Chile as a political economy has in recent years served as a laboratory for differing governmental policies that would later become models of political and economic development. Salvador Allende was the first Marxist to be elected to a Latin American nation's highest office, and he vowed to create a revolution in Chile by means of peaceful, democratic processes, and this became known as la via chilena among revolutionary theorists. Allende speeded up the pace of land reform, expropriated foreign-owned copper mines, took over the nation's largest banks, and pursued wage an price policies that would dramatically increase the income of the nation's poor. However, because he finances his programs by means of printing more money, he also introduced hyperinflation that by mid-1973 was increasing prices at an annual rate of some 500 percent. His policies alienated the U.S. government, the Chilean upper class, over time the middle class, and finally the armed forces, leading to the coup of 1973 when a military regime assumed power (Merrill, 1982, xvii-xviii). The issue is what did the election of Salvador Allende mean for Chile, and the answer should consider the many segments of Chilean society and how they were affected by his presidency.
The previous era had extended from 1964 to 1970 and had been the administration of President Eduardo Frei Montalva. It was a textbook example of a centrist political economy (Merrill, 1982, xvii). This period had also awakened the expectations of the poor, who believed that the state would enact programs that would help change their life circumstances. They were disappointed in this belief, however, because the achievements of the Frei administration in terms of land redistribution and the control of copper were far below what had been expected (Oppenheim, 1993, 28).
The election of Allende was a major surprise to most Americans. For one thing, he was an avowed Marxist, the candidate of a coa...