The attitude of the Chilean newspaper "El Mercurio" towards the main economic policies of the Popular Unity government of Salvador Allende (1970 - 1973).

Abstract

Resumé of History major:

“The attitude of the Chilean newspaper ‘El Mercurio’ towards the main economic policies of the Popular Unity government of Salvador Allende (1970-73)”

By Paul Francis Llewellyn Department of History University of Oslo, Norway Autumn 2002

Introduction This investigation will show in what manner the conservative daily newspaper El Mercurio presented the main economic policies of the Chilean left-wing Popular Unity (UP) government during its term in office. This will be achieved through a systematic study of articles from the newspaper that deal specifically with several distinct areas of UP government economics, at the same time making cross-reference to secondary literature when necessary or possible. The aim will be to analyse the attitude of the newspaper in its coverage of the subject matter and evaluate its objectivity as a journalistic medium, and in doing so provide a greater understanding of the period under study.

Brief historical presentation On 4th September 1970, Dr. Salvador Allende Gossens was elected president of Chile with 36.2% of the popular vote, at the head of the Popular Unity (UP) coalition. The UP alliance consisted of a wide spread of the Chilean political left, but was characterised as Marxist due to the overwhelming influence of the two largest parties; the Communists (PC) and the Socialists (PS). This was the first time in Chilean history that a socialist had been elected leader of the country by democratic means. The UP coalition’s political program proposed the construction of a socialist state and was therefore radical in its aims compared to previous governments. It included the nationalisation of the copper industry, the creation of state, private and mixed property areas, extensive social reforms and increased expenditure in many areas. It also involved agrarian reform on a far more extensive scale than previously experienced in Chile.

The program moved at an ambitious pace and Allende's first year was characterised by an upturn in the economy. Although things looked good for a while, reactionary and working class discontent soon started to catch up with the government. The landed oligarchy and business interests were naturally resistant to any reform that threatened their privileged position at the top of society. The peasants and unions were dissatisfied because they considered the reforms as moving too slowly or not being far reaching enough. By the end of 1971, imbalances in the government’s economic strategy, as well as a US economic blockade, began to have a considerably negative effect on the country’s economic state.

The centre Christian Democrat party (DC) had originally been receptive to Allende's policies at the start of his term, and had in fact begun the process of reform in Chile during their own government previous to that of Allende. However, in 1971, in response to the increasingly volatile situation the country was experiencing, the DC began to move towards the right of the political spectrum, attacking the government and blocking legislation in Congress. Chile's worsening economic situation deteriorated further due to inflation and shortages in consumer goods and basic necessities, in particular during the transport strike of October 1972. In August 1972, a political alliance between the DC and the right (primarily the National Party - PN) was officially established and termed the Democratic Confederation - CODE. Long buried dissent within the UP coalition also surfaced, with two factions emerging. The first one, including the PC and Allende, supported Allende’s program of peaceful institutional change - 'the Chilean road to Socialism'. The other faction, including the PS and former members of the DC, supported a more militant strategy. They desired to implement an armed revolution and were not adverse to the thought of overthrowing Allende in the process. Ironically, this desire was to become a reality.

On the 11th September 1973, the military forces in Chile under the command of General Augusto Pinochet took power in a coup d'etat. The governing coalition was deposed and Salvador Allende died during the takeover (reportedly by suicide) after the seat of government was bombed and stormed by troops. American business interests had been extensively threatened by the UP program envisioning 'the Chilean road to Socialism', and the coup was welcomed by the Nixon administration, although direct US involvement in the coup was never proven. General Pinochet's intention was to halt what he saw as the ruination of the country under the auspices of Marxism. A curfew was imposed and the military operated under the assumption that it was fighting a war against dangerous, well-armed and organised bands of workers. The left-wing parties were severely repressed in the first weeks of the coup, with arrests, imprisonments, assassinations, disappearances, and executions of many members. The ruling Junta announced that the military regime was a temporary measure in order to put the country back on its feet. A return to democracy could then be discussed at a future date. However, Pinochet was to remain in power for almost 17 years before he eventually handed over the reigns to a democratically elected leader in March 1990.

UP economic policy The UP program was radical in its aims. The overall objective was to achieve a transition to socialism by democratic means. This would involve a combined political and economic program aimed at resting control of the economy out of the hands of a small elite and placing it in the hands of the state. It would then be easier to dismantle the various institutions connected with Western capitalism. The following economic measures were deemed necessary; a. Nationalisation of the country’s basic resources. b. Nationalisation of large foreign enterprises, which were seen to be draining the wealth out of the country. c. Agrarian reform: the breaking-up of the ‘latifundios’ (large landed estates) and redistribution of land to the peasants. d. Transferring banks and large businesses into state property. e. A massive redistribution of income. These measures were seen as the first phase and, in theory, would form the basis of a popular social movement. Having gained the popular support of the masses, the government could then make a successful transition to a socialist society.

The key figure in the economic policy of Salvador Allende’s UP government was the first Minister of the Economy, Pedro Vuskovic. He wanted to implement a massive redistribution of revenue by raising salaries and increasing public expenditure, through which the buying power of the population would increase and accordingly consumption in general. These measures would activate the idle capacity of the Chilean productive apparatus (which was relatively large) and generate a climate of prosperity. If this strategy paid off, it would have the effect of strengthening the government’s position and allowing it to advance its revolutionary program much faster.

The gamble paid off in the short term, with the Chilean economy growing 9% in 1971 and unemployment sinking to 3.8%. However, the price of copper took a nose-dive in the same period and production also went down, with correspondingly negative results for the economy. A commercial deficit was recorded at the end of 1971 and private investors shied away. The US economic blockade also began to take effect. US President Richard Nixon had made it known that he wanted to “make the (Chilean) economy scream” and this policy was outlined in National Security Decision Memorandum (NSDM) 93 of November 1970: “All new bilateral foreign assistance was to be stopped, although disbursements would continue under loans made previously. The US would use its predominant position in international financial institutions to dry up the flow of new multilateral credit or other financial assistance. To the extent possible, financial assistance or guarantees to US private investment in Chile would be ended, and US businesses would be made aware of the government's concern and its restrictive policies…The United States accounted for around 80% of Chilean copper production (approximately four-fifths of Chile’s foreign exchange earnings) and US foreign economic policy concerning Chile had a profound effect on its economy.”

In 1972, the Chilean economy took a turn for the worse. Exports fell, imports rose alarmingly and inflation rocketed. The growth in GDP went from 9% in 1971 to –1.2%, while the rate of inflation went from 22.1% the previous year to 163.4%. Vuskovic had been replaced as Minister of Economy but the damage was already done. Chile had entered a major recession, with hyperinflation, a negative growth in GDP, a lack of supplies and spare parts, as well as a state of general political and social disorder. By September 1973, inflation had reached 381.1% and the growth in GDP stood at -4.2%. The damage done to the Chilean economy would take many years of hardship and sacrifice to repair. Ironically, it would be the same lower classes that Allende was trying to help that would suffer the most during the Pinochet regime’s application of strict neo-liberal policies designed to rectify the UP government’s economic mistakes.

The Chilean newspaper El Mercurio El Mercurio is one of Chile’s oldest newspapers and can be regarded as the equivalent of the English newspaper The Times. It was originally founded in Valparaíso on 12th September 1827 and started in Santiago on 1st June 1900. The newspaper was owned by the Edwards family, which in the late 1960s supplied over half of the total circulation of dailies in the country. Its publishing house Lord Cochrane supplied an even greater share of the weekly magazine market and in conjunction with the closely associated Editorial Zig-Zag, the Edwards clan retained control over almost the entire Chilean market for periodicals. At the beginning of Allende’s government, the newspaper was considered a well informed, conservative but independent publication.

The Chilean media underwent a radical polarisation during the period of Salvador Allende’s administration. At the beginning of his accession to power, the opposition to the new President was limited to the DC periodical La Prensa and one or two radio stations. Chilean television was also generally favourable to the UP government. The left-wing newspapers were in a state of euphoria, believing that the country had set out on the road to socialism from which there would be no return. However, as the effects of the US economic blockade began to be felt, and as the country began to be affected by the government’s program, the opposition became more and more vocal. After the summer of 1971, the newspaper El Mercurio launched a progressively more virulent campaign against the government. It was joined by the television station Canal 13 (run by the Catholic University), the radio stations Agricultura and Balmaceda, and finally the newspaper La Tercera.

As was shown by the investigation, El Mercurio received financial assistance from the US both before and during the period of the Allende administration. Based on the evidence, there can be no doubt that the newspaper was biased in its presentation of events during the Allende period. However, an issue far more serious was that the newspaper allowed editorials to be composed for it by the CIA. This certainly damaged its credibility and indeed, a common slogan appearing on street walls at the time was “¡El Mercurio miente!” signifying “El Mercurio lies!” Members of the populace evidently realised that certain articles published by the newspaper were giving a distorted picture. In fact, on one occasion, members of the Radical Party declared in Congress that El Mercurio was noted for its permanent attacks on government measures, and also for the fact that the people knew perfectly well that the newspaper represented the right and for that reason did not read it.

It is possible to speculate concerning the newspaper’s motives for conducting the anti-Allende campaign. Perhaps the newspaper’s owners foresaw the gradual monopolization of media outlets by the nationalisation program of the government and feared the same happening to El Mercurio. They most certainly dreaded expropriation and government control and must have seen that the newspaper’s freedom and independence would suffer under a socialist regime, not to mention its financial prosperity. As such, their willingness to co-operate with the North American multinationals and the US government to try to avoid such a scenario can be understood in this context.

Conclusion It was ascertained by de Vylder that at the beginning of Allende’s term, El Mercurio was considered a well informed, conservative but independent publication. Yet this investigation revealed links between the newspaper and the United States stretching back to the early 1960s, established through US fears of communist expansion in Latin America. Due to long traditions connecting the newspaper with the country’s propertied class, it was only natural that it would become the main organ of opposition to the Allende government. The revelation that El Mercurio had both published CIA inspired editorials and received large sums of money from the US government and the private North American company ITT can leave no doubt as to its reporting bias. We can safely ascertain that El Mercurio was not an objective newspaper by the time the UP coalition entered government and that its impartiality had suffered considerably.

This conclusion is substantiated by the examination of the articles selected to represent the opinion of the newspaper. It was noted that although El Mercurio did not directly mislead its readers with regards to UP government economic policies, it did prove to be somewhat biased, even alarmist, in its interpretation of them. In its criticism of the UP government, the newspaper placed repeated emphasis on issues such as illegality, Marxist-Leninist ideology, misdirection and misinformation, incompetence, negation of the right to private property, and the spectre of future economic disaster. Here, it can be seen that El Mercurio’s ideological standpoint affected its presentation of UP government economic policies. It was further noted that the newspaper sometimes omitted facts of importance that might have contradicted its own views and presented a broader, more complete picture of events to its readers. Additionally, it was recognised that the attitude of the newspaper became more accentuated as time went by, reflecting the growing economic crisis affecting the country. Overall, it may be said that its credibility came more and more into question during the period due to its progressively anti-government stance.

This author’s preconception of the newspaper’s role in the drama changed during the course of the investigation, from a willingness to readily accept the content of the articles to a healthy dose of scepticism concerning their credibility. The continuing assessment of the periodical’s position in the ideological landscape reflected the considerations towards objectivity any researcher should have when investigating the history of an ideologically split country such as Chile.