rosenstein-Rodan wrote that “socialism is a great, perhaps the greatest, ideal of this century.” Rosenstein-Rodan also blamed the failure of the nationalized mines under Allende on that government’s “failure to induce labor discipline.” I reckon that it’s okay, even humane, in the eyes of many leftists and “Progressives” for labor to be “disciplined” by a government that proclaims its devotion to The People, but harsh and cruel and inhumane for workers to be free to pursue and work at whatever jobs they wish, on whatever terms they can negotiate, disciplined only by the competitive forces of the market.)