Chile—Birth Pangs of Citizenship By Alvaro Vargas Llosa - Independent

February 11, 2008

SANTIAGO, Chile—It might be argued that a country ceases to be underdeveloped when its citizens shift their anger from other people’s wealth to the quality of the services their own wealth is paying for.

Chile is perhaps the world’s best example. For the past two years, President Michelle Bachelet has faced a national malaise that has manifested itself in violent student protests, strikes affecting copper mining and the forestry industry, and the gradual unraveling of the coalition that has governed since 1990.

I recently asked Bachelet and former President Ricardo Lagos what was happening. Their answers were instructive. Lagos told me that “Chileans feel they have became a nation of consumers but not quite a nation of citizens; in other words, our economic prosperity, which has reduced poverty to 14 percent of the population, is not reflected in the kind of basic services people are obtaining. Our coalition bears some responsibility because our political platform is stuck in the early 1990s and today’s problems are those of a more prosperous nation.”

I asked Bachelet if she agreed. “Yes,” she said, “but I would add that in today’s world, because of improved communications, it is easier for Chileans to realize that the countries we now compare ourselves with, like Spain, provide better services than the ones we have. Also, communications make it easier for Chileans to realize that in order to be competitive, our education system needs to take a big leap forward.”

Of course, there is no real difference between being a consumer and being a citizen. A person who obtains a first-rate education that makes him or her a proud citizen has to “consume” an education that someone produces. Chile’s governing coalition has not quite understood that link—a reason why the economy is heavily reliant on private enterprise while the basic services are stifled by government bureaucracy.

Two-thirds of the families whose children attend public schools are extremely dissatisfied with the quality of education, whereas two-thirds of the families whose children attend private schools, including many who benefit from a voucher program that helps them meet tuition, are very satisfied. Not surprisingly, the students who plagued Bachelet’s first year in office were mostly those in the public system.

Another example of the disconnect between Chile’s free economy and a service sector riddled with government intervention—between what Lagos calls “consumers” and “citizens”—is transportation. The government tried to overhaul the capital’s transit system, replacing a privately run bus system with a centrally planned operation that covered fewer routes, lengthening the time it took to go from one place to the other and overcrowding the subway, which used to be highly regarded. The result was a political earthquake that left the government badly wounded.

At first sight, Chileans should be content. Their economy is the envy of Latin America. Their average per capita income, which will soon reach $10,000, continues to rise. And the prospects for copper, the country’s main export, are rosy: Despite a decline in demand in the United States, China’s insatiable appetite for the metal means that global demand will continue to grow for quite some time.

One of the most significant developments that took place in Chile in the last decade and a half was the center-left coalition’s buying into the economic reforms it inherited from Augusto Pinochet’s dictatorship. That political consensus translated into stability and predictability, generating a steady flow of investment and an increase in economic production. But now that people are weary of the governing coalition, Chile faces a challenge similar to what Spain faced some years ago: the need for the right—the child of the military dictatorship—to demonstrate that it is ready to govern under the rule of law. The effect will be not only to bid farewell to the Pinochet syndrome once and for all, but, more importantly in today’s modern and democratic Chile, to engage in a new wave of reforms that begins to narrow the gap between an economic environment that is first class and a service environment that for many Chileans is third rate.

It is by no means assured that the right will opt for such costly reforms or that most Chileans will understand that the way to satisfy their demands is to reduce the bureaucratic dead weight attached to the basic services. Still, it is heartening to know that Chileans are becoming real citizens—worrying more about the quality of that which their money can buy and less about who stole the nation’s mythical treasure. If they act decisively upon that growing sentiment, they should catch up with Spain in the not-too-distant future.

John Semmens is a research fellow at the Independent Institute, a research project manager in the Arizona Department of Transportation Research Center, and contributing author to the Independent Institute book, Street Smart: Competition, Entrepreneurship and the Future of Roads, edited by Gabriel Roth.

S. Fred Singer, an atmospheric physicist, is Research Fellow at the Independent Institute, Professor Emeritus of Environmental Sciences at the University of Virginia, and former founding Director of the U.S. Weather Satellite Service. He is author of Hot Talk, Cold Science: Global Warming’s Unfinished Debate (The Independent Institute, 1997).

Dr. James L. Payne is Research Fellow at the Independent Institute and Director of Lytton Research and Analysis and author of numerous books, including A History of Force: Exploring the Worldwide Movement Against Habits of Coercion, Bloodshed, and Mayhem,and he has taught political science at Yale University, Wesleyan University, Johns Hopkins University, and Texas A & M University.

Randal R. Rucker is Research Fellow at the Independent Institute, Professor of Agricultural Economics and Economics at Montana State University, and co-author (with E.C. Pasour, Jr.) of Plowshares & Pork Barrels: The Political Economy of Agriculture.

Charles V. Peña is Senior Fellow at the Independent Institute as well as a senior fellow with the Coalition for a Realistic Foreign Policy, senior fellow with the George Washington University Homeland Security Policy Institute, and an adviser on the Straus Military Reform Project.

William Ratliff is Adjunct Fellow at the Independent Institute, Research Fellow at Stanford University's Hoover Institution, and a frequent writer on Chinese and Cuban foreign policies.

Ivan Eland is Director of the Center on Peace & Liberty at The Independent Institute and Assistant Editor of The Independent Review. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, Principal Defense Analyst at the Congressional Budget Office, Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office, and Investigator for the House Foreign Affairs Committee. Full Biography and Recent Publications

Jonathan J. Bean is Research Fellow at the Independent Institute, Professor of History at Southern Illinois University, and editor of the forthcoming book, Race and Liberty: The Classical Liberal Tradition of Civil Rights.

Anthony Gregory is a Research Analyst at The Independent Institute. He earned his bachelor's degree in American history from the University of California at Berkeley and gave the undergraduate history commencement speech in 2003. In addition to his work with the Independent Institute, he regularly writes for numerous news and commentary web sites, including LewRockwell.com, Future of Freedom Foundation, and the Rational Review.
Full Biography and Recent Publications

Dominick T. Armentano is professor emeritus in economics at the University of Hartford (Connecticut) and a research fellow at The Independent Institute in Oakland, Calif. He is author of Antitrust & Monopoly (Independent Institute, 1998).

Alvaro Vargas Llosa is director of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. He is widely published and has lectured on world economic and political issues including at the Mont Pelerin Society, Naumann Foundation (Germany), FAES Foundation (Spain), Brazilian Institute of Business Studies, Fundación Libertad (Argentina), CEDICE Foundation (Venezuela), Florida International University, and the Ecuadorian Chamber of Commerce. He is the author of the Independent Institute books The Che Guevara Myth and Liberty for Latin America. Full biography and recent publications.

Pierre Lemieux is an economist and co-director of the Economics and Liberty Research Group at the Université du Québec en Outaouais and a Research Fellow at The Independent Institute in Oakland, California.

Alexander Tabarrok is research director at The Independent Institute, associate professor of economics at George Mason University, editor of the Independent Institute books, Entrepreneurial Economics, The Voluntary City (with D. Beito and P. Gordon), and Changing the Guard: Private Prisons and the Control of Crime.

Robert Higgs is Senior Fellow in Political Economy at The Independent Institute, author of Against Leviathan and Crisis and Leviathan, and editor of the scholarly quarterly journal, The Independent Review. Click here for a bio on Dr. Higgs, the noted economist and historian.

William Marina is Research Fellow at the Independent Institute in Oakland, Calif., and Professor Emeritus of History at Florida Atlantic University.

David T. Beito is a Research Fellow at The Independent Institute, Associate Professor of History at the University of Alabama, and co-editor of the book, The Voluntary City: Choice, Community and Civil Society.

William Marina and David T. Beito belong to "Liberty and Power," a group blog at the History News Network.

For further articles and studies, see the Center on Peace & Liberty and OnPower.org.

Nicolas Heidorn is a public policy intern at The Independent Institute in Oakland, California.

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