Freedom, dignity, and economic theory

The restaurant on the outskirts of Santiago was almost entirely empty at mid-afternoon. A waiter was starting to make a dance floor for the evening by pushing back tables in front of the little stage with its bongo drums and microphone. Glasses of Chilean wine, enormous blocks of salmon and other fish, and huge salads of carrots, peas, corn, cauliflower, broccoli, lettuce, and tomato in white bowls filled up the blue-clothed table. Two young Chileans from affluent families sat and talked of their relations with the have-nots and with God.

Luis Felipe Tornero, 23, will soon graduate from Universidad Alberto Hurtado, named after the founder of Hogar de Cristo. Snappily dressed in an olive shirt and gold tie, occasionally running his hand over his light-brown hair, he spoke of how his father had done well enough in an import/export business to fund the education of five children. Felipe had an apartment in the fashionable Providencia district, half-ownership of a car, and use of his family's condo in Vina del Mar. He had never been to the poorer parts of Santiago until a job took him there briefly.

Felipe has little confidence in the ability of either governments or individuals to affect the lives of many of the poor children he had encountered. "The children who bring sweet lunches from home get fat, and the poor children are thin. Not many are just right." Later, he observed, "Some people spend time with their families and help others also, but so many fathers work during the day, come home to eat dinner, watch TV, drink a beer, and that's it." He worries that what happened in Argentina could happen in Chile: "The government stole the money, the middle class disappears, and now it will be bad." He grew up in Santiago but doesn't want to live there as an adult. He would prefer a quieter life in a smaller city.

Maria Cristina Leon, a foundation professional, graduated from the university in 1993 and now has a boyfriend from Germany. She also saw school lunches as an indication of problems: "The government food had all the vitamins, but it's not prepared with love, so it's a mountain of rice with sauce and the fruit all together. Sometimes government lunches have cookies, but very bad ones. So it's much better not to rely on the government, but that means we need people to work to help others."

Will that happen? Maria isn't sure: "Many people volunteer because of their religious belief, but there is less of a religious sense among the affluent and the middle class than there was before. Some young professionals are looking for alternative ways, the oriental ones.... They are taking some part of a lot of religions, making it a personal religion. They believe in some god but they don't know what is this god. They thank God but they don't know who is this god ... and the church is living in the past. They [church leaders] have no answer for our questions. They don't even know how our society can work."

Economist Jose Pinera is confident that Chileans can find answers. "Our platform is compassionate conservatism, emphasizing both liberty and personal responsibility. We should help people develop both human capital and financial capital by emphasizing education and social security." He added, "A program grounded in Christian values, the free market, and personal responsibility will not allow people to starve, but it also requires an able-bodied man to work, save, and be responsible. We say, 'You will not smoke marijuana all day long,' and we emphasize economic growth so that poor people who are very disciplined and honest can go up the ladder."

Mr. Pinera looks back at Social Security privatization as a major success, because it "empowered Chileans and created financial capital." He acknowledges, though, that the drive to increase human capital through education reform did not proceed as well: "One problem is that Pinochet always gave the ministry of education to a teacher, so we had halfway reform."

The current situation, he said, is that "Parents have choice and private schools get some funds, but the huge governmental establishment remains. Government schools never close and they cannot go bankrupt, no matter how bad they are. Meanwhile, the Chilean congress tomorrow could decide to reduce the money for private schools." Mr. Pinera said that Chile needs "a new president, a new minister of education. The union leaders understand the threat of a complete voucher proposal, a level playing field as you say: It would take away their power. Education reform needs a president and a minister of education with the courage to stand a 60-day strike by the national teachers union. The president needs to act like Reagan with the air controllers ... he has to be willing to go on television every night telling parents, we are doing this for you, because the teachers are striking to protect their privileges, not to help children."

Electoral structure plus timidity affects not only education but every aspect of politics. "The only way to win an election in Chile is to be as ambiguous as possible, to be a very good communicator but not engage in open debate. [Compassionate conservatives are] putting forward honest, decent people and solving little problems. That's a vote-getter, but I am not comfortable with that. We need to ignite real change." Still, he is optimistic: "Our economy is now a Mercedes-Benz. The government is putting a mixture of water and gas in its tank, but the Mercedes-Benz is still there."

The 19th-century economist Adam Smith wrote about both money and morality; the economist Pinera hopes for a religious revival. "I have always been telling my uncle [who is head of the Roman Catholic Church in Chile] that the Protestants speak about God, faith, and prayer, so of course they are touching a nerve. Protestants are taking people out of poverty, stressing the daily virtues that lead to a better life and a hard-working life, not drinking. The Catholic Church needs to change." But Mr. Pinera then pulled out from under his blue shirt a cross that he wears on a thin chain around his neck, and said, "This is one thing that does not change. This makes the difference. I am an economist, but I am not preaching macro-economics. My passion is for human freedom and dignity. Without capuchino you can still live. But capuchino without dignity is nothing."