El Imperio de Calibán

Allende, the Third World, and Neoliberal Imperialism

Chris Dietrich

Imperial & Global Forum June 18, 2014

“Allende was assassinated for nationalizing the . . . wealth of Chilean subsoil,” Pablo Neruda wrote on September 14, 1973. Neruda was lamenting the overthrow and death of his friend, Chilean President Salvador Allende, a week before he himself succumbed to cancer.  “From the salt-peter deserts, the underwater coal mines, and the terrible heights where copper is extracted through inhuman work by the hands of my people, a liberating movement of great magnitude arose,” he continued.  “This movement led a man named Salvador Allende to the presidency of Chile, to undertake reforms and measures of justice that could not be postponed, to rescue our national wealth from foreign clutches.”  Unfortunately, Allende’s flirtation with economic nationalization ran up against the country’s multinational business interests, particularly those that had support from the U.S. government. His socialist reforms were also ill timed; the U.S. government’s ideological view towards the global economy tended towards the Manichean.

So what was the American role in Allende’s overthrow?

The Chilean coup, as such a vivid moment of crisis, continues to occupy a murky and ambiguous position on the moving line that divides the past and the present. And owing to the release of new material, the episode has received a good deal of renewed coverage in the past half-decade. In particular, the recent publication of volumes on U.S. foreign policy toward Chile between 1969 and 1973 by the Historian’s Office of the U.S. State Department and the National Security Archive at George Washington University have led to a flurry of new studies.

Earlier this month, self-described CIA “spymaster” Jack Devine stirred the pot again with a Foreign Affairs article entitled “What Really Happened in Chile.” Based on his personal experience in Chile at the time, Devine explains “how the U.S. government learned of the coup in Chile” only two days before it happened. Although admitting that the CIA supported an earlier coup attempt against Allende in 1970, Devine takes great pains to shift the blame away from Henry Kissinger and Richard Nixon. He instead argues that the U.S. government did not plot with the Chilean military in the successful overthrow of Allende; what the U.S. government did do was attempt to reduce support for Allende and exacerbate the political opposition he already faced “from not only the wealthy but the middle and working classes as well.” Accusations that the Nixon administration played a greater role, Devine concludes, do little more than “muddy the waters.”

In this interpretation, Devine follows the likes of historian Mark Falcoff, Nixon’s secretary of state, William Rogers, and Kissinger himself, who have sought to exculpate the Nixon administration. Duke University professor Hal Brands controversially expanded upon this line of argument in Latin America’s Cold War in 2012. If a major historical trend in the past generation has been an emphasis on agency from below, Brands asks, why haven’t historians sought interpretations of Latin American insecurity and violence that move U.S. foreign policy from the center to the periphery of analysis? In other words, shouldn’t Latin American leaders be held accountable for their own actions in their own nations? In this reading, left-wing extremism led to right-wing extremism, or vice-versa, in a vicious circle. Both were part of “a larger cycle of radicalism and reaction” that was largely indigenous.

But others have found damning evidence that points to a more important role for the Nixon administration.   Most vocal among them is Peter Kornbluh, who in 2013 released a revised edition of his award-winning book, The Pinochet File: A Declassified Dossier on Atrocity and Accountability. Kornbluh has long held that the policies of Henry Kissinger made a singular contribution “to the denouement of democracy and rise of dictatorship in Chile.”  In particular, Kissinger spearheaded a Nixon administration campaign that fed money to opposition groups in politics and civil society, escalated aid to the military, financed dissenting journals and newspapers, and advocated other policies designed to weaken the government. In making these claims about immorality and interventionism, Kornbluh is joined by historians Stephen Rabe, Jonathan Haslam, Kristian Gustafson, Lubna Qureshi, the journalist Stephen Kinzer, and most famously, the late leftist intellectual Christopher Hitchens.

Nevertheless, the story is more complicated than what London School of Economics historian Tanya Harmer calls “the blame-game.”   In her authoritative 2012 international history of the coup, Allende’s Chile and the Inter-American Cold War, she asks the crucial question: If not directly responsible for the events of September 1973, what role did the United States play? The answer Harmer provides suggests that the Nixon administration decided to undertake close consultation with like-minded governments in South America, in particular Brazil, to coordinate efforts to not only oppose Allende but also to improve the relations with friendly military leaders in the hemisphere. Like Kornbluh, Harmer argues that the United States helped frame and apply a campaign to subvert Allende’s government from the moment of his election. But Kissinger and Nixon did not direct events. Rather, they worked closely with the military regime of General Emílio Garrastazu Médici in Brazil, who became the most powerful campaigner for regime change in Chile. At the same time, disagreements between Allende and Cuban president Fidel Castro pointed to a great degree of variation in leftist policies in the region.

Transforming the Third World Economic Order

Harmer thus explores what New York University historian Greg Grandin has called “a metaphysics of Allende-hating” in terms of an inter-American Cold War of many itineraries. For Grandin, though, the driving cause of the Nixon administration’s concern about Chile built upon, and went beyond, standard Cold War arguments of “national security and economics.”  He is right, but divergent understandings of the past and future of the global economy drove that metaphysics.  In other words, the problem was not that Allende was an avowed Marxist or even that he pushed through a constitutional amendment nationalizing the huge copper investments of Cerro, Anaconda, and Kennecott on July 16, 1971.  Nor was it the threat that a socialist Chile, along with new nationalist governments in Bolivia and Peru, would provide a toe-hold for Cuba and the Soviet Union in the region.  (In fact, the intransigence the White House felt towards Chile contrasted markedly with the easing of relations with the Soviet Union and the opening up of China at the same time.)

Nixon and Kissinger were less concerned about those problems than about the example Allende would set in Latin America and beyond. “Everyone agrees,” Kissinger wrote in 1969, that Allende would seek a socialist and Marxist state that would line up ideologically and politically with the USSR and Cuba.  The consolidation of Allende in power would thus “pose some very serious threats to our interests and position in the hemisphere and . . . elsewhere in the world.”  Nixon felt the same way. “Our main concern,” he told the National Security Council on November 5, 1970, “is the prospect that he can consolidate himself and the picture projected to the world will be his success.”

More than anything, these quotes remind us that the stakes of Allende’s success or failure were global.  Actors in Chile certainly took on a perspective that looked beyond their borders.  One of Allende’s spokesmen recalled the recent “liquidation of the left in Indonesia” to dramatize the danger of counterrevolution.  Allende himself became a vocal proponent of the Third World’s broader challenge to the international economy, which was directed through the United Nations Conference on Trade and Development, the Group of 77, and the Non-Aligned Movement.  Since the end of the Second World War, groups from Latin America, the Middle East, Asia, and Africa had discussed the problem of imperial continuity in the international economy.

Theirs was a widely shared moral and political stance of concise logic; decolonization entailed more than political independence from a colonial master, and nowhere did imperial power exert itself with greater vigor than in the material worlds of law and economics.  This Third World challenge also held a particular policy prescription designed to end economic domination — if the “poor lands” remained ensconced in the shadow of empire, the use of national legal power offered an escape. In this context, the CIA reported in January 1969, “further steps toward greater government participation in or even outright nationalization of” the holdings of multinational corporations in Chile were “inevitable.”

Based on the guiding principal of permanent sovereignty, advanced in the previous two decades as part of a new international law in the UN General Assembly and Economic and Social Council, developing nations held the right to “rebalance” the international economy. Upon nationalizing the major copper mines in Chile, Allende pushed to host the third ministerial meeting of the UN Conference on Trade and Development in 1972.  When he gave a stirring address welcoming the diplomats to Santiago, he was followed to the podium by Raúl Prebisch, who by that time was considered the father of the Third World critique of global economic inequality.  Prebisch thanked Allende for hosting the conference, and began his speech.  The joint problem of the poor nations was “above all to achieve sovereignty in a full sense,” he said.  The poor nations needed “to establish it on solid foundations and then pass from the present relationship of dependence—which is unacceptable in the light of the political maturity of our peoples—to interdependent relationships which involve new forms of cooperation.”

One can see the thrust of this position in any number of the meetings that preceded the 1974 UN Declaration of a New International Economic Order, which was the culmination of the Third Worldist program of “economic emancipation.”  For example, the 59 foreign ministers of the Non-Aligned Movement regrouped in Guyana months after the Santiago meeting.   There, they signed the 1972 Georgetown Declaration, which gave  “full support” to Allende and other leaders that “in the exercise of their sovereign rights over the natural resources of their countries [had] nationalized the interests of powerful foreign monopolies.”  As in Santiago, the ministers turned directly to the expression of sovereignty as a legitimate and moral international stance.  “[I]t is fundamentally important to stress that the full exercise of their sovereignty over natural resources is essential for economic independence,” the foreign ministers wrote.  Moreover, economic emancipation was “closely linked to political independence, and that the latter is consolidated by strengthening the former.”

If the imperial past required correction, there was clearly space within that argument for more nuanced, less dialectical national policies.  For example, Allende did not see the July 16, 1971 constitutional amendment nationalizing Chilean copper investments as contradictory to his stated policy of utilizing access to investment capital in the “Western financial system” to develop the national economy.

In fact, U.S. Ambassador Edward M. Korry had negotiated with Allende and other government leaders a compromise by which the Constitutional Amendment was modified to provide compensation to the affected multinational companies.  (To the great ire of Korry, the Nixon administration, and corporate executives, Allende deftly used the compromise to insist that “excess profits” from the past be deducted from the settlement.)

At the same time, Allende had already concluded sales agreements for nationalized copper with other multinational corporations, including RCA, Bethlehem Steel, and Bank of America.  What the State Department called the “Chilean propaganda attack” on two firms, Anaconda and Kennecott, was thus more of an attempt to isolate the larger and more controversial businesses from other U.S. investors than to attack foreign capital investment writ large.

Linking Neoliberalism to Its Imperial Past

But the position linking global capitalism to the imperial past remained widespread, and not only among Allende, Prebisch, and other leaders of the developing world.  In 1973, two special subcommittees of the U.S. Senate Foreign Relations Committee, both headed by Idaho senator Frank Church, began investigations of multinational corporations, intelligence activities, and U.S. foreign policy.  Although U.S. involvement in Chile was only one subject of the investigations, the reports condemned the Nixon administration for using the powerful position of U.S. firms in Chile to “make the economy scream” during Allende’s period as president.

Such outbursts of outrage were relatively scarce, though.  Most actors in the United States and Western Europe recoiled at the Third World demands for a New International Economic Order in 1974 and after, and warned that “economic emancipation” would further disrupt a fragile global economy, which already stood on shaky foundations in the early 1970s because of skyrocketing oil prices, runaway inflation, and the collapse of the Bretton Woods monetary system.  Above all, nationalization programs like Chile’s were viewed as serious hindrances to private capital flows.

The gravitas of that ideological battle was dramatized in a 1972 conversation between Allende and the U.S. Ambassador to the United Nations, George Herbert Walker Bush, who sought to set Allende straight regarding recent public statements in which he labelled U.S. foreign policy imperialist.  “I told him that we did not consider ourselves “imperialists,” Bush reported.

[T]hat we did not recognize that people were correctly identifying us when we were termed imperialists, and that we still had a deep conviction that our free enterprise system was not selfish but was the best system—certainly for us, though we had no intention to insist on it for others. And when it went abroad it did not “bleed” other people.”

When Allende responded that his speeches had clearly differentiated “between the government of the United States, the people of the United States, and multinational corporations,” Bush had an easy answer: “because of our deep conviction in the free enterprise system, the people, the government, and the system were all interlocked.” 

That was exactly the implication that Neruda and a generation of Third World intellectuals were left with after the 1973 coup.  A month later, an “energy crisis” gave multinational companies and their supporters in the U.S. government an opening to exploit the convergence that Bush described.  When the oil producers also invoked the international law of sovereignty as a means to legitimize their four-fold increase in the global price of oil, the response was ready-made. 

Neoliberal diplomacy, in particular U.S. government protection of foreign investments, became the basis of a new foreign policy for the 1970s and beyond.  

Nowhere was that neoliberal policy more evident than in Chile, where Milton Friedman’s “Los Chicago Boys” applied a series of policies designed to “open up” the Chilean market.  At the same time, the United States strengthened the new military regime of Augusto Pinochet, providing both economic and military support.

General Pinochet meeting with Milton Friedman.

Whether or not the neoliberal policies of Chile promoted development or, more broadly, societal well-being is an open question.  It is certain, though, that the Chilean trajectory gave credence to a generation of critics who would link U.S. foreign policy and the “free-market” basis of contemporary globalization to the concept of imperialism.

The World Peace Council, meeting in the newly independent nation of Guinea Bissau, saw the connection in 1975.  Not only had the U.S. Gulf Oil Corporation financed the founding of a separatist organization that challenged the government.  It was also “significant” that members of the Brazilian “Death Squad,” who the Peace Council believed were involved in the “CIA-engineered overthrow of the Allende Government,” have been spotted in Pinochet’s Chile.  Algerian president Houari Boumedienne called the rise of Pinochet “a tragic scene,” part of a longer-running “imperialist plot…stirred up through the multinational companies.”

For the Algerian jurist Mohammed Bedjaoui, a long-time civil servant at the United Nations and the International Court of Justice, the lesson was more optimistic, but only slightly so.  The acts of men like Allende, and the broad movement they represented, had deprived imperialism of legitimacy for all time.  “[T]he major revolution of our time that began with decolonization” had not ended, he wrote in a 1976 tract on the Non-Aligned Movement and international law, funded by the Carnegie Foundation. The process of self-assertion, begun in the United Nations and continued in the Non-Aligned Movement and elsewhere, instead was a first step that “enriched the content of cardinal notions like that of sovereignty.” Yet he dedicated the work to Salvador Allende.  The dedication used a phrase coined by Régis Debray in his martyr’s tribute—mort dans sa loi, or “dead by his own law.”  The fall of Allende came not just at the hand of military traitors or multinational corporations, but because of a system of western interests that had a greater meaning.

Voices across the world joined Neruda, Bedjaoui, and Boumedienne in celebrating the sovereignty of Chile, decrying the fall of Allende, and blaming the United States for his overthrow and death. Months later, Gabriel García Márquez wrote that the overthrow may have taken place in Chile “to the greater woe of Chileans, but it will pass into history as something that has happened to us all, children of this age, and it will remain in our lives forever.”

The role of the United States in the coup, as well as its bloody aftermath, remains an important one.  But the findings will do little to overthrow Allende’s global Third World legacy, especially in an era in which market-based national economic policies remain prominent in the global economic system.

Chris Dietrich is Assistant Professor of History at Fordham University. His first book monograph analyzes the rise and fall of anti-colonial law and economics in the twentieth century. His second project is a psychoanalysis of American neoliberalism in the 1970s and 1980s.

Follow on Twitter @C_R_W_Dietrich

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