Chile: Economic freedom and social inequality

Banks make super profits while students face sub-standard education

The press reported that the Heritage foundation has put Chile on 11th position among 161 countries worldwide in its Index of Economic Liberty, which is based on ten individual indicators. Among those are the "respect for property rights", in which our country is rated among the best, and the equally well-rated “contract security” and “tribunal transparency” categories.

The Chilean labour market is one of the "freest" on earth. According to the Heritage foundation Chile is in 12th position and in the published report it says that this work flexibility renders the costs to hire a worker very low, and that it is "practically" free of cost to dismiss an employee.

These figures are enough to show that the Chile’s place in the rankings celebrated by so many newspaper headlines in reality shows how the reign of untrammeled capitalism gives freedom to exploit working class people. We have nothing to celebrate when finding Chile in these "outstanding" positions.

Once again the results of the PSU, the exam for entering university, confirmed that public education generally is of bad quality and that the poor and working class families’ children’s colleges are the ones providing the worst quality of education. Municipal colleges and those partially funded by the state, having classes of 45 and more students, show results in these circumstances in which it is impossible for a teacher to give individual instruction, adapt to his students’ problems and difficulties and give them the abilities they need to face their future work.

When some of these young people, in spite of the odds, obtain high percentages in the selection exams, they are confronted with a new obstacle: the ever higher prices of a higher education and the non-compliance of Lagos and Bachelet with their promises. Both these politicians have repeatedly said that young talented students should not have to stay out of the university system for monetary reasons.

The 30 000 loan guarantees do not even cover 10% of the young people who need it. It is important to note that these are loans, not scholarships. In 2006, the Chilean balance of trade had a surplus of $23 billion, according to the Central Bank. The loans, unlike scholarships, have to be paid back, so one would expect – especially when the Chilean state is wallowing in money from profits of sales of copper – that all the young people who need help should receive a public loan guarantee. But this is not the case despite whatever promises and declarations of the government politicians.

Young people and their families are furious and frustrated by the false promises of the authorities, and they are completely right to be so. The costs of higher education increase, year after year, more than the inflation rate. Education should not be a commodity, a business of dubious quality, to gain money by taking advantage of the dreams of young people. All students should have the opportunity to continue their studies. We have to win back free public education for all those who cannot pay for it by themselves. Education is not an expense but an investment in the future of our society; with a population that is better educated, and trained, quality of life would improve.

Meanwhile the newspapers tell us that commercial banks’ profits have risen by over 30%, which in every respect is exaggerated since the Chilean economy has grown much less than the experts have expected. These super profits are another aspect of the growing economic polarisation in the country. The big companies are crushing competition and are making it disappear. This country in which we supposedly live in a "free market economy" is full of monopolies, or near monopolies, and the market by no means is free, except in the minds of neo-liberal economists and politicians. Twenty per cent of the population control more than 60% of the country’s GDP, and this outrageous inequality keeps on growing.

In Chile, there is a growing feeling of discontent, and there were big social movements, but no mass political party offers a way out of this dissatisfaction. The old left has been incapable of doing so: one part has joined the "Concertación" (governing coalition), administrating neo-liberal capitalism, while another part around the PC (Communist Party) is trying its utmost to be recognised as a ‘genuine’ and ‘responsible’ institutional spokesperson of the Concertación.

The workers, the poor, the young need a new political movment who can show a way out, a programme and a perspective for the social transformation of Chile. What the huge mobilisations of the young students and the protests of the indebted homeowners [in Chile some poor working class families have scraped enough money together which with state loans and mortgages from the banks, meant that they could have a house. However, increases in interest rates mean that their houses have been repossessed] taught us is that the big social mobilisations alone are not enough if we want to win. These movements might shake the representatives of the ruling class for a while, but after that the government will take the initiative again. That’s why the call of "ANDA Chile a luchar!" (Forward Chile to struggle) of the National Association of Indebted Homeowners, to form this instrument, this party of the workers and the poor, is so important for our country.

Liked this article? We need your support to improve our work. Please become a Patron! and support our work
Become a patron at Patreon!

Be the first to comment

Leave a Reply

Your email address will not be published.