Chile Elects A New Left-Wing President

Chile held a presidential election yesterday. This was a run-off between the two top vote-getters in a prior round. The candidates were José Kast of the Republican (conservative) Party, and Gabriel Boric of the Social Convergence (leftist) Party. Boric won easily, by about 56/44, and Kast promptly conceded and offered congratulations. Boric will replace Sebastián Piñera, a conservative.

Chile is one of the most prosperous countries in Latin America, with per capita GDP for 2020 estimated at $13,232 by the World Bank. In Central and South America, only Uruguay tops it, and just barely. And that $13,232 figure likely represents a Covid-induced downward blip, with Chile previously having hit per capita GDP (again, World Bank figures) of almost $16,000 in 2018. Granted, the $13,232 is sad by comparison to the U.S. (2020 per capita GDP of $63,544); but still, Chile has experienced enormous economic growth since the 1960s, and its current level of prosperity (again as measured by per capita GDP, World Bank figures) puts to shame its main rivals in Latin America like Mexico ($8,347), Argentina ($8,442), and Brazil ($6,797).

You would think that the Chileans, being there in Latin America, could look around themselves, see the failures of leftism everywhere staring them in the face, and want to have nothing to do with it. For example, there’s Venezuela. That’s where Hugo Chavez came to power in 1998 promising a vast program of nationalizations and redistributions to end poverty and reduce income inequality. Chavez’s successor Nicolás Maduro continues to cling to power today. Go to that World Bank chart and you will find a per capita GDP figure for Venezuela of $16,056. Oh, but that’s for 2014. Up to 2014, the World Bank was using Venezuela’s official numbers, which were completely fake; but then in that year Venezuela stopped publishing statistics entirely. For more realistic and updated data, try the Statista website. Here is their chart of Venezuela’s per capita GDP since 1985:

Commentary from Aaron O’Neill at Statista:

In 2019, Venezuela’s estimated gross domestic product (GDP) per capita dropped to 2,299 U.S. dollars from 3,404 U.S. dollars the year before. The country's GDP has been on a continuous downswing for about a decade now. . . . Currently, a major economic crisis is shaking Venezuela, resulting in hyperinflation, food and water shortages, and unemployment. Venezuela’s inflation rate has skyrocketed to over 900,000 percent in 2018, and the economy is suffering, with the Venezuelan GDP growth decreasing substantially each year since 2014.

I guess that whole leftism/socialism thing didn’t work out too well for Venezuela. Or consider Chile’s northeastern neighbor, Bolivia. That’s where socialist President Evo Morales came to power in 2006, again with a program of addressing poverty and income inequality through nationalizations and redistributions. Morales himself got ousted in a disputed election in 2019, but a 2020 re-run saw his socialist party again returned to power. The World Bank has 2020 GDP per capita in Bolivia as $3,143.

None of this stopped Chile’s voters from electing a guy promising the same kinds of policies. From a (sympathetic) BBC summary of Boric’s platform:

Mr Boric has promised to address [income] inequality by expanding social rights and reforming Chile's pension and healthcare systems, as well as reducing the work week from 45 to 40 hours, and boosting green investment. "We know there continues to be justice for the rich, and justice for the poor, and we no longer will permit that the poor keep paying the price of Chile's inequality," he said. The president-elect also promised to block a controversial proposed mining project which he said would destroy communities and the national environment.

I particularly like Boric’s pledge to tackle “climate change” by “green investment.” With population under 20 million, Chile represents less than 0.25% of the world total. How anything that Chile does is going to affect world climate is a mystery, but perhaps no more of a mystery than how a program of redistribution and “social justice” is going to bring the country the prosperity that has so far eluded it.

The same BBC article reports that after Boric’s election Chile’s stock market immediately fell by 10%.

Despite the election of this leftist ideologue, I would not give up hope for Chile quite yet. Since the departure of Augusto Pinochet in 1990, Chile has had mostly leftist presidents, including the avowed socialist Michelle Bachelet from 2006 to 2010, and again from 2014 to 2018. Indeed, the departing President, Piñera, who served from 2010 to 2014 in addition to his current term, may be the only avowed free-market President in the 30 years since Pinochet. Yet Pinochet’s economic reforms, including the privatized pension system, remain substantially in place. According to this summary at Wikipedia of the legislative election results from November, Boric’s party did not win an absolute majority in either house, and the legislature is very closely divided between left and right.

Still, I find it disconcerting to see images of legions of young supporters of Mr. Boric celebrating their great “victory.” Every four years a new cohort completely ignorant of the failures of socialism comes of age just in time to get involved in politics and inflict their fresh new idealism on the rest of society. And thus is the cycle of poor economic performance, and needless levels of poverty, continues in Latin America.