This week will be recorded in our history, not only by the massive rebellion of the legitimately outraged lower and middle classes, but also as one in which the vandalism phenomenon took on such a dimension that his images traveled the world. The text called Social Democratic Inevitability of Chile can be downloaded in www.mariowaissbluth.com.
If the polls are correct, there are between one and two million Chileans over the age of 14 who approve violent or criminal methods. I venture an opinion: there is a small anarchist group operating in Chile for years, that has had the Metro as a preferred target, that took advantage of this social opportunity, which has recruited a couple of thousand «soldiers of anarchy» of sociopathic profile (they have nothing to to see with peaceful protesters) who are succeeding in bringing the country, the government, its economy and its international image to its knees.
If the Government fails to identify, capture and lock them up, no matter how much social improvements are announced, we will continue indefinitely submerged in this crisis and the cost, in the end and as always, will be paid by the poorest and without resources. By the way, these «soldiers of anarchy» were incubated by Chilean society, and now it is not worth complaining that they are criminals who sent us the wrath of God. In the background is the structural inequity of the current model.
While poverty in Chile in 1990 exceeded 43%, and today it is 10%, and Chile’s Human Development Index is by far the best in Latin America, the income distribution (Gini) calculated before taxes is virtually equal to the after-tax and post-tax distribution direct government nsferences to citizens. Thus, Chile’s richest 1% gets no less than 33% of GDP each year, much more than in the USA and Russia, 20%, that follow us.
At the other end, there are the Netherlands and Denmark with 6%. This is compounded, further irritating people, because white-collar thieves have hardly ever soiled it in prison, for millionaires who have been their dismantling. The Penal Code punishes the hen thief and not the businessman or politician whose scams are measured in millions of hens.
In terms of resources, OECD countries show a statistically indemented trend: between 1965 and 2014, as GDP per capita increased, from an average of US$ 14 thousand to US$ 36 thousand per year, the sum of the tax burden plus social contributions was also continuously increasing from 25% of GDP to 35% on average.
Chile is now like the OECD in 1965, and its future tax trajectory is obvious. As the more educated middle classes demand and demand more benefits from the state, the increase in the tax burden is inevitable. As poverty was reduced from 43% to 10% of the population, a new, highly vulnerable lower middle class emerged, indebted at 73% of its income, with a permanent risk of falling into poverty. They are the new outraged: a third of the population. Indeed, increasing the tax burden entails a sine qua non requirement: modernizing the state and improving its effectiveness, efficiency and transparency to manage additional resources.
Plans to do so are already well drawn up and feasible, gradually. It is also noteworthy that the current model led to a culture of individualism instilled in a massive way. First I, second me, and the others who… which entitles you to scamming or looting, and in peacetime, to leave beer bottles thrown on the sand of the beach or sneak through comfort paper.
It also indicates that countries with higher income inequity, regardless of their average per capita income, i.e. regardless of whether they are rich or poor-average countries, have worse rates of health, obesity, crime, violence interpersonal confidence, mental illness, teenage pregnancy, life expectancy, and other social ills. Because mental health, crime and interpersonal confidence are not measured in GDP, they have not had a major influence on the decisions of economists in any government. They have believed that we are only homo economicus, which basically means that we are all perfectly selfish, rational and relentlessly self-maximized. Crass technical error.
Technocrats with technical errors: a paradox. Acemoglu and Robinson are also mentioned, in their masterful book Why Do Countries Fail: It is the alliance between some political (of all colors) and business forces, with their tacit or explicit contubernius, that has allowed the «extraction» of resources from one to another social class, in a kind of mega-bribery at the systemic level.
For the above reasons, I raise the political inevitability and economic partner of a social-democratic model for Chile, Germany-style, Canada or Finland. In a country with our trajectory of inequity and oldage, it is the only peaceful way to development. Therefore, the main agreement entrepreneurs – workers – right – left is the speed and pace of these changes… as has happened in OECD countries.
The text defines social democracy as a different model of market capitalism, in which the tax burden is higher, and these additional resources are efficiently managed by the state, either to redistribute the poorest, or to offer the middle class services they would not otherwise be able to obtain.
To move to social democracy in the Chilean case, eight strategic pillars are defined here:
1. Urgent political gasfism: In order to achieve greater social justice and eliminate irritating from the current situation, it would be appropriate to formally commit to: (a) finish implementing all Engel Commission proposals; (b) eliminate the indefinite re-election of parliamentarians and mayors; (c) increase the duration of the presidential term, an essential source of demagogic attitudes; (d) rapid reform of the Penal Code, to punish white-collar offenders more draconianly; (e) obligation to clear the ownership of all undertakings; (h) validate the civil and criminal liability of companies and their directors; (i) deepen the timid economic relief of the latest announcements, drawing on the fisseeous wide debt capacity.
2. Medium- and long-term constitutional changes: With more time, which will inevitably take time, there are many issues to be addressed in a new Constitution, in terms of the balance and sharing of political power, basic social rights, property rights over autonomy of indigenous peoples, among others. This does not have to «compete» with several obvious and fast-processing constitutional rank laws.
3. Recovery of ethics, values and citizen education in the school: Four rapid and indispensable measures are put in place: (a) strengthen with many resources the schools of pedagogy, in particular those of educators of kindergartens; (b) increase the salary of adult educators even more than the Teaching Career Act, so as to make it as attractive as possible; c) create a true school management career; and d) massify the «peer tutoring» method, which is already being successfully used in Chile on a low scale, which would improve learning of curricular subjects, and more importantly, skills for the 21st century, such as empathy, ethics and values.
4. Recovery of «vilified growth»: For a middle-income country, resources will not be enough even with tax reform. Our job productivity is very low. The National Productivity Commission has developed many useful proposals, which have been underserved by successive governments.
5. A strong, efficient and resourceful state: One of the pillars of the social democratic model is a tax reform that goes, slowly and progressively, increasing the resources that the state can spend on redistribution and/or the improvement in the services it provides citizens. On the other hand, the Chilean State must provide assurances that it will spend these resources well, to provide quality services, to eliminate the long queues and waiting lists and eternal formalities, and to gain the trust and credibility of the citizens. The modernization of the state is indispensable and there is already enough clarity on how to do so.
6. Strengthening the Social Democratic Welfare State: It is vital to open a process of citizen consultation to prioritize the public goods that citizenship requires. It is the most important consultative and participatory process, rather than the constitution: the development of a long-term and binding social pact, which is at the same time as the pace and amount of tax reforms, as well as the citizen services that these resources will be able to Finance.
7. Control of narco, vandals and addiction:. They’re our main threat. We’re still in time to control this scourge with great energy, but we’re running out of money. On the other hand, the fight against alcohol and drug use has already been successfully proven in Iceland, with little progress here and there is no reason not to massify it.
8. The mother of all changes: semi-presidential regime: This constitutional formula avoids the problem of the duration of periods of government. It has the advantage that it «forces» the executive branch to govern with a parliament that is favorable to it. It has been proposed by a plural group of senators, such as Andrés Allamand, Carlos Montes, Hernán Larraín, Felipe Harboe and Andrés Zaldívar.
In a hyper-presidential regime like Chile, in a democracy, the President of the Republic is the only one who could move at the maximum possible speed in these matters, which I hope will be more easily consensuable than before in the current Congress. It’s his desaftransform the crisis, from serious threat, to historic opportunity
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