A second aspect of Chile’s social situation that the government, right and business elite fail to understand (or do not want to recognize) is that the neoliberal model failed dramatically in its ability to effectively and structurally integrate the well-being of the majority of the population, and that it knows it.
The social revolt and pandemic have revealed the great fantasy on which the supposed national development rested.
The model has been very efficient in generating and concentrating wealth in a small section of the population, thanks to a virtuous circle that, in appearance, could be reproduced indefinitely. It begins in an extensive offer of low-paying jobs; continues to appropriate a significant portion of wages through the sale of imported goods and services in retail chains, supermarkets, schools, universities, clinics and others; continues to capture future wages through a system of expensive, low-access credits that compensate for bad wages; and ends with the use of planned savings to generate large returns and expand the entire financial and service industry, starting with the constant availability of large volumes of cheap capital. It is, as I have pointed out on another occasion, an updated version of the pulp model of the mining and logger camps of Last century Chile.
An elite dedicated to the export of low value-added raw materials, the sale of imported goods and services, and the reproduction of financial capital, has not been able to conceive of a modern, technological and internationally competitive development model. That generates structural wealth and organically integrates the population into the benefits of well-being. At least for the third time in our history, the elite opted for the same path. More importantly, large Chilean capitalists invest in technology companies abroad, such as the French Nexans, of which the Luksic group owns 29% and which competes even in the domestic market for access to public fiber optic laying tenders.
As a result of this model, more than 60% of the population has incomes equal to or less than 600 thousand pesos per month, constituting so-called poor groups and popular sectors. 30% or less, according to Emmanuelle Barozet’s studies, it makes up the middle class, either for its income (between 600 billion and two million pesos per month) or for its type of work. The problem is that without a social welfare structure that guarantees health, education, pensions and other benefits, this sector relies almost entirely on fluctuations in the economy to remain in that status. 70% of the population, however, claims to belong to it. Probably because of the illusion caused by easy credit, which gives access to a level of consumption above real income. Not for nothing are Chilean households the most indebted in Latin America, with an average of 7 out of 10 pesos receiving, according to research by Lorena Pérez.
Not to be redundant, just one more couple of data: while the average monthly pension in March 2019 was 320,000 pesos for men and 192,000 pesos for women, VET earnings reached more than 267 billion pesos, nearly 1.5 billion per day. Thus, to the daily fears of the swings of the economy, the certainty of leading to poor old age is added.
In short, Chile is not only not and has not been a middle-class country, but of popular and poor sectors. And none of the three groups are offered a social welfare system that allows them to maintain a reasonable and stable standard of living.
Fantasy is no longer sustained: the neoliberal model crashed into the reality of the daily lives of millions of people and they know it. They know their precarious situation better than before and that this is more frequent than we wanted to accept. They also intuit that with a model like the current one and with a renter business class, dedicated to the predation of the environment, export of raw materials, import of consumer goods and sale of essential services, there is no possibility of changing things.
So what the government, the right and the business elite do not understand is that today in Chile there are serious doubts that they are capable and willing to formulate a different development project, that generates and distributes wealth beyond their sector.
The content poured into this opinion column is the sole responsibility of its author, and does not necessarily reflect the editorial line or position of El Mostrador.