On September 11, 1973, Chile experienced a violent rupture in its democratic process. Salvador Allende, the first democratically elected Marxist president in South America, was overthrown in a bloody coup led by general Augusto Pinochet, supported by the US and the UK. Fifty-one years later, the echoes of this dark moment in history continue to resonate, exposing the dangers of foreign intervention, imperialism, neoliberalism, and the fragility of democratic sovereignty in the face of Cold War geopolitics.
The US/UK Chilean coup against Allende
Allende’s overthrow was not merely the result of internal dissent or economic instability in Chile; it was the calculated outcome of a concerted effort by external powers, particularly the United States, to destabilise his government. For Washington, Allende represented a threat to the interests of multinational corporations and the broader capitalist order it sought to protect in South America.
His rise to power was a symbol of hope for many across the region, promising sweeping reforms to address inequality, poverty, and the concentration of wealth and land ownership. But for US policymakers, Allende’s success risked becoming a domino that could encourage other countries in South America to challenge the status quo.
The roots of this antagonism date back to Allende’s election in 1970. As a lifelong socialist and member of the Popular Unity coalition, he advocated for policies that directly opposed the neoliberal orthodoxy pushed by the US.
His program included the nationalisation of key industries, most notably copper, which was dominated by US companies like Anaconda and Kennecott, and agrarian reform aimed at redistributing land to Chile’s impoverished rural population. Allende’s vision was to create a more equitable society, moving Chile away from dependence on foreign capital and toward self-sufficiency.
In response, the Nixon administration, guided by the hawkish views of national security advisor Henry Kissinger, embarked on a mission to undermine Allende’s presidency.
Nixon’s infamous directive to “make the economy scream” in Chile was not merely rhetoric but the launch of an aggressive campaign of economic warfare, diplomatic isolation, and covert action. Through the CIA, the US funneled millions of dollars to opposition groups, funded strikes, and supported media outlets that spread disinformation to erode Allende’s legitimacy. These efforts sowed the seeds of political chaos, helping to polarise Chilean society and weaken Allende’s government from within.
The UK also played a complicit role, albeit in a more indirect way. British intelligence agencies cooperated with the CIA in the coup’s planning stages, sharing information and supporting the destabilisation efforts. British firms with economic stakes in Chile also opposed Allende’s nationalisation policies, fearing a ripple effect that could challenge their interests in the region.
The narrative pushed by US officials was that Allende was leading Chile into economic ruin and authoritarianism, but this was a deeply cynical and self-serving justification.
The US government’s primary concern was not the welfare of the Chilean people or the preservation of democracy—quite the opposite. What was at stake for Washington was the fear that Allende’s success would inspire other South American nations to pursue similar socialist agendas, threatening US dominance in the hemisphere. To US elites, the idea of a democratically elected socialist was intolerable, particularly at the height of the Cold War when every leftward shift in South America was viewed through the prism of communism.
Breaking point reached
By September 11, 1973, the situation in Chile had reached a breaking point.
Pinochet, backed by the Chilean military, launched an attack on La Moneda Palace, where Allende was holed up with his close aides. The bombing of the palace and the subsequent violent suppression of Allende’s supporters marked the death of Chilean democracy.
Allende, knowing the end was near, gave a final, defiant radio address to the Chilean people before reportedly taking his own life. His words continue to inspire those who fight against oppression: “I am certain that my sacrifice will not be in vain. I am certain that at least there will be a moral lesson, a lesson that will punish the crime, the cowardice, and the treason”.
In the days and years that followed, Pinochet’s regime unleashed a brutal wave of repression.
Thousands were tortured, disappeared, and killed as the dictatorship imposed neoliberal policies that benefited foreign corporations and the Chilean elite while devastating the working class. The promises of freedom and prosperity touted by the US and UK-backed forces quickly evaporated, replaced by fear, authoritarianism, and growing inequality. However, it also spawned another, equally damaging movement.
The military coup against Allende not only overthrew the democratically elected government but also set the stage for the country to become a testing ground for neoliberal economic policies.
At the heart of this transformation were two prominent economists, Milton Friedman and Arnold Harberger, who, along with their protégés – known as the “Chicago Boys” – implemented a radical experiment that reshaped Chilean society.
This economic shock treatment, which became known as the “Chile Project,” was heralded as a triumph by free-market enthusiasts but criticised as a disaster for ordinary Chileans. The Chilean experiment was not only a defining moment in Chile’s history, but it also became a blueprint for future neoliberal reforms worldwide, marking the dawn of what has been referred to as “disaster capitalism.”
The origins of the Shock Doctrine
Milton Friedman, a key figure of the Chicago School of Economics, championed neoliberalism – a belief in the supremacy of free markets, minimal state intervention, and the privatisation of public services. His academic work laid the intellectual groundwork for policies that would prioritise the private sector and market efficiency over social welfare.
Arnold Harberger, Friedman’s colleague and a pivotal figure in the Chile Project, shared these views. Both men had long been advocates for reducing the state’s role in the economy, believing that economic freedom was inseparable from political freedom.
However, the coup in Chile and the subsequent regime of General Augusto Pinochet revealed the darker side of this economic doctrine.
Neoliberalism’s promise of individual freedom and prosperity was replaced with authoritarianism, inequality, and human suffering. The policies Friedman and Harberger advocated would never have been accepted by a democratic government – nor could they have survived under public scrutiny in a nation like Chile, where Allende’s socialist policies had enjoyed popular support. It was only under the brutal repression of the Pinochet dictatorship that these ideas could be fully implemented.
The Chile Project, initiated in the 1950s and formalised under the US-backed coup, involved sending Chilean students to study economics at the University of Chicago, where they were indoctrinated into the neoliberal ideology of Friedman and Harberger. The Chicago Boys, as they were known, returned to Chile to hold key positions in government and academia, and were instrumental in the Pinochet regime’s overhaul of the Chilean economy.
Once in power, Pinochet’s regime wasted no time in enacting sweeping economic reforms based on the prescriptions of Friedman and Harberger. The pillars of this neoliberal experiment were clear: privatisation of state-owned enterprises, deregulation, cuts to social spending, and the liberalisation of markets. Public goods such as health care, education, and social security were privatised, turning basic rights into market commodities.
The results were devastating. Unemployment skyrocketed, real wages fell, and inequality worsened. Social safety nets were dismantled, leaving the poor and working class with little protection against economic shocks. In this context, Chile became the first laboratory for what would later be known as “shock therapy” – the rapid, often violent, implementation of neoliberal reforms.
Disaster capitalism write large
The parallels between Friedman’s economic theory and Pinochet’s brutal dictatorship could not have been more apparent. The supposed freedom of the market was achieved through the suspension of political freedoms, human rights abuses, and state terror.
Naomi Klein’s theory of disaster capitalism describes how crises – whether natural, political, or economic – are often exploited by powerful elites to impose radical neoliberal reforms. The Chilean coup and the subsequent economic shock treatment are among the earliest and most vivid examples of this phenomenon. The shock doctrine operates on the premise that in moments of crisis, societies are more susceptible to drastic changes that would otherwise be politically and socially untenable.
In Chile, the military coup provided the perfect backdrop for this type of economic restructuring.
With the democratic government overthrown and civil society silenced, the Chicago Boys could implement their reforms without resistance. The devastation wrought by the coup – alongside the widespread repression that followed – created an atmosphere of fear and instability. In this context, Friedman and Harberger’s economic theories were not just policies; they were instruments of control and domination, forcing ordinary people to bear the brunt of economic experimentation.
Chile’s neoliberal experiment had far-reaching consequences, both for the country itself and for global economic policy.
While Chile’s economy eventually stabilised, the gains were highly uneven. The wealthiest benefited from privatisation and deregulation, while poverty and inequality remained rampant. The rich grew richer, and the poor struggled to survive in an increasingly market-driven society where public goods were scarce and access to basic needs came with a price tag.
A starting point for modern economic imperialism
But the significance of the Chilean experiment extends beyond its borders.
The success of the Chicago Boys in Chile inspired the implementation of similar neoliberal reforms in other parts of the world. The International Monetary Fund (IMF) and World Bank, key global financial institutions, began to impose structural adjustment programs on developing nations, mirroring the Chilean model.
Countries in South America, Africa, and Asia faced similar prescriptions: austerity, privatisation, and deregulation, often enforced by international lenders and technocratic elites.
These policies, in turn, exacerbated inequality, debt, and social unrest, leading to a vicious cycle of economic instability.
In the 1980s and 1990s, neoliberalism became the dominant global economic ideology, embraced by governments of varying political stripes. Leaders like Ronald Reagan and Margaret Thatcher, inspired by Friedman’s doctrines, implemented neoliberal policies in their own countries, leading to the financialisation of the economy, the dismantling of welfare states, and the prioritisation of corporate interests over public welfare.
The Chile Project, with Friedman and Harberger at its helm, left a mixed legacy that reverberates to this day.
It not only devastated Chile’s social fabric but also set the stage for the expansion of neoliberalism on a global scale. For many, this experiment demonstrated the dangers of prioritising market efficiency over human well-being, and of imposing radical economic changes in the absence of democratic accountability.
Allende’s fall 51 years on: still reverberating today
Overall, the complicity of the US and UK in this coup cannot be understated.
It was a calculated act of imperialism, a betrayal of democratic principles in favour of economic and strategic interests. The coup in Chile was part of a broader pattern of US intervention in South America, where democratically elected leaders who challenged the capitalist order were routinely overthrown in favour of military dictatorships that aligned with US geopolitical goals. Venezuela in 2024 is a case in point.
Fifty-one years later, the consequences of that coup are still felt. Chile has made strides in rebuilding its democracy, but the scars of the Pinochet dictatorship remain. And neoliberalism, once heralded as a means of liberation, has been revealed as a tool for perpetuating inequality and consolidating power in the hands of a few. The Chilean experiment was not just a triumph of economic theory but a cautionary tale of how disaster capitalism can reshape entire societies – for the worse.
Many Chileans continue to demand justice for the crimes committed during that era, and the fight for economic equality and political sovereignty remains as relevant today as it was under Allende. His vision of a Chile free from foreign exploitation and committed to the welfare of its people is a legacy that continues to inspire progressive movements not just in South America, but across the world.
The US and UK governments have never fully reckoned with their role in the coup. In fact, their pattern of intervention in the affairs of sovereign nations continues, often under the guise of promoting democracy or combating terrorism.
But the lesson of September 11, 1973, should serve as a stark reminder of the dangers of imperial overreach.
Salvador Allende’s death was not just the end of one man’s life – it was the violent suppression of a people’s aspiration for a just and equitable society. And for that, the US and UK bear a heavy responsibility.
Featured image via the Canary
